Document:

Unassociated Document

    ______________________________________

    

    AMENDMENT
      NO. 1

    Dated
      as
      of August 17, 2006

    to

    POOLING
      AND SERVICING AGREEMENT

    Dated
      as
      of June 1, 2006

    among

    NOMURA
      HOME EQUITY LOAN, INC.,

    Depositor

    NOMURA
      CREDIT & CAPITAL, INC.,

    Sponsor
      

    WELLS
      FARGO BANK, NATIONAL ASSOCIATION,

    Master
      Servicer and Securities Administrator

    and

    HSBC
      BANK
      USA, NATIONAL ASSOCAITION

    Trustee
      

    ______________________________________

    

    NOMURA
      HOME EQUITY LOAN, INC.

     

    ASSET-BACKED
      CERTIFICATES, SERIES 2006-WF1

    ______________________________________

    

    THIS
      AMENDMENT NO. 1, dated as of August 17, 2006 (this “Amendment”), to the Pooling
      and Servicing Agreement, dated as of June 1, 2006, among NOMURA HOME EQUITY
      LOAN, INC., as depositor (the “Depositor”), NOMURA CREDIT & CAPITAL, INC.,
      as sponsor (the “Sponsor”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as master
      servicer (the “Master Servicer”) and securities administrator (the “Securities
      Administrator”) and HSBC BANK USA, NATIONAL ASSOCIATION, as trustee (the
“Trustee”) (the “Pooling and Servicing Agreement”).

    

    W
      I T N E
      S S E T H

    

    WHEREAS,
      the Depositor, the Sponsor, the Master Servicer, the Securities Administrator
      and the Trustee entered into the Pooling and Servicing Agreement;

    

    WHEREAS,
      the Depositor, the Sponsor and Bear Stearns Financial Products, Inc. (the “Swap
      Provider”) desire to amend the Pooling and Servicing Agreement to supplement the
      provisions contained therein with respect to the exercise of the Optional
      Termination as it relates to the termination of the Swap Agreement;

    

    WHEREAS,
      Section 11.01 of the Pooling and Servicing Agreement provides that the Pooling
      and Servicing Agreement may be amended from time to time by the parties thereto,
      without the consent of any of the Certificateholders, to correct or supplement
      any provisions contained therein upon the satisfaction of certain conditions
      set
      forth therein including, without limitation, the consent of the Swap Provider
      if
      such amendment would adversely affect in any material respect the interests
      of
      the Swap Provider under the Pooling and Servicing Agreement;

    

    NOW,
      THEREFORE, the parties hereto agree as follows:

    

    SECTION
      1. Defined Terms.

    

    For
      purposes of this Amendment, unless the context clearly requires otherwise,
      all
      capitalized terms which are used but not otherwise defined herein shall have
      the
      respective meanings assigned to such terms in the Pooling and Servicing
      Agreement.

    

    SECTION
      2. The Amendment.

    

    (a)
      Section 1.01 of the Pooling and Servicing Agreement is hereby amended by adding
      the following defined term thereto::

    

    Estimated
      Swap Termination Payment:
      As
      defined in the Swap Agreement.

     

    (b)
      Section 10.02 of the Pooling and Servicing Agreement is hereby amended by
      deleting the last sentence of the first paragraph and the third and fourth
      paragraphs thereof and replacing such provisions with the
      following:

    

    In
      connection with the exercise of the Optional Termination, four Business Days
      prior to the final Distribution Date specified in the notice required pursuant
      to the second paragraph of this Section 10.02, the Securities Administrator
      shall, no later than 4:00 pm New York City time on such day, request from the
      Swap Provider the amount of the Estimated Swap Termination Payment. The Swap
      Provider shall, no later than 2:00 pm on the following Business Day, notify
      in
      writing (which may be done in electronic format) the Securities Administrator
      of
      the amount of the Estimated Swap Termination Payment; the Securities
      Administrator shall promptly on the same day notify the Master Servicer of
      the
      amount of the Estimated Swap Termination Payment. 

    

    Two
      Business Days prior to the final Distribution Date specified in the notice
      required pursuant to the second paragraph of this Section 10.02, (i) the Master
      Servicer shall, no
      later than 1:00 pm New
      York
      City time on such day, deposit funds in the Distribution Account in an amount
      equal to the Termination Price (other than the Swap Termination Payment) and
      the
      Estimated Swap Termination Payment, and (ii) if the Securities Administrator
      shall have determined that the aggregate Stated Principal Balance of all of
      the
      Mortgage Loans in the Trust Fund as of the related Determination Date is
not
      more than 10% of the aggregate Cut-off Date Principal Balance of all of the
      Mortgage Loans
      and that
      all other requirements of the Optional Termination have been met, including
      without limitation the deposit required pursuant to the immediately preceding
      paragraph as well as the requirements specified in Section 10.03, then the
      Securities Administrator shall, on the same Business Day, provide written notice
      to the Master Servicer, the Depositor, the Supplemental Interest Trust Trustee,
      the Trustee, the Custodian and the Swap Provider confirming (a) its receipt
      of
      the Termination Price (other than the Swap Termination Payment) and the
      Estimated Swap Termination Payment and (b) that all other requirements of the
      Optional Termination have been met. Upon the Securities Administrator’s
      providing the notice described in the preceding sentence, the Optional
      Termination shall become irrevocable, the notice to Certificateholders of such
      Optional Termination provided pursuant to the second paragraph of this Section
      10.02 shall become unrescindable, the Swap Provider shall determine the Swap
      Termination Payment in accordance with the Swap Agreement, and the Swap Provider
      shall provide to the Securities Administrator written notice of the amount
      of
      the Swap Termination Payment not later than one Business Day prior to the final
      Distribution Date specified in the notice required pursuant to the second
      paragraph of this Section 10.02. 

    

    In
      connection with the Optional Termination, only an amount equal to the
      Termination Price less any Swap Termination Payment shall be made available
      for
      distribution to the Regular Certificates. Any Estimated Swap Termination Payment
      deposited into the Distribution Account by the Master Servicer shall be
      withdrawn by the Securities Administrator from the Distribution Account on
      the
      final Distribution Date and distributed as follows: (i) to the Supplemental
      Interest Trust for payment to the Swap Provider in accordance with Section
      5.11(b), an amount equal to the Swap Termination Payment calculated pursuant
      to
      the Swap Agreement, provided that in no event shall the amount distributed
      to
      the Swap Provider in respect of the Swap Termination Payment exceed the
      Estimated Swap Termination Payment, and (ii) to the Master Servicer, an amount
      equal to the excess, if any, of the Estimated Swap Termination Payment over
      the
      Swap Termination Payment. The Swap Termination Payment shall not be part of
      any
      REMIC and shall not be paid into any account which is part of any REMIC.

    

    Upon
      certification to the Trustee by the Securities Administrator of the deposit
      of
      the Termination Price in the Distribution Account, the Trustee shall promptly
      release or cause to be released to the Master Servicer the Mortgage Files for
      the remaining Mortgage Loans, and the Trustee shall execute all assignments,
      endorsements and other instruments delivered to it and necessary to effectuate
      such transfer.

     

    SECTION
      2. Effect of Amendment.

    

    Upon
      execution of this Amendment, the Pooling and Servicing Agreement shall be,
      and
      be deemed to be, modified and amended in accordance herewith and the respective
      rights, limitations, obligations, duties, liabilities and immunities of the
      parties to the Pooling and Servicing Agreement shall hereafter be determined,
      exercised and enforced subject in all respects to such modifications and
      amendments, and all the terms and conditions of this Amendment shall be deemed
      to be part of the terms and conditions of the Pooling and Servicing Agreement
      for any and all purposes. Except as modified and expressly amended by this
      Amendment, the Pooling and Servicing Agreement is in all respects ratified
      and
      confirmed, and all the terms, provisions and conditions thereof shall be and
      remain in full force and effect.

    

    SECTION
      3. Binding Effect.

    

    The
      provisions of this Amendment shall be binding upon and inure to the benefit
      of
      the respective successors and assigns of the parties hereto, and all such
      provisions shall inure to the benefit of the parties to the Pooling and
      Servicing Agreement and the Swap Provider.

    

    SECTION
      4. Governing Law.

    

    This
      Amendment shall be construed in accordance with the substantive laws of the
      State of New York (without regard to conflict of law principles) and the
      obligations, rights and remedies of the parties hereto shall be determined
      in
      accordance with such laws.

    

    SECTION
      5. Severability of Provisions.

    

    If
      any
      one or more of the provisions or terms of this Amendment shall be for any reason
      whatsoever held invalid, then such provisions or terms shall be deemed severable
      from the remaining provisions or terms of this Amendment and shall in no way
      affect the validity or enforceability of the other provisions or terms of this
      Amendment.

    

    SECTION
      6. Section Headings.

    

    The
      section headings herein are for convenience of reference only, and shall not
      limit or otherwise affect the meaning hereof.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECTION
      7. Counterparts.

    

    This
      Amendment may be executed in several counterparts, each of which shall be an
      original and all of which shall constitute but one and the same
      instrument.

    

    [signature
      pages follow]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the Depositor, the Sponsor, the Master Servicer, the Securities
      Administrator and the Trustee have caused their names to be signed hereto by
      their respective officers thereunto duly authorized as of the day and year
      first
      above written.

    

    
      	
              NOMURA
                HOME EQUITY LOAN, INC.,

              as
                Depositor

            
	 	 
	
              By:

            	
              /s/
                John P. Graham

            
	
              Name:

            	
              John
                P. Graham

            
	
              Title:

            	
              Managing
                Director

            
	 
	 
	
              NOMURA
                CREDIT & CAPITAL, INC.,

              as
                Sponsor 

            
	 	 
	
              By:

            	
              /s/
                Timothy P. Crowley

            
	
              Name:

            	
              Timothy
                P. Crowley

            
	
              Title:

            	
              Vice
                President

            
	 
	 
	
              WELLS
                FARGO BANK, NATIONAL ASSOCIATION, 

              as
                Master Servicer and Securities Administrator

            
	 	 
	
              By:

            	
              /s/
                Amy Doyle

            
	
              Name:

            	
              Amy
                Doyle

            
	
              Title:

            	
              Vice
                President

            
	 
	 
	
              HSBC
                BANK USA, NATIONAL ASSOCIATION, 

              as
                Trustee 

            
	 	 
	
              By:

            	
              /s/
                Elena Zheng

            
	
              Name:

            	
              Elena
                Zheng

            
	
              Title:

            	
              Assistant
                Vice President

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
              CONSENTED
                AND AGREED:

               

              BEAR
                STEARNS FINANCIAL PRODUCTS, INC.,

              as
                Swap Provider

            
	 	 
	
              By:

            	
              /s/
                F. Scott Herman

            
	
              Name:

            	
              F.
                Scott Herman

            
	
              Title:

            	
              DPC
                Manager<PAGE>

                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

     This Employment Agreement (this "Agreement"), is executed and entered into
by and between Nastech Pharmaceutical Company Inc., a Delaware corporation (the
"Company"), with offices at 3450 Monte Villa Parkway, Bothell, Washington and
Paul H. Johnson, Ph.D., an individual resident in the State of Washington (the
"Executive"), effective November 1, 2006 (the "Effective Date").

                                   WITNESSETH:

     WHEREAS, in contemplation of the Executive's retirement and the transition
of his responsibilities to his successor, the Company and the Executive wish to
enter into this Agreement which shall set forth the Executive's terms of
employment as Chief Scientific Officer;

     NOW THEREFORE, in consideration of the mutual promises and agreements
herein and for other good and valuable consideration the receipt and sufficiency
of which are hereby mutually acknowledged, the Company and the Executive agree
as follows:

     1. Application and Effectiveness of Agreements. Effective as of the
Effective Date, this Agreement shall govern (i) the employment relationship
between the Company and the Executive and (ii) other matters as set forth
herein. Other agreements, as applicable, between the Company and the Executive
shall continue to govern the employment of the Executive by the Company prior to
the Effective Date and matters growing out of that employment.

     2. Employment; Responsibilities and Authority; Definitions.

          (a) Subject to the terms and conditions of this Agreement, the Company
shall employ the Executive as its Chief Scientific Officer during the Employment
Period (as defined in Section 3, below) and the Executive shall perform such
acts and duties and furnish such services to the Company and its Subsidiaries
(as defined below) as the Chief Executive Officer of the Company shall from time
to time direct.

          (b) Subject to the terms and conditions of this Agreement, the
Executive hereby accepts such employment and agrees to devote his full time and
continuous best efforts to the duties provided for herein.

          (c) For purposes of this Agreement: (1) the "Business of the Company"
means the description of the Company's business as is described in Part I, Item
1 of the Company's most recent Annual Report on Form 10-K filed with the U.S.
Securities and Exchange Commission, and (2) the term "Subsidiary" means a
corporation or other entity that is at least majority owned, directly or
indirectly, by the Company.

     3. Term; Employment Period. The "Employment Period" under this Agreement
shall commence on the Effective Date and shall terminate at the close of
business on October 6,

<PAGE>

2007 unless it is extended by written agreement between the parties or earlier
terminated pursuant to Section 10 hereof.

     4. Salary. For services rendered to the Company during the Employment
Period, the Company shall compensate the Executive with a base salary, payable
in semi-monthly installments, which initially shall be two hundred thirty-nine
thousand, two hundred dollars and eight cents ($239,200.08) per annum commencing
on the Effective Date and which shall thereafter be set by the Board of
Directors of the Company (the "Board") and/or the Chief Executive Officer from
time to time as determined by the Board and/or the Chief Executive Officer.

     5. Incentive Cash Compensation.

          (a) For the Company's fiscal year that began on January 1, 2006, and
for each subsequent fiscal year or portion thereof during the Employment Period,
the Executive shall also be eligible to receive incentive cash compensation
based on the Executive's performance in relation to the performance areas and
performance targets which the Chief Executive Officer and/or the Board shall
determine and communicate to the Executive as described below (the "Annual Bonus
Plan"). The targeted amount of such Annual Bonus Plan shall be forty percent
(40%) of the Executive's base salary for such year; provided, however, that the
Executive and the Company acknowledge that the amount actually paid to the
Executive pursuant to this Section 5 for any fiscal year or portion thereof may
be more or less than said targeted amount, and that (i) the Executive shall only
be eligible to receive a bonus for fiscal year 2006 (or any portion thereof)
provided that (A) he has executed this Agreement, (B) he is employed by the
Company on December 31, 2006, or, before that date, the Executive's employment
with the Company is terminated by the Company without Cause (as defined in
Section 10 of this Agreement) or by the Executive with Good Reason (as defined
in Section 10 of this Agreement), and (C) if the Executive is terminated by the
Company without Cause (as so defined) or the Executive terminates his employment
with the Company with Good Reason (as so defined) prior to December 31, 2006,
the Executive has executed a release, dated as of a date on or after his last
date of employment, similar in form to the release contained in Section 17 of
this Agreement, and (ii) the Executive shall only be eligible to receive a bonus
for fiscal year 2007 (or any portion thereof) provided that (A) he has executed
this Agreement, (B) he is employed by the Company on October 6, 2007, or, before
that date but after December 31, 2006, the Executive's employment with the
Company is terminated by the Company without Cause (as defined in Section 10 of
this Agreement) or by the Executive with Good Reason (as defined in Section 10
of this Agreement), and (C) the Executive has executed a release, dated as of a
date on or after his last date of employment, similar in form to the release
contained in Section 17 of this Agreement.

          (b) The Chief Executive Officer, upon consultation with the Board,
shall establish performance criteria for determination of the incentive cash
compensation that will be payable to the Executive with respect to each fiscal
year of the Company. To the extent possible, such criteria shall be established,
as to each fiscal year, prior to the end of the first month of such fiscal year.
As an example, such performance criteria may be comprised of several designated
performance areas and one or more performance targets in each area. The Company
acknowledges that the business objectives heretofore used in determining the
Executive's incentive cash compensation have been, and that the performance
areas and performance targets

                                        2

<PAGE>

referred to herein shall continue to be, based largely on the input and
recommendations of the Company's Chief Executive Officer and that, in exercising
its review and supervisory role with respect to the determination and adoption
of those performance areas and performance targets, the Board or the
Compensation Committee of the Board (the "Compensation Committee"), as the case
may be, shall act reasonably and in consultation and cooperation with the Chief
Executive Officer and consistently with past practice.

          (c) As soon as practical, and absent unforeseen circumstances no later
than ninety (90) days following the end of each fiscal year of the Company, the
Chief Executive Officer and/or the Board shall determine, reasonably and in good
faith, the extent to which the applicable performance criteria for such fiscal
year shall have been achieved and, accordingly, shall cause the appropriate
amount of incentive cash compensation to be paid to the Executive. If unforeseen
developments occur that in the opinion of the Chief Executive Officer make the
performance areas and/or targets previously determined unachievable, infeasible,
or inadvisable -- and therefore inappropriate as a measure of the performance of
the Executive -- the Chief Executive Officer and/or the Board shall consider in
good faith the extent to which the actual performance of the Executive
nevertheless warrants payment of the amounts that would have been payable if the
performance criteria had been achieved; and, to such extent, payment shall be
made to the Executive.

     6. Stock Options. The Company and the Executive hereby acknowledge that the
Board or the Compensation Committee has granted to the Executive options to
purchase shares of common stock of the Company (collectively, the "Outstanding
Options"). The terms of the grant agreements granting such Outstanding Options
shall govern the rights and obligations of the Executive with respect thereto.
The Executive hereby acknowledges that no further options to purchase shares of
common stock of the Company shall be granted to the Executive on or after the
date of this Agreement.

     7. Restricted Shares. The Company and the Executive hereby acknowledge that
the Board or the Compensation Committee has issued to the Executive restricted
shares of common stock of the Company (collectively, the "Outstanding Restricted
Shares"). The terms of the grant agreements issuing such Outstanding Restricted
Shares shall govern the rights and obligations of the Executive with respect
thereto. The Executive hereby acknowledges that no further restricted shares of
common stock of the Company shall be issued to the Executive on or after the
date of this Agreement.

     8. Benefits. During the Employment Period, the Company shall provide or
cause to be provided to the Executive at least such employee benefits as are
provided to other similarly situated employees of the Company.

     9. Paid Time Off. The Executive shall be entitled to paid time off in
accordance with the Company's policies in effect from time to time for executive
officers of the Company.

     10. Termination. Executive's employment by the Company shall be "at will."
In other words, either the Company or the Executive may terminate the
Executive's employment by the Company at the end of any calendar month, with or
without Cause or Good Reason (as such terms are defined below), in its or his
sole discretion, upon thirty (30) days' prior written notice of termination. In
addition, the Executive's employment by the Company shall be terminated

                                        3

<PAGE>

immediately by his death. Termination of the Executive's employment as provided
for herein shall terminate the Employment Period.

          For purposes of this Agreement, in the case of a termination of the
Executive's employment hereunder by the Executive, the term "Good Reason" shall
have the meaning set forth for it below; in the case of a termination of the
Executive's employment hereunder by the Company, the term "Cause" shall have the
meaning set forth for it below; and the term "Termination Date" shall also have
the meaning set forth for it below:

          (a) "Good Reason" shall mean the failure of the Company to honor
promptly any of its material obligations hereunder.

          (b) "Cause" shall mean (i) the Executive's willful and repeated
failure to perform his duties hereunder or to comply with any reasonable and
proper direction given by the Chief Executive Officer if such failure of
performance or compliance is not cured within fifteen (15) days following
receipt by the Executive of written notice from the Company containing a
description of such failures and non-compliance and a demand for immediate cure
thereof; (ii) the Executive being found guilty in a criminal court of an offense
involving moral turpitude; (iii) the Executive's commission of any material act
of fraud or theft against the Company; or (iv) the Executive's material
violation of any of the material terms, covenants, representations or warranties
contained in this Agreement if such violation is not cured within fifteen (15)
days following receipt by the Executive of written notice from the Company
containing a description of the violation and a demand for immediate cure
thereof.

          (c) "Termination Date" shall mean (i) if this Agreement is terminated
on account of death, the date of death; or (ii) if this Agreement is terminated
by the Company or by the Executive prior to October 6, 2007, the effective date
of the termination as provided in Section 10(a) hereof.

     11. Severance.

          (a) If (i) the Company terminates the employment of the Executive
prior to October 6, 2007 against his will and without Cause, or (ii) the
Executive terminates his employment prior to October 6, 2007 with or without
Good Reason, then the Executive shall be entitled to receive base salary, pay
for accrued but unused paid time off, and reimbursement for expenses pursuant to
Section 12 hereof through the Termination Date plus a lump sum equal to the
amount of base salary payable hereunder from the Termination Date through
October 6, 2007, at the rate in effect on the Termination Date. The Company
shall pay the cash amounts provided for in this Section within ninety (90) days
after the six (6) month anniversary of the date of such termination (but no
later than the end of the calendar year in which such six (6) month anniversary
occurs); provided, however, that pay for accrued but unused paid time off shall
be paid as soon as practicable following such termination, and that to the
extent that Section 409A of the Internal Revenue Code of 1986 and any guidance
or regulations issued thereunder, as amended, do not require the effectuation of
the six (6) month delay described above with respect to any other cash amounts
provided for in this Section other than the lump sum equal to the amount of base
salary payable hereunder from the Termination Date through October 6, 2007, the
Company shall pay such cash amounts as soon as administratively practicable and
no later than fifteen (15) days following such termination (but no later than
the end of the calendar year in which such termination occurs). Notwithstanding
the foregoing, the Company shall not

                                        4

<PAGE>

be required to pay any severance pay for any period following the Termination
Date if the Executive shall have materially violated the provisions of Section
14, 15, or 16 of this Agreement and such violation is not cured within thirty
(30) days following receipt of written notice from the Company containing a
description of the violation and a demand for immediate cure.

          (b) If the Executive's employment is terminated by the Company prior
to October 6, 2007 for Cause or due to the death of the Executive, then the
Executive shall be entitled to receive salary, pay for accrued but unused paid
time off, and reimbursement of expenses pursuant to Section 12 hereof through
the Termination Date only. The Company shall pay the cash amounts provided for
in this Section within ninety (90) days after the six (6) month anniversary of
the date of such termination (but no later than the end of the calendar year in
which such six (6) month anniversary occurs); provided, however, that pay for
accrued but unused paid time off shall be paid as soon as practicable following
such termination, and that to the extent that Section 409A of the Internal
Revenue Code of 1986 and any guidance or regulations issued thereunder, as
amended, do not require the effectuation of the six (6) month delay described
above with respect to any other cash amounts provided for in this Section, the
Company shall pay such cash amounts as soon as administratively practicable and
no later than fifteen (15) days following such termination (but no later than
the end of the calendar year in which such termination occurs).

          (c) The Executive acknowledges that, upon termination of his
employment, he is entitled to no other compensation, severance or other benefits
other than those specifically set forth or referred to in this Agreement.

     12. Expenses. The Company shall pay or reimburse the Executive for all
expenses that are reasonably incurred by him in furtherance of his duties
hereunder and such further expenses as may be authorized and approved by the
Company from time to time.

     13. Place of Performance. The Executive shall perform his duties at the
main offices of the Company or such other reasonable location as directed by the
Chief Executive Officer, subject to reasonable travel requirements which may be
authorized and directed from time to time by the Chief Executive Officer.

     14. Non-Competition.

          (a) The Executive agrees that, except in accordance with his duties
under this Agreement on behalf of the Company, he will not during the Employment
Period: participate in, be employed in any capacity by, serve as director,
consultant, agent or representative for, or have an interest, directly or
indirectly in, any enterprise which is engaged in the business of developing,
licensing, or selling technology, products or services which are directly
competitive with the Business of the Company or any of its Subsidiaries or with
any technology, products or services being actively developed, with the bona
fide intent to market same, by the Company or any of its Subsidiaries at the
time in question; provided, however, that interests in publicly-traded entities
that constitute less than a five percent (5%) interest in such entities, and do
not otherwise constitute control either directly or indirectly of such entities,
which interests were acquired or are held for investment purposes, shall not be
deemed to be a violation of this paragraph.

                                        5

<PAGE>

          (b) In addition, the Executive agrees that, during the Employment
Period and, if the Executive's employment is terminated by the Company prior to
October 6, 2007 for Cause or the Executive terminates his employment prior to
October 6, 2007 without Good Reason, the Executive shall not, prior to October
6, 2007, (1) own, either directly or indirectly or through or in conjunction
with one or more members of his or his spouse's family or through any trust or
other contractual arrangement, a greater than five percent (5%) interest in, or
otherwise control either directly or indirectly, or (2) participate in, be
employed in any capacity by, or serve as director, consultant, agent or
representative for, any partnership, corporation, or other entity which is
engaged in the business of developing, licensing, or selling technology,
products or services which are directly competitive with the Business of the
Company or any of its Subsidiaries as of the termination of the Executive's
employment with the Company or which are directly competitive with any
technology, products, or services being actively developed by the Company or any
of its Subsidiaries, with the bona fide intent to market same, as of the
termination of the Executive's employment at the Company; provided, however,
that employment or service as a consultant, agent or representative shall not be
subject to the foregoing limitation in this Section 14(b) to the extent that
such employment or service would not be directly competitive with and/or adverse
to the Business of the Company or any of its Subsidiaries or with and to any
products or services being offered by the Company or any of its Subsidiaries at
the date such employment terminated or then being actively developed, with the
bona fide intent to market same, by the Company or any of its Subsidiaries.

          (c) Executive further agrees that, during the Employment Period and,
if the Executive's employment is terminated by the Company prior to October 6,
2007 for Cause or the Executive terminates his employment prior to October 6,
2007 without Good Reason, the Executive shall, until October 6, 2007, refrain
from directly or indirectly soliciting or hiring the Company's collaborative
partners, consultants, certified research organizations, principal vendors,
licensees or employees except any such solicitation in connection with
activities that would not be directly competitive with and/or adverse to the
Business of the Company or any of its Subsidiaries or with and to any products
or services being offered by the Company or any of its Subsidiaries at the date
such employment terminates or then being actively developed, with the bona fide
intent to market same, by the Company or any of its Subsidiaries.

          (d) The Executive further agrees that, during the Employment Period
and, if the Executive's employment is terminated by the Company prior to October
6, 2007 for Cause or the Executive terminates his employment prior to October 6,
2007 without Good Reason, the Executive shall not, prior to October 6, 2007,
directly or indirectly, as a sole proprietor, member of a partnership or as a
stockholder, investor, officer or director of a corporation, or as an employee,
agent, associate or consultant of any person, firm or corporation, other than
for the exclusive benefit of the Company or any of its Subsidiaries, solicit or
accept business from, or perform or supervise the performance of any services
related to such business for, (i) any client of the Company or any of its
Subsidiaries who was a client during the Executive's employment with the
Company, (ii) any clients or prospective clients of the Company or any of its
Subsidiaries who were solicited or serviced, directly or indirectly, by the
Executive, in whole or in part, or (iii) any former client of the Company or any
of its Subsidiaries who was a client within one (1) year prior to the
Executive's termination of employment and who was solicited or serviced,
directly or indirectly, by the Executive, or by those supervised, directly or
indirectly, by the Executive, in whole or in part, in connection with activities
that would be directly competitive with and/or adverse to the Business of the
Company or any of its Subsidiaries or

                                        6

<PAGE>

with and to any products or services being offered by the Company or any of its
Subsidiaries at the date such employment terminates or then being actively
developed, with the bona fide intent to market same, by the Company or any of
its Subsidiaries.

          (e) The Executive hereby agrees that damages and any other remedy
available at law would be inadequate to redress or remedy any loss or damage
suffered by the Company upon any breach of the terms of this Section 14 by the
Executive, and the Executive therefore agrees that the Company, in addition to
recovering on any claim for damages or obtaining any other remedy available at
law, also may enforce the terms of this Section 14 by injunction or specific
performance, and may obtain any other appropriate remedy available in equity.

     15. Assignment of Patents. The Executive shall disclose fully to the
Company any and all discoveries he shall make and any and all ideas, concepts or
inventions he shall conceive or make that are related or applicable to the
Business of the Company or of any of its Subsidiaries or to any other products,
services, or technology in medicine or the health sciences in which the Company
shall during the Employment Period undertake, or actively and in good faith
consider, research or commercial involvement; provided, however, that either (a)
such discovery(ies), idea(s), concept(s) and/or invention(s) are made by the
Executive during the Employment Period or (b) such discovery(ies), idea(s),
concept(s) and/or invention(s) are made by the Executive during the period of
twelve (12) months after his employment terminates and are in whole or in part
the result of his work with the Company. Such disclosure is to be made promptly
after each such discovery or conception, and each such discovery, idea, concept
or invention will become and remain the property of the Company, whether or not
patent applications are filed thereon. Upon the request and at the expense of
the Company, the Executive shall (i) make application through the patent
solicitors of the Company for letters patent of the United States and any and
all other countries at the discretion of the Company on such discoveries, ideas
and inventions, and (ii) assign all such applications to the Company, or at its
order, without additional payment by the Company except as otherwise agreed by
the Company and the Executive. The Executive shall give the Company, its
attorneys and solicitors, reasonable assistance in preparing and prosecuting
such applications and, on request of the Company, execute such papers and do
such things as shall be reasonably necessary to protect the rights of the
Company and vest in it or its assigns the discoveries, ideas or inventions,
applications and letters patent herein contemplated. Said cooperation shall also
include such actions as are reasonably necessary to aid the Company in the
defense of its rights in the event of litigation. To the extent that the
Executive's actions referred to in this paragraph are performed after the end of
the Executive's employment by the Company, the Company shall promptly compensate
the Executive for his time spent in or because of such activities at the rate of
two hundred dollars ($200.00) per hour. This Section 15 shall not apply to any
invention for which no equipment, supplies, facilities, or trade secret
information of the Company or its Subsidiaries was used, and which was developed
entirely on the Executive's own time, unless (i) the invention relates directly
to the Business of the Company or of any of its Subsidiaries or to the actual or
demonstrably anticipated research or development of the Company or of any of its
Subsidiaries, or (ii) the invention results from any work performed by the
Executive for the Company.

                                        7

<PAGE>

     16. Trade Secrets.

          (a) Prior to and during the course of the term of this Agreement, it
is anticipated that the Executive had and shall have access to secret or
confidential technical, scientific and commercial information, records, data,
formulations, specifications, systems, methods, plans, policies, inventions,
material and other knowledge that is (are) specifically related or applicable to
the Business of the Company or of any of its Subsidiaries or to any other
products, services, or technology in medicine or the health sciences in which
the Company shall during the Employment Period undertake, or actively and in
good faith consider, research or commercial involvement and that is/are owned by
the Company or its Subsidiaries ("Confidential Material"). The Executive
recognizes and acknowledges that included within the Confidential Material are
the following as they may specifically relate or be applicable to the Company's
drug delivery business or technology, or to current or specifically contemplated
future drug delivery products or services: the Company's confidential commercial
information, technology, formulations, STA-T (Systemic Transnasal Absorption
Technology) and know-how, methods of manufacture, chemical formulations, device
designs, pending patent applications, clinical data, pre-clinical data and any
related materials, all as they may exist from time to time, and that such
material is or may be valuable special, and unique aspects of the Company's
business. All such Confidential Material shall be and remain the property of the
Company. Except as required by his duties to the Company, the Executive shall
not, directly or indirectly, either during the term of his employment or at any
time thereafter, disclose or disseminate to anyone or make use of, for any
purpose whatsoever, any Confidential Material. Upon termination of his
employment, the Executive shall promptly deliver to the Company all Confidential
Material (including all copies thereof, whether prepared by the Executive or
others) which are in the possession or under the control of the Executive. The
Executive shall not be deemed to have breached this Section 16 if the Executive
is compelled by legal process or order of any judicial, legislative, or
administrative authority or body to disclose any Confidential Material.

          (b) The Executive hereby agrees that damages and any other remedy
available at law would be inadequate to redress or remedy any loss or damage
suffered by the Company upon any breach of the terms of this Section 16 by the
Executive, and the Executive therefore agrees that the Company, in addition to
recovering on any claim for damages or obtaining any other remedy available at
law, also may enforce the terms of this Section 16 by injunction or specific
performance, and may obtain any other appropriate remedy available in equity.

     17. Release.

          (a) In consideration for the continued employment of the Executive by
the Company pursuant to this Agreement, which the Executive acknowledges to be
good and valuable consideration for the following release, the Executive
knowingly and voluntarily releases and forever discharges the Company, any of
its parent, Subsidiary, division, and related companies, and any of its past and
present directors, managers, officers, shareholders, partners, employees,
agents, attorneys and servants, and each of their predecessors, successors and
assigns (the "Releasees") from any and all claims, or causes of action, of any
nature whatsoever, known or unknown, which exist as of the Effective Date (the
"Release"). This Release includes, without limitation, any rights or claims
relating in any way to the Executive's employment relationship with any of the
Releasees, or the termination thereof, or arising under any statute or
regulation, including, but not limited to, any rights or claims the Executive
may have under the Age

                                        8

<PAGE>

Discrimination in Employment Act, which prohibits age discrimination in
employment; Title VII of the Civil Rights Act of 1964, as amended, which
prohibits discrimination in employment based on race, color, national origin,
religion, or sex; the Equal Pay Act, which prohibits paying men and women
unequal pay for equal work; the Americans With Disabilities Act, which prohibits
discrimination in employment by reason of disability; the Employee Retirement
Income Security Act ("ERISA"), which protects employees' interests in certain
health and retirement benefits; the Fair Labor Standards Act ("FLSA"), which
protects employees' wages and regulates hours; or any other federal, state, or
local laws or regulations prohibiting employment discrimination. This Release
also includes a release by the Executive of any claims for wrongful discharge,
defamation, intentional tort, and breach of contract, implied or otherwise. This
Release includes both claims that the Executive knows about and those he may not
know about. The Executive represents that as of the date of his execution of
this Agreement, he has incurred no disability or injury in relation to or as a
result of his employment and asserts no claim for any form of compensation for
such disability, injury or job-related condition.

          (b) The Executive hereby promises never to file a lawsuit asserting
any claims that are released in Section 17(a), above. If the Executive files a
lawsuit in breach of the foregoing representation, he will pay for all costs
incurred by the Company, any related entities, or the present or former
directors, officers, employees or representatives of the Company or any related
entities, including their reasonable attorneys' fees, in defending against such
claims. The terms of this Section 17(b) do not apply to any claims the Executive
may or may not have under the Older Workers' Benefits Protection Act which have
been specifically released by the Executive in Section 17(a) above.

          (c) The Executive acknowledges that unless he entered into this
Agreement, he would not otherwise continue to be employed by the Company. The
Release is not, and should not be construed as, an admission of liability or
wrongdoing by the Company. The Executive promises not to discuss or disclose the
terms of this Agreement to any person other than his family members and his
attorney and/or financial advisor, should one be consulted, provided that those
to whom the Executive may make such disclosure agree to keep said information
confidential and not disclose it to others. Furthermore, the Executive shall not
disparage or make any statement which might adversely affect the reputation of
the Company or any related entity, or their directors, officers, employees or
representatives. For the purpose of this Section 17(c), disparagement shall
include, without limitation, any statement accusing the aforesaid individuals or
entities of acting in violation of any law or governmental regulation or of
condoning any such action, or otherwise acting in an unprofessional, dishonest,
disreputable, improper, incompetent or negligent manner. The Executive expressly
acknowledges that the terms of this Section 17(c) are integral to this Agreement
and that if he breaches the representations contained herein, he must pay to the
Company all damages incurred by the Company, any related entity, or their
directors, officers, employees or representatives, including attorneys' fees
resulting from such breach.

          (d) The Executive acknowledges and understands that the Company has
given the Executive a period of twenty-one (21) days to review and consider this
Agreement before signing it. The Executive further acknowledges and understands
that he may use as much of this twenty-one (21) day period as he wishes prior to
signing, and that the Company has encouraged the Executive to consult with an
attorney before signing this Agreement. The Executive understands that whether
or not he does so is the Executive's decision.

                                        9

<PAGE>

          (e) The Executive may revoke this Agreement within seven (7) days of
the date on which he signs it by delivering a written notice of revocation to
the Company, no later than the close of business on the seventh day after he
signs and delivers this Agreement to the Company. If the Executive revokes this
Agreement, it shall not be effective or enforceable. The EXECUTIVE HEREBY
ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT AND THE RELEASE CONTAINED
THEREIN, UNDERSTANDS IT, AND IS VOLUNTARILY ENTERING INTO IT OF HIS OWN FREE
WILL, WITHOUT DURESS OR COERCION, AFTER DUE CONSIDERATION OF ITS TERMS AND
CONDITIONS.

     18. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and personally delivered (including
by regular messenger service, signature required) or sent by registered or
certified mail, return receipt requested, to both his office and his residence,
in the case of notices directed to the Executive, or to its principal office,
Attn.: Chief Executive Officer, in the case of notices directed to the Company,
or to such other address and/or addressee as the party to whom such notice is
directed shall have designated for this purpose by notice to the other in
accordance with this Section. Such notices shall be effective upon personal
delivery or three (3) days after mailing.

     19. Entire Agreement; Waiver. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof (it being
acknowledged, however, that the Company and the Executive have entered into
certain grant agreements relating to Outstanding Options and Outstanding
Restricted Shares, which shall be effective in accordance with the terms
thereof). This Agreement may not be changed orally but only by an instrument in
writing, signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought. Waiver of or failure to exercise any rights
provided by this Agreement in any respect shall not be deemed a waiver of any
further or future rights.

     20. Binding Effect; Assignment. The rights and obligations of this
Agreement shall bind and inure to the benefit of any successor of the Company by
reorganization, merger or consolidation, or any transferee of all or
substantially all of the Company's business or properties. The Executive's
rights hereunder are personal to and shall not be transferable nor assignable by
the Executive.

     21. Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.

     22. Governing Law; Arbitration. This Agreement shall be construed in
accordance with and governed for all purposes by the laws of the State of
Washington applicable to contracts made and to be performed wholly within such
state. Except as otherwise provided in Sections 14(e) and 16(b) of this
Agreement, any dispute or controversy arising out of or relating to this
Agreement shall be settled by arbitration in accordance with the rules of the
American Arbitration Association, and judgement upon the award may be entered in
any court having jurisdiction thereover. The arbitration shall be held in King
County, Washington or in such other place as the parties hereto may agree.

     23. Further Assurances. Each of the parties agrees to execute, acknowledge,
deliver and perform, and cause to be executed, acknowledged, delivered and
performed, at any time and from time to time, all such further acts, deeds,
assignments, transfers, conveyances, powers of

                                       10

<PAGE>

attorney and/or assurances as may be necessary or proper to carry out the
provisions or intent of this Agreement.

     24. Severability. The parties agree that if any one or more of the terms,
provisions, covenants or restrictions of this Agreement shall be determined by a
court of competent jurisdiction to be invalid, void, or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.

     25. Counterparts. This Agreement may be executed in several counterparts,
and all counterparts so executed shall constitute one agreement, binding on the
parties hereto, notwithstanding that both parties are not signatory to the
original or the same counterpart.

     IN WITNESS WHEREOF, NASTECH PHARMACEUTICAL COMPANY INC. has caused this
instrument to be signed by a duly authorized officer and the Executive has
hereunto set his hand as of the day and year first above written.

COMPANY:                                NASTECH PHARMACEUTICAL COMPANY INC.

                                        By: /s/ Steven C. Quay
                                            ------------------------------------
                                        Name: Steven C. Quay, M.D., Ph.D.
                                        Title: Chief Executive Officer

EXECUTIVE:                              /s/ Paul H. Johnson
                                        ----------------------------------------
                                        Name: Paul H. Johnson, Ph.D.
                                        Title: Chief Scientific Officer

                                       11

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