5,000,000 Shares
CORVAS INTERNATIONAL, INC.
Common Stock
UNDERWRITING AGREEMENT
November___, 2000
CIBC World Markets Corp.
Prudential Securities Incorporated
U.S. Bancorp Xxxxx Xxxxxxx
c/o CIBC World Markets Corp.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
On behalf of the Several
Underwriters named on
Schedule I attached hereto.
Ladies and Gentlemen:
Corvas International, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions contained herein, to
sell to you and the other underwriters named on Schedule I to this Agreement
(the "Underwriters"), for whom you are acting as Representatives (the
"Representatives"), an aggregate of 5,000,000 shares (the "Firm Shares") of the
Company's Common Stock, $0.001 par value (the "Common Stock"). The respective
amounts of the Firm Shares to be purchased by each of the several Underwriters
are set forth opposite their names on Schedule I hereto. In addition, the
Company proposes to grant to the Underwriters an option to purchase up to an
additional 750,000 shares (the "Option Shares") of Common Stock from it for the
purpose of covering over-allotments in connection with the sale of the Firm
Shares. The Firm Shares and the Option Shares are together called the "Shares."
1. Sale and Purchase of the Shares.
On the basis of the representations, warranties and agreements
contained in, and subject to the terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at a price of $_____ per share (the "Initial
Price"), the number of Firm Shares set forth opposite the name of such
Underwriter under the column "Number of Firm Shares to be Purchased" on
Schedule I to this Agreement, subject to adjustment in accordance with
Section 10 hereof.
(b) The Company grants to the several Underwriters an option
to purchase, severally and not jointly, all or any part of the Option
Shares at the Initial Price. The number of Option Shares to be
purchased by each Underwriter shall be the same percentage (adjusted by
the Representatives to eliminate fractions) of the total number of
Option Shares to be purchased by the Underwriters as such Underwriter
is purchasing of the Firm Shares. Such option may be exercised only to
cover over-allotments in the sales of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time on or
before 12:00 noon, New York City time, on the business day before the
Firm Shares Closing Date (as defined below), and from time to time
thereafter within 30 days after the date of this Agreement, in each
case upon written, facsimile or telegraphic notice, or verbal or
telephonic notice confirmed by written, facsimile or telegraphic
notice, by the Representatives to the Company no later than 12:00 noon,
New York City time, on the business day before the Firm Shares Closing
Date or at least two business days before the Option Shares Closing
Date (as defined below), as the case may be, setting forth the number
of Option Shares to be purchased and the time and date (if other than
the Firm Shares Closing Date) of such purchase.
2. DELIVERY AND PAYMENT. Delivery by the Company of the Firm
Shares to the Representatives for the respective accounts of the Underwriters,
and payment of the purchase price by immediately available funds by wire
transfer or certified or official bank check or checks payable in New York
Clearing House (same day) funds drawn to the order of the Company for the shares
purchased from the Company, against delivery of the respective certificates
therefor to the Representatives, shall take place at the offices of CIBC World
Markets Corp., Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00
a.m., New York City time, on the third business day following the date of this
Agreement, or at such time on such other date, not later than 10 business days
after the date of this Agreement, as shall be agreed upon by the Company and the
Representatives (such time and date of delivery and payment are called the "Firm
Shares Closing Date").
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In the event the option with respect to the Option Shares is
exercised in whole or in part on one or more occasions, delivery by the Company
of the Option Shares to the Representatives for the respective accounts of the
Underwriters and payment of the purchase price thereof in immediately available
funds by wire transfer or by certified or official bank check or checks payable
in New York Clearing House (same day) funds to the Company shall take place at
the offices of CIBC World Markets Corp. specified above at the time and on the
date (which may be the same date as, but in no event shall be earlier than, the
Firm Shares Closing Date) specified in the notice referred to in Section 1(b),
which date shall be not later than 10 business days following the date of such
notice (such time and date of delivery and payment are called the "Option Shares
Closing Date"). The Firm Shares Closing Date and the Option Shares Closing Date
are called, individually, a "Closing Date" and, together, the "Closing Dates."
The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as the Representatives may request at least two business days before the
Firm Shares Closing Date or, in the case of Option Shares, on the day of notice
of exercise of the option as described in Section 1(b) shall be delivered by or
on behalf of the Company to the Representatives, through the facilities of the
Depository Trust Company ("DTC"), for the account of such Underwriter. The
Company will cause the certificates representing the Shares to be made available
for checking and packaging at such place as is designated by the
Representatives, on the full business day before the Firm Shares Closing Date
(or the Option Shares Closing Date in the case of the Option Shares).
3. REGISTRATION STATEMENT AND PROSPECTUS; PUBLIC OFFERING.
The Company has prepared and filed in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the published
rules and regulations thereunder (the "Rules") adopted by the Securities and
Exchange Commission (the "Commission") a Registration Statement (as hereinafter
defined) on Form S-3 (No. 333-47050), including a preliminary prospectus
relating to the Shares, and such amendments thereof as may have been required to
the date of this Agreement. Copies of such Registration Statement (including all
amendments thereof) and of the related Preliminary Prospectus (as hereinafter
defined) have heretofore been delivered by the Company to you. The term
"Preliminary Prospectus" means any preliminary prospectus (as described in Rule
430 of the Rules), including any documents incorporated by reference therein,
included at any time as a part of the Registration Statement or filed with the
Commission by the Company with the consent of the Representatives pursuant to
Rule 424(a) of the Rules. The term "Registration Statement" as used in this
Agreement means the initial registration statement (including all exhibits,
financial schedules and information deemed to be a part of the Registration
Statement through incorporation by reference or otherwise), as amended at the
time and on the date it becomes effective
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(the "Effective Date") including the information (if any) deemed to be part
thereof at the time of effectiveness pursuant to Rule 430A of the Rules. If the
Company has filed an abbreviated registration statement to register additional
Shares pursuant to Rule 462(b) under the Rules (the "462(b) Registration
Statement") then any reference herein to the Registration Statement shall also
be deemed to include such 462(b) Registration Statement. The term "Prospectus"
as used in this Agreement means the prospectus in the form included in the
Registration Statement at the time of effectiveness or, if Rule 430A of the
Rules is relied on, the term Prospectus shall also include the final prospectus
filed with the Commission pursuant to Rule 424(b) of the Rules, in each case,
including any documents incorporated by reference therein.
The Company understands that the Underwriters propose to make
a public offering of the Shares, as set forth in and pursuant to the Prospectus,
as soon after the Effective Date and the date of this Agreement as the
Representatives deem advisable. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed each Preliminary Prospectus and are authorized to distribute the
Prospectus (as from time to time amended or supplemented if the Company
furnishes amendments or supplements thereto to the Underwriters).
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to each Underwriter as follows:
(a) On the Effective Date, the Registration Statement
complied, and on the date of the Prospectus, the date any
post-effective amendment to the Registration Statement becomes
effective, the date any supplement or amendment to the Prospectus is
filed with the Commission and each Closing Date, the Registration
Statement and the Prospectus (and any amendment thereof or supplement
thereto) will comply, in all material respects, with the applicable
provisions of the Securities Act and the Rules and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations of the Commission thereunder. The Registration
Statement did not and will not, as of the Effective Date and as of the
other dates referred to above, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading. The Prospectus (and any amendment thereof or supplement
thereto) will not, at the date of the Prospectus, at the date of any
such amendments or supplements thereto or at any Closing Date, contain
any untrue statement of a material fact or will omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. When any related Preliminary Prospectus
was first filed with the Commission (whether filed as part of the
Registration Statement or any amendment thereto
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or pursuant to Rule 424(a) of the Rules) and when any amendment thereof
or supplement thereto was first filed with the Commission, such
Preliminary Prospectus as amended or supplemented complied in all
material respects with the applicable provisions of the Securities Act
and the Rules and did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If
applicable, each Preliminary Prospectus and the Prospectus delivered to
the Underwriters for use in connection with this offering was identical
to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the Prospectus shall not be "materially
different," as such term is used in Rule 434, from the Prospectus
included in the Registration Statement at the time it became effective.
Notwithstanding the foregoing, none of the representations and
warranties in this paragraph 4(a) shall apply to statements in, or
omissions from, the Registration Statement or the Prospectus made in
reliance upon, and in conformity with, information herein or otherwise
furnished in writing by the Representatives on behalf of the several
Underwriters for use in the Registration Statement or the Prospectus.
With respect to the preceding sentence, the Company acknowledges that
the only information furnished in writing by the Representatives on
behalf of the several Underwriters for use in the Registration
Statement or the Prospectus is the statements contained under the
caption "Underwriting" in the Prospectus.
(b) The Registration Statement is effective under the
Securities Act and no stop order preventing or suspending the
effectiveness of the Registration Statement or suspending or preventing
the use of the Prospectus has been issued and no proceedings for that
purpose have been instituted or, to the knowledge of the Company, are
threatened under the Securities Act. Any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b) of the
Rules has been or will be made in the manner and within the time period
required by such Rule 424(b).
(c) The documents incorporated by reference in the
Registration Statement and the Prospectus, at the time they were filed
with the Commission, complied in all material respects with the
requirements of the Exchange Act and, when read together and with the
other information in the Registration Statement and the Prospectus, do
not contain an untrue statement of a material fact or omit 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.
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(d) The financial statements of the Company (including all
notes and schedules thereto) included or incorporated by reference in
the Registration Statement and Prospectus present fairly the financial
position, the results of operations, the statements of cash flows and
the statements of stockholders' equity and the other information
purported to be shown therein of the Company at the respective dates
and for the respective periods to which they apply; and such financial
statements and related schedules and notes have been prepared in
conformity with United States generally accepted accounting principles,
consistently applied throughout the periods involved, and all
adjustments necessary for a fair presentation of the results for such
periods have been made. The "Summary Financial Information" and
"Selected Financial Data" included in the Prospectus present fairly the
information shown therein as at the respective dates and for the
respective periods specified and the "Summary Financial Information"
and "Selected Financial Data" have been presented on a basis consistent
with the consolidated financial statements incorporated by reference in
the Prospectus.
(e) KPMG LLP, whose reports are filed with the Commission as a
part of the Registration Statement, are and, during the periods covered
by their reports, were, with respect to the Company, independent public
accountants as required by the Securities Act and the Rules.
(f) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
The Company has no subsidiary or subsidiaries and does not control,
directly or indirectly, any corporation, partnership, joint venture,
association or other business organization. The Company is duly
qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of the business
conducted by it or location of the assets or properties owned, leased
or licensed by it requires such qualification, except for such
jurisdictions where the failure to so qualify would not have a material
adverse effect on the assets or properties, business, results of
operations or financial condition of the Company (a "Material Adverse
Effect"). The Company has all requisite corporate power and authority,
and all necessary authorizations, approvals, consents, orders,
licenses, certificates and permits of and from all governmental or
regulatory bodies or any other person or entity (collectively, the
"Permits"), to own, lease and license its assets and properties and
conduct its business, all of which are valid and in full force and
effect, as described in the Registration Statement and the Prospectus,
except where the lack of such Permits, individually or in the
aggregate, would not have a Material Adverse Effect. The Company has
fulfilled and performed in all material respects all of its material
obligations with respect to such Permits and no event has occurred that
allows, or after notice or lapse of time would allow, revocation or
termination thereof
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or results in any other material impairment of the rights of the
Company thereunder. Except as may be required under the Securities Act
and state and foreign Blue Sky laws, the Company is not obligated to
obtain any other Permits in order to enter into, deliver and perform
this Agreement and to issue and sell the Shares.
(g) The Company owns or possesses adequate rights to use all
patents, patent applications, inventions, trademarks, trade names,
applications for registration of trademarks, service marks, service
xxxx applications, copyrights, know-how, manufacturing processes,
formulae, trade secrets, licenses and rights in any thereof and any
other intangible intellectual property and assets which are material to
the businesses of the Company as now conducted or to products currently
under development or in research, in each case as described in the
Prospectus (herein called the "Proprietary Rights"). The description of
the Proprietary Rights in the Prospectus is correct in all material
respects and fairly and correctly describes the Company's rights with
respect thereto. Except for matters specifically described in the
Prospectus under the caption "Business - Legal Proceedings," (i) the
Company does not have any knowledge of, and the Company has not given
or received any notice of, any pending conflicts with or infringement
of the rights of others with respect to any Proprietary Rights; (ii) no
action, suit, arbitration, or legal, administrative or other
proceeding, or investigation is pending, or, to the best knowledge of
the Company, threatened, which involves any Proprietary Rights; (iii)
to the best knowledge of the Company, the Company is not subject to any
judgment, order, writ, injunction or decree of any court or any
Federal, state, local, foreign or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, or any arbitrator, or has entered into or is a party to any
contract which restricts or impairs the use of any such Proprietary
Rights in a manner which would have a Material Adverse Effect on the
use of any of the Proprietary Rights; (iv) to the best knowledge of the
Company, no Proprietary Rights used by the Company, and no services or
products sold by the Company, conflict with or infringe upon any
Proprietary Rights available to any third party; (v) the Company has
not received written notice of any pending conflict with or
infringement upon such third party proprietary rights; (vi) the Company
has not entered into any consent, indemnification, forbearance to xxx
or settlement agreement with respect to Proprietary Rights other than
in the ordinary course of business; (vii) no claims have been asserted
by any person with respect to the validity of the Company's ownership
or right to use the Proprietary Rights and, to the best knowledge of
the Company, there is no reasonable basis for any such claim to be
successful; (viii) the Company has complied, in all material respects,
with its respective contractual obligations relating to the protection
of the Proprietary Rights used pursuant to licenses; and (ix) to the
best knowledge of the Company, no person is infringing on or violating
the Proprietary Rights owned or used by the Company. To the Company's
knowledge, the Proprietary Rights are
7
valid and enforceable. No registration relating thereto has lapsed,
expired or been abandoned or canceled or is the subject of cancellation
or other adversarial proceedings, and all applications therefor are
pending and are in good standing.
(h) The Company owns no real property and has good and
marketable title to all personal property described in the Prospectus
as being owned by it. Any real property and buildings described in the
Prospectus as being held under lease by the Company is held by it under
valid, existing and enforceable leases, free and clear of all liens,
encumbrances, claims, security interests and defects, except such as
are described in the Registration Statement and the Prospectus or would
not have a Material Adverse Effect.
(i) There are no litigation or governmental proceedings to
which the Company is subject or which is pending or, to the knowledge
of the Company, threatened, against the Company, which, individually or
in the aggregate, might have a Material Adverse Effect, prevent the
consummation of this Agreement or which is required to be disclosed in
the Registration Statement and the Prospectus that is not so disclosed.
(j) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
described therein, (a) there has not been any material adverse change
or any development involving a prospective material adverse change in
or affecting the assets or properties, business, results of operations
or financial condition of the Company; (b) the Company has not
sustained any loss or interference with its assets, businesses or
properties (whether owned or leased) from fire, explosion, earthquake,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or any court or legislative or other governmental
action, order or decree which would have a Material Adverse Effect; and
(c) since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, except as reflected therein,
the Company has not (1) issued any securities or incurred any liability
or obligation, direct or contingent, for borrowed money, except such
liabilities or obligations incurred in the ordinary course of business,
(2) entered into any transaction not in the ordinary course of business
or (3) declared or paid any dividend or made any distribution on any
shares of its stock or redeemed, purchased or otherwise acquired or
agreed to redeem, purchase or otherwise acquire any shares of its
stock. To the best knowledge of the Company, the Company does not have
any material contingent obligations which are not disclosed in the
Registration Statement.
(k) There is no document, contract or other agreement of a
character required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the
8
Registration Statement which is not described or filed as required by
the Securities Act or Rules. Each description of a contract, document
or other agreement in the Registration Statement and the Prospectus
accurately reflects in all respects the terms of the underlying
document, contract or agreement. Each agreement described in the
Registration Statement and Prospectus or listed in the Exhibits to the
Registration Statement or incorporated by reference is in full force
and effect and is valid and enforceable by and against the Company in
accordance with its terms except as enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law). Neither
the Company nor, to the Company's knowledge, any other party is in
default in the observance or performance of any term or obligation to
be performed by it under any such agreement, and, to the Company's
knowledge, no event has occurred which with notice or lapse of time or
both would constitute such a default, in any such case which default or
event, individually or in the aggregate, would have a Material Adverse
Effect. No default exists, and no event has occurred which with notice
or lapse of time or both would constitute a default, in the due
performance and observance of any term, covenant or condition, by the
Company of any other agreement or instrument to which the Company is a
party or by which it or its properties or business may be bound or
affected which default or event, individually or in the aggregate,
would have a Material Adverse Effect.
(l) The Company is not in violation of any term or provision
of its charter or bylaws or of any franchise, license, permit,
judgment, decree, order, statute, rule or regulation applicable to the
Company, where the consequences of such violation, individually or in
the aggregate, would have a Material Adverse Effect.
(m) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares) will give rise to a
right to terminate or accelerate the due date of any payment due under,
or conflict with or result in the breach of any term or provision of,
or constitute a default (or an event which with notice or lapse of time
or both would constitute a default) under, or require any consent or
waiver under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company
pursuant to the terms of, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company is a party or by
which it or any of its properties or businesses is bound, or any
franchise, license, permit, judgment, decree, order, statute, rule or
regulation applicable to the Company or
9
violate any provision of the charter or bylaws of the Company, except
for such consents or waivers which have already been obtained and are
in full force and effect.
(n) The Company has authorized, issued and outstanding capital
stock as set forth under the caption "Capitalization" and "Description
of Capital Stock" in the Prospectus. The certificates evidencing the
Shares are in due and proper legal form and have been duly authorized
for issuance by the Company. All of the issued and outstanding shares
of Common Stock have been duly authorized and validly issued and are
fully paid and nonassessable. There are no statutory preemptive or
other similar rights to subscribe for or to purchase or acquire any
shares of Common Stock of the Company or any such rights pursuant to
its Certificate of Incorporation or bylaws or any agreement or
instrument to or by which the Company is a party or bound. The Shares,
when issued and sold pursuant to this Agreement, will be duly
authorized and validly issued, fully paid and nonassessable and none of
them will be issued in violation of any preemptive or other similar
right. Except as disclosed in the Registration Statement and the
Prospectus, there is no outstanding option, warrant or other right
calling for the issuance of, and there is no commitment, plan or
arrangement to issue, any share of stock of the Company or any security
convertible into, or exercisable or exchangeable for, such stock. The
Common Stock and the Shares conform in all material respects to all
statements in relation thereto contained in the Registration Statement
and the Prospectus.
(o) No holder of any security of the Company has the right to
have any security owned by such holder included in the Registration
Statement or to demand registration of any security owned by such
holder during the period ending 90 days after the date of this
Agreement. Each director and executive officer of the Company listed on
SCHEDULE 4(o) has delivered to the Representatives his or her
enforceable written lock-up agreement in the form requested by the
Representatives ("Lock-Up Agreement").
(p) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares
by the Company. This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes and will
constitute legal, valid and binding obligations of the Company
enforceable against the Company in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
10
(q) The Company is not involved in any labor dispute nor, to
the knowledge of the Company, is any such dispute threatened, which
dispute would have a Material Adverse Effect. The Company is not aware
of any existing or imminent labor disturbance by the employees of any
of its principal suppliers or contractors which would have a Material
Adverse Effect. The Company is not aware of any threatened or pending
litigation between the Company and any of its executive officers which,
if adversely determined, could have a Material Adverse Effect and, to
the knowledge of the Company, no such officer has a present intention
to leave the Company.
(r) No transaction has occurred between or among the Company
and any of its officers or directors or five percent shareholders or
any affiliate or affiliates of any such officer or director or five
percent shareholders that is required to be described in and is not
described in the Registration Statement and the Prospectus.
(s) Neither the Company, nor to its knowledge (with respect to
affiliates such knowledge shall be without inquiry), any of its
officers, directors or affiliates has taken, or will take, directly or
indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation
of the price of the Common Stock to facilitate the sale or resale of
any of the Shares.
(t) The Company has filed all Federal, state, local and
foreign tax returns which are required to be filed through the date
hereof, which returns are true and correct in all material respects, or
has received extensions thereof, and has paid all taxes shown on such
returns and all assessments received by it to the extent that the same
are material and have become due. To the Company's knowledge, there are
no tax audits or investigations pending; nor are there any material
proposed additional tax assessments against the Company.
(u) The Common Stock is registered pursuant to Section 12(g)
of the Exchange Act and is quoted on the National Association of
Securities Dealers Automated Quotation ("Nasdaq") National Market
System. A registration statement has been filed on Form 8-A pursuant to
Section 12 of the Exchange Act, which registration statement complies
in all material respects with the Exchange Act. The Company has taken
no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or the
quotation of the Common Stock on the Nasdaq National Market, nor has
the Company received any notification from either the Commission or the
Nasdaq National Market that either entity is contemplating terminating
such registration or quotation.
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(v) The books, records and accounts of the Company accurately
and fairly reflect, in reasonable detail, the transactions in, and
dispositions of, the assets of, and the results of operations of, the
Company. 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
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with United States
generally accepted accounting principles and to maintain asset
accountability, (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.
(w) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
customary in the businesses in which it is engaged or proposes to
engage after giving effect to the transactions described in the
Prospectus including but not limited to, insurance covering clinical
trial liability, product liability and real or personal property owned
or leased against theft, damage, destruction, acts of vandalism and all
other risks customarily insured against; all policies of insurance and
fidelity or surety bonds insuring the Company or the Company's
business, assets, employees, officers and directors are in full force
and effect; the Company is in compliance with the terms of such
policies and instruments in all material respects; and the Company has
no reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.
The Company has not been denied any insurance coverage which it has
sought or for which it has applied.
(x) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated required to be obtained or performed
by the Company (except such additional steps as may be required by the
National Association of Securities Dealers, Inc. (the "NASD") or may be
necessary to qualify the Shares for public offering by the Underwriters
under the state securities or Blue Sky laws) has been obtained or made
and is in full force and effect.
(y) There are no affiliations with the NASD among the
Company's officers, directors or, to the knowledge of the Company, any
five percent or greater stockholder of the
12
Company, except as set forth in the Registration Statement or otherwise
disclosed in writing or in the NASD questionnaires returned to the
Representatives.
(z) (i) The Company is in compliance in all material respects
with all rules, laws, ordinances, codes, policies, rules of common law
and regulations and any judicial or administrative interpretation
thereof relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment ("Environmental
Law") which are applicable to its business; (ii) the Company has not
received any notice from any governmental authority or third party of
an asserted claim under Environmental Laws; (iii) the Company has
received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business and is in
compliance with all terms and conditions of any such permit, license or
approval; (iv) to the Company's knowledge, no facts currently exist
that will require the Company to make future material capital
expenditures to comply with Environmental Laws; and (v) no property
which is or has been owned, leased or occupied by the Company has been
designated as a Superfund site pursuant to the Comprehensive
Environmental Response, Compensation of Liability Act of 1980, as
amended (42 U.S.C. Section 9601, et. seq.) ("CERCLA") or otherwise
designated as a contaminated site under applicable state or local law.
The Company has not received written notice that it has been named as a
"potentially responsible party" under CERCLA.
(aa) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company, in the course of which the
Company identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly
or in the aggregate, have a Material Adverse Effect.
(bb) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of proceeds thereof
as described in the Prospectus, will not be an "investment company"
within the meaning of the Investment Company Act of 1940, as amended
(the "Investment Company Act").
(cc) None of the Company or any other person associated with
or acting on behalf of the Company including, without limitation, any
director, officer, agent or employee of the Company has, directly or
indirectly, while acting on behalf of the Company (i) used any
13
corporate funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity; (ii) made any
unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; (iii) violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any other unlawful
payment.
(dd) The Company is in compliance in all material respects
with all rules, laws and regulations relating to the development,
testing, manufacturing, sale and distribution of pharmaceuticals and
other products regulated by the United States Food and Drug
Administration, or similar state or foreign governmental agencies.
Except as described in the Prospectus, to the best of the Company's
knowledge, there are no rulemaking or similar proceedings (excluding
any proceedings related solely to any investigational new drug
application or premarket approval application filed by a third party)
before the United States Food and Drug Administration or comparable
Federal, state, local or foreign government bodies which involve or
affect the Company, which, if the subject of an action unfavorable to
the Company, could result in a Material Adverse Effect.
(ee) Except for matters specifically described in the
Prospectus under the caption "Business B Legal Proceedings" and
"Business - Our Product Development Programs," the Company has not
received any communication (whether written or oral) relating to the
termination or threatened termination or modification or threatened
modification of any material consulting, licensing, marketing, research
and development, cooperative or any similar agreement, including,
without limitation, the collaborative research and license agreements
listed under the sections of the Prospectus entitled, "Business B Our
Product Development Programs," and "Business B Patents and Proprietary
Rights."
(ff) All offers and sales of capital stock of the Company
prior to the date hereof were at all relevant times duly registered or
exempt from the registration requirements of the Securities Act and
were duly registered or subject to an available exemption from the
registration requirements of the applicable state securities or Blue
Sky laws.
(gg) To the Company's knowledge, if any full-time employee
identified in the Prospectus has entered into any non-competition,
non-disclosure, confidentiality or other similar agreement with any
party other than the Company, such employee is not in violation thereof
as a result of the business conducted by the Company as described in
the Prospectus or such person's performance of his obligations to the
Company; and the Company has not received written notice that any
consultant or scientific advisor of the Company is in violation of any
non-competition, non-disclosure, confidentiality or similar agreement.
14
(hh) The Company has not distributed and, prior to the later
of (i) the Closing Date and (ii) the completion of the distribution of
the Shares, will not distribute any offering material in connection
with the offering and sale of the Securities other than the
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or
other materials, if any permitted by the Securities Act.
5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The
obligations of the Underwriters under this Agreement are several and not joint.
The respective obligations of the Underwriters to purchase the Shares are
subject to each of the following terms and conditions:
(a) Notification that the Registration Statement has become
effective shall have been received by the Representatives and the
Prospectus shall have been timely filed with the Commission in
accordance with Section 6(a) of this Agreement.
(b) No order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus shall have been or shall be in
effect and no order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose shall
be pending before or threatened by the Commission, and any requests for
additional information on the part of the Commission (to be included in
the Registration Statement or the Prospectus or otherwise) shall have
been complied with to the satisfaction of the Commission and the
Representatives. If the Company has elected to rely upon Rule 430A,
Rule 430A information previously omitted from the effective
Registration Statement pursuant to Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) within
the prescribed time period and the Company shall have provided evidence
satisfactory to the Underwriters of such timely filing, or a
post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the
requirements of Rule 430A. If the Company has elected to rely upon Rule
434, a term sheet shall have been transmitted to the Commission for
filing pursuant to Rule 424(b) within the prescribed time period.
(c) The representations and warranties of the Company
contained in this Agreement and in the certificates delivered pursuant
to Section 5(d) shall be true and correct when made and on and as of
each Closing Date as if made on such date. The Company shall have
performed all covenants and agreements and satisfied all the conditions
contained in this Agreement required to be performed or satisfied by it
at or before such Closing Date.
15
(d) The Representatives shall have received on each Closing
Date a certificate, addressed to the Representatives and dated such
Closing Date, of the chief executive or chief operating officer and the
chief financial officer or chief accounting officer of the Company to
the effect that (i) the signers of such certificate have carefully
examined the Registration Statement, the Prospectus and this Agreement
and that the representations and warranties of the Company in this
Agreement are true and correct on and as of such Closing Date with the
same effect as if made on such Closing Date and the Company has
performed all covenants and agreements and satisfied all conditions
contained in this Agreement required to be performed or satisfied by it
at or prior to such Closing Date, and (ii) no stop order suspending the
effectiveness of the Registration Statement has been issued and to the
best of their knowledge, no proceedings for that purpose have been
instituted or are pending under the Securities Act.
(e) The Representatives shall have received, at the time this
Agreement is executed and on each Closing Date a signed letter from
KPMG LLP addressed to the Representatives and dated, respectively, the
date of this Agreement and each such Closing Date, in form and
substance reasonably satisfactory to the Representatives, confirming
that they are independent accountants within the meaning of the
Securities Act and the Rules, that the response to Item 10 of the
Registration Statement is correct insofar as it relates to them and
stating in effect that:
(i) In their opinion the audited financial statements
and financial statement schedules included or incorporated by
reference in the Registration Statement and the Prospectus and
reported on by them comply as to form in all material respects
with the applicable accounting requirements of the Securities
Act and the Rules.
(ii) On the basis of a reading of the amounts
included in the Registration Statement and the Prospectus
under the headings "Summary Financial Information" and
"Selected Financial Data," carrying out certain procedures
(but not an examination in accordance with United States
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter, a reading of the minutes of
the meetings of the stockholders and directors of the Company,
and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the
Company as to transactions and events subsequent to the date
of the latest audited financial statements, except as
disclosed in the Registration Statement and the Prospectus,
nothing came to their attention which caused them to believe
that:
16
(A) the amounts in "Summary Financial
Information," and "Selected Financial Data" included
in the Registration Statement and the Prospectus do
not agree with the corresponding amounts in the
audited and unaudited financial statements from which
such amounts were derived; or
(B) with respect to the Company, there were,
at a specified date not more than three business days
prior to the date of the letter, any increases in the
current liabilities and long-term liabilities of the
Company or any increases in net loss or decreases in
net assets or in working capital or the stockholders'
equity in the Company, as compared with the amounts
shown on the Company's audited balance sheet for the
fiscal year ended December 31, 1999 and the six
months ended June 30, 2000 included in the
Registration Statement.
(iii) They have performed certain other procedures as
may be permitted under United States generally acceptable
auditing standards as a result of which they determined that
certain information of an accounting, financial or statistical
nature (which is limited to accounting, financial or
statistical information derived from the general accounting
records of the Company) set forth in the Registration
Statement and the Prospectus and reasonably specified by the
Representatives agrees with the accounting records of the
Company.
(iv) Based upon the procedures set forth in clauses
(ii) and (iii) above and a reading of the amounts included in
the Registration Statement under the headings "Summary
Financial Information" and "Selected Financial Data" included
in the Registration Statement and Prospectus and a reading of
the financial statements from which certain of such data were
derived, nothing has come to their attention that gives them
reason to believe that the "Summary Financial Information" and
"Selected Financial Data" included in the Registration
Statement and Prospectus do not comply as to the form in all
material respects with the applicable accounting requirements
of the Securities Act and the Rules or that the information
set forth therein is not fairly stated in relation to the
financial statements included in the Registration Statement or
Prospectus from which certain of such data were derived are
not in conformity with United States generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included in the Registration Statement and Prospectus.
17
References to the Registration Statement and the
Prospectus in this paragraph (e) are to such documents as
amended and supplemented at the date of the letter.
(f) The Representatives shall have received on each Closing
Date from Xxxxxx Godward LLP, counsel for the Company, an opinion,
addressed to the Representatives and dated such Closing Date, in form
and substance satisfactory to counsel for the Underwriters, and stating
in effect that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of the State of Delaware. The Company is duly qualified
to transact business as a foreign corporation and is in good
standing in California, and to such counsel's knowledge, in
each other jurisdiction in which the character or location of
its assets or properties (owned, leased or licensed) or the
nature of its businesses makes such qualification necessary,
except for such jurisdictions where the failure to so qualify,
individually or in the aggregate, would not have a Material
Adverse Effect.
(ii) The Company has the requisite corporate power
and authority to own and lease its assets and properties and
conduct its business as now being conducted and as described
in the Registration Statement and the Prospectus and to enter
into, deliver and perform this Agreement and to issue and sell
the Shares other than those required under the state and
foreign securities and Blue Sky laws (as to which such counsel
need express no opinion).
(iii) The Company has authorized and issued (as of
the date indicated) capital stock as set forth in the
Registration Statement and the Prospectus under the captions
"Capitalization" and "Description of Capital Stock"; the
certificates evidencing the Shares are in due and proper legal
form and the Shares have been duly authorized for issuance
by the Company. The Shares when issued and sold for the stated
consideration pursuant to this Agreement will be duly and
validly issued, outstanding, fully paid and nonassessable and
none of them will have been issued in violation of any
preemptive or other similar right pursuant to the certificate
of incorporation or bylaws of the Company or applicable
statute or under any agreement known to us. To such counsel's
knowledge, except as disclosed in the Registration Statement
and the Prospectus, there are no preemptive or other rights to
subscribe for or to purchase or any restriction upon the
voting or transfer of any securities of the Company pursuant
to the Company's Certificate of Incorporation, as amended, or
bylaws or other governing documents or any agreements or other
18
instruments to which the Company is a party or by which it is
bound. Except as disclosed in the Registration Statement and
the Prospectus, to such counsel's knowledge as of the date
indicated in the Registration Statement and the Prospectus,
there was no outstanding option, warrant or other right
calling for the issuance of, and no commitment, plan or
arrangement to issue, any share of stock of the Company or any
security convertible into, exercisable for, or exchangeable
for stock of the Company. The Common Stock and the Shares
conform in all material respects to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(iv) This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(v) Neither the execution, delivery and performance
of this Agreement by the Company nor the consummation of any
of the transactions contemplated hereby (including, without
limitation, the issuance and sale by the Company of the
Shares) will give rise to a right to terminate or accelerate
the due date of any payment due under, or conflict with or
result in the breach of any term or provision of, or
constitute a default (or any event which with notice or lapse
of time, or both, would constitute a default) under, or
require consent or waiver under, or result in the execution or
imposition of any lien, charge, claim, security interest or
encumbrance upon any properties or assets of the Company
pursuant to the terms of any Material Agreement, or (a)
violate any judgment, decree or order known to such counsel or
(b) conflict with or violate any statute, rule or regulation
applicable to the Company or (c) violate any provision of the
Certificate of Incorporation, as amended, or bylaws of the
Company. For purposes of this opinion, "Material Agreement"
shall mean any agreement or other document filed (including
through incorporation by reference) as an exhibit to the
Registration Statement or any document incorporated by
reference in the Registration Statement.
(vi) No consent, approval, authorization or order of
any court or governmental agency or regulatory body is
required for the execution, delivery or performance of this
Agreement by the Company or the consummation of the
transactions contemplated hereby or thereby, except such as
have been obtained under the Securities Act and such as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the
several Underwriters (as to which such counsel expresses no
opinion).
19
(vii) To the best of such counsel's knowledge, there
is no litigation or governmental or other proceeding or
investigation, before any court or before or by any public
body or board pending or threatened in writing against, or
involving the assets, properties or businesses of, the Company
that is required to be disclosed in the Registration Statement
or the Prospectus that is not so disclosed.
(viii) The statements in the Prospectus under the
captions "Business - Our Product Development Program -
UK-279,276 - Pfizer Collaboration," "Business - Our Product
Development Program - Protease Modulation Discovery and
Development Programs - Other Protease Modulation Programs,"
"Business - Government Regulations," "Description of Capital
Stock,"Related Party Transactions" insofar as such statements
constitute a summary of documents referred to therein or
matters of law, are fair and accurate summaries in all
material respects of such documents or matters of law.
(ix) The Registration Statement, all Preliminary
Prospectuses and the Prospectus and each amendment or
supplement thereto (except for the financial statements and
schedules and other financial and statistical data included
therein, as to which such counsel expresses no opinion) comply
as to form in all material respects with the requirements of
the Securities Act and the Rules.
(x) The documents incorporated by reference in the
Prospectus (other than the financial statements and supporting
schedules included therein or omitted therefrom and financial
data, as to which such counsel expresses no opinion) when they
were filed with the Commission complied as to form in all
material respects with the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder.
(xi) The Registration Statement is effective under
the Securities Act, and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are threatened. Any
required filing of the Prospectus and any supplement thereto
pursuant to Rule 424(b) under the Securities Act has been made
in the manner and within the time period required by such Rule
424(b).
(xii) The offer and sale by the Company of: (a)
250,000 shares of common stock to stockholders of Vascular
Genomics, Inc. pursuant to the Stock Exchange and Registration
Rights Agreement dated July 23, 1999, (b) 1,300,000 shares of
common
20
stock to Sofinov Societe Financiere D'Innovation Inc. and IBT
International Biotechnology Trust plc under the Common Stock
Purchase Agreement dated August 18, 1999, (c) 700,000 shares
of common stock to Sofinov Societe Financiere D'Innovation
Inc., Finsbury Technology Trust and Westcoast and Company
under the Common Stock Purchase Agreement dated October 20,
1999 and (d) the 5.5% Convertible Senior Subordinated Notes
due 2006 dated August 18, 1999 and October 20, 1999 to
Artisian Equity Limited under the Note Purchase Agreement
dated as of August 18, 1999 for the aggregate principal amount
of $10,000,000, were at all relevant times duly registered or
exempt from the registration requirements of the Securities
Act and were duly registered or subject to an available
exemption from the registration requirements of the applicable
state securities or Blue Sky laws.
(xiii) To the best of such counsel's knowledge, no
holder of any security of the Company has the right to have
any security owned by such holder included in the Registration
Statement or to demand registration of any security owned by
such holder during the period ending 90 days after the date of
this Agreement.
(xiv) The Company is not 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.
To the extent deemed advisable by such counsel, they may rely
as to matters of fact on certificates of responsible officers of the Company and
public officials. Such counsel shall not be obligated to opine to any law other
than the laws of the State of California, the General Corporation Law of the
State of Delaware and the federal laws of the United States.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives and their counsel and
representatives of the independent public accountants of the Company, at which
conferences the contents of the Registration Statement and the Prospectus and as
they related to the matters set forth in the foregoing opinion were discussed.
While such counsel has not independently verified and is not passing upon and
does not assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement and the Prospectus
(except as specified in the foregoing opinion), on the basis of the foregoing,
no facts have come to the attention of such counsel which lead such counsel to
believe that the Registration Statement at the time it became effective (except
with respect to the financial statements and notes and schedules thereto and
other financial data included or incorporated by reference therein or omitted
therefrom, as to which such counsel need express no belief) contained any untrue
statement
21
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus as amended or supplemented (except with respect to the financial
statements, notes and schedules thereto and other financial data, as to which
such counsel need make no statement) on the date thereof and the date of such
opinion contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(g) The Representatives shall have received on each Closing
Date from Lyon & Lyon, special patent counsel for the Company, an
opinion, addressed to the Representatives and dated such Closing Date,
and stating in effect that:
(i) Such counsel has reviewed the information in the
Registration Statement at the time it became effective, and
the Prospectus, at the time it was filed with the Commission
or transmitted to the Commission for filing pursuant to Rule
424(b) under the Securities and Exchange Act of 1933, under
"Risk Factors -- If we are unable to protect our proprietary
technology, we may not be able to compete as effectively" and
"Business -- Patents and Proprietary Rights." Such counsel is
not aware of any facts that have led them at this time to
conclude that those sections present incorrect information
with respect to those matters handled by Lyon & Lyon.
(ii) Such counsel is not aware of any facts that have
led them at this time to conclude that the Company is
infringing or otherwise violating any patents, trade secrets,
trademarks, service marks, copyrights or other proprietary
information or know-how of any persons or that any person is
infringing or otherwise violating any of the Company's
patents, trade secrets, trademarks, service marks, copyrights
or other proprietary information or know-how of the Company.
(iii) To such counsel's knowledge, Corvas is the sole
assignee of each of the Patents listed under the heading
"United States Patents of Corvas International, Inc." on
Exhibit A to such opinion (the "U.S. Patents") and each of the
United States patent applications under the heading "Pending
United States Patent Applications of Corvas International,
Inc." on Exhibit B to such opinion (the "U.S. Applications").
To such counsel's knowledge, none of the U.S. Patents or U.S.
Applications are the subject of an interference, reexamination
or reissue application.
(iv) To such counsel's knowledge, Corvas is the sole
owner of each of the foreign patents listed under the heading
"Non-United States Patents of Corvas
22
International, Inc." on Exhibit C to such opinion (the
"Non-U.S. Patents") and each of the foreign patent
applications listed under the heading "Pending Non-United
States Patent Applications of Corvas International, Inc." on
Exhibit D to such opinion (the "Non-U.S. Applications"). To
such counsel's knowledge, except as noted on Exhibit C to such
opinion, such counsel has not been notified that any of the
Non-U.S. Patents or Non-U.S. Applications are subject to an
opposition, national invalidation proceeding or national court
proceeding.
(v) To such counsel's knowledge, no Patent or
Application has been permitted to lapse, except as a result of
instructions from Corvas.
(vi) Such counsel is not aware of any facts that have
led them at this time to conclude (i) that Corvas does not
have clear title to the Patents and Applications or (ii) that
any of the Patents are invalid or unenforceable or (iii) that
any Patent issue from one of the Applications would be invalid
or unenforceable.
(vii) Such counsel is aware of no instance in which
Corvas failed to disclose any material documents or
information or has made any misrepresentation to the
U.S.P.T.O. with respect to any of the U.S. Patents and U.S.
applications that are being prosecuted at the present time.
Such counsel understands that Corvas is diligently pursuing
the applications, I.E. is filing replies to communications
from the U.S. P.T.O. within the statutorily allowed periods
for response or extensions thereof.
(viii) To such counsel's knowledge, no prior art has
come to their attention that has led them at this time to
conclude that the subject matter claimed in the U.S. Patents
is not novel.
(ix) While there can be no guarantee that any
particular patent application will issue as a patent, to such
counsel's knowledge, they are aware of no facts which have led
them to conclude at this time that any of the U.S.
Applications listed in Exhibit B fails to describe subject
matter which is patentable under 35 U.S.C. Sections 101 and
102, that is, subject matter that is useful and novel; or
fails to include adequate written description and enablement,
I.E., how to make and use subject matter described therein
under 35 U.S.C. Section 112.
(x) To such counsel's knowledge, they have not
received notice of a pending or threatened action, suit,
proceeding or claim by others or governmental authorities that
Corvas has infringed or otherwise violated or is infringing or
23
otherwise violating any patents, copyrights, trademarks, trade
secrets or other intellectual property not owned by, or
licensed to, Corvas.
(xi) To such counsel's knowledge, except as noted on
Exhibit C, they have not received notice of any pending or
threatened actions, suits, proceedings or claims by
governmental authorities or others challenging the validity,
ownership, enforceability or scope of the Patents or the
Applications, other than the patent application proceedings
themselves.
(xii) To such counsel's knowledge, there are no
asserted or unasserted claims of any persons relating to the
scope or ownership of any of the Company's trademark
applications; there are no liens which have been filed against
any such applications; there are no material defects in the
preparation or filing of such applications; and such
applications are being diligently prosecuted.
(xiii) Such counsel has reviewed the Registration
Statement, at the time it became effective, and the
Prospectus, at the time it was filed with the Commission or
transmitted to the Commission for filing pursuant to Rule 424b
and the Securities Act of 1933, and insofar as the patent
matters handled by Lyon & Lyon including the patents and
patent applications listed on the attached Exhibits A to D
("the Corvas Patent Matters handled by Lyon & Lyon") are
concerned, such counsel is aware of no facts that have led
them to conclude that (a) (i) such Registration Statement, at
the time it became effective, contained any untrue statement
of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements in light of the circumstances under which they were
made, not misleading, or (ii) such Prospectus contains any
untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to
make the statements in light of the circumstances under which
they were made, not misleading; or (b) any statements which
concern the Corvas Patent matters handled by Lyon & Lyon in
the Registration Statement, at the time it became effective,
or the Prospectus, to the extent they constitute summaries of
law or documents or legal conclusions, are not correct in all
material respects and fairly present the Corvas Patent Matters
handled by Lyon & Lyon.
(h) The Representatives shall have received on each Closing
Date from Xxxxxx Xxxxxx White McAulliffe LLP, special patent counsel
for the Company, an opinion, addressed to the Representatives and dated
such Closing Date, and stating in effect that:
24
Such counsel is familiar with the technology used by the Company in its
business and the manner of its use thereof and have read the
Registration Statement and the Prospectus, including particularly the
portions of the Registration Statement and the Prospectus referring to
patents, trade secrets, trademarks, service marks or other proprietary
information or materials and:
(i) With respect to the Patent Applications listed in
Schedule 5(h), the information in the identified portions of
the Prospectus relating to U.S. patent matters, to the extent
that such information constitutes matters of law, summaries of
legal matters, documents or proceedings, or legal conclusions
is correct in all material respects and fairly presents the
information purported to be shown.
(ii) To such counsel's knowledge, with respect to
each of the Applications for Patent reflected in Schedule
5(h), such counsel is not aware of any material defect of form
in the preparation, filing or prosecution of these
Applications, and none of the Applications has been finally
rejected or abandoned.
(iii) To such counsel's knowledge, with respect to
those Patent Applications listed in Schedule 5(h) for which
such counsel has a duty in accordance with United States
Patent Law to disclose to the United States Patent and
Trademark Office information that may be material to
examination thereof, such counsel has complied with such duty.
(iv) To such counsel's knowledge with respect to the
Patent Applications listed in Schedule 5(h), (a) the
identified portions of the Registration Statement, at the time
the Registration Statement became effective, do not contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, and (b) the
identified portions of the Prospectus, at the date of such
Prospectus and the date hereof, do not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading.
(v) To such counsel's knowledge, the Company has not
received notice of any claim of infringement or other
violation of any patents held by others, and to such counsel's
knowledge, there is no pending or threatened action, suit,
proceeding
25
or claim by others that the Company is infringing or
otherwise violating a patent of any others.
(vi) Such counsel has obtained the results of a
search (the "Search") of the assignment records of the United
States Patent and Trademark Office, which states that it
reflects the information currently available from the United
States Patent and Trademark Office as of October 26, 2000. The
Search shows that the Company is listed as the sole assignee
of record of each of the Patent Applications listed in
Schedule 5(h), except for U.S. Patent Application Nos.
60/213,124, 60/220,970, 60/234,840 and 09/580,535 for which no
assignment information appears in the current U.S. Patent and
Trademark Office records. Executed assignments of the
inventors listed on U.S. Patent Application 09/580,535, to the
Company have been recorded with the United States Patent and
Trademark Office with a recordation date of August 3, 2000.
Assignment documents for U.S. Patent Application Nos.
60/213,124, 60/220,970 and 60/234,840 have been provided to
the Company for signature by the listed inventors.
(i) All proceedings taken in connection with the sale of the
Firm Shares and the Option Shares as herein contemplated shall be
reasonably satisfactory in form and substance to the Representatives,
and their counsel and the Underwriters shall have received from
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois) a favorable opinion,
addressed to the Representatives and dated such Closing Date, with
respect to the Shares, the Registration Statement and the Prospectus,
and such other related matters, as the Representatives may reasonably
request, and the Company shall have furnished to Skadden, Arps, Slate,
Xxxxxxx & Xxxx (Illinois) such documents as they may reasonably request
for the purpose of enabling them to pass upon such matters.
(j) The Representatives shall have received copies of the
Lock-up Agreements executed by each entity or person described in
Section 4(o).
(11) The Company shall have furnished or caused to be
furnished to the Representatives such further certificates or documents
as the Representatives shall have reasonably requested.
6. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees as follows:
26
(i) The Company will use its best efforts to cause
the Registration Statement, if not effective at the time of
execution of this Agreement, and any amendments thereto, to
become effective as promptly as possible. The Company shall
prepare the Prospectus in a form approved by the
Representatives and file such Prospectus pursuant to Rule
424(b) under the Securities Act not later than the
Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule
430A(a)(3) under the Securities Act.
(ii) The Company shall promptly advise the
Representatives (and if requested by you, will confirm such
notice in writing) (i) when the Registration Statement and any
amendment thereto shall have become effective, (ii) of the
receipt of any comments from the Commission or of any request
by the Commission for any amendment of the Registration
Statement or the Prospectus or for any additional information,
(iii) of the prevention or suspension of the use of any
Preliminary Prospectus or the Prospectus or of the issuance by
the Commission of any stop order suspending the effectiveness
of the Registration Statement or the suspension of
qualification of the Shares for the offering or sale in any
jurisdiction or the institution or threatening of any
proceeding for that purpose and (iv) of the receipt by the
Company of any notification with respect to the suspension of
the qualification of the Shares for sale in any jurisdiction
or the initiation or threatening of any proceeding for such
purpose. The Company shall give notice to the representatives
of its intent to file any amendment of the Registration
Statement or supplement to the Prospectus and the Company
shall not file any such amendment or supplement unless the
Company has furnished the Representatives a copy for its
review prior to filing and shall not file any such proposed
amendment or supplement to which the Representatives
reasonably object. The Company shall use its best efforts to
prevent the issuance of any such stop order or order
suspending the qualification or exemption of the Shares under
any state securities or Blue Sky laws and, if issued, to
obtain as soon as possible the withdrawal thereof.
(iii) The Company shall promptly advise the
Representatives in writing if, at any time when a prospectus
relating to the Shares is required to be delivered under the
Securities Act and the Rules or the Exchange Act, any change,
event, occurrence which could result in such a change, in the
Company's condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company or the
happening of any event occurs as a result of which the
Prospectus as then amended or supplemented would include any
untrue statement of a material
27
fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be
necessary to amend or supplement the Prospectus to comply with
the Securities Act or the Rules, the Company promptly shall
prepare and file with the Commission, subject to the second
sentence of paragraph (ii) of this Section 6(a), an amendment
or supplement which shall correct such statement or omission
or an amendment which shall effect such compliance.
(iv) The Company shall make generally available to
its security holders and to the Representatives as soon as
practicable, but not later than 45 days after the end of the
12-month period beginning at the end of the fiscal quarter of
the Company during which the Effective Date occurs (or 90 days
if such 12-month period coincides with the Company's fiscal
year), an earnings statement (which need not be audited) of
the Company, covering such 12-month period, which shall
satisfy the provisions of Section 11(a) of the Securities Act
or Rule 158 of the Rules.
(v) The Company shall furnish to the Representatives
and counsel for the Underwriters, without charge, as many
signed copies of the Registration Statement (including all
exhibits thereto and amendments thereof) as the
Representatives may reasonably request and to each other
Underwriter a copy of the Registration Statement (without
exhibits thereto) and all amendments thereof and, so long as
delivery of a prospectus by an Underwriter or dealer may be
required by the Securities Act or the Rules, as many copies of
any Preliminary Prospectus and the Prospectus and any
amendments thereof and supplements thereto as the
Representatives may reasonably request. If applicable, the
copies of the Registration Statement and Prospectus and each
amendment and supplement thereto furnished to the Underwriters
will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to
the extent permitted by Regulation S-T.
(vi) During the period of five years hereafter, the
Company will furnish the Representatives (i) as soon as
available, a copy of each report of the Company mailed to
stockholders or filed with the Commission, and (ii) from time
to time such other information concerning the Company as the
Representatives may reasonably request.
(vii) The Company shall cooperate with the
Representatives and their counsel in endeavoring to qualify
the Shares for offer and sale in connection with the
28
offering under the laws of such jurisdictions as the
Representatives may designate and shall maintain such
qualifications in effect so long as required for the
distribution of the Shares; provided, however, that the
Company shall not be required in connection therewith, as a
condition thereof, to qualify as a foreign corporation or to
execute a general consent to service of process in any
jurisdiction or subject itself to taxation as doing business
in any jurisdiction.
(viii) The Company, during the period when the
Prospectus is required to be delivered under the Securities
Act and the Rules or the Exchange Act, will file all documents
required to be filed with the Commission pursuant to Section
13, 14 or 15 of the Exchange Act within the time periods
required by the Exchange Act and the regulations promulgated
thereunder.
(ix) Without the prior written consent of CIBC World
Markets Corp., for a period of 90 days after the date of the
Prospectus, the Company and each of its individual directors
and executive officers shall not issue, sell or register with
the Commission (other than on Form S-8 or on any successor
form), or otherwise dispose of, directly or indirectly, any
equity securities of the Company (or any securities
convertible into, exercisable for or exchangeable for equity
securities of the Company), except for the issuance of the
Shares pursuant to the Registration Statement and the issuance
of shares pursuant to the Company's existing stock option plan
or bonus plan as described in the Registration Statement and
the Prospectus.
(x) On or before completion of this offering, the
Company shall make all filings required under applicable
securities laws (including any required registration under the
Exchange Act).
(xi) The Company has furnished to the Representatives
the Lock-up Agreements, in form and substance satisfactory to
the Representatives, signed by each of its current officers
and directors designated by the Representatives and listed on
SCHEDULE 4(o).
(xii) The Company will supply the Underwriters with
copies of all correspondence to and from, and all documents
issued to and by, the Commission in connection with the
registration of the Shares under the Securities Act.
(xiii) Prior to the Closing Date, the Company shall
furnish to the Underwriters, as soon as they have been
prepared, copies of any unaudited interim
29
consolidated financial statements of the Company, for any
periods subsequent to the periods covered by the financial
statements appearing in the Registration Statement and the
Prospectus.
(xiv) Prior to the Closing Date with respect to Firm
Shares, the Company will issue no press release or other
communications directly or indirectly and hold no press
conference with respect to the Company, the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of any of them, or the offering of the
Shares without the prior written consent of the
Representatives unless in the judgment of the Company and its
counsel, and after notification to the Representatives, such
press release or communication is required by law.
(xv) The Company will apply the net proceeds from the
offering of the Shares in the manner set forth under "Use of
Proceeds" in the Prospectus.
(xvi) The Company will not take, directly or
indirectly, any action designed to, or that might reasonably
be expected to, cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares.
(xvii) The Company will use its best efforts to
maintain the quotation of the Common Stock (including the
Shares) on the Nasdaq National Market and will file with the
Nasdaq National Market all documents and notices required by
the Nasdaq National Market of companies that have shares that
are traded in the over-the-counter market and quotations for
which are reported by the Nasdaq National Market.
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all costs and expenses
incident to the public offering of the Shares and the performance of
the obligations of the Company under this Agreement including those
relating to: (i) the preparation, printing, filing and distribution of
the Registration Statement including all exhibits thereto, each
Preliminary Prospectus, the Prospectus, all amendments and supplements
to the Registration Statement and the Prospectus, and the printing,
filing and distribution of this Agreement; (ii) the preparation and
delivery of certificates for the Shares to the Underwriters; (iii) the
registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of the various jurisdictions referred
to in Section 6(a)(vii), if any, including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
registration and qualification and the preparation,
30
printing, distribution and shipment of preliminary and supplementary
Blue Sky memoranda; (iv) the furnishing (including costs of shipping
and mailing) to the Representatives and to the Underwriters of copies
of each Preliminary Prospectus, the Prospectus and all amendments or
supplements to the Prospectus, and of the several documents required by
this Section to be so furnished, as may be reasonably requested for use
in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold; (v) the filing
fees of the NASD in connection with its review of the terms of the
public offering and reasonable fees and disbursements of counsel for
the Underwriters in connection with such review; (vi) inclusion of the
Shares for quotation on the Nasdaq National Market; and (vii) all
transfer taxes, if any, with respect to the sale and delivery of the
Shares by the Company to the Underwriters. Subject to the provisions of
Section 9, the Underwriters agree to pay, whether or not the
transactions contemplated hereby are consummated or this Agreement is
terminated, all costs and expenses incident to the performance of the
obligations of the Underwriters under this Agreement not payable by the
Company pursuant to the preceding sentence, including, without
limitation, the fees and disbursements of counsel for the Underwriters.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation,
legal and other expenses incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other Federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) any untrue statement
or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus or any amendment thereof or
supplement thereto, or any omission or alleged omission to state
therein or material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; (iii) in whole or in part, any breach
of the representations and warranties set forth in Section 4 hereof;
(iv) in whole or in part upon any failure of the Company to perform any
of its obligations hereunder or under law; or (v) any untrue statement
or alleged untrue statement of any material fact contained in any audio
or
31
visual materials prepared by the Company or based upon information
furnished by or on behalf of the Company used in connection with the
marketing of the Shares, including, without limitation, slides, videos,
films and tape recordings and statements communicated to securities
analysts employed by the Underwriters, provided, however, that such
indemnity shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) on account of any losses, claims,
damages or liabilities arising from the sale of the Shares to any
person by such Underwriter if such untrue statement or omission or
alleged untrue statement or omission was made in such Preliminary
Prospectus, the Registration Statement or the Prospectus, or such
amendment or supplement thereto, in reliance upon and in conformity
with information furnished in writing to the Company by the
Representatives on behalf of any Underwriter expressly for use therein.
This indemnity agreement will be in addition to any liability which the
Company may otherwise have. Notwithstanding the foregoing, the Company
will not be liable to any Underwriter or any person controlling such
Underwriter with respect to any such untrue statement or omission made
in any Preliminary Prospectus that is corrected in the Prospectus (or
any amendment or supplement thereto) if the person asserting any such
loss, claim, damage or liability purchased Shares from such Underwriter
but was not sent or given a copy of the Prospectus (as amended or
supplemented) at or prior to the written confirmation of the sale of
such Shares to such person in any case where such delivery of the
Prospectus (as amended or supplemented) is required by the Act and it
shall have been determined by a final judgment of a court of competent
jurisdiction that any Underwriter or any person controlling such
Underwriter would not have incurred such loss, claim, damage or
liability had the Prospectus (as amended or supplemented) been
delivered or sent, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company
with Section 6(a)(iii) or 6(a)(v) of this Agreement.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, each director of the Company,
and each officer of the Company who signs the Registration Statement,
to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus,
or any amendment thereof or supplement thereto, contained in the (i)
concession and reallowance figures appearing under the caption
"Underwriting" and (ii) the stabilization information contained under
the caption "Underwriting" in the Prospectus; provided, however, that
the obligation of each Underwriter to indemnify the Company (including
any controlling person, director
32
or officer thereof) shall be limited to the net proceeds received by
the Company from such Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of
all papers served. No indemnification provided for in Section 7(a) or
7(b) shall be available to any party who shall fail to give notice as
provided in this Section 7(c) if the party to whom notice was not given
was unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice but the omission
so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to
any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and
the approval by the indemnified party of such counsel, the indemnifying
party shall not be liable to such indemnified party for any legal or
other expenses, except as provided below and except for the reasonable
costs of investigation subsequently incurred by such indemnified party
in connection with the defense thereof. The indemnified party shall
have the right to employ its counsel in any such action, but the fees
and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying
parties, (ii) the indemnified party shall have been advised by counsel
that there may be one or more legal defenses available to it which are
different from or in addition to those available to the indemnifying
party (in which case the indemnifying parties shall not have the right
to direct the defense of such action on behalf of the indemnified
party) or (iii) the indemnifying parties shall not have employed
counsel to assume the defense of such action within a reasonable time
after notice of the commencement thereof, in each of which cases the
fees and expenses of counsel shall be at the expense of the
indemnifying parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without
its written consent, which consent shall not be unreasonably withheld
or delayed.
33
8. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 7(a) or 7(b) is due in accordance with its terms but for any reason is
held to be unavailable to or insufficient to hold harmless an indemnified party
under Section 7(a) or 7(b), then each indemnifying party shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by any person entitled hereunder
to contribution from any person who may be liable for contribution) to which the
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Shares or, if such allocation
is not permitted by applicable law or indemnification is not available as a
result of the indemnifying party not having received notice as provided in
Section 7 hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as (x) the total proceeds from the offering
(net of underwriting discounts but before deducting expenses) received by the
Company, as set forth in the table on the cover page of the Prospectus, bear to
(y) the underwriting discounts received by the Underwriters, as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company or
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact related to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 8
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above. Notwithstanding
the provisions of this Section 8, (i) in no case shall any Underwriter (except
as may be provided in the Agreement Among Underwriters) be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder; and (ii) the Company shall be liable
and responsible for any amount in excess of such underwriting discount;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act shall have the same rights to contribution
as such Underwriter, and each person, if any, who controls the Company within
the meaning of the Section 15 of the Securities Act or Section 20(a)
34
of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) in the immediately preceding sentence of this Section 8. Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a
claim for contribution may be made against another party or parties under this
Section, notify such party or parties from whom contribution may be sought, but
the omission so to notify such party or parties from whom contribution may be
sought shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise
than under this Section. No party shall be liable for contribution with respect
to any action, suit, proceeding or claim settled without its written consent.
The Underwriter's obligations to contribute pursuant to this Section 8 are
several in proportion to their respective underwriting commitments and not
joint.
9. TERMINATION. This Agreement may be terminated with
respect to the Shares to be purchased on a Closing Date by the Representatives
by notifying the Company at any time
(a) in the absolute discretion of the Representatives at or
before any Closing Date: (i) if on or prior to such date, any domestic
or international event or act or occurrence has materially disrupted,
or in the opinion of the Representatives will in the future materially
disrupt, the securities markets; (ii) if there has occurred any new
outbreak or material escalation of hostilities or other calamity or
crisis the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Representatives,
inadvisable to proceed with the offering; (iii) if there shall be such
a material adverse change in general financial, political or economic
conditions or the effect of international conditions on the financial
markets in the United States is such as to make it, in the judgment of
the Representatives, inadvisable or impracticable to market the Shares;
(iv) if trading in the Shares has been suspended by the Commission or
trading generally on the New York Stock Exchange, Inc., on the American
Stock Exchange, Inc. or the Nasdaq National Market has been suspended
or limited, or minimum or maximum ranges for prices for securities
shall have been fixed, or maximum ranges for prices for securities have
been required, by said exchanges or by order of the Commission, the
NASD, or any other governmental or regulatory authority; or (v) if a
banking moratorium has been declared by any state or Federal authority;
or (vi) if, in the judgment of the Representatives, there has occurred
a Material Adverse Effect, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 5 shall not have been fulfilled when and as
required by this Agreement.
35
If this Agreement is terminated pursuant to any of its
provisions, the Company shall not be under any liability to any Underwriter, and
no Underwriter shall be under any liability to the Company, except that (y) if
this Agreement is terminated by the Representatives or the Underwriters because
of any failure, refusal or inability on the part of the Company to comply with
the terms or to fulfill any of the conditions of this Agreement, the Company
will reimburse the Underwriters for all out-of-pocket expenses (including the
reasonable fees and disbursements of their counsel) incurred by them in
connection with the proposed purchase and sale of the Shares or in contemplation
of performing their obligations hereunder and (z) no Underwriter who shall have
failed or refused to purchase the Shares agreed to be purchased by it under this
Agreement, without some reason sufficient hereunder to justify cancellation or
termination of its obligations under this Agreement, shall be relieved of
liability to the Company or to the other Underwriters for damages occasioned by
its failure or refusal.
10. SUBSTITUTION OF UNDERWRITERS. If one or more of the
Underwriters shall fail (other than for a reason sufficient to justify the
cancellation or termination of this Agreement under Section 9) to purchase on
any Closing Date the Shares agreed to be purchased on such Closing Date by such
Underwriter or Underwriters, the Representatives may find one or more substitute
underwriters to purchase such Shares or make such other arrangements as the
Representatives may deem advisable or one or more of the remaining Underwriters
may agree to purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares
that all the Underwriters are obligated to purchase on such Closing
Date, then each of the nondefaulting Underwriters shall be obligated to
purchase such Shares on the terms herein set forth in proportion to
their respective obligations hereunder; provided, that in no event
shall the maximum number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 10
by more than one-ninth of such number of Shares without the written
consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date,
then the Company shall be entitled to one additional business day
within which it may, but is not obligated to, find one or more
substitute underwriters reasonably satisfactory to the Representatives
to purchase such Shares upon the terms set forth in this Agreement.
36
In any such case, either the Representatives or the Company
shall have the right to postpone the applicable Closing Date for a period of not
more than five business days in order that necessary changes and arrangements
(including any necessary amendments or supplements to the Registration Statement
or Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company and without liability
on the part of the Company, except in both cases as provided in Sections 6(b),
7, 8 and 9. The provisions of this Section shall not in any way affect the
liability of any defaulting Underwriter to the Company or the nondefaulting
Underwriters arising out of such default. A substitute underwriter hereunder
shall become an Underwriter for all purposes of this Agreement.
11. MISCELLANEOUS. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of the Underwriters set forth in or made pursuant to this
Agreement shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in Sections 7 and 8
hereof, and shall survive delivery of and payment for the Shares. The
provisions of Sections 6(b), 7, 8 and 9 shall survive the termination or
cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters and the Company and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons controlling any of
the Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing
and mailed or delivered or by telephone or telegraph if subsequently confirmed
in writing, (a) if to the Representatives, c/o CIBC World Markets Corp., Xxx
Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxxx Xxxxxx, with
a copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois), 000 Xxxx Xxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000 Attention: Xxxx X. Xxxxxxxxx, and (b) if to the
Company, to its agent for service as such agent's address appears on the cover
page of the Registration Statement with a
37
copy to Xxxxxx Godward LLP, 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxxx,
Xxxxxxxxxx 00000-0000 Attention: Xxxxxxx X. Xxxxxx, Esq.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflict of laws.
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
38
Please confirm that the foregoing correctly sets forth the
agreement among us.
Very truly yours,
CORVAS INTERNATIONAL, INC.
By __________________________________
Xxxxxxx X. Xxxxx
President and Chief Executive Officer
Confirmed:
CIBC WORLD MARKETS CORP.
PRUDENTIAL SECURITIES INCORPORATED
U.S. BANCORP XXXXX XXXXXXX
Acting severally on behalf of itself
and as representative of the several
Underwriters named in Schedule I
annexed hereto.
By CIBC WORLD MARKETS CORP.
By ______________________
Title:
39
SCHEDULE I
Number of
Firm Shares to
Name Be Purchased
---- ------------
CIBC World Markets Corp.
Prudential Securities Incorporated
U.S. Bancorp Xxxxx Xxxxxxx
-------------
Total =============
40
SCHEDULE 4(o)
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxx, Ph.D.
Xxxxxxx X. Xxxxxx
M. Xxxxx Xxxxx, Ph.D.
Xxxxx X. Xxxx
J. Xxxxxx Xxxxxxxxxx
Xxxxxx X. Xxxxx, M.D.
Xxxxxxx Xxxxxx, M.D.
Xxxxxx Xxxxxxx
41
SCHEDULE 5(h)
U.S. Patent Application Serial No. 60/166,391
U.S. Patent Application Serial No. 60/179,982
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