Exhibit 10.4

 

AMENDED AND RESTATED ISIS PHARMACEUTICALS, INC.
10B5-1 TRADING PLAN

 

This Amended and Restated 10b5-1 Trading Plan, (the “Trading Plan”), between
ISIS PHARMACEUTICALS, INC. (“Isis”) and INSIGHT SECURITIES, INC. (“Broker”), is
entered into effective September 12, 2013 (the “A&R Effective Date”).  As of the
Effective Date, this Trading Plan amends, restates and supersedes the previous
10b5-1 Trading Plan dated September 13, 2007 between Isis and Broker. 
Capitalized terms not otherwise defined herein will have the meanings given to
them in Exhibit A attached hereto.

 

1.             Recitals.

 

(a)           This Trading Plan is entered into between Isis and Broker for the
purpose of establishing a trading plan that complies with the requirements of
Rule 10b5-1(c) under the Exchange Act.

 

(b)           The purpose of this Trading Plan is to provide a mechanism by
which eligible Sellers can orderly dispose of a portion of each Seller’s
holdings of Stock, including Stock that such Seller has the right to acquire
under the Options.

 

(c)           Isis and Broker hereby agree as follows:

 

2.             Appointment.  Isis hereby appoints and authorizes Broker to sell
shares of Stock pursuant to the terms and conditions set forth below and in the
applicable Sellers Plan.  Subject to the terms and conditions set forth below,
Broker hereby accepts such appointment.

 

3.             Sellers Plans.  Each Seller may establish up to three individual
Sellers Plans with Broker in any Sales Period. For clarity, Sellers Plans
pursuant to which all Plan shares have been sold will still count against the
limit prohibiting more than three Sellers Plans in any Sales Period. In
connection with such Sellers Plans, each Seller will establish an account at
Broker in the name of and for the benefit of Seller (the “Plan Account”).  Sales
under each Sellers Plan cannot begin until the Broker receives (i) the Plan
Shares (including any shares issued pursuant to restricted stock units), to the
extent such Plan Shares are currently owned by Seller, (ii) a properly executed
Seller Representation Letter and (iii) a properly completed and executed Sellers
Plan, including an acknowledgment by Isis.

 

4.             Obligations of Broker.  With respect to each Sellers Plan, Broker
will have the following obligations:

 

(a)           Broker will sell the Plans Shares for the account of each Seller
according to the terms of the Seller’s Sellers Plan.

 

(b)           Broker will not sell any Stock when broker is in possession of any
material nonpublic information concerning Isis or its securities.

 

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(c)           Once a Sellers Plan becomes effective, Broker will not allow
Seller to exercise, any influence over how, when or whether to effect sales of
Stock pursuant to the Sellers Plan.

 

(d)           Broker will withdraw Stock from Seller’s Plan Account in order to
effect sales of Stock under Seller’s Sellers Plan.  Broker will exercise Options
in accordance with the instructions set forth in the applicable Sellers Plan.

 

(e)           Broker will deliver the proceeds from each sale of unrestricted
Stock effected under a Sellers Plan to Seller’s Account on a normal three-day
settlement basis less any commission, commission equivalent, mark-up or
differential and other expenses of sale to be paid to Broker.  With respect to
each sale of restricted Stock, Broker will deliver the net proceeds from such
sales as soon as reasonably practicable.

 

(f)            Broker will, in connection with the exercise of Options, remit to
Isis the exercise price thereof along with such amounts as may be necessary to
satisfy withholding obligations. These amounts will be deducted from the
proceeds of the sale of the Stock.

 

(g)           To the extent that any Stock remains in the Plan Account upon
termination of the Sellers Plan, Broker agrees to return such Stock promptly to
the Seller.

 

(h)           Broker agrees to conduct all sales pursuant to each Sales Plan in
accordance with the manner of sale requirement of Rule 144 of the Securities Act
and in no event will Broker effect any sale if such sale would exceed the
then-applicable amount limitation under Rule 144 or will violate the
“short-swing profit” provisions of Section 16 of the Exchange Act.  Broker will
file Forms 144 on behalf of Seller as required by applicable law.

 

(i)            Promptly after each Sale, Broker will advise Seller in writing as
to the number of shares of Stock sold, the date of each sale and the sales
price.  In addition, if a Seller is an officer of Isis who is subject to the
reporting requirements of Section 16 under the Exchange Act, then Broker will
provide Isis’ stock administrator the details of each Trade for such Seller
within 1 business day of such Trade, including the number of Plan Shares sold,
the applicable sales price and any Options exercised to complete such Sale.

 

(j)            Broker will suspend or terminate a Sellers Plan and cancel any
pending sale upon notice from Isis of a Suspension Event (such notice to specify
termination or suspension of the Sellers Plan).  In the event of a suspension,
Broker will cancel any open orders for sales of Plan Shares and will cease
placing orders for Sales of Plan Shares under the Sellers Plan until Broker
receives written notice from Isis stating that the relevant Suspension Event is
no longer in effect.  Upon Broker’s receipt of notice from Isis, Broker may
resume placing orders for sales of the Plan Shares in accordance with the terms
and conditions of this Trading Plan and the applicable Sellers Plan; provided,
however, that Broker will not reinstate any orders cancelled due to a suspension
and will not place any orders that would have been placed during the suspension.

 

(k)           Broker will not sell more than an aggregate of 50,000 shares on
any single Trading Day for any individual Seller (including such Seller’s
trusts, spouse, or immediate family members) under all the Sellers Plans
established by such Seller.  Notwithstanding the

 

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foregoing, Broker may sell more than this specified limit if (i) such sale is
reasonably necessary to facilitate the exercise of Options that will expire
within three Trading Days of such sale and (ii) the Company’s Chief Operating
Officer has authorized such a trade according to the notice provisions below.

 

(l)            Unless a Seller’s Sellers Plan explicitly instructs Broker to do
otherwise, or Isis’ COO or General Counsel approves otherwise, if Broker
exercises an option because such Option was about to expire, Broker must sell
the shares of Stock issued upon the exercise of such Option within 5 Trading
Days of exercise at the then prevailing market price for the Stock, regardless
of the Minimum Sales Prices set forth in the applicable Sellers Plan.

 

5.             Termination; Amendment.

 

(a)           Trading Plan.  This Trading Plan may be Terminated by Isis at any
time upon written notice to Broker.  The parties hereto may amend this Trading
Plan in writing by mutual written agreement.

 

(b)           Voluntary Termination of Sellers Plan.  Seller may terminate a
Sellers Plan only during the last five Trading Days of a Sales Period by
providing Broker and Isis advance written notice.  The terminations will become
effective at 5:00pm Pacific on the last day of the applicable Sales Period in
which proper termination notice was given.

 

(c)           Automatic Termination of Sellers Plan.  An applicable Sellers Plan
will automatically terminate on any of the following dates:  (i) the date Broker
is required to terminate the Sellers Plan under Section 4(j) of this Trading
Plan, (ii) the 90th day following the date Broker receives notice of the death
of the Seller or of Seller’s termination from Isis, (iii) the date Isis or any
other entity publicly announces a tender or exchange offer with respect to the
Stock or a merger or acquisition of Isis, or (iv) the date Broker receives
notice of the commencement or impending commencement of any proceeding relating
to or triggered by Seller’s bankruptcy or insolvency.

 

(d)           Termination For Breach.  Isis may terminate a Sellers Plan
immediately upon the breach of a representation or covenant contained in the
applicable Seller’s Seller Representation Letter.

 

(e)           No Amendment of Sellers Plan.  Seller may not amend a Sellers
Plan.

 

6.             General.

 

(a)           The prices and share amounts set forth in this Trading Plan and in
each Sellers Plan will be automatically adjusted on a proportionate basis to
take into account any stock split, stock dividend or any change in the
capitalization similarly affecting Isis’ Stock that occurs during the Sales
Period.

 

(b)           This Trading Plan, including exhibits, constitutes the entire
agreement between the parties with respect to this Trading Plan and supercedes
any prior agreements or understandings between the parties with regard to the
Trading Plan.

 

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(c)           Any notice required to be given under this Trading Plan or a
Sellers Plan will be addressed to the relevant party at the address set forth
below.

 

To Broker:

 

InSight Securities, Inc.

 

 

2511 Garden Road, Suite C-225

 

 

Monterey, CA 93940

 

 

Attn: Peter Albano

 

 

Fax: (831) 648-1951

 

 

Phone: (866) 648-8010

 

 

 

w/copy to:

 

 

 

 

InSight Securities, Inc.

 

 

Attn: Carlos J. Legaspy

 

 

2610 Lake Cook Road, Suite 190

 

 

Riverwoods, IL 60015

 

 

Fax:  (224) 632-4592

 

 

Phone:  (224) 632-4700

 

 

 

To Isis:

 

Isis Pharmaceuticals, Inc.

 

 

2855 Gazelle Court

 

 

Carlsbad, CA 92010

 

 

Attn: Chief Operating Officer

 

 

Fax:

760-268-4922

 

 

Phone:

760-603-2460

 

 

 

with copies to:

 

Linda Powell

 

 

Fax:

760-918-3593

 

 

 

To Seller:

 

The contact information specified in the applicable Seller Representation
Letter.

 

Notice will be deemed sufficiently given for all purposes upon the earlier of: 
(a) the date of actual receipt; (b) if mailed, three (3) calendar days after the
date of postmark; (c) if delivered by overnight courier, the next business day
such overnight courier regularly makes deliveries; or (d) if sent by facsimile,
when the sender’s facsimile system generates a message confirming successful
transmission of the total number of pages of the notice unless, within one
business day after the transmission, the recipient informs the sender that the
recipient has not received the entire notice.

 

(d)           This Trading Plan may be signed in counterparts, each of which
will be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.

 

(e)           If any provision of this Trading Plan is or becomes inconsistent
with any applicable present or future law, rule or regulation, that provision
will be deemed modified or, if

 

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necessary, rescinded in order to comply with the relevant law, rule or
regulation.  All other provisions of this Trading Plan will continue and remain
in full force and effect.

 

(f)            This Trading Plan and any Sellers Plan is not an employment
contract and nothing in such plans will create in any way whatsoever any
obligation on a Seller’s part to continue in the employ of Isis, or of Isis to
continue Seller’s employment with Isis.

 

(g)           In the event of any conflict between the provisions of a Sellers
Plan and those of this Trading Plan, the provisions of this Trading Plan will
control.  Isis’ General Counsel has the power to construe and interpret this
Trading Plan and any Sellers Plan, and to establish, amend and revoke rules for
its administration.  Isis’ General Counsel in the exercise of this power may
correct any defect, omission or inconsistency in this Trading Plan or any
Sellers Plan.

 

(h)           The parties’ rights and obligations under this Trading Plan will
bind and inure to the benefit of their respective successors, heirs, executors,
and administrators and permitted assigns.

 

IN WITNESS WHEREOF, the undersigned have entered into this Trading Plan as of
the date first written above.

 

 

ISIS PHARMACEUTICALS, INC.

 

 

 

 

 

/s/ B. Lynne Parshall

 

B. Lynne Parshall

 

Chief Operating Officer

 

 

 

 

 

INSIGHT SECURITIES, INC.

 

 

 

 

 

/s/ Carlos J. Legaspy

 

Carlos J. Legaspy

 

President

 

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EXHIBIT A

DEFINITIONS

 

“Daily Sales Amount” has the meaning set forth in the applicable Sellers Plan.

 

“Effective Date” means, with respect to a Sellers Plan, the date the Seller
Representation Letter was executed by Seller and accepted by Broker.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Options” means the outstanding stock options issued by Isis listed in the
applicable Sellers Plan.

 

“Minimum Sales Price” has the meaning set forth in the applicable Sellers Plan.

 

“Plan Shares” means (i) the Stock and (ii) the Stock issuable upon exercise of
the Options, to be sold pursuant to the Sellers Plan.

 

“Rule 144” means Rule 144 under the Securities Act.

 

“Sales Period” The Sales Period at the time of the A&R Effective Date began on
October 1, 2012 and will end on September 30, 2013.  The next Sales Period will
begin on October 1, 2013 and will end on June 30, 2014.  Thereafter, Sales
Periods will begin every year on July 1 (beginning with July 1, 2014) and will
end on June 30 of the following year until this Trading Plan or the applicable
Sellers Plan is terminated.

 

“Sellers Plan” means a Sellers Plan in the form attached hereto as Exhibit B
entered into between Broker and a Seller.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Seller Representation Letter” is the seller representation letter, a form of
which is attached hereto as Exhibit C.

 

“Seller” means Isis’ executive officers, members of its Board of Directors and
other individuals specified by Isis who participate in the Trading Plan and who
have agreed to only sell Stock under the Trading Plan.

 

“Stock” means the common stock, $0.001 par value per share, of Isis.

 

“Suspension Event” means a legal, contractual or regulatory restriction that is
applicable to Seller or Seller’s affiliates that does not permit the execution
of sales made under a Sellers Plan (other than any such restriction relating to
Seller’s possession or alleged possession of material nonpublic information
about Isis or its securities subsequent to the execution of the Sellers Plan),
including, without limitation, (i) any restriction related to a merger or
acquisition, (ii) a stock offering requiring an affiliate lock-up, that would
prohibit any sale pursuant to the Trading Plan, or (iii) a potential violation
of Section 16 of the Exchange Act.

 

“Trading Day” means any day during the Sales Period that (i) the Nasdaq Stock
Market is open for business and the Stock trades regularly on such day and
(ii) Isis is open for business as a corporation.

 

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EXHIBIT B

SELLERS PLAN

 

Seller’s Name:

Seller’s Account Number:

Effective Date:                                    ; provided however, that
Broker will not make any trades under this Sellers Plan until the start of the
general trading session on the 30th calendar day following the Effective Date
(i.e.                         ).

 

Plan Shares:

 

shares of Stock owned by Seller; and/or

 

shares of Stock issuable upon the exercise of the Options listed on the table
below (vested shares only).

 

Instructions:

 

For the shares of Stock owned by Seller the Sales Amount and Minimum Sales Price
will be as follows:

 

Sales Amount

 

Minimum
Sales Price

 

If Stock received under ESPP Plan or from an
RSU, please indicate original issue date and
original issue price for Stock and “RSU” or
“ESPP” as applicable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the shares of Stock issuable upon the exercise of the Options the Sales
Amount and Minimum Sales Price will be as follows.

 

Option Number

 

Sales
Amount

 

Exercise Price

 

Expiration
Date

 

Minimum
Sales Price

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

During the Sales Period, Broker will sell the number of shares of Stock
identified in each row of the tables above (the “Sales Amount”) for the account
of Seller on each Trading Day under ordinary principles of best execution at the
then-prevailing market price; provided that Broker will not sell any shares of
Stock under a Sellers Plan at a price of less than the Minimum Sales Price.

 

If, consistent with ordinary principles of best execution, Broker cannot sell
the Sales Amount on any Trading Day, then the amount of such shortfall may be
sold as soon as practicable on the immediately succeeding Trading Day and on
each subsequent Trading Day as is necessary to sell such shortfall consistent
with the ordinary principals of best execution.  If any shortfall exists after
the close of trading on the last Trading Day prior to the termination of this
Trading Plan or the applicable Sellers Plan, Broker’s obligation and
authorization to sell such shares will terminate.

 

If the Minimum Sales Price for two different blocks of Plan Shares is reached in
the same Trading Day, Broker will attempt to sell the Plan Shares allocated to
the higher Minimum Sales Price first.

 

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Uptrend Discretion

 

o            On any Trading Day in which the Minimum Sales Price is reached, if
the Broker reasonably and in good faith believes there is an upward trend in the
trading price of Isis’ stock, then Broker may in its discretion choose not to
sell the Sales Amount at the Minimum Sales Price on such Trading Day with the
prospect of later selling the Sales Amount at a price that is higher than the
then current market price.  So long as Broker exercises its discretion under
this provision in good faith, Broker will have no liability to Seller for
failing to sell any Plan Shares on a Trading Day in which the Minimum Sales
Price for such Plan Shares was achieved.

 

No Expiration of In-the-Money Options:

 

In the event that unexercised Options are about to expire or terminate, Broker
will exercise such Options at its discretion during the last:

 

(Please Check Only One of the Following)

 

o            5 Trading Days prior to the expiration/termination date of the
Options

 

o            30 Trading Days prior to the expiration/termination date of the
Options

 

o            60 Trading Days prior to the expiration/termination date of the
Options

 

o                            Trading Days prior to the expiration/termination
date of the Options

 

Broker will in no event exercise any Option if at the time of exercise the
exercise price of the Option is equal to or higher than then current market
price of the Stock.

 

ESPP Shares

 

o            If Seller purchases shares through the Isis Employee Stock Purchase
Plan at any time during the Sales Period, the newly purchased shares will
automatically become part of this Sellers Plan as Plan Shares and Broker will
sell such shares according to the following instructions:

 

 

RSU Shares

 

o            If Seller receives shares through from Restricted Stock Units under
the Isis 2011 Equity Incentive Plan at any time during the Sales Period, the
newly received shares will automatically become part of this Sellers Plan as
Plan Shares and, once Broker confirms receipt of such shares, Broker will sell
such shares according to the following instructions:

 

 

Other Instructions:

 

 

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EXHIBIT C

 

SELLER REPRESENTATION LETTER

 

Seller Representation and Covenant Letter

 

Date:                               

 

Isis Pharmaceuticals, Inc.

2855 Gazelle Court

Carlsbad, CA 92010

 

InSight Securities, Inc.

2511 Garden Road, Suite C-225

Monterey, CA 93940

Attn: Peter Albano

 

In connection with the Seller’s Sellers Plan under the 10b5-1 Trading Plan (the
“Trading Plan”) of Isis Pharmaceuticals, Inc. (“Isis”), the Seller makes the
representations and agrees to the covenants set forth below.

 

All capitalized terms that are not otherwise defined herein shall have the
meanings ascribed to them in the Trading Plan.  The terms of the Trading Plan
are incorporated herein by reference.  In the event of any conflict between the
provisions of this letter and the Trading Plan, the provisions of the Trading
Plan will control.

 

Seller hereby appoints and authorizes Broker to sell shares of Stock pursuant to
the terms and conditions of the Trading Plan and the Sellers Plan attached
hereto and incorporated herein by reference as Exhibit I (the “Sellers Plan”). 
Broker hereby accepts such appointment.

 

Seller Representations.

 

1.             Sales of Stock under the Sellers Plan have been approved by an
authorized representative of Isis.

 

2.             As of the date hereof, Seller is not aware of any material
nonpublic information concerning Isis or its securities. Seller is entering into
the Sellers Plan in good faith and not as part of a plan or scheme to evade
compliance with the federal securities laws.

 

3.             The Stock to be sold under the Sellers Plan is owned free and
clear by Seller (subject, in the case of shares underlying Options, only to the
compliance by Seller with the exercise provisions of such options) and is not
subject to any agreement granting any pledge, lien, mortgage, hypothecation,
security interest, charge, option or encumbrance or any other limitation on
disposition, other than those which may have been entered into between Seller
and Broker or imposed by Rules 144 or 145 under the Securities Act.

 

4.             Seller has had an opportunity to discuss the Sellers Plan with
his or her own advisors as to the legal, tax, business, financial and related
aspects of the Sellers Plan and has determined that the Sellers Plan meets the
affirmative defense criteria set forth in Rule 10b5-

 

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1(c).  Seller has not relied upon Broker or Isis (or any person affiliated with
Broker or Isis) in connection with, Seller’s adoption and implementation of the
Sellers Plan.

 

5.             Seller acknowledges and agrees that, once the Sellers Plan
becomes effective, Seller does not have, and shall not attempt to exercise, any
influence over how, when or whether to effect sales of Stock pursuant to the
Sellers Plan.

 

Seller Covenants.

 

6.             While the Sellers Plan is in effect, Seller agrees not to (i) buy
or sell any securities of Isis outside of the transactions contemplated by the
Trading Plan and purchases pursuant to Isis’ Employee Stock Purchase Plan,
(ii) enter into or alter any corresponding or hedging transaction or position
with respect to the Stock covered by the Sellers Plan (including, without
limitation, with respect to any securities convertible or exchangeable into the
Stock), and (iii) alter or deviate from the terms of the Sellers Plan.

 

7.             Seller agrees to deliver to Broker the Plan Shares (including any
shares issued pursuant to restricted stock units) pursuant to the Sellers Plan
to be placed into Seller’s Plan Account prior to the commencement of sales under
the Sellers Plan.

 

8.             Seller agrees that, with respect to shares of Stock issuable upon
the exercise of Options, Seller may only include shares that are vested as of
the 30th day following the Effective Date of the applicable Sellers Plan.

 

9.             Seller agrees to make appropriate arrangements with Isis and its
transfer agent and stock plan administrator to permit Broker to furnish notice
to Isis of the exercise of the Options and to have underlying shares delivered
to Broker as necessary to effect sales under the Sellers Plan. Seller hereby
authorizes and appoints each of Broker and Isis’ Chief Operating Officer to
serve, individually or collectively, as Seller’s agent and attorney-in-fact and,
in accordance with the terms of the Sellers Plan, to exercise the Options.
Seller agrees to complete, execute and deliver to Broker cashless exercise
forms, in sufficient form to allow for the exercise of Options pursuant to the
Sellers Plan at such times and in such numbers as Broker may reasonably request.

 

10.          Seller will not, directly or indirectly, communicate any
information relating to the Stock or Isis to any employee of Broker or its
affiliates who is involved, directly or indirectly, in executing the Sellers
Plan at any time while the Sellers Plan is in effect.

 

11.          Seller agrees to notify Broker’s compliance office by telephone or
facsimile as soon as practicable if Seller becomes aware of the occurrence of
any Suspension Event. Such notice will indicate the anticipated duration of the
restriction, but will not include any other information about the nature of the
restriction or its applicability to Seller and will not in any way communicate
any material nonpublic information about Isis or its securities to Broker.

 

12.          Seller understands and agrees that so long as it is an “affiliate”
of Isis for purposes of Rule 144 under the Securities Act, all sales under the
Plan will be in accordance with Rule 144.  Seller agrees not to take any action
that would cause Seller to aggregate sales under the Sellers Plan with sales of
other securities of the issuer pursuant to Rule 144, and not to take any action
that would cause the sales under the Plan not to comply with Rule 144.

 

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13.          Seller agrees to complete, execute and deliver to Broker Forms 144
for the sales to be effected under the Sellers Plan at such times and in such
numbers as Broker reasonably requests.  The “Remarks” section of each Form 144
will state that the sale is being made pursuant to a previously adopted plan
intended to comply with Rule 10b5-1(c) and will indicate the date the Sellers
Plan was adopted and that the representation is made as of such date.

 

14.          Seller agrees to make all filings, if any, required under Sections
13(d), 13(g) and 16 of the Exchange Act in a timely manner, to the extent any
such filings are applicable to Seller.

 

15.          Seller agrees that Seller will at all times during the Sales
Period, in connection with the performance of the Sellers Plan, comply with all
applicable laws, including, without limitation, Section 16 of the Exchange Act
and the rules and regulations promulgated thereunder.

 

16.          Seller will notify Broker and Isis of any other purchase or sale
transactions involving securities of Isis that are not contemplated by the
Trading Plan.

 

17.          If Seller wishes to transfer any Plan Shares (i) Seller must comply
with Isis’ policies regarding the transfer of such Plan Shares, and (ii) the
transferee must agree to assume and be bound by the terms of the applicable
Sellers Plan and execute a representation and covenant letter substantially in
the form of this representation and covenant letter.

 

 

Very truly yours,

 

 

 

 

 

 

 

[name]

 

[address]

 

[telephone]

 

[fax]

 

 

Agreed:

 

Accepted:

 

 

 

InSight Securities, Inc.

 

Isis Pharmaceuticals, Inc.

 

 

 

 

 

 

 

 

 

 

 

B. Lynne Parshall

By:

 

 

Chief Operating Officer

 

 

 

Its:

 

 

 

 

 

 

 

 

 

 

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