Schedule 5.14
Milestone Warrant Holder List
1. With respect to Milestone Warrant One, warrants for an aggregate of
50,000 shares of Parent Common Stock (subject to adjustment as
specified in the Agreement) shall be issued for [***]:
--------------------------------- ------------------------------------
Shareholder No. of NNL Shares Owned
--------------------------------- ------------------------------------
[***] [***]
--------------------------------- ------------------------------------
Total 750,000
--------------------------------- ------------------------------------
[***].
2. With respect to Milestone Warrant Two, warrants for an aggregate of
50,000 shares of Parent Common Stock (subject to adjustment as
specified in the Agreement) will be distributed pro rata pursuant to
the NNL ownership table shown in the preceding paragraph (without the
[***] described in the last sentence of that paragraph).
Exhibit 2.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of May
28, 1998, by and among Neurocrine Biosciences, Inc., a Delaware corporation (the
"Parent") and the persons listed on the signature page who become signatories to
this Agreement (collectively, the "Investors and individually an "Investor").
Capitalized terms not defined herein shall have the meanings ascribed to them in
the Agreement and Plan of Reorganization dated May 1, 1998.
R E C I T A L S
WHEREAS, in connection with the merger (the "Merger") of a wholly owned
subsidiary of Parent with and into Northwest NeuroLogic, Inc., an Oregon
corporation ("NNL") pursuant to the Agreement and Plan of Reorganization dated
of even date herewith, Parent and the Investors desire to provide for certain
rights of the Investors with respect to registration of the Parent Common Stock
issued by Parent to the Investors upon exchange of the NNL Common Stock in the
Merger.
WHEREAS, it is a condition of the closing of the Merger that Parent
enter into this Agreement.
NOW THEREFORE, in consideration of the promises set forth above and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties agree as follows:
1. Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
(a) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(b) "Form S-3" shall mean Form S-3 issued by the Commission or
any substantially similar form then in effect.
(c) "Holder" shall mean any holder of outstanding Registrable
Securities which have not been sold to the public, but only if such holder is an
Investor or an assignee or transferee of Registration rights as permitted by
Section 8.
(d) "Initiating Holders" shall mean Holders who in the
aggregate hold and propose to register at least [***] shares of Registrable
Securities.
(e) "Material Adverse Event" shall mean an occurrence having a
consequence that either (a) is materially adverse as to the business,
properties, prospects or financial condition of the Parent or (b) is reasonably
foreseeable, has a reasonable likelihood of occurring, and if it were to occur
would materially adversely affect the business, properties, prospects or
financial condition of the Parent.
(f) The terms "Register", "Registered" and "Registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act ("Registration Statement"), and
the declaration or ordering of the effectiveness of such Registration Statement.
(g) "Registrable Securities" shall mean all shares of Parent
Common Stock issued or issuable to the Investors upon closing of the Merger,
including Common Stock issued pursuant to stock splits, stock dividends and
similar distributions with respect to such shares, provided that such shares (i)
are not available for immediate sale in the opinion of counsel to the Parent in
a transaction exempt from the registration and prospectus delivery requirements
of the Securities Act so that all transfer restrictions and restrictive legends
with respect thereto are removed upon consummation of such sale pursuant to
Regulation S, Rule 144, or otherwise under applicable federal securities laws,
or (ii) have not previously been sold to the public.
(h) "Registration Expenses" shall mean all expenses incurred
in complying with Section 2 of this Agreement, including, without limitation,
all federal and state registration, qualification and filing fees, printing
expenses, fees and disbursements of counsel for the Parent, blue sky fees and
expenses, and the expense of any special audits incident to or required by any
such registration, other than Selling Expenses.
(i) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
(j) "Selling Expenses" shall mean all underwriting discounts
and selling commissions applicable to the sale of Registrable Securities
pursuant to this Agreement, as well as fees and disbursements of legal counsel
for the selling Holders.
2. Demand Registration.
2.1 Request for Registration on Form S-3. Subject to the terms
of this Agreement, in the event that Parent receives from Initiating Holders at
any time after the Effective Time and prior to the first anniversary of the
Effective Time, a written request that Parent effect any Registration on Form
S-3 (or any successor form to Form S-3 regardless of its designation) at a time
when Parent is eligible to register securities on Form S-3 (or any successor
form to Form S-3 regardless of its designation) for an offering of Registrable
Securities, the reasonably anticipated aggregate offering price to the public of
which would exceed [***], Parent will promptly give written notice of the
proposed Registration to all the Holders and will, as soon as practicable,
effect Registration of the Registrable Securities specified in such request,
together with all or such portion of the Registrable Securities of any Holder
joining in such request as are specified in a written request delivered to the
Parent within 20 days after written notice from the Parent of the proposed
Registration. Parent shall not be obligated to take any action to effect any
such registration pursuant to this Section 2.1: (i) prior to 90 days after the
Effective Time, (ii) subsequent to 365 days after the Effective Time, or (iii)
after Parent has effected one such Registration pursuant to this Section 2.1 and
such Registration has been declared effective and, if underwritten, has closed.
2.2 Right of Deferral of Registration. If (i) Parent shall
furnish to all such Holders who joined in the request a certificate signed by
the President of Parent stating that, in the good faith judgment of the Board of
Directors of Parent, it would be seriously detrimental to Parent for any
Registration to be effected as requested under Section 2.1, or (ii) Parent shall
have effected a Registration other than a Registration of securities issued or
issuable pursuant to an employee benefit plan (whether or not pursuant to
Section 2.1) within ninety (90) days preceding the date of such request, Parent
shall have the right to defer the filing of a Registration Statement with
respect to such offering for a period of not more than (i) sixty (60) days from
delivery of the request of the Initiating Holders, or (ii) ninety (90) days of
the date of filing of such prior Registration respectively; provided, however,
that Parent may not utilize this right more than twice in any 12-month period.
2.3 Registration of Other Securities. Any Registration
Statement filed pursuant to the request of the Initiating Holders under this
Section 2 may, subject to the provisions of Section 2.4, include securities of
Parent other than Registrable Securities.
2.4 Underwriting in Demand Registration.
2.4.1 Notice of Underwriting. If the
Initiating Holders intend to distribute the Registrable Securities covered by
their request by means of an underwriting, they shall so advise Parent as a part
of their request made pursuant to this Section 2, and Parent shall include such
information in the written notice referred to in Section 2.1. The right of any
Holder to Registration pursuant to Section 2.1 shall be conditioned upon such
Holder's agreement to participate in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Holder with
respect to such participation and inclusion).
2.4.2 Inclusion of Other Holders in Demand
Registration. If Parent, officers or directors of Parent holding Common Stock
other than Registrable Securities, or holders of securities other than
Registrable Securities (who are collectively referred to as "Other Holders"),
request inclusion in such Registration, the Initiating Holders shall, subject to
the allocation provisions of Section 2.4.4 below, on behalf of all Holders,
offer to such Other Holders that such securities other than Registrable
Securities be included in the underwriting, conditioned upon the acceptance by
such Other Holders of the terms of this Section 2. In event of the inclusion in
the Registration of securities held by Other Holders, such Other Holders shall
be deemed to be Holders for all purposes under this Agreement, other than the
allocation provisions of Section 2.4.4 below.
2.4.3 Selection of Underwriter in Demand
Registration. Parent shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into and perform its
obligations under an underwriting agreement in usual and customary form with the
representative ("Underwriter's Representative") of the underwriter or
underwriters selected for such underwriting by the Holders of a majority of the
Registrable Securities being registered by the Initiating Holders and consented
to by Parent (which consent shall not be unreasonably withheld).
2.4.4 Marketing Limitation in Demand
Registration. In the event the Underwriter's Representative advises the
Initiating Holders in writing that market factors (including, without
limitation, the aggregate number of shares of Common Stock requested to be
Registered, the general condition of the market, and the status of the persons
proposing to sell securities pursuant to the Registration) require a limitation
of the number of shares to be underwritten, then the Initiating Holders shall so
advise all Holders and Other Holders, and the number of shares of Registrable
Securities and other securities that may be included in the Registration and
underwriting shall be allocated first among all Holders of Registrable
Securities and Other Holders of securities subject to contractual registration
rights and second among all Other Holders of securities not subject to
contractual registration rights, in proportion, as nearly as practicable, to the
number of shares proposed to be included in such Registration by such Holder or
Other Holder. No Registrable Securities or other securities excluded from the
underwriting by reason of this Section 2.4.4 shall be included in such
Registration Statement.
2.4.5 Right of Withdrawal in Demand
Registration. If any Holder of Registrable Securities, or a holder of other
securities entitled (upon request) to be included in such Registration,
disapproves of the terms of the underwriting, such person may elect to withdraw
therefrom by written notice to Parent, the underwriter and the Initiating
Holders delivered at least seven days prior to the effective date of the
Registration Statement. The securities so withdrawn shall also be withdrawn from
the Registration Statement.
2.5 Blue Sky in Demand Registration. In the event of any
Registration pursuant to Section 2, Parent will exercise reasonable efforts to
Register and qualify the securities covered by the Registration Statement under
such other securities or Blue Sky laws of such jurisdictions as the Holders
shall reasonably request and as shall be reasonably appropriate for the
distribution of such securities; provided, however, that Parent shall not be
required to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.
3. Expenses of Registration. All Registration Expenses incurred in
connection with one Registration pursuant to Section 2.1 shall be borne by
Parent. However, Parent shall not be required to pay for any expenses of Holders
in connection with any registration proceeding begun pursuant to Section 2.1 if
the registration request is subsequently withdrawn at the request of the Holders
of a majority of the Registrable Securities to be registered (which Holders
shall bear such expenses); provided, however, that (i) if at the time of such
withdrawal, the Holders have learned of a Material Adverse Event not known to
the Holders at the time of their request or (ii) such withdrawal is made after a
deferral of such registration by Parent pursuant to Section 2.2, then the
Holders shall not be required to pay any of such expenses and shall retain their
rights pursuant to Section 2.1. All Selling Expenses shall be borne by the
Holders of the securities registered pro rata on the basis of the number of
shares registered.
4. Registration Procedures. Parent will keep each Holder whose
Registrable Securities are included in any registration pursuant to this
Agreement advised as to the initiation and completion of such Registration. At
its expense Parent will: (a) use reasonable efforts to keep such Registration
effective for a period ending on the first anniversary of the Effective Time or
until the Holder or Holders have completed the distribution described in the
Registration Statement relating thereto (including Registrable Securities that
will be released from lockup agreements after the effective date of the
Registration), whichever first occurs; (b) furnish such number of prospectuses
(including preliminary prospectuses) and other documents as a Holder from time
to time may reasonably request; (c) prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement; and (d) notify each
Holder of Registrable Securities covered by such Registration Statement at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the prospectus
included in such Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.
5. Information Furnished by Holder. It shall be a condition precedent
of Parent's obligations under this Agreement that each Holder of Registrable
Securities included in any Registration furnish to Parent such information
regarding such Holder and the distribution proposed by such Holder or Holders as
Parent may reasonably request.
6. Indemnification.
6.1 Parent's Indemnification of Holders. To the extent permitted by
law, Parent will indemnify each Holder, each of its officers, directors and
constituent partners, legal counsel and accountants for the Holders, and each
person controlling such Holder, with respect to which Registration,
qualification or compliance of Registrable Securities has been effected pursuant
to this Agreement, and each underwriter, if any, and each person who controls
any underwriter against all claims, losses, damages or liabilities (or actions
in respect thereof) to the extent such claims, losses, damages or liabilities
arise out of or are based upon any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus or other document
(including any related Registration Statement) incident to any such
Registration, qualification or compliance, or are based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any violation by
Parent of the Securities Act, the Securities Exchange Act of 1934, as amended
(the "1934 Act"), or any state securities law, or any rule or regulation
promulgated under the Securities Act, the 1934 Act or any state securities law,
applicable to Parent and relating to action or inaction required of Parent in
connection with any such Registration, qualification or compliance; and Parent
will reimburse each such Holder, each of its officers, directors and constituent
partners, legal counsel and accountants, each such underwriter, and each person
who controls any such Holder or underwriter, for any legal and any other
expenses reasonably incurred, as incurred, in connection with investigating or
defending any such claim, loss, damage, liability or action; provided, however,
that the indemnity contained in this Section 6.1 shall not apply to amounts paid
in settlement of any such claim, loss, damage, liability or action if settlement
is effected without the consent of Parent (which consent shall not unreasonably
be withheld); and provided, further, that Parent will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based upon any untrue statement or omission based upon
written information furnished to Parent by such Holder, its officers, directors,
constituent partners, legal counsel, accountants, underwriter or controlling
person and stated to be for use in connection with the offering of securities of
Parent.
6.2 Holder's Indemnification of Parent. To the extent
permitted by law, each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such Registration,
qualification or compliance is being effected pursuant to this Agreement,
indemnify Parent, each of its directors and officers, each legal counsel and
independent accountant of the Parent, each underwriter, if any, of Parent's
securities covered by such a Registration Statement, each person who controls
Parent or such underwriter within the meaning of the Securities Act, and each
other such Holder, each of its officers, directors, constituent partners, legal
counsel and accountants and each person controlling such other Holder, against
all claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based upon any untrue statement (or alleged untrue statement)
by such Holder, of a material fact contained in any such Registration Statement,
prospectus, offering circular or other document (including any related
Registration Statement) incident to any such Registration, qualification or
compliance, or any omission (or alleged omission) by such Holder, to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by such Holder of the
Securities Act, the 1934 Act or any state securities law, or any rule or
regulation promulgated under the Securities Act, the 1934 Act or any state
securities law, applicable to such Holder and relating to action or inaction
required of such Holder in connection with any such Registration, qualification
or compliance; and will reimburse Parent, such Holders, such directors,
officers, partners, persons, law and accounting firms, underwriters or control
persons for any legal and any other expenses reasonably incurred, as incurred,
in connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement), omission (or alleged
omission) or violation (or alleged violation) is made in such Registration
Statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to Parent by such Holder and
stated to be specifically for use in connection with the offering of securities
of Parent, provided, however, that each Holder's liability under this Section
6.2 shall not exceed such Holder's net proceeds from the offering of securities
made in connection with such Registration; and provided, further, that the
indemnity contained in this Section 6.2 shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if settlement is
effected without the consent of the Holder (which consent shall not unreasonably
be withheld).
6.3 Indemnification Procedure. Promptly after receipt by an
indemnified party under this Section 6 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 6, notify the indemnifying
party in writing of the commencement thereof and generally summarize such
action. The indemnifying party shall have the right to participate in and to
assume the defense of such claim, jointly with any other indemnifying party
similarly noticed; provided, however, that the indemnifying party shall be
entitled to select counsel for the defense of such claim with the approval of
any parties entitled to indemnification, which approval shall not be
unreasonably withheld; provided further, however, that if either party
reasonably determines that there may be a conflict between the position of
Parent and the Investors in conducting the defense of such action, suit or
proceeding by reason of recognized claims for indemnity under this Section 6,
then counsel for such party shall be entitled to conduct the defense to the
extent reasonably determined by such counsel to be necessary to protect the
interest of such party. The failure to notify an indemnifying party promptly of
the commencement of any such action, if prejudicial to the ability of the
indemnifying party to defend such action, shall relieve such indemnifying party,
to the extent so prejudiced, of any liability to the indemnified party under
this Section 6, but the omission so to notify the indemnifying party will not
relieve such party of any liability that such party may have to any indemnified
party otherwise than under this Section 6.
7. Reports Under Securities Exchange Act of 1934. With a view to making
available to the Investors the benefits of Rule 144 and any other rule or
regulation of the Commission that may at any time permit an Investor to sell
securities of Parent to the public without Registration or pursuant to a
Registration on Form S-3, Parent agrees to use reasonable efforts to:
(a) make and keep public information available, as those
terms are defined in Rule 144;
(b) file with the Commission in a timely manner all reports
and other documents required of Parent under the Securities Act and the 1934
Act; and
(c) furnish to any Investor, so long as such Investor owns any
Registrable Securities, forthwith upon request (i) a written statement by Parent
that it has complied with the reporting requirements of Rule 144, the Securities
Act and the 1934 Act, or that it qualifies as a registrant whose securities may
be resold pursuant to Form S-3, (ii) a copy of the most recent annual or
quarterly report of Parent and such other reports and documents so filed by
Parent, and (iii) such other information as may be reasonably requested in
availing any Investor of any rule or regulation of the Commission which permits
the selling of any such securities without registration.
8. Transfer of Rights. The Registration rights of the Investors set
forth in Section 2 may be assigned by any Holder to a transferee or assignee of
any Registrable Securities not sold to the public acquiring at least [***]
shares of such Holder's Registrable Securities (equitably adjusted for any
recapitalizations, stock splits, combinations, and the like) or acquiring all of
the Registrable Securities held by such Holder if transferred to a single
entity; provided, however, that (i) Parent must receive written notice prior to
the time of said transfer, stating the name and address of said transferee or
assignee and identifying the securities with respect to which such information
and Registration rights are being assigned, and (ii) the transferee or assignee
of such rights must not be a person deemed in good faith by the Board of
Directors of Parent to be a competitor or potential competitor of Parent.
Notwithstanding the limitation set forth in the foregoing sentence respecting
the minimum number of shares which must be transferred, any Holder which is a
partnership may transfer such Holder's Registration rights to such Holder's
constituent partners (or may transfer to their heirs in the case of individuals)
without restriction as to the number or percentage of shares acquired by any
such constituent partner (or heirs).
9. Miscellaneous.
9.1 Entire Agreement; Successors and Assigns. This Agreement
constitutes the entire contract between Parent and the Investors relative to the
subject matter hereof. Subject to the exceptions specifically set forth in this
Agreement, the terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective executors, administrators, heirs,
successors and assigns of the parties.
9.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts entered into and wholly to be performed within the State of California
by California residents.
9.3 Counterparts. 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.
9.4 Notices. Any notice required or permitted hereunder shall
be given in writing and shall be conclusively deemed effectively given upon
personal delivery, or five (5) days after deposit in the United States mail, by
first class mail, postage prepaid, or upon sending if sent by commercial
overnight delivery service addressed (i) if to Parent, as set forth below
Parent's name on the signature page of this Agreement, and (ii) if to an
Investor, at such Investor's address as set forth on the signature page of this
Agreement, or at such other address as Parent or such Investor may designate by
ten (10) days' advance written notice to the Investors or to Parent,
respectively.
9.5 Amendment of Agreement. Except as otherwise specifically
provided herein, any provision of this Agreement may be amended by a written
instrument signed by Parent and by persons holding more than fifty-five percent
(55%) of the then outstanding Registrable Securities (calculated on an as
converted basis).
9.6 Aggregation of Stock. All Registrable Securities held or
acquired by affiliated entities or persons shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement.
9.7 Severability. If any provision of this Agreement is held
to be unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to the extent possible.
In any event, all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent possible.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
The PARENT: NEUROCRINE BIOSCIENCES, INC.
/s/ Paul W. Hawran
Senior Vice President and
Chief Financial Officer
The INVESTORS: /s/ Susan G. Amara
/s/ John A. Beaulieu
Manager
Cascadia Pacific Management
/s/ Roger Cone
/s/ Richard Sessions
/s/ Sandra L. Shotwell
Director, Technology Management
Oregon Health Sciences University
Exhibit 2.3
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT IS AVAILABLE FOR SUCH OFFER, SALE, OR
TRANSFER, PLEDGE OR HYPOTHECATION IN THE OPINION OF LEGAL COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY.
MILESTONE WARRANT
To Purchase Shares of Common Stock of
NEUROCRINE BIOSCIENCES, INC.
THIS CERTIFIES that, for value received, _____________________, is
entitled, upon the terms and subject to the conditions hereinafter set forth, at
any time after ____________, (the "Effective Date") and prior to
_________________, 2008 (or earlier as set forth in Section 10), to subscribe
for the purchase from Neurocrine Biosciences, Inc., a Delaware corporation (the
"Company"), __________ shares of the Company's Common Stock at an exercise price
("Exercise Price") equal to the average of the closing prices of the Company's
Common Stock as reported in the Wall Street Journal for the 15 trading days
preceding the completion of the Milestone (as such term is defined in Section
5.14 of the Agreement and Plan of Reorganization dated _____________________,
1998 (the "Merger Agreement")), subject to adjustment as set forth below. The
shares of Common Stock issuable upon exercise hereof are subject to repurchase
in certain events as set forth in the Merger Agreement and the Stock Restriction
Agreement appended thereto.
1. Title of Warrant. Prior to the expiration hereof and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company,
referred to in Section 2 hereof, by the holder hereof in person or by duly
authorized attorney, upon surrender of this Warrant together with the Assignment
Form annexed hereto properly endorsed.
Exhibit 2.3 6
2. Exercise of Warrant. The purchase rights represented by this Warrant
are exercisable by the registered holder hereof, in whole or in part, at any
time after the date hereof and prior to 4:00 p.m., La Jolla, California time, on
the date of termination hereof (as set forth in Section 10), subject to
adjustment as hereinafter provided, by the surrender of this Warrant and the
Notice of Exercise Form annexed hereto duly executed at the office of the
Company, in La Jolla, California (or such other office or agency of the Company
as it may designate by notice in writing to the registered holder hereof at the
address of such holder appearing on the books of the Company), and upon payment
of the Exercise Price for the shares thereby purchased (i) by cash or check or
bank draft payable to the order of the Company, (ii) by cancellation of
indebtedness of the Company payable to the holder hereof at the time of
exercise, or (iii) by delivery of an election in writing to receive a number of
shares of Common Stock equal to the aggregate number of shares of Common Stock
subject to this Warrant (or the portion thereof being canceled upon such
exercise), less that number of shares of Common Stock having a fair market value
as of such date equal to the aggregate Exercise Price of the Warrant (or such
portion thereof) whereupon the holder of this Warrant shall be entitled to
receive a certificate for the number of shares so purchased. The Company agrees
that if, at the time of the surrender of this Warrant (or portion thereof) and
exercise and purchase as aforesaid, the holder hereof shall be entitled to
exercise this Warrant, the shares so purchased shall be and be deemed to be
issued to such holder as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been exercised as
aforesaid.
Certificates for shares purchased hereunder shall be delivered to the
holder hereof within a reasonable time after the date on which this Warrant
shall have been exercised as aforesaid.
If this Warrant is exercised with respect to less than all of the
shares covered hereby, the holder hereof shall be entitled to receive a new
Warrant, in this form, covering the number of shares with respect to which this
Warrant shall not have been exercised.
The Company covenants that all shares of stock which may be issued upon
the exercise of rights represented by this Warrant will, upon exercise of the
rights represented by this Warrant, be duly authorized, validly issued, fully
paid and nonassessable and free from all taxes, liens and charges in respect of
the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
3. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant.
4. Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge to
the holder hereof for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the holder of this Warrant or in such name or names as may be directed by the
holder of this Warrant; provided, however, that in the event certificates for
shares of Common Stock are to be issued in a name other than the name of the
holder of this Warrant, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the holder
hereof; and provided further, that upon any transfer involved in the issuance or
delivery of any certificates for shares of Common Stock, the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
5. No Rights as Shareholders. This Warrant does not entitle the holder
hereof to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof.
6. Exchange and Registry of Warrant. This Warrant is exchangeable, upon
the surrender hereof by the registered holder at the above-mentioned office or
agency of the Company, for a new Warrant of like tenor and dated as of such
exchange.
7. Loss, Theft, Destruction or Mutilation of Warrant. In case of loss,
theft or destruction or mutilation of this Warrant, upon receipt by the Company
of evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to the Company, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new Warrant of like tenor and dated as of such cancellation,
in lieu of this Warrant.
8. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or a Sunday or shall be a legal holiday, then such
action may be taken or such right may be exercised on the next succeeding day
not a legal holiday.
9. Adjustment. In the event of any subdivision or change or
subdivisions or changes of the shares of Common Stock of the Company at any time
while this Warrant is outstanding into a greater number of shares of Common
Stock, the Company shall thereafter deliver at the time of purchase of shares of
Common Stock under this Warrant, in lieu of the number of shares of Common Stock
in respect of which the right to purchase is then being exercised, such greater
number of shares of Common Stock of the Company as would result from said
subdivision or change or subdivisions or changes had the right of purchase been
exercised before such subdivision or change or subdivisions or changes without
the holder making any additional payment or giving any other consideration
therefor. The number of shares for which this Warrant is exercisable and the
time period for exercise are subject to adjustment from time to time as follows:
In the event of any consolidation or consolidations of the shares of
Common Stock of the Company at any time while this Warrant is outstanding into a
lesser number of shares of Common Stock, the Company shall thereafter deliver,
and the holder of this Warrant shall accept, at the time of purchase of shares
of Common Stock under this Warrant, in lieu of the number of shares of Common
Stock in respect of which the right to purchase is then being exercised, such
lesser number of shares of Common Stock of the Company as would result from such
consolidation or consolidations had the right of purchase been exercised before
such consolidation or consolidations.
In the event of any reclassification or reclassifications of the shares
of Common Stock of the Company at any time while this Warrant is outstanding,
the Company shall thereafter deliver at the time of purchase of shares of Common
Stock under this Warrant the number of shares of the Company of the appropriate
class or classes resulting from said reclassification or reclassifications as
the holder would have been entitled to receive in respect of purchase of shares
of Common Stock in respect of which the right of purchase is then being
exercised had the right of purchase been exercised before such reclassification
or reclassifications.
If the Company, at any time while this Warrant is outstanding, shall
distribute any class of shares or rights, options or warrants (other than those
referred to above) or evidence of indebtedness or property (excluding cash
dividends paid in the ordinary course) to holders of shares of Common Stock of
the Company, the number of shares to be issued by the Company under this Warrant
shall, at the time of purchase, be appropriately adjusted and the holder shall
receive, in lieu of the number of shares in respect of which the right to
purchase is then being exercised, the aggregate number of shares or other
securities or property that the holder would have been entitled to receive as a
result of such event if, on the record date thereof, the holder has been the
registered holder of the number of shares of Common Stock to which the holder
was theretofore entitled upon exercise of the rights of the holder hereunder.
If the Company, at any time while this Warrant is outstanding, shall
pay any stock dividend or stock dividends upon shares of stock of the Company of
the class or classes in respect of which the right to purchase is then given
under this Warrant, then the Company shall thereafter deliver at the time of
purchase of shares under this Warrant, in addition to the number of shares of
stock of the Company in respect of which the right of purchase is then being
exercised, the additional number of shares of the appropriate class or classes
as would have been payable on the shares of stock of the Company so purchased if
the shares so purchased had been outstanding on the record date for the payment
of the said stock dividend or stock dividends.
On the happening of each and every such event, the applicable
provisions of this Warrant shall, ipso facto, be deemed to be amended
accordingly and the Company shall take all necessary action so as to comply with
such provisions as so amended.
10. Termination. This Warrant shall terminate on the earlier of: (a)
_________________, 2008, or (b) the voluntary or involuntary dissolution,
liquidation, winding up of the Company, sale of all or substantially all of the
assets of the Company, or a merger, consolidation or acquisition of the Company
in which the stockholders of the Company prior to such merger, consolidation or
acquisition receive cash or securities of another corporation which results in
the Company's stockholders not holding (by virtue of such shares or securities
issued solely with respect thereto) at least 50% of the voting power of the
surviving, continuing or purchasing entity, provided, however, that in the event
any such event or transaction described in Section 10(b) hereof is proposed, the
Company shall give at least 20 days prior written notice thereof to the holder
hereof, stating the approximate date on which such event is to take place and
the approximate date (which shall be at least 20 days after the giving of such
notice) as of which the owners of the Common Stock of record shall be entitled
to exchange their Common Stock for securities or other property deliverable upon
such event. Such notice shall provide for the release of the Company's
repurchase right with respect to shares issuable upon exercise of this Warrant
so that such shares shall no longer be subject to repurchase as of the closing
of such transaction. If any such event or transaction shall occur, this Warrant
and all rights with respect hereto shall terminate on the date such event or
transaction is closed. Notices pursuant to this paragraph shall be given by
certified mail, return receipt requested, addressed to the holder hereof at the
holder's address in the Company's records, or such other address as the holder
hereof shall advise the Company in writing.
11. Registration Rights. The shares issuable upon exercise of this
Warrant shall be included in the Company's existing piggyback registration
rights, provided that the requisite consent of the other holders of registrable
securities of the Company can be obtained. The Company agrees to use its
reasonable efforts to obtain such consent.
12. Miscellaneous.
(a) Issue Date. The provisions of this Warrant shall be
construed and shall be given effect in all respects as if it had been issued and
delivered by the Company on the date hereof. This Warrant shall constitute a
contract under the laws of the State of California and for all purposes shall be
construed in accordance with and governed by the laws of said state.
(b) Restrictions. The holder hereof acknowledges that the
Common Stock acquired upon the exercise of this Warrant shall have restrictions
upon its resale imposed by state and federal securities laws.
(c) Authorized Shares. The Company covenants that during the
period the Warrant is exercisable, it will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance
of Common Stock upon the exercise of any purchase rights under this Warrant. The
Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for shares of the
Company's Common Stock upon the exercise of the purchase rights under this
Warrant.
(d) No Impairment. The Company will not, by amendment of its
Articles of Incorporation or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate in order to
protect the rights of the holder hereof against impairment.
(e) Notices of Record Date. In case
(i) the Company shall take a record of the
holders of its Common Stock for the purposes of entitling them to receive any
dividend (other than a cash dividend in the ordinary course) or other
distribution, or any right to subscribe for, purchase or otherwise acquire any
shares or stock of any class or any other securities or property, or to receive
any other right; or
(ii) of any capital reorganization of the
Company, any reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another corporation, or any
conveyance of all or substantially all of the assets of the Company to another
corporation; or
(iii) of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, and in each such case, the Company will mail or cause to be mailed to the
holder of this Warrant a notice specifying, as the case may be, (i) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up is to
take place, and the time, if any is to be fixed, as of which the holders of
record of Common Stock shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up. Such notice shall be mailed at least thirty (30) days prior to the
date therein specified.
IN WITNESS WHEREOF, Neurocrine Biosciences, Inc. has caused this
Warrant to be executed by its officers thereunto duly authorized.
Dated: ______________
NEUROCRINE BIOSCIENCES, INC.
By:
Title:
ASSIGNMENT FORM
(To assign the foregoing warrant, execute this form and supply required
information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are
hereby assigned to:
whose address is:
Dated: , 19 .
Holder's Signature:
Holder's Address:
Note: The signature to this Assignment Form must correspond with the
name as it appears on the face of the Warrant, without alteration or enlargement
or any change whatever, and must be guaranteed by a bank or trust company.
Officers of corporations and those acting in a fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.
NOTICE OF EXERCISE
TO: NEUROCRINE BIOSCIENCES, INC.
(1) The undersigned hereby elects to purchase ____________ shares of
Common Stock of Neurocrine Biosciences, Inc. pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price in full,
together with all applicable transfer taxes, if any.
(2) Please issue a certificate of certificates representing said shares
of Common Stock in the name of the undersigned as specified below:
(Name)
(Address)
(3) The undersigned represents that the aforesaid shares of Common
Stock are being acquired for the account of the undersigned for investment and
not with a view to, or for resale in connection with, the distribution thereof
and that the undersigned has no present intention of distributing or reselling
such shares.
___________________ _____________________________
(Date) (Signature)
Exhibit 10.1
PUBLIC HEALTH SERVICE
PATENT LICENSE AGREEMENT--EXCLUSIVE
COVER PAGE
For PHS internal use only:
Patent License Number: L-259-97/0
Serial Numbers of Licensed Patents: A.) USPN 5,635,599 (=USSN 08/225,224);
B.) USSN 08/722,258 (CIPofUSSN 08/225,224); C.) USPN 4,892,827(=USSN 06/911,227)
and D.) USPN5,720,720 [ = USSN 08/616,785 (FWC of 08/112,370)].
Licensee: Neurocrine Biosciences, Inc., 3050 Science Park Road, San Diego,
California 92121.
CRADA Number (if applicable): N/A
Additional Remarks: Foreign Patent rights to the '827 Patent reside with the
inventors.
This Patent License Agreement, hereinafter referred to as the "Agreement,"
consists of this Cover Page, an attached Agreement, a Signature Page, Appendix A
(List of Patent(s) or Patent Application(s), Appendix B (Fields of Use and
Territory), Appendix C (Royalties), Appendix D (Modifications), Appendix E
(Benchmarks), Appendix F (Commercial Development Plan) and Appendix G ( PHS
Incurred Patent Prosecution Costs). The Parties to this Agreement are:
1) The National Institutes of Health ("NIH"), the Centers for Disease Control
and Prevention ("CDC"), or the Food and Drug Administration ("FDA"), agencies of
the United States Public Health Service ("PHS"), hereinafter singly or
collectively referred to as "PHS", within the Department of Health and Human
Services ("DHHS"); and
2) The person, corporation, or institution identified above and/or on the
Signature Page, having offices at the address indicated on the Signature Page,
hereinafter referred to as "Licensee".
PHS PATENT LICENSE AGREEMENT--EXCLUSIVE
PHS and Licensee agree as follows:
1. BACKGROUND
1.01 In the course of conducting biomedical and behavioral research, PHS
investigators made inventions that may have commercial applicability.
1.02 By assignment of rights from PHS employees and other inventors, DHHS, on
behalf of the United States Government, owns intellectual property rights
claimed in any United States and foreign Patent Applications or Patents
corresponding to the assigned inventions. DHHS also owns any tangible
embodiments of these inventions actually reduced to practice by PHS.
1.03 The Assistant Secretary for Health of DHHS has delegated to PHS the
authority to enter into this Agreement for the licensing of rights to these
inventions under 35 U.S.C. 200-212, the Federal Technology Transfer Act of 1986,
15 U.S.C. 3710a, and/or the regulations governing the licensing of
Government-owned inventions, 37 CFR Part 404.
1.04 PHS desires to transfer these inventions to the private sector through
commercialization licenses to facilitate the commercial development of products
and processes for public use and benefit.
1.05 Licensee desires to acquire commercialization rights to certain of these
inventions in order to develop processes, methods, or marketable products for
public use and benefit.
2. DEFINITIONS
2.01 "Benchmarks" mean the performance milestones set forth in Appendix E.
2.02 "Commercial Development Plan" means the written commercialization plan is
attached as Appendix F and/or is attached to this Agreement and/or is
incorporated by reference into this Agreement.
2.03 "Corporate Collaborator" means a non-affiliate third party to whom Licensee
has granted exclusive or non-exclusive commercialization rights, to one or more
Licensed Product(s) or Licensed Process(es), but not including exclusive or
non-exclusive commercialization rights to manufacture either Licensed Products
and/or Licensed Process(es).
2.04 "First Commercial Sale" means, subsequent to the regulatory approval in the
respective country, the initial transfer by or on behalf of Licensee or its
sublicensees of Licensed Products or the initial practice of a Licensed Process
by or on behalf of Licensee or its sublicensees in exchange for cash or some
equivalent to which value can be assigned for the purpose of determining Net
Sales.
2.05 "Government" means the Government of the United States of America.
"Licensed Fields of Use" means the fields of use identif~ed in Appendix B.
"Licensed Patent Rights" shall mean:
a) U.S. Patent Applications and Patents listed in Appendix A, all divisions and
continuations of these Applications, all Patents issuing from such Applications,
divisions, and continuations, and any reissues, reexaminations, and extensions
of all such Patents;
b) to the extent that the following contain one or more claims directed to the
invention or inventions disclosed in a) above: i) continuations-in-part of a)
above; ii) all divisions and continuations of these continuations-in-part; iii)
all Patents issuing from such continuations-in-part, divisions, and
continuations; and iv) any reissues, reexaminations, and extensions of all such
Patents;
c) to the extent that the following contain one or more claims directed to the
invention or inventions disclosed in a) above: all counterpart foreign
Applications and Patents to a) and b) above, excluding those corresponding to
United States Patent Number 4,892,827, entitled, "Recombinant Pseudomonas
Exotoxin: Construction of An Immunotoxin With Low Side Effects", Inventors; Drs.
Ira H. Pastan, Sankar Adhya and David Fitzgerald, as listed in Appendix A.
Licensed Patent Rights shall not include subject matter within b) or c) above to
the extent that such subject matter is covered by one or more claims directed to
new matter which is not the subject matter disclosed in a) above.
2.08 "Licensed Process(es)" means processes which, in the course of being
practiced would, in the absence of this Agreement, infringe one or more claims
of the Licensed Patent Rights that have not been held invalid or unenforceable
by an unappealed or unappealable judgment of a court of competent jurisdiction.
2.09 "Licensed Product(s)" means tangible materials which, in the course of
manufacture, use, or sale would, in the absence of this Agreement, infringe one
or more claims of the Licensed Patent Rights that have not been held invalid or
unenforceable by an unappealed or unappealable judgment of a court of competent
jurisdiction.
2.10 "Licensed Territory" means the geographical area identified in Appendix B.
2.11 "Net Sales" shall mean the total of all amounts invoiced by Licensee and
its authorized Affiliates and sublicensees, for sales of Licensed Product(s),
net of all separately invoiced and actually incurred charges, including (a)
credits, allowances, discounts and rebates to, and charge-backs from the account
of, such independent third parties; (b) actual freight and insurance costs
incurred in transporting Licensed Product(s) to such independent third parties;
(c) reasonable and customary cash, quantity and trade discounts and other price
reduction programs; (d) sales, use, value-added and other direct taxes incurred;
and (e) customs duties, surcharges and other government charges incurred in
connection with the exportation or importation of Licensed Product(s).
"Practical Application" means to manufacture in the case of a composition or
product, to practice in the case of a process or method, or to operate in the
case of a machine or system; and in each case, under such conditions as to
establish that the invention is being utilized and that its benefits are to the
extent permitted by law or Government regulations available to the public on
reasonable terms.
2.13 "Research License" means a nontransferable, nonexclusive license to make
and to use the Licensed Products or Licensed Processes as defined by the
Licensed Patent Rights for purposes of research and not for purposes of
commercial manufacture or distribution or in lieu of purchase.
2.14 "Affiliate" means a corporation or other business entity which, directly or
indirectly, is controlled by, controls, or is under common control with
Licensee. For this purpose, the term "control" shall mean ownership of more than
forty-eight percent (48%) of the voting stock or other ownership interest of the
corporation or other business entity, or the power to elect or appoint more than
forty-eight percent (48%) of the members of the governing body of the
corporation or other business entity.
2.15 "Optioned Field(s) of Use" means the fields of use identified in Appendix
B.
3. GRANT OF RIGHTS
3.01 PHS hereby grants and Licensee accepts, subject to the terms and conditions
of this Agreement, an exclusive license under the Licensed Patent Rights, in the
Licensed Territory to make and have made, to use and have used, and to sell and
have sold any Licensed Products in the Licensed Fields of Use and to practice
and have practiced any Licensed Processes in the Licensed Fields of Use.
3.02 Subject to Article 5, Paragraphs 5.01-5.05, PHS hereby grants and Licensee
accepts an exclusive option under the Licensed Patent Rights in the Licensed
Territory for any therapeutic application not within the Licensed Field of Use
(hereinafter defined as "Optioned Field(s) Use").
3.03 This Agreement confers no license or rights by implication, estoppel, or
otherwise under any Patent Applications or Patents of PHS other than Licensed
Patent Rights regardless of whether such Patents are dominant or subordinate to
Licensed Patent Rights.
4. SUBLICENSING
4.01 Licensee will provide PHS written notice of its intent to sublicense the
Licensed Patent Rights and a copy of the term sheet and/or pertinent
sublicensing terms within thirty (30) days [***]. However, PHS has the right to
require deletion or mod)fication of any provision(s) of such sublicensing
agreement(s) which PHS determines to be contrary to Law or Federal Statutes.
4.02 Licensee agrees that any sublicenses granted by it shall provide that the
obligations to PHS of paragraphs 6.01-6.04, 9.01-9.02, 11.01-11.02, 13.05 and
14.07-14.09 of this Agreement shall be binding upon the sublicensee as if it
were a party to this Agreement. Licensee further agrees to attach copies of
these Paragraphs to all sublicense agreements.
4.03 Any sublicenses granted by Licensee shall provide for the termination of
the sublicense, or the conversion to a license directly between such
sublicensees and PHS, at the option of the sublicensee, upon termination of this
Agreement under Article 14. Such conversion is subject to PHS approval and
contingent upon acceptance by the sublicensee of the remaining provisions of
this Agreement.
4.04 Licensee agrees to forward to PHS a copy of each fully executed sublicense
agreement postmarked within sixty (60) days of the execution of such agreement.
To the extent permitted by law, PHS agrees to maintain each such sublicense
agreement in confidence.
5. OPTION
5.01 The option period shall extend for five (5) years from the effective date
of this Agreement. Subject to the provisions of this Article 5, PHS will not
offer an exclusive or non-exclusive license or an exclusive or non-exclusive
option to any third party until the end of the option period, [***].
5.02 Licensee may exercise its option by providing a written notice to PHS prior
to expiration of the option period [***], said notice shall include a Commercial
Development Plan and Benchmarks for each therapeutic application within the
Optioned Field(s) of Use for which Licensee will undertake development.
5.03 [***], PHS will be free to license Licensed Patent Rights within the
Optioned Field(s) of Use to a third party [***] upon any terms PHS deems to be
commercially reasonable.
The Commercial Development Plan(s) and Benchmarks set forth in Paragraph 5.02
shall be subject to PHS ~ review and approval.
5.05 Upon PHS's receipt, review and approval of the Commercial Development
Plan(s) and Benchmarks, the parties to this Agreement shall meet and negotiate
in good faith the term of license for the use of the License Patent Rights for
each of the therapeutic applications be: requested by Licensee within the
Optioned Field(s) of Use. If the parties cannot agree upon terms of a license
for the Optioned Field(s) of Use within sixty (60) days after entering into
negotiations, PHS shall be free to license the Licensed Patent Rights for such
Optioned Fields of Use to a third party (a) at any time within two (2) months
from the termination of such negotiations at terms no more favorable than those
last offered to Licensee, or (b) at any time subsequent to the expiration of
three (3) months from the termination of such negotiations any terms PHS deems
to be commercially reasonable.
6. STATUTORY AND PHS REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS
6.01 PHS reserves on behalf of the Government an irrevocable, nonexclusive,
nontransferable, royalty-free license for the practice of all inventions
licensed under the Licensed Patent Rights throughout the world by or on behalf
of the Government and on behalf of any foreign government or international
organization pursuant to any existing or future treaty or agreement which the
Government is a signatory. Prior to the First Commercial Sale, Licensee agrees
to provide PHS mutually acceptable quantities of Licensed Products or materials
made through Licensed Processes for research use. PHS shall supply Licensee with
a research plan outlining its intended use of the Licensed Products or materials
made through the Licensed Processes supplied by Licensee to PHS. PHS will allow
Licensee to provide its input regarding the PHS research plan and PHS will
provide Licensee with a summary of its results of research under research plan.
6.02 Licensee agrees that products used or sold in the United States embodying
Licensed Products or produced through use of Licensed Processes shall be
manufactured substantially in the United States, unless a written waiver is
obtained in advance from PHS.
6.03 Licensee acknowledges that PHS may enter into future Cooperative Research
and Development Agreements (CRADAs) under the Federal Technology Transfer Act of
1986 that relate to the subject matter of this Agreement. Licensee agrees not to
unreasonably deny requests for a Research License from such future collaborators
with PHS when acquiring such rights is necessary in order to make a CRADA
project feasible. Licensee may request an opportunity to join as a party to the
proposed CRADA.
6.04 In addition to the reserved license of Paragraph 5.01 above, PHS reserves
the right to grant such nonexclusive Research Licenses directly or to require
Licensee to grant nonexclusive Research Licenses on reasonable terms. The
purpose of this Research License is to encourage basic research, whether
conducted at an academic or corporate facility. In order to safeguard the
Licensed Patent Rights, however, PHS shall obtain the prior written consent of
Licensee, which consent shall not be unreasonably withheld, before granting an
commercial entities a Research License. If PHS desires to provide research
samples of biological materials claimed under the Licensed Patent Rights to a
commercial entity, PHS shall only do so under an appropriate Research License or
Material Transfer Agreement.
7. ROYALTIES AND REIMBURSEMENT
7.01 Licensee agrees to pay to PHS a noncreditable, nonrefundable license issue
royalty as set forth in Appendix C within thirty (30) days from the date that
this Agreement becomes effective.
7.02 Licensee agrees to pay to PHS a [***] royalty payment as set forth in
Appendix C. The [***] royalty payment is due and payable on [***]. The [***]
royalty payment due for the first [***] of this Agreement may be prorated
according to the fraction of the calendar year remaining between the effective
date of the Agreement and the [***].
7.03 Licensee agrees to pay PHS earned royalties as set forth in Appendix C.
7.04 Licensee agrees to pay PHS benchmark royalties as set forth in Appendix C.
7.05 Licensee agrees to pay [***] as set forth in Appendix
C.
7.06 A claim of a Patent or Patent Application licensed under this Agreement
shall cease to fall within the Licensed Patent Rights for the purpose of
computing the minimum annual royalty and earned royalty payments in any given
country on the earliest of the dates that a) the claim has been abandoned but
not continued, b) the Patent expires or irrevocably lapses, or c) the claim has
been held to be invalid or unenforceable by an unappealed or unappealable
decision of a court of competent jurisdiction or administrative agency.
7.07 No multiple royalties shall be payable because any Licensed Products or
Licensed Processes are covered by more than one of the Licensed Patent Rights.
7.08 On sales of Licensed Products by Licensee to sublicensees or aff~liated
parties or on sales made in other than an arm's-length transaction, the value of
the Net Sales attributed under this Article 6 to such a transaction shall be
that which would have been received in an arm's-length transaction, based on
sales of like quantity and quality products on or about the time of such
transaction. Sales of Licensed Products for use in preclinical and clinical
testing and sales of Licensed Products, on a non-commercial basis, for research
purposes are excluded from this provision, as are limited interim transfers of
Licensed Products to Affiliates, sublicensees or incidental to a partnership or
joint venture collaboration between Licensee and a third party.
7.09 With regard to expenses associated with the preparation, filing,
prosecution, and maintenance of all Patent Applications and Patents, except for
USPN 4,892,827 (= USSN 06/911,227), included within the Licensed Patent Rights
incurred by PHS prior to the effective date of this Agreement, Licensee shall
pay to PHS, as an additional royalty, within sixty (60) days of PHS's submission
of a statement and request for payment to Licensee, the amount [***] to cover
Patent expenses previously incurred by PHS and detailed in Appendix G.
With regard to expenses associated with the preparation, filing, prosecution,
and maintenance of all Patent Applications and Patents included within the
Licensed Patent Rights incurred by PHS on or after the effective date of this
Agreement, PHS, at its sole option, may require Licensee:
(a) to pay PHS on an annual basis, within sixty (60) days of PHS's submission
of a statement and request for payment, a royalty amount equivalent to all
such Patent expenses incurred during the previous calendar year(s); or
(b) to pay such expenses directly to the law firm employed by PHS to handle
such functions. However, in such event, PHS and not Licensee shall be the
client of such law firm.
Under exceptional circumstances, Licensee may be given the right to assume
responsibility for the preparation, filing, prosecution, or maintenance of any
Patent Application or Patent included with the Licensed Patent Rights. In that
event, Licensee shall directly pay the attorneys or agents engaged to prepare,
file, prosecute or maintain such Patent Applications or Patents and shall
provide to PHS copies of each invoice associated with such services as well as
documentation that such invoices have been paid.
Licensee may elect to surrender its rights in any country of the Licensed
Territory under any Licensed Patent Rights upon sixty (60) days written notice
to PHS and owe no further obligation for Patent-related expenses incurred in
that country after the effective date of such written notice.
8. PATENT FILING, PROSECUTION, AND MAINTENANCE
8.01 Except as otherwise provided in this Article 8, PHS agrees to take
responsibility for, but to consult with, the Licensee in the preparation,
filing, prosecution, and maintenance of any Patent Applications or Patents
included in the Licensed Patent Rights and shall furnish cof relevant
Patent-related documents to Licensee.
8.02 Upon execution of this Agreement, Licensee shall assume the responsibility
for the preparation, filing, prosecution, and maintenance of United States
Patent Number 5,635,599 and United States Patent Application Serial Numbers
08/722,258 and 08/616,785 of Licensed Patent Rights, including all relevant
continuations-in-part, all divisions and continuations of these continuation
in-part; all Patents issuing from such continuation-in-part, divisions, and
continuations, and any reissues, reexaminations and extensions of all such
Patents, and shall on an ongoing basis promptly furnish copies of all
Patent-related documents to PHS. In such event, Licensee shall, subject to the
prior approval of PHS, select registered Patent attorneys or Patent agents to
provide such services on behalf of Licensee and PHS.PHS shall provide
appropriate powers of attorney and other documents necessary to undertake such
actions to the Patent attorneys or Patent agents providing such services.
Licensee and its attorneys or agents shall consult with PHS in all aspects of
the preparation, filing, prosecution and maintenance of Patent Applications and
Patents included within the Licensed Patent Rights and shall provide PHS
sufficient opportunity to comment on any document that Licensee intends to file
or to cause to be filed with the relevant intellectual property or Patent
office.
8.03 If Licensee has assumed control of the Licensed Patent Rights in accordance
with Paragraphs 7.10 and 8.02, at any time, PHS may provide Licensee with
written notice that PHS wishes to assume control of the preparation, filing,
prosecution, and maintenance of any and all Patent Applications or Patents
included in the Licensed Patent Rights. If PHS elects to assume such
responsibilities, Licensee agrees to cooperate fully with PHS, its attorneys and
agents in the preparation, filing, prosecution, and maintenance of any and all
Patent Applications or Patents included in the Licensed Patent Rights and to
provide PHS with complete copies of any and all documents or other materials
that PHS deems necessary to undertake such responsibilities. Licensee shall be
responsible for all costs associated with transferring Patent prosecution
responsibilities to an attorney or agent of PHS's choice.
8.04 Each party shall promptly inform the other as to all matters that come to
its attention that may affect the preparation, filing, prosecution, or
maintenance of the Licensed Patent Rights and permit each other to provide
comments and suggestions with respect to the preparation, filing, and
prosecution of Licensed Patent Rights, which comments and suggestions shall be
considered by the other party.
9. RECORD KEEPING
9.01 Licensee agrees to keep accurate and correct records of Licensed Products
made, used, or sold and Licensed Processes practiced under this Agreement
appropriate to determine the amount of royalties due PHS. Such records shall be
retained for at least [***] years following a given reporting period. Upon the
written request of PHS, and not more than once per calendar year, unless PHS
determines there is reason(s) for more frequent inspections, Licensee shall
permit an accountant or other designated auditor selected by PHS to inspect such
records for the sole purpose of verifying reports and payments hereunder at the
expense of PHS. The accountant or auditor shall only disclose to PHS infonnation
relating to the accuracy of reports and payments made under this Agreement. If
an inspection shows an underreporting or underpayment in excess of [***] for any
twelve (12) month period, then Licensee shall reimburse PHS for the cost of the
inspection at the time Licensee pays the unreported royalties, including any
late charges as required by Paragraph 10.08 of this Agreement. All payments
required under this Paragraph shall be due within thirty (30) days of the date
PHS provides Licensee notice of the payment due.
9.02 Licensee agrees to conduct an independent audit of sales and royalties at
least every two years if annual sales of the Licensed Product or Licensed
Processes are over [***] dollars. The audit shall address, at a minimum, the
amount of gross sales by or on behalf of Licensee during the audit period, the
amount of funds owed to the Government under this Agreement, and whether the
amount owed has been paid to the Government and is reflected in the records of
the Licensee. A report by the auditor shall be submitted promptly to PHS on
completion. Licensee shall pay for the entire cost of the audit, however,
Licensee may credit [***] of such costs for the audit against any future
royalties due to PHS under this Agreement.
10. REPORTS ON PROGRESS. BENCHMARKS. SALES. AND PAYMENTS
10.01 Prior to signing this Agreement, Licensee has provided to PHS the
Commercial Development Plan attached and/or as Appendix F, under which Licensee
intends to bring the subject matter of the Licensed Patent Rights to the point
of Practical Application. This Commercial Development Plan is attached and/or
hereby incorporated by reference into this Agreement. Based on this plan,
performance Benchmarks are determined as specified in Appendix E.
10.02 Licensee shall provide written annual reports on its product development
progress or efforts to commercialize under the Commercial Development Plan for
each of the Licensed Fields of Use within sixty (60) days after December 31 of
each calendar year. These progress reports shall include, but not be limited to:
progress on research and development, status of applications for regulatory
approvals, manufacturing, sublicensing, marketing, and sales during the
preceding calendar year, as well as plans for the present calendar year. PHS
also encourages these reports to include information on any of Licensee's public
service activities that relate to the Licensed Patent Rights. If reported
progress differs from that projected in the Commercial Development Plan and
Benchmarks, Licensee shall explain the reasons for such differences. Licensee
agrees to provide any additional information reasonably required by PHS to
evaluate Licensee's performance under this Agreement. PHS shall not unreasonably
withhold approval of any request of Licensee to extend the time periods of this
schedule if such request is supported by a reasonable showing by Licensee of
diligence in its performance under the Commercial Development Plan and toward
bringing the Licensed Products to the point of Practical
10.03 Licensee shall report to PHS the date of the First Commercial Sale in each
country in the Licensed Territory within thirty (30) days of such occurrence.
10.04 Licensee shall submit to PHS within sixty (60) days after each [***] a
royalty report setting forth for the preceding half-year period the amount of
the Licensed Products sold or Licensed Processes practiced by or on behalf of
Licensee in each country within the Licensed Territory, the Net Sales, and the
amount of royalty accordingly due. With each such royalty report, Licensee shall
submit payment of the earned royalties due. If no earned royalties are due to
PHS for any reporting period, the written report shall so state. The royalty
report shall be certified as correct by an authorized of ficer of Licensee and
shall include a detailed listing of all deductions made under Paragraph 2.10 to
determine Net Sales made under Article 7 to determine royalties due.
10.05 Licensee agrees to forward [***] to PHS a copy of such reports received by
Licensee from its sublicensees during the preceding [***] period as shall be
pertinent to a royalty accounting to PHS by Licensee for activities under the
sublicense.
10.06 Royalties due under Article 6 shall be paid in U.S. dollars. For
conversion of foreign currency to U.S. dollars, the conversion rate shall be the
New York foreign exchange rate quoted in The Wall Street Journal on the day that
the payment is due. All checks and bank drafts shall be drawn on United States
banks and shall be payable, as appropriate, for FDA or NIH licenses to the
National Institutes of Health, P.O. Box 360120, Pittsburgh, Pennsylvania
15251-6120. Any loss of exchange, value, taxes, or other expenses incurred in
the transfer or conversion to U.S. dollars shall be paid entirely by Licensee.
The royalty report required by Paragraph 9.04 of this Agreement shall accompany
each such payment and a copy of such report shall also be mailed to PHS at its
address for notices indicated on the Signature Page of this Agreement.
10.07 The parties acknowledge that Licensee and its sublicensees may be
obligated to pay taxes, fees, assessments or other charges imposed by government
authorities (the "Charges") up on royalty payments payable in connection with
the sale of Licensed Products. Licensee and its sublicensees shall provide PHS
with documentation regarding the Charges and the payment of such Charges to the
appropriate governmental authorities. Licensee and its sublicensees shall deduct
all such Charges from the royalty payments due in Paragraph 7.03 and shall
provide a listing of all such Charges in the royalty report due in Paragraph
10.04. Licensee shall pay the Charges to the appropriate governmental
authorities. Licensee shall promptly provide PHS with any documents which may
reasonably be necessary for PHS to obtain any credit to which it may be entitled
with respect to the Charges.
10.08 Late charges will be assessed by PHS as additional royalties on any
overdue payments at a rate of [***] percent per month compounded monthly. The
payment of such late charges shall not prevent PHS from exercising any other
rights it may have as a consequence of the lateness of any payment.
10.09 All plans and reports required by this Article 10 and marked confidential"
by Licensee shall, to the extent permitted by law, be treated by PHS as
commercial and financial information obtained from a person and as privileged
and confidential and any proposed disclosure of such records by the PHS under
the Freedom of Information Act, 5 U.S.C. 552 shall be subject to the
predisclosure notification requirements of 45 CFR 5.65(d).
11. PERFORMANCE
11.01 Licensee shall use its reasonable best efforts to bring the License
Products and Licensed Processes to Practical Application. "Reasonable best
efforts" for the purposes of this provision shall include Licensee's good faith
attempts to adhere to the Commercial Development Plan at Appendix F and perform
the Benchmarks at Appendix E.
The efforts of a sublicensee shall be considered the efforts of Licensee.
11.02 Upon the First Commercial Sale, until the expiration of this Agreement,
Licensee shall use its reasonable best efforts to make Licensed Products and
Licensed Processes reasonably accessible to the United States public.
12. INFRINGEMENT AND PATENT ENFORCEMENT
12.01 PHS and Licensee agree to notify each other promptly of each infringement
or possible infringement of the Licensed Patent Rights, as well as any facts
which may affect the validity, scope, or enforceability of the Licensed Patent
Rights of which either Party becomes aware.
12.02 Pursuant to this Agreement and the provisions of Chapter 29 of title 35,
United States Code, Licensee may a) bring suit in its own name, at its own
expense, and on its own behalf for infringement of presumably valid claims in
the Licensed Patent Rights; b) in any such suit, enjoin infringement and collect
for its use, damages, profits, and awards of whatever nature recoverable for
such infringement; and c) settle any claim or suit for infringement of the
Licensed Patent Rights provided, however, that [***]. If Licensee desires to
initiate a suit for Patent infringement Licensee shall notify PHS in writing. If
PHS does not [***]. PHS shall have a continuing right to intervene in such suit.
Licensee shall take no action to compel the Government either to initiate or to
join in any such suit for Patent infringement. Licensee may request the
Government to initiate or join in any such suit if necessary to avoid dismissal
of the suit. Should the Government be made a party to any such suit, Licensee
shall reimburse the Government for any costs, expenses, or fees which the
Government incurs as a result of such motion or other action, including any and
all costs incurred by the Government in opposing a such motion or other action.
In all cases, Licensee agrees to keep PHS reasonably apprised of status and
progress of any litigation. Before Licensee commences an infringement action,
Licensee shall notify PHS and give careful consideration to the views of PHS and
to any potential effects of the litigation on the public health in deciding
whether to bring suit.
12.03 In the event that a declaratory judgment action alleging invalidity or
non-infringement of any of the Licensed Patent Rights shall be brought against
Licensee or raised by way of counterclaim or affirmative defense in an
infringement suit brought by Licensee under Paragraph 12.02, pursuant to this
Agreement and the provisions of Chapter 29 of Title 35, United States Code or
other statutes, Licensee may a) defend the suit in its own name, at its own
expense, and on its own behalf for presumably valid claims in the Licensed
Patent Rights; b) in any such suit, ultimately to enjoin infringement and to
collect for its use, damages, profits, and awards of whatever nature recoverable
for such infringement; and c) settle any claim or suit for declaratory judgment
involving the Licensed Patent Rights-provided, however, that PHS and appropriate
Government Patent License Agreement authorities shall have the first right to
take such actions and shall have a continuing right to intervene in such suit.
If PHS does not notify Licensee of its intent to respond to the legal action
within sixty (60) days, Licensee will be free to do so. Licensee shall take no
action to compel the Government either to initiate or to join in any such
declaratory judgment action. Licensee may request the Government to initiate or
to join any such suit if necessary to avoid dismissal of the suit. Should the
Government be made a party to any such suit by motion or any other action of
Licensee, Licensee shall reimburse the Government for any costs, expenses, or
fees which the Government incurs as a result of such motion or other action. If
Licensee elects not to defend against such declaratory judgment action, PHS, at
its option, may do so at its own expense. In all cases, Licensee agrees to keep
PHS reasonably apprised of the status and progress of any litigation. Before
Licensee commences an infringement action, Licensee shall notify PHS and give
careful consideration to the views of PHS and to any potential effects of the
litigation on the public health in deciding whether to bring suit.
12.04 In any action under Paragraphs 12.02 or 12.03 initiated by Licensee, the
expenses including costs, fees, attorney fees, and disbursements, shall be paid
by Licensee. [***].
12.05 PHS shall cooperate fully with Licensee in connection with any action
under Paragraphs 12.02 or 12.03. PHS agrees promptly to provide access to all
necessary documents and to render reasonable assistance in response to a request
by Licensee.
13. NEGATION OF WARRANTIES AND INDEMNIFICATION
13.01 PHS offers no warranties other than those specified in Article 1.
13.02 PHS represents to the best of knowledge and belief of PHS, as of the
execution date hereof, there are no Patents or Patent Applications of PHS, other
than those within the Licensed Patent Rights, which would dominate the
manufacture, use or sale of Licensed Product(s) or the use of Licensed
Process(es).
13.03 PHS does not warrant the validity of the Licensed Patent Rights and makes
no representations whatsoever with regard to the scope of the Licensed Patent
Rights, or that the Licensed Patent Rights may be exploited without infringing
other Patents or other intellectual property rights of third parties.
13.04 PHS MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OF ANY SUBJECT MATTER DEFINED BY THE CLAIMS OF
THE LICENSED PATENT RIGHTS.
13.05 PHS does not represent that it will commence legal actions against third
parties infringing the Licensed Patent Rights.
13.06 Licensee shall indemnify and hold PHS, its employees, students, fellows,
agents, and consultants harmless from and against all liability, demands,
damages, expenses, and losses, including but not limited to death, personal
injury, illness, or property damage in connection with or arising out of
activities performed subsequent to the execution of the Agreement of a) the use
by or on behalf of Licensee, its Affiliates, sublicensees, and contractors and
their respective directors and employees of any Licensed Patent Rights, or b)
the design, manufacture, distribution, or use of any Licensed Products, Licensed
Processes or materials by Licensee, or other products or processes developed by
Licensee, its Affiliates, sublicensees, and contractors in connection with or
arising out of the Licensed Patent Rights. Licensee agrees to maintain a
liability insurance program consistent with sound business practice.
14. TERM. TERMINATION. AND MODIFICATION OF RIGHTS
14.01 This Agreement is effective when signed by all parties and shall extend to
the expiration of the last to expire of the Licensed Patent Rights on a
country-by-country basis, unless sooner terminated as provided in this Article
14.
14.02 In the event that Licensee is in default in the performance of any
material obligations under this Agreement, including but not limited to the
obligations listed in Article 14.05, and if the default has not been remedied
within ninety (90) days after the date of notice in writing of such default, PHS
may terminate this Agreement by written notice.
14.03 In the event that Licensee becomes insolvent, files a petition in
bankruptcy, has such a petition filed against it, determines to file a petition
in bankruptcy, or receives notice of a third party's intention to file an
involuntary petition in bankruptcy, Licensee shall immediately notify PHS in
writing.
14.04 Licensee shall have a unilateral right to terminate this Agreement and/or
any licenses in any country by giving PHS sixty (60) days written notice to that
effect.
14.05 PHS shall specifically have the right to terminate or modify, at its
option, this Agreement, if PHS determines that the Licensee: 1) is not executing
the Commercial Development Plan submiKed with its request for a license and the
Licensee carmot otherwise demonstrate to PHS's satisfaction that the Licensee
has taken, or can be expected to take within a reasonable time, effective steps
to achieve practical application of the Licensed Products or Licensed Processes;
2) has not achieved the Benchmarks as may be mod)fied under Paragraph 10.02; 3)
has willfully made a false statement of, or willfully omitted, a material fact
in the license application or in any report required by the license agreement;
4) has committed a material breach of a covenant or agreement contained in the
license; 5) is not keeping Licensed Products or Licensed Processes reasonably
available to the public after commercial use commences; 6) cannot reasonably
satisfy uninet health and safety needs; or 7) cannot reasonably justify a
failure to comply with the domestic production requirement of Paragraph 6.02
unless waived. In making this determination, PHS will talce into account the
normal course of such commercial development programs conducted with sound and
reasonable business practices and judgment and the ar~nual reports submitted by
Licensee under Paragraph 10.02. Prior to invoking this right, PHS shall give
written notice to Licensee providing Licensee specific notice of, and a ninety
(90) day opportunity to respond to, PHS's concerns as to the previous items 1)
to 7). If Licensee fails to alleviate PHS's concerns as to the previous items 1)
to 7) or fails to initiate corrective action to PHS's satisfaction, PHS may
terminate this Agreement.
14.06 When the public health and safety so require, and after written notice to
Licensee providing Licensee a sixty (60) day opportunity to respond, PHS'shall
have the right to require Licensee to grant sublicenses to responsible
applicants, on reasonable terms, in any Licensed Fields of Use under the
Licensed Patent Rights, unless Licensee can'reasonably demonstrate that the
granting of the sublicense would not materially increase the availability to the
public of the subject matter of the Licensed Patent Rights. PHS will not require
the granting of a sublicense unless the responsible applicant has first
negotiated in good faith with Licensee.
14.07 PHS reserves the right according to 35 U.S.C. * 209(f)(4) to terminate or
modify this Agreement if it is determined that such action is necessary to meet
requirements for public use specified by federal regulations issued after the
date of the license and such requirements are not reasonably satisfied by
Licensee.
14.08 Within thirty (30) days of receipt of written notice of PHS's unilateral
decision to modify or terminate this Agreement, Licensee may, consistent with
the provisions of 37 CFR 404.11, appeal the decision by written submission to
the designated PHS official. The decision of the designed PHS official shall be
the final agency decision. Licensee may thereafter exercise any and all
administrative or judicial remedies that may be available.
14.09 Within ninety (90) days of expiration or termination of this Agreement
under this Article 14, a final report shall be submitted by Licensee. Any
royalty payments, including those related to Patent expense, due to PHS shall
become immediately due and payable upon termination or expiration. If terminated
under this Article 14, sublicensees may elect to convert their sublicenses to
direct licenses with PHS pursuant to Paragraph 4.03.
15. GENERAL PROVISIONS
15.01 Neither Party may waive or release any of its rights or interests in this
Agreement except in writing. The failure of the Government to assert a right
hereunder or to insist upon compliance with any term or condition of this
Agreement shall not constitute a waiver of that right by the Government or
excuse a similar subsequent failure to perform any such term or condition by
Licensee.
15.02 This Agreement constitutes the entire agreement between the Parties
relating to the subject matter of the Licensed Patent Rights, and all prior
negotiations, representations, agreements, and understandings are merged into,
extinguished by, and completely expressed by this Agreement.
15.03 The provisions of this Agreement are severable, and in the event that any
provision of this Agreement shall be determined to be invalid or unenforceable
under any controlling body c such determination shall not in any way affect the
validity or enforceability of the remainin~ provisions of this Agreement.
15.04 If either Party desires a mod)fication to this Agreement, the Parties
shall, upon reasonable notice of the proposed mod)fication by the Party desiring
the change, confer in good faith to determine the desirability of such
mod)fication. No mod)fication will be effective until a written amendment is
signed by the signatories to this Agreement or their designees.
15.05 The construction, validity, performance, and effect of this Agreement
shall be governed by Federal law as applied by the Federal courts in the
District of Columbia.
15.06 All notices required or permitted by this Agreement shall be given by
prepaid, first class, registered or certified mail properly addressed to the
other Party at the address designated on the following Signature Page, or to
such other address as may be designated in writing by such other Party, and
shall be effective as of the date of the postmark of such notice.
15.07 This Agreement shall not be assigned by Licensee except a) with the prior
written consent of PHS, such consent not to be withheld unreasonably; or b) as
part of a sale or transfer of substantially the entire business of Licensee
relating to operations which concern this Agreement. Licensee shall notify PHS
within ten (10) days of any assignment of this Agreement by Licensee.
15.08 Licensee agrees in its use of any PHS-supplied materials to comply with
all applicable statutes, regulations, and guidelines, including Public Health
Service and National Institutes of Health regulations and guidelines. Licensee
agrees not to use the materials for research involving human subjects or
clinical trials in the United States without complying with 21 CFR Part 50 and
45 CFR Part 46. Licensee agrees not to use the materials for research involving
human subjects or clinical trials outside of the United States without notifying
PHS, in writing, of such research or trials and complying with the applicable
regulations of the appropriate national control authorities. Written
not)fication to PHS of research involving human subjects or clinical trials
outside of the United States shall be given no later than sixty (60) days prior
to commencement of such research or trials.
15.09 Licensee acknowledges that it is subject to and agrees to abide by the
United States laws and regulations (including the Export Administration Act of
1979 and Arms Export Control Act) controlling the export of technical data,
computer software, laboratory prototypes, biological material, and other
commodities. The transfer of such items may require a license from the cognizant
Agency of the U.S. Government or written assurances by Licensee that it shall
not export such items to certain foreign countries without prior approval of
such agency. PHS neither represents that a license is or is not required or
that, if required, it shall be issued.
15.10 Licensee agrees to mark the Licensed Products or their packaging sold in
the United States with all applicable U.S. Patent numbers and similarly to
indicate "Patent Pending" status. All Licensed Products manufactured in, shipped
to, or sold in other countries shall be marked in such a manner as to preserve
PHS Patent rights in such countries.
15.11 By entering into this Agreement, PHS does not directly or indirectly
endorse any product or service provided, or to be provided, by Licensee whether
directly or indirectly related to this Agreement. Licensee shall not state or
imply that this Agreement is an endorsement by the Government, PHS, any other
Government organizational unit, or any Government employee. Additionally,
Licensee shall not use the names of NIH, CDC, PHS, or DHHS or the Government or
their employees in any advertising, promotional, or sales literature without the
prior written consent of PHS.
15.12 The Parties agree to attempt to settle amicably any controversy or claim
arising under this Agreement or a breach of this Agreement, except for appeals
of modifications or termination decisions provided for in Article 13. Licensee
agrees first to appeal any such unsettled clad or controversies to the
designated PHS official, or designee, whose decision shall be considered the
final agency decision. Thereafter, Licensee may exercise any administrative or
judicial remedies that may be available.
15.13 Nothing relating to the grant of a license, nor the grant itself, shall be
construed to confer upon any person any immunity from or defenses under the
antitrust laws or from a charge of Patent misuse, and the acquisition and use of
rights pursuant to 37 CFR PaTt 404 shall not be immuniz~ from the operation of
state or Federal law by reason of the source of the grant.
15.14 Paragraphs 4.03, 9.01-9.02, 10.06-10.08, 13.01-13.05, 14.08, 14.09, and
l5.12 of this Agreement shall survive termination of this Agreement.
PHS PATENT LICENSE AGREEMENT--EXCLUSIVE
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this agreement on the dates set
forth below. The Effective Date of this Agreement shall mean the date on which
the last party to this Agreement signs. Any communication or notice to be given
shall be forwarded to the respective addresses listed below.
FOR PHS
/s/ Jack Spiegle, Ph.D May 7, 1998
Director, Division of Technology Development and Transfer
Office of Technology Transfer
National Institutes of Health
Mailing Address for Notices:
Office of Technology Transfer
National Institutes of Health
6011 Executive Boulevard, Suite 325
Rockville, Maryland 20852
FOR LICENSEE (The undersigned expressly certifies or affirms that the contents
of any statements of LICENSEE, made or referred to in this document are truthful
and accurate.)
/s/ Gary Lyons May 7, 1998
President and C.E.O.
Neurocrine Biosciences, Inc.
Mailing Address for Notices:
Neurocrine Biosciences, Inc.
Attn.: Gary A. Lyons
President and C.E.O.
3050 Science Park Road
San Diego, California 92121
APPENDIX A--Patent(s) or Patent Application(s)
Licensed Patent Rights
USPN 5,635,599 (= USSN 08/225,224), Entitled, "Circularly Permuted Ligands And
Circularly Permuted Fusion Proteins", Inventors: Drs. Ira H. Pastan, Robert
Kreitman, and Raj K. Puri.
USSN 08/722,258 (= CIP of USSN 08/225,224), Entitled, "Circularly Permuted
Ligands and Circularly Permuted Chimeric Molecules", Drs. Ira H. Pastan and
Robert Kreitman.
USPN 4,892,827 (= USSN 06/911,227), Entitled, "Recombinant Pseudomonas Exotoxin:
Construction of an Active Immunotoxin with Low Side Effects", Inventors: Drs.
Ira H. Pastan, Sankar Adhya, and David Fitzgerald, - excluding any foreign
equivalents corresponding to 4,892,827 (= USSN 06/911,227).
USSN 08/616,785, Entitled "Convention-enhanced Drug Delivery", Inventors: Drs.
Douglas W. Laske, Edward H. Oldfield, Richard H. Bobo, Robert L. Denrick, and
Paul F. Morrison.
Licensed Fields of Use:
The use of Interleukin-4/Cytotoxin Fusion Proteins for the Therapeutic Treatment
of Cancer.
Licensed Territory:
Worldwide
Optioned Field(s) of Use:
The use of the Licensed Patent Rights for a therapeutic application(s) of
Interleukin4/Cytotoxin Fusion Proteins outside of the Licensed Fields of Use.
APPENDIX C--Royalties
Licensee agrees to pay to PHS a noncreditable, nonrefundable license issue
royalty in the amount of [***] housand dollars [***].
Licensee agrees to pay to PHS a nonrefundable minimum annual royalty in the
amount of ten thousand dollars ($10,000.00) for each year this Agreement is in
[***].
Licensee agrees to pay PHS earned royalties on Net Sales as follows:
A. [***] on Net Sales of Licensed Products made, have made, used, or sold by
Licensee or its sublicensees in the United States and Licensee or its
sublicensees shall be entitled to a [***] credit against the earned royalty rate
for each [***] of royalty which Licensee must pay to other unaffiliated
licensors for all therapeutically active ingredients required for the
manufacture or sale of Licensed Products except for royalty which Licensee must
pay to other unaffiliated licensors for all counterpart foreign Applications and
Patents corresponding to United States Patent Number 4,892,827, entitled,
"Recombinant Pseudomonas Exotoxin: Construction Of An Immunotoxin With Low Side
Effects", inventors; Pastan, A&ya and Fitzgerald, as listed in Appendix A.
However, in no event shall the earned royalty due to PHS for the sale of
Licensed Products fall below [***].
B. [***] on Net Sales of Licensed Products made, have made, used, or
sold by Licensee or its sublicensees in the Licensed Territory outside of the
United States.
Licensee agrees to pay PHS benchmark royalties as follows:
[***]
PHS and Licensee agree to the following modifications to the Articles and
Paragraphs of this Agreement:
NONE DOES NOT APPLY/ NO MODIFICATIONS OR AMENDMENTS ARE HEREBY MADE TO THIS
AGREEMENT.
APPENDIX E - Benchmarks and Performance
Licensee agrees to the following Benchmarks for its performance under this
Agreement and, within ten (10) days of Licensee achieving a Benchmark, shall
notify PHS in writing that a given Benchmark has been achieved.
[***]
APPENDIX F--Commercial Development Plan
See Neurocrine Biosciences, Inc.'s License Application for L-259-97/0.
The Neurocrine Bioscience, Inc. "Commercial Development Plan" is attached to
this Agreement and/or hereby incorporated by reference into this Agreement.
APPENDIX G--PHS Reimbursable Patent Prosecution Costs
As set forth in Section 7.09 of this Agreement.
1. USPN 5,635,599 (= USSN 08/225,224), Entitled, "Circularly Permuted Ligands
And Circularly Permuted Fusion Proteins", Inventors: Drs. Ira H. Pastan, Robert
Kreit~nan, and Raj K. Puri.
[***]
2. USSN 08/722,258 (= CIP of USSN 08/225,224), Entitled, "Circularly Permuted
Ligands and Circularly Permuted Chimeric Molecules", Drs. Ira H. Pastan and
Robert Kreitman.
[***]
3. USSN 08/616,785, Entitled "Convention-enhanced Drug Delivery", Inventors:
Drs. Douglas W. Laske, Edward H. Oldfield, Richard H. Bobo, Robert L. Denrick,
and Paul F. Morrison.
[***]
TOTAL AMOUNT: [***]
Exhibit 10.2
PASTAN/FITZGERALD AND NEUROCRINE BIOSCIENCES, INC.
PATENT LICENSE AGREEMENT
PATENT LICENSE AGREEMENT dated as of April 28, 1998, between Ira Pastan and
David J. FitzGerald (collectively, "Licensor") and Neurocrine Biosciences, Inc.,
a California corporation having an office at 3050 Science Park Road, San Diego,
California 92121 ("Licensee").
Licensor and Licensee agree as follows:
1. DEFINITIONS
1.01 "Affiliate" of either party to this Agreement means any person,
firm, or corporation which controls, is controlled by or is
under common control with such party. Control means either the
direct or indirect ownership of forty eight percent (48%) or
more of the voting stock of the subject entity.
1.02 "Licensed Patent Rights" means patent applications and patents
listed in Appendix A (together with all counterpart applications
and patents in other countries, if any), all divisions and
continuations of these applications, all patents issuing from
such applications, divisions, and continuations, and any
reissues, reexaminations, and extensions of all such patents.
For the avoidance of doubt, counterpart patent applications and
patents in the United States are not owned by Licensor and
therefore are not included in Licensed Patent Rights.
1.03 "Licensed Product(s)" means tangible materials which, in the
course of manufacture, use or sale would, in the absence of this
Agreement, infringe one or more claims of the Licensed Patent
Rights that have not been held invalid or unenforceable by an
unappealed or unappealable judgment of a court of competent
jurisdiction.
1.04 "Licensed Territory" means all countries in the world, excluding
the United States.
1.05 "Licensor Representative" means Dr. David FitzGerald, who is
authorized to act on behalf of Licensor in connection with this
Agreement.
1.06 "Net Sales" means the total gross receipts for sales of Licensed
Products by or on behalf of Licensee or its sublicensee and from
leasing, renting, or otherwise making Licensed Products
available to others without sale or other dispositions, whether
invoiced or not, less returns and allowances actually granted,
packing costs, insurance costs, freight out, taxes or excise
duties imposed on the transaction (if separately invoiced),
wholesaler and cash discounts in amounts customary in the trade,
credits, chargebacks, rebates or refunds incurred or granted
pursuant to legal or contractual requirements. No deductions
shall be made for commissions paid to individuals, whether they
be with independent sales agencies or regularly employed by
Licensee and on its payroll, or for the cost of collections. For
the avoidance of doubt, sales of Licensed Products, whether or
not manufactured in the Licensed Territory pursuant to the
license hereunder, in the United States (which is not part of
the Licensed Territory) shall not give rise to Net Sales for all
purposes of the Agreement.
1.07 "First Commercial Sale" means the initial transfer by or on
behalf of Licensee of Licensed Products in exchange for cash or
some equivalent to which value can be assigned for the purpose
of determining Net Sales.
1.08 "Licensed Fields of Use" means IL-4 conjugated with pseudomonas
exotoxin for the therapeutic treatment of cancer.
2. GRANT OF RIGHTS
2.01 Licensor hereby grants and Licensee accepts, subject to the
terms and conditions of this Agreement, an exclusive license to
Licensee under the Licensed Patent Rights in the Licensed
Territory to make and have made, to use and have used, and to
sell and have sold any Licensed Products in the Licensed Fields
of Use.
2.02 Licensee shall have the right to grant sublicenses. Any
sublicenses granted by Licensee shall provide for the
termination of the sublicense, or the conversion to a license
directly between such sublicensee and Licensor, at the option of
the sublicensee, upon termination of this Agreement. Such
conversion is subject to the approval of Licensor and contingent
upon acceptance by the sublicensee of the remaining provisions
of this Agreement.
2.03 Licensor hereby grants Licensee the exclusive option, for a
period of two (2) years from the completion of Phase II clinical
trials, to obtain an exclusive license to the use of the
Licensed Patent Rights for IL-4 conjugated with pseudomonas
exotoxin in all therapeutic applications outside of the Licensed
Fields of Use. In the event that Licensee provides written
notice to Licensor of its desire to exercise such an option, the
parties shall meet and negotiate in good faith the terms of such
a license. If the parties cannot agree upon the terms of the
license within ninety (90) days after entering such
negotiations, Licensor shall be free to license such Licensed
Patent Rights to a third party upon terms no more favorable than
those last offered to Licensee.
2.04 This Agreement confers no license or rights by implication,
estoppel, or otherwise under any patent applications or patents
of Licensor other than the Licensed Patent Rights regardless of
whether such patents are dominant or subordinate to Licensed
Patent Rights.
3. ROYALTIES AND REIMBURSEMENT
3.01 Licensee agrees to pay to Licensor a license issue royalty and
certain milestone payments as set forth in Appendix B within
thirty (30) days from the date that this Agreement becomes
effective or the applicable milestone is achieved, as the case
may be.
3.02 Licensee agrees to pay to Licensor a nonrefundable minimum
annual royalty as set forth in Appendix B. The minimum annual
royalty is due and payable on each anniversary of the date
hereof for a period not to exceed three (3) years.
3.03 Licensee agrees to pay to Licensor earned royalties as set
forth in Appendix B.
3.04 Licensee agrees to pay to Licensor an option fee as set forth
in Appendix B for the second year of the exclusive option
outlined in Section 2.03. Licensee will notify Licensor of its
intention to maintain the option for the second year and will
pay the fee within thirty (30) days of completion of the first
year of the exclusive option.
3.05 A claim of a patent licensed under this Agreement shall cease to
fall within the Licensed Patent Rights for the purpose of
computing the minimum annual royalty and earned royalty payments
in any given country on the earliest of the dates that a) the
claim has been abandoned but not continued, b) the patent
expires, c) the patent is no longer maintained by the Licensor,
d) all claims of the Licensed Patent Rights have been held to be
invalid or unenforceable by an unappealed or unappealable
decision of a court of competent jurisdiction or administrative
agency, or e) it has been pending longer than the later of: (i)
seven (7) years from the date of filing of the earliest asserted
priority patent application; or (ii) seven (7) years from the
date of the request for examination in a country in which such a
request is necessary.
3.06 No multiple royalties shall be payable because any Licensed
Products or Licensed Processes are covered by more than one of
the Licensed Patent Rights.
3.07 In the event that Licensee elects to take a license under one or
more patent rights of a third party in order to make, have made,
use, or sell a Licensed Product within the Licensed Field of
Use, then Licensee shall be entitled to reduce earned royalty
payments to Licensor under Paragraph 3.03 by one half of the
actual amount paid to such third parties, provided that the
royalty payable to Licensor shall not be reduced to less than
one half of the amount which would otherwise be due in that
calendar year.
3.08 On sales of Licensed Products by Licensee in other than an
arm's- length transaction, the value of the Net Sales attributed
under this Article 3 to such a transaction shall be that which
would have been received in an arm's-length transaction, based
on sales of like quantity and quality products on or about the
time of such transaction. The exclusive license hereunder is
granted to Licensee and its Affiliates. Accordingly,
inter-company sales among them will not be subject to the
imputed sales provision of this Paragraph.
4. RECORD KEEPING
4.01 Licensee agrees to keep accurate and correct records of Licensed
Products made, used, or sold under this Agreement appropriate to
determine the amount of royalties due Licensor. Such records
shall be retained for at least [***] following a given reporting
period. They shall be available during normal business hours for
inspection at the expense of Licensor by an accountant or other
designated auditor selected by Licensor for the sole purpose of
verifying reports and payments hereunder. The accountant or
auditor shall only disclose to Licensor information relating to
the accuracy of reports and payments made under this Agreement.
If an inspection shows an underreporting or underpayment in
excess of five percent (5%) for any twelve (12) month period,
then Licensee shall reimburse Licensor for the cost of the
inspection at the time Licensee pays the unreported royalties,
including any late charges as required by Paragraph 5.06 of this
Agreement. All payments required under this Paragraph shall be
due within thirty (30) days of the date Licensor provides
Licensee notice of the payment due.
5. REPORTS ON SALES AND PAYMENTS
5.01 From the date of first commercial sale, Licensee shall submit to
Licensor within sixty (60) days after [***] a royalty report
setting forth for the preceding [***] period the amount of the
Licensed Products sold by or on behalf of Licensee in each
country within the Licensed Territory, the Net Sales, and the
amount of royalty accordingly due. With each such royalty
report, Licensee shall submit payment of the earned royalties
due. If no earned royalties are due to Licensor for any
reporting period, the written report shall be certified as
correct by an authorized officer of Licensee and shall include a
detailed listing of all deductions made under Paragraph 1.06 to
determine Net Sales made under Article 3 to determine royalties
due.
5.02 Royalties and all other payments due under Article 3 shall be
paid in U.S. dollars, by wire transfer of funds to an account at
a commercial bank in New York City or Washington, D.C. as
designated by the Licensor Representative. For conversion of a
foreign currency to U.S. Dollars, the conversion rate shall be
the rate quoted in the Wall Street Journal on the day that the
payment is due (i.e., the last business day of the related [***]
period). Any loss of exchange, value, taxes, or other expenses
incurred in the transfer of conversion to U.S. dollars shall be
paid entirely by Licensee. The royalty report required by
Paragraph 5.01 of this Agreement shall be sent to the Licensor
Representative, at the address for notices indicated on the
signature page hereof, concurrently with each such payment.
6. PERFORMANCE
6.01 Licensee shall use its reasonable best efforts to introduce the
Licensed Products into the commercial market as soon as
practicable.
7. INFRINGEMENT AND PATENT ENFORCEMENT
7.01 Licensor and Licensee agree to notify each other promptly of
each infringement or possible infringement, as well as any facts
which may affect the validity, scope, or enforceability of the
Licensed Patent Rights of which either Party becomes aware.
7.02 If Licensor does not initiate legal action or otherwise abate an
infringement of the Licensed Patent Rights within sixty (60)
days of written notification to the Licensor Representative from
Licensee of the existence of a substantial infringement,
Licensee shall have the right (but not the obligation) to
institute infringement litigation against the infringer. If
Licensee institutes such infringement litigation within six (6)
months, Licensee shall be entitled, if applicable, to a
reduction in royalty rate as provided in Appendix B.
7.03 In the event that a declaratory judgment action alleging
invalidity of any of the Licensed Patent Rights shall be brought
against Licensor, Licensor agrees to notify Licensee that an
action alleging invalidity has been brought. Licensor represents
that it will either commence legal action to defend against such
a declaratory action alleging invalidity, or will allow Licensee
to undertake such defense, at its expense. Licensee shall take
no action to compel Licensor either to initiate or to join in
any such declaratory judgment action. Should Licensor be made a
party to any such suit by motion or any other action of
Licensee, Licensee shall reimburse Licensor for any costs,
expenses, or fees which Licensor incurs as a result of its
defending against such motion or other action taken in response
to the motion.
8. NEGATION OF WARRANTIES AND INDEMNIFICATION
8.01 Licensor does not warrant the validity of the Licensed Patent
Rights and makes no representations whatsoever with regard to
the scope of the Licensed Patent Rights, or that the Licensed
Patent Rights may be exploited without infringing other patents
or other intellectual property rights of third parties. However,
Licensor warrants that, as of the execution date hereof, there
are no patents or patent applications owned or controlled by
Licensor, other than those within the Licensed Patent Rights,
which would dominate the manufacture, use or sale of Licensed
Products.
8.02 LICENSOR MAKE NO WARRANTIES, EXPRESSED OR IMPLIED, OR
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY
SUBJECT MATTER DEFINED BY THE CLAIMS OF THE LICENSED PATENT
RIGHTS.
8.03 Licensor does not represent that it will commence legal actions
against third parties infringing the Licensed Patent Rights.
8.04 Licensee shall indemnify and hold Licensor, its employees,
students, fellows, agents and consultants harmless from
and against all liability, demands, damages, expenses, and
losses, including but not limited to death, personal injury,
illness, or property damage in connection with or arising out
of activities performed subsequent to the execution of the
Agreement directly related to a) the use by or on behalf of
Licensee, its sublicensee, directors, or employees of any
Licensed Patent Rights, or b) the design, manufacture,
distribution, or use of any Licensed Products or other
products or processes developed in connection with or
arising out of the Licensed Patent Rights. For the avoidance
of doubt, Licensee shall be required to indemnify Licensor
and the other specified parties, under either clause (a) or
clause (b) above, only with respect to Licensed Products made or
sold, or Licensed Patent Rights otherwise used, in each case
by or on behalf of Licensee or its Affiliates. Licensee
agrees to maintain a liability insurance program consistent
with sound business practice.
9. TERMINATION AND MODIFICATION OF RIGHTS
9.01 This Agreement is effective when signed by all parties and shall
extend on a country-by-country basis to the expiration of the
last to expire of the Licensed Patent Rights unless sooner
terminated as provided in this Article 9.
9.02 In the event that Licensee is in default in the performance of
any material obligations under this Agreement, and if the
default has not been remedied within ninety (90) days after the
date of notice in writing of such default, Licensor may
terminate this Agreement by written notice.
9.03 At least thirty (30) days prior to filing a petition in
bankruptcy, Licensee must inform Licensor in writing of its
intention to file the petition in bankruptcy or of a third
party's intention to file an involuntary petition in bankruptcy.
9.04 In the event that Licensee becomes insolvent, files a petition
in bankruptcy, has such a petition filed against it, determines
to file a petition in bankruptcy, or receives notice of a third
party's intention to file an involuntary petition in bankruptcy,
Licensee shall immediately notify Licensor in writing.
Thereafter, Licensor shall have the right to terminate this
Agreement by giving Licensee sixty (60) days written notice.
9.05 Licensee shall have a unilateral right to terminate this
Agreement and/or its rights in any country by giving Licensor
sixty (60) day's written notice to that effect.
9.06 Within ninety (90) days of termination of this Agreement under
this Article 9 or expiration under Paragraph 9.01, a final
report shall be submitted by Licensee. Any royalty payments due
to Licensor become immediately due and payable upon termination
or expiration of this Agreement. If this Agreement is terminated
prior to expiration as contemplated in Paragraph 9.01, Licensee
shall return all Licensed Products or other materials included
within the Licensed Patent Rights to Licensor or provide
Licensor with certification of their destruction.
9.07 Paragraphs 4.01, 5.02, 8.02 and 8.04 of this Agreement shall
survive termination of this Agreement.
10. GENERAL PROVISIONS
10.01 Neither Party may waive or release any of its rights or
interests in this Agreement except in writing. The failure of
either party to assert a right hereunder or to insist upon
compliance with any term or condition of this Agreement shall
not constitute a waiver of that right by such party or excuse a
similar subsequent failure to perform any such term or condition
by the other party.
10.02 This Agreement constitutes the entire agreement between the
parties relating to the subject matter of the Licensed Patent
Rights, and all prior negotiations, representations, agreements,
and understandings are merged into, extinguished by, and
completely expressed by this Agreement.
10.03 The provisions of this Agreement are severable, and in the event
that any provision of this Agreement shall be determined to be
invalid or unenforceable under any controlling body of law, such
determination shall not in any way affect the validity of
enforceability of the remaining provisions of this Agreement.
10.04 If either party desires a modification to this Agreement, the
parties shall, upon reasonable notice of the proposed
modification by the party desiring the change, confer in good
faith to determine the desirability of such modification. No
modification will be effective until a written amendment is
signed by the signatories to this Agreement or their designees.
10.05 The construction, validity, performance, and effect of this
Agreement shall be governed by Federal law as applied by the
Federal courts in the District of Columbia.
10.06 All notices required or permitted by this Agreement shall be
given by prepaid, first class, registered or certified mail
properly addressed to the other party (to the Licensor
Representative, in the case of notices to Licensor) at the
address designated on the following signature page, or to such
other address as may be designated in writing by such other
party, and shall be effective as of the date of the postmark of
such notice.
10.07 This Agreement shall not be assigned by Licensee except a) with
the prior written consent of Licensor; or b) as part of a sale
or transfer of substantially the entire business of Licensee
relating to operations which concern this Agreement. Licensee
shall notify Licensor within ten (10) days of any assignment of
this Agreement by Licensee.
10.08 All Licensed Products manufactured in, shipped to, or sold in
the Licensed Territory shall be marked in such a manner as to
preserve Licensor patent rights therein.
10.09 By entering into this Agreement, Licensor does not directly or
indirectly endorse any product or service provided, or to be
provided, by Licensee whether directly or indirectly related to
this Agreement. Licensee shall not state or imply that this
Agreement is an endorsement by Licensor. Additionally, Licensee
shall not use the names of Licensor in any advertising,
promotional, or sales literature without the prior written
consent of Licensor.
10.10 The parties agree to attempt to settle amicably any controversy
or claim arising under this Agreement or a breach of this
Agreement. In this regard, if a dispute arises between the
parties relating to the interpretation or performance of this
Agreement or the grounds for the termination thereof, the
parties agree to hold a meeting, attended by individuals with
decision-making authority regarding the dispute, to attempt in
good faith to negotiate a resolution of the dispute prior to
pursuing other available remedies. If, within 30 days after such
meeting, the parties have not succeeded in negotiating a
resolution of the dispute, such dispute shall be submitted to
non-binding arbitration under the then current Licensing
Agreement Arbitration Rules of the American Arbitration
Association ("AAA"), with a panel of three arbitrators in
Chicago, IL. Such arbitrators shall be selected by mutual
agreement of the parties or, failing such agreement, shall be
selected according to the aforesaid AAA rules. The parties shall
bear the costs of arbitration equally unless the arbitrators,
pursuant to their right, but not their obligation, require the
non-prevailing party to bear all or any unequal portion of the
prevailing party's costs. The arbitrators will be instructed to
prepare and deliver a written, reasoned opinion conferring their
decision. The rights and obligations of the parties to arbitrate
any dispute relating to the interpretation or performance of
this Agreement or the grounds for the termination thereof shall
survive the expiration or termination of this Agreement for any
reason.
10.11 [***].
This Paragraph 10.11 does not apply to any license agreements
executed by Licensor prior to the effective date of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement of the date
first above written.
Licensor: Licensee:
Address of the Licensor Representative for notices:
/s/ David FitzGerald /s/ Gary Lyons
1202 Azalea Drive President and CEO
Rockville, MD 20850 Neurocrine Biosciences, Inc.
3050 Science Park Road
San Diego, CA 92121
/s/ Ira Pastan
APPENDIX A - PATENTS AND PATENT APPLICATIONS
(as of April 7, 1995)
Country Application No. Filing Date Status
Australia 80211/87 09/22/87 Patent No. 618722 issued
Canada 547,614 09/23/87 Allowed
Denmark 2764/88 09/22/87 Pending
Europe 97113929.1 09/23/87 Patent No. 0261671 issued
Europe 93113917.4 08/31/93 Divisional pending
Finland 891321 09/22/87 Pending
Ireland 2552/87 09/22/87 Pending; div. to be filed
Israel 83971 09/22/87 Patent No. 83971 issued
Israel 105160 03/24/93 Divisional pending
Japan 505905/87 09/22/87 Pending
Korea 88-700570 09/22/87 Pending
Norway 882269 09/22/87 Pending
New Zealand 221923 09/23/87 Patent No. 221923 issued
Portugal 85777 09/23/87 Patent No. 85777 issued
Taiwan 76105894 10/02/87 Patent No. 54275 issued
South Africa 87/7153 09/23/87 Patent 87/7153 issued
APPENDIX B - PAYMENTS
Signing Fee
Licensee agrees to pay to Licensor a noncreditable, nonrefundable license issue
fee in the amount of [***].
[***] Royalty
Licensee agrees to pay Licensor a yearly [***] Royalty in the amount of [***]
the first year, [***] the second year, and [***] the third year subsequent to
execution of the Agreement. [***].
Royalties on Net Sales
Licensee agrees to pay Licensor earned royalties on Net Sales as follows: [***]
of Net Sales outside of the United States.
Milestone Payments
Licensee agrees to pay Licensor milestone payments as follows:
[***]
Option Fee
In the event that Licensee elects to exercise its right to maintain the second
year of the exclusive option outlined in Section 2.03, Licensee shall notify
Licensor within thirty (30) days of completion of the first year of the option.
Licensee agrees to pay Licensor [***] for the second year of the option.
Sublicensing Fee
Upon the first sublicensing of the Licensed Patent Rights in the Licensed
Territory, Licensee shall pay to Licensor the sum of [***].
Share of Patent Prosecution Costs
[***] incurred subsequent to the date of this Agreement for the prosecution
and/or maintenance of the Licensed Patent Rights, which expenses are not
otherwise reimbursed by a third party, [***].
Reduction of Royalty Rate During Infringement Litigation
If the Licensee has instituted an infringement litigation as provided in Section
7.02, Licensee shall be entitled reduction in royalty rate of [***] for the
period of the infringement litigation.
Exhibit 10.3
SUB-LICENSE AND DEVELOPMENT AGREEMENT
THIS AGREEMENT is effective this 30th day of June 1998, by and between
DOV Pharmaceutical, Inc., a New Jersey corporation, with offices at 1 Parker
Plaza, Suite 1500 Fort Lee, New Jersey 07024 ("DOV") and Neurocrine Biosciences,
Inc., a Delaware corporation with offices at 3050 Science Park Road, Suite 405,
San Diego, California 92121 ("Neurocrine").
WITNESSETH:
WHEREAS, DOV possesses rights to a certain chemical compound and to
pharmaceutical products to be processed from the Compound, such rights arising
from the License Agreement (defined below); and
WHEREAS, Neurocrine desires to acquire, and DOV is willing to grant to
Neurocrine, an exclusive sublicense to the patent rights and know-how, relating
to that certain chemical compound.
NOW THEREFORE, in consideration of the promises and of the mutual
covenants and obligations set forth herein, the parties hereto agree as follows:
ARTICLE 1
Definitions
1.1 "Affiliate" means with respect to a party, any other entity
which directly or indirectly controls, is controlled by, or is
under common control with, such party. An entity or party
shall be regarded as in control of another entity if it owns,
or directly or indirectly controls, at least fifty percent
(50%) of the voting stock or other ownership interest of such
entity, or if it directly or indirectly possesses the power to
direct or cause the direction of the management and policies
of the other entity by any means whatsoever.
1.2 "Compound" means the chemical compound described in Exhibit 1.
1.3 "DOV's Corporate Office" means 1 Parker Plaza, Suite 1500,
Fort Lee, New Jersey.
1.4 "FDA" means the United States Food and Drug Administration.
1.5 "IND" means an investigational new drug as defined in 21
CFR Part 312.
1.6 "Know-How" means all ideas, inventions, data, instructions,
processes, formulas, expert opinions and information,
including, without limitation, biological, chemical,
pharmacological, toxicological, pharmaceutical, physical and
analytical, clinical, safety, manufacturing and quality
control data and information, in each case, which are
necessary or useful for and are specific to the research,
design, development, testing, use, manufacture or sale of the
Compound or a Licensed Product.
1.7 "License Agreement" means the license agreement between DOV
and American Cyanamid Company ("ACY") dated May 29, 1998
attached as Exhibit 2.
1.8 "Licensed Product"means any product based upon or derived from
the Compound and approved for sale by the USFDA or its foreign
equivalent.
1.9 "NDA" means a new drug application submitted to the United
States Food and Drug Administration in accordance with Section
505 of the Federal Food, Drug and Cosmetic Act and its
implementing regulations, or a comparable filing in Japan or
within the EU.
1.10 "Net Sales" means the gross amount invoiced for the Licensed
Product sold by Neurocrine or its Affiliate or its
sublicensee, less:
(1) transportation charges or allowances, if any;
(2) trade, quantity or cash discounts, service allowances
and broker's or agent's commissions, but not
salaries, commissions, bonuses or other incentive pay
to in-house sales or other personnel, if any, allowed
or paid;
(3) credits or allowances, if any, given or made on
account of price adjustments, returns, bad debts,
off-invoice promotional discounts, rebates, and any
or all federal, state or local government rebates
whether in existence now or enacted at any time
during the term of the Agreement, recalls, or
destruction requested or made by an appropriate
government agency; and
(4) Any tax, excise or governmental charge upon or
measured by the sale, transportation, delivery or use
of the Licensed Product; provided that, other than
pursuant to Section 1.5(e) below, Net Sales shall in
no event be less than 80% of Gross Sales.
(5) In the case of discounts on "bundles" of products or
services which include Licensed Products or the
Compound, the selling Party may, with notice to the
other Party, calculate Net Sales by discounting the
bona fide list price of such product by the average
percentage discount of all products of the selling
party and/or its Affiliates or sublicensees in a
particular "bundle", calculated as follows:
Average percentage
discount on a = (1-A/B) x 100
particular "bundle"
where A equals the total discounted price of a particular
"bundle" of products, and B equals the sum of the undiscounted
bona fide list prices of each unit of every product in such
"bundle". The selling party shall provide the other party
documentation, reasonably acceptable to the other party,
establishing such average discount with respect to each
"bundle", Net Sales shall be based on the undiscounted list
price of the Licensed Products or the Compound in the
"bundle". If a Licensed Product or the Compound in a "bundle"
is not sold separately and no bona fide list price exists for
such Licensed Product or the Compound, the Parties shall
negotiate in good faith an imputed list price for such
Licensed Product or the Compound, and Net Sales with respect
thereto shall be based on such imputed list price.
1.11 "Phase I" means that portion of the FDA submission and
approval process that provides for the first introduction into
humans of the Licensed Product with the purpose of determining
human toxicity, metabolism, absorption, elimination and other
pharmacological action as more fully defined in 21 C.F.R.
ss.213.2(a).
1.12 "Phase II" means that portion of the FDA submission and
approval process that provides for the initial trials of the
Licensed Product on a limited number of patients for the
purposes of determining dose and evaluating safety and
efficacy in the proposed therapeutic indication as more fully
defined as 21 C.F.R. ss.213.21(b).
1.13 "Phase III" means that portion of the FDA submission and
approval process that provides for continued trials of the
Licensed Product on sufficient numbers of patients to
establish the safety and efficacy of the Licensed Product and
generate pharmacoeconomics date to support regulatory approval
in the proposed therapeutic indication as more fully defined
in 21 C.F.R.
ss.312.21(c).
1.14 "Pre-Phase I" means that portion of the development program
that starts with the selection of a compound for development
into the Licensed Product or the beginning of toxicological
studies relating to such compound. Pre-Phase I includes,
without limitation, toxicological, pharmacological and any
other studies, the results of which are required for filing
with an IND, as well as Licensed Product formulation and
manufacturing development necessary to obtain the permission
of regulatory authorities to begin and continue subsequent
human clinical testing. Toxicology, as used in this
definition, means full scale toxicology using "Good Laboratory
Practices" for obtaining approval from a regulatory authority
to administer the Licensed Product to humans. This toxicology
is distinguished from initial dose range finding toxicology,
which usually includes a single and repeated dose ranging
study in two species with less than half of the animals
required by the FDA, an Ames test and a related chromosome
test.
1.15 "Patent Rights" means all United States and foreign patents
(including all reissues, extensions, substitutions,
confirmations, re-registrations, re-examinations,
revalidations and patents of addition) and patent applications
(including, without limitation, all continuations,
continuations-in-part and divisions thereof) in each case,
claiming an invention which is necessary or useful for the
design, development, testing, use, manufacture or sale of the
Compound or a Licensed Product.
1.16 "Pivotal Trial" means the ***] study which is one of two
Phase III registerable trials and which is comparable to and
of the same magnitude as the trial described in Exhibit 3
hereto.
1.17 "Territory" means all countries of the world.
1.18 "Valid Claim" means a claim of a pending patent application
within the Patent Rights (provided such application has not
been pending for more than [***] from the date it was first
filed with the governmental agency with jurisdiction over
patent applications) or an issued and unexpired patent
included within the Patent Rights that has not been held
unenforceable or invalid by a court or other governmental
agency of competent jurisdiction, and that has not been
disclaimed or admitted to be invalid or unenforceable through
reissue or otherwise.
ARTICLE 2
License Grant
As of the effective date of this Agreement, DOV hereby grants
Neurocrine an exclusive sublicense to DOV's interest under the License Agreement
in the Patent Rights and Know-How to make, have made, use, import, offer for
sale and sell the Compound and the Licensed Product in the Territory, with the
right to grant sublicenses.
ARTICLE 3
Development Activities
3.1 As soon as practicable after the effective date of this
Agreement, Neurocrine shall commence, adequately fund, and
pursue a worldwide research and development program for the
development of the Licensed Product ("R & D Program") using
commercially reasonable and diligent efforts in its conduct of
the R & D Program in accordance with Neurocrine's usual and
customary practices for products of similar commercial
potential and value.
3.2 Management of the R & D Program will be provided by
Neurocrine. Arnold Lippa and Bernard Beer, upon Neurocrine's
request, will provide reasonable consultative services
pursuant to consulting agreements substantially in the form
set forth on Exhibit 4.
3.3 Neurocrine shall provide to DOV, on a [***] basis throughout
the term of this Agreement a written report setting forth the
efforts (and results of such efforts) taken by Neurocrine
pertaining to the R & D Program, including [***]. Neurocrine
shall provide such reports until the R & D Program is
terminated, or upon the first sale of the Licensed Product in
the United States, Japan or within the EU.
3.4 If Neurocrine terminates the R&D Program or halts all R&D
Program activities for a period of [***] or longer within the
United States (for reasons other than regulatory constraints),
DOV shall have the right to terminate this Agreement within
the entire Territory, or any country within the Territory,
effective upon Neurocrine's receipt of written notice of
termination from DOV. If Neurocrine terminates the R&D Program
or halts all R&D activities for a period of [***] or longer
within any other country of the Territory (for reasons other
than regulatory constraints) DOV shall have the right to
terminate this Agreement within such country, effective upon
Neurocrine's receipt of written notification from DOV. In
either such event DOV will be entitled to any payments
previously paid to, or which have accrued to DOV.
ARTICLE 4
Development Payments
4.1 In consideration of the rights granted to Neurocrine in
Article 2, herein, Neurocrine shall pay to DOV a licensing fee
of $5,000 upon the execution of this Agreement.
4.2 Neurocrine shall make scheduled payments and issue warrants
for the purchase of shares of Neurocrine's capital stock to
DOV in the amounts, and at the times, stated below:
US [***] plus warrants to purchase 75,000 shares of
Neurocrine common stock, upon [***] for the Licensed
Product. A warrant to purchase 15,000 shares of
Neurocrine common stock shall have an exercise price
equal to the Market Price, as defined herein, as of
the effective date of this Agreement. Such warrant
shall be exercisable, at any time, in whole or in
part, from the grant date through the fifth
anniversary of the grant date. A warrant to purchase
60,000 shares of Neurocrine common stock shall have
an exercise price equal to the Market Price, as
defined herein, as of the date that the first Pivotal
Trial commences. Such warrant shall be exercisable,
at any time, in whole or in part, from the grant date
through the fifth anniversary of the grant date. Upon
approval by a majority of the signatories thereto,
Neurocrine's New Registration Rights Agreement dated
March 29, 1996 shall be amended to include such
warrant in the definition of "Registrable Securities"
thereunder, those shares of Neurocrine common stock
issuable upon exercise of such warrants. The terms of
the warrants shall be substantially as set forth as
the Form of Warrant attached to this Agreement as
Exhibit 5. For purposes of this Article 4.2, "market
price" shall mean the mean of the closing price of
Neurocrine's common stock as quoted on the National
Association of Security Dealers, Inc. Automated
Quotation System or such other national securities
exchange or over-the-counter market on which such
common stock is quoted for the twenty business days
prior to the date of this Agreement, and at the date
that the first Pivotal Trial is commenced,
respectively.
[***].
[***].
ARTICLE 5
Royalties
5.1 In consideration of the rights granted in Article 2 hereof,
and in addition to the payments and issuance of warrants set
forth in Article 4 herein, Neurocrine shall pay to DOV during
the term of this Agreement, on a country-by-country basis,
royalties consisting of [***] of Net Sales of Licensed
Product.
5.2 If within any country of the Territory (I) marketing
exclusivity is lost to Neurocrine or its sublicensee prior to
the expiration of this Agreement and (ii) the manufacture, use
or sale of a Licensed Product would not infringe a Valid Claim
of a patent within the Patent Rights, then the royalty rate on
the Net Sales of such Licensed Product which would otherwise
be payable to DOV by Neurocrine will be reduced to a rate
which is equal to the [***].
5.3 All royalty payments shall be made in U.S. dollars, Net Sales
shall be converted on a country-by-country basis from the
currency used in each such country to United States Dollars.
The applicable exchange rate shall be the rate quoted in the
Wall Street Journal on the last business day of the period for
which royalties are being calculated. All royalty payments
shall be made in United States Dollars and remitted to DOV's
Corporate Office.
5.4 Within thirty (30) days after the end of [***] during the term
of this Agreement, Neurocrine shall pay to DOV the royalty
payment due for those three months.
Together with [***] royalty payment, Neurocrine shall submit
to DOV a written accounting showing its computation of
royalties due under this Agreement for such three months,
which shall set forth gross sales, Net Sales, the specific
deductions used in arriving at Net Sales, and the total
royalties due for the [***] in question. Such accounting shall
be on a country-by-country basis within the Territory.
5.5 Neurocrine shall keep full and accurate books and records
setting forth gross sales, Net Sales, the specific deductions
used in arriving at Net Sales and the amount of royalties
payable to DOV hereunder for no less than [***] after the end
of each year during the term of this Agreement. Neurocrine
shall permit DOV, to have such books and records examined by
an independent certified public accountant retained by DOV and
acceptable to Neurocrine, during regular business hours upon
reasonable advance notice. Such accountant shall keep
confidential any information obtained during such examination
and shall report to DOV, only the amounts of royalties which
he or she believes to be due and payable hereunder. In the
event of a difference of opinion between such accountant and
Neurocrine as to the amount of royalties which are due and
payable, the parties hereto shall use their best efforts to
resolve such differences. If they cannot do so, each party
will appoint one additional independent certified public
accountant, and those two individuals will jointly appoint an
additional independent certified public accountant. A majority
decision of those three accountants will be conclusive as to
the amount of royalties which are due and payable. The
expenses of this dispute resolution procedure will be borne
equally by Neurocrine and DOV.
ARTICLE 6
Confidentiality
If, during the performance of this Agreement, one party hereto
discloses information to the other which it considers
confidential, such information may not be subsequently
disclosed by the receiving party to a third party, without the
written permission of the disclosing party. The parties to
this Agreement agree to hold in confidence all information;
including, but not limited to, all information that is the
subject of this Agreement, Know-How, marketing and
manufacturing practices, processes, product information, or
financial information disclosed or submitted in writing or in
other tangible form which is considered to be confidential for
a period of five (5) years from the date of such disclosure,
except:
(1) information, which at the time of disclosure, is in
the public domain;
(2) information, which after disclosure, is published or
otherwise becomes part of the public domain through
no fault of the receiving party;
(3) information which was in the possession of the
receiving party at the time of disclosure;
(4) information which is developed by or on behalf of the
receiving party independently of any disclosure to
them by the disclosing party hereunder; or
(5) information which is provided to the receiving party
by a third party with the right to so provide.
ARTICLE 7
Adverse Experiences
7.1 During the term of this Agreement, Neurocrine shall keep, and
shall cause its sublicensees to keep DOV promptly and fully
informed of all pharmaceutical, toxicological, clinical, and
all other findings, including clinical use, studies,
investigations, tests and prescription, relating to any
adverse experiences with the Licensed Product.
7.2 Neurocrine undertakes to notify DOV, as soon as possible, of
any serious adverse event as such event is defined by the
responsible regulatory agency in the United States, Japan, or
within the EU, thought to be associated with clinical studies
of, or the use or application of, the Licensed Product. Such
notification shall be made promptly but in no event later than
five (5) working days after Neurocrine first learns of, or is
advised of, any adverse event described above.
7.3 Neurocrine shall inform DOV without delay, of any governmental
action, correspondence or reports to or from governmental
authorities which may affect the continued distribution and
sale of the Licensed Product and furnish DOV with copies of
any relevant documents relating thereto.
ARTICLE 8
Patent Infringement
8.1 In case any actions, claims, demands, suits or other legal
proceedings are brought or threatened to be brought against
Neurocrine, its Affiliates or sublicensees, by a third party
for infringement of such third party's patent(s), by virtue of
Neurocrine's manufacture, use, sale or offer for sale of the
Licensed Product, Neurocrine shall notify DOV forthwith of the
threat or existence of such actions with sufficient evidence
thereof, to enable the parties to prepare an appropriate
defense strategy. The parties shall consult together as to the
action to be taken and as to how the defense will be handled.
[***].
Neurocrine undertakes not to make any admission of liability
to a claimant or plaintiff or his, her or its legal
representative or insurer and not to sign any agreement in
respect of such proceedings adversely affecting the rights of
DOV [***], which will not be unreasonably withheld.
If Neurocrine, because of any settlement of the claimed
infringement or a final unappealable or non-appealed judgment
of a court of competent jurisdiction, is required to make
payments to one or more third parties to obtain a license
without which the marketing of the Licensed Product could not
be made in a given country, Neurocrine may deduct such
payments from the royalty payments due to DOV hereunder,
provided however that in no event shall the royalty rate be
reduced by more than [***] of that which would otherwise be
due to DOV.
8.2 Neurocrine shall promptly inform DOV of any suspected patent
infringement by a third party and provide DOV with any
available evidence of such suspected infringement.
DOV shall have the right but not the obligation to institute
any claim, suit or proceeding against an infringer or a
presumed infringer. DOV shall control the prosecution of any
such suit, claim or proceeding, including, without limitation,
the choice of counsel and any settlement of any such suit or
claim. Neurocrine shall provide DOV with all reasonable
assistance (other than financial) required to institute and
maintain such proceedings.
Neurocrine shall only have the right to institute any claim,
suit or proceeding against an infringer or a presumed
infringer in the event that DOV elects not to do so. In such
event, Neurocrine shall control the prosecution of any such
suit, claim or proceeding, including, without limitation, the
choice of counsel and any settlement of any such suit or
claim. DOV shall provide Neurocrine with all reasonable
assistance (other than financial) required to institute and
maintain such proceedings. During such proceedings,
Neurocrine's royalty obligations to DOV shall be reduced to
the greater of [***] of the royalty payable hereunder and the
royalty rate that DOV owes to ACY at that time. Any proceeds
from such proceedings shall first be allocated to reimburse
Neurocrine for its costs in such proceedings, second to
reimburse DOV for its lost royalty revenue during such period
and the remainder to Neurocrine. In the event that Neurocrine
is not successful in its suit, DOV shall not be reimbursed for
any lost royalty revenue.
ARTICLE 9
Indemnification, Liability and Insurance
9.1 Neurocrine, in the absence of negligence or willful misconduct
on the part of DOV, its Affiliates and sublicensees and their
respective employees, agents, officers, directors and
permitted assigns, shall at all times during the term of this
Agreement and thereafter, indemnify, defend and hold DOV and
its respective directors, officers, partners, employees, and
agents harmless from and against any and all claims and
expenses, including, without limitation, legal expenses, court
costs, and reasonable attorney's fees, arising out of or
relating to the death of or actual or alleged injury to any
person(s) or damage to third party property, and from and
against any other third party claim, proceeding, demand,
expense, cost and liability of any kind whatsoever
(collectively "liabilities") resulting from, arising out of or
related to product liability claims involving the Licensed
Product.
9.2 DOV, in the absence of negligence or willful misconduct on the
part of Neurocrine, its Affiliates and sublicensees and their
respective employees, agents, officers, directors and
permitted assigns shall at all times during the term of this
Agreement and thereafter, indemnify, defend and hold
Neurocrine and its respective directors, officers, partners,
employees, and agents harmless from and against any and all
claims and expenses including, without limitation, legal
expenses, court costs and reasonable attorney's fees arising
out of, or relating to, the death of or actual or alleged
injury to any person(s) or damage to third party property, and
from and against any other third-party claim, proceeding,
demand, expense, cost and liability of any kind whatsoever
resulting from, arising out of, or related to DOV's breach of
Article 10.9 herein, and any actions taken by DOV pertaining
to the Compound or Licensed Product prior to the effective
date of this Agreement.
9.3 Neurocrine shall maintain, and cause any sublicense to
maintain, a product liability insurance program which may
include funded self-insurance reserves, with additional
coverage by a nationally-recognized insurance carrier, with
respect to the development, manufacture and sale of the
Licensed Product. Coverage shall be in such amounts as are
customary within the industry. Neurocrine and any sublicensee
shall maintain such insurance program for so long as it, or
any sublicensee, continues to develop, manufacture or sell the
Licensed Product and thereafter for so long as required to
cover manufacture or sales of distributed Licensed Product.
9.4 Neurocrine (and its sublicensee) will name DOV and ACY as
additional insureds on its product liability insurance
policies. Upon execution of this Agreement, Neurocrine will
supply DOV with evidence of such coverage, and Neurocrine will
inform DOV, during the term of this Agreement, of any
modifications to such coverages.
ARTICLE 10
Warranties and Representations
10.1 Neurocrine represents and warrants that it is a corporation
duly organized, validly existing and in good standing under
the laws of Delaware.
10.2 Neurocrine represents and warrants that it has full corporate
authority to enter into, and to perform this Agreement.
10.3 Neurocrine represents and warrants that it is fully cognizant
of Good Laboratory Practices ("GLP") and Good Manufacturing
Practices ("GMP") as set forth by the FDA, and that it, and
any sublicensee, shall manufacture, or have manufactured,
Licensed Product in full compliance with GLP and GMP.
10.4 Neurocrine represents and warrants that the terms of any
sublicense it grants in accordance with Article 2 herein, will
not be inconsistent with the terms of this Agreement or the
License Agreement between DOV and ACY attached hereto as
Exhibit I.
10.5 Neurocrine represents and warrants that it has full corporate
authority to issue the warrants referred to in Article 4.2,
herein and that it shall have a sufficient amount of
authorized shares of capital stock to which the warrants
apply.
10.6 DOV represents and warrants that it is a corporation duly
organized, validly existing and in good standing under the
laws of New Jersey.
10.7 DOV represents and warrants that it has full corporate
authority to enter into, and to perform this Agreement.
10.8 DOV represents and warrants that it has the right to grant the
sub-license to Neurocrine set forth in Article 2 herein.
10.9 DOV represents and warrants that all representations made by
it to Neurocrine pertaining to Licensed Product are true to
the best of DOV's knowledge.
ARTICLE 11
Assignment
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and the successors to substantially the
entire business and assets of the respective parties hereto.
Notwithstanding the foregoing, any party may void this
Agreement if the Agreement is assigned for the benefit of a
creditor. This Agreement shall not be assignable by either
party, except to an Affiliate, without the prior consent of
the other party; any other attempted assignment is void.
ARTICLE 12
Payments to ACY
DOV shall be responsible for all payments due to ACY pursuant
to the License Agreement, a true copy of which is attached
hereto as Exhibit 1.
ARTICLE 13
Applicable Law
This Agreement shall be governed by and construed according to
the laws of the State of Delaware.
ARTICLE 14
Force Majeure
None of the parties shall be responsible for failure or delay
in the performance of any of its obligations hereunder due to
Force Majeure. Force Majeure shall mean any circumstances
which, due to an event or a legal position beyond the party's
reasonable control, shall render impossible the fulfillment of
any of the party's obligations hereunder, such as, but not
limited to, acts of God, acts, regulations, or laws of any
government, war, civil commotion, destruction of facilities or
materials by fires, earthquakes, or storms, labor
disturbances, shortages of public utilities, common carriers,
or raw materials, or any other cause, or causes of similar
effects, except, however, any economic occurrence. During any
such case of Force Majeure, this License Agreement shall not
be terminated, but only suspended and the party so affected
shall continue to perform its obligations as soon as such case
of Force Majeure is removed or alleviated.
ARTICLE 15
Term and Termination
15.1 This Agreement shall continue in full force and effect in each
country of the Territory until the later of the final
expiration of a patent covering the Compound or the Licensed
Product in such country, or a period of ten (10) years
following the first sale of Licensed Product by Neurocrine or
its sublicensee in such country.
15.2 Upon expiration of this Agreement, with respect to each
country of the Territory, Neurocrine shall be deemed to have a
full-paid, royalty-free license with the right to make or have
made, use or sell the Compound and the Licensed Product as
well as to freely utilize all data generated hereunder or
received from DOV by Neurocrine, without further obligation to
DOV, except for maintaining confidentiality as required by
Article 6 of this Agreement.
15.3 In the event that a party hereto shall be presumed by the
other to have breached any material condition herein
contained, the complaining party shall provide a written
notice of such presumed breach, requesting rectification
within a thirty (30) day period from the date of receipt of
such notice. The party presumed to be in breach of the
Agreement shall either submit a commercially reasonable plan
for rectification within 15 (fifteen) days of receipt of
notice (if the breach cannot be rectified within the thirty
(30) day period), or take appropriate steps to remedy the
breach within such period. If, within such thirty-day period,
neither the aforesaid plan shall have been submitted, nor the
breach cured, the party claiming breach shall be entitled to
[***]written notice to the other party, [***].
15.4 This Agreement may be terminated immediately by either party
by giving notice to the other party if such other party
becomes insolvent or has committed an act of bankruptcy or if
an order or resolution is made for the winding up of such
other party.
15.5 In the event that this Agreement is terminated by DOV prior to
is full term pursuant to Article 15.3, or Article 15.4,
herein, Neurocrine shall, as soon as reasonably possible,
transfer, or authorize the transfer of, [***] to DOV. Any such
transfers or transfer authorizations shall be in writing and
acceptable, in form, to DOV.
15.6 Article 6 and Section 16.9 shall survive termination of this
agreement.
ARTICLE 16
Miscellaneous
16.1 This Agreement constitutes the full understanding between the
parties and supersedes any and all prior oral or written
understandings and agreements with respect to the subject
matter hereof. No terms, conditions, understandings or
Agreements purporting to modify, amend or vary this Agreement
shall be binding unless made in writing and signed by the
parties hereto.
16.2 The invalidity or unenforceability of an Article or any part
of an Article of this Agreement in any jurisdiction shall not
cause the invalidity of the entire Agreement as to such
jurisdiction, and shall not affect the validity or
enforceability of such Article or such part of an Article in
any other jurisdiction. The parties shall replace any Article
or part of an Article found invalid or unenforceable by
alternative provisions which shall be as similar as possible
in their conditions with regard to their spirit and commercial
effect. If this Agreement in any jurisdiction is found to be
invalid or unenforceable, the parties shall replace it by an
alternative agreement which shall be as similar as possible in
its conditions with regard to its spirit and commercial
effect.
16.3 No actual waiver of breach or default by either party hereto
of any provision of this Agreement shall be deemed or
construed to be a waiver of any succeeding breach or default
of the same or any other provision of this Agreement.
16.4 This Agreement shall not constitute either party as the joint
venturer, legal representative or agent of the other party for
any purpose, whatsoever. Neither party shall have any right or
authority to assume or create any obligation or responsibility
for, or on behalf of, the other party, or to otherwise bind
the other party.
16.5 The parties recognize that this is a master agreement covering
a number of countries. If, for any country in the Territory it
becomes necessary to execute a separate instrument in order to
satisfy local requirements, the parties agree to execute such
further instrument, which shall, to the extent permitted by
the laws of the particular country, conform to the terms and
conditions of this Agreement.
16.6 This Agreement has been originally written and signed in the
English language. If any translation into any other language
is required for purposes of governmental filings, the parties
shall arrange for such translation, and the costs thereof
shall be borne by the party legally required to make such
filing. In the event of any question or dispute as to the
meaning or interpretation of any term, condition or provision
of this Agreement, the English language version shall in all
events govern for all purposes, whatsoever.
16.7 Termination of this Agreement for any reason, or expiration of
this Agreement, will not affect obligations, including the
payment of any Scheduled Payments or royalties which have
accrued as of the date of termination or expiration, and
rights and obligations which, are intended to survive
termination or expiration of this Agreement.
16.8 This Agreement is executed simultaneously in counterparts,
each of which shall be deemed an original, but all of which
shall constitute but one and the same instrument.
16.9 Neither party shall issue any press release or other publicity
materials, or make any oral or written presentation concerning
the Compound or Licensed Product without the 15 day prior
consent of the other party, which will not be unreasonably
withheld. This restriction shall not apply to disclosures
required by law or regulation within any country within the
Territory. However, the parties shall coordinate, to every
extent possible, as to the wording of any such disclosure.
ARTICLE 17
Notices
All notices pursuant to this Agreement will be in writing and sent by telecopy,
facsimile or other electronic means or sent by pre-paid regular, registered or
certified mail. All such notices will be delivered personally to, or addressed
as follows:
TO: Neurocrine
Neurocrine Biosciences, Inc.
3050-Science Park Road, Suite 405
San Diego, California 92121
Attn: Gary Lyons
TO: DOV
DOV Pharmaceutical, Incorporated
1-Parker Plaza, Suite 1500
Fort Lee, New Jersey 07024
Attn: Dr. Arnold Lippa
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their authorized representatives.
DOV Pharmaceutical, Inc.
By: /s/Arnold Lippa
Chief Executive Officer
Neurocrine Biosciences, Inc.
By: /s/Gary Lyons
President and
Chief Executive Officer
EXHIBIT 1
CHEMICAL COMPOUND DESCRIPTION
EXHIBIT 2
LICENSE AGREEMENT
EXHIBIT 3
[***]
EXHIBIT 4
FORM OF CONSULTING AGREEMENT
EXHBIT 5
WARRANT AGREEMENT
Exhibit 10.4
Warrant Agreement dated June 30, 1998 between Neurocrine Biosciences, Inc., a
Delaware corporation (the "Company"), and DOV Pharmaceutical, Inc., a New Jersey
corporation ("Holder").
Whereas Holder and the Company are parties to a certain
Sublicense and Development Agreement dated June 30, 1998 (the "Sublicense
Agreement"); and
Whereas pursuant to the terms of the Sublicense Agreement, the
Company has agreed to issue Holder certain warrants to purchase shares of the
Company's Common Stock (as defined in section 8.5), with no par value; and
Now therefore for good and valuable consideration, the receipt
of which is hereby acknowledged, the parties agree as follows:
1 Grant. The Company grants Holder warrants ("Warrants") to
purchase up to [***] shares of Common Stock ("Warrants") at the Exercise Price
(as defined in section 2.1), subject to adjustment as provided in Section 8,
during the period commencing on the start date of the [***] (as defined in the
Sublicense Agreement) and ending five years thereafter (the "Exercise Period").
2. Exercise Price.
2.1 The Exercise Price for (a) [***] warrants shall be
$8.040625 per share of Common Stock representing the Market Price (as defined in
section 2.2) per share of the Common Stock on the date hereof, and for (b) [***]
warrants shall be the Market Price of the Common Stock on the start date of the
[***].
2.2 "Market Price" shall be the mean of the closing price of
the Common Stock as quoted on the National Association of Securities Dealers,
Inc. Automated Quotation System or such other national securities exchange or
over-the-counter market on which the Common Stock is quoted; in the case of the
aforementioned [***] warrants for the 20-day period prior to the date hereof and
in the case of the aforementioned [***] warrants for the 20-day period prior to
start of the [***].
3. Warrant Certificates. The warrant certificates delivered
pursuant to this Warrant Agreement shall be in the form set forth in Exhibit A
with such appropriate changes required or permitted by this Warrant Agreement
(the "Warrant Certificates").
4. Exercise of Warrant.
4.1 Manner of Exercise. The Warrants are exercisable during
the Exercise Period (but not thereafter) at the Exercise Price and payable to
the Company at its executive offices located at 3050 Science Park Road, San
Diego, California 42121, attn: Chief Financial Officer (or such other officer as
designated to Holder by the Company by notice), by certified or official bank
check in New York Clearing House funds or wire transfer. Upon surrender of a
Warrant Certificate, submission of an executed election to purchase in the form
set forth in Exhibit B and payment of the Exercise Price, Holder shall be
entitled to receive a certificate for the shares of Common Stock so purchased.
The purchase rights represented by each Warrant Certificate are exercisable at
the option of Holder in whole or in part, but not as to fractional shares of
Common Stock.
4.2 Non-Cash Exercise. In addition to the method of payment
set forth in section 4.1 and in lieu of cash payment, Holder shall have the
right to exercise the Warrants in full or in part by surrendering the Warrant
Certificate in the manner specified in section 4.1 in exchange for the number of
shares of Common Stock equal to the product of (x) the number of shares covered
by the Warrants are being exercised multiplied by (y) a fraction, the numerator
of which is the closing price of the Company's Common Stock on the date of
exercise less the Exercise Price, and the denominator of which is such closing
price.
5. Issuance of Certificates.
5.1 Prompt Issuance. Upon exercise of the Warrants, the
certificates for the shares of Common Stock underlying such Warrants shall be
issued within ten business days without charge to the Holder including, without
limitation, any tax that may be payable in connection with the issuance, and
such certificates shall be issued in the name of, or in such name as may be
directed by, Holder, provided that the Company shall not be required to pay any
tax payable solely due to the issuance of a certificates in a name other than
Holder. The Company shall not be required to issue or deliver such certificates
until Holder pays the amount of such tax to the Company or establishes to the
satisfaction of the Company that such tax has been paid.
5.2 Execution of Certificates. Stock certificates issued upon
exercise of the Warrants shall be executed by authorized officers of the
Company. The person in whose name any such stock certificate is issued shall,
for all purposes, be deemed to have become the holder of record of such shares
on the date of exercise of the Warrant.
5.3 New Warrant Certificate. If Holder purchases less than all
the shares of Common Stock purchasable under any Warrant Certificate, the
Company shall cancel the Warrant Certificate upon the surrender thereof and
shall execute and deliver a new Warrant Certificate of like tenor for the
balance of the shares of Common Stock not so purchased.
6. Transfer of Warrants. Subject to the restrictions set forth
in section 7, Holder may sell, assign, pledge, hypothecate or otherwise transfer
any rights under this Warrant Agreement, following notice to the Company in the
form of Exhibit C.
7. Registration.
7.1 Registration Under the Securities Act of 1933. Neither the
Warrants nor the shares of Common Stock issuable upon exercise of the Warrants
have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any applicable state securities or blue sky laws. Upon
exercise of the Warrants, the Company may cause a legend in substantially the
form set forth below to be placed on each certificate representing the shares of
Common Stock issued.
The securities represented by this certificate have not been
registered for public resale under the Securities Act of 1933,
as amended ("Securities Act"), and may not be offered,
transferred or sold except pursuant to (i) an effective
registration statement under the Securities Act and any
applicable state securities or blue sky laws, (ii) Rule 144
under the Securities Act (or any similar rule under the
Securities Act relating to the disposition of securities), to
the extent applicable, together with an opinion of counsel if
such opinion, reasonably satisfactory to issuer's counsel, is
that such transfer is permitted or (iii) an opinion of
counsel, if such opinion, reasonably satisfactory to issuer's
counsel, is that an exemption from registration under the
Securities Act and any applicable state securities or blue sky
laws is available.
7.2 Registration Rights. Holder shall have such registration
rights set forth in that certain New Registration Rights Agreement dated March
29, 1996.
8. Adjustments to Exercise and Number of Securities.
8.1 Recapitalization and Reclassifications. If upon a
recapitalization or reclassification the shares of Common Stock shall be changed
into or become exchangeable for a larger or smaller number of shares, then upon
the effective date thereof the number of shares of Common Stock that Holder
shall be entitled to purchase upon exercise of the Warrant shall be increased or
decreased, as the case may be, in direct proportion to the increase or decrease
in the number of shares of Common Stock by reason of such recapitalization or
reclassification, and the Exercise Price shall be, in the case of an increase in
the number of shares, proportionately decreased and, in the case of a decrease
in the number of shares, proportionately increased.
8.2 Sale; Merger; Consolidation. Subject to the prior
notification requirements of section 13, upon a transfer or sale of all or
substantially all the assets of the Company or in the case of any consolidation
or merger of the Company with another entity (other than a consolidation or
merger that does not result in any reclassification or change of the outstanding
Common Stock), the transferee, purchaser or entity formed by or surviving a
consolidation or merger, as the case may be, shall execute and deliver to Holder
a supplemental warrant agreement giving Holder the right during the Exercise
Period to receive, upon exercise of a Warrant, the kind and amount of shares of
stock and/or other securities receivable upon such transfer, sale, consolidation
or merger, as the case may be, by a holder of the number of shares of Common
Stock for which such Warrant might have been exercised immediately prior to such
transfer, sale, consolidation or merger; provided that if such transfer, sale,
consolidation or merger shall result in the shareholders of the Company
receiving cash or publicly traded securities having a value per share in excess
of the Exercise Price, this Warrant Agreement shall terminate if not exercised
prior to the closing date of such transaction. Such supplemental warrant
agreement shall provide for adjustments that shall be identical to the
adjustments provided in this section 8.
8.3 Dividends and Other Distributions. If the Company declares
a dividend payable in shares of Common Stock, Holder shall be entitled to
receive upon exercise of the Warrant, in addition to the number of shares of
Common Stock as to which the Warrant is exercised, such additional shares of
Common Stock as Holder would have received had the Warrant been exercised
immediately prior to such record date for the dividend. If the Company declares
a dividend of securities other than a dividend of Common Stock, Holder shall
thereafter be entitled to receive, in addition to the shares of Common Stock
receivable upon the exercise of such Warrants, such non-Common Stock dividend as
Holder would have received had the Warrant been exercised immediately prior to
such record date for the dividend. At the time of any such dividend or
distribution, the Company shall make appropriate reserves to ensure the timely
performance of the provisions of this section 8.3. If the Company declares a
cash dividend the Holder shall not be entitled to receive any such dividend.
8.4 Definition of Common Stock. For the purpose of this
Agreement, the term Common Stock
shall mean the following:
(a) the class of stock designated as Common
Stock in the Articles of Incorporation of the Company as may be amended, or any
other class of stock resulting from successive changes or reclassifications of
such Common Stock; and
(b) if, as a result of an adjustment made pursuant to
section 8, Holder shall upon
exercise of the Warrants become entitled to receive securities other than Common
Stock, wherever appropriate, all references herein to shares of Common Stock
shall be deemed to refer to and include such other securities and thereafter the
number of such other securities shall be subject to adjustment from time to time
in a manner and upon terms as nearly equivalent as practicable to the provisions
of this section 8.
9. Issuance of New Warrant Certificate. Upon receipt by the
Company of evidence reasonably satisfactory to it of a loss, theft, destruction
or mutilation of a Warrant Certificate, reimbursement by Holder to the Company
of all incidental expenses and, in the case of loss, theft or destruction,
receipt of indemnity or security from Holder reasonably satisfactory to it, or,
in the case of a mutilated Warrant Certificate, upon surrender and cancellation
thereof the Company shall make and deliver a replacement Warrant Certificate to
Holder.
10. Elimination of Fractional Interests. The Company shall not
be required to issue certificates representing fractions of shares of Common
Stock upon the exercise of the Warrants. The Company shall have the option to
make payment in cash in respect of any fractional shares or to round any
fraction up to the nearest whole number of shares of Common Stock.
11. Reservation and Listing of Securities. The Company shall
at all times reserve and keep available out of its authorized shares of Common
Stock, solely for the purpose of issuance upon the exercise of the Warrants,
such number of shares of Common Stock as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of the Warrants
and payment of the Exercise Price by Holder, all shares of Common Stock issuable
upon such exercise shall be duly and validly issued, fully paid, non-assessable
and not subject to the preemptive rights of any stockholder. The Company shall
use its best efforts to cause all shares of Common Stock issuable upon the
exercise of the Warrants to be listed (subject to official notice of issuance)
on all securities exchanges, if any, on which the Common Stock may then be
listed and/or quoted.
12. Representations and Warranties of Holder. Holder
represents and warrants to the Company that the Warrants are being acquired
solely for Holder's own account, for investment, and not with a view to resale,
distribution, assignment, subdivision or fractionalization thereof, and Holder
has no present plans to enter into any contract, undertaking, agreement or
arrangement for such purpose.
13. Notice to Warrant Holder. Nothing contained in this
Warrant Agreement shall be construed as conferring upon Holder, by virtue of
holding the Warrants, the right to vote, consent or receive notice as a
stockholder in respect of any meetings of stockholders for the election of
directors or any other matter, or as having any rights as a stockholder of the
Company. If, however, at any time prior to the expiration of the Warrants and
their exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to receive a dividend
or distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment (which treatment shall be in accordance
with generally accepted accounting principles) of such dividend or distribution
on the books of the Company; or
(b) the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or securities
convertible into or exchange for shares of capital stock of the Company, or any
option, right or warrant to subscribe therefor; or
(c) a dissolution, liquidation, winding up, transfer,
consolidation, merger or a sale of all or substantially all its property, assets
and business as an entirety shall be proposed;
the Company shall give notice of such event at least 15 days prior to the date
fixed as a record date or the date of the closing the transfer books for the
determination of the stockholders entitled to such dividend, distribution,
convertible or exchangeable securities or subscription rights, or entitled to
vote on such proposed dissolution, liquidation, winding up or sale. Such notice
shall specify such record date or the date of closing the transfer books, as the
case may be. Failure to give such notice or any defect therein shall not affect
the validity of any action taken in connection with the declaration or payment
of any such dividend, or the issuance of any convertible or exchangeable
securities, or subscription rights, options or warrants, or any proposed
dissolution, liquidation, winding up or sale.
14. Notices. Any notice or demand pursuant to this Warrant
Agreement shall be in writing and shall be deemed sufficiently given or made (a)
upon personal delivery; (b) the day following delivery to a reputable overnight
courier or (c) three days following mailing by certified or registered mail,
return receipt requested, postage prepaid, and addressed, until the other party
is notified of another address, as follows:
If to the Company:
Neurocrine Biosciences, Inc.
3050 Science Park
San Diego, California 42121
with a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Attn: Michael O' Donnell, Esq.
If to Holder:
DOV Pharmaceutical, Inc.
1 Parker Plaza, Suite 1500
Fort Lee, New Jersey
Attn: Dr. Arnold Lippa
with a copy to:
Friedman Siegelbaum LLP
399 Park Avenue
20th Floor
New York, New York 10022
Attn: Joseph R. Siegelbaum, Esq.
15. Supplements and Amendments. This Warrant Agreement may be
amended or waived at any time but only by written agreement of the parties.
16. Successors. All the covenants and provisions of this
Warrant Agreement shall be binding upon and inure to the benefit of the Company,
Holder and their respective successors and assigns hereunder.
17. Governing Law; Submission to Jurisdiction. (a) This
Warrant Agreement and each Warrant Certificate issued hereunder shall be deemed
to be a contract made under the laws of Delaware without giving effect to rules
governing conflicts of law.
(b) Any process or summons to be served upon either the
Company or Holder (at the option of the party bringing such action, proceeding
or claim) may be served in accordance with section 14. The prevailing party in
any such action or proceeding shall be entitled to recover from the other party
all its reasonable legal costs and expenses incurred in connection with such
action or proceeding
18. Entire Agreement; Modification. This Warrant Agreement
contains the entire understanding between the parties with respect to the
subject matter hereof and may not be modified or amended except by both parties.
19. Severability. If any provision of this Warrant Agreement
is held to be invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision hereof.
20. Captions. The caption headings of the sections of this
Warrant Agreement are for convenience of reference only, are not a part of this
Warrant Agreement and shall be given no substantive effect.
21. Benefits of this Warrant Agreement. Nothing in this
Warrant Agreement shall be construed to give to any person or entity other than
the Company and Holder any legal or equitable right, remedy or claim hereunder;
and this Warrant Agreement shall be for the sole and exclusive benefit of the
Company and Holder.
22. Counterparts. This Warrant Agreement may be executed in
any number of counterparts and each of such counterparts shall be deemed to be
an original, and such counterparts shall together constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed, as of the date first set forth above.
DOV Pharmaceutical, Inc.
By: /s/Arnold Lippa
Chief Executive Officer
Neurocrine Biosciences, Inc.
By: /s/ Gary Lyons
President and
Chief Executive Officer
Exhibit 10.5
Warrant Agreement dated June 30, 1998 between Neurocrine
Biosciences, Inc., a Delaware corporation (the "Company"), and Jeff Eliot
Margolis ("Holder").
Whereas Holder and the Company are parties to a certain
Sublicense and Development Agreement dated June 30, 1998 (the "Sublicense
Agreement"); and
Whereas pursuant to the terms of the Sublicense Agreement, the
Company has agreed to issue Holder certain warrants to purchase shares of the
Company's Common Stock (as defined in section 8.5), with no par value; and
Now therefore for good and valuable consideration, the receipt
of which is hereby acknowledged, the parties agree as follows:
1 Grant. The Company grants Holder warrants ("Warrants") to
purchase up to [***] shares of Common Stock ("Warrants") at the Exercise Price
(as defined in section 2.1), subject to adjustment as provided in Section 8,
during the period commencing on the start date of the [***] (as defined in the
Sublicense Agreement) and ending five years thereafter (the "Exercise Period").
2. Exercise Price.
2.1 The Exercise Price for (a) [***] warrants shall be
$8.040625 per share of Common Stock representing the Market Price (as defined in
section 2.2) per share of the Common Stock on the date hereof, and for (b) [***]
warrants shall be the Market Price of the Common Stock on the start date of the
[***].
2.2 "Market Price" shall be the mean of the closing price of
the Common Stock as quoted on the National Association of Securities Dealers,
Inc. Automated Quotation System or such other national securities exchange or
over-the-counter market on which the Common Stock is quoted; in the case of the
aforementioned [***] warrants for the 20-day period prior to the date hereof and
in the case of the aforementioned [***] warrants for the 20-day period prior to
start of the [***].
3. Warrant Certificates. The warrant certificates delivered
pursuant to this Warrant Agreement shall be in the form set forth in Exhibit A
with such appropriate changes required or permitted by this Warrant Agreement
(the "Warrant Certificates").
4. Exercise of Warrant.
4.1 Manner of Exercise. The Warrants are exercisable during
the Exercise Period (but not thereafter) at the Exercise Price and payable to
the Company at its executive offices located at 3050 Science Park Road, San
Diego, California 42121, attn: Chief Financial Officer (or such other officer as
designated to Holder by the Company by notice), by certified or official bank
check in New York Clearing House funds or wire transfer. Upon surrender of a
Warrant Certificate, submission of an executed election to purchase in the form
set forth in Exhibit B and payment of the Exercise Price, Holder shall be
entitled to receive a certificate for the shares of Common Stock so purchased.
The purchase rights represented by each Warrant Certificate are exercisable at
the option of Holder in whole or in part, but not as to fractional shares of
Common Stock.
4.2 Non-Cash Exercise. In addition to the method of payment
set forth in section 4.1 and in lieu of cash payment, Holder shall have the
right to exercise the Warrants in full or in part by surrendering the Warrant
Certificate in the manner specified in section 4.1 in exchange for the number of
shares of Common Stock equal to the product of (x) the number of shares covered
by the Warrants are being exercised multiplied by (y) a fraction, the numerator
of which is the closing price of the Company's Common Stock on the date of
exercise less the Exercise Price, and the denominator of which is such closing
price.
5. Issuance of Certificates.
5.1 Prompt Issuance. Upon exercise of the Warrants, the
certificates for the shares of Common Stock underlying such Warrants shall be
issued within ten business days without charge to the Holder including, without
limitation, any tax that may be payable in connection with the issuance, and
such certificates shall be issued in the name of, or in such name as may be
directed by, Holder, provided that the Company shall not be required to pay any
tax payable solely due to the issuance of a certificates in a name other than
Holder. The Company shall not be required to issue or deliver such certificates
until Holder pays the amount of such tax to the Company or establishes to the
satisfaction of the Company that such tax has been paid.
5.2 Execution of Certificates. Stock certificates issued upon
exercise of the Warrants shall be executed by authorized officers of the
Company. The person in whose name any such stock certificate is issued shall,
for all purposes, be deemed to have become the holder of record of such shares
on the date of exercise of the Warrant.
5.3 New Warrant Certificate. If Holder purchases less than all
the shares of Common Stock purchasable under any Warrant Certificate, the
Company shall cancel the Warrant Certificate upon the surrender thereof and
shall execute and deliver a new Warrant Certificate of like tenor for the
balance of the shares of Common Stock not so purchased.
6. Transfer of Warrants. Subject to the restrictions set forth
in section 7, Holder may sell, assign, pledge, hypothecate or otherwise transfer
any rights under this Warrant Agreement, following notice to the Company in the
form of Exhibit C.
7. Registration Under the Securities Act of 1933 .
7.1 Neither the Warrants nor the shares of Common Stock
issuable upon exercise of the Warrants have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), or any applicable state
securities or blue sky laws. Upon exercise of the Warrants, the Company may
cause a legend in substantially the form set forth below to be placed on each
certificate representing the shares of Common Stock issued.
The securities represented by this certificate have not been
registered for public resale under the Securities Act of 1933,
as amended ("Securities Act"), and may not be offered,
transferred or sold except pursuant to (i) an effective
registration statement under the Securities Act and any
applicable state securities or blue sky laws, (ii) Rule 144
under the Securities Act (or any similar rule under the
Securities Act relating to the disposition of securities), to
the extent applicable, together with an opinion of counsel if
such opinion, reasonably satisfactory to issuer's counsel, is
that such transfer is permitted or (iii) an opinion of
counsel, if such opinion, reasonably satisfactory to issuer's
counsel, is that an exemption from registration under the
Securities Act and any applicable state securities or blue sky
laws is available.
7.2 Holder shall have such registration rights set forth in
that certain New Registration Rights Agreement dated March 29, 1996.
8. Adjustments to Exercise and Number of Securities.
8.1 Recapitalization and Reclassifications. If upon a
recapitalization or reclassification the shares of Common Stock shall be changed
into or become exchangeable for a larger or smaller number of shares, then upon
the effective date thereof the number of shares of Common Stock that Holder
shall be entitled to purchase upon exercise of the Warrant shall be increased or
decreased, as the case may be, in direct proportion to the increase or decrease
in the number of shares of Common Stock by reason of such recapitalization or
reclassification, and the Exercise Price shall be, in the case of an increase in
the number of shares, proportionately decreased and, in the case of a decrease
in the number of shares, proportionately increased.
8.2 Sale; Merger; Consolidation. Subject to the prior
notification requirements of section 13, upon a transfer or sale of all or
substantially all the assets of the Company or in the case of any consolidation
or merger of the Company with another entity (other than a consolidation or
merger that does not result in any reclassification or change of the outstanding
Common Stock), the transferee, purchaser or entity formed by or surviving a
consolidation or merger, as the case may be, shall execute and deliver to Holder
a supplemental warrant agreement giving Holder the right during the Exercise
Period to receive, upon exercise of a Warrant, the kind and amount of shares of
stock and/or other securities receivable upon such transfer, sale, consolidation
or merger, as the case may be, by a holder of the number of shares of Common
Stock for which such Warrant might have been exercised immediately prior to such
transfer, sale, consolidation or merger, provided that if such transfer, sale,
consolidation or merger shall result in the shareholders of the Company
receiving cash or publicly traded securities having a value per share in excess
of the Exercise Price, this Warrant Agreement shall terminate if not exercised
prior to the closing date of such transaction. Such supplemental warrant
agreement shall provide for adjustments that shall be identical to the
adjustments provided in this section 8.
8.3 Dividends and Other Distributions. If the Company declares
a dividend payable in shares of Common Stock, Holder shall be entitled to
receive upon exercise of the Warrant, in addition to the number of shares of
Common Stock as to which the Warrant is exercised, such additional shares of
Common Stock as Holder would have received had the Warrant been exercised
immediately prior to such record date for the dividend. If the Company declares
a dividend of securities other than a dividend of Common Stock, Holder shall
thereafter be entitled to receive, in addition to the shares of Common Stock
receivable upon the exercise of such Warrants, such non-Common Stock dividend as
Holder would have received had the Warrant been exercised immediately prior to
such record date for the dividend. At the time of any such dividend or
distribution, the Company shall make appropriate reserves to ensure the timely
performance of the provisions of this section 8.3. If the Company declares a
cash dividend the Holder shall not be entitled to receive any such dividend.
8.4 Definition of Common Stock. For the purpose of this
Agreement, the term Common Stock shall mean the following:
(a) the class of stock designated as Common
Stock in the Articles of Incorporation of the Company as may be amended, or any
other class of stock resulting from successive changes or reclassifications of
such Common Stock; and
(b) if, as a result of an adjustment made pursuant to
section 8, Holder shall upon exercise of the Warrants become entitled to receive
securities other than Common Stock, wherever appropriate, all references herein
to shares of Common Stock shall be deemed to refer to and include such other
securities and thereafter the number of such other securities shall be subject
to adjustment from time to time in a manner and upon terms as nearly equivalent
as practicable to the provisions of this section 8.
9. Issuance of New Warrant Certificate. Upon receipt by the
Company of evidence reasonably satisfactory to it of a loss, theft, destruction
or mutilation of a Warrant Certificate, reimbursement by Holder to the Company
of all incidental expenses and, in the case of loss, theft or destruction,
receipt of indemnity or security from Holder reasonably satisfactory to it, or,
in the case of a mutilated Warrant Certificate, upon surrender and cancellation
thereof the Company shall make and deliver a replacement Warrant Certificate to
Holder.
10. Elimination of Fractional Interests. The Company shall not
be required to issue certificates representing fractions of shares of Common
Stock upon the exercise of the Warrants. The Company shall have the option to
make payment in cash in respect of any fractional shares or to round any
fraction up to the nearest whole number of shares of Common Stock.
11. Reservation and Listing of Securities. The Company shall
at all times reserve and keep available out of its authorized shares of Common
Stock, solely for the purpose of issuance upon the exercise of the Warrants,
such number of shares of Common Stock as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of the Warrants
and payment of the Exercise Price by Holder, all shares of Common Stock issuable
upon such exercise shall be duly and validly issued, fully paid, non-assessable
and not subject to the preemptive rights of any stockholder. The Company shall
use its best efforts to cause all shares of Common Stock issuable upon the
exercise of the Warrants to be listed (subject to official notice of issuance)
on all securities exchanges, if any, on which the Common Stock may then be
listed and/or quoted.
12. Representations and Warranties of Holder. Holder
represents and warrants to the Company that it is an accredited investor, as
defined in Section 501 of Regulations under the Securities Act, the Warrants are
being acquired solely for Holder's own account, for investment, and not with a
view to resale, distribution, assignment, subdivision or fractionalization
thereof, and Holder has no present plans to enter into any contract,
undertaking, agreement or arrangement for such purpose.
13. Notice to Warrant Holder. Nothing contained in this
Warrant Agreement shall be construed as conferring upon Holder, by virtue of
holding the Warrants, the right to vote, consent or receive notice as a
stockholder in respect of any meetings of stockholders for the election of
directors or any other matter, or as having any rights as a stockholder of the
Company. If, however, at any time prior to the expiration of the Warrants and
their exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to receive a dividend
or distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment (which treatment shall be in accordance
with generally accepted accounting principles) of such dividend or distribution
on the books of the Company; or
(b) the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or securities
convertible into or exchange for shares of capital stock of the Company, or any
option, right or warrant to subscribe therefor; or
(c) a dissolution, liquidation, winding up, transfer,
consolidation, or merger) or a sale of all or substantially all its property,
assets and business as an entirety shall be proposed;
the Company shall give notice of such event at least 15 days prior to the date
fixed as a record date or the date of the closing the transfer books for the
determination of the stockholders entitled to such dividend, distribution,
convertible or exchangeable securities or subscription rights, or entitled to
vote on such proposed dissolution, liquidation, winding up or sale. Such notice
shall specify such record date or the date of closing the transfer books, as the
case may be. Failure to give such notice or any defect therein shall not affect
the validity of any action taken in connection with the declaration or payment
of any such dividend, or the issuance of any convertible or exchangeable
securities, or subscription rights, options or warrants, or any proposed
dissolution, liquidation, winding up or sale.
14. Notices. Any notice or demand pursuant to this Warrant
Agreement shall be in writing and shall be deemed sufficiently given or made (a)
upon personal delivery; (b) the day following delivery to a reputable overnight
courier or (c) three days following mailing by certified or registered mail,
return receipt requested, postage prepaid, and addressed, until the other party
is notified of another address, as follows:
If to the Company:
Neurocrine Biosciences, Inc.
3050 Science Park
San Diego, California 42121
with a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Attn: Michael O'Donnell, Esq.
If to Holder:
Jeff Eliot Margolis
c/o Aurora Capital Corp.
425 Park Avenue
New York, New York 10022-3506
15. Supplements and Amendments. This Warrant Agreement may be
amended or waived at any time but only by written agreement of the parties.
16. Successors. All the covenants and provisions of this
Warrant Agreement shall be binding upon and inure to the benefit of the Company,
Holder and their respective successors and assigns hereunder.
17. Governing Law; Submission to Jurisdiction. (a) This
Warrant Agreement and each Warrant Certificate issued hereunder shall be deemed
to be a contract made under the laws of Delaware without giving effect to rules
governing conflicts of law.
(b) Any process or summons to be served upon either the
Company or Holder (at the option of the party bringing such action, proceeding
or claim) may be served in accordance with section 14. The prevailing party in
any such action or proceeding shall be entitled to recover from the other party
all its reasonable legal costs and expenses incurred in connection with such
action or proceeding
18. Entire Agreement; Modification. This Warrant Agreement
contains the entire understanding between the parties with respect to the
subject matter hereof and may not be modified or amended except by both parties.
19. Severability. If any provision of this Warrant Agreement
is held to be invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision hereof.
20. Captions. The caption headings of the sections of this
Warrant Agreement are for convenience of reference only, are not a part of this
Warrant Agreement and shall be given no substantive effect.
21. Benefits of this Warrant Agreement. Nothing in this
Warrant Agreement shall be construed to give to any person or entity other than
the Company and Holder any legal or equitable right, remedy or claim hereunder;
and this Warrant Agreement shall be for the sole and exclusive benefit of the
Company and Holder.
22. Counterparts. This Warrant Agreement may be executed in
any number of counterparts and each of such counterparts shall be deemed to be
an original, and such counterparts shall together constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed, as of the date first set forth above.
/s/Jeff Eliot Margolis
Neurocrine Biosciences, Inc.
/s/ Gary Lyons
President and
Chief Executive Officer
Exhibit 10.6
Warrant Agreement dated June 30, 1998 between Neurocrine
Biosciences, Inc., a Delaware corporation (the "Company"), and Stephen L. Ross
("Holder").
Whereas Holder and the Company are parties to a certain
Sublicense and Development Agreement dated June 30, 1998 (the "Sublicense
Agreement"); and
Whereas pursuant to the terms of the Sublicense Agreement, the
Company has agreed to issue Holder certain warrants to purchase shares of the
Company's Common Stock (as defined in section 8.5), with no par value; and
Now therefore for good and valuable consideration, the receipt
of which is hereby acknowledged, the parties agree as follows:
1 Grant. The Company grants Holder warrants ("Warrants") to
purchase up to [***] shares of Common Stock ("Warrants") at the Exercise Price
(as defined in section 2.1), subject to adjustment as provided in Section 8,
during the period commencing on the start date of the [***] (as defined in the
Sublicense Agreement) and ending five years thereafter (the "Exercise Period").
2. Exercise Price.
2.1 The Exercise Price for (a) [***] warrants shall be
$8.040625 per share of Common Stock representing the Market Price (as defined in
section 2.2) per share of the Common Stock on the date hereof, and for (b) [***]
warrants shall be the Market Price of the Common Stock on the start date of the
[***].
2.2 "Market Price" shall be the mean of the closing price of
the Common Stock as quoted on the National Association of Securities Dealers,
Inc. Automated Quotation System or such other national securities exchange or
over-the-counter market on which the Common Stock is quoted; in the case of the
aforementioned [***] warrants for the 20-day period prior to the date hereof and
in the case of the aforementioned [***] warrants for the 20-day period prior to
start of the [***].
3. Warrant Certificates. The warrant certificates delivered
pursuant to this Warrant Agreement shall be in the form set forth in Exhibit A
with such appropriate changes required or permitted by this Warrant Agreement
(the "Warrant Certificates").
4. Exercise of Warrant.
4.1 Manner of Exercise. The Warrants are exercisable during
the Exercise Period (but not thereafter) at the Exercise Price and payable to
the Company at its executive offices located at 3050 Science Park Road, San
Diego, California 42121, attn: Chief Financial Officer (or such other officer as
designated to Holder by the Company by notice), by certified or official bank
check in New York Clearing House funds or wire transfer. Upon surrender of a
Warrant Certificate, submission of an executed election to purchase in the form
set forth in Exhibit B and payment of the Exercise Price, Holder shall be
entitled to receive a certificate for the shares of Common Stock so purchased.
The purchase rights represented by each Warrant Certificate are exercisable at
the option of Holder in whole or in part, but not as to fractional shares of
Common Stock.
4.2 Non-Cash Exercise. In addition to the method of payment
set forth in section 4.1 and in lieu of cash payment, Holder shall have the
right to exercise the Warrants in full or in part by surrendering the Warrant
Certificate in the manner specified in section 4.1 in exchange for the number of
shares of Common Stock equal to the product of (x) the number of shares covered
by the Warrants are being exercised multiplied by (y) a fraction, the numerator
of which is the closing price of the Company's Common Stock on the date of
exercise less the Exercise Price, and the denominator of which is such closing
price.
5. Issuance of Certificates.
5.1 Prompt Issuance. Upon exercise of the Warrants, the
certificates for the shares of Common Stock underlying such Warrants shall be
issued within ten business days without charge to the Holder including, without
limitation, any tax that may be payable in connection with the issuance, and
such certificates shall be issued in the name of, or in such name as may be
directed by, Holder, provided that the Company shall not be required to pay any
tax payable solely due to the issuance of a certificates in a name other than
Holder. The Company shall not be required to issue or deliver such certificates
until Holder pays the amount of such tax to the Company or establishes to the
satisfaction of the Company that such tax has been paid.
5.2 Execution of Certificates. Stock certificates issued upon
exercise of the Warrants shall be executed by authorized officers of the
Company. The person in whose name any such stock certificate is issued shall,
for all purposes, be deemed to have become the holder of record of such shares
on the date of exercise of the Warrant.
5.3 New Warrant Certificate. If Holder purchases less than all
the shares of Common Stock purchasable under any Warrant Certificate, the
Company shall cancel the Warrant Certificate upon the surrender thereof and
shall execute and deliver a new Warrant Certificate of like tenor for the
balance of the shares of Common Stock not so purchased.
6. Transfer of Warrants. Subject to the restrictions set forth
in section 7, Holder may sell, assign, pledge, hypothecate or otherwise transfer
any rights under this Warrant Agreement, following notice to the Company in the
form of Exhibit C.
7. Registration Under the Securities Act of 1933 .
7.1 Neither the Warrants nor the shares of Common Stock
issuable upon exercise of the Warrants have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), or any applicable state
securities or blue sky laws. Upon exercise of the Warrants, the Company may
cause a legend in substantially the form set forth below to be placed on each
certificate representing the shares of Common Stock issued.
The securities represented by this certificate have not been
registered for public resale under the Securities Act of 1933,
as amended ("Securities Act"), and may not be offered,
transferred or sold except pursuant to (i) an effective
registration statement under the Securities Act and any
applicable state securities or blue sky laws, (ii) Rule 144
under the Securities Act (or any similar rule under the
Securities Act relating to the disposition of securities), to
the extent applicable, together with an opinion of counsel if
such opinion, reasonably satisfactory to issuer's counsel, is
that such transfer is permitted or (iii) an opinion of
counsel, if such opinion, reasonably satisfactory to issuer's
counsel, is that an exemption from registration under the
Securities Act and any applicable state securities or blue sky
laws is available.
7.2 Holder shall have such registration rights set forth in
that certain New Registration Rights Agreement dated March 29, 1996.
8. Adjustments to Exercise and Number of Securities.
8.1 Recapitalization and Reclassifications. If upon a
recapitalization or reclassification the shares of Common Stock shall be changed
into or become exchangeable for a larger or smaller number of shares, then upon
the effective date thereof the number of shares of Common Stock that Holder
shall be entitled to purchase upon exercise of the Warrant shall be increased or
decreased, as the case may be, in direct proportion to the increase or decrease
in the number of shares of Common Stock by reason of such recapitalization or
reclassification, and the Exercise Price shall be, in the case of an increase in
the number of shares, proportionately decreased and, in the case of a decrease
in the number of shares, proportionately increased.
8.2 Sale; Merger; Consolidation. Subject to the prior
notification requirements of section 13, upon a transfer or sale of all or
substantially all the assets of the Company or in the case of any consolidation
or merger of the Company with another entity (other than a consolidation or
merger that does not result in any reclassification or change of the outstanding
Common Stock), the transferee, purchaser or entity formed by or surviving a
consolidation or merger, as the case may be, shall execute and deliver to Holder
a supplemental warrant agreement giving Holder the right during the Exercise
Period to receive, upon exercise of a Warrant, the kind and amount of shares of
stock and/or other securities receivable upon such transfer, sale, consolidation
or merger, as the case may be, by a holder of the number of shares of Common
Stock for which such Warrant might have been exercised immediately prior to such
transfer, sale, consolidation or merger, provided that if such transfer, sale,
consolidation or merger shall result in the shareholders of the Company
receiving cash or publicly traded securities having a value per share in excess
of the Exercise Price, this Warrant Agreement shall terminate if not exercised
prior to the closing date of such transaction. Such supplemental warrant
agreement shall provide for adjustments that shall be identical to the
adjustments provided in this section 8.
8.3 Dividends and Other Distributions. If the Company declares
a dividend payable in shares of Common Stock, Holder shall be entitled to
receive upon exercise of the Warrant, in addition to the number of shares of
Common Stock as to which the Warrant is exercised, such additional shares of
Common Stock as Holder would have received had the Warrant been exercised
immediately prior to such record date for the dividend. If the Company declares
a dividend of securities other than a dividend of Common Stock, Holder shall
thereafter be entitled to receive, in addition to the shares of Common Stock
receivable upon the exercise of such Warrants, such non-Common Stock dividend as
Holder would have received had the Warrant been exercised immediately prior to
such record date for the dividend. At the time of any such dividend or
distribution, the Company shall make appropriate reserves to ensure the timely
performance of the provisions of this section 8.3. If the Company declares a
cash dividend the Holder shall not be entitled to receive any such dividend.
8.4 Definition of Common Stock. For the purpose of this
Agreement, the term Common Stock shall mean the following:
(a) the class of stock designated as Common
Stock in the Articles of Incorporation of the Company as may be amended, or any
other class of stock resulting from successive changes or reclassifications of
such Common Stock; and
(b) if, as a result of an adjustment made pursuant to
section 8, Holder shall upon
exercise of the Warrants become entitled to receive securities other than Common
Stock, wherever appropriate, all references herein to shares of Common Stock
shall be deemed to refer to and include such other securities and thereafter the
number of such other securities shall be subject to adjustment from time to time
in a manner and upon terms as nearly equivalent as practicable to the provisions
of this section 8.
9. Issuance of New Warrant Certificate. Upon receipt by the
Company of evidence reasonably satisfactory to it of a loss, theft, destruction
or mutilation of a Warrant Certificate, reimbursement by Holder to the Company
of all incidental expenses and, in the case of loss, theft or destruction,
receipt of indemnity or security from Holder reasonably satisfactory to it, or,
in the case of a mutilated Warrant Certificate, upon surrender and cancellation
thereof the Company shall make and deliver a replacement Warrant Certificate to
Holder.
10. Elimination of Fractional Interests. The Company shall not
be required to issue certificates representing fractions of shares of Common
Stock upon the exercise of the Warrants. The Company shall have the option to
make payment in cash in respect of any fractional shares or to round any
fraction up to the nearest whole number of shares of Common Stock.
11. Reservation and Listing of Securities. The Company shall
at all times reserve and keep available out of its authorized shares of Common
Stock, solely for the purpose of issuance upon the exercise of the Warrants,
such number of shares of Common Stock as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of the Warrants
and payment of the Exercise Price by Holder, all shares of Common Stock issuable
upon such exercise shall be duly and validly issued, fully paid, non-assessable
and not subject to the preemptive rights of any stockholder. The Company shall
use its best efforts to cause all shares of Common Stock issuable upon the
exercise of the Warrants to be listed (subject to official notice of issuance)
on all securities exchanges, if any, on which the Common Stock may then be
listed and/or quoted.
12. Representations and Warranties of Holder. Holder
represents and warrants to the Company that it is an accredited investor, as
defined in Section 501 of Regulations under the Securities Act, the Warrants are
being acquired solely for Holder's own account, for investment, and not with a
view to resale, distribution, assignment, subdivision or fractionalization
thereof, and Holder has no present plans to enter into any contract,
undertaking, agreement or arrangement for such purpose.
13. Notice to Warrant Holder. Nothing contained in this
Warrant Agreement shall be construed as conferring upon Holder, by virtue of
holding the Warrants, the right to vote, consent or receive notice as a
stockholder in respect of any meetings of stockholders for the election of
directors or any other matter, or as having any rights as a stockholder of the
Company. If, however, at any time prior to the expiration of the Warrants and
their exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to receive a dividend
or distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment (which treatment shall be in accordance
with generally accepted accounting principles) of such dividend or distribution
on the books of the Company; or
(b) the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or securities
convertible into or exchange for shares of capital stock of the Company, or any
option, right or warrant to subscribe therefor; or
(c) a dissolution, liquidation, winding up, transfer,
consolidation, or merger) or a sale of all or substantially all its property,
assets and business as an entirety shall be proposed;
the Company shall give notice of such event at least 15 days prior to the date
fixed as a record date or the date of the closing the transfer books for the
determination of the stockholders entitled to such dividend, distribution,
convertible or exchangeable securities or subscription rights, or entitled to
vote on such proposed dissolution, liquidation, winding up or sale. Such notice
shall specify such record date or the date of closing the transfer books, as the
case may be. Failure to give such notice or any defect therein shall not affect
the validity of any action taken in connection with the declaration or payment
of any such dividend, or the issuance of any convertible or exchangeable
securities, or subscription rights, options or warrants, or any proposed
dissolution, liquidation, winding up or sale.
14. Notices. Any notice or demand pursuant to this Warrant
Agreement shall be in writing and shall be deemed sufficiently given or made (a)
upon personal delivery; (b) the day following delivery to a reputable overnight
courier or (c) three days following mailing by certified or registered mail,
return receipt requested, postage prepaid, and addressed, until the other party
is notified of another address, as follows:
If to the Company:
Neurocrine Biosciences, Inc.
3050 Science Park
San Diego, California 42121
with a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Attn: Michael O'Donnell, Esq.
If to Holder:
Stephen L. Ross
c/o Aurora Capital Corp.
425 Park Avenue
New York, New York 10022-3506
15. Supplements and Amendments. This Warrant Agreement may be
amended or waived at any time but only by written agreement of the parties.
16. Successors. All the covenants and provisions of this
Warrant Agreement shall be binding upon and inure to the benefit of the Company,
Holder and their respective successors and assigns hereunder.
17. Governing Law; Submission to Jurisdiction. (a) This
Warrant Agreement and each Warrant Certificate issued hereunder shall be deemed
to be a contract made under the laws of Delaware without giving effect to rules
governing conflicts of law.
(b) Any process or summons to be served upon either the
Company or Holder (at the option of the party bringing such action, proceeding
or claim) may be served in accordance with section 14. The prevailing party in
any such action or proceeding shall be entitled to recover from the other party
all its reasonable legal costs and expenses incurred in connection with such
action or proceeding
18. Entire Agreement; Modification. This Warrant Agreement
contains the entire understanding between the parties with respect to the
subject matter hereof and may not be modified or amended except by both parties.
19. Severability. If any provision of this Warrant Agreement
is held to be invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision hereof.
20. Captions. The caption headings of the sections of this
Warrant Agreement are for convenience of reference only, are not a part of this
Warrant Agreement and shall be given no substantive effect.
21. Benefits of this Warrant Agreement. Nothing in this
Warrant Agreement shall be construed to give to any person or entity other than
the Company and Holder any legal or equitable right, remedy or claim hereunder;
and this Warrant Agreement shall be for the sole and exclusive benefit of the
Company and Holder.
22. Counterparts. This Warrant Agreement may be executed in
any number of counterparts and each of such counterparts shall be deemed to be
an original, and such counterparts shall together constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed, as of the date first set forth above.
/s/ Stephen L. Ross
Neurocrine Biosciences, Inc.
/s/ Gary Lyons
President and
Chief Executive Officer
5
1,000
6-MOS
DEC-31-1998
JAN-01-1998
JUN-30-1998
10643
54556
921
0
0
66545
13541
3688
83536
3406
0
0
0
18
78406
83536
0
6427
0
18285
0
0
64
(9161)
0
(9161)
0
0
0
(9161)
(.51)
(.51)
