Exhibit 10.3
WELLS FARGO BANK, N.A.
Trade Services – Standby Letters of Credit Operations
One Front Street, 21st Floor, San Francisco, CA 94111
Phone: (800) 798-2815 Option1; Fax: (415) 296-8905; E-Mail:
sftrade@wellsfargo.com
Irrevocable Letter of Credit
December 3, 2007
Letter of Credit NZS609824

     
To:
  DMH Campus Investors, LLC (“Beneficiary”)
 
  c/o Veralliance Properties, Inc.
 
  8910 University Center Lane, Suite 630
 
  San Diego, California 92122

Ladies and Gentlemen:
We hereby issue in your favor our Irrevocable Letter of Credit NZS609824 at the
request and for the account of Neurocrine Biosciences, Inc. (“Applicant”), in an
amount of Five Million Seven Hundred and 00/100 U.S. Dollars (US$5,700,000.00)
effective immediately and available with Wells Fargo Bank, N.A. at One Front
Street – 21st Floor, San Francisco, California 94111, by payment of your
draft(s) drawn on us at sight when accompanied by the original of this Letter of
Credit and your signed and dated statement worded as follows with the
instructions in brackets therein complied with:
“The undersigned, an authorized representative of beneficiary (“Beneficiary”)
under Wells Fargo Bank, N.A. Letter of Credit NZS609824 (“Wells Credit”), hereby
certifies that the Beneficiary is entitled to and hereby demands payment under
Wells Credit in US$[insert drawing amount] pursuant to the lease between DMH
Campus Investors, LLC, as Landlord, and Neurocrine Biosciences, Inc., as Tenant,
dated [insert date] (the “Lease”), (as such Lease may be amended, restated and
replaced from time to time) for premises located at 12780 and 12790 El Camino
Real, San Diego, California 92122.”
This Letter of Credit expires at our above office on December 31, 2008, but
shall be automatically extended, without written amendment, to December 31st in
each succeeding calendar year, unless we have sent written notice to you at your
address above by registered mail or express courier that we elect not to extend
the expiration date of this Letter of Credit beyond the date specified in such
notice, which date will be December 31, 2008 or any subsequent December 31st and
be at least sixty (60) calendar days after the date we send you such notice.
Upon our sending you such notice of the non-extension of the expiration date of
this Letter of Credit, you may also draw under this Letter of Credit by
presentation to us at our above address, on or before the expiration date
specified in such notice, of your draft drawn on us at sight when accompanied by
the original of this Letter of Credit and your

 

--------------------------------------------------------------------------------

 

signed and dated statement worded as follows with the instructions in brackets
therein complied with:
“The undersigned, an authorized representative of beneficiary (“Beneficiary”)
under Wells Fargo Bank, N.A. Letter of Credit NZS609824 (“Wells Credit”), hereby
certifies that (1) Beneficiary received a written notice from Wells Fargo Bank,
N.A. that the Wells Credit will not be extended beyond its current expiration
date, and (2) Neurocrine Biosciences, Inc. has failed to deliver a replacement
letter of credit in form and substance acceptable to the Beneficiary, and (3) at
the time of this statement, Beneficiary has not released Neurocrine Biosciences,
Inc.’s obligations under the lease between DMH Campus Investors, LLC, as
Landlord, and Neurocrine Biosciences, Inc., as Tenant, dated [insert date] (the
“Lease”), (as such Lease may be amended, restated and replaced from time to
time) for premises located at 12780 and 12790 El Camino Real, San Diego,
California 92122.”
Partial and multiple drawings are permitted under this Letter of Credit. All
drafts must be marked: “Drawn under Wells Fargo Bank, N.A. Letter of Credit
NZS609824 dated December 3, 2007”.
If any instructions accompanying a drawing under this Letter of Credit request
that payment is to be made by transfer to an account with us or at another bank,
we and/or such other bank may rely on an account number specified in such
instructions even if the number identifies a person or entity different from the
intended payee.
This Letter of Credit is transferable one or more times, but in each instance to
a single transferee and only in the full amount available to be drawn under the
Letter of Credit at the time of such transfer. Any such transfer may be effected
only through ourselves and only upon payment of our usual transfer fee and upon
presentation to us at our above-specified office of a duly executed instrument
of transfer in form and substance acceptable to us together with the original of
this Letter of Credit. Any transfer of this Letter of Credit may not change the
place of expiration of this Letter of Credit from our above-specified office.
Each transfer shall be evidenced by our endorsement on the reverse of the
original of this Letter of Credit, and we shall deliver the original of this
Letter of Credit so endorsed to the transferee.
No transfer may be made to a person or entity (transferee) who is (1) a
specially designated national, terrorist or narcotics trafficker, a blocked
entity, or a person or entity with respect to which transactions are prohibited
or otherwise restricted, or which is located in or restricted, pursuant to the
Foreign Assets Control Regulations of the United States Treasury Department, or
(2) subject to a denial order of the U.S. Department of Commerce, Bureau of
Export Administration.
All charges in connection with this Letter of Credit are for the account of the
applicant, except that any fees in connection with a transfer of this Letter of
Credit shall be paid by Beneficiary (1/4% of the amount transferred, minimum
$250.00).
This Letter of Credit sets forth in full our undertaking, and such undertaking
shall not in any way be modified, amended, amplified or limited by reference to
any document, instrument or

 

--------------------------------------------------------------------------------

 

agreement whatsoever in this Letter of Credit other than the ISP98. Reference to
any document, instrument or agreement mentioned in this Letter of Credit will
not be deemed to incorporate into this Letter of Credit such document,
instrument or agreement.
We hereby engage with you that drafts drawn under and in compliance with the
terms and conditions of this Letter of Credit will be duly honored upon
presentation at our above office.
All correspondence and any drawings hereunder are to be directed to Wells Fargo
Bank, N.A., One Front Street – 21st Floor, San Francisco, California 94111.
Drawings may be presented to us at our above office by hand delivery or
delivered to us by U.S. Postal Service mail, registered mail or certified mail
or by express courier or overnight courier.
Except as otherwise provided in this Letter of Credit, this Letter of Credit is
subject to the International Standby Practices 1998, International Chamber of
Commerce Publication No. 590 (the “ISP98”).

         
 
  Very truly yours,    
 
       
 
  Wells Fargo Bank, N.A.    
 
       
By:
  /s/ Eisa Chau    
 
       
 
       
Name:
  Eisa Chau    
 
       
Title:
  Assistant Vice President