Document:

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                                                                     EXHIBIT 4.2

                             XO COMMUNICATIONS, INC.
                 5 3/4% Convertible Subordinated Notes due 2009

                          REGISTRATION RIGHTS AGREEMENT

                                                                     Dated as of
                                                                January 12, 2001

Salomon Smith Barney Inc.
Goldman, Sachs & Co.,
      c/o Salomon Smith Barney Inc.
            388 Greenwich Street,
                  New York, New York 10013

Ladies and Gentlemen:

                XO Communications, Inc., a corporation organized under the laws
of the State of Delaware (the "Company"), proposes to issue and sell to the
Initial Purchasers (as defined herein) upon the terms set forth in the Purchase
Agreement (as defined herein) its 5 3/4% Convertible Subordinated Notes due
2009, convertible into Class A Common Stock, par value $.02 per share, of the
Company (the "Class A Common Stock"). As an inducement to the Initial Purchasers
to enter into the Purchase Agreement and in satisfaction of a condition to the
obligations of the Initial Purchasers thereunder, the Company agrees with the
Initial Purchasers for the benefit of holders (as defined herein) from time to
time of the Registrable Securities (as defined herein) as follows:

        1.      DEFINITIONS. (a) Capitalized terms used herein without
definition shall have the meanings ascribed thereto in the Purchase Agreement.
As used in this Agreement, the following defined terms shall have the following
meanings:

                "Act" or "Securities Act" means the United States Securities Act
of 1933, as amended.

                "Additional Interest" has the meaning assigned thereto in
Section 2(b)(iii) hereof.

                "Affiliate" of any specified person means any other person
which, directly or indirectly, is in control of, is controlled by, or is under
common control with such specified person. For purposes of this definition,
control of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.

                "Commission" means the United States Securities and Exchange
Commission.

                "Effectiveness Period" has the meaning assigned thereto in
Section 2(b)(i) hereof.

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                "Effective Time" means the date on which the Commission declares
the Shelf Registration Statement effective or on which the Shelf Registration
Statement otherwise becomes effective.

                "Electing Holder" has the meaning assigned thereto in Section
3(a)(3) hereof.

                "Exchange Act" means the United States Securities Exchange Act
of 1934, as amended.

                The term "holder" means, when used with respect to any Security,
the Holder (as defined in the Indenture) and, with respect to any Class A Common
Stock, the record holder of such Class A Common Stock.

                "Indenture" shall mean the Indenture, dated as of January 12,
2001, between the Company and U.S. Trust Company, National Association, as
Trustee.

                "Initial Purchasers" means you.

                "Managing Underwriters" means the investment banker or
investment bankers and manager or managers that shall administer an underwritten
offering, if any, conducted pursuant to Section 6 hereof.

                "NASD Rules" means the Rules of the National Association of
Securities Dealers, Inc., as amended from time to time.

                "Notice and Questionnaire" means a Notice of Registration
Statement and Selling Securityholder Questionnaire substantially in the form of
Exhibit A hereto.

                "Person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.

                "Prospectus" means the prospectus (including, without
limitation, any preliminary prospectus, any final prospectus and any prospectus
that discloses information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A under the Act)
included in the Shelf Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by the Shelf Registration Statement and by
all other amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by the Company under the Exchange Act and incorporated
by reference therein.

                "Purchase Agreement" means the purchase agreement dated January
5, 2001, between the Initial Purchasers and the Company.

                "Registrable Securities" means all or any portion of the
Securities and the shares of Class A Common Stock issuable upon conversion of
such Securities and any Class A Common Stock or securities of the Company issued
in exchange for or in respect of such Class A Common Stock or securities,
whether as the result of any stock split or reclassification of, or

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stock dividend on, such Class A Common Stock or otherwise; provided, however,
that a security ceases to be a Registrable Security when it is no longer a
Restricted Security.

                "Registration Default" has the meaning assigned thereto in
Section 2(b)(iii) hereof.

                "Restricted Security" means any Security or share of Class A
Common Stock issued or issuable upon conversion of any Security, except any
Security or share of Class A Common Stock which (i) has been effectively
registered under the Securities Act and sold in a manner contemplated by the
Shelf Registration Statement, or (ii) has been transferred in compliance with
Rule 144 under the Securities Act (or any successor provision thereto) or is
transferable pursuant to paragraph (k) of such Rule 144 (or any successor
provision thereto), (iii) has been sold in compliance with Regulation S under
the Securities Act (or any successor thereto) and does not constitute the unsold
allotment of a distributor within the meaning of Regulation S under the
Securities Act or (iv) has otherwise been transferred and a new Security or
share of Class A Common Stock not subject to transfer restrictions under the
Securities Act has been delivered by or on behalf of the Company.

                "Rules and Regulations" means the published rules and
regulations of the Commission promulgated under the Securities Act or the
Exchange Act, as in effect at any relevant time.

                "Shelf Registration" means a registration effected pursuant to
Section 2 hereof.

                "Shelf Registration Statement" means a "shelf" registration
statement filed under the Securities Act providing for the registration of, and
the sale on a continuous or delayed basis by the holders of, all of the
Registrable Securities pursuant to Rule 415 under the Securities Act and/or any
similar rule that may be adopted by the Commission, filed by the Company
pursuant to the provisions of Section 2 of this Agreement, including the
Prospectus contained therein, any amendments and supplements to such
registration statement, including post-effective amendments, and all exhibits
and all material incorporated by reference in such registration statement.

                "Suspension Period" shall have the meaning assigned thereto in
Section 3(j) hereof.

                The term "underwriter" means any underwriter of Registrable
Securities in connection with an offering thereof under a Shelf Registration
Statement.

                (b)     Wherever there is a reference in this Agreement to a
        percentage of Registrable Securities, Class A Common Stock shall be
        treated as representing the aggregate principal amount of Securities
        which was surrendered for conversion or exchange in order to receive
        such number of shares of Class A Common Stock.

        2.      SHELF REGISTRATION. (a) The Company shall file with the
Commission a Shelf Registration Statement relating to the offer and sale of the
Registrable Securities and shall use its best efforts to cause such Shelf
Registration Statement to be declared effective under the Act on or prior to 180
days after the Closing Date (as defined in the Purchase Agreement), provided,

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however, that no holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement or to use the Prospectus
forming a part thereof for resales of Registrable Securities unless such holder
is an Electing Holder.

                (b)     The Company shall use its reasonable best efforts:

                        (i)     To keep the Shelf Registration Statement
                                continuously effective in order to permit the
                                Prospectus forming part thereof to be usable by
                                holders for resales of Registrable Securities
                                for a period ending two years from the last
                                Closing Time (as defined in the Purchase
                                Agreement), or such shorter period that will
                                terminate when there are no Registrable
                                Securities outstanding (in either case, such
                                period being referred to herein as the
                                "Effectiveness Period");

                        (ii)    After the Effective Time of the Shelf
                                Registration Statement, promptly upon the
                                request of any holder of Registrable Securities
                                that is not then an Electing Holder, to take any
                                action reasonably necessary to enable such
                                holder to use the Prospectus forming a part
                                thereof for resales of Registrable Securities,
                                including, without limitation, any action
                                necessary to identify such holder as a selling
                                securityholder in the Shelf Registration
                                Statement; provided, however, that nothing in
                                this subparagraph shall relieve such holder of
                                the obligation to return a completed and signed
                                Notice and Questionnaire to the Company in
                                accordance with Section 3(a)(2) hereof; and

                        (iii)   If the Shelf Registration Statement is not
                                declared effective by the Commission on or prior
                                to the date specified for such effectiveness in
                                (a) above or (B) the Shelf Registration
                                Statement is declared effective but thereafter
                                ceases to be effective or usable in connection
                                with resales of Restricted Securities during the
                                Effectiveness Period (each such event referred
                                to in clause (A) or (B) above a "Registration
                                Default"), then additional interest will accrue
                                (in addition to the stated interest on the
                                Securities) at the rate of 0.25% per annum on
                                the principal amount of the Securities,
                                determined daily (calculated on the same basis
                                as interest on the Securities shall be
                                calculated) for the period from the occurrence
                                of the Registration Default until such time as
                                no Registration Default is in effect (after
                                which time no special interest will accrue).
                                Such additional interest (the "Additional
                                Interest") will be payable in cash semi-annually
                                in arrears on each January and July in
                                accordance with the Indenture. For each 90-day
                                period that the Registration Default continues,
                                the per annum rate of such Additional Interest
                                will increase by an additional 0.25%; provided
                                that such rate shall in no event exceed 0.5% per
                                annum in the aggregate. At such time as such
                                Registration Default is no longer

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                                in effect, the interest rate on the Securities
                                shall be 5 3/4% and no further Additional
                                Interest will accrue.

The Company shall be deemed not to have used its best efforts (within the
meaning of Section 4(i) of the Purchase Agreement) to keep the Shelf
Registration Statement effective during the Effectiveness Period if the Company
voluntarily takes any action that would result in Electing Holders not being
able to offer and sell any of their Registrable Securities during such period,
unless (i) such action is required by applicable law, or (ii) the Company
determines based upon the advice of counsel that is advisable to disclose in the
Shelf Registration Statement a financing, acquisition or other corporate
transaction, and the Board of Directors of the Company shall have determined in
good faith that such disclosure is not in the best interests of the Company and
its stockholders, and, in the case of clause (i) above, the Company thereafter
promptly complies with the requirements of paragraph 3(j) below. Notwithstanding
Section 2(b)(iii) above, additional interest shall not accrue under the
circumstances contemplated by clauses (i) and (ii) above, so long as the
effectiveness of the Shelf Registration Statement is not suspended for more than
30 days in any three month period or for three periods not to exceed an
aggregate of 90 days in any twelve-month period during the Effectiveness Period.

                (c)     Any shares of Class A Common Stock issued or issuable
        upon the exercise of a holder's right pursuant to Section 1201 of the
        Indenture to require the Company to repurchase any or all of a holder's
        Securities upon the occurrence of a Change of Control (as defined in the
        Indenture) shall be deemed "Registrable Securities" for the purposes of
        this Agreement for so long as such securities constitute Restricted
        Securities. The Company shall include such securities in the Shelf
        Registration Statement filed pursuant to (a) above, or file a new Shelf
        Registration Statement relating to the offer and sale of such securities
        and shall use its best efforts to cause such Shelf Registration
        Statement to be declared effective under the Act on or prior to 60 days
        from the expiration date of the Designated Event Offer pursuant to which
        such securities were issued in compliance with the procedures set forth
        in (b) above (except that any reference to the date of effectiveness in
        (b) shall be as specified in this clause (c)).

        3.      REGISTRATION PROCEDURES. In connection with the Shelf
Registration Statement, the following provisions shall apply:

                (a)     (i) Not less than 30 calendar days prior to the
        Effective Time of the Shelf Registration Statement, the Company shall
        mail the Notice and Questionnaire to the holders of Registrable
        Securities. No holder shall be entitled to be named as a selling
        security holder in the Shelf Registration Statement as of the Effective
        Time, and no holder shall be entitled to use the Prospectus forming a
        part thereof for resales of Registrable Securities at any time, unless
        such holder has returned a completed and signed Notice and Questionnaire
        to the Company by the deadline for response set forth therein; provided,
        however, holders of Registrable Securities shall have at least 15
        calendar days from the date on which the Notice and Questionnaire is
        first mailed to such holders to return a completed and signed Notice and
        Questionnaire to the Company.

                        (ii)    After the Effective Time of the Shelf
                                Registration Statement, the Company shall, upon
                                the request of any holder of Registrable

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                                Securities that has not previously received a
                                Notice and Questionnaire, promptly send a Notice
                                and Questionnaire to such holder, and such
                                holder must return a completed and signed Notice
                                and Questionnaire to the Company by the deadline
                                for response set forth therein (not to be less
                                than 15 calendar days from the date on which the
                                Notice and Questionnaire is first mailed to such
                                holders). The Company shall not be required to
                                take any action to name such holder as a selling
                                securityholder in the Shelf Registration
                                Statement or to enable such holder to use the
                                Prospectus forming a part thereof for resales of
                                Registrable Securities until such holder has
                                returned a completed and signed Notice and
                                Questionnaire to the Company.

                        (iii)   The term "Electing Holder" shall mean any holder
                                of Registrable Securities that has returned a
                                completed and signed Notice and Questionnaire to
                                the Company within the required time period in
                                accordance with Section 3(a)(1) or 3(a)(2)
                                hereof.

                (b)     The Company shall furnish to each Electing Holder, prior
        to the Effective Time, a copy of the Shelf Registration Statement
        initially filed with the Commission, and shall furnish to such holders,
        prior to the filing thereof with the Commission, copies of each
        amendment thereto and each amendment or supplement, if any, to the
        Prospectus included therein, and shall use its best efforts to reflect
        in each such document, at the Effective Time or when so filed with the
        Commission, as the case may be, such comments as such holders and their
        respective counsel reasonably may propose.

                (c)     The Company shall promptly take such action as may be
        necessary so that (i) each of the Shelf Registration Statement and any
        amendment thereto and the Prospectus forming part thereof and any
        amendment or supplement thereto (and each report or other document
        incorporated therein by reference in each case) complies in all material
        respects with the Securities Act and the Exchange Act and the respective
        rules and regulations thereunder, (ii) each of the Shelf Registration
        Statement and any amendment thereto does not, when it becomes effective,
        contain an untrue statement of a material fact or omit to state a
        material fact required to be stated therein or necessary to make the
        statements therein not misleading and (iii) each of the Prospectus
        forming part of the Shelf Registration Statement, and any amendment or
        supplement to such Prospectus, does not at any time during the
        Effectiveness Period include an untrue statement of a material fact or
        omit to state a material fact necessary in order to make the statements
        therein, in the light of the circumstances under which they were made,
        not misleading.

                (d)     The Company shall promptly advise each Electing Holder,
        and shall confirm such advice in writing if so requested by any such
        holder:

                        (i)     when the Shelf Registration Statement and any
                                amendment thereto has been filed with the
                                Commission and when the Shelf

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                                Registration Statement or any post-effective
                                amendment thereto has become effective;

                        (ii)    of any request by the Commission for amendments
                                or supplements to the Shelf Registration
                                Statement or the Prospectus included therein or
                                for additional information;

                        (iii)   of the issuance by the Commission of any stop
                                order suspending the effectiveness of the Shelf
                                Registration Statement or the initiation of any
                                proceedings for such purpose;

                        (iv)    of the receipt by the Company of any
                                notification with respect to the suspension of
                                the qualification of the securities included in
                                the Shelf Registration Statement for sale in any
                                jurisdiction or the initiation of any proceeding
                                for such purpose; and

                        (v)     of the happening of any event or the existence
                                of any state of facts that requires the making
                                of any changes in the Shelf Registration
                                Statement or the Prospectus included therein so
                                that, as of such date, such Shelf Registration
                                Statement and Prospectus do not contain an
                                untrue statement of a material fact and do not
                                omit to state a material fact required to be
                                stated therein or necessary to make the
                                statements therein (in the case of the
                                Prospectus, in light of the circumstances under
                                which they were made) not misleading (which
                                advice shall be accompanied by an instruction to
                                such holders to suspend the use of the
                                Prospectus until the requisite changes have been
                                made).

                (e)     The Company shall use its best efforts to prevent the
        issuance, and if issued to obtain the withdrawal, of any order
        suspending the effectiveness of the Shelf Registration Statement at the
        earliest possible time.

                (f)     The Company shall furnish to each Electing Holder,
        without charge, at least one copy of the Shelf Registration Statement
        and all post-effective amendments thereto, including financial
        statements and schedules.

                (g)     The Company shall, during the Effectiveness Period,
        deliver to each Electing Holder, without charge, as many copies of the
        Prospectus (including each preliminary Prospectus) included in the Shelf
        Registration Statement and any amendment or supplement thereto as such
        Electing Holder may reasonably request; and the Company consents (except
        during the continuance of any event described in Section 3(d)(5) above)
        to the use of the Prospectus and any amendment or supplement thereto by
        each of the Electing Holders in connection with the offering and sale of
        the Registrable Securities covered by the Prospectus and any amendment
        or supplement thereto during the Effectiveness Period.

                (h)     Prior to any offering of Registrable Securities pursuant
        to the Shelf Registration Statement, the Company shall (1) register or
        qualify or cooperate with the

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        Electing Holders and their respective counsel in connection with the
        registration or qualification of such Registrable Securities for offer
        and sale under the securities or "blue sky" laws of such jurisdictions
        within the United States as any Electing Holder may reasonably request,
        (2) keep such registrations or qualifications in effect and comply with
        such laws so as to permit the continuance of offers and sales in such
        jurisdictions for so long as may be necessary to enable any Electing
        Holder or underwriter, if any, to complete its distribution of
        Registrable Securities pursuant to the Shelf Registration Statement, and
        (3) take any and all other actions necessary or advisable to enable the
        disposition in such jurisdictions of such Registrable Securities;
        provided, however, that in no event shall the Company be obligated to
        (i) qualify as a foreign corporation or as a dealer in securities in any
        jurisdiction where it would not otherwise be required to so qualify but
        for this Section 3(h) or (ii) file any general consent to service of
        process in any jurisdiction where it is not as of the date hereof so
        subject.

                (i)     Unless any Registrable Securities shall be in book-entry
        only form, the Company shall cooperate with the Electing Holders to
        facilitate the timely preparation and delivery of certificates
        representing Registrable Securities to be sold pursuant to the Shelf
        Registration Statement, which certificates, if so required by any
        securities exchange upon which any Registrable Securities are listed,
        shall be penned, lithographed or engraved, or produced by any
        combination of such methods, on steel engraved borders, and which
        certificates shall be free of any restrictive legends and in such
        permitted denominations and registered in such names as Electing Holders
        may request in connection with the sale of Registrable Securities
        pursuant to the Shelf Registration Statement.

                (j)     Upon the occurrence of any fact or event contemplated by
        paragraph 3(d)(5) above, the Company shall promptly prepare a
        post-effective amendment or supplement to the Shelf Registration
        Statement or the Prospectus, or any document incorporated therein by
        reference, or file any other required document so that, as thereafter
        delivered to purchasers of the Registrable Securities included therein,
        the Prospectus will not include an untrue statement of a material fact
        or omit to state any material fact necessary to make the statements
        therein, in the light of the circumstances under which they were made,
        not misleading; provided, however, if the Company determines based upon
        the advice of counsel that it is advisable to disclose in the Shelf
        Registration Statement a financing, acquisition or other corporate
        transaction, and the Board of Directors of the Company shall have
        determined in good faith that such disclosure would not be in the best
        interests of the Company and its stockholders, the Company shall not be
        required to prepare and file such amendment, supplement or document for
        such period (a "Suspension Period") as the Board of Directors of the
        Company shall have determined in good faith is in the best interests of
        the Company. If the Company notifies the Electing Holders of the
        occurrence of any event contemplated by paragraph 3(d)(5) above, each
        Electing Holder agrees, as a consequence of the inclusion of any of such
        holder's Registrable Securities in the Shelf Registration Statement, to
        suspend the use of the Prospectus until the requisite changes to the
        Prospectus have been made.

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                (k)     Not later than the Effective Time of the Shelf
        Registration Statement, the Company shall provide CUSIP numbers for the
        Registrable Securities.

                (l)     The Company shall use its best efforts to comply with
        all applicable Rules and Regulations, and to make generally available to
        its securityholders as soon as practicable, but in any event not later
        than eighteen months after (i) the effective date (as defined in Rule
        158(c) under the Securities Act) of the Shelf Registration Statement,
        (ii) the effective date of each post-effective amendment to the Shelf
        Registration Statement, and (iii) the date of each filing by the Company
        with the Commission of an Annual Report on Form 10-K that is
        incorporated by reference in the Shelf Registration Statement, an
        earning statement of the Company and its subsidiaries complying with
        Section 11(a) of the Securities Act and the rules and regulations of the
        Commission thereunder (including, at the option of the Company, Rule
        158).

                (m)     In the event of an underwritten offering conducted
        pursuant to Section 6 hereof, the Company shall, if requested, promptly
        include or incorporate in a prospectus supplement or post-effective
        amendment to the Shelf Registration Statement such information as the
        Managing Underwriters reasonably agree should be included therein and to
        which the Company does not reasonably object and shall make all required
        filings of such prospectus supplement or post-effective amendment as
        soon as practicable after it is notified of the matters to be included
        or incorporated in such prospectus supplement or post-effective
        amendment.

                (n)     The Company shall enter into such customary agreements
        (including an underwriting agreement in customary form in the event of
        an underwritten offering conducted pursuant to Section 6 hereof) and
        take all other appropriate action in order to expedite and facilitate
        the registration and disposition of the Registrable Securities, and in
        connection therewith, if an underwriting agreement is entered into,
        cause the same to contain indemnification provisions and procedures
        substantially identical to those set forth in Section 5 hereof with
        respect to all parties to be indemnified pursuant to Section 5 hereof.

                (o)     The Company shall:

                        (i)     (A) make reasonably available for inspection by
                                Electing Holders, any underwriter participating
                                in any disposition pursuant to the Shelf
                                Registration Statement, and any attorney,
                                accountant or other agent retained by such
                                holders or any such underwriter all relevant
                                financial and other records, pertinent corporate
                                documents and properties of the Company and its
                                subsidiaries, and (B) cause the Company's
                                officers, directors and employees to supply all
                                information reasonably requested by such holders
                                or any such underwriter, attorney, accountant or
                                agent in connection with the Shelf Registration
                                Statement, in each case, as is customary for
                                similar due diligence examinations; provided,
                                however, that all records, information and
                                documents that are designated in writing by the
                                Company, in good faith, as confidential shall be
                                kept

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                                confidential by such holders and any such
                                underwriter, attorney, accountant or agent,
                                unless such disclosure is made in connection
                                with a court proceeding or required by law, or
                                such records, information or documents become
                                available to the public generally or through a
                                third party without an accompanying obligation
                                of confidentiality; and provided further that,
                                if the foregoing inspection and information
                                gathering would otherwise disrupt the Company's
                                conduct of its business, such inspection and
                                information gathering shall, to the greatest
                                extent possible, be coordinated on behalf of the
                                Electing Holders and the other parties entitled
                                thereto by one counsel designated by and on
                                behalf of Electing Holders and other parties;

                        (ii)    in connection with any underwritten offering
                                conducted pursuant to Section 6 hereof, make
                                such representations and warranties to the
                                holders participating in such underwritten
                                offering and to the Managing Underwriters, in
                                form, substance and scope as are customarily
                                made by the Company to underwriters in primary
                                underwritten offerings of equity and convertible
                                debt securities and covering matters including,
                                but not limited to, those set forth in the
                                Purchase Agreement;

                        (iii)   in connection with any underwritten offering
                                conducted pursuant to Section 6 hereof, obtain
                                opinions of counsel to the Company (which
                                counsel and opinions (in form, scope and
                                substance) shall be reasonably satisfactory to
                                the Managing Underwriters) addressed to each
                                holder participating in such underwritten
                                offering and the underwriters, covering such
                                matters as are customarily covered in opinions
                                requested in primary underwritten offerings of
                                equity and convertible debt securities and such
                                other matters as may be reasonably requested by
                                such holders and underwriters (it being agreed
                                that the matters to be covered by such opinions
                                shall include, without limitation, as of the
                                date of the opinion and as of the Effective Time
                                of the Shelf Registration Statement or most
                                recent post-effective amendment thereto, as the
                                case may be, the absence from the Shelf
                                Registration Statement and the Prospectus,
                                including the documents incorporated by
                                reference therein; of an untrue statement of a
                                material fact or the omission of a material fact
                                required to be stated therein or necessary to
                                make the statements therein not misleading);

                        (iv)    in connection with any underwritten offering
                                conducted pursuant to Section 6 hereof, obtain
                                "cold comfort" letters and updates thereof from
                                the independent public accountants of the
                                Company (and, if necessary, from the independent
                                public accountants of any subsidiary of the
                                Company or of any business acquired by the
                                Company for which financial statements and
                                financial data are, or

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                                are required to be, included in the Shelf
                                Registration Statement), addressed to each
                                holder participating in such underwritten
                                offering (if such holder has provided such
                                letter, representations or documentation, if
                                any, required for such cold comfort letter to be
                                so addressed) underwriters, in customary form
                                and covering matters of the type customarily
                                covered in "cold comfort" letters in connection
                                with primary underwritten offerings;

                        (v)     in connection with any underwritten offering
                                conducted pursuant to Section 6 hereof, deliver
                                such documents and certificates as may be
                                reasonably requested by any holders
                                participating in such underwritten offering and
                                the Managing Underwriters, if any, including,
                                without limitation, certificates to evidence
                                compliance with Section 3(j) hereof and with any
                                conditions contained in the underwriting
                                agreement or other agreements entered into by
                                the Company.

                (p)     The Company will use its best efforts to cause the Class
        A Common Stock issuable upon conversion of the Securities to be listed
        for quotation on the Nasdaq National Market or other stock exchange or
        trading system on which the Class A Common Stock primarily trades on or
        prior to the Effective Time of the Shelf Registration Statement
        hereunder.

                (q)     In the event that any broker-dealer registered under the
        Exchange Act shall be an "affiliate" (as defined in Rule 2720(b)(1) of
        the NASD Rules (or any successor provision thereto)) of the Company or
        has a "conflict of interest" (as defined in Rule 2720(b)(7) of the NASD
        Rules (or any successor provision thereto)) and such broker-dealer shall
        underwrite, participate as a member of an underwriting syndicate or
        selling group or assist in the distribution of any Registrable
        Securities covered by the Shelf Registration Statement, whether as a
        holder of such Registrable Securities or as an underwriter, a placement
        or sales agent or a broker or dealer in respect thereof, or otherwise,
        the Company shall assist such broker-dealer in complying with the
        requirements of the NASD Rules, including, without limitation, by (A)
        engaging a "qualified independent underwriter" (as defined in Rule
        2720(b)(15) of the NASD Rules (or any successor provision thereto)) to
        participate in the preparation of the registration statement relating to
        such Registrable Securities, to exercise usual standards of due
        diligence in respect thereto and to recommend the public offering price
        of such Registrable Securities, (B) indemnifying such qualified
        independent underwriter to the extent of the indemnification of
        underwriters provided in Section 5 hereof, and (C) providing such
        information to such broker-dealer as may be required in order for such
        broker-dealer to comply with the requirements of the NASD Rules.

                (r)     The Company shall use its best efforts to take all other
        steps necessary to effect the registration, offering and sale of the
        Registrable Securities covered by the Shelf Registration Statement
        contemplated hereby.

                                       11
<PAGE>   12

        4.      REGISTRATION EXPENSES. The Company shall bear all fees and
expenses incurred in connection with the performance of its obligations under
Sections 2, 3 and 6 hereof and the fees reasonable and expenses of a single
counsel to the Initial Purchasers. In addition, in the event of an underwritten
offering of Registrable Securities conducted pursuant to Section 6 hereof, or if
in any other event the Company requires that inspection and information
gathering be coordinated by reasonable counsel for the Electing Holders as
provided in Section 3(o)(i) hereof, the Company shall pay the reasonable fees
and expenses of a single counsel selected by the Electing Holders of not less
than 25% of the Registrable Securities to be included in such underwritten
offering (or, in any such other event, included in the Shelf Registration
Statement) to represent them. The Electing Holders participating in such
offering (or, in any such other event, participating in such inspection and
information gathering) shall be responsible, on a pro rata basis based on the
respective amount of their Registrable Securities included in such offering, for
all fees and expenses of such counsel in excess of $25,000.

        5.      INDEMNIFICATION AND CONTRIBUTION.

                (a)     Indemnification by the Company. Upon the registration of
        the Registrable Securities pursuant to Section 2 hereof, the Company
        shall indemnify and hold harmless each Electing Holder and each
        underwriter, selling agent or other securities professional, if any,
        which facilitates the disposition of Registrable Securities, and each of
        their respective officers and directors and each person who controls
        such Electing Holder, underwriter, selling agent or other securities
        professional within the meaning of Section 15 of the Securities Act or
        Section 20 of the Exchange Act (each such person being sometimes
        referred to as an "Indemnified Person") against any losses, claims,
        damages or liabilities, joint or several, to which such Indemnified
        Person may become subject under the Securities Act or otherwise, insofar
        as such losses, claims, damages or liabilities (or actions in respect
        thereof) arise out of or are based upon an untrue statement or alleged
        untrue statement of a material fact contained in any Shelf Registration
        Statement under which such Registrable Securities are to be registered
        under the Securities Act, or any Prospectus contained therein or
        furnished by the Company to any Indemnified Person, or any amendment or
        supplement thereto, or arise out of or are based upon the omission or
        alleged omission to state therein a material fact required to be stated
        therein or necessary to make the statements therein not misleading, and
        the Company hereby agrees to reimburse such Indemnified Person for any
        legal or other expenses reasonably incurred by them in connection with
        investigating or defending any such action or claim as such expenses are
        incurred; provided, however, that the Company shall not be liable to any
        such Indemnified Person in any such case to the extent that any such
        loss, claim, damage or liability arises out of or is based upon an
        untrue statement or alleged untrue statement or omission or alleged
        omission made in such Shelf Registration Statement or Prospectus, or
        amendment or supplement, in reliance upon and in conformity with written
        information furnished to the Company by such Indemnified Person
        expressly for use therein.

                (b)     Indemnification by the Holders and any Agents and
        Underwriters. Each Electing Holder agrees, as a consequence of the
        inclusion of any of such holder's Registrable Securities in such Shelf
        Registration Statement, and each underwriter, selling agent or other
        securities professional, if any, which facilitates the disposition of

                                       12
<PAGE>   13

        Registrable Securities shall agree, as a consequence of facilitating
        such disposition of Registrable Securities, severally and not jointly,
        to (i) indemnify and hold harmless the Company, its directors, officers
        who sign any Shelf Registration Statement and each person, if any, who
        controls the Company within the meaning of either Section 15 of the
        Securities Act or Section 20 of the Exchange Act, against any losses,
        claims, damages or liabilities to which the Company or such other
        persons may become subject, under the Securities Act or otherwise,
        insofar as such losses, claims, damages or liabilities (or actions in
        respect thereof) arise out of or are based upon an untrue statement or
        alleged untrue statement of a material fact contained in such Shelf
        Registration Statement or Prospectus, or any amendment or supplement, or
        arise out of or are based upon the omission or alleged omission to state
        therein a material fact required to be stated therein or necessary to
        make the statements therein not misleading, in each case to the extent,
        but only to the extent, that such untrue statement or alleged untrue
        statement or omission or alleged omission was made in reliance upon and
        in conformity with written information furnished to the Company by such
        holder, underwriter, selling agent or other securities professional
        expressly for use therein, and (ii) reimburse the Company for any legal
        or other expenses reasonably incurred by the Company in connection with
        investigating or defending any such action or claim as such expenses are
        incurred.

                (c)     Notices of Claims, Etc. Promptly after receipt by an
        indemnified party under subsection (a) or (b) above of notice of the
        commencement of any action, such indemnified party shall, if a claim in
        respect thereof is to be made against an indemnifying party under this
        Section 5, notify such indemnifying party in writing of the commencement
        thereof; but the omission so to notify the indemnifying party shall not
        relieve it from any liability which it may have to any indemnified party
        otherwise than under this Section 5. In case any such action shall be
        brought against any indemnified party and it shall notify an
        indemnifying party of the commencement thereof, such indemnifying party
        shall be entitled to participate therein and, to the extent that it
        shall wish, jointly with any other indemnifying party similarly
        notified, to assume the defense thereof, with counsel reasonably
        satisfactory to such indemnified party (who shall not, except with the
        consent of the indemnified party, be counsel to the indemnifying party),
        and, after notice from the indemnifying party to such indemnified party
        of its election so to assume the defense thereof, such indemnifying
        party shall not be liable to such indemnified party under this Section 5
        for any legal expenses of other counsel or any other expenses, in each
        case subsequently incurred by such indemnified party, in connection with
        the defense thereof other than reasonable costs of investigation. No
        indemnifying party shall, without the written consent of the indemnified
        party, effect the settlement or compromise of, or consent to the entry
        of any judgment with respect to, any pending or threatened action or
        claim in respect of which indemnification or contribution may be sought
        hereunder (whether or not the indemnified party is an actual or
        potential party to such action or claim) unless such settlement,
        compromise or judgment (i) includes an unconditional release of the
        indemnified party from all liability arising out of such action or claim
        provided, that such unconditional release may be subject to a parallel
        release of a claimant or plaintiff by such indemnified party from all
        liability in respect of claims or counter claims asserted by such
        indemnified party and (ii) does not include a statement as to, or an
        admission of, fault, culpability or a failure to act, by or on behalf of
        any indemnified party.

                                       13
<PAGE>   14

                (d)     Contribution. If the indemnification provided for in
        this Section 5 is unavailable to or insufficient to hold harmless an
        indemnified party under subsection (a) or (b) above in respect of any
        losses, claims, damages or liabilities (or actions in respect thereof)
        referred to therein, then each indemnifying party shall contribute to
        the amount paid or payable by such indemnified party as a result of such
        losses, claims, damages or liabilities (or actions in respect thereof)
        in such proportion as is appropriate to reflect the relative fault of
        the indemnifying party and the indemnified party in connection with the
        statements or omissions which resulted in such losses, claims, damages
        or liabilities (or actions in respect thereof), as well as any other
        relevant equitable considerations. The relative fault of such
        indemnifying party and indemnified party shall be determined by
        reference to, among other things, whether the untrue or alleged untrue
        statement of a material fact or omission or alleged omission to state a
        material fact relates to information supplied by such indemnifying party
        or by such indemnified party, and the parties' relative intent,
        knowledge, access to information and opportunity to correct or prevent
        such statement or omission. The parties hereto agree that it would not
        be just and equitable if contribution pursuant to this Section 5(d) were
        determined by pro rata allocation (even if the Electing Holders or any
        underwriters, selling agents or other securities professionals or all of
        them were treated as one entity for such purpose) or by any other method
        of allocation which does not take account of the equitable
        considerations referred to in this Section 5(d). The amount paid or
        payable by an indemnified party as a result of the losses, claims,
        damages or liabilities (or actions in respect thereof) referred to above
        shall be deemed to include any legal or other fees or expenses
        reasonably incurred by such indemnified party in connection with
        investigating or defending any such action or claim. No person guilty of
        fraudulent misrepresentation (within the meaning of Section 11(f) of the
        Securities Act) shall be entitled to contribution from any person who
        was not guilty of such fraudulent misrepresentation. The obligations of
        the Electing Holders and any underwriters, selling agents or other
        securities professionals in this Section 5(d) to contribute shall be
        several in proportion to the percentage of principal amount of
        Registrable Securities registered or underwritten, as the case may be,
        by them and not joint.

                (e)     Notwithstanding any other provision of this Section 5,
        in no event will any (i) Electing Holder be required to undertake
        liability to any person under this Section 5 for any amounts in excess
        of the dollar amount of the proceeds to be received by such holder from
        the sale of such holder's Registrable Securities (after deducting any
        fees, discounts and commissions applicable thereto) pursuant to any
        Shelf Registration Statement under which such Registrable Securities are
        to be registered under the Securities Act and (ii) underwriter, selling
        agent or other securities professional be required to undertake
        liability to any person hereunder for any amounts in excess of the
        discount, commission or other compensation payable to such underwriter,
        selling agent or other securities professional with respect to the
        Registrable Securities underwritten by it and distributed to the public.

                (f)     The obligations of the Company under this Section 5
        shall be in addition to any liability which the Company may otherwise
        have to any Indemnified Person and the obligations of any Indemnified
        Person under this Section 5 shall be in addition to any liability which
        such Indemnified Person may otherwise have to the Company. The

                                       14
<PAGE>   15

        remedies provided in this Section 5 are not exclusive and shall not
        limit any rights or remedies which may otherwise be available to an
        indemnified party at law or in equity.

        6.      UNDERWRITTEN OFFERING. Any holder of Registrable Securities who
desires to do so may sell Registrable Securities (in whole or in part) in an
underwritten offering; provided that (i) the Electing Holders of at least 331/3%
in aggregate principal amount of the Registrable Securities then covered by the
Shelf Registration Statement shall request such an offering , (ii) the aggregate
principal amount of Registrable Securities included in any underwritten offering
shall not be less than $25 million and (iii) at least such aggregate principal
amount of such Registrable Securities shall be included in such offering; and
provided further that the Company shall not be obligated to cooperate with more
than one underwritten offering during the Effectiveness Period. Upon receipt of
such a request, the Company shall provide all holders of Registrable Securities
written notice of the request, which notice shall inform such holders that they
have the opportunity to participate in the offering. In any such underwritten
offering, the investment banker or bankers and manager or managers that will
administer the offering will be selected by, and the underwriting arrangements
with respect thereto (including the size of the offering) will be approved by,
the holders of a majority of the Registrable Securities to be included in such
offering; provided, however, that such investment bankers and managers and
underwriting arrangements must be reasonably satisfactory to the Company. No
holder may participate in any underwritten offering contemplated hereby unless
(a) such holder agrees to sell such holder's Registrable Securities to be
included in the underwritten offering in accordance with any approved
underwriting arrangements, (b) such holder completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such approved
underwriting arrangements, and (c) if such holder is not then an Electing
Holder, such holder returns a completed and signed Notice and Questionnaire to
the Company in accordance with Section 3(a)(2) hereof within a reasonable amount
of time before such underwritten offering. The holders participating in any
underwritten offering shall be responsible for any underwriting discounts and
commissions and fees including the fees of any qualified independent underwriter
and, subject to Section 4 hereof, expenses of their own counsel. The Company
shall pay all expenses customarily borne by issuers, including but not limited
to filing fees, the fees and disbursements of its counsel and independent public
accountants and any printing expenses incurred in connection with such
underwritten offering. Notwithstanding the foregoing or the provisions of
Section 3(m) hereof, upon receipt of a request from the Managing Underwriter or
a representative of holders of a majority in principal amount of the Registrable
Securities to be included in an underwritten offering to prepare and file an
amendment or supplement to the Shelf Registration Statement and Prospectus in
connection with an underwritten offering, the Company may delay the filing of
any such amendment or supplement for up to 90 days if the Board of Directors of
the Company shall have determined in good faith that the Company has a bona fide
business reason for such delay.

        7.      MISCELLANEOUS.

                (a)     Other Registration Rights. The Company may grant
        registration rights that would permit any Person that is a third party
        the right to piggy-back on any Shelf Registration Statement, provided
        that if the Managing Underwriter of any underwritten offering conducted
        pursuant to Section 6 hereof notifies the Company and the Electing

                                       15
<PAGE>   16

        Holders that the total amount of securities which the Electing Holders
        and the holders of such piggy-back rights intend to include in any Shelf
        Registration Statement is so large as to materially threaten the success
        of such offering (including the price at which such securities can be
        sold), then the amount, number or kind of securities to be offered for
        the account of holders of such piggy-back rights will be reduced to the
        extent necessary to reduce the total amount of securities to be included
        in such offering to the amount, number and kind recommended by the
        Managing Underwriter prior to any reduction in the amount of Registrable
        Securities to be included in such Shelf Registration Statement; provided
        that, with respect to registration rights granted by the Company prior
        to the date hereof, no cutback pursuant to this Section shall be
        required to the extent such cutback would conflict with such previously
        granted registration rights.

                (b)     Amendments and Waivers. This Agreement, including this
        Section 7(b), may be amended, and waivers or consents to departures from
        the provisions hereof may be given, only by a written instrument duly
        executed by the Company and the holders of a majority in aggregate
        principal amount of Registrable Securities then outstanding. Each holder
        of Registrable Securities outstanding at the time of any such amendment,
        waiver or consent or thereafter shall be bound by any amendment, waiver
        or consent effected pursuant to this Section 7(b), whether or not any
        notice, writing or marking indicating such amendment, waiver or consent
        appears on the Registrable Securities or is delivered to such holder.

                (c)     Notices. All notices and other communications provided
        for or permitted hereunder shall be given as provided in the Purchase
        Agreement.

                (d)     Parties in Interest. The parties to this Agreement
        intend that all holders of Registrable Securities shall be entitled to
        receive the benefits of this Agreement and that any Electing Holder
        shall be bound by the terms and provisions of this Agreement by reason
        of such election with respect to the Registrable Securities which are
        included in a Shelf Registration Statement. All the terms and provisions
        of this Agreement shall be binding upon, shall inure to the benefit of
        and shall be enforceable by the respective successors and assigns of the
        parties hereto and any holder from time to time of the Registrable
        Securities to the aforesaid extent. In the event that any transferee of
        any holder of Registrable Securities shall acquire Registrable
        Securities, in any manner, whether by gift, bequest, purchase, operation
        of law or otherwise, such transferee shall, without any further writing
        or action of any kind, be entitled to receive the benefits of and, if an
        Electing Holder, be conclusively deemed to have agreed to be bound by
        and to perform all of the terms and provisions of this Agreement to the
        aforesaid extent.

                (e)     Counterparts. This Agreement may be executed in any
        number of counterparts and by the parties hereto in separate
        counterparts, each of which when so executed shall be deemed to be an
        original and all of which taken together shall constitute one and the
        same agreement.

                (f)     Headings. The headings in this agreement are for
        convenience of reference only and shall not limit or otherwise affect
        the meaning hereof.

                                       16
<PAGE>   17

                (g)     Governing Law. This Agreement shall be governed by and
        construed in accordance with the laws of the State of New York, without
        giving effect to any provisions relating to conflicts of laws.

                (h)     Severability. In the event that any one or more of the
        provisions contained herein, or the application thereof in any
        circumstances, is held invalid, illegal or unenforceable in any respect
        for any reason, the validity, legality and enforceability of any such
        provision in every other respect and of the remaining provisions hereof
        shall not be in any way impaired or affected thereby, it being intended
        that all of the rights and privileges of the parties hereto shall be
        enforceable to the fullest extent permitted by law.

                (i)     Survival. The respective indemnities, agreements,
        representations, warranties and other provisions set forth in this
        Agreement or made pursuant hereto shall remain in full force and effect,
        regardless of any investigation (or any statement as to the results
        thereof) made by or on behalf of any Electing Holder, any director,
        officer or partner of such holder, any agent or underwriter, any
        director, officer or partner of such agent or underwriter, or any
        controlling person of any of the foregoing, and shall survive the
        transfer and registration of the Registrable Securities of such holder.

                                       17
<PAGE>   18

                Please confirm that the foregoing correctly sets forth the
agreement between the Company and you.

                             Very truly yours,

                             XO Communications, Inc.

                             By:/s/ Gary D. Begeman
                                ---------------------------------
                                Name:  Gary D. Begeman
                                Title: Sr. Vice President and General Counsel

The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.

Salomon Smith Barney Inc.
Goldman Sachs & Co.

By: /s/ A. Scott Daniel
   ---------------------------------
    Salomon Smith Barney Inc.
    On behalf of each of the Initial Purchasers

                                       18
<PAGE>   19

847709.2

                                                                       Exhibit A

                             XO Communications, Inc.

                         INSTRUCTION TO DTC PARTICIPANTS

                                (Date of Mailing)

                     URGENT - IMMEDIATE ATTENTION REQUESTED

                          DEADLINE FOR RESPONSE: [DATE]

               The Depository Trust Company ("DTC") has identified you as a DTC
Participant through which beneficial interests in the XO Communications, Inc.
(the "Company") 5 3/4% Convertible Subordinated Notes due 2009 (the "Convertible
Notes") and the shares of Class A Common Stock, par value $.02 per share (the
"Class A Common Stock"), issuable upon conversion thereof (together, the
"Securities") are held.

               The Company is in the process of registering the Securities under
the Securities Act of 1933 for resale by the beneficial owners thereof. In order
to have their Securities included in the registration statement, beneficial
owners must complete and return the enclosed Notice of Registration Statement
and Selling Security holder Questionnaire.

               It is important that beneficial owners of the Securities receive
a copy of the enclosed materials as soon as possible as their rights to have the
Securities included in the registration statement depend upon their returning
the Notice and Questionnaire by [DEADLINE FOR RESPONSE]. Please forward a copy
of the enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions pertaining to this matter, please contact Salomon Smith
Barney Inc. General Counsel, 388 Greenwich Street, New York, NY 10013, telephone
no. _______________.

<PAGE>   20

                             XO Communications, Inc.

                        Notice of Registration Statement

                                       and

                      Selling Security holder Questionnaire

                                     (Date)

               Reference is hereby made to the Registration Rights Agreement
(the "Registration Rights Agreement") between XO Communications, Inc. (the
"Company") and the Initial Purchasers named therein. Pursuant to the
Registration Rights Agreement, the Company has filed with the United States
Securities and Exchange Commission (the "Commission") a registration statement
on Form S-3 (the "Shelf Registration Statement") for the registration and resale
under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"),
of the Company's 5 3/4% Convertible Subordinated Notes due 2009 (the
"Convertible Notes") and the shares of Class A Common Stock, par value $.02 per
share (the "Class A Common Stock"), issuable upon conversion thereof (together,
the "Securities"). A copy of the Registration Rights Agreement is attached
hereto. All capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Registration Rights Agreement.

               Each beneficial owner of Registrable Securities (as defined
below) is entitled to have the Registrable Securities beneficially owned by it
included in the Shelf Registration Statement. In order to have Registrable
Securities included in the Shelf Registration Statement, this Notice of
Registration Statement and Selling Security holder Questionnaire ("Notice and
Questionnaire") must be completed, executed and delivered to the Company's
counsel at the address set forth herein for receipt ON OR BEFORE [DEADLINE FOR
RESPONSE]. Beneficial owners of Registrable Securities who do not complete,
execute and return this Notice and Questionnaire by such date (i) will not be
named as selling securityholders in the Shelf Registration Statement and (ii)
may not use the Prospectus forming a part thereof for resales of Registrable
Securities.

               Certain legal consequences arise from being named as a selling
security holder in the Shelf Registration Statement and related Prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling security holder in the Shelf Registration
Statement and related Prospectus.

               The term "Registrable Securities" is defined in the Registration
Rights Agreement to mean all or any portion of the Convertible Subordinated
Notes and the shares of Class A Common Stock issuable upon conversion of such
Convertible Subordinated Notes and any common stock or securities of the Company
issued in exchange for or in respect of such common stock or securities, whether
as the result of any stock split or reclassification of, or stock dividend on,
such Common Stock or otherwise; provided, however, that a security ceases to be
a Registrable Security when it is no longer a Restricted Security.

                                      A-2
<PAGE>   21

               The term "Restricted Security" is defined in the Registration
Rights Agreement to mean any Convertible Subordinated Note or share of Class A
Common Stock issuable upon conversion thereof except any such Convertible
Subordinated Note or share of Class A Common Stock which (i) has been
effectively registered under the Securities Act and sold in a manner
contemplated by the Shelf Registration Statement, or (ii) has been transferred
in compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or is transferable pursuant to paragraph (k) of such Rule 144 (or any
successor provision thereto), or (iii) has been sold in compliance with
Regulation S under the Securities Act (or any successor thereto).

                                    ELECTION

               The undersigned holder (the "Selling Security holder") of
Registrable Securities hereby elects to include in the Shelf Registration
Statement the Registrable Securities beneficially owned by it and listed below
in Item (3). The undersigned, by signing and returning this Notice and
Questionnaire, agrees to be bound with respect to such Registrable Securities by
the terms and conditions of this Notice and Questionnaire and the Registration
Rights Agreement, including, without limitation, Section 5 of the Registration
Rights Agreement, as if the undersigned Selling Security holder were an original
party thereto.

               The Selling Security holder hereby provides the following
information to the Company and represents and warrants that such information is
accurate and complete:

                                      A-3
<PAGE>   22

                                  QUESTIONNAIRE

(1)     (a)  Full Legal Name of Selling Security holder:

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

        (b)     Full Legal Name of Registered Holder (if not the same as in (a)
                above) of Registrable Securities Listed in (3) below:

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

        (c)     Full Legal Name of DTC Participant (if applicable and if not the
                same as (b) above) Through Which Registrable Securities Listed
                in (3) below are Held:

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

(2)     Address for Notices to Selling Security holder:

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

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

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

        Telephone:
                  --------------------------------------------------------------

        Fax:
            --------------------------------------------------------------------

        Contact Person:
                       ---------------------------------------------------------

(3)     Beneficial Ownership of Securities and shares of Class A Common Stock
        issued upon conversion of Securities:

               Except as set forth below in this Item (3), the undersigned does
not beneficially own any Securities or shares of Common Stock issued upon
conversion of any Securities.

        (a)     Principal amount of Registrable Securities (as defined in the
                Registration Rights Agreement) beneficially owned:
                                                                  --------------

                CUSIP No(s). of such Registrable Securities:
                                                            --------------------

                Number of shares of Class A Common Stock (if any) issued upon
                conversion of such Registrable Securities:
                                                          ----------------------

        (b)     Principal amount of Securities other than Registrable Securities
                beneficially owned:
                                   --------------------------------------------

                CUSIP No(s). of such other Securities:
                                                       ------------------------

                                      A-4
<PAGE>   23

               Number of shares of Class A Common Stock (if any) issued upon
               conversion of such other Securities:

        (c)    Principal amount of Registrable Securities which the undersigned
               wishes to be included in the Shelf Registration Statement:

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

               CUSIP No(s). of such Registrable Securities to be included in
               the Shelf Registration Statement:
                                                ------------------------------

               Number of shares of Class A Common Stock (if any) issued upon
               conversion of Registrable Securities which are to be included in
               the Shelf Registration Statement:
                                                -------------------------------

(4)     Beneficial Ownership of Other Securities of the Company:

               Except as set forth below in this Item (4), the undersigned
Selling Security holder is not the beneficial or registered owner of any shares
of Class A Common Stock or any other securities of the Company, other than the
Securities and shares of Class A Common Stock listed above in Item (3).

               State any exceptions here:

(5)     Relationships with the Company:

               Except as set forth below, neither the Selling Security holder
nor any of its affiliates, officers, directors or principal equity holders (5%
or more) has held any position or office or has had any other material
relationship with the Company (or its predecessors or affiliates) during the
past three years.

               State any exceptions here:

(6)     Plan of Distribution:

               Except as set forth below, the undersigned Selling Security
holder intends to distribute the Registrable Securities listed above in Item (3)
only as follows (if at all): Such Registrable Securities may be sold from time
to time directly by the undersigned Selling Security holder or, alternatively,
through underwriters, broker-dealers or agents. Such Registrable Securities may
be sold in one or more transactions at fixed prices, at prevailing market prices
at the time of sale, at varying prices determined at the time of sale, or at
negotiated prices. Such sales may be effected in transactions (which may involve
crosses or block transactions) (i) on any national securities exchange or
quotation service on which the Registered Securities may be listed or quoted at
the time of sale, (ii) in the over-the-counter market, (iii) in transactions
otherwise than on such exchanges or services or in the over-the-counter market,
or (iv) through the writing of options. In connection with sales of the

                                      A-5
<PAGE>   24

               Registrable Securities or otherwise, the Selling Security holder
may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the Registrable Securities in the course of hedging the
positions they assume. The Selling Security holder may also sell Registrable
Securities short and deliver Registrable Securities to close out such short
positions, or loan or pledge Registrable Securities to broker-dealers that in
turn may sell such securities.

               State any exceptions here:

               Note:  In no event may such method(s) of distribution take the
form of an underwritten offering of the Registrable Securities without the prior
agreement of the Company.

               By signing below, the Selling Security holder acknowledges that
it understands its obligation to comply, and agrees that it will comply, with
the provisions of the Exchange Act and the rules and regulations thereunder,
particularly Regulation M.

               In the event that the Selling Security holder transfers all or
any portion of the Registrable Securities listed in Item (3) above after the
date on which such information is provided to the Company, the Selling Security
holder agrees to notify the transferee(s) at the time of the transfer of its
rights and obligations under this Notice and Questionnaire and the Registration
Rights Agreement.

               By signing below, the Selling Security holder consents to the
disclosure of the information contained herein in its answers to Items (1)
through (6) above and the inclusion of such information in the Shelf
Registration Statement and related Prospectus. The Selling Security holder
understands that such information will be relied upon by the Company in
connection with the preparation of the Shelf Registration Statement and related
Prospectus.

               In accordance with the Selling Security holder's obligation under
Section 3(a) of the Registration Rights Agreement to provide such information as
may be required by law for inclusion in the Shelf Registration Statement, the
Selling Security holder agrees to promptly notify the Company of any
inaccuracies or changes in the information provided herein which may occur
subsequent to the date hereof at any time while the Shelf Registration Statement
remains in effect. All notices hereunder and pursuant to the Registration Rights
Agreement shall be made in writing, by hand-delivery, first-class mail, or air
courier guaranteeing overnight delivery as follows:

               (i)    To the Company:

                      XO Communications, Inc.
                      1505 Farm Credit Drive
                      McLean, VA  22102

                                      A-6
<PAGE>   25

                (ii)  With a copy to:

                      Willkie Farr & Gallagher
                      787 Seventh Avenue
                      New York, NY  10019-6099
                      Attention:  Bruce R. Kraus

               Once this Notice and Questionnaire is executed by the Selling
Security holder and received by the Company's counsel, the terms of this Notice
and Questionnaire, and the representations and warranties contained herein,
shall be binding on, shall inure to the benefit of and shall be enforceable by
the respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Security holder (with respect to the Registrable
Securities beneficially owned by such Selling Security holder and listed in Item
(3) above. This Agreement shall be governed in all respects by the laws of the
State of New York.

                                      A-7
<PAGE>   26

               IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.

Dated:  ________________

                             --------------------------------------------
                             Selling Security holder
                             (Print/type full legal name of beneficial
                             owner of Registrable Securities)

                             By:
                                ----------------------------------------
                             Name:
                             Title:

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT:

               Willkie Farr & Gallagher
               787 Seventh Avenue
               New York, NY  10019-6099
               Attention:  Bruce R. Kraus

                                      A-8<PAGE>   1

                                                                   EXHIBIT 10.71

                                            * Text omitted and filed separately,
                                                Confidential Treatment Requested
                                                 under 17 C.F.R. ss 200.80(b)(4)
                                                              200.83 and 240 b-2

                       COLLABORATION AND LICENSE AGREEMENT

                                 BY AND BETWEEN

                           ISIS PHARMACEUTICALS, INC.

                                       AND

                                 HYBRIDON, INC.

<PAGE>   2

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                      PAGE
                                                                                                      ----
<S>              <C>                                                                                  <C>

ARTICLE I DEFINITIONS...................................................................................1

   SECTION 1.1   "AFFILIATE"............................................................................1

   SECTION 1.2   "AMINO PATENT RIGHTS"..................................................................2

   SECTION 1.3   "ANTISENSE PRODUCTS"...................................................................2

   SECTION 1.4   "ANTISENSE TECHNOLOGY".................................................................2

   SECTION 1.5   "CONFIDENTIAL INFORMATION".............................................................2

   SECTION 1.6   "DOCKET 104"...........................................................................2

   SECTION 1.7   "DOCKET 105"...........................................................................3

   SECTION 1.8   "DRUG POTENTIATION PATENT RIGHTS"......................................................3

   SECTION 1.9   "EXHIBIT K PATENTS"....................................................................3

   SECTION 1.10  "FACILITATOR PATENT RIGHTS"............................................................3

   SECTION 1.11  "FINDERON PATENT RIGHTS"...............................................................3

   SECTION 1.12  "HYBRIDON ANTISENSE DRUG"..............................................................3

   SECTION 1.13  "HYBRIDON ANTISENSE PATENT RIGHTS".....................................................4

   SECTION 1.14  "HYBRIDON EXCLUDED PATENT RIGHTS"......................................................5

   SECTION 1.15  "HYBRIDON INTELLECTUAL PROPERTY".......................................................5

   SECTION 1.16  "IMMUNE STIMULATION PATENT RIGHTS".....................................................5

   SECTION 1.17  "ISIS INTELLECTUAL PROPERTY RIGHTS"....................................................5

   SECTION 1.18  [*]....................................................................................6

   SECTION 1.19  "MOTIFS"...............................................................................6

   SECTION 1.20  "NAKED SUBLICENSE".....................................................................6

   SECTION 1.21  "NON-PARENT AFFILIATE".................................................................6

   SECTION 1.22  "OPTIMIZATION".........................................................................6

   SECTION 1.23  "PARTY"................................................................................6

   SECTION 1.24  "RIBOZYMES"............................................................................6

   SECTION 1.25  "RIBOZYME TECHNOLOGY"..................................................................6

   SECTION 1.26  "RNASEH DEPENDENT MECHANISMS OF ACTION"................................................7

   SECTION 1.27  "SUBLICENSE INCOME"....................................................................7

</TABLE>
* Confidential Treatment Requested

                                       -i-

<PAGE>   3

<TABLE>
<S>              <C>                                                                                  <C>
   SECTION 1.28  "SUBLICENSEE"..........................................................................7

   SECTION 1.29  "SUBSIDIARY"...........................................................................7

   SECTION 1.30  "THIRD PARTY LICENSE AGREEMENTS".......................................................8

   SECTION 1.31  "TULLIS NET SALES".....................................................................8

   SECTION 1.32  "TULLIS PATENTS".......................................................................8

   SECTION 1.33  "TULLIS PRODUCT".......................................................................8

   SECTION 1.34  "UMASS PATENT RIGHTS"..................................................................8

   SECTION 1.35  "VALID CLAIM"..........................................................................8

ARTICLE II GRANT OF RIGHTS BY HYBRIDON..................................................................9

   SECTION 2.1   LICENSE GRANT..........................................................................9

   SECTION 2.2   SUBLICENSING RIGHT....................................................................11

   SECTION 2.3   NO IMPLIED LICENSES; RETAINED RIGHTS..................................................13

   SECTION 2.4   COMMERCIALIZATION EFFORTS.............................................................13

   SECTION 2.5   LICENSE AGREEMENTS TO WHICH HYBRIDON IS A PARTY.......................................13

   SECTION 2.6   METHYLGENE LICENSE AGREEMENT..........................................................14

   SECTION 2.7   ORIGENIX LICENSE AGREEMENT............................................................14

   SECTION 2.8   AFFILIATES............................................................................14

ARTICLE III GRANT OF RIGHTS BY ISIS....................................................................14

   SECTION 3.1   LICENSE GRANT.........................................................................14

   SECTION 3.2   SUBLICENSING RIGHT....................................................................14

   SECTION 3.2   AGREEMENT.............................................................................15

   SECTION 3.3   TULLIS PATENTS........................................................................15

   SECTION 3.4   SCOPE OF LICENSE......................................................................16

   SECTION 3.5   NO IMPLIED LICENSES...................................................................17

   SECTION 3.6   LIMITATION ON LICENSE GRANT WITH RESPECT TO TARGET VALIDATION AND GENE
   FUNCTIONALIZATION ACTIVITIES........................................................................17

   SECTION 3.7   NOTICE OF HYBRIDON ANTISENSE DRUGS....................................................17

   SECTION 3.8   AFFILIATES............................................................................17

ARTICLE IV PAYMENT OBLIGATIONS.........................................................................18

   SECTION 4.1    CONSIDERATION FOR LICENSES OF HYBRIDON INTELLECTUAL PROPERTY AND ISIS
   INTELLECTUAL PROPERTY...............................................................................18
</TABLE>

                                      -ii-

<PAGE>   4

<TABLE>
<S>              <C>                                                                                  <C>
   SECTION 4.2   CONSIDERATION FOR SUBLICENSE OF TULLIS PATENTS........................................18

   SECTION 4.3   ISIS SUBLICENSE INCOME................................................................18

   SECTION 4.3   NAKED SUBLICENSE ***..................................................................19

   SECTION 4.4   RECORDS; AUDITS.......................................................................19

   SECTION 4.5   PAYMENT CURRENCY......................................................................19

   SECTION 4.6   LATE PAYMENTS; COLLECTIONS............................................................19

ARTICLE V COLLABORATION................................................................................19

ARTICLE VI INTELLECTUAL PROPERTY PROTECTION............................................................20

   SECTION 6.1   PATENT PROSECUTION AND COOPERATION....................................................20

   SECTION 6.2   ENFORCEMENT OF HYBRIDON ANTISENSE PATENT RIGHTS.......................................25

ARTICLE VII CONFIDENTIALITY............................................................................27

   SECTION 7.1   CONFIDENTIAL INFORMATION..............................................................27

   SECTION 7.1   RECEIVING PARTY UNDER THIS SECTION 7.1................................................28

ARTICLE VIII DISPUTE RESOLUTION........................................................................28

ARTICLE IX TERM AND TERMINATION........................................................................29

   SECTION 9.1   TERM..................................................................................29

   SECTION 9.2   TERMINATION OF LICENSES AND SUBLICENSES FOR BREACH....................................30

   SECTION 9.3   TERMINATION OF SUBLICENSE OF TULLIS PATENTS...........................................31

   SECTION 9.4   SURVIVAL..............................................................................31

   SECTION 9.5   SUBLICENSE SURVIVAL...................................................................32

   SECTION 9.6   FAILURE TO MAKE MASTER AGREEMENT DELIVERIES...........................................32

ARTICLE X MISCELLANEOUS PROVISIONS.....................................................................32

   SECTION 10.1   INDEMNIFICATION......................................................................32

   SECTION 10.2   GOVERNING LAW........................................................................33

   SECTION 10.3   ASSIGNMENT...........................................................................33

   SECTION 10.4   ENTIRE AGREEMENT; AMENDMENTS.........................................................33

   SECTION 10.5   NOTICES..............................................................................34

   SECTION 10.6   FORCE MAJEURE........................................................................34

   SECTION 10.7   DISCLOSURE OF PROVISIONS OF AGREEMENT.................................................35
</TABLE>

                                      -iii-

<PAGE>   5
<TABLE>
<S>               <C>                                                                                   <C>
   SECTION 10.8   INDEPENDENT CONTRACTORS...............................................................36

   SECTION 10.9   NO STRICT CONSTRUCTION................................................................36

   SECTION 10.10  HEADINGS..............................................................................36

   SECTION 10.11  NO IMPLIED WAIVERS; RIGHTS CUMULATIVE.................................................36

   SECTION 10.12  SEVERABILITY..........................................................................36

   SECTION 10.13  EXECUTION IN COUNTERPARTS.............................................................36

   SECTION 10.14  NO CONSEQUENTIAL DAMAGES..............................................................37

   SECTION 10.15  PATENT VALIDITY.......................................................................37
</TABLE>

Exhibit A
  through
  Exhibit G -  Omitted
Exhibit H-1 -  Third Party License Agreements
Exhibit H-2 -  Other License Agreements
Exhibit I   -  Tullis Patents
Exhibit J   -  UMass Agreement
Exhibit K   -  Excluded Hybridon Intellectual Property
Exhibit L   -  UMass Patent Rights
Exhibit M   -  Drug Potentiation Patent Rights
Exhibit N*  -  Tullis Agreement

* Confidential Treatment Requested

                                      -iv-

<PAGE>   6

                       COLLABORATION AND LICENSE AGREEMENT

         This Collaboration and License Agreement (the "Agreement") is entered
into as of the 24th day of May, 2001 (the "Effective Date") by and between Isis
Pharmaceuticals, Inc., a corporation organized and existing under the laws of
the State of Delaware ("Isis"), and Hybridon, Inc., a corporation organized and
existing under the laws of the State of Delaware ("Hybridon").

                                  INTRODUCTION

     1.  Hybridon is the owner or has the right to use under license certain
patents and patent applications relating to the practice of Antisense Technology
(as defined below).

     2.  Isis is the owner or has the right to use under license certain patents
and patent applications relating to the practice of Antisense Technology.

     3.  Hybridon and Isis are interested in licensing or sublicensing to the
other party these patents and patent applications and in collaborating from time
to time on the further research and development of Antisense Products.

     4.  Hybridon and Isis have entered into a Master Agreement dated as of the
date hereof (the "Master Agreement").

     5.  Isis and Hybridon each recognizes that the other Party has expended
significant efforts and resources in the research and development of Antisense
Technology and the payments to be made under the Master Agreement to each Party
for the patent licenses and sublicenses granted hereunder will allow each Party
to recoup such expenditures.

     NOW, THEREFORE, Hybridon and Isis agree as follows:

                                    ARTICLE I

                                   DEFINITIONS
                                   -----------

When used in this Agreement, each of the following terms shall have the meanings
set forth in this Article I:

     Section 1.1 "AFFILIATE". Affiliate shall mean, with respect to a person or
entity, any corporation, company, partnership, joint venture or other entity
which controls, is controlled by, or is under common control with such person or
entity. For purposes of this Section 1.1 and Section 1.21, "control" shall mean
(a) in the case of corporate entities, direct or indirect ownership of fifty
percent (50%) or more of the stock or shares having the right to vote for the
election of directors, and (b) in the case of non-corporate entities, direct or
indirect ownership of fifty percent (50%) or more of the equity interest with
the power to direct the management and policies

<PAGE>   7

of such non-corporate entities, provided that in either such case such person or
entity has the power to direct the management and policies of such entities,
whether by contract or through representation on the board of directors or other
governing body of such entities.

     Section 1.2 "AMINO PATENT RIGHTS". Amino Patent Rights shall mean the
claims of all patents and patent applications set forth on EXHIBIT A hereto and
any continuations or divisions thereof, any patent issued with respect to any
such patent applications, any reissue, reexamination, renewal or extension
(including any supplemental patent certificate) of any such patent, any
confirmation patent or registration patent or patent of addition based on any
such patent, and all foreign counterparts of any of the foregoing.

     Section 1.3 "ANTISENSE PRODUCTS". Antisense Products shall mean
oligonucleotides or oligonucleotide analogs or mimics thereof targeted to a
specific sequence of RNA that hybridize to such sequence and through such
hybridization modulate the production of the targeted gene product. The term
Antisense Products shall not include Ribozymes.

     Section 1.4 "ANTISENSE TECHNOLOGY". Antisense Technology shall mean the use
of any oligonucleotide or oligonucleotide analog or mimic thereof targeted to a
specific sequence of RNA that hybridizes to such sequence and through such
hybridization modulates the production of the targeted gene product. The term
Antisense Technology shall not include Ribozyme Technology.

     Section 1.5 "CONFIDENTIAL INFORMATION". Confidential Information shall mean
all information, including, without limitation, proprietary information and
materials (whether or not patentable) regarding a Party's technology, products,
business information or objectives, which is designated as confidential in
writing by the disclosing Party, whether by letter or by the use of an
appropriate stamp or legend, prior to or at the time any such information is
disclosed by the disclosing Party to the other Party. Notwithstanding the
foregoing, all information which is orally, electronically or visually disclosed
by a Party, or is disclosed in writing without an appropriate letter, stamp or
legend, shall constitute Confidential Information of a Party if the disclosing
Party, within thirty (30) days after such disclosure, delivers to the other
Party a written document or documents describing the information and referencing
the place and date of such oral, visual, electronic or written disclosure and
the names of the persons to whom such disclosure was made.

     Section 1.6 "DOCKET 104". Docket 104 shall mean all patents and patent
applications set forth on EXHIBIT B-1 hereto and any continuations or divisions
thereof, any patent issued with respect to any such patent applications, any
reissue, reexamination, renewal or extension (including any supplemental patent
certificate) of any such patent, any confirmation patent or registration patent
or patent of

                                      -2-

<PAGE>   8

addition based on any such patent, and all foreign counterparts of any of the
foregoing.

     Section 1.7 "DOCKET 105". Docket 105 shall mean all patents and patent
applications set forth on EXHIBIT B-2 hereto and any continuations or divisions
thereof, any patent issued with respect to any such patent applications, any
reissue, reexamination, renewal or extension (including any supplemental patent
certificate) of any such patent, any confirmation patent or registration patent
or patent of addition based on any such patent, and all foreign counterparts of
any of the foregoing.

     Section 1.8 "DRUG POTENTIATION PATENT RIGHTS". Drug Potentiation Patent
Rights shall mean the claims of all patents and patent applications set forth on
EXHIBIT M hereto and any continuations or divisions thereof, any patent issued
with respect to any such patent applications, any reissue, reexamination,
renewal or extension (including any supplemental patent certificate) of any such
patent, any confirmation patent or registration patent or patent of addition
based on any such patent, and all foreign counterparts of any of the foregoing.

     Section 1.9 "EXHIBIT K PATENTS". Exhibit K Patents shall mean the claims of
all patents and patent applications set forth on EXHIBIT K hereto and any
continuations or divisions thereof, any patent issued with respect to any such
patent applications, any reissue, reexamination, renewal or extension (including
any supplemental patent certificate) of any such patent, any confirmation patent
or registration patent or patent of addition based on any such patent, and all
foreign counterparts of any of the foregoing.

     Section 1.10 "FACILITATOR PATENT RIGHTS". Facilitator Patent Rights shall
mean the claims of all patents and patent applications set forth on EXHIBIT C
hereto and any continuations or divisions thereof, any patent issued with
respect to any such patent applications, any reissue, reexamination, renewal or
extension (including any supplemental patent certificate) of any such patent,
any confirmation patent or registration patent or patent of addition based on
any such patent, and all foreign counterparts of any of the foregoing.

     Section 1.11 "FINDERON PATENT RIGHTS". Finderon Patent Rights shall mean
the claims of all patents and patent applications set forth on EXHIBIT D hereto
and any continuations or divisions thereof, any patent issued with respect to
any such patent applications, any reissue, reexamination, renewal or extension
(including any supplemental patent certificate) of any such patent, any
confirmation patent or registration patent or patent of addition based on any
such patent, and all foreign counterparts of any of the foregoing.

     Section 1.12 "HYBRIDON ANTISENSE DRUG". Hybridon Antisense Drug shall mean
an Antisense Product which is a therapeutic or prophylactic product for the

                                      -3-

<PAGE>   9

treatment or prevention of disease in a human or an animal that is discovered,
developed and/or Optimized either by Hybridon or a Subsidiary alone or as part
of a "bona fide drug discovery collaboration".

     For purposes of this Section 1.12 only, a "bona fide drug discovery
collaboration" is an arrangement between Hybridon or a Subsidiary and a third
party (i) in which the intent of the collaborators in engaging in discovery,
development and/or Optimization activities is to discover, develop, Optimize and
commercialize an Antisense Product. [*] Initiation of IND supporting toxicology
is the initiation of animal toxicity studies in support of the filing of an
Investigational New Drug application with the U.S. Food and Drug Administration
or a similar regulatory filing with a similar regulatory authority in another
jurisdiction. If a contractor (which is not the third party collaborator) in the
business of performing preclinical studies provides such services through the
performance of IN VIVO animal studies under the supervision of Hybridon or a
Subsidiary, the services so provided shall be treated as work performed directly
by Hybridon or a Subsidiary for purposes of this definition. Work performed by a
contractor of, and paid for by, Hybridon or a Subsidiary under the supervision
of Hybridon or a Subsidiary shall be treated as work performed directly by
Hybridon or a Subsidiary for purposes of this definition. The Parties
acknowledge that a part of the discovery, development and Optimization of an
Hybridon Antisense Drug may involve the validation and prioritization of gene
targets to form the basis for antisense drug discovery activities.

     In the event of a sale or other transfer of the assets of Hybridon, no
Antisense Product developed by the acquiring company prior to the acquisition
will be deemed to be a Hybridon Antisense Drug unless (i) such acquiring company
acquires all or substantially all of the assets of the antisense business of
Hybridon, and (ii) such Antisense Product [*] by the acquiring company prior to
the acquisition; provided, however, that an Antisense Product that would qualify
as a Hybridon Antisense Drug irrespective of the acquisition will not lose its
status as such as a result of such acquisition.

     Section 1.13 "HYBRIDON ANTISENSE PATENT RIGHTS". Hybridon Antisense Patent
Rights shall mean the claims of all patents and patent applications and any
continuations or divisions thereof, whether now existing, now filed or later
filed on inventions invented, licensed or sublicensed by Hybridon prior to April
26, 2001, any patent issued with respect to any such patent applications, any
reissue, reexamination, renewal or extension (including any supplemental patent
certificate) of any such patent, any confirmation patent or registration patent
or patent of addition based on any such patent, and all foreign counterparts of
any of the foregoing, which Hybridon owned or had the right to sublicense as of
April 26, 2001 and which are necessary or useful to practice Antisense
Technology, including without limitation the patents and patent applications set
forth on EXHIBIT E, but not including the Hybridon Excluded Patent Rights and
the patents and patent

* Confidential Treatment Requested

                                      -4-

<PAGE>   10

applications licensed to Hybridon (the "Hybridon IDT Patent Rights") pursuant to
the Non-Exclusive License Agreement dated as of March 12, 1999 between
Integrated DNA Technologies, Inc. ("IDT") and Hybridon.

     Section 1.14 "HYBRIDON EXCLUDED PATENT RIGHTS". Hybridon Excluded Patent
Rights shall mean the Amino Patent Rights, Docket 104, Docket 105, Facilitator
Patent Rights, Finderon Patent Rights, Immune Stimulation Patent Rights, Drug
Potentiation Patent Rights and the Exhibit K Patents.

     Section 1.15 "HYBRIDON INTELLECTUAL PROPERTY". Hybridon Intellectual
Property shall mean collectively the Hybridon Antisense Patent Rights and the
Hybridon Excluded Patent Rights (all solely to the extent licensed to Isis under
Section 2.1), but shall exclude the Hybridon IDT Patent Rights.

     Section 1.16 "IMMUNE STIMULATION PATENT RIGHTS". Immune Stimulation Patent
Rights shall mean the claims of all patents and patent applications set forth on
EXHIBIT F hereto and any continuations or divisions thereof, any patent issued
with respect to any such patent applications, any reissue, reexamination,
renewal or extension (including any supplemental patent certificate) of any such
patent, any confirmation patent or registration patent or patent of addition
based on any such patent, and all foreign counterparts of any of the foregoing.

     Section 1.17 "ISIS INTELLECTUAL PROPERTY RIGHTS". Isis Intellectual
Property Rights shall mean the claims that cover Motifs or RNaseH Dependent
Mechanisms of Action of all patents and patent applications and any
continuations or divisions thereof, whether now existing, now filed or later
filed on inventions invented, licensed or sublicensed by Isis prior to April 26,
2001, any patent issued with respect to any such patent applications, any
reissue, reexamination, renewal or extension (including any supplemental patent
certificate) of any such patent, any confirmation patent or registration patent
or patent of addition based on any such patent, and all foreign counterparts of
any of the foregoing, which Isis owned or had the right to sublicense as of
April 26, 2001, including without limitation the patents and patent applications
set forth on EXHIBIT G hereto; provided, however, that Isis Intellectual
Property Rights shall not include manufacturing methods, including without
limitation reagents, synthons and processes used in manufacturing and analyzing
oligonucleotides; chemistries, including without limitation modifications made
to the backbone, sugar or base of an oligonucleotide and oligonucleotide
conjugates (including the chemistries of the conjugate and the conjugation
methods); formulations, including without limitation methods and reagents for
delivery and uptake of oligonucleotides; gene-related patents, including without
limitation patents to specific gene structures, gene targets and treatments
based upon a genetic target; and patents and patent applications licensed to
Isis pursuant to the Non-Exclusive License Agreement dated March 19, 1999
between IDT and Isis.

                                      -5-
<PAGE>   11

     Section 1.18 [*]

     Section 1.19 "MOTIFS". Motifs shall mean hybrid oligonucleotide structures
that have at least two regions within the oligonucleotide that have different
chemistries, one of which will support cleavage via RNaseH Dependent Mechanisms
of Action. Motifs do not include specific chemistries necessary or useful to
create or Optimize such structures, whether or not such chemistries are also
disclosed by or claimed in the same patent or patent application.

     Section 1.20 "NAKED SUBLICENSE". Naked Sublicense shall mean any license or
sublicense of intellectual property granted by a Party or a Subsidiary to a
third party other than a license or sublicense which is granted as part of a
bona fide research, development, manufacturing or commercialization
collaboration between the Party or a Subsidiary and the third party (it being
agreed by the Parties that the definition of the term "collaboration" in this
Section 1.20 shall not be interpreted by reference to the definition of
collaboration used in Section 1.12). For purposes of this definition, a bona
fide research, development, manufacturing or commercialization collaboration may
include collaborative research and discovery, including without limitation gene
functionalization and target validation.

     Section 1.21 "NON-PARENT AFFILIATE". Non-Parent Affiliate shall mean, with
respect to a person or entity, any Affiliate of such person or entity other than
any corporation, company, partnership, joint venture or other entity which
controls (as defined in Section 1.1) such person or entity.

     Section 1.22 "OPTIMIZATION". Optimization shall mean the process by which
the properties of an Antisense Product are improved by making chemical
modifications to such Antisense Product or by selecting a different sequence of
RNA for such Antisense Product.

     Section 1.23 "PARTY". Party shall mean Isis or Hybridon; "Parties" shall
mean Isis and Hybridon. As used in this Agreement, references to "third parties"
do not include a Party or its Subsidiaries.

     Section 1.24 "RIBOZYMES". Ribozymes shall mean oligonucleotides or
oligonucleotide analogs or mimics containing a catalytic core having a bulge or
stem loop and regions flanking the catalytic core that hybridize to a targeted
RNA and modulate the targeted RNA by cleavage at a site next to a specific
ribonucleotide triplet by an oligonucleotide catalyzed transesterification
reaction.

     Section 1.25 "RIBOZYME TECHNOLOGY". Ribozyme Technology shall mean the use
of any oligonucleotides or oligonucleotide analogs or mimics thereof containing
a catalytic core having a bulge or stem loop and regions flanking the catalytic
core that hybridize to a targeted RNA and modulate the targeted RNA by cleavage
at a site next to a specific ribonucleotide triplet by an oligonucleotide
catalyzed transesterification reaction.

* Confidential Treatment Requested

                                      -6-

<PAGE>   12

     Section 1.26 "RNASEH DEPENDENT MECHANISMS OF ACTION". RNaseH Dependent
Mechanisms of Action shall mean methods of using RNaseH enzymes to cleave a
targeted RNA in vitro or in vivo. RNaseH Dependent Mechanisms of Action do not
include chemistries necessary or useful to facilitate or Optimize such cleavage,
whether or not such chemistries are also disclosed by or claimed in the same
patent or patent application.

     Section 1.27 "SUBLICENSE INCOME". Sublicense Income shall mean all
consideration received from Sublicensees by Isis or a Subsidiary pursuant to a
Naked Sublicense by Isis or a Subsidiary which covers, in whole or in part,
Hybridon Intellectual Property and all consideration received from Sublicensees
by Isis or an Affiliate pursuant to a Naked Sublicense not involving Hybridon
Intellectual Property if such Naked Sublicense arose out of the same transaction
as, or was otherwise related to, a Naked Sublicense which covers, in whole or in
part, Hybridon Intellectual Property. Sublicense Income does not include (i)
payments made by a Sublicensee in consideration for the issuance of equity or
debt securities of Isis to the extent such payments do not exceed the fair
market value of the securities being issued. [*] If non-monetary consideration
is received from Sublicensees by Isis or its Subsidiaries, then a commercially
reasonable monetary value will be assigned for purposes of calculating
Sublicense Income.

     Section 1.28 "SUBLICENSEE". Sublicensee shall mean any third party granted
the right hereunder by a Party, its Subsidiaries or a Sublicensee having the
right to grant further sublicenses, to discover, develop, make, have made, use,
sell, have sold, offer to sell, import or have imported products covered by the
Hybridon Intellectual Property (in the case of a Sublicensee of Isis, its
Subsidiaries or a Sublicensee having the right to grant further sublicenses) or
Isis Intellectual Property or Tullis Patents (in the case of a Sublicensee of
Hybridon, its Subsidiaries or a Sublicensee having the right to grant further
sublicenses).

     Section 1.29 "SUBSIDIARY". Subsidiary shall mean with respect to a Party,
any corporation, company, partnership, joint venture or other entity, 100% of
the equity securities of which are directly or indirectly owned by such Party;
provided, however, that if such Party does not directly or indirectly own 100%
of the equity securities of the entity, such entity shall nevertheless be deemed
a Subsidiary for purposes of this definition if the equity securities not owned
directly or indirectly by such Party consist solely of: (a) director qualifying
shares, (b) equity securities of the entity owned by employees, directors or
officers of the Party or the entity so long as such ownership by employees,
directors and officers does not exceed 10% of the equity securities of the
entity and/or (c) in the case of entities, the operations of which are
substantially conducted outside the United States, equity securities of the
entity owned by financial investors so long as such ownership by financial
investors does not exceed 20% of the equity securities of the entity. For
purposes of this Section 1.29, indirect ownership shall mean ownership through
an entity or a chain

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<PAGE>   13

of entities as to each member of which the Party or another entity in the chain
owns 100% of the equity securities (other than director qualifying shares).

     Section 1.30 "THIRD PARTY LICENSE AGREEMENTS". Third Party License
Agreements shall mean those agreements set forth on EXHIBIT H-1 attached hereto
pursuant to which Hybridon has licensed Hybridon Intellectual Property to third
parties.

     Section 1.31 "TULLIS NET SALES". Tullis Net Sales shall mean the gross
sales revenues received by Hybridon, its Subsidiaries or Sublicensees from the
sale of Tullis Products, minus (a) all sales, use, and excise taxes, and customs
duties or other charges; (b) transportation and handling charges (including
transport insurance) actually incurred and paid by the buyer as part of the
purchase price; and (c) amounts repaid or credited by reason of rejections or
returns. Sales of a Tullis Product by Hybridon to a Subsidiary of Hybridon for
sale by the Subsidiary shall not be considered a sale of Tullis Products
hereunder.

     Section 1.32 "TULLIS PATENTS". Tullis Patents shall mean the Technology
Rights (as defined in the Non-Exclusive Patent License Agreement dated September
14, 1992 (the "Tullis Agreement") between Isis and Molecular Biosystems, Inc.
("MBI")) licensed by Isis from MBI under the Tullis Agreement, including without
limitation the patents and patent applications set forth on EXHIBIT I hereto.

     Section 1.33 "TULLIS PRODUCT". Tullis Product shall mean any product whose
use, manufacture or sale by Hybridon, its Subsidiaries or Sublicensees, in any
jurisdiction in which a patent which is a Tullis Patent has been allowed, would
but for the provisions of Section 3.3 constitute an infringement of such patent.

     Section 1.34 "UMASS PATENT RIGHTS". UMass Patent Rights shall mean the
Patent Rights (as defined in the UMass Agreement (as defined below)) licensed by
Hybridon from UMass under the UMass Agreement, including without limitation the
patents and patent applications set forth on EXHIBIT L hereto.

     Section 1.35 "VALID CLAIM". Valid Claim shall mean a claim which (i) in the
case of any unexpired United States or foreign patent, shall not have been
donated to the public, disclaimed or held invalid or unenforceable by a court of
competent jurisdiction in an unappealed or unappealable decision, or (ii) in the
case of any United States or foreign patent application, shall not have been
permanently cancelled, withdrawn, abandoned or been pending for more than seven
(7) years.

                                      -8-

<PAGE>   14

                                   ARTICLE II

                           GRANT OF RIGHTS BY HYBRIDON
                           ---------------------------

Section 2.1  LICENSE GRANT.

          (a) License Grant to Hybridon Antisense Patent Rights. Subject to the
terms and conditions of this Agreement, including without limitation Hybridon's
retained rights under Section 2.3 and Section 2.5(a) of this Agreement, Hybridon
hereby grants to Isis and its Subsidiaries an exclusive worldwide license or
sublicense, as applicable, under the Hybridon Antisense Patent Rights, to
practice Antisense Technology and to discover, develop, make, have made, use,
sell, have sold, offer to sell, import and have imported Antisense Products.
These rights shall only be sublicensable as explicitly provided in Section 2.2.

          (b) Limited License Grant to Hybridon Excluded Patent Rights. Subject
to the terms and conditions of this Agreement, including without limitation
Hybridon's retained rights under Section 2.3 and Section 2.5(a) of this
Agreement, Hybridon hereby grants to Isis and its Subsidiaries the limited
worldwide licenses or sublicenses, as applicable, under the Hybridon Excluded
Patent Rights to practice Antisense Technology and to discover, develop, make,
have made, use, sell, have sold, offer to sell, import and have imported
Antisense Products, in each case solely to the extent specifically described
below. These rights shall only be sublicensable as explicitly provided in
Section 2.2.

          (i)    [*]

          (ii)   [*]

          (iii)  under the Immune Stimulation Patent Rights (A) to discover,
                 develop, make, have made, use, sell, have sold, offer to
                 sell, import and have imported Antisense Products which
                 contain modifications which have neutralized the immune
                 stimulation caused by an immunostimulatory CpG dinucleotide
                 in such Antisense Products, (B) to practice Antisense
                 Technology using oligonucleotides which contain
                 modifications which have neutralized the immune stimulation
                 caused by an immunostimulatory CpG dinucleotide in such
                 oligonucleotides, and (C) to discover, develop, make, have
                 made, use, sell, have sold, offer to sell, import and have
                 imported Antisense Products which target genes involved in
                 immunity modulation;

          (iv)   under the Facilitator Patent Rights to discover, develop,
                 make, have made, use, sell, have sold, offer to sell, import

* Confidential Treatment Requested

                                      -9-

<PAGE>   15

                 and have imported Antisense Products and practice Antisense
                 Technology, provided that neither such Antisense Products
                 nor such Antisense Technology use, or are used with, a
                 Ribozyme or Ribozyme Technology;

          (v)    under the Finderon Patent Rights to discover, develop, make,
                 have made, use, sell, have sold, offer to sell, import and
                 have imported Antisense Products and practice Antisense
                 Technology, provided that neither such Antisense Products
                 nor such Antisense Technology use, or are used with, a
                 Ribozyme or Ribozyme Technology;

          (vi)   under the Amino Patent Rights to discover, develop, make,
                 have made, use, sell, have sold, offer to sell, import and
                 have imported Antisense Products and practice Antisense
                 Technology, provided that such Antisense Products and
                 Antisense Technology use, or are used with, the technology
                 covered by the claims of the Amino Patent Rights solely for
                 the conjugation of functional groups for therapeutic or
                 prophylactic purposes only;

          (vii)  under the Drug Potentiation Patent Rights to discover,
                 develop, make, have made, use, sell, have sold, offer to
                 sell, import and have imported Antisense Products and
                 practice Antisense Technology, which Antisense Products and
                 Antisense Technology primarily act against a gene target
                 implicated in cancer through an antisense mechanism, but
                 which may incidentally potentiate an anti-cancer prodrug;
                 and

          (viii) under the Exhibit K Patents to discover, develop, make, have
                 made, use, sell, have sold, offer to sell, import and have
                 imported Antisense Products and practice Antisense
                 Technology; provided, however, that the license contemplated
                 by this clause (viii) shall not extend to Antisense Products
                 or Antisense Technology related to specific claimed gene
                 targets or pseudo-cyclic oligonucleotide structures and
                 applications.

     The Parties agree that if, during the term of the license and sublicense
granted by Hybridon to Isis and its Subsidiaries in this Section 2.1(b), a claim
issues from any patent application included in Hybridon Excluded Patent Rights
that is necessary or useful for the practice of Antisense Technology, Hybridon
shall not use such claim to preclude or otherwise interfere with the ability of
Isis or its Subsidiaries to discover, develop, make, have made, use, sell, have
sold, offer to sell,

                                      -10-

<PAGE>   16

import and have imported Antisense Products and practice Antisense Technology;
provided, however, that to the extent that the license or sublicense grant set
forth above in this Section 2.1(b) is limited in scope as to its application to
Antisense Products or Antisense Technology, such limitation shall also be
applicable to the restrictions on Hybridon's rights to preclude or otherwise
interfere with Isis and its Subsidiaries set forth in this paragraph (i.e., if
the license or sublicense grant is not applicable, Hybridon shall not be
restricted from precluding or interfering).

          (c) The licenses and sublicenses granted by Hybridon to Isis and its
     Subsidiaries in Sections 2.1(a) and (b) to the extent such licenses or
     sublicenses cover UMass Patent Rights are subject to, without limitation
     Sections 2.2(a), 2.2(b), 2.2(d), 2.6, 2.7, 4.3(a), 4.3(d), 7.1, 10.4 and
     12.4(a) of the License Agreement dated as of February 21, 1990 and restated
     as of September 8, 1993 by and between Hybridon and University of
     Massachusetts Medical Center (formerly the Worcester Foundation for
     Biomedical Research, Inc. and referred to herein as "UMass") (the "UMass
     Agreement"). A copy of the UMass Agreement is attached to this Agreement as
     EXHIBIT J. Hybridon hereby represents and warrants as of the date hereof:
     (i) that Exhibit J is a true, correct and complete copy of the UMass
     Agreement and all amendments and/or other changes thereto, (ii) that the
     UMass Agreement is in full force and effect, (iii) that Hybridon is not in
     default thereunder and (iv) that there has been no waiver of rights by
     Hybridon thereunder. Hybridon further represents and warrants as of the
     date hereof that Isis shall have no payment obligation to UMass arising out
     of the execution and delivery of this Agreement or the sublicensing by
     Hybridon of the UMass Patent Rights hereby and that any payment obligations
     that do arise under the UMass Agreement shall be the sole responsibility of
     Hybridon; provided that Isis may have payment obligations to UMass directly
     in the case of a termination of the UMass Agreement pursuant to the last
     paragraph of Section 2.2(c) of the UMass Agreement.

     Section 2.2 SUBLICENSING RIGHT.

          (a) Isis and its Subsidiaries shall have the right to grant
     sublicenses under the licenses and sublicenses from Hybridon set forth in
     Section 2.1 above to third parties. Each such sublicense shall be subject
     and subordinate to, and consistent with, the terms and conditions of this
     Agreement, and shall provide that any Sublicensee shall have no right to
     grant further sublicenses except on terms consistent with this Section 2.2.
     In the event of a material default by any Sublicensee under a sublicense
     agreement, Isis will inform Hybridon and take commercially reasonable
     efforts to cause the Sublicensee to cure the default or will terminate the
     sublicense or, if Isis is not the sublicensor under such sublicense, Isis
     will cause the sublicensor under such sublicense to take commercially
     reasonable efforts to cause the Sublicensee to cure the default or to
     terminate such

                                      -11-

<PAGE>   17

     sublicense; provided, however that none of Isis, its Subsidiaries or the
     sublicensor under such sublicense shall be responsible to Hybridon for the
     default by the Sublicensee under the sublicense agreement.

          (b) (i) Isis shall provide UMass with a copy of any sublicense granted
     pursuant to this Section 2.2 by Isis or its Subsidiaries or Sublicensees
     which includes a sublicense of UMass Patent Rights, within thirty (30) days
     after the grant of such sublicense. Hybridon shall use its reasonable best
     efforts to cause UMass to enter into a confidentiality agreement with Isis
     with respect to sublicenses provided to UMass under this clause (i) (it
     being understood that Hybridon shall not be obligated to make any payment
     or to provide any other consideration to UMass for such confidentiality
     agreement by UMass).

               (ii) Isis shall provide Hybridon with written notice of any
sublicense (an "Isis Sublicense") granted pursuant to this Section 2.2 by Isis
or its Subsidiaries or Sublicensees within thirty (30) days after the grant of
such sublicense, such written notice specifying the name of the Sublicensee, the
date of the sublicense and whether such Isis Sublicense includes UMass Patent
Rights or is a Naked Sublicense. Hybridon shall have the right, not more than
twice during any calendar year, to have any Isis Sublicense reviewed by an
independent third party chosen by Hybridon to ascertain whether such Isis
Sublicense includes UMass Patent Rights or is a Naked Sublicense. Isis shall
cooperate in all reasonable respects with the review of such Isis Sublicense by
the independent third party under this Section 2.2(b)(ii), including without
limitation responding to questions directed at determining whether such Isis
Sublicense includes UMass Patent Rights or is a Naked Sublicense. Hybridon shall
pay all costs of such review; provided, however, that if, contrary to the
information provided by Isis in the written notice provided to Hybridon in
connection with the grant of such Isis Sublicense, such Isis Sublicense does in
fact include UMass Patent Rights or is a Naked Sublicense, Isis shall reimburse
Hybridon for the costs of such review. If the independent third party determines
that such Isis Sublicense includes UMass Patent Rights or is a Naked Sublicense,
such independent third party shall notify Isis and Hybridon. If Isis disagrees
with the determination of the independent third party, the third party shall be
permitted hereunder to provide Hybridon with a copy of the Isis Sublicense.

          (c) Any Naked Sublicense of Hybridon Intellectual Property by Isis or
     its Subsidiaries to (i) third parties which are parties to license or
     sublicense agreements with Isis or its Affiliates or Subsidiaries not
     involving Hybridon Intellectual Property and (ii) Affiliates of Isis or its
     Subsidiaries shall be made by Isis or its Subsidiaries on commercially
     reasonable terms. Isis and its Subsidiaries shall not sublicense Hybridon
     Intellectual Property separately from any intellectual property of Isis or
     its Affiliates or Subsidiaries, including without limitation the Isis
     Intellectual Property, for

                                      -12-

<PAGE>   18

     the purpose of reducing the amount of Sublicense Income payable by Isis or
     its Subsidiaries to Hybridon under Section 4.3.

     Section 2.3 NO IMPLIED LICENSES; RETAINED RIGHTS. Other than those rights
and licenses explicitly granted herein, no right or license under the Hybridon
Intellectual Property is granted to Isis or its Subsidiaries or Sublicensees.
Notwithstanding the rights and licenses granted herein, Hybridon shall retain
its rights under the Hybridon Intellectual Property for all purposes, including
without limitation its rights to discover, develop, make, have made, use, sell,
have sold, offer to sell, import and have imported Antisense Products, to
practice Antisense Technology and to license or sublicense Hybridon Intellectual
Property; provided, that, except for licenses and sublicenses provided under the
Third Party License Agreements, Hybridon and its Subsidiaries shall not grant
any Naked Sublicenses of the Hybridon Antisense Patent Rights to any third
parties (other than Subsidiaries).

     Section 2.4 COMMERCIALIZATION EFFORTS. Isis hereby agrees to undertake
reasonable efforts to bring one or more products covered by a claim of the UMass
Patent Rights into commercial use as quickly as is reasonably possible.

     Section 2.5 LICENSE AGREEMENTS TO WHICH HYBRIDON IS A PARTY.

          (a) Notwithstanding Section 2.1 of this Agreement, Hybridon shall not
     and is not licensing or sublicensing to Isis or its Subsidiaries any rights
     under the Hybridon Intellectual Property to the extent that such Hybridon
     Intellectual Property has been licensed or sublicensed by Hybridon under
     the Third Party License Agreements.

          (b) Hybridon hereby represents and warrants as of the date hereof
     that, except for the agreements set forth on EXHIBIT H-2 attached hereto:
     (i) Hybridon has not entered into any agreement under which it has licensed
     from another party any of the Hybridon Intellectual Property and (ii)
     Hybridon has not entered into any agreement under which it has licensed to
     another party any of the Hybridon Intellectual Property other than the
     Third Party License Agreements.

          (c) Hybridon agrees that it shall not amend or expand any Third Party
     License Agreement in a manner that is inconsistent with this Agreement,
     including without limitation amending any Third Party License Agreement to
     grant any new exclusive license under the Hybridon Antisense Patent Rights,
     without the prior written consent of Isis, which consent shall not be
     unreasonably withheld or delayed.

          (d) Hybridon hereby represents and warrants as of the date hereof as
     to the Third Party License Agreements: (i) that it has provided true and
     correct copies of all such agreements to Isis, (ii) that all such
     agreements

                                      -13-

<PAGE>   19

     are in full force and effect, (iii) that Hybridon is not in default under
     any such agreement and (iv) that there has been no waiver of rights by
     Hybridon thereunder.

     Section 2.6 METHYLGENE LICENSE AGREEMENT. If Methylgene Inc. ("Methylgene")
designates a target which Methylgene desires to select as a Second Molecular
Target or a Third Molecular Target (as such terms are defined in the Amended and
Restated License Agreement made effective as of January 4, 1996, as amended and
restated on September 21, 2000 (the "Methylgene License Agreement")) pursuant to
the terms of the Methylgene License Agreement. [*]

     Section 2.7 ORIGENIX LICENSE AGREEMENT. Hybridon shall [*] License
Agreement dated as of January 22, 1999 (the "OriGenix License Agreement")
between Hybridon and OriGenix Technologies Inc. ("OriGenix")) and shall [*]

     Section 2.8 AFFILIATES. Hybridon hereby represents and warrants as of the
date hereof that no Affiliate of Hybridon owns or controls any patents, patent
applications or inventions invented, licensed or sublicensed by such Affiliate
prior to April 26, 2001 which are necessary or useful to practice Antisense
Technology.

                                  ARTICLE III

                             GRANT OF RIGHTS BY ISIS
                             -----------------------

     Section 3.1 LICENSE GRANT. Subject to the terms and conditions of this
Agreement, Isis hereby grants to Hybridon and its Subsidiaries a worldwide
non-exclusive license or sublicense, as applicable under the Isis Intellectual
Property Rights to discover, develop, make, have made, use, sell, have sold,
offer to sell, import and have imported Hybridon Antisense Drugs. These rights
shall only be sublicensable as explicitly provided in Section 3.2.

     Section 3.2 SUBLICENSING RIGHT. Hybridon and its Subsidiaries shall have
the right to grant sublicenses under the license from Isis set forth in Section
3.1 above to third parties only to discover, develop, make, have made, use,
sell, have sold, offer to sell, import and have imported Hybridon Antisense
Drugs. Each such sublicense shall be subject and subordinate to, and consistent
with, the terms and conditions of this Agreement, and shall provide that any
Sublicensee shall have no right to grant further sublicenses except on terms
consistent with this Section 3.2. In the event of a material default by any
Sublicensee under a sublicense agreement, Hybridon will inform Isis and take
commercially reasonable efforts to cause the Sublicensee to cure the default or
will terminate the sublicense or, if Hybridon is not the sublicensor under such
sublicense, Hybridon will cause the sublicensor under such sublicense to take
commercially reasonable efforts to cause the Sublicensee to cure the default or
to terminate such sublicense; provided however that none of Hybridon, its
Subsidiaries or the sublicensor under such sublicense shall be responsible to
Isis for the default by the Sublicensee under the sublicense

* Confidential Treatment Requested

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<PAGE>   20

agreement. Notwithstanding the rights granted under this Section 3.2, Hybridon
and its Subsidiaries shall ***

     Section 3.3 TULLIS PATENTS.

          (a) Subject to the terms and conditions of this Agreement, Isis hereby
     grants to Hybridon and its Subsidiaries a worldwide non-exclusive
     sublicense, with the right to grant sublicenses as provided in Section
     3.3(b), under the Tullis Patents to discover, develop, make, have made,
     use, sell, have sold, offer to sell, import and have imported Hybridon
     Antisense Drugs, provided that such Hybridon Antisense Drugs employ
     technology covered by the Isis Intellectual Property as a material element
     thereof.

          (b) (i) Hybridon and its Subsidiaries shall have the right to grant
     sublicenses under the license from Isis set forth in Section 3.3(a) to
     third parties (x) provided that such sublicense may only be granted to
     third parties in connection with the grant of a sublicense to such third
     parties of Isis Intellectual Property under Section 3.2, and (y) solely to
     discover, develop, make, have made, use, sell, have sold, offer to sell,
     import and have imported Hybridon Antisense Drugs that employ technology
     covered by the Isis Intellectual Property as a material element thereof.
     Each such sublicense shall be subject and subordinate to, and consistent
     with, the terms and conditions of this Agreement, and shall provide that
     any such Sublicensee shall have no right to grant further sublicenses
     except on terms consistent with this Section 3.3(b).

               (ii) Hybridon shall provide MBI with a copy of any sublicense
granted by Hybridon or its Subsidiaries or Sublicensees pursuant to this Section
3.3(b) within thirty (30) days after the grant of such sublicense. Isis shall
use its reasonable best efforts to cause MBI to enter into a confidentiality
agreement with Hybridon with respect to sublicenses provided to MBI under this
Section 3.3(b) (it being understood that Isis shall not be obligated to make any
payment or to provide any other consideration to MBI for such confidentiality
agreement by MBI). In the event that MBI does not sign such a confidentiality
agreement with Hybridon, Isis shall enforce against MBI, for and on behalf of
Hybridon, the confidentiality provisions of the Tullis Agreement with respect to
the sublicenses provided by Hybridon, its Subsidiaries or Sublicensees to MBI
and with respect to any other confidential information of Hybridon or a
Subsidiary or Sublicensee of Hybridon that MBI receives.

               (iii) In the event of a material default by any Sublicensee under
a sublicense agreement pursuant to this Section 3.3(b), Hybridon will inform
Isis and take commercially reasonable efforts to cause the Sublicensee to cure
the default or will terminate the sublicense, or if Hybridon is not the
sublicensor under

                                      -15-

<PAGE>   21

such sublicense, Hybridon will cause the sublicensor under such sublicense to
take commercially reasonable efforts to cause the Sublicensee to cure the
default or to terminate such sublicense; provided however that none of Hybridon,
its Subsidiaries or the sublicensor under such sublicense shall be responsible
to Isis for the default by the Sublicensee under the sublicense agreement.
Notwithstanding the rights granted under this Section 3.3(b), Hybridon shall [*]

          (c) A copy of the Tullis Agreement is attached to this Agreement as
     EXHIBIT N. Isis hereby represents and warrants as of the date hereof: (i)
     that Exhibit N is a true, correct and complete copy of the Tullis Agreement
     and all amendments and/or other changes thereto that affect the rights of
     Hybridon as a sublicensee thereunder, (ii) that the Tullis Agreement is in
     full force and effect, (iii) that Isis is not in default thereunder and
     (iv) that there has been no waiver of rights by Isis thereunder. Isis
     further represents and warrants as of the date hereof that Hybridon shall
     have no payment obligation to MBI arising out of the execution and delivery
     of this Agreement or the sublicensing by Isis of the Tullis Patents hereby
     and that any payment obligations that do arise shall be the sole
     responsibility of Isis.

     Section 3.4 SCOPE OF LICENSE. Hybridon acknowledges that Isis claims
intellectual property covering numerous chemical modifications to
oligonucleotides including without limitation modifications to backbone
linkages, sugars, heterocyclic bases and conjugates and to methods of making the
same, including methods of making various oligonucleotide intermediates (the
"Isis Chemistry Intellectual Property"). Hybridon acknowledges and agrees that
no Isis Chemistry Intellectual Property is included in the Isis Intellectual
Property being licensed or sublicensed to Hybridon and its Subsidiaries pursuant
to Section 3.1 of this Agreement, except as expressly set forth below in this
Section 3.4. [*] Isis hereby agrees that any patents owned or controlled by Isis
or an Affiliate as of the date hereof or any patents that may issue in the
future to Isis or an Affiliate from or in respect of any patent applications
which Isis or an Affiliate owned or had the right to sublicense as of April 26,
2001, which would otherwise be infringed by the practice of the Hybridon 2'-O
Methyl Chemistry, shall constitute Isis Intellectual Property for all purposes
of this Agreement, including without limitation the license grant provided in
Section 3.1; provided, however, that the license grant with respect to such
patents shall only provide Hybridon and its Subsidiaries with the right to
discover, develop, make, have made, use, sell, have sold, offer to sell, import
and have imported Hybridon Antisense Drugs which incorporate the Hybridon 2'-O
Methyl Chemistry. If any patent of Isis or an Affiliate includes claims to a
combination of modifications to both substitution with 2'-O-methyl and Isis
Chemistry Intellectual Property in addition to 2'-O-methyl substituents, nothing
in this Section 3.4 shall be deemed to be a grant of rights to Hybridon or its
Subsidiaries to practice the Isis Chemistry Intellectual Property other than
2'-O-methyl substituents.

* Confidential Treatment Requested

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<PAGE>   22

     Section 3.5 NO IMPLIED LICENSES. Other than those rights and licenses
explicitly granted herein, no right or license under the Isis Intellectual
Property or the Tullis Patents is granted to Hybridon or its Subsidiaries or
Sublicensees.

     Section 3.6 LIMITATION ON LICENSE GRANT WITH RESPECT TO TARGET VALIDATION
AND GENE FUNCTIONALIZATION ACTIVITIES. Notwithstanding anything to the contrary
in Sections 3.1 and 3.3(a), the licenses set forth in Sections 3.1 and 3.3(a)
above do not grant Hybridon and its Subsidiaries the right:

          (a) to use the Isis Intellectual Property and the Tullis Patents for
     target validation and gene functionalization activities, except when, and
     only to the extent that, (i) such activities are directed to the discovery,
     development, Optimization and commercialization of a Hybridon Antisense
     Drug and (ii) such activities are performed only by Hybridon or a
     Subsidiary and not by a contractor or a collaborator, or

          (b) to use, or enable any third party to use, any information that is
     developed during such target validation and gene functionalization
     activities in the development of a drug other than a Hybridon Antisense
     Drug, including without limitation, small molecules, ribozymes, proteins
     and pseudocyclic oligonucleotide structures.

     Section 3.7 NOTICE OF HYBRIDON ANTISENSE DRUGS. Hybridon shall provide Isis
with written notice of any Hybridon Antisense Drugs developed under a sublicense
granted by Hybridon or its Subsidiaries under Section 3.2 (a "Hybridon Antisense
Drug Sublicense") promptly after such Hybridon Antisense Drug is developed. Isis
shall have the right, not more than twice during any calendar year, to have any
Hybridon Antisense Drug Sublicense reviewed by an independent third party chosen
by Isis to confirm whether such Hybridon Antisense Drug qualifies as a Hybridon
Antisense Drug as defined under this Agreement. Hybridon shall cooperate in all
reasonable respects with the review of such Hybridon Antisense Drug Sublicense
by the independent third party under this Section 3.6, including without
limitation responding to questions directed at determining whether such Hybridon
Antisense Drug qualifies as a Hybridon Antisense Drug. Isis shall pay all costs
of such review; provided, however, that if such Hybridon Antisense Drug does not
qualify as a Hybridon Antisense Drug as defined under this Agreement, Hybridon
shall reimburse Isis for the costs of such review. If the independent third
party determines that such Hybridon Antisense Drug does not qualify as a
Hybridon Antisense Drug as defined under this Agreement, such independent third
party shall notify Hybridon and Isis. If Hybridon disagrees with the
determination of the independent third party, the third party shall be permitted
to provide Isis with a copy of the Hybridon Antisense Drug Sublicense.

     Section 3.8 AFFILIATES. Isis hereby represents and warrants as of the date
hereof that no Affiliate of Isis owns or controls any patents, patent
applications or

                                      -17-

<PAGE>   23

inventions invented, licensed or sublicensed by such Affiliate prior to April
26, 2001 which cover or claim Motifs or RNaseH Dependent Mechanisms of Action.

                                   ARTICLE IV

                               PAYMENT OBLIGATIONS
                               -------------------

     Section 4.1 CONSIDERATION FOR LICENSES OF HYBRIDON INTELLECTUAL PROPERTY
AND ISIS INTELLECTUAL PROPERTY. In consideration of the licenses and sublicenses
granted under Sections 2.1 and 3.1 of this Agreement and the restrictions on use
agreed to by Hybridon under this Agreement, Hybridon and Isis each shall pay to
the other the consideration set forth in the Master Agreement and Section 4.2
and Section 4.3 of this Agreement. Isis and Hybridon each recognizes that the
other Party has expended significant efforts and resources in the research and
development of Antisense Technology and the payments to be made under the Master
Agreement to each Party for the patent licenses and sublicenses granted
hereunder will allow each Party to recoup such expenditures.

     Section 4.2 CONSIDERATION FOR SUBLICENSE OF TULLIS PATENTS. In
consideration of the sublicense granted by Isis to Hybridon under Section 3.3 of
this Agreement, Hybridon shall pay to Isis the annual maintenance fee and
royalties provided below:

          (a) On the date hereof and each anniversary of such date thereafter
     (until the earlier of the termination of the sublicense grant under Section
     3.3 or the date on which there ceases to be any Valid Claims included in
     the Tullis Patents), an annual maintenance fee of [*].

          (b) Hybridon shall pay to Isis earned royalties at the rate of [*] of
     Tullis Net Sales of Tullis Products. Hybridon shall be obligated to pay
     such royalties on a country-by-country basis, so long as there continues to
     be a Valid Claim included in the Tullis Patents which covers the
     manufacture, use or sale of the applicable Tullis Product in such country.
     During the term of the sublicense under Section 3.3 and for so long
     thereafter as Hybridon is required to report royalties payable under this
     Section 4.2, Hybridon shall deliver to Isis within thirty (30) days after
     March 31, June 30, September 30 and December 31 of each year a report
     indicating (i) Tullis Net Sales for each Tullis Product, on a Tullis
     Product-by-Tullis Product and country-by-country basis, including an
     accounting of the deductions from Tullis Net Sales permitted by the
     definition thereof and (ii) total royalties owed. Simultaneously with the
     delivery of each such report, Hybridon shall pay to Isis the royalty
     payments due under this Agreement for the period covered by such report. If
     no royalties are due, it shall be so reported.

     Section 4.3 ISIS SUBLICENSE INCOME. Isis shall pay to Hybridon [*] of all
Sublicense Income, [*] in respect of Sublicense Income received in connection
with a

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<PAGE>   24

Naked Sublicense [*]. Such payment by Isis shall be paid to Hybridon within 30
days after the calendar quarter in which the Sublicense Income was received by
Isis or a Subsidiary. Isis shall deliver to Hybridon with such payment a report
describing such Sublicense Income and how such Sublicense Income was calculated,
all on a country-by-country and product-by-product basis.

     Section 4.4 RECORDS; AUDITS. For a period not less than three (3) years
after the relevant period, each Party shall keep full, true and accurate books
of account sufficient to determine the amounts payable pursuant to Section
4.2(b) or 4.3, as the case may be. Each Party shall have the right, not more
than once during any calendar year, to have the books and records of the other
Party audited by a qualified independent accounting firm of its choosing, under
appropriate confidentiality provisions, to ascertain the accuracy of the reports
and payments hereunder and compliance by the other Party and its Subsidiaries
and Sublicensees with their obligations under Section 4.2(b) or 4.3, as the case
may be. Such audit shall be conducted upon at least ten (10) days' advance
notice during normal business hours and in a manner that does not interfere
unreasonably with the business of the audited entity. Any underpayment or
overpayment determined by such audit shall promptly be paid or refunded by
Hybridon or Isis, as the case may be. If a Party has underpaid an amount due
under Section 4.2(b) or 4.3, as the case may be, by more than five percent (5%),
such Party shall also reimburse the other Party for the cost of such audit (with
the cost of the audit to be paid by the other Party in all other cases).

     Section 4.5 PAYMENT CURRENCY. All amounts due under this Agreement shall be
paid to the designated Party in United States currency by wire transfer to an
account in a United States bank specified by such Party or in such other form
and/or manner as such Party may reasonably request. The payments due on sales in
currencies other than United States dollars shall be calculated using the
appropriate exchange rate of such currency quoted in the Wall Street Journal on
the close of business on the last business day prior to which such payment is
made.

     Section 4.6 LATE PAYMENTS; COLLECTIONS. Any amount not paid when due under
this Agreement or the Master Agreement shall bear interest at the lesser of (i)
one and one-half percent (1.5%) per month, compounded monthly, or (ii) the
highest rate permitted by law. Each Party agrees to pay all costs of collection,
including reasonable attorneys' fees, incurred by the other Party in enforcing
the payment obligations of the first Party under this Agreement and the Master
Agreement.

                                   ARTICLE V

                                 COLLABORATION
                                 -------------

     In addition to the collaboration between the Parties with respect to
intellectual property protection under Article VI, the Parties shall further

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<PAGE>   25

collaborate hereunder through a committee (the "Collaboration Committee")
consisting of two representatives of each Party. The Parties shall establish the
Collaboration Committee within thirty (30) days after the Effective Date. The
Collaboration Committee shall meet at least twice each calendar year in person
or by video conference during the term of this Agreement to review the progress
of Isis' development efforts with respect to Isis' Antisense Products that are
covered by Hybridon Intellectual Property. The Parties intend that the
Collaboration Committee shall act as a forum for the Parties to work
cooperatively [*]. The Parties also anticipate that the Collaboration Committee
may recommend to the Parties from time to time that certain aspects of the drug
development process be performed by Hybridon for Isis or that the Parties
consider entering into further collaborations. Neither Party shall be bound by
any recommendation of the Collaboration Committee but shall consider its
recommendations in good faith. In addition, neither Party shall be obligated to
disclose any Confidential Information to the Collaboration Committee.

                                   ARTICLE VI

                        INTELLECTUAL PROPERTY PROTECTION
                        --------------------------------

     Section 6.1 Patent Prosecution and Cooperation.

          (a) PROSECUTION AND MAINTENANCE OF HYBRIDON ANTISENSE PATENT RIGHTS.

               (i) Hybridon will be responsible for prosecuting and maintaining
the Hybridon Antisense Patent Rights. Hybridon shall promptly forward to Isis'
patent counsel any substantive actions prepared for or received from the U.S.
Patent and Trademark Office or any foreign patent office which may materially
affect patent rights, e.g., claim scope or patent term. Isis' patent counsel
shall provide any comments to Hybridon in sufficient time for Hybridon to
reflect such comments in any response. Any comments made by Isis shall be made
in good faith and shall be directed to maximizing the claims covered by the
Hybridon Antisense Patent Rights.

               (ii) If Hybridon agrees with the comments of Isis' patent
counsel, it shall reflect such comments in its response. If Hybridon disagrees
with such comments, it shall notify Isis, and either Party may then submit such
dispute (a "Patent Comment Dispute") for resolution by an intellectual property
lawyer (the "Neutral Lawyer") with at least five years of experience and a
background in biotechnology or pharmaceutical patent matters. The Neutral Lawyer
shall be selected by mutual agreement of the Parties; provided, however, that if
the Parties cannot agree on a Neutral Lawyer within five days of a Party's
request for a Neutral Lawyer under this provision, the Neutral Lawyer shall be
selected by the American Arbitration Association in Washington, D.C. Each Party
shall submit its position as to the Patent Comment Dispute to the Neutral
Lawyer, who shall

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<PAGE>   26

resolve the dispute by agreeing to one of the submitted positions of the Parties
without any changes to such position. The Parties agree that the position agreed
to by the Neutral Lawyer shall be reflected in the action or response being
prepared and that the costs of the Neutral Lawyer shall be paid by the Party
whose position is not agreed to by the Neutral Lawyer. The decision of the
Neutral Lawyer shall be final and binding on the Parties. In light of the
foregoing dispute resolution mechanism, neither Party shall submit a Patent
Comment Dispute to binding arbitration in accordance with the provisions of
Article VIII. The Parties shall cooperate in all respects to resolve any Patent
Comment Dispute in sufficient time to avoid any loss of rights, including
without limitation jointly instructing the Neutral Lawyer to make a decision in
sufficient time to avoid any loss of rights.

               (iii) Isis will be responsible for and pay fifty percent (50%) of
Hybridon's costs incurred in prosecuting and maintaining the Hybridon Antisense
Patent Rights, net of amounts paid to Hybridon for such costs by other licensees
and not including any costs of Hybridon incurred in connection with a Patent
Comment Dispute (except as otherwise specified in the foregoing Section
6.1(a)(ii)). Hybridon shall direct its counsel to invoice Isis directly for
Isis' share of such costs as such costs are incurred.

          (b) JOINT PATENT COMMITTEE. Hybridon and Isis will, within sixty (60)
     days after the execution of this Agreement, establish a committee (the
     "Joint Patent Committee") consisting of three representatives of each
     Party. The Joint Patent Committee shall confer twice each calendar year or
     as necessary to support timely decision making during the term of this
     Agreement to discuss patent prosecution issues, budgets and strategies
     relating to the Hybridon Antisense Patent Rights. The Joint Patent
     Committee shall also, as set forth in Section 5.2(b), determine which Party
     faces the greatest competitive threat in the event of infringement by a
     third party of any of the Hybridon Antisense Patent Rights. In the event
     that the Joint Patent Committee is unable to resolve any matter presented
     for resolution,. either Party shall have the right to submit such matter to
     binding arbitration in accordance with the provisions of Article VIII.

          (c) INTERFERENCE BETWEEN ISIS INTELLECTUAL PROPERTY AND HYBRIDON
     ANTISENSE PATENT RIGHTS. If an interference is declared between any of the
     Isis Intellectual Property and any of the Hybridon Antisense Patent Rights
     (other than the UMass Patent Rights), each Party shall be represented by
     its own counsel in the interference proceedings; provided, however, that
     Hybridon's counsel shall be jointly selected by Isis and Hybridon; and
     provided further that if Hybridon and Isis can not agree on counsel for
     Hybridon, a patent lawyer with at least five years of experience in
     interference practice and a background in biotechnology or pharmaceutical
     patent matters shall be selected to represent Hybridon by the American
     Arbitration Association in Washington, D.C. Each Party shall seek to
     resolve

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<PAGE>   27
                                  EXHIBIT M

                                      [*]

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                                    EXHIBIT N

                                TULLIS AGREEMENT

Incorporated by reference to Exhibit 10.1 to Isis's Quarterly Report pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly
period ended September 30, 1992 on Form 10-Q (File No. 0-19125)

<PAGE>   29

     the interference in a manner that maximizes the value to both parties of
     the combined portfolio of the Hybridon Antisense Patent Rights and the Isis
     Intellectual Property. If an interference is declared between any UMass
     Patent Rights and any Isis Intellectual Property, Hybridon will cooperate
     with Isis in the resolution thereof to the extent permitted under the UMass
     Agreement or, if Hybridon cannot so cooperate due to obligations to UMass,
     Isis will not be obligated to reimburse Hybridon for any expenses related
     to the interference proceedings. If an interference is declared between any
     of the Hybridon Antisense Patent Rights and the intellectual property of a
     third party or between any of the Isis Intellectual Property and the
     intellectual property of a third party, then Hybridon or Isis, as the case
     may be, shall have sole control of prosecuting the interference.

          (d) PATENT COOPERATION. Isis hereby represents and warrants as of the
     date hereof that since April 26, 2001, neither Isis nor any of its
     Affiliates has challenged, opposed or taken any action to provoke any
     interference with any Hybridon Intellectual Property, and Isis agrees that
     from and after the date of this Agreement Isis shall not, and shall cause
     its Non-Parent Affiliates to not, challenge, oppose or take any action to
     provoke any interference with, or maintain any current challenge or
     opposition to, any Hybridon Intellectual Property. Hybridon hereby
     represents and warrants as of the date hereof that since April 26, 2001,
     neither Hybridon nor any of its Affiliates has challenged, opposed or taken
     any action to provoke any interference with any Isis Intellectual Property,
     and Hybridon agrees that from and after the date of this Agreement Hybridon
     shall not, and shall cause its Non-Parent Affiliates to not, challenge,
     oppose or take any action to provoke any interference with, or maintain any
     current challenge or opposition to, any Isis Intellectual Property.
     Hybridon further agrees that it will not use any Hybridon Antisense Patent
     Rights to challenge or interfere with any patents owned by Isis arising out
     of inventions invented, licensed or sublicensed by Isis prior to April 26,
     2001, including those included in the Isis Intellectual Property, and that
     Hybridon will not oppose any patents claiming inventions invented, licensed
     or sublicensed by Isis prior to April 26, 2001, including those included in
     the Isis Intellectual Property, that cover chemical modifications to
     antisense oligonucleotides. The foregoing obligations not to challenge,
     oppose or interfere include, without limitation obligations not to directly
     or indirectly provoke an interference, participate in an opposition or make
     any claims of invalidity; PROVIDED THAT either Party and its Affiliates may
     raise a claim of invalidity as a defense in a lawsuit filed by the other
     Party or its Affiliates. In addition, in the context of any interference
     between any of the Isis Intellectual Property and any of the Hybridon
     Antisense Patent Rights provoked by the U.S. Patent and Trademark Office,
     the Parties shall use commercially reasonable efforts to reach a settlement
     that maximizes the value to both Parties of the combined

                                      -22-

<PAGE>   30

     portfolio of the Hybridon Antisense Patent Rights and the Isis Intellectual
     Property.

          (e) Notwithstanding any provision of this Section 6.1 to the contrary,
     nothing in this Section 6.1 shall (x) prevent Hybridon from complying with
     its obligations with respect to the Hybridon Intellectual Property under
     the UMass Agreement or the Third Party License Agreements, as applicable,
     or (y) limit the rights of the third parties under such agreements with
     respect to the Hybridon Intellectual Property, including as to clauses (x)
     and (y):

     (i)    UMass' right to prepare, file, prosecute and maintain certain
            patents and patent applications in the name of UMass pursuant to
            Section 8.1 of the UMass Agreement;

     (ii)   Hybridon's obligation to use counsel acceptable to UMass and to
            consult with UMass regarding the preparation, filing, prosecution
            or maintenance of certain patents and patent applications
            pursuant to Section 8.1 of the UMass Agreement;

     (iii)  Hybridon's obligation pursuant to Section 8.2 of the UMass Agreement
            (A) to provide notice to UMass prior to abandoning, or failing to
            make payment or take other necessary actions to maintain, certain
            patents and patent applications and (B) to continue the
            prosecution or maintenance of such patents after notice has been
            provided and before UMass has had sufficient time to assume the
            prosecution or maintenance of such patent;

     (iv)   Methylgene's right under Section 5.5 of the Methylgene License
            Agreement to take measures to ensure the registration and
            maintenance of certain patents and patent applications if
            Hybridon fails to register and maintain such patents and patent
            applications;

     (v)    Methylgene's right under Section 5.5 of the Methylgene License
            Agreement to (A) approve the patent agent selected to prosecute
            certain patents and patent applications, (B) be kept informed
            regarding progress or problems related to certain patents and
            patent applications and (C) have its comments on such progress or
            problems be considered;

     (vi)   OriGenix's right under Section 5.5 of the OriGenix License Agreement
            to take measures to ensure the registration and maintenance of
            certain patents and patent applications if Hybridon fails to
            register and maintain such patents and patent applications;

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<PAGE>   31

     (vii)  OriGenix's right under Section 5.5 of the OriGenix License
            Agreement to (A) approve the patent agent selected to prosecute
            certain patents and patent applications, (B) be kept informed
            regarding progress or problems related to certain patents and
            patent applications and (C) have its comments on such progress or
            problems be considered;

     (viii) EpiGenesis' right pursuant to Section 6.2.2 of the Development and
            License Agreement between EpiGenesis Pharmaceuticals, Inc. and
            Hybridon, dated as August 9, 2000 (the "EpiGenesis License
            Agreement") to file, prosecute and maintain certain patents and
            patent applications if Hybridon elects not to continue to seek or
            maintain patent protection on such patents or patent
            applications;

     (ix)   EpiGenesis' right pursuant to Section 6.2.2 of the EpiGenesis
            License Agreement to (A) have Hybridon consult with EpiGenesis
            regarding the prosecution of certain patents and patent
            applications, (B) have a reasonable amount of time to consider
            and comment on any document to be filed in connection with the
            prosecution of such patents and patent applications and (C) have
            its comments on such comments be seriously considered;

     (x)    Hybridon's obligation pursuant to Section 6.2.3 of the EpiGenesis
            License Agreement (A) to provide notice to EpiGenesis prior to
            abandoning, or failing to make payment or take other necessary
            actions to maintain certain patents and patent applications and
            (B) to continue the prosecution or maintenance of such patents
            and patent applications after notice has been provided and before
            EpiGenesis has had sufficient time to assume the prosecution or
            maintenance of such patents and patent applications; and

     (xi)   Boston Biosystems, Inc.'s (BBI) right and Avecia Holdings plc's
            right to prosecute or maintain certain patents and patent
            applications if Hybridon declines to prosecute or maintain such
            patents or patent applications pursuant to (A) Section 4.03 of
            the PNT Monomer Patent License and Option Agreement dated as of
            September 20, 2000 by and between Hybridon and BBI, (B) Section
            4.03 of the Oligonucleotide Purification Patent License Agreement
            dated as of September 20, 2000 by and between Hybridon and BBI,
            and (C) Section 5.03 of the Interference Patent Sublicense Option
            Agreement dated as of September 20, 2000 by and between Hybridon
            and BBI.

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<PAGE>   32

     Section 6.2 ENFORCEMENT OF HYBRIDON ANTISENSE PATENT RIGHTS

          (a) NOTICE. If Hybridon or Isis becomes aware that any of the Hybridon
Antisense Patent Rights is infringed by a third party or is subject to a
declaratory judgment action relating to infringement or invalidity, Hybridon or
Isis, as the case may be, shall promptly notify the other Party.

          (b) FIRST RIGHT OF ENFORCEMENT. In the event of infringement of the
Hybridon Antisense Patent Rights by a third party, the Party facing the greatest
competitive threat from the infringement shall have the first right (but not the
obligation), at its sole expense, to undertake such action as it shall
determine, in its discretion, appropriate to enforce the Hybridon Antisense
Patent Rights; provided, however, that such Party shall not admit the invalidity
or unenforceability of any Hybridon Antisense Patent Rights, grant a license to
the allegedly infringing third party or enter into any settlement agreement
without the other Party's prior written consent. The determination of which
Party faces the greatest competitive threat from the infringement shall be made
by the Joint Patent Committee. If the Joint Patent Committee determines that
neither Party faces a greater competitive threat than the other Party, then
Hybridon shall have the first right to enforce the Hybridon Antisense Patent
Rights. The Party enforcing the Hybridon Antisense Patent Rights shall keep the
other Party reasonably informed on a quarterly basis, in person or by telephone,
prior to and during any such enforcement. The other Party shall assist the Party
enforcing the Hybridon Antisense Patent Rights, upon the enforcing Party's
request and at the enforcing Party's sole expense, in taking any action to
enforce the Hybridon Antisense Patent Rights and shall join in any such action
if deemed by a court of competent jurisdiction to be a necessary party. Neither
Party shall incur liability to the other Party as a consequence of such
litigation or any unfavorable decision resulting therefrom, including any
decision holding any of the Hybridon Antisense Patent Rights invalid, not
infringed or unenforceable. Notwithstanding the foregoing, if Isis is the Party
enforcing the Hybridon Antisense Patent Rights under this Section 6.2(b) and
such Hybridon Antisense Patent Rights are included in the claims that are the
subject matter of the UMass Agreement or are licensed by Hybridon under the
Third Party License Agreements, Isis' rights to enforce such Hybridon Antisense
Patent Rights shall be limited to the rights of Hybridon to enforce such
Hybridon Antisense Patent Rights, and subject to and limited by the rights of
the other parties to the UMass Agreement and the Third Party License Agreements,
as set forth in the UMass Agreement or the Third Party License Agreements, as
applicable, including:

          (i)   UMass's right pursuant to Section 9.2 of the UMass Agreement to
                prosecute any infringements of certain patents and patent
                applications licensed to Hybridon pursuant to the UMass
                Agreement;

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<PAGE>   33

          (ii)  Hybridon's obligation pursuant to Section 9.3 of the UMass
                Agreement to seek the consent of UMass to any settlement,
                consent judgement or other voluntary final disposition of a suit
                involving certain patents and patent applications licensed to
                Hybridon pursuant to the UMass License;

          (iii) UMass' right to intervene and take over the sole defense of a
                declaratory judgment action pursuant to Section 9.6 of the UMass
                Agreement;

          (iv)  Methylgene's right pursuant to Section 5.1(b) of the Methylgene
                License Agreement to initiate infringement actions related to
                certain patents and patent applications as it may in its
                discretion deem necessary or desirable;

          (v)   OriGenix's right pursuant to Section 5.1(v) of the OriGenix
                License Agreement to initiate infringement actions related
                to certain patents and patent applications as it may in its
                discretion deem necessary or desirable; and

          (vi)  EpiGensesis' right pursuant to Section 6.6 of the EpiGenesis
                License Agreement to initiate infringement actions related to
                certain patents and patent applications and to consent to any
                settlement of infringement litigation that would materially
                diminish the rights of EpiGenesis in certain patents and patent
                applications.

Items (i) through (vi) of this Section 6.2(b) are collectively referred to as
the "Other Enforcement Rights".

          (c) ENFORCEMENT BY OTHER PARTY. If the Party having the first right to
     enforce the Hybridon Antisense Patent Rights pursuant to Section 5.2(b)
     above fails to file an action to abate an infringement of the Hybridon
     Antisense Patent Rights, within six (6) months after a written request from
     the other Party to do so, or if such Party fails to diligently prosecute or
     discontinues the prosecution of any such action, the other Party at its
     sole expense may, in its discretion, undertake such action as it determines
     appropriate (other than the grant of a license to the allegedly infringing
     third party) to enforce such Hybridon Antisense Patent Rights. Such other
     Party shall keep the Party that had the first right to enforce the Hybridon
     Antisense Patent Rights reasonably informed on a quarterly basis, in person
     or by telephone, prior to and during any such enforcement. In such case,
     the Party that had the first right to enforce the Hybridon Antisense Patent
     Rights shall assist such other Party, upon such other Party's request and
     at such other Party's sole expense, in taking any action to enforce the
     Hybridon Antisense Patent Rights and shall join in any such action if
     deemed by a

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<PAGE>   34

     court of competent jurisdiction to be a necessary party. Neither Party
     shall incur liability to the other Party as a consequence of such
     litigation or any unfavorable decision resulting therefrom, including any
     decision holding any of the Hybridon Antisense Patent Rights invalid, not
     infringed or unenforceable. Notwithstanding the foregoing, if Isis is the
     Party enforcing the Hybridon Antisense Patent Rights under this Section
     6.2(c) and such Hybridon Antisense Patent Rights are included in the claims
     that are the subject matter of the UMass Agreement or are licensed by
     Hybridon under the Third Party License Agreements, Isis' rights to enforce
     such Hybridon Antisense Patent Rights shall be limited to the rights of
     Hybridon to enforce such Hybridon Antisense Patent Rights, and subject to
     and limited by the rights of the other parties to the UMass Agreement and
     the Third Party License Agreements, as set forth in the UMass Agreement or
     the Third Party License Agreements, as applicable, including the Other
     Enforcement Rights.

          (d) RECOVERIES. All monies recovered upon the final judgment or
     settlement of any action involving the enforcement of Hybridon Antisense
     Patent Rights as contemplated by this Section 6.2 shall be allocated in the
     following order of priority: (i) first to reimburse the costs and expenses
     (including reasonable attorney fees and costs) incurred by the Parties in
     prosecuting such action, and (ii) any remaining portion of the recovery
     shall be divided between the Parties in proportion to the respective total
     losses, determined by aggregating both past and prospective losses, each
     Party would have been reasonably likely to have suffered had such
     infringement continued unabated. Notwithstanding the foregoing, if the
     Hybridon Antisense Patent Rights that were the subject of the action are
     included in the claims that are the subject matter of the UMass Agreement
     or are licensed by Hybridon under the Third Party License Agreements, the
     provisions of this Section 6.2(d) shall only apply to such monies recovered
     upon the final judgment or settlement of such action as remain following
     payment of monies to third parties as required under the UMass Agreement
     and the Third Party License Agreements.

                                  ARTICLE VII

                                 CONFIDENTIALITY
                                 ---------------

     Section 7.1 CONFIDENTIAL INFORMATION. Each Party agrees that all
Confidential Information of a Party that is disclosed by a Party to the other
Party (a) shall be maintained in confidence by the receiving Party and shall not
be used by the receiving Party for any purpose other than as permitted under
this Agreement, and (b) shall not be disclosed by the receiving Party to any
third party who is not a Subsidiary of the receiving Party, or a consultant or
an advisor to the receiving Party or a Subsidiary of the receiving Party,
without the prior written consent of the disclosing Party; provided, however,
that Confidential Information may only be disclosed by the receiving Party to
Subsidiaries or consultants or advisors to the receiving Party or its
Subsidiaries if such Subsidiaries, consultants or advisors, as the case may be,
have agreed in writing to be bound by the obligations of the

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<PAGE>   35

receiving Party under this Section 7.1. Notwithstanding the foregoing, the
receiving Party shall be entitled to use and disclose Confidential Information
that:

          (a) was known or used by the receiving Party or its Subsidiaries prior
     to its date of disclosure to the receiving Party as demonstrated by legally
     admissible evidence available to the receiving Party or its Subsidiaries;
     or

          (b) either before or after the date of the disclosure to the receiving
     Party is lawfully disclosed to the receiving Party or its Subsidiaries by
     sources other than the disclosing Party rightfully in possession of the
     Confidential Information and not bound by confidentiality obligations to
     the disclosing Party or its Subsidiaries; or

          (c) either before or after the date of the disclosure to the receiving
     Party is or becomes published or otherwise is or becomes part of the public
     domain through no breach hereof on the part of the receiving Party or its
     Subsidiaries; or

          (d) is independently developed by or for the receiving Party or its
     Subsidiaries without reference to or reliance upon the Confidential
     Information as demonstrated by competent written records; or

          (e) is reasonably necessary to conduct clinical trials or for
     regulatory approval of products or for the filing, prosecution and
     maintenance of patents and patent applications, PROVIDED THAT the receiving
     Party provides prior written notice of such disclosure to the disclosing
     Party and takes reasonable and lawful actions to avoid and/or minimize the
     degree of such disclosure; or

          (f) is required to be disclosed by the receiving Party to comply with
     applicable laws, to defend or prosecute litigation or to comply with
     governmental regulations, PROVIDED THAT the receiving Party provides prior
     written notice of such disclosure to the disclosing Party and takes
     reasonable and lawful actions to avoid and/or minimize the degree of such
     disclosure.

                                  ARTICLE VIII

                               DISPUTE RESOLUTION
                               ------------------

     Section 8.1 Except as set forth in Section 6.1(a)(ii), each Party must
submit any dispute under this Agreement or the Master Agreement to arbitration
by notifying the other Party, in writing, of such dispute. Within 30 days after
receipt of such notice, the Parties shall designate in writing one arbitrator to
resolve the dispute; PROVIDED, that if the Parties cannot agree on an arbitrator
within such 30 days period, the arbitrator shall be selected by the office of
the American

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<PAGE>   36

Arbitration Association in the city where arbitration will take place. The
arbitrator shall not be an employee, consultant, officer, director or
stockholder of any Party or its Affiliates. If neither the Parties nor the
applicable office of the American Arbitration Association is able to identify an
individual to serve as the arbitrator, the American Arbitration Association
shall select an arbitrator from the CPC Panel of Distinguished Neutrals of the
CPR Institute for Dispute Resolution.

     Section 8.2 Within 30 days after the designation of the arbitrator, the
arbitrator and the Parties shall meet, at which time the Parties shall be
required to set forth in writing all disputed issues and a proposed ruling on
the merits of each such issue.

     Section 8.3 The arbitrator shall set a date for a hearing, which shall be
no later than 45 days after the submission of written proposals to discuss each
of the issues identified by the Parties. Each Party shall have the right to be
represented by counsel. Except as provided herein, the arbitration shall be
governed by the Commercial Arbitration Rules of the American Arbitration
Association; PROVIDED, HOWEVER, that the Federal Rules of Evidence shall apply
with regard to the admissibility of evidence and the arbitration shall be
conducted by a single arbitrator.

     Section 8.4 The arbitrator shall use his or her best efforts to rule on
each disputed issue within 30 days after the completion of the hearings. The
determination of the arbitrator as to the resolution of any dispute shall be
final and binding and conclusive upon all parties hereto. All determinations of
the arbitrator shall be in writing and shall be delivered to the Parties. The
determinations of the arbitrator may be entered in any court of competent
jurisdiction.

     Section 8.5 The attorneys' fees of the Parties in any arbitration, the fees
of the arbitrator, and the costs and expenses of the arbitration (collectively,
the "Arbitration Costs") shall be borne by the Parties as determined by the
arbitrator.

     Section 8.6 The arbitration shall take place in Boston, Massachusetts if
brought by Isis and in San Diego, California if brought by Hybridon.

     Section 8.7 Nothing in this Article VIII shall prevent either Party from
seeking a preliminary injunction, temporary restraining order or similar relief
in order to prevent or limit and irreparable harm that might occur in the
absence thereof from a court of competent jurisdiction.

                                   ARTICLE IX

                              TERM AND TERMINATION
                              --------------------

     Section 9.1 TERM. This Agreement shall commence as of the date hereof and
shall continue until the last of the patents and patent applications included in
the Hybridon Intellectual Property, the Isis Intellectual Property and the
Tullis

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<PAGE>   37

Patents has expired, subject to earlier termination of this Agreement in
accordance with this Article IX. Notwithstanding the foregoing, the licenses or
sublicenses granted hereunder shall terminate on a country-by-country basis
concurrently with the expiration or termination of the applicable Valid Claim
under the Hybridon Intellectual Property, the Isis Intellectual Property or the
Tullis Patents, as the case may be, in the applicable country.

     Section 9.2 TERMINATION OF LICENSES AND SUBLICENSES FOR BREACH.

          (a) Except as set forth in Section 9.2(b), (i) if an arbitrator has
     rendered a ruling pursuant to Article VIII that a Party or a Subsidiary has
     materially breached this Agreement or the Master Agreement, which ruling
     specified the remedies imposed on such breaching party for such breach,
     including without limitation a ruling on a dispute as to breach of a
     Party's obligation to issue stock or pay cash in lieu of stock as required
     under the Master Agreement (the "ADVERSE RULING"), and (ii) the breaching
     Party has failed to comply with the terms of the Adverse Ruling within the
     time period specified therein for compliance, or if such compliance cannot
     be fully achieved by such date, the breaching Party has failed to commence
     compliance and to use diligent efforts to achieve full compliance as soon
     thereafter as is reasonably possible, then the non-breaching Party shall be
     entitled to terminate the licenses and sublicenses granted to the breaching
     Party and its Subsidiaries by such non-breaching Party under this Agreement
     (without prejudice to any of the other rights of the non-breaching Party
     under this Agreement or the Master Agreement) upon written notice to the
     breaching Party.

          (b) (i) If a Party breaches an obligation to issue stock or pay cash
     in lieu of stock as required under the Master Agreement, then the
     non-breaching Party may terminate the licenses and sublicenses granted to
     the breaching Party and its Subsidiaries by such non-breaching Party under
     this Agreement immediately upon written notice to the breaching Party if
     the breaching Party fails to cure such breach within ten (10) business days
     of written notice of such breach from the non-breaching Party; provided,
     however, that if the breaching Party believes that a bona fide dispute
     exists as to the amount of any payment, then the breaching Party may, not
     later than five business days following the notice of the breach, (i)
     provide the non-breaching Party with a written notice setting forth the
     nature of the dispute and the amount in dispute, (ii) at the same time, pay
     to the non-breaching Party the amount of the payment which is not in
     dispute and (iii) promptly submit the dispute to binding arbitration
     pursuant to Article VIII, in which case the non-payment of the disputed
     portion shall not be deemed a breach during the pendency of the
     arbitration.

                                      -30-

<PAGE>   38

               (ii) If the final arbitration order or ruling issued in the
arbitration proceeding resolves the dispute against the breaching Party and
orders the breaching Party to pay all or part of the disputed portion to the
non-breaching Party, then the arbitrator shall include in its award, in addition
to such other remedies as it deems appropriate, the following against the
breaching Party: (A) the Arbitration Costs, (B) *** and (C) if the arbitrator
finds that a cash payment was due, an amount equal to interest at the rate equal
to the lower of 1.5% per month, compounded monthly, or the highest rate
permitted by law on the amount of cash determined to have been due commencing on
the due date determined by the arbitrator through the date of actual payment.

          (c) The right of either Party to terminate the licenses and
     sublicenses granted by such Party under this Agreement pursuant to this
     Section 9.2 shall not be affected in any way by its waiver of, or failure
     to take action with respect to any previous default.

          (d) If the licenses and sublicenses granted by Hybridon to Isis and
     its Subsidiaries under this Agreement are terminated by Hybridon pursuant
     to this Section 9.2, (i) Hybridon shall be entitled to retain the licenses
     granted to it and its Subsidiaries pursuant to Article III, subject to the
     payment obligations of Hybridon specified in the Master Agreement and in
     Article IV, and to continue to receive the stock of Isis issuable to it
     pursuant to Section 2.3 of the Master Agreement, and (ii) the provisions of
     Articles V and VI shall terminate in their entirety. If the licenses and
     sublicenses granted by Isis to Hybridon and its Subsidiaries under this
     Agreement are terminated by Isis pursuant to this Section 9.2, Isis shall
     be entitled to retain the licenses granted to it and its Subsidiaries
     pursuant to Article II, subject to the payment obligations of Isis
     specified in the Master Agreement and in Article IV, and to continue to
     receive the stock of Hybridon issuable to it pursuant to Section 2.2 of the
     Master Agreement.

     Section 9.3 TERMINATION OF SUBLICENSE OF TULLIS PATENTS. Hybridon shall
have the right to terminate the sublicense granted to it and its Subsidiaries
pursuant to Section 3.3 (and the related payment obligations under Section 4.2)
for any reason or no reason at any time upon fifteen (15) days prior written
notice to Isis.

     Section 9.4 SURVIVAL. The expiration or termination of this Agreement for
any reason shall not relieve the Parties of any obligation due and accruing, or
for any liability as to any breach occurring, prior to such expiration or
termination. In addition, the provisions of Section 4.4, Article VII, Article
VIII, Section 9.4, Section 9.5, and Article X shall survive the expiration or
termination of this Agreement.

                                      -31-

<PAGE>   39

     Section 9.5 SUBLICENSE SURVIVAL.

          (a) Notwithstanding the termination of this Agreement or any of the
     licenses or sublicenses granted hereunder pursuant to this Article IX, any
     sublicenses to Isis Intellectual Property and the Tullis Patents granted by
     Hybridon or its Subsidiaries pursuant to Section 3.2 or 3.3(b) hereof prior
     to such termination shall survive such termination. In such event, Isis
     shall have the right to receive directly from the Sublicensee any payments
     or other consideration otherwise payable to Hybridon or its Subsidiaries as
     the sublicensor under such sublicense, and to otherwise exercise all of the
     rights of Hybridon or its Subsidiaries as the sublicensor under such
     sublicense; provided however that Isis shall not assume, and shall not be
     responsible for, any representations, warranties or obligations of Hybridon
     or its Subsidiaries as the sublicensor to any Sublicensees other than the
     licenses under such sublicenses.

          (b) Notwithstanding the termination of this Agreement or any of the
     licenses or sublicenses granted hereunder pursuant to this Article IX, any
     sublicenses of Hybridon Intellectual Property granted by Isis or its
     Subsidiaries pursuant to Section 2.2 hereof prior to such termination shall
     survive such termination. In such event, Hybridon shall have the right to
     receive directly from the Sublicensee any payments or other consideration
     otherwise payable to Isis or its Subsidiaries as the sublicensor, under
     such sublicense and to otherwise exercise all of the rights of Isis or its
     Subsidiaries as the sublicensor under such sublicense; provided however
     that Hybridon shall not assume, and shall not be responsible for, any
     representations, warranties or obligations of Isis or its Subsidiaries as
     the sublicensor to any Sublicensees other than the licenses under such
     sublicenses.

     Section 9.6 FAILURE TO MAKE MASTER AGREEMENT DELIVERIES. Notwithstanding
any provision in this Agreement to the contrary, including without limitation
Article VIII, [*] Hybridon shall have the right, at its sole election, effective
immediately upon written notice to Isis, [*].

                                   ARTICLE X

                            MISCELLANEOUS PROVISIONS
                            ------------------------

     Section 10.1 INDEMNIFICATION. Each Party (the "Indemnifying Party") agrees
to defend the other Party and such other Party's Subsidiaries and their
respective directors, officers, employees and agents (the "Indemnified Parties")
at the Indemnifying Party's cost and expense, and shall indemnify and hold the
Indemnified Parties harmless from and against any losses, costs, damages, fees
or expenses arising out of any third party claim relating to (i) any breach by
the Indemnifying Party of any of its representations, warranties or obligations
pursuant to this Agreement, (ii) provided that the third party is not an
Affiliate of

* Confidential Treatment Requested

                                      -32-

<PAGE>   40

the Indemnified Parties, infringement of such third party's patents resulting
from the exercise by the Indemnifying Party or a Subsidiary or a Sublicensee of
the rights granted by the Indemnified Parties to the Indemnifying Party
hereunder or (iii) product liability resulting from use of a product made, sold
or imported by or for the Indemnifying Party or by or for a Subsidiary or a
Sublicensee under the rights granted by the Indemnified Parties hereunder. In
the event of any claim against the Indemnified Parties by any third party for
which indemnification may be sought pursuant to this Agreement, the Indemnified
Parties shall promptly notify the Indemnifying Party in writing of the claim;
provided that the failure to promptly notify the Indemnifying Party of such
claim shall not result in the loss of rights of indemnification hereunder except
to the extent that the Indemnifying Party was materially prejudiced by such
failure. The Indemnifying Party shall assume, at its sole expense, the defense
of the claim and its settlement. The Indemnified Parties shall cooperate with
the Indemnifying Party and may, at their option and expense, be represented in
any such action or proceeding. The Indemnifying Party shall not be liable for
any litigation costs or expenses incurred by the Indemnified Parties. In
addition, the Indemnifying Party shall not be responsible for the
indemnification of any Indemnified Party arising from any negligent or wrongful
acts by such Indemnified Party, or as the result of any settlement or compromise
by the Indemnified Parties without the Indemnifying Party's prior written
consent. The Indemnifying Party may not settle or compromise any matter without
the consent of the Indemnified Parties unless such settlement or compromise
imposes no obligations on the Indemnified Parties and does not restrict the
rights of the Indemnified Parties.

     Section 10.2 GOVERNING LAW. This Agreement shall be construed and the
respective rights of the Parties determined according to the laws of the State
of Delaware (without regard to the conflict of law rules of any jurisdiction),
except matters of the intellectual property law, which shall be determined in
accordance with the national intellectual property laws relevant of the
intellectual property in question.

     Section 10.3 ASSIGNMENT. Neither Hybridon nor Isis may assign this
Agreement in whole or in part without the consent of the other Party, except if
such assignment occurs in connection with the sale or transfer of all or
substantially all of the business or assets of the assigning Party to which the
subject matters of this Agreement pertains.

     Section 10.4 ENTIRE AGREEMENT; AMENDMENTS. This Agreement, together with
the Master Agreement, constitutes the entire agreement between the Parties with
respect to the subject matter hereof, and supersedes all previous arrangements
with respect to the subject matter hereof, whether written or oral. Any
amendment or modification to this Agreement shall be made in writing signed by
both Parties.

                                      -33-

<PAGE>   41

     Section 10.5 NOTICES.

     Notices to Hybridon shall be addressed to:

                 Hybridon, Inc.
                 345 Vassar Street
                 Cambridge, Massachusetts 02139
                 Attention:  Chief Executive Officer

     with a copy to:

                 Holland and Knight, LLP
                 10 St. James Avenue
                 Boston, Massachusetts 02116
                 Attention:  James Pollock, Esq.

                 And

                 Hale and Dorr LLP
                 60 State Street
                 Boston, MA  02109
                 Attention:  David E. Redlick, Esq.

     Notices to Isis shall be addressed to:

                 Isis Pharmaceuticals, Inc.
                 2292 Faraday Avenue
                 Carlsbad, California 92008
                 Attention:  Chief Executive Officer
                 Copy to:  Executive Vice President

     Any Party may change its address by giving notice to the other Party in the
manner herein provided. Any notice required or provided for by the terms of this
Agreement shall be in writing and shall be (a) delivered personally, (b) sent by
registered or certified mail, return receipt requested, postage prepaid, (c)
sent via a reputable overnight courier service, or (d) sent by facsimile
transmission with an original to be followed the same day via a reputable
overnight courier service, in each case properly addressed in accordance with
the paragraph above. The effective date of notice shall be the actual date of
receipt by the Party receiving the same.

     Section 10.6 FORCE MAJEURE. No failure or omission by a Party in the
performance of any of its obligations of this Agreement shall be deemed a breach
of

                                      -34-

<PAGE>   42

this Agreement or create any liability if the same shall arise from any cause or
causes beyond the control of such Party, including, but not limited to, the
following: acts of God; acts or omissions of any government; any rules,
regulations or orders issued by any governmental authority or by any officer,
department, agency or instrumentality thereof; fire; storm; flood; earthquake;
accident; war; rebellion; insurrection; riot; and invasion and provided that
such failure or omission resulting from one of the above causes is cured as soon
as is practicable after the occurrence of one or more of the above-mentioned
causes.

     Section 10.7 DISCLOSURE OF PROVISIONS OF AGREEMENT.

          (a) Each Party agrees to hold as confidential the terms of this
     Agreement, except that (i) Hybridon may furnish a copy of this Agreement to
     UMass, Isis may furnish a copy of this Agreement to MBI (other than
     Exhibits containing information relating to patent applications of
     Hybridon) and each Party shall have the right to disclose the terms of this
     Agreement (other than the information on the Exhibits hereto relating to
     patent applications of Isis or Hybridon) to potential investors and other
     third parties in connection with financing activities and to potential
     collaborators, provided that any such third party has entered into a
     written obligation with the disclosing Party to treat such information and
     materials as confidential and to not use the information and materials for
     any purposes other than the evaluation of the potential investment or
     collaboration and that the disclosing Party shall enforce against the third
     party recipient of such information and materials, for and on behalf of the
     other Party, such written obligation, and (ii) each Party may furnish a
     copy of this Agreement or disclose the terms of this Agreement if such is
     required to be disclosed by the receiving Party to comply with applicable
     laws, to defend or prosecute litigation or to comply with governmental
     regulations, PROVIDED THAT the receiving Party provides prior written
     notice of such disclosure to the disclosing Party and takes reasonable and
     lawful actions to avoid and/or minimize the degree of such disclosure. At
     the request of the other Party, the disclosing Party shall use commercially
     reasonable efforts to enforce such obligations against such third parties.

          (b) Notwithstanding Section 10.7(a) to the contrary, either Party may
     include this Agreement, in any report, statement or other document filed by
     such Party with the United States Securities and Exchange Commission (the
     "SEC"). In such event, the disclosing Party shall use reasonable efforts to
     obtain, to the extent permitted by law, confidential treatment from the SEC
     of any trade secrets and commercial or financial information of a
     privileged or confidential nature, including without limitation all
     information on the Exhibits hereto relating to patent applications of Isis
     or Hybridon, and shall notify the other Party as to such efforts and all
     related communications with the SEC; provided that

                                      -35-

<PAGE>   43

     notwithstanding the foregoing no Party shall submit a confidentiality
     request or include this Agreement without the prior review and approval of
     the confidentiality request by the other Party, which review and approval
     shall not be unreasonably withheld or delayed.

     Section 10.8 INDEPENDENT CONTRACTORS. It is understood and agreed that the
relationship between the Parties hereunder is that of independent contractors
and that nothing in this Agreement shall be construed as authorization for
either Party to act as agent for the other.

     Section 10.9 NO STRICT CONSTRUCTION. This Agreement has been prepared
jointly and shall not be strictly construed against any Party.

     Section 10.10 HEADINGS. The captions or headings of the Sections or other
subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.

     Section 10.11 NO IMPLIED WAIVERS; RIGHTS CUMULATIVE. No failure on the part
of either Party to exercise, and no delay in exercising, any right, power,
remedy or privilege under this Agreement, or provided by statute or at law or in
equity or otherwise, shall impair, prejudice or constitute a waiver of any such
right, power, remedy or privilege or be construed as a waiver of any breach of
this Agreement or as an acquiescence therein, nor shall any single or partial
exercise of any such right, power, remedy or privilege preclude any other or
further exercise thereof or the exercise of any other right, power, remedy or
privilege. In particular, the Parties hereby agree that termination of the
licenses or sublicenses granted under this Agreement as provided in Article IX
shall not be the exclusive remedy of a Party in the event of a breach of this
Agreement or the Master Agreement by the other Party and that the non-breaching
Party shall be entitled to seek any and all other remedies to which the
non-breaching Party may be entitled at law or in equity.

     Section 10.12 SEVERABILITY. If any provision hereof should be held invalid,
illegal or unenforceable in any respect in any jurisdiction, then, to the
fullest extent permitted by law, (a) all other provisions hereof shall remain in
full force and effect in such jurisdiction and shall be liberally construed in
order to carry out the intentions of the Parties as nearly as may be possible
and (b) such invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of such provision in any other
jurisdiction.

     Section 10.13 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, and all of which counterparts, taken together,
shall constitute one and the same instrument.

                                      -36-

<PAGE>   44

     Section 10.14 NO CONSEQUENTIAL DAMAGES. NEITHER PARTY HERETO WILL BE LIABLE
FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT
OR THE EXERCISE OF ITS RIGHTS HEREUNDER, REGARDLESS OF ANY NOTICE OF SUCH
DAMAGES.

     Section 10.15 PATENT VALIDITY. Notwithstanding anything in this Agreement
to the contrary, neither Party represents and warrants or shall be deemed to
have represented and warranted to the other Party that the Hybridon Intellectual
Property (in the case of Hybridon) and the Isis Intellectual Property and the
Tullis Patents (in the case of Isis) are valid or otherwise enforceable.

                    [Remainder of page intentionally omitted]

                                      -37-

<PAGE>   45

     IN WITNESS WHEREOF, the Parties have executed this License Agreement as of
the Effective Date.

                              ISIS PHARMACEUTICALS, INC.

                              By: /s/ B. Lynne Parshall
                              --------------------------------------------------
                              Name:  B. Lynne Parshall
                                   ---------------------------------------------
                              Title: Executive Vice President
                                    --------------------------------------------

                              HYBRIDON, INC.

                              By: /s/ Sudhir Agrawal
                              --------------------------------------------------
                              NAME:  Sudhir Agrawal
                                   ---------------------------------------------
                              TITLE: President and CSO
                                    --------------------------------------------

                              /s/ Robert Andersen, CFO
                              --------------------------------------------------

                                      -38-

<PAGE>   46

                                   EXHIBIT A

                                      [*]

* Confidential Treatment Requested

<PAGE>   47

                                   EXHIBIT B1

                                      [*]

* Confidential Treatment Requested

<PAGE>   48

                                   EXHIBIT B2

                                      [*]

* Confidential Treatment Requested

<PAGE>   49

                                   EXHIBIT C

                                      [*]

* Confidential Treatment Requested

<PAGE>   50

                                   EXHIBIT D

                                      [*]

* Confidential Treatment Requested

<PAGE>   51

                                   EXHIBIT E

                                      [*]

* Confidential Treatment Requested

<PAGE>   52

                                   EXHIBIT F

                                      [*]

* Confidential Treatment Requested

<PAGE>   53

                                   EXHIBIT G

                                      [*]

* Confidential Treatment Requested

<PAGE>   54

                                   EXHIBIT H-1

                         THIRD PARTY LICENSE AGREEMENTS

Methylgene

AMENDED AND RESTATED LICENSE AGREEMENT MADE EFFECTIVE AS OF JANUARY 4, 1996, AS
AMENDED AND RESTATED ON SEPTEMBER 21, 2000.

Origenix

LICENSE AGREEMENT DATED AS OF JANUARY 22, 1999 BETWEEN HYBRIDON AND ORIGENIX.

Epigenesis

DEVELOPMENT AND LICENSE AGREEMENT BETWEEN EPIGENESIS PHARMACEUTICALS, INC. AND
HYBRIDON, INC., DATED AS OF AUGUST 9, 2000.

Boston Biosystems, Inc. (BBI)

PNT MONOMER PATENT LICENSE AND OPTION AGREEMENT DATED AS OF SEPTEMBER 20, 2000
BY AND BETWEEN HYBRIDON AND BBI.

OLIGONUCLEOTIDE PURIFICATION PATENT LICENSE AGREEMENT DATED AS OF SEPTEMBER 20,
2000 BY AND BETWEEN HYBRIDON AND BBI.

INTERFERENCE PATENT SUBLICENSE OPTION AGREEMENT DATED AS OF SEPTEMBER 20, 2000
BY AND BETWEEN HYBRIDON AND BBI.

                                   EXHIBIT H-2

                            OTHER LICENSE AGREEMENTS

UMass Agreement

LICENSE AGREEMENT DATED AS OF FEBRUARY 21, 1990 AND RESTATED AS OF SEPTEMBER 8,
1993 BY AND BETWEEN HYBRIDON AND UNIVERSITY OF MASSACHUSETTS MEDICAL CENTER
(FORMERLY THE WORCESTER FOUNDATION FOR BIOMEDICAL RESEARCH, INC.)

IDT Agreement

Non-Exclusive License Agreement dated as of March 12, 1999 between Integrated
DNA Technologies, Inc. and Hybridon

<PAGE>   55

                                    EXHIBIT I

                                      [*]

* Confidential Treatment Requested

                                    EXHIBIT J

                                 UMASS AGREEMENT

Incorporated by reference to Exhibit 10.1 to Hybridon's Registration Statement
on Form S-1 (File No. 33-99024)

                                   EXHIBIT K

                                      [*]

* Confidential Treatment Requested

<PAGE>   56

                                   EXHIBIT L

                                      [*]

* Confidential Treatment Requested

<PAGE>   57

                                   EXHIBIT M

                                      [*]

* Confidential Treatment Requested

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