Exhibit 10.4

SERVICES AGREEMENT

THIS SERVICES AGREEMENT (the “Agreement”) is entered into as of July 15, 2016
(“Effective Date”) by and between Arena Pharmaceuticals, Inc., a Delaware
corporation (“Arena”), and William R. Shanahan, Jr., M.D. (“Consultant”).

WHEREAS, Consultant’s terminated employment with Arena was terminated on June
13, 2016 (the “Employment Termination Date”); and

WHEREAS, Arena wishes to obtain the services of Consultant for certain purposes
and Consultant wishes to provide such services, all subject to the terms and
conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth,
and intending to be legally bound hereby, Arena and Consultant hereby agree as
follows:

1. Services to be Provided.  During the term of this Agreement, Consultant shall
perform for Arena (and if applicable, Arena’s Affiliates) services relating to
research and development (the “Services”), as requested by Arena from time to
time. Such Services are expected to approximate, but shall not exceed more than,
20% of the average level of services performed in the three years preceding his
employment termination. In no event shall Consultant perform Services during
working hours for any employer or other client of Consultant, nor shall
Consultant utilize the confidential information, funds, personnel, space,
equipment or facilities of any employer or other client.  All services performed
pursuant to this Agreement shall be performed solely by Consultant and in a
good, timely, efficient and professional manner.  As used herein, “Affiliate”
means any entity, which controls, is controlled by, or is under common control
with Arena.  In this context “control” shall mean ownership by one entity,
directly or indirectly, of more than fifty percent (50%) of the voting stock of
another entity, which voting stock is entitled to vote for the election of
directors, or otherwise has the actual right and ability to control and direct
the management and business affairs of such other entity.

2. Term.  This Agreement will begin on the Effective Date and continue until the
one year anniversary of the Effective Date, unless terminated earlier.

3. Compensation; No Benefits; Licenses; Insurance; Taxes.

(a) As compensation for Consultant’s performance of the Services, Arena (or its
Affiliate) shall pay Consultant $6,763.60 per month.  In addition, Consultant
shall be entitled to exercise any of his stock options to purchase Arena common
stock that were outstanding and vested as of the Employment Termination Date, or
that become vested thereafter due to his termination of employment under the
Amended and Restated Severance Benefit Plan, until 2 years after the Effective
Date (but not beyond the original contractual life of the stock option);
provided, however, the 2 year extension provided in this Agreement shall be null
and void if (i) Consultant has not provided Arena an effective release relating
to the termination of his employment with Arena or (ii) Consultant terminates
this Agreement without the consent of Arena prior to the one year anniversary of
the Employment Termination Date.  For clarity, this two year post Effective Date
exercise period will apply for all vested options (either through the term of
employment or

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through the Amended and Restated Severance Benefit Plan) even if the Services
outlined in section 1 above are terminated by the Company prior to the one year
anniversary of the Effective date for this contract. Consultant understands and
agrees that such extension of the post-termination exercise period for his Arena
stock options may disqualify, immediately, any stock options that were
previously considered “incentive stock options” under Section 422 of the
Internal Revenue Code of 1986, as amended, under the rules of the Code. For
clarity, Consultant’s termination of employment with Arena on the Employment
Termination Date constitutes termination of Consultant’s continuous services as
an employee, consultant or director to Arena or any affiliate for purposes of
all of Consultant’s stock options and other equity awards covering Arena common
stock that are outstanding as of the Employment Termination Date (the “Equity
Awards”) and the Services do not constitute continuous employment or services
with Arena or its affiliates for purposes of any of such Equity Awards.  Except
to the extent provided in this Section 3, all of the Equity Awards shall
continue to be governed by the terms and conditions of the equity plan and
equity grant documents evidencing such awards.

(b) Consultant shall be responsible for all expenses incurred in connection with
the performance of the Services, unless such expenses are reasonable and
approved in advance by Arena.  All such pre-approved expenses shall be invoiced
to Arena at cost and Consultant shall include copies of all receipts for such
expenses.

(c) Consultant is not an employee of Arena and will not be entitled to
participate in, or receive any benefit or right as an Arena employee under, any
Arena employee benefit and welfare plans, including, without limitation,
employee insurance, pension, savings and security plans, as a result of
Consultant entering into this Agreement.

(d) Consultant is solely responsible for filing tax returns and submitting
payments as required by any federal, state or local tax authority arising under
this Agreement, and agrees to do so in a timely manner.  Arena, in its sole
discretion, may file applicable documents or reports with the Internal Revenue
Service and withhold taxes and other amounts it determines is required or
appropriate under applicable law.

(e) Consultant is solely responsible for obtaining any necessary business or
similar licenses required by any federal, state or local authority.    

(f) Arena will not obtain workers’ compensation insurance on behalf of, or for
the benefit of, Consultant

4. Ownership of Results.

(a) All findings, conclusions, data, inventions, discoveries, trade secrets,
techniques, processes, know-how, trademarks, servicemarks, brands, trade dress
and tag lines, whether or not patentable or otherwise registrable, that are made
by Consultant, either alone or with others, in the performance of the Services
or which result, to any extent, from use of Arena’s (or Arena’s Affiliate’s)
premises or property (collectively, “Inventions”) shall become the exclusive
property of Arena or its designee. Consultant shall provide Arena prompt written
notice of each Invention.  Consultant hereby assigns, transfers and conveys all
of Consultant’s right, title and interest in and to any and all Inventions to
Arena or its designee.

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(b) Upon the request and at the expense of Arena or its designee, Consultant
will execute and deliver any and all instruments and documents and take such
other acts as may be necessary or desirable to document such transfer or to
enable Arena or its designee to apply for, prosecute and enforce patents,
trademark registrations or copyrights in any jurisdiction with respect to any
Inventions or to obtain any extension, validation, re-issue, continuance or
renewal of any such intellectual property right. Without limiting the foregoing,
Consultant shall assign, grant and convey unto Arena or its designee all of
Consultant’s right, title and interest, now existing or that may exist in the
future, in and to any copyrights in any findings, reports, data compilations and
other information and material resulting from the performance of the Services.
Consultant shall not submit applications for copyright registration in any
country for any information or materials created by Consultant pursuant to this
Agreement.

(c) Consultant acknowledges and agrees that the work (the services to be
rendered), and all rights therein, including without limitation, copyright,
belongs to and shall be the sole and exclusive property of Arena or its
designee.

(d) The provisions of this paragraph 4 shall survive the expiration or sooner
termination of the term of this Agreement, and such provisions are in addition
to, and do not supersede, any agreements Consultant entered into as an Arena
employee.

5. Confidentiality.  Consultant will not either during or after the term of this
Agreement, disclose to any third person or use any confidential or proprietary
information of Arena, its Affiliates or its corporate collaborators for any
purpose other than the performance of the Services without the prior written
authorization of Arena. This obligation shall not apply to information that is
in the public domain through no fault of Consultant. For purposes of this
paragraph 5, “confidential or proprietary information” is defined as any
information disclosed hereunder by Arena or its Affiliates, or on behalf of
Arena or its Affiliates, or developed by Consultant in the performance of
Services, including without limitation the structure and activity of any
chemical compositions provided to Consultant pursuant to this Agreement, as well
as synthetic and analytical methods, biomaterials, micro-organisms, cells, cell
lines and the progeny and derivatives thereof, including all modified and
recombinant DNA molecules and all vectors and hosts containing the same, patent
applications, pre-clinical or clinical data, marketing methods and plans,
pricing information, manufacturing information and other unpublished information
related to the business or the financial condition of Arena and its Affiliates
and corporate collaborators. The provisions of this paragraph 5 shall survive
the expiration or sooner termination of this Agreement, and such provisions are
in addition to, and do not supersede, any agreements Consultant entered into as
an Arena employee.

6. Termination.  Either party may terminate this Agreement for any reason
whatsoever upon written notice to the other party, and the termination is
effective upon delivery of the notice.

7. Return of Arena Property.  Consultant will return to Arena any property of
Arena, its Affiliates and corporate collaborators, in Consultant’s possession,
at any time when so requested by Arena and in any event upon termination of this
Agreement. Consultant will not remove any such property from Arena premises
without written authorization from Arena.

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8. No Conflicting Agreements.  Consultant represents that Consultant is not a
party to any existing agreements that would prevent Consultant from entering
into and performing this Agreement. Consultant will not enter into any other
agreement that is in conflict with Consultant’s obligations under this
Agreement. Consultant shall not seek or use funding to support the Services from
any third party (including the U.S. Government), without the prior written
consent of Arena. If Consultant is an employee (or, during the term of this
Agreement, becomes an employee) of a third party, Consultant represents that
Consultant has complied (and, in the case of a new employer, will comply) with
any and all applicable policies and procedures of such third party pertaining to
the disclosure of proposed agreements for services and, to the extent necessary
or required, received approval from such third party to enter into or continue
this Agreement and be bound by the terms herein. Without limiting the foregoing,
Consultant represents that receipt and use of confidential or proprietary
information hereunder will not conflict with any agreement Consultant has (or
will have) with any third party, and that no third party shall have any interest
or rights in such confidential or proprietary information or any Inventions. If
requested by Arena, Consultant will provide to Arena information concerning
payments and equity holdings that could be viewed as creating a conflict of
interest with respect to the provision of Services hereunder, as well as other
information that is required or requested by regulatory authorities.  

9. Independent Contractor.  Consultant is an independent contractor under this
Agreement. Neither party shall have the power to bind the other party to any
agreement, contract, obligation or liability. Consultant shall not communicate
on behalf of Arena or its Affiliates, or report on the Services rendered under
this Agreement to any third party without specific written authorization by
Arena.

10. Debarment; Excluded Lists.  Consultant warrants and represents that
Consultant is not now, nor has Consultant ever been, an individual that has been
debarred by the U.S. Food and Drug Administration (“FDA”), including, but not
limited to, pursuant to 21 U.S.C. §335a (a “Debarred Person”) or disqualified as
a Clinical Investigator by the FDA, including, but not limited to, pursuant to
21 C.F.R. §312.70 or §812.119 (a “Disqualified Person”). Consultant warrants and
represents that Consultant is not now, nor has Consultant ever been, listed on
either (a) the United States Department of Health & Human Services’ List of
Excluded Individuals/Entities or (b) the United States General Services
Administration’s Excluded Parties List System (in each case, including any
predecessor list, or replacement list, directed to the same or similar purpose)
(each of (a) and (b), an “Excluded List”). Consultant further warrants and
represents that Consultant has no knowledge of any circumstances which may
affect the accuracy of any of the foregoing warranties and representations,
including, but not limited to, FDA investigations of, or debarment proceedings
against Consultant.

Consultant shall immediately notify Arena if Consultant becomes aware of any
change in circumstances that would render any of the foregoing representations
or warranties untrue or misleading in any material respect during the term of
this Agreement and any extensions thereto.

11. Health Care Provider Payment Tracking.  Arena may be required to report
payments made to Consultant pursuant to this Agreement under federal, state or
other law or regulation. If so requested by Arena, Consultant will provide the
following information (and any other information reasonably requested by Arena
for compliance with reporting requirements)

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regarding Consultant to Arena’s Accounts Payable department
(acctpayable@arenapharm.com): (a) state license number, (b) state of license,
(c) National Provider Identifier (NPI) number, and (d) name and address of
primary place of business.

12. Formulary Committee Participation.  To the extent Consultant is a member of
a committee of any government entity that sets prescription drug formularies or
develops clinical guidelines, during the term of this Agreement and for two
years following the term, Consultant will disclose to such committee the
existence of this Agreement and the nature of the Services, and will follow any
procedure set forth by such committee relative to Services under this
Agreement.  Consultant will notify Arena of such committee membership and of any
such procedure that Consultant is required to follow by the committee relative
to the Services under this Agreement.

13. Entire Agreement and Amendment.  This Agreement is the sole agreement
between Consultant and Arena with respect to the Services to be performed
hereunder and it supersedes all prior agreements and understandings with respect
thereto, whether oral or written. No modification to any provision of this
Agreement shall be binding unless in writing and signed by both Consultant and a
duly authorized representative of Arena. All of the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective heirs, executors, administrators, legal representatives,
successors and permitted assigns of the parties hereto.

14. Assignment and Subcontracts.  The duties and responsibilities of Consultant
hereunder are of a personal nature and shall not be assigned, subcontracted or
delegated in whole or in part by Consultant without Arena’s prior written
consent.  

15. Governing Law.  This Agreement shall be governed by and interpreted in
accordance with laws of the State of California, without giving effect to any
conflict of law provisions.

16. Notices.  All notices required hereunder shall be in writing and be
delivered personally, sent by an internationally recognized express courier
service (e.g., FedEx), transmitted via facsimile, or sent via registered or
certified mail (postage prepaid) requiring return receipt, and shall be deemed
given as of:  (i) the date of delivery, if sent by personal delivery; (ii) two
days after the date of deposit, if sent by express courier service; (iii) the
date of transmission, if faxed with confirmatory printout of transmission; or
(iv) one week after the date of mailing, if sent by mail. Notices shall be
addressed as provided below or to such other addressee as either party may in
the future designate by written notice to the other in accordance with the terms
hereof:

If to Arena, to:

Arena Pharmaceuticals, Inc.

6154 Nancy Ridge Drive

San Diego, CA  92121

Attention:  Chief Executive Officer

With a copy to:  General Counsel

Facsimile No.: (858) 677-0065

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If to Consultant, to:

William R. Shanahan, Jr., M.D.

4948 Rancho Viejo Drive

Del Mar, CA 92014

17. Counterparts.  This Agreement may be executed in counterparts, each of which
shall be deemed an original, all of which together shall constitute one and the
same instrument.  One or more counterparts of this Agreement may be delivered by
facsimile or PDF transmission with the intent that it or they shall constitute
an original counterpart hereof.  

18. Invalidity and Waiver.  If any portion of this Agreement is held invalid or
inoperative, then so far as is reasonable and possible the remainder of this
Agreement shall be deemed valid and operative, and, to the greatest extent
legally possible, effect shall be given to the intent manifested by the portion
held invalid or inoperative.  The failure by either party to enforce against the
other party any term or provision of this Agreement shall not be deemed to be a
waiver of such party’s right to enforce against the other party the same or any
other such term or provision in the future.

19. Non-Disclosure of Agreement.  Consultant shall not disclose the existence of
this Agreement, the identities of the parties, or the terms or provisions of
this Agreement, without the prior written approval of Arena, unless such
disclosure is required by applicable law or regulation.  

20. Adverse Event Reporting.  An adverse event is any new, undesirable medical
experience or change of an existing condition which occurs during or after use
of a product.  To the extent Consultant becomes aware of any adverse events that
may be related to any product marketed by Arena or its Affiliate, or by one or
more distributors of Arena or its Affiliate, regardless of whether the events
are actually related to any such product, Consultant will provide immediate
notice to Arena for compliance with all applicable reporting obligations;
adverse events must be reported to Arena’s drug safety department at
858-453-7200, extension 1620 or by email at safety@arenapharm.com.

 

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IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have duly
executed, or caused to be duly executed, this Agreement as of the date first
above written.

 

Arena Pharmaceuticals, Inc.

 

 

 

 

 

 

 

By:

 

/s/ Amit Munshi

 

/s/ William R. Shannan, Jr.

 

 

Amit Munshi

 

William R. Shanahan, Jr., M.D.

 

 

President and Chief Executive Officer

 

 

 

 

6154 Nancy Ridge Drive

 

4948 Rancho Viejo Drive

 

 

San Diego, CA 92121

 

Del Mar, CA 92014

 

 

 

 

 

 

 

Telephone Number:  858-453-7200

 

Telephone Number: 858-847-9470

 

Date:

 

July 26, 2016

 

Date:

 

July 15, 2016

 

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