Research Agreement – Isis Pharmaceuticals

RESEARCH AGREEMENT

THIS RESEARCH AGREEMENT (this “Agreement“), dated
as of August 10, 2011 (the “Effective Date“), is
entered into by and between ISIS PHARMACEUTICALS, INC., a
Delaware corporation (“Isis“), and CHDI
FOUNDATION, INC., a New Jersey corporation formerly known as CHDI, Inc.
(the “Foundation“). Isis and the Foundation will
hereinafter be referred to individually as a “Party”
and collectively as the “Parties“.

The Foundation153s mission is to rapidly discover and develop drugs that delay
or slow the progression of Huntington153s disease.

Isis is an RNA-based drug discovery and development company.

The Parties are parties to that certain Research Agreement (as amended, the
“2007 Research Agreement“), dated October 22, 2007
(the “Original Effective Date“), pursuant to which the
Foundation and Isis entered into a collaboration to seek therapies for
Huntington153s disease.

Since April 2010, the Parties ceased collaborating with one another under the
2007 Research Agreement.

After the Parties ceased collaborating under the 2007 Research Agreement,
Isis continued to work on therapies for Huntington153s disease without funding
from the Foundation.

The Parties now desire to enter into this new Agreement to resume
collaborating on therapies for Huntington153s disease.

In consideration of the mutual representations, warranties and covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

Definitions

1. Definitions.
For the purposes of this Agreement, the following terms have the meanings set
forth below:

(a) “2007 Research Agreement
Project” means the “Project” as defined in the 2007 Research
Agreement.

(b) “2007 Research Agreement Project
Compound” means any MOE Gapmer that was identified by Isis in the
course of Isis153 conduct of the 2007 Research Agreement Project, including any
Project Human Compound.

(c) “2007 Research Agreement Project
Intellectual Property” means any Intellectual Property conceived,
discovered, invented, made or first reduced to practice in the course of Isis153
conduct of the 2007 Research Agreement Project other than any such Intellectual
Property that constitutes Isis Background Intellectual Property or Foundation
Background Intellectual Property.

(d) “2007 Research Agreement Project
Results” means all data, formulae, methods, outcomes, protocols or
other results produced in the course of Isis153 conduct of the 2007 Research
Agreement Project.

(e) “Acquired Party” means the
Party that consummates a Change of Control with an Acquirer.

(f) “Acquirer” means, with respect
to a Party, the Third Party or Affiliate of such Party that is a party to a
Change of Control with such Party after the Effective Date.

(g) “Acquirer Intellectual
Property” means, with respect to an Acquirer, (i) all Intellectual
Property (A) owned by, or licensed by a Third Party to, such Acquirer
immediately prior to the consummation of the Change of Control involving such
Acquirer and a Party or (B) acquired by, or licensed to, such Acquirer from a
Third Party after the consummation of the Change of Control involving such
Acquirer and a Party and (ii) all Intellectual Property conceived, discovered,
invented, made or first reduced to practice by the Acquirer (or on behalf of
Acquirer by a Third Party) after the consummation of the Change of Control
involving such Acquirer and a Party, other than in the course of the performance
of the Research or using or practicing Project Intellectual Property.
Notwithstanding the foregoing, Acquirer Intellectual Property shall not include
a) any Intellectual Property that constitutes the Background Intellectual
Property of the Acquired Party before or on the date of the consummation of the
Change of Control involving such Acquirer and a Party or b) any Intellectual
Property that constitutes Project Intellectual Property before, on or after the
date of the consummation of the Change of Control involving such Acquirer and a
Party.

(h) “Additional Project Activities
Description” means the written document attached to this Agreement
as Appendix C.

(i) “Approved Foundation Requested Project
Compound” means a Foundation Requested Project Compound (as
defined in Section 8(c)(i) of this Agreement) approved in accordance with
Section 8(c)(ii) and Section 5 of this Agreement for use by the
Foundation and/or a Foundation Collaborator in an Approved Foundation Project
Compound Study.

(j) “Approved Foundation Project Compound
Study” means a Foundation Project Compound Study (as defined in
with Section 8(c)(i) of this Agreement) approved in accordance with
Section 8(c)(ii) and Section 5 of this Agreement to be conducted
by the Foundation and/or a Foundation Collaborator.

(k) “ASO” means an oligonucleotide
compound, or analog thereof, having a sequence that is at least 6 bases long and
that modulates expression of a gene target via the binding of such compound to a
mRNA or pre-mRNA of such gene target.

(l) “Affiliate” means any Person
which directly or indirectly controls, is controlled by or is under common
control with another Person. As used in this definition, the term “control”
means, as to any Person: (i) direct or indirect ownership of 80% or more of the
voting interests or other ownership interests in a Person; or (ii) direct or
indirect ownership of 80% or more of the interest in the income of the Person in
question. A Person will cease to be an Affiliate of another Person if such
control relationship no longer exists.

(m) “Background Intellectual
Property” means Isis Background Intellectual Property and the
Foundation Background Intellectual Property.

(n) “Bankruptcy Event” means the
(i) making of a general assignment for the benefit of creditors by an entity;
(ii) filing of any petition by an entity, or the commencement of any proceeding
voluntarily by an entity, for any relief under any bankruptcy or insolvency laws
or any law relating to the relief of debtors; (iii) consent by an entity to the
entry of an order in an involuntary bankruptcy or insolvency case; (iv) entry of
an order or decree for relief against an entity by a court of competent
jurisdiction in an involuntary case under any bankruptcy or insolvency laws or
any law relating to the relief of debtors, which order or decree is unstayed and
in effect for a period of 90 consecutive days; (v) appointment, with or without
the consent of an entity, of any receiver, liquidator, custodian, assignee,
trustee, sequestrator or other similar official of an entity or any substantial
part of its property; or (vi) admission by an entity in writing of its inability
to pay its debts generally as they become due.

(o) “Change of Control” means,
with respect to a Person, (i) a merger or consolidation of such Person with
another Person which results in the voting securities of such Person outstanding
immediately prior thereto ceasing to represent at least fifty percent (50%) of
the combined voting power of the surviving Person immediately after such merger
or consolidation; (ii) a transaction or series of related transactions in which
another Person, together with its Affiliates, becomes the owner of fifty percent
(50%) or more of the combined voting power of the outstanding securities of such
Person; (iii) the sale or other transfer of all or substantially all of such
Person153s assets to another Person; or (iv) the stockholders or equity holders of
such Person approve a plan of complete liquidation of such Person.

(p) “Confidential Information”
means all information of whatsoever type or kind (i) provided (either directly
or indirectly in writing or other tangible form or orally) by one Party (the
“Disclosing Party“) to another Party (the
“Receiving Party“) that is clearly marked and
identified as “Confidential” by the Disclosing Party at the time of disclosure
or (ii) specifically deemed to be “Confidential Information” pursuant to
Section 14(a)(i) of this Agreement. Any information communicated orally
by the Disclosing Party will be considered “Confidential Information” only if
identified as such by the Disclosing Party upon such first oral disclosure.
Specifically excepted from Confidential Information is all information that the
Receiving Party can demonstrate by written records (1) to have been known by, or
in the possession of, the Receiving Party prior to the Disclosing Party153s
disclosure of such Confidential Information to the Receiving Party; (2) has,
after disclosure of such Confidential Information by the Disclosing Party to the
Receiving Party, become known to the Receiving Party through a Third Party who
is not known by the Receiving Party to be under any obligation of
confidentiality to the Disclosing Party; (3) to have been part of the public
domain or publicly known at the time of the Disclosing Party153s disclosure of
such Confidential Information to the Receiving Party; (4) has, after disclosure
of such Confidential Information by the Disclosing Party to the Receiving Party,
become part of the public domain or publicly known, by publication or otherwise,
not due to any unauthorized act or omission by the Receiving Party; or (5) to
have been independently developed by the Receiving Party without reference to,
use of, or reliance upon, such Confidential Information.

(q) “Control” or
“Controlled” means, with respect to an Intellectual
Property right, a Party (i) owns or has a license to use and practice such
Intellectual Property right and (ii) such Party has the ability to grant a
license or sublicense as provided for in this Agreement under such Intellectual
Property right without violating the terms of any agreement or other arrangement
between such Party and either an Affiliate of such Party or a Third Party.

(r) “Detailed Project
Description” means each written document developed and approved by
the Steering Committee in accordance with Section 5(a)(ii) of this
Agreement setting forth a detailed description of the Research to be performed
in the conduct of the Project. The Detailed Project Description (the
“Initial Detailed Project Description“) covering the
twelve-month period beginning July 1, 2011 for the Project is attached to this
Agreement as Appendix B. With respect to the Initial Detailed Project
Description, the Parties agree that (i) the activities specified therein to be
conducted during the six-month period beginning July 1, 2011 (except for any
such activities specifically identified as requiring subsequent approval by the
Steering Committee) are firm and agreed to in detail by Isis and the Foundation
and (ii) the activities specified therein to be conducted during the six-month
period beginning January 1, 2012 have been listed for planning purposes and are
therefore estimated and agreed to by the Parties in concept; those activities
are subject to further approval of the Steering Committee in accordance with
this Agreement prior to their conduct by Isis.

(s) “Foundation Background Intellectual
Property” means (i) all Intellectual Property (including
Intellectual Property relating to any Foundation Provided Materials but
excluding the Acquirer Intellectual Property of any Acquirer of the Foundation)
(A) owned by, or licensed to, the Foundation or any of its Affiliates as of the
Original Effective Date or (B) acquired by, or licensed to, the Foundation or
any of its Affiliates from a Third Party after the Original Effective Date and
(ii) all Intellectual Property conceived, discovered, invented, made or first
reduced to practice by, or on behalf of, the Foundation or any of its Affiliates
after the Original Effective Date (other than (X) in the course of Isis153 conduct
of the Project or (Y) under the 2007 Research Agreement).

(t) “Foundation Collaborators”
means those (i) Third Parties and Affiliates of the Foundation to which the
Foundation grants the right to use all or part of the Project Deliverables,
Project Intellectual Property or Project Results for HD Research and
Development, including any entity collaborating with the Foundation in the
conduct of HD Research and Development and/or fee-for-service laboratories or
repositories providing services to the Foundation in the furtherance of the
Foundation153s conduct of HD Research and Development and (ii) fee-for-service
laboratories providing services on behalf of any such Third Parties and
Affiliates described in (i) above.

(u) “Foundation Provided
Materials” means (i) any animal species or model (e.g.,
mice, rats, etc.) (including progeny derived from inbreeding and crossbreeding
of any such animal species or model and unmodified derivatives of any such
animal species or model and their progeny) provided to Isis by, or on behalf of,
the Foundation to enable Isis to perform the Research and (ii) the physical
samples of cell lines, compounds, reagents and other materials provided to Isis
by, or on behalf of, the Foundation to enable Isis to perform the Research, in
each case that is (A) expressly identified as a Foundation Provided Material in
the Project Description or (B) otherwise agreed upon by the Steering Committee
as a Foundation Provided Material for the Project.

(v) “Foundation Provided Material
Information” means all information relating to a Foundation
Provided Material that is provided to Isis by, or on behalf of, the Foundation.

(w) “FTE” means the equivalent of
the work of one employee of Isis working on a dedicated full-time basis for one
year of work (excluding vacations and holidays), consisting of at least a total
of 1,820 hours per year of dedicated effort.

(x) “General Project Description”
means the written document attached to this Agreement as Appendix A. For
clarity, the General Project Description cannot be modified or amended except by
the execution of a written amendment to this Agreement by an authorized
signatory of each of the Parties.

(y) “HD Field of Use” means any
activity useful for the creation, development, manufacture or distribution of a
product or service for the diagnosis, treatment, cure or prevention of
Huntington153s disease, including the manufacture or distribution of any such
product or service for sale and the sale of any such product or service.

(z) “HD Research and Development”
means any activity useful for the creation, development, manufacture or
distribution of a product or service for the diagnosis, treatment, cure or
prevention of Huntington153s disease, including pre-clinical testing of a product
or service or, subject to Section 10(b) of this Agreement, human clinical
trials involving a product or service, in all cases other than (i) the
manufacture or distribution of any such product or service for sale or (ii) the
sale of any such product or service. For the avoidance of doubt, HD Research and
Development shall not include any right to (A) manufacture or distribute any
such product or service for sale or (B) sell any such product or service;
except, in each case, for pre-clinical use or, subject to Section 10(b)
of this Agreement, human clinical trials.

(aa) “Huntington” means the human
gene known as IT15 or HD (GenBank accession #NM_002111.5), or any alternative
splice variants, mutants, polymorphisms and fragments thereof.

(bb) “Huntington153s disease” or
“HD” means the hereditary disorder caused by mutation
associated with trinucleotide repeat expansion in the Huntington gene on
chromosome 4p.

(cc) “Intellectual Property” means
any discovery, invention, formulation, know-how, method, technological
development, enhancement, modification, improvement, work of authorship,
computer software (including, but not limited to, source code and executable
code) and documentation thereof, data or collection of data, whether patentable
or not, or susceptible to copyright or any other form of legal protection
(e.g., trade secret).

(dd) “Isis Background Intellectual
Property” means (i) all Intellectual Property (excluding (A) the
Pre-Project Compound Intellectual Property, (B) the Acquirer Intellectual
Property of any Acquirer of Isis, (C) the Isis/[***] Collaboration Intellectual
Property and (D) the Regulus Intellectual Property) (1) owned by, or licensed
to, Isis or any of its Affiliates as of the Original Effective Date or (2)
acquired by, or licensed to, Isis or any of its Affiliates from a Third Party
after the Original Effective Date and (ii) all Intellectual Property conceived,
discovered, invented, made or first reduced to practice by, or on behalf of,
Isis or any of its Affiliates after the Original Effective Date (other than (X)
in the course of Isis153 conduct of the Project or (Y) under the 2007 Research
Agreement).

(ee) “Isis Provided Materials”
means any animal species or model (e.g., mice, rats, etc.) (including
progeny derived from inbreeding and crossbreeding of any such animal species or
model and unmodified derivatives of any such animal species or model and their
progeny) and the physical samples of compounds, reagents, cell lines and other
materials acquired by Isis from a Third Party to enable Isis to perform the
Research.

(ff) “Isis Provided Reimbursable
Materials” means each Isis Provided Material that is (i) expressly
identified as an Isis Provided Reimbursable Material in the Project Description
or (ii) otherwise agreed upon by the Steering Committee (as defined in
Section 5(a)(i) of this Agreement) as an Isis Provided Reimbursable
Material for the Project.

(gg) “Isis/[***] Collaboration Intellectual
Property” means all Intellectual Property conceived, discovered,
invented, made or first reduced to practice by, or on behalf of, Isis or [***]
under (i) that certain Collaborative Research Agreement, dated [***], between
Isis and [***] and/or (ii) that certain Amended and Restated Collaborative
Research Agreement, dated [***] between Isis and [***].

(hh) “MOE Gapmer” means a
single-stranded ASO of less than 25 nucleotides comprising a region of at least
6 unsubstituted 2153 deoxy nucleotides with the remaining nucleotides having a
2153-O-(methoxyethyl) substitution at the 2153 position.

(ii) “Patent Expenses” means, with
respect to either Party, all out-of-pocket costs and expenses (including
attorneys153 fees and government filing fees) incurred by that Party in accordance
with Section 9(d) of this Agreement in connection with the preparation,
review, filing, prosecution and maintenance of the appropriate filings and
issued patents, including any extensions or supplemental protection certificates
thereto, to protect the Parties153 rights in any Patentable Project HD
Intellectual Property.

(jj) “Patentable Project HD Intellectual
Property” means any Project HD Intellectual Property which is or
may be patentable or otherwise protectable under Title 35 U.S.C. and
corresponding legislation in other jurisdictions.

(kk) “Person” means any
individual, corporation, company, partnership, trust, limited liability company,
association or other business entity.

(ll) “Pre-Project Compound” means
all MOE Gapmers identified by Isis prior to the Original Effective Date in the
course of Isis153 conduct of research activities pursuant to that certain Research
Agreement, dated as of August 1, 2006, entered into between Isis and the
Foundation which (i) Isis used in the conduct of the 2007 Research Agreement
Project or (ii) are used in Isis153 conduct of the Project.

(mm) “Pre-Project Compound Intellectual
Property” means any Intellectual Property in or relating to a
Pre-Project Compound.

(nn) “Project” means (i) the
programs of Research performed by, or on behalf of, Isis as described in the
Additional Project Activities Description together with (ii) the program of
Research to be performed by Isis as described in the Project Description.

(oo) “Project Compound” means all
(i) Pre-Project Compounds, (ii) 2007 Research Agreement Project Compounds or
(iii) MOE Gapmers that are identified by Isis in the course of Isis153 conduct of
the Project, including any Project Human Compound. For the avoidance of doubt,
Pre-Project Compounds will be Project Compounds for all purposes under this
Agreement.

(pp) “Project Deliverable” means
(i) those Project Reports (as defined in Section 5(e) of this Agreement),
those FTE Reports (as defined in Section 5(e) of this Agreement) and
other items set forth in the Project Description which are to be delivered by
Isis to the Foundation in connection with the conduct of the Project by Isis,
(ii) those Approved Foundation Requested Project Compounds which are to be
delivered by Isis to the Foundation pursuant to Section 8(c) of this
Agreement and (iii) any other item or material otherwise agreed to be such by
the Steering Committee.

(qq) “Project Description” means
the General Project Description together with the Detailed Project Descriptions
for the Project.

(rr) “Project HD Intellectual
Property” means any Project Intellectual Property that (i) claims
the composition of matter of a Project Compound and/or a method of using a
Project Compound for the treatment of Huntington153s disease or (ii) is necessary
or useful for the creation, development, manufacture or distribution of a
product or service for the diagnosis, treatment, cure or prevention of
Huntington153s disease.

(ss) “Project Human Compound”
means any Project Compound that modulates the expression of Huntington and acts
predominantly by hybridizing to mRNA or pre-mRNA in humans.

(tt) “Project Intellectual
Property” means all (i) Pre-Project Compound Intellectual
Property, (ii) 2007 Research Agreement Project Intellectual Property and (iii)
Intellectual Property conceived, discovered, invented, made or first reduced to
practice in the course of Isis153 conduct of the Project other than any such
Intellectual Property that constitutes Isis Background Intellectual Property or
Foundation Background Intellectual Property.

(uu) “Project Non-HD Intellectual
Property” means any Project Intellectual Property that does not
constitute Project HD Intellectual Property.

(vv) “Project Non-Human Compound”
means any Project Compound that does not constitute a Project Human Compound.

(ww) “Project Results” means all
(i) 2007 Research Agreement Project Results and (ii) all data, formulae,
methods, outcomes, protocols or other results produced in the course of Isis153
performance of the Research.

(xx) “Provided Research
Materials” means (i) those Isis Provided Reimbursable Materials
for which the Foundation has reimbursed Isis in accordance with Section
6(b)(i) of this Agreement and (ii) the Foundation Provided Materials for the
Project.

(yy) “Regulus” means (i) Regulus
Therapeutics Inc. and (ii) the successor Person of any Change of Control
directly or indirectly involving Regulus Therapeutics Inc.

(zz) “Regulus Intellectual
Property” means all Intellectual Property owned by, or licensed
to, Regulus.

(aaa) “Research” means all of the
activities undertaken by, or on behalf of, Isis under this Agreement to conduct
and complete the Project.

(bbb) “Research FTE” means an FTE
(or a fractional unit thereof) that has been designated to perform the Research.

(ccc) “Research FTE Rate” means,
for all Research FTEs (on a quarterly basis), an amount equal to US$[***] per
Research FTE per quarter (equivalent to an annual Research FTE Rate of
US$[***]).

(ddd) “Research and Development”
means any activity useful for the creation, development, manufacture or
distribution of a product or service, including pre-clinical testing of a
product or service or, subject to Section 10(b) of this Agreement, human
clinical trials involving a product or service, in all cases other than (i) the
manufacture or distribution of any such product or service for sale or (ii) the
sale of any such product or service. For the avoidance of doubt, Research and
Development will not include any right to (1) manufacture or distribute any such
product or service for sale or (2) sell any such product or service; except, in
each case, for pre-clinical use or, subject to Section 10(b) of this
Agreement, human clinical trials.

(eee) “Third Party” means any
Person other than a Party or its Affiliates.

Research; Project

2. Number of Research FTEs; Utilization of
Research FTEs.

(a) Number of Research
FTEs.

(i) Initial Number of Research
FTEs. Beginning on the Effective Date, Isis will
provide [***] Research FTEs to perform the Research. The Parties acknowledge and
agree that the number of then-current Research FTEs performing the Research will
only be subject to adjustment as provided in Section 2(a)(ii) of this
Agreement.

(ii) Changes in the Number of Research
FTEs. The number of Research FTEs performing
Research may only be increased or decreased above the then-current number of
Research FTEs required to be provided by Isis to perform the Research by the
agreement of the Steering Committee; provided, that, (A) at no time
will the number of Research FTEs performing the Research exceed [***] ([***])
Research FTEs (the “Research FTE Maximum Number“) and
(B) any increase in the number of Research FTEs may only be for the fixed period
of time set forth in the applicable Steering Committee meeting minutes. Any
agreed upon increase or decrease in the then-current number of Research FTEs
required to be provided by Isis to perform the Research will occur within a
period of time mutually agreed upon by the Steering Committee. The Parties
acknowledge and agree that the Research FTE Maximum Number may only be increased
by the execution of a written amendment to this Agreement by an authorized
signatory of each of the Parties.

(b) Utilization of Research
FTEs. Isis and the Foundation agree that each
individual being provided by Isis to constitute all or a part of a Research FTE
may (i) devote less than 100% of his or her full-time effort to perform the
Research and (ii) perform activities of any type or nature for Isis or any Third
Party; provided, that, the time spent by any such individual performing
such non-Project activities will not be taken into account for any purpose under
this Agreement (including for purposes of calculating (A) the number of Research
FTEs being provided by Isis under this Agreement or (B) the amount of any
payment owed by the Foundation under this Agreement). Similarly, Isis may
satisfy its Research FTE obligations hereunder by having multiple individuals
contribute toward one full Research FTE.

3. Performance of the Research; Limited Right to
Subcontract the Research; Certain Notifications Relating to the Project;
Experimental Nature of the Research.

(a) Performance of the Research; Limited Right to
Subcontract the Research.

(i) Performance of the
Research. Isis agrees that (A) each Research FTE
will perform the Research in accordance with this Agreement, including the
Project Description and (B) no Research shall be performed except as expressly
set forth in the Project Description or otherwise approved by the Steering
Committee. During the Term (as defined in Section 17(a) of this
Agreement), unless otherwise explicitly agreed to by the Steering Committee or
expressly provided for in the Project Description, Isis will

also provide such other resources (including all necessary administrative and
support personnel, equipment, tools, Isis Provided Materials and supplies) and
effort as is commercially reasonable to perform the Research in accordance with
this Agreement, including the Project Description.

(ii) Limited Right to Subcontract the
Research. The Parties acknowledge and agree that
Isis may (A) sub-contract those activities which are expressly set forth in the
Project Description or otherwise agreed upon by the Steering Committee as
activities to be sub-contracted (such activities, “Subcontracted
Research“) and (B) sub-contract such Subcontracted Research to the
Third Party set forth in the Project Description or otherwise agreed upon by the
Steering Committee as the Third Party or Affiliate to conduct such
sub-contracted activities (each such Third Party or Affiliate, a
“Subcontractor“). Isis agrees that (1) all
Subcontracted Research shall be performed pursuant to a written agreement
between Isis and the Subcontractor performing such Subcontracted Research upon
terms and conditions that a) are consistent with the terms and conditions of
this Agreement and b) do not conflict with Isis153 obligations or the Foundation153s
rights under this Agreement and (2) Isis shall cause each Subcontractor to
conduct the Subcontracted Research in accordance with, and subject to, the terms
and conditions of such agreement. Upon the Foundation153s request, Isis will
provide the Foundation with copies of such agreements between Isis and any such
Subcontractor. Isis further agrees that Isis shall be solely responsible and
liable to CHDI under this Agreement for the Subcontracted Research conducted by
each Subcontractor as if such Research were conducted by Isis.

(b) Certain Notifications Relating to the
Research.

(i) Change of Circumstances
Notices. If at any time following the Effective
Date Isis makes a good faith determination that, (A) the Research cannot be
conducted and completed substantially in accordance with this Agreement and the
Project Description; (B) the Research (or any portion thereof) cannot be
substantially completed within the estimated time frame set forth in the Project
Description; or (C) the continued performance of the Research in accordance with
this Agreement and the Project Description (1) is unlikely to yield
scientifically valid or useful results, (2) will violate any applicable federal,
state, local, international, health authority and institutional laws, rules,
regulations, orders or guidelines, or (3) will violate principles of ethics or
scientific integrity, Isis will promptly give written notice (each, a
“Change of Circumstances Notice“) to the Foundation.
Each Change of Circumstances Notice will set forth a detailed description of
Isis153 determination (including the facts and circumstances underlying such
determination and Isis153 basis for such determination). Following the delivery of
a Change of Circumstances

Notice, Isis will, at the request of the Foundation, promptly make senior
officers and appropriate scientific or technical personnel reasonably available
to the Foundation to discuss the basis for Isis153 determination.

(ii) Post-Effective Date Knowledge
Notice. If at any time following the Effective
Date Isis acquires knowledge that would render one or more of the
representations and warranties set forth in Section 16(b) of this
Agreement untrue or incorrect if such representation or warranty were based upon
Isis153 knowledge at such time (instead of being based upon Isis153 knowledge as of
the Effective Date), Isis will promptly give written notice (each, a
“Post-Effective Date Knowledge Notice“) to the
Foundation. Each Post-Effective Date Knowledge Notice will set forth a detailed
description of the facts and circumstances relating to the applicable
representation or warranty (including details as to Isis153 basis for determining
that such representation or warranty would no longer be true and correct).
Following the delivery of a Post-Effective Date Knowledge Notice, Isis will, at
the request of the Foundation, promptly make senior officers and appropriate
scientific or technical personnel reasonably available to the Foundation to
discuss (A) the facts and circumstances related to the subject matter of such
Post-Effective Date Knowledge Notice and (B) potential courses of action to
address such matter.

(c) Experimental Nature of the
Research. The Foundation acknowledges that (i) the
Research is of an experimental and developmental nature and (ii) Isis cannot
guarantee that the objectives of the Research will be achieved or that the
performance of the Research will yield any specific deliverables, results or
Intellectual Property.

4. Obligation to Provide Foundation Provided
Materials and Foundation Provided Material Information; Reimbursement for Isis
Provided Reimbursable Materials; Use and Ownership of Provided Research
Materials and Foundation Provided Material Information; Retention of Provided
Research Materials; Risk of Loss of Provided Research Materials; Specialized
Licenses or Services.

(a) Obligation to Provide Foundation Provided
Materials and Foundation Provided Material
Information. The Foundation will provide Isis with
(i) each Foundation Provided Material designated as a Foundation Provided
Material for the Project and (ii) any information in respect of each such
Foundation Provided Material that is reasonably necessary to enable Isis to use
such Foundation Provided Material in the performance of the Research so long as
such information is in the possession of the Foundation and the Foundation is
permitted to provide such information to Isis without breaching any obligation
to any Third Party.

(b) Reimbursement for Isis Provided Reimbursable
Materials. The Foundation will, in accordance with
Section 6(b)(i) of this Agreement, reimburse Isis for the actual costs
incurred by Isis to procure each Isis Provided Reimbursable Material

designated as an Isis Provided Reimbursable Material for the Project (up to
[***]% of the estimated cost of such Isis Provided Reimbursable Material as is
set forth in the Project Description or the applicable mutually-approved
Steering Committee meeting minutes). Isis agrees that (i) each Isis Provided
Reimbursable Material shall be procured pursuant to a written agreement between
Isis and the Third Party or Affiliate providing such Isis Provided Reimbursable
Material upon terms and conditions that (A) are consistent with the terms and
conditions of this Agreement and (B) do not conflict with Isis153 obligations or
the Foundation153s rights under this Agreement and (ii) Isis shall cause each
Third Party or Affiliate providing Isis Provided Reimbursable Materials to
provide such Isis Provided Reimbursable Materials in accordance with, and
subject to, the terms and conditions of such agreement. Upon the Foundation153s
request, Isis will provide the Foundation with copies of such agreements between
Isis and any such Third Party or Affiliate.

(c) Use and Ownership of Provided Research
Materials and Foundation Provided Material Information; Retention of Provided
Research Materials; Risk of Loss of Provided Research
Materials.

(i) Use and Ownership of Provided Research
Materials and Foundation Provided Material
Information. Isis agrees that the Provided
Research Materials and the Foundation Provided Material Information (A) will be
used by Isis for the sole purpose of conducting the Project and for no other
purpose, (B) will be used, handled, stored and disposed of in compliance with
all applicable laws, regulations and rules and (C) will not be transferred to
any Third Party or to any Affiliate of Isis except (1) as expressly required or
contemplated by this Agreement (e.g., to a Subcontractor in accordance
with Section 3(a)(ii) of this Agreement) or (2) pursuant to the written
request of an authorized representative of the Foundation. Except to the extent
expressly required by the Project Description, Isis further agrees that it will
not: (a) directly or indirectly, reverse engineer, deconstruct or in any way
analyze or determine the identity, structure or composition of any Foundation
Provided Materials or the properties thereof (chemical, biochemical, physical,
biological or other); b) use any Provided Research Materials in any human; or c)
export any Provided Research Materials or Foundation Provided Material
Information in any manner that would violate any applicable export law or
regulation, including the United States. Isis acknowledges and agrees that (a)
as between Isis and the Foundation, the Foundation owns the Provided Research
Materials and Foundation Provided Material Information and (b) Isis will not,
pursuant to this Agreement, acquire any ownership or other interest in any
Provided Research Materials or Foundation Provided Material Information.

(ii) Retention of Provided Research
Materials. Except for live animals and
animal-derived materials (e.g., tissue samples) that require consistent
care or maintenance, Isis will retain all unused Provided Research Materials for
a period of [***] following the earlier to occur of (A) the completion or
cancellation of the Project or (B) the expiration or termination of this
Agreement (such period, the “Provided Research Materials Retention
Period“). Except with respect to any Isis Provided Reimbursable
Material for which, prior to Isis153 purchase of such Isis Provided Reimbursable
Material, the Foundation provided written consent that Isis is not required to
provide such Isis Provided Reimbursable Material to the Foundation, during the
Provided Research Materials Retention Period, Isis will, at the Foundation153s
request and expense, ship all or part of any or all of the unused Provided
Research Materials to the Foundation or to such Third Party as the Foundation
will direct in writing. Upon the expiration of the Provided Research Materials
Retention Period, Isis will appropriately discard or destroy all such unused
Provided Research Materials.

(iii) [***] of Provided Research
Materials. Immediately upon Isis153 receipt of a
Provided Research Material and continuing until such Provided Research Material
is delivered or disposed of by Isis pursuant to this Agreement (the
“Handling Period“), Isis will [***], and will be
[***], all [***], (A) [***] such Provided Research Material and (B) any
preparation for shipment and shipment of such Provided Research Material
pursuant to this Agreement, in all cases to the extent each such Provided
Research Material is [***]. If a Provided Research Material that is not [***] is
[***], the Parties will [***] such Provided Research Material. Isis will use
commercially reasonable efforts to obtain and maintain [***] during the Handling
Period [***] each Provided Research Material.

(d) Reimbursement for Specialized Licenses or
Services. The Foundation will, in accordance with
Section 6(b)(ii) of this Agreement, reimburse Isis for the actual costs
incurred by Isis to license or procure from a Third Party or one of its
Affiliates, as the case may be, each license or service that is expressly
identified as a license or service the costs of which are to be reimbursed by
the Foundation in (i) the Project Description or (ii) otherwise agreed upon by
the Steering Committee as a license or service the costs of which are to be
reimbursed by the Foundation for the Project (up to [***]% of the estimated cost
of such license or service as is set forth in the Project Description or the
applicable mutually-approved Steering Committee meeting minutes) (any such
license or service hereinafter referred to as a “Specialized License
or Service“). Isis agrees that (A) each Specialized License or
Service shall be licensed or procured pursuant to a written agreement between
Isis and the Third Party or Affiliate licensing or providing such Specialized
License or Service upon terms and conditions that (1) are consistent with the
terms and conditions of this Agreement and (2) do not conflict with Isis153
obligations or the Foundation153s rights under this Agreement and

(B) Isis shall cause each Third Party or Affiliate providing a Specialized
License or Service to provide such Specialized License or Service in accordance
with, and subject to, the terms and conditions of such agreement. Upon the
Foundation153s request, Isis will provide the Foundation with copies of such
agreements between Isis and any such Third Party or Affiliate.

Research/Project Management

5. Steering Committee; Project Managers; Limited
Authority of the Steering Committee and Project Managers; Recordkeeping; Project
Reports.

(a) Steering
Committee.

(i) Establishment and Make-Up of the Steering
Committee; External Advisors.

(A) Establishment and Make-Up of the Steering
Committee. Within a reasonable period of time
following the Effective Date, not to exceed 30 days, the Parties will establish
a committee (the “Steering Committee“). The Steering
Committee will be comprised of four members. Each Party will designate two
members of the Steering Committee. Each Party will appoint members who possess
appropriate qualifications to conduct the responsibilities of the Steering
Committee. Each Party may also, from time to time, invite other of its personnel
to attend the Steering Committee meetings; provided, that, such other
personnel will (1) act in an advisory, non-voting capacity only and (2) not be
entitled to decide or approve any matter requiring decision by or approval of
the Steering Committee. A Party may at any time replace one or both of its
members of the Steering Committee upon written notice to the other Party. The
Steering Committee, as a formal governing body under this Agreement, will be
dissolved upon the expiration of the Term.

(B) External
Advisors. The Steering Committee may, from time to
time, identify and appoint Third Party experts to advise the Steering Committee
on technical and other matters; provided, that, such experts will (1)
act in an advisory, non-voting capacity only and will not be entitled to decide
or approve any matter requiring decision by or approval of the Steering
Committee and (2) be required to abide by confidentiality and non-use
obligations at least as restrictive as those set forth in Section 14 of
this Agreement in respect of Confidential Information to which such experts are
granted access.

(ii) Responsibilities of the Steering Committee;
Scope and Content of Detailed Project
Descriptions.

(A) Responsibilities of the Steering
Committee. The Steering Committee will have the
authority to make decisions about those matters that, by the express terms of
this Agreement, are to be addressed by the Steering Committee. In addition to
any other matter that, by the express terms of this Agreement are to be
determined by the Steering Committee, the Steering Committee will be responsible
for each of the following matters: (1) on at least a quarterly basis, reviewing
the Detailed Project Description for the Project and, if deemed reasonably
necessary by the Steering Committee, refining, updating and approving the
Detailed Project Description for the Project for the 12-month period beginning
on the date such Detailed Project Description is so updated and approved by the
Steering Committee (each such Detailed Project Description to be developed in
accordance with, and set forth the information specified in, Section
5(a)(ii)(B) of this Agreement), provided, that, the Parties shall
use their respective commercially reasonable efforts to facilitate the approval
by the Steering Committee of (and the Steering Committee will diligently
endeavor to approve) at least two calendar quarters of Research activities; (2)
on at least a quarterly basis, subject to Section 2 of this Agreement,
reviewing and, if deemed reasonably necessary by the Steering Committee,
approving changes to the number of Research FTEs (not to exceed the Research FTE
Maximum Number) to be provided by Isis to perform the Research, provided,
that, the Parties shall use their respective commercially reasonable
efforts to facilitate the approval by the Steering Committee of (and the
Steering Committee will diligently endeavor to approve) the requisite number of
Research FTEs to be provided by Isis to conduct the approved Research activities
for at least two calendar quarters; (3) monitoring the coordination,
implementation and conduct of the Project in accordance with the Project
Description; (4) reviewing the status and progress of the conduct of the
Project; (5) determining if changes are needed to the scope of the Project; (6)
implementing any changes to the scope of the Project that have been approved by
the Parties; (7) reviewing and discussing the Invention Notices (as defined in
Section 9(c)(i) of this Agreement) in respect of the Project Intellectual
Property; (8) reviewing and discussing the filing of any patent applications in
respect of any Patentable Project Intellectual Property; (9) reviewing and
discussing the Project Deliverables, Project Results and such other matters
related to this Agreement and the Research as are reasonably requested by either
of the Parties; (10) facilitating Isis153

consideration of any Foundation Project Compound Request Notice submitted by
the Foundation under Section 8(c) of this Agreement; and (11)
facilitating on-going communications between the Parties. Notwithstanding the
provisions of Section 5(a)(iii)(B) below, if the Steering Committee is
unable to reach consensus regarding the activities to be included and performed
in the Detailed Project Description (including without limitation, an inability
to reach consensus regarding the Research activities for the next calendar
quarter), the matter will first be submitted to B. Lynne Parshall, in the case
of Isis (or such other individual identified in writing by Isis), and Robi
Blumenstein, in the case of the Foundation (or such other individual identified
in writing by the Foundation) within five days for resolution and any such
resolution will be deemed to be a decision and approval by the Steering
Committee for purposes of this Agreement.

(B) Scope and Content of Detailed Project
Descriptions. Each Detailed Research Project
Description developed and approved by the Steering Committee for the Project
will be consistent with the scope of the Project as outlined in the General
Project Description. The Detailed Project Description for the Project will
include the following information: (1) a reasonably detailed description
(including the details of all material scientific protocols) of the Research
activities and the timing thereof to be undertaken during the period covered by
such Detailed Project Description (all such Research activities to be consistent
with the scope of the Project as outlined in the Project Description); (2) an
estimated time frame for the completion of the Project; (3) a breakdown of the
number of Research FTEs to be allocated to the conduct of the Project during the
period covered by such Detailed Project Description; (4) a list of each
Subcontractor together with a reasonably detailed description of the
Subcontracted Research to be undertaken by each such Subcontractor in the
conduct of the Project during the period covered by such Detailed Project
Description; (5) a list of the Foundation Provided Materials to be provided for
the conduct of the Project (including the amount and estimated cost thereof);
(6) a list of any Isis Provided Reimbursable Materials required for the conduct
of the Project (including the amount and estimated cost thereof); (7) a list of
any Specialized Licenses or Services required for the conduct of the Project
(including the cost thereof); and (8) such other information as may be necessary
to appropriately describe the Research activities to be undertaken in the
conduct of the Project during the period covered by such Detailed Project
Description.

(iii) Operating Procedures of the Steering
Committee; Decisions by the Steering Committee; Steering Committee Minutes;
Resolution of Steering Committee Disputes.

(A) Operating Procedures of the Steering
Committee; Decisions by the Steering Committee; Steering Committee
Minutes. The Steering Committee will establish its
own internal operating procedures and meeting schedule (such meetings to be held
in person or by video or telephone conference as mutually agreed upon by the
Steering Committee members); provided, however, the Steering Committee
will meet on a face-to-face basis at least once every calendar quarter following
Isis153 delivery of the Project Report for the preceding calendar quarter in
accordance with Section 5(e)(i) of this Agreement. Each Party may, as it
deems reasonably necessary, call ad-hoc meetings of the Steering Committee by
providing reasonable notice to the other Party. Any activity or matter that
requires a decision by, or the approval of, the Steering Committee under this
Agreement will require the affirmative consent of each member of the Steering
Committee and will only be a valid and binding decision and/or approval of the
Steering Committee if such decision and/or approval is expressly identified in
the applicable mutually-approved Steering Committee meeting minutes. At each
meeting of the Steering Committee, one meeting attendee will be appointed to
record and, within a period of 30 days after each such meeting, distribute the
minutes of such meeting to the Steering Committee members for approval (the
approval of the content of each such meeting minutes to be evidenced by the
initialing of such meeting minutes by at least one of each Party153s designated
Steering Committee members).

(B) Resolution of Steering Committee
Disputes. If the Steering Committee cannot reach
consensus on any activity or matter that requires a decision by, or the approval
of, the Steering Committee (each, a “Steering Committee
Dispute“), either Party may, within 30 days after the Steering
Committee Dispute arises, submit such Steering Committee Dispute to B. Lynne
Parshall, in the case of Isis (or such other individual identified in writing by
Isis), and Robi Blumenstein, in the case of the Foundation (or such other
individual identified in writing by the Foundation), for resolution by providing
a written notice (each, an “Internal Steering Committee Dispute
Resolution Notice“) to the other Party setting forth in reasonable
detail the basis of such dispute. Such individuals will, within 20 days after
such Internal Steering Committee Dispute Resolution Notice is delivered, meet
and attempt in good faith to resolve such Steering Committee Dispute.

If such Steering Committee Dispute is not resolved within such 20-day period,
either Party may require that the Parties submit such Steering Committee Dispute
for resolution by an independent Third Party with appropriate qualifications for
resolution to evaluate such matter (a “Neutral
Expert“) by providing a written notice (an “External
Steering Committee Dispute Resolution Notice“) to such effect that
identifies the Steering Committee Dispute to be resolved. If the Parties fail to
agree on a Neutral Expert within 10 days after an External Steering Committee
Dispute Resolution Notice is delivered, then each Party will submit the name and
qualifications of one proposed Neutral Expert, along with a written statement
not to exceed five pages that identifies the issue(s) to be decided, to JAMS in
Denver, Colorado, with a copy to the other Party, and JAMS will appoint a single
arbitrator, who will be authorized solely to select, within 10 days of his or
her appointment and pursuant to this Section 5(a)(iii)(B), which Party153s
proposed Neutral Expert will be designated for resolution of such matter, which
decision will be final and binding on both Parties. Upon the designation of the
Neutral Expert, each Party will have 15 business days from the date of the
designation of such Neutral Expert to submit any appropriate materials to such
Neutral Expert, with copies to the other Party. No Party will communicate with
the Neutral Expert except by written communications copied to the other Party,
or orally in the physical or telephonic presence of the other Party. The Neutral
Expert will render a written decision within 15 days after the deadline for
submission of materials from the Parties. The decision of the Neutral Expert
will be final and binding on both Parties; provided, however, in no
event will either Party be obligated to violate any applicable federal, state,
local, international, health authority and institutional laws, rules,
regulations, orders or guidelines. The Parties agree that any and all such
deliberations will be confidential.

(b) Project
Managers.

(i) Appointment of the Project Managers;
Operating Procedures of the Project Managers.
Within a reasonable period of time following the Effective Date, not to exceed
30 days, each Party will appoint a project manager (each, a
“Project Manager“) to oversee the day-to-day
coordination, implementation and performance of the Research. The Project
Managers will establish their own operating procedures and meeting schedule
(such meetings to be held in person or by video or telephone conference as
mutually agreed upon by the Project Managers); provided, however, the
Project Managers will meet on a bi-weekly basis or at such other frequency as
agreed upon by the Project Managers. Isis153

Project Manager will keep the Foundation153s Project Manager fully informed as
to the status and progress of the conduct of the Project (including the status
of the completion time frame of the Project as compared to the estimated
completion time frame specified in the Project Description) and such other
matters related to this Agreement and the Research as are reasonably requested
by the Foundation153s Project Manager. Upon the expiration of the Term, each
Party153s obligation to have and maintain a Project Manager under this Agreement
will terminate.

(ii) Responsibilities of the Project
Managers. The Project Managers will be responsible
for the following activities: (A) assisting the Steering Committee in the
development of the revised Detailed Project Descriptions for the Project (each
such Detailed Project Description to be developed in accordance with, and set
forth the information specified in, Section 5(a)(ii)(B) of this
Agreement); (B) overseeing the coordination, implementation and conduct of the
Project in accordance with the Project Description; (C) reviewing the status and
progress of the conduct of the Project; (D) determining if changes are needed to
the scope of the Project; (E) implementing any changes to the scope of the
Project that have been approved by the Parties; (F) reviewing and discussing the
Project Deliverables, Project Results and such other matters related to this
Agreement and the Research as are reasonably requested by either of the Parties;
and (G) facilitating on-going communications between the Parties.

(c) Limited Authority of the Steering Committee
and Project Managers. For the avoidance of any
doubt, the Parties agree that neither the Steering Committee nor any Project
Manager will have the power or authority to (i) modify or make any amendments to
this Agreement, (ii) except as otherwise provided in Section 5(a)(ii)(A)
of this Agreement, modify or make any amendments to the Project Description,
(iii) waive a Party153s rights under, or compliance with, this Agreement or (iv)
determine whether there has been a breach of a Party153s obligations pursuant to
this Agreement.

(d) Recordkeeping.
Isis will keep complete and accurate records of the Research performed by it
under this Agreement and of all Project Deliverables, Project Intellectual
Property and Project Results. Isis will retain all such records, including all
raw data, for a period of not less than [***] following the date of the
expiration or termination of the Term. During the Term of this Agreement and
such [***] period, such records (including the relevant pages of all applicable
laboratory notebooks containing data, information or notations relating to the
performance of the Research) will, upon 10 business days prior written notice
from the Foundation, be available at Isis153 facilities at all reasonable times
during normal business hours for inspection, examination or copying by, or on
behalf of, the Foundation at the Foundation153s expense, or alternatively, at
Isis153 election, will be made available to the Foundation in electronic form at
the Foundation153s

expense. During the [***] period following the date of the expiration or
termination of the Term, Isis will, at the Foundation153s request and expense,
ship copies of all or part of such records to the Foundation or to such Third
Party as the Foundation will direct in writing. Notwithstanding the foregoing,
Isis may retain copies of all such records to allow Isis to exercise its rights
and satisfy any of its obligations under this Agreement.

(e) Project Reports; FTE
Reports.

(i) Project
Reports. Isis will deliver to the Foundation (A) a
written report on the performance of the Research within [***] after the end of
each [***] during the conduct of the Project and continuing until the
cancellation or completion of the Project, together with any additional reports
specified in the Project Description (collectively, the “[***]
Project Reports“), and (B) a final written report on the conduct
of the Project (the “Final Project Report” and,
together with the [***] Project Reports, the “Project
Reports“) within [***] of the [***]. Each Project Report will
address each of the following in substantially the same format and containing
the same degree of detail as Isis generally uses to communicate such information
internally and to its Third Party research collaborators: (1) a summary of the
status and progress of the Project (including an update on the projected time
frame for the completion of the Project), (2) material developments and issues
relating to the conduct of the Project and (3) a summary of any Project Results
produced during the period covered by the Project Report. Each Project Report
will include a copy of (a) each report related to the Research activities
received by Isis during the period from a Third Party or Affiliate and (b) all
final versions of written documents created by Isis summarizing the Project
Results for the Research activities and not otherwise included in the any of the
reports described in (a) above that are or have been previously delivered to the
Foundation.

(ii) FTE Reports.
Isis will deliver to the Foundation Research FTE reports (each, a
“FTE Report“) on a [***] basis (each such FTE Report
to be delivered at least [***] prior to the Steering Committee153s regularly
scheduled meeting for the period covered by such FTE Report) for each [***]
through the [***]. Each FTE Report will contain [***].

(f) Follow-Up
Queries. Isis will provide the Foundation153s
Steering Committee members with a reasoned response (including, if requested by
a Foundation Steering Committee member, the raw data underlying the Project
Results or the Additional Project Activities Project Results) to any follow-up
scientific questions asked by a Foundation Steering Committee member concerning
(i) the Research that is the subject of a Project Report or arises from a
discussion at a Steering Committee meeting or (ii) the Additional Project
Activities that are the subject of a Project Report or arises from a discussion
at a Steering Committee meeting.

Any requested raw data may be provided to the Foundation in the same format
(e.g., electronic transfer, CD, DVD, SAS, Microsoft Excel spreadsheet,
etc.) as is used by Isis for its own purposes.

Payments

6. General Payment Obligation; Reimbursement
Obligation for Isis Provided Reimbursable Materials Costs, Specialized Licenses
or Services Costs and Shipping and Insurance Costs; Quarterly Research Payments;
Conditions Precedent for the Payments; Invoicing; Payment
Remittance.

(a) General Payment
Obligation. In full consideration of Isis153
performance of the Research and its other obligations under this Agreement, the
Foundation will, subject to the terms and conditions set forth in this
Agreement, make payments to Isis as provided in this Agreement. The calculation
of the amount of such payments, the timing of the payment of such payments and
conditions precedent for the payment of such payments are set forth in this
Section 6.

(b) Reimbursement Obligation for Isis Provided
Reimbursable Materials Costs, Specialized Licenses or Services Costs and
Shipping and Insurance Costs.

(i) Isis Provided Reimbursable Materials
Costs. Subject to Section 4(b) of this
Agreement, the Foundation will reimburse Isis for the actual costs incurred by
Isis to procure any Isis Provided Reimbursable Materials (all such costs
hereinafter referred to as the “Isis Provided Reimbursable Materials
Costs“).

(ii) Specialized Licenses or Services
Costs. Subject to Section 4(d) of this
Agreement, the Foundation will reimburse Isis for the actual costs incurred by
Isis to license or procure any Specialized Licenses or Services (all such costs
hereinafter referred to as the “Specialized Licenses or Services
Costs“).

(iii) Shipping and Insurance
Costs. The Foundation will reimburse Isis for (A)
the actual costs of carriage, customs duties and insurance incurred by Isis in
connection with the delivery of the Project Deliverables and Provided Research
Materials to the Foundation (or such Third Party specified by the Foundation)
and (B) for the actual costs and expenses incurred by Isis in connection with
the shipping of the Project Deliverables and Provided Research Materials to the
Foundation (or such Third Party specified by the Foundation) (all such costs
hereinafter referred to as the “Shipping and Insurance
Costs“), in each case provided that such costs are reasonable.

(c) Additional Project Activities Description
Payment. For the performance of the Research
performed by, or on behalf of, Isis as described in the Additional Project
Activities Description (the “Additional Project
Activities“), the Foundation will make a one-time payment (the
“Additional Project Activities Payment“) to Isis in
the amount of US$[***] (the “Additional Project Activities Payment
Amount“). Isis agrees that (i) upon the payment of the Additional
Project Activities Payment Amount by the Foundation, the Foundation will have
paid Isis all amounts owed by the Foundation to Isis for the conduct of the
Additional Project Activities and (ii) the Foundation has paid Isis all amounts
owed by CHDI pursuant to Section 5 of the 2007 Research Agreement.

(d) Advance Research
Payment. The Foundation will make a payment (the
“Advance Research Payment“) to Isis in the amount of
US$[***] (the “Advance Research Payment Amount“). Isis
acknowledges and agrees that the Advance Research Payment Amount shall, in
accordance with Section 6(g)(i) of this Agreement, be applied as a credit
against the final Quarterly Research Payment (as defined in Section 6(e)
of this Agreement).

(e) Quarterly Research
Payments.

(i) General.
Promptly following the end of each calendar quarter, Isis will calculate the
payment (each, a “Quarterly Research Payment“) to be
made by the Foundation in respect of (A) the Research FTE costs incurred by Isis
in performing the Research during such period, (B) Isis Provided Reimbursable
Materials Costs incurred by Isis during such period, (C) the Specialized
Licenses or Services Costs incurred by Isis during such period and (D) the
Shipping and Insurance Costs incurred by Isis during such period.

(ii) Specific Calculation of each Quarterly
Research Payment. Each Quarterly Research Payment
in respect of the period covered by such Quarterly Research Payment will be
calculated in accordance with the terms of this Agreement and will be an amount
equal to [***].

(f) Conditions Precedent for
Payments.

(i) Conditions Precedent for the Payment of the
Additional Project Activities Payment. The
obligation of the Foundation to pay the Additional Project Activities Payment is
subject to Isis153 delivery to the Foundation, in accordance with [***] of this
Agreement, of [***] on or prior to the date that Isis issues an invoice in
respect of such Additional Project Activities Payment.

(ii) Conditions Precedent for the Payment of the
Quarterly Research Payments. With respect to each
Quarterly Research Payment, the obligations of the Foundation to pay such
Quarterly Research Payment are subject to the fulfillment of each of the
following conditions:

[***]

provided, however, that the Foundation will pay each Quarterly
Research Payment to Isis no later than [***] after the date of the Foundation153s
receipt of the invoice for such Quarterly Research Payment, if Isis has, with
respect to such Quarterly Research Payment [***].

(g) Invoicing; Payment
Remittance.

(i) Invoicing. At
such time as Isis has, in accordance with [***] of this Agreement, delivered to
the Foundation the [***], Isis will also deliver to the Foundation an invoice
for the Additional Project Activities Payment to be made by the Foundation for
such period. At such time as Isis has, in accordance with Section 5(e)
of this Agreement, delivered to the Foundation the [***] and [***] for a
particular calendar quarter, Isis will also deliver to the Foundation an invoice
for the Quarterly Research Payment to be made by the Foundation for such
calendar quarter. Each invoice delivered by Isis for a payment under this
Agreement will (A) reference the “RecID” number set forth in the footer of this
Agreement, (B) be issued in US Dollars, (C) be itemized and contain detailed
information in respect of the payment being billed under such invoice and (D) as
applicable, include a copy of all relevant receipts and/or invoices related to
the payment being billed under such invoice. Isis agrees that a) the invoice
submitted by Isis in respect of the final Quarterly Research Payment shall
credit the Advance Research Payment Amount against such final Quarterly Research
Payment and b) if the amount of final Quarterly Research Payment is less than
the Advance Research Payment Amount, Isis shall promptly make a payment to the
Foundation in an amount equal to the amount by which the Advance Research
Payment Amount exceeded the amount of the final Quarterly Research Payment.

(ii) Payment
Remittance. Subject to the terms and conditions of
this Agreement, each payment to be made by the Foundation under this Agreement
will be due and payable by the Foundation within [***] of the date of the
receipt by the Foundation of the invoice issued by Isis in accordance with this
Agreement in respect of such payment. All payments made by the Foundation under
this Agreement will be paid by check in US Dollars and remitted to Isis at the
address set forth in Section 19 of this Agreement. Any payment made by
the Foundation under this Agreement in respect of an invoice issued by Isis
under this Agreement using a currency other than US Dollars will be converted by
the Foundation to US Dollars at the exchange rate prevailing on or about the
date that the Foundation remits such payment to Isis.

Project Results

7. Ownership of Project Results; Notification and
Delivery of Project Results; Withdrawal of Project Results; Transfers of the
Project Results to Collaborators.

(a) Ownership of Project
Results. Isis and the Foundation will own [***]
all Project Results. The ownership of the Project Results will vest in the
Parties in that manner immediately upon creation. Each Party hereby assigns, and
agrees to assign, to the other Party sufficient right, title and interest in the
Project Results to accomplish such ownership. Each of Isis and the Foundation
agrees that it will not sell or otherwise transfer (including by sale of assets
or stock or by merger or other business combination) its title to any Project
Results to any Third Party or Affiliate unless such Third Party or Affiliate
takes title to such Project Results (i) subject to the rights of the
non-transferring Party in such Project Results under this Agreement and (ii)
assumes the obligations of the transferring Party with respect to such Project
Results under this Agreement; provided, however, that the transferring
Party will (A) notify the non-transferring Party in writing within 10 days after
any such transfer and (B) provide the non-transferring Party with a copy of the
written assignment and assumption or similar agreement between the transferring
Party and the Third Party or Affiliate transferee.

(b) Notification and Delivery of Project Results;
Withdrawal of Project Results.

(i) Notification and Delivery of Project
Results.

(A) General. Isis
will inform the Foundation of, and deliver, the Project Results to the
Foundation within a reasonable period of time following the conception,
discovery, invention or production, as the case may be, of each such Project
Result through the Steering Committee meetings, Project Reports and the
transmittal of the raw data underlying the Project Results pursuant to
Section 5(f) of this Agreement.

(B) Delivery of Additional Project Activities
Project Results. Isis has informed the Foundation
of, and delivered, the Project Results relating to the programs of Research
performed by, or on behalf of, Isis as described in the Additional Project
Activities Description to the Foundation in a series of reports (collectively,
the “Additional Project Activities Project Results“).
Within [***] of the Effective Date, the Additional Project Activities Project
Results previously delivered to the Foundation will be compiled by Isis and
organized into a master report and redelivered to the Foundation (the
“Additional Project Activities Project Results
Report“), and will include an activity index listing each
slide/page of such report relevant to each particular activity.

(ii) Withdrawal of Project
Results. If at any time after informing the
Foundation of the Project Results pursuant to Section 7(b)(i) of this
Agreement Isis determines that there is a reasonable scientific basis to
conclude that all or a portion of such Project Results are not scientifically
valid or accurate, Isis will promptly so notify the Foundation in writing.

(c) Transfers of the Project Results to
Collaborators; Uses of Project Results.

(i) Transfers of the Project Results by Isis to
Third Party Collaborators; Uses of Project
Results. Isis may transfer or have transferred the
Project Results to any of its Affiliates or one or more Third Party
collaborators; provided, that, any such Affiliate or Third Party
collaborator has entered into an agreement with Isis which requires such
Affiliate or Third Party collaborator to maintain similar, but no less
burdensome, obligations of confidentiality and non-use set forth in Section
14(c) of this Agreement. Subject to the foregoing, Isis and each of its
Affiliates and Third Party collaborators shall only have the right to use the
Project Results for all uses and purposes permitted under this Agreement.

(ii) Transfers of the Project Results by the
Foundation to Foundation Collaborators; Uses of Project
Results. The Foundation may transfer or have
transferred the Project Results to any of its Affiliates or one or more
Foundation Collaborators; provided, that, any such Affiliate or
Foundation Collaborator has entered into an agreement with the Foundation which
requires such Affiliate or Foundation Collaborator to maintain similar, but no
less burdensome, obligations of confidentiality and non-use set forth in
Section 14(c) of this Agreement. Subject to the foregoing, the Foundation
and each of its Affiliates and Foundation Collaborators shall only have the
right to (A) use the Project Results for all uses and purposes relating to HD
Research and Development and (B) exercise the license rights granted by Isis
pursuant to Section 10 and Section 12 of this Agreement.

Project Deliverables; Requests for Project
Compounds

8. Ownership of Project Deliverables; Delivery of
Project Deliverables; Transfers of the Project Deliverables to Foundation
Collaborators; Grant of HD Field of Use License to Isis; Isis153 Option to
Negotiate Additional License Rights Outside the HD Field of Use; Transfers of
the Project Deliverables to Foundation Collaborators; Requests for Project
Compounds; Approval of Foundation Project Compound Requests; Criteria for
Approving Foundation Project Compound Requests; Basis for Determination to not
Approve a Foundation Project Compound Request; Delivery of Approved Foundation
Requested Project Compounds; Use of Approved Foundation Requested Project
Compounds; Payment for Approved Foundation Requested Project Compounds;
Invoicing; Payment Remittance; Delivery and Use of Results Arising from the use
of the Project Deliverables.

(a) Ownership of Project
Deliverables. Notwithstanding any provision of
this Agreement to the contrary, as between the Foundation and Isis, the
Foundation will solely own all Project Deliverables. Isis hereby assigns, and
agrees to assign, to the Foundation any and all right, title and interest of
Isis in and to the Project Deliverables. The ownership of each Project
Deliverable will vest in the Foundation immediately upon production of such
Project Deliverable. Upon the written request of the Foundation, Isis will
execute such documents and do all other acts and things as may be reasonably
deemed necessary by the Foundation to effectuate and assure that all right,
title and interest of Isis in and to each Project Deliverable vest in the
Foundation (or its designee). The Foundation will reimburse Isis for all
reasonable out-of-pocket costs and expenses actually incurred by Isis to execute
and deliver to the Foundation any such document(s) referred to immediately
above. For the avoidance of any doubt, notwithstanding any provision of this
Agreement to the contrary, the ownership of a Project Deliverable by the
Foundation does not grant any ownership rights to the Foundation in any
Intellectual Property embodied in or related to such Project Deliverable as the
ownership of any such Intellectual Property is governed solely by the terms of
Section 9 of this Agreement.

(b) Delivery of Project Deliverables; Transfers
of the Project Deliverables to Foundation Collaborators; Grant of HD Field of
Use License to Isis; Isis153 Option to Negotiate Additional License Rights Outside
the HD Field of Use.

(i) Delivery of Project
Deliverables. Promptly following the production of
each Project Deliverable, Isis will deliver such Project Deliverable to the
Foundation. All Project Deliverables will be shipped to the delivery point
specified by the Foundation in writing to Isis.

(ii) Transfers of the Project Deliverables to
Foundation Collaborators; Grant of HD Field of Use License to Isis; Isis153 Option
to Negotiate Additional License Rights Outside the HD Field of
Use.

(A) Transfers of the Project Deliverables to
Foundation Collaborators. The Foundation may
transfer or have transferred the Project Deliverables to one or more Foundation
Collaborators; provided, that, any such Foundation Collaborator has
entered into an agreement with the Foundation which requires such Foundation
Collaborator to maintain similar, but no less burdensome, obligations of
confidentiality and non-use set forth in Section 14(c) of this Agreement.
The Foundation and the Foundation Collaborators shall have the right to (A) use
the Project Deliverables for all uses and purposes relating to HD Research and
Development and (B) exercise the license rights granted by Isis pursuant to
Section 10 and Section 12 of this Agreement

(B) Grant of HD Field of Use License to
Isis. The Foundation hereby grants (and will
require the Foundation Collaborators that use any Project Deliverables to grant)
Isis a fully paid-up, royalty-free, irrevocable, perpetual, worldwide,
non-exclusive license solely in the HD Field of Use under any Intellectual
Property that claims a method of using a Project Compound conceived, discovered,
invented, made or first reduced to practice in the course of the Foundation153s or
a Foundation Collaborator153s use of the Project Deliverables.

(C) Isis153 Option to Negotiate Additional License
Rights Outside the HD Field of Use. In addition to
the non-exclusive license referred to in Section 8(b)(ii)(B) of this
Agreement, the Foundation grants to Isis an exclusive option (each, a
“Project Deliverable Option“) to acquire a worldwide
license under any Intellectual Property that claims a method of using a Project
Compound conceived, discovered, invented, made or first reduced to practice in
the course of the Foundation153s or a Foundation Collaborator153s use of the Project
Deliverables for uses outside of the HD Field of Use, which option will
extend for a period (each, a “Project Deliverable Option Exercise
Period“) of three (3) months following receipt of a notice from
the Foundation disclosing any such Intellectual Property (which notice may be
satisfied by the Foundation153s delivery of the written reports described in
Section 8(d) of this Agreement). With respect to any such Intellectual
Property that is subject to a Project Deliverable Option, Isis shall exercise
such Project Deliverable Option by providing written notice to the Foundation
prior to the expiration of the Project Deliverable Option Exercise Period in
respect of such Project Deliverable Option. If Isis exercises a Project
Deliverable Option, then Isis shall have a period (each, a “Project
Deliverables License Negotiation Period“) of one hundred and
twenty (120) days following the delivery by Isis of the Project Deliverable
Option Exercise Notice in respect of such Project Deliverable Option within
which to negotiate and execute a license in respect of the Intellectual Property
subject to such Project Deliverable Option. Each of the Foundation and Isis
agree (1) to negotiate any such license in good faith and (2) that, upon the
mutual agreement of the Foundation and Isis, to extend the Project Deliverable
License Negotiation Period in respect of such license for an additional
period(s) not to exceed an additional one hundred and twenty (120) days, in the
aggregate.

(c) Requests for Project Compounds; Approval of
Foundation Project Compound Requests; Criteria for Approving Foundation Project
Compound Requests; Basis for Determination to not
Approve a Foundation Project Compound Request; Delivery of Approved Foundation
Requested Project Compounds; Use of Approved Foundation Requested Project
Compounds; Grant of HD Field of Use License to Isis; Isis153 Option to Negotiate
Additional License Rights Outside the HD Field of Use; Payment for Approved
Foundation Requested Project Compounds; Invoicing; Payment
Remittance.

(i) Requests for Project
Compounds. At any time, and from time to time,
during the period beginning on [***] and ending on the date that is [***]
following the expiration or termination of the Term (the
“Foundation Project Compound Request Period“), the
Foundation may request that Isis provide the Foundation with one or more Project
Compounds for use by the Foundation to conduct defined research activities by
providing a written notice (the “Foundation Project Compound Request
Notice“) to Isis (A) identifying each Project Compound (each such
Project Compound, a “Foundation Requested Project
Compound“) and the requested amount thereof (with a minimum
requested amount per Foundation Requested Project Compound of [***]) and (B) a
reasonably detailed description of the proposed research activities (each such
program of proposed research activities, a “Foundation Project
Compound Study“) to be conducted using each Foundation Requested
Project Compound.

(ii) Approval of Foundation Project Compound
Requests; Criteria for Approving Foundation Project Compound Requests; Basis for
Determination to not Approve a Foundation Project Compound
Request.

(A) Approval of Foundation Project Compound
Requests. Within [***] of the receipt by Isis of a
Foundation Project Compound Request Notice, Isis will make a determination
regarding the Foundation153s request for the use of the Foundation Requested
Project Compounds for the Foundation Requested Project Compound Studies
specified in such Foundation Project Compound Request Notice. As part of Isis153
consideration of any such request, Isis may request that the Parties convene a
Steering Committee meeting (or, after the Term, convene representatives of each
Party) to facilitate its consideration of any such request. With respect to any
decision regarding the approval of any request by the Foundation to use
Foundation Requested Project Compounds for the Foundation Requested Project
Compound Studies, Isis will (1) act in good faith and on a responsive basis and
(2) make such decision on a reasonable basis using the criteria set forth in
this Section 8(c)(ii). Each Foundation Requested Project Compound and
each Foundation Project Compound Study that is approved by

Isis in accordance with this Section 8(c)(ii) will, for all purposes
of this Agreement, be referred to as an “Approved Foundation
Requested Project Compound” and “Approved Foundation
Project Compound Study“, respectively.

(B) Criteria for Approving Foundation Project
Compound Requests. Isis will approve each request
by the Foundation to use a Foundation Requested Project Compound for a
Foundation Project Compound Study unless any of the following are determined by
Isis to be true:

[***]

(C) Basis for Determination to not Approve a
Foundation Project Compound Request. If Isis does
not approve a request by the Foundation to use a Foundation Requested Project
Compound for a Foundation Project Compound Study, Isis will, no later than [***]
of the receipt by Isis of a Foundation Project Compound Request Notice for such
request, deliver to the Foundation a written notice setting forth in reasonable
detail Isis153 basis under the criteria set forth in Section 8(c)(ii)(B)
of this Agreement for not approving such request. Isis agrees that, if Isis does
not approve such a request, the Foundation may dispute such determination by
Isis and seek resolution pursuant to Section 5(a)(iii)(B) of this
Agreement.

(iii) Delivery of Approved Foundation Requested
Project Compounds. Following Isis153 approval of a
request by the Foundation to use a Foundation Requested Project Compound for a
Foundation Project Compound Study, Isis will use reasonable commercial efforts
to (A) manufacture such Approved Foundation Requested Project Compound in
accordance with the standards and specifications developed for such Approved
Foundation Requested Project Compound during the course of the conduct of the
Project and (B) supply the Foundation with the amount of such Approved
Foundation Requested Project Compound within a reasonable period of time
following such approval.

(iv) Use of Approved Foundation Requested Project
Compounds; Grant of HD Field of Use License to Isis; Isis153 Option to Negotiate
Additional License Rights Outside the HD Field of
Use.

(A) Use of Approved Foundation Requested Project
Compounds. The Foundation agrees that each
Approved Foundation Requested Project Compound will be used by the Foundation
and the Foundation Collaborators for the sole purpose of conducting the Approved
Foundation Project Compound Study for which such Approved Foundation Requested
Project Compound was approved.

(B) Grant of HD Field of Use License to
Isis. The Foundation hereby grants (and will
require the Foundation Collaborators that use any Approved Foundation Requested
Project Compound to grant) Isis a fully paid-up, royalty-free, irrevocable,
perpetual, worldwide, non-exclusive license solely in the HD Field of Use under
any Intellectual Property that claims a method of using an Approved Foundation
Requested Project Compound conceived, discovered, invented, made or first
reduced to practice in the course of the Foundation153s or a Foundation
Collaborator153s use of an Approved Foundation Requested Project Compound.

(C) Isis153 Option to Negotiate Additional License
Rights Outside the HD Field of Use. In addition to
the non-exclusive license referred to in Section 8(c)(iv)(B) of this
Agreement, the Foundation grants to Isis an exclusive option (each, an
“Approved Foundation Requested Project Compound
Option“) to acquire a worldwide license under any Intellectual
Property that claims a method of using an Approved Foundation Requested Project
Compound conceived, discovered, invented, made or first reduced to practice in
the course of the Foundation153s or a Foundation Collaborator153s use of the
Approved Foundation Requested Project Compound for uses outside of the
HD Field of Use, which option will extend for a period (each, an
“Approved Foundation Requested Project Compound Option Exercise
Period“) of three (3) months following receipt of a notice from
the Foundation disclosing any such Intellectual Property (which notice may be
satisfied by the Foundation153s delivery of the written reports described in
Section 8(d) of this Agreement). With respect to any such Intellectual
Property that is subject to an Approved Foundation Requested Project Compound
Option, Isis shall exercise such Approved Foundation Requested Project Compound
Option by providing written notice to the Foundation prior to the expiration of
the Approved Foundation Requested Project Compound Option Exercise Period in
respect of such Approved Foundation Requested Project Compound Option. If Isis
exercises an Approved Foundation Requested Project Compound Option, then Isis
shall have a period (each, an “Approved Foundation Requested Project
Compound License Negotiation Period“) of one hundred and twenty
(120) days following the delivery by Isis of the Approved Foundation Requested
Project Compound Option Exercise Notice in respect of such Approved Foundation
Requested Project Compound Option within which to negotiate

and execute a license in respect of the Intellectual Property subject to such
Approved Foundation Requested Project Compound Option. Each of the Foundation
and Isis agree (1) to negotiate any such license in good faith and (2) that,
upon the mutual agreement of the Foundation and Isis, to extend the Approved
Foundation Requested Project Compound License Negotiation Period in respect of
such license for an additional period(s) not to exceed an additional one hundred
and twenty (120) days, in the aggregate.

(v) Payment for Approved Foundation Requested
Project Compounds; Invoicing; Payment Remittance.
The Foundation will pay Isis a fee of US$[***] per [***] (or portion thereof)
per Approved Foundation Requested Project Compound delivered to the Foundation
pursuant to, and in accordance with, this Section 8(c). Simultaneously
with the delivery of each Approved Foundation Requested Project Compound, Isis
will deliver to the Foundation an invoice for payment in respect of such
Approved Foundation Requested Project Compound. Each invoice delivered by Isis
for an Approved Foundation Requested Project Compound will (A) reference the
“RecID” number set forth in the footer of this Agreement, (B) be issued in US
Dollars and (C) be itemized and contain detailed information in respect of the
Approved Foundation Requested Project Compound being billed for under such
invoice. Subject to the terms and conditions of this Agreement, each payment to
be made by the Foundation in respect of an Approved Foundation Requested Project
Compound under this Agreement will be due and payable by the Foundation within
60 days of the date of the receipt by the Foundation of the invoice issued by
Isis in accordance with this Agreement in respect of such payment. All such
payments made by the Foundation under this Agreement will be paid by check in US
Dollars and remitted to Isis at the address set forth in Section 19 of
this Agreement. For the avoidance of doubt, unless otherwise approved by the
Steering Committee pursuant to Section 13(a)(ii)(E) of this Agreement,
the (1) cost of any Approved Foundation Requested Project Compound Studies
conducted by the Foundation or the Foundation Collaborators and (2) amounts paid
to Isis under this Section 8(c)(v) for Approved Foundation Requested
Project Compounds, will not be reimbursed by Isis under this Agreement, and will
not be considered “Revenue” under Section 13 of this Agreement.

(d) Delivery and Use of Results Arising from the
use of the Project Deliverables. The Foundation
will deliver to Isis a written report setting forth a summary of all data,
formulae, methods, outcomes, protocols or other results produced by the
Foundation or any Foundation Collaborator using the Project Deliverables
(including any Approved Foundation Requested Project Compound). Each such report
(A) will be delivered to Isis within a reasonable period of time following the
completion of the research activities in which the Project Deliverables were

used, (B) will be in substantially the same format and contain the same
degree of detail as the Foundation generally uses to communicate such
information internally and to its Third Party research collaborators and (C)
will include a copy of (1) each report related such results received by the
Foundation from a Third Party or Affiliate and (2) all final versions of written
documents created by the Foundation summarizing such results and not otherwise
included in the any of the reports described in (1) above that are delivered to
Isis. Isis agrees that all reports and results delivered by the Foundation to
Isis pursuant to this Section 8(d) shall be deemed the Confidential
Information of the Foundation and, notwithstanding any other provision of this
Agreement, may only be (a) used by Isis for Research and Development, (b)
disclosed in accordance with, and to only those Third Parties and Affiliates
expressly permitted by, Section 14(c) of this Agreement, and (c) licensed
by Isis to a Third Party under a Commercial License (subject to such Third
Party153s agreement to keep such reports and results confidential under terms no
less restrictive as those set forth in Section 14 of this Agreement).
Isis acknowledges and agrees that, notwithstanding the foregoing, except as
otherwise provided in this Section 8(d) or Section 8(b)(ii) or
Section 8(c)(iv) of this Agreement, no license or other rights are
granted to Isis with respect to any Intellectual Property covering or claiming,
or otherwise embodied in, such reports or the information contained therein.

Intellectual Property

9. Ownership of Background Intellectual Property;
Ownership of Project Intellectual Property; Grant of Exclusive License to the
Project HD Intellectual Property by the Foundation Outside the HD Field of Use;
Disclosure of Inventions; Inventorship; Prosecution of Patentable Project HD
Intellectual Property; Disclaimer of Interest in Patentable Project Intellectual
Property; Infringement or Misappropriation of Project Intellectual
Property.

(a) Ownership of Background Intellectual
Property.

(i) Ownership of Isis Background Intellectual
Property. As between the Foundation and Isis, Isis
will solely own all Isis Background Intellectual Property. Except as expressly
set forth in this Agreement, the Foundation will have no ownership or other
interest in any Isis Background Intellectual Property.

(ii) Ownership of Foundation Background
Intellectual Property. As between the Foundation
and Isis, the Foundation will solely own all Foundation Background Intellectual
Property. Except as expressly set forth in this Agreement, Isis will have no
ownership or other interest in any Foundation Background Intellectual Property.

(b) Ownership of Project Intellectual Property;
Grant of Exclusive License to the Project HD Intellectual Property by the
Foundation Outside the HD Field of Use.

(i) Ownership of Project Intellectual
Property.

(A) Ownership of Project Non-HD Intellectual
Property. As between the Foundation and Isis, Isis
will solely own all Project Non-HD Intellectual Property. Except as expressly
set forth in this Agreement, the Foundation will have no ownership or other
interest in any Project Non-HD Intellectual Property.

(B) Ownership of Project HD Intellectual
Property. Isis and the Foundation will own [***]
all Project HD Intellectual Property. The ownership of the Project HD
Intellectual Property will vest in the Parties in that manner immediately upon
creation. Each Party hereby assigns to the other Party sufficient right, title
and interest in the Project HD Intellectual Property to accomplish such
ownership. Neither Isis nor the Foundation will sell or otherwise transfer
(including by sale of assets or stock or by merger or other business
combination) its title to any Project HD Intellectual Property (including any
Reverted Project HD Intellectual Property (as defined in Section
9(b)(iii)(A) of this Agreement)) to any Third Party or Affiliate unless such
Third Party or Affiliate takes title to such Project HD Intellectual Property
(1) subject to the rights of the non-transferring Party in such Project HD
Intellectual Property under this Agreement and (2) assumes in writing the
obligations of the transferring Party with respect to such Project HD
Intellectual Property under this Agreement, including the limitations under this
Agreement relating to the transferring Party153s use of such Project HD
Intellectual Property; provided, however, that the transferring Party
will a) notify the non-transferring Party in writing within 10 days after any
such transfer and b) provide the non-transferring Party with a copy of the
relevant part of the written assignment and assumption or similar agreement
between the transferring Party and the Third Party or Affiliate transferee.

(ii) Grant of Exclusive License to the Project HD
Intellectual Property by the Foundation Outside the HD Field of
Use. The Foundation grants to Isis a fully
paid-up, royalty-free, worldwide exclusive license under any Project HD
Intellectual Property (including (A) any patent application, divisional,
continuation, continuation-in-part, substitute, renewal, reexamination,
extension or reissue in respect of any applicable patent or (B) any intellectual
property rights claimed in respect of any applicable patent), to use the Project
HD Intellectual Property for any use or purpose outside the HD Field of Use. The
license rights granted by the Foundation

under this Section 9(b)(ii) will be subject to termination by the
Foundation in the event of Isis153 material breach of this Agreement if such
material breach is not cured within 45 days following receipt by Isis of notice
of such material breach.

(iii) Reversion of Foundation153s Rights in Project
HD Intellectual Property.

(A) Reversion of Foundation153s Rights in Project
HD Intellectual Property. Upon the termination of
this Agreement by the Foundation pursuant to Section 17(b)(i) of this
Agreement, subject to (1) the rights reserved by the Foundation pursuant to
Section 9(b)(iii)(B) of this Agreement and (2) the Foundation153s Revenue
(as defined in Section 13(a) of this Agreement) sharing rights set forth
in Section 13 of this Agreement, all of the Foundation153s right, title and
interest in and to the Project HD Intellectual Property will revert to Isis
(after such termination, all Project HD Intellectual Property shall also be
referred to herein as “Reverted Project HD Intellectual
Property“).

(B) The Foundation153s Right to Use Reverted
Project HD Intellectual Property. With respect to
all Reverted Project HD Intellectual Property, the Foundation hereby reserves,
and Isis hereby grants to the Foundation, a fully paid-up, royalty-free,
irrevocable, perpetual, world-wide non-exclusive license (including a license
under any related Intellectual Property rights) for all uses and purposes
related to HD Research and Development including to (1) make, have made, use and
have used products or processes resulting from such Reverted Project HD
Intellectual Property, (2) practice and have practiced such Reverted Project HD
Intellectual Property and (3) use and have used the Confidential Information
relating to such Reverted Project HD Intellectual Property; provided,
however, that, the foregoing license (1) will be for HD Research and
Development only, (2) will not include any right to manufacture or distribute
for sale or sell, (3) will not be subject to royalties or other fees and (4)
will include the right to grant sublicenses on the same terms; provided,
further that, such sublicense (i) is granted without payment of royalties,
other fees or profit and (ii) prohibits the sublicensee from granting
sublicenses.

(c) Disclosure of Inventions;
Inventorship.

(i) Disclosure of
Inventions. If either Party believes that any
Intellectual Property has been conceived, discovered, invented, made or first
reduced to practice in the course of the performance of the Research, such Party
will promptly give notice (each, an “Invention
Notice“) of such Intellectual Property to the other Party.

(ii) Inventorship.
The identity of the inventor(s) of all patentable Intellectual Property that has
been conceived, discovered, invented, made or first reduced to practice in the
course of the performance of the Research will be determined in accordance with
United States Patent law (or, if the jurisdiction in which patent or other
protection is being sought does not permit the application of United States
Patent law to identify the inventor, then in accordance with the applicable law
in that jurisdiction).

(d) Prosecution of Patentable Project HD
Intellectual Property.

(i) Responsibility for Prosecution of Patentable
Project HD Intellectual Property. Isis will
prepare, file, prosecute and maintain the appropriate filings in respect of any
Patentable Project HD Intellectual Property including filing (A) a provisional
patent application or (B) a patent application (including a patent application
corresponding to a previously filed provisional patent application) claiming any
such Patentable Project HD Intellectual Property in the United States and in
such other jurisdictions as the Steering Committee jointly determine in good
faith are necessary in order to protect Isis153 and the Foundation153s rights in
such Patentable Project HD Intellectual Property. Isis will ensure that all such
filings are filed in the name of Isis and the Foundation as co-owners.

(ii) Foundation Election to have Prosecution of
Patentable Project HD Intellectual Property
Initiated. At any time and from time to time, the
Foundation will have the right to elect to cause Isis to prepare, file,
prosecute and maintain the appropriate filings in respect of any Patentable
Project HD Intellectual Property which is the subject of an Invention Notice by
providing notice (a “Foundation Patent Filing Election
Notice“) of such election to Isis. Promptly following the receipt
of a Foundation Patent Filing Election Notice, Isis will, to the extent not
prohibited by any Commercial License then in effect, prepare, file, prosecute
and maintain the appropriate filings in respect of the Patentable Project
Intellectual Property which is the subject of a Foundation Patent Filing
Election Notice, including filing (A) a provisional patent application or (B) a
patent application (including a patent application corresponding to a previously
filed provisional patent application) claiming any such Patentable Project
Intellectual Property in the United States and in such other jurisdictions as
the Steering Committee jointly determine in good faith are necessary in order to
protect Isis153 and the Foundation153s rights in such Patentable Project HD
Intellectual Property. Isis will ensure that all such filings are filed in the
name of Isis and the Foundation as co-owners.

(iii) Covenants of
Isis. With respect to the prosecution and
maintenance by Isis of any Patentable Project HD Intellectual Property pursuant
to this Section 9(d), Isis will use commercially reasonable efforts to
promptly (A)

give all notices required by, and comply with all other requirements of,
applicable law to reasonably preserve the Parties153 rights in such Patentable
Project HD Intellectual Property as appropriate; (B) prepare, file, prosecute
and maintain, as applicable, the appropriate filings and patents to reasonably
protect the Parties153 rights in such Patentable Project HD Intellectual Property;
(C) provide the Foundation with a copy of any proposed filings in respect of
such Patentable Project HD Intellectual Property at least 15 days prior to the
filing of such proposed filings; (D) provide the Foundation with a copy of any
provisional patent application or patent application filed claiming such
Patentable Project HD Intellectual Property; (E) provide the Foundation with
copies of all correspondence and other documents relating to the prosecution and
maintenance of such Patentable Project HD Intellectual Property that come into
the possession or control of Isis; and (F) such other documents and information
related to such Patentable Project HD Intellectual Property as the Foundation
may reasonably request and Isis can provide without incurring unreasonable cost
and expense.

(iv) Patent
Expenses. Each Party will be responsible for 100%
of the Patent Expenses incurred by such Party.

(e) Disclaimer of Interest in Patentable Project
HD Intellectual Property.

(i) Disclaimer
Notice. With respect to any Patentable Project HD
Intellectual Property, either Party may, at any time, disclaim its interest in
such Patentable Project HD Intellectual Property by providing notice of such
election (“Patentable Project HD Intellectual Property Disclaimer
Notice“) to the other Party. Isis will be deemed to have
disclaimed its interest in any Patentable Project HD Intellectual Property that
is the subject of a Foundation Patent Filing Election Notice if Isis fails to
comply with the obligations set forth in Section 9(d) of this Agreement
with respect to such Patentable Project HD Intellectual Property within 45 days
of Isis153 receipt of the Patentable Project HD Intellectual Property Disclaimer
Notice in respect of such Patentable Project HD Intellectual Property.

(ii) Effect of Disclaimer
Notice. In the event that a Patentable Project HD
Intellectual Property Disclaimer Notice is delivered by either Party in respect
of Patentable Project HD Intellectual Property: (A) the disclaiming Party hereby
assigns its ownership interest in such Patentable Project HD Intellectual
Property to the non-disclaiming Party without consideration, and will execute
all documents reasonably necessary to perfect such assignment at the
non-disclaiming Party153s cost; (B) except as expressly set forth in this
Agreement, the disclaiming Party will have no further rights to such Patentable
Project HD Intellectual Property; and (C) the disclaiming Party will, at any
time during and after the term of this

Agreement, cooperate with the non-disclaiming Party without consideration but
at the expense of the non-disclaiming Party in preparing, filing, prosecuting
and maintaining, as applicable, the appropriate filings to protect the
non-disclaiming Party153s rights in such Patentable Project HD Intellectual
Property, including obtaining execution by its employees of any documents
necessary in connection with such activities. Each of the Parties will use
reasonable efforts to keep the other Party advised of its deliberations
regarding its determinations as to electing to disclaim its interest in any
Patentable Project HD Intellectual Property.

(f) Infringement or Misappropriation of Project
Intellectual Property.

(i) Infringement or Misappropriation of Project
Intellectual Property by Third Parties. Each Party
will promptly notify each other in writing of any alleged or threatened
infringement or misappropriation of any Project Intellectual Property of which
it becomes aware. In connection with any such alleged or threatened infringement
or misappropriation, each Party will confer and take such action and allocate
recoveries in such manner as they in good faith may mutually agree. Neither Isis
nor the Foundation will settle a claim brought against a Third Party in respect
of such infringement or misappropriation without the consent of the other Party,
which consent will not be unreasonably withheld, delayed or conditioned.

(ii) Infringement or Misappropriation Claims by
Third Parties Related to Project Intellectual
Property. Each Party will promptly notify the
other Party in writing if any Third Party alleges that the use or practice of
any Project Intellectual Property infringes or misappropriate such Third Party153s
Intellectual Property rights. In connection with any such alleged infringement
or misappropriation, each Party will confer and take such action in such manner
as they in good faith may mutually agree. Neither Party will settle a claim
brought by a Third Party in respect of such infringement or misappropriation
without the consent of the other Party, which consent will not be unreasonably
withheld, delayed or conditioned.

(iii) Infringement or Misappropriation Outside of
the HD Field of Use. Notwithstanding the foregoing
in this Section 9(f), Isis has the sole right (but not the obligation) to
assume direction and control of the prosecution and/or defense of any claim
against or alleged by a Third Party outside of the HD Field of Use that involves
actual or potential infringement or misappropriation of any Project Intellectual
Property, or alleges that the use or practice of any Project Intellectual
Property infringes or misappropriates a Third Party153s Intellectual Property
rights (Isis153 right shall include the sole right to settle such a claim in Isis153
sole discretion, provided that such settlement does not (A) admit any
fault or negligence on the part of the Foundation and/or its Affiliates, (B)
impose any obligation on the Foundation and/or its Affiliates or (C) without the
prior

written consent of the Foundation (which consent shall not unreasonably
withheld, conditioned or delayed), adversely affect the Foundation and/or its
Affiliates in any way.

10. Licenses to Project HD Intellectual Property
and Project Compounds in the HD Field of Use.

(a) Commercialization of Project HD Intellectual
Property and Project Compounds; Reservation of Rights Regarding Project HD
Intellectual Property and Project Compounds.

(i) Commercialization of Project HD Intellectual
Property and Project Compounds. Except as
expressly permitted by this Agreement, neither Party will use or otherwise
exploit any Project HD Intellectual Property or any Project Compound for any use
or purpose or grant any license of any Project HD Intellectual Property or any
Project Compound for any use or purpose. Except as expressly permitted by
Section 10(a)(ii) of this Agreement, (1) the use or other exploitation of
any Project HD Intellectual Property or any Project Compound by either of the
Parties, an Affiliate of either Party or a Third Party and (2) the grant of any
license of any Project HD Intellectual Property or any Project Compound by
either of the Parties to an Affiliate of either Party or a Third Party, in each
case for uses other than Research and Development in the HD Field of Use, will
only be done pursuant to the grant of a commercial license under a license
agreement executed by both Parties (any such license will hereinafter be
referred to as a “Commercial License“). For the
avoidance of any doubt, the Parties agree that this Section 10 shall not
apply to a) the use or other exploitation or b) the grant of any license for any
purpose of any Project HD Intellectual Property or any Project Compound outside
the HD Field of Use.

(ii) Reservation of Rights by the Parties to
Grant Certain Licenses.

(A) Isis153 Right to Use Project Intellectual
Property and Project Compounds. Isis reserves the
right to use any Project HD Intellectual Property and any Project Compound for
all uses and purposes relating to Research and Development.

(B) Isis153 Right to Grant Research and Development
Licenses. Isis reserves the right to grant
non-exclusive licenses throughout the world in respect of any Project HD
Intellectual Property or any Project Compound for all uses and purposes relating
to Research and Development.

(C) Foundation153s Right to Use Project HD
Intellectual Property and Project Compounds. The
Foundation reserves the right to use

any Project HD Intellectual Property and any Project Compound for all uses
and purposes relating to HD Research and Development.

(D) Foundation153s Right to Grant HD Research and
Development Licenses. The Foundation reserves the
right to grant non-exclusive licenses throughout the world in respect of any
Project HD Intellectual Property or any Project Compound for all uses and
purposes relating to HD Research and Development.

(b) Conduct of Human Clinical
Trials.

(i) Obligation to the Parties to
Confer. Isis and the Foundation will confer with
each other on the conduct of human clinical trials involving any Project
Compound prior to the initiation of any human clinical trials for such Project
Compound.

(ii) Isis153 Right to Conduct Human Clinical
Trials. Subject to Section 10(b)(i) of this
Agreement, but notwithstanding any other provision of this Agreement, Isis will
have the right to conduct human clinical trials involving any Project Compound.

(iii) Foundation153s Right to Conduct Human
Clinical Trials. Subject to Section
10(b)(i) of this Agreement, if (A) within [***] of Isis153 receipt of a
request from the Foundation for Isis to undertake the conduct of a human
clinical trial involving a Project Compound reasonably required to advance such
Project Compound for the diagnosis, treatment, cure or prevention of
Huntington153s disease, Isis does not agree to promptly initiate and conduct such
a human clinical trial or (B) the Parties decide that the Foundation will
conduct human clinical trials concurrently with a human clinical trial being
conducted by Isis, the Foundation will have the right to conduct human clinical
trials on its own or through or with a Third Party selected by the Foundation.
For the avoidance of doubt, the Foundation will have the right to use Isis
Background Intellectual Property, Project HD Intellectual Property and Project
Compounds for the conduct of any such human clinical trials.

(c) Right to Make Proposal Regarding the Granting
of a Commercial License.

(i) The Parties agree (1) that either Party may submit to
the Parties for their consideration under this Section 10 a proposal for
the granting of a Commercial License and (2) to consult and make a determination
regarding the granting of a Commercial License in respect of such proposal in
accordance with the provisions of this Section 10.

(ii) If (1) the Parties are evaluating multiple proposals
(including one submitted by Isis or an Affiliate of Isis pursuant to which Isis
or an Affiliate of Isis would be granted a Commercial License (the
“Isis Proposal“)) to determine whether or not the
principles and guidelines set forth in this Section 10 for the granting
of a Commercial License have been satisfied and (2) more than one of such
proposals (including an Isis Proposal) satisfies the principles and guidelines
set forth in this Section 10 on a substantially equivalent basis, the
Foundation agrees to accept the Isis Proposal and agrees to grant a Commercial
License to Isis in accordance with this Section 10.

(d) Principles and Guidelines for Granting
Commercial Licenses.

(i) Good Faith
Consultations. The Parties will consult, and work
in a collaborative fashion, with each other in accordance with the provisions of
this Section 10 concerning the grant of any Commercial License. With
respect to any decision regarding the granting of any Commercial License, the
Parties will (A) act in good faith and on a responsive basis and (B) make such
decision on a reasonable basis using the principles and guidelines set forth in
this Section 10(d). In addition, neither Isis nor the Foundation will
unreasonably withhold, delay or condition their consent to a Commercial License
or demand additional payments beyond those required under this Agreement.

(ii) Fundamental Principles and
Guidelines. A Commercial License will be granted
if and only if the Parties mutually agree that the granting of such Commercial
License is reasonably likely to:

(A) maximize the impact on the health and well-being of
Huntington153s disease patients;

(B) maximize the availability of diagnostic or therapeutic
products to Huntington153s disease patients; and

(C) maximize the speed of which diagnostic or therapeutic
products are available to Huntington153s disease patients.

(iii) Availability of Products as Primary Factor
for Granting Commercial Licenses. Subject to
Section 10(d)(iv), if (A) the Parties are evaluating multiple proposals
(including an Isis Proposal) for the granting of a Commercial License, (B) more
than one of the proposals satisfies the principles and guidelines set forth in
this Section 10 (other than (1) the proposed economic terms and (2) the
proposed time frame for making the diagnostic or therapeutic product which is to
be the subject of such Commercial License available to Huntington153s disease
patients) on a substantially equivalent basis; and (C) one of the proposals sets
forth a

time frame for making the diagnostic or therapeutic product which is to be
the subject of such Commercial License available to Huntington153s disease
patients that is substantially shorter than those set forth in the other
proposals being considered by the Parties, then the proposal setting forth such
substantially shorter time frame, if accompanied by firm diligence obligations,
will be accepted by the Parties and a Commercial License granted to the entity
making such proposal even if the economic terms of such proposal are
substantially less than those set forth in the other proposals being considered
by the Parties.

(iv) Commercial License Agreement Terms and
Conditions. In addition to the principles and
guidelines set forth in Section 10(d)(ii) and Section 10(d)(iii)
of this Agreement, a Commercial License will be granted if and only if the
Parties mutually agree that the terms and conditions of the license agreement in
respect of such Commercial License incorporates the following terms, principles
and guidelines:

(A) reasonable performance milestones and a demonstrated
capacity of the licensee to be able to meet those milestones; and

(B) reasonable business and other terms and conditions that
are in keeping with the then existing market standards for agreements of such
type and nature in respect of similar technology and in similar disease
indications.

(e) Resolution of Disputes Regarding the Granting
of Commercial Licenses. If the Parties cannot
reach a mutual agreement regarding the granting of a Commercial License in
respect of a proposal for the granting of a Commercial License submitted by
either of the Parties for their consideration in accordance with the provisions
of this Section 10 (each, a “Commercial License Grant
Dispute“), either Party may submit such Commercial License Grant
Dispute to B. Lynne Parshall, in the case of Isis (or such other individual
identified in writing by Isis), and Robi Blumenstein, in the case of the
Foundation (or such other individual identified in writing by the Foundation),
for resolution by providing a written notice (each, a “Internal
Commercial License Grant Dispute Resolution Notice“) to the other
Party setting forth in reasonable detail the basis of such Commercial License
Grant Dispute. Such individuals will, within 20 days after such Internal
Commercial License Grant Dispute Resolution Notice is delivered, meet and
attempt in good faith to resolve such Commercial License Grant Dispute. If such
Commercial License Grant Dispute is not resolved within such 20-day period,
either Party may require that the Parties submit such Commercial License Grant
Dispute for resolution by an independent Third Party with appropriate
qualifications for resolution to evaluate such matter (a “Neutral
Expert“) by providing a written notice (an “External
Commercial License Grant Dispute Resolution Notice“) to such
effect that identifies the Commercial License Grant Dispute to be resolved to
the other Party within 15 days after the end of

such 20-day period. If the Parties fail to agree on a Neutral Expert within
10 days after an External Commercial License Grant Dispute Resolution Notice is
delivered, then each Party will submit the name and qualifications of one
proposed Neutral Expert, along with a written statement not to exceed five pages
that identifies the issue(s) to be decided, to JAMS in Denver, Colorado,
pursuant to its Streamlined Arbitration Rules and Procedures, with a copy to the
other Party, and JAMS will appoint a single arbitrator, who will be authorized
solely to select, within 10 days of his or her appointment and pursuant to this
Section 10(e), which Party153s proposed Neutral Expert will be designated
for resolution of such matter, which decision will be final and binding on both
Parties. Upon the designation of the Neutral Expert, each Party will have 10
days to submit any appropriate materials to such Neutral Expert, with copies to
the other Party. No Party will communicate with the Neutral Expert except by
written communications copied to the other Party, or orally in the physical or
telephonic presence of the other Party. The Neutral Expert will render a written
decision within 15 days after the deadline for submission of materials from the
Parties. The decision of the Neutral Expert will be final and binding on both
Parties. The Parties agree that any and all such deliberations will be
confidential.

(f) Grants of Non-Exclusive Licenses Under
Disclaimed Patentable Project Intellectual
Property.

(i) Grant of Non-Exclusive License to the
Foundation. With respect to each patent (including
(A) any patent application, divisional, continuation, continuation-in-part,
substitute, renewal, reexamination, extension or reissue in respect of such
patent or (B) any intellectual property rights claimed in respect of such
patent) claiming Patentable Project HD Intellectual Property that the Foundation
has disclaimed its interest pursuant to Section 9(e) of this Agreement
(the “Foundation Disclaimed Intellectual Property“),
Isis hereby grants the Foundation a fully paid-up, royalty-free, irrevocable,
perpetual, worldwide non-exclusive license, with the limited right to sublicense
as set forth in this Section 10(f)(i), under such Foundation Disclaimed
Intellectual Property for HD Research and Development, including a license to
(1) make, have made, use, have used, import and have imported any product
covered by such Foundation Disclaimed Intellectual Property, (2) practice and
have practiced any method or process covered by such Foundation Disclaimed
Intellectual Property, and (3) use and have used the Confidential Information
relating to such Foundation Disclaimed Intellectual Property, in each case
solely for HD Research and Development. The foregoing license a) will be for HD
Research and Development only, b) will not include any right to manufacture or
distribute for sale or sell, c) will not be subject to royalties or other fees
and d) will include the right to grant sublicenses on the same terms;
provided, that, such sublicense 1) is granted without payment of
royalties, other fees or profit and 2) prohibits the sublicensee from granting
sublicenses.

(ii) Grant of Non-Exclusive License to
Isis. With respect to each patent (including (A)
any patent application, divisional, continuation, continuation-in-part,
substitute, renewal, reexamination, extension or reissue in respect of such
patent or (B) any intellectual property rights claimed in respect of such
patent) claiming Patentable Project HD Intellectual Property that Isis has
disclaimed its interest pursuant to Section 9(e) of this Agreement (the
“Isis Disclaimed Intellectual Property“), the
Foundation hereby grants Isis a fully paid-up, royalty-free, irrevocable,
perpetual, worldwide non-exclusive license, with the limited right to sublicense
as set forth in this Section 10(f)(ii), under such Isis Disclaimed
Intellectual Property for Research and Development, including a license to (1)
make, have made, use, have used, import and have imported any product covered by
such Isis Disclaimed Intellectual Property, (2) practice and have practiced any
method or process covered by such Isis Disclaimed Intellectual Property and (3)
use and have used the Confidential Information relating to such Isis Disclaimed
Intellectual Property, in each case solely for Research and Development. The
foregoing license a) will be for Research and Development only, b) will not
include any right to manufacture or distribute for sale or sell, c) will not be
subject to royalties or other fees and d) will include the right to grant
sublicenses on the same terms; provided, that, such sublicense 1) is
granted without payment of royalties, other fees or profit and 2) prohibits the
sublicensee from granting sublicenses.

(g) Grant of Non-Exclusive Licenses Under Isis
Background Intellectual Property in Connection with Commercial
Licenses. Subject to the disclosure set forth on
Schedule 16(b)(iv)(B) – 2, Isis will grant to each Third Party or
Affiliate of a Party that is a party to a Commercial License, in sole
consideration for the amounts paid by such Third Party or Affiliate under such
Commercial License, a worldwide non-exclusive license (with the right to grant
sublicenses to any Affiliate or Third Party collaborator of such licensee, but
without the right to grant further sublicenses) under any Isis Background
Intellectual Property Controlled by Isis (including (A) any patent application,
divisional, continuation, continuation-in-part, substitute, renewal,
reexamination, extension or reissue in respect of any applicable patent within
such Isis Background Intellectual Property Controlled by Isis or (B) any
intellectual property rights claimed in respect of any applicable patent within
such Isis Background Intellectual Property Controlled by Isis), to the extent
necessary to enable such Third Party or Affiliate to exploit the Project HD
Intellectual Property in accordance with the terms of such Commercial License
and the terms of this Agreement. Any license granted by Isis to a Third Party or
Affiliate of a Party pursuant to this Section 10(g) shall terminate only
in accordance with the terms and conditions of the Commercial

License granted to such Third Party or Affiliate. For the avoidance of doubt,
any license to Isis Background Intellectual Property Controlled by Isis granted
under this Section 10(g) will in no event entitle a licensee under a
Commercial License to use such Isis Background Intellectual Property to
research, develop or otherwise use or make any compound other than the Project
Compound(s) subject to such Commercial License.

11. Non-Assert
Covenants.

(a) Mutual Non-Assert Regarding
Validity. Each Party will not, and will not permit
its Affiliates to, challenge, nor assist others in challenging, and will
undertake to ensure, by contract or otherwise, that its licensees and assignees
of any Project Intellectual Property will not challenge nor assist others in
challenging, the validity of any Project Intellectual Property (including any
Project Intellectual Property that is disclaimed by a Party); provided,
however, that each Party (and its Affiliates, licensees and assignees) has
the right to comply with applicable laws, including subpoenas in connection with
a challenge by a Third Party to Project Intellectual Property.

(b) Isis Non-Assert Regarding
Infringement. Isis will not, and will not permit
its Affiliates to, bring any action or assist others in bringing any action, and
undertakes to ensure, by contract or otherwise, that its licensees and assignees
of any Project Intellectual Property (including any Isis Disclaimed Intellectual
Property) will not bring any action or assist others in bringing any action,
against the Foundation or the Foundation153s licensees or assignees of any Project
HD Intellectual Property (including any Foundation Collaborator) on the ground
that the practice or use, as the case may be, of any Project HD Intellectual
Property for HD Research and Development infringes or misappropriates the
proprietary rights of Isis or Isis153 licensees or assignees of any Project
Intellectual Property; provided, however, that Isis (and its
Affiliates, licensees and assignees) has the right to comply with applicable
laws, including subpoenas in connection with a challenge by a Third Party to
Project HD Intellectual Property.

(c) Foundation Non-Assert Regarding
Infringement. The Foundation will not, and will
not permit its Affiliates to, bring any action or assist others in bringing any
action, and undertakes to ensure, by contract or otherwise, that its licensees
and assignees of any Project HD Intellectual Property (including any Foundation
Disclaimed Intellectual Property) will not bring any action or assist others in
bringing any action, against Isis or Isis153 licensees or assignees of any Project
Intellectual Property on the ground that the practice or use, as the case may
be, of any Project Intellectual Property outside the HD Field of Use infringes
or misappropriates the proprietary rights of the Foundation or the Foundation153s
licensees or assignees of any Project HD Intellectual Property; provided,
however, that the Foundation (and its Affiliates, licensees and assignees)
has the right to comply with applicable laws, including subpoenas in connection
with a challenge by a Third Party to Project Intellectual Property.

12. Grant of Non-Exclusive License to the
Foundation Under Isis Background Intellectual
Property. Subject to the disclosure set forth on
Schedule 16(b)(iv)(B) – 2, Isis hereby grants to the Foundation a fully
paid-up, royalty-free, worldwide non-exclusive license (with the right to grant
sublicenses to a Third Party designated by the Foundation, including a
Foundation Collaborator) under the Isis Background Intellectual Property
Controlled by Isis (including (A) any patent application, divisional,
continuation, continuation-in-part, substitute, renewal, reexamination,
extension or reissue in respect of any applicable patent within such Isis
Background Intellectual Property Controlled by Isis, or (B) any intellectual
property rights claimed in respect of any applicable patent within such Isis
Background Intellectual Property Controlled by Isis), to the extent necessary to
enable the Foundation and/or such Third Party (including Foundation
Collaborators) to use the Project Results, any Project Deliverables, any Project
HD Intellectual Property and any Project Compound solely for HD Research and
Development. The license rights granted by Isis under this Section 12
will be subject to termination by Isis in the event of the Foundation153s material
breach of this Agreement if such material breach is not cured within 45 days
following receipt by Isis of notice of such material breach. For the avoidance
of doubt, any license to Isis Background Intellectual Property Controlled by
Isis granted under this Section 12 will in no event entitle a licensee to
use such Isis Background Intellectual Property to research, develop or otherwise
use or make any compound other than the Project Compound(s).

13. Revenue
Sharing.

(a) Agreement to Share
Revenue. All revenue (i) received by either of the
Parties from a Third Party or an Affiliate of either Party in connection with
the grant of any Commercial License (including a Commercial License pursuant to
which Isis or an Affiliate of Isis is the Licensee) of any Project HD
Intellectual Property (other than Project HD Intellectual Property which has
been disclaimed by one of the Parties pursuant to Section 9(e) of this
Agreement) to a Third Party or an Affiliate of either Party or (ii) received by
Isis from a Third Party or any of Isis153 Affiliates in connection with the
exploitation of any Reverted Project HD Intellectual Property (including in
connection with any sale, transfer, license or other disposition of any such
Reverted Project HD Intellectual Property or the sale of any product or service
covered by any such Reverted Project HD Intellectual Property to a Third Party
or an Affiliate of Isis) ((i) and (ii) immediately above collectively referred
to herein as “Revenue“) will be distributed as
follows:

(i) First, to the Parties pro rata based upon the
amount of Patent Expenses paid by each Party out of the total amount Patent
Expenses paid by both of the Parties until the aggregate amount of Patent
Expenses paid by each of the Parties has been received by each such Party.

(ii) Second, to the Foundation and Isis equally until an
amount equal to the sum of the following amounts has been received by the
Foundation:

(A) an amount equal to US$[***] (such amount representing
the aggregate payments made by the Foundation to Isis and Affiliates of Isis
under the 2007 Research Agreement) plus

(B) the aggregate amount of payments made by the Foundation
to Isis under that certain Letter Agreement, dated as of [***], between Isis and
the Foundation related to [***] (as amended from time to time) plus

(C) the aggregate amount of payments made by the Foundation
to Isis and Affiliates of Isis under this Agreement (as amended from time to
time), including all amounts paid by the Foundation to Isis to reimburse Isis
for Isis Provided Reimbursable Materials Costs and Specialized Licenses or
Services Costs plus

(D) the aggregate of the amounts set forth on Schedule
13(a)(ii)(D) attached hereto (each such amount representing a prior
payment(s) made by the Foundation to a Third Party or Affiliate of Isis for the
development of the Project HD Intellectual Property as a therapeutic product for
Huntington153s disease patients) plus

(E) the aggregate amount of payments made by the Foundation
to Third Parties and Affiliates of Isis for research and development activities
related to developing the Project HD Intellectual Property as a therapeutic
product for Huntington153s disease patients that (1) are set forth on Schedule
13(a)(ii)(E) attached hereto or (2) have been approved by the Steering
Committee (any such agreement to be set forth in the applicable
mutually-approved Steering Committee meeting minutes) plus

(F) [***].

(iii) Thereafter, 100% of all Revenue to Isis.

(b) Amounts not Subject to Revenue
Sharing.

(i) Revenue Sharing only Applicable to Amounts
Received by either Party in Connection with Commercial License Granted to Third
Parties and Affiliates. For the avoidance of
doubt, the Parties agree that this Section 13 will only apply to Revenue
received by either of the Parties.

(ii) No Revenue Sharing for Amounts Received by
Isis in Connection with Research and Development of the Project HD Intellectual
Property. For the avoidance of doubt, the Parties
agree that this Section 13 will only apply to Revenue and will not apply
to any amounts received by Isis so

long as any such amounts are paid (x) solely to reimburse Isis for the actual
internal costs and expenses incurred by Isis from the use of Project HD
Intellectual Property for Research and Development conducted internally by Isis
or (y) for the use or other exploitation (including the grant of any license for
any purpose) of any Project HD Intellectual Property outside the HD Field of
Use.

(c) Relation to Revenue Sharing under the 2007
Research Agreement. Isis and the Foundation agree
that this Section 13 supersedes and replaces in its entirety Section 11
of the 2007 Research Agreement.

Confidentiality; Trademarks

14. Certain Information Deemed Confidential
Information; Certain Information Specifically Excepted from Being Deemed
Confidential Information; Permitted Uses of Confidential Information;
Confidentiality and Non-Use; Use by Representatives; Exceptions to
Confidentiality and Non-Use.

(a) Certain Information Deemed Confidential
Information; Certain Information Specifically Excepted from Being Deemed
Confidential Information.

(i) Certain Information Deemed Confidential
Information.

(A) Certain Information Deemed Confidential
Information of Isis. The Foundation agrees that
all Isis Background Intellectual Property will be deemed Confidential
Information of Isis (the foregoing, together with any additional information
disclosed by Isis in accordance with clause (i) of the first sentence of
Section 1(p) of this Agreement (except to the extent that any such
information constitutes Project Intellectual Property or Project Results), the
“Isis Confidential Information“).

(B) Certain Information Deemed Confidential
Information of the Foundation. Isis agrees that
all Foundation Provided Material Information and Foundation Background
Intellectual Property will be deemed Confidential Information of the Foundation
(the foregoing, together with such additional information disclosed by the
Foundation in accordance with clause (i) of the first sentence of Section
1(p) of this Agreement (except to the extent that any such information
constitutes Project Intellectual Property or Project Results), the
“Foundation Confidential Information“).

(C) Certain Information Deemed Confidential
Information of both Parties. The Parties agree
that (1) the terms and conditions of this Agreement (including all appendices,
supplements or exhibits attached to this Agreement) and all Project Intellectual
Property

and Project Results (including all Project Results set forth in the Project
Reports) will be deemed Confidential Information of both Parties
(“Joint Confidential Information“) and (2) each Party
will be deemed both a “Disclosing Party” and a “Receiving Party” of all Joint
Confidential Information. The Parties further agree to treat all Joint
Confidential Information as Confidential Information of each of the Parties in
accordance with the terms of this Section 14. Notwithstanding the
foregoing, the Parties agree after the sixth anniversary of the Original
Effective Date (the “Disclosure Date“) the Project
Results shall no longer be deemed Confidential Information and may be disclosed
by either Party to any Affiliate or Third Party without restriction unless prior
to the Disclosure Date Isis notifies the Foundation that there exists good
reasons for such disclosure to be withheld for an additional six-month period,
in which case the Disclosure Date will be extended for an additional six months
and the provisions of this Section 14(a)(i)(C) will apply to such new
Disclosure Date.

(ii) Certain Information Specifically Excepted
from Being Deemed Confidential Information. For
the avoidance of any doubt, the Parties acknowledge and agree that any
information deemed to be Confidential Information pursuant to Section
14(a)(i) of this Agreement will not constitute Confidential Information
under this Agreement if such information constitutes information which is
specifically excepted from being Confidential Information in accordance with
Section 1(p) of this Agreement; provided, however, the Parties
acknowledge and agree that no Joint Confidential Information will be
specifically excepted from being Confidential Information pursuant to clause (1)
of the last sentence of Section 1(p) of this Agreement.

(b) Permitted Uses of Confidential
Information.

(i) Permitted Uses of Joint Confidential
Information.

(A) Permitted Uses of Joint Confidential
Information by Isis. The Foundation agrees that
Isis may (1) use, or have used, the Joint Confidential Information for all uses
and purposes to the extent necessary or useful to enable Isis to perform its
obligations or exercise its rights under this Agreement and (2) subject to
Section 14(c) of this Agreement, disclose the Joint Confidential
Information to Third Parties and Affiliates of Isis.

(B) Permitted Uses of Joint Confidential
Information by the Foundation. Isis agrees that
the Foundation may (1) use, or have used, the Joint Confidential Information for
all uses and purposes to the extent necessary or useful to enable Isis to
perform its

obligations or exercise its rights under this Agreement and (2) subject to
Section 14(c) of this Agreement, disclose the Joint Confidential
Information to Third Parties and Affiliates of the Foundation.

(ii) Permitted Uses of Foundation Confidential
Information by Isis. Isis agrees that the
Foundation Confidential Information may only (A) be used by Isis to the extent
necessary or useful to enable Isis to perform its obligations or exercise its
rights under this Agreement and (B) be disclosed in accordance with, and to only
those Third Parties and Affiliates expressly permitted by, Section 14(c)
of this Agreement.

(iii) Permitted Uses of Isis Confidential
Information by the Foundation. The Foundation
agrees that Isis Confidential Information may only (A) be used by the Foundation
to the extent necessary or useful to enable the Foundation to perform its
obligations or exercise its rights under this Agreement and (B) be disclosed in
accordance with, and to only those Third Parties and Affiliates expressly
permitted by, Section 14(c) of this Agreement.

(c) Confidentiality and Non-Use; Use by
Representatives.

(i) Confidentiality and
Non-Use. Each Receiving Party will treat the
Confidential Information of the Disclosing Party in the same manner, and with
the same level of care (but, in no event, with less than a reasonable level of
care), as the Receiving Party would treat its own confidential or proprietary
information. Without limiting the generality of the foregoing, and except to the
extent expressly permitted by this Agreement (including pursuant to Section
14(b) of this Agreement), no Receiving Party will, without the prior written
consent of the Disclosing Party, (A) disclose, reveal, report, publish or give
the Confidential Information of the Disclosing Party to any Third Party or
Affiliate or (B) use the Confidential Information of the Disclosing Party for
any purpose.

(ii) Use by
Representatives. Except as expressly permitted by
this Agreement, each Receiving Party will limit disclosure of the Disclosing
Party153s Confidential Information to (A) those of its Affiliates, directors,
officers, employees, representatives, consultants, agents, service providers and
advisors (including scientific advisors, legal counsel, etc.) (B) in the case of
Isis only, any Third Party collaborator of Isis and (C) in the case of the
Foundation only, the Foundation Collaborators (collectively,
“representatives“) who (1) have a need to know such
Confidential Information to enable such Receiving Party to perform its
obligations or exercise its rights under this Agreement, (2) have similar, but
no less burdensome, obligations of confidentiality and non-use to those
contained in this Agreement and (3) have been advised of the confidential and

proprietary nature of such Confidential Information and of their obligations
with respect to such Confidential Information. Each Receiving Party will (x)
direct its representatives not to disclose the Confidential Information of the
Disclosing Party to any person or entity, except as expressly permitted under
this Agreement and (y) be responsible for any breach by its representatives of
the obligations under this Agreement relating to Confidential Information of the
Disclosing Party.

(d) Exceptions to Confidentiality and
Non-Use. Each Receiving Party may, without the
prior written authorization of the Disclosing Party, disclose the Confidential
Information of the Disclosing Party to the limited extent it is required to
pursuant to any applicable federal, state, local, or international law, or any
judicial or government request, requirement or order; provided, that, such
Receiving Party provides the Disclosing Party with sufficient prior notice, and
cooperates with the Disclosing Party (at such Disclosing Party153s cost and
expense), to allow the Disclosing Party to contest such request, requirement or
order. In addition, each Party may disclose (i) the existence of this Agreement;
(ii) a general summary of the Research being provided under this Agreement;
(iii) the aggregate dollar amount of fees to be paid by the Foundation under
this Agreement; and (iv) any specific terms of this Agreement that are a matter
of public record except by breach of this Agreement; provided, that, if Isis
determines that applicable securities laws or regulations require it to disclose
additional information about this Agreement or its terms or conditions, Isis
will notify the Foundation in writing of such disclosure requirement and will
cooperate with the Foundation in requesting confidential treatment of any
provision of this Agreement as reasonably requested by the Foundation.

(e) [***] Collaboration. The
Foundation has entered into a collaboration with [***] and [***] related to the
development of therapeutics to treat Huntington153s disease (the
“[***] Project“). Notwithstanding any provision to the
contrary in this Agreement, the Foundation will not (i) disclose, reveal or give
any Isis Confidential Information or Joint Confidential Information to [***] or
[***] or (ii) provide any Project Compounds to [***] or [***], in each case for
use in connection with the [***] Project. The Foundation will not (A) disclose,
reveal or give any confidential information of any of the parties to the [***]
Project to Isis or (B) provide any compounds resulting from the [***] Project to
Isis or any of its Affiliates, in each case for use in connection with this
Project. The Parties will implement reasonable safeguards, processes and
procedures necessary to abide by the obligations in this Section 14(e).

15. Use of
Trademarks. No Party will use the name,
trademarks, logos, physical likeness or other symbol of the other Party (or
their employees) for any marketing, advertising, public relations or other
purposes without the prior written authorization of the other Party, except that
either Party may (a) make reference to the Foundation153s funding of the Research
and (b) use the other Party153s name in any disclosure permitted pursuant to
Section 14(d) of this Agreement; provided, that, in each case
the relationship of the Parties is accurately and appropriately described.

Covenants; Representations and Warranties

16. Covenants; Representations and
Warranties.

(a) Covenants.
Isis agrees to each of the following:

(i) Conduct of the Research; Compliance with
Law. Isis will perform the Research using
generally accepted industry standards and practices and in compliance with all
applicable federal, state, local, international, health authority and
institutional laws, rules, regulations, orders and guidelines.

(ii) Audit; Access.
At reasonably convenient times and dates and upon reasonable prior notice (in
all cases at least 10 business days), (A) the Foundation and its representatives
will have the right to audit Isis153 compliance with this Agreement and (B) Isis
will provide the Foundation and its representatives with reasonable access to
the facilities used in the performance of the Research, data and personnel in
order to enable the Foundation to assess the status and progress of the Research
being performed by Isis.

(iii) Research
Team. The Research will only be performed by
individuals who have assigned to Isis any ownership or other rights they may
acquire in any (A) Project Results produced or (B) Project Intellectual Property
conceived, discovered, invented, made or first reduced to practice, in each case
in the course of the performance of the Research under this Agreement, so that
Isis may perform its obligations and convey the rights granted by it under this
Agreement. Isis will not permit any individual to perform any Research or
review, or have access to, any Project Results, prior to such individual153s
execution and delivery of the invention assignments required by this Section
16(a)(iii). Isis will cause any such individual to assign any such (1)
Project Results produced or (2) Project Intellectual Property conceived,
discovered, invented, made or reduced to practice, in each case in the course of
the performance of the Research under this Agreement to Isis.

(iv) Consents, Licenses, Permits and
Approvals. Isis will obtain all consents, permits
and other approvals necessary for Isis to perform its obligations and convey the
rights granted by it under this Agreement.

(v) Conflicting
Obligations. Isis will not enter into, any
agreement, contract, license or other arrangement that conflicts with Isis153
discharge of its obligations under this Agreement or the Foundation153s exercise
of its rights under this Agreement.

(vi) Third Party and Affiliate Intellectual
Property. Except for the Isis Background
Intellectual Property set forth on Schedule 16(a)(vi), without the prior
written consent of the Foundation, Isis will not use or practice any (A)
Intellectual Property (1) that is known by Isis to be owned by a Third Party or
one of Isis153 Affiliates or (2) which is owned by, or licensed to, Isis (or
otherwise subject to restrictions on use known to Isis), (B) Acquirer
Intellectual Property of any Acquirer of Isis, (C) Isis/[***] Collaboration
Intellectual Property or (D) Regulus Intellectual Property, in the performance
of the Research, if the use or practice of any such Intellectual Property would
be necessary to enable a) licensee under a Commercial License to practice any
Project HD Intellectual Property to the extent necessary for such licensee to
commercialize one or more Project Compounds under a Commercial License in
accordance with the terms of this Agreement or b) the Foundation and the
Foundation Collaborators to use any Project Results, Project Deliverables or
Project HD Intellectual Property solely for HD Research and Development,
unless (1) Isis Controls, and at all times retains Control of, such
Intellectual Property, (2) except as set forth on Schedule 16(b)(iv)(B) –
2, Isis does not have to obtain the consent of any Third Party or Affiliate
or pay any compensation to any Third Party or Affiliate to license or sublicense
such Intellectual Property and (3) grants a license or sublicense, as the case
may be, in respect of any such Intellectual Property to (a) a licensee under a
Commercial License to the extent necessary for such licensee to commercialize
one or more Project Compounds under such Commercial License in accordance with
the terms of this Agreement, including under Section 10(g) of this
Agreement and (b) the Foundation (with the right to grant sublicenses to the
Foundation Collaborators), pursuant to the terms and conditions of this
Agreement, including Section 12 of this Agreement, to use any Project
Results, Project Deliverables or Project HD Intellectual Property solely for HD
Research and Development.

(vii) Further
Assurances. Isis will, at the Foundation153s
expense, (A) execute such further documents, instruments, licenses and
assurances and (B) take such further actions, in each case as the Foundation may
reasonably request from time to time to better enable the Foundation to exercise
its rights under this Agreement; provided, that, such further
documents, instruments, licenses, assurances and actions will not materially
change either Party153s rights or obligations under this Agreement.

(viii) No
Debarment. Isis will not use a Debarred Individual
(as defined below) or Debarred Entity (as defined below) to perform any
activities or render any assistance on Isis153 behalf relating to activities
performed pursuant to this Agreement. A “Debarred
Entity” is a corporation, partnership or association that has been
debarred by the FDA pursuant to 21 U.S.C. §335a (a) or (b) from submitting or
assisting in the submission of any drug

product application, or a member, subsidiary or Affiliate of a Debarred
Entity; and a “Debarred Individual” is an individual
who has been debarred by the FDA pursuant to 21 U.S.C. §335a (a) or (b) from
providing services in any capacity to a person that has an approved or pending
drug product application.

(b) Representations and
Warranties. Isis hereby represents and warrants to
each of the following as of the Effective Date:

(i) No Debarment.
Isis represents and warrants that it has never been, and is not currently, a
Debarred Entity.

(ii) Consents, Licenses, Permits and
Approvals. Isis has obtained all consents,
licenses, permits and other approvals necessary for Isis to enter into this
Agreement.

(iii) Conflicting
Obligations. Neither the execution and delivery of
this Agreement by Isis nor the discharge by Isis of its obligations under this
Agreement will conflict with, result in a breach of, constitute a default under,
require any notice under or create in any Third Party the right to terminate,
modify or cancel any agreement, contract, instrument, license or other
arrangement to which Isis is or becomes a party or by which it is or becomes
bound. Isis has not entered into any agreement, contract, license or other
arrangement that conflicts with Isis153 discharge of its obligations under this
Agreement or the Foundation153s exercise of its rights under this Agreement.

(iv) Intellectual
Property.

(A) General Intellectual
Property. To the knowledge of Isis, Isis owns or
has the right to use pursuant to a valid and enforceable, written license,
sublicense, agreement or other permission, all Intellectual Property necessary
to perform the Research. To the knowledge of Isis, except as specifically
disclosed in that certain letter dated as of the Original Effective Date from
Grantland E. Bryce, Vice President, Corporate Development & Legal Counsel to
Robi Blumenstein, Isis153 performance of the Research will not interfere with,
infringe upon, violate or misappropriate any Intellectual Property rights of any
Third Party or Affiliate of Isis.

(B) Isis Background Intellectual
Property. Schedule 16(b)(iv)(B) – 1 sets
forth a complete and accurate list of all Isis Background Intellectual Property
that is not Controlled by Isis that would be necessary to enable (1) a Third
Party licensee under a Commercial License to practice any Project HD
Intellectual Property to the extent necessary for such Third Party to
commercialize one or

more Project Compounds under a Commercial License in accordance with the
terms of this Agreement and (2) the Foundation and the Foundation Collaborators
to use the Project Results, any Project Deliverables and Project HD Intellectual
Property solely for HD Research and Development. Except as set forth on
Schedule 16(b)(iv)(B) – 2, Isis has the right to grant the licenses and
sublicenses contemplated by this Agreement to the Isis Background Intellectual
Property Controlled by Isis without obtaining the consent of any Third Party or
Affiliate and without the payment of any compensation to any Third Party or
Affiliate.

(C) Certain Third Party and Affiliate
Intellectual Property. During the period beginning
on the Original Effective Date and ending on the Effective Date, Isis did not
use or practice any (A) Intellectual Property (1) that was known by Isis to be
owned by a Third Party or one of Isis153 Affiliates or (2) which was owned by, or
licensed to, Isis (or otherwise subject to restrictions on use known to Isis),
(B) Acquirer Intellectual Property of any Acquirer of Isis, (C) Isis/[***]
Collaboration Intellectual Property or (D) Regulus Intellectual Property, in the
conduct of the 2007 Research Agreement Project, that would be necessary to be
used or practiced to enable a) licensee under a Commercial License to practice
any Project HD Intellectual Property to the extent necessary for such licensee
to commercialize one or more Project Compounds under a Commercial License in
accordance with the terms of this Agreement or b) the Foundation and the
Foundation Collaborators to use any Project Results, Project Deliverables or
Project HD Intellectual Property solely for HD Research and Development,
other than any such Intellectual Property that Isis (1) Controls, and
at all times retains Control of, such Intellectual Property and (2) grants a
license or sublicense, as the case may be in respect of any such Intellectual
Property to (a) a licensee under a Commercial License to the extent necessary
for such licensee to commercialize one or more Project Compounds under such
Commercial License in accordance with the terms of this Agreement, including
under Section 10(g) of this Agreement and (b) the Foundation (with the
right to grant sublicenses to the Foundation Collaborators), pursuant to the
terms and conditions of this Agreement, including Section 12 of this
Agreement, to use any Project Results, Project Deliverables or Project HD
Intellectual Property solely for HD Research and Development.

Term; Termination; Effect of Termination

17. Term; Termination of Certain Sections by the
Foundation; Termination of Certain Sections by Isis; Termination of Specified
Sections; Survival of Remaining Sections; Effect of Termination of Certain
Sections.

(a) Term. The term
(the “Term“) of this Agreement will commence on the
Effective Date and will, unless earlier terminated in accordance with the terms
hereof or by the mutual written agreement of the Parties, continue in effect
until the date that is 30 days after the date on which all activities that have
been approved by the Steering Committee to be conducted as part of the Project
(as evidenced by such activities being set forth in the Detailed Project
Description most recently approved by the Steering Committee) have been
completed.

(b) Termination of Certain Sections by the
Foundation.

(i) Termination with
Notice. The Foundation may elect for any reason to
immediately terminate all of the sections specified in Section 17(d)(i)
of this Agreement and discontinue Isis153 performance of the Research by giving 60
days prior written notice to such effect to Isis.

(ii) Termination Upon the Occurrence of Certain
Events. The Foundation may, by giving notice to
Isis, elect to terminate each of the sections specified in Section
17(d)(i) of this Agreement and discontinue Isis153 performance of the Research
upon the occurrence of any of the following events:

(A) Breach of this
Agreement. If Isis (1) materially breaches any
representation, warranty or covenant given by it under this Agreement or (2)
materially defaults in the performance of its obligations under this Agreement
and such breach or default is not remedied within 45 days of the receipt by Isis
of notice of such breach or default from the Foundation.

(B) Change of Circumstances Notice.
Isis delivers a Change of Circumstances Notice to the Foundation pursuant to
Section 3(b)(i) of this Agreement.

(C) Post-Original Effective Date Knowledge
Notice. If Isis delivers a Post-Original Effective
Date Knowledge Notice to the Foundation pursuant to Section 3(b)(ii) of
this Agreement.

(D) Bankruptcy
Event. If Isis is the subject of a Bankruptcy
Event.

(c) Termination of Certain Sections by
Isis. Isis may, by giving notice to the
Foundation, elect to terminate each of the sections specified in Section
17(d)(i) of this Agreement and discontinue Isis153 performance of the Research
upon the occurrence of any of the following events:

(i) Breach of this
Agreement. If the Foundation (A) materially
breaches any representation, warranty or covenant given by it under this
Agreement or (B) materially defaults in the performance of any of its
obligations under this Agreement and such breach or default is not remedied
within 45 days of the receipt by the Foundation of notice of such breach or
default from Isis.

(ii) Bankruptcy
Event. If the Foundation is the subject of a
Bankruptcy Event.

(d) Termination of Specified Sections; Survival
of Remaining Sections; Effect of Termination of Certain
Sections.

(i) Termination of Specified Sections; Survival
of Remaining Sections. Immediately upon the
earlier to occur of either (A) the expiration of the Term, (B) the mutual
agreement of the Parties to terminate this Agreement, (C) an election by the
Foundation pursuant to Section 17(b) of this Agreement or (D) an election
by Isis pursuant to Section 17(c) of this Agreement, then subject to
Section 17(d)(ii) of this Agreement, each of Section 2,
Section 3(a), Section 3(b), Section 4(a), Section
4(b), Section 4(c)(iii), Section 5(a), Section 5(b),
Section 6(a) and Section 6(b) will a) immediately terminate and b)
subject to Section 17(d)(ii) of this Agreement, have no further force or
effect. The Parties acknowledge and agree that in the event of the termination
of the sections specified in this Section 17(d)(i), all other sections of
this Agreement will survive indefinitely and remain in full force and effect.

(ii) Effect of Termination of Certain
Sections.

(A) Delivery of Final Project Reports, Provided
Research Materials, Project Deliverables and Project
Results. Upon the termination of the sections
specified in Section 17(d)(i) of this Agreement, Isis will deliver to the
Foundation each of the following: (1) in accordance with Section 5(e) of
this Agreement, a Final Project Report for the Project for the period beginning
on the Effective Date through the date of such termination, (2) in accordance
with Section 5(e) of this Agreement, a final FTE Report for the period
beginning on the end date of the period covered by the last FTE Report delivered
through the date of such termination, (3) in accordance with Section 4(c)
of this Agreement, all unused Provided Research Materials and (4) in accordance
with Section 7(b) and Section 8(b), respectively, of this
Agreement, all Project Results and Project Deliverables produced by Isis but not
yet delivered to the Foundation through the date of such termination.

(B) Foundation153s Payment Obligation Upon
Termination. The Parties acknowledge and agree
that, upon the termination of the sections specified in Section 17(d)(i)
of this Agreement, the Foundation will, subject to Section 6 of this
Agreement, make a payment (to the extent such payment is not in dispute) (1) in
respect of the Research FTEs performing the Research through the effective date
of the termination of the sections specified in Section 17(d)(i) of this
Agreement (such payment to be calculated in accordance with Section 6 of
this Agreement) and (2) to reimburse Isis for any Isis Provided Reimbursable
Materials Costs and Specialized Licenses or Services Costs incurred by Isis in
accordance with, and subject to, Section 4(b) and Section 4(d) of
this Agreement, respectively, unless the obligations of Isis to procure Isis
Provided Reimbursable Materials and Specialized Third Party Licenses and
Services related to such costs may be cancelled by Isis in which case the
Foundation will only reimburse Isis for the contractual cancellation fees
associated with the cancellation of such obligations. Isis agrees that a) the
invoice submitted by Isis in respect of the final Quarterly Research Payment
shall credit the Advance Research Payment Amount against such final Quarterly
Research Payment and b) if the amount of final Quarterly Research Payment is
less than the Advance Research Payment Amount, Isis shall promptly make a
payment to the Foundation in an amount equal to the amount by which the Advance
Research Payment Amount exceeded the amount of the final Quarterly Research
Payment.

(C) Facilitation of Continued
Research. Upon the termination of the sections
specified in Section 17(d)(i) of this Agreement, if requested by the
Foundation, Isis and the Foundation will, in good faith, discuss the use of
reasonable efforts to facilitate the continuance of the Project elsewhere.

(D) Liabilities and Obligations Accrued Prior to
Termination. The Parties acknowledge and agree
that the termination of the sections specified in Section 17(d)(i) of
this Agreement will not (1) relieve any Party then in breach of this Agreement
for any liabilities to the other Party in respect of any breach under this
Agreement or (2) relieve either Party from any of the obligations such Party may
have under this Agreement to the extent such obligations accrued prior to the
date of such termination or (3) relieve either Party from any of the obligations
such Party may have under any of the sections of this Agreement that expressly
survive any such termination.

Miscellaneous

18. Independent
Contractor. Isis is acting as an independent
contractor and not an agent, joint venturer or partner of the Foundation.
Nothing in this Agreement will create, evidence or imply any agency, partnership
or joint venture between the Parties. Neither Party will act or describe itself
as the agent of the other Party nor will it represent that it has any authority
to make commitments on the other Party153s behalf.

19. Notices. Any
notice required or permitted to be given by this Agreement will be in writing
and will be delivered by personal delivery, US mail with postage prepaid and
return receipt requested, facsimile (provided the sender has evidence of
successful transmission) or next-day courier service. Any notice so delivered
will be deemed to be given, delivered and received, if delivered by personal
delivery or if delivered by US mail, on the day received as indicated by the
postal receipt and if delivered by facsimile or courier service, on the day
following dispatch. All such notices are to be given or made at the following
addresses (or to such other address as may be designated by a notice given in
accordance with the provisions of this Section 19):

If to the Foundation to:

CHDI Foundation, Inc.

c/o CHDI Management, Inc.

350 Seventh Avenue, Suite 601

New York, NY 10001

Attention: Ruth Basu, Chief Administrative Officer

Fax: 212-239-2101

With a copy to:

CHDI Foundation, Inc.

c/o CHDI Management, Inc.

350 Seventh Avenue, Suite 601

New York, NY 10001

Attention: David P. Rankin, Chief Legal Officer

Fax: 212-239-2101

If to Isis prior to August 22, 2011, to:

Isis Pharmaceuticals, Inc.

1896 Rutherford Road

Carlsbad, CA 92008

Attention: C. Frank Bennett, Ph.D.

Fax: 760-603-4650

With copies to:

Isis Pharmaceuticals, Inc.

1896 Rutherford Road

Carlsbad, CA 92008

Attention: Chief Operating Officer & Chief Financial Officer

Fax: 760-918-3592

and

Isis Pharmaceuticals, Inc.

1896 Rutherford Road

Carlsbad, CA 92008

Attention: Vice President, Legal & General Counsel

Fax: 760-268-4922

If to Isis on or after August 22, 2011, to:

Isis Pharmaceuticals, Inc.

2855 Gazelle Court

Carlsbad, CA 92010

Attention: C. Frank Bennett, Ph.D.

Fax: 760-603-4650

With copies to:

Isis Pharmaceuticals, Inc.

2855 Gazelle Court

Carlsbad, CA 92010

Attention: Chief Operating Officer & Chief Financial Officer

Fax: 760-918-3592

and

Isis Pharmaceuticals, Inc.

2855 Gazelle Court

Carlsbad, CA 92010

Attention: Vice President, Legal & General Counsel

Fax: 760-268-4922

20. Indemnity; Limitation on
Damages.

(a) Indemnification by the
Foundation. The Foundation will defend and
indemnify Isis, its Affiliates and their respective directors, officers,
employees, representatives, consultants, agents and service providers
(collectively, the “Isis Indemnified Parties“),
against any and all costs, damages, expenses (including reasonable legal fees)
and losses suffered by any Isis Indemnified Party in

connection with any Third Party action, assessment, claim, demand, proceeding
or suit to the extent arising or resulting from (i) the Foundation153s negligence
or willful misconduct; (ii) the Foundation153s breach of this Agreement; (iii)
Isis153 use, or alleged use, in the performance of the Research of any Foundation
Provided Materials or Foundation Provided Material Information provided by the
Foundation to Isis for the purpose of performing the Research; or (iv) the
storage, distribution or use of a Project Compound by the Foundation or any
Foundation Collaborator (but in each case only to the extent such claim does not
result from, or arise out of, an action for which Isis is obligated to indemnify
the Foundation pursuant to Section 20(b) of this Agreement). For clarity,
the Parties agree that the parenthetical clause in the immediately preceding
sentence is not intended to obviate or otherwise limit the possibility that both
Isis and the Foundation may be determined to be joint tort-feasors and,
therefore, share liability.

(b) Indemnification by
Isis. Isis will defend and indemnify the
Foundation and its Affiliates, members, directors, officers, employees,
representatives, consultants, agents and service providers (collectively, the
“Foundation Indemnified Parties“), against any and all
costs, damages, expenses (including reasonable legal fees) and losses suffered
by any Foundation Indemnified Party in connection with any Third Party action,
assessment, claim, demand, proceeding or suit to the extent arising or resulting
from (i) Isis153 negligence or willful misconduct; (ii) Isis153 breach of this
Agreement; (iii) the storage, distribution or use of a Project Compound by Isis
or any collaborator of Isis (other than the Foundation) or (iv) the activities
of Isis in the course of Isis153 performance of the Research, including activities
which infringe upon, violate or misappropriate, or are alleged to infringe upon,
violate or misappropriate, the Intellectual Property rights of a Third Party
(but (A) excluding all activities that infringe upon, violate or misappropriate,
or are alleged to infringe upon, violate or misappropriate, the Intellectual
Property rights of a Third Party if (1) in accordance with Section
16(a)(vi) of this Agreement, the Foundation consented to the use or
practice, as the case may be, of such Third Party Intellectual Property by Isis
in the conduct of such activities or (2) in accordance with Section
3(b)(ii) of this Agreement, Isis notified the Foundation with respect to the
to the use or practice, as the case may be, of such Third Party Intellectual
Property by Isis in the conduct of such activities and the Foundation did not
exercise, within 90 days of the Foundation153s receipt of Isis153 notice, its right
to terminate the applicable Project(s) or this Agreement and (B) only to the
extent such claim does not result from, or arise out of, an action for which the
Foundation is obligated to indemnify Isis pursuant to Section 20(a) of
this Agreement). For clarity, the Parties agree that the parenthetical clause in
the immediately preceding sentence is not intended to obviate or otherwise limit
the possibility that both Isis and the Foundation may be determined to be joint
tort-feasors and, therefore, share liability.

(c) Limitation on Damages; Damages
Cap.

(i) Limitation on
Damages. NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT BUT SUBJECT TO SECTION 20(d) OF THIS AGREEMENT, NEITHER
PARTY NOR ITS AFFILIATES WILL BE LIABLE TO THE OTHER PARTY OR ITS AFFILIATES FOR
ANY CONSEQUENTIAL, SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR EXEMPLARY DAMAGES
OR OTHER SIMILAR OR LIKE DAMAGES (INCLUDING LOSS OF PROFITS) UNDER THIS
AGREEMENT EVEN IF SUCH PARTY OR AFFILIATE HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES; PROVIDED, THAT, NOTHING IN THIS AGREEMENT WILL EXCLUDE OR
LIMIT THE LIABILITY OF EITHER PARTY FOR (A) A BREACH OF SECTION 14 OF
THIS AGREEMENT; (B) DEATH OR PERSONAL INJURY; OR (C) FRAUD.

(ii) Damages Cap.
Isis153 liability to the Foundation under this Agreement and the 2007 Research
Agreement shall not exceed the sum of (A) US$[***] plus (B) [***]. The
Foundation153s liability to Isis under this Agreement and the 2007 Research
Agreement shall not exceed [***]. Isis and the Foundation agree that this
Section 20(c)(ii) supersedes and replaces in its entirety Section
18(c)(ii) of the 2007 Research Agreement.

(d) Indemnity
Amounts. Any amounts owing pursuant to a Party153s
express indemnity obligations under this Agreement will not be subject to the
limitation on damages restrictions set forth in Section 20(c) of this
Agreement.

(e) Indemnity Procedures.
In the event that a Party that is entitled to indemnification under
Section 20(a) or Section 20(b) of this Agreement, as the case may
be (such Party the “Indemnified Party“) seeks
indemnification from the other Party (such Party an “Indemnifying
Party“), the Indemnified Party will (i) inform, in writing, the
Indemnifying Party of the claim as soon as reasonably practicable after the
Indemnified Party receives notice of such claim; (ii) permit the Indemnifying
Party to assume direction and control of the defense of such claim (including
the sole right to settle such claim in the Indemnifying Party153s sole discretion,
provided that any such settlement does not (A) admit any fault or
negligence on the part of the Indemnified Party, (B) impose any obligation on
the Indemnified Party or (C) without the prior written consent of the
Indemnified Party (which consent shall not unreasonably withheld, conditioned or
delayed), adversely affect the Indemnified Party in any way; (iii) cooperate as
reasonably requested (at the cost and expense of the Indemnifying Party) in the
defense of such claim; and (iv) undertake commercially (at the cost and expense
of the Indemnifying Party) reasonable steps to mitigate any loss, damage or
expense with respect to such claim. Notwithstanding anything in this Agreement
to the contrary, the Indemnifying Party will have no liability under Section
20(a) or Section 20(b), of this Agreement, as the case may be, with
respect to any claims settled by the Indemnified Party without the Indemnifying
Party153s prior written consent.

21. Alternative Dispute
Resolution.

(a) General.
Except for (i) Steering Committee Disputes which are to be resolved pursuant to
Section 5(a)(iii)(B) of this Agreement and (ii) Commercial License Grant
Disputes which are to be resolved pursuant to Section 10(e) of this
Agreement, if a dispute arises out of or relates to this Agreement, or breach
thereof, the Parties agree that such dispute will be resolved exclusively in
accordance with this Section 21.

(b) Resolution by Good Faith
Negotiations. If a dispute arises out of or
relates to this Agreement, or breach thereof, the Parties agree to negotiate in
good faith to settle such dispute in accordance with this Section 21(b).
If a dispute arises out of or relates to this Agreement, or breach thereof,
either Party may submit such dispute to B. Lynne Parshall, in the case of Isis
(or such other individual identified in writing by Isis), and Robi Blumenstein,
in the case of the Foundation (or such other individual identified in writing by
the Foundation), for resolution by providing a written notice (each, a
“Senior Management Dispute Resolution Notice“) to the
other Party setting forth in reasonable detail the basis of such dispute. If a
dispute that is the subject of a Senior Management Dispute Resolution Notice is
not resolved by the Parties within 60 days of the delivery of such Senior
Management Dispute Resolution Notice, such dispute will be resolved in
accordance with Section 21(c) of this Agreement. The Parties agree that
any and all such negotiations will be confidential.

(c) Resolution by Binding
Arbitration. If a dispute that is the subject of a
Senior Management Dispute Resolution Notice is not resolved by the Parties
within 60 days of the delivery of such Senior Management Dispute Resolution
Notice, either Party may submit such dispute for final resolution by an
arbitrator in accordance with this Section 21(c) by providing a written
notice (each, an “Arbitration Dispute Resolution
Notice“) to the other Party to such effect within 30 days after
the end of such 60-day period. The Parties agree that any dispute that is the
subject of an Arbitration Dispute Resolution Notice will be settled by a single
arbitrator in a binding arbitration in Denver, Colorado administered by JAMS
under its Comprehensive Arbitration Rules and Procedures. The Parties will
instruct the arbitrator that the prevailing party of any dispute (as determined
by the arbitrator) will be awarded the reasonable attorneys153 fees, costs and
other expenses incurred by the prevailing party in the course of the arbitration
of such dispute. The award rendered by the arbitrator will be final and binding
on the Parties, and judgment on the award may be entered in any court having
jurisdiction thereof if reasonably necessary for enforcement. The Parties agree
that, notwithstanding anything to the contrary in such rules, any and all such
proceedings will be confidential.

22. Assignment.
Isis may not assign this Agreement without the prior written consent of the
Foundation, except to an (a) Affiliate of Isis, or (b) entity that acquires all
or substantially all of the business of Isis (whether by sale of assets or stock
or by merger or other business combination), and in each case who agrees, in
writing, to assume Isis153 obligations under this Agreement. Isis agrees that any
such assignee will (i) acquire Isis153 interest in all of the Isis Background
Intellectual Property, Project Compounds, Project Intellectual Property and
Project Results and (ii) agree, in writing, to assume Isis153 obligations under
this Agreement. The Foundation may assign this Agreement so long as the assignee
expressly assumes in writing the Foundation153s obligations in this Agreement.

23. Press Releases.
Upon execution of this Agreement, the Parties will mutually agree to issue
either a joint press release or separate press releases announcing the existence
of this Agreement, in any case in a form and substance agreed to in writing by
the Parties. Each Party agrees not to issue any other press release or other
public statement disclosing other information relating to this Agreement or the
transactions contemplated hereby without the prior written consent of the other
Party, which consent will not be unreasonably withheld or delayed, provided
however, that each Party may make disclosures permitted by, and in accordance
with, Section 14 of this Agreement. Each Party agrees to provide to the
other Party a copy of any public announcement regarding this Agreement or the
subject matter thereof as soon as reasonably practicable under the circumstances
prior to its scheduled release. Except under extraordinary circumstances, each
Party will provide the other with an advance copy of any such announcement at
least five business days prior to its scheduled release.

24. Incorporation of Appendices, Exhibits and
Schedules; Entire Agreement; Amendment. The
appendices, exhibits and schedules identified in this Agreement are incorporated
herein by reference and made a part hereof. If (a) any terms or conditions of
the 2007 Research Agreement, (b) anything in any appendix, exhibit or schedule
attached to this Agreement or (c) any notice, invoice or other document
delivered by a Party under this Agreement conflicts with any terms or conditions
set forth in the body of this Agreement, the terms and conditions set forth in
the body of this Agreement will control. This Agreement constitutes the entire
agreement among the Parties relating to the Research and all prior
understandings and agreements relating to the Research are superseded hereby.
This Agreement may not be amended except by a document signed by authorized
representatives of each of the Parties.

25. No Waiver. Any
failure of a Party to enforce any provision of this Agreement will not be deemed
a waiver of its right to enforce such provision on any subsequent occasion. No
waiver of any provision of this Agreement will be valid unless it is in writing
and is executed by the Party against whom such waiver is sought to be enforced.
A waiver by any of the Parties of any provision of this Agreement will not be
construed to be a waiver of any succeeding breach thereof or of any other
provision of this Agreement.

26. Severability.
Whenever possible, each provision of this Agreement will be interpreted in such
manner as to be effective and valid under applicable law. In the event a court
of competent jurisdiction holds any provision of this Agreement to be invalid,
such holding will have no effect on the remaining provisions of this Agreement,
and they will continue in full force and effect.

27. Interpretation;
Headings. The word “including” will mean
“including without limitation”. All pronouns and any variations thereof refer to
the masculine, feminine or neuter, singular or plural, as the context may
require. All terms defined in this Agreement in their singular or plural forms
have correlative meanings when used herein in their plural or singular forms,
respectively. Headings used in this Agreement are for convenience of reference
only and are not intended to influence the interpretation hereof.

28. Governing Law.
This Agreement will be governed by and construed in accordance with the domestic
laws of the State of New York without giving effect to any choice or conflict of
law provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York.

29. No Strict
Construction. The Parties have participated
jointly in the negotiation and drafting of this Agreement. In the event of an
ambiguity or question of intent or interpretation arises, this Agreement will be
construed as if drafted jointly by the Parties, and no presumption or burden of
proof will arise favoring or disfavoring any of the Parties by virtue of the
authorship of any of the provisions of this Agreement.

30. Counterparts.
This Agreement may be signed, including by facsimile signature, in two or more
counterparts and each such counterpart will constitute an original document and
such counterparts, taken together, will constitute the same instrument.

In witness to the foregoing, the Parties have executed this Agreement as of
the Effective Date.

FOUNDATION:

CHDI Foundation, Inc.


By:	/s/ Robi Blumenstein
	Name: Robi Blumenstein
	Title: President, CHDI Management


ISIS:

Isis Pharmaceuticals, Inc.


By:	/s/ B. Lynne Parshall
	Name: B. Lynne Parshall
	Title: Chief Operating Officer & CFO

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