Exhibit 10.13

 

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80(b)4, AND 240.24b-2

 

Confidential — Execution Version

 

AMENDED & RESTATED LICENSE AGREEMENT

 

THIS AMENDED & RESTATED LICENSE AGREEMENT (THE “AGREEMENT”) IS MADE AND ENTERED
INTO EFFECTIVE AS OF NOVEMBER 30, 2009 (THE “RESTATEMENT DATE”), BY AND BETWEEN
ATLANTIC PHARMACEUTICALS LIMITED (FORMERLY ATLANTIC HEALTHCARE (UK) LIMITED
REGISTERED NUMBER 6025726), WHOSE REGISTERED OFFICE IS MOFO NOTICES LIMITED,
7TH FLOOR, CITY POINT, ONE ROPEMAKER STREET, LONDON EC2Y 9AW (“ATLANTIC”) AND
ISIS PHARMACEUTICALS, INC., HAVING PRINCIPAL OFFICES AT 1896 RUTHERFORD ROAD,
CARLSBAD, CA 92008 (“ISIS”). ATLANTIC AND ISIS EACH MAY BE REFERRED TO HEREIN
INDIVIDUALLY AS A “PARTY,” OR COLLECTIVELY AS THE “PARTIES.”

 

WHEREAS, Isis and Atlantic are parties to the License Agreement dated March 7,
2007, as amended December 6, 2007 and December 18, 2008 (as amended, the
“Original Agreement”) under which Isis, among other things, licensed to Atlantic
the drug known as Alicaforsen (also known as ISIS 2302) for Atlantic to develop
and commercialize, together with, at Atlantic’s election, the right to license
second generation ICAM-1 products;

 

WHEREAS, Isis and Atlantic now desire to amend and restate the Original
Agreement in order to, among other things, redefine and confirm as of the
Restatement Date each Party’s rights and obligations with respect to the
development, manufacture, and commercialization of Alicaforsen Products, and to
return to Isis all other rights granted to Atlantic under the Original
Agreement; and

 

NOW, THEREFORE, the Parties do hereby agree as follows:

 

ARTICLE 1 -

 

DEFINITIONS; AMENDMENT AND RESTATEMENT; REVERSION OF RIGHTS; DATA ASSIGNMENT TO
ISIS

 

SECTION 1.1            DEFINITIONS.

 

1.1.1       CAPITALIZED TERMS USED IN THIS AGREEMENT AND NOT OTHERWISE DEFINED
HEREIN HAVE THE MEANINGS SET FORTH IN APPENDIX 1.

 

SECTION 1.2            AMENDMENT AND RESTATEMENT; REVERSION OF RIGHTS; DATA
ASSIGNMENT TO ISIS.

 

1.2.1       AMENDMENT AND RESTATEMENT; REVERSION OF RIGHTS.  EFFECTIVE AS OF THE
RESTATEMENT DATE, NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE ORIGINAL
AGREEMENT (I) THIS AGREEMENT RESTATES, SUPERSEDES, AND TERMINATES THE ORIGINAL
AGREEMENT IN ITS ENTIRETY, AND (II) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
THIS AGREEMENT, THE ORIGINAL AGREEMENT (INCLUDING ALL LICENSES AND OTHER RIGHTS
GRANTED THEREUNDER) IS DEEMED VOID AB INITIO. THEREFORE, FOR THE

 

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AVOIDANCE OF DOUBT, (X) ANY RIGHTS AND LICENSES GRANTED BY ISIS TO ATLANTIC
UNDER THE ORIGINAL AGREEMENT AND NOT EXPRESSLY GRANTED BY ISIS TO ATLANTIC UNDER
THIS AGREEMENT (THE “REVERTED RIGHTS”), AUTOMATICALLY REVERT BACK TO ISIS AS OF
THE RESTATEMENT DATE AS THOUGH SUCH LICENSES AND RIGHTS WERE NEVER GRANTED TO
ATLANTIC UNDER THE ORIGINAL AGREEMENT, AND (Y) THAT CERTAIN SUBSCRIPTION AND
SHARE EXCHANGE AGREEMENT DATED MARCH 16, 2007 (THE “SUBSCRIPTION AND SHARE
EXCHANGE AGREEMENT”) WILL (A) BE UNAFFECTED BY THE TERMINATION OF THE ORIGINAL
AGREEMENT, AND (B) CONTINUE IN FULL FORCE AND EFFECT IN ACCORDANCE WITH ITS
TERMS.  ATLANTIC AGREES, AT ISIS’ REQUEST AND EXPENSE, TO EXECUTE, VERIFY AND
DELIVER SUCH DOCUMENTS AND PERFORM SUCH OTHER ACTS (INCLUDING APPEARANCES AS A
WITNESS) AS ISIS MAY REASONABLY REQUEST FOR USE IN APPLYING FOR, OBTAINING,
CONFIRMING, SUSTAINING AND/OR ENFORCING ISIS’ RIGHTS RELATING TO SUCH REVERTED
RIGHTS.

 

1.2.2       ASSIGNMENT OF ISIS DATA TO ISIS.  EFFECTIVE AS OF THE RESTATEMENT
DATE, ATLANTIC HEREBY ASSIGNS TO ISIS ALL OF ATLANTIC’S RIGHT, TITLE AND
INTEREST IN AND TO (I) THE ISIS DATA, AND (II) ANY OTHER REGULATORY
DOCUMENTATION, DATA, RESULTS AND INFORMATION RELATED TO TESTING AND STUDIES OF
ALICAFORSEN (INCLUDING CLINICAL DATA, ANALYTICAL TEST RESULTS AND NON-CLINICAL
PHARMACOLOGY AND SAFETY DATA) IN THE POSSESSION OF ATLANTIC ON THE RESTATEMENT
DATE, TO THE EXTENT NECESSARY FOR THE DEVELOPMENT AND COMMERCIALIZATION OF
PRODUCTS COVERED BY THE REVERTED RIGHTS. IN THE EVENT ANY OF THE ISIS DATA AND
ANY OTHER REGULATORY DOCUMENTATION, DATA, RESULTS AND INFORMATION RELATED TO
TESTING AND STUDIES OF ALICAFORSEN CAN BE USED FOR DEVELOPMENT AND
COMMERCIALIZATION OF BOTH ALICAFORSEN PRODUCTS AND PRODUCTS COVERED BY THE
REVERTED RIGHTS, THEN SUCH DATA SHALL NOT BE ASSIGNED BY ATLANTIC TO ISIS,
HOWEVER, ISIS SHALL HAVE A NON-EXCLUSIVE, ROYALTY-FREE, FULLY-PAID UP, WORLDWIDE
LICENSE TO USE SUCH DATA FOR PRODUCTS COVERED BY THE REVERTED RIGHTS.

 

ARTICLE 2 -
ALICAFORSEN GRANT OF RIGHTS

 

SECTION 2.1            ALICAFORSEN LICENSE GRANT.

 

2.1.1       SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, ISIS HEREBY
GRANTS TO ATLANTIC:

 

(I)            AN EXCLUSIVE, WORLDWIDE LICENSE UNDER THE ALICAFORSEN PATENTS AND
THE ICAM-1 SPECIFIC PATENTS SOLELY TO DEVELOP, MAKE, HAVE MADE, USE, SELL, OFFER
FOR SALE, HAVE SOLD AND IMPORT ALICAFORSEN API AND ALICAFORSEN PRODUCTS. THE
LICENSE GRANTED TO ATLANTIC UNDER THIS SECTION 2.1.1(I) IS SUBLICENSABLE ONLY IN
CONNECTION WITH A LICENSE OF RIGHTS TO AN ALICAFORSEN PRODUCT TO A THIRD PARTY
FOR THE CONTINUED DEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF THAT
ALICAFORSEN PRODUCT IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT; AND

 

(II)           A NON-EXCLUSIVE, WORLDWIDE LICENSE UNDER THE EXCLUDED
MANUFACTURING IP SOLELY TO MAKE AND HAVE MADE ALICAFORSEN API. THE LICENSE
GRANTED TO ATLANTIC UNDER THIS SECTION 2.1.1(II) IS SUBLICENSABLE TO A THIRD
PARTY FOR THE MANUFACTURE OF ALICAFORSEN API IN ACCORDANCE WITH THE TERMS OF
THIS AGREEMENT.

 

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SECTION 2.2            DATA TRANSFER.

 

2.2.1       AFTER THE EFFECTIVE DATE, ISIS TRANSFERRED AND ASSIGNED TO ATLANTIC
ALL OF ISIS’ RIGHT, TITLE AND INTEREST IN AND TO (I) THE REGULATORY
DOCUMENTATION, DATA, RESULTS AND INFORMATION RELATED TO TESTING AND STUDIES OF
ALICAFORSEN (INCLUDING CLINICAL DATA, ANALYTICAL TEST RESULTS AND NON-CLINICAL
PHARMACOLOGY AND SAFETY DATA) IN THE POSSESSION OF ISIS ON THE EFFECTIVE DATE TO
THE EXTENT SUCH DATA, RESULTS AND/OR INFORMATION WERE NECESSARY FOR THE
CONTINUED DEVELOPMENT AND COMMERCIALIZATION OF ALICAFORSEN (“ISIS DATA”), AND
(II) THE KNOW HOW WHICH WAS OWNED BY OR LICENSED TO ISIS AT THE EFFECTIVE DATE
THAT RELATED TO THE FORMULATION OF ALICAFORSEN FROM ALICAFORSEN API, BUT
EXCLUDING THE EXCLUDED MANUFACTURING IP (THE “ISIS MANUFACTURING KNOW HOW”).  AS
OF THE RESTATEMENT DATE, ATLANTIC WILL USE SUCH ISIS DATA AND ISIS MANUFACTURING
KNOW HOW SOLELY TO THE EXTENT NECESSARY TO MANUFACTURE, DEVELOP AND/OR
COMMERCIALIZE ALICAFORSEN API AND/OR ALICAFORSEN PRODUCTS.

 

SECTION 2.3            NO IMPLIED LICENSES.  ALL RIGHTS IN AND TO THE
ALICAFORSEN PATENTS, THE ICAM-1 SPECIFIC PATENTS, AND THE EXCLUDED MANUFACTURING
IP NOT EXPRESSLY LICENSED TO ATLANTIC UNDER SECTION 2.1, AND ANY OTHER PATENTS
OR KNOW-HOW OF ISIS OR ITS AFFILIATES, ARE HEREBY RETAINED BY ISIS OR ITS
AFFILIATES. EXCEPT AS EXPRESSLY PROVIDED IN SECTION 2.1, ISIS WILL NOT BE DEEMED
BY ESTOPPEL OR IMPLICATION TO HAVE GRANTED ATLANTIC ANY LICENSE OR OTHER RIGHT
WITH RESPECT TO ANY INTELLECTUAL PROPERTY OF ISIS. NOTHING IN THIS AGREEMENT
WILL PREVENT ISIS FROM PRACTICING THE ALICAFORSEN PATENTS, THE ICAM-1 SPECIFIC
PATENTS, OR THE EXCLUDED MANUFACTURING IP FOR PRODUCTS OTHER THAN ALICAFORSEN
PRODUCTS.

 

ARTICLE 3 -
ATLANTIC PRODUCT DEVELOPMENT

 

SECTION 3.1            DEVELOPMENT/COMMERCIALIZATION/REGULATORY
RESPONSIBILITIES.

 

3.1.1       COMMERCIALLY REASONABLE EFFORTS. UNLESS ISIS EXERCISES ITS REVERSION
RIGHTS UNDER SECTION 11.2, ATLANTIC IS FULLY RESPONSIBLE FOR THE CONTINUED
DEVELOPMENT AND COMMERCIALIZATION OF ALICAFORSEN PRODUCTS AND WILL USE
COMMERCIALLY REASONABLE EFFORTS TO DEVELOP ALICAFORSEN PRODUCTS FOR ALL
COMMERCIALLY REASONABLE INDICATIONS, INCLUDING ALICAFORSEN PRODUCTS FOR THE
TREATMENT OF POUCHITIS AND TO MAKE ITS FIRST COMMERCIAL SALE OF AN ALICAFORSEN
PRODUCT FOR THE TREATMENT OF POUCHITIS IN THE USA AND EUROPE AS SOON AS
PRACTICABLE. ATLANTIC HEREBY ASSUMES ALL REGULATORY RESPONSIBILITIES IN
CONNECTION WITH ALICAFORSEN PRODUCTS, INCLUDING SOLE RESPONSIBILITY FOR ALL
RELATED REGULATORY DOCUMENTATION AND FOR OBTAINING ALL REGULATORY APPROVALS.
ATLANTIC WILL COMPLY WITH ALL APPLICABLE LAWS AND THE QUALITY STANDARD IN
CONNECTION WITH THE DEVELOPMENT AND COMMERCIALIZATION OF ALICAFORSEN PRODUCTS.
FOR THE AVOIDANCE OF DOUBT, ANY SUBLICENSEE THAT ENTERS INTO A SUBLICENSE WITH
ATLANTIC WILL USE COMMERCIALLY REASONABLE EFFORTS IN ACCORDANCE WITH THIS
AGREEMENT TO DEVELOP AND COMMERCIALIZE ANY ALICAFORSEN PRODUCTS THAT ARE THE
SUBJECT OF SUCH SUBLICENSE, AND ATLANTIC WILL ENSURE THAT SUCH EFFORTS ARE
UNDERTAKEN.

 

3.1.2       DEVELOPMENT PLAN. WITHOUT LIMITING ANY OF THE FOREGOING IN
SECTION 3.1.1, ATLANTIC WILL USE COMMERCIALLY REASONABLE EFFORTS TO IMPLEMENT
AND PERFORM THE INITIAL DEVELOPMENT PLAN APPROVED BY BOTH ATLANTIC AND ISIS AS
ATTACHED TO THIS AGREEMENT AS APPENDIX 4 (THE “INITIAL DEVELOPMENT PLAN”), WHICH
CONTAINS A GANTT CHART OF ATLANTIC’S GOOD-FAITH DEVELOPMENT PLAN FOR ALICAFORSEN
AS OF THE RESTATEMENT DATE WHICH SUPERSEDES ALL PREVIOUS

 

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DEVELOPMENT PLANS.  ATLANTIC MAY UPDATE THE INITIAL DEVELOPMENT PLAN WITHIN 30
DAYS FOLLOWING THE RESTATEMENT DATE SO LONG AS (I) ANY SUCH UPDATE DOES NOT
CONSTITUTE A MATERIAL MODIFICATION OF, OR ADDITION TO, THE INITIAL DEVELOPMENT
PLAN, AND (II) ATLANTIC PROMPTLY PROVIDES ISIS WITH A COPY OF SUCH MODIFIED
INITIAL DEVELOPMENT PLAN WITH A SUMMARY/EXPLANATION OF ANY MODIFICATIONS
THERETO. FOLLOWING THE RESTATEMENT DATE, ATLANTIC WILL USE COMMERCIALLY
REASONABLE EFFORTS TO ARRANGE AND PARTICIPATE IN “ADVISORY” MEETINGS WITH THE
FDA AND EMEA (OR ANY OTHER REGULATORY AUTHORITY) AS SOON AS PRACTICABLE (EACH,
AN “ADVISORY MEETING”), AND FOLLOWING EACH SUCH ADVISORY MEETING, ATLANTIC WILL
PRESENT THE INFORMATION ARISING FROM SUCH MEETING(S) TO THE JDC TO, AMONG OTHER
THINGS, DISCUSS ANY NECESSARY MODIFICATIONS TO THE DEVELOPMENT PLAN.  THE
DEVELOPMENT PLAN WILL BE UPDATED AND MODIFIED ONLY AS DETERMINED BY THE JDC ON A
PERIODIC BASIS UNDER SECTION 3.2.1, INCLUDING FOLLOWING THE OCCURRENCE OF ANY
ADVISORY MEETINGS HELD BETWEEN ATLANTIC AND THE FDA AND/OR THE EMEA (OR ANY
OTHER REGULATORY AUTHORITY). NOTWITHSTANDING THE FOREGOING, ANY DEVELOPMENT PLAN
TO BE PERFORMED BY ONE OF ATLANTIC’S SUBLICENSEES UNDER A SUBLICENSE WILL NOT
REQUIRE THE APPROVAL OF THE JDC SO LONG AS (I) SUCH DEVELOPMENT PLAN IS PROVIDED
TO THE JDC FOR THE JDC’S REVIEW AND COMMENT AND SUCH SUBLICENSEE CONSIDERS IN
GOOD FAITH ANY COMMENTS PROVIDED BY THE JDC, (II) SUCH DEVELOPMENT PLAN IS NOT
IN CONFLICT WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT, AND (III) SUCH
SUBLICENSEE USES COMMERCIALLY REASONABLE EFFORTS TO IMPLEMENT AND PERFORM SUCH
DEVELOPMENT PLAN.

 

SECTION 3.2            JOINT DEVELOPMENT COMMITTEE.

 

3.2.1       TO PROMOTE THE SUCCESSFUL DEVELOPMENT OF THE ALICAFORSEN PRODUCTS,
THE PARTIES WILL ESTABLISH A JOINT DEVELOPMENT COMMITTEE (THE “JDC”), WHICH WILL
BE FORMED AND WILL HOLD ITS FIRST MEETING WITHIN 90 DAYS AFTER THE RESTATEMENT
DATE, AND WILL BE COMPRISED OF TWO ISIS REPRESENTATIVES AND TWO ATLANTIC
REPRESENTATIVES (“COMMITTEE MEMBERS”).  A PARTY MAY REPLACE ANY OF ITS COMMITTEE
MEMBER(S) BY NOTICE TO THE OTHER PARTY.  EACH COMMITTEE MEMBER SHALL BE
APPROPRIATELY QUALIFIED AND EXPERIENCED IN ORDER TO MAKE A MEANINGFUL
CONTRIBUTION TO JDC MEETINGS.  THE PURPOSE OF THE JDC IS TO PROVIDE A FORUM FOR
THE PARTIES TO SHARE INFORMATION AND KNOWLEDGE ON THE ON-GOING RESEARCH AND
DEVELOPMENT OF THE ALICAFORSEN PRODUCTS, INCLUDING SHARING SCIENTIFIC DIRECTION
AND DATA, DISCUSSING THE CURRENT DEVELOPMENT AND REGULATORY STATUS OF THE
ALICAFORSEN PRODUCTS, ANY ALICAFORSEN PRODUCT SUBLICENSING DEVELOPMENT PLANS
WITH THIRD PARTIES, DISCUSSING REGULATORY OR QUALITY ASSURANCE ISSUES IN
RELATION TO THE ALICAFORSEN API, AND REVIEWING, PROVIDING ADVICE ON, AND
APPROVING THE DEVELOPMENT PLAN.  IN ADDITION, AT JDC MEETINGS, ISIS WILL APPRISE
THE JDC OF ANY DEVELOPMENT ACTIVITIES UNDERTAKEN BY ISIS WITH RESPECT TO ANY
FOLLOW-ON PRODUCTS.  THE JDC SHALL CONDUCT ITS DISCUSSIONS IN GOOD FAITH WITH A
VIEW TO OPERATING TO THE MUTUAL BENEFIT OF THE PARTIES AND IN FURTHERANCE OF THE
SUCCESSFUL MARKETING OF ALICAFORSEN PRODUCTS. THE JDC SHALL MEET AT ISIS’
CORPORATE OFFICES LOCATED IN CARLSBAD, CALIFORNIA, USA WHERE SUCH MEETING IS NOT
HELD BY VIDEO-CONFERENCE OR TELEPHONE CONFERENCE, AS OFTEN AS THE COMMITTEE
MEMBERS MAY DETERMINE BUT IN ANY EVENT NOT LESS THAN ONCE PER CALENDAR QUARTER. 
EACH JDC MEETING SHALL BE CHAIRED BY A COMMITTEE MEMBER NOMINATED BY ATLANTIC
AND ATLANTIC IS RESPONSIBLE FOR COORDINATING AND ENSURING THAT SUCH
COMMUNICATION AND MEETINGS TAKE PLACE IN A TIMELY MANNER IN ACCORDANCE WITH THIS
AGREEMENT, AND ISIS SHALL CO-OPERATE WITH ATLANTIC AND WILL NOT UNREASONABLY
REFUSE REQUESTS FOR SUCH MEETINGS. THE JDC WILL STRIVE TO MAKE DECISIONS BY
MAJORITY VOTE, AND RECORD SUCH DECISIONS IN THE MINUTES OF THE APPLICABLE JDC
MEETING. IF, AFTER GOOD FAITH DISCUSSIONS, THE JDC IS UNABLE TO DECIDE A
PARTICULAR MATTER BY MAJORITY VOTE, SUCH MATTER WILL BE REFERRED TO THE
EXECUTIVE OFFICERS FOR FINAL RESOLUTION.  IF THE MATTER IS NOT RESOLVED BY THE
EXECUTIVES OFFICERS WITHIN 30 DAYS, EITHER PARTY MAY SEEK FINAL RESOLUTION OF
THE MATTER IN ACCORDANCE WITH SECTION 14.4.

 

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3.2.2       THE JDC WILL CONTINUE IN EXISTENCE FOR THREE YEARS AFTER THE
RESTATEMENT DATE, SUBJECT TO EXTENSION BY MUTUAL AGREEMENT OF THE PARTIES.

 

SECTION 3.3            SAFETY DATABASE.

 

3.3.1       ISIS MAINTAINS A DATABASE THAT INCLUDES INFORMATION REGARDING THE
TOLERABILITY OF ITS DRUG COMPOUNDS, INDIVIDUALLY AND AS A CLASS, INCLUDING
INFORMATION DISCOVERED DURING PRE-CLINICAL AND CLINICAL DEVELOPMENT (THE “ISIS
DATABASE”).  IN AN EFFORT TO MAXIMIZE UNDERSTANDING OF THE SAFETY PROFILE AND
PHARMACOKINETICS OF ISIS COMPOUNDS, ATLANTIC WILL COOPERATE IN CONNECTION WITH
POPULATING THE ISIS DATABASE. ATLANTIC WILL PROVIDE ISIS WITH INFORMATION
CONCERNING TOXICOLOGY, PHARMACOKINETICS, SAFETY PHARMACOLOGY STUDY(IES), SERIOUS
ADVERSE EVENTS AND OTHER SAFETY INFORMATION RELATED TO EACH ALICAFORSEN PRODUCT
AS SOON AS PRACTICABLE FOLLOWING THE DATE SUCH INFORMATION IS AVAILABLE TO
ATLANTIC (BUT NOT LATER THAN 30 DAYS AFTER ATLANTIC’S RECEIPT OF SUCH
INFORMATION). IN ADDITION, IN CONNECTION WITH ANY REPORTED SERIOUS ADVERSE
EVENT, ATLANTIC WILL PROVIDE ISIS (PROMPTLY FOLLOWING SUCH EVENT AND PRIOR TO
ANY COMMUNICATION WITH A REGULATORY AUTHORITY OR ETHICS COMMITTEE) IN A MUTUALLY
ACCEPTABLE FORMAT, THE FOLLOWING PATIENT DATA WHERE IT IS REASONABLY AVAILABLE
TO ATLANTIC ONCE INFORMED OF A SERIOUS ADVERSE EVENT AND ANY OTHER DATA ATLANTIC
REASONABLY DEEMS RELEVANT TO THE ISIS DATABASE: (A) BASIC STATISTICS (INCLUDING
AGE, RACE, GENDER, WEIGHT, HEIGHT); (B) MEDICAL HISTORY; (C) CONCURRENT
MEDICATION USAGE; (D) PARTICULARS OF THE EVENT (VERBATIM TERM, MEDDRA TERM &
SYSTEM ORGAN CLASS, ONSET DATE, RESOLUTION DATE, RELATION TO ALICAFORSEN
PRODUCT, SEVERITY/SERIOUSNESS, OUTCOME); (E) DOSING HISTORY (DATES, QUANTITY OF
ALICAFORSEN PRODUCT ADMINISTERED, METHOD OF ADMINISTRATION); (F) CHEMISTRY AND
HEMATOLOGY LAB TESTS; AND (G) OCULAR PRESSURE. ATLANTIC WILL DELIVER ALL SUCH
INFORMATION TO ISIS FOR THE ISIS DATABASE TO: ISIS PHARMACEUTICALS, INC. 1896
RUTHERFORD ROAD, CARLSBAD, CALIFORNIA 92008, ATTENTION: CHIEF MEDICAL OFFICER
(OR TO SUCH OTHER ADDRESS/CONTACT DESIGNATED IN WRITING BY ISIS). FOR CLARITY,
ATLANTIC SHALL BE RESPONSIBLE FOR ALL SAFETY AND/OR PHARMACOVIGILANCE MATTERS
RELATING TO OR ARISING FROM THE DEVELOPMENT AND COMMERCIALIZATION OF THE
ALICAFORSEN PRODUCTS AND FOR MAKING ALL ADVERSE EVENT REPORTS TO THE RELEVANT
REGULATORY AUTHORITIES AT THE TIMES AND IN THE MANNER IT DEEMS APPROPRIATE TO
COMPLY WITH ALL APPLICABLE LAWS.

 

3.3.2.      From time to time, Isis utilizes the information in the Isis
Database to conduct analyses to keep Isis and its partners informed regarding
class generic properties of antisense oligonucleotides, including with respect
to safety. As such, if and when Isis identifies safety or other related issues
that Isis reasonably believes may be relevant to an Alicaforsen Product or the
gene target, ICAM-1 (including any potential class-related toxicity), Isis will
promptly inform Atlantic of such issues and, if requested, provide the data
supporting Isis’ conclusions. In addition, if Isis becomes aware of any serious
adverse events related to Alicaforsen or ICAM-1, Isis will promptly inform
Atlantic. Isis will deliver all such information to Atlantic to: Atlantic
Pharmaceuticals Limited, Maple House, Birdbrook, Halstead, CO9 4BB, UK,
Attention: Chief Medical Officer (or to such other address/contact designated in
writing by Atlantic).

 

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SECTION 3.4            REPORTS. ATLANTIC AGREES TO KEEP ISIS INFORMED WITH
RESPECT TO ACTIVITIES AND PROGRESS WITH THE FURTHER DEVELOPMENT AND
COMMERCIALIZATION OF ALICAFORSEN PRODUCTS (INCLUDING WITH RESPECT TO THE
ACTIVITIES OF ATLANTIC’S AFFILIATES AND SUBLICENSEES), AND AGREES TO PROVIDE TO
ISIS AND THE JDC EVERY SIX MONTHS A SUMMARY OF SUCH ACTIVITIES AND PROGRESS. IN
ACCORDANCE WITH SECTION 3.2.1, DURING THE PERIOD ATLANTIC HAS A RIGHT OF FIRST
NEGOTIATION UNDER SECTION 4.1, ISIS AGREES TO KEEP ATLANTIC INFORMED WITH
RESPECT TO ISIS’ ACTIVITIES AND PROGRESS WITH THE FURTHER DEVELOPMENT AND
COMMERCIALIZATION OF FOLLOW-ON PRODUCTS BY PROVIDING A SUMMARY OF ANY SUCH
ACTIVITIES AT MEETINGS OF THE JDC.

 

SECTION 3.5            [NOT USED]

 

SECTION 3.6            SUPPLY OF EXISTING ALICAFORSEN API.

 

3.6.1       ISIS AGREES TO SUPPLY ATLANTIC WITH A QUANTITY OF ALICAFORSEN API
THAT IS IN ISIS’ POSSESSION AS OF THE RESTATEMENT DATE, REASONABLY SUFFICIENT TO
OBTAIN REGULATORY APPROVAL FOR AN ALICAFORSEN PRODUCT FOR POUCHITIS (BUT NOT TO
EXCEED [***] KG) IN THE USA OR EUROPE [***], IN ACCORDANCE WITH A CLINICAL TRIAL
PROGRAM SET FORTH IN THE DEVELOPMENT PLAN.  FOR THE AVOIDANCE OF DOUBT, THE
[***] KG OF ALICAFORSEN API SUPPLIED BY ISIS PRIOR TO THE RESTATEMENT DATE HAS
BEEN SUPPLIED [***].

 

3.6.2       ATLANTIC AND ISIS AGREE THAT, TO THE EXTENT AVAILABLE FROM THE
STOCKS OF ALICAFORSEN API IN ISIS’ POSSESSION AS OF THE RESTATEMENT DATE, ANY
OTHER QUANTITIES OF ALICAFORSEN API REQUIRED BY ATLANTIC FOR THE DEVELOPMENT AND
COMMERCIALIZATION OF ALICAFORSEN PRODUCT MAY BE PURCHASED FROM ISIS IN A MINIMUM
ORDER SIZE OF [***]KG AT A COST OF [***] DOLLARS ($[***]) PER GRAM UNTIL SUCH
STOCKS HAVE BEEN EXHAUSTED.  AS OF THE RESTATEMENT DATE, ISIS HAS APPROXIMATELY
(I) [***] KILOGRAMS OF ALICAFORSEN API AVAILABLE FOR SALE, AND (II) [***]
KILOGRAMS OF ALICAFORSEN API IN QUARANTINE WITH THE POSSIBILITY OF RELEASE FROM
SUCH QUARANTINE IF CERTAIN QUALIFICATION STUDY(IES) ARE PERFORMED (E.G., A
BRIDGING TOXICOLOGY STUDY).  ISIS WILL HOLD SUCH ALICAFORSEN API IN QUARANTINE
FOR A PERIOD OF [***] ([***]) YEARS AFTER THE RESTATEMENT DATE FOR THE BENEFIT
OF ATLANTIC. IF ATLANTIC HAS THE NECESSARY STUDY(IES) PERFORMED, AT ATLANTIC’S
EXPENSE, AND SUCH ALICAFORSEN API IS SUCCESSFULLY RELEASED FROM QUARANTINE IN
ACCORDANCE WITH CGMP, ISIS WILL SELL SUCH [***] KILOGRAMS OF ALICAFORSEN API TO
ATLANTIC AT A COST OF [***] DOLLARS ($[***]) PER GRAM.

 

3.6.3       ALL ALICAFORSEN API ORDERED BY ATLANTIC PURSUANT TO SECTION 3.6 WILL
BE SHIPPED BY ISIS TO ATLANTIC, EXW (INCOTERMS 2000) ISIS’ PREMISES, TO THE
DESTINATION SPECIFIED IN WRITING BY ATLANTIC.  ALL TRANSPORTATION AND INSURANCE
COSTS ARE THE SOLE RESPONSIBILITY OF ATLANTIC.  ISIS WARRANTS THAT EACH SUCH
AMOUNT OF ALICAFORSEN API SUPPLIED BY ISIS PURSUANT TO SECTION 3.6; (I) WILL
HAVE BEEN MANUFACTURED IN ACCORDANCE WITH CGMP, (II) MEETS THE SPECIFICATION FOR
ALICAFORSEN API SET OUT IN THE REGULATORY DOCUMENTATION EXISTING AT THE
RESTATEMENT DATE, (III) HAVE AT LEAST [***] MONTHS SHELF LIFE REMAINING WHEN
DELIVERED, AND WILL BE ACCOMPANIED BY A CERTIFICATE OF ANALYSIS.

 

SECTION 3.7            PRODUCT MANUFACTURING RESPONSIBILITY.  EXCEPT AS
OTHERWISE PROVIDED IN THIS AGREEMENT, ATLANTIC ACKNOWLEDGES AND AGREES THAT IT
IS SOLELY RESPONSIBLE FOR THE MANUFACTURING OF ALICAFORSEN PRODUCT AND
ALICAFORSEN API, INCLUDING, WITHOUT LIMITATION, MANAGEMENT OF THE OVERALL
MANUFACTURING STRATEGY AND TACTICS, CMC WORK, VALIDATION ACTIVITIES

 

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AND BATCHES, FORMULATION, CONTRACT MANUFACTURER SELECTION FOR FINISHED
ALICAFORSEN PRODUCT, ASSOCIATED AUDITS, AND STABILITY TESTING.  FOR THE
AVOIDANCE OF DOUBT, EXCEPT AS EXPRESSLY SET FORTH IN SECTION 3.6.1 AND
SECTION 3.6.2 OF THIS AGREEMENT, NEITHER ATLANTIC NOR ISIS WILL HAVE ANY
OBLIGATIONS TO ONE ANOTHER WITH RESPECT TO THE MANUFACTURE OR SUPPLY OF
ALICAFORSEN API OR ALICAFORSEN PRODUCT, AND ATLANTIC IS LICENSED UNDER
SECTION 2.1.1 TO MAKE AND/OR HAVE MADE ALICAFORSEN API AND ALICAFORSEN PRODUCT
ITSELF OR BY A THIRD PARTY, INCLUDING, WITHOUT LIMITATION, BY AN ENABLED CMO.

 

ARTICLE 4 -
FOLLOW-ON PRODUCT ROFN; EXCLUSIVITY COVENANTS

 

SECTION 4.1            (A)   FOLLOW-ON PRODUCT ROFN.  FOR A PERIOD OF [***]
([***]) YEARS FOLLOWING THE RESTATEMENT DATE, IF ISIS DESIRES TO (I) OFFER A
THIRD PARTY AN EXCLUSIVE LICENSE TO THE RIGHTS TO SYSTEMIC DELIVERY AND ENEMA
DELIVERY FOR A FOLLOW-ON PRODUCT (THE “FOLLOW-ON PRODUCT LICENSE”), OR
(II) PURSUE A BONA-FIDE OFFER FROM A THIRD PARTY FOR A FOLLOW-ON PRODUCT
LICENSE, THEN ISIS WILL PROVIDE ATLANTIC WITH THE RIGHT OF FIRST NEGOTIATION FOR
SUCH FOLLOW-ON PRODUCT LICENSE BY WRITTEN NOTICE TO ATLANTIC AND WILL PROMPTLY
DELIVER EVALUATION MATERIALS AND ANY DATA REASONABLY RELEVANT TO SUCH FOLLOW-ON
PRODUCT, AT WHICH TIME ATLANTIC WILL HAVE [***] DAYS TO NOTIFY ISIS IN WRITING
WHETHER ATLANTIC DESIRES TO OBTAIN THE FOLLOW-ON PRODUCT LICENSE. IF ATLANTIC
PROVIDES ISIS WITH TIMELY WRITTEN NOTICE WITHIN SUCH [***]-DAY PERIOD THAT
ATLANTIC DESIRES TO OBTAIN THE FOLLOW-ON PRODUCT LICENSE, THEN ISIS AND ATLANTIC
WILL NEGOTIATE IN GOOD FAITH, TO CONCLUDE A WRITTEN LICENSE AGREEMENT WITHIN
[***] DAYS ON COMMERCIALLY REASONABLE TERMS (INCLUDING DEVELOPMENT PLAN AND
FUNDING COMMITMENTS FROM ATLANTIC FOR SUCH FOLLOW-ON PRODUCT). IF ATLANTIC FAILS
TO NOTIFY ISIS WITHIN SUCH [***]-DAY PERIOD THAT ATLANTIC DESIRES TO OBTAIN THE
FOLLOW-ON PRODUCT LICENSE OR, IF DESPITE GOOD FAITH NEGOTIATIONS ATLANTIC AND
ISIS ARE UNABLE TO REACH AGREEMENT WITHIN [***] DAYS AFTER ISIS’ RECEIPT OF SUCH
NOTICE FROM ATLANTIC, THEN, NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, (I) ISIS WILL BE FREE TO DEVELOP AND COMMERCIALIZE THE FOLLOW-ON
PRODUCT ON ITS OWN OR WITH A THIRD PARTY AND MAY GRANT THE FOLLOW-ON PRODUCT
LICENSE (OR GRANT A RIGHT TO OBTAIN SUCH AN EXCLUSIVE LICENSE) TO ANY THIRD
PARTY FOR ANY INDICATION ON ECONOMIC TERMS WHICH, WHEN TAKEN AS A WHOLE, ARE NO
MORE FAVORABLE TO ANY SUCH THIRD PARTY THAN THE TERMS LAST OFFERED UNDER THIS
SECTION 4.1 BY ATLANTIC TO ISIS, (II) ATLANTIC WILL HAVE NO FURTHER RIGHTS TO
SUCH FOLLOW-ON PRODUCT, AND (III) ISIS WILL HAVE NO FURTHER OBLIGATIONS TO
ATLANTIC UNDER THIS AGREEMENT WITH RESPECT TO SUCH FOLLOW-ON PRODUCT.

 

(B)           [***] STANDSTILL PERIOD. NOTWITHSTANDING THE FOREGOING IN
SECTION 4.1, FOR A PERIOD OF [***] ([***]) YEARS FOLLOWING THE RESTATEMENT DATE
(THE “STANDSTILL PERIOD”), ISIS AGREES (I) NOT TO CONSUMMATE A FOLLOW-ON PRODUCT
LICENSE WITH A THIRD PARTY THAT INCLUDES A LICENSE TO DEVELOP AND COMMERCIALIZE
A FOLLOW-ON PRODUCT INTENDED TO ACHIEVE A THERAPEUTIC EFFECT IN THE [***]
(“[***]”), OR (II) IF ISIS CONSUMMATES SUCH A FOLLOW-ON PRODUCT LICENSE THAT
INCLUDES RIGHTS TO DEVELOP AND COMMERCIALIZE A [***], SUCH THIRD PARTY WILL BE
PRECLUDED FROM UNDERTAKING DEVELOPMENT OF THE [***] DURING THE STANDSTILL
PERIOD.  FOR PURPOSES OF THIS SECTION 4.1(B), A THIRD PARTY WILL BE DEEMED TO
HAVE INITIATED DEVELOPMENT OF A [***] IF SUCH THIRD PARTY INITIATES [***] WITH A
FOLLOW-ON PRODUCT INTENDED TO ACHIEVE A THERAPEUTIC EFFECT IN THE [***].

 

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SECTION 4.2            EXCLUSIVE PARTNER.

 

4.2.1       DURING THE TERM OF THIS AGREEMENT SO LONG AS ATLANTIC IS DEVELOPING
AND COMMERCIALIZING ALICAFORSEN PRODUCTS IN ACCORDANCE WITH THE TERMS OF THIS
AGREEMENT, ISIS WILL NOT DEVELOP OR COMMERCIALIZE ITSELF, AND WILL NOT PERMIT OR
GRANT ANY LICENSE UNDER THE ALICAFORSEN PATENTS OR THE ICAM-1 SPECIFIC PATENTS
TO A THIRD PARTY TO DEVELOP OR COMMERCIALIZE, ANY ANTISENSE DRUG COMPOUND
DESIGNED TO DIRECTLY INHIBIT ICAM-1. NOTWITHSTANDING THE FOREGOING, SUBJECT TO
SECTION 4.1, ISIS RETAINS THE RIGHT TO (I) USE ANTISENSE COMPOUNDS MODULATING
ICAM-1 (INCLUDING ALICAFORSEN) OR TO TRANSFER SUCH ANTISENSE COMPOUNDS TO THIRD
PARTIES IN EACH CASE FOR NON-COMMERCIAL TARGET VALIDATION PURPOSES, AND
(II) USE, MANUFACTURE, RESEARCH, DEVELOP, AND COMMERCIALIZE FOLLOW-ON PRODUCTS
AND ANY OTHER COMPOUNDS TO INHIBIT ICAM-1 OTHER THAN ALICAFORSEN PRODUCTS,
COVERED BY ANY OF ISIS’ INTELLECTUAL PROPERTY (INCLUDING THE REVERTED RIGHTS),
AND SUCH ACTIVITIES WILL NOT BE INTERPRETED AS A BREACH OF THIS AGREEMENT.   
FOR THE AVOIDANCE OF DOUBT, SUBJECT TO SECTION 4.1, ISIS SHALL NOT BE PROHIBITED
IN ANY MANNER FROM USING OR EXPLOITING ANY ISIS INTELLECTUAL PROPERTY (INCLUDING
THE REVERTED RIGHTS) WITH PRODUCTS AND COMPOUNDS OTHER THAN ALICAFORSEN
PRODUCTS.  ISIS’ OBLIGATIONS UNDER THIS SECTION 4.2.1 WILL AUTOMATICALLY
TERMINATE IN THE EVENT OF A DISCONTINUANCE.

 

4.2.2       TO AVOID CONFUSION IN THE MARKETPLACE, DURING THE TERM OF THIS
AGREEMENT, ATLANTIC AGREES NOT TO DEVELOP OR COMMERCIALIZE ANY PRODUCT DESIGNED
TO DIRECTLY INHIBIT ICAM-1 OTHER THAN THE ALICAFORSEN PRODUCTS, AND WILL NOT
PERMIT OR GRANT ANY LICENSE UNDER THE ALICAFORSEN PATENTS OR ICAM-1 SPECIFIC
PATENTS TO A THIRD PARTY TO DEVELOP OR COMMERCIALIZE ANY SUCH PRODUCT OTHER THAN
THE ALICAFORSEN PRODUCTS.  NOTWITHSTANDING THE FOREGOING SENTENCE, IN THE EVENT
THAT ATLANTIC’S RIGHT OF FIRST NEGOTIATION FOR THE FOLLOW-ON PRODUCT LICENSE
UNDER SECTION 4.1(A) (I) IS VOLUNTARILY TERMINATED BY ATLANTIC BY WRITTEN NOTICE
TO ISIS, OR (II) TERMINATES IN ACCORDANCE WITH SECTION 4.1(A) AND ATLANTIC AND
ISIS HAVE NOT CONSUMMATED THE FOLLOW-ON PRODUCT LICENSE, THIS SECTION 4.2.2 WILL
NO LONGER APPLY TO ATLANTIC.

 

ARTICLE 5 -
[NOT USED]

 

ARTICLE 6 -
FINANCIAL PROVISIONS

 

SECTION 6.1            UP-FRONT PAYMENT BY ATLANTIC.

 

6.1.1       IN CONSIDERATION OF THE LICENSES GRANTED TO ATLANTIC UNDER THE
ORIGINAL AGREEMENT AND SECTION 2.1.1 OF THIS AGREEMENT, FOLLOWING THE EFFECTIVE
DATE, ISIS AND ATLANTIC EXECUTED THE SUBSCRIPTION AND SHARE EXCHANGE AGREEMENT,
PURSUANT TO WHICH ATLANTIC PAID AN UP-FRONT LICENSE FEE OF $[***] TO ISIS WHICH
WAS SATISFIED (IN FULL) BY THE ISSUE TO ISIS OF [***] ORDINARY SHARES IN
ATLANTIC’S SHARE CAPITAL, WHICH WERE IMMEDIATELY EXCHANGED FOR [***] ORDINARY
SHARES IN ATLANTIC HEALTHCARE’S SHARE CAPITAL PURSUANT TO THE TERMS OF THE
SUBSCRIPTION AND SHARE EXCHANGE AGREEMENT; PROVIDED, HOWEVER,

 

8

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(a)  if at any time during the Anti-Dilution Protection Period (as defined in
the Subscription and Share Exchange Agreement) Atlantic Healthcare issues any
shares in the capital of Atlantic Healthcare to current shareholders (determined
by reference to the date of the Original Agreement) at a subscription price per
share of less than £[***], then Isis shall have the right to subscribe for
additional AH Shares (as defined in the Subscription and Share Exchange
Agreement) at [***] in the share capital of Atlantic Healthcare (for which
purpose all shares in Atlantic Healthcare previously issued to Isis pursuant to
the Original Agreement shall be deemed held by Isis, irrespective of whether
Isis remains the registered holder thereof) had such new shares so issued to
existing shareholders [***], as further provided for in the Subscription and
Share Exchange Agreement; and

 

(B) IF AT ANY TIME DURING THE ANTI-DILUTION PROTECTION PERIOD ATLANTIC
HEALTHCARE ISSUES ANY SHARES IN THE CAPITAL OF ATLANTIC HEALTHCARE TO [***] (AS
DEFINED IN THE SUBSCRIPTION AND SHARE EXCHANGE AGREEMENT) AND/OR [***] (AS
DEFINED IN THE SUBSCRIPTION AND SHARE EXCHANGE AGREEMENT) BEYOND [***] SHARES ON
TERMS NOT OFFERED TO OTHER SHAREHOLDERS (INCLUDING ISIS), THEN ISIS WILL HAVE
THE RIGHT TO PARTICIPATE ON THE SAME TERMS AS [***] (AS THE CASE MAY BE) SO AS
TO MAINTAIN ITS PRO-RATA SHAREHOLDING IN ATLANTIC HEALTHCARE (FOR WHICH PURPOSE
ALL SHARES IN ATLANTIC HEALTHCARE PREVIOUSLY ISSUED TO ISIS PURSUANT TO THE
ORIGINAL AGREEMENT SHALL BE DEEMED HELD BY ISIS, IRRESPECTIVE OF WHETHER ISIS
REMAINS THE REGISTERED HOLDER THEREOF) AS FURTHER PROVIDED FOR IN THE
SUBSCRIPTION AND SHARE EXCHANGE AGREEMENT.

 

6.1.2  IN NO EVENT WILL ATLANTIC ISSUE SHARES TO ISIS THAT EXCEED THE EQUITY
CAP.

 

SECTION 6.2            MILESTONE PAYMENTS BY ATLANTIC.

 

6.2.1       ATLANTIC WILL PAY TO ISIS THE RELEVANT MILESTONE PAYMENT IN CASH OR
IN AN EQUIVALENT AMOUNT OF ATLANTIC EQUITY SECURITIES (SUBJECT TO THE WRITTEN
CONSENT OF ATLANTIC HEALTHCARE LIMITED AND IN ACCORDANCE WITH THE TERMS OF THE
SUBSCRIPTION AND SHARE EXCHANGE AGREEMENT), AT ATLANTIC’S SOLE DISCRETION, NOT
MORE THAN 60 DAYS AFTER ACHIEVEMENT BY ATLANTIC, ITS AFFILIATES OR A
SUBLICENSEE, OF EACH OF THE APPLICABLE EVENTS, AS FOLLOWS:

 

Event

 

Payment*

 

[***]

 

US $

[***]

 

[***]

 

US $

[***]

 

 

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* In respect of the above payments, Atlantic will be entitled to a single $[***]
credit that may be applied to the first [***]% of each milestone payment due
under this Section 6.2.1 until such credit is exhausted.  For example only, if
Atlantic achieves the [***] milestone for an Alicaforsen Product for an
indication other than [***], Atlantic may apply the $[***] credit toward the
first [***]% of the applicable $[***] milestone payment (i.e., [***]% of $[***]
= $[***]), such that after the credit is applied Atlantic will owe Isis a total
milestone payment of $[***], and will have a remaining credit of $[***] (i.e.,
$[***] - $[***] = $[***]) to apply to the first [***]% of another milestone
payment under this Agreement.

 

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6.2.2 Notwithstanding the foregoing, in no event will Atlantic issue Atlantic
Equity Securities to Isis that exceed the Equity Cap. To the extent any
milestone payment of Atlantic Equity Securities will cause Isis’ aggregate
equity ownership in Atlantic to exceed the Equity Cap, Atlantic will issue to
Isis only the number of shares that will maintain such Equity Cap, and will pay
Isis the remainder of such milestone payment in cash.  For purposes of this
Section 6.2, the term “Atlantic Equity Securities” means (a) if Atlantic has a
class of stock (x) registered under Section 12(b) or 12(g) of the Securities
Exchange Act of 1934 and that is publicly traded on a major US exchange such as
the NYSE or NASDAQ, or (y) traded on a major European exchange such as Deutsche
Börse or the London Stock Exchange, such publicly traded common stock of
Atlantic, the value of which will be determined [***]% by the average closing
price for the 15 trading days immediately preceding the date the particular
milestone event referenced in this Section 6.2 is achieved; or (b) if Atlantic
does not have a class of publicly traded stock, the equity securities of
Atlantic issued in its most recent venture capital financing occurring prior to
the date the particular milestone event referenced in this Section 6.2 is
achieved, which will be issued to Isis at the same price per share and with the
same rights, preferences and privileges as provided to the other investors in
such financing.

 

SECTION 6.3            SUBLICENSE REVENUE.

 

6.3.1       IN THE EVENT THAT ATLANTIC ENTERS INTO A SUBLICENSE, ATLANTIC WILL
PAY ISIS [***]% OF THE SUBLICENSE REVENUE (WHICH DOES NOT INCLUDE PAYMENTS BASED
ON COMMERCIAL SALES OF AN ALICAFORSEN PRODUCT, INCLUDING ROYALTIES OR
PROFIT-SHARING) FROM SUCH SUBLICENSING OF ANY ALICAFORSEN PRODUCT BY ATLANTIC OR
ITS AFFILIATES.

 

6.3.2       ANY PAYMENT TO ISIS FOR ITS PORTION OF SUBLICENSE REVENUE DUE UNDER
THIS SECTION 6.3 WILL BE DUE WITHIN 30 DAYS OF ATLANTIC RECEIVING SUCH
SUBLICENSE REVENUE.

 

SECTION 6.4            ROYALTY PAYMENTS BY ATLANTIC.

 

6.4.1       FOR ANY ALICAFORSEN PRODUCT SOLD BY ATLANTIC OR ITS AFFILIATES, IN
CONSIDERATION OF ISIS’ COLLABORATIVE EFFORTS AND THE LICENSES GRANTED HEREUNDER,
ATLANTIC WILL PAY ISIS ROYALTIES ON NET SALES OF EACH ALICAFORSEN PRODUCT IN
ACCORDANCE WITH THE FOLLOWING TABLE:

 

Cumulative Net Sales

 

Royalty Rate

 

Less than US $[***]

 

[***]

%

US $[***] to US $[***]

 

[***]

%

Above US $[***]

 

[***]

%

 

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6.4.2       FOR ANY ALICAFORSEN PRODUCTS SOLD PURSUANT TO A SUBLICENSE, IN
CONSIDERATION OF ISIS’ COLLABORATIVE EFFORTS AND THE LICENSES GRANTED HEREUNDER,
ATLANTIC WILL PAY ISIS ROYALTIES ON NET SALES AS FOLLOWS:

 

6.4.2.1           FOR ALICAFORSEN PRODUCTS SOLD FOR [***] INDICATION, ATLANTIC
WILL PAY ISIS ROYALTIES ON NET SALES OF EACH ALICAFORSEN PRODUCT EQUAL TO THE
GREATER OF (I) [***]% OF THE ROYALTY ATLANTIC IS ENTITLED TO RECEIVE UNDER SUCH
SUBLICENSE, OR (II) [***]% OF NET SALES; AND

 

6.4.2.2           FOR AN ALICAFORSEN PRODUCT THAT IS NOT INDICATED FOR [***],
ATLANTIC WILL PAY ISIS ROYALTIES ON NET SALES OF EACH ALICAFORSEN PRODUCT AS
FOLLOWS:

 

(A) IF THE ROYALTY TO ATLANTIC IS LESS THAN OR EQUAL TO [***]% OF NET SALES,
THEN ISIS RECEIVES [***]% OF NET SALES OF EACH ALICAFORSEN PRODUCT;

 

(B) IF THE ROYALTY TO ATLANTIC IS GREATER THAN [***]% BUT LESS THAN [***]% OF
NET SALES, THEN ISIS RECEIVES [***]% OF NET SALES OF EACH ALICAFORSEN PRODUCT;
OR

 

(C) IF THE ROYALTY TO ATLANTIC IS EQUAL TO OR GREATER THAN [***]% OF NET SALES,
THEN ISIS RECEIVES [***]% OF NET SALES OF EACH ALICAFORSEN PRODUCT.

 

6.4.3       ISIS WILL BE RESPONSIBLE FOR PAYMENT OF ANY THIRD PARTY ROYALTY
OBLIGATIONS RELATED TO AN ALICAFORSEN PRODUCT THAT EXIST AS OF THE EFFECTIVE
DATE (“EXISTING ROYALTIES”), INCLUDING EXISTING ROYALTIES DUE UNDER THE
AGREEMENT WITH [***] DATED [***].  ATLANTIC WILL BE RESPONSIBLE FOR ALL OTHER
THIRD PARTY ROYALTIES, FEES AND MILESTONES THAT MAY ARISE RELATED TO THE
DEVELOPMENT OR COMMERCIALIZATION OF ALICAFORSEN PRODUCTS.

 

SECTION 6.5            TERM; TIMING OF ROYALTY PAYMENTS.  ATLANTIC’S OBLIGATION
TO PAY ROYALTIES ON EACH ALICAFORSEN PRODUCT WILL EXPIRE ON A COUNTRY-BY-COUNTRY
BASIS UPON THE LATER OF: (I) [***] YEARS FROM THE DATE OF FIRST COMMERCIAL SALE
OF SUCH ALICAFORSEN PRODUCT IN SUCH COUNTRY OF SALE, OR (II) THE EXPIRATION OF
THE LAST TO EXPIRE VALID CLAIM OF ALICAFORSEN PATENTS AND ICAM-1 SPECIFIC
PATENTS COVERING THE MAKING, USING, OR SELLING OF SUCH ALICAFORSEN PRODUCT IN
THE COUNTRY OF SALE, OR (III) THE EXPIRATION OF THE LAST TO EXPIRE VALID
COMPOSITION OF MATTER CLAIM WITHIN ALICAFORSEN PATENTS OR ICAM-1 SPECIFIC
PATENTS IN THE COUNTRY OF MANUFACTURE OF THAT ALICAFORSEN PRODUCT. THE ROYALTIES
DUE UNDER SECTION 6.4 WILL BECOME DUE AND PAYABLE: (I) WITHIN 30 DAYS OF EACH
RESPECTIVE ROYALTY DUE DATE WITH RESPECT TO NET SALES RECEIVED BY ATLANTIC OR
ITS AFFILIATES, AND (II) WITH RESPECT TO ROYALTIES DUE UNDER SUBLICENSES, WITHIN
30 DAYS OF ATLANTIC ITSELF RECEIVING THE ROYALTY PAYMENTS DUE FROM ITS
SUBLICENSEES.  IN EACH CASE ROYALTIES WILL BE CALCULATED IN RESPECT OF THE NET
SALES IN THE CALENDAR QUARTER IMMEDIATELY PRECEDING THE APPLICABLE ROYALTY DUE
DATE.

 

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SECTION 6.6            PAYMENT METHOD.  ANY AMOUNTS DUE TO ISIS UNDER THIS
AGREEMENT WILL BE PAID IN U.S. DOLLARS, BY WIRE TRANSFER IN IMMEDIATELY
AVAILABLE FUNDS TO AN ACCOUNT DESIGNATED BY ISIS.  ANY PAYMENTS OR PORTIONS
THEREOF DUE HEREUNDER WHICH ARE NOT PAID ON THE DATE SUCH PAYMENTS ARE DUE UNDER
THIS AGREEMENT AND THE PAYMENT IS NOT IN DISPUTE BETWEEN THE PARTIES, OR IF
DISPUTED THE DISPUTE HAS NOT BEEN RESOLVED, WILL BEAR INTEREST AT A RATE EQUAL
TO THE PRIME RATE AS PUBLISHED IN THE WALL STREET JOURNAL, EASTERN EDITION, ON
THE FIRST DAY OF EACH CALENDAR QUARTER IN WHICH SUCH PAYMENTS ARE OVERDUE, PLUS
1% CALCULATED ON THE NUMBER OF DAYS SUCH PAYMENT IS DELINQUENT, COMPOUNDED
MONTHLY.

 

SECTION 6.7            CURRENCY; FOREIGN PAYMENTS.  IF ANY CURRENCY CONVERSION
WILL BE REQUIRED IN CONNECTION WITH ANY PAYMENT HEREUNDER, SUCH CONVERSION WILL
BE MADE BY USING THE EXCHANGE RATE FOR THE PURCHASE OF U.S. DOLLARS AS PUBLISHED
IN THE WALL STREET JOURNAL, EASTERN EDITION, ON THE LAST BUSINESS DAY OF THE
CALENDAR QUARTER TO WHICH SUCH PAYMENTS RELATE.  IF AT ANY TIME LEGAL
RESTRICTIONS PREVENT THE PROMPT REMITTANCE OF ANY PAYMENTS IN ANY JURISDICTION,
ATLANTIC MAY NOTIFY ISIS AND MAKE SUCH PAYMENTS BY DEPOSITING THE AMOUNT THEREOF
IN LOCAL CURRENCY IN A BANK ACCOUNT OR OTHER DEPOSITORY IN SUCH COUNTRY IN THE
NAME OF ISIS OR ITS DESIGNEE, AND ATLANTIC WILL HAVE NO FURTHER OBLIGATIONS
UNDER THIS AGREEMENT WITH RESPECT THERETO.  ALL PAYMENTS UNDER THIS AGREEMENT
SHALL BE MADE FREE AND CLEAR AND WITHOUT ANY SET OFF, DEDUCTION, WITHHOLDING OR
DEFERMENT IN RESPECT OF ANY TAXES UNLESS REQUIRED BY LAW OR PRACTICE OF ANY
RELEVANT GOVERNMENTAL AUTHORITY.  THE PARTIES SHALL CO-OPERATE TO MINIMIZE ANY
DEDUCTION OR WITHHOLDING IN RELATION TO ANY PAYMENTS PURSUANT TO THIS AGREEMENT.

 

SECTION 6.8            RECORDS RETENTION; AUDIT.

 

6.8.1       RECORD RETENTION.  ATLANTIC WILL MAINTAIN (AND WILL ENSURE THAT ITS
AFFILIATES AND SUBLICENSEES WILL MAINTAIN) COMPLETE AND ACCURATE BOOKS, RECORDS
AND ACCOUNTS THAT FAIRLY REFLECT NET SALES WITH RESPECT TO EACH ALICAFORSEN
PRODUCT, IN EACH CASE IN SUFFICIENT DETAIL TO CONFIRM THE ACCURACY OF ANY
PAYMENTS REQUIRED HEREUNDER AND IN ACCORDANCE WITH IFRS, WHICH BOOKS, RECORDS
AND ACCOUNTS WILL BE RETAINED BY ATLANTIC, ITS AFFILIATES OR SUBLICENSEES (AS
APPLICABLE) FOR THE LATER OF (I) 5 YEARS AFTER THE END OF THE PERIOD TO WHICH
SUCH BOOKS, RECORDS AND ACCOUNTS PERTAIN, AND (II) THE EXPIRATION OF THE
APPLICABLE TAX STATUTE OF LIMITATIONS (OR ANY EXTENSIONS THEREOF), OR FOR SUCH
LONGER PERIOD AS MAY BE REQUIRED BY APPLICABLE LAW.

 

6.8.2       AUDIT.  ISIS WILL HAVE THE RIGHT TO HAVE AN INDEPENDENT CERTIFIED
PUBLIC ACCOUNTING FIRM OF NATIONALLY RECOGNIZED STANDING, REASONABLY ACCEPTABLE
TO ATLANTIC, HAVE ACCESS DURING NORMAL BUSINESS HOURS, AND UPON REASONABLE PRIOR
WRITTEN NOTICE, TO ATLANTIC’S RECORDS (AND ITS AFFILIATES AND SUBLICENSEES) AS
MAY BE REASONABLY NECESSARY TO VERIFY THE ACCURACY OF NET SALES, SUBLICENSE
REVENUE, AS APPLICABLE, FOR ANY CALENDAR QUARTER OR CALENDAR YEAR ENDING NOT
MORE THAN [***] MONTHS PRIOR TO THE DATE OF SUCH REQUEST; PROVIDED, HOWEVER,
THAT ISIS WILL NOT HAVE THE RIGHT TO CONDUCT MORE THAN ONE SUCH AUDIT IN ANY
CALENDAR YEAR EXCEPT AS PROVIDED BELOW.  THE ACCOUNTING FIRM WILL ENTER INTO
APPROPRIATE OBLIGATIONS WITH ATLANTIC TO TREAT ALL INFORMATION IT RECEIVES
DURING ITS INSPECTION AS CONFIDENTIAL.  THE ACCOUNTING FIRM SHALL DISCLOSE TO
ISIS ONLY WHETHER THE REPORTED NET SALES AND SUBLICENSE REVENUE ARE CORRECT AND
DETAILS OF ANY DISCREPANCIES BUT NO OTHER INFORMATION SHALL BE DISCLOSED TO
ISIS.  ISIS WILL BEAR THE COST OF SUCH AUDIT UNLESS THE AUDIT REVEALS A VARIANCE
OF MORE THAN [***]% FROM THE REPORTED RESULTS, IN WHICH CASE ATLANTIC WILL BEAR
THE COST OF THE AUDIT.

 

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6.8.3       PAYMENT OF ADDITIONAL AMOUNTS.  IF, BASED ON THE RESULTS OF SUCH
AUDIT, ADDITIONAL PAYMENTS ARE OWED BY EITHER PARTY TO THE OTHER UNDER THIS
AGREEMENT, THE PARTY DUE TO MAKE A PAYMENT WILL MAKE SUCH ADDITIONAL PAYMENTS,
WITH INTEREST AS SET FORTH IN SECTION 6.6, WITHIN 30 DAYS AFTER THE DATE ON
WHICH SUCH ACCOUNTING FIRM’S WRITTEN REPORT IS DELIVERED TO SUCH PARTY.

 

6.8.4 CONFIDENTIALITY.  ISIS WILL TREAT THE FINANCIAL INFORMATION REPORTED TO IT
UNDER SECTION 6.8.2 IN ACCORDANCE WITH THE CONFIDENTIALITY PROVISIONS OF
ARTICLE 8; PROVIDED, HOWEVER, THAT ISIS MAY PROVIDE THIRD PARTIES TO WHICH ISIS
OWES EXISTING ROYALTIES ON ALICAFORSEN PRODUCTS SUCH INFORMATION IF IT EXERCISES
ITS AUDIT RIGHTS CONCERNING THE ALICAFORSEN PRODUCTS AGAINST ISIS AND PROVIDED
SUCH THIRD PARTY IS BOUND TO KEEP SUCH INFORMATION CONFIDENTIAL.

 

SECTION 6.9            ISIS PAYMENT TO ATLANTIC.

 

6.9.1       UP-FRONT PAYMENT BY ISIS. IN CONSIDERATION FOR THE REVERTED RIGHTS,
ISIS HEREBY PROVIDES ATLANTIC WITH A SINGLE US$[***] CREDIT THAT MAY BE APPLIED
TO THE PURCHASE OF ALICAFORSEN API UNDER SECTION 3.6.2 ABOVE.

 

ARTICLE 7 -
PRESS RELEASES & PUBLICATIONS

 

SECTION 7.1            PRESS RELEASES

 

7.1.1 PRESS RELEASES - GENERALLY.  EACH PROVISION OF THIS SECTION 7.1.1 IS
SUBJECT TO SECTION 7.1.2 BELOW.  PRESS RELEASES OR OTHER SIMILAR PUBLIC
COMMUNICATION BY EITHER PARTY RELATING TO THIS AGREEMENT, WILL BE APPROVED IN
ADVANCE BY THE OTHER PARTY, WHICH APPROVAL WILL NOT BE UNREASONABLY WITHHELD OR
DELAYED, EXCEPT (I) DISCLOSURES MADE BY ISIS RELATED TO PRODUCTS COVERED BY THE
REVERTED RIGHTS, OR (II) FOR THOSE COMMUNICATIONS REQUIRED BY APPLICABLE LAW,
WHICH ARE AUTHORIZED DISCLOSURES OR DISCLOSURES OF INFORMATION FOR WHICH CONSENT
HAS PREVIOUSLY BEEN OBTAINED, AND INFORMATION OF A SIMILAR NATURE TO THAT WHICH
HAS BEEN PREVIOUSLY DISCLOSED PUBLICLY WITH RESPECT TO THIS AGREEMENT, EACH OF
WHICH WILL NOT REQUIRE ADVANCE APPROVAL, BUT WILL BE PROVIDED TO THE OTHER PARTY
AS SOON AS PRACTICABLE AFTER THE RELEASE OR COMMUNICATION THEREOF.

 

7.1.2 PRESS RELEASES — PRODUCT SAFETY/EFFICACY. EACH PARTY WILL IMMEDIATELY
NOTIFY (AND, IF POSSIBLE, PROVIDE AS MUCH ADVANCE NOTICE AS POSSIBLE TO) THE
OTHER OF ANY EVENT MATERIALLY RELATED TO ALICAFORSEN PRODUCTS (INCLUDING ANY
REGULATORY APPROVAL) SO THAT THE PARTIES MAY ANALYZE THE NEED TO OR DESIRABILITY
OF PUBLICLY DISCLOSING OR REPORTING SUCH EVENT, AND ISIS AGREES TO PROVIDE
ATLANTIC WITH AT LEAST 3 DAYS ADVANCE NOTICE OF ISIS’ INTENTION TO PUBLICLY
DISCLOSE ANY ADVERSE SAFETY INFORMATION RELATED TO A FOLLOW-ON PRODUCT. 
NOTWITHSTANDING SECTION 7.1.1 ABOVE, ANY PRESS RELEASE OR OTHER SIMILAR PUBLIC
COMMUNICATION BY EITHER PARTY RELATED AN ALICAFORSEN PRODUCT’S EFFICACY OR
SAFETY DATA AND/OR RESULTS, WILL BE SUBMITTED TO THE OTHER PARTY FOR REVIEW AND
APPROVAL AT LEAST 72 HOURS IN ADVANCE OF SUCH PROPOSED PUBLIC DISCLOSURE, WHICH
APPROVAL WILL NOT BE UNREASONABLY WITHHELD OR DELAYED.

 

SECTION 7.2            PUBLICATIONS.  EACH PROVISION OF THIS SECTION 7.2 IS
SUBJECT TO SECTION 7.1.2 ABOVE.  AT LEAST [***] DAYS PRIOR TO A PARTY’S
SUBMISSION OF ANY MATERIAL RELATED TO THE RESEARCH OR DEVELOPMENT ACTIVITIES
HEREUNDER FOR PUBLICATION OR PRESENTATION, THE PUBLISHING

 

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PARTY WILL PROVIDE TO THE OTHER PARTY WITH A DRAFT OF SUCH MATERIAL FOR ITS
REVIEW AND COMMENT.  THE NON-PUBLISHING PARTY WILL PROVIDE ANY COMMENTS TO THE
PUBLISHING PARTY WITHIN [***] DAYS OF RECEIPT OF SUCH MATERIALS. EXCEPT FOR
DISCLOSURES MADE BY ISIS RELATED TO PRODUCTS COVERED BY THE REVERTED RIGHTS, NO
PUBLICATION OR PRESENTATION WITH RESPECT TO THE RESEARCH OR DEVELOPMENT
ACTIVITIES HEREUNDER WILL BE MADE UNLESS AND UNTIL THE NON-PUBLISHING PARTY’S
COMMENTS ON THE PROPOSED PUBLICATION OR PRESENTATION HAVE BEEN DISCUSSED BY THE
PARTIES. IF REQUESTED IN WRITING BY THE NON-PUBLISHING PARTY, THE PUBLISHING
PARTY WILL WITHHOLD MATERIAL FROM SUBMISSION FOR PUBLICATION OR PRESENTATION FOR
A REASONABLE TIME TO ALLOW FOR THE FILING OF A PATENT APPLICATION.

 

ARTICLE 8 -
CONFIDENTIALITY

 

SECTION 8.1            DISCLOSURE AND USE RESTRICTION.  EXCEPT PURSUANT TO AN
AUTHORIZED DISCLOSURE, THE PARTIES AGREE THAT, FOR THE TERM AND FOR FIVE YEARS
THEREAFTER, EACH PARTY WILL KEEP COMPLETELY CONFIDENTIAL AND WILL NOT PUBLISH,
SUBMIT FOR PUBLICATION OR OTHERWISE DISCLOSE, AND WILL NOT USE FOR ANY PURPOSE
EXCEPT FOR THE PURPOSES CONTEMPLATED BY THIS AGREEMENT, ANY CONFIDENTIAL
INFORMATION RECEIVED FROM THE OTHER PARTY.

 

ARTICLE 9 -
INTELLECTUAL PROPERTY

 

SECTION 9.1            PROSECUTION OF PATENTS.

 

9.1.1       SOLELY OWNED PATENTS. WITH THE EXCEPTION OF THE ALICAFORSEN PATENTS
AND THE ICAM-1 SPECIFIC PATENTS, WHICH ARE ADDRESSED IN SECTION 9.1.2, EACH
PARTY WILL HAVE THE SOLE RIGHT, AT ITS COST AND EXPENSE AND AT ITS SOLE
DISCRETION, TO OBTAIN, PROSECUTE, MAINTAIN AND ENFORCE THROUGHOUT THE WORLD ANY
PATENTS SOLELY OWNED OR CONTROLLED BY SUCH PARTY.

 

9.1.2       ALICAFORSEN PATENTS AND ICAM-1 SPECIFIC PATENTS.  SUBJECT TO
SECTION 9.1.4 BELOW, ISIS WILL HAVE THE SOLE OBLIGATION AT ITS EXPENSE, TO
OBTAIN, PROSECUTE AND MAINTAIN THE ALICAFORSEN PATENTS AND THE ICAM-1 SPECIFIC
PATENTS IN SUCH COUNTRIES AS ISIS IS PROSECUTING SUCH PATENTS ON THE RESTATEMENT
DATE USING COMMERCIALLY REASONABLE EFFORTS.  FOR CLARITY, ATLANTIC WILL NOT HAVE
THE RIGHT TO REVIEW OR COMMENT ON ANY APPLICATIONS OR REGISTRATIONS TO BE FILED
BY ISIS UNDER THIS SECTION 9.1.2, AND ISIS MAY CEASE PROSECUTING OR MAINTAINING
PARTICULAR APPLICATIONS OR PATENTS IN THE ALICAFORSEN PATENTS AND ICAM-1
SPECIFIC PATENTS IN SELECTED JURISDICTIONS, IF ISIS DETERMINES THAT IT IS NOT
COMMERCIALLY REASONABLE TO CONTINUE SUCH EFFORTS (IN WHICH CASE THE TERMS OF
SECTION 9.1.4 WILL APPLY).

 

9.1.3       [NOT USED]

 

9.1.4       DISCONTINUED PATENTS.  IF UNDER SECTION 9.1.2 ISIS ELECTS TO
DISCONTINUE PROSECUTION OR MAINTENANCE OF ANY PARTICULAR APPLICATIONS OR PATENTS
IN THE ALICAFORSEN PATENTS OR THE ICAM-1 SPECIFIC PATENTS (IF APPLICABLE), AS
THE CASE MAY BE, IN A SELECTED JURISDICTION, ISIS WILL GIVE THIRTY (30) DAYS
ADVANCE WRITTEN NOTICE TO ATLANTIC OF ANY DECISION TO CEASE PREPARATION, FILING,
PROSECUTION AND MAINTENANCE OF THAT PATENT RIGHT (A “DISCONTINUED PATENT”).  IN
SUCH CASE, ATLANTIC MAY ELECT AT ITS SOLE DISCRETION TO CONTINUE PREPARATION,
FILING, PROSECUTION OR MAINTENANCE OF THE DISCONTINUED PATENT IN THE SELECT
JURISDICTION AT ITS SOLE EXPENSE AND THEREAFTER ATLANTIC WILL OWN ANY SUCH
PATENT APPLICATION AND PATENTS MATURING THEREFROM AND BE

 

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SOLELY RESPONSIBLE FOR ALL COSTS. ISIS WILL EXECUTE SUCH DOCUMENTS AND PERFORM
SUCH ACTS AS MAY BE REASONABLY NECESSARY FOR ATLANTIC TO CONTINUE PROSECUTION OR
MAINTENANCE OF THE APPLICABLE DISCONTINUED PATENT INCLUDING ASSIGNING OWNERSHIP
OF SUCH PATENT OR APPLICATION. SHOULD ATLANTIC ELECT TO CONTINUE PREPARATION,
FILING, PROSECUTION AND MAINTENANCE OF DISCONTINUED PATENTS WHICH ARE
ALICAFORSEN PATENTS OR ICAM-1 SPECIFIC PATENTS, SUCH PATENTS WILL NO LONGER BE
DEEMED TO BE ALICAFORSEN PATENTS OR ICAM-1 SPECIFIC PATENTS FOR THE PURPOSES OF
THIS AGREEMENT.  NOTWITHSTANDING THE FOREGOING, ATLANTIC’S RIGHT TO CONTINUE THE
PREPARATION, FILING, PROSECUTION AND MAINTENANCE OF A DISCONTINUED PATENT THAT
IS AN ICAM-SPECIFIC PATENT IS LIMITED SOLELY TO THE EXTENT SUCH PATENT CLAIMS
ICAM-1.

 

9.1.5       COOPERATION.  EACH PARTY WILL COOPERATE REASONABLY IN THE
PREPARATION, FILING, PROSECUTION, AND MAINTENANCE OF THE ALICAFORSEN PATENTS AND
THE ICAM-1 SPECIFIC PATENTS (IF APPLICABLE), AND THE OTHER PARTY’S PATENTS WHICH
COVER AN ALICAFORSEN PRODUCT. SUCH COOPERATION INCLUDES (A) PROMPTLY EXECUTING
ALL PAPERS AND INSTRUMENTS AND REQUIRING EMPLOYEES TO EXECUTE SUCH PAPERS AND
INSTRUMENTS AS REASONABLE AND APPROPRIATE SO AS TO ENABLE SUCH OTHER PARTY, TO
FILE, PROSECUTE, AND MAINTAIN ITS PATENTS IN ANY COUNTRY; AND (B) PROMPTLY
INFORMING SUCH OTHER PARTY OF MATTERS THAT MAY AFFECT THE PREPARATION, FILING,
PROSECUTION, OR MAINTENANCE OF ANY SUCH PATENTS.

 

9.1.6       PATENT TERM EXTENSIONS.  THE PARTIES AGREE TO COOPERATE IN AN EFFORT
TO AVOID LOSS OF ANY OF THE PATENTS FORMING PART OF ALICAFORSEN PATENTS OR
ICAM-1 SPECIFIC PATENTS INCLUDING BY EXECUTING ANY DOCUMENTS AS MAY BE
REASONABLY REQUIRED.  IN PARTICULAR, THE PARTIES SHALL COOPERATE WITH EACH OTHER
IN OBTAINING PATENT TERM EXTENSION OR RESTORATION OR SUPPLEMENTAL PROTECTION
CERTIFICATE (“PATENT TERM EXTENSIONS”) OR THEIR EQUIVALENTS IN ANY COUNTRY AND
REGION WHERE APPLICABLE.  IN PARTICULAR BUT WITHOUT LIMITING THE FOREGOING ISIS
SHALL PROVIDE REASONABLE ASSISTANCE TO ATLANTIC, INCLUDING BY EXECUTING ANY
REQUIRED DOCUMENTS AND PROVIDING ANY RELEVANT PATENT INFORMATION TO ATLANTIC, SO
THAT ATLANTIC, AS REGULATORY APPROVAL APPLICANT, MAY DEAL WITH THE APPLICABLE
REGULATORY AUTHORITY IN CONNECTION WITH OBTAINING SUCH PATENT TERM EXTENSION.

 

SECTION 9.2            ENFORCEMENT OF PATENTS

 

9.2.1       RIGHTS AND PROCEDURES.  IF ISIS OR ATLANTIC DETERMINES THAT ANY
PATENT LICENSED HEREUNDER IS BEING INFRINGED BY A THIRD PARTY’S ACTIVITIES AND
THAT SUCH INFRINGEMENT COULD AFFECT THE EXERCISE BY THE PARTIES OF THEIR
RESPECTIVE RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT, IT WILL PROMPTLY NOTIFY
THE OTHER PARTY IN WRITING.  EXCEPT FOR THE ALICAFORSEN PATENTS AND THE ICAM-1
SPECIFIC PATENTS WHICH ARE DISCUSSED BELOW, THE PARTY CONTROLLING THE
PATENT(S) WHICH ARE ALLEGEDLY BEING INFRINGED WILL HAVE THE SOLE RIGHT AND
OBLIGATION TO REMOVE SUCH INFRINGEMENT.

 

(A)           ALICAFORSEN PATENTS AND ICAM-1 SPECIFIC PATENTS.  WITH RESPECT TO
THE ALICAFORSEN PATENTS AND THE ICAM-1 SPECIFIC PATENTS (IF APPLICABLE AND
SOLELY TO THE EXTENT INFRINGED BY A THIRD PARTY WITH A PRODUCT TARGETING
ICAM-1), ATLANTIC WILL HAVE THE FIRST RIGHT, BUT NOT THE OBLIGATION, AT
ATLANTIC’S EXPENSE, TO REMOVE SUCH INFRINGEMENT. IN THE EVENT THAT ATLANTIC
FAILS TO TAKE COMMERCIALLY APPROPRIATE STEPS TO REMOVE ANY SUCH INFRINGEMENT
WITHIN 90 DAYS FOLLOWING NOTICE OF SUCH INFRINGEMENT, OR EARLIER NOTIFIES ISIS
IN WRITING OF ITS INTENT NOT TO TAKE SUCH STEPS, AND SUCH INFRINGEMENT IS LIKELY
TO HAVE A MATERIAL ADVERSE EFFECT ON

 

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THE ALICAFORSEN PRODUCT, SO LONG AS THE INFRINGEMENT IS NOT TAKING PLACE IN A
MAJOR MARKET AND SO LONG AS ATLANTIC DOES NOT INFORM ISIS THAT ATLANTIC
CONSIDERS, IN GOOD FAITH, THAT TO TAKE SUCH PROCEEDS WOULD (X) BE PREJUDICIAL TO
ITS LITIGATION STRATEGY IN A MAJOR MARKET AND (Y) BE COMMERCIALLY UNREASONABLE
UNDER THE CIRCUMSTANCES, (I) ISIS WILL HAVE THE RIGHT TO DO SO AT ITS EXPENSE,
(II) ATLANTIC WILL HAVE THE RIGHT, AT ITS OWN EXPENSE, TO BE REPRESENTED IN ANY
SUCH ACTION, AND (III) THE EXCLUSIVE LICENSE(S) GRANTED UNDER ARTICLE 2 THAT
PERTAIN TO SUCH ALICAFORSEN PATENT OR ICAM-1 SPECIFIC PATENT (IF APPLICABLE),
WILL AUTOMATICALLY CONVERT INTO NONEXCLUSIVE LICENSES. ISIS WILL HAVE THE RIGHT,
AT ISIS’ OWN EXPENSE, TO REMOVE INFRINGEMENT OF THE ALICAFORSEN PATENTS OR
ICAM-1 SPECIFIC PATENTS (IF APPLICABLE) (I) IF ISIS IS UNILATERALLY DEVELOPING
AND COMMERCIALIZING AN ALICAFORSEN PRODUCT PURSUANT TO SECTION 11.2, (II) WITH
RESPECT TO ANY PRODUCTS COVERED BY THE REVERTED RIGHTS, OR (III) IF A THIRD
PARTY IS INFRINGING THE ICAM-1 SPECIFIC PATENTS WITH ANY PRODUCT THAT DOES NOT
TARGET ICAM-1.

 

(B)           COOPERATION.  THE PARTY NOT ENFORCING THE APPLICABLE PATENT WILL
PROVIDE REASONABLE ASSISTANCE TO THE OTHER PARTY (AT THE ENFORCING PARTY’S
EXPENSE), INCLUDING PROVIDING ACCESS TO RELEVANT DOCUMENTS AND OTHER EVIDENCE,
MAKING ITS EMPLOYEES AVAILABLE AT REASONABLE BUSINESS HOURS, AND JOINING THE
ACTION TO THE EXTENT NECESSARY TO ALLOW THE ENFORCING PARTY TO MAINTAIN THE
ACTION.  IF ISIS REQUESTS THAT ATLANTIC TAKE ACTION TO REMOVE INFRINGEMENT OF AN
ALICAFORSEN PATENT OR ICAM-1 SPECIFIC PATENT (IF APPLICABLE) TO THE EXTENT
INFRINGED BY A THIRD PARTY WITH A PRODUCT TARGETING ICAM-1, AND ATLANTIC
BELIEVES IT IS NOT COMMERCIALLY APPROPRIATE TO TAKE SUCH ACTIONS, THE PARTIES
WILL MEET AND DISCUSS IN GOOD FAITH SUCH CIRCUMSTANCES AND SEEK TO REACH
AGREEMENT ON WHAT APPROPRIATE STEPS TO TAKE TO CAUSE SUCH INFRINGEMENT TO END IN
A COMMERCIALLY APPROPRIATE MANNER.

 

9.2.2       RECOVERY.  ANY AMOUNTS RECOVERED BY ATLANTIC IN CONNECTION WITH OR
AS A RESULT OF ANY ACTION CONTEMPLATED BY SECTION 9.2.1(A), WHETHER BY
SETTLEMENT OR JUDGMENT, WILL BE USED TO REIMBURSE THE PARTIES FOR THEIR
REASONABLE COSTS AND EXPENSES IN MAKING SUCH RECOVERY (WHICH AMOUNTS WILL BE
ALLOCATED PRO RATA IF INSUFFICIENT TO COVER THE TOTALITY OF SUCH EXPENSES), WITH
ANY REMAINDER IN EXCESS OF THE REASONABLE COSTS AND EXPENSES IN MAKING SUCH
RECOVERY WILL BE TREATED AS NET SALES OF AN ALICAFORSEN PRODUCT AND ROYALTIES
WILL BE DUE IN RESPECT OF SUCH NET SALES PURSUANT TO THIS AGREEMENT. ISIS WILL
RETAIN ALL AMOUNTS IT RECOVERS ENFORCING THE ALICAFORSEN PATENTS AND THE ICAM-1
SPECIFIC PATENTS.

 

ARTICLE 10 -
TERM AND TERMINATION

 

SECTION 10.1         TERM.  THE TERM OF THIS AGREEMENT (THE “TERM”) COMMENCES
UPON THE RESTATEMENT DATE AND, UNLESS EARLIER TERMINATED IN ACCORDANCE WITH THE
PROVISIONS OF THIS ARTICLE 10, WILL CONTINUE UNTIL THE EXPIRATION OF ALL
OBLIGATIONS TO PAY ROYALTIES ON ALL ALICAFORSEN PRODUCTS TO ISIS.

 

SECTION 10.2         RIGHTS IN BANKRUPTCY OR INSOLVENCY  IF EITHER PARTY BECOMES
INSOLVENT, FILES A PETITION IN BANKRUPTCY, HAS SUCH A PETITION FILED AGAINST IT,
DETERMINES TO FILE A PETITION IN BANKRUPTCY, OR RECEIVES NOTICE OF A THIRD
PARTY’S INTENTION TO FILE AN INVOLUNTARY PETITION IN BANKRUPTCY, SUCH PARTY
IMMEDIATELY SHALL NOTIFY THE OTHER PARTY IN WRITING.  IN ADDITION TO ANY OTHER
REMEDIES AVAILABLE AT LAW OR IN EQUITY, THE OTHER PARTY (I.E., THE NON-BANKRUPT
PARTY) MAY IMMEDIATELY TERMINATE THIS AGREEMENT, IN WHOLE OR IN PART AS THE
TERMINATING PARTY MAY

 

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DETERMINE, UPON LEARNING OF ANY OF THE FOREGOING EVENTS; PROVIDED, HOWEVER, THAT
THE FINANCIAL TERMS SET FORTH IN ARTICLE 6 ABOVE WILL REMAIN IN TACT AND WILL
SURVIVE ANY SUCH TERMINATION.  THE TERMINATING PARTY SHALL PROVIDE TO THE OTHER
PARTY A WRITTEN NOTICE REGARDING THE EXTENT OF TERMINATION. IF A PARTY SEEKS
(THE “FILING PARTY”) TO BE OR IS INVOLUNTARILY PLACED UNDER THE PROTECTION OF
THE “BANKRUPTCY CODE” (I.E., TITLE 11, U.S. CODE) OR ITS EQUIVALENT OUTSIDE THE
USA, AND THE TRUSTEE IN BANKRUPTCY, OR THE FILING PARTY AS A
DEBTOR-IN-POSSESSION, REJECTS THIS AGREEMENT, THEN THE OTHER PARTY (THE
“NON-FILING PARTY”) HEREBY ELECTS, UNDER SECTION 365(N) OF THE BANKRUPTCY CODE,
TO RETAIN ALL LICENSES OF RIGHTS TO “INTELLECTUAL PROPERTY” (AS DEFINED UNDER
SUCH BANKRUPTCY CODE) GRANTED TO IT UNDER THIS AGREEMENT, TO THE EXTENT
PERMITTED BY LAW.  AS OF THE COMMENCEMENT OF A BANKRUPTCY PROCEEDING BY OR
AGAINST THE FILING PARTY, THE NON-FILING PARTY IS ENTITLED TO A COMPLETE
DUPLICATE OF ALL EMBODIMENTS OF “INTELLECTUAL PROPERTY” LICENSED TO IT
HEREUNDER.  TO THE EXTENT SUCH EMBODIMENTS ARE NOT ALREADY IN THE NON-FILING
PARTY’S POSSESSION AS OF THE COMMENCEMENT OF A BANKRUPTCY, THE FILING PARTY (OR
THE TRUSTEE IN BANKRUPTCY) SHALL DELIVER SUCH EMBODIMENTS TO THE NON-FILING
PARTY (I) UPON ANY SUCH COMMENCEMENT OF A BANKRUPTCY PROCEEDING, UNLESS THE
FILING PARTY ELECTS TO CONTINUE TO PERFORM ALL OF ITS OBLIGATIONS UNDER THIS
AGREEMENT, OR (II) IF NOT DELIVERED UNDER (I), THEN UPON A REJECTION OF THIS
AGREEMENT (OR THE EQUIVALENT) BY OR ON BEHALF OF THE FILING PARTY.

 

SECTION 10.3         MATERIAL BREACH.  FAILURE BY A PARTY TO COMPLY WITH ANY OF
ITS MATERIAL OBLIGATIONS CONTAINED HEREIN WILL ENTITLE THE PARTY NOT IN DEFAULT
TO GIVE TO THE DEFAULTING PARTY NOTICE SPECIFYING THE NATURE OF THE MATERIAL
BREACH, REQUIRING THE DEFAULTING PARTY TO MAKE GOOD OR OTHERWISE CURE SUCH
DEFAULT, AND STATING ITS INTENTION TO INVOKE THE PROVISIONS OF SECTION 14.4 IF
SUCH DEFAULT IS NOT CURED.  IF SUCH DEFAULT IS NOT CURED WITHIN 90 DAYS AFTER
THE RECEIPT OF SUCH NOTICE (OR, IF SUCH DEFAULT CANNOT BE CURED WITHIN SUCH
90-DAY PERIOD, IF THE PARTY IN DEFAULT DOES NOT COMMENCE ACTIONS TO CURE SUCH
DEFAULT WITHIN SUCH PERIOD AND THEREAFTER DILIGENTLY CONTINUE SUCH ACTIONS), THE
PARTY NOT IN DEFAULT WILL BE ENTITLED, WITHOUT PREJUDICE TO ANY OF ITS OTHER
RIGHTS CONFERRED ON IT BY THIS AGREEMENT, TO INVOKE THE PROVISIONS OF
SECTION 14.4; PROVIDED, HOWEVER, THAT IN THE EVENT OF A GOOD FAITH DISPUTE WITH
RESPECT TO THE EXISTENCE OF A MATERIAL BREACH, THE 90-DAY CURE PERIOD WILL BE
STAYED UNTIL SUCH TIME AS THE DISPUTE IS RESOLVED PURSUANT TO SECTION 14.4
HEREOF.

 

SECTION 10.4         CONSEQUENCES OF EXPIRATION OR TERMINATION.

 

10.4.1     LICENSES.  UPON EXPIRATION OF THE TERM OR UPON TERMINATION OF THIS
AGREEMENT IN ITS ENTIRETY BY EITHER PARTY PURSUANT TO SECTION 10.3, OR BY ISIS
PURSUANT TO SECTION 10.2 AND UPON PAYMENT OF ALL AMOUNTS OWED PURSUANT TO THIS
AGREEMENT, THE LICENSES GRANTED BY ISIS TO ATLANTIC HEREUNDER WILL TERMINATE.

 

10.4.2     RETURN OF INFORMATION AND MATERIALS.  UPON EARLY TERMINATION OF THIS
AGREEMENT IN ITS ENTIRETY BY EITHER PARTY PURSUANT TO SECTION 10.3, OR BY ISIS
PURSUANT TO SECTION 10.2, ATLANTIC WILL RETURN ALL DATA, FILES, RECORDS AND
OTHER MATERIALS IN ITS POSSESSION OR CONTROL RELATING TO OR CONTAINING OR
COMPRISING ISIS’ CONFIDENTIAL INFORMATION AND, IN EACH CASE (EXCEPT ONE COPY OF
WHICH MAY BE RETAINED FOR ARCHIVAL PURPOSES).

 

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SECTION 10.5         ACCRUED RIGHTS; SURVIVING OBLIGATIONS.

 

10.5.1     ACCRUED RIGHTS.  TERMINATION OR EXPIRATION OF THIS AGREEMENT FOR ANY
REASON WILL BE WITHOUT PREJUDICE TO ANY RIGHTS OR FINANCIAL COMPENSATION THAT
WILL HAVE ACCRUED TO THE BENEFIT OF A PARTY PRIOR TO SUCH TERMINATION OR
EXPIRATION.  SUCH TERMINATION OR EXPIRATION WILL NOT RELIEVE A PARTY FROM
OBLIGATIONS THAT ARE EXPRESSLY INDICATED TO SURVIVE THE TERMINATION OR
EXPIRATION OF THIS AGREEMENT.

 

10.5.2     SURVIVAL.  ARTICLES 7, 8, 10, 11, 12, AND 14, SECTION 1.2, AND
SECTION 6.8 OF THIS AGREEMENT WILL SURVIVE EXPIRATION OR TERMINATION OF THIS
AGREEMENT FOR ANY REASON.

 

ARTICLE 11

DISCONTINUED DEVELOPMENT BY ATLANTIC

 

SECTION 11.1  DISCONTINUANCES. IN THE EVENT OF A DISCONTINUANCE, ISIS WILL HAVE
A REVERSION RIGHT AS FURTHER DESCRIBED IN SECTION 11.2.

 

SECTION 11.2  REVERSION RIGHTS. FOLLOWING THE OCCURRENCE OF A DISCONTINUANCE,
ISIS MAY ELECT TO CONTINUE TO DEVELOP ANY ALICAFORSEN PRODUCT THAT IS THE
SUBJECT OF SUCH DISCONTINUANCE BY NOTICE IN WRITING TO ATLANTIC (AN “ELECTION
NOTICE”) THAT ISIS IS EXERCISING ITS RIGHTS UNDER THIS SECTION 11.2, IN WHICH
CASE THIS AGREEMENT WILL TERMINATE (SUBJECT TO THE SURVIVAL PROVISIONS SET FORTH
IN SECTION 10.5.2). UPON RECEIPT OF AN ELECTION NOTICE, ATLANTIC WILL (I) GRANT
TO ISIS A SUBLICENSABLE, WORLDWIDE LICENSE OR SUBLICENSE, AS THE CASE MAY BE, TO
ALL PATENTS CONTROLLED BY ATLANTIC SOLELY AS THEY ARE NECESSARY TO MAKE, HAVE
MADE, USE, SELL, OFFER FOR SALE, HAVE SOLD AND IMPORT THE ALICAFORSEN PRODUCT
AND (II) TRANSFER TO ISIS, FOR ISIS’ UNLIMITED USE, ANY DATA, RESULTS,
REGULATORY INFORMATION AND FILES IN THE POSSESSION OF ATLANTIC AS OF THE DATE OF
THE ELECTION NOTICE THAT RELATE TO THE ALICAFORSEN PRODUCT, SUBJECT TO THE
NEGOTIATION IN GOOD FAITH OF A REASONABLE ROYALTY PAYABLE TO ATLANTIC THAT
REPRESENTS THE VALUE OF THE ITEMS TRANSFERRED TO ISIS.

 

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ARTICLE 12 -

INDEMNIFICATION AND INSURANCE

 

SECTION 12.1         INDEMNIFICATION OF ISIS.  ATLANTIC WILL INDEMNIFY ISIS AND
ITS AFFILIATES, AND EACH OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND
AGENTS, AND DEFEND AND HOLD EACH OF THEM HARMLESS, FROM AND AGAINST ANY AND ALL
LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE
ATTORNEYS’ FEES AND EXPENSES) TO THE EXTENT ARISING FROM OR OCCURRING AS A
RESULT OF ANY AND ALL LIABILITY SUITS, INVESTIGATIONS, CLAIMS OR DEMANDS BY A
THIRD PARTY (COLLECTIVELY, “LOSSES”) ARISING FROM OR OCCURRING AS A RESULT OF OR
IN CONNECTION WITH (A) THE BREACH OF ANY OF ATLANTIC’S REPRESENTATIONS,
WARRANTIES, OR COVENANTS CONTAINED IN ARTICLE 13 BELOW, OR (B) WHETHER OR NOT
NEGLIGENCE IS FOUND OR ALLEGED, THE MANUFACTURE (EXCEPT TO THE EXTENT
ATTRIBUTABLE TO ISIS’ NEGLIGENCE), USE, HANDLING, STORAGE, SALE OR OTHER
DISPOSITION OF AN ALICAFORSEN PRODUCT OR OTHER COMPOUND THAT IS DEVELOPED OR
SOLD BY ATLANTIC, ITS AFFILIATES, AGENTS OR SUBLICENSEES, EXCEPT TO THE EXTENT
ISIS HAS AN OBLIGATION TO INDEMNIFY ATLANTIC UNDER SECTION 12.2 BELOW.

 

SECTION 12.2         INDEMNIFICATION OF ATLANTIC.  ISIS WILL INDEMNIFY ATLANTIC,
ITS AFFILIATES, AND ITS SUBLICENSEES, AND EACH OF THEIR RESPECTIVE DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS, AND DEFEND AND HOLD EACH OF THEM HARMLESS, FROM
AND AGAINST ANY AND ALL LOSSES ARISING FROM OR OCCURRING AS A RESULT OF OR IN
CONNECTION WITH (A) THE BREACH OF ANY OF ISIS’ REPRESENTATIONS, WARRANTIES, OR
COVENANTS CONTAINED IN ARTICLE 13 BELOW, OR (B) WHETHER OR NOT NEGLIGENCE IS
FOUND OR ALLEGED, THE MANUFACTURE, USE, HANDLING, STORAGE, SALE OR OTHER
DISPOSITION OF A COMPOUND THAT IS DEVELOPED OR SOLD BY ISIS, ITS AFFILIATES,
AGENTS OR SUBLICENSEES, EXCEPT TO THE EXTENT ATLANTIC HAS AN OBLIGATION TO
INDEMNIFY ISIS UNDER SECTION 12.1 ABOVE.

 

SECTION 12.3         INSURANCE.  EACH PARTY WILL HAVE AND MAINTAIN SUCH TYPES
AND AMOUNTS OF LIABILITY INSURANCE AS IS REASONABLE AND CUSTOMARY IN THE
INDUSTRY GENERALLY FOR PARTIES SIMILARLY SITUATED, AND WILL UPON REQUEST PROVIDE
THE OTHER WITH A CERTIFICATE OF INSURANCE.  EACH PARTY WILL PROMPTLY NOTIFY THE
OTHER OF ANY MATERIAL CHANGE IN INSURANCE COVERAGE OR LAPSE IN COVERAGE IN THAT
REGARD.

 

SECTION 12.4         LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER IN
CONTRACT, TORT, NEGLIGENCE, BREACH OF STATUTORY DUTY OR OTHERWISE FOR ANY LOSS,
DAMAGE, COSTS OR EXPENSES OF ANY NATURE WHATSOEVER INCURRED OR SUFFERED BY THE
OTHER OR ITS AFFILIATES:

 

12.4.1     OF A DIRECT NATURE WHERE THE SAME IS A LOSS OF TURNOVER, PROFITS,
BUSINESS OR GOODWILL; OR

 

12.4.2     OF AN INDIRECT OR CONSEQUENTIAL OR PUNITIVE NATURE, INCLUDING ANY
INDIRECT OR CONSEQUENTIAL ECONOMIC LOSS OR OTHER INDIRECT OR CONSEQUENTIAL LOSS
OF TURNOVER, PROFITS, LOSS OF ENTERPRISE VALUE, BUSINESS OR GOODWILL OR
OTHERWISE.

 

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ARTICLE 13 -
REPRESENTATIONS AND WARRANTIES

 

SECTION 13.1         REPRESENTATIONS, WARRANTIES AND COVENANTS.  EACH PARTY
HEREBY REPRESENTS, WARRANTS AND COVENANTS TO THE OTHER PARTY AS OF THE
RESTATEMENT DATE AS FOLLOWS:

 

SECTION 13.2         CORPORATE AUTHORITY.  SUCH PARTY (A) HAS THE POWER AND
AUTHORITY AND THE LEGAL RIGHT TO ENTER INTO THIS AGREEMENT AND PERFORM ITS
OBLIGATIONS HEREUNDER, AND (B) HAS TAKEN ALL NECESSARY ACTION ON ITS PART
REQUIRED TO AUTHORIZE THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE
PERFORMANCE OF ITS OBLIGATIONS HEREUNDER.  THIS AGREEMENT HAS BEEN DULY EXECUTED
AND DELIVERED ON BEHALF OF SUCH PARTY AND CONSTITUTES A LEGAL, VALID AND BINDING
OBLIGATION OF SUCH PARTY AND IS ENFORCEABLE AGAINST IT IN ACCORDANCE WITH ITS
TERMS SUBJECT TO THE EFFECTS OF BANKRUPTCY, INSOLVENCY OR OTHER LAWS OF GENERAL
APPLICATION AFFECTING THE ENFORCEMENT OF CREDITOR RIGHTS AND JUDICIAL PRINCIPLES
AFFECTING THE AVAILABILITY OF SPECIFIC PERFORMANCE AND GENERAL PRINCIPLES OF
EQUITY, WHETHER ENFORCEABILITY IS CONSIDERED A PROCEEDING AT LAW OR EQUITY.

 

SECTION 13.3         CONSENTS, APPROVALS, ETC.  ALL NECESSARY CONSENTS,
APPROVALS AND AUTHORIZATIONS OF ALL REGULATORY AUTHORITIES AND OTHER PARTIES
REQUIRED TO BE OBTAINED BY SUCH PARTY IN CONNECTION WITH THE EXECUTION AND
DELIVERY OF THIS AGREEMENT AND THE PERFORMANCE OF ITS OBLIGATIONS HEREUNDER HAVE
BEEN OBTAINED.

 

SECTION 13.4         CONFLICTS.  THE EXECUTION AND DELIVERY OF THIS AGREEMENT
AND THE PERFORMANCE OF SUCH PARTY’S OBLIGATIONS HEREUNDER (A) DO NOT CONFLICT
WITH OR VIOLATE ANY REQUIREMENT OF APPLICABLE LAW OR ANY PROVISION OF THE
ARTICLES OF INCORPORATION, BYLAWS OR ANY SIMILAR INSTRUMENT OF SUCH PARTY, AS
APPLICABLE, IN ANY MATERIAL WAY, AND (B) DO NOT CONFLICT WITH, VIOLATE, OR
BREACH OR CONSTITUTE A DEFAULT OR REQUIRE ANY CONSENT NOT ALREADY OBTAINED
UNDER, ANY CONTRACTUAL OBLIGATION OR COURT OR ADMINISTRATIVE ORDER BY WHICH SUCH
PARTY IS BOUND.

 

SECTION 13.5         INTELLECTUAL PROPERTY.  TO EACH PARTY’S KNOWLEDGE, AS OF
THE EFFECTIVE DATE, NO ADDITIONAL THIRD PARTY LICENSES ARE REQUIRED TO DEVELOP,
USE AND SELL THE ENEMA FORMULATION OF ALICAFORSEN.

 

SECTION 13.6         ISIS REPRESENTATIONS, WARRANTIES, AND COVENANTS. ISIS
HEREBY REPRESENTS, WARRANTS AND COVENANTS TO ATLANTIC AS OF THE EFFECTIVE DATE
AS FOLLOWS:

 

13.6.1     IP OWNERSHIP.  ISIS HAS THE SUFFICIENT LEGAL AND/OR BENEFICIAL TITLE
AND OWNERSHIP OF THE ALICAFORSEN PATENTS AND THE ICAM-1 SPECIFIC PATENTS AS IS
NECESSARY TO FULFILL ITS OBLIGATIONS UNDER THIS AGREEMENT AND TO GRANT THE
LICENSES (OR SUBLICENSES AS THE CASE MAY BE) TO ATLANTIC PURSUANT TO THIS
AGREEMENT; ISIS HAS NOT PREVIOUSLY ENTERED INTO ANY AGREEMENT, WHETHER WRITTEN
OR ORAL, WITH RESPECT TO, OR OTHERWISE ASSIGNED, LICENSED, TRANSFERRED, CONVEYED
OR OTHERWISE ENCUMBERED ITS RIGHT, TITLE OR INTEREST IN OR TO THE ISIS DATA
(“ISIS BACKGROUND KNOW HOW”) OR THE ALICAFORSEN PATENTS AND ICAM-1 SPECIFIC
PATENTS LICENSED HEREUNDER (INCLUDING BY GRANTING ANY COVENANT NOT TO SUE WITH
RESPECT THERETO) (THE ISIS BACKGROUND KNOW HOW AND SUCH ALICAFORSEN PATENTS AND
ICAM-1 SPECIFIC PATENTS LICENSED HEREUNDER TOGETHER BEING THE “ISIS BACKGROUND
IP”).   TO THE BEST OF ISIS’ KNOWLEDGE, THE CONCEPTION, DEVELOPMENT AND
REDUCTION TO PRACTICE OF THE ISIS BACKGROUND IP EXISTING AS OF THE EFFECTIVE
DATE HAVE NOT CONSTITUTED OR INVOLVED THE MISAPPROPRIATION OF TRADE SECRETS OR
OTHER RIGHTS OR PROPERTY OF ANY THIRD PARTY; AND

 

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13.6.2     PATENT MAINTENANCE. TRUE, COMPLETE AND CORRECT COPIES OF THE COMPLETE
FILE WRAPPER AND OTHER MATERIAL CORRESPONDENCE WITH ANY PATENT OFFICE RELATING
TO THE PROSECUTION, VALIDITY AND ENFORCEABILITY OF THE PATENTS WITHIN THE
ALICAFORSEN PATENTS AND THE ICAM-1 SPECIFIC PATENTS EXISTING AT THE EFFECTIVE
DATE HAVE BEEN PROVIDED TO OR MADE AVAILABLE TO ATLANTIC PRIOR TO THE EFFECTIVE
DATE AND, TO THE BEST OF ISIS’ KNOWLEDGE, THERE IS NO MATERIAL REASON WHY ANY OF
SUCH PATENTS ARE INVALID.  IN RESPECT OF THE PENDING PATENT APPLICATIONS
INCLUDED WITHIN SUCH PATENTS, ISIS HAS PRESENTED ALL RELEVANT PRIOR ART OF WHICH
IT AND THE INVENTORS ARE AWARE TO THE RELEVANT PATENT EXAMINERS AT THE RELEVANT
PATENT OFFICES; AND

 

13.6.3     PATENT PROSECUTION.  THE ALICAFORSEN PATENTS AND ICAM-1 SPECIFIC
PATENTS LICENSED HEREUNDER THAT ARE APPLICATIONS AT THE EFFECTIVE DATE ARE BEING
DILIGENTLY PROCURED FROM THE RESPECTIVE PATENT OFFICES AND THE PATENTS WITHIN
SUCH PATENTS LICENSED HEREUNDER THAT ARE GRANTED AT THE EFFECTIVE DATE HAVE BEEN
MAINTAINED PROPERLY AND CORRECTLY AND ALL APPLICABLE FEES HAVE BEEN PAID ON OR
BEFORE THE DUE DATE FOR PAYMENT; AND

 

13.6.4     THIRD PARTY ACTIONS.  TO THE BEST OF ISIS’ KNOWLEDGE, NO ACTIONS,
SUITS, CLAIMS, DISPUTES, OR PROCEEDINGS CONCERNING THE ALICAFORSEN PATENTS OR
THE ICAM-1 SPECIFIC PATENTS LICENSED HEREUNDER OR THE ALICAFORSEN PRODUCT ARE
CURRENTLY PENDING OR ARE THREATENED IN WRITING, THAT IF DETERMINED ADVERSELY TO
ISIS WOULD HAVE A MATERIAL ADVERSE EFFECT ON THE ALICAFORSEN PRODUCT OR WOULD
IMPAIR ISIS’ ABILITY TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT.

 

13.6.5     ALICAFORSEN.  AS OF THE EFFECTIVE DATE, ISIS DOES NOT CONTROL ANY
PATENTS OTHER THAN THE ALICAFORSEN PATENTS AND THE ICAM-1 SPECIFIC PATENTS THAT
WOULD BE NECESSARY TO DEVELOP OR COMMERCIALIZE ALICAFORSEN PRODUCTS OR TO
MANUFACTURE ALICAFORSEN PRODUCT OR ALICAFORSEN API OTHER THAN THE PATENTS WITHIN
EXCLUDED ISIS IP AND, TO THE BEST OF ISIS’ KNOWLEDGE, ISIS DOES NOT CONTROL ANY
KNOW-HOW THAT WOULD BE NECESSARY TO DEVELOP OR COMMERCIALIZE ALICAFORSEN
PRODUCTS OTHER THAN THE ISIS DATA AND KNOW-HOW TRANSFERRED TO ATLANTIC UNDER
SECTION 2.2.1.

 

SECTION 13.7         ENABLED CMOS. ISIS HEREBY REPRESENTS AND WARRANTS, AS OF
THE RESTATEMENT DATE, THAT EACH OF AVECIA BIOTECHNOLOGY, INC., AGILENT
TECHNOLOGIES, INC., AND GIRINDUS AMERICA INC. IS AN ENABLED CMO.

 

SECTION 13.8         ATLANTIC REPRESENTATIONS, WARRANTIES, AND COVENANTS. 
ATLANTIC HEREBY REPRESENTS, WARRANTS AND COVENANTS TO ISIS THAT:

 

13.8.1     CAPABILITIES.   AS OF THE EFFECTIVE DATE, ATLANTIC HAS THE REQUISITE
PERSONNEL, EXPERTISE, EXPERIENCE AND SKILL TO PERFORM ITS OBLIGATIONS UNDER THIS
AGREEMENT; ATLANTIC’S SALES REPRESENTATIVES WILL PERFORM IN A PROFESSIONAL,
TIMELY, COMPETENT AND EFFICIENT MANNER; AND ATLANTIC, ITS AFFILIATES, AND ITS
SUBLICENSEES WILL AT ALL TIMES COMPLY WITH ALL APPLICABLE LAWS.

 

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13.8.2     SUBLICENSES.         AS OF THE RESTATEMENT DATE, ATLANTIC HAS NOT
GRANTED ANY SUBLICENSES (INCLUDING SUBLICENSES) UNDER THE ORIGINAL AGREEMENT,
EXCEPT THAT CERTAIN DEVELOPMENT AND LICENSE AGREEMENT WITH SIGMA PHARMACEUTICALS
(FORMERLY ORPHAN AUSTRALIA PTY. LTD.) EXECUTED ON OR ABOUT DECEMBER 6, 2007,
WHICH IS IN FULL COMPLIANCE WITH, AND REMAINS SUBJECT TO, THE TERMS AND
CONDITIONS OF THIS AGREEMENT.

 

13.8.3     PAYMENT OBLIGATIONS.  AS OF THE RESTATEMENT DATE, NO PAYMENT
OBLIGATIONS HAVE ACCRUED UNDER THE ORIGINAL AGREEMENT THAT HAVE NOT BEEN PAID BY
ATLANTIC TO ISIS.

 

SECTION 13.9         DISCLAIMER OF WARRANTY.  EXCEPT FOR THE EXPRESS WARRANTIES
SET FORTH IN THIS ARTICLE 13, ATLANTIC AND ISIS MAKE NO REPRESENTATIONS AND
GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW,
BY STATUTE OR OTHERWISE, AND ATLANTIC AND ISIS EACH SPECIFICALLY DISCLAIM ANY
OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY
WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE
OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

 

ARTICLE 14 -
MISCELLANEOUS

 

SECTION 14.1         ASSIGNMENT.  WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER
PARTY HERETO, NEITHER PARTY WILL SELL, TRANSFER, ASSIGN, DELEGATE, PLEDGE OR
OTHERWISE DISPOSE OF, WHETHER VOLUNTARILY, INVOLUNTARILY, BY OPERATION OF LAW OR
OTHERWISE, THIS AGREEMENT OR ANY OF ITS RIGHTS OR DUTIES HEREUNDER; PROVIDED,
HOWEVER, THAT (I) EITHER PARTY HERETO MAY ASSIGN OR TRANSFER THIS AGREEMENT OR
ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER WITHOUT THE CONSENT OF THE OTHER
PARTY TO (A) ANY OF ITS AFFILIATES, OR (B) ANY THIRD PARTY WITH WHICH IT HAS
MERGED OR CONSOLIDATED, OR TO WHICH IT HAS TRANSFERRED ALL OR SUBSTANTIALLY ALL
OF ITS ASSETS TO WHICH THIS AGREEMENT RELATES PROVIDED ALWAYS IN THE CASE WHERE
ISIS IS THE ASSIGNING PARTY IT ALSO TRANSFERS TITLE TO THE ALICAFORSEN PATENTS
OR THE ICAM-1 SPECIFIC PATENTS TO SUCH THIRD PARTY, AND IF IN ANY SUCH EVENT THE
THIRD PARTY ASSIGNEE OR SURVIVING ENTITY ASSUMES IN WRITING ALL OF THE ASSIGNING
PARTY’S OBLIGATIONS UNDER THIS AGREEMENT, (II) ATLANTIC MAY ASSIGN OR TRANSFER
THIS AGREEMENT, WITHOUT ISIS’ CONSENT, TO ATLANTIC HEALTHCARE, OR (III) ISIS MAY
ASSIGN OR TRANSFER ITS RIGHTS UNDER ARTICLE 6.4 (BUT NO LIABILITIES) TO A THIRD
PARTY IN CONNECTION WITH A ROYALTY FACTORING TRANSACTION.  ANY PURPORTED
ASSIGNMENT OR TRANSFER IN VIOLATION OF THIS SECTION 14.1 WILL BE VOID AB INITIO
AND OF NO FORCE OR EFFECT.

 

SECTION 14.2         SEVERABILITY.  IF ANY PROVISION OF THIS AGREEMENT IS HELD
TO BE ILLEGAL, INVALID OR UNENFORCEABLE BY A COURT OF COMPETENT JURISDICTION,
SUCH ADJUDICATION WILL NOT AFFECT OR IMPAIR, IN WHOLE OR IN PART, THE VALIDITY,
ENFORCEABILITY, OR LEGALITY OF ANY REMAINING PORTIONS OF THIS AGREEMENT.  ALL
REMAINING PORTIONS WILL REMAIN IN FULL FORCE AND EFFECT AS IF THE ORIGINAL
AGREEMENT HAD BEEN EXECUTED WITHOUT THE INVALIDATED, UNENFORCEABLE OR ILLEGAL
PART.

 

SECTION 14.3         GOVERNING LAW.  THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK, USA WITHOUT REFERENCE TO ANY
RULES OF CONFLICTS OF LAWS.

 

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SECTION 14.4         DISPUTE RESOLUTION.

 

14.4.1     GENERAL.  ANY DISPUTE, CONTROVERSY OR CLAIM ARISING FROM OR RELATED
TO THIS AGREEMENT OR THE BREACH THEREOF WILL FIRST BE REFERRED TO THE ATTENTION
OF THE CHIEF EXECUTIVE OFFICER OF ATLANTIC AND THE CHIEF OPERATING OFFICER OF
ISIS (THE “EXECUTIVE OFFICERS”) BY NOTICE IN WRITING IN ACCORDANCE WITH THE
TERMS OF THIS AGREEMENT.  THE EXECUTIVE OFFICERS (OR THEIR RESPECTIVE DESIGNEES)
WILL MEET AS SOON AS REASONABLY POSSIBLE THEREAFTER, AND USE THEIR GOOD FAITH
EFFORTS TO MUTUALLY AGREE UPON THE RESOLUTION OF THE DISPUTE, CONTROVERSY OR
CLAIM.  IF ANY DISPUTE, CONTROVERSY OR CLAIM IS NOT RESOLVED BY THE DESIGNATED
OFFICERS OF THE PARTIES (OR THEIR DESIGNEES) WITHIN 30 DAYS AFTER SUCH DISPUTE
IS REFERRED TO THEM, THEN THE PARTIES AGREE THAT SUCH DISPUTE WILL BE REFERRED
TO MEDIATION, AND IF THE DISPUTE REMAINS UNRESOLVED AFTER MEDIATION, EITHER
PARTY WILL HAVE THE RIGHT TO ARBITRATE SUCH DISPUTE IN ACCORDANCE WITH
SECTION 14.4.3; PROVIDED, HOWEVER, THAT ANY DISPUTE RELATING TO THE CONSTRUCTION
OR VALIDITY OF ANY PATENT WILL NOT BE SUBJECT TO ARBITRATION.

 

14.4.2     MEDIATION.  IF THE PARTIES PURSUE MEDIATION PROCEEDINGS THE PARTIES
WILL ATTEMPT TO RESOLVE SUCH DISPUTE IN ACCORDANCE WITH THE COMMERCIAL MEDIATION
PROCEDURES OF THE AMERICAN ARBITRATION ASSOCIATION (“AAA”), BEFORE RESORTING TO
ARBITRATION IN ACCORDANCE WITH SECTION 14.4.3 BELOW.  THE MEDIATION WILL BE
CONDUCTED BY A SINGLE MEDIATOR EXPERIENCED IN THE BUSINESS AND TECHNOLOGY THAT
IS THE SUBJECT OF THIS AGREEMENT.  THE PLACE OF MEDIATION WILL BE IN NEW YORK,
NY, USA.  EITHER PARTY MAY APPLY TO THE MEDIATOR OR TO A COURT FOR INTERIM
INJUNCTIVE RELIEF UNTIL THE MEDIATION DECISION IS RENDERED OR THE DISPUTE,
CONTROVERSY OR CLAIM IS OTHERWISE RESOLVED.

 

14.4.3     ARBITRATION. IF THE PARTIES DO NOT FULLY SETTLE ANY DISPUTE,
CONTROVERSY OR CLAIM PURSUANT TO SECTION 14.4.1 OR 14.4.2 AND A PARTY WISHES TO
PURSUE THE MATTER FURTHER, EACH SUCH DISPUTE, CONTROVERSY OR CLAIM WILL BE
FINALLY RESOLVED BY BINDING ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES OF THE AAA, AND JUDGMENT ON THE ARBITRATION AWARD MAY BE
ENTERED IN ANY COURT HAVING JURISDICTION THEREOF. THE ARBITRATION WILL BE
CONDUCTED BY A SINGLE ARBITRATOR AGREEABLE BY THE PARTIES, IF THE PARTIES CANNOT
AGREE UPON AN ARBITRATOR, THE ARBITRATOR WILL BE APPOINTED BY THE AAA. NO
INDIVIDUAL WILL BE APPOINTED TO ARBITRATE A DISPUTE PURSUANT TO THIS AGREEMENT
UNLESS HE OR SHE AGREES IN WRITING TO BE BOUND BY THE PROVISIONS OF THIS
SECTION 14.4.  THE PLACE OF ARBITRATION WILL BE NEW YORK, NY, USA. EITHER PARTY
MAY APPLY TO THE ARBITRATOR FOR INTERIM INJUNCTIVE RELIEF UNTIL THE ARBITRATION
AWARD IS RENDERED OR THE CONTROVERSY IS OTHERWISE RESOLVED.

 

14.4.4     DISPUTES REGARDING MATERIAL BREACH.  IF THE PARTIES ARE IN DISPUTE AS
TO WHETHER ONE PARTY IS IN MATERIAL BREACH OF THIS AGREEMENT, THEN THE MEDIATOR
OR ARBITRATORS WILL FIRST DETERMINE IF MATERIAL BREACH HAS IN FACT OCCURRED, AND
IF SO, WILL GRANT THE DEFAULTING PARTY THE CURE PERIOD PROVIDED PURSUANT TO
SECTION 10.3.  IF THE MATERIAL BREACH IS NOT CURED WITHIN THE TIME PERIOD
PROVIDED PURSUANT TO SECTION 10.3, THE MEDIATION OR ARBITRATION WILL CONTINUE
AND THE MEDIATOR OR ARBITRATORS WILL, AS PART OF THE SAME MEDIATION OR
ARBITRATION, AWARD ACTUAL DIRECT DAMAGES TO THE NON-DEFAULTING PARTY.

 

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14.4.5     COSTS AND EXPENSES.  EXCEPT AS EXPRESSLY PROVIDED HEREIN, EACH PARTY
WILL BEAR ITS OWN COSTS AND EXPENSES AND ATTORNEYS’ FEES AND AN EQUAL SHARE OF
THE MEDIATOR’S AND/OR ARBITRATORS’ AND ANY ADMINISTRATIVE FEES OF MEDIATION AND
ARBITRATION. NOTWITHSTANDING THE FOREGOING, IN THE CASE OF ARBITRATION, IF A
PARTY HAS BEEN FOUND TO BE IN MATERIAL BREACH OF THIS AGREEMENT, THE DEFAULTING
PARTY WILL BE RESPONSIBLE FOR BOTH PARTIES’ THIRD PARTY COSTS AND EXPENSES
(INCLUDING THE COSTS OF THE ARBITRATORS AND ANY ADMINISTRATIVE FEES OF
ARBITRATION) AND THE REASONABLE ATTORNEYS’ FEES OF THE NON-DEFAULTING PARTY;
PROVIDED, HOWEVER, THAT THE TOTAL AMOUNT OF SUCH FEES AND EXPENSES THE
DEFAULTING PARTY IS REQUIRED TO REIMBURSE THE NON-DEFAULTING PARTY CANNOT EXCEED
THE TOTAL AMOUNT OF MONETARY DAMAGES AWARDED TO THE NON-DEFAULTING PARTY AS A
RESULT OF SUCH MATERIAL BREACH.

 

14.4.6     PROCEDURE.   EXCEPT TO THE EXTENT NECESSARY TO CONFIRM AN AWARD OR AS
MAY BE REQUIRED BY LAW, NEITHER A PARTY, A MEDIATOR, NOR AN ARBITRATOR MAY
DISCLOSE THE EXISTENCE, CONTENT, OR RESULTS OF A MEDIATION OR AN ARBITRATION
WITHOUT THE PRIOR WRITTEN CONSENT OF BOTH PARTIES. IN NO EVENT WILL ARBITRATION
BE INITIATED AFTER THE DATE WHEN COMMENCEMENT OF A LEGAL OR EQUITABLE PROCEEDING
BASED ON THE DISPUTE, CONTROVERSY OR CLAIM WOULD BE BARRED BY THE APPLICABLE NEW
YORK STATUTE OF LIMITATIONS.

 

14.4.7     SPEEDY RESOLUTION.   THE PARTIES INTEND, AND WILL TAKE ALL REASONABLE
ACTION AS IS NECESSARY OR DESIRABLE TO ENSURE, THAT THERE BE A SPEEDY RESOLUTION
TO ANY DISPUTE WHICH BECOMES THE SUBJECT OF MEDIATION OR ARBITRATION, AND THE
MEDIATOR AND ARBITRATORS WILL CONDUCT THE MEDIATION OR ARBITRATION SO AS TO
RESOLVE THE DISPUTE AS EXPEDITIOUSLY AS POSSIBLE.

 

14.4.8     AWARDS. IN ANY MEDIATION, A DECISION OR OPINION ISSUED BY THE
MEDIATOR REGARDING THE DISPUTE BETWEEN THE PARTIES IS NON-BINDING. THE
ARBITRATORS MAY AWARD MONETARY DAMAGES AND INJUNCTIVE RELIEF, BUT MAY NOT ORDER
THE GRANTING OR TERMINATION OF LICENSES OR ASSIGN RIGHTS TO AN ALICAFORSEN
PRODUCT TO EITHER OF THE PARTIES.  MONETARY DAMAGES WILL BE IN THE FORM OF
OFF-SET ROYALTIES OR OTHERWISE, TO ACCOUNT FOR THE DAMAGES TO THE NON-DEFAULTING
PARTY FROM THE BREACH, AND TO ACCOUNT FOR THE DEFAULTING PARTY’S CONTRIBUTION TO
THE ALICAFORSEN PRODUCT IN VIEW OF THE BREACH.  ALL AWARDS WILL BE IN WRITING
AND WILL STATE REASONS.  EXECUTED COPIES OF ALL AWARDS WILL BE DELIVERED BY THE
ARBITRATORS TO THE PARTIES AS SOON AS IS REASONABLY POSSIBLE.  ALL AWARDS OF THE
ARBITRATORS WILL BE FINAL AND BINDING ON THE PARTIES, AND THERE WILL BE NO
APPEAL OF ANY SUCH AWARD WHATSOEVER.  THE PARTIES UNDERTAKE TO SATISFY ANY AWARD
WITHOUT DELAY.

 

SECTION 14.5         NOTICES.  ALL NOTICES OR OTHER COMMUNICATIONS THAT ARE
REQUIRED OR PERMITTED HEREUNDER WILL BE IN WRITING AND DELIVERED PERSONALLY WITH
ACKNOWLEDGEMENT OF RECEIPT, SENT BY FACSIMILE (AND PROMPTLY CONFIRMED BY
PERSONAL DELIVERY, REGISTERED OR CERTIFIED MAIL OR OVERNIGHT COURIER AS PROVIDED
HEREIN), SENT BY NATIONALLY-RECOGNIZED OVERNIGHT COURIER OR SENT BY REGISTERED
OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED, ADDRESSED AS
FOLLOWS:

 

If to Atlantic, to:

Atlantic Pharmaceuticals Limited

MoFo Notices Limited

7th Floor

CityPoint

One Ropemaker Street

London EC2Y 9AW

Attention:   Chief Executive Officer

Facsimile:  +44 (0) 20 7496 8500

 

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If to Isis, to:

Isis Pharmaceuticals, Inc.

1896 Rutherford Road

Carlsbad, California 92008

Attention: Chief Operating Officer and CFO

Facsimile: +1 (760) 603-4650

 

with a copy to:

Attention:  General Counsel

Facsimile: +1 (760) 268-4922

 

or to such other address as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith.  Any such
communication will be deemed to have been given (i) when delivered, if
personally delivered or sent by facsimile on a Business Day, (ii) on the
Business Day after dispatch, if sent by nationally-recognized overnight courier,
and (iii) on the third business day following the date of mailing, if sent by
mail.  It is understood and agreed that this Section 14.5 is not intended to
govern the day-to-day business communications necessary between the Parties in
performing their duties, in due course, under the terms of this Agreement.

 

SECTION 14.6         ENTIRE AGREEMENT; MODIFICATIONS.  THIS AGREEMENT (AND THE
SUBSCRIPTION AND SHARE EXCHANGE AGREEMENT) SETS FORTH AND CONSTITUTES THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND ALL PRIOR AGREEMENTS (INCLUDING THE ORIGINAL AGREEMENT),
UNDERSTANDINGS, PROMISES AND REPRESENTATIONS, WHETHER WRITTEN OR ORAL, WITH
RESPECT THERETO ARE SUPERSEDED HEREBY.  EACH PARTY CONFIRMS THAT IT IS NOT
RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF THE OTHER PARTY EXCEPT AS
SPECIFICALLY SET FORTH HEREIN.  NO AMENDMENT, MODIFICATION, RELEASE OR DISCHARGE
WILL BE BINDING UPON THE PARTIES UNLESS IN WRITING AND DULY EXECUTED BY
AUTHORIZED REPRESENTATIVES OF BOTH PARTIES.

 

SECTION 14.7         RELATIONSHIP OF THE PARTIES.  IT IS EXPRESSLY AGREED THAT
THE PARTIES WILL BE INDEPENDENT CONTRACTORS OF ONE ANOTHER AND THAT THE
RELATIONSHIP BETWEEN THE PARTIES WILL NOT CONSTITUTE A PARTNERSHIP, JOINT
VENTURE OR AGENCY.

 

SECTION 14.8         WAIVER.  ANY TERM OR CONDITION OF THIS AGREEMENT MAY BE
WAIVED AT ANY TIME BY THE PARTY THAT IS ENTITLED TO THE BENEFIT THEREOF, BUT NO
SUCH WAIVER WILL BE EFFECTIVE UNLESS SET FORTH IN A WRITTEN INSTRUMENT DULY
EXECUTED BY OR ON BEHALF OF THE PARTY WAIVING SUCH TERM OR CONDITION.  ANY SUCH
WAIVER WILL NOT BE DEEMED A WAIVER OF ANY OTHER RIGHT OR BREACH HEREUNDER.

 

SECTION 14.9         COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN TWO OR
MORE COUNTERPARTS, EACH OF WHICH WILL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH
TOGETHER WILL CONSTITUTE ONE AND THE SAME INSTRUMENT.

 

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SECTION 14.10       NO BENEFIT TO THIRD PARTIES.  THE PROVISIONS OF THIS
AGREEMENT ARE FOR THE SOLE BENEFIT OF THE PARTIES AND THEIR SUCCESSORS AND
PERMITTED ASSIGNS.  THIS AGREEMENT SHALL NOT CONFER ANY RIGHTS OR REMEDIES UPON
ANY PERSON OTHER THAN ISIS AND ATLANTIC AND THEIR RESPECTIVE SUCCESSORS AND
PERMITTED ASSIGNS EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 12. EXCEPT
AS EXPRESSLY PROVIDED IN SECTION 12, NO PERSON WHO IS NOT A PARTY TO THIS
AGREEMENT (INCLUDING ANY EMPLOYEE, OFFICER, AGENT, REPRESENTATIVE OR
SUBCONTRACTOR OF EITHER PARTY) SHALL HAVE THE RIGHT TO ENFORCE ANY TERMS OF THIS
AGREEMENT WHICH EXPRESSLY OR BY IMPLICATION CONFERS A BENEFIT ON THAT PERSON
WITHOUT THE PRIOR WRITTEN AGREEMENT OF THE PARTIES WHICH AGREEMENT MUST REFER TO
THIS SECTION 14.10.

 

SECTION 14.11       FURTHER ASSURANCE.  EACH PARTY WILL DULY EXECUTE AND
DELIVER, OR CAUSE TO BE DULY EXECUTED AND DELIVERED, SUCH FURTHER INSTRUMENTS
AND DO AND CAUSE TO BE DONE SUCH FURTHER ACTS AND THINGS, INCLUDING THE FILING
OF SUCH ASSIGNMENTS, AGREEMENTS, DOCUMENTS AND INSTRUMENTS, AS MAY BE NECESSARY
TO CARRY OUT THE PROVISIONS AND PURPOSES OF THIS AGREEMENT.

 

SECTION 14.12       FORCE MAJEURE. NEITHER PARTY SHALL BE RESPONSIBLE TO THE
OTHER FOR ANY FAILURE OR DELAY IN PERFORMING ANY OF ITS OBLIGATIONS UNDER THIS
AGREEMENT OR FOR OTHER NON-PERFORMANCE HEREUNDER IF SUCH DELAY OR
NON-PERFORMANCE IS CAUSED BY STRIKE, STOPPAGE OF LABOR, LOCKOUT OR OTHER LABOR
TROUBLE, FIRE, FLOOD, ACCIDENT, WAR, ACT OF TERRORISM, ACT OF GOD OR OF THE
GOVERNMENT OF ANY COUNTRY OR OF ANY LOCAL GOVERNMENT, OR BY CAUSE UNAVOIDABLE OR
BEYOND THE CONTROL OF ANY PARTY HERETO. IN SUCH EVENT, THE PARTY AFFECTED WILL
USE COMMERCIALLY REASONABLE EFFORTS TO RESUME PERFORMANCE OF ITS OBLIGATIONS.

 

[SIGNATURES ON FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the Restatement Date.

 

ATLANTIC PHARMACEUTICALS LIMITED

 

ISIS PHARMACEUTICALS, INC.

 

 

 

 

 

 

Per:

/s/ Toby Wilson Waterworth

 

Per:

/s/ B. Lynne Parshall

 

 

 

Toby Wilson Waterworth

 

B. Lynne Parshall

Director

 

Chief Operating Officer & CFO

 

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APPENDIX 1

Definitions

 

“Affiliate” of a Party means any other party that, directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with such Party. For purposes of this definition only, “control”
and, with correlative meanings, the terms “controlled by” and “under common
control with” will mean the possession, directly or indirectly, of the power to
direct the management or policies of a party, whether through the ownership of
voting securities or by contract relating to voting rights or corporate
governance. Notwithstanding the foregoing, Regulus Therapeutics Inc. will not be
deemed an “Affiliate” of Isis for the purposes of this Agreement.

 

“Agreement” has the meaning set forth in the Preamble.

 

“Alicaforsen” means the compound known by the USAN name “Alicaforsen,” which is
also known as ISIS 2302.

 

“Alicaforsen API” means Alicaforsen in bulk form manufactured in accordance with
cGMP for use in an Alicaforsen Product.

 

“Alicaforsen Patents” means (i) the Patents listed on Appendix 2, and (ii) all
Patents issuing from the Patents in (i), and (iii) any other Patent Controlled
by Isis during the term of this Agreement which covers the composition,
formulation or use of Alicaforsen but excluding always the Patents within
Excluded Isis IP and the ICAM-1 Specific Patents.

 

“ALICAFORSEN PRODUCT” MEANS A PHARMACEUTICAL PREPARATION COMPRISING ALICAFORSEN.

 

“Applicable Law” means all applicable laws, rules, and regulations, including
any rules, regulations, guidelines, or other requirements of the Regulatory
Authorities that may be in effect from time to time.

 

“Atlantic Equity Securities” has the meaning set forth in Section 6.2.2.

 

“ATLANTIC HEALTHCARE” MEANS THAT COMPANY INCORPORATED IN ENGLAND AND WALES WITH
COMPANY REGISTRATION NO. 5878612 WHOSE REGISTERED ADDRESS IS MAPLE HOUSE,
BIRDBROOK, HALSTEAD, ESSEX CO9 4BB.

 

“AUTHORIZED DISCLOSURE” MEANS A DISCLOSURE OF CONFIDENTIAL INFORMATION BY THE
RECEIVING PARTY TO THE EXTENT THAT SUCH DISCLOSURE IS:

 

(I)  MADE IN RESPONSE TO A VALID ORDER OF A COURT OF COMPETENT JURISDICTION;
PROVIDED, HOWEVER, THAT SUCH RECEIVING PARTY WILL FIRST HAVE GIVEN NOTICE TO
SUCH OTHER PARTY AND GIVEN SUCH OTHER PARTY A REASONABLE OPPORTUNITY TO QUASH
SUCH ORDER AND TO OBTAIN A PROTECTIVE ORDER REQUIRING THAT THE CONFIDENTIAL
INFORMATION AND DOCUMENTS THAT

 

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CONFIDENTIAL — EXECUTION VERSION

 

ARE THE SUBJECT OF SUCH ORDER BE HELD IN CONFIDENCE BY SUCH COURT OR AGENCY OR,
IF DISCLOSED, BE USED ONLY FOR THE PURPOSES FOR WHICH THE ORDER WAS ISSUED; AND
PROVIDED FURTHER THAT IF A DISCLOSURE ORDER IS NOT QUASHED OR A PROTECTIVE ORDER
IS NOT OBTAINED, THE CONFIDENTIAL INFORMATION DISCLOSED IN RESPONSE TO SUCH
COURT OR GOVERNMENTAL ORDER WILL BE LIMITED TO THAT INFORMATION WHICH IS LEGALLY
REQUIRED TO BE DISCLOSED IN RESPONSE TO SUCH COURT OR GOVERNMENTAL ORDER;

 

(II)           OTHERWISE REQUIRED TO COMPLY WITH APPLICABLE LAWS, INCLUDING TO
THE EXTENT SUCH DISCLOSURE IS REQUIRED IN PUBLICLY FILED FINANCIAL STATEMENTS OR
OTHER PUBLIC STATEMENTS UNDER RULES GOVERNING A STOCK EXCHANGE (E.G., THE
RULES OF THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, NASDAQ, NYSE,
UKLA OR ANY OTHER STOCK EXCHANGE OR WHICH SECURITIES OF EITHER PARTY MAY BE
LISTED) PROVIDED, HOWEVER, TO THE EXTENT POSSIBLE BEARING IN MIND SUCH
APPLICABLE LAWS AND SUBJECT TO THE NEXT SUBSEQUENT SENTENCE OF THIS PARAGRAPH,
THE RECEIVING PARTY SHALL PROVIDE THE OTHER PARTY WITH A COPY OF THE PROPOSED
TEXT OF SUCH STATEMENTS OR DISCLOSURE FIVE (5) BUSINESS DAYS IN ADVANCE OF THE
DATE ON WHICH THE DISCLOSURE IS TO BE MADE TO ENABLE THE OTHER PARTY TO REVIEW
AND PROVIDE COMMENTS, UNLESS A SHORTER REVIEW TIME IS AGREED.  IF THE COMPLIANCE
WITH AN APPLICABLE LAW REQUIRES FILING OF THIS AGREEMENT, THE FILING PARTY SHALL
TO THE EXTENT POSSIBLE SEEK CONFIDENTIAL TREATMENT OF PORTIONS OF THIS AGREEMENT
FROM THE RELEVANT COMPETENT AUTHORITY AND SHALL PROVIDE THE OTHER PARTY WITH A
COPY OF THE PROPOSED FILINGS AT LEAST TEN (10) BUSINESS DAYS PRIOR TO FILING FOR
THE OTHER PARTY TO REVIEW ANY SUCH PROPOSED FILING.  EACH PARTY AGREES THAT IT
WILL OBTAIN ITS OWN LEGAL ADVICE WITH REGARD TO ITS COMPLIANCE WITH APPLICABLE
LAWS AND WILL NOT RELY ON ANY STATEMENTS MADE BY THE OTHER RECEIVING PARTY
RELATING TO SUCH LAWS;

 

(III)          MADE BY SUCH RECEIVING PARTY TO THE REGULATORY AUTHORITIES AS
NECESSARY FOR (A) THE DEVELOPMENT OR COMMERCIALIZATION OF A ALICAFORSEN PRODUCT
IN A PARTICULAR COUNTRY, OR (B) AS REQUIRED IN CONNECTION WITH ANY FILING,
APPLICATION OR REQUEST FOR REGULATORY APPROVAL IN A PARTICULAR COUNTRY AND IN
EITHER CASE TO THE EXTENT CONSISTENT WITH THE LICENSES GRANTED UNDER THE TERMS
OF THIS AGREEMENT;

 

(IV)          MADE BY THE RECEIVING PARTY, IN CONNECTION WITH THE PERFORMANCE OF
THIS AGREEMENT, TO AFFILIATES SUBLICENSEES, LICENSORS, LICENSEES, DIRECTORS,
OFFICERS, EMPLOYEES, CONSULTANTS, REPRESENTATIVES OR AGENTS, EACH OF WHOM PRIOR
TO DISCLOSURE MUST BE BOUND BY OBLIGATIONS OF CONFIDENTIALITY AND NON-USE AT
LEAST EQUIVALENT IN SCOPE TO THOSE SET FORTH IN THIS AGREEMENT;

 

(V)           MADE BY THE RECEIVING PARTY TO EXISTING OR POTENTIAL ACQUIRERS;
EXISTING OR POTENTIAL PHARMACEUTICAL COLLABORATORS (TO THE EXTENT CONTEMPLATED
HEREUNDER); INVESTMENT BANKERS; EXISTING OR POTENTIAL INVESTORS, MERGER
CANDIDATES, PARTNERS, VENTURE CAPITAL FIRMS OR OTHER FINANCIAL INSTITUTIONS OR
INVESTORS FOR PURPOSES OF OBTAINING FINANCING; OR, BONA FIDE STRATEGIC POTENTIAL
PARTNERS; EACH OF WHOM PRIOR TO DISCLOSURE MUST BE BOUND BY OBLIGATIONS OF
CONFIDENTIALITY AND NON-USE AT LEAST EQUIVALENT IN SCOPE TO THOSE SET FORTH IN
THIS AGREEMENT; OR

 

(VI)          MADE BY THE RECEIVING PARTY TO ITS LEGAL ADVISERS FOR THE PURPOSE
OF SEEKING ADVICE.

 

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“Business Day” means 9.00am to 5.00pm local time on any day, other than
Saturday, Sunday or any statutory holiday or public holiday in the United States
or England and Wales.

 

“Calendar Year” means each successive period of 12 months commencing on
January 1 and ending on December 31.

 

“cGMP” means current Good Manufacturing Practices as specified in ICH Guideline
Q7A, the United States Code of Federal Regulations, or equivalent laws, rules,
or regulations of an applicable Regulatory Authority at the time of manufacture.

 

“COMMERCIALLY REASONABLE EFFORTS” (I) IN RESPECT OF ATLANTIC MEANS EFFORTS AND
RESOURCES COMMONLY USED IN THE BIOTECHNOLOGY INDUSTRY BY COMPANIES AT A SIMILAR
STAGE OF DEVELOPMENT FOR PRODUCTS OF SIMILAR COMMERCIAL POTENTIAL TO DEVELOP AND
COMMERCIALIZE A PRODUCT OWNED BY SUCH A COMPANY OR TO WHICH IT HAS RIGHTS, WHICH
PRODUCT IS AT A SIMILAR STAGE IN ITS DEVELOPMENT OR PRODUCT LIFE AND IS OF
SIMILAR MARKET POTENTIAL TO THE ALICAFORSEN PRODUCT IN QUESTION AND TAKING INTO
ACCOUNT THE PATENT AND OTHER PROPRIETARY POSITION OF THE PRODUCT; AND (II) IN
RESPECT OF ISIS MEANS EFFORTS AND RESOURCES COMMONLY USED BY BIOTECHNOLOGY
COMPANIES OF A SIMILAR SIZE TO ISIS BASED ON MARKET CAPITALIZATION TO DEVELOP A
PRODUCT OWNED BY SUCH A COMPANY OR TO WHICH IT HAS RIGHTS, WHICH PRODUCT IS AT A
SIMILAR STAGE IN ITS DEVELOPMENT OR PRODUCT LIFE AND IS OF SIMILAR MARKET
POTENTIAL TO THE ALICAFORSEN PRODUCT IN QUESTION AND TAKING INTO ACCOUNT THE
PATENT AND OTHER PROPRIETARY POSITION OF THE PRODUCT.  IF ATLANTIC IS
COMMERCIALIZING ALICAFORSEN IN A GIVEN MAJOR MARKET IN ACCORDANCE WITH THE
DEVELOPMENT PLAN, SUCH COMMERCIALIZATION WILL BE DEEMED TO BE AN EXAMPLE OF
USING COMMERCIALLY REASONABLE EFFORTS; PROVIDED, HOWEVER, THAT A FAILURE TO SO
COMMERCIALIZE IN SUCH A MAJOR MARKET WILL NOT BE DISPOSITIVE OF A FAILURE TO USE
COMMERCIALLY REASONABLE EFFORTS.

 

“COMMITTEE MEMBERS” HAS THE MEANING SET FORTH IN SECTION 3.2.

 

“CONFIDENTIAL INFORMATION” MEANS ALL INFORMATION AND KNOW-HOW AND ANY TANGIBLE
EMBODIMENTS THEREOF PROVIDED BY OR ON BEHALF OF ONE PARTY TO THE OTHER PARTY
EITHER IN CONNECTION WITH THE DISCUSSIONS AND NEGOTIATIONS PERTAINING TO THIS
AGREEMENT OR THE ORIGINAL AGREEMENT, OR IN THE COURSE OF PERFORMING THIS
AGREEMENT OR THE ORIGINAL AGREEMENT, INCLUDING DATA; KNOWLEDGE; PRACTICES;
PROCESSES; IDEAS; RESEARCH PLANS; ENGINEERING DESIGNS AND DRAWINGS; RESEARCH
DATA; MANUFACTURING PROCESSES AND TECHNIQUES; SCIENTIFIC, MANUFACTURING,
MARKETING AND BUSINESS PLANS; AND FINANCIAL AND PERSONNEL MATTERS RELATING TO
THE DISCLOSING PARTY OR TO ITS PRESENT OR FUTURE PRODUCTS, SALES, SUPPLIERS,
CUSTOMERS, EMPLOYEES, INVESTORS OR BUSINESS.

 

EXCEPTIONS. NOTWITHSTANDING THE FOREGOING, INFORMATION OR KNOW-HOW OF A PARTY
WILL NOT BE DEEMED CONFIDENTIAL INFORMATION FOR PURPOSES OF THIS AGREEMENT IF
SUCH INFORMATION OR KNOW-HOW:

 

(A)           WAS ALREADY KNOWN TO THE RECEIVING PARTY, OTHER THAN UNDER AN
OBLIGATION OF CONFIDENTIALITY OR NON-USE, AT THE TIME OF DISCLOSURE TO SUCH
RECEIVING PARTY;

 

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(B)           WAS GENERALLY AVAILABLE OR KNOWN TO PARTIES REASONABLY SKILLED IN
THE FIELD TO WHICH SUCH INFORMATION OR KNOW-HOW PERTAINS, OR WAS OTHERWISE PART
OF THE PUBLIC DOMAIN, AT THE TIME OF ITS DISCLOSURE TO, OR, WITH RESPECT TO
KNOW-HOW, DISCOVERY OR DEVELOPMENT BY, SUCH RECEIVING PARTY;

 

(C)           BECAME GENERALLY AVAILABLE OR KNOWN TO PARTIES REASONABLY SKILLED
IN THE FIELD TO WHICH SUCH INFORMATION OR KNOW-HOW PERTAINS, OR OTHERWISE BECAME
PART OF THE PUBLIC DOMAIN, AFTER ITS DISCLOSURE TO SUCH RECEIVING PARTY THROUGH
NO FAULT OF THE RECEIVING PARTY;

 

(D)           WAS DISCLOSED TO SUCH RECEIVING PARTY, OTHER THAN UNDER AN
OBLIGATION OF CONFIDENTIALITY OR NON-USE, BY A THIRD PARTY WHO HAD NO OBLIGATION
TO THE DISCLOSING PARTY NOT TO DISCLOSE SUCH INFORMATION OR KNOW-HOW TO OTHERS;
OR

 

(E)           WAS INDEPENDENTLY DISCOVERED OR DEVELOPED PRIOR TO DISCLOSURE BY
SUCH RECEIVING PARTY, AS EVIDENCED BY THEIR WRITTEN RECORDS, WITHOUT THE USE OF
CONFIDENTIAL INFORMATION BELONGING TO THE DISCLOSING PARTY.

 

“Control” means, with respect to any Patent or other intellectual property
right, possession of the right (whether by ownership, license or otherwise), to
assign, or grant a license, sublicense or other right to or under, such Patent
or right as provided for herein without violating the terms of any agreement or
other arrangement with any Third Party or incurring any additional financial or
other obligation to a Third Party except the obligations specifically described
in Section 6.7.

 

“Cumulative Net Sales” means the total cumulative amount of Net Sales calculated
separately for each of the Alicaforsen Products, from the first date that each
such product was approved for commercialization by a Regulatory Authority.

 

“Development Plan” means a written plan for the development of an Alicaforsen
Product which describes the planned activities and timelines including:

 

a)              Pre-clinical studies

b)             Formulation development

c)              Clinical studies

d)             Regulatory activities

e)              Manufacturing process development and scale up

f)                Pharmacovigilance plans

g)             Commercialization plans

 

The term “Development Plan” includes the Initial Development Plan approved by
Isis and Atlantic and attached to this Agreement as Appendix 4.

 

“Discontinuance” means the occurrence of any one of the following:

 

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1. Atlantic voluntarily elects to abandon researching, developing and/or
commercializing all Alicaforsen Products, as evidenced by a written
communication from an authorized officer of Atlantic to Isis; or

 

2.     Atlantic fails to use Commercially Reasonable Efforts and the Quality
Standard to develop and commercialize at least one Alicaforsen Product.

 

“Discontinued Patent” has the meaning set forth in Section 9.1.4.

 

“Effective Date” means March 7, 2007.

 

“EMEA” means the European Regulatory Authority known as the European Medicines
Agency and any successor agency thereto.

 

“Enabled CMO” means a Third Party engaged in the business of contract
manufacturing to which Isis has granted a license to certain of Isis’
manufacturing intellectual property for the manufacture of oligonucleotides,
including Alicaforsen API.

 

“Enema Delivery” means a route of delivery directly into an ostomy or the rectum
to achieve a local effect in the gastrointestinal tract or a systemic
therapeutic effect.

 

“Equity Cap” means [***]% of the issued and outstanding share capital of
Atlantic (on an as-issued, post financing basis).

 

“Excluded Isis IP” means all know how and Patents Controlled by Isis on the
Effective Date and at any time during the term of the Agreement other than
(A) Alicaforsen Patents, (B) ICAM-1 Specific Patents, (C) Isis Data, and
(D) Isis Manufacturing Know How.  For clarity, Excluded Isis IP includes any
know how and Patents Controlled by Isis which cover Isis’ (i) formulation and
delivery technology (save as expressly claimed in the Alicaforsen Patents,
ICAM-1 Specific Patents and Isis Manufacturing Know How), (ii) RNAi
technologies, (iii) microRNA technologies, and (iv) chemical modifications and
motifs, and (v) the Excluded Manufacturing IP.

 

“Excluded Manufacturing IP” means all Patents and know how (including any and
all information directly relating to manufacturing methods (including related
analytical methods) of Alicaforsen API) Controlled by Isis on the Effective Date
and at any time during the term of the Agreement which claim the manufacturing
process by which Isis manufactures Alicaforsen API.

 

“Existing Royalties” has the meaning set forth in Section 6.4.3.

 

“FDA” means the United States Food and Drug Administration and any successor
agency thereto.

 

“First Commercial Sale” means the first sale of an Alicaforsen Product by
Atlantic, its Affiliates or a sublicensee to a Third Party in a particular
country after Regulatory Approval has been obtained.

 

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“Follow-On Product” means a pharmaceutical composition, formulation, dosage
form, delivery system and presentation discovered and developed by Isis after
the Restatement Date that contains a nucleic acid that hybridizes to a nucleic
acid molecule encoding ICAM-1 (alone or with other active ingredients) that has
a different chemistry than Alicaforsen.

 

“IBD” means a chronic disorder of the [***], including without limitation, [***]
or [***].

 

“ICAM-1” means intercellular adhesion molecule-1 (also called CD54).

 

“ICAM-1 Specific Patents” means (i) the Patents listed on Appendix 3 (ii) all
Patents issuing therefrom, and (iii) any other Patents Controlled by Isis during
the term of this Agreement which cover the composition, formulation or use of
Alicaforsen Products, but excluding always the Alicaforsen Patents and the
Patents within Excluded Isis IP.

 

“IFRS” means International Financial Reporting Standards established by the
International Accounting Standards Board, as amended from time to time.

 

“IND” means an Investigational New Drug Application (as defined in the Food,
Drug and Cosmetic Act, as amended) filed with the FDA or its foreign
counterparts.

 

“IND-Supporting Toxicology Studies” means the pharmacokinetic and toxicology
studies required to meet the requirements for filing an IND.

 

“[***]” means a route of delivery into the human body by [***] directly into the
[***] of a human being.

 

“Initiation of a Phase I Clinical Trial” means the first visit by the first
human patient in a Phase I Clinical Trial during which dosing of an Alicaforsen
Product or placebo occurs.

 

“Initiation of a Pivotal Quality Clinical Trial” means the first visit by the
first patient in a Pivotal Quality Clinical Trial during which dosing of an
Alicaforsen Product or placebo occurs.

 

“Intramuscular Injection” means an injection directly into muscle of a human
being.

 

“Intravenous Injection” means an injection directly into a vein of a human
being.

 

“Isis Background IP” has the meaning set forth in Section 13.6.1.

 

“Isis Background Know How” has the meaning set forth in Section 13.6.1.

 

“Isis Data” has the meaning set forth in Section 2.2.1.

 

“Isis Database” has the meaning set forth in Section 3.3.1.

 

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“Isis Manufacturing Know How” has the meaning set forth in Section 2.2.1.

 

“JDC” has the meaning set forth in Section 3.2.

 

“Losses” has the meaning set forth in Section 12.1.

 

“Major Market” means the [***] and [***].

 

“NDA” means a New Drug Application filed with the FDA after completion of
clinical trials to obtain Regulatory Approval for commercial product in the
United States or an equivalent application for regulatory approval in other
Major Market countries.

 

“NDA Filing” means the acceptance by the FDA or other Regulatory Authority of
the filing of an NDA for the applicable Alicaforsen Product.

 

“Net Sales” means the gross invoiced price charged by Atlantic or its Affiliates
or sublicensees, as appropriate, for the sale of an Alicaforsen Product to a
Third Party by Atlantic, its Affiliates or its sublicensees, as appropriate,
less the following deductions:

 

(i)            Trade and quantity discounts actually granted;

 

(ii)           Credits for returns or allowances;

 

(iii)          Actual uncollectible amounts for Alicaforsen Product where
collectibility is determined in accordance with IFRS consistently applied to all
of Atlantic’s products;

 

(iv)          Freight, shipping insurance and other transportation expenses
directly related to the sale of the Alicaforsen Product (if actually borne by
Atlantic, its Affiliates or sublicensees without reimbursement from any Third
Party);

 

(v)           The amount of any sales tax or other taxes assessed directly on
the sale of such Alicaforsen Product which is not refunded; and

 

(vi)          Charge back payments or rebates granted to managed health care
organizations or federal, state and local governments, their agencies,
purchasers and reimburses.

 

The transfer of Alicaforsen Product by Atlantic or one of its Affiliates to
another Affiliate shall not be considered a sale.  Upon the sale or other
disposal of Alicaforsen Product for other than monetary consideration , which
sales price is either customary or is reasonably expected in the country in
which such sale is made, such sale or other disposal shall be deemed to be a
sale with the consideration for such sale constituting Net Sales hereunder  at
the average sales price during the applicable reporting period generally
achieved (or as achieved by similar products) for such Alicaforsen Product in
the country in which such sale or other disposal occurred when such Alicaforsen
Product is sold

 

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alone and not with other products. Disposal of Alicaforsen Product for or use of
Alicaforsen Product in clinical trials or as free samples shall not be deemed a
sale under this definition.  Such amounts shall be determined from the books and
records of Atlantic maintained in accordance with IFRS, consistently applied.

 

Where Alicaforsen Product contains Alicaforsen and is sold in combination with
one or more other active ingredient(s) that are sold either as a fixed dose or
as separate doses in a single package  for a single price (a “Combination
Product”), Net Sales will be determined as follows:

 

(X divided by Y) multiplied by Z

 

where X is the average sales price during the applicable reporting period
generally achieved for the Alicaforsen Product in the country in which such sale
or other disposal occurred when such Alicaforsen Product is sold alone and not
as a Combination Product; Y is the sum of the average sales price during the
applicable reporting period generally achieved in that country, when sold alone,
by each product (including the Alicaforsen Product) included in the Combination
Product that is sold for the single price; and Z equals the single price at
which the Combination Product represented in Y was actually sold.  In the event
one or more of the products in the Combination Product are not sold separately,
the Parties shall confer in good faith to determine a fair market price that
shall be equitable for the value of the Alicaforsen Product within the
Combination Product.

 

“Oral Delivery” means a route of delivery using a tablet or capsule into the
alimentary canal of a human being to achieve a local effect in the
gastrointestinal tract or a systemic therapeutic effect.

 

“Patents” will include (x) all U.S. patents and patent applications, (y) any
substitutions, divisions, continuations, reissues, renewals, registrations,
confirmations, re-examinations, extensions, supplementary protection
certificates and the like, and any provisional applications, of any such patents
or patent applications, and (z) any foreign or international equivalent of any
of the foregoing.

 

“Patent Term Extensions” has the meaning set forth in Section 9.1.6.

 

“Phase I Clinical Trial” means the initial clinical testing of an Alicaforsen
Product in humans (first-in-humans study).

 

“Pivotal Quality Clinical Trial” means a human clinical trial of an Alicaforsen
Product designed to be of a size and statistical power to support an NDA Filing
alone or in combination with other studies.  If it is unclear whether or not a
study design will be sufficient to support an NDA Filing (other than by virtue
of the uncertainty of safety and efficacy data from that trial) the study will
be deemed to be a Pivotal Quality Clinical Trial on the initiation of activities
to support an NDA Filing.  A Phase III clinical study will be deemed to be a
Pivotal Quality Clinical Trial.

 

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“Positive Pouchitis Clinical Trial” means a clinical study of an Alicaforsen
Product in humans conducted by Atlantic in accordance with this Agreement that
is directed to the treatment of Pouchitis, which meets the study’s primary
endpoint(s).

 

“Pouchitis” means inflammation of the mucosa, or of the full thickness, of the
intestinal wall of an ileal or ileoanal reservoir.

 

“Quality Standard” means, with respect to research, development, manufacture or
commercialization of an Alicaforsen Product, the standard of care, quality, and
professional competence commonly used in the biotechnology industry for products
of similar commercial potential at a similar stage in its lifecycle.

 

“Regulatory Approval” means (a) in the United States, approval by the FDA of an
NDA, or similar application for marketing approval, and satisfaction of any
related applicable FDA registration and notification requirements (if any), and
(b) in a Major Market other than the United States, approval by Regulatory
Authorities having jurisdiction over such country of a single application or set
of applications comparable to an NDA and satisfaction of any related applicable
regulatory and notification requirements (if any).

 

“Regulatory Authority” means any applicable government entities regulating or
otherwise exercising authority with respect to the development and
commercialization of an Alicaforsen Product.

 

“Regulatory Documentation” means all applications, registrations, licenses,
authorizations and approvals (including all Regulatory Approvals), all
correspondence submitted to or received from Regulatory Authorities (including
minutes and official contact reports relating to any communications with any
Regulatory Authority), all supporting documents and all clinical studies and
tests, including the manufacturing batch records, relating to an Alicaforsen
Product, and all data contained in any of the foregoing, including all
regulatory drug lists, advertising and promotion documents, adverse event files
and complaint files.

 

“Reverted Rights” has the meaning set forth in Section 1.2.1.

 

“Royalty Due Dates” means the last working days of March, June, September and
December of each and every year during which this Agreement remains in full
force and effect.

 

“Subcutaneous Injection” means an injection directly into the subcutaneous
tissue of the human body between the skin and the muscle of a human being.

 

“Sublicense” means a sublicense from Atlantic to a Third Party under the
Alicaforsen Patents or the ICAM-1 Patents to develop, use, sell, offer for sale,
have sold and/or import any Alicaforsen Product.

 

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“Sublicense Revenue” means any consideration that Atlantic receives from a
sublicensee in consideration for a grant of any Sublicense, including, but not
limited to, license fees, milestone payments, and license maintenance fees, but
excluding: (i) royalties on Net Sales of Alicaforsen Products, (ii) payments
made in consideration of equity or debt securities of Atlantic at fair market
value and (iii) payments specifically committed to reimburse Atlantic for the
direct cost of research and development.  If Atlantic receives any non-cash
Sublicense Revenue, Atlantic will pay Isis, at Isis’ election, either (x) a cash
payment equal to the fair market value of Isis’ appropriate portion of the
Sublicense Revenue or (y) the in-kind portion, if practicable, of the Sublicense
Revenue.  For purposes of calculating Sublicense Revenue, a series of
Sublicenses to the same sublicensee or related sublicensees will be aggregated
to constitute a single Sublicense.

 

“Subscription and Share Exchange Agreement” has the meaning set forth in
Section 1.2.1.

 

“Systemic Delivery” means a route of delivery directly into the bloodstream to
reach and affect cells in all areas of the body, which includes by Intravenous
Injection, Intramuscular Injection, Subcutaneous Injection and Oral Delivery. 
“Systemic Delivery” does not include [***].

 

“Term” has the meaning set forth in Section 10.1.

 

“Third Party” means any party other than Isis or Atlantic or their respective
Affiliates.

 

“Valid Claim” means a claim of a Patent which (i) in the case of any granted,
unexpired United States or foreign Patent, shall not have been donated to the
public, disclaimed or held invalid or unenforceable by a court of competent
jurisdiction in an unappealed or unappealable decision, or (ii) in the case of
any United States or foreign patent application, is being prosecuted in good
faith and shall not have been permanently cancelled, withdrawn, or abandoned
provided that no more than eight (8) years have passed since the earliest
priority date for such application.

 

“Valid Composition of Matter Claim” means a Valid Claim of a Patent in a given
country that covers the structure of the compound comprising the active
pharmaceutical ingredient in the Alicaforsen Product as opposed to its process
of manufacture, use or method of treatment.

 

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APPENDIX 2

 

ALICAFORSEN PATENTS

 

[***]

 

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APPENDIX 3

 

ICAM-1 SPECIFIC PATENTS

 

[***]

 

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Confidential — Execution Version

 

APPENDIX 4

 

INITIAL DEVELOPMENT PLAN

 

[Attached]

 

[***]

 

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