Document:

Exhibit 10.3

 

EXECUTION COPY

 

CONFIDENTIAL TREATMENT
REQUESTED

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

 

 

 

REGISTRATION
RIGHTS AGREEMENT

 

between

 

 

ISIS PHARMACEUTICALS, INC.

 

 

and

 

 

SYMPHONY GENISIS HOLDINGS LLC

 

 

Dated as of
April 7, 2006

 

 

 

 

 

Table of Contents

 

 

	
  Section

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.

  	
   

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.

  	
   

  	
  Registration

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.

  	
   

  	
  Related Obligations

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.

  	
   

  	
  Obligations of the
  Investor(s)

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.

  	
   

  	
  Expenses of
  Registration

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.

  	
   

  	
  Indemnification

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.

  	
   

  	
  Contribution

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.

  	
   

  	
  Reports Under The
  Exchange Act

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.

  	
   

  	
  Assignment of
  Registration Rights

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.

  	
   

  	
  Amendment of
  Registration Rights

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 11.

  	
   

  	
  Miscellaneous

  	
  13

  

 

Exhibit A – Form of Selling Stockholder Questionnaire

 

 

REGISTRATION
RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as
of April 7, 2006, by and between ISIS PHARMACEUTICALS, INC., a Delaware corporation (“Isis”), and
SYMPHONY GENISIS HOLDINGS LLC, a Delaware limited liability company (together
with its permitted successors, assigns and transferees, “Holdings”).

 

RECITALS:

 

WHEREAS, in connection with the
exercise by Isis of the Purchase Option under the Purchase Option Agreement, by
and among Isis, Holdings and Symphony GenIsis, Inc., a Delaware corporation (“Symphony GenIsis”),
of even date herewith (the “Purchase  Option
Agreement”), Isis may elect
to issue shares of Isis’ common stock, par value $0.001 per share (“Isis Common Stock”)
(such shares of Isis Common Stock when and if issued, the “Purchase  Option  Shares”)
to Holdings in partial payment of the Purchase Price in accordance with the
terms of the Purchase Option Agreement;

 

WHEREAS, in connection with the
Warrant Purchase Agreement by and between the parties hereto of even date
herewith (the “Warrant
Purchase Agreement”), Isis has agreed, upon the terms and
subject to the conditions of the Warrant Purchase Agreement, to issue and sell
on the date hereof to Holdings certain warrants (the “Warrants”) which will be exercisable to purchase shares
of Isis Common Stock (such shares of Isis Common Stock as exercised, the “Warrant Shares”) in accordance with the terms of the Warrants;
and

 

WHEREAS, to induce Holdings to
execute and deliver the Purchase Option Agreement and the Warrant Purchase
Agreement, Isis has agreed to provide certain registration rights under the
Securities Act of 1933, as amended (the “Securities  Act”),
and applicable state securities laws with respect to the Purchase Option
Shares;

 

NOW, THEREFORE, in consideration of
the premises and the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Isis and Holdings (the “Parties”) hereby agree as follows:

 

Section 1.               Definitions.

 

(a)           Capitalized
terms used but not defined herein are used as defined in the Purchase Option
Agreement (including Annex A thereto).

 

(b)           As
used in this Agreement, the following terms shall have the following meanings:

 

(i)            “Effective  Registration  Date” means the date that the Registration Statement (as
defined below) is first declared effective by the SEC.

 

(ii)           “Investor(s)” means
Holdings, any transferee or assignee thereof to whom Holdings assigns its
rights under this Agreement and who agrees to become bound by the provisions of
this Agreement in accordance with Section 9 and any transferee or
assignee

 

1

 

thereof to
whom a transferee or assignee assigns its rights under this Agreement and who
agrees to become bound by the provisions of this Agreement in accordance with Section
9.

 

(iii)          “Purchase  Option Related Registrable Securities”
means (i) the Purchase Option Shares, and (ii) any Isis Common Stock issued with
respect to the Purchase Option Shares as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise.

 

(iv)          “register,” “registered,” and “registration” refer
to a registration effected by preparing and filing one or more Registration
Statements in compliance with the Securities Act and pursuant to Rule 415, and
the declaration or ordering of effectiveness of such Registration Statement(s)
by the SEC.

 

(v)           “Registrable  Securities” means, collectively, the
Warrant Related Registrable Securities and the Purchase Option Related
Registrable Securities; provided, however, that such securities
will cease to be Registrable Securities on the earlier of (A) the date as of
which the Investor(s) may sell such securities without restriction pursuant to
Rule 144(k) (or successor thereto) promulgated under the Securities Act, or (B)
the date on which the Investor(s) shall have sold all such securities.

 

(vi)          “Registration Statement”
means a registration statement or registration statements of Isis filed under
the Securities Act covering the Registrable Securities.

 

(vii)         “Rule 144” has the meaning set
forth in Section 8 of this Agreement.

 

(viii)        “Rule 415” means Rule
415 under the Securities Act or any successor rule providing for offering
securities on a continuous or delayed basis.

 

(ix)           “Warrant Related Registrable Securities”
means (i) the Warrant Shares issued or issuable upon exercise of the Warrants;
and (ii) any shares of capital stock issued or issuable with respect to the
Warrant Shares or the Warrants as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, and in the case of
the Warrants, without regard to any limitations on exercise.

 

Section 2.               Registration.

 

(a)           Right
to Registration.

 

(i)            Purchase
Option Related Registration.  In the
event Isis elects to exercise the Purchase Option as set forth in the Purchase
Option Agreement, and in so doing elects to issue Purchase Option Related
Registrable Securities, Isis shall prepare and, in accordance with Section
2(a)(ii)(A) of the Purchase Option Agreement, file with the SEC a Registration
Statement on Form S-3 covering the resale of the Purchase Option Related
Registrable Securities.  The Registration
Statement prepared pursuant hereto shall register for resale that number of
shares of Isis Common Stock equal to the number of Purchase Option Related
Registrable Securities as would be issued pursuant to the terms of the Purchase
Option Agreement.  Isis shall use
commercially reasonable efforts to

 

2

 

have the
Registration Statement declared effective by the SEC as soon as practicable
following the Purchase Option Exercise Date.

 

(ii)           Warrant
Related Registration.  Isis shall
prepare, and, as soon as practicable but in no event later than [***] days
after the Closing Date, file with the SEC a Registration Statement on Form S-3
covering the resale of all of the Warrant Related Registrable Securities.  The Registration Statement prepared pursuant
hereto shall register for resale at least that number of shares of Isis Common
Stock equal to the number of Warrant Related Registrable Securities as of the
trading day immediately preceding the date the Registration Statement is
initially filed with the SEC, subject to adjustment as provided in Section
2(c).  Isis shall use commercially
reasonable efforts to have the Registration Statement declared effective by the
SEC as soon as practicable following the Closing Date.

 

(b)           Ineligibility
for Form S-3.  In the event that Form
S-3 is not available for the registration of the resale of Registrable
Securities hereunder, Isis shall (i) 
register the resale of the Registrable Securities on another appropriate
form reasonably acceptable to Holdings (which acceptable forms shall include
Form S-1) (in the case of the resale of Purchase Option Related Registrable
Securities, in accordance with Section 2(a)(ii)(A) of the Purchase Option
Agreement); and (ii) undertake to register the Registrable Securities on Form
S-3 as soon as such form is available; provided that Isis shall maintain
the effectiveness of the Registration Statement then in effect until such time
as a Registration Statement on Form S-3 covering the Registrable Securities has
been declared effective by the SEC.

 

(c)           Sufficient
Number of Shares Registered.  In the
event the number of shares available under a Registration Statement filed
pursuant to Section 2(a) is insufficient to cover all of the Registrable
Securities required to be covered by such Registration Statement, Isis shall
amend the applicable Registration Statement, or file a new Registration
Statement (on the short form available therefor, if applicable), or both, so as
to cover at least 100% of the number of such Registrable Securities as of the
trading day immediately preceding the date of the filing of such amendment or
new Registration Statement, in each case, as soon as practicable, but in any
event not later than fifteen (15) days after Isis becomes aware of the
necessity therefor.  Isis shall use
commercially reasonable efforts to cause such amendment and/or new Registration
Statement to become effective as soon as practicable following the filing
thereof.  For purposes of the foregoing
provision, the number of shares available under a Registration Statement shall
be deemed “insufficient to cover all of the Registrable Securities” if at any
time the number of shares of Isis Common Stock available for resale under such
Registration Statement is less than the number of Registrable Securities.  The calculation set forth in the foregoing
sentence shall be made without regard to any limitations on the exercise of the
Warrants and such calculation shall assume that the Warrants are then exercisable
into shares of Isis Common Stock.

 

Section 3.               Related
Obligations.  At such time as Isis is
obligated to file a Registration Statement with the SEC pursuant to Section
2(a), 2(b) or 2(c), Isis will use commercially reasonable
efforts to effect the registration of the Registrable Securities in accordance
with the intended method of disposition thereof and, pursuant thereto (except
at such times as Isis may be required to suspend the use of a prospectus
forming a part of the Registration Statement pursuant to Section 3(l),
at which time Isis’ obligations under Sections 3(a), (b), (c),
(d), (i) and (k) may also be suspended, as required), Isis
shall have the following 

 

3

 

obligations:

 

(a)           Isis
shall keep each Registration Statement effective pursuant to Rule 415 at all
times until the earlier of (i) the date as of which the Investor(s) may sell
all of the Registrable Securities covered by such Registration Statement
without restriction pursuant to Rule 144(k) (or successor thereto) promulgated
under the Securities Act, or (ii) the date on which the Investor(s) shall have
sold all the Registrable Securities covered by such Registration Statement (the
“Registration
Period”).

 

(b)           Isis
shall prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to a Registration Statement and the prospectus used
in connection with such Registration Statement as may be necessary to keep such
Registration Statement effective at all times during the Registration Period,
and, during such period, comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities of Isis covered by
such Registration Statement until such time as all of such Registrable
Securities shall have been disposed of in accordance with the intended methods
of disposition by the seller or sellers thereof as set forth in such
Registration Statement.  In the case of
amendments and supplements to a Registration Statement which are required to be
filed pursuant to this Agreement (including pursuant to this Section 3(b))
by reason of Isis filing a report on Form 10-K, Form 10-Q or Form 8-K or any
analogous report under the Exchange Act, Isis shall have incorporated such
report by reference into such Registration Statement, if applicable, or shall
file such amendments or supplements with the SEC on the same day on which the
Exchange Act report is filed which created the requirement for Isis to amend or
supplement such Registration Statement.

 

(c)           Isis
shall furnish to each Investor whose Registrable Securities are included in any
Registration Statement, without charge, (i) promptly after the same is prepared
and filed with the SEC, at least one copy of such Registration Statement and
any amendment(s) thereto, including financial statements and schedules, and
each preliminary prospectus; (ii) upon the effectiveness of any Registration
Statement, ten (10) copies of the prospectus included in such Registration
Statement and all amendments and supplements thereto (or such other number of
copies as such Investor may reasonably request); and (iii) such other
documents, including copies of any preliminary or final prospectus, as such
Investor may reasonably request from time to time in order to facilitate the
disposition of the Registrable Securities owned by such Investor.

 

(d)           Isis
shall use commercially reasonable efforts to (i) register and qualify, unless
an exemption from registration and qualification applies, the resale by
Investor(s) of the Registrable Securities covered by a Registration Statement
under such other securities or “blue sky” laws of such jurisdictions in the
United States as Investor(s) reasonably request; (ii) prepare and file in those
jurisdictions such amendments (including post-effective amendments) and supplements
to such registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period; and (iii) take such other
actions as may be necessary to maintain such registrations and qualifications
in effect at all times during the Registration Period; provided, however,
that Isis shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (y) subject
itself to general taxation in any such jurisdiction, or (z) file a general
consent to service of process in any such jurisdiction.  Isis shall promptly notify each Investor who
holds Registrable Securities of the receipt by Isis of

 

4

 

any notification with respect to the
suspension of the registration or qualification of any of the Registrable
Securities for sale under the securities or “blue sky” laws of any jurisdiction
in the United States or its receipt of actual notice of the initiation or
threatening of any proceeding for such purpose.

 

(e)           Isis
shall notify each Investor in writing of the happening of any event, as
promptly as practicable after becoming aware of such event, as a result of
which the prospectus included in a Registration Statement, as then in effect,
includes an untrue statement of a material fact or omission to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and, subject to Section 3(l) hereof, promptly prepare a supplement or
amendment to such Registration Statement to correct such untrue statement or
omission.  Isis shall also promptly notify
each Investor in writing when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when a Registration Statement or
any post-effective amendment has become effective.

 

(f)            Isis
shall use commercially reasonable efforts to prevent the issuance of any stop
order or other suspension of effectiveness of a Registration Statement, or the
suspension of the qualification of any of the Registrable Securities for sale
in any jurisdiction and, if such an order or suspension is issued, to obtain
the withdrawal of such order or suspension at the earliest possible moment.

 

(g)           In
the event that any Investor is deemed to be an “underwriter” with respect to
the Registrable Securities, upon the written request of such Investor in connection
with such Investor’s due diligence requirements, if any, Isis shall make
available for inspection by (i) such Investor, and (ii) any legal counsel,
accountants or other agents retained by the Investor (collectively, “Inspectors”), all
pertinent financial and other records, and pertinent corporate documents and
properties of Isis (collectively, “Records”), as shall be reasonably deemed
necessary by each Inspector, and cause Isis’ officers, directors and employees
to supply all information which any Inspector may reasonably request; provided,
however, that each Inspector and such Investor shall agree in writing to
hold in strict confidence and shall not make any disclosure (except with
respect to an Inspector, to the relevant Investor) or use of any Record or
other information which Isis determines in good faith to be confidential, and
of which determination the Inspectors are so notified, unless the release of
such Records is ordered pursuant to a final, non-appealable subpoena or order
from a court or government body of competent jurisdiction.  Each Investor agrees that it shall, upon
learning that disclosure of such Records is required or is sought in or by a
court or governmental body of competent jurisdiction or through other means,
give prompt notice to Isis and allow Isis, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential. 
Nothing herein (or in any other confidentiality agreement between Isis
and any Investor) shall be deemed to limit the Investor(s)’ ability to sell
Registrable Securities in a manner which is otherwise consistent with
applicable laws and regulations.

 

(h)           Isis
shall hold in confidence and not make any disclosure of information concerning an
Investor provided to Isis unless (i) disclosure of such information is
necessary to comply with federal or state securities laws or the rules of any
securities exchange or trading market on which the Isis Common Stock is listed
or traded, (ii) the disclosure of such information is necessary to avoid or
correct a misstatement or omission in any Registration

 

5

 

Statement, or (iii) the release of such
information is ordered pursuant to a subpoena or other final, non-appealable
order from a court or governmental body of competent jurisdiction.  Isis agrees that it shall, upon learning that
disclosure of such information concerning an Investor is sought in or by a
court or governmental body of competent jurisdiction or through other means,
give prompt written notice to such Investor and allow such Investor, at the
Investor’s expense, to undertake appropriate action to prevent disclosure of,
or to obtain a protective order for, such information.

 

(i)            Isis
shall use commercially reasonable efforts either to (i) cause all the
Registrable Securities covered by a Registration Statement to be listed on each
securities exchange on which securities of the same class or series issued by
Isis are then listed, if any, if the listing of such Registrable Securities is
then permitted under the rules of such exchange, or (ii) secure designation and
quotation of all the Registrable Securities covered by a Registration Statement
on the NASDAQ National Market.  Isis
shall pay all fees and expenses in connection with satisfying its obligation
under this Section 3(i).

 

(j)            Isis
shall cooperate with the Investor(s) who hold Registrable Securities being
offered and, to the extent applicable, facilitate the timely preparation and
delivery of certificates representing the Registrable Securities to be offered
pursuant to a Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the Investor(s) may reasonably
request and registered in such names as the Investor(s) may request.

 

(k)           If
requested by an Investor, Isis shall (i) as soon as practicable incorporate in
a prospectus supplement or post-effective amendment such information as an
Investor reasonably requests to be included therein relating to the sale and
distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being offered
or sold, the purchase price being paid therefor and any other terms of the offering
of the Registrable Securities to be sold in such offering and (ii) as soon as
practicable make all required filings of such prospectus supplement or
post-effective amendment after being notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment.

 

(l)            Notwithstanding
anything to the contrary herein, at any time after the Registration Statement
has been declared effective by the SEC, Isis may delay the disclosure of
material, non-public information concerning Isis the disclosure of which at the
time is not, in the good faith opinion of Isis, in the best interest of Isis (a
“Grace Period”);
provided, that Isis shall promptly notify the Investor(s) in writing of
the existence of a Grace Period in conformity with the provisions of this Section
3(l) and the date on which the Grace Period will begin (such notice, a “Commencement Notice”);
and, provided  further, that no Grace Period shall exceed [***]
days during any [***] day period and during any [***] day period such Grace
Periods shall not exceed an aggregate of [***] days.  For purposes of determining the length of a
Grace Period above, the Grace Period shall begin on and include the date
specified by Isis in the Commencement Notice and shall end on and include the date
the Investor(s) receive written notice of the termination of the Grace Period
by Isis (which notice may be contained in the Commencement Notice).  The provisions of Section 3(f) hereof
shall not be applicable during any Grace Period.  Upon expiration of the Grace Period, Isis
shall again be bound by the first sentence of Section 3(e) with respect
to the information giving rise thereto unless such material,

 

6

 

non-public information is no longer
applicable.  Notwithstanding anything to
the contrary, Isis shall cause its transfer agent to deliver unlegended shares
of Isis Common Stock to a transferee of an Investor in accordance with the
terms of the Warrant Purchase Agreement in connection with any sale of Registrable
Securities with respect to which an Investor has entered into a contract for
sale, and delivered a copy of the prospectus included as part of the applicable
Registration Statement, prior to the Investor’s receipt of the notice of a
Grace Period and for which the Investor has not yet settled.

 

Section 4.               Obligations
of the Investor(s).

 

(a)           At
least [***] Business Days prior to the first anticipated filing date of a
Registration Statement, Isis shall notify each Investor in writing of the
information Isis requires from each such Investor if such Investor elects to
have any of such Investor’s Registrable Securities included in such
Registration Statement and provide each such Investor with a copy of Isis’
then-current selling stockholder questionnaire (a copy of which is attached
hereto as Exhibit A hereto, a “Selling Stockholder Questionnaire”).  It shall be a condition precedent to the
obligations of Isis to complete the registration pursuant to this Agreement
with respect to the Registrable Securities of a particular Investor that such
Investor shall furnish to Isis a completed Selling Stockholder Questionnaire,
along with such other information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable Securities
held by it as may reasonably be required to effect the effectiveness of the
registration of such Registrable Securities, and shall execute other such
documents in connection with such registration as Isis may reasonably request.

 

(b)           Each
Investor, by such Investor’s acceptance of the Registrable Securities, agrees
to cooperate with Isis as reasonably requested by Isis in connection with the
preparation and filing of any Registration Statement hereunder, unless such
Investor has notified Isis in writing of such Investor’s election to exclude
all of such Investor’s Registrable Securities from such Registration Statement.

 

(c)           Each
Investor agrees that, upon receipt of any notice from Isis of the happening of
any event of the kind described in Section 3(f) or the first sentence of
Section 3(e), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until such Investor’s receipt of the copies of the
supplemented or amended prospectus contemplated by the second sentence of Section
3(e) or receipt of notice that no supplement or amendment is required.

 

(d)           Each
Investor covenants and agrees that it will comply with any applicable
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to a Registration
Statement.

 

Section 5.               Expenses
of Registration.  All reasonable
expenses, other than underwriting discounts and commissions, incurred in
connection with registrations, filings or qualifications pursuant to Sections
2 and 3 hereof, including, without limitation, all registration,
listing and qualifications fees, printers and accounting fees, and fees and
disbursements of counsel for Isis shall be paid by Isis.  All underwriting discounts and selling
commissions applicable to the sale of the Registrable Securities shall be paid
by the Investor(s), provided, however, that Isis shall reimburse
the Investor(s) for the reasonable actual fees and

 

7

 

disbursements of one legal counsel designated
by the holders of at least a majority of the Registrable Securities in
connection with registration, filing or qualification pursuant to Sections 2
and 3 of this Agreement, which amount shall be limited to [***] in total
over the term of this Agreement.

 

Section 6.               Indemnification.  In the event any Registrable Securities are
included in a Registration Statement under this Agreement:

 

(a)           To
the fullest extent permitted by law, Isis will, and hereby does, indemnify and
hold harmless each Investor, the directors, officers, partners, members,
employees, agents, representatives of, and each Person, if any, who controls
any Investor within the meaning of the Securities Act or the Exchange Act
(each, an “Investor
Indemnified Person”), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’
fees, amounts paid in settlement or expenses, joint or several with an
aggregate value of at least [***] (as determined by the applicable Indemnified
Parties acting in good faith), (collectively, “Claims”), incurred in investigating,
preparing or defending any action, claim, suit, inquiry, proceeding,
investigation or appeal taken from the foregoing by or before any court or
governmental, administrative or other regulatory agency, body or the SEC,
whether pending or threatened, whether or not an Indemnified Person is or may
be a party thereto (“Indemnified
Damages”), to which any of them may become subject to the extent
that such Claims (or actions or proceedings, whether commenced or threatened,
in respect thereof) arise out of or are based upon:  (i) any untrue statement or alleged untrue
statement of a material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the qualification of
the offering under the securities or other “blue sky” laws of any jurisdiction
in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the Effective Registration Date of such
Registration Statement, or contained in the final prospectus (as amended or
supplemented, if Isis files any amendment thereof or supplement thereto with the
SEC) or the omission or alleged omission to state therein any material fact
necessary to make the statements made therein, in the light of the
circumstances under which the statements therein were made, not misleading;
(iii) any violation or alleged violation by Isis of any federal, state or
common law, rule or regulation applicable to Isis in connection with any
Registration Statement, prospectus or any preliminary prospectus, any amendment
or supplement thereto, or the issuance of 
any Registrable Securities to Holdings; or (iv) any material violation
of this Agreement (the matters in the foregoing clauses (i) through (iv)
being, collectively, “Violations”).  Subject to Section 6(c), Isis shall
reimburse the Investor Indemnified Persons, promptly as such expenses are
incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any
such Claim.  Notwithstanding anything to
the contrary contained herein, the indemnification agreement contained in this Section
6(a):  (A) shall not apply to a Claim
by an Investor Indemnified Person arising out of or based upon a Violation that
occurs in reliance upon and in conformity with information furnished in writing
to Isis by or on behalf of any such Investor Indemnified Person expressly for
use in connection with the preparation of the Registration Statement or any
such amendment thereof or supplement thereto if such information was timely
made available by Isis pursuant to Section 3(c); (B) with respect to any
preliminary prospectus, shall not inure to the benefit of any such Person from
whom the Person asserting any such Claim purchased the Registrable Securities
that are the

 

8

 

subject thereof (or to the benefit of any
Person controlling such Person) if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected in the prospectus,
as then amended or supplemented, if such prospectus was timely made available
by Isis pursuant to Section 3(d), and the Investor Indemnified Person
was promptly advised in writing not to use the incorrect prospectus prior to
the use giving rise to a violation and such Investor Indemnified Person,
notwithstanding such advice, used it or failed to deliver the correct
prospectus as required by the Securities Act and such correct prospectus was
timely made available pursuant to Section 3(d); (C) shall not be
available to the extent such Claim is based on a failure of the Investor
Indemnified Person to deliver or to cause to be delivered the prospectus made
available by Isis, including a corrected prospectus, if such prospectus or
corrected prospectus was timely made available by Isis pursuant to Section
3(d); and (D) shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of Isis, which
consent shall not be unreasonably withheld or delayed.  Such indemnity shall remain full force and
effect regardless of any investigation made by or on behalf of the Investor
Indemnified Person and shall survive the transfer of the Registrable Securities
by the Investor(s) pursuant to Section 9.

 

(b)           In
connection with any Registration Statement in which an Investor is participating,
each such Investor agrees to severally and not jointly indemnify, and hold
harmless, to the same extent and in the same manner as is set forth in Section
6(a), Isis, each of its directors, each of its officers who signs the
Registration Statement, each Person, if any, who controls Isis within the
meaning of the Securities Act or the Exchange Act, and Isis’ general counsel to
the extent that such counsel delivers one or more legal opinions in conjunction
with the preparation and filing of the Registration Statement (each, a “Company Indemnified Person”),
against any Claim or Indemnified Damages to which any of them may become
subject, under the Securities Act, the Exchange Act or otherwise, insofar as
such Claim or Indemnified Damages arise out of or are based upon any Violation,
in each case to the extent, and only to the extent, that such Violation occurs
in reliance upon and in conformity with written information furnished to Isis
by such Investor expressly for use in connection with such Registration Statement;
and, subject to Section 6(d), such Investor will reimburse, promptly as
such expenses are incurred and are due and payable, any legal or other expenses
reasonably incurred by a Company Indemnified Person in connection with
investigating or defending any such Claim; provided, however,
that the indemnity agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent shall not be
unreasonably withheld or delayed; provided, further, however,
that an Investor shall be liable under this Section 6(b) for only that
amount of a Claim or Indemnified Damages as does not exceed the net proceeds to
such Investor as a result of the sale of Registrable Securities pursuant to
such Registration Statement.  Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Company Indemnified Person and shall survive the
transfer of the Registrable Securities by the Investor(s) pursuant to Section
9.  Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this Section
6(b) with respect to any preliminary prospectus shall not inure to the
benefit of any Company Indemnified Person if the untrue statement or omission
of material fact contained in the preliminary prospectus was corrected on a
timely basis in the prospectus, as then amended or supplemented.

 

(c)           If
either an Investor Indemnified Person or a Company Indemnified

 

9

 

Person (an “Indemnified Person”) proposes to
assert a right to be indemnified under this Section 6, such Indemnified
Person shall notify either Isis or the relevant Investor(s), as applicable (the
“Indemnifying Person”),
promptly after receipt of notice of commencement of any action, suit or
proceeding against such Indemnified Person (an “Indemnified Proceeding”) in respect of
which a Claim is to be made under this Section 6, or the incurrence or
realization of any Indemnified Damages in respect of which a Claim is to be
made under this Section 6, of the commencement of such Indemnified
Proceeding or of such incurrence or realization, enclosing a copy of all
relevant documents, including all papers served and claims made, but the
omission to so notify the applicable Indemnifying Person promptly of any such
Indemnified Proceeding or incurrence or realization shall not relieve
(x) such Indemnifying Person from any liability that it may have to such
Indemnified Person under this Section 6 or otherwise, except, as to such
Indemnifying Person’s liability under this Section 6, to the extent, but
only to the extent, that such Indemnifying Person shall have been prejudiced by
such omission, or (y) any other Indemnifying Person from liability that it
may have to any Indemnified Person under the Operative Documents.

 

(d)           In
case any Indemnified Proceeding shall be brought against any Indemnified Person
and it shall notify the applicable Indemnifying Person of the commencement
thereof as provided by Section 6(c) and such Indemnifying Person shall
be entitled to participate in, and provided such Indemnified Proceeding involves
a claim solely for money damages and does not seek an injunction or other
equitable relief against the Indemnified Person and is not a criminal or
regulatory action, to assume the defense of, such Indemnified Proceeding with
counsel reasonably satisfactory to such Indemnified Person, and after notice
from such Indemnifying Person to such Indemnified Person of such Indemnifying
Person’s election so to assume the defense thereof and the failure by such
Indemnified Person to object to such counsel within ten (10) Business Days
following its receipt of such notice, such Indemnifying Person shall not be
liable to such Indemnified Person for legal or other expenses related to such
Indemnified Proceedings incurred after such notice of election to assume such
defense except as provided below and except for the reasonable costs of
investigating, monitoring or cooperating in such defense subsequently incurred
by such Indemnified Person reasonably necessary in connection with the defense
thereof.  Such Indemnified Person shall
have the right to employ its counsel in any such Indemnified Proceeding, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Person unless:

 

(i)            the
employment of counsel by such Indemnified Person at the expense of the
applicable Indemnifying Person has been authorized in writing by such
Indemnifying Person;

 

(ii)           such
Indemnified Person shall have reasonably concluded in its good faith (which
conclusion shall be determinative unless a court determines that such conclusion
was not reached reasonably and in good faith) that there is or may be a
conflict of interest between the applicable Indemnifying Person and such
Indemnified Person in the conduct of the defense of such Indemnified Proceeding
or that there are or may be one or more different or additional defenses,
claims, counterclaims, or causes of action available to such Indemnified Person
(it being agreed that in any case referred to in this clause (ii) such
Indemnifying Person shall not have the right to direct the defense of such
Indemnified Proceeding on behalf of the Indemnified Person);

 

10

 

(iii)          the
applicable Indemnifying Person shall not have employed counsel reasonably
acceptable to the Indemnified Person, to assume the defense of such Indemnified
Proceeding within a reasonable time after notice of the commencement thereof; provided, however, that (A) this clause
(iii) shall not be deemed to constitute a waiver of any conflict of
interest that may arise with respect to any such counsel, and (B) an
Indemnified Person may not invoke this clause (iii) if such Indemnified
Person failed to timely object to such counsel pursuant to the first paragraph
of this Section 6(d) above (it being agreed that in any case referred to
in this clause (iii) such Indemnifying Party shall not have the right to
direct the defense of such Indemnified Proceeding on behalf of the Indemnified
Party); or

 

(iv)          any
counsel employed by the applicable Indemnifying Person shall fail to timely
commence or reasonably conduct the defense of such Indemnified Proceeding, and
such failure has prejudiced (or is in immediate danger of prejudicing) the
outcome of such Indemnified Proceeding (it being agreed that in any case
referred to in this clause (iv) such Indemnifying Party shall not have
the right to direct the defense of such Indemnified Proceeding on behalf of the
Indemnified Party);

 

in each of which cases the fees and expenses of
counsel for such Indemnified Person shall be at the expense of such
Indemnifying Person.  Only one counsel
shall be retained by all Indemnified Persons with respect to any Indemnified
Proceeding, unless counsel for any Indemnified Person reasonably concludes in
good faith (which conclusion shall be determinative unless a court determines
that such conclusion was not reached reasonably and in good faith) that there
is or may be a conflict of interest between such Indemnified Person and one or
more other Indemnified Persons in the conduct of the defense of such Indemnified
Proceeding or that there are or may be one or more different or additional
defenses, claims, counterclaims, or causes or action available to such
Indemnified Person.

 

(e)           Without
the prior written consent of such Indemnified Person, such Indemnifying Person
shall not settle or compromise, or consent to the entry of any judgment in, any
pending or threatened Indemnified Proceeding, unless such settlement,
compromise, consent or related judgment (i) includes an unconditional
release of such Indemnified Person from all liability for Losses arising out of
such claim, action, investigation, suit or other legal proceeding,
(ii) provides for the payment of money damages as the sole relief for the
claimant (whether at law or in equity), (iii) involves no finding or
admission of any violation of law or the rights of any Person by the
Indemnified Person, and (iv) is not in the nature of a criminal or regulatory
action.  No Indemnified Person shall or
compromise, or consent to the entry of any judgment in, any pending or
threatened Indemnified Proceeding (A) in respect of which any payment would
result hereunder or under any other Operative Document, (B)  which includes an injunction that will
adversely affect any Indemnifying Person, (C) which involves a finding or
admission of any violation of law or the rights of any Indemnifying Person, or
(D) which is in the nature of a criminal or regulatory action, without the
prior written consent of the Indemnifying Person, such consent not to be
unreasonably conditioned, withheld or delayed.

 

(f)            The
indemnification required by this Section 6 shall be made by periodic
payments of the amount of Claims during the course of the investigation or
defense, as and when Indemnified Damages are incurred.

 

11

 

Section 7.               Contribution.  To the extent any indemnification by an Indemnifying
Person is prohibited or limited by law, such Indemnifying Person agrees to make
the maximum contribution with respect to any amounts for which it would
otherwise be liable under Section 6 to the fullest extent permitted by
law; provided, however, that: 
(i) no Person involved in the sale of Registrable Securities which
Person is guilty of fraudulent misrepresentation (within the meaning Section
11(f) of the Securities Act) in connection with such sale shall be entitled to
contribution from any Person involved in such sale of Registrable Securities
who was not guilty of fraudulent misrepresentation; and (ii) contribution by
any seller of Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such Registrable
Securities pursuant to such Registration Statement.

 

Section 8.               Reports
Under The Exchange Act.  With a view
to making available to the Investor(s) the benefits of Rule 144 promulgated
under the Securities Act or any other similar rule or regulation of the SEC
that may at any time permit the Investor(s) to sell securities of Isis to the
public without registration (“Rule 144”), Isis agrees to use commercially reasonable
efforts to:

 

(a)           make
and keep public information available, as those terms are understood and
defined in Rule 144;

 

(b)           file
with the SEC in a timely manner all reports and other documents required of
Isis under the Securities Act and the Exchange Act so long as Isis remains
subject to such requirements and the filing of such reports and other documents
is required for the applicable provisions of Rule 144; and

 

(c)           furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by Isis, if true,
that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, (ii) a copy of the most recent annual or
quarterly report of Isis and such other reports and documents so filed by Isis,
and (iii) such other information as may be reasonably requested to permit the
Investor(s) to sell such securities pursuant to Rule 144 without registration.

 

Section 9.               Assignment
of Registration Rights.  The rights
under this Agreement with respect to the Warrant Related Registrable Securities
shall be automatically assignable by the Investor(s) to any transferee of all
or at least [***] shares of such Investor’s Registrable Securities (or if an
Investor shall hold less than [***] such shares, then a transfer of all such
shares) if: (i) the Investor agrees in writing with the transferee or assignee
to assign such rights, and a copy of such agreement is furnished to Isis within
a reasonable time after such assignment; (ii) Isis is, within a reasonable time
after such transfer or assignment, furnished with written notice of (A) the
name and address of such transferee or assignee, and (B) the securities with
respect to which such registration rights are being transferred or assigned;
(iii) immediately following such transfer or assignment the further disposition
of such securities by the transferee or assignee is restricted under the
Securities Act and applicable state securities laws; (iv) at or before the time
Isis receives the written notice contemplated by clause (ii) of this
sentence the transferee or assignee agrees in writing with Isis to be bound by
all of the provisions contained herein and has provided Isis with a completed
Selling Stockholder Questionnaire; and (v) such transfer shall have been made
in accordance with the applicable transfer requirements set forth in Article
VI  of the Warrant Purchase
Agreement.

 

12

 

Section 10.             Amendment.

 

(a)           The
terms of this Agreement shall not be altered, modified, amended, waived or
supplemented in any manner whatsoever except by a written instrument signed by
each of (i) Isis and (ii) Investor(s) holding a majority of the Registrable
Securities (other than in the case of any alteration, modification, amendment,
waiver or supplement which affects any individual Investor in a manner that is
less favorable or more detrimental to such Investor than to the other
Investor(s) solely based on the face of such alteration, modification,
amendment, waiver or supplement and without regard to the number of Registrable
Securities held by such Investor, in which case, such alteration, modification,
amendment, waiver or supplement must also be approved by such less favorably or
more detrimentally treated Investor).

 

(b)           Notwithstanding
Section 10(a), any party hereto may waive, solely with respect to
itself, any one or more of its rights hereunder without the consent of any
other party hereto; provided that no such waiver shall be effective
unless set forth in a written instrument executed by the party against whom
such waiver is to be effective.

 

Section 11.             Miscellaneous.

 

(a)           A
Person is deemed to be a holder of Registrable Securities whenever such Person
owns or is deemed to own of record such Registrable Securities.  If Isis receives conflicting instructions,
notices or elections from two or more Persons with respect to the same
Registrable Securities, Isis shall act upon the basis of instructions, notice
or election received from the such record owner of such Registrable Securities.

 

(b)           Any
notice, request, demand, waiver, consent, approval or other communication which
is required or permitted to be given to any party hereto shall be in writing
and shall be deemed given only if delivered to the party personally or sent to
the party by facsimile transmission (promptly followed by a hard-copy delivered
in accordance with this Section 11(b)), by next Business Day delivery by
a nationally recognized courier service, or by registered or certified mail
(return receipt requested), with postage and registration or certification fees
thereon prepaid, addressed to the party at its address set forth below:

 

If to Isis:

 

Isis
Pharmaceuticals, Inc. 

1896 Rutherford Road

Carlsbad, CA
92008-7208

Attn: B. Lynne
Parshall

Fax: (760)
603-4652

 

with a copy to:

 

Isis
Pharmaceuticals, Inc. 

1896 Rutherford Road

Carlsbad, CA
92008-7208

Attn: General
Counsel

Fax: (760)
268-4922

 

13

 

If to Holdings:

 

Symphony GenIsis Holdings
LLC

7361 Calhoun Place, Suite 325

Rockville, MD 20850

Attn: Joseph P. Clancy

Facsimile: (301)
762-6154

 

with a copy to:

 

Symphony Capital
Partners, L.P.

875 Third Avenue, 18th
Floor

New York, NY 10022

Facsimile:  (212) 632-5401

 

and

 

Symphony Strategic
Partners, LLC

875 Third Avenue, 18th
Floor

New York, NY 10022

Facsimile:  (212) 632-5401

 

or to such other address as such party may from time to time specify by
notice given in the manner provided herein to each other party entitled to receive
notice hereunder.

 

(c)           This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York; except
to the extent that this Agreement pertains to the internal governance of
Holdings, and to such extent this Agreement shall be governed and construed in
accordance with the laws of the State of Delaware.

 

(d)           Each
of the parties hereto hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court, any Delaware State court or federal court of the United States of
America sitting in The City of New York, Borough of Manhattan or Wilmington,
Delaware, and any appellate court from any jurisdiction thereof, in any action
or proceeding arising out of or relating to this Agreement, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in any such New York State
court, any such Delaware State court or, to the fullest extent permitted by
law, in such federal court.  Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any
right that any party hereto may otherwise have to bring any action or
proceeding relating to this Agreement.

 

(e)           Each
of the parties hereto irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement in any New York State or federal court, or
any Delaware State or Federal court.

 

14

 

Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.  Each of the parties hereby consent to service
of process by mail.

 

(f)            WAIVER
OF JURY TRIAL.  EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THIS AGREEMENT.

 

(g)           Entire
Agreement.  This Agreement (including any Annexes,
Schedules, Exhibits or other attachments hereto) constitutes the entire
agreement between the parties hereto with respect to the matters covered hereby
and supersedes all prior agreements and understandings with respect to such
matters between the parties hereto.

 

(h)           Successors;
Assignment; Counterparts.

 

(i)            Nothing
expressed or implied herein is intended or shall be construed to confer upon or
to give to any Person, other than the parties hereto, any right, remedy or
claim under or by reason of this Agreement or of any term, covenant or
condition hereof, and all the terms, covenants, conditions, promises and
agreements contained herein shall be for the sole and exclusive benefit of the
parties hereto and their successors and permitted assigns provided, however,
that, subject to the requirements of Section 9, this Agreement shall
inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto.

 

(ii)           This
Agreement may be executed in one or more counterparts, each of which, when
executed, shall be deemed an original but all of which taken together shall
constitute one and the same Agreement.

 

(i)            Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as any other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.

 

(j)            
All consents and other determinations required to be made by the Investor(s)
pursuant to this Agreement shall be made, unless otherwise specified in this
Agreement, by Investor(s) holding at least a majority of the Registrable
Securities.

 

[SIGNATURES FOLLOW ON NEXT PAGE]

 

15

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers or other
representatives thereunto duly authorized, as of the date first above written.

 

 

	
   

  	
  ISIS PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ B. Lynne Parshall, J.D.

  	
   

  
	
   

  	
   

  	
  Name:

  	
  B. Lynne Parshall, J.D.

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President, Chief Financial

  Officer and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SYMPHONY GENISIS HOLDINGS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Symphony Capital Partners, L.P.,

  
	
   

  	
   

  	
  its Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Symphony Capital GP, L.P.,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Symphony GP, LLC,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Mark Kessel

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark Kessel

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  
						

 

 

EXHIBIT A

 

FORM OF SELLING STOCKHOLDER
QUESTIONNAIRE

 

NOTICE

 

The undersigned beneficial owner (the “Selling Securityholder”) of Registrable Securities
hereby gives notice to Isis
Pharmaceuticals, Inc. (the “Company”)
of its intention to sell or otherwise dispose of Registrable Securities
beneficially owned by it and listed below in Item 3 (unless otherwise specified
under such Item 3) pursuant to the Registration Statement, pursuant to the
terms of the Registration Rights Agreement (the “Registration Rights Agreement”) dated as of April 7,
2006, by and between Isis and Symphony GenIsis Holdings LLC (“Holdings”).  Capitalized terms used but not defined herein
are used as defined in Registration Rights Agreement.

 

The undersigned hereby gives notice to the Company of its intention to
sell the Registrable Securities listed in Item 3 below, pursuant to the
Registration Statement and, provides the following information to the Company
and represents and warrants that such information is accurate and complete:

 

QUESTIONNAIRE

 

1.     (a)   Full
legal name of Selling Securityholder:                                                                                                        

 

(b)   Full
legal name of registered holder of the Registrable Securities (if not the same
as (a) above) through which Registrable Securities listed in Item 3 below are
held:                                                                                                        

 

(c)   Full
legal name of DTC participant (if applicable and if not the same as (b) above)
through which Registrable Securities listed in Item 3 below are held:                                                                                                                         

 

(d)   Status
(yes/no) of Selling Securityholder as a registered broker-dealer or an
affiliate of a registered broker-dealer (please describe to the extent
applicable):                                                                                                                    

 

2.     Address for notices
to Selling Securityholder:                                                                                                        

 

Telephone:                                                  

 

Fax:                                                             

 

Contact Person:                                           

 

3.     Beneficial
Ownership of Registrable Securities:

 

(a)   Type
and number of Registrable Securities beneficially owned:                                                                       

 

(b)   CUSIP
No(s). of such Registrable Securities beneficially owned:                                                                    

 

 

4.     Beneficial
ownership of other securities of the Company owned by the Selling Securityholder.

 

Except as set forth below in this Item 4, the
undersigned is not the beneficial or registered owner of any securities of the
Company other than the Registrable Securities listed above in Item 3.

 

(a)   Type
and amount of other securities beneficially owned by the Selling
Securityholder:                                  

 

(b)   CUSIP
No(s). of such other securities beneficially owned:                                                                               

 

5.     Relationships
with the Company:

 

Except as set forth below, neither the undersigned
nor any of its affiliates, officers, directors or principal equity holders
(owners of 5% or more of the equity securities of the undersigned) 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
(including its donees, distributees or pledgees) intends to distribute the
Registrable Securities listed above in Item 3 pursuant to the Registration
Statement only as follows (if at all). 
Such Registrable Securities may be sold from time to time directly by
the undersigned or, alternatively, through underwriters, broker-dealers or
agents.  If the Registrable Securities
are sold through underwriters, broker-dealers or agents, the Selling
Securityholder will be responsible for any related underwriting discounts or
commissions or agents’ commissions.  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. 
The selling stockholders may sell their shares by one or more of, or a
combination of, the following methods: (i) purchases by a broker-dealer as
principal and resale by such broker-dealer for its own account pursuant to this
prospectus; (ii) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; (iii) block trades in which the broker-dealer so
engaged will attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (iv) an
over-the-counter distribution in accordance with the rules of the Nasdaq
National Market; (v) in privately negotiated transactions; and (vi) in options
transactions.  The undersigned may also
sell Registrable Securities short and deliver Registrable Securities to close
out short positions, or loan or pledge Registrable Securities to broker-dealers
that in turn may sell such securities.

 

A - 2

 

State any
exceptions here:

 

 

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

 

The undersigned acknowledges its obligation to comply with the
provisions of the Exchange Act and the rules thereunder relating to stock
manipulation, particularly Regulation M thereunder (or any successor rules or
regulations), in connection with any offering of Registrable Securities
pursuant to the Registration Rights Agreement. 
The undersigned agrees that neither it nor any person acting on its
behalf will engage in any transaction in violation of such provisions.

 

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

 

The Selling Securityholder hereby acknowledges its obligations under
the Registration Rights Agreement to indemnify and hold harmless certain
persons as set forth therein.

 

Pursuant to the Registration Rights Agreement, the Company has agreed
under certain circumstances to indemnify the Selling Securityholder against
certain liabilities.

 

In accordance with the undersigned’s obligation under the Registration
Rights Agreement to provide such information as may be required by law for
inclusion in the Registration Statement, the undersigned agrees to promptly
notify the Company of any inaccuracies or changes in the information provided
herein that may occur subsequent to the date hereof at any time while the Registration
Statement remains effective, including, without limitation, any change in the
undersigned’s beneficial ownership of Registrable Securities.

 

All notices hereunder and pursuant to the Registration Rights Agreement
shall be made in writing to the Selling Securityholder at the address set forth
in Section 2 above, and to the Company at the address set forth below.

 

By signing below, the undersigned 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 Registration Statement and the related
prospectus.  The undersigned understands
that such information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus.

 

Once this Questionnaire is executed by the Selling Securityholder and
delivered to the Company, the terms of this Questionnaire, and the representations
and warranties contained

 

A - 3

 

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
Securityholder (with respect to the Registrable Securities beneficially owned
by such Selling Securityholder and listed in Item 3 above).  This Agreement shall be governed in all
respects by the laws of the State of New York.

 

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

 

 

	
  Dated:

  	
   

  	
   

  	
  Beneficial Owner:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
									

 

PLEASE RETURN THE COMPLETED AND EXECUTED
QUESTIONNAIRE

TO ISIS PHARMACEUTICALS, INC. AT:

 

1896 Faraday Avenue

Carlsbad, California
92008

Attn:  General Counsel

 

WITH A COPY TO:

 

1896 Faraday Avenue

Carlsbad, California
92008

Attn:  Chief Financial Officer

 

A - 4Exhibit
10.4

 

EXECUTION
COPY

 

CONFIDENTIAL TREATMENT
REQUESTED

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

 

 

 

NOVATED AND
RESTATED

 

TECHNOLOGY
LICENSE AGREEMENT

 

 

dated as of April
7, 2006

 

 

among

 

 

ISIS
PHARMACEUTICALS, INC.,

 

 

SYMPHONY
GENISIS, INC.

 

 

and

 

 

SYMPHONY
GENISIS HOLDINGS LLC

 

 

 

 

Table of Contents

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Article 1

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  Article 2

  	
  Grant Of Rights

  	
  1

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1.

  	
  Assignment

  	
  1

  
	
   

  	
  2.2.

  	
  License Grant

  	
  2

  
	
   

  	
  2.3.

  	
  Sublicense to
  Licensor

  	
  2

  
	
   

  	
  2.4.

  	
  Right to
  Sublicense

  	
  2

  
	
   

  	
  2.5.

  	
  Partial Reversion
  of License upon Licensor’s Exercise of Discontinuation Option

  	
  3

  
	
   

  	
  2.6.

  	
  Reservation of
  Rights

  	
  3

  
	
   

  	
  2.7.

  	
  Regulatory Files
  After Expiration or Termination of Term or Discontinuation Option

  	
  3

  
	
   

  	
  2.8.

  	
  Delivery of
  Materials After Expiration or Termination of Term

  	
  4

  
	
   

  	
  2.9.

  	
  License
  Opportunities

  	
  5

  
	
   

  	
  2.10.

  	
  Separate Third
  Party License for Discontinued Program

  	
  6

  
	
   

  	
  2.11.

  	
  Supply of
  Materials After Expiration or Termination of Term

  	
  6

  
	
   

  	
   

  	
   

  
	
  Article 3

  	
  Sublicense To Certain Third Party Intellectual Property

  	
  6

  
	
   

  	
   

  	
   

  
	
   

  	
  3.1.

  	
  Third Party
  Sublicense Payments

  	
  6

  
	
   

  	
  3.2.

  	
  Sublicensed
  Intellectual Property

  	
  7

  
	
   

  	
   

  	
   

  
	
  Article 4

  	
  Intellectual Property

  	
  7

  
	
   

  	
   

  	
   

  
	
   

  	
  4.1.

  	
  Ownership

  	
  7

  
	
   

  	
  4.2.

  	
  Marking

  	
  7

  
	
   

  	
  4.3.

  	
  Prosecution and
  Maintenance

  	
  7

  
	
   

  	
  4.4.

  	
  Abandonment

  	
  8

  
	
   

  	
  4.5.

  	
  Infringement

  	
  8

  
	
   

  	
  4.6.

  	
  Enforcement Right
  During Term

  	
  9

  
	
   

  	
  4.7.

  	
  Post-Term
  Enforcement

  	
  10

  
	
   

  	
  4.8.

  	
  Withdrawal of
  Enforcement

  	
  11

  
	
   

  	
  4.9.

  	
  Recoveries

  	
  12

  
	
   

  	
   

  	
   

  
	
  Article 5

  	
  Representations And Warranties

  	
  12

  
	
   

  	
   

  	
   

  
	
   

  	
  5.1.

  	
  Representations
  and Warranties of Licensor

  	
  12

  
	
   

  	
  5.2.

  	
  Disclaimer and
  Acknowledgement

  	
  13

  
	
   

  	
   

  	
   

  
	
  Article 6

  	
  Indemnification
  And Limitation Of Liability

  	
  13

  
	
   

  	
   

  	
   

  
	
   

  	
  6.1.

  	
  Indemnity

  	
  13

  
	
   

  	
  6.2.

  	
  Notice of Claims

  	
  14

  
	
   

  	
  6.3.

  	
  Defense of
  Proceedings

  	
  14

  
	
   

  	
  6.4.

  	
  Settlement

  	
  15

  
	
   

  	
  6.5.

  	
  Limitation of
  Liability

  	
  16

  
	
   

  	
  6.6.

  	
  Insurance

  	
  16

  

 

i

 

	
  Article 7

  	
  Term And Termination

  	
  16

  
	
   

  	
   

  	
   

  
	
   

  	
  7.1.

  	
  Term

  	
  16

  
	
   

  	
  7.2.

  	
  Termination

  	
  16

  
	
   

  	
  7.3.

  	
  Survival

  	
  17

  
	
   

  	
  7.4.

  	
  Bankruptcy

  	
  17

  
	
   

  	
   

  	
   

  
	
  Article 8

  	
  Miscellaneous

  	
  17

  
	
   

  	
   

  	
   

  
	
   

  	
  8.1.

  	
  Notices

  	
  17

  
	
   

  	
  8.2.

  	
  Entire Agreement

  	
  18

  
	
   

  	
  8.3.

  	
  Assignment

  	
  19

  
	
   

  	
  8.4.

  	
  Headings

  	
  19

  
	
   

  	
  8.5.

  	
  Independent
  Contractor

  	
  19

  
	
   

  	
  8.6.

  	
  Severability

  	
  19

  
	
   

  	
  8.7.

  	
  No Third-Party
  Beneficiaries

  	
  19

  
	
   

  	
  8.8.

  	
  Compliance with
  Laws

  	
  19

  
	
   

  	
  8.9.

  	
  Amendment

  	
  20

  
	
   

  	
  8.10.

  	
  Governing Law;
  Consent to Jurisdiction and Service of Process

  	
  20

  
	
   

  	
  8.11.

  	
  WAIVER OF JURY
  TRIAL

  	
  20

  
	
   

  	
  8.12.

  	
  Counterparts

  	
  20

  
	
   

  	
  8.13.

  	
  No Waiver

  	
  20

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ANNEX A

  	
  DEFINITIONS

  	
   

  
	
  ANNEX B

  	
  [RESERVED]

  	
   

  
	
  ANNEX C

  	
  CERTAIN PROGRAM-SPECIFIC PATENTS

  	
   

  
	
  ANNEX D

  	
  CERTAIN ROYALTY AND MILESTONE PAYMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 2.2

  	
  CERTAIN RESTRICTIONS RELATING TO LICENSED INTELLECTUAL PROPERTY
  LICENSED TO LICENSOR BY A THIRD PARTY

  	
   

  
					

 

ii

 

NOVATED AND
RESTATED

TECHNOLOGY LICENSE AGREEMENT

 

This NOVATED AND RESTATED TECHNOLOGY LICENSE AGREEMENT (this “Agreement”) is made
and effective as of April 7, 2006 by and among, Isis Pharmaceuticals, Inc., a
Delaware corporation (the “Licensor”),
Symphony GenIsis, Inc., a Delaware corporation (“Symphony GenIsis”) (each of Licensor and
Symphony GenIsis being a “Party,”
and collectively, the “Parties”),
and Symphony GenIsis Holdings LLC, a Delaware limited liability company (“Holdings”).

 

WHEREAS, Licensor and Holdings have entered into that certain
Technology License Agreement, dated April 7, 2006 (the “Original Agreement”);

 

WHEREAS, Holdings desires to assign its right, title and interest in,
and delegate and novate its obligations under the Original Agreement to
Symphony GenIsis, and Licensor and Symphony GenIsis desire to novate and
restate the terms and conditions of the Original Agreement to effect such
novation;

 

WHEREAS, Licensor owns or has rights in certain technology, know-how,
patents and other intellectual property rights related to the design,
development, manufacture and/or use of the Products;

 

WHEREAS, Licensor desires to grant to Symphony GenIsis, and Symphony
GenIsis desires to acquire, the exclusive (or nonexclusive, as the case may be)
right to use such technology, know-how, patents and other intellectual property
rights to develop and commercialize Products on the terms and conditions of
this Agreement; and

 

WHEREAS, Licensor desires to receive, and Symphony GenIsis desires to
grant to Licensor, the exclusive right to use such technology, know-how,
patents and other intellectual property rights to develop Products on behalf of
Symphony GenIsis on the terms and conditions of this Agreement.

 

NOW THEREFORE, in consideration of the mutual promises and agreements
set forth herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

ARTICLE 1

DEFINITIONS

 

Capitalized
terms used herein and not defined shall have the meanings assigned to such
terms in Annex A attached hereto.

 

ARTICLE 2

GRANT OF RIGHTS

 

2.1.          Assignment.  Holdings hereby assigns to Symphony GenIsis
all of its right, title and interest in and to the Original Agreement.  The Parties agree that from and after the
Closing Date, all of the right, title, interest and obligations of Holdings
under the Original

 

1

 

Agreement will be assigned, novated and transferred to, and assumed by,
Symphony GenIsis, as amended and restated by this Agreement.

 

2.2.          License Grant.

 

(a)   Subject to Sections 2.3, 2.4,
2.5 and 2.6 below, the limitations and restrictions set forth on Schedule 2.2,
and the terms and conditions of this Agreement, Licensor hereby grants to
Symphony GenIsis a fully paid, worldwide, exclusive license under the Licensed Intellectual
Property, solely to develop, make, have made, use, offer for sale, sell, and
import Products in the Exclusive Field; and

 

(b)   Subject to Sections 2.3, 2.4,
2.5 and 2.6 below, the limitations and restrictions set forth on Schedule 2.2,
and the terms and conditions of this Agreement, Licensor hereby grants to
Symphony GenIsis a fully paid, worldwide, nonexclusive license under the
Licensed Intellectual Property, solely to develop, make, have made, use, offer
for sale, sell, and import Products in the Nonexclusive Field.

 

2.3.          Sublicense to
Licensor.  Symphony GenIsis hereby
grants to Licensor a fully paid, worldwide, exclusive (even as to Symphony
GenIsis) sublicense under the Licensed Intellectual Property, with the right to
grant further sublicense(s), to develop, make, have made, use and import
Products, or otherwise as necessary or useful to carry out Licensor’s
obligations or exercise Licensor’s rights under the Operative Documents.  Notwithstanding the foregoing, Licensor shall
only exercise its sublicense rights in connection with and for the purpose of
carrying out Licensor’s obligations or exercising Licensor’s rights under the
Operative Documents.  In the event of the
expiration of a Discontinuation Option without exercise by Licensor, the
sublicense set forth in this Section 2.3 shall expire with respect to the Products
relating to the Program to which such Discontinuation Option pertained.  Upon the unexercised expiration or
termination of the Purchase Option without Licensor’s exercise of the Purchase
Option, the sublicense set forth in this Section 2.3 shall expire with respect
to all Products relating to the Program(s) for which Licensor has not exercised
the Discontinuation Option.

 

2.4.          Right to
Sublicense.  Subject to the
limitations and restrictions set forth on Schedule 2.2, the license granted
hereunder includes the right of Symphony GenIsis to grant sublicenses under the
Licensed Intellectual Property, provided, that,

 

(a)   subject to Sections 2.3 and
2.4(b), Symphony GenIsis shall not sublicense any of the rights granted
pursuant to Section 2.2 to any third party (including without limitation any
Affiliates) during the Term;

 

(b)   notwithstanding (a), in the
event of the expiration of a Discontinuation Option without exercise by
Licensor, Symphony GenIsis may grant sublicense(s) to third parties (including
without limitation Affiliates) of the rights granted pursuant to Section 2.2
with respect to the Products relating to the Program to which such
Discontinuation Option pertained;

 

(c)   each sublicense granted is
(i) pursuant to a written contract, (ii) consistent with the terms of this
Agreement, (iii) does not grant any rights beyond the scope of the license
rights granted herein, and (iv) is as protective of Licensor’s rights as set
forth in this Agreement; and

 

2

 

(d)   upon Licensor’s written
request, Symphony GenIsis shall provide to Licensor copies of any sublicense
agreements, provided that (i) Symphony GenIsis may redact any financial or
other proprietary information contained therein which does not affect Licensor’s
rights and (ii) Licensor shall treat its copy of the sublicense agreements as
Confidential Information of Symphony GenIsis.

 

2.5.          Partial Reversion
of License upon Licensor’s Exercise of Discontinuation Option.  Licensor and Symphony GenIsis acknowledge
that Licensor may exercise its Discontinuation Option pursuant to Section 11.1
of the Amended and Restated Research and Development Agreement.  Upon the Discontinuation Option Closing Date,
as applicable, (i) the license set forth in Section 2.2 (and the corresponding
sublicense under Section 2.3) shall expire with respect to the Products
relating to the Program for which Licensor exercised its Discontinuation
Option, as applicable, (ii) those patents, know-how and enhancements that were
previously part of the Licensed Intellectual Property and relate exclusively to
such Program (including its Products) but not to the other Programs, shall be
deleted from the relevant intellectual property definitions, and accordingly,
Symphony GenIsis shall no longer be responsible for any obligations or costs
(including royalties or fees to third parties, prosecution costs, maintenance
costs and enforcement costs) accruing after such Discontinuation Option Closing
Date with respect to such patents, know-how and enhancements; and (iii)
Symphony GenIsis shall (a) at Licensor’s request and option, promptly return to
Licensor or destroy all Tangible Materials relating solely to such Program; and
(b) upon Licensor’s request, provide Licensor a copy of any Tangible Materials
which relate to such Program (but not solely to such Program).  The Parties shall, as necessary, promptly
amend this Agreement, in connection with the exercise and consummation of the
Discontinuation Option pursuant to Section 11.1 of the Amended and Restated
Research and Development Agreement, to give Licensor all rights it needs to
pursue the Program for which such option was exercised without any obligation
to or dependency on Symphony GenIsis and to limit this Agreement to the other
Programs.

 

2.6.          Reservation of
Rights.  All rights not expressly
granted to a Party hereunder shall remain the exclusive property of the other
Party.  Symphony GenIsis covenants and
agrees not to use or exploit the Licensed Intellectual Property outside of the
scope of the licenses granted herein. 
Licensor covenants and agrees not to use or exploit the Licensed
Intellectual Property in connection with the development, manufacture, use,
sale, or importation of Products in the Exclusive Field after the expiration of
all sublicenses granted pursuant to Section 2.3; provided, however, that such
covenant by Licensor shall not apply to any Program for which Licensor
exercises a Discontinuation Option or to any Products relating to such
Program.  For the avoidance of doubt,
Isis shall not be restricted from using or otherwise exploiting any
intellectual property relating to drug discovery platforms outside the fields
of the Products and/or the Programs.

 

2.7.          Regulatory Files
After Expiration or Termination of Term or Discontinuation Option.

 

(a)   As soon as reasonably
practical after the expiration or termination of the Purchase Option without
exercise by Licensor and as of a date to be agreed upon by Licensor and
Symphony GenIsis, Licensor and Symphony GenIsis shall, at Symphony GenIsis’
expense, take all actions necessary to effect the assignment to Symphony
GenIsis or its designee of the

 

3

 

sponsorship to the
Regulatory Files with respect to the Programs for which Licensor has not exercised
its Discontinuation Option.  After such
Regulatory Files are assigned to Symphony GenIsis, Licensor shall have no
further rights therein or obligations thereunder; provided, however, that
during the one hundred eighty (180) days following such assignment of
Regulatory Files, at Symphony GenIsis’ reasonable request and expense, Licensor
shall use commercially reasonable efforts to provide Symphony GenIsis or its
designee with assistance in respect of such Regulatory Files.  Licensor shall, at the reasonable request of
Symphony GenIsis and at Symphony GenIsis’ expense, perform any acts that
Symphony GenIsis may reasonably deem necessary or desirable to evidence or
confirm Symphony GenIsis’ ownership interest in such Regulatory Files,
including, but not limited to, making further written assignments in a form
determined by Symphony GenIsis.  Without
limiting the license rights granted under this ARTICLE 2, the Parties
understand and agree that the assignment of such Regulatory Files does not
include an assignment of any Licensed Intellectual Property.

 

(b)   As soon as reasonably practical after the expiration of a
Discontinuation Option without exercise by Licensor and as of a date to be
agreed upon by Licensor and Symphony GenIsis, Licensor and Symphony GenIsis
shall, at Symphony GenIsis’ expense, take all actions necessary to effect the
assignment to Symphony GenIsis or its designee of the sponsorship to the
Regulatory Files with respect to the Programs for which Licensor has not
exercised its Discontinuation Option. 
After such Regulatory Files are assigned to Symphony GenIsis, Licensor
shall have no further rights therein or obligations thereunder; provided,
however, that during the one hundred eighty (180) days following such
assignment of Regulatory Files, at Symphony GenIsis’ reasonable request and
expense, Licensor shall use commercially reasonable efforts to provide Symphony
GenIsis or its designee with assistance in respect of such Regulatory
Files.  Licensor shall, at the reasonable
request of Symphony GenIsis and at Symphony GenIsis’ expense, perform any acts
that Symphony GenIsis may reasonably deem necessary or desirable to evidence or
confirm Symphony GenIsis’ ownership interest in such Regulatory Files,
including, but not limited to, making further written assignments in a form
determined by Symphony GenIsis.  Without
limiting the license rights granted under this ARTICLE 2, the Parties
understand and agree that the assignment of such Regulatory Files does not
include an assignment of any Licensed Intellectual Property.

 

2.8.          Delivery of
Materials After Expiration or Termination of Term.

 

(a)   Upon the unexercised expiration or termination of the Purchase
Option without exercise by Licensor, Licensor shall, at Symphony GenIsis’
expense, promptly deliver to Symphony GenIsis all copies of Tangible Materials
existing as of the date of such unexercised expiration or termination that
relate to the Programs for which Licensor has not exercised its Discontinuation
Option; provided, however that Licensor may also retain copies of (and the
right to use) those Tangible Materials that are required to be delivered to
Symphony GenIsis hereunder but which also relate to (i) any Program for which
Licensor has exercised its Discontinuation Option or (ii) any other product of
Licensor.

 

(b)   In the event of the expiration of a Discontinuation Option without
exercise by Licensor, Licensor shall, at Symphony GenIsis’ expense, promptly
deliver to Symphony GenIsis all copies of Tangible Materials existing as of the
date of such expiration that relate to the Program to which the Discontinuation
Option pertained; provided, however that Licensor may 

 

4

 

also retain copies of (and the right to use)
those Tangible Materials that are required to be delivered to Symphony GenIsis
hereunder but which also relate to any other Program or any other product of
Licensor.

 

(c)   Subsequent to any such unexercised expiration or termination of
the Purchase Option without exercise by Licensor or expiration of a
Discontinuation Option without exercise by Licensor, (i) Licensor shall
promptly notify Symphony GenIsis (and any subsequent partners or transferees of
Symphony GenIsis’ rights hereunder) regarding any safety or other related
issues that Licensor identifies in its safety database that may be relevant to
a Product being developed by Symphony GenIsis (or any such partner or
transferee) hereunder, and if requested, provide the data supporting Licensor’s
conclusions regarding such issues, and (ii) Symphony GenIsis shall use
commercially reasonable, good faith efforts, to negotiate with any of its
subsequent partners or transferees of Symphony GenIsis’ rights hereunder to
ensure, Isis’ continued access to safety data and other related information
acquired by Symphony GenIsis or any subsequent partners or transferees of
Symphony GenIsis’ rights hereunder [***].

 

2.9.          License
Opportunities.  In the event that,
during the Term, Licensor reasonably determines that it is necessary to license
from any third party any intellectual property relating to the composition of
matter, use, manufacture, formulation or exploitation of the Products (“Third Party IP”) and
Licensor desires to license such Third Party IP during the Term, then (i) if
Licensor desires Symphony GenIsis to pay any or all of the financial
obligations under such license, Licensor shall obtain Symphony GenIsis’ written
consent, which shall not be unreasonably withheld or delayed before acquiring
such license; and (ii) if Symphony GenIsis provides such consent, then unless
otherwise agreed to by the Parties in writing, Licensor shall use commercially
reasonable efforts to obtain, at the time such license is granted, the right to
sublicense such Third Party IP to Symphony GenIsis consistent with the terms of
this Agreement as if such Third Party IP were Licensed Intellectual
Property.  Unless otherwise agreed to by
the Parties in writing, the financial obligations under any licenses to Third
Party IP obtained by Licensor with Symphony GenIsis’ consent shall (1) be borne
fully by Symphony GenIsis if such Third Party IP relates solely to the
composition of matter, use, manufacture, formulation or exploitation of the
Products and, at the time of entering into such third party license, Licensor
has not exercised its Discontinuation Option with respect to the Program to
which such Third Party IP relates; or (2) be shared by the Parties in amounts
and/or percentages to be agreed upon by the Parties prior to Licensor entering
into such third party license, if such Third Party IP relates (but does not
relate solely) to the composition of matter, use, manufacture, formulation or
exploitation of Products within Program(s) for which Licensor has not exercised
its Discontinuation Option and also relates to either (x) the composition of
matter, use, manufacture, formulation or exploitation of Products within
Program(s) for which Licensor has exercised its Discontinuation Option or (y)
the composition of matter, use, manufacture, formulation or exploitation of other
products of Licensor; or (3) be borne fully by Licensor if such Third Party IP
relates solely to the composition of matter, use, manufacture, formulation or
exploitation of Product(s) within a Program(s) for which Licensor has exercised
its Discontinuation Option. 
Notwithstanding the foregoing, Licensor shall have no obligation to
obtain any such third party licenses under this Agreement or, in the event that
Symphony GenIsis does not give such consent, to grant any sublicenses to
Symphony GenIsis.  Upon obtaining a
license to such Third Party IP and the right to sublicense to Symphony GenIsis,
the Parties will, as necessary, promptly amend this Agreement to include such
sublicensed intellectual property within the

 

5

 

license granted hereunder, incorporate any other
limitations, royalties or other provisions required by such third party with
respect to such sublicense, and address Symphony GenIsis’ rights (if any) with
respect to patent prosecution, maintenance and enforcement of patents and
patent applications within such Third Party IP.

 

2.10.        Separate Third
Party License for Discontinued Program. 
In the event of the expiration of a Discontinuation Option without
exercise by Licensor, Symphony GenIsis has the right to transfer to a third
party Symphony GenIsis’ rights to the Products relating to the Program to which
such Discontinuation Option pertained (the “Discontinued Program”).  If Symphony GenIsis identifies a third party
that wishes to obtain such rights, then upon Symphony GenIsis’ request, (i)
Licensor and Symphony GenIsis shall amend this Agreement to terminate all of
Symphony GenIsis’ rights and obligations to the extent applicable to the
Discontinued Program and (ii) Licensor shall enter into a separate license
agreement with such third party in which all of such terminated rights and
obligations shall be conferred upon and undertaken by such third party.  The terms and conditions of such license
agreement shall be identical to those contained herein, to the extent that such
terms are applicable to the Discontinued Program and not dependent on any
Operative Document other than this Agreement. 
Such terms shall include but not be limited to (1) provisions allowing
for termination of such license agreement upon a material, uncured breach of
such license agreement by the third party on similar terms as provided herein
with respect to Symphony GenIsis and (2) a confidentiality provision that is
not dependent on any of the Operative Documents.  Termination of this Agreement shall not
effect such license agreement and Licensor’s obligation to enter into such a
license agreement shall survive termination of this Agreement.

 

2.11.        Supply of
Materials After Expiration or Termination of Term.  In the event of an unexercised expiration or
termination of the Purchase Option, Licensor agrees to negotiate in good faith,
and on commercially reasonable terms and conditions, a supply agreement
relating to materials, including compounds and Products, required by Symphony
GenIsis (or its partners or transferees hereunder) for the continued
development (including clinical development), manufacture and commercialization
of Products.

 

ARTICLE 3

SUBLICENSE TO CERTAIN THIRD PARTY INTELLECTUAL PROPERTY

 

3.1.          Third Party Sublicense
Payments.  Unless otherwise agreed to
by the Parties in writing, to the extent that (a) any Licensed Patent Rights
are licensed to Licensor by a third party and sublicensed to Symphony GenIsis
by Licensor hereunder or (b) a third party has previously collaborated with
Isis with respect to GCCR or GCGR, and the development, manufacture, use, sale
or other commercialization of any Product by Symphony GenIsis shall require the
Licensor to make a royalty payment, milestone or any other payment obligation to
the third party licensor of such Licensed Intellectual Property or previous
collaborator, (i) Symphony GenIsis shall be responsible for the satisfaction of
such royalty payment, milestone or any other obligation to such licensor if
such payment is triggered by the development, manufacture, use, sale or other
commercialization of any Product by Symphony GenIsis; or (ii) such royalty
payment shall be shared by the Parties in amounts and/or percentages to be
agreed upon by the Parties if such payment relates (but does not relate solely)
to the manufacture, use, sale or other commercialization of any Product by
Symphony GenIsis.  Notwithstanding the
foregoing, with

 

6

 

respect to agreements between Isis and any third party
existing as of the Closing Date, Symphony GenIsis’ obligations under this
Section 3.1 for Products [***].

 

3.2.          Sublicensed
Intellectual Property.  Symphony
GenIsis acknowledges (i) that certain Licensed Intellectual Property is
licensed to Licensor by third parties and will be sublicensed to Symphony
GenIsis hereunder (the “Sublicensed Intellectual
Property”) and (ii) that such sublicense is subject to certain
restrictions and obligations set forth in the applicable written agreements
between Licensor and such third parties (the “Sublicense
Obligations”), including but not limited to those restrictions
and obligations set forth on Schedule 2.2. 
Symphony GenIsis agrees to either be bound by the Sublicense Obligations
or forfeit the applicable sublicense of such Intellectual Property under
Section 2.2 subject to the applicable Sublicense Obligation and sublicensed
hereunder; provided, however, that Symphony GenIsis cannot use this Section to
avoid any Sublicense Obligation that has accrued prior to the date Symphony
GenIsis elects to forfeit the applicable sublicense.

 

ARTICLE 4

INTELLECTUAL PROPERTY

 

4.1.          Ownership.  The Parties acknowledge and agree that, as
between Licensor and Symphony GenIsis, and subject to Schedule 2.2, Licensor or
its licensors are the owners of all right, title and interest in and to the
Licensed Intellectual Property, including without limitation Symphony GenIsis
Enhancements.  Symphony GenIsis hereby
assigns to Licensor all of Symphony GenIsis’ rights and interests in any
Symphony GenIsis Enhancements, including any rights in inventions made jointly
by Licensor and Symphony GenIsis. 
Symphony GenIsis shall promptly disclose any Symphony GenIsis
Enhancement to Licensor, and shall use reasonable efforts, at Licensor’s request
and at no cost to Licensor, to cooperate fully with Licensor to transfer such
Symphony GenIsis Enhancements to Licensor.

 

4.2.          Marking.  Symphony GenIsis shall mark, and shall cause
all of its sublicensees to mark, all Products, or the packaging thereof or
materials related thereto, with the number of the applicable patents licensed
hereunder in accordance with applicable U.S. patent law.

 

4.3.          Prosecution and
Maintenance.

 

(a)   Unless otherwise set forth in this Section 4.3, (i) Licensor shall
prepare, file, prosecute and maintain those patents and patent applications in
Licensed Patent Rights for which Licensor has patent prosecution and
maintenance rights; and (ii) Licensor shall provide Symphony GenIsis with (1)
quarterly reports regarding the status of the prosecution and maintenance of Program-Specific
Patents, (2) copies of and/or access to any patent documents related to the
Licensed Patent Rights as reasonably requested by Symphony GenIsis, (3) copies
of patent applications and other substantive patent prosecution documents
pertaining to the Program-Specific Patents  prior to filing in the United States so as to
afford Symphony GenIsis and its patent counsel, at Symphony GenIsis’ expense, a
reasonable opportunity to review and comment on such documents and (4) timely
answers to Symphony GenIsis’ questions regarding the status of patents and
patent applications in Licensed Patent Rights.

 

7

 

(b)   Licensor will use commercially reasonable efforts to seek the
allowance of broad generic claims, consistent with Licensor’s determination of
enforceability, business considerations and other factors.

 

(c)   Subject to any such costs paid by Third Party Licensors and a
reasonable allocation of costs, to the extent that the Program-Specific Patents
relate to Licensor’s business other than the Programs, the cost of the
prosecution and maintenance of Program-Specific Patents shall be paid by
Symphony GenIsis.  Upon the scope of any
Licensed Patent Rights being amended so that the patent or patent application’s
claims no longer relate to, or are exploitable in connection with, any Product
and/or any Program, for which Licensor has not exercised a Discontinuation
Option, such patent or patent application shall cease to be a Licensed Patent
Right and all rights and obligations with respect to such patent or patent
application (including costs, fees, prosecution, maintenance and enforcement)
shall revert to Licensor.

 

(d)   Symphony GenIsis shall not be responsible for the costs of any
opposition, interference or reexamination initiated by Licensor with respect to
the Program Specific Patents (except to the extent allocated in the Development
Budget), unless the Parties mutually agree in writing (i) that it is reasonably
necessary or useful to file and prosecute such opposition, interference or
re-examination in connection with such Program Specific Patents to protect
their interests in such Program Specific Patents and (ii) to a reasonable
allocation of costs to the extent that the Program Specific Patents relate to
Licensor’s business other than the Programs, which agreement will not be
unreasonably withheld or delayed.  In the
event, however, that (i) Symphony GenIsis does not agree to pay such costs
(or its share of costs as reasonably allocated as set forth above) of such
opposition, interference or reexamination and (ii) Licensor successfully files
and prosecutes or settles such opposition, interference or reexamination at its
sole cost, then the licenses granted by Licensor to Symphony GenIsis in Section
2.2 herein shall immediately terminate with respect to specific Program
Specific Patent subject to such opposition, interference or reexamination.

 

(e)   Each Party shall provide the prosecuting Party with reasonable
cooperation under this Section 4.3.

 

4.4.          Abandonment.  Subject to the limitations and restrictions
set forth on Schedule 2.2, the Parties acknowledge that in the event Licensor
desires to abandon any patent or patent application covering Program-Specific
Patents within the Major Market during the Term or in any jurisdiction after
the Term), Licensor shall provide prompt, timely, prior written notice of at
least [***] days prior to abandonment thereof to Symphony GenIsis before any
such abandonment.  If Symphony GenIsis
informs Licensor in writing at least [***] days before the relevant abandonment
deadline that Symphony GenIsis desires to avoid such abandonment or lapse, then
Licensor shall continue to prosecute or maintain such patent or patent
application at Symphony GenIsis’ request and sole expense.

 

4.5.          Infringement.  Each Party agrees to immediately notify the
other Party upon becoming aware of any infringement, misappropriation, illegal
use or misuse of the Licensed Intellectual Property in connection with Products
in the Exclusive Field and provide to the other Party all available evidence of
such infringement.

 

8

 

4.6.          Enforcement Right During Term.

 

(a)   Except as provided in Section 4.6(b), during the Term, Licensor
has the first right, but not the obligation, to take action against others in
the courts, administrative agencies or otherwise to prevent or terminate
infringement, misappropriation, illegal use or misuse of the Licensed Patent
Rights or other Licensed Intellectual Property.

 

(b)   During the Term, Licensor has the first right, but not the
obligation, to take action against others to terminate or prevent a GenIsis
Relevant Action.  The costs and expenses
of any such action shall be borne by Symphony GenIsis to the extent the action
relates to a GenIsis Relevant Action; provided, that Symphony GenIsis’ prior,
written consent was obtained prior to the initiation of such action, such
consent not to be unreasonable withheld or delayed.  Symphony GenIsis shall, at its expense,
cooperate with and reasonably assist Licensor in any such action if so
requested by Licensor, and, upon Licensor’s request, execute, file and deliver
all documents and proof necessary for such purpose, including being named as a
party to such litigation if requested by Licensor or if required by Law.  Symphony GenIsis shall have the right to
participate and be represented by its own counsel at its own expense in any
such action, suit or proceeding with respect to Licensed Patent Rights solely
relating to Products for which Licensor has not exercised the relevant
Discontinuation Option provided that Symphony GenIsis shall not enter into any
settlement or compromise of such action, suit or proceeding that affects or
concerns the validity, enforceability, or ownership of any Licensed Patent
Rights or other Licensed Intellectual Property without the prior written
consent of Licensor, which consent shall not be unreasonably withheld or
delayed.  Licensor shall not enter into
any settlement or compromise of such action, suit or proceeding that affects or
concerns the validity, enforceability, or ownership of any Licensed Patent
Rights or other Licensed Intellectual Property without the prior, written
consent of Symphony GenIsis, which consent shall not be unreasonably withheld
or delayed.

 

(c)   Subject to the limitations and restrictions set forth on Schedule
2.2, if, (1) during the Term, Symphony GenIsis requests Licensor to take action
pursuant to Section 4.6(b) with respect to a GenIsis Relevant Action that
either (i) solely involves the enforcement of a Program Specific Patent or (ii)
involves the enforcement of other Licensed Intellectual Property and there is
not a claim of an issued Program Specific Patent that covers the infringing
ASO, and (2) Licensor does not take such action within [***] days of Symphony
GenIsis’ written request that Licensor take such action, then Symphony GenIsis
shall have the option to commence any such action under its own direction and
control, and at Symphony GenIsis’ cost and expense.  Licensor shall, at Symphony GenIsis’ expense,
cooperate with and reasonably assist Symphony GenIsis in any such action if so
requested by Symphony GenIsis, and, upon Symphony GenIsis’ request, execute,
file and deliver all documents and proof necessary for such purpose, including
being named as a party to such litigation if requested by Symphony GenIsis or
if required by Law.  Licensor shall have
the right to participate and be represented by its own counsel at its own
expense in any such action, suit or proceeding with respect to Licensed Patent
Rights provided that Licensor shall not enter into any settlement or compromise
of such action, suit or proceeding that affects or concerns the validity,
enforceability, or ownership of any Licensed Patent Rights or other Licensed
Intellectual Property without the prior written consent of Symphony GenIsis,
which consent shall not be unreasonably withheld or delayed.  Symphony GenIsis shall not enter into any
settlement or compromise of such action, suit or proceeding that

 

9

 

affects or concerns the validity,
enforceability, or ownership of any Licensed Patent Rights or other Licensed
Intellectual Property without the prior, written consent of Licensor, which
consent shall not be unreasonably withheld or delayed.

 

4.7.          Post-Term Enforcement.

 

(a)   Program Specific Patents. 
Following the unexercised expiration or termination of the Purchase
Option without Licensor’s exercise of the Purchase Option, as between the
Parties, and solely with respect to Program Specific Patents, Symphony GenIsis
shall have the first right, but not the obligation, to take action against
others to prevent or terminate GenIsis Relevant Actions.  Licensor shall, at Symphony GenIsis’ expense,
cooperate and reasonably assist Symphony GenIsis in such action if so
requested, and upon Symphony GenIsis’ request, execute, file and deliver all
documents and proof necessary for such purpose, including being named as a
party to such litigation if requested by Symphony GenIsis or if required by Law.  Licensor shall have the right to participate
and be represented in any such action, suit or proceeding by its own counsel at
its own expense provided that Licensor shall not enter into any settlement or
compromise of such action, suit or proceeding that affects or concerns the
validity, enforceability, or ownership of any Licensed Patent Rights or other
Licensed Intellectual Property without the prior written consent of Symphony
GenIsis, which consent shall not be unreasonably withheld or delayed.  Symphony GenIsis shall not enter into any
settlement or compromise of such action, suit or proceeding that affects or
concerns the validity, enforceability, or ownership of any Licensed Patent
Rights or other Licensed Intellectual Property without the prior written
consent of Licensor, which consent shall not be unreasonably withheld or
delayed.

 

(b)   Following the unexercised expiration or termination of the
Purchase Option without Licensor’s exercise of the Purchase Option, if Symphony
GenIsis does not take action under Section 4.7(a) within [***] days of Licensor’s
written request that Symphony GenIsis take such action, then Licensor shall
have the option to commence any such action under its own direction and
control, and at Licensor’s cost and expense. 
Symphony GenIsis shall, at Licensor’s expense, cooperate and reasonably
assist Licensor in such action if so requested, and upon Licensor’s request,
execute, file and deliver all documents and proof necessary for such purpose,
including being named as a party to such litigation if requested by Licensor or
if required by Law.  Symphony GenIsis
shall have the right to participate and be represented in any such action, suit
or proceeding by its own counsel at its own expense provided that Symphony
GenIsis shall not enter into any settlement or compromise of such action, suit
or proceeding that affects or concerns the validity, enforceability, or
ownership of any Licensed Patent Rights or other Licensed Intellectual Property
without the prior written consent of Licensor, which consent shall not be
unreasonably withheld or delayed. 
Licensor shall not enter into any settlement or compromise of such
action, suit or proceeding that affects or concerns the validity,
enforceability, or ownership of any Licensed Patent Rights or other Licensed
Intellectual Property without the prior written consent of Symphony GenIsis,
which consent shall not be unreasonably withheld or delayed.

 

(c)   Licensed Intellectual Property.  Except as set forth in Section 4.7(a) and
4.7(b) above, following the unexercised expiration or termination of the
Purchase Option without Licensor’s exercise of the Purchase Option, as between
the Parties, Licensor shall have the first

 

10

 

right, but not the obligation, to take action
against others in the courts, administrative agencies or otherwise, under
Licensor’s direction and control and at Licensor’s cost and expense, to prevent
or terminate infringement, misappropriation, illegal use or misuse of any
Licensed Intellectual Property, including but not limited to a GenIsis Relevant
Action.  Symphony GenIsis shall, at
Licensor’s expense, cooperate and reasonably assist Licensor in such action if
so requested, and upon Licensor’s request, execute, file and deliver all
documents and proof necessary for such purpose, including being named as a
party to such litigation if requested by Licensor or if required by Law.  Symphony GenIsis shall have the right to participate
and be represented in any such action, suit or proceeding by its own counsel at
its own expense provided that Symphony GenIsis shall not enter into any
settlement or compromise of such action, suit or proceeding that affects or
concerns the validity, enforceability, or ownership of any Licensed Patent
Rights or other Licensed Intellectual Property without the prior written
consent of Licensor, which consent shall not be unreasonably withheld or
delayed.  Licensor shall not enter into
any settlement or compromise of such action, suit or proceeding that affects or
concerns the validity, enforceability, or ownership of any Licensed Patent
Rights or other Licensed Intellectual Property without the prior written
consent of Symphony GenIsis, which consent shall not be unreasonably withheld
or delayed.

 

(d)   Except as set forth in Section 4.7(a) and 4.7(b) above and subject
to the limitations and restrictions set forth on Schedule 2.2, following the
unexercised expiration or termination of the Purchase Option without Licensor’s
exercise of the Purchase Option, if Licensor does not take action under Section
4.7(c) with respect to a GenIsis Relevant Action within [***] days of Symphony
GenIsis’ written request that Licensor take such action, then Symphony GenIsis
shall have the option to commence any such action under its own direction and
control, and at Symphony GenIsis’ cost and expense.  Licensor shall, at Symphony GenIsis’ expense,
cooperate and reasonably assist Symphony GenIsis in such action if so requested,
and upon Symphony GenIsis’ request, execute, file and deliver all documents and
proof necessary for such purpose, including being named as a party to such
litigation if requested by Symphony GenIsis or if required by Law.  Licensor shall have the right to participate
and be represented in any such action, suit or proceeding by its own counsel at
its own expense provided that Licensor shall not enter into any settlement or
compromise of such action, suit or proceeding that affects or concerns the validity,
enforceability, or ownership of any Licensed Patent Rights or other Licensed
Intellectual Property without the prior written consent of Symphony GenIsis,
which consent shall not be unreasonably withheld or delayed.  Symphony GenIsis shall not enter into any
settlement or compromise of such action, suit or proceeding that affects or
concerns the validity, enforceability, or ownership of any Licensed Patent
Rights or other Licensed Intellectual Property without the prior written
consent of Licensor, which consent shall not be unreasonably withheld or
delayed.

 

4.8.          Withdrawal of
Enforcement.  If either Party brings
an action under this ARTICLE 4 with respect to a GenIsis Relevant Action and
subsequently ceases to pursue or withdraws from such action without resolution
(which resolution may include the granting of a license by Isis to such third party
that does not violate Section 2.2 or Section 2.6 of this Agreement), it shall
promptly notify the other Party and the other Party may, to the extent
permitted by Law, substitute itself for the withdrawing party under the terms
of this ARTICLE 4.

 

11

 

4.9.          Recoveries.  All damages or other compensation of any kind
recovered in such action, suit, or proceeding or from any settlement or
compromise brought under this ARTICLE 4 shall first be used to reimburse each
Party for its expenses in connection with such action, suit or proceeding, (in
proportion to the expenses of each Party if recovery is insufficient to cover all
such expenses) and the remainder of such recovery, shall be allocated [***] to
the Party hereto taking the lead in the action, suit or proceeding.

 

ARTICLE 5

REPRESENTATIONS AND WARRANTIES

 

5.1.          Representations
and Warranties of Licensor.  Licensor
hereby represents and warrants to Symphony GenIsis, that, as of the Closing
Date:

 

(a)   Subject to Section 3.2 and Schedule 2.2, Licensor is the exclusive
owner of all right, title, and interest in and to (i) all Licensed Patent
Rights and not identified as jointly owned or licensed from a third party and
(ii) the Regulatory Files;

 

(b)   Licensor has sufficient rights to grant the licenses granted
hereunder and the grant of such licenses does not and will not conflict with
any agreement to which Licensor is a party or otherwise governing the Licensed
Intellectual Property and Licensor further represents and warrants that, on an
ongoing basis throughout the Term, Licensor shall not enter into any agreement
that will conflict with the rights and licenses granted to Symphony GenIsis
hereunder;

 

(c)   To the Knowledge of Licensor, no third party is engaging in any
activity that infringes or misappropriates the Program-Specific Patents or related
know-how or trade secrets;

 

(d)   No element of the Licensed Intellectual Property has been adjudged
invalid or unenforceable in whole or part, and to the Knowledge of Licensor,
the issued patents within the Licensed Intellectual Property are valid and
enforceable;

 

(e)   To the Knowledge of Licensor, no actions or claims have been asserted,
are pending or have been threatened, against Licensor in writing alleging that
the manufacture, use or sale of any Product misappropriates or infringes the
intellectual property rights of any third party;

 

(f)    Except as set forth on Annex D, Licensor and/or Symphony GenIsis
shall not be liable or otherwise obligated to pay royalties, milestone payments
or other consideration pursuant to any agreement Licensor may have with a third
party existing on the Closing Date in connection with Symphony GenIsis’
exploitation of the Licensed Intellectual Property (including Sublicensed
Intellectual Property) in connection with the development, manufacture, use,
sale, or importation of Products [***] hereunder; and

 

(g)   To the Knowledge of Licensor, the manufacture, use or sale of any
Product [***] by Symphony GenIsis (or its sublicensees) in strict accordance
with the licenses herein and other terms of this Agreement will not
misappropriate or infringe the intellectual property rights of any third party.

 

12

 

5.2.          Disclaimer and
Acknowledgement.  EXCEPT AS EXPRESSLY
SET FORTH IN THIS ARTICLE 5, THE LICENSED INTELLECTUAL PROPERTY, PRODUCTS,
TANGIBLE MATERIALS AND REGULATORY FILES ARE PROVIDED “AS IS” WITH NO REPRESENTATIONS
OR WARRANTIES OF ANY KIND, AND LICENSOR EXPRESSLY DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY WARRANTIES OF
MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE, OR NON-INFRINGEMENT.  LICENSOR DOES NOT WARRANT THE PERFORMANCE OF
ANY PRODUCT, INCLUDING THEIR SAFETY, EFFECTIVENESS OR COMMERCIAL
VIABILITY.  ANY SYMPHONY GENISIS
ENHANCEMENTS PROVIDED TO LICENSOR HEREUNDER ARE PROVIDED “AS IS” WITH NO
REPRESENTATIONS OR WARRANTIES OF ANY KIND AND SYMPHONY GENISIS EXPRESSLY
DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY
WARRANTIES OF MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE, OR
NON-INFRINGEMENT.

 

ARTICLE 6

INDEMNIFICATION AND LIMITATION OF LIABILITY

 

6.1.          Indemnity.  To the greatest extent permitted by
applicable Law, Licensor shall indemnify and hold harmless Symphony GenIsis,
its Affiliates, and each of their respective officers, directors, employees,
agents, members, managers, successors and assigns (each, a “Symphony GenIsis Indemnified Party”)
and Symphony GenIsis shall indemnify and hold harmless Licensor, its Affiliates
and each of their respective officers, directors, employees, agents, members,
successors and assigns (each, a “Licensor Indemnified Party” and together with
Symphony GenIsis Indemnified Party, the “Indemnified Parties”), from and against any
and all claims, losses, costs, interest, awards, judgments, fees (including
reasonable fees for attorneys and other professionals), court costs,
liabilities, damages and expenses with an aggregate value of at least [***] (as
determined by the applicable Indemnified Parties acting in good faith),
incurred by any Symphony GenIsis Indemnified Party or Licensor Indemnified
Party (irrespective of whether any such Symphony GenIsis Indemnified Party or
Licensor Indemnified Party, as applicable, is a party to the action for which
indemnification hereunder is sought), (collectively, a “Loss”) to the extent
resulting from, arising out of, or relating to any and all third party suits,
claims, actions, proceedings, investigations, litigation or demands based upon:

 

(i)            in the case of Licensor being the Indemnifying Party, (A)
any breach of any representation or warranty made by Licensor herein or in any other
Operative Document, (B) any breach of any covenant, agreement or obligation of
Licensor contained herein, or in any other Operative Document, (C) any act of
gross negligence or willful misconduct by Licensor in performing its
obligations under this Agreement, or (D) the development, manufacture, use,
handling, storage, sale or other disposition of any Product arising from a
Program for which Licensor exercised a Discontinuation Option; in each case,
except (1) with respect to Losses for which Licensor is entitled to
indemnification under this ARTICLE 6 or (2) to the extent such Loss arises from
the gross negligence or willful misconduct of a Symphony GenIsis Indemnified
Party, and

 

(ii)           in the case of Symphony GenIsis being the Indemnifying
Party, (A) any breach of any representation or warranty made by Symphony
GenIsis herein or in any

 

13

 

other
Operative Document, (B) any breach of any covenant, agreement or obligation of
Symphony GenIsis contained herein, or in any other Operative Document, (C) any
act of gross negligence or willful misconduct by Symphony GenIsis in performing
its obligations under this Agreement, or (D) the development, manufacture, use,
handling, storage, sale or other disposition of Products (other than those
Products arising from a Program for which Licensor exercised a Discontinuation
Option) after the end of the Term or the unexercised expiration of the
Discontinuation Option to which such Product related; in each case, except (1)
with respect to Losses for which Symphony GenIsis is entitled to
indemnification under this ARTICLE 6 or (2) to the extent such Loss arises from
the gross negligence or willful misconduct of an Licensor Indemnified Party.

 

To the extent that the foregoing undertakings by Licensor and/or Symphony
GenIsis may be unenforceable for any reason, such Party shall make the maximum
contribution to the payment and satisfaction of any Loss that is permissible
under applicable Law.

 

6.2.          Notice of Claims.  Any Indemnified Party that proposes to assert
a right to be indemnified under this ARTICLE 6 shall notify Licensor or
Symphony GenIsis, as applicable (the “Indemnifying Party”), promptly after receipt
of notice of commencement of any action, suit or proceeding against such
Indemnified Party (an “Indemnified
Proceeding”) in respect of which a claim is to be made under
this ARTICLE 6, or the incurrence or realization of any Loss in respect of
which a claim is to be made under this ARTICLE 6, of the commencement of such
Indemnified Proceeding or of such incurrence or realization, enclosing a copy
of all relevant documents, including all papers served and claims made, but the
omission so to notify the applicable Indemnifying Party promptly of any such
Indemnified Proceeding or incurrence or realization shall not relieve (a) such
Indemnifying Party from any liability that it may have to such Indemnified
Party under this ARTICLE 6 or otherwise, except, as to such Indemnifying Party’s
liability under this ARTICLE 6, to the extent, but only to the extent, that
such Indemnifying Party shall have been prejudiced by such omission, or (b) any
other indemnitor from liability that it may have to any Indemnified Party under
the Operative Documents.

 

6.3.          Defense of
Proceedings.  In case any Indemnified
Proceeding shall be brought against any Indemnified Party, it shall notify the
applicable Indemnifying Party of the commencement thereof and such Indemnifying
Party shall be entitled to participate in, and provided such Indemnified
Proceeding involves a claim solely for money damages and does not seek an
injunction or other equitable relief against the Indemnified Party and is not a
criminal or regulatory action, to assume the defense of, such Indemnified
Proceeding with counsel reasonably satisfactory to such Indemnified Party, and
after notice from such Indemnifying Party to such Indemnified Party of such
Indemnifying Party’s election so to assume the defense thereof and the failure
by such Indemnified Party to object to such counsel within ten (10) Business
Days following its receipt of such notice, such Indemnifying Party shall not be
liable to such Indemnified Party for legal or other expenses related to such
Indemnified Proceedings incurred after such notice of election to assume such
defense except as provided below and except for the reasonable costs of
investigating, monitoring or cooperating in such defense subsequently incurred
by such Indemnified Party reasonably necessary in connection with the defense
thereof.  Such Indemnified Party shall
have the right to employ its counsel in any such Indemnified Proceeding, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party unless:

 

14

 

(a)   the employment of counsel by such Indemnified Party at the expense
of the applicable Indemnifying Party has been authorized in writing by such
Indemnifying Party;

 

(b)   such Indemnified Party shall have reasonably concluded in its good
faith (which conclusion shall be determinative unless a court determines that
such conclusion was not reached reasonably and in good faith) that there is or
may be a conflict of interest between the applicable Indemnifying Party and
such Indemnified Party in the conduct of the defense of such Indemnified
Proceeding or that there are or may be one or more different or additional
defenses, claims, counterclaims, or causes of action available to such
Indemnified Party (it being agreed that in any case referred to in this clause
(b) such Indemnifying Party shall not have the right to direct the defense of
such Indemnified Proceeding on behalf of the Indemnified Party);

 

(c)   the applicable Indemnifying Party shall not have employed counsel
reasonably acceptable to the Indemnified Party, to assume the defense of such
Indemnified Proceeding within a reasonable time after notice of the
commencement thereof; provided,
however, that (i) this clause shall not be deemed to constitute a waiver
of any conflict of interest that may arise with respect to any such counsel,
and (ii) an Indemnified Party may not invoke this clause (c) if such
Indemnified Party failed to timely object to such counsel pursuant to the first
paragraph of this Section 6.3 (it being agreed that in any case referred to in
this clause (c) such Indemnifying Party shall not have the right to direct the
defense of such Indemnified Proceeding on behalf of the Indemnified Party); or

 

(d)   any counsel employed by the applicable Indemnifying Party shall
fail to timely commence or reasonably conduct the defense of such Indemnified
Proceeding, and such failure has prejudiced (or is in immediate danger of
prejudicing) the outcome of such Indemnified Proceeding (it being agreed that
in any case referred to in this clause (d) such Indemnifying Party shall not
have the right to direct the defense of such Indemnified Proceeding on behalf
of the Indemnified Party);

 

in each of which cases the fees and expenses of counsel for such
Indemnified Party shall be at the expense of such Indemnifying Party.  Only one counsel shall be retained by all Indemnified
Parties with respect to any Indemnified Proceeding, unless counsel for any
Indemnified Party reasonably concludes in good faith (which conclusion shall be
determinative unless a court determines that such conclusion was not reached
reasonably and in good faith) that there is or may be a conflict of interest
between such Indemnified Party and one or more other Indemnified Parties in the
conduct of the defense of such Indemnified Proceeding or that there are or may
be one or more different or additional defenses, claims, counterclaims, or
causes of action available to such Indemnified Party.

 

6.4.          Settlement.  Without the prior written consent of such
Indemnified Party, such Indemnifying Party shall not settle or compromise, or
consent to the entry of any judgment in, any pending or threatened Indemnified
Proceeding, unless such settlement, compromise, consent or related judgment (i)
includes an unconditional release of such Indemnified Party from all liability
for Losses arising out of such claim, action, investigation, suit or other
legal proceeding, (ii) provides for the payment of money damages as the sole
relief for the claimant (whether at law or in equity), (iii) involves no
finding or admission of any violation of Law or the rights of any Person by the
Indemnified Party, and (iv) is not in the nature of a criminal or

 

15

 

regulatory action. 
No Indemnified Party shall settle or compromise, or consent to the entry
of any judgment in, any pending or threatened Indemnified Proceeding (A) in
respect of which any payment would result hereunder or under any other Operative
Document, (B)  which includes an
injunction that will adversely affect any Indemnifying Person, (C) which
involves a finding or admission of any violation of Law or the rights of any
Indemnifying Person, (D) which is in the nature of a criminal or regulatory
action, or (E) which admits the invalidity, misuse or unenforceability of a
Licensed Patent Right, without the prior written consent of the Indemnifying
Party, such consent not to be unreasonably conditioned, withheld or delayed.

 

6.5.          Limitation of
Liability.  TO THE GREATEST EXTENT
PERMITTED BY APPLICABLE LAW, NEITHER PARTY NOR ANY OF THEIR RESPECTIVE
DIRECTORS, OFFICERS, MEMBERS, MANAGERS, EMPLOYEES, INDEPENDENT CONTRACTORS OR
AGENTS SHALL HAVE ANY LIABILITY OF ANY TYPE (INCLUDING, BUT NOT LIMITED TO,
CLAIMS IN CONTRACT, NEGLIGENCE AND TORT LIABILITY) FOR ANY SPECIAL, INCIDENTAL,
INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, THE
LOSS OF OPPORTUNITY, LOSS OF USE OR LOSS OF REVENUE OR PROFIT IN CONNECTION
WITH OR ARISING OUT OF THIS AGREEMENT OR THE SERVICES PERFORMED HEREUNDER, EVEN
IF SUCH DAMAGES MAY HAVE BEEN FORESEEABLE. 
THE FOREGOING SHALL NOT LIMIT EITHER PARTY’S INDEMNIFICATION OBLIGATIONS
PURSUANT TO SECTION 6.1.

 

6.6.          Insurance.  The Parties shall maintain insurance as set
forth in Section 6.7 of the Amended and Restated Research and Development
Agreement.

 

ARTICLE 7

TERM AND TERMINATION

 

7.1.          Term.  This Agreement shall commence on the Closing
Date and shall remain in force until terminated as provided herein.

 

7.2.          Termination.

 

(a)   Either Party may terminate this Agreement at any time if the other
Party is in material default or breach of this Agreement that has resulted in,
or would reasonably be expected to result in, a material adverse effect on the
Programs or the non-breaching Party’s rights under the Operative Documents, and
such material default or breach continues unremedied for a period of sixty (60)
days after written notice thereof is delivered to the defaulting or breaching Party.

 

(b)   Licensor may terminate this Agreement at any time upon written
notice to Symphony GenIsis if (i) Investors materially breaches Sections 2 or 3
of the Funding Agreement, (ii) Holdings breaches Section 2 of the Subscription
Agreement or (iii) Holdings or Symphony GenIsis is in material default or
breach the Purchase Option Agreement that has resulted in, or would reasonably
be expected to result in, a material adverse effect on the Licensor’s rights
under the Purchase Option Agreement and such default or breach is not cured
within thirty (30)

 

16

 

days after written notice of such default or
breach under the Purchase Option Agreement is delivered to the defaulting or
breaching Party.

 

(c)   Licensor may terminate Symphony GenIsis’ sublicense to a specific
element of Sublicensed Intellectual Property if Symphony GenIsis is in material
default or breach of a Sublicense Obligation relating to such Sublicensed
Intellectual Property and such material default or breach continues unremedied
for a period of sixty (60) days (or such shorter cure period as may be
stipulated in the applicable Sublicense Obligation) after written notice
thereof is delivered to Symphony GenIsis.

 

(d)   Upon any termination of this Agreement, all license rights granted
herein (except for those rights granted in or pursuant to Section 2.5) shall
immediately terminate.

 

7.3.          Survival.  The following Sections and Articles shall
survive any expiration or termination of this Agreement:  Sections 2.11, 4.1, 5.2 and 7.3, and Articles
6 and 8.

 

7.4.          Bankruptcy.  All rights and licenses granted under this
Agreement are, and shall otherwise be deemed to be, for purposes of Section
365(n) of the United States Bankruptcy Code (the “Code”), licenses to “Intellectual
Property” as defined in the Code.  The
Parties agree that each Party shall retain and may fully exercise all of its
rights and elections under the Code.

 

ARTICLE 8

MISCELLANEOUS

 

8.1.          Notices.  Any notice, request, demand, waiver, consent,
approval or other communication which is required or permitted to be given to
any Party shall be in writing and shall be deemed given only if delivered to
the Party personally or sent to the Party by facsimile transmission (promptly
followed by a hard-copy delivered in accordance with this Section 8.1), by next
Business Day delivery by a nationally recognized courier service, or by
registered or certified mail (return receipt requested), with postage and
registration or certification fees thereon prepaid, addressed to the Party at
its address set forth below:

 

17

 

Licensor:

 

Isis Pharmaceuticals, Inc.

1896 Rutherford Road

Carlsbad, CA 92008-7208

Attn:  B. Lynne Parshall

Facsimile:  (760) 603-4652

 

with a copy to;

 

Isis Pharmaceuticals, Inc.

1896 Rutherford Road

Carlsbad, CA 92008-7208

Attn:  General Counsel

Facsimile:  (760) 268-4922

 

Symphony GenIsis:

 

Symphony GenIsis, Inc.

7361 Calhoun Place, Suite 325

Rockville, MD  20855

Attn:  Charles W. Finn, Ph.D.

Facsimile:  (301) 762-6154

 

with a copy to;

 

Symphony Capital Partners, L.P.

875 Third Avenue

18th Floor

New York, NY  10022

Facsimile: (212) 632-5401

 

and

 

Symphony Strategic Partners, LLC

875 Third Avenue

18th Floor

New York, NY  10022

Facsimile: (212) 632-5401

 

or to such other
address as such Party may from time to time specify by notice given in the
manner provided herein to each other Party entitled to receive notice hereunder.

 

8.2.          Entire Agreement.  This Agreement (including any Annexes,
Schedules, Exhibits or other attachments hereto) and the agreements referred to
herein (including the Operative Documents) constitute the entire agreement
between the Parties with respect to the subject matter hereof, and no oral or
written statement may be used to interpret or vary the

 

18

 

meaning of the terms and conditions hereof.  This Agreement supersedes any prior or
contemporaneous agreements and understandings, whether written or oral, between
the Parties with respect to the subject matter hereof, including the Original
Agreement but excluding the Operative Documents.

 

8.3.          Assignment.  Neither Party may assign or otherwise transfer
this Agreement without the prior written consent of the other Party; provided, however, that (i) Licensor
may assign this Agreement or any of its rights and obligations hereunder
without the consent of Symphony GenIsis (A) to an Affiliate or in connection
with a merger or the sale of all or substantially all of the assets of the
Licensor to which this Agreement relates, or (B) to the Surviving Entity in the
event Licensor undergoes a Change of Control in compliance with Article 14 of
the Amended and Restated Research and Development Agreement, provided, however, the Licensed
Patent Rights and Licensed Know-How shall not be construed, as a result of such
assignment, to include any patent rights, know-how, trade secret, and other
intellectual property that, prior to such Change of Control, were owned or
Controlled by the Person (other than Licensor) involved in such Change of
Control; and (ii) after expiration of the Term without Licensor’s exercise of
the Purchase Option, Symphony GenIsis may assign this Agreement to any Person
without the prior, written consent of Licensor. 
Assignment of this Agreement by either Party shall not relieve the
assignor of its obligations hereunder. 
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors and permitted assigns.

 

8.4.          Headings.  The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of the Agreement.

 

8.5.          Independent
Contractor.  Each Party shall be
acting as an independent contractor in performing under this Agreement and
shall not be considered or deemed to be an agent, employee, joint venturer or
partner of the other Party.

 

8.6.          Severability.  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any Party.

 

8.7.          No Third-Party
Beneficiaries.  Except with respect
to certain indemnification obligations and liability limitations pursuant to
ARTICLE 6, nothing in this Agreement, either express or implied, is intended to
or shall confer upon any third party any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.

 

8.8.          Compliance with
Laws.  In performing under this
Agreement, each Party shall comply with all applicable Laws rules and
regulations, including without limitation, the United States Food and Drug
Administration and the United States Export Administration Regulations.

 

19

 

8.9.          Amendment.  This Agreement may not be amended or modified
except by an instrument in writing signed by authorized representatives of
Licensor and Symphony GenIsis.

 

8.10.        Governing Law; Consent to
Jurisdiction and Service of Process.

 

(a)   This Agreement shall be governed by, and construed in accordance
with, the Laws of the State of New York.

 

(b)   Each of the Parties hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting
in The City of New York, Borough of Manhattan, and any appellate court from any
jurisdiction thereof, in any action or proceeding arising out of or relating to
this Agreement, or for recognition or enforcement of any judgment, and each of
the Parties hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any
such New York State court or, to the fullest extent permitted by Law, in such
federal court.  Each of the Parties
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by Law. 
Nothing in this Agreement shall affect any right that any Party may
otherwise have to bring any action or proceeding relating to this Agreement.

 

(c)   Each of the Parties irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any New York State or federal
court.  Each of the Parties hereby
irrevocably waives, to the fullest extent permitted by Law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

 

8.11.        WAIVER OF JURY
TRIAL.  EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT.

 

8.12.        Counterparts.  This Agreement may be executed in one or more
counterparts, and by the respective Parties in separate counterparts, each of
which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same Agreement.

 

8.13.        No Waiver.  The failure of either Party to enforce at any
time for any period the provisions of or any rights deriving from this
Agreement shall not be construed to be a waiver of such provisions or rights or
the right of such Party thereafter to enforce such provisions.

 

SIGNATURES FOLLOW ON NEXT PAGE

 

20

 

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

 

 

	
  SYMPHONY GENISIS, INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Neil J.
  Sandler

  	
   

  
	
   

  	
  Name: Neil J.
  Sandler

  
	
   

  	
  Title: Chairman
  of the Board

  
	
   

  
	
   

  
	
  SYMPHONY GENISIS HOLDINGS LLC

  
	
   

  
	
  By:

  	
  Symphony Capital Partners, L.P.,

  
	
   

  	
  its Manager

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Symphony Capital GP, L.P.,

  
	
   

  	
  its general partner

  
	
   

  	
   

  
	
  By:

  	
  Symphony GP, LLC,

  
	
   

  	
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Mark Kessel

  	
   

  
	
   

  	
  Name: Mark Kessel

  
	
   

  	
  Title: Managing
  Member

  
	
   

  
	
   

  	
   

  	
   

  
	
  ISIS PHARMACEUTICALS, INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/ B. Lynne
  Parshall, J.D.

  	
   

  
	
   

  	
  Name: B. Lynne
  Parshall, J.D.

  
	
   

  	
  Title: Executive
  Vice President, Chief Financial Officer and Secretary

  
					

 

 

ANNEX A

 

DEFINITIONS

 

CERTAIN DEFINITIONS

 

“$” means United States dollars.

 

“Accredited Investor” has the meaning set
forth in Rule 501(a) of Regulation D promulgated under the Securities Act of
1933, as amended.

 

“Act” means the Delaware Limited Liability
Company Act, 6 Del. C. § 18-101 et seq.

 

“Ad Hoc Meeting” has the meaning set
forth in Paragraph 6 of Annex B of the Amended and Restated Research and
Development Agreement.

 

“Additional Party” has the meaning set
forth in Section 13 of the Confidentiality Agreement.

 

“Additional Regulatory Filings” means
such Governmental Approvals as required to be made under any law applicable to
the purchase of the Symphony GenIsis Equity Securities under the Purchase
Option Agreement.

 

“Adjusted
Capital Account Deficit” has the meaning set forth in Section
1.01 of the Holdings LLC Agreement.

 

“Affected Member” has the meaning set
forth in Section 27 of the Investors LLC Agreement.

 

“Affiliate” means, with respect to any
Person (i) any Person directly or indirectly controlling, controlled by or
under common control with such Person, (ii) any officer, director, general
partner, member or trustee of such Person, or (iii) any Person who is an
officer, director, general partner, member or trustee of any Person described in
clauses (i) or (ii) of this sentence. 
For purposes of this definition, the terms “controlling,” “controlled by”
or “under common control with” shall mean the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a Person or entity, whether through the ownership of voting securities, by
contract or otherwise, or the power to elect at least 50% of the directors,
managers, general partners, or persons exercising similar authority with
respect to such Person or entities.

 

“Amended and Restated Research and Development Agreement”
means the Amended and Restated Research and Development Agreement dated as of
the Closing Date, among Isis, Holdings and Symphony GenIsis.

 

“ApoB”
means apolipoprotein B.

 

A-1

 

“ApoB
Product” means a pharmaceutical composition comprising an ASO
that targets ApoB.

 

“ApoB
Program” means the identification, development, manufacture
and/or use of any ApoB Product in accordance with the Development Plan.

 

“ASO”
means an oligonucleotide or analog, mimic or mimetic thereof having a sequence
that selectively modulates protein synthesis via the binding, partially or
wholly, of such oligomeric compound to a complementary nucleic acid sequence
encoding, directly or indirectly, said protein.

 

“Asset Value” has the meaning set forth
in Section 1.01 of the Holdings LLC Agreement.

 

“Auditors” means an independent certified
public accounting firm of recognized national standing.

 

“Balance
Sheet Deficiency Date” has the meaning set forth in Section
1(c)(iii) of the Purchase Option Agreement.

 

“Bankruptcy Code” means the United States
Bankruptcy Code.

 

“Business Day” means any day other than Saturday,
Sunday or any other day on which commercial banks in The City of New York or
the City of San Francisco are authorized or required by law to remain closed.

 

“Capital Contributions” has the meaning
set forth in Section 1.01 of the Holdings LLC Agreement.

 

“Capitalized Leases” means all leases
that have been or should be, in accordance with GAAP, recorded as capitalized
leases.

 

“Cash Available for Distribution” has the
meaning set forth in Section 1.01 of the Holdings LLC Agreement.

 

“Chair” has the meaning set forth in
Paragraph 4 of Annex B to the Amended and Restated Research and Development
Agreement.

 

“Change of Control” means and includes
the occurrence of any of the following events, but specifically excludes
(i) acquisitions of capital stock directly from Isis for cash, whether in
a public or private offering, (ii) sales of capital stock by stockholders
of Isis, and (iii) acquisitions of capital stock by or from any employee
benefit plan or related trust:

 

(a)           the
merger, reorganization or consolidation of Isis into or with another
corporation or legal entity in which Isis’ stockholders holding the right to
vote with respect to matters generally immediately preceding such merger,
reorganization or consolidation, own less than fifty percent (50%) of the
voting securities of the surviving entity; or

 

A-2

 

(b)           the
sale of all or substantially all of Isis’ assets or business.

 

“Class A Member” means a holder of a
Class A Membership Interest.

 

“Class A Membership Interest” means a
Class A Membership Interest in Holdings.

 

“Class B Member” means a holder of a
Class B Membership Interest.

 

“Class B Membership Interest” means a
Class B Membership Interest in Holdings.

 

“Class C Member” means a holder of a
Class C Membership Interest.

 

“Class C Membership Interest” means a
Class C Membership Interest in Holdings.

 

“Client Schedules” has the meaning set
forth in Section 5(b) of the RRD Services Agreement.

 

“Clinical Budget Component” has the
meaning set forth in Section 4.1 of the Amended and Restated Research and Development
Agreement.

 

“Closing Date” means April 7, 2006.

 

“CMC” means the chemistry, manufacturing
and controls documentation as required for filings with Regulatory Authority
relating to the manufacturing, production and testing of drug products.

 

“Code” means the Internal Revenue Code of
1986, as amended from time to time.

 

“Committed Capital”
means $75,000,000.00.

 

“Common Stock” means the common stock,
par value $0.01 per share, of Symphony GenIsis.

 

“Company Expenses” has the meaning set
forth in Section 5.09 of the Holdings LLC Agreement.

 

“Company Property” has the meaning set
forth in Section 1.01 of the Holdings LLC Agreement.

 

“Confidential Information” has the
meaning set forth in Section 2 of the Confidentiality Agreement.

 

“Confidentiality
Agreement” means the Confidentiality Agreement, dated as of the
Closing Date, among Symphony GenIsis, Holdings, Isis, SCP, SSP, Investors,
Symphony Capital and RRD, as such agreement may be amended or
amended and restated from time to time.

 

A-3

 

“Conflict
Transaction” has the meaning set forth in Article X of the
Symphony  GenIsis Charter.

 

“Control”
means, with respect to any material, information or intellectual property
right, that a Party owns or has a license to such item or right, and has the
ability to grant the other Party access, a license or a sublicense (as
applicable) in or to such item or right as provided in the Operative Documents
without violating the terms of any agreement or other arrangement with any
third party.

 

“Debt” of any Person means,
without duplication:

 

(a)           all
indebtedness of such Person for borrowed money,

 

(b)           all
obligations of such Person for the deferred purchase price of property or
services (other than any portion of any trade payable obligation that shall not
have remained unpaid for 91 days or more from the later of (A) the original due
date of such portion and (B) the customary payment date in the industry and
relevant market for such portion),

 

(c)           all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments,

 

(d)           all
obligations of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such
Person (whether or not the rights and remedies of the seller or lender under
such agreement in an event of default are limited to repossession or sale of
such property),

 

(e)           all
Capitalized Leases to which such Person is a party,

 

(f)            all
obligations, contingent or otherwise, of such Person under acceptance, letter
of credit or similar facilities,

 

(g)           all
obligations of such Person to purchase, redeem, retire, defease or otherwise
acquire for value any Equity Securities of such Person,

 

(h)           the
net amount of all financial obligations of such Person in respect of Hedge
Agreements,

 

(i)            the
net amount of all other financial obligations of such Person under any contract
or other agreement to which such Person is a party,

 

(j)            all
Debt of other Persons of the type described in clauses (a) through (i)
above guaranteed, directly or indirectly, in any manner by such Person, or in
effect guaranteed, directly or indirectly, by such Person through an agreement
(A) to pay or purchase such Debt or to advance or supply funds for the
payment or purchase of such Debt, (B) to purchase, sell or lease (as
lessee or lessor) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Debt or to assure the
holder of such Debt against loss, (C) to supply funds to or in any other

 

A-4

 

manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether such property is received or such
services are rendered) or (D) otherwise to assure a creditor against loss,
and

 

(k)           all
Debt of the type described in clauses (a) through (i) above secured by (or
for which the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Encumbrance on property (including accounts
and contract rights) owned or held or used under lease or license by such
Person, even though such Person has not assumed or become liable for payment of
such Debt.

 

“Development Budget” means the budget
(comprised of the Management Budget Component and the Clinical Budget
Component) for the implementation of the Development Plan (the initial form of
which was agreed
upon by Isis and Symphony GenIsis as of the Closing Date and attached to the Amended and Restated
Research and Development Agreement as Annex D thereto), as may be further
developed and revised from time to time in accordance with the Development
Committee Charter and the Amended and Restated Research and Development
Agreement.

 

“Development Committee” has the meaning set
forth in Article 3 of the Amended and Restated Research and Development
Agreement.

 

“Development Committee Charter” has the
meaning set forth in Article 3 of the Amended and Restated Research and
Development Agreement.

 

“Development
Committee Member” has the meaning set forth in Paragraph 1 of
Annex B to the Amended and Restated Research and Development Agreement.

 

“Development
Plan” means the development plan covering all the Programs
(the initial form of which was agreed upon by Isis and Symphony GenIsis as of the Closing Date and
attached to the Amended and Restated Research and Development Agreement as
Annex C thereto), as may be further developed and revised from time to time in
accordance with the Development Committee Charter and the Amended and Restated
Research and Development Agreement.

 

“Development Services” has the meaning
set forth in Section 1(b) of the RRD Services Agreement.

 

“Director(s)” means the Persons
identified as such in the Preliminary Statement of the Indemnification
Agreement (including such Persons as may become parties thereto after the date
hereof).

 

“Disclosing Party” has the meaning set
forth in Section 3 of the Confidentiality Agreement.

 

“Discontinuation Closing Date” has the
meaning set forth in Section 11.1 of the Amended and Restated Research and
Development Agreement.

 

A-5

 

“Discontinuation Date” means any date
designated by Symphony GenIsis which shall occur on or after the 90th
day following the receipt by Isis of notice from Symphony GenIsis of Symphony
GenIsis’ intent to discontinue a Program in accordance with the terms of the
Amended and Restated Research and Development Agreement.

 

“Discontinuation Option” has the meaning
set forth in Section 11.1 of the Amended and Restated Research and Development
Agreement.

 

“Discontinuation Price” has the meaning
set forth in Section 11.1 of the Amended and Restated Research and Development
Agreement.

 

“Discontinued Program” has the meaning
set forth in Section 2.12 of the Novated and Restated Technology License
Agreement.

 

“Disinterested Directors” has the meaning
set forth in Article IX of the Symphony GenIsis Charter.

 

“Distribution” has the meaning set forth
in Section 1.01 of the Holdings LLC Agreement.

 

“Early
Purchase
Option Exercise” has the meaning set forth in Section 1(c)(iv)
of the Purchase Option Agreement.

 

“Effective Registration Date” has the
meaning set forth in Section 1(b) of the Registration Rights Agreement

 

“Encumbrance” means (i) any security
interest, pledge, mortgage, lien (statutory or other), charge or option to
purchase, lease or otherwise acquire any interest, (ii) any adverse claim,
restriction, covenant, title defect, hypothecation, assignment, deposit
arrangement, license or other encumbrance of any kind, preference or priority,
or (iii) any other security agreement or preferential arrangement of any kind
or nature whatsoever (including, without limitation, any conditional sale or
other title retention agreement).

 

“Enhancements” means findings, improvements,
discoveries, inventions, additions, modifications, enhancements, derivative
works, clinical development data, or changes to the Licensed Intellectual
Property and/or Regulatory Files, in each case whether or not patentable.

 

“Equity Securities” means, with respect
to any Person, shares of capital stock of (or other ownership or profit
interests in) such Person, warrants, options or other rights for the purchase
or other acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
other acquisition from such Person of such shares (or such other interests),
and other ownership or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or other
interests are authorized or otherwise existing on any date of determination.

 

A-6

 

“ERISA” means the United States Employee
Retirement Income Security Act of 1974, as amended.

 

“Excepted
Debt” has the meaning set forth in Section 5(c)(iii) of the
Purchase Option Agreement.

 

“Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.

 

“Exclusive
Field” means human therapeutics, but does not include the
Nonexclusive Field.

 

“Existing NDA”
has the meaning set forth in Section 2 of the Confidentiality Agreement.

 

“Expert” has the meaning set
forth in Section 11.1(c) of the Amended and Restated Research and Development
Agreement.

 

“External
Directors” means, at any time, up to two (2) Persons elected to
the Symphony GenIsis Board after the Closing Date (who shall be neither
employees of the Symphony Capital nor of Isis) in accordance with the Symphony
GenIsis Charter, the Symphony GenIsis By-laws and Section 4(b)(iv) of the
Purchase Option Agreement.

 

“FDA” means the United States Food and
Drug Administration or its successor agency in the United States.

 

“FDA Sponsor” has the meaning set forth
in Section 5.1 of the Amended and Restated Research and Development
Agreement.

 

“Final
Termination Date” has the meaning set forth in Section 1(c)(iii)
of the Purchase Option Agreement.

 

“Financial
Audits” has the meaning set forth in Section 6.6 of the Amended
and Restated Research and Development Agreement.

 

“Financing” has the meaning set forth in
the Preliminary Statement of the Purchase Option Agreement.

 

“Fiscal Year” has the meaning set forth
in each Operative Document in which it appears.

 

“Form S-3” means the Registration
Statement on Form S-3 as defined under the Securities Act.

 

“FTE” has the meaning set forth in Section
4.1 of the
Amended and Restated Research and Development Agreement.

 

A-7

 

“Funds Termination Date” has
the meaning set forth in Section 1(c)(iii) of the Purchase Option Agreement.

 

“Funds
Termination Notice” has the meaning set forth in Section 1(c)(iii) of the
Purchase Option Agreement.

 

“GAAP”
means generally accepted accounting principles in effect in the United States
of America from time to time.

 

“GCCR”
means a glucocorticoid receptor.

 

“GCCR
Product” means a pharmaceutical composition comprising an ASO
that targets GCCR.

 

“GCCR
Program” means the identification, development, manufacture
and/or use of any GCCR Product in accordance with the Development Plan.

 

“GCGR”
means a glucagon receptor.

 

“GCGR
Product” means a pharmaceutical composition comprising an ASO
that targets GCGR.

 

“GCGR
Program” means the identification, development, manufacture
and/or use of any GCGR Product in accordance with the Development Plan.

 

“GenIsis
Relevant Action” means an action against others in the courts,
administrative agencies or otherwise to prevent or terminate infringement,
misappropriation, illegal use or misuse of the Licensed Patent Rights or other
Licensed Intellectual Property due to the manufacture, use, sale or importation
of an ASO that targets ApoB, GCCR or GCGR, as applicable, in the Exclusive
Field.

 

“Governmental Approvals” means
authorizations, consents, orders, declarations or approvals of, or filings
with, or terminations or expirations of waiting periods imposed by any
Governmental Authority.

 

“Governmental Authority” means any United
States or non-United States federal, national, supranational, state,
provincial, local, or similar government, governmental, regulatory or
administrative authority, agency or commission or any court, tribunal, or
judicial or arbitral body.

 

“Governmental Order” means any order,
writ, judgment, injunction, decree, stipulation, determination or award entered
by or with any Governmental Authority.

 

“Hedge Agreement” means any interest rate
swap, cap or collar agreement, interest rate future or option contract,
currency swap agreement, currency future or option contract or other similar
hedging agreement.

 

A-8

 

“Holdings” means Symphony GenIsis
Holdings LLC, a Delaware limited liability company.

 

“Holdings Claims” has the meaning set
forth in Section 5.01 of the Warrant Purchase Agreement.

 

“Holdings LLC Agreement” means the
Amended and Restated Limited Liability Company Agreement of Holdings dated as
of the Closing Date.

 

“HSR Filings” means the pre-merger
notification and report forms required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.

 

“IND” means an Investigational New Drug
Application, as described in 21 U.S.C. § 355(i)(1) and 21 C.F.R. § 312 in the
regulations promulgated by the United States Food and Drug Administration, or
any foreign equivalent thereof.

 

“Indemnification Agreement” means the
Indemnification Agreement among Symphony GenIsis and the Directors named
therein, dated as of the Closing Date, as such agreement may be amended or
amended and restated from time to time.

 

“IND-Enabling
Studies” means the pharmacokinetic and toxicology studies
required for filing an IND.

 

“Indemnified
Party” has the meaning set forth in each Operative Document in
which it appears.

 

“Indemnified
Proceeding” has the meaning set forth in each Operative Document
in which it appears.

 

“Indemnifying
Party” has the meaning set forth in each Operative Document in
which it appears.

 

“Initial Development Budget” means the
initial development budget prepared by representatives of Symphony GenIsis and
Isis prior to the Closing Date, and attached to the Amended and Restated
Research and Development Agreement as Exhibit D thereto.

 

“Initial Development Plan” means the
initial development plan prepared by representatives of Symphony GenIsis and
Isis prior to the Closing Date, and attached to the Amended and Restated
Research and Development Agreement as Exhibit C thereto.

 

“Initial Holdings LLC Agreement” means
the Agreement of Limited Liability Company of Holdings, dated March 8, 2006.

 

“Initial Investors LLC Agreement” means
the Agreement of Limited Liability Company of Investors, dated March 8, 2006.

 

“Initial LLC Member” has the meaning set
forth in Section 1.01 of the Holdings LLC Agreement.

 

A-9

 

“Interest Certificate” has the meaning
set forth in Section 1.01 of the Holdings LLC Agreement.

 

“Investment Company Act” means the
Investment Company Act of 1940, as amended.

 

“Investment Overview” means the
investment overview describing the transactions entered into pursuant to the
Operative Documents.

 

“Investment Policy” has the meaning set
forth in Section 1(a)(vi) of the RRD Services Agreement.

 

“Investors” means Symphony GenIsis
Investors LLC.

 

“Investors LLC Agreement” means the
Amended and Restated Agreement of Limited Liability Company of Investors dated
as of the Closing Date

 

“IRS” means the U.S. Internal Revenue
Service.

 

“Isis” means Isis Pharmaceuticals, Inc.,
a Delaware corporation.

 

“Isis
2005 10-K” means the annual report for fiscal year 2005 filed by
Isis on Form 10-K on March 16, 2006, pursuant to the Exchange Act.

 

“Isis Accounting Advisor” means Ernst
& Young LLP or Deloitte & Touche USA LLP.

 

“Isis Common Stock” means the common
stock, par value $0.001 per share, of Isis.

 

“Isis
Commitment Amount” has the meaning set forth in Paragraph 14 of
Annex B to the Amended and Restated Research and Development Agreement.

 

“Isis Common Stock Valuation” has the
meaning set forth in Section 2(e) of the Purchase Option Agreement.

 

“Isis
Funding Notice” has the meaning set forth in Section 2 of the Research
Cost Sharing and Extension Agreement.

 

“Isis
Obligations” has the meaning set forth
in Section 6.1 of the Amended and Restated Research and Development Agreement.

 

“Isis
Personnel” has the meaning set forth
in Section 8.4 of the Amended and Restated Research and Development Agreement.

 

“Isis Subcontractor”
has the meaning set forth in Section 6.2 of the Amended and Restated Research
and Development Agreement.

 

A-10

 

“Key Personnel” means those Isis Personnel
listed on Schedule 6.4 to the Amended and Restated Research and Development
Agreement, as such schedule may be updated from time to time by mutual
agreement of the parties to the Amended and Restated Research and Development
Agreement.

 

“Knowledge” means the
actual (and not imputed) knowledge of the executive officers of Isis, without
the duty of inquiry or investigation.

 

“Law” means any law,
statute, treaty, constitution, regulation, rule, ordinance, order or
Governmental Approval, or other governmental restriction, requirement or
determination, of or by any Governmental Authority.

 

“License” has the
meaning set forth in the Preliminary Statement of the Purchase Option
Agreement.

 

“Licensed Intellectual Property”
means the Licensed Patent Rights, Symphony GenIsis Enhancements, Licensor
Enhancements and the Licensed Know-How.

 

“Licensed Know-How”
means any and all proprietary technology that is Controlled by Licensor prior
to the unexercised expiration or termination of the Purchase Option that
relates to, or is exploitable in connection with, the Licensed Patent Rights,
Regulatory Files, Products or the Programs, including without limitation,
manufacturing processes or protocols, know-how, writings, documentation, data,
technical information, techniques, results of experimentation and testing,
diagnostic and prognostic assays, specifications, databases, any and all
laboratory, research, pharmacological, toxicological, analytical, quality
control pre-clinical and clinical data, and other information and materials,
whether or not patentable.

 

“Licensed Patent Rights”
means:

 

(a)           any
and all patents, patent applications and invention disclosures Controlled by
Licensor prior to the unexercised expiration or termination of the Purchase
Option and relating to, or exploitable in connection with, any Product and/or
any Program;

 

(b)           any
and all reissues, continuations, divisionals, continuations-in-part,
reexaminations, renewals, substitutes, extensions or foreign counterparts of
the patents, patent applications and invention disclosures described in (a)
filed prior to the unexercised expiration or termination of the Purchase
Option; and

 

(c)           any
and all reissues, continuations, divisionals, continuations-in-part,
reexaminations, renewals, substitutes, extensions or foreign counterparts of
the patents, patent applications and invention disclosures described in (a) or
(b) filed after the unexercised expiration or termination of the Purchase
Option but solely to the extent the subject matter in any such continuation-in-part
embodies Licensed Know-How or has been disclosed in the patents or patent
applications described in (a) or (b).

 

Licensed
Patent Rights include any and all patents and patent applications that claim
Licensor Enhancements or Symphony GenIsis Enhancements and Program-Specific
Patents.

 

A-11

 

“Licensor” means Isis.

 

“Licensor Enhancements” means all
findings, improvements, discoveries, inventions, additions, modifications,
enhancements, derivative works, clinical development data, or changes to the
Licensed Know-How, Regulatory Files, Products or the Programs, in each case,
developed by Licensor during the Term (in each case whether or not patentable),
to the extent such items do not otherwise qualify as Symphony GenIsis
Enhancements hereunder, regardless of whether such work is funded by Symphony
GenIsis or Isis.

 

“Lien” has the meaning set forth in
Section 1.01 of the Holdings LLC Agreement.

 

“Liquidating Event” has the meaning set
forth in Section 8.01 of the Holdings LLC Agreement.

 

“LLC Agreements” means the Initial
Holdings LLC Agreement, the Holdings LLC Agreement, the Initial Investors LLC
Agreement and the Investors LLC Agreement.

 

“Loss” has the meaning set forth in each
Operative Document in which it appears.

 

“Major
Market” means the United States, Germany, the United Kingdom,
Italy, Spain, Japan, India, France and Canada.

 

“Management Budget Component” has the
meaning set forth in Section 4.1 of the Amended and Restated Research and
Development Agreement.

 

“Management Fee” has the meaning set
forth in Section 6(a) of the RRD Services Agreement.

 

“Manager” means (i) for each LLC
Agreement in which it appears, the meaning set forth in such LLC Agreement, and
(ii) for each other Operative Document in which it appears, RRD in its capacity
as manager of Symphony GenIsis.

 

“Management Services” has the meaning set
forth in Section 1(a) of the RRD Services Agreement.

 

“Manager Event” has the meaning set forth
in Section 3.01(g) of the Holdings LLC Agreement.

 

“Material Adverse Effect” means, with
respect to any Person, a material adverse effect on (i) the business, assets,
property or condition (financial or otherwise) of such Person or, (ii) its
ability to comply with and satisfy its respective agreements and obligations
under the Operative Documents or, (iii) the enforceability of the obligations
of such Person of any of the Operative Documents to which it is a party.

 

“Material Subsidiary” means, at
any time, a Subsidiary of Isis having assets in an amount equal to at least 5%
of the amount of total consolidated assets of Isis and its Subsidiaries
(determined as of the last day of the most recent reported fiscal quarter of
Isis) or revenues or net income in an amount equal to at least 5% of the amount
of total consolidated revenues or net

 

A-12

 

income of Isis
and its Subsidiaries for the 12-month period ending on the last day of the most
recent reported fiscal quarter of Isis.

 

“Medical Discontinuation Event” means (a)
as specified in each Protocol, those data that, if collected in such Protocol,
demonstrate that such Protocol should not be continued or (b) a series of
adverse events, side effects or other undesirable outcomes that, when collected
in a Protocol, would cause a reasonable FDA Sponsor to discontinue such
Protocol.

 

“Membership Interest” means (i) for each
LLC Agreement in which it appears, the meaning set forth in such LLC Agreement,
and (ii) for each other Operative Document in which it appears, the meaning set
forth in the Holdings LLC Agreement.

 

“MOE
Gapmer” means a single stranded antisense oligonucleotide of
less than [***] nucleotides (i) wherein all of the backbone linkages are
modified by adding a sulfur at the non-bridging oxygen (phosphorothioate) and
(ii) comprising a region of at least [***] unsubstituted 2′-deoxy
nucleotides with the remaining nucleotides contain a 2′-O-(methoxyethyl)
substitution at the 2′ position.

 

“NASDAQ” means the National Association
of Securities Dealers Automated Quotation System.

 

“NDA” means a New Drug Application, as
defined in the regulations promulgated by the United States Food and Drug
Administration, or any foreign equivalent thereof.

 

“Nonexclusive
Field” means (i) manufacturing (including analytical methods)
ASOs, (ii) formulating ASOs, (iii) conducting Research on ASOs and/or (iv)
supplying ASOs solely to conduct Research.

 

“Non-Isis Capital Transaction” means any
(i) sale or other disposition of all or part of the Symphony GenIsis Shares or
all or substantially all of the operating assets of Symphony GenIsis, to a
Person other than Isis or an Affiliate of Isis or (ii) distribution in kind of
the Symphony GenIsis Shares following the expiration of the Purchase Option.

 

“Novated
and Restated Technology License Agreement” means the Novated and
Restated Technology License Agreement, dated as of the Closing Date, among
Isis, Symphony GenIsis and Holdings.

 

“Operative Documents” means,
collectively, the Indemnification Agreement, the Holdings LLC Agreement, the
Purchase Option Agreement, the Warrant Purchase Agreement, the Registration
Rights Agreement, the Subscription Agreement, the Technology License Agreement,
the Novated
and Restated Technology License Agreement, the RRD Services Agreement,
the Research and Development Agreement, the Research Cost Sharing and Extension
Agreement, the Amended and Restated Research and Development Agreement, the
Confidentiality Agreement, and each other certificate and agreement executed in
connection with any of the foregoing documents.

 

“Organizational Documents” means any
certificates or articles of incorporation or formation, partnership agreements,
trust instruments, bylaws or other governing documents.

 

A-13

 

“Partial Stock Payment” has the meaning
set forth in Section 3(a)(iii) of the Purchase Option Agreement.

 

“Party(ies)” means, for each Operative
Document or other agreement in which it appears, the parties to such Operative
Document or other agreement, as set forth therein.  With respect to any agreement in which a
provision is included therein by reference to a provision in another agreement,
the term “Party” shall be read to refer to the parties to the document at hand,
not the agreement that is referenced.

 

“Payment Terms” has the meaning set forth
in Section 8.2 of the Amended and Restated Research and Development Agreement.

 

“Percentage” has the meaning set forth in
Section 1.01 of the Holdings LLC Agreement.

 

“Permitted Investments” has the meaning
set forth in Section 1.01 of the Holdings LLC Agreement.

 

“Permitted Lien” has the meaning set
forth in Section 1.01 of the Holdings LLC Agreement.

 

“Person” means any individual,
partnership (whether general or limited), limited liability company,
corporation, trust, estate, association, nominee or other entity.

 

“Personnel” of a Party means such Party,
its employees, subcontractors, consultants, representatives and agents.

 

“Prime Rate” means the quoted “Prime
Rate” at JPMorgan Chase Bank or, if such bank ceases to exist or is not quoting
a base rate, prime rate reference rate or similar rate for United States dollar
loans, such other major money center commercial bank in New York City selected
by the Manager.

 

“Products”
means an ApoB Product, a GCCR Product and/or a GCGR Product.

 

“Profit” has the meaning set forth in
Section 1.01 of the Holdings LLC Agreement.

 

“Programs”
means the ApoB Program, the GCCR Program and/or the GCGR Program.

 

“Program-Specific Patents”
means

 

(a)           any
and all patents, patent applications and invention disclosures Controlled by
Licensor prior to the unexercised expiration or termination of the Purchase
Option that claim any composition of matter comprising, or method of using, an
ASO targeting any of ApoB, GCCR or GCGR, including but not limited to, the
patents and patent applications listed on Annex C to the Novated and Restated
Technology License Agreement;

 

A-14

 

(b)           any
and all reissues, continuations, divisionals, continuations-in-part, reexaminations,
renewals, substitutes, extensions or foreign counterparts of the patents,
patent applications and invention disclosures described in (a) filed prior to
the unexercised expiration or termination of the Purchase Option; and

 

(c)           any
and all reissues, continuations, divisionals, continuations-in-part,
reexaminations, renewals, substitutes, extensions or foreign counterparts of
the patents, patent applications and invention disclosures described in (a) or
(b) filed after the unexercised expiration or termination of the Purchase
Option but solely to the extent the subject matter in such any
continuation-in-part embodyies Licensed Know-How or has been disclosed in the
patents or patent applications described in (a) or (b).

 

“Protocol” means a
written protocol that meets the substantive requirements of Section 6 of the
ICH Guideline for Good Clinical Practice as adopted by the FDA, effective
May 9, 1997 and is included within the Development Plan or later modified
or added to the Development Plan pursuant to the Amended and Restated Research
and Development Agreement.

 

“Public Companies” has the meaning set
forth in Section 5(e) of the Purchase Option Agreement.

 

“Purchase Option” has the meaning set
forth in Section 1(a) of the Purchase Option Agreement.

 

“Purchase Option Agreement” means this
Purchase Option Agreement dated as of the Closing Date, among Isis, Holdings
and Symphony GenIsis.

 

“Purchase
Option Closing” has the meaning set forth in Section 2(a) of the
Purchase Option Agreement.

 

“Purchase Option Closing Date” has the
meaning set forth in Section 2(a) of the Purchase Option Agreement.

 

“Purchase Option Commencement Date” has
the meaning set forth in Section 1(c)(iii) of the Purchase Option Agreement.

 

“Purchase Option Exercise Date” has the
meaning set forth in Section 2(a) of the Purchase Option Agreement.

 

“Purchase Option Exercise Notice” has the
meaning set forth in Section 2(a) of the Purchase Option Agreement.

 

“Purchase Option Interim Date” has the
meaning set forth in Section 2(b)(i) of the Purchase Option Agreement.

 

“Purchase Option Period” has the meaning
set forth in Section 1(c)(iii) of the Purchase Option Agreement.

 

A-15

 

“Purchase Price” has the meaning set
forth in Section 2(b) of the Purchase Option Agreement.

 

“Put
Option” has the meaning set forth in Section 2A of the Purchase
Option Agreement.

 

“Put
Option Exercise Notice” has the meaning set forth in Section 2A
of the Purchase Option Agreement.

 

“QA Audits” has the meaning set forth in
Section 6.5 of the Amended and Restated Research and Development Agreement.

 

“Quarterly Price” has the meaning set
forth in Section 2(b)(i) of the Purchase Option Agreement.

 

“Registration Rights Agreement” means the
Registration Rights Agreement dated as of the Closing Date, between Isis and
Holdings.

 

“Registration Statement”
has the meaning set forth in Section 1(b) of the Registration Rights Agreement.

 

“Regulatory Authority” means the United
States Food and Drug Administration, or any successor agency in the United
States, or any health regulatory authority(ies) in any other country that is a
counterpart to the FDA and has responsibility for granting registrations or
other regulatory approval for the marketing, manufacture, storage, sale or use
of drugs in such other country.

 

“Regulatory Allocation” has the meaning
set forth in Section 3.06 of the Holdings LLC Agreement.

 

“Regulatory Files” means any IND, NDA or
any other filings filed with any Regulatory Authority with respect to the
Programs.

 

“Representative” of any Person means such
Person’s shareholders, principals, directors, officers, employees, members,
managers and/or partners.

 

“Research”
means research, including gene function, gene expression and target validation
research, which may include small pilot toxicology studies but excludes
IND-Enabling Studies or dosing humans. 
Research does not include commercialization.

 

“Research
Cost Sharing and Extension Agreement” means the Research Cost
Sharing and Extension Agreement dated as of the Closing Date, among Isis,
Holdings and Symphony GenIsis, Inc..

 

“Research and Development Agreement”
means the Research and Development Agreement dated as of the Closing Date,
between Isis and Holdings.

 

“RRD” means RRD International, LLC, a
Delaware limited liability company.

 

A-16

 

“RRD
FTE Budget” means the budget attached to the RRD Services
Agreement as Exhibit 3 thereto.

 

“RRD Indemnified Party” has the meaning
set forth in Section 10(a) of the RRD Services Agreement.

 

“RRD Investment
Personnel” has the meaning set forth in Section 1(a)(v) of the
RRD Services Agreement.

 

“RRD Loss” has the meaning set forth in
Section 10(a) of the RRD Services Agreement.

 

“RRD Personnel” has the meaning set forth
in Section 1(a)(ii) of the RRD Services Agreement.

 

“RRD Services Agreement” means the RRD
Services Agreement between Symphony GenIsis and RRD, dated as the Closing Date,
2006.

 

“Schedule K-1” has the meaning set forth
in Section 9.02(a) of the Holdings LLC Agreement.

 

“Scheduled Meeting” has the meaning set
forth in Paragraph 6 of Annex B of the Amended and Restated Research and
Development Agreement.

 

“Scientific Discontinuation Event” has
the meaning set forth in Section 4.2(c) of the Amended and Restated Research
and Development Agreement.

 

“SCP” means Symphony Capital Partners,
L.P., a Delaware limited partnership.

 

“SEC” means the United States Securities
and Exchange Commission.

 

“Securities Act” means the Securities Act
of 1933, as amended.

 

“Selling
Stockholder Questionnaire” has the meaning set forth in Section
4(a) of the Registration Rights Agreement.

 

“Shareholder” means any Person who owns any Symphony GenIsis Shares.

 

“Solvent” has the meaning set forth in
Section 1.01 of the Holdings LLC Agreement.

 

“SSP” means Symphony Strategic Partners,
LLC, a Delaware limited liability company.

 

“Stock Payment Date” has the meaning set
forth in Section 2 of the Subscription Agreement.

 

“Stock Purchase Price” has the meaning
set forth in Section 2 of the Subscription Agreement.

 

A-17

 

“Subcontracting Agreement” has the
meaning set forth in Section 6.2 of the Amended and Restated Research and
Development Agreement.

 

“Sublicensed
Intellectual Property” has the meaning set forth in Section 3.2
of the Novated and Restated Technology License Agreement.

 

“Sublicense
Obligations” has the meaning set forth in Section 3.2 of the
Novated and Restated Technology License Agreement.

 

“Subscription Agreement” means the
Subscription Agreement between Symphony GenIsis and Holdings, dated as the
Closing Date.

 

“Subsidiary” of any Person means any
corporation, partnership, joint venture, limited liability company, trust or
estate of which (or in which) more than 50% of (a) the issued and outstanding
capital stock having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether at the time capital
stock of any other class or classes of such corporation shall or might have
voting power upon the occurrence of any contingency); (b) the interest in the
capital or profits of such partnership, joint venture or limited liability
company; or (c) the beneficial interest in such trust or estate is at the time
directly or indirectly owned or controlled by such Person, by such Person and
one or more of its other Subsidiaries or by one or more of such Person’s other
Subsidiaries.

 

“Surviving Entity” means the surviving legal entity
which is surviving entity to Isis after giving effect to a Change of Control.

 

“Symphony Capital” means Symphony Capital
LLC, a Delaware limited liability company.

 

“Symphony Fund(s)” means Symphony Capital
Partners, L.P., a Delaware limited partnership, and Symphony Strategic
Partners, LLC, a Delaware limited liability company.

 

“Symphony GenIsis” means Symphony
GenIsis, Inc., a Delaware corporation.

 

“Symphony GenIsis Auditors”
has the meaning set forth in Section 5(b) of the RRD Services Agreement.

 

“Symphony GenIsis Board” means the board
of directors of Symphony GenIsis.

 

“Symphony GenIsis By-laws” means the
By-laws of Symphony GenIsis, as adopted by resolution of the Symphony GenIsis
Board on the Closing Date.

 

“Symphony GenIsis Charter” means the
Amended and Restated Certificate of Incorporation of Symphony GenIsis, dated as
of the Closing Date.

 

“Symphony GenIsis Director Event”
has the meaning set forth in Section 3.01(h)(i) of the Holdings LLC Agreement.

 

A-18

 

“Symphony GenIsis Enhancements” means
findings, improvements, discoveries, inventions, additions, modifications,
enhancements, derivative works, clinical development data, or changes to the
Licensed Know-How, Regulatory Files, Products or the Programs, made by or on
behalf of Symphony GenIsis during the Term, in each case whether or not
patentable, including any such findings, improvements, discoveries, inventions,
additions, modifications, enhancements, derivative works, clinical development
data, or changes related to data and information generated or derived
by RRD and assigned to Symphony GenIsis pursuant to Section 12 of the RRD
Services Agreement.

 

“Symphony GenIsis Equity Securities”
means the Common Stock and any other stock or shares issued by Symphony
GenIsis.

 

“Symphony GenIsis Loss” has the meaning
set forth in Section 10(b) of the RRD Services Agreement.

 

“Symphony GenIsis Shares” has the meaning
set forth in Section 2.02 of the Holdings LLC Agreement.

 

“Tangible Materials” means any tangible
documentation, whether written or electronic, existing as of the Closing Date
or during the Term, that is Controlled by the Licensor, embodying or relating
to the Licensed Intellectual Property, Regulatory Files, Products or the
Programs, including, but not limited to, safety, efficacy or other data related
to the Products or Programs, documentation, patent applications and invention
disclosures.

 

“Tax Amount” has the meaning set forth in
Section 4.02 of the Holdings LLC Agreement.

 

“Technology
License Agreement” means the Technology License Agreement, dated
as of the Closing Date, between Isis and Holdings.

 

“Term” has the meaning set forth in
Section 4(b)(iii) of the Purchase Option Agreement, unless otherwise stated in
any Operative Document.

 

“Territory” means the world.

 

“Third Party IP” has the meaning set
forth in Section 2.9 of the Novated and Restated Technology License Agreement.

 

“Third Party
Licensor” means a third party from which Isis has received a
license or sublicense to Licensed Intellectual Property.

 

“Transfer” has for each Operative
Document in which it appears the meaning set forth in such Operative Document.

 

“Transferee” has, for each Operative
Document in which it appears, the meaning set forth in such Operative Document.

 

A-19

 

“Voluntary Bankruptcy” has the meaning
set forth in Section 1.01 of the Holdings LLC Agreement.

 

“Warrant Closing” has the meaning set
forth in Section 2.03 of the Warrant Purchase Agreement.

 

“Warrant Date” has the meaning set forth
in Section 2.02 of the Warrant Purchase Agreement.

 

“Warrant Purchase Agreement” means the
Warrant Purchase Agreement, dated as of the Closing Date, between Isis and
Holdings.

 

“Warrant Shares” has the meaning set
forth in Section 2.01 of the Warrant Purchase Agreement.

 

“Warrant Surrender Price” has the meaning
set forth in Section 7.08 of the Warrant Purchase Agreement.

 

“Warrants” has the meaning set forth in
Section 2.01 of the Warrant Purchase Agreement.

 

A-20

 

ANNEX B

 

[RESERVED]

 

B-1

 

ANNEX C

 

CERTAIN PROGRAM-SPECIFIC PATENTS

 

[***]

 

C-1

 

ANNEX D

 

CERTAIN ROYALTY AND MILESTONE PAYMENTS

 

[***]

 

D-1

 

SCHEDULE 2.2

 

CERTAIN RESTRICTIONS RELATING TO LICENSED INTELLECTUAL PROPERTY LICENSED TO
LICENSOR BY A THIRD PARTY

 

                [***]

 

2

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