Replacement Warrant to Purchase 195,130 Shares of Common Stock



 Exhibit 4.9 
  

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THE
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. NOTWITHSTANDING THE FOREGOING, THIS WARRANT MAY BE TRANSFERRED AS PROVIDED IN SECTION 14 OF THIS WARRANT. 
  
 Warrant No. C-1R 
 Date: January 20, 2005 
  
 NUVELO, INC. 
  
 WARRANT TO PURCHASE SHARES OF COMMON STOCK 
  
 This Warrant is issued to SAGAMORE HILL
HUB FUND LTD., a Delaware limited partnership (“Holder”), by NUVELO, INC., a Nevada corporation (the “Company”), as of the date set forth
beside the Company’s signature below, to replace lost warrant No. C-1, originally dated November 1, 2002 (the “Lost Warrant”). 
  
 1. Purchase of Shares. Subject to the terms and conditions hereinafter set forth, Holder is entitled, upon surrender of this Warrant at the
principal office of the Company (or at such other place as the Company shall notify Holder in writing), to purchase from the Company up to one hundred ninety-five thousand one hundred thirty (195,130) shares (the “Shares”) of common stock
of the Company (the “Common Stock”), at an exercise price of $2.68 per share (the “Exercise Price”). The Shares and the Exercise Price are as of the date of the Lost Warrant, and do not reflect the 3:1 reverse stock split
effected by the Company on February 23, 2004 or any other adjustments occurring subsequent to the date of the Lost Warrant. The Shares and Exercise Price shall be subject to adjustments occurring since the date of the Lost Warrant, as set forth in
Section 7 hereof. 
  
 2. Exercise Period. This Warrant
shall be fully vested in Holder as of the date hereof and shall be exercisable for a period of five (5) years from November 1, 2002 (the “Exercise Period”). 
  
 3. Method of Exercise. While this Warrant remains outstanding and exercisable during the Exercise Period, Holder may
exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by: (i) the surrender of the Warrant, together with a duly executed copy of the form of Exercise Notice attached hereto as Exhibit A, to the
Secretary of the Company at its principal offices; and (ii) the payment to the Company by cash, check or wire transfer of an amount equal to the aggregate Exercise Price for the number of Shares being purchased. 
  
 4. Net Issuance Provision. In lieu of exercising pursuant to paragraph
3 above, at the Holder’s option, while this Warrant remains outstanding and exercisable during the Exercise 
  

 1. 








 
Period, Holder may exercise this Warrant by surrender of this Warrant as determined below (“Net Issuance”). If the Holder elects the Net Issuance
method, the Company will issue Common Stock in accordance with the following formula: 
  
 X =    Y(A-B) 
     A 
  
 Where: 
  

			
	 X =
	  	the number of shares of Common Stock to be issued to the Holder.
		
	 Y =
	  	the number of shares of Common Stock requested to be exercised under this Warrant
		
	 A =
	  	the fair market value of one (1) share of Common Stock.
		
	 B =
	  	the Exercise Price.

  
 For purposes of this
Warrant, current fair market value of Common Stock shall mean with respect to each share of Common Stock. 
  
 (a) if the Common Stock is traded on a securities exchange, the fair market value shall be deemed to be the average of the closing prices over a
twenty-one (21) day period ending three days before the day the current fair market value of the securities is being determined; 
  
 (b) if actively traded over-the-counter, the fair market value shall be deemed to be the average of the closing prices quoted on the Nasdaq system
(or similar system) over the twenty-one (21) day period ending three days before the day the current fair market value of the securities is being determined; or 
  

(c) if at any time the Common Stock is not listed on any securities exchange or quoted in the Nasdaq System or the over the counter market, the
current fair market value of Common Stock shall be determined in good faith by the Company and Holder, provided that, if the parties are unable to reach agreement within a reasonable period of time, the fair market value of Common Stock shall be
determined in good faith by an independent investment banking firm selected by the American Arbitration Association in accordance with its rules. 
  
 Upon partial exercise by either cash or Net Issuance, the Company shall promptly issue an amended Warrant representing the remaining number of shares
purchasable thereunder. All other terms and conditions of such amended Warrant shall be identical to those contained herein, including, but not limited to, the Exercise Period. 
  
 5. Certificates for Shares. Upon the exercise of the purchase rights evidenced by this Warrant, one or more
certificates for the number of Shares so purchased shall be issued as soon as reasonably practicable thereafter. Upon any partial exercise of this Warrant, the Company will forthwith issue and deliver to Holder a new warrant or warrants of like
tenor as this Warrant for the remaining portion of the Common Stock for which this Warrant may still be exercised. 
  

 2. 








 6. Issuance of Shares. The Company covenants that (a) the Shares, when issued pursuant to the
exercise of this Warrant, will be duly and validly issued, fully-paid and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof (except for any applicable transfer taxes, which shall be paid by Holder) and
(b) during the Exercise Period, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the exercise of this Warrant. 
  
 7. Adjustment of Exercise Price and Number of Shares. The number of
and kind of securities purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows: 
  
 (a) Subdivisions, Combinations and Other Issuances. If the Company shall at any time prior to the expiration of this Warrant subdivide its Common
Stock, by split or otherwise, or combine its Common Stock, or issue additional shares of its Common Stock as a dividend with respect to any shares of its Common Stock, the number of Shares issuable on the exercise of this Warrant shall forthwith be
proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the purchase price payable per share, but the aggregate purchase price
payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 7(a) shall become effective as of the record date of such subdivision, combination or dividend, or in the
event that no record date is fixed, upon the making of such subdivision, combination or dividend. 
  
 (b) Reclassification, Reorganization and Consolidation. In case of any reclassification, capital reorganization, or change in the Common Stock of
the Company (other than as a result of a subdivision, combination, or stock dividend provided for in Section 7(a) above), then, as a condition of such reclassification, reorganization or change, lawful provision shall be made, and duly executed
documents evidencing the same from the Company or its successor shall be delivered to Holder, so that Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the
exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable in connection with such reclassification, reorganization or change by a holder of the same number of shares of Common Stock as were
purchasable by Holder immediately prior to such reclassification, reorganization or change. In any such case, appropriate provisions shall be made with respect to the rights and interest of Holder so that the provisions hereof shall thereafter be
applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof, and appropriate adjustments shall be made to the purchase price per share payable hereunder, provided the aggregate purchase price
shall remain the same. 
  
 (c) Merger and Sale of Assets.
If at any time there shall be a capital reorganization of the shares of the Company’s stock (other than a combination, reclassification, exchange or subdivision of shares otherwise provided for herein), or a merger or consolidation of the
Company with or into another corporation, whether or not the Company is the surviving 
  

 3. 








 
corporation, or the sale of all or substantially all of the Company’s properties and assets to any other person (hereinafter referred to as a
“Merger Event”), then, as a part of such Merger Event, lawful provision shall be made so that the Holder shall thereafter be entitled to receive, upon exercise of the Warrant, the number of shares of common stock or other securities of the
successor corporation resulting from such Merger Event equivalent in value to that which would have been issuable if Holder had exercised this Warrant immediately prior to the Merger Event. In any such case, appropriate adjustment (as determined in
good faith by the Company’ s Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interest of the Holder after the Merger Event to the end that the provisions of this Warrant
(including adjustments of the Exercise Price and number of shares of Common Stock purchasable) shall be applicable to the extent possible. 
  
 (d) Certificate of Adjustment. When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the Warrant
or in the Exercise Price, an officer of the Company shall promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated and the Exercise Price and number of shares purchasable hereunder after giving effect to such adjustment, and shall cause a copy of such certificate to be mailed (by first class
mail, postage prepaid) to Holder. 
  
 8. Compliance with
Securities Laws. Holder hereby represents and warrants that: 
  
 (a) Purchase Entirely for Own Account. This Warrant and the Common Stock issuable upon exercise hereof (collectively, the “Securities”) will be acquired for investment for Holder’s own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof, and Holder has no present intention of selling, granting any participation in or otherwise distributing the same. Holder does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participation to any person with respect to any of the Securities. Holder represents that it has full power and authority to enter into this Warrant. 
  
 (b) Investment Experience. Holder acknowledges that it is able to fend
for itself, can bear the economic risk of its investment and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in this Warrant. Holder also represents it has
not been organized for the purpose of acquiring this Warrant. 
  
 (c) Accredited Investor. Holder is an “accredited investor” within the meaning of Rule 501 of Regulation D of the Securities and Exchange Commission (the “SEC”), as presently in effect. 
  
 (d) Restricted Securities. Holder understands that the Securities are
characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering, and that under such laws and applicable regulations such
securities may be resold without registration under the Act only in certain limited circumstances. In this connection, Holder represents that it is familiar with SEC Rule 144 promulgated under the Act, as presently in effect, and understands the
resale limitations imposed thereby and by the Act. 
  

 4. 








 9. Limitations on Disposition; Legends. 
  
 (a) Without in any way limiting the representations set forth above, Holder further agrees not to make any
disposition of all or any portion of the Securities unless and until (I) there is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with such registration statement,
or (II) Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and if reasonably requested by the Company, Holder
shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such shares under the Act; provided, however, that an opinion of counsel will not be
required for any disposition of Securities by the Holder to its affiliates or subsidiaries. 
  
 (b) Each person (other than the Company) to whom this Warrant or the Shares are transferred, in whole or in part, by means of a permitted transfer must, as a condition precedent to the validity of such
transfer, acknowledge in writing to the Company that such person is bound by the provision of this Warrant to the same extent this Warrant or the Shares would be so subject if retained by Holder. 
  
 (c) Certificates evidencing the Shares will bear the following
legend(s): 
  
 (i) “SHARES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES
LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.” 
  
 (ii) Any legend required by any applicable state securities laws. 
  
 The legend set forth above will be removed by the Company from any certificate evidencing Shares if the Shares are registered under the
Securities Act or upon delivery to the Company of an opinion by counsel, reasonably satisfactory to the Company, that such security can be freely transferred without such a registration statement being in effect. 
  
 (d) Notwithstanding any provision of this Section 9 to the contrary,
an opinion of counsel shall not be required in connection with any transfer in compliance with Rule 144 of the Securities Act. 
  
 10. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant,
but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the fair market value of the Company’s Common Stock. 
  

 5. 








 11. No Stockholder Rights. Prior to exercise of this Warrant, Holder shall not be entitled to any
rights of a stockholder with respect to the Shares, including (without limitation) the right to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of stockholder meetings, and Holder, as
such, shall not be entitled to any notice or other communication concerning the business or affairs of the Company, except as expressly set forth herein. 
  
 12. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this
Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at
its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount. 
  
 13. Notices. All notices or other communications hereunder shall be in writing and shall be deemed given when (i) personally delivered, (ii) three
days after being sent by prepaid certified or registered U.S. mail, or one day after being sent, if sent by nationally recognized overnight courier, to the address of the party to be noticed as set forth herein or such other address as such party
last provided to the other by written notice, or (iii) upon receipt of electronic confirmation, if by facsimile. All notices shall be sent to the addresses and facsimile numbers set forth below or such other address as may be given from time to time
under the terms of this notice provision: 
  
 If
to the Company: 
  
 Nuvelo, Inc. 
 675 Almanor Avenue 
 Sunnyvale, California 94085 
 Attention: President 
 Fax: (408) 524-8141 
  
 If to Holder: 
  
 At the address and facsimile number 
 indicated on the signature page hereof. 
  
 14. Transfer of Warrant; Successors and Assigns. Subject to compliance with the terms of Section 9 hereof, this Warrant and all rights hereunder are transferable in whole or in part by the Holder to any person or entity upon written
notice to the Company enclosing a properly executed assignment (in the form of Exhibit B hereto). In the event of a partial transfer, the Company shall issue to the holders one or more appropriate new warrants. The terms and provisions of
this Warrant shall inure to the benefit of, and be binding upon, the Company and the Holder, and their respective successors and assigns. Except as permitted above, any purported transfer hereof shall be null and void and the Company is hereby
expressly authorized to instruct its transfer agent (which may be the Company itself) to not honor any such purported transfer. 
  

 6. 








 15. Amendments and Waivers. Any term of this Warrant may be amended and the observance of any term
of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of each of the parties hereto. Any waiver or amendment effected in accordance with this section shall be
binding upon Holder and the Company. 
  
 16. Governing Law.
This Warrant shall be governed by the laws of the State of California as applied to agreements among California residents made and to be performed entirely within the State of California. 
  
 17. Entire Agreement. This Warrant and the other documents delivered pursuant hereto or referred to herein,
constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof. 
  
 18. Severability. In case any provision of this Warrant shall be invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby. 
  
 19. Counterparts. This Warrant may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. 
  
 20. Survival. Except as expressly set forth herein, the
representations, warranties, covenants and agreements made herein shall survive the closing of the transactions contemplated hereby. 
  
 21. Notices of Certain Transactions. 
  
 In the event that: 
  
 (a) the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time deliverable upon the exercise of
this Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right
to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or 
  
 (b) of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the
Company with or into another corporation (other than a consolidation or merger in which the Company is the surviving entity), or any transfer of all or substantially all of the assets of the Company, or 
  
 (c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company, 
  
 then, and in each such case, the Company will mail
or cause to be mailed to the Holder of this Warrant a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such
dividend, distribution or right, or (ii) the effective date on which such reorganization, 
  

 7. 








 
reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is to take place, and the time, if any, to be fixed, as of which
the holders of record of Common Stock (or such other stock or securities at the time deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up) are to be determined. Such notice
shall be mailed at the earlier of (i) ten (10) days, or (ii) as soon as reasonably practicable, prior to the record date or effective date for the event specified in such notice. 
  
 22. Piggyback Registration Rights. 
  
 (a) If the Company decides to register any of its Common Stock under the Securities Act of 1933, as amended (the “Act”) on a form that
would be suitable for a registration involving the Shares, the Company shall so notify Holder (which shall include, if applicable, a list of the jurisdictions in which the Company intends to attempt to qualify such securities under the applicable
Blue Sky or other state securities laws) and afford Holder an opportunity to include in such registration statement all or any part of the Shares issued or reserved for issuance to Holder upon exercise of this Warrant. If Holder desires to include
in any such registration statement all or any part of such Shares, Holder shall, within (10) ten days after receipt of the above-described notice from the Company, so notify the Company in writing, and in such notice shall inform the Company of the
number of Shares Holder wishes to include in such registration statement. In the event Holder elects to include its Shares in such registration statement (or any related qualification under Blue Sky laws or other compliance), subject to the terms
and conditions of this Section 22, the Company shall include in such registration, and in any underwriting involved therein, the number of Shares specified by Holder. If Holder decides not to include all of the Shares issued or reserved for issuance
to Holder upon the exercise of this Warrant in any registration statement thereafter filed by the Company, Holder shall nevertheless continue to have the right to include any such Shares in any subsequent registration statement or registration
statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein. 
  
 (b) In connection with any registration under this Section 22 involving an underwriting of shares of the Company’s capital stock, the Company
shall not be required under this Section 22 to include any of the Holder’s Shares in such underwriting unless the Holder accepts the terms of the underwriting as agreed upon between the Company and the underwriters selected by the Company (or
by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. In connection with any other registration
under this Section 22, the Company shall only be required under this Section 22 to include Holder’s Shares in such registration only in such quantity as the Board of Directors in good faith determine in their sole discretion will not jeopardize
the success of the offering. In connection with this subsection 22(b), the Company shall use its reasonable best efforts to insure that Holder will be treated in a similar manner as the other shareholders exercising piggyback registration rights in
the same registration of shares of common stock. If, pursuant to its rights under this subsection 22(b), the Company elects not to include all or some of the Shares issued or reserved for issuance to Holder upon the exercise of this Warrant in any
registration statement filed by the Company, Holder shall nevertheless continue to have the right to include any such Shares in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings
of its securities, all upon the terms and conditions set forth in this Section 22. 
  

 8. 








 (c) To the extent permitted by law, the Company agrees to indemnify and hold harmless Holder and
each person, if any, who controls such Holder within the meaning of the Act or the Securities Exchange Act of 1934, as amended (the “1934 Act”) from and against any losses, claims, damages or liabilities to which they may become subject
under the Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages or liabilities arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”): (i) any
untrue or alleged untrue statement of material fact contained in any registration statement, or any amendment or supplement thereto, or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (iii) any violation of the Act or the 1934 Act in connection therewith, and will reimburse Holder and or controlling person for any legal or other expenses reasonably incurred in connection with
investigating or defending any such action or claim as such expenses are incurred; provided, however, that the indemnity agreement contained in this subsection 22(c) shall not apply to amounts paid in settlement of any such losses, claims,
damages or liabilities if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case of any such losses, claims, damages or liabilities to the
extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with the written information furnished or expressly for use in connection with such registration by such Holder or controlling person.

  
 (d) To the extent permitted by law, Holder agrees to
indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement and each person, if any, who controls the Company within the meaning of the Act or the 1934 Act, from and against any
losses, claims, damages or liabilities to which they may become subject under the Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages or liabilities arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by Holder expressly for use in connection with such registration, and will reimburse Company or any such person
intended to be indemnified by pursuant to this subsection 22(d), for any legal or other expenses reasonably incurred in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that
the indemnity agreement contained in this subsection 22(d) shall not apply to amounts paid in settlement of any such losses, claims, damages or liabilities if such settlement is effected without the consent of the Holder (which consent shall not be
unreasonably withheld); provided, that, in no event shall any indemnity under this subsection 22(d) exceed the gross proceeds from the offering received by Holder. 
  
 (e) If any Shares are included in a registration statement relating to the direct issuance of common stock by the
Company, all expenses incurred by the Company in complying with provision (a) above (expressly excluding Selling Expenses, as defined below), including, without limitation, all registration and filing fees (including all expenses incident to filing
with the National Association of Securities Dealers, Inc.), fees and expenses of complying with securities and blue sky laws, expense allowances of the underwriters, printing expenses, fees and disbursements of counsel or other advisor to the
Company, and of the accountants, are herein called “Registration Expenses.” All fees and expenses of counsel for any Holder and all underwriting fees and commissions applicable to the Shares covered by any such registration are 

 

 9. 








 
herein called “Selling Expenses.” The Company shall pay all Registration Expenses in connection with each registration pursuant to Section 22(a).
All Selling Expenses in connection with each registration pursuant to Section 22(a) shall be borne by the Holder. 
  
 (f) If any Shares are included in a registration statement relating to the resale of common stock of the Company, Holder shall pay its pro rata
portion of all reasonable registration expenses agreed to be paid by the other selling shareholders. 
  
 (g) The Holder shall not have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of
any controversy that might arise with respect to the interpretation or implementation of this Section 22. 
  
 (h) No Holder shall be entitled to exercise any right provided in this Section 22 when all shares held by such Holder can be sold pursuant to Rule
144 of the Act within a ninety (90) day period. 
  
 23.
Counterparts. This Warrant may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. 
  
 (Remainder of page intentionally left blank) 
  

 10. 








 IN WITNESS WHEREOF, this Warrant is executed as of the 20th day of January 2005. 
  

			
	COMPANY:
	
	NUVELO, INC.
		
	By:	 	 /s/ Lee Bendekgey


	Name:
	Title:


  

			
	COMPANY:
	
	HOLDER:
	
	SAGAMORE HILL HUB FUND LTD.
	
	 /s/ Steven H. Bloom


	Signature
	
	Steven H. Bloom
	Authorized Signatory
		
	Address:	 	Ten Glenville Street
	 	 	Greenwich, CT 06831
		
	Facsimile:	 	(203) 532-7673


  

 11. 








 EXERCISE NOTICE 
  
 NUVELO, INC. 
  
 Attention: Chief Financial Officer 
  
 1. The undersigned hereby elects 
  
 (a) to purchase, pursuant to the provisions of the Warrant to Purchase Shares of Common Stock issued by Nuvelo, Inc.
and held by the undersigned, the original of which is attached hereto,
                                        
shares of Common Stock of Nuvelo, Inc. Payment of the exercise price per share required under such Warrant accompanies this Exercise Notice; or 
  
 (b) to make a Net Issuance exercise as provided in Section 4 of the attached Warrant, to purchase
                                        
shares of Common Stock of Nuvelo, Inc., pursuant to the terms of the attached Warrant. 
  
 2. The undersigned hereby represents and warrants that the undersigned is acquiring such shares for its own account for investment purposes only and, unless such shares have been registered in compliance with
applicable securities laws or an applicable exemption is available therefrom, not for resale or with a view to distribution of such shares or any part thereof. 
  

	
	HOLDER:
	
	  


	 Name:

	 Title:

	
	 Date:


	
	 Address:

	
	  


	  


	
	 Name in which shares should be registered:

	
	  




  

 12. 








 EXHIBIT B 
  

ASSIGNMENT 
  
 (To be executed only upon assignment of attached Warrant (the “Warrant Certificate”)) 
  
 For value received,
                     hereby sells, assigns and transfers unto
                                        
the within Warrant Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint
                                        
                     attorney, to transfer said Warrant Certificate on the books of the within-named Company with respect to the number of
Warrants set forth below, with full power of substitution in the premises: 
  

					
	 Name(s) of Assignee(s)

	 	 Address

	 	 # of Warrants



  
  
  
  
 And if said
number of Warrants shall not be all the Warrants represented by the Warrant Certificate, a new Warrant Certificate is to be issued in the name of said undersigned for the balance remaining of the Warrants registered by said Warrant Certificate.

  
 Dated: 
  
 Signature: 
  
 Notice: The signature to the foregoing Assignment must correspond to the name as written upon the face of this security in every particular, without alternation or any
change whatsoever; signature(s) must be guaranteed by an eligible guarantor institution (banks, stock brokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program) pursuant to
Securities and Exchange Commission Rule 17Ad-15. 
  

 13.