Exhibit 10.4

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of June 4, 2004,
is made and entered into by and between Elan Pharmaceutical Investments II,
Ltd., a Bermuda exempted company limited by shares (the “Seller”), and Isis
Pharmaceuticals, Inc., a Delaware corporation (the “Purchaser”).

 

WHEREAS, the Seller is the owner of certain securities identified on Schedule A
(the “Securities”);

 

WHEREAS, the Seller desires to sell to the Purchaser and the Purchaser desires
to purchase from the Seller the Securities.

 

NOW, THEREFORE, in consideration of the premises and of the respective
representations, warranties, covenants, agreements and conditions contained
herein, the Purchaser and the Seller agree as follows:

 

1.  DEFINITIONS.  AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS SHALL HAVE THE
MEANINGS SET FORTH BELOW:

 

“Securities” has the meaning set forth in the recitals hereto.

 

“Purchase Price” means $500.

 

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

 

“Securities Act” means the United States Securities Act of 1933, as amended, and
the rules and regulations in effect from time to time thereunder.

 

2.  PURCHASE AND SALE OF THE SECURITIES; CLOSING.  THE PURCHASER AND THE SELLER
AGREE AS FOLLOWS:

 

(A)                                  PURCHASE AND SALE OF THE SECURITIES.  ON
THE BASIS OF THE REPRESENTATIONS AND WARRANTIES, AND SUBJECT TO THE TERMS AND
CONDITIONS, SET FORTH HEREIN, (I) THE SELLER AGREES TO SELL TO THE PURCHASER THE
SECURITIES SET FORTH ON SCHEDULE A, AND (II) THE PURCHASER AGREES TO PURCHASE
FROM THE SELLER THE SECURITIES SET FORTH ON SCHEDULE A.

 

(B)                                 CLOSING.  THE CLOSING (THE “CLOSING”) OF THE
PURCHASE AND SALE OF THE SECURITIES SHALL TAKE PLACE AT 10:00 A.M. ON JUNE 4,
2004 (THE “CLOSING DATE”) AT THE OFFICES OF CAHILL GORDON & REINDEL LLP, 80 PINE
STREET, NEW YORK, NEW YORK, OR AT SUCH OTHER PLACE AS THE PARTIES HERETO SHALL
MUTUALLY AGREE.  AT THE CLOSING, (I) THE SELLER SHALL DELIVER TO THE PURCHASER
CERTIFICATES REPRESENTING THE SECURITIES AND SUCH OTHER APPROPRIATE INSTRUMENTS
OF TRANSFER AND ASSIGNMENT (INCLUDING BLANK STOCK POWERS), AS THE PURCHASER
SHALL REASONABLY REQUEST PRIOR TO THE CLOSING DATE, IN ORDER TO

 

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VEST IN THE PURCHASER, AS OF THE CLOSING DATE, ALL OF THE SELLER’S RIGHT, TITLE
AND INTEREST IN, TO AND UNDER THE SECURITIES, AND (II) THE PURCHASER SHALL
DELIVER OR CAUSE TO BE DELIVERED TO THE SELLER, OR ITS AGENT, THE PURCHASE PRICE
IN IMMEDIATELY AVAILABLE FUNDS.

 

3.  CONDITIONS TO THE PURCHASER’S OBLIGATION.  THE OBLIGATION OF THE PURCHASER
TO PURCHASE AND PAY FOR THE SECURITIES IS SUBJECT TO THE SATISFACTION (OR WAIVER
BY PURCHASER) OF THE FOLLOWING CONDITIONS AS OF THE CLOSING DATE:

 

(A)                                  THE REPRESENTATIONS AND WARRANTIES OF THE
SELLER MADE IN THIS AGREEMENT SHALL BE TRUE AND CORRECT IN ALL RESPECTS, AS OF
THE DATE HEREOF AND AS OF THE CLOSING DATE AS THOUGH THEN MADE; AND

 

(B)                                 THE SELLER SHALL HAVE DELIVERED TO THE
PURCHASER THE DOCUMENTS OR INSTRUMENTS CONTEMPLATED BY SECTION 2(B) ABOVE.

 

4.  CONDITIONS TO THE SELLER’S OBLIGATION.  THE OBLIGATION OF THE SELLER TO SELL
AND DELIVER THE SECURITIES TO THE PURCHASER IS SUBJECT TO THE SATISFACTION (OR
WAIVER BY THE SELLER) OF THE FOLLOWING CONDITIONS AS OF THE CLOSING DATE:

 

(A)                                  THE REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER MADE IN THIS AGREEMENT SHALL BE TRUE AND CORRECT IN ALL RESPECTS, AS
OF THE DATE HEREOF AND AS OF THE CLOSING DATE AS THOUGH THEN MADE; AND

 

(B)                                 THE PURCHASER SHALL HAVE DELIVERED TO THE
SELLER THE PURCHASE PRICE.

 

5.  REPRESENTATIONS AND WARRANTIES OF PURCHASER.  THE PURCHASER REPRESENTS AND
WARRANTS TO THE SELLER THAT:

 

(A)                                  THE PURCHASER HAS ALL REQUISITE CORPORATE
POWER AND AUTHORITY TO ENTER INTO AND PERFORM THIS AGREEMENT AND TO CONSUMMATE
THE TRANSACTIONS CONTEMPLATED HEREBY.  THE PURCHASER HAS DULY AND VALIDLY
AUTHORIZED, EXECUTED AND DELIVERED THIS AGREEMENT.

 

(B)                                 THIS AGREEMENT CONSTITUTES A VALID AND
BINDING AGREEMENT OF THE PURCHASER, ENFORCEABLE AGAINST THE PURCHASER IN
ACCORDANCE WITH ITS TERMS, EXCEPT AS ENFORCEABILITY MAY BE LIMITED BY
(I) APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM, FRAUDULENT
CONVEYANCE OR OTHER SIMILAR LAWS RELATING TO OR AFFECTING CREDITORS’ RIGHTS
GENERALLY AND (II) GENERAL PRINCIPLES OF EQUITY (REGARDLESS OF WHETHER SUCH
ENFORCEABILITY IS CONSIDERED IN A PROCEEDING IN EQUITY OR AT LAW).

 

(C)                                  THE SECURITIES BEING ACQUIRED BY THE
PURCHASER HEREUNDER ARE BEING ACQUIRED FOR THE PURCHASER’S OWN ACCOUNT AND NOT
WITH THE VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF APPLICABLE SECURITIES LAWS.

 

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(D)                                 THE PURCHASER ACKNOWLEDGES THAT NEITHER THE
OFFER NOR SALE OF THE SECURITIES HAS BEEN REGISTERED UNDER THE SECURITIES ACT OR
ANY STATE OR FOREIGN SECURITIES OR “BLUE SKY” LAWS AND THAT THE SALE OF THE
SECURITIES IS BEING MADE PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT.  IN FURTHERANCE THEREOF, THE PURCHASER REPRESENTS AND WARRANTS
THAT IT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501 OF REGULATION D
UNDER THE SECURITIES ACT.

 

(E)                                  THE PURCHASER CONSENTS TO THE SALE,
TRANSFER OR OTHER DISPOSITION OF THE SERIES B CONVERTIBLE EXCHANGEABLE PREFERRED
STOCK OF THE PURCHASER CONTINGENT UPON THE SUCCESSFUL COMPLETION OF THE
TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT AND SELLER’S CONTINUED COMPLIANCE
WITH THE PROVISIONS OF SECTION 6(E) OF THIS AGREEMENT.  THIS CONSENT IS ONLY
EFFECTIVE IF, WHEN AND SO LONG AS THE PURCHASER OF THE SERIES B CONVERTIBLE
EXCHANGEABLE PREFERRED STOCK HAS AGREED IN WRITING TO THE FOLLOWING COVENANT:

 

“THE PURCHASER WILL IMMEDIATELY UPON EFFECTIVENESS OF THE CLOSING CONVERT THE
12,015 SHARES OF SERIES B CONVERTIBLE EXCHANGEABLE PREFERRED STOCK OF ISIS
PHARMACEUTICALS, INC., INCLUDED IN THE SECURITIES PURCHASED UNDER THIS
AGREEMENT, INTO 1,055,502 SHARES OF COMMON STOCK OF ISIS PHARMACEUTICALS, INC. 
ISIS PHARMACEUTICALS, INC. IS A THIRD PARTY BENEFICIARY TO THIS SECTION      AND
WILL BE ENTITLED TO ENFORCE THIS SECTION AGAINST PURCHASER, INCLUDING THROUGH
SPECIFIC PERFORMANCE.”

 

6.  REPRESENTATIONS AND WARRANTIES OF THE SELLER.  THE SELLER REPRESENTS AND
WARRANTS TO THE PURCHASER THAT:

 

(A)                                  THE SELLER HAS ALL REQUISITE CORPORATE
POWER AND AUTHORITY TO ENTER INTO AND PERFORM THIS AGREEMENT AND TO CONSUMMATE
THE TRANSACTIONS CONTEMPLATED HEREBY.  THE SELLER HAS DULY AND VALIDLY
AUTHORIZED, EXECUTED AND DELIVERED THIS AGREEMENT.

 

(B)                                 THIS AGREEMENT CONSTITUTES A VALID AND
BINDING AGREEMENT OF THE SELLER, ENFORCEABLE AGAINST THE SELLER IN ACCORDANCE
WITH ITS TERMS, EXCEPT AS ENFORCEABILITY MAY BE LIMITED BY (I) APPLICABLE
BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM, FRAUDULENT CONVEYANCE OR
OTHER SIMILAR LAWS RELATING TO OR AFFECTING CREDITORS’ RIGHTS GENERALLY AND
(II) GENERAL PRINCIPLES OF EQUITY (REGARDLESS OF WHETHER SUCH ENFORCEABILITY IS
CONSIDERED IN A PROCEEDING IN EQUITY OR AT LAW).

 

(C)                                  NO CONSENT, APPROVAL, QUALIFICATION, ORDER
OR AUTHORIZATION OF, OR FILING WITH, ANY LOCAL, STATE OR FEDERAL GOVERNMENTAL
AUTHORITY IS REQUIRED FOR THE CONSUMMATION BY THE SELLER OF THE TRANSACTIONS
CONTEMPLATED HEREBY, OTHER THAN THE PERMISSION OF THE BERMUDA MONETARY AUTHORITY
FOR THE SALE OF THE BERMUDA SECURITIES TO THE PURCHASER AS DETAILED HEREIN,
WHICH PERMISSION HAS BEEN OBTAINED.

 

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(D)                                 THE SELLER HAS GOOD AND MARKETABLE TITLE TO
THE SECURITIES THAT IT IS TRANSFERRING HEREUNDER, FREE AND CLEAR OF ANY LIENS,
CLAIMS, ENCUMBRANCES, CHARGES OR RESTRICTIONS OF ANY KIND (COLLECTIVELY,
“LIENS”).  UPON CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, THE
PURCHASER WILL HAVE ACQUIRED GOOD AND MARKETABLE TITLE IN AND TO THE SECURITIES,
FREE AND CLEAR OF ANY LIENS.

 

(E)                                  IF AND WHEN THE SELLER SELLS, TRANSFERS OR
OTHERWISE DISPOSES OF THE 12,015 SHARES OF SERIES B CONVERTIBLE EXCHANGEABLE
PREFERRED STOCK OF THE PURCHASER WHICH ARE OWNED BY THE SELLER, A CONDITION TO
SUCH SALE, TRANSFER OR DISPOSITION SHALL BE THAT THE ACQUIROR OF SUCH SHARES
WILL IMMEDIATELY CONVERT SUCH SHARES INTO SHARES OF COMMON STOCK OF THE
PURCHASER.

 

7.  APPLICABLE LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

 

8.  INVALIDITY OF PROVISIONS.  THE INVALIDITY OR UNENFORCEABILITY OF ANY
PROVISION OF THIS AGREEMENT IN ANY JURISDICTION SHALL NOT AFFECT THE VALIDITY OR
ENFORCEABILITY OF THE REMAINDER OF THIS AGREEMENT IN THAT JURISDICTION OR THE
VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT, INCLUDING THAT PROVISION, IN ANY
OTHER JURISDICTION.

 

9.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES.  THE REPRESENTATIONS AND
WARRANTIES CONTAINED HEREIN SHALL SURVIVE THE CLOSING OR ANY TERMINATION OF THIS
AGREEMENT FOR A PERIOD OF SIX MONTHS.

 

10.  HEADINGS; EXECUTION IN COUNTERPARTS.  THE HEADINGS AND CAPTIONS CONTAINED
HEREIN ARE FOR CONVENIENCE OF REFERENCE ONLY AND SHALL NOT CONTROL OR AFFECT THE
MEANING OR CONSTRUCTION OF ANY PROVISION HEREOF.  THIS AGREEMENT MAY BE EXECUTED
IN COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED TO BE AN ORIGINAL AND WHICH
TOGETHER SHALL CONSTITUTE BUT ONE AND THE SAME INSTRUMENT.

 

11.  NOTICES.  ALL NOTICES AND OTHER COMMUNICATIONS RELATING TO THIS AGREEMENT
SHALL BE DATED AND IN WRITING AND SHALL BE DEEMED TO HAVE BEEN DULY GIVEN WHEN
DELIVERED, IF DELIVERED PERSONALLY OR SENT BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, POSTAGE PREPAID, AND WHEN RECEIVED IF DELIVERED
OTHERWISE, TO THE PARTY TO WHOM IT IS DIRECTED;

 

(A)                                  IF TO THE SELLER, TO THE SELLER AT THE
FOLLOWING ADDRESS:

 

Elan Pharmaceutical Investments II, Ltd.
Clarendon House
Church Street
Hamilton, Bermuda
Attn:   President

 

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Fax:  (441) 292-2224

 

(B)                                 IF TO THE PURCHASER, TO THE PURCHASER AT THE
FOLLOWING ADDRESS:

 

Isis Pharmaceuticals, Inc.
2292 Faraday Avenue
Carlsbad, CA  92008-7298
Attn:  Grant Bryce, V.P. and General Counsel
Fax:  760-931-9639

 

 

12.  INTEGRATION.  THE PARTIES AGREE THAT THIS AGREEMENT CONTAINS THE ENTIRE
UNDERSTANDING BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF.

 

13.  THIRD PARTY BENEFICIARIES.  NOTHING EXPRESSED OR IMPLIED IN THIS AGREEMENT
IS INTENDED OR SHALL BE CONSTRUED TO CONFER UPON OR GIVE TO ANY THIRD PARTY ANY
RIGHTS OR REMEDIES AGAINST ANY PARTY HERETO.

 

14.  FURTHER ASSURANCES.  EACH OF THE PARTIES HERETO COVENANTS AND AGREES UPON
THE REQUEST OF THE OTHER, TO DO, EXECUTE, ACKNOWLEDGE AND DELIVER OR CAUSE TO BE
DONE, EXECUTED, ACKNOWLEDGED AND DELIVERED ALL SUCH FURTHER ACTS, DEEDS,
DOCUMENTS, ASSIGNMENTS, TRANSFERS, CONVEYANCES, POWERS OF ATTORNEY AND
ASSURANCES AS MAY BE REASONABLY NECESSARY OR DESIRABLE TO GIVE FULL EFFECT TO
THIS AGREEMENT.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Purchaser and the Seller have executed this Agreement as
of the date first above written.

 

 

 

ELAN PHARMACEUTICAL INVESTMENTS II,
LTD.

 

 

 

 

 

 

 

By:

  /s/ Kevin Insley

 

 

Name:

Kevin Insley

 

 

Title:

Vice President

 

 

 

 

 

 

 

ISIS PHARMACEUTICALS, INC.

 

 

 

 

 

 

 

By:

 

  /s/ B. Lynne Parshal

 

Name:

B. Lynne Parshall

 

Title: 

EVP & CFO

 

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Schedule A

 

2,388 Shares of common stock of Orasense Ltd.

 

2,388 shares of non-voting preferred stock of Hepasense Ltd.

 

Warrant to purchase 14,881 shares of common stock of Isis Pharmaceuticals, Inc.
at the price of $50.40 per share on or before April 11, 2005

 

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