Document:

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                                                                    EXHIBIT 10.6

                THIRD AMENDMENT TO CREDIT AND SECURITY AGREEMENT

         This Third Amendment to Credit and Security Agreement (the
"AMENDMENT"), dated as of September 20, 2001, is made by and between CXR TELECOM
CORPORATION, a Delaware corporation ("CXR") and XET CORPORATION, a New Jersey
corporation ("XET") (CXR and XIT shall collectively be referred to herein as the
"BORROWER"), and WELLS FARGO BUSINESS CREDIT, INC., a Minnesota corporation (the
"LENDER").

                                    RECITALS
                                    --------

         The Borrower and the Lender have entered into a Credit and Security
Agreement dated as of August 16, 2000 as amended by that certain First Amendment
to Credit and Security Agreement dated as of September 29, 2000 and that certain
Second Amendment to Credit and Security Agreement dated as of November 29, 2000
(the "CREDIT AGREEMENT"). Capitalized terms used in these recitals have the
meanings given to them in the Credit Agreement unless otherwise specified.

         The Lender is willing to amend the Credit Agreement pursuant to the
terms and conditions set forth herein. The Borrower is entering into this
Amendment with the understanding and agreement that, except as specifically
provided herein, none of the Lender's rights or remedies as set forth in the
Credit Agreement is being waived or modified by the terms of this Amendment.

         NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:

         1. DEFINED TERMS. Capitalized terms used in this Amendment which are
defined in the Credit Agreement shall have the same meanings as defined therein,
unless otherwise defined herein.

         2. AMENDMENTS TO ARTICLE I - DEFINITIONS

                  (a) Section 1.1 of the Credit Agreement is hereby amended and
restated to include the following definitions:

                  "BOOK NET WORTH" means the aggregate of the common and
         preferred stockholders' equity in the Borrower, determined in
         accordance with GAAP.

                  "NET INCOME" means the fiscal year-to-date after-tax net
         income from continuing operations as determined in accordance with
         GAAP.

         3. AMENDMENTS TO ARTICLE VI - BORROWER'S AFFIRMATIVE COVENANTS

                  (a) MINIMUM DEBT SERVICE COVERAGE RATIO. Section 6.12 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:

         "Section 6.12 MINIMUM DEBT SERVICE COVERAGE RATIO. The Borrower will
         maintain a Debt Service Coverage Ratio, measured quarterly on a
         consolidated basis, of not less than 1.00 to 1.00 during each fiscal
         quarter for the fiscal year ending December 31, 2001."

<PAGE>

                  (b) MINIMUM BOOK NET WORTH. Section 6.13 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

         "Section 6.13 MINIMUM BOOK NET WORTH. The Borrower will cause MicroTel
         and its subsidiaries to maintain a Book Net Worth, on a consolidated
         basis, of not less than Six Million Two Hundred Fifty Thousand Dollars
         ($6,250,000) for the fiscal year ending December 31, 2001."

                  (c) MINIMUM CUMULATIVE NET INCOME. Section 6.14 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

         "Section 6.14 MINIMUM CUMULATIVE NET INCOME. The Borrower will maintain
         its Cumulative Net Income, on a consolidated basis, of not less than
         the amount set forth opposite the applicable date:

                                                              Minimum Cumulative
                                                              ------------------
                           Date                                   Net Income
                           ----                                   ----------

                      March 31, 2001                               $200,000
                       June 30, 2001                               $250,000
                    September 30, 2001                             $150,000
                     December 31, 2001                             $125,000"

                  (d) Section 6.15 of the Credit Agreement is hereby deleted in
its entirety.

         4. NO OTHER CHANGES. Except as explicitly amended by this Amendment,
all of the terms and conditions of the Credit Agreement shall remain in full
force and effect and shall apply to any Advance or Letter of Credit thereunder.

         5. EFFECTIVENESS OF THIS AMENDMENT. Lender must have received the
following items, in form and content acceptable to Lender, before this Amendment
is effective and before Lender is required to extend any credit to Borrower as
provided for by this Amendment.

                  (a) AMENDMENT. This Amendment fully executed in a sufficient
number of counterparts for distribution to Lender and Borrower.

                  (b) CONSENT. The Consent attached to this Amendment, fully
executed in a sufficient number of counterparts for distribution to Lender and
Borrower.

                  (c) REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth herein and in the Credit Agreement must be true and
correct.

                  (d) OTHER REQUIRED DOCUMENTATION. All other documents and
legal matters in connection with the transaction contemplated by this Amendment
shall have been delivered or executed or recorded and shall be in form and
substance satisfactory to Lender.

         6. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Lender as follows:

                                       2

<PAGE>

                  (a) The Borrower has all requisite power and authority to
execute this Amendment and to perform all of its obligations hereunder, and this
Amendment has been duly executed and delivered by the Borrower and constitutes
the legal, valid and binding obligation of the Borrower, enforceable in
accordance with its terms.

                  (b) The execution, delivery and performance by the Borrower of
this Amendment have been duly authorized by all necessary corporate action and
do not (i) require any authorization, consent or approval by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, (ii) violate any provision of any law, rule or regulation or of any
order, writ, injunction or decree presently in effect, having applicability to
the Borrower, or the articles of incorporation or by-laws of the Borrower, or
(iii) result in a breach of or constitute a default under any indenture or loan
or credit agreement or any other agreement, lease or instrument to which the
Borrower is a party or by which it or its properties may be bound or affected.

                  (c) All of the representations and warranties contained in
Article V of the Credit Agreement are correct on and as of the date hereof as
though made on and as of such date, except to the extent that such
representations and warranties relate solely to an earlier date.

         7. REFERENCES. All references in the Credit Agreement to "this
Agreement" shall be deemed to refer to the Credit Agreement as amended hereby;
and any and all references in the Loan Documents to the Credit Agreement shall
be deemed to refer to the Credit Agreement as amended hereby.

         8. NO WAIVER. The execution of this Amendment and acceptance of any
documents related hereto shall not be deemed to be a waiver of any Default or
Event of Default under the Credit Agreement or breach, default or event of
default under any Loan Document or other document held by the Lender, whether or
not known to the Lender and whether or not existing on the date of this
Amendment.

         9. RELEASE. The Borrower, and Guarantor by signing the Acknowledgment
and Agreement of Guarantor set forth below, each hereby absolutely and
unconditionally releases and forever discharges the Lender, and any and all
participants, parent corporations, subsidiary corporations, affiliated
corporations, insurers, indemnitors, successors and assigns thereof, together
with all of the present and former directors, officers, agents and employees of
any of the foregoing, from any and all claims, demands or causes of action of
any kind, nature or description, whether arising in law or equity or upon
contract or tort or under any state or federal law or otherwise, which the
Borrower or Guarantor has had, now has or has made claim to have against any
such person for or by reason of any act, omission, matter, cause or thing
whatsoever arising from the beginning of time to and including the date of this
Amendment, whether such claims, demands and causes of action are matured or
unmatured or known or unknown. It is the intention of the parties in executing
this release that the same shall be effective as a bar to each and every claim,
demand and cause of action specified and in furtherance of this intention each
waives and relinquishes all rights and benefits under Section 1542 of the Civil
Code of the State of California, which provides:

                  "A general release does not extend to claims which the
         creditor does not know or suspect to exist in his favor at the time of
         executing the release, which if known by him might have materially
         affected his settlement with the debtor."

                                       3

<PAGE>

         The parties acknowledge that each may hereafter discover facts
different from or in addition to those now known or believed to be true with
respect to such claims, demands, or causes of action and agree that this
instrument shall be and remain effective in all respects notwithstanding any
such differences or additional facts

         10. COSTS AND EXPENSES. The Borrower hereby reaffirms its agreement
under the Credit Agreement to pay or reimburse the Lender on demand for all
costs and expenses incurred by the Lender in connection with the Credit
Agreement, the Loan Documents and all other documents contemplated thereby,
including without limitation all reasonable fees and disbursements of legal
counsel. Without limiting the generality of the foregoing, the Borrower
specifically agrees to pay all fees and disbursements of counsel to the Lender
for the services performed by such counsel in connection with the preparation of
this Amendment and the documents and instruments incidental hereto. The Borrower
hereby agrees that the Lender may, at any time from time to time in its sole
discretion and without further authorization by the Borrower, make a loan to the
Borrower under the Credit Agreement, or apply the proceeds of any loan, for the
purpose of paying any such fees, disbursements, costs and expenses.

         11. MISCELLANEOUS. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which counterparts, taken together, shall constitute one and
the same instrument.

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.

WELLS FARGO BUSINESS CREDIT, INC.,          CXR TELECOM CORPORATION
a Minnesota corporation

By: /S/ VINCENT L. MADDELA                       By: /S/ RANDOLPH D. FOOTE
    ---------------------------------                ---------------------------
    Name:  VINCENT L. MADDELA                        Name:  RANDOLPH D. FOOTE
           --------------------------                       --------------------
    Title: ASST. VICE PRESIDENT                      Title: VP - CFO
           --------------------------                       --------------------

                                                 XET CORPORATION

                                                 By: /S/ RANDOLPH D. FOOTE
                                                     ---------------------------
                                                     Name:  RANDOLPH D. FOOTE
                                                            --------------------
                                                     Title: VP - CFO
                                                            --------------------

                                       4<PAGE>
EXHIBIT 10.57
KEANE EMPLOYMENT AGREEMENT

                              EMPLOYMENT AGREEMENT

                                 BY AND BETWEEN

                           CORVAS INTERNATIONAL, INC.

                                       AND

                                STEPHEN F. KEANE

                             DATED: AUGUST 20, 2001

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

1.  EMPLOYMENT.................................................................1

2.  LOYAL AND CONSCIENTIOUS PERFORMANCE; NONCOMPETITION........................2

3.  COMPENSATION OF EXECUTIVE..................................................2

4.  TERMINATION BY COMPANY.....................................................2

5.  TERMINATION BY EXECUTIVE...................................................4

6.  COMPENSATION UPON TERMINATION..............................................4

7.  CONFIDENTIAL INFORMATION; EXECUTIVE'S DUTIES UPON TERMINATION..............7

8.  ASSIGNMENT AND BINDING EFFECT..............................................7

9.  NOTICES....................................................................7

10. CHOICE OF LAW..............................................................8

11. INTEGRATION................................................................8

12. AMENDMENT..................................................................8

13. WAIVER.....................................................................8

14. SEVERABILITY...............................................................8

15. INTERPRETATION; CONSTRUCTION...............................................8

16. REPRESENTATIONS AND WARRANTIES.............................................9

17. COUNTERPARTS...............................................................9

                                       i.
<PAGE>

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
effective as of August 20, 2001, by and between CORVAS INTERNATIONAL, INC., a
Delaware corporation (the "Company"), and STEPHEN F. KEANE ("Executive"). The
Company and Executive are hereinafter collectively referred to as the "Parties,"
and individually referred to as a "Party."

                                    RECITALS

         A. The Company desires assurance of the association and services of
Executive in order to retain Executive's experience, skills, abilities,
background and knowledge, and is willing to engage Executive's services on the
terms and conditions set forth in this Agreement.

         B. Executive desires to be in the employ of the Company, and is willing
to accept such employment on the terms and conditions set forth in this
Agreement.

                                    AGREEMENT

         Now, therefore, in consideration of the mutual promises and covenants
set forth herein, and for other good and valuable consideration, the Parties
agree as follows:

1.       EMPLOYMENT.

         1.1 The Company hereby employs Executive, and Executive hereby accepts
employment by the Company, upon the terms and conditions set forth in this
Agreement, effective as of the date first set forth above ("Effective Date").

         1.2 Executive shall be the Vice President, Corporate Development of the
Company and shall serve in such other capacity or capacities as the President or
the Company may from time to time prescribe.

         1.3 Executive shall do and perform all services, acts or things
necessary or advisable to manage and conduct the business of his department,
provided, however, that at all times during his employment Executive shall be
subject to the direction and policies from time to time established by the
President of the Company. Executive's duties shall include, but not be limited
to, providing strong leadership in the development and execution of the
Company's corporate development activities.

         1.4 Unless the Parties otherwise agree in writing, during the term of
this Agreement, Executive shall perform the services he is required to perform
pursuant to this Agreement at the Company's offices, located at 3030 Science
Park Road, San Diego, California, or at any other place at which the Company
maintains an office; provided, however, that the Company may from time to time
require Executive to travel temporarily to other locations in connection with
the Company's business.

                                       1.
<PAGE>

2.       LOYAL AND CONSCIENTIOUS PERFORMANCE; NONCOMPETITION.

         2.1 During his employment by the Company, Executive shall devote his
full business energies, interest, abilities and productive time to the proper
and efficient performance of his duties under this Agreement.

         2.2 During the term of this Agreement, Executive shall not engage in
competition with the Company and/or its affiliates, either directly or
indirectly, in any manner or capacity, as adviser, principal, agent, partner,
officer, director, employee, member of any association or otherwise, in any
phase of the business of developing, manufacturing and marketing medical
products which are in the same field of use or which otherwise compete with the
products or proposed products of the Company and/or its affiliates. Ownership by
Executive, as a passive investment, of less than one percent (1%) of the
outstanding shares of capital stock of any corporation with one or more classes
of its capital stock listed on a national securities exchange or publicly traded
in the over-the-counter market shall not constitute a breach of this paragraph.

3.       COMPENSATION OF EXECUTIVE.

         3.1 While employed by the Company, the Company shall pay Executive a
salary (the "Base Salary") of $220,000 per year, less standard deductions and
withholdings, payable in regular periodic payments in accordance with Company
policy. Such salary shall be prorated for any partial year of employment on the
basis of a 365-day fiscal year. Executive shall receive a one-time hiring bonus
gross cash payment ("Hiring Bonus") of $20,000 on the first payroll following
ninety (90) days from the Effective Date.

         3.2 Executive's compensation may be changed from time to time by mutual
agreement of Executive and the President or Board of Directors of the Company
("Board").

         3.3 Executive's performance shall be reviewed by the President or Board
on a periodic basis (but not less than once in each fiscal year during the term
of this Agreement). As part of such review, the President and the Board, at
their sole discretion, shall consider appropriate adjustments to Executive's
base salary, grant of stock options and the potential for performance based
bonuses.

         3.4 All of Executive's compensation shall be subject to customary
withholding taxes and any other employment taxes as are commonly required to be
collected or withheld by the Company.

         3.5 Executive shall, in accordance with Company policy, be eligible to
participate in the benefits described in The Employee Benefits Summary, attached
as Exhibit A.

4.       TERMINATION BY COMPANY. Executive's employment with the Company may be
terminated by the Company under the following conditions:

         4.1 DEATH. Upon Executive's death, in which case termination shall be
effective on the last day of the month in which Executive's death occurs.

                                       2.
<PAGE>

         4.2 DISABILITY. If Executive becomes completely disabled due to
physical or mental illness as defined under Section 4.2.1, or if Executive shall
be absent from duties on a full-time basis due to illness for six consecutive
months, and shall not have returned to the performance of duties within ten (10)
days after receiving written notice of termination following such six-month
period.

                  4.2.1 The term "completely disabled" as used in this Agreement
shall mean the inability of Executive to perform the essential functions of his
position under this Agreement by reason of any incapacity, physical or mental,
which the Board, based upon medical advice or an opinion provided by a licensed
physician acceptable to the Board and approved by the Executive, which approval
shall not be unreasonably withheld, determines to have incapacitated Executive
from satisfactorily performing any or all essential functions of his position
for the Company during the foreseeable future. Based upon such medical advice or
opinion, the determination of the Board shall be final and binding and the date
such determination is made shall be the date of such complete disability for
purposes of this Agreement.

         4.3 FOR CAUSE. The Company may terminate Executive's employment under
this Agreement "for cause" ("For Cause") by delivery of written notice to
Executive specifying the cause or causes relied upon for such termination. Any
notice of termination given pursuant to this Section 4.3 shall effect
termination as of the date specified in such notice or, in the event no such
date is specified, on the last day of the month in which such notice is
delivered or deemed delivered as provided in Section 9 below. Grounds for the
Company to terminate this Agreement For Cause shall be limited to the occurrence
of any of the following events:

                  4.3.1 Executive is in material breach of any provision of this
Agreement;

                  4.3.2 Executive's engaging or in any manner participating in
any activity which is directly competitive with or intentionally injurious to
the Company or which violates any provision of Section 7 of this Agreement;

                  4.3.3 Executive's commission of any fraud against the Company;

                  4.3.4 Executive's intentional improper use or appropriation
for his personal use or benefit of any funds or properties of the Company not
authorized by the Board to be so used or appropriated; and

                  4.3.5 Executive's conviction of any crime involving dishonesty
or moral turpitude.

         4.4 WITHOUT CAUSE. The Company may terminate the Executive's employment
without cause ("Without Cause") upon delivery of written notice to the Executive
at any time. Any notice of termination given pursuant to this Section 4.4 shall
effect termination as of the date specified in such notice or, in the event no
such date is specified, on the last day of the month in which such notice is
delivered or deemed deliverable as provided in Section 9 below.

                                       3.
<PAGE>

5.       TERMINATION BY EXECUTIVE. Executive may terminate Executive's
employment with the Company (a) for Sufficient Reason (as defined below in
Section 5.1) within one hundred eighty (180) consecutive days following the
occurrence of an event or events constituting such Sufficient Reason; or (b)
without Sufficient Reason.

         5.1 "Sufficient Reason" shall mean any one or more of the following
events:

                  5.1.1 The occurrence of a Change in Control of the Company (as
defined below in Section 6.5);

                  5.1.2 The failure by the Company to comply with any material
provision of this Agreement and such failure has continued for a period of
thirty (30) days after notice of such failure has been given by Executive to the
Company;

6.       COMPENSATION UPON TERMINATION.

         6.1 DEATH. If Executive's employment shall be terminated by death, the
Company shall pay to Executive's designee(s), beneficiary(ies), or if there is
no such designee or beneficiary, to Executive's estate, Executive's base salary
and accrued benefits through the date of termination at the rate in effect at
the time of termination, and the Company shall thereafter have no further
obligations to Executive under this Agreement.

         6.2 DISABILITY. If Executive is terminated due to disability as
provided in Section 4.2, the Company shall pay to Executive his base salary and
accrued benefits through the date of termination at the rate in effect at the
time of termination, and the Company shall thereafter have no further
obligations to Executive under this Agreement

         6.3 FOR CAUSE, WITHOUT SUFFICIENT REASON. If Executive's employment
shall be terminated by the Company For Cause, or if Executive terminates
employment hereunder without Sufficient Reason, the Company shall pay Executive
his base salary and accrued benefits through the date of termination at the rate
in effect at the time of the notice of termination, and the Company shall
thereafter have no further obligations to Executive under this Agreement.

         6.4 WITHOUT CAUSE, SUFFICIENT REASON. If (a) Executive shall terminate
Executive's employment with the Company or the New Company (as defined in
Section 6.5.2 herein) for Sufficient Reason under Section 5.1 of this Agreement;
or (b) within one hundred eighty (180) days following the occurrence of a Change
in Control, Executive's employment with the New Company is terminated by the New
Company Without Cause (as defined in Section 4.3 herein) the Executive shall be
entitled to the Executive's base salary and accrued and benefits through the
date of termination. In addition, upon Executive's furnishing to the New Company
an effective release and waiver of claims in the form attached hereto as Exhibit
B, Executive shall be entitled to the following:

                  6.4.1 A lump sum equivalent to Executive's annual base salary
in effect at the time of termination for a period of one year;

                                       4.
<PAGE>

                  6.4.2 Accelerated vesting of unvested stock options of the
Company held by Executive as provided in and governed by the terms of the
Company's stock option plans;

                  6.4.3 Continued receipt for one year of all employee benefit
plans and programs in which the Executive and Executive's family were entitled
to participate immediately prior to the date of termination, provided that the
Executive's continued participation is possible under the general terms and
provisions of such plans and programs. In the event that the Executive's
participation in any such plan or program is barred, the Company shall arrange
to provide the Executive with benefits substantially similar to those which the
Executive would otherwise have been entitled to receive under such plans and
programs from which his continued participation is barred;

                  6.4.4 Outplacement services provided by a reputable
outplacement counselor selected by the Company or the New Company for a period
of six (6) months following termination. The Company or the New Company will
assume the cost of all such outplacement services which shall not exceed $7,500.
In no event will a cash payment be made in lieu of outplacement benefits.

                  6.4.5 In the event that any payment or benefit received or to
be received by Executive pursuant to this Section 6.4 would (i) constitute a
"parachute payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code") and (ii) but for this Section 6.4.5 , all
or a portion of such payment would be subject to the excise tax imposed by
Section 4999 of the Code (the "Excise Tax"), then, subject to the provisions of
Section 6.4.6 hereof, such Payment shall be reduced to the largest amount which
the Executive, in the Executive's discretion, determines would result in no
portion of the Payment being subject to the Excise Tax. The determination by the
Executive of any required reduction pursuant to this Section 6.4.5 shall be
conclusive and binding upon the Company. The Company shall reduce a Payment in
accordance with this Section 6.4.5 only upon written notice by the Executive
indicating the amount of such reduction, if any. If the Internal Revenue Service
(the "IRS") determines that a Payment is subject to the Excise Tax, then Section
6.4.6 hereof shall apply, and the enforcement of Section 6.4.6 shall be the
exclusive remedy to the Company for a failure by the Executive to reduce the
Payment so that no portion thereof is subject to the Excise Tax.

                  6.4.6 If, notwithstanding any reduction described in Section
6.4.5 hereof (or in the absence of any such reduction), the IRS determines that
the Executive is liable for the Excise Tax as a result of the receipt of a
Payment, then the Executive shall be obligated to pay back to the Company,
within thirty (30) days after final IRS determination, an amount of the Payment
equal to the "Repayment Amount". The Repayment Amount with respect to a Payment
shall be the smallest such amount, if any, as shall be required to be paid to
the Company so that the Executive'S net proceeds with respect to any Payment
(after taking into account the payment of the Excise Tax imposed on such
Payment) shall be maximized. Notwithstanding the foregoing, the Repayment Amount
with respect to a Payment shall be zero if a Repayment Amount of more than zero
would not eliminate the Excise Tax imposed on such Payment. If the Excise Tax is
not eliminated pursuant to this Section 6.4.6, the Executive shall pay the
Excise Tax.

                                       5.
<PAGE>

         All payments provided for in this Section 6.4 to be made to Executive
shall be made in one lump sum within thirty (30) calendar days of Executive's
date of termination unless otherwise directed by Executive.

         6.5 CHANGE IN CONTROL.

                  6.5.1 A "Change in Control" of the Company shall be deemed to
have occurred if and when:

                           (i) The business or businesses of the Company for
which Executive's services are principally performed are disposed of by the
Company pursuant to a partial or complete liquidation of the Company, a sale of
assets or otherwise; or

                           (ii) The Company is a participant in a merger or
consolidation in which the Company does not survive as an independent company
and shareholders of the Company immediately prior to such transaction fail to
retain at least fifty percent (50%) of the voting power of the Company
immediately following such transaction; or

                           (iii) The Company is a participant in a reverse
merger in which the Company is the surviving entity but the shares of Common
Stock outstanding immediately preceding the merger are converted by virtue of
the merger into other property, whether in the form of securities, cash or
otherwise, and in which the stockholders of the Company immediately prior to
such reverse merger own less than fifty percent (50%) of the Company's voting
power immediately after the transaction; or

                           (iv) An acquisition by any person, entity or group
within the meaning of Section 13(d) or 14(d) of the Exchange Act, or any
comparable successor provisions (excluding any employee benefit plan, or related
trust, sponsored or maintained by the Company or subsidiary of the Company or
other entity controlled by the Company) of the beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable
successor rule) of securities of the Company representing at least fifty percent
(50%) of the voting power entitled to vote in the election of Directors; or

                           (v) During any period of two consecutive years during
the term of Executive's employment hereunder, individuals who at the beginning
of such period constitute the Board cease for any reason to constitute at least
a majority thereof, unless the election of each Director who was not a Director
at the beginning of such period has been approved in advance by Directors
representing at least two-thirds of the Directors then in office who were
Directors at the beginning of the period.

                  6.5.2 If any of the above events occur, then for purposes of
this Agreement, the Company or the Company's successor will be considered the
"New Company."

                                       6.
<PAGE>

7.       CONFIDENTIAL INFORMATION; EXECUTIVE'S DUTIES UPON TERMINATION.

         7.1 Executive recognizes that his employment with the Company will
involve contact with information of substantial value to the Company, which is
not old and generally known in the trade, and which gives the Company an
advantage over its competitors who do not know or use it, including but not
limited to, techniques, formulations, products, processes, inventions,
developments, methods, clinical data, improvements, plans for research,
prototypes, sales and customer information, and business and financial
information relating to the business, products, practices and techniques of the
Company, (hereinafter referred to as "Confidential Information"). Executive will
at all times regard and preserve as confidential such Confidential Information
obtained by Executive from whatever source and will not, either during his
employment with the Company or thereafter, publish or disclose any part of such
Confidential Information in any manner at any time, or use the same except on
behalf of the Company, without the prior written consent of the Company. As a
condition of employment, the Executive has signed and will continue to be bound
by the Company's "Proprietary Information Agreement," attached as Exhibit C.

8.       ASSIGNMENT AND BINDING EFFECT.

         8.1 This Agreement, including Exhibits A, B and C, shall be binding
upon and inure to the benefit of Executive and Executive's heirs, executors,
personal representatives, assigns, administrators and legal representatives.
Because of the unique and personal nature of Executive's duties under this
Agreement, neither this Agreement nor any rights or obligations under this
Agreement shall be assignable by Executive. This Agreement shall be binding upon
and inure to the benefit of the Company and its successors, assigns and legal
representatives.

9.       NOTICES.

         9.1 All notices or demands of any kind required or permitted to be
given by the Company or Executive under this Agreement shall be given in writing
and shall be personally delivered (and receipted for) or mailed by certified
mail, return receipt requested, postage prepaid, addressed as follows:

                  9.1.1             If to the Company:

                                    Randall E. Woods
                                    President and Chief Executive Officer
                                    Corvas International, Inc.
                                    3030 Science Park Road
                                    San Diego, California

                  9.1.2             If to Executive:

                                    Stephen F. Keane
                                    2780 Angell Avenue
                                    San Diego, CA 92122

                                       7.
<PAGE>

Any such written notice shall be deemed received when personally delivered or
three (3) days after its deposit in the United States mail as specified above.
Either Party may change its address for notices by giving notice to the other
Party in the manner specified in this section.

10.      CHOICE OF LAW.

         10.1 This Agreement is made in San Diego, California. This Agreement
shall be construed and interpreted in accordance with the laws of the State of
California.

11.      INTEGRATION.

         11.1 This Agreement contains the complete, final and exclusive
agreement of the Parties relating to the subject matter of this Agreement, and
supersedes all prior oral and written employment agreements or arrangements
between the Parties.

12.      AMENDMENT.

         12.1 This Agreement cannot be amended or modified except by a written
agreement signed by Executive and the Company.

13.      WAIVER.

         13.1 No term, covenant or condition of this Agreement or any breach
thereof shall be deemed waived, except with the written consent of the Party
against whom the wavier in claimed, and any waiver or any such term, covenant,
condition or breach shall not be deemed to be a waiver of any preceding or
succeeding breach of the same or any other term, covenant, condition or breach.

14.      SEVERABILITY.

         14.1 The finding by a court of competent jurisdiction of the
unenforceability, invalidity or illegality of any provision of this Agreement
shall not render any other provision of this Agreement unenforceable, invalid or
illegal. Such court shall have the authority to modify or replace the invalid or
unenforceable term or provision with a valid and enforceable term or provision
which most accurately represents the parties' intention with respect to the
invalid or unenforceable term or provision.

15.      INTERPRETATION; CONSTRUCTION.

         15.1 The headings set forth in this Agreement are for convenience of
reference only and shall not be used in interpreting this Agreement. This
Agreement has been drafted by legal counsel representing the Company, but
Executive has been encouraged, and has consulted with, his own independent
counsel and tax advisors with respect to the terms of this Agreement. The
Parties acknowledge that each Party and its counsel has reviewed and revised, or
had an opportunity to review and revise, this Agreement, and the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.

                                       8.
<PAGE>

16.      REPRESENTATIONS AND WARRANTIES.

         16.1 Executive represents and warrants that he is not restricted or
prohibited, contractually or otherwise, from entering into and performing each
of the terms and covenants contained in this Agreement, and that his execution
and performance of this Agreement will not violate or breach any other
agreements between Executive and any other person or entity.

17.      COUNTERPARTS.

         17.1 This Agreement may be executed in two counterparts, each of which
shall be deemed an original, all of which together shall contribute one and the
same instrument.

                                       9.
<PAGE>

         IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.

                                 The Company:

                                 CORVAS INTERNATIONAL, INC.
                                 a Delaware Corporation

                                 By: /s/ RANDALL E. WOODS
                                     -------------------------------------------
                                         Randall E. Woods
                                         President and Chief Executive Officer

                                 Date: August 20, 2001
                                       -----------------------------------------

                                 EXECUTIVE:

                                  /s/ STEPHEN F. KEANE
                                 -----------------------------------------------
                                 Stephen F. Keane

                                 Date: 8/21/2001
                                       -----------------------------------------

Exhibit A:  Employee Benefits Summary
Exhibit B:  Waiver and Release Agreement
Exhibit C:  Proprietary Information Agreement

                                      10.
<PAGE>

                                    EXHIBIT B

                          RELEASE AND WAIVER OF CLAIMS

         In consideration of the payments and other benefits set forth in
Section 6.4 of my Employment Agreement, to which this form is attached, I hereby
furnish Corvas International, Inc. (the "Company") with the following Release
and Waiver ("Release and Waiver").

         I hereby release, and forever discharge the Company, its officers,
directors, agents, employees, stockholders, successors, assigns, benefit plans,
parent, subsidiaries and affiliates, of and from any and all claims,
liabilities, demands, causes of action, costs, expenses, attorneys' fees,
damages, indemnities and obligations of every kind and nature, in law, equity,
or otherwise, known and unknown, suspected and unsuspected, disclosed and
undisclosed, arising at any time prior to and including my employment
termination date with respect to any claims relating to my employment and the
termination of my employment, including but not limited to, claims pursuant to
any federal, state or local law relating to employment, including, but not
limited to, discrimination claims, claims under the California Fair Employment
and Housing Act, and the Federal Age Discrimination in Employment Act of 1967,
as amended ("ADEA"), or claims for wrongful termination, breach of the covenant
of good faith, contract claims, tort claims, and wage or benefit claims,
including but not limited to, claims for salary, bonuses, commissions, stock,
stock options, vacation pay, fringe benefits, severance pay or any form of
compensation; provided that this Release and Waiver shall not release the
Company from its obligations under California Labor Code ss. 2802, California
Corporations Code ss. 317 or the Indemnification Agreement between the Company
and the Executive.

         I also acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to any claims I may have against the
Company.

         I acknowledge that, among other rights, I am waiving and releasing any
rights I may have under ADEA, that this Release and Waiver is knowing and
voluntary, and that the consideration given for this Release and Waiver is in
addition to anything of value to which I was already entitled as an employee of
the Company. I further acknowledge that I have been advised, as required by the
Older Workers Benefit Protection Act, that: (a) the release and waiver granted
herein does not relate to claims which may arise after this Release and Waiver
is executed; (b) I have the right to consult with an attorney prior to executing
this Release and Waiver (although I may choose voluntarily not to do so); and if
I am 40 years of age or older upon execution of this Release and Waiver: (c) I
have twenty-one (21) days from the date I receive this Release and Waiver, in
which to consider this agreement (although I may choose voluntarily to execute
this Release and Waiver earlier): (d) I have seven (7) days following the
execution of this Release and Waiver agreement to revoke my consent to the
agreement; and (e) this Release and Waiver shall not be effective until the
seven (7) day revocation period has expired.

Date:                                   By:
-------------------                         ------------------------------------

<PAGE>

                                     CORVAS
                                 INTERNATIONAL

                        PROPRIETARY INFORMATION AGREEMENT

In consideration of my employment or continued employment by Corvas
International, Inc. (the "Company"), and the compensation now and hereafter paid
to me, I hereby agree as follows:

         1. AT-WILL EMPLOYMENT. I agree and understand that nothing in this
Agreement shall confer any right with respect to continuation of employment by
the Company, nor shall it interfere in any way with my right or the Company's
right to terminate my employment at any time, with or without cause.

         2. RECOGNITION OF COMPANY'S RIGHTS: NONDISCLOSURE. At all times during
the term of my employment and thereafter, I will hold in strictest confidence
and will not disclose, use, lecture upon or publish any of the Company's
Proprietary Information (defined below), except as such disclosure, use or
publication may be required in connection with my work for the Company, or
unless an officer of the Company expressly authorizes such in writing. I hereby
assign to the Company any rights I may have or acquire in such Proprietary
Information and recognize that all Proprietary Information shall be the sole
property of the Company and its assigns and the Company and its assigns shall be
the sole owner of all trade secret rights, patent rights, copyrights, mask work
rights and all other rights throughout the world (collectively, "Proprietary
Rights") in connection therewith.

         The term "Proprietary Information" shall mean trade secrets,
confidential knowledge, data or any other proprietary information of the
Company. By way of illustration but not limitation, "Proprietary Information"
includes (a) trade secrets, inventions, mask works, ideas, processes, formulas,
source and object codes, data, programs, other works of authorship, know-how,
improvements, discoveries, developments, designs and techniques hereinafter
collectively referred to as "Inventions"); and (b) information regarding plans
for research, development, new products, marketing and selling, business plans,
budgets and unpublished financial statements, licenses, prices and costs,
suppliers and customers; and information regarding the skills and compensation
of other employees of the Company.

         3. THIRD PARTY INFORMATION. I understand, in addition, that the Company
has received and in the future will receive from third parties confidential or
proprietary information ("Third Party Information") subject to a duty on the
Company's part to maintain the confidentiality of such information and to use it
only for certain limited purposes. During the term of my employment and
thereafter, I will hold Third Party Information in the strictest confidence and
will not disclose (to anyone other than Company personnel who need to know such
information in connection with their work for the Company) or use, except in
connection with my work for the Company, Third Party Information unless
expressly authorized by an officer of the Company in writing.

<PAGE>

         4. ASSIGNMENT OF INVENTIONS.

              4.1. ASSIGNMENT. I hereby assign to the Company all my right,
title and interest in and to any and all Inventions (and all Proprietary Rights
with respect thereto) whether or not patentable or registrable under copyright
or similar statutes, made or conceived or reduced to practice or learned by me,
either alone or jointly with others, during the period of my employment with the
Company. Inventions assigned to or as directed by the Company by this paragraph
3 are hereinafter referred to as "Company Inventions." I recognize that this
Agreement does not require assignment of any invention which qualifies fully for
protection under Section 2870 of the California Labor Code (hereinafter "Section
2870"), which provides as follows:

                  (i) Any provision in an employment agreement which provides
that an employee shall assign, or offer to assign, any of his or her rights in
an invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:

                      (1) Relate at the time of conception or reduction to
practice of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer.

                      (2) Result from any work performed by the employee for the
employer.

                  (ii) To the extent a provision in an employment agreement
purports to require an employee to assign an invention otherwise excluded from
being required to be assigned under subdivision (i), the provision is against
the public policy of this state and is unenforceable.

              4.2. GOVERNMENT. I also assign as directed by the Company all my
right, title and interest in and to any and all Inventions, full title to which
is required to be in the United States by a contract between the Company and the
United States or any of its agencies.

              4.3. WORKS FOR HIRE. I acknowledge that all original works of
authorship which are made by me (solely or jointly with others) within the scope
of my employment and which are protectable by copyright are "works made for
hire," as that term is defined in the United States Copyright Act (17 U.S.C.,
Section 101).

<PAGE>

         5. ENFORCEMENT OF PROPRIETARY RIGHTS. I will assist the Company in
every proper way to obtain and from time to time enforce United States and
foreign Proprietary Rights relating to Company Inventions in any and all
countries. To that end I will execute, verify and deliver such documents and
perform such other acts (including appearances as a witness) as the Company may
reasonably request for use in applying for, obtaining, perfecting, evidencing,
sustaining and enforcing such Proprietary Rights and the assignment thereof. In
addition, I will execute, verify and deliver assignments of such Proprietary
Rights to the Company or its designee. My obligation to assist the Company with
respect to Proprietary Rights relating to such Company Inventions in any and all
countries shall continue beyond the termination of my employment, but the
Company shall compensate me at a reasonable rate after my termination for the
time actually spent by me at the Company's request on such assistance.

         In the event the Company is unable for any reason, after reasonable
effort, to secure my signature on any document needed in connection with the
actions specified in the preceding paragraph, I hereby irrevocably designate and
appoint the Company and its duly authorized officers and agents as my agent and
attorney in fact, which appointment is coupled with an interest, to act for and
in my behalf to execute, verify and file any such documents and to do all other
lawfully permitted acts to further the purposes of the preceding paragraph with
the same legal force and effect as if executed by me. I hereby waive and
quitclaim to the Company any and all claims, of any nature whatsoever, which I
now or may hereafter have for infringement of any Proprietary Rights assigned
hereunder to the Company.

         6. OBLIGATION TO KEEP COMPANY INFORMED. During the period of my
employment and for six (6) months after termination of my employment with the
Company, I will promptly disclose to the Company fully and in writing all
Inventions authored, conceived or reduced to practice by me, either alone or
jointly with others. In addition, I will promptly disclose to the Company all
patent applications filed by me or on my behalf within a year after termination
of employment. At the time of each such disclosure, I will advise the Company in
writing of any Inventions that I believe fully qualify for protection under
Section 2870; and I will at that time provide to the Company in writing all
evidence necessary to substantiate that belief. The Company will keep in
confidence and will not disclose to third parties without my consent any
proprietary information disclosed in writing to the Company pursuant to this
Agreement relating to Inventions that qualify fully for protection under the
provisions of Section 2870. I will preserve the confidentiality of any Invention
that does not fully qualify for protection under Section 2870.

<PAGE>

         I agree to keep and maintain adequate and current records (in the form
of notes, sketches, drawings and in any other form that may be required by the
Company) of all Proprietary Information developed by me and all Inventions made
by me during the period of my employment at the Company, which records shall be
available to and remain the sole property of the Company at all times.

         7. PRIOR INVENTIONS. Inventions, if any, patented or unpatented, which
I made prior to the commencement of my employment with the Company are excluded
from the scope of this Agreement. To preclude any possible uncertainty, I have
set forth on Exhibit A attached hereto a complete list of all Inventions that I
have, alone or jointly with others, conceived, developed or reduced to practice
or caused to be conceived, developed or reduced to practice prior to the
commencement of my employment with the Company, that I consider to be my
property or the property of third parties and that I wish to have excluded from
the scope of this Agreement. If disclosure of any such Invention on Exhibit A
would cause me to violate any prior confidentiality agreement, I understand that
I am not to list such Inventions in Exhibit A but am to inform the Company that
all such Inventions have not been listed for that reason.

         8. ADDITIONAL ACTIVITIES. I agree that during the period of my
employment by the Company I will not, without the Company's express written
consent, engage in any employment or business activity other than for the
Company. I agree further that for the period of my employment by the Company and
for one (1) year after the date of termination of my employment by the Company I
will not (i) induce any employee of the Company to leave the employ of the
Company or (ii) solicit the business of any client or customer of the Company
(other than on behalf of the Company).

         9. NO IMPROPER USE OF MATERIALS. During my employment by the Company I
will not improperly use or disclose any confidential information or trade
secrets, if any, of any former employer or any other person to whom I have an
obligation of confidentiality, and I will not bring onto the premises of the
Company any unpublished documents or any property belonging to any former
employer or any other person to whom I have an obligation of confidentiality
unless consented to in writing by that former employer or person. I will use in
the performance of my duties only information which is generally known and used
by persons with training and experience comparable to my own, which is common
knowledge in the industry or otherwise legally in the public domain, or which is
otherwise provided or developed by the Company.

         10. NO CONFLICTING OBLIGATION. I represent that my performance of all
the terms of this Agreement and as an employee of the Company does not and will
not breach any agreement to keep in confidence information acquired by me in
confidence or in trust prior to my employment by the Company. I have not entered
into, and I agree I will not enter into, any agreement either written or oral in
conflict herewith.

<PAGE>

         11. RETURN OF COMPANY DOCUMENTS. When I leave the employ of the
Company, I will deliver to the Company any and all drawings, notes, memoranda,
specifications, devices, formulas, and documents, together with all copies
thereof, and any other material containing or disclosing any Company Inventions,
Third Party Information or Proprietary Information of the Company. I further
agree that any property situated on the Company's premises and owned by the
Company, including disks and other storage media, filing cabinets or other work
areas, is subject to inspection by Company personnel at any time with or without
notice. Prior to leaving, I will cooperate with the Company in completing and
signing the Company's termination statement for technical and management
personnel.

         12. EQUIPMENT. I will exercise reasonable care, consistent with good
business judgment, to preserve in good working order subject to reasonable wear
and tear from authorized usage, and to prevent loss of any equipment,
instruments or accessories of the Corporation in my custody for the purpose of
making demonstrations, implementing trials, carrying out development work, or
otherwise conducting the business of the Corporation. Upon request, I will
promptly surrender the same to the Corporation at the conclusion of my
employment, or if not surrendered, I will account to the Corporation to its
reasonable satisfaction as to the present location of all such instruments or
accessories and the business purpose for their placement at such location. At
the conclusion of my employment with the Corporation, I agree to return such
instruments of accessories to the Corporation or to account for the same to the
Corporation's reasonable satisfaction.

         13. LEGAL AND EQUITABLE REMEDIES. Because I may have access to and
become acquainted with the Proprietary Information of the Company, the Company
shall have the right to enforce this Agreement and any of its provisions by
injunction, specific performance or other equitable relief, without prejudice to
any other rights and remedies that the Company may have for a breach of this
Agreement.

         14. ARBITRATION PROVISION. To ensure rapid and economical resolution of
any disputes which may arise under this Agreement, I and the Company agree that
any and all disputes or controversies, whether of law or fact of any nature
whatsoever (including, but not limited to, all state and federal statutory and
discrimination claims, with the sole exception of those disputes which may arise
regarding Proprietary Information and Inventions) shall be resolved by final and
binding arbitration under the procedures set forth in Appendix B and the then
current Judicial Arbitration and Mediation Services Rules of Practice and
Procedure (except insofar as they are inconsistent with the procedures set forth
in Appendix B.)

<PAGE>

         15. NOTICES. Any notices required or permitted hereunder shall be given
to the appropriate party at the address specified below or at such other address
as the party shall specify in writing. Such notice shall be deemed given upon
personal delivery to the appropriate address or if sent by certified or
registered mail, three days after the date of mailing.

         16. GENERAL PROVISIONS.

              16.1. GOVERNING LAW. This Agreement will be governed by and
construed according to the laws of the State of California.

              16.2. ENTIRE AGREEMENT. This Agreement is the final, complete and
exclusive agreement of the parties with respect to the subject matter hereof and
supersedes and merges all prior discussions between us. No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
will be effective unless in writing and signed by the party to be charged. Any
subsequent change or changes in my duties, salary or compensation will not
affect the validity or scope of this Agreement. As used in this Agreement, the
period of my employment includes any time during which I may be retained by the
Company as a consultant.

              16.3. SEVERABILITY. If one or more of the provisions in this
Agreement are deemed unenforceable by law, then such provision will be deemed
stricken from this Agreement and the remaining provisions will continue in full
force and effect.

              16.4. SUCCESSORS AND ASSIGNS. This Agreement will be binding upon
my heirs, executors, administrators and other legal representatives and will be
for the benefit of the Company, its successors, and its assigns.

              16.5. SURVIVAL. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the Company
to any successor in interest or other assignee.

              16.6. WAIVER. No waiver by the Company of any breach of this
Agreement shall be a waiver of any preceding or succeeding breach. No waiver by
the Company of any right under this Agreement shall be construed as a waiver of
any other right. The Company shall not be required to give notice to enforce
strict adherence to all terms of this Agreement.

This Agreement shall be effective as of : March 5, 2001.

<PAGE>

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE COMPLETELY
FILLED OUT EXHIBIT A TO THIS AGREEMENT.

Dated:                                   /s/ STEPHEN F. KEANE
                                         ---------------------------------------
                                              (Signature)

                                         Stephen F. Keane
                                         ---------------------------------------
                                              (Printed Name)

                                         ---------------------------------------
                                              (Address)

                                         SD CA
                                         ---------------------------------------

                                         ---------------------------------------

ACCEPTED AND AGREED TO:

Corvas International, Inc.

By:    /s/ RANDALL E. WOODS
       --------------------------------

Title:  CEO
       --------------------------------

<PAGE>

                 EXHIBIT A TO PROPRIETARY INFORMATION AGREEMENT

                                PRIOR INVENTIONS

Inventions, if any, patented or unpatented, which I made prior to the
commencement of my employment with the Company are excluded from the scope of
this Agreement. To preclude any possible uncertainty, I have set forth below a
complete list of all Inventions that I have, alone or jointly with others,
conceived, developed or reduced to practice or caused to be conceived, developed
or reduced to practice prior to the commencement of my employment with the
Company, that I consider to be my property or the property of third parties and
that I wish to have excluded from the scope of this Agreement. If disclosure of
any such Invention would cause me to violate any prior confidentiality
agreement, I understand that I am not to list such Inventions but am to inform
the Company that all such Inventions have not been listed for that reason.

<PAGE>

                 APPENDIX B TO PROPRIETARY INFORMATION AGREEMENT

                              ARBITRATION PROCEDURE

         1. The parties agree that any dispute that arises in connection with
this Agreement or the termination of this Agreement (with the sole exception of
those disputes which may arise regarding Proprietary Information and Inventions)
shall be resolved by binding arbitration in the manner described below.

         2. A party intending to seek resolution of any dispute under the
Agreement by arbitration shall provide a written demand for arbitration to the
other party, which demand shall contain a brief statement of the issues to be
resolved.

         3. The arbitration shall be conducted by a mutually acceptable retired
judge from the panel of Judicial Arbitration and Mediation Services, Inc.
("JAMS") and shall be held in the JAMS office in San Diego, California. At the
request of either party, arbitration proceedings will be conducted in the utmost
secrecy and, in such case, all documents, testimony and records shall be
received, heard and maintained by the arbitrator in secrecy under seal,
available for inspection only by the parties to the arbitration, their
respective attorneys, and their respective expert consultants or witnesses who
shall agree, in advance and in writing, to receive all such information
confidentially and to maintain such information in secrecy, and make no use of
such information except for the purposes of the arbitration, unless compelled by
legal process.

         4. The arbitrator is required to disclose any circumstances that might
preclude the arbitrator from rendering an objective and impartial determination.
In the event the parties cannot mutually agree upon the selection a JAMS
arbitrator, the President and Vice-President of JAMS shall designate the
arbitrator.

         5. The party demanding arbitration shall promptly request that JAMS
conduct a scheduling conference within fifteen (15) days of the date of that
party's written demand for arbitration or on the first available date thereafter
on the arbitrator's calendar. The arbitration hearing shall be held within
thirty (30) days after the scheduling conference or on the first available date
thereafter on the arbitrator's calendar. Nothing in this paragraph shall prevent
a party from at any time seeking temporary equitable relief, from JAMS or any
court of competent jurisdiction, to prevent irreparable harm pending the
resolution of the arbitration.

<PAGE>

         6. Discovery shall be conducted as follows: (a) prior to the
arbitration any party may make a written demand for lists of the witnesses to be
called and documents to be introduced at the hearing; (b) the lists must be
served within fifteen days of the date of receipt of the demand, or one day
prior to the arbitration, whichever is earlier; and (c) each party may take no
more than two depositions (pursuant to the procedures set forth in the
California Code of Civil Procedure) with a maximum of five hours of examination
time per deposition, and no other form of pre-arbitration discovery shall be
permitted.

         7. It is the intent of the parties that the Federal Arbitration Act
("FAA") shall apply to the enforcement of this provision unless it is held
inapplicable by a court with jurisdiction over the dispute, in which event the
California Arbitration Act ("CAA") shall apply.

         8. The arbitrator shall apply California law, including the California
Evidence Code, and shall be able to decree any and all relief of an equitable
nature, including but not limited to such relief as a temporary restraining
order, a preliminary injunction, a permanent injunction, or replevin of Company
property. The arbitrator shall also be able to award actual, general or
consequential damages, but shall not award any other form of damage (e.g.,
punitive damages).

         9. Each party shall pay its pro rata share of the arbitrator's fees and
expenses, in addition to other expenses of the arbitration approved by the
arbitrator, pending the resolution of the arbitration. The arbitrator shall have
authority to award the payment of such fees and expenses to the prevailing
party, as appropriate in the discretion of the arbitrator. Each party shall pay
its own attorney's fees, witness fees and other expenses incurred for its own
benefit.

         10. The arbitrator shall render a written award setting forth the
reasons for his or her decision. The decree or judgment of an award rendered by
the arbitrator may be entered and enforced in any court having jurisdiction over
the parties. The award of the arbitrator shall be final and binding upon the
parties without appeal or review except as permitted by the FAA, or if the FAA
is not applicable, as permitted by the CAA.

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