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                                                                   EXHIBIT 10.4

                          ANADYS PHARMACEUTICALS, INC.
                           2002 EQUITY INCENTIVE PLAN

                             STOCK OPTION AGREEMENT
              (INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)

         Pursuant to your Stock Option Grant Notice ("Grant Notice") and this
Stock Option Agreement, Anadys Pharmaceuticals, Inc. (the "Company") has granted
you an option under its 2002 Equity Incentive Plan (the "Plan") to purchase the
number of shares of the Company's Common Stock indicated in your Grant Notice at
the exercise price indicated in your Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the Plan shall have the
same definitions as in the Plan.

         The details of your option are as follows:

         1.       VESTING. Subject to the limitations contained herein, your
option will vest as provided in your Grant Notice, provided that vesting will
cease upon the termination of your Continuous Service.

         2.       NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of
Common Stock subject to your option and your exercise price per share referenced
in your Grant Notice may be adjusted from time to time for Capitalization
Adjustments.

         3.       METHOD OF PAYMENT. Payment of the exercise price is due in
full upon exercise of all or any part of your option. You may elect to make
payment of the exercise price in cash or by check or in any other manner
PERMITTED BY YOUR GRANT NOTICE, which may include one or more of the following:

                  (a)      In the Company's sole discretion at the time your
option is exercised and provided that at the time of exercise the Common Stock
is publicly traded and quoted regularly in The Wall Street Journal, pursuant to
a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the receipt
of cash (or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales proceeds.

                  (b)      Provided that at the time of exercise the Common
Stock is publicly traded and quoted regularly in The Wall Street Journal, by
delivery of already-owned shares of Common Stock either that you have held for
the period required to avoid a charge to the Company's reported earnings
(generally six (6) months) or that you did not acquire, directly or indirectly
from the Company, that are owned free and clear of any liens, claims,
encumbrances or security interests, and that are valued at Fair Market Value on
the date of exercise. "Delivery" for these purposes, in the sole discretion of
the Company at the time you exercise your option, shall include delivery to the
Company of your attestation of ownership of such shares of Common Stock in a
form approved by the Company. Notwithstanding the foregoing, you may not
exercise your option by tender to the Company of Common Stock to the extent such
tender

                                       1.
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would violate the provisions of any law, regulation or agreement restricting the
redemption of the Company's stock.

         4.       WHOLE SHARES. You may exercise your option only for whole
shares of Common Stock.

         5.       SECURITIES LAW COMPLIANCE. Notwithstanding anything to the
contrary contained herein, you may not exercise your option unless the shares of
Common Stock issuable upon such exercise are then registered under the
Securities Act or, if such shares of Common Stock are not then so registered,
the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option
also must comply with other applicable laws and regulations governing your
option, and you may not exercise your option if the Company determines that such
exercise would not be in material compliance with such laws and regulations.

         6.       TERM. You may not exercise your option before the commencement
of its term or after its term expires. The term of your option commences on the
Date of Grant and expires upon the earliest of the following:

                  (a)      immediately upon the termination of your Continuous
Service for Cause;

                  (b)      thirty (30) days after the termination of your
Continuous Service for any reason other than Cause, Disability or death,
provided that if during any part of such thirty (30) day period you may not
exercise your option solely because of the condition set forth in the preceding
paragraph relating to "Securities Law Compliance," your option shall not expire
until the earlier of the Expiration Date or until it shall have been exercisable
for an aggregate period of thirty (30) days after the termination of your
Continuous Service;

                  (c)      six (6) months after the termination of your
Continuous Service due to your Disability;

                  (d)      twelve (12) months after your death if you die either
during your Continuous Service or within thirty (30) days after your Continuous
Service terminates for any reason other than Cause;

                  (e)      the Expiration Date indicated in your Grant Notice;
or

                  (f)      the day before the tenth (10th) anniversary of the
Date of Grant.

         If your option is an Incentive Stock Option, note that, to obtain the
federal income tax advantages associated with an Incentive Stock Option, the
Code requires that at all times beginning on the date of grant of your option
and ending on the day three (3) months before the date of your option's
exercise, you must be an employee of the Company or an Affiliate, except in the
event of your death or Disability. The Company has provided for extended
exercisability of your option under certain circumstances for your benefit but
cannot guarantee that your option will necessarily be treated as an Incentive
Stock Option if you continue to provide services to the Company or an Affiliate
as a Consultant or Director after your employment terminates or if you

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otherwise exercise your option more than three (3) months after the date your
employment terminates.

         7.       EXERCISE.

                  (a)      You may exercise the vested portion of your option
(and the unvested portion of your option if your Grant Notice so permits) during
its term by delivering a Notice of Exercise (in a form designated by the
Company) together with the exercise price to the Secretary of the Company, or to
such other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require.

                  (b)      By exercising your option you agree that, as a
condition to any exercise of your option, the Company may require you to enter
into an arrangement providing for the payment by you to the Company of any tax
withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the
shares of Common Stock are subject at the time of exercise, or (3) the
disposition of shares of Common Stock acquired upon such exercise.

                  (c)      If your option is an Incentive Stock Option, by
exercising your option you agree that you will notify the Company in writing
within fifteen (15) days after the date of any disposition of any of the shares
of the Common Stock issued upon exercise of your option that occurs within two
(2) years after the date of your option grant or within one (1) year after such
shares of Common Stock are transferred upon exercise of your option.

                  (d)      By exercising your option you agree that the Company
(or a representative of the underwriter(s)) may, in connection with the first
underwritten registration of the offering of any securities of the Company under
the Securities Act, require that you not sell, dispose of, transfer, make any
short sale of, grant any option for the purchase of, or enter into any hedging
or similar transaction with the same economic effect as a sale with respect to,
any shares of Common Stock or other securities of the Company held by you, for a
period of time specified by the underwriter(s) (not to exceed one hundred eighty
(180) days) following the effective date of the registration statement of the
Company filed under the Securities Act. You further agree to execute and deliver
such other agreements as may be reasonably requested by the Company and/or the
underwriter(s) that are consistent with the foregoing or that are necessary to
give further effect thereto. In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to your shares of
Common Stock until the end of such period. The underwriters of the Company's
stock are intended third party beneficiaries of this Section 7(d) and shall have
the right, power and authority to enforce the provisions hereof as though they
were a party hereto.

         8.       TRANSFERABILITY. Your option is not transferable, except by
will or by the laws of descent and distribution, and is exercisable during your
life only by you. Notwithstanding the foregoing, by delivering written notice to
the Company, in a form satisfactory to the Company, you may designate a third
party who, in the event of your death, shall thereafter be entitled to exercise
your option.

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         9.       RIGHT OF FIRST REFUSAL.

                  (a)      Shares of Common Stock that you acquire upon exercise
of your option are subject to any right of first refusal that may be described
in the Company's bylaws in effect at such time the Company elects to exercise
its right; provided, however, that if your option is an Incentive Stock Option
and the right of first refusal described in the Company's bylaws in effect at
the time the Company elects to exercise its right is more beneficial to you than
the right of first refusal described in the Company's bylaws on the Date of
Grant, then the right of first refusal described in the Company's bylaws on the
Date of Grant shall apply. The Company's right of first refusal shall expire on
the Listing Date. For purposes of this Agreement, Listing Date shall mean the
first date upon which any security of the Company is listed (or approved for
listing) upon notice of issuance on a national securities exchange or on the
National Market System of the Nasdaq Stock Market (or any successor to that
entity).

                  (b)      If there is no right of first refusal described in
the Company's bylaws in effect at such time the Company elects to exercise its
right, then you may not validly transfer (as hereinafter defined) any of the
shares of Common Stock that you acquire upon exercise of your option, or any
interest in such shares, unless such transfer is solely for cash consideration
and is made in compliance with the following provisions (the Company's "Right of
First Refusal"):

                           (i)      Before there can be a valid transfer of any
shares or any interest therein, the record holder of the shares to be
transferred (the "Offered Shares") shall give written notice (by registered or
certified mail) to the Company. Such notice shall specify the identity of the
proposed transferee, the cash price offered for the Offered Shares by the
proposed transferee and the other terms and conditions of the proposed transfer.
The date such notice is mailed shall be hereinafter referred to as the "notice
date," and the record holder of the Offered Shares shall be hereinafter referred
to as the "Offeror."

                           (ii)     For a period of thirty (30) calendar days
after the notice date, the Company shall have the option, but not the
obligation, to purchase all (or any part) of the Offered Shares at the purchase
price and on the terms set forth in subsection 9(b)(iii). The Company may
exercise its Right of First Refusal by mailing (by registered or certified mail)
written notice of exercise of its Right of First Refusal to the Offeror prior to
the end of said thirty (30) days.

                           (iii)    The price at which the Company may purchase
the Offered Shares pursuant to the exercise of its Right of First Refusal shall
be the cash price offered for the Offered Shares by the proposed transferee (as
set forth in the notice required under subsection 9(b)(i)). The Company's notice
of exercise of its Right of First Refusal shall be accompanied by full payment
for the Offered Shares and, upon such payment by the Company, the Company shall
acquire full right, title and interest to all of the Offered Shares.

                           (iv)     If, and only if, the option given pursuant
to subsection 9(b)(ii) is not exercised, the transfer proposed in the notice
given pursuant to subsection 9(b)(i) may take place; provided, however, that
such transfer must, in all respects, be exactly as proposed in said notice
except that such transfer may not take place either before the tenth (10th)
calendar day after the expiration of said 30-day option exercise period or after
the ninetieth (90th) calendar

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day after the expiration of said 30-day option exercise period, and if such
transfer has not taken place prior to said ninetieth (90th) day, such transfer
may not take place without once again complying with this subsection 9(b).

                           (v)      As used in this subsection 9(b), the term
"transfer" means any sale, encumbrance, pledge, gift or other form of
disposition or transfer of shares of the Company's stock or any legal or
equitable interest therein; provided, however, that the term "transfer" does not
include a transfer of such shares or interests by will or by the applicable laws
of descent and distribution or a bona fide gift of such shares if the donee
agrees to be bound by the provisions of this Stock Option Agreement.

                           (vi)     None of the shares of the Company's stock
purchased upon exercise of your option shall be transferred on the Company's
books nor shall the Company recognize any such transfer of any such shares or
any interest therein unless and until all applicable provisions of this
subsection 9(b) have been complied with in all respects. The certificates of
stock evidencing shares of stock purchased upon exercise of your option shall
bear an appropriate legend referring to the transfer restrictions imposed by
this subsection 9(b).

                           (vii)    If, from time to time, there is any stock
dividend, stock split or other change in the character or amount of any of the
outstanding stock of the corporation the stock of which is subject to the
provisions of your option, then in such event any and all new, substituted or
additional securities to which you are entitled by reason of your ownership of
the shares acquired under your option shall be immediately subject to the
Company's Right of First Refusal with the same force and effect as the shares
you acquired pursuant to the exercise of your option.

                           (viii)   To ensure that shares subject to the
Company's Right of First Refusal will be available for purchase by the Company,
the Company may require you to deposit the certificate(s) evidencing the shares
that you purchase upon exercise of your option with an escrow agent designated
by the Company under the terms and conditions of an escrow agreement approved by
the Company. If the Company does not require such deposit as a condition of
exercise of your option, the Company reserves the right at any time to require
you to so deposit the certificate(s) in escrow. As soon as practicable after the
expiration of the Company's Right of First Refusal, the agent shall deliver to
you the shares and any other property no longer subject to such restriction. In
the event the shares and any other property held in escrow are subject to the
Company's exercise of its Right of First Refusal, the notices required to be
given to you shall be given to the escrow agent, and any payment required to be
given to you shall be given to the escrow agent. Within thirty (30) days after
payment by the Company for the Offered Shares, the escrow agent shall deliver
the Offered Shares that the Company has purchased to the Company and shall
deliver the payment received from the Company to you.

                  (c)      The Company's Right of First Refusal shall expire on
the Listing Date.

         10.      RIGHT OF REPURCHASE. To the extent provided in the Company's
bylaws in effect at such time the Company elects to exercise its right, the
Company shall have the right to repurchase all or any part of the shares of
Common Stock you acquire pursuant to the exercise of your option.

                                       5.
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         11.      OPTION NOT A SERVICE CONTRACT. Your option is not an
employment or service contract, and nothing in your option shall be deemed to
create in any way whatsoever any obligation on your part to continue in the
employ of the Company or an Affiliate, or of the Company or an Affiliate to
continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective stockholders, Boards of Directors,
Officers or Employees to continue any relationship that you might have as a
Director or Consultant for the Company or an Affiliate.

         12.      WITHHOLDING OBLIGATIONS.

                  (a)      At the time you exercise your option, in whole or in
part, or at any time thereafter as requested by the Company, you hereby
authorize withholding from payroll and any other amounts payable to you, and
otherwise agree to make adequate provision for (including by means of a
"cashless exercise" pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board to the extent permitted by the
Company), any sums required to satisfy the federal, state, local and foreign tax
withholding obligations of the Company or an Affiliate, if any, which arise in
connection with the exercise of your option.

                  (b)      Upon your request and subject to approval by the
Company, in its sole discretion, and compliance with any applicable legal
conditions or restrictions, the Company may withhold from fully vested shares of
Common Stock otherwise issuable to you upon the exercise of your option a number
of whole shares of Common Stock having a Fair Market Value, determined by the
Company as of the date of exercise, not in excess of the minimum amount of tax
required to be withheld by law (or such lower amount as may be necessary to
avoid variable award accounting). If the date of determination of any tax
withholding obligation is deferred to a date later than the date of exercise of
your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of
the Code, covering the aggregate number of shares of Common Stock acquired upon
such exercise with respect to which such determination is otherwise deferred, to
accelerate the determination of such tax withholding obligation to the date of
exercise of your option. Notwithstanding the filing of such election, shares of
Common Stock shall be withheld solely from fully vested shares of Common Stock
determined as of the date of exercise of your option that are otherwise issuable
to you upon such exercise. Any adverse consequences to you arising in connection
with such share withholding procedure shall be your sole responsibility.

                  (c)      You may not exercise your option unless the tax
withholding obligations of the Company and/or any Affiliate are satisfied.
Accordingly, you may not be able to exercise your option when desired even
though your option is vested, and the Company shall have no obligation to issue
a certificate for such shares of Common Stock or release such shares of Common
Stock from any escrow provided for herein unless such obligations are satisfied.

         13.      NOTICES. Any notices provided for in your option or the Plan
shall be given in writing and shall be deemed effectively given upon receipt or,
in the case of notices delivered by mail by the Company to you, five (5) days
after deposit in the United States mail, postage prepaid, addressed to you at
the last address you provided to the Company.

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         14.      GOVERNING PLAN DOCUMENT. Your option is subject to all the
provisions of the Plan, the provisions of which are hereby made a part of your
option, and is further subject to all interpretations, amendments, rules and
regulations, which may from time to time be promulgated and adopted pursuant to
the Plan. In the event of any conflict between the provisions of your option and
those of the Plan, the provisions of the Plan shall control.

                                       7.<PAGE>

                                                                   EXHIBIT 10.11

                               INDEMNITY AGREEMENT

         THIS AGREEMENT is made and entered into this __________ day of
__________, 2003 by and between ANADYS PHARMACEUTICALS, INC., a Delaware
corporation (the "Corporation"), and __________ ("Agent").

                                    RECITALS

         WHEREAS, Agent performs a valuable service to the Corporation in
__________ capacity as __________ of the Corporation;

         WHEREAS, the stockholders of the Corporation have adopted bylaws (the
"Bylaws") providing for the indemnification of the directors, officers,
employees and other agents of the Corporation, including persons serving at the
request of the Corporation in such capacities with other corporations or
enterprises, as authorized by the Delaware General Corporation Law, as amended
(the "Code");

         WHEREAS, the Bylaws and the Code, by their non-exclusive nature, permit
contracts between the Corporation and its agents, officers, employees and other
agents with respect to indemnification of such persons; and

         WHEREAS, in order to induce Agent to continue to serve as __________ of
the Corporation, the Corporation has determined and agreed to enter into this
Agreement with Agent;

         NOW, THEREFORE, in consideration of Agent's continued service as
__________ after the date hereof, the parties hereto agree as follows:

                                    AGREEMENT

         1.       SERVICES TO THE CORPORATION. Agent will serve, at the will of
the Corporation or under separate contract, if any such contract exists, as
__________ of the Corporation or as a director, officer or other fiduciary of an
affiliate of the Corporation (including any employee benefit plan of the
Corporation) faithfully and to the best of his ability so long as he is duly
elected and qualified in accordance with the provisions of the Bylaws or other
applicable charter documents of the Corporation or such affiliate; provided,
however, that Agent may at any time and for any reason resign from such position
(subject to any contractual obligation that Agent may have assumed apart from
this Agreement) and that the Corporation or any affiliate shall have no
obligation under this Agreement to continue Agent in any such position.

         2.       INDEMNITY OF AGENT. The Corporation hereby agrees to hold
harmless and indemnify Agent to the fullest extent authorized or permitted by
the provisions of the Bylaws and the Code, as the same may be amended from time
to time (but, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than the Bylaws or the Code permitted
prior to adoption of such amendment).

                                       1.

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         3.       ADDITIONAL INDEMNITY. In addition to and not in limitation of
the indemnification otherwise provided for herein, and subject only to the
exclusions set forth in Section 4 hereof, the Corporation hereby further agrees
to hold harmless and indemnify Agent:

                  (a)      against any and all expenses (including attorneys'
fees), witness fees, damages, judgments, fines and amounts paid in settlement
and any other amounts that Agent becomes legally obligated to pay because of any
claim or claims made against or by him in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
arbitrational, administrative or investigative (including an action by or in the
right of the Corporation) to which Agent is, was or at any time becomes a party,
or is threatened to be made a party, by reason of the fact that Agent is, was or
at any time becomes a director, officer, employee or other agent of Corporation,
or is or was serving or at any time serves at the request of the Corporation as
a director, officer, employee or other agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise;
and

                  (b)      otherwise to the fullest extent as may be provided to
Agent by the Corporation under the non-exclusivity provisions of the Code and
Section 42 of the Bylaws.

         4.       LIMITATIONS ON ADDITIONAL INDEMNITY. No indemnity pursuant to
Section 3 hereof shall be paid by the Corporation:

                  (a)      on account of any claim against Agent solely for an
accounting of profits made from the purchase or sale by Agent of securities of
the Corporation pursuant to the provisions of Section 16(b) of the Securities
Exchange Act of 1934 and amendments thereto or similar provisions of any
federal, state or local statutory law;

                  (b)      on account of Agent's conduct that is established by
a final judgment as knowingly fraudulent or deliberately dishonest or that
constituted willful misconduct;

                  (c)      on account of Agent's conduct that is established by
a final judgment as constituting a breach of Agent's duty of loyalty to the
Corporation or resulting in any personal profit or advantage to which Agent was
not legally entitled;

                  (d)      for which payment is actually made to Agent under a
valid and collectible insurance policy or under a valid and enforceable
indemnity clause, bylaw or agreement, except in respect of any excess beyond
payment under such insurance, clause, bylaw or agreement;

                  (e)      if indemnification is not lawful (and, in this
respect, both the Corporation and Agent have been advised that the Securities
and Exchange Commission believes that indemnification for liabilities arising
under the federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication); or

                  (f)      in connection with any proceeding (or part thereof)
initiated by Agent, or any proceeding by Agent against the Corporation or its
directors, officers, employees or other agents, unless (i) such indemnification
is expressly required to be made by law, (ii) the proceeding was authorized by
the Board of Directors of the Corporation, (iii) such

                                       2.

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indemnification is provided by the Corporation, in its sole discretion, pursuant
to the powers vested in the Corporation under the Code, or (iv) the proceeding
is initiated pursuant to Section 9 hereof.

         5.       CONTINUATION OF INDEMNITY. All agreements and obligations of
the Corporation contained herein shall continue during the period Agent is a
director, officer, employee or other agent of the Corporation (or is or was
serving at the request of the Corporation as a director, officer, employee or
other agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise) and shall continue thereafter so long as Agent
shall be subject to any possible claim or threatened, pending or completed
action, suit or proceeding, whether civil, criminal, arbitrational,
administrative or investigative, by reason of the fact that Agent was serving in
the capacity referred to herein.

         6.       PARTIAL INDEMNIFICATION. Agent shall be entitled under this
Agreement to indemnification by the Corporation for a portion of the expenses
(including attorneys' fees), witness fees, damages, judgments, fines and amounts
paid in settlement and any other amounts that Agent becomes legally obligated to
pay in connection with any action, suit or proceeding referred to in Section 3
hereof even if not entitled hereunder to indemnification for the total amount
thereof, and the Corporation shall indemnify Agent for the portion thereof to
which Agent is entitled.

         7.       NOTIFICATION AND DEFENSE OF CLAIM. Not later than thirty (30)
days after receipt by Agent of notice of the commencement of any action, suit or
proceeding, Agent will, if a claim in respect thereof is to be made against the
Corporation under this Agreement, notify the Corporation of the commencement
thereof; but the omission so to notify the Corporation will not relieve it from
any liability which it may have to Agent otherwise than under this Agreement.
With respect to any such action, suit or proceeding as to which Agent notifies
the Corporation of the commencement thereof:

                  (a)      the Corporation will be entitled to participate
therein at its own expense;

                  (b)      except as otherwise provided below, the Corporation
may, at its option and jointly with any other indemnifying party similarly
notified and electing to assume such defense, assume the defense thereof, with
counsel reasonably satisfactory to Agent. After notice from the Corporation to
Agent of its election to assume the defense thereof, the Corporation will not be
liable to Agent under this Agreement for any legal or other expenses
subsequently incurred by Agent in connection with the defense thereof except for
reasonable costs of investigation or otherwise as provided below. Agent shall
have the right to employ separate counsel in such action, suit or proceeding but
the fees and expenses of such counsel incurred after notice from the Corporation
of its assumption of the defense thereof shall be at the expense of Agent unless
(i) the employment of counsel by Agent has been authorized by the Corporation,
(ii) Agent shall have reasonably concluded, and so notified the Corporation,
that there is an actual conflict of interest between the Corporation and Agent
in the conduct of the defense of such action or (iii) the Corporation shall not
in fact have employed counsel to assume the defense of such action, in each of
which cases the fees and expenses of Agent's separate counsel shall be at the
expense of the Corporation. The Corporation shall not be entitled to assume the
defense of

                                       3.

<PAGE>

any action, suit or proceeding brought by or on behalf of the Corporation or as
to which Agent shall have made the conclusion provided for in clause (ii) above;
and

                  (c)      the Corporation shall not be liable to indemnify
Agent under this Agreement for any amounts paid in settlement of any action or
claim effected without its written consent, which shall not be unreasonably
withheld. The Corporation shall be permitted to settle any action except that it
shall not settle any action or claim in any manner which would impose any
penalty or limitation on Agent without Agent's written consent, which may be
given or withheld in Agent's sole discretion.

         8.       EXPENSES. The Corporation shall advance, prior to the final
disposition of any proceeding, promptly following request therefor, all expenses
incurred by Agent in connection with such proceeding upon receipt of an
undertaking by or on behalf of Agent to repay said amounts if it shall be
determined ultimately that Agent is not entitled to be indemnified under the
provisions of this Agreement, the Bylaws, the Code or otherwise.

         9.       ENFORCEMENT. Any right to indemnification or advances granted
by this Agreement to Agent shall be enforceable by or on behalf of Agent in any
court of competent jurisdiction if (i) the claim for indemnification or advances
is denied, in whole or in part, or (ii) no disposition of such claim is made
within ninety (90) days of request therefor. Agent, in such enforcement action,
if successful in whole or in part, shall be entitled to be paid also the expense
of prosecuting his claim. It shall be a defense to any action for which a claim
for indemnification is made under Section 3 hereof (other than an action brought
to enforce a claim for expenses pursuant to Section 8 hereof, provided that the
required undertaking has been tendered to the Corporation) that Agent is not
entitled to indemnification because of the limitations set forth in Section 4
hereof. Neither the failure of the Corporation (including its Board of Directors
or its stockholders) to have made a determination prior to the commencement of
such enforcement action that indemnification of Agent is proper in the
circumstances, nor an actual determination by the Corporation (including its
Board of Directors or its stockholders) that such indemnification is improper
shall be a defense to the action or create a presumption that Agent is not
entitled to indemnification under this Agreement or otherwise.

         10.      SUBROGATION. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Agent, who shall execute all documents required and shall
do all acts that may be necessary to secure such rights and to enable the
Corporation effectively to bring suit to enforce such rights.

         11.      NON-EXCLUSIVITY OF RIGHTS. The rights conferred on Agent by
this Agreement shall not be exclusive of any other right which Agent may have or
hereafter acquire under any statute, provision of the Corporation's Certificate
of Incorporation or Bylaws, agreement, vote of stockholders or directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding office.

         12.      SURVIVAL OF RIGHTS.

                  (a)      The rights conferred on Agent by this Agreement shall
continue after Agent has ceased to be a director, officer, employee or other
agent of the Corporation or to serve

                                       4.

<PAGE>

at the request of the Corporation as a director, officer, employee or other
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise and shall inure to the benefit of Agent's
heirs, executors and administrators.

                  (b)      The Corporation shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Corporation, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform if no such succession
had taken place.

         13.      SEPARABILITY. Each of the provisions of this Agreement is a
separate and distinct agreement and independent of the others, so that if any
provision hereof shall be held to be invalid for any reason, such invalidity or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof. Furthermore, if this Agreement shall be invalidated in its
entirety on any ground, then the Corporation shall nevertheless indemnify Agent
to the fullest extent provided by the Bylaws, the Code or any other applicable
law.

         14.      GOVERNING LAW. This Agreement shall be interpreted and
enforced in accordance with the laws of the State of Delaware.

         15.      AMENDMENT AND TERMINATION. No amendment, modification,
termination or cancellation of this Agreement shall be effective unless in
writing signed by both parties hereto.

         16.      IDENTICAL COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute but one and the same
Agreement. Only one such counterpart need be produced to evidence the existence
of this Agreement.

         17.      HEADINGS. The headings of the sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof.

         18.      NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (i) upon delivery if delivered by hand to the party to whom such
communication was directed or (ii) upon the third business day after the date on
which such communication was mailed if mailed by certified or registered mail
with postage prepaid:

                  (a)      If to Agent, at the address indicated on the
signature page hereof.

                  (b)      If to the Corporation, to:

                           ANADYS PHARMACEUTICALS, INC.
                           9050 CAMINO SANTA FE
                           SAN DIEGO, CA 92121

or to such other address as may have been furnished to Agent by the Corporation.

                                       5.

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.

                                       ANADYS PHARMACEUTICALS, INC.

                                       By:_____________________________________

                                       Title:__________________________________

                                       AGENT

                                       ________________________________________
                                       ____________________

                                       Address:

                                       ________________________________________

                                       ________________________________________

                                       6.

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