Document:

EXHIBIT 4.1

                      STOCK AND WARRANT PURCHASE AGREEMENT

      This Stock and Warrant Purchase Agreement (the "Agreement") is made as of
May 11, 2001 between NASTECH PHARMACEUTICAL COMPANY INC., a Delaware corporation
(the "Company"), and the purchasers who are signatories hereto (the
"Purchasers").

      WHEREAS, the Company wishes to sell and the Purchasers desire to purchase
shares (the "Shares") of the Company's Common Stock, $.006 par value per share
("Common Stock") and Warrants (as defined in Section 1.3), as such are being
offered by the Company pursuant to an Offering Memorandum dated February 5, 2001
(which together with all exhibits thereto and any amendment or supplement
thereto is referred to herein as the "Offering Memorandum"), this Agreement and
the documents as set forth herein;

      NOW, THEREFORE, the parties hereto hereby agree as follows:

      1. Purchase and Sale of Shares and Warrants.

            1.1 Sale to the Purchasers. Subject to the terms and conditions
hereof, the Company will issue and sell to each Purchaser the number of Shares
set forth opposite such Purchaser's name on the signature page and the number of
Warrants to purchase the number of Shares of Common Stock as set forth opposite
such Purchaser's name on the signature page hereto for the purchase price
indicated on the signature page hereto ("Purchase Price."). The obligations of
each Purchaser hereunder are several and not joint and no Purchaser shall be
obligated to purchase any number of Shares in excess of the number set forth
opposite such Purchaser's name on the signature page hereto.

            1.2 Aggregate Sale. Pursuant to this Agreement, the Company shall
sell up to 90.988 Units, consisting of up to an aggregate of 1,364,820 Shares of
Common Stock and up to an aggregate of 682,410 Warrants to purchase Common Stock
of the Company. Each Unit consists of 15,000 shares of Common Stock and 7,500
Warrants. The Unit Purchase Price will be equal to the product of 15,000
multiplied by $4.875. Each Unit will be sold at a purchase price of $73,125 per
Unit. Each Warrant issued shall be in the form of Exhibit H attached hereto and
shall entitle the holder to purchase one Share of Common Stock of the Company at
an exercise price equal to 130% of $4.875. The Warrants shall be exercisable for
a term of five years from the date of issuance.

            1.3 Payment of Purchase Price. On or prior to the Closing Date, each
Purchaser will deliver to State Street Bank and Trust Company as Escrow Agent
(the "Escrow Agent") the amount of the aggregate Purchase Price for the Units
purchased by such Purchaser hereunder, by wire transfer of funds to the Escrow
Agent. The Purchase Price shall be maintained in a segregated account until the
Closing Date and shall be released either (a) to the Company upon the
consummation of the transaction contemplated hereunder; or (b) to the Purchaser
upon the termination of this Agreement in accordance with Section 7.

      2. Closing Date and Delivery.

            2.1 Closing Date. The closing of the purchase and sale of the Shares
and Warrants hereunder (the "Closing") will be held at such time (the "Closing
Date") as shall be agreed upon by the Company, the Placement Agent and the
Purchasers (optionally at the offices of the Placement Agent, 650 Fifth Avenue,
New York, NY 11019). The Closing Date shall occur upon receipt of subscriptions
for all of the Units offered by the Company, (or such lesser amount as
determined by the Company), but in no event shall the Closing Date be later than
March 31, 2001.

            2.2 Deliveries at Closing. At the Closing the Company shall deliver
the following to each Purchaser: (a) a stock certificate registered in such
Purchaser's name, or in such nominee name(s) as designated by the Purchaser in
writing, representing the Shares purchased by such Purchaser; (b) Warrants in
such Purchaser's name, or in such nominee name(s) as designated by the Purchaser
in writing; (c) an opinion of Roberts, Sheridan and Kotel, The New York Practice
of Dickstein Shapiro's Corporate & Finance Group dated the Closing Date and
substantially in the form attached hereto as Schedule I ("Opinion of Counsel");
and (d) a certificate, signed by the President of the Company, to the effect
that (i) the representations and warranties of the Company contained in this
Agreement are true and correct in all material respects on and as of the Closing
Date as though newly made on and as of that date (except for representations and
warranties which speak as of the date of the Agreement or as of another specific
date or period, which shall continue to be true and correct in all material
respects as of the respective dates and for the respective periods covered
thereby) and (ii) the Company has performed and complied with, in all material
respects, all of its covenants contained in this Agreement and required to be
performed or complied with on or before the Closing. Each Purchaser's obligation
to purchase the Shares shall be subject to the following conditions: (a) the
accuracy of the representations and warranties made by the Company herein and
the fulfillment of those undertakings of the Company to be fulfilled prior to
Closing; and (b) delivery of the Opinion of Counsel.

                  Upon satisfaction of all the conditions to Closing set forth
in this Agreement and the delivery of the certificates representing the Shares
and of the Warrants to the Purchaser, the Escrow Agent shall be directed to

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deliver to the Company the Purchase Price for the Shares, less the Placement
Agent fee due to the Placement Agent and any expense that the Company has agreed
to reimburse to the Placement Agent and its counsel, which the Escrow Agent
shall pay directly to them in accordance with the Company's engagement letter
with the Placement Agent.

      3. Representations and Warranties by the Company. The Company represents
and warrants to each Purchaser as of the date hereof and as of the Closing Date
that:

            3.1 Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted. The
Company is qualified to do business and is in good standing as a foreign
corporation in every jurisdiction in which the failure to so qualify would have
a material adverse effect on the financial condition or business of the Company.

            3.2 Changes. Except as set forth herein and in the Offering
Memorandum, since September 30, 2000, the Company has not, to the extent
material to the Company, (i) incurred any debts, obligations or liabilities,
absolute, accrued or contingent, whether due or to become due, other than in the
ordinary course of business, (ii) mortgaged, pledged or subjected to lien,
charge, security interest or other encumbrance any of its assets, tangible or
intangible, (iii) waived any debt owed to the Company or its subsidiaries, (iv)
satisfied or discharged any lien, claim or encumbrance or paid any obligation
other than in the ordinary course of business, (v) declared or paid any
dividends, or (vi) entered into any transaction other than in the usual and
ordinary course of business.

            3.3 Litigation. Except as set forth in the Offering Memorandum,
there are no legal actions, suits, arbitrations or other legal, administrative
or governmental proceedings pending or, to the best of the Company's knowledge,
threatened against the Company or its properties, assets or business.

            3.4 Compliance with Other Instruments. Except for such matters
which, either individually or in the aggregate, would not have a material
adverse effect on the financial condition or business of the Company, the
execution and delivery of, and the performance and compliance with, this
Agreement and the Warrants and the transactions contemplated hereby or thereby,
with or without the giving of notice, will not (i) result in any breach of, or
constitute a default under, or result in the imposition of any lien or
encumbrance upon any asset or property of the Company pursuant to any agreement
or other instrument to which the Company is a party or by which it or any of its
properties, assets or rights is bound or affected, (ii) violate the Certificate
of Incorporation or Bylaws of the Company, or , subject to the accuracy of the
representations and warranties of the Purchasers contained in Article 4 of this
Agreement, any law, rule, regulation, judgment, order or decree, or (iii) except
for the registration of the Shares and the Warrant Shares under the Securities
Act of 1933, as amended (the "Securities Act"), the listing of the Shares and
the Warrant Shares on the NASDAQ Stock Market and such consents, approvals,
authorizations, registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in connection with the
purchase of the Shares and the Warrants by the Purchasers, require any consent,
approval, authorization or order of or filing with any court or governmental
agency or body. The Company is not in violation of its Certificate or Bylaws nor
in violation of, or in default under, any lien, mortgage, lease, agreement or
instrument, except for such defaults which would not, individually or in the
aggregate, have a material adverse effect on the financial condition or business
of the Company. The Company is not subject to any restriction which would
prohibit the Company from entering into or performing its obligations under this
Agreement or the Warrants, except for such restrictions which would not,
individually or in the aggregate, have a material adverse effect on the ability
of the Company to perform its obligations under this Agreement and the Warrants.

            3.5 Reports and Financial Statements. The Purchasers have obtained
copies of the Company's Form 10-K/A for the year ended December 31, 1999, the
Company's Proxy Statement in connection with the 1999 Annual Meeting of
Stockholders, the Company's Registration Statement on Form S-2/A, dated January
12, 2001, the quarterly report on Form 10-Q for the period ended September 30,
2000, and a current report on Form 8-K dated August 8, 2000 filed by the Company
with the Securities and Exchange Commission (the "SEC"), in each case without
exhibits thereto (collectively with all filings of the Company with the SEC, the
"SEC Reports"). As of their respective filing dates, the SEC Reports were
prepared in all material respects in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such SEC Reports. The SEC
Reports, when read as a whole, as updated by the Offering Memorandum, and the
Offering Memorandum when read together with the exhibits thereto, do not contain
any untrue statements of a material fact and do not omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. The audited consolidated financial
statements and unaudited interim financial statements of the Company included in
the SEC Reports have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis (except as may be
indicated therein or in the notes thereto) and fairly present, in all material
respects, the financial position of the Company as at the dates thereof and the
results of its operations and cash flows for the periods then ended subject, in
the case of the unaudited interim financial statements, to normal year-end
adjustments and any other adjustments described in such financial statements.

            3.6 Shares. The Shares, the Warrants and the Warrant Shares, when
issued and paid for pursuant to the terms of this Agreement as the case may be,
will be duly and validly authorized, issued and outstanding, fully paid,
nonassessable and free

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and clear of all pledges, liens, encumbrances and restrictions (other than
arising under federal or state securities laws). The authorized capital stock of
the Company, including the Shares, conforms, and when issued, the Warrant Shares
will conform, to all statements relating thereto included in the documents set
forth herein. The issuance of the Shares, the Warrants and the Warrant Shares is
not subject to any preemptive or other similar rights. The Company has duly
reserved 798,420 shares of its authorized but unissued Common Stock for issuance
upon exercise of the Warrants by the Purchasers and the Placement Agent, and
such shares shall remain so reserved (subject to reduction from time to time for
Common Stock issued upon the exercise of the Warrants), as long as the Warrants
are exercisable.

            3.7 Securities Laws. Subject to the accuracy of the representations
and warranties of the Purchasers contained in Article 4 of this Agreement, the
offer, sale and issuance of the Shares, the Warrants and the Warrant Shares as
contemplated by this Agreement are exempt from the registration requirements of
the Securities Act, and from the registration or qualifications requirements of
the laws of any applicable state or other U.S. jurisdiction.

            3.8 Capital Stock. As of December 31, 2000, (i) 6,803,485 shares of
the Company's Common Stock were issued and outstanding, (ii) no shares of the
Company's Preferred Stock were issued and outstanding, and (iii) options and or
warrants to purchase 2,130,745 Shares of the Company's Common Stock were issued
and outstanding. There are also 1,249,500 shares of common stock that are
issuable under the equity line of credit and under the warrants which may be
granted in the future under the equity line of credit. All of the outstanding
Shares of the Company's capital stock are validly issued, fully paid and
nonassessable. Except as set forth in this Section 3.8 or the Offering
Memorandum, as of December 31, 2000, there are no outstanding subscriptions,
options, warrants, calls, contracts, demands, commitments, conversion rights or
other agreements or arrangements of any character or nature whatever under which
the Company is or may be obligated to issue its Common Stock, Preferred Stock or
warrants or options to purchase Common Stock or Preferred Stock. No holder of
any security of the Company is entitled to any preemptive or similar rights to
purchase any securities of the Company.

            3.9 Corporate Acts and Proceedings. This Agreement has been duly
authorized by the requisite corporate action and has been duly executed and
delivered by an authorized officer of the Company, and is a valid and binding
obligation of the Company, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and as to limitations on the enforcement of the remedy of
specific performance and other equitable remedies. The requisite corporate
action necessary to the authorization, reservation, issuance and delivery of the
Shares, the Warrants and the Warrant Shares has been taken by the Company. Upon
execution and delivery thereof by a duly authorized officer of the Company, the
Warrants will be valid and binding obligations of the Company, enforceable in
accordance with their terms except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and as to limitations
on the enforcement of the remedy of specific performance and other equitable
remedies.

            3.10 No Implied Representations. All of the Company's
representations and warranties are contained in this Agreement, and no other
representations or warranties by the Company shall be implied.

            3.11 Filing of Reports. Since the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1997, the Company has filed with the
SEC all reports and other material required to be filed by it therewith pursuant
to Section 13, 14 or 15(d) of the Exchange Act and the Company is eligible to
register the offer and resale of the Shares and the Warrant Shares on a
Registration Statement on Form S-3, or a successor form.

            3.12 Compliance with Laws. The business and operations of the
Company have been conducted in accordance with all applicable laws, rules and
regulations of all governmental authorities, except for such violations which
would not, individually or in the aggregate, have a material adverse effect on
the financial condition or business of the Company.

            1.13 Closing Date. Except as to representations and warranties that
speak of a specific date or period, all the representations and warranties made
by the Company in this Section 3 shall be true and complete from the date of
this Agreement through the Closing Date and the Company shall provide each
Purchaser, before the Closing, with any documents or information necessary for
such representations and warranties to remain true and complete as of the
Closing Date.

            3.14 Proprietary Rights. The Company owns or is licensed to use all
patents, patent applications, inventions, trademarks, trade names, applications
for registration of trademarks, service marks, service mark applications,
copyrights, know-how, manufacturing processes, formulae, trade secrets, licenses
and rights in any thereof and any other intangible property and assets (herein
called the "Proprietary Rights") which are material to the business of the
Company, as now conducted or as proposed to be conducted. The Company does not
have any knowledge of, and the Company has not given or received any notice of,
any pending conflicts with or infringement of the rights of others with respect
to any Proprietary Rights or with respect to any license of Proprietary Rights.
No action, suit, arbitration, or legal, administrative or other proceeding, or
investigation is pending or, to the knowledge of the Company, threatened, which
involves any Proprietary Rights. The Company is not subject to any judgment,
order, writ, injunction or decree of any court or any Federal, state, local,
foreign or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or any arbitrator, and has not entered
into or is a party to any contract which restricts or impairs the use of any
such Proprietary Rights in a manner which would have a material adverse effect
on the use of any of the Proprietary Rights. To the knowledge of the Company, no
Proprietary Rights used by the Company, and no services or

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products sold by the Company, conflict with or infringe upon any proprietary
rights owned or licensed by any third party. The Company has not received
written notice of any pending conflict with or infringement upon such
third-party proprietary rights. No claims have been asserted by any person with
respect to the validity of the Company's ownership or right to use the
Proprietary Rights and, to the knowledge of the Company, there is no reasonable
basis to believe that such a claim will be asserted. To the knowledge of the
Company, the Proprietary Rights are valid and enforceable.

            3.15 Compliance with Environmental Laws. Except as would not, singly
or in the aggregate, have a material adverse effect on the Company, the Company
is not in violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and to the Company's knowledge,
no expenditures material to the Company are or will be required to comply with
any such existing statute, law or regulation. To the Company's knowledge, the
Company does not have any liability to any governmental authority or other third
party arising under or as a result of any such past or existing statute, law or
regulation, which liability would be material to the Company.

            3.16 Permits, Licenses, Etc. The Company owns, possesses or has
obtained, and is operating in compliance with, all governmental, administrative
and third party licenses, permits, certificates, registrations, approvals,
consents and other authorizations (collectively, "Permits") necessary to own or
lease (as the case may be) and operate its properties, whether tangible or
intangible, and to conduct its businesses or operations as currently conducted,
except such licenses, permits, certificates, registrations, approvals, consents
and authorizations the failure of which to obtain would not have a material
adverse effect on the business, properties, operations, financial condition or
results of operations of the Company, and the Company has not received any
notice of proceedings relating to the revocation, modification or suspension of
any Permits or any circumstance which would lead it to believe that such
proceedings are reasonably likely.

            3.17 Insurance. The Company maintains insurance of the type and in
the amount reasonably adequate for its business, including, but not limited to,
insurance covering all real and personal property owned or leased by the Company
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against by similarly situated companies, all of which
insurance is in full force and effect.

            3.18 Registration Rights. Except as set forth in the Offering
Memorandum, there are no persons with registration or other similar rights to
have any securities registered pursuant to the Registration Statement or
otherwise registered by the Company under the Securities Act.

      4. Representations and Warranties by the Purchasers; Restrictions on
Transfer.

      Each Purchaser severally represents and warrants to, and covenants and
agrees with, the Company, as of the Closing Date, as follows:

            4.1 Authorization. Purchaser is duly organized and in good standing
in the jurisdiction of its organization and has all requisite legal and
corporate or other power and capacity and has taken all requisite corporate or
other action to execute and deliver the Agreement, to purchase the Shares and
the Warrants to be purchased by it and to carry out and perform all of its
obligations under the Agreement. This Agreement has been duly authorized,
executed and delivered and constitutes the legal, valid and binding obligation
of Purchaser, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and as to limitations on the enforcement of the remedy of
specific performance and other equitable remedies.

            4.2 Investor Status. Purchaser is an "Accredited Investor" as
defined in Rule 501 of Regulation D under the Securities Act or a "Qualified
Institutional Buyer," as such term is defined in Rule 144A of the Securities
Act. Purchaser acknowledges receiving and reviewing the documents comprising the
Offering Memorandum, including the SEC Documents. Purchaser is aware of the
Company's business affairs and financial condition and has had access to and has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Shares and the Warrants. Purchaser has
such business and financial experience as is required to give it the capacity to
utilize the information received, to evaluate the risks involved in purchasing
the Units and making an informed decision about purchasing the Units, and to
protect its own interests in connection with the purchase of the Units and is
able to bear the risks of an investment in the Units. Purchaser is not itself a
"broker" or a "dealer" as defined in the Exchange Act of 1934 and is not an
"affiliate" of the Company as defined in Rule 405 of the Securities Act.

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            4.3 Investment Intent. Purchaser is purchasing the Shares and the
Warrants for its own account as principal, for investment purposes only, and not
with a present view to or for resale, distribution or fractionalization thereof,
in whole or in part, within the meaning of the Securities Act. Purchaser
understands that its acquisition of the Shares and the Warrants has not been
registered under the Securities Act or registered or qualified under any state
securities law in reliance on specific exemptions therefrom, which exemptions
may depend upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein. Purchaser has, in connection with its
decision to purchase the number of Shares and the Warrants set forth in this
Agreement, relied solely upon the Offering Memorandum and the representations
and warranties of the Company contained herein. Purchaser will not, directly or
indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of) any of the
Shares or Warrants, except in compliance with the Securities Act and the rules
and regulations promulgated thereunder.

            4.4 Registration or Exemption Requirements. Purchaser further
acknowledges and understands that neither the Shares nor the Warrants may be
resold or otherwise transferred except in a transaction registered under the
Securities Act or unless an exemption from such registration is available.
Purchaser is able to bear the economic risk of holding the Shares for an
indefinite period of time and can afford a complete lost of its investment.
Purchaser understands that until the Shares and Warrant Shares have been
registered for resale by the Purchasers in compliance with applicable securities
laws, the certificates evidencing the Shares, the Warrants and Warrant Shares
will be imprinted with a legend that prohibits the transfer of the Shares,
Warrants and Warrant Shares unless (a) such transaction is registered or such
registration is not required, and (b) if the transfer is pursuant to an
exemption from registration an opinion of counsel reasonably satisfactory to the
Company is obtained to the effect that the transaction is not required to be
registered or is so exempt.

            4.5 Restriction on Sales, Short Sales and Hedging Transactions.
Purchaser represents and agrees that during the period from the date Purchaser
was first contacted with respect to the potential purchase of Shares and
Warrants through the date of the execution of the Agreement by Purchaser,
Purchaser did not, and from such date through the effectiveness of the
Registration Statement (as defined below), Purchaser will not, directly or
indirectly, execute or effect or cause to be executed or effected any short
sale, option or equity swap transactions in or with respect to the Company's
Common Stock or any other derivative security transaction the purpose or effect
of which is to hedge or transfer to a third party all or any part of the risk of
loss associated with the ownership of the Shares and Warrants by the Purchaser.

            4.6 No Legal, Tax Or Investment Advice. Purchaser understands that
nothing in this Agreement or any other materials presented to Purchaser in
connection with the purchase and sale of the Shares and the Warrants constitutes
legal, tax or investment advice. Purchaser has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Shares and the Warrants.

            4.7 Closing Date. All the representations and warranties made by the
Purchaser in this Section 4 shall be true and complete from the date of this
Agreement through the Closing Date and the Purchaser shall provide the Company,
before the Closing, with any documents or information necessary for such
representations and warranties to remain true and complete as of the Closing
Date.

            4.8 Compliance with Other Instruments. The execution and delivery of
this Agreement, the purchase of the Shares and the Warrants, and the performance
by the Purchaser of all other obligations of the Purchaser contemplated hereby
will not (i) violate any law, rule, regulation, judgment, order or decree
applicable to Purchaser, or (ii) require any consent, approval, authorization or
order of or filing with any court or governmental agency or body. Purchaser is
not subject to any restriction which would prohibit it from entering into or
performing its obligations under this Agreement, except for such restrictions
which would not, individually or in the aggregate, have a material adverse
effect on the ability of Purchaser to perform its obligations under this
Agreement. There is no action, suit, order, judgment or proceeding pending or,
to the knowledge of Purchaser, threatened against or affecting Purchaser that,
individually or when aggregated with one or more other actions, suits, orders,
judgments or proceedings, has or might reasonably be expected to have a material
adverse effect on Purchaser's ability to perform any of its obligations
hereunder or under any of the other agreements and instruments to be executed
and delivered by Purchaser in connection herewith.

            4.9 Compliance with Insider Trading Rules. Purchaser agrees to
comply with the laws and rules pertaining to inside information as they may
relate to the purchase or sale of the Company's securities at all times after
the effective date of the Registration Statement.

            4.10. Reliance on Representations. Purchaser acknowledges that the
Company and its counsel are entitled to rely on the representations made above.

      5. Covenants

            5.1 Registration Requirements.

                  (a) Promptly after, but not later than 30 days after, the
Closing Date, the Company shall prepare and file a registration statement (the
"Registration Statement") with the SEC under the Securities Act to register the
offer and resale of the Shares and the Warrant Shares by the Purchasers
(together, the "Registrable Securities"), and shall use its best efforts to
cause such

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Registration Statement to become effective within 120 days from the Closing Date
or not more than five days from the date upon which the Securities and Exchange
Commission shall allow the Company to accelerate effectiveness, whichever is
shorter. In the event that the Company shall fail to obtain effectiveness of the
Registration Statement within the 120-day period following the Closing Date, the
Company hereby agrees that it shall pay to each Purchaser cash in an amount
equal to 2% of the total purchase price of the shares of common stock purchased
by such Purchaser for each and every thirty (30) day period with respect to
which such Registration Statement shall not be effective. Until such time as the
Registration Statement is effective, the Company shall not grant any
registration rights or other rights to register securities under the Securities
Act unless such rights are subordinate to the rights of the Purchasers under
this Section 5.1 or will not have the effect of delaying a sale or limiting the
number of securities which may be sold by the Purchasers pursuant to the
Registration Statement or otherwise adversely affect the rights of the
Purchasers under this Section 5.1.

                  (b) The Company shall pay all Registration Expenses (as
defined below) in connection with any registration, qualification or compliance
hereunder, and each Purchaser shall pay all Selling Expenses (as defined below)
and other expenses that are not Registration Expenses relating to the
Registrable Securities resold by such Purchaser. "Registration Expenses" shall
mean all expenses, except for Selling Expenses, incurred by the Company in
complying with the registration provisions herein described, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses and the expense of any special audits incident to or required by
any such registration. "Selling Expenses" shall mean all selling commissions,
underwriting fees and stock transfer taxes applicable to the Registrable
Securities and all fees and disbursements of counsel for any Purchaser.

                  (c) If the Registration Statement becomes effective, the
Company will use its best efforts to: (i) keep such registration effective until
the second anniversary of the date such Registration Statement is declared
effective (or, in the case of Warrant Shares, the first anniversary of the date
of issuance of such Warrant Shares, but in any event not later than the fourth
anniversary of the date such Registration Statement is declared effective);
provided, however, if Rule 144 is amended so that the longest period that Rule
144 restricts the manner in which privately placed securities may be sold is a
period shorter than two years, then the period required by this clause shall be
reduced to (A) such shorter period, (B) such date as all of the Registrable
Securities have been resold, or (C) such date as all Registrable Securities may
be sold pursuant to Rule 144 (or any successor rule); (ii) except as provided in
Section 5.1(f), prepare and file with the SEC such amendments and supplements to
the Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by the
Registration Statement; (iii) furnish such number of prospectuses and other
documents incident thereto, including any amendment of or supplement to the
prospectus, as Purchaser from time to time may reasonably request; (iv) cause
the Shares and the Warrant Shares to be quoted on each quotation service on
which the Common Stock of the Company is then quoted; (v) provide a transfer
agent and registrar for all securities registered pursuant to the Registration
Statement and a CUSIP number for all such securities; and (vi) file the
documents required of the Company and otherwise use its best efforts to maintain
requisite blue sky clearance in all U.S. jurisdictions in which any of the
Shares are originally sold and all other states specified in writing by
Purchaser, provided, however, that the Company shall not be required to qualify
to do business in any state in which it is not now so qualified or has not so
consented.

                  (d) The Company shall furnish to each Purchaser upon request a
reasonable number of copies of a supplement to or an amendment of the prospectus
used in connection with the Registration Statement as may be necessary to
facilitate the public sale or other disposition of all or any of the Registrable
Securities held by Purchaser.

                  (e) With a view to making available to Purchasers the benefits
of Rule 144 and any other rule or regulation of the Commission that may at any
time permit Purchaser to sell Registrable Securities to the public without
registration or pursuant to a registration statement on Form S-3, the Company
covenants and agrees to use its best efforts to: (i) make and keep public
information available as those terms are understood and defined in Rule 144
until the earlier of (A) the date on which the Shares may be sold pursuant to
Rule 144(k) (or any successor rule) or (B) such date as all of the Registrable
Securities shall have been resold; (ii) file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and Exchange Act; and (iii) furnish to any Purchaser upon
request, as long as the Purchaser owns any Registrable Securities, (A) a written
statement by the Company that it has complied with the reporting requirements of
the Securities Act and the Exchange Act, (B) a copy of the most recent annual or
quarterly report of the Company, and (C) such other information as may be
reasonably requested in order to avail any Purchaser of any rule or regulation
of the Commission that permits the selling of any such Registrable Securities
without registration or pursuant to such registration statement on Form S-3.

                  (f) Purchaser hereby acknowledges that there may occasionally
be times when the Company must suspend the use of the prospectus forming a part
of the Registration Statement until such time as an amendment to such
Registration Statement has been filed by the Company and declared effective by
the SEC or until the Company has amended or supplemented such prospectus. The
Purchaser hereby covenants that it will not sell any securities pursuant to said
prospectus during the period commencing at the time at which the Company gives
the Purchaser notice of the suspension of the use of said prospectus and ending
at the time the Company gives the Purchaser notice that Purchaser may thereafter
effect sales pursuant to said prospectus. Notwithstanding anything herein to the
contrary, the Company shall not suspend use of the Registration Statement by
Purchaser unless such suspension is required by the federal securities laws and
the rules and regulations promulgated thereunder.

                                       6
<PAGE>

Notwithstanding the foregoing, the Company shall not be entitled to exercise its
right to block such sales or suspend use of such prospectus more than three
times during the effectiveness of the Registration Statement nor more than one
time in any four month period.

      5.2. Indemnification and Contribution

            (a) The Company agrees to indemnify and hold harmless each Purchaser
from and against any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) to which such Purchaser may become subject
(under the Securities Act or otherwise) (including in settlement of litigation)
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement of a material fact or omission to state a material fact in the
Registration Statement, including all documents filed as a part thereof and
information deemed to be a part thereof, on the effective date thereof, or any
amendment or supplements thereto, or arise out of any failure by the Company to
fulfill any undertaking or covenant included in the Registration Statement or to
perform its obligations hereunder or under law; provided, however, that the
Company shall not be liable in any such case to the extent that such loss,
claim, damage or liability arises out of, or is based upon (i) an untrue
statement or omission in such Registration Statement in reliance upon and in
conformity with information furnished to the Company by or on behalf of such
Purchaser specifically for use in preparation of the Registration Statement and
not corrected by the Purchaser in writing or (ii) an untrue statement or
omission in any prospectus that is corrected in any subsequent prospectus, or
supplement or amendment thereto, that was delivered to a Purchaser prior to the
pertinent sale or sales by such Purchaser and not delivered by such Purchaser to
the entity to which it made such sale(s) prior to such sale(s).

            (b) Each Purchaser, severally and not jointly, agrees to indemnify
and hold harmless the Company from and against any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) to which the Company
may become subject (under the Securities Act or otherwise) insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of, or are based upon (i) an untrue statement or alleged
untrue statement of a material fact or omission to state a material fact in the
Registration Statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Purchaser
specifically for use in preparation of the Registration Statement (provided,
however, that no Purchaser shall be liable in any such case for any untrue
statement or omission in any prospectus or Registration Statement which
statement has been corrected, in writing, by such Purchaser and delivered to the
Company at least 14 days before the sale from which such loss occurred), or (ii)
an untrue statement or omission in any prospectus that is corrected in any
subsequent prospectus or supplement or amendment thereto, that was delivered to
a Purchaser at least 1 day prior to the pertinent sale or sales by such
Purchaser and not delivered by such Purchaser to the entity to which it made
such sale(s) prior to such sale(s), and each Purchaser, severally and not
jointly, will, as incurred, reimburse the Company for any legal or other
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim. Notwithstanding the foregoing, no
Purchaser shall be liable, or required to indemnify the Company, in the
aggregate, for any amount in excess of the net proceeds received by the
Purchaser from the sale of the Shares or the Warrant Shares, as the case may be,
to which such loss, claim, damage or liability relates.

            (c) Promptly after receipt by any indemnified person of a notice of
a claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 5.2, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action and, subject to the provisions hereinafter
stated, in case any such action shall be brought against an indemnified person,
the indemnifying person shall be entitled to participate therein, and, to the
extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to the indemnified person. After notice from the
indemnifying person to such indemnified person of the indemnifying person's
election to assume the defense thereof, the indemnifying person shall not be
liable to such indemnified person for any legal expenses subsequently incurred
by such indemnified person in connection with the defense thereof; provided,
however, that if there exists or shall exist a conflict of interest that would
make it inappropriate in the reasonable judgment of the indemnified person for
the same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying person;
provided, further, that the indemnifying person shall not be obligated to assume
the expenses of more than one counsel to represent all indemnified persons.

            (d) If the indemnification provided for in this Section 5.2 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and each Purchaser
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or 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 on the one hand
or a Purchaser on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Purchasers agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if the Purchasers were treated as one entity for such purpose)
or by any other method of allocation which does not take into account the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action

                                       7
<PAGE>

or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute in the aggregate any amount in excess of the net
proceeds received by the Purchaser from the sale of the Shares or Warrant
Shares, as the case may be, to which such loss, claim, damage or liability
relates. 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 Purchaser's
obligations in this subsection (d) to contribute are several in proportion to
their sales of Shares or Warrant Shares, as the case may be, to which such loss
relates and not joint.

6. Restrictions on Transferability of Shares and Warrants; Compliance with
Securities Act.

            6.1 Restrictions on Transferability. Neither the Shares nor the
Warrants shall be transferable in the absence of registration under the
Securities Act or an exemption therefrom or in the absence of compliance with
any term of the Agreement.

            6.2 Restrictive Legend. Until and unless the Shares and Warrant
Shares are registered under the Securities Act, each certificate representing
the Shares and the Warrant Shares and each Warrant shall bear substantially the
following legend (in addition to any legends required under applicable state
securities laws):

            THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
            SECURITIES ACT, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
            TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM THE TRANSFEROR REASONABLY
            BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
            RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR
            THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
            MEETING THE REQUIREMENTS OF RULE 144A, (2) TO AN ACCREDITED INVESTOR
            (AS DEFINED IN RULE 501(A) OF REGULATION D UNDER THE SECURITIES ACT)
            IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
            SECURITIES ACT (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
            THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR
            (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
            SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
            LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

            6.3 Transfer of Shares and Warrants. Each Purchaser hereby covenants
with the Company not to make any sale of the Shares or Warrants except either
(a) a sale of Shares or Warrant Shares in accordance with the Registration
Statement, in which case the Purchaser covenants to comply with the requirement
of delivering a current prospectus, (b) a sale of Shares or Warrant Shares in
accordance with Rule 144, in which case the Purchaser covenants to comply with
Rule 144 and to deliver such additional certificates and documents as the
Company may reasonably request, or (c) in accordance with another exemption from
the registration requirements of the Securities Act. The legend set forth in
Section 6.2 will be removed from a certificate representing Shares or the
Warrant Shares, as the case may be, following and in connection with any sale of
Shares or Warrant Shares pursuant to subsection (a) or (b) hereof but not in
connection with any sale of Shares or Warrant Shares pursuant to subsection (c)
hereof. The Company will substitute one or more replacement certificates without
the legend at the request of the Purchaser promptly after such time as the
Registration Statement becomes effective.

      7. Termination.

            (a) By the Purchaser. The Purchaser may terminate this Agreement
immediately, if at any time prior to the Closing, the Company shall cease
conducting business in the normal course; become insolvent or become unable to
meet its obligations as they become due; make a general assignment for the
benefit of creditors; petition, apply for, suffer or permit with or without its
consent the appointment of custodian, receiver, trustee in bankruptcy or similar
officer for all or any substantial part of its business or assets; avail itself
or become subject to any proceeding under the Federal Bankruptcy Code or any
similar state, federal or foreign statute relating to bankruptcy, insolvency,
reorganization, receivership, arrangement, adjustment of debts, dissolutions or
liquidation.

            (b) By the Company. The Company may terminate this Agreement at any
time prior to the Closing if the Purchasers have not agreed to purchase up to an
aggregate of $7.5 million in common stock pursuant to this Agreement prior to
March 31, 2001 or such later date as the Company and the Placement Agent shall
have agreed to extend the offering of the Shares with notice to the Purchasers.

      8. Miscellaneous.

            8.1 Survival of Representations and Warranties. All representations
and warranties contained herein shall survive the execution and delivery of this
Agreement, any investigation at any time made by or on behalf of the Purchaser,
and the sale and purchase of the Shares and the Warrants and payment therefor.

            8.2 Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and do not constitute a part of
this Agreement.

                                       8
<PAGE>

            8.3 Choice of Law. It is the intention of the parties that the
internal laws of the State of New York, without regard to the body of law
controlling conflicts of law, shall govern the validity of this Agreement, the
construction of its terms and the interpretation of the rights and duties of the
parties set forth herein.

            8.4 Counterparts. This Agreement may be executed concurrently in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

            8.5 Assignment; Parties in Interest. This Agreement may not be
pledged, assigned or otherwise transferred by the Purchasers except by operation
of law but all the terms and provision of this Agreement shall be binding upon
and inure to the benefit of and be enforced by the successors in interest of the
parties hereto. Each successive transferee of the Purchasers shall be deemed to
be a Purchaser for the purpose of Section 5 of this Agreement.

            8.6 Amendments. No amendment, modification, waiver, discharge or
termination of any provision of this Agreement nor consent to any departure by
the Purchasers or the Company therefrom shall in any event be effective unless
the same shall be in writing and signed by the party to be charged with
enforcement, and then shall be effective only in the specific instance and for
the purpose for which given. No course of dealing between the parties hereto
shall operate as an amendment of, or a waiver of any right under, this
Agreement.

      IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized representatives as of
the day and year first above written.

                                            Nastech Pharmaceutical Company Inc.

                                            By:________________________

                                            Title:_______________________

           [PURCHASER SIGNATURE PAGE CONTINUES ON THE FOLLOWING PAGE]

                                       9
<PAGE>

                   PURCHASER SIGNATURE PAGE AND QUESTIONNAIRE

      The undersigned Purchaser hereby executes the Stock and Warrant Purchase
Agreement with Nastech Pharmaceutical Company Inc. (the "Company") and hereby
authorizes this signature page to be attached to a counterpart of such document
executed by a duly authorized officer of the Company.

No. of Shares to be                     ________________________________________
Purchased: ____________                 Name of Purchaser (PLEASE PRINT OR TYPE)

No. of Shares Underlying
Warrants: _____________

                    Aggregate Purchase                    [SIGN HERE]
Price: $____________
                                             By:________________________________

                                             Title: ____________________________

Purchaser is a _______ qualified institutional buyer OR

_____ an accredited investor as defined in the Offering Memorandum

Name in which Shares and Warrants are to be registered:
__________________________________________

Address of registered holder:                         __________________________

Social Security or Tax ID No. of registered holder:   __________________________

Contact name and telephone number regarding
Settlement and registration:                          __________________________
                                                                Name

                                                      __________________________
                                                           Telephone Number

Number of shares of common stock of the Company beneficially owned (meaning
shares owned or controlled or which the Purchaser has the right to acquire or
vote) by the Purchaser, other than the Shares and Warrants being purchased
pursuant hereto:

_________________________________________

Have you or your organization had any position, office or other material
relationship with the Company within the past three years?

                  __________ Yes               __________ No

Do you or your organization have any direct or indirect affiliation or
association with any NASD member?

                  __________ Yes               __________ No

If yes to either of the last two questions, please indicate the nature of any
such relationships below:

                                       10Form of Warrant                                                      EXHIBIT 4.2

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR IN ACCORDANCE WITH AN EXEMPTION THEREUNDER.

                           _________________ Warrants

            Void after 5:00 p.m. Eastern Time on the Expiration Date

                        WARRANT TO PURCHASE COMMON STOCK

                                       OF

                       NASTECH PHARMACEUTICAL COMPANY INC.

      This Is To Certify That, FOR VALUE RECEIVED, __________________ ("Holder")
having an address at __________________________________________, is entitled to
purchase, subject to the provisions of this Warrant, ("Warrant") from Nastech
Pharmaceutical Company Inc., a Delaware corporation (the "Company"),
____________________ (_______) non-callable, fully paid, validly issued and
non-assessable shares of Common Stock, par value $.006 per share (the "Common
Stock"), at an exercise price of $6.3375, which is equal to 130% of $4.875, the
purchase price per share of the Common Stock pursuant to the offering by the
Company (the "Offering") of a maximum of $10,000,000 of its securities
consisting of Common Stock and warrants, as more fully described in the Offering
Memorandum, dated February 5, 2001, and in an amendment thereto dated May 11,
2001, at any time or from time to time during the period (the "Exercise Period")
from the date hereof until 5:00 p.m. Eastern Standard Time on May 11, 2006 (the
"Expiration Date"). The number of shares of Common Stock to be received upon the
exercise of this Warrant and the price to be paid for each share of Common Stock
may be adjusted from time to time as hereinafter set forth. The Common Stock, as
adjusted from time to time, are hereinafter sometimes referred to as "Warrant
Shares" and the exercise price of the Common Stock hereunder in effect at any
time and as adjusted from time to time is hereinafter sometimes referred to as
the "Exercise Price."

<PAGE>

      (1) EXERCISE OF WARRANT. This Warrant may be exercised in whole or in part
at any time or from time to time during the Exercise Period; provided, however,
that if such day is a day on which banking institutions in the State of New York
are authorized by law to close, then on the next succeeding day which shall not
be such a day. This Warrant may be exercised by presentation and surrender of
this Warrant to the Company at its principal office or to the Company's warrant
agent, if any has been so appointed, with the Purchase Form annexed hereto duly
executed and accompanied by payment of the Exercise Price, in cash or by
certified or bank cashier's check, for the number of Warrant Shares specified in
such form. Notwithstanding the foregoing, in lieu of any cash payment required
hereunder, the Holder of this Warrant shall have the right at any time during
the Exercise Period to exercise the Warrant in full or in part by surrender of
this Warrant (with the election at the end hereof duly executed) to the Company
at its principal office or to the Company's warrant agent, if any has been so
appointed, in exchange for the number of Warrant Shares equal to the product of
(a) the number of Warrant Shares as to which the Warrant is being exercised
multiplied by (b) a fraction, the numerator of which is the Current Market Price
(as defined in Section 10 below) of the Common Stock less the Exercise Price and
the denominator of which is the Current Market Price. As soon as practicable
after each such exercise of the Warrants, the Company shall issue or cause to be
issued and delivered to the Holder a certificate or certificates for the Warrant
Shares issuable upon such exercise, registered in the name of the Holder. The
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of any such exercise, provided such exercise is in
accordance with the provisions set forth herein. If this Warrant should be
exercised in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the rights of the
Holder thereof to purchase the balance of the Warrant Shares purchasable
thereunder. Upon receipt by the Company of this Warrant at its office in proper
form for exercise, the Holder shall be deemed to be the holder of record of the
Common Stock issuable upon such exercise, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such Common Stock shall not then be physically delivered to the
Holder.

      (2) RESERVATION OF SHARES. The Company shall at all times reserve for
issuance and/or delivery upon exercise of this Warrant such number of shares of
its Common Stock as shall be required for issuance and delivery upon exercise of
the Warrants.

      (3) FRACTIONAL SHARES. No fractional shares or script representing
fractional shares shall be issued upon the exercise of this Warrant. If more
than one Warrant shall be exercised at one time by the Holder, the number of
full shares which shall be issuable upon exercise thereof shall be computed on
the basis of the aggregate number of full shares issuable upon such exercise. No
adjustment shall be made in respect of cash dividends on Warrant Shares
delivered upon exercise of any Warrant. With respect to any fraction of a share
called for upon exercise hereof, the Company shall pay to the Holder an amount
in cash equal to such fraction multiplied by the average bid and asked prices of
the Common Stock on the last available date for which quotations are available
immediately preceding the date of exercise of this Warrant, if the bid and asked
prices are not so reported, then the current market value shall be an amount,
not less than the book value thereof as at the end of the most recent fiscal
year of the Company ending prior to the date of the exercise of the Warrant,
determined in such reasonable manner as may be prescribed by the Board of
Directors of the Company.

      (4) EXCHANGE OR LOSS OF WARRANT. This Warrant is exchangeable, without
expense, at the option of the Holder, upon presentation and surrender hereof to
the Company for other Warrants of different denominations entitling the holder
thereof to purchase in the aggregate the same number of Common Stock purchasable
hereunder. This Warrant may be divided or combined with other Warrants which
carry the same rights upon presentation hereof at the principal office of the
Company with a written notice specifying the denominations in which new Warrants
are to be issued and signed by the Holder hereof. The term "Warrant" as used
herein includes any Warrants into which this Warrant may be divided or
exchanged. Upon receipt by the Company or its warrant agent, if any, of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new Warrant of
like tenor and date.

      (5) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth herein
and in any warrant agreement entered into by and between the Company and a
warrant agent with respect to the Warrants. In the event the Company enters into
a warrant agreement with a warrant agent, the terms of the Warrant shall be
embodied in the warrant

                                       2
<PAGE>

agreement; and the acceptance of this Warrant by the Holder shall be deemed
consent by the Holder for the Company to enter into any such warrant agreement,
upon such terms and conditions mutually agreeable between the Company and any
such warrant agent, provided such warrant agreement does not adversely affect
any of the rights of the Holder, as set forth in this Warrant.

      (6) ANTI-DILUTION PROVISIONS.

            (a) Stock Dividends, Splits, Combinations, etc. In case the Company
shall at any time after the date of this Warrant (i) declare a dividend, or make
a distribution, on the outstanding Common Stock in shares of its capital stock,
(ii) subdivide the outstanding Common Stock, (iii) combine the outstanding
Common Stock into a smaller number of shares, or (iv) issue any shares of its
capital stock by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then in each case, the number and kind
of shares of Common Stock receivable upon exercise of this Warrant, in effect at
the time of the record date for such dividend or distribution or of the
effective date of such subdivision, combination, or reclassification, shall be
proportionately increased or decreased, as the case may be, so that the Holder
after such time shall be entitled to receive the aggregate number and kind of
shares which if such Warrant had been exercised immediately prior to such time,
it would have owned upon such exercise and been entitled to receive by virtue of
such dividend, distribution, subdivision, combination or reclassification.
Whenever the number of shares of Common Stock purchasable upon the exercise of
this Warrant is adjusted as provided in this Section 6(a), then the Exercise
Price shall also be adjusted by multiplying such Exercise Price immediately
prior to such adjustment by a fraction (A) the numerator of which shall be the
number of shares of common Stock purchasable upon the exercise immediately prior
to such adjustment, and (B) the denominator of which shall be the number of
shares of Common Stock so purchasable immediately thereafter. Such adjustment
shall be made successively whenever any event listed above shall occur.

            (b) Reorganization, Consolidation, Merger, Etc. In the case of any
reorganization of the Company (or any other corporation, the securities of which
are at the time receivable on the exercise of this Warrant) or if the Company
(or any other such corporation) shall consolidate with or merge into another
corporation or covey all or substantially all of its assets to another
corporation, then, and in each such case, the Holder of this Warrant upon the
exercise as provided for in Section 1 at any time after the consummation of such
reorganization, consolidation, merger or conveyance, shall be entitled to
receive in lieu of the securities and property receivable upon the exercise of
this Warrant prior to such consummation, the securities or property to which
such Holder would have been entitled upon such consummation if such Holder had
exercised this Warrant immediately prior thereto, in each such case, the terms
of this Warrant shall be applicable to the securities or property received upon
the exercise of this Warrant after such combination.

            (c) Extraordinary Dividends. In case the Company shall distribute to
all holders of Common Stock (including any such distribution made to the
stockholders of the Company in connection with a consolidation or merger in
which the Company is the continuing corporation) evidences of its indebtedness
or assets (other than dividends payable in shares of Common Stock), or
subscription rights, options, or warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase shares of Common
Stock (excluding those referred to in paragraph 6(b) hereof), then, in each
case, the Exercise Price shall be adjusted by multiplying the Exercise Price in
effect immediately prior to the record date for the determination of
stockholders entitled to receive such distribution by a fraction, the numerator
of which shall be the current Exercise Price per share of Common Stock on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be conclusive
absent manifest error) of the portion of the evidences of indebtedness or assets
so to be distributed, or of such subscription rights, options, or warrants or
convertible or exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock, applicable to one share, and the denominator of
which shall be such current Exercise Price per share of Common Stock. Such
adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of such distribution retroactive to the record date
for the determination of stockholders entitled to receive such distribution.

            (d) De Minimis Exception. No adjustment in the Exercise Price shall
be required if such adjustment is less than $.01; provided, however, that any
adjustments which by reason of this paragraph 6 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this paragraph 6 shall be made to the nearest
one-thousandth of a share, as the case may be.

            (e) Date of Issuance. In any case in which this paragraph 6 shall
require that an adjustment in the

                                       3
<PAGE>

Exercise Price be made effective as of a record date for a specified event, the
Company may elect to defer, until the occurrence of such event, issuing to any
Holder who exercised any Warrants after such record date, the shares of Common
Stock, if any, issuable upon such exercise over and above the shares of Common
Stock, if any, issuable upon such exercise on the basis of the Exercise Price in
effect prior to such adjustment.

            (f) Adjustment to Number of Shares. Upon each adjustment of the
Exercise Price as a result of the calculations made in paragraph 6(c) hereof,
each Warrant outstanding prior to the making of the adjustment in the Exercise
Price shall thereafter evidence the right to purchase, at the adjusted Exercise
Price, that number of shares (calculated to the nearest thousandth) obtained by
dividing (i) the product obtained by multiplying the number of shares
purchasable upon exercise of a Warrant prior to adjustment of the number of
shares by the Exercise Price in effect prior to adjustment of the Exercise Price
by (ii) the Exercise Price in effect after such adjustment of the Exercise
Price.

            (g) Notice of Adjustments. Whenever there shall be an adjustment as
provided in this paragraph 6, the Company shall promptly cause written notice
thereof to be sent by overnight courier, to the Holder, at its principal office,
which notice shall be accompanied by an officer's certificate setting forth the
number of Warrant Shares purchasable upon the exercise of this Warrant and the
Exercise Price after such adjustment and setting forth a brief statement of the
facts requiring such adjustment and the computation thereof, which officer's
certificate shall be conclusive evidence of the correctness of any such
adjustment absent any error.

            (h) Outstanding Options/Warrants. No adjustment in the Exercise
Price shall be required in the case of the issuance of any and all shares of
Common Stock upon exercise of any options, warrants or convertible securities
outstanding on or before the date hereof.

            (i) Adjustments at Below Par Value. Before taking any action which
would cause an adjustment reducing the Exercise Price below the then par value
of the Common Stock issuable upon exercise of the Warrants, the Company will
take any corporate action which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
non-assessable shares of such the Company at such adjusted Exercise Price.

      (7) INVESTMENT REPRESENTATION. By accepting this Warrant, the Holder
acknowledges that it is being taken for its own account as principal, for
investment purposes only, and not with a view to, or for, resale, distribution
or fractionalization thereof, in whole or in part, and no other person has a
direct or indirect beneficial interest in such Warrant and such Warrant may only
be transferred, subject to compliance with the legend set forth on the first
page of this Warrant Certificate. Unless the shares issuable upon the exercise
of this Warrant are registered under the Securities Act of 1933, as amended (the
"Act"), the Holder, upon exercise of this Warrant will be required to provide
the Company with an investment letter and the certificates representing such
shares will contain a legend to the effect that the Holder may not transfer,
sell, pledge or hypothecate such shares unless the registration provisions of
the Act have been complied with and unless the Company has received an opinion
of counsel that such registration is not required.

      (8) REGISTRATION RIGHTS. The Warrant Shares issuable upon the exercise of
      this Warrant are the subject of certain registration rights granted by the
      Company to the Holder as more specifically set forth in the Stock and
      Warrant Purchase Agreement which was executed by each of the Company and
      Holder in connection with the Offering.

      (9) NOTICES. All notices and other communications which are required or
      may be given under this Warrant shall be in writing and shall be deemed to
      have been duly given when delivered in person or transmitted by telex or
      three (3) days after being mailed, postage prepaid, in the case of the
      Company to Nastech Pharmaceutical Company Inc.,45 Adams Ave, Hauppauge,
      New York 11788 Attention: Chief Financial Officer, and in the case of the
      Holder to the address set forth herein, or to such other address as such
      party shall have specified by notice to the other party in accordance with
      this section (9). If notice is given by registered or certified first
      class mail, postage prepaid, return receipt requested, the return receipt
      shall be conclusive evidence of the notice having been mailed on the date
      set forth.

      (10) DEFINITION. The "Current Market Price" for the Common Stock of the
Company on any date shall be deemed to be the average of the daily closing
prices for the thirty (30) consecutive trading days immediately preceding the
date in question. The closing price for each day shall be the last reported
sales price regular way or, in

                                       4
<PAGE>

case no such reported sale takes place on such day, the closing bid price
regular way, in either case on the principal national securities exchange
(including, for purposes hereof, the Nasdaq National Market ("Nasdaq")) on which
the shares of Common Stock are listed or admitted to trading, or, if the Common
Stock are not listed or admitted to trading on any national securities exchange,
the highest reported bid price for the Common Stock as furnished by the Nasdaq
or a similar organization if the Nasdaq is no longer reporting such information
(including, for purposes hereof, Nasdaq). If on any such date the Common Stock
are not listed or admitted to trading on any national securities exchange and
are not quoted by Nasdaq or any similar organization, the fair value of a share
on such date, as determined in good faith by the Board of Directors of the
Company, whose determination shall be conclusive, shall be used.

      (11) MISCELLANEOUS. This Agreement contains the entire Agreement and
      supersedes all prior agreements and understandings, oral or written,
      between the parties hereto with respect to the subject matter hereof. This
      Warrant may not be changed orally, but only by an agreement in writing
      signed by the party against whom any waiver, change, amendment,
      modification or discharge is sought, provided however, that this Warrant
      may be amended or modified without the consent of the Holder if such
      amendment or modification does not adversely affect the rights of the
      Holder hereunder. This Agreement may be assigned by Holder in accordance
      with the provisions of section (7) of this Agreement. This Agreement will
      not be assigned by the Company and shall be interpreted under the laws of
      the State of New York without application to the principles of conflicts
      of laws.

                                        NASTECH PHARMACEUTICAL COMPANY INC.

                                     By: _______________________________________

[SEAL]

Dated:

Attest:

                                       5
<PAGE>

                               FORM OF ASSIGNMENT

            (To be executed by the registered holder if such holder desires to
transfer the attached Warrant.)

            FOR VALUE RECEIVED, _____________________ hereby sells, assigns, and
transfers unto ________________________ a warrant (the "Warrant") to purchase
__________ Common Stock, $.006 par value per share, of Nastech Pharmaceutical
Company Inc. (the "Company"), together with all right, title, and interest
therein, and does hereby irrevocably constitute and appoint
__________________________________________________ as attorney to transfer such
Warrant on the books of the Company, with full power of substitution.

Dated:___________________

                                                 Signature:  ___________________

                                     NOTICE

            The signature on the foregoing Assignment must correspond to the
name as written upon the face of this Warrant in every particular, without
alteration or enlargement or any change whatsoever.

                                       6
<PAGE>

                                  EXERCISE FORM

                                                      Dated ______________, ____

      The undersigned hereby irrevocably elects to exercise the within Warrant
to the extent of purchasing shares of Common Stock and hereby (i) tenders
payment herewith in the amount of $_____________ or (ii) surrenders this Warrant
in the amount of _________, in payment of the actual exercise price thereof, and
requests that certificates for such securities be issued in the name of, and
delivered to, and, if such number of Warrant Shares shall not be all the Warrant
Shares covered by the within Warrant, that a new Warrant for the balance of the
Warrant Shares be registered in the name of, and delivered to, the undersigned
at the address stated below. As a condition to this election, the undersigned
hereby represents and warrants to the Company that the representations made by
the undersigned in Section 4 of the Stock and Warrant Purchase Agreement,
including the information provided by the undersigned in its Purchaser
Questionnaire, are true and correct as of the date of this election with respect
to the Warrant Shares.

                     INSTRUCTIONS FOR REGISTRATION OF STOCK

Name: __________________________________________________________________
                 (Please type, write or print in block letters)

Address: _______________________________________________________________

Signature: _____________________________________________________________

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