Exhibit 10.13


 


CONFIDENTIAL
TREATMENT REQUESTED


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


 


Confidential
— Execution Version


 


AMENDED &
RESTATED LICENSE AGREEMENT


 


THIS AMENDED & RESTATED  LICENSE AGREEMENT
(the “Agreement”) is made and
entered into effective as of November 30, 2009 (the “Restatement
Date”), by and between ATLANTIC
PHARMACEUTICALS LIMITED (formerly
ATLANTIC HEALTHCARE (UK) LIMITED registered number 6025726), whose
registered office is MoFo Notices Limited, 7th Floor, City Point, One Ropemaker Street,
London EC2Y 9AW (“Atlantic”) and ISIS PHARMACEUTICALS, INC., having principal offices at 1896
Rutherford Road, Carlsbad, CA 92008 (“Isis”).
Atlantic and Isis each may be referred to herein individually as a “Party,” or collectively as the “Parties.”


 


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


 


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


 


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


 


ARTICLE
1 -


 


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


 


Section 1.1            Definitions.


 


1.1.1       Capitalized terms used in this Agreement
and not otherwise defined herein have the meanings set forth in Appendix 1.


 


Section 1.2            Amendment and Restatement;
Reversion of Rights; Data Assignment to Isis.


 


1.2.1       Amendment and Restatement; Reversion of Rights.  Effective as of the Restatement Date,
notwithstanding anything to the contrary in the Original Agreement (i) this
Agreement restates, supersedes, and terminates the Original Agreement in its
entirety, and (ii) except as otherwise expressly provided in this
Agreement, the Original Agreement (including all licenses and other rights
granted thereunder) is deemed void ab initio.
Therefore, for the


 


1





















 


avoidance of doubt, (x) any rights and licenses granted by Isis to
Atlantic under the Original Agreement and not expressly granted by Isis to
Atlantic under this Agreement (the “Reverted Rights”),
automatically revert back to Isis as of the Restatement Date as though such
licenses and rights were never granted to Atlantic under the Original
Agreement, and (y) that certain Subscription and Share Exchange Agreement
dated March 16, 2007 (the “Subscription and Share
Exchange Agreement”) will (A) be unaffected by the
termination of the Original Agreement, and (B) continue in full force and
effect in accordance with its terms. 
Atlantic agrees, at Isis’ request and expense, to execute, verify and
deliver such documents and perform such other acts (including appearances as a
witness) as Isis may reasonably request for use in applying for, obtaining,
confirming, sustaining and/or enforcing Isis’ rights relating to such Reverted
Rights.


 


1.2.2       Assignment
of Isis Data to Isis.  Effective as of the Restatement Date,
Atlantic hereby assigns to Isis all of Atlantic’s right, title and interest in
and to (i) the Isis Data, and (ii) any other Regulatory
Documentation, data, results and information related to testing and studies of
Alicaforsen (including clinical data, analytical test results and non-clinical
pharmacology and safety data) in the possession of Atlantic on the Restatement
Date, to the extent necessary for the development and commercialization of
products covered by the Reverted Rights. In the event any of the Isis Data and
any other Regulatory Documentation, data, results and information related to
testing and studies of Alicaforsen can be used for development and
commercialization of both Alicaforsen Products and products covered by the
Reverted Rights, then such data shall not be assigned by Atlantic to Isis,
however, Isis shall have a non-exclusive, royalty-free, fully-paid up,
worldwide license to use such data for products covered by the Reverted Rights.


 


ARTICLE 2 - 

ALICAFORSEN GRANT OF RIGHTS


 


Section 2.1            Alicaforsen License Grant.


 


2.1.1       Subject
to the terms and conditions of this Agreement, Isis hereby grants to Atlantic:


 


(i)            an exclusive, worldwide license under the Alicaforsen Patents and the
ICAM-1 Specific Patents solely to develop, make, have made, use, sell, offer
for sale, have sold and import Alicaforsen API and Alicaforsen Products. The
license granted to Atlantic under this Section 2.1.1(i) is
sublicensable only in connection with a license of rights to an Alicaforsen
Product to a Third Party for the continued development, manufacture and
commercialization of that Alicaforsen Product in accordance with the terms of
this Agreement; and


 


(ii)           a non-exclusive, worldwide license under the Excluded Manufacturing IP
solely to make and have made Alicaforsen API. The license granted to Atlantic
under this Section 2.1.1(ii) is sublicensable to a Third Party
for the manufacture of Alicaforsen API in accordance with the terms of this
Agreement.


 


2

















 


Section 2.2            Data Transfer.


 


2.2.1       After
the Effective Date, Isis transferred and assigned to Atlantic all of Isis’
right, title and interest in and to (i) the Regulatory Documentation,
data, results and information related to testing and studies of Alicaforsen
(including clinical data, analytical test results and non-clinical pharmacology
and safety data) in the possession of Isis on the Effective Date to the extent
such data, results and/or information were necessary for the continued
development and commercialization of Alicaforsen (“Isis
Data”), and (ii) the know how which was owned by or licensed
to Isis at the Effective Date that related to the formulation of Alicaforsen
from Alicaforsen API, but excluding the
Excluded Manufacturing IP (the “Isis Manufacturing Know
How”).  As of the
Restatement Date, Atlantic will use such Isis Data and Isis Manufacturing Know
How solely to the extent necessary to manufacture, develop and/or commercialize
Alicaforsen API and/or Alicaforsen Products.


 


Section 2.3            No
Implied Licenses.  All rights in and to the Alicaforsen Patents,
the ICAM-1 Specific Patents, and the Excluded Manufacturing IP not expressly
licensed to Atlantic under Section 2.1, and any other Patents or
know-how of Isis or its Affiliates, are hereby retained by Isis or its
Affiliates. Except as expressly provided in Section 2.1, Isis will
not be deemed by estoppel or implication to have granted Atlantic any license
or other right with respect to any intellectual property of Isis. Nothing in
this Agreement will prevent Isis from practicing the Alicaforsen Patents, the
ICAM-1 Specific Patents, or the Excluded Manufacturing IP for products other
than Alicaforsen Products.


 


ARTICLE
3 - 

ATLANTIC PRODUCT DEVELOPMENT


 


Section 3.1            Development/Commercialization/Regulatory
Responsibilities.


 


3.1.1       Commercially
Reasonable Efforts. Unless
Isis exercises its reversion rights under Section 11.2,  Atlantic is fully responsible for the continued development
and commercialization of Alicaforsen Products and will use Commercially
Reasonable Efforts to develop Alicaforsen Products for all commercially
reasonable indications, including Alicaforsen Products for the treatment of
Pouchitis and to make its First Commercial Sale of an Alicaforsen Product for
the treatment of Pouchitis in the USA and Europe as soon as practicable.
Atlantic hereby assumes all regulatory responsibilities in connection with
Alicaforsen Products, including sole responsibility for all related Regulatory
Documentation and for obtaining all Regulatory Approvals. Atlantic will comply
with all Applicable Laws and the Quality Standard in connection with the
development and commercialization of Alicaforsen Products. For the avoidance of
doubt, any sublicensee that enters into a Sublicense with Atlantic will use
Commercially Reasonable Efforts in accordance with this Agreement to develop
and commercialize any Alicaforsen Products that are the subject of such
Sublicense, and Atlantic will ensure that such efforts are undertaken.


 


3.1.2       Development
Plan. Without
limiting any of the foregoing in Section 3.1.1, Atlantic will use
Commercially Reasonable Efforts to implement and perform the initial
Development Plan approved by both Atlantic and Isis as attached to this
Agreement as Appendix 4 (the “Initial Development Plan”),
which contains a Gantt chart of Atlantic’s good-faith development plan for
Alicaforsen as of the Restatement Date which supersedes all previous


 


3

















 


development plans.  Atlantic may
update the Initial Development Plan within 30 days following the Restatement
Date so long as (i) any such update does not constitute a material
modification of, or addition to, the Initial Development Plan, and (ii) Atlantic
promptly provides Isis with a copy of such modified Initial Development Plan
with a summary/explanation of any modifications thereto. Following the
Restatement Date, Atlantic will use Commercially Reasonable Efforts to arrange
and participate in “advisory” meetings with the FDA and EMEA (or any other
Regulatory Authority) as soon as practicable (each, an “Advisory
Meeting”), and following each such Advisory Meeting, Atlantic
will present the information arising from such meeting(s) to the JDC to,
among other things, discuss any necessary modifications to the Development
Plan.  The Development Plan will be
updated and modified only as determined by the JDC on a periodic basis under Section 3.2.1,
including following the occurrence of any Advisory Meetings held between
Atlantic and the FDA and/or the EMEA (or any other Regulatory Authority).
Notwithstanding the foregoing, any Development Plan to be performed by one of
Atlantic’s sublicensees under a Sublicense will not require the approval of the
JDC so long as (i) such Development Plan is provided to the JDC for the
JDC’s review and comment and such sublicensee considers in good faith any
comments provided by the JDC, (ii) such Development Plan is not in
conflict with the terms and conditions of this Agreement, and (iii) such
sublicensee uses Commercially Reasonable Efforts to implement and perform such
Development Plan.


 


Section 3.2            Joint Development Committee.


 


3.2.1       To
promote the successful development of the Alicaforsen Products, the Parties
will establish a Joint Development Committee (the “JDC”),
which will be formed and will hold its first meeting within 90 days after the
Restatement Date, and will be comprised of two Isis representatives and two
Atlantic representatives (“Committee Members”).  A Party may replace any of its Committee
Member(s) by notice to the other Party. 
Each Committee Member shall be appropriately qualified and experienced in
order to make a meaningful contribution to JDC meetings.  The purpose of the JDC is to provide a forum
for the Parties to share information and knowledge on the on-going research and
development of the Alicaforsen Products, including sharing scientific direction
and data, discussing the current development and regulatory status of the
Alicaforsen Products, any Alicaforsen Product sublicensing development plans
with Third Parties, discussing regulatory or quality assurance issues in
relation to the Alicaforsen API, and reviewing, providing advice on, and
approving the Development Plan.  In
addition, at JDC meetings, Isis will apprise the JDC of any development
activities undertaken by Isis with respect to any Follow-On Products.  The JDC shall conduct its discussions in good
faith with a view to operating to the mutual benefit of the Parties and in
furtherance of the successful marketing of Alicaforsen Products. The JDC shall
meet at Isis’ corporate offices located in Carlsbad, California, USA where such
meeting is not held by video-conference or telephone conference, as often as
the Committee Members may determine but in any event not less than once per
calendar quarter.  Each JDC meeting shall
be chaired by a Committee Member nominated by Atlantic and Atlantic is
responsible for coordinating and ensuring that such communication and meetings
take place in a timely manner in accordance with this Agreement, and Isis shall
co-operate with Atlantic and will not unreasonably refuse requests for such
meetings. The JDC will strive to make decisions by majority vote, and record
such decisions in the minutes of the applicable JDC meeting. If, after good
faith discussions, the JDC is unable to decide a particular matter by majority
vote, such matter will be referred to the Executive Officers for final
resolution.  If the matter is not
resolved by the Executives Officers within 30 days, either Party may seek final
resolution of the matter in accordance with Section 14.4.


 


4

















 


3.2.2       The
JDC will continue in existence for three years after the Restatement Date,
subject to extension by mutual agreement of the Parties.


 


Section 3.3            Safety Database.


 


3.3.1       Isis maintains a database that includes information
regarding the tolerability of its drug compounds, individually and as a class,
including information discovered during pre-clinical and clinical development
(the “Isis Database”).  In an effort to maximize understanding of the
safety profile and pharmacokinetics of Isis compounds, Atlantic will cooperate
in connection with populating the Isis Database. Atlantic will provide Isis
with information concerning toxicology, pharmacokinetics, safety pharmacology
study(ies), serious adverse events and other safety information related to each
Alicaforsen Product as soon as practicable following the date such information
is available to Atlantic (but not later than 30 days after Atlantic’s receipt
of such information). In addition, in connection with any reported serious
adverse event, Atlantic will provide Isis (promptly following such event and
prior to any communication with a Regulatory Authority or ethics committee) in
a mutually acceptable format, the following patient data where it is reasonably
available to Atlantic once informed of a serious adverse event and any other
data Atlantic reasonably deems relevant to the Isis Database: (a) basic
statistics (including age, race, gender, weight, height); (b) medical
history; (c) concurrent medication usage; (d) particulars of the
event (verbatim term, MedDRA term & system organ class, onset date,
resolution date, relation to Alicaforsen Product, severity/seriousness,
outcome); (e) dosing history (dates, quantity of Alicaforsen Product
administered, method of administration); (f) chemistry and hematology lab
tests; and (g) ocular pressure. Atlantic will deliver all such information
to Isis for the Isis Database to: Isis Pharmaceuticals, Inc. 1896
Rutherford Road, Carlsbad, California 92008, Attention: Chief Medical Officer
(or to such other address/contact designated in writing by Isis). For clarity,
Atlantic shall be responsible for all safety and/or pharmacovigilance matters
relating to or arising from the development and commercialization of the
Alicaforsen Products and for making all adverse event reports to the relevant
Regulatory Authorities at the times and in the manner it deems appropriate to
comply with all Applicable Laws.


 


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


 


5

















 


Section 3.4            Reports. Atlantic agrees to keep Isis informed
with respect to activities and progress with the further development and
commercialization of Alicaforsen Products (including with respect to the
activities of Atlantic’s Affiliates and sublicensees), and agrees to provide to
Isis and the JDC every six months a summary of such activities and progress. In
accordance with Section 3.2.1, during the period Atlantic has a
right of first negotiation under Section 4.1, Isis agrees to keep
Atlantic informed with respect to Isis’ activities and progress with the
further development and commercialization of Follow-On Products by providing a
summary of any such activities at meetings of the JDC.


 


Section 3.5            [Not used]


 


Section 3.6            Supply of Existing  Alicaforsen API.


 


3.6.1       Isis
agrees to supply Atlantic with a quantity of Alicaforsen API that is in Isis’
possession as of the Restatement Date, reasonably sufficient to obtain
Regulatory Approval for an Alicaforsen Product for Pouchitis (but not to exceed
[***] kg) in the USA or Europe [***], in accordance with a clinical trial
program set forth in the Development Plan. 
For the avoidance of doubt, the [***] kg of Alicaforsen API supplied by
Isis prior to the Restatement Date has been supplied [***].


 


3.6.2       Atlantic
and Isis agree that, to the extent available from the stocks of Alicaforsen API
in Isis’ possession as of the Restatement Date, any other quantities of
Alicaforsen API required by Atlantic for the development and commercialization
of Alicaforsen Product may be purchased from Isis in a minimum order size of
[***]kg at a cost of [***] Dollars ($[***]) per gram until such stocks have
been exhausted.  As of the Restatement
Date, Isis has approximately (i) [***] kilograms of Alicaforsen API
available for sale, and (ii) [***] kilograms of Alicaforsen API in
quarantine with the possibility of release from such quarantine if certain
qualification study(ies) are performed (e.g., a
bridging toxicology study).  Isis will
hold such Alicaforsen API in quarantine for a period of [***] ([***]) years
after the Restatement Date for the benefit of Atlantic. If Atlantic has the
necessary study(ies) performed, at Atlantic’s expense, and such Alicaforsen API
is successfully released from quarantine in accordance with cGMP, Isis will
sell such [***] kilograms of Alicaforsen API to Atlantic at a cost of [***]
Dollars ($[***]) per gram.


 


3.6.3       All
Alicaforsen API ordered by Atlantic pursuant to Section 3.6 will be
shipped by Isis to Atlantic, EXW (Incoterms 2000) Isis’ premises, to the
destination specified in writing by Atlantic. 
All transportation and insurance costs are the sole responsibility of
Atlantic.  Isis warrants that each such
amount of Alicaforsen API supplied by Isis pursuant to Section 3.6;
(i) will have been manufactured in accordance with cGMP, (ii) meets
the specification for Alicaforsen API set out in the Regulatory Documentation
existing at the Restatement Date, (iii) have at least [***] months shelf
life remaining when delivered, and will be accompanied by a certificate of
analysis.


 


Section 3.7            Product Manufacturing
Responsibility.  Except as otherwise provided in this
Agreement, Atlantic acknowledges and agrees that it is solely responsible for
the manufacturing of Alicaforsen Product and Alicaforsen API, including,
without limitation, management of the overall manufacturing strategy and
tactics, CMC work, validation activities


 


6

















 


and batches, formulation, contract manufacturer
selection for finished Alicaforsen Product, associated audits, and stability
testing.  For the avoidance of doubt,
except as expressly set forth in Section 3.6.1 and Section 3.6.2
of this Agreement, neither Atlantic nor Isis will have any obligations to one
another with respect to the manufacture or supply of Alicaforsen API or
Alicaforsen Product, and Atlantic is licensed under Section 2.1.1
to make and/or have made Alicaforsen API and Alicaforsen Product itself or by a
Third Party, including, without limitation, by an Enabled CMO.


 


ARTICLE
4 - 

FOLLOW-ON PRODUCT ROFN; EXCLUSIVITY COVENANTS


 


Section 4.1            (a)   Follow-On Product ROFN.  For a period of [***] ([***]) years
following the Restatement Date, if Isis desires to (i) offer a Third Party
an exclusive license to the rights to Systemic Delivery and Enema Delivery for
a Follow-On Product (the “Follow-On Product License”),
or (ii) pursue a bona-fide offer from a Third Party for a Follow-On
Product License, then Isis will provide Atlantic with the right of first
negotiation for such Follow-On Product License by written notice to Atlantic
and will promptly deliver evaluation materials and any data reasonably relevant
to such Follow-On Product, at which time Atlantic will have [***] days to
notify Isis in writing whether Atlantic desires to obtain the Follow-On Product
License. If Atlantic provides Isis with timely written notice within such
[***]-day period that Atlantic desires to obtain the Follow-On Product License,
then Isis and Atlantic will negotiate in good faith, to conclude a written
license agreement within [***] days on commercially reasonable terms (including
Development Plan and funding commitments from Atlantic for such Follow-On
Product). If Atlantic fails to notify Isis within such [***]-day period that
Atlantic desires to obtain the Follow-On Product License or, if despite good
faith negotiations Atlantic and Isis are unable to reach agreement within [***]
days after Isis’ receipt of such notice from Atlantic, then, notwithstanding
anything to the contrary in this Agreement, (i) Isis will be free to
develop and commercialize the Follow-On Product on its own or with a Third
Party and may grant the Follow-On Product License (or grant a right to obtain
such an exclusive license) to any Third Party for any indication on economic
terms which, when taken as a whole, are no more favorable to any such Third
Party than the terms last offered under this Section 4.1 by
Atlantic to Isis, (ii) Atlantic will have no further rights to such
Follow-On Product, and (iii) Isis will have no further obligations to
Atlantic under this Agreement with respect to such Follow-On Product.


 


(b)           [***]
Standstill Period.
Notwithstanding the foregoing in Section 4.1, for a period of [***]
([***]) years following the Restatement Date (the “Standstill
Period”), Isis agrees (i) not to consummate a Follow-On
Product License with a Third Party that includes a license to develop and
commercialize a Follow-On Product intended to achieve a therapeutic effect in
the [***] (“[***]”), or (ii) if Isis
consummates such a Follow-On Product License that includes rights to develop
and commercialize a [***], such Third Party will be precluded from undertaking
development of the [***] during the Standstill Period.  For purposes of this Section 4.1(b),
a Third Party will be deemed to have initiated development of a [***] if such
Third Party initiates [***] with a Follow-On Product intended to achieve a
therapeutic effect in the [***].


 


7

















 


Section 4.2            Exclusive Partner.


 


4.2.1       During the
Term of this Agreement so long as Atlantic is developing and commercializing
Alicaforsen Products in accordance with the terms of this Agreement, Isis will
not develop or commercialize itself, and will not permit or grant any license
under the Alicaforsen Patents or the ICAM-1 Specific Patents to a Third Party
to develop or commercialize, any antisense drug compound designed to directly
inhibit ICAM-1. Notwithstanding the foregoing, subject to Section 4.1,
Isis retains the right to (i) use antisense compounds modulating ICAM-1
(including Alicaforsen) or to transfer such antisense compounds to Third
Parties in each case for non-commercial target validation purposes, and (ii) use,
manufacture, research, develop, and commercialize Follow-On Products and any
other compounds to inhibit ICAM-1 other than Alicaforsen Products, covered by
any of Isis’ intellectual property (including the Reverted Rights), and such
activities will not be interpreted as a breach of this Agreement.    For the avoidance of doubt, subject to Section 4.1,
Isis shall not be prohibited in any manner from using or exploiting any Isis
intellectual property (including the Reverted Rights) with products and
compounds other than Alicaforsen Products. 
Isis’ obligations under this Section 4.2.1 will
automatically terminate in the event of a Discontinuance.


 


4.2.2       To
avoid confusion in the marketplace, during the term of this Agreement, Atlantic
agrees not to develop or commercialize any product designed to directly inhibit
ICAM-1 other than the Alicaforsen Products, and will not permit or grant any
license under the Alicaforsen Patents or ICAM-1 Specific Patents to a Third
Party to develop or commercialize any such product other than the Alicaforsen
Products.  Notwithstanding the foregoing
sentence, in the event that Atlantic’s right of first negotiation for the
Follow-On Product License under Section 4.1(a) (i) is
voluntarily terminated by Atlantic by written notice to Isis, or (ii) terminates
in accordance with Section 4.1(a) and Atlantic and Isis have
not consummated the Follow-On Product License, this Section 4.2.2
will no longer apply to Atlantic.


 


ARTICLE
5 - 

[Not used]


 


ARTICLE
6 - 

FINANCIAL PROVISIONS


 


Section 6.1            Up-Front Payment by Atlantic.


 


6.1.1       In
consideration of the licenses granted to Atlantic under the Original Agreement
and Section 2.1.1 of this Agreement, following the Effective Date,
Isis and Atlantic executed the Subscription and Share Exchange Agreement,
pursuant to which Atlantic paid an up-front license fee of $[***] to Isis which
was satisfied (in full) by the issue to Isis of [***] ordinary shares in
Atlantic’s share capital, which were immediately exchanged for [***] ordinary
shares in Atlantic Healthcare’s share capital pursuant to the terms of the
Subscription and Share Exchange Agreement; provided, however,


 


8

















 


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


 


(b) if at any time during the Anti-Dilution Protection
Period Atlantic Healthcare issues any shares in the capital of Atlantic
Healthcare to [***] (as defined in the Subscription and Share Exchange Agreement)
and/or [***] (as defined in the Subscription and Share Exchange Agreement)
beyond [***] shares on terms not offered to other shareholders (including
Isis), then Isis will have the right to participate on the same terms as [***]
(as the case may be) so as to maintain its pro-rata shareholding in Atlantic
Healthcare (for which purpose all shares in Atlantic Healthcare previously
issued to Isis pursuant to the Original Agreement shall be deemed held by Isis,
irrespective of whether Isis remains the registered holder thereof) as further
provided for in the Subscription and Share Exchange Agreement.


 


6.1.2  In no event
will Atlantic issue shares to Isis that exceed the Equity Cap.


 


Section 6.2            Milestone Payments by Atlantic.


 


6.2.1       Atlantic
will pay to Isis the relevant milestone payment in cash or in an equivalent
amount of Atlantic Equity Securities (subject to the written consent of
Atlantic Healthcare Limited and in accordance with the terms of the
Subscription and Share Exchange Agreement), at Atlantic’s sole discretion, not
more than 60 days after achievement by Atlantic, its Affiliates or a
sublicensee, of each of the applicable events, as follows:


 


	
  Event

  	
   

  	
  Payment*

  	
   

  
	
  [***]

  	
   

  	
  US
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  US
  $

  	
  [***]

  	
   

  



 






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


 


9

















 


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


 


Section 6.3            Sublicense Revenue.


 


6.3.1       In
the event that Atlantic enters into a Sublicense, Atlantic will pay Isis [***]%
of the Sublicense Revenue (which does not include payments based on
commercial sales of an Alicaforsen Product, including royalties or
profit-sharing) from
such sublicensing of any Alicaforsen Product by Atlantic or its Affiliates.


 


6.3.2       Any
payment to Isis for its portion of Sublicense Revenue due under this Section 6.3
will be due within 30 days of Atlantic receiving such Sublicense Revenue.


 


Section 6.4            Royalty Payments by Atlantic.


 


6.4.1       For
any Alicaforsen Product sold by Atlantic or its Affiliates, in consideration of
Isis’ collaborative efforts and the licenses granted hereunder, Atlantic will
pay Isis royalties on Net Sales of each Alicaforsen Product in accordance with
the following table:


 


	
  Cumulative
  Net Sales

  	
   

  	
  Royalty Rate

  	
   

  
	
  Less than US $[***]

  	
   

  	
  [***]

  	
  %

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

  	
   

  	
  [***]

  	
  %

  
	
  Above US $[***]

  	
   

  	
  [***]

  	
  %

  



 


10






 












 


6.4.2       For
any Alicaforsen Products sold pursuant to a Sublicense, in consideration of
Isis’ collaborative efforts and the licenses granted hereunder, Atlantic will
pay Isis royalties on Net Sales as follows:


 


6.4.2.1           For Alicaforsen Products sold for [***]
indication, Atlantic will pay Isis royalties on Net Sales of each Alicaforsen
Product equal to the greater of (i) [***]% of the royalty Atlantic is
entitled to receive under such Sublicense, or (ii) [***]% of Net Sales;
and


 


6.4.2.2           For an Alicaforsen Product that is not
indicated for [***], Atlantic will pay Isis royalties on Net Sales of each
Alicaforsen Product as follows:


 


(a) If the royalty to Atlantic is less than
or equal to [***]% of Net Sales, then Isis receives [***]% of Net Sales of each
Alicaforsen Product;


 


(b) If the royalty to Atlantic is greater
than [***]% but less than [***]% of Net Sales, then Isis receives [***]% of Net
Sales of each Alicaforsen Product; or


 


(c) If the royalty to Atlantic is equal to or
greater than [***]% of Net Sales, then Isis receives [***]% of Net Sales of
each Alicaforsen Product.


 


6.4.3       Isis
will be responsible for payment of any Third Party royalty obligations related
to an Alicaforsen Product that exist as of the Effective Date (“Existing Royalties”), including Existing
Royalties due under the agreement with [***] dated [***].  Atlantic will be responsible for all other
Third Party royalties, fees and milestones that may arise related to the
development or commercialization of Alicaforsen Products.


 


Section 6.5            Term; Timing of Royalty
Payments.  Atlantic’s obligation to pay royalties on
each Alicaforsen Product will expire on a country-by-country basis upon the
later of: (i) [***] years from the date of First Commercial Sale of such
Alicaforsen Product in such country of sale, or (ii) the expiration of the
last to expire Valid Claim of Alicaforsen Patents and ICAM-1 Specific Patents
covering the making, using, or selling of such Alicaforsen Product in the
country of sale, or (iii) the expiration of the last to expire Valid
Composition of Matter Claim within Alicaforsen Patents or ICAM-1 Specific
Patents in the country of manufacture of that Alicaforsen Product. The
royalties due under Section 6.4 will become due and payable: (i) within
30 days of each respective Royalty Due Date with respect to Net Sales received
by Atlantic or its Affiliates, and (ii) with respect to royalties due
under Sublicenses, within 30 days of Atlantic itself receiving the royalty
payments due from its sublicensees.  In
each case royalties will be calculated in respect of the Net Sales in the
calendar quarter immediately preceding the applicable Royalty Due Date.


 


11





















 


Section 6.6            Payment Method. 
Any amounts due to Isis under this Agreement will be paid in U.S.
dollars, by wire transfer in immediately available funds to an account
designated by Isis.  Any payments or
portions thereof due hereunder which are not paid on the date such payments are
due under this Agreement and the payment is not in dispute between the Parties,
or if disputed the dispute has not been resolved, will bear interest at a rate
equal to the prime rate as published in The Wall Street Journal,
Eastern Edition, on the first day of each calendar quarter in which such
payments are overdue, plus 1% calculated on the number of days such payment is
delinquent, compounded monthly.


 


Section 6.7            Currency; Foreign Payments. 
If any currency conversion will be required in connection with any
payment hereunder, such conversion will be made by using the exchange rate for
the purchase of U.S. dollars as published in The Wall
Street Journal, Eastern Edition, on the last business day of the
calendar quarter to which such payments relate. 
If at any time legal restrictions prevent the prompt remittance of any
payments in any jurisdiction, Atlantic may notify Isis and make such payments
by depositing the amount thereof in local currency in a bank account or other
depository in such country in the name of Isis or its designee, and Atlantic will
have no further obligations under this Agreement with respect thereto.  All payments under this Agreement shall be
made free and clear and without any set off, deduction, withholding or
deferment in respect of any taxes unless required by law or practice of any
relevant governmental authority.  The
Parties shall co-operate to minimize any deduction or withholding in relation
to any payments pursuant to this Agreement.


 


Section 6.8            Records Retention; Audit.


 


6.8.1       Record Retention.  Atlantic will maintain (and will ensure
that its Affiliates and sublicensees will maintain) complete and accurate
books, records and accounts that fairly reflect Net Sales with respect to each
Alicaforsen Product, in each case in sufficient detail to confirm the accuracy
of any payments required hereunder and in accordance with IFRS, which books,
records and accounts will be retained by Atlantic, its Affiliates or
sublicensees (as applicable) for the later of (i) 5 years after the end of
the period to which such books, records and accounts pertain, and (ii) the
expiration of the applicable tax statute of limitations (or any extensions
thereof), or for such longer period as may be required by Applicable Law.


 


6.8.2       Audit.  Isis will have the right to
have an independent certified public accounting firm of nationally recognized
standing, reasonably acceptable to Atlantic, have access during normal business
hours, and upon reasonable prior written notice, to Atlantic’s records (and its
Affiliates and sublicensees) as may be reasonably necessary to verify the
accuracy of Net Sales, Sublicense Revenue, as applicable, for any calendar
quarter or calendar year ending not more than [***] months prior to the date of
such request; provided, however, that Isis will
not have the right to conduct more than one such audit in any Calendar Year
except as provided below.  The accounting
firm will enter into appropriate obligations with Atlantic to treat all
information it receives during its inspection as confidential.  The accounting firm shall disclose to Isis
only whether the reported Net Sales and Sublicense Revenue are correct and
details of any discrepancies but no other information shall be disclosed to
Isis.  Isis will bear the cost of such
audit unless the audit reveals a variance of more than [***]% from the reported
results, in which case Atlantic will bear the cost of the audit.


 


12





















 


6.8.3       Payment of Additional Amounts.  If, based on
the results of such audit, additional payments are owed by either party to the
other under this Agreement, the party due to make a payment will make such
additional payments, with interest as set forth in Section 6.6,
within 30 days after the date on which such accounting firm’s written report is
delivered to such Party.


 


6.8.4 Confidentiality. 
Isis will treat the financial information reported to it under Section 6.8.2
in accordance with the confidentiality provisions of Article 8; provided, however, that Isis may provide Third Parties to
which Isis owes Existing Royalties on Alicaforsen Products such information if
it exercises its audit rights concerning the Alicaforsen Products against
Isis and provided such Third Party is bound to keep such information
confidential.


 


Section 6.9            Isis
Payment to Atlantic.


 


6.9.1       Up-Front Payment by Isis. In
consideration for the Reverted Rights, Isis hereby provides Atlantic with a single US$[***] credit
that may be applied to the purchase of Alicaforsen API under Section 3.6.2
above.


 


ARTICLE
7 - 

PRESS RELEASES & PUBLICATIONS


 


Section 7.1            Press Releases


 


7.1.1 Press Releases -
Generally.  Each provision of this Section 7.1.1
is subject to Section 7.1.2 below. 
Press releases or other similar public communication by either Party
relating to this Agreement, will be approved in advance by the other Party,
which approval will not be unreasonably withheld or delayed, except (i) disclosures
made by Isis related to products covered by the Reverted Rights, or (ii) for
those communications required by Applicable Law, which are Authorized Disclosures
or disclosures of information for which consent has previously been obtained,
and information of a similar nature to that which has been previously disclosed
publicly with respect to this Agreement, each of which will not require advance
approval, but will be provided to the other Party as soon as practicable after
the release or communication thereof.


 


7.1.2 Press Releases —
Product Safety/Efficacy. Each
Party will immediately notify (and, if possible, provide as much advance notice
as possible to) the other of any event materially related to Alicaforsen
Products (including any regulatory approval) so that the Parties may analyze
the need to or desirability of publicly disclosing or reporting such event, and
Isis agrees to provide Atlantic with at least 3 days advance notice of Isis’
intention to publicly disclose any adverse safety information related to a
Follow-On Product.  Notwithstanding Section 7.1.1
above, any press release or other similar public communication by either Party
related an Alicaforsen Product’s efficacy or safety data and/or results, will
be submitted to the other Party for review and approval at least 72 hours in
advance of such proposed public disclosure, which approval will not be
unreasonably withheld or delayed.


 


Section 7.2            Publications. 
Each provision of this Section 7.2 is subject to Section 7.1.2
above.  At least [***] days prior to a
Party’s submission of any material related to the research or development
activities hereunder for publication or presentation, the publishing 


 


13





















 


Party will provide to the other Party with a draft of
such material for its review and comment. 
The non-publishing Party will provide any comments to the publishing
Party within [***] days of receipt of such materials. Except for disclosures
made by Isis related to products covered by the Reverted Rights, no publication
or presentation with respect to the research or development activities
hereunder will be made unless and until the non-publishing Party’s comments on
the proposed publication or presentation have been discussed by the Parties. If
requested in writing by the non-publishing Party, the publishing Party will
withhold material from submission for publication or presentation for a reasonable
time to allow for the filing of a patent application.


 


ARTICLE
8 - 

CONFIDENTIALITY


 


Section 8.1            Disclosure and Use Restriction. 
Except pursuant to an Authorized Disclosure, the Parties agree that, for
the Term and for five years thereafter, each Party will keep completely
confidential and will not publish, submit for publication or otherwise
disclose, and will not use for any purpose except for the purposes contemplated
by this Agreement, any Confidential Information received from the other Party.


 


ARTICLE
9 - 

INTELLECTUAL PROPERTY


 


Section 9.1            Prosecution of Patents.


 


9.1.1       Solely Owned Patents. With the exception of the Alicaforsen Patents and the
ICAM-1 Specific Patents, which are addressed in Section 9.1.2, each
Party will have the sole right, at its cost and expense and at its sole
discretion, to obtain, prosecute, maintain and enforce throughout the world any
Patents solely owned or Controlled by such Party.


 


9.1.2       Alicaforsen Patents and ICAM-1 Specific Patents.  Subject to Section 9.1.4 below,  Isis will have the sole obligation at its expense, to
obtain, prosecute and maintain the Alicaforsen Patents and the ICAM-1 Specific
Patents in such countries as Isis is prosecuting such Patents on the
Restatement Date using Commercially Reasonable Efforts.  For clarity, Atlantic will not have the right
to review or comment on any applications or registrations to be filed by Isis
under this Section 9.1.2, and Isis may cease prosecuting or
maintaining particular applications or patents in the Alicaforsen Patents and
ICAM-1 Specific Patents in selected jurisdictions, if Isis determines that it
is not commercially reasonable to continue such efforts (in which case the
terms of Section 9.1.4 will apply).


 


9.1.3       [Not used]


 


9.1.4       Discontinued Patents.  If under Section 9.1.2
Isis elects to discontinue prosecution or maintenance of any particular
applications or patents in the Alicaforsen Patents or the ICAM-1 Specific
Patents (if applicable), as the case may be, in a selected jurisdiction, Isis
will give thirty (30) days advance written notice to Atlantic of any decision
to cease preparation, filing, prosecution and maintenance of that Patent right
(a “Discontinued Patent”).  In such case, Atlantic may elect at its sole
discretion to continue preparation, filing, prosecution or maintenance of the
Discontinued Patent in the select jurisdiction at its sole expense and
thereafter Atlantic will own any such patent application and patents maturing
therefrom and be 


 


14





















 


solely responsible for all costs. Isis will execute
such documents and perform such acts as may be reasonably necessary for
Atlantic to continue prosecution or maintenance of the applicable Discontinued
Patent including assigning ownership of such Patent or application. Should
Atlantic elect to continue preparation, filing, prosecution and maintenance of
Discontinued Patents which are Alicaforsen Patents or ICAM-1 Specific Patents,
such Patents will no longer be deemed to be Alicaforsen Patents or ICAM-1 Specific
Patents for the purposes of this Agreement. 
Notwithstanding the foregoing, Atlantic’s right to continue the
preparation, filing, prosecution and maintenance of a Discontinued Patent that
is an ICAM-Specific Patent is limited solely to the extent such Patent claims
ICAM-1.


 


9.1.5       Cooperation.  Each Party will cooperate reasonably in
the preparation, filing, prosecution, and maintenance of the Alicaforsen
Patents and the ICAM-1 Specific Patents (if applicable), and the other Party’s
Patents which cover an Alicaforsen Product. Such cooperation includes (a) promptly
executing all papers and instruments and requiring employees to execute such
papers and instruments as reasonable and appropriate so as to enable such other
Party, to file, prosecute, and maintain its Patents in any country; and (b) promptly
informing such other Party of matters that may affect the preparation, filing,
prosecution, or maintenance of any such Patents.


 


9.1.6       Patent Term Extensions.  The Parties
agree to cooperate in an effort to avoid loss of any of the Patents forming
part of Alicaforsen Patents or ICAM-1 Specific Patents including by executing
any documents as may be reasonably required. 
In particular, the Parties shall cooperate with each other in obtaining
patent term extension or restoration or supplemental protection certificate (“Patent Term Extensions”) or their
equivalents in any country and region where applicable.  In particular but without limiting the
foregoing Isis shall provide reasonable assistance to Atlantic, including by
executing any required documents and providing any relevant patent information
to Atlantic, so that Atlantic, as Regulatory Approval applicant, may deal with
the applicable Regulatory Authority in connection with obtaining such Patent
Term Extension.


 


Section 9.2            Enforcement of Patents


 


9.2.1       Rights and Procedures.  If Isis or
Atlantic determines that any Patent licensed hereunder is being infringed by a
Third Party’s activities and that such infringement could affect the exercise
by the Parties of their respective rights and obligations under this Agreement,
it will promptly notify the other Party in writing.  Except for the Alicaforsen Patents and the
ICAM-1 Specific Patents which are discussed below, the Party controlling the
Patent(s) which are allegedly being infringed will have the sole right and
obligation to remove such infringement.


 


(a)           Alicaforsen
Patents and ICAM-1 Specific  Patents.  With respect to the Alicaforsen Patents and
the ICAM-1 Specific Patents (if applicable and solely to the extent infringed
by a Third Party with a product targeting ICAM-1), Atlantic will have the first
right, but not the obligation, at Atlantic’s expense, to remove such
infringement. In the event that Atlantic fails to take commercially appropriate
steps to remove any such infringement within 90 days following notice of such
infringement, or earlier notifies Isis in writing of its intent not to take
such steps, and such infringement is likely to have a material adverse effect
on 


 


15





















 


the Alicaforsen Product,
so long as the infringement is not taking place in a Major Market and so long
as Atlantic does not inform Isis that Atlantic considers, in good faith, that
to take such proceeds would (x) be prejudicial to its litigation strategy
in a Major Market and (y) be commercially unreasonable under the
circumstances, (i) Isis will have the right to do so at its expense, (ii) Atlantic
will have the right, at its own expense, to be represented in any such action,
and (iii) the exclusive license(s) granted under Article 2
that pertain to such Alicaforsen Patent or ICAM-1 Specific Patent (if
applicable), will automatically convert into nonexclusive licenses. Isis will
have the right, at Isis’ own expense, to remove infringement of the Alicaforsen
Patents or ICAM-1 Specific Patents (if applicable) (i) if Isis is
unilaterally developing and commercializing an Alicaforsen Product pursuant to Section 11.2,
(ii) with respect to any products covered by the Reverted Rights, or (iii) if
a Third Party is infringing the ICAM-1 Specific Patents with any product that
does not target ICAM-1.


 


(b)           Cooperation. 
The Party not enforcing the applicable Patent will provide reasonable
assistance to the other Party (at the enforcing Party’s expense), including
providing access to relevant documents and other evidence, making its employees
available at reasonable business hours, and joining the action to the extent
necessary to allow the enforcing Party to maintain the action.  If Isis requests that Atlantic take action to
remove infringement of an Alicaforsen Patent or ICAM-1 Specific Patent (if
applicable) to the extent infringed by a Third Party with a product targeting
ICAM-1, and Atlantic believes it is not commercially appropriate to take such
actions, the Parties will meet and discuss in good faith such circumstances and
seek to reach agreement on what appropriate steps to take to cause such
infringement to end in a commercially appropriate manner.


 


9.2.2       Recovery.  Any amounts
recovered by Atlantic in connection with or as a result of any action
contemplated by Section 9.2.1(a), whether by settlement or
judgment, will be used to reimburse the Parties for their reasonable costs and
expenses in making such recovery (which amounts will be allocated pro rata if
insufficient to cover the totality of such expenses), with any remainder in
excess of the reasonable costs and expenses in making such recovery will be
treated as Net Sales of an Alicaforsen Product and royalties will be due in
respect of such Net Sales pursuant to this Agreement. Isis will retain all
amounts it recovers enforcing the Alicaforsen Patents and the ICAM-1 Specific
Patents.


 


ARTICLE
10 - 

TERM AND TERMINATION


 


Section 10.1         Term. 
The term of this Agreement (the “Term”)
commences upon the Restatement Date and, unless earlier terminated in
accordance with the provisions of this Article 10, will continue
until the expiration of all obligations to pay royalties on all Alicaforsen
Products to Isis.


 


Section 10.2         Rights in Bankruptcy or
Insolvency  If either Party becomes insolvent, files
a petition in bankruptcy, has such a petition filed against it, determines to
file a petition in bankruptcy, or receives notice of a Third Party’s intention
to file an involuntary petition in bankruptcy, such Party immediately shall
notify the other Party in writing.  In
addition to any other remedies available at law or in equity, the other Party
(i.e., the non-bankrupt Party) may immediately terminate this Agreement, in
whole or in part as the terminating Party may 


 


16





















 


determine, upon learning of any of the foregoing
events; provided, however, that the financial
terms set forth in Article 6 above will remain in tact and will
survive any such termination.  The
terminating Party shall provide to the other Party a written notice regarding
the extent of termination. If a Party seeks (the “Filing
Party”) to be or is involuntarily placed under the protection of
the “Bankruptcy Code” (i.e., Title 11, U.S.
Code) or its equivalent outside the USA, and the trustee in bankruptcy, or the
Filing Party as a debtor-in-possession, rejects this Agreement, then the other
Party (the “Non-Filing Party”) hereby
elects, under Section 365(n) of the Bankruptcy Code, to retain all
licenses of rights to “intellectual property” (as defined under such Bankruptcy
Code) granted to it under this Agreement, to the extent permitted by law.  As of the commencement of a bankruptcy
proceeding by or against the Filing Party, the Non-Filing Party is entitled to
a complete duplicate of all embodiments of “intellectual property” licensed to
it hereunder.  To the extent such
embodiments are not already in the Non-Filing Party’s possession as of the
commencement of a bankruptcy, the Filing Party (or the trustee in bankruptcy)
shall deliver such embodiments to the Non-Filing Party (i) upon any such
commencement of a bankruptcy proceeding, unless the Filing Party elects to
continue to perform all of its obligations under this Agreement, or (ii) if
not delivered under (i), then upon a rejection of this Agreement (or the
equivalent) by or on behalf of the Filing Party.


 


Section 10.3         Material Breach.  Failure by a Party to comply with any of its material
obligations contained herein will entitle the Party not in default to give to
the defaulting Party notice specifying the nature of the material breach,
requiring the defaulting Party to make good or otherwise cure such default, and
stating its intention to invoke the provisions of Section 14.4 if
such default is not cured.  If such
default is not cured within 90 days after the receipt of such notice (or, if
such default cannot be cured within such 90-day period, if the Party in default
does not commence actions to cure such default within such period and thereafter
diligently continue such actions), the Party not in default will be entitled,
without prejudice to any of its other rights conferred on it by this Agreement,
to invoke the provisions of Section 14.4; provided,
however, that in the event of a good faith dispute with respect to
the existence of a material breach, the 90-day cure period will be stayed until
such time as the dispute is resolved pursuant to Section 14.4
hereof.


 


Section 10.4         Consequences of Expiration or
Termination.


 


10.4.1     Licenses.  Upon expiration of the Term or
upon termination of this Agreement in its entirety by either Party pursuant to Section 10.3,
or by Isis pursuant to Section 10.2 and upon payment of all amounts
owed pursuant to this Agreement, the licenses granted by Isis to Atlantic
hereunder will terminate.


 


10.4.2     Return of Information and Materials. 
Upon early termination of this Agreement in its entirety by either Party
pursuant to Section 10.3, or by Isis pursuant to Section 10.2,
Atlantic will return all data, files, records and other materials in its
possession or control relating to or containing or comprising Isis’
Confidential Information and, in each case (except one copy of which may be
retained for archival purposes).


 


17





















 


Section 10.5         Accrued Rights; Surviving
Obligations.


 


10.5.1     Accrued Rights.  Termination or
expiration of this Agreement for any reason will be without prejudice to any
rights or financial compensation that will have accrued to the benefit of a Party
prior to such termination or expiration. 
Such termination or expiration will not relieve a Party from obligations
that are expressly indicated to survive the termination or expiration of this
Agreement.


 


10.5.2     Survival.  Articles 7, 8, 10,
11, 12, and 14, Section 1.2, and Section 6.8
of this Agreement will survive expiration or termination of this Agreement for
any reason.


 


ARTICLE
11


DISCONTINUED
DEVELOPMENT BY ATLANTIC


 


Section 11.1 
Discontinuances. In the event of a Discontinuance, Isis will have a reversion right as
further described in Section 11.2.


 


Section 11.2  Reversion Rights. Following the occurrence of a
Discontinuance, Isis may elect to continue to develop any Alicaforsen Product
that is the subject of such Discontinuance by notice in writing to Atlantic (an
“Election Notice”) that Isis is
exercising its rights under this Section 11.2, in which case this
Agreement will terminate (subject to the survival provisions set forth in Section 10.5.2).
Upon receipt of an Election Notice, Atlantic will (i) grant to Isis a
sublicensable, worldwide license or sublicense, as the case may be, to all
Patents controlled by Atlantic solely as they are necessary to make, have made,
use, sell, offer for sale, have sold and import the Alicaforsen Product and (ii) transfer
to Isis, for Isis’ unlimited use, any data, results, regulatory information and
files in the possession of Atlantic as of the date of the Election Notice that
relate to the Alicaforsen Product, subject to the negotiation in good faith of
a reasonable royalty payable to Atlantic that represents the value of the items
transferred to Isis.


 


18





















 


ARTICLE
12 - 



INDEMNIFICATION AND INSURANCE


 


Section 12.1         Indemnification of Isis.  Atlantic will indemnify Isis and its Affiliates, and
each of their respective directors, officers, employees and agents, and defend
and hold each of them harmless, from and against any and all losses, damages,
liabilities, costs and expenses (including reasonable attorneys’ fees and
expenses) to the extent arising from or occurring as a result of any and all
liability suits, investigations, claims or demands by a Third Party
(collectively, “Losses”) arising from or
occurring as a result of or in connection with (a) the breach of any of
Atlantic’s representations, warranties, or covenants contained in Article 13
below, or (b) whether or not negligence is found or alleged, the
manufacture (except to the extent attributable to Isis’ negligence), use,
handling, storage, sale or other disposition of an Alicaforsen Product or other
compound that is developed or sold by Atlantic, its Affiliates, agents or
sublicensees, except to the extent Isis has an obligation to indemnify Atlantic
under Section 12.2 below.


 


Section 12.2         Indemnification of Atlantic. 
Isis will indemnify Atlantic, its Affiliates, and its sublicensees, and
each of their respective directors, officers, employees and agents, and defend
and hold each of them harmless, from and against any and all Losses arising
from or occurring as a result of or in connection with (a) the breach of
any of Isis’ representations, warranties, or covenants contained in Article 13
below, or (b) whether or not negligence is found or alleged, the
manufacture, use, handling, storage, sale or other disposition of a compound
that is developed or sold by Isis, its Affiliates, agents or sublicensees,
except to the extent Atlantic has an obligation to indemnify Isis under Section 12.1
above.


 


Section 12.3         Insurance. 
Each Party will have and maintain such types and amounts of liability
insurance as is reasonable and customary in the industry generally for parties
similarly situated, and will upon request provide the other with a certificate
of insurance.  Each Party will promptly
notify the other of any material change in insurance coverage or lapse in
coverage in that regard.


 


Section 12.4         Liability. Neither Party shall be liable to the
other in contract, tort, negligence, breach of statutory duty or otherwise for
any loss, damage, costs or expenses of any nature whatsoever incurred or
suffered by the other or its Affiliates:


 


12.4.1     of
a direct nature where the same is a loss of turnover, profits, business or
goodwill; or


 


12.4.2     of
an indirect or consequential or punitive nature, including any indirect or
consequential economic loss or other indirect or consequential loss of
turnover, profits, loss of enterprise value, business or goodwill or otherwise.


 


19





















 


ARTICLE
13 - 

REPRESENTATIONS AND WARRANTIES


 


Section 13.1         Representations, Warranties and
Covenants.  Each Party hereby represents, warrants and
covenants to the other Party as of the Restatement Date as follows:


 


Section 13.2         Corporate Authority. 
Such Party (a) has the power and authority and the legal right to
enter into this Agreement and perform its obligations hereunder, and (b) has
taken all necessary action on its part required to authorize the execution and
delivery of this Agreement and the performance of its obligations
hereunder.  This Agreement has been duly
executed and delivered on behalf of such Party and constitutes a legal, valid
and binding obligation of such Party and is enforceable against it in
accordance with its terms subject to the effects of bankruptcy, insolvency or
other laws of general application affecting the enforcement of creditor rights
and judicial principles affecting the availability of specific performance and
general principles of equity, whether enforceability is considered a proceeding
at law or equity.


 


Section 13.3         Consents, Approvals, etc. 
All necessary consents, approvals and authorizations of all Regulatory
Authorities and other parties required to be obtained by such Party in
connection with the execution and delivery of this Agreement and the performance
of its obligations hereunder have been obtained.


 


Section 13.4         Conflicts. 
The execution and delivery of this Agreement and the performance of such
Party’s obligations hereunder (a) do not conflict with or violate any
requirement of Applicable Law or any provision of the articles of
incorporation, bylaws or any similar instrument of such Party, as applicable,
in any material way, and (b) do not conflict with, violate, or breach or
constitute a default or require any consent not already obtained under, any
contractual obligation or court or administrative order by which such Party is
bound.


 


Section 13.5         Intellectual Property. 
To each Party’s knowledge, as of the Effective Date, no additional Third
Party licenses are required to develop, use and sell the enema formulation of
Alicaforsen.


 


Section 13.6         Isis Representations, Warranties,
and Covenants.
Isis  hereby represents, warrants and
covenants to Atlantic as of the Effective Date as follows:


 


13.6.1     IP Ownership.  Isis has the
sufficient legal and/or beneficial title and ownership of the Alicaforsen
Patents and the ICAM-1 Specific Patents as is necessary to fulfill its
obligations under this Agreement and to grant the licenses (or sublicenses as
the case may be) to Atlantic pursuant to this Agreement; Isis has not
previously entered into any agreement, whether written or oral, with respect
to, or otherwise assigned, licensed, transferred, conveyed or otherwise
encumbered its right, title or interest in or to the Isis Data (“Isis Background Know How”) or the
Alicaforsen Patents and ICAM-1 Specific Patents licensed hereunder (including
by granting any covenant not to sue with respect thereto) (the Isis Background
Know How and such Alicaforsen Patents and ICAM-1 Specific Patents licensed
hereunder together being the “Isis Background IP”).   To the best of Isis’ knowledge, the
conception, development and reduction to practice of the Isis Background IP
existing as of the Effective Date have not constituted or involved the
misappropriation of trade secrets or other rights or property of any Third
Party; and


 


20




















 


13.6.2     Patent Maintenance. True, complete and correct copies of the complete file
wrapper and other material correspondence with any patent office relating to
the prosecution, validity and enforceability of the Patents within the
Alicaforsen Patents and the ICAM-1 Specific Patents existing at the Effective
Date have been provided to or made available to Atlantic prior to the Effective
Date and, to the best of Isis’ knowledge, there is no material reason why any
of such Patents are invalid.  In respect
of the pending patent applications included within such Patents, Isis has
presented all relevant prior art of which it and the inventors are aware to the
relevant patent examiners at the relevant patent offices; and


 


13.6.3     Patent Prosecution.  The Alicaforsen
Patents and ICAM-1 Specific Patents licensed hereunder that are applications at
the Effective Date are being diligently procured from the respective patent
offices and the Patents within such Patents licensed hereunder that are granted
at the Effective Date have been maintained properly and correctly and all
applicable fees have been paid on or before the due date for payment; and


 


13.6.4     Third Party Actions.  To the best of
Isis’ knowledge,  no actions, suits, claims, disputes, or
proceedings concerning the Alicaforsen Patents or the ICAM-1 Specific Patents
licensed hereunder or the Alicaforsen Product are currently pending or are
threatened in writing, that if determined adversely to Isis would have a
material adverse effect on the Alicaforsen Product or would impair Isis’
ability to perform its obligations under this Agreement.


 


13.6.5     Alicaforsen.  As of the
Effective Date, Isis does not Control any Patents other than the Alicaforsen
Patents and the ICAM-1 Specific Patents that would be necessary to develop or
commercialize Alicaforsen Products or to manufacture Alicaforsen Product or
Alicaforsen API other than the Patents within Excluded Isis IP and, to the best
of Isis’ knowledge, Isis does not Control any know-how that would be necessary
to develop or commercialize Alicaforsen Products other than the Isis Data and
know-how transferred to Atlantic under Section 2.2.1.


 


Section 13.7         Enabled CMOs. Isis  hereby
represents and warrants, as of the Restatement Date, that each of Avecia
Biotechnology, Inc., Agilent Technologies, Inc., and Girindus America
Inc. is an Enabled CMO.


 


Section 13.8         Atlantic Representations,
Warranties, and Covenants.  Atlantic hereby represents, warrants and
covenants to Isis that:


 


13.8.1     Capabilities.   As of the
Effective Date, Atlantic has the requisite personnel, expertise, experience and
skill to perform its obligations under this Agreement; Atlantic’s sales
representatives will perform in a professional, timely, competent and efficient
manner; and Atlantic, its Affiliates, and its sublicensees will at all times
comply with all Applicable Laws.


 


21





















 


13.8.2     Sublicenses.         As of
the Restatement Date, Atlantic has not granted any sublicenses (including
Sublicenses) under the Original Agreement, except that
certain Development and License Agreement with Sigma Pharmaceuticals (formerly
Orphan Australia Pty. Ltd.) executed on or about December 6, 2007, which
is in full compliance with, and remains subject to, the terms and conditions of
this Agreement.


 


13.8.3     Payment Obligations.  As of the
Restatement Date, no payment obligations have accrued under the Original
Agreement that have not been paid by Atlantic to Isis.


 


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


 


ARTICLE
14 - 

MISCELLANEOUS


 


Section 14.1         Assignment. 
Without the prior written consent of the other Party hereto, neither
Party will sell, transfer, assign, delegate, pledge or otherwise dispose of,
whether voluntarily, involuntarily, by operation of law or otherwise, this
Agreement or any of its rights or duties hereunder; provided,
however, that (i) either Party hereto may assign or transfer
this Agreement or any of its rights or obligations hereunder without the
consent of the other Party to (a) any of its Affiliates, or (b) any
Third Party with which it has merged or consolidated, or to which it has
transferred all or substantially all of its assets to which this Agreement
relates provided always in the case where Isis is the assigning Party it also
transfers title to the Alicaforsen Patents or the ICAM-1 Specific Patents to
such Third Party, and if in any such event the Third Party assignee or
surviving entity assumes in writing all of the assigning Party’s obligations
under this Agreement, (ii) Atlantic may assign or transfer this Agreement,
without Isis’ consent, to Atlantic Healthcare, or (iii) Isis may assign or
transfer its rights under Article 6.4 (but no liabilities) to a
Third Party in connection with a royalty factoring transaction.  Any purported assignment or transfer in
violation of this Section 14.1 will be void ab initio and
of no force or effect.


 


Section 14.2         Severability. 
If any provision of this Agreement is held to be illegal, invalid or
unenforceable by a court of competent jurisdiction, such adjudication will not
affect or impair, in whole or in part, the validity, enforceability, or
legality of any remaining portions of this Agreement.  All remaining portions will remain in full
force and effect as if the original Agreement had been executed without the
invalidated, unenforceable or illegal part.


 


Section 14.3         Governing Law. 
This Agreement will be governed by and construed in accordance with the
laws of New York, USA without reference to any rules of conflicts of laws.


 


22





















 


Section 14.4         Dispute
Resolution.


 


14.4.1     General.  Any dispute, controversy or claim arising from or related to this Agreement or the
breach thereof will first be referred to the attention of the Chief
Executive Officer of Atlantic and the Chief Operating Officer of Isis (the “Executive Officers”) by notice in
writing in accordance with the terms of this Agreement.  The Executive Officers (or their respective
designees) will meet as soon as reasonably possible thereafter, and use their
good faith efforts to mutually agree upon the resolution of the dispute,
controversy or claim.  If any dispute,
controversy or claim is not resolved by the designated officers of the Parties
(or their designees) within 30 days after such dispute is referred to them,
then the Parties agree that such dispute will be referred to mediation, and if
the dispute remains unresolved after mediation, either Party will have the
right to arbitrate such dispute in accordance with Section 14.4.3; provided, however, that any dispute relating to the
construction or validity of any Patent will not be subject to arbitration.


 


14.4.2     Mediation.  If the Parties pursue
mediation proceedings the Parties will attempt to resolve such dispute in
accordance with the Commercial Mediation Procedures of the American Arbitration
Association (“AAA”), before resorting to
arbitration in accordance with Section 14.4.3 below.  The mediation will be conducted by a single
mediator experienced in the business and technology that is the subject of this
Agreement.  The place of mediation will
be in New York, NY, USA.  Either Party
may apply to the mediator or to a court for interim injunctive relief until the
mediation decision is rendered or the dispute, controversy or claim is
otherwise resolved.


 


14.4.3     Arbitration. If the Parties do
not fully settle any dispute, controversy or claim pursuant to Section 14.4.1
or 14.4.2 and a Party wishes to pursue the matter further, each such
dispute, controversy or claim will be finally resolved by binding arbitration
in accordance with the Commercial Arbitration Rules of the AAA, and
judgment on the arbitration award may be entered in any court having
jurisdiction thereof. The arbitration will be conducted by a single arbitrator
agreeable by the Parties, if the Parties cannot agree upon an arbitrator, the
arbitrator will be appointed by the AAA. No individual will be appointed to arbitrate a dispute
pursuant to this Agreement unless he or she agrees in writing to be bound by
the provisions of this Section 14.4.  The place
of arbitration will be New York, NY, USA. Either Party may apply to the
arbitrator for interim injunctive relief until the arbitration award is
rendered or the controversy is otherwise resolved.


 


14.4.4     Disputes Regarding Material Breach.  If the Parties are in dispute as to whether
one party is in material breach of this Agreement, then the mediator or
arbitrators will first determine if material breach has in fact occurred, and
if so, will grant the defaulting Party the cure period provided pursuant to Section 10.3.  If the material breach is not cured within
the time period provided pursuant to Section 10.3, the mediation or
arbitration will continue and the mediator or arbitrators will, as part of the
same mediation or arbitration, award actual direct damages to the
non-defaulting Party.


 


23





















 


14.4.5     Costs and Expenses.  Except as expressly provided herein, each
Party will bear its own costs and expenses and attorneys’ fees and an equal
share of the mediator’s and/or arbitrators’ and any administrative fees of
mediation and arbitration. Notwithstanding the foregoing, in the case of
arbitration, if a Party has been found to be in material breach of this
Agreement, the defaulting Party will be responsible for both Parties’ Third
Party costs and expenses (including the costs of the arbitrators and any
administrative fees of arbitration) and the reasonable attorneys’ fees of the
non-defaulting Party; provided, however,
that the total amount of such fees and expenses the defaulting Party is
required to reimburse the non-defaulting Party cannot exceed the total amount
of monetary damages awarded to the non-defaulting Party as a result of such
material breach.


 


14.4.6     Procedure. 
 Except to the extent necessary to
confirm an award or as may be required by law, neither a Party, a mediator, nor
an arbitrator may disclose the existence, content, or results of a mediation or
an arbitration without the prior written consent of both Parties. In no event
will arbitration be initiated after the date when commencement of a legal or
equitable proceeding based on the dispute, controversy or claim would be barred
by the applicable New York statute of limitations.


 


14.4.7     Speedy
Resolution.   The Parties intend,
and will take all reasonable action as is necessary or desirable to ensure,
that there be a speedy resolution to any dispute which becomes the subject of
mediation or arbitration, and the mediator and arbitrators will conduct the
mediation or arbitration so as to resolve the dispute as expeditiously as
possible.


 


14.4.8     Awards. In any mediation, a decision or opinion issued by the mediator
regarding the dispute between the Parties is non-binding. The arbitrators may award monetary damages and
injunctive relief, but may not order the granting or termination of licenses or
assign rights to an Alicaforsen Product to either of the Parties.  Monetary damages will be in the form of off-set royalties or otherwise, to account for
the damages to the non-defaulting Party from the breach, and to account for the
defaulting Party’s contribution to the Alicaforsen Product in view of the
breach.  All awards will be in
writing and will state reasons.  Executed
copies of all awards will be delivered by the arbitrators to the Parties as
soon as is reasonably possible.  All
awards of the arbitrators will be final and binding on the Parties, and there
will be no appeal of any such award whatsoever. 
The Parties undertake to satisfy any award without delay.


 


Section 14.5         Notices. 
All notices or other communications that are required or permitted
hereunder will be in writing and delivered personally with acknowledgement of
receipt, sent by facsimile (and promptly confirmed by personal delivery,
registered or certified mail or overnight courier as provided herein), sent by
nationally-recognized overnight courier or sent by registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:


 


If to Atlantic, to:


Atlantic
Pharmaceuticals Limited


MoFo
Notices Limited


7th Floor


CityPoint


One
Ropemaker Street


London
EC2Y 9AW


Attention:   Chief Executive Officer


Facsimile:  +44 (0) 20 7496 8500


 


24

















 


If to Isis, to:


Isis
Pharmaceuticals, Inc.


1896
Rutherford Road


Carlsbad,
California 92008


Attention:
Chief Operating Officer and CFO


Facsimile:
+1 (760) 603-4650


 


with a
copy to:


Attention:  General Counsel


Facsimile:
+1 (760) 268-4922


 


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


 


Section 14.6         Entire Agreement; Modifications. 
This Agreement (and the Subscription and Share Exchange Agreement) sets
forth and constitutes the entire agreement and understanding between the
Parties with respect to the subject matter hereof and all prior agreements
(including the Original Agreement), understandings, promises and
representations, whether written or oral, with respect thereto are superseded
hereby.  Each Party confirms that it is
not relying on any representations or warranties of the other Party except as
specifically set forth herein.  No
amendment, modification, release or discharge will be binding upon the Parties
unless in writing and duly executed by authorized representatives of both
Parties.


 


Section 14.7         Relationship of the Parties. 
It is expressly agreed that the Parties will be independent contractors
of one another and that the relationship between the Parties will not constitute
a partnership, joint venture or agency.


 


Section 14.8         Waiver. 
Any term or condition of this Agreement may be waived at any time by the
Party that is entitled to the benefit thereof, but no such waiver will be
effective unless set forth in a written instrument duly executed by or on
behalf of the Party waiving such term or condition.  Any such waiver will not be deemed a waiver
of any other right or breach hereunder.


 


Section 14.9         Counterparts. 
This Agreement may be executed in two or more counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.


 


25





















 


Section 14.10       No Benefit to Third Parties. 
The provisions of this Agreement are for the sole benefit of the Parties
and their successors and permitted assigns. 
This Agreement shall not confer any rights or remedies upon any person
other than Isis and Atlantic and their respective successors and permitted
assigns except as otherwise expressly provided in Section 12.
Except as expressly provided in Section 12, no person who is not a
party to this Agreement (including any employee, officer, agent, representative
or subcontractor of either Party) shall have the right to enforce any terms of
this Agreement which expressly or by implication confers a benefit on that
person without the prior written agreement of the Parties which agreement must
refer to this Section 14.10.


 


Section 14.11       Further Assurance. 
Each Party will duly execute and deliver, or cause to be duly executed
and delivered, such further instruments and do and cause to be done such
further acts and things, including the filing of such assignments, agreements,
documents and instruments, as may be necessary to carry out the provisions and
purposes of this Agreement.


 


Section 14.12       Force Majeure. Neither Party shall be responsible to the
other for any failure or delay in performing any of its obligations under this
Agreement or for other non-performance hereunder if such delay or non-performance
is caused by strike, stoppage of labor, lockout or other labor trouble,
fire, flood, accident, war, act of terrorism, act of God or of the government
of any country or of any local government, or by cause unavoidable or beyond
the control of any Party hereto. In such event, the Party affected will use
Commercially Reasonable Efforts to resume performance of its obligations.


 


[SIGNATURES ON FOLLOWING PAGE]


 


26

















 


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


 




	
  ATLANTIC PHARMACEUTICALS
  LIMITED

  	
   

  	
  ISIS PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Per: 

  	
  /s/ Toby Wilson Waterworth

  	
   

  	
  Per: 

  	
  /s/ B. Lynne Parshall

  
	
   

  	
   

  	
   

  
	
  Toby Wilson Waterworth

  	
   

  	
  B. Lynne Parshall

  
	
  Director

  	
   

  	
  Chief Operating
  Officer & CFO

  
					






 


27

















 


APPENDIX
1




Definitions


 


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


 


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


 


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


 


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


 


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


 


“Alicaforsen Product” means a pharmaceutical preparation comprising
Alicaforsen.


 


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


 


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


 


“Atlantic
Healthcare” means that company incorporated in England
and Wales with company registration no. 5878612 whose registered address is
Maple House, Birdbrook, Halstead, Essex CO9 4BB.


 


“Authorized Disclosure” means a disclosure of Confidential
Information by the receiving Party to the extent that such disclosure is:


 


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


 





















 


Confidential — Execution Version


 


are the subject of such order be held in confidence
by such court or agency or, if disclosed, be used only for the purposes for
which the order was issued; and provided
further that if a disclosure order is not quashed or a protective
order is not obtained, the Confidential Information disclosed in response to
such court or governmental order will be limited to that information which is
legally required to be disclosed in response to such court or governmental
order;


 


(ii)           otherwise
required to comply with Applicable Laws, including to the extent such
disclosure is required in publicly filed financial statements or other public
statements under rules governing a stock exchange (e.g., the rules of
the United States Securities and Exchange Commission, NASDAQ, NYSE, UKLA or any
other stock exchange or which securities of either Party may be listed) provided, however, to the extent possible
bearing in mind such Applicable Laws and subject to the next subsequent
sentence of this paragraph, the receiving Party shall provide the other Party
with a copy of the proposed text of such statements or disclosure five (5) Business
Days in advance of the date on which the disclosure is to be made to enable the
other Party to review and provide comments, unless a shorter review time is
agreed.  If the compliance with an
Applicable Law requires filing of this Agreement, the filing Party shall to the
extent possible seek confidential treatment of portions of this Agreement from
the relevant competent authority and shall provide the other Party with a copy
of the proposed filings at least ten (10) Business Days prior to filing
for the other Party to review any such proposed filing.  Each Party agrees that it will obtain its own
legal advice with regard to its compliance with Applicable Laws and will not
rely on any statements made by the other receiving Party relating to such laws;


 


(iii)          made by such receiving Party to the Regulatory Authorities
as necessary for (a) the development or commercialization of a Alicaforsen
Product in a particular country, or (b) as required in connection with any
filing, application or request for Regulatory Approval in a particular country
and in either case to the extent consistent with the licenses granted under the
terms of this Agreement;


 


(iv)          made
by the receiving Party, in connection with the performance of this Agreement,
to Affiliates sublicensees, licensors, licensees, directors, officers,
employees, consultants, representatives or agents, each of whom prior to
disclosure must be bound by obligations of confidentiality and non-use at least
equivalent in scope to those set forth in this Agreement;


 


(v)           made
by the receiving Party to existing or potential acquirers; existing or
potential pharmaceutical collaborators (to the extent contemplated hereunder);
investment bankers; existing or potential investors, merger candidates,
partners, venture capital firms or other financial institutions or investors
for purposes of obtaining financing; or, bona fide strategic potential
partners; each of whom prior to disclosure must be bound by obligations of
confidentiality and non-use at least equivalent in scope to those set forth in
this Agreement; or


 


(vi)          made by the receiving Party to its
legal advisers for the purpose of seeking advice.


 





















 


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


 


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


 


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


 


“Commercially Reasonable Efforts”
(i) in respect of Atlantic means efforts and resources commonly used in
the biotechnology industry by companies at a similar stage of development for
products of similar commercial potential to develop and commercialize a product
owned by such a company or to which it has rights, which product is at a
similar stage in its development or product life and is of similar market
potential to the Alicaforsen Product in question and taking into account the
patent and other proprietary position of the product; and (ii) in respect
of Isis means efforts and resources commonly used by biotechnology companies of
a similar size to Isis based on market capitalization to develop a product
owned by such a company or to which it has rights, which product is at a
similar stage in its development or product life and is of similar market
potential to the Alicaforsen Product in question and taking into account the
patent and other proprietary position of the product.  If Atlantic is commercializing Alicaforsen in
a given Major Market in accordance with the Development Plan, such
commercialization will be deemed to be an example of using Commercially
Reasonable Efforts; provided, however,
that a failure to so commercialize in such a Major Market will not be dispositive
of a failure to use Commercially Reasonable Efforts.


 


“Committee Members”
has the meaning
set forth in Section 3.2.


 


“Confidential Information”
means all
information and know-how and any tangible embodiments thereof provided by or on
behalf of one Party to the other Party either in connection with the
discussions and negotiations pertaining to this Agreement or the Original
Agreement, or in the course of performing this Agreement or the Original
Agreement, including data; knowledge; practices; processes; ideas; research
plans; engineering designs and drawings; research data; manufacturing processes
and techniques; scientific, manufacturing, marketing and business plans; and
financial and personnel matters relating to the disclosing Party or to its present
or future products, sales, suppliers, customers, employees, investors or
business.


 


Exceptions. Notwithstanding the foregoing, information or
know-how of a Party will not be deemed Confidential Information for purposes of
this Agreement if such information or know-how:


 


(a)           was already known to the receiving Party,
other than under an obligation of confidentiality or non-use, at the time of
disclosure to such receiving Party;


 




















 


(b)           was generally available or known to
parties reasonably skilled in the field to which such information or know-how
pertains, or was otherwise part of the public domain, at the time of its
disclosure to, or, with respect to know-how, discovery or development by, such
receiving Party;


 


(c)           became generally available or known to
parties reasonably skilled in the field to which such information or know-how
pertains, or otherwise became part of the public domain, after its disclosure
to such receiving Party through no fault of the receiving Party;


 


(d)           was disclosed to such receiving Party,
other than under an obligation of confidentiality or non-use, by a Third Party
who had no obligation to the disclosing Party not to disclose such information
or know-how to others; or


 


(e)           was independently discovered or developed
prior to disclosure by such receiving Party, as evidenced by their written
records, without the use of Confidential Information belonging to the
disclosing Party.


 


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


 


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


 


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


 


a)              Pre-clinical studies


b)             Formulation development


c)              Clinical studies


d)             Regulatory activities


e)              Manufacturing process development and
scale up


f)                Pharmacovigilance plans


g)             Commercialization plans


 


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


 


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


 

















 


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


 


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


 


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


 


“Effective Date”
means March 7, 2007.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(i)            Trade and quantity discounts
actually granted;


 


(ii)           Credits for returns or allowances;


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


(X divided by Y)
multiplied by Z


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


APPENDIX
2


 


ALICAFORSEN
PATENTS


 


[***]


 

















 


APPENDIX
3


 


ICAM-1
SPECIFIC PATENTS


 


[***]


 

















 


Confidential
— Execution Version


 


APPENDIX
4


 


INITIAL
DEVELOPMENT PLAN


 


[Attached]


 


[***]