<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 September 30, 1998
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 November 2, 1998, there were 15,085,575 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 September 30, 1998 (unaudited)
and December 31, 1997 1
Condensed Statements of Operations for the Three and Nine
Months Ended September 30, 1998 and 1997 (unaudited) 2
Condensed Statements of Cash Flows for the Nine Months
Ended September 30, 1998 and 1997 (unaudited) 3
Notes to Condensed Financial Statements (unaudited) 4
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
Item 3 Quantitative and Qualitative Disclosures About Market Risk 9
PART II OTHER INFORMATION
Item 1 Legal Proceedings 10
None
Item 2 Changes in Securities 10
Item 3 Defaults Upon Senior Securities 10
None
Item 4 Submission of Matters to a Vote of Security Holders 10
None
Item 5 Other Information 10
None
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
<TABLE>
CORVAS INTERNATIONAL, INC.
CONDENSED BALANCE SHEETS
(In thousands)
<CAPTION>
September 30, 1998 December 31, 1997
------------------ -----------------
ASSETS (unaudited)
- ------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,188 $ 2,044
Short-term debt securities held to maturity
and time deposits, partially restricted 19,020 24,076
Receivables 260 289
Notes receivable from related parties 153 153
Other current assets 314 340
---------- ----------
Total current assets 20,935 26,902
Property and equipment, net 1,611 1,312
---------- ----------
$ 22,546 $ 28,214
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable $ 236 $ 299
Accrued expenses 896 623
Accrued vacation 225 191
Deferred revenue 1,000 4,656
---------- ----------
Total current liabilities 2,357 5,769
---------- ----------
Stockholders' equity:
Preferred stock - Series A 1 1
Preferred stock - Series B 0 0
Common stock 15 14
Additional paid-in capital 96,180 92,179
Accumulated deficit (76,007) (69,749)
---------- ----------
Total stockholders' equity 20,189 22,445
Commitments and contingencies
---------- ----------
$ 22,546 $ 28,214
========== ==========
</TABLE>
See accompanying notes to condensed financial statements.
1
<PAGE>
<TABLE>
CORVAS INTERNATIONAL, INC.
CONDENSED STATEMENTS OF OPERATIONS
In thousands, except per share amounts (unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ---------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Revenue from collaborative agreements $ 1,746 $ 1,746 $ 5,239 $ 4,065
License fees and milestones 0 0 2,000 4,100
Net product sales 0 76 43 240
Royalties 24 32 120 88
-------- -------- -------- --------
Total revenues 1,770 1,854 7,402 8,493
-------- -------- -------- --------
COSTS AND EXPENSES:
Research and development 3,852 2,230 11,534 7,272
General and administrative 762 991 3,028 3,230
Cost of products sold 0 53 18 130
-------- -------- -------- --------
Total costs and expenses 4,614 3,274 14,580 10,632
-------- -------- -------- --------
Loss from operations (2,844) (1,420) (7,178) (2,139)
OTHER INCOME:
Interest income 343 440 915 1,154
Other income 0 0 5 0
-------- -------- -------- --------
343 440 920 1,154
-------- -------- -------- --------
Net loss $(2,501) $ (980) $(6,258) $ (985)
======== ======== ======== ========
Basic and diluted net
loss per share $ (0.17) $ (0.07) $ (0.44) $ (0.07)
======== ======== ======== ========
Shares used in calculation
of basic and diluted net
loss per share 14,743 13,898 14,251 13,854
======== ======== ======== ========
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE>
<TABLE>
CORVAS INTERNATIONAL, INC.
CONDENSED STATEMENTS OF CASH FLOWS
In thousands (unaudited)
<CAPTION>
Nine Months Ended
September 30,
---------------------------
1998 1997
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (6,258) $ (985)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 461 472
Amortization of premiums and discounts on investments 51 (71)
Loss on disposition of property and equipment 81 0
Stock compensation expense 111 6
Change in assets and liabilities:
(Increase) decrease in receivables 29 (11)
(Increase) decrease in other current assets 26 (255)
Increase in accounts payable, accrued
expenses and accrued vacation 244 112
Decrease in deferred revenue (3,656) (1,837)
----------- -----------
Net cash used in operating activities (8,911) (2,569)
----------- -----------
Cash flows from investing activities:
Purchases of investments held to maturity (31,591) (30,214)
Proceeds from maturity of investments held to maturity 36,596 32,538
Purchases of property and equipment (841) (955)
Repayments from related parties 0 47
----------- -----------
Net cash provided by investing activities 4,164 1,416
----------- -----------
Cash flows from financing activities:
Principal payments under capital lease obligation 0 (27)
Net proceeds from issuance of common stock 3,891 409
----------- -----------
Net cash provided by financing activities 3,891 382
----------- -----------
Net decrease in cash and cash equivalents (856) (771)
Cash and cash equivalents at beginning of period 2,044 2,202
----------- -----------
Cash and cash equivalents at end of period $ 1,188 $ 1,431
=========== ===========
</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 in the fields of blood
clot formation (thrombosis), inflammation, cancer and other diseases.
(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, 1997. Results for
the interim periods are not necessarily indicative of results for other interim
periods or for the full year.
(3) Net Loss Per Share
------------------
Net loss per share for the three and nine months ended September 30, 1998
and 1997 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.
(4) Comprehensive Income
--------------------
As of January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130").
SFAS 130 established standards for reporting and display of comprehensive income
and its components in a full set of general-purpose financial statements. The
adoption of SFAS 130 did not have a significant impact on the Company. The
Company's net loss approximates comprehensive loss for the nine month periods
ended September 30, 1998 and 1997.
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. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
PROJECTED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR
CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED
IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K.
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 in the fields of blood clot formation (thrombosis),
inflammation, cancer and other diseases. To date, the Company has not generated
significant revenues from product sales. The Company has not been profitable on
an annual basis since inception and expects to incur substantial additional
operating losses over the next several years as the Company progresses in its
research and development programs. There is no assurance that the Company will
successfully develop, commercialize, manufacture or market its products or
generate sufficient revenues to become profitable on a sustained basis or at
all. At September 30, 1998, the Company had an accumulated deficit of
$76,007,000.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
Operating revenues in the quarter ended September 30, 1998 decreased by
$84,000 from the corresponding period in 1997, from $1,854,000 to $1,770,000.
This decrease was primarily attributable to the transfer of manufacturing
activities related to recombinant tissue factor to Ortho-Clinical Diagnostics
Inc. ("Ortho"), a Johnson & Johnson company.
Total costs and expenses increased from $3,274,000 in the three month
period ended September 30, 1997 to $4,614,000 in the third quarter of 1998.
Research and development expenses increased $1,622,000 due primarily to costs
associated with clinical studies of NAPc2, the Company's proprietary
anticoagulant drug candidate. This increase in costs was partially offset by a
$229,000 decrease in general and administrative costs and a $53,000 decrease in
cost of products sold. The decrease in general and administrative costs is
primarily the result of administrative recruiting and relocation costs and
various business development activities incurred in the corresponding period of
1997.
Comparing the third quarters of 1998 and 1997, other income decreased
from $440,000 to $343,000. This $97,000 decrease reflects a reduction in
interest earned as a result of lower cash and investment balances.
5
<PAGE>
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
Operating revenues in the nine month period ended September 30, 1998
decreased to $7,402,000 from $8,493,000 in the same period of 1997. Revenue from
collaborative agreements increased by $1,174,000, mainly because 1998 reflects a
full year of funding from (i) a research and development agreement with Vascular
Genomics Inc. ("VGI") which covers a novel vascular targeting technology and
(ii) a license and collaboration agreement with Schering Corporation
("Schering-Plough") covering oral inhibitors of a key protease necessary for
hepatitis C virus replication, both of which were entered into in mid-1997. This
increase was offset by a $2,100,000 decrease in license fees and milestones and
a $197,000 decrease in product sales. The 1998 revenue from license fees and
milestones includes two milestone payments of $1,000,000 each earned upon
commencement of Phase I clinical trials of NIF, by Pfizer Inc., and an oral
thrombin inhibitor, by Schering-Plough. 1997 included a $3,000,000 milestone
earned upon candidate selection in the oral thrombin inhibitor program, and
license fees of $850,000 and $250,000 from the NIF and hepatitis C programs,
respectively.
Total costs and expenses increased by $3,948,000, from $10,632,000 in the
nine months ended September 30, 1997 to $14,580,000 in the 1998 period. Research
and development costs increased by $4,262,000 primarily as a result of progress
in the clinical development of NAPc2 and NAP5, as well as research associated
with the VGI technology. This increase was partially offset by a $202,000
decrease in general and administrative costs and a $112,000 decrease in cost of
products sold. As cited earlier, these reductions are mainly due to recruiting,
relocation and business development costs incurred in 1997, and the
discontinuation of manufacturing activities, respectively.
Other income decreased $234,000 comparing the nine months ended September
30, 1998 to the same period in 1997. This resulted from decreased cash and
securities available for investment.
Subject to the availability of additional capital, the Company expects it
will continue to incur significant expenses and operating losses over the next
several years as the Company's research and development programs progress.
However, there is no assurance that the Company will be able to raise any
additional capital. The Company also expects that both its expenses and losses
may fluctuate from quarter to quarter and anticipates 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, revenues
and milestones from collaborative agreements, license fees and interest income
earned on cash and investment balances. 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 $20,148,000 as of September 30,
1998. Working capital at September 30, 1998 was $18,578,000. Available cash is
invested in accordance with an investment policy set by the Board of Directors,
which has the objectives to preserve principal, maintain adequate liquidity and
maximize income. The policy provides guidelines concerning the quality, term and
liquidity of investments. The Company presently invests its excess cash in
interest-bearing, investment-grade securities.
6
<PAGE>
Net cash used in operations was $8,911,000 for the nine months ended
September 30, 1998 compared to $2,569,000 for the same period one year earlier.
This increase was primarily due to increased costs associated with the clinical
development of NAPc2 and NAP5, as well as a decrease in revenues. In the nine
months ended September 30, 1998, net cash provided by investing activities was
$4,164,000, compared to $1,416,000 for the corresponding period in 1997. This
increase represents maturing investment securities used to fund operating
activities. Net cash provided by financing activities increased by $3,509,000
comparing the corresponding nine month periods in 1997 and 1998 due to the
issuance of 1,025,000 shares of Common Stock from warrants exercised by a select
group of institutional investors in July 1998.
The Company expects to incur substantial costs in the foreseeable future
including, but not limited to, costs related to preclinical studies, clinical
trials, and research and development activities. The Company expects that these
costs will result in additional operating losses and negative cash flows from
operations over the next several years. Increased costs are anticipated as the
Company begins the multi-center Phase II clinical trial of NAPc2 scheduled for
late 1998. Further, the Company expects revenues in 1999 to decrease from the
current levels due to reaching the end of the two-year term in the Factor Xa
research program with Schering-Plough. At the current burn rate, the Company
believes that capital resources existing as of September 30, 1998 and interest
earned thereon should be sufficient to satisfy its funding requirements for the
next 12 months. However, management has determined that, in this difficult
financing market, the Company's burn rate should be reduced and is presently
considering various alternatives that could include, among other things,
restructuring its drug discovery programs, facility relocation and containment
of external expenditures. The Company may also receive additional funds through
milestone payments and royalties on sales of products in connection with its
alliances. However, there is no assurance that the Company will receive any
additional amounts under existing or any future alliances.
Strategic collaborations with Schering-Plough and Pfizer provide for
payments to the Company if and when certain milestones are met. However, there
is no assurance that any future milestones will be achieved. In addition to
future milestones, the Company may also receive royalties on sales of products
in connection with existing, as well as any future, alliances. If all of the
milestones on all of the Company's existing collaborations are met, Corvas could
receive a maximum of $69,425,000 in milestone payments and research and
development funding over the next several years. There is no assurance that the
Company's existing collaborations will be successful, that the Company will
receive any future milestones or other payments pursuant to collaborative
agreements, that the collaborations will continue since the existing agreements
are terminable at the option of the collaborator upon certain events, or that
the existing collaborations will be commercially successful.
In August 1998, the Company and Schering-Plough agreed to terminate their
oral thrombin inhibitor collaboration. Pursuant to the Termination of Research
and License Agreement for Thrombin Research Program between the Company and
Schering-Plough, Ltd., effective as of August 14, 1998, Schering-Plough
acknowledged that Corvas retains the rights to patents and applications that
were the subject of the original agreement.
7
<PAGE>
In June 1997, the Company entered into an option agreement with VGI
pursuant to which the Company has the option through June 2000 to acquire all of
the stock of VGI in exchange for Corvas Common Stock or, in certain
circumstances, a combination of cash and Common Stock. The aggregate acquisition
price, which is based on the timing of option exercise, ranges from a minimum of
$12,745,000 as of September 30, 1998 to a maximum of $19,960,000. If this option
is exercised, the Company would expect a noncash charge to earnings for
in-process research and development. As of September 30, 1998, the Company had
no current intent to exercise the VGI option and was considering various
financing strategies in connection with this program. If Corvas elects not to,
or is unable to, exercise its option, VGI may require the Company to purchase
19.9% of its outstanding stock for $3,960,000 in Corvas Common Stock. If VGI
requires the Company to purchase 19.9% of its outstanding stock for $3,960,000
in Corvas Common Stock priced at then-current market rates, it could result in
substantial dilution to existing stockholders. During the option period, Corvas
is making monthly option payments of approximately $83,000 to VGI. In addition,
under a research and development agreement, VGI is required to make monthly
payments of $80,000 to Corvas to be applied to research and development covering
the VGI technology. Although the net impact of these payments is not material,
the Company has incurred and may continue to incur substantial additional costs
to develop this technology. Corvas may enter into one or more collaborative
relationships to develop and commercialize this technology or spin-off a
majority interest in the technology in order to fund further development.
However, there is no assurance that the Company will be able to establish such
relationships on satisfactory terms, that such relationships will successfully
reduce the costs associated with the research and development of this
technology, that the option will be exercised, that if the option is not
exercised, VGI would not put 19.9% of its shares to Corvas, or that this
technology will prove to be effective.
Future capital requirements of the Company continue to depend on many
factors, including, but not limited to, the following: the scientific progress
in and magnitude of its drug discovery programs; the progress and results of
preclinical testing and clinical trials; the costs involved in regulatory
compliance; the costs of filing, prosecuting, maintaining and enforcing patents;
the progress of competing technology and other market developments; the changes
in its existing collaborative relationships; the Company's ability to establish
and maintain collaborative or licensing arrangements; the cost of manufacturing
scale-up; and the effectiveness of activities and arrangements of the Company or
its collaborative partners to commercialize the Company's products. The Company
is currently evaluating alternatives in anticipation of the September 1999
expiration of its facility lease for laboratory and office space.
To continue its long-term product development efforts, the Company must
raise substantial additional funding either through collaborative arrangements
or through public or private financings. 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 prices for securities of biotechnology companies,
including Corvas, have historically been highly volatile and, accordingly, there
is no assurance that additional funding will be available, or, if available,
that it will be available on acceptable terms. If additional funds are raised by
issuing securities, further dilution, possibly substantial, to existing
stockholders will likely result. The Company may enter into additional
collaborative relationships to develop and commercialize certain of its current
or future technologies or products. There is no assurance that the Company will
be able to establish such relationships on satisfactory terms, if at all, or
that agreements with collaborators will successfully reduce the Company's
funding requirements. In addition, the Company has not attempted to establish
bank financing arrangements, and there is no assurance that it would be able to
establish such arrangements on satisfactory terms, if at all. If adequate funds
are not available, the Company may be required to delay, scale back or
discontinue one or more of its drug discovery programs, clinical trials or other
aspects of its operations, 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 or at prices below that at which the
Company would otherwise choose to relinquish such rights.
8
<PAGE>
YEAR 2000
Many of the world's computer systems currently record years in a
two-digit format. Such systems will be unable to properly interpret dates beyond
the end of 1999, which could lead to business disruptions commonly referred to
as the "Year 2000" issue.
The Company has implemented a Year 2000 program to address its current
information systems, desktop systems, laboratory equipment and infrastructure.
The program is being administered by an internal task force. The task force is
in the process of investigating the Company's Year 2000 readiness.
The task force has identified key vendors and suppliers, corporate
partners, governmental agencies, banks and communication providers that it feels
will affect the Company if they are not Year 2000 compliant. The Company has
been assessing the Year 2000 readiness of these third parties through their
public statements. Once the task force has determined what other inquiries, if
any, are necessary, the task force will contact such third parties directly.
There is no assurance that the systems of third parties on which the Company
relies will be Year 2000 ready, or that any system failure by such a party would
not have a material adverse effect on the Company. As of September 30, 1998, the
Company has not identified any material Year 2000 issues; however the Company
has not completed its assessment process. In addition, the Company is in the
process of developing a contingency plan to deal with the internal and external
risks associated with the Year 2000 issue. It is anticipated that this plan will
be in place by the end of 1998.
As the Company continues evaluating the impact of the Year 2000 issue,
there is no assurance that a complete review will not identify additional costs
and efforts that will be required which may have a material adverse effect on
the Company's business, financial condition or results of operations.
Furthermore, the Year 2000 issue is complex and there is no assurance that the
Company will be able to address any problems that may arise from the Year 2000
issue without incurring a material adverse effect on the Company's business,
financial condition or results of operations.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
9
<PAGE>
PART II -- OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Item 2. CHANGES IN SECURITIES
In June 1998, in order to induce the early exercise of certain warrants
before the February 2002 expiration date, the Company offered holders of
warrants to purchase an aggregate of 3,000,000 shares of Common Stock of the
Company the ability to exercise their warrants within 45 days at a price of
$3.59 per share. The warrants were originally issued at a per share exercise
price of $6.00. A total of 1,025,000 shares of the Company's Common Stock were
issued in connection with the exercise of the exchanged warrants, which resulted
in estimated net proceeds of $3,647,000 to the Company. The warrants were
originally issued under Rule 506 of the Securities Exchange Act of 1933, as
amended, (the "Securities Act") which was promulgated under Section 4(2) of the
Securities Act ("Rule 506"). The warrants were exchanged pursuant to Rule 506
and Section 14 of the Exchange Act of 1934, as amended, and the rules and
regulations promulgated under Section 14 which govern private tender offers. No
commissions or underwriting fees were paid in connection with such transaction.
In August 1998, through the filing of a 13D by Biotechnology Value Fund,
L.P. ("BVF"), the Company became aware that BVF had acquired a beneficial
ownership in the Company of greater than 20%, without the permission of the
Company (an "Acquiring Person"). Such ownership could potentially trigger
certain rights to other stockholders under the Rights Agreement dated September
18, 1997 between the Company and American Stock Transfer and Trust Company as
Rights Agent (the "Rights Agreement"). After a review, the Board of Directors
determined that BVF had inadvertently become an Acquiring Person, within the
meaning of the Rights Agreement. In order for BVF to avoid being an Acquiring
Person, the Company exchanged a total of 375,000 warrants for 375,000 warrants.
The replacement warrants are substantially the same, including the per share
exercise price which remained at $6.00, except that the Company's right to call
the warrants was lowered from $18.00 to $15.00 per share and the net exercise
provision was eliminated for the period from the date of issuance, August 3,
1998, until August 3, 1999. The warrants were originally issued under Rule 506
and the warrants were exchanged pursuant to Section 4(2) of the Securities Act.
No commissions or underwriting fees were paid in connection with the warrant
exchange.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None
10
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
Exhibit Number Description
-------------- -----------
10.66 Termination of Supply Agreement between the
Company and Ortho-Clinical Diagnostics,
Inc., ("OCD"), dated as of June 15, 1998.
10.67 License Agreement between the Company and
OCD, dated as of July 22, 1998.(1)
10.68 License Agreement between the Company and
LifeScan, Inc., dated as of July 22, 1998.
(1)
10.69 Agreement for Corvas to Maintain Antibody
Agreements, dated as of July 22, 1998.
10.70 Form of Warrant to Purchase Common Stock of
the Company issued to Biotechnology Value
Fund, L.P. and affiliates, dated as of
August 3, 1998.
10.71 Termination of Research and License
Agreement for Thrombin Research Program
between the Company and Schering
Corporation and Schering-Plough, Ltd.,
effective as of August 14, 1998.
10.72 First Amendment to Amended and Restated
Secured Promissory Note between the Company
and Randall E. Woods and Nancy Saint Woods,
dated as of September 17, 1998.
27.1 Financial Data Schedule.
b. Reports on Form 8-K
There were no reports on Form 8-K filed for the quarter ended
September 30, 1998.
- -----------------------------
(1) Confidential treatment has been requested from the Securities and Exchange
Commission for portions of this exhibit.
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: November 12, 1998 By: /s/ RANDALL E. WOODS
-----------------------------------------
Randall E. Woods
President and Chief Executive Officer
Date: November 12, 1998 By: /s/ CAROLYN M. FELZER
-----------------------------------------
Carolyn M. Felzer
Senior Director of Finance
Principal Financial Officer
12
<PAGE>
Exhibit 10.66
ORTHO-CLINICAL DIAGNOSTICS, INC.
U.S. Route 202
Raritan, NJ 08869
June 15, 1998
CORVAS INTERNATIONAL, INC.
3030 Science Road
San Diego, CA 92121
RE: Termination of Supply Agreement
Ladies and Gentlemen:
This letter will confirm our agreement to terminate that certain Supply
Agreement dated June 8, 1992 (the "Supply Agreement") between Corvas
International, Inc. ("CORVAS") and Ortho-Clinical Diagnostics, Inc., successor
by merger to Ortho Diagnostic Systems Inc. ("OCD") (Capitalized terms used and
not otherwise defined herein shall have the meanings given them in the Supply
Agreement.) CORVAS and OCD hereby agree that, effective as of the date of this
letter, the Supply Agreement shall terminate and all rights and obligations
thereunder shall be extinguished; PROVIDED, HOWEVER, that termination of the
Supply Agreement shall neither affect the rights and obligations of the parties
accrued through June 15, 1998, including, without limitation, the provisions
set forth in Section 6 of the Supply Agreement relating to Products
manufactured or distributed during the term of the Supply Agreement, nor
terminate Sections 12, 13, 15, 16, 18 - 26 of the Supply Agreement.
Please acknowledge your agreement with the forcing by having a copy of this
letter executed below on your behalf by your fully authorized representatives.
Very truly yours,
ORTHO-CLINICAL DIAGNOSTICS, INC.
By: /s/ LAWRENCE B. STELMACH
-------------------------
Name: Lawrence B. Stelmach
--------------------
Title: V.P. and G.M. Hemostasis B.V.
-----------------------------
Agreed to and accepted June 15, 1998
CORVAS INTERNATIONAL, INC.
By: /s/ RANDALL E. WOODS
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Name: Randall E. Woods
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Title: President & CEO
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November 6, 1998
EXHIBIT 10.67
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***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SS.SS.200.80(B)(4),
200.83 AND 240.24B-2
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LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") is made as of July 22, 1998
(the "Effective Date") by and between CORVAS INTERNATIONAL, INC., a Delaware
corporation ("CORVAS"), and ORTHO-CLINICAL DIAGNOSTICS, INC., a New York
corporation and a wholly-owned subsidiary of Johnson & Johnson ("OCD").
WHEREAS, CORVAS and Ortho Diagnostic Systems, Inc., a predecessor of
OCD ("ODSI") have entered into that certain License Agreement dated as of June
8, 1992 (the "License Agreement"), pursuant to which CORVAS granted to ODSI
licenses to certain patent rights held by CORVAS for the development and
commercialization of certain IN-VITRO diagnostic assay products incorporating
recombinant human tissue factor;
WHEREAS, CORVAS and OCD wish to terminate the License Agreement; and
WHEREAS, CORVAS wishes to grant to OCD, and OCD wishes to obtain from
CORVAS, an exclusive license under certain patent rights held by CORVAS for the
development and commercialization of certain IN-VITRO diagnostic assay products
based on or incorporating recombinant human tissue factor on the terms and
subject to the conditions set forth herein.
Now, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 "AFFILIATE" means an individual, trust, business trust, joint
venture, partnership, corporation, association or any other entity which owns,
is owned by or is under common ownership with a party. For the purposes of this
definition, the term "owns" (including, with correlative meanings, the terms
"owned by" and "under common ownership with") as used with respect to any party,
shall mean the possession (directly or indirectly) of 50% or more of the
outstanding voting securities of a corporation or comparable equity interest in
any other type of entity.
1.2 "COMMERCIAL PURPOSE" means the transfer or use of any Product
for valuable consideration.
1.3 "CONFIDENTIAL INFORMATION" means any confidential or proprietary
information, including, without limitation, information related to the CORVAS
Patent Rights or the existence of, terms of, or performance of, this agreement,
whether in oral, written, graphic or electronic form.
1.4 "CONTROL" means possession of the ability to grant a license or
sublicense as provided for herein without violating the terms of any agreement
or other arrangement with any Third Party.
<PAGE>
1.5 "CORVAS PATENT RIGHTS" means all rights under the patents and/or
patent applications set forth on Exhibit A hereto, and any and all patents
issuing thereon, owned by or under the Control Of CORVAS, including, without
limitation, any and all substitutions, extensions (including supplemental
protection certificates), registrations, confirmations, reissues, divisionals,
continuations, continuations-in-part, re-examinations, renewals and foreign
counterparts of the aforementioned.
1.6 "MULTI-TEST AUTOMATED PT PRODUCT" means any Product which is not
a Single-Test PT Product.
1.7 "OCD-SCRIPPS LICENSE AGREEMENT" means any license agreement
between OCD and Scripps that comprises the patent rights embraced by the Scripps
License Agreement.
1.8 "PRODUCT" means any IN-VITRO diagnostic assay product
(including, without limitation, Multi-Test Automated PT Products and Single-Test
PT Products), the manufacture, use or sale, offer to sell or import of which
would infringe a Valid Claim but for the license granted herein.
1.9 "SCRIPPS LICENSE AGREEMENT" means that certain Research and
License Agreement for Human Tissue Factor for Diagnostic Purposes between CORVAS
and Scripps Clinic and Research Foundation dated as of May 19, 1988, as amended,
as set forth in Exhibit B hereto.
1.10 "SINGLE-TEST PT PRODUCT" means any Product which is marketed,
sold or distributed through (a) retail outlets, whether supplied directly or
through drug wholesalers, including drug stores, food stores, combination food
and drug stores and mass merchandisers; (b) direct marketing, including sales by
mail-order catalog, telemarketing or television marketing; (c) facilities for
use in on-site, non-laboratory medical testing as part of an overall employee
wellness program; or (d) physicians' offices (which do not have an on-site group
practice laboratory) and physicians for distribution to their patients for
self-testing.
1.11 "TERM" shall have the meaning set forth in Section 8.1.
1.12 "THIRD PARTY" means any entity other than OCD or CORVAS or an
Affiliate of OCD or CORVAS.
1.13 "UNIT" means a single IN VITRO diagnostic assay (i. e., used for
an individual determination).
1.14 "VALID CLAIM" means a claim of an unexpired patent within Corvas
Patent Rights which has not been held unpatentable or invalid by a
non-appealable decision of a court or other appropriate body of competent
jurisdiction.
ARTICLE 2
GRANT OF LICENSE AND ASSIGNMENT OF LICENSE
2.1 GRANT OF LICENSE TO CORVAS PATENT RIGHTS. Subject to the terms
and conditions of this Agreement, CORVAS hereby grants to OCD a worldwide,
exclusive license, including the right to grant sublicenses, under the CORVAS
Patent Rights to develop, make, have made, use, offer for sale, sell and import
Multi-Test Automated PT Products for the Term.
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2.2 SUBLICENSES. OCD shall notify any sublicensee hereunder of all
rights and obligations of OCD under this Agreement which are sublicensed to such
sublicensee and shall notify CORVAS within 30 days of the grant of any
sublicense hereunder.
2.3 ASSIGNMENT OF SCRIPPS LICENSE AGREEMENT. CORVAS hereby assigns
to OCD the Scripps License Agreement and all Of CORVAS' rights and obligations
thereunder. In partial consideration for such assignment, OCD hereby agrees that
it will not take any action which would impair its ability to assign the Scripps
License Agreement back to CORVAS pursuant to Section 8.3.
ARTICLE 3
PRODUCT PAYMENTS
3.1 LICENSE FEE. In partial consideration for the grant of the
license set forth in Section 2.1, OCD agrees to pay CORVAS a one-time,
non-refundable fee equal to [***] within 10 days after the Effective Date.
3.2 ROYALTIES. During the Term, OCD shall pay to CORVAS a royalty
equal to [***] for each Unit of Multi-Test Automated PT Product sold or
transferred by OCD, its Affiliates or its sublicensees to any Third Party or
used by OCD, its Affiliates or its sublicensees for any Commercial Purpose.
ARTICLE 4
PAYMENTS; RECORDS; AUDITS
4.1 PAYMENT; REPORTS. Royalty payments and reports for the sale,
transfer or use, as the case may be, of Multi-Test Automated PT Product by OCD,
its Affiliates and sublicensees shall be calculated and reported for each
calendar quarter. All royalty payments due to CORVAS under this Agreement shall
be paid within 45 days of the end of each calendar quarter, unless otherwise
specifically provided herein. Each payment of royalties shall be accompanied by
a report of the number of Units of Multi-Test Automated PT Products sold,
transferred or used, as the case may be, including the royalties payable in U.S.
dollars, in sufficient detail to permit confirmation of the accuracy of the
royalty payment made.
4.2 MANNER AND PLACE OF PAYMENT. All royalty payments due to CORVAS
under this Agreement shall be paid in U.S. dollars and shall be made by wire
transfer, unless otherwise specified by CORVAS.
4.3 RECORDS AND AUDITS. During the Term and for a period of five
years thereafter, OCD shall keep complete and accurate records pertaining to the
sale or other disposition of Multi-Test Automated PT Products in sufficient
detail to permit CORVAS to confirm the accuracy of all payments due hereunder.
CORVAS shall have the right to cause an independent, certified public accountant
reasonably acceptable to OCD to audit such records to confirm sales of
Multi-Test Automated PT Products and royalty payments for the preceding year.
Such audits may be exercised during normal business hours once a year upon at
least 30 working days' prior written notice to OCD. CORVAS shall bear the full
cost of such audit unless such audit discloses an underpayment by more than 5%
of the amount of the royalties due under this Agreement. In such case, OCD shall
bear the full cost of such audit.
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***Confidential Treatment Requested.
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4.4 TAXES. All income taxes and taxes in lieu of income taxes levied
on account of the royalties accruing to CORVAS under this Agreement shall be
paid by CORVAS for its own account. If provision is made in law or regulation
for withholding, such tax shall be deducted from the royalty payment made by OCD
to the proper taxing authority and a receipt of payment of the tax secured and
promptly delivered to CORVAS. Each party agrees to assist the other party in
claiming exemption from or credit for such deductions or withholdings under any
double taxation or similar agreement or treaty from time to time in force.
ARTICLE 5
CONFIDENTIALITY
5.1 NONDISCLOSURE. During the Term and for a period of five years
thereafter, each party will maintain all Confidential Information of the other
party as confidential and will not disclose any such Confidential Information to
any Third Party or use any Confidential Information for any purpose, except (a)
as expressly authorized by this Agreement, (b) as required by law or court
order, or (c) disclosure may be made to its Affiliates, employees, agents,
consultants and other representatives so long as such persons are under an
obligation of confidentiality no less stringent than set forth herein. Each
party may use such Confidential Information only to the extent required to
accomplish the purposes of this Agreement. Each party will use at least the same
standard of care as it uses to protect proprietary or confidential information
of its own to ensure that its Affiliates, employees, agents, consultants and
other representatives do not disclose or make any unauthorized use of the
Confidential Information of the other party. Each party will promptly notify the
other upon discovery of any unauthorized use or disclosure of the Confidential
Information of the other party.
5.2 EXCEPTIONS. Confidential Information shall not include any
information which the receiving party can prove by competent evidence:
(a) is now, or hereafter becomes, through no act or failure to
act on the part of the receiving party, generally known or available;
(b) is lawfully known by the receiving party at the time of
receiving such information;
(c) is hereafter furnished to the receiving party by a Third
Party, as a matter of right and without restriction on disclosure; or
(d) is the subject of a written permission to disclose provided
by the disclosing party.
ARTICLE 6
INTELLECTUAL PROPERTY RIGHTS
6.1 APPLICATION, PROSECUTION AND MAINTENANCE OF CORVAS PATENT
RIGHTS. From and after the Effective Date, CORVAS shall be responsible for the
filing, prosecution and maintenance of all patent applications and patents
within the CORVAS Patent Rights. CORVAS shall keep OCD informed of significant
developments with regard to the filing, prosecution and maintenance of patent
applications and patents within the CORVAS Patent Rights. OCD shall cooperate
fully with CORVAS in the filing, prosecution and maintenance of patent
applications and patents within the CORVAS Patent Rights.
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6.2 REIMBURSEMENT OF PATENT EXPENSES. During the Term, OCD shall
reimburse CORVAS for all reasonable and documented costs and expenses incurred
by CORVAS in the filing, prosecution and maintenance of the CORVAS Patent Rights
within 30 days following receipt from CORVAS of copies of billing invoices for
such costs and expenses. Provided that OCD satisfies its reimbursement
obligations hereunder, CORVAS agrees that it shall diligently prosecute and
maintain all existing patents and patent applications within the CORVAS Patent
Rights, and further, that it shall file, prosecute and maintain any additional
patent applications and patents within the CORVAS Patent Rights as reasonably
directed in writing by OCD, in CORVAS' name and at OCD's sole expense. If OCD
subsequently informs CORVAS in writing that OCD no longer wishes to reimburse
CORVAS for expenses relating to any such patent application or patent in any
country, then CORVAS shall approach LifeScan, Inc. ("LIFESCAN") to assume such
obligation under that certain License Agreement dated as of July 22, 1998
between CORVAS and LIFESCAN to sell Single-Test PT Products. If LIFESCAN
likewise informs CORVAS in writing that it does not wish to reimburse CORVAS for
such patent expenses, effective upon receipt of such written communication, then
CORVAS shall be free, at its sole discretion and expense, and with no further
obligations to OCD under such CORVAS Patent Rights, to either abandon the
subject patent application or patent or to continue said prosecution and
maintenance. Any patent application or patent for which CORVAS shall assume the
responsibility for the cost of its prosecution and/or maintenance shall be
removed from the CORVAS Patent Rights and shall no longer be subject to any
right of OCD hereunder.
6.3 INFRINGEMENT BY THIRD PARTIES. OCD and CORVAS shall promptly
notify the other in writing of any alleged or threatened infringement of any
patent included in the CORVAS Patent Rights of which they become aware. Both
parties shall use reasonable efforts in cooperating with each other to terminate
such infringement without litigation. OCD shall have the first right to bring
and control any action or proceeding with respect to any such infringement which
relates to any Multi-Test Automated PT Product, at its own expense and by
counsel of its own choice, and CORVAS shall have the right, at its own expense,
to be represented in any such action by counsel of its own choice. If OCD fails
to bring an action or proceeding with respect to any infringement of any CORVAS
Patent Rights, which relates to any Multi-Test Automated PT Product, within (a)
60 days following the notice of alleged infringement or (b) 10 days before the
time limit, if any, set forth in the appropriate laws and regulations for the
filing of such actions, whichever comes first, CORVAS, shall have the right to
bring and control any such action, at its own expense and by counsel of its own
choice, and OCD shall have the right, at its own expense, to be represented in
any such action by counsel of its own choice. CORVAS, or a party with which
CORVAS may contract or otherwise designate, shall have the right to bring and
control any action or proceeding with respect to any such infringement which
does not relate to any Multi-Test Automated PT Product, at its own expense and
by counsel of its own choice. In the event a party brings an infringement
action, the other party shall cooperate fully, including if required to bring
such action, the furnishing of a power of attorney. Neither party shall have the
right to settle any patent infringement litigation under this Section 6.3 in a
manner that diminishes the rights or interests of the other party or obligates
the other party to make any payment or take any action without the consent of
such other party. Except as otherwise agreed to by the parties as part of a cost
sharing arrangement, any recovery realized as a result of such litigation, after
reimbursement of any litigation expenses of OCD and CORVAS, shall belong to the
party who brought the action.
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ARTICLE 7
REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1 CORPORATE POWER. Each party hereby represents and warrants that
such party is duly organized and validly existing under the laws of the state of
its incorporation and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof.
7.2 DUE AUTHORIZATION. Each party hereby represents and warrants
that such party is duly authorized to execute and deliver this Agreement and to
perform its obligations hereunder, subject to the written consent of Scripps
Clinic and Research Foundation to the assignment of the Scripps License
Agreement from CORVAS to OCD pursuant to Section 2.3.
7.3 BINDING AGREEMENT. Each party hereby represents and warrants
that this Agreement is a legal and valid obligation binding upon it and is
enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement by such party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party
or by which it may be bound, nor violate any law or regulation of any court,
governmental body or administrative or other agency having authority over it.
7.4 OWNERSHIP OF CORVAS PATENT RIGHTS. CORVAS represents and
warrants that (a) CORVAS is the holder of all right, title and interest in and
to the CORVAS Patent Rights, (b) CORVAS has not granted any license under the
CORVAS Patent Rights and is under no obligation to grant any such license,
except to OCD and LIFESCAN, and (c) there are no outstanding liens,
encumbrances, agreements or understandings of any kind, either written, oral or
implied, regarding the CORVAS Patent Rights which are inconsistent or in
conflict with this Agreement.
7.5 DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, CORVAS DOES NOT MAKE ANY REPRESENTATION OR WARRANTY TO OCD OF ANY
KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE CORVAS PATENT RIGHTS OR THE PATENT
RIGHTS EMBRACED BY THE SCRIPPS LICENSE AGREEMENT, INCLUDING, WITHOUT LIMITATION,
ANY WARRANTY OF NONINFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
7.6 LIMITATION OF LIABILITY. NEITHER CORVAS NOR OCD SHALL BE
ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL
OR PUNITIVE DAMAGES IN CONNECTION WITH THE CORVAS PATENT RIGHTS, THE PATENT
RIGHTS EMBRACED BY THE SCRIPPS LICENSE AGREEMENT OR THE LICENSE GRANTED
HEREUNDER.
7.7 INDEMNIFICATION. OCD hereby agrees to indemnify, save, defend
and hold harmless CORVAS and its officers, directors, employees, consultants and
agents from and against any and all suits, claims, actions demands, liabilities,
expenses and losses, including reasonable legal expenses and attorneys' fees
("Losses") arising directly or indirectly out of the practice of the license
granted hereunder, except to the extent such Losses result from the gross
negligence or the willful misconduct Of CORVAS. In the event CORVAS seeks
Indemnification under this Section 7.7, CORVAS shall inform OCD of a claim as
soon as reasonably practicable after CORVAS receives notice of the claim, shall
permit OCD to assume direction and control of the defense of the claim
(including the right to settle the claim solely for monetary consideration), and
shall cooperate as requested (at the expense of OCD) in the defense of the
claim.
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ARTICLE 8
TERM; TERMINATION
8.1 TERM. This Agreement shall begin on the Effective Date and shall
end upon the expiration of the last to expire of the CORVAS Patent Rights (the
"Patent Expiration Date"), unless terminated earlier in accordance with the
terms of this Agreement (the "Term").
8.2 TERMINATION.
(a) Either party may terminate this Agreement prior to the
Patent Expiration Date upon or after the bankruptcy, insolvency, dissolution or
winding up of the other party (other than dissolution or winding up for the
purposes of reconstruction or amalgamation).
(b) The non-breaching party may terminate this Agreement prior
to the Patent Expiration Date upon or after the breach of any material provision
of this Agreement by the other party if the breaching party has not cured such
breach within 60 days following written notice thereof by the non-breaching
party.
(c) Either party may terminate this Agreement prior to the
Patent Expiration Date upon or after OCD, its Affiliates and sublicensees
discontinue the marketing, sale, distribution and use of all in-vitro diagnostic
assay products, which are not Single-Test PT Products, that incorporate [***]
following 60 days' written notice to the other party.
(d) OCD may terminate this Agreement prior to the Patent
Expiration Date following written notice to CORVAS if (i) OCD has paid at least
[***] of cumulative royalties to CORVAS under this Agreement, or (ii) in the
event OCD has not paid at least [***] of cumulative royalties to CORVAS under
this Agreement, OCD pays CORVAS the difference between [***] and the
cumulative royalties actually paid to CORVAS to date.
8.3 EFFECT OF EXPIRATION OR TERMINATION.
(a) Upon termination of this Agreement by either party pursuant
to Section 8.2(a), all rights to the CORVAS Patent Rights under this Agreement
shall revert to CORVAS, all royalty obligations under Section 3.2 shall
terminate, and OCD shall, in its sole discretion, either (i) assign the Scripps
License Agreement back to CORVAS, or (ii) sublicense all rights granted to
CORVAS under the Scripps License Agreement necessary to develop, make, have
made, use, offer for sale, sell and import Multi-Test Automated PT Products back
to CORVAS on the same terms and conditions as in the Scripps License Agreement.
(b) Upon termination of this Agreement by either party pursuant
to Section 8.2(c), by CORVAS pursuant to Section 8.2(b) or by OCD pursuant to
Section 8.2(d), all rights to the CORVAS Patent Rights shall revert to CORVAS,
any and all sublicenses granted hereunder by OCD shall remain in effect, but
shall be assigned to CORVAS, and OCD shall, in its sole discretion, except for
termination by CORVAS pursuant to Section 8.2(b) in which case it shall be in
CORVAS' sole discretion to, either (i) assign the Scripps License Agreement back
to CORVAS, or (ii) sublicense all rights granted to CORVAS under the Scripps
License Agreement necessary to develop, make, have made, use, offer for sale,
sell and import Multi-Test Automated PT Products back to CORVAS on the same
terms and conditions as in the Scripps License Agreement.
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***Confidential Treatment Requested.
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(c) Upon termination of this Agreement by OCD pursuant to
Section 8.2(b), the license granted under Section 2.1 shall remain in effect so
long as OCD does not breach its obligations to CORVAS under this Agreement, and
all royalty obligations under Section 3.2 shall terminate.
(d) Upon termination of this Agreement for any reason other than
by CORVAS pursuant to Section 8.2, OCD shall have the right for a period of 18
months following the date of termination to finish any work-in-process and to
dispose of any Multi-Test Automated PT Products in its possession or control;
PROVIDED, HOWEVER, OCD shall make all royalty payments to CORVAS relating to
such Multi-Test Automated PT Products as required under Section 3.2.
(e) Expiration or termination of this Agreement shall not
relieve the parties of any obligation accruing prior to such expiration or
termination. The provisions of Sections 4.3, 7.5, 7.6, 7.7 and 8.3 and Articles
1, 5 and 9 shall survive termination or expiration of this Agreement.
(f) Termination of this Agreement by a party pursuant to Section
8.2 shall not confer upon OCD any right to practice within the CORVAS Patent
Rights in the absence of a license to the CORVAS Patent Rights or other such
express authorization from CORVAS.
ARTICLE 9
MISCELLANEOUS
9.1 FORCE MAJEURE. Neither party shall be held liable or responsible
to the other party nor be deemed to have defaulted under or breached this
Agreement for failure or delay in fulfilling or performing any term of this
Agreement when such failure or delay is caused by or results from causes beyond
the reasonable control of the affected party, including, but not limited to,
fire, floods, embargoes, war, acts of war (whether war be declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or the other party.
9.2 ASSIGNMENT.
(a) Except as expressly provided hereunder, neither this
Agreement nor any rights or obligations hereunder may be assigned or otherwise
transferred by either party without the prior written consent of the other party
(which consent shall not be unreasonably withheld); PROVIDED, HOWEVER, that
either party may assign this Agreement and its rights and obligations hereunder
without the consent of the other party (i) in connection with the transfer or
sale of all or substantially all of the assets of such party to which this
Agreement pertains (for the avoidance of doubt, such assets shall consist of the
tangible and intangible property related to Multi-Test Automated PT Products for
monitoring or evaluating bleeding and/or clotting processes), (ii) in the event
of a merger or reorganization of such party with or into another party, or (iii)
to any Affiliate. Notwithstanding the foregoing, any such assignment to an
Affiliate shall not relieve the assigning party of its responsibilities for
performance of its obligations under this Agreement.
(b) The rights and obligations of the parties under this
Agreement shall be binding upon and inure to the benefit of the successors and
permitted assigns of the parties. Any assignment not in accordance with this
Agreement shall be void.
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9.3 PUBLICITY. The parties agree that neither party will originate
any press release or other public announcement, written or oral, or otherwise
make any disclosure relating to the existence or terms of or performance under
this Agreement without the prior written approval of the other party, except as
may otherwise be required by law, including compliance with securities laws (in
which case the disclosing party shall still consult with the other party prior
to such disclosure).
9.4 GOVERNING LAW AND ARBITRATION. All matters affecting the
interpretation, validity and performance of this Agreement shall be governed by
the laws of the State of New Jersey. Any and all disputes between the parties
relating in any way to the execution of this Agreement and/or the validity,
construction, meaning, enforceability, or performance of this Agreement or any
of its provisions, or the intent of the parties in entering into this Agreement,
or any dispute relating to patent validity or infringement arising under this
Agreement, shall be settled by arbitration. Such arbitration shall be conducted
in San Diego, California if initiated by OCD, or in New Brunswick, New Jersey if
initiated by CORVAS, in accordance with the rules then pertaining to the
American Arbitration Association with a panel of three arbitrators. The
arbitrators shall be selected from the National Panel of Arbitrators of the
American Arbitration Association (the "AAA"). Each party shall select one
arbitrator and the two selected arbitrators shall select the third arbitrator.
If the two selected arbitrators cannot agree on a third arbitrator then the AAA
shall select the third arbitrator from the National Panel of Arbitrators.
Reasonable discovery as determined by the arbitrators shall apply to the
arbitration proceeding. The law of the State of New Jersey shall apply to the
arbitration proceedings. Judgment upon the award rendered by the arbitrators may
be entered in any court having jurisdiction thereof.
9.5 WAIVER. Except as specifically provided for herein, the waiver
from time to time by either of the parties of any of their rights or their
failure to exercise any remedy shall not operate or be construed as a continuing
waiver of the same rights or remedies or of any other of such party's rights or
remedies provided in this Agreement.
9.6 SEVERABILITY. If any term, covenant or condition of this
Agreement or the application thereof to any party or circumstance shall, to any
extent, be held to be invalid or unenforceable, then (a) the remainder of this
Agreement, or the application of such term, covenant or condition to parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (b) the parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith to provide a reasonably acceptable
alternative to the term, covenant or condition of this Agreement or the
application thereof that is invalid or unenforceable, it being the intent of the
parties that the basic purposes of this Agreement are to be effectuated.
9.7 TERMINATION OF LICENSE AGREEMENT. CORVAS and OCD hereby agree
that, as of the Effective Date, the License Agreement shall terminate and all
rights and obligations thereunder shall be extinguished.
9.8 ENTIRE AGREEMENT; AMENDMENT. This Agreement sets forth all of
the covenants, promises, agreements, warranties, representations, conditions and
understandings between the parties hereto with respect to the subject matter of
this Agreement, and supersedes and terminates all prior agreements and
understanding between the parties with respect to the subject matter of this
Agreement, including the License Agreement. There are no covenants, promises,
agreements, warranties, representations, conditions or understandings with
respect to the subject matter hereof, either oral or written, between the
parties other than as set forth herein. No subsequent alteration, amendment,
change or addition to this Agreement shall be binding upon the parties hereto
unless reduced to writing and signed by the respective authorized officers of
the parties.
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9.9 RELATIONSHIP OF THE PARTIES. It is expressly agreed that CORVAS
and OCD shall be independent contractors and that the relationship between the
two parties shall not constitute a partnership, joint venture or agency of any
kind. Neither party shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall
be binding on the other, without the prior written authorization of the other
party.
9.10 NOTICES. Any notices or communications provided for in this
Agreement to be made by either of the parties to the other shall be in writing
and delivered personally or sent by United States mail, registered or certified,
postage paid, by overnight delivery service such as FedEx or UPS or by
facsimile, with confirmation of receipt, addressed as follows:
If to CORVAS: CORVAS INTERNATIONAL, INC.
3030 Science Park Road
San Diego, CA 92121
Attn: Corporate Secretary
Phone No. (619) 455-9800
Fax No. ( 619) 455-7895
If to OCD or LIFESCAN: JOHNSON & JOHNSON
One Johnson & Johnson Plaza
New Brunswick, NJ 08933-7003
Attn: Gerard Vaillant
Company Group Chairman
Phone No. (908) 218-8601
Fax No. ( 908) 704-3905
Either party may by like notice specify or change an address to which
notices and communications shall thereafter be sent. Notices sent by facsimile
shall be effective upon confirmation of receipt, notices sent by mail or
overnight delivery service shall be effective upon receipt, and notices given
personally shall be effective when delivered.
9.11 HEADINGS. The captions contained in this Agreement are not a
part of this Agreement, but are merely guides or labels to assist in locating
and reading the several Articles hereof.
9.12 COUNTERPARTS. This Agreement may be executed in two or more
Counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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In Witness Whereof, the parties have executed this Agreement as of the
date first set forth above.
CORVAS INTERNATIONAL, INC. ORTHO-CLINICAL DIAGNOSTICS, INC.
/s/ RANDALL E. WOODS 11-6-98 /s/ GERARD VAILLANT
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Randall E. Woods Gerard Vaillant
President and Chief Executive Officer Chairman
License Agreement
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<TABLE>
<CAPTION>
EXHIBIT A
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CORVAS PATENT RIGHTS
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Docket No. Title Serial Number Filing Date
Appl. Type (Inventor) PATENT NUMBER (Issue Date) Status
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[***] [***] 07/612,118 [***] [***]
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] 08/126,668 [***] [***]
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] 08/427,683 [***] [***]
- -----------------------------------------------------------------------------------------------------------------------------------
195/185 Tissue factor based prothrombin time reagent(Brown) 07/784,326 10-29-91 ISSUED PATENT
CIP US5,314,695 (5-24-94)
- -----------------------------------------------------------------------------------------------------------------------------------
195/185PCT [***] PCT [***] [***]
US91/08174
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] EPO [***] [***]
92901065
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] JPN [***] [***]
501271/1992
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] CAN [***] [***]
2096109
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
***Confidential Treatment Requested.
12
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Docket No. Title Serial Number Filing Date
Appl. Type (Inventor) PATENT NUMBER (Issue Date) Status
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[***] [***] AUS [***] [***]
90907/91
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] AUS [***] [***]
44489/96
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] FIN [***] [***]
932148
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] IRE [***] [***]
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] KOR [***] [***]
701454/93
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] MEX [***] [***]
- -----------------------------------------------------------------------------------------------------------------------------------
195/185NZ* Tissue factor based prothrombin time reagent(Brown) NZ240577 11-13-91 ISSUED PATENT
(NZ240577) (11-5-96)
- -----------------------------------------------------------------------------------------------------------------------------------
195/185-D1NZ Tissue factor based prothrombin time reagent(Brown) NZ264,556 - -94 ISSUED PATENT
DIV (NZ264,556) (11-6-96)
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] NOR [***] [***]
931708
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] POR [***] [***]
99499
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Indicates application was filed directly in national patent office; not through
PCT.
- ----------
*** Confidential Treatment Requested.
13
EXHIBIT 10.68
=========================================
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SS.SS.200.80(B)(4),
200.83 AND 240.24B-2
=========================================
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") is made as of July 22, 1998
(the "Effective Date") by and between CORVAS INTERNATIONAL, INC., a Delaware
corporation ("CORVAS"), and LIFESCAN, INC., a California corporation and a
wholly-owned subsidiary of Johnson & Johnson ("LIFESCAN").
WHEREAS, CORVAS wishes to grant to LIFESCAN, and LIFESCAN wishes to
obtain from CORVAS, an exclusive license under certain patent rights held by
CORVAS for the development and commercialization of certain in-vitro diagnostic
assay products based on or incorporating recombinant human tissue factor on the
terms and subject to the conditions set forth herein.
Now, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 "AFFILIATE" means an individual, trust, business trust, joint
venture, partnership, corporation, association or any other entity which owns,
is owned by or is under common ownership with a party. For the purposes of this
definition, the term "owns" (including, with correlative meanings, the terms
"owned by" and "under common ownership with") as used with respect to any party,
shall mean the possession (directly or indirectly) of 50% or more of the
outstanding voting securities of a corporation or comparable equity interest in
any other type of entity.
1.2 "COMMERCIAL PURPOSE" means the transfer or use of any
Single-Test PT Product for valuable consideration.
1.3 "CONFIDENTIAL INFORMATION" means any confidential or proprietary
information, including, without limitation, information related to the CORVAS
Patent Rights or the existence of, terms of, or performance of, this agreement,
whether in oral, written, graphic or electronic form.
1.4 "CONTROL" means possession of the ability to grant a license or
sublicense as provided for herein without violating the terms of any agreement
or other arrangement with any Third Party.
1.5 "CORVAS PATENT RIGHTS" means all rights under the patents and/or
patent applications set forth on Exhibit A hereto, and any and all patents
issuing thereon, owned by or under the Control of CORVAS, including, without
limitation, any and all substitutions, extensions (including supplemental
protection certificates), registrations, confirmations, reissues, divisionals,
continuations, continuations-in-part, re-examinations, renewals and foreign
counterparts of the aforementioned.
<PAGE>
1.6 "SINGLE-TEST PT PRODUCT" means any IN-VITRO diagnostic assay
product, the manufacture, use, sale, offer to sell or import of which would
infringe a Valid Claim but for the license granted herein, which is marketed,
sold or distributed through (a) retail outlets, whether supplied directly or
through drug wholesalers, including drug stores, food stores, combination food
and drug stores and mass merchandisers; (b) direct marketing, including sales by
mail-order catalog, telemarketing or television marketing; (c) facilities for
use in on-site, non-laboratory medical testing as part of an overall employee
wellness program; or (d) physicians' offices (which do not have an on-site group
practice laboratory) and physicians for distribution to their patients for
self-testing.
1.7 "TERM" shall have the meaning set forth in Section 8.1.
1.8 "THIRD PARTY" means any entity other than LIFESCAN or CORVAS or
an Affiliate of LIFESCAN or CORVAS.
1.9 "UNIT" means a single IN VITRO diagnostic assay (i.e., used for
an individual determination).
1.10 "VALID CLAIM" means a claim of an unexpired patent within
Corvas Patent Rights which has not been held unpatentable or invalid by a
non-appealable decision of a court or other appropriate body of competent
jurisdiction.
ARTICLE 2
GRANT OF LICENSE
2.1 GRANT OF LICENSE TO CORVAS PATENT RIGHTS. Subject to the terms
and conditions of this Agreement, CORVAS hereby grants to LIFESCAN a worldwide,
exclusive license, including the right to grant sublicenses, under the CORVAS
Patent Rights to develop, make, have made, use, offer for sale, sell and import
Single-Test PT Products for the Term.
2.2 SUBLICENSES. LIFESCAN shall notify any sublicensee hereunder of
all rights and obligations of LIFESCAN under this Agreement which are
sublicensed to such sublicensee and shall notify CORVAS within 30 days of the
grant of any sublicense hereunder.
ARTICLE 3
PRODUCT PAYMENTS
3.1 LICENSE FEE. In partial consideration for the grant of the
license set forth in Section 2.1, LIFESCAN agrees to pay CORVAS a one-time,
non-refundable fee equal to [***] within 10 days after the Effective Date.
3.2 ROYALTIES. During the Term, LIFESCAN shall pay to CORVAS (a) a
royalty equal to [***] for each Unit of Single-Test PT Product sold or
transferred by LIFESCAN or its Affiliates to any Third Party, or used by
LIFESCAN or its Affiliates for any Commercial Purpose, and (b) a royalty equal
to [***] for each Unit of Single-Test PT Product sold or transferred by any
sublicensee of LIFESCAN to any Third Party, or used by such sublicensee for any
Commercial Purpose.
- ----------
***Confidential Treatment Requested.
2
<PAGE>
ARTICLE 4
PAYMENTS; RECORDS; AUDITS
4.1 PAYMENT; REPORTS. Royalty payments and reports for the sale,
transfer or use, as the case may be, of Single-Test PT Products by LIFESCAN, its
Affiliates and sublicensees shall be calculated and reported for each calendar
quarter. All royalty payments due to CORVAS under this Agreement shall be paid
within 45 days of the end of each calendar quarter, unless otherwise
specifically provided herein. Each payment of royalties shall be accompanied by
a report of the number of Units of Single-Test PT Products sold, transferred or
used, as the case may be, including the royalties payable in U.S. dollars, in
sufficient detail to permit confirmation of the accuracy of the royalty payment
made.
4.2 MANNER AND PLACE OF PAYMENT. All royalty payments due to CORVAS
under this Agreement shall be paid in U.S. dollars and shall be made by wire
transfer, unless otherwise specified by CORVAS.
4.3 RECORDS AND AUDITS. During the Term and for a period of five
years thereafter, LIFESCAN shall keep complete and accurate records pertaining
to the sale or other disposition of Single-Test PT Products in sufficient detail
to permit CORVAS to confirm the accuracy of all payments due hereunder. CORVAS
shall have the right to cause an independent, certified public accountant
reasonably acceptable to LIFESCAN to audit such records to confirm sales of
Single-Test PT Products and royalty payments for the preceding year. Such audits
may be exercised during normal business hours once a year upon at least 30
working days' prior written notice to LIFESCAN. CORVAS shall bear the full cost
of such audit unless such audit discloses an underpayment by more than 5% of the
amount of the royalties due under this Agreement. In such case, LIFESCAN shall
bear the full cost of such audit.
4.4 TAXES. All income taxes and taxes in lieu of income taxes levied
on account of the royalties accruing to CORVAS under this Agreement shall be
paid by CORVAS for its own account. If provision is made in law or regulation
for withholding, such tax shall be deducted from the royalty payment made by
LIFESCAN to the proper taxing authority and a receipt of payment of the tax
secured and promptly delivered to CORVAS. Each party agrees to assist the other
party in claiming exemption from or credit for such deductions or withholdings
under any double taxation or similar agreement or treaty from time to time in
force.
ARTICLE 5
CONFIDENTIALITY
5.1 NONDISCLOSURE. During the Term and for a period of five years
thereafter, each party will maintain all Confidential Information of the other
party as confidential and will not disclose any such Confidential Information to
any Third Party or use any Confidential Information for any purpose, except (a)
as expressly authorized by this Agreement, (b) as required by law or court
order, or (c) disclosure may be made to its Affiliates, employees, agents,
consultants and other representatives so long as such persons are under an
obligation of confidentiality no less stringent than set forth herein. Each
party may use such Confidential Information only to the extent required to
accomplish the purposes of this Agreement. Each party will use at least the same
standard of care as it uses to protect proprietary or confidential information
of its own to ensure that its Affiliates, employees, agents, consultants and
other representatives do not disclose or make any unauthorized use of the
Confidential Information of the other party. Each party will promptly notify the
other upon discovery of any unauthorized use or disclosure of the Confidential
Information of the other party.
3
<PAGE>
5.2 EXCEPTIONS. Confidential Information shall not include any
information which the receiving party can prove by competent evidence:
(a) is now, or hereafter becomes, through no act or failure to
act on the part of the receiving party, generally known or available;
(b) is lawfully known by the receiving party at the time of
receiving such information;
(c) is hereafter furnished to the receiving party by a Third
Party, as a matter of right and without restriction on disclosure; or
(d) is the subject of a written permission to disclose provided
by the disclosing party.
ARTICLE 6
INTELLECTUAL PROPERTY RIGHTS
6.1 APPLICATION, PROSECUTION AND MAINTENANCE OF CORVAS PATENT
RIGHTS. From and after the Effective Date, CORVAS shall be responsible for the
filing, prosecution and maintenance of all patent applications and patents
within the CORVAS Patent Rights. CORVAS shall keep LIFESCAN informed of
significant developments with regard to the filing, prosecution and maintenance
of patent applications and patents within the CORVAS Patent Rights. LIFESCAN
shall cooperate fully with CORVAS in the filing, prosecution and maintenance of
patent applications and patents within the CORVAS Patent Rights.
6.2 REIMBURSEMENT OF PATENT EXPENSES. If Ortho-Clinical Diagnostics,
Inc. ("OCD") informs CORVAS in writing that OCD no longer wishes to reimburse
CORVAS for expenses relating to the prosecution and maintenance of any patent
application and/or patent within the CORVAS Patent Rights under that certain
License Agreement dated as of July 22, 1998 between CORVAS and OCD to sell
Multi-Test PT Products (as defined therein), then CORVAS shall approach LIFESCAN
to assume such obligation. If LIFESCAN likewise informs CORVAS in writing that
it does not wish to reimburse CORVAS for such patent expenses, effective upon
receipt of such written communication, then CORVAS shall be free, at its sole
discretion and expense, and with no further obligations to LIFESCAN under such
CORVAS Patent Rights, to either abandon the subject patent application or patent
or to continue said prosecution and maintenance.
6.3 INFRINGEMENT BY THIRD PARTIES. LIFESCAN and CORVAS shall
promptly notify the other in writing of any alleged or threatened infringement
of any patent included in the CORVAS Patent Rights of which they become aware.
Both parties shall use reasonable efforts in cooperating with each other to
terminate such infringement without litigation. LIFESCAN shall have the first
right to bring and control any action or proceeding with respect to any such
infringement which relates to any Single-Test PT Product, at its own expense and
by counsel of its own choice, and CORVAS shall have the right, at its own
expense, to be represented in any such action by counsel of its own choice. If
LIFESCAN fails to bring an action or proceeding with respect to any infringement
of any CORVAS Patent Rights, which relates to any Single-Test PT Product, within
(a) 60 days following the notice of alleged infringement or (b) 10 days before
the time limit, if any, set forth in the appropriate laws and regulations for
the filing of such actions, whichever comes first, CORVAS shall have the right
to bring and control any such action, at its own expense and by counsel of its
own choice, and LIFESCAN shall have the right, at its own expense, to be
4
<PAGE>
represented in any such action by counsel of its own choice. CORVAS, or a party
with which CORVAS may contract or otherwise designate, shall have the right to
bring and control any action or proceeding with respect to any such infringement
which does not relate to any Single-Test PT Product, at its own expense and by
counsel of its own choice. In the event a party brings an infringement action,
the other party shall cooperate fully, including if required to bring such
action, the furnishing of a power of attorney. Neither party shall have the
right to settle any patent infringement litigation under this Section 6.2 in a
manner that diminishes the rights or interests of the other party or obligates
the other party to make any payment or take any action without the consent of
such other party. Except as otherwise agreed to by the parties as part of a cost
sharing arrangement, any recovery realized as a result of such litigation, after
reimbursement of any litigation expenses of LIFESCAN and CORVAS, shall belong to
the party who brought the action.
ARTICLE 7
REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1 CORPORATE POWER. Each party hereby represents and warrants that
such party is duly organized and validly existing under the laws of the state of
its incorporation and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof.
7.2 DUE AUTHORIZATION. Each party hereby represents and warrants
that such party is duly authorized to execute and deliver this Agreement and to
perform its obligations hereunder.
7.3 BINDING AGREEMENT. Each party hereby represents and warrants
that this Agreement is a legal and valid obligation binding upon it and is
enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement by such party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party
or by which it may be bound, nor violate any law or regulation of any court,
governmental body or administrative or other agency having authority over it.
7.4 OWNERSHIP OF CORVAS PATENT RIGHTS. CORVAS represents and
warrants that (a) CORVAS is the holder of all right, title and interest in and
to the CORVAS Patent Rights, (b) CORVAS has not granted any license under the
CORVAS Patent Rights and is under no obligation to grant any such license,
except to LIFESCAN and Ortho-Clinical Diagnostics, Inc., and (c) there are no
outstanding liens, encumbrances, agreements or understandings of any kind,
either written, oral or implied, regarding the CORVAS Patent Rights which are
inconsistent or in conflict with this Agreement.
7.5 DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, CORVAS DOES NOT MAKE ANY REPRESENTATION OR WARRANTY TO LIFESCAN OF
ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE CORVAS PATENT RIGHTS,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF NONINFRINGEMENT, MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
7.6 LIMITATION OF LIABILITY. NEITHER CORVAS NOR LIFESCAN SHALL BE
ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL
OR PUNITIVE DAMAGES IN CONNECTION WITH THE CORVAS PATENT RIGHTS OR THE LICENSE
GRANTED HEREUNDER.
5
<PAGE>
7.7 INDEMNIFICATION. LIFESCAN hereby agrees to indemnify, save,
defend and hold harmless CORVAS and its officers, directors, employees,
consultants and agents from and against any and all suits, claims, actions
demands, liabilities, expenses and losses, including reasonable legal expenses
and attorneys' fees ("Losses") arising directly or indirectly out of the
practice of the license granted hereunder, except to the extent such Losses
result from the gross negligence or the willful misconduct of CORVAS. In the
event CORVAS seeks indemnification under this Section 7.7, CORVAS shall inform
LIFESCAN of a claim as soon as reasonably practicable after CORVAS receives
notice of the claim, shall permit LIFESCAN to assume direction and control of
the defense of the claim (including the right to settle the claim solely for
monetary consideration), and shall cooperate as requested (at the expense of
LIFESCAN) in the defense of the claim.
ARTICLE 8
TERM; TERMINATION
8.1 TERM. This Agreement shall begin on the Effective Date and shall
end upon the expiration of the last to expire of the CORVAS Patent Rights (the
"Patent Expiration Date"), unless terminated earlier in accordance with the
terms of this Agreement (the "Term").
8.2 TERMINATION.
(a) Either party may terminate this Agreement prior to the
Patent Expiration Date upon or after the bankruptcy, insolvency, dissolution or
winding up of the other party (other than dissolution or winding up for the
purposes of reconstruction or amalgamation).
(b) The non-breaching party may terminate this Agreement prior
to the Patent Expiration Date upon or after the breach of any material provision
of this Agreement by the other party if the breaching party, has not cured such
breach within 60 days following written notice thereof by the non-breaching
party.
(c) Either party may terminate this Agreement prior to the
Patent Expiration Date upon or after LIFESCAN, its Affiliates and sublicensees
discontinue the marketing, sale, distribution and use of all Single-Test PT
Products that incorporate [***] following 60 days' written notice to the other
party.
(d) LIFESCAN may terminate this Agreement prior to the Patent
Expiration Date following written notice to CORVAS if (i) LIFESCAN has paid at
least [***] of cumulative royalties to CORVAS under this Agreement, or (ii) in
the event LIFESCAN has not paid at least [***] of cumulative royalties to
CORVAS under this Agreement, LIFESCAN pays CORVAS the difference between [***]
and the cumulative royalties actually paid to CORVAS to date.
8.3 EFFECT OF EXPIRATION OR TERMINATION.
(a) Upon termination of this Agreement by either party pursuant
to Section 8.2(a), all rights to the CORVAS Patent Rights under this Agreement
shall revert to CORVAS and all royalty obligations under Section 3.2 shall
terminate.
(b) Upon termination of this Agreement by either party pursuant
to Section 8.2(c), by CORVAS pursuant to Section 8.2(b) or by LIFESCAN pursuant
to Section 8.2(d), all rights to the CORVAS Patent Rights shall revert to
CORVAS, any and all sublicenses granted hereunder by LIFESCAN shall remain in
effect, but shall be assigned to CORVAS.
- ----------
***Confidential Treatment Requested.
6
<PAGE>
(c) Upon termination of this Agreement by LIFESCAN pursuant to
Section 8.2(b), the license granted under Section 2.1 shall remain in effect so
long as LIFESCAN does not breach its obligations to CORVAS under this Agreement,
and all royalty obligations under Section 3.2 shall terminate.
(d) Upon termination of this Agreement for any reason other than
by CORVAS pursuant to Section 8.2, LIFESCAN shall have the right for a period of
18 months following the date of termination to finish any work-in-process and to
dispose of any Single-Test PT Products in its possession or control; PROVIDED,
HOWEVER, LIFESCAN shall make all royalty payments to CORVAS relating to such
Single-Test PT Products as required under Section 3.2.
(e) Expiration or termination of this Agreement shall not
relieve the parties of any obligation accruing prior to such expiration or
termination. The provisions of Sections 4.3, 7.5, 7.6, 7.7 and 8.3 and Articles
1, 5 and 9 shall survive termination or expiration of this Agreement.
(f) Termination of this Agreement by a party pursuant to Section
8.2 shall not confer upon LIFESCAN any right to practice within the CORVAS
Patent Rights in the absence of a license to the CORVAS Patent Rights or other
such express authorization from CORVAS.
ARTICLE 9
MISCELLANEOUS
9.1 FORCE MAJEURE. Neither party shall be held liable or responsible
to the other party nor be deemed to have defaulted under or breached this
Agreement for failure or delay in fulfilling or performing any term of this
Agreement when such failure or delay is caused by or results from causes beyond
the reasonable control of the affected party, including, but not limited to,
fire, floods, embargoes, war, acts of war (whether war be declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or the other party.
9.2 ASSIGNMENT.
(a) Except as expressly provided hereunder, neither this
Agreement nor any rights or obligations hereunder may be assigned or otherwise
transferred by either party without the prior written consent of the other party
(which consent shall not be unreasonably withheld); PROVIDED, HOWEVER, that
either party may assign this Agreement and its rights and obligations hereunder
without the consent of the other party (i) in connection with the transfer or
sale of all or substantially all of the assets of such party to which this
Agreement pertains (for the avoidance of doubt, such assets shall consist of the
tangible and intangible property related to Single-Test PT Products for
monitoring or evaluating bleeding and/or clotting processes), (ii) in the event
of a merger or reorganization of such party with or into another party, or (iii)
to any Affiliate. Notwithstanding the foregoing, any such assignment to an
Affiliate shall not relieve the assigning party of its responsibilities for
performance of its obligations under this Agreement.
(b) The rights and obligations of the parties under this
Agreement shall be binding upon and inure to the benefit of the successors and
permitted assigns of the parties. Any assignment not in accordance with this
Agreement shall be void.
7
<PAGE>
9.3 PUBLICITY. The parties agree that neither party will originate
any press release or other public announcement, written or oral, or otherwise
make any disclosure relating to the existence or terms of or performance under
this Agreement without the prior written approval of the other party, except as
may otherwise be required by law, including compliance with securities laws (in
which case the disclosing party shall still consult with the other party prior
to such disclosure).
9.4 GOVERNING LAW AND ARBITRATION. All matters affecting the
interpretation, validity and performance of this Agreement shall be governed by
the laws of the State of California. Any and all disputes between the parties
relating in any way to the execution of this Agreement and/or the validity,
construction, meaning, enforceability, or performance of this Agreement or any
of its provisions, or the intent of the parties in entering into this Agreement,
or any dispute relating to patent validity or infringement arising under this
Agreement, shall be settled by arbitration. Such arbitration shall be conducted
in San Diego, California if initiated by LIFESCAN, or in San Francisco,
California if initiated by CORVAS, in accordance with the rules then pertaining
to the American Arbitration Association with a panel of three arbitrators. The
arbitrators shall be selected from the National Panel of Arbitrators of the
American Arbitration Association (the "AAA"). Each party shall select one
arbitrator and the two selected arbitrators shall select the third arbitrator.
If the two selected arbitrators cannot agree on a third arbitrator then the AAA
shall select the third arbitrator from the National Panel of Arbitrators.
Reasonable discovery as determined by the arbitrators shall apply to the
arbitration proceeding. The law of the State of New Jersey shall apply to the
arbitration proceedings. Judgment upon the award rendered by the arbitrators may
be entered in any court having jurisdiction thereof.
9.5 WAIVER. Except as specifically provided for herein, the waiver
from time to time by either of the parties of any of their rights or their
failure to exercise any remedy shall not operate or be construed as a continuing
waiver of the same rights or remedies or of any other of such party's rights or
remedies provided in this Agreement.
9.6 SEVERABILITY. If any term, covenant or condition of this
Agreement or the application thereof to any party or circumstance shall, to any
extent, be held to be invalid or unenforceable, then (a) the remainder of this
Agreement, or the application of such term, covenant or condition to parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (b) the parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith to provide a reasonably acceptable
alternative to the term, covenant or condition of this Agreement or the
application thereof that is invalid or unenforceable, it being the intent of the
parties that the basic purposes of this Agreement are to be effectuated.
9.7 ENTIRE AGREEMENT; AMENDMENT. This Agreement sets forth all of
the covenants, promises, agreements, warranties, representations, conditions and
understandings between the parties hereto with respect to the subject matter of
this Agreement, and supersedes and terminates all prior agreements and
understanding between the parties with respect to the subject matter of this
Agreement. There are no covenants, promises, agreements, warranties,
representations, conditions or understandings with respect to the subject matter
hereof, either oral or written, between the parties other than as set forth
herein. No subsequent alteration, amendment, change or addition to this
Agreement shall be binding upon the parties hereto unless reduced to writing and
signed by the respective authorized officers of the parties.
8
<PAGE>
9.8 RELATIONSHIP OF THE PARTIES. It is expressly agreed that CORVAS
and LIFESCAN shall be independent contractors and that the relationship between
the two parties shall not constitute a partnership, joint venture or agency of
any kind. Neither party shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall
be binding on the other, without the prior written authorization of the other
party.
9.9 NOTICES. Any notices or communications provided for in this
Agreement to be made by either of the parties to the other shall be in writing
and delivered personally or sent by United States mail, registered or
certified, postage paid, by overnight delivery service such as FedEx or UPS or
by facsimile, with confirmation of receipt, addressed as follows:
If to CORVAS: CORVAS INTERNATIONAL, INC.
3030 Science Park Road
San Diego, CA 92121
Attn: Corporate Secretary
Phone No. (619) 455-9800
Fax No. ( 619) 455-7895
If to LIFESCAN: David Van Avermaete
Executive Vice President
LifeScan, Inc.
1000 Gibraltar Drive
Milpitas, CA 95035-6312
Phone No. (408)942-3746
Fax No. (408) 942-8268
Either party may by like notice specify or change an address to which
notices and communications shall thereafter be sent. Notices sent by facsimile
shall be effective upon confirmation of receipt, notices sent by mail or
overnight delivery service shall be effective upon receipt, and notices given
personally shall be effective when delivered.
9.10 HEADINGS. The captions contained in this Agreement are not a
part of this Agreement, but are merely guides or labels to assist in locating
and reading the several Articles hereof.
9.11 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
CORVAS INTERNATIONAL, INC. LIFESCAN, INC.
/s/ RANDALL E. WOODS 11-6-98 /s/ DAVID VAN AVERMAETE 7-31-98
----------------------------- --------------------------------
Randall E. Woods David Van Avermaete
President and Chief Executive Officer Executive Vice President
LICENSE AGREEMENT
10
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A
---------
CORVAS PATENT RIGHTS
--------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Docket No. Title Serial Number Filing Date
Appl. Type (Inventor) PATENT NUMBER (Issue Date) Status
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[***] [***] 07/612,118 [***] [***]
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] 08/126,668 [***] [***]
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] 08/427,683 [***] [***]
- -----------------------------------------------------------------------------------------------------------------------------------
195/185 Tissue factor based prothrombin time reagent(Brown) 07/784,326 10-29-91 ISSUED PATENT
CIP US5,314,695 (5-24-94)
- -----------------------------------------------------------------------------------------------------------------------------------
195/185PCT [***] PCT [***] [***]
US91/08174
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] EPO [***] [***]
92901065
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] JPN [***] [***]
501271/1992
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] CAN [***] [***]
2096109
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
***Confidential Treatment Requested.
11
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Docket No. Title Serial Number Filing Date
Appl. Type (Inventor) PATENT NUMBER (Issue Date) Status
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[***] [***] AUS [***] [***]
90907/91
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] AUS [***] [***]
44489/96
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] FIN [***] [***]
932148
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] IRE [***] [***]
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] KOR [***] [***]
701454/93
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] MEX [***] [***]
- -----------------------------------------------------------------------------------------------------------------------------------
195/185NZ* Tissue factor based prothrombin time reagent(Brown) NZ240577 11-13-91 ISSUED PATENT
(NZ240577) (11-5-96)
- -----------------------------------------------------------------------------------------------------------------------------------
195/185-D1NZ Tissue factor based prothrombin time reagent(Brown) NZ264,556 - -94 ISSUED PATENT
DIV (NZ264,556) (11-6-96)
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] NOR [***] [***]
931708
- -----------------------------------------------------------------------------------------------------------------------------------
[***] [***] POR [***] [***]
99499
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Indicates application was filed directly in national patent office; not through
PCT.
- ----------
*** Confidential Treatment Requested.
12
EXHIBIT 10.69
AGREEMENT FOR CORVAS TO MAINTAIN ANTIBODY AGREEMENTS
WHEREAS, Corvas International, Inc. ("Corvas") and The Scripps Research
Institute (formerly Scripps Clinic and Research Foundation) ("Scripps") have
entered into that certain Research and License Agreement for Human Tissue Factor
for Diagnostic Purposes dated as of May 19, 1988, as amended (the "License
Agreement"), pursuant to which Scripps granted to Corvas an exclusive license to
certain patent rights, inventions and improvements to develop and commercialize
products directed toward IN VITRO diagnostic assays based on recombinant human
tissue factor and monoclonal antibodies to tissue factor for the IN VITRO
detection or measurement of tissue factor in a biological sample and/or an IN
VITRO diagnostic assay for coagulation Factor VIIa; and
WHEREAS, Corvas and Centocor, Inc. ("Centocor") have entered into that
certain Antibody and Option Agreement dated as of November 7, 1991, and a
subsequent letter agreement related thereto dated as of July 13, 1992 (the
"Antibody Agreements"), pursuant to which Corvas granted to Centocor a license
to certain antibodies, including monoclonal antibody TF8-5G9, which license
derived in part from rights licensed to Corvas under the License Agreement; and
WHEREAS, Corvas has assigned the License Agreement and all of its
rights and obligations thereunder to Ortho-Clinical Diagnostics, Inc. ("OCD"),
pursuant to Section 2.3 of that certain license agreement, made as of July 22,
1998, between Corvas and OCD related to the development and commercialization of
certain IN VITRO diagnostic assay products incorporating recombinant human
tissue factor; and
NOW, THEREFORE, in consideration of the premises and of the mutual
promises and covenants herein contained, the parties agree as follows:
1. OCD herein grants Corvas the right to maintain the Antibody
Agreements under the terms thereof as they relate to certain antibodies
initially licensed to Corvas under the License Agreement, including monoclonal
antibody TF8-5G9, for the IN VITRO detection or measurement of tissue factor in
a biological sample and/or in an IN VITRO diagnostic assay for coagulation
Factor VIIa.
2. Corvas herein accepts the maintenance of the Antibody Agreements as
they relate to certain antibodies initially licensed to Corvas under the License
Agreement as a sublicense under the License Agreement, and agrees to pay
Scripps, or as the case may be, cause its sublicensees to pay Scripps, the same
royalties on all Net Sales of the sublicensee the same as if said Net Sales had
been made by Corvas.
3. OCD herein acknowledges that Corvas currently has certain
anti-tissue factor antibodies in its inventory. OCD herein agrees that Corvas
may sell such inventory to a third party of its choice, and further, that Corvas
may make and use such antibodies for Corvas' own purposes.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective representatives thereunto duly authorized as of the day and
year first above written,
CORVAS INTERNATIONAL, INC. ORTHO-CLINICAL DIAGNOSTICS,INC.
BY: /s/RANDALL E. WOODS BY: /s/ GERARD VAILLANT
------------------- -------------------
NAME: RANDALL E. WOODS NAME: GERARD VAILLANT
---------------- ---------------
TITLE: PRESIDENT & CEO TITLE: COMPANY GROUP CHAIRMAN
--------------- ----------------------
<PAGE>
Exhibit 10.70
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.
THIS WARRANT IS VOID AFTER 5:00 P.M., SAN DIEGO TIME, ON FEBRUARY 1, 2002 OR
UPON EARLY TERMINATION AS PROVIDED IN SECTION 9 HEREOF.
WARRANT NO. __________
WARRANT TO PURCHASE
________ SHARES OF COMMON STOCK OF
CORVAS INTERNATIONAL, INC.
This certifies that __________________ (the "Holder"), or assigns, for
value received, is entitled to purchase from Corvas International, Inc., a
Delaware corporation (the "Company"), having a place of business at 3030 Science
Park Road, San Diego, CA 92121, ______________ fully paid and nonassessable
shares of the Company's Common Stock ("Common Stock") for cash at a price of six
dollars ($6.00) per share (the "Stock Purchase Price") at any time or from time
to time up to and including 5:00 p.m. (Pacific time) on the first to occur of
the Call Date (as defined in Section 9 hereof) or February 1, 2002 (such first
date to occur is hereinafter referred to as the "Expiration Date" and such
period is hereinafter referred to as the "Exercise Period"), upon surrender to
the Company at its principal office (or at such other location as the Company
may advise the Holder in writing) of this Warrant properly endorsed with the
Form of Subscription attached hereto duly filled in and signed and upon payment
in cash or by check, or by net exercise pursuant to Section 9.2 below, of the
aggregate Stock Purchase Price for the number of shares for which this Warrant
is being exercised determined in accordance with the provisions hereof. This
Warrant is issued in exchange for one of the Warrants issued pursuant to that
certain Stock and Warrant Purchase Agreement, dated as of February 2, 1996,
between the Company and certain investors named therein (the "Purchase
Agreement"). The Stock Purchase Price and the number of shares purchasable
hereunder are subject to adjustment as provided in Section 3 of this Warrant.
This Warrant is subject to the following terms and conditions:
1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES. This
Warrant is exercisable at the option of the holder of record hereof, at any time
or from time to time, up to the Expiration Date for all or any part of the
shares of Common Stock (but not for a fraction of a share) which may be
purchased hereunder. The Company agrees that the shares of Common Stock
purchased under this Warrant shall be and are deemed to be issued to the Holder
hereof as the record owner of such shares as of the close of business on the
date on which this Warrant shall have been surrendered, properly endorsed, the
completed, executed Form of Subscription
1.
<PAGE>
delivered and payment made for such shares. Certificates for the shares of
Common Stock so purchased, together with any other securities or property to
which the Holder hereof is entitled upon such exercise, shall be delivered to
the Holder hereof by the Company at the Company's expense within a reasonable
time after the rights represented by this Warrant have been so exercised. In
case of a purchase of less than all the shares which may be purchased under this
Warrant, the Company shall cancel this Warrant and execute and deliver a new
Warrant or Warrants of like tenor for the balance of the shares purchasable
under the Warrant surrendered upon such purchase to the Holder hereof within a
reasonable time. Each stock certificate so delivered shall be in such
denominations of Common Stock as may be requested by the Holder hereof and shall
be registered in the name of such Holder.
2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company
covenants and agrees that all shares of Common Stock which may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any stockholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees that
during the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized and reserved, for the
purpose of issue or transfer upon exercise of the subscription rights evidenced
by this Warrant, a sufficient number of shares of authorized but unissued Common
Stock, or other securities and property, when and as required to provide for the
exercise of the rights represented by this Warrant. The Company will take all
such action as may be necessary to assure that such shares of Common Stock may
be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of any domestic securities exchange upon
which the Common Stock may be listed; PROVIDED, HOWEVER, that the Company shall
not be required to effect a registration under Federal or State securities laws
with respect to such exercise (except as contemplated by the Purchase
Agreement). The Company will not take any action which would result in any
adjustment of the Stock Purchase Price (as adjusted under Section 3 hereof) if
the total number of shares of Common Stock issuable after such action upon
exercise of all outstanding warrants, together with all shares of Common Stock
then outstanding and all shares of Common Stock then issuable upon exercise of
all options and upon the conversion of all convertible securities then
outstanding, would exceed the total number of shares of Common Stock then
authorized by the Company's Certificate of Incorporation.
3. ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
3.1 SUBDIVISION OR COMBINATION OF STOCK. In case the Company
shall at any time after August 24, 1998 (the "Original Warrant Issue Date")
subdivide its outstanding shares of Common Stock into a greater number of
shares, the Stock Purchase Price in effect
2.
<PAGE>
immediately prior to such subdivision shall be proportionately reduced, and
conversely, in case the outstanding shares of Common Stock of the Company shall
be combined into a smaller number of shares, the Stock Purchase Price in effect
immediately prior to such combination shall be proportionately increased.
3.2 DIVIDENDS IN COMMON STOCK, OTHER STOCK, PROPERTY,
RECLASSIFICATION. If at any time or from time to time the Holders of Common
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,
(a) Common Stock or any shares of stock or other
securities which are at any time directly or indirectly convertible into or
exchangeable for Common Stock, or any rights or options to subscribe for,
purchase or otherwise acquire any of the foregoing by way of dividend or other
distribution,
(b) any cash paid or payable otherwise than as a cash
dividend, or
(c) Common Stock or additional stock or other
securities or property (including cash) by way of spinoff, split-up,
reclassification, combination of shares or similar corporate rearrangement,
(other than (i) shares of Common Stock issued as a stock split, adjustments in
respect of which shall be covered by the terms of Section 3.1 above or (ii) an
event for which adjustment is otherwise made pursuant to Section 3.3 below),
then and in each such case, the Holder hereof shall, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of shares of Common
Stock receivable thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property (including cash
in the cases referred to in clauses (b) and (c) above) which such Holder would
hold on the date of such exercise had he been the holder of record of such
Common Stock as of the date on which holders of Common Stock received or became
entitled to receive such shares or all other additional stock and other
securities and property.
3.3 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE. If any capital reorganization of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation shall be effected
in such a way that holders of Common Stock shall be entitled to receive stock,
securities, or other assets or property, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provisions shall be made whereby the holder hereof shall thereafter
have the right to purchase and receive (in lieu of the shares of the Common
Stock of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby) such shares of stock, securities or
other assets (including cash) or property as may be issued or payable with
respect to or in exchange for a number of outstanding shares of such Common
Stock equal to the number of shares of such stock immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby.
In any reorganization described above, appropriate provision shall be made with
respect to the rights and interests of the Holder of this Warrant to the end
that the provisions hereof (including, without limitation, provisions for
adjustments of the Stock Purchase Price and of the number of shares purchasable
and receivable upon the exercise of this Warrant) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock,
3.
<PAGE>
securities or assets thereafter deliverable upon the exercise hereof (including
an immediate adjustment, by reason of such reorganization or reclassification,
of the Stock Purchase Price to the value for the Common Stock reflected by the
terms of such reorganization or reclassification if the value so reflected is
less than the Stock Purchase Price in effect immediately prior to such
reorganization or reclassification). In the event of a merger or consolidation
of the Company as a result of which a greater or lesser number of shares of
common stock of the surviving corporation are issuable to holders of Common
Stock of the Company outstanding immediately prior to such merger or
consolidation, the Stock Purchase Price in effect immediately prior to such
merger or consolidation shall be adjusted in the same manner as though there
were a subdivision or combination of the outstanding shares of Common Stock of
the Company. The Company will not effect any such consolidation, merger or sale
unless, prior to the consummation thereof, the successor corporation (if other
than the Company) resulting from such consolidation or the corporation
purchasing such assets shall assume by written instrument, executed and mailed
or delivered to the registered Holder hereof at the last address of such Holder
appearing on the books of the Company, the obligation to deliver to such Holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such Holder may be entitled to purchase.
3.4 ISSUANCE OF ADDITIONAL SHARES. The Stock Purchase Price in
effect from time to time shall be subject to adjustment upon the issuance of
Common Stock or Convertible Securities (as hereinafter defined) so long as any
Warrants are then issued and outstanding.
(a) SPECIAL DEFINITIONS. For purposes of this Section
3.4, the following definitions shall apply:
(i) "Option" shall mean contractual rights,
options or warrants to subscribe for, purchase or otherwise acquire either
Common Stock or Convertible Securities.
(ii) "Warrants" shall mean, collectively,
this Warrant and the other warrants issued on the Original Warrant Issue Date in
connection with the transaction with respect to which this Warrant was issued.
(iii) "Convertible Securities" shall mean
any evidences of indebtedness, shares (other than Common Stock and Warrants) or
other securities directly or indirectly convertible into or exchangeable for
Common Stock.
(iv) "Additional Shares of Common Stock"
shall mean all shares of Common Stock issued (or, pursuant to Section 3.4(c),
deemed to be issued) by the Company after the Original Warrant Issue Date, other
than shares of Common Stock issued or issuable:
(1) pursuant to Options, Warrants or
Convertible Securities outstanding on the Original Warrant Issue Date;
(2) to directors, officers or
employees of, or consultants to, the Company pursuant to any plan or agreement
approved by the Board of Directors, subject to adjustment for all subdivisions
and combinations;
4.
<PAGE>
(3) upon any event for which
adjustment is made pursuant to Section 3 hereof;
(4) by way of dividend or other
distribution on shares excluded from the definition of Additional Shares of
Common Stock by the foregoing clauses (i), (ii) or (iii) or this clause (iv) or
on shares of Common Stock so excluded;
(5) pursuant to any equipment leasing,
borrowing or similar transaction approved by the Board of Directors; provided,
however, that for the period commencing on the Original Warrant Issue Date and
ending February 2, 1999, shares issued or issuable pursuant to such transactions
shall not exceed a number equal to five percent (5%) of the then issued and
outstanding Common Stock; or
(6) in connection with any transaction
approved by the written consent of the holders of the Warrants representing at
least two-thirds of Common Stock then issuable upon exercise of the Warrants and
the warrants issued pursuant to the Purchase Agreement.
(b) NO ADJUSTMENT OF STOCK PURCHASE PRICE. No
adjustment of the Stock Purchase Price shall be made in respect of the issuance
of Additional Shares of Common Stock unless the consideration per share for an
Additional Share of Common Stock issued or deemed to be issued by the Company is
less than the Stock Purchase Price in effect on the date of the issue of such
Additional Shares.
(c) ISSUANCE OF SECURITIES DEEMED TO BE AN ISSUANCE OF
ADDITIONAL SHARES OF COMMON STOCK.
(i) In the event the Company at any time or
from time to time after the Original Warrant Issue Date shall issue any Options
or Convertible Securities or shall fix a record date for the determination of
holders of any class of securities entitled to receive any such Options or
Convertible Securities, then the maximum number of shares (as set forth in the
instrument relating thereto without regard to any provisions contained therein
for a subsequent adjustment of such number) of Common Stock issuable upon the
exercise of such Options or, in the case of Convertible Securities and Options
therefor, the conversion or exchange of such Convertible Securities, shall be
deemed to be Additional Shares of Common Stock issued as of the time of such
issue or, in case such a record date shall have been fixed, as of the close of
business on such record date, provided that in any such case in which Additional
Shares of Common Stock are deemed to be issued:
(1) no further adjustment in the Stock
Purchase Price shall be made upon the subsequent issue of Convertible Securities
or shares of Common Stock upon the exercise of such Options or conversion or
exchange of such Convertible Securities;
(2) if such Options or Convertible
Securities by their terms provide, with the passage of time or otherwise, for
any increase or decrease in the consideration payable to the Company or in the
number of shares of Common Stock issuable upon the exercise, conversion or
exchange thereof, the applicable Stock Purchase Price
5.
<PAGE>
computed upon the original issue thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments based thereon, shall,
upon any such increase or decrease becoming effective, be recomputed to reflect
such increase or decrease insofar as it affects such Options or the rights of
conversion or exchange under such Convertible Securities;
(3) upon the expiration of any such
Options or any rights of conversion or exchange under such Convertible
Securities which shall not have been exercised, the Stock Purchase Price
computed upon the original issue thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments based thereon, shall,
upon such expiration, be recomputed as if:
a. in the case of Convertible
Securities or Options for Common Stock, the only Additional Shares of Common
Stock issued were the shares of Common Stock, if any, actually issued upon the
exercise of such Options or conversion or exchange of such Convertible
Securities and the consideration received therefor was the consideration
actually received by the Company for the issue of all such Options, whether or
not exercised, plus the consideration actually received by the Company upon such
exercise, or for the issue of all such Convertible Securities which were
actually converted or exchanged, plus the additional consideration, if any,
actually received by the Company upon such conversion or exchange, and
b. in the case of Options for
Convertible Securities, only the Convertible Securities, if any, actually issued
upon the exercise thereof were issued at the time of issue of such Options, and
the consideration received by the Company for the Additional Shares of Common
Stock actually deemed to have been then issued was the consideration actually
received by the Company for the issue of all such Options, whether or not
exercised, plus the consideration actually received by the Company upon the
issue of the Convertible Securities with respect to which such Options were
actually exercised.
(ii) No readjustment pursuant to clause (3)
above shall have the effect of increasing the Stock Purchase Price to an amount
which exceeds the lower of (x) such Stock Purchase Price on the original
adjustment date, or (y) such Stock Purchase Price that would have resulted from
any issuance of Additional Shares of Common Stock between the original
adjustment date and such readjustment date.
(iii) In the case of any Options which expire
by their terms not more than 30 days after the date of issue thereof, no
adjustment of the Stock Purchase Price shall be made until the expiration or
exercise of all such Options; provided, however, that this clause (iii) shall
not apply to Options that are issued within 30 days of a transaction described
under Section 3.4(c)(i) hereof.
(d) ADJUSTMENT OF STOCK PURCHASE PRICE UPON ISSUANCE
OF ADDITIONAL SHARES OF COMMON STOCK. In the event this Company shall issue
Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Section 3.4(c)) without consideration or for a
consideration per share less than the Stock Purchase Price in effect on the date
of such issue, then and in such event, such Stock Purchase Price, as applicable,
shall be reduced, concurrently with such issue, to a price (calculated to the
nearest cent) determined by multiplying the Stock Purchase Price by a fraction:
6.
<PAGE>
(i) the numerator of which shall be (i) the
number of shares of Common Stock outstanding immediately prior to the issuance
of such Additional Shares of Common Stock (calculated on a fully diluted basis
assuming the exercise or conversion of all Options, Warrants or Convertible
Securities which are exercisable or convertible at the time such calculation is
being made), plus (ii) the number of shares of Common Stock which the net
aggregate consideration, if any, received by the Company for the total number of
such Additional Shares of Common Stock so issued would purchase at the Stock
Purchase Price in effect immediately prior to such issuance, and
(ii) the denominator of which shall be (iii)
the number of shares of Common Stock outstanding immediately prior to the
issuance of such Additional Shares of Common Stock (calculated on a fully
diluted basis assuming the exercise or conversion of all Options, Warrants or
Convertible Securities which are exercisable or convertible at the time such
calculation is being made), plus (iv) the number of such Additional Shares of
Common Stock so issued.
(e) DETERMINATION OF CONSIDERATION. For purposes of
this Section 3.4, the consideration received by the Company for the issue of any
Additional Shares of Common Stock shall be computed as follows:
(i) CASH AND PROPERTY. Such consideration
shall:
(1) insofar as it consists of cash, be
computed at the aggregate amount of cash received by the Company excluding
amounts paid or payable for accrued interest or accrued dividends;
(2) insofar as it consists of property
other than cash, be computed at the fair value thereof at the time of such
issue, as determined in good faith by the Board of Directors; and
(3) in the event Additional Shares of
Common Stock are issued together with other shares or securities or other assets
of the Company for consideration which covers both, be the proportion of such
consideration so received, computed as provided in clauses (1) and (2) above, as
determined in good faith by the Board of Directors.
(ii) OPTIONS AND CONVERTIBLE SECURITIES. The
consideration per share received by the Company for Additional Shares of Common
Stock deemed to have been issued pursuant to Section 3.4(c)(i), relating to
Options and Convertible Securities, shall be determined by dividing:
(1) the total amount, if any, received
or receivable by the Company as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the Company upon the exercise of such Options or the
conversion or exchange of such Convertible Securities, or in the case of Options
for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities, by
7.
<PAGE>
(2) the maximum number of shares of
Common Stock (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such number)
issuable upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.
3.5 NOTICE OF ADJUSTMENT. Upon any adjustment of the Stock
Purchase Price or any increase or decrease in the number of shares purchasable
upon the exercise of this Warrant, the Company shall give written notice
thereof, by first class mail, postage prepaid, addressed to the registered
Holder of this Warrant at the address of such Holder as shown on the books of
the Company. The notice shall be signed by the Company's chief executive officer
and shall state the Stock Purchase Price resulting from such adjustment and the
increase or decrease, if any, in the number of shares purchasable at such price
upon the exercise of this Warrant, setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is based.
3.6 OTHER NOTICES. If at any time:
(a) the Company shall declare any cash dividend upon
its Common Stock;
(b) the Company shall declare any dividend upon its
Common Stock payable in stock or make any special dividend or other distribution
to the holders of its Common Stock;
(c) the Company shall offer for subscription pro rata
to the holders of its Common Stock any additional shares of stock of any class
or other rights;
(d) there shall be any capital reorganization or
reclassification of the capital stock of the Company; or consolidation or merger
of the Company with, or sale of all or substantially all of its assets to,
another corporation; or
(e) there shall be a voluntary or involuntary
dissolution, liquidation or winding-up of the Company;
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the Holder of this Warrant at the address of
such Holder as shown on the books of the Company, (i) at least twenty (20) days'
prior written notice of the date on which the books of the Company shall close
or a record shall be taken for such dividend, distribution or subscription
rights or for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, and (ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, at least
twenty (20) days' prior written notice of the date when the same shall take
place. Any notice given in accordance with the foregoing clause (i) shall also
specify, in the case of any such dividend, distribution or subscription rights,
the date on which the holders of Common Stock shall be entitled thereto. Any
notice given in accordance with the foregoing clause (ii) shall also specify the
date on which the holders of Common Stock shall be entitled to exchange their
Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding-up or conversion, as the case may be.
8.
<PAGE>
3.7 CERTAIN EVENTS. If any change in the outstanding Common
Stock of the Company or any other event occurs as to which the other provisions
of this Section 3 are not strictly applicable or if strictly applicable, would
not fairly protect the purchase rights of the Holder of the Warrant in
accordance with such provisions, then the Board of Directors of the Company
shall in good faith make an adjustment in the number and class of shares
available under the Warrant, the Stock Purchase Price or the application of such
provisions, so as to protect such purchase rights as aforesaid. The adjustment
shall be such as will give the Holder of the Warrant upon exercise for the same
aggregate Stock Purchase Price the total number, class and kind of shares as he
would have owned had the Warrant been exercised prior to the event and had he
continued to hold such shares until after the event requiring adjustment.
4. ISSUE TAX. The issuance of certificates for shares of Common Stock
upon the exercise of the Warrant shall be made without charge to the Holder of
the Warrant for any issue tax (other than any applicable income taxes) in
respect thereof; PROVIDED, HOWEVER, that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the then
Holder of the Warrant being exercised.
5. CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of any warrant or of any shares of Common Stock
issued or issuable upon the exercise of any warrant in any manner which
interferes with the timely exercise of this Warrant.
6. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing
contained in this Warrant shall be construed as conferring upon the holder
hereof the right to vote or to consent or to receive notice as a stockholder of
the Company or any other matters or any rights whatsoever as a stockholder of
the Company. No dividends or interest shall be payable or accrued in respect of
this Warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised. No provisions hereof, in the absence of affirmative action by the
holder to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder hereof, shall give rise to any liability of
such holder for the Stock Purchase Price or as a stockholder of the Company,
whether such liability is asserted by the Company or by its creditors.
7. WARRANT TRANSFERABLE. Subject to compliance with applicable federal
and state securities laws, this Warrant and all rights hereunder are
transferable, in whole or in part, without charge to the holder hereof (except
for transfer taxes), upon surrender of this Warrant properly endorsed; provided,
however, that no transfer of rights hereunder to purchase less than 25,000
shares of Common Stock shall be effective without the prior written consent of
the Company and any such purported transfer without the Company's consent shall
be void. Subject to the foregoing restrictions, each taker and holder of this
Warrant, by taking or holding the same, consents and agrees that this Warrant,
when endorsed in blank, shall be deemed negotiable, and that the holder hereof,
when this Warrant shall have been so endorsed, may be treated by the Company, at
the Company's option, and all other persons dealing with this Warrant as the
absolute owner hereof for any purpose and as the person entitled to exercise the
rights represented by this Warrant, or to the transfer hereof on the books of
the Company any notice to the contrary notwithstanding; but until such transfer
on such books, the Company may treat the registered owner hereof as the owner
for all purposes.
9.
<PAGE>
8. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights and
obligations of the Company, of the holder of this Warrant and of the holder of
shares of Common Stock issued upon exercise of this Warrant, referred to in
Section 7 shall survive the exercise of this Warrant.
9. CALL OF WARRANT; EARLY TERMINATION.
9.1 GENERAL. This Warrant may be called by the Company at any
time after the closing sales price of the Company's Common Stock as reported on
the Nasdaq National Market for each trading day during any ninety (90) trading
day period exceeds $15.00 per share (subject to adjustment for stock splits,
stock dividends or reorganizations) during the Exercise Period. The Company may
thereafter exercise its right to call this Warrant by providing written notice
to the Holder of this Warrant, by first class mail, postage prepaid, addressed
to the Holder at the address of such Holder as shown on the books of the
Company, at least ten (10) days' prior to the day specified by the Company for
termination of this Warrant (the "Call Date"). Such notice shall specify the
Call Date and shall summarize the procedures for exercise of this Warrant prior
to the Call Date. If the Company elects to call this Warrant pursuant to this
Section 9.1, the Company must call the entire Warrant. This Warrant shall
terminate at 5:00 p.m. (Pacific Time) on the Call Date; and upon such
termination, the Holder shall have no further rights hereunder.
9.2 NET EXERCISE. In the event that this Warrant is called
pursuant to Section 9.1 at any time after August 24, 1999, in lieu of exercising
this Warrant by payment of cash, the Holder may elect to receive shares equal to
the value (as determined below) of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Form of Subscription and notice of such
election in which event the Company shall issue to the Holder a number of shares
of Common Stock computed using the following formula:
X = Y (A - B)
---------
A
Where X = the number of shares of Common Stock
to be issued to the Holder
Y = the number of shares of Common Stock
purchasable under the Warrant or, if only a
portion of the Warrant is being exercised,
the portion of the Warrant being canceled
(at the date of such calculation)
A = the fair market value of one share of
the Company's Common Stock (at the date of
such calculation)
B = Stock Purchase Price (as adjusted to the
date of such calculation)
10.
<PAGE>
For the purposes of this Section 9, the fair market value of one share of
Common Stock shall be (a) two times the Stock Purchase Price during the first
and second years of the Exercise Period and (b) three times the Stock Purchase
Price during the third through sixth years of the Exercise Period. This net
exercise provision shall not be available in the event of any Call Date prior to
August 24, 1999.
10. MODIFICATION AND WAIVER. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
11. NOTICES. Any notice, request or other document required or
permitted to be given or delivered to the holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to each such
holder at its address as shown on the books of the Company or to the Company at
the address indicated therefor in the first paragraph of this Warrant or such
other address as either may from time to time provide to the other.
12. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company's assets. All of the obligations of
the Company relating to the Common Stock issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant. All of the
covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the holder hereof.
13. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings
of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. The corporate law
of the State of Delaware shall govern all issues concerning the relative rights
of the Company and the Holder. All other questions concerning the construction,
validity and interpretation of this Warrant shall be construed and interpreted
according to the law of the State of California, without giving effect to its
conflict of law provisions.
14. LOST WARRANTS. The Company represents and warrants to the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.
15. FRACTIONAL SHARES. No fractional shares shall be issued upon
exercise of this Warrant. The Company shall, in lieu of issuing any fractional
share, pay the holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the then effective Stock Purchase Price.
11.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized this 3rd day of August,
1998.
CORVAS INTERNATIONAL, INC.
By: /s/ RANDALL E. WOODS
--------------------
RANDALL E. WOODS
President and Chief Executive Officer
Attest:
/s/ JEAN S. ELLIS
- -----------------------------------
Jean S. Ellis, Corporate Secretary
<PAGE>
EXHIBIT A
FORM OF SUBSCRIPTION
Date: _________________
Corvas International, Inc.
3030 Science Park Road
San Diego, CA 92121
Attn: Chief Executive Officer
Ladies and Gentlemen:
The undersigned hereby elects to exercise the warrant issued to it by
Corvas International, Inc. (the "Company") and dated _________________,
1998 (the "Warrant") and to purchase thereunder
__________________________________ shares of the Common Stock of the
Company (the "Shares") at a purchase price of _________ Dollars ($____)
per Share or an aggregate purchase price of
__________________________________ Dollars ($__________) (the "Purchase
Price").
Pursuant to the terms of the Warrant the undersigned has delivered the
Stock Purchase Price herewith in full in cash or by certified check or wire
transfer.
Very truly yours,
_________________________________
By ______________________________
Title ___________________________
A-1.
<PAGE>
EXHIBIT B
FORM OF ASSIGNMENT
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to:
________________________________________________________________________________
whose address is: ______________________________________________________________
Dated:___________________________________________
Holder's Signature:______________________________
Holder's Address:________________________________
Signature Guaranteed:___________________________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the fact of the Warrant, without alteration or enlargement or any
change whatever, and must be guaranteed by a bank or trust company. Officers of
corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
B-1.
<PAGE>
Exhibit 10.71
[LETTERHEAD OF SCHERING CORPORATION]
October 12, 1998
VIA AIRBORNE EXPRESS
Corvas International, Inc.
3030 Science Park Road
San Diego, California 92121
Attention: Corporate Secretary
Gentlemen:
This letter is sent with reference to the agreement by and between Corvas
International, Inc. ("Corvas") and Schering Corporation and Schering-Plough Ltd.
(collectively, "Schering"), dated December 14, 1994 (the "Agreement"). Terms
with initial capitals which are not specifically defined herein shall have the
defined meaning set forth in the Agreement. The terms of this letter are
effective as of August 14, 1998 (the "Termination Effective Date"). The
undersigned parties agree as follows:
1. Corvas waives the one hundred eighty (180) days prior written notice set
forth in Paragraph 7.4 of the Agreement and Schering agrees to the waiver and
hereby notifies Corvas of termination of the Thrombin Research Program as of
the Termination Effective Date. Schering confirms that termination of the
Thrombin Research Program is pursuant to Paragraphs 7.2 and 7.4 of the
Agreement and not pursuant to Paragraph 2.18 thereof.
2. Except as specifically set forth in Section 4 below, Schering acknowledges
and agrees that termination of the Thrombin Research Program terminates
Schering's licenses to Program Thrombin Inhibitor Patent Rights, Other Patent
Rights (only as set forth in Part I of Exhibit B to the Agreement) and Program
Thrombin Inhibitor Know-How. In addition, Schering acknowledges and agrees that
all rights to Program Thrombin Inhibitors, Licensed Compounds relating to
Program Thrombin Inhibitors (i.e. CVS 2044) and Licensed Combinations,.
including intellectual property rights thereto, revert to Corvas as of the
Termination Effective Date.
3. Corvas acknowledges and agrees that termination of the Thrombin Research
Program terminates any obligations Schering may have to prosecute
<PAGE>
Corvas International, Inc. -2- October 12, 1998
and maintain any patent(s) relating to any Program Thrombin Inhibitor,
including, but not limited to, any Program Thrombin Inhibitor Patent Rights and
any Other Patent Rights listed on Part I of Exhibit B to the Agreement.
4. Notwithstanding anything to the contrary herein, the parties hereto
acknowledge and agree that the Agreement is not terminated with respect to any
Program Thrombin Inhibitor conceived by Schering on or after the Termination
Effective Date that meets the definition of Program Thrombin Inhibitor set
forth in Paragraph 1.30 part (iii) of the Agreement.
5. Schering acknowledges and agrees that as of the Termination Effective Date
Schering's rights to Other Patent Rights identified in Part I of Exhibit B and
Schering's rights to Other Compounds (but only those related to the Other
Patent Rights identified in Part I of Exhibit B) shall terminate.
6. Schering believes that over the course of the collaboration it has provided
Corvas the types of information within Schering Technology for Corvas to review
and determine whether Corvas chooses to request a license to Schering
Technology pursuant to Paragraph 7.8 of the Agreement. Accordingly, it is
Corvas' responsibility to request a license to such Schering Technology. Please
advise Schering of Corvas' intent. Attached to this letter as Exhibit 1 is an
inventory list of the Corvas Licensed Compounds that are in Schering's
possession as of the Termination Effective Date. In addition, Exhibit 2 to this
letter is a memorandum supplied by a Schering process development scientist (D.
Tsai to R. Ress dated 10/1/98) specifically related to CVS 2044. If Corvas
desires to have any Licensed Compounds transferred, please contact Richard
Chipkin, Ph.D. at (908) 298-4414 to discuss the terms of such transfer.
7. Schering hereby confirms that Schering has granted no sublicenses under the
Program Thrombin Inhibitor Patent Rights to any Affiliated or third party.
8. Schering acknowledges and agrees that Corvas has the right to disclose to
third parties Corvas information related to the terminated Thrombin Research
Program. In addition, Schering agrees that Corvas may disclose information
related to the terminated Thrombin Research Program that was disclosed by
Corvas to Schering, PROVIDED, HOWEVER, that such disclosure(s) are subject to
customary written agreements governing confidentiality and nonuse.
9. Schering acknowledges and agrees that Schering's rights to "Corvas Thrombin
Inhibitors" (as defined in the December 16, 1996 letter agreement between the
parties hereto) shall terminate as of the Termination Effective Date.
10. Schering and Corvas each acknowledge and agree that as of the Termination
Effective Date there will be no further "supplementary thrombin
<PAGE>
Corvas International, Inc. -3- October 12, 1998
inhibitor research" or "New Thrombin Research", as both terms are defined in the
December 16, 1996 letter agreement between the parties hereto.
11. This letter agreement, to the extent set forth herein, amends, modifies and
supplements the Agreement. Except as expressly modified herein, all of the
terms and provisions of the Agreement remain in full force and effect and cannot
be amended, modified or changed in any way whatsoever except by a written
instrument duly executed by the parties hereto. The parties hereto expressly
acknowledge the applicability of Paragraph 7.2 of the Agreement ("Divisible
Agreement") and Paragraph 10.8 of the Agreement ("Survival of Terms") and the
parties confirm that the provisions of the Agreement relating to the Factor Xa
Research Program remain in full force and effect and are not affected by
termination of the Thrombin Research Program.
If the foregoing meets with your approval, please sign both copies of
this letter in the place indicated below and return one fully executed copy of
this letter to the above address. Please retain the other fully executed copy in
your files.
SCHERING-PLOUGH, LTD. SCHERING CORPORATION
By: /s/ DAVID POORVIN By: /s/ DAVID POORVIN
------------------------- --------------------
Date: October 12, 1998 Date: October 12, 1998
---------------- ----------------
AGREED AND ACCEPTED
CORVAS INTERNATIONAL, INC.
By: /s/ RANDALL E. WOODS
-------------------------
Date: October 16, 1998
-------------------
cc: Randy Woods
Cooley Godward Castro Huddleson Tatum
<PAGE>
Exhibit 10.72
FIRST AMENDMENT TO
------------------
AMENDED AND RESTATED SECURED PROMISSORY NOTE
--------------------------------------------
Corvas International, Inc., a Delaware corporation having a principal
place of business at 3030 Science Park Rd., San Diego, CA 92121 ("Lender") and
Randall E. Woods and Nancy Saint Woods, a married couple residing in the State
of California (collectively and separately "Borrower"), enter into this First
Amendment effective as of September 17, 1998.
I. BACKGROUND
-------------
1.1 Randall E. Woods and Lender are parties to an Amended and Restated
Secured Promissory Note, having a date of August 28, 1997 ("Amended Note"),
which is appended hereto as Appendix I, and which relates, in part, to the grant
of a security interest in all of Mr. Woods' right, title and interest in the
Lawsuit (Case No. N075230).
1.2 As approved by resolution of the Board of Directors of Lender
("Board") at its Board Meeting held October 6, 1998, Lender and Mr. Woods each
desires to amend and restate the Amended Note pursuant to the terms expressly
stated herein. More specifically, the parties wish to amend the Amended Note to
a) recognize that right, title and interest in the Lawsuit may be jointly owned
by Randall E. Woods and Nancy Saint Woods, pursuant to community property laws
of the State of California, b) recognize a change in identification of the
lawsuit, and c) recognize the Board's instruction that one aspect of the final
maturity date of the Note be extended.
1.3 All capitalized terms not defined, or redefined via amendment, in
this First Amendment, are as defined in the Amended Note.
II. AMENDMENT TO DEFINITION OF BORROWER
---------------------------------------
2.1 Section A of the Amended Note defines "Borrower" to be Randall E.
Woods, an individual residing in the State of California.
2.2 The definition of Borrower in the Amended Note is hereby amended
to be Randall E. Woods and Nancy Saint Woods, a married couple residing in the
State of California.
III. AMENDMENT TO LAWSUIT IDENTIFICATION
----------------------------------------
3.1 Section D of the Amended Note is hereby amended to delete "Case
No. N075230", and to state in its place "Case No. N0724356".
<PAGE>
IV. AMENDMENT TO MATURITY DATE
------------------------------
4.1 A new Section F is added to the Amended Note, immediately
following Section E:
F. As approved by resolution of the Board of Directors of
Lender at its Board meeting held October 6, 1998, Borrower and Lender each
desires to amend and restate in its entirety the Amended Note to provide that
the final maturity date of the Note, as defined therein, is extended to the
earliest of (i) August 28, 1999, (ii) the settlement or other final
determination of the Lawsuit and (iii) the date which is ninety days after any
termination of employment of Mr. Woods with Lender for any reason or no reason
(with or without cause) and (b) to provide for the grant of a security interest
in all of Borrower's right, title and interest in the Lawsuit and the proceeds
thereof to secure the repayment of principal under this Note and the payment of
all costs incurred by Lender pursuant to the enforcement of Lender's rights
under this Note and the performance of all other obligations under this Note by
Borrower.
4.2 Section 1 of the Amended Note is hereby amended to a) delete
"September 18, 1998", and to state in its place "August 28, 1999", and b) to
delete "Borrower", and to state in its place "Mr. Woods".
V. ADDITIONAL AMENDMENTS
------------------------
5.1 Section 3 of the Amended Note is hereby amended to delete the
first sentence of Section 3 in its entirety, and to state in its place:
"In order to secure the prompt and complete payment and
performance of all obligations of borrower under this Note,
including, without limitation, the repayment of principal and the
reimbursement of all costs of enforcing any of Lender's rights
under this Note (including, without limitation, reasonable
attorneys' fees, disbursements, costs and other expenses),
Borrower hereby grants to Lender a security interest in all of
Borrower's right, title and interest in the lawsuit filed by
Borrower in the Superior Court of the State of California for the
County of San Diego, North County Judicial District, known as Case
No. N0724356 and the proceeds thereof (the "Collateral").
5.2 Pursuant to Section 3, a UCC-1 Financing Statement has been
executed by Borrower, and is attached hereto as Appendix II.
5.3 Section 4 of the Amended Note, item (3), is hereby amended to
delete "Borrower" and to state in its place "both Borrowers".
<PAGE>
Other than expressly amended and stated herein, no other aspect of the
Amended Note is altered by this First Amendment. Agreement to the foregoing is
acknowledged by the signatures below:
/s/ RANDALL E. WOODS NOVEMBER 10, 1998
- --------------------------- -----------------
Randall E. Woods Date
/s/ NANCY SAINT WOODS NOVEMBER 10, 1998
- --------------------------- -----------------
Nancy Saint Woods Date
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 1,188
<SECURITIES> 19,020
<RECEIVABLES> 413
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 20,935
<PP&E> 5,304
<DEPRECIATION> 3,693
<TOTAL-ASSETS> 22,546
<CURRENT-LIABILITIES> 2,357
<BONDS> 0
0
1
<COMMON> 15
<OTHER-SE> 20,173
<TOTAL-LIABILITY-AND-EQUITY> 22,546
<SALES> 43
<TOTAL-REVENUES> 7,402
<CGS> 18
<TOTAL-COSTS> 14,580
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (6,258)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,258)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,258)
<EPS-PRIMARY> (.44)
<EPS-DILUTED> (.44)
</TABLE>
