<PAGE>
FORM 1O-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from___________to__________
Commission file number 0-19732
CORVAS INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 33-0238812
(State or other jurisdiction (I .R.S. Employer
of incorporation or organization) Identification No.)
3030 SCIENCE PARK ROAD
SAN DIEGO, CALIFORNIA 92121
(Address of principal executive offices and zip code)
(619) 455-9800
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 par value
(Title of class)
Indicate by check mark whether the Registrant (l) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------- -------
At July 31, 1996, there were 13,703,563 shares of Common Stock, $0.001 par
value, of the Registrant issued and outstanding.
<PAGE>
CORVAS INTERNATIONAL, INC.
INDEX
PAGE
----
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
Condensed Balance Sheets as of June 30, 1996 and
December 31, 1995 1
Condensed Statements of Operations for the Three and Six
Months Ended June 30, 1996 and 1995 2
Condensed Statements of Cash Flows for the Three and Six
Months Ended June 30, 1996 and 1995 3
Notes to Condensed Financial Statements 4
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
PART II OTHER INFORMATION
Item 1 Legal Proceedings 9
Item 2 Changes in Securities 9
None
Item 3 Defaults Upon Senior Securities 9
None
Item 4 Submission of Matters to a Vote of Security Holders 9
Item 5 Other Information 10
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits 11
(b) Reports on Form 8-K 11
None
SIGNATURES 12
<PAGE>
PART I -- FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CORVAS INTERNATIONAL, INC.
CONDENSED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
--------------- -----------------
ASSETS (unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 792 $ 1,427
Short-term debt securities held to maturity
and time deposits, partially restricted 20,818 11,024
Receivables 457 338
Notes receivable from related parties 260 0
Other current assets 395 250
--------- ---------
Total current assets 22,722 13,039
Property and equipment, net 1,227 1,423
Note receivable from related party 180 0
--------- ---------
$ 24,129 $ 14,462
--------- ---------
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 201 $ 272
Accrued expenses 1,168 461
Accrued vacation 195 205
Accrued litigation settlement expenses 0 313
Current portion of capital lease obligation 66 77
Deferred rent 11 34
Deferred revenue 2,105 4,305
--------- ---------
Total current liabilities 3,746 5,667
--------- ---------
Long-term capital lease obligation 0 27
Stockholders' equity:
Preferred stock - Series A 1 1
Common stock 14 9
Additional paid-in capital 84,717 69,346
Accumulated deficit (64,349) (60,588)
--------- ---------
Total stockholders' equity 20,383 8,768
Commitments and contingencies
--------- ---------
$ 24,129 $ 14,462
--------- ---------
--------- ---------
</TABLE>
See accompanying notes to condensed financial statements.
1
<PAGE>
CORVAS INTERNATIONAL, INC.
CONDENSED STATEMENTS OF OPERATIONS
In thousands, except per share amounts (unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Net product sales $ 25 $ 168 $ 46 $ 214
Revenue from collaborative agreements 1,085 1,000 3,170 2,000
Royalties 0 40 81 74
------- ------- ------- -------
Total revenues 1,110 1,208 3,297 2,288
------- ------- ------- -------
COSTS AND EXPENSES:
Cost of products sold 30 105 54 110
Research and development 3,617 2,334 5,916 4,593
General and administrative 894 563 1,687 1,245
------- ------- ------- -------
Total costs and expenses 4,541 3,002 7,657 5,948
------- ------- ------- -------
Loss from operations (3,431) (1,794) (4,360) (3,660)
OTHER INCOME:
Interest income, net 301 234 569 482
Other income (expense) 0 16 30 (15)
------- ------- ------- -------
301 250 599 467
------- ------- ------- -------
Net loss $(3,130) $(1,544) $(3,761) $(3,193)
------- ------- ------- -------
------- ------- ------- -------
Net loss per share $ (0.25) $ (0.16) $ (0.30) $ (0.34)
------- ------- ------- -------
------- ------- ------- -------
Shares used in calculation
of net loss per share 12,609 9,365 12,350 9,362
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE>
CORVAS INTERNATIONAL, INC.
CONDENSED STATEMENTS OF CASH FLOWS
IN THOUSANDS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (3,761) $ (3,193)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 411 409
Amortization of premiums and discounts on investments (7) 55
Amortization of deferred compensation 0 43
Stock compensation expense 1 15
Change in assets and liabilities:
Increase in receivables (119) (70)
Increase in other current assets (145) (312)
Increase (decrease) in accounts payable, accrued
expenses, accrued benefits, accrued vacation
and accrued litigation settlement expenses 611 (1,492)
Decrease in deferred revenue (2,200) (2,000)
Decrease in deferred rent (23) (73)
---------- ----------
Net cash used in operating activities (5,232) (6,618)
---------- ----------
Cash flows from investing activities:
Purchases of investments held to maturity (15,887) (6,117)
Proceeds from maturity of investments held to maturity 6,100 10,400
Purchases of property and equipment (216) (425)
Proceeds from the sale of property and equipment 0 285
Loans to related parties (440) 0
---------- ----------
Net cash provided by (used in) investing activities (10,443) 4,143
---------- ----------
Cash flows from financing activities:
Principal payments under capital lease obligation (38) (35)
Net proceeds from issuance of common stock 15,078 7
---------- ----------
Net cash provided by (used in) financing activities 15,040 (28)
Effect of exchange rate changes on cash 0 (157)
---------- ----------
Decrease in cash and cash equivalents (635) (2,660)
Cash and cash equivalents at beginning of period 1,427 3,687
---------- ----------
Cash and cash equivalents at end of period $ 792 $ 1,027
---------- ----------
---------- ----------
Supplemental disclosures:
Interest paid $ 4 $ 6
---------- ----------
---------- ----------
Noncash financing activities --
Common stock issued in exchange for settlement of accrued litigation liability $ 298 $ 0
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE>
CORVAS INTERNATIONAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
(1) THE COMPANY
Corvas International, Inc. (the "Company") was incorporated on March 27,
1987 under the laws of the State of California. In July 1993, the Company
reincorporated in the State of Delaware. The Company is engaged in the design
and development of a new generation of therapeutic agents for the prevention and
treatment of major cardiovascular and inflammatory diseases.
Previous financial statements of the Company were consolidated to include
the accounts of Corvas International, Inc. in San Diego and its Belgian
subsidiary, Corvas International, N.V. Operating activities at the Belgian
subsidiary ceased in December 1994 and the subsidiary was liquidated in December
1995.
(2) BASIS OF PRESENTATION
The interim financial information contained herein is unaudited but, in
management's opinion, includes all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation. The financial
statements should be read in conjunction with the Company's audited financial
statements and notes thereto for the year ended December 31, 1995.
Results for the interim periods are not necessarily indicative of results
for other interim periods or for the full year.
(3) NOTES RECEIVABLE FROM RELATED PARTIES
Notes receivable from related parties as of June 30, 1996 consist of
three loans to officers of the Company, and are evidenced by three separate
promissory notes. The Company granted a $120,000 short-term loan to an
officer of the Company on February 23, 1996. Of such loan, $60,000 was
repaid in April 1996. The remaining balance of $60,000 is unsecured, bears
no interest, and is due and payable in full on February 23, 1997 but may be
forgiven under certain circumstances. The Company also granted a $200,000
short-term loan to a second officer of the Company on June 25, 1996 in
connection with his relocation to San Diego. This secured loan bears no
interest and is due and payable in full on the earlier of six months from the
loan date, the closing of the sale of the secured property or any transfer
thereof, or within 90 days of such officer's termination of employment with
the Company.
On February 23, 1996, the Company granted a $180,000 loan in conjunction
with the $120,000 loan discussed above. Such loan bears interest at 6% per
annum and is secured by the officer's primary residence. This loan is due
and payable in full on February 23, 2001.
(4) NET LOSS PER SHARE
Net loss per share for the three and six months ended June 30, 1996 and
1995 is computed using the weighted average number of common share
equivalents outstanding. Common equivalent shares are not included in the
per share calculation since the effect of their inclusion would be
anti-dilutive.
(5) STOCKHOLDERS' EQUITY
On July 3, 1996, the Company completed an offering of registered common
stock to an institutional investor, resulting in proceeds of $4,874,000, net of
estimated issuance costs.
4
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE FOLLOWING
DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES, INCLUDING STATEMENTS REGARDING THE PERIOD OF TIME DURING WHICH
THE COMPANY'S EXISTING CAPITAL RESOURCES AND INTEREST EARNED THEREON WILL BE
ADEQUATE TO SATISFY ITS CAPITAL REQUIREMENTS. THE COMPANY'S ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE DISCUSSED HEREIN. FACTORS THAT COULD CAUSE
OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE
DISCUSSED IN THIS SECTION AND THOSE DISCUSSED IN THE COMPANY'S ANNUAL REPORT ON
FORM 10-K/A.
OVERVIEW
Formed in 1987, Corvas International, Inc. (the "Company") is a
biopharmaceutical firm engaged in the design and development of a new generation
of therapeutic agents for the prevention and treatment of major cardiovascular
and inflammatory diseases. To date, the Company has not generated significant
revenues from product sales. The Company has not been profitable since
inception and expects to incur substantial additional operating losses on an
annual basis over the next several years as the Company attempts to sustain, and
possibly expand, its research and development and clinical trial efforts. No
assurance can be given that the Company will generate sufficient revenues to
become profitable on a sustained basis or at all. At June 30, 1996, the Company
had an accumulated deficit of $64,349,000.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
Operating revenues decreased from $1,208,000 in the quarter ended June 30,
1995 to $1,110,000 in the corresponding quarter of 1996. This $98,000 decrease
mainly resulted from delayed shipments under agreements with Ortho Diagnostic
Systems, Inc. ("Ortho"), a Johnson & Johnson company, which caused decreases in
product sales and royalty income. A portion of this decrease was offset by an
$85,000 increase in revenue recognized pursuant to the research and option
agreement initiated in October 1995 with Pfizer Inc. ("Pfizer") to collaborate
on the development of neutrophil inhibitory factor, an anti-inflammatory agent.
Total costs and expenses increased from $3,002,000 in the second quarter of
1995 to $4,541,000 in the same quarter of 1996. Research and development
expenditures increased by $1,283,000 comparing these same periods, primarily due
to scale-up and manufacturing of a development candidate for preclinical and
clinical trials. General and administrative expenses also increased, by
$331,000, comparing the second quarters of 1995 and 1996 principally due to
recruiting and relocation costs associated with the hiring of a new Chief
Executive Officer.
Comparing the quarter ended June 30, 1995 to the corresponding quarter of
1996, total other income increased from $250,000 to $301,000. This is due to an
increase in interest income earned as a result of the Company's private
placement in February 1996 which yielded proceeds of $14,835,000, net of
estimated issuance costs.
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
In the six month periods ended June 30, operating revenues increased from
$2,288,000 in 1995 to $3,297,000 in 1996. This increase is due in part to a
$1,000,000 option extension fee received from Schering Corporation ("Schering-
Plough") pursuant to a strategic alliance agreement for the prevention and
treatment of chronic cardiovascular disorders and to $170,000 attributable to
the Company's collaboration with Pfizer.
5
<PAGE>
The Company's total costs and expenses increased from $5,948,000 in the
first half of 1995 to $7,657,000 in the corresponding period one year later.
Research and development expenditures increased by $1,323,000 comparing these
same periods, mainly due to costs incurred in support of a product development
candidate. A $442,000 increase in general and administrative expenses in these
corresponding periods is primarily attributable to the placement of a new Chief
Executive Officer.
An increase from $467,000 in the first half of 1995 to $599,000 in the
first half of 1996 in total other income primarily resulted from increased
interest income attributable to the increased cash balances available for
investment.
Subject to the availability of additional capital, the Company expects that
expenses will increase over the next several years as the Company's research and
development programs progress. The Company also expects that losses will
fluctuate from quarter to quarter and that such fluctuations may, at times, be
substantial.
LIQUIDITY AND CAPITAL RESOURCES
Since inception, the Company's operations have been funded primarily
through public offerings and private placements of equity securities, interest
income earned on cash and investment balances, and revenues from collaborative
agreements, research grants and license agreements. On July 3, 1996, the
Company completed an offering of registered common stock to an institutional
investor which resulted in proceeds of $4,874,000, net of estimated issuance
costs. The Company's principal sources of liquidity are its cash and cash
equivalents, time deposits and debt securities which, net of a restricted time
deposit, totaled $21,550,000 as of June 30, 1996. Working capital at June 30,
1996 was $18,976,000. Available cash is invested in accordance with an
investment policy set by the Board of Directors, which has the objective to
maximize income with preservation of principal and maintenance of adequate
liquidity. The policy provides guidelines concerning the quality, term and
liquidity of investments. The Company presently invests its excess cash in U.S.
government securities.
Options held by collaborative partners which are scheduled to expire within
the next nine months may favorably impact the capital resources of the Company.
The research and option agreement initiated with Pfizer in October 1995 provides
for the option period to conclude in October 1996, although this may be extended
by Pfizer until April 1997. Schering-Plough also has an exclusive option,
expiring in December 1996, to expand the existing collaboration to include a
second blood clotting enzyme. Exercise of these options would result in license
payments, research funding and, in one instance, purchase of additional equity.
However, there can be no assurance that either of these options will be
exercised.
The Company expects to incur substantial additional costs in the
foreseeable future, including costs related to sustaining and possibly expanding
research and development activities and preclinical and clinical testing, and
that such costs will continue to increase. As a result, the Company expects it
will experience substantial additional operating losses over the next several
years. Including the two equity offerings completed by the Company in 1996, the
Company believes its existing capital resources and interest earned thereon will
be adequate to satisfy its capital requirements into mid-1998. In addition, the
Company may also receive milestone payments and royalties on sales of products
resulting from its alliances. However, there can be no assurance that products
will be successfully developed and commercialized or that the Company will
receive any such amounts under these alliances.
6
<PAGE>
The Company's future capital requirements will depend on many factors,
including, but not limited to, the following factors: continued scientific
progress in its drug discovery programs; the magnitude of these programs;
progress of preclinical testing and clinical trials; the time and costs involved
in obtaining regulatory approvals; the costs involved in filing, prosecuting,
maintaining and enforcing patent claims; competing technological and market
developments; changes in its existing research relationships; the ability of the
Company to establish and to maintain collaborative or licensing arrangements;
the cost of manufacturing scale-up; and effective commercialization activities
and arrangements. The Company leases its laboratory and office facilities and
certain equipment under operating and capital leases. The Company may need to
acquire additional property and equipment as research and development activities
progress. In addition, the Company may need to expand its laboratory and office
facilities over the next several years.
The Company's business is subject to significant risks, including but not
limited to the risks associated with its research and development efforts,
obtaining and enforcing patents, the lengthy and expensive regulatory approval
process, product reimbursement levels, competition from other products,
dependence on collaborative partners and other third parties, and the
availability of capital. Even if the Company's products appear promising at an
early stage of development, they may not reach the market for a number of
reasons. Such reasons include the possibilities that the potential products:
will be ineffective or found to be unsafe during clinical trials, will fail to
receive necessary regulatory approvals, will be difficult to manufacture on a
large scale, will be uneconomical to market or will be precluded from
commercialization by proprietary rights of third parties.
Uncertainties associated with the duration and expense of preclinical and
clinical testing of any of the Company's products make it difficult to predict
the Company's capital requirements, and unexpected developments and/or
regulatory requirements could greatly increase the cost of development of such
products and affect the timing of anticipated revenues from such products.
Failure by the Company to obtain regulatory approval for any product will
preclude the sale of such products. In addition, failure by the Company to
obtain patent protection may make certain of its products commercially
unattractive.
To continue its product development efforts, the Company will be required
to raise substantial additional funds through public or private sales of its
securities and through collaborative arrangements. The Company's ability to
raise additional funds through such sales of securities depends in part on
investors' perceptions of the biotechnology industry in general and of the
Company in particular. The market for biotechnology company stocks has
historically been highly volatile and, accordingly, there can be no assurance
that additional funding will be available, or, if available, that it will be
available on acceptable terms. The Company is seeking to enter into additional
collaborative relationships to support development and commercialization under
which rights to certain of its technologies or products will be granted. There
can be no assurance that the Company will be able to establish such
relationships on satisfactory terms, if at all, or that agreements with its
collaborators will successfully reduce its funding requirements. In addition,
the Company has no established bank financing arrangements, and there can be no
assurance that it will be able to establish such arrangements on satisfactory
terms, if at all. If adequate funds are not available, the Company may be
required to significantly delay, scale back or eliminate one or more of its drug
discovery programs or obtain funds through arrangements with collaborative
partners or others that may require the Company to relinquish rights to certain
of its technologies, product candidates or products that the Company would not
otherwise relinquish.
7
<PAGE>
The Company has distributed all amounts due under a settlement agreement in
connection with a legal proceeding filed in 1993 against several of the
Company's current and former directors and Centocor, Inc.
In 1993, the U.S. Patent and Trademark Office declared an interference and
is currently in the process of determining the priority of invention between a
patent for which some rights are licensed to the Company and a patent
application for which rights are licensed to another party. The subject matter
of these licenses is recombinant tissue factor which is used by Ortho to
determine the blood clotting abilities of patients. The Company believes that
its licensed patent should be upheld and is contesting the other party's claims
of prior invention. However, there can be no assurance that such patent will be
upheld.
8
<PAGE>
PART II -- OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company has distributed all amounts due under a settlement agreement in
connection with a legal proceeding filed in 1993 against several of the
Company's current and former directors and Centocor, Inc.
In 1993, the U.S. Patent and Trademark Office declared an interference and
is currently in the process of determining the priority of invention between a
patent for which some rights are licensed to the Company and a patent
application for which rights are licensed to another party. The subject matter
of these licenses is recombinant tissue factor which is used by Ortho to
determine the blood clotting abilities of patients. The Company believes that
its licensed patent should be upheld and is contesting the other party's claims
of prior invention. However, there can be no assurance that such patent will be
upheld.
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of stockholders of the Company was held on June 7, 1996.
The matters described below were submitted to a vote of stockholders. The
Company had 12,519,852 shares of common stock and 1,000,000 shares of Series A
preferred stock outstanding as of April 12, 1996, the record date for the annual
meeting. At the annual meeting, holders of a total of 11,408,521 shares of
common stock were present in person or represented by proxy.
9
<PAGE>
a. Election of Class I Directors for a three-year term expiring at the
1999 annual meeting:
NAME SHARES VOTING FOR SHARES WITHHELD
---- ----------------- ---------------
David S. Kabakoff, Ph.D. 11,213,725 339,531
Gerard Van Acker 11,213,725 339,531
W. Leigh Thompson, M.D., Ph.D. 11,212,717 340,539
Class II Directors continuing in office until the 1997 annual meeting:
John H. Fried, Ph.D.
Michael Sorell, M.D.
Nicole Vitullo
Class III Directors continuing in office until the 1998 annual meeting:
Thomas S. Edgington, M.D.
Theodor H. Heinrichs
M. Blake Ingle, Ph.D.
b. A proposal to approve an amendment to the Company's 1991 Incentive and
Compensation Plan.
For 8,833,259
Against 414,622
Abstain 19,574
c. A proposal to ratify the appointment of KPMG Peat Marwick LLP as
independent auditors for the Company for the fiscal year ending December
31, 1996.
For 11,525,794
Against 8,658
Abstain 18,804
Item 5. OTHER INFORMATION
Effective July 8, 1996, Donald H. Picker, Executive Vice President and
Chief Operating Officer of the Company, has resigned.
10
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
10.10 1991 Incentive and Compensation
Plan, as amended.
10.53 Deed of Trust related to Loan Agreement
between the Company and Donald H.
Picker, dated as of February 23, 1996.
Reference is made to Exhibit 10.47.
10.54 Promissory Note between the Company and
Randall E. Woods, dated as of June 25,
1996, and Deeds of Trust related
thereto.
10.55 Separation Agreement between the Company
and Donald H. Picker, dated as of July
18, 1996.
27.1 Financial Data Schedule.
b. Reports on Form 8-K
There were no reports on Form 8-K filed for the quarter ended June 30,
1996.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
CORVAS INTERNATIONAL, INC.
Date: August 12, 1996 By: /S/RANDALL E. WOODS
-------------------------
Randall E. Woods
President and Chief Executive Officer
Date: August 12, 1996 By: /S/JOHN E. CRAWFORD
-------------------------
John E. Crawford
Executive Vice President
and Chief Financial Officer
12
<PAGE>
AMENDMENT
1991 INCENTIVE AND COMPENSATION PLAN
Approved by Board January 10 and April 3, 1996
Ratified by Stockholders June 7, 1996
WHEREAS, Corvas International, Inc. previously adopted the 1991 Incentive
Compensation Plan (the "Plan) and
WHEREAS, Section 11.2 of the Plan provides that the Plan may be amended by the
Board contingent upon stockholder approval within twelve (12 months), such
approval having been received on the date noted above;
NOW, THEREFORE, the Plan is amended as follows:
1. Section 2.1(a) is deleted and replaced with the following:
"The shares of stock subject to Options, Stock Appreciation Rights,
Restricted Stock Awards, Performance Awards, Dividend Equivalents or Stock
Payments shall be Common Stock, initially shares of the Company's Common
Stock as presently constituted, and the aggregate number of such shares
which may be issued upon exercise of such options or rights or upon any
such awards shall by adjusted upon the last day of each fiscal quarter of
the Company following the date the amendment is adopted by the Board, shall
be increased, if necessary, to equal 18% of the number of shares of
Company's Common Stock issued and outstanding, less the number of shares
issued pursuant to the Plan or subject to outstanding options or other
awards under the Plan (other than under Section 3.3 of the Plan).
Notwithstanding the foregoing, the number of shares issuable upon exercise
of Incentive Stock Options shall not exceed 2,225,000 shares, nor shall any
employee be granted options and/or stock appreciation rights under the Plan
during a calendar year to purchase in excess of 750,000 shares of Common
Stock."
2. Section 10.1 is deleted and replaced with the following:
Subject to Section 10.2, the Committee shall consist of at least two
Directors, appointed by and holding office at the pleasure of the Board,
each one of whom is a "disinterested person" in accordance with Rule 16b-3
or its successors and who is in the discretion of the Board, an "outside
director" as defined in Section 162(m) of the Internal Revenue Code of
1986, as amended."
This amendment is effective as of January 10, 1996.
<PAGE>
EXHIBIT 10.53
WHEN RECORDED MAIL TO:
Cooley Godward Castro
Huddleson & Tatum
5 Palo Alto Square
4th Floor
Palo Alto, CA 94306-2155
ATTN: Michele Granaada
- --------------------------------------------------------------------------------
SPACE ABOVE THIS LINE FOR RECORDER'S USE
DEED OF TRUST WITH ASSIGNMENT OF RENTS
(This Deed of Trust contains an acceleration clause)
This DEED OF TRUST, made this 23RD day of February, 1996, between
------------
DONALD H. PICKER, A MARRIED MAN, AS HIS SOLE AND SEPARATE PROPERTY,
herein called TRUSTOR, whose address is 15828 HIGHLAND COURT
----------------------------------------
(Number and Street)
SOLANA BEACH , CALIFORNIA , 92075 ,
- --------------------------------------------------------------------------------
(City) (State) (Zip)
AMERICAN TITLE INSURANCE COMPANY, A CORPORATION,
herein called TRUSTEE,
AND CORVAS INTERNATIONAL, INC., A DELAWARE CORPORATION, herein called
BENEFICIARY,
WITNESSETH: That Trustor grants to Trustee in Trust, with Power of Sale, that
property in the City of Solana Beach, County of San Diego, State of California,
described as:
SEE EXHIBIT A ATTACHED HERETO AND MADE A PART HEREOF.
This is a Second Deed of Trust, subject and junior lien to a First Deed of Trust
in favor of ___________________________________________ in the amount of
$450,000.
If the trustor shall sell, convey or alienate said property, or any part
thereof, or any interest therein, or shall be divested of his title or any
interest therein in any manner of way, whether voluntarily or involuntarily,
without the written consent of the beneficiary being first had and obtained, or
Trustor shall be in default of its obligations under any mortgage, deed of trust
or lien encumbering the property which is the subject hereof, or any part
thereof, described in Exhibit A hereto, which is recorded prior to the
recordation of this instrument, whether now existing or hereafter created,
beneficiary shall have the right, at its option, to declare any indebtedness or
obligations secured hereby, irrespective of the maturity date specified in any
note evidencing the same, immediately due and payable, excluding however, any
transfer of any interest by Trustor to Donald H. Picker and Cheryl Picker, as
trustee under Declaration of Trust dated July 16, 1993, provided that Trustor is
not then in default under the Note or Loan Agreement and is employed by
beneficiary.
Together with the rents, issues and profits thereof, subject, however, to the
right, power and authority hereinafter given to and conferred upon Beneficiary
to collect and apply such rents, issues and profits.
For the Purpose of Securing (1) payment of the principal sum of $180,000.00 with
interest thereon according to the terms of a promissory note (the "Note") of
even date made by Trustor, payable to order of Beneficiary, and extensions or
renewals thereof, (2) the performance of each agreement of Trustor incorporated
by reference or contained herein, (3) payment of additional sums and interest
thereon which may hereafter be loaned to Trustor, or his successors or assigns,
when evidenced by a promissory note or notes reciting that they are secured by
this Deed of Trust, and (4) the performance of the terms and conditions of the
Note and that certain Loan Agreement (the "Loan Agreement") of even date between
Donald H. Picker and Beneficiary.
To protect the security of this Deed of Trust, and with respect to the property
above described, Trustor expressly makes each and all of the agreements, and
adopts and agrees to perform and be bound by each and all of the terms and
provisions set forth in subdivision A, and it is mutually agreed that each and
all of the terms and provisions set forth in subdivision B of the fictitious
deed of trust recorded in Orange County August 17, 1964, and in all other
counties August 18, 1964, in the book and at the page of Official Records in the
office of the county recorder of the county where said property is located,
noted below opposite the name of such county, namely:
<TABLE>
<CAPTION>
COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187
Alpine 3 130-31 Lake 437 110 Plumas 166 1307 Siskiyou 506 762
Amador 133 438 Lassen 192 367 Riverside 3788 347 Solano 1287 621
Butte 1330 513 Los Angeles T-3878 874 Sacramento 5039 124 Sonoma 2067 427
Calaveras 185 338 Madera 911 136 San Benito 300 405 Stanislaus 1970 56
Colusa 323 391 Marin 1849 122 San Bernardino 6213 768 Sutter 655 585
Contra Costa 4684 1 Mariposa 90 453 San Francisco A-804 596 Tehama 457 183
Del Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595
El Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 108
Fresno 5052 623 Modoc 191 93 San Mateo 4788 175 Tuolumne 177 160
Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Ventura 2607 237
Humboldt 801 83 Monterey 357 239 Santa Clara 6626 664 Yolo 769 16
Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693
Inyo 165 672 Nevada 363 94 Shasta 800 633
Kern 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964, Page 149774
</TABLE>
<PAGE>
shall inure to and bind the parties hereto, with respect to the property above
described. Said agreements, terms and provisions contained in said subdivision
A and B, (identical in all counties, and printed on the reverse side hereof) are
by the within reference thereto, incorporated herein and made a part of this
Deed of Trust for all purposes as fully as if set forth at length herein, and
Beneficiary may charge for a statement regarding the obligation secured hereby,
provided the charge therefor does not exceed the maximum allowed by law.
The undersigned Trustor, requests that a copy of any notice of default and any
notice of sale hereunder be mailed to him at this address hereinbefore set
forth.
STATE OF California ) Signature of Trustor
- ------------------------------ /s/DONALD H. PICKER,
)ss. -------------------------------
COUNTY OF San Diego ) Donald H. Picker
- ------------------------------
On 2/23 , 1996, before me,
------------------
Helen M. Henton ,
- ------------------------------
the undersigned Notary Public, personally appeared
DONALD H. PICKER ,
- ------------------------------
/x/ personally known to me
-OR-
/ / proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or the entity upon behalf of
which the person(s) acted, executed the instrument.
Witness my hand and official seal.
/S/ HELEN M. HENTON
-------------------
Notary's Signature
HELEN M. HENTON
-------------------
Name (Typed or Printed)
[NOTARY SEAL]
<PAGE>
D O N O T R E C O R D
The following is a copy of Subdivisions A and B of the fictitious Deed of Trust
recorded in each county in California as stated in the foregoing Deed of Trust
and incorporated by reference is said Deed of Trust as being a part thereof as
if set forth at length therein.
A. To protect the security of this Deed of Trust, Trustor agrees:
(1) To keep said property in good condition and repair; not to remove or
demolish any building thereon; to complete or restore promptly and in good and
workmanlike manner any building which may be constructed, damaged or destroyed
thereon and to pay when due all claims for labor performed and materials
furnished therefor; to comply with all laws affecting said property or requiring
any alterations or improvements to be made thereon; not to commit or permit
waste thereof; not to commit, suffer or permit any act upon said property in
violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all
other acts which from the character or use of said property may be reasonably
necessary, the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance
satisfactory to and with loss payable to Beneficiary. The amount collected
under any fire or other insurance policy may be applied by Beneficiary upon any
indebtedness secured hereby and in such order as Beneficiary may determine, or
at option of Beneficiary the entire amount so collected or any part thereof may
be released to Trustor. Such application or release shall not cure or waive any
default or notice of default hereunder or invalidate any act done pursuant to
such notice.
(3) To appear in and defend any action or proceeding purporting to affect
the security hereof or the rights or powers of Beneficiary or Trustee; and to
pay all costs and expenses, including cost of evidence of title and attorney's
fees in a reasonable sum, in any such action or proceeding in which Beneficiary
or Trustee may appear, and in any suit brought by Beneficiary to foreclose this
Deed.
(4) To pay: at least ten days before delinquency all taxes and
assessments affecting said property, including assessments on appurtenant water
stock; when due, all incumbrances, charges and liens, with interest, on said
property or any part thereof, which appear to be prior or superior hereto; all
costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein
provided, then Beneficiary or Trustee, but without obligation so to do and
without notice to or demand upon Trustor and without releasing Trustor from any
obligation hereof, may: make or do the same in such manner and to such extent as
either may deem necessary to protect the security hereof, Beneficiary or Trustee
being authorized to enter upon said property for such purposes; appear in an
defend any action or proceeding purporting to affect the security hereof or the
rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise
any incumbrance, charge or lien which in the judgment of either appears to be
prior or superior hereto; and, in exercising any such powers, pay necessary
expenses, employ counsel and pay his reasonable fees.
(5) To pay immediately and without demand all sums so expended by
Beneficiary or Trustee, with interest from date of expenditure at the amount
allowed by law in effect at the date hereof, and to pay for any statement
provided for by law in effect at the date hereof regarding the obligation
secured hereby any amount demanded by the Beneficiary not to exceed the maximum
allowed by law at the time when said statement is demanded.
B. It is mutually agreed:
(1) That any award of damages in connection with any condemnation for
public use of or injury to said property or any part thereof is hereby assigned
and shall be paid to Beneficiary who may apply or release such moneys received
by him in the same manner and with the same effect as above provided for
disposition of proceeds of fire or other insurance.
(2) That by accepting payment of any sum secured hereby after its due
date, Beneficiary does not waive his right either to require prompt payment when
due of all other sums so secured or to declare default for failure so to pay.
(3) That at any time or from time to time, without liability therefor and
without notice, upon written request of Beneficiary and presentation of this
Deed and said note for endorsement, and without affecting the personal liability
of any person for payment of the indebtedness secured hereby, Trustee may:
reconvey any part of said property; consent to the making of any map or plat
thereof; join in granting any easement thereon; or join in any extension
agreement or any agreement subordinating the lien or charge hereof.
(4) That upon written request of beneficiary stating that all sums secured
hereby have been paid, and upon surrender of this Deed and said note to Trustee
for cancellation and retention or other disposition as Trustee in its sole
discretion may choose and upon payment of its fees, Trustee shall reconvey,
without warranty, the property then held hereunder. The recitals in such
reconveyance of any matter or facts shall be conclusive proof of the
truthfulness thereof. The Grantee in such reconveyance may be described as "the
person or persons legally entitled thereto."
(5) That as additional security, Trustor hereby gives to and confers upon
Beneficiary the right, power and authority, during the continuances of these
Trusts, to collect the rents, issues and profits of said property, reserving
unto Trustor the right, prior to any default by Trustor in payment of any
indebtedness secured hereby or in performance of any agreement hereunder, to
collect and retain such rents, issues and profits as they become due and
payable. Upon any such default, Beneficiary may at any time without notice,
either in person, by agent, or by a receiver to be appointed by a court, and
without regard to the adequacy of any security for the indebtedness hereby
secured, enter upon and take possession of said property or any part thereof, in
his own name sue for or otherwise collect such rents, issues, and profits,
including those past due and unpaid, and apply the same, less costs and expenses
of operation and collection, including reasonable attorney's fees, upon any
indebtedness secured hereby, and in such order as Beneficiary may determine.
The entering upon and taking possession of said property, the collection of such
rents, issues and profits and the application thereof as aforesaid, shall not
cure or waive any default or notice of default hereunder or invalidate any act
done pursuant to such notice.
(6) That upon default by Trustor in payment of any indebtedness secured
hereby or in performance of any agreement hereunder, Beneficiary may declare all
sums secured hereby immediately due and payable by delivery to Trustee of
written declaration of default and demand for sale and of written notice of
default and of election to cause to be sold said property, which notice Trustee
shall cause to be filed for record, Beneficiary also shall deposit with Trustee
this Deed, said note and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the
recordation of said notice of default, and notice of sale having been given as
then required by law, Trustee, without demand on Trustor, shall sell said
property at the time and place fixed by it in said notice of sale, either as a
whole or in separate parcels, and in such order as it may determine, at public
auction to the highest bidder for cash in lawful money of the United States,
payable at time of sale. Trustee may postpone sale of all or any portion of
said property by public announcement at such time and place of sale, and from
time to time thereafter may postpone such sale by public announcement at the
time fixed by the preceding postponement. Trustee shall deliver to such
purchaser its deed conveying the property so sold, but without any covenant or
warranty, express or implied. The recitals in such deed of any matters or facts
shall be conclusive proof of the truthfulness thereof. Any person, including
Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such
sale.
After deducting all costs, fees and expenses of Trustee and of this Trust,
including cost of evidence of title in connection with sale, Trustee shall apply
the proceeds of sale to payment of: all sums expended under the terms hereof,
not then repaid, with accrued interest at the amount allowed by law in effect at
the date hereof; all other sums then secured hereby; and the remainder, if any,
to the person or persons legally entitled thereto.
(7) Beneficiary, or any successor in ownership of any indebtedness
secured hereby, may from time to time, by instrument in writing, substitute a
successor or successors to any Trustee named herein or acting hereunder, which
instrument, executed by the Beneficiary and duly acknowledged and recorded in
the office of the recorder of the county or counties where said property is
situated, shall be conclusive proof of proper substitution of such successor
Trustee or Trustees, who shall, without conveyance from the Trustee predecessor,
succeed to all its title, estate, rights, powers and duties. Said instrument
must contain the name of the original Trustor, Trustee and Beneficiary
hereunder, the book and page where this Deed is recorded and the name and
address of the new Trustee.
(8) That this Deed applies to, inures to the benefit of, and binds all
parties hereto, their heirs, legatees, devisees, administrators, executors,
successors and assigns. The term Beneficiary shall mean the owner and holder,
including pledgees, of the note secured hereby, whether or not named as
Beneficiary herein. In this Deed, whenever the context so requires, the
masculine gender includes the feminine and/or neuter, and the singular number
includes the plural.
<PAGE>
(9) That Trustee accepts this Trust when this Deed, duly executed and
acknowledged, is made a public record as provided by law. Trustee is not
obligated to notify any party hereto of pending sale under any other Deed of
Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee
shall be a party unless brought by Trustee.
DO NOT RECORD REQUEST FOR FULL RECONVEYANCE
TO TRUSTEE:
The undersigned is the legal owner and holder of the note or notes, and of
all other indebtedness secured by the foregoing Deed of Trust. Said note or
notes, together with all other indebtedness secured by said Deed of Trust, have
been fully paid and satisfied; and you are hereby requested and directed, on
payment to you of any sums owing to you under the terms of said Deed of Trust,
to cancel said note or notes above mentioned, and all other evidences of
indebtedness secured by said Deed of Trust delivered to you herewith, together
with the said Deed of Trust, and to reconvey, without warranty, to the parties
designated by the terms of said Deed of Trust, all the estate now held by you
under the same.
Dated ______________________
___________________________________________
___________________________________________
Please mail Deed of Trust,
Note and Reconveyance to
________________________________________________________
DO NOT LOSE OR DESTROY THIS DEED OF TRUST OR THE NOTE WHICH IT SECURES. BOTH
MUST BE DELIVERED TO THE TRUSTEE FOR CANCELLATION BEFORE RECONVEYANCE WILL BE
MADE.
DEED OF TRUST
WITH POWER OF SALE
<PAGE>
EXHIBIT 10.54
DO NOT DESTROY THIS NOTE: WHEN PAID, THIS NOTE AND DEED OF
TRUST SECURING IT MUST BE SURRENDERED TO TRUSTEE FOR
CANCELLATION BEFORE RECONVEYANCE WILL BE MADE
PROMISSORY NOTE
$200,000 June 25, 1996
San Diego, California
FOR VALUE RECEIVED, Randall E. Woods, an individual residing in the State
of California ("Borrower"), hereby unconditionally promises to pay to the order
of Corvas International, Inc., a California corporation ("Lender"), in lawful
money of the United States of America and in immediately available funds, the
principal sum of Two Hundred Thousand Dollars ($200,000.00) (the "Loan"), and
any amounts due thereon, payable on the date and in the manner set forth below.
This Loan is made in connection with the relocation of Borrower to San Diego,
California.
This Promissory Note is the note referred to in and is executed and
delivered in connection with that certain Deed of Trust of even date herewith,
by and between Borrower and Lender encumbering that certain real property in
Potomac, Maryland (the "Property") (as the same may from time to time be
amended, modified or supplemented, the "Deed of Trust"). All terms defined in
the Deed of Trust shall have the same definitions when used herein, unless
otherwise defined herein.
1. REPAYMENT. The outstanding principal amount of the Loan shall be due
and payable on the earlier of (i) the six-month anniversary of the date of this
note or (ii) the closing of the sale of the Property or any transfer by Borrower
of the interest therein; provided that, in the event of the termination of
employment of Borrower with Lender for any reason or no reason (with or without
cause), the outstanding principal amount of the Loan, shall be due and payable
within ninety (90) days of such termination, if earlier than the dates set forth
in (i) and (ii). The Loan may be prepaid at any time without penalty.
2. APPLICATION OF PAYMENTS/PLACE OF PAYMENT. All payments received by
Lender shall be applied first to any charges due with respect to this Note or
any other document executed by Maker in connection herewith, and then to the
unpaid principal balance. All amounts payable hereunder shall be payable at the
office of Lender, 3030 Science Park Road, San Diego, CA 92121, unless another
place of payment shall be specified in writing by Lender. Any amounts payable
hereunder will be due and payable without set-off, deduction, or counter-claim,
except as otherwise provided herein.
3. SECURED NOTE. This Note is secured by the Deed of Trust on the
Property. Borrower shall not, directly or indirectly, suffer or permit to be
created or to remain, and shall promptly discharge, any lien on the Property, or
in any portion thereof, except as permitted pursuant to the Deed of Trust. In
addition, Borrower shall not suffer any other matter whereby
1.
<PAGE>
an interest of Lender under the Deed of Trust or in any lien pursuant to the
Deed of Trust or any part of the foregoing might be impaired, except as
permitted pursuant to such Deed of Trust.
4. DEFAULT/REMEDIES. Borrower wil be in default under this Note upon the
occurrence of any one or more of the following events: (1) Borrower's failure to
pay timely any of the principal amount due under this Note on the date the same
becomes due and payable or other amounts due under this Note on the date the
same becomes due and payable or within five (5) calendar days thereafter shall
constitute a default under this Note, or (2) the death (in the case of
individuals) or dissolution or termination (in the case of business entities) of
any maker, endorser, guarantor, or of a general partner of any of the foregoing.
Upon the occurrence of a default hereunder, all unpaid principal and any other
amounts owing hereunder shall, at the option of Lender, be immediately
collectible by Lender pursuant to applicable law, and Lender may exercise any
and all remedies provided under Deed of Trust.
5. WAIVERS. Maker, and any endorsers or guarantors hereof, severally
waive diligence, presentment, protest and demand and also notice of protest,
demand, dishonor, acceleration, intent to accelerate, and nonpayment of this
Note, and expressly agree that this Note, or any payment hereunder, may be
extended from time to time without notice, and consent to the acceptance of
further security or the release of any security for this Note, all without in
any way affecting the liability of Maker or any endorsers or guarantors hereof.
No extension of time for the payment of this Note, or any installment hereof,
agreed to by Holder with any person now or hereafter liable for the payment of
this Note, shall affect the original liability of Maker under this Note, even if
Maker is not a party to such agreement. Borrower waives presentment and demand
for payment, notice of dishonor, protest and notice of protest of this Note, and
shall pay all costs of collection when incurred, including, without limitation,
reasonable attorneys' fees, costs and other expenses.
The right to plead any and all statutes of limitations as a defense to any
demands hereunder is hereby waived to the full extent permitted by law.
6. GOVERNING LAW. This Note shall be governed by, and construed and
enforced in accordance with, the laws of the State of California, excluding
conflict of laws principles that would cause the application of laws of any
other jurisdiction.
7. SUCCESSORS AND ASSIGNS. The provisions of this Note shall inure to
the benefit of and be binding on any successor to Borrower and shall extend to
any holder hereof.
8. MISCELLANEOUS.
a. Maker shall pay all costs, including, without limitation,
reasonable attorneys' fees incurred by Holder in collecting the sums due
hereunder or in connection with the release of any security for this Note.
b. This Note may be modified only by a written agreement executed by
Maker and Holder.
2.
<PAGE>
c. Time is of the essence with respect to all matters set forth in
this Note.
d. If this Note is destroyed, lost or stolen, Maker will deliver a
new note to Holder on the same terms and conditions s this Note with a notation
of the unpaid principal in substitution of the prior Note. Holder shall furnish
to Maker reasonable evidence that the Note was destroyed, lost or stolen and any
security or indemnity that may be reasonably required by Maker in connection
with the replacement of this Note.
e. If any provision of this Note shall be held to be invalid or
unenforceable, such determination shall not affect the remaining provisions of
this Note.
f. In the event an action is commenced to interpret or enforce this
Note or to collect any sums due hereunder, the prevailing party shall be
entitled to receive from the other party, attorneys' fees and costs as
determined by the court in which such action is pending.
/S/ RANDALL E. WOODS
--------------------
Randall E. Woods
3.
<PAGE>
DEED OF TRUST
THIS DEED OF TRUST ("Security Instrument") is dated as of June 25, 1996.
The grantors, jointly as husband and wife, are Randall E. Woods and Nancy
Saint-Woods ("Borrowers"). The trustee is Stewart Title ("Trustee"). The
beneficiary is Corvas International, Inc., which is organized and existing under
the laws of California and whose address is 3030 Science Park Road, San Diego,
California 92121 ("Lender"). Borrowers owe Lender the principal sum of Two
Hundred Thousand Dollars (U.S. $200,000.00). This debt is evidenced by
Borrowers' note dated the same date as this Security Instrument ("Note"), which
provides that the full debt, if not paid earlier, shall be due and payable no
later than six (6) months after the date of execution.
This Security Instrument secures to Lender: (a) the repayment of the debt
evidenced by the Note, and all renewals, extensions and modifications of the
Note; (b) the payment of all other sums, advanced under paragraph 6 to protect
the security of this Security Instrument; and (c) the performance of Borrowers'
covenants and agreements. For this purpose, Borrowers irrevocably grant and
convey to Trustee, in trust, with power of sale, the following described
property located in Montgomery County, Maryland:
SEE EXHIBIT A ATTACHED HERETO AND INCORPORATED HEREIN BY REFERENCE,
which has the address of 10314 Cutters Lane, Potomac, Maryland 20854;
TOGETHER WITH all the improvements now or hereafter erected on the
property, and all easements, appurtenances, and fixtures now or hereafter a part
of the property. All replacements and additions shall also be covered by this
Security Instrument. All of the foregoing is referred to in this Security
Instrument as the "Property."
BORROWERS COVENANT that Borrowers are lawfully seised of the estate hereby
conveyed and has the right to grant and convey the Property and that the
Property is unencumbered, except for encumbrances of record. Borrowers warrant
and will defend generally the title to the Property against all claims and
demands, subject to any encumbrances of record.
THIS SECURITY INSTRUMENT combines uniform covenants for national use and
non-uniform covenants with limited variations by jurisdiction to constitute a
uniform security instrument covering real property.
1.
<PAGE>
UNIFORM COVENANTS. Borrow and Lender covenant and agree as follows:
1. PAYMENT OF PRINCIPAL AND INTEREST; PREPAYMENT AND LATE CHARGES.
Borrowers shall promptly pay when due the principal of the debt evidenced by the
Note and any prepayment and late charges due under the Note.
2. APPLICATION OF PAYMENTS. Unless applicable law provides otherwise,
all payments received by Lender under paragraph 1 shall be applied; first, to
any prepayment charges due under the Note; second, to interest due, if any; to
principal due; and last, to any late charges due under the Note.
3. CHARGES; LIENS. Borrowers shall pay all taxes, assessments, charges,
fines and impositions attributable to the Property which may attain priority
over this Security Instrument, and leasehold payments, senior mortgages and
encumbrances, or ground rents, if any. Borrowers shall pay them on time
directly to the person owed payments. Upon request, Borrowers shall promptly
furnish to Lender all notices of amounts to be paid under this paragraph. If
Borrowers make these payments directly, Borrowers shall promptly furnish to
Lender receipts evidencing the payments.
Borrowers shall promptly discharge any lien which has priority over this
Security Instrument unless Borrowers: (a) agree in writing to the payment of
the obligation secured by the lien in a manner acceptable to Lender; (b) contest
in good faith the lien by, or defends against enforcement of the lien in, legal
proceedings which in the Lender's opinion operate to prevent the enforcement of
the lien; or (c) secure from the holder of the lien an agreement satisfactory to
Lender subordinating the lien to this Security Instrument. If Lender determines
that any part of the Property is subject to a lien which may attain priority
over this Security Instrument, Lender may give Borrowers a notice identifying
the lien. Borrowers shall satisfy the lien or take one or more of the actions
set forth above within 10 days of the giving of notice.
4. HAZARD OR PROPERTY INSURANCE. Borrowers shall keep the improvements
now existing or hereafter erected on the Property insured against loss by fire,
hazards included within the term "extended coverage" and any other hazards,
including floods or flooding, for which Lender requires insurance. This
insurance shall be maintained in the amounts and for the periods that Lender
requires. The insurance carrier providing the insurance shall be chosen by
Borrowers subject to Lender's approval which shall not be unreasonably withheld.
If Borrowers fail to maintain coverage described above, Lender may, at Lender's
option, obtain coverage to protect Lender's rights in the Property in accordance
with paragraph 6.
All insurance policies and renewals shall be acceptable to Lender and shall
include a standard mortgage clause. Lender shall have the right to hold the
policies and renewals. If Lender requires, Borrowers shall promptly give to
Lender all receipts of paid premiums and renewal notices. In the event of loss,
Borrowers shall give prompt notice to the insurance carrier and Lender. Lender
may make proof of loss if not made promptly by Borrowers.
2.
<PAGE>
Unless Lender and Borrowers otherwise agree in writing, insurance proceeds
shall be applied to restoration or repair of the Property damaged. If the
restoration or repair is not economically feasible or Lender's security would be
lessened, the insurance proceeds shall be applied to the sums secured by this
Security Instrument, whether or not then due, with any excess paid to Borrowers.
If Borrowers abandon the Property, or does not answer within 30 days a notice
from Lender that the insurance carrier has offered to settle a claim, then
Lender may collect the insurance proceeds. Lender may use the proceeds to
repair or restore the Property or to pay sums secured by this Security
Instrument, whether or not then due. The 30-day period will begin when the
notice is given.
If under paragraph 19 the Property is acquired by Lender, Borrowers' right
to any insurance policies and proceeds resulting from damage to the Property
prior to the acquisition shall pass to Lender to the extent of the sums secured
by this Security Instrument immediately prior to the acquisition.
5. OCCUPANCY, PRESERVATION, MAINTENANCE AND PROTECTION OF THE PROPERTY;
BORROWERS' LOAN APPLICATION; LEASEHOLDS. Borrowers shall not destroy, damage or
impair the Property, allow the Property to deteriorate, or commit waste on the
Property. Borrowers shall be in default if any forfeiture action or proceeding,
whether civil or criminal, is begun that in Lender's good faith judgment could
result in forfeiture of the Property or otherwise materially impair the lien
created by this Security Instrument or Lender's security interest. Borrowers
may cure such a default and reinstate, as provided in paragraph 16, by causing
the action or proceeding to be dismissed with a ruling that, in Lender's good
faith determination, precludes forfeiture of the Borrowers' interest in the
Property or other material impairment of the lien created by this Security
Instrument or Lender's security interest. Borrowers shall also be in default if
Borrowers, during the loan application process, gave materially false or
inaccurate information or statements to Lender (or failed to provide Lender with
any material information) in connection with the loan evidenced by the Note,
including, but not limited to, representations concerning Borrowers' occupancy
of the Property as a principal residence.
6. PROTECTION OF LENDER'S RIGHTS IN THE PROPERTY. If Borrowers fail to
perform the covenants and agreements contained in this Security Instrument, or
there is a legal proceeding that may significantly affect Lender's rights in the
Property (such as a proceeding in bankruptcy, probate, for condemnation or
forfeiture or to enforce laws or regulations), then Lender may do and pay for
whatever is necessary to protect the value of the Property and Lender's rights
in the Property. Lender's actions may include paying any sums secured by a lien
which has priority over this Security Instrument, appearing in court, paying
reasonable attorneys' fees and entering on the Property to make repairs.
Although Lender may take action under this paragraph 6, Lender does not have to
do so.
Any amounts disbursed by Lender under this paragraph 6 shall become
additional debt of Borrowers secured by this Security Instrument. Unless
borrower and Lender agree to other terms of payment, these amounts shall bear
interest from the date if disbursement at the Note rate and shall be payable,
with interest, upon notice from Lender to Borrowers requesting payment.
3.
<PAGE>
7. INSPECTION. Lender or its agent may make reasonable entries upon and
inspections of the Property. Lender shall give Borrowers notice at the time of
or prior to an inspection specifying reasonable cause for the inspection.
8. CONDEMNATION. The proceeds of any award or claim for damages, direct
or consequential, in connection with any condemnation or other taking of any
part of the Property, or for conveyance in lieu of condemnation, are hereby
assigned and shall be paid to Lender.
In the event of a total taking of the Property, the proceeds shall be
applied to the sums secured by this Security Instrument, whether or not then
due, with any excess paid to Borrowers. In the event of a partial taking of the
Property in which the fair market value of the Property immediately before the
taking is equal to or greater than the amount of the sums secured by this
Security Instrument shall be reduced by the amount of the proceeds multiplied by
the following fraction: (a) the total amount of the sums secured immediately
before the taking, divided by (b) the fair market value of the Property
immediately before the taking. Any balance shall be paid to Borrowers. In the
event of a partial taking of the Property in which the fair market value of the
Property immediately before the taking is less than the amount of the sums
secured immediately before the taking, unless Borrowers and Lender otherwise
agree in writing or unless applicable law otherwise provides, the proceeds shall
be applied to the sums secured by this Security Instrument whether or not the
sums are then due.
If the Property is abandoned by Borrowers, of if, after notice by Lender to
Borrowers that the condemnor offers to make an award or settle a claim for
damages, Borrowers fail to respond to Lender within 30 days after the date the
notice is given, Lender is authorized to collect and apply the proceeds, at its
option, either to restoration or repair of the Property or to the sums secured
by this Security Instrument, whether or not then due.
9. BORROWERS NOT LEASED; FORBEARANCE BY LENDER NOT A WAIVER. Extension
of the time for payment or modification of amortization of the sums secured by
this Security Instrument granted by Lender to any successor in interest of
Borrowers shall not operate to release the liability of the original Borrowers
or Borrowers' successors to interest. Lender shall be not required to commence
proceedings against any successor in interest or refuse to extend time for
payment or otherwise modify amortization of the sums secured by this Security
Instrument by reason of any demand made by the original Borrowers or Borrowers'
successors in interest. Any forbearance by Lender in exercising any right or
remedy shall not be a waiver of or preclude the exercise of any right or remedy.
10. SUCCESSORS AND ASSIGNS BOUND; JOINT AND SEVERAL LIABILITY; CO-SIGNERS.
The covenants and agreements of this Security Instrument shall bind and benefit
the successors and assigns of Lender and Borrowers, subject to the provisions of
paragraph 15. Borrowers' covenants and agreements shall be joint and several.
Any Borrowers who co-sign this Security Instrument but does not execute the
Note: (a) is co-signing this Security Instrument only to mortgage, grant and
convey that Borrowers' interest in the Property under the terms of this Security
Instrument; (b) is not personally obligated to pay the sums secured by this
Security
4.
<PAGE>
Instrument; and (c) agrees that Lender and any other Borrowers may agree to
extend, modify, forbear or make any accommodations with regard to the terms
of this Security Instrument or the Note without that Borrowers' consent.
11. LOAN CHARGES. If the loan secured by this Security Instrument is
subject to a law which sets maximum loan charges, and that law is finally
interpreted so that the interest or other loan charges collected or to be
collected in connection with the loan exceed the permitted limits, then: (a)
any such loan charge shall be reduced by the amount necessary to reduce the
charge to the permitted limit; and (b) any sums already collected from Borrowers
which exceeded permitted limits will be refunded to Borrowers. Lender may
choose to make this refund by reducing the principal owed under the Note or by
making a direct payment to Borrowers. If a refund reduces principal, the
reduction will be treated as a partial prepayment without any prepayment charge
under the Note.
12. NOTICES. Any notice to Borrowers provided for in this Security
Instrument shall be given by delivering it or by mailing it by first class mail
unless applicable law requires use of another method. The notice shall be
directed to 6694 Calle Pequena, Rancho Sante Fe, California 92067, or any other
address Borrowers designated by notice to Lender. Any notice to Lender shall be
given by first class mail to Lender's address stated herein or any other address
Lender designates by notice to Borrowers. Any notice provided for in this
Security Instrument shall be deemed to have been given to Borrowers or Lender
when given as provided in this paragraph.
13. GOVERNING LAW; SEVERABILITY. This Security Instrument shall be
governed by federal law and the law of the jurisdiction in which the Property is
located. In the event that any provision or clause of this Security Instrument
or the Note conflicts with applicable law, such conflict shall not affect other
provisions of this Security Instrument or the Note which can be given effect
without the conflicting provision. To this end, the provisions of this Security
Instrument and the Note are declared to be severable.
14. BORROWERS'S COPY. Borrowers shall be given one conformed copy of the
Note and of this Security Instrument.
15. TRANSFER OF THE PROPERTY OR A BENEFICIAL INTEREST IN BORROWERS. If
all or any part of the Property or any interest in it is sold or transferred (or
if a beneficial interest in Borrowers is sold or transferred and Borrowers are
not natural persons) without Lender's prior written consent, Lender may, at its
option, require immediate payment in full of all sums secured by this Security
Instrument. However, this option shall not be exercised by Lender if exercise
is prohibited by federal law as of the date of this Security Instrument.
If Lender exercises this option, Lender shall give Borrowers notice of
acceleration. The notice shall provide a period of not less than 30 days from
the date the notice is delivered or mailed within which Borrowers must pay all
sums secured by this Security Instrument. If Borrowers fail to pay these sums
prior to the expiration of this period, Lender may invoke any remedies permitted
by this Security Instrument without further notice or demand on Borrowers.
5.
<PAGE>
16. BORROWERS' RIGHT TO REINSTATE. If Borrowers meet certain conditions,
Borrowers shall have the right to have enforcement of this Security Instrument
discontinued at any time prior to the earlier of: (a) 5 days (or such other
period as applicable may specify for reinstatement) before sale of the Property
pursuant to any power of sale contained in this Security Instrument; or (b)
entry of a judgment enforcing this Security Instrument. Those conditions are
that Borrowers: (a) pays Lender all sums which then would be due under this
Security Instrument and the Note as if no acceleration had occurred; (b) cures
any default of any other covenants or agreements; (c) pays all expenses incurred
in enforcing this Security Instrument, including, but not limited to, reasonable
attorneys' fees; and (d) takes no action as Lender may reasonably require to
assure that the lien of this Security Instrument, Lender's rights in the
Property and Borrowers' obligation to pay the sums secured by this Security
Instrument shall continue unchanged. Upon reinstatement by Borrowers, this
Security Instrument and the obligations secured hereby shall remain fully
effective as if no acceleration had occurred. However, this right to reinstate
shall not apply in the case of acceleration under paragraph 19.
17. SALE OF NOTE; CHANGE OF LOAN SERVICER. The note or a partial interest
in the Note (together with this Security Instrument) may be sold one or more
times without prior notice to Borrowers. A sale may result in a change in the
entity (known as the "Loan Servicer") that collects monthly payments due under
the Note and this Security Instrument. There also may be one or more changes of
the Loan Servicer unrelated to a sale of the Note. If there is a change of the
Loan Servicer, Borrowers will be given written notice of the change in
accordance with paragraph 12 above and applicable law. The notice will state
the name and address of the new Loan Servicer and the address to which payments
should be made. The notice will also contain any other information required by
applicable law.
18. HAZARDOUS SUBSTANCES. Borrowers shall not cause or permit the
presence, use, disposal, storage, or release of any Hazardous Substances on or
in the Property. Borrowers shall not do, nor allow anyone else to do, anything
affecting the Property that is in violation of any Environmental Law. The
preceding two sentences shall not apply to the presence, use, or storage on the
property of small quantities of Hazardous Substances that are generally
recognized to be appropriate to normal residential uses and to maintenance of
the Property.
Borrowers shall promptly give Lender written notice of any investigation,
claim, demand, lawsuit or other action by any governmental or regulatory agency
or private party involving the Property and any Hazardous Substance or
Environmental Law of which Borrowers have actual knowledge. If Borrowers learn,
or is notified by any governmental or regulatory authority, that any removal or
other remediation of any Hazardous Substance affecting the Property is
necessary, Borrowers shall promptly take all necessary remedial actions in
accordance with Environmental Law.
As used in this paragraph 18, "Hazardous Substances" are those substances
defined as toxic or hazardous substances by Environmental Law and the following
substances: gasoline, kerosene, other flammable or toxic petroleum products,
toxic pesticides and herbicides, volatile solvents, materials containing
asbestos or formaldehyde, and radioactive materials. As used in
6.
<PAGE>
this paragraph 18, "Environmental Law" means federal laws and laws of the
jurisdiction where the Property is located that relate to health, safety or
environmental protection.
NON-UNIFORM COVENANTS. Borrowers and Lender further covenant and agree as
follows:
19. ACCELERATION; REMEDIES. Lender shall give notice to Borrowers prior
to acceleration following Borrowers' breach of any covenant or agreement in this
Security Instrument (but not prior to acceleration under paragraph 15 unless
applicable law provides otherwise). The notice shall specify: (a) the default;
(b) the action required to cure the default; (c) a date, not less than 30 days
from the date the notice is given to Borrowers, by which the default must be
cured; and (d) that failure to cure the default on or before the date specified
in the notice may result in acceleration of the sums secured by this Security
Instrument and sale of the Property. The notice shall further inform Borrowers
of the right to reinstate after acceleration and the right to assert in the
foreclosure proceeding the non-existence of a default or any other defense of
Borrowers to acceleration and sale. If the default is not cured on or before
the date specified in the notice, Lender, at its option, may require immediate
payment in full of all sums secured by this Security Instrument without further
demand and may invoke the power of sale and any other remedies permitted by
applicable law. Lender shall be entitled to collect all expenses incurred in
pursuing the remedies permitted by applicable law. Lender shall be entitled to
collect all expenses incurred in pursuing the remedies provided in this
paragraph 19, including, but not limited to, reasonable attorneys' fees and
costs of title evidence.
If Lender invokes the power of sale, Lender shall mail or cause Trustee to
mail a notice of sale to Borrowers in the manner prescribed by applicable law.
Trustee shall give notice of sale by public advertisement for the time and in
the manner prescribed by applicable law. Trustee, without demand on Borrowers,
shall sell the Property at public auction to the highest bidder at the time and
place and under the terms designated in the notice of sale in one or more
parcels and in any order Trustee determines. Trustee may postpone sale of all
or any parcel of the Property by public announcement at the time and place of
any previously scheduled sale. Lender or its designee may purchase the Property
at any sale.
Trustee shall deliver to the purchaser Trustee's deed conveying the
Property without any covenant or warranty, expressed or implied. The recitals
in the Trustee's deed shall be prima facie evidence of the truth of the
statements made therein. Trustee shall apply the proceeds of the sale in the
following order: (a) to all expenses of the sale, including, but not limited
to, reasonable Trustee's fees and reasonable attorneys' fees; (b) first mortgage
or deed of trust in favor of Crestar Bank, Potomac, MD., (c) to all sums secured
by this Security Instrument; and (d) any excess to the person or persons legally
entitled to it.
Borrowers, in accordance with Subtitle W of the Maryland Rules of
Procedure, does hereby declare and assent to the passage of a decree to sell the
Property in one or more parcels by the equity court having jurisdiction for the
sale of the Property, and consents to the granting to any trustee appointed by
the assent to decree of all rights, powers and remedies granted to the Trustee
in this Security Instrument together with any and all rights, powers and
remedies
7.
<PAGE>
granted by the decree. Neither the assent to decree nor the power of sale
granted in this paragraph 19 shall be exhausted in the event the proceeding is
dismissed before the payment in full of all sums secured by this Security
Instrument.
20. RELEASE. Upon payment of all sums secured by this Security
Instrument, Lender or Trustee, shall release this Security Instrument without
charge to Borrowers and mark the Note "paid" and return the Note to Borrowers.
Borrowers shall pay any recordation costs.
21. SUBSTITUTE TRUSTEE. Lender, at its option, may from time to time
remove Trustee and appoint a successor trustee to any Trustee appointed
hereunder by an instrument recorded in the city or county in which this Security
Instrument is recorded. Without conveyance of the Property, the successor
trustee shall succeed to all the title, power and duties conferred upon Trustee
herein and by applicable law.
22. POSSESSION OF THE PROPERTY. Borrowers shall have possession of the
Property until Lender has given Borrowers notice of default pursuant to
paragraph 19 of this Security Instrument.
23. RIDERS TO THIS SECURITY INSTRUMENT. If one or more riders are
executed by Borrowers and recorded together with this Security Instrument, the
covenants and agreements of each such rider shall be incorporated into and shall
amend and supplement the covenants and agreements of this Security Instrument as
if the rider(s) were a part of this Security Instrument.
[Check applicable box(es)]
/ / Adjustable Rate Rider / / Condominium Rider
/ / 1-4 Family Rider / / Graduated Payment Rider
/ / Planned Unit Development Rider / / Biweekly Payment Rider
/ / Balloon Rider / / Rate Improvement Rider
/ / Second Home Rider / / V.A. Rider
/ / Other(s) (specify)
8.
<PAGE>
BY SIGNING BELOW, Borrowers accept and agree to the terms and covenants
contained in this Security Instrument and in any rider(s) executed by Borrowers
and recorded with it.
WITNESSES:
/S/ RANDALL E. WOODS
--------------------
/S/ ANGELA L. HARTLEY Borrower
- ---------------------
/S/ NANCY SAINT WOODS
---------------------
/S/ DEBRA BAUM Borrower
- --------------
STATE OF CALIFORNIA )
) SS.
COUNTY OF SAN DIEGO )
On JUNE 27, 1996 before me, the undersigned, a Notary Public in and for
--------------------
said State, personally appeared,
RANDALL E. WOODS
- --------------------------------------------------------------------------------
NANCY SAINT WOODS
- --------------------------------------------------------------------------------
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the persons whose names subscribed to the within instrument and
acknowledged that they executed the same in their authorized capacity(ies), and
that by their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
Signature /S/ LINDA K. KNIGHT
----------------------------------------------------------------------
LINDA K. KNIGHT
- --------------------------------------------------------------------------------
Name (Typed or Printed)
[NOTARY SEAL]
9.
<PAGE>
THIS DEED, made this 24th day of January, 1994, by and between WILLIAM J.
KANE and NOREEN S. KANE, parties of the first part, and RANDALL E. WOODS and
NANCY S. WOODS, parties of the second part.
WITNESSETH, that in consideration of the sum of $699,900.00, the said
parties of the first part do grant and convey to the said parties of the second
part, as tenants by the entirety, their heirs, personal
representatives/successors and assigns, in fee simple, all that piece or parcel
of land situate, in MONTGOMERY COUNTY, Maryland and described as follows, to
wit:
LOT 8 IN THE SUBDIVISION OF GLEN HAMLET AS PER PLAT THEREOF RECORDED
IN PLAT BOOK 140 AT PLAT 16149 AMONG THE LAND RECORDS OF MONTGOMERY
COUNTY, MARYLAND.
BEING all of the same land conveyed to the grantors herein by Deed
recorded in LIBER 8471, FOLIO 339.
BY THE EXECUTION of this Deed, the parties of the first part hereby warrant
under the penalties of perjury that the actual consideration paid or to be paid,
including the amount of any mortgage or deed of trust assumed by the parties of
the second part, is in the sum total of $699,900.00.
TO HAVE AND TO HOLD the property hereby conveyed unto the parties of the
second part, as tenants by the entirety, their personal representatives, heirs
and assigns, in fee simple, forever.
TOGETHER WITH all and singular the ways, easements, right, and privileges
and appurtenances to the same belonging or in anywise appertaining, and all the
estate, right, title, interest, and claim, either at law or in equity or
otherwise however, of the said parties of the first part, of, in, to, or out of
the said land and premises; subject to all easements, convenants and
restrictions of record.
AND the parties of the first part herein warrant specially the property
hereby conveyed; and convenant to execute such further assurances of said land
as may be requisite.
WITNESS the hands and seals the day and year first hereinbefore written.
Witness:
/S/ MARC SANDSTROM /S/ WILLIAM J. KANE (SEAL)
- ------------------ ---------------------
WILLIAM J. KANE
/S/ MARC SANDSTROM /S/ NOREEN S. KANE (SEAL)
- ------------------ ---------------------
NOREEN S. KANE
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO, TO WIT:
I hereby Certify, That on this 24th day of January, 1994, before me, the
subscriber, a Notary Public of the state and county aforesaid, personally
appeared WILLIAM J. KANE and NOREEN S. KANE, known to me (or satisfactorily
proven) to be the persons whose names before subscribed to the within instrument
and acknowledged that they executed the same for the purposes therein contained,
and signed the same in my presence.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My Commission Expires: 2-5-96 /S/ GAIL M. LOVEJOY
-------------------
NOTARY PUBLIC
[NOTARY SEAL]
<PAGE>
July 18, 1996
Donald H. Picker, Ph.D.
15828 Highland Court
Solana Beach, California 92075
Dear Don:
This letter sets forth the terms and conditions of our agreement ("Agreement")
regarding the termination of your employment with Corvas International, Inc.
(the "Company"). You and the Company hereby agree as follows:
1. The Company shall accept your resignation as Chief Operating Officer as of
July 8, 1996 ( the "Separation Date").
2. Within five (5) business days of the Separation Date, the Company will pay
you all accrued salary, and all accrued and unused vacation earned through the
Separation Date, subject to standard payroll deductions, withholding taxes and
other obligations. You are entitled to this payment regardless of whether or
not you sign this Agreement.
3. You shall be entitled to continuation of your base salary for a period of
one hundred eighty (180) days from your Separation Date (the "severance
payment"). In exchange for the promises and covenants set forth herein, the
Company agrees to accelerate the severance payments such that you shall receive
such payments in a single lump sum payment, payable within ten (10) business
days of the execution of this Agreement. You understand that you are
responsible for the payment of any and all applicable state and federal taxes
with respect to such payments, and that the Company shall withhold from such
payment any and all applicable payroll deductions, withholding taxes and other
obligations. You also understand and agree that the Company shall be entitled
to deduct the following other obligations from your lump sum severance payment:
(1) your pro-rata share of payment for health benefits for a period of one
hundred eighty (180) days; (2) $5,400, which comprises the interest due on the
loan granted to you pursuant to the Promissory Note Secured by Second Deed of
Trust dated February 23, 1996 (the "Secured Note") for a period of one hundred
eighty (180) days; and (3) certain personal expenses paid by the Company on your
behalf.
<PAGE>
Donald H. Picker, Ph.D.
July 18, 1996
Page Two
4. Paragraph 2 of the Secured Note provides for acceleration of the payment of
the entire outstanding principal balance of the Secured Note if you resign your
employment with the Company or your employment with the Company is terminated
for cause as defined therein. In exchange for the promises and covenants set
forth herein, the Company agrees that it will not pursue any rights it may have
under that particular portion of the Secured Note. Except as so limited in
this paragraph, all other rights and remedies provided to the Company under the
Secured Note shall remain in full force and effect. Attached hereto as Exhibit
"A", and incorporated herein as if set forth in full, is a copy of the Secured
Note.
5. If upon January 1, 1997, you have not yet obtained full-time employment,
the Company agrees in exchange for the promises and covenants set forth herein,
to provide you with up to a three month grace period in which to pay the
interest payments on the loan granted to you pursuant to the Secured Note. Any
and all accrued interest during this period of time must be paid to the Company
no later than April 1, 1997 or earlier if you obtain full-time employment before
April 1, 1997. Except as so limited in this paragraph, all other rights and
remedies provided to the Company under the Secured Note shall remain in full
force and effect. You agree that you will notify the Company in writing within
five (5) business days of receipt of an offer of employment with another
Company.
6. The Promissory Note made by you in favor of the Company in the amount of
$120,000 on February 23, 1996 ("Promissory Note") specifies that under certain
circumstances you are entitled to a forgiveness of indebtedness of $60,000 on
the date one year from the date thereof. In exchange for the promises and
covenants set forth herein, and subject to your substantial compliance with this
Agreement, the Company agrees to forgive such $60,000 on February 21, 1997.
7. The Company agrees to pay you an amount equal to that which you would
receive, at your prior level of salary on the Separation Date, from the
Employment Development Department ("EDD") under the Unemployment Insurance plan.
Such payments shall be paid bi-weekly until the earlier of the following events:
(1) you obtain other employment; or (2) twenty-six (26) weeks from the
Separation Date have elapsed. You agree and understand that you will not be
entitled to receive any unemployment benefits from the EDD. You also agree that
you will not appeal any decision of the EDD rejecting your claim for
unemployment benefits.
<PAGE>
Donald H. Picker, Ph.D.
July 18, 1996
Page Three
8. To the extent permitted by the federal COBRA law and by the Company's
current group health insurance policies, you will be eligible to continue your
health insurance benefits. Corvas will agree to pay the same portion of the
insurance premium it has previously paid for health insurance benefits on your
behalf through December 31, 1996, plus any additional costs resulting from
COBRA. You will be responsible for a sixty dollar ($60.00) monthly contribution
which will be deducted from your severance payment as specified in paragraph 3
herein. As of January 1, 1997 you will be solely responsible for payment of
your health insurance benefits in accordance with COBRA requirements. Attached
hereto for your review as Exhibit "B" is a notice of your COBRA rights.
9. You hereby acknowledge and agree that except as expressly provided herein,
you will not receive (nor are you entitled to) any additional compensation,
severance, benefits or stock options, notwithstanding any prior agreement to the
contrary, after the Separation Date.
10. You agree that, within ten (10) days of the Separation Date, you will
submit your final documented expense reimbursement statement reflecting all
business expenses you incurred through the Separation Date, if any, for which
you seek reimbursement. The Company will reimburse you for these expenses
pursuant to its regular business practice.
11. You agree that for one year after the Separation Date, you will not, either
directly or through others, solicit or attempt to solicit any employee,
consultant, or independent contractor of the Company to terminate his or her
relationship with the Company in order to become an employee, consultant or
independent contractor to or for any other person or entity.
12. Within five (5) days of the Separation Date, you agree to return to the
Company all Company documents (and all copies thereof) and other Company
property in your possession or your control, including, but not limited to,
Company files, notes, laboratory notebooks, drawings, specifications,
calculations, sequences, data, computer-recorded information, tangible property,
including, but not limited to, computers, credit cards, entry cards, keys and
any other materials of any nature pertaining to your work with the Company, and
any documents or data of any description (or any reproduction of any documents
or data) containing or pertaining to any proprietary or confidential material of
the Company.
<PAGE>
Donald H. Picker, Ph.D.
July 18, 1996
Page Four
13. You acknowledge and agree that you will continue to be bound by the terms
of your Employment Agreement dated February 2, 1996 (which, in part, regards
non-disclosure and assignment of invention), a copy of which is attached hereto
as Exhibit "C".
14. You and the Company agree that neither party will at any time disparage the
other party, and the other party's officers, directors, employees, shareholders
and agents, in any manner likely to be harmful to them or their business,
business reputation or personal reputation; provided that each party shall
respond accurately and fully to any questions, inquiry or request for
information when required by legal process.
15. The provisions of this Agreement shall be held in strictest confidence by
you and the Company and shall not be publicized or disclosed in any manner
whatsoever; provided, however, that: (a) you may disclose this Agreement, in
confidence, to your immediate family; (b) the parties may disclose this
Agreement in confidence to their respective attorneys, accountants, auditors,
tax preparers, and financial advisors; (c) the Company may disclose this
Agreement as necessary to fulfill standard or legally required corporate
reporting or disclosure requirements; and (d) the parties may disclose this
Agreement insofar as such disclosure may be necessary to enforce its terms or as
otherwise required by law.
16. You hereby release, acquit, and forever discharge the Company, its parents
and subsidiaries, and their officers, directors, agents, servants, employees,
attorneys, shareholders, partners, successors, assigns, affiliates, customers,
and clients of and from any and all claims liabilities, demands, causes of
action, costs, expenses, attorneys' fees, damages, indemnities and obligations
of every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed, arising out of or in any
way related to agreements, acts or conduct at any time prior to the Separation
Date, including, but not limited to: all such claims and demands directly or
indirectly arising out of or in any way connected with the Company's employment
of you, the termination of that employment, and the Company's performance of its
obligations as your former employer; claims or demands related to salary,
bonuses, commissions, stock, stock options, or any other ownership interests in
the Company, vacation pay, fringe benefits, expense reimbursements, severance
pay, or any form of compensation; claims pursuant to any federal, state or local
law or cause of action including, but not limited to, the California Fair
Employment and Housing Act, the
<PAGE>
Donald H. Picker, Ph.D.
July 18, 1996
Page Five
federal Civil Rights Act of 1964, as amended; the federal Age Discrimination in
Employment Act of 1967, as amended; the federal Americans With Disabilities Act;
tort law; contract law; wrongful discharge; discrimination; harassment; fraud;
defamation; emotional distress; and breach of the implied covenant of good faith
and fair dealing.
You further acknowledge that you are knowingly and voluntarily waiving and
releasing any rights you may have under the Age Discrimination in Employment Act
of 1967 ("ADEA"). You also acknowledge that the consideration (which includes,
without limitation, the acceleration of severance payments specified in
Paragraph 3, the election not to accelerate loan payments under the Secured Note
as specified in Paragraph 4 and the forgiveness of indebtedness of $60,000 as
specified in Paragraph 6) given for the waiver and release in the preceding
paragraphs hereof is in addition to anything of value to which you were already
entitled. If you are more than forty (40) years of age or older when this
release is signed, you hereby provide the further acknowledgment that you are
advised by this writing, as required by the Older Workers Benefit Protection
Act, that: (a) your waiver and release do not apply to any rights or claims that
may arise after the Effective Date of this release; (b) you have the right to
consult with an attorney prior to executing this release (although you may
voluntarily choose not to do so); (c) you may have at least twenty-one (21) days
to consider this Agreement (although you may by your own choice execute this
release earlier); (d) you have seven (7) days following the execution of this
release to revoke this release; and (e) this Agreement shall not be effective
until the date upon which the revocation period has expired, therefore making
the effective date the eighth day after this release is signed by you.
17. In giving this release, which includes claims which may be unknown to you
at present, you hereby acknowledge that you have read and understand Section
1542 of the Civil Code of the State of California which reads as follows:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor.
You hereby expressly waive and relinquish all rights and benefits under this
section and any law or legal principle of similar effect in any jurisdiction
with respect to claims released hereby.
<PAGE>
Donald H. Picker, Ph.D.
July 18, 1996
Page Six
18. The parties hereto hereby acknowledge that this is a compromise settlement
of various matters, and that the promised payments in consideration of this
Agreement shall not be construed to be an admission of any liability or
obligation by either party to the other party or to any other person whomsoever.
19. This Agreement, including Exhibits A, B and C, constitutes the complete,
final and exclusive embodiment of the entire Agreement between you and the
Company with regard to the subject matter hereof. It is entered into without
reliance on any promise or representation, written or oral, other than those
expressly contained herein. It may not be modified except in a writing signed
by you and a duly authorized officer of the Company. Each party has carefully
read this Agreement, has been afforded the opportunity to be advised of its
meaning and consequences by his or its respective attorneys, and signed the same
of his or its free will.
20. This Agreement shall bind the heirs, personal representatives, successors,
assigns, executors, and administrators of each party, and inure to the benefit
of each party, its agents, directors, officers, employees, servants, heirs,
successors and assigns.
21. This Agreement shall be deemed to have been entered into and shall be
construed and enforced in accordance with the laws of the State of California as
applied to contracts made and to be performed entirely within California.
22. If a court of competent jurisdiction determines that any term or provision
of this Agreement is invalid or unenforceable, in whole or in part, then the
remaining terms and provisions hereof shall be unimpaired. Such court will have
the authority to modify or replace the invalid or unenforceable term or
provision with a valid and enforceable term or provision that most accurately
represents the parties' intention with respect to the invalid or unenforceable
term or provision.
23. This Agreement may be executed in two counterparts, each of which shall be
deemed an original, all of which together shall constitute one and the same
instrument.
<PAGE>
Donald H. Picker, Ph.D.
July 18, 1996
Page Seven
Please confirm your assent to the foregoing terms and conditions of our
Agreement by signing and returning to me the two copies of this letter which are
enclosed herewith. Upon my receipt thereof, I will forward to you a fully
executed duplicate original hereof.
Sincerely,
/S/ RANDALL E. WOODS
Randall E. Woods
President & Chief Executive Officer
HAVING READ AND REVIEWED THE FOREGOING, I HEREBY AGREE TO AND ACCEPT THE TERMS
AND CONDITIONS AS STATE ABOVE.
Dated: 7/17/96
-----------
/S/ DONALD H. PICKER
- ------------------------
Donald H. Picker, Ph.D.
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