Exhibit 10.1


 


	
  CONFIDENTIAL TREATMENT
  REQUESTED

  	
   

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

  	
  EXECUTION
  VERSION

  



 


AMENDED
AND RESTATED LICENSE AGREEMENT


 


THIS AMENDED AND RESTATED LICENSE
AGREEMENT (“Agreement”) is made and entered into effective as
of July 2, 2008 (the “Amendment Effective Date”), by and between ONCOGENEX
TECHNOLOGIES INC., having offices at #400 – 1001 West Broadway, Vancouver, B.C.
V6H 4B1 (“OncoGenex”) and ISIS PHARMACEUTICALS, INC., having principal offices
at 1896 Rutherford Road, Carlsbad CA 92008-7208 (“Isis”). OncoGenex and Isis
each may be referred to herein individually as a “Party,” or collectively as
the “Parties.”


 


WHEREAS, the
Parties entered into a Collaboration and Co-Development Agreement dated
November 16, 2001 (the “Original Collaboration Agreement”) which collaboration
resulted in the development of OGX-011, a second generation antisense inhibitor
of Clusterin;


 


AND WHEREAS, the
Parties now wish for OncoGenex to proceed with unilateral development of
OGX-011 and Products and in this connection wish to enter into this Agreement
to amend and restate the Original Collaboration Agreement, as provided herein.


 


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 A.


 


ARTICLE 2

TERMINATION OF COLLABORATION


 


Section
2.1            Previous Collaboration. Pursuant
to the Original Collaboration Agreement, commencing November 16, 2001 the
Parties collaborated to jointly develop OGX-011 and the Products to the present
stage of development (the “Collaboration”). As of the Amendment Effective Date,
the Collaboration is terminated.


 


ARTICLE 3

CESSATION OF OPERATION OF COLLABORATION


 


Section
3.1            Dissolution of Operating Committee. Pursuant
to Article 3 of the Original Collaboration Agreement, the Parties
established an “Operating Committee” to oversee the Collaboration. As of the
Amendment Effective Date, the Operating Committee is hereby dissolved and the
Operating Committee will have no further responsibility, authority or function.


 






*Certain
information in this exhibit has been omitted as confidential, as indicated by
[***]. This information has been filed separately with the Commission.


 


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ARTICLE 4

LICENSE GRANT, TECHNOLOGY TRANSFER, DILIGENCE


 


Section
4.1            License
Grant.


 


4.1.1       Nonexclusive License. Subject to the terms and
conditions of this Agreement, Isis hereby grants to OncoGenex a worldwide,
nonexclusive license, with the right to grant sublicenses as set forth in
Section 4.1.2 below, under the Isis Core Technology, Isis Core Technology
Patents, Isis Manufacturing Technology and Isis Manufacturing Patents to
research, develop, make, have made, use, gain regulatory approval,
commercialize, sell, offer for sale, have sold, export and import OGX-011 and
Products for all uses.


 


4.1.2       Sublicenses. The licenses granted to OncoGenex under
this Article 4 are sublicensable only in connection with a license of
OGX-011 or a Product to any Affiliate of OncoGenex or to any Third Party, in
each case for the continued Development and Commercialization of OGX-011 or
such Product in accordance with the terms of this Agreement, provided that (i) such Affiliate or Third Party will
agree in writing to be bound by and subject to all applicable terms and
conditions of this Agreement in the same manner and to the same extent as
OncoGenex, and (ii) OncoGenex will remain responsible for the performance
of this Agreement and will cause such Affiliate or Third Party to comply with
the applicable terms and conditions of this Agreement. In addition to the
requirements and limitations set forth above, with respect to the Isis
Manufacturing Technology, OncoGenex will (a) name Isis as a third party
beneficiary with the right to directly enforce Article 7 (Confidentiality)
of this Agreement against such Affiliate or Third Party, (b) promptly
notify Isis in writing specifically identifying the Isis Manufacturing
Technology to be disclosed to such Third Party and identifying by name such
Third Party and (c) use appropriate precautions and include provisions in
such sublicense to protect the Isis Manufacturing Technology such that the
sublicensee will not use any Isis Manufacturing Technology to manufacture any
other ASOs for Third Parties and in any event OncoGenex will not provide to any
Third Party manufacturer any batch record transferred by Isis to OncoGenex
under this Agreement.


 


4.1.3       Follow On/Back-up Compounds. At OncoGenex’ request,
Isis and OncoGenex will negotiate in good faith a reasonable research plan and
corresponding budget, at the same FTE rate as set forth in the Original
Collaboration Agreement, to identify exclusively for OncoGenex additional MOE
Gapmers that modulate Clusterin (“Follow-on Compounds”). In such event and
after OncoGenex has paid Isis pursuant to such research plan, the definition of
“Product” under this Agreement shall include the Follow-on Compounds.


 


4.1.4       Improvements. To the
extent that Isis has the right to license an Improvement, the Parties will
negotiate in good faith regarding the use of any such Improvement to research,
develop, make, have made, use, gain regulatory approval, commercialize, sell,
offer for sale, have sold, export and import OGX-011 and Products for all uses.
If OncoGenex gives to Isis written notice of its desire to obtain a license to
an Improvement, the Parties shall negotiate in good faith and attempt to reach
mutual agreement upon a commercially reasonable agreement under which OncoGenex
obtains a license under such Improvement, and all patent and other intellectual
property rights therein and thereto, to research, develop, make, have made,
use, sell, offer for sale, have sold and import Products. The license will be
sublicensable in accordance


 


2

















 


with Section 4.1.2.
If requested by OncoGenex, Isis will give to OncoGenex a written description of
such Improvement in reasonably specific detail, together with such data and
information as reasonably requested by OncoGenex.


 


4.1.5       Exclusivity. Subject
to Section 12.2.2, neither Isis nor any of its Affiliates will
(a) engage, on behalf of itself or for any other party, in the research,
development, manufacture, production, release or commercialization of ASOs that
act predominantly by [***] Clusterin [***] or that are [***] Clusterin [***] or
products containing such ASOs, or (b) grant to any other party any
license, immunity or other right, in each case other than a Permitted License
or as otherwise set forth on Appendix F, to do any of the foregoing. Isis
represents and warrants that all Permitted Licenses as of the Amendment
Effective Date are listed on Appendix F.


 


4.1.6       [***] and [***]
Patents. Without limiting OncoGenex’ obligations under Section 6.2.4,
Isis will timely pay in full all amounts required to be paid by Isis, and
timely perform in full all obligations required to be performed by Isis, under
the [***] Agreement and the [***] Agreement. Without the prior express written
consent of OncoGenex (such consent not to be unreasonably withheld, conditioned
or delayed), Isis will not (and will take no action or make no omission to)
modify or waive any material provision of the [***] Agreement or the [***]
Agreement that could impair the value of the sublicenses granted to OncoGenex
under the [***] Agreement or the [***] Agreement, or to terminate or have
terminated the [***] Agreement or the [***] Agreement.


 


Section
4.2            Assignment,
Technology Transfer.


 


4.2.1       Assignment. Isis
previously has assigned and transferred, or will assign and transfer, and
hereby does assign and transfer, to OncoGenex or its designee, all rights,
title, and interests in and to the Product-Specific Technology and the
Product-Specific Technology Patents. Simultaneously with the execution of this
Agreement, Isis will execute and deliver a confirmatory assignment relating to
all Product-Specific Technology Patents listed on Appendix G.


 


4.2.2       Isis Transfer of Technology.
Subject to the terms and conditions of this Agreement, Isis will transfer to
OncoGenex, or a Third Party designate selected solely by OncoGenex,
(a) all know-how required to use and interpret the Release Methods,
(b) all software necessary for the conduct of the Release Methods,
(c) the Supply Chain Network necessary for the manufacture of the Product,
(d) any Isis Core Technology, (e) any Product-Specific Technology and
(f) the Isis Manufacturing Technology, in each case Controlled by Isis on
the Amendment Effective Date. Isis will use Commercially Reasonable Efforts to
complete such transfer pursuant to this Section 4.2.1 within 120 days
following the Amendment Effective Date. If (i) such transfer requires more
than [***] (ii) such transfer is made to a Third Party manufacturer, or
(iii) OncoGenex reasonably requests further technical assistance with
respect thereto, then, in each case, OncoGenex will pay to Isis the standard
Isis FTE rate for the time to complete such transfer or to provide such
assistance. Any transfer made under this Section 4.2.1 is subject to
Section 4.1.2 and Article 7.


 


4.2.3       Transfer of Records. Isis will provide to OncoGenex
promptly following OncoGenex’ written request, (a) all batch records
related to any Product, including but not 


 


3

















 


limited to corresponding release data,
(b) toxicity and pharmacokinetic data and reports related to such Product,
(c) pharmacology data and reports related to such Product,
(d) Product and OGX-011 characterization data, (e) Product and
OGX-011 stability data, (f) any other records, including, but not limited
to, raw data or interim or final reports, related to such Product or OGX-011,
and (g) all Regulatory Documents, in each case that are in the possession
of Isis or its Affiliates, or any third party engaged by Isis or any of its
Affiliates. OncoGenex will promptly share with Isis a summary of the data and
results related to each clinical trial conducted by OncoGenex that was
completed or commenced prior to the Amendment Effective Date in substantially the
form, and with substantially the content, of OncoGenex’ regular reports
provided to its board of directors regarding such clinical trial, but in any
event by the later of (i) 60 days following the Amendment Effective Date
and (ii) the date OncoGenex comes into possession of such information.


 


Section
4.3            Supply
of Existing OGX-011. Isis will supply OncoGenex, and OncoGenex will purchase
from Isis, the [***] grams of OGX-011 API in Isis’ possession as of the
Amendment Effective Date for a purchase price of [***] in accordance with the
terms and conditions of Purchase Order No. 184, dated February 14,
2006, issued by OncoGenex to Isis (including without limitation the
specifications, warranties and other obligations set forth in the Terms and Conditions
of Purchase attached thereto, other than the purchase price and payment terms),
with the same effect, and to the same extent, as if such supply and purchase
had been made pursuant to such Purchase Order. In connection therewith, Isis
shall deliver to OncoGenex an updated Certificate of Analysis dated not more
than ninety (90) days prior to the date of delivery to OncoGenex. OncoGenex
acknowledges and agrees that in order to perform the testing necessary to
provide the updated certificate of analyses, Isis will need to use
approximately [***] grams of such API. Within ninety (90) days following the
receipt by OncoGenex of such API and such Certificate of Analysis, each
provided in accordance herewith, OncoGenex shall pay to Isis the purchase price
set forth in this Section 4.3 and take delivery of the API purchased by
OncoGenex hereunder plus approximately [***] grams of API previously purchased
by OncoGenex.


 


Section
4.4            Diligence. OncoGenex will use
Commercially Reasonable Efforts to develop and commercialize OGX-011 and
Products.


 


ARTICLE 5

DEVELOPMENT & COMMERCIALIZATION


 


Section 5.1            Development,
Commercialization and Regulatory Responsibilities.  OncoGenex will have sole responsibility,
including without limitation sole responsibility for all funding, resourcing
and decision making, for all further development and commercialization with
respect to OGX-011 and Products. OncoGenex hereby assumes all regulatory
responsibilities in connection with OGX-011 and Products, including sole
responsibility for all Regulatory Documents and for obtaining all regulatory
approvals. OncoGenex will comply with all Applicable Laws in connection with
the development and commercialization of OGX-011 and Products. All INDs, NDAs,
MAAs and other regulatory filings for OGX-011 and Products will be owned by
OncoGenex.


 


Section 5.2            Reports
by OncoGenex.  At Isis’ request,
after the first anniversary of the Amendment Effective Date, OncoGenex will
provide an annual report to Isis summarizing 


 


4

















 


OncoGenex’ development
and commercialization activities over the past year regarding the Product in
substantially the form, and with substantially the content, of OncoGenex’
regular reports provided to its board of directors regarding the Product. In
addition, OncoGenex will promptly respond to any reasonable follow-up questions
Isis may have regarding such reports solely to the extent necessary to
determine whether OncoGenex is in compliance with its obligations to use
Commercially Reasonable Efforts under Section 4.4. Isis shall have the right to
use such reports solely to reasonably determine whether OncoGenex is in
compliance with its obligations to use Commercially Reasonable Efforts under
Section 4.4.


 


Section
5.3            Safety Database. Isis maintains a database that includes
information regarding the safety and tolerability of its drug compounds,
individually and as a class, including information discovered during
pre-clinical and clinical development (the “Isis Database”).


 


5.3.1       To the extent OncoGenex
and its Affiliates have collected data and information specifically regarding
Products, and subject to Applicable Law, including, without limitation, all
applicable privacy laws, rules and regulations (such as the Health Insurance
Portability Accountability Act), any applicable informed consents, and any
obligations or restrictions imposed by Third Party clinical sites relating to
dissemination or use of such data and information, in an effort to maximize
understanding of the safety profile and pharmacokinetics of Isis compounds,
OncoGenex will provide Isis with the following: 
(a) copies of [***] and [***] summary reports, and [***] final
reports, in each case specifically regarding Products, and (b) in connection
with any reported [***] (including any follow-up or amended reports)
specifically regarding a Product, the following [***] regarding the applicable
Product: (i) [***]; (ii) [***] usage; (iii) particulars of
[***]; (iv) [***] history [***]; and (v) [***]. All such data and
information disclosed by OncoGenex to Isis in connection with this
Section 5.3, together with any data and information related to the [***]
of each Product and any [***], will be OncoGenex’ Confidential Information.
Isis shall use such Confidential Information solely for the purpose of
populating the Isis Database, and for no other purpose. Isis shall not disclose
any such Confidential Information to any Third Party; provided,
however, that Isis may conduct analyses to keep Isis and its
partners informed regarding class generic safety and pharmacokinetic properties
of ASOs so long as Isis does not disclose to such Third Parties the identity of
the applicable Product, Clusterin as the target, OncoGenex or its Affiliates
(or any information that would foreseeably reveal the identity of the
applicable Product, Clusterin as the gene target, OncoGenex or its Affiliates)
or any patient identifying information.


 


5.3.2       To the extent that
[***] OncoGenex under this Agreement collects safety and tolerability data or
information specifically regarding a Product, OncoGenex shall use commercially
reasonable efforts to obtain from such sublicensee (a) the right to
provide to Isis (whether through OncoGenex or its Affiliate, or directly from
such sublicensee) the [***] described in [***] and (b) the right of Isis
to [***] for the purposes described in [***]. Only sublicensees that agree to
provide such [***] and grant Isis the right to use such [***] as set forth
herein, will have the right to access the results of any queries requested by
OncoGenex. If and when Isis identifies safety, pharmacokinetic or other related
issues that may be relevant to a Product [***] Isis will promptly inform
OncoGenex of such issues, and if requested, provide the data and information
supporting Isis’ conclusions regarding such issues. In addition, at OncoGenex’
reasonable request and at no cost to OncoGenex, Isis will [***] the Isis
Database to provide OncoGenex information regarding [***] or other related
issues.


 


5

















 


5.3.3       To the extent OncoGenex
or its Affiliate obtains safety and tolerability data or information
specifically regarding a Product, and such data or information is subject to
any restrictions or obligations imposed by a Third Party clinical site,
OncoGenex shall use commercially reasonable efforts to obtain from such Third
Party clinical site (a) the right to provide to Isis the data and
information described in this Section 5.3, and (b) the right of Isis
to use such data and information for the purposes described in this
Section 5.3.


 


ARTICLE 6

FINANCIAL PROVISIONS


 


Section 6.1            Initial
Payment by OncoGenex. The Parties acknowledge and agree that OncoGenex paid
to Isis $500,000 (U.S.) under section 5.1 of the Original Collaboration
Agreement.


 


Section
6.2            Royalty
Payments by OncoGenex; Royalty Term.


 


6.2.1       Royalty Rate. In
consideration of Isis’ collaborative efforts under the Original Collaboration
Agreement and the licenses and assignments granted hereunder, OncoGenex will
pay Isis a base royalty of [***]% of the Net Sales of a Product. In addition,
OncoGenex will pay Isis [***]% of Royalty Revenue in excess of [***]% of Net
Sales of Third Parties to a maximum additional royalty payable to Isis of
[***]% of Net Sales of Third Parties.


 


6.2.2       [***]. Notwithstanding anything to the contrary in this
Agreement, if (i) OncoGenex has an agreement with a Third Party for the
further development or commercialization of a Product pursuant to which such
Third Party is selling the Product (a “Commercialization Agreement”),
(ii) under such Commercialization Agreement the [***] by such Third Party
to OncoGenex [***] of such Product under such Commercialization Agreement [***]
and (iii) a [***] in any country would not be infringed by the making,
using or selling of a Product in such country by an unauthorized party, then
with respect to such Product in such country, (a) the applicable [***]%
base royalty rate, and the [***]% threshold for and [***]% cap on the
additional royalty, under Section 6.2.1 above shall be [***] as such [***]
and (b) the aggregate royalty owing to Isis shall not exceed [***] of the
Royalty Revenue retained by OncoGenex.


 


6.2.3       [***].


 


(a)           Notwithstanding
anything to the contrary in this Agreement, subject to Section 6.2.3(c),
if (i) OncoGenex has a Commercialization Agreement, and (ii) under
such Commercialization Agreement the [***] to OncoGenex on the [***] under such
agreement because [***] then with respect to such Product, the applicable
[***]% royalty rate, and the [***]% threshold and the [***]  on the additional royalty under Section 6.2.1
above shall be reduced in the same manner and in the same proportion as such
[***].


 


(b)           Notwithstanding
anything to the contrary in this Agreement, subject to Section 6.2.3(c) if
(i) OncoGenex does not have a Commercialization Agreement, and
(ii) in any quarter, there are one or more [***] OncoGenex may [***] above
on a country-by-country and Product-by-Product basis by [***] represents of the
[***] in such country as reported by IMS plus (b) [***] in such country,
in each case in such quarter. By way of example, if in any quarter


 


6

















 


the [***] in a country
represents 50% of the [***] of the Product plus all [***] OncoGenex may reduce
the royalties due to Isis under Section 6.2.1 by [***] in such country. Nothing
in this Section 6.2.3 shall modify the obligations of OncoGenex under
[***] required pursuant to the [***] Agreement and the [***] Agreement.


 


(c)           This Section will
not apply to [***] by Isis or a Third Party in a country under a license
granted by Isis pursuant to Section 12.2.2, unless a Valid Claim within
the Product-Specific Technology Patents, Isis Core Technology Patents, Isis
Manufacturing Patents or Joint Patents in such country would not be infringed
by the making, using or selling of such Product in such country by an
unauthorized party.


 


6.2.4       Third Party
Payments. In addition to the royalty set forth in
Section 6.2.1, OncoGenex will pay to Isis (i) a royalty of [***]% of
Net Sales of such Product to the extent required pursuant to the [***]
Agreement; and (ii) a royalty of [***]% of Net Sales of such Product to
the extent required pursuant to the [***] Agreement. In the event that Isis
negotiates a reduction or elimination of the royalties with [***] or [***]
following the Amendment Effective Date, the royalties due under the referenced
license agreements will still be paid to Isis.


 


6.2.5       Noncumulative
Relief. If the conditions described in Sections 6.2.2 and 6.2.3
have been met such that, under both provisions, OncoGenex would be entitled to
[***] OncoGenex may [***] by applying the greater of the [***] such that under
no circumstances will Sections 6.2.2 and 6.2.3 work together to
cumulatively [***].


 


Section 6.3            Royalty Term. Royalties payable
under Section 6.2 will be payable for each Product on a country-by-country
basis from the first commercial sale of a Product in such country until the
date that is the later of (i) [***] after the first commercial sale of a
Product in such country or (ii) the expiration of the last to expire Valid
Claim within the Product-Specific
Technology Patents, Isis Core Technology Patents, Isis Manufacturing
Technology or Joint Patents which would be infringed by the making, using or
selling of the applicable Product in the applicable country by an unauthorized
party.


 


Section
6.4            Timing of Royalty
Payments; Preliminary Report.


 


6.4.1       The royalties
calculated in Sections 6.2 or 6.3 will become due and payable within 40
days after each respective Royalty Due Date and will be calculated in respect
of the Net Sales in the calendar quarter period ending with the applicable
Royalty Due Date; provided, however, that if the
royalties are adjusted in accordance with Section 6.2.3, then such
royalties will become due and payable within the later of (a) forty (40)
days after each respective Royalty Due Date, and (b) fifteen (15) days
after the applicable IMS data is available for the applicable quarter as
necessary to fully calculate the royalty reduction under Section 6.2.3.
Furthermore, OncoGenex agrees to supply Isis the information Isis reasonably
requires to comply with any third party payments under Section 6.3. In the
event the applicable IMS data is no longer available, the Parties agree to
negotiate in good faith a reasonable, mutually-acceptable data source to be
used in place of IMS data for purposes of calculating the royalty reduction
under Section 6.2.3.  In the event
the applicable IMS data (or other reasonable, mutually-acceptable data
described above) is only available on a date that is significantly later than
forty (40) days after the respective Royalty Due Date, the Parties agree
to negotiate in good faith a reasonable,


 


7

















 


mutually-acceptable mechanism providing for the payment by OncoGenex,
within forty (40) days after the respective Royalty Due Date, of the
estimated royalty payment for a quarter based on commercially reasonable
assumptions, and the prompt true-up (in the form of an additional payment,
repayment or credit, as applicable) of such estimated payment once the actual
royalty payment for such quarter may be calculated.


 


6.4.2       In addition, during the
Term following the first commercial sale of any Product, within 10 Business
Days after the Royalty Due Date, OncoGenex will provide Isis a preliminary
non-binding quarterly royalty report estimating the total Net Sales of Product
and royalty payable for such calendar quarter. Unless required by applicable
law or OncoGenex has already publicly disclosed such information, Isis shall
not directly or indirectly in any manner whatsoever, publicly disclose the
information contained in the preliminary royalty report estimate without first
confirming such information against the payment made by OncoGenex under Section 6.4.1
above for the applicable period, and without expressly acknowledging that such
information is a preliminary non-binding estimate only. Notwithstanding
anything to the contrary in this Agreement, (a) any breach by Isis of its
obligations under Section 6.4.2 shall constitute a material breach under
this Agreement, and (b) OncoGenex will not be liable to Isis for any Loss
Isis may suffer as a result of Isis publicly disclosing information contained
in such a preliminary non-binding quarterly royalty report estimate.


 


Section
6.5            Non-Royalty Revenue Payments by OncoGenex. Non-Royalty
Revenue will be allocated between the Parties based on the timing of when
OncoGenex signs a sublicensing agreement with a Third Party for the Product as
follows:


 


8

















 


	
  Timing of signing a

  sublicensing agreement

  	
   

  	
  Isis share of Non-Royalty

  Revenue

  	
   

  	
  OncoGenex share of Non-

  Royalty Revenue

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (a) Prior to the initiation (i.e.
  first patient dosed) of a first Registration Clinical Trial for a Product

  	
   

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b) After (a) but prior to enrolling
  20% of the planned patients in the first Registration Clinical Trial for a
  Product

  	
   

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c) After (b) but prior to obtaining
  marketing approval from a Regulatory Authority

  	
   

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (d) After (c)

  	
   

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  



 


6.5.1       Third Party Payments on Non-Royalty Revenue. Isis will
be solely responsible for passing through the Third Party Payments owing to
[***] and [***] on Non-Royalty Revenue, if any.


 


Section
6.6            Timing of Non-Royalty Revenue Payments. Isis
share of Non-Royalty Revenue calculated in Section 6.5 will become due and
payable within twenty-one (21) days after receipt of the applicable
Non-Royalty Revenue by OncoGenex.


 


Section
6.7            Payment Method. Any amounts due to
Isis pursuant to 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 will bear interest at a rate equal to the lesser
of 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 two percent (2%), or the
maximum rate permitted by law, whichever is lower, calculated on the number of
days such payment is delinquent, compounded monthly.


 


Section
6.8            Currency; Foreign Payments. If any
currency conversion will be required in connection with any payment hereunder,
such conversion will be made by using the daily noon buying rates as published
by the Federal Reserve Bank of New York 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,
OncoGenex may notify Isis and make such payments by depositing the amount
thereof in local currency in a bank account or other


 


9

















 


depository in such
country in the name of Isis or its designee, and OncoGenex will have no further
obligations under this Agreement with respect thereto.


 


Section
6.9            Taxes. OncoGenex may deduct from
any amounts it is required to pay to Isis pursuant to this Agreement an amount
equal to that withheld for or due on account of any taxes (other than taxes
imposed on or measured by net income) or similar governmental charge imposed on
Isis by a jurisdiction of OncoGenex (“Withholding Taxes”). OncoGenex will
provide Isis a certificate evidencing payment of any Withholding Taxes
hereunder within 30 days of such payment. OncoGenex will notify Isis as soon as
practicable once OncoGenex has determined it will deduct the amount of any
Withholding Taxes from its payments to Isis under this Section 6.9. Each Party
agrees to cooperate with the other Party in claiming refunds or exemptions from
such deductions or withholdings under any relevant agreement or treaty which is
in effect. The Parties shall discuss applicable mechanisms for minimizing such
taxes to extent possible in compliance with Applicable Law. In addition, the
Parties shall cooperate in accordance with Applicable Law to minimize indirect
taxes (such as value added tax, sales tax, consumption tax and other similar
taxes) in connection with this Agreement.


 


Section
6.10         Records
Retention; Audit.


 


6.10.1     Regulatory Records. With respect to the subject matter
of this Agreement, OncoGenex will maintain, or cause to be maintained, records
of its research, development, manufacturing and commercialization activities,
including all Regulatory Documentation, pursuant to its standard operating
procedures. All Regulatory Documentation will be retained for a period at least
as may be required by Applicable Law.


 


6.10.2     Record Retention. OncoGenex  will maintain (and will ensure that its sublicensees will
maintain) complete and accurate books, records and accounts that fairly reflect
Revenue and the royalties payable to Isis under this Agreement (including the
calculation of Net Sales and any adjustments under Section 6.2) with respect to
the Product in sufficient detail to confirm the accuracy of any payments
required hereunder and in accordance with GAAP, which books, records and
accounts will be retained until the later of (i) 3 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.


 


6.10.3     Audit. Isis will have the right to have an independent
certified public accounting firm of nationally recognized standing, reasonably
acceptable to OncoGenex, have access during normal business hours, and upon
reasonable prior written notice, to such of the records of OncoGenex as may be
reasonably necessary to verify the accuracy of Revenues for any calendar
quarter or calendar year ending not more than 24 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. Isis will bear the cost of such audit
unless the audit reveals a variance of more than 5% from the reported results,
in which case OncoGenex will bear the cost of the audit. Isis will have the
right to audit previous years, if such years have not been previously audited,
if the audit reveals a variance of more than 5% from the reported results. Isis
will bear the cost of such previous year audits unless such audits reveal a
variance of more than 


 


10

















 


5%. The results of such accounting firm will be final and binding upon
each of Isis and OncoGenex, absent manifest error.


 


6.10.4     Payment of Additional Amounts. If, based on the results
of such audit, additional payments are owed by OncoGenex under this Agreement,
OncoGenex will make such additional payments, with interest from the date
originally due at the rate of 1% per month, within 60 days after the date on
which such accounting firm’s written report is delivered to OncoGenex.


 


6.10.5     Confidentiality. Isis will treat all information
subject to review under this Section 6.10 as OncoGenex’ Confidential
Information in accordance with the confidentiality provisions of Article 7
and will cause its accounting firm to enter into a reasonably acceptable
confidentiality agreement with OncoGenex obligating such firm to maintain all
such financial information in confidence pursuant to such confidentiality
agreement. The accounting firm will disclose to Isis only whether the reports
are correct or not and the amount of any discrepancy. No other information will
be shared.


 


ARTICLE 7

CONFIDENTIALITY


 


Section
7.1            Disclosure and Use Restriction. Except
as expressly provided herein, the Parties agree that, for the Term and for five
(5) 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.


 


7.1.1       Authorized Disclosure. Each Party may disclose
Confidential Information of the other Party to the extent that such disclosure
is:


 


(a)           made in response to
a valid order of a court of competent jurisdiction; provided, however, that such Party will first have given
notice to such other Party and given such other Party a reasonable opportunity
to quash such order and to obtain a protective order requiring that the
Confidential Information and documents that 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;


 


(b)           otherwise required
by law; provided, however, that
the disclosing Party will provide such other Party with notice of such
disclosure in advance thereof to the extent practicable;


 


(c)           made by such Party
to the Regulatory Authorities as required in connection with any filing,
application or request for Regulatory Approval; provided, however, that reasonable measures will be taken to
assure confidential treatment of such information;


 


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(d)           made by such Party,
in connection with the performance of this Agreement, to permitted
sublicensees, licensors, 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 Article 7; or


 


(e)           made by such 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 Article 7.


 


Section
7.2                                   Publicity.


 


7.2.1       Press Releases Regarding Agreement. Upon execution of
this Agreement, the Parties shall issue a joint press release announcing the
existence of this Agreement in a form and substance agreed to in writing by the
Parties. Each Party agrees not to issue any other press release or other public
statement disclosing other information relating to this Agreement or the
transactions contemplated hereby without the prior written consent of the other
Party, except for those communications required by Applicable Law or court
order, disclosures of information for which consent has previously been
obtained, and information of a similar nature to that which has been previously
disclosed publicly with respect to this Agreement, each of which will not
require advance approval, but will be provided to the other Party as soon as
practicable after the release or communication thereof.


 


7.2.2       Press Releases Regarding Products.


 


(a)           OncoGenex may
publish, present or otherwise disclose results regarding OGX-011 or Product to
the public at its sole discretion; however,
any press release or other similar public communication by either Party related
to a Product’s efficacy or safety data and/or results, will be submitted to the
other Party for review at least 4 Business Days in advance of such proposed
public disclosure. Notwithstanding the foregoing, if the Party is making a
disclosure that is reasonably required by applicable law, regulation or court
order and cannot practically submit the disclosure to the other Party within
the 4 Business Day advance notice period above, the disclosing Party may
provide the other Party the disclosure [***] advance notice as is practical
under the circumstances, but in any event at least [***] written notice.
OncoGenex may satisfy its notice obligation under this Section 7.2.2(a) by
emailing and telephoning either Isis’ Chief Executive Officer or Chief
Operating Officer, and Isis may satisfy its notice obligation under this
Section Section 7.2.2(a) by emailing and telephoning OncoGenex’ Chief
Executive Officer.


 


(b)           In addition, each
Party will immediately notify (and provide as much advance notice as possible
to) the other of any event materially related to Product (including any
regulatory approval) so that the Parties may analyze the need to or
desirability of publicly disclosing or reporting such event.


 


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ARTICLE 8

TECHNOLOGY AND PATENTS


 


Section
8.1            Ownership.


 


8.1.1       Ownership of Technology and Patents.


 


(a)           As between
OncoGenex and Isis, Isis will solely own all right, title and interest to the
Isis Core Technology, Isis Core Technology Patents, Isis Manufacturing
Technology and Isis Manufacturing Patents.


 


(b)           As between
OncoGenex and Isis, OncoGenex will solely own all right, title and interest to
the OncoGenex Technology and OncoGenex Technology Patents.


 


(c)           Except as otherwise
set forth in clauses (a) and (b) above, and in Section 4.2.1, as between
OncoGenex and Isis, (i) OncoGenex will solely own all right, title and
interest in all discovery, invention, data, information, trade secret, know-how
or other technology (the “Technology”) conceived or reduced to practice solely
by employees or agents of OncoGenex, together with all patents and other
intellectual property rights therein and thereto; (ii) Isis will solely
own all right, title and interest in and to all Technology conceived or reduced
to practice solely by employees or agents of Isis, together with all patents
and other intellectual property rights therein and thereto; and
(iii) OncoGenex and Isis will jointly own all right, title and interest in
all Joint Technology, together with all patents and other intellectual property
rights therein and thereto. Each party will have the right, subject to the
provisions of this Agreement, to freely exploit, transfer, license or encumber
its rights in any Joint Patents without the consent of, or payment or
accounting to, the other party.


 


8.1.2       Ownership of Regulatory Documentation. All Regulatory
Documentation with respect to the Product will be owned by OncoGenex.


 


Section
8.2                                   Prosecution
of Patents.


 


8.2.1       Isis Rights. Isis will have the sole right, at its cost
and expense and at its sole discretion, to obtain, prosecute and maintain
throughout the world the Isis Patent Rights, including, but not limited to the
Isis Core Technology Patents and the Isis Manufacturing Patents, but excluding
the Product-Specific Technology Patents and the Joint Patents. Isis will keep
OncoGenex informed of the status of all Isis Core Technology Patents and Isis
Manufacturing Patents by way of an annual listing and reasonably detailed
written status report.


 


8.2.2       OncoGenex Rights.
OncoGenex will have the sole right, at its cost and expense and at its sole
discretion, to file, obtain, prosecute and maintain throughout the world any
OncoGenex Technology Patents, Product-Specific Technology Patents and the Joint
Patents.


 


8.2.3       Cooperation. Each Party will cooperate in the
preparation, filing, prosecution, and maintenance of the other Party’s Patents,
the Product-Specific Technology Patents and the Joint Patents, as required.
Such cooperation includes promptly executing all papers and instruments and
requiring employees to execute such papers and instruments as reasonable and


 


13

















 


appropriate so as to enable such other Party, to file, prosecute, and
maintain its Patents in any country.


 


Section
8.3            Enforcement
of Patents.


 


8.3.1       Rights and Procedures. If Isis or OncoGenex determines
that any Isis Patent Rights or OncoGenex Patent Rights are being infringed by a
Third Party’s activities and that such infringement could affect the exercise
by OncoGenex of its rights under this Agreement, it will promptly notify the
other Party in writing and provide such other Party with any evidence of such
infringement that is reasonably available.


 


(a)           Isis Core Technology Patents and Isis Manufacturing Patents. Subject
to 8.3.1(e) Isis will have the sole right, but not the obligation, at its own
expense, to remove infringement of Isis Core Technology Patents and Isis
Manufacturing Patents using commercially appropriate steps, including the filing
of an infringement suit or taking other similar action, and OncoGenex or a
Third Party licensee of the Product will have the right, at its own expense, to
be represented in any such action; provided,
however, that (i) if Isis fails to bring an action or
proceeding within ninety (90) days following notice of such infringement, or
earlier notifies OncoGenex or a Third Party licensee of the Product in writing
of its intent not to take such steps, and (ii) the infringement is likely
to have a material adverse effect on OncoGenex’ or a sub-licensee’ development,
manufacture, production, release or commercialization of the Product, then
OncoGenex and/or the Third Party licensee of the Product will meet with Isis to
determine whether to defend against such infringement, and if the Parties
mutually agree in writing to proceed in defending such infringement, Isis will
remove the infringement using commercially appropriate steps, and OncoGenex or
the Third Party will share in the reasonable costs incurred relating to the
removal of any such infringement on an equal basis. If however, (i) the
Parties cannot mutually agree in writing to proceed in removing such
infringement, (ii) the product in question is a Competing Product, and
(iii) OncoGenex requests in writing that Isis remove such infringement (an
“OncoGenex Mandate”), then Isis (at OncoGenex’ sole expense) will remove the
infringement using commercially appropriate steps. In either case, Isis may not
settle, or otherwise consent to an adverse judgment in, such infringement that
diminishes the rights or interests of OncoGenex without the prior express
written consent of OncoGenex.


 


(b)           In the event of an
(i) OncoGenex Mandate (ii) Isis refuses to remove the infringement in
a country using commercially appropriate steps (as determined, if necessary, in
accordance with the dispute resolution provisions in Section 13.15) and
(iii) such Competing Product is actually being sold in such country, then
the [***].


 


(c)           OncoGenex Technology Patents. Subject to 8.3.1(e) OncoGenex
will have the sole right, but not the obligation, at its own expense, to remove
infringement of OncoGenex Technology Patents using commercially appropriate
steps, including the filing of an infringement suit or taking other similar
action, and Isis will have the right, at its own expense, to be represented in
any such action.


 


(d)           Product-Specific Technology Patents and Joint Patents. Subject
to 8.3.1(e) OncoGenex will have the sole right, but not the obligation, at its
own expense, to


 


14

















 


remove infringement of Product-Specific Technology Patents
and Joint Patents using commercially appropriate steps, including the filing of
an infringement suit or taking other similar action, and Isis will have the right,
at its own expense, to be represented in any such action; provided, however, that if the Product has
not been sublicensed to a Third Party and OncoGenex fails to bring an action or
proceeding within ninety (90) days following notice of such infringement, or
earlier notifies Isis in writing of its intent not to take such steps, Isis
will have the right to do so at its expense, and OncoGenex will have the right,
at its own expense, to be represented in any such action. Notwithstanding the
foregoing, if the infringement is likely to have a material adverse effect on
Isis’ economic interest in the Product’s development or commercialization, Isis
and OncoGenex will meet to determine whether to defend against such
infringement, and if the Parties mutually agree to proceed in defending such
infringement, OncoGenex will remove the infringement using commercially
appropriate steps, and Isis and OncoGenex will share in the reasonable costs
incurred relating to the removal of any such infringement on an equal basis.


 


(e)           Cooperation. The Party not enforcing the applicable
Patent will provide reasonable assistance to the other Party, including, but
not limited to, 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.


 


8.3.2       Recovery. Any amounts
recovered by either or both Parties, including Third Party licensees in
connection with or as a result of any action contemplated by
Section 8.3.1, whether by settlement or judgment, will be used to
reimburse the Parties, including Third Party licensees 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). Furthermore, if
Isis is enforcing Party under Section 8.3.1(a) or OncoGenex is the
enforcing party, after reimbursing the Parties in accordance with the preceding
sentence, OncoGenex will retain any remainder of the recovery as Net Sales and
royalties will be payable by OncoGenex to Isis with respect to such Net Sales
in accordance with this Agreement. If Isis is the enforcing party other than as
set forth in Section 8.3.1(a), after reimbursing the Parties in accordance
with the first sentence of this Section, any remainder will be kept by Isis.


 


Section 8.4            Third
Party Litigation. In the event that a Third Party institutes a patent
infringement suit (including any suit alleging the invalidity or unenforceability
of the Patents of a Party) against either Party or Third Party licensees during
the Term of this Agreement, alleging that any of the activities hereunder
infringes one or more patent or other intellectual property rights held by such
Third Party (an “Infringement Suit”), the Parties will cooperate with one
another in defending such suit. Isis will have the sole right to control any
defense of any such claim involving alleged infringement of Third Party rights
by Isis’ activities at its own expense and by counsel of its own choice, and
OncoGenex will have the right, at its own expense, to be represented in any
such action by counsel of its own choice. OncoGenex will have the sole right to
control any defense of any such claim involving alleged infringement of Third
Party rights by OncoGenex’ activities, or that relates to the development,
manufacture, production, release and commercialization of the Product, at its
own expense and by counsel of its own choice, and Isis will have the right, at
its own expense, to be represented in any such action by additional counsel of
its own choice at its own expense.


 


15

















 


Section 8.5            No Challenge. During the term of this Agreement, OncoGenex,
its Affiliates and sublicensees will not, directly or indirectly, and will not
collaborate with, or otherwise authorize any Third Party to challenge any Isis
Patent Rights licensed by Isis to OncoGenex under this Agreement, including
through opposition, re-examination, nullity or revocation proceeding, or other
available administrative mechanism; provided, however, that, notwithstanding
the foregoing, OncoGenex, its Affiliates and sublicensees shall have the right
to comply with a subpoena duly issued in good faith by a Third Party, court or
administrative order, or similar legal process for testimony or the production
of documents.


 


ARTICLE 9

TERM AND TERMINATION


 


Section
9.1            Term. The term of this Agreement
(the “Term”) will continue in effect until such time as any Product is no longer
being developed, manufactured, produced, released or commercialized hereunder,
or unless terminated at an earlier date in accordance with the terms and
conditions set forth in this Article 9. Isis will have the right to
terminate this Agreement and/or any license granted by it hereunder solely in
accordance with Article 12.


 


Section
9.2            Rights in Bankruptcy. All rights
and licenses granted under or pursuant to this Agreement by Isis to OncoGenex
are, and will otherwise be deemed to be, for purposes of Section 365(n) of
the United States Bankruptcy Code, licenses of rights to “intellectual
property” as defined under Section 101 of the United States Bankruptcy
Code. The Parties agree that OncoGenex, as a licensee of such rights under this
Agreement, will retain and may fully exercise all of its rights and elections
under the United States Bankruptcy Code. The Parties further agree that, in the
event of the commencement of a bankruptcy proceeding by or against Isis under
the United States Bankruptcy Code, OncoGenex will be entitled to a complete
duplicate of (or complete access to, as appropriate) any such intellectual
property and all embodiments of such intellectual property, which, if not
already in OncoGenex’ possession, will be promptly delivered to it (a) upon
any such commencement of a bankruptcy proceeding upon OncoGenex’ written
request therefor, unless Isis elects to continue to perform all of its
obligations under this Agreement or (b) if not delivered under clause (a)
above, following the rejection of this Agreement by or on behalf of Isis upon
written request therefor by OncoGenex.


 


Section
9.3            Consequences
of Expiration or Termination.


 


9.3.1       Licenses. Upon expiration of the Term of this Agreement
in accordance with Section Section 9.1 and payment of all amounts owed
pursuant to this Agreement, the licenses granted by Isis to OncoGenex hereunder
will terminate.


 


9.3.2       Return of Information and Materials. Upon expiration of
this Agreement pursuant to Section Section 9.1 or upon termination of this
Agreement in its entirety by either Party pursuant to this Article 9, each
Party, at the request of the other Party, will return all data, files, records
and other materials in its possession or control relating to such other Party’s
Technology, or containing or comprising such other Party’s Information and
Inventions or other Confidential Information and, in each case, to which the
returning Party does not retain rights hereunder (except one copy of which may
be retained for archival purposes). Notwithstanding


 


16

















 


the foregoing, each Party may retain one (1) copy of the other Party’s
Confidential Information for its legal archives.


 


Section
9.4            Accrued
Rights; Surviving Obligations.


 


9.4.1       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.


 


9.4.2       Survival. Articles 7, 10, 12 and 13 of this
Agreement, and Sections 4.2.1, 6.10, 8.1, 9.3, 9.4 and 11.4 will survive
expiration or termination of this Agreement for any reason.


 


ARTICLE 10

INDEMNIFICATION AND INSURANCE


 


Section
10.1         Indemnification of Isis. OncoGenex
will indemnify Isis, and 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) but only to the extent arising from or occurring
as a result of any and all liability suits, investigations, claims, demands or
actions by a Third Party (collectively, “Losses” and each a “Loss”) to the
extent arising from or occurring as a result of (a) whether or not
negligence is found, the development, manufacture, use, handling, storage, sale
or other commercialization or disposition of OGX-011 or any Product by
OncoGenex or its Affiliates or licensees, (b) any material breach by
OncoGenex of this Agreement, or (c) the gross negligence or willful
misconduct on the part of OncoGenex or its licensees or sublicensees in
performing any activity contemplated by this Agreement, except for those Losses
for which Isis has an obligation to indemnify OncoGenex pursuant to
Section 10.2, as to which Losses each Party will indemnify the other to
the extent of their respective liability for the Losses.


 


Section
10.2         Indemnification of OncoGenex. Isis
will indemnify OncoGenex, and their respective directors, officers, employees
and agents, and defend and save each of them harmless, from and against any and
all Losses to the extent arising from or occurring as a result of (a) any
material breach by Isis of this Agreement, or (b) the gross negligence or
willful misconduct on the part of Isis or its licensees or sublicensees in
performing any activity contemplated by this Agreement, except for those Losses
for which OncoGenex has an obligation to indemnify Isis pursuant to
Section 9.1, as to which Losses each Party will indemnify the other to the
extent of their respective liability for the Losses.


 


Section
10.3         Indemnification
Procedure.


 


10.3.1     Notice of Claim. The indemnified Party will give the
indemnifying Party prompt written notice (an “Indemnification Claim Notice”) of
any Loss upon which such indemnified Party intends to base a request for
indemnification under Section 10.1 or Section 10.2, but in no event
will the indemnifying Party be liable for any Losses that result from any delay
in providing such notice. Each Indemnification Claim Notice must contain a
description of the Loss and the nature and amount of such Loss (to the extent
that the nature and amount of such Loss are known


 


17

















 


at such time). The
indemnified Party will furnish promptly to the indemnifying Party copies of all
papers and official documents received in respect of such Loss. All
indemnification claims in respect of a Party, its Affiliates or their
respective directors, officers, employees and agents (collectively, the
“Indemnitees” and each an “Indemnitee”) will be made solely by such Party to
this Agreement (the “Indemnified Party”).


 


10.3.2     Third Party Claims. The obligations of an indemnifying
Party under this Article 10 with respect to Losses arising from claims of
any Third Party that are subject to indemnification as provided for in
Section 10.1 or 10.2 (a “Third Party Claim”) will be governed by and be
contingent upon the following additional terms and conditions:


 


(a)           Control of Defense. At its option, the indemnifying
Party may assume the defense of any Third Party Claim by giving written notice
to the Indemnified Party within 30 days after the indemnifying Party’s receipt
of an Indemnification Claim Notice. The assumption of the defense of a Third
Party Claim by the indemnifying Party will not be construed as an
acknowledgment that the indemnifying Party is liable to indemnify any
Indemnitee in respect of the Third Party Claim, nor will it constitute a waiver
by the indemnifying Party of any defenses it may assert against any
Indemnitee’s claim for indemnification. Upon assuming the defense of a Third
Party Claim, the indemnifying Party may appoint as lead counsel in the defense
of the Third Party Claim any legal counsel selected by the indemnifying Party.
In the event the indemnifying Party assumes the defense of a Third Party Claim,
the Indemnified Party will immediately deliver to the indemnifying Party all
original notices and documents (including court papers) received by any
Indemnitee in connection with the Third Party Claim. Should the indemnifying
Party assume the defense of a Third Party Claim, the indemnifying Party will
not be liable to the Indemnified Party or any other Indemnitee for any legal
expenses subsequently incurred by such Indemnified Party or other Indemnitee in
connection with the analysis, defense or settlement of the Third Party Claim.
In the event that it is ultimately determined that the indemnifying Party is
not obligated to indemnify, defend or hold harmless an Indemnitee from and
against the Third Party Claim, the Indemnified Party will reimburse the
indemnifying Party for any and all costs and expenses (including attorneys’
fees and costs of suit) and any Losses incurred by the indemnifying Party in
its defense of the Third Party Claim with respect to such Indemnitee.


 


(b)           Right to Participate in Defense. Without limiting
Section 10.3.2(a), any Indemnitee will be entitled to participate in, but
not control, the defense of such Third Party Claim and to employ counsel of its
choice for such purpose; provided, however,
that such employment will be at the Indemnitee’s own expense unless
(i) the employment thereof has been specifically authorized by the
indemnifying Party in writing, or (ii) the indemnifying Party has failed
to assume the defense and employ counsel in accordance with
Section 10.3.2(a) (in which case the Indemnified Party will control the
defense).


 


(c)           Settlement. With respect to any Losses relating solely
to the payment of money damages in connection with a Third Party Claim and that
will not result in the Indemnitee’s becoming subject to injunctive or other
relief or otherwise adversely affect the business of the Indemnitee in any
manner, and as to which the indemnifying Party will have acknowledged in
writing the obligation to indemnify the Indemnitee hereunder, the indemnifying
Party will have the sole right to consent to the entry of any judgment, enter
into any settlement or


 


18

















 


otherwise dispose of such
Loss, on such terms as the indemnifying Party, in its sole discretion, will
deem appropriate. With respect to all other Losses in connection with Third
Party Claims, where the indemnifying Party has assumed the defense of the Third
Party Claim in accordance with Section 9.3.2(a), the indemnifying Party
will have authority to consent to the entry of any judgment, enter into any
settlement or otherwise dispose of such Loss provided it obtains the prior
written consent of the Indemnified Party (which consent will not be
unreasonably withheld or delayed). The indemnifying Party will not be liable
for any settlement or other disposition of a Loss by an Indemnitee that is
reached without the written consent of the indemnifying Party. Regardless of
whether the indemnifying Party chooses to defend or prosecute any Third Party
Claim, no Indemnitee will admit any liability with respect to, or settle,
compromise or discharge, any Third Party Claim without the prior written
consent of the indemnifying Party.


 


(d)           Cooperation. Regardless of whether the indemnifying
Party chooses to defend or prosecute any Third Party Claim, the Indemnified
Party will, and will cause each other Indemnitee to, cooperate in the defense
or prosecution thereof and will furnish such records, information and
testimony, provide such witnesses and attend such conferences, discovery
proceedings, hearings, trials and appeals as may be reasonably requested in
connection therewith. Such cooperation will include access during normal
business hours afforded to the indemnifying Party to, and reasonable retention
by the Indemnified Party of, records and information that are reasonably
relevant to such Third Party Claim, and making Indemnitees and other employees
and agents available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder, and the
indemnifying Party will reimburse the Indemnified Party for all its reasonable
out-of-pocket expenses in connection therewith.


 


(e)           Expenses. Except as provided above, the reasonable and
verifiable costs and expenses, including fees and disbursements of counsel,
incurred by the Indemnified Party in connection with any claim will be
reimbursed on a calendar quarter basis by the indemnifying Party, without
prejudice to the indemnifying Party’s right to contest the Indemnified Party’s
right to indemnification and subject to refund in the event the indemnifying
Party is ultimately held not to be obligated to indemnify the Indemnified
Party.


 


Section
10.4         Insurance. OncoGenex
shall maintain product liability insurance with respect to the development,
manufacture and sale of Products hereunder by OncoGenex in such amount as
OncoGenex customarily maintains with respect to the development, manufacture
and sale of its similar products, but at a minimum an amount that is
customarily maintained by similar companies in the life sciences industry with
respect to the development, manufacture and sale of similar products. OncoGenex
shall maintain such insurance for so long as it continues to develop,
manufacture or sell any Product, and thereafter for so long as OncoGenex
customarily maintains insurance covering the development, manufacture or sale
of its similar products. Upon Isis’ request, OncoGenex will provide Isis with a
certificate of insurance evidencing such insurance.


 


19
















 


ARTICLE 11

REPRESENTATIONS AND WARRANTIES


 


Section
11.1         Representations, Warranties and Covenants. Each
Party hereby represents, warrants and covenants to the other Party as of the
Amendment Effective Date as follows:


 


11.1.1     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.


 


11.1.2     Litigation. Such Party is not aware of any pending or
threatened litigation (and has not received any communication) that alleges
that such Party’s activities related to this Agreement have violated, or that
by conducting the activities as contemplated herein such Party would violate,
any of the intellectual property rights of any other party.


 


11.1.3     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.


 


11.1.4     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 under, any contractual
obligation or court or administrative order by which such Party is bound.


 


11.1.5     No Default. Such Party is not aware of any breach by it of any
representation, warranty, or covenant in the Original Collaboration Agreement.


 


Section
11.2         Additional
Representations and Warranties of Isis.


 


11.2.1     Isis represents and
warrants to OncoGenex that Isis is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has full
corporate power and authority and the legal right to own and operate its
property and assets and to carry on its business as it is now being conducted
and as it is contemplated to be conducted by this Agreement.


 


11.2.2     Isis represents and
warrants to OncoGenex that the rights granted by Isis to OncoGenex as set forth
in Article 4 include all necessary rights of Isis’ technology, whether or
not patented or patentable, which are owned or Controlled by Isis on the
Amendment Effective Date and which are necessary or reasonably required for
OncoGenex to research develop, make, 


 


20

















 


have made, use, sell, offer for sale, have sold and import
the Product. Further, Isis represents and warrants to OncoGenex that Isis has
not knowingly [***] whether or not patented or patentable, to develop, make or
use OGX-011 under the Original Collaboration Agreement, that Isis could not
[***] of this Agreement or that (in the case of broadly commercially available
reagents, equipment and software) is not otherwise available on commercially
reasonable terms along with the purchase or lease of such reagents, equipment
and software.


 


11.2.3     Isis represents and
warrants to OncoGenex that (i) Section 9.6 of the [***] Agreement
states that the sublicense granted by Isis to OncoGenex under the [***]
Agreement will survive termination of the [***] Agreement, and
(ii) Section 4.3(b) of the [***] Agreement provides that if the [***]
Agreement is terminated for any reason, then [***] will promptly negotiate in
good faith a direct license of the sublicensed rights, on terms substantially
similar to those contained in this Agreement, with OncoGenex, unless the actions
or omissions of OncoGenex were a cause for termination of the [***] Agreement.


 


Section
11.3         Additional Representations and Warranties of
OncoGenex. OncoGenex represents and warrants to Isis that OncoGenex
is a corporation duly organized, validly existing and in good standing under
the laws of Canada, and has full corporate power and authority and the legal
right to own and operate its property and assets and to carry on its business
as it is now being conducted and as it is contemplated to be conducted by this
Agreement.


 


Section
11.4         DISCLAIMER OF WARRANTY. EXCEPT FOR
THE EXPRESS WARRANTIES SET FORTH IN SECTIONS 11.1, 11.2 AND 11.3,
ONCOGENEX 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
ONCOGENEX 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 12

BREACH


 


Section
12.1         Material Breach by Isis. Failure
by Isis to comply with any of its material obligations contained herein (including,
without limitation, its technology transfer obligations under Section 4.2)
will entitle OncoGenex to give Isis notice specifying the nature of the
material breach, requiring Isis to make good or otherwise cure such default,
and stating its intention to trigger the provisions of this Article 12 if
such default is not cured. If such default is not cured within ninety (90) days
after the receipt of such notice (or, if such default cannot be cured within
such ninety (90) day period, if Isis does not commence actions to cure such
default within such period and thereafter diligently continue such actions or
if such default is not otherwise cured within ninety (90) days after the
receipt of such notice), then OncoGenex will be entitled to appeal to the Courts
to enforce specific performance upon Isis without prejudice to any of its other
rights conferred on it by this Agreement, and in addition to any other remedies
available to 


 


21

















 


the Courts as remedy for
the breach and to continue to develop or commercialize the Product
independently of Isis in accordance with this Agreement.


 


Section
12.2         Breach
by OncoGenex.


 


12.2.1     Failure to Pay. If OncoGenex is in material breach of
OncoGenex’ obligation to make a payment to Isis under Article 6, then Isis
may deliver written notice of such breach to OncoGenex. OncoGenex will have
thirty (30) days following such notice to cure such breach. If OncoGenex
receives written notice of such breach and fails to cure such breach within the
30 day period, Isis may declare a breach hereunder upon thirty (30) days
advance written notice to OncoGenex and such notice will effectively terminate
this Agreement upon expiration of such thirty (30) day period.


 


12.2.2     Discontinued Development.   In the event of a
Discontinuance or if OncoGenex materially breaches its diligence obligations
under Section 4.4 which material breach is not cured by OncoGenex within
ninety (90) days after receipt of written notice from Isis describing such
material breach in reasonably specific detail, then in any such case, as Isis’
sole and exclusive remedy therefor, Isis will have the right to terminate the
[***] under [***] upon thirty (30) days prior written notice to OncoGenex
and in such case OncoGenex will grant to Isis a worldwide license or
sublicense, as the case may be, to the OncoGenex Product-Specific Technology,
OncoGenex Patents, OncoGenex Technology and any Product-Specific Technology
Patents assigned to OncoGenex under Section 4.2.1 (in the case of
OncoGenex Patents and OncoGenex Technology that are the subject of one or more
Third Party agreements, such license or sublicense shall be subject to all
restrictions and obligations (including financial obligations) under such Third
Party agreements) existing as of such date solely to develop, make, have made,
use, sell, offer for sale, have sold and import Nonexclusive Clusterin ASOs
(and any products containing such Nonexclusive Clusterin ASOs). For purposes of
this Section 12.2.2, “Nonexclusive Clusterin ASOs” means ASOs that act
predominantly by [***] Clusterin [***] or that are [***] to Clusterin [***] provided, however that Nonexclusive Clusterin ASOs will not
include any ASO that (a) acts to modulate [***] Clusterin and
(b) either (i) has the same [***] as OGX-011 or (ii) at the time
of such Discontinuance or breach OncoGenex, its Affiliates or sublicensees had
[***] (each, an “Exclusive ASO”). Within ninety (90) days following the
effectiveness of any termination by Isis, pursuant to this Section 12.2.2,
of the [***] OncoGenex shall provide Isis with a list describing the [***].


 


ARTICLE 13

MISCELLANEOUS


 


Section
13.1         Force Majeure.   Except for any failure to make any
payment required under Article 6, neither Party will be held liable or
responsible to the other Party or be deemed to have defaulted under or breached
this Agreement for failure or delay in fulfilling or performing any term of
this Agreement when such failure or delay is caused by or results from events
beyond the reasonable control of the non-performing Party, including fires,
floods, embargoes, shortages, epidemics, quarantines, war, acts of war (whether
war be declared or not), insurrections, riots, civil commotion, strikes,
lockouts or other labor disturbances, acts of God or acts, omissions or delays
in acting by any governmental authority. The non-performing Party will notify
the other Party of such force majeure within ten (10) days after such
occurrence by giving written notice to 


 


22

















 


the other Party stating
the nature of the event, its anticipated duration, and any action being taken
to avoid or minimize its effect. The suspension of performance will be of no
greater scope and no longer duration than is necessary and the non-performing
Party will use Commercially Reasonable Efforts to remedy its inability to
perform; provided, however, that
in the event the suspension of performance continues for one-hundred and eighty
(180) days after the date of the occurrence, the Parties will meet to discuss
in good faith how to proceed in order to accomplish the development and
commercialization of the Product as set forth in this Agreement.


 


Section
13.2         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 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 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 or (ii) Isis may assign or transfer its
rights under Article 6 (but no liabilities) to a Third Party in connection
with a royalty (or payment) factoring transaction. Any purported assignment or
transfer in violation of this Section will be void ab initio and of no force or effect.


 


Section
13.3         Severability. If any provision of
this Agreement is held to be illegal, invalid or unenforceable by a court of
competent jurisdiction, such adjudication will not affect or impair, in whole
or in part, the validity, enforceability, or legality of any remaining portions
of this Agreement. All remaining portions will remain in full force and effect
as if the original Agreement had been executed without the invalidated,
unenforceable or illegal part.


 


Section
13.4         Governing Law. This Agreement will
be governed by and construed in accordance with the laws of the Province of
British Columbia without reference to any rules of conflicts of laws.


 


Section
13.5         Notices. All notices or other
communications that are required or permitted hereunder will be in writing and
delivered personally with acknowledgement of receipt, sent by facsimile (and
promptly confirmed by personal delivery, registered or certified mail or
overnight courier as provided herein), sent by nationally-recognized overnight
courier or sent by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:  If            to
OncoGenex, to:


 


OncoGenex Technologies Inc.


#400 – 1001 West Broadway


Vancouver, BC V6H 4B1


Attention: President


Facsimile: (604) 736-3687


 


23

















 


with a copy to:


 


Doug Seppala


DuMoulin Black LLP


10th Floor, 595 Howe Street


Vancouver, British Columbia V6C 2T5


Facsimile: (604) 687-3635


 


If to Isis, to:


 


Isis Pharmaceuticals, Inc.


1896 Rutherford Road


Carlsbad, California 92008-7208


Attention: Executive Vice President


Facsimile: (760) 268-4922


 


with a copy to:


 


Attention: 
General Counsel


Facsimile: (760) 603-2707


 


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 13.6 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
13.6         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, including without limitation
the Original Collaboration Agreement. For clarity, the Parties acknowledge and
agree that the Original Collaboration Agreement remains in effect in accordance
with its terms with respect to the period between the Start Date and the
Amendment Effective Date. 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
13.7         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. Neither Party will have the authority to
make any statements, representations or commitments of any kind, or to take any
action, which will be binding on the other, without the prior written consent
of the other to do so. All persons employed by a Party will be employees of
such Party and not of the other Party and all costs and 


 


24

















 


obligations incurred by
reason of any such employment will be for the account and expense of such
Party.


 


Section
13.8         Cooperation. Isis will provide
reasonable assistance to OncoGenex in respect of partnering discussions, financing
activities and regulatory filings to support the development and
commercialization of the Product. Notwithstanding the foregoing, Isis will not
be required to modify or waive any provision of this Agreement in connection
with partnering discussions or financing activities to support the development
and commercialization of the Product.


 


Section
13.9         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. The waiver by either Party hereto of any right hereunder or of
the failure to perform or of a breach by the other Party will not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other Party whether of a similar nature or otherwise.


 


Section
13.10       Counterparts. This Agreement may
be executed in two (2) or more counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same
instrument.


 


Section
13.11       No Benefit to Third Parties. The
representations, warranties, covenants and agreements set forth in this
Agreement are for the sole benefit of the Parties hereto and their successors
and permitted assigns, and they will not be construed as conferring any rights
on any other parties.


 


Section
13.12       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 or as the other Party may reasonably request
in connection with this Agreement or to carry out more effectively the
provisions and purposes, or to better assure and confirm unto such other Party
its rights and remedies under this Agreement.


 


Section
13.13       References. Unless otherwise
specified, (a) references in this Agreement to any Article, Section,
Schedule or Exhibit will mean references to such Article, Section, Schedule or
Exhibit of this Agreement, (b) references in any section to any clause are
references to such clause of such section, and (c) references to any
agreement, instrument or other document in this Agreement refer to such
agreement, instrument or other document as originally executed or, if
subsequently varied, replaced or supplemented from time to time, as so varied,
replaced or supplemented and in effect at the relevant time of reference
thereto.


 


Section
13.14       Construction. Except where the
context otherwise requires, wherever used, the singular will include the
plural, the plural the singular, the use of any gender will be applicable to
all genders and the word “or” is used in the inclusive sense (and/or). The
captions of this Agreement are for convenience of reference only and in no way
define, describe, extend or limit the scope or intent of this Agreement or the
intent of any provision contained in this Agreement. The term “including” as
used herein will mean including, without limiting the generality of any
description preceding such term. The language of this Agreement will be deemed
to be the


 


25

















 


language mutually chosen
by the Parties and no rule of strict construction will be applied against
either Party hereto. Appendices to this Agreement, or added hereto according to
the terms of this Agreement, are made part of this Agreement.


 


Section
13.15       Dispute
Resolution Regarding Diligence.


 


13.15.1  General. The Parties will
negotiate in good faith and use reasonable efforts to settle any dispute,
controversy or claim arising regarding whether (i) OncoGenex has satisfied
its diligence obligations under Section 4.4 of this Agreement or (ii) in
the event of an OncoGenex Mandate, Isis has refused to remove the applicable
infringement using commercially appropriate steps, by first referring such
dispute to the Chief Executive Officers of each of the Parties (or their
respective designees) who will use their good faith efforts to mutually agree
upon the resolution of the dispute. If any dispute is not resolved by the Chief
Executive Officers of the Parties (or their designees) within 30 days after
such dispute is referred to them, and a Party wishes to pursue the matter, each
such dispute, controversy or claim will be finally resolved by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (“AAA”), and judgment on the arbitration award may be
entered in any court having jurisdiction thereof. The arbitration will be
conducted by a panel of three persons experienced in the pharmaceutical
business: within 30 days after initiation of arbitration, each party will select
one person to act as arbitrator and the two party-selected arbitrators will
select a third arbitrator within 30 days of their appointment. If the
arbitrators selected by the parties are unable or fail to agree upon the third
arbitrator, the third arbitrator will be appointed by the AAA. No individual
shall 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 13.15. The place of arbitration will be Seattle, Washington.
Either Party may apply to the arbitrators for interim injunctive relief until
the arbitration award is rendered or the controversy is otherwise resolved.


 


13.15.2  Expenses. Except as
expressly provided herein, each Party will bear its own costs and expenses and
attorneys’ fees and an equal share of the arbitrators’ and any administrative
fees of arbitration. The arbitrators shall have the authority to grant specific
performance and to allocate between the Parties the costs of arbitration in
such equitable manner as they determine. Notwithstanding the foregoing, if a
Party has been found to be in material breach of this Agreement, the defaulting
Party will be responsible for both Parties’ 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.


 


13.15.3  Procedure. Except to the
extent necessary to confirm an award or as may be required by law, neither a
Party nor an arbitrator may disclose the existence, content, or results of an
arbitration without the prior written consent of both Parties. In no event will
an 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 Province of British Columbia statute of limitations.


 


13.15.4  Speedy Resolution. The
Parties intend, and shall 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 arbitration, and the arbitrators shall conduct the
arbitration so as to resolve the dispute as expeditiously as possible.


 


26

















 


13.15.5  Awards. All awards shall be
in writing and shall state reasons. Executed copies of all awards shall be
delivered by the arbitrators to the Parties as soon as is reasonably possible.
All awards of the arbitrators shall be final and binding on the Parties, and
there shall be no appeal of any such award whatsoever. The Parties undertake to
satisfy any award without delay.


 


13.15.6  Except as otherwise
specified in the first sentence of Section 13.15.1, no other disputes,
controversies or claims shall be subject to this Section 13.15.


 


The
remainder of this page intentionally left blank.


 


27

















 


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.


 


	
  ONCOGENEX TECHNOLOGIES INC.

  	
  ISIS PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Per:

  	
  /s/ Scott Cormack

  	
   

  	
  Per:

  	
  /s/ B. Lynne Parshall

  
	
   

  	
   

  
	
  Scott D.
  Cormack,

  	
  B. Lynne
  Parshall

  
	
  President &
  CEO

  	
  COO and CFO

  
					



 


28
















 


APPENDIX
A


 


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 first party.
For purposes of this definition only, “control” and, with correlative meanings,
the terms “controlled by” and “under common control with” will mean
(a) 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, and
(b) the ownership, directly or indirectly, of more than fifty percent
(50%) of the voting securities or other ownership interest of a party; provided
that, if local law restricts foreign ownership, control will be established by
direct or indirect ownership of the maximum ownership percentage that may,
under such local law, be owned by foreign interests. In addition, Regulus
Therapeutics, LLC will not be considered an Affiliate of Isis.


 


 “Applicable Law” means the 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.


 


“ASO” means an antisense oligonucleotide compound
(reverse of the sense strand messenger RNA), or analog, mimic or mimetic
thereof, having a sequence that is at least 6 bases long and that modulates
expression of a gene target via the binding, partially or wholly, of such
compound to a mRNA or pre-mRNA of such gene target.


 


“Business
Day” means any day,
other than Saturday, Sunday or any statutory holiday in the Province of British
Columbia or the United States.


 


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


 


“Clusterin” means the gene target, official symbol CLU,
which is also referred to as Testosterone Repressed Prostatic Message -2
(TRPM-2), and Sulphated Glycoprotein-2 (SGP-2).


 


“Commercialization
Agreement” has the meaning set forth in 6.2.2.


 


“Commercially
Reasonable Efforts”
means, with respect to the research, development, manufacture, release or
commercialization of the Product, efforts and resources commonly used in the
biotechnology industry for products of similar commercial potential at a
similar stage in its lifecycle, taking into consideration their safety and
efficacy, cost to develop, priority in relation to other products under
development by the other Party, the competitiveness of alternative products,
proprietary position, the likelihood of regulatory approval, profitability, and
all other relevant factors.


 


A-1

















 


“Competing
Product” means a
product containing an ASO that (i) acts predominantly by [***]
Clusterin [***] or that is [***] Clusterin [***] (ii) [***] covered by a
Valid Claim within the Product-Specific Technology Patents in the relevant country, but for the
expiration, invalidity, revocation or unenforceability of such Product-Specific
Technology Patents (such invalidity, revocation or unenforceability as determined by a decision of a court or other
governmental agency of competent jurisdiction, unappealable or unappealed), and (iii) [***] by a Valid Claim within the Isis Core
Technology Patents in the relevant country.


 


“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. For purposes of this Agreement,
notwithstanding the Party that disclosed such information or know-how, all
information or know-how of OncoGenex will be Confidential Information of
OncoGenex, and all information and know-how of Isis will be Confidential
Information of Isis.


 


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 Party that Controls such information and know-how 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 Party
that Controls such information and know-how.


 


A-2

















 


Specific aspects or details
of Confidential Information will not be deemed to be within the public domain
or in the possession of a Party merely because the Confidential Information is
embraced by more general information in the public domain or in the possession
of such Party. Further, any combination of Confidential Information will not be
considered to be in the public domain or in the possession of a Party merely
because individual elements of such Confidential Information are in the public
domain or in the possession of such Party unless the combination and its
principles are in the public domain or in the possession of such 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, transfer, 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.


 


“Discontinuance”
means OncoGenex
voluntarily elects to abandon [***]
developing OGX-011 and/or Products, as evidenced by a written communication
from an authorized officer of OncoGenex to Isis.


 


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


 


“FTE” means the equivalent of the work of one
employee full time for one year (consisting of at least a total of 45.5 weeks
or 1,820 hours per year (excluding vacations and holidays) of work on or
directly related to the Agreement), carried out by an Isis employee. The FTE
rate will be (i) [***]
(U.S.) per FTE for any of the following activities: drug substance
manufacturing; analytical chemistry; process chemistry; formulation; raw
material ordering and handling; quality control; or manufacturing technology
transfer; and (ii) [***]
(U.S.) per FTE for any of the following activities:  toxicology; pharmacokinetics/metabolism;
regulatory; clinical development; or data management. These FTE rates will be
adjusted upward on a Calendar Year basis commencing January 1, 2009 (and on
January 1 of each year thereafter during the Term of this Agreement) by a
factor which reflects [***] for [***] during the Term of the Agreement when
compared to the [***] in the
preceding year.


 


“GAAP” means generally accepted accounting
principles of the United States consistently applied.


 


“Generic Product(s)” means a product or products containing an active
ingredient having the same or substantially the same chemical structure as the
applicable ASO targeting Clusterin that is the active ingredient contained in
the applicable Product, whether approved under an NDA, ANDA, an application
under 505(b)(2), or any equivalent thereof, or otherwise by a Regulatory
Authority within the applicable country.


 


[***] means [***], a biotech
company with head office in [***].


 


[***]


 


A-3

















 


[***] means those patents listed in Appendix B.


 


“Improvements” means any
enhancement or improvement (in each case, whether or not patented or
patentable) to the Isis Core Technology or the Isis Manufacturing Technology.


 


“Isis Core
Technology” means any
discovery, invention, composition, method, process, procedure, data,
information, know-how or other technology (in each case, whether or not
patented or patentable) that is Controlled by Isis as of the Amendment
Effective Date and that either (i) was not conceived, discovered,
developed or otherwise made under or in connection with the Original
Collaboration Agreement, and the application of which has utility only with
respect to Products, or (ii) is
necessary or useful for the development or commercialization of Products,
and the application of which has utility both with respect to Products and other compositions. Isis Core Technology
excludes the Isis Manufacturing Technology and Product-Specific Technology.


 


“Isis Core
Technology Patents”
means Patents Controlled by Isis that claim the Isis Core Technology on
the Amendment Effective Date; provided however that Isis Core Technology
Patents excludes the Isis Manufacturing Patents and Product-Specific Technology
Patents. The Isis Core Technology Patents include, but are not limited to, the
patents listed on Appendix D attached hereto.


 


“Isis Manufacturing Patents”
means Patents Controlled by Isis that claim the manufacturing production and
release processes (a) that were used to manufacture MOE Gapmers on the
Amendment Effective Date and embodied in the [***], or (b) that are
Controlled by Isis on or after the Amended Effective Date and otherwise are
necessary, or are required by a Regulatory Authority, to be used in the
manufacture of a Product. The Isis Manufacturing Patents are listed on Appendix
E attached hereto. Manufacturing for this purpose includes synthesis,
purification and analysis.


 


“Isis Manufacturing Technology”
means (a) the Isis Manufacturing Patents, (b) the Release Method, and
(c) all other trade secret, know-how or other information or technology
(i) that is Controlled by Isis as of the Amendment Effective Date and is
applicable to the manufacture, production or release processes for the Product
and embodied in the [***] or (ii) that is Controlled by Isis after the Amendment
Effective Date and otherwise is necessary, or is required by a Regulatory
Authority, to be used in the manufacture of a Product.


 


“Isis
Patent Rights” means
Isis Core Technology Patents and Isis Manufacturing Patents.


 


“Joint
Patents” means all
Patents that claim, cover or disclose the Joint Technology.


 


“Joint
Technology” means any
discovery, invention, composition, method, process, procedure, data,
information, trade secret, know-how or other technology (in each case, whether
or not patented or patentable) which is conceived, discovered, developed or
otherwise made jointly by Isis and OncoGenex (as determined in


 


A-4

















 


accordance with U.S. patent law). Joint Technology excludes the
Product-Specific Technology.


 


“MOE
Gapmer” means “2 ́MOE
Gapmers” or an 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 (MOE).


 


“Net Sales” means the gross invoice price of the Product
sold by OncoGenex and sublicensees to a Third Party which is not a sublicensee
of the selling party (unless such sublicensee is the end user of the Product,
in which case the amount billed therefor will be deemed to be the amount that
would be billed to a Third Party in an arm’s-length transaction) for sales of
such Product to such end users less the following items, as allocable to such
Product (if not previously deducted from the amount invoiced): (i) cash,
quantity and trade discounts, credits, allowances or other price reductions for
such Product given to such end user, (ii) credits, discounts, rebates,
chargebacks or allowances additionally granted (A) upon returns,
rejections or recalls (except where any such recall arises out of the Party or
its sublicensee’s gross negligence, willful misconduct or fraud) or
(B) for nonconforming, damaged, out-dated and returned Product,
(iii) freight, shipping and insurance charges, (iv) taxes, duties,
tariffs, surcharges or other governmental charges (other than income taxes),
(v) government mandated rebates, and (vi) a reasonable allowance for
uncollectible or bad debts determined in accordance with generally accepted
accounting principles consistently applied.


 


“Nonexclusive
Clusterin ASO” has
the meaning set forth in Section 12.2.2.


 


“Non-Royalty
Revenue” means all Revenue
received by OncoGenex with the exception of Royalty Revenue and OncoGenex
Direct Sales.


 


[***]


 


[***]


 


[***]


 


“OGX-011” means an antisense inhibitor of Clusterin
having the sequence [***] where
underlined residues are 2’-methoxyethylnucleosides (MOE) and phosphorothioate
linkages throughout, also referred to as OGX-011 or ISIS 112989.


 


“OncoGenex
Direct Sales” means
Net Sales made by OncoGenex to a Third Party which is not a sublicensee of
OncoGenex.


 


“OncoGenex
Patent Rights” means
any Patents Controlled by OncoGenex.


 


“OncoGenex
Technology” means any
discovery, invention, composition, method, process, procedure, data,
information, trade secret, know-how or other technology (in each case, whether
or not patented or patentable) that is Controlled by


 


A-5

















 


OncoGenex and that is or relates to an ASO targeting Clusterin or a
method of using an antisense inhibitor of Clusterin, or otherwise is necessary
or useful for the development, manufacture, production or commercialization of
Products. OncoGenex Technology excludes Product-Specific Technology.


 


“OncoGenex Technology Patents”
means all Patents that claim, cover or disclose the OncoGenex Technology.


 


“Patents” will include (i) all U.S. patents and
patent applications, (ii) any substitutions, divisions, continuations,
continuations-in-part, 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 (iii) any foreign or international equivalent of any of
the foregoing.


 


“Permitted License” means a
license under the Isis Core Technology Patents or the Isis Manufacturing
Patents (but not under the Product-Specific
Technology Patents) (i) granted by Isis to a Third Party to use
ASOs solely to conduct such Third Party’s own internal Research, or
(ii) granted by Isis to a Third Party (provided that such Third Party is
[***] and neither such Third Party nor any of its Affiliates is [***] to
manufacture ASOs solely for unaffiliated third parties; provided,
however, in each case, any such ASOs are not specified in such
license or a related document to be ASOs (a) that act predominantly by [***]
Clusterin [***] or (b) that are [***] Clusterin [***] or products containing
such ASOs. For purposes of clarification, a Permitted License shall not permit
Isis or its Affiliates to supply to a Third Party ASOs that act predominantly
by [***] Clusterin [***] or that are [***] Clusterin [***] or products
containing such ASOs.


 


“Product” means any pharmaceutical preparation (in
intravenous, subcutaneous, oral or any other formulation) containing as the
sole active pharmaceutical ingredient either (a) OGX-011, or (b) any
other ASO targeting Clusterin that either (i) was identified under the
Original Collaboration Agreement or (ii) is identified under
Section 4.1.3. For clarity, the Product may be used in association with
other products such as chemotherapy, hormone ablation therapy and radiation
therapy  and the immediately
preceding sentence does not limit such intended use.


 


“Product-Specific Technology”
means any discovery, invention, composition, method, process, procedure, data,
information, trade secret, know-how or other technology (in each case, whether
or not patented or patentable) which is conceived, discovered, developed or
otherwise made solely by Isis or OncoGenex, or jointly by Isis and OncoGenex,
under or in connection with the Original Collaboration Agreement or this Agreement,
and the application of which has utility only with respect to Products. For
purposes of clarification Product-Specific Technology excludes the Isis
Manufacturing Technology and Isis Core Technology.


 


“Product-Specific
Technology Patents”
means all Patents that claim, cover or disclose Product-Specific Technology.
Product-Specific Technology Patents include, but are not limited to the patents
listed on Appendix G attached hereto. For purposes of clarification, any
Product-Specific Technology Patents assigned to OncoGenex as set


 


A-6

















 


forth in Section 4.2.1 or 8.2.2 will still be considered
Product-Specific Technology Patents for determining the royalty term and
applicable royalty rates under Article 6.


 


“Qualified Partner” means a corporation or other entity
(a) whose primary business is the commercialization of pharmaceutical
products, (b) which, on its own or in connection with a Third Party, does
not operate a contract oligonucleotide manufacturing business and (c) is
approved as Qualified Partner by Isis at the request of OncoGenex (or its
Affiliate), such approval not to be unreasonably withheld.


 


“Registration
Clinical Trial” means
a clinical study (whether or not denominated as a “Phase III” clinical study
under applicable regulations) in human patients that is of size and design
appropriate to establish that the Product is safe and effective for its
intended use, to define warnings, precautions and adverse reactions that are
associated with the Product in the dosage range to be prescribed, and to
support approval from the applicable Regulatory Authority sufficient for the
manufacture, distribution, use and sale of the Product in such jurisdiction in
accordance with Applicable Laws.


 


“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.


 


“Release
Method” means the
methods used by Isis as at the Amendment Effective Date for the release of
OGX-011 utilizing liquid chromatography – mass spectrometry and specified in
Specification outlined in [***].


 


“Research” means in vitro or in vivo
research, excluding any and all uses in humans.


 


“Revenue” means all revenues, receipts, monies, and the
fair market value of all other consideration directly or indirectly collected
or received whether by way of cash or credit or any barter, benefit, advantage,
or concession received OncoGenex relating to the sale, license or any other
commercial transaction involving the Product, with the exception of the
following: (i) any consideration received for the reimbursement for
research and development activities and (ii) any consideration received
for the fair market portion of any sale of equity or quasi-equity securities
including, without limitation, common shares and preferred shares.


 


A-7
















 


“Royalty
Due Date” means March
31, June 30, September 30 and December 31 of each year during the term of this
Agreement.


 


“Royalty
Revenue” means, with
respect to a Product in a country, all Revenue received by OncoGenex that is
based on a percentage of Net Sales of such Product by a Third Party sublicensed
to sell such Product in such country.


 


“Start Date” means November 16, 2001.


 


 “Supply
Chain Network” will include the names, contact information, and
supply description of all providers, whether currently used or alternative
preferred suppliers as of the Amendment Effective Date, and who supply modified
and unmodified nucleotides, solid support and other reagents and raw materials
specified in the Isis Manufacturing Technology.


 


“Third
Party” means any party
other than Isis or OncoGenex.


 


“Third
Party Payments” means
royalties, milestones, and other payments owing to Third Parties, including
payments as set forth in Section 6.3 and Section 6.5


 


“Valid
Claim” means either
(a) a claim of an issued and unexpired patent included within the Isis
Patent Rights, which has not been held permanently revoked, unenforceable or
invalid by a decision of a court or other governmental agency of competent
jurisdiction, unappealable or unappealed within the time allowed for appeal,
and which has not been admitted to be invalid or unenforceable through reissue
or disclaimer or otherwise or (b) a claim of a pending patent application
included within the Isis Patent Rights, which was filed in good faith and has
not been abandoned, finally rejected or expired without the possibility of
appeal or refiling, provided however, that Valid Claim will exclude any such
pending claim in an application that has not been granted within (x) [***] years following the earliest filing date for
such application in the United States (unless and until such claim is granted),
and (y) [***] years
following the earliest filing date for such application outside of the United
States (unless and until such claim is granted).


 


A-8

















 


APPENDIX
B


 


[***]


 


	
   

  	
   

  	
  Docket #

  	
   

  	
  Country/Treaty

  	
   

  	
  Patent/

  Application #

  	
   

  	
  Title

  	
   

  	
  Issue
  Date

  
	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  



 


B-1

















 


APPENDIX
C


 


[***]


 


	
  Assignee

  	
   

  	
  Docket #

  	
   

  	
  Country/Treaty

  	
   

  	
  Patent/

  Application #

  	
   

  	
  Title

  	
   

  	
  Issue
  Date

  
	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  



 


C-1

















 


APPENDIX
D


 


ISIS
CORE TECHNOLOGY PATENTS


 


	
  Assignee

  	
   

  	
  Docket #

  	
   

  	
  Country/Treaty

  	
   

  	
  Patent/

  Application #

  	
   

  	
  Title

  	
   

  	
  Issue
  Date

  
	
  ISIS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  



 


D-1

















 


APPENDIX
E


 


ISIS
MANUFACTURING PATENTS


 


	
  Technology

  	
   

  	
  Docket #

  	
   

  	
  Country/Treaty

  	
   

  	
  Patent/

  Application #

  	
   

  	
  Title

  	
   

  	
  Filing Date

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  



 


E-1

















 


APPENDIX
F


 


[***]


 


F-1

















 


APPENDIX
G


 


PRODUCT-SPECIFIC
TECHNOLOGY PATENTS


 


	
  Docket No.

  	
   

  	
  Country

  	
   

  	
  Patent/

  Applicaion #

  	
   

  	
  Filing

  Date

  	
   

  	
  Issue Date

  	
   

  	
  Title

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  



 


G-1