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Exhibit 4.2  

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

 
 

WARRANT TO PURCHASE COMMON STOCK    
    

	Corporation:	 	Senomyx, Inc., a Delaware corporation
	Number of Shares:	 	25,000
	Class of Stock:	 	Common
	Initial Exercise Price:	 	$1.00
	Issue Date:	 	July 17, 2001
	Expiration Date:	 	The later to occur of July 17, 2011 or five (5) years after the date of the initial public offering of the common stock of Senomyx, Inc., a Delaware corporation

        THIS
WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for other good and valuable consideration, SILICON VALLEY BANK ("Holder") is entitled to purchase the number of fully
paid and nonassessable shares of the class of securities (such class and series of stock in general are referred to herein as the "Applicable Series" and such number of the Applicable Series as is set
forth above (and as modified in accordance with the provisions hereof) is referred to herein as the "Shares") of the corporation (the "Company") at the initial exercise price per Share (the "Warrant
Price"), all as set forth above and as adjusted pursuant to Article 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant. 

ARTICLE
1.    EXERCISE.    

        1.1    Method of Exercise.    Holder may exercise this Warrant by delivering a duly executed Notice of Exercise in
substantially the form attached as Appendix 1 to the principal office of the Company. Unless Holder is exercising the conversion right set forth in Section 1.2, Holder shall also deliver
to the Company a check for the aggregate Warrant Price for the Shares being purchased. 

        1.2    Conversion Right.    In lieu of exercising this Warrant as specified in Section 1.1, Holder may from
time to time convert this Warrant, in whole or in part, into a number of Shares determined by dividing (a) the aggregate fair market value of the Shares or other securities otherwise issuable
upon exercise of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair market value of one Share. The fair market value of the Shares shall be determined pursuant to
Section 1.4. 

        1.3    Intentionally Omitted    

        1.4    Fair Market Value.    If shares of the Applicable Series are traded in a public market, the fair market value
of the Shares shall be the closing price of the shares reported for the business day immediately before Holder delivers its Notice of Exercise to the Company. If the shares of the Applicable Series
are not traded in a public market, the Board of Directors of the Company shall determine fair market value in its reasonable good faith judgment. The foregoing notwithstanding, if Holder advises the
Board of Directors in writing that Holder disagrees with such determination, then the Company and Holder shall promptly agree upon a reputable investment banking firm to undertake such valuation. If
the valuation of such investment banking firm is greater than 105% of the amount determined by the Board of Directors, then all fees and expenses of such investment banking firm shall be paid by the
Company. In all other circumstances, such fees and expenses shall be paid by Holder. 

1

 

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

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

        1.7    Sale, Merger, or Consolidation of the Company.    

        1.7.1.    "Acquisition".    For the purpose of this Warrant, "Acquisition" means any sale, license, or other
disposition of all or substantially all of the assets of the Company, or any reorganization, consolidation, or merger of the Company where the holders of the Company's securities before the
transaction beneficially own less than 50% of the outstanding voting securities of the surviving entity after the transaction. 

        1.7.2.    Assumption of Warrant.    Upon the closing of any Acquisition the successor entity shall assume the
obligations of this Warrant, and this Warrant shall be exercisable for the same securities, cash, and property as would be payable for the Shares issuable upon exercise of the unexercised portion of
this Warrant as if such Shares were outstanding on the record date for the Acquisition and subsequent closing. The Warrant Price shall be adjusted accordingly. 

ARTICLE
2.    ADJUSTMENTS TO THE SHARES.    

        2.1    Stock Dividends, Splits, Etc.    If the Company declares or pays a dividend on its common stock payable in
common stock, or other securities, subdivides the outstanding common stock into a greater amount of common stock, then upon exercise of this Warrant, for each Share acquired, Holder shall receive,
without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend or subdivision occurred. 

        2.2    Reclassification, Exchange, Combinations or Substitutions.    Upon any reclassification, exchange,
substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this Warrant, Holder shall be entitled to receive, upon
exercise or conversion of this Warrant, the number and kind of securities and property that Holder would have received for the Shares if this Warrant had been exercised immediately before such
reclassification, exchange, substitution, or other event. The Company or its successor shall promptly issue to Holder a new Warrant for such new securities or other property. The new Warrant shall
provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 2 including, without limitation, adjustments to the Warrant Price and to the number of
securities or property issuable upon exercise of the new Warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, substitutions, or other
events. 

        2.3    No Impairment.    The Company shall not, by amendment of its Amended and Restated Certificate of Incorporation
(as in effect on the Issue Date) or through a reorganization, transfer of assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms to be observed or performed under this Warrant by the Company, but shall at all times in good faith assist in carrying out of all the provisions of
this Article 2 and in taking all such action as may be necessary or appropriate to protect Holder's rights under this Article against impairment. If the Company takes any action affecting the
Shares or its common stock other than as described above that adversely affects Holder's rights under this Warrant, the Warrant Price shall be adjusted downward and the number of Shares issuable upon 

2

 

exercise
of this Warrant shall be adjusted upward in such a manner that the aggregate Warrant Price of this Warrant is unchanged. 

        2.4    Fractional Shares.    No fractional Shares shall be issuable upon exercise or conversion of the Warrant and the
number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the Warrant, the Company shall eliminate such
fractional share interest by paying Holder an amount computed by multiplying the fractional interest by the fair market value of a full Share. 

        2.5    Certificate as to Adjustments.    Upon each adjustment of the Warrant Price, the Company at its expense shall
promptly compute such adjustment, and furnish Holder with a certificate of its principal financial or accounting officer setting forth such adjustment and the facts upon which such adjustment is
based. The Company shall, upon written request, furnish Holder a certificate setting forth the Warrant Price in effect upon the date thereof and the series of adjustments leading to such Warrant
Price. 

ARTICLE
3.    REPRESENTATIONS AND COVENANTS OF THE COMPANY.    

        3.1    Representations and Warranties.    The Company hereby represents and warrants to Holder as follows: 

        (a)   The
initial Warrant Price per Share referenced on the first page of this Warrant is not greater than the fair market value of one share of the Applicable Series as of
the date of this Warrant as determined by the Company's Board of Directors in its reasonable good faith judgment. 

        (b)   All
Shares which may be issued upon the exercise of the purchase right represented by this Warrant, and all securities, if any, issuable upon conversion of the Shares,
shall, upon issuance, be duly authorized, validly issued, fully paid and nonassessable, and free of any liens and encumbrances except for (i) restrictions on transfer provided for herein or
under applicable federal and state securities laws and (ii) liens or encumbrances that may be incurred by Holder. 

        (c)   The
Capitalization Table attached to this Warrant is true and complete as of the Issue Date. 

        3.2    Notice of Certain Events.    If the Company proposes at any time (a) to declare any dividend or
distribution upon its common stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend; (b) to offer for subscription pro rata to the holders of
any class or series of its stock any additional shares of stock of any class or series or other rights; (c) to effect any reclassification or recapitalization of common stock; (d) to
engage in an Acquisition, or to liquidate, dissolve or wind up; or (e) offer holders of registration rights the opportunity to participate in an underwritten public offering of the Company's
securities for cash, then, in connection with each such event, the Company shall give Holder (1) at least ten (10) days prior written notice of the date on which a record will be taken
for such dividend, distribution, or subscription rights (and specifying the date on which the holders of common stock will be entitled thereto) or for determining rights to vote, if any, in respect of
the matters referred to in (c) and (d) above; (2) in the case of the matters referred to in (c) and (d) above at least ten (10) days prior written notice of
the date when the same will take place (and specifying the date on which the holders of common stock will be entitled to exchange their common stock for securities or other property deliverable upon
the occurrence of such event); and (3) in the case of the matter referred to in (e) above, the same notice as is given to the holders of such registration rights. This Section 3.2
shall terminate upon the earliest to occur of (i) the Company's first firm commitment underwritten public offering of its common stock registered under the Securities Act of 1933, as amended
(such public offering, the "IPO"), (ii) the expiration of this Warrant, or (iii) the first date that Holder and its affiliates holds neither this Warrant nor any Shares issued under this
Warrant. 

3

 

        3.3    Information Rights.    So long as Holder holds this Warrant and/or any of the Shares, the Company shall deliver
to Holder (a) promptly after mailing, copies of all notices or other written communications to the stockholders of the Company, (b) within one-hundred twenty
(120) days after the end of each fiscal year of the Company, the annual audited financial statements of the Company certified by independent public accountants of recognized standing and
(c) such other financial statements required under and in accordance with any loan documents between Holder and the Company (or if the subject loan(s) no longer are outstanding), then within
forty-five (45) days after the end of each of the first three quarters of each fiscal year, the Company's quarterly, unaudited financial statements. This Section 3.3 shall
terminate upon the earliest to occur of (i) the Company's IPO, (ii) the expiration of this Warrant, and (iii) the first date that Holder and its affiliates holds neither this
Warrant nor any Shares issued under this Warrant. 

        3.4    Registration Under Securities Act of 1933, as amended.    The Company agrees that the Shares or, if the Shares
are convertible into common stock of the Company, such common stock, shall be subject to the transfer restrictions (which in turn are subject to Sections 5.3 and 5.4 hereof) and registration rights
set forth in Section 2 of the Company's Third Amended and Restated Investor Rights Agreement dated January 9, 2001 (the "Rights Agreement", and the Company represents and warrants that a
true, correct, and complete copy of the Rights Agreement in effect on the Issue Date has been delivered to Holder). The provisions set forth in the Rights Agreement in effect as of the Issue Date may
not be amended, modified or waived without the prior written consent of Holder unless such amendment, modification or waiver affects Holder in the same manner as they affect all other stockholders of
the outstanding shares of the Company who are parties to the Rights Agreement. 

ARTICLE
4.    REPRESENTATIONS, WARRANTIES OF HOLDER.    Holder represents and warrants to the Company as follows: 

        4.1    Purchase for Own Account.    Except for transfers to Holder's affiliates, this Warrant and the securities to be
acquired upon exercise of this Warrant by Holder will be acquired for investment for Holder's account, not as a nominee or agent, and not with a view to the public resale or distribution within the
meaning of the 1933 Act, and Holder has no present intention of selling, granting any participation in, or otherwise distributing the same. If not an individual, Holder also represents that Holder has
not been formed for the specific purpose of acquiring this Warrant or the Shares. 

        4.2    Disclosure of Information.    Holder has received or has had full access to all the information it considers
necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities. Holder further has had an opportunity to ask questions
and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company
possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access. 

        4.3    Investment Experience.    Holder understands that the purchase of this Warrant and its underlying securities
involves substantial risk. Holder: (i) has experience as an investor in securities of companies in the development stage and acknowledges that Holder is able to fend for itself, can bear the
economic risk of such Holder's investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the
merits and risks of its investment in this Warrant and its underlying securities and/or (ii) has a preexisting personal or business relationship with the Company and certain of its officers,
directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such persons. 

        4.4    Accredited Investor Status.    Holder is an "accredited investor" within the meaning of Regulation D
promulgated under the 1933 Act. 

4

 

ARTICLE
5.    MISCELLANEOUS.    

        5.1    Term.    This Warrant is exercisable, in whole or in part, at any time and from time to time on or before the
Expiration Date set forth above. 

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

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

        5.3    Compliance with Securities Laws on Transfer.    This Warrant and the Shares issuable upon exercise this Warrant
(and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part without compliance with applicable federal and state
securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as
reasonably requested by the Company). The Company shall not require Holder to provide an opinion of counsel if the transfer is to an affiliate of Holder, or if there is no material question as to the
availability of current information as referenced in Rule 144(c), Holder represents to the Company that it has complied with Rule 144(d) and (e) in reasonable detail, the selling
broker represents to the Company that it has complied with Rule 144(f), and the Company is provided with a copy of Holder's notice of proposed sale. 

        5.4    Transfer Procedure.    Subject to the provisions of Section 5.3, upon receipt by Holder of the executed
Warrant, Holder will transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant (or the securities issuable, directly or indirectly, upon conversion of the Shares, if
any) to Silicon Valley Bancshares, Holder's parent company. Subject to the provisions of Section 5.3, Holder or Silicon Valley Bancshares (if applicable) may transfer all or part of this
Warrant or the Shares issuable upon exercise of this Warrant (or the securities issuable, directly or indirectly, upon conversion of the Shares, if any) to The Silicon Valley Bank Foundation, or to
any affiliate of Holder, or to any other
transferee, by giving the Company written notice (which written notice, in the case of any transferee other than The Silicon Valley Bank Foundation or any affiliate of Holder, shall be prior written
notice) of the portion of the Warrant being transferred with the name, address and taxpayer identification number of the transferee and surrendering this Warrant to the Company for reissuance to the
transferee(s) (and Holder if applicable). The Company will have the right to refuse to transfer this Warrant to any person who directly competes with the Company unless the Company's stock is publicly
traded. 

        5.5    Notices.    All notices and other communications from the Company to Holder, or vice versa, shall be deemed
delivered and effective (a) when given personally, (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day,
(c) three (3) days after having been mailed by first-class registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally
recognized overnight carrier, specifying next day delivery, with written verification of receipt, at such address as may have been furnished to the Company or Holder, as the case may be, in writing by
the Company or such holder 

5

 

from
time to time. Initially, all notices to be provided under this Warrant shall be sent to the following addresses: 

Silicon
Valley Bank

Attn: Treasury Department

3003 Tasman Drive

Santa Clara, CA 95054 

Senomyx, Inc.

Attn: Corporate Counsel (with a courtesy copy at the same address to:

Chief Executive Officer/President)

11099 N. Torrey Pines Road

La Jolla, CA 92037 

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

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

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

        5.9    Market "Stand-Off" Agreement.    Holder, on behalf of itself and its transferees, hereby agrees
that it shall not sell, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any common
stock (or other securities) of the Company held by it (other than those included in the registration) for a period specified by the representative of the underwriters of common stock (or other
securities) of the Company not to exceed one hundred eighty (180) days following the effective date of a registration statement of the Company filed under the Securities Act of 1933, as
amended; provided that all officers and directors of the Company enter into and remain bound by similar agreements. The foregoing sentence shall not apply to transactions relating to shares of common
stock or other securities of the Company acquired in open market transactions after the completion of the Company's IPO ("After-Acquired Shares"), provided, however, that the exception to this
Section 5.9 provided by this sentence relative to any After-Acquired Shares of Holder shall cease to be effective with regard to Holder immediately on the first date that Holder is in a net
"short" position with regard to After-Acquired Shares. 

        5.10    No Voting or Dividend Rights.    Nothing contained in this Warrant shall be construed as conferring upon
Holder the right to vote or to consent as a stockholder of the Company or any other matters or any rights whatsoever as a stockholder of the Company or party to the Investor Rights Agreement. No
dividends or interest shall be payable or accrued in respect of this Warrant or the interest represented hereby or the Shares issuable hereunder until, and only to the extent that, this Warrant shall
have been exercised. 

[remainder
of page intentionally left blank; signature page follows] 

6

 

        IN
WITNESS WHEREOF, the parties hereto have caused this Warrant to be executed and delivered as of the Issue Date. 

	 	 	"COMPANY"
	

 	
 	

Senomyx, Inc.
	

 	
 	

By:	
 	

/s/  SAIID ZARRABIAN      

	 	 	Name:	 	Saiid Zarrabian
 (Print)
	 	 	Title:	 	Chairman of the Board, President or Vice President
	

 	
 	

By:	
 	

/s/  JEAN J. LOCKHART      

	 	 	Name:	 	Jean J. Lockhart
 (Print)
	 	 	Title:	 	Chief Financial Officer, Secretary, Assistant Treasurer or Assistant Secretary
	

 	
 	

"HOLDER"

Silicon Valley Bank
	

 	
 	

By:	
 	

/s/  LINDA LEBEAU      

	 	 	Name:	 	Linda LeBeau

	 	 	Title:	 	SVP

7

APPENDIX 1  

 NOTICE OF EXERCISE  

        1.     The
undersigned hereby elects to purchase            shares of the Common Stock
of                        . pursuant to the terms of the attached Warrant, and tenders
herewith payment of the purchase price of such shares in full. 

        1.     The
undersigned hereby elects to convert the attached Warrant into Shares in the manner specified in Section 1.2 of the Warrant. This conversion is exercised with
respect to                        of the Shares covered by the Warrant. 

        [Strike
paragraph that does not apply.] 

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

	
 (Name)
	

	

 (Address)

        3.     The
undersigned represents it is acquiring the shares solely for its own account and not as a nominee for any other party and not with a view toward the resale or
distribution thereof except in compliance with applicable securities laws. The undersigned further represents that it is an "accredited investor" within the meaning of Regulation D promulgated
under the 1933 Act. 

	 	 	 	 	
 (Signature)
	

 (Date)	
 	

 	
 	

 

AMENDMENT TO WARRANT  

        This Amendment to Warrant (the "Amendment") is entered into as of November 14, 2001 (the "Effective Date")
by and between Senomyx, Inc., a Delaware corporation (the "Company") and Silicon Valley Bank ("Holder"). 

        WHEREAS, under the terms of that certain Warrant dated as of July 13, 2001, between the Company and Holder (the "Warrant"), the
Company has issued to Holder a warrant to purchase 25,000 shares of the Company's Common Stock; 

        WHEREAS, the Company and Holder desire that Holder become a party to that certain Fourth Amended and Restated Investor Rights Agreement
dated as of November 14, 2001 (the "Rights Agreement"), solely for the purposes as designated therein; and 

        WHEREAS, the Company and Holder desire to amend the Warrant as provided herein. 

        NOW, THEREFORE, in consideration of the foregoing recitals, and in consideration for entering into the Rights Agreement, the parties
hereto agree as follows: 

        1.     Section 3.4
of the Warrant is hereby deleted in its entirety. 

        2.     Except
as amended by the preceding paragraph, the Warrant shall remain in full force and effect in accordance with its terms. 

        3.     This
Amendment shall be governed by and construed in accordance with the laws of the state of California, without giving effect to its principles regarding conflicts of
law. 

        4.     This
Amendment may be signed in any number of counterparts, each of which will be deemed an original and all of which taken together shall constitute one and the same
instrument. 

        In
Witness Whereof, the parties hereto have executed this Amendment to Warrant as of the date set forth in the first paragraph hereof. 

	 	 	SENOMYX, INC.
	

 	
 	

By:	
 	

/s/  SAIID ZARRABIAN      

	 	 	Name:	 	Saiid Zarrabian

	 	 	Title:	 	President and COO

	

 	
 	
SILICON VALLEY BANK
	

 	
 	

By:	
 	

/s/  TODD HARRIS      

	 	 	Name:	 	Todd Harris

	 	 	Title:	 	Financial Planning Director

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Exhibit 4.3  

 
 

SENOMYX, INC.    
    
    FOURTH AMENDED AND RESTATED
  INVESTOR RIGHTS AGREEMENT    
    
    November 14, 2001    
    

  

 
 

Table Of Contents    
    

	 
	 	 
	 	Page

	SECTION 1.    GENERAL	 	2
	 	1.1	 	Definitions	 	2
	

SECTION 2.    REGISTRATION; RESTRICTIONS ON TRANSFER	
 	

3
	 	2.1	 	Restrictions on Transfer	 	3
	 	2.2	 	Demand Registration	 	8
	 	2.3	 	Piggyback Registrations	 	9
	 	2.4	 	Form S-3 Registration	 	10
	 	2.5	 	Expenses of Registration	 	11
	 	2.6	 	Obligations of the Company	 	12
	 	2.7	 	Termination of Registration Rights	 	13
	 	2.8	 	Delay of Registration; Furnishing Information	 	13
	 	2.9	 	Indemnification	 	13
	 	2.10	 	Assignment of Registration Rights	 	15
	 	2.11	 	Amendment of Registration Rights	 	15
	 	2.12	 	Limitation on Subsequent Registration Rights	 	15
	 	2.13	 	"Market Stand-Off" Agreement; Agreement to Furnish Information	 	16
	 	2.14	 	Rule 144 Reporting	 	16
	

SECTION 3.    COVENANTS OF THE COMPANY	
 	

17
	 	3.1	 	Basic Financial Information and Reporting	 	17
	 	3.2	 	Inspection Rights	 	18
	 	3.3	 	Confidentiality of Records; Use of Names	 	18
	 	3.4	 	Reservation of Common Stock	 	18
	 	3.5	 	Stock Vesting	 	18
	 	3.6	 	Proprietary Information and Inventions Agreement	 	19
	 	3.7	 	Directors' Expenses	 	19
	 	3.8	 	Qualified Small Business	 	19
	 	3.9	 	Observation Rights	 	19
	 	3.10	 	Directors' and Officers' Insurance	 	19
	 	3.11	 	Agreements with Investors	 	19
	 	3.12	 	Additional Shares	 	19
	 	3.13	 	Termination of Covenants	 	20
	 	3.14	 	Use of Proceeds	 	20
	

SECTION 4.    ADDITIONAL RIGHTS OF FIRST REFUSAL	
 	

20
	 	4.1	 	Subsequent Offerings	 	20
	 	4.2	 	Exercise of Rights	 	21
	 	4.3	 	Issuance of Equity Securities to Other Persons	 	21
	 	4.4	 	Termination and Waiver of Rights of First Refusal	 	21
	 	4.5	 	Transfer of Rights of First Refusal	 	21
	 	4.6	 	Excluded Securities	 	21
	 	4.7	 	Exclusion of Series C and Series D Investor	 	22
	

SECTION 5.    MISCELLANEOUS	
 	

22
	 	5.1	 	Aggregation	 	22
	 	5.2	 	Governing Law	 	22
	 	5.3	 	Survival	 	22
	 	5.4	 	Successors and Assigns	 	22
	 	5.5	 	Entire Agreement	 	23
	 	 	 	 	 

i

 

	 	5.6	 	Severability	 	23
	 	5.7	 	Amendment and Waiver	 	23
	 	5.8	 	Delays or Omissions	 	23
	 	5.9	 	Notices	 	23
	 	5.10	 	Attorneys' Fees	 	24
	 	5.11	 	Titles and Subtitles	 	24
	 	5.12	 	Counterparts	 	24

ii

   SENOMYX, INC.  

 FOURTH AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT  

        THIS FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the
"Agreement") is entered into as of November 14, 2001, by and among SENOMYX, INC., a
Delaware corporation (the "Company"), the holders of the Company's Series A Preferred Stock ("Series A
Preferred") acquired pursuant to the Series A Preferred Stock Purchase Agreement dated October 1, 1999 (the "Series A
Agreement") the holders of the Company's Series B Preferred Stock ("Series B Preferred") acquired pursuant to the
Series B Preferred Stock Purchase Agreement dated August 10, 2000 (the "Series B Agreement"), the holder of the Company's
Series C Preferred Stock ("Series C Preferred") acquired pursuant to the Series C Preferred Stock Purchase Agreement dated
November 9, 2000 (the "Series C Agreement"), the holder (the "Series D Investor")
of the Company's Series D Preferred Stock ("Series D Preferred") acquired pursuant to the Series D Preferred Stock Purchase
Agreement dated January 9, 2001 (the "Series D Agreement"), the holders (the "Series E
Investors") of the Company's Series E Preferred Stock (the "Series E Preferred") acquired pursuant to the
Series E Preferred Stock Purchase Agreement dated November 14, 2001 (the "Series E Agreement") and, solely for the purposes of the
Designated Sections (as defined below), Silicon Valley Bank ("SVB"). The holders of the Series A Preferred, the Series B Preferred, the
Series C Preferred, the Series D Preferred and Series E Preferred listed on Exhibit A hereto shall be referred to hereinafter as the
"Investors" and each individually as an "Investor." This Agreement supersedes and replaces the Third
Amended and Restated Investor Rights Agreement dated January 9, 2001 among the Company and the holders of the Series A Preferred, the Series B Preferred, the Series C
Preferred and the Series D Preferred (the "Prior Rights Agreement"). 

RECITALS  

        WHEREAS, the Investors that are holders of the Series A Preferred, Series B Preferred,
Series C Preferred and Series D Preferred (collectively, the "Prior Investors") have been granted certain rights under the Prior Rights
Agreement; 

        WHEREAS, the Company proposes to sell and issue up to eleven million two hundred seven thousand two hundred eighty-three (11,207,283)
shares of its Series E Preferred to the Series E Investors pursuant to the Series E Agreement; and 

        WHEREAS, as a condition of entering into the Series E Agreement, the Series E Investors have required that the Company
extend to it registration rights, information rights and other rights as set forth below; 

        WHEREAS, pursuant to the terms of a warrant (the "Warrant") to purchase 25,000 shares of
the Company's common stock, par value $.001 per share (the "Common Stock"), previously issued by the Company to SVB, the Company agreed to provide SVB
with certain registration rights; and 

        WHEREAS, the Company and the Prior Investors desire to amend and restate the rights and obligations of the Company and the Prior Investors
under the Prior Rights Agreement. 

        NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants and conditions set forth in this
Agreement, the Series A Agreement, the Series B Agreement, the 

1

 

Series C
Agreement, the Series D Agreement and the Series E Agreement, the parties mutually agree as follows: 

SECTION 1.    GENERAL    

        1.1    Definitions.    Capitalized terms used but not otherwise
defined herein shall have the meanings given such terms in the Series E Agreement. As used in this Agreement the following terms shall have the following respective meanings: 

        "Affiliate" shall mean with respect to any Person, any other Person controlling, controlled by or within common control with such Person. 

        "Associate" shall mean (i) a corporation or organization (other than the Company) of which a Person is an officer or partner or is,
directly or indirectly, the beneficial owner of 10% or more of any class of equity securities, (ii) any trust or other estate in which such Person has a substantial beneficial interest or as to
which such Person serves as trustee or in a similar capacity, and (iii) any relative or spouse of such Person, or any relative of such spouse, who has the same home as such Person or who is a
director or officer of the Company. 

        "Designated Sections" shall mean Section 2 (other than Section 2.1) and Section 5. 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        "Form S-3" means such form under the Securities Act as in effect on the date hereof or any successor registration form
under the Securities Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC. 

        "Holder" means any person owning of record Registrable Securities that have not been sold to the public or any assignee of record of such
Registrable Securities in accordance with Section 2.10 hereof. 

        "Initial Offering" means the Company's first firm commitment underwritten public offering of Common Stock registered under the Securities
Act. 

        "Investor Stock" shall mean all Shares and/or shares of Registrable Securities. 

        "Permitted Transfer" means a transfer of Shares by a Holder (a) to any Affiliate, (b) to the Holder's spouse or child; or
(c) which is (i) a partnership to its partners or former partners in accordance with partnership interests, (ii) a limited liability company to its members or former members in
accordance with their interest in the limited liability company, (iii) a trust to its grantors or beneficiaries, or (iv) to the Holder's family member or trust for the benefit of an
individual Holder. 

        "Person" shall mean any individual or any corporation (including any non-profit corporation), general partnership, limited
partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization
or entity. 

        "Qualifying Initial Offering" means the Company's first firm commitment underwritten public offering of its Common Stock registered under
the Securities Act at a per share purchase price of at least $8.6997 (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares), for total
proceeds of at least $25,000,000 (before deduction of Registration Expenses and Selling Expenses), and following which the Company's Common Stock is listed or quoted on a nationally recognized
securities exchange or The Nasdaq National Market. 

        "Register," "registered," and "registration" refer to a registration effected by preparing
and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document. 

2

 

        "Registrable Securities" means (a) Common Stock of the Company issued or issuable upon conversion of the Shares, (b) solely
for the purposes of the Designated Sections, Common Stock of the Company issued or issuable upon exercise of the Warrant, and (c) any Common Stock of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such above-described
securities. Notwithstanding the foregoing, Registrable Securities shall not include any securities sold by a person to the public pursuant to a registration statement or Rule 144 or sold in a
private transaction in which the transferor's rights under Section 2 of this Agreement are not assigned. 

        "Registrable Securities then outstanding" shall be the number of shares determined by calculating the total number of shares of the
Company's Common Stock that are Registrable Securities and either (a) are then issued and outstanding or (b) are issuable pursuant to then exercisable or convertible securities. 

        "Registration Expenses" means all expenses incurred by the Company in complying with Sections 2.2, 2.3 and 2.4 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, reasonable fees and disbursements, up to $25,000 per registration, of a single
special counsel for the Holders, blue sky fees and expenses and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees
of the Company which shall be paid in any event by the Company). 

        "SEC" or "Commission" means the Securities and Exchange Commission. 

        "Securities Act" means the Securities Act of 1933, as amended. 

        "Selling Expenses" means all underwriting discounts and selling commissions applicable to the sale. 

        "Shares" means the Company's Series A Preferred, the Series B Preferred, the Series C Preferred, the Series D
Preferred and the Series E Preferred (including any shares of the Company's Series A-1, Series A-2, Series B-1,
Series B-2,
or similar series of Preferred Stock issued upon conversion of the Shares pursuant to the Restated Charter) and held by the Investors listed on Exhibit A hereto and their permitted assigns. 

        "Transfer" shall mean any sale, assignment, encumbrance, hypothecation, pledge, conveyance in trust, gift, transfer by request, devise or
descent, or other transfer or disposition of any kind, including, but not limited to, transfers to receivers, levying creditors, trustees or receivers in bankruptcy proceedings or general assignees
for the benefit of creditors, whether voluntary or by operation of law, directly or indirectly, of any of the Investor Stock other than a Permitted Transfer. 

SECTION 2.    REGISTRATION; RESTRICTIONS ON TRANSFER    

        2.1    Restrictions on Transfer.    

        (a)   Each Investor agrees not to make any disposition of all or any portion of Investor Stock and until: 

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

         (ii)  (A) The transferee has agreed in writing to be bound by the terms of this Agreement, (B) such Investor shall have
notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and (C) subject to
clause (iii) below, if reasonably requested by the Company, such Investor shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require 

3

 

registration
of such shares under the Securities Act. It is agreed that the Company will not require opinions of counsel for transactions made pursuant to Rule 144 except in unusual
circumstances. 

       (iii)  Notwithstanding the provisions of paragraphs (i) and (ii) above, no such registration statement or
opinion of counsel shall be necessary for a Permitted Transfer; in any such case, written notification of the Permitted Transfer need only be delivered at the time of or within a reasonable time after
such Permitted Transfer; provided that in each case the transferee will be subject to the terms of this Agreement to the same extent as if he were an
original Investor hereunder, and such Permitted Transfer complies with state and federal securities law. 

        (b)    Transfers by an Investor.    

        (i)    Notice of Transfer.    If an Investor (a "Selling
Investor") proposes to Transfer any shares of Investor Stock, then the Selling Investor shall promptly give written notice (the "Investor Transfer
Notice") simultaneously to the Company and to each of the other Investors at least thirty (30) days prior to the closing of such Transfer. The Investor Transfer Notice
shall describe in reasonable detail the proposed Transfer including, without limitation, the number of shares of Investor Stock to be transferred, the nature of such Transfer, the consideration to be
paid, and the name and address of each prospective purchaser or transferee. 

        (ii)    Company Right of First Refusal.    Except with respect to Permitted Transfers, for a
period of ten (10) days following receipt of any Investor Transfer Notice, the Company shall have the right to purchase all or a portion of the Investor Stock subject to such Investor Transfer
Notice on the same terms and conditions as set forth therein. The Company's purchase right shall be exercised by written notice signed by an officer of the Company and delivered to the Selling
Investor (the "Company Exercise Notice"). The Company shall effect the purchase of shares of Investor Stock, including payment of the purchase price,
not more than ten (10) business days after delivery of the Company Exercise Notice, and at such time the Selling Investor shall deliver to the Company the certificate(s) representing the shares
of Investor Stock to be purchased by the Company, each certificate to be properly endorsed for transfer. The shares of Investor Stock so purchased shall thereupon be cancelled and cease to be issued
and outstanding shares of the Company's stock. In the event the Company elects not to exercise the Company's right of first refusal as set forth herein, the Company hereby waives any rights of first
refusal as set forth in section 46 of Article XIV of the bylaws of the Company, as amended (the "Bylaws"). 

        (iii)    Investor Right of First Refusal.    

        (1)   In the event that the Company does not elect to purchase all of the shares of Investor Stock available pursuant to its
rights under Section 2.1(b)(ii) within the period set forth therein, the Selling Investor shall promptly give written notice (the "Second
Notice") to the Company and each of the other Investors, which shall set forth the number of shares of Investor Stock not purchased by the Company and which shall include the
terms of Investor Transfer Notice set forth in Section 2.1(b)(i). Each other Investor shall then have the right, exercisable upon written notice to the Selling Investor (the  "Purchase Notice") within ten (10) days after the receipt of the Second Notice, to purchase its pro rata share of the Investor Stock subject to
the Second Notice and on the same terms and conditions as set forth therein. The Investors who so exercise their rights (the "Participating Investors")
shall effect the purchase of the shares of Investor Stock, including payment of the purchase price, not more than ten (10) days after delivery of the Purchase Notice, and at such time the
Selling Investor shall deliver to the Participating 

4

 

Investors
the certificate(s) representing the shares of Investor Stock to be purchased by the Participating Investors, each certificate to be properly endorsed for transfer. 

        (2)   Each Investor's pro rata share shall be equal to the product obtained by
multiplying (A) the aggregate number of shares of Investor Stock covered by the Second Notice and (B) a fraction, the numerator of which is the number of shares of Investor Stock owned
by the Participating Investor at the time of the Transfer and the denominator of which is the total number of shares of Investor Stock owned by all of the Investors at the time of the Transfer. 

        (3)   In the event that not all of the Investors elect to purchase their pro
rata share of the Investor Stock available pursuant to their rights under Section 2.1(b)(iii)(1) within the time period set forth therein, then the Selling Investor
shall promptly give written notice to each of the Participating Investors, which shall set forth the number of shares of Investor Stock not purchased by the other Investors, and shall offer such
Participating Investors the right to acquire such unsubscribed shares. The Participating Investors shall have five (5) days after receipt of such notice to notify the Selling Investor of their
election to purchase its pro rata share of the unsubscribed shares on the same terms and conditions as set forth in the Second Notice. 

        (4)   In the event any Investor elects to purchase such Investor's pro rata
share of the Investor Stock available pursuant to their rights under this Section 2.1(b)(iii), such election shall be deemed valid and enforceable notwithstanding Section 46 of
Article XIV of the Bylaws. 

        (iv)    Right of Co-Sale.    

        (1)   In addition to the obligations set forth in Sections 2.1(b)(i) through (iii) above, in the event the
Selling Investor proposes to sell shares of Series E Preferred and the Company and/or the other Investors fail to exercise their respective rights to purchase all of such shares of
Series E Preferred
subject to Section 2.1(b)(ii) or (iii) hereof, following the exercise or expiration of the rights of purchase set forth in Sections 2.1(b)(ii) and (iii), then the Selling
Investor shall deliver to the Company and each other Series E Investor written notice (the "Co-Sale Notice") that each
Series E Investor shall have the right, exercisable upon written notice to such Selling Investor with a copy to the Company, within ten (10) days after receipt of the Co-Sale
Notice, to participate in such Transfer of Series E Preferred on the same terms and conditions. Such notice shall indicate the number of shares of Series E Preferred such Series E
Investor wishes to sell (up to that number of shares determined under Section 2.1(b)(iv)(2) under his, her or its right to participate. To the extent one or more of the Series E
Investors exercise such right of participation in accordance with the terms and conditions set forth below, the number of shares of Series E Preferred that the Selling Investor may sell in the
transaction shall be correspondingly reduced. 

        (2)   Each Series E Investor may sell all or any part of that number of shares equal to the product obtained by
multiplying (A) the aggregate number of shares of Series E Preferred covered by the Co-Sale Notice by (B) a fraction, the numerator of which is the number of shares of
Investor Stock owned by such participating Series E Investor at the time of the Transfer and the denominator of which is the total number of shares of Investor Stock owned by the Selling
Investor (and not purchased by the Company or the other Series E Investors) and the other Series E Investors at the time of the Transfer. 

        (3)   Each Series E Investor who elects to participate in the Transfer pursuant to this Section 5(d) (a
"Co-Sale Participant") shall effect its participation in the Transfer by 

5

 

promptly
delivering to the Selling Investor for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer, which represent the type and number of shares of
Preferred Stock which such Co-Sale Participant elects to sell. 

        (4)   The stock certificate or certificates that the Co-Sale Participant delivers to the Selling Investor pursuant
to Section 2.1(b)(iv)(3) shall be transferred to the prospective purchaser in consummation of the sale of the Preferred Stock pursuant to the terms and conditions specified in the
Co-Sale Notice, and the Selling Investor shall concurrently therewith remit to such Co-Sale Participant that portion of the sale proceeds to which such Co-Sale
Participant is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or
other securities from a Co-Sale Participant exercising its rights of co-sale hereunder, the Selling Investor shall not sell to such prospective purchaser or purchasers any
shares of Investor Stock unless and until, simultaneously with such sale, the Selling Investor shall purchase such shares or other securities from such Co-Sale Participant on the same
terms and conditions specified in the Co-Sale Notice. 

        (v)    Subsequent Investor Transfers.    The exercise or non-exercise of the
rights of the other Series E Investors hereunder to participate in one or more Transfers of shares of Series E Preferred shall
not adversely affect their rights to participate in subsequent Transfers of Series E Preferred pursuant to Section 2.1(b). 

        (vi)    Sale of Investor Stock.    If none of the other Series E Investors elects to
participate in the Transfer of Series E Preferred subject to the Co-Sale Notice, the Selling Investor may, not later than thirty (30) days following delivery to the Company
of the Co-Sale Notice, enter into an agreement providing for the closing of the Transfer of the Series E Preferred covered by the Co-Sale Notice within thirty
(30) days of such agreement on terms and conditions not more favorable to the transferee than those described in the Co-Sale Notice. Any proposed Transfer on terms and conditions
more favorable to the transferee than those described in the Co-Sale Notice, as well as any subsequent proposed Transfer of any of the Series E Preferred by a Selling Investor,
shall again be subject to the right of first refusal and co-sale rights of the Company and Series E Investors, as applicable, and shall require compliance by a Selling Investor with
the procedures described in this Section 2.1(b). 

        (c)    Exempt Investor Transfers.    Notwithstanding the foregoing,
the provisions of Section 2.1(b) shall not apply to (i) the sale or sales of any Series E Preferred by a Selling Investor or any of its Affiliates where such sale or sales, in the
aggregate, amount to less than one percent (1%) of the such Selling Investor's holdings of Series E Preferred, or (ii) any Permitted Transfer; provided, however, that with respect to
Transfers pursuant to this clause (c), the Co-Sale Rights under Section 2.1(b)(iv) of this Agreement shall then apply to the transferee. 

        (d)    Prohibited Investor Transfers.    

          (i)  In the event that a Selling Investor (a "Prohibited Selling Investor")
should Transfer any Investor Stock in contravention of the right of first refusal and co-sale rights of each other Investor under Section 2.1(b) of this Agreement (a
"Prohibited Transfer"), each other Investor in addition to such other remedies as may be available at law, in equity or hereunder, shall have the put
option provided below, and the Prohibited Selling Investor shall be bound by the applicable provisions of such option. 

         (ii)  In the event of a Prohibited Investor Transfer, each Investor shall have the right to sell to the Prohibited Selling
Investor the type and number of shares of Investor Stock equal to the number of shares each Investor would have been entitled to transfer to the purchaser 

6

 

under
Section 2.1(b)(iv) hereof had the Prohibited Transfer been effected pursuant to and in compliance with the terms hereof. Such sale shall be made on the following terms and
conditions: 

        (1)   The price per share at which the shares of Investor Stock are to be sold to the Prohibited Selling Investor shall be
equal to the greatest price per share of Investor Stock paid by the transferee to the Selling Investor in such Prohibited Transfer. The Prohibited Selling Investor shall also reimburse each other
Investor for any and all fees and expenses, including legal fees and expenses, incurred in connection with the exercise or the attempted exercise of the Investor's rights under Section 2.1(b). 

        (2)   Within ninety (90) days after the date on which an Investor receives notice of the Prohibited Transfer or
otherwise becomes aware of the Prohibited Transfer, such Investor shall, if exercising the option created hereby, deliver to the Prohibited Selling Investor the certificate or certificates
representing the shares of Investor Stock to be sold, each certificate to be properly endorsed for transfer. 

        (3)   The Prohibited Selling Investor shall, upon receipt of the certificate or certificates for the shares to be Transferred
by an Investor, pursuant to this Section 2.1(d)(ii), pay the aggregate purchase price therefor and the amount of reimbursable fees and expenses, as specified in Section 2.1(d)(ii)(1) in
cash or by other means acceptable to the Investor. 

       (vii)  Notwithstanding the foregoing, any attempt by an Investor to effect a Prohibited Transfer shall be voidable at the
option of a majority in interest of the other Investors if a majority in interest of the other Investors do not elect to exercise the put option set forth in this Section 2.1(d), and the
Company agrees it will not effect such a transfer nor will it treat any alleged transferee as the holder of such shares without the written consent of a majority in interest of the other Investors. 

        (e)    Termination of Investor Right of First Refusal and
Co-Sale.    The rights and obligations as to each of the Investors under Section 2.1(b), (c) and (d) shall terminate upon
(i) the effective date of the Initial Offering or (ii) upon consummation of (A) a sale, lease or other disposition of all or substantially all of the assets of the Company or
(B) any consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, in which the stockholders of the Company
immediately prior to such consolidation, merger or reorganization own less than fifty percent (50%) of the Company's voting power immediately after such consolidation, merger or reorganization, or any
transaction or series of related transactions to which the Company is a party in which in excess of fifty percent (50%) of the Company's voting power is transferred (each, a  "Change in Control");
provided, however, that this Section 2.1(e) shall not apply to a merger
effected exclusively for the purpose of changing the domicile of the Company. 

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

        THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED EXCEPT AS OTHERWISE PROVIDED IN 

7

 

SECTION
2.1(a)(iii) OF THAT CERTAIN FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT BY AND AMONG THE COMPANY AND INVESTORS IN THE COMPANY (WHICH SUCH AGREEMENT IS AVAILABLE UPON REQUEST
TO THE COMPANY). 

        (g)   The Company shall be obligated to reissue promptly unlegended certificates at the request of any holder thereof if the
holder shall have obtained an opinion of counsel (which counsel may be counsel to the Company) reasonably acceptable to the Company to the effect that the securities proposed to be disposed of may
lawfully be so disposed of without registration, qualification or legend. 

        (h)   Any legend endorsed on an instrument pursuant to applicable state securities laws and the stop-transfer
instructions with respect to such securities shall be removed upon receipt by the Company of an order of the appropriate blue sky authority authorizing such removal. 

        2.2    Demand Registration.    

        (a)   Subject to the conditions of this Section 2.2, if the Company shall receive a written request from the Holders of
at least 20% of the Registrable Securities then outstanding (the "Initiating Holders") that the Company file a registration statement under the
Securities Act covering the registration of at least 10% of the then outstanding Registrable Securities (a "Demand Registration"), then the Company
shall, within thirty (30) days of the receipt thereof, give written notice of such request to all Holders, and subject to the limitations of this Section 2.2, use its best efforts to
effect, as soon as practicable, the registration under the Securities Act of all Registrable Securities that the Holders request to be registered. 

        (b)   If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2.2 or any request pursuant to Section 2.4 and the Company shall include such
information in the written notice referred to in Section 2.2(a) or Section 2.4(a), as applicable. In such event, the right of any Holder to include its Registrable Securities in such
registration shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such
underwriting by the Company (which underwriter or underwriters shall be reasonably acceptable to a majority in interest of the holders of Registrable Securities participating in the underwriting).
Notwithstanding any other provision of this Section 2.2 or Section 2.4, if the underwriter advises the Company that marketing factors require a limitation of the number of securities to
be underwritten (including Registrable Securities) then the Company shall so advise all Holders of Registrable Securities which would otherwise be underwritten pursuant hereto, and the number of
shares that may be included in the underwriting shall be reduced to a number deemed satisfactory by the managing underwriter; provided, that the shares to be excluded shall be determined in the
following order of priority: (i) securities held by persons not having any contractual or other right to include such securities in the registration statement; (ii) securities held by
any other persons (other than holders of Registrable Securities) having a contractual, incidental "piggyback" right to include such securities in the registration statement, (iii) securities to
be registered by the Company pursuant to such registration statement, and (iv) Registrable Securities. If there is a reduction of the number of Registrable Securities pursuant to
clause (iv), such reduction shall be made on a pro rata basis based on the number of Registrable Securities requested to be included in such
registration. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration. 

8

  

        (c)   The Company shall not be required to effect a registration pursuant to this Section 2.2: 

          (i)  prior to the earlier of (A) the third anniversary of the date of this Agreement or (B) six
(6) months following the effective date of the registration statement pertaining to the Initial Offering; 

         (ii)  after the Company has effected two (2) registrations pursuant to this Section 2.2, and such registrations
have been declared or ordered effective; 

       (iii)  during the period starting with the date of filing of, and ending on the date one hundred eighty (180) days
following the effective date of the registration statement pertaining to a public offering; provided that the Company makes reasonable good faith
efforts to cause such registration statement to become effective; 

        (iv)  if within thirty (30) days of receipt of a written request from Initiating Holders pursuant to
Section 2.2(a), the Company gives notice to the Holders of the Company's intention to make a public offering within ninety (90) days; provided, however, that the Company shall be limited
to delivery of no more than one such notice in any (12) twelve month period; 

         (v)  if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 2.2, a
certificate signed by the President or Chief Executive Officer of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the
Company and its stockholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than ninety
(90) days after receipt of the request of the Initiating Holders in any twelve (12) month period; provided that such right to delay a
request shall be exercised by the Company not more than twice in the aggregate; or 

        (vi)  if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on
Form S-3 pursuant to a request made pursuant to Section 2.4 below. 

        2.3    Piggyback
Registrations.    The Company shall notify all Holders of Registrable Securities in writing at least thirty (30) days prior to the filing of any registration
statement under the Securities Act for purposes of a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities
of the Company, but excluding registration statements relating to employee benefit plans or with respect to corporate reorganizations or other transactions under Rule 145 of the Securities Act)
and will afford each such Holder an opportunity to include in such registration statement all or part of such Registrable Securities held by such Holder. Each Holder desiring to include in any such
registration statement all or any part of the Registrable Securities held by it shall, within thirty (30) days after the above-described notice from the Company, so notify the Company in
writing. Such notice shall state the intended method of disposition of the Registrable Securities by such Holder. If a Holder decides not to include all of its Registrable Securities in any
registration statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein. 

        (a)    Underwriting.    If
the registration statement under which the Company gives notice under this Section 2.3 is for an underwritten offering, the Company shall so advise the Holders of Registrable Securities. In
such event, the right of any such Holder to be included in a registration pursuant to this Section 2.3 shall be conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Securities through 

9

 

such
underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company. Notwithstanding any other provision
of the Agreement, if the underwriter determines in good faith that marketing factors require a limitation of the number of shares to be underwritten, the number of shares that may be included in the
underwriting shall be allocated, first, to the Company; second, to the Holders on a  pro rata basis based on
the number of Registrable Securities requested to be included in such registration; and  third, to any stockholder of the Company (other than a Holder) on a pro
rata basis. No such reduction
shall reduce the amount of Registrable Securities included in such registration below an amount equal to thirty percent (30%) of the total number of securities included in such registration, unless
such offering is the Initial Offering, in which event any or all of the Registrable Securities may be excluded in accordance with the immediately preceding sentence. In addition, the number of shares
being offered by the Company for its own account and Registrable Securities to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the
registration and underwriting. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter,
delivered at least ten (10) business days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded
and withdrawn from the registration. For any Holder which is a partnership or corporation, the partners, retired partners and shareholders of such Holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of any of the foregoing person shall be deemed to be a single "Holder", and any  pro rata reduction with respect to such "Holder" shall be based upon the aggregate amount of shares carrying registration rights owned by all entities
and individuals included in such "Holder," as defined in this sentence. 

        (b)    Right to Terminate
Registration.    The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.3 prior to the effectiveness
of such registration whether or not any Holder has elected to include securities in such registration. The Registration Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 2.5 hereof. 

        2.4    Form S-3
Registration.    In case the Company shall receive from any Holder or Holders who, individually or together with its or their Affiliates, own not less than five
hundred thousand (500,000) shares of Registrable Securities, a written request or requests that the Company effect a registration, including a registration of securities to be offered on a delayed or
continuous basis pursuant to Rule 415 of the Securities Act, on Form S-3 (or any successor to Form S-3) or any similar short-form registration
statement and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company will: 

        (a)   promptly give written notice of the proposed registration, and any related qualification or compliance, to all other
Holders of Registrable Securities; and 

        (b)   as soon as practicable, effect such registration and all such qualifications and compliances as may be so requested and
as would permit or facilitate the sale and distribution of all or such portion of such Holder's or Holders' Registrable Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice
from the Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to
this Section 2.4: 

          (i)  if Form S-3 (or any successor or similar form) is not available for such offering by the Holders; 

10

 

         (ii)  if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than two million dollars ($2,000,000); 

       (iii)  if within thirty (30) days of receipt of a written request from any Holder or Holders pursuant to this
Section 2.4, the Company gives notice to such Holder or Holders of the Company's good faith intention to make a public offering within ninety (90) days (other than pursuant to a
registration statement
relating to employee benefit plan(s) or with respect to a corporate reorganization or other transaction under Rule 145 of the Securities Act); 

        (iv)  if the Company shall furnish to the Holders a certificate signed by the President or Chief Executive Officer of the
Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its shareholders for such Form S-3
registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than
ninety (90) days after receipt of the request of the Holder or Holders under this Section 2.4; provided, that such right to delay a
request shall be exercised by the Company not more than once in any twelve (12) month period; 

         (v)  if the Company has, within the twelve (12) month period preceding the date of such request, already effected two
(2) registrations on Form S-3 for the Holders pursuant to this Section 2.4; or 

        (vi)  in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification or compliance. 

        (c)   Subject to the foregoing, the Company shall file a Form S-3 registration statement covering the
Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Holders. Registrations effected pursuant to this
Section 2.4 shall not be counted as demands for registration or registrations effected pursuant to Sections 2.2 or 2.3, respectively. 

        2.5    Expenses of
Registration.    Except as specifically provided herein, all Registration Expenses incurred in connection with any registration, qualification or compliance pursuant
to Section 2.2 or any registration under Section 2.3 or Section 2.4 herein shall be borne by the Company. All Selling Expenses incurred in connection with any registrations
hereunder, shall be borne by the holders of the securities so registered pro rata on the basis of the number of shares so registered. The Company shall
not, however, be required to pay for expenses of any registration proceeding begun pursuant to Section 2.2 or 2.4, the request of which has been subsequently withdrawn by the Initiating Holders
unless (a) the withdrawal is based upon material adverse information concerning the Company of which the Initiating Holders were not aware at the time of such request, or (b) the Holders
of a majority of Registrable Securities agree to forfeit their right to one requested registration pursuant to Section 2.2 or Section 2.4, as applicable, in which event such right shall
be forfeited by all Holders). If the Holders are required to pay the Registration Expenses, such expenses shall be borne by the holders of securities (including Registrable Securities) requesting such
registration in proportion to the number of shares for which registration was requested. If the Company is required to pay the Registration Expenses of a withdrawn offering pursuant to
clause (a) above, then the Holders shall not forfeit their rights pursuant to Section 2.2 or Section 2.4 to a demand registration. 

11

 

        2.6    Obligations of the
Company.    Subject to Section 2.3(b), whenever required to effect the registration of any Registrable Securities, the Company shall, as expeditiously as
reasonably possible: 

        (a)   Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best
efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration
statement effective for up to one hundred twenty (120) days or, if earlier, until the Holder or Holders have completed the distribution related thereto. Notwithstanding any other provision of
this Agreement, such Holder or Holders understand that there may be periods during which the Company's Board of Directors may determine, in good faith, that it is in the best interest of the Company
and its stockholders to defer disclosure of material non-public information until such information has reached a more advanced stage and that during such periods sales of Registrable
Securities and the effectiveness of any registration statement covering Registrable Securities may be suspended or delayed; provided, however, that the
Company may impose no more than one (1) suspension or delay in any twelve (12) month period, such suspension or delay not to exceed ninety (90) days in the aggregate. Such Holder
or Holders agree that upon receipt of any notice from the Company of the development of any material non-public information, such Holder or Holders will forthwith discontinue such Holder's
or Holders' disposition of Registrable Securities pursuant to the registration statement relating to such Registrable Securities until such Holder's or Holders' receipt of copies of an appropriately
supplemented or amended prospectus and, if so directed by the Company, such Holder or Holders will use its best efforts to deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's or Holders' possession, of the prospectus relating to such Registrable Securities current at the time of receipt of such notice. In the event the Company
shall give any such notice, the applicable time period during which a Registration Statement is to remain effective shall be extended by the number of days during the period from and including the
date of the giving of such notice to and including the date when each seller of a Registrable Security covered by such registration statement shall have received the copies of the appropriate
supplemented or amended prospectus. 

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

        (c)   Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them. 

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

        (e)   In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement,
in usual and customary form, with the managing underwriter(s) of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an
agreement. 

        (f)    Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, 

12

 

as
then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing. 

        (g)   Use its best efforts to furnish, on the date that such Registrable Securities are delivered to the underwriters for sale,
if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter dated as of such date, from the independent
certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering addressed to
the underwriters. 

        (h)   Instruct the members of the Company's senior management to use their commercially reasonable efforts to assist in the
marketing of any shares covered by any registration statement filed pursuant to Section 2.2 or Section 2.4 hereof. 

        2.7    Termination of Registration
Rights.    All registration rights granted under this Section 2 shall terminate and be of no further force and effect five (5) years after the date of
the Company's Qualifying Initial Offering. In addition, a Holder's registration rights shall expire if (a) the Company has completed its Initial Offering and is subject to the provisions of the
Exchange Act, and (b) all Registrable Securities held by and issuable to such Holder (and its Affiliates, partners, former partners, members and former members) may be sold under
Rule 144 (including Rule 144(k)) during any ninety (90) day period. 

        2.8    Delay of Registration; Furnishing
Information.    

        (a)   No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2. 

        (b)   It shall be a condition precedent to the obligations of the Company to take any action pursuant to Section 2.2,
2.3 or 2.4 that the selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them and the intended method of disposition of such
securities as shall be reasonably required to effect the registration of their Registrable Securities. 

        (c)   The Company shall have no obligation with respect to any registration requested pursuant to Section 2.2 or
Section 2.4 if, due to the operation of Section 2.2(b), the number of shares or the anticipated aggregate offering price of the Registrable Securities to be included in the registration
does not equal or exceed the number of shares or the anticipated aggregate offering price required to originally trigger the Company's obligation to initiate such registration as specified in
Section 2.2 or Section 2.4, whichever is applicable. 

        2.9    Indemnification.    In
the event any Registrable Securities are included in a registration statement under Sections 2.2, 2.3 or 2.4: 

        (a)   To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, officers and
directors of each Holder, the beneficiaries and grantors of each Holder that is a trust, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such
Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively a "Violation") 

13

 

by
the Company: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the
statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any state securities law in connection with the offering covered by such registration statement; and the Company will pay as incurred to each
such Holder, partner, officer, director, underwriter or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided however, that the indemnity agreement contained in this Section 2.9(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall
the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection with such registration by such Holder, partner, officer, director, underwriter or controlling person of such Holder. 

        (b)   To the extent permitted by law, each Holder will, if Registrable Securities held by such Holder are included in the
securities as to which such registration qualifications or compliance is being effected, indemnify and hold harmless the Company, each of its directors, its officers and each person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder's partners,
directors or officers or any person who controls such Holder, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, controlling
person, underwriter or other such Holder, or partner, director, officer or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with written information furnished by such Holder under an instrument duly executed by such Holder and stated to be specifically for use in
connection with such registration; and each such Holder will pay as incurred any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person,
underwriter or other Holder, or partner, officer, director or controlling person of such other Holder in connection with investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Violation; provided, however, that the indemnity agreement contained in this Section 2.9(b)
shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be
unreasonably
withheld; provided further, that in no event shall any indemnity under this Section 2.9 exceed the proceeds from the offering received by such
Holder. 

        (c)   Promptly after receipt by an indemnified party under this Section 2.9 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.9, deliver to the indemnifying
party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained
by the 

14

 

indemnifying
party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section 2.9, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 2.9. 

        (d)   If the indemnification provided for in this Section 2.9 is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall to the extent permitted by applicable law contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the Violation(s) that resulted in such loss, claim,
damage or liability, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party
or by the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission;  provided, that in no event shall any
contribution by a Holder hereunder exceed the net proceeds from the offering received by such Holder.
 

        (e)   The obligations of the Company and Holders under this Section 2.9 shall survive completion of any offering of
Registrable Securities in a registration statement and the termination of this agreement. No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each
indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect to such claim or litigation. 

        2.10    Assignment of Registration
Rights.    The rights to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned by a Holder to a transferee or
assignee of Registrable Securities; provided, however, that (i) the transferor shall, within ten (10) days after such transfer, furnish to
the Company written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned, (ii) the transferee or
assignee acquires such Registrable Securities in a private transaction, and (iii) such transferee shall agree to be subject to all restrictions set forth in this Agreement. 

        2.11    Amendment of Registration
Rights.    Any provision of this Section 2 may be amended and the observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company and the Holders of at least sixty-seven percent (67%) of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this Section 2.11 shall be binding upon each Holder and the Company. By acceptance of any benefits under this Section 2, Holders of Registrable
Securities hereby agree to be bound by the provisions hereunder. 

        2.12    Limitation on Subsequent Registration
Rights.    After the date of this Agreement, the Company shall not, without the prior written consent of the Holders of at least sixty-seven percent (67%) of the
Registrable Securities then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Company that would grant such holder registration rights senior to or
on parity with those granted to the Holders hereunder. Notwithstanding the generality of 

15

 

the
foregoing, the Company shall not grant any piggyback registration rights which would reduce the number of shares includable by the holders of Registrable Securities in any registration without the
consent of the holders of at least a majority of the Registrable Securities participating in the underwriting. 

        2.13    "Market Stand-Off" Agreement;
Agreement to Furnish Information.    Each Holder hereby agrees that such Holder shall not sell, transfer, make any short sale of, grant any option for the purchase
of, or enter into any hedging or similar transaction with the same economic effect as a sale, any Common Stock (or other securities) of the Company held by such Holder (other than those included in
the registration) for a period specified by the representative of the underwriters of Common Stock (or other securities) of the Company not to exceed one hundred eighty (180) days following the
effective date of the registration statement of the Company filed in connection with the Initial Offering; provided that all officers, directors and
holders of one percent (1%) of the outstanding capital stock of the Company enter into similar agreements; provided, further, that, notwithstanding the
foregoing, a Holder shall be permitted to transfer any Common Stock or other securities of the Company held by such Holder in one or more private transactions to any of its Affiliates who agree in
writing to be bound by the provisions of this Section 2.13. 

        Each
Holder agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with the foregoing or which are
necessary to give further effect thereto. In addition, if requested by the Company or the representative of the underwriters of Common Stock (or other securities) of the Company, each Holder shall
provide, within ten (10) days of such request, such information as may be reasonably required by the Company or such representative in connection with the completion of any public offering of
the Company's securities pursuant to a registration statement filed under the Securities Act. The obligations described in this Section 2.13 shall not apply to a registration relating solely to
employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a Commission
Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to the
shares of Common Stock (or other securities) subject to the foregoing restriction until the end of said one hundred eighty (180) day period. 

        2.14    Rule 144
Reporting.    With a view to making available to the Holders the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable
Securities to the public without registration, the Company agrees to use its best efforts to: 

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

        (b)   File with the SEC, in a timely manner, all reports and other documents required of the Company under the Exchange Act;
and 

        (c)   So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request: a written statement
by the Company as to its compliance with the reporting requirements of said Rule 144 of the Securities Act, and of the Exchange Act (at any time after it has become subject to such reporting
requirements); a copy of the most recent annual or quarterly report of the Company; and such other reports and documents as a Holder may reasonably request in availing itself of any rule or regulation
of the SEC allowing it to sell any such securities without registration. 

16

   SECTION 3.    COVENANTS OF THE COMPANY    

        3.1    Basic Financial Information and
Reporting.    

        (a)   The Company will maintain books and records of account in which entries will be made of its business transactions
pursuant to a system of accounting established and administered in accordance with generally accepted accounting principles consistently applied, and will set aside on its books all such proper
accruals and reserves as shall be required under generally accepted accounting principles consistently applied. 

        (b)   Within one hundred twenty (120) days after the end of each fiscal year of the Company, the Company will furnish
each Investor that, together with its Affiliates, holds not less than three hundred thousand (300,000) shares of Registrable Securities (as adjusted for stock splits, combinations and the like) (a  "Major
Investor") a balance sheet of the Company, as at the end of such fiscal year, and a statement of income and a statement of cash flows of the
Company, for such year, all prepared in accordance with generally accepted accounting principles consistently applied and setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail. Such financial statements shall be audited and accompanied by a report and opinion thereon by independent public accountants of national standing selected by the
Company's Board of Directors. This subsection (b) shall terminate on the earliest of (i) the Qualifying Initial Offering (ii) the date the Company is subject to the reporting
requirements of Sections 13 or 15 of the Exchange Act; or (iii) the date when there are no Registrable Securities outstanding. 

        (c)   The Company will furnish each Major Investor, within forty-five (45) days after the end of the first,
second and third quarterly accounting periods in each fiscal year of the Company, an unaudited balance sheet of the Company as of the end of each such quarterly period and unaudited statements of
(i) income and (ii) cash flow of the Company for each such period and, in the case of the first, second and third quarterly periods, for the period from the beginning of the current
fiscal year to the end of such quarterly period, setting forth in each case in comparative form the figures for the corresponding period of the previous fiscal year, with a variation analysis setting
forth in each case in comparative form the figures for the budget in respect of such period, all in reasonable detail and prepared in accordance with generally accepted accounting principles applied
on a basis consistent with that of preceding periods, with the exception that no notes need be attached to such statements and year end audit adjustments may not have been made. This subsection
(c) shall terminate on the earlier of (i) the Qualifying Initial Offering, (ii) the date that the Company is subject to the reporting requirements of Sections 13 or 15 of the
Exchange Act or (iii) the date when there are no Registrable Securities outstanding. 

        (d)   The Company will furnish each Major Investor: (i) at least fifteen (15) days prior to the beginning of each
fiscal year, an annual budget and operating plans for such fiscal year (and, as soon as available, any subsequent revisions thereto); and (ii) as soon as practicable after the end of each month
(except for months representing the end of an annual or quarterly period (which are governed by Sections 3.1(b) and (c) above)), and in any event within twenty (20) days thereafter, a
balance sheet of the Company as of the end of each such month, and a statement of income and a statement of cash flows of the Company for such month and for the current fiscal year to date, prepared
in accordance with generally accepted accounting principles consistently applied, with the exception that no notes need be attached to such statements and year-end audit adjustments may
not have been made. Such monthly statements shall also set forth in each case in comparative form the figures for the corresponding period of the previous fiscal year and a variation analysis setting
forth in each case in comparative form the figures for the budget in respect of such period. 

        (e)   Notwithstanding the foregoing, the Company shall not be required to provide any information that the Company's Board of
Directors determines to be competitively sensitive 

17

 

information
to any Holder that is a competitor or potential competitor to the Company, as determined in the sole discretion of the Company's Board of Directors. 

        3.2    Inspection Rights.    Any Major Investor shall have the right
to visit and inspect any of the properties of the Company or any of its subsidiaries, and to discuss the affairs, finances and accounts of the Company or any of its subsidiaries with its officers, and
to review such information as is reasonably requested all at such reasonable times and as often as may be reasonably requested. This Section 3.2 shall terminate on the earlier of (i) the
Qualifying Initial Offering, (ii) the date that the Company is subject to the reporting requirements of Sections 13 or 15 of the Exchange Act or (iii) the date when there are no
Registrable Securities outstanding. Notwithstanding the foregoing, the Company shall not be required to provide any information that the Company's Board of Directors determines to be competitively
sensitive information to any Major Investor that is a competitor or potential competitor to the Company, as determined in the sole discretion of the Company's Board of Directors. 

        3.3    Confidentiality of Records; Use of Names.    

        (a)   Each Investor agrees to use, and to use its best efforts to insure that its authorized representatives use, the same
degree of care as such Investor uses to protect its own confidential information to keep confidential any information furnished to it which the Company identifies as being confidential or proprietary
(so long as such information is not in the public domain), except that such Investor may disclose such proprietary or confidential information to any partner, employee, adviser, subsidiary, parent or
grantor or beneficiary of any Investor that is a trust, of such Investor for the purpose of evaluating its investment in the Company as long as such partner, employee, adviser, subsidiary, parent,
grantor or beneficiary is advised of the confidentiality provisions of this Section 3.3. The provisions of this Section 3.3 shall not apply to information which: (a) is now, or
hereafter becomes, through no act or
failure to act on the part of such Investor, generally known or available; (b) is known by such Investor at the time of receiving such information, as evidenced by its written records;
(c) is hereafter furnished to such Investor by a third party, as a matter of right and without restriction on disclosure; or (d) is independently developed by the receiving party,
without knowledge of, and without the aid, application or use of, the disclosing party's confidential information. In addition, the provisions of this Section 3.3 shall not apply to the extent
that disclosure of confidential information is compelled by law, rule, regulation or court order. 

        (b)   Neither the Company nor any of its Affiliates shall issue any press release, notice or other publication using the name
of any Series E Investor without the prior written consent of such Investor. Any Series E Investor may disclose its investment in the Company and include the Company's name and a brief
description of the Company's business in its securities offering materials. 

        3.4    Reservation of Common Stock.    The Company will at all times
reserve and keep available, solely for issuance and delivery upon the conversion of the Preferred Stock, all Common Stock issuable from time to time upon such conversion. 

        3.5    Stock Vesting.    Except as otherwise provided in agreements in
effect on the date hereof, unless otherwise approved by the Board of Directors, all stock options, other stock equivalents and restricted stock issued after the date of this Agreement to employees,
directors, consultants and other service providers shall be subject to vesting over four years as follows: (a) twenty-five percent (25%) of such stock shall vest at the end of the
first year following the earlier of the date of issuance or such person's services commencement date with the Company, and (b) seventy-five percent (75%) of such stock shall vest in
equal monthly installments over the remaining three (3) years. With respect to any shares of stock purchased by any such person, the Company's repurchase option shall provide that upon such
person's termination of employment or service with the Company, with or without cause, the 

18

 

Company
or its assignee (to the extent permissible under applicable securities laws and other laws) shall have the option to purchase at cost any unvested shares of stock held by such person. 

        3.6    Proprietary Information and Inventions Agreement.    The
Company shall require all officers and employees to execute and deliver a Proprietary Information and Inventions Agreement substantially in the form attached to the Series E Agreement. 

        3.7    Directors' Expenses.    The Company shall reimburse reasonable
costs incurred by non-employee directors of the Company and any representative referred to in Section 3.9 below in attending meetings of the Company's Board of Directors (including
any meeting of the committees of the Board of Directors) and any other meetings or events attended at the request of the Company. 

        3.8    Qualified Small Business.    For so long as any of the Shares
are held by an Investor (or a transferee in whose hands such Shares are eligible to qualify as "Qualified Small Business Stock" as defined in
Section 1202(c) of the Internal Revenue Code of 1986, as amended (the "Code")), the Company will use its reasonable efforts to comply with the
reporting and record keeping requirements of Section 1202 of the Code, any regulations promulgated thereunder and any similar state laws and regulations. 

        3.9    Observation Rights.    The Company shall allow one
representative designated by each of (a) Prospect Venture Partners, LP, (b) so long as no partner, employee or other Affiliate of Merrill Lynch Ventures L.P. 2001
("MLV") is a member of the Company's Board of Directors, MLV, to attend all meetings of the Company's Board of Directors in a nonvoting capacity, and in
connection therewith, the Company shall give such representative copies of all notices, minutes, consents and other materials, financial or otherwise, which the Company provides to its Board of
Directors at the same time it provides such materials to the Board of Directors; provided, however, that the Company reserves the right to exclude such
representative from access to any material or meeting or portion thereof if the Company believes upon advice of counsel that such exclusion is reasonably necessary to preserve the attorney-client
privilege, to protect confidential proprietary information or for other similar reasons. 

        3.10    Directors' and Officers' Insurance.    The Company will use
its reasonable best efforts to obtain, on or prior to ninety (90) days from the date hereof, and maintain in full force and effect, directors' and officers' insurance acceptable to the
Company's Board of Directors. 

        3.11    Agreements with Investors.    The Company covenants and agrees
that, in the event it enters into any agreement with an Investor in connection with the sale and issuance of Series E Preferred pursuant to the Series E Agreement (other than the
Series E Agreement or the "Related Agreements" as defined therein), the Company shall promptly provide MLV and Rho Management Trust I
("Rho") with a copy of such agreement (a "Side Agreement"). MLV and Rho shall have the right,
exercisable by written notice to the Company within thirty (30) days after receipt of such Side Letter, to elect to enter into a similar agreement(s) with the Company on terms and conditions at
least as favorable to Rho and MLV, as applicable, as those agreed to by the Company and the Investor that is a party to such Side Agreement; provided,
however, that the terms and conditions of such Side Agreement are reasonably applicable to the circumstances of MLV and/or Rho, as applicable, including their respective
Affiliates, and their investment in the Company. 

        3.12    Additional Shares.    If at any time prior to the date that is
eighteen (18) months after the date of this Agreement, the Company issues or reserves for issuance more than three million seven hundred ninety thousand (3,790,000) shares of Common Stock, in
the aggregate, in connection with the granting of options or other similar equity incentives to employees, officers or directors of, or consultants or advisors to, the Company or any subsidiary
pursuant to any stock purchase or stock option plans, including, but not limited to, (i) the Company's 1999 Equity Incentive Plan or any other similar arrangement, and (ii) any options
previously granted thereunder and shares of Common Stock issued upon exercise of such options or upon sales of restricted stock thereunder, then the Company 

19

 

will
use its best efforts to ensure that: (a) the Original Purchase Price of the Series E Preferred (as defined in the Restated Charter) shall be reduced, effective as of the opening of
business on the business day immediately following such issue or reservation of shares, to an amount (the "Reduced Original Purchase Price") determined by dividing sixty million dollars ($60,000,000)
by the sum of (1) twenty million six hundred sixty six thousand four hundred sixty (20,666,460), (2) the number of shares so issued or reserved for issuance in excess of 3,790,000 and
(3) any additional shares issuable to the holders of Series A Preferred, Series B Preferred, Series C Preferred or Series D Preferred pursuant to
Section 4(i) of the Restated Charter in connection with the sale and issuance of the Series E Preferred (including the issuance of additional shares of Series E Preferred
pursuant to the following subsection (b)); and (b) the Company shall issue to each Series E Investor an additional number of shares of Series E Preferred (rounded to the nearest
whole share) determined by subtracting (1) the number of share of Series E Preferred set forth opposite such Series E Investor's name on Exhibit A to the Series E
Agreement from (2) the number of shares of Series E Preferred determined by dividing the total purchase price paid by such Series E Investor for the Series E Preferred by
the Reduced Original Purchase Price. For the purposes of subsection (a)(3) above, the number of additional shares issuable to the holders of Series A Preferred, Series B Preferred,
Series C Preferred or Series D Preferred pursuant to Section 4(i) of the Restated Charter shall be calculated as if such subsection (a)(3) were not included in this
Section 3.12. 

        3.13    Termination of Covenants.    All covenants of the Company
contained in Section 3 of this Agreement shall expire and terminate as to each Investor upon the earlier of (i) the effective date of the registration statement pertaining to the
Qualifying Initial Offering or (ii) upon consummation of (a) a sale, lease or other disposition of all or substantially all of the assets of the Company or (b) a Change in
Control; provided, however, that this Section 3.13 shall not apply to a merger effected exclusively for the purpose of changing the domicile of
the Company. 

        3.14    Use of Proceeds.    The Company shall use the proceeds
received upon the sale of the Series E Preferred for general working capital purposes only. 

        3.15    Assignment of Incyte Agreement.    The Company agrees that it
will not assign the Collaborative Research and License Agreement between the Company and Incyte Genomics, Inc., dated December 29, 2000 and as amended October 24, 2001, under
Section 10.3(ii) thereof, unless such assignment is approved by the Company's Board of Directors, including the "Series E Director" (as defined in the Stockholder Agreement). 

SECTION 4.    ADDITIONAL RIGHTS OF FIRST REFUSAL    

        4.1    Subsequent Offerings.    Subject to Section 4.7 below,
each Major Investor shall have a right of first refusal to purchase its pro rata share of all Equity Securities, as defined below, that the Company may,
from time to time, propose to sell and issue after the date of this Agreement, other than the Equity Securities excluded by Section 4.6 hereof. Each Major Investor's pro
rata share is equal to the ratio of (a) the number of shares of the Company's Common Stock (including all shares of Common Stock issued or issuable upon conversion of
the Shares) of which such Major Investor is deemed to be a holder immediately prior to the issuance of such Equity Securities to (b) the total number of shares of the Company's outstanding
Common Stock (including all shares of Common Stock issued or issuable upon conversion of the Shares or upon the exercise of any outstanding warrants or options) immediately prior to the issuance of
the Equity Securities. The term "Equity Securities" shall mean (i) any Common Stock, Preferred Stock or other security of the Company,
(ii) any security convertible, with or without consideration, into any Common Stock, Preferred Stock or other security (including any option to purchase such a convertible security),
(iii) any option or other security carrying any warrant or right to subscribe to or purchase any Common Stock, Preferred Stock or other security or (iv) any such warrant or right (in
each case, as adjusted for any stock dividends, combinations, splits, recapitalizations and the like). 

20

 

        4.2    Exercise of Rights.    If the Company proposes to issue any
Equity Securities other than Equity Securities referred to in Section 4.6, it shall give each Major Investor written notice of its intention, describing the Equity Securities, the anticipated
price and the terms and conditions upon which the Company proposes to issue the same. Each Major Investor shall have fifteen (15) days from the giving of such notice to agree to purchase its  pro rata share of the Equity Securities for the price and upon the terms and conditions specified in the notice by giving written notice to the Company
and stating therein the quantity of Equity Securities to be purchased. If consented to by holders of at least fifty percent (50%) of the Registrable Securities held by the Major Investors then
outstanding, no further such notice shall be required with respect to any changes to the terms specified in the original notice (except to the extent that any such issuance of Equity Securities would
constitute, or that such changes would cause such issuance of Equity Securities to become or cease to be, a Dilutive Issuance, as such term is defined in the Restated Charter). Notwithstanding the
foregoing, the Company shall not be required to offer or sell such Equity Securities to any Major Investor who would cause the Company to be in violation of applicable federal securities laws by
virtue of such offer or sale. 

        4.3    Issuance of Equity Securities to Other Persons.    If not all
of the Major Investors elect to purchase their pro rata share of the Equity Securities, then the Company shall promptly notify in writing the Major
Investors who do so elect and shall offer such Major Investors the right to acquire their pro rata share of such unsubscribed shares. The Major
Investors shall have five (5) days after receipt of such notice to notify the Company of its election to purchase all or a portion thereof of the unsubscribed shares. If the Major Investors
fail to exercise in full the rights of first refusal, the Company shall have ninety (90) days thereafter to sell the Equity Securities in respect of which the Major Investor's rights were not
exercised, at a price and upon general terms and conditions no more favorable to the
purchasers thereof than specified in the Company's notice to the Major Investors pursuant to Section 4.2 hereof. If the Company has not sold such Equity Securities within ninety
(90) days of the notice provided pursuant to Section 4.2, the Company shall not thereafter issue or sell any Equity Securities, without first offering such securities to the Major
Investors in the manner provided above. 

        4.4    Termination and Waiver of Rights of First Refusal.    The
rights of first refusal established by this Section 4 shall not apply to, and shall terminate upon earlier of (i) the effective date of the registration statement pertaining to the
Company's Qualifying Initial Offering or (ii) a Change in Control. The rights of first refusal established by this Section 4 may be amended, or any provision waived, with the written
consent of Major Investors holding at least sixty-seven percent (67%) of the Registrable Securities held by all Major Investors, or as permitted by Section 5.6. 

        4.5    Transfer of Rights of First Refusal.    The rights of first
refusal of each Major Investor under this Section 4 may be transferred to the same parties, subject to the same restrictions as any transfer of registration rights pursuant to
Section 2.10. 

        4.6    Excluded Securities.    The rights of first refusal established
by this Section 4 shall have no application to any of the following Equity Securities: 

        (a)   shares of Common Stock and/or options, warrants or other Common Stock purchase rights, and the Common Stock issued
pursuant to such options, warrants or other rights issued or to be issued after the Original Issue Date (as defined in the Company's Restated Charter) to employees, officers or directors of, or
consultants or advisors to, the Company or any subsidiary pursuant to stock purchase or stock option plans or other arrangements that are approved by the Board of Directors; 

        (b)   any Equity Securities issued pursuant to any rights or agreements outstanding as of the date hereof or pursuant to the
exercise of options, warrants or convertible securities outstanding as of the date hereof; 

21

 

        (c)   any Equity Securities issued pursuant to a merger, consolidation, acquisition or similar business combination approved by
at least a majority of the Directors who are not then employees of the Company; 

        (d)   any Equity Securities issued in connection with any stock split, stock dividend, combination or recapitalization by the
Company; 

        (e)   any Equity Securities issued upon conversion of the Preferred Stock of the Company; 

        (f)    subject to Section 2.3 of the Series E Agreement, any Series E Preferred issued pursuant to the
Series E Agreement; 

        (g)   any Equity Securities issued pursuant to any equipment or real estate leasing or loan arrangement or debt financing from
an equipment lessor, landlord, bank, financial or lending institution or similar entity approved by at least a majority of the Directors who are not then employees of the Company and the primary
purpose of which is other than to obtain financing for the Company through the issuance of equity securities; 

        (h)   any Equity Securities that are issued by the Company pursuant to a registration statement filed under the Securities Act; 

        (i)    any Equity Securities issued in connection with strategic transactions approved by a majority of the Directors who are
not then employees of the Company, including (1) joint ventures, manufacturing, marketing or distribution arrangements, or (2) technology license, transfer or research and development
arrangements, or (3) any other transaction involving corporate partners the primary purpose of which is other than to obtain financing for the Company through the issuance of equity securities; 

        (j)    any Equity Securities issued pursuant to Section 3.12; 

        (k)   stock issued pursuant to any such rights granted or agreements entered into after the date of this Agreement so long as
the rights of first refusal established by this Section 4 were complied with in connection with the initial sale or grant by the Company of such rights or agreements. 

        4.7    Exclusion of Series C and Series D
Investor.    Notwithstanding anything to the contrary herein, neither the Series C Investor, the Series D Investor nor their transferees shall be
entitled to the right of first refusal or any other right provided by this Section 4. 

SECTION 5.    MISCELLANEOUS    

        5.1    Aggregation.    All Equity Securities held or acquired by an
Investor and its Affiliates shall be aggregated together for purposes of determining the availability of any rights under this Agreement. 

        5.2    Governing Law.    This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements among California residents entered into and to be performed entirely within California. 

        5.3    Survival.    The representations, warranties, covenants and
agreements made herein shall survive any investigation made by any Holder and the closing of the transactions contemplated hereby. All statements as to factual matters contained in any certificate or
other instrument delivered by or on behalf of the Company pursuant hereto in connection with the transactions contemplated hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument. 

        5.4    Successors and Assigns.    Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto and shall inure to the
benefit of and be enforceable by each person who shall be a holder of Registrable Securities from time to time; provided, however, that prior to the 

22

 

receipt
by the Company of adequate written notice of the transfer of any Registrable Securities specifying the full name and address of the transferee, the Company may deem and treat the person listed
as the holder of such shares in its records as the absolute owner and holder of such shares for all purposes, including the payment of dividends or any redemption price. 

        5.5    Entire Agreement.    This Agreement, the Exhibits and Schedules
hereto, the Series E Agreement, the Co-Sale Agreement, the Stockholder Agreement and the other documents delivered pursuant thereto constitute the full and entire understanding and
agreement between the parties with regard to the subject matter hereof and supersede any prior agreements relating thereto, including without limitation the Prior Rights Agreement, which is hereby
terminated and of no further force or effect, and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set
forth herein and therein. The Company and holders of sixty-seven percent (67%) of the Registrable Securities (as defined in the Prior Rights Agreement) hereby agree, as evidenced by their signatures
hereto, that all rights granted and covenants made under the Prior Rights Agreement are hereby waived, released and terminated in their entirety and shall have no further force or effect whatsoever,
including the right of first refusal set forth in Section 4 of the Prior Rights Agreement, and such holders hereby further agree and acknowledge that the right of first refusal set forth in
Section 4 of the Prior Rights Agreement did not apply to and is hereby waived with respect to the Series E Preferred and the Series E Preferred issued pursuant to the
Series E Agreement. 

        5.6    Severability.    In the event one or more of the provisions of
this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 

        5.7    Amendment and Waiver.    

        (a)   Except as otherwise expressly provided herein, this Agreement may be amended or modified only upon the written consent of
(i) the Company, (ii) the holders of at least sixty-seven percent (67%) of the Registrable Securities, and (iii) the holders of at least sixty-seven percent (67%) in interest of
the Series E Preferred. 

        (b)   Except as otherwise expressly provided herein, the obligations of the Company and the rights of the Holders under this
Agreement may be waived only with the written consent of the holders of at least sixty-seven percent (67%) of the Registrable Securities. 

        Notwithstanding
the foregoing, this Agreement may be amended with only the written consent of the Company to include additional purchasers of Shares as "Holders" and parties hereto. 

        5.8    Delays or Omissions.    It is agreed that no delay or omission
to exercise any right, power, or remedy accruing to any Holder, upon any breach, default or noncompliance of the Company under this Agreement shall impair any such right, power, or remedy, nor shall
it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring. It is further agreed
that any waiver, permit, consent, or approval of any kind or character on any Holder's part of any breach, default or noncompliance under the Agreement or any waiver on such Holder's part of any
provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, by law, or
otherwise afforded to Holders, shall be cumulative and not alternative. 

        5.9    Notices.    All notices required or permitted hereunder shall
be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed telex or facsimile if sent during normal business
hours of the recipient; if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, 

23

 

postage
prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications
shall be sent to the party to be notified at the address as set forth on the signature pages hereof or Exhibit A hereto or at such other address as such party may designate by ten
(10) days advance written notice to the other parties hereto. 

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

        5.11    Titles and Subtitles.    The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. 

        5.12    Counterparts.    This Agreement may be executed in any number
of counterparts (which may be delivered by facsimile), each of which shall be an original, but all of which together shall constitute one instrument. 

24

        IN WITNESS WHEREOF, the parties hereto have executed this FOURTH AMENDED AND RESTATED INVESTOR RIGHTS
AGREEMENT as of the date set forth in the first paragraph hereof. 

	COMPANY:	 	INVESTOR:
	
SENOMYX, INC.	
 	

THE NORTH AMERICAN NUTRITION

& AGRIBUSINESS FUND, L.P.
	

By:	

/s/ PAUL A. GRAYSON
 Paul A. Grayson,

Chief Executive Officer	
 	

By:

Its:	

NANA Management, L.P.

General Partner
	 	 	 	By:

Its:	Bay City Capital LLC

Advisor and Attorney-in-Fact
	

 	

 	
 	

By:	

/s/ LORI M. ROBSON

	 	 	 	Name:	Lori M. Robson

	 	 	 	Title:	Principal

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTORS:
	

 	
 	
DOMAIN PARTNERS IV, L.P.
	

 	
 	

By:	

One Palmer Square Associates IV, L.L.C.
	 	 	Its:	General Partner
	

 	
 	

By:	

/s/ JAMES C. BLAIR
 James C. Blair

Managing Member
	

 	
 	
DP IV ASSOCIATES, L.P.
	

 	
 	

By:	

One Palmer Square Associates IV, L.L.C.
	 	 	Its:	General Partner
	

 	
 	

By:	

/s/ JAMES C. BLAIR
 James C. Blair

Managing Member

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
PAUL A. GRAYSON
	

 	
 	

/s/ PAUL A. GRAYSON

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
KEVIN J. KINSELLA, AS TRUSTEE OF THE

KEVIN J. KINSELLA DECLARATION OF

TRUST OF NOVEMBER 2, 1994
	

 	
 	

By:	

/s/ KEVIN J. KINSELLA

	 	 	Name:	Kevin J. Kinsella
	 	 	Title:	Trustee

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTORS:
	

 	
 	
KINGSBURY CAPITAL PARTNERS L.P. III
	

 	
 	

By:	

/s/ TIMOTHY J. WOLLAEGER

	 	 	Name:	Timothy J. Wollaeger
	 	 	Title:	General Partner
	

 	
 	
KINGSBURY CAPITAL PARTNERS L.P. IV
	

 	
 	

By:	

/s/ TIMOTHY J. WOLLAEGER

	 	 	Name:	Timothy J. Wollaeger
	 	 	Title:	General Partner

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTORS:
	

 	
 	

ANDREA STRYER
	

 	
 	

/s/ ANDREA STRYER

	

 	
 	
LUBERT STRYER
	

 	
 	

/s/ LUBERT STRYER

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
RICHARD L. SCOTT REVOCABLE TRUST
	

 	
 	

By:	

/s/ RICHARD L. SCOTT

	 	 	Name:	Richard L. Scott

	 	 	Title:	Trustee

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTORS:
	

 	
 	
OSCAR L. TANG
	

 	
 	

/s/ OSCAR L. TANG

	

 	
 	
GRANTOR TRUST FOR TRACY L. TANG
	

 	
 	

/s/ OSCAR L. TANG

	 	 	By:	Oscar L. Tang, Trustee
	

 	
 	
GRANTOR TRUST FOR DANA E. TANG
	

 	
 	

/s/ OSCAR L. TANG

	 	 	By:	Oscar L. Tang, Trustee
	

 	
 	
GRANTOR TRUST FOR KRISTIN A. TANG
	

 	
 	

/s/ OSCAR L. TANG

	 	 	By:	Oscar L. Tang, Trustee
	

 	
 	
MR. AND MRS. KEVIN TANG
	

 	
 	

/s/ KEVIN TANG

	

 	
 	

[ILLEGIBLE TEXT]

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	

CHARLES ZUCKER
	

 	
 	

/s/ CHARLES ZUCKER

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTORS:
	

 	
 	
ROGER TSIEN
	

 	
 	

/s/ ROGER TSIEN

	

 	
 	
WENDY GLOBE TSIEN
	

 	
 	

/s/ WENDY GLOBE TSIEN

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
PROSPECT VENTURE PARTNERS, LP
	

 	
 	

By:	

/s/ DAVID SCHNELL
 David Schnell, MD

Managing Partner

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
RHO MANAGEMENT TRUST I
	

 	
 	

By:	

Rho Capital Partners, Inc.
	 	 	 	as Investment Adviser
	

 	
 	

By:	

/s/ MARK LESCHLY

	 	 	Name:	Mark Leschly

	 	 	Title:	Managing Director

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
STELIOS PAPADOPOULOS
	

 	
 	

/s/  STELIOS PAPADOPOULOS      

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
JORGE E. HIRSCH
	

 	
 	

/s/  JORGE E. HIRSCH      

	

 	
 	
ARIEL M. HIRSCH
	

 	
 	

/s/  ARIEL M. HIRSCH      

	

 	
 	
RICARDO D. HIRSCH
	

 	
 	

/s/  RICARDO D. HIRSCH      

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
DAVID MARINO
	

 	
 	

/s/  DAVID MARINO      

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
SPARKS PARTNERS
	

 	
 	

By:	

/s/  JOHN H. BROOKS      

	 	 	Name:	John H. Brooks

	 	 	Title:	Secretary

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTORS:
	

 	
 	
FOUR PARTNERS
	

 	
 	

By:	

/s/  TOM TISCH      

	 	 	Name:	Tom Tisch

	 	 	Title:	Trustee

	

 	
 	
BAKER TISCH INVESTMENTS LLC
	

 	
 	

By:	

/s/  JULIAN C. BAKER      

	 	 	Name:	Julian C. Baker

	 	 	Title:	Managing Member

	

 	
 	
FBB ASSOCIATES
	

 	
 	

By:	

/s/  JULIAN C. BAKER      

	 	 	Name:	Julian C. Baker

	 	 	Title:	Partner

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
ZAFFARONI REVOCABLE TRUST UTD 1-24-86

ALEJANDRO ZAFFARONI—TRUSTEE
	

 	
 	

/s/  ALEJANDRO ZAFFARONI      

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
ALEXANDRIA REAL ESTATE EQUITIES, L.P.
	

 	
 	

By:	

ARE-QRS CORP., a Maryland corporation, general partner

	

 	
 	

By:	

/s/  LAURIE A. ALLEN      

	 	 	Name:	Laurie A. Allen

	 	 	Title:	Senior Vice President, Business Development & Legal Affairs

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
AURORA BIOSCIENCES CORPORATION
	

 	
 	

By:	

/s/  HARRY STYLLI      

	 	 	Name:	Harry Stylli

	 	 	Title:	President

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
INCYTE GENOMICS, INC.
	

 	
 	

By:	

/s/  ROY A. WHITFIELD      

	 	 	Name:	Roy A. Whitfield

	 	 	Title:	Chief Executive Officer

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
MERRILL LYNCH VENTURES L.P. 2001
	

 	
 	

By:	

Merrill Lynch Ventures, LLC

its General Partner
	

 	
 	

By:	

/s/  EDWARD J. HIGGINS      

	 	 	Name:	Edward J. Higgins

	 	 	Title:	Vice President

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
EXCELSIOR VENTURE PARTNERS III, LLC
	

 	
 	

By:	

/s/  DAVID I. FENN      

	 	 	Name:	David I. Fenn

	 	 	Title:	President

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	Solely for the purposes of the Designated Sections:
	

 	
 	
SILICON VALLEY BANCSHARES
	

 	
 	

By:	

/s/  TODD HARRIS      

	 	 	Name:	Todd Harris

	 	 	Title:	Financial Planning Director

FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

  

EXHIBIT A  

 
  SCHEDULE OF INVESTORS    
    

	Name & Address
 

	The North American Nutrition and Agribusiness Fund, L.P.
	 	Bay City Capital LLC

750 Battery Street, Suite 600

San Francisco, CA 94111

(415) 835-9346

(415) 837-0503—Fax

attn: Lori Robson, Ph.D.
	
Domain Partners IV, L.P.
	 	Jim Blair

One Palmer Square

Princeton, NJ 08542

(609) 683-5656

(609) 683-9789—Fax

cc: Lisa Kraeutler
	
Prospect Venture Partners, LP
	 	David Schnell, M.D.

435 Tasso Street, Suite 200

Palo Alto, CA 94305

(650) 327-8800

(650) 324-8838—Fax
	
Kingsbury Capital Partners L.P. III
	 	Tim Wollaeger

3655 Nobel Drive, Suite 490

San Diego, CA 92122

(858) 677-0600

(858) 677-0800—Fax
	
Kingsbury Capital Partners L.P. IV
	 	Tim Wollaeger

3655 Nobel Drive, Suite 490

San Diego, CA 92122

(858) 677-0600

(858) 677-0800—Fax
	 

A-1

 

	
Rho Management Trust I
	 	Mark Leschly

152 West 57th Street, 23rd Floor

New York, NY 10019

(212) 751-6677 ext. 414

(212) 751-3613—Fax

cc: Audrey M. Roth, Esq.

Goodwin Procter LLP

Exchange Place

Boston, Massachusetts 02109

(617) 510-1027

(617) 523-1231—Fax
	
Mr. And Mrs. Kevin Tang
	 	11 Riverside Drive, Apt. 12FW

New York, NY 10023

(212) 501-9109

(212) 471-4943—Fax
	
Kevin J. Kinsella, as Trustee of the Kevin J. Kinsella Declaration of Trust of November 2, 1994
	 	1735 Castellana Road

La Jolla, CA 92037

(858) 459-6667

(858) 623-3395—Fax
	
Richard L. Scott Revocable Trust
	 	c/o Richard L. Scott Investments, LLC

100 First Stamford Place, Suite 625

Stamford, CT 06902

(203) 602-2290

(203) 602-7758—Fax
	
Lubert Stryer, M.D.
	 	843 Sonoma Terrace

Stanford, CA 94305

(650) 723-5358

(650) 498-5351—Fax
	
Oscar Tang
	 	c/o Gwen Winkhaus

Reich & Tang

600 Fifth Avenue

New York, NY 10020

(212) 830-5303

(212) 265-9752—Fax
	
Tracy L. Tang
	 	c/o Gwen Winkhaus

Reich & Tang

600 Fifth Avenue

New York, NY 10020

(212) 830-5303

(212) 265-9752—Fax
	 

A-2

 

	
Dana E. Tang
	 	c/o Gwen Winkhaus

Reich & Tang

600 Fifth Avenue

New York, NY 10020

(212) 830-5303

(212) 265-9752—Fax
	
Kristin A. Tang
	 	c/o Gwen Winkhaus

Reich & Tang

600 Fifth Avenue

New York, NY 10020

(212) 830-5303

(212) 265-9752—Fax
	
Paul A. Grayson
	 	C/O Senomyx, Inc.

11099 North Torrey Pines Road

La Jolla, CA 92037

(858) 646-8301

(858) 404-0750—Fax
	
Stelios Papadopoulos
	 	3 Somerset Drive South

Great Neck, NY 11020

(516) 487-5654

(516) 487-0245—Fax
	
Charles S. Zuker
	 	UCSD Cellular & Molecular Medicine

West, Room 355

9500 Gilman Drive

La Jolla, CA 92037

(858) 534-5528

(858) 534-8510—Fax
	
DP IV Associates, L.P.
	 	Jim Blair

One Palmer Square

Princeton, NJ 08542

(609) 683-5656

(609) 683-9789—Fax

cc: Lisa Kraeutler
	
Andrea Stryer
	 	843 Sonoma Terrace

Stanford, CA 94305

(650) 858-2858

(650) 498-5351—Fax
	 

A-3

 

	
Jorge E. Hirsch
	 	4058 Riverton Place

San Diego, CA 92130

(858) 755-2663

(858) 792-1728—Fax
	
Roger Tsien
	 	8535 Nottingham Place

La Jolla, CA 92037

(858) 534-4891

(858) 534-5270—Fax
	
Wendy Globe Tsien
	 	8535 Nottingham Place

La Jolla, CA 92037

(858) 534-4891

(858) 534-5270—Fax
	
David Marino
	 	754 La Canada

La Jolla, CA 92037

(619) 238-4393

(619) 238-1025—Fax
	
Sparks Partners
	 	John Brooks, Secretary

4146 Roland Avenue

Baltimore, MD 21211

(410) 235-3217

(410) 235-4650—Fax

cc: Hugh Rienhoff, Jr., M.D.

(650) 934-9300

(650) 934-9376—Fax
	
Zaffaroni Revocable Trust UTD 1-24-86

Alejandro Zaffaroni—Trustee
	 	Technofyn Associates LLC

4005 Miranda Avenue, Suite 180

Palo Alto, CA 94304

Attn: Alejandro Zaffaroni /

         Gonzalo M. Silveira

(650) 496-2258

(650) 564-7804—Fax

cc: Julian N. Stern, Esq.

Heller Ehrman White & McAuliffe LLP

525 University Avenue

Palo Alto, CA 94301

(650) 324-7000

(650) 324-0638—Fax
	 

A-4

 

	
Four Partners
	 	Felix and Geoffrey Baker

667 Madison Ave., 7th Floor

New York, NY 10021-8087

(212) 521-2865

(212) 521-2915—Fax
	
Baker Tisch Investments LLC
	 	Felix and Julian Baker

667 Madison Ave., 7th Floor

New York, NY 10021-8087

(212) 521-2865

(212) 521-2915—Fax
	
FBB Associates
	 	Felix and Geoffrey Baker

667 Madison Ave., 7th Floor

New York, NY 10021-8087

(212) 521-2865

(212) 521-2915—Fax
	
Alexandria Real Estate Equities, L.P.
	 	Joel Marcus, CEO

135 N. Los Robles Avenue

Suite 250

Pasadena, CA 91101

(626) 578-9693

(626) 578-0896—Fax

cc: Pete Nelson, CFO
	
Aurora Biosciences Corporation
	 	11010 Torreyana Road

San Diego, CA 92121

(858) 404-6600

(858) 404-6743—Fax

Attn: General Counsel
	
Incyte Genomics, Inc.
	 	3160 Porter Drive

Palo Alto, CA 94304

(650) 855-0555

(650) 845-4166—Fax

Attn: Chief Executive Officer
	
Merrill Lynch Ventures L.P. 2001
	 	95 Green Street, 7th Floor

Jersey City, NJ 07302

(201) 671-0400

(201) 671-4527—Fax

Attn: Robert F. Tully
	
Excelsior Venture Partners III, LLC
	 	c/o U.S. Trust Company

225 High Ridge Road

Stamford, CT 06905

(203) 352-4400

A-5

  

 
 

SENOMYX, INC.    
    
    FIRST AMENDMENT TO
  FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT    
    

        THIS FIRST AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the "First
Amendment") is made as of February 27, 2002 by and among SENOMYX, INC., a Delaware corporation (the "Company"),
and the persons and entities whose names are set forth on Exhibit A attached hereto (collectively, the "Investors"). Capitalized terms used but
not defined herein shall have the meaning assigned to them in the Investor Rights Agreement (as defined below). 

 
 

RECITALS    
    

        WHEREAS, the Company and the Investors entered into that certain Fourth Amended and Restated Investor Rights
Agreement dated as of November 14, 2001 (the "Investor Rights Agreement"); and 

        WHEREAS, the Company and the Investors desire to amend the Investor Rights Agreement as provided below. 

        NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and conditions set forth below, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties to this First Amendment hereby agree as follows: 

 
 

AMENDMENT    
    

        1.    In the introductory paragraph of the Investor Rights Agreement, the phrase ", as such may be amended from time to time in
accordance therewith" is added after "November 14, 2001" and prior to "(the "Series E Agreement")". 

        2.    The second recital of the Investor Rights Agreement is hereby amended and restated in its entirety to read as follows: 

        "WHEREAS, the Company proposes to sell and issue up to twelve million seven hundred three thousand fifteen (12,703,015) shares of its
Series E Preferred to the Series E Investors pursuant to the Series E Agreement; and" 

        3.    Section 3.9 of the Investor Rights Agreement is hereby amended and restated in its entirety to read as follows: 

        "3.9    Observation Rights.    The Company shall allow one
representative designated by each of (a) Prospect Venture Partners, LP, (b) so long as no partner, employee or other Affiliate of Merrill Lynch Ventures L.P. 2001
("MLV") is a member of the Company's Board of Directors, MLV, and (c) H&Q Healthcare Investors and H&Q Life Sciences, acting together, to attend
all meetings of the Company's Board of Directors in a nonvoting capacity, and in connection therewith, the Company shall give each of such representatives copies of all notices, minutes, consents and
other materials, financial or otherwise, which the Company provides to its Board of Directors at the same time it provides such materials to the Board of Directors; provided,
however, that the Company reserves the right to exclude such representatives from access to any material or meeting or portion thereof if the Company believes upon advice of
counsel that such exclusion is reasonably necessary to preserve the attorney-client privilege, to protect confidential proprietary information or for other similar reasons. 

        4.    Section 4.6(f) of the Investor Rights Agreement is hereby amended and restated in its entirety to read as follows: 

        "(f)    any Series E Preferred;" 

1

 

        5.    Except as modified by this First Amendment, the Investor Rights Agreement shall remain in full force and effect in
accordance with its terms. This First Amendment shall be deemed an amendment to the Investor Rights Agreement and shall become effective when executed and delivered by the Company, holders of at least
sixty-seven percent (67%) of the Registrable Securities, and holders of at least sixty-seven percent (67%) in interest of the Series E Preferred, as provided under Section 5.7 of the
Investor Rights Agreement. 

2

        The foregoing First Amendment is hereby executed as of the date first above written. 

	COMPANY:

  

SENOMYX, INC.	 	INVESTOR:

  

THE NORTH AMERICAN NUTRITION &

AGRIBUSINESS FUND, L.P.
	

By:	

/s/  PAUL A. GRAYSON      
 Paul A. Grayson,

Chief Executive Officer	
 	

By:

Its:	

NANA Management, L.P.

General Partner
	

 	

Address:

11099 N. Torrey Pines Road

Suite 160	
 	

By:

Its:	

Bay City Capital LLC

Advisor and Attorney-in-Fact
	 	La Jolla, CA 92037	 	By:	/s/  LORI M. ROBSON      
	 	Tel.: (858) 646-8301	 	 	

	 	Fax: (858) 404-0750	 	Name:	Lori M. Robson
	 	 	 	 	

	 	 	 	Title:	Principal
	 	 	 	 	

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTORS:
	

 	
 	
DOMAIN PARTNERS IV, L.P.
	

 	
 	

By:	

One Palmer Square Associates IV, L.L.C.
	 	 	Its:	General Partner
	

 	
 	

By:	

/s/  KATHLEEN K. SCHOEMAKER      
 Kathleen K. Schoemaker

Managing Member
	

 	
 	
DP IV ASSOCIATES, L.P.
	

 	
 	

By:	

One Palmer Square Associates IV, L.L.C.
	 	 	Its:	General Partner
	

 	
 	

By:	

/s/  KATHLEEN K. SCHOEMAKER      
 Kathleen K. Schoemaker

Managing Member

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	

 	
 	
INVESTOR:
	

 	
 	
PAUL A. GRAYSON
	

 	
 	

/s/  PAUL A. GRAYSON      

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	

 	
 	
INVESTOR:
	

 	
 	
KEVIN J. KINSELLA, AS TRUSTEE OF THE KEVIN J. KINSELLA DECLARATION OF TRUST OF NOVEMBER 2, 1994
	

 	
 	

By:	

/s/  KEVIN J. KINSELLA      

	 	 	Name:	Kevin J. Kinsella

	 	 	Title:	Trustee

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	

 	
 	
INVESTORS:
	

 	
 	
KINGSBURY CAPITAL PARTNERS L.P. III
	

 	
 	

By:	

/s/  TIMOTHY J. WOLLAEGER      

	 	 	Name:	Timothy J. Wollaeger

	 	 	Title:	General Partner

	

 	
 	
KINGSBURY CAPITAL PARTNERS L.P. IV
	

 	
 	

By:	

/s/  TIMOTHY J. WOLLAEGER      

	 	 	Name:	Timothy J. Wollaeger

	 	 	Title:	General Partner

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	

 	
 	
INVESTORS:
	

 	
 	
ANDREA STRYER
	

 	
 	

/s/  ANDREA STRYER      

	

 	
 	
LUBERT STRYER
	

 	
 	

/s/  LUBERT STRYER      

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	

 	
 	
INVESTOR:
	

 	
 	
RICHARD L. SCOTT REVOCABLE TRUST
	

 	
 	

By:	

/s/  RICHARD L. SCOTT      

	 	 	Name:	Richard L. Scott

	 	 	Title:	Trustee

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	

 	
 	
INVESTORS:
	

 	
 	
OSCAR L. TANG
	

 	
 	

/s/  OSCAR L. TANG      

	

 	
 	
GRANTOR TRUST FOR TRACY L. TANG
	

 	
 	

/s/  OSCAR L. TANG      

	 	 	By:	Oscar L. Tang, Trustee
	

 	
 	
GRANTOR TRUST FOR DANA E. TANG
	

 	
 	

/s/  OSCAR L. TANG      

	 	 	By:	Oscar L. Tang, Trustee
	

 	
 	
GRANTOR TRUST FOR KRISTIN A. TANG
	

 	
 	

/s/  OSCAR L. TANG      

	 	 	By:	Oscar L. Tang, Trustee
	

 	
 	
MR. AND MRS. KEVIN TANG
	

 	
 	

/s/  KEVIN TANG      

	

 	
 	

[ILLEGIBLE TEXT]

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	

 	
 	
INVESTOR:
	

 	
 	
CHARLES ZUCKER
	

 	
 	

    

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	

 	
 	
INVESTORS:
	

 	
 	
ROGER TSIEN
	

 	
 	

/s/  ROGER TSIEN      

	

 	
 	
WENDY GLOBE TSIEN
	

 	
 	

/s/  WENDY GLOBE TSIEN      

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	

 	
 	
INVESTOR:
	

 	
 	
PROSPECT VENTURE PARTNERS, LP
	

 	
 	

By:	

/s/  DAVID SCHNELL      
 David Schnell, MD

Managing Partner

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	

 	
 	
INVESTOR:
	

 	
 	
RHO MANAGEMENT TRUST I
	

 	
 	

By:	

Rho Capital Partners, Inc. as Investment Adviser
	

 	
 	

By:	

/s/  MARK LESCHLY      

	 	 	Name:	Mark Leschly

	 	 	Title:	Managing Director

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
STELIOS PAPADOPOULOS
	

 	
 	

/s/  STELIOS PAPADOPOULOS      

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
JORGE E. HIRSCH
	

 	
 	

/s/  JORGE E. HIRSCH      

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
DAVID MARINO
	

 	
 	

/s/  DAVID MARINO      

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
SPARKS PARTNERS
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTORS:
	

 	
 	
FOUR PARTNERS
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
BAKER TISCH INVESTMENTS LLC
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
FBB ASSOCIATES
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
ZAFFARONI REVOCABLE TRUST UTD 1-24-86

ALEJANDRO ZAFFARONI—TRUSTEE
	

 	
 	

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
ALEXANDRIA REAL ESTATE EQUITIES, L.P.
	

 	
 	

By:	

ARE-QRS CORP., a Maryland corporation, general partner

	

 	
 	

By:	

/s/  LAURIE A. ALLEN      

	 	 	Name:	Laurie A. Allen

	 	 	Title:	Senior Vice President, Business Development & Legal Affairs

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
AURORA BIOSCIENCES CORPORATION
	

 	
 	

By:	
 	

/s/  HARRY STYLLI      

	 	 	Name:	 	Harry Stylli

	 	 	Title:	 	President

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
INCYTE GENOMICS, INC.
	

 	
 	

By:	
 	

/s/  LEE BENDEKGEX      

	 	 	Name:	 	Lee Bendekgex

	 	 	Title:	 	EVP, General Counsel

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
MERRILL LYNCH VENTURES L.P. 2001
	

 	
 	

By:	
 	

Merrill Lynch Ventures, LLC

its General Partner
	

 	
 	

By:	
 	

/s/  EDWARD J. HIGGINS      

	 	 	Name:	 	Edward J. Higgins

	 	 	Title:	 	Vice President

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

	 	 	INVESTOR:
	

 	
 	
EXCELSIOR VENTURE PARTNERS III, LLC
	

 	
 	

By:	
 	

/s/  DAVID I. FENN      

	 	 	Name:	 	David I. Fenn

	 	 	Title:	 	President

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 

  

 
 

EXHIBIT A    
    

	Name & Address
 

	The North American Nutrition and Agribusiness Fund, L.P.C
	 	Bay City Capital LLC

750 Battery Street, Suite 600

San Francisco, CA 94111

(415) 835-9346

(415) 837-0503—Fax

attn: Lori Robson, Ph.D.
	
Domain Partners IV, L.P.
	 	Jim Blair

One Palmer Square

Princeton, NJ 08542

(609) 683-5656

(609) 683-9789—Fax

cc: Lisa Kraeutler
	
Prospect Venture Partners, LP
	 	David Schnell, M.D.

435 Tasso Street, Suite 200

Palo Alto, CA 94305

(650) 327-8800

(650) 324-8838—Fax
	
Kingsbury Capital Partners L.P. III
	 	Tim Wollaeger

3655 Nobel Drive, Suite 490

San Diego, CA 92122

(858) 677-0600

(858) 677-0800—Fax
	
Kingsbury Capital Partners L.P. IV
	 	Tim Wollaeger

3655 Nobel Drive, Suite 490

San Diego, CA 92122

(858) 677-0600

(858) 677-0800—Fax
	 

A-1

 

	
Rho Management Trust I
	 	Mark Leschly

152 West 57th Street, 23rd Floor

New York, NY 10019

(212) 751-6677 ext. 414

(212) 751-3613—Fax

cc: Audrey M. Roth, Esq.

Goodwin Procter LLP

Exchange Place

Boston, Massachusetts 02109

(617) 510-1027

(617) 523-1231—Fax
	
Mr. And Mrs. Kevin Tang
	 	11 Riverside Drive, Apt. 12FW

New York, NY 10023

(212) 501-9109

(212) 471-4943—Fax
	
Kevin J. Kinsella, as Trustee of the Kevin J. Kinsella Declaration of Trust of November 2, 1994
	 	1735 Castellana Road

La Jolla, CA 92037

(858) 459-6667

(858) 623-3395—Fax
	
Richard L. Scott Revocable Trust
	 	c/o Richard L. Scott Investments, LLC

100 First Stamford Place, Suite 625

Stamford, CT 06902

(203) 602-2290

(203) 602-7758—Fax
	
Lubert Stryer, M.D.
	 	843 Sonoma Terrace

Stanford, CA 94305

(650) 723-5358

(650) 498-5351—Fax
	
Oscar Tang
	 	c/o Gwen Winkhaus

Reich & Tang

600 Fifth Avenue

New York, NY 10020

(212) 830-5303

(212) 265-9752—Fax
	 

A-2

 

	
Tracy L. Tang
	 	c/o Gwen Winkhaus

Reich & Tang

600 Fifth Avenue

New York, NY 10020

(212) 830-5303

(212) 265-9752—Fax
	
Dana E. Tang
	 	c/o Gwen Winkhaus

Reich & Tang

600 Fifth Avenue

New York, NY 10020

(212) 830-5303

(212) 265-9752—Fax
	
Kristin A. Tang
	 	c/o Gwen Winkhaus

Reich & Tang

600 Fifth Avenue

New York, NY 10020

(212) 830-5303

(212) 265-9752—Fax
	
Paul A. Grayson
	 	C/O Senomyx, Inc.

11099 North Torrey Pines Road

La Jolla, CA 92037

(858) 646-8301

(858) 404-0750—Fax
	
Stelios Papadopoulos
	 	3 Somerset Drive South

Great Neck, NY 11020

(516) 487-5654

(516) 487-0245—Fax
	
Charles S. Zuker
	 	UCSD Cellular & Molecular Medicine

West, Room 355

9500 Gilman Drive

La Jolla, CA 92037

(858) 534-5528

(858) 534-8510—Fax
	 

A-3

 

	
DP IV Associates, L.P.
	 	Jim Blair

One Palmer Square

Princeton, NJ 08542

(609) 683-5656

(609) 683-9789—Fax

cc: Lisa Kraeutler
	
Andrea Stryer
	 	843 Sonoma Terrace

Stanford, CA 94305

(650) 858-2858

(650) 498-5351—Fax
	
Jorge E. Hirsch
	 	4058 Riverton Place

San Diego, CA 92130

(858) 755-2663

(858) 792-1728—Fax
	
Roger Tsien
	 	8535 Nottingham Place

La Jolla, CA 92037

(858) 534-4891

(858) 534-5270—Fax
	
Wendy Globe Tsien
	 	8535 Nottingham Place

La Jolla, CA 92037

(858) 534-4891

(858) 534-5270—Fax
	
David Marino
	 	754 La Canada

La Jolla, CA 92037

(619) 238-4393

(619) 238-1025—Fax
	
Sparks Partners
	 	John Brooks, Secretary

4146 Roland Avenue

Baltimore, MD 21211

(410) 235-3217

(410) 235-4650—Fax

cc: Hugh Rienhoff, Jr., M.D.

(650) 934-9300

(650) 934-9376—Fax
	 

A-4

 

	
Zaffaroni Revocable Trust UTD 1-24-86

Alejandro Zaffaroni—Trustee
	 	Technofyn Associates LLC

4005 Miranda Avenue, Suite 180

Palo Alto, CA 94304

Attn: Alejandro Zaffaroni /

          Gonzalo M. Silveira

(650) 496-2258

(650) 564-7804—Fax

cc: Julian N. Stern, Esq.

Heller Ehrman White & McAuliffe LLP

525 University Avenue

Palo Alto, CA 94301

(650) 324-7000

(650) 324-0638—Fax
	
Four Partners
	 	Felix and Geoffrey Baker

667 Madison Ave., 7th Floor

New York, NY 10021-8087

(212) 521-2865

(212) 521-2915—Fax
	
Baker Tisch Investments LLC
	 	Felix and Julian Baker

667 Madison Ave., 7th Floor

New York, NY 10021-8087

(212) 521-2865

(212) 521-2915—Fax
	
FBB Associates
	 	Felix and Geoffrey Baker

667 Madison Ave., 7th Floor

New York, NY 10021-8087

(212) 521-2865

(212) 521-2915—Fax
	 

A-5

 

	
Alexandria Real Estate Equities, L.P.
	 	Joel Marcus, CEO

135 N. Los Robles Avenue

Suite 250

Pasadena, CA 91101

(626) 578-9693

(626) 578-0896—Fax

cc: Pete Nelson, CFO
	
Aurora Biosciences Corporation
	 	11010 Torreyana Road

San Diego, CA 92121

(858) 404-6600

(858) 404-6743—Fax

Attn: General Counsel
	
Incyte Genomics, Inc.
	 	3160 Porter Drive

Palo Alto, CA 94304

(650) 855-0555

(650) 845-4166—Fax

Attn: Chief Executive Officer
	
Merrill Lynch Ventures L.P. 2001
	 	95 Green Street, 7th Floor

Jersey City, NJ 07302

(201) 671-0400

(201) 671-4527—Fax

Attn: Robert F. Tully
	
Excelsior Venture Partners III, LLC
	 	c/o U.S. Trust Company

225 High Ridge Road

Stamford, CT 06905

(203) 352-4400
	

 

A-6

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SENOMYX, INC. FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT November 14, 2001

Table Of Contents

SCHEDULE OF INVESTORS

SENOMYX, INC. FIRST AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

RECITALS

AMENDMENT

EXHIBIT A

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