Sunesis Pharmaceuticals, Inc. Message Board

If a change of control (as that term is defined in the certificate of designation related to the convertible Series A convertible
preferred stock), which includes a sale or merger of Sunesis or a significant partnering transaction, occurs, the holders of the
Series A convertible preferred stock would be entitled to receive, before any proceeds are distributed to common stockholders, three
times the amount that the investors in the Private Placement paid for the units (i.e. three times the total of $15.0 million invested
in the initial and second closings, or $45.0 million). We would not have any capital to distribute to our common stockholders if the
consideration received in a transaction that triggers a change of control event under the certificate of designation is less than
this liquidation preference amount. Further, if the investors elect to treat a partnering transaction as a change of control,
entitling the holders of the convertible preferred to the liquidation preference described above, the holders of the Series A
convertible preferred stock would be entitled to the full amount of any payments made by a corporate partner by surrendering the
Series A convertible preferred stock, up to the liquidation preference amount, which may leave us with insufficient resources to
continue our business.

***This right of the holders of the Series A convertible preferred stock may also impair our ability to enter into a significant partnering transaction SINCE A PARTNER WOULD BE WILLING TO ENTER INTO A PARTNERING AGREEMENT WITH US ONLY IF we have or had access to sufficient capital to satisfy our obligations under the partnering agreement. Whether or not we would have sufficient resources would depend on the terms of the partnering agreement and other cash resources available to us at that time.***