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Exhibit 10.1  

        CONFIDENTIAL TREATMENT REQUESTED

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

 
 

WAIVER AND RELEASE AGREEMENT    
    

        This Waiver and Release Agreement (the "Release") is made and entered into effective as of June 5, 2003 between Eli Lilly and Company, having its principal
place of business at Lilly Corporate Center, Indianapolis, Indiana 46285 ("Lilly"), and Isis Pharmaceuticals, Inc., having its principal place of business at Carlsbad Research Center, 2292
Faraday Avenue, Carlsbad, CA 92008 ("Isis"). 

RECITALS  

	1.
	Lilly
and Isis are parties to a Revised and Restated ISIS 3521 Supply Agreement (the "Supply Agreement") and a Loan Agreement (the "Loan Agreement"), both dated as of
September 30, 2002.

	2.
	Both
parties wish to terminate certain of their obligations and rights under these agreements, as set for below. 

        NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and promises contained in this Agreement, the parties, intending to be fully bound, agree as follows: 

ARTICLE I

TERMINATION  

	1.1
	The
parties agree that both the Supply Agreement, including the MRD and the Quality Agreement (both as defined in the Supply Agreement), and the Loan Agreement, including the
Promissory Note (as defined in the Loan Agreement) are hereby terminated, effective as of the date first written above, and neither party shall have any further rights, duties or obligations, monetary
or otherwise, under either the Loan Agreement or the Supply Agreement, except as expressly set forth herein. Without limiting the inclusiveness of this Section 1.1, the parties specifically
agree that the audit rights provided to Lilly in Sections 3.06 of the Loan Agreement and 5.6 of the Supply Agreement are terminated and do not survive.

	1.2
	The
parties have entered into a Revised Clinical Quality Agreement, which is attached hereto as Exhibit C (the "Quality Agreement"). This Quality Agreement shall remain in
effect until the earliest of the following occurs: (i) no further obligations remain under the Quality Agreement; (ii) the Development and License Agreement between the parties dated
August 14, 2001 is terminated; or (iii) the Quality Agreement is superseded.

	1.3
	Notwithstanding
Section 1.1 above, or any contradictory provision in the Loan Agreement, only Section 9.10, Confidentiality, of the Loan Agreement shall survive
termination:

	1.4
	Notwithstanding
Section 1.1 above, or any contradictory provision in the Supply Agreement, only the following provisions of the Supply Agreement shall survive termination:

	(a)
	Section 4.8,
Documentation and Record Keeping

	(b)
	Sections
9.4(b) and (c), Testing

	(c)
	Section 11.1,
Recalls

	(d)
	Article 12,
Indemnification and Insurance

	(e)
	Article 14,
Damage Limitations

	(f)
	Section 15.8,
Entire Agreement

	(g)
	The
clinical Quality Agreement dated November 13, 2001 

 

ARTICLE II

WAIVER AND RELEASE  

	2.1
	Lilly
does hereby release and discharge Isis of and from its obligation to repay the Debt under the Loan Agreement, and waives and releases any right to limit the use of the Dedicated
Facility.

	2.2
	Lilly
does hereby release and discharge Isis of and from its obligation to manufacture and supply API under the Supply Agreement.

	2.3
	Isis
does hereby release and discharge Lilly of and from its obligation to purchase API under the Supply Agreement.

	2.4
	Isis
does hereby release and discharge Lilly of and from its obligation to make payments for Idle Capacity Costs under Section 5.5 of the Supply Agreement, or to make any other
payments whatsoever under the Supply Agreement, except as specifically set out in Article III below. 

ARTICLE III

ADDITIONAL COVENANTS  

The
parties to this Release hereby additionally agree and covenant that: 

	3.1
	All
outstanding and currently accrued payments due from either party to the other under the Loan Agreement and the Supply Agreement, including payments under Section 2.02 of
the Loan Agreement and Section 3.1(f) of the Supply Agreement, are hereby settled in their entirety for the sum of [***] to be paid by Lilly to Isis via wire transfer
within ten (10) days of the effective date of this Release in accordance with the instructions attached hereto as Exhibit A. Upon receipt of such payment, Isis will have no further claim
against Lilly for any payments whatsoever under the Loan Agreement or the Supply Agreement. Lilly specifically waives any rights to reimbursement of the [***] prepayment for
raw materials made to Isis under Section 5.1(a) of the Supply Agreement, and further agrees that Isis has full title to and ownership of the raw materials, with the exception of certain raw
materials to be returned to Lilly (as specified below), with no restriction on use thereof and no requirement to account to Lilly therefore. Isis will return to Lilly the raw materials listed on
Exhibit B, and hereby transfers to Lilly full title to and ownership of these materials, with no restriction on use thereof and no requirement to account to Isis therefore.

	3.2
	To
the extent that Isis' obligations under the Quality Agreement have been agreed to under the Affinitak Development Plan, Lilly will have compensated Isis for such obligations under
Section 2 of Amendment Number One to the Development and License Agreement. If an Isis obligation arises under the Quality Agreement that is not outlined in the Affinitak Development Plan, the
Parties will promptly agree to an appropriate performance plan and budget to address such obligation, which will be approved by a designated representative(s) of each party. Without limiting the
inclusiveness of the foregoing, the Parties agree that the following obligations are not outlined in the Affinitak Development Plan: (i) obligations under the Quality Agreement that arise after
the [***]th day following the delivery to Lilly of the data generated as a result of the [***] drug Product stability testing as contemplated by the
Development Plan, except those obligations that arise under Section 2, 4, 9, 10 or 12 of the Quality Agreement; (ii) actions required to be taken by Isis under Section 7 of the
Quality Agreement as requested by Lilly and beyond those which Isis is required to complete per Isis procedures and applicable law for out of specification results and/or confirmed stability failures;
(iii) obligations arising from regulatory inspections or inquiries under Sections 9 and 10 of the Quality Agreement; and (iv) obligations incurred at the request of Lilly under
Section 16 of the Quality Agreement that result from [***].

	3.3
	The
parties acknowledge and admit that no other representation, promise or agreement of any nature whatsoever, has been made to them, and that this Release contains the entire
agreement between the parties and that all terms of this Release are binding upon them. This Release shall 

2

 

supersede
any prior agreements, written or oral, between the parties hereto related to the subject matter of this Release. 

	3.4
	This
Release may not be modified or amended except by an instrument in writing executed and delivered by each of the parties hereto.

	3.5
	The
respective representations and warranties of the parties contained herein shall survive the effective date of this Settlement Agreement and Release and shall continue until the
discharge of all obligations pursuant to this Agreement.

	3.6
	This
Release shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without reference to the rules in Delaware or elsewhere governing
choice of law.

	3.7
	This
Release shall be binding on and shall inure to the benefit of the parties, their respective successors and assigns.

	3.8
	This
Release is entered into for the sole benefit of Isis and Lilly. Nothing contained herein shall be construed or interpreted to create any third party beneficiary contract rights
in any other person.

	3.9
	This
Release may be executed in counterparts, copies of which may be transmitted by facsimile, and a facsimile copy of an executed counterpart shall be sufficient evidence of the
executed counterpart. The rights and obligations of each to the other shall be effective upon their execution of this Release. 

        IN
WITNESS WHEREOF, and intending to be legally bound hereby, we have hereunto set our hands this 5th day of June, 2003. 

	

 	
 	

 	

 
	 	 	ELI LILLY AND COMPANY
	

 	
 	

 	

 
	 	 	By:	/s/  CHARLES E. GOLDEN      

	

 	
 	

 	

 
	 	 	Title:	CFO, Executive Vice President

	

 	
 	

 	

 
	 	 	ISIS PHARMACEUTICALS, INC.
	

 	
 	

 	

 
	 	 	By:	/s/  B. LYNNE PARSHALL      

	

 	
 	

 	

 
	 	 	Title:	CFO, Executive Vice President

3

 
Exhibit A

Account Information

[***]  

4

 
Exhibit B

Raw Materials to be Returned to Lilly  

Isis
will ship to Lilly [***] kilograms each of the following [***]: 

[***] 

[***] 

[***] 

5

 
Exhibit C

Quality Agreement

[***]  

6

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Exhibit 10.2  

        CONFIDENTIAL TREATMENT REQUESTED

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

 
 

AMENDMENT NUMBER ONE TO
  DEVELOPMENT AND LICENSE AGREEMENT
  BETWEEN
  ELI LILLY AND COMPANY AND
  ISIS PHARMACEUTICALS, INC.    
    

        This Amendment Number One (the "Amendment") to the Development and License Agreement between Eli Lilly and Company ("Lilly") and ISIS Pharmaceuticals, Inc.
("ISIS"), effective August 14, 2001 (the "Agreement") is made effective as of June 5, 2003. 

	1.
	The
parties hereby mutually agree to amend the Agreement as follows: 

Exhibit C,
Development Plan, to the Agreement is hereby deleted in its entirety and replaced with the revised Exhibit C attached hereto. 

	2.
	In
consideration of the activities outlined in the revised Development Plan, and in satisfaction of all outstanding invoices and currently accrued payment due from either party to the
other related to the Agreement, Lilly agrees to pay ISIS the sum of [***] to be paid by Lilly to ISIS via wire transfer within ten (10) days of the effective date of
this Amendment. This payment constitutes the entire compensation for the Development Plan. Upon receipt of such payment, Isis will have no further claim against Lilly for any payment whatsoever under
either the original Exhibit C to the Agreement or the amended Exhibit C attached hereto. The parties agree that ISIS will not undertake any additional activity related to the Agreement
without the prior written consent of Lilly. ISIS waives its right to payment or reimbursement for any such activities undertaken without Lilly's prior consent. 

        IN
WITNESS WHEREOF, each of Lilly and ISIS have caused this Amendment to be signed by its duly authorized representatives. 

	

 	

 	
 	

 	

 
	ELI LILLY AND COMPANY	 	ISIS PHARMACEUTICALS, INC.
	

 	

 	
 	

 	

 
	By:	/s/  CHARLES E. GOLDEN      
	 	By:	/s/  B. LYNNE PARSHALL      

	

 	

 	
 	

 	

 
	Name:	Charles E. Golden
	 	Name:	B. Lynne Parshall

	

 	

 	
 	

 	

 
	Date:	June 3, 2003
	 	Date:	June 5, 2003

Exhibit C

Development Plan

[***]  

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AMENDMENT NUMBER ONE TO DEVELOPMENT AND LICENSE AGREEMENT BETWEEN ELI LILLY AND COMPANY AND ISIS PHARMACEUTICALS, INC.

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