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CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. §§ 200.80(b)4, AND 240.24

Exhibit 10.54

SECURITY AGREEMENT

        THIS SECURITY AGREEMENT (this "Agreement") is made and entered into as
of this 21 day of December, 2004 by and between ISIS PHARMACEUTICALS, INC., a
subsisting corporation under the laws of the State of Delaware ("ISIS"), and
DRUG ROYALTY USA, INC., a subsisting corporation under the laws of the State of
Nevada ("DRC").

RECITALS:

A.ISIS and DRC are parties to the Sale and Assignment Agreement.

B.ISIS has covenanted pursuant to the terms of the Sale and Assignment Agreement
to enter into this Agreement, under which ISIS grants to DRC a first priority
security interest in and to the Collateral as general and continuing security
for the due performance and payment of all of ISIS' obligations to DRC under the
Sale and Assignment Agreement.

        NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, ISIS covenants, acknowledges, represents and
warrants to and in favor of DRC as follows:

        SECTION 1.    Definitions.    

        For purposes of this Agreement, capitalized terms used herein shall have
the meanings set forth in Schedule 1 hereto.

        SECTION 2.    Grant of Security.    

        ISIS hereby grants to DRC a continuing security interest in and lien on
all right, title and interest of ISIS in and to the following personal property,
whether now or hereinafter existing, whether tangible or intangible and wherever
the same may be located (collectively, the "Collateral"):

        (a)   the Patent Collateral;

        (b)   the License Agreement, including, without limitation, (i) all
rights of ISIS to receive moneys due or to become due under or pursuant to the
License Agreement, (ii) all rights of ISIS to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the License Agreement, (iii) all
claims of ISIS for damages arising out of any breach of or default under the
License Agreement, and (iv) all rights of ISIS to terminate, amend, supplement,
modify or exercise rights or options under the License Agreement, to perform
thereunder and to compel performance and otherwise exercise all remedies
thereunder;

        (c)   if any court or other tribunal of competent jurisdiction
determines that the Assigned Rights or any of the payments with respect thereto
are property of ISIS or its bankruptcy estate, the Assigned Rights; and

        (d)   all proceeds, products, royalties, payments, property and license
fees of or from any and all of the foregoing collateral (excluding, for greater
certainty, the Royalty Interest unless paragraph (c) above applies) and, to the
extent not otherwise included, all payments under insurance (whether or not DRC
is the loss payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the foregoing
Collateral, excluding (i) all proceeds and other consideration arising under
Permitted Licenses of the Patent Collateral and (ii) the milestone payments
pursuant to Sections 3.1.1 and 3.1.2 of the License Agreement.

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        Subject to the terms and conditions of this Agreement, in no event shall
the granting of a security interest in the Collateral pursuant hereto be
construed to limit or otherwise restrict ISIS' ability to exploit (including
through granting Permitted Licenses) the Patents and the Licensed Patent Rights
for any purposes outside the Field.

        Each item of Collateral listed in this Section 2 that is defined in
Articles 8 or 9 of the UCC, shall have the meaning set forth in the UCC, it
being the intention of ISIS that the description of the Collateral set forth
above be construed to include the broadest possible range of assets, except for
assets expressly excluded as set forth in this Agreement.

        SECTION 3.    Security for Obligations.    

        This Agreement secures, and the Collateral charged by ISIS is collateral
security for, the prompt payment or performance in full when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including without limitation the payment of amounts that would become
due but for the operation of the automatic stay under Subsection 362(a) of the
Bankruptcy Code), of all Secured Obligations of ISIS.

        SECTION 4.    ISIS to Remain Liable.    

        Anything contained herein to the contrary notwithstanding, (a) ISIS
shall remain liable under any contracts, licenses and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by DRC of any of its rights hereunder shall not
release ISIS from any of its duties or obligations under the contracts, licenses
and agreements included in the Collateral, and (c) DRC shall not have any
obligation or liability under any contracts, licenses and agreements included in
the Collateral by reason of this Agreement, nor shall DRC be obligated to
perform any of the obligations or duties of ISIS thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.

        SECTION 5.    Representations and Warranties.    

        ISIS represents and warrants as follows:

        (a)   Ownership of Collateral.    Except as expressly permitted by the
Sale and Assignment Agreement and for the security interest created by this
Agreement, ISIS owns the Collateral free and clear of any lien. Except as
expressly permitted by the Sale and Assignment Agreement and such as may have
been filed in favor of DRC relating to this Agreement, no effective financing
statement or other instrument similar in effect covering all or any part of the
Collateral is on file in any filing or recording office.

        (b)   Office Locations; Type and Jurisdiction of Organization.    The
chief place of business, the chief executive office and the office where ISIS
keeps its records regarding the Collateral are, as of the date hereof, located
at the locations set forth on Schedule 5(b); ISIS' type of organization (i.e.
corporation, limited partnership, etc.), jurisdiction of organization and
organization number provided by the applicable government authority of the
jurisdiction of organization are listed on Schedule 5(b).

        (c)   Names.    ISIS (or any predecessor by merger or otherwise) has
not, within the four month period preceding the date hereof, had a different
name from the name listed on the signature pages hereof.

        (d)   Patent Collateral.

        (i)    a true and complete list of all patent applications and
registered patents comprising the Licensed Patent Rights is set forth in
Schedule 5(d)(i); and

        (ii)   the representations and warranties made by ISIS pursuant to
Subsection 2.1 (g) of the Sale and Assignment Agreement shall be deemed to be
incorporated herein by reference

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and form part of this Agreement with all references therein to Schedule "E"
changed to Schedule 5(d)(i) and all other applicable changes as the context
requires.

        (e)   Perfection.    ISIS intends for the security interests in the
Collateral granted to DRC hereunder to constitute valid security interests in
the Collateral, securing the payment of the Secured Obligations. Upon (i) the
filing of UCC financing statements naming ISIS as "debtor", naming DRC as
"secured party" and describing the Collateral in the filing offices with respect
to ISIS set forth on Schedule 5(e), and (ii) in the case of the Patent
Collateral, in addition to the filing of such UCC financing statements, the
filing of a grant of patent security interest, substantially in the form of
Exhibit I annexed hereto, with a national Patent Office anywhere in the world,
including but not limited to, the United States Patent and Trademark Office
(such Grant of Patent Security Interest being referred to herein as the
"Grant"), the security interests in the Collateral granted to DRC are intended
by ISIS to constitute perfected security interests therein prior to all other
liens and security interests. Without limiting the generality of the foregoing,
ISIS agrees that it shall not, and shall not assist or encourage any third party
to, challenge or contest the validity, attachment, perfection or priority of the
security interests in the Collateral granted to DRC hereunder.

        SECTION 6.    Further Assurances.    

        (a)   Generally.    ISIS agrees that from time to time, at the expense
of ISIS, ISIS will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or
that DRC may request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable DRC to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, ISIS will: (i) (A) execute and
file such financing or continuation statements, or amendments thereto,
(B) execute and deliver, and cause to be executed and delivered, agreements
establishing that DRC has control of specified items of Collateral and
(C) deliver such other instruments or notices, in each case, as may be necessary
or desirable, or as DRC may request, in order to perfect and preserve the
security interests granted or purported to be granted hereby, (ii) furnish to
DRC from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as DRC may reasonably request, all in reasonable detail, (iii) at
DRC's request, appear in and defend any action or proceeding that may affect
ISIS' title to or DRC's security interest in all or any part of the Collateral,
and (iv) use commercially reasonable efforts to obtain any necessary consents of
third parties to the assignment and perfection of a security interest to DRC
with respect to any Collateral. ISIS hereby authorizes DRC to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of ISIS. ISIS agrees that a
carbon, photographic or other reproduction of this Agreement or of a financing
statement signed by ISIS shall be sufficient as a financing statement and may be
filed as a financing statement in any and all jurisdictions.

        (b)   Patent Collateral.    For the avoidance of doubt, if ISIS shall
hereafter obtain rights to any reissue, re-examination, division, continuation,
renewal, extension, continuation-in-part or foreign counterpart of any Patent or
any improvement of any Patent then in any such case, the provisions of this
Agreement shall automatically apply thereto.

        SECTION 7.    Certain Covenants of ISIS.    

        ISIS shall:

        (a)   not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;

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        (b)   notify DRC of any change in its name, identity or corporate
structure within fifteen (15) days of such change;

        (c)   give DRC thirty (30) days' prior written notice of any change in
its chief place of business, chief executive office or residence or the office
where ISIS keeps its records regarding the Collateral or a reincorporation,
reorganization or other action that results in a change of the jurisdiction of
organization of ISIS; and

        (d)   pay promptly when due all taxes, assessments and governmental
charges or levies imposed upon, and all claims against, the Collateral, except
to the extent the validity thereof is being contested in good faith; provided
that ISIS shall in any event pay such taxes, assessments, charges, levies or
claims not later than five (5) days prior to the date of any proposed sale under
any judgment, writ or warrant of attachment entered or filed against ISIS or any
of the Collateral as a result of the failure to make such payment.

        SECTION 8.    Special Covenants With Respect to the Collateral.    

        (a)   ISIS shall:

        (i)    diligently keep reasonable records respecting the Collateral and
at all times keep at least one complete set of its records concerning such
Collateral at its chief executive office or principal place of business; and

        (ii)   use best efforts so as not to permit the inclusion in any
contract to which it hereafter becomes a party of any provision that could or
might in any way impair or prevent the creation of a security interest in, or
the assignment of, ISIS' rights and interests in any property included within
the definition of Collateral, excluding Permitted Licenses of the Patent
Collateral so long as such licenses do not in any way impair the security
interest created by this Agreement or DRC's rights in the Collateral in the
Field.

        (b)   Except as otherwise provided in this Section 8 and the Sale and
Assignment Agreement (and subject to the payment of Royalties to [***] pursuant
to the Eyetech Consent), ISIS shall continue to collect, at its own expense, all
amounts due or to become due to ISIS in respect of the Collateral or any portion
thereof. In connection with such collections, ISIS may take (and, after the
occurrence and during the continuance of any Event of Default at DRC's
reasonable direction, shall take) such action as ISIS or DRC may deem reasonably
necessary or advisable to enforce collection of such amounts; provided, DRC
shall have the right at any time, upon the occurrence and during the
continuation of an Event of Default and upon written notice to ISIS of its
intention to do so, to notify the obligors with respect to any such amounts of
the existence of the security interest created hereby and to direct such
obligors to make payment of all such amounts directly to DRC, and, upon such
notification and at the expense of ISIS, to enforce collection of any such
amounts and to adjust, settle or compromise the amount or payment thereof, in
the same manner and to the same extent as ISIS might have done. After receipt by
ISIS of the notice from DRC referred to in the proviso to the preceding sentence
and during the continuation of any Event of Default, (i) all amounts and
proceeds (including checks and other instruments) received by ISIS in respect of
amounts due to ISIS in respect of the Collateral or any portion thereof shall be
received in trust for the benefit of DRC hereunder, shall be segregated from
other funds of ISIS and shall be forthwith paid over or delivered to DRC in the
same form as so received (with any necessary endorsement) to be held as cash
Collateral and applied as provided by Section 12 hereof, and (ii) ISIS shall not
adjust, settle or compromise the amount or payment of any such amount or release
wholly or partly any obligor with respect thereto or allow any credit or
discount thereon.

        (c)   the covenants made by ISIS pursuant to Sections 3.1, 3.2 and 3.5
of the Sale and Assignment Agreement shall be deemed to be incorporated herein
by reference and form part of this Agreement with all applicable changes as the
context requires.

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        (d)   ISIS shall concurrently with the execution and delivery of this
Agreement, execute and deliver to DRC five (5) originals of a Special Power of
Attorney in the form of Exhibit II annexed hereto for execution of an assignment
of the Collateral to DRC, or the implementation of the sale or other disposition
of the Collateral pursuant to DRC's exercise of the rights and remedies granted
hereunder; provided, however, DRC agrees that it will not exercise its rights
under such Special Power of Attorney unless an Event of Default has occurred and
is continuing.

        (e)   If ISIS grants a Permitted License of the Patent Collateral, DRC
shall enter into a non-disturbance agreement or other similar arrangement, at
ISIS' request and expense, with ISIS and any licensee of any Patent Collateral
outside of the Field under a Permitted License in form and substance reasonably
satisfactory to DRC pursuant to which (i) DRC shall agree not to disturb or
interfere with such licensee's rights under its license agreement with ISIS so
long as such licensee is not in default thereunder, and (ii) such licensee shall
acknowledge and agree that the Patent Collateral licensed to it is subject to
the security interest created in favor of DRC and the other terms of this
Agreement and the enforcement by DRC of such rights will not constitute a
disturbance or interference of the licensee's rights under its Permitted
License.

        (f)    ISIS further agrees that a breach of any of the covenants
contained in this Section will cause irreparable injury to DRC, that DRC has no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section shall be specifically
enforceable against ISIS, and ISIS hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except for
a defense that no default has occurred giving rise to the Secured Obligations
becoming due and payable prior to their stated maturities.

        SECTION 9.    DRC Appointed Attorney-in-Fact.    

        ISIS hereby irrevocably appoints DRC, or any person or agent as DRC may
designate, as ISIS' attorney-in-fact, with full authority in the place and stead
of ISIS and in the name of ISIS, DRC or otherwise, from time to time in DRC's
discretion to take any action and to execute any instrument that DRC may in its
sole discretion deem necessary or advisable to accomplish the following:

        (a)   upon the occurrence and during the continuance of an Event of
Default, to ask for, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;

        (b)   upon the occurrence and during the continuance of an Event of
Default, to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (a) above;

        (c)   upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any proceedings that
DRC may in its sole discretion deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of DRC with respect to
any of the Collateral;

        (d)   to pay or discharge taxes or liens levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by DRC in its sole
discretion, any such payments made by DRC to become obligations of ISIS to DRC,
due and payable immediately without demand;

        (e)   upon the occurrence and during the continuance of an Event of
Default, to sign and endorse any invoices, drafts against debtors, assignments,
verifications, notices and other documents relating to the Collateral; and

        (f)    upon and at any time after the occurrence and during the
continuance of an Event of Default, to prepare, file and sign ISIS' name on an
assignment document in the form of Exhibit III annexed hereto (including without
limitation Schedule A thereto) with such modifications thereto

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as DRC may in its sole discretion deem necessary or desirable to transfer
ownership of the Collateral to DRC or an assignee or transferee of DRC.

        SECTION 10.    Standard of Care.    

        The powers conferred on DRC hereunder are solely to protect its interest
in the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the exercise of reasonable care in the accounting for moneys
actually received by DRC hereunder, DRC shall have no duty as to any Collateral
or as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral. DRC shall be deemed to
have exercised reasonable care in the custody and preservation of Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which DRC accords its own property.

        SECTION 11.    Remedies Upon Event of Default.    

        (a)   If, and only if, any Event of Default shall have occurred and be
continuing, DRC may in good faith exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein, under the Sale
and Assignment Agreement or otherwise available to it, all the rights and
remedies of a secured party on default under the UCC (whether or not the UCC
applies to the Collateral), in all relevant jurisdictions, and also may:

        (i)    require ISIS to, and ISIS hereby agrees that it will at its
expense and upon request of DRC forthwith, assemble all or part of the
Collateral as directed by DRC and make it available to DRC at a place to be
designated by DRC that is reasonably convenient to both parties, and

        (ii)   personally or by agents or attorneys, immediately take possession
of the Collateral or any part thereof, from ISIS or any other person who has
possession of any part thereof, with or without notice or process of law, and
for that purpose may enter upon ISIS' premises where any of the Collateral is
located and remove same.

        (b)   On Closing, DRC shall grant to ISIS a sole and exclusive,
royalty-free, perpetual, right and license, with the right to sublicense,
world-wide, to exploit the Patent Collateral outside the Field in the form of
Exhibit IV annexed hereto, such grant to take effect upon any assignment to DRC
or a transferee or assignee of DRC of any rights, title and interests in and to
the Patent Collateral pursuant to the provisions hereof.

        (c)   Anything contained herein to the contrary notwithstanding (subject
to Subsection (d)), upon the occurrence and during the continuation of an Event
of Default, DRC shall have the right (but not the obligation) to bring suit, in
the name of ISIS, DRC or otherwise, to enforce any Patent Collateral, in which
event ISIS shall, at the request of DRC, do any and all lawful acts and execute
any and all documents required by DRC in aid of such enforcement and ISIS shall
promptly, upon demand, reimburse and indemnify DRC as provided in the Sale and
Assignment Agreement and Section 13 hereof, as applicable, in connection with
the exercise of its rights under this Section. Without limiting the generality
of the foregoing, upon the occurrence and during the continuation of an Event of
Default, DRC and any assignee or transferee of the Patent Collateral shall have
the right to grant license(s) to any or all of the Patent Collateral within the
Field. If DRC or any assignee or transferee of the Patent Collateral grants any
such license(s), ISIS shall enter into a non-disturbance agreement or other
similar arrangement, at DRC's or such assignee's or transferee's request and
expense, with DRC or such assignee or transferee and any licensee of any or all
of the Patent Collateral within the Field in form and substance reasonably
satisfactory to DRC or such assignee or transferee pursuant to which ISIS shall
agree not to disturb or interfere with such licensee's rights under its license
agreement with DRC or such assignee or transferee so long as such licensee is
not in default thereunder.

        (d)   Notwithstanding any other term or condition of this Agreement, DRC
acknowledges and agrees that if an Event of Default qualifies as a Special Event
of Default, DRC shall only exercise

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its rights under this Agreement if ISIS fails to pay to DRC the Liquidated
Damages Amount in accordance with Article 5.A of the Sale and Assignment
Agreement, including without limitation the amount under Subsection 5.A.2(b) or
(c), as applicable.

        SECTION 12.    Application of Proceeds.    

        Except as expressly provided elsewhere in this Agreement, all proceeds
received by DRC in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral (collectively, "Proceeds") shall be
applied to satisfy (to the extent of the net proceeds received by DRC) such item
or part of the Secured Obligations (including, but not limited to any Damages)
as DRC may designate (with the right to reapply such proceeds to such other
items or part of the Secured Obligations). Once the Proceeds have satisfied the
Secured Obligations, DRC will return to ISIS any Proceeds in excess of the
amount required to satisfy the Secured Obligations, whether such excess Proceeds
are then held or later received by DRC.

        SECTION 13.    Reimbursement of Expenses.    

        (a)   ISIS agrees to pay to DRC upon demand the amount of any and all
costs and expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, that DRC may incur in connection with (i) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (ii) the exercise or enforcement
of any of the rights of DRC hereunder, or (iii) the failure by ISIS to perform
or observe any of the provisions hereof.

        (b)   The obligations of ISIS in this Section 13 shall (i) survive the
termination of this Agreement and the discharge of ISIS' other obligations under
this Agreement and the Sale and Assignment Agreement.

        SECTION 14.    Calculation of Damages.    

        (a)   Calculation of Damages.    Whenever DRC exercises its rights under
Section 11 (an "Enforcement"), DRC will deliver to ISIS a reasonably detailed
statement of the basis for such Enforcement and DRC's commercially reasonable
calculation of its Damages (an "Enforcement Notice"). Within sixty (60) calendar
days after the delivery by DRC of an Enforcement Notice, ISIS may deliver to DRC
a written notice (a "Dispute Notice") of any objection to the calculation of
Damages contained therein, which Dispute Notice will contain a reasonably
detailed statement of the basis of such objection and ISIS' calculation of the
Damages. If a Dispute Notice is not delivered within such 60-calendar day
period, the calculations of Damages contained in the Enforcement Notice will
become final and binding upon the parties to this Agreement

        (b)   No Dispute.    If ISIS timely delivers a Dispute Notice to DRC,
DRC may deliver to ISIS a written response (the "Dispute Response") within
thirty (30) calendar days in which DRC will either agree with the calculation of
Damages contained in the Dispute Notice or dispute such calculation. If the
Dispute Response is not delivered within such 30-calendar day period, the
calculation of Damages contained in the Dispute Notice will become final and
binding upon the parties to this Agreement. In such instance, or in the event
DRC delivers a Dispute Response in which DRC agrees with the calculation of
Damages contained in the Dispute Notice, then the calculation of Damages
contained in the Dispute Notice will become final and binding upon the parties
to this Agreement.

        (c)   Dispute.    In the event that DRC and ISIS are unable to resolve
all disagreements relating to a Dispute Notice and Dispute Response within
twenty (20) calendar days following delivery of the Dispute Response, then
either party shall be entitled to submit such dispute to a court of competent
jurisdiction for resolution.

        (d)   Enforcement Not Affected.    For avoidance of doubt, the
provisions of this Section 14 are intended to govern the determination of
Damages but shall in no way delay, limit, restrict,

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prejudice, alter or affect DRC's rights and remedies including without
limitation its right to enforce in good faith the security interest and lien
granted herein and realize in a commercially reasonable manner upon all or any
part of the Collateral.

        SECTION 15.    Continuing Security Interest; Termination and
Release.    

        (a)   This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the payment in
full of the Secured Obligations, (ii) be binding upon ISIS and its respective
successors and assigns, and (iii) inure, together with the rights and remedies
of DRC hereunder, to the benefit of DRC and its successors, transferees and
assigns.

        (b)   As contemplated by Subsection 5.A.2(a) of the Sale and Assignment
Agreement and/or upon written confirmation by DRC to ISIS of the payment and
performance in full of all Secured Obligations, the security interest granted
hereby shall terminate and all rights to the Collateral shall revert to ISIS.
Upon any such termination DRC will, at ISIS' expense, execute and deliver to
ISIS such documents as ISIS shall reasonably request to evidence such
termination.

        SECTION 16.    Amendments; Etc.    

        No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by ISIS therefrom, shall in any
event be effective unless the same shall be in writing and signed by DRC and, in
the case of any such amendment or modification, by ISIS. Any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given.

        SECTION 17.    Notices.    

        All notices, consents, waivers and other communications hereunder shall
be in writing and shall be delivered in person, sent by overnight courier,
facsimile transmission or posted by registered or certified mail, return receipt
requested, with postage prepaid, addressed to the address of DRC or ISIS, as
applicable, provided in Section 7.3 of the Sale and Assignment Agreement or to
such other address or addresses as DRC or ISIS may from time to time designate
by notice as provided herein. Any such notice shall be deemed given when
actually received when so delivered personally or by overnight courier or if
mailed, other than during a period of general discontinuance or disruption of
postal service due to strike, lockout or otherwise, on the fifth (5th) day after
its postmarked date thereof or if sent by facsimile transmission on the date
sent if such day is a business day or the next following business day if such
day is not a business day. For the purposes of this Agreement, "business day"
means any day other than Saturday, Sunday or a statutory or civic holiday
observed in Toronto, Ontario or Carlsbad, California.

        SECTION 18.    Failure or Indulgence Not Waiver; Remedies
Cumulative.    

        No failure or delay on the part of DRC in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.

        SECTION 19.    Severability.    

        If a court deems any part of this Agreement unenforceable, the parties
agree that only the offending part shall be stricken and that the remaining
parts shall be unaffected.

        SECTION 20.    Headings.    

        Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.

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        SECTION 21.    Governing Law; Terms; Rules of Construction.    

        THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES THAT
THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein or in the Sale
and Assignment Agreement, terms used in Articles 8 and 9 of the UCC are used
herein as therein defined.

        SECTION 22.    Consent to Jurisdiction and Service of Process.    

        ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ISIS ARISING OUT OF OR RELATING
TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW
YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, ISIS, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF
ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ISIS AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 16; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE
(III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER ISIS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; (V) AGREES THAT DRC RETAINS THE RIGHT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ISIS IN THE
COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS OF THIS
SECTION 21 RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE
TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1402 OR OTHERWISE.

9

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        SECTION 23.    Waiver of Jury Trial.    

        ISIS AND DRC HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. The scope of this waiver is intended to be all encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including without limitation contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims.
ISIS and DRC acknowledge that this waiver is a material inducement for ISIS and
DRC to enter into a business relationship, that ISIS and DRC have already relied
on this waiver in entering into this Agreement and that each will continue to
rely on this waiver in their related future dealings. ISIS and DRC further
warrant and represent that each has reviewed this waiver with its legal counsel,
and that each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 22 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.

        SECTION 24.    Counterparts.    

        This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original instrument, but all of which together shall
constitute one and the same instrument, and shall become binding when one or
more counterparts have been signed by each party hereto and delivered to each
other party hereto.

        SECTION 25.    Successors and Assigns.    

        This Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of each of ISIS and DRC. This Agreement may not
be assigned in whole or in part by either party without the prior written
consent of the other party; provided, however that (i) DRC may assign this
Agreement in whole or in part by way of [***] and/or to [***] and/or as part of
a sale of a material part of DRC whether by way of reorganization or otherwise,
without the consent of ISIS provided DRC gives prompt written notice of such
assignment to ISIS and the assignee (or in the case of any financial institution
or other lender, any purchaser from such financial institution or other lender)
agrees in writing to be bound hereby and (ii) ISIS may assign this Agreement in
connection with the sale of all or substantially all of its business (whether by
sale of assets, stock or merger) without the consent of DRC provided ISIS gives
prompt written notice of such assignment to DRC and the assignee agrees in
writing to be bound hereby.

10

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        IN WITNESS WHEREOF, ISIS and DRC have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first written above.

  ISIS PHARMACEUTICALS INC.
 
By:
/s/  B. LYNNE PARSHALL      

--------------------------------------------------------------------------------

    Name:   B. Lynne Parshall     Title:   Executive Vice President, CFO and
Director
 
DRUG ROYALTY USA, INC.
 
By:
/s/  BEHZAD KHOSROWSHAHI      

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    Name:   Behzad Khosrowshahi     Title:   President

11

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SCHEDULE 1 TO
SECURITY AGREEMENT

DEFINITIONS

        Capitalized terms used in this Agreement and not defined in this
Schedule 1 shall have the meanings attributed thereto in the Sale and Assignment
Agreement.

        "Agreement" has the meaning set forth on the cover page of this
Agreement.

        "Collateral" has the meaning set forth in Section 2 of this Agreement.

        "DRC" has the meaning set forth on the cover page of this Agreement.

        "Grant" has the meaning set forth in Subsection 5(f) of this Agreement.

        "ISIS" has the meaning set forth on the cover page of this Agreement.

        "License Agreement" means that certain License Agreement effective as of
December 31, 2001 pursuant to which ISIS granted to Eyetech a non-exclusive
license under the Licensed Patent Rights to make, have made, use and sell EYE001
(for greater certainty, the Product) world-wide, with the right to sublicense,
as such agreement relates to the ISIS Rights but not the Assigned Rights and as
such agreement may be amended, restated, supplemented or otherwise modified from
time to time.

        "Major Market" means [***], any [***] country, [***] or the [***].

        "obligations" means indebtedness, obligations, promises, covenants,
responsibilities, duties and liabilities (actual or contingent, direct or
indirect, matured or unmatured, now existing or arising hereafter), whether
arising by agreement or statute, at law, in equity or otherwise, and "obliged",
"obligation" and "obligated" shall have corresponding meanings.

        "Patent Collateral" means all rights, title and interest (including
rights acquired pursuant to a license or otherwise) in and to the Patents,
including, without limitation, the [***] Patents, as the same may be amended
from time to time, all rights corresponding thereto (including, without
limitation, ISIS' rights under the [***] License and the right, exercisable only
upon the occurrence and during the continuation of an Event of Default, to sue
for past, present and future infringements in the name of ISIS or in the name of
DRC), and all re-issues, re-examinations, divisions, continuations, renewals,
extensions, continuations-in-part and foreign counterparts thereof.

        "proceeds" includes whatever is receivable or received when Collateral
or proceeds are sold, exchanged, collected or otherwise disposed of, whether
such disposition is voluntary or involuntary.

        "Sale and Assignment Agreement" means the Agreement for Sale and
Assignment of Rights between ISIS and DRC dated as of December 21, 2004, as such
agreement may be amended, restated, supplemented or otherwise modified from time
to time, pursuant to which ISIS has agreed to sell, assign, transfer, set-over
and convey to DRC the Assigned Rights in consideration of the payment by DRC to
ISIS of the Purchase Price.

        "Secured Obligations" means all obligations and liabilities of every
nature of ISIS now or hereafter existing under or arising out of or in
connection with the Sale and Assignment Agreement, whether for damages, interest
(including without limitation interest that, but for the filing of a petition in
bankruptcy with respect to ISIS, would accrue on such obligations, whether or
not a claim is allowed against ISIS for such interest in the related bankruptcy
proceeding), reimbursement of fees, expenses, indemnities or otherwise, whether
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated
or unliquidated, whether or not jointly owed with others, and whether or not
from time to time decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or

12

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recovered directly or indirectly from DRC as a preference, fraudulent transfer
or otherwise, and all obligations of every nature of ISIS now or hereafter
existing under this Agreement.

        "UCC" means Uniform Commercial Code, as it exists on the date of this
Agreement or as it may hereafter be amended, in the State of New York.

13

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SCHEDULE 5(b)
TO
SECURITY AGREEMENT

Office Locations, Type and Jurisdiction of Organization

Name

--------------------------------------------------------------------------------

  Type of
Organization

--------------------------------------------------------------------------------

  Office Locations

--------------------------------------------------------------------------------

  Jurisdiction
of Organization

--------------------------------------------------------------------------------

  Organization
Number

--------------------------------------------------------------------------------

ISIS Pharmaceuticals Inc.   Corporation       Delaware    

14

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SCHEDULE 5(d)(i)
TO
SECURITY AGREEMENT

[***]

15

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SCHEDULE 5(e)
TO
SECURITY AGREEMENT

Filing Offices

Grantor

--------------------------------------------------------------------------------

  Filing Offices

--------------------------------------------------------------------------------

ISIS Pharmaceuticals Inc.   (a) Secretary of State for the State of Delaware    
(b) Secretary of State for the State of California

16

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EXHIBIT I TO
SECURITY AGREEMENT

[FORM OF GRANT OF PATENT SECURITY INTEREST]

GRANT OF PATENT SECURITY INTEREST

WHEREAS, ISIS PHARMACEUTICALS, INC., a Delaware corporation (the "Grantor"), has
entered into a security agreement dated December 21, 2004, (said security
agreement, as it may hereinafter be amended, restated, supplemented or otherwise
modified from time to time, being the "Security Agreement") between the Grantor
and DRC Royalty USA Inc., a Nevada Corporation ("DRC") pursuant which the
Grantor has granted to DRC certain security as general and continuing security
for the due payment and performance of all of the Grantor's obligations to DRC
under that certain sale and assignment agreement between the Grantor and DRC
dated December 21, 2004. All capitalized terms not defined herein have the
meanings attributed thereto in the Security Agreement.

        NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Security Agreement, the Grantor hereby grants to DRC a security interest
in all of the Grantor's right, title and interest in and to the following, in
each case whether now or hereafter existing or in which the Grantor now has or
hereafter acquires an interest and wherever the same may be located (the "Patent
Collateral"):

(a)all right, title and interest (including rights acquired pursuant to a
license or otherwise) in and to the patents listed on Schedule A-1 attached
hereto ("Patents"), as the same may be amended from time to time, all rights
corresponding thereto (including, without limitation, Debtor's rights under the
[***] license and the right, exercisable only upon the occurrence and during the
continuation of an event of default, to sue for past, present and future
infringements in the name of Debtor or in the name of Secured Party), and all
re-issues, re-examinations, divisions, continuations, renewals, extensions,
continuations-in-part and foreign counterparts thereof; and

(b)all proceeds, products, royalties, payments, property and license fees of or
from any and all of the foregoing collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is the loss
payee thereof) or any indemnity, warranty or guaranty, payable by reason of loss
or damage to or otherwise with respect to any of the foregoing collateral,
excluding (i) all proceeds and other consideration arising under permitted
licenses of the Patent Collateral and (ii) the milestone payments pursuant to
Sections 3.1.1 and 3.1.2 of the License Agreement.

        The Grantor does hereby further acknowledge and affirm that the rights
and remedies of DRC with respect to the security interest in the Patent
Collateral granted hereby are more fully set forth in the Security Agreement
dated December 21, 2004 between the Grantor and DRC, the terms and provisions of
which are incorporated by reference herein as if fully set forth herein.

17

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        IN WITNESS WHEREOF, the Grantor has caused this Grant of Patent Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the 21st day of December, 2004.

  ISIS PHARMACEUTICALS, INC.
 
By:
 
    

--------------------------------------------------------------------------------

Signature
 
 
 
    

--------------------------------------------------------------------------------

Name (printed)
 
 
 
    

--------------------------------------------------------------------------------

Title

18

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SCHEDULE A-1

[***]

19

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EXHIBIT II TO
SECURITY AGREEMENT

SPECIAL POWER OF ATTORNEY

STATE OF  

--------------------------------------------------------------------------------

    )                 ) ss.:     COUNTRY OF  

--------------------------------------------------------------------------------

    )      

KNOW ALL MEN BY THESE PRESENTS, that ISIS PHARMACEUTICALS, INC., a Delaware
corporation ("Grantor"), hereby appoints and constitutes DRUG ROYALTY USA, INC.,
a Nevada corporation ("DRC"), and each of its officers, or any person or agent
as DRC may direct, its true and lawful attorney, with full power of substitution
and with full power and authority in the place and stead of Grantor, and in the
name of Grantor, DRC or otherwise, from time to time in DRC's discretion to take
any action and to execute any instrument that DRC may, in its sole discretion,
deem necessary or advisable to accomplish the following:

(a)to ask for, demand, collect, sue for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the "Collateral" (as such term is defined in the security agreement
referred to below);

(b)to receive, endorse and collect any drafts or other instruments, documents
and chattel paper in connection with clause (a) above;

(c)to file any claims or take any action or institute any proceedings that DRC
may in its sole discretion deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce the rights of DRC with respect to any
of the Collateral;

(d)to pay or discharge taxes or liens levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by DRC in its sole discretion,
any such payments made by DRC to become obligations of ISIS to DRC, due and
payable immediately without demand;

(e)to sign and endorse any invoices, drafts against debtors, assignments,
verifications, notices and other documents relating to the Collateral; and

(f)to prepare, file and sign ISIS' name on an assignment document in the form of
Exhibit III annexed the security agreement referred to below (including without
limitation Schedule A thereto) with such modifications thereto as DRC may in its
sole discretion deem necessary or desirable to transfer ownership of the
Collateral to DRC or an assignee or transferee of DRC.

This Power of Attorney is made pursuant to a security agreement dated
December 21, 2004 between Grantor and DRC (the "Security Agreement") and is
subject to the terms and provisions thereof. This Power of Attorney, being
coupled with an interest, is irrevocable until all "Secured Obligations", as
such term is defined in the Security Agreement, are indefeasibly paid in full
and the Security Agreement is terminated in writing by DRC.

20

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Date: <*>

    ISIS PHARMACEUTICALS, INC.
 
 
By:
 

--------------------------------------------------------------------------------

        Name:         Title:

STATE OF  

--------------------------------------------------------------------------------

    )                 ) ss.:     COUNTRY OF  

--------------------------------------------------------------------------------

    )      

On this        day of                        , 2004, before me personally
came                        , to me known, who being duly sworn, did depose and
say, that he is the                        of ISIS PHARMACEUTICALS, INC., the
corporation described in and which executed the foregoing instrument.

 

--------------------------------------------------------------------------------

Notary Public

21

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EXHIBIT III TO
SECURITY AGREEMENT

ASSIGNMENT OF PATENTS

THIS ASSIGNMENT AGREEMENT ("Assignment") entered into this <*> day of <month*>,
<year*>. [NTD: to be executed only upon the occurrence and continuance of an
Event of Default]

B E T W E E N:

ISIS PHARMACEUTICALS, INC.
<insert address current as at date of execution*>

(hereinafter referred to as the "Assignor")

-and-

[DRUG ROYALTY USA, INC. or a transferee or assignee of DRUG
ROYALTY USA, INC.]
<insert address current as at date of execution*>

(hereinafter referred to as the "Assignee")

        WHEREAS, Assignor desires to assign, and Assignee desires to acquire,
Assignor's entire, right, title and interest in and to the (i) patent
applications; and (ii) patents, filed and/or issued on such dates, under such
application, serial or grant numbers, and in such countries as described in the
attached Schedule "A" (collectively the "Patents").

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties hereto agree as follows:

Assignor does hereby sell, assign and transfer to Assignee, Assignor's whole
right, title and interest to: (i) the Patents, any foreign applications or
issued patents corresponding thereto, any divisionals, continuations,
continuations-in-part, re-examinations, reissues, renewals and extensions
thereof, whether presently pending or filed in the future; and (ii) all causes
of action (either in law or equity) and the right to sue, counterclaim, and
recover for past, present and future infringement of the rights assigned to
Assignee; the same to be held and enjoyed by Assignee as fully and exclusively
as they would have been by the Assignor had this sale, assignment and transfer
not been made

Assignor further represents and agrees with Assignee, its successors and
assigns, that it will from time to time and at all times hereafter, upon every
reasonable request of Assignee, its successors and assigns, make, do and execute
or cause and procure to be made, done and executed all further acts, deeds or
assurances as may be reasonably required by Assignee, its successors and
assigns, for more effectually and completely vesting in Assignee, its successors
and assigns the Patents hereby assigned in accordance with the terms hereof.

This Assignment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original, and all of
which counterparts, taken together, shall constitute but one and the same
Assignment.

22

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IN WITNESS WHEREOF, the parties have executed and delivered this Assignment as
of the date first written above.

ISIS PHARMACEUTICALS, INC.   [DRUG ROYALTY USA,
INC./TRANSFEREE/ASSIGNEE]
By:
    

--------------------------------------------------------------------------------

 
By:
    

--------------------------------------------------------------------------------

  Name:     Name:   Title:     Title:

STATE OF  

--------------------------------------------------------------------------------

    )                 ) ss.:     COUNTRY OF  

--------------------------------------------------------------------------------

    )      

On this        day of                        ,             , before me
personally came                        , to me known, who being duly sworn, did
depose and say, that he is the                        of ISIS
PHARMACEUTICALS, INC., the corporation described in and which executed the
foregoing instrument.

 

--------------------------------------------------------------------------------

Notary Public

STATE OF  

--------------------------------------------------------------------------------

    )                 ) ss.:     COUNTRY OF  

--------------------------------------------------------------------------------

    )      

On this        day of                        ,             , before me
personally came                        , to me known, who being duly sworn, did
depose and say, that he is the                        of [DRUG ROYALTY
USA, INC./TRANSFEREE/ASSIGNEE], the corporation described in and which executed
the foregoing instrument.

 

--------------------------------------------------------------------------------

Notary Public

23

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SCHEDULE A
PATENTS

[***]

24

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QuickLinks

SECURITY AGREEMENT
SCHEDULE 1 TO SECURITY AGREEMENT
SCHEDULE 5(d)(i) TO SECURITY AGREEMENT
[FORM OF GRANT OF PATENT SECURITY INTEREST]
GRANT OF PATENT SECURITY INTEREST
ASSIGNMENT OF PATENTS
SCHEDULE A PATENTS