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Exhibit 10.1  

        CONFIDENTIAL TREATMENT REQUESTED

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

 
 

SETTLEMENT, RELEASE, AND LICENSE GRANT AGREEMENT    
  

        This SETTLEMENT, RELEASE, AND LICENSE GRANT AGREEMENT (hereinafter the "Agreement") is made and entered into
effective on September 6, 2002, by and between Isis Pharmaceuticals, Inc. on the one hand and Sequitur, Inc. on the other hand. 

        Whereas, Isis Pharmaceuticals, Inc. is the owner of all rights, title and interest to United States Patent Number 6,001,653,
6,326,199, 5,959,097, 5,958,773, 6,043,090 and 6,096,543; 

        Whereas, on July 9, 2001, Isis Pharmaceuticals, Inc. instituted suit against Sequitur, Inc. in the United States
District Court for the Southern District of California, Case No. 01 CV 1223 B JFS (hereinafter the "First Action"), seeking injunctive relief and damages against Sequitur, Inc. based on
the allegation that Sequitur, Inc. was infringing U.S. Patent No. 6,001,653; 

        Whereas, Sequitur, Inc. denied all allegations of infringement in the First Action and Sequitur, Inc. further filed a
counterclaim alleging that it was entitled to declaratory judgment of non-infringement, invalidity and/or unenforceability, and alleging claims of breach of contract, unfair competition
under the Lanham Act, Antitrust Violations and unfair competition under California Law (the "Counterclaim"); 

        Whereas, Isis Pharmaceuticals, Inc. denied all allegations of breach of contract, unfair competition and antitrust violations in
the Counterclaim; 

        Whereas, on December 12, 2001, Isis Pharmaceuticals, Inc. instituted suit against Sequitur, Inc. in the United States
District Court for the Southern District of California, Case No. 01 CV 2286 B JFS (hereinafter the "Second Action"), seeking injunctive relief and damages against Sequitur, Inc. based on
the allegation that Sequitur, Inc. was infringing U.S. Patent No. 6,326,199; 

        Whereas, Sequitur, Inc. denied all allegations of infringement in the Second Action; 

        Whereas, on May 2, 2001, Isis Pharmaceuticals, Inc. instituted suit against Sequitur, Inc. in the United States
District Court for the Southern District of California, Case No. 02 CV 0842 B JFS (hereinafter the "Third Action"), seeking injunctive relief and damages against Sequitur, Inc. based on
the allegation that Sequitur, Inc. was infringing U.S. Patent Nos. 5,959,097, 5,958,773, 6,043,090 and 6,096,543; 

        Whereas, Sequitur, Inc. denied all allegations of infringement in the Third Action; and 

        Whereas, the parties to this Agreement deny any and all liability to one another, but desire to fully compromise and resolve all of the
claims between them arising from or in any way related to the First Action, Second Action, Third Action and the Counterclaim ("the Lawsuit"); 

        Now, Therefore, to reconcile their differences and in consideration of the promises and covenants and agreements contained herein, the
parties agree as follows: 

1.    Definitions. 

        1.1  Antisense Oligonucleotides. As used herein, the term "Antisense Oligonucleotides" means a sequence of nucleotides which
is designed to be complementary to and bind to a specific sequence of nucleotides in an mRNA target to inhibit production of the protein encoded by the target mRNA. 

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        1.2  Change of Control. As used herein, the term "Change in Control" shall be deemed to occur upon (i) the acquisition
of all or substantially all of the assets of Sequitur, Inc. or (ii) an acquisition of Sequitur, Inc. by another corporation or entity by consolidation, merger or other
reorganization in a transaction (or series of transactions) in which the holders of Sequitur, Inc.'s outstanding voting stock immediately prior to such transaction (or series of transactions)
own, immediately after such transaction
(or series of transactions), securities representing less than fifty percent (50%) of the voting power of the corporation or other entity surviving such transaction (or series of transactions). 

        1.3  Existing Customer. As used herein, the term "Existing Customer" means a customer of Sequitur's Target Validation Program,
whether inside or outside the U.S., to whom Sequitur has supplied or used on their behalf Antisense Oligonucleotides prior to June 30, 2002, as set forth in Exhibit A attached hereto. 

        1.4  First Generation Oligonucleotides. As used herein, the term "First Generation Oligonucleotides" means Antisense
Oligonucleotides having: phosphorothioate, phosphodiester, or mixed phosphorothiote/phosphodiester backbones; unmodified Adenine, Cytosine, Thymine, Guanine, bases; and, unmodified deoxy sugars. First
Generation Oligos may contain fluorescent dyes or other non-nucleotide end-blocks incorporated at either or both the 3' and 5' ends. 

        1.5  Isis. As used herein, the term "Isis" shall mean Isis Pharmaceuticals, Inc., and its successors in interest. 

        1.6  Isis First Generation Oligonucleotide Patents. As used herein, the term "Isis First Generation Oligonucleotide Patents"
means Patents owned by Isis on the Effective Date, including U.S. Patent No. 6,001,653, which have claims which read on First Generation Oligonucleotides. Isis First Generation Oligonucleotide
Patents does not include Isis Patents that claim specific nucleotide sequences, or Patents claiming oligonucleotides designed to inhibit specific genes identified in the patent, or methods of using
such oligonucleotides. 

        1.7  Next Generation Oligonucleotides. As used herein, the term "Next Generation Oligonucleotides" means Antisense
Oligonucleotides with a combination of 2' hydrogen and 2' modified sugars that elicit RNase H cleavage as a mechanism of action. 

        1.8  Patents. As used herein, the term "Patents" means all U.S. patents and patent applications, divisions, continuations,
reissues, re-examinations, extensions, supplementary protection, and any provisional applications, of any such patents or patent applications, and any foreign or international equivalent
of any of the foregoing. The term Patents includes the claim of any continuation-in-part, and any foreign or international equivalents of such
continuation-in-part, only to the extent that such claim is to an embodiment that does not include new matter. 

        1.9  Provide. As used herein, the term "Provide" will mean that Sequitur may supply Existing Customers with Next Generation
Oligonucleotides, which are presently in the possession of Sequitur. 

        1.10 Resupply. As used herein, the term "Resupply" will mean that Sequitur can have Trilink or another supplier make an
additional quantity of Next Generation Oligonucleotides to provide not more than 10mg of such Next Generation Oligonucleotides to an Existing Customer. 

        1.11 Sequitur. As used herein, the term "Sequitur" shall mean Sequitur, Inc. 

        1.12 Sequitur's Target Validation Program. As used herein, "Sequitur's Target Validation Program" shall mean internal use by
Sequitur, and/or provision by Sequitur to its customers (for internal use only, and not for resale), of Antisense Oligonucleotides, wherein such use or provision of Antisense Oligonucleotides by
Sequitur or use by its customers is for the purposes of 

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performing research regarding the validation or functionalization of gene targets or confirmation of such function. 

2.    Releases 

        2.1  Isis hereby releases, acquits and forever discharges Sequitur and each of its predecessors, successors, receivers,
assigns, affiliated entities, parent and subsidiary entities, past or present owners, shareholders, partners, investors, employees, agents, representatives, consultants, officers, directors, managers,
and any other person, firm or corporation acting by, through, under or in concert with it, from any and all claims, demands, actions, causes of action, suits, obligations, damages, restitution,
promises, controversies, contracts, agreements, expenses, costs, fees, and losses or liabilities of any type or nature whatsoever, in equity or at law, by statute or common law, whether or not now
known, suspected, disclosed, or claimed, whether or not now known, suspected, disclosed, or claimed, which Isis ever had, now has or claims to have against Sequitur, up to and including the Effective
Date of this Agreement, including but not limited to all claims for attorney's fees and costs. Isis also releases, acquits, and forever discharges Sequitur customers from claims of patent infringement
based on the use of oligonucleotides purchased from Sequitur under Sequitur's Target Validation Program that Isis ever had, now has or claims to have against such customers, up to and including the
Effective Date of this Agreement. 

        2.2  Sequitur hereby releases, acquits and forever discharges Isis, and each of its predecessors, successors, receivers,
assigns, affiliated entities, parent and subsidiary entities, past or present owners, shareholders, partners, investors, employees, agents, representatives, consultants, officers, directors, managers,
and any other person, firm or corporation acting by, through, under or in concert with it, from any and all claims, demands, actions, causes of action, suits, obligations, damages, restitution,
promises, controversies, contracts, agreements, expenses, costs, fees, and losses or liabilities of any type or nature whatsoever, in equity or at law, by statute or common law, whether or not now
known, suspected, disclosed, or claimed, which Sequitur ever had, now has or claims to have against Isis up to and including the Effective Date of this Agreement, including but not limited to all
claims for attorney's fees and costs. Without limiting the generality of the foregoing, Sequitur expressly agrees to withdraw, release, acquit and forever discharge Isis, and each of its predecessors,
successors, receivers, assigns,
affiliated entities, parent and subsidiary entities, past or present owners, shareholders, partners, investors, employees, agents, representatives, consultants, officers, directors, managers, and any
other person, firm or corporation acting by, through, under or in concert with it, from any and all claims for recovery of sanctions or contempt arising from or related to the Lawsuit. 

        2.3  Each Party understands and expressly waives any rights or benefits available under Section 1542 of the Civil Code
of California, which provides: 

"A
general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected
his settlement with the debtor." 

3.    Restrictions on Use 

        3.1  During the term of this Agreement,: 

        (a)  Sequitur will not make, have made, use, sell or offer to sell Next Generation Oligonucleotides in the United States;
Sequitur may or will, as indicated below, however, perform the following activities with regard to Next Generation Oligonucleotides as part of Sequitur's Target Validation Program and its obligations
hereunder: 

        (i)    Sequitur may Provide and Resupply to an Existing Customer any Next Generation Oligonucleotide ordered by Sequitur prior
to January 6, 2002; 

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        (ii)  Sequitur may Provide and Resupply to an Existing Customer any Next Generation Oligonucleotide that was purchased by
Sequitur for such Existing Customer or provided to such Existing Customer by Sequitur prior to June 30, 2002; 

        (iii) Sequitur may Provide and Resupply to an Existing Customer any Next Generation Oligonucleotide that is Provided to such
Existing Customer from Sequitur's stock of approximately 38 Next Generation Oligonucleotides which were ordered by Sequitur between January 4th, 2002 and June 30, 2002. Resupply will be
completed by December 31, 2002. Sequitur must inventory its Next Generation Oligonucleotides on a first in, first out basis, and may only have additional quantities of Next
Generation Oligonucleotides made for Resupply after it has depleted its currently on-hand stock of such Next Generation Oligonucleotides; 

        (iv)  Sequitur will provide to an independent Third Party, at Sequitur's expense a list of the currently existing Next
Generation Oligonucleotides referenced above, and a supplier of Sequitur's choice will confirm with such Third Party its ability to make such Next Generation Oligonucleotides for Sequitur; 

        (v)  Sequitur's agreement regarding restrictions on making, having made, using, selling or offering to sell use of Next
Generation Oligonucleotides under this Section will terminate 7 years from the Effective Date of this Agreement. After 7 years from the Effective Date of this Agreement, Isis will, from
time to time, give Sequitur a list of all patents and applications certified by Isis' patent counsel to cover Next Generation Oligonucleotides, and Sequitur agrees that it will not infringe valid
claims in issued patents covering Next Generation Oligonucleotides on such list; 

        (vi)  With regard to Sequitur's use or provision of Next Generation Oligonucleotides outside of the U.S., Sequitur agrees that
it will not infringe any valid issued claims of any Isis owned or controlled European patents covering Next Generation Oligonucleotides. If, in the opinion of Isis, Sequitur does infringe any such
patents outside the U.S., Isis may pursue any available legal remedy, and will not be bound by the Dispute Resolution provision of Section 15; and 

        (vii) Sequitur will use reasonable efforts to avoid infringing any Isis Patents. 

        (b)  Sequitur will not advertise Next Generation Oligonucleotides, or promote Sequitur's services with data generated through
the use of Next Generation Oligonucleotides after June 30, 2002; 

        (c)  Sequitur's Existing Customers may use Next Generation Oligonucleotides Provided and Resupplied by Sequitur hereunder as
part of Sequitur's Target Validation Program as expressly provided herein. Sequitur's Existing Customers may use Next Generation Oligonucleotides that were provided by Sequitur prior to
June 30, 2002 at any time. Sequitur's Existing Customers may use Next Generation Oligonucleotides Provided or Resupplied by Sequitur after June 30, 2002 until June 30, 2003. 

        3.2  If Isis licenses any supplier to provide Next Generation Oligonucleotides to functional genomics service providers
without restriction on resale (or to Sequitur specifically), Sequitur may buy Next Generation Oligonucleotides from such supplier. 

4.    Mutual Covenants 

        4.1  Isis and Sequitur each agree that it will not, and that its executive officers will not, disparage the other, the other's
products or patents, or act as an advisor or expert witness for third parties against the other at any time. 

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        4.2  Except as provided in Section 8.3, Isis and Sequitur each agree that for the period of 5 years from the
Effective Date it will not, and that its executive officers will not, discuss or characterize the First Action, Counterclaim, Second Action, Third Action or the subject matter thereof, in whole or in
part, other than by stating that "the litigation between the parties was settled on mutually satisfactory terms." 

5.    License Grants / Change of Control 

        5.1  Subject to the limitations and restrictions of Section 3.1, Isis hereby grants to Sequitur a
non-exclusive, non-sublicensable, non-transferable, license under Isis First Generation Oligonucleotide Patents, to make, have made, use, sell, or offer to sell,
First Generation Oligonucleotides solely for use in Sequitur's Target Validation Program. (For purposes of clarification, Sequitur's clients can use First Generation Oligonucleotides provided by
Sequitur for the purposes of performing research regarding the validation or functionalization of gene targets or confirmation of such function.) The license granted pursuant to this Section extends
to the termination of the last to expire licensed Patent, unless earlier terminated as provided herein. In the event of a Change of Control, the license granted in this Section 5.1 may be
transferred to the successor entity who assumes all of Sequitur's rights and obligations hereunder. 

        5.2  In the event of a Change of Control: 

a)    the
successor entity may maintain the Section 5.1 license by making the payments required in Section 6.1; 

b)    the
successor entity may complete the Section 3.1 concessions in accordance with their terms; and 

c)    the
Section 15 agreement to mediate will terminate. 

6.    Consideration 

        6.1  In consideration of (i) the releases and covenants set forth above, (ii) Isis' concessions regarding
Sequitur's use of certain Next Generation Oligonucleotides as set forth in Section 3.1, (iii) the license granted in Section 5.1, (iv) the right granted to Sequitur to
transfer the Section 5.1 license to the successor entity upon a Change of Control event, and (v) the agreement to mediate in Section 15.1 and the agreement to delay mediation in
Section 15.2 below, Sequitur will pay Isis the amount of [***]. 

        6.2  If Sequitur fails to make any [***] payment, the Section 5.1 license and the
Section 15 agreement to mediate will terminate. 

7.    Statement of Confirmation 

        7.1  Isis confirms that Integrated DNA Technologies, Inc. does not as of the Effective Date have a license or right
from Isis to supply Sequitur with Next Generation Oligonucleotides for use in Sequitur's Target Validation Program, and that Isis has not committed to provide such a license or right in the future. 

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   8.    Confidentiality and Publicity 

        8.1  Isis and Sequitur will not disclose to any third parties the terms and conditions of this Agreement without the prior
written consent of all parties hereto except as otherwise provided herein. 

        8.2  The parties shall be permitted to disclose this Agreement as required by law. Should discovery of this Agreement be
sought in a separate civil litigation, the parties shall be permitted to disclose this Agreement to certain qualified persons consented to by the non-producing party (either Sequitur or
Isis) and identified in a protective order entered in the separate action. 

        8.3  The parties shall be free to disclose that Isis and Sequitur have reached a mutually agreeable business solution which
settles the formerly disputed claims in the Lawsuit and Counterclaim, as set forth in the press release attached hereto as Exhibit B. 

        8.4  In the event that a third party requests due diligence on this Agreement, Sequitur may show the third party a version of
this Agreement with Section 6 redacted, under a Confidential Disclosure Agreement. 

        8.5  The parties shall be permitted to disclose the terms of this agreement to such of their employees who have a need to know
the terms hereof and who are bound by written obligation of confidentiality to the disclosing party. The parties may also disclose the terms of this agreement to their customers under the terms of
written confidentiality agreements. Section 6 will be redacted in any event of disclosure under this Section 8.5 and, in the case of Isis, Section 15.2 will also be redacted. 

9.    Disposition of Pending Lawsuits and Allocation of Costs 

        9.1  Isis and Sequitur agree, promptly upon execution of this Agreement, to execute and cause to be filed a Stipulation of
Dismissal of the Lawsuit, in the form attached hereto as Exhibit C. All parties' claims and counterclaims are dismissed with prejudice. 

        9.2  Each party will bear its own costs, expenses, expert witness fees, and attorneys' fees in connection with the Lawsuit and
with this Agreement. 

        9.3  This Agreement shall be governed by, and construed in accordance with, the laws of the State of California. 

        9.4  The parties consent to the jurisdiction and venue of the United States District Court for the Southern District of
California should any dispute arise between or among the parties concerning the interpretation and enforcement of this Agreement or the license grants hereunder not otherwise to be resolved by binding
mediation pursuant to Section 15. The parties agree to file a joint stipulated Order consenting to jurisdiction with the Court in the form of Exhibit D hereto within ten
(10) days of the Effective Date. 

        9.5  If the wording of Exhibits C and D cannot be agreed to by the Parties, Judge Stiven will resolve the differences. 

10.    Term and Termination 

        10.1 Term: 

a)    the
releases and covenants in this Agreement will not terminate; 

b)    the
Section 3.1 concessions will terminate in accordance with their terms; 

c)    the
section 5.1 license will terminate with the last to expire Patent or in accordance with the terms of Section 6; and 

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d)    the
Section 15 agreement to mediate will terminate in accordance with the terms of Sections 5.2 and 6.2. 

        10.2 Except as expressly provided herein, mediation (rather than termination) shall be the sole remedy for a breach of this
Agreement. 

11.    Agreement Binding On Successors 

        11.1 The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto, their permitted
heirs, administrators, successors and assigns, as noted below. 

12.    Nonassignability 

        12.1 The parties agree this Agreement imposes personal obligations on Isis and Sequitur. Sequitur shall not assign any rights
under this Agreement, except in the event of a Change of Control, without the written consent of Isis. Isis may not assign its rights hereunder without the written consent of Sequitur. However, the
releases and covenants are assigned to any successor in interest of either party. 

13.    Notices 

        13.1 Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed given if:
(i) delivered personally to an officer of the party to be notified; (ii) sent by facsimile transmission to the facsimile number set forth below; or (iii) sent by overnight courier
or United States registered or certified mail, postage prepaid, return receipt requested, to the address set forth below: 

If
to Isis: 

Isis
Pharmaceuticals, Inc.

2292 Faraday Avenue

Carlsbad, California 92008

Attention: Executive Vice President

Facsimile: (760) 603-4650 

with
a copy to: 

Attention:
General Counsel

Facsimile: (760) 268-4922 

If
to Sequitur: 

Sequitur, Inc.

14 Tech Circle

Natick, Massachusetts 01760

Attention: President

Facsimile: (508) 655-1625 

or
such other address or facsimile number as may be designated by any party hereto by written notice to the other as herein above provided. 

14.    Right to Review Records 

        14.1 From the date of execution of this Agreement until the end of the Term, Sequitur shall maintain records sufficient to
reflect its purchase, manufacture, use and sales of Antisense Oligonucleotides. The records shall be kept by Sequitur for a period of at least 2 years following the calendar year to which they
pertain. Isis will have the right to review these records as described below, solely for purposes of determining Sequitur's compliance with Section 3.1 of this Agreement regarding Next
Generation Oligonucleotides. 

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        14.2 Upon the written request of Isis, which shall be limited to no more than once per calendar year, Sequitur agrees to
provide to an independent reviewer designated by Isis and reasonably agreed to by Sequitur records sufficient to determine Sequitur's compliance with the Restrictions on Use set forth in
Section 3.1 of this Agreement. Sequitur shall not charge to produce the records, but Isis shall bear the costs for such review of records provided by Sequitur as provided above, unless the
results of such review establish a violation by Sequitur of Section 3.1 of this Agreement, in which case Sequitur shall bear the cost of such review. 

        14.3 All such records produced pursuant to a request in accord with Section 14.1 or 14.2 shall be considered and
maintained as confidential and shall not be disclosed to anyone except as provided
herein. Records produced by Sequitur in response to a request by Isis pursuant to this Section 14 shall not be disclosed to anyone other than Isis's independent reviewer. If Isis' reviewer
determines that a violation by Sequitur of Section 3.1 has occurred, records sufficient to establish such violation may be disclosed to a mediator pursuant to the Dispute Resolution provision
of Section 15. Mediation regarding any violation discovered according to the review of this Section will proceed immediately, and will not be subject to the provision of Section 15
requiring 45 days of negotiation by the business principals of Isis and Sequitur. 

15.    Dispute Resolution 

        15.1 Isis and Sequitur agree that any real or perceived violations of this Settlement Agreement or other alleged future
infringement of patents or future disputes regarding actions contemplated by this Agreement will be addressed in a face-to-face meeting of business principals of each company
who will attempt to resolve any such issue. Isis and Sequitur agree to negotiate in good faith for a period of up to 45 days the nature of the violation and/or infringement and the magnitude of
damages (if any). If Isis and Sequitur fail to reach agreement, the parties will submit to binding mediation to resolve the dispute. The mediator will be able to reasonably request documents from each
Party to enable decision-making and will decide the claim scope and validity of any patents (only in regard to Sequitur). If the mediator determines that Sequitur or Isis is infringing it will
immediately stop infringing. Notwithstanding the foregoing, if Sequitur has complied with Section 3.1 (vii) and, nevertheless, has infringed an Isis Patent, as long as Sequitur agrees to
cease such infringement immediately, there will be no damages for infringement that occurs within 120 days of issuance of the patent, or use of oligonucleotides synthesized prior to
120 days after the patent issuance. The mediator cannot impose a license. The mediator will be selected mutually by the parties at a mutually agreed location. Such mutual agreement must be
reached within two weeks. The mediator will be instructed that the parties desire to have the mediation process as inexpensive and rapid as possible consistent with achieving an accurate result and
informed decision. Any mediator must have no affiliation in the past or present with any party or their employees. The mediator will decide what discovery if any is needed (and the time to comply with
such discovery) and will have authority to obtain that discovery and impose penalties for non-compliance. All requests to the mediator will be made in letter format with no formal
requirements except that a copy must be sent to the other party. The parties submit to the authority of the mediator in the place of any court and will be bound by all decisions of the mediator
without recourse to any court or appeal therefrom. The mediator's decisions are final and if not followed may be enforced by a court of competent jurisdiction with all cost and attorney fees for such
enforcement being paid by the losing party. 

        15.2 [***] 

16.    Integration 

        16.1 The provisions contained herein constitute the entire understanding between the parties with respect to the subject
matter hereof, and revoke or supersede all prior Agreements between the parties with respect to the subject matter hereof, and is intended as a final expression of their 

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Agreement. This Agreement shall take precedence over any other documents that may be in conflict with said Agreement. 

17.    Effect of Headings 

        17.1 The headings and subheadings of the sections of this Agreement are inserted for convenience of reference only and shall
not control or affect the meaning or construction of any of the Agreements, terms, covenants and conditions of this Agreement in any manner. 

18.    Severability 

        18.1 If any term or provisions of this Agreement shall be found to be void or contrary to law, such term or provision shall,
but only to the extent necessary to bring this Agreement within the requirements of law, be deemed to be severable from the other terms and provisions hereof, and the remainder of this Agreement shall
be given effect as if the parties had not included the severed term herein. 

19.    Amendments 

        19.1 No provision of this Agreement may be modified, waived or amended except by written instrument duly executed by each of
the parties hereto and specifically referring to this Agreement. Any such modifications, waivers or amendments shall not require additional consideration to be effective. 

20.    Interpretation. 

        20.1 This Agreement, including the Exhibits hereto, is the result of bilateral negotiations between the parties and shall be
construed without regard to the party or parties responsible for its preparation. In resolving any ambiguity or uncertainty existing herein, the parties agree that no consideration or weight shall be
given to the identity of the party drafting this Agreement. 

21.    Counterparts 

        21.1 This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. 

The
parties have duly authorized and caused this Agreement to be executed as follows: 

	Dated: September 6, 2002	 	By:	 	/s/ Grantland E. Bryce,

VP, Legal and General Counsel
 Isis Pharmaceuticals, Inc.
	 	 	 	 	 
	

Dated: September 6, 2002	
 	

By:	
 	

/s/ Tod Woolf, President
 Sequitur, Inc.

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Exhibit A
  
    Sequitur's Existing Customers    
  

        [***] 

 
 

Exhibit B
  
    Press Release (attached as Exhibit 99.1 to 8-K)    
  

 
 

Exhibit C
  Stipulated Dismissal and Proposed Order Thereon (attached)    
  

 

STEPHEN P. SWINTON (106398)

KENT M. WALKER (173700)

COOLEY GODWARD LLP

4401 Eastgate Mall

San Diego, CA 92121-1909

Telephone: (858) 550-6000

Facsimile: (858) 550-6420 

JOSEPH
LUCCI (admitted pro hac vice)

WOODCOCK WASHBURN LLP

1 Liberty Place, 46th Floor

Philadelphia, PA 19103

Telephone: (215) 568-3100

Facsimile: (215) 568-3439 

Attorneys
for Plaintiff and Counterclaim Defendant

ISIS PHARMACEUTICALS, INC. 

RICHARD
WARBURG (155223)

ARTHUR A. WELLMAN, JR. (178309)

FOLEY & LARDNER

402 W. Broadway, 23rd Floor

San Diego, CA 92101-3542

Telephone: (619) 234-6655

Facsimile: (619) 234-3510 

Attorneys
for Defendant and Counterclaimant

SEQUITUR, INC. 

UNITED
STATES DISTRICT COURT 

SOUTHERN
DISTRICT OF CALIFORNIA 

	ISIS PHARMACEUTICALS, INC., a Delaware corporation,	 	No. 01 CV 1223, 01 CV 2286, and 02 CV 0842 B (JFS)
	

Plaintiff,	
 	
Stipulated Dismissal and [Proposed]

Order thereon
	

            v.	
 	

 
	

SEQUITUR, INC., a Delaware corporation,	
 	

 
	

Defendant.	
 	

 
	

And Related Counterclaims.	
 	

 
	

	
 	

 

        Plaintiff
and Counterclaim Defendant Isis Pharmaceuticals, Inc. and Defendant and Counterclaimant Sequitur, Inc., through their respective undersigned counsel, hereby
stipulate that all 

1

 

claims and counterclaims in the above-captioned actions are to be dismissed with prejudice, the parties bearing their own costs and fees of the actions. 

	Dated: September            , 2002	 	Respectfully submitted,
	

 	
 	

COOLEY GODWARD LLP

STEPHEN P. SWINTON (106398)

KENT M. WALKER (173700)
	

 	
 	

By:	
 	

 
	 	 	 	 	
 Kent M. Walker
	

 	
 	

Attorneys for Plaintiff and Counterclaim

Defendant, ISIS PHARMACEUTICALS, INC.
	Dated: September            , 2002	 	 	 	 
	 	 	FOLEY & LARDNER

RICHARD WARBURG (155223)

ARTHUR A. WELLMAN, JR. (178309)
	

 	
 	

By:	
 	

 
	 	 	 	 	
 Richard Warburg

Arthur A. Wellman, Jr.
	

 	
 	

Attorneys for Defendant and Counterclaimant SEQUITUR, INC.

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ORDER    
  

        Based on the stipulation of the parties, and good cause being shown, IT IS HEREBY ORDERED that all claims and counterclaims in the above-captioned actions are
dismissed with prejudice, the parties bearing their own costs and fees of the actions. 

        IT
IS SO ORDERED. 

	Dated: September            , 2002	 	 
	 	 	
 Judge Rudi M. Brewster

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Exhibit D
  Stipulated Consent to Jurisdiction and Proposed Order Thereon (attached)    
  

 

STEPHEN P. SWINTON (106398)

KENT M. WALKER (173700)

COOLEY GODWARD LLP

4401 Eastgate Mall

San Diego, CA 92121-1909

Telephone: (858) 550-6000

Facsimile: (858) 550-6420 

JOSEPH
LUCCI (admitted pro hac vice)

WOODCOCK WASHBURN LLP

1 Liberty Place, 46th Floor

Philadelphia, PA 19103

Telephone: (215) 568-3100

Facsimile: (215) 568-3439 

Attorneys
for Plaintiff and Counterclaim Defendant

ISIS PHARMACEUTICALS, INC. 

RICHARD
WARBURG (155223)

ARTHUR A. WELLMAN, JR. (178309)

FOLEY & LARDNER

402 W. Broadway, 23rd Floor

San Diego, CA 92101-3542

Telephone: (619) 234-6655

Facsimile: (619) 234-3510 

Attorneys
for Defendant and Counterclaimant

SEQUITUR, INC. 

UNITED
STATES DISTRICT COURT 

SOUTHERN
DISTRICT OF CALIFORNIA 

	ISIS PHARMACEUTICALS, INC., a Delaware corporation,	 	No. 01 CV 1223, 01 CV 2286, and 02 CV 0842 B (JFS)
	

Plaintiff,	
 	
Stipulated Consent to Jurisdiction

and [Proposed] Order thereon
	

            v.	
 	

 
	

SEQUITUR, INC., a Delaware corporation,	
 	

 
	

Defendant.	
 	

 
	

And Related Counterclaims.	
 	

 
	
	 	 

        Whereas
Plaintiff and Counterclaim Defendant Isis Pharmaceuticals, Inc. and Defendant and Counterclaimant Sequitur, Inc. executed a Settlement, Release, and License Grant
Agreement ("the Agreement") whereby the parties stipulated that all claims and counterclaims in the above-captioned actions are to be dismissed with prejudice, the parties bearing their own costs and
fees of the actions. 

        Whereas
in the Agreement the parties consented to the jurisdiction and venue of the United States District Court for the Southern District of California should any dispute arise between
or among the parties concerning the interpretation and enforcement of the Agreement or the license grants in the Agreement not otherwise to be resolved by binding mediation pursuant to
Section 15 of the Agreement. 

1

 

        Therefore,
the parties, by and through their respective attorneys of record, hereby stipulate to the following: 

        1.    The United States District Court for the Southern District of California shall retain continuing jurisdiction over, and
venue will be proper in, any dispute that may arise between or among the parties concerning the specific interpretation and enforcement of the Agreement and the license grants in the Agreement not
otherwise to be resolved by binding mediation pursuant to Section 15 of the Agreement. 

	Dated: September            , 2002	 	Respectfully submitted,
	

 	
 	

COOLEY GODWARD LLP

STEPHEN P. SWINTON (106398)

KENT M. WALKER (173700)
	 	 	By:	 	 
	 	 	 	 	
 Kent M. Walker
	

 	
 	

Attorneys for Plaintiff and Counterclaim

Defendant, ISIS PHARMACEUTICALS, INC.
	Dated: September            , 2002	 	 	 	 
	 	 	FOLEY & LARDNER

RICHARD WARBURG (155223)

ARTHUR A. WELLMAN, JR. (178309)
	

 	
 	

By:	
 	

 
	 	 	 	 	
 Richard Warburg

Arthur A. Wellman, Jr.
	

 	
 	

Attorneys for Defendant and Counterclaimant SEQUITUR, INC.

 
 

ORDER    
  

        Based on the stipulation of the parties, and good cause being shown, IT IS HEREBY ORDERED that the United States District Court for the Southern District of
California shall retain continuing jurisdiction over, and venue will be proper in, any dispute that may arise between or among the parties concerning the specific interpretation and enforcement of the
Agreement and the license grants in the Agreement not otherwise to be resolved by binding mediation pursuant to Section 15 of the Agreement. 

        IT
IS SO ORDERED. 

	Dated: September            , 2002	 	 
	 	 	
 Judge Rudi M. Brewster

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SETTLEMENT, RELEASE, AND LICENSE GRANT AGREEMENT

Exhibit A Sequitur's Existing Customers

Exhibit B Press Release (attached as Exhibit 99.1 to 8-K)

Exhibit C Stipulated Dismissal and Proposed Order Thereon (attached)

ORDER

Exhibit D Stipulated Consent to Jurisdiction and Proposed Order Thereon (attached)

ORDERQuickLinks
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EXHIBIT 10.109    
  

FIRST INVESTORS FINANCIAL SERVICES GROUP, INC.

2002 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN  

1.    Purpose of Plan  

        This
2002 Non-Employee Director Stock Option Plan (the "Plan") is intended to promote the interests of First Investors Financial Services Group, Inc., a Texas
corporation (the "Company"), and its Affiliates (as defined below) and stockholders by attracting and retaining qualified non-employee directors by giving them the opportunity to acquire a
proprietary interest in the Company and an increased personal interest in its continued success and progress. The rights to purchase shares of Common Stock (defined below) of the Company ("Options";
which term includes all options granted pursuant to this Plan, including the "Initial Option Grant", the "Automatic Option Grant", "Discretionary Options" and "Replacement Options", each as defined
below) granted under the Plan shall not be qualified as "incentive stock options" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended ("Code"). As used in this
Plan, the term "Affiliates" means any parent of the Company and any subsidiary of the Company within the meaning of Rule 12b-2 under the Securities Exchange Act of 1934, as amended. 

2.    Administration of the Plan  

        (a)  The
Board of Directors shall administer this Plan (the "Board"). The Board shall have full power and authority to determine the terms and provisions of respective option
agreements (which need not be identical) and to interpret the provisions and supervise the administration of this Plan. All decisions and selections made by the Board pursuant to the provisions of
this Plan shall be made by a majority of its members that are not participants in this Plan. Any decision reduced to writing and signed by all of the members shall be fully effective as if it had been
made by such a majority at a meeting duly held. 

        (b)  The
Board may provide that any Option granted under this Plan shall be subject to, and may not be exercised before, the approval of this Plan at an annual or special
meeting of the shareholders of the Company, by the affirmative vote of the holders of a majority of the outstanding shares of the Company present, or represented by proxy, and entitled to vote
thereat. 

        (c)  Subject
to the express provisions of this Plan, the Board shall have full authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating
to it, to determine the details and provisions of each option agreement evidencing an Option, and to make all other determinations necessary or advisable in the administration of the Plan including,
without limitation, the amending or altering of any Options granted hereunder as may be required to comply with any applicable federal or state laws or regulations or the rules of any exchange or
automated quotation system upon which the Company's Common Stock may be admitted to listing or traded from time to time. 

        (d)  No
member of the Board shall be liable to any person for any determination or other act or omission made in good faith with respect to the Plan or any Option. All
immunities and rights of indemnity available to members of the Board, pursuant to the Articles of Incorporation of the Company or otherwise, shall apply to any act or omission relating to the Plan or
any Option. 

3.    Designation of Participants  

        The
persons eligible for participation in this Plan are non-employee directors of the Company and its Affiliates ("Optionees"). 

 

4.    Stock Reserved  

        Subject
to adjustment as provided in Paragraph 10, a total of 500,000 shares of Common Stock, par value $.001 per share, of the Company ("Common Stock") shall be subject to this
Plan. The shares of Common Stock subject to this Plan shall consist of unissued shares or previously issued shares reacquired and held by the Company or its Affiliates, and such number of shares shall
be and is hereby reserved for sale for such purpose. Any of such shares which way remain unsold and which are not subject to outstanding Options at the expiration of this Plan shall cease to be
reserved for the purpose of this Plan, but until termination of this Plan and the expiration, exercise or lapse of all Options granted hereunder, the Company shall at all times reserve a sufficient
number of shares to meet the requirements of this Plan. Should any Option expire or be canceled prior to its exercise or relinquishment in full, the shares theretofore subject to such Option may again
be subject to an Option under this Plan, except that shares purchased pursuant to any Option or the portion thereof relinquished and not issued upon such relinquishment shall not again be available
for Options under this Plan. 

5.    Automatic and Discretionary Option Grants; Replacement Option Grants  

        Each
Optionee shall automatically be granted under the Plan an Option to purchase 20,000 shares of Common Stock ("Initial Option Grant") upon the approval of this Plan by the Company's
stockholders at the first annual meeting following the adoption hereof. Each Optionee shall, provided there are then sufficient shares of Common Stock available for grant hereunder, automatically be
granted a further Option to purchase 20,000 shares of Common Stock ("Automatic Option Grant") on the first July 15th (the "Automatic Grant Date") following his or her election as
a director and on each subsequent July 15th thereafter so long as he or she has served as a director of the Company during the preceding fiscal year and continues to serve as a
director as of the Automatic Grant Date. The Initial Option Grant
and each Automatic Option Grant shall vest in equal installments on each of first three anniversaries of the Automatic Grant Date. 

        The
Board may also grant Options ("Discretionary Options") under the Plan to Optionees based upon the annual financial performance of the Company. The Board shall determine the financial
performance criteria to be utilized, the methods employed to measure such performance, the number of shares underlying any grants that shall be made, the vesting schedule thereof, and all other terms
of such Options. If earned, Discretionary Options will be made on the July 15th first following the fiscal year in which earned. 

        For
convenience of administration, the Board may also issue under this Plan options to purchase Common Stock that replace options to purchase Common Stock issued to persons prior to the
adoption of this Plan ("Replacement Options"); provided, that the persons receiving any such Replacement Options are qualified to participate herein. In issuing any Replacement Options, the Board
shall have the same power and authority to establish its terms as in the case of Discretionary Options. 

6.    Option Price  

        (a)  The
purchase price of each share of Common Stock subject to an Option granted under this Plan shall not be less than the fair market value of such share on the date the
Option is granted. 

        (b)  The
fair market value of a share of Common Stock on a particular date shall be deemed to be the average of the reported "high" and "low" sales prices for such shares as
reported by NASDAQ, the National Quotation Bureau Incorporated, or another reputable reporting source selected by the Board (corrected for obvious typographical errors), or if such shares are not so
reported, then the average of 

2

 

the reported "high" and "low" sales prices on the largest national securities exchange (based on the aggregate dollar value of securities listed) on which such shares are listed or traded, or if such
shares are not listed or traded on any national securities exchange, then the average closing bid and asked prices reported by the National Quotation Bureau Incorporated, or, in all other cases, the
value established by the Board in good faith. 

7.    Option Period  

        Each
Option granted under this Plan shall terminate and be of no force and effect with respect to any shares not previously taken up by the Optionee upon the expiration of ten years from
the date of granting of such Option or such earlier date as the Board, in its sole discretion, may prescribe at the date of grant. 

8.    Exercise of Options; Disposition of Common Stock  

        (a)  The
Board, in granting Options hereunder, shall have discretion to determine the terms upon which such Options shall be exercisable, subject to the applicable provisions
of this Plan. The Board may determine to permit any Option granted hereunder to be exercisable in whole at any time or in specified installments from time to time. 

        (b)  Options
may not be transferred and shall be exercised solely by the Optionee during his lifetime or after his death by the person or persons entitled thereto under the
Optionee's will or the laws of descent and distribution. 

        (c)  The
purchase price of the shares as to which an Option is exercised shall be paid in full at the time of the exercise. Such purchase price shall be payable in cash or at
the option of the holder of such Option, with the consent of the Board, in Common Stock theretofore owned by such holder (or any combination of cash and Common Stock). For purposes of determining the
amount, if any, of the purchase price satisfied by payment of Common Stock, such Common Stock shall be valued at its fair market value on the date of exercise in accordance with Paragraph 6(b).
Any Common Stock delivered in satisfaction of all or a portion of the purchase price shall be appropriately endorsed for transfer and assigned to the Company. The Board may, in its discretion and to
the extent permitted by the laws of the State of Texas, determine to permit the holder of an Option to satisfy the purchase price of the shares as to which an Option is exercised by delivery of the
Option holder's promissory note, such note to be subject to such terms and conditions as the Board may determine. The Board may, in its discretion and to the extent permitted by the laws of the State
of Texas, determine to cause the Company to lend to the holder of an Option funds, on such terms and conditions as the Company may determine to be appropriate, sufficient for the holder of an Option
to pay the purchase price of the shares as to which such Option is to be exercised. No holder of an Option shall be, or have any of the rights or privileges of, a shareholder of the Company in respect
of any shares purchasable upon the exercise of any part of an Option unless and until certificates representing such shares shall have been issued by the Company to such holder. 

        (d)  Unless
waived by the Board, which it may give or withhold in its sole discretion and without liability, the holder of any Option shall not make any disposition of any
share or shares of Common Stock issued to him pursuant to his exercise of an Option granted under this Plan within six months follow the grant of such Option, except by will or the laws of descent and
distribution. 

9.    Relinquishment of Options; Assignment  

        (a)  The
Board, in granting Options hereunder, shall have discretion to determine whether or not Options shall include a right of relinquishment as hereinafter provided by
this Paragraph 9. The Board 

3

 

shall also have discretion to determine whether an option agreement evidencing an Option initially granted by the Board without a right of relinquishment shall be amended or supplemented to include
such a right of relinquishment. Neither the Board nor the Company shall be under any obligation or incur any liability to any person by reason of the Board's refusal to grant or include a right of
relinquishment in any Option granted hereunder or in any option agreement evidencing the same. Subject to the Board's determination in any case that the grant by it of a right of relinquishment is
consistent with Paragraph 1 hereof, any Option granted under this Plan, and the option agreement evidencing such Option, may provide: 

        (i)    That
the Optionee, or his heirs or legal representatives to the extent entitled to exercise the Option under the terms thereof, in lieu of purchasing the entire number
of shares subject to purchase thereunder, shall have the right to relinquish all or any part of the then unexercised portion of the Option (to the extent then exercisable) for a number of shares of
Stock, for an amount of cash or for a combination of Stock and cash to be determined in accordance with the following provisions of this clause (i): 

        (A)  the
written notice of exercise of such right of relinquishment shall state the percentage, if any, of the Appreciated Value (as defined below) that the Optionee elects
to receive in cash ("Cash Percentage"), such Cash Percentage to be in increments of 10% of such Appreciated Value up to 100% thereof; 

        (B)  the
number of shares of Stock of the Company, if any, issuable pursuant to such relinquishment shall be the number of such shares, rounded to the next greater number of
full shares, as shall be equal to the quotient obtained by dividing (x) the difference between (1) the Appreciated Value and (2) the result obtained by multiplying the Appreciated
Value and the Cash Percentage by (y) the then current market value per share of the Stock; 

        (C)  the
amount of cash payable pursuant to such relinquishment shall be an amount equal to the Appreciated Value less the aggregate current market value of the Stock issued
pursuant to such relinquishment, if any, which cash shall be paid by the Company subject to such conditions as are deemed advisable by the Board to permit compliance by the Company with the
withholding provisions applicable to employers under the Code and any applicable state income tax laws; and 

        (D)  for
the purposes of this clause (i), "Appreciated Value" means the excess of (x) the aggregate current market value of the shares of Stock covered by the
Option or the portion thereof to be relinquished over (y) the aggregate purchase price for such shares specified in such Option; 

        (ii)  that
such right of relinquishment may be exercised only upon receipt by the Company of a written notice of such relinquishment which shall be dated the date of election
to make such relinquishment; and that, for the purposes of this Plan, such date of election shall be deemed to be the date when such notice is sent by registered or certified mail, or when receipt is
acknowledged by the Company, if mailed by other than registered or certified mail or if delivered by hand or by any telegraphic communications equipment of the sender or otherwise delivered; provided,
that, in the event the method just described for determining such date of election shall not be or remain consistent with the provisions of Section 16(b) of the Exchange Act or the rules and
regulations adopted by the Commission thereunder, as presently existing or as may be hereafter amended, which regulations exempt from the operation of Section 16(b) of the Exchange Act in whole
or in part any such relinquishment transaction, then such date of election shall be determined by such other method consistent with Section 16(b) of the Exchange Act or the rules and
regulations thereunder as the Board shall in its discretion select and apply; 

4

 

        (iii)  that
the "current market value" of a share of Common Stock on a particular date shall be deemed to be its fair market value on that date as determined in accordance
with Paragraph 6(b); and 

        (iv)  that
the Option, or any portion thereof, may be relinquished only to the extent that (A) it is exercisable on the date written notice of relinquishment is
received by the Company, (B) the Board, subject to the provisions of Paragraph 9(b), shall consent to the election of the holder to relinquish such Options in whole or in part for cash
or for shares of Common Stock equal to all or some portion of the Appreciated Value as set forth in such written notice of relinquishment and (C) the holder of such Option pays, or makes
provisions satisfactory to the Company for the payment of, any taxes which the Company is obligated to collect with respect to such relinquishment. 

        (b)  The
Board shall have sole discretion to consent to or disapprove, and neither the Board nor the Company shall be under any liability by reason of the Board's disapproval
of, any election by a holder
of an Option to relinquish such Option in whole or in part for cash or for shares of Common Stock equal to all or some portion of the Appreciated Value as provided in Paragraph 9(a). 

        (c)  The
Board, in granting Options hereunder, shall have discretion to determine the terms upon which such Options shall be relinquished, subject to the applicable
provisions of this Plan, and including such provisions as are deemed advisable to permit the exemption from the operation from Section 16(b) of the Exchange Act of any such relinquishment
transaction, and Options outstanding, and option agreements evidencing such Options, may be amended, if necessary, to permit such exemption. If an Option is relinquished, such Option may be deemed to
have been exercised to the extent of the number of shares of Common Stock covered by the Option or part thereof which is relinquished, and no further Options may be granted covering such shares of
Common Stock. 

        (d)  Neither
any Option nor any right to relinquish the same to the Company as contemplated by this Paragraph 9 shall be assignable or otherwise transferable except by
will or the laws of descent and distribution. 

        (e)  Unless
waived by the Board, which it may give or withhold in its sole discretion and without liability, no right of relinquishment may be exercised within the first six
months after the initial award of any Option containing, or the amendment or supplementation of any existing option agreement adding, the right of relinquishment, except by will or the laws of descent
and distribution. 

10.    Stock Dividends, Stock Splits and Certain Other Corporate Transactions  

        (a)  The
existence of this Plan and Options granted hereunder shall not affect the right or power of the Company or its shareholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures or
preferred or preference stocks ranking prior to or affecting the Common Stock or the rights attendant thereto, or the dissolution or liquidation of the Company, or any sale or transfer of all or any
part of the Company's assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 

        (b)  The
shares with respect to which Options may be granted hereunder are shares of Common Stock of the Company as presently constituted. If, and whenever, prior to the
delivery by the Company of all of the shares of the Common Stock which are subject to Options granted hereunder, the Company shall effect a subdivision or consolidation of shares or other capital
readjustment, the payment of a stock dividend, a stock split, a combination of shares, a recapitalization or other increase or reduction of the number of shares of the Common Stock outstanding without
receiving consideration therefor in
money, services or property, the number of shares of Stock available under this Plan and the number of shares of Stock with respect to which Options granted hereunder may thereafter be 

5

 

exercised, shall, (i) in the event of an increase in the number of outstanding shares, be proportionately increased, and the exercise price payable per share shall be proportionately reduced,
and (ii) in the event of a reduction in the number of outstanding shares, be proportionately reduced, and the exercise price payable per share shall be proportionately increased. 

        (c)  If
the Company is reorganized, merged or consolidated or is otherwise a party to a plan of exchange with another corporation pursuant to which reorganization, merger,
consolidation or plan of exchange shareholders of the Company receive any shares of Common Stock or other securities or if the Company shall distribute ("Spin off") securities of another corporation
to its shareholders, there shall be substituted for the shares subject to the unexercised portions of outstanding Options an appropriate number of shares of (i) each class of stock or other
securities which were distributed to the shareholders of the Company in respect of such shares in the case of a reorganization, merger, consolidation or plan of exchange, or (ii) in the case of
a Spin Off, the securities distributed to shareholders of the Company together with shares of Common Stock, such number of shares or securities to be determined by the Board of Directors; provided,
however, that all such Options may be canceled by the Company as of the effective date of (x) a reorganization, merger, consolidation, plan of exchange or Spin Off or (y) any dissolution
or liquidation of the Company, by giving notice to each holder thereof or his personal representative of its intention to do so and by permitting the purchase for a period of at least thirty days
during the sixty days next preceding such effective date of all of the shares subject to such outstanding Options, without regard to any installment provisions set forth in the option agreement; and
provided further that in the event of a Spin Off, the Company may, in lieu of substituting securities or accelerating and canceling Options as contemplated above, elect (i) to reduce the
purchase price for each share of Stock subject to an outstanding Option by an amount equal to the fair market value, as determined in accordance with the provisions of Paragraph 6(b), of the
securities distributed in respect to each outstanding share of Common Stock in the Spin Off or (ii) to reduce proportionately the purchase price per share and to increase proportionately the
number of shares of Stock subject to each Option in order to reflect the economic benefits inuring to the shareholders of the Company as a result of the Spin Off. 

        (d)  Except
as hereinabove expressly provided, the issue by the Company of shares of stock of any class, or securities convertible into or exchangeable for shares of stock of
any class, for cash or property, or for labor or services, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the
Company convertible into or exchangeable for shares of stock of any class shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Common Stock
subject to Options granted hereunder. 

11.    Purchase for Investment  

        Unless
the offering of the Options and shares of Common Stock covered by this Plan have been registered under the Securities Act of 1933, as amended, or the Company has determined that
such registration is unnecessary, each person exercising an Option under this Plan may be required by the Company to (i) give a representation in writing that he is acquiring such shares for
his own account for investment and not with a view to, or for sale in connection with, the distribution of any part thereof, (ii) agree in writing not to sell or otherwise dispose of such
shares without registration in the absence of an opinion of counsel satisfactory to the Company that such registration is not required; and (iii) agree that the certificate or certificates
evidencing such shares may bear restrictive legends to the foregoing effect. 

6

 

12.    Taxes  

        (a)  The
Company may make such provisions as it may deem appropriate for the withholding of any taxes which it determines is required in connection with any Options granted
under this Plan. 

        (b)  Notwithstanding
the terms of Paragraph 12(a), any Optionee may pay all or any portion of the taxes required to be withheld by the Company or paid by him in
connection with the exercise of an Option by election to have the Company withhold shares of Stock, or by delivering previously owned shares of Common Stock, having a fair market value, determined in
accordance with Paragraph 6(b), equal to the amount required to be withheld or paid. An Optionee must make the foregoing election on or before the date that the amount of tax to be withheld is
determined ("Tax Date"). All such elections are irrevocable and subject to disapproval by the Board in its sole discretion. Elections by persons who are subject to the short-swing profits recapture
provisions of Section 16(b) of the Exchange Act ("Covered Optionee") are subject to the additional restriction that such election may not be made within six months of a grant of an Option,
unless waived by the Board, which it may give or withhold in its sole discretion and without liability. Where the Tax Date in respect of an Option is deferred until six months after exercise and the
Covered Optionee elects share withholding, the full amount of shares of Common Stock will be issued or transferred to him upon exercise of the Option, but he shall be unconditionally obligated to
tender back to the Company the number of shares necessary to discharge the Company's withholding obligation or his estimated tax obligation on the Tax Date. 

13.    Effective Date of Plan  

        This
Plan shall be effective as of September 10, 2002. 

14.    Amendment or Termination  

        The
Board may amend, alter or discontinue this Plan, except that no amendment or alteration shall be made which would impair the rights of any Optionee under any Option theretofore
granted, without his consent. 

15.    Government Regulations  

        This
Plan, and the grant and exercise of Options thereunder, and the obligation of the Company to sell and deliver shares under such Options, shall be subject to all applicable laws,
rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. 

*** 

        Approved
by the Board of Directors of First Investors Financial Services Group, Inc., on July 18, 2002. 

***

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EXHIBIT 10.109

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