Exhibit 10.1

4,678,000 Shares

PHARMASSET, INC.

COMMON STOCK (PAR VALUE $0.001 PER SHARE)

PLACEMENT AGENCY AGREEMENT

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January 29, 2009

Leerink Swann LLC

One Federal Street, 37th Floor

Boston, MA 02110

Ladies and Gentlemen:

This Agreement confirms our understanding that Pharmasset, Inc., a Delaware
corporation (the “Company”), hereby appoints Leerink Swann LLC as its exclusive
placement agent (the “Placement Agent”) in connection with the proposed sale to
certain investors (the “Direct Offering”) of 4,678,000 shares of its Common
Stock par value $0.001 per share (the “Shares”). On the basis of the
representations and warranties contained herein, but subject to the terms and
conditions set forth herein, the Placement Agent agrees to use its best
commercially practicable efforts to solicit and receive offers to purchase the
Shares. Until the Closing Date (as defined below), the Company shall not,
without the prior written consent of the Placement Agent, solicit or accept
offers to purchase Shares otherwise than through the Placement Agent.
Notwithstanding anything to the contrary contained in this Agreement, the
Placement Agent shall have no obligation to purchase any of the Shares, or any
liability to the Company if any prospective purchaser fails to consummate a
purchase of any of the Shares. In soliciting the purchases of Shares, the
Placement Agent shall act solely as the Company’s agent and not as principal.
The shares of Common Stock, par value $0.001 per share, of the Company are
hereinafter referred to as the “Common Stock.”

Subject to the provisions of this Agreement, offers for the purchase of Shares
may be solicited by the Placement Agent as agent for the Company at such time
and in such amounts as the Placement Agent deems advisable. The Company shall
have the sole right to accept offers to purchase the Shares and may reject any
such offer, in whole or in part. The purchase of the Shares by investors in the
Direct Offering shall be evidenced by the execution of a definitive subscription
agreement (the “Purchase Agreement”) between the Company and each purchaser
(each, a “Purchaser” and, collectively, the “Purchasers”) of the Shares.

The Company has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement, including a prospectus, (the file number
of which is set forth in Schedule I hereto) on Form S-3, relating to the
securities (the “Shelf Securities”), including the Shares, to be issued from
time to time by the Company. The registration statement as amended to the date
of this Agreement, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A or
Rule 430B under the Securities Act of 1933, as amended (the “Securities Act”),
is hereinafter referred to as the “Registration Statement”, and the related
prospectus covering the Shelf Securities dated June 26, 2008 in the form first
used to confirm sales of the Shares (or in the form first made available to the
Placement Agent by the Company to meet requests of purchasers pursuant to Rule
173 under the Securities Act) is hereinafter referred to as the “Basic
Prospectus.” The Basic Prospectus,

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as supplemented by the prospectus supplement specifically relating to the Shares
in the form first used to confirm sales of the Shares (or in the form first made
available to the Placement Agent by the Company to meet requests of purchasers
pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the
“Prospectus,” and the term “preliminary prospectus” means any preliminary form
of the Prospectus. For purposes of this Agreement, “free writing prospectus” has
the meaning set forth in Rule 405 under the Securities Act, “Time of Sale
Prospectus” means the Basic Prospectus together with the free writing
prospectuses, if any, each identified in Schedule I hereto, and “broadly
available road show” means a “bona fide electronic road show” as defined in Rule
433(h)(5) under the Securities Act that has been made available without
restriction to any person. As used herein, the terms “Registration Statement,”
“Basic Prospectus,” “preliminary prospectus,” “Time of Sale Prospectus” and
“Prospectus” shall include the documents, if any, incorporated by reference
therein. The terms “supplement,” “amendment,” and “amend” as used herein with
respect to the Registration Statement, the Basic Prospectus, the Time of Sale
Prospectus, any preliminary prospectus or free writing prospectus shall include
all documents subsequently filed by the Company with the Commission pursuant to
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are
deemed to be incorporated by reference therein.

Concurrently with the execution and delivery of this Agreement, the Company, the
Placement Agent and JPMorgan Chase Bank, N.A., as escrow agent (the “Escrow
Agent”), shall enter into an escrow agreement (the “Escrow Agreement”), pursuant
to which an escrow account (the “Escrow Account”) will be established for the
benefit of the Company and the Purchasers. Prior to the completion of the
purchase and sale of the Shares pursuant to this Agreement and the Purchase
Agreements (the “Closing”), each such Purchaser shall deposit into the Escrow
Account or, with the prior consent of the Company and the Placement Agent, make
alternative arrangements for the payment directly to the Company of, an amount
equal to the product of (x) the number of Shares such Purchaser has agreed to
purchase and (y) the purchase price per Share as set forth in the Purchase
Agreements (as defined below) (the “Purchase Amount”). The aggregate of such
Purchase Amounts deposited with the Escrow Agent is herein referred to as the
“Escrow Funds.” On the Closing Date, upon satisfaction or waiver of all of the
conditions to Closing, (i) the Escrow Agent will disburse the Escrow Funds to
the Company and the Placement Agent as provided in the Escrow Agreement and
Section 2 below, (ii) the Company shall cause the Shares to be delivered to the
Purchasers who have deposited their Purchase Amounts with the Escrow Agent, and
(iii) the Company and any Purchaser who has made, with the consent of the
Company and the Placement Agent, alternative arrangements for the payment
directly to the Company of the applicable Purchase Price, shall consummate the
transactions contemplated hereby in accordance with such alternative
arrangements.

Subject to the terms and conditions hereof, delivery of the Shares shall be made
by the Company to the Purchasers, and payment of the purchase price shall be
made by the Purchasers through the Escrow Agent, at the office of Wilmer Cutler
Pickering Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109 (or at
such other place as agreed upon by the Placement Agent and the Company), at
10:00 a.m., New York City time, on or before February 4, 2009 or at such time on
such other date as may be agreed

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upon in writing by the Company and the Placement Agent but in no event prior to
the date on which the Escrow Agent shall have received all of the Escrow Funds
to be paid to the Company through the Escrow Agent (such date of delivery and
payment is hereinafter referred to as the “Closing Date”); provided that the
Company, the Placement Agent and a Purchaser may agree as to an alternative
arrangement for the payment directly to the Company of the applicable purchase
price for the Shares to be purchased by such Purchaser. The Shares shall be
delivered, through the facilities of The Depository Trust Company, to such
persons, and shall be registered in such name or names and shall be in such
denominations, as the Placement Agent may request by written notice to the
Company prior to the Closing Date. The cost of original issue tax stamps and
other transfer taxes, if any, in connection with the issuance and delivery of
the Shares by the Company to the respective Purchasers shall be borne by the
Company.

1. Representations and Warranties. The Company represents and warrants to and
agrees with the Placement Agent that:

(a) The Registration Statement has become effective, no stop order suspending
the effectiveness of the Registration Statement is in effect, and no proceedings
for such purpose are pending before or, to the Company’s knowledge, threatened
by the Commission.

(b) (i) Each document, if any, filed or to be filed pursuant to the Exchange Act
and incorporated by reference in the Time of Sale Prospectus or the Prospectus
complied or will comply when so filed in all material respects with the Exchange
Act and the applicable rules and regulations of the Commission thereunder,
(ii) each part of the Registration Statement, when such part became effective,
did not contain, and each such part, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (iii) the Registration Statement as of the date hereof
does not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (iv) the Registration Statement and the Prospectus
comply, and as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (v) the Time of Sale Prospectus does
not, and at the time of each sale of the Shares in connection with the Direct
Offering when the Prospectus is not yet available to prospective purchasers and
at the Closing Date (as defined in Section 2(a)), the Time of Sale Prospectus,
as then amended or supplemented by the Company, if applicable, will not, contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, (vi) each broadly available road
show, if any, when considered together with the Time of Sale Prospectus, does
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading and (vii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this paragraph do not apply to statements or omissions in the
Registration Statement, the Time of Sale Prospectus or the Prospectus based upon
information relating to the Placement Agent furnished to the Company in writing
by the Placement Agent expressly for use therein.

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(c) The Company is not an “ineligible issuer” in connection with the Direct
Offering pursuant to Rules 164, 405 and 433 under the Securities Act. Any free
writing prospectus that the Company is required to file pursuant to Rule 433(d)
under the Securities Act has been, or will be, filed with the Commission in
accordance with the requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder. Each free writing prospectus that
the Company has filed, or is required to file, pursuant to Rule 433(d) under the
Securities Act or that was prepared by or behalf of or used or referred to by
the Company complies or will comply in all material respects with the
requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder. Except for the free writing prospectuses, if any,
identified in Schedule I hereto forming part of the Time of Sale Prospectus, and
electronic road shows, if any, each furnished to the Placement Agent before
first use, the Company has not prepared, used or referred to, and will not,
without the prior consent of the Placement Agent, prepare, use or refer to, any
free writing prospectus.

(d) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation and has corporate power and authority to own or lease, as the case
may be, and operate its properties and to conduct its business as described in
the Time of Sale Prospectus and the Prospectus and to enter into and perform its
obligations under this Agreement. The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such jurisdictions
where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a material adverse effect, on the
condition, financial or otherwise, or on the earnings, business, properties,
operations or prospects, whether or not arising from transactions in the
ordinary course of business of the Company (a “Material Adverse Effect”).

(e) The Company has no subsidiaries.

(f) Except for the Current Report on Form 8-K filed by the Company with the
Commission on January 22, 2009 (the “January Report”), the Company has filed in
a timely manner all reports required to be filed pursuant to Sections 13(a),
13(e), 14 and 15(d) of the Exchange Act (except to the extent that Section 15(d)
requires reports to be filed pursuant to Sections 13(d) and 13(g) of the
Exchange Act, which shall be governed by the next clause of this sentence); the
Company has filed in a timely manner all reports required to be filed pursuant
to Sections 13(d) and 13(g) of the Exchange Act; and the failure to file the
January Report in a timely manner under the Exchange Act does not and will not
impair the ability of the Company to use the Registration Statement.

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(g) The Company has not distributed and will not distribute, prior to the later
of the Closing Date (as defined below) and the completion of the Placement
Agent’s placement of the Shares, any offering material in connection with the
placement of the Shares other than the Prospectus, any Issuer Free Writing
Prospectus reviewed and consented to by the Placement Agent or included in
Schedule I hereto or the Registration Statement.

(h) This Agreement has been duly authorized, executed and delivered by the
Company.

(i) The authorized, issued and outstanding capital stock of the Company is as
set forth in each of the Time of Sale Prospectus and the Prospectus. The Common
Stock (including the Shares) conforms in all material respects to the
description thereof contained in each of the Time of Sale Prospectus and the
Prospectus. All of the issued and outstanding shares of Common Stock have been
duly authorized and validly issued, are fully paid and nonassessable and have
been issued in compliance with federal and state securities laws. None of the
outstanding shares of Common Stock were issued in violation of any preemptive
rights, rights of first refusal or other similar rights to subscribe for or
purchase securities of the Company. There are no Company authorized or
outstanding options, warrants, preemptive rights, rights of first refusal or
other rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company, other than
those described in the Time of Sale Prospectus and the Prospectus or options
granted under the Company’s 2007 Equity Incentive Plan. The description of the
Company’s stock option, stock bonus and other stock plans or arrangements, and
the options or other rights granted thereunder, set forth in each of the Time of
Sale Prospectus and the Prospectus accurately and fairly presents in all
material respects the information required to be shown with respect to such
plans, arrangements, options and rights.

(j) The Company has filed in a timely manner a Notification Form: Listing of
Additional Shares relating to the Shares with The NASDAQ Stock Market, LLC
(“NASDAQ”). The Common Stock is registered under Section 12(b) of the Exchange
Act and is listed on the NASDAQ Global Market.

(k) The Shares to be placed by the Placement Agent on behalf of the Company have
been duly authorized for issuance and sale pursuant to any applicable Purchase
Agreement and, when issued and delivered by the Company to prospective
Purchasers, against payment of the applicable Purchase Price therefor, pursuant
to any applicable Purchase Agreement on the Closing Date, will be validly
issued, fully paid and nonassessable.

(l) The Company is not (i) in violation or in default (or, with the giving of
notice or lapse of time, would be in default) (“Default”) under its certificate
of incorporation or by-laws, (ii) in Default under any indenture, mortgage, loan
or credit agreement, deed of trust, note, contract, franchise, lease or other
agreement, obligation, condition, covenant or instrument to which the Company is
a party or by which it may be bound, or to which any of the property or assets
of the Company is subject (each, an “Existing Instrument”), or (iii) in
violation of any statute, law, rule, regulation, judgment, order or decree of
any court, regulatory body,

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administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its properties, as applicable, except
with respect to clause (ii) and (iii) only, for such Defaults as would not,
individually or in the aggregate, have a Material Adverse Effect. The Company’s
execution, delivery and performance of this Agreement and the Escrow Agreement
and consummation of the transactions contemplated hereby, thereby, by the Time
of Sale Prospectus and by the Prospectus (i) have been duly authorized by all
necessary corporate action and will not result in any Default under the
certificate of incorporation or by-laws of the Company, (ii) will not conflict
with or constitute a breach of, or Default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company pursuant to, or require the consent of any other party to, any Existing
Instrument, and (iii) will not result in any violation of any statute, law,
rule, regulation, judgment, order or decree applicable to the Company of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or any of its or their
properties. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency is required for the Company’s execution, delivery and
performance of this Agreement and the Escrow Agreement and consummation of the
transactions contemplated hereby, thereby, by the Time of Sale Prospectus and by
the Prospectus, except such as have been obtained or made by the Company and are
in full force and effect under the Securities Act, applicable state securities
or blue sky laws, with NASDAQ and from the Financial Industry Regulatory
Authority, Inc. (“FINRA”).

(m) Except as otherwise disclosed in the Time of Sale Prospectus and the
Prospectus, subsequent to the respective dates as of which information is given
in the Time of Sale Prospectus: (i) there has been no material adverse change,
or any development that could reasonably be expected to result in a material
adverse change, in the condition, financial or otherwise, or in the earnings,
business, properties, operations or prospects, whether or not arising from
transactions in the ordinary course of business of the Company; (ii) the Company
has not incurred any material liability or obligation, indirect, direct or
contingent, nor entered into any material transaction or agreement; and
(iii) there has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of capital stock or repurchase or redemption by
the Company of any class of capital stock.

(n) There are no legal or governmental actions, suits or proceedings pending or,
to the best of the Company’s knowledge, threatened (i) against or affecting the
Company, (ii) which has as the subject thereof any officer or director of, or
property owned or leased by, the Company or (iii) relating to environmental or
discrimination matters which would, individually or in the aggregate, have a
Material Adverse Effect or adversely affect the consummation of the transactions
contemplated by this Agreement.

(o) The Company is not, and after giving effect to the transactions contemplated
hereby, by the Time of Sale Prospectus and by the Prospectus will not be,
required to be registered as an “investment company” within the meaning of the
Investment Company Act of 1940, as amended (the “Investment Company Act”).

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(p) Except as otherwise disclosed in the Time of Sale Prospectus and the
Prospectus, (i) the Company is not in violation of any federal, state, local or
foreign law, regulation, order, permit or other requirement relating to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including without limitation, laws and regulations relating
to emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum and petroleum products (collectively, “Materials of Environmental
Concern”), or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Materials of
Environment Concern (collectively, “Environmental Laws”), which violation
includes, but is not limited to, noncompliance with any permits or other
governmental authorizations required for the operation of the business of the
Company under applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has the Company received any written communication,
whether from a governmental authority, citizens group, employee or otherwise,
that alleges that the Company is in violation of any Environmental Laws, except
as would not, individually or in the aggregate, have a Material Adverse Effect;
(ii) there is no claim, action or cause of action filed with a court or
governmental authority, no investigation with respect to which the Company has
received written notice, and no written notice by any person or entity alleging
potential liability for investigatory costs, cleanup costs, governmental
responses costs, natural resources damages, property damages, personal injuries,
attorneys’ fees or penalties arising out of, based on or resulting from the
presence, or release into the environment, of any Material of Environmental
Concern at any location owned, leased or operated by the Company, now or in the
past (collectively, “Environmental Claims”), pending or, to the Company’s
knowledge, threatened against the Company or any person or entity whose
liability for any Environmental Claim the Company has retained or assumed either
contractually or by operation of law, except as would not, individually or in
the aggregate, have a Material Adverse Effect; (iii) to the Company’s knowledge,
there are no past or present actions, activities, conditions, events or
incidents, including, without limitation, the release, emission, discharge,
presence or disposal of any Material of Environmental Concern, that reasonably
could result in a violation of any Environmental Laws, require expenditures to
be incurred pursuant to Environmental Laws, or form the basis of a potential
Environmental Claim against the Company or against any person or entity whose
liability for any Environmental Claim the Company has retained or assumed either
contractually or by operation of law, except as would not, individually or in
the aggregate, have a Material Adverse Effect; and (iv) the Company is not
subject to any pending or, to the Company’s knowledge, threatened proceeding
under Environmental Law to which a governmental authority is a party and which
is reasonably likely to result in monetary sanctions of $100,000 or more.

(q) None of the following events has occurred or exists: (i) a failure to
fulfill the obligations, if any, under the minimum funding standards of
Section 302 of the United States Employee Retirement Income Security Act of
1974, as amended (“ERISA”), and the regulations and published interpretations
thereunder with respect to a Plan, determined without regard to any waiver of
such obligations or extension of any amortization period; (ii) an audit or
investigation by the Internal Revenue Service, the U.S. Department of Labor, the
Pension Benefit Guaranty Corporation or any other federal or state governmental
agency or any foreign

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regulatory agency with respect to the employment or compensation of employees by
any member of the Company that could have a Material Adverse Effect; (iii) any
breach of any contractual obligation, or any violation of law or applicable
qualification standards, with respect to the employment or compensation of
employees by any member of the Company that could have a Material Adverse
Effect. None of the following events has occurred or is reasonably likely to
occur: (i) a material increase in the aggregate amount of contributions required
to be made to all Plans in the current fiscal year of the Company compared to
the amount of such contributions made in the Company’s most recently completed
fiscal year; (ii) a material increase in the Company’s “accumulated
post-retirement benefit obligations” (within the meaning of Statement of
Financial Accounting Standards 106) compared to the amount of such obligations
in the Company’s most recently completed fiscal year; (iii) any event or
condition giving rise to a liability under Title IV of ERISA that could have a
Material Adverse Effect; or (iv) the filing of a claim by one or more employees
or former employees of the Company related to their employment that could have a
Material Adverse Effect. For purposes of this paragraph, the term “Plan” means a
plan (within the meaning of Section 3(3) of ERISA) subject to Title IV of ERISA
with respect to which any member of the Company may have any liability.

(r) There are no persons with registration or other similar rights to have any
equity or debt securities registered for sale under the Registration Statement
or included in the offering contemplated by this Agreement, except for such
rights as have been duly waived.

(s) Neither the Company nor, to the knowledge of the Company, any director,
officer, or employee of the Company is aware of or has taken any action,
directly or indirectly, that would result in a violation by such persons of the
Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the “FCPA”), including, without limitation, making use of the mails
or any means or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization of the giving
of anything of value to any “foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA, and the Company has
conducted its business in compliance with the FCPA.

(t) To the Company’s knowledge, the statistical and market-related data included
or incorporated by reference in the Registration Statement, the Time of Sale
Prospectus or the Prospectus is based on or derived from sources that are
materially reliable and accurate.

(u) The preclinical and clinical studies and tests conducted by or on behalf of
the Company that are described in the Registration Statement, the Time of Sale
Prospectus or the Prospectus or the results of which are referred to in the
Registration Statement, the Time of Sale Prospectus or the Prospectus, were and,
if still pending, are being conducted in all material respects in accordance
with experimental protocols, procedures and controls generally used by qualified
experts in the preclinical and clinical study (as applicable) of new drugs or
diagnostics as applied to products comparable to those being developed by the
Company. The descriptions of the results of the preclinical and clinical studies
and tests contained in the Registration Statement, the Time of Sale Prospectus
or the Prospectus are accurate and complete in all material respects.

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(v) The Company has (i) orally, to the Placement Agent or to counsel to the
Placement Agent, fairly summarized in all material respects the substance of all
of its material communications with representatives of the FDA; and (ii) no
knowledge of any pending communication from the FDA that would cause the Company
to revise its strategy for seeking marketing approval from the FDA for any of
the Company’s products under development as described in the Registration
Statement, the Time of Sale Prospectus or the Prospectus.

(w) There are no transfer taxes or other similar fees or charges under federal
law or the laws of any state, or any political subdivision thereof, required to
be paid in connection with the execution and delivery of this Agreement or the
issuance by the Company or sale by the Company of the Shares.

(x) Grant Thornton LLP (“Grant Thornton”), who have expressed their opinion with
respect to the financial statements (which term as used in this Agreement
includes the related notes thereto) and supporting schedules, if any, filed with
the Commission as a part of the Registration Statement and included in the Time
of Sale Prospectus and the Prospectus, are independent public accountants with
respect to the Company as required by the Securities Act and the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and the applicable rules
and regulations thereunder.

(y) The financial statements filed with the Commission as a part of the
Registration Statement and included in the Time of Sale Prospectus and the
Prospectus present fairly in all material respects the financial condition of
the Company as of and at the dates indicated and the results of its operations
and cash flows for the periods specified on the basis stated therein. Such
financial statements comply as to form with the applicable accounting
requirements of the Securities Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved, except as may be expressly stated in the
related notes thereto. No other financial statements or supporting schedules are
required to be included in the Registration Statement.

(z) No labor dispute with the employees of the Company exists or, to the
Company’s knowledge, is threatened or imminent, and the Company is not aware of
any existing or imminent labor dispute with the employees of any of its
principal suppliers that could have a Material Adverse Effect.

(aa) Except as described in the Time of Sale Prospectus and the Prospectus, the
Company owns, possesses, licenses or has other rights to use, on reasonable
terms, all patents, patent applications, trade and service marks, trade and
service mark registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property (collectively, the
“Intellectual Property”) that are necessary for the conduct of the Company’s
business as now conducted or, in connection with its major product candidates,
as proposed in each of the Time of Sale Prospectus and the Prospectus to be
conducted. Except as set forth

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in the Time of Sale Prospectus and the Prospectus, (i) to the Company’s
knowledge, there is no material infringement by third parties of any such
Intellectual Property owned by or exclusively licensed to the Company;
(ii) there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others challenging the Company’s rights in or to
any Intellectual Property that would have a Material Adverse Effect; (iii) there
is no pending or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others challenging the validity or scope of any
Intellectual Property that would have a Material Adverse Effect; (iv) to the
Company’s knowledge there is no pending or, threatened action, suit, proceeding
or claim by others that the Company’s business as now conducted infringes or
otherwise violates any patent, trademark, copyright, trade secret or other
proprietary rights of others; (v) to the Company’s knowledge the Company has
complied in all material respects with the terms of each agreement pursuant to
which material Intellectual Property has been licensed to the Company, and all
such agreements are in full force and effect; and (vi) to the Company’s
knowledge, the product candidates described in the Time of Sale Prospectus and
the Prospectus, if any, as under development by the Company fall within the
scope of the claims of one or more patents or patent applications owned by, or
exclusively licensed to, the Company, and nothing has come to the Company’s
attention that causes it to believe that such patents are not valid or
enforceable.

(bb) The Company possesses such valid and current licenses, certificates,
authorizations or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct its business which, singly or
in the aggregate, if not obtained, would have a Material Adverse Effect, and the
Company has not received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such license, certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could have a Material Adverse Effect.

(cc) Except as set forth in the Time of Sale Prospectus and the Prospectus, the
Company has good and marketable title to all the properties and assets reflected
as owned in the financial statements referred to in Section 1(y) above, in each
case free and clear of any security interests, mortgages, liens, encumbrances,
equities, claims and other defects, except such as do not materially and
adversely affect the value of such property and do not materially interfere with
the use made or proposed to be made of such property by the Company. The real
property, improvements, equipment and personal property held under lease by the
Company are held under valid and enforceable leases, with such exceptions as are
not material and do not materially interfere with the use made or proposed to be
made of such real property, improvements, equipment or personal property by the
Company.

(dd) The Company has filed all necessary federal, state, local and foreign
income and franchise tax returns in a timely manner and has paid all taxes
required to be paid by it and, if due and payable, any similar assessment or
related fine or penalty levied against it, except for any taxes, assessments,
fines or penalties as may be being contested in good faith and by appropriate
proceedings. The Company has made appropriate provisions in the applicable
financial statements referred to in Section 1(y) above in respect of all
federal, state, local and foreign income and franchise taxes for all current or
prior periods as to which the tax liability of the Company has not been finally
determined.

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(ee) Except as described in the Time of Sale Prospectus and the Prospectus, the
Company is insured with policies in such amounts and with such deductibles and
covering such risks as are generally deemed adequate and customary for its
business. All policies of insurance insuring the Company or its businesses,
assets, employees, officers and directors are in full force and effect; and
there are no claims by the Company under any such policy or instrument as to
which any insurance company is denying liability or defending under a
reservation of rights clause.

(ff) The Company has not taken and will not take, directly or indirectly, any
action designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.

(gg) The Company maintains a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

(hh) The books, records and accounts of the Company accurately and fairly
reflect in all material respects, in reasonable detail, the transactions in, and
dispositions of, the assets of, and the results of operations of, the Company.
The Company has established and maintains “disclosure controls and procedures”
(as such term is defined in Rule 13a-15 under the Exchange Act), which (i) are
designed to ensure that information required to be disclosed by the Company in
the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Commission’s rules and forms, (ii) are designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is accumulated and communicated to the Company’s
management, including its principal executive officer and principal financial
officer, as appropriate, to allow timely decisions regarding required disclosure
and (iii) are sufficient to provide reasonable assurances with respect to the
performance of the functions for which they were established. The auditors have
not brought to the Company’s attention any material weakness in the Company’s
internal control over financial reporting (whether or not remediated). Based on
the most recent evaluation of the Company’s controls and procedures, the Company
is not aware of (a) any significant deficiency in the design or operation of its
internal controls which could adversely affect the Company’s ability to record,
process, summarize and report financial data or, (b) any material weaknesses in
its internal controls or (c) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company’s
internal controls. To the Company’s knowledge, there has been no change in the
Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.

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(ii) Except as otherwise disclosed in the Time of Sale Prospectus and the
Prospectus, there is no broker, finder or other party that is entitled to
receive from the Company any brokerage or finder’s fee or other fee or
commission as a result of any transactions contemplated by this Agreement.

(jj) There are no outstanding loans, advances (except normal advances for
business expenses in the ordinary course of business) or guarantees or
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company, except as disclosed in the Time of Sale Prospectus and
the Prospectus.

(kk) There is and has been no material failure on the part of the Company and,
to the knowledge of the Company, any of the Company’s directors or officers, in
their capacities as such, to comply with any provision of the Sarbanes-Oxley Act
of 2002 and the rules and regulations promulgated in connection therewith (the
“Sarbanes Oxley Act”) that are applicable to the Company.

(ll) Except as disclosed in the Time of Sale Prospectus and the Prospectus, the
Company (i) does not have any material lending relationship with any bank or
lending affiliate of the Placement Agent and (ii) does not intend to use any of
the proceeds from the sale of the Shares hereunder to repay any outstanding debt
owed to any affiliate of the Placement Agent.

2. Fees. (a) For this assignment the Placement Agent will charge the Company a
placement fee (the “Placement Fee”) of four percent (4%) of the aggregate price
at which the Shares are sold by the Company. The Placement Fee shall be payable
in immediately available funds on the Closing Date. At the Closing, the Company
shall direct the Escrow Agent to wire to an account or accounts designated by
the Placement Agent the Placement Fee out of the Escrow Funds.

(b) The right of the Placement Agent to receive the fees set forth in this
Section 2 shall survive the termination of this Agreement in accordance with
Section 7 hereof.

3. Conditions to the Placement Agent’s Obligations. The obligations of the
Placement Agent are subject to the following conditions:

(a) Subsequent to the execution and delivery of this Agreement and prior to the
Closing Date:

(i) there shall not have occurred any downgrading, nor shall any notice have
been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible change, in
the rating accorded any of the securities of the Company by any “nationally
recognized statistical rating organization,” as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and

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(ii) there shall not have occurred any change, or any development involving a
prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Company from that set forth in the Time
of Sale Prospectus as of the date of this Agreement that, in the Placement
Agent’s judgment, is material and adverse and that makes it, in the Placement
Agent’s judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Time of Sale Prospectus.

(b) The Placement Agent shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Company, to the
effect set forth in Section 3(a)(i) above and to the effect that the
representations and warranties of the Company contained in this Agreement are
true and correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.

The officer signing and delivering such certificate may rely upon the best of
his or her knowledge as to proceedings threatened.

(c) The Placement Agent shall have received on the Closing Date an opinion of
Pepper Hamilton LLP, counsel for the Company, dated as of such Closing Date,
substantially in the form attached as Exhibit B, the favorable opinion of
in-house counsel for the Company, dated as of such Closing Date, substantially
in the form attached as Exhibit C, and the favorable opinion of Duane Morris
LLP, patent counsel for the Company, dated as of such Closing Date,
substantially in the form attached as Exhibit D.

(d) The Placement Agent shall have received on the Closing Date an opinion of
Wilmer Cutler Pickering Hale and Dorr LLP, counsel for the Placement Agent,
dated the Closing Date, in form and substance satisfactory to, and addressed to,
the Placement Agent, with respect to such matters as the Placement Agent may
reasonably require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters.

(e) The Placement Agent shall have received, on each of the date of the Purchase
Agreement and the Closing Date, a letter dated the date of the Purchase
Agreement or the Closing Date, as the case may be, in form and substance
satisfactory to the Placement Agent, from Grant Thornton LLP, independent public
accountants, containing statements and information of the type ordinarily
included in accountants’ “comfort letters” to the Placement Agent with respect
to the financial statements and certain financial information contained in the
Registration Statement, the Time of Sale Prospectus and the Prospectus; provided
that the letter delivered on the Closing Date shall use a “cut-off date” not
earlier than three days prior to the Purchase Agreement.

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(f) The “lock-up” agreements, each substantially in the form of Exhibit A
hereto, between the Placement Agent and certain officers and directors of the
Company relating to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to the Placement Agent or its
counsel on or before the date hereof, shall be in full force and effect on the
Closing Date.

(g) On the Closing Date, the Placement Agent shall have received a certificate,
executed by the Chief Financial Officer of the Company and dated the date
hereof, substantially in the form attached as Exhibit E.

(h) The Company shall have entered into (i) Purchase Agreements with each of the
Purchasers and (ii) the Escrow Agreement with the Placement Agent and the Escrow
Agent, and such agreements shall be in full force and effect.

4. Covenants of the Company. The Company covenants with the Placement Agent as
follows:

(a) To furnish to the Placement Agent, without charge, a signed copy of the
Registration Statement (including exhibits thereto and documents incorporated by
reference therein) and to deliver to the Placement Agent during the period
mentioned in Section 4(e) or 4(f) below, as many copies of the Time of Sale
Prospectus, the Prospectus, any documents incorporated by reference therein and
any supplements and amendments thereto or to the Registration Statement as the
Placement Agent may reasonably request.

(b) Before amending or supplementing the Registration Statement, the Time of
Sale Prospectus or the Prospectus, to furnish to the Placement Agent a copy of
each such proposed amendment or supplement and not to file any such proposed
amendment or supplement to which the Placement Agent reasonably objects.

(c) To furnish to the Placement Agent a copy of each proposed free writing
prospectus to be prepared by or on behalf of, used by, or referred to by the
Company and not to use or refer to any proposed free writing prospectus to which
the Placement Agent reasonably objects.

(d) Not to take any action that would result in the Placement Agent or the
Company being required to file with the Commission pursuant to Rule 433(d) under
the Securities Act a free writing prospectus prepared by or on behalf of the
Placement Agent that the Placement Agent otherwise would not have been required
to file thereunder.

(e) If the Time of Sale Prospectus is being used to solicit offers to buy the
Shares at a time when the Prospectus is not yet available to prospective
purchasers and any event shall occur or condition exist as a result of which it
is necessary to amend or supplement the Time of Sale Prospectus in order to make
the statements therein, in the light of the circumstances, not misleading, or if
any event shall occur or condition exist as a result of which the Time of Sale
Prospectus conflicts with the information contained in the Registration
Statement then on file, or if, in the opinion of counsel for the Placement
Agent, it is necessary to amend or

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supplement the Time of Sale Prospectus to comply with applicable law, forthwith
to prepare, file with the Commission and furnish, at its own expense, to the
Placement Agent and to any dealer upon request, either amendments or supplements
to the Time of Sale Prospectus so that the statements in the Time of Sale
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Time of Sale Prospectus is delivered to a prospective
purchaser, be misleading or so that the Time of Sale Prospectus, as amended or
supplemented, will no longer conflict with the Registration Statement, or so
that the Time of Sale Prospectus, as amended or supplemented, will comply with
applicable law.

(f) If, during such period after the first date of the placement of the Shares
as in the opinion of counsel for the Placement Agent the Prospectus (or in lieu
thereof the notice referred to in Rule 173(a) of the Securities Act) is required
by law to be delivered in connection with sales by the Placement Agent or a
dealer, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus (or in lieu
thereof the notice referred to in Rule 173(a) of the Securities Act) is
delivered to a purchaser, not misleading, or if, in the opinion of counsel for
the Placement Agent, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Placement Agent and other dealers (whose
names and addresses the Placement Agent will furnish to the Company) upon
request, either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus (or in lieu thereof the notice
referred to in Rule 173(a) of the Securities Act) is delivered to a Purchaser,
be misleading or so that the Prospectus, as amended or supplemented, will comply
with applicable law.

(g) To endeavor to qualify the Shares for offer and sale under the securities or
Blue Sky laws of such jurisdictions as the Placement Agent shall reasonably
request.

(h) To make generally available to the Company’s security holders and to the
Placement Agent as soon as practicable an earning statement covering a period of
at least twelve months beginning with the first fiscal quarter of the Company
occurring after the date of this Agreement which shall satisfy the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.

(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid, subject
to the limitation contained in the engagement letter dated January 21, 2009
between the Company and the Placement Agent (the “Engagement Letter”), all
expenses incident to the performance of its obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company’s counsel and
the Company’s accountants in connection with the registration and delivery of
the Shares under the Securities Act and all other fees or expenses in connection
with the preparation and filing of the Registration Statement, any preliminary
prospectus, the Time of Sale Prospectus, the Prospectus, any free writing
prospectus prepared by or on behalf of, used by, or referred to by the Company
and amendments and supplements to any of the

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foregoing, including the filing fees payable to the Commission relating to the
Shares (within the time required by Rule 456 (b)(1), if applicable), all
printing costs associated therewith, and the mailing and delivering of copies
thereof to the Placement Agent and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and delivery of
the Shares to the Purchasers, including any transfer or other taxes payable
thereon, (iii) the cost of printing or producing any Blue Sky or Legal
Investment memorandum in connection with the offer and sale of the Shares under
state securities laws and all expenses in connection with the qualification of
the Shares for offer and sale under state securities laws as provided in
Section 4(g) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Placement Agent in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) the reasonable fees and disbursements of counsel to the
Placement Agent incurred in connection the transactions contemplated hereby,
(v) all costs and expenses incident to listing the Shares on NASDAQ, (vi) the
cost of printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, and the fees and
expenses of the Escrow Agent under the Escrow Agreement, (viii) the costs and
expenses of the Company relating to investor presentations on any “road show”
undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the preparation or
dissemination of any electronic road show, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show, (ix) the
document production charges and expenses associated with printing this Agreement
and (x) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made
in this Section. At the Closing, the Company shall direct the Escrow Agent to
wire to an account or accounts designated by the Placement Agent out of the
Escrow Funds all expenses of the Placement Agent for which the Company is
obligated to pay or reimburse the Placement Agent pursuant to this Agreement and
the Engagement Letter. In addition, whether or not the transaction contemplated
by this Agreement are consummated or this Agreement is terminated, the Company
shall reimburse the Placement Agent upon request for its reasonable fees and
expenses (including the fees, disbursements and other charges of legal counsel
to the Placement Agent) in accordance with the Engagement Letter.

(j) If the third anniversary of the initial effective date of the Registration
Statement occurs before all the Shares have been placed by the Placement Agent,
prior to the third anniversary to file a new shelf registration statement and to
take any other action necessary to permit the placement of the Shares to
continue without interruption; references herein to the Registration Statement
shall include the new registration statement declared effective by the
Commission;

(k) To prepare a final term sheet relating to the offering of the Shares,
containing only information that describes the final terms of the offering in a
form consented to by the Placement Agent, and to file such final term sheet
within the period required by Rule 433(d)(5)(ii) under the Securities Act
following the date the final terms have been established for the offering of the
Shares.

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The Company also covenants with the Placement Agent that, without the prior
written consent of the Placement Agent, it will not, during the period
commencing on the date hereof and ending 60 days after the date of the final
prospectus supplement relating to the Direct Offering, (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Common Stock or such other securities,
in cash or otherwise or (3) file any registration statement with the Commission
(other than on Form S-8 in respect of shares of Common Stock issuable under the
Company’s 2007 Equity Incentive Plan) relating to the offering of any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock. The foregoing sentence shall not apply to (a) the Shares to be
sold in the Direct Offering, (b) the Company’s issuance of shares of Common
Stock or options to purchase shares of Common Stock, or shares of Common Stock
upon exercise of options, pursuant to the Company’s 1998 Stock Plan or 2007
Equity Incentive Plan or (c) the Company’s issuance of shares of Common Stock
upon exercise of warrants to purchase Common Stock outstanding on the date
hereof. Notwithstanding the foregoing, if (1) during the last 17 days of the
lock-up restricted period the Company issues an earnings release or material
news or a material event relating to the Company occurs; or (2) prior to the
expiration of the lock-up restricted period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the lock-up restricted period, the restrictions imposed by this agreement shall
continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of the material news or
material event. The Company shall promptly notify the Placement Agent of any
earnings release, news or event that may give rise to an extension of the
initial lock-up restricted period.

5. Covenants of the Placement Agent. The Placement Agent covenants with the
Company not to take any action that would result in the Company being required
to file with the Commission under Rule 433(d) a free writing prospectus prepared
by or on behalf of the Placement Agent that otherwise would not be required to
be filed by the Company thereunder, but for the action of the Placement Agent

6. Indemnity and Contribution. (a) The Company agrees to indemnify and hold
harmless the Placement Agent, the partners, members, directors, officers,
employees and agents of the Placement Agent, each person, if any, who controls
the Placement Agent within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act and each affiliate of the Placement Agent
within the meaning of Rule 405 under the Securities Act from and against any and
all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any

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such action or claim) (i) relating to, arising out of or in connection with the
Direct Offering or (ii) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus, the Time of Sale Prospectus, any
issuer free writing prospectus as defined in Rule 433(h) under the Securities
Act, any Company information that the Company has filed, or is required to file,
pursuant to Rule 433(d) under the Securities Act, or the Prospectus or any
amendment or supplement thereto, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to the Placement Agent furnished to the Company in writing by the Placement
Agent expressly for use therein. With respect to clause (i) above, the Company
will not, however, be responsible for (x) any losses, claims, damages or
liabilities (or expenses relating thereto) of the Placement Agent that are
finally judicially determined to have resulted from the bad faith or gross
negligence of the Placement Agent or (y) any losses, claims, damages or
liabilities (or expenses relating thereto) of any partner, member, director,
officer, employee and agent of the Placement Agent that are finally judicially
determined to have resulted from the bad faith or gross negligence of such
partner, member, director, officer, employee or agent of the Placement Agent.
The Company also agrees that the Placement Agent shall not have any liability
(whether direct or indirect, in contract or tort or otherwise) to the Company
for or in connection with the Direct Offering, except for any such liability for
losses, claims, damages or liabilities with respect to clause (i) above incurred
by the Company that are finally judicially determined to have resulted from the
bad faith or gross negligence of the Placement Agent.

(b) The Placement Agent agrees to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to the Placement Agent contained in clause
(ii), but only with reference to information relating to the Placement Agent
furnished to the Company in writing by the Placement Agent expressly for use in
the Registration Statement, any preliminary prospectus, the Time of Sale
Prospectus, any issuer free writing prospectus or the Prospectus or any
amendment or supplement thereto.

(c) In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to Section 6(a) or 6(b), such person (the “indemnified party”) shall
promptly notify the person against whom such indemnity may be sought (the
“indemnifying party”) in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any

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impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by the Placement Agent, in
the case of parties indemnified pursuant to Section 6(a), and by the Company, in
the case of parties indemnified pursuant to Section 6(b). The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

(d) To the extent the indemnification provided for in Section 6(a) or 6(b) is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Placement Agent on the other hand from the Direct Offering or
(ii) if the allocation provided by clause 6(d)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 6(d)(i) above but also the relative
fault of the Company on the one hand and of the Placement Agent on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Placement Agent on the other hand in connection with the Direct Offering
shall be deemed to be in the same respective proportions as the net proceeds
from the Direct Offering (before deducting expenses) received by the Company and
the total Placement Fee received by the Placement Agent bear to the aggregate
public offering price of the Shares set forth in the Prospectus. The relative
fault of the Company on the one hand and the Placement Agent on the other hand
shall be determined by reference to, among other things, whether the untrue or

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alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or by
the Placement Agent and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

(e) The Company and the Placement Agent agree that it would not be just or
equitable if contribution pursuant to this Section 6 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in Section 6(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in Section 6(d) shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6, the Placement
Agent shall not be required to contribute any amount in excess of the amount by
which the total price at which the Shares placed by it were offered to the
public exceeds the amount of any damages that the Placement Agent has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 6 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.

(f) The indemnity and contribution provisions contained in this Section 6 and
the representations, warranties and other statements of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of the Placement Agent, any person controlling the Placement Agent or any
affiliate of the Placement Agent or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Shares.

7. Termination. The Placement Agent may terminate this Agreement by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (i) trading generally shall have been suspended or
materially limited on, or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the NASDAQ Global Market, the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a material
disruption in securities settlement, payment or clearance services in the United
States shall have occurred, (iv) any moratorium on commercial banking activities
shall have been declared by Federal or New York State authorities or (v) there
shall have occurred any outbreak or escalation of hostilities, or any change in
financial markets or any calamity or crisis that, in the Placement Agent’s
judgment, is material and adverse and which, singly or together with any other
event specified in this clause (v), makes it, in the Placement Agent’s judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of the
Shares on the terms and in the manner contemplated in the Time of Sale
Prospectus or the Prospectus. In accordance with the Engagement Letter, if the
sale and

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issuance of the Shares by the Company hereunder are not consummated for any
reason, the Company will reimburse the Placement Agent for up to $100,000 of
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred in connection with the offering of the Shares, and the respective
obligations of the Company and the Placement Agent under Section 6 hereof shall
remain in effect.

8. Entire Agreement. This Agreement and the Engagement Letter, together with any
contemporaneous written agreements and any prior written agreements (to the
extent not superseded by this Agreement) that relate to the Direct Offering,
represents the entire agreement between the Company and the Placement Agent with
respect to the preparation of any preliminary prospectus, the Time of Sale
Prospectus, the Prospectus, the conduct of the Direct Offering, and the purchase
and sale of the Shares.

9. Counterparts. This Agreement may be signed in two or more counterparts and by
facsimile or electronic format, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument.

10. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

11. Headings. The headings of the sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed a part of this
Agreement.

12. Absence of Fiduciary Relationship. The Company acknowledges and agrees that:

(a) No Other Relationship. The Placement Agent has been retained solely to act
as placement agent in connection with the sale of Shares and that no fiduciary,
advisory or agency relationship between the Company and the Placement Agent has
been created in respect of any of the transactions contemplated by this
Agreement, any Purchase Agreement or the Prospectus, irrespective of whether the
Placement Agent has advised or is advising the Company on other matters;

(b) Arm’s-Length Negotiations. The price of the Shares set forth in this
Agreement was established by the Company following discussions and arm’s-length
negotiations with the Placement Agent and the Company is capable of evaluating
and understanding and understands and accepts the terms, risks and conditions of
the transactions contemplated by this Agreement;

(c) Absence of Obligation to Disclose. The Company has been advised that the
Placement Agent and its affiliates are engaged in a broad range of transactions
which may involve interests that differ from those of the Company and that the
Placement Agent has no obligation to disclose such interests and transactions to
the Company by virtue of any fiduciary, advisory or agency relationship; and

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(d) Waiver. The Company waives, to the fullest extent permitted by law, any
claims it may have against the Placement Agent for breach of fiduciary duty or
alleged breach of fiduciary duty and agrees that the Placement Agent shall have
no liability (whether direct or indirect) to the Company in respect of such a
fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf
of or in right of the Company, including stockholders, employees or creditors of
the Company.

13. Notices. All communications hereunder shall be in writing and effective only
upon receipt and if to the Placement Agent shall be delivered, mailed or sent to
the Placement Agent at the address set forth in Schedule I hereto; and if to the
Company shall be delivered, mailed or sent to the address set forth in Schedule
I hereto.

[Remainder of page intentionally left blank. Signature pages follow.]

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Very truly yours,

 

Pharmasset, Inc.

By:  

/s/ Kurt Leutzinger

Name:   Kurt Leutzinger Title:   CFO

[Signature Page to Placement Agency Agreement]

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Accepted as of the date hereof

 

Leerink Swann LLC By:  

/s/ Donald D. Notman, Jr.

Name:   Donald D. Notman, Jr. Title:   Managing Director

[Signature Page to Placement Agency Agreement]

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SCHEDULE I

 

Registration Statement File No.:    333-151749 Time of Sale Prospectus   

1.      Prospectus dated June 26, 2008 relating to the Shares

 

2.      Preliminary draft of Subscription Agreement provided to prospective
purchasers on January 29, 2009.

 

3.      Term sheet dated January 29, 2009 relating to the Shares

Title of Shares to be placed:    Common Stock, par value $0.001 per share Number
of Shares:    4,678,000 Public Offering Price    $9.73 per share Closing Date:
   February 4, 2009 Closing Location:   

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, Massachusetts 02109

Address for Notices to Placement Agent:   

Leerink Swann LLC

One Federal Street, 37th Floor

Boston, Massachusetts 02110

Attention: Donald Notman

Address for Notices to the Company:   

303-A College Road East

Princeton, New Jersey 08540

Attention: Paul Lubetkin

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EXHIBIT A

FORM OF LOCK-UP LETTER

January     , 2009

Leerink Swann LLC

One Federal Street

Boston, Massachusetts 02110

Ladies and Gentlemen:

The undersigned understands that Leerink Swann LLC (the “Placement Agent”)
proposes to enter into a Placement Agency Agreement (the “Placement Agreement”)
with Pharmasset, Inc., a Delaware corporation (the “Company”), providing for a
registered direct offering (the “Direct Offering”) of shares of the common
stock, $0.001 par value per share, of the Company (the “Common Stock”), warrants
to purchase shares of Common Stock or a combination thereof.

To induce the Placement Agent to continue its efforts in connection with the
Direct Offering, the undersigned hereby agrees that, without the prior written
consent of the Placement Agent, it will not, during the period commencing on the
date hereof and ending 60 days after the date of the final prospectus supplement
relating to the Direct Offering (the “Prospectus”), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Common Stock or such other securities,
in cash or otherwise. The foregoing sentence shall not apply to (a) transactions
relating to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Direct Offering, provided that no
filing under Section 16(a) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), shall be required or shall be voluntarily made in
connection with subsequent sales of Common Stock or other securities acquired in
such open market transactions, (b) transfers of shares of Common Stock or any
security convertible into Common Stock as a bona fide gift, (c) transfers of
shares of Common Stock or any security convertible into Common Stock either
during the undersigned’s lifetime or upon death by will or intestate succession
to the immediate family of the undersigned or to a trust the beneficiaries of
which are exclusively the undersigned and/or a member or members of his
immediate family, or (d) pursuant to any trading plan established pursuant to
Rule 10b5-1 of the Exchange Act for the transfer of shares of Common Stock that
has been entered into by the undersigned prior to the date of this Agreement;
provided that in the case of any transfer or distribution pursuant to clause (b)
or (c), (i) each donee or distributee shall sign and deliver a lock-up letter
substantially in the form of this letter and (ii) no filing under Section 16(a)
of the Exchange Act, reporting a reduction in beneficial ownership of

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shares of Common Stock, shall be required or shall be voluntarily made during
the restricted period referred to in the foregoing sentence. In addition, the
undersigned agrees that, without the prior written consent of the Placement
Agent, it will not, during the period commencing on the date hereof and ending
60 days after the date of the Prospectus, make any demand for or exercise any
right with respect to, the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common Stock. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company’s transfer agent and registrar against the transfer of the
undersigned’s shares of Common Stock except in compliance with the foregoing
restrictions. For the purposes of this paragraph, “immediate family” shall mean
spouse, domestic partner, lineal descendant (including adopted children),
father, mother, brother or sister of the transferor.

If:

(1) during the last 17 days of the restricted period the Company issues an
earnings release or material news or a material event relating to the Company
occurs; or

(2) prior to the expiration of the restricted period, the Company announces that
it will release earnings results during the 16-day period beginning on the last
day of the restricted period,

the restrictions imposed by this agreement shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event.

The undersigned shall not engage in any transaction that may be restricted by
this agreement during the 34-day period beginning on the last day of the initial
restricted period unless the undersigned requests and receives prior written
confirmation from the Company or the Placement Agent that the restrictions
imposed by this agreement have expired.

The undersigned understands that the Company and the Placement Agent are relying
upon this agreement in proceeding toward consummation of the Direct Offering.
The undersigned further understands that this agreement is irrevocable and shall
be binding upon the undersigned’s heirs, legal representatives, successors and
assigns.

Whether or not the Direct Offering actually occurs depends on a number of
factors, including market conditions. Any Direct Offering will only be made
pursuant to a Placement Agreement, the terms of which are subject to negotiation
between the Company and the Placement Agent.

 

Very truly yours,

 

 

(Name)

 

(Address)

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EXHIBIT B

Form of Opinion of Counsel for the Company

Opinion of Pepper Hamilton LLP, counsel for the Company, to be delivered
pursuant to Section 3(c) of the Placement Agreement.

References to the Prospectus in this Exhibit B include any supplements thereto
at the Closing Date.

(i) The Company is a corporation validly existing and in good standing under the
law of the State of Delaware with corporate power and authority under such law
to conduct its business as described in the Prospectus.

(ii) The Company (a) has the corporate power to execute, deliver and perform the
Placement Agreement, the Escrow Agreement and the Subscription Agreements and
(b) has taken all corporate action necessary to authorize the execution,
delivery and performance of the Placement Agreement, the Escrow Agreement and
the Subscription Agreements.

(iii) Each of the Placement Agreement, the Escrow Agreement and the Subscription
Agreements has been duly executed and delivered by the Company.

(iv) The Shares have been duly authorized by the Company and, when issued and
delivered as provided in the Placement Agreement and the Subscription
Agreements, the Shares will be validly issued, fully paid and nonassessable, and
the issuance of such Shares will not be subject to preemptive rights pursuant to
the General Corporation Law of the State of Delaware, the certificate of
incorporation or by-laws of the Company or similar contractual rights granted by
the Company pursuant to any contract or agreement listed in Schedule C to such
opinion.

(v) The statements in each of the Time of Sale Prospectus and the Prospectus
under the caption “Description of Capital Stock,” insofar as such statements
purport to summarize certain provisions of the Common Stock or documents
referred to therein, constitute a fair and accurate summary of those provisions
and fairly summarize in all material respects the documents referred to therein.
The statements in the Prospectus Supplement under the caption “Certain U.S.
Federal Income Tax Considerations for Non-U.S. Holders,” insofar as such
statements constitute summaries of legal matters referred to therein fairly
summarize in all material respects such legal matters.

(vi) No authorization, approval or other action by, and no notice to or filing
with, any United States federal or New York governmental authority or regulatory
body, is required for the due execution, delivery or performance of the
Placement Agreement, the Escrow Agreement, the Subscription Agreements by the
Company and the issuance by the Company of the Shares, except as have been
obtained and are in full force and effect under the Securities Act, or as may be
required under the state securities or blue sky laws of any jurisdiction in the
United States (as to which we express no opinion) in connection with the sale of
the Shares.

--------------------------------------------------------------------------------

(vii) The execution and delivery by the Company of the Placement Agreement, the
Escrow Agreement and the Subscription Agreements do not, and the performance by
the Company of its obligations thereunder (other than performance by the Company
of its obligations under the indemnification section of the Placement Agreement,
as to which no opinion is expressed herein) will not (a) result in a violation
of the Company’s certificate of incorporation or by-laws; (b) result in a
violation of Applicable Law, or, to our knowledge, based solely upon a docket
search conducted in the Superior Court of Mercer County, New Jersey and the
United States District Court for the District of New Jersey as of January 14,
2009, any order, writ, judgment, injunction, decree, determination or award
binding on the Company or its assets, or (c) result in a breach of, a default
under or the acceleration of (or entitle any party to accelerate) the maturity
of any obligation of the Company under, or result in or require the creation of
any lien upon or security interest in any property of the Company pursuant to
the terms of, any agreement or document listed in Schedule A to such opinion.

(viii) The Company is not and, upon the Closing of the Transaction, will not be,
required to register as an investment company under the Investment Company Act
of 1940, as amended.

(ix) The statements referenced on Schedule B to this opinion, insofar as such
statements constitute summaries of applicable provisions of the Federal Food,
Drug, and Cosmetic Act, as amended, and the regulations promulgated thereunder,
fairly summarize in all material respects the provisions purported to be
summarized under such captions in the Prospectus.

In addition, such counsel shall state that they have reviewed and participated
in discussions concerning the preparation of the Registration Statement, the
Time of Sale Prospectus and the Prospectus with certain officers or employees of
the Company, with its auditors, and with the Placement Agent and its
representatives. The limitations inherent in the independent verification of
factual matters and in the role of outside counsel are such, however, that such
counsel cannot and does not assume any responsibility for the accuracy,
completeness or fairness of the statements made in the Registration Statement,
the Time of Sale Prospectus or the Prospectus, except as set forth in paragraph
vii of such opinion addressed to you, dated the date hereof.

Such counsel shall also state that on February 4, 2009, a member of the staff of
the Commission informed such counsel orally that no stop order suspending the
effectiveness of the Registration Statement has been issued under the Securities
Act. To the knowledge of such counsel, no proceedings for that purpose have been
initiated or are pending or threatened by the Commission.

Such counsel also advises you that, subject to the limitations set forth in the
preceding paragraph, on the basis of the information such counsel gained in the
course of performing the services referred to above, each of the Registration
Statement and the Prospectus (other than the financial statements and other
financial data included therein or omitted therefrom, as to which such counsel
expresses no opinion) appears on its face to be appropriately responsive in all
material respects to the requirements of the Securities Act and the

--------------------------------------------------------------------------------

applicable rules and regulations of the Commission thereunder, and no facts came
to such counsel’s attention which gave such counsel reason believe that (i) the
Registration Statement (other than the financial statements and other financial
data derived therefrom contained therein or omitted therefrom, as to which such
counsel has not been requested to comment), at the time it became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading; (ii) the Time of Sale Prospectus (other than the
financial statements and other financial data contained therein or omitted
therefrom, as to which such counsel has not been requested to comment), at the
applicable time or on the date of such opinion, contained or contains an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of circumstances under which they were made, not misleading, or (iii) the
Prospectus (other than the financial statements and other financial data
contained therein or omitted therefrom, as to which such counsel has not been
requested to comment), as of its date or the date of such opinion, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the General Corporation Law
of the State of Delaware, the New York Corporation Law or the federal law of the
United States, to the extent they deem proper and specified in such opinion,
upon the opinion (which shall be dated the Closing Date shall be reasonably
satisfactory in form and substance to the Placement Agent, shall expressly state
that the Placement Agent may rely on such opinion as if it were addressed to
them and shall be furnished to the Placement Agent) of other counsel of good
standing whom they believe to be reliable and who are reasonably satisfactory to
counsel for the Placement Agent; and (B) as to matters of fact, to the extent
they deem proper, on certificates of responsible officers of the Company and
public officials.

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Schedule B to Opinion of Counsel for the Company

We have reviewed certain information incorporated by reference into the
Registration Statement from the Company’s Annual Report on Form 10-K for the
fiscal year ended September 30, 2008 under the following captions:

 

  •  

“Risks Related to Our Business – Risks Related to Drug Discovery, Development
and Commercialization – We are subject to significant regulatory requirements,
which could delay, prevent or limit our ability to market our product
candidates, including clevudine, Racivir, R7128, PSI-7851 and DFC;”

 

  •  

“Risks Related to Our Business – Risks Related to Drug Discovery, Development
and Commercialization – Our product candidates must undergo rigorous clinical
trials, the results of which are uncertain and could substantially delay or
prevent us from bringing drugs to market;”

 

  •  

“Risks Related to Our Business – Risks Related to Drug Discovery, Development
and Commercialization – Delays in clinical trials could result in increased
costs to us and delay our ability to obtain regulatory approval and
commercialize our product candidates;”

 

  •  

“Risks Related to Our Business – Risks Related to Drug Discovery, Development
and Commercialization – Failure to recruit and enroll patients/subjects for
clinical trials may cause the development of our product candidates to be
delayed;”

 

  •  

“Risks Related to Our Business – Risks Related to Drug Discovery, Development
and Commercialization – Our product candidates may have undesirable side effects
when used alone or in combination with other products that prevent their
regulatory approval or limit their use if approved;”

 

  •  

“Risks Related to Our Business – Risks Related to Drug Discovery, Development
and Commercialization – Even if we obtain regulatory approvals, our marketed
drugs will be subject to ongoing regulatory review. If we fail to comply with
continuing U.S. and foreign regulations, we could lose our marketing approvals
and our business would be seriously harmed;”

 

  •  

“Risks Related to Our Business – Risks Related to Drug Discovery, Development
and Commercialization – We and our collaborators will be subject to stringent
federal, state and foreign regulation of sales and marketing of any approved
drug candidate and a failure to comply with these regulations could result in
substantial penalties;”

 

  •  

“Risks Related to Our Business – Risks Related to Our Dependence on Third
Parties – We and our collaborators depend on third parties to conduct our
clinical trials, which may result in costs and delays that prevent us from
obtaining regulatory approval or successfully commercializing our product
candidates;”

--------------------------------------------------------------------------------

  •  

“Risks Related to Our Business – Risks Related to Our Dependence on Third
Parties – If parties on whom we rely to manufacture our product candidates do
not manufacture the active pharmaceutical ingredients or finished products of
satisfactory quality, in a timely manner, in sufficient quantities or at an
acceptable cost, clinical development and commercialization of our product
candidates could be delayed;” and

 

  •  

“Business – Government Regulation – Pharmaceutical Regulation in the United
States.”

(collectively, the “FDA Regulatory Sections”) in the Company’s prospectus
supplement dated January 29, 2009 (the “Prospectus”), forming a part of the
Company’s Registration Statement on Form S-3, (Registration No. 333-151749).

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EXHIBIT C

Form of Opinion of In-house Counsel for the Company

Opinion of in-house counsel for the Company to be delivered pursuant to
Section 3(c) of the Placement Agreement.

References to the Prospectus in this Exhibit C include any supplements thereto
at the Closing Date.

(i) The Company’s authorized equity capitalization is as set forth in the
Registration Statement, the Time of Sale Prospectus and the Prospectus. The
authorized, issued and outstanding capital stock of the Company (including the
Common Stock) conform to the descriptions thereof set forth in the Registration
Statement, the Time of Sale Prospectus and the Prospectus. All of the
outstanding shares of Common Stock have been duly authorized and validly issued,
are fully paid and nonassessable.

(ii) To the best knowledge of such counsel, there are no legal or governmental
actions, suits or proceedings pending or threatened which are required to be
disclosed in the Registration Statement, other than those disclosed therein or
in the Time of Sale Prospectus.

(iii) Except as disclosed in the Time of Sale Prospectus and the Prospectus, to
the best knowledge of such counsel, there are no persons with registration or
other similar rights to have any equity or debt securities registered for sale
under the Registration Statement or included in the offering contemplated by the
Placement Agency Agreement, except for such rights as have been duly waived.

(iv) The Company is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not, individually or in the aggregate,
have a Material Adverse Effect.

(v) The statements in each of the Time of Sale Prospectus and the Prospectus
under the headings “Description of Capital Stock” and “Certain Relationships and
Related Party Transactions,” in the Company’s annual report on Form 10-K for the
year ended September 30, 2008 filed with the SEC on December 18, 2008 under the
headings “Business” and “Risk Factors,” and in Items 14 and 15 of the
Registration Statement, insofar as such statements summarize legal matters,
agreements, documents or proceedings discussed therein, constitute a fair and
accurate summary of those legal matters, agreements, documents or proceedings.

(vi) To the best knowledge of such counsel, the Company (A) is not in violation
of any statute, law, rule, judgment, regulation, order or decree applicable to
the Company of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company or any
of its properties or (B) is not in Default in the performance or observance of
any obligation, agreement, covenant or condition contained in any material
Existing Instrument, except with respect to this clause (B) only, for such
Defaults as would not, individually or in the aggregate, have a Material Adverse
Effect.

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(vii) The Company possesses such valid and current licenses, certificates,
authorizations or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct their respective businesses,
and the Company has not received any notice of proceedings relating to the
revocation or modification of, or non-compliance with, any such license,
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could have a Material
Adverse Effect.

(viii) To the best knowledge of such counsel, the Company is not in violation of
its charter or by-laws.

(ix) Except as disclosed in the Time of Sale Prospectus and the Prospectus, to
the best of such counsel’s knowledge, the Company has not received any notice of
infringement of, and to the best of such counsel’s knowledge, there is no
infringement of Intellectual Property Rights of others, which infringement
would, singly or in the aggregate, have a Material Adverse Effect. The Company
is not a party to or bound by any options, licenses or agreements with respect
to the Intellectual Property Rights of any other person or entity that are
required to be set forth in the Prospectus and are not described in all material
respects. To the best of such counsel’s knowledge, none of the technology
employed by the Company has been obtained or is being used by the Company in
violation of any contractual obligation binding on the Company or any of its
officers, directors or employees or otherwise in violation of the rights of any
persons.

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EXHIBIT D

Form of Opinion of Patent Counsel for the Company

Opinion of Duane Morris LLP, patent counsel for the Company, to be delivered
pursuant to Section 3(c) of the Placement Agreement.

(i) We have no knowledge that the statements relating to Covered Intellectual
Property included in or incorporated by reference into the Time of Sale
Prospectus and the Prospectus under the headings “Risk Factors – Risks Related
to Our Intellectual Property” and “Business – Intellectual Property” in the
Company’s Annual Report on Form 10-K for the fiscal year ended September 30,
2008 contain any statement which, at the time and in light of the circumstances
under which it is made, is false or misleading with respect to any material fact
or omits to state any material fact necessary to make the statements therein, at
the time and in light of the circumstances under which they are made, not
misleading.

(ii) To our knowledge, the Company owns all material Intellectual Property of
which we are aware that is currently employed by the Company in connection with
the business now operated by it, or that is necessary for the manufacture, use
or sale of its presently proposed products as described in the Time of Sale
Prospectus and the Prospectus, or otherwise possesses sufficient right(s) with
respect to such Intellectual Property to permit such use.

(iii) To our knowledge, the Company has not received any communication or notice
alleging any act of infringement of any third party patents by the Company.

(iv) To our knowledge, the claims of all issued and unexpired patents included
in the Covered Intellectual Property are valid and enforceable under the U.S.
patent laws.

(v) To our knowledge, no interference, reexamination, or other judicial or
administrative proceeding pertaining to the validity, enforceability or scope of
the Covered Intellectual Property has been threatened or declared.

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EXHIBIT E

Form of Chief Financial Officer’s Certificate

February 4, 2009

I, Kurt Leutzinger, do hereby certify that I am the Chief Financial Officer of
Pharmasset, Inc., a Delaware company (the “Company”) and, in my capacity as
Chief Financial Officer, do hereby certify that:

 

  1. I am providing this certificate in connection with the offering (the
“Offering”) by the Company of an aggregate of 4,678,000 shares of its common
stock (the “Common Stock”) as described in that certain Registration Statement
on Form S-3 (No. 333-151749), including the prospectus filed with the Securities
and Exchange Commission (the “SEC”) on June 26, 2008 and the prospectus
supplement filed with the SEC on January 30, 2009 pursuant to Rule 424(b)(5) of
the Securities Act (the “Registration Statement”).

 

  2. I am familiar with the accounting, operations and records systems of the
Company.

 

  3. The materials attached as Exhibit A hereto relating to the financial data
of the Company as of dates and periods subsequent to September 30, 2008 are what
they purport to be and, to the best of my knowledge, are correct. As of
December 31, 2008, the Company’s cash and cash equivalent balance was $51.8
million.

 

  4. I have supervised the compilation of and reviewed the circled information
contained on the attached Exhibit B, which is included and/or incorporated by
reference into the Registration Statement. I have performed the following
procedures with respect to the circled information identified on Exhibit B,
which were applied as indicated below and, to my knowledge, such information is
accurate in all material respects:

A. Compared the amount to, or recalculated such amount from, the Company’s
audited consolidated financial statements or related notes to the audited
consolidated financial statements and found it to be in agreement.

B. Compared the amount to, or recalculated such amount from, the Company’s
unaudited consolidated financial statements or related notes to the unaudited
consolidated financial statements and found it to be in agreement.

C. Compared the amount to, or recalculated such amount from, the Company’s
general ledger or other accounting books and records for periods indicated and
found it to be in agreement.

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D. Compared the amount to, or recalculated such amount from, a schedule or
report prepared by the Company from the Company’s accounting records and found
it to be in agreement.

This certificate is being furnished to Leerink Swann LLC as Placement Agent for
the Offering, solely to assist in conducting their investigation of the Company
in connection with the Offering. This certificate shall not be used, quoted or
otherwise referred to without the prior written consent of the Company.