**EXHIBIT 10.35**

**EXECUTION VERSION**

 

**AMENDED AND RESTATED LICENSE AGREEMENT**

 

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

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

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

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

**ARTICLE 1**

**DEFINITIONS**

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

**ARTICLE 2**

**TERMINATION OF COLLABORATION**

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

**ARTICLE 3**

**CESSATION OF OPERATION OF COLLABORATION**

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

         

__________________________________

 

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

 

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**ARTICLE 4**

**LICENSE GRANT, TECHNOLOGY TRANSFER, DILIGENCE**

| ***Section 4.1*** | **License Grant.** |
|-------------------|--------------------|

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

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

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

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

 

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

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

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

| ***Section 4.2*** | **Assignment, Technology Transfer.** |
|-------------------|--------------------------------------|

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

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

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

 

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

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

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

**ARTICLE 5**

**DEVELOPMENT & COMMERCIALIZATION**

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

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

 

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

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

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

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

 

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

**ARTICLE 6**

**FINANCIAL PROVISIONS**

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

| ***Section 6.2*** | **Royalty Payments by OncoGenex; Royalty                        Term.** |
|-------------------|-------------------------------------------------------------------------|

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

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

|   | **6.2.3** | [***]**.** |
|--------|-----------|------------|

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

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

 

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

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

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

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

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

***Section 6.4***

**Timing of Royalty Payments; Preliminary                        Report.**

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

 

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

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

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

 

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**Timing of                        signing a sublicensing agreement**

**Isis share of                        Non-Royalty Revenue**

**OncoGenex share                        of Non-Royalty Revenue**

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

[***]%

[***]%

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

[***]%

[***]%

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

[***]%

[***]%

(d) After                        (c)

[***]%

[***]%

 

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

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

***Section        6.7***       **Payment Method.**Any amounts due to Isis        pursuant to this Agreement will be paid in U.S. dollars by wire transfer in immediately        available funds to an account designated by Isis. Any payments or portions thereof due        hereunder which are not paid on the date such payments are due under this Agreement will        bear interest at a rate equal to the lesser of the prime rate as published in*The Wall Street Journal*, Eastern Edition, on        the first day of each calendar quarter in which such payments are overdue, plus two percent        (2%), or the maximum rate permitted by law, whichever is lower, calculated on the number of        days such payment is delinquent, compounded monthly.

***Section        6.8***       **Currency; Foreign Payments.**If any currency        conversion will be required in connection with any payment hereunder, such conversion will        be made by using the daily noon buying rates as published by the Federal Reserve Bank of        New York on the last business day of the calendar quarter to which such payments relate. If        at any time legal restrictions prevent the prompt remittance of any payments in any        jurisdiction, OncoGenex may notify Isis and make such payments by depositing the amount        thereof in local currency in a bank account or other

 

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

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

***Section 6.10***

**Records Retention; Audit.**

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

**6.10.2**  **Record Retention.**OncoGenexwill maintain (and will ensure that its        sublicensees will maintain) complete and accurate books, records and accounts that fairly        reflect Revenue and the royalties payable to Isis under this Agreement (including the        calculation of Net Sales and any adjustments under Section 6.2) with respect to the Product        in sufficient detail to confirm the accuracy of any payments required hereunder and in        accordance with GAAP, which books, records and accounts will be retained until the later of        (i) 3 years after the end of the period to which such books, records and accounts        pertain, and (ii) the expiration of the applicable tax statute of limitations (or any        extensions thereof), or for such longer period as may be required by Applicable        Law.

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

 

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

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

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

**ARTICLE 7**

**CONFIDENTIALITY**

***Section        7.1***       **Disclosure and Use Restriction.**Except as        expressly provided herein, the Parties agree that, for the Term and for five (5) years        thereafter, each Party will keep completely confidential and will not publish, submit for        publication or otherwise disclose, and will not use for any purpose except for the purposes        contemplated by this Agreement, any Confidential Information received from the other        Party.

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

**(a)**       made        in response to a valid order of a court of competent jurisdiction;*provided, however*, that such Party will first        have given notice to such other Party and given such other Party a reasonable opportunity        to quash such order and to obtain a protective order requiring that the Confidential        Information and documents that are the subject of such order be held in confidence by such        court or agency or, if disclosed, be used only for the purposes for which the order was        issued; and provided further that if a disclosure order is not quashed or a protective        order is not obtained, the Confidential Information disclosed in response to such court or        governmental order will be limited to that information which is legally required to be        disclosed in response to such court or governmental order;

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

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

 

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**(d)**       made        by such Party, in connection with the performance of this Agreement, to permitted        sublicensees, licensors, directors, officers, employees, consultants, representatives or        agents, each of whom prior to disclosure must be bound by obligations of confidentiality        and non-use at least equivalent in scope to those set forth in this Article 7;        or

**(e)**       made        by such Party to existing or potential acquirers; existing or potential pharmaceutical        collaborators (to the extent contemplated hereunder); investment bankers; existing or        potential investors, merger candidates, partners, venture capital firms or other financial        institutions or investors for purposes of obtaining financing; or, bona fide strategic        potential partners; each of whom prior to disclosure must be bound by obligations of        confidentiality and non-use at least equivalent in scope to those set forth in this        Article 7.

***Section 7.2***

**Publicity.**

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

 

**7.2.2**

**Press Releases Regarding Products.**

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

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

 

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**ARTICLE 8**

**TECHNOLOGY AND PATENTS**

***Section 8.1***

**Ownership.**

 

**8.1.1**

**Ownership of Technology and Patents.**

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

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

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

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

***Section 8.2***

**Prosecution of Patents.**

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

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

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

 

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

***Section 8.3***

**Enforcement of Patents.**

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

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

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

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

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

 

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

**(e)**       **Cooperation.**The Party not enforcing the        applicable Patent will provide reasonable assistance to the other Party, including, but not        limited to, providing access to relevant documents and other evidence, making its employees        available at reasonable business hours, and joining the action to the extent necessary to        allow the enforcing Party to maintain the action.

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

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

 

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

**ARTICLE 9**

**TERM        AND TERMINATION**

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

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

***Section 9.3***

**Consequences of Expiration or                        Termination.**

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

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

 

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

***Section 9.4***

**Accrued Rights; Surviving Obligations.**

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

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

**ARTICLE 10**

**INDEMNIFICATION AND INSURANCE**

***Section 10.1***   **Indemnification of Isis.**OncoGenex will        indemnify Isis, and their respective directors, officers, employees and agents, and defend        and hold each of them harmless, from and against any and all losses, damages, liabilities,        costs and expenses (including reasonable attorneys' fees and expenses) but only to the        extent arising from or occurring as a result of any and all liability suits,        investigations, claims, demands or actions by a Third Party (collectively, "Losses" and        each a "Loss") to the extent arising from or occurring as a result of (a) whether or        not negligence is found, the development, manufacture, use, handling, storage, sale or        other commercialization or disposition of OGX-011 or any Product by OncoGenex or its        Affiliates or licensees, (b) any material breach by OncoGenex of this Agreement, or        (c) the gross negligence or willful misconduct on the part of OncoGenex or its        licensees or sublicensees in performing any activity contemplated by this Agreement, except        for those Losses for which Isis has an obligation to indemnify OncoGenex pursuant to        Section 10.2, as to which Losses each Party will indemnify the other to the extent of        their respective liability for the Losses.

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

***Section 10.3***

**Indemnification Procedure.**

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

 

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

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

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

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

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

 

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

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

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

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

 

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**ARTICLE 11**

**REPRESENTATIONS AND WARRANTIES**

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

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

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

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

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

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

***Section 11.2***

**Additional Representations and Warranties of                        Isis.**

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

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

 

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

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

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

***Section 11.4***   **DISCLAIMER OF WARRANTY.**EXCEPT FOR THE EXPRESS        WARRANTIES SET FORTH IN SECTIONS 11.1, 11.2 AND 11.3, ONCOGENEX AND ISIS MAKE NO        REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION        OF LAW, BY STATUTE OR OTHERWISE, AND ONCOGENEX AND ISIS EACH SPECIFICALLY DISCLAIM ANY        OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF        QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO        THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF        THIRD PARTIES.

**ARTICLE 12**

**BREACH**

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

 

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

***Section 12.2***

**Breach by OncoGenex.**

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

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

**ARTICLE 13**

**MISCELLANEOUS**

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

 

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

***Section 13.2***   **Assignment.**Without the prior written consent        of the other Party hereto, neither Party will sell, transfer, assign, delegate, pledge or        otherwise dispose of, whether voluntarily, involuntarily, by operation of law or otherwise,        this Agreement or any of its rights or duties hereunder;*provided,        however*, that (i) either Party hereto may assign or transfer        this Agreement or any of its rights or obligations hereunder without the consent of the        other Party to any Third Party with which it has merged or consolidated, or to which it has        transferred all or substantially all of its assets to which this Agreement relates if in        any such event the Third Party assignee or surviving entity assumes in writing all of the        assigning Party's obligations under this Agreement or (ii) Isis may assign or transfer        its rights under Article 6 (but no liabilities) to a Third Party in connection with a        royalty (or payment) factoring transaction. Any purported assignment or transfer in        violation of this Section will be void*ab initio*and of no force or effect.

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

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

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

 

If to OncoGenex, to:

 

OncoGenex Technologies Inc.

#400 - 1001 West Broadway

Vancouver, BC V6H 4B1

Attention: President

Facsimile: (604) 736-3687

 

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with a copy to:

         

Doug Seppala

DuMoulin Black LLP

10th Floor, 595 Howe Street

Vancouver, British Columbia V6C 2T5

Facsimile: (604) 687-3635

 

If to Isis, to:

 

Isis Pharmaceuticals, Inc.

1896 Rutherford Road

Carlsbad, California 92008-7208

Attention: Executive Vice President

Facsimile: (760) 268-4922

 

with a copy to:

         

Attention: General Counsel

Facsimile: (760) 603-2707

 

or to        such other address as the Party to whom notice is to be given may have furnished to the        other Party in writing in accordance herewith. Any such communication will be deemed to        have been given (i) when delivered, if personally delivered or sent by facsimile on a        Business Day, (ii) on the Business Day after dispatch, if sent by        nationally-recognized overnight courier, and (iii) on the third business day following        the date of mailing, if sent by mail. It is understood and agreed that this        Section 13.6 is not intended to govern the day-to-day business communications        necessary between the Parties in performing their duties, in due course, under the terms of        this Agreement.

 

***Section 13.6***   **Entire Agreement; Modifications.**This Agreement        sets forth and constitutes the entire agreement and understanding between the Parties with        respect to the subject matter hereof and all prior agreements, understanding, promises and        representations, whether written or oral, with respect thereto are superseded hereby,        including without limitation the Original Collaboration Agreement. For clarity, the Parties        acknowledge and agree that the Original Collaboration Agreement remains in effect in        accordance with its terms with respect to the period between the Start Date and the        Amendment Effective Date. Each Party confirms that it is not relying on any representations        or warranties of the other Party except as specifically set forth herein. No amendment,        modification, release or discharge will be binding upon the Parties unless in writing and        duly executed by authorized representatives of both Parties.

***Section 13.7***   **Relationship of the Parties.**It is expressly        agreed that the Parties will be independent contractors of one another and that the        relationship between the Parties will not constitute a partnership, joint venture or        agency. Neither Party will have the authority to make any statements, representations or        commitments of any kind, or to take any action, which will be binding on the other, without        the prior written consent of the other to do so. All persons employed by a Party will be        employees of such Party and not of the other Party and all costs and

 

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

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

***Section 13.9***   **Waiver.**Any term or condition of this Agreement        may be waived at any time by the Party that is entitled to the benefit thereof, but no such        waiver will be effective unless set forth in a written instrument duly executed by or on        behalf of the Party waiving such term or condition. The waiver by either Party hereto of        any right hereunder or of the failure to perform or of a breach by the other Party will not        be deemed a waiver of any other right hereunder or of any other breach or failure by said        other Party whether of a similar nature or otherwise.

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

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

***Section 13.12*** **Further Assurance.**Each Party will duly execute        and deliver, or cause to be duly executed and delivered, such further instruments and do        and cause to be done such further acts and things, including the filing of such        assignments, agreements, documents and instruments, as may be necessary or as the other        Party may reasonably request in connection with this Agreement or to carry out more        effectively the provisions and purposes, or to better assure and confirm unto such other        Party its rights and remedies under this Agreement.

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

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

 

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

***Section 13.15***

**Dispute Resolution Regarding Diligence.**

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

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

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

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

 

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

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

**The        remainder of this page intentionally left blank.**

 

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**IN WITNESS WHEREOF,**the Parties hereto have        caused this Agreement to be executed by their duly authorized representatives as of the        date first above written.

**ONCOGENEXTECHNOLOGIESINC.**

**ISISPHARMACEUTICALS,INC.**

 

 

Per:/s/ Scott                        Cormack                        

Per:/s/ B. Lynne                        Parshall              

 

Scott D. Cormack,

B. Lynne Parshall

President & CEO

COO and CFO

 

 

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**APPENDIX A**

 

**Definitions**

 

**"Affiliate"**of a party means any other party        that, directly or indirectly, through one or more intermediaries, controls, is controlled        by, or is under common control with such first party. For purposes of this definition only,        "control" and, with correlative meanings, the terms "controlled by" and "under common        control with" will mean (a) the possession, directly or indirectly, of the power to        direct the management or policies of a party, whether through the ownership of voting        securities or by contract relating to voting rights or corporate governance, and        (b) the ownership, directly or indirectly, of more than fifty percent (50%) of the        voting securities or other ownership interest of a party; provided that, if local law        restricts foreign ownership, control will be established by direct or indirect ownership of        the maximum ownership percentage that may, under such local law, be owned by foreign        interests. In addition, Regulus Therapeutics, LLC will not be considered an Affiliate of        Isis.

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

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

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

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

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

**"Commercialization Agreement"**has the meaning        set forth in 6.2.2.

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

 

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

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

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

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

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

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

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

**(e)**       was        independently discovered or developed prior to disclosure by such receiving Party, as        evidenced by their written records, without the use of Confidential Information belonging        to the Party that Controls such information and know-how.

 

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

**"Control"**means, with respect to any Patent or        other intellectual property right, possession of the right (whether by ownership, license        or otherwise), to assign, transfer, or grant a license, sublicense or other right to or        under, such Patent or right as provided for herein without violating the terms of any        agreement or other arrangement with any Third Party.

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

**"FDA"**means the United States Food and Drug        Administration and any successor agency thereto.

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

**"GAAP"**means generally accepted accounting        principles of the United States consistently applied.

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

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

[***]

 

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

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

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

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

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

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

**"Isis Patent Rights"**means Isis Core Technology        Patents and Isis Manufacturing Patents.

**"Joint Patents"**means all Patents that claim,        cover or disclose the Joint Technology.

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

 

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

**"MOE Gapmer"**means "2' MOE Gapmers" or an        antisense phosphorothioate oligonucleotide of 15-30 nucleotides wherein all of the backbone        linkages are modified by adding a sulfur at the non-bridging oxygen (phosphorothioate) and        a stretch of at least 10 consecutive nucleotides remain unmodified (deoxy sugars) and the        remaining nucleotides contain an O'-methyl O'-ethyl substitution at the 2' position        (MOE).

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

**"Nonexclusive Clusterin ASO"**has the meaning        set forth in Section 12.2.2.

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

[***]

[***]

[***]

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

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

**"OncoGenex Patent Rights"**means any Patents        Controlled by OncoGenex.

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

 

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

**"OncoGenex Technology Patents"**means all        Patents that claim, cover or disclose the OncoGenex Technology.

**"Patents"**will include (i) all U.S.        patents and patent applications, (ii) any substitutions, divisions, continuations,        continuations-in-part, reissues, renewals, registrations, confirmations, re-examinations,        extensions, supplementary protection certificates and the like, and any provisional        applications, of any such patents or patent applications, and (iii) any foreign or        international equivalent of any of the foregoing.

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

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

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

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

 

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

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

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

**"Regulatory Authority"**means any applicable        government entities regulating or otherwise exercising authority with respect to the        development and commercialization of the Product.

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

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

**"Research"**means*in        vitro*or*in vivo*research, excluding any and all uses in humans.

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

 

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

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

"**Start Date**" means        November 16, 2001.

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

**"Third Party"**means any party other than Isis        or OncoGenex.

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

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

 

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**APPENDIX B**

 

[***]

 

 

 

**Docket #**

**Country/Treaty**

**Patent/****Application #**

**Title**

**Issue Date**

[***]

 

 

 

 

 

 

[***]

[***]

[***]

[***]

[***]

 

 

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**APPENDIX C**

 

[***]

 

**Assignee**

**Docket #**

**Country/Treaty**

**Patent/****Application #**

**Title**

**Issue Date**

[***]

 

 

 

 

 

 

[***]

[***]

[***]

[***]

[***]

 

 

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**APPENDIX D**

 

**ISISCORETECHNOLOGYPATENTS**

         

**Assignee**

**Docket #**

**Country/Treaty**

**Patent/****Application #**

**Title**

**Issue Date**

**ISIS**

 

 

 

 

 

 

[***]

[***]

[***]

[***]

[***]

 

         

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**APPENDIX E**

 

**ISISMANUFACTURINGPATENTS**

         

**Technology**

**Docket #**

**Country/Treaty**

**Patent/****Application #**

**Title**

**Filing Date**

[***]

[***]

[***]

[***]

[***]

[***]

 

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**APPENDIX F**

 

[***]

 

 

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**APPENDIX G**

 

**PRODUCT-SPECIFICTECHNOLOGYPATENTS**

 

 

**Docket No.**

**Country**

**Patent/****Applicaion #**

**Filing                        Date**

**Issue Date**

**Title**

[***]

[***]

[***]

[***]

[***]

[***]

 

 

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