Exhibit 10.1

 

CONFIDENTIAL TREATMENT REQUESTED  

 

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

 

LICENSE AGREEMENT

THIS LICENSE AGREEMENT IS MADE AND ENTERED INTO EFFECTIVE AS OF MARCH 7, 2007
(THE “EFFECTIVE DATE”), BY AND BETWEEN ATLANTIC HEALTHCARE (UK) LIMITED
(REGISTERED NUMBER 6025726), WHOSE REGISTERED OFFICE IS MOFO NOTICES LIMITED,
7TH FLOOR, CITY POINT, ONE ROPEMAKER STREET, LONDON EC2Y 9AW (PROPOSED TO BE
RENAMED [***] LIMITED) (“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 wishes to license to Atlantic the drug known as Alicaforsen (also
known as ISIS 2302) so that Atlantic may develop and commercialize Alicaforsen
Products, on the terms set forth below;

WHEREAS, Isis wishes to collaborate with Atlantic to discover, develop, and
commercialize Second Generation ICAM-1 Products (as defined below);

WHEREAS, Isis is willing to grant Atlantic a license to develop and
commercialize Second Generation ICAM-1 Products on the terms set out below;

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

ARTICLE 1 - DEFINITIONS

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

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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2.1.2       THE PARTIES AGREE THAT ATLANTIC SHALL HAVE NO RIGHT TO EXERCISE THE
LICENSE RIGHT GRANTED TO IT UNDER SECTION 2.1.1(II) TO MAKE AND HAVE MADE
ALICAFORSEN API UNLESS AND UNTIL IT IS PERMITTED TO DO SO UNDER THE TERMS OF THE
MANUFACTURING AGREEMENT.

SECTION 2.2      DATA TRANSFER.

2.2.1       PROMPTLY AFTER THE EFFECTIVE DATE, ISIS WILL TRANSFER AND ASSIGN 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 IS NECESSARY FOR THE CONTINUED
DEVELOPMENT AND COMMERCIALIZATION OF ALICAFORSEN PRODUCTS (“ISIS DATA”), AND
(II) THE KNOW HOW WHICH IS OWNED BY OR LICENSED TO ISIS AT THE EFFECTIVE DATE
THAT RELATES TO THE FORMULATION OF ALICAFORSEN PRODUCT FROM ALICAFORSEN API, BUT
EXCLUDING THE EXCLUDED MANUFACTURING IP (THE “ISIS MANUFACTURING KNOW HOW”).

ARTICLE 3 -
ALICAFORSEN PRODUCT DEVELOPMENT

SECTION 3.1      DEVELOPMENT/COMMERCIALIZATION/REGULATORY RESPONSIBILITIES. 
UNLESS ISIS EXERCISES ITS REVERSION RIGHTS UNDER SECTION 11.2, ATLANTIC IS FULLY
RESPONSIBLE FOR THE CONTINUED DEVELOPMENT AND COMMERCIALIZATION OF PRODUCTS AND
UNDERTAKES TO ISIS TO USE COMMERCIALLY REASONABLE EFFORTS TO DEVELOP 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 AS SOON AS
PRACTICABLE.  ATLANTIC HEREBY ASSUMES ALL REGULATORY RESPONSIBILITIES IN
CONNECTION WITH PRODUCTS, INCLUDING SOLE RESPONSIBILITY FOR ALL REGULATORY
DOCUMENTATION AND FOR OBTAINING ALL REGULATORY APPROVALS.  ATLANTIC WILL COMPLY
WITH ALL APPLICABLE LAWS IN CONNECTION WITH THE DEVELOPMENT AND
COMMERCIALIZATION OF PRODUCTS.

SECTION 3.2      JOINT DEVELOPMENT COMMITTEE.

3.2.1       TO PROMOTE THE SUCCESSFUL DEVELOPMENT OF THE PRODUCTS, THE PARTIES
WILL ESTABLISH A JOINT DEVELOPMENT COMMITTEE (THE “JDC”) WHICH WILL BE COMPRISED
OF ONE ISIS REPRESENTATIVE AND ONE OR MORE REPRESENTATIVES OF ATLANTIC
(“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 ALICAFORSEN
PRODUCTS, DISCUSSING REGULATORY OR QUALITY ASSURANCE ISSUES IN RELATION TO THE
ALICAFORSEN API AND COORDINATING THE CONDUCT OF THE SECOND GENERATION ICAM-1
RESEARCH PROGRAM IN ACCORDANCE WITH THE AGREEMENT.  THE JDC SHALL CONDUCT ITS
DISCUSSIONS IN GOOD FAITH WITH A VIEW TO OPERATING TO THE MUTUAL BENEFIT OF THE
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

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LESS THAN ONCE PER CALENDAR QUARTER.  EACH JDC MEETING SHALL BE CHAIRED BY A
COMMITTEE MEMBER NOMINATED BY ATLANTIC.

3.2.2       THE JDC WILL CONTINUE IN EXISTENCE FOR THREE YEARS AFTER THE
EFFECTIVE DATE OR UNTIL COMPLETION OF THE SECOND GENERATION ICAM-1 RESEARCH
PROGRAM, WHICH EVER IS THE LATER, 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 PROMPTLY PROVIDE ISIS WITH COPIES
OF TOXICOLOGY, PHARMACOKINETIC AND SERIOUS ADVERSE EVENT REPORTS RELATED TO EACH
ALICAFORSEN PRODUCT.  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.  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.

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, AND AGREES TO PROVIDE TO THE JDC EVERY SIX MONTHS A
SUMMARY OF SUCH ACTIVITIES AND PROGRESS.

SECTION 3.5      SUPPLY OF EXISTING ALICAFORSEN API.

3.5.1       ISIS AGREES TO SUPPLY ATLANTIC WITH A QUANTITY OF ALICAFORSEN API
THAT IS IN ISIS’ POSSESSION AS OF THE EFFECTIVE DATE, REASONABLY SUFFICIENT TO
OBTAIN REGULATORY APPROVAL FOR AN ALICAFORSEN PRODUCT FOR POUCHITIS (BUT NOT TO
EXCEED [***] KG) IN THE USA [***], IN ACCORDANCE WITH A CLINICAL TRIAL PROGRAM
DESIGNED BY ATLANTIC AND DISCUSSED BY THE JDC.

3.5.2       ATLANTIC AND ISIS AGREE THAT, TO THE EXTENT AVAILABLE FROM THE
STOCKS OF ALICAFORSEN API IN ISIS’ POSSESSION AS OF THE EFFECTIVE DATE, ANY
OTHER QUANTITIES OF ALICAFORSEN API REQUIRED BY ATLANTIC FOR THE DEVELOPMENT 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; ONCE SUCH EXISTING STOCKS OF ALICAFORSEN API WITH GREATER THAN [***]

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months of shelf life have been exhausted, additional quantities of Alicaforsen
API may be acquired from Isis on the terms of Section 3.6.

3.5.3       ALL ALICAFORSEN API ORDERED BY ATLANTIC PURSUANT TO SECTION 3.5 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 3.5; (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
EFFECTIVE DATE, (III) HAVE AT LEAST [***] MONTHS SHELF LIFE REMAINING WHEN
DELIVERED, AND WILL BE ACCOMPANIED BY A CERTIFICATE OF ANALYSIS.

3.5.4       THE PARTIES AGREE THAT ANY SUPPLY OF ALICAFORSEN API UNDER THIS
SECTION 3.5 WILL BE SUBJECT TO AND IN ACCORDANCE WITH THE TERMS OF THE
MANUFACTURING AGREEMENT (AS DEFINED BELOW).

SECTION 3.6      COMMERCIAL SUPPLY AND MANUFACTURING OF ALICAFORSEN API.

3.6.1       FOLLOWING THE EFFECTIVE DATE, AT ATLANTIC’S ELECTION, ISIS AND
ATLANTIC WILL NEGOTIATE IN GOOD FAITH, AGREE AND EXECUTE A SEPARATE WRITTEN
AGREEMENT FOR THE COMMERCIAL SUPPLY AND MANUFACTURE OF ALICAFORSEN API BY ISIS
FOR ATLANTIC (THE “MANUFACTURING AGREEMENT”) SUCH MANUFACTURING AGREEMENT TO BE
ENTERED INTO WITHIN [***] OF THE EFFECTIVE DATE.  SUCH ALICAFORSEN API WILL BE
MANUFACTURED IN ACCORDANCE WITH CGMP, APPLICABLE ALICAFORSEN API SPECIFICATIONS,
AND THE TERMS AND CONDITIONS OF THE MANUFACTURING AGREEMENT, WHICH WILL INCLUDE,
AMONG OTHER STANDARD COMMERCIAL TERMS, ISIS’ AGREEMENT TO MAINTAIN A DRUG MASTER
FILE FOR ALICAFORSEN API (“DMF”) AND ATLANTIC’S RIGHT TO REFERENCE THE DMF IN
ITS REGULATORY DOCUMENTATION.  SHOULD: (A) A REGULATORY AUTHORITY IN A
PARTICULAR JURISDICTION IN WHICH ISIS HAS NOT FILED A DMF, OR (B) A REGULATORY
AUTHORITY WHICH DOES NOT ALLOW CROSS-REFERENCING TO AN EXISTING DMF, REQUEST
INFORMATION REGARDING ALICAFORSEN API AND ITS MANUFACTURE CONTAINED IN A DMF
SOMEWHERE IN THE WORLD, ISIS UNDERTAKES TO (I) PROVIDE SUCH INFORMATION DIRECTLY
ON BEHALF OF ATLANTIC TO THE APPLICABLE REGULATORY AUTHORITY, OR IF NOT LEGALLY
POSSIBLE (II) CONSULT WITH ATLANTIC IN GOOD FAITH REGARDING THE APPROPRIATE
RESPONSE TO SUCH INQUIRY AND TO GIVE ATLANTIC (AND ITS RELEVANT SUB-LICENSEE(S))
REASONABLE ASSISTANCE WITH ANSWERING THAT REGULATORY AUTHORITY’S QUESTIONS, SAVE
THAT SHOULD A REGULATORY AUTHORITY REQUEST ISIS’S PROPRIETARY INFORMATION
RELATING TO THE ALICAFORSEN API OR ITS MANUFACTURE OUTSIDE OF THE DEFINITION OF
ISIS MANUFACTURING KNOW-HOW ISIS SHALL NOT BE OBLIGED TO SHARE SUCH INFORMATION
WITH ATLANTIC (OR ITS RELEVANT SUB-LICENSEE(S)) AND SHALL RESPOND DIRECTLY TO
THE REGULATORY AUTHORITY ON ATLANTIC’S OR THE RELEVANT SUBLICENSEE’S BEHALF.
NOTWITHSTANDING SECTION 2.1.1 AND 2.2.1 ABOVE, WHILE ISIS IS MANUFACTURING
ALICAFORSEN API FOR ATLANTIC UNDER THE MANUFACTURING AGREEMENT, ISIS WILL
TRANSFER, AT ATLANTIC’S WRITTEN REQUEST AND SUBJECT TO THE CONFIDENTIALITY
OBLIGATIONS UNDER ARTICLE 8, ANALYTICAL METHODS WITHIN EXCLUDED MANUFACTURING IP
NECESSARY TO PROPERLY CHARACTERIZE AND RELEASE THE ALICAFORSEN API.

3.6.2       ATLANTIC AGREES THAT A MINIMUM ORDER SIZE OF [***] KG AT A PRICE OF
[***] DOLLARS ($[***]) PER GRAM WILL APPLY TO ALL PURCHASES OF ALICAFORSEN API
UNDER THE MANUFACTURING AGREEMENT.

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3.6.3       ISIS AND ATLANTIC AGREE THAT ATLANTIC SHALL ONLY BE PERMITTED TO
EXERCISE ITS LICENSE RIGHTS UNDER SECTION 2.1.1(II) TO MANUFACTURE ALICAFORSEN
API IN THE EVENT EITHER THAT ISIS IS UNABLE TO SUPPLY ATLANTIC WITH ITS
REQUIREMENTS OF ALICAFORSEN API FOR [***] SUCCESSIVE CALENDAR QUARTERS OR THAT
ISIS FAILS TO SUPPLY ATLANTIC WITH ALICAFORSEN API THAT MEETS THE AGREED
SPECIFICATION THEREFOR FOR [***] SUCCESSIVE CALENDAR QUARTERS OR BECAUSE
ATLANTIC IS OTHERWISE ENTITLED TO TERMINATE THE MANUFACTURING AGREEMENT FOR
CAUSE AND THERE IS NOT ANOTHER AVAILABLE SUPPLIER WHO CAN PRODUCE ALICAFORSEN
API WITHOUT ACCESS TO THE EXCLUDED MANUFACTURING IP.  FOR CLARITY SUCH
PERMISSION SHALL NOT ARISE SIMPLY BY VIRTUE OF EXPIRATION OF EITHER THIS
AGREEMENT OR THE MANUFACTURING AGREEMENT.

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, INCLUDING MANAGEMENT
OF THE OVERALL MANUFACTURING STRATEGY AND TACTICS, FORMULATION, CONTRACT
MANUFACTURER SELECTION FOR FINISHED PRODUCT, ASSOCIATED AUDITS, AND STABILITY
TESTING.

ARTICLE 4 -
SECOND GENERATION ICAM-1 PRODUCTS

SECTION 4.1      SECOND GENERATION ICAM-1 ASO DRUG CANDIDATE LICENSE.

4.1.1       CANDIDATE POOL.  IMMEDIATELY FOLLOWING RECEIPT OF A NOTICE FROM
ATLANTIC REQUESTING ISIS TO COMMENCE THE WORK (SUCH NOTICE TO BE GIVEN WITHIN
[***] OF THE GRANT OF REGULATORY APPROVAL IN THE USA OF AN ALICAFORSEN PRODUCT
FOR THE TREATMENT OF POUCHITIS, BUT IN NO EVENT WILL SUCH NOTICE BE GIVEN LATER
THAN [***] AFTER THE EFFECTIVE DATE), ISIS AGREES TO, AT ITS SOLE COST AND
EXPENSE, COMMENCE IN VITRO SCREENING IN ACCORDANCE WITH A WRITTEN WORK PLAN TO
BE MUTUALLY AGREED UPON BY BOTH PARTIES (THE “WORK PLAN”), TO ATTEMPT TO
DISCOVER BETWEEN [***] AND [***] SECOND GENERATION ICAM-1 ASO DRUG CANDIDATES
(THE “CANDIDATE POOL”) (THE “SECOND GENERATION ICAM-1 RESEARCH PROGRAM”).  ISIS
AGREES TO USE COMMERCIALLY REASONABLE EFFORTS AND THE QUALITY STANDARD WHEN
DISCHARGING ANY OF ITS OBLIGATIONS UNDER THE WORK PLAN AND WILL KEEP OR CAUSE TO
BE KEPT WRITTEN LABORATORY NOTEBOOKS AND OTHER RECORDS AND REPORTS OF ITS
PROGRESS WITH THE WORK PLAN AND ITS ACTIVITIES UNDER THE WORK PLAN IN SUFFICIENT
DETAIL AND IN A GOOD SCIENTIFIC MANNER FOR ALL PURPOSES INCLUDING PATENT
PURPOSES.  ISIS WILL REPORT ITS PROGRESS WITH THE SECOND GENERATION ICAM-1
RESEARCH PROGRAM TO THE JDC.

4.1.2       CANDIDATE SELECTION.  ISIS WILL PROVIDE ATLANTIC WITH WRITTEN NOTICE
AND ANY SUPPORTING IN VITRO DATA AT SUCH TIME AS THE CANDIDATE POOL IS AVAILABLE
FOR CONSIDERATION BY ATLANTIC (THE “NOTICE”). ATLANTIC MUST NOTIFY ISIS, IN
WRITING WITHIN [***] FOLLOWING THE NOTICE, THAT (I) IT HAS ELECTED TO DEVELOP A
SECOND GENERATION ICAM-1 PRODUCT AND NOMINATE ONE OF THE CANDIDATES FROM THE
CANDIDATE POOL AS THE LEAD SECOND GENERATION ICAM-1 ASO DRUG CANDIDATE, AND (II)
IT AGREES TO PROMPTLY ESTABLISH, IN GOOD FAITH, A SIGNIFICANT DEVELOPMENT
PROGRAM PURSUANT TO A WRITTEN DEVELOPMENT PLAN TO BE SET BY ATLANTIC (THE
“SECOND GENERATION DEVELOPMENT PLAN”).  IF ATLANTIC FAILS TO ELECT TO DEVELOP A
SECOND GENERATION ICAM-1 PRODUCT USING THE SECOND GENERATION ICAM-1 ASO DRUG
CANDIDATES UNDER THIS ARTICLE 4 NEITHER ISIS NOR ATLANTIC WILL HAVE ANY FURTHER
OBLIGATIONS UNDER THIS AGREEMENT WITH REGARD TO THE CANDIDATE POOL, ANY SECOND
GENERATION ICAM-1 ASO DRUG CANDIDATE OR ANY SECOND GENERATION ICAM-1 PRODUCT. 
IF, DESPITE ISIS’ COMMERCIALLY REASONABLE EFFORTS, ISIS FAILS TO PRODUCE A
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Pool that is reasonably acceptable to Atlantic, neither Isis nor Atlantic will,
for a period of three years following the date of the Notice, take any steps to
research another anti-sense oligonucleotide drug candidate designed to directly
inhibit ICAM-1 without the prior consent of the other Party.

4.1.3       LICENSE GRANT. IF ATLANTIC SO INFORMS ISIS OF SUCH ELECTION AND
AGREEMENT UNDER SECTION 4.1.2 ABOVE, THEN ISIS WILL GRANT TO ATLANTIC, SUBJECT
TO AND UPON THE SAME TERMS AND CONDITIONS OF THIS AGREEMENT:

(X) AN EXCLUSIVE LICENSE UNDER THE ICAM-1 SPECIFIC PATENTS SOLELY TO DEVELOP,
MAKE, HAVE MADE, USE, SELL, OFFER FOR SALE, HAVE SOLD AND IMPORT SECOND
GENERATION ICAM-1 ASO DRUG CANDIDATES AND SECOND GENERATION ICAM-1 PRODUCTS;

(Y) AN EXCLUSIVE LICENSE UNDER THE SECOND GENERATION ICAM-1 PRODUCT-SPECIFIC
PATENTS SOLELY TO DEVELOP, MAKE, HAVE MADE, USE, SELL, OFFER FOR SALE, HAVE SOLD
AND IMPORT SECOND GENERATION ICAM-1 ASO DRUG CANDIDATES AND SECOND GENERATION
ICAM-1 PRODUCTS; AND

(Z) A NON-EXCLUSIVE WORLDWIDE LICENSE UNDER THE ISIS CORE TECHNOLOGY PATENTS
SOLELY TO DEVELOP, MAKE, HAVE MADE, USE, SELL, OFFER FOR SALE, HAVE SOLD AND
IMPORT SECOND GENERATION ICAM-1 ASO DRUG CANDIDATES AND SECOND GENERATION ICAM-1
PRODUCTS.

THE LICENSES GRANTED TO ATLANTIC UNDER THIS SECTION 4.1.3 ARE SUBLICENSABLE ONLY
IN CONNECTION WITH A LICENSE OF A SECOND GENERATION ICAM-1 PRODUCT TO A THIRD
PARTY FOR THE CONTINUED DEVELOPMENT AND COMMERCIALIZATION OF SECOND GENERATION
ICAM-1 PRODUCTS IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

4.1.4       DATA TRANSFER. IN ADDITION, PROMPTLY FOLLOWING ISIS’ LICENSE GRANTS
TO ATLANTIC UNDER SECTION 4.1.3 ABOVE, ISIS WILL TRANSFER AND ASSIGN TO ATLANTIC
ALL OF ISIS’ RIGHT, TITLE AND INTEREST IN AND TO ALL DATA, RESULTS, AND
INFORMATION RELATED TO TESTING AND STUDIES OF THE SECOND GENERATION ICAM-1 ASO
DRUG CANDIDATES (INCLUDING ANALYTICAL TEST RESULTS AND NON-CLINICAL PHARMACOLOGY
AND SAFETY DATA) IN THE POSSESSION OF ISIS (THE “SECOND GENERATION ISIS DATA”)
TO THE EXTENT SUCH DATA, RESULTS AND/OR INFORMATION IS NECESSARY FOR THE
CONTINUED DEVELOPMENT AND COMMERCIALIZATION OF SECOND GENERATION ICAM-1
PRODUCTS; BUT EXCLUDING ANY EXCLUDED ISIS IP.

4.1.5       SHOULD ATLANTIC ELECT TO DEVELOP SECOND GENERATION ICAM-1 PRODUCTS
PURSUANT TO SECTION 4.1.2, ATLANTIC SHALL BE FULLY RESPONSIBLE FOR THE
DEVELOPMENT AND COMMERCIALIZATION OF SECOND GENERATION ICAM-1 PRODUCTS AND
UNDERTAKES TO USE COMMERCIALLY REASONABLE EFFORTS TO DEVELOP A SECOND GENERATION
ICAM-1 PRODUCT AND TO MAKE ITS FIRST COMMERCIAL SALE OF A SECOND GENERATION
ICAM-1 PRODUCT IN A MAJOR MARKET AS SOON AS PRACTICABLE FOLLOWING ITS ELECTION,
IN ACCORDANCE WITH SECTION 3.1 ABOVE.  ATLANTIC WILL DEVELOP SUCH PRODUCTS ON
THE TERMS SET OUT IN SECTION 3.3 AND SECTION 3.4.  SHOULD ATLANTIC ELECT TO HAVE
SECOND GENERATION ICAM-1 ASO DRUG CANDIDATE MANUFACTURED BY ISIS, ISIS AND
ATLANTIC WILL CONDUCT A NEGOTIATION IN GOOD FAITH, AGREE AND EXECUTE A SEPARATE
WRITTEN AGREEMENT FOR THE SUPPLY OF SECOND GENERATION ICAM-1 ASO DRUG CANDIDATES
FOR USE IN THE DEVELOPMENT AND

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COMMERCIALIZATION OF SECOND GENERATION ICAM-1 PRODUCTS WITHIN [***] OF ATLANTIC
NOTIFYING ISIS THAT IT WISHES ISIS TO SO SUPPLY.

SECTION 4.2      EXCLUSIVE PARTNER.

4.2.1       FOR A PERIOD OF [***] FOLLOWING THE EFFECTIVE DATE OR UNTIL THE
[***] PERIOD FOLLOWING THE DELIVERY OF THE NOTICE SET OUT IN SECTION 4.1.2 HAS
EXPIRED (WHICH EVER IS THE LATER) (THE “PERIOD”), AND THEREAFTER DURING THE TERM
OF THIS AGREEMENT IF ATLANTIC ELECTS TO DEVELOP A SECOND GENERATION ICAM-1
PRODUCT UNDER SECTION 4.1.2 WITHIN THE PERIOD, ISIS WILL NOT DEVELOP OR
COMMERCIALIZE ITSELF, AND WILL NOT PERMIT OR GRANT ANY LICENSE UNDER THE
ALICAFORSEN PATENTS, ICAM-1 SPECIFIC PATENTS, SECOND GENERATION ICAM-1
PRODUCT-SPECIFIC OR ISIS CORE TECHNOLOGY PATENTS TO A THIRD PARTY TO DEVELOP OR
COMMERCIALIZE, ANY ANTISENSE DRUG COMPOUND DESIGNED TO DIRECTLY INHIBIT ICAM-1.
NOTWITHSTANDING THE FOREGOING, ISIS RETAINS THE RIGHT TO USE ANTISENSE COMPOUNDS
MODULATING ICAM-1 OR TO TRANSFER SUCH ANTISENSE COMPOUNDS TO THIRD PARTIES FOR
NON-COMMERCIAL TARGET VALIDATION PURPOSES, AND SUCH ACTIVITIES WILL NOT BE
INTERPRETED AS A BREACH OF THIS AGREEMENT.  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 PRODUCT(S), AND WILL NOT PERMIT OR
GRANT ANY LICENSE UNDER THE ALICAFORSEN PATENTS, ICAM-1 SPECIFIC PATENTS, OR
SECOND GENERATION ICAM-1 PRODUCT-SPECIFIC PATENTS TO A THIRD PARTY TO DEVELOP OR
COMMERCIALIZE ANY SUCH PRODUCT OTHER THAN THE PRODUCT(S).

ARTICLE 5 -
BONA FIDE THIRD PARTY LICENSE OFFERS

SECTION 5.1      BONA FIDE THIRD PARTY LICENSE OFFERS.

5.1.1       IF, FOLLOWING THE EARLIER TO OCCUR OF A [***] OR [***], A THIRD
PARTY MAKES AN OFFER TO ATLANTIC TO TAKE A SUBLICENSE UNDER THE ALICAFORSEN
PATENTS, ICAM-1 SPECIFIC PATENTS, SECOND GENERATION ICAM-1 PRODUCT-SPECIFIC
PATENTS AND/OR THE ISIS CORE TECHNOLOGY PATENTS IN ORDER TO DEVELOP AND
COMMERCIALIZE A PRODUCT IN [***] THAT ATLANTIC IS DEVELOPING FOR AN ALTERNATIVE
INDICATION, FOR AN INDICATION FOR WHICH ATLANTIC IS NOT THEN DEVELOPING A
PRODUCT, ATLANTIC WILL PROMPTLY INFORM ISIS OF ITS RECEIPT OF THIS OFFER AND
WHETHER IT CONSIDERS THIS OFFER TO BE A BONA FIDE OFFER ON COMMERCIAL TERMS
WHICH ARE REASONABLY ACCEPTABLE TO ATLANTIC.  IF ATLANTIC CONSIDERS THE OFFER TO
BE A BONA FIDE OFFER ON COMMERCIAL TERMS WHICH ARE REASONABLY ACCEPTABLE TO
ATLANTIC, ATLANTIC WILL, IN GOOD FAITH, CONSIDER SUCH OFFER AND WITHIN [***]
FROM RECEIPT OF SUCH A BONA FIDE OFFER ATLANTIC WILL EITHER:

(I) NOTIFY ISIS THAT IT REASONABLY BELIEVES THAT IT IS UNLIKELY THAT ATLANTIC
WILL, WITHIN THE PERIOD OF [***] FROM THE DATE OF RECEIPT OF SUCH OFFER,
INITIATE DEVELOPMENT OF A PRODUCT FOR THE INDICATION IN QUESTION ITSELF; IN
WHICH CASE IT WILL THEN PROMPTLY COMMENCE GOOD FAITH NEGOTIATION OF A DEFINITIVE
WRITTEN LICENSE AGREEMENT WITH SUCH THIRD PARTY PURSUANT TO WHICH THE THIRD
PARTY WILL BE GRANTED THE RIGHTS UNDER THE ALICAFORSEN PATENTS, ICAM-1 SPECIFIC
PATENTS, SECOND GENERATION ICAM-1 PRODUCT-SPECIFIC PATENTS AND/OR THE ISIS CORE

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TECHNOLOGY PATENTS (AS APPLICABLE) TO DEVELOP, MAKE AND COMMERCIALIZE A PRODUCT
IN [***] FOR THE INDICATION IN QUESTION; OR

(II) NOTIFY ISIS THAT IT REASONABLY BELIEVES THAT IT IS LIKELY THAT ATLANTIC
WILL, WITHIN THE PERIOD OF [***] FROM THE DATE OF RECEIPT OF SUCH OFFER,
INITIATE DEVELOPMENT OF A PRODUCT FOR THE INDICATION IN QUESTION ITSELF; IN
WHICH CASE IT MAY DECLINE SUCH THIRD PARTY LICENSING OFFER AND, IF IT DECLINES
SUCH OFFER, WILL USE ITS COMMERCIALLY REASONABLE EFFORTS TO INITIATE DEVELOPMENT
OF A PRODUCT IN [***] FOR THE INDICATION IN QUESTION WITHIN [***] OF THE DATE OF
THIS NOTICE.

5.1.2       IF A THIRD PARTY MAKES AN OFFER TO ATLANTIC TO TAKE A SUBLICENSE
UNDER THE ALICAFORSEN PATENTS, ICAM-1 SPECIFIC PATENTS, SECOND GENERATION ICAM-1
PRODUCT-SPECIFIC PATENTS AND/OR THE ISIS CORE TECHNOLOGY PATENTS IN ORDER TO
DEVELOP AND COMMERCIALIZE A PRODUCT IN [***] FOR AN INDICATION FOR WHICH
ATLANTIC IS NOT THEN DEVELOPING A PRODUCT ATLANTIC WILL PROMPTLY INFORM ISIS OF
ITS RECEIPT OF THIS OFFER AND WHETHER IT CONSIDERS THIS OFFER TO BE A BONA FIDE
OFFER ON COMMERCIAL TERMS WHICH ARE REASONABLY ACCEPTABLE TO ATLANTIC.  IF
ATLANTIC CONSIDERS THE OFFER TO BE A BONA FIDE OFFER ON COMMERCIAL TERMS WHICH
ARE REASONABLY ACCEPTABLE TO ATLANTIC, ATLANTIC WILL, IN GOOD FAITH, CONSIDER
SUCH OFFER AND WITHIN [***] FROM RECEIPT OF SUCH A BONA FIDE OFFER ATLANTIC WILL
EITHER:

(I) NOTIFY ISIS THAT IT REASONABLY BELIEVES THAT IT IS UNLIKELY THAT ATLANTIC
WILL, WITHIN THE PERIOD OF [***] FROM THE DATE OF RECEIPT OF SUCH OFFER,
INITIATE [***]; IN WHICH CASE IT WILL PROMPTLY COMMENCE GOOD FAITH NEGOTIATION
OF A DEFINITIVE WRITTEN LICENSE AGREEMENT WITH SUCH THIRD PARTY PURSUANT TO
WHICH THE THIRD PARTY WILL BE GRANTED THE RIGHTS UNDER THE ALICAFORSEN PATENTS,
ICAM-1 SPECIFIC PATENTS, SECOND GENERATION ICAM-1 PRODUCT-SPECIFIC PATENTS
AND/OR THE ISIS CORE TECHNOLOGY PATENTS (AS APPLICABLE) TO DEVELOP, MAKE AND
COMMERCIALIZE A PRODUCT IN [***] FOR THE INDICATION IN QUESTION; OR

(II) NOTIFY ISIS THAT IT REASONABLY BELIEVES THAT IT IS LIKELY THAT ATLANTIC
WILL, WITHIN THE PERIOD OF [***] FROM THE DATE OF RECEIPT OF SUCH OFFER,
INITIATE [***]; IN WHICH CASE IT MAY DECLINE SUCH THIRD PARTY LICENSING OFFER
AND IF IT DECLINES SUCH OFFER WILL [***] OF THE DATE OF THIS NOTICE.

ARTICLE 6 -
FINANCIAL PROVISIONS

SECTION 6.1      UP-FRONT PAYMENT BY ATLANTIC.

6.1.1       UPON THE EXECUTION OF THE SUBSCRIPTION AND SHARE EXCHANGE AGREEMENT
(DEFINED BELOW), ATLANTIC WILL PAY AN UP-FRONT LICENSE FEE OF $[***] TO ISIS
WHICH SHALL BE SATISFIED (IN FULL) BY THE ISSUE TO ISIS OF [***] ORDINARY SHARES
IN ATLANTIC’S SHARE CAPITAL, WHICH SHALL THEN BE IMMEDIATELY EXCHANGED FOR [***]
ORDINARY SHARES IN ATLANTIC HEALTHCARE’S SHARE CAPITAL PURSUANT TO THE TERMS OF
THE SUBSCRIPTION AND SHARE EXCHANGE AGREEMENT (THE “SUBSCRIPTION AND SHARE
EXCHANGE AGREEMENT”), WHICH WILL BE EXECUTED BY AND BETWEEN ISIS,

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ATLANTIC, AND ATLANTIC HEALTHCARE ON OR BEFORE MARCH 16, 2007 (THE “SSEA
EXECUTION DATE”); PROVIDED, HOWEVER,

(a)  if at any time during the Anti-Dilution Protection Period (to be 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 this Agreement) at a subscription price per share of
less than £[***], then Isis shall have the right to subscribe for additional AH
Shares (to be 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 this 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 [***] (TO
BE DEFINED IN THE SUBSCRIPTION AND SHARE EXCHANGE AGREEMENT)  AND/OR [***] (TO
BE 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 THIS
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.

6.1.3  IF THE SUBSCRIPTION AND SHARE EXCHANGE AGREEMENT IS NOT EXECUTED BY ISIS,
ATLANTIC, AND ATLANTIC HEALTHCARE ON OR BEFORE [***], THIS AGREEMENT WILL
AUTOMATICALLY TERMINATE WITHOUT ANY LIABILITY TO EITHER PARTY.

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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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 ROYALTIES ON
NET SALES) FROM SUCH SUBLICENSING OF ANY PRODUCT BY ATLANTIC AND ITS AFFILIATES.

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

SECTION 6.4      ROYALTY PAYMENTS BY ATLANTIC.

6.4.1       FOR ANY 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 PRODUCT IN ACCORDANCE WITH THE FOLLOWING
TABLE. 

Cumulative Net Sales

 

Royalty Rate
(Alicaforsen
Products)

 

Royalty Rate
(Second Generation
ICAM-1 Products)

 

Less than US $[***]

 

[***]

%

[***]

%

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

 

[***]

%

[***]

%

Above US $[***]

 

[***]

%

[***]

%

 

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6.4.2       FOR ANY 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 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 PRODUCTS SOLD PURSUANT TO A SUBLICENSE OF (I) A SECOND
GENERATION ICAM-1 PRODUCT, OR (II) AN ALICAFORSEN PRODUCT THAT IS NOT INDICATED
FOR [***], ATLANTIC WILL PAY ISIS ROYALTIES ON NET SALES OF EACH 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 PRODUCT;

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

6.4.3       ISIS WILL BE RESPONSIBLE FOR PAYMENT OF ANY THIRD PARTY ROYALTY
OBLIGATIONS RELATED TO PRODUCT THAT EXIST AS OF THE EFFECTIVE DATE (“EXISTING
ROYALTIES”), INCLUDING (I) WITH RESPECT TO THE ALICAFORSEN PRODUCT, EXISTING
ROYALTIES DUE UNDER THE AGREEMENT WITH [***] DATED [***], AND (II) WITH RESPECT
TO SECOND GENERATION ICAM-1 PRODUCTS, EXISTING ROYALTIES DUE UNDER THE AGREEMENT
WITH [***] DATED [***] AND 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 PRODUCTS.

SECTION 6.5      TERM; TIMING OF ROYALTY PAYMENTS.  ATLANTIC’S OBLIGATION TO PAY
ROYALTIES ON EACH PRODUCT WILL EXPIRE ON A COUNTY-BY-COUNTRY BASIS AS FOLLOWS:

6.5.1       WITH RESPECT TO ALICAFORSEN PRODUCTS, ATLANTIC’S OBLIGATION TO PAY
ROYALTIES ON EACH PRODUCT WILL EXPIRE ON A COUNTY-BY-COUNTRY BASIS UPON THE
LATER OF: (I) [***] YEARS FROM THE DATE OF FIRST COMMERCIAL SALE OF SUCH 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.

6.5.2       WITH RESPECT TO SECOND GENERATION ICAM-1 PRODUCTS, ATLANTIC’S
OBLIGATION TO PAY ROYALTIES ON EACH SECOND GENERATION ICAM-1 PRODUCT WILL EXPIRE
ON A COUNTY-BY-COUNTRY BASIS UPON THE LATER OF: (I) [***] YEARS FROM THE DATE OF
FIRST COMMERCIAL SALE OF SUCH SECOND GENERATION ICAM-1 PRODUCT IN SUCH COUNTRY
OF SALE, OR (II) THE EXPIRATION OF THE LAST TO EXPIRE VALID CLAIM OF ICAM-1
SPECIFIC PATENTS AND SECOND GENERATION ICAM-1 PRODUCT SPECIFIC PATENTS COVERING
THE MAKING, USING, OR SELLING OF SUCH SECOND GENERATION ICAM-1

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PRODUCT IN THE COUNTRY OF SALE, OR (III) THE EXPIRATION OF THE LAST TO EXPIRE
VALID COMPOSITION OF MATTER CLAIM WITHIN ICAM-1 SPECIFIC PATENTS AND SECOND
GENERATION ICAM-1 PRODUCT SPECIFIC PATENTS IN THE COUNTRY OF MANUFACTURE OF THAT
SECOND GENERATION ICAM-1 PRODUCT.

6.5.3       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.

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 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

12

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(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.

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 PRODUCTS SUCH INFORMATION IF IT EXERCISES ITS AUDIT
RIGHTS CONCERNING THE PRODUCTS AGAINST ISIS AND PROVIDED SUCH THIRD PARTY IS
BOUND TO KEEP SUCH INFORMATION CONFIDENTIAL.

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 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.

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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 PRODUCTS (INCLUDING ANY REGULATORY
APPROVAL) SO THAT THE PARTIES MAY ANALYZE THE NEED TO OR DESIRABILITY OF
PUBLICLY DISCLOSING OR REPORTING SUCH EVENT.  NOTWITHSTANDING SECTION 7.1.1
ABOVE, ANY PRESS RELEASE OR OTHER SIMILAR PUBLIC COMMUNICATION BY EITHER PARTY
RELATED A 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 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.  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,
THE ICAM-1 SPECIFIC PATENTS, AND THE SECOND GENERATION ICAM-1 PRODUCT-SPECIFIC
PATENTS, WHICH ARE ADDRESSED IN SECTIONS 9.1.2 AND 9.1.3 BELOW, 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, INCLUDING WITH RESPECT TO ISIS, THE ISIS CORE
TECHNOLOGY PATENTS.

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 EFFECTIVE 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

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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       SECOND GENERATION ICAM-1 PRODUCT-SPECIFIC PATENTS. SUBJECT TO
SECTION 9.1.4 BELOW, ATLANTIC WILL HAVE THE SOLE OBLIGATION, AT ATLANTIC’S
EXPENSE, TO OBTAIN, PROSECUTE AND MAINTAIN IN SUCH COUNTRIES AS ARE COMMERCIALLY
APPROPRIATE THE SECOND GENERATION ICAM-1 PRODUCT-SPECIFIC PATENTS USING
COMMERCIALLY REASONABLE EFFORTS. ATLANTIC WILL KEEP ISIS INFORMED OF ALL SECOND
GENERATION ICAM-1 PRODUCT-SPECIFIC PATENT APPLICATIONS AND REGISTRATIONS TO BE
FILED BY ATLANTIC, AND ISIS WILL HAVE THE RIGHT TO REVIEW AND COMMENT ON SUCH
APPLICATIONS WITHIN THE TIMEFRAMES OF THE PATENT FILING PROCESS AND DEADLINES. 
FOR CLARITY, ATLANTIC MAY CEASE PROSECUTING OR MAINTAINING PARTICULAR
APPLICATIONS OR PATENTS IN THE SECOND GENERATION ICAM-1 PRODUCT-SPECIFIC PATENTS
IN SELECTED JURISDICTIONS, IF ATLANTIC DETERMINES THAT IT IS NOT COMMERCIALLY
REASONABLE TO CONTINUE SUCH EFFORTS (IN WHICH CASE THE TERMS OF SECTION 9.1.4
WILL APPLY).  ISIS’ REVIEW AND COMMENT RIGHTS IN THIS SECTION 9.1.3 WILL
CONTINUE SO LONG AS THERE IS THE POSSIBILITY OF A DISCONTINUANCE.

9.1.4       DISCONTINUED PATENTS.  IF UNDER SECTION 9.1.2 OR SECTION 9.1.3 A
PARTY ELECTS TO DISCONTINUE PROSECUTION OR MAINTENANCE OF ANY PARTICULAR
APPLICATIONS OR PATENTS IN THE ALICAFORSEN PATENTS, THE ICAM-1 SPECIFIC PATENTS
(IF APPLICABLE), OR THE SECOND GENERATION ICAM-1 PRODUCT-SPECIFIC PATENTS, AS
THE CASE MAY BE, IN A SELECTED JURISDICTION, SUCH PARTY WILL GIVE THIRTY (30)
DAYS ADVANCE WRITTEN NOTICE TO THE OTHER PARTY OF ANY DECISION TO CEASE
PREPARATION, FILING, PROSECUTION AND MAINTENANCE OF THAT PATENT RIGHT (A
“DISCONTINUED PATENT”).  IN SUCH CASE, THE OTHER PARTY 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 SUCH PARTY WILL OWN ANY SUCH PATENT APPLICATION AND PATENTS MATURING
THEREFROM AND BE SOLELY RESPONSIBLE FOR ALL COSTS.  IN THE EVENT OF A
DISCONTINUED PATENT CAUSED BY ATLANTIC, ATLANTIC’S EXCLUSIVE LICENSES UNDER
ARTICLE 2 AND ARTICLE 4 (IF APPLICABLE) WITH RESPECT TO SUCH DISCONTINUED PATENT
IN SUCH JURISDICTION WILL AUTOMATICALLY CONVERT INTO NONEXCLUSIVE LICENSES WITH
THE FINANCIAL TERMS SET FORTH IN ARTICLE 6 REMAINING INTACT, AND ISIS’
OBLIGATIONS UNDER SECTION 4.2 WILL TERMINATE IN SUCH SELECT JURISDICTION SOLELY
WITH RESPECT TO SUCH DISCONTINUED PATENT. THE PARTY ELECTING TO CAUSE A
DISCONTINUED PATENT WILL EXECUTE SUCH DOCUMENTS AND PERFORM SUCH ACTS AS MAY BE
REASONABLY NECESSARY FOR THE OTHER PARTY 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,
THE ICAM-1 SPECIFIC PATENTS (IF APPLICABLE), THE SECOND GENERATION ICAM-1
PRODUCT-SPECIFIC PATENTS, AND THE OTHER PARTY’S PATENTS WHICH COVER A PRODUCT. 
SUCH COOPERATION INCLUDES (A) PROMPTLY EXECUTING ALL PAPERS AND INSTRUMENTS AND
REQUIRING EMPLOYEES TO EXECUTE SUCH PAPERS AND INSTRUMENTS AS REASONABLE AND

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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, ICAM-1
SPECIFIC PATENTS OR SECOND GENERATION ICAM-1 PRODUCT-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, THE ICAM-1
SPECIFIC PATENTS, AND THE SECOND GENERATION ICAM-1 PRODUCT-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.

9.2.2       ALICAFORSEN PATENTS; ICAM-1 SPECIFIC PATENTS; AND SECOND GENERATION
ICAM-1 PRODUCT-SPECIFIC PATENTS.  WITH RESPECT TO THE ALICAFORSEN PATENTS, THE
ICAM-1 SPECIFIC PATENTS (IF APPLICABLE AND SOLELY TO THE EXTENT INFRINGED BY A
THIRD PARTY WITH A PRODUCT TARGETING ICAM-1), AND THE SECOND GENERATION ICAM-1
PRODUCT-SPECIFIC PATENTS, 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 THE PRODUCT, (I) 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, 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 AND ARTICLE 4 (IF APPLICABLE) THAT
PERTAIN TO SUCH ALICAFORSEN PATENT, ICAM-1 SPECIFIC PATENT (IF APPLICABLE), OR
SECOND GENERATION ICAM-1 PRODUCT-SPECIFIC PATENT, WILL AUTOMATICALLY CONVERT
INTO NONEXCLUSIVE LICENSES. ISIS WILL HAVE THE RIGHT, AT ISIS’S OWN EXPENSE, TO
REMOVE INFRINGEMENT OF THE ALICAFORSEN PATENTS, ICAM-1 SPECIFIC PATENTS (IF
APPLICABLE), OR SECOND GENERATION ICAM-1 PRODUCT-SPECIFIC PATENTS IF (I) ISIS IS
UNILATERALLY DEVELOPING AND COMMERCIALIZING A PRODUCT PURSUANT TO SECTION 11.2,
OR (II) IF A THIRD PARTY IS INFRINGING THE ICAM-1 SPECIFIC PATENTS WITH ANY
PRODUCT THAT DOES NOT TARGET ICAM-1.

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(A)           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, ICAM-1 SPECIFIC PATENT (IF APPLICABLE) TO THE EXTENT
INFRINGED BY A THIRD PARTY WITH A PRODUCT TARGETING ICAM-1, OR A SECOND
GENERATION ICAM-1 PRODUCT-SPECIFIC PATENT, 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.

9.2.3       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, THE ICAM-1
SPECIFIC PATENTS, THE SECOND GENERATION ICAM-1 PRODUCT-SPECIFIC PATENTS, AND THE
ISIS CORE TECHNOLOGY PATENTS.

ARTICLE 10 -
TERM AND TERMINATION

SECTION 10.1    TERM.  THE TERM OF THIS AGREEMENT (THE “TERM”) COMMENCES UPON
THE EFFECTIVE 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 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 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 ISIS SEEKS 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 ISIS AS A DEBTOR-IN-POSSESSION,
REJECTS THIS AGREEMENT, THEN ATLANTIC 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 ISIS, ATLANTIC 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 ATLANTIC’S POSSESSION AS OF

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THE COMMENCEMENT OF A BANKRUPTCY, ISIS (OR THE TRUSTEE IN BANKRUPTCY) SHALL
DELIVER SUCH EMBODIMENTS TO ATLANTIC (I) UPON ANY SUCH COMMENCEMENT OF A
BANKRUPTCY PROCEEDING, UNLESS ISIS 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 ISIS.

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 THE SECOND GENERATION
ICAM-1 PRODUCT SPECIFIC PATENTS OR CONTAINING OR COMPRISING ISIS’ CONFIDENTIAL
INFORMATION AND, IN EACH CASE (EXCEPT ONE COPY OF WHICH MAY BE RETAINED FOR
ARCHIVAL PURPOSES).

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, 9.1, 10, 11, 12, AND 14, AND SECTION 6.8 OF
THIS AGREEMENT WILL SURVIVE EXPIRATION OR TERMINATION OF THIS AGREEMENT FOR ANY
REASON.

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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 PRODUCT 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 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 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.

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 A 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 THE BREACH OF ANY OF ISIS’ REPRESENTATIONS, WARRANTIES, OR
COVENANTS CONTAINED IN ARTICLE 13 BELOW, 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

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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.

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 EFFECTIVE 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:

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13.6.1     IP OWNERSHIP.  ISIS HAS THE SUFFICIENT LEGAL AND/OR BENEFICIAL TITLE
AND OWNERSHIP OF THE ALICAFORSEN PATENTS, THE ICAM-1 SPECIFIC PATENTS, AND THE
ISIS CORE TECHNOLOGY 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

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, THE
ICAM-1 SPECIFIC PATENTS, OR THE ISIS CORE TECHNOLOGY 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.

SECTION 13.7    ATLANTIC REPRESENTATIONS, WARRANTIES, AND COVENANTS.  ATLANTIC
HEREBY REPRESENTS, WARRANTS AND COVENANTS TO ISIS THAT:

13.7.1     CAPABILITIES.   ATLANTIC HAS THE REQUISITE PERSONNEL, EXPERTISE,
EXPERIENCE AND SKILL TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT; ATLANTIC’S
SALES REPRESENTATIVES WILL

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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.

13.7.2     CAPITALIZATION.  APPENDIX 6 CONTAINS A COMPLETE AND CORRECT TABLE
SHOWING THE CAPITALIZATION OF ATLANTIC AS OF THE EFFECTIVE DATE, ON A
FULLY-DILUTED BASIS.  EXCEPT AS SET FORTH IN APPENDIX 6, THERE ARE NO
OUTSTANDING SHARES OF CAPITAL STOCK OF ATLANTIC OR WARRANTS, OPTIONS,
AGREEMENTS, CONVERTIBLE SECURITIES OR OTHER COMMITMENTS PURSUANT TO WHICH
ATLANTIC IS OR MAY BECOME OBLIGATED TO ISSUE ANY SHARES OF ITS CAPITAL STOCK OR
OTHER SECURITIES.  ATLANTIC UNDERSTANDS AND AGREES THAT ISIS IS RELYING UPON
THESE REPRESENTATIONS AND WARRANTIES WHEN ACCEPTING THE ISSUANCE OF ATLANTIC
EQUITY SECURITIES UNDER SECTION 6.1 ABOVE.

SECTION 13.8    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,
THE ICAM-1 SPECIFIC PATENTS, THE SECOND GENERATION ICAM-1 PRODUCT-SPECIFIC
PATENTS AND THE ISIS CORE TECHNOLOGY 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.

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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.

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 EXECUTIVE VICE PRESIDENT 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 A 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 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:

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If to Atlantic, to:

Atlantic Healthcare (UK) Limited
MoFo Notices Limited
7th Floor
CityPoint
One Ropemaker Street
London EC2Y 9AW
Attention:   Chief Executive Officer
Facsimile:  +44 (0) 20 7496 8500

If to Isis, to:

Isis Pharmaceuticals, Inc.
1896 Rutherford Road
Carlsbad, California 92008
Attention: Executive Vice President 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 SETS FORTH AND
CONSTITUTES THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND ALL PRIOR AGREEMENTS, UNDERSTANDING,
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.

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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.

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 date first above written.

Atlantic Healthcare (UK) Limited

 

Isis Pharmaceuticals, Inc.

 

 

 

 

 

 

Per:

/s/ Toby Wilson Waterworth

 

 

Per:

/s/ Stanley T. Crooke, M.D., Ph.D.

 

 

 

 

Toby Wilson Waterworth

 

Stanley T. Crooke, M.D., Ph.D.

Director

 

Chief Executive Officer

 

27

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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.

“Agreement” means this document including any and all schedules, appendices and
other addendum to it as may be added and/or amended from time to time in
accordance with the provisions of this document.

“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.

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 in any formulation
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

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OBTAIN A PROTECTIVE ORDER REQUIRING THAT THE CONFIDENTIAL INFORMATION AND
DOCUMENTS THAT 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 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

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

“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 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
PRODUCT IN QUESTION AND TAKING INTO ACCOUNT THE PATENT AND OTHER PROPRIETARY
POSITION OF THE PRODUCT.  PROMPTLY FOLLOWING THE MEETING WITH THE FDA TO DISCUSS
THE REGISTRATION STRATEGY FOR A POUCHITIS INDICATION, ATLANTIC AND ISIS WILL
AGREE ON THE DEVELOPMENT TIMELINE TO BE INCLUDED IN APPENDIX 5. ATLANTIC’S
MEETING OF SUCH DEVELOPMENT TIMELINE IN APPENDIX 5 AND ISIS’ PROVISION OF THE
CANDIDATE POOL TO ATLANTIC IN ACCORDANCE WITH THE WORK PLAN WILL BE DEEMED TO BE
EXAMPLES OF USING COMMERCIALLY REASONABLE EFFORTS; PROVIDED, HOWEVER, THAT A
FAILURE TO MEET SUCH DEVELOPMENT TIMELINE WILL NOT BE DISPOSITIVE OF A FAILURE
TO USE COMMERCIALLY REASONABLE EFFORTS.

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

“CANDIDATE POOL” HAS THE MEANING SET FORTH IN SECTION 4.1.1.

“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 IN THE COURSE OF PERFORMING THIS 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.

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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;

(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 and each of the Second
Generation ICAM-1 Products, from the first date that each respective Product was
approved for commercialization by a Regulatory Authority.  For purposes of
clarity, the Net Sales for any Second Generation ICAM-1 Products will not be
taken into consideration when calculating Cumulative Net Sales for Alicaforsen
Products, and vice versa.

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

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

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

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

“DMF” has the meaning set forth in Section 3.6.1.

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

“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 Core Technology
Patents, (D) Second Generation ICAM-1 Product-Specific Patents, (E) Isis Data,
(F) Isis Manufacturing Know How, and (G) Second Generation Isis Data.  For
clarity, Excluded Isis IP include 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, Second Generation
ICAM-1 Product-Specific Patents and Isis Manufacturing Know How), (ii) RNAi
technologies, (iii) microRNA technologies, and (iv) chemical modifications and
motifs other than Isis MOE Gapmer Chemistry, 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 a Product by Atlantic, its
Affiliates or a sublicensee to a Third Party in a particular country after
Regulatory Approval has been obtained.

“[***]” 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

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*** CONFIDENTIAL TREATMENT REQUESTED

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or Second Generation ICAM-1 Products, but excluding always the Alicaforsen
Patents, the Second Generation ICAM-1 Product-Specific 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.

“[***]” means a formulation and excipient system and technologies that delivers
a drug compound into the human body by [***] directly into the [***] to achieve
a local or systemic therapeutic effect.

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

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

“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 Core Technology Patents” means Patents Controlled by Isis on the Effective
Date that are necessary for the development and commercialization of the
Product, but does not include (A) Alicaforsen Patents, (B) ICAM-1 Specific
Patents, (C) Second Generation ICAM-1 Product-Specific Patents, or (D) Patents
Controlled by Isis that claim, and only to the extent that they claim, Excluded
Isis IP.

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

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

 “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
[***].

“Manufacturing Agreement” has the meaning set forth in Section 3.6.1.

“MOE Gapmer” means a single stranded antisense Phosphorothioate oligonucleotide
of 15-30 nucleotides wherein all of the backbone linkages are modified by adding
a sulfur at the non-bridging oxygen (Phosphorothioate) and a stretch of at least
10 consecutive nucleotides remain unmodified (deoxy sugars) and the remaining
nucleotides contain an O’ – methyl O’ – ethyl substitution at the 2’ position.

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*** CONFIDENTIAL TREATMENT REQUESTED

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“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.

“Net Sales” means the gross invoiced price charged by Atlantic or its Affiliates
or sublicensees, as appropriate, for the sale of a 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 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 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 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 PRODUCT BY ATLANTIC OR ONE OF ITS AFFILIATES TO ANOTHER
AFFILIATE SHALL NOT BE CONSIDERED A SALE.  UPON THE SALE OR OTHER DISPOSAL OF
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 PRODUCT IN THE COUNTRY IN WHICH SUCH SALE OR OTHER
DISPOSAL OCCURRED WHEN SUCH PRODUCT IS SOLD ALONE AND NOT WITH OTHER PRODUCTS.
DISPOSAL OF PRODUCT FOR OR USE OF PRODUCT IN CLINICAL TRIALS OR AS FREE SAMPLES
SHALL NOT BE DEEMED A SALE UNDER THIS SECTION.  SUCH AMOUNTS SHALL BE DETERMINED
FROM THE BOOKS AND RECORDS OF ATLANTIC MAINTAINED IN ACCORDANCE WITH IFRS,
CONSISTENTLY APPLIED.

WHERE PRODUCT CONTAINS ALICAFORSEN API OR A SECOND GENERATION ICAM-1 ASO DRUG
CANDIDATE 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 Product in the country in which such sale or other
disposal occurred when such Product is sold alone and not as a Combination
Product; Y is the sum of the

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average sales price during the applicable reporting period generally achieved in
that country, when sold alone, by each product (including the 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 Product within the
Combination Product.

 “Notice” has the meaning set forth in Section 4.1.2.

“[***]” means a formulation and excipient system and technologies to deliver a
drug compound to the [***] to achieve a local or 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 a Product in
humans (first-in-humans study).

“Pivotal Quality Clinical Trial” means a human clinical trial of a 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.

“Positive Pouchitis Clinical Trial” means a clinical study of 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).

“Product” means (i) an Alicaforsen Product and, (ii) at such time as Isis grants
to Atlantic the licenses in Section 4.1.3 of the Agreement, a Second Generation
ICAM-1 Product, or (iii) both, which Atlantic or its Affiliates are developing
or commercializing under this Agreement or that is being developed or
commercialized under a Sublicense.

“Quality Standard” means, with respect to research, development, manufacture or
commercialization of the Candidate Pool, the Second Generation ICAM-1 ASO Drug
Candidate or a 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.

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“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 the 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 the 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.

 “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.

“Second Generation Development Plan” has the meaning set forth in Section 4.1.2.

“Second Generation ICAM-1 ASO Drug Candidate” means a MOE Gapmer targeted to
ICAM-1 that is selected by Atlantic under Section 4.1.2 of the Agreement.

“Second Generation ICAM-1 Products” means pharmaceutical preparation(s)
comprising the Second Generation ICAM-1 ASO Drug Candidate.

“Second Generation ICAM-1 Product-Specific Patents” means any Patent that is
Controlled by Isis on, before or after Atlantic makes its election under Section
4.1.2 of this Agreement, that (i) claims the specific composition of matter of a
Second Generation ICAM-1 ASO Drug Candidate, or (ii) methods of using such
Second Generation ICAM-1 ASO Drug Candidate as a therapeutic.

“Second Generation ICAM-1 Research Program” has the meaning set forth in Section
4.1.1.

“Second Generation Isis Data” has the meaning set forth in Section 4.1.4.

“SSEA Execution Date” has the meaning set forth in Section 6.1.1.

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

 “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 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
6.1.1.

“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 Product (be it Alicaforsen API or Second
Generation ICAM-1 ASO Candidate Drug) as opposed to its process of manufacture,
use or method of treatment.

“Work Plan” has the meaning set forth in Section 4.1.1.

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APPENDIX 2

ALICAFORSEN PATENTS

[***]

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APPENDIX 3

ICAM-1 SPECIFIC PATENTS

[***]

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APPENDIX 4

ISIS CORE TECHNOLOGY PATENTS

[***]

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*** CONFIDENTIAL TREATMENT REQUESTED

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APPENDIX 5

DEVELOPMENT TIMELINE

[***]

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*** CONFIDENTIAL TREATMENT REQUESTED

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APPENDIX 6

ATLANTIC EQUITY SECURITIES CAPITALIZATION TABLE

[***]

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*** CONFIDENTIAL TREATMENT REQUESTED

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