Document:

exv10w22

 

Exhibit 10.22

REGISTRATION RIGHTS AGREEMENT

     This
Registration Rights Agreement dated as of October 26, 2001 (the
“Agreement”) by and between Avalon Pharmaceuticals, Inc., a Delaware corporation (the “Company”)
and the Investors who become parties to this Agreement by executing counterpart signature pages
hereto and authorizing the inclusion of their names on Schedule I hereto (the “Investors”).

     WHEREAS, the Company and certain of the Investors have entered into a Convertible Preferred
Stock Purchase Agreement dated as of December 28, 1999 (the “Series A Purchase Agreement”),
providing for the purchase by certain Investors of shares of the Company’s Series A Convertible
Preferred Stock; and

     WHEREAS, as a condition of the obligation of the Investors to consummate the transactions
contemplated by the Series A Purchase Agreement, the Company entered into a Registration Rights
Agreement dated December 28, 1999 (the “1999 Agreement”); and

     WHEREAS, the Company has revised the registration rights offered to certain Investors under
the Series A Purchase Agreement and is offering certain registration rights to Investors who desire
to purchase shares of the Company’s Series B Convertible Preferred Stock and who entered into a
Series B Convertible Preferred Stock Purchase Agreement dated as of October 16, 2001 (the “Series B
Purchase Agreement”); and

     WHEREAS, it is a condition of the obligation of the Investors to consummate the transactions
contemplated by the Series B Purchase Agreement, that the Company enter into this Registration
Rights Agreement; and

     WHEREAS, the parties desire to revise and restate all rights and obligations under the 1999
Agreement in this Agreement; and

     WHEREAS, the parties agree that this Agreement is intended to be the prevailing agreement and
will supercede all prior registration rights agreements, including the 1999 Agreement; and

     WHEREAS, as an inducement to the Investors to consummate the transactions contemplated by the
Series A Purchase Agreement and Series B Purchase Agreement, the Company covenants and agrees with
the Investors as follows:

     1. Certain Definitions As used in this Agreement, the following terms shall have the
following respective meanings:

     “Affiliate” means any entity controlling, controlled by or under common control with a
designated person. For the purposes of this definition, “control” shall have the meaning specified
as of the date of this Agreement for that word in Rule 405 promulgated by the Commission under the
Securities Act;

     “Authorized Transferee” shall mean a transferee of Restricted Stock if (i) there is
transferred to such transferee Restricted Stock having an original purchase price of not less than
$250,000 or all of the transferring Investor’s shares of Restricted Stock, if less, or (ii) such
transferee is an Affiliate of any Investor that is a corporation, a partner or retired partner of
any Investor that is a partnership, a member or former member of any Investor that is a limited
liability company, a family member or trust for the

 

 

benefit of any individual holder, or (iii) any transferee who acquires at least 25% of the
then outstanding shares of Restricted Stock.

     “Commission” shall mean the Securities and Exchange Commission, or any other federal
agency at the time administering the Securities Act and the Exchange Act.

     “Common Stock” shall mean the Common Stock, $.01 par value, of the Company, as
constituted as of the date of this Agreement.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any
similar or successor federal statute, and the rules and regulations of the Commission thereunder,
all as the same shall be in effect at the time.

     “IPO” shall mean the first underwritten public offering of Common Stock on a firm
commitment basis pursuant to a registration statement filed with the Commission under the
Securities Act on Form S-1 or its then equivalent.

     “Investor” shall mean any party to this Agreement other than the Company.

     “Preferred Stock” shall mean the shares of the Company’s Series A Convertible
Preferred Stock, $.01 par value (“Series A Preferred Stock”) and the shares of the Company’s Series
B Convertible Preferred Stock, $.01 par value (“Series B Preferred Stock”), issued to the Investors
pursuant to the Series A Purchase Agreement and the Series B Purchase Agreement, respectively.

     “Registration Expenses” shall mean the expenses so described in Section 6.

     “Restricted Stock” shall mean the Series A Restricted Stock and the Series B
Restricted Stock, collectively. Whenever reference is made in this Agreement to a request or
consent of Investors holding a certain percentage of Restricted Stock, the determination of such
percentage shall be calculated on the basis of Common Stock issued or issuable in respect of the
Preferred Stock held by all Investors.

     “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar or
successor federal statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.

     “Selling Expenses” shall mean the expenses so described in Section 6.

     “Series A Restricted Stock” shall mean (a) all shares of Common Stock issued or
issuable upon conversion of any shares of Series A Preferred Stock, and (b) all other shares of
Common Stock issued or issuable in respect of such shares upon any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, sale of assets or similar event, but
excluding in each case shares of Common Stock which have been (i) registered under the Securities
Act pursuant to an effective registration statement filed thereunder and disposed of in accordance
with the registration statement covering them or (ii) publicly sold pursuant to Rule 144 under the
Securities Act. Whenever reference is made in this Agreement to a request or consent of Investors
holding a certain percentage of Series A Restricted Stock, the determination of such percentage
shall be calculated on the basis of shares of Common Stock issued or issuable in respect of the
Series A Preferred Stock held by all Investors.

     “Series B Restricted Stock” shall mean (a) all shares of Common Stock issued or
issuable upon conversion of any shares of Series B Preferred Stock, and (b) all other shares of
Common Stock issued or issuable in respect of such shares upon any stock split, stock dividend,
recapitalization, merger,

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consolidation, sale of assets or similar event, but excluding in each case shares of Common
Stock which have been (i) registered under the Securities Act pursuant to an effective registration
statement filed thereunder and disposed of in accordance with the registration statement covering
them or (ii) publicly sold pursuant to Rule 144 under the Securities Act, provided, however, that
the term “Series B Preferred Stock” shall be deemed to include the shares of Series B Preferred
Stock issued upon the exercise of warrants to purchase shares of Series B Preferred Stock.
Whenever reference is made in this Agreement to a request or consent of Investors holding a certain
percentage of Series B Restricted Stock, the determination of such percentage shall be calculated
on the basis of shares of Common Stock issued or issuable in respect of the Series B Preferred
Stock held by all Investors.

     2. Restrictive Legend. Each certificate representing Restricted Stock shall, except
as otherwise provided in Section 3, be stamped or otherwise imprinted with a legend substantially
in the following form:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH
SHARES UNDER THAT ACT AND ANY APPLICABLE STATE SECURITIES LAWS, UNLESS, IN THE
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, AN EXEMPTION FROM REGISTRATION
THEREUNDER IS AVAILABLE.

     3. Demand Registration.

          3.1      (a) (A) On two (2) occasions, at any time after January 1, 2002, Investors holding at
least 50% of the Series A Restricted Stock then outstanding may request registration under the
Securities Act of all or part of their Restricted Stock and (B) on two (2) occasions at any time
after the earlier of (i) the third anniversary of the date hereof and (ii) one hundred and eighty
(180) days after the Company’s IPO, Investors holding more than 25% of the Series B Restricted
Stock then outstanding, may request registration under the Securities Act of all or any part of
their Restricted Stock (each of the requests pursuant to paragraphs A and B above being a “Demand
Registration”), subject to the terms and conditions of this Agreement; and provided that shares of
Restricted Stock as to which each registration is requested pursuant to paragraph A or B above have
a proposed aggregate offering price to the public of at least $15,000,000. Any request for a
Demand Registration shall specify the number of shares of Restricted Stock requested to be
registered and the intended method of distribution of the shares.

                    (b) Following receipt of any notice under Section 3.1(a), the Company shall immediately notify
all holders of Restricted Stock from whom notice has not been received and such holders shall then
be entitled within thirty (30) days after receipt of such notice from the Company to request the
Company to include in the requested registration all or any portion of their shares of Restricted
Stock. The Company shall be obliged to register under the Securities Act, for public sale in
accordance with the method of disposition specified in the notice from the requesting holders
described in Section 3.1(a) above, the number of shares of Restricted Stock specified in such
notice (and in all notices received by the Company from other holders within thirty (30) days after
receipt of such notice by such holders). The Company shall not be obligated to register the
Restricted Stock pursuant to Section 3.1(a) after the Company has effected four (4) registrations
pursuant to Section 3.1(a) and such registrations have been declared or ordered effective.

                    (c) If the holders requesting such registration intend to distribute the Restricted Stock
covered by their request by means of an underwriting, they shall so advise the Company as a part of
their request made pursuant to Section 3.1(a) and the Company shall include such information in the
written notice referred to in Section 3.1(b) above. The right of any holder to registration
pursuant to Section 3.1(a) shall be conditioned upon such holder’s agreeing to participate in such
underwriting and to permit inclusion of such holder’s Restricted Stock in the underwriting. All
holders proposing to

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distribute their Restricted Stock through such underwriting shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for such underwriting by
the Company, which underwriter or underwriters shall be reasonably acceptable to holders of at
least 60% of the shares of Restricted Stock to be sold in such offering. Each seller of Restricted
Stock in such underwritten offering shall complete and execute all questionnaires, powers of
attorneys, indemnities and other documents required under the terms of such underwriting
arrangements, which arrangements shall not be inconsistent with the terms of this Agreement. A
holder may elect to include in such underwriting all or a part of the Restricted Stock. If the
offering pursuant to the Demand Registration is underwritten and the managing underwriter advises
the holders of Restricted Stock who wish to participate in such offering in writing that in its
reasonable and good faith opinion the number of shares of Restricted Stock required to be
registered exceeds the number of shares of Restricted Stock that can be sold in an orderly manner
in such offering within a price range acceptable to such holders, then the number of shares of
Restricted Stock shall be reduced first by excluding shares of Series A Restricted Stock held by
such holders on a pro rata basis and second by excluding shares of Series B Restricted Stock held
by such holders on a pro rata basis, provided, however, that such number of shares of Restricted
Stock shall not be reduced if any shares are to be included in such underwriting for the account of
the Company or any person other than the holders of Restricted Stock. In the event of such
reduction, the Investors shall be entitled to additional demand registrations under Sections 3.1(d)
and 3.1(e) until all of the Restricted Stock that they desire to sell has been registered.

                    (d) In addition to the rights provided for in Section 3.1(a), in the event the Investors own
Restricted Stock at such time as the Company shall have qualified for the use of Form S-3 (or any
similar or successor form or forms promulgated by the Commission), the Investors shall have the
right to request and the Company shall file additional registrations on Form S-3 or such similar or
successor form, as the case may be (collectively, “Form S-3”); provided, however, that the Company
shall not be obligated to file and cause to become effective (A) for holders of Series A Preferred
Stock (i) more than two (2) registrations under this Section 3.1(d) or (ii) any Registration
Statement on Form S-3 where the proposed aggregate offering price of the Restricted Stock to be
sold thereunder is less than $500,000, and (B) for holders of Series B Preferred Stock (i) more
than four (4) registrations under this Section 3.1(d) or (ii) any Registration Statement on Form
S-3 where the proposed aggregate offering price of the Restricted Stock to be sold thereunder is
less than $1,000,000. Whenever the Company is required by this Section 3.1(d) to effect the
registration of Restricted Stock, each of the procedures and requirements of Sections 3.1(b) and
(c), including but not limited to the requirement that the Company notify all holders of Restricted
Stock from whom notice has not been received and provide them with the opportunity to participate
in the offering, shall apply to the registration under this Section 3.1(d), provided, however, that
the period of time in which such holders are entitled to notify the Company of their intention to
participate shall be fifteen (15) days instead of thirty (30) days. The Company shall register
(whether or not required by law to do so) the Common Stock under the Exchange Act in accordance
with the provisions of that Act following the effective date of the first registration of any
securities of the Company on Form S-1 or any similar or successor form or forms. The Company shall
not be obligated to register the Restricted Stock pursuant to this Section 3.1(d) after the Company
has effected six (6) registrations pursuant to this Section 3.1(d) and such registrations have been
declared or ordered effective.

                    (e) If, however, after the twelfth (12th) full calendar month after the effective date of the
Company’s IPO, the Company is not eligible for the use of Form S-3 for secondary sales and the
Investors shall thereafter make a request in writing to effect the registration under the
Securities Act of an offering of outstanding shares of Restricted Stock pursuant to Section 3.1(d),
the Company shall, as expeditiously as practicable, use its best efforts to effect the
registration, on a form of general use under the Securities Act, of all of the shares of Restricted
Stock that the Company has been requested to register.

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                    (f) The Company shall have no obligation to effect any registration pursuant to this Section 3
if the Investors can resell all of the shares of Restricted Stock required to be registered
hereunder to the public pursuant to Rule 144(k) under the Securities Act without registration or
any restriction as to volume.

                    (g) The Company shall not be obligated to effect a registration pursuant to this Section 3,
(i) during the one hundred eighty (180) day period commencing with the date of the Company’s IPO or
(ii) if it delivers notice to the holders of the Restricted Stock, within thirty (30) days of any
registration request by such holders, of the Company’s intent to file a registration statement for
such IPO within ninety (90) days of such registration request, so long as the Company is actively
employing in good faith all reasonable efforts to cause said registration to become effective, in
which case such registration request by such holders shall not be counted as a request for
registration pursuant to Sections 3.1(a) or 3.1(d) of this Agreement.

                    (h) The Company shall be entitled to include in any registration statement referred to in this
Section 3, for sale in accordance with the method of disposition specified by the requesting
Investors, shares of Common Stock to be sold by the Company for its own account, except as and to
the extent that, in the reasonable opinion of the managing underwriter (if such method of
disposition shall be an underwritten public offering), such inclusion would materially adversely
affect the marketing of the Restricted Stock to be sold by and for the account of the Investors, in
which case the shares of Common Stock to be sold by the Company for its own account would be
reduced first before any reductions of the shares of Series A Restricted Stock and Series B
Restricted Stock in the manner contemplated in Section 3.1(c) of this Agreement. Except for
registration statements on Form S-4, S-8 or any successor thereto, the Company will not file with
the Commission any other registration statement with respect to its Common Stock, whether for its
own account or that of other shareholders, from the date of receipt of a notice from requesting
holders pursuant to this Section 3 until the completion of the period of distribution of the shares
of Restricted Stock registered thereby.

          3.2      In the event that the Company’s board of directors determines in its good faith judgment
that proceeding with an offering pursuant to this Section 3 would have a materially adverse effect
on the Company, the Company may, by written notice to the holders of Restricted Stock, accompanied
by a certificate signed by the Company’s chief executive officer or chairman to that effect, delay
the registration or offering once in any twelve (12) month period, provided that such delay is not
longer than ninety (90) days.

     4. Piggy Back Registration. If the Company at any time (other than pursuant to
Section 3.1(a) or Section 3.1(d)) proposes to register any of its securities under the Securities
Act for sale to the public, whether for its own account or for the account of other security
holders or both (except with respect to registration statements on Forms S-4, S-8 or another form
not available for registering the Restricted Stock for resale to the public), each such time it
will give written notice to all holders of outstanding Restricted Stock of its intention to do so
and of the proposed method of distribution of such securities. Upon the written request of any
such holder, received by the Company within twenty (20) days after the giving of any such notice by
the Company, to register any of its Restricted Stock, the Company will use its best efforts to
cause the Restricted Stock as to which registration shall have been so requested to be included in
the securities to be covered by the registration statement proposed to be filed by the Company, all
to the extent and under the conditions that such registration is permitted under the Securities
Act. In the event that any registration pursuant to this Section 4 shall be an underwritten public
offering of Common Stock, the Company shall not be required under this Section 4 to include any of
the Restricted Stock of any holders of Restricted Stock unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected by it and enter into
an underwriting agreement in customary form with such underwriters. Each seller of Restricted
Stock in such

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underwritten offering shall complete and execute all questionnaires, powers of attorney,
indemnities and other documents required under the terms of such underwriting arrangements, which
arrangements shall not be inconsistent with the terms of this Agreement. In the event that any
registration pursuant to this Section 4 shall be, in whole or in part, an underwritten public
offering of Common Stock, the number of securities to be included in such an underwriting may be
reduced or excluded partially or completely (first, pro rata, with respect to all securities other
than Restricted Stock whose holders have a piggy-back right to include such securities in the
registration statement and as to which inclusion has been requested pursuant to such right, second,
pro rata, with respect to shares of Series A Restricted Stock requested to be included by such
holders and third, pro rata, with respect to shares of Series B Restricted Stock requested to be
included by such holders) if and to the extent that the managing underwriter shall be of the
opinion that the inclusion of some or all of the securities would adversely affect the marketing of
the securities to be sold by the Company therein, provided, however, that, unless
the registration is with respect to the Company’s IPO, in no event shall the number of shares of
Series B Restricted Stock to be sold by the holders of Series B Restricted Stock be reduced below
25% of the total amount of the securities included in such registration. Notwithstanding the
foregoing provisions, the Company may withdraw any registration statement referred to in this
Section 4 prior to the effectiveness of the registration without thereby incurring any liability to
the holders of Restricted Stock.

     5. Registration Procedures. If and whenever the Company is required by the provisions
of Sections 3 or 4 to use its best efforts to effect the registration of any shares of Restricted
Stock under the Securities Act, the Company will, as expeditiously as possible:

          (a) prepare and file with the Commission a registration statement (which, in the case of an
underwritten public offering pursuant to Section 3.1(a), shall be on Form S-1 or other form of
general applicability satisfactory to the managing underwriter selected as therein provided) with
respect to such securities and use its best efforts to cause such registration statement to become
and remain effective for the period of distribution contemplated in this Agreement;

          (b) prepare and file with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective for the period specified in Section 5(a) above and comply with the
provisions of the Securities Act with respect to the disposition of all Restricted Stock covered by
such registration statement in accordance with the sellers’ intended method of disposition set
forth in such registration statement for such period;

          (c) furnish to each seller of Restricted Stock and to each
underwriter such number of copies of the registration statement and the prospectus included therein (including each
preliminary prospectus) as such persons reasonably may request in order to facilitate the public
sale or other disposition of the Restricted Stock covered by such registration statement;

          (d) use its best efforts to register or qualify the Restricted Stock covered by such
registration statement under the securities or “blue sky” laws of such jurisdictions as the sellers
of Restricted Stock or, in the case of an underwritten public offering, the managing underwriter
reasonably shall request, provided, however, that the Company shall not for any
such purpose be required (i) to qualify generally to transact business as a foreign corporation in
any jurisdiction where it is not so qualified or (ii) to consent to general service of process in
any such jurisdiction unless the Company is already subject to service in such jurisdiction;

          (e) cause to be listed the Restricted Stock covered by such registration statement with any
securities exchange on which the Common Stock of the Company is then listed. If no such listing or
qualification has then occurred, the Company shall use its best efforts to cause such securities to

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be so listed or qualified on an exchange or in a trading system that is reasonably acceptable
to the holders of Restricted Stock being sold;

          (f) immediately notify each seller of Restricted Stock and each underwriter under such
registration statement, at any time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event of which the Company has knowledge as a
result of which the prospectus contained in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in light of the
circumstances then existing. The sellers of Restricted Stock agree upon receipt of such notice
forthwith to cease making offers and sales of Restricted Stock pursuant to such registration
statement or deliveries of the prospectus contained therein for any purpose until the Company has
prepared and furnished such amendment or supplement to the prospectus as may be necessary so that,
as thereafter delivered to purchasers of such Restricted Stock, such prospectus shall not include
an untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light of the
circumstances then existing, and the Company shall prepare and file such amendment or supplement as
expeditiously as possible. In addition, the Company shall immediately notify each seller of
Restricted Stock and each underwriter under such registration statement of the issuance of any stop
order by the Commission suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for such purpose and the Company shall use reasonable
efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order
should be issued;

          (g) enter into such customary agreements (including underwriting agreements in customary form)
and take all such other actions as the underwriters, if any, or the holders of at least 60% of the
Restricted Stock being sold reasonably request in order to expedite or facilitate the disposition
of such Restricted Stock (including, without limitation, effecting a stock split or a combination
of shares), it being understood that such agreements and actions shall also benefit other holders
of Restricted Stock who are selling Restricted Stock thereunder;

          (h) if the offering is underwritten and at the request of any seller of Restricted Stock, use
its best efforts to furnish on the date that Restricted Stock is delivered to the underwriters for
sale pursuant to such registration: (i) an opinion of counsel representing the Company for the
purposes of such registration, dated such date and addressed to the underwriters and to such
seller, stating that such registration statement has become effective under the Securities Act and
that (A) to the best knowledge of such counsel, no stop order suspending the effectiveness thereof
has been issued and no proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act, (B) the registration statement, the related prospectus and
each amendment or supplement thereof comply as to form in all material respects with the
requirements of the Securities Act (except that such counsel need not express any opinion as to
financial statements and the notes thereto and the schedules and other financial and statistical
data contained therein) and (C) to such other effects as reasonably may be requested by counsel for
the underwriters or by such seller or its counsel and (ii) a letter dated such date from the
independent public accountants (as defined in Regulation S-X promulgated under the Exchange Act)
retained by the Company, addressed to the underwriters and to such seller, stating that they are
independent public accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the registration statement or
the prospectus, or any amendment or supplement thereof, comply as to form in all material respects
with the applicable accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the period ending no
more than five (5) business days prior to the date of such letter) with respect to such
registration as such underwriters reasonably may request;

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          (i) provide a transfer agent and registrar for all Restricted Stock and a CUSIP number for all
Restricted Stock sold under the registration not later than the effective date of the registration
statement;

          (j) make available for inspection upon reasonable notice during the Company’s regular business
hours by each seller of Restricted Stock, any underwriter participating in any distribution
pursuant to such registration statement, and any attorney, accountant or other agent retained by
such seller or underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company’s officers, directors and employees to supply all
information reasonably requested by any such seller, underwriter, attorney, accountant or agent in
connection with such registration statement;

          (k) use all reasonable efforts to insure the obtaining of all necessary approvals from the
National Association of Securities Dealers, Inc.; and

          (l) comply with all applicable rules and regulations under the Securities Act and the Exchange
Act.

     The period of distribution of Restricted Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Restricted Stock in any other
registration shall be deemed to extend until the earlier of the sale of all Restricted Stock
covered thereby and one hundred and eighty (180) days after the effective date thereof. This one
hundred and eighty (180) day period shall be extended by any period of time in which the sellers
are prohibited by law or this Agreement from selling Restricted Stock pursuant to such
registrations statement.

     In connection with each registration hereunder, the sellers of Restricted Stock shall provide
such information and execute such documents as may reasonably be required in connection with such
registration.

     6. Expenses. All expenses incurred by the Company in complying with Sections 3 and 4,
including, without limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel and independent public accountants for the Company, fees and expenses
(including counsel fees) incurred in connection with complying with state securities or “blue sky”
laws, fees of the National Association of Securities Dealers, Inc., transfer taxes, fees of
transfer agents and registrars and reasonable fees and disbursements of one counsel for the sellers
of Restricted Stock selected by the Investors (the fees and disbursements of such sellers’ counsel
not to exceed $20,000), but excluding any Selling Expenses, are called “Registration Expenses”.
All underwriting discounts and selling commissions applicable to the sale of Restricted Stock are
called “Selling Expenses”.

     The Company will pay all Registration Expenses in connection with each registration statement
under Sections 3 or 4. All Selling Expenses in connection with each registration statement under
Sections 3 or 4 shall be borne by the participating sellers in proportion to the number of shares
sold by each, or by such participating sellers other than the Company (except to the extent the
Company shall be a seller) as they may agree.

     7. Indemnification and Contribution.

          (a) In the event of a registration of any of the Restricted Stock under the Securities Act
pursuant to Sections 3 or 4, the Company will indemnify and hold harmless each seller of such
Restricted Stock thereunder and such seller’s agents, employees, directors and officers, each
underwriter

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of such Restricted Stock thereunder and each other person, if any, who controls such seller or
underwriter within the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such seller, such seller’s agents, employees, directors or
officers, underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which such Restricted Stock was registered under
the Securities Act pursuant to Sections 3 or 4, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or arise out of or are based upon any
violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state
securities laws or any rule or regulation promulgated under the Securities Act, the Exchange Act or
any state securities laws or arise out of or are based upon any failure to comply with the
provisions of this Agreement, and will pay the legal fees and other expenses of each such seller,
each such underwriter and each such controlling person incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action, provided,
however, that the Company will not be liable in any such case if and to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission so made in reliance upon and in conformity with
information furnished in writing by an authorized officer of any such seller acting on behalf of
such seller, any such underwriter or any such controlling person or by an authorized officer of the
seller of Restricted Stock or by an officer or duly authorized agent or employee of such seller of
Restricted Stock, specifically for use in such registration statement or prospectus, and, provided
further, however, that the Company will not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of or is based upon an untrue or alleged untrue
statement or omission or an alleged omission made in any preliminary prospectus or final prospectus
if (1) such holder failed to send or deliver a copy of the final prospectus or prospectus
supplement, if required by law to have been sent or delivered, with or prior to the delivery of
written confirmation of the sale of the Restricted Stock, and (2) such final prospectus or
prospectus supplement would have corrected such untrue statement or omission.

          (b) In the event of a registration of any of the Restricted Stock under the Securities Act
pursuant to Sections 3 or 4, each seller of such Restricted Stock thereunder, severally and not
jointly, will indemnify and hold harmless the Company, each person, if any, who controls the
Company within the meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each other seller of Restricted Stock, each
underwriter and each person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which the Company or such
officer, director, other seller, underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in the registration statement under which such Restricted Stock was
registered under the Securities Act pursuant to Sections 3 or 4, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are
based upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will pay the legal fees and
other expenses of the Company and each such officer, director, other seller, underwriter and
controlling person incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action, provided, however, that such seller will be
liable hereunder in any such case if and only to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with information pertaining to
such seller, as such, furnished in writing to the Company by an authorized officer of such seller
specifically for use in such registration statement or prospectus, and

-9-

 

provided, further, however, that the liability of each seller hereunder shall be limited to
the proportion of any such loss, claim, damage or liability which is equal to the proportion that
the public offer price of the securities sold by such seller under such registration statement
bears to the total public offering price of all securities sold thereunder, but not in any event to
exceed the net proceeds received by such seller from the sale of Restricted Stock covered by such
registration statement.

          (c) Promptly after receipt by an indemnified party hereunder of notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so
to notify the indemnifying party shall not relieve it from any liability that it may have to such
indemnified party other than under this Section 7 and shall only relieve it from any liability that
it may have to such indemnified party under this Section 7 if and to the extent the indemnifying
party is prejudiced by such omission. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume
and undertake the defense thereof with counsel satisfactory to such indemnified party, and, after
notice from the indemnifying party to such indemnified party of its election so to assume and
undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party
under this Section 7 for any legal expenses subsequently incurred by such indemnified party in
connection with the defense thereof; provided, however, that, if the defendants in
any such action include both the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be reasonable defenses available to it which
are different from or additional to those available to the indemnifying party or if the interests
of the indemnified party reasonably may be deemed to conflict with the interests of the
indemnifying party, the indemnified party shall have the right to select a separate counsel and to
assume such legal defenses and otherwise to participate in the defense of such action, with the
expenses and fees of such separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel as required by the local rules of such jurisdiction) at
any time for all such indemnified parties.

          (d) In order to provide for just and equitable contribution to joint liability under the
Securities Act in any case in which either (i) any holder of Restricted Stock exercising rights
under this Agreement, or any controlling person of any such holder, makes a claim for
indemnification pursuant to this Section 7 but it is judicially determined that such
indemnification may not be enforced in such case notwithstanding the fact that this Section 7
provides for indemnification in such case, or (ii) contribution under the Securities Act may be
required on the part of any such selling holder or any such controlling person in circumstances for
which indemnification is provided under this Section 7; then, and in each such case, the Company
and such holder will contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject (after contribution from others) in such proportion so that such holder is
responsible for the portion represented on the one hand (A) by the percentage that the public
offering price of its Restricted Stock offered by the registration statement bears to the public
offering price of all securities offered by such registration statement, and (B) on the other hand,
the relative fault of such holder, other holders or the Company, and the Company is responsible for
the remaining portion; provided, however, that, in any such case, no person or
entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation. Notwithstanding the provisions of this Section 7(d), no holder
of Restricted Stock shall be required to contribute any amount in excess of the aggregate net
proceeds received by such holder from the sale of Restricted Stock pursuant to such registration
statement.

-10-

 

          (e) No indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened action, suit or proceeding in respect of
which any indemnified party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter of such action,
suit or proceeding.

          (f) The indemnities and obligations provided in this Section 7 shall survive any transfer of
any Restricted Stock by such holder in the manner contemplated in this Agreement.

     8. Changes in Common Stock. If, and as often as, there is any change in the Common
Stock by way of a stock split, stock dividend, combination or reclassification, or through a
merger, consolidation, reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby
shall continue with respect to the Common Stock as so changed.

     9. Rule 144 Reporting; Form S-3 Availability. With a view to making available the
benefits of Rule 144 promulgated under the Securities Act or any rules and regulations of the
Commission that may at any time permit the resale of the Restricted Stock to the public without
registration or pursuant to a registration on Form S-3, the Company will:

          (a) at all times after any registration statement covering a public offering of securities of
the Company under the Securities Act shall have become effective:

               (i) make and keep public information available, as those terms are understood and defined in
Rule 144 under the Securities Act;

               (ii) file with the Commission in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act;

               (iii) furnish to each holder of Restricted Stock forthwith upon request a written statement by
the Company as to its compliance with the reporting requirements of such Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as such holder may reasonably
request in availing itself of any rule or regulation of the Commission allowing such holder to sell
any Restricted Stock without registration; and

               (iv) take all actions to enable holders of Restricted Stock to utilize Form S-3 at the end of
the first twelve (12) month period after the initial registration of the Company is declared
effective.

          (b) at any time, at the request of any holder of shares of Restricted Stock, make available to
such holder and to any prospective transferee of such Preferred Stock or shares of Restricted Stock
the information concerning the Company described in Rule 144A(d)(4) under the Securities Act.

     10. Market Stand-Off. Each Investor agrees severally and not jointly, in connection
with the registration of the Company’s IPO that, upon the request of the Company and the
underwriters managing such underwritten offering, he or it will not sell, make any short sale of,
loan, grant any option for the purchase of, or otherwise dispose of any securities (other than the
Restricted Stock included in the registration) without the prior written consent of the Company,
for such period of time (not to exceed one hundred and eighty (180) days) from the effective date
of such registration as the Company may specify, provided that all officers and directors of the
Company and all other persons who are holders of 5% or

-11-

 

more of the outstanding shares of stock of the Company are similarly restricted. This Section
10 shall not apply however to any shares of Common Stock acquired by such Investor in the open
market after the IPO or any shares of Common Stock purchased by such Investor in the IPO.

     11. Representations and Warranties of the Company. The Company represents and
warrants to the Investors as follows:

          (a) The execution, delivery and performance of this Agreement by the Company have been duly
authorized by all requisite corporate action and will not cause a material violation of any
provision of any law applicable to the Company, any order of any court or other agency of
government applicable to the Company, the Articles of Incorporation or By-laws of the Company or
any provision of any indenture, agreement or other instrument to which it or any or its properties
or assets is bound, conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any such indenture, agreement or other instrument or result in the
creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company.

          (b) This Agreement has been duly executed and delivered by the Company and constitutes the
legal, valid and binding obligation of the Company, enforceable in accordance with its terms,
subject to laws of general application from time to time in effect affecting creditors’ rights and
the exercise of judicial discretion in accordance with general equitable principles.

     12. Miscellaneous.

          (a) All covenants and agreements contained in this Agreement by or on behalf of any of the
parties hereto shall bind and inure to the benefit of the respective successors, assigns and
Authorized Transferees of the parties hereto, provided, however, that within a
reasonable time following such assignment or transfer the Company is furnished with written notice
of the name and address of such assignee or transferee in respect of which such registration rights
are being assigned or transferred and provided further that the assignee or transferee shall
acknowledge in writing that the assigned or transferred Restricted Stock shall remain subject to
this Agreement.

          (b) All notices, requests, consents and other communications hereunder shall be in writing and
shall be mailed by certified or registered mail, return receipt requested, postage prepaid, sent by
Federal Express or other recognized overnight courier service, or transmitted by facsimile,
addressed, if to the Company, at its principal office and if to any holder of Restricted Stock, to
such holder’s address as shown on the records of the Company, or, in any case, at such other
address or addresses as shall have been furnished in writing to the Company (in the case of a
holder of Restricted Stock) or to the holders of Restricted Stock (in the case of the Company) in
accordance with the provisions of this Section 13(b). Each such notice, request, consent or other
communication shall be treated as effective or having been given (i) when delivered in person, or
(ii) five (5) business days after being mailed by certified or registered mail, return receipt
requested, (iii) one (1) business day after being sent by a recognized overnight courier service or
(iv) when transmitted by facsimile, provided that the sender receives confirmation of receipt,
addressed as aforesaid.

          (c) This Agreement shall be governed by and construed in accordance with the laws
of the State of Delaware, except with respect to Delaware conflict of laws rules or doctrines.

          (d) This Agreement may not be amended or modified, and no provision hereof may be waived,
without the written consent of the Company, Investors holding at least 60% of all of the
outstanding shares of Restricted Stock and Investors holding at least 60% of all of the outstanding
shares of Series B Restricted Stock. Notwithstanding the foregoing, this Agreement may be amended
with only

-12-

 

the written consent of the Company to include additional purchasers pursuant to the Series B
Purchase Agreement.

          (e) This Agreement may be executed in one or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument. In proving
this Agreement it shall not be necessary to produce or account for more than one such counterpart
executed by the party against whom enforcement is sought.

          (f) The Company shall not grant to any third party any registration rights equal to or more
favorable than, or inconsistent with, any of those contained herein, so long as any of the
registration rights under this Agreement remains in effect.

          (g) If any provision of this Agreement shall be held to be illegal, invalid or unenforceable,
such illegality, invalidity or unenforceability shall attach only to such provision and shall not
in any manner affect or render illegal, invalid or unenforceable any other provision of this
Agreement unless the effect thereof would be to alter materially the effect of this Agreement, and
this Agreement (if not so altered) shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.

          (h) This Agreement hereby amends and restates the 1999 Agreement and supercedes and replaces
all prior registration rights agreements, including the 1999 Agreement.

          (i) No Investor shall be entitled to exercise any rights provided in Sections 3 or 4 hereof
after the fifth (5th) anniversary of the effective date of the Company’s IPO.

     IN WITNESS WHEREOF, the Company and the Investors have executed this Agreement as of the day
and year first above written.

	 	 	 	 	 	 
	 	 	Avalon Pharmaceuticals, Inc.	
	 
	 	 	 	 	
	

	 	By:	 	/s/ Kenneth C. Carter, Ph. D.	
				

	 
	

		 	 	          Kenneth C. Carter, Ph.D.

          President & CEO	

-13-exv10w23

 

Exhibit 10.23

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES LAWS. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT.

Void after the Tenth Anniversary hereof

WARRANT FOR THE

PURCHASE OF SHARES OF COMMON STOCK

of

THERAPEUTIC GENOMICS, INC.

(Incorporated under the laws of the State of Delaware)

     THIS CERTIFIES THAT, for value received, Alexandria Real Estate Equities, L.P., a Delaware
limited partnership, together with its successors and assigns (each, a “holder”), is entitled to
purchase Fifteen Thousand (15,000) duly authorized validly issued, fully paid and nonassessable
shares of Common Stock, no par value per share, (the “Common Stock”) of Therapeutic Genomics, Inc.,
a Delaware corporation (the “Company”), at the per share purchase price described in Section 1.3
below, subject to the provisions and upon the terms and conditions hereinafter set forth.

     1. Exercise
of Warrant. The terms and conditions upon which this Warrant may be
exercised and the Common Stock covered hereby (the “Warrant Stock”) may be purchased are as
follows:

          1.1
Term. The purchase right represented by this Warrant may be exercised in
whole or in part at any time and from time to time from and after the date hereof and on or before
the tenth anniversary hereof; provided, that if the last day on which this Warrant may be
exercised is not a Business Day (as defined in Section 12 hereof), this Warrant may be exercised
prior to 5:00 p.m. (New York time) on the next succeeding full Business Day with the same force
and effect as if exercised on such last day specified herein.

 

 

          1.2
Number of Shares. This Warrant is initially exercisable for Fifteen Thousand
(15,000) shares of Common Stock, subject to adjustment pursuant to Section 2 of this Warrant.

          1.3
Purchase Price. The initial per share purchase price for the shares of Common
Stock to be issued upon exercise of this Warrant shall be $2.00, subject to adjustment pursuant to
Section 2 of this Warrant (the “Warrant Price”).

          1.4
Method of Exercise. The exercise of the purchase rights evidenced by this Warrant
shall be effected by (a) the surrender of this Warrant, together with a duly executed copy of the
form of subscription attached hereto, to the Company at its principal offices and (b) the delivery
of the purchase price (i) by check or bank draft payable to the Company’s order or by wire transfer
to the Company’s account for the number of shares for which the purchase rights hereunder are being
exercised or any other form of consideration approved by the Company’s Board of Directors or (ii)
pursuant to the procedure set forth in Section 1.5.

          Each exercise of this Warrant shall be deemed to have been effected immediately prior to the
close of business on the day on which this Warrant shall have been surrendered to the Company as
provided herein or at such later date as may be specified in the executed form of subscription,
and at such time the person or persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such exercise as provided herein shall be deemed to
have become the holder or holders of record thereof.

          1.5 Cashless Exercise. In addition to and without limiting the rights of the holder
hereof under the terms hereof, at the holder’s option this Warrant may be exercised in whole or in
part at any time or from time to time prior to its expiration for a number of shares of Common
Stock having an aggregate fair market value on the date of such exercise equal to the difference
between (a) the fair market value of the number of shares of Warrant Stock designated for exercise
by the holder hereof on the date of exercise and (b) the aggregate Warrant Price for such shares in
effect at such time.

     The “fair market value” of shares of Common Stock shall, for all purposes under this Warrant,
be calculated on the basis of (a) if the Common Stock is then traded on a securities exchange, the
average of the closing prices of the Common Stock on such exchange over the twenty (20) trading day
period ending three (3) trading days prior to the date of exercise, (b) if the Common Stock is then
regularly traded over-the-counter, the average of the sale prices or, if sale prices for the Common
Stock are not regularly and publicly reported, the closing bid of the Common Stock over the twenty
(20) trading day period ending three (3) trading days prior to the date of exercise, or (c) if
there is no active public market for the Common Stock, the fair market value thereof shall be
determined in good faith by the Company’s Board of Directors;
provided, that if the holder
disputes such a determination by the Company’s Board of Directors, then such value may be
determined by a nationally recognized investment banking firm, mutually acceptable

2

 

to the Company and the holder, with the costs of such valuation being borne by the holder. If the
holder of this Warrant exercises this Warrant contingent upon the closing of a public offering,
the “fair market value” of a share of Common Stock on the date of exercise shall be equal to the
initial price to the public specified in the final prospectus with respect to such public
offering. The following illustrates how many shares would be issued upon exercise of this Warrant
pursuant to this Section 1.5:

	 	 	 	 	 	 	 	 	 
	 

	 	Let
	 	FMV
	 	=
	 	Fair market value per share of Common Stock at date of exercise.
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	PSP
	 	=
	 	Per Share Warrant Price at date of exercise.
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	N
	 	=
	 	Number of shares of Common Stock desired to be exercised.
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	X
	 	=
	 	Number of shares of Common Stock issued upon exercise.
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	X
	 	=
	 	(FMV)(N) - (PSP)(N)
	

	 	 	 	 	 	 	 	               FMV

No payment of any cash or other consideration to the Company shall be required from the holder of
this Warrant in connection with any exercise of this Warrant pursuant to this Section 1.5. Such
exercise shall be effective upon the date of receipt by the Company of this Warrant surrendered
for cancellation and a written request from the holder hereof that the exercise pursuant to this
section be made, or at such later date as may be specified in such request.

          1.6
Issuance of Shares. As soon as reasonably practicable after each exercise of this
Warrant, in whole or in part, the Company at its expense (including the payment by it of any
applicable issue taxes) shall cause to be issued in the name of and delivered to the holder hereof
or as such holder (upon payment by such holder of any applicable transfer taxes) may direct, (a) a
certificate or certificates for the number of duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock to which such holder shall be entitled upon such exercise, and
(b) in case such exercise is in part only, a new Warrant or Warrants of like tenor, representing in
the aggregate the right to purchase the number of shares of Common Stock equal (without giving
effect to any adjustment thereof provided for in Section 2) to the number of such shares stated in
this Warrant minus the number of such shares designated by the holder upon such exercise as
provided herein.

     2. Certain
Adjustments.

          2.1
Mergers. Consolidations or Sale of Assets. If after the date hereof there shall
be a capital reorganization (other than a combination or subdivision of Common Stock otherwise
provided for herein), or spin-off, or a merger or consolidation of the Company with or into
another corporation, a limited liability company, a partnership or any other legal entity (each

3

 

of the foregoing being referred to herein as a “Person”), or the sale of all or substantially
all of the Company’s properties and assets to any other Person, then, as a part of such
transaction, lawful provision shall be made so that the holder shall thereafter be entitled to
receive upon exercise of this Warrant, during the period specified in this Warrant and upon payment
of the purchase price required by this Warrant, the number of shares of stock or other securities,
cash or property of the Company or the successor corporation or other Person resulting from such
transaction, to which a holder of the Common Stock deliverable upon exercise of this Warrant would
have been entitled under the provisions of the agreement in such transaction (or otherwise pursuant
to such transaction) if this Warrant had been exercised immediately before such transaction. In any
such case, appropriate adjustment (as determined reasonably and in good faith by the Company’s
Board of Directors) shall be made in the application of the provisions of this Warrant with respect
to the rights and interests of the holder after such transaction to the end that the provisions of
this Warrant (including adjustment of the Warrant Price then in effect and the number of shares of
Common Stock issuable upon exercise hereof) shall be applicable after the transaction, as near as
reasonably may be, in relation to any shares or other property deliverable after the transaction
upon exercise of this Warrant.

          2.2
Splits and Subdivisions; Dividends. If the Company should effect or fix a record
date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or
the determination of the holders of Common Stock entitled to receive a dividend or other
distribution payable in additional shares of Common Stock or other securities or warrants, options
or other rights convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as “Common Stock
Equivalents”) without payment of any consideration by such holder for the additional shares of
Common Stock or Common Stock Equivalents (including the additional shares of Common Stock issuable
upon conversion or exercise thereof), then, as of such record date (or the date of such
distribution, split or subdivision if no record date is fixed), the per share Warrant Price shall
be appropriately decreased, and the number of shares of Common Stock issuable upon exercise hereof
shall be appropriately increased, in proportion to such increase of
outstanding shares.

          2.3
Combination of Shares. If the number of shares of Common Stock outstanding at
any time after the date hereof is decreased by a combination of the outstanding shares of Common
Stock, the per share Warrant Price shall be appropriately increased, and the number of shares of
Common Stock issuable upon exercise hereof shall be appropriately decreased, in proportion to such
decrease in outstanding shares.

          2.4
Adjustments for Other Distributions. In the event the Company shall declare a
distribution payable in securities of the Company (other than Common Stock or Common Stock
Equivalents) or other Persons, evidences of indebtedness issued by the Company or other Persons,
assets (including cash dividends) or options or rights not referred to in subsection 2.2, then, in
each such case, upon exercise of this Warrant the holder hereof shall be entitled to a
proportionate share of any such distribution as though such holder was the holder of the number of
shares of

4

 

Common Stock of the Company into which this Warrant may be exercised as of the record date
fixed for the determination of the holders of Common Stock of the Company entitled to receive such
distribution.

          2.5
Issuance of Additional Common Stock.

	 	(a)  	If, after the date hereof, the Company shall issue or sell
	 
	 	  	(i) Additional Shares (as defined below) without consideration or
for a consideration per share that is less than the higher of (A)
the Warrant Price and (B) the fair market value of a share of Common
Stock in effect immediately prior to such issue or sale, or
	 
	 	  	(ii) Common Stock Equivalents exercisable for Additional Shares with
a minimum exercise or exchange price that is less than the higher of
(A) the Warrant Price and (B) the fair market value of a share of
Common Stock in effect immediately prior to such issue or sale,

then, and in each such case, the Warrant Price theretofore in effect shall be reduced,
concurrently with such issue or sale, to a price (calculated to the
nearest. 001 of a cent)
determined by multiplying such Warrant Price by a fraction:

	 	  	(iii) the numerator of which shall be (A) the number of shares of
Common Stock outstanding immediately prior to such issue or sale
(including any shares of Common Stock issuable upon conversion of
outstanding shares of Preferred Stock and issuable upon exercise of
outstanding options, warrants or other convertible securities) plus
(B) the number of shares of Common Stock that the aggregate
consideration received by the Company upon such issuance or sale (or,
in the case of Common Stock Equivalents exercisable for Additional
Shares, receivable by the Company upon exercise or exchange) would
purchase at such Warrant Price, and
	 
	 	  	(iv) the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such issue or sale
(assuming, in the case of Common Stock Equivalents exercisable for
Additional Shares, exercise or exchange of all such Common Stock
Equivalents and including any shares of Common Stock issuable upon
conversion of outstanding shares of Preferred Stock and issuable
upon exercise of outstanding options, warrants or other convertible
securities).

5

 

               (b) For the purposes of this Section 2.5, the consideration for the issue or sale of
Additional Shares shall, irrespective of the accounting treatment of such consideration, (i)
insofar as it consists of cash, be computed at the net amount of cash received by the Company, and
(ii) insofar as it consists of property (including securities) other than cash, be computed at the
fair market value thereof at the time of such issue or sale as determined in good faith by the
Company’s Board of Directors. In the event of a dispute by the holder as to the fair market value
of any consideration consisting of property, the Company shall, at the option of the holder, engage
a consulting firm or investment banking firm mutually agreed to by the holder and the Company to
prepare an independent appraisal of the fair market value of such
property to be distributed. The
expenses of such appraisal shall be borne by the holder.

               (c) Notwithstanding anything contained herein to the contrary, the consideration for any
Common Stock Equivalents shall be deemed to be the total amount of consideration received by the
Company for the issuance of such Common Stock Equivalents plus the minimum amount of consideration
payable to the Company upon exercise, conversion or exchange of Common Stock Equivalents (the “Net
Consideration”), determined as of the date of issuance of such Common Stock Equivalents. Any
obligation, agreement or understanding to issue Common Stock Equivalents at any time in the future
shall be deemed to be an issuance at the time such obligation or agreement is made or arises. No
adjustment of the Warrant Price shall be made under this Section 2.5 upon the issuance of any
shares of Common Stock which are issued pursuant to the exercise, conversion or exchange of any
Common Stock Equivalents if any adjustment shall previously have been made upon the issuance of any
such Common Stock Equivalents.

                    Should the Net Consideration for any such Common Stock
Equivalents be increased or decreased from time to time, then, upon the effectiveness of
such change, the Warrant Price will be that which would have been obtained (i) had the adjustments
made upon the issuance of such Common Stock Equivalents been made upon the basis of the actual Net
Consideration (as so increased or decreased) of such Common Stock Equivalents, and (ii) had
adjustments to such Warrant Price since the date of issuance of such Common Stock Equivalents been
made to such Warrant Price as adjusted pursuant to (i) above. Any adjustment of the Warrant Price
pursuant to this paragraph which relates to Common Stock Equivalents shall be disregarded if, as,
and when all of such Common Stock Equivalents expire or are canceled without being exercised, so
that the Warrant Price effective immediately upon cancellation or expiration shall be equal to the
Warrant Price in effect at the time of the issuance of the expired or canceled Common Stock
Equivalents, with such additional adjustments as would have been made to such Warrant Price had
the expired or canceled Common Stock Equivalents not been issued.

               (d) “Additional Shares” means all shares of Common Stock, whether or not subsequently
reacquired or retired by the Company, other than (i) shares of Common Stock issued or to be issued
to directors, officers, employees and consultants of the Company pursuant to any bona fide
qualified or non-qualified stock option plan, stock purchase plan, stock restriction

6

 

agreement, or employee stock ownership plan (“ESOP”); (ii) all shares of Common Stock issued
or deemed to be issued and outstanding under this Section 2.5 on the date of this Warrant; (iii)
all securities issued pursuant to any agreement to license technology and/or provide sponsored
research upon approval of the Board; and (iv) all securities issued in connection with the lease of
equipment or in similar transactions upon the approval of the Board.

               (e) The number of shares of Common Stock that the holder of this Warrant shall be entitled to
receive upon each exercise hereof after any adjustment pursuant to
this Section 2.5 shall be
determined by multiplying (i) the number of shares of Common Stock that were issuable immediately
prior to such adjustment, by (ii) the fraction of which (A) the numerator is the Warrant Price
immediately prior to such adjustment and (B) the denominator is the Warrant Price immediately
following such adjustment.

          2.6
Certificate as to Adjustments. In the case of each adjustment or readjustment
of the Warrant Price pursuant to this Section 2, the Company at its expense shall promptly compute
such adjustment or readjustment in accordance with the terms hereof and cause a certificate, signed
by the Company’s Chief Financial Officer, setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based, to be delivered to the
holder of this Warrant. The certificate furnished to such holder shall set forth (a) such
adjustments and readjustments, (b) the Warrant Price at the time in effect and how it was
calculated and (c) the number of shares of Common Stock issuable upon exercise hereof and the
amount, if any, of other property at the time receivable upon the exercise of this Warrant.

          2.7
No Impairment. The Company shall not, by amendment of its articles of
incorporation or through any consolidation, merger, reorganization, transfer of assets,
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 of this Warrant, but shall 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 of this Warrant against
impairment. Without limiting the generality of the foregoing, the Company (a) shall not permit the
par value of any shares of stock receivable upon the exercise of this Warrant to exceed the amount
payable therefor upon such exercise, (b) shall take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable
shares of stock on the exercise of the Warrants from time to time outstanding; and (c) shall not
take any action which results in any adjustments of the Warrant Price if the total number of shares
of Common Stock issuable after the action upon the exercise of all of the Warrants would exceed the
total number of shares of Common Stock then authorized by the Company’s certificate of
incorporation and available for the purpose of issue upon such exercise.

7

 

          2.8
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 of the
Company for the purpose of determining the holders thereof who are entitled to receive any dividend
(other than a cash dividend payable out of earned surplus at the same rate as that of the last such
cash dividend theretofore paid) or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or property, or to
receive any other right;

               (b) any capital reorganization of the Company, any reclassification or recapitalization of the
capital stock of the Company or any transfer of all or substantially all of the assets of the
Company to any other person or any consolidation or merger involving the Company; or

               (c) any voluntary or involuntary dissolution, liquidation or winding-up of the Company, the
Company shall mail to the holder of this Warrant at least thirty (30) days prior to the earliest
date specified below, a notice specifying: (i) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and the amount and character of such
dividend, distribution or right; and (ii) the date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or winding-up is
expected to become effective and the record date for determining stockholders entitled to vote
thereon and the time, if any such time is to be fixed, as of which the holders of record of Common
Stock shall be entitled to exchange their shares of Common Stock for the securities or other
property deliverable upon such reorganization, reclassification, recapitalization, consolidation,
merger, transfer, dissolution, liquidation or winding-up.

     3. Fractional Shares. No fractional shares shall be issued in connection with any
exercise of this Warrant. In lieu of the issuance of a fractional share, the Company shall make a
cash payment equal to the then fair market value of such fractional share as determined in
accordance with Section 1.5 hereof.

     4. Representations and Warranties of the Company.

          4.1 Authorization. The Company has full power and authority to enter into this
Warrant. This Warrant has been duly authorized, executed and delivered by the Company and
constitutes its valid and legally binding obligation, enforceable in accordance with its terms.

          4.2
Reservation of Common Stock. The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for the purpose of
effecting the exercise of this Warrant, such number of its shares of Common Stock, free from
preemptive rights, as shall from time to time be sufficient to effect the exercise of this Warrant,
and if at any time the number of authorized but unissued shares of Common Stock shall not be

8

 

sufficient to effect the exercise of the entire Warrant, in addition to such other remedies
as shall be available to the holder of this Warrant, the Company will take such action as may be
necessary to increase its authorized but unissued shares of Common Stock to such number of shares
as shall be sufficient for such purposes. If any shares of its Common Stock to be reserved for the
purpose of issuance upon exercise of the Warrants require registration with or approval of any
governmental authority under any applicable law before such shares of Common Stock may be validly
issued or delivered, then it will secure such registration or approval, as the case may be, and
maintain such registration or approval in effect so long as so required.

          4.3 Adjustment in Number of Shares Issuable and Purchase Price. There has not been nor
will there be any adjustment to the number of shares issuable or the purchase price payable upon
the exercise of any securities of the Company convertible into or exchangeable for shares of Common
Stock resulting from the issuance or exercise of this Warrant.

          4.4 Valid Issuance. This Warrant, when issued and delivered in accordance with the
terms hereof will be duly authorized and validly issued, and the Common Stock issuable upon the
exercise hereof, when issued pursuant to the terms hereof and upon payment of the exercise price,
shall, upon such issuance, be duly authorized, validly issued, fully paid and nonassessable.

     5. Stock Ownership. Prior to the exercise of this Warrant, the holder shall not be
entitled, by virtue of holding this Warrant, to any rights of a stockholder of the Company,
including (without limitation) the right to vote, receive dividends or other distributions,
exercise preemptive rights or be notified of stockholder meetings, and such holder shall not be
entitled to any notice or other communication concerning the business or affairs of the Company.
Nothing in this Section 5, however, shall limit the right of the holder to be provided the notices
described in Section 2 hereof or to participate in distributions described in Section 2 hereof if
the holder ultimately exercises this Warrant.

     6. Limitation of Liability. In the absence of affirmative action by the holder hereof
to purchase the Common Stock in accordance herewith, no mere enumeration herein of the rights or
privileges of the holder hereof shall give rise to an obligation on such holder to purchase any
securities or any liability of such holder for the purchase price or as a stockholder of the
Company, whether such obligation or liability is asserted by the Company or by creditors of the
Company.

     7. Representations and Warranties of the Holder. The holder hereof represents
and warrants to the Company as follows:

          7.1 Investment Experience. The holder represents that it can bear the economic
risk of its investment and has such knowledge and experience in financial or business matters that
it is capable of evaluating the merits and risks of the investment in the Warrant and the Common

9

 

Stock issuable upon exercise hereof. The holder also represents it has not been organized
solely for the purpose of acquiring the Warrant or the Common Stock issuable upon exercise hereof.

          7.2 Restricted Securities. The holder understands that the Warrant being issued
hereunder and the Common Stock issuable upon exercise hereof are characterized as “restricted
securities” under the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and have not been registered under the Act nor
qualified under applicable state securities laws and that under such laws and applicable
regulations such securities may not be resold without registration under the Act, except in certain
limited circumstances. In this connection, the holder represents that it is familiar with Rule 144
promulgated under the Act (“Rule 144”), as presently in effect, and understands the resale
limitations imposed thereby and by the Act.

          7.3 Accredited Investor. The holder is an “accredited investor” within the meaning
of Rule 501 of Regulation D promulgated under the Act.

          7.4 Legends. It is understood that the certificates evidencing the Common
Stock issuable upon exercise hereof, or upon any transfer of such shares (other than a transfer
registered under the Act or any subsequent transfer of shares so registered) may bear the
following legend:

“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, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT.”

     8. Additional Agreements.

          8.1 Confidentiality. In handling any confidential information provided to the holder
by the Company, the holder shall exercise the same degree of care that it exercises with respect to
its own proprietary information of the same type to maintain the confidentiality thereof, except
that disclosure of such information may be made (i) to the subsidiaries or affiliates of the holder
in connection with their present or prospective business relations with the Company, (ii) to
prospective transferees or purchasers of any interest in this Warrant, provided that they
have entered into a comparable confidentiality agreement in favor of the Company, (iii) as may be
required in connection with the examination, audit or similar investigation of the holder or (iv)
if otherwise required by law. Confidential information hereunder shall mean non-public proprietary
information of the Company identified as such prior to disclosure to the holder but shall not
include information that either: (a) is in the public domain or in the knowledge or possession of
the holder when disclosed to the holder, or (b) is disclosed to the holder by a third party unless

10

 

the holder has actual knowledge that such third party is prohibited from disclosing such
information.

     9.
Transfers and Exchanges.

          9.1 Compliance with Act. The holder agrees not to sell, hypothecate, pledge or
otherwise dispose of any interest in the Warrant or the Common Stock issuable upon exercise hereof
in the United States, its territories, possessions or any area subject to its jurisdiction, or to
any person who is a national thereof or resident therein (including any estate of such person), or
any corporation, partnership or other entity created or organized therein, other than in accordance
with the Act.

          9.2 New Warrants. Upon presentation to the Company’s transfer agent of the form of
Assignment attached hereto, a new Warrant shall be issued to the new holder hereof. New Warrants
issued in connection with transfers or exchanges shall not require the signature of the new holder
hereof and shall be identical in form and provisions to this Warrant except as to the number of
shares of Common Stock covered thereby.

          9.3
Ownership of Warrants . The Company may treat the person in whose name any Warrant is registered on the
register kept at the office of the Company maintained pursuant to Section 9.4(a) as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary, except that, if and
when any Warrant is properly assigned in blank, the Company may (but shall not be obligated to)
treat the bearer thereof as the owner of such Warrant for all purposes, notwithstanding any notice
to the contrary. A Warrant, if properly assigned, may be exercised by a new holder without a new
Warrant first having been issued.

          9.4 Transfer and Exchange of Warrants.

               (a) The Company will serve as transfer agent for purposes of this Warrant, to whom and at
which location notices, presentations and demands in respect of this Warrant may be made upon the
Company, until such time as the Company shall notify the holders of the Warrants of any change in
such transfer agent or in the designated office locations thereof; and

               (b) Upon the surrender of any Warrant, properly endorsed, for registration of transfer or for
exchange, the Company at its expense will execute and deliver to or upon the order of the holder
thereof a new Warrant or Warrants of like tenor, in the name of such holder or as such holder (upon
payment by such holder of any applicable transfer taxes) may direct, representing the right to
purchase individually at least 1,000 shares and in the aggregate the number of shares of Common
Stock stated in the Warrant or Warrants so surrendered.

11

 

     10. Successors
and Assigns. The terms and provisions of this Warrant shall be
binding upon the Company and the holder and their respective successors and assigns, subject at all
times to the restrictions set forth herein; provided that any assignment by the holder
(other than assignments or transfers made to an entity which is an affiliate of, controls, is
controlled by, or is under common control with, Alexandria Real Estate Equities, Inc.) shall be
approved by the Company in writing.

     11. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and incase of loss, theft or destruction, of indemnity or security reasonably satisfactory
to the Company, and upon reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Warrant, if mutilated, the Company will make
and deliver a new warrant of like tenor and dated as of such cancellation, in lieu of this Warrant.

     12. Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein is not a Business Day, then
such action may be taken or such right may be exercised on the next succeeding full Business Day.
For purposes of this Warrant, a Business Day is a day that is not a Saturday or a Sunday, a legal
holiday or a day on which banking institutions doing business in the City of New York or the State
of Maryland are authorized by law to close.

     13. Amendments and Waivers. Any term of this Warrant may be amended and the observance
of any term of this Warrant may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company and the holder. Any
such amendment or waiver shall be binding on the parties.

     14. Governing Law. The terms and conditions of this Warrant shall be governed by and
construed in accordance with Delaware law, without regard to conflict of law provisions.

     15. Notices. Except as otherwise provided in this Warrant, any requirement for a
notice, demand or request under this Warrant will be satisfied by a writing (a) hand delivered with
receipt; (b) mailed by United States registered or certified mail or Express Mail, return receipt
requested, postage prepaid; or (c) sent by Federal Express or any other nationally recognized
overnight courier service, and addressed as follows: if to the holder of this Warrant, at its
address as shown on the books of the Company; and if to the Company, at Therapeutic Genomics, Inc.,
9700 Great Seneca Highway, Rockville, Maryland 20850, Attn: Ken Carter, Ph.D., with a copy to
Schmeltzer, Aptaker & Shepard, P.C., The Watergate, Suite 1000, 2600 Virginia Avenue, N. W.,
Washington, D.C. 20037, Attn: Mark I. Gruhin. All notices that are sent in accordance with this
Section 15 shall be deemed received by the holder or the Company on the earliest of the following
applicable time periods: (i) the date the return receipt is executed; or (ii) the date delivered
as documented by the overnight courier service or the hand delivery
receipt. Either the

12

 

holder of this Warrant or the Company may designate a change of address by written notice to the
other party.

16. Registration
Rights.

          (a) If at any time the Company proposes to file a registration statement under the Act
with respect to an offering of equity securities by the Company for its own account or for the
account of any securityholders of any class of its equity securities (other than (i) a
registration statement on Form S-4 or S-8 (or any form that may be adopted by the Securities and
Exchange Commission (the “Commission”) in substitution for such form or forms) or (ii) a
registration statement filed in connection with an exchange offer or offering of securities solely
to the Company’s existing securityholders) then the Company shall give written notice of such
proposed filing to the holder as soon as practicable (but in no event
less than twenty (20) days
before the anticipated filing date), and such notice shall offer the holder the opportunity to
register such number of shares of Registrable Securities as the holder may request (which request
shall specify the Registrable Securities intended to be disposed of and the intended method of
distribution thereof) (a “Piggy-Back Registration”).

               The
Company shall use its best efforts to cause the managing Underwriter or Underwriters of a
proposed underwritten public offering to permit the Registrable Securities requested by the holder
thereof to be included in a Piggy-Back Registration on the same terms and conditions as any similar
securities of the Company or any other securityholder included therein and to permit the sale or
other disposition of such Registrable Securities in accordance with the intended method of
distribution thereof; provided, that if the managing Underwriter determines that marketing
factors require a limitation of the number of shares to be underwritten in any registration
effected pursuant to this Section 16, the total number of Registrable Securities to be distributed
shall be accordingly limited and the Registrable Securities of the holder shall be included in any
such limited registration (i) only after and to the extent the Company has first included, or had
an opportunity to include, its Registrable Securities therein and (ii) if so required, in a
prorated amount (based on the holder’s Registrable Securities constituting a percentage of all the
Registrable Securities sought to be registered). The holder shall have the right to withdraw its
request for inclusion of its Registrable Securities in any registration statement pursuant to this
Section 16 by giving written notice to the Company of its request to
withdraw. The Company may
withdraw a Piggy-Back Registration at any time prior to the time it becomes effective;
provided . that the Company shall reimburse the holder for all reasonable out-of-pocket
expenses (including counsel fees and expenses) incurred prior to such withdrawal.

               No
failure to effect a registration under this Section 16(a) and to complete the sale of
Registrable Securities as herein provided shall relieve the Company of any other obligation under
this Agreement (including, without limitation, the Company’s obligations under Sections 16(c) and
16(d)).

13

 

          (b) In connection with any Piggy-Back Registration, the Company shall, as
expeditiously as possible:

     (1) prepare and file with the Commission such pre-effective amendments and
post-effective amendments to the registration statement as may be necessary to enable
the registration statement to become effective and to keep it effective for as long
as such registration is required to remain effective pursuant to the terms hereof,
and shall cause the prospectus to be supplemented by any required prospectus
supplement, and, as so supplemented, to be filed pursuant to Rule 424 under the Act;

     (2) furnish to the holder at least one signed copy of the registration statement
and any post-effective amendment thereto, as soon as such documents become available
to the Company, and such number of conformed copies thereof and such number of copies
of the prospectus (including each preliminary prospectus) and any amendments or
supplements thereto, and any documents incorporated by reference therein, as the
holder may reasonably request as soon as such documents become available to the
Company;

     (3) on or prior to the date on which the registration statement is declared
effective, register or qualify such Registrable Securities requested to be included
under such other securities or blue sky laws of such jurisdictions as the holder
requests and do any and all other acts and things which may be reasonably necessary
or advisable to enable the holder to consummate the disposition in such jurisdictions
of such Registrable Securities; provided, that the Company will not be
required to (i) qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify, (ii) subject itself to general taxation in any
such jurisdiction or (iii) consent to general service of process in any such
jurisdiction;

     (4) notify the holder at any time when a prospectus relating to such Registrable
Securities is required to be delivered under the Act of the happening of any event as
a result of which the prospectus included in such registration statement contains an
untrue statement of a material fact or omits to state any material fact required to
be stated therein or necessary to make the statements therein not misleading, and
prepare a supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading;

14

 

     (5) notify the holder of any stop order or other suspension of effectiveness of the
registration statement; and obtain the withdrawal of any order suspending the effectiveness of the
registration statement at the earliest possible time;

     (6) enter into such agreements (including an underwriting agreement in such form, scope and
substance as is customary in underwritten offerings) and take all such other actions in connection
therewith (including those requested by the managing underwriters, if any, or the holder) in order
to expedite or facilitate the disposition of such Registrable Securities and in such connection,
whether or not an underwriting agreement is entered into and whether or not the registration is an
underwritten registration, (i) make such representations and warranties to the holder and the
underwriters, if any, with respect to the business of the Company and its subsidiaries, the
registration statement, the prospectus and the documents incorporated by reference or deemed
incorporated by reference therein, if any, in each case, in such form, substance and scope as are
customarily made by issuers to underwriters in underwritten offerings and confirm the same if and
when requested; (ii) obtain opinions of counsel to the Company and updates thereof, which counsel
and opinions in form, scope and substance) shall be reasonably satisfactory to the managing
underwriters, if any, and the holder, addressed to the holder and each of the underwriters, if any,
covering the matters customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by the holder and such underwriters, including without
limitation the matters referred to clause (i) above; (iii) obtain “cold comfort” letters and
updates thereof from the independent certified public accountants of the Company (and, if
necessary, any other certified public accountants of any subsidiary of the Company or of any
business acquired or to be acquired by the Company for which financial statements and financial
data is, or is required to be, included in the registration statement), addressed to the holder and
each of the underwriters, if any, such letters to be in customary form and covering matters of the
type customarily covered in “cold comfort” letters in connection with underwritten offerings; and
(iv) deliver such documents and certificates as may be requested by the holder, its counsel and the
underwriters, if any, to evidence the continued validity of the representations and warranties of
the Company and its subsidiaries made pursuant to clause (i) above and to evidence compliance with
any customary conditions contained in the underwriting agreement or other agreement entered into by
the Company; and notify the holder and the underwriters, if any, promptly of the receipt by the
Company of any notification with respect to the suspension of the qualification of the Warrant
and/or Common Stock for sale in any jurisdiction; and

     (7) take all other steps reasonably necessary to effect the registration and/or qualification
of the Registrable Securities contemplated hereby.

15

 

     (8) otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission, and make available to its securityholders, as
soon as reasonably practicable, an earnings statement covering a period of twelve
(12) months, beginning within three (3) months after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Act.

     (9) use its best efforts (i) to cause any class of Registrable Securities to be
listed on the national securities exchange (if such shares are not already so
listed), and on each additional national securities exchange, on which similar
securities issued by the Company are then listed, if any, or (ii) to secure
designation of all such Registrable Securities covered by such registration
statement as a NASDAQ “national market system security” within the meaning of Rule
11Aa2-l of the Commission or, failing that, to secure NASDAQ authorization for such
Registrable Securities.

          (c) The Company
shall keep effective and maintain any registration, qualification,
approval or listing specified in this Section 16 for such period as may be necessary for the holder
to dispose of Registrable Securities in accordance with their intended method or methods of
distribution, and from time to time shall amend or supplement the prospectus used in connection
therewith to the extent necessary in order to comply with applicable law. All expenses,
disbursements and fees in connection with any action to be taken hereunder (including, without
limitation, all registration and filing fees, fees and expenses of compliance with securities or
blue sky laws, printing expenses and fees and expenses of counsel for the Company and its
independent certified public accountants and all fees and expenses of the holder and the holder’s
counsel (all such expenses being herein called “Registration Expenses”) will be borne by the
Company; provided, that the proportionate amount of Registration Expenses associated with the
registration of the holder’s Registrable Securities in any registration after the first
registration effected pursuant to this Section 16 shall be borne by the holder;
provided, however, that the holder shall not bear any such Registration Expenses in
connection with any such subsequent registration if the holder’s registration of Registrable
Securities in the subsequent registration arises in connection with any limitations imposed on the
number of holder’s Registrable Securities the holder was able to register in any prior
registration; provided, that in no event shall Registration Expenses include any
underwriting discounts, sales commissions or similar fees
attributable to the sale of Registrable Securities.

          (d) The Company hereby indemnifies, to the fullest extent permitted by law, the holder and
each person, if any, who controls the holder within the meaning of Section 15 of the Act, and the
directors, officers, employees, agents and representatives of each of them, against all losses,
claims, damages, liabilities, costs and expenses (including, without limitation, fees and expenses
of counsel), as incurred, arising out of, relating to, or caused by any untrue statement or alleged
untrue statement of a material fact contained in any registration statement, prospectus

16

 

or preliminary prospectus (or any amendment or supplement thereto) or any omission or
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses are caused by any untrue statement contained in, or omission from,
information furnished in writing to the Company by the holder expressly for use therein. In
connection with any registration statement in which the holder is participating, the holder will
furnish to the Company in writing such information as shall reasonably be requested by the Company
for use in any such registration statement or prospectus and will indemnify, to the extent
permitted by law, the Company, its directors and officers and each person, if any, who controls
the Company within the meaning of the Act against any losses, claims, damages, liabilities and
expenses resulting from any untrue statement of a material fact or any omission of a material fact
required to be stated in the registration statement or prospectus or necessary to make the
statements therein not misleading, but only to the extent that such untrue statement of a material
fact is contained in, or such material fact is omitted from, information so furnished in writing
by such holder expressly for use therein.

          (e) For purposes of this Section 16, and each other provision of this Warrant, the holder
shall include any transferee of the holder if the relevant transfer is made in accordance
herewith.

     17. Remedies. The Company acknowledges and
agrees that irreparable harm, for which
there may be no adequate remedy at law and for which the ascertainment of damages would be
difficult, would occur in the event any of the provisions of this Warrant were not performed in
accordance with its specific terms or were otherwise breached. The Company accordingly agrees that
the holders shall be entitled to an injunction or injunctions to prevent breaches of the provisions
of this Warrant and to enforce specifically the terms and provisions
hereof in any court of the
United States or any state thereof having jurisdiction, in each instance without being required to
post bond or other security and in addition to, and without having to prove the inadequacy of other
remedies at law.

     18.
Securities Matters.

     In order to make available the benefits of certain rules and regulations of the Commission,
including without limitation Rule 144 and any successor rule or regulation of the Commission, that
may at any time permit the sale of the shares of Common Stock issuable upon exercise of this
Warrant to the public without registration, the Company agrees (i) to file in a timely manner all
reports, statements and other information and documents required to be filed by it pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
(ii) whether or not the Company is subject to the reporting and other filing requirements of
Section 13 or 15(d) of the Exchange Act, to file with the Commission and, within fifteen (15) days
after the date it would be required to file such reports with the Commission if it were subject to
such reporting and other filing requirements of the Exchange Act, to deliver to the holder of this
Warrant all such reports, information and other documents as it would be required to file with the

17

 

Commission if it were subject to the requirements of Section 13 or 15(d) of the Exchange Act
and otherwise to make and keep publicly available all such information concerning the Company as
shall be necessary to enable the holder to comply with the aforementioned rules and regulations of
the Commission.

[signatures on next
page]

18

 

Warrant for the Purchase of Shares of Common Stock of Therapeutic Genomics, Inc.

	 	 	 	 	 	 	 	 	 
	 	 	Therapeutic Genomics, Inc.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	

	 	By:	 	/s/ Kenneth C. Carter	 	 
	 	 	 	 	 	 	 
	

	 	 	 	Name:
	 	Kenneth C. Carter	 	 
	

	 	 	 	Title:
	 	CEO	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ACCEPTED AND AGREED	 	 
	 	 	 	 	 
	 	 	Alexandria Real Estate Equities, LP.	 	 
	 	 	a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	ARE-QRS CORP.,	 	 
	 	 	 	 	a Maryland corporation,	 	 
	 	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	

	 	By:	 	/s/ Laurie A. Allen	 	 
	 	 	 	 	 	 	 
	

	 	 	 	Name:	 	 LAURIE A. ALLEN	 	 
	

	 	 	 	Title:	 	SENIOR VICE PRESIDENT	 	 
	

	 	 	 		 	BUSINESS DEVELOPMENT	 	 
	

	 	 	 	 	 	& LEGAL AFFAIRS	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Dated: August 11, 2000	 	 

 

 

SUBSCRIPTION

[name and address of corporation]

Ladies and Gentlemen:

     The undersigned,___________, hereby elects to purchase, pursuant to the
provisions of the Warrant, dated August ___, 2000, held by
the undersigned, ___shares of the Common Stock of Therapeutic Genomics, Inc., a Delaware corporation, and [elects to pay for
such shares through exercise of the “cashless exercise” provisions of Section 1.5 of such Warrant]
[tenders herewith payment of the purchase price of such shares in full].

     In exercising its rights to purchase such Common Stock, the undersigned hereby confirms the
investment representations made in Section 7 and the agreements made in Section 8 of such Warrant.

Dated: _____________________ 20__.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	

	 	 	 	By	 	 	 	 
	

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	

	 	Address:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

 

[FORM OF ASSIGNMENT]

The undersigned hereby assigns
this Warrant to

     (Print
or type name, address and zip code of assignee)

Please
insert Social Security or other identifying number of assignee

and irrevocably appoints                                          as agent to transfer this Warrant on
the books of the Company. The agent may substitute another to act for him or it.

	 	 	 	 	 	 	 
	Dated:                                                            

	 	 	 	Signed:                                                            
	 	 

     (Sign exactly as name appears on the front of this Warrant)

	 	 	 	 	 	 	 
	Dated:                                                            

	 	 	 	Signed:                                                            
	 	 
	

	 	 	 	Name:                                                            	 	 
	

	 	 	 	Title:                                                            	 	 

 

 

Table of Contents

	 	 	 	 	 
	 	 	Page	 
	1. Exercise of Warrant
	 	 	1	 
	1.1 Term 
	 	 	1	 
	1.2 Number of Shares 
	 	 	2	 
	1.3 Purchase Price 
	 	 	2	 
	1.4 Method of Exercise 
	 	 	2	 
	1.5 Cashless Exercise 
	 	 	2	 
	1.6 Issuance of Shares 
	 	 	3	 
	 
	 	 	 	 
	2.Certain Adjustments 
	 	 	3	 
	2.1 Mergers, Consolidations or Sale of Assets 
	 	 	3	 
	2.2 Splits and Subdivisions: Dividends 
	 	 	4	 
	2.3 Combination of Shares 
	 	 	4	 
	2.4 Adjustments for Other Distributions 
	 	 	4	 
	2.5 Issuance of Additional Common Stock 
	 	 	5	 
	2.6 Adjustment for Tender Offer 
	 	 	7	 
	2.7 Certificate as to Adjustments 
	 	 	8	 
	2.8 No Impairment 
	 	 	8	 
	2.9 Notices of Record Date, etc 
	 	 	9	 
	 
	 	 	 	 
	3. Fractional Shares 
	 	 	9	 
	 
	 	 	 	 
	4.Representations and Warranties of the Company 
	 	 	9	 
	4.1 Authorization 
	 	 	9	 
	4.2 Reservation of Common Stock 
	 	 	10	 
	4.3 Adjustment in Number of Shares Issuable and Purchase Price
	 	 	10	 
	4.4 Valid Issuance 
	 	 	10	 
	 
	 	 	 	 
	5. Stock Ownership 
	 	 	10	 
	 
	 	 	 	 
	6. Limitation of Liability 
	 	 	10	 
	 
	 	 	 	 
	7. Representations and Warranties of the Holder 
	 	 	11	 
	7.1 Investment Experience
	 	 	11	 
	7.2 Restricted Securities 
	 	 	11	 
	7.3 Accredited Investor 
	 	 	11	 
	7.4 Legends 
	 	 	11	 

i

 

Table of Contents

continued

	 	 	 	 	 
	 	 	Page	 
	8. Additional Agreements 
	 	 	11	 
	8.1 Confidentiality 
	 	 	11	 
	 
	 	 	 	 
	9. Transfers and Exchanges 
	 	 	12	 
	9.1 Compliance with Act 
	 	 	12	 
	9.2 New Warrants 
	 	 	12	 
	9.3 Ownership of Warrants 
	 	 	12	 
	9.4 Transfer and Exchange of Warrants 
	 	 	12	 
	 
	 	 	 	 
	10. Successors and Assigns 
	 	 	13	 
	 
	 	 	 	 
	11. Loss, Theft, Destruction or Mutilation of Warrant 
	 	 	13	 
	 
	 	 	 	 
	12.
Saturdays, Sundays, Holidays, etc. 
	 	 	13	 
	 
	 	 	 	 
	13. Amendments and Waivers 
	 	 	13	 
	 
	 	 	 	 
	14. Governing Law 
	 	 	13	 
	 
	 	 	 	 
	15. Notices
	 	 	13	 
	 
	 	 	 	 
	16. Registration Rights 
	 	 	14	 
	 
	 	 	 	 
	17. Remedies 
	 	 	18	 
	 
	 	 	 	 
	18. Securities Matters 
	 	 	18	 

ii

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]