Warrant to Purchase Shares of Preferred Stock of Pharmasset, Inc. (Series D-1)

THE TRANSFER, SALE OR OTHER DISPOSITION OF THIS WARRANT AND THE SECURITIES WHICH MAY BE ACQUIRED PURSUANT TO THIS WARRANT MAY BE SUBJECT TO THE CONDITIONS SPECIFIED IN THE SECOND AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT DATED AUGUST 4, 2004 AMONG PHARMASSET, INC., A DELAWARE CORPORATION (THE “COMPANY”), AND THE OTHER PARTIES THERETO, AS THE SAME MAY BE AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED AND IN EFFECT FROM TIME TO TIME, AND NO TRANSFER OF THIS WARRANT OR THE SECURITIES WHICH MAY BE ACQUIRED PURSUANT TO THIS WARRANT SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. A COPY OF SUCH AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY.

THIS WARRANT AND THE SECURITIES WHICH MAY BE ACQUIRED PURSUANT TO THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE’S OR OTHER JURISDICTION’S SECURITIES LAWS. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE’S OR OTHER JURISDICTION’S SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS.

FOR VALUE RECEIVED, Pharmasset, Inc., a Delaware corporation (the “Company”), hereby certifies that Burrill Life Sciences Capital Fund, L.P., a Delaware limited partnership, or its permitted assigns (the “Holder”), is entitled, on the terms and subject to the conditions set forth in this Warrant, to purchase from the Company, at any time or from time to time following the Effective Date specified herein, prior to the Expiration Date specified herein and subject to Section 1(a) of this Agreement, 264,716 shares of the Series D-1 Preferred Stock of the Company, par value US$0.001 per share (the “Series D-1 Preferred Stock”), at the purchase price of US$0.10 per share of Series D-1 Preferred Stock (the “Exercise Price”). The number of shares of Series D-1 Preferred Stock for which this Warrant shall be exercisable and the Exercise Price per share of Series D-1 Preferred Stock are subject to adjustment from time to time as provided in Section 3. The terms, preferences, privileges, conditions, restrictions and designations of the Series D-1 Preferred Stock shall be as set forth in the Company’s Charter (as defined below). Certain terms used in this Warrant are defined in Section 5.

(a) This Warrant shall terminate and be of no force or effect automatically upon the earlier of (1) the Expiration Date or (2) the consummation of either a Qualified IPO or a Qualified M&A Transaction on or before the Effective Date. Notwithstanding the foregoing sentence, the confidentiality obligations set forth in Section 7 shall survive any termination, cancellation, expiration, exercise, exchange or transfer of this Warrant.

(b) Subject to earlier termination of this Warrant pursuant to Section 1(a), this Warrant may be exercised in whole at any time, or in part from time to time, by the Holder from or after August 4, 2006 (the “Effective Date”) up to and including the earlier to occur of the following (the “Expiration Date”): (i) the consummation of a Qualified IPO with respect to shares of Common Stock, par value US$0.001 per share, of the Company (the “Common Stock”), as the same may be adjusted in the event of any conversion, recapitalization or similar event, or (ii) August 4, 2009.

(a) Not later than thirty (30) days prior to the consummation of a Qualified IPO which occurs after the Effective Date and before the Expiration Date, the Company shall provide written notice to the Holder of the expected consummation of such Qualified IPO. At any time on and after the Effective Date, and until the Expiration Date, the Holder may exercise this Warrant, on one or more occasions, on any Business Day, in whole or in part. This Warrant shall be exercisable in part only for a whole number of shares equal to or in excess of 50,000 shares of Series D-1 Preferred Stock (as adjusted for stock splits, reverse splits, stock dividends and similar events). If the exercise of this Warrant is to be made in connection with a Qualified IPO or M&A Transaction occurring after the Effective Date, such exercise may, at the election of the Holder, be conditioned on the consummation of such Qualified IPO or M&A Transaction, in which case such exercise shall not be deemed to be effective until the consummation of such Qualified IPO or M&A Transaction. The Holder shall exercise this Warrant by delivering to the Company, at the Warrant Office, all of the following: (i) at least one (1) Business Day before the Exercise Effective Date (as defined in Section 2(d) below) a written notice of the Holder’s election to exercise this Warrant, which notice shall be substantially in the form of Annex A attached hereto and shall be properly completed (the “Exercise Notice”), (ii) on or before the Exercise Effective Date, payment of the Exercise Price (payable as set forth in Section 2(b)) for the shares of Series D-1 Preferred Stock as to which this Warrant is being exercised, and (iii) on or before the Exercise Effective Date, this Warrant.

(b) The Exercise Price shall be payable in U.S. Dollars, at the option of the Holder, either: (i) by wire transfer or in cash or by certified or official bank check payable to the order of the Company, or (ii) by acceptance of a reduced number of shares of Series D-1 Preferred Stock in accordance with the further provisions of this Section 2(b). If the Holder elects to pay the Exercise Price pursuant to clause (ii), the Holder shall receive from the Company upon exercise of this Warrant the number of shares of Series D-1 Preferred Stock determined by multiplying (A) the number of shares of Series D-1 Preferred Stock for which this Warrant is being exercised at such time by (B) a fraction, (1) the numerator of which shall be the difference between (x) the Current Market Price per share of Series D-1 Preferred Stock at such

time and (y) the Exercise Price per share of Series D-1 Preferred Stock, and (2) the denominator of which shall be the Current Market Price per share of Series D-1 Preferred Stock at such time. If either (i) the Holder notifies the Company in writing disputing any determination of the Independent Board Members as to the Current Market Price per share of the Series D-1 Preferred Stock or (ii) the Majority Holders notify the Company in writing disputing any determination of the Independent Board Members of the fair market value of any consideration paid or payable in connection with an M&A Transaction in property other than cash or publicly traded securities, in each case within 10 days after such determination (with any such notice being a “Dispute Notice”), the Company and the Holder or the Majority Holders (as applicable) shall negotiate in good faith in an effort to agree on such Current Market Price or fair market value of such property. If the Company and the Holder or the Majority Holders (as applicable) fail to agree upon the Current Market Price or value of such property within twenty (20) days after the Company’s receipt of the Dispute Notice, then the Company and the Holder or the Majority Holders (as applicable) shall endeavor to select a nationally recognized investment banking or accounting firm (the “Appraiser”) to conduct an appraisal of the property in question and to render its opinion as to the Current Market Price or fair market value of such property, such appraisal to be completed within sixty (60) days after such Person has been engaged to act as Appraiser. The cost of the Appraiser shall be borne 50% by the Company and, as applicable, 50% by the Holder or the Majority Holders (on a pro rata basis with respect to the total number of shares held by all Majority Holders parity to such Dispute Notice). Such determination of the Current Market Price or fair market value of such property by the Appraiser shall be final and binding upon the parties; provided, however, prior to completion of the IPO, the “Current Market Price” of the Common Stock as of a date occurring on or after the date on which the Company and the Company’s underwriters in the IPO execute an underwriting agreement agreeing on the price per share (the “IPO Price”) at which shares of Common Stock will be initially offered for sale to the public by such underwriters in the IPO, but prior to the closing date of the IPO, shall be the IPO Price. In the event that the Company has, within the one hundred twenty (120) days preceding the date of any Dispute Notice, engaged an Appraiser pursuant to the terms of this Warrant or any other Series D-1 Warrant, the determination of the “Current Market Price” or fair market value of such property made by such Appraiser shall be binding on the parties hereto, and no new appraisal shall be required to be conducted pursuant to this Section.

(c) Subject to the provisions of Section 2(d), upon receipt of an Exercise Notice, the aggregate Exercise Price payable and this Warrant, all in accordance with Section 2(a), the Company shall, (i) as promptly as practicable, issue to the Holder one or more stock certificates representing the aggregate number of shares of Series D-1 Preferred Stock to which the Holder is entitled and (ii) as promptly as practicable transfer to the Holder appropriate evidence of ownership of other securities or property (including any cash) to which the Holder may be entitled in each case, in such denominations, and registered or otherwise placed in, or payable to the order of, such name or names, as may be directed in writing by the Holder, and shall deliver such stock certificates, evidence of ownership and any other securities or property (including any cash) to the Person or Persons entitled to receive the same, together with an amount of cash in lieu of any fraction of a share (or fractional interest in any other security), as hereinafter provided. The Company shall pay all documentary, stamp or similar issue or transfer taxes of the United States or any state thereof payable in respect of the issue or delivery of shares of Series D-1 Preferred Stock issuable upon exercise of this Warrant. However, the Company shall not be required to pay any tax, expense or other charge imposed in connection with any

assignment or transfer involved in the issue of any certificate or other evidence of ownership of Series D-1 Preferred Stock or other property so assigned or transferred.

(d) The stock certificate or certificates or other evidence of ownership of Series D-1 Preferred Stock to be delivered pursuant to Section 2(c) shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein, to the extent permitted by law, shall be deemed to have become a holder of record of the Series D-1 Preferred Stock represented thereby, including having the right to vote any voting securities included therein or to consent or to receive notice as a stockholder, as of the date (the “Exercise Effective Date”) on which the last of the Exercise Notice, payment of the Exercise Price and this Warrant is received by the Company as aforesaid, notwithstanding that such certificates or other evidence of ownership shall not then actually have been delivered to the Holder.

(e) If this Warrant is exercised only in part, the Company shall, at the time of delivery of the certificate or certificates or other evidence of ownership of the Series D-1 Preferred Stock to be issued upon such exercise, execute and deliver to the Holder, without charge, a new Warrant evidencing the rights of the Holder to purchase the number of shares of the Series D-1 Preferred Stock that remain subject to purchase pursuant to this Warrant, which new Warrant shall in all other respects be identical to this Warrant, or, at the request of the Holder, appropriate notation may be made on this Warrant and the same returned to the Holder.

(f) The Company shall not be required to issue any fractional share of Series D-1 Preferred Stock (or fractional interest in any other security) upon exercise of this Warrant. As to any fraction of a share (or fractional interest in any other security) that the Holder would otherwise be entitled to receive upon such exercise, the Company shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the Current Market Price per share of Series D-1 Preferred Stock (and/or other security) on the date of exercise. If the Holder shall exercise more than one Warrant in the same transaction, any payment in respect of fractional shares shall be based on the final fraction resulting from aggregating all such exercises.

(g) The Company hereby agrees at all times to keep reserved for issuance and delivery upon exercise of this Warrant such number of its authorized but unissued shares (or treasury shares) of Series D-1 Preferred Stock or other securities of the Company from time to time issuable upon exercise of this Warrant as will be sufficient to permit the exercise in full of this Warrant. All such shares and other securities shall be duly authorized and, when issued upon such exercise in accordance with the terms of this Warrant and the Company’s Charter, shall be validly issued, fully paid and non-assessable, and free of restrictions on transfer created by or through the Company other than restrictions on transfer in this Warrant, the Stock Purchase Agreement, the Stockholders’ Agreement, applicable securities laws and any applicable provisions set forth in the in Fundamental Documents in effect on the Effective Date.

(h) Each certificate for securities issued pursuant to this Warrant, unless at the time such issuance is registered under the Securities Act, shall bear the following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED (THE “ACT”) OR ANY STATE’S OR OTHER JURISDICTION’S SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND SUCH STATE SECURITIES LAWS UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

In addition, each share certificate, now or hereafter issued to any Holder pursuant to this Warrant, will be stamped or otherwise imprinted with a legend in substantially the following form:

THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO AGREEMENTS, COVENANTS AND RESTRICTIONS WITH REGARD TO THE VOTING OF SUCH SHARES AND THEIR TRANSFER AS PROVIDED IN THE PROVISIONS OF THAT CERTAIN SECOND AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT, DATED AUGUST 4, 2004, BY AND AMONG THE COMPANY AND THE STOCKHOLDERS NAMED THEREIN, A COPY OF WHICH IS ON FILE IN THE OFFICE OF THE SECRETARY OF THE COMPANY.

Any certificate issued at any time in exchange or substitution for or upon conversion of any certificate bearing such legend shall also bear such legend unless, in the opinion of counsel selected by the holder of such certificate (who may be an employee of such holder) and reasonably acceptable to the Company, the securities represented thereby need no longer be subject to restrictions on resale under the Securities Act or any applicable state’s or other jurisdiction’s securities laws.

(a) If the Series D-1 Preferred Stock is changed or converted into the same or different number of shares of any other class, classes or series of capital stock, whether by reason of a provision in the Charter, a stock split, stock dividend, capital reorganization, recapitalization, reclassification, or is otherwise converted into or exchanged for other securities or property as a result of a merger, share exchange or other similar transaction, then in each such event the Holder shall have the right thereafter to receive upon exercise hereof, in lieu of the number of shares of Series D-1 Preferred Stock which the Holder would otherwise have been entitled to receive, the kind and amount of shares of capital stock and other securities and property which they would have received upon such reorganization, recapitalization, reclassification, merger or other change had the Holder exercised this Warrant immediately prior to such reorganization, recapitalization, reclassification, merger or other change, all subject to further adjustment as provided herein.

(b) Whenever on or after the Effective Date the number of shares of Series D-1 Preferred Stock for which this Warrant is exercisable is adjusted, as herein provided, the Company shall promptly give notice thereof to the Holder, in accordance with Section 6, by delivering a certificate which sets forth such adjustment and a brief statement of the facts

requiring such adjustment. Such certificate shall also set forth the kind and amount of stock or other securities or property for which this Warrant shall be exercisable following the occurrence of any of the events specified above.

(a) So long as this Warrant remains outstanding, the Company shall maintain an office (the “Warrant Office”) in the continental United States where the Warrants may be presented for exercise, transfer, division, termination or combination as provided in this Warrant. The Warrant Office shall be at Pharmasset, Inc., 1860 Montreal Road, Tucker, Georgia, 30004, unless and until the Company shall designate and maintain some other office for such purposes and give notice thereof to the Holder.

(b) This Warrant and any rights hereunder and any security issued pursuant hereto shall be transferable by the Holder hereof only to a Permitted Transferee (as defined below) and only if: (i) such transfer may otherwise be effected in accordance with applicable securities laws, (ii) the Company is given written notice of such transfer, including the name, jurisdiction of organization and principal business address of the transferee at least five (5) Business Days in advance and a written assignment of this Warrant substantially in the form of Annex C attached hereto is duly executed and delivered to the Company, (iii) as a condition to the effectiveness of any such transfer, such transferee executes and delivers to the Company, in accordance with Section 4(d), a written joinder agreement, substantially in the form of Annex B attached hereto (a “Joinder Agreement”), (iv) the transferee is a “Permitted Transferee,” defined as (a) a current or former partner or member, a Subsidiary, parent or an Affiliate of, the transferor, or (b) a Person acquiring a minimum of the lesser of (1) Warrants to acquire Series D-1 Preferred Stock convertible into at least 50,000 shares of Common Stock (subject to adjustment for share splits, share dividends or other similar changes in capitalization), or (2) all of the Warrants held by the transferor, and (v) funds sufficient to pay any transfer or other taxes payable upon or as a result of such transfer are delivered to the Company.

(c) The Company may deem and treat the Person in whose name this Warrant is registered as the holder and owner hereof (notwithstanding any notations of ownership or writing hereon made by any Person other than the Company) for all purposes and shall not be affected by any notice to the contrary, until due presentment of this Warrant for registration of transfer as provided in this Section 4.

(d) The Company shall maintain at the Warrant Office books for the registration of transfers of this Warrant, and, subject to the limitations set forth in Section 4(b), transfer in whole or in part of this Warrant and all rights hereunder shall be registered on such books, upon the surrender of this Warrant at the Warrant Office, together with (i) a written assignment of this Warrant, substantially in the form of Annex C attached hereto, duly executed by the Holder or its duly authorized agent or attorney (ii) a Joinder Agreement duly executed by the transferee of the Holder or its duly authorized agent or attorney and (iii) funds sufficient to pay any transfer or other taxes payable upon or as a result of such transfer. Upon such surrender, the Company shall, without charge, execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment (which shall be whole numbers of the shares of Common Stock for which this Warrant shall be

exercisable only), and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall be promptly canceled.

(e) This Warrant may be divided into new Warrants or combined with other Warrants with the same terms as this Warrant upon the presentment of this Warrant, or this Warrant and any other Warrants with which this Warrant is to be combined, together with a written notice specifying the names and denominations (which shall be whole numbers of shares of stock only) in which the new Warrant or Warrants are to be issued, signed by the Holders hereof and thereof or their respective duly authorized agents or attorneys. Subject to compliance with the other provisions of this Section 4 as to any transfer or assignment which may be involved in the division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice.

(f) Upon receipt of evidence satisfactory to the Company of the ownership of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Company or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same aggregate number of shares of Common Stock.

As used herein, the following terms shall have the following meanings (all terms defined in this Section 5 or in other provisions of this Warrant in the singular to have the same meanings when used in the plural and vice versa):

“Affiliate” shall mean, as applied to the Company or any other specified Person, any Person directly or indirectly controlling, controlled by or under direct or indirect common control with the Company (or other specified Person) and shall also include (a) any Person who is a director or officer of the Company (or such other specified Person) or beneficial owner of at least 5% of any class of the then outstanding equity securities of the Company (or such other specified Person) and Family Members of any such Person, (b) any Person of which the Company (or such other specified Person) or an Affiliate of the Company (or such other specified Person) shall, directly or indirectly, beneficially owns at least ten percent (10%) of any class of such Person’s then outstanding equity securities, and (c) in the case of a specified Person who is an individual, any Family Member of such Person.

“Board” shall mean the Board of Directors of the Company or any executive committee thereof to the extent such executive committee has the legal authority under Delaware law to act on behalf of the Board of Directors.

“Business Day” means any day, other than a Saturday, Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

“Bylaws” means the bylaws of the Company, as amended and in effect at the time in question.

“Charter” means the Amended and Restated Certificate of Incorporation of the Company, as filed with the Secretary of State of Delaware on or about the date of this Warrant, as the same may be amended and restated and in effect from time to time.

“Current Market Price” means, as of any date and for any security, (i) if such security is of a class or series of securities then listed or admitted to trading on any United States national securities exchange or traded on any United States national market system, the average of the daily closing prices for the ten (10) trading days before such date, excluding any trades which are not bona fide arms’ length transactions (and the closing price for each such day shall be the last sale price on such date or, if no such sale takes place on such date, the average of the closing bid and ask prices on such date, in each case as officially reported on the principal United States national securities exchange or United States national market system on which securities are then listed, admitted to trading or traded), (ii) if such security is not of a class or series of securities then listed or admitted to trading on any United States national securities exchange or traded on any United States national market system, the average of the reported closing bid and ask prices in the over-the-counter market in the United States on such date as shown by the NASD automated quotation system, or if such securities are not then quoted on such system, as published by the National Quotation Bureau, Incorporated or any similar successor organization, and in either case as reported by any member firm of the New York Stock Exchange selected by the Company, and (iii) if such security is not of a class or series of securities then listed or admitted to trading on any United States national securities exchange or traded on any United States national market system, and if no closing bid and ask prices thereof are then so quoted or published in the over-the-counter market in the United States, the “Current Market Price” of such security shall be the fair value thereof on such date, which shall be determined in good faith by a majority of the Independent Board Members.

“Exercise Price” is defined in the introductory paragraph of this Warrant.

“Family Member” means, as applied to any individual, such individual’s spouse, child (including a stepchild or an adopted child), grandchild, parent, brother or sister, or any spouse of any of the foregoing, and each trust crated for the exclusive benefit of one or more of them.

“Fundamental Documents” means the documents by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs. The Fundamental Documents of the Company are the Charter and the Bylaws.

“Include” and “Including” shall be construed as if followed by the phrase “without being limited to.”

“Independent Board Members” means those members of the Board that were not elected to the Board as designees of the Holder (or of any series of Preferred Stock of which the Holder holds securities), as described in the Stockholders’ Agreement, and who are not otherwise Affiliates of the Holder; provided, however, that for purposes of the definition of “Total Consideration” below, the determination of “Independent Board Members” shall be made with respect to the Majority Holders that deliver a Dispute Notice pursuant to Section 3(c) of this Warrant instead of the Holder as described above in this definition.

“IPO” means the Company’s first underwritten public offering of Common Stock registered under the Securities Act (which may be a Qualified IPO).

“Majority Holders” shall mean those Persons that have the right to receive a majority of the total number of shares of Series D-1 Preferred Stock issuable upon the exercise of all outstanding Series D-1 Warrants.

“M&A Transaction” is defined in the definition of “Qualified M&A Transaction” below.

“Person” shall mean an individual, partnership, company, corporation, association, trust, joint venture, unincorporated organization and any government, governmental department or agency or political subdivision thereof.

“Preferred Stock” shall mean, collectively, the Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock and the Series D-1 Preferred Stock.

“Qualified IPO” means a fully underwritten, firm commitment public offering that is consummated pursuant to an effective registration statement under the Securities Act covering the offer and sale by the Company of Common Stock in which the aggregate offering amount equals or exceeds US$30,000,000 and in which the price per share of Common Stock offered to the public equals or exceeds US$12.75 (such price to be equitably adjusted in the

event of any share dividend, share split, reverse split, combination, recapitalization or other similar event).

“Qualified M&A Transaction” means a single transaction or a group of related transactions between or among the Company or holders of the Company’s securities and any Person or group of Persons pursuant to which such Person or Persons will, other than in connection with a Qualified IPO: (i) acquire securities of the Company possessing the voting power to elect a majority of the Board; (ii) consummate a merger, amalgamation, consolidation or other similar transaction as a result of which the stockholders of the Company who own voting securities immediately prior to such transaction(s) shall own less than fifty percent (50%) of the voting securities of the surviving corporation or its parent; (iii) acquire all or substantially all of the Company’s assets determined on a consolidated basis; or (iv) acquire, whether by merger, acquisition, purchase, consolidation, amalgamation, business combination, tender offer, exchange, joint venture or otherwise securities or assets of the Company (an “M&A Transaction”); in each case for Total Consideration which equals or exceeds US$252,500,000 and which includes aggregate cash consideration of not less than US$56,000,000.

“SEC” means the Securities and Exchange Commission or any other Federal agency at the time administering the Securities Act or the Securities Exchange Act of 1934, as applicable.

“Securities” has the meaning ascribed to such term in Section 2(1) of the Securities Act.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Series A Preferred Stock” means the Series A Preferred Stock, par value $0.001 per share, of the Company.

“Series B Preferred Stock” means the Series B Preferred Stock, par value $0.001 per share, of the Company.

“Series C Preferred Stock” means the Series C Preferred Stock, par value $0.001 per share, of the Company.

“Series D Preferred Stock” means the Series D Preferred Stock, par value $0.001 per share, of the Company.

“Series D-1 Preferred Stock” means the Series D-1 Preferred Stock, par value $0.001 per share, of the Company.

“Series D-1 Warrants” means this Warrant, all other warrants to acquire shares of Series D-1 Preferred Stock that are issued by the Company on or about the date hereof, and all warrants issued upon the transfer, division, or combination of, or in substitution for, this Warrant or any such other warrant.

“Stock Purchase Agreement” means the Stock Purchase Agreement dated as of August 4, 2004 among the Company and the other signatories thereto with respect to the purchase and sale of shares of Series D Preferred Stock.

“Stockholders’ Agreement” means the Stockholders’ Agreement dated as of August 4, 2004 by and among the Company, the holders of the Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, and the other signatories thereto.

“Subsidiary” means, as to any Person, any other Person of which more than 50% of the shares of the voting stock or other voting interests are owned or controlled, or the ability to select or elect 50% of more of the directors or similar managers is held, directly or indirectly, by such first Person or one or more of its Subsidiaries.

“Total Consideration” means all consideration to be received by the Company or its security holders in connection with any M&A Transaction, including but not limited to: (i) the total amount of cash and the fair market value (determined as set forth below) of all property paid or payable in connection with such M&A Transaction; (ii) the aggregate amount of debt (including capitalized leases) assumed or repaid, directly or indirectly, in connection with such M&A Transaction; (iii) deferred installments of the sales price; (iv) consideration paid or payable in respect of stock options, warrants, convertible securities, stock appreciation rights and other similar rights, whether or not vested; (v) any portion of the sales price held in escrow subsequent to closing; (vi) extraordinary compensation paid or payable to principals, management or employees of the Company or its Affiliates; (vii) payments made after closing of such M&A Transaction upon the occurrence of certain contingencies or conditions; or the satisfaction of certain objectives which are agreed to on or before the date of such closing; and (viii) in the case of a sale of substantially all the Company’s assets, the total consideration paid or payable for such assets plus the net fair market value of any current assets not sold by the Company. For purposes of calculating Total Consideration, all shares will be deemed transferred if an M&A Transaction is effected by the transfer or issuance of shares (i) constituting 50% or more of the then outstanding equity securities of, or equity interest in, the Company, or (ii) possessing 50% or more of the then outstanding voting power of the outstanding equity securities of, or equity interest in, the Company. The value of any consideration paid in securities shall be the Current Market Price of such securities determined immediately prior to the public announcement of the M&A Transaction. In the event that all or any portion of the Total Consideration is paid in consideration other than cash or securities, or is paid in deferred installments, or consists of conditional or contingent consideration, then the amount of the consideration payable with respect thereto shall be determined based upon current fair market value as determined by the majority of the Independent Board Members in good faith.

“Warrant” shall mean this Warrant and all warrants issued upon the transfer, division, or combination of, or in substitution for, this Warrant or any such other warrant. All Warrants shall be substantially in the form of this Warrant (including the legends appearing on the first page of this Warrant), except that the Warrants need not bear the legends appearing on the first page of this Warrant from and after such time as the restrictions set forth therein no longer apply.

All notices, requests, demands and other communications that are required or permitted hereunder shall be in writing and shall be sent to the address and fax number set forth below:

Notices shall be deemed given upon the earlier to occur of (i) receipt by the party to whom such notice is directed; (ii) if sent by facsimile machine, on the Business Day such notice is sent if sent (as evidenced by confirmation from recipient) prior to 5:00 p.m. Eastern Time and, if sent after 5:00 p.m. Eastern Time, on the first Business Day after which such notice is sent; (iii) on the first Business Day following the day the same is deposited with the commercial carrier if sent

by commercial overnight delivery service; or (iv) the fifth day (or the next Business Day if the fifth day is not a Business Day) following deposit thereof with the U.S. Postal Service as aforesaid. Each party, by notice duly given in accordance therewith may specify a different address for the giving of any notice hereunder.

The Holder may receive certain information with respect to the affairs or plans of the Company or any of its Subsidiaries that is provided by the Company to the Holder pursuant to this Warrant, including the Company’s plans or preparation for an IPO, which is confidential. The Holder agrees to hold all such information in confidence, not to use or disclose such information and otherwise to abide by the terms of Section 6 of the Stockholders’ Agreement (which are incorporated herein by reference) as if set forth in their entirety herein.

Prior to the exercise of this Warrant, the Holder shall not by virtue hereof, be entitled to any rights of a stockholder of the Company, including, without limitation, the right to vote, to receive dividends or other distributions, to exercise any preemptive right, right of first refusal or to receive any notice of meetings of stockholders or any liquidation preferences or notice of any proceedings of the Company except as may be specifically provided for herein.

If the Company closes its books or takes a record of the holders of its Series D-1 Preferred Stock or Common Stock (or other stock or securities at the time deliverable upon the exercise of this Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or with respect to any pro rata subscription offer to holders of Series D-1 Preferred Stock or Common Stock, or for determining rights to vote with respect to any dissolution or liquidation of the Company, then, and in each such case, the Company will give notice thereof to the Holder of this Warrant, in accordance with Section 6, specifying in such notice, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, or (ii) the anticipated effective date on which such dissolution or liquidation is to take place, and the time, if any is to be fixed, as of which the holders of record of the Series D-1 Preferred Stock or the Common Stock (or such other stock or securities at the time deliverable upon the exercise of this Warrant) shall be entitled to exchange their shares of the Series D-1 Preferred Stock or the Common Stock (or such other stock or securities) for the securities or other property deliverable upon such dissolution or liquidation. Such notice shall be given by the Company at least three Business Days prior to the record date or effective date for the event specified in such notice.

By acceptance of this Warrant, the Holder of this Warrant hereby represents, warrants and agrees that:

(a) It (i) is an “accredited investor” as defined in Regulation D of the Securities Act; (ii) has such knowledge and experience in financial and business matters that it is

capable of evaluating the merits and risks of the investment in this Warrant and the securities issuable pursuant to this Warrant; and (iii) is acquiring this Warrant and the Series D-1 Preferred Stock and other securities, if applicable, issuable pursuant to this Warrant for its own account for investment and not with a view to, or sale in connection with, the distribution thereof in violation of any securities laws, and except as contemplated hereby the Holder has no present or contemplated agreement, undertaking, arrangement, obligation, indebtedness or commitment providing for the distribution thereof. The Holder’s jurisdiction of organization and principal office are set forth in Section 6 hereof.

(b) This Warrant and the shares of Series D-1 Preferred Stock issuable upon the exercise of this Warrant (including shares of Common Stock issuable upon conversion of such Series D-1 Preferred Stock) (collectively, the “Warrant Shares”) will be issued in reliance upon the exemption from registration contained in or pursuant to the Securities Act of 1933, as amended (the “Securities Act”), including Section 4(2) of the Securities Act and Regulation D promulgated thereunder, and that such securities will or may also be issued in reliance upon the exemptions from registration contained in comparable exemptions contained in the securities laws of other jurisdictions to the extent applicable (the “State Acts”), and that the transfer of such Warrant Shares may be restricted or limited as a condition to the availability of such exemptions. The Warrant Shares may be offered for sale, sold, pledged, hypothecated, disposed of or otherwise transferred only if there is a registration statement under the Securities Act in effect with respect to such transaction and pursuant to registration under any applicable State Acts covering such securities; or in the absence of such registration, only in reliance upon an opinion of counsel satisfactory to the Company, to the effect that registration is not required under the Securities Act or under any applicable State Acts. Any attempt by the Holder, directly or indirectly, to offer, sell, pledge, hypothecate, dispose of or otherwise transfer any Warrant Shares or any economic or voting rights relating thereto without complying with the provisions of this Warrant and applicable law shall be void and of no effect. Notwithstanding the limitations set forth in the foregoing, if the Holder is a partnership it may transfer Warrant Shares to its constituent partners or a retired partner of such partnership who retires after the date hereof, or to the estate of any such partner or retired partner or transfer by gift, will, or intestate succession to any such partner’s spouse or lineal descendants or ancestors without the necessity of registration or opinion of counsel if the transferee agrees in writing to be subject to the terms of this Warrant to the same extent if such transferee were an initial Holder; provided, however, that the Holder hereby covenants and agrees not to effect such transfer if such transfer either would invalidate the securities laws exemptions pursuant to which the Warrant Shares were originally offered and sold or would itself require registration and/or qualification under the Securities Act or applicable State Acts. Each certificate evidencing the Warrant Shares transferred as above provided shall bear the appropriate restrictive legend set forth in Section 2(h) above, except that such certificate shall not bear such legend if the transfer was made in compliance with subsection (k) of Rule 144 or if the opinion of counsel referred to above is to the further effect that such legend is not required in order to establish compliance with any provisions of the Securities Act or any State Act.

(c) It acknowledges that it has not received any offering statement, prospectus or offering circular containing information with respect to the Company, this Warrant, the Series D-1 Preferred Stock or the Common Stock issuable upon conversion thereof, and the Holder has made an independent inquiry and analysis with respect to the Company, this Warrant,

the Series D-1 Preferred Stock or the Common Stock issuable upon conversion thereof. The Holder represents and warrants that it is not subscribing to or purchasing this Warrant as a result of any advertisement, article, notice, general solicitation or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or meeting.

This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware (without giving effect to any conflicts or choice of laws provisions thereof).

The provisions of this Warrant may be amended, modified or waived with (and only with) the written consent of the Company and either (a) the Holder (if such modification, amendment or waiver solely affects the rights of such Holder in a manner that does not give such Holder greater rights or benefits pursuant to this Warrant than those given to the holders of the other Series D-1 Warrants generally) or (b) the Majority Holders. Any such amendment, modification or waiver effected pursuant to and in accordance with the provisions of this Section 12 shall be binding upon the Holder and each future holder hereof and the Company, provided that if such Amendment is made with the consent of the Majority Holders, such amendment must simultaneously amend all Series D-1 Warrants in the same respect. Amendments and waivers made in accordance with this Section 12 shall be binding upon the holders of all Series D-1 Warrants and shares of Common Stock issued upon the exercise of the Series D-1 Warrants and upon each future holder thereof and upon the Company. In the event of any such amendment, modification or waiver, the Company shall give prompt notice thereof to all holders of the Series D-1 Warrants and, if appropriate, notation thereof shall be made on all Series D-1 Warrants thereafter surrendered for registration of transfer or exchange.

This Warrant contains the entire understanding of the parties hereto with respect to its subject matter, and supersedes all prior agreements and understandings between the parties with respect to the subject matter hereof. Subject to the restrictions on transfer set forth herein, this Warrant shall be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and permitted assigns. Any term or provision of this Warrant which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable any other term or provision of this Warrant or affecting the validity or enforceability of any of the terms or provisions of this Warrant in any other jurisdiction.

The section and other headings contained in this Warrant are for convenience of reference only, are not part of this Warrant and are not to affect the construction of or be taken into consideration in interpreting this Warrant.

This Warrant may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. Each party (i) has agreed to permit the use, from time to time and where appropriate, of facsimile, electronic or other medium of transmission of signature or other pages in order to expedite the transactions contemplated by this Warrant, (ii) intends to be bound by its respective facsimile, electronic or other medium of transmission of its signature or other pages, (iii) is aware that the other will rely on the facsimile, electronic or other medium of transmission of the signature or other pages and (iv) acknowledges such reliance and waives any defenses to the enforcement of the documents effecting the transaction contemplated by this Warrant based on the fact that a signature or other page was sent by facsimile, electronic or other medium of transmission.

IN WITNESS WHEREOF, the Company and the Holder have caused this Warrant to be executed and delivered as of August 4, 2004.


COMPANY:

PHARMASSET, INC.

By:	/s/ Raymond F. Schinazi
	Name:	Raymond F. Schinazi
	Title:	Chairman


HOLDER:

BURRILL LIFE SCIENCES CAPITAL FUND, L.P.

By:	Burrill & Company (Life Sciences GP), LLC, its General Partner

By:	/s/ G. Steven Burrill
		G. Steven Burrill
		Managing Member

Counterpart Signature Page to Pharmasset, Inc. Series D-1 Preferred Stock Warrant

The undersigned registered owner of this Warrant (the “Registered Holder”) hereby exercises this Warrant for the purchase of shares of Series D-1 Preferred Stock, par value $0.001 per share, (the “Series D-1 Preferred Stock”) of Pharmasset, Inc., a Delaware corporation (the “Company”), and herewith makes payment therefor of $ (such payment being made [check one] (x) [__] by wire transfer or in cash or by certified or official bank check or (y) [__] by acceptance of a reduced number of shares of Series D-1 Preferred Stock in accordance with Section 2(b) of the Warrant, and requests that (i) certificates and/or other instruments covering such shares of Series D-1 Preferred Stock be issued in accordance with the instructions given below and (ii) if such shares of Series D-1 Preferred Stock shall not include all of the shares of Series D-1 Preferred Stock to which the Registered Holder is entitled under this Warrant, that a new Warrant for the unpurchased balance of the shares of Series D-1 Preferred Stock issuable hereunder be delivered to the undersigned. The effective date of this Exercise Notice shall be [check one] (1) [__] [ , 200_ (at least one business day after delivery hereof to the Company; (2) [__] the date of consummation of the Qualified IPO described in the Company’s notice to the Registered Holder of such transaction; or (3) [__] the date of consummation of the M&A Transaction described in the Company’s notice to the Registered Holder of such transaction.

By execution of this Joinder Agreement, the undersigned hereby agrees as follows:

FOR VALUE RECEIVED, the undersigned registered owner of this Warrant hereby sells, assigns and transfers unto the assignee named below all the rights of the undersigned under this Warrant with respect to the number of shares of the Series D-1 Preferred Stock, par value $0.001 per share, of Pharmasset, Inc. covered thereby set forth below to:


(i)		If to the Company, to:

		Pharmasset, Inc.
		1860 Montreal Road
		Tucker, Georgia 30004
		Attention: Legal Affairs
		Telephone: (678) 395-0035
		Facsimile: (678) 395-0030

		with a copy (which shall not constitute notice) to:

		Morris, Manning & Martin, LLP
		1600 Atlanta Financial Center
		3343 Peachtree Road, N.E.
		Atlanta, Georgia 30326
		Attention: James Walker IV
		Telephone: (404) 233-7000
		Facsimile: (404) 365-9532

(ii)		If to the Holder, to:

		Burrill Life Sciences Capital Fund, L.P.
		A Delaware Limited Partnership
		One Embarcadero Center, Suite 2700
		San Francisco, California 94111
		Telecopy No.: (415) 591-5401

		with a copy to:

		Richard Peers, Esq.
		Heller Ehrman White & McAuliffe LLP
		275 Middlefield Road
		Menlo Park, CA 94025
		Telecopy No.: (650) 324-0638


Dated:
								(Signature of Registered Holder)¹
Instructions for issuance and registration of shares of Series D-1 Preferred Stock and any other assets deliverable upon exercise of this Warrant:
								Federal Identification, Social Security or Other Identifying Number:______________________________________
Name of Registered Holder (please print) Please deliver certificate to the following address:

Street

City, State and Zip Code


Dated:
								(Signature of Transferee)

								Name of Transferee (Please Print)

								Address:




								Facsimile:__________________________________________
Witness:


Dated:	_______________________________
		(Signature of Registered Holder)

		Name of Registered Holder (Please Print)

Witness:


Name of Assignee	Address and Jurisdiction of Organization	Number of Shares of Series D-1 Preferred Stock