Document:

Exhibit
4.4

 

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.

 

WARRANT TO
PURCHASE PREFERRED STOCK

 

	
  Issuer:

  	
   

  	
  ARYX THERAPEUTICS, a
  California corporation

  
	
  Number of Shares:

  	
   

  	
  33,670 Shares (or as
  otherwise determined in Section 1 below)

  
	
  Class of Stock:

  	
   

  	
  Series C Preferred
  Stock

  
	
  Exercise Price:

  	
   

  	
  $1.485 per share

  
	
  Issue Date:

  	
   

  	
  December 23, 2002

  
	
  Expiration Date:

  	
   

  	
  The earlier to occur of
  (i) the tenth anniversary of the Issue Date, or (ii) the fifth anniversary of
  the closing of the first public offering of the Company’s Common Stock under
  terms and conditions that require automatic conversion of the Series C
  Preferred Stock into Common Stock.

  

 

THIS WARRANT CERTIFIES
THAT, for the agreed upon value of $1.00 and for other good and valuable
consideration, including the execution and delivery of that certain Master
Lease Agreement dated as of December     , 2002 (“Lease”),
this Warrant is issued to ATEL Ventures, Inc. and/or its assignees/nominees
(“Holder”) by ARYX THERAPEUTICS, a California corporation (the “Company”).

 

1.  ISSUANCE.

 

Subject to the terms and
conditions hereinafter set forth, the Holder is entitled upon surrender of this
Warrant and the duly executed subscription form annexed hereto as Appendix 1,
at the office of the Company, 2255 Martin Avenue, Suite F, Santa Clara, CA
95050 or such other office as the Company shall notify the Holder of in
writing, to purchase from the Company up to 33,670 shares of fully paid and
non-assessable shares (the “Shares”) of the Company’s Series C Preferred Stock
(“Preferred Stock”), at a purchase price per Share of $1.485 (the “Exercise
Price”). This Warrant may be exercised in whole or in part at any time and from
time to time until 5:00 PM, Pacific time, on the Expiration Date set forth
above, and shall be void thereafter. Until such time as this Warrant is
exercised in full or expires, the Exercise Price and the Shares are subject to
adjustment from time to time as hereinafter provided.

 

2.  EXERCISE

 

(a)  Method
of Exercise. Holder may exercise this Warrant by delivering this Warrant
together with a duly executed Notice of Exercise in substantially the form
attached as Appendix 1 hereto to the principal office of the
Company. Unless Holder is exercising the conversion right set forth in
Section 2(b), Holder shall also deliver to the Company a check for the

 

1

 

aggregate Exercise Price for the Shares being
purchased.

 

(b)  Conversion
Right. In lieu of exercising this Warrant as specified in
Section 2(a), Holder may from time to time convert this Warrant, in whole
or in part, into a number of Shares determined as follows:

 

X = Y(A-B) 

A

 

where:

X = the number of Shares
to be issued to the Holder.

 

Y= the number of Shares with respect to which this
Warrant is being exercised.

 

A= the Fair Market Value (as determined pursuant to
Section 1.4 below) of one Share.

 

B= the Exercise Price.

 

(c)  Fair
Market Value.

 

(i)           
If shares of Common
Stock are traded on a nationally recognized securities exchange or over the
counter market, the fair market value of one Share shall be the average closing
price of a share of Common Stock over the five day trading period immediately
preceding the date of Holder’s Notice of Exercise to the Company (or such
lesser number of trading days as the stock has been publicly traded).
Notwithstanding the foregoing, in the event the Warrant is exercised in
connection with the Company’s initial public offering of Common Stock, the fair
market value per share shall be the product of (i) the per share offering price
to the public of the Company’s initial public offering, and (ii) the number of
Shares of Common Stock into which each share of Preferred Stock is convertible
at the time of exercise.

 

If shares of Common Stock
are not traded on a nationally recognized securities exchange or over the
counter market, the Board of Directors of the Company shall determine the fair
market value of a share of Common Stock in its reasonable good faith judgment.
The foregoing notwithstanding, if Holder advises the Board of Directors in
writing that Holder disagrees with such determination, then the Company and
Holder shall promptly agree upon a reputable investment banking firm to
undertake such valuation. If the valuation of such investment banking firm is
greater than that determined by the Board of Directors by five percent (5%) or
more, then all fees and expenses of such investment banking firm shall be paid
by the Company. In all other circumstances, such fees and expenses shall be
paid by Holder. The determination of any such investment banking firm shall be
conclusive in any event.

 

(d)  Delivery
of Certificate and New Warrant. Promptly after Holder exercises or converts
this Warrant, the Company shall deliver to Holder certificates for the Shares
acquired and, if this Warrant has not been fully exercised or converted and has
not expired, a new Warrant representing the right to purchase the Shares not so
acquired.

 

(e)  Replacement
of Warrants. On receipt of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant and, in the 

 

2

 

case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant,
a new warrant of like tenor.

 

(f)  Assumption
on Sale, Merger, or Consolidation of the Company.

 

(i)           
“Acquisition”. For the purpose of this Warrant,
“Acquisition” means any sale, transfer, exclusive license, or other disposition
of all or substantially all of the assets of the Company, or any acquisition,
reorganization, consolidation or merger of the Company where the holders of the
Company’s outstanding voting equity securities immediately prior to the
transaction beneficially own less than 50.01% of the outstanding voting equity
securities of the surviving or successor entity immediately following the
transaction.

 

(ii)          
Assumption of
Warrant. Upon the
closing of any Acquisition and as a condition precedent thereto, the successor
or surviving entity shall assume the obligations of this Warrant, and this
Warrant shall be exercisable for the same securities and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of
this Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing. The Exercise Price shall be adjusted
accordingly, and the Exercise Price and number and class of Shares shall
continue to be subject to adjustment from time to time in accordance with the
provisions hereof.

 

(g)  Conversion
or Redemption of Series C Preferred Stock. Should all of the Company’s
Series C Preferred Stock be at any time prior to the expiration of the Warrant
or any portion thereof, redeemed or converted into shares of the Company’s
Common Stock in accordance with its Articles of Incorporation (“Charter”), then
this Warrant shall become immediately exercisable prior to such event for that
number of shares of the Common Stock that would have been received if this
Warrant had been exercised in full and the Series C Preferred Stock received
thereupon had been simultaneously converted immediately prior to such event,
and the Exercise Price shall immediately be adjusted to equal the quotient
obtained by dividing (x) the aggregate Exercise Price of the maximum number of
shares of Series C Preferred Stock for which this Warrant was exercisable
immediately prior to such conversion or redemption, by (y) the number of shares
of Common Stock for which this Warrant is exercisable immediately after such
conversion or redemption. For purposes of the forgoing, the “Charter” shall
mean the Articles of Incorporation of the Company, as amended and /or restated
from time to time.

 

3.  ADJUSTMENTS.

 

(a)  Stock
Dividends, Splits, Etc. If the Company declares or pays a dividend on the
outstanding shares of Preferred Stock, payable in Common Stock or other
securities, or subdivides the outstanding Preferred Stock into a greater amount
of Preferred Stock, then upon exercise of this Warrant, for each Share
acquired, Holder shall receive, without cost to 

 

3

 

Holder, the total number and kind of securities to
which Holder would have been entitled had Holder owned the Shares of record as
of the date the dividend or subdivision occurred. If the outstanding Preferred
Stock is subdivided into a greater number of shares, the Exercise Price shall
be proportionately decreased and the number of Shares shall be proportionately
increased.

 

(b)  Reclassification,
Exchange or Substitution. Upon any reclassification, exchange,
substitution, or other event that results in a change of the number and/or
class of the securities issuable upon exercise or conversion of this Warrant,
Holder shall be entitled to receive, upon exercise or conversion of this
Warrant, the number and kind of securities and property that Holder would have
received for the Shares if this Warrant had been exercised immediately before
such reclassification, exchange, substitution, or other event. The Company or
its successor shall promptly issue to Holder a new Warrant for such new
securities or other property. The new Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 3 including, without limitation, adjustments to
the Exercise Price and to the number of securities or property issuable upon
exercise of the new Warrant. The provisions of this Section 3(b) shall
similarly apply to successive reclassifications, exchanges, substitutions, or
other events.

 

(c)  Adjustments
for Combinations, Etc. If the outstanding shares of Common Stock are
combined or consolidated, by reclassification or otherwise, into a lesser
number of shares, the Exercise Price shall be proportionately increased and the
number of Shares shall be proportionately decreased.

 

(d)  No
Impairment. Except and to the extent waived or consented to by the Holder,
the Company shall not, by amendment of its Articles of Incorporation or
by-laws, or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issue, or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed under this Warrant by the Company, but shall
at all times in good faith assist in carrying out of all the provisions of this
Section 3 and in taking all such action as may be necessary or appropriate to
protect Holder’s rights under this Article against impairment.

 

(e)  Fractional
Shares. No fractional Shares shall be issuable upon exercise or conversion
of the Warrant and the number of Shares to be issued shall be rounded down to
the nearest whole Share. If a fractional Share interest arises upon any
exercise or conversion of this Warrant, the Company shall eliminate such
fractional Share interest by paying Holder an amount computed by multiplying
such fractional interest by the Fair Market Value (determined in accordance
with Section 2(c) above) of one Share.

 

(f)  Certificate
as to Adjustments. Upon each adjustment of the Exercise Price, number of
Shares or class of security for which this Warrant is exercisable, the Company
at its expense shall promptly compute such adjustment, and furnish Holder with
a certificate of its chief financial officer setting forth such adjustment and
the facts upon which such adjustment is based. The Company shall, upon written
request, furnish Holder a certificate setting forth the Exercise Price, number
of Shares class of security for which this Warrant is exercisable in effect
upon the date thereof and the series of adjustments leading to such Exercise
Price, number of 

 

4

 

Shares and class of security.

 

(g)  Issuance
of Additional Shares. In the event that the Company shall issue shares of
its capital stock at a price less than the Exercise Price after the date
hereof, the price at which the Shares may be converted into the Company’s
Common Stock shall be subject to the same adjustment, if any, to the price at
which the Company’s Series C Preferred Stock may be converted into the
Company’s Common Stock provided in the Company’s Charter. The Company shall give
Holder prior written notice of the issuance of stock occurring after the Issue
Date, including the price at which the stock is to be sold the number of shares
to be issued.

 

4.  REPRESENTATIONS
AND COVENANTS OF THE COMPANY.

 

(a)  Representations
and Warranties.  The Company hereby represents and warrants to Holder
as follows:

 

(i)           
All Shares which may
be issued upon the due exercise of this Warrant shall, upon issuance, be duly
authorized, validly issued, fully paid and non-assessable, and free of any
liens and encumbrances except for restrictions on transfer provided for herein
or under applicable federal and state securities laws.

 

(ii)          
The authorized
capital stock of the Company consists of 50,000,000 shares, consisting of 31,343,931
shares of Common Stock, and 18,656,069 shares of preferred stock, of which
757,576 shares have been designated Series A Preferred Stock, 398,493 shares
have been designated Series B Preferred Stock and 17,500,000 shares have been
designated Series C Preferred Stock. Appendix 2 sets forth all of the
outstanding shares of common stock and preferred stock and outstanding options,
warrants, convertible securities, convertible debentures, and rights to
acquire, subscribe for, and/or purchase any Common Stock, preferred stock
and/or other capital stock of the Company or any securities or debentures
convertible into or exchangeable for Common Stock, preferred stock and/or other
capital stock of the Company.

 

(iii)         
The Company covenants
that it shall at all times cause to be reserved and kept available out of its
authorized and unissued shares such number of shares of its Preferred Stock and
other securities as will be sufficient to permit the exercise in full of this
Warrant and the conversion or exchange of such Preferred Stock into or for such
other securities.

 

(iv)         
The execution and
delivery by the Company of this Warrant and the performance of all obligations
of the Company hereunder, including the issuance to Holder 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 Lease and this Warrant are
not inconsistent with the Company’s Charter or By-laws, 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 Lease and this Warrant Agreement constitute legal, valid and
binding agreements of the Company, enforceable in accordance with their
respective terms.

 

(v)          
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 

 

5

 

governmental authority or agency is required with
respect to the execution, delivery and performance by the Company of its
obligations under this Warrant, 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.

 

(b)  Notice
of Certain Events. If the Company proposes at any time (a) to declare
any dividend or distribution upon its Common Stock, whether in cash, property,
stock, or other securities and whether or not a regular cash dividend;
(b) to offer for subscription pro rata to the holders of Common Stock any
additional shares of stock of any class or series or other rights; (c) to
effect any reclassification or recapitalization of its Common Stock;
(d) to merge or consolidate with or into any other corporation, or sell,
lease, license, or convey all or substantially all of its assets, or to
liquidate, dissolve or wind up; or (e) offer holders of registration rights the
opportunity to participate in an underwritten public offering of the company’s
securities for cash, then, in connection with each such event, the Company
shall give Holder (1) at least 10 days prior written notice of the
date on which a record will be taken for such dividend, distribution, or
subscription rights (and specifying the date on which the holders of securities
of the Company shall be entitled to receive such dividend, distribution or
rights) or for determining rights to vote, if any, in respect of the matters
referred to in (c) and (d) above; (2) in the case of the matters referred
to in (c) and (d) above at least 10 days prior written notice of the date
when the same will take place (and specifying the date on which the holders of
securities of the Company will be entitled to exchange their securities of the
Company for securities or other property deliverable upon the occurrence of
such event); and (3) in the case of the matter referred to in (e) above,
the same notice as is given to the holders of such registration rights.

 

(c)  Information
Rights. So long as the Holder holds this Warrant and/or any of the Shares,
the Company shall deliver to the Holder (a) promptly after mailing, copies
of all notices or other written communications to the shareholders of the
Company, (b) within one-hundred twenty (120) days after the end of each
fiscal year of the Company, the annual audited financial statements of the
Company certified by independent public accountants of recognized standing and
(c) such other financial statements required under and in accordance with any
loan documents between Holder and the Company or if there are no such
requirements (or if the subject loan(s) no longer are outstanding), then within
forty-five (45) days after the end of each of the first three quarters of each
fiscal year, the Company’s quarterly, unaudited financial statements.

 

(d)  Registration
Under Securities Act of 1933, as amended. The Company shall use its
reasonable efforts to cause Holder to become a party to that certain Amended
and Restated Investor Rights Agreement, dated as of June 28, 2002, by and among
the Company and certain investors named therein (“Registration Rights
Agreement”) upon the occurrence of the Company’s next equity financing in which
the Registration Rights Agreement will be amended, for the sole purpose of
granting Holder registration rights as provided therein; provided, that Holder shall agree to
certain market-standoff provisions as provided therein

 

5.  REPRESENTATIONS
OF HOLDER.

 

(a)  Acquisition
of Warrant for Personal Account. The Holder represents and warrants that it
is acquiring the Warrant and the underlying Shares solely for its account for 

 

6

 

investment and not with a view to or for sale or
distribution of said Warrant or the underlying Shares or any part thereof. The
Holder also represents that the entire legal and beneficial interests of the
Warrant and the underlying Shares the Holder is acquiring is being acquired
for, and will be held for, its account only.

 

(b)  Securities
Are Not Registered.

 

(i)  The Holder
understands that the Warrant and the underlying Shares have not been registered
under the Securities Act of 1933, as amended (the “Act”) on the basis that no
distribution or public offering of the stock of the Company is to be effected.
The Holder realizes that the basis for the exemption may not be present if,
notwithstanding its representations, the Holder has a present intention of
acquiring the securities for a fixed or determinable period in the future,
selling (in connection with a distribution or otherwise), granting any
participation in, or otherwise distributing the securities. The Holder has no
such present intention.

 

(ii)  The
Holder recognizes that the Warrant and the underlying Shares must be held
indefinitely unless they are subsequently registered under the Act or an
exemption from such registration is available.

 

(iii)  The
Holder is aware that neither the Warrant nor the underlying Shares may be sold
pursuant to Rule 144 adopted under the Act unless certain conditions are met,
including, among other things, the existence of a public market for the shares,
the availability of certain current public information about the Company, the
resale following the required holding period under Rule 144 and the number of
shares being sold during any three month period not exceeding specified
limitations. Holder is aware that the conditions for resale set forth in Rule
144 have not been satisfied and that the Company presently has no plans to
satisfy these conditions in the foreseeable future.

 

(c)  Disposition
of Warrant and the Underlying Shares. The Holder further agrees not to make
any disposition of all or any part of the Warrant or the underlying Shares in
any event unless and until:

 

(i)  The
Company shall have received a letter secured by the Holder from the Securities
and Exchange Commission stating that no action will be recommended to the
Commission with respect to the proposed disposition; or

 

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

 

(iii)  The
Holder shall have notified the Company of the proposed disposition and shall
have furnished the Company with a detailed statement of the circumstances
surrounding the proposed disposition, and if reasonably requested by the
Company, the Holder shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company, for the Holder to the effect
that such disposition will not require registration of such 

 

7

 

Warrant or Exercise Shares under the Act or any
applicable state securities laws, except that the Company shall not require
Holder to provide an opinion of counsel if the transfer is to an affiliate of
Holder, or if (a) there is no material question as to the availability of
current information as referenced in Rule 144(c), (b) Holder represents
that it has complied with Rule 144(d) and (e) in reasonable detail, (c)
the selling broker represents that it has complied with Rule 144(f), and
(d) the Company is provided with a copy of Holder’s notice of proposed sale.

 

6. MISCELLANEOUS.

 

(a)  Automatic
Conversion upon Expiration. In the event that, upon the Expiration Date,
the Fair Market Value of one Share (or other security issuable upon the
exercise hereof) as determined in accordance with Section 2(c) above is greater
than the Exercise Price in effect on such date, then this Warrant shall automatically
be deemed on and as of such date to be converted pursuant to Section 2(b) above
as to all Shares (or such other securities) for which it shall not previously
have been exercised or converted, and the Company shall promptly deliver a
certificate representing the Shares (or such other securities) issued upon such
conversion to the Holder.

 

(b)  Legends.
This Warrant and the Shares (and the securities issuable, directly or
indirectly, upon conversion of the Shares, if any) shall be imprinted with a
legend in substantially the following form:

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR
PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

 

(c)  Compliance
with Securities Laws on Transfer. This Warrant and the Shares (and the
securities issuable, directly or indirectly, upon conversion of the Shares, if
any) may not be transferred or assigned in whole or in part without compliance
with applicable federal and state securities laws by the transferor and the
transferee (including, without limitation, the delivery of investment
representation letters).

 

(d)  Transfer
Procedure. Subject to the provisions of Section 5(c), Holder may
transfer all or part of this Warrant and/or the Shares issuable upon exercise
of this Warrant (or the securities issuable, directly or indirectly, upon
conversion of the Shares, if any) at any time to its affiliate, ATEL Venture Fund, LLC, or to any other
affiliate of Holder, by giving the Company notice of the portion of the Warrant
being transferred setting forth the name, address and taxpayer identification
number of the transferee and surrendering this Warrant to the Company for
reissuance to the transferee(s) (and Holder if applicable), and a
representation that such transferee is an affiliate of Holder. Such transferee
shall sign an investment letter in form and substance satisfactory to the
Company.

 

(e)  Notices.
All notices and other communications from the Company to the Holder, or vice
versa, shall be deemed delivered and effective when given personally or sent by

 

8

 

electronic facsimile transmission, express overnight
courier service, or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such holder from time
to time, but in all cases, unless instructed in writing otherwise, the Company
shall deliver a copy of all notices to Holder at  235 Pine Street, 6th Floor, San Francisco CA
94104,  Attention:  General Counsel.

 

(f)  Waiver.
This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.

 

(g)  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 Holder
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 Holder or any other person entitled to the benefit of this
Warrant requiring specific performance of any or all provisions hereof or
enjoining the Company from continuing to commit any such breach of this
Warrant.

 

(h)  Attorneys
Fees. In the event of any dispute between the parties concerning the terms
and provisions of this Warrant, the party prevailing in such dispute shall be
entitled to collect from the other party all costs incurred in such dispute,
including reasonable attorneys’ fees.

 

(i)  Governing
Law. This Warrant shall be governed by and construed in accordance with the
laws of the State of California, without giving effect to its principles
regarding conflicts of law.

 

/

 

/

 

/

 

/

 

/

 

/

 

/

 

[Remainder of page
intentionally left blank]

 

9

 

IN WITNESS WHEREOF, the
Company has caused this Warrant to Purchase Preferred Stock to be executed by
its duly authorized representative as of the date first above written.

 

	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
  ARYX THERAPEUTICS

  
	
   

  	
  By:

  	
  /s/ Peter Milner, M.D.

  	
   

  
	
   

  	
  Name: 

  	
  Peter Milner, M.D.

  	
   

  
	
   

  	
  Title: 

  	
  President and CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HOLDER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ATEL VENTURES, INC.

  
	
   

  	
  By:

  	
  /s/ Dean Cash

  	
   

  
	
   

  	
  Name:

  	
  Dean Cash

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

10

 

APPENDIX 1

 

NOTICE OF EXERCISE

 

1.            
The undersigned
hereby elects to
purchase              shares
of the
                        
stock of
                                    
pursuant to Section 2(a) of the attached Warrant, and tenders herewith payment
of the Exercise Price of such shares in full.

 

1.            
The undersigned
hereby elects to convert the attached Warrant into Shares in the manner
specified in Section 2(b) of the attached Warrant. This conversion is exercised
with respect to
                        
of shares of the
                                                
Stock of
                                      .

 

[Strike paragraph that
does not apply.]

 

2.            
Please issue a
certificate or certificates representing said shares in the name of the
undersigned or in such other name as is specified below:

 

	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  	
   

  

 

3.            
The undersigned
represents it is acquiring the shares solely for its own account and not as a
nominee for any other party and not with a view toward the resale or
distribution thereof except in compliance with applicable securities laws.

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Date)

  	
   

  	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  

 

11

 

APPENDIX 2

 

CAPITALIZATION

 

Outstanding Capital Stock:

 

Outstanding options, warrants, convertible securities,
convertible debentures, and rights to acquire, subscribe for, and/or purchase
any Common Stock, preferred stock and/or other capital stock of the Company or
any securities or debentures convertible into or exchangeable for Common Stock,
preferred stock and/or other capital stock of the Company:

 

12Exhibit 4.5

 

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR
ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED UNLESS
SUCH SALE OR TRANSFER IS IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF
SUCH ACT AND APPLICABLE LAWS OR SOME OTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS IS AVAILABLE WITH RESPECT THERETO.

 

 

PREFERRED STOCK PURCHASE WARRANT

 

 

	
  Warrant No. 1

  	
   

  	
  Number of Shares: To be determined.

  
	
   

  	
   

  	
  Series D Preferred Stock

  

 

 

ARYX THERAPEUTICS, INC.

 

 

Effective as of March 28, 2005

 

Void after March 28, 2012

 

1.             Issuance.
This Preferred Stock Purchase Warrant (the “Warrant”)
is issued to LIGHTHOUSE CAPITAL PARTNERS V, L.P.
(the “Holder”) by ARYX
THERAPEUTICS, INC., a California corporation (hereinafter with its
successors called the “Company”).

 

2.             Purchase
Price; Number of Shares.

 

(a)                                  The
registered holder of this Warrant, commencing on the date hereof, is entitled
upon surrender of this Warrant with the subscription form annexed hereto duly
executed, at the principal office of the Company, to purchase from the Company,
at a price per share of $1.655 (the “Purchase Price”),
302,114 fully paid and nonassessable shares of the Company’s Series D Preferred
Stock (the “Exercise Quantity (the “Preferred Stock”).

 

(b)                                  The
Exercise Quantity shall automatically increase by an amount equal to 5% of the
Aggregate Advances under the Loan Agreement divided by the Purchase Price.

 

In addition to other
terms which may be defined herein, the following terms, as used in this
Warrant, shall have the following meanings:

 

(i)                                    “Aggregate Advances” means the aggregate
dollar amount of all Advances made under the Loan Agreement, whether such
Advances are outstanding or prepaid, at the time of any scheduled adjustment to
the Exercise Quantity.

 

(ii)                                “Loan Agreement” means that certain Loan
and Security Agreement No. 4521 dated March 28, 2005 between the Company and
Lighthouse Capital Partners V, L.P.

 

Any term not defined
herein shall have the meaning as set forth in the Loan Agreement.

 

Until such time as this
Warrant is exercised in full or expires, the Purchase Price and the securities
issuable upon exercise of this Warrant are subject to adjustment as hereinafter
provided. The person or persons in whose name or names any certificate
representing shares of Preferred Stock is issued hereunder shall be deemed to
have become the holder of record of the shares represented thereby as at the
close of business on the date this Warrant is exercised with respect to such
shares, whether or not the transfer books of the Company shall be closed.

 

1

 

3.                                      Payment
of Purchase Price. The Purchase Price may be paid (i) in cash or by check, (ii)
by the surrender by the Holder to the Company of any promissory notes or other
obligations issued by the Company, with all such notes and obligations so
surrendered being credited against the Purchase Price in an amount equal to the
principal amount thereof plus accrued interest to the date of surrender, or
(iii) by any combination of the foregoing.

 

4.                                      Net
Issue Election. The Holder may elect to receive, without the payment by the
Holder of any additional consideration, shares of Preferred Stock equal to the
value of this Warrant or any portion hereof by the surrender of this Warrant or
such portion to the Company, with the net issue election notice annexed hereto
duly executed, at the principal office of the Company. Thereupon, the Company
shall issue to the Holder such number of fully paid and nonassessable shares of
Preferred Stock as is computed using the following formula:

 

X= Y(A-B)

A

 

 

where:   
X =                              the
number of shares of Preferred Stock to be issued to the Holder pursuant to this
Section 4.

 

Y =                              the
number of shares of Preferred Stock covered by this Warrant in respect of which
the net issue election is made pursuant to this Section 4.

 

A =                            the
Fair Market Value (defined below) of one share of Preferred Stock, as
determined at the time the net issue election is made pursuant to this Section 4.

 

B =                              the
Purchase Price in effect under this Warrant at the time the net issue election
is made pursuant to this Section 4.

 

“Fair Market Value” of a share of Preferred Stock (or  fully paid and
nonassessable shares of the Company’s common stock (the “Common Stock”)
if the Preferred Stock has been automatically converted into Common Stock) as
of the date that the net issue election is made (the “Determination
Date”) shall mean:

 

(i)                                    If
the net issue election is made in connection with and contingent upon the
closing of the sale of the Company’s Common Stock to the public in a public
offering pursuant to a Registration Statement under the 1933 Act (a “Public Offering”), and if the Company’s Registration Statement
relating to such Public Offering (“Registration Statement”)
has been declared effective by the Securities and Exchange Commission, then the
initial “Price to Public” specified in the final prospectus with respect to
such offering multiplied by the number of shares of Common Stock into which
each share of Preferred Stock is then convertible.

 

(ii)                                If
the net issue election is not made in connection with and contingent upon a
Public Offering, then as follows:

 

(a)                                  If
traded on a securities exchange or the Nasdaq National Market, the fair market
value of the Common Stock shall be deemed to be the average of the closing or
last reported sale prices of the Common Stock on such exchange or market over
the five day period ending five trading days prior to the Determination Date,
and the fair market value of the Preferred Stock shall be deemed to be such
fair market value of the Common Stock multiplied by the number of shares of
Common Stock into which each share of Preferred Stock is then convertible;

 

(b)                                  If
otherwise traded in an over-the-counter market, the fair market value of the
Common Stock shall be deemed to be the average of the closing ask prices of the
Common Stock over the five day period ending five trading days prior to the
Determination Date, and the fair market value of the Preferred Stock shall be
deemed to be such fair market value of the Common Stock multiplied by the
number of shares of Common Stock into which each share of Preferred Stock is
then convertible; and

 

2

 

(c)                                  If
there is no public market for the Common Stock, then fair market value shall be
determined in good faith by the Company’s Board of Directors.

 

5.                                      Partial
Exercise. This Warrant may be exercised in part, and the Holder shall be entitled
to receive a new warrant, which shall be dated as of the date of this Warrant,
covering the number of shares in respect of which this Warrant shall not have
been exercised.

 

6.                                      Fractional
Shares. In no event shall any fractional share of Preferred Stock be issued
upon any exercise of this Warrant. If, upon exercise of this Warrant in its
entirety, the Holder would, except as provided in  this Section 6, be
entitled to receive a fractional share of Preferred Stock, then the Company
shall, in lieu of issuance of any fractional share, pay the Holder otherwise
entitled to such fraction a sum in cash equal to the product resulting from
multiplying the then current Fair Market Value of one share of Preferred Stock
by such fraction.

 

7.                                      Expiration
Date; Automatic Exercise. This Warrant shall expire at the earliest to
occur of (i) the close of business on March 28, 2012; (ii) two years after the
effective date of the initial Public Offering of the Company on the NASDAQ or
other stock exchange in the United States; or (iii) the effective date of a
Merger as defined below, unless otherwise assumed per the language below; (the “Expiration Date”) and shall be void
thereafter.

 

“Merger” means: (i) a sale of all or
substantially all of the Company’s assets to an Unaffiliated Entity (as defined
below), or (ii) the merger, consolidation or acquisition of the Company with,
into or by an Unaffiliated Entity (other than a merger or consolidation for the
principle purpose of changing the domicile of the Company or a bona fide round
of preferred stock equity financing), the result of which is that stockholders
of the Company immediately prior to the merger, consolidation or acquisition do
not own or control more than 50% of the voting power of the surviving entity
immediately following such merger, consolidation or acquisition. “Unaffiliated Entity” means any entity that is owned or
controlled by parties who own less than 20% of the combined voting power of the
voting securities of the Company immediately prior to such merger,
consolidation or acquisition. Notwithstanding the foregoing, in the event that
any outstanding warrants to purchase preferred equity securities of the Company
are assumed by the successor entity of a Merger (or parent thereof), this
Warrant will be similarly assumed. Notwithstanding anything to the contrary in
this Warrant, if Holder exercises this Warrant after receiving a notice from
the Company of a proposed merger or if the exercise was otherwise precipitated
by such proposed Merger, the Company will hold the exercise notice, without
processing such notice, until immediately prior to the consummation of the
Merger, at which time the exercise notice shall be processed. If the Merger is
terminated, the Holder will have 30 days from the date the Company gives Holder
notice indicating such termination to rescind its exercise notice, otherwise
the exercise notice shall be processed by the Company as set forth herein. In
the event of such rescission, this Warrant will continue to be exercisable on
the same terms and conditions.

 

Notwithstanding the
foregoing, this Warrant shall automatically be deemed to be exercised in full
pursuant to the provisions of Section 4
hereof, without any further action on behalf of the Holder, immediately prior
to the time this Warrant would otherwise expire pursuant to this Section 7, unless
otherwise assumed per above.

 

8.                                      Reserved
Shares; Valid Issuance. The Company covenants that it will at all times
from and after the date hereof reserve and keep available such number of its authorized
shares of Preferred Stock and Common Stock free from all preemptive or similar
rights therein, as will be sufficient to permit, respectively, the exercise of
this Warrant in full and the conversion into shares of Common Stock of all
shares of Preferred Stock receivable upon such exercise. The Company further
covenants that such shares as may be issued pursuant to such exercise and/or
conversion will, upon issuance, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issuance thereof.

 

9.                                      Stock
Splits and Dividends. If after the date hereof the Company shall subdivide
the Preferred Stock, by split-up or otherwise, or combine the Preferred Stock,
or issue additional shares of Preferred Stock in payment of a stock dividend on
the Preferred Stock, the number of shares of Preferred Stock issuable on the
exercise of this Warrant shall forthwith be proportionately increased in the
case of a subdivision or stock dividend, or

 

3

 

proportionately decreased
in the case of a combination, and the Purchase Price shall forthwith be
proportionately decreased in the case of a subdivision or stock dividend, or
proportionately increased in the case of a combination.

 

10.                               Adjustments
for Diluting Issuances. The other antidilution rights applicable to the
Preferred Stock and the Common Stock of the Company are set forth in the
Restated Articles of Incorporation, as amended from time to time (the “Certificate”), a true and complete copy in its current form
which is attached hereto as Exhibit A.
Such rights shall not be restated, amended or modified in any manner which
adversely affects the Holder differently than the holders of Preferred Stock
without such Holder’s prior written consent. The Company shall promptly provide
the Holder hereof with any restatement, amendment or modification to the
Certificate promptly after the same has been made.

 

11.                               Mergers
and Reclassifications. Subject to Section
7, if after the date hereof the Company shall enter into any
Reorganization (as hereinafter defined), then, as a condition of such
Reorganization, lawful provisions shall be made, and duly executed documents
evidencing the same from the Company or its successor shall be delivered to the
Holder, so that the Holder shall thereafter have the right to purchase, at a
total price not to exceed that payable upon the exercise of this Warrant in
full, the kind and amount of shares of stock and other securities and property
receivable upon such Reorganization by a holder of the number of shares of
Preferred Stock which might have been purchased by the Holder immediately prior
to such Reorganization, and in any such case appropriate provisions shall be
made with respect to the rights and interest of the Holder to the end that the
provisions hereof (including without limitation, provisions for the adjustment
of the Purchase Price and the number of shares issuable hereunder and the
provisions relating to the net issue election) shall thereafter be applicable
in relation to any shares of stock or other securities and property thereafter
deliverable upon exercise hereof. For the purposes of this Section 11,
the term “Reorganization” shall include without
limitation any reclassification, capital reorganization or change of the
Preferred Stock (other than as a result of a subdivision, combination or stock
dividend provided for in Section 9
hereof), or any consolidation of the Company with, or merger of the Company
into, another corporation or other business organization (other than a merger
in which the Company is the surviving corporation and which does not result in
any reclassification or change of the outstanding Preferred Stock), or any sale
or conveyance to another corporation or other business organization of all or
substantially all of the assets of the Company.

 

12.                               Certificate
of Adjustment. Whenever the Purchase Price is adjusted, as herein provided,
the Company shall promptly deliver to the Holder a certificate of the Company’s
chief financial officer setting forth the Purchase Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment.

 

13.                               Notices
of Record Date, Etc. In the event of:

 

(a)                                  any
taking by the Company of a record of the holders of any class of securities for
the purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or any right to subscribe for, purchase, sell
or otherwise acquire or dispose of any shares of stock of any class or any
other securities or property, or to receive any other right;

 

(b)                                  any
reclassification of the capital stock of the Company, capital reorganization of
the Company, consolidation or merger involving the Company, or sale or
conveyance of all or substantially all of its assets; or

 

(c)                                  any
voluntary or involuntary dissolution, liquidation or winding-up of the Company;

 

then in each such event the Company will provide or
cause to be provided to the Holder a written notice thereof. Such notice shall
be provided at least 10 business days prior to the date specified in such
notice on which any such action is to be taken.

 

14.                               Representations,
Warranties and Covenants. This Warrant is issued and delivered by the
Company and accepted by each Holder on the basis of the following
representations, warranties and covenants made by the Company:

 

4

 

(a)                                  The
Company has all necessary authority to issue, execute and deliver this Warrant
and to perform its obligations hereunder. This Warrant has been duly authorized
issued, executed and delivered by the Company and is the valid and binding
obligation of the Company, enforceable in accordance with its terms.

 

(b)                                  The
shares of Preferred Stock issuable upon the exercise of this Warrant have been
duly authorized and reserved for issuance by the Company and, when issued in
accordance with the terms hereof, will be validly issued, fully paid and
nonassessable.

 

(c)                                  The
issuance, execution and delivery of this Warrant do not, and the issuance of
the shares of Preferred Stock upon the exercise of this Warrant in accordance
with the terms hereof will not, (i) violate or contravene the Company’s
Certificate or by-laws, or any law, statute, regulation, rule, judgment or
order applicable to the Company, (ii) violate, contravene or result in a
material breach or default under any material contract, material agreement or
material instrument to which the Company is a party or by which the Company or
any of its assets are bound or (iii) require the consent or approval of or the
filing of any notice or registration with any person or entity.

 

(d)                                  As
of the date hereof, the authorized capital stock of the Company consists of (i)
75,787,832 shares of Common Stock, of which 5,330,082 shares are issued and
outstanding, (ii) 757,576 shares of Series A Preferred Stock, all of which are
issued and outstanding shares, (iii) 398,493 shares of Series B Preferred
Stock, all of which are issued and outstanding shares, (iv) 17,056,099 shares
of Series C Preferred Stock, of which 16,952,228  are issued and outstanding shares, and (v)
34,000,000 shares of Series D Preferred Stock, of which 33,232,629 are issued and outstanding shares. The Company shall
provide Holder on the date first written above a capitalization table
summarizing the capitalization of the Company. Upon request, the Company will
provide Holder with a current capitalization table indicating changes, if any,
to the number of outstanding shares of common stock and preferred stock;
provided that Holder shall not make such request more than once per calendar
quarter.

 

15.                               Registration
Rights. Upon receiving the requisite number of written consents required
under the Rights Agreement (as defined below) to amend such agreement, the
Company shall grant to the Holder all the rights of a “Holder” and an “Investor”
under the Company’s Amended and Restated Investors’ Rights Agreement dated as
of May 26, 2004 (the “Rights Agreement”),
including, without limitation, the right to receive financial information and
the registration rights contained therein, so that (i) the shares of Common
Stock issuable upon conversion of the shares of Preferred Stock issuable upon
exercise of this Warrant shall be “Registrable Securities,”
and (ii) the Holder shall be a “Holder” and an “Investor” for all purposes of
such Rights Agreement, subject to the terms and conditions set forth in the
Rights Agreements.

 

16.                               Amendment.
The terms of this Warrant may be amended, modified or waived only with the
written consent of the Holder and the Company.

 

17.                               Representations
and Covenants of the Holder. This Warrant has been entered into by the
Company in reliance upon the following representations and covenants of the
Holder, which by its execution hereof the Holder hereby confirms:

 

(a)                                  Investment
Purpose. The right to acquire Preferred Stock or the Preferred Stock
issuable upon exercise of the Holder’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 Holder has no present intention of selling or engaging in any
public distribution of the same except pursuant to a registration or exemption.

 

(b)                                  Accredited
Investor. Holder is an “accredited investor” within the meaning of the
Securities and Exchange Rule 501 of Regulation D, as presently in effect.

 

(c)                                  Private
Issue. The Holder understands (i) that the Preferred Stock issuable upon
exercise of the Holder’s rights contained herein is not registered under the
1933 Act or qualified under applicable state securities laws on the ground that
the issuance contemplated by this Warrant will be exempt from the

 

5

 

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 17.

 

(d)                                  Financial
Risk. The Holder 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)                                  Rule 144. The Holder is aware that neither the Warrant, the
Preferred Shares, nor the Common Stock issuable upon conversion thereof may be
sold pursuant to Rule 144 adopted under the 1933 Act unless certain conditions
are met, including, among other things, the existence of a public market for
the shares, the availability of certain current public information about the
Company, the resale following the required holding period under Rule 144 and the
number of shares being sold during any three month period not exceeding
specified limitations. Holder is aware that the conditions for resale set forth
in Rule 144 have not been satisfied and that the Company presently has no plans
to satisfy these conditions in the foreseeable future.

 

(f)                                    Market
Stand-Off Agreement.

 

Holder hereby agrees that
Holder shall not, without the prior written consent of the managing
underwriters, sell or otherwise transfer or dispose of any Common Stock (or
other securities) of the Company held by Holder immediately prior to the
effective date of the registration statement (other than those included in the
registration) for a period specified by the representative of the underwriters
of Common Stock (or other securities) of the Company not to exceed one hundred
eighty (180) days following the effective date of a registration statement of
the Company filed under the Securities Act; provided,  that:

 

(i)                                    such agreement shall apply only to the
Company’s Public Offering; and

 

(ii)                                all officers, directors and one percent
(1%) or greater shareholders of the Company are subject to similar agreements.

 

Holder agrees to execute and deliver such other
agreements as may be reasonably requested by the Company or the underwriter
which are consistent with the foregoing or which are necessary to give further
effect thereto. The obligations described in this Section 17(f) shall not apply to a registration relating
solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that
may be promulgated in the future, or a registration relating solely to a
Commission Rule 145 transaction on Form S-4 or similar forms that may be
promulgated in the future. The Company may impose stop-transfer instructions
with respect to the shares of Common Stock (or other securities) subject to the
foregoing restriction until the end of said one hundred eighty (180) day
period.

 

18.                               Notices,
Transfers, Etc.

 

(a)                                  Any
notice or written communication required or permitted to be given to the Holder
may be given by certified mail or delivered to the Holder at the address most
recently provided by the Holder to the Company.

 

(b)                                  Subject
to compliance with applicable federal and state securities laws and the
transfer restrictions set forth in Section 2.1 of the Rights Agreement, this
Warrant may be transferred by the Holder with respect to any or all of the
shares purchasable hereunder. Upon surrender of this Warrant to the Company,
together with the assignment notice annexed hereto duly executed, for transfer
of this Warrant as an entirety by the Holder, the Company shall issue a new
warrant of the same denomination to the assignee. Upon surrender of this
Warrant to the Company, together with the assignment hereof properly endorsed,
by the Holder for transfer with respect to a portion of the shares of Preferred
Stock purchasable hereunder, the Company shall issue a new warrant to the
assignee, in such denomination as shall be requested by the Holder hereof, and
shall issue to such Holder a new warrant covering the number of shares in
respect of which this Warrant shall not have been transferred.

 

6

 

(c)                                  In
case this Warrant shall be mutilated, lost, stolen or destroyed, the Company
shall issue a new warrant of like tenor and denomination and deliver the same
(i) in exchange and substitution for and upon surrender and cancellation of any
mutilated Warrant, or (ii) in lieu of any Warrant lost, stolen or destroyed,
upon receipt of an affidavit of the Holder or other evidence reasonably
satisfactory to the Company of the loss, theft or destruction of such Warrant

 

19.                               No
Impairment. The Company will not, by amendment of its Certificate or
through any reclassification, capital reorganization, consolidation, merger,
sale or conveyance of assets, dissolution, liquidation, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
of 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 action as may be necessary or appropriate in order to protect the
rights of the Holder. Notwithstanding the foregoing, nothing in this Section 19 shall prohibit the Company from
amending its Certificate or taking any other action set forth above with the
requisite consent of the shareholders and the Board of Directors, so long as
such amendment or action does not affect the rights granted to Holder in a
manner differently than the holders of the Preferred Stock.

 

20.                               Governing
Law. The provisions and terms of this Warrant shall be governed by and
construed in accordance with the internal laws of the State of California
without giving effect to its principles regarding conflicts of laws.

 

21.                               Successors
and Assigns. This Warrant shall be binding upon the Company’s successors
and assigns and shall inure to the benefit of the Holder’s successors, legal
representatives and permitted assigns.

 

22.                               Business
Days. If the last or appointed day for the taking of any action required or
the expiration of any rights granted herein shall be a Saturday or Sunday or a
legal holiday in California, then such action may be taken or right may be
exercised on the next succeeding day which is not a Saturday or Sunday or such
a legal holiday.

 

23.                               Qualifying
Public Offering. If the Company shall effect a firm commitment underwritten
public offering of shares of Common Stock which results in the conversion of
the Preferred Stock into Common Stock pursuant to the Company’s Certificate in
effect immediately prior to such offering, then, effective upon such
conversion, this Warrant shall change from the right to purchase shares of
Preferred Stock to the right to purchase shares of Common Stock, and the Holder
shall thereupon have the right to purchase, at a total price equal to that
payable upon the exercise of this Warrant in full, the number of shares of
Common Stock which would have been receivable by the Holder upon the exercise
of this Warrant for shares of Preferred Stock immediately prior to such
conversion of such shares of Preferred Stock into shares of Common Stock, and
in such event appropriate provisions shall be made with respect to the rights
and interest of the Holder to the end that the provisions hereof (including,
without limitation, the provisions for the adjustment of the Purchase Price and
of the number of shares purchasable upon exercise of this Warrant and the
provisions relating to the net issue election) shall thereafter be applicable
to any shares of Common Stock deliverable upon the exercise hereof.

 

24.                               Value.
The Company and the Holder agree that the value of this Warrant on the date of
grant is $100.

 

7

 

25.                               No
Stockholder Rights. This Warrant in and of itself shall not entitle
the Holder to any voting rights or other rights as a stockholder of the
Company.

 

 

	
   

  	
  ARYX
  THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ John Varian

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
  John Varian

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
  COO

  	
   

  
							

 

Accepted and Agreed:

 

LIGHTHOUSE CAPITAL PARTNERS V, L.P.

 

 

By:                             Lighthouse
Management Partners V, L.L.C.

its
general partner

 

 

	
  By:

  	
  /s/ Thomas Conneely

  	
   

  
	
   

  
	
  Name:

  	
   Thomas Conneely

  	
   

  
	
   

  
	
  Title:

  	
  Vice President

  	
   

  
					

 

8

 

Subscription

 

	
  To:

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

 

The undersigned hereby subscribes for                              
shares of Preferred Stock covered by this Warrant. The certificate(s) for such
shares shall be issued in the name of the undersigned or as otherwise indicated
below:

 

 

	
   

  	
   

  
	
  Signature

  
	
   

  
	
   

  	
   

  
	
  Name for Registration

  
	
   

  
	
   

  	
   

  
	
  Mailing Address

  

 

1

 

Net Issue Election Notice

 

	
  To:

  	
   

  	
   

  	
  Date:

  	
   

  

 

 

The undersigned hereby elects under Section 4 to surrender the right to purchase shares of
Preferred Stock pursuant to this Warrant. The certificate(s) for such shares
issuable upon such net issue election shall be issued in the name of the
undersigned or as otherwise indicated below:

 

 

	
   

  	
   

  
	
  Signature

  
	
   

  
	
   

  	
   

  
	
  Name for Registration

  
	
   

  
	
   

  	
   

  
	
  Mailing Address

  

 

1

 

Assignment

 

For value received
                                                                                                
hereby sells, assigns and transfers unto 

 

 

 

[Please print or typewrite name and address of
Assignee]

 

 

the within Warrant, and does hereby irrevocably
constitute and appoint
                                                      
 its attorney to transfer the within
Warrant on the books of the within named Company with full power of
substitution on the premises.

 

 

	
   

  	
   

  
	
  Dated:

  
	
   

  
	
   

  	
   

  
	
  Signature

  
	
   

  
	
   

  	
   

  
	
  Name for Registration

  

 

 

	
  In the Presence of:

  
	
   

  
	
   

  	
   

  

 

1

 

EXHIBIT A

 

Amended and Restated Articles of Incorporation

 

 

See attached pages.

 

1

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