Document:

SECURITIES
        PURCHASE AGREEMENT

      Sirna
        Therapeutics, Inc.

      185
        Berry
        Street, Suite 6504

      San
        Francisco, CA 94107

      

      Ladies
        & Gentlemen: 

      

      The
        undersigned, [        
        ] (the “Investor”),
        hereby confirms its agreement with you as follows:

      

      1. This
        Securities Purchase Agreement (the “Agreement”) is made as of July __, 2005
        between Sirna Therapeutics, Inc., a Delaware corporation (the “Company”), and
        the Investor.

      

      2. The
        Company has authorized the sale and issuance of up to 18,750,000 shares
        (the “Shares”) of common stock of the Company, $.01 par value per share (the
“Common Stock”), and Warrants (the “Warrants”) to purchase up to 6,750,000
        shares
        of Common Stock at an exercise price of $1.92
        per
        share (the “Warrant Shares”) to certain investors in a private placement (the
“Offering”).

      

      3. The
        Company and the Investor agree that the Investor will purchase from the Company
        and the Company will issue and sell to the Investor [__________] Shares
        and a Warrant to purchase [__________]
        Warrant
        Shares, for a purchase price of $1.60
        per
        share, or an aggregate purchase price of $[____________],
        pursuant to the Terms and Conditions for Purchase of Shares and Warrants
        attached hereto as Annex I and incorporated herein by reference as
        if fully
        set forth herein (the “Terms and Conditions”). This Securities Purchase
        Agreement, together with the Terms and Conditions which are incorporated
        herein
        by reference as if fully set forth herein, may hereinafter be referred to
        as the
“Agreement.” Unless otherwise requested by the Investor, the Warrant and
        certificates representing the Shares purchased by the Investor will be
        registered in the Investor’s name and address as set forth below. The
        Warrant shall have the rights, preferences, privileges and restrictions as
        set
        forth in the form of Warrant attached as Exhibit
        B.

      

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

      

      ______________________________________________________________________________________________.

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

      

      5. Please
        confirm that the foregoing correctly sets forth the agreement between us
        by
        signing in the space provided below for that purpose. By executing this
        Agreement, the Investor acknowledges that the Company may use the information
        in
        paragraph 4 above and the name and address information below in preparation
        of
        the Registration Statement (as defined in Annex 1). This Agreement may be
        executed in separate counterparts, each of which shall be deemed to be an
        original and all of which taken together shall constitute one and the same
        instrument.

       

      
 

      
        	
                AGREED
                  AND ACCEPTED: 

                Sirna
                  Therapeutics, Inc. 

                 

                 

                __________________________________

                
                  By:
                    Howard W. Robin  

                  Title:
                    President and Chief Executive Officer 

                

              	
                Investor:
                  ___________________________________

                 

                By: _______________________________________

                 

                Print Name:
                  _________________________________

                 

                
                  Title:
                    ______________________________________

                  

                  Address:
                    ___________________________________

                  

                  Tax
                    ID No.: __________________________________

                  

                  Contact
                    name: ________________________________

                  

                  Telephone:
                    __________________________________

                  

                  Name
                    in which shares should be registered (if different):

                  ___________________________________________

                

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      ANNEX
        I

      

      TERMS
        AND CONDITIONS FOR PURCHASE OF SHARES AND WARRANTS

      

      

      1. Authorization
        and Sale of the Shares and Warrants.
        Subject
        to these Terms and Conditions, the Company has authorized the sale of up
        to
18,750,000 Shares
        and Warrants to purchase up to 6,750,000 Warrant Shares. The Company reserves
        the right to increase or decrease this number.

      

      2. Agreement
        to Sell and Purchase the Shares and Warrants; Subscription Date.

      

      2.1 At
        the
        Closing (as defined in Section 3), the Company will sell to the Investor,
        and the Investor will purchase from the Company, upon the terms and conditions
        hereinafter set forth, the number of Shares and a Warrant to purchase the
        number
        of Warrant Shares, each as set forth in Section 3 of the Securities Purchase
        Agreement to which these Terms and Conditions are attached at the purchase
        price
        set forth thereon.

      

      2.2 The
        Company may enter into the same form of Securities Purchase Agreement, including
        these Terms and Conditions, with other investors (the “Other Investors”) and
        expects to complete sales of Shares and Warrants to them. (The Investor and
        the
        Other Investors are hereinafter sometimes collectively referred to as the
        “Investors,” and the Securities Purchase Agreement to which these Terms and
        Conditions are attached and the Securities Purchase Agreements (including
        attached Terms and Conditions) executed by the Other Investors are hereinafter
        sometimes collectively referred to as the “Agreements.”) The Company may accept
        executed Agreements from Investors for the purchase of Shares and Warrants
        commencing upon the date on which the Company provides the Investors with
        the
        proposed purchase price per Share and concluding upon the date (the
“Subscription Date”) on which the Company has (i) executed Agreements with
        Investors for the purchase of at least 8,900,000 Shares and Warrants to purchase
        at least 2,670,000 Warrant Shares, and (ii) notified Thomas Weisel
        Partners
        LLC, in its capacity as placement agent for this transaction (the “Placement
        Agent”), in writing that it is no longer accepting additional Agreements from
        Investors for the purchase of Shares and Warrants. The Company may not enter
        into any Agreements after the Subscription Date.

      

      2.3 The
        obligations of each Investor under any Agreement are several and not joint
        with
        the obligations of any Other Investor, and no Investor shall be responsible
        in
        any way for the performance of the obligations of any other Investor under
        any
        Agreement. Nothing contained herein, and no action taken by any Investor
        hereto,
        shall be deemed to constitute the Investors as a partnership, an association,
        a
        joint venture or any other kind of entity, or create a presumption that the
        Investors are in any way acting in concert or as a group with respect to
        such
        obligations or the transactions contemplated hereby, provided that such
        obligations or the transactions contemplated hereby may be modified, amended
        or
        waived in accordance with Section 9 below. Each Investor shall be entitled
        to
        independently protect and enforce its rights, including without limitation
        the
        rights arising out of this Agreement (provided, that such rights may be
        modified, amended or waived in accordance with Section 9 below), and it shall
        not be necessary for any Other Investor to be joined as an additional party
        in
        any proceeding for such purpose.

      

      3. Delivery
        of the Shares and Warrants at Closing.
        The
        completion of the purchase and sale of the Shares and Warrants (the “Closing”)
        shall occur on July 6, 2005 (the “Closing Date”), at the offices of the
        Company’s counsel; provided, however, that the Closing for the purposes of (i)
        any sale of Shares and Warrants to Investors who are officers or directors
        of
        the Company, or their affiliates (collectively, the “Affiliate Investors”) and
        (ii) any sale of Shares and Warrants to non-Affiliate Investors in excess
        of
        19.99% of the outstanding common stock on the trading day immediately preceding
        the date set forth above (the “Excess Amount”) shall be subject to such
        stockholder approval and shall be the date which is one business day following
        such stockholder approval. The Affiliate Investors shall place the full purchase
        price for the Shares and Warrants being purchased by them hereunder in escrow
        (the “Escrow”) pursuant to the terms of the Escrow Agreement (defined below) at
        the initial Closing. In addition, each non-Affiliate Investor shall place
        a
        portion of its purchase price for the Shares and Warrants being purchased
        by it
        hereunder into the Escrow, such pro rata portion being equal to the product
        of
        (A) the Excess Amount and (B) a fraction equal to (1) the number of Shares
        purchased by such non-Affiliate Investor divided by (2) the total number
        of
        Shares being purchased by all non-Affiliate Investors. At the Closing, the
        Company shall deliver to the Investor one or more stock certificates
        representing the number of Shares and a Warrant to purchase the number of
        Warrant Shares, each as set forth pursuant to Section 3 of the Securities
        Purchase Agreement, each such certificate to be registered in the name of
        the
        Investor or, if so indicated on the signature page of the Securities Purchase
        Agreement, in the name of a nominee designated by the Investor.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      The
        Company’s obligation to issue and deliver the Shares and Warrant to the Investor
        shall be subject to the following conditions, any one or more of which may
        be
        waived by the Company: (a) receipt by U.S.
        Bank
        National Association
        (the
“Escrow Agent”) under the Escrow Agreement dated as of July 1, 2005 by and
        between the Company and the Escrow Agent (the “Escrow Agreement”) of a certified
        or official bank check or wire transfer of funds in the full amount of the
        purchase price for the Shares and Warrant being purchased hereunder as set
        forth
        in Section 3 of the Securities Purchase Agreement; (b) completion
        of
        the purchases and sales under the Agreements with the Other Investors, subject
        to the provisos in the previous and following paragraphs with regard to the
        Affiliate Investors; (c) receipt by the Company of a completed Investor
        Questionnaire; (d) the accuracy of the representations and warranties made
        by
        the Investors and the fulfillment of those undertakings of the Investors
        to be
        fulfilled prior to the Closing; and (e) the filing of a Form 8-K with the
        Securities and Exchange Commission (the “SEC”) disclosing the material terms of
        the transactions contemplated hereby and any information provided by the
        Company
        or any person acting on its behalf that the Company believes constitutes
        material and non-public information.

      

      The
        Investor’s obligation to purchase the Shares and Warrant shall be subject to the
        following conditions, any one or more of which may be waived by the Investor:
        (a) Investors shall have executed Agreements for the purchase of at least
        8,900,000 Shares
        and Warrants to purchase at least 2,670,000 Warrant Shares (the “Minimum
        Purchase Amount”); (b) each of the Affiliate Investors shall have executed and
        delivered to the Company voting agreements in the form attached as Exhibit
        C
        with
        respect to the voting of the shares of common stock of the Company; (c) receipt
        by the Escrow Agent of the Minimum Purchase Amount (including the Shares
        and
        Warrants to be purchased by the Affiliate Investors), provided that funds
        (i)
        provided for the purchase of the Excess Amount and (ii) provided by Affiliate
        Investors shall be released to the Company from Escrow by the Escrow Agent
        upon
        receipt of a certificate of the Secretary of the Company that the required
        stockholder approval has been obtained (it being understood that all other
        funds
        shall be released to the Company from Escrow at the Closing by the Escrow
        Agent
        upon its receipt of the Minimum Purchase Amount); (d) the representations
        and
        warranties of the Company set forth herein shall be true and correct as of
        the
        Closing Date in all material respects (except for representations and warranties
        that speak as of a specific date, which representations and warranties shall
        be
        true and correct as of such date); and (e) the Investor shall have received
        such
        documents as such Investor shall reasonably have requested, including, a
        standard opinion of the Company’s counsel as to the matters set forth in Section
        4.2 and as to exemption from the registration requirements of the Securities
        Act
        of 1933, as amended (the “Securities Act”), of the sale of the Shares and
        Warrants.

      

      4. Representations,
        Warranties and Covenants of the Company.
        The
        Company hereby represents and warrants to, and covenants with, the Investor,
        as
        follows:

      

      4.1 Organization.
        The
        Company and each of its Subsidiaries (as defined in Rule 405 under
        the
        Securities Act) is duly organized and validly existing in good standing under
        the laws of the jurisdiction of its organization. Each of the Company and
        its
        Subsidiaries has full power and authority to own, operate and occupy its
        properties and to conduct its business as presently conducted and as described
        in the documents filed by the Company under the Securities Exchange Act of
        1934,
        as amended, and the rules and regulations promulgated thereunder (the “Exchange
        Act”), since the end of its most recently completed fiscal year through the date
        hereof, including, without limitation, its most recent report on Form 10-K
        (the
“Exchange Act Documents”) and is registered or qualified to do business and in
        good standing in each jurisdiction in which the nature of the business conducted
        by it or the location of the properties owned or leased by it requires such
        qualification and where the failure to be so qualified would have a material
        adverse effect upon the financial condition, assets, liabilities, properties
        or
        operations of the Company and its Subsidiaries, considered as one enterprise
        (a
“Material Adverse Effect”), and no proceeding has been instituted in any such
        jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit
        or
        curtail, such power and authority or qualification. 

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      4.2 Due
        Authorization and Valid Issuance.
        The
        Company has all requisite power and authority to execute, deliver and perform
        its obligations under the Agreements and the Warrants, and the Agreements
        and
        the Warrants have been duly authorized and validly executed and delivered
        by the
        Company and constitute legal, valid and binding agreements of the Company
        enforceable against the Company in accordance with their terms, except as
        rights
        to indemnity and contribution may be limited by state or federal securities
        laws
        or the public policy underlying such laws, except as enforceability may be
        limited by applicable bankruptcy, insolvency, reorganization, moratorium
        or
        similar laws affecting creditors’ and contracting parties’ rights generally and
        except as enforceability may be subject to general principles of equity
        (regardless of whether such enforceability is considered in a proceeding
        in
        equity or at law). The Shares and the Warrant being purchased by the Investor
        hereunder and the Warrant Shares issuable pursuant to the Warrant will, upon
        issuance and payment therefor pursuant to the terms hereof and thereof, be
        duly
        authorized, validly issued, fully-paid and nonassessable. 

      

      4.3 Non-Contravention.
        The
        execution and delivery of the Agreements and the Warrants, the issuance and
        sale
        of the Shares and the Warrants under the Agreements and the Warrant Shares
        under
        the Warrant, the fulfillment of the terms of the Agreements and the Warrants
        and
        the consummation of the transactions contemplated thereby will not
        (A) conflict with or constitute a violation of, or default (with the
        passage of time or otherwise) under, (i) any bond, debenture, note
        or other
        evidence of indebtedness, lease, contract, indenture, mortgage, deed of trust,
        loan agreement, joint venture or other agreement or instrument to which the
        Company or any Subsidiary is a party or by which it or any of its Subsidiaries
        or their respective properties are bound, (ii) the charter or by-laws
        of
        the Company or any Subsidiary, or (iii) any law, administrative regulation,
        ordinance or order of any court or governmental agency, arbitration panel
        or
        authority applicable to the Company or any Subsidiary or their respective
        properties, except in the case of clauses (i) and (iii) for any such
        conflicts, violations or defaults which are not reasonably likely to have
        a
        Material Adverse Effect or (B) result in the creation or imposition
        of any
        lien, encumbrance, claim, security interest or restriction whatsoever upon
        any
        of the material properties or assets of the Company or any Subsidiary or
        an
        acceleration of indebtedness pursuant to any obligation, agreement or condition
        contained in any bond, debenture, note or any other evidence of indebtedness
        or
        any material indenture, mortgage, deed of trust or any other agreement or
        instrument to which the Company or any Subsidiary is a party or by which
        any of
        them is bound or to which any of the material property or assets of the Company
        or any Subsidiary is subject except for any such creation or imposition which
        is
        not reasonably likely to have a Material Adverse Effect. No consent, approval,
        authorization or other order of, or registration, qualification or filing
        with,
        any regulatory body, administrative agency, or other governmental body in
        the
        United States or any other person (including, without limitation, the
        stockholders of the Company) is required for the execution and delivery of
        the
        Agreements and the Warrants and the valid issuance and sale of the Shares
        and
        Warrants to be sold pursuant to the Agreements, and the valid issuance of
        the
        Warrant Shares under the Warrant, other than such as have been made or obtained,
        and except for stockholder approval under applicable Nasdaq requirements
        as
        contemplated pursuant to Section 7.9, post-closing securities filings or
        notifications required to be made under federal or state securities
        laws.

      

      4.4 Capitalization.
        The
        capitalization of the Company as of June 30, 2005 is
        as set
        forth in the most recent applicable Exchange Act Documents, increased as
        set
        forth in the next sentence. The Company has not issued any capital stock
        since
        that date other than pursuant to (i) employee benefit plans disclosed in
        the
        Exchange Act Documents, or (ii) outstanding warrants, options or other
        securities disclosed in the Exchange Act Documents. The Shares and Warrants
        to
        be sold pursuant to the Agreements, and the Warrant Shares to be issued pursuant
        to the Warrant, have been duly authorized, and when issued and paid for in
        accordance with the terms of the Agreements and the Warrants, as the case
        may
        be, will be duly and validly issued, fully paid and nonassessable. The
        outstanding shares of capital stock of the Company have been duly and validly
        issued and are fully paid and nonassessable, have been issued in compliance
        with
        all federal and state securities laws, and were not issued in violation of
        any
        preemptive rights or similar rights to subscribe for or purchase securities.
        Except as set forth in or contemplated by the Exchange Act Documents, there
        are
        no outstanding rights (including, without limitation, preemptive rights),
        warrants or options to acquire, or instruments convertible into or exchangeable
        for, any unissued shares of capital stock or other equity interest in the
        Company or any Subsidiary, or any contract, commitment, agreement, understanding
        or arrangement of any kind to which the Company is a party or of which the
        Company has knowledge and relating to the issuance or sale of any capital
        stock
        of the Company or any Subsidiary, any such convertible or exchangeable
        securities or any such rights, warrants or options. Without limiting the
        foregoing, no preemptive right, co-sale right, right of first refusal,
        registration right, or other similar right exists with respect to the Shares,
        the Warrants or the Warrant Shares or the issuance and sale thereof. Except
        as
        set forth in this Agreement, no further approval or authorization of any
        stockholder, the Board of Directors of the Company or others is required
        for the
        issuance and sale of the Shares, the Warrants and the Warrant Shares, including
        under Nasdaq rules. The Company owns the entire equity interest in each of
        its
        Subsidiaries, free and clear of any pledge, lien, security interest,
        encumbrance, claim or equitable interest, other than as described in the
        Exchange Act Documents. Except as disclosed in the Exchange Act Documents,
        there
        are no stockholders agreements, voting agreements or other similar agreements
        with respect to the Common Stock to which the Company is a party or, to the
        knowledge of the Company, between or among any of the Company’s
        stockholders.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      4.5 Legal
        Proceedings.
        There
        is no material legal or governmental proceeding pending or, to the knowledge
        of
        the Company, threatened to which the Company or any Subsidiary is or may
        be a
        party or of which the business or property of the Company or any Subsidiary
        is
        subject that is not disclosed in the Exchange Act Documents.

      

      4.6 No
        Violations.
        Neither
        the Company nor any Subsidiary is in violation of its charter, bylaws, or
        other
        organizational document, or in violation of any law, administrative regulation,
        ordinance or order of any court or governmental agency, arbitration panel
        or
        authority applicable to the Company or any Subsidiary, which violation,
        individually or in the aggregate, would be reasonably likely to have a Material
        Adverse Effect, or is in default (and there exists no condition which, with
        the
        passage of time or otherwise, would constitute a default) in the performance
        of
        any bond, debenture, note or any other evidence of indebtedness in any
        indenture, mortgage, deed of trust or any other material agreement or instrument
        to which the Company or any Subsidiary is a party or by which the Company
        or any
        Subsidiary is bound or by which the properties of the Company or any Subsidiary
        are bound, which would be reasonably likely to have a Material Adverse
        Effect.

      

      4.7 Governmental
        Permits, Etc.
        With
        the exception of the matters which are dealt with separately in
        Sections 4.1, 4.12, 4.13 and 4.14, each of the Company and its Subsidiaries
        has all necessary franchises, licenses, certificates and other authorizations
        from any foreign, federal, state or local government or governmental agency,
        department, or body that are currently necessary for the operation of the
        business of the Company and its Subsidiaries as currently conducted and as
        described in the Exchange Act Documents except where the failure to currently
        possess could not reasonably be expected to have a Material Adverse
        Effect.

      

      4.8 Intellectual
        Property.
        Except
        as described in the Company’s SEC filings: (i) the Company owns or and to the
        Company’s knowledge has obtained (a) valid and enforceable licenses or other
        rights for the material intellectual property used in its business, as it
        is
        currently conducted including, without limitation, in the field of RNA
        interference (RNAi) involving small interfering nucleic acid (siNA, including
        siRNA) molecules, and process development/cGMP manufacturing of RNA and siNA,
        including siRNA, and (b) all licenses and other rights required to use or
        exploit any of the foregoing, currently used in the conduct of the Company’s
        business (collectively, the “Intellectual Property”); and (ii) (a) to the
        Company’s knowledge there are no third parties who have any ownership rights to
        any Intellectual Property or trademarks, trademark, trademark applications,
        service marks, service mark applications, or trade secrets (“Other Property”)
        that is owned by, or has been licensed to, the Company for the products
        described in the SEC Filings that would preclude the Company from conducting
        its
        business as currently conducted and have a Material Adverse Effect, except
        for
        the ownership rights of the owners of the Intellectual Property or Other
        Property licensed or optioned by the Company; (b) to the Company’s knowledge,
        there are currently no sales of any products that would constitute an
        infringement by third parties of any Intellectual Property owned, licensed
        or
        optioned by the Company, which infringement would have a Material Adverse
        Effect; (c) there is no pending or, to the Company’s knowledge, threatened
        action, suit, proceeding or claim by others challenging the rights of the
        Company in or to any Intellectual Property or Other Property owned, licensed
        or
        optioned by the Company, other than claims which would not reasonably be
        expected to have a Material Adverse Effect; (d) there is no pending or, to
        the
        Company’s knowledge, threatened action, suit, proceeding or claim by others
        challenging the validity or scope of any Intellectual Property or Other Property
        owned, licensed or optioned by the Company; and (e) there is no pending or,
        to
        the Company’s knowledge, threatened action, suit, proceeding or claim by others
        that the Company infringes or otherwise violates any patent, trademark,
        copyright, trade secret or other proprietary right of others, other than
        non-material actions, suits, proceedings and claims.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      4.9 Financial
        Statements.
        (a) The
        financial statements of the Company and the related notes contained in the
        Exchange Act Documents present fairly, in accordance with generally accepted
        accounting principles, the financial position of the Company and its
        Subsidiaries as of the dates indicated, and the results of its operations
        and
        cash flows for the periods therein specified except that the unaudited interim
        financial statements were or are subject to normal and recurring year-end
        adjustments which will not be material in amount. Such financial statements
        (including the related notes) have been prepared in accordance with generally
        accepted accounting principles applied on a consistent basis throughout the
        periods therein specified, except as may be disclosed in
        the
        notes to such financial statements, or in the case of unaudited statements,
        as
        may be permitted by the SEC on Form 10-Q under the Exchange Act and
        except
        as disclosed in the Exchange Act Documents. The other financial information
        contained in the Exchange Act Documents has been prepared on a basis consistent
        with the financial statements of the Company.

      

      (b) Except
        as
        set forth in any Exchange Act Documents, there are no obligations of the
        Company
        to officers, directors, stockholders or employees of the Company other than
        (i)
        for payment of salary for services rendered and for bonus payments; (ii)
        reimbursements for reasonable expenses incurred on behalf of the Company;
        (iii)
        for other standard employee benefits made generally available to all employees
        (including stock option agreements outstanding under any stock option plan
        approved by the Board of Directors of the Company); and (iv) obligations
        listed
        in the Company’s financial statements. Except as described above or in any
        Exchange Act Filings, none of the officers, directors or, to the best of
        the
        Company’s knowledge, key employees or stockholders of the Company or any members
        of their immediate families, are indebted to the Company, individually or
        in the
        aggregate, in excess of $60,000 or have any direct or indirect ownership
        interest in any firm or corporation with which the Company is affiliated
        or with
        which Company has a business relationship, or any firm or corporation which
        competes with the Company, other than passive investments in publicly traded
        companies (representing less than one percent (1%) of such company) which
        may
        compete with the Company. Except as described above, no officer, director
        or
        stockholder, or any member of their immediate families, is, directly or
        indirectly, interested in any material contract with the Company and no
        agreements, understandings or proposed transactions are contemplated between
        the
        Company and any such person. Except as set forth in any Exchange Act Documents,
        the Company is not a guarantor or indemnitor of any indebtedness of any other
        person, firm or corporation.

      

      4.10 No
        Material Adverse Change.
        Except
        as disclosed in the Exchange Act Documents, since March 31, 2005, there has
        not
        been (i) any event which has had, or would be reasonably expected
        to have,
        a Material Adverse Effect; (ii) any obligation, direct or contingent, that
        is
        material to the Company and its Subsidiaries considered as one enterprise,
        incurred by the Company, except obligations incurred in the ordinary course
        of
        business, (iii) any dividend or distribution of any kind declared,
        paid or
        made on the capital stock of the Company or any of its Subsidiaries, or
        (iv) any loss or damage (whether or not insured) to the physical property
        of the Company or any of its Subsidiaries which has been sustained which
        has a
        Material Adverse Effect.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      4.11 Disclosure.
        The representations
        and warranties of the Company contained in this Section 4 as of the
        date
        hereof and as of the Closing Date, do not contain any untrue statement of
        a
        material fact or omit to state a material fact required to be stated therein
        or
        necessary to make the statements therein, in light of the circumstances under
        which they were made, not misleading. Except with respect to the material
        terms
        and conditions of the transaction contemplated by the Agreements and the
        Warrants, which shall be publicly disclosed by the Company pursuant to Section
        16 hereof, the Company confirms that any information provided by it or any
        person acting on its behalf that the Company believes constitutes material,
        non-public information will be publicly disclosed pursuant to a press release
        and Form 8-K issued within one (1) business day of the Subscription Date
        (as
        defined in Section 2.2 above). The Company understands and confirms that
        Investor will rely on the foregoing representations in effecting transactions
        in
        securities of the Company.

      

      4.12 NASDAQ
        Compliance.
        The
        Company’s Common Stock is registered pursuant to Section 12(g) of the
        Exchange Act and is listed on The Nasdaq Stock Market, Inc. National Market
        (the
“Nasdaq National Market”), and the Company has taken no action designed to, or
        likely to have the effect of, terminating the registration of the Common
        Stock
        under the Exchange Act or de-listing the Common Stock from the Nasdaq National
        Market, nor has the Company received any notification that the SEC or the
        National Association of Securities Dealers, Inc. (“NASD”) is contemplating
        terminating such registration or listing. The Company is in compliance with
        all
        applicable Nasdaq maintenance requirements and corporate governance requirements
        for continuing listing on Nasdaq National Market. The issuance by the Company
        of
        the Shares, the Warrants, and the Warrant Shares shall not have the effect
        of
        terminating the registration of the Common Stock under the Exchange Act or
        delisting the Common Stock from the Nasdaq National Market.

      

      4.13 Reporting
        Status.
        The
        Company is eligible to use Form S-3 to register the Shares and Warrant Shares
        to
        be offered for the account of the Investors. The following documents complied
        in
        all material respects with the SEC’s requirements as of their respective filing
        dates, and the information contained therein as of the date thereof did not
        contain an untrue statement of a material fact or omit to state a material
        fact
        required to be stated therein or necessary to make the statements therein
        in
        light of the circumstances under which they were made not
        misleading:

      

      (a) the
        Annual Report on Form 10-K for the fiscal year ended December 31, 2004, filed
        by
        the Company with the SEC on March 31, 2005, as amended pursuant to the Form
        10-K/A filed by the Company with the SEC on May 2, 2005; and 

      

      (b) all
        other
        documents, if any, filed by the Company with the SEC during
        the one-year period preceding the date of this Agreement pursuant to the
        reporting requirements of the Exchange Act.

      

      4.14 Listing.
        The
        Company shall comply with all requirements of the NASD and SEC with respect
        to
        the issuance of the Shares, the Warrant and the Warrant Shares and the listing
        of the Shares and the Warrant Shares on the Nasdaq National Market.

      

      4.15 No
        Manipulation of Stock.
        The
        Company has not taken and will not, in violation of applicable law, take,
        any
        action designed to or that might reasonably be expected to cause or result
        in
        stabilization or manipulation of the price of the Common Stock to facilitate
        the
        sale or resale of the Shares or the Warrant Shares.

      

      4.16 Company
        not an “Investment Company”.
        The
        Company has been advised of the rules and requirements under the Investment
        Company Act of 1940, as amended (the “Investment Company Act”). To the best
        knowledge of the Company, the Company is not, and immediately after receipt
        of
        payment for the Shares and Warrants will not be, an “investment company” or an
        entity “controlled” by an “investment company” within the meaning of the
        Investment Company Act and shall conduct its business in a manner so that
        it
        will not become subject to the Investment Company Act.

      

      4.17 Accountants.
        To the
        Company’s knowledge Ernst & Young LLP, who the Company expects will consent
        to the incorporation by reference of its report dated February 14, 2005 with
        respect to the consolidated financial statements of the Company included
        in the
        Company's Annual Report on Form 10-K for the year ended December 31, 2004
        into
        the Registration Statement (as defined below) and the prospectus which forms
        a
        part thereof, are independent accountants as required by the Securities Act
        and
        the rules and regulations promulgated thereunder.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      4.18 Contracts.
        The
        contracts described in the Exchange Act Documents that are material to the
        Company are in full force and effect on the date hereof, and neither the
        Company
        nor, to the Company's knowledge, any other party to such contracts is in
        breach
        of or default under any of such contracts which would have a Material Adverse
        Effect. The Company has filed with the SEC all contracts and agreements required
        to be filed by the Exchange Act.

       

      4.19 Taxes.
        The
        Company has filed all necessary federal, state and foreign income and franchise
        tax returns when due (or obtained appropriate extensions for filing) and
        has
        paid or accrued all taxes shown as due thereon, and the Company has no knowledge
        of a tax deficiency which has been or might be asserted or threatened against
        it
        which would have a Material Adverse Effect.

      

      4.20 Transfer
        Taxes.
        On the
        Closing Date, all stock transfer or other taxes (other than income taxes)
        which
        are required to be paid in connection with the sale and transfer of the Shares
        and the Warrant to be sold to the Investor hereunder will be, or will have
        been,
        fully paid or provided for by they Company and all laws imposing such taxes
        will
        be or will have been fully complied with. Upon the issuance of the Warrants
        Shares pursuant to the Warrant all stock transfer or other taxes (other than
        income taxes) which are required to be paid in connection therewith will
        be, or
        will have been, fully paid or provided for by the Company and all laws imposing
        such taxes will be or will have been fully complied with.

       

      4.21 Private
        Offering.
        Assuming the correctness of the representations and warranties of the Investors
        set forth in Section 5 hereof, the offer and sale of Shares and the
        Warrants hereunder is and, upon exercise of the Warrants, the issuance of
        the
        Warrant Shares will be, exempt from registration under the Securities Act.
        The
        Company has not in the past nor will it hereafter take any action independent
        of
        the placement agent to sell, offer for sale or solicit offers to buy any
        securities of the Company which would bring the offer, issuance or sale of
        the
        Shares and the Warrants as contemplated by this Agreement, or the issuance
        of
        the Warrant Shares pursuant to the Warrant, within the provisions of Section
        5
        of the Securities Act, unless such offer, issuance or sale was or shall be
        within the exemptions of Section 4 of the Securities Act. Neither
        the Company nor any person acting on behalf of the Company has offered or
        sold
        any of the Shares or the Warrants by any form of general solicitation or
        general
        advertising. The Company has offered the Shares and the Warrants for sale
        only
        to the Investors and certain other “accredited investors” within the meaning of
        Rule 501 under the Securities Act.

      

      4.22 Disclosure
        Controls and Procedures.
        The
        Company is in material compliance with all provisions of the Sarbanes-Oxley
        Act
        of 2002 which are applicable to it as of the Closing Date. The Company maintains
        a system of internal control over financial reporting (as such term is defined
        in the Exchange Act ) regarding the reliability of financial reporting and
        preparation of financial statements for external purposes in accordance with
        GAAP and includes policies and procedures that (i) pertain to maintenance
        of
        records that in reasonable detail accurately and fairly reflect the transactions
        and dispositions of the assets of the issuer; (ii) provide reasonable assurance
        that transactions are recorded as necessary to permit preparation of financial
        statements in accordance with GAAP, and that receipts and expenditures of
        the
        issuer are being made only in accordance with authorizations of management
        and
        directors of the issuer; and (iii) provide reasonable assurance regarding
        prevention or timely detection of unauthorized acquisition, use, or disposition
        of the issuer’s assets that could have a material adverse effect on the
        financial statements. The Company’s certifying officers are responsible for
        establishing and maintaining disclosure controls and procedures (as defined
        in
        Exchange Act) for the Company and they have, to the extent applicable,
        (a) designed such disclosure controls and procedures, or caused such
        disclosure controls and procedures to be designed under their supervision,
        to
        ensure that material information relating to the Company, including its
        Subsidiaries, is made known to the certifying officers by others within those
        entities, particularly during the periods in which the Exchange Act Documents
        have been prepared; (b) evaluated the effectiveness of the Company’s
        disclosure controls and procedures and presented in the applicable Exchange
        Act
        Documents their conclusions about the effectiveness of the disclosure controls
        and procedures, as of the end of the periods covered by such Exchange Act
        Documents based on such evaluation; and (c) to the extent applicable,
        since
        the last evaluation date referred to in (b) above, there have been
        no
        material changes in the Company’s internal control over financial reporting (as
        such term is defined in the Exchange Act) and no significant deficiencies
        or
        material weaknesses in internal controls over financial reporting have been
        identified since the last evaluation date or, to the Company’s knowledge, in
        other factors that could significantly affect the Company’s internal control
        over financial reporting.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      4.23 Transactions
        With Affiliates.
        Except
        as disclosed in the Exchange Act Documents, none of the officers or directors
        of
        the Company is presently a party to any transaction with the Company or any
        Subsidiary (other than for services as employees, officers and directors),
        including any contract, agreement or other arrangement providing for the
        furnishing of services to or by, providing for rental of real or personal
        property to or from, or otherwise requiring payments to or from any officer
        or
        director or, to the knowledge of the Company, any entity in which any officer
        or
        director has a substantial interest or is an officer, director, trustee or
        partner.

      

      4.24 No
        Registration Rights.
        Other
        than the registration rights granted to the Investors in Section 7 of this
        Agreement and except as set forth in this Section 4.24, no person has the
        right,
        which right has not been waived, to require the Company or any Subsidiary
        to
        register any securities for sale under the Securities Act by reason of the
        filing of the Registration Statement with the SEC or the issuance and sale
        of
        the Shares, the Warrant or the Warrant Shares. The following persons have
        the
        right to require the Company to register securities for sale under the
        Securities Act, and have exercised such rights with respect to the filing
        of the
        Registration Statement: (a) Sprout Capital IX, L.P., with respect to 1,160,462
        shares of the Company's common stock; (b) Sprout IX Plan Investors, L.P.,
        with
        respect to 53,589 shares of the Company's common stock; (c) Sprout Entrepreneurs
        Fund, L.P., with respect to 4,571 shares of the Company's common stock; (d)
        DLJ
        Capital Corporation, with respect to 2,543 shares of the Company's common
        stock;
        (e) James Niedel, Ph.D., with respect to 31,311 shares of the Company's common
        stock; (f) Venrock Associates III, L.P. with respect to 1,813,814 shares
        of the
        Company's common stock; (g) Venrock Associates, with respect to 408,108 shares
        of the Company's common stock; (h) Venrock Entrepreneurs Fund III, L.P.,
        with
        respect to 45,345 shares of the Company's common stock; (i) Oxford Bioscience
        Partners IV L.P., with respect to 1,701,661 shares of the Company's common
        stock; (j) mRNA Fund II L.P. with respect to 17,073 shares of the Company's
        common stock; (k) Granite Global Ventures (Q.P.) L.P., with respect to 431,453
        shares of the Company's common stock; (l) Granite Global Ventures L.P., with
        respect to 7,373 shares of the Company's common stock; and (m) Abingworth
        Management, Ltd., with respect to 459,714 shares of the Company's common
        stock
        (clauses (a)-(m), collectively, the “Existing Registrable Shares”).

      

      4.25 Dilution.
        The
        Company acknowledges that the issuance of the Shares and the Warrant will
        result
        in dilution of the outstanding shares of Common Stock, which dilution may
        be
        substantial under certain market conditions. The Company further acknowledges
        that its obligations under this Agreement and the Warrant, including without
        limitation its obligation to issue the Warrant, are, except as expressly
        set
        forth in this Agreement, unconditional and absolute and not subject to any
        right
        of set off, counterclaim, delay, or reduction, regardless of the effect of
        any
        such dilution or any claim the Company may have against any Investor and
        regardless of the dilutive effect that such issuance may have on the ownership
        of the other stockholders of the Company.

      

      5. Representations,
        Warranties and Covenants of the Investor.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      5.1 The
        Investor represents and warrants to, and covenants with, the Company that:
        (i) (A) the Investor is an “accredited investor” as defined in Regulation D
        under the Securities Act and the Investor is also knowledgeable, sophisticated
        and experienced in making, and is qualified to make decisions with respect
        to
        investments in shares presenting an investment decision like that involved
        in
        the purchase of the Shares and the Warrant, including investments in securities
        issued by the Company and investments in comparable companies, and has
        requested, received, reviewed and considered all information it deemed relevant
        in making an informed decision to purchase the Shares and the Warrant and
        (B)
        the Company has made available to the Investor, prior to the date hereof,
        the
        opportunity to ask questions of and receive complete and correct answers
        from
        representatives of the Company concerning the terms and conditions of the
        Shares
        and the Warrant and to obtain any additional information relating to the
        financial condition and business of the Company and the Investor has such
        knowledge and experience in financial and business matters that the Investor
        is
        capable of evaluating the merits and risks of the investment in the Shares
        and
        the Warrant; (ii) the Investor is acquiring the number of Shares and
        the
        Warrant to purchase the number of Warrant Shares, each as set forth in Section
        3
        of the Securities Purchase Agreement in the ordinary course of its business
        and
        for its own account and with no present intention of distributing any of
        such
        Shares, Warrant or Warrant Shares or any arrangement or understanding with
        any
        other persons regarding the distribution of such Shares, Warrant or Warrant
        Shares (other than pursuant to the Registration Statement or in compliance
        with
        applicable laws); (iii) the Investor will not, directly or indirectly,
        offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers
        to
        buy, purchase or otherwise acquire or take a pledge of) any of the Shares
        and
        the Warrant except in compliance with the Securities Act, applicable state
        securities laws and the respective rules and regulations promulgated thereunder;
        (iv) the Investor has answered all questions on the Investor Questionnaire
        for use in preparation of the Registration Statement and the answers thereto
        are
        true, correct and complete as of the date hereof and will be true, correct
        and
        complete as of the Closing Date and the Filing Date; (v) the Investor
        will
        notify the Company of any change in any of such information until such time
        as
        the Investor has sold all of its Shares and Warrant Shares or until the Company
        is no longer required to keep the Registration Statement effective; and (vi)
        the
        Investor has, in connection with its decision to purchase the number of Shares
        and the Warrant to purchase the number of Warrant Shares, each as set forth
        in
        Section 3 of the Securities Purchase Agreement, relied only upon the Exchange
        Act Documents and the representations and warranties of the Company contained
        herein. The Investor understands that its acquisition of the Shares and the
        Warrant has not been registered under the Securities Act or registered or
        qualified under any state securities law in reliance on specific exemptions
        therefrom, which exemptions may depend upon, among other things, the bona
        fide
        nature of the Investor’s investment intent as expressed herein. Subject to
        compliance with the Securities Act, applicable securities laws and the
        respective rules and regulations promulgated thereunder, nothing contained
        herein shall be deemed a representation or warranty by such Investor to hold
        the
        Shares, Warrant or Warrant Shares for any period of time. The Investor has
        completed or caused to be completed and delivered to the Company the Investor
        Questionnaire, which questionnaire is true, correct and complete in all material
        respects.

      

      5.2 The
        Investor acknowledges, represents and agrees that no action has been or will
        be
        taken in any jurisdiction outside the United States by the Company that would
        permit an offering of the Shares, Warrant or Warrant Shares, or possession
        or
        distribution of offering materials in connection with the issue of the Shares,
        Warrant or Warrant Shares, in any jurisdiction outside the United States
        where
        legal action by the Company for that purpose is required. Each Investor outside
        the United States will comply with all applicable laws and regulations in
        each
        foreign jurisdiction in which it purchases, offers, sells or delivers the
        Shares, Warrant or Warrant Shares or has in its possession or distributes
        any
        offering material, in all cases at its own expense.

      

      5.3 The
        Investor hereby covenants with the Company not to make any sale of the Shares,
        Warrant or Warrant Shares without complying with the provisions of this
        Agreement and without causing the prospectus delivery requirement under the
        Securities Act to be satisfied (whether by delivery of the Prospectus or
        pursuant to and in compliance with an exemption from such requirement), and
        the
        Investor acknowledges that the Warrant and certificates evidencing the Shares
        will be imprinted with a legend that prohibits their transfer except in
        accordance therewith. The Investor acknowledges that there may occasionally
        be
        times when the Company determines that it must suspend the use of the Prospectus
        forming a part of the Registration Statement, as set forth in Section
        7.2(c).

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      5.4 The
        Investor further represents and warrants to, and covenants with, the Company
        that (i) the Investor has full right, power, authority and capacity
        to
        enter into this Agreement and to consummate the transactions contemplated
        hereby
        and has taken all necessary action to authorize the execution, delivery and
        performance of this Agreement, and (ii) this Agreement constitutes
        a valid
        and binding obligation of the Investor enforceable against the Investor in
        accordance with its terms, except as enforceability may be limited by applicable
        bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
        creditors’ and contracting parties’ rights generally and except as
        enforceability may be subject to general principles of equity (regardless
        of
        whether such enforceability is considered in a proceeding in equity or at
        law)
        and except as the indemnification agreements of the Investors herein may
        be
        legally unenforceable. 

      

      5.5 Neither
        the Investor nor any person acting on its behalf or at its direction has
        engaged
        in any purchase or sale of Common Stock (including without limitation any
        short
        sale), pledge, transfer, establish an open “put equivalent position” within the
        meaning of Rule 16a-1(h) under the Exchange Act) during the 5 trading
        days
        immediately preceding the date of this Agreement. Investor will not use any
        of
        the restricted Shares acquired pursuant to this Agreement, or the Warrant
        Shares
        acquired pursuant to the Warrant, to cover any short position in the Common
        Stock of the Company if doing so would be in violation of applicable securities
        laws and otherwise will comply with federal securities laws in the holding
        and
        sale of the Shares, Warrant and Warrant Shares.

      

      5.6 The
        Investor understands that nothing in the Exchange Act Documents, this Agreement,
        the Warrant or any other materials presented to the Investor in connection
        with
        the purchase and sale of the Shares and the Warrant constitutes legal, tax
        or
        investment advice. The Investor has consulted such legal, tax and investment
        advisors as it, in its sole discretion, has deemed necessary or appropriate
        in
        connection with its purchase of Shares and the Warrant.

      

      5.7 The
        Company acknowledges and agrees that Investor does not make or has not made
        any
        representations or warranties with respect to the transactions contemplated
        hereby other than those specifically set forth in Sections 4 and 5 of this
        Agreement, Sections 5 and 16(a) of Annex 1 of this Agreement, or in the Investor
        Questionnaire.

      

      5.8 The
        Purchaser acknowledges the following disclosure, which is set forth herein
        as
        required pursuant to Section 25102(a) of the California Corporate Securities
        Law
        of 1968 (provided that, subject to the accuracy of the Purchasers’
        representations and warranties to the Company, the Company represents that
        the
        sale of the Shares is so exempt): 

      

      “THE
        SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN
        QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA
        AND
        THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
        CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE
        SALE
        OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102, OR
        25105
        OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
        ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE
        SALE
        IS SO EXEMPT.”

      

      6. Survival
        of Representations, Warranties and Agreements.
        Notwithstanding any investigation made by any party to this Agreement, all
        covenants, agreements, representations and warranties made by the Company
        and
        the Investor herein shall survive the execution of this Agreement, the delivery
        to the Investor of the Shares and the Warrant being purchased and the payment
        therefor until the expiration date of the Company’s obligation to keep the
        Registration Statement effective pursuant to Section 7.1(c).

      

      7. Registration
        of the Shares and Warrant Shares; Compliance with the Securities
        Act.

      

      7.1 Registration
        Procedures and Other Matters.
        The
        Company shall:

      

      (a) subject
        to receipt of necessary information from the Investor after prompt request
        from
        the Company to the Investor to provide such information, prepare and file
        with
        the SEC, within 15 business days after the Closing Date (the “Filing Date”), a
        registration statement on Form S-3 (the “Registration Statement”) to enable the
        resale of the Shares and the Warrant shares by the Investors from time to
        time
        through the automated quotation system of the Nasdaq National Market or in
        privately-negotiated transactions;

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (b) subject
        to receipt of necessary information from the Investor after prompt request
        from
        the Company to the Investors to provide such information, use its reasonable
        commercial efforts to cause the Registration Statement to become effective
        on or
        prior to the 70th
        calendar
        day after the Closing Date (the “Required Effective Date”). However, so long as
        the Company filed the Registration Statement by the Filing Date, if the
        Registration Statement receives Commission review, then the Required Effective
        Date will be the one hundred tenth (110th) calendar day after the Closing
        Date;

      

      (c) use
        its
        reasonable commercial efforts to prepare and file with the SEC such amendments
        and supplements to the Registration Statement and the Prospectus used in
        connection therewith as may be necessary to keep the Registration Statement
        current, effective and free from any material misstatement or omission to
        state
        a material fact for a period not exceeding, with respect to each Investor’s
        Shares and Warrant Shares, the earlier of (i) the fifth anniversary
        of the
        Closing Date, (ii) the date on which the Investor may sell all Shares
        and
        Warrant Shares then held by the Investor without restriction by the volume
        limitations of Rule 144(e) of the Securities Act, or (iii) such
        time
        as all Shares, and Warrant Shares issuable pursuant to the Warrant, purchased
        by
        such Investor in this Offering have been sold pursuant to a registration
        statement;

      

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

      

      (e) file
        documents required of the Company for normal blue sky clearance in states
        specified in writing by the Investor and use its reasonable commercial efforts
        to maintain such blue sky qualifications during the period the Company is
        required to maintain the effectiveness of the Registration Statement pursuant
        to
        Section 7.1(c); provided, however, that the Company shall not be required
        to qualify to do business or consent to service of process in any jurisdiction
        in which it is not now so qualified or has not so consented;

      

      (f) bear
        all
        expenses in connection with the procedures in paragraph (a) through (e) of
        this
        Section 7.1 (other than underwriting discounts or commissions, brokers’
        fees and similar selling expenses, and any other fees or expenses incurred
        by
        the Investor, including attorney fees of the Investor) and the registration
        of
        the Shares and Warrant Shares pursuant to the Registration Statement;

      

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

      

      (h) provide
        a
“Plan of Distribution” section of the Registration Statement in the form
        attached hereto as Exhibit
        A.

      

      Notwithstanding
        anything to the contrary herein, except for the Existing Registrable Shares
        the
        Registration Statement shall cover only the Shares and Warrant Shares. In
        no
        event at any time before the expiration of ninety (90) days after the
        effectiveness of the Registration Statement with respect to the Shares and
        Warrant Shares shall the Company publicly announce or file any other
        registration statement, other than registrations on Form S-8, without
        the
        prior written consent of a majority in interest of the Investors.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      The
        Company understands that the Investor disclaims being an underwriter, but
        if the
        SEC deems the Investor to be an underwriter the Company shall not be relieved
        of
        any obligations it has hereunder; provided,
        however
        that if
        the Company receives notification from the SEC that the Investor is deemed
        an
        underwriter, then the period by which the Company is obligated to submit
        an
        acceleration request to the SEC shall be extended to the earlier of (i) the
        90th day after such SEC notification, or (ii) 120 days after the initial
        filing of the Registration Statement with the SEC.

      

      7.2 Transfer
        of Shares and Warrant Shares After Registration; Suspension.

      

      (a) The
        Investor agrees that it will not effect any disposition of the Shares or
        Warrant
        Shares or its right to purchase the Shares or Warrant Shares that would
        constitute a sale within the meaning of the Securities Act except as
        contemplated in the Registration Statement referred to in Section 7.1
        and
        as described below or as otherwise permitted by law, and that it will promptly
        notify the Company of any changes in the information set forth in the
        Registration Statement regarding the Investor or its plan of
        distribution.

      

      (b) Except
        in
        the event that paragraph (c) below applies, the Company shall (i) if
        deemed
        necessary by the Company, prepare and file from time to time with the SEC
        a
        post-effective amendment to the Registration Statement or a supplement to
        the
        related Prospectus or a supplement or amendment to any document incorporated
        therein by reference or file any other required document so that such
        Registration Statement will not contain an untrue statement of a material
        fact
        or omit to state a material fact required to be stated therein or necessary
        to
        make the statements therein not misleading, and so that, as thereafter delivered
        to purchasers of the Shares or Warrant Shares being sold thereunder, such
        Prospectus will not contain an untrue statement of a material fact or omit
        to
        state a material fact required to be stated therein or necessary to make
        the
        statements therein, in light of the circumstances under which they were made,
        not misleading; (ii) provide the Investor copies of any documents
        filed
        pursuant to Section 7.2(b)(i) as the Investor may reasonably request;
        and
        (iii) inform each Investor that the Company has complied with its
        obligations in Section 7.2(b)(i) (or that, if the Company has filed
        a
        post-effective amendment to the Registration Statement which has not yet
        been
        declared effective, the Company will notify the Investor to that effect,
        will
        use its reasonable commercial efforts to secure the effectiveness of such
        post-effective amendment as promptly as possible and will promptly notify
        the
        Investor pursuant to Section 7.2(b)(i) hereof when the amendment
        has
        become effective).

      

      (c) Subject
        to paragraph (d) below, in the event (i) of any request by the SEC
        or any
        other federal or state governmental authority during the period of effectiveness
        of the Registration Statement for amendments or supplements to a Registration
        Statement or related Prospectus or for additional information; (ii) of
        the
        issuance by the SEC or any other federal or state governmental authority
        of any
        stop order suspending the effectiveness of a Registration Statement or the
        initiation of any proceedings for that purpose; (iii) of the receipt
        by the
        Company of any notification with respect to the suspension of the qualification
        or exemption from qualification of any of the Shares or Warrant Shares for
        sale
        in any jurisdiction or the initiation or threatening of any proceeding for
        such
        purpose; or (iv) of any event or circumstance which, upon the advice of its
        counsel, necessitates the making of any changes in the Registration Statement
        or
        Prospectus, or any document incorporated or deemed to be incorporated therein
        by
        reference, so that, in the case of the Registration Statement, it will not
        contain any untrue statement of a material fact or any omission to state
        a
        material fact required to be stated therein or necessary to make the statements
        therein not misleading, and that in the case of the Prospectus, it will not
        contain any untrue statement of a material fact or any omission to state
        a
        material fact required to be stated therein or necessary to make the statements
        therein, in the light of the circumstances under which they were made, not
        misleading; then the Company shall deliver a certificate in writing to the
        Investor (the “Suspension Notice”) to the effect of the foregoing and, upon
        receipt of such Suspension Notice, the Investor will refrain from selling
        any
        Shares or Warrant Shares pursuant to the Registration Statement (a “Suspension”)
        until the Investor’s receipt of copies of a supplemented or amended Prospectus
        prepared and filed by the Company, or until it is advised in writing by the
        Company that the current Prospectus may be used, and has received copies
        of any
        additional or supplemental filings that are incorporated or deemed incorporated
        by reference in any such Prospectus. The Suspension Notice shall not contain
        any
        information that constitutes or would reasonably be expected to constitute
        material, non-public information. In the event of any Suspension, the Company
        will use its reasonable commercial efforts to cause the use of the Prospectus
        so
        suspended to be resumed as soon as reasonably practicable within 20 business
        days after the delivery of a Suspension Notice to the Investor. In addition
        to
        and without limiting any other remedies (including, without limitation, at
        law
        or at equity) available to the Investor, the Investor shall be entitled to
        specific performance in the event that the Company fails to comply with the
        provisions of this Section 7.2(c).

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (d) Notwithstanding
        the foregoing paragraphs of this Section 7.2, the Investor shall not
        be
        prohibited from selling Shares and Warrant Shares under the Registration
        Statement as a result of Suspensions on more than two occasions of not more
        than
        30 days each in any twelve month period, unless, in the good faith judgment
        of
        the Company’s Board of Directors, upon the written opinion of counsel of the
        Company, the sale of Shares and Warrant Shares under the Registration Statement
        in reliance on this paragraph 7.2(d) would be reasonably likely to cause
        a
        violation of the Securities Act or the Exchange Act and result in liability
        to
        the Company.

      

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

      

      7.3 Indemnification.
        For the
        purpose of this Section 7.3:

      

      (i) the
        term
“Selling Stockholder” means the Investor and any affiliate or advisor of such
        Investor;

      

      (ii) the
        term
“Registration Statement” shall include the Prospectus in the form first filed
        with the SEC pursuant to Rule 424(b) of the Securities Act or filed
        as part
        of the Registration Statement at the time of effectiveness if no
        Rule 424(b) filing is required, and any exhibit, supplement or amendment
        included in or relating to the Registration Statement referred to in
        Section 7.1; and

      

      (iii) the
        term
“Untrue Statement” means any untrue statement or alleged untrue statement, or
        any omission or alleged omission to state in the Registration Statement a
        material fact required to be stated therein or necessary to make the statements
        therein not misleading.

      

      (a) The
        Company agrees to indemnify and hold harmless each Selling Stockholder from
        and
        against any losses, claims, damages, liabilities, or expenses to which such
        Selling Stockholder may become subject (under the Securities Act or otherwise)
        insofar as such losses, claims, damages, liabilities or expenses (or actions
        or
        proceedings in respect thereof) arise out of, or are based upon (i) any
        breach of the representations or warranties of the Company contained herein
        or
        failure to comply with the covenants and agreements of the Company contained
        herein, (ii) any Untrue Statement, or (iii) any failure by
        the Company
        to fulfill any undertaking included in the Registration Statement as amended
        or
        supplemented from time to time, and the Company will reimburse such Selling
        Stockholder for any reasonable legal or other expenses reasonably incurred
        in
        investigating, defending or preparing to defend any such action, proceeding
        or
        claim, or preparing to defend any such action, proceeding or claim, provided,
        however,
        that
        the Company shall not be liable in any such case to the extent that such
        loss,
        claim, damage or liability arises out of, or is based upon, an Untrue Statement
        made in reliance upon and in conformity with written information furnished
        to
        the Company by or on behalf of such Selling Stockholder specifically for
        use in
        preparation of the Registration Statement, as amended or supplemented from
        time
        to time (including, without limitation, information set forth in the Investor
        Questionnaire), or the inaccuracy of any representations made by such Selling
        Stockholder herein, or the failure of such Selling Stockholder to comply
        with
        its covenants and agreements contained in Section 7.2 hereof respecting sale
        of
        the Shares or Warrant Shares or any statement or omission in any Prospectus
        that
        is corrected in any subsequent Prospectus that was delivered to the Selling
        Stockholder prior to the pertinent sale or sales by the Selling Stockholder
        and
        that would have been avoided if the Selling Stockholder delivered the corrected
        Prospectus. The Company shall reimburse each Selling Stockholder for the
        indemnifiable amounts provided for herein on demand as such expenses are
        incurred.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (b) The
        Investor agrees to indemnify and hold harmless the Company (and each person,
        if
        any, who controls the Company within the meaning of Section 15 of
        the
        Securities Act, each officer of the Company who signs the Registration Statement
        and each director of the Company) from and against any losses, claims, damages
        or liabilities to which the Company (or any such officer, director or
        controlling person) may become subject (under the Securities Act or otherwise),
        insofar as such losses, claims, damages or liabilities (or actions or
        proceedings in respect thereof) arise out of, or are based upon, (i) any
        failure of the Investor to comply with the covenants and agreements contained
        in
        Section 7.2 hereof respecting sale of the Shares and Warrant Shares,
        or
        (ii) any Untrue Statement if such Untrue Statement was made in reliance
        upon and in conformity with written information furnished by or on behalf
        of the
        Investor specifically for use in preparation of the Registration Statement,
        as
        amended or supplemented from time to time (including, without limitation,
        information set forth in the Investor Questionnaire), and the Investor will
        reimburse the Company (or such officer, director or controlling person),
        as the
        case may be, for any legal or other expenses reasonably incurred in
        investigating, defending or preparing to defend any such action, proceeding
        or
        claim. The Investor shall reimburse the Company or such officer, director
        or
        controlling person, as the case may be, for the indemnifiable amounts provided
        for herein on demand as such expenses are incurred. Notwithstanding the
        foregoing, the Investor’s aggregate obligation to indemnify the Company and such
        officers, directors and controlling persons shall be limited to the net amount
        received by the Investor from the sale of the Shares or Warrant Shares, as
        the
        case may be.

      

      (c) Promptly
        after receipt by any indemnified person of a notice of a claim or the beginning
        of any action in respect of which indemnity is to be sought against an
        indemnifying person pursuant to this Section 7.3, such indemnified
        person
        shall notify the indemnifying person in writing of such claim or of the
        commencement of such action, but the omission to so notify the indemnifying
        person will not relieve it from any liability which it may have to any
        indemnified person under this Section 7.3 (except to the extent that
        such
        omission materially and adversely affects the indemnifying person’s ability to
        defend such action) or from any liability otherwise than under this
        Section 7.3. Subject to the provisions hereinafter stated, in case
        any such
        action shall be brought against an indemnified person, the indemnifying person
        shall be entitled to participate therein, and, to the extent that it shall
        elect
        by written notice delivered to the indemnified person promptly after receiving
        the aforesaid notice from such indemnified person, shall be entitled to assume
        the defense thereof, with counsel reasonably satisfactory to such indemnified
        person. After notice from the indemnifying person to such indemnified person
        of
        its election to assume the defense thereof, such indemnifying person shall
        not
        be liable to such indemnified person for any legal expenses subsequently
        incurred by such indemnified person in connection with the defense thereof,
        provided,
        however,
        that if
        there exists or shall exist a conflict of interest that would make it
        inappropriate, in the opinion of counsel to the indemnified person, for the
        same
        counsel to represent both the indemnified person and such indemnifying person
        or
        any affiliate or associate thereof, the indemnified person shall be entitled
        to
        retain its own counsel at the expense of such indemnifying person; provided,
        however, that no indemnifying person shall be responsible for the fees and
        expenses of more than one separate counsel (together with appropriate local
        counsel) for all indemnified parties. In no event shall any indemnifying
        person
        be liable in respect of any amounts paid in settlement of any action unless
        the
        indemnifying person shall have approved the terms of such settlement;
provided
        that
        such consent shall not be unreasonably withheld or delayed. No indemnifying
        person shall, without the prior written consent of the indemnified person,
        effect any settlement of any pending or threatened proceeding in respect
        of
        which any indemnified person is or could have been a party and indemnification
        could have been sought hereunder by such indemnified person, unless such
        settlement includes an unconditional release of such indemnified person from
        all
        liability on claims that are the subject matter of such proceeding.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (d) If
        the
        indemnification provided for in this Section 7.3 is unavailable to
        or
        insufficient to hold harmless an indemnified person under subsection (a)
        or (b)
        above in respect of any losses, claims, damages or liabilities (or actions
        or
        proceedings in respect thereof) referred to therein, then each indemnifying
        person shall contribute to the amount paid or payable by such indemnified
        person
        as a result of such losses, claims, damages or liabilities (or actions in
        respect thereof) in such proportion as is appropriate to reflect the relative
        fault of the Company on the one hand and the Investor, as well as any other
        Selling Shareholders under such Registration Statement on the other in
        connection with the statements or omissions or other matters which resulted
        in
        such losses, claims, damages or liabilities (or actions in respect thereof),
        as
        well as any other relevant equitable considerations. The relative fault shall
        be
        determined by reference to, among other things, in the case of an Untrue
        Statement, whether the Untrue Statement relates to information supplied by
        the
        Company on the one hand or an Investor or other Selling Shareholder on the
        other
        and the parties’ relative intent, knowledge, access to information and
        opportunity to correct or prevent such Untrue Statement. The Company and
        the
        Investor agree that it would not be just and equitable if contribution pursuant
        to this subsection (d) were determined by pro rata allocation (even if the
        Investor and other Selling Shareholders were treated as one entity for such
        purpose) or by any other method of allocation which does not take into account
        the equitable considerations referred to above in this subsection (d). The
        amount paid or payable by an indemnified person as a result of the losses,
        claims, damages or liabilities (or actions in respect thereof) referred to
        above
        in this subsection (d) shall be deemed to include any legal or other expenses
        reasonably incurred by such indemnified person in connection with investigating
        or defending any such action or claim. Notwithstanding the provisions of
        this
        subsection (d), the Investor shall not be required to contribute any amount
        in
        excess of the amount by which the net amount received by the Investor from
        the
        sale of the Shares or Warrant Shares, as the case may be to which such loss
        relates exceeds the amount of any damages which such Investor has otherwise
        been
        required to pay by reason of such Untrue Statement. No person guilty of
        fraudulent misrepresentation (within the meaning of Section 11(f)
        of the
        Securities Act) shall be entitled to contribution from any person who was
        not
        guilty of such fraudulent misrepresentation. The Investor’s obligations in this
        subsection to contribute shall be in proportion to its sale of Shares and
        Warrant Shares to which such loss relates and shall not be joint with any
        other
        Selling Shareholders.

      

      (e) The
        parties to this Agreement hereby acknowledge that they are sophisticated
        business persons who were represented by counsel during the negotiations
        regarding the provisions hereof including, without limitation, the provisions
        of
        this Section 7.3, and are fully informed regarding said provisions.
        They
        further acknowledge that the provisions of this Section 7.3 fairly
        allocate
        the risks in light of the ability of the parties to investigate the Company
        and
        its business in order to assure that adequate disclosure is made in the
        Registration Statement as required by the Securities Act and the Exchange
        Act.
        The parties are advised that federal or state public policy as interpreted
        by
        the courts in certain jurisdictions may be contrary to certain of the provisions
        of this Section 7.3, and the parties hereto hereby expressly waive
        and
        relinquish any right or ability to assert such public policy as a defense
        to a
        claim under this Section 7.3 and further agree not to attempt to assert
        any
        such defense.

      

      7.4 Termination
        of Conditions and Obligations.
        The
        conditions precedent imposed by Section 5 or this Section 7
        upon the
        transferability of the Shares and Warrant Shares shall cease and terminate
        as to
        any particular number of the Shares or Warrant Shares, as the case may be,
        when
        such Shares or Warrant Shares shall have been effectively registered under
        the
        Securities Act and sold or otherwise disposed of in accordance with the intended
        method of disposition set forth in the Registration Statement covering such
        Shares and Warrant Shares or at such time as an opinion of counsel reasonably
        satisfactory to the Company shall have been rendered to the effect that such
        conditions are not necessary in order to comply with the Securities
        Act.

      

      7.5 Information
        Available.
        So long
        as the Registration Statement is effective covering the resale of Shares
        and
        Warrant Shares owned by the Investor, upon the reasonable request of the
        Investor, the Company will furnish to the Investor:

      

      (a) as
        soon
        as practicable after it is available, one copy of (i) its Annual Report
        to
        Stockholders (which Annual Report shall contain financial statements audited
        in
        accordance with generally accepted accounting principles by a national firm
        of
        certified public accountants), (ii) its Annual Report on Form 10-K
        and
        (iii) its Quarterly Reports on Form 10-Q (the foregoing, in
        each case,
        excluding exhibits);

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (b) all
        exhibits excluded by the parenthetical to subparagraph (a) of this
        Section 7.5 as filed with the SEC and all other information that is
        made
        available to shareholders; and

      

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

      

      The
        Investor acknowledges that the Company makes available on its website at
        www.sirna.com a facility through which such Investor may subscribe to
        automatically receive electronic copies of the Company’s future SEC filings and
        press releases by email.

      

      7.6 Legend;
        Restrictions on Transfer.
        The
        Warrant and certificate or certificates for the Shares (and any securities
        issued in respect of or exchange for the Shares or Warrant) shall be subject
        to
        a legend or legends restricting transfer under the Securities Act and referring
        to restrictions on transfer herein, such legend to be substantially as
        follows:

       

      THE
        SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
        ACT
        OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, OR
        HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION
        OF
        COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
        SUCH OFFER, SALE OR TRANSFER OR HYPOTHECATION IS IN COMPLIANCE
        THEREWITH.

      

      The
        Company and the Investor acknowledge and agree that the Investor may, as
        permitted by law, from time to time pledge pursuant to a bona fide margin
        agreement or grant a security interest in some or all of the Shares, Warrant
        and
        Warrant Shares and, if required under the terms of such arrangement, Investor
        may, as permitted by law, transfer pledged or secured Shares, Warrant and
        Warrant Shares to the pledgees or secured parties. So long as Investor is
        not an
        affiliate of the Company, such a pledge or transfer would not be subject
        to
        approval or consent of the Company, provided that, upon the request of the
        Company, a legal opinion of legal counsel to the pledgee, secured party or
        pledgor shall be obtained. At the Investor’s expense, so long as the Shares and
        Warrant are subject to the legend required by this Section 7.6, the Company
        will
        use its reasonable commercial efforts to execute and deliver such reasonable
        documentation as a pledgee or secured party of Shares and Warrant may reasonably
        request in connection with a pledge or transfer of the Shares and Warrant
        including such amendments or supplements to the Registration Statement and
        Prospectus as may be reasonably required. The foregoing does not affect
        Investor’s obligations pursuant to Section 7.2(a).

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      The
        Investor expressly agrees that any sale by the Investor of Shares and Warrant
        Shares pursuant to the Registration Statement shall be sold in a manner
        described under the caption “Plan of Distribution” in such Registration
        Statement and the Investor will deliver a copy of the Prospectus contained
        in
        the Registration Statement to the purchaser or purchasers, directly or through
        the Investor's broker, in connection with such sale, in each case in compliance
        with the requirements of the Securities Act and Exchange Act applicable to
        such
        sale. The Investor further agrees that the Shares and Warrant Shares will
        only
        be sold while the Registration Statement is effective, unless another exemption
        from registration is available. On the basis of, and subject to, compliance
        by
        the Investor with the foregoing covenants, upon effectiveness of the
        Registration Statement, the Company shall as soon as practicable (but not
        later
        than five business days after surrender of the legended certificates to the
        Company and notice of such surrender has been provided pursuant to Section
        8(b)
        below) cause certificates evidencing the Shares and Warrant Shares previously
        issued to be replaced with certificates which do not bear the restrictive
        legends specified above in this Section 7.6, and all Shares and Warrant Shares
        subsequently issued shall not bear the restrictive legend specified above
        in
        this Section 7.6. The Investor acknowledges that the removal of the restrictive
        legends from certificates representing Shares and Warrant Shares as provided
        in
        this Section 7.6 is predicated upon the Company’s reliance on the Investor’s
        compliance with its covenants in this Section 7.6.

      

      7.7 Liquidated
        Damages.
        The
        Company and Investor agree that Investor will suffer damages if the Company
        fails to fulfill its obligations pursuant to Section 7.1 and 7.2 hereof and
        that
        it would not be possible to ascertain the extent of such damages with precision.
        Accordingly, the Company hereby agrees to pay liquidated damages (“Liquidated
        Damages”) to Investor under the following circumstances: (a) if the Registration
        Statement is not filed by the Company on or prior to 15 business days after
        the
        Closing Date (such an event, a “Filing Default”); (b) if the Registration
        Statement is not declared effective by the SEC on or prior to 70 calendar
        days
        or, subject to the filing of the Registration Statement by the Filing Date,
        in
        the event that the
        Registration Statement receives SEC review, 110 clendar days after the Closing
        Date
        (such an
        event, an “Effectiveness Default”); or (c) if the Registration Statement (after
        its effectiveness date) ceases to be effective and available to Investor
        for any
        continuous period that exceeds 30 calendar days or for one or more period
        that
        exceeds in the aggregate 60 calendar days in any 12-month period (such an
        event,
        a “Suspension Default” and together with a Filing Default and an Effectiveness
        Default, a “Registration Default”). In the event of a Registration Default, the
        Company shall as Liquidated Damages pay to Investor, for each 30 calendar
        day
        period of a Registration Default, an amount in cash equal to 1% of the aggregate
        purchase price paid by Investor pursuant to this Agreement up to a maximum
        of
        10% of the aggregate purchase price of the Shares and Warrants, provided
        that
        Liquidation Damages in respect of a Suspension Default shall not be payable
        in
        relation to any Shares or Warrant Shares not owned by the Investor at the
        time
        of the Suspension Default. The Company shall pay the Liquidated Damages as
        follows: (i) in connection with a Filing Default, on the 16th business day
        after
        the Closing Date, and each 30th calendar day thereafter until the Registration
        Statement is filed with the SEC; (ii) in connection with an Effectiveness
        Default, on the 70th calendar day (or, in the event that the
        Registration Statement receives SEC review, the 110th calendar day)
        after
        the Closing Date and each 30th calendar day thereafter until the Registration
        Statement is declared effective by the SEC; or (iii) in connection with a
        Suspension Default, on either (x) the 31st
        consecutive day of any Suspension or (y) the 61st
        calendar
        day (in the aggregate) of any Suspensions in any 12-month period, and each
        30th
        calendar
        day thereafter until the Suspension is terminated in accordance with Section
        7.2. Notwithstanding the foregoing, all periods shall be tolled during delays
        directly caused by the action or inaction of any Investor, and the Company
        shall
        have no liability to any Investor in respect of any such delay. The Liquidated
        Damages payable herein shall apply on a pro rata basis for any portion of
        a
        30-day period of a Registration Default.

      

      7.8 Right
        of First Offer.

      

      (a) Right
        of First Offer.
        The
        Company shall not issue, sell or exchange, agree or obligate itself to issue,
        sell or exchange, or reserve or set aside for issuance, sale or exchange,
        in a
        transaction not involving a public offering, any (i) shares of Common
        Stock, (ii) any other equity security of the Company, including without
        limitation, preferred shares, (iii) any debt security of the Company
        which
        by its terms is convertible into or exchangeable for any equity security
        of the
        Company, (iv) any security of the Company that is a combination of
        debt and
        equity, or (v) any option, warrant or other right to subscribe for,
        purchase or otherwise acquire any such equity security or any such debt security
        of the Company, unless in each case the Company shall have first offered
        to sell
        such securities (the “Offered Securities”) to the Investor as follows: The
        Investor shall have the right to purchase that portion of the Offered Securities
        as the number of shares of Common Stock then held (including shares then
        issuable upon the exercise or conversion of outstanding securities) by the
        Investor bears to the total number of shares of issued and outstanding Common
        Stock of the Company (“Pro Rata Portion”), at a price and on such other terms as
        shall have been specified by the Company in writing delivered to the Investor
        (the “Offer”), which Offer by its terms shall remain open and irrevocable for a
        period of seven (7) days from receipt of the Offer. 

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (b) Notice
        of Acceptance.
        Notice
        of the Investor’s intention to accept, in whole or in part, any Offer made shall
        be evidenced by a writing signed by the Investor and delivered to the Company
        prior to the end of the 7-day period of such Offer, setting forth such of
        the
        Investor’s Pro Rata Portion as the Investor elects to purchase (the “Notice of
        Acceptance”). 

      

      (c) Conditions
        to Acceptances and Purchase.
        

      

      (i) Permitted
        Sales of Refused Securities.
        In the
        event that Notices of Acceptance are not given by the Investors in respect
        of
        all the Offered Securities, the Company shall have one hundred eighty (180)
        days
        from the expiration of the period set forth above to close the sale of all
        or
        any part of such Offered Securities as to which a Notice of Acceptance has
        not
        been given by the Investors (the “Refused Securities”), upon terms and
        conditions, including, without limitation, unit price and interest rates,
        which
        are no more favorable, in the aggregate, to such other person or persons
        or less
        favorable to the Company than those set forth in the Offer. 

      

      (ii) Reduction
        in Amount of Offered Securities.
        In the
        event the Company shall propose to sell less than all the Refused Securities
        (any such sale to be in the manner and on the terms specified above), then
        the
        Investor may, at its sole option and in its sole discretion, reduce the number
        of, or other units of the Offered Securities specified in its Notice of
        Acceptance to an amount which shall be not less than the amount of the Offered
        Securities which the Investor elected to purchase pursuant to (b) above
        multiplied by a fraction, (i) the numerator of which shall be the
        amount of
        Offered Securities which the Company actually proposes to sell, and
        (ii) the denominator of which shall be the amount of all Offered Securities
        the Company proposed to sell in its writing delivered pursuant to Section
        7.8(a)
        above. In the event that the Investor so elects to reduce the number or amount
        of Offered Securities specified in its Notice of Acceptance, the Company
        may not
        sell or otherwise dispose of more than the reduced amount of the Offered
        Securities until such securities have again been offered to the Investor
        in
        accordance with (a) above. 

      

      (iii)
         Closing.
        Upon
        the closing, which shall include full payment to the Company, of the sale
        to
        such other person or persons of all or less than all the Refused Securities,
        the
        Investor shall purchase from the Company, and the Company shall sell to the
        Investor, the number of Offered Securities specified in the Notice of
        Acceptance, as reduced pursuant to Section 7.8(b) above if the Investor has
        so
        elected, upon the terms and conditions specified in the Offer. The purchase
        by
        the Investor of any Offered Securities is subject in all cases to the
        preparation, execution and delivery by the Company and the Investor of a
        purchase agreement relating to such Offered Securities reasonably satisfactory
        in form and substance to the Company and the Investor and their respective
        counsel. 

      

      (d) Further
        Sale.
        In each
        case, any Offered Securities not purchased by the Investor or other person
        or
        persons in accordance with Section 7.8(c)(iii) above may not be sold or
        otherwise disposed of until they are again offered to the Investor under
        the
        procedures specified in Section 7.8(c)(i)-(iii) above. 

      

      (e) Exceptions.
        The
        rights of the Investor under this Section 7.8 shall not apply to: (i) Common
        Stock issued as a stock dividend to holders of Common Stock or upon any
        subdivision or combination of shares of Common Stock; (ii) any capital stock
        or
        derivative thereof granted to an employee, director or consultant under a
        Company stock or stock option plan or as compensation for services; (iii)
        any
        securities issued as consideration for the acquisition of another entity
        by the
        Company by merger or share exchange (whereby the Company owns no less than
        51%
        of the voting power of the surviving entity) or as the purchase price of
        substantially all of such entity’s stock or assets; (iv) any securities issued
        in connection with a license, strategic partnership, joint venture or other
        similar agreement, provided that the purpose of such arrangement is not
        primarily the raising of capital; (v) any securities issued to a financial
        institution or lender in connection with a bank loan, credit, lease, or other
        debt transaction with such financial institution or lender; (vi) securities
        issuable upon the exercise or conversion of securities outstanding on the
        Closing Date, or (vii) any securities the issuance of which is approved by
        a
        majority of the Investors.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (f) Termination
        of Right.
        The
        Right of First Refusal set forth in this Section 7.8 shall survive for a
        period
        of one year following the Closing Date.

      

      7.9 Stockholder
        Meeting.
        The
        Company covenants and agrees to hold a stockholder meeting to approve (i)
        the
        participation of any Affiliate Investors and (ii) the sale of the Excess
        Amount
        as soon as practicable but in no event later than sixty (60) days following
        the
        Closing Date (subject to any delays caused by the receipt of SEC comments
        on the
        Company's proxy statement for such stockholder meeting). Each Affiliate Investor
        who beneficially owns or controls the voting of shares of the Company's common
        stock, including each such officer, director or affiliate, hereby covenants
        and
        agrees to vote all such shares of common stock in favor of approval of the
        transactions contemplated by this Agreement pursuant to the form of voting
        agreement attached hereto as Exhibit
        C.
        The
        Company covenants and agrees that (i) it will not amend or terminate any
        such
        proxies and (ii) it shall vote all shares of common stock over which holds
        a
        proxy in favor of approval of the transactions contemplated by this Agreement.
        Each signatory to this Agreement hereby acknowledges and agrees that all
        covenants made in this Section 7.9 are made for the benefit of all Investors
        not
        parties to this Agreement, in each case as a third-party
        beneficiary.

      

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

      

      
        	
              	(a)	
                if
                  to the Company, to:

              

      

      

      Sirna
        Therapeutics, Inc.

      185
        Berry
        Street

      Suite
        6504

      San
        Francisco, CA 94107

      Phone:
        (415) 512-7624

      Fax:
        (415) 512-7022

      Attn:
        Bharat Chowrira

      Email:
        ChowriraB@sirna.com

      

      

      
        	
              	(b)	
                with
                  a copy to:

              

      

      

      O’Melveny
        & Myers LLP 

      2765
        Sand
        Hill Road

      Menlo
        Park, CA 94025

      Phone: (650)
        473-2600

      Fax:
        (650) 473-2674

      Attn:
        Sam
        Zucker and Helena Wong

      Email:
        SZucker@omm.com, HWong@omm.com

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
              	(c)	
                if
                  to the Investor, at its address on the signature page hereto, or
                  at such
                  other address or addresses as may have been furnished to the Company
                  in
                  writing (subject to the provisions of Section 19 of this
                  Agreement).

              

      

      

      9. Changes.
        This
        Agreement may be modified, amended or waived only pursuant to a written
        instrument signed by the Company and (a) Investors holding a majority of
        the
        Shares issued and sold in the Offering, provided
        that
        such
        modification, amendment or waiver is made with respect to all Agreements
        and
        does not adversely affect the Investor without adversely affecting all Investors
        in a similar manner; or (b) the Investor.

      

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

      

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

      

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

      

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

      

      14. Entire
        Agreement.
        This
        Agreement and the Warrant constitute the entire agreement between the parties
        hereto and supersedes any prior understandings or agreements concerning the
        purchase and sale of the Shares and the Warrant and the resale registration
        of
        the Shares and Warrant Shares.

      

      15. Rule
        144.
        The
        Company covenants that it will use its reasonable commercial efforts to timely
        file the reports required to be filed by it under the Securities Act and
        the
        Exchange Act and the rules and regulations adopted by the SEC thereunder
        (or, if
        the Company is not required to file such reports, it will, upon the request
        of
        any Investor holding Shares purchased hereunder, or Warrant Shares purchase
        under any Warrant, made after the first anniversary of the Closing Date,
        make
        publicly available such information as necessary to permit sales pursuant
        to
        Rule 144 under the Securities Act), and it will take such further action
        as any
        such Investor may reasonably request, all to the extent required from time
        to
        time to enable such Investor to sell such Shares and Warrant Shares without
        registration under the Securities Act within the limitation of the exemptions
        provided by (a) Rule 144 under the Securities Act, as such Rule may be amended
        from time to time, or (b) any similar rule or regulation hereafter adopted
        by
        the SEC. Upon the request of the Investor, the Company will deliver to such
        holder a written statement as to whether it has complied with such information
        and requirements.

      

      16. Confidential
        Information.
        

      

      (a) The
        Investor represents to the Company that, at all times during the Company’s
        offering of the Shares and Warrants, the Investor has maintained in confidence
        all non-public information regarding the Company received by the Investor
        from
        the Company or its agents, and covenants that it will continue to maintain
        in
        confidence such information until such information (a) becomes generally
        publicly available other than through a violation of this provision by the
        Investor or its agents or (b) is required to be disclosed in legal
        proceedings (such as by deposition, interrogatory, request for documents,
        subpoena, civil investigation demand, filing with any governmental authority
        or
        similar process), provided, however, that before making any use or disclosure
        in
        reliance on this subparagraph (b) the Investor shall give the Company prior
        written notice specifying the circumstances giving rise thereto and will
        furnish
        only that portion of the non-public information which is legally required
        and
        will allow the Company to exercise its reasonable commercial efforts to obtain
        reliable assurance that confidential treatment will be accorded any non-public
        information so furnished.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (b) Within
        one (1) business day after the Subscription Date (as defined in Section 2.2),
        the Company shall issue a press release and Form 8-K disclosing any information
        provided by the Company or any person acting on its behalf that the Company
        believes constitutes material and non-public information. The Company shall,
        at
        the time of the Closing, file with the SEC a Form 8-K disclosing the material
        terms of the transactions contemplated hereby (including at least the number
        of
        Shares and Warrants sold and proceeds therefrom). The Company shall not publicly
        disclose the name of Investor or any beneficial owner of Shares or Warrants
        held
        by Investor, or include the name of Investor or such beneficial owner in
        any
        filing with the SEC or any state and federal regulatory agency or the Nasdaq
        (other than the filing of the Agreements with the SEC pursuant to the Exchange
        Act), without the prior written consent of Investor, except to the extent
        such
        disclosure is required by law, regulation or Nasdaq regulations.

      

      17. No
        Third-Party Beneficiaries.
        Other
        than as set forth in Section 7.9 above, this Agreement is intended for the
        benefit of the parties hereto and their respective successors and permitted
        assigns and is not for the benefit of, nor may any provision hereof be enforced
        by, any other person.

      

      18. Knowledge.
        The
        term “knowledge” in this Agreement shall mean the knowledge of the directors and
        officers of the Company.

      

      19. Delivery
        of Documents, Information or Notices to Investors.
        Notwithstanding anything in this Agreement to the contrary, (a) the Company
        may
        deliver any documents, information or notices required to be delivered to
        an
        Investor under this Agreement by email, in any recognized electronic format,
        including Portable Document Format (PDF) or Microsoft Word document format,
        and
        (b) with respect to any documents, exhibits, filings, furnishings or other
        submissions (other than any Registration Statement, Prospectus, or Preliminary
        Prospectus pursuant to Section 7 of this Agreement) publicly available on
        the
        SEC’s EDGAR system (each, an “EDGAR Filing”), such EDGAR Filing shall be deemed
        furnished by the Company to such Investor, in each case as of the date first
        publicly available on the EDGAR system.

      

      20. No
        Strict Construction.
        The
        language used in this Agreement is deemed to be the language chosen by the
        parties to express their mutual intent, and no rules of strict construction
        will
        be applied against any party.

      

      21. Broker’s
        Fee.
        The
        Investor acknowledges that the Company intends to pay fees to the Placement
        Agent and the co-advisors in respect of the sale of the Shares to the Investor.
        The Investor and the Company hereby agree that the Investor shall not be
        responsible for such fees.THE
        WARRANT AND THE SHARES OF COMMON STOCK REPRESENTED HEREBY HAVE NOT BEEN
        REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED,
        SOLD OR OTHERWISE TRANSFERRED, OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
        UNDER
        THE ACT OR, IN THE OPINION OF COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY
        TO THE
        ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER OR HYPOTHECATION
        IS IN
        COMPLIANCE THEREWITH.

       

      SIRNA
        THERAPEUTICS, INC.

       

      WARRANT
        TO PURCHASE _________ SHARES

       

      OF
        COMMON STOCK

       

      Warrant
        No. W-[ ]

       

      THIS
        CERTIFIES THAT, for value received, __________________________
        and its
        assigns are entitled to subscribe for and purchase __________
        shares
        (as adjusted pursuant to Section 4 hereof, the "Shares")
        of the
        fully paid and nonassessable common stock, par value $0.01 per share
        ("Common
        Stock"),
        of
        Sirna Therapeutics, Inc., a Delaware corporation (the "Company"),
        at
        the price of $1.92 per share (such price and such other price as shall result,
        from time to time, from the adjustments specified in Section 4 hereof is
        herein
        referred to as the "Warrant
        Price"),
        subject to the provisions and upon the terms and conditions set forth herein
        and
        in the Securities Purchase Agreement, dated as of even date herewith, by
        and
        among the Company and the initial holder of this Warrant (the “Securities
        Purchase Agreement”).
        As
        used herein, the term "Date
        of Grant"
        means
        July __,
        2005.
        As
        used herein, the term "Warrant" shall be deemed to include any warrants issued
        in exchange or upon transfer or partial exercise of this Warrant unless the
        context clearly requires otherwise. 

      

      1. Term.
        The
        purchase right represented by this Warrant is exercisable, in whole or in
        part,
        at any time and from time to time from the six-month anniversary of the Date
        of
        Grant through July __, 2010.

       

      2. Method
        of Exercise; Payment; Issuance of New Warrant.
        

       

      (a) Subject
        to Section 1 hereof, the purchase right represented by this Warrant may be
        exercised by the holder hereof, in whole or in part and from time to time,
        at
        the election of the holder hereof, by (x) the surrender of this Warrant (with
        the notice of exercise substantially in the form attached hereto as Exhibit A-1
        duly
        completed and executed) at the principal office of the Company and by the
        payment to the Company, by certified or bank check, or by wire transfer to
        an
        account designated by the Company ("Wire
        Transfer")
        of an
        amount equal to the then applicable Warrant Price multiplied by the number
        of
        Shares then being purchased or (y) if in connection with a registered public
        offering of the Company's securities, the surrender of this Warrant (with
        the
        notice of exercise form attached hereto as Exhibit A-2
        duly
        completed and executed) at the principal office of the Company together with
        notice of arrangements reasonably satisfactory to the Company for payment
        to the
        Company either by certified or bank check or by Wire Transfer from the proceeds
        of the sale of shares to be sold by the holder in such public offering of
        an
        amount equal to the then applicable Warrant Price per share multiplied by
        the
        number of Shares then being purchased. The person or persons in whose name(s)
        any certificate(s) representing the Shares shall be issuable upon exercise
        of
        this Warrant shall be deemed to have become the holder(s) of record of, and
        shall be treated for all purposes as the record holder(s) of, the Shares
        represented thereby (and such Shares shall be deemed to have been issued)
        immediately prior to the close of business on the date or dates upon which
        this
        Warrant is exercised. As soon as practicable after the exercise of this Warrant
        and in any event within three trading days thereafter, upon the terms and
        subject to the conditions of this Warrant, the Company at its expense will
        cause
        to be issued in the name of and delivered to the holder, or as the holder
        may
        direct to a broker or other persons, a certificate or certificates for the
        number of Shares to which the holder shall be entitled on such exercise,
        in such
        denominations as may be requested by the holder.  In
        lieu
        of delivering physical certificates for the Shares issuable upon any exercise
        of
        this Warrant, provided the Company’s transfer agent is participating in the
        Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”)
        program, and that any legend upon the certificates for the Shares shall have
        been removed pursuant to Section 7 below, upon request of the holder, the
        Company shall use commercially reasonable efforts to cause its transfer agent
        electronically to transmit such Shares by crediting the account of the holder’s
        broker with DTC through its Deposit Withdrawal Agent Commission system (provided
        that the same time limitations herein as for stock certificates shall
        apply).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (b) On
        and
        after the Required Effective Date of the Registration Statement (as defined
        in
        the Securities Purchase Agreement) through the Term of this Warrant, at any
        time
        that the Registration Statement or a successor registration statement is
        not
        effective, in lieu of exercising this Warrant for cash, the holder may elect
        to
        receive shares equal to the value of this Warrant (or the portion thereof
        being
        exercised) by surrender of this Warrant at the principal office of the Company
        together with notice of such election substantially in the form attached
        hereto
        as Exhibit
        A-1
        duly
        completed and executed (“Net
        Exercise”).
        The
        Company shall issue to a holder who Net Exercises a number of Warrant Shares
        computed using the following formula:

       

      
        	 	 	
                Y
                  (A - B)

              
	
                X
                  =

              	 	
                A

              

      

       

      Where

      

      
        	 	
                X
                  =

              	
                The
                  number of Warrant Shares to be issued to the
                  holder.

              

      

      

      
        	 	
                Y
                  =

              	
                The
                  number of Warrant Shares purchasable under this Warrant or, if
                  only a
                  portion of the Warrant is being exercised, the portion of the Warrant
                  being cancelled (at the date of such
                  calculation).

              

      

      

      
        
          	 	
                  A
                    =

                	
                  The
                    fair market value of one (1) Warrant Share (at the date of such
                    calculation).

                

        

        
          	 	 	 

        

        
          	 	B =	The Warrant Price (as adjusted to the date of
                  such
                  calculation (the “Determination
                  Date”)).

        

      

       

       

      
        
          
          

        

        
          -
            2
            -

          
            

          

        

        
          
          

        

      

      

      For
        purposes of this Section 2, the fair market value of a Warrant Share
        shall
        mean:

      

      
        	 	
                (i)

              	
                If
                  traded on a securities exchange, the Nasdaq National Market or
                  Nasdaq
                  SmallCap Market, the fair market value of the Common Stock shall
                  be deemed
                  to be the average of the closing prices of the Common Stock on
                  such
                  exchange or market over the five trading days immediately prior
                  to the
                  Determination Date;

              

      

       

      
        	 	
                (ii)

              	
                If
                  traded on the Nasdaq Stock Market (other than the Nasdaq National
                  Market
                  or Nasdaq SmallCap Market) or other over-the-counter system, the
                  fair
                  market value of the Common Stock shall be deemed to be the average
                  of the
                  closing bid prices of the Common Stock over the five trading days
                  immediately prior to the Determination Date;
                  and

              

      

       

      (iii) If
        there
        is no public market for the Common Stock, the fair market value shall be
        the
        price per Warrant Share that the Company could obtain from a willing buyer
        for
        Warrant Shares sold by the Company from authorized but unissued Warrant Shares,
        as such prices shall be determined in good faith by the Company’s Board of
        Directors.

      

      In
        the
        event that this Warrant is exercised pursuant to this Section 2 in
        connection with the consummation of the Company’s sale of its Common Stock or
        other securities pursuant to a registration statement under the Securities
        Act
        of 1933, as amended (other than a registration statement relating either
        to sale
        of securities to employees of the Company pursuant to its stock option, stock
        purchase or similar plan or a Rule 145 transaction) (“Public
        Offering”),
        the
        fair market value per Warrant Share shall be the per share offering price
        to the
        public of the Public Offering.

       

      3. Stock
        Fully Paid; Reservation of Shares.
        All
        Shares that may be issued upon the exercise of the rights represented by
        this
        Warrant will, upon issuance pursuant to the terms and conditions herein,
        be
        fully paid and nonassessable, and free from all taxes, liens and charges
        with
        respect to the issue thereof. During the period within which the rights
        represented by this Warrant may be exercised, the Company will at all times
        have
        authorized, and reserved for the purpose of the issue upon exercise of the
        purchase rights evidenced by this Warrant, a sufficient number of shares
        of its
        Common Stock to provide for the exercise of the rights represented by this
        Warrant.

       

      4. Adjustment
        of Warrant Price and Number of Shares.
        The
        number and kind of securities purchasable upon the exercise of this Warrant
        and
        the Warrant Price shall be subject to adjustment from time to time upon the
        occurrence of certain events, as follows:

       

      
        
          
          

        

        
          -
            3
            -

          
            

          

        

        
          
          

        

         

      

      (a) Fundamental
        Transaction.
        If, at
        any time while this Warrant is outstanding, (A) the Company effects any merger
        or consolidation of the Company with or into another entity, (B) the Company
        effects any sale of all or substantially all of its assets in one or a series
        of
        related transactions, (C) any tender offer or exchange offer (whether by
        the
        Company or another person or entity) is completed pursuant to which holders
        of
        Common Stock are permitted to tender or exchange their shares for other
        securities, cash or property, or (D) the Company effects any reclassification
        of
        the Common Stock or any compulsory share exchange pursuant to which the Common
        Stock is effectively converted into or exchanged for other securities, cash
        or
        property (in any such case, a “Fundamental
        Transaction”),
        then,
        upon any subsequent exercise of this Warrant, the holder shall have the right
        to
        receive, for each Share that would have been issuable upon such exercise
        immediately prior to the occurrence of such Fundamental Transaction, at the
        option of the holder, (a) upon exercise of this Warrant, the number of shares
        of
        Common Stock of the successor or acquiring corporation or of the Company,
        if it
        is the surviving corporation, and any additional consideration (the
“Alternate
        Consideration”)
        receivable upon or as a result of such reorganization, reclassification,
        merger,
        consolidation or disposition of assets by a holder of the number of Shares
        for
        which this Warrant is exercisable immediately prior to such event or (b)
        if the
        Company is acquired in an all cash transaction, cash equal to the value of
        this
        Warrant as determined in accordance with the Black-Scholes Pricing Model
        (as
        hereafter defined). For purposes of any such exercise, the determination
        of the
        Warrant Price shall be appropriately adjusted to apply to such Alternate
        Consideration based on the amount of Alternate Consideration issuable in
        respect
        of one share of Common Stock in such Fundamental Transaction, and the Company
        shall apportion the Warrant Price among the Alternate Consideration in a
        reasonable manner reflecting the relative value of any different components
        of
        the Alternate Consideration. If holders of Common Stock are given any choice
        as
        to the securities, cash or property to be received in a Fundamental Transaction,
        then the holder shall be given the same choice as to the Alternate Consideration
        it receives upon any exercise of this Warrant following such Fundamental
        Transaction. To the extent necessary to effectuate the foregoing provisions,
        any
        successor to the Company or surviving entity in such Fundamental Transaction
        shall issue to the holder a new warrant consistent with the foregoing provisions
        and evidencing the holder’s right to exercise such warrant into Alternate
        Consideration; provided that this Warrant shall have been cancelled or amended
        to the extent such cancellation or amendment is necessary so that such new
        warrant does not unjustly or disproportionately enrich the holder of the
        new
        warrant relative to a holder of the number of Shares for which this Warrant
        is
        exercisable immediately prior to such event. The terms of any agreement pursuant
        to which a Fundamental Transaction is effected shall include terms requiring
        any
        such successor or surviving entity to comply with the provisions of this
        Section
        4(a) and insuring that this Warrant (or any such replacement security) will
        be
        similarly adjusted upon any subsequent transaction analogous to a Fundamental
        Transaction. For purposes hereof, “Black Scholes Pricing Model” means the value
        determined using the Black Scholes pricing model and employing an interest
        rate
        equal to 30 day LIBOR on the day prior to valuation and a volatility equal
        to
        the volatility of the Common Stock for the 30 trading days prior to the date
        of
        valuation as reasonably determined by the Board of Directors; provided that
        if
        the holder disagrees with such volatility, the Company and the holder shall
        jointly select an appraiser who is experienced in such matters and the decision
        of such appraiser shall be final and conclusive, and the cost of such appraiser
        shall be borne by the Company.

       

      
        
          
          

        

        
          -
            4
            -

          
            

          

        

        
          
          

        

         

      

      (b) Subdivision
        or Combination of Shares.
        If the
        Company at any time while this Warrant remains outstanding and unexpired
        shall
        subdivide or combine its outstanding shares of Common Stock, the Warrant
        Price
        shall be proportionately decreased and the number of Shares issuable hereunder
        shall be proportionately increased in the case of a subdivision or the Warrant
        Price shall be proportionately increased and the number of Shares issuable
        hereunder shall be proportionately decreased in the case of a
        combination.

       

      (c) Stock
        Dividends and Other Distributions.
        If the
        Company at any time while this Warrant is outstanding and unexpired shall
        pay a
        dividend or make a distribution to all of its stockholders with respect to
        its
        Common Stock payable in Common Stock, then the Warrant Price shall be adjusted,
        from and after the date of determination of stockholders entitled to receive
        such dividend or distribution, to that price determined by multiplying the
        Warrant Price in effect immediately prior to such date of determination by
        a
        fraction (A) the numerator of which shall be the total number of shares of
        Common Stock outstanding immediately prior to such dividend or distribution,
        and
        (B) the denominator of which shall be the total number of shares of Common
        Stock
        outstanding immediately after such dividend or distribution. If the Company
        at
        any time while this Warrant is outstanding and unexpired shall pay a dividend
        or
        make a distribution to all of its stockholders with respect to its Common
        Stock,
        any (i) cash (excluding cash dividends payable solely out of earnings or
        earned
        surplus of the Company) or (ii) additional stock, rights, warrants or other
        securities or property (other than cash) by way of dividend, other than
        additional shares of Common Stock, then and in each such case the holder,
        on the
        exercise hereof as provided in Section 2, shall be entitled to receive the
        amount of stock, rights, warrants and property (including cash in the case
        referred to in subdivision (i) above) which the holder would hold on the
        date of
        such exercise if on the date of such action (or the record date therefor)
        the
        holder had been the holder of record of the number of shares of Common Stock
        for
        which this Warrant is exercisable as provided in Section 2 and had thereafter,
        during the period from the date thereof to and including the date of such
        exercise, retained such shares and all such other or additional stock, rights,
        warrants and property (including cash in the case referred to in subdivision
        (i)
        above) receivable by the holder as aforesaid during such period.

       

      (d) Deregistration
        or Delisting.
        In the
        event that the shares of the Company’s Common Stock are (i) terminated from
        registration under the Securities Act of 1933, as amended (the "Act")
        during
        the time in which the Company remains obligated under Section 7.1(c) of the
        Securities Purchase Agreement to keep the Registration Statement (as defined
        in
        the Securities Purchase Agreement) current, effective and free from any material
        misstatement or omission to state a material fact or (ii) delisted from the
        Nasdaq National Market, the Warrant Price then in effect at the time of such
        deregistration or delisting shall be reduced to $1.67 per share (subject
        to
        adjustment in accordance with this Section 4).

       

      (e) Adjustment
        of Number of Shares.
        Upon
        each adjustment in the Warrant Price, the number of Shares purchasable hereunder
        shall be adjusted, to the nearest whole share, to the product obtained by
        multiplying the number of Shares purchasable immediately prior to such
        adjustment in the Warrant Price by a fraction, the numerator of which shall
        be
        the Warrant Price immediately prior to such adjustment and the denominator
        of
        which shall be the Warrant Price immediately thereafter.

       

      
        
          
          

        

        
          -
            5
            -

          
            

          

        

        
          
          

        

         

      

      5. Notice
        of Adjustments.
        Whenever the Warrant Price or the number of Shares purchasable hereunder
        shall
        be adjusted pursuant to Section 4 hereof, the Company shall make a certificate
        signed by its chief executive officer, chief financial officer or any vice
        president setting forth, in reasonable detail, the event requiring the
        adjustment, the amount of the adjustment, the method by which such adjustment
        was calculated, and the Warrant Price and the number of Shares purchasable
        hereunder after giving effect to such adjustment, and shall cause copies
        of such
        certificate to be mailed (without regard to Section 13 hereof, by first class
        mail, postage prepaid) to the holder of this Warrant.

       

      6. Fractional
        Shares.
        No
        fractional shares of Common Stock will be issued in connection with any exercise
        hereunder, but in lieu of such fractional shares the Company shall make a
        cash
        payment therefor based on the fair market value of the Common Stock on the
        date
        of exercise as determined pursuant to the penultimate sentence of Section
        2(b)
        above.

       

      7. Compliance
        with Securities Act; Disposition of Warrant or Shares of Common
        Stock.

       

      (a) Compliance
        with Securities Act.
        The
        holder of this Warrant, by acceptance hereof, agrees that such holder will
        not
        offer, sell or otherwise dispose of this Warrant, or any Shares except under
        circumstances which will not result in a violation of the Act or any applicable
        state securities laws. Upon exercise of this Warrant, unless the Shares being
        acquired are registered under the Act and any applicable state securities
        laws
        or an exemption from such registration is available, the holder hereof shall
        confirm in writing that the Shares so purchased are not being acquired with
        a
        view toward distribution or resale in violation of the Act and shall confirm
        such other matters related thereto as may be reasonably requested by the
        Company. This Warrant and all Shares issued upon exercise of this Warrant
        (unless registered under the Act and any applicable state securities laws)
        shall
        be stamped or imprinted with a legend in substantially the following
        form:

       

      "THE
        WARRANT AND THE SHARES OF COMMON STOCK REPRESENTED HEREBY HAVE NOT BEEN
        REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED,
        SOLD OR OTHERWISE TRANSFERRED, OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
        UNDER
        THE ACT OR, IN THE OPINION OF COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY
        TO THE
        ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER OR HYPOTHECATION
        IS IN
        COMPLIANCE THEREWITH."

       

      Said
        legend shall be removed by the Company, upon the request of a holder, at
        such
        time as the restrictions on the transfer of the applicable security shall
        have
        terminated. In addition, in connection with the issuance of this Warrant,
        the
        holder specifically represents to the Company by acceptance of this Warrant
        as
        follows:

       

      
        
          
          

        

        
          -
            6
            -

          
            

          

        

        
          
          

        

         

      

      (1) The
        holder is aware of the Company's business affairs and financial condition,
        and
        has acquired information about the Company sufficient to reach an informed
        and
        knowledgeable decision to acquire this Warrant. The holder is acquiring this
        Warrant for its own account and not with a view to, or for the resale in
        connection with, any "distribution" thereof in violation of the
        Act.

       

      (2) The
        holder understands that this Warrant has not been registered under the Act
        in
        reliance upon a specific exemption therefrom, which exemption depends upon,
        among other things, the bona fide nature of the holder's investment as expressed
        herein.

       

      (3) The
        holder further understands that this Warrant must be held indefinitely unless
        subsequently registered under the Act and qualified under any applicable
        state
        securities laws, or unless exemptions from registration and qualification
        are
        otherwise available. The holder is aware of the provisions of Rule 144,
        promulgated under the Act.

       

      (4) The
        holder is an "accredited investor" as such term is defined in Rule 501 of
        Regulation D promulgated under the Act.

       

      (b) Disposition
        of Warrant or Shares.
        With
        respect to any offer, sale or other disposition of this Warrant or any Shares
        acquired pursuant to the exercise of this Warrant prior to registration of
        such
        Warrant or Shares, the holder hereof agrees to give written notice to the
        Company prior thereto, describing briefly the manner thereof, together with
        a
        written opinion of such holder's counsel, or other evidence reasonably
        satisfactory to the Company, to the effect that such offer, sale or other
        disposition may be effected without registration or qualification (under
        the Act
        as then in effect or any federal or state securities law then in effect)
        of this
        Warrant or the Shares and indicating whether or not under the Act certificates
        for this Warrant or the Shares to be sold or otherwise disposed of require
        any
        restrictive legend as to applicable restrictions on transferability in order
        to
        ensure compliance with such law. Upon receiving such written notice and
        reasonably satisfactory opinion or other evidence, the Company, as promptly
        as
        practicable but no later than fifteen (15) days after receipt of the written
        notice, shall notify such holder that such holder may sell or otherwise dispose
        of this Warrant or such Shares, all in accordance with the terms of the notice
        delivered to the Company. If a determination has been made pursuant to this
        Section 7(b) that the opinion of counsel for the holder or other evidence
        is not
        reasonably satisfactory to the Company, the Company shall so notify the holder
        promptly with details thereof after such determination has been made.
        Notwithstanding the foregoing, this Warrant or such Shares may, as to such
        federal laws, be offered, sold or otherwise disposed of in accordance with
        Rule
        144 or 144A under the Act, provided that the Company shall have been furnished
        with such information as the Company may reasonably request to provide a
        reasonable assurance that the provisions of Rule 144 or 144A have been
        satisfied. Each certificate representing this Warrant or the Shares thus
        transferred (except a transfer pursuant to Rule 144) shall bear a legend
        as to
        the applicable restrictions on transferability in order to ensure compliance
        with such laws, unless in the aforesaid opinion of counsel for the holder,
        such
        legend is not required in order to ensure compliance with such laws. The
        Company
        may issue stop transfer instructions to its transfer agent in connection
        with
        such restrictions.

       

      
        
          
          

        

        
          -
            7
            -

          
            

          

        

        
          
          

        

         

      

      (c) Applicability
        of Restrictions.
        Neither
        any restrictions of any legend described in this Warrant nor the requirements
        of
        Section 7(b) above shall apply to any transfer or grant of a security interest
        in, this Warrant (or the shares of Common Stock obtainable upon exercise
        thereof) or any part hereof (i) to a partner of the holder if the
        holder is
        a partnership or to a member of the holder if the holder is a limited liability
        company, (ii) to a partnership of which the holder is a partner or
        a
        limited liability company of which the holder is a member, or (iii) to
        any
        affiliate of the holder if the holder is a corporation; provided, however,
        in
        any such transfer, if applicable, the transferee shall on the Company's request
        agree in writing to be bound by the terms of this Warrant as if an original
        holder hereof.

       

      8. Rights
        as Stockholders.
        No
        holder of this Warrant, as such, shall be entitled to vote or receive dividends
        or be deemed the holder of Common Stock or any other securities which may
        at any
        time be issuable on the exercise hereof for any purpose, nor shall anything
        contained herein be construed to confer upon the holder of this Warrant,
        as
        such, any of the rights of a stockholder of the Company or any right to vote
        for
        the election of directors or upon any matter submitted to stockholders at
        any
        meeting thereof, or to receive notice of meetings, or to receive dividends
        or
        subscription rights or otherwise until this Warrant shall have been exercised
        and the Shares purchasable upon the exercise hereof shall have become
        deliverable, as provided herein.

       

      9. Registration
        Rights.
        The
        Company grants registration rights to the holder of this Warrant for any
        shares
        of Common Stock of the Company obtained upon exercise hereof as set forth
        in the
        Securities Purchase Agreement.

       

      10. Mergers.
        The
        Company shall provide the holder of this Warrant with at least twenty (20)
        days'
        written notice prior to the closing thereof of the terms and conditions of
        any
        of the following transactions: (i) the sale, lease, exchange, conveyance
        or
        other disposition of all or substantially all of the Company's property or
        business or (ii) its merger into or consolidation with any other
        corporation in which the Company is not the surviving entity (other than
        a
        wholly-owned subsidiary of the Company) or (iii) any transaction (including
        a merger or other reorganization) or series of related transactions, in which
        more than 50% of the voting power of the Company is disposed of; provided,
        however, that in each case the Company shall not provide the holder or its
        agents or counsel with any information that constitutes or would reasonably
        be
        expected to constitute material, non-public information and the Company shall
        confirm the foregoing in such notice.

       

      11. Representations
        and Warranties.
        The
        Company represents and warrants to the holder of this Warrant as
        follows:

       

      (a) This
        Warrant has been duly authorized and executed by the Company and is a valid
        and
        binding obligation of the Company enforceable in accordance with its terms,
        subject to laws of general application relating to bankruptcy, insolvency,
        moratorium, reorganization and the relief of debtors and the rules of law
        or
        principles at equity governing specific performance, injunctive relief and
        other
        equitable remedies (regardless of whether enforcement is sought in equity
        or at
        law);

       

      
        
          
          

        

        
          -
            8
            -

          
            

          

        

        
          
          

        

         

      

      (b) The
        Shares have been duly authorized and reserved for issuance by the Company
        and,
        when issued in accordance with the terms hereof will be validly issued, fully
        paid and non-assessable;

       

      (c) The
        execution and delivery of this Warrant are not, and the issuance of the Shares
        upon exercise of this Warrant in accordance with the terms hereof will not
        be,
        inconsistent with the Company's certificate of incorporation or by-laws,
        do not
        and will not contravene any law, governmental rule or regulation, judgment
        or
        order applicable to the Company, and do not and will not conflict with or
        contravene any provision of, or constitute a default under, any material
        indenture, mortgage, contract or other instrument of which the Company is
        a
        party or by which it is bound or require the consent or approval of, the
        giving
        of notice to, the registration or filing with or the taking of any action
        in
        respect of or by, any Federal, state or local government authority or agency
        or
        other person, except for the filing of notices pursuant to federal and state
        securities laws, which filings will be effected by the time required thereby;
        and

       

      (d) There
        are
        no actions, suits, audits, investigations or proceedings pending or, to the
        knowledge of the Company, threatened against the Company in any court or
        before
        any governmental commission, board or authority which, if adversely determined,
        will have a material adverse effect on the ability of the Company to perform
        its
        obligations under this Warrant.

       

      12. Modification
        and Waiver.
        This
        Warrant and any provision hereof may be changed, waived, discharged or
        terminated only by an instrument in writing signed by the party against which
        enforcement of the same is sought.

       

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

       

      if
        to the
        Company, to:

      

      Sirna
        Therapeutics, Inc.

      185
        Berry
        Street

      Suite
        6504

      San
        Francisco, CA 94107

      Phone:
        (415) 512-7624

      Fax:
        (415) 512-7022

      Attn:
        Bharat Chowrira

      Email:
        ChowriraB@sirna.com

      

      
        
          
          

        

        
          -
            9
            -

          
            

          

        

        
          
          

        

         

      

      with
        a
        copy to:

      

      O’Melveny
        & Myers LLP 

      2765
        Sand
        Hill Road

      Menlo
        Park, CA 94025

      Phone:
        (650) 473-2600

      Fax:
        (650) 473-2674

      Attn:
        Sam
        Zucker and Helena Wong

      Email:
        SZucker@omm.com, HWong@omm.com

      

      if
        to the
        holder, at its address as shown on the books of the Company.

      

      14. Binding
        Effect on Successors.
        This
        Warrant shall be binding upon any corporation succeeding the Company by merger,
        consolidation or acquisition of all or substantially all of the Company's
        assets, and all of the obligations of the Company relating to the Shares
        issuable upon the exercise or conversion of this Warrant shall survive the
        exercise, conversion and termination of this Warrant and all of the covenants
        and agreements of the Company shall inure to the benefit of the successors
        and
        assigns of the holder hereof.

       

      15. Lost
        Warrants or Stock Certificates.
        The
        Company covenants to the holder hereof that, upon receipt of evidence reasonably
        satisfactory to the Company of the loss, theft, destruction or mutilation
        of
        this Warrant or any stock certificate and, in the case of any such loss,
        theft
        or destruction, upon receipt of an indemnity reasonably satisfactory to the
        Company, or in the case of any such mutilation upon surrender and cancellation
        of such Warrant or stock certificate, the Company will make and deliver a
        new
        Warrant or stock certificate, of like tenor, in lieu of the lost, stolen,
        destroyed or mutilated Warrant or stock certificate.

       

      16. Descriptive
        Headings.
        The
        descriptive headings of the several paragraphs of this Warrant are inserted
        for
        convenience only and do not constitute a part of this Warrant. The language
        in
        this Warrant shall be construed as to its fair meaning without regard to
        which
        party drafted this Warrant.

       

      17. Governing
        Law.
        This
        Warrant shall be construed and enforced in accordance with, and the rights
        of
        the parties shall be governed by, the laws of the State of New
        York.

       

      18. Survival
        of Representations, Warranties and Agreements.
        All
        representations and warranties of the Company and the holder hereof contained
        herein shall survive the Date of Grant, the exercise or conversion of this
        Warrant (or any part hereof) or the termination or expiration of rights
        hereunder. All agreements of the Company and the holder hereof contained
        herein
        shall survive indefinitely until, by their respective terms, they are no
        longer
        operative.

       

      
        
          
          

        

        
          -
            10
            -

          
            

          

        

        
          
          

        

         

      

      19. Remedies.
        In case
        any one or more of the covenants and agreements contained in this Warrant
        shall
        have been breached, the holders hereof (in the case of a breach by the Company),
        or the Company (in the case of a breach by a holder), may proceed to protect
        and
        enforce their or its rights either by suit in equity and/or by action at
        law,
        including, but not limited to, an action for damages as a result of any such
        breach and/or an action for specific performance of any such covenant or
        agreement contained in this Warrant.

       

      20. No
        Impairment of Rights.
        The
        Company will not, by amendment of its certificate of incorporation or through
        any other means, avoid or seek to avoid the observance or performance of
        any of
        the terms of this Warrant, but will at all times in good faith assist in
        the
        carrying out of all such terms and in the taking of all such action as may
        be
        necessary or appropriate in order to protect the rights of the holder of
        this
        Warrant against impairment.

       

      21. Severability.
        Whenever possible, each provision of this Warrant shall be interpreted in
        such a
        manner as to be valid, legal and enforceable under all applicable laws and
        regulations. If, however, any provision of this Warrant shall be invalid,
        illegal or unenforceable under any such law or regulation in any jurisdiction,
        it shall, as to such jurisdiction, be deemed modified to conform to the minimum
        requirements of such law or regulation, or, if for any reason it is not deemed
        to be so modified, it shall be invalid, illegal or unenforceable only to
        the
        extent of such invalidity, illegality or limitation on enforceability without
        affecting the remaining provisions of this Warrant or the validity, legality
        or
        enforceability of such provision in any other jurisdiction.

       

      22. Entire
        Agreement; Modification.
        This
        Warrant constitutes the entire agreement between the parties pertaining to
        the
        subject matter contained in it and supersedes all prior and contemporaneous
        agreements, representations, and undertakings of the parties, whether oral
        or
        written, with respect to such subject matter.

       

      

      [Remainder
        of page intentionally left blank]

      

      
        
          
          

        

        
          -
            11
            -

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties have executed this Warrant as of the date first
        written above.

       

      
        
          	 	 	 
	 	SIRNA
                  THERAPEUTICS, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
                  

                  Name:

                
	 	
                  Title:

                
	 	 
	 	
                  Address:
                    185 Berry Street, Suite 6504

                                   
                    San
                    Francisco, CA 94107

                

        

         

      

      
        
          
          

        

        
          -
            12
            -

          
            

          

        

        
          
          

          
          

        

      

      Exhibit
        A-1

       

      Notice
        of Exercise

       

      
        	
                1.

              	
                The
                  undersigned hereby: 

              

      

       

      
        	 	
                o

              	
                elects
                  to purchase _____ shares of Common Stock of the Company pursuant
                  to the
                  terms of the attached Warrant, and tenders herewith payment of
                  the
                  purchase price of such shares in
                  full.

              

      

       

      
        	 	
                
                  o

                

              	
                elects
                  to exercise its issuance rights pursuant to Section 2(b) of the
                  attached
                  Warrant with respect to ____ shares of Common Stock of the
                  Company.

              

      

       

      
        	
                2.

              	
                Please
                  issue a certificate or certificates representing said shares in
                  the name
                  of the undersigned or in such other name or names as are specified
                  below:

              

      

       

      
        	
                _____________________________________

              
	
                (Name)

              
	 
	 
	
                _____________________________________

              
	
                _____________________________________

              
	
                _____________________________________

              
	
                (Address)

              

      

       

      
        	
                3.

              	
                The
                  undersigned represents that the aforesaid shares are being acquired
                  for
                  the account of the undersigned for investment and not with a view
                  to, or
                  for resale in connection with, the distribution thereof and that
                  the
                  undersigned has no present intention of distributing or reselling
                  such
                  shares, all except as in compliance with applicable securities
                  laws.

              

      

       

      
        	
                _____________________________________

              
	
                (Signature)

              
	 
	 
	
                Dated:
                  _______________________________

              
	 
	 
	 

      

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      Exhibit
        A-2

       

      Notice
        of Exercise

       

      

       

      
        	
                1.

              	
                Contingent
                  upon and effective immediately prior to the closing ("Closing")
                  of the Company's public offering contemplated by the Registration
                  Statement filed with the Securities and Exchange Commission filed
                  on
                  _____________, the undersigned
                  hereby:

              

      

       

      
        	 	
                
                  o

                

              	
                elects
                  to purchase _____ shares of Common Stock of the Company (or such
                  lesser
                  number of shares as may be sold on behalf of the undersigned at
                  the
                  Closing) pursuant to the terms of the attached
                  Warrant.

              

      

       

      
        	
                2.

              	
                Please
                  deliver to the custodian for the selling stockholders a stock certificate
                  representing such _____________
                  shares.

              

      

       

      
        	
                3.

              	
                The
                  undersigned has instructed the custodian for the selling stockholders
                  to
                  deliver to the Company $_____ or, if less, the net proceeds due
                  the
                  undersigned from the sale of shares in the aforesaid public offering.
                  If
                  such net proceeds are less than the purchase price for such shares,
                  the
                  undersigned agrees to deliver the difference to the Company prior
                  to the
                  Closing.

              

      

       

      
        	
                 

                _____________________________________

              
	
                (Name)

              
	 
	 
	
                _____________________________________

              
	
                _____________________________________

              
	
                _____________________________________

              
	
                (Address)

              

      

      

       

      Dated:
        __________________________

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