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EXHIBIT 10.5

INDEMNIFICATION AGREEMENT

     This Indemnification Agreement (the “Agreement”) is entered into as of the 24th day
of February, 2006, by and among Sirna Therapeutics, Inc., a Delaware
corporation (the “Company”)
and the indemnitees listed on the signature pages hereto (each an “Indemnitee” and collectively,
the “Indemnitees”).

RECITALS

     The Company and the Indemnitees recognize the continued difficulty in obtaining liability
insurance for the Company’s directors, officers, employees, controlling persons, agents and
fiduciaries, the significant increases in the cost of such insurance and the general reductions in
the coverage of such insurance.

     The Company and the Indemnitees further recognize the substantial increase in corporate
litigation in general, subjecting directors, officers, employees, controlling persons, agents and
fiduciaries to expensive litigation risks at the same time as the availability and coverage of
liability insurance has been severely limited.

     The Indemnitees do not regard the prior protection available as adequate under the
circumstances, and the Indemnitees and other directors, officers, employees, controlling persons,
agents and fiduciaries of the Company are not willing to serve in such capacities without
additional protection, so the Company and the Indemnitees desire to enter into this Agreement.

     The Company (i) desires to attract and retain the involvement of highly qualified groups, such
as the Indemnitees, to serve the Company and, in part, to induce each Indemnitee to be involved
with the Company and (ii) wishes to provide for the indemnification and advancing of expenses to
each Indemnitee to the maximum extent permitted by law.

     In view of the considerations set forth above, the Company desires that each Indemnitee be
indemnified by the Company as set forth herein.

     NOW, THEREFORE, the Company and each Indemnitee hereby agrees as follows:

Indemnification.

     Indemnification of Expenses. The Company shall indemnify and hold harmless each
Indemnitee (including, without limitation, its respective directors, officers, partners, employees,
agents and spouses) and each person who controls any of them or who may be liable within the
meaning of Section 15 of the Securities Act of 1933, as amended (the “Securities Act”), or Section
20 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) to the fullest extent
permitted by law if such Indemnitee was or is or becomes a party to or witness or other participant
in, or is threatened to be made a party to or witness or other participant in, any threatened,
pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any
hearing, inquiry or investigation that such Indemnitee reasonably believes might lead to the
institution of any such action, suit, proceeding or alternative dispute resolution mechanism,
whether civil, criminal, administrative, investigative or other (hereinafter a “Claim”) by reason
of (or arising in part out of) any event or occurrence related to the fact that such Indemnitee is
or was a director, officer, employee, controlling person, agent or fiduciary of

 

 

the Company, or any subsidiary of the Company, or is or was serving at the request of the Company
as a director, officer, employee, controlling person, agent or fiduciary of another corporation,
partnership, joint venture, trust or other enterprise, or by reason of any action or inaction on
the part of such Indemnitee while serving in such capacity including, without limitation, any and
all losses, claims, damages, expenses and liabilities, joint or several (including, without
limitation, any investigation, legal and other expenses incurred in connection with, and any amount
paid in settlement of, any action, suit, proceeding or any claim asserted) under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, at common law or
otherwise, which relate directly or indirectly to the registration, purchase, sale or ownership of
any securities of the Company or to any fiduciary obligation owed with respect thereto (hereinafter
an “Indemnification Event”) against any and all expenses (including, without limitation, reasonable
attorneys’ fees and all other reasonable costs, expenses and obligations incurred in connection
with investigating, defending a witness in or participating in (including, without limitation, on
appeal), or preparing to defend, be a witness in or participate in, any such action, suit,
proceeding, alternative dispute resolution mechanism, hearing, inquiry or investigation),
judgments, fines, penalties and amounts paid in settlement (if such settlement is approved in
advance by the Company, which approval shall not be unreasonably withheld) of such Claim and any
federal, state, local or foreign taxes imposed on such Indemnitee as a result of the actual or
deemed receipt of any payments under this Agreement (collectively,
hereinafter “Expenses”),
including, without limitation, all interest, assessments and other charges paid or payable in
connection with or in respect of such Expenses. Such payment of allowed Expenses shall be made by
the Company as soon as practicable but in any event no later than five (5) days after written
demand by the Indemnitee therefor is presented to the Company.

     Reviewing Party. Notwithstanding the foregoing, (i) the obligations of the Company
under Section 1(a) shall be subject to the condition that the Reviewing Party (as described in
Section 10(e) hereof) shall not have determined (in a written opinion, in any case in which the
Independent Legal Counsel referred to in Section 10(d) hereof is involved) that an Indemnitee would
not be permitted to be indemnified under applicable law, and (ii) each Indemnitee acknowledges and
agrees that the obligation of the Company to make an advance payment of Expenses to an Indemnitee
pursuant to Section 2(a) (an “Expense Advance”) shall be subject to the condition that, if, when
and to the extent that the Reviewing Party determines that an Indemnitee would not be permitted to
be so indemnified under applicable law, the Company shall be entitled to be reimbursed by such
Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid;
provided, however, that if such Indemnitee has commenced or thereafter commences
legal proceedings in a court of competent jurisdiction to secure a determination that such
Indemnitee should be indemnified under applicable law, any determination made by the Reviewing
Party that such Indemnitee would not be permitted to be indemnified under applicable law shall not
be binding and such Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto (as to which all rights
of appeal therefrom have been exhausted or lapsed). An Indemnitee’s obligation to reimburse the
Company for any Expense Advance shall be unsecured and no interest shall be charged thereon if such
reimbursement is made within thirty (30) days of such final judicial determination, unless
otherwise required by the court. If there has not been a Change in Control (as defined in Section
10(c) hereof), the Reviewing Party shall be selected by the Board of Directors, and if there has
been such a Change in Control (other than a Change in Control that has been approved by a majority
of the Company’s Board of Directors

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who were directors immediately prior to such Change in Control), the Reviewing Party shall be
the Independent Legal Counsel referred to in Section 10(d) hereof. If there has been no
determination by the Reviewing Party or if the Reviewing Party determines that an Indemnitee
substantively would not be permitted to be indemnified in whole or in part under applicable law,
the Indemnitee shall have the right to commence litigation seeking an initial determination by the
court or challenging any such determination by the Reviewing Party or any aspect thereof,
including, without limitation, the legal or factual bases therefor, and the Company hereby consents
to service of process and to appear in any such proceeding. Any determination by the Reviewing
Party otherwise shall be conclusive and binding on the Company and such Indemnitee.

     Contribution. If the indemnification provided for in Section 1(a) above for any
reason is held by a court of competent jurisdiction to be unavailable to an Indemnitee in respect
of any losses, claims, damages, expenses or liabilities referred to therein, then the Company, in
lieu of indemnifying such Indemnitee thereunder, shall contribute to the amount paid or payable by
such Indemnitee as a result of such losses, claims, damages, expenses or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company and the
Indemnitees, or (ii) if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company and the Indemnitees in connection with
the action or inaction that resulted in such losses, claims, damages, expenses or liabilities, as
well as any other relevant equitable considerations. In connection with the registration of the
Company’s securities, the relative benefits received by the Company and the Indemnitees shall be
deemed to be in the same respective proportions that the net proceeds from the offering (before
deducting expenses) received by the Company and the Indemnitees, in each case as set forth in the
table on the cover page of the applicable prospectus, bear to the aggregate public offering price
of the securities so offered. The relative fault of the Company and the Indemnitees shall be
determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to information
supplied by the Company or the Indemnitees and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

     The Company and the Indemnitees agree that it would not be just and equitable if
contribution pursuant to this Section 1(c) were determined by pro rata or per capita allocation or
by any other method of allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. In connection with the registration of the
Company’s securities, in no event shall an Indemnitee be required to contribute any amount under
this Section 1(c) in excess of the lesser of (i) that proportion of the total of such losses,
claims, damages or liabilities that are indemnified against, equal to the proportion of the total
securities sold under such registration statement that are being sold by such Indemnitee or (ii)
the proceeds received by such Indemnitee from its sale of securities under such registration
statement. No person found 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 found
guilty of such fraudulent misrepresentation.

     Survival Regardless of Investigation. The indemnification and contribution provided
for in this Section 1 will remain in full force and effect regardless of any investigation made by
or on behalf of the Indemnitees or any officer, director, employee, agent or controlling person of
the Indemnitees.

     Change in Control. The Company agrees that if there is a Change in Control of the
Company (other than a Change in Control that has been approved by a majority of the Company’s Board
of Directors who were directors immediately prior to such Change in Control) then, with respect to
all matters thereafter arising concerning the rights of the Indemnitees to payments of Expenses
under this Agreement or any other agreement or under the

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Company’s Certificate of Incorporation or Bylaws as now or hereafter in effect, Independent
Legal Counsel (as defined in Section 10(d) hereof) shall be selected by the Indemnitees and
approved by the Company (which approval shall not be unreasonably withheld). Such counsel, among
other things, shall render its written opinion to the Company and the Indemnitees as to whether and
to what extent the Indemnitees would be permitted to be indemnified under applicable law. The
Company agrees to abide by such opinion and to pay the reasonable fees of the Independent Legal
Counsel referred to above and to fully indemnify such counsel against any and all expenses
(including, without limitation, reasonable attorneys’ fees), claims, liabilities and damages
arising out of or relating to this Agreement or its engagement pursuant hereto.

     Mandatory Payment of Expenses. Notwithstanding any other provision of this Agreement,
to the extent that the Indemnitees have been successful on the merits or otherwise, including,
without limitation, the dismissal of an action without prejudice, in the defense of any action,
suit, proceeding, inquiry or investigation referred to in Section 1(a) hereof or in the defense of
any claim, issue or matter therein, each Indemnitee shall be indemnified against all Expenses
incurred by such Indemnitee in connection herewith.

     Expenses; Indemnification Procedure.

     Advancement of Expenses. The Company shall advance all Expenses incurred by the
Indemnitees. The advances to be made hereunder shall be paid by the Company to the Indemnitees as
soon as practicable but in any event no later than five (5) days after written demand by such
Indemnitees therefor to the Company.

     Notice/Cooperation by the Indemnitees. Each Indemnitee shall give the Company notice
in writing as soon as practicable of any Claim made against such Indemnitee for which
indemnification will or could be sought under this Agreement. Notice to the Company shall be
directed to the Company’s Chief Executive Officer at the Company’s address (or such other address
as the Company shall designate in writing to the Indemnitees).

     No Presumptions; Burden of Proof. For purposes of this Agreement, the termination of
any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or
upon a plea of nolo contendere, or its equivalent, shall not create a presumption that the
Indemnitees did not meet any particular standard of conduct or have any particular belief or that a
court has determined that indemnification is not permitted by applicable law. In addition, neither
the failure of the Reviewing Party to have made a determination as to whether an Indemnitee has met
any particular standard of conduct or had any particular belief, nor an actual determination by the
Reviewing Party that an Indemnitee has not met such standard of conduct or did not have such
belief, prior to the commencement of legal proceedings by such Indemnitee to secure a judicial
determination that such Indemnitee should be indemnified under applicable law, shall be a defense
to an Indemnitee’s claim or create a presumption that such Indemnitee has not met any particular
standard of conduct or did not have any particular belief. In connection with any determination by
the Reviewing Party or otherwise as to whether an Indemnitee is entitled to be indemnified
hereunder, the burden of proof shall be on the Company to establish that an Indemnitee is not so
entitled.

     Notice to Insurers. If, at the time of the receipt by the Company of a notice of
a Claim pursuant to Section 2(b) hereof, the Company has liability insurance in effect that may
cover such Claim, the Company shall give prompt notice of the commencement of such Claim to the
insurers in accordance with the procedures set forth in each of the policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the
Indemnitees, all amounts payable as a result of such action, suit, proceeding, inquiry or
investigation in accordance with the terms of such policies.

     Selection of Counsel. In the event the Company shall be obligated hereunder to pay
the Expenses of any Claim, the Company shall be entitled to assume the defense of such Claim, with
counsel approved by the applicable Indemnitee, upon the delivery to such Indemnitee of written
notice of its election to do so. After delivery of such notice, approval of such counsel by the
Indemnitee and the retention of such counsel by the Company, the Company will not be liable to such
Indemnitee under this Agreement for any fees of counsel subsequently incurred by such Indemnitee
with respect to the same Claim; provided that, (i) the Indemnitee shall have the right to
employ such Indemnitee’s counsel in any such Claim at the Indemnitee’s expense and (ii) if

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(A) the employment of counsel by the Indemnitee has been previously authorized by the Company,
(B) such Indemnitee shall have reasonably concluded that there is a conflict of interest between
the Company and such Indemnitee in the conduct of any such defense, or (C) the Company shall not
continue to retain such counsel to defend such Claim, then the fees and expenses of the
Indemnitee’s counsel shall be at the expense of the Company. The Company shall have the right to
conduct such defense as it sees fit in its sole discretion, including, without limitation, the
right to settle any claim against any Indemnitee without the consent of such Indemnitee.

Additional Indemnification Rights; Nonexclusivity.

     Scope. The Company hereby agrees to indemnify the Indemnitees to the fullest extent
permitted by law, even if such indemnification is not specifically authorized by the other
provisions of this Agreement, the Company’s Certificate of Incorporation, the Company’s Bylaws or
by statute. In the event of any change after the date of this Agreement in any applicable law,
statute or rule that expands the right of a Delaware corporation to indemnify a member of its Board
of Directors or an officer, employee, controlling person, agent or fiduciary, it is the intent of
the parties hereto that the Indemnitees shall enjoy by this Agreement the greater benefits afforded
by such change. In the event of any change after the date of this Agreement in any applicable law,
statute or rule that narrows the right of a Delaware corporation to indemnify a member of its Board
of Directors or an officer, employee, agent or fiduciary, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall have no effect on this
Agreement or the parties’ rights and obligations hereunder except as set forth in Section 8(a)
hereof.

     Nonexclusivity. The indemnification provided by this Agreement shall be in addition
to any rights to which the Indemnitees may be entitled under the Company’s Certificate of
Incorporation, its Bylaws, any agreement, any vote of stockholders or disinterested directors, the
Delaware General Corporation Law, or otherwise. The indemnification provided under this Agreement
shall continue as to each Indemnitee for any action such Indemnitee took or did not take while
serving in an indemnified capacity even though the Indemnitee may have ceased to serve in such
capacity.

     No Duplication of Payments. The Company shall not be liable under this Agreement to
make any payment in connection with any Claim made against any Indemnitee to the extent such
Indemnitee has otherwise actually received payment (under any insurance policy, Certificate of
Incorporation, Bylaw or otherwise) of the amounts otherwise indemnifiable hereunder.

     Partial Indemnification. If any Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for any portion of Expenses incurred in connection with
any Claim, but not, however, for all of the total amount thereof, the Company shall nevertheless
indemnify such Indemnitee for the portion of such Expenses to which such Indemnitee is entitled.

     Mutual Acknowledgement. The Company and each Indemnitee acknowledge that in certain
instances, Federal law or applicable public policy may prohibit the Company from indemnifying its
directors, officers, employees, controlling persons, agents or fiduciaries under this Agreement or
otherwise. Each Indemnitee understands and acknowledges that the Company has undertaken or may be
required in the future to undertake with the Securities and Exchange

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Commission to submit the question of indemnification to a court in certain circumstances for a
determination of the Company’s rights under public policy to indemnify the Indemnitees.

     Liability Insurance. To the extent the Company maintains liability insurance
applicable to directors, officers, employees, control persons, agents or fiduciaries, each of the
Indemnitees shall be covered by such policies in such a manner as to provide the Indemnitees the
same rights and benefits as are accorded to the most favorably insured of the Company’s directors,
if such Indemnitee is a director, or of the Company’s officers, if such Indemnitee is not a
director of the Company but is an officer; or of the Company’s key employees, controlling persons,
agents or fiduciaries, if such Indemnitee is not an officer or director but is a key employee,
agent, control person, or fiduciary.

     Exceptions. Any other provision herein to the contrary notwithstanding, the Company
shall not be obligated pursuant to the terms of this Agreement:

     Claims Initiated by an Indemnitee. To indemnify or advance expenses to any Indemnitee
with respect to Claims initiated or brought voluntarily by such Indemnitee and not by way of
defense, except (i) with respect to actions or proceedings to establish or enforce a right to
indemnify under this Agreement or any other agreement or insurance policy or under the Company’s
Certificate of Incorporation or Bylaws now or hereafter in effect relating to Claims for
Indemnifiable Events, (ii) in specific cases if the Board of Directors has approved the initiation
or bringing of such Claim, or (iii) as otherwise required under Section 145 of the Delaware General
Corporation Law, regardless of whether such Indemnitee ultimately is determined to be entitled to
such indemnification, advance expense payment or insurance recovery, as the case may be; or

     Claims Under Section 16(b). To indemnify any Indemnitee for expenses and the payment
of profits arising from the purchase and sale by such Indemnitee of securities in violation of
Section 16(b) of the Exchange Act or any similar successor statute; or

     Claims Excluded Under Section 145 of the Delaware General Corporation Law. To
indemnify any Indemnitee if indemnification is expressly prohibited by law, subject to the right of
the Indemnitee to challenge such determination pursuant to Section 1(b).

     Claims Resulting from Willful Misconduct or Fraud. To indemnify or advance Expenses
to any Indemnitee with respect to Claims resulting from such Indemnitee’s willful misconduct or
fraud on the part of the Indemnitee.

     Period of Limitations. No legal action shall be brought and no cause of action shall
be asserted by or in the right of the Company against any Indemnitee or any Indemnitee’s estate,
spouse, heirs, executors or personal or legal representatives after the expiration of five (5)
years from the date of accrual of such cause of action, and any claim or cause of action of the
Company shall be extinguished and deemed released unless asserted by the timely filing of a legal
action within such five (5)-year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such shorter period
shall govern.

Construction of Certain Phrases.

     For purposes of this Agreement, references to the “Company” shall include, in addition to the
resulting corporation, any constituent corporation (including, without limitation, any constituent
of a constituent) absorbed in a consolidation or merger that, if its separate existence

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had continued, would have had power and authority to indemnify its directors, officers,
employees, agents or fiduciaries, so that if an Indemnitee is or was a director, officer, employee,
agent, control person, or fiduciary of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee, control person, agent or
fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, each Indemnitee shall stand in the same position under the provisions of this Agreement
with respect to the resulting or surviving corporation as each Indemnitee would have with respect
to such constituent corporation if its separate existence had continued.

     For purposes of this Agreement, references to “other enterprises” shall include, without
limitation, employee benefit plans; references to “fines” shall include, without limitation, any
excise taxes assessed on any Indemnitee with respect to an employee benefit plan; and references to
“serving at the request of the Company” shall include any service as a director, officer, employee,
agent or fiduciary of the Company that imposes duties on, or involves services by, such director,
officer, employee, agent or fiduciary with respect to an employee benefit plan, its participants or
its beneficiaries; and if any Indemnitee acted in good faith and in a manner such Indemnitee
reasonably believed to be in the interest of the participants and beneficiaries of an employee
benefit plan, such Indemnitee shall be deemed to have acted in a manner “not opposed to the best
interests of the Company” as referred to in this Agreement.

     For purposes of this Agreement a “Change in Control” shall be deemed to have occurred if (i)
any “person” (as such term is used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), other
than a trustee or other fiduciary holding securities under an employee benefit plan of the Company
or a corporation owned directly or indirectly by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the Company, (A) who is or becomes the
beneficial owner, directly or indirectly, of securities of the Company representing ten percent
(10%) or more of the combined voting power of the Company’s then outstanding Voting Securities (as
defined in Section 10(f) hereof), increases his beneficial ownership of such securities by five
percent (5%) or more over the percentage so owned by such person, or (B) becomes the “beneficial
owner” (as defined in Rule 13d-3 under said Exchange Act), directly or indirectly, of securities of
the Company representing more than twenty percent (20%) of the total voting power represented by
the Company’s then outstanding Voting Securities, (ii) during any period of two (2) consecutive
years, individuals who at the beginning of such period constitute the Board of Directors of the
Company and any new director whose election by the Board of Directors or nomination for election by
the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to constitute a majority
thereof, or (iii) the stockholders of the Company approve a merger or consolidation of the Company
with any other corporation other than a merger or consolidation that would result in the Voting
Securities of the Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the surviving entity) at
least eighty percent (80%) of the total voting power represented by the Voting Securities of the
Company or such surviving entity outstanding immediately after such merger or consolidation, or the
stockholders of the Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of (in one transaction or a series of transactions) all
or substantially all of the Company’s assets.

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     For purposes of this Agreement, “Independent Legal Counsel” shall mean an attorney or firm of
attorneys, selected in accordance with the provisions of Section 2(e) hereof, who shall not have
otherwise performed services for the Company or any Indemnitee within the last three (3) years
(other than with respect to matters concerning the right of any Indemnitee under this Agreement, or
of other indemnitees under similar indemnity agreements).

     For purposes of this Agreement, a “Reviewing Party” shall mean any appropriate person or body
consisting of a member or members of the Company’s Board of Directors or any other person or body
appointed by the Board of Directors who is not a party to the particular Claim for which the
Indemnitees are seeking indemnification, or Independent Legal Counsel.

     For purposes of this Agreement, “Voting Securities” shall mean any securities of the Company
that vote generally in the election of directors.

Miscellaneous Provisions.

     Amendment and Termination. Any term hereof may be amended (either generally or in a
particular instance and either retroactively or prospectively) only with the written consent of (a)
the Company; and (b) each Indemnitee, if any, adversely affected by such amendment. Any amendment
so effected shall be binding upon the Company and all Indemnitees and all of their respective
successors and assigns whether or not such person or entity entered into or approved such amendment
or waiver. The observance of any term hereof may be waived by a party with respect to its own
interests (either generally or in a particular instance and either retroactively or prospectively)
only with the written consent of the party so waiving the observance of such term. In no event
shall such waiver of any rights hereunder constitute the waiver of such rights in any future
instance unless the waiver so specifies in writing. Notwithstanding anything to the contrary in
this Agreement, the Company may add additional Indemnitees at any time to this Agreement without
the consent of any other Indemnitee.

     Attorneys’ Fees. In the event that any action is instituted by an Indemnitee under
this Agreement or under any liability insurance policies maintained by the Company to enforce or
interpret any of the terms hereof or thereof, any Indemnitee shall be entitled to be paid all
Expenses incurred by such Indemnitee with respect to such action, regardless of whether such
Indemnitee is ultimately successful in such action, and shall be entitled to the advancement of
Expenses with respect to such action, unless, as a part of such action, a court of competent
jurisdiction over such action determines that each of the material assertions made by such
Indemnitee as a basis for such action was not made in good faith or was frivolous. In the event of
an action instituted by or in the name of the Company under this Agreement to enforce or interpret
any of the terms of this Agreement, the Indemnitee shall be entitled to be paid all Expenses
incurred by such Indemnitee in defense of such action (including, without limitation, costs and
expenses incurred with respect to such Indemnitee’s counterclaims and cross-claims made in such
action), and shall be entitled to the advancement of Expenses with respect to such action, unless,
as a part of such action, a court having jurisdiction over such action determines that each of such
Indemnitee’s material defenses to such action was made in bad faith or was frivolous.

     Binding Effect. This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto and their respective successors, assigns, including, without
limitation, any direct or indirect successor by purchase, merger, consolidation or otherwise to all

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or substantially all of the business and/or assets of the Company, spouses, heirs, and
personal and legal representatives.

     Choice of Law. This Agreement shall be governed by and its provisions construed and
enforced in accordance with the laws of the State of Delaware, as applied to contracts between
Delaware residents, entered into and to be performed entirely within the State of Delaware, without
regard to the conflict of laws principles thereof.

     Consent to Jurisdiction. The Company and each Indemnitee each hereby irrevocably
consents to the jurisdiction of the courts of the State of Delaware for all purposes in connection
with any action or proceeding that arises out of or relates to this Agreement and agree that any
action instituted under this Agreement shall be commenced, prosecuted and continued only in the
Court of Chancery of the State of Delaware in and for New Castle County, which shall be the
exclusive and only proper forum for adjudicating such a claim.

     Corporate Authority. The Board of Directors of the Company and its stockholders have
approved the terms of this Agreement.

     Counterparts. This Agreement may be executed in one (1) or more counterparts, each of
which shall constitute an original.

     Integration and Entire Agreement. Subject to Section 3(b), this Agreement sets forth
the entire understanding between the parties hereto and supersedes and merges all previous written
and oral negotiations, commitments, understandings and agreements relating to the subject matter
hereof between the parties hereto.

     No Construction as Employment Agreement. Nothing contained in this Agreement shall be
construed as giving any Indemnitee any right to be retained in the employ of the Company or any of
its subsidiaries.

     Notice. All notices and other communications required or permitted hereunder shall be
in writing, shall be effective when given, and shall in any event be deemed to be given (i) two (2)
days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by
first class mail, postage prepaid, (ii) upon delivery, if delivered by hand, (iii) one (1) business
day after the business day of deposit with Federal Express or similar overnight courier, freight
prepaid, or (iv) one (1) day after the business day of delivery by facsimile transmission, if
deliverable by facsimile transmission, with copy by first class mail, postage prepaid, and shall be
addressed if to the Indemnitees, at each Indemnitee’s address as set forth beneath the Indemnitees’
signatures to this Agreement and if to the Company at the address of its principal corporate
offices (Attention: Secretary) or at such other address as such party may designate by ten (10)
days’ advance written notice to the other party hereto.

     Severability. The provisions of this Agreement shall be severable in the event that
any of the provisions hereof (including, without limitation, any provision within a single section,
paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest
extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of this Agreement containing any provision
held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or
unenforceable) shall be construed so as to give effect to the intent manifested by the provision
held invalid, illegal or unenforceable.

9

 

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

     Successors and Assigns. The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a
substantial part, of the business and/or assets of the Company, by written agreement in form and
substance satisfactory to each Indemnitee, expressly to assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to perform if no such
succession had taken place. This Agreement shall continue in effect with respect to Claims
relating to Indemnifiable Events regardless of whether any Indemnitee continues to serve as a
director, officer, employee, agent, controlling person, or fiduciary of the Company or of any other
enterprise, including, without limitation, subsidiaries of the Company, at the Company’s request.

[Signature Pages Follow]

10

 

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

Sirna Therapeutics, Inc.:

	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Howard W. Robin	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Howard W. Robin	 	 
	 

	 	Title:
	 	President & CEO	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:
	 	   185 Berry Street, Suite 6504	 	 
	 

	 	 	 	   San Francisco, CA 94107	 	 
	 
	 

	 	 	 	INDEMNITEE:	 	 
	 
	 

	 	 	 	/s/ Lutz Lingnau	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Lutz Lingnau	 	 

11exv10w1

 

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

     This Employment Agreement (this “Agreement”) is entered into effective as of                                         ,
2006, by and between United Surgical Partners International, Inc., a Delaware corporation (“USPI”),
and Niels Vernegaard (“Employee”), with reference to the following facts:

R E C I T A L S

     A. USPI desires to employ Employee in the capacities and on the terms and conditions
hereinafter set forth and Employee is willing to serve in such capacities and on such terms and
conditions.

     B. This Agreement shall replace any and all existing employment agreements and arrangements
between USPI and Employee as of the date hereof.

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained
herein, USPI and Employee mutually agree as follows:

A G R E E M E N T

     1. Employment. USPI hereby employs Employee as Executive Vice President and
Chief Operating Officer of USPI.

     2. Duties. Employee shall devote substantially all of his working time, energies and
skills to USPI’s business. Employee shall report to the Chief Executive Officer of USPI (the
“CEO”) and shall have such duties, responsibilities and authority as may be assigned to Employee by
the CEO. Employee agrees to serve USPI diligently and to the best of his ability.

     3. Compensation.

          (a) Base Salary. USPI shall pay Employee a base salary (“Base Salary”) at a rate of
$400,000 per year. In addition, the board of directors of USPI (the “Board”), or a committee
thereof, shall consider granting increases in such salary based on Employee’s performance and the
growth and/or profitability of USPI, but it shall have no obligation to grant any such increases in
compensation. Base Salary shall be payable in equal semi-monthly installments on the
15th day and the last working date of the month, or at such other times and in such
installments as is customary for all employees of USPI. All payments shall be subject to the
deduction of payroll taxes and similar assessments as required by law.

          (b) Performance Bonuses. In addition to the Base Salary, Employee shall be eligible
to participate in USPI’s bonus program, on such terms as the Board, or a committee thereof, shall,
from time to time, determine.

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     4. Expenses and Benefits. USPI agrees to provide Employee with the following
benefits:

          (a) Expense Reimbursements. Employee is authorized to incur reasonable expenses in
connection with the business of USPI, including expenses for entertainment, travel and similar
matters. USPI will reimburse Employee for such expenses upon presentation by Employee of such
documentation as USPI shall from time to time require.

          (b) Office Services. USPI will provide Employee with an administrative assistant and
reasonable office space and services.

          (c) Insurance. Major medical health insurance and disability insurance as currently
in place (as the same may be modified from time to time by USPI for its senior executives).

          (d) Employee Benefit Plans. Participation in any other employee benefit plans now
existing or hereafter adopted by USPI for its employees.

          (e) Other. Such items and benefits as USPI shall, from time to time, consider
necessary or appropriate to assist Employee in the performance of his/her duties.

          (f) Vacations. Employee shall be entitled (in addition to the usual public holidays)
to paid vacation in accordance with USPI policy, as it may be in effect from time to time.

     5. Term; Severance. The term of this Agreement shall be for a period of two years
from the date hereof and renewing automatically for successive one year periods thereafter;
provided, however, that either party may terminate this Agreement at any time upon at least 90 days
prior written notice. In the event of such termination by USPI, Employee shall be entitled to
severance pay equal to his annual Base Salary at the time of termination, plus USPI’s good faith
estimate of what Employee’s bonus would have been for the year in which the termination occurred,
as determined by USPI in its sole and absolute discretion based on all information available at
such time. Such severance pay shall be payable in monthly installments over a period of 12 months
following termination, and USPI shall continue the benefits set forth in Sections 4(c) and (d) for
the period during which such severance payments are to be made. In addition, this Agreement shall
terminate as provided for in Section 7 or upon the death of Employee, and no severance pay shall be
due in the event of such a termination.

     6. Disability.

          (a) In the event that Employee becomes Permanently Disabled (as hereinafter defined) during
the term of this Agreement, Employee shall continue in the employ of USPI but his/her compensation
hereunder shall be reduced to three-fourths of the Base Salary then in effect as set forth in
Section 3(a), commencing upon the determination of Employee’s Permanent Disability and continuing
thereafter until the first to occur of (i) 12 months or (ii) the death of Employee; and during such
period of time, Employee shall not be entitled to payment of

2

 

expenses or benefits specified in Section 4 (except for reimbursement of expenses incurred by
Employee prior to becoming Permanently Disabled), except that USPI shall continue to provide
Employee with the insurance benefits specified in Section 4(c). The obligation of USPI for
continuation of three-fourths of Employee’s Base Salary shall be net of payments to Employee from
the disability insurance referred to in Section 4(c).

          For purposes of this Agreement, the terms “Permanent Disability” or “Permanently Disabled”
shall mean three months of substantially continuous disability. Disability shall be deemed
“substantially continuous“ if, as a practical matter, Employee, by reason of his/her mental or
physical health, is unable to sustain reasonably long periods of substantial performance of his/her
duties. Frequent long illnesses, though different from the preceding illness and though separated
by relatively short periods of performance, shall be deemed to be “substantially continuous.”
Disability shall be determined in good faith by the Board, whose decision shall be final and
binding upon Employee. Employee hereby consents to medical examinations by such physicians and
medical consultants as USPI shall, from time to time, require.

     7. Termination by USPI for Cause. USPI shall have the right to terminate Employee’s
employment under this Agreement for “Cause” by an affirmative vote to so terminate by not less than
75% of the members of the Board, in which event no compensation shall be paid or other benefits
furnished to Employee after termination for Cause. Termination for Cause shall be effective
immediately upon notice sent or given to Employee. For purposes of this Agreement, the term
“Cause” shall mean and be strictly limited to: (a) indictment for a crime constituting a felony
under state or federal law; (b) conviction of a crime constituting a misdemeanor and involving an
act of moral turpitude, including without limitation fraud, embezzlement and use of illegal drugs;
(c) commission of any material act of dishonesty against USPI; or (d) willful and material breach
of this Agreement by Employee.

     8. Non-Competition. Employee recognizes and understands that in performing the
responsibilities of his employment, he will occupy a position of fiduciary trust and confidence,
pursuant to which he will develop and acquire experience and knowledge with respect to USPI’s
business. It is the expressed intent and agreement of Employee and USPI that such knowledge and
experience shall be used exclusively in the furtherance of the interests of USPI and not in any
manner that would be detrimental to USPI’s interests. Employee further understands and agrees that
USPI conducts its business within a specialized market segment throughout the United States and in
portions of Europe, and that it would be detrimental to the interests of USPI if Employee used the
knowledge and experience which he currently possesses or which he acquires pursuant to this
employment hereunder for the purpose of directly or indirectly competing with USPI, or for the
purpose of aiding other persons or entities in so competing with USPI. Employee therefore agrees
that so long as he is employed by USPI and for an additional period equal to one year following the
later to occur of the date of termination or the date of the last severance payment made pursuant
to this Agreement, unless Employee first secures the written consent of USPI, Employee will not
directly or indirectly invest, engage or participate in or become employed by any entity in direct
or indirect competition with USPI’s business, which shall include the ownership and/or operation of
outpatient surgical centers and surgical specialty hospitals in the United States and the ownership
and/or operation of hospitals

3

 

in the countries in Europe in which USPI owns or operates hospitals as of the date of termination. These non-
competition provisions shall not be construed to prohibit Employee from being employed in the
health care industry during the applicable period, but rather to permit him to be so employed so
long as such employment does not involve Employee’s direct or indirect participation in a business
which is the same or similar to USPI’s business (as defined above). In the event that the
provisions of this Section 8 should ever be deemed to exceed the time or geographic limitations
permitted by applicable laws, then such provisions shall be reformed to the maximum time or
geographic limitations permitted by applicable law.

     9. Stock Options and Restricted Stock. In the event that (a) USPI elects to terminate
this Agreement pursuant to Section 5, (b) there is a “Change of Control Event” (as defined below)
or (c) USPI terminates Employee without the notice required under Section 5 or without Cause under
Section 7, then in each such event, all USPI stock options held by Employee and all restricted
stock awards made to him by USPI (including issued subject to forfeiture) shall thereupon
automatically be amended so as to (i) cause to vest, immediately prior to the date of such Change
in Control Event or such termination of employment, all then unvested stock options and restricted
stock awards, and (ii) provide Employee 90 days to exercise such options (or such greater period as
may be provided by the terms of such options). For purposes of the foregoing, the term “Change of
Control Event” shall mean (A) a consolidation or merger of USPI with or into any other corporation
(other than a merger which will result in the voting capital stock of USPI outstanding immediately
before the effective date of such consolidation or merger being converted into more than 50% of the
voting capital stock of the surviving entity outstanding immediately after such consolidation or
merger), (B) a sale of all or substantially all of the properties and assets of the Company as an
entirety in a single transaction or in a series or related transactions to any other “person” or
(C) the acquisition of “beneficial ownership” by any “person” or “group” of voting stock of the
Company representing more than 50% of the voting power of all outstanding shares of such voting
stock, whether by way of merger of consolidation or otherwise. As used herein, (x) the terms
“person” and “group” shall have the meanings set forth in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), whether or not applicable, (y) the term
“beneficial owner” shall have the meaning set forth in Rules 13d-3 and 13d-5 under the Exchange
Act, whether or not applicable, except that a person shall be deemed to have “beneficial ownership”
of all shares that any such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time or upon the occurrence of certain events, and (z) any
“person” or “group” will be deemed to beneficially own any voting stock so long as such person or
group beneficially owns, directly or indirectly, in the aggregate a majority of the voting stock of
a registered holder of such voting stock.

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     10. General Provisions.

          (a) Notices. All notices required or permitted by this Agreement shall be in writing
and may be delivered in person or sent by regular, registered or certified mail or United States
Postal Service Express Mail, with postage prepaid, or by other courier service, or by facsimile
transmission, and shall be deemed sufficiently given if served in the manner specified in this
Section 10(a). The addresses and facsimile numbers set forth below shall be the parties addressed
and facsimile numbers for purposes for purposes of delivery or mailing of notices:

	 	 	 	 	 
	 

	 	If to USPI:
	 	c/o United Surgical Partners International, Inc.
	 

	 	 	 	15305 Dallas Parkway, Suite 1600
	 

	 	 	 	Addison, Texas 75001
	 

	 	 	 	Attention:
	 

	 	 	 	Chief Executive Officer
	 

	 	 	 	Fax No.: (972) 267-0084
	 
	 	 	 	 
	 

	 	If to Employee:
	 	Niels P. Vernegaard
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

The parties may change addresses and facsimile numbers noted above through written notice in
compliance with this Section 10(a). Any notice sent by registered or certified mail, return
receipt requested, shall be deemed given when actually received by the addressee, as shown on the
receipt card which must be signed by a representative of the addressee. If sent by regular mail,
the notice shall be deemed given after the notice is addressed, mailed with postage prepaid and
when actually received by the addressee. Notices delivered by United States Express Mail or other
courier service shall be deemed given when actually received by the addressee as shown by the
signature of an authorized representative of the addressee on the log or other documentation
maintained by the United States Postal Service or courier to show proof of delivery. If any notice
is transmitted by facsimile transmission or similar means, the notice shall be deemed served or
delivered upon telephone confirmation of receipt of the transmission.

          (b) Choice of Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas, excluding principles of conflict of laws.

          (c) Integration; Modification and Waiver. This Agreement constitutes the entire
understanding of the parties hereto relating to the subject matter hereof, supersedes any and all
other agreements, whether oral or in writing, between the parties hereto and their affiliates with
respect to the employment of Employee from and after the date hereof, and contains all covenants
and agreements between the parties hereto relating to such employment in any manner whatsoever;
provided, however, that except as expressly provided herein, this Agreement shall not affect any
stock option agreements, indemnity agreements or agreements relating to Employee’s purchase or
ownership of USPI securities to which Employee is now or hereafter a party, that arose prior to the
date of this Agreement. This Agreement shall

5

 

not be amended, modified or revised in any respect, except by a writing signed by USPI and
Employee. No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision, whether or not similar, and no waiver shall constitute
a continuing waiver. No waiver shall be binding unless executed in writing by the party making the
waiver.

          (d) Severability. If any provision of this Agreement shall be determined by a court
or governmental agency of competent jurisdiction to be invalid, illegal or unenforceable, such
invalidity, illegality or unenforceability shall not affect the remainder of this Agreement, which
shall remain in full force and effect and be enforced in accordance with its remaining enforceable
terms.

          (e) Assignment. Because of the personal nature of the services to be rendered
hereunder, the obligations of Employee under this Agreement may not be delegated or assigned in
whole or in part without the prior written consent of USPI (which consent may be withheld in its
sole discretion). However, subject to the foregoing limitation, this Agreement shall be binding
upon, and shall insure to the benefit of, the parties hereto and their respective heirs, devisees,
executors, administrators, trustees, legal representatives, successors, transferees and assigns.

          (f) Attorneys’ Fees. In any action or proceeding at law or in equity, including but
not limited to arbitration, brought to enforce or construe any provisions or rights under this
Agreement, the unsuccessful party or parties to such litigation or arbitration, as determined by
the appropriate court or arbitrator pursuant to a final judgment or decree, shall pay the
successful party or parties all costs, expenses and reasonable attorneys’ fees incurred by such
successful party or parties (including but not limited to such costs, expenses and fees in
connection with any appeals) and, if such successful party or parties shall recover judgment in any
such action or proceeding, such costs, expenses and attorneys’ fees shall be included as part of
such judgment.

          (g) Survival of Certain Provisions. The provisions of Sections 4(a) (as to expenses
incurred prior to termination), 5, 8 and 9 shall survive the expiration or other termination of
this Agreement.

          (h) Headings and Captions. Headings and captions are included in this Agreement for
purposes of convenience only and are not a part of this Agreement.

          (i) Miscellaneous. Any term used in the plural shall refer to all members of the
relevant class and any term used in the singular shall refer to any one or more of the members of
the relevant class. References in this Agreement to articles, sections, paragraphs and exhibits
are to articles, sections, paragraphs and exhibits to this Agreement. The terms “herein,”
“hereof,” “hereto,” “hereunder” and other terms similar to such terms refer to this Agreement as a
whole and not merely to the specific article, section, paragraph or clause where such terms may
appear.

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          (j) Counterparts and Facsimile Signatures. Separate copies of this Agreement may be
signed by the parties hereto, with the same effect as though all of the parties
had signed one copy of this Agreement. Signatures transmitted by facsimile shall be accepted
as original signatures.

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     IN WITNESS WHEREOF, the undersigned have duly executed this Employment Agreement as of the
date first written above.

	 	 	 	 	 
	USPI:	 	UNITED SURGICAL PARTNERS INTERNATIONAL, INC.
	 
	 	 	 	 
	 

	 	By	 	 /s/ William H. Wilcox
	 

	 	 	 	 
	 

	 	 	 	William H. Wilcox
	 

	 	 	 	President and Chief Executive Officer
	 
	 	 	 	 
	EMPLOYEE:
	 	 /s/ Niels P. Vernegaard
	 	 	 
	 	 	Niels P. Vernegaard

8

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