Document:

Exhibit 10.1  

         

  

January 26,
2005 

Dexter
Paine

Fox Paine & Company, LLC

950 Tower Lane, Suite 1950

Foster City, CA 94404 

Dear
Dexter: 

        By
way of a letter dated May 14, 1999, Fox Paine and Company, LLC ("FPC") entered into an agreement (the "Agreement") with Alaska Communications Systems Holdings, Inc.
("ACSH"). The Agreement provided for ACSH to pay FPC: (1) a one-time transaction closing fee; and (2) an annual management fee equal to 1.0% of ACSH's annual consolidated
EBITDA. Under its terms, the Agreement was to be annually renewed automatically unless terminated in writing. 

        ACSH
and its parent, Alaska Communications Systems Group, Inc., have embarked on a recapitalization plan involving the offering of new equity, entering into a new bank credit
facility, and retiring some of its outstanding bonds. In recognition of the value of advising ACSH and its parent in the recapitalization transactions, and for other good and valuable consideration
including FPC's willingness to terminate its Agreement with ACSH, ACSH will pay FPC a one-time refinancing fee of $2.7 million plus FPC's transaction-related expenses related to
advising ACSH and its parent. In addition, ACSH will continue to reimburse FPC for out-of-pocket expenses related to advising ACSH and its parent in accord with prior practice
for so long as FPC continues to hold ten percent or more of voting stock of the company or the parties agree to terminate expense reimbursements by written agreement. 

        Accordingly,
subject only to the ACSH Board of Directors approval of the FPC refinancing fee of $2.7 million plus FPC's transaction-related expenses, and continuing expense
reimbursements as set forth above, FPC hereby terminates its Agreement with ACSH effective midnight, December 31, 2004
and as of such date, the Agreement shall have no further force and effect. Nothing in this letter agreement shall reduce or modify ACSH's obligation to pay the 2004 FPC fee due to be paid in 2005. 

        Please
confirm that the foregoing is in accordance with your understandings by executing a copy of this agreement in the space provided below. 

Very
truly yours, 

/s/
LIANE PELLETIER 

Liane
Pelletier

CEO and Chair

Alaska Communications Systems Holdings, Inc. 

ACCEPTED
AND AGREED AS OF

THE DATE SET FORTH ABOVE: 

	/s/ DEXTER PAINE
 Dexter Paine

Fox Paine & Company LLCExhibit
10.1

 

SUNESIS PHARMACEUTICALS
INCORPORATED

 

1998 STOCK PLAN

(amended as of October 4, 2001)

 

1.             Purposes of the Plan.  The purposes of this 1998 Stock Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company’s
business.  Options granted under the Plan
may be Incentive Stock Options (as defined under Section 422 of the Code)
or Nonstatutory Stock Options, as determined by the Administrator at the time
of grant of an option and subject to the applicable provisions of Section 422
of the Code, as amended, and the regulations promulgated thereunder.  Stock purchase rights may also be granted
under the Plan.

 

2.             Definitions.  As used herein, the following definitions
shall apply:

 

(a)           “Administrator” means the Board or any of its
Committees appointed pursuant to Section 4 of the Plan.

 

(b)           “Board” means the Board of Directors of the Company.

 

(c)           “Code” means the Internal Revenue Code of 1986, as
amended.

 

(d)           “Committee” means the Committee appointed by the
Board of Directors in accordance with Section 4(a) and (b) of the Plan.

 

(e)           “Common Stock” means the Common Stock of the Company.

 

(f)            “Company” means Sunesis Pharmaceuticals Incorporated,
a Delaware corporation.

 

(g)           “Consultant” means any person, including an advisor,
who is engaged by the Company or any Parent or Subsidiary to render services
and is compensated for such services, and any director of the Company whether
compensated for such services or not.

 

(h)           “Continuous Status as an Employee or Consultant”
means the absence of any interruption or termination of service as an Employee
or Consultant.  Continuous Status as an
Employee or Consultant shall not be considered interrupted in the case of:  (i) sick leave; (ii) military
leave; (iii) any other leave of absence approved by the Administrator,
provided that such leave is for a period of not more than 90 days, unless
reemployment upon the expiration of such leave is guaranteed by contract or
statute, or unless provided otherwise pursuant to Company policy adopted from
time to time; or (iv) in the case of transfers between locations of the
Company or between the Company, its Subsidiaries or their respective
successors.  For purposes of this Plan, a
change in status from an Employee to a Consultant or from a Consultant to an
Employee will not constitute an interruption of Continuous Status as an
Employee or Consultant.

 

 

(i)            “Employee” means any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company,
with the status of employment determined based upon such minimum number of
hours or periods worked as shall be determined by the Administrator in its
discretion, subject to any requirements of the Code.  The payment by the Company of a director’s
fee to a director shall not be sufficient to constitute “employment” of such
director by the Company.

 

(j)            “Exchange Act” means the Securities Exchange Act of
1934, as amended.

 

(k)           “Fair Market Value” means, as of any date, the fair
market value of Common Stock determined as follows:

 

(i)            If the
Common Stock is listed on any established stock exchange or a national market
system including without limitation the National Market of the National
Association of Securities Dealers, Inc. Automated Quotation (“Nasdaq”)
System, its Fair Market Value shall be the closing sales price for such stock
(or the closing bid, if no sales were reported), as quoted on such system or
exchange, or the exchange with the greatest volume of trading in Common Stock
for the last market trading day prior to the time of determination, as reported
in The Wall Street Journal or such other
source as the Administrator deems reliable;

 

(ii)           If the
Common Stock is quoted on the Nasdaq System (but not on the National Market
thereof) or regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean between the
high bid and low asked prices for the Common Stock for the last market trading
day prior to the time of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems
reliable; or

 

(iii)          In
the absence of an established market for the Common Stock, the Fair Market
Value thereof shall be determined in good faith by the Administrator.

 

(l)            “Incentive Stock Option” means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of
the Code, as designated in the applicable written Option Agreement.

 

(m)          “Nonstatutory Stock Option” means an Option not
intended to qualify as an Incentive Stock Option, as designated in the
applicable written Option Agreement.

 

(n)           “Option” means a stock option granted pursuant to the
Plan.

 

(o)           “Option Agreement” means a written agreement between
an Optionee and the Company reflecting the terms of an Option granted under the
Plan and includes any documents attached to such Option Agreement, including,
but not limited to, a notice of stock option grant and a form of exercise
notice.

 

(p)           “Optioned Stock” means the Common Stock subject to an
Option or a Stock Purchase Right.

 

2

 

(q)           “Optionee” means an Employee or Consultant who
receives an Option or a Stock Purchase Right.

 

(r)            “Parent” means a “parent corporation,” whether now or
hereafter existing, as defined in Section 424(e) of the Code, or any
successor provision.

 

(s)           “Plan” means this 1998 Stock Plan.

 

(t)            “Reporting Person” means an officer, director, or
greater than 10% stockholder of the Company within the meaning of Rule 16a-2
under the Exchange Act, who is required to file reports pursuant to Rule 16a-3
under the Exchange Act.

 

(u)           “Restricted Stock” means shares of Common Stock
acquired pursuant to a grant of a Stock Purchase Right under Section 10
below.

 

(v)           “Restricted Stock Purchase Agreement” means a written
agreement between a holder of a Stock Purchase Right and the Company reflecting
the terms of a Stock Purchase Right granted under the Plan and includes any
documents attached to such agreement.

 

(w)          “Rule 16b-3” means Rule 16b-3 promulgated under the
Exchange Act, as the same may be amended from time to time, or any successor
provision.

 

(x)            “Share” means a share of the Common Stock, as
adjusted in accordance with Section 12 of the Plan.

 

(y)           “Stock Exchange” means any stock exchange or
consolidated stock price reporting system on which prices for the Common Stock
are quoted at any given time.

 

(z)            “Stock Purchase Right” means the right to purchase
Common Stock pursuant to Section 10 below.

 

(aa)         “Subsidiary” means a “subsidiary corporation,”
whether now or hereafter existing, as defined in Section 424(f) of the
Code, or any successor provision.

 

3.             Stock Subject to the Plan.  Subject to the provisions of Section 12
of the Plan, the maximum aggregate number of Shares that may be optioned and
sold under the Plan is 10,341,350 shares of Common Stock.  The Shares may be authorized, but unissued,
or reacquired Common Stock.  If an Option
should expire or become unexercisable for any reason without having been
exercised in full, the unpurchased Shares that were subject thereto shall,
unless the Plan shall have been terminated, become available for future grant
under the Plan.  In addition, any Shares
of Common Stock which are retained by the Company upon exercise of an Option or
Stock Purchase Right in order to satisfy the exercise or purchase price for such
Option or Stock Purchase Right or any withholding taxes due with respect to
such exercise shall be treated as not issued and shall continue to be available
under the Plan.  Shares of Restricted
Stock or restricted stock issued pursuant to an Option which are repurchased by
the Company at their original purchase price shall become available for future
grant under the Plan.

 

3

 

4.             Administration of the Plan.

 

(a)           Initial Plan Procedure.  Prior to the date, if any, upon which the
Company becomes subject to the Exchange Act, the Plan shall be administered by
the Board or a Committee appointed by the Board.

 

(b)           Plan Procedure After the Date, if any, Upon Which
the Company Becomes Subject to the Exchange Act.

 

(i)            Multiple Administrative Bodies.  If permitted by Rule 16b-3, grants under the
Plan may be made by different bodies with respect to directors, non-director
officers and Employees or Consultants who are not Reporting Persons.

 

(ii)           Administration With Respect to Reporting Persons.  With respect to grants of Options or Stock
Purchase Rights to Employees who are Reporting Persons, such grants shall be
made by (A) the Board if the Board may make grants to Reporting Persons
under the Plan in compliance with Rule 16b-3, or (B) a Committee designated
by the Board to make grants to Reporting Persons under the Plan, which
Committee shall be constituted in such a manner as to permit grants under the
Plan to comply with Rule 16b-3. 
Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. 
From time to time the Board may increase the size of the Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however caused,
and remove all members of the Committee and thereafter directly make grants to
Reporting Persons under the Plan, all to the extent permitted by
Rule 16b-3.

 

(iii)          Administration With Respect to Consultants and
Other Employees.  With
respect to grants of Options or Stock Purchase Rights to Employees or
Consultants who are not Reporting Persons, the Plan shall be administered by
(A) the Board or (B) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy the legal
requirements relating to the administration of Incentive Stock Option plans, if
any, of applicable corporate and securities laws, of the Code and of any
applicable Stock Exchange (the “Applicable Laws”).  Once appointed, such Committee shall continue
to serve in its designated capacity until otherwise directed by the Board.  From time to time the Board may increase the
size of the Committee and appoint additional members thereof, remove members (with
or without cause) and appoint new members in substitution therefor, fill
vacancies, however caused, and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by the
Applicable Laws.

 

(c)           Powers of the Administrator.  Subject to the provisions of the Plan and in
the case of a Committee, the specific duties delegated by the Board to such
Committee, and subject to the approval of any relevant authorities, including
the approval, if required, of any Stock Exchange, the Administrator shall have
the authority, in its discretion:

 

(i)            to
determine the Fair Market Value of the Common Stock, in accordance with Section 2(k)
of the Plan;

 

4

 

(ii)           to select
the Consultants and Employees to whom Options and Stock Purchase Rights or any
combination thereof may from time to time be granted hereunder;

 

(iii)          to
determine whether and to what extent Options and Stock Purchase Rights or any
combination thereof are granted hereunder;

 

(iv)          to
determine the number of shares of Common Stock to be covered by each such award
granted hereunder;

 

(v)           to approve
forms of agreement for use under the Plan;

 

(vi)          to
determine the terms and conditions, not inconsistent with the terms of the
Plan, of any award granted hereunder;

 

(vii)         to
determine whether and under what circumstances an Option may be settled in cash
under Section 9(f) instead of Common Stock;

 

(viii)        to
reduce the exercise price of any Option to the then current Fair Market Value
if the Fair Market Value of the Common Stock covered by such Option shall have
declined since the date the Option was granted;

 

(ix)           to
determine the terms and restrictions applicable to Stock Purchase Rights and
the Restricted Stock purchased by exercising such Stock Purchase Rights;

 

(x)            to
construe and interpret the terms of the Plan and awards granted pursuant to the
Plan; and

 

(xi)           in order
to fulfill the purposes of the Plan and without amending the Plan, to modify
grants of Options or Stock Purchase Rights to participants who are foreign
nationals or employed outside of the United States in order to recognize
differences in local law, tax policies or customs.

 

(d)           Effect of Administrator’s Decision.  All decisions, determinations and
interpretations of the Administrator shall be final and binding on all holders
of Options or Stock Purchase Rights.

 

5.             Eligibility.

 

(a)           Recipients of Grants.  Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Employees and Consultants.  Incentive Stock Options may be granted only
to Employees.  An Employee or Consultant
who has been granted an Option or Stock Purchase Right may, if he or she is
otherwise eligible, be granted additional Options or Stock Purchase Rights.

 

(b)           Type of Option.  Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option.  However, notwithstanding such
designations, to the extent that the aggregate Fair Market Value of Shares

 

5

 

with respect to which
Options designated as Incentive Stock Options are exercisable for the first
time by any Optionee during any calendar year (under all plans of the Company
or any Parent or Subsidiary) exceeds $100,000, such excess Options shall be
treated as Nonstatutory Stock Options. 
For purposes of this Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares subject to an Incentive Stock Option shall be determined as
of the date of the grant of such Option.

 

(c)           The Plan
shall not confer upon the holder of any Option or Stock Purchase Right any
right with respect to continuation of employment or consulting relationship
with the Company, nor shall it interfere in any way with such holder’s right or
the Company’s right to terminate his or her employment or consulting
relationship at any time, with or without cause.

 

6.             Term of Plan.  The Plan shall become effective upon the
earlier to occur of its adoption by the Board of Directors or its approval by
the stockholders of the Company as described in Section 19 of the
Plan.  It shall continue in effect for a
term of ten years unless sooner terminated under Section 15 of the Plan.

 

7.             Term of Option.  The term of each Option shall be the term
stated in the Option Agreement; provided, however, that the term shall be no
more than ten years from the date of grant thereof or such shorter term as
may be provided in the Option Agreement and provided further that, in the case
of an Incentive Stock Option granted to an Optionee who, at the time the Option
is granted, owns stock representing more than 10% of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
term of the Option shall be five years from the date of grant thereof or such
shorter term as may be provided in the Option Agreement.

 

8.             Option Exercise Price and Consideration.

 

(a)           The per
share exercise price for the Shares to be issued pursuant to exercise of an
Option shall be such price as is determined by the Board and set forth in the
applicable agreement, but shall be subject to the following:

 

(i)            In the
case of an Incentive Stock Option that is:

 

(A)          granted to
an Employee who, at the time of the grant of such Incentive Stock Option, owns
stock representing more than 10% of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary, the per Share
exercise price shall be no less than 110% of the Fair Market Value per Share on
the date of grant.

 

(B)           granted to
any other Employee, the per Share exercise price shall be no less than 100% of
the Fair Market Value per Share on the date of grant.

 

(ii)           In the
case of a Nonstatutory Stock Option that is:

 

(A)          granted to
a person who, at the time of the grant of such Option, owns stock representing
more than 10% of the total combined voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise price shall be no
less than 110% of the Fair Market Value per Share on the date of the grant.

 

6

 

(B)           granted to
any person, the per Share exercise price shall be no less than 85% of the Fair
Market Value per Share on the date of grant.

 

(b)           The
consideration to be paid for the Shares to be issued upon exercise of an
Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash,
(2) check, (3) promissory note (subject to the provisions of Section 153
of the Delaware General Corporation Law), (4) other Shares that
(x) in the case of Shares acquired upon exercise of an Option, have been
owned by the Optionee for more than six months on the date of surrender or such
other period as may be required to avoid a charge to the Company’s earnings,
and (y) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which such Option shall be
exercised, (5) authorization for the Company to retain from the total
number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised,
(6) delivery of a properly executed exercise notice together with such
other documentation as the Administrator and the broker, if applicable, shall
require to effect an exercise of the Option and delivery to the Company of the
sale or loan proceeds required to pay the exercise price and any applicable
income or employment taxes, (7) delivery of an irrevocable subscription
agreement for the Shares that irrevocably obligates the option holder to take
and pay for the Shares not more than twelve months after the date of delivery
of the subscription agreement, (8) any combination of the foregoing
methods of payment, or (9) such other consideration and method of payment
for the issuance of Shares to the extent permitted under the Applicable
Laws.  In making its determination as to
the type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to benefit the
Company.

 

9.             Exercise of Option.

 

(a)           Procedure for Exercise; Rights as a Stockholder.  Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the
Administrator and reflected in the Option Agreement, which may include vesting
requirements and/or performance criteria with respect to the Company and/or the
Optionee; provided, however, that such Option shall become exercisable at the
rate of at least 20% per year over five years from the date the Option is
granted. In the event that any of the Shares issued upon exercise of an Option
should be subject to a right of repurchase in the Company’s favor, such
repurchase right shall lapse at the rate of at least 20% per year over five
years from the date the Option is granted. Notwithstanding the above, in the
case of an Option granted to an officer, director or Consultant of the Company
or any Parent or Subsidiary of the Company, the Option may become fully
exercisable, and a repurchase right, if any, in favor of the Company shall
lapse, at any time or during any period established by the Administrator.

 

An Option may not be
exercised for a fraction of a Share.

 

An Option shall be deemed
to be exercised when written notice of such exercise has been given to the
Company in accordance with the terms of the Option by the person entitled to
exercise the Option and the Company has received full payment for the Shares
with respect to which the Option is exercised. 
Full payment may, as authorized by the Board, consist of any

 

7

 

consideration and method
of payment allowable under Section 8(b) of the Plan.  Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, not withstanding the exercise of the
Option.  The Company shall issue (or cause
to be issued) such stock certificate promptly upon exercise of the Option.  No adjustment will be made for a dividend or
other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 12 of the Plan.

 

Exercise of an Option in
any manner shall result in a decrease in the number of Shares that thereafter
may be available, both for purposes of the Plan and for sale under the Option,
by the number of Shares as to which the Option is exercised.

 

(b)           Termination of Employment or Consulting Relationship.  Subject to Section 9(c) below, in the
event of termination of an Optionee’s Continuous Status as an Employee or
Consultant with the Company, such Optionee may, but only within three months
(or such other period of time not less than 30 days as is determined by the
Administrator, with such determination in the case of an Incentive Stock Option
being made at the time of grant of the Option and not exceeding three months)
after the date of such termination (but in no event later than the expiration
date of the term of such Option as set forth in the Option Agreement), exercise
his or her Option to the extent that the Optionee was entitled to exercise it
at the date of such termination.  To the
extent that the Optionee was not entitled to exercise the Option at the date of
such termination, or if the Optionee does not exercise such Option to the
extent so entitled within the time specified herein, the Option shall
terminate.  No termination shall be
deemed to occur and this Section 9(b) shall not apply if (i) the
Optionee is a Consultant who becomes an Employee, or (ii) the Optionee is
an Employee who becomes a Consultant.

 

(c)           Disability of Optionee.

 

(i)            Notwithstanding
Section 9(b) above, in the event of termination of an Optionee’s
Continuous Status as an Employee or Consultant as a result of his or her total
and permanent disability (within the meaning of Section 22(e)(3) of the
Code), such Optionee may, but only within twelve months from the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination.  To the extent that the Optionee was not
entitled to exercise the Option at the date of termination, or if the Optionee
does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.

 

(ii)           In the
event of termination of an Optionee’s Continuous Status as an Employee or Consultant
as a result of a disability which does not fall within the meaning of total and
permanent disability (as set forth in Section 22(e)(3) of the Code), such
Optionee may, but only within six months from the date of such termination (but
in no event later than the expiration date of the term of such Option as set
forth in the Option Agreement), exercise the Option to the extent otherwise
entitled to exercise it at the date of such termination.  However, to the extent that such Optionee
fails to exercise an Option which is an Incentive Stock Option (“ISO”)
(within the meaning of Section 422 of the Code) within three months of the
date of such

 

8

 

termination, the Option
will not qualify for ISO treatment under the Code.  To the extent that the Optionee was not
entitled to exercise the Option at the date of termination, or if the Optionee
does not exercise such Option to the extent so entitled within six months from
the date of termination, the Option shall terminate.

 

(d)           Death of Optionee.  In the event of the death of an Optionee
during the period of Continuous Status as an Employee or Consultant since the
date of grant of the Option, or within 30 days following termination of the
Optionee’s Continuous Status as an Employee or Consultant, the Option may be
exercised, at any time within six months following the date of death (but in no
event later than the expiration date of the term of such Option as set forth in
the Option Agreement), by such Optionee’s estate or by a person who acquired
the right to exercise the Option by bequest or inheritance, but only to the
extent of the right to exercise that had accrued at the date of death or, if
earlier, the date of termination of the Optionee’s Continuous Status as an
Employee or Consultant.  To the extent
that the Optionee was not entitled to exercise the Option at the date of death
or termination, as the case may be, or if the Optionee does not exercise such
Option to the extent so entitled within the time specified herein, the Option
shall terminate.

 

(e)           Rule 16b-3.  Options granted to Reporting Persons shall
comply with Rule 16b-3 and shall contain such additional conditions or
restrictions as may be required thereunder to qualify for the maximum exemption
for Plan transactions.

 

10.           Stock Purchase Rights.

 

(a)           Rights to Purchase.  Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. 
After the Administrator determines that it will offer Stock Purchase
Rights under the Plan, it shall advise the offeree in writing of the terms,
conditions and restrictions related to the offer, including the number of
Shares that such person shall be entitled to purchase, the price to be paid
(which price shall not be less than 85% of the Fair Market Value of the Shares
as of the date of the offer, or, in the case of a person owning stock
representing more than 10% of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary, the price shall not be less
than 100% of the Fair Market Value of the Shares as of the date of the offer),
and the time within which such person must accept such offer, which shall in no
event exceed 30 days from the date upon which the Administrator made the
determination to grant the Stock Purchase Right.  The offer shall be accepted by execution of a
Restricted Stock Purchase Agreement in the form determined by the Administrator.

 

(b)           Repurchase Option.  Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser’s employment with the Company for any reason (including death or
disability).  The purchase price for
Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be
the original purchase price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at such rate as the Administrator may determine;
provided, however, that with respect to an Optionee who is not an officer,
director or Consultant

 

9

 

of the Company or of any
Parent or Subsidiary of the Company, it shall lapse at a minimum rate of 20%
per year.

 

(c)           Other Provisions.  The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.  In addition, the provisions of Restricted
Stock Purchase Agreements need not be the same with respect to each purchaser.

 

(d)           Rights as a Stockholder.  Once the Stock Purchase Right is exercised, the
purchaser shall have the rights equivalent to those of a stockholder, and shall
be a stockholder when his or her purchase is entered upon the records of the
duly authorized transfer agent of the Company. 
No adjustment will be made for a dividend or other right for which the
record date is prior to the date the Stock Purchase Right is exercised, except
as provided in Section 12 of the Plan.

 

11.           Stock Withholding to Satisfy Withholding Tax
Obligations.  At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph.  When an
Optionee incurs tax liability in connection with an Option or Stock Purchase
Right, which tax liability is subject to tax withholding under applicable tax
laws, and the Optionee is obligated to pay the Company an amount required to be
withheld under applicable tax laws, the Optionee may satisfy the withholding
tax obligation by one or some combination of the following methods:  (a) by cash or check payment, or
(b) out of the Optionee’s current compensation, (c) if permitted by
the Administrator, in its discretion, by surrendering to the Company Shares
that (i) in the case of Shares previously acquired from the Company, have
been owned by the Optionee for more than six months on the date of surrender,
and (ii) have a fair market value on the date of surrender equal to or
less than the Optionee’s marginal tax rate times the ordinary income
recognized, or (d) by electing to have the Company withhold from the
Shares to be issued upon exercise of the Option, or the Shares to be issued in
connection with the Stock Purchase Right, if any, that number of Shares having
a fair market value equal to the amount required to be withheld.  For this purpose, the fair market value of
the Shares to be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined (the “Tax Date”).

 

Any surrender by a
Reporting Person of previously owned Shares to satisfy tax withholding
obligations arising upon exercise of this Option must comply with the
applicable provisions of Rule 16b-3.

 

All elections by an
Optionee to have Shares withheld to satisfy tax withholding obligations shall
be made in writing in a form acceptable to the Administrator and shall be
subject to the following restrictions:

 

(a)           the
election must be made on or prior to the applicable Tax Date;

 

(b)           once made,
the election shall be irrevocable as to the particular Shares of the Option or
Stock Purchase Right as to which the election is made; and

 

(c)           all
elections shall be subject to the consent or disapproval of the Administrator.

 

10

 

In the event the election
to have Shares withheld is made by an Optionee and the Tax Date is deferred
under Section 83 of the Code because no election is filed under Section 83(b)
of the Code, the Optionee shall receive the full number of Shares with respect
to which the Option or Stock Purchase Right is exercised but such Optionee
shall be unconditionally obligated to tender back to the Company the proper
number of Shares on the Tax Date.

 

12.           Adjustments Upon Changes in Capitalization, Merger
or Certain Other Transactions.

 

(a)           Changes in Capitalization.  Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock that have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or that have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination, recapitalization or reclassification of the Common Stock, or any
other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be
deemed to have been “effected without receipt of consideration.”  Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and
conclusive.  Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Option or Stock Purchase Right.

 

(b)           Dissolution or Liquidation.  In the event of the proposed dissolution or
liquidation of the Company, the Board shall notify the Optionee at least 15
days prior to such proposed action.  To
the extent it has not been previously exercised, the Option or Stock Purchase
Right will terminate immediately prior to the consummation of such proposed
action.

 

(c)           Merger or Sale of Assets.  In the event of a proposed sale of all or
substantially all of the Company’s assets or a merger of the Company with or
into another corporation where the successor corporation issues its securities
to the Company’s stockholders, each outstanding Option or Stock Purchase Right
shall be assumed or an equivalent option or right shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the successor corporation does not agree to assume the Option or Stock
Purchase Right or to substitute an equivalent option or right, in which case
such Option or Stock Purchase Right shall terminate upon the consummation of
the merger or sale of assets. For purposes of this Section 12(c), an
Option or a Stock Purchase Right shall be considered assumed, without
limitation, if, at the time of issuance of the stock or other consideration
upon such merger or sale of assets, each holder of an Option or a Stock Purchase
Right would be entitled to receive upon exercise of the Option or Stock
Purchase Right the same number and kind of shares of stock or the same amount
of property, cash or securities as such holder would have been entitled to
receive upon the occurrence of such transaction if the holder had been,
immediately

 

11

 

prior to such
transaction, the holder of the number of Shares of Common Stock covered by the
Option or the Stock Purchase Right at such time (after giving effect to any
adjustments in the number of Shares covered by the Option or Stock Purchase
Right as provided for in this Section 12).

 

(d)           Certain Distributions.  In the event of any distribution to the
Company’s stockholders of securities of any other entity or other assets (other
than dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per share of Common Stock covered by each
outstanding Option or Stock Purchase Right to reflect the effect of such
distribution.

 

13.           Non-Transferability of Options and Stock Purchase
Rights.  Options and Stock
Purchase Rights may not be sold, pledged, assigned, hypothecated, transferred,
or disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised or purchased during the lifetime of the
Optionee or Stock Purchase Rights Holder only by the Optionee or Stock Purchase
Rights Holder.

 

14.           Time of Granting Options and Stock Purchase Rights.  The date of grant of an Option or Stock
Purchase Right shall, for all purposes, be the date on which the Administrator
makes the determination granting such Option or Stock Purchase Right, or such
other date as is determined by the Board; provided, however, that in the case
of any Incentive Stock Option, the grant date shall be the later of the date on
which the Administrator makes the determination granting such Incentive Stock
Option or the date of commencement of the Optionee’s employment relationship
with the Company.  Notice of the
determination shall be given to each Employee or Consultant to whom an Option
or Stock Purchase Right is so granted within a reasonable time after the date of
such grant.

 

15.           Amendment and Termination of the Plan.

 

(a)           Authority to Amend or Terminate.  The Board may at any time amend, alter,
suspend or discontinue the Plan, but no amendment, alteration, suspension or
discontinuation shall be made that would impair the rights of any Optionee
under any grant theretofore made, without his or her consent.  In addition, to the extent necessary and
desirable to comply with Rule 16b-3 or with Section 422 of the Code (or
any other applicable law or regulation, including the requirements of any Stock
Exchange), the Company shall obtain stockholder approval of any Plan amendment
in such a manner and to such a degree as required.

 

(b)           Effect of Amendment or Termination.  No amendment or termination of the Plan shall
adversely affect Options already granted, unless mutually agreed otherwise
between the Optionee and the Board, which agreement must be in writing and
signed by the Optionee and the Company.

 

16.           Conditions Upon Issuance of Shares.  Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as

 

12

 

amended, the Exchange
Act, the rules and regulations promulgated thereunder, and the requirements of
any Stock Exchange.

 

As a condition to the
exercise of an Option, the Company may require the person exercising such
Option to represent and warrant at the time of any such exercise that the
Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by law.

 

17.           Reservation of Shares.  The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.  The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

 

18.           Agreements.  Options and Stock Purchase Rights shall be
evidenced by written Option Agreements and Restricted Stock Purchase Agreements,
respectively, in such form(s) as the Administrator shall approve from time to
time.

 

19.           Stockholder Approval.  Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve months before or
after the date the Plan is adopted.  Such
stockholder approval shall be obtained in the degree and manner required under
applicable state and federal law and the rules of any Stock Exchange upon which
the Common Stock is listed.  All Options
and Stock Purchase Rights issued under the Plan shall become void in the event
such approval is not obtained.

 

20.           Information and Documents to Optionees and
Purchasers.  The Company
shall provide financial statements at least annually to each Optionee and to
each individual who acquired Shares Pursuant to the Plan, during the period
such Optionee or purchaser has one or more Options or Stock Purchase Rights
outstanding, and in the case of an individual who acquired Shares pursuant to
the Plan, during the period such individual owns such Shares.  The Company shall not be required to provide
such information if the issuance of Options or Stock Purchase Rights under the
Plan is limited to key employees whose duties in connection with the Company
assure their access to equivalent information. 
In addition, at the time of issuance of any securities under the Plan,
the Company shall provide to the Optionee or the Purchaser a copy of the Plan
and any agreement(s) pursuant to which securities granted under the Plan are
issued.

 

13

 

SUNESIS
PHARMACEUTICALS INCORPORATED

 

1998 STOCK
PLAN

 

NOTICE OF STOCK OPTION GRANT

 

Address:

 

You have been granted an
option to purchase Common Stock (“Common Stock”) of Sunesis
Pharmaceuticals Incorporated (the “Company”) as follows:

 

	
  Board Approval
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Vesting
  Commencement Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exercise Price
  Per Share:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total Number of
  Shares Granted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total Exercise
  Price:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Type of Option:

  	
   

  	
  Incentive Stock
  Option (“ISO”)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Nonstatutory
  Stock Option (“NSO”)

  

 

Term/Expiration Date:

 

Vesting Schedule:                                                  This
Option may be exercised, in whole or in part, in accordance with the following
schedule: one forty-eighth (1/48th) of the total number of shares subject to
the options shall become exercisable at the end of each month following the
Vesting Commencement Date set forth above until all such shares are
exercisable, based upon such individual’s continued employment by the
corporation.

 

 

Termination Period:                                                                                                                                      This
Option may be exercised for 30 days after termination of employment or
consulting relationship except as set out in Sections 6 and 7 of the Stock
Option Agreement (but in no event later than the Expiration Date).

 

By your signature and the
signature of the Company’s representative below, you and the Company agree that
this Option is granted under and governed by the terms and conditions of the
1998 Stock Plan and the Stock Option Agreement, both of which are attached and
made a part of this document.

 

	
   

  	
   

  	
  SUNESIS PHARMACEUTICALS

  
	
   

  	
   

  	
  INCORPORATED:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
  Signature

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  	
  Print Name and Title

  

 

 

2

 

 

SUNESIS PHARMACEUTICALS
INCORPORATED

 

1998 STOCK PLAN

 

STOCK OPTION AGREEMENT

 

1.                                       Grant of Option.  Sunesis Pharmaceuticals Incorporated, a
Delaware corporation (the “Company”) hereby grants to  (“Optionee”) an option (the “Option”)
to purchase a total number of shares of Common Stock (the “Shares”) set
forth in the Notice of Stock Option Grant, at the exercise price per share set
forth in the Notice of Stock Option Grant (the “Exercise Price”) subject
to the terms, definitions and provisions of the Sunesis Pharmaceuticals
Incorporated 1998 Stock Plan (the “Plan” adopted by the Company, which
is incorporated herein by reference. 
Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option.

 

If designated an Incentive Stock Option, this Option
is intended to qualify as an Incentive Stock Option as defined in Section 422
of the Code.

 

2.                                       Exercise of Option.  This Option shall be exercisable during its
Term in accordance with the Vesting Schedule set out in the Notice of
Stock Option Grant and with the provisions of Section 9 of the Plan as
follows:

 

(a)                                  Right to Exercise.

 

(i)                                      This
Option may be exercised in whole or in part at any time after the Date of
Grant, as to Shares which have not yet vested under the vesting schedule indicated
on the Notice of Stock Option Grant; provided, however, that
Optionee shall execute as a condition to such exercise of this Option, the
Early Exercise Notice and Restricted Stock Purchase Agreement attached hereto
as Exhibit A (the “Early Exercise Agreement”).  If Optionee chooses to exercise this Option
solely as to Shares which have vested under the vesting schedule indicated
on the Notice of Stock Option Grant, Optionee shall complete and execute the
form of Exercise Notice and Restricted Stock Purchase Agreement attached hereto
as Exhibit B (the “Exercise Agreement”).  Notwithstanding the foregoing, the Company
may in its discretion prescribe or accept a different form of notice of
exercise and/or stock purchase agreement if such forms are otherwise consistent
with this Agreement, the Plan and then-applicable law.

 

(ii)                                   This
Option may not be exercised for a fraction of a share.

 

(iii)                                In
the event of Optionee’s death, disability or other termination of employment or
consulting relationship, the exercisability of the Option is governed by
Sections 5, 6 and 7 below, subject to the limitation contained in Section 2(a)(iv)
below.

 

(iv)                               In
no event may this Option be exercised after the Expiration Date of this Option
as set forth in the Notice of Stock Option Grant.

 

 

(b)                                    Method of Exercise.  This Option shall be exercisable by execution
and delivery of the Early Exercise Agreement or the Exercise Agreement,
whichever is applicable, or of any other written notice approved for such
purpose by the Company which shall state the election to exercise the Option,
the number of Shares in respect of which the Option is being exercised, and
such other representations and agreements as to the holder’s investment intent
with respect to such shares of Common Stock as may be required by the Company
pursuant to the provisions of the Plan. 
Such written notice shall be signed by Optionee and shall be delivered
in person or by certified mail to the Secretary of the Company.  The written notice shall be accompanied by
payment of the Exercise Price.  This
Option shall be deemed to be exercised upon receipt by the Company of such
written notice accompanied by the Exercise Price.

 

No Shares will be issued
pursuant to the exercise of an Option unless such issuance and such exercise
shall comply with all relevant provisions of applicable law, including the
requirements of any stock exchange upon which the Shares may then be
listed.  Assuming such compliance, for
income tax purposes the Shares shall be considered transferred to Optionee on
the date on which the Option is exercised with respect to such Shares.

 

3.                                       Method of Payment.  Payment of the Exercise Price shall be by any
of the following, or a combination thereof, at the election of Optionee:

 

(a)                                     cash;

 

(b)                                    check;

 

(c)                                     surrender
of other shares of Common Stock of the Company which (i) in the case of Shares
acquired pursuant to the exercise of a Company option, have been owned by
Optionee for more than 6 months on the date of surrender, and (ii) have a
Fair Market Value on the date of surrender equal to the Exercise Price of the
Shares as to which the Option is being exercised; or

 

(d)                                    if
there is a public market for the Shares and they are registered under the
Exchange Act, delivery of a properly executed exercise notice together with
irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds required to pay the Exercise Price.

 

4.                                       Restrictions on Exercise.  This Option may not be exercised until such
time as the Plan has been approved by the stockholders of the Company, or if
the issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule
under Part 207 of Title 12 of the Code of Federal Regulations as
promulgated by the Federal Reserve Board. 
As a condition to the exercise of this Option, the Company may require
Optionee to make any representation and warranty to the Company as may be
required by any applicable law or regulation.

 

5.                                       Termination of Relationship.  In the event of termination of Optionee’s
Continuous Status as an Employee or Consultant, Optionee may, to the extent
otherwise so entitled at the date of

 

 

2

 

such termination (the “Termination Date”), exercise this Option
during the Termination Period set forth in the Notice of Stock Option
Grant.  To the extent that Optionee was
not entitled to exercise this Option at such Termination Date, or if Optionee
does not exercise this Option within the Termination Period, the Option shall
terminate.

 

6.                                        Disability of Optionee.

 

(a)                              Notwithstanding
the provisions of Section 5 above, in the event of termination of
Optionee’s Continuous Status as an Employee or Consultant as a result of his or
her total and permanent disability (as defined in Section 22(e)(3) of the
Code), Optionee may, but only within twelve months from the Termination Date
(but in no event later than the Expiration Date set forth in the Notice of
Stock Option Grant and in Section 9 below), exercise this Option to the
extent he or she was entitled to exercise it at such Termination Date.  To the extent that Optionee was not entitled
to exercise the Option on the Termination Date, or if Optionee does not
exercise such Option to the extent so entitled within the time specified in
this Section 6(a), the Option shall terminate.

 

(b)                             Notwithstanding
the provisions of Section 5 above, in the event of termination of
Optionee’s consulting relationship or Continuous Status as an Employee as a
result of a disability not constituting a total and permanent disability (as
set forth in Section 22(e)(3) of the Code), Optionee may, but only within
six months from the Termination Date (but in no event later than the Expiration
Date set forth in the Notice of Stock Option Grant and in Section 9
below), exercise the Option to the extent Optionee was entitled to exercise it
as of such Termination Date; provided, however, that if this is an Incentive
Stock Option and Optionee fails to exercise this Incentive Stock Option within
three months from the Termination Date, this Option will cease to qualify as an
Incentive Stock Option (as defined in Section 422 of the Code) and
Optionee will be treated for federal income tax purposes as having received
ordinary income at the time of such exercise in an amount generally measured by
the difference between the Exercise Price for the Shares and the Fair Market
Value of the Shares on the date of exercise. 
To the extent that Optionee was not entitled to exercise the Option at
the Termination Date, or if Optionee does not exercise such Option to the
extent so entitled within the time specified in this Section 6(b), the
Option shall terminate.

 

7.                                        Death of Optionee.  In the event of the death of Optionee
(a) during the Term of this Option and while an Employee or Consultant of
the Company and having been in Continuous Status as an Employee or Consultant
since the date of grant of the Option, or (b) within 30 days after
Optionee’s Termination Date, the Option may be exercised at any time within six
months following the date of death (but in no event later than the Expiration
Date set forth in the Notice of Stock Option Grant and in Section 9
below), by Optionee’s estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent of the right to
exercise that had accrued at the Termination Date.

 

8.                                        Non-Transferability of Option.  This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by him or her.  The terms of this Option shall be binding
upon the executors, administrators, heirs, successors and assigns of Optionee.

 

3

 

9.                                        Term of Option.  This Option may be exercised only within the
Term set forth in the Notice of Stock Option Grant, subject to the limitations
set forth in Section 7 of the Plan.

 

10.                                  Tax Consequences.  Set forth below is a brief summary as of the
date of this Option of certain of the federal and California tax consequences
of exercise of this Option and disposition of the Shares under the laws in
effect as of the Date of Grant.  THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE.  OPTIONEE SHOULD CONSULT A TAX
ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

 

(a)                              Exercise of Incentive Stock Option.  If this Option qualifies as an Incentive
Stock Option, there will be no regular federal or California income tax
liability upon the exercise of the Option, although the excess, if any, of the
Fair Market Value of the Shares on the date of exercise over the Exercise Price
will be treated as an adjustment to the alternative minimum tax for federal tax
purposes and may subject Optionee to the alternative minimum tax in the year of
exercise.

 

(b)                             Exercise of Nonstatutory Stock Option.  If this Option does not qualify as an
Incentive Stock Option, there may be a regular federal income tax liability and
a California income tax liability upon the exercise of the Option.  Optionee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess,
if any, of the Fair Market Value of the Shares on the date of exercise over the
Exercise Price.  If Optionee is an
employee, the Company will be required to withhold from Optionee’s compensation
or collect from Optionee and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income at the time of exercise.

 

(c)                              Disposition of Shares.  In the case of a Nonstatutory Stock Option,
if Shares are held for at least one year, any gain realized on disposition of
the Shares will be treated as long-term capital gain for federal and California
income tax purposes.  In the case of an
Incentive Stock Option, if Shares transferred pursuant to the Option are held
for at least one year after exercise and are disposed of at least two years
after the Date of Grant, any gain realized on disposition of the Shares will
also be treated as long-term capital gain for federal and California income tax
purposes.  In either case, the long-term
capital gain will be taxed for federal income tax and alternative minimum tax
purposes at a maximum rate of 28% if the Shares are held more than one year but
less than 18 months after exercise and at 20% if the Shares are held more than
18 months after exercise.  If Shares
purchased under an Incentive Stock Option are disposed of within one year after
exercise or within two years after the Date of Grant, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the difference between the Exercise Price and the
lesser of (i) the Fair Market Value of the Shares on the date of exercise,
or (ii) the sale price of the Shares.

 

(d)                             Notice of Disqualifying Disposition of Incentive
Stock Option Shares.  If
the Option granted to Optionee herein is an Incentive Stock Option, and if
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
the Incentive Stock Option on or before the later of (i) the date two
years after the Date of Grant, or (ii) the date one year after the date of

 

4

 

exercise,
Optionee shall immediately notify the Company in writing of such
disposition.  Optionee acknowledges and
agrees that he or she may be subject to income tax withholding by the Company
on the compensation income recognized by Optionee from the early disposition by
payment in cash or out of the current earnings paid to Optionee.

 

11.                                  Withholding Tax Obligations.  Optionee understands that, upon exercising a
Nonstatutory Stock Option, he or she will recognize income for tax purposes in
an amount equal to the excess of the then Fair Market Value of the Shares over
the Exercise Price.  However, the timing
of this income recognition may be deferred for up to six months if Optionee is
subject to Section 16 of the Exchange Act. 
If Optionee is an employee, the Company will be required to withhold
from Optionee’s compensation, or collect from Optionee and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income.  Additionally, Optionee
may at some point be required to satisfy tax withholding obligations with
respect to the disqualifying disposition of an Incentive Stock Option.  Optionee shall satisfy his or her tax
withholding obligation arising upon the exercise of this Option by one or some
combination of the following methods: 
(a) by cash payment, (b) out of Optionee’s current
compensation, (c) if permitted by the Administrator, in its discretion, by
surrendering to the Company Shares which (i) in the case of Shares
previously acquired from the Company, have been owned by Optionee for more than
six months on the date of surrender, and (ii) have a Fair Market Value on
the date of surrender equal to or greater than Optionee’s marginal tax rate
times the ordinary income recognized, or (d) by electing to have the Company
withhold from the Shares to be issued upon exercise of the Option that number
of Shares having a Fair Market Value equal to the amount required to be
withheld.  For this purpose, the Fair
Market Value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined (the “Tax Date”).

 

If Optionee is subject to
Section 16 of the Exchange Act (an “Insider”), any surrender of
previously owned Shares to satisfy tax withholding obligations arising upon
exercise of this Option must comply with the applicable provisions of Rule
16b-3 promulgated under the Exchange Act (“Rule 16b-3”).

 

All elections by Optionee
to have Shares withheld to satisfy tax withholding obligations shall be made in
writing in a form acceptable to the Administrator and shall be subject to the
following restrictions:

 

(a)                              the
election must be made on or prior to the applicable Tax Date;

 

(b)                             once
made, the election shall be irrevocable as to the particular Shares of the
Option as to which the election is made; and

 

(c)                              all
elections shall be subject to the consent or disapproval of the Administrator.

 

12.                                  Market Standoff Agreement.  In connection with the initial public
offering of the Company’s securities and upon request of the Company or the
underwriters managing such underwritten offering of the Company’s securities,
Optionee agrees not to sell, make any short sale

 

5

 

of, loan, grant any option for the purchase of, or otherwise dispose of
any securities of the Company (other than those included in the registration)
without the prior written consent of the Company or such underwriters, as the
case may be, for such period of time (not to exceed 180 days) from the
effective date of such registration as may be requested by the Company or such
managing underwriters and to execute an agreement reflecting the foregoing as
may be requested by the underwriters at the time of the Company’s initial
public offering.

 

6

 

This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one document.

 

	
   

  	
  SUNESIS PHARMACEUTICALS

  
	
   

  	
  INCORPORATED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name: 

  	
  Daryl B. Winter

  
	
   

  	
   

  	
  (print)

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President/General Counsel

  
					

 

OPTIONEE,
ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE OPTION
HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL OF
THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR
ACQUIRING SHARES HEREUNDER).  OPTIONEE,
FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE
COMPANY’S STOCK OPTION PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL
CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR
CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE’S
RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S EMPLOYMENT OR CONSULTANCY
AT ANY TIME, WITH OR WITHOUT CAUSE.

 

Optionee
acknowledges receipt of a copy of the Plan and represents that he or she is
familiar with the terms and provisions thereof, and hereby accepts this Option
subject to all of the terms and provisions thereof.  Optionee has reviewed the Plan and this
Option in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option and fully understands all provisions of
the Option.  Optionee hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Option.

 

	
  Dated:

  	
   

  	
   

  	
   

  

 

 

7

 

 

EXHIBIT A

SUNESIS PHARMACEUTICALS
INCORPORATED

1998 STOCK PLAN

EARLY EXERCISE
NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

This Agreement (“Agreement”) is made as of             ,
by and between Sunesis Pharmaceuticals Incorporated, a Delaware corporation
(the “Company”), and  (“Purchaser”).  To the extent any capitalized terms used in
this Agreement are not defined, they shall have the meaning ascribed to them in
the 1998 Stock Plan.

1.             Exercise of Option.  Subject to the terms and conditions hereof,
Purchaser hereby elects to exercise his or her option to purchase              
shares of the Common Stock (the “Shares”) of the Company under and
pursuant to the Company’s 1998 Stock Plan (the “Plan”) and the Stock
Option Agreement dated                   
(the “Option Agreement”).  Of
these Shares, Purchaser has elected to purchase                  
of those Shares which have become vested as of the date hereof under the
Vesting Schedule set forth in the Notice of Stock Option Grant (the “Vested
Shares”) and                   
Shares which have not yet vested under such Vesting Schedule (the “Unvested
Shares”).  The purchase price for the
Shares shall be $0.60 per Share for a total purchase price of $                .  The term “Shares” refers to the
purchased Shares and all securities received in replacement of the Shares or as
stock dividends or splits, all securities received in replacement of the Shares
in a recapitalization, merger, reorganization, exchange or the like, and all
new, substituted or additional securities or other properties to which
Purchaser is entitled by reason of Purchaser’s ownership of the Shares.

2.             Time and Place of Exercise.  The purchase and sale of the Shares under
this Agreement shall occur at the principal office of the Company
simultaneously with the execution and delivery of this Agreement in accordance
with the provisions of Section 2(b) of the Option Agreement.  On such date, the Company will deliver to
Purchaser a certificate representing the Shares to be purchased by Purchaser
(which shall be issued in Purchaser’s name) against payment of the purchase
price therefor by Purchaser by (a) check made payable to the Company,
(b) cancellation of indebtedness of the Company to Purchaser,
(c) delivery of shares of the Common Stock of the Company in accordance
with Section 3 of the Option Agreement, or (d) a combination of the
foregoing.

3.             Limitations on Transfer.  In addition to any other limitation on
transfer created by applicable securities laws, Purchaser shall not assign,
encumber or dispose of any interest in the Shares while the Shares are subject
to the Company’s Repurchase Option (as defined below).  After any Shares have been released from such
Repurchase Option, Purchaser shall not assign, encumber or dispose of any interest
in such Shares except in compliance with the provisions below and applicable
securities laws.

 

 

(a)           Repurchase Option.

(i)    In the event of the voluntary or involuntary
termination of Purchaser’s employment or consulting relationship with the
Company for any reason (including death or disability), with or without cause,
the Company shall upon the date of such termination (the “Termination Date”)
have an irrevocable, exclusive option (the “Repurchase Option”) to
repurchase all or any portion of the Unvested Shares held by Purchaser as of
the Termination Date which have not yet been released from the Company’s
Repurchase Option at the original purchase price per Share specified in
Section 1 (adjusted for any stock splits, stock dividends and the like).

(ii)   The Repurchase Option shall be exercised by
the Company by written notice to Purchaser or Purchaser’s executor and, at the
Company’s option, (A) by delivery to Purchaser or Purchaser’s executor
with such notice of a check in the amount of the purchase price for the Shares
being purchased, or (B) in the event Purchaser is indebted to the Company,
by cancellation by the Company of an amount of such indebtedness equal to the
purchase price for the Shares being repurchased, or (C) by a combination
of (A) and (B) so that the combined payment and cancellation of indebtedness
equals such purchase price.  Upon
delivery of such notice and payment of the purchase price in any of the ways
described above, the Company shall become the legal and beneficial owner of the
Shares being repurchased and all rights and interest therein or related
thereto, and the Company shall have the right to transfer to its own name the
number of Shares being repurchased by the Company, without further action by
Purchaser.

(iii)  One hundred percent (100%) of the Unvested
Shares shall initially be subject to the Repurchase Option.  The Unvested Shares shall be released from
the Repurchase Option in accordance with the Vesting Schedule set forth in the Notice
of Stock Option Grant until all Shares are released from the Repurchase
Option.  Fractional shares shall be
rounded to the nearest whole share.

(b)           Right of First Refusal.  Before any Shares held by Purchaser or any
transferee of Purchaser (either being sometimes referred to herein as the “Holder”)
may be sold or otherwise transferred (including transfer by gift or operation
of law), the Company or its assignee(s) shall have a right of first refusal to
purchase the Shares on the terms and conditions set forth in this
Section 3(b) (the “Right of First Refusal”).

(i)    Notice of Proposed
Transfer.  The Holder of
the Shares shall deliver to the Company a written notice (the “Notice”)
stating:  (i) the Holder’s bona fide
intention to sell or otherwise transfer such Shares; (ii) the name of each
proposed purchaser or other transferee (“Proposed Transferee”);
(iii) the number of Shares to be transferred to each Proposed Transferee;
and (iv) the terms and conditions of each proposed sale or transfer.  The Holder shall offer the Shares at the same
price (the “Offered Price”) and upon the same terms (or terms as similar
as reasonably possible) to the Company or its assignee(s).

(ii)   Exercise of Right of First
Refusal.  At any time
within 30 days after receipt of the Notice, the Company and/or its assignee(s)
may, by giving written notice to the Holder, elect to purchase all, but not
less than all, of the Shares proposed to be transferred to any one 

 

2

 

or more of the Proposed Transferees, at the purchase
price determined in accordance with subsection (iii) below.

(iii)  Purchase Price.  The purchase price (“Purchase Price”)
for the Shares purchased by the Company or its assignee(s) under this
Section 3(b) shall be the Offered Price. 
If the Offered Price includes consideration other than cash, the cash
equivalent value of the non-cash consideration shall be determined by the Board
of Directors of the Company in good faith.

(iv)  Payment.  Payment of the Purchase Price shall be made,
at the option of the Company or its assignee(s), in cash (by check), by
cancellation of all or a portion of any outstanding indebtedness of the Holder
to the Company (or, in the case of repurchase by an assignee, to the assignee),
or by any combination thereof within 30 days after receipt of the Notice or in
the manner and at the times set forth in the Notice.

(v)   Holder’s Right to Transfer.  If all of the Shares proposed in the Notice
to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee(s) as provided in this Section 3(b), then the
Holder may sell or otherwise transfer such Shares to that Proposed Transferee
at the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within 60 days after the date of the Notice and
provided further that any such sale or other transfer is effected in accordance
with any applicable securities laws and the Proposed Transferee agrees in
writing that the provisions of this Section 3 shall continue to apply to the Shares
in the hands of such Proposed Transferee. 
If the Shares described in the Notice are not transferred to the
Proposed Transferee within such period, or if the Holder proposes to change the
price or other terms to make them more favorable to the Proposed Transferee, a
new Notice shall be given to the Company, and the Company and/or its assignees
shall again be offered the Right of First Refusal before any Shares held by the
Holder may be sold or otherwise transferred.

(vi)  Exception for Certain
Family Transfers. 
Anything to the contrary contained in this Section 3(b)
notwithstanding, the transfer of any or all of the Shares during Purchaser’s
lifetime or on Purchaser’s death by will or intestacy to Purchaser’s Immediate
Family (as defined below) or a trust for the benefit of Purchaser’s Immediate
Family shall be exempt from the provisions of this Section 3(b).  “Immediate Family” as used herein
shall mean spouse, lineal descendant or antecedent, father, mother, brother or
sister.  In such case, the transferee or
other recipient shall receive and hold the Shares so transferred subject to the
provisions of this Section, and there shall be no further transfer of such
Shares except in accordance with the terms of this Section 3.

(c)           Involuntary Transfer.

(i)    Company’s Right to
Purchase upon Involuntary Transfer.  In the event, at any time after the date of
this Agreement, of any transfer by operation of law or other involuntary
transfer (including divorce or death, but excluding, in the event of death, a
transfer to Immediate Family as set forth in Section 3(b)(vi) above) of all or
a portion of the Shares by the record holder thereof, the Company shall have
the right to purchase all of the Shares transferred at the greater of the
purchase price paid by Purchaser pursuant to this Agreement or the Fair Market 

 

3

 

Value of the Shares on the date of transfer.  Upon such a transfer, the person acquiring
the Shares shall promptly notify the Secretary of the Company of such
transfer.  The right to purchase such
Shares shall be provided to the Company for a period of 30 days following
receipt by the Company of written notice by the person acquiring the Shares.

(ii)   Price for Involuntary
Transfer.  With respect to
any stock to be transferred pursuant to Section 3(c)(i), the price per Share
shall be a price set by the Board of Directors of the Company that will reflect
the current value of the stock in terms of present earnings and future
prospects of the Company.  The Company shall
notify Purchaser or his or her executor of the price so determined within 30
days after receipt by it of written notice of the transfer or proposed transfer
of Shares.  However, if the Purchaser
does not agree with the valuation as determined by the Board of Directors of
the Company, the Purchaser shall be entitled to have the valuation determined
by an independent appraiser to be mutually agreed upon by the Company and the
Purchaser and whose fees shall be borne equally by the Company and the Purchaser.

(d)           Assignment.  The right of the Company to purchase any part
of the Shares may be assigned in whole or in part to any stockholder or
stockholders of the Company or other persons or organizations; provided,
however, that an assignee, other than a corporation that is the Parent or a
100% owned Subsidiary of the Company, must pay the Company, upon assignment of
such right, cash equal to the difference between the original purchase price
and Fair Market Value, if the original purchase price is less than the Fair
Market Value of the Shares subject to the assignment.

(e)           Restrictions Binding on
Transferees.  All
transferees of Shares or any interest therein will receive and hold such Shares
or interest subject to the provisions of this Agreement, including, insofar as
applicable, the Repurchase Option.  Any
sale or transfer of the Shares shall be void unless the provisions of this
Agreement are satisfied.

(f)            Termination of Rights.  The Right of First Refusal and the Company’s
right to repurchase the Shares in the event of an involuntary transfer pursuant
to Section 3(c) above shall terminate upon the first sale of Common Stock of
the Company to the general public pursuant to a registration statement filed
with and declared effective by the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the “Securities Act”).

(g)           Market Standoff Agreement.  In connection with the initial public
offering of the Company’s securities and upon request of the Company or the
underwriters managing such underwritten offering of the Company’s securities,
Purchaser agrees not to sell, make any short sale of, loan, grant any option
for the purchase of, or otherwise dispose of any securities of the Company
(other than those included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such
period of time (not to exceed 180 days) from the effective date of such
registration as may be requested by the Company or such managing underwriters
and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the Company’s initial public offering.

4.             Escrow of Unvested Shares.  For purposes of facilitating the enforcement
of the provisions of Section 3 above, Purchaser agrees, immediately upon
receipt of the certificate(s) for 

 

4

 

the Shares subject to the Repurchase Option, to
deliver such certificate(s), together with an Assignment Separate from
Certificate in the form attached to this Agreement as Attachment A
executed by Purchaser and by Purchaser’s spouse (if required for transfer), in
blank, to the Secretary of the Company, or the Secretary’s designee, to hold
such certificate(s) and Assignment Separate from Certificate in escrow and to
take all such actions and to effectuate all such transfers and/or releases as
are in accordance with the terms of this Agreement.  Purchaser hereby acknowledges that the
Secretary of the Company, or the Secretary’s designee, is so appointed as the
escrow holder with the foregoing authorities as a material inducement to make
this Agreement and that said appointment is coupled with an interest and is
accordingly irrevocable.  Purchaser
agrees that said escrow holder shall not be liable to any party hereof (or to
any other party).  The escrow holder may
rely upon any letter, notice or other document executed by any signature
purported to be genuine and may resign at any time.  Purchaser agrees that if the Secretary of the
Company, or the Secretary’s designee, resigns as escrow holder for any or no
reason, the Board of Directors of the Company shall have the power to appoint a
successor to serve as escrow holder pursuant to the terms of this Agreement.

5.             Investment and Taxation
Representations.  In
connection with the purchase of the Shares, Purchaser represents to the Company
the following:

(a)           Purchaser is aware of the Company’s
business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision
to acquire the Shares.  Purchaser is
purchasing the Shares for investment for his or her own account only and not
with a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act.

(b)           Purchaser understands that the Shares
have not been registered under the Securities Act by reason of a specific
exemption therefrom, which exemption depends upon, among other things, the bona
fide nature of Purchaser’s investment intent as expressed herein.

(c)           Purchaser understands that the Shares
are “restricted securities” under applicable U.S. federal and state securities
laws and that, pursuant to these laws, Purchaser must hold the Shares
indefinitely unless they are registered with the Securities and Exchange
Commission and qualified by state authorities, or an exemption from such
registration and qualification requirements is available.  Purchaser acknowledges that the Company has
no obligation to register or qualify the Shares for resale.  Purchaser further acknowledges that if an
exemption from registration or qualification is available, it may be
conditioned on various requirements including, but not limited to, the time and
manner of sale, the holding period for the Shares, and requirements relating to
the Company which are outside of the Purchaser’s control, and which the Company
is under no obligation and may not be able to satisfy.

(d)           Purchaser understands that Purchaser
may suffer adverse tax consequences as a result of Purchaser’s purchase or
disposition of the Shares.  Purchaser
represents that Purchaser has consulted any tax consultants Purchaser deems
advisable in connection with the purchase or disposition of the Shares and that
Purchaser is not relying on the Company for any tax advice.

 

5

 

 

6.             Restrictive
Legends and Stop-Transfer Orders.

(a)           Legends.  The certificate or certificates representing
the Shares shall bear the following legends (as well as any legends required by
applicable state and federal corporate and securities laws):

(i)    THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF.  NO SUCH SALE OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

(ii)   THE SHARES REPRESENTED BY THIS CERTIFICATE
MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN
THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY
OF THE COMPANY.

(b)           Stop-Transfer Notices.  Purchaser agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate “stop transfer” instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

(c)           Refusal to Transfer.  The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Agreement or (ii) to treat
as owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.

(d)           Removal of Legend.  When all of the following events have
occurred, the Shares then held by Purchaser will no longer be subject to the
legend referred to in Section 6(a)(ii): (i) the termination of the Right
of First Refusal; (ii) the expiration or termination of the market
standoff provisions of Section 3(g) (and of any agreement entered pursuant
to Section 3(g)); and (iii) the expiration or exercise in full of the
Repurchase Option.  After such time, and
upon Purchaser’s request, a new certificate or certificates representing the
Shares not repurchased shall be issued without the legend referred to in
Section 6(a)(ii), and delivered to Purchaser.

7.             No Employment Rights.  Nothing in this Agreement shall affect in any
manner whatsoever the right or power of the Company, or a Parent or Subsidiary
of the Company, to terminate Purchaser’s employment or consulting relationship,
for any reason, with or without cause.

8.             Section 83(b) Election.  Purchaser understands that Section 83(a)
of the Internal Revenue Code of 1986, as amended (the “Code”), taxes as
ordinary income for a Nonstatutory Stock Option and as alternative minimum
taxable income for an Incentive Stock Option the difference between the amount
paid for the Shares and the Fair Market Value of the Shares as of the date any 

 

6

 

restrictions on the Shares lapse.  In this context, “restriction” means
the right of the Company to buy back the Shares pursuant to the Repurchase
Option set forth in Section 3(a) of this Agreement.  Purchaser understands that Purchaser may
elect to be taxed at the time the Shares are purchased, rather than when and as
the Repurchase Option expires, by filing an election under Section 83(b) (an “83(b)
Election”) of the Code with the Internal Revenue Service within 30 days
from the date of purchase.  Even if the
Fair Market Value of the Shares at the time of the execution of this Agreement
equals the amount paid for the Shares, the election must be made to avoid
income and alternative minimum tax treatment under Section 83(a) in the future.
 Purchaser understands that failure to
file such an election in a timely manner may result in adverse tax consequences
for Purchaser.  Purchaser further
understands that an additional copy of such election form should be filed with
his or her federal income tax return for the calendar year in which the date of
this Agreement falls.  Purchaser
acknowledges that the foregoing is only a summary of the effect of United
States federal income taxation with respect to purchase of the Shares
hereunder, and does not purport to be complete. 
Purchaser further acknowledges that the Company has directed Purchaser
to seek independent advice regarding the applicable provisions of the Code, the
income tax laws of any municipality, state or foreign country in which Purchaser
may reside, and the tax consequences of Purchaser’s death.

Purchaser agrees that he or she will execute and deliver to the Company
with this executed Agreement a copy of the Acknowledgment and Statement of
Decision Regarding Section 83(b) Election (the “Acknowledgment”)
attached hereto as Attachment B. 
Purchaser further agrees that he or she will execute and submit with the
Acknowledgment a copy of the 83(b) Election attached hereto as Attachment C
(for income tax purposes in connection with the early exercise of a
Nonstatutory Stock Option) or Attachment D (for alternative minimum
tax purposes in connection with the early exercise of an incentive stock
option) if Purchaser has indicated in the Acknowledgment his or her decision to
make such an election.

9.             Miscellaneous.

(a)           Governing Law.  This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.

(b)           Entire Agreement;
Enforcement of Rights. 
This Agreement sets forth the entire agreement and understanding of the
parties relating to the subject matter herein and merges all prior discussions
between them.  No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
shall be effective unless in writing signed by the parties to this Agreement.  The failure by either party to enforce any
rights under this Agreement shall not be construed as a waiver of any rights of
such party.

(c)           Severability.  If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. 
In the event that the parties cannot reach a mutually agreeable and
enforceable replacement for such provision, then (i) such provision shall
be excluded from this Agreement, (ii) the balance of the 

 

7

 

Agreement shall be interpreted as if such provision
were so excluded and (iii) the balance of the Agreement shall be
enforceable in accordance with its terms.

(d)           Construction.  This Agreement is the result of negotiations
between and has been reviewed by each of the parties hereto and their
respective counsel, if any; accordingly, this Agreement shall be deemed to be
the product of all of the parties hereto, and no ambiguity shall be construed
in favor of or against any one of the parties hereto.

(e)           Notices.  Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient when delivered
personally or sent by telegram or fax or 48 hours after being deposited in the
U.S. mail, as certified or registered mail, with postage prepaid, and addressed
to the party to be notified at such party’s address as set forth below or as
subsequently modified by written notice.

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

(g)           Successors and Assigns.  The rights and benefits of this Agreement
shall inure to the benefit of, and be enforceable by the Company’s successors
and assigns.  The rights and obligations
of Purchaser under this Agreement may only be assigned with the prior written
consent of the Company.

(h)           California Corporate Securities Law.  THE SALE OF THE SECURITIES WHICH  ARE THE SUBJECT OF THIS AGREEMENT HAS NOT
BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA
AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF
THE CALIFORNIA CORPORATIONS CODE.  THE
RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE
QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

 

8

 

The parties have executed this Agreement as of the date first set forth
above.

 

	
   

  	
  COMPANY:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SUNESIS
  PHARMACEUTICALS
 INCORPORATED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  (print)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  341
  Oyster Point Blvd.

  
	
   

  	
  So.
  San Francisco, CA 94080

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PURCHASER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  
	
   

  	
  (Print
  Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
					

 

 

I,                                                        
spouse of , have read and hereby approve the foregoing Agreement.  In consideration of the Company’s granting my
spouse the right to purchase the Shares as set forth in the Agreement, I hereby
agree to be bound irrevocably by the Agreement and further agree that any
community property or similar interest that I may have in the Shares shall
hereby be similarly bound by the Agreement. 
I hereby appoint my spouse as my attorney-in-fact with respect to any
amendment or exercise of any rights under the Agreement.

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Spouse
  of

  

 

9

 

 

ATTACHMENT A

ASSIGNMENT
SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED and pursuant to that certain Early Exercise Notice
and Restricted Stock Purchase Agreement between the undersigned (“Purchaser”)
and Sunesis Pharmaceuticals Incorporated (the “Company”) dated           ,
      (the “Agreement”), Purchaser hereby
sells, assigns and transfers unto                                
(       ) shares of the Common Stock of the
Company, standing in Purchaser’s name on the books of the Company and
represented by Certificate No.    , and hereby irrevocably
appoints                           
to transfer said stock on the books of the Company with full power of
substitution in the premises.  THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE ATTACHMENTS
THERETO.

 

	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Spouse of (if
  applicable)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Instruction: 
Please do not fill in any blanks other than the signature line.  The purpose of this assignment is to enable
the Company to exercise its Repurchase Option set forth in the Agreement
without requiring additional signatures on the part of Purchaser.

 

ATTACHMENT B

ACKNOWLEDGMENT AND
STATEMENT OF DECISION

REGARDING
SECTION 83(b) ELECTION

The undersigned (which term includes the undersigned’s spouse), a
purchaser of           
shares of Common Stock of Sunesis Pharmaceuticals Incorporated, a Delaware
corporation (the “Company”) by exercise of an option (the “Option”)
granted pursuant to the Company’s 1998 Stock Plan (the “Plan”), hereby
states as follows:

1.             The undersigned acknowledges receipt of a copy of the
Plan relating to the offering of such shares. 
The undersigned has carefully reviewed the Plan and the option agreement
pursuant to which the Option was granted.

2.             The undersigned either [check and complete as
applicable]:

(a)                                        has
consulted, and has been fully advised by, the undersigned’s own tax advisor,                        ,
whose business address is                                       ,
regarding the federal, state and local tax consequences of purchasing shares
under the Plan, and particularly regarding the advisability of making elections
pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended
(the “Code”) and pursuant to the corresponding provisions, if any, of
applicable state law; or

(b)                                       has
knowingly chosen not to consult such a tax advisor.

3.             The undersigned hereby states that the undersigned has
decided [check as applicable]:

(a)                                        to make an
election pursuant to Section 83(b) of the Code, and is submitting to  the Company, together with the undersigned’s
executed Early Exercise Notice and Restricted Stock Purchase Agreement, an
executed form entitled “Election Under Section 83(b) of the Internal Revenue Code
of 1986;”

(b)                                       to make an
election pursuant to Section 83(b) of the Code, and is submitting to the
Company, together with the undersigned’s executed Early Exercise Notice and
Restricted Stock Purchase Agreement, an executed form entitled “Election Under
Section 83(b) of the Internal Revenue Code of 1986 for purposes of the
Alternative Minimum Tax”; or

(c)                                        not to
make an election pursuant to Section 83(b) of the Code.

4.             Neither the Company nor any subsidiary or representative
of the Company has made any warranty or representation to the undersigned with
respect to the tax consequences of the undersigned’s purchase of shares under
the Plan or of the making or failure to make an election 

 

 

 

pursuant to Section 83(b) of the Code or the
corresponding provisions, if any, of applicable state law.

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Spouse of

  

 

2

 

ATTACHMENT C

ELECTION UNDER
SECTION 83(b)

OF THE INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to
Section 83(b) of the Internal Revenue Code, to include in taxpayer’s gross
income for the current taxable year, the amount of any compensation taxable to
taxpayer in connection with taxpayer’s receipt of the property described below:

1.                                       The name, address, taxpayer identification
number and taxable year of the undersigned are as follows:

 

	
  NAME OF TAXPAYER:

  	
   

  
	
   

  	
   

  
	
  NAME OF SPOUSE:

  	
   

  
	
   

  	
   

  
	
  ADDRESS:

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  
	
  IDENTIFICATION NO. OF
  TAXPAYER:

  	
   

  
	
   

  	
   

  
	
  IDENTIFICATION NO. OF
  SPOUSE:

  	
   

  
	
   

  	
   

  
	
  TAXABLE YEAR:

  	
   

  
								

 

2.                                     The property with respect to which the
election is made is described as follows:

                  
shares of the Common Stock of Sunesis Pharmaceuticals Incorporated, a Delaware
corporation (the “Company”).

3.                                       The date on which the property was
transferred is:                     

4.                                       The property is subject to the following
restrictions:

Repurchase option at cost
in favor of the Company upon termination of taxpayer’s employment or consulting
relationship.

5.                                       The Fair Market Value at the time of
transfer, determined without regard to any restriction other than a restriction
which by its terms will never lapse, of such property is:  $                      

6.                                       The amount (if any) paid for such
property:  $                   

The undersigned has
submitted a copy of this statement to the person for whom the services were
performed in connection with the undersigned’s receipt of the above-described
property.  The transferee of such
property is the person performing the services in connection with the transfer
of said property.

The undersigned understands
that the foregoing election may not be revoked except with the consent of the
Commissioner.

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Spouse of

  

 

ATTACHMENT D

ELECTION UNDER
SECTION 83(b)

OF THE INTERNAL REVENUE CODE OF 1986

FOR PURPOSES OF THE ALTERNATIVE MINIMUM TAX

The undersigned taxpayer hereby elects, pursuant to the
above-referenced Internal Revenue Code Section, to include in his or her
alternative minimum taxable income for the current taxable year, as
compensation for services, the excess, if any, of the Fair Market Value of the
property described below:

1.                                       The name, address, taxpayer
identification number and taxable year of the undersigned are as follows:

 

	
  NAME OF TAXPAYER:

  	
   

  
	
   

  	
   

  
	
  NAME OF SPOUSE:

  	
   

  
	
   

  	
   

  
	
  ADDRESS:

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  
	
  IDENTIFICATION NO. OF
  TAXPAYER:

  	
   

  
	
   

  	
   

  
	
  IDENTIFICATION NO. OF
  SPOUSE:

  	
   

  
	
   

  	
   

  
	
  TAXABLE YEAR:

  	
   

  
								

 

2.                                     The property with respect to which the
election is made is described as follows:

                  
shares of the Common Stock of Sunesis Pharmaceuticals Incorporated, a Delaware
corporation (the “Company”).

3.                                       The date on which the property was
transferred is:                     

4.                                       The property is subject to the following
restrictions:

Repurchase option at cost
in favor of the Company upon termination of taxpayer’s employment or consulting
relationship.

5.                                       The Fair Market Value at the time of
transfer, determined without regard to any restriction other than a restriction
which by its terms will never lapse, of such property is:  $                      .

6.                                       The amount (if any) paid for such property:  $                   

The undersigned has
submitted a copy of this statement to the person for whom the services were
performed in connection with the undersigned’s receipt of the above-described
property.  The transferee of such
property is the person performing the services in connection with the transfer
of said property.

The undersigned
understands that the foregoing election may not be revoked except with the
consent of the Commissioner.

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Spouse of

  

 

 

 

EXHIBIT B

SUNESIS PHARMACEUTICALS
INCORPORATED

1998 STOCK PLAN

EXERCISE NOTICE AND
RESTRICTED STOCK PURCHASE AGREEMENT

This Agreement (“Agreement”) is made as of                         ,
by and between Sunesis Pharmaceuticals Incorporated, a Delaware corporation
(the “Company”), and  (“Purchaser”).  To the extent any capitalized terms used in
this Agreement are not defined, they shall have the meaning ascribed to them in
the 1998 Stock Plan.

1.             Exercise of Option.  Subject to the terms and conditions hereof,
Purchaser hereby elects to exercise his or her option to purchase           
shares of the Common Stock (the “Shares”) of the Company under and
pursuant to the Company’s 1998 Stock Plan (the “Plan”) and the Stock
Option Agreement dated            ,
(the “Option Agreement”).  The
purchase price for the Shares shall be $0.60 per Share for a total purchase
price of $             .
The term “Shares” refers to the purchased Shares and all securities
received in replacement of the Shares or as stock dividends or splits, all
securities received in replacement of the Shares in a recapitalization, merger,
reorganization, exchange or the like, and all new, substituted or additional
securities or other properties to which Purchaser is entitled by reason of
Purchaser’s ownership of the Shares.

2.             Time and Place of Exercise.  The purchase and sale of the Shares under
this Agreement shall occur at the principal office of the Company
simultaneously with the execution and delivery of this Agreement in accordance
with the provisions of Section 2(b) of the Option Agreement.  On such date, the Company will deliver to
Purchaser a certificate representing the Shares to be purchased by Purchaser
(which shall be issued in Purchaser’s name) against payment of the purchase
price therefor by Purchaser by (a) check made payable to the Company,
(b) cancellation of indebtedness of the Company to Purchaser,
(c) delivery of shares of the Common Stock of the Company in accordance
with Section 3 of the Option Agreement, or (d) a combination of the
foregoing.

3.             Limitations on Transfer.  In addition to any other limitation on
transfer created by applicable securities laws, Purchaser shall not assign,
encumber or dispose of any interest in the Shares except in compliance with the
provisions below and applicable securities laws.

                (a)           Right of First Refusal.
Before any Shares held by Purchaser or any transferee of Purchaser (either
being sometimes referred to herein as the “Holder”) may be sold or
otherwise transferred (including transfer by gift or operation of law), the
Company or its assignee(s) shall have a right of first refusal to purchase the
Shares on the terms and conditions set forth in this Section 3(a) (the “Right
of First Refusal”).

 

 

                                (i)            Notice of Proposed
Transfer.  The Holder of
the Shares shall deliver to the Company a written notice (the “Notice”)
stating:  (i) the Holder’s bona fide
intention to sell or otherwise transfer such Shares; (ii) the name of each
proposed purchaser or other transferee (“Proposed Transferee”);
(iii) the number of Shares to be transferred to each Proposed Transferee;
and (iv) the terms and conditions of each proposed sale or transfer.  The Holder shall offer the Shares at the same
price (the “Offered Price”) and upon the same terms (or terms as similar
as reasonably possible) to the Company or its assignee(s).

                                (ii)           Exercise of Right of First
Refusal.  At any time
within 30 days after receipt of the Notice, the Company and/or its assignee(s)
may, by giving written notice to the Holder, elect to purchase all, but not
less than all, of the Shares proposed to be transferred to any one or more of
the Proposed Transferees, at the purchase price determined in accordance with
subsection (iii) below.

                                (iii)          Purchase Price.  The purchase price (“Purchase Price”)
for the Shares purchased by the Company or its assignee(s) under this Section
3(a) shall be the Offered Price.  If the
Offered Price includes consideration other than cash, the cash equivalent value
of the non-cash consideration shall be determined by the Board of Directors of
the Company in good faith.

                                (iv)          Payment.  Payment of the Purchase Price shall be made,
at the option of the Company or its assignee(s), in cash (by check), by
cancellation of all or a portion of any outstanding indebtedness of the Holder
to the Company (or, in the case of repurchase by an assignee, to the assignee),
or by any combination thereof within 30 days after receipt of the Notice or in
the manner and at the times set forth in the Notice.

                                (v)           Holder’s Right to Transfer.  If all of the Shares proposed in the Notice
to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee(s) as provided in this Section 3(a), then the
Holder may sell or otherwise transfer such Shares to that Proposed Transferee at
the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within 60 days after the date of the Notice and
provided further that any such sale or other transfer is effected in accordance
with any applicable securities laws and the Proposed Transferee agrees in
writing that the provisions of this Section 3 shall continue to apply to
the Shares in the hands of such Proposed Transferee.  If the Shares described in the Notice are not
transferred to the Proposed Transferee within such period, or if the Holder
proposes to change the price or other terms to make them more favorable to the
Proposed Transferee, a new Notice shall be given to the Company, and the
Company and/or its assignees shall again be offered the Right of First Refusal
before any Shares held by the Holder may be sold or otherwise transferred.

                                (vi)          Exception for Certain
Family Transfers. 
Anything to the contrary contained in this Section 3(a) notwithstanding,
the transfer of any or all of the Shares during Purchaser’s lifetime or on
Purchaser’s death by will or intestacy to Purchaser’s Immediate Family (as
defined below) or a trust for the benefit of Purchaser’s Immediate Family shall
be exempt from the provisions of this Section 3(a).  “Immediate Family” as used herein
shall mean spouse, lineal descendant or antecedent, father, mother, brother or
sister.  In such case, the transferee or
other recipient shall receive and hold the Shares so transferred subject to the
provisions of this Section, 

 

2

 

and there shall be no further transfer of such Shares
except in accordance with the terms of this Section 3.

                (b)           Involuntary Transfer.

                                (i)            Company’s Right to
Purchase upon Involuntary Transfer.  In the event, at any time after the date of
this Agreement, of any transfer by operation of law or other involuntary
transfer (including divorce or death, but excluding, in the event of death, a
transfer to Immediate Family as set forth in Section 3(a)(vi) above) of all or
a portion of the Shares by the record holder thereof, the Company shall have
the right to purchase all of the Shares transferred at the greater of the
purchase price paid by Purchaser pursuant to this Agreement or the Fair Market
Value of the Shares on the date of transfer. 
Upon such a transfer, the person acquiring the Shares shall promptly
notify the Secretary of the Company of such transfer.  The right to purchase such Shares shall be
provided to the Company for a period of 30 days following receipt by the
Company of written notice by the person acquiring the Shares.

                                (ii)           Price for Involuntary
Transfer.  With respect to
any stock to be transferred pursuant to Section 3(b)(i), the price per Share
shall be a price set by the Board of Directors of the Company that will reflect
the current value of the stock in terms of present earnings and future
prospects of the Company.  The Company
shall notify Purchaser or his or her executor of the price so determined within
30 days after receipt by it of written notice of the transfer or proposed
transfer of Shares.  However, if the
Purchaser does not agree with the valuation as determined by the Board of
Directors of the Company, the Purchaser shall be entitled to have the valuation
determined by an independent appraiser to be mutually agreed upon by the
Company and the Purchaser and whose fees shall be borne equally by the Company
and the Purchaser.

                (c)           Assignment.  The right of the Company to purchase any part
of the Shares may be assigned in whole or in part to any stockholder or
stockholders of the Company or other persons or organizations; provided,
however, that an assignee, other than a corporation that is the Parent or a
100% owned Subsidiary of the Company, must pay the Company, upon assignment of
such right, cash equal to the difference between the original purchase price
and Fair Market Value, if the original purchase price is less than the Fair
Market Value of the Shares subject to the assignment.

                (d)           Restrictions Binding on
Transferees.  All
transferees of Shares or any interest therein will receive and hold such Shares
or interest subject to the provisions of this Agreement.  Any sale or transfer of the Shares shall be
void unless the provisions of this Agreement are satisfied.

                (e)           Termination of Rights.  The Right of First Refusal and the Company’s
right to repurchase the Shares in the event of an involuntary transfer pursuant
to Section 3(b) above shall terminate upon the first sale of Common Stock of
the Company to the general public pursuant to a registration statement filed
with and declared effective by the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the “Securities Act”).

 

3

 

                (f)            Market Standoff Agreement.  In connection with the initial public
offering of the Company’s securities and upon request of the Company or the
underwriters managing such underwritten offering of the Company’s securities,
Purchaser agrees not to sell, make any short sale of, loan, grant any option
for the purchase of, or otherwise dispose of any securities of the Company
(other than those included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such
period of time (not to exceed 180 days) from the effective date of such
registration as may be requested by the Company or such managing underwriters
and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the Company’s initial public offering.

4.             Investment and Taxation Representations.  In connection with the purchase of the
Shares, Purchaser represents to the Company the following:

                (a)           Purchaser is aware of the Company’s
business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision
to acquire the Shares.  Purchaser is
purchasing the Shares for investment for his or her own account only and not
with a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act.

                (b)           Purchaser understands that the Shares
have not been registered under the Securities Act by reason of a specific
exemption therefrom, which exemption depends upon, among other things, the bona
fide nature of Purchaser’s investment intent as expressed herein.

                (c)           Purchaser understands that the Shares
are “restricted securities” under applicable U.S. federal and state securities
laws and that, pursuant to these laws, Purchaser must hold the Shares
indefinitely unless they are registered with the Securities and Exchange
Commission and qualified by state authorities, or an exemption from such
registration and qualification requirements is available.  Purchaser acknowledges that the Company has
no obligation to register or qualify the Shares for resale.  Purchaser further acknowledges that if an
exemption from registration or qualification is available, it may be
conditioned on various requirements including, but not limited to, the time and
manner of sale, the holding period for the Shares, and requirements relating to
the Company which are outside of the Purchaser’s control, and which the Company
is under no obligation and may not be able to satisfy.

                (d)           Purchaser understands that Purchaser
may suffer adverse tax consequences as a result of Purchaser’s purchase or
disposition of the Shares.  Purchaser
represents that Purchaser has consulted any tax consultants Purchaser deems
advisable in connection with the purchase or disposition of the Shares and that
Purchaser is not relying on the Company for any tax advice.

5.             Restrictive Legends and Stop-Transfer Orders.

                (a)           Legends.  The certificate or certificates representing
the Shares shall bear the following legends (as well as any legends required by
applicable state and federal corporate and securities laws):

 

4

 

(i)                                     THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE
BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
SALE OR DISTRIBUTION THEREOF.  NO SUCH
SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933.

(ii)                            THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN
AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY.

                (b)           Stop-Transfer Notices.  Purchaser agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate “stop transfer” instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

                (c)           Refusal to Transfer.  The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Agreement or (ii) to treat
as owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so transferred.

                (d)           Removal of Legend.  When all of the following events have
occurred, the Shares then held by Purchaser will no longer be subject to the
legend referred to in Section 5(a)(ii): (i) the termination of the Right
of First Refusal; and (ii) the expiration or termination of the market
standoff provisions of Section 3(f) (and of any agreement entered pursuant to
Section 3(f)).  After such time, and upon
Purchaser’s request, a new certificate or certificates representing the Shares
not repurchased shall be issued without the legend referred to in Section
5(a)(ii), and delivered to Purchaser.

6.             No Employment Rights.  Nothing in this Agreement shall affect in any
manner whatsoever the right or power of the Company, or a Parent or Subsidiary
of the Company, to terminate Purchaser’s employment or consulting relationship,
for any reason, with or without cause.

7.             Miscellaneous.

                (a)           Governing Law.  This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.

 

5

 

                (b)           Entire Agreement;
Enforcement of Rights. 
This Agreement sets forth the entire agreement and understanding of the
parties relating to the subject matter herein and merges all prior discussions
between them.  No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
shall be effective unless in writing signed by the parties to this
Agreement.  The failure by either party
to enforce any rights under this Agreement shall not be construed as a waiver
of any rights of such party.

                (c)           Severability.  If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. 
In the event that the parties cannot reach a mutually agreeable and
enforceable replacement for such provision, then (i) such provision shall be
excluded from this Agreement, (ii) the balance of the Agreement shall be
interpreted as if such provision were so excluded and (iii) the balance of the
Agreement shall be enforceable in accordance with its terms.

                (d)           Construction.  This Agreement is the result of negotiations
between and has been reviewed by each of the parties hereto and their
respective counsel, if any; accordingly, this Agreement shall be deemed to be
the product of all of the parties hereto, and no ambiguity shall be construed
in favor of or against any one of the parties hereto.

                (e)           Notices.  Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient when delivered
personally or sent by telegram or fax or forty-eight (48) hours after being
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed to the party to be notified at such party’s address as
set forth below or as subsequently modified by written notice.

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

                (g)           Successors and Assigns.  The rights and benefits of this Agreement
shall inure to the benefit of, and be enforceable by the Company’s successors
and assigns.  The rights and obligations
of Purchaser under this Agreement may only be assigned with the prior written
consent of the Company.

                (h)           California Corporate
Securities Law.  THE SALE OF
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED
WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE
ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF
THE CALIFORNIA CORPORATIONS CODE.  THE
RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE
QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

 

6

The parties have executed this Agreement as of the date first set forth
above.

 

	
   

  	
  COMPANY:

  	
   

  
	
   

  	
   

  
	
   

  	
  SUNESIS PHARMACEUTICALS

  INCORPORATED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  (print)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  341
  Oyster Point Blvd.

  
	
   

  	
  So.
  San Francisco, CA 94080

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PURCHASER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  
	
   

  	
  (Print
  Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

I,                   
spouse of , have read and hereby approve the foregoing Agreement.  In consideration of the Company’s granting my
spouse the right to purchase the Shares as set forth in the Agreement, I hereby
agree to be bound irrevocably by the Agreement and further agree that any
community property or similar interest that I may have in the Shares shall
hereby be similarly bound by the Agreement. 
I hereby appoint my spouse as my attorney-in-fact with respect to any
amendment or exercise of any rights under the Agreement.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Spouse
  of

  

 

 

 

7

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