EXHIBIT 10.1
 
CLINICAL TRIAL FUNDING AGREEMENT

THIS CLINICAL TRIAL FUNDING AGREEMENT (this “Agreement”) is entered into as of
February 25, 2011 (the “Effective Date”) between NILE THERAPEUTICS, INC., a
Delaware company with offices at 4 West 4th Avenue, Suite 400, San Mateo,
California 99402 (“Nile”) and MEDTRONIC, INC., a Minnesota corporation with
offices at 710 Medtronic Parkway, Minneapolis, Minnesota 55432, U.S.A.
(“Medtronic”) (each a “Party,” collectively the “Parties”).

RECITALS

WHEREAS, Nile is a company focused on the use of hybrid natriuretic peptides,
including but not limited to CD-NP, as defined in the Nile Patents (“Drug”, as
further defined in Section 1.1.6 below);

WHEREAS, Medtronic is a leader in the business of designing, manufacturing and
marketing medical devices, including medical devices for delivery of various
peptides such as the Pumps and Sets (as defined in Section 2.1 below)
(collectively, the “Devices”, as further defined in Section 2.1 below);

WHEREAS, the Parties have entered a Confidential Disclosure Agreement with an
effective date of August 9, 2010 (“CDA”) to govern the mutual exchange of
information for the purpose of exploring a possible business relationship, and
the Parties desire to terminate the CDA and replace it with this Agreement;

WHEREAS, the Parties have entered into a Material Transfer Agreement with an
effective date of October 19, 2010 (“MTA”) pursuant to which Nile provided
Medtronic with a sample of the Drug for purposes of Medtronic evaluating the
effectiveness and stability of the Drug which will continue to remain in effect;
and

WHEREAS, the Parties desire to enter an agreement to conduct drug-device testing
and a Clinical Study involving Nile’s Drug and certain Medtronic Devices,
including Pumps and Sets (as further defined below), beginning with a
feasibility study to assess the pharmacokinetics and phamacodynamics of the Drug
as defined in the Work Plan (as that term is defined in Section 1.1.31).

AGREEMENT

NOW THEREFORE, in consideration of the foregoing premises and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Parties agree as follows:

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
 

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ARTICLE 1
DEFINITIONS
 
1.1   Specific Definitions.  For purposes of this Agreement, the following
definitions shall apply:
 
1.1.1.           “Affiliate” means any corporation or other business entity
controlled by, controlling, or under common control with Nile or Medtronic,
respectively.  For this purpose, “control” means (a) direct or indirect
beneficial ownership of fifty percent (50%) or more of the voting control, or
(b) the power to direct or cause the direction of the management and policies of
such corporation or other business entity.
 
1.1.2.           “Bankruptcy Event” occurs if a Party (a) becomes the subject of
a voluntary or involuntary proceeding or appointment under any bankruptcy,
insolvency, receivership, liquidation, general assignment, custodian,
trusteeship or similar law or rule, or (b) makes a general assignment for the
benefit of creditors; and, in the event such proceeding or appointment or
assignment is involuntary, such proceeding or appointment or assignment is not
dismissed within sixty (60) days after being filed.
 
1.1.3.           “Budget” shall mean the document attached hereto as Exhibit B.
 
1.1.4.           “Cause” means material breach of the Agreement by a Party that
remains uncured ninety (90) days after the other Party notifies the breaching
Party in writing of such breach; provided, however, that the opportunity to cure
shall not apply if the material breach in question is, by its nature, not
curable.  For clarity, a dispute about whether and the amount of money that may
be owed by a Party to the other pursuant to Section 7 shall not be construed to
be a material breach of this Agreement provided that the Party alleged to be in
breach (i) pays all amounts owed to the other Party which are not in dispute and
(ii) the Parties are working in good faith to resolve the dispute in question,
which may include, if applicable, litigation.
 
1.1.5.           “Clinical Study” means the Phase IIa feasibility study designed
by Nile to be conducted hereunder as further set forth in the attached Work
Plan.
 
1.1.6.           “Clinical Data” means all data generated during a Clinical
Study, including raw clinical data, lab data, final Case Report Forms and
reports.
 
1.1.7.           “Drug” means the hybrid natriuretic peptides (CD-NP) known as
cenderitide as defined in US Patent Number(s) 6,407,211 owned or licensed or
otherwise acquired by or assigned to Nile, which exist at the Effective Date.
 
1.1.8.           “Drug Master File” means a regulatory dossier containing
proprietary information per 21 CFR 314.420.
 
1.1.9.           “Effective Date” means the date first set forth above on this
Agreement.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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1.1.10.         “FDA” means the United States Food and Drug Administration and,
when applied in the context of foreign agencies, those foreign agencies having
regulatory jurisdiction equivalent to the FDA.
 
1.1.11.         “GCP” means Good Clinical Practices as defined in the ICH
Guideline for Good Clinical Practice and Parts 50, 54, 56, and 312 of the United
States Code of Federal Regulations (“CFR”).
 
1.1.12.         “GLP” means Good Laboratory Practices as defined in 21 CFR Part
58.
 
1.1.13.         “GMP” means Good Manufacturing Practices as defined in 21 CFR
Parts 210 and 211 and Parts 600 through 680.
 
1.1.14.         “Intellectual Property” means all forms of intellectual property
in any jurisdiction and under any law, whether now or hereafter existing,
including: (a) inventions, discoveries, patent applications, patents (including
letters patent, industrial designs, and inventor’s certificates), design
registrations, invention disclosures, and applications to register industrial
designs, and any and all rights to any of the foregoing anywhere in the world,
including any provisionals, substitutions, extensions, supplementary patent
certificates, reissues, re-exams, renewals, divisions, continuations,
continuations in part, continued prosecution applications, and other similar
filings or notices provided for under the laws of the United States, or of any
other country; (b) trade secrets and other confidential or non-public business
information, including ideas, formulas, compositions, inventor’s notes,
discoveries, improvements, concepts, know-how, manufacturing and production
processes and techniques, testing information, research and development
information, data resulting or derived from research activities, inventions,
invention disclosures, unpatented blue prints, drawings, specifications designs,
plans, proposals and technical data, business and marketing plans, market
surveys, market know-how and customer lists and related information; (c)
copyrights, whether or not registered, and any non-registered copyright to any
writings and other copyrightable works of authorship, including source code,
object code, documentation (whether or not released), and databases; (d)
features of shape, configuration, pattern or ornament; and (e) registrations of,
and applications to register, any of the foregoing with any governmental entity
and any renewals or extensions thereof and all other rights to any of the
foregoing.
 
1.1.15.         “Joint Intellectual Property” shall mean Intellectual Property
which is conceived in or otherwise results from the performance of the Clinical
Study, regardless of inventorship, that does not otherwise constitute Medtronic
Improvements or Nile Improvements.
 
1.1.16.         “Medtronic” means Medtronic, Inc.
 
1.1.17.         “Medtronic Background Intellectual Property” shall mean all
Intellectual Property and proprietary materials or devices owned or otherwise
controlled by Medtronic on the Effective Date (including, without limitation,
proprietary methodologies applied by Medtronic in the performance of the
Medtronic Studies) or developed or acquired by Medtronic independently of this
Agreement following the Effective Date.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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1.1.18.         “Medtronic Improvements” shall mean Intellectual Property
claiming or covering any proprietary Medtronic delivery devices (“Delivery
Devices”) or the use (other than the Intellectual Property claiming or covering
the use of Delivery Devices for the administration of Nile Materials which shall
be considered Joint Intellectual Property) or manufacture (in whole or part) of
any such proprietary Medtronic delivery device which are conceived in or
otherwise resulting from the performance of the purpose of the Clinical Study,
regardless of inventorship.
 
1.1.19.         “Net Sales” means any gross invoice sales of Royalty Bearing
Products by Nile, Nile sub-licensees, or Nile assignees, as the case may be,
excluding sales, use, value added, occupation or excise taxes, and other taxes
based or imposed based on the transfer of a Product from one party to another or
the provision of a service, excluding freight, duty or insurance, and rebates,
refunds, exchanges, discounts and allowances for credits for the foregoing and
net of amounts written off by Nile.
 
1.1.20.         “Nile” means Nile Therapeutics, Inc.
 
1.1.21.         “Nile Background Intellectual Property” shall mean all
Intellectual Property and proprietary materials owned or otherwise controlled by
Nile on the Effective Date or developed or acquired by Nile independently of
this Agreement following the Effective Date.
 
1.1.22.         “Nile Improvements” shall mean Intellectual Property pertaining
to Nile Materials or the use (other than the Intellectual Property claiming or
covering the use of Delivery Devices for the administration of Nile Materials
which shall be considered Joint Intellectual Property) or manufacture (in whole
or part) of Nile Materials conceived in or otherwise resulting from the
performance of the Clinical Study, regardless of inventorship.
 
1.1.23.         “Nile Materials” shall mean Nile’s proprietary compounds,
materials or other substance as outlined on Exhibit A that are transferred to
Medtronic for completion of the Medtronic Studies, including but not limited to
CD-NP powdered peptide. Exhibit A shall be attached hereto and incorporated
herein as if fully set forth. Nile shall own all rights and title to Nile
Material.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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1.1.24.         “Nile Patents” means the following Intellectual Property:
 
Patent
 
First Named
Inventor
 
Publ. Date
US 6,407,211
 
BURNETT, et al
 
June 18, 2002
US 6,818,619
 
BURNETT, et al
 
November 16, 2004
US 7,384,917
 
BURNETT, et al
 
June 10, 2008
US 7,754,852
 
BURNETT, et al
 
July 13, 2010
US2002/0082219
 
BURNETT, et al
 
June 27, 2002
US2003/0069186
 
BURNETT, et al
 
April 10, 2003
US2005/0059600
 
BURNETT, et al
 
March 17, 2005
US2007/0042957
 
BURNETT, et al
 
February 22, 2007
US2008/0032933
 
BURNETT, et al
 
February 7, 2008
US2009/0054337
 
BURNETT, et al
 
February 26, 2009
US2009/0069243
 
BURNETT, et al
 
March 12, 2009
US2009/0170756
 
BURNETT, et al
 
July 2, 2009
EP1242452
 
BURNETT, et al
 
September 25, 2002
EP2171053
 
BURNETT, et al
 
April 7, 2010
WO2008112424
 
BURNETT, et al
 
September 18, 2008
WO2009015011
 
BURNETT, et al
 
January 29, 2009
WO2009086126
 
BURNETT, et al
 
July 9, 2009
WO2009149161
 
BURNETT, et al
 
December 10, 2009
WO2010002583
 
BURNETT, et al
 
January 7, 2010
WO2010078325
 
BURNETT, et al
 
July 8, 2010
WO2001044284
 
BURNETT, et al
 
June 21, 2001
WO2007035600
 
BURNETT, et al
 
March 29, 2007
61/408,320
 
LIEU, et al
 
Filed October 29, 2010
61/440,154
  
LIEU, et al
  
Filed February 7, 2011

 
The “Nile Patents” additionally include any divisional, continuation,
continuation-in-part, that is based on the above listed patents, and any patents
that shall issue on any of the above-listed patent applications or on any
improvements thereof, and any reissues and extensions thereof.
 
1.1.25.        “Parties” means Medtronic and Nile.
 
1.1.26.        “Product” means any Drug, Device, or Drug/Device combination
developed pursuant to the Agreement.
 
1.1.27.        “Protocol” means, with respect to any Clinical Study using the
Drug, the protocol for such clinical study prepared in accordance with Article
3.
 
1.1.28.        “Royalty Bearing Product(s)” means any Product or Products, the
manufacture, use or sale of which are covered or claimed in one or more issued
patents constituting Joint Intellectual Property.
 
1.1.29.        “Sponsor” means the company responsible for the clinical
investigation as defined in 21 CFR Part 312.3.
 
1.1.30.        “Third Party” means any party other than Nile and its Affiliates
and Medtronic and its Affiliates.
 
1.1.31         “Work Plan” shall mean the document attached hereto as Exhibit A.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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1.1.32         The following terms are defined in the following Sections:
 
Section
 
Term(s)
     
Recitals
 
“Medtronic Devices”
     
Recitals
 
“CDA”
     
Recitals
 
“MTA”
     
1.18
 
“Delivery Devices”
     
2.1
 
“Drug/Device Combination Therapy”
     
2.1
 
“Pumps”
     
2.1
 
“Sets”
     
2.2
 
“Collaboration and License Agreement”
     
3.1
 
“CRO”
     
4.2.1
 
“Indemnitor”
     
4.2.1
 
“Medtronic Indemnitees”
     
4.2.1
 
“Claim”
     
4.2.2
 
“Nile Indemnitees”
     
5.1
 
“Confidential Information”
     
5.1
 
“Disclosing Party”
     
5.1
 
“Receiving Party”
     
5.2
 
“SEC”
     
5.6
  
“Publications”

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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ARTICLE 2
PURPOSE AND SCOPE OF AGREEMENT
 
2.1    Purpose and Scope of Agreement.  The Parties will undertake a Drug-Device
testing program using Nile’s Drug (including specific and necessary formulations
of the Drug) in a Medtronic Device to permit the parties’ evaluation of
potential further testing and development of a Drug/Device combination therapy
(“Drug/Device Combination Therapy”).  The data generated from the testing
program may become part of Nile’s Investigational New Drug Application (IND)
and/or New Drug Application (NDA).  The initial work within the scope of the
Agreement will be a feasibility study designed by Nile under joint consent of
the Parties to assess the pharmacokinetics and pharmacodynamics of the Drug as
described in the Work Plan and Budget developed by the Parties and approved by
Medtronic (“Clinical Study”).  The Work Plan and Budget are attached hereto and
incorporated herein as Exhibit A and Exhibit B, respectively.  In connection
with the Clinical Study and as further set forth in the Work Plan, Medtronic
will provide Mini-Med® Paradigm Insulin Pumps (“Pumps”) and Sertable® Infusion
Sets (“Sets”) as further specified in the Work Plan.  Medtronic shall retain
ownership of the Pumps and Nile shall return the Pumps to Medtronic upon
completion of the Clinical Study.  As further set forth herein, a prior
Agreements between the parties shall be terminated and replaced by the terms of
this Agreement.
 
ARTICLE 3
RESPONSIBILITIES FOR CLINICAL STUDY
 
3.1    Nile Responsibilities for the Clinical Study (Sponsorship).  Nile shall
contract with a clinical research organization (“CRO”) to conduct the Clinical
Study to assess the pharmacokinetics and phamacodynamics of the Drug.  Nile
shall be the Sponsor for the Clinical Study, and will develop, subject to
Medtronic’s review and approval, the regulatory submissions and the Protocol for
the Clinical Study, which would include, and not be limited to:
 
 
Ÿ
Protocol and Informed Consent,

 
Ÿ
Investigator’s Brochure,

 
Ÿ
Data forms and Database,

 
Ÿ
Content review and development of the final report(s),

 
Ÿ
Drug and/or Device accountability and data requirements,

 
Ÿ
Adverse Events review and reports submitted to regulatory agencies, and

 
Ÿ
Submissions to regulatory agencies.

Nile is responsible for oversight of the Clinical Study.  Nile will conduct
investigator and center selection, and manage data collection and limited data
analysis conducted by the CRO.  Communication and meetings with any regulatory
agency regarding the Clinical Study would be conducted pursuant to joint
agreement of the Parties. Medtronic shall retain ownership of the Pumps provided
under this Agreement.  Nile agrees to return all Pumps to Medtronic upon the
conclusion of the Clinical Study or the termination of this Agreement, whichever
is sooner.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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3.2    Medtronic Responsibilities.  Pursuant to the Work Plan and Budget,
Medtronic will provide (i) the type and number of Medtronic Devices needed for
the Clinical Study, and (ii) its timely comments to and approvals of the
requisite components of the Clinical Study set forth herein.
 
3.3    Compliance with Laws.  Each Party will be responsible for ensuring that
its respective responsibilities under the Agreement comply with applicable GMP,
GLP and GCP requirements and all regulatory requirements for the filing and
prosecution of the regulatory approvals.  Both Parties will, as reasonably
necessary to assure safety and regulatory compliance, put into place and
maintain in cooperation with each other appropriate safety and regulatory
compliance procedures.
 
ARTICLE 4
OTHER RIGHTS AND OBLIGATIONS
 
4.1    Drug Supply Obligations of Nile.  During the Term of this Agreement, Nile
shall through a mutually agreed manufacturer use its reasonable efforts to
supply sufficient quantities of the Drug for the Clinical Study and for such
additional future supply needs as required by Medtronic for research governed by
an appropriate agreement between Nile and Medtronic.
 
4.2    Indemnification.
 
4.2.1.          Nile (“Indemnitor”) shall indemnify and hold harmless Medtronic
(or its Affiliates, officers, directors, employer or agents, which, together
with Medtronic, are collectively referred to as the “Medtronic Indemnitees”),
for any loss, claim, damage, expense or liability incurred by the Medtronic
Indemnitees including, but not limited to, attorneys’ fees, settlements and
costs of litigation and defense thereof resulting from any Third Party claim,
suit or proceeding arising from any of the following causes (each, a “Claim”):
 
(a)           Nile’s failure to have the Drug properly manufactured in
accordance with the applicable specifications or other breach of warranty
pertaining to the manufacture thereto;
 
(b)           Nile’s failure to comply with applicable law or regulations in
connection with the Drug or the conduct of the Clinical Study; or
 
(c)           Nile’s breach of a representation, warranty or covenant made by it
in this Agreement.
 
4.2.2.          Medtronic (“Indemnitor”) shall indemnify and hold harmless Nile
(or its Affiliates, officers, directors, employer or agents, which, together
with Medtronic, are collectively referred to as the “Nile Indemnitees”), for any
loss, claim, damage, expense or liability incurred by the Nile Indemnitees
including, but not limited to, attorneys’ fees, settlements and costs of
litigation and defense thereof resulting from any Third Party claim, suit or
proceeding arising from any of the following causes (each, a “Claim”):
 
(a)           Medtronic’s failure to comply with applicable law or regulations
in connection with the Devices, Drug or the conduct of the Clinical Study; or

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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(b)           Medtronic’s breach of a representation, warranty or covenant made
by it in this Agreement.
 
4.2.3.          The applicable Indemnitee agrees to notify the applicable
Indemnitor as soon as it becomes aware of any Claim and to cooperate with and
authorize Indemnitor to carry out the sole management and defense of any such
Claim.  The Indemnitee may not compromise or settle any Claim without the prior
written approval of Indemnitor.
 
4.3    Non-Compete Obligations.  During the term of this Agreement and any Work
Plans hereunder, and until the sooner of: (i) three (3) months following the
delivery to Medtronic of a final database with respect to any Clinical Study
hereunder, and (ii) fifteen (15) months after the Effective Date, Nile (either
itself or through Affiliates) shall not enter into an agreement with a third
party to develop or commercialize the Product.
 
ARTICLE 5
CONFIDENTIALITY
 
5.1              Confidential Information.  “Confidential Information” shall
mean any proprietary information or compilation of information of one of the
Parties (the “Disclosing Party”) which it discloses to the other Party (the
“Receiving Party”) that is not generally known to the public, including trade
secrets and know how, disclosed during the Term of this Agreement, excluding
information which:
 
5.1.1.          was already in the possession of the Receiving Party prior to
the Receiving Party’s receipt from the Disclosing Party (provided that the
Receiving Party is able to provide the Disclosing Party with reasonable proof
thereof);
 
5.1.2.          is or becomes known to the public by reason of acts not
attributable to the Receiving Party;
 
5.1.3.          is or becomes available to the Receiving Party from a source
other than the Disclosing Party which source has rightfully obtained such
information and has no obligation of non-disclosure or confidentiality (directly
or indirectly) to the Disclosing Party with respect thereto; or
 
5.1.4.          has been independently developed by the Receiving Party without
breach of this Agreement or use of any Confidential Information of the
Disclosing Party (provided that the receiving Party is able to provide the
Disclosing Party with reasonable proof thereof if requested).
 
All Confidential Information disclosed by one party to the other under this
Agreement (whether that of the Disclosing Party or a Third Party) must be in
writing and bear a legend “Proprietary”, “Confidential” or words of similar
import or, if disclosed in any manner other than in writing, shall be preceded
by an oral statement indicating that the information is proprietary or
confidential, and shall be followed by written summary of the information and
confirmation that such information is confidential by the Disclosing Party
within thirty (30) days.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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5.2    Confidentiality Obligations.  With respect to any Confidential
Information of a Party disclosed by it or its Affiliates to the other Party
during the Term of this Agreement, the Receiving Party agrees that such
Confidential Information shall be maintained in confidence by the Receiving
Party and its Affiliates, and that such Confidential Information shall not be
disclosed by the Receiving Party or its Affiliates to any Third Party without
the prior written consent of the Disclosing Party (except as permitted or
required for performance by the Receiving Party of its rights or duties
hereunder).  Notwithstanding the foregoing provisions of this Section 5.2,
either Party may disclose Confidential Information of the other Party or the
terms of this Agreement if such Party reasonably determines, based on advice
from its legal counsel, that it is required to make such disclosure by
applicable law, regulation or legal process, including by the rules or
regulations of the FDA or United States Securities and Exchange Commission (the
“SEC”) or similar regulatory agency(ies) in a country other than the United
States or of any stock exchange, in which event such Party shall provide prior
notice of such intended disclosure to such other Party sufficiently in advance
to enable the other Party to seek confidential treatment or other protection for
the Confidential Information subject to such requirement unless the Disclosing
Party is prevented by law or regulation from providing such advance notice,
shall disclose only such Confidential Information of such other Party as such
Disclosing Party reasonably determines is required to be disclosed, and shall
seek confidential treatment of any terms of this Agreement that the Disclosing
Party considers particularly sensitive, including the royalty rate terms of this
Agreement, from the SEC, similar regulatory agencies in countries other than the
United States, or any stock exchange.
 
5.3    Disclosures to Employees, Consultants, and Advisors.  Each Party agrees
that it and its Affiliates may provide Confidential Information received from
the other Party only to the Receiving Party’s respective employees, consultants
and advisors, and to the employees, consultants and advisors of the Receiving
Party’s Affiliates, who have a reasonable need to know such Confidential
Information, provided that each Party shall remain responsible for any failure
by its and its Affiliates’ respective employees, consultants and advisors to
protect such information and materials as required under this Article 5.
 
5.4    Term.  All confidentiality and limited use obligations imposed under this
Article 5 shall expire upon the later of five (5) years after the expiration or
termination of this Agreement or five (5) years following a Party’s receipt of
such Confidential Information.
 
5.5    Agreement Terms; Public Announcement.  Except for pre-approved statements
agreed upon in writing by the Parties regarding the existence of this Agreement
and the transactions contemplated hereby, neither Party will disclose to any
Third Party the terms of this Agreement or the transactions contemplated hereby,
nor issue any press release or public announcement regarding the existence of
the this Agreement or any provisions hereof or the transactions contemplated
hereby, without the other Party’s prior written consent; provided that, (i)
either Party is permitted to disclose the existence of this Agreement and its
contents in any filings with the SEC or any other governmental or
quasi-governmental authority (whether domestic or foreign) to the extent
required by law or regulation, (ii) the disclosing Party shall notify the other
Party in advance and in writing, (iii) the disclosing Party shall cooperate
reasonably with the non-disclosing Party to obtain an order or other reliable
assurance from the relevant governmental or quasi-governmental authority that
confidential treatment will be accorded to any information that is Confidential
Information, and (iv) neither party shall unreasonably withhold its approval.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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5.6    Publication of Clinical Trial Results.  For any Clinical Study under this
Agreement, the Parties agree to collaborate to publish the results of such
studies and agree that they will not independently publish, publicly disclose,
present or discuss any results of or information pertaining to the Clinical
Study until a joint publication is released; provided however, that if a Party
desires to withdraw from it participation in a joint publication, then the other
Party will have the right to publish the Clinical Study results in accordance
with the provisions of this section (the “Publishing Party”).  The requirements
of this Section 5.6 apply to all abstracts, articles, manuscripts, presentations
and other forms of publication regarding the results of activities performed
pursuant to such studies or trials (collectively, “Publications”).  Unless the
Publication is jointly authored by the Parties, the Publishing Party will
provide to the other Party a copy of the Publication for review to determine
whether Confidential Information is disclosed, to allow the other Party to
protect its rights in patentable or copyrightable materials, and to check for
technical correctness.  When requested by the other Party, the Publishing Party
will delay publication up to an additional forty-five (45) days to allow the
other Party to protect its right in patentable or copyrightable material.  If
notified by the other Party within the forty five (45) day review period that
such Publication contains Confidential Information, the Publishing Party shall
delete Confidential Information and the Parties shall come to a mutual agreement
upon any other technical and editorial corrections requested by the other Party
prior to publication or presentation.  Nile acknowledges that, per Medtronic’s
policy, Medtronic will not compensate Nile or any Healthcare Professional (as
defined below) who serve as authors or contributors on Publications for their
writing or editing activities. Nile agrees that any fees or costs related to
Publication writing or editing activities are not included in the Budget set
forth in Exhibit B. “Healthcare Professional” means any person, other than an
individual patient, in a position to purchase, lease, recommend, use, influence
or arrange for the purchase or lease of, or prescribe Medtronic
products.  Healthcare Professionals include, but are not limited to, physicians,
nurses, nurse practitioners, physician assistants, clinical PharmDs, clinical
psychologists, dentists, and surgeons.
 
ARTICLE 6
INTELLECTUAL PROPERTY; POTENTIAL SUBSEQUENT STUDIES AND COLLABORATION
 
6.1    Pre-existing Rights. Nothing contained herein shall affect the rights of
Medtronic in Medtronic Background Intellectual Property or the rights of Nile in
Nile Background Intellectual Property or Nile Materials. However, to the extent
that Medtronic and Nile have the legal right and ability to do so, each party
hereby grants to the other party a non-exclusive, royalty-free right to use the
other party’s Background Intellectual Property, or Nile Materials solely for
completing the Clinical Study.  Such right shall terminate upon the sooner of
the expiration or termination of this Agreement.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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6.2    Potential Subsequent Studies and Collaboration. At the completion of the
Clinical Study, the Parties will discuss in good faith an additional
“Collaboration and License Agreement” governing any future work to be conducted
in connection with the Drug; provided, however, that entry into any such
additional agreement shall be within the sole discretion of the parties.
 
6.3    Medtronic Improvements. All rights and title to Medtronic Improvements
shall vest in Medtronic. Medtronic Improvements shall be considered Confidential
Information of Medtronic and will be subject to the terms of this Agreement.
Nile herby assigns, and shall assign any interest in Medtronic Improvements to
Medtronic.
 
6.4    Nile Improvements. All rights and title to Nile Improvements shall vest
in Nile. Nile Improvements shall be considered Confidential Information of Nile
and will be subject to the terms of this Agreement. Medtronic herby assigns, and
shall assign any interest in Nile Improvements to Nile.
 
6.5    Joint Intellectual Property. All right and title to Joint Intellectual
Property and Clinical Data shall vest jointly in Nile and Medtronic and the
Parties shall each take such steps as may be reasonably requested by the other
to secure the joint ownership interests of the Parties.  Nile inventors hereby
assigns and shall assign to Nile, and Medtronic inventors hereby assigns and
shall assign to Medtronic their respective interests to Joint Intellectual
Property. One Party will promptly furnish the other Party an invention
disclosure naming joint inventors of any Joint Intellectual Property.
 
6.6    Royalty.   Nile will pay Medtronic a royalty equal to [***] percent
([***]%) of Net Sales.  Royalties shall be paid on a Royalty Bearing
Product-by-Royalty Bearing Product and country-by-country basis until the
expiration in each country of the last to expire of the issued patents
constituting Joint Intellectual Property in such country covering the
manufacture, use, offer for sale or sale of such Royalty Bearing Product.
 
6.7    Timing of Royalty Payments.  Royalty payments shall be paid in quarterly
installments, within 60 days following the end of each calendar quarter.
 
6.8    No Deductions from Payments.  Nile shall be solely responsible for
payment of any fee, royalty or other payment due to any third party in
connection with the research, development, manufacture, distribution, use, sale,
import or export of a Royalty Bearing Product, and Nile shall not have the right
to set off any amounts paid to such third party, including fee, royalty or other
payment, against any amount payable to Medtronic hereunder.
 
6.9    Single Royalty.  Only a single royalty payment shall be due and payable
on Net Sales of a Royalty Bearing Product, regardless if such Royalty Bearing
Product is covered by more than one Valid Claim.
 
6.10  Royalty Reports.  Within 60 days after the end of each calendar quarter in
which a royalty payment under this Article 6 is required to be made, Nile shall
send to Medtronic a report of Net Sales for which a royalty is due, which report
sets forth for such calendar quarter the following information: (i) total Net
Sales sold during such calendar quarter, (ii) Net Sales on a country-by-country
basis, (iii) gross sales on a country-by-country basis, (iv) quantity of Royalty
Bearing Products sold, (v) the exchange rate used to convert Net Sales from the
currency in which they are earned to United States dollars; and (vi) the total
royalty payments due.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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6.11  Currency.  All payments to be made under this Agreement shall be made in
United States dollars, unless expressly specified to the contrary herein.  Net
Sales outside of the United States shall be first determined in the currency in
which they are earned and shall then be converted into an amount in United
States dollars.  All currency conversions shall use the conversion rate reported
by a mutually acceptable foreign exchange rate data source on the last Business
Day of the calendar quarter for which such payment is being determined.
 
6.12  Method of Payment.  Amounts due under this Agreement shall be paid in
immediately available funds, by means of wire transfer to an account identified
by Medtronic.
 
6.13  Withholding of Taxes.  Nile may withhold from payments due to Medtronic
amounts for payment of any withholding tax that is required by law to be paid to
any taxing authority with respect to such payments.  Nile shall provide to
Medtronic all relevant documents and correspondence, and shall also provide to
Medtronic any other cooperation or assistance on a reasonable basis as may be
necessary to enable Medtronic to claim exemption from such withholding taxes and
to receive a full refund of such withholding tax or claim a foreign tax
credit.  Nile shall give Medtronic proper evidence from time to time as to the
payment of such tax.  The Parties shall cooperate with each other in seeking
deductions under federal and state tax laws and any double taxation or other
similar treaty or agreement from time to time in force.  Such cooperation may
include Nile making payments from a single source in the U.S., where possible.
 
6.14  Late Payments.  Any amounts not paid on or before the date due under this
Agreement are subject to interest from the date due through and including the
date upon which payment is received.  Interest is calculated, over the period
between the date due and the date paid, at a rate equal to [***] percentage
point ([***]%) over the “bank prime loan” rate, as such rate is published in the
U.S. Federal Reserve Bulletin H.15 or successor thereto on the last business day
of the applicable calendar quarter prior to the date on which such payment is
due.
 
6.15  Blocked Currency.  If, at any time, legal restrictions prevent the prompt
remittance of part or all royalties with respect to any country where a Royalty
Bearing Product is sold, payment shall be made through such lawful means or
methods.  When in any country, the law or regulations prohibit both the
transmittal and deposit of royalties or other payments; Nile shall continue to
report all such amounts, but may suspend payment for as long as such prohibition
is in effect.  As soon as such prohibition ceases to be in effect, all amounts
that would have been obligated to be transmitted or deposited but for the
prohibition, together with accrued interested thereon, shall promptly be
transmitted to Medtronic.
 
6.16  Records.  Nile shall keep, and shall require that each sublicensee keep,
full, true and accurate books of account containing the particulars of its Net
Sales and the calculation of royalties.  Nile and its sublicensees shall each
keep such books of account and the supporting data and other records at its
principal place of business.  Such books and records must be maintained
available for examination in accordance with this Section 6.16 for five (5)
calendar years after the end of the calendar year to which they pertain, and
otherwise as reasonably required to comply with Generally Accepted Accounting
Principles (“GAAP”).

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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6.17  Appointment of Auditor.  Medtronic may appoint an
internationally-recognized independent accounting firm reasonably acceptable to
Nile to inspect the relevant books of account of Nile and its sublicensee to
verify any reports or statements provided, or amounts paid or invoiced (as
appropriate), by Nile or its Sublicensees.
 
6.18  Procedures for Audit.  Medtronic may exercise its right to have Nile’s and
its sublicensees’s relevant records examined only during the three year period
during which Nile is required to maintain records, no more than once in any
consecutive four calendar quarters.  Nile and its Sublicensees are required to
make records available for inspection only during regular business hours, only
at such place or places where such records are customarily kept, and only upon
receipt of at least fifteen (15) days advance notice from Medtronic.
 
6.19  Audit Report. The independent accountant will be instructed to provide to
Medtronic an audit report containing its conclusions regarding the audit, and
specifying whether the amounts paid were correct, and, if incorrect, the amount
of any underpayment or overpayment.
 
6.20  Underpayment and Overpayment.  After review of the auditor’s report:  (i)
if there is an uncontested underpayment by Nile for all of the periods covered
by such auditor’s report, then Nile shall pay to Medtronic the full amount of
that uncontested underpayment, and (ii) if there is an uncontested overpayment
for such periods, then Medtronic shall provide to Nile a credit against future
payments (such credit equal to the full amount of that overpayment), or, if Nile
is not obligated to make any future payments, then Medtronic shall pay to Nile
the full amount of that overpayment.  If the total amount of any such
underpayment exceeds five percent (5%) of the amount previously paid by Nile for
the period subject to audit, then Nile shall pay the reasonable costs for the
audit.  Otherwise, all costs of the audit shall be paid by Medtronic.
 
6.21  Right of First Negotiation. In the event that the Parties fail to enter
into a definitive commercial license agreement with respect to Nile Materials
within fifteen months following the Effective Date, each Party shall have a
right of first negotiation to license exclusive rights of any Joint Intellectual
Property, as provided in this Section 6.21.  Each Party shall promptly disclose
to the other Party any patentable invention conceived, solely or jointly with
others, by its employees, contractors or agents in the performance of the Work
Plan and constituting Joint Intellectual Property.  Within fifteen months
following the Effective Date, the Party receiving such disclosure shall advise
the Party making such disclosure whether it has an interest in securing an
exclusive license to such invention and all patent rights covering or claiming
such invention. If the Party receiving such disclosure notifies the disclosing
Party of its interest in securing an exclusive license during such fifteen month
period, the Parties shall enter into good faith exclusive negotiations for 90
days following the date of such notice. If, at that the end of such 90 day
period, the Parties have not entered into such a license, each Party shall be
free to exploit its interest in such patentable invention and associated patent
rights as it deems appropriate, without the consent of and without accounting to
the other Party.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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ARTICLE 7
BUDGET, PAYMENT AND FINANCIAL REPORTING

7.1     Budget. Attached hereto in Exhibit B is a budget reflecting Medtronic’s
payment obligations with respect to the Work Plan.  Medtronic shall not be
obligated to pay any amounts to Nile with respect to the Work Plan other than as
set forth in the Budget.  If it shall appear to Nile that the amounts specified
in any line item of the Budget shall be exceeded in connection with the Work
Plan, Nile shall so inform Medtronic as soon as reasonably possible and Nile and
Medtronic shall determine whether the Budget should be amended to provide for
such excess amounts.
 
7.2     Payment Milestones.  Medtronic will make payments to Nile for
progression on the work plan according to the milestone payment structure
specified in the Budget. Upon achievement of each specified milestone, Nile will
provide email confirmation to Medtronic addressed to Maura Donovan at
[***]@medtronic.com and submit and invoice to the following address
 
Medtronic, Inc.
710 Medtronic Parkway
Mail Stop LT220
Minneapolis, MN 55432-5604 USA
Attn.:  Maura Donovan

7.3     Payment.  Medtronic shall make payments to Nile within forty-five (45)
days of receiving an invoice from Nile. Payments shall be made by wire transfer
to:
 
Citibank, NA
640 Fifth Avenue
New York, NY 10019
Account # [***]
ABN# [***]

7.4     Financial Reporting.  Nile shall provide Medtronic with a quarterly
financial report of all expenses incurred for the purpose of the Clinical Study
in accordance with the Budget.  Each report shall be emailed Maura Donavan, Vice
President Corporate Life Sciences, Medtronic, Inc. at [***]@medtronic.com, or
such other Medtronic personnel which Medtronic may designate.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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ARTICLE 8
PRIOR AGREEMENTS BETWEEN THE PARTIES
 
8.1      Confidentiality Agreement.  The CDA is hereby terminated in its
entirety effective as of the Effective Date of this Agreement and replaced by
the confidentiality provisions set forth herein.
 
8.2      Material Transfer Agreement.  The MTA shall continue in full force and
effect until it expires or is terminated in accordance with its terms.
 
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
 
9.1      Representations and Warranties of Nile.  Nile represents and warrants
to Medtronic as follows:
 
9.1.1.          Nile has full power and authority to enter into this Agreement
and to perform its obligations hereunder.
 
9.1.2.          This Agreement has been duly authorized, executed and delivered
by Nile and constitutes a legal, valid and binding agreement of Nile enforceable
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights and to general equity principles.
 
9.1.3.          Neither the execution and delivery of this Agreement nor
compliance by Nile with this Agreement’s terms and provisions will violate (a)
any provisions of the agreements governing Nile’s conduct or operation, (b) any
material contract, license, franchise or permit to which Nile is a party or by
which it is bound, or (c) to the knowledge of Nile, any law, statute,
regulation, injunction, order or decree of any government agency or authority or
court to which any of said entity is subject.
 
9.1.4.          Nile is not aware of and has not received any communications
challenging the ownership, validity or effectiveness of any of its patents,
patent applications, licenses, trade secrets or other intellectual property
required for the performance by Nile of its obligations under this Agreement.
 
9.1.5.          To the best knowledge and belief of Nile’s Chief Executive
Officer and Chief Financial Officer: (i) Nile is the owner or exclusive licensee
of the entire right, title, and interest in and to the Nile Patents; (ii) Nile
has the right and power to grant future licenses; (iii) there are no other
agreements with any other party in that would conflict with the grant of
licenses under the Nile Patents; and (iv) there no prior art that would
invalidate the Nile Patents.
 
9.2      Representations and Warranties of Medtronic.  Medtronic represents and
warrants to Nile as follows:

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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9.2.1.           Medtronic has full corporate power and authority to enter into
this Agreement and to perform its respective obligations hereunder.
 
9.2.2.           This Agreement has been duly authorized, executed and delivered
by Medtronic and constitutes a legal, valid and binding agreement of said party
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and to general equity
principles.
 
9.2.3.           Neither the execution and delivery of this Agreement nor
compliance by Medtronic with this Agreement’s terms and provisions will violate
(a) any provisions of the articles of incorporation or bylaws of Medtronic, (b)
any material contract, license, franchise or permit to which Medtronic is a
party or by which it is bound, or (c) to the knowledge of Medtronic, any law,
statue, regulation, injunction, order or decree of any government agency or
authority or court to which said entity is subject.
 
9.3       Warranty Disclaimer.  The Parties acknowledge that the Clinical Study
(and potentially any subsequent clinical studies under this Agreement) are
experimental in nature and subject to all the risks (including risks of delay in
the project) associated with human research and drug and/or medical device
product development.  As such, neither Party makes any representation, warranty
or guarantee that this Agreement will produce successful regulatory approvals to
commercialize the Drug with Medtronic Devices.  EXCEPT AS OTHERWISE EXPRESSLY
SET FORTH IN THIS AGREEMENT, THE PARTIES MAKE NO OTHER REPRESENTATIONS AND
EXTEND NO OTHER WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED.
 
ARTICLE 10
TERM AND TERMINATION
 
10.1    Term.  This Agreement shall take effect on the Effective Date and shall
remain in effect until the earlier of the completion of the Clinical Study or
termination pursuant to this Article 10.
 
10.2    Termination Rights.
 
10.2.1.        A Party may terminate this Agreement (a) with Cause, or (b) due
to the other Party’s Bankruptcy Event immediately upon delivery of a written
notice to the other Party.
 
10.2.2.        Medtronic may terminate this Agreement without Cause at any time
upon ninety (90) days written notice to Nile, provided Medtronic shall be
obligated to pay Nile for any non-cancelable costs Nile incurred prior to the
effective date of termination.  Nile shall not terminate this Agreement before
the Clinical Study is fully concluded, except pursuant to Sections 10.2.1 or
10.2.3.
 
10.2.3.        The Parties may terminate this Agreement (a) without Cause at any
time for reasons related to the safety, efficacy, toxicity or formulation of the
Drug, or for a failure of any Clinical Study to meet its endpoints; or (b)
through a written document signed by authorized representatives of each Party
specifically agreeing to the termination of this Agreement.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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10.3    Preservation of Licenses in Bankruptcy.  If Nile should file a petition
under bankruptcy laws, or if any involuntary petition shall be filed against
Nile, Medtronic shall be protected in the continued enjoyment of its rights as
licensee hereunder to the maximum feasible extent including, if it so elects,
the protection conferred upon licensees under Section 365(n) of Title 11 of the
U.S. Code, or any similar provision of any applicable law.
 
10.4    Survival.  Notwithstanding the foregoing sections of this Article 10,
and in addition to provisions of this Agreement that survive by their own
express terms, the Parties’ respective ongoing rights and obligations under
Sections 2, 3, 4.2, 5, 6, 10 and 11 shall survive termination of this Agreement
hereunder.
 
10.5    No Consequential or Punitive Damages.  EXCEPT FOR A BREACH OF A PARTY’S
CONFIDENTIALITY OBLIGATIONS UNDER ARTICLE 5, NEITHER PARTY HERETO SHALL BE
LIABLE TO PAY THE OTHER PARTY COMPENSATION, REIMBURSEMENT OR DAMAGES FOR SUCH
OTHER PARTY’S INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY, MULTIPLE
OR PUNITIVE DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF PROSPECTIVE PROFITS OR
ANTICIPATED SALES, FOR SUCH OTHER PARTY’S EXPENDITURES, INVESTMENTS, OR
COMMITMENTS IN CONNECTION WITH ITS BUSINESS OR GOODWILL, OR FOR ANY OTHER REASON
WHATSOEVER, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES.  NOTHING IN THIS SECTION
10.5 IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS.
 
ARTICLE 11
MISCELLANEOUS
 
11.1    Successors and Assigns.  The rights or obligations of the parties hereto
may not be assigned without the prior written consent of the other Party;
provided that the rights of either Party may be assigned by it to an Affiliate
of such Party or to such business organization which shall succeed to
substantially all the assets and business of such Party or such subsidiary or
business to which this Agreement relates.  Subject to the foregoing, the
provisions of this Agreement shall inure to the benefit of, and be binding upon,
the permitted successors and assigns of the parties hereto.
 
11.2    Notices.  All notices or other communications to a party required or
permitted hereunder shall be in writing and shall be given by hand delivery,
courier service (with acknowledgement of receipt), telecopy (with confirmation
of transmission), or by certified mail, postage prepaid with return receipt
requested, to the following person at the following address:

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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If to Nile:
Nile Therapeutics, Inc
West 4th Avenue, Suite 400,
San Mateo, California 99402
Attn.: Daron Evans
FAX: [***]

If to Medtronic:

Medtronic, Inc.
710 Medtronic Parkway
Mail Stop LT220
Minneapolis, MN 55432-5604 USA
Attn.:  Maura Donovan
FAX:  [***]

With a copy to:

Medtronic, Inc.
710 Medtronic Parkway
Minneapolis, MN  55432 USA
Attn.:  Margaret Price
FAX:  [***]
 
Any party may change the above-specified recipient and/or mailing address by
notice to all other parties given in the manner herein prescribed.  All notices
shall be deemed given on the day when actually delivered as provided above (if
delivered personally or by telecopy) or on the day shown on the return receipt
(if delivered by mail).
 
11.3   Waiver.  The failure of a party to enforce, at any time, any of the
provisions of this Agreement, or to require at any time performance by the other
parties of any of the provisions hereof, shall in no way be construed to be a
waiver of such provisions, nor in any way to affect the validity of this
Agreement or any part thereof, or the right of a party to thereafter enforce
each and every such provision.

 
11.4    Severability.  If any provision of this Agreement is held to be
unenforceable or illegal, the other provisions of this Agreement shall not be
affected by any such holding and shall remain in full force and effect.  In such
event the parties shall use all reasonable efforts to replace any such
unenforceable or illegal provision with a provision reflecting as nearly as
possible the intent, purpose and economic effect of such provision.
 
11.5    Independent Contractor.  Each party shall act solely as an independent
contractor.  Nothing in this Agreement shall be construed to give either party
the power of authority to act for, bind, or commit the other party.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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11.6    Headings and Numbering.  The headings and numbering are inserted and
included solely for convenience and reference and shall not be considered or
given any effect in construing this Agreement or any part hereof.  This
Agreement shall be interpreted without regard to any rule or presumption
favoring interpretation hereof against the party causing this Agreement to be
drafted.
 
11.7    Entire Agreement.  This Agreement, including its exhibits and schedules
hereto, supersedes all prior oral agreements and understandings between the
Parties, as well as the CDA (which shall be deemed to be terminated as of the
Effective Date of this Agreement) with respect to the subject matter
hereof.  This Agreement may be modified, amended or changed only by a written
instrument signed by the parties.
 
11.8    Survival.  All of the representations, warranties, and indemnifications
made in this Agreement, and all terms and provisions hereof intended to be
observed and performed by the parties after the termination hereof, shall
survive such termination and continue thereafter in full force and effect,
subject to applicable statute of limitations.
 
11.9    Governing Law.  The legality, validity, enforceability and
interpretation of this Agreement shall be governed by the laws of the State of
New York, without giving effect to the principles of conflict of laws.
 
11.10  Expenses.  Except as expressly provided herein, Medtronic and Nile shall
each bear its own expenses incurred on its behalf with respect to this Agreement
and the transactions contemplated herein and therein.
 
11.11  Benefit.  Nothing in this Agreement or the agreements referred to herein,
expressed or implied, shall confer on any person other than the parties hereto
or thereto, or their respective permitted successors or assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement, the
agreements referred to herein, or the transactions contemplated herein or
therein.
 
11.12  Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall be considered one and the same instrument.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
date first above written.

NILE THERAPEUTICS, INC.
     
/s/ Daron Evans
 
By:  Daron Evans
     
MEDTRONIC, INC.
     
/s/ Richard E. Kuntz
 
By:  Richard E. Kuntz
 

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
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Exhibit A

Work Plan

[***]

Exhibit redacted in its entirety

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
 

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Exhibit B

Budget For Clinical Study in Work Plan

[***]

Exhibit redacted in its entirety

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
 

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