Exhibit 10.2

SHARE PURCHASE AGREEMENT

This Share Purchase Agreement (this “Agreement”), is made as of December 2, 2019
(the “Signing Date”), by and between Neurocrine Biosciences, Inc. (the
“Investor”), a Delaware corporation, and Xenon Pharmaceuticals Inc. (the
“Company”), a Canadian corporation.

RECITALS

WHEREAS, the Company and the Investor have entered into the Collaboration
Agreement; and

WHEREAS, pursuant to the terms and subject to the conditions set forth in this
Agreement, the Company desires to issue and sell to the Investor, and the
Investor desires to subscribe for and purchase from the Company, certain common
shares, no par value per share, of the Company (the “Common Shares”), in the
amount and at a purchase price determined in accordance with the Collaboration
Agreement; and

NOW, THEREFORE, in consideration of the following mutual promises and
obligations, and for good and valuable consideration, the adequacy and
sufficiency of which are hereby acknowledged, the Investor and the Company agree
as follows:

Article 1
Definitions

1.1 Defined Terms.  When used in this Agreement, the following terms shall have
the respective meanings specified therefor below:

“2014 Equity Incentive Plan” shall mean the Company’s 2014 Equity Incentive
Plan, as amended to date and as the same may be amended and/or restated from
time to time.

“2019 Inducement Equity Incentive Plan” shall mean the Company’s 2019 Inducement
Equity Incentive Plan, as amended to date and as the same may be amended and/or
restated from time to time.

“Affiliate” shall mean, with respect to any Person, another Person that,
directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such Person.  A Person shall be
deemed to control another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.  Without limiting the generality of the foregoing, a
Person shall be deemed to control another Person if such Person (ii) owns,
directly or indirectly, beneficially or legally, more than fifty percent (50%)
of the outstanding voting securities or capital stock of such other Person, or
has other comparable ownership interest with respect to any Person other than a
corporation; or (ii) has the power, whether pursuant to contract, ownership of
securities or otherwise, to direct the management and policies of such other
Person.  For the purposes of this Agreement, in no event shall the Investor or
any of its Affiliates be deemed Affiliates of the Company or any of its
Affiliates, nor shall the Company or any of its Affiliates be deemed Affiliates
of the Investor or any of its Affiliates.

“Aggregate Purchase Price” shall mean $20,000,000.

 

 

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“Acquisition Transaction” shall mean (i) any sale, license, lease, exchange,
transfer or other disposition of the assets of the Company or any subsidiary of
the Company constituting more than 50% of the consolidated assets of the Company
in any one transaction or in a series of related transactions; or (ii) any
merger, consolidation, business combination, share exchange, reorganization or
similar transaction or series of related transactions involving the Company or
any subsidiary of the Company whereby the holders of voting capital stock of the
Company immediately prior to any such transaction hold less than 50% of the
voting stock of the Company or the surviving corporation (or its parent company)
immediately after the consummation of any such transaction.

“Agreement” shall have the meaning set forth in the Preamble.

“Board” shall mean the Board of Directors of the Company.

“Business Day” shall mean a day on which banking institutions in Burnaby,
British Columbia, Canada and San Diego, California, United States are open for
business, excluding any Saturday or Sunday.

“Change of Control” shall mean the transfer, in one transaction or a series of
related transaction, as a result of which any Person or group of Persons, other
than the Company, becomes the beneficial owner (as defined in Rules 13d-3 and
13d-5 of the Exchange Act) of more than 50% of the total voting power of the
voting securities of the Company.

“Closing Conditions” shall mean the conditions to Closing set forth in Article
6, Article 7, and Article 8 hereof.

“Collaboration Agreement” shall mean the License and Collaboration Agreement,
dated December 2, 2019, between the Investor and the Company.

“Company SEC Documents” shall mean the required reports, schedules, forms,
statements and other documents (including exhibits and all other information
incorporated therein) required to be filed by it under the Securities Act and
the Exchange Act, and any required amendments to any of the foregoing, with the
SEC.

“DOJ” shall mean the U.S. Department of Justice.

“Effective Date” shall have the meaning given to such term in the Collaboration
Agreement.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.

“FTC” shall mean the U.S. Federal Trade Commission.

“GAAP” shall mean generally accepted accounting principles in the United States.

“Governmental Authority” shall mean any multinational, federal, national, state,
provincial, local or other entity, office, commission, bureau, agency, political
subdivision, instrumentality, branch, department, authority, board, court,
arbitral or other tribunal exercising executive, judicial, legislative, police,
regulatory, administrative or taxing authority or functions of any nature
pertaining to government.

“LAS” shall mean the Nasdaq Notification Form: Listing of Additional Shares.

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“Law” shall mean any law, statute, rule, regulation, order, judgment or
ordinance having the effect of law of any federal, national, multinational,
state, provincial, county, city or other political subdivision.

“Material Adverse Effect” shall mean any change, event or occurrence that,
individually or in the aggregate, results in a material adverse effect on the
business, or results of operations, assets or condition of the Company and its
subsidiaries taken as a whole, provided, however, that no change, event,
circumstance, occurrence or development resulting from the following shall be
deemed (either alone or in combination) to constitute or shall be taken into
account in determining whether there has been a Material Adverse Effect: (A)
changes in conditions in the United States or global economy or capital or
financial markets generally, including changes in interest or exchange rates,
(B) changes in general legal, regulatory, political, economic or business
conditions or changes in generally accepted accounting principles in the United
States or interpretations thereof, (C) acts of war, sabotage or terrorism, or
any escalation or worsening of any such acts of war, sabotage or terrorism, (D)
earthquakes, hurricanes, floods or other natural disasters, (E) the announcement
of this Agreement, the Collaboration Agreement or the transactions contemplated
hereby and thereby, (F) any change in the Company’s stock price or trading
volume or any failure to meet internal projections or forecasts or published
revenue or earnings projections of industry analysts (provided that the
underlying events giving rise to any such change shall not be excluded, except
to the extent any such event is included in clause (A) through (E) of this
definition) or (G) any breach, violation or non-performance by the Investor or
any of its Affiliates under the Collaboration Agreement, provided, however, that
the events excluded in clauses (A), (B), (C) and (D) shall only be excluded to
the extent the effects of such events are not disproportionately adverse on the
Company and its subsidiaries as compared to other companies operating in the
Company’s industry.

“Person” shall mean any individual, partnership, joint venture, limited
liability company, corporation, firm, trust, association, unincorporated
organization, Governmental Authority or other entity, as well as any syndicate
or group that would be deemed to be a Person under Section 13(d)(3) of the
Exchange Act.

“Rule 144” shall mean Rule 144 promulgated under the Securities Act.

“SEC” shall mean the U.S. Securities and Exchange Commission.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

“Stock Option Plan” shall mean the Company’s Amended and Restated Stock Option
Plan, as amended to date and as the same may be amended and/or restated from
time to time.

“Termination Date” shall mean the date that is six months following the Signing
Date.

“Third Party” shall mean any Person other than the Investor, the Company or any
Affiliate of the Investor or the Company.

“Transfer Agent” shall mean the Company’s transfer agent.

 

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Article 2
Purchase and Sale of Common Shares

Subject to the terms and conditions of this Agreement, at the Closing, the
Company shall issue and sell to the Investor and the Investor shall purchase
from the Company, 1,408,847 Common Shares (the “Purchased Shares”), for the
Aggregate Purchase Price.

Article 3
Closing; Deliveries.

3.1 Closing.  The closing of the purchase and sale of the Purchased Shares
hereunder (the “Closing”) shall take place remotely via the exchange of
documents and signatures at 9:00 a.m. New York City time on the Signing Date,
provided that all of the Closing Conditions (other than those conditions that by
their nature are to be satisfied at the Closing, but subject to the satisfaction
at such time of such conditions) have been satisfied or waived, or at such other
time, date, and location as the parties may agree.

3.2 Deliveries.

 

(a)

Deliveries by the Company.  At the Closing, or as soon as practicable
thereafter, the Company shall deliver, or cause to be delivered, to the Investor
the Purchased Shares, registered in the name of the Investor, and the Company
shall instruct the Transfer Agent to register such issuance at the time of such
issuance.  The Company shall also deliver at the Closing: (i) a certificate in
form and substance reasonably satisfactory to the Investor and duly executed on
behalf of the Company by an authorized executive officer of the Company,
certifying that the conditions to Closing set forth in Article 6 and Section 8.1
hereof have been fulfilled and (ii) a certificate of the secretary or assistant
secretary of the Company dated as of the Signing Date certifying (A) that
attached thereto is a true and complete copy of the Amended and Restated By-laws
of the Company as in effect at the time of the actions by the Board referred to
in clause (B) below and on the Signing Date; (B) that attached thereto is a true
and complete copy of all resolutions adopted by the Board authorizing the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby and that all such resolutions are in full force and effect
and are all the resolutions adopted in connection with the transactions
contemplated hereby and thereby as of the Signing Date; (C) that attached
thereto is a true and complete copy of the Company’s Restated Articles of
Incorporation as in effect at the time of the actions by the Board referred to
in clause (B) above and on the Signing Date; and (D) as to the incumbency and
specimen signature of any officer of the Company executing this Agreement on
behalf of the Company.

 

(b)

Deliveries by the Investor.  At the Closing, the Investor shall deliver, or
cause to be delivered, to the Company the Aggregate Purchase Price by wire
transfer of immediately available United States funds to an account designated
by the Company.  The Investor shall also deliver, or cause to be delivered, at
the Closing: (i) a certificate in form and substance reasonably satisfactory to
the Company duly executed by an authorized executive officer of the Investor
certifying that the conditions to Closing set forth in Article 7 hereof have
been fulfilled and (ii) a certificate of the secretary or assistant secretary of
the Investor dated as of the Signing Date certifying as to the incumbency and
specimen signature of any officer executing this Agreement on behalf of the
Investor.

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Article 4
Representations and Warranties of the Company

The Company hereby represents and warrants to the Investor that:

4.1 Organization, Good Standing and Qualification.

 

(a)

The Company has been duly continued and is validly existing as a corporation in
good standing under the Canada Business Corporations Act and is up-to-date in
all material corporate filings and has the corporate power and capacity to own,
lease and operate its properties and to conduct its business as described in the
Company SEC Documents and to enter into and perform its obligations under this
Agreement, except where the failure to be so qualified or in good standing or
have such power or authority would not, singularly or in the aggregate, have a
Material Adverse Effect.

4.2 Capitalization and Voting Rights.

 

(a)

As of the Signing Date, the authorized capital of the Company consists of:
(i) an unlimited number of Common Shares, of which (A) 25,880,178 shares are
issued and outstanding, (B) 2,964,029 shares are issuable upon the exercise of
outstanding stock options or upon the settlement of outstanding equity awards
issued pursuant to the 2014 Equity Incentive Plan, (C) 51,507 shares are
reserved for future issuance pursuant to the 2014 Equity Incentive Plan, (D)
155,250 shares are issuable upon the exercise of outstanding stock options or
upon the settlement of outstanding equity awards issued pursuant to the 2019
Inducement Equity Incentive Plan, (E) 244,750 shares are reserved for future
issuance pursuant to the 2019 Inducement Equity Incentive Plan, (F) 532,874
shares are issuable upon the exercise of outstanding stock options or upon the
settlement of outstanding equity awards issued pursuant to the Stock Option
Plan, (G) no shares are reserved for future issuance pursuant to the Stock
Option Plan and (H) 40,000 shares are issuable upon the exercise of outstanding
warrants to purchase Common Shares and (ii) an unlimited number of preferred
shares, no par value per share (the “Preferred Shares”), of which 1,016,000
Series 1 preferred shares are issued and outstanding. All of the issued and
outstanding Common Shares and Preferred Shares have been duly authorized and
validly issued and are fully paid and non-assessable, were issued in compliance
with applicable securities Laws.  None of the outstanding Common Shares and
Preferred Shares were issued in violation of any preemptive rights, rights of
first refusal or other similar rights to subscribe for or purchase securities of
the Company.

 

(b)

There are no authorized or outstanding options, warrants, preemptive rights,
rights of first refusal or other rights to purchase, or equity or debt
securities convertible into or exchangeable or exercisable for, any share
capital of the Company other than those described in the Company SEC
Documents.  

 

(c)

Except as disclosed in the Company SEC Documents, no Person has any right to
cause the Company to effect the registration under the Securities Act of any
securities of the Company, except for such rights as have been duly waived or
expired.

 

(d)

The Common Shares are registered pursuant to Section 12(b) or 12(g) of the
Exchange Act, and the Company has taken no action designed to, or which to its
knowledge is likely to have the effect of, terminating the registration of the
Common Shares under the Exchange Act nor has the Company received any
notification that the SEC is contemplating terminating such registration.

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4.3 Subsidiaries.  Except as otherwise disclosed in the Company SEC Documents,
the Company does not own or control, directly or indirectly, any corporation,
association or other entity.

4.4 Authorization.

 

(a)

This Agreement and the Collaboration Agreement have been duly authorized,
executed and delivered by the Company and, upon the due execution and delivery
of this Agreement and the Collaboration Agreement by the Investor, will
constitute valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally
or by equitable principles relating to enforceability.

 

(b)

No stop order or suspension of trading of the Common Shares has been imposed or
to the Company’s knowledge, threatened by the Nasdaq Stock Market, the SEC or
any other Governmental Authority and remains in effect.

4.5 No Defaults.  The Company is not (i) in violation of its Articles of
Incorporation or By-laws or similar organizational documents; (ii) in default
(nor, with the giving of notice or lapse of time, would it be in default) under
any indenture, loan, credit agreement, note, lease, license agreement, contract,
franchise or other instrument (including, without limitation, any pledge
agreement, security agreement, mortgage or other instrument or agreement
evidencing, guaranteeing, securing or relating to indebtedness) to which the
Company is a party or by which it may be bound, or to which any of its
properties or assets are subject (an “Existing Instrument”); or (iii) in
violation of any law or statute or any judgment, order, rule or regulation of
any court or arbitrator or governmental or regulatory authority having
jurisdiction over the Company or any of its subsidiaries, except, in the case of
clauses (ii) and (iii) above, for any such default or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.

4.6 No Conflicts.  The execution, delivery and performance of this Agreement and
the Collaboration Agreement, the issuance and sale of the Purchased Shares and
the consummation of the transactions contemplated by this Agreement and the
Collaboration Agreement (i) have been duly authorized by all necessary corporate
action and will not result in any violation of the provisions of the articles of
continuance or by-laws of the Company, (ii) will not conflict with or constitute
a breach of, or Default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company pursuant
to, or require the consent of any other party to, any Existing Instrument and
(iii) will not result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company, except, in the case of
clauses (ii) and (iii) above, for any such conflict, breach, violation or
default that would not, individually or in the aggregate, have a Material
Adverse Effect.

4.7 No Governmental Authority or Third Party Consents.  No consent, approval,
authorization or other order of, or registration or filing with, any court or
other governmental or regulatory authority or agency is required for the
execution, delivery and performance by the Company of each of this Agreement or
the Collaboration Agreement or the issuance and sale of the Purchased Shares,
except (i) such filings as may be required to be made with the SEC, with any
state blue sky or securities regulatory authority or any Canadian securities
regulatory authority, which filings shall be made in a timely manner in
accordance with all applicable Laws, and (ii) with respect to the Purchased
Shares, the filing with the Nasdaq Stock Market of, and the absence of
unresolved issues with respect to, an LAS and, if required, a Nasdaq Shares
Outstanding Change Form.

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4.8 Valid Issuance of Shares.  The Purchased Shares have been duly authorized
for issuance and sale pursuant to this Agreement and, when issued and delivered
by the Company against payment therefor at Closing, will be validly issued,
fully paid and non-assessable, and the issuance and sale of the Purchased Shares
is not subject to any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase the Shares.

4.9 Litigation.  There is no action, suit, proceeding, inquiry or investigation
brought by or before any governmental entity now pending or, to the knowledge of
the Company, threatened, against or affecting the Company, would reasonably be
expected to have a Material Adverse Effect.  No material labor dispute with the
employees of the Company, or with the employees of any principal supplier,
manufacturer, customer or contractor of the Company, exists or, to the knowledge
of the Company, is threatened or imminent.

4.10 Licenses and Other Rights; Compliance with Laws.  The Company possesses
such valid and current certificates, authorizations or permits required by
state, federal, provincial or foreign regulatory agencies or bodies to conduct
its business as currently conducted and as described in the Company SEC
Documents (“Permits”), except where the failure to so possess could not
reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect.  The Company is not in violation of, or in default under, any of
the Permits, except for such violations or defaults as could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect,
and has not received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate, authorization or
permit, which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected to,
individually or in the aggregate, result in a Material Adverse Effect.

4.11 Company SEC Documents; Financial Statements; Nasdaq Stock Market.

 

(a)

As of their respective filing dates each of the Company SEC Documents complied
in all material respects with the requirements of the Securities Act, the
Exchange Act, and the rules and regulations of the SEC promulgated thereunder
applicable to such Company SEC Documents, and no Company SEC Documents when
filed, declared effective or mailed, as applicable, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.  As of the Signing
Date, there are no outstanding or unresolved comments in comment letters
received from the SEC or its staff.

 

(b)

The financial statements of the Company included in its Annual Report on Form
10-K for the most recently completed fiscal year and in each of its quarterly
reports on Form 10-Q for the quarterly periods ended March 31, June 30, and
September 30 of the current fiscal year filed with the SEC as of the date of
this Agreement present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of their
operations and the changes in their cash flows for the periods specified; such
financial statements have been prepared in conformity with GAAP applied on a
consistent basis throughout the periods covered thereby, except as otherwise
disclosed therein and, in the case of unaudited, interim financial statements,
subject to normal year-end audit adjustments and the exclusion of certain
footnotes, and any supporting schedules included in the Company SEC Documents
present fairly the information required to be stated therein.

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(c)

The Common Shares are listed on the Nasdaq Stock Market, and the Company has
taken no action designed to, or which is likely to have the effect of,
terminating the registration of the Common Shares under the Exchange Act or
delisting the Common Shares from the Nasdaq Stock Market.  The Company has not
received any notification that, and has no knowledge that, the SEC or the Nasdaq
Stock Market is contemplating terminating such listing or registration.

 

(d)

Since the end of the Company’s most recent audited fiscal year, there have been
no significant deficiencies or material weakness in the Company’s internal
control over financial reporting (whether or not remediated) and no change in
the Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting. The Company is not aware of any change in its
internal control over financial reporting that has occurred during its most
recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting.

 

(e)

The Company maintains disclosure controls and procedures (as defined in Rule
13a-15(e) of the Exchange Act) that (i) are designed to ensure that material
information relating to the Company, is made known to the Company’s principal
executive officer and its principal financial officer by others within those
entities, particularly during the periods in which the periodic reports required
under the 1934 Act are being prepared; (ii) have been evaluated by management of
the Company for effectiveness as of the end of the Company’s most recent fiscal
quarter; and (iii) are effective in all material respects at the reasonable
assurance level to perform the functions for which they were established  The
Company has conducted evaluations of the effectiveness of its disclosure
controls as required by Rule 13a-15 of the Exchange Act.

 

(f)

There is and has been no material failure on the part of the Company or, to the
knowledge of the Company, any of the Company’s directors or officers, in their
capacities as such, to comply with any applicable provision of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith, including Section 402 related to loans and Sections 302
and 906 related to certifications.

4.12 Absence of Certain Changes.  Since September 30, 2019, (i) there has not
occurred any event that has caused or would reasonably be expected to cause a
Material Adverse Effect on the Company and its subsidiaries, taken as a whole;
(ii) other than as described in the Company SEC Documents, the Company has not
entered into any transactions not in the ordinary course of business that are
material, individually or in the aggregate, to the Company; and (iii) other than
as described in the Company SEC Documents, there has not been any material
decrease in the share capital or any material increase in any short-term or
long-term indebtedness of the Company and there has been no dividend or
distribution of any kind declared, paid or made by the Company or any repurchase
or redemption by the Company of any class of share capital.

4.13 Offering.  Subject to the accuracy of the Investor’s representations set
forth in Sections 5.5, 5.6, 5.7, 5.9, 5.10 and 5.11 hereof, the offer, sale and
issuance of the Purchased Shares to be issued in conformity with the terms of
this Agreement constitute transactions which are exempt from the registration
requirements of the Securities Act and from all applicable state registration or
qualification requirements.  Neither the Company nor any Person acting on its
behalf will take any action that would cause the loss of such exemption.

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4.14 No Integration.  The Company has not, directly or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as defined in the Securities Act), that is or will be integrated
with the sale of the Purchased Shares in a manner that would require
registration of the Purchased Shares under the Securities Act.

4.15 Brokers’ or Finders’ Fees.  There is no broker, finder or other party that
is entitled to receive from the Company any brokerage or finder’s fee or other
fee or commission as a result of any transactions contemplated by this Agreement
or the Collaboration Agreement.

4.16 Investment Company.  The Company is not and, immediately after giving
effect to the offering and sale of the Purchased Shares and the application of
the proceeds thereof, will not be required to register as an “investment
company” under the Investment Company Act of 1940, as amended, and the rules and
regulations of the SEC thereunder.

4.17 No General Solicitation.  Neither the Company nor any person acting on
behalf of the Company has offered or sold any of the Purchased Shares by any
form of general solicitation or general advertising.  The Company has offered
the Purchased Shares for sale only to the Investor.

4.18 Foreign Corrupt Practices.  Neither the Company nor, to the knowledge of
the Company, any agent or other person acting on behalf of the Company has, in
the course of its actions for, or on behalf of, the Company: (i) directly or
indirectly used any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses related to political activity, (ii) made any direct or
indirect unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) made any unlawful bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any domestic government official,
such foreign official or employee or (iv) violated in any material respect any
provision of the Foreign Corrupt Practices Act of 1977, as amended, or any
applicable non-U.S. anti-bribery Law.

4.19 Regulation M Compliance.  The Company has not taken, directly or
indirectly, any action designed to or that would reasonably be expected to cause
or result in stabilization or manipulation of the price of the Common Shares to
facilitate the sale or resale of the Purchased Shares.

4.20 Office of Foreign Assets Control.  Neither the Company nor, to the
Company’s knowledge, any director, officer, agent, employee or Affiliate of the
Company is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department.

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4.21 Development Matters.

 

(a)

The studies, tests and preclinical or clinical trials conducted by or on behalf
of the Company that are described in the Company SEC Documents (the “Company
Studies and Trials”) were and, if still pending, are, to the Company’s
knowledge, being conducted in all material respects in accordance with
experimental protocols, procedures and controls designed and approved for such
Company Studies and Trials; the descriptions of the results of the Company
Studies and Trials contained in the Company SEC Documents are, to the Company’s
knowledge, accurate in all material respects; the Company has no knowledge of
any other studies or trials not described in the Company SEC Documents, the
results of which are inconsistent with or call in question the results described
or referred to in the Company SEC Documents; the Company has made all such
filings and obtained all such approvals as may be required by the United States
Food and Drug Administration (the “FDA”) or any committee thereof and from any
foreign, state or local governmental authority exercising comparable authority,
or health care facility Institutional Review Board, except as could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect; and the Company has not received any notices or correspondence
from the FDA or any foreign, state or local governmental authority exercising
comparable authority requiring the termination, suspension or material
modification of any Company Studies and Trials that termination, suspension or
material modification would reasonably be expected to have a Material Adverse
Effect.

4.22 Intellectual Property.  

 

(a)

The Company owns, or has obtained valid and enforceable licenses for all
inventions, patent applications, patents, trademarks, trade names, service
names, copyrights, trade secrets and other intellectual property described in
the Company SEC Documents as being owned or licensed by them or which are
necessary in all material respects for the conduct of its business as currently
conducted or as currently proposed to be conducted (collectively, “Intellectual
Property”).  

 

(b)

To the Company’s knowledge, except as could not reasonably be expected,
singularly or in the aggregate, to have a Material Adverse Effect: (i) there are
no third parties who have rights to any Intellectual Property, except for
customary reversionary rights of third-party licensors or co-ownership rights
with respect to Intellectual Property that are disclosed in the Company SEC
Documents as being subject to a third party’s joint ownership interest or as
being licensed to the Company; and (ii) there is no infringement by third
parties of any Intellectual Property.  

 

(c)

Except as could not reasonably be expected, singularly or in the aggregate, to
have a Material Adverse Effect, there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others: (A)
challenging the Company’s rights in or to any Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis for any such
action, suit, proceeding or claim; (B) challenging the validity, enforceability
or scope of any Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such action, suit, proceeding or
claim; or (C) asserting that the Company infringes or otherwise violates, or
would, upon the commercialization of any product or service described in the
Company SEC Documents as under development, infringe or violate, any patent,
trademark, trade name, service name, copyright, trade secret or other
proprietary rights of others, and the Company is unaware of any facts which
would form a reasonable basis for any such action, suit, proceeding or claim.  

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(d)

The Company has complied in all material respects with the terms of each
agreement pursuant to which Intellectual Property has been licensed to the
Company, and all such agreements are in full force and effect as to the Company
and to the Company’s knowledge as to the other parties to such agreements.  The
product candidates described in the Company SEC Documents as under development
by the Company fall within the scope of the claims of one or more patents or
patent applications owned by, or exclusively licensed to, the Company.

4.23 Real and Personal Property.  The Company has good and marketable title in
fee simple (in the case of real property) to, or has valid and marketable rights
to lease or otherwise use, all items of real or personal property, which are
material to the business of the Company taken as a whole, in each case free and
clear of any security interests, mortgages, liens, encumbrances, equities,
adverse claims and other defects except such as do not, individually or in the
aggregate, materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company.  The
real property, improvements, equipment and personal property held under lease by
the Company are held under valid and enforceable leases, with such exceptions as
are not material and do not materially interfere with the use made or proposed
to be made of such real property, improvements, equipment or personal property
by the Company.

4.24 Environmental Matters.  Except as could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect:  (i) the
Company is not in violation of any federal, state, provincial, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common law or
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, “Hazardous Materials”) or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, “Environmental Laws”); (ii) the Company has
all permits, authorizations and approvals required under any applicable
Environmental Laws and is in compliance with their requirements; (iii) there are
no pending or, to the knowledge of the Company, threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings relating to
any Environmental Law against the Company; and (iv) to the knowledge of the
Company, there are no events or circumstances existing as of the date hereof
that might reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company relating to
Hazardous Materials or any Environmental Laws.

4.25 Taxes.  The Company (i) has timely filed all necessary federal, state,
local and foreign tax returns (or timely filed extensions with respect to such
returns), and all such returns were true, complete and correct, (ii) has paid
all federal, state, local and foreign taxes, assessments, governmental or other
charges due and payable for which it is liable, including, without limitation,
all sales and use taxes and all taxes which the Company is obligated to withhold
from amounts owing to employees, creditors and third parties, and (iii) does not
have any tax deficiency or claims outstanding or assessed or, to its knowledge,
proposed against it, except those, in each of the cases described in clauses
(i), (ii) and (iii) above, that would not, singularly or in the aggregate,
reasonably be expected to have a Material Adverse Effect The accruals and
reserves on the books and records of the Company in respect of tax liabilities
for any taxable period not yet finally determined are adequate to meet any
assessments and related liabilities for any such period.

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4.26 Insurance.  The Company carries or is covered by, insurance in such amounts
and covering such risks as is adequate for the conduct of its business and the
value of its properties and as is customary for companies engaged in similar
businesses, at a similar stage of development, in similar industries.  The
Company has no reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a
cost that would not reasonably be expected to have a Material Adverse Effect.
The Company has not been denied any insurance coverage which it has sought or
for which it has applied.

Article 5
Representations and Warranties of the Investor

The Investor hereby represents and warrants to the Company that:

5.1 Organization; Good Standing.  The Investor is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware.  The Investor has all requisite corporate power and corporate
authority to enter into this Agreement, to purchase the Purchased Shares and to
perform its obligations under and to carry out the other transactions
contemplated by this Agreement.

5.2 Authorization.

 

(a)

The Investor has full right, power and authority to execute and deliver this
Agreement and the Collaboration Agreement and to perform its obligations
hereunder and thereunder; and all action required to be taken for the due and
proper authorization, execution and delivery by it of each of this Agreement and
the Collaboration Agreement and the consummation by it of the transactions
contemplated thereby has been duly and validly taken.

 

(b)

This Agreement and the Collaboration Agreement have been duly executed and
delivered by the Investor and, upon the due execution and delivery of this
Agreement and the Collaboration Agreement by the Company, will constitute valid
and legally binding obligations of the Investor, enforceable against the
Investor in accordance with their respective terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally or by equitable principles
relating to enforceability.

5.3 No Conflicts.  The execution, delivery and performance of this Agreement and
the Collaboration Agreement, the subscription for and purchase of the Purchased
Shares and the consummation of the transactions contemplated by this Agreement
and the Collaboration Agreement will not (i) conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Investor pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Investor is a party, by which the Investor is bound or
to which any of the property or assets of the Investor is subject, (ii) result
in any violation of the provisions of the certificate of incorporation or
by-laws or similar organizational documents of the Investor or (iii) result in
the violation of any law or statute or any judgment, order, rule  or regulation
of any court or arbitrator or governmental or regulatory authority having
jurisdiction over the Investor or any of its subsidiaries, except, in the case
of clauses (i) and (iii) above, for any such conflict, breach, violation or
default that would not, individually or in the aggregate, have a material
adverse effect on the Investor’s ability to perform its obligations or
consummate the transactions contemplated hereby in accordance with the terms of
this Agreement.

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5.4 No Governmental Authority or Third Party Consents.  No consent, approval,
authorization, order, license, registration or qualification of or with any
court or arbitrator or governmental or regulatory authority is required for the
execution, delivery and performance by the Investor of each of this Agreement or
the Collaboration Agreement or with the subscription for and purchase of the
Purchased Shares.

5.5 Purchase Entirely for Own Account.  The Investor is subscribing for the
Purchased Shares as principal and acknowledges that the Purchased Shares shall
be acquired for investment for the Investor’s own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and the Investor has no present intention of selling, granting any participation
or otherwise distributing the Purchased Shares.  The Investor can bear the
economic risk of an investment in the Purchased Shares indefinitely and a total
loss with respect to such investment.  The Investor does not have and will not
have as of the Closing any contract, undertaking, agreement, arrangement or
understanding with any Person to sell, transfer or grant participation to a
Person any of the Purchased Shares.

5.6 Disclosure of Information.  The Investor has received or has had full access
to all the information from the Company and its management that the Investor
considers necessary or appropriate for deciding whether to purchase the
Purchased Shares hereunder.  The Investor further represents that it has had an
opportunity to ask questions and receive answers from the Company regarding the
Company, its financial condition, results of operations and prospects and the
terms and conditions of the offering of the Purchased Shares sufficient to
enable it to evaluate its investment.

5.7 Investment Experience and Accredited Investor Status.  The Investor is an
“accredited investor” (as defined in Regulation D under the Securities
Act).  The Investor has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Purchased Shares to be purchased hereunder.

5.8 Acquiring Person.  As of the Signing Date, neither the Investor nor any of
its Affiliates beneficially owns, and immediately prior to the Closing, neither
the Investor nor any of its Affiliates will beneficially own (in each case, as
determined pursuant to Rule 13d-3 under the Exchange Act without regard for the
number of days in which a Person has the right to acquire such beneficial
ownership, and without regard to Investor’s rights under this Agreement), any
securities of the Company, except for securities that may be beneficially owned
by employee benefit plans of either the Investor or any of its Affiliates.

5.9 Residence. The Investor is not a resident or subject to the securities laws
of a Province or Territory of Canada and has complied with the applicable
securities legislation in the jurisdiction of its residence, in each case as
they relate to the purchase of the Purchased Shares hereunder.

5.10 No “Bad Actor” Disqualification.  The Investor has not taken any of the
actions set forth in, and is not subject to, the disqualification provisions of
Rule 506(d)(1) of the Securities Act.  The Investor’s responses in the
questionnaire delivered to the Company by the Investor related to qualification
under Rule 506(d)(1) are true and correct as of the Signing Date and will remain
true and correct as of the Closing.

5.11 Restricted Securities.  The Investor understands that the Purchased Shares,
when issued, shall be “restricted securities” under U.S. federal securities Laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such Laws the Purchased Shares may be
resold without registration under the Securities Act only in certain limited
circumstances.  The Investor represents that it is familiar with Rule 144, as
presently in effect.

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5.12 Legends.  The Investor understands that any certificates representing the
Purchased Shares shall bear the following legends:

 

(a)

“These securities have not been registered under the Securities Act of
1933.  They may not be sold, offered for sale, pledged or hypothecated in the
absence of a registration statement in effect with respect to the securities
under the Securities Act or an opinion of counsel (which counsel shall be
reasonably satisfactory to the Company) that such registration is not required
or unless sold pursuant to Rule 144 of the Securities Act.”;

 

(b)

“These securities are subject to transfer restrictions set forth in a Share
Purchase Agreement by and between Neurocrine Biosciences, Inc. and Xenon
Pharmaceuticals Inc.”; and

 

(c)

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE APRIL 3, 2020.”; and

 

(d)

any legend required by applicable state securities Laws.

5.13 Financial Assurances.  As of the Signing Date, the Investor has, and as of
the Closing, the Investor will have, access to cash in an amount sufficient to
pay to the Company the Aggregate Purchase Price.

5.14 SEC Reports.  The Investor has reviewed the Company SEC Documents.

Article 6
Investor’s Conditions to Closing

The Investor’s obligation to purchase the Purchased Shares at the Closing is
subject to the fulfillment as of the Closing of the following conditions (unless
waived in writing by the Investor):

6.1 Representations and Warranties.  The representations and warranties made by
the Company in Article 4 hereof shall be true and correct as of the Signing Date
and as of the Closing as though made on and as of the Closing, except to the
extent such representations and warranties are specifically made as of a
particular date, in which case such representations and warranties shall be true
and correct as of such date; provided, however, that for purposes of this
Section 6.1, all such representations and warranties of the Company (other than
Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.8, and 4.11 hereof) shall be deemed to
be true and correct for purposes of this Section 6.1 unless the failure or
failures of such representations and warranties to be so true and correct,
without regard to any “material,” “materiality” or “Material Adverse Effect”
qualifiers set forth therein, constitute a Material Adverse Effect.

6.2 Covenants.  All covenants and agreements contained in this Agreement to be
performed or complied with by the Company on or prior to the Closing shall have
been performed or complied with in all material respects.

6.3 Collaboration Agreement.  The Collaboration Agreement shall not have been
terminated in accordance with its terms and shall be in full force and effect as
of the Closing.

6.4 No Material Adverse Effect.  From and after the Signing Date until the
Closing, there shall have occurred no event that has caused a Material Adverse
Effect.

6.5 Listing.  The Purchased Shares shall be eligible and approved for listing on
the Nasdaq Stock Market.

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Article 7
Company’s Conditions to Closing

The Company’s obligation to issue and sell the Purchased Shares at the Closing
is subject to the fulfillment as of the Closing of the following conditions
(unless waived in writing by the Company):

7.1 Representations and Warranties.  The representations and warranties made by
the Investor in Article 5 hereof shall be true and correct as of the Signing
Date and as of the Closing as though made on and as of the Closing, except to
the extent such representations and warranties are specifically made as of a
particular date, in which case such representations and warranties shall be true
and correct as of such date.

7.2 Covenants.  All covenants and agreements contained in this Agreement to be
performed or complied with by the Investor on or prior to the Closing shall have
been performed or complied with in all material respects.

7.3 Collaboration Agreement.  The Collaboration Agreement shall not have been
terminated in accordance with its terms and shall be in full force and effect.

Article 8
Mutual Conditions to Closing

The obligations of the Investor and the Company to consummate the Closing are
subject to the fulfillment as of the Closing of the following conditions:

8.1 Absence of Litigation.  There shall be no action, suit, proceeding or
investigation by a Governmental Authority pending or currently threatened in
writing against the Company or the Investor (i) that questions (A) the validity
of this Agreement or (B) the right of the Company or the Investor to enter into
this Agreement or to consummate the transactions contemplated hereby or thereby
or (ii) which, if determined adversely, would impose substantial monetary
damages on the Company or the Investor as a result of the consummation of the
transactions contemplated by this Agreement.

8.2 No Prohibition.  No provision of any applicable Law and no judgment,
injunction (preliminary or permanent), order or decree shall be in effect that
prohibits, makes illegal or enjoins the consummation of the transactions
contemplated hereby.

Article 9
Termination

9.1 Pre-Closing Termination.  This Agreement may be terminated at any time prior
to the Closing by:

 

(a)

mutual written consent of the Company and the Investor;

 

(b)

either the Company or the Investor, upon written notice to the other, if any of
the mutual conditions to the Closing set forth in Section 8 hereof shall have
become incapable of fulfillment by the Termination Date and such conditions
shall not have been waived in writing by the other party within ten business
days after receiving receipt of written notice of an intention to terminate
pursuant to this clause (b); provided, however, that the right to terminate this
Agreement under this Section 9.1(b) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure to consummate the transactions contemplated hereby
prior to the Termination Date;

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(c)

the Company, upon written notice to the Investor, so long as the Company is not
then in breach of its representations, warranties, covenants or agreements under
this Agreement such that any of the conditions set forth in Section 6.1, 6.2,
6.3, or 6.4 hereof, as applicable, could not be satisfied by the Termination
Date, (i) upon a material breach of any covenant or agreement on the part of the
Investor set forth in this Agreement, or (ii) if any representation or warranty
of the Investor shall have been or become untrue, in each case such that any of
the conditions set forth in Section 7.1, 7.2, or 7.3 hereof, as applicable,
could not be satisfied by the Termination Date;

 

(d)

the Investor, upon written notice to the Company, so long as the Investor is not
then in breach of its representations, warranties, covenants or agreements under
this Agreement such that any of the conditions set forth in Section 7.1, 7.2, or
7.3 hereof, as applicable, could not be satisfied by the Termination Date, (i)
upon a material breach of any covenant or agreement on the part of the Company
set forth in this Agreement, or (ii) if any representation or warranty of the
Company shall have been or become untrue, in each case such that any of the
conditions set forth in Section 6.1, 6.2, 6.3, or 6.4 hereof, as applicable,
could not be satisfied by the Termination Date.

9.2 Effect of Pre-Closing Termination.  In the event of the termination of this
Agreement pursuant to Section 9.1 hereof, (i) this Agreement (except for this
Section 9.2 and Article 11 hereof (other than Section 11.12), and any
definitions set forth in this Agreement and used in such sections) shall
forthwith become void and have no effect, without any liability on the part of
any party hereto or its Affiliates, and (ii) all filings, applications and other
submissions made pursuant to this Agreement, to the extent practicable, shall be
withdrawn from the agency or other Person to which they were made or
appropriately amended to reflect the termination of the transactions
contemplated hereby; provided, however, that nothing contained in this Section
9.2 shall relieve any party from liability for fraud or any intentional or
willful breach of this Agreement.

Article 10
Additional Covenants and Agreements

10.1 Market Listing.  From the Signing Date through the Closing, Company shall
use all commercially reasonable efforts to (i) maintain the listing and trading
of the Common Shares on the Nasdaq Stock Market and (ii) effect the listing of
the Purchased Shares on the Nasdaq Stock Market, including submitting the LAS to
the Nasdaq Stock Market.

10.2 Assistance and Cooperation.  Prior to the Closing, upon the terms and
subject to the conditions set forth in this Agreement, each of the parties
agrees to use all reasonable efforts to take, or cause to be taken, all actions
and to do, or cause to be done, and to assist and cooperate with the other party
in doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement, including using all reasonable efforts to
accomplish the following: (i) taking all reasonable acts necessary to cause the
conditions precedent set forth in Article 6, Article 7 and Article 8 hereof to
be satisfied (including, in the case of the Company, promptly notifying the
Investor of any notice from the Nasdaq Stock Market with respect to the LAS);
(ii) taking all reasonable actions necessary to obtain all necessary actions or
non-actions, waivers, consents, approvals, orders and authorizations from
Governmental Authorities and the making of all necessary registrations,
declarations and filings (including registrations, declarations and filings with
Governmental Authorities, if any); (iii) taking all reasonable actions necessary
to obtain all necessary consents, approvals or waivers from Third Parties; and
(iv) defending any suits, claims, actions, investigations or proceedings,
whether judicial or administrative, challenging this Agreement or the
consummation of the transactions contemplated hereby, including seeking to have
any stay or temporary restraining order entered by any court or other
Governmental Authority vacated or reversed.

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10.3 Lock-Up Agreement. During the period commencing with the Effective Date and
ending on the earlier of (i) the twenty-four (24) month anniversary of the
Effective Date and (ii) the date on which the Company first publicly announces
the results of a Phase 2 Clinical Trial for a XEN901 Product (each as defined in
the Collaboration Agreement) (the “Lock-Up Period”), without the prior approval
of the Company, the Investor shall not (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale or, or otherwise
dispose of or transfer any of the Purchased Shares (together with (a) any shares
of Common Stock issued in respect thereof as a result of any stock split, stock
dividend, share exchange, merger, consolidation, or similar recapitalization and
(b) any shares of Common Stock issued as (or issuable upon the exercise of any
warrant or other securities that is issued as) a dividend or other distribution
with respect to, or in exchange or in replacement of, the Purchased Shares (the
“Lock-Up Securities”)), including, without limitation, any “short sale” or
similar arrangement, or (ii) enter into any swap or any other agreement or any
transaction that transfer, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Purchased Shares, whether any such swap
or transaction is to be settled by deliver of securities, in cash or otherwise;
provided, however, that the foregoing shall not (A) prohibit the Investor or its
Affiliates from transferring Lock-Up Securities to an Affiliate of the Issuer if
such transferee Affiliate executes an agreement with the Company to be bound by
the restrictions set forth in this Section 10.3 and Section 10.4; (B) prohibit
the Investor or its Affiliates from selling or otherwise disposing of or
transferring Lock-Up Securities into a tender offer by a Third Party or an
issuer tender offer by the Company; and (C) restrict any sale or other disposal
or transfer of Common Shares which are not Lock-Up Securities held by an
executive officer or director of the Investor for his or her personal account,
or that may occur (or be deemed to occur) in connection with a Change of Control
of the Investor (replacing references to “Company” with “Investor” in the
definition of “Change of Control”). Transfers, sales and other disposals
referred to in clauses (A) through (C) above are referred to herein as “Excluded
Transfers”.

10.4 Sale Volume Limitation.  Following the expiration of the Lock-Up Period,
without the prior approval of the Company, Investor shall not offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale or,
or otherwise dispose of or transfer during any calendar month greater than
twelve and one-half percent (12.5%) of the aggregate number of Lock-Up
Securities held by Investor or its Affiliates as of the last day of the Lock-Up
Period; provided, however, that the foregoing shall not prohibit or restrict any
Excluded Transfers.

10.5 Standstill.  Without the prior approval of the Company, from the Effective
Date until the twenty-four (24) month anniversary of the Effective Date, the
Investor agrees that it will not, and will cause its Affiliates to not, directly
or indirectly:

 

(a)

purchase, offer to purchase, or agree to purchase or otherwise acquire
beneficial ownership (as determined in accordance with Rule 13d-3 and Rule 13d-5
under the Exchange Act) of any Common Stock, or any securities convertible or
exchangeable into Common Stock, excluding any shares of Common Stock acquired
pursuant to the transactions contemplated in the Collaboration Agreement;

 

(b)

make, or participate in, any solicitation of proxies to vote any voting
securities of the Company or any of its subsidiaries, or propose to change or
control the management or board of directors of the Company by use of any public
communication to holders of securities intended for such purpose; provided,
however, that nothing in this Section 10.5 shall limit the Investor’s ability to
vote or transfer (subject to Sections 10.3 and 10.4 hereof) its Common Stock;

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(c)

make a public proposal for a Change of Control, including a merger,
consolidation or other business combination transaction or tender offer related
thereto, or the purchase of all or substantially all of the assets of the
Company and its subsidiaries; or

 

(d)

knowingly encourage, accept, or support a tender, exchange, or offer proposal by
any Person other than the Investor, the consummation of which would result in a
Change of Control.

Notwithstanding anything to the contrary contained in this Agreement, (i) if at
any time (A) a Third Party enters into an agreement with the Company
contemplating a Change of Control, including a merger, consolidation or other
business combination transaction or tender offer related thereto, or the
purchase of all or substantially all of the assets of the Company and its
subsidiaries, or publicly announces its intention to do so, then the foregoing
restrictions set forth in this Section 10.5 shall be suspended and of no further
force or effect until the termination of such agreement or the public
announcement of a withdrawal or abandonment of such intention, at which time
such restrictions will be reinstated and apply in full force and effect or (B) a
Third Party commences, or publicly announces an intention to commence, a tender,
exchange, or offer that, if consummated, would result in a Change of Control,
then the foregoing restrictions set forth in this Section 10.5 shall be
suspended and of no force or effect until the expiration or termination of a
tender, exchange or offer that has been commenced or the public announcement of
a withdrawal or abandonment of an intention to commence a tender, exchange or
offer at which time such restrictions will be reinstated and apply in full force
and effect; (ii) the Investor shall not be precluded from making any
confidential offers or proposals to the Board in a manner reasonably believed
not to require the Company to make a public announcement of such offer or
proposal; provided that Investor shall not publicly disclose any such offers or
proposals; and (iii) Investor and its Affiliates shall not be precluded from
owning or acquiring interests in mutual funds or similar entities that own
capital stock of the Company, and nothing herein shall prohibit passive
investments by pension or employee benefit plans of Investor.

 

10.6 Legend Removal.

 

(a)

Certificates evidencing the Purchased Shares shall not contain the legend set
forth in 5.11(a) hereof: (i) following a sale of such Purchased Shares pursuant
to a registration statement covering the resale of such Purchased Shares, while
such registration statement is effective under the Securities Act, (ii)
following any sale of such Purchased Shares pursuant to Rule 144, (iii) if such
Purchased Shares are eligible for sale under Rule 144, without the requirement
for the Company to be in compliance with the current public information required
under Rule 144 as to such Purchased Shares and without volume or manner-of-sale
restrictions under Rule 144 or (iv) if such legend is not required under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the SEC).

 

(b)

The Company agrees that at such time as any legend set forth in Section 5.11
hereof is no longer required under this Section 10.6, the Company will, no later
than three (3) Business Days following the delivery by the Investor to the
Company or notice by the Investor to the Company of delivery by the Investor to
the Transfer Agent of a certificate representing Purchased Shares issued with
such legend (together with any legal opinion required by the Transfer Agent),
deliver or cause to be delivered to the Investor a certificate representing such
Purchased Shares that is free from such legend, or, in the event that such
shares are uncertificated, remove any such legend in the Company’s share
records.  The Company may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on transfer set
forth in Section 5.11 hereof.

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Article 11
Miscellaneous

11.1 Governing Law; Dispute Resolution.  This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York, without regard
to the conflict of laws principles thereof that would require the application of
the Law of any other jurisdiction.  Any disputes as to matters arising out of or
in connection with this Agreement will be subject to the procedures set forth in
Section 14.7 of the Collaboration Agreement.

11.2 Waiver.  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 of this Agreement
shall not constitute a waiver of that right or excuse a similar subsequent
failure to perform any such term or condition.  No waiver by either party of any
condition or term in any one or more instances shall be construed as a
continuing waiver of such condition or term or of another condition or term
except to the extent set forth in writing.

11.3 Notices.  All notices which are required or permitted hereunder shall be
provided in accordance with Section 14.5 of the Collaboration Agreement.

11.4 Entire Agreement.  This Agreement and the Collaboration Agreement, together
with the schedules and exhibits thereto, set forth all the covenants, promises,
agreements, warranties, representations, conditions and understandings between
the parties and supersede and terminate all prior agreements and understanding
between the parties.  There are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or written, between
the parties other than as set forth herein and therein.  No subsequent
alteration, amendment, change or addition to this Agreement shall be binding
upon the parties unless reduced to writing and signed by the respective
authorized officers of the parties.

11.5 Headings; Pronouns; Section References; English Language.  Headings and any
table of contents used in this Agreement are for convenience only and shall not
in any way affect the construction of or be taken into consideration in
interpreting this Agreement.  Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of names and pronouns shall include the plural and
vice-versa.  References in this Agreement to a section or subsection shall be
deemed to refer to a section or subsection of this Agreement unless otherwise
expressly stated.  This Agreement has been prepared in the English language, and
the English language shall control its interpretation.

11.6 Severability.  If, under applicable Laws, any provision hereof is invalid
or unenforceable, or otherwise directly or indirectly affects the validity of
any other material provision(s) of this Agreement in any jurisdiction (“Modified
Clause”), then, it is mutually agreed that this Agreement shall endure and that
the Modified Clause shall be enforced in such jurisdiction to the maximum extent
permitted under applicable Laws in such jurisdiction; provided that the parties
shall consult and use all reasonable efforts to agree upon, and hereby consent
to, any valid and enforceable modification of this Agreement as may be necessary
to avoid any unjust enrichment of either party and to match the intent of this
Agreement as closely as possible, including the economic benefits and rights
contemplated herein.

11.7 Assignment.  Except for an assignment of this Agreement or any rights
hereunder by the Investor to an Affiliate, neither this Agreement nor any of the
rights or obligations hereunder may be assigned by either the Investor or the
Company without (i) the prior written consent of Company in the case of any
assignment by the Investor or (ii) the prior written consent of the Investor in
the case of an assignment by the Company.

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11.8 Parties in Interest.  All of the terms and provisions of this Agreement
shall be binding upon, and shall inure to the benefit of and be enforceable by
the parties hereto and their respective successors, heirs, administrators and
permitted assigns.

11.9 Counterparts.  This Agreement may be signed in counterparts, each and every
one of which shall be deemed an original, notwithstanding variations in format
or file designation which may result from the electronic transmission, storage
and printing of copies from separate computers or printers.  Facsimile
signatures and signatures transmitted via PDF shall be treated as original
signatures.

11.10 Third Party Beneficiaries.  None of the provisions of this Agreement shall
be for the benefit of or enforceable by any Third Party, including any creditor
of any party hereto.  No Third Party shall obtain any right under any provision
of this Agreement or shall by reason of any such provision make any claim in
respect of any debt, liability or obligation (or otherwise) against any party
hereto.

11.11 No Strict Construction.  This Agreement has been prepared jointly and will
not be construed against either party.

11.12 Survival of Warranties.  The representations and warranties of the Company
and the Investor contained in this Agreement shall survive the Closing and the
delivery of the Purchased Shares.

11.13 Remedies.  The rights, powers and remedies of the parties under this
Agreement are cumulative and not exclusive of any other right, power or remedy
which such parties may have under any other agreement or Law.  No single or
partial assertion or exercise of any right, power or remedy of a party hereunder
shall preclude any other or further assertion or exercise thereof.

11.14 Expenses.  Each party shall pay its own fees and expenses in connection
with the preparation, negotiation, execution and delivery of this Agreement.

11.15 No Publicity.  The parties hereto agree that the provisions of
Section 12.5 of the Collaboration Agreement shall be applicable to the parties
to this Agreement with respect to any public disclosures regarding the proposed
transactions contemplated by this Agreement or regarding the parties hereto or
their Affiliates (it being understood that the provisions of Section 12.5 of the
Collaboration Agreement shall be read to apply to disclosures of information
relating to this Agreement and the transactions contemplated hereby).

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IN WITNESS WHEREOF, the parties intending to be bound have caused this Share
Purchase Agreement to be executed by their duly authorized representatives as of
the Signing Date.

 

 

Xenon Pharmaceuticals Inc.

 

By: /s/ Simon Pimstone

 

Name: Simon Pimstone

 

Title: Chief Executive Officer

 

 

 

Neurocrine Biosciences, Inc.

 

By: /s/ Kevin Gorman

 

Name: Kevin Gorman

 

Title: Chief Executive Officer