Document:

EXHIBIT 4.1

                            STOCK PURCHASE AGREEMENT

Nastech Pharmaceutical Company, Inc.
45 Adams Avenue
Hauppauge, NY 11788

The undersigned (the "Investor"), hereby confirms its agreement with you as
follows:

1. This Stock Purchase Agreement (the "Agreement") is made as of the date set
forth below among Nastech Pharmaceutical Company Inc., a Delaware corporation
(the "Company"), and the Investor.

2. The Company has authorized the sale and issuance of up to 1,250,000 shares
(the "Shares") of common stock of the Company, $.006 par value per share (the
"Common Stock"), to certain investors in a private placement (the "Offering").

3. The Company and the Investor agree that the Investor will purchase from the
Company and the Company will issue and sell to the Investor _______ Shares at a
purchase price of $5.25 per Share, or an aggregate purchase price of
$____________________, pursuant to the Terms and Conditions for Purchase of
Shares attached hereto as Annex I and incorporated herein by this reference as
if fully set forth herein. Unless otherwise requested by the Investor in Exhibit
A, certificates representing the Shares purchased by the Investor will be
registered in the Investor's name and address as set forth below.

4. The Investor represents that, except as set forth below, (a) it has had no
position, office or other material relationship within the past three years with
the Company or its affiliates, (b) neither it, nor any group of which it is a
member or to which it is related, beneficially owns (including the right to
acquire or vote) any securities of the Company and (c) it has no direct or
indirect affiliation or association with any National Association of Securities
Dealers, Inc. ("NASD") member. Exceptions:

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            (If no exceptions, write "none." If left blank, response
                         will be deemed to be "none.")

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Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.

                                   Dated as of:  _______________, 2001

                                   ____________________________________________
                                   "INVESTOR"

                                   By:_________________________________________

                                   Print Name:_________________________________

                                   Title:______________________________________

                                   Address:____________________________________

AGREED AND ACCEPTED:
Nastech Pharmaceutical Company Inc.

By:_________________________________________

Title:______________________________________

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                                     ANNEX I

                   TERMS AND CONDITIONS FOR PURCHASE OF SHARES

      1. Agreement to Sell and Purchase the Shares; Subscription Date.

      1.1 Purchase and Sale. At the Closing (as defined in Section 2), the
Company will sell to the Investor, and the Investor will purchase from the
Company, upon the terms and conditions hereinafter set forth, the number of
Shares set forth in paragraph 3 of the Stock Purchase Agreement to which these
Terms and Conditions for Purchase of Shares are attached as Annex I and at the
purchase price set forth in such paragraph.

      1.2 Other Investors. As part of the Offering, the Company proposes to
enter into this same form of Stock Purchase Agreement with certain other
investors (the "Other Investors"), and the Company expects to complete sales of
Shares to them. (The Investor and the Other Investors are hereinafter sometimes
collectively referred to as the "Investors," and this Agreement and the Stock
Purchase Agreements executed by the Other Investors are hereinafter sometimes
collectively referred to as the "Agreements.") The Company will accept executed
Agreements from Investors for the purchase of Shares commencing upon the date on
which the Company provides the Investors with the proposed purchase price per
Share and concluding upon the date (the "Subscription Date") on which the
Company has notified Dain Rauscher Incorporated (in its capacity as Placement
Agent for the Shares, the "Placement Agent") in writing that it is no longer
accepting Agreements for the purchase of Shares in the Offering.

      1.3 Placement Agent Fee. Investor acknowledges that the Company intends to
pay the Placement Agent a fee in respect of the sale of Shares to the Investor.

The Company shall indemnify and hold harmless the Investor from and against all
fees, commissions or other payments owing by the Company to the Placement Agent
or any other person or firm acting on behalf of the Company hereunder.

      2. Delivery of the Shares at Closing. The completion of the purchase and
sale of the Shares (the "Closing") shall occur at a place and time, no later
than October 19, 2001 (the "Closing Date"), to be specified by the Company and
the Placement Agent, and of which the Investors will be notified in advance by
the Placement Agent. At the Closing, the Company shall deliver to the Investor
one or more stock certificates representing the number of Shares set forth on
the signature page hereto, each such certificate to be registered in the name of
the Investor or, if so indicated on the Stock Certificate Questionnaire attached
hereto as Exhibit A, in the name of a nominee designated by the Investor,
provided that, if requested by the Investor, stock certificates representing
such Shares shall be delivered in escrow to such Investor's agent prior to the
Closing, to be held until the completion of the Closing. In addition, on or
prior to the Closing Date, the Company shall cause counsel to the Company to
deliver to the Investors a legal opinion substantially in the form attached
hereto as Exhibit D.

The Company's obligation to issue and sell the Shares to the Investor shall be
subject to the following conditions, any one or more of which may be waived by
the Company: (a) receipt by the Company of the purchase price for the Shares
being purchased hereunder as set forth on the Signature Page hereto; (b)
completion of purchases and sales under the Agreements with the Other Investors
of no less than 1,100,000 Shares in the aggregate together with the purchase by
the Investor; and (c) the accuracy of the representations and warranties made by
the Investors and the fulfillment of those undertakings of the Investors to be
fulfilled prior to the Closing.

The Investor's obligation to purchase the Shares shall be subject to the
following conditions, any one or more of which may be waived by the Investor:
(a) the Company's agreement to issue and sell, and the Investors' agreement to
purchase, on the Closing Date, not less than 1,100,000 Shares of Common Stock;
(b) the delivery to the Investor by counsel to the Company of a legal opinion
substantially in the form attached hereto as Exhibit D; (c) the representations
and warranties of the Company contained in Section 3 being true and correct in
all material respects on and as of such Closing with the same effect as though
such representations and warranties had been made on and as of the date of such
Closing (except with respect to representations and warranties which are made as
of a specific

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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); (d)
the absence of any order, writ, injunction, judgment or decree that questions
the validity of the Agreements or the right of the Company to enter into such
Agreements or to consummate the transactions contemplated hereby and thereby;
and (e) the delivery to the Investor by the Secretary or Assistant Secretary of
the Company of a certificate stating that the condition specified in part (c) of
this paragraph has been fulfilled.

      3. Representations, Warranties and Covenants of the Company. Except as
otherwise described in the Company's Annual Report on Form 10-K for the year
ended December 31, 2000 (and any amendments thereto filed prior to the date
hereof), the Company's Proxy Statement for its 2001 Annual Meeting of
Stockholders, or the Company's Quarterly Reports on Form 10-Q for the quarter
ended June 30, 2001 or any of the Company's Current Reports on Form 8-K filed
since January 1, 2001 (collectively, the "SEC Reports"), the Company hereby
represents and warrants to, and covenants with, the Investor as of the date
hereof and the Closing Date, as follows:

      3.1 Organization. The Company is duly incorporated and validly existing in
good standing under the laws of the jurisdiction of its organization. The
Company has full power and authority to own, operate and occupy its properties
and to conduct its business as presently conducted and is registered or
qualified to do business and in good standing in each jurisdiction where the
failure to be so qualified would have a material adverse effect upon the
Company, or the business, financial condition, properties, operations or assets
of the Company, or the Company's ability to perform its obligations under the
Agreements ("Material Adverse Effect"), and no proceeding has been instituted in
any such jurisdiction revoking, limiting or curtailing, or seeking to revoke,
limit or curtail, such power and authority or qualification in a manner which is
likely to have a Material Adverse Effect. The Company has one subsidiary, Atossa
HealthCare Inc.

      3.2 Due Authorization. The Company has all requisite power and authority
to execute, deliver and perform its obligations under the Agreements, and the
Agreements have been duly authorized and validly executed and delivered by the
Company and constitute legal, valid and binding agreements of the Company
enforceable against the Company in accordance with their terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer, or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

      3.3 Non-Contravention. The execution and delivery of the Agreements, the
issuance and sale of the Shares to be sold by the Company under the Agreements,
the fulfillment of the terms of the Agreements and the consummation of the
transactions contemplated thereby will not (A) result in conflict with or
constitute a violation of, or default (with the passage of time or otherwise)
under, (i) any bond, debenture, note or other evidence of indebtedness, or any
lease, contract, indenture, mortgage, deed of trust, loan agreement, joint
venture or other agreement or instrument to which the Company is a party or by
which the Company or its respective properties are bound where such conflict,
violation or default is reasonably expected to result in a Material Adverse
Effect, (ii) the certificate of incorporation, by-laws or other organizational
documents of the Company, or (iii) any law, administrative regulation, ordinance
or order of any court or governmental agency, arbitration panel or authority
binding upon the Company or its respective properties where such conflict,
violation or default is reasonably expected to result in a Material Adverse
Effect or (B) result in the creation or imposition of any lien, encumbrance,
claim, security interest or restriction whatsoever upon any of the material
properties or assets of the Company or an acceleration of indebtedness pursuant
to any obligation, agreement or condition contained in any material bond,
debenture, note or any other evidence of indebtedness or any material indenture,
mortgage, deed of trust or any other material agreement or instrument to which
the Company is a party or by which it is bound or to which any of the property
or assets of the Company is subject where such lien, encumbrance, claim,
security interest or restriction is reasonably expected to result in a Material
Adverse Effect. No consent, approval, authorization or other order of, or
registration, qualification or filing with, any regulatory body, administrative
agency, or other governmental body in the United States is required for the
execution and delivery of the Agreements by the Company and the valid issuance
of sale of the Shares by the Company pursuant to the Agreements, other than such
as have been made or obtained, and except for any filings required to be made
under federal or state securities laws.

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      3.4 Capitalization. The capitalization of the Company as of June 30, 2001
is as described in the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2001. The Company has not issued any capital stock since June 30,
2001 other than pursuant to (i) the exercise of employee stock options under the
stock option plans disclosed in the SEC Reports, (ii) the exercise of warrants
granted prior to the date hereof and disclosed in the SEC Reports, (iii) the
issuance of common stock under the Company's equity line of credit with
Castlebar Enterprises Limited (the "Equity Line of Credit") disclosed in the SEC
Reports, and (iv) the grant of a warrant to purchase 100,000 shares of Common
Stock to Castlebar Enterprises Limited as consideration for the waiver of a
covenant under the Equity Line of Credit. The Shares to be sold pursuant to the
Agreements have been duly authorized, and when issued and paid for in accordance
with the terms of the Agreements, will be duly and validly issued, fully paid
and nonassessable. The outstanding shares of capital stock of the Company have
been duly and validly issued and are fully paid and nonassessable, have been
issued in compliance with the registration requirements of federal and state
securities laws, and were not issued in violation of any preemptive rights or
similar rights to subscribe for or purchase securities. There are no outstanding
rights (including, without limitation, preemptive rights), warrants or options
to acquire, or instruments convertible into or exchangeable for, any unissued
shares of capital stock or other equity interest in the Company, or any
contract, commitment, agreement, understanding or arrangement of any kind, in
either case to which the Company is a party and providing for the issuance or
sale of any capital stock of the Company, any such convertible or exchangeable
securities or any such rights, warrants or options. Without limiting the
foregoing, no preemptive right, co-sale right, registration right, right of
first refusal or other similar right exists with respect to the issuance and
sale of the Shares, except as provided in the Agreements. There are no
stockholders agreements, voting agreements or other similar agreements with
respect to the Common Stock to which the Company is a party.

      3.5 Legal Proceedings. There is no material legal or governmental
proceeding pending, or to the knowledge of the Company, threatened, to which the
Company is a party or of which the business or property of the Company is
subject. The Company is not a party to the provisions of any injunction,
judgment, decree or order of any court, regulatory body, administrative agency
or other government body which is material to the business or operation of the
Company.

      3.6 No Violations. The Company is not in violation of its certificate of
incorporation, bylaws or other organizational documents, or in violation of any
law, administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority applicable to the Company, which
violation, individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect, nor is the Company in default (and there exists no
condition which, with the passage of time or otherwise, would constitute a
default) in the performance of any bond, debenture, note or any other evidence
of indebtedness or any indenture, mortgage, deed of trust or any other material
agreement or instrument to which the Company is a party or by which the Company
is bound or by which the property of the Company is bound, which default is
reasonably likely to have a Material Adverse Effect.

      3.7 Governmental Permits, Etc. The Company has all necessary franchises,
licenses, certificates and other authorizations from any foreign, federal, state
or local government or governmental agency, department or body that are
currently necessary for the operation of the business of the Company as
currently conducted, except where the failure to currently possess such
franchises, licenses, certificates and other authorizations is not reasonably
expected to have a Material Adverse Effect.

      3.8 Intellectual Property.

      (a) Except for matters that are not reasonably likely to have a Material
Adverse Effect, (i) the Company has ownership of, or a license or other legal
right to use, all patents, copyrights, trade secrets, trademarks, customer
lists, designs, manufacturing or other processes, computer software, systems,
data compilation, research results or other proprietary rights used in the
business of the Company (collectively, "Intellectual Property") and (ii) all of
the Intellectual Property owned by the Company consisting of patents, registered
trademarks and registered copyrights have been duly registered in, filed in or
issued by the United States Patent and Trademark Office, the United States
Register of Copyrights or the corresponding offices of other jurisdictions and
have been maintained and renewed in accordance with all applicable provisions of
law and administrative regulations in the United States and/or such other
jurisdictions.

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      (b) Except for matters that are not reasonably likely to have a Material
Adverse Effect, all material licenses or other material agreements under which
(i) the Company employs rights in Intellectual Property, or (ii) the Company has
granted rights to others in Intellectual Property owned or licensed by the
Company, are in full force and effect and there is no default by the Company or
any of its Subsidiaries thereto.

      (c) The Company believes that it has taken all steps reasonably required
in accordance with sound business practice and business judgment to establish
and preserve the Company's ownership of all material Intellectual Property owned
by the Company.

      (d) Except for matters that are not reasonably likely to have a Material
Adverse Effect, to the knowledge of the Company, (i) the present business,
activities and products of the Company do not infringe any intellectual property
of any other person; (ii) the Company is not making unauthorized use of any
confidential information or trade secrets of any person; and (iii) the
activities of any of the employees on behalf of the Company do not violate any
agreements or arrangements related to confidential information or trade secrets
of persons other than the Company or restricting any such employee's engagement
in business activities of any nature.

      (e) No proceedings are pending, or to the knowledge of the Company,
threatened, which challenge the rights of the Company in respect of the
Company's right to the use of the Intellectual Property, except for matters
which are not reasonably likely to have a Material Adverse Effect.

      3.9 Financial Statements. The consolidated financial statements of the
Company and the related notes contained in the SEC Reports present fairly, in
accordance with generally accepted accounting principles, the consolidated
financial position of the Company as of the dates indicated, and the results of
its operations, cash flows and the changes in stockholders' equity for the
periods therein specified, subject, in the case of unaudited financial
statements for interim periods, to normal year-end audit adjustments. Such
consolidated financial statements (including the related notes) have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods therein specified, except that
unaudited financial statements may not contain all footnotes required by
generally accepted accounting principles.

      3.10 No Material Adverse Change. Since June 30, 2001, there has not been
(i) a change that has had or is reasonably likely to have a Material Adverse
Effect, (ii) any obligation, direct or contingent, that is material to the
Company, incurred by the Company, except obligations incurred in the ordinary
course of business, (iii) any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company, or (iv) any loss or damage
(whether or not insured) to the physical property of the Company which has been
sustained which has a Material Adverse Effect.

      3.11 Nasdaq Compliance. The Company's Common Stock is registered pursuant
to Section 12(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and is listed on the Nasdaq National Market (the "Nasdaq Stock
Market"), and the Company has taken no action designed to, or which to its
knowledge is likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act or delisting the Common Stock from the
Nasdaq Stock Market. The issuance of the Shares does not require shareholder
approval, including, without limitation, pursuant to the Nasdaq Marketplace
Rules.

      3.12 Reporting Status. The Company has timely made all filings required
under the Exchange Act during the 12 months preceding the date of this
Agreement, and all of those documents complied in all material respects with the
SEC's requirements as of their respective filing dates, and the information
contained therein as of the respective dates thereof did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances under which they were made not misleading. The Company currently
is eligible to register the resale of Common Stock in a secondary offering on a
registration statement on Form S-3 under the Securities Act of 1933, as amended
(the "Securities Act").

      3.13 No Manipulation of Stock. The Company has not taken and will not, in
violation of applicable law, take any action outside the ordinary course of
business designed to or that might reasonably be expected to

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cause or result in unlawful manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.

      3.14 Accountants. KPMG LLP, who expressed their opinion with respect to
the consolidated financial statements to be incorporated by reference from the
Company's Annual Report on Form 10-K for the year ended December 31, 2000 into
the Registration Statement (as defined below) and the prospectus which forms a
part thereof (the "Prospectus"), have advised the Company that they are, and to
the best knowledge of the Company they are, independent accountants as required
by the Securities Act and the rules and regulations promulgated thereunder (the
"Rules and Regulations").

      3.15 Contracts. Except for matters which are not reasonably likely to have
a Material Adverse Effect, the contracts listed as exhibits to the SEC Reports
that are material to the Company, other than those contracts that are
substantially or fully performed or expired by their terms, are in full force
and effect on the date hereof, and none of the Company nor, to the Company's
knowledge, any other party to such contracts is in breach of or default under
any of such contracts.

      3.16 Taxes. Except for matters which are not reasonably expected to have a
Material Adverse Effect, the Company has filed all necessary federal, state and
foreign income and franchise tax returns and has paid or accrued all taxes shown
as due thereon, and the Company has no knowledge of a tax deficiency which has
been asserted or threatened against the Company.

      3.17 Transfer Taxes. On the Closing Date, all stock transfer or other
taxes (other than income taxes) which are required to be paid in connection with
the sale and transfer of the Shares hereunder will be, or will have been, fully
paid or provided for by the Company and the Company will have complied in all
material respects with all laws imposing such taxes.

      3.18 Investment Company. The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for an
investment company, within the meaning of the Investment Company Act of 1940, as
amended.

      3.19 Insurance. The Company maintains insurance of the types and in the
amounts that the Company reasonably believes is adequate for its business,
including, but not limited to, insurance covering 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.

      3.20 Offering Materials. The Company has not in the past nor will it
hereafter take any action to sell, offer for sale or solicit offers to buy any
securities of the Company which would bring the offer or sale of the Shares as
contemplated by this Agreement within the provisions of Section 5 of the
Securities Act.

      3.21 Listing. The Company shall comply with all requirements of the NASD
with respect to the issuance of the Shares and the listing thereof on the Nasdaq
Stock Market.

      3.22 Related Party Transactions. No material transaction has occurred
between or among the Company and its affiliates, officers or directors or any
affiliate or affiliates of any such officer or director that with the passage of
time will be required to be disclosed pursuant to Section 13, 14 or 15(d) of the
Exchange Act.

      4. Representations, Warranties and Covenants of the Investor.

      4.1 Investor Knowledge and Status. The Investor represents and warrants
to, and covenants with, the Company that: (i) the Investor is an "accredited
investor" as defined in Regulation D under the Securities Act and has requested,
received, reviewed and considered all information it deemed relevant in making
an informed decision to purchase the Shares, and 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 Shares, and to
protect its own

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interests in connection with the purchase of the Shares and is able to bear the
risks of an investment in the Shares; (ii) the Investor understands that the
Shares are "restricted securities" and have not been registered under the
Securities Act and is acquiring the number of Shares set forth on the Signature
Page hereto in the ordinary course of its business and for its own account for
investment only, has no present intention of distributing any of such Shares and
has no arrangement or understanding with any other persons regarding the
distribution of such Shares (this representation and warranty not limiting the
Investor's right to sell Shares pursuant to the Registration Statement or
otherwise, or other than with respect to any claim arising out of a breach of
this representation and warranty, the Investor's right to indemnification under
Section 6.3); (iii) the Investor 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 except in compliance
with the Securities Act, applicable state securities laws and the respective
rules and regulations promulgated thereunder; (iv) the Investor has answered all
questions on the Signature Page hereto and the Investor Questionnaire attached
hereto as Exhibit B for use in preparation of the Registration Statement and the
answers thereto are true and correct as of the date hereof and will be true and
correct as of the Closing Date; (v) the Investor will notify the Company
promptly of any change in any of such information until such time as the
Investor has sold all of its Shares or until the Company is no longer required
to keep the Registration Statement effective; and (vi) the Investor has, in
connection with its decision to purchase the number of Shares set forth on the
signature page hereto, relied only upon the representations and warranties of
the Company contained herein. Investor understands that the Shares to be issued
to the Investor have 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 the Investor's investment intent as expressed herein, and the Investor
is able to bear the economic risk of holding the Shares for an indefinite period
of time and can afford a complete loss of its investment. The Placement Agent is
not authorized to make any representation or use any information in connection
with the placement, purchase and sale of the Shares, and no person is authorized
to provide any representation which is inconsistent or in addition to those in
the SEC Reports. The Investor acknowledges that it has not received or relied on
any such representations.

      4.2 International Actions. The Investor acknowledges, represents and
agrees that no action has been or will be taken in any jurisdiction outside the
United States by the Company or the Placement Agent that would permit an
offering of the Shares, or possession or distribution of offering materials in
connection with the issue of the Shares, in any jurisdiction outside the United
States. If the Investor is located outside the United States, it has or will
take all actions necessary for the sale of the Shares to comply with all
applicable laws and regulations in each foreign jurisdiction in which it
purchases, offers, sells or delivers Shares or has in its possession or
distributes any offering material, in all cases at its own expense.

      4.3 Registration Required. The Investor hereby covenants with the Company
not to make any sale of the Shares without complying with the provisions of this
Agreement, including Section 6.2 hereof, and without effectively causing the
prospectus delivery requirement under the Securities Act to be satisfied (unless
the Investor is selling such Shares in a transaction not subject to the
prospectus delivery requirement), and the Investor acknowledges that the
certificates evidencing the Shares will be imprinted with a legend that
prohibits their transfer except in accordance therewith. The Investor
acknowledges that as set forth in, and subject to the provisions of, Section
6.2, there may occasionally be times when the Company, based on the advice of
its counsel, determines that it must suspend the use of the Prospectus forming a
part of the Registration Statement until such time as an amendment to the
Registration Statement has been filed by the Company and declared effective by
the SEC or until the Company has amended or supplemented such Prospectus.

      4.4 Power and Authority. The Investor further represents and warrants to,
and covenants with, the Company that (i) if an entity, the Investor is duly
organized and in good standing in the jurisdiction of its organization, (ii) the
Investor has full legal, corporate or other right, power, authority and capacity
to enter into this Agreement and to consummate the transactions contemplated
hereby and has taken all necessary action to authorize the execution, delivery
and performance of this Agreement, and (iii) this Agreement has been duly
authorized, executed and delivered, and constitutes a valid and binding
obligation of the Investor enforceable against the Investor in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors' and
contracting parties' rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is

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considered in a proceeding in equity or at law) and except as the
indemnification agreements of the Investors herein may be legally unenforceable.

      4.5 No Dispositions. Except with the prior written consent of the Company,
the Investor will not, prior to the effectiveness of the Registration Statement,
or, if earlier, 60 days from the Closing Date, directly or indirectly, sell,
offer to sell, solicit offers to buy, dispose of, loan, pledge or grant any
right with respect to (collectively, a "Disposition"), the Common Stock of the
Company, nor will Investor engage in any hedging or other transaction which is
designed to or could reasonably be expected to lead to or result in a
Disposition of Common Stock of the Company by the Investor or any other person
or entity 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 by the Investor. Such
prohibited hedging or other transactions would include, without limitation,
effecting any short sale or equity swap transaction or having in effect any
short position (whether or not such sale or position is against the box and
regardless of when such position was entered into) or any purchase, sale or
grant of any right (including, without limitation, any put or call option) with
respect to the Common Stock of the Company.

      4.6 No Tax or Legal Advice. The Investor understands that nothing in this
Agreement, or any other materials presented to the Investor in connection with
the purchase and sale of the Shares constitutes legal, tax or investment advice.
The Investor 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 Shares.

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

      5. Survival of Representations, Warranties and Agreements. Notwithstanding
any investigation made by any party to this Agreement or by the Placement Agent,
all covenants, agreements, representations and warranties made by the Company
and the Investor herein shall survive the execution of this Agreement, the
delivery to the Investor of the Shares being purchased and the payment therefor.

      6. Registration of the Shares; Compliance with the Securities Act.

      6.1 Registration Procedures and Expenses. The Company shall:

      (a) subject to receipt of necessary information from the Investors,
prepare and file with the SEC, as soon as practicable, but in no event later
than the date that is fifteen (15) business days after the Closing Date, a
registration statement on Form S-3 (the "Registration Statement") to enable the
resale of the Shares by the Investors from time to time through the automated
quotation system of the Nasdaq Stock Market or in privately-negotiated
transactions;

      (b) use its best efforts, subject to receipt of necessary information from
the Investors, to cause the Registration Statement to become effective as soon
as practicable, but in no event later than sixty (60) days after the
Registration Statement is filed by the Company. If the Registration Statement
has not been declared effective by the SEC on or before the date that is 121
days after the Closing Date, the Company shall, on the 121st day after the
Closing Date and each 30th day thereafter, issue to the Investor .01 additional
shares of Common Stock (which shall be deemed to be Shares) for every Share
purchased in the Offering until the Registration Statement is declared effective
by the SEC (rounded up to the nearest Share after aggregating all Shares held by
the Investor); provided, however, that the Company shall issue such additional
shares only to the extent it determines, in its sole discretion, it is permitted
to issue shares without seeking shareholder approval, including, without
limitation, pursuant to the Nasdaq Marketplace Rules, and the Company shall pay
the Investors the cash value of the remaining shares it is not permitted to
issue, which cash value shall be based on the closing bid price of the shares on
the date the issuance is required hereunder;

      (c) use its best efforts to prepare and file with the SEC such amendments
and supplements to the Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep the

                                       7
<PAGE>

Registration Statement current and effective for a period not exceeding, with
respect to each Investor's Shares purchased hereunder, the earlier of (i) the
second anniversary of the Closing Date, (ii) the date on which the Investor may
sell all Shares then held by the Investor without restriction by the volume
limitations of Rule 144(e) of the Securities Act or (iii) such time as all
Shares purchased by such Investor in this Offering have been sold pursuant to a
registration statement, and to notify each Investor promptly upon the
Registration Statement and each post-effective amendment thereto, being declared
effective by the SEC;

      (d) furnish to the Investor with respect to the Shares registered under
the Registration Statement such number of copies of the Registration Statement,
Prospectuses (including supplemental prospectuses) and preliminary versions of
the Prospectus filed with the Securities Exchange Commission ("Preliminary
Prospectuses") in conformity with the requirements of the Securities Act and
such other documents as the Investor may reasonably request, in order to
facilitate the public sale or other disposition of all or any of the Shares by
the Investor, provided, however, that unless waived by the Company in writing,
the obligation of the Company to deliver copies of Prospectuses or Preliminary
Prospectuses to the Investor shall be subject to the receipt by the Company of
reasonable assurances from the Investor that the Investor will comply with the
applicable provisions of the Securities Act and of such other securities or blue
sky laws as may be applicable in connection with any use of such Prospectuses or
Preliminary Prospectuses;

      (e) file documents required of the Company for normal blue sky clearance
in all states requiring blue sky clearance; provided, however, that the Company
shall not be required to qualify to do business or consent to service of process
in any jurisdiction in which it is not now so qualified or has not so consented;

      (f) bear all expenses (other than underwriting discounts and commissions,
if any) in connection with the procedures in paragraph (a) through (e) of this
Section 6.1 and the registration of the Shares pursuant to the Registration
Statement; and

      (g) advise the Investors, promptly after it shall receive notice or obtain
knowledge of the issuance of any stop order by the SEC delaying or suspending
the effectiveness of the Registration Statement or of the initiation of any
proceeding for that purpose; and it will promptly use its commercially
reasonable efforts to prevent the issuance of any stop order or to obtain its
withdrawal at the earliest possible moment if such stop order should be issued.

      With a view to making available to the Investor the benefits of Rule 144
(or its successor rule) and any other rule or regulation of the SEC that may at
any time permit the Investor to sell Shares to the public without registration,
the Company covenants and agrees to: (i) make and keep public information
available, as those terms are understood and defined in Rule 144, until the
earlier of (A) such date as all of the Investor's Shares may be resold pursuant
to Rule 144(k) or any other rule of similar effect or (B) such date as all of
the Investor's Shares shall have been resold; (ii) file with the SEC in a timely
manner all reports and other documents required of the Company under the
Securities Act and under the Exchange Act; and (iii) furnish to the Investor
upon request, as long as the Investor owns any Shares, (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 Company's most recent
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other
information as may be reasonably requested in order to avail the Investor of any
rule or regulation of the SEC that permits the selling of any such Shares
without registration.

      It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 6.1 that the Investor shall furnish to
the Company such information regarding itself, the Shares to be sold by
Investor, and the intended method of disposition of such securities as shall be
required to effect the registration of the Shares.

      The Company understands that the Investor disclaims being an underwriter,
but the Investor being deemed an underwriter by the SEC shall not relieve the
Company of any obligations it has hereunder.

                                       8
<PAGE>

      6.2 Transfer of Shares After Registration; Suspension.

      (a) The Investor agrees that it will not effect any Disposition of the
Shares or its right to purchase the Shares that would constitute a sale within
the meaning of the Securities Act other than transactions exempt from the
registration requirements of the Securities Act, except as contemplated in the
Registration Statement referred to in Section 6.1 and as described below, and
that it will promptly notify the Company of any changes in the information set
forth in the Registration Statement regarding the Investor or its plan of
distribution.

      (b) Except in the event that paragraph (c) below applies, the Company
shall: (i) if deemed necessary by the Company, prepare and file from time to
time with the SEC a post-effective amendment to the Registration Statement or a
supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
so that such Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and so that, as
thereafter delivered to purchasers of the Shares being sold thereunder, such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; (ii) provide the Investor copies of any documents filed pursuant
to Section 6.2(b)(i); and (iii) upon request, inform each Investor who so
requests that the Company has complied with its obligations in Section 6.2(b)(i)
(or that, if the Company has filed a post-effective amendment to the
Registration Statement which has not yet been declared effective, the Company
will notify the Investor to that effect, will use its reasonable efforts to
secure the effectiveness of such post-effective amendment as promptly as
possible and will promptly notify the Investor pursuant to Section 6.2(b)(i)
hereof when the amendment has become effective).

      (c) Subject to paragraph (d) below, in the event: (i) of any request by
the SEC or any other federal or state governmental authority during the period
of effectiveness of the Registration Statement for amendments or supplements to
a Registration Statement or related Prospectus or for additional information;
(ii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose; (iii) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Shares for sale in
any jurisdiction or the initiation of any proceeding for such purpose; or (iv)
of any event or circumstance which necessitates the making of any changes in the
Registration Statement or Prospectus, or any document incorporated or deemed to
be incorporated therein by reference, so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and that in the case of the
Prospectus, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; then the Company shall promptly deliver a certificate
in writing to the Investor (the "Suspension Notice") to the effect of the
foregoing and, upon receipt of such Suspension Notice, the Investor will refrain
from selling any Shares pursuant to the Registration Statement (a "Suspension")
until the Investor's receipt of copies of a supplemented or amended Prospectus
prepared and filed by the Company, or until it is advised in writing by the
Company that the current Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in any such Prospectus. In the event of any Suspension, the Company
will use its reasonable best efforts to cause the use of the Prospectus so
suspended to be resumed as soon as reasonably practicable after delivery of a
Suspension Notice to the Investors. In addition to and without limiting any
other remedies (including, without limitation, at law or at equity) available to
the Investor, the Investor shall be entitled to specific performance in the
event that the Company fails to comply with the provisions of this Section
6.2(c).

      (d) Notwithstanding the foregoing paragraphs of this Section 6.2, the
Company shall use its best efforts to ensure that the Investor shall not be
prohibited from selling Shares under the Registration Statement as a result of
Suspensions on more than one occasion of not more than 30 days in any 12-month
period. If a Suspension is in effect for more than 60 days (consecutive or
non-consecutive) in any 12-month period, the Company shall, on the 61st day of
the Suspension and each 30th day thereafter, issue to the Investor .01 shares of
Common Stock (which shall be deemed to be Shares) for every Share purchased in
the Offering until the Suspension is lifted; provided,

                                       9
<PAGE>

however, that the Company shall issue such additional shares only to the extent
it determines, in its sole discretion, it is permitted to issue shares without
seeking shareholder approval, including, without limitation, pursuant to the
Nasdaq Marketplace Rules, and the Company shall pay the Investors the cash value
of the remaining shares it is not permitted to issue, which cash value shall be
based on the closing bid price of the shares on the date the issuance is
required hereunder;

      (e) Provided that a Suspension is not then in effect the Investor may sell
Shares under the Registration Statement, provided that it arranges for delivery
of a current Prospectus to the transferee of such Shares. Upon receipt of a
request therefor, the Company will provide an adequate number of current
Prospectuses to the Investor and to any other parties requiring such
Prospectuses.

      (f) In the event of a sale of Shares by the Investor, unless such
requirement is waived by the Company in writing, the Investor must also deliver
to the Company's transfer agent, with a copy to the Company, a Certificate of
Subsequent Sale substantially in the form attached hereto as Exhibit C, so that
the shares may be properly transferred.

      6.3 Indemnification. For the purpose of this Section 6.3:

      (a) the term "Selling Stockholder" shall include the Investor and each
person, if any, who controls the Investor within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act;

      (b) the term "Registration Statement" shall include any final Prospectus,
exhibit, supplement or amendment included in or relating to, and any document
incorporated by reference in, the Registration Statement (or deemed to be a part
thereof) referred to in Section 6.1; and

      (c) the term "untrue statement" shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

      (d) (i) The Company agrees to indemnify and hold harmless each Selling
Stockholder from and against any losses, claims, damages or liabilities to which
such Selling Stockholder 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) any untrue
statement of a material fact contained in the Registration Statement, (ii) any
inaccuracy in the representations and warranties of the Company contained in the
Agreement or the failure of the Company to perform its obligations hereunder or
(iii) any failure by the Company to fulfill any undertaking included in the
Registration Statement, and the Company will reimburse such Selling Stockholder
for any reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim, 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, an
untrue statement made in such Registration Statement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Selling Stockholder specifically for use in preparation of the Registration
Statement or the failure of such Selling Stockholder to comply with its
covenants and agreements contained in Section 4.1, 4.2, 4.3, 4.5, 6.2 or 14
hereof or any statement or omission in any Prospectus that is corrected in any
subsequent Prospectus that was delivered to the Investor prior to the pertinent
sale or sales by the Investor.

      (ii) The Investor agrees to indemnify and hold harmless the Company (and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, each officer of the Company who signs the Registration
Statement and each director of the Company) from and against any losses, claims,
damages or liabilities to which the Company (or any such officer, director or
controlling person) 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) any failure
to comply with the covenants and agreements contained in Section 4.1, 4.2, 4.3,
4.5, 6.2 or 14 hereof, or (ii) any untrue statement of a material fact contained
in the Registration Statement if such untrue statement was made in reliance upon
and in conformity with written

                                       10
<PAGE>

information furnished by or on behalf of the Investor specifically for use in
preparation of the Registration Statement, and the Investor will reimburse the
Company (or such officer, director or controlling person), as the case may be,
for any legal or other expenses reasonably incurred in investigating, defending
or preparing to defend any such action, proceeding or claim. The obligation to
indemnify shall be limited to the net amount of the proceeds received by the
Investor from the sale of the Shares pursuant to the Registration Statement.

      (iii) 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 6.3, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, but the omission to so notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party under this Section 6.3 (except to the extent that such
omission materially and adversely affects the indemnifying party's ability to
defend such action) or from any liability otherwise than under this Section 6.3.
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 elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, shall be entitled to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified person. After notice
from the indemnifying person to such indemnified person of its election to
assume the defense thereof (unless it has failed to assume the defense thereof
and appoint counsel reasonably satisfactory to the indemnified party), such
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 opinion
of counsel to 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, however, that no indemnifying
person shall be responsible for the fees and expenses of more than one separate
counsel (together with appropriate local counsel) for all indemnified parties.
In no event shall any indemnifying person be liable in respect of any amounts
paid in settlement of any action unless the indemnifying person shall have
approved the terms of such settlement; provided that such consent shall not be
unreasonably withheld. No indemnifying person shall, without the prior written
consent of the indemnified person, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified person is or could
reasonably have been a party and indemnification could have been sought
hereunder by such indemnified person, unless such settlement includes an
unconditional release of such indemnified person from all liability on claims
that are the subject matter of such proceeding.

      (iv) If the indemnification provided for in this Section 6.3 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 the Investor on
the other in connection with the statements or omissions or other matters 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, in the case of an
untrue statement, whether the untrue statement relates to information supplied
by the Company on the one hand or the Investor on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement. The Company and the Investor 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 Investors 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 or claim. Notwithstanding the
provisions of this subsection (d), the Investor shall not be required to
contribute any amount in excess of the amount by which the gross amount received
by the Investor from the sale of the Shares to which such loss relates exceeds
the amount of any damages which the Investor has otherwise been required to pay
by reason of such untrue statement. 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

                                       11
<PAGE>

Investors' obligations in this subsection to contribute are several in
proportion to their sales of Shares to which such loss relates and not joint.

      The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 6.3, and are fully informed regarding said
provisions. They further acknowledge that the provisions of this Section 6.3
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Registration Statement as required by the Securities Act and the Exchange
Act.

      6.4 Termination of Conditions and Obligations. The conditions precedent
imposed by Section 4 or this Section 6 upon the transferability of the Shares
shall cease and terminate as to any particular number of the Shares when such
Shares shall have been effectively registered under the Securities Act and sold
or otherwise disposed of in accordance with the intended method of disposition
set forth in the Registration Statement covering such Shares or at such time as
an opinion of counsel satisfactory to the Company shall have been rendered to
the effect that such conditions are not necessary in order to comply with the
Securities Act.

      6.5 Information Available. So long as the Registration Statement is
effective covering the resale of Shares owned by the Investor, the Company will
furnish (or to the extent such information is available electronically through
the Company's filings with the SEC, the Company will make available) to the
Investor:

      (a) as soon as practicable after it is available, one copy of (i) its
Annual Report to Stockholders (which Annual Report shall contain financial
statements audited in accordance with generally accepted accounting principles
by a national firm of certified public accountants) and (ii) if not included in
substance in the Annual Report to Stockholders, its Annual Report on Form 10-K
(the foregoing, in each case, excluding exhibits);

      (b) upon the reasonable request of the Investor, all exhibits excluded by
the parenthetical to subparagraph (a)(ii) of this Section 6.5 as filed with the
SEC and all other information that is made available to stockholders; and

      (c) upon the reasonable request of the Investor, an adequate number of
copies of the Prospectuses to supply to any other party requiring such
Prospectuses; and the Company, upon the reasonable request of the Investor, will
meet with the Investor or a representative thereof at the Company's headquarters
to discuss all information relevant for disclosure in the Registration Statement
covering the Shares and will otherwise reasonably cooperate with the Investor
conducting an investigation for the purpose of reducing or eliminating the
Investor's exposure to liability under the Securities Act, including the
reasonable production of information at the Company's headquarters; provided,
that the Company shall not be required to disclose any confidential information
to or meet at its headquarters with the Investor until and unless the Investor
shall have entered into a confidentiality agreement in form and substance
reasonably satisfactory to the Company with the Company with respect thereto.

      6.6 Public Statements. The Company will not issue any public statement,
press release or any other public disclosure listing Investor as one of the
purchasers of the Shares without Investor's prior written consent, except as may
be required by applicable law or rules of any exchange on which the Company's
securities are listed.

      7. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed (A) if within domestic United
States by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or (B) if delivered
from outside the United States, by International Federal Express (or comparable
service) or facsimile, and shall be deemed given (i) if delivered by first-class
registered or certified mail domestic, three business days after so mailed, (ii)
if delivered by nationally recognized overnight carrier, one (1) business day
after so mailed, (iii) if delivered by International Federal Express (or
comparable service), two (2) business days after so mailed, (iv) if delivered by
facsimile, upon electric confirmation of receipt and shall be delivered as
addressed as follows:

                                       12
<PAGE>

      (a) if to the Company, to:

                                  Nastech Pharmaceutical Company Inc.
                                  45 Adams Avenue
                                  Hauppauge, NY 11788
                                  Attention: Andrew Zinzi
                                  Telephone: (631) 273-0101

                                  with a copy mailed to:

                                  Dickstein Shapiro Morin & Oshinsky LLP
                                  1177 Avenue of the Americas
                                  New York, NY  10036
                                  Attention: L. Kevin Sheridan, Jr., Esq.
                                  Telephone: (212) 835-1400
                                  Telecopy: (212) 997-9880

      (b) if to the Investor, at its address on the Signature Page hereto, or at
such other address or addresses as may have been furnished to the Company in
writing.

      8. Changes. This Agreement may not be modified or amended except pursuant
to an instrument in writing signed by the Company and the Investor.

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

      10. Severability. In case any provision contained in this Agreement should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.

      11. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Delaware, without giving
effect to the principles of conflicts of law.

      12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.

      13. Confidential Disclosure Agreement. Notwithstanding any provision of
this Agreement to the contrary, any confidential disclosure agreement previously
executed by the Company and the Investor in connection with the transactions
contemplated by this Agreement shall remain in full force and effect in
accordance with its terms following the execution of this Agreement and the
consummation of the transactions contemplated hereby.

      14. Brokers. Investor acknowledges that there are no fees, commissions or
other payments owing to any broker, finder or intermediary acting on behalf of
the Investor in connection with the transactions contemplated by this Agreement.

                                       13
<PAGE>

                                    EXHIBIT A

                       Nastech Pharmaceutical Company Inc.

                         STOCK CERTIFICATE QUESTIONNAIRE

      Pursuant to Section 4 of the Agreement, please provide us with the
following information:

1.    The exact name that your Shares are to be         ________________________
      registered in (this is the name that will appear  ________________________
      on your stock certificate(s)). You may use a      ________________________
      nominee name if appropriate:                      ________________________

2.    The relationship between the Investor and the     ________________________
      registered holder listed in response to item 1    ________________________
      above:                                            ________________________
                                                        ________________________

3.    The mailing address of the registered holder      ________________________
      listed in response to item 1 above:               ________________________
                                                        ________________________
                                                        ________________________

4.    The Social Security Number or Tax Identification  ________________________
      Number of the registered holder listed in the     ________________________
      response to item 1 above:                         ________________________
                                                        ________________________

                                      A-1
<PAGE>

                                    EXHIBIT B

                       Nastech Pharmaceutical Company Inc.

                             INVESTOR QUESTIONNAIRE

                (all information will be treated confidentially)

To: Nastech Pharmaceutical Company Inc.:

      This Investor Questionnaire ("Questionnaire") must be completed by each
potential investor in connection with the offer and sale of the shares of the
common stock, par value $.006 per share (the "Shares"), of Nastech
Pharmaceutical Company Inc. (the "Company"). The Shares are being offered and
sold by the Company without registration under the Securities Act of 1933, as
amended (the "Securities Act"), and the securities laws of certain states, in
reliance on the exemptions contained in Section 4 of the Securities Act and on
Regulation D promulgated thereunder and in reliance on similar exemptions under
applicable state laws. The Company must determine that a potential investor
meets certain suitability requirements before offering or selling Shares to such
investor. The purpose of this Questionnaire is to assure the Company that each
investor will meet the applicable suitability requirements. The information
supplied by you will be used in determining whether you meet such criteria, and
reliance upon the private offering exemption from registration is based in part
on the information herein supplied.

      This Questionnaire does not constitute an offer to sell or a solicitation
of an offer to buy any security. Your answers will be kept strictly
confidential. However, by signing this Questionnaire you will be authorizing the
Company to provide a completed copy of this Questionnaire to such parties as the
Company deems appropriate in order to ensure that the offer and sale of the
Shares will not result in a violation of the Securities Act or the securities
laws of any state and that you otherwise satisfy the suitability standards
applicable to purchasers of the Shares. All potential investors must answer all
applicable questions and complete, date and sign this Questionnaire. Please
print or type your responses and attach additional sheets of paper if necessary
to complete your answers to any item.

A. BACKGROUND INFORMATION

Name:___________________________________________________________________________

Business Address:_______________________________________________________________
                                    (Number and Street)

________________________________________________________________________________
(City)                              (State)                       (Zip Code)

Telephone Number:  (    )_______________________________________________________

Residence Address:______________________________________________________________
                                    (Number and Street)

________________________________________________________________________________
(City)                              (State)                       (Zip Code)

Telephone Number:  (    )_______________________________________________________

If an individual:

Age:______        Citizenship:__________     Where registered to vote:__________

If a corporation, partnership, limited liability company, trust or other entity:

Type of entity:_________________________________________________________________

State of formation:______________            Date of formation:_________________

Social Security or Taxpayer Identification No.__________________________________

Send all correspondence to (check one):
                                    ____Residence Address  ____ Business Address

                                      B-1
<PAGE>

B. STATUS AS ACCREDITED INVESTOR

The undersigned is an "accredited investor" as such term is defined in
Regulation D under the Securities Act, as at the time of the sale of the Shares
the undersigned falls within one or more of the following categories (Please
initial one or more, as applicable):

_____ (1) a bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; an insurance company as defined in Section 2(13) of the
Securities Act; an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that act; a Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974 if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of such act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with the investment decisions made
solely by persons that are accredited investors;(1)

_____ (2) a private business development company as defined in Section
202(a)(22) of the Investment Adviser Act of 1940;

_____ (3) an organization described in Section 501(c)(3) of the Internal Revenue
Code of 1986, as amended, corporation, Massachusetts or similar business trust,
or partnership, not formed for the specific purpose of acquiring the Shares
offered, with total assets in excess of $5,000,000;

_____ (4) a natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of such person's purchase of the Shares
exceeds $1,000,000;

_____ (5) a natural person who had an individual income in excess of $200,000 in
each of the two most recent years or joint income with that person's spouse in
excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;

_____ (6) a trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Shares offered, whose purchase is directed by
a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D; and

_____ (7) an entity in which all of the equity owners are accredited investors
(as defined above).

--------
(1) As used in this Questionnaire, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the purpose of
subsection (4), the principal residence of the investor must be valued at cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income, the investor should add to the investor's adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depreciation,
contributions to an IRA or KEOGH retirement plan, alimony payments, and any
amount by which income from long-term capital gains has been reduced in arriving
at adjusted gross income.

                                      B-2
<PAGE>

C. REPRESENTATIONS

The undersigned hereby represents and warrants to the Company as follows:

      1. Any purchase of the Shares would be solely for the account of the
undersigned and not for the account of any other person or with a view to any
resale, fractionalization, division, or distribution thereof.

      2. The information contained herein is complete and accurate and may be
relied upon by the Company, and the undersigned will notify the Company
immediately of any material change in any of such information occurring prior to
the closing, if any, with respect to the purchase of Shares by the undersigned
or any co-purchaser.

      3. There are no suits, pending litigation, or claims against the
undersigned that could materially affect the net worth of the undersigned as
reported in this Questionnaire.

      4. The undersigned acknowledges that there may occasionally be times when
the Company, based on the advice of its counsel, determines that it must suspend
the use of the Prospectus forming a part of the Registration Statement (as such
terms are defined in the Stock Purchase Agreement to which this Questionnaire is
attached) until such time as an amendment to the Registration Statement has been
filed by the Company and declared effective by the Securities and Exchange
Commission or until the Company has amended or supplemented such Prospectus. The
undersigned is aware that, in such event, the Shares will not be subject to
ready liquidation, and that any Shares purchased by the undersigned would have
to be held during such suspension. The overall commitment of the undersigned to
investments which are not readily marketable is not excessive in view of the
undersigned's net worth and financial circumstances, and any purchase of the
Shares will not cause such commitment to become excessive. The undersigned is
able to bear the economic risk of an investment in the Shares.

      5. The undersigned has carefully considered the potential risks relating
to the Company and a purchase of the Shares, and fully understands that the
Shares are speculative investments which involve a high degree of risk of loss
of the undersigned's entire investment. Among others, the undersigned has
carefully considered each of the risks described under the headings "Risk
Factors" in the Company's Annual Report on Form 10-K for the year ended December
31, 2000 and the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2001.

                                      B-3
<PAGE>

IN WITNESS WHEREOF, the undersigned has executed this Questionnaire this _____
day of __________, 2001, and declares under oath that it is truthful and
correct.

                        Print Name

                        By:___________________________________________________
                        Signature

                        Title:________________________________________________
                              (required for any purchaser that is a
                              corporation, partnership, trust or other entity)

                                      B-4
<PAGE>

                                    EXHIBIT C

                       Nastech Pharmaceutical Company Inc.
                         CERTIFICATE OF SUBSEQUENT SALE

Chase Mellon Shareholder Services

            RE:   Sale of Shares of Common Stock of Nastech Pharmaceutical
                  Company Inc. (the "Company") pursuant to the Company's
                  Prospectus dated _______________, 2001 (the "Prospectus")

Dear Sir/Madam:

The undersigned hereby certifies, in connection with the sale of shares of
Common Stock of the Company included in the table of Selling Stockholders in the
Prospectus, that the undersigned has sold the Shares pursuant to the Prospectus
and in a manner described under the caption "Plan of Distribution" in the
Prospectus and that such sale complies with all applicable securities laws,
including, without limitation, the Prospectus delivery requirements of the
Securities Act of 1933, as amended.

Selling Stockholder (the beneficial owner):_____________________________________

Record Holder (e.g., if held in name of nominee):_______________________________

Restricted Stock Certificate No.(s):____________________________________________

Number of Shares Sold:__________________________________________________________

Date of Sale:___________________________________________________________________

In the event that you receive a stock certificate(s) representing more shares of
Common Stock than have been sold by the undersigned, then you should return to
the undersigned a newly issued certificate for such excess shares in the name of
the Record Holder and BEARING A RESTRICTIVE LEGEND. Further, you should place a
stop transfer on your records with regard to such certificate.

Dated:______________________________________
____________________________________________
____________________________________________

                                                    Very truly yours,

                                       By:______________________________________

                                       Print Name:______________________________

                                       Title:___________________________________EXHIBIT 4.2

NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS.
NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD,
PLEDGED, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION
WHICH IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT.

                             STOCK PURCHASE WARRANT

                  To Purchase 100,000 Shares of Common Stock of

                       NASTECH PHARMACEUTICAL COMPANY INC.

            THIS CERTIFIES that, for value received, Castlebar Enterprises
Limited (the "Holder"), is entitled, upon the terms and subject to the
conditions hereinafter set forth, at any time on or August 16, 2001 (the
"Initial Exercise Date") and on or prior to the close of business on July 11,
2003 (the "Termination Date"), to subscribe for and purchase from Nastech
Pharmaceutical Company Inc., a Delaware corporation (the "Company"), up to
100,000 shares (the "Warrant Shares") of Common Stock, $.006 par value, of the
Company (the "Common Stock"). The purchase price of one share of Common Stock
(the "Exercise Price") under this Warrant shall be $10. The Exercise Price and
the number of shares for which the Warrant is exercisable shall be subject to
adjustment as provided herein. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth for such terms in the Private Equity
Line of Credit Agreement, dated July 10, 2000, between the Company and the
original Holder hereof (the "Purchase Agreement").

                                       1
<PAGE>

            1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
holder hereof in person or by duly authorized attorney, upon surrender of this
Warrant together with the Assignment Form annexed hereto properly endorsed.

            2. Authorization of Shares. The Company covenants that all shares of
Common Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue).

            3. Exercise of Warrant. Except as provided in Section 4 herein,
exercise of the purchase rights represented by this Warrant may be made at any
time or times on or after the Initial Exercise Date and before the close of
business on the Termination Date. Exercise of this Warrant or any part hereof
shall be effected by the surrender of this Warrant and the Notice of Exercise
Form annexed hereto duly executed, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered holder hereof at the address of such holder appearing on the books of
the Company) and upon payment of the Exercise Price of the shares thereby
purchased by wire transfer or cashier's check drawn on a United States bank, the
holder of this Warrant shall be entitled to receive delivery of the number of
shares of Common Stock so purchased through the Depository Trust Company DWAC
system, if possible, or in the form of one or more certificates. Shares
purchased hereunder shall be delivered to the holder hereof within three (3)
Trading Days after the date on which this Warrant shall have been exercised as
aforesaid. This Warrant shall be deemed to have been exercised and such shares
shall be deemed to have been issued, and Holder or any other person so
designated to be named therein shall be deemed to have become a holder of record
of such shares for all purposes, as of the date the Warrant has been exercised
by payment to the Company of the Exercise Price and all taxes required to be
paid by Holder, if any, pursuant to Section 5 prior to the issuance of such
shares, have been paid. If this Warrant shall have been exercised in part, the
Company shall, at the time of delivery of the Warrant Shares, deliver to Holder
a new Warrant evidencing the rights of Holder to purchase the unpurchased shares
of Common Stock called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant. If a registration statement is not
effective for the resale of the Warrant Shares (unless the sale of the Warrant
Shares are not otherwise restricted under the Securities Act) this Warrant may
also be exercised by means of a "cashless exercise" in which the Holder shall be
entitled to receive a certificate for the number of shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:

      (A) = the average of the high and low trading prices per share of Common
      Stock on the Trading Day preceding the date of such election;

      (B) = the Exercise Price of the Warrants; and

                                       2
<PAGE>

      (X) = the number of shares issuable upon exercise of the Warrants in
      accordance with the terms of this Warrant.

            4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to the Exercise Price.

            5. Charges, Taxes and Expenses. Issuance of shares of Common Stock
upon the exercise of this Warrant shall be made without charge to the Holder
hereof for any issue or transfer tax or other incidental expense in respect of
the issuance of such Shares, all of which taxes and expenses shall be paid by
the Company, and such certificates shall be issued in the name of the Holder of
this Warrant or in such name or names as may be directed by the Holder of this
Warrant; provided, however, that in the event the shares of Common Stock are to
be issued in a name other than the name of the Holder of this Warrant, this
Warrant when surrendered for exercise shall be accompanied by the Assignment
Form attached hereto duly executed by the Holder hereof; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

            6. Closing of Books. The Company will not close its shareholder
books or records in any manner which prevents the timely exercise of this
Warrant.

            7. Transfer, Division and Combination.

                   (a) Subject to compliance with any applicable securities
      laws, transfer of this Warrant and all rights hereunder, in whole or in
      part, shall be registered on the books of the Company to be maintained for
      such purpose, upon surrender of this Warrant at the principal office of
      the Company, together with a written assignment of this Warrant
      substantially in the form attached hereto duly executed by Holder or its
      agent or attorney and funds sufficient to pay any transfer taxes payable
      upon the making of such transfer. Upon such surrender and, if required,
      such payment, the Company shall execute and deliver a new Warrant or
      Warrants in the name of the assignee or assignees and in the denomination
      or denominations specified in such instrument of assignment, and shall
      issue to the assignor a new Warrant evidencing the portion of this Warrant
      not so assigned, and this Warrant shall promptly be cancelled. A Warrant,
      if properly assigned, may be exercised by a new holder for the purchase of
      shares of Common Stock without having a new Warrant issued.

                   (b) This Warrant may be divided or combined with other
      Warrants upon presentation hereof at the aforesaid office of the Company,
      together with a written notice specifying the names and denominations in
      which new Warrants are to be issued, signed by Holder or its agent or
      attorney. Subject to compliance with Section 7(a), as to any transfer
      which may be involved in such division or combination, the Company shall
      execute and deliver a new Warrant or Warrants in exchange for the Warrant
      or Warrants to be divided or combined in accordance with such notice.

                                       3
<PAGE>

                   (c) The Company shall prepare, issue and deliver at its own
      expense (other than transfer taxes) the new Warrant or Warrants under this
      Section 7.

                   (d) The Company agrees to maintain, at its aforesaid office,
      books for the registration and the registration of transfer of the
      Warrants.

            8. No Rights as Shareholder until Exercise. This Warrant does not
entitle the Holder hereof to any voting rights or other rights as a shareholder
of the Company prior to the exercise hereof. Upon the surrender of this Warrant
and the payment of the aggregate Exercise Price, the Warrant Shares so purchased
shall be and be deemed to be issued to such Holder as the record owner of such
shares as of the close of business on the later of the date of such surrender or
payment.

            9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant certificate
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it
(which shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock certificate.

            10. Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.

            11. Adjustments of Exercise Price and Number of Warrant Shares.

                   (a) Stock Splits, etc. The number and kind of securities
      purchasable upon the exercise of this Warrant and the Exercise Price shall
      be subject to adjustment from time to time upon the happening of any of
      the following. In case the Company shall (i) pay a dividend in shares of
      Common Stock or make a distribution in shares of Common Stock to holders
      of its outstanding Common Stock, (ii) subdivide its outstanding shares of
      Common Stock into a greater number of shares of Common Stock, (iii)
      combine its outstanding shares of Common Stock into a smaller number of
      shares of Common Stock or (iv) issue any shares of its capital stock in a
      reclassification of the Common Stock, then the number of Warrant Shares
      purchasable upon exercise of this Warrant immediately prior thereto shall
      be adjusted so that the holder of this Warrant shall be entitled to
      receive the kind and number of Warrant Shares or other securities of the
      Company which he would have owned or have been entitled to receive had
      such Warrant been exercised in advance thereof. Upon each such adjustment
      of the kind and number of Warrant Shares or other securities of the
      Company which are purchasable hereunder, the holder of this Warrant shall
      thereafter be entitled to purchase the number of Warrant Shares or other
      securities resulting from such adjustment at an

                                       4
<PAGE>

      Exercise Price per Warrant Share or other security obtained by multiplying
      the Exercise Price in effect immediately prior to such adjustment by the
      number of Warrant Shares purchasable pursuant hereto immediately prior to
      such adjustment and dividing by the number of Warrant Shares or other
      securities of the Company resulting from such adjustment. An adjustment
      made pursuant to this paragraph shall become effective immediately after
      the effective date of such event retroactive to the record date, if any,
      for such event.

                   (b) Reorganization, Reclassification, Merger, Consolidation
      or Disposition of Assets. In case the Company shall reorganize its
      capital, reclassify its capital stock, consolidate or merge with or into
      another corporation (where the Company is not the surviving corporation or
      where there is a change in or distribution with respect to the Common
      Stock of the Company), or sell, transfer or otherwise dispose of all or
      substantially all its property, assets or business to another corporation
      and, pursuant to the terms of such reorganization, reclassification,
      merger, consolidation or disposition of assets, shares of common stock of
      the successor or acquiring corporation, or any cash, shares of stock or
      other securities or property of any nature whatsoever (including warrants
      or other subscription or purchase rights) in addition to or in lieu of
      common stock of the successor or acquiring corporation ("Other Property"),
      are to be received by or distributed to the holders of Common Stock of the
      Company, then Holder shall have the right thereafter to receive, upon
      exercise of this Warrant, the number of shares of common stock of the
      successor or acquiring corporation or of the Company, if it is the
      surviving corporation, and Other Property receivable upon or as a result
      of such reorganization, reclassification, merger, consolidation or
      disposition of assets by a holder of the number of shares of Common Stock
      for which this Warrant is exercisable immediately prior to such event. In
      case of any such reorganization, reclassification, merger, consolidation
      or disposition of assets, the successor or acquiring corporation (if other
      than the Company) shall expressly assume the due and punctual observance
      and performance of each and every covenant and condition of this Warrant
      to be performed and observed by the Company and all the obligations and
      liabilities hereunder, subject to such modifications as may be deemed
      appropriate (as determined in good faith by resolution of the Board of
      Directors of the Company) in order to provide for adjustments of shares of
      Common Stock for which this Warrant is exercisable which shall be as
      nearly equivalent as practicable to the adjustments provided for in this
      Section 11. For purposes of this Section 11, "common stock of the
      successor or acquiring corporation" shall include stock of such
      corporation of any class which is not preferred as to dividends or assets
      over any other class of stock of such corporation and which is not subject
      to redemption and shall also include any evidences of indebtedness, shares
      of stock or other securities which are convertible into or exchangeable
      for any such stock, either immediately or upon the arrival of a specified
      date or the happening of a specified event and any warrants or other
      rights to subscribe for or purchase any such stock. The foregoing
      provisions of this Section 11 shall similarly apply to successive
      reorganizations, reclassifications, mergers, consolidations or disposition
      of assets.

                                       5
<PAGE>

            12. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant, reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.

            13. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall promptly mail by registered or certified mail, return receipt requested,
to the Holder of this Warrant notice of such adjustment or adjustments setting
forth the number of Warrant Shares (and other securities or property)
purchasable upon the exercise of this Warrant and the Exercise Price of such
Warrant Shares (and other securities or property) after such adjustment, setting
forth a brief statement of the facts requiring such adjustment and setting forth
the computation by which such adjustment was made. Such notice, in the absence
of manifest error, shall be conclusive evidence of the correctness of such
adjustment.

            14. Notice of Corporate Action. If at any time:

                   (a) the Company shall take a record of the holders of its
      Common Stock for the purpose of entitling them to receive a dividend or
      other distribution, or any right to subscribe for or purchase any
      evidences of its indebtedness, any shares of stock of any class or any
      other securities or property, or to receive any other right, or

                   (b) there shall be any capital reorganization of the Company,
      any reclassification or recapitalization of the capital stock of the
      Company or any consolidation or merger of the Company with, or any sale,
      transfer or other disposition of all or substantially all the property,
      assets or business of the Company to, another corporation or,

                   (c) there shall be a voluntary or involuntary dissolution,
      liquidation or winding up of the Company;

then, in any one or more of such cases, the Company shall give to Holder (i) at
least 30 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 30
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such

                                       6
<PAGE>

disposition, dissolution, liquidation or winding up. Each such written notice
shall be sufficiently given if addressed to Holder at the last address of Holder
appearing on the books of the Company and delivered in accordance with Section
17(d).

            15. Authorized Shares. The Company covenants that during the period
the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant. The
Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing stock
certificates or instructing the Company's transfer agent to execute and issue
the necessary certificates for, or to instruct the Company's transfer agent to
issue the Warrant Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as may be necessary to
assure that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of the
Principal Market upon which the Common Stock may be listed.

                  The Company shall not by any action, including, without
limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of Holder against impairment. Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise immediately prior to such increase in par
value, (b) take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant, and (c) use all commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.

                  Upon the request of Holder, the Company will at any time
during the period this Warrant is outstanding acknowledge in writing, in form
reasonably satisfactory to Holder, the continuing validity of this Warrant and
the obligations of the Company hereunder.

                  Before taking any action which would cause an adjustment
reducing the current Exercise Price below the then par value, if any, of the
shares of Common Stock issuable upon exercise of the Warrants, the Company shall
take any corporate action which may be necessary in order that the Company may
validly and legally issue fully paid and non-assessable shares of such Common
Stock at such adjusted Exercise Price.

                  Before taking any action which would result in an adjustment
in the number of shares of Common Stock for which this Warrant is exercisable or
in the Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents

                                       7
<PAGE>

thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

            16. Piggyback Registration Rights. The Company will register the
Warrant Shares for resale by the Holder on the first registration statement that
the Company files with the Commission after the Initial Exercise Date (the
"First Registration Statement"), but only if the Company is permitted to
register the Warrant Shares on a Form S-3 registration statement. In the event
that the Company is not permitted to register the Warrant Shares on a Form S-3,
the Company will register the Warrant Shares for resale by the Holder on the
second registration statement that the Company files with the Commission after
the Initial Exercise Date (the "Second Registration Statement"), which Second
Registration Statement, if applicable, shall be effective within 120 (150 in the
event the Commission conducts a "full review" of the First Registration
Statement) calendar days from the initial filing date of the First Registration
Statement. Any registration statement filed pursuant to this Agreement shall be
maintained and remain effective during the term of this Warrant. In the event
that the Company fails to register the Warrant Shares for resale as set forth in
this Section 16, then the Exercise Price of this Warrant shall decrease by one
dollar ($1.00) for each registration statement, starting with the Second
Registration Statement, filed with the Commission that does not also register
the Warrant Shares. Additionally, if applicable, the Exercise Price shall
decrease by one dollar ($1.00) in the event the Company fails to register the
Warrant Shares within 120 (150 in the event the Commission conducts a "full
review" of the First Registration Statement) calendar days from the initial
filing date of the First Registration Statement.

            17. Miscellaneous.

                   (a) Jurisdiction. This Warrant shall be binding upon any
      successors or assigns of the Company. This Warrant shall constitute a
      contract under the laws of New York without regard to its conflict of law
      principles or rules, and be subject to arbitration pursuant to the terms
      set forth in the Purchase Agreement.

                   (b) Restrictions. The Holder hereof acknowledges that the
      Warrant Shares acquired upon the exercise of this Warrant, if not
      registered, will have restrictions upon resale imposed by state and
      federal securities laws.

                   (c) Nonwaiver and Expenses. No course of dealing or any delay
      or failure to exercise any right hereunder on the part of Holder shall
      operate as a waiver of such right or otherwise prejudice Holder's rights,
      powers or remedies, notwithstanding all rights hereunder terminate on the
      Termination Date. If the Company willfully fails to comply with any
      material provision of this Warrant, the Company shall pay to Holder such
      amounts as shall be sufficient to cover any reasonable out of pocket costs
      and expenses including, but not limited to, reasonable attorneys' fees,
      including those of appellate proceedings, incurred by Holder in collecting
      any amounts due pursuant hereto or in otherwise enforcing any of its
      rights, powers or remedies hereunder.

                                       8
<PAGE>

                   (d) Notices. Any notice, request or other document required
      or permitted to be given or delivered to the Holder hereof by the Company
      shall be delivered in accordance with the notice provisions of the
      Purchase Agreement.

                   (e) Limitation of Liability. No provision hereof, in the
      absence of affirmative action by Holder to purchase shares of Common
      Stock, and no enumeration herein of the rights or privileges of Holder
      hereof, shall give rise to any liability of Holder for the purchase price
      of any Common Stock or as a stockholder of the Company, whether such
      liability is asserted by the Company or by creditors of the Company.

                   (f) Remedies. Holder, in addition to being entitled to
      exercise all rights granted by law, including recovery of damages, will be
      entitled to specific performance of its rights under this Warrant. The
      Company agrees that monetary damages would not be adequate compensation
      for any loss incurred by reason of a breach by it of the provisions of
      this Warrant and hereby agrees to waive the defense in any action for
      specific performance that a remedy at law would be adequate.

                   (g) Successors and Assigns. Subject to applicable securities
      laws, this Warrant and the rights and obligations evidenced hereby shall
      inure to the benefit of and be binding upon the successors of the Company
      and the successors and permitted assigns of Holder. The provisions of this
      Warrant are intended to be for the benefit of all Holders from time to
      time of this Warrant and shall be enforceable by any such Holder or holder
      of Warrant Shares.

                   (h) Indemnification. The Company agrees to indemnify and hold
      harmless Holder from and against any liabilities, obligations, losses,
      damages, penalties, actions, judgments, suits, claims, costs, attorneys'
      fees, expenses and disbursements of any kind which may be imposed upon,
      incurred by or asserted against Holder in any manner relating to or
      arising out of any failure by the Company to perform or observe in any
      material respect any of its covenants, agreements, undertakings or
      obligations set forth in this Warrant; provided, however, that the Company
      will not be liable hereunder to the extent that any liabilities,
      obligations, losses, damages, penalties, actions, judgments, suits,
      claims, costs, attorneys' fees, expenses or disbursements are found in a
      final non-appealable judgment by a court to have resulted from Holder's
      negligence, bad faith or willful misconduct in its capacity as a
      stockholder or warrantholder of the Company.

                   (i) Amendment. This Warrant may be modified or amended or the
      provisions hereof waived with the written consent of the Company and the
      Holder.

                   (j) Severability. Wherever possible, each provision of this
      Warrant shall be interpreted in such manner as to be effective and valid
      under applicable law, but if any provision of this Warrant shall be
      prohibited by or invalid under applicable law,

                                       9
<PAGE>

      such provision shall be ineffective to the extent of such prohibition or
      invalidity, without invalidating the remainder of such provisions or the
      remaining provisions of this Warrant.

            Headings. The headings used in this Warrant are for the convenience
of reference only and shall not, for any purpose, be deemed a part of this
Warrant.

            IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.

Dated: August 16, 2001

                                            NASTECH PHARMACEUTICAL COMPANY INC.

                                            By:_________________________________
                                               Name:
                                               Title:

                                       10
<PAGE>

                               NOTICE OF EXERCISE

To: Nastech Pharmaceutical Company Inc.

            (1) The undersigned hereby elects to purchase ________ shares of
Common Stock (the "Common Stock"), of Nastech Pharmaceutical Company Inc.
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.

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

__________________________________
(Name)

__________________________________
(Address)
__________________________________

Dated:

                                        __________________________________
                                        Signature

<PAGE>

                           NOTICE OF CASHLESS EXERCISE

To: Nastech Pharmaceutical Company Inc.

            (1) The undersigned hereby elects to convert by cashless exercise
the right to purchase ________ shares of Common Stock (the "Converted Rights"),
of Nastech Pharmaceutical Company Inc. into shares of Common Stock pursuant to
the terms of the attached Warrant. Pursuant to Section 3 of the Warrant, no
payment will be tendered.

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

                __________________________________
                (Name)

                __________________________________
                (Address)
                __________________________________

      o     Exercise Date: ____________

      o     Date of Trading Day preceding Exercise Date: ____________

      o     Average of the high ($________) and low ($________) trading prices
            per share of Common Stock on the Trading Day preceding Exercise
            Date: $________ ("A")

      o     Exercise Price of the Warrants: $________ ("B")

      o     Converted Rights: ________ ("X")

      o     Calculation of quotient [((A-B) * (X)) / A]: ________. A certificate
            shall be issued for the number of shares equal to the whole number
            portion of this quotient, which is ________. The Company shall pay a
            cash adjustment in respect of the fractional portion of this
            quotient in an amount equal to the product of the fractional portion
            of this quotient and the Exercise Price, which product is ________.

                                            ____________________________________
                                            Signature                  Date

                                       2
<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

            FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

                                                Dated:  ______________, _______

                           Holder's Signature: ____________________________

                           Holder's Address:   ____________________________

                                               ____________________________

Signature Guaranteed:  ________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.

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