CORVAS INTERNATIONAL, INC.
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (the "Agreement") is entered into
as of August 18, 1999, by and among CORVAS INTERNATIONAL, INC., a Delaware
corporation (the "Company") and the entities whose names are set forth on the
Schedule of Purchasers attached hereto as EXHIBIT A (which entity is hereinafter
referred to as the "Purchaser" or collectively as the "Purchasers").
RECITALS
WHEREAS, the Company has authorized the sale and issuance of an
aggregate of one million three hundred thousand (1,300,000) shares of its Common
Stock, $0.001 par value (the "Shares");
WHEREAS, the Company has also authorized the sale of up to $10,000,000
Convertible Senior Subordinated Notes (the "Convertible Notes") to Artisan
Equity, Ltd. (the "Note Purchaser"), pursuant to that certain Note Purchase
Agreement (the "Note Purchase Agreement") dated of even date herewith, by and
between the Company and such purchaser;
WHEREAS, the Purchasers desire to purchase the Shares on the terms and
conditions set forth herein; and
WHEREAS, the Company desires to issue and sell the Shares to Purchasers
on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE.
1.1 AUTHORIZATION OF SHARES. On or prior to the Closing (as
defined in Section 2 below), the Company shall have authorized the sale and
issuance to the Purchasers of the Shares. The Shares shall have the rights,
preferences, privileges and restrictions set forth in the Certificate of
Incorporation of the Company, as amended, in the form attached hereto as EXHIBIT
B.
1.2 SALE AND PURCHASE. Subject to the terms and conditions
hereof, at the Closing (as hereinafter defined) the Company hereby agrees to
issue and sell to each Purchaser, severally and not jointly, and each Purchaser
agrees to purchase from the Company, severally and not jointly, the number of
Shares set forth opposite such Purchaser's name on EXHIBIT A, at a purchase
price of two dollars and fifty cents ($2.50) per share.
1.
2. CLOSING, DELIVERY AND PAYMENT.
2.1 CLOSING. The closing of the sale and purchase of the
Shares under this Agreement (the "Closing") shall take place at 10:00 a.m. on
the date hereof, at the offices of Xxxxxx Godward LLP, 0000 Xxxxxxxxx Xxxxx,
Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx 00000 or at such other time or place as the
Company and the Purchasers may mutually agree (such date is hereinafter referred
to as the "Closing Date").
2.2 DELIVERY. At the Closing or shortly thereafter, subject to
the terms and conditions hereof, the Company will deliver to the Purchasers
certificates representing the number of Shares to be purchased at the Closing by
each Purchaser, against payment of the purchase price therefor by check, wire
transfer made payable to the order of the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth on a Schedule of Exceptions delivered by the
Company to the Purchasers at the Closing, the Company hereby represents and
warrants to each Purchaser as of the date of this Agreement as follows:
3.1 ORGANIZATION AND STANDING. The Company is a corporation
duly organized and validly existing under, and by virtue of, the laws of the
State of Delaware and is in good standing under such laws. The Company has all
requisite corporate power to own and operate its assets and to carry on its
business as presently conducted and as currently proposed to be conducted and as
described in the SEC Documents (as hereinafter defined). The Company is
qualified to do business as a foreign corporation in each jurisdiction in which
the failure to so qualify would have a material adverse effect on the Company's
business, operations or condition (financial or otherwise), results of
operations or prospects (a "MATERIAL ADVERSE EFFECT"). The Company has no
subsidiaries.
3.2 AUTHORIZATION. All corporate action on the part of the
Company, its directors and stockholders necessary for the authorization,
execution, delivery and performance of this Agreement and the Registration
Rights Agreement by the Company, the authorization, sale, issuance and delivery
of the Shares and the performance of the Company's obligations under this
Agreement and the Registration Rights Agreement has been taken or will be taken
prior to the Closing Date.
3.3 VALID AND BINDING OBLIGATION. This Agreement and the
Registration Rights Agreement, when executed and delivered by the Company, will
constitute valid and binding obligations of the Company, enforceable in
accordance with their terms except as limited by (a) applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights; and (b) general principles of equity
that restrict the availability of equitable remedies. The Shares, when issued in
compliance with the provisions of this Agreement, will be duly and validly
issued, fully paid and nonassessable and free of any liens or encumbrances
created by the Company other than restrictions on transfer arising under
applicable securities laws. Assuming the accuracy of the representations and
2.
warranties of the Purchasers, the Shares, when issued in compliance with the
provisions of this Agreement, will be issued in compliance with applicable
United States federal and state securities laws.
3.4 SEC FILINGS; FINANCIAL STATEMENTS.
(a) The Company has delivered to the Purchasers accurate
and complete copies (excluding copies of exhibits) of each report, registration
statement (on a form other than Form S-8) and definitive proxy statement filed
by the Company with the SEC between December 31, 1998, and the date of this
Agreement (the "SEC DOCUMENTS"). As of the time it was filed with the SEC (or,
if amended or superseded by a filing prior to the date of this Agreement, then
on the date of such filing): (i) each of the SEC Documents complied in all
material respects with the applicable requirements of the Securities Act or the
Securities Exchange Act (as the case may be); and (ii) none of the SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(b) The financial statements contained in the SEC
Documents: (i) complied as to form in all material respects with the published
rules and regulations of the SEC applicable thereto; (ii) were prepared in
accordance with U.S. generally accepted accounting principles applied on a
consistent basis throughout the periods covered, except as may be indicated in
the notes to such financial statements and (in the case of unaudited statements)
as permitted by Form 10-Q of the SEC, and except that unaudited financial
statements may not contain footnotes and are subject to year-end audit
adjustments; and (iii) fairly present the financial position of the Company as
of the respective dates thereof and the results of operations and cash flows of
the Company for the periods covered thereby consistent with the books and
records of the Company.
(c) Since March 31, 1999, there has not been: (i) any
change in the assets, liabilities, financial condition or operations of the
Company except changes in the ordinary course of business that have not been, in
any case or in the aggregate, materially adverse; (ii) any damage, destruction
or loss, whether or not covered by insurance, materially and adversely affecting
the properties or business of the Company; (iii) any waiver or compromise by the
Company of a material debt or obligation owed to it; or (iv) any other event or
condition out of character that has materially and adversely affected the
Company's business or prospects.
3.5 NON-CONTRAVENTION. The execution and delivery by the
Company of, and the performance by the Company of its obligations under, this
Agreement and the Registration Rights Agreement (i) will not contravene any
provision of applicable law or the certificate of incorporation or bylaws of the
Company or any agreement or other instrument binding upon the Company, or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company and (ii) will not result in the creation or
imposition of any Lien upon any property or assets of the Company pursuant to
the terms of any agreement or instrument to which it is a party or by which it
may be bound or to which any of its property or assets is subject.
3.
3.6 CAPITALIZATION.
(a) Immediately prior to the Closing Date and the sale
of the Convertible Notes and the Shares, the authorized capital stock of the
Company shall consist of (a) 10,000,000 shares of Preferred Stock, $.001 par
value, of which 1,000,000 shares have been designated Series A Convertible
Preferred Stock, $.001 par value, all of which are issued and outstanding, of
which 250,000 shares have been designated Series B Convertible Preferred Stock,
$.001 par value, all of which are issued and outstanding, and of which 500,000
shares have been designated Series C Junior Participating Preferred Stock, $.001
par value, none of which is issued and outstanding (b) 50,000,000 shares of
Common Stock, $.001 par value, 15,487,277 shares of which are issued and
outstanding, (c) 1,699,566 options and other rights to acquire Common Stock
under the Company's stock option plan (whether currently outstanding or granted
in the future), (d) 37,836 shares of the Company's Common Stock reserved for
issuance under the Employee Stock Purchase Plan, (e) 1,983,715 currently
outstanding warrants to acquire Common Stock of the Company and (f) 1,250,000
shares of Common Stock reserved for issuance upon the conversion of the Series A
Convertible Preferred Stock and the Series B Convertible Preferred Stock. As of
the date hereof, the Company is not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of its
capital stock or any warrants, options or other rights to acquire its capital
stock, except as set forth on Schedule 3.5(a) and except as may be contemplated
by this Agreement. As of the date hereof, the Company is not party to any voting
or similar agreement or proxies relating to the voting of shares of its capital
stock and is not aware of any such agreements or proxies to which it is not a
party except as may be contemplated by this Agreement. As of the date hereof,
all of the outstanding shares of the Company's capital stock have been duly
authorized and validly issued, and are fully paid and nonassessable, except to
the extent that such shares may be subject to restrictions on transfer under
state and/or federal securities laws as set forth herein or as otherwise
required by such law at the time a transfer is proposed. Except as set forth
herein, there are no other options, warrants, calls, preemptive (or similar)
rights, subscriptions or other rights, agreements, arrangements or commitments
of any character that obligate the Company to issue, transfer or sell, or cause
to be issued, transferred or sold, any shares of the capital sock of the Company
or other equity interests in the Company or any securities convertible into or
exchangeable for such shares of capital stock or other equity interests.
Immediately after closing the sale of the Shares pursuant to this Agreement and
the Convertibles Notes being sold concurrently with such Shares, the Company's
authorized capital shall not change and the number of authorized and outstanding
securities and the number of shares of Common Stock reserved for issuance under
outstanding options and reserved for issuance upon the conversion of the
Preferred Stock, shall not change except as follows: (a) 16,787,277 shares of
Common Stock will be issued and outstanding, (b) 2,924,000 shares of Common
Stock will be reserved for issuance upon the conversion of the Convertible Notes
and (c) 2,143,849 shares will be reserved for issuance under currently
outstanding warrants to acquire Common Stock of the Company.
(b) There are no statutory or contractual shareholders'
preemptive rights or rights of refusal with respect to the issuance of the
Shares hereunder. The Company has not violated any applicable federal or state
securities laws in connection with the offer, sale or issuance of any of its
capital stock, and, assuming the accuracy of the Purchaser's representations
4.
under Section 4, the offer, sale and issuance of the Shares hereunder do not
require registration under the Securities Act.
3.7 GOVERNMENTAL CONSENT, ETC. The Company has obtained all
permits, consents, approvals or authorizations of, or declarations to or filings
with, any governmental authority required in connection with the execution,
delivery and performance by the Company of this Agreement, the Registration
Rights Agreement or the other agreements contemplated hereby, or the
consummation by the Company of any other transactions contemplated hereby,
except any notices of sale required to be filed with the SEC under Regulation D
of the Securities Act, or such post-closing filings as may be required under
applicable state securities laws, all of which will be timely filed within the
applicable periods
3.8 NO GENERAL SOLICITATION. None of the Company, its
affiliates or any person acting on its own or the Company's or its affiliates
behalf has engaged or will engage, in connection with the offering of the
Shares, in any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act.
3.9 LITIGATION, ETC. There are no actions, suits, proceedings
(except applications for regulatory approval from the Food and Drug
Administration and foreign drug agencies), orders, investigations or claims
pending or, to the Company's knowledge, threatened against or affecting the
Company (or to the Company's knowledge, pending or threatened against or
affecting any of the officers, directors or employees of the Company with
respect to its business) at law or in equity, or before or by any governmental
department, commission, board, bureau, agency or instrumentality (including,
without limitation, any actions, suit, proceedings or investigations with
respect to the transactions contemplated by this Agreement); the Company is not
subject to any arbitration proceedings under collective bargaining agreements or
otherwise or, to the Company's knowledge, any governmental investigations or
inquiries; and, to the Company's knowledge, there is no basis for any of the
foregoing. The Company is not subject to any judgment, order or decree of any
court or other governmental agency, and the Company has not received any opinion
or memorandum or legal advice from legal counsel to the effect that it is
exposed, from a legal standpoint, to any liability or disadvantage which may
result in a Material Adverse Effect. The Company has conducted and continues to
conduct its business in compliance with all applicable laws, except where the
failure to comply has not had and is not reasonably likely to have a Material
Adverse Effect.
3.10 EMPLOYEES. The Company is not aware that any executive or
key employee of the Company or any group of employees of the Company has any
plans to terminate employment with the Company. The Company has complied with
all laws relating to the employment of labor (including, without limitation,
provisions thereof relating to wages, hours, equal opportunity, collective
bargaining and the payment of social security and other taxes), except where the
failure to comply has not had and is not reasonably expected to have a Material
Adverse Effect, and the Company is not aware that it has any material labor
relations problems (including, without limitation, any union organization
activities, threatened or actual strikes or work stoppages or material
grievances). The Company is not, and to the Company's knowledge, none of its
employees is, subject to any non-compete, nondisclosure, confidentiality,
employment, consulting or similar agreements relating to, affecting or in
conflict with the present business activities of the Company, except for
5.
agreements between the Company and its present and former employees that do not
conflict with such activities. The Company has no collective bargaining
agreements with any of its employees.
3.11 INTELLECTUAL PROPERTY RIGHTS. To its knowledge, the
Company owns or possesses, or can acquire on reasonable terms, Intellectual
Property Rights reasonably necessary to carry on the business now operated by
it. The Company has not received any notice of and, to its knowledge there is no
infringement of or conflict with rights of others with respect to any
Intellectual Property Rights owned or used by the Company. The Company is not
aware of any facts or circumstances that would render any Intellectual Property
Rights owned or used by the Company invalid or inadequate to protect the
interest of the Company therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or which invalidity or
inadequacy, singularly or in the aggregate, would result in a Material Adverse
Effect. To the Company's knowledge, no person or entity is infringing or
threatening to infringe any Intellectual Property Rights owned or used by the
Company. All employees and officers other than those employees who are not privy
to any of the Company's proprietary information are bound by the confidentiality
and invention assignment agreements and such agreements do not grant to such
employees and officers rights to any Intellectual Property Rights owned or used
by the Company. All non-employee directors are bound by confidentiality
agreements and such agreements do not grant to such directors rights to any
Intellectual Property Rights owned or used by the Company.
3.12 ENVIRONMENTAL AND SAFETY LAWS. The Company is in
compliance with all applicable statutes, laws, and regulations relating to the
environment and occupational health and safety, except where the failure to
comply has not had and will not have a Material Adverse Effect, and no material
expenditures are or will be required in order to comply with any such existing
statutes, laws or regulations. The Company has not received any written notice,
demand, letter, claim, request for information or other written communication
alleging that the Company may be in violation of, or liable under, any statute,
law, regulation or permit.
3.13 RELATED-PARTY TRANSACTIONS. No employee, officer,
stockholder or director of the Company or member of his or her immediate family
is indebted to the Company, nor is the Company indebted (or committed to make
loans or extend or guarantee credit) to any of them, other than (i) for payment
of salary for services rendered, (ii) reimbursement for reasonable expenses
incurred on behalf of the Company, and (iii) for other standard employee
benefits made generally available to all employees (including stock option
agreements outstanding under any stock option plan approved by the Board of
Directors of the Company). To the Company's knowledge, none of such persons has
any direct or indirect ownership interest in any firm or corporation with which
the Company is affiliated or with which the Company has a business relationship,
or any firm or corporation that competes with the Company, except that
employees, stockholders, officers, or directors of the Company and members of
their immediate families may own stock in publicly traded companies that may
compete with the Company. To the Company's knowledge, no officer, director, or
stockholder or any member of their immediate families is, directly or
indirectly, interested in any material contract with the Company (other than
such contracts that relate to such person's ownership of capital stock or other
securities of the Company).
6.
3.14 TITLE TO PROPERTY AND ASSETS; LEASES. The Company has
good marketable title to, or a valid leasehold interest in, the properties and
assets used by it, located on its premises or shown on the unaudited Balance
Sheet of the Company as of June 30, 1999 (THE "LATEST BALANCE SHEET") or
acquired thereafter, free and clear of all Liens (other than Permitted Liens),
except for properties and assets disposed of in the ordinary course of business
since the date of the Latest Balance Sheet and except for Liens disclosed on the
Latest Balance Sheet (including any notes thereto) and minor liens and
encumbrances which do not materially detract from the value of the property
subject thereto or materially impair the operations of the Company. The
Company's buildings, equipment and other tangible assets are in good operating
condition in all material respects and are fit for their intended use in the
ordinary course of business. The Company owns, or has a valid leasehold interest
in, all assets necessary for the conduct of its businesses as presently
conducted.
3.15 INSURANCE. The Company has in full force and effect fire
and casualty insurance policies, with extended coverage, standard comprehensive
general liability insurance and product liabilities insurance (subject to
reasonable deductibles), in amounts customary for companies similarly situation
to the Company.
3.16 SYSTEM OF INTERNAL ACCOUNTING CONTROLS. The Company
maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorization, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets, (iii) access to assets is permitted only in accordance with management's
general or specific authorization and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
3.17 FILING OF TAX RETURNS. The Company has filed all tax
returns that are required to be filed by it pursuant to foreign or domestic laws
and has paid all taxes due pursuant to such returns or pursuant to any
assessment received by it (except where the requirement for payment of such
taxes is being contested in good faith in appropriate proceedings), except where
the failure to file or make payment would not result in a Material Adverse
Effect. The charges, accruals, and reserves on the books of the Company in
respect of taxes or other governmental charges are, to the knowledge of the
Company, adequate.
3.18 INVESTMENT COMPANY. The Company is not, and upon the
issuance and sale of the Shares as herein contemplated and the application of
the net proceeds therefrom will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
3.19 REAL PROPERTY HOLDING COMPANY. The Company is not a
United States Real Property Holding Corporation within the meaning of
ss.897(c)(2) of the Internal Revenue Code of 1986, as amended.
3.20 NO DEFAULTS. The Company has, in all material respects,
performed all obligations to be performed by it to date and is not in default
under any of the contracts, loans, notes, mortgages, indentures, licenses,
7.
security agreements, agreements or leases to which it is a party or by which it
is otherwise bound, except for such defaults which in the aggregate have not had
a Material Adverse Effect. To the Company's knowledge, no other party to such
contracts, loans, notes, mortgages, debentures, licenses, security agreements,
agreements or leases is in default thereunder except those which would not have
a Material Adverse Effect. The contracts listed as exhibits to the SEC Documents
are all of the material contracts (as defined in Regulation S-K adopted under
the Securities Act of 1933) to which the Company is a party.
3.21 STOCKHOLDER RIGHTS AGREEMENT. The execution and delivery
by the Company of, and the performance by the Company of its obligations under,
this Agreement and the Registration Rights Agreement, will not contravene the
Stockholder Rights Agreement or result in the exercise of any rights under the
Stockholder Rights Agreement.
3.22 BROKERS OR FINDERS. The Company has not entered into any
agreement or arrangement giving rise to any liability for brokerage or finders'
fees or agents' commissions or any similar charges in connection with this
Agreement or the transactions contemplated hereby.
3.23 YEAR 2000 COMPLIANCE. To the Company's knowledge, the
hardware, software and software products (the "SYSTEMS") used by the Company
are, and will be, able to accurately (i) process any date rollover, (ii) process
calculations or computations regardless of the dates used in such calculations
whether before, on or after January 1, 2000, (iii) accept and respond to two
digit year date input in a manner which resolves any ambiguities as to the
century in an appropriate manner, (iv) store and display date data in a manner
which is unambiguous as to the century, and (v) recognize the year 2000 as a
leap year provided in all such cases, hardware and software used by third
parties in conjunction with the Systems (a) can accurately perform in accordance
with clauses (i) through (v) above and (b) do not affect the performance of the
Systems.
3.24 NASDAQ LISTING. The Common Stock of the Company is
designated for trading on the Nasdaq National Stock Market and the Company has
not been informed of any proceedings to revoke or suspend such designation. The
sale of Shares as contemplated hereby will not result in a violation of the
Nasdaq rules and regulations.
3.25 FORM S-3 ELIGIBILITY. The Company is eligible to file a
resale Registration Statement on Form S-3. Without limiting the generality of
the foregoing the Company has filed in a timely manner all reports required to
be filed by the Company with the Securities and Exchange Commission during the
12 calendar months and during the portion of the month immediately preceding the
date of this Agreement. The Company is not aware of any facts or circumstances
that exist as of the date of this Agreement that would cause it to lose its
eligibility.
3.26 KNOWLEDGE. As used in this Section 3, the terms
"knowledge" or "aware" when used with respect to the Company shall mean and
include the actual knowledge or awareness of any of the officers of the Company
as that term is defined in Securities Exchange Act after due inquiry of
management employees.
8.
3.27 DISCLOSURE. Neither this Agreement nor any of the
exhibits or schedules contains any untrue statement of a material fact or omits
to state a material fact necessary to make each statement contained herein or
therein not misleading.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
Each Purchaser severally for itself and not jointly with the other
Purchaser, hereby represents and warrants to the Company as follows (such
representations and warranties do not lessen or obviate the representations and
warranties of the Company set forth in this Agreement):
4.1 REQUISITE POWER AND AUTHORITY. Purchaser has all necessary
power and authority under all applicable provisions of law to execute and
deliver this Agreement and to perform its obligations hereunder. All action on
Purchaser's part required for the lawful execution and delivery of this
Agreement have been or will be effectively taken prior to the Closing. Upon
execution and delivery, this Agreement will be a valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, except
(a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors' rights,
and (b) general principles of equity that restrict the availability of equitable
remedies.
4.2 INVESTMENT REPRESENTATIONS. Purchaser understands that the
Shares have not been registered under the Securities Act. Purchaser also
understands that the Shares are being offered and sold pursuant to an exemption
from registration contained in the Securities Act based in part upon Purchaser's
representations contained in this Agreement. Each Purchaser, severally for
itself and not jointly with the other Purchaser, hereby represents and warrants
as follows:
(a) PURCHASER BEARS ECONOMIC RISK. Purchaser has
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that it is
capable of evaluating the merits and risks of its investment in the Company.
Purchaser must bear the economic risk of this investment indefinitely unless the
Shares are registered pursuant to the Securities Act, or an exemption from
registration is available in connection with a resale. Purchaser also
understands that there is no assurance that any exemption from registration
under the Securities Act will be available and that, even if available, such
exemption may not allow Purchaser to transfer all or any portion of the Shares
under the circumstances, in the amounts or at the times Purchaser might propose.
(b) ACQUISITION FOR OWN ACCOUNT. Purchaser is acquiring
the Shares for Purchaser's own account for investment only, and not with a view
towards their distribution in violation of the Securities Act, has no present
intention of selling (in connection with a distribution or otherwise), granting
any participation in or otherwise distributing the same in violation of the
Securities Act, and does not presently have reason to anticipate a change in
such intention.
(c) PURCHASER CAN PROTECT ITS INTEREST. Purchaser
represents that by reason of its, or of its management's, business or financial
experience, Purchaser has the capacity to protect its own interests in
connection with the transactions contemplated in this Agreement and in the
9.
Shares. Purchaser is aware of no publication of any advertisement in connection
with the transactions contemplated in Agreement.
(d) ACCREDITED INVESTOR. Purchaser represents that it is
an "accredited investor" within the meaning of Rule 501(a) of Regulation D under
the Securities Act.
(e) COMPANY INFORMATION. Purchaser has received and read
the Company's Annual Report on Form 10-K for the year ended December 31, 1998
and the Form 10-Q for the period ended March 31, 1999 (including all financial
statements), and has had an opportunity to discuss the Company's business,
management and financial affairs with directors, officers and management of the
Company and has had the opportunity to review the Company's operations.
Purchaser has also had the opportunity to ask questions of, and receive answers
from, the Company and its management regarding the terms and conditions of this
investment.
(f) RULE 144. Purchaser acknowledges and agrees that the
Shares must be held indefinitely unless they are subsequently registered under
the Securities Act or an exemption from such registration is available.
Purchaser has been advised or is aware of the provisions of Rule 144 promulgated
under the Securities Act as in effect from time to time, which permits limited
resale of restricted securities subject to the satisfaction of certain
conditions, including, among other things: the availability of certain current
public information about the Company, the resale occurring following the
required holding period under Rule 144 and the number of shares being sold
during any three-month period not exceeding specified limitations.
(g) RESIDENCE. The office or offices of Purchaser in
which its investment decision was made is located at the address or addresses of
Purchaser set forth on Exhibit A of this Agreement.
4.3 FURTHER ASSURANCES. Purchaser and the Company each agrees
and covenants that at any time and from time to time, it will promptly execute
and deliver to the other party such further instruments and documents and to
take such further action as the other party may reasonably require in order to
carry out the transactions contemplated by this Agreement.
4.4 TRANSFER RESTRICTIONS. The Purchaser acknowledges and
agrees that the Shares are subject to restrictions on transfer as set forth
herein.
5. CONDITIONS TO EACH PURCHASER'S OBLIGATIONS AT THE CLOSING.
Each Purchaser's obligation to purchase the Shares at the Closing is
subject to the satisfaction, at or prior to the Closing Date, of the following
conditions:
5.1 REPRESENTATIONS AND WARRANTIES; COVENANTS. The
representations and warranties made by the Company in Section 3 hereof shall be
true and correct at and as of the Closing Date as though then made, except to
the extent of changes caused by the transactions expressly contemplated herein,
and the Company shall have performed or complied with all of the covenants
required to be performed by it hereunder prior to the Closing Date.
10.
5.2 REGISTRATION RIGHTS AGREEMENT. The Company and the
Purchasers shall have entered into a Registration Rights Agreement substantially
in the form set forth in EXHIBIT C attached hereto (the "REGISTRATION RIGHTS
AGREEMENT"), and the Registration Rights Agreement shall be in full force and
effect.
5.3 SALE OF CONVERTIBLE NOTES. The Company shall have
completed the sale of Convertible Notes of the Company to Artisan Equity Limited
for the aggregate amount of $6,500,000 to be purchased pursuant to the Note
Purchase Agreement and the conversion price for the Convertible Notes shall be
$3.25 per share of Common Stock.
5.4 GOVERNMENTAL CONSENTS. The Company shall have made all
filings under all applicable federal and state securities laws necessary to
consummate the sale and issuance of the Shares at the Closing in compliance with
such laws, except any notices of sale required to be filed with the SEC under
Regulation D of the Securities Act, or such post-closing filings as may be
required under applicable state securities laws, all of which will be timely
filed within the applicable periods therefor.
5.5 NO MATERIAL ADVERSE CHANGE. Since March 31, 1999, there
shall have been no change in the Company's business, operations or financial
condition that has had a Material Adverse Effect.
5.6 CONSENTS AND APPROVALS. The Company shall have received
all authorizations, consents, orders and approvals of all governmental
authorities and officials necessary for the consummation of the transactions
contemplated by this Agreement.
5.7 OPINION OF THE COMPANY'S COUNSEL. The Purchasers shall
have received from Xxxxxx Godward LLP, counsel for the Company, an opinion in
substantially the form attached hereto as EXHIBIT D, which shall be addressed to
the Purchasers, dated as of the Closing Date.
5.8 CLOSING DOCUMENTS. The Company shall have delivered to the
Purchasers all of the following documents:
(a) an officer's certificate, dated as of the Closing
Date, stating that the conditions specified in sections 5.1 through 5.7 have
been fully satisfied;
(b) certified copies of the resolutions duly adopted by
the Company's Board of Directors authorizing (i) the execution, delivery and
performance of this Agreement, the Registration Rights Agreement and each of the
other agreements contemplated hereby, (ii) the issuance and sale of the Shares,
(iii) the consummation of all other transactions contemplated by this Agreement
and the Registration Rights Agreement; and (iv) the amendment to the bylaws
expanding the Board of Directors if required.
(c) certified copies of the Company's Certificate of
Incorporation and Bylaws, each as in effect as of the Closing Date;
11.
(d) a copy of the duly executed Registration Rights
Agreement referenced in Section 5.2 as in effect at the Closing; and
(e) copies of all third party and governmental consents,
approvals and filings required in connection with the consummation of the
transactions hereunder (including, without limitation, all blue sky law filings
and waivers of all preemptive rights and rights of first refusal), except such
as may be properly obtained subsequent to the Closing.
6. CONDITIONS TO OBLIGATIONS OF THE COMPANY.
The Company's obligation to issue and sell the Shares at the Closing is
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions:
6.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties made by the Purchasers in Section 4 hereof shall be true and
correct in all material respects at the date of the Closing with the same force
and effect as if they had been made on and as of said date.
6.2 CONSENTS, PERMITS, AND WAIVERS. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
the consummation of the transactions contemplated by this Agreement and the
Registration Rights Agreement (except for such as may be properly obtained
subsequent to the Closing Date).
6.3 SALE OF CONVERTIBLE NOTES. The Company shall have
completed the sale of Convertible Notes of the Company to Artisan Equity Limited
for the aggregate amount of $6,500,000 to be purchased pursuant to the Note
Purchase Agreement and the conversion price for the Convertible Notes shall be
$3.25 per share of Common Stock.
7. MISCELLANEOUS.
7.1 LEGENDS. Each certificate or instrument representing
Restricted Securities shall be imprinted with a legend in substantially the
following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR UNLESS THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
7.2 INDEMNIFICATION. The Company hereby agrees to indemnify
and hold harmless each Purchaser, any affiliate of the Purchaser, any Person
controlling the Purchaser or such affiliate and their respective directors,
officers, agents and employees (each, an "INDEMNIFIED PERSON") from and against
any losses, claims, damages, liabilities, costs and expenses (including, without
limitation, reasonable fees and disbursements of counsel and accountants and
other costs and expenses incident to any actual or threatened claim, suit,
action or proceeding, whether incurred in connection with a claim against the
12.
Company or a third party claim) (collectively, "LOSSES") arising out of or
resulting from any breach of representation, warranty or covenant made or to be
performed on the part of the Company under this Agreement or the agreements
contemplated hereby or otherwise resulting from any action, claim or proceeding
arising out of the matters or transactions which are the subject of or
contemplated by this Agreement or any instrument or agreement referred to
herein, other than Losses resulting directly from the gross negligence or
willful misconduct of such Indemnified Person. If for any reason (other than the
gross negligence or willful misconduct of the Indemnified Person) the foregoing
indemnity is unavailable or insufficient to hold an Indemnified Person harmless,
then the Company shall contribute to amounts paid or payable by such Indemnified
Person in respect of such Losses in such proportion as appropriately reflects
the relative benefits received by, and fault of, the Company and such
Indemnified Person in connection with the matters as to which such Losses relate
and other equitable considerations.
7.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall remain operative and in full force and effect for
eighteen months from the Closing Date.
7.4 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so expressed
or not. In addition, and whether or not any express assignment has been made,
the provisions of this Agreement which are for the Purchasers' benefit or impose
obligations upon the Purchasers as a purchaser or holder of the Shares are also
for the benefit of, and impose such obligations upon and enforceable by and
against, any subsequent holder of such Shares.
7.5 SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
7.6 COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
shall constitute one and the same Agreement.
7.7 DESCRIPTIVE HEADINGS; INTERPRETATION. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a substantive part of this Agreement. The use of the word "including"
in this Agreement shall be by way of example rather than by limitation.
7.8 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California as such laws
are applied to contracts entered into and performed entirely within the State of
California by California residents.
13.
7.9 NOTICES. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable overnight
courier service (charges prepaid) or mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid. Such notices,
demands and other communications shall be sent to the Purchasers and to the
Company at the address indicated below:
To the Company: CORVAS INTERNATIONAL, INC.
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: President
With a copy to: XXXXXX GODWARD LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
To the Purchasers: To the addresses set forth on Exhibit A
With a copy to: XXXXXXXX XXXXXXXXXX
0000 Xxxx-Xxxxxxxx Boulevard, West Suite 1400
Xxxxxxxx, Xxxxxx X0X 0X0
Attn: Xxxxx Xxxxx, Esq.
or to such other address or to the attention of such other person as the
recipient party has specified by ten (10) days advance written notice to the
other party.
7.10 NO STRICT CONSTRUCTION. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
7.11 EXPENSES. The Company agrees to reimburse Sofinov for all
of its costs and reasonable expenses, including reasonable attorneys' fees,
incurred in satisfaction, of its legal, scientific and patent due diligence
review and its legal review of the closing documents.
7.12 LISTING OF SHARES ON NASDAQ. Promptly following the
Closing, the Company agrees to file an Application for Listing of Additional
Shares to request the designation for trading of the Shares on the Nasdaq
National Stock Market and use reasonable best efforts to have the application
approved.
7.13 USE OF PROCEEDS. The proceeds from the sale of the Shares
hereunder will be used by the Company for working capital and for general
corporate purposes.
14.
7.14 INFORMATION RIGHTS. For so long as any Purchaser holds
any of the Shares, the Company shall deliver to such Purchaser by electronic
mail or by other electronic means copies of all press releases issued by the
Company and shall deliver by mail copies of its quarterly and annual reports
filed with the SEC (including financial statements).
7.15 PUBLIC STATEMENTS OR RELEASES. None of the parties to
this Agreement shall make, issue, or release any announcement, whether to the
public generally, or to any of its employees, suppliers, or customers, with
respect to this Agreement or the transactions provided for herein, or make any
statement or acknowledgment of the existence of, or reveal the status of, this
Agreement or the transactions provided for herein, without the prior consent of
the other parties, which shall not be unreasonably withheld or delayed;
provided, that nothing in this Section 7.16 shall prevent any of the Parties
hereto from making such public announcements as it may consider necessary in
order to satisfy its legal obligations, but to the extent not inconsistent with
such obligations, it shall provide the other parties with an opportunity to
review and comment on any proposed public announcement before it is made.
8. DEFINITIONS.
For the purposes of this Agreement, the following terms have the
meanings set forth below:
"INTELLECTUAL PROPERTY RIGHTS" means all (i) patents, patent
applications, patent disclosures and inventions, (ii) trademarks, service marks,
trade dress, trade names, logos and corporate names and registrations and
applications for registration thereof together with all of the goodwill
associated therewith, (iii) copyrights (registered or unregistered) and
copyrightable works and registrations and applications for registration thereof,
(iv) mask works and registrations and applications for registration thereof, (v)
computer software, data, data bases and documentation thereof, (vi) trade
secrets and other confidential information (including, without limitation,
ideas, formulas, compositions, inventions (whether patentable or unpatentable
and whether or not reduced to practice), know-how, manufacturing and production
processes and techniques, research and development information, drawings,
specifications, designs, plans, proposals, technical data, copyrightable works,
financial and marketing plans and customer and supplier lists and information),
and (vii) copies and tangible embodiments thereof (in whatever form or medium).
"LIENS" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof), any sale of receivables with recourse against the Company or any
affiliate, any filing or agreement to file a financing statement as debtor under
the Uniform Commercial Code or any similar statute other than to reflect
ownership by a third party of property leased to the Company under a lease which
is not in the nature of a conditional sale or title retention agreement, or any
subordination arrangement in favor of another Person (other than any
subordination arising in the ordinary course of business).
"PERMITTED LIENS" means:
15.
(a) tax liens with respect to taxes not yet due and
payable or which are being contested in good faith by appropriate proceedings
and for which appropriate reserves have been established in accordance with
generally accepted accounting principles, consistently applied;
(b) deposits or pledges made in connection with, or to
secure payment of, utilities or similar services, workers' compensation,
unemployment insurance, old age pensions or other social security obligations;
(c) purchase money security interests in any property
acquired by the Company to the extent permitted by this Agreement;
(d) interests or title of a lessor under any lease
permitted by this Agreement;
(e) mechanics', materialmen's or contractors' liens or
encumbrances or any similar lien or restriction created by statute;
(f) easements, rights-of-way, restrictions and other
similar charges and encumbrances not interfering with the ordinary conduct of
the business of the Company or detracting from the value of the assets of the
Company; and
(g) liens outstanding on the date hereof which secure
indebtedness of the Company and which are described in the schedules to this
Agreement.
"PERSON" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"RESTRICTED SECURITIES" means (i) the Shares issued hereunder
and (ii) any securities issued with respect to the Shares by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular Restricted Securities, such securities shall cease to be Restricted
Securities when they have (a) been effectively registered under the Securities
Act and disposed of in accordance with the registration statement covering them,
or (b) been distributed to the public through a broker, dealer or market maker
pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act or become eligible for sale pursuant to Rule 144(k) (or any
similar provision then in force) under the Securities Act. Whenever any
particular securities cease to be Restricted Securities, the holder thereof
shall be entitled to receive from the Company, without expense, new securities
of like tenor not bearing a Securities Act legend of the character set forth in
Section 7.2.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
or any similar federal law then in force.
"SEC" means the United States Securities and Exchange
Commission and includes any governmental body or agency succeeding to the
functions thereof.
16.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended, or any similar federal law then in force.
"STOCKHOLDER RIGHTS AGREEMENT" means the Stockholder Rights
Agreement, dated September 18, 1997, between the Company and American Stock
Transfer and Trust Company as rights agent.
[THIS SPACE INTENTIONALLY LEFT BLANK]
17.
IN WITNESS WHEREOF, the parties hereto have executed the COMMON STOCK
PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.
COMPANY: PURCHASERS:
CORVAS INTERNATIONAL, INC. SOFINOV SOCIETE FINANCIERE
D'INNOVATION INC.
By: /s/ XXXXXXX X. XXXXX By: /s/ XXXX-XXXXXXXXXX RENONDIN
------------------------------ ---------------------------------
Xxxxxxx X. Xxxxx Name: Xxxx-Xxxxxxxxxx Renondin
President and Chief Executive -------------------------------
Officer Its: VP
--------------------------------
By: /s/ XXXXX XXXXXX
---------------------------------
Name: Xxxxx Xxxxxx
-------------------------------
Its: President
--------------------------------
IBT INTERNATIONAL BIOTECHNOLOGY TRUST
By: /s/ XXXXXX X. XXXXXXX XXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx Xxxx
-------------------------------
Its: Director
--------------------------------
[SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT]
CORVAS INTERNATIONAL, INC.
COMMON STOCK PURCHASE AGREEMENT
COMMON STOCK PURCHASE AGREEMENT
EXHIBIT A
SCHEDULE OF PURCHASERS
--------------------------------------------------------------------------------
AGGREGATE
NAME AND ADDRESS SHARES PURCHASE PRICE
--------------------------------------------------------------------------------
IBT International Biotechnology Trust plc 300,000 $750,000
Five Xxxxxx Xxxxx
Xx. Xxxxxxx'x Xxxx
Xxxxxx XX0X 0XX, Xxxxxxx
Sofinov Societe Financiere D'Innovation Inc. 1,000,000 $2,500,000
0000, xxxxxx XxXxxx Xxxxxxx 00xx Xxxxx
Xxxxxxxx (Xxxxxx) X0X 0X0
TABLE OF CONTENTS
PAGE
1. AGREEMENT TO SELL AND PURCHASE........................................1
1.1 Authorization of Shares......................................1
1.2 Sale and Purchase............................................1
2. CLOSING, DELIVERY AND PAYMENT.........................................2
2.1 Closing......................................................2
2.2 Delivery.....................................................2
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................2
3.1 Organization and Standing....................................2
3.2 Authorization................................................2
3.3 Valid and Binding Obligation.................................2
3.4 SEC Filings; Financial Statements............................3
3.5 Non-Contravention............................................3
3.6 Capitalization...............................................4
3.7 Governmental Consent, etc....................................5
3.8 No General Solicitation......................................5
3.9 Litigation, etc..............................................5
3.10 Employees....................................................5
3.11 Intellectual Property Rights.................................6
3.12 Environmental and Safety Laws................................6
3.13 Related-Party Transactions...................................6
3.14 Title to Property and Assets; Leases.........................7
3.15 Insurance....................................................7
3.16 System of Internal Accounting Controls.......................7
3.17 Filing of Tax Returns........................................7
3.18 Investment Company...........................................7
3.19 Real Property Holding Company................................7
3.20 No Defaults..................................................7
3.21 Stockholder Rights Agreement.................................8
3.22 Brokers or Finders...........................................8
3.23 Year 2000 Compliance.........................................8
i.
TABLE OF CONTENTS
(CONTINUED)
PAGE
3.24 Nasdaq Listing...............................................8
3.25 Form S-3 Eligibility.........................................8
3.26 Knowledge....................................................8
3.27 Disclosure...................................................9
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS......................9
4.1 Requisite Power and Authority................................9
4.2 Investment Representations...................................9
4.3 Further Assurances..........................................10
4.4 Transfer Restrictions.......................................10
5. CONDITIONS TO EACH PURCHASER'S OBLIGATIONS AT THE CLOSING............10
5.1 Representations and Warranties; Covenants...................10
5.2 Registration Rights Agreement...............................11
5.3 Sale of Convertible Notes...................................11
5.4 Governmental Consents.......................................11
5.5 No Material Adverse Change..................................11
5.6 Consents and Approvals......................................11
5.7 Opinion of the Company's Counsel............................11
5.8 Closing Documents...........................................11
6. CONDITIONS TO OBLIGATIONS OF THE COMPANY.............................12
6.1 Representations and Warranties True.........................12
6.2 Consents, Permits, and Waivers..............................12
6.3 Sale of Convertible Notes...................................12
7. MISCELLANEOUS........................................................12
7.1 Legends.....................................................12
7.2 Indemnification.............................................12
7.3 Survival of Representations and Warranties..................13
7.4 Successors and Assigns......................................13
7.5 Severability................................................13
7.6 Counterparts................................................13
7.7 Descriptive Headings; Interpretation........................13
ii.
TABLE OF CONTENTS
(CONTINUED)
PAGE
7.8 Governing Law...............................................13
7.9 Notices.....................................................14
7.10 No Strict Construction......................................14
7.11 Expenses....................................................14
7.12 Listing of Shares on Nasdaq.................................14
7.13 Use of Proceeds.............................................14
7.14 Information Rights..........................................15
7.15 Public Statements or Releases...............................15
8. DEFINITIONS..........................................................15
iii.
An extra section break has been inserted above this paragraph. Do not delete
this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following the
Table of Contents/Authorities.
