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 0000 Xxxxxxx Xxxx Xxxx, Xxx
Xxxxx, Xxxxxxxxxx 00000, 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.
0000 Xxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X' Xxxxxxx, Esq.
If to Holder:
DOV Pharmaceutical, Inc.
0 Xxxxxx Xxxxx, Xxxxx 0000
Xxxx Xxx, Xxx Xxxxxx
Attn: Xx. Xxxxxx Xxxxx
with a copy to:
Xxxxxxxx Siegelbaum LLP
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxx, 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/Xxxxxx Xxxxx
Chief Executive Officer
Neurocrine Biosciences, Inc.
By: /s/ Xxxx Xxxxx
President and
Chief Executive Officer
