ISIS PHARMACEUTICALS INC
EXHIBIT 10.3
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>5
<FILENAME>a2067158zex-10_3.txt
<DESCRIPTION>EXHIBIT 10.3
<TEXT>
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                                               CONFIDENTIAL TREATMENT REQUESTED
                             UNDER 17 C.F.R. Sections 200.80(b)4, AND 240.24b-2

                           [ISIS PHARMACEUTICALS LOGO]
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                           AMENDED & RESTATED IDT-ISIS
                               LICENSING AGREEMENT

                                 By and between

                           ISIS PHARMACEUTICALS, INC.

                 2292 Faraday Avenue, Carlsbad, California 92008
                        Hereinafter referred to as "ISIS"

                                       and

                        INTEGRATED DNA TECHNOLOGIES, INC
                  1710 Commercial Park, Coralville, Iowa 52241
                       Hereinafter referred to as ("IDT")




                                   Dated as of

                                DECEMBER 4, 2001.

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


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                                    RECITALS

WHEREAS, ISIS and IDT entered into a Licensing Agreement dated as of March
12, 1999, (the "Original Agreement") which contains certain limitations in
the licenses obtained by each Party; and,

WHEREAS, ISIS and IDT would mutually benefit from expanding and clarifying
the scope of licenses obtained in the Original Agreement to include more
broad sublicensing rights for ISIS, including rights in the fields of
functional genomics, target validation, and antisense drug development, and
to provide IDT with rights under ISIS's RNase H suite of patents for sales of
oligonucleotides;

NOW, THEREFORE the parties hereby agree to replace and irrevocably supercede
the Original Agreement with this Amended and Restated IDT-ISIS Licensing
Agreement (hereinafter the "Restated Agreement") as follows:

                                    ARTICLE I
                             INTERPRETATION & EFFECT

1.1      SUPERCEDING AGREEMENT. It is the intent of the Parties to
         irrevocably supercede the Original Agreement with this Restated
         Agreement. The rights and obligations of the parties are to be
         exclusively defined by the terms, conditions, rights, and
         obligations as expressed herein. All existing and future rights and
         obligations of the Parties, including specifically all
         post-termination rights and obligations, contained in the Original
         Agreement are hereby null and void. In the event any term of the
         Original Agreement is not specifically superceded, modified or
         replaced by a corresponding term of the Restated Agreement, it shall
         be construed as a deliberate omission by the Parties.

1.2      EFFECTIVE DATE; WAIVERS. In exchange for the good and valuable
         consideration received by each Party described herein, each Party
         hereby irrevocably waives all claims to royalties or related damages
         arising out of the performance or conduct of the other Party prior
         to the Restated Agreement Effective Date, as hereinunder defined.
         The execution of this Restated Agreement shall not be interpreted as
         requiring either the repayment of licensing fees paid by ISIS
         pursuant to the Original Agreement, nor shall it be interpreted as
         requiring refund of such payments by IDT.

                                    ARTICLE 2
                                   DEFINTIONS

The following terms when used in this Restated Agreement shall be given the
meanings contained herein:


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2.1      "Academic Market" shall mean end-users employed by and located at or
         in academic, university, government, and other 501(c)(3) registered
         not-for-profit organizations; provided however that specifically
         excluded from this definition shall be those end-users at such
         institutions whose research is directly funded by a for-profit
         corporation for the purpose of drug discovery, drug development, or
         target validation/gene functionalization wherein the funding
         corporation has a specific legal interest or right to the data and
         information of the funded research.

2.2      "Affiliates" shall mean any corporation, company, partnership, joint
         venture or other entity, which controls, is controlled or under
         common control with Isis or IDT as the case may be, and in the case
         of Isis shall also mean and include Pantheco, APS. For the purposes
         of this definition, control shall mean the direct or indirect
         ownership of at least fifty percent (50%) or, if less than fifty
         percent (50%), the maximum percentage as allowed by applicable law
         of (a) the stock shares entitled to vote for the election of
         directors; or (b) ownership interest.

2.3      "Antisense Drug Development Sublicenses" shall mean
         licenses/sublicenses under the Walder Patents to third parties to
         pursue all Medical Applications, which are not based on ISIS
         Licensed Products. Antisense Drug Development Sublicense holders
         shall have the limited right to issue sublicenses as a Product
         Sublicense under the Walder Patents to third-parties.

2.4      "Antisense Oligonucleotide" shall mean a polynucleotide,
         oligonucleotide, or oligonucleotide analog, which hybridizes in a
         sequence specific manner under physiological conditions to RNA
         forming an RNA-DNA duplex, which duplex acts to modulate the
         production of a targeted gene product. An antisense oligonucleotide
         analog may include naturally occurring or non-natural heterocycles,
         sugar and/or backbone linkages, and may be a molecule in which the
         sugar may be absent, in which the backbone linkage may be phosphate
         based, amide based, or based on other chemistries and which may or
         may not include stem loop or structural units.

2.5      "Competing Oligonucleotide Supplier" shall mean any entity having a
         license from ISIS or its Affiliates to manufacture and/or sell
         Antisense Oligonucleotides for use in Research Applications.

2.6      "Confidential Information" shall mean information disclosed pursuant
         to an obligation contained in this Restated Agreement, including,
         without limitation, proprietary information and materials (whether
         or not patentable) regarding a Party's technology, products,
         business information or objectives, which is designated as
         confidential in writing by the disclosing Party, whether by letter
         or by the use of an appropriate stamp or legend, prior to or at the
         time any such information is disclosed by the disclosing Party to
         the other Party.

2.7      "Fee for Service FGTV Licenses" shall mean sublicenses under the
         Walder Patents to commercial entities offering antisense functional
         genomics/target validation products or services, including but not
         limited to database subscriptions, to third-parties. Specifically


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         excluded from this definition shall be licenses under the Walder
         Patents to Competing Oligonucleotide Suppliers and other entities
         that sell oligonucleotides as an independent product (i.e, sales of
         oligonucleotides that are not related to the provision of a
         complementary functional genomic or target validation service to the
         third-party purchasing the oligonucleotides).

2.8      "IDT Licensed Commercial Product" shall mean and include any
         diagnostic, therapeutic, or prophylactic material, composition of
         matter, or method that either (a) is covered by a Valid Claims of
         any patent within the definition of the Walder Patents; or (b) the
         manufacture, use or sale of which would constitute, but for the
         license granted pursuant to this Restated Agreement, an infringement
         of any Valid Claim within the definition of the Walder Patents.

2.9      "In-House FGTV Licenses" shall mean licenses under the Walder
         patents to end-users at any for-profit commercial entity using
         Antisense Oligonucleotides to use antisense-based functional
         genomic/target validation products and services for that licensee's
         internal research and development.

2.10     "ISIS Academic Patents". Those patents defined, described or listed
         on Exhibit 1, as it may be expanded from time to time at ISIS's
         discretion. {Specifically INCLUDED in the definition of the "ISIS
         Academic Patents" are U.S. Patents [***] and the two allowed patent
         applications listed on Exhibit 1 herein, and all existing and future
         patent applications or patents that specifically claim the RNase H
         Mechanism of Action, which patents or applications ISIS can license
         or sublicense to IDT that IDT may require to make, use or sell
         Antisense Oligonucleotides for the Academic Market. Specifically
         EXCLUDED from the definition of "ISIS Academic Patents" shall be all
         patents or relevant patent claims related to clinical formulations
         and administration of oligonucleotides (including, without
         limitation, methods and reagents for the clinical delivery of
         oligonucleotides); gene-related patents, including without
         limitation patents to specific gene structures, gene targets and
         methods of treatment; 2' MOE technology, and any other patents
         and/or claims regarding chemistries not listed on Exhibit 1.}

2.11     "ISIS Licensed Product" an ISIS oligonucleotide drug or drug
         candidate molecule licensed to a third party for further
         development, commercialization, manufacture or distribution of the
         oligonucleotide drug or drug candidate molecule.

2.12     "Licensed Purchaser of RNase H Oligonucleotides " shall mean a
         third-party for-profit commercial entity that has obtained from ISIS
         a license to use RNase H Oligonucleotides.

2.13     "Medical Applications" shall mean diagnostic products, therapeutic
         and prophylactic drugs or vaccines, intended for the diagnosis,
         prevention, or treatment of disease in humans, animals or plants and
         all discovery, research, development, and commercialization efforts
         to support those uses, including without limitation, elucidation of
         gene function and target validation.


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2.14     "Net Sales" shall mean the gross receipts received by ISIS or its
         Affiliates or sublicensees, as appropriate, for the sale of IDT
         Licensed Commercial Products by ISIS and its Affiliates or its
         sublicensees, as appropriate, less the following deductions:

         (i)      Prompt payment or other trade or quantity discounts
                  actually allowed and taken in such amounts as are customary
                  in the trade;

         (ii)     Commissions paid or allowed to distributors and agents who
                  are independent third parties other than such parties who
                  are solely performing detailing functions;

         (iii)    Amounts paid or credited by reason of timely rejection or
                  returns;

         (iv)     Taxes (other than franchise or income taxes on the income
                  of Isis actually paid or withheld;

         (v)      Allowances including any allowances for bad debt. Provided
                  that upon the extinguishment of any such allowance, the
                  extinguishment will be determined to be a receipt;

         (vi)     Transportation and delivery charges, including insurance
                  premiums actually incurred;

         Notwithstanding the foregoing, amounts received by ISIS or its
         Affiliates or sublicensees for the sale of IDT Licensed Commercial
         Products among ISIS, its Affiliates or sublicensees whether for
         their internal use or for resale or other disposition will not be
         included in the computation of Net Sales hereunder. For purposes of
         this Restated Agreement a distributor will not be deemed a
         sublicensee and sales by ISIS, its Affiliates or sublicensees to a
         distributor will not be subject to royalties.

2.15     "Original Agreement" shall mean the Licensing Agreement executed by
         IDT and ISIS with an effective date of March 12, 1999 (attached
         hereto as Attachment 1).

2.16     "Product Sublicense" shall mean a sublicense under the Walder
         Patents to further develop, commercialize, manufacture or distribute
         an oligonucleotide drug or drug candidate molecule, which sublicense
         is granted by either: (a) ISIS under Article 3 of the Restated
         Agreement; or (b) an Antisense Drug Development Sublicense holder.

2.17     "Restated Agreement Effective Date" shall be the day of last dated
         signature of a signatory to this Restated Agreement.

2.18     "RNase H Mechanisms of Action" means methods of using RNase H
         enzymes to cleave a targeted RNA in cells.

2.19     RNase H Oligonucleotides" shall mean an Antisense Oligonucleotide
         that acts by the RNase H Mechanism of Action.


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2.20     "Research Applications" shall mean all non-therapeutic uses of
         oligonucleotides including but not limited to all in vitro cell
         culture, tissue culture, laboratory animal, plant and microorganism
         studies.

2.21     "Walder Patents" shall mean and include [***] and all divisionals,
         reissues, and foreign counterparts derived from these patents and
         patent applications.

2.22     "Valid Claim" shall mean a claim of an issued patent that has not
         been ruled invalid or unenforceable by a court of competent
         jurisdiction in an unappealed or unappealable decision.

                                    ARTICLE 3
                          IDT GRANT OF LICENSES TO ISIS

3.1      MEDICAL APPLICATIONS. IDT grants to Isis, a non-exclusive,
         royalty-bearing, worldwide license to make, have made, use, offer to
         sell, import, and sell IDT Licensed Commercial Products for all
         Medical Applications (the "Medical Applications License"). Isis may
         at its option extend the licenses granted hereunder to an Affiliate,
         in which event a sublicensing fee will not be required.

         3.1.1    PRODUCT SUBLICENSES. ISIS may grant written sublicenses
                  under this Medical Applications License to third parties to
                  further develop, commercialize, manufacture or distribute
                  an oligonucleotide drug or drug candidate molecule (a
                  "Product Sublicense" and/or Product Sublicensee). Isis will
                  inform IDT of the identity of any such Product Sublicensee
                  and the nature of such sublicense within 60 days of
                  execution of such sublicense and warrant to IDT that the
                  grant of rights to any sublicensee will conform to the
                  grant of rights hereunder. Any agreement granting a
                  sublicense shall state that the sublicense is subject to
                  the terms of this Restated Agreement. Isis shall have the
                  same accounting and reporting responsibilities for the
                  activities of any sublicensee, as if the activities were
                  directly those of Isis.

3.2      FUNCTIONAL GENOMICS AND TARGET VALIDATION LICENSE. IDT grants to
         ISIS a fully paid-up, non-royalty bearing, worldwide, exclusive
         license (except with respect to IDT, and with respect to rights
         already granted to [***] (as described in section 3.2.1 hereunder)
         under the Walder Patents to make, have made, use, import, offer to
         sell, and sell all functional genomics and target validation
         products and services ("the FGTV License").

         3.2.1    FEE-FOR-SERVICE FGTV SUBLICENSES. IDT grants to ISIS the
                  exclusive right, even as to IDT, to issue Fee-for Service
                  FGTV Licenses under the Walder Patents to third parties.
                  ISIS will have no royalty or other contingent payment
                  obligations to IDT with respect to sublicenses granted
                  under this provision. ISIS acknowledges that prior to the
                  execution of this Restated Agreement, [***] has obtained a
                  Fee for Service FGTV license from IDT, the scope and
                  validity of which is not affected by the exclusive rights
                  granted ISIS in 3.2.1, herein. IDT agrees that it shall not


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                  amend or expand the [***] attached hereto as Exhibit 3,
                  without the prior written approval of ISIS.

         3.2.2    IN-HOUSE FGTV SUBLICENSES. IDT grants to ISIS the exclusive
                  right even as to IDT to issue future In-House FGTV Licenses
                  under the Walder Patents to third parties. ISIS will have
                  no royalty or other contingent payment obligations to IDT
                  with respect to sublicenses granted under this provision.

         3.2.3    IDT RETAINED RIGHTS. IDT reserves all rights under the
                  Walder Patents to make, use and sell oligonucleotides and
                  other products and services.

3.3      ANTISENSE DRUG DEVELOPMENT SUBLICENSES. IDT grants to ISIS a
         term-limited exclusive license (even as to IDT) to issue Antisense
         Drug Development Sublicenses under the Walder patents to
         third-parties. ISIS's shall pay IDT a [***] initial license payment
         pursuant to Article 5 herein, within ten (10) days of the Restated
         Agreement Effective Date, to maintain the exclusivity of the license
         for a period of [***] years following the Restated Agreement
         Effective Date.

         3.3.1    OPTION TO EXTEND EXCLUSIVITY. ISIS will have the option to
                  extend the exclusivity of the license for the duration of
                  the last to expire of the Walder Patents for an additional
                  [***]payment, such payment to be made within thirty (30)
                  days of the expiration of the initial [***] period, stated
                  herein.

         3.3.2    EFFECT OF LOST EXCLUSIVITY. Should ISIS not exercise the
                  option in 3.3.1 ISIS's exclusive right to issue Antisense
                  Drug Development Sublicenses will revert to a non-exclusive
                  right, without further initial payment obligation to IDT.
                  In that event, IDT shall have the right to issue Antisense
                  Drug Development Sublicenses under the Walder Patents to
                  third-parties. In this instance, notwithstanding the
                  provisions of 3.2.2., IDT shall have the right to grant an
                  In-House FGTV Licenses under the Walder Patents as a part
                  of an Antisense Drug Development Sublicense.

        3.3.3     SUBLICENSING PAYMENTS. For each Antisense Drug Development
                  sublicense issued by ISIS under this provision, ISIS will
                  pay IDT or will obligate the Antisense Drug Development
                  Sublicense Holder to pay IDT, the initial sublicensing fees
                  and Royalties as established in Appendix A, attached, and
                  to comply with or fulfill all necessary reporting and
                  accounting obligations as defined in this Restated
                  Agreement. ISIS's initial license payments (specifically
                  the [***] payment and the optional [***] payment) made
                  under this provision will be creditable against initial
                  sublicensing fees and royalty payments owed to IDT pursuant
                  to the issuance of Antisense Drug Development Sublicenses.

         3.3.4    PRIOR LICENSES. ISIS acknowledges that prior to this First
                  Amendment, Hybridon Inc., and Epigenesis Pharmaceuticals,
                  Inc., have each obtained an Antisense Drug Development
                  Sublicense from IDT, the scope and validity of which is not
                  affected by the exclusive rights granted ISIS in paragraph
                  3.3 herein. IDT agrees that it shall not amend or expand
                  either of such licenses without ISIS's prior written
                  approval.


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3.4      NOTICE OBLIGATIONS. To minimize confusion with respect to the
         sublicensing activities of ISIS, or its sublicensees, ISIS agrees to
         the following:

         3.4.1    NOTICES TO IDT OF SUBLICENSES. Isis shall provide IDT with
                  written notice of any sublicense granted pursuant to this
                  Restated Agreement within ten (10) days after the grant of
                  such sublicense, such written notice specifying the name of
                  the sublicensee, the date of the sublicense, and whether
                  such sublicense is a Product Sublicense, a Fee-for-Service
                  FGTV Sublicense, an In-House FGTV Sublicense, or an
                  Antisense Drug Development Sublicense. With respect to
                  Antisense Drug Development Sublicenses, ISIS will pay or
                  cause the Antisense Drug Development Sublicense Holder to
                  pay, the initial sublicensing fee to IDT within twenty (20)
                  days of the execution of such sublicense.

         3.4.2    NOTICE TO IDT OF LICENSED PURCHASERS. Along with notice of
                  an In-House FGTV Sublicense required in 3.4.1, Isis shall
                  provide to IDT, a complete list of Licensed Purchasers of
                  RNase H Oligonucleotides upon the written request of IDT,
                  such requests not to exceed two per calendar year.

         3.4.3    [***]

                                    ARTICLE 4
                                 LICENSES TO IDT

4.1      IDT SALES TO THE ACADEMIC MARKET. ISIS grants to IDT a worldwide,
         fully paid-up, non-royalty bearing, non-exclusive license under the
         ISIS Academic Patents to make, have made, use, import, offer to
         sell, sell, and have sold oligonucleotides and other related
         research products to the Academic Market.

4.2      RESTRICTIONS ON SALES. Within thirty (30) days of the Restated
         Agreement Effective Date, and consistent with the provisions of
         section 3.2.1 herein, IDT agrees to suspend sales of any RNase H
         Oligonucleotides to third-parties except as may be required by IDT's
         existing obligations, for incorporation into antisense-based
         functional genomics/target validation products or incorporation into
         a commercial service, unless IDT receives the prior written
         authorization from ISIS.

4.3      THIRD-PARTY OBLIGATIONS. IDT acknowledges that ISIS may have certain
         financial and reporting obligations under licenses it has obtained
         from third parties to certain patents included in the definition of
         ISIS Academic Patents. IDT agrees to either pay all associated
         financial obligations (except upfront licensing fees) and fulfill
         all associated legal/reporting obligations that may be required of
         ISIS to a third-party for sales of products by IDT under the
         sublicense, or IDT shall refuse the sublicense under such patent(s)
         and it shall be deleted from the Academic Patents. ISIS shall
         promptly notify IDT of the precise nature of all such obligations so
         that IDT can make the required election(s).


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4.4      ISIS RETAINED RIGHTS. Notwithstanding the licenses granted to IDT
         herein, Isis shall retain all rights, however characterized under
         all ISIS Academic Patents and the RNase H Suite of Patents,
         including without limitation, rights to use, have used, make, have
         made, import, have imported, offer to sell, sell, and have sold
         oligonucleotides and related technologies for any and all
         applications.

4.5      [***]

                                    ARTICLE 5
                                  CONSIDERATION

5.1      GUARANTEED PAYMENTS. Within five (5) days of the Restated Agreement
         Effective Date, ISIS will pay to IDT the sum of $3,500,000
         structured as follows:

         (i)      $3 million in non-refundable licensing fees;
         (ii)     $500,000 for exclusive rights to issue Antisense Drug
                  Development sublicenses under section 3.3 herein,

         In addition, ISIS will pay IDT $350,000 in non-refundable licensing
         fees on or before each of the first four (4) anniversary dates of
         the Restated Agreement Effective Date (i.e. four anniversary
         payments totaling $1.4 million).

5.2      CONTINGENT ROYALTY PAYMENTS. In further consideration for the
         Medical Application License and the exclusive right to issue
         Antisense Drug Development Sublicenses granted herein, Isis agrees
         to pay IDT [***] of Net Sales from each IDT Licensed Commercial
         Product sold by Isis, or its Sublicensees, however characterized,
         beginning with the first sale to any unrelated third party,
         according to the terms and conditions of Article 6 herein.

5.3      CONTINGENT SUBLICENSING FEES. ISIS shall pay to IDT, or shall cause
         the sublicensee to pay to IDT, the initial licensing fees as defined
         in Appendix A for all Antisense Drug Development sublicenses issued
         by ISIS under this Restated Agreement.

                                    ARTICLE 6
                              ACCOUNTING /PAYMENTS

6.1      QUARTERLY ESTIMATES. For each calendar year in which there are Net
         Sales of IDT Licensed Commercial Products ISIS shall prepare, or
         cause its Affiliates or sublicensees to prepare, deliver and pay to
         IDT a quarterly estimate of the royalty payments due to IDT under
         Section 5.1 herein, within sixty (60) days following the last day of
         the first, second, and third quarters of each calendar year of ISIS.

6.2      ANNUAL REPORT. Within ninety (90) days following the last day of
         each calendar year, ISIS, its Affiliates, or licensees, whichever is
         applicable, shall prepare and deliver an annual report of the total
         royalty payments due to IDT for the calendar year expired. The
         reporting party shall tender payment of the balance owed for the
         year, including all payments owed for the fourth quarter of the year
         expired, and any necessary adjustments


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         to the quarterly estimate payments previously paid. Each quarterly
         estimate or annual payment shall be accompanied by a statement of
         account which shall indicate the estimated or actual Net Sales, as
         the case may be, by the reporting party for the previous period and
         shall show the amount of royalties due IDT with sufficient detail to
         enable confirmation of the calculations by IDT.

6.3      PAYMENT CURRENCY. Except as otherwise directed, all amounts owing to
         IDT under this Restated Agreement shall be paid in U.S. dollars to
         IDT at the addresses provided or via wire transfer to a specified
         IDT account. All royalties owing with respect to Net Sales stated in
         currencies other than U.S. dollars shall be converted at the rate
         shown in the Wall Street Journal on the last day of the quarter for
         which the royalty is due, or shall be converted according to the
         terms governing conversion for an Isis sublicensee.

6.4      RECORDKEEPING. Isis, its Affiliates and its sublicensee(s) shall
         keep books and records sufficient to verify the accuracy and
         completeness of the accounting referred to above, including without
         limitation sales, accounts receivable, and invoice records relating
         to IDT Licensed Commercial Products. Such books and records shall be
         preserved for a period not less than five (5) years after they are
         created during and after the term of this Restated Agreement.

6.5      AUDITING/DEFICIENCIES. Isis, its Affiliates, and its sublicensee(s)
         shall take all steps necessary so that IDT may, within sixty days of
         its request, review and copy all the books and records at a single
         U.S. location to verify the accuracy of Isis and its
         sublicensee(s)'s accounting. Such review shall be made not more than
         once each calendar year, upon reasonable notice and during regular
         business hours, at the expense of IDT by a certified public
         accountant to whom there is no reasonable objection by either party.
         If a royalty payment deficiency for a calendar year is determined,
         the reporting party shall pay the royalty deficiency outstanding
         within thirty (30) days of receiving written notice thereof, and
         shall reimburse IDT for the cost of the inspection.

                                    ARTICLE 7
                          WARRANTIES/INDEMNIFICATIONS.

7.1      NO CONSEQUENTIAL DAMAGES. Neither Party shall be liable to the other
         Party, its Affiliates, sublicensees, successors, or assigns for any
         loss of profits, loss of business, interruption of business, nor for
         indirect, special or consequential damages of any kind under this
         Restated Agreement.

7.2      WARRANTY OF AUTHORITY. The parties warrant each has the right to
         grant the licenses granted to the other party in this Restated
         Agreement. IDT warrants that it does not own or control any patents
         or patent applications with claims to antisense compounds and/or
         methods not already disclosed in the definition of the "Walder
         Patents".

7.3      WARRANTY DISCLAIMERS. Except as expressly set forth herein, IDT and
         Isis make no representations, extend no warranties of any kind,
         either express or implied, and assume no responsibilities whatsoever
         with respect to use, sale, or other disposition by the other


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         party, its Affiliates, sublicensees or their vendees or other
         transferees, of IDT Licensed Commercial Products. EXCEPT AS
         EXPRESSLY SET FORTH HEREIN, NOTHING IN THIS RESTATED AGREEMENT, NOR
         ANY PRIOR COMMUNICATION, SHALL BE CONSTRUED AS:

              (i)     A WARRANTY OR REPRESENTATION BY IDT OR ISIS AS TO THE
                      VALIDITY OR SCOPE OF ANY OF THE PATENTS CONTAINED
                      WITHIN THE DEFINITIONS OF THE WALDER PATENTS AND ISIS
                      ACADEMIC PATENTS, RESPECTIVELY;

              (ii)    A WARRANTY OR REPRESENTATION THAT ANYTHING MADE, USED,
                      SOLD OR OTHERWISE DISPOSED OF UNDER THE LICENSES
                      GRANTED IN THIS RESTATED AGREEMENT WILL OR WILL NOT
                      INFRINGE PATENTS OF THIRD PARTIES; OR

              (iii)   AN OBLIGATION TO FURNISH ANY KNOW-HOW NOT PROVIDED IN
                      THE WALDER PATENTS OR THE ISIS ACADEMIC PATENTS OR ANY
                      SERVICES OTHER THAN THOSE SPECIFIED IN THIS RESTATED
                      AGREEMENT OR RELATED AGREEMENTS.

7.4      INDEMNIFICATION. Isis and IDT shall at all times during the term of
         this Restated Agreement and thereafter, indemnify, defend and hold
         each other, the University of Iowa Research Foundation/University of
         Iowa, and the authors and inventors of the Walder Patents and the
         Isis Academic Patents harmless against all claims and expenses,
         including legal expenses and reasonable attorneys fees, arising out
         of the death of or injury to any person or persons or out of any
         damage to property and against any other claim, proceeding, demand,
         expense and liability of any kind whatsoever resulting from the
         production, manufacture, sale, use, lease, consumption or
         advertisement of products or processes arising from any right or
         obligation of IDT or Isis, or their Affiliates, or any of its
         sublicensee(s) granted herein. Notwithstanding the above, IDT and
         Isis at all times reserves the right to retain counsel of its own to
         defend IDT's or Isis's interest.

                                    ARTICLE 8
                            CONFIDENTIAL INFORMATION

8.1      CONFIDENTIALITY. Isis and IDT each agrees to treat as confidential
         and to use only in the conduct of its business, all Confidential
         Information disclosed to it by the other party.

8.2      NON-DISCLOSURE AND NON-USE. Isis and IDT each agrees not to disclose
         any of the Confidential Information received from the other party to
         any unauthorized third party and not to use any of the Confidential
         Information except to fulfill the terms of the Restated Agreement,
         for a period of five (5) years from the receipt of the Confidential
         Information.

8.3      RELEASE FROM RESTRICTIONS. All information which is characterized as
         Confidential Information shall cease to be confidential and the
         receiving party shall be released from their respective obligations
         under sections 8.1 and 8.2 herein, if such information (i) is
         legally known to or was in the possession of the receiving party at
         the time of the disclosure; (ii) legally is or has become part of
         the public domain through no act or omission of the receiving party;
         (iii) has been disclosed to the recipient by a third party


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         without restriction as to the use or disclosure of the information:
         (iv) is available to the general public as a result of a
         governmentally required release or disclosure.

                                   ARTICLE 9.
                              TERM AND TERMINATION.

9.1      TERM. The term of this Restated Agreement shall extend until the
         last patent to expire included within the Walder Patents or Isis
         Academic Patents, whichever expires later.

9.2      TERMINATION FOR BREACH. In the event either party shall materially
         breach any of the terms, conditions and agreements contained in this
         Restated Agreement, then the alleging party may, at its election,
         notify the other party of the alleged breach giving the other party
         thirty (30) days written notice to cure the breach or begin good
         faith negotiations to resolve such alleged breach. If the alleged
         breach is not resolved to the satisfaction of the alleging party
         within thirty (30) days of the first giving of notice the alleging
         party may, at its option, bring arbitration proceedings under
         Article 12. In the event of a good faith dispute about monetary
         obligations, the notified party will pay any undisputed amounts to
         the alleging party and pay any disputed amounts into escrow pending
         resolution of such dispute, with payment to be made to the
         prevailing party. The licenses granted hereunder are not terminable
         except in the event of bankruptcy of a Licensee, subject to Sections
         9.3 9.4, and 9.5, and the continuing rights of sublicensees.

9.3      ELECTIVE TERMINATION FOR BANKRUPTCY. In the event either Party shall
         become insolvent, bankrupt or subject to the provisions of the
         United States Bankruptcy Code, or makes any assignment for the
         benefit of creditors, or ceases to carry on business as a going
         concern, then the other Party shall have the right but not the
         obligation to terminate the licenses granted by the termination
         party in this Restated Agreement; provided however, that Isis hall
         have the right to grant to its sublicensee(s), the power to assume
         Isis's rights and obligations under its licenses, and
         correspondingly Isis, and its successor in interest, however
         organized, shall, to the extent permitted by law, maintain the
         licenses granted to IDT pursuant to this Restated Agreement.

         9.3.1    BANKRUPTCY RIGHTS. In the event that this Restated
                  Agreement is terminated by a Party hereto or its receiver
                  or trustee under applicable bankruptcy laws due to such
                  Party's bankruptcy, then all rights and licenses granted
                  under or pursuant to this Restated Agreement by such Party
                  to the other Party are, and will otherwise be deemed to be,
                  for purposes of Section 365(n) of the Bankruptcy code and
                  any similar law or regulation in any other country,
                  licenses of rights to "intellectual property" as defined
                  under section 101(35A) of the Bankruptcy Code. The Parties
                  agree that all intellectual property rights licensed
                  hereunder, including without limitation any patents or
                  patent applications in any country of a Party covered by
                  the license grants under this Restated Agreement, are part
                  of the "intellectual property" as defined under Section
                  101(35A) of the Bankruptcy Code subject to the protections
                  afforded the non-terminating Party under Section 365(n) of
                  the Bankruptcy Code, and any similar law or regulation in
                  any other country.


                                      12

<Page>

9.4      POST TERMINATION RIGHTS/OBLIGATIONS. Notwithstanding the foregoing,
         the following rights and obligations shall survive termination of
         this Restated Agreement to the degree necessary to permit their
         complete fulfillment or discharge:

         9.4.1    IDT's right to receive or recover and ISIS's obligation to
                  pay licensing or sublicensing fees or royalties accrued or
                  accruable for payment at the time of any termination.

         9.4.2    Licensee's obligation to maintain records and Licensor's
                  right to receive final year accounting reports as provided
                  in Section 3E.

         9.4.3    Any cause of action or claim of Licensor, accrued or to
                  accrue because of any breach or default by the Licensee;

         9.4.4    The rights and obligations of both parties regarding
                  confidentiality as defined in section 7 herein;

         9.4.5    The warranty, indemnification and insurance provisions as
                  set forth in Section 6C, 6D, and 6E.

         9.4.6    The rights of ISIS, its Affiliates or sublicensees within
                  [***] months following such date of termination, to sell or
                  dispose of IDT Licensed Commercial Products completed or
                  substantially completed on the date of termination and to
                  complete orders, outstanding on such date of termination
                  for such products.

         9.4.7    The right of IDT or its Affiliates within [***] months
                  following such date of termination, to sell or dispose of
                  RNase H Oligonucleotides completed or substantially
                  completed on the date of termination and to complete
                  orders, outstanding on such date of termination for such
                  products.

9.5      SUCCESSOR IN INTEREST TO IDT. Should IDT, or its assigns, become
         insolvent, bankrupt or subject to the provisions of the United
         States Bankruptcy Code or any other similar legislation of any
         jurisdiction, the right of the University of Iowa Research
         Foundation to assume IDT's interest in the Walder Patents shall not
         be abrogated in any way by any term or provision of this Agreement.

9.6      SURVIAL OF SUBLICENSES. Notwithstanding the termination of this
         Restated Agreement or any of the licenses or sublicenses granted
         hereunder, any sublicenses to the Walder Patents granted by ISIS or
         its Affiliates pursuant to Article 3 hereof prior to the termination
         of the Restated Agreement shall survive such termination. In such
         event, ISIS shall have the right to exercise all of the rights of
         IDT as the sublicensor under such sublicense, subject to its
         compliance with continuing obligations regarding surviving
         sublicenses as defined in section 9.4 herein.


                                      13

<Page>

                                   ARTICLE 10
                               DISPUTE RESOLUTION

10.1     DISPUTES--ARBITRATION. The parties agree to attempt initially, to
         solve all claims, disputes, or controversies arising under, out of,
         or in connection with this Restated Agreement by conducting good
         faith negotiations. Except with respect to disputes as to the
         validity of patents, applications for injunctions, specific
         performance, or other equitable relief, any dispute arising out of
         or in connection with this Restated Agreement or any legal
         relationship associated therewith, that cannot be resolved amicably
         by the parties, shall be finally resolved by arbitration. The
         arbitration shall be conducted in accordance with the arbitration
         rules of the American Arbitration Association ("AAA") then in force,
         by one or more arbitrators appointed in accordance with said rules;
         provided, however, that arbitration proceedings may not be
         instituted until the party alleging breach of this Restated
         Agreement by the other party has given the other party not less than
         sixty (60) days notice to remedy any alleged breach and the other
         party has failed to do so. The place of arbitration shall be Cedar
         Rapids, Iowa, if Isis institutes the proceeding, and San Diego,
         California, if IDT institutes the proceeding. The award rendered
         shall be final and binding upon both parties. The judgment rendered
         shall include costs of arbitration, reasonable attorney's fees and
         reasonable costs for any expert and other witnesses. The arbitration
         may expressly consider the amounts paid pursuant to Sections 3B, 3C,
         and 3D, in considering any claims of any damages. Judgment upon the
         award may be entered in any court having jurisdiction, or
         application may be made to such court for judicial acceptance of the
         award and/or an order of enforcement. Disputes as to the validity
         and scope of patents shall be resolved by the courts of appropriate
         jurisdiction.

                                   ARTICLE 11
                                  MISCELLANEOUS

11.1     APPLICABLE LAW. This Restated Agreement shall be construed in
         accordance with the internal laws of the State of New York. If any
         provisions of this Agreement are or shall come into conflict with
         the laws or regulations of any jurisdiction or any governmental
         entity having jurisdiction over the parties or this Restated
         Agreement, those provisions shall be deemed automatically deleted,
         if such deletion is allowed by relevant law, and the remaining terms
         and conditions of this Restated Agreement shall remain in full force
         and effect. If such a deletion is not so allowed or if such a
         deletion leaves terms thereby made clearly illogical or
         inappropriate in effect, the parties agree to substitute new terms
         as similar in effect to the present terms of this Restated Agreement
         as may be allowed under the applicable laws and regulations. The
         parties hereto are independent contractors and not joint ventures or
         partners.

11.2     CONSTRUCTION/EFFECT. The parties acknowledge that this Restated
         Agreement has been the subject of full opportunity for negotiation
         and amendment and that the party who has taken the role of drafter
         shall not suffer any adverse construction of any terms or language
         of this Restated Agreement because of such role.


                                      14

<Page>

11.3     FORCE MAJEURE. A party hereto shall not be deemed in default with
         respect to the performance of or compliance with the terms,
         covenants, agreements conditions or provisos of this Agreement if
         the failure to perform or comply shall be due to any event of force
         majeure. "Force majeure" shall include natural disasters, acts of
         God, or any other event or cause beyond the control of the party
         claiming the benefit of this paragraph and which that party could
         not reasonably have protected itself against, provided however that
         lack of funds or credit shall not constitute an event of force
         majeure.

11.4     ASSIGNABILITY. This Restated Agreement may not be transferred or
         assigned by either party without the prior written consent of the
         other party, except that either Party may freely assign this
         Restated Agreement to (i) an Affiliate, if the assigning Party
         guarantees the full performance of its Affiliates' obligations
         hereunder, or (ii) an entity acquiring substantially all of
         Licensee's business to which the License relates. Any purported
         assignment in contravention of this section shall, at the option of
         the non-assigning party, be null and void and of no effect.

11.5     NOTICES. Any notice required to be given pursuant to the provisions
         of this Restated Agreement shall be in writing and shall be deemed
         to have been given at the earlier of the time when actually received
         as a consequence of any effective method of delivery, including but
         not limited to hand delivery, transmission by facsimile, or delivery
         by a professional courier service, or the time when sent by
         certified or registered mail addressed to the party. Any notice of
         change of address shall be effective only upon actual receipt, by
         the persons listed below or other formally authorized person(s)
         acting in their behalf.

         With respect to IDT:

                 Joseph A. Walder, M.D., Ph.D.
                 Attn: Legal Department
                 Integrated DNA Technologies, Inc.
                 1710 Commercial Park
                 Coralville, IA 52241-9802;

                 With a duplicate sent to:

                 Mark Campbell, J.D., COO
                 Corporate Vice President
                 Integrated DNA Technologies, Inc.
                 8930 Gross Point Road, Suite 700
                 Skokie, Illinois, 60077

         With respect to ISIS:

                 B. Lynne Parshall, J.D.
                 Isis Pharmaceuticals, Inc.
                 Executive Vice President and CFO


                                      15

<Page>

                 2292 Faraday Avenue
                 Carlsbad, CA 92008

                 With a duplicate sent to:

                 President of GeneTrove
                 Isis Pharmaceuticals, Inc.
                 2292 Faraday Avenue
                 Carlsbad, CA 92008

11.6     INTEGRATION. This Restated Agreement constitutes the full
         understanding between the parties with reference to the subject
         matter hereof, and no statements or agreements by or between the
         parties, whether orally or in writing, made prior to or at the
         signing hereof, shall vary or modify the written terms of this
         Restated Agreement. Neither party shall claim any amendment,
         modification, or release from any provisions of this Restated
         Agreement by mutual agreement, acknowledgement, or otherwise, unless
         such mutual agreement is in writing, signed by the other party, and
         specifically states that it is an amendment to this Restated
         Agreement.

11.7     BENEFITS. All terms and provisions of this Restated Agreement shall
         bind and inure to the benefit of the parties hereto, and upon their
         respective successors and assigns as those are permitted under the
         terms of this Restated Agreement.

11.8     AUTHORITY. The persons signing on behalf of IDT and Isis hereby
         warrant and represent that they have authority to execute this
         Restated Agreement on behalf of the party for whom they have signed.

                 REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK
                      SIGNATURE PAGE TO IMMEDIATELY FOLLOW


                                      16

<Page>

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement by their
duly authorized representatives.

<Table>
<S>                                           <C>
ISIS PHARMACEUTICALS, INC.                    INTEGRATED DNA TECHNOLOGIES, INC.

By:    Richard. K. Brown                      By: Dr. Joseph A. Walder


Signature:  /s/ Richard. K. Brown             Signature: /s/ Dr. Joseph A. Walder
            --------------------------                   ------------------------

Title: President, GeneTrove
       Vice President, ISIS Pharmaceuticals   Title: President & CEO

Date:    12/04/01                             Date: 12/04/01
</Table>


                                      17

<Page>

                               Restated Agreement
                                   Appendix A

                      LICENSE FEE AND ROYALTY SCHEDULES FOR
                     ANTISENSE DRUG DEVELOPMENT SUBLICENSES

[***]


                                    EXHIBIT 1
                              ISIS ACADEMIC PATENTS

[***]


                                      18

</TEXT>
</DOCUMENT>
