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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1997.
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to _________.
Commission File Number: 0-21643
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CV THERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 43-1570294
(State of Incorporation) (I.R.S. Employer Identification No.)
3172 PORTER DRIVE, PALO ALTO, CA 94304
(Address of principal executive offices)
Registrant's telephone number, including area code: (650) 812-0585
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Indicate by check whether the Registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
As of October 31, 1997, there were 8,420,074 shares of the issuer's Common
Stock, $0.001 par value, outstanding.
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CV THERAPEUTICS, INC.
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of September 30, 1997
and December 31, 1996 3
Condensed Consolidated Statements of Operations for the three months
and the nine months ended September 30, 1997 and 1996 4
Condensed Consolidated Statements of Cash Flows for the nine months
ended September 30, 1997 and 1996 5
Notes to Condensed Consolidated Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 8
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURES 13
2
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CV THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
September 30, 1997 December 31, 1996
------------------ -----------------
(Unaudited) (Note 1)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 9,459 $ 19,575
Short-term investments 9,553 1,993
Other current assets 853 454
---------- -----------
Total current assets 19,865 22,022
Long-term investments 9,902 --
Notes receivable from officers and employees 400 475
Property and equipment, net 2,477 3,072
Intangible and other assets 335 570
---------- -----------
Total assets $ 32,979 $ 26,139
---------- -----------
---------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 662 $ 405
Accrued liabilities 805 1,304
Current portion of long-term debt 833 15
Current portion of capital lease obligation 665 20
Current portion of deferred revenue 2,000 --
---------- -----------
Total current liabilities 4,965 1,744
Long-term portion of accrued liabilities 620 719
Long-term portion of long-term debt 5,167 3,000
Long-term portion of capital lease obligation 728 2,000
Long-term portion of deferred revenue 4,000 --
Commitments
Stockholders' equity:
Common stock 71,119 65,414
Warrants to purchase common stock 1,225 1,225
Notes receivable issued for stock (108) (171)
Deferred compensation (1,331) (2,166)
Unrealized gain on investments 18 --
Accumulated deficit (53,424) (45,626)
---------- -----------
Total stockholders' equity 17,499 18,676
---------- -----------
Total liabilities and stockholders' equity $ 32,979 $ 26,139
---------- -----------
---------- -----------
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
3
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CV THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
1997 1996 1997 1996
--------- --------- --------- --------
<S> <C> <C> <C> <C>
Revenues:
Contract revenues $ 605 $ -- $ 2,236 $ 250
Operating expenses:
Research and development 2,082 1,825 6,992 5,834
General and administrative 1,329 778 3,545 2,186
-------- --------- -------- -------
Total operating expenses 3,411 2,603 10,537 8,020
Loss from operations (2,806) (2,603) (8,301) (7,770)
Interest income (expense), net 133 (368) 503 (597)
-------- --------- -------- -------
Net loss $ (2,673) $ (2,971) $ (7,798) $ (8,367)
-------- --------- -------- -------
-------- --------- -------- -------
Net loss per share (1) $ (0.38) $ (0.60) $ (1.15) $ (1.78)
-------- --------- -------- -------
-------- --------- -------- -------
Shares used in computing
net loss per share (1) 7,010 4,949 6,755 4,708
-------- --------- -------- -------
-------- --------- -------- -------
</TABLE>
(1) Net loss per share for the three-month and nine-month periods ended
September 30, 1996 is calculated on a pro forma basis. See accompanying
notes for methodology of calculation.
The accompanying notes are an integral part of these
condensed consolidated financial statements.
4
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CV THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (7,798) $ (8,367)
Adjustments to reconcile net loss to net cash used in
operating activities:
Amortization of deferred compensation 563 11
Depreciation and amortization 821 822
Write off of warrant issued under capital lease -- 160
Issuance of capital stock and warrants for payments
of license fee 544 750
Change in assets and liabilities:
Other current assets (399) (15)
Intangible and other assets 107 438
Accounts payable 257 152
Accrued liabilities (598) (103)
Deferred revenue 6,000 --
----------- -----------
Net cash used in operating activities (503) (6,152)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term investments (19,085) (4,006)
Purchase of long-term investments (9,905) --
Maturity of short-term investments 11,546 --
Capital expenditures (98) (23)
Notes receivable from officers and employees 138 --
----------- -----------
Net cash used in investing activities (17,404) (4,029)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on capital lease obligations (627) (349)
Borrowings under long-term debt 3,000 5,000
Repayments of long-term debt (15) (6,591)
Proceeds from issuance of common stock (and bridge loans
subsequently converted into common stock), net of repurchase 5,433 38
Proceeds from issuance of convertible preferred stock -- 12,992
----------- -----------
Net cash provided by financing activities 7,791 11,090
----------- -----------
Net (decrease) increase in cash and cash equivalents (10,116) 909
Cash and cash equivalents at beginning of period 19,575 5,569
----------- -----------
Cash and cash equivalents at end of period $ 9,459 $ 6,478
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
5
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CV THERAPEUTICS, INC.
____________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements of CV
Therapeutics, Inc. have been prepared in accordance with generally accepted
accounting principles, are unaudited and reflect all adjustments (consisting
solely of normal recurring adjustments) which are, in the opinion of
management, necessary to present fairly the financial position at and results
of operations for the interim periods presented. The results of operations
for the three- and nine-month periods ended September 30, 1997 are not
necessarily indicative of the results to be expected for the entire year
ending December 31, 1997. The financial information included herein should
be read in conjunction with the Company's Annual Report on Form 10K/A for
1996 which includes the audited consolidated financial statements and the
notes thereto for the year ended December 31, 1996. Through December 31,
1996 the Company was in the development stage.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary, CV Therapeutics International, which was
incorporated in December 1993 in the Cayman Islands. All significant
intercompany balances have been eliminated.
REVENUE RECOGNITION
Upfront license payments related to research agreements with
noncancelable, nonrefundable terms and no significant future obligations are
recognized upon execution of the agreements. Collaborative research revenue
is recognized as related expenses are incurred in accordance with the terms
of collaboration agreements. Milestone payments will be recognized pursuant
to collaborative agreements upon the achievement of the specified milestones.
NET LOSS PER SHARE
Except as noted below, net loss per share is computed using the weighted
average number of common shares outstanding. Common equivalent shares are
excluded from the computation as their effect is antidilutive, except that,
pursuant to the Securities and Exchange Commission ("SEC") Staff Accounting
Bulletins, common and common equivalent shares issued during the 12-month
period prior to the Company's initial public offering at prices below the
assumed public offering price have been included in the calculation as if
they were outstanding for all periods presented through September 30, 1996
(using the treasury stock method for stock options and warrants).
Net loss per share information calculated on this basis is as follows:
<TABLE>
<CAPTION>
(In thousands, except per share amounts) Three Months Ended Nine months ended
September 30, 1996 September 30, 1996
------------------ ------------------
<S> <C> <C>
Net loss per share $ (1.74) $ (4.95)
Shares used in computing net loss per share 1,711 1,691
</TABLE>
Pro forma per share data for the three- and nine-month periods ended
September 30, 1996 is provided to show the calculation on a consistent basis
for the periods presented. It has been computed as described above, and also
gives retroactive effect from the date of issuance to the conversion of
preferred stock, which automatically converted to common stock upon closing
of the Company's initial public offering.
6
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CV THERAPEUTICS, INC.
______________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1997
(UNAUDITED)
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, EARNINGS PER SHARE, which is required to be adopted on
December 31, 1997. At that time, the Company will be required to change the
method currently used to compute earnings per share and to restate all prior
periods. The impact is expected to result in no change to loss per share
amounts presented for all prior periods.
2. LICENSE AND COLLABORATION AGREEMENTS
On March 7, 1997, the Company entered into two research collaboration and
license agreements ("the Biogen Agreements"), one with Biogen, Inc.
("Biogen") and one with Biogen's wholly owned subsidiary, Biotech
Manufacturing Limited ("Biotech Manufacturing" and together with Biogen, the
"Biogen Entities"). The Biogen Agreements grant the Biogen Entities the
exclusive worldwide rights to develop and commercialize CVT-124 and any other
adenosine A1 antagonist owned by the Company for all indications. In
exchange for such rights to develop, manufacture and sell the technology, the
Company received upfront payments of $16.0 million. Of this amount $0.8
million was recognized as revenue immediately, $7.0 million was deferred and
will be recognized as revenue as the Company fulfills its research and
development obligations and achieves a specific milestone as identified in
the Biogen Agreements, $5.2 million was for the purchase of 669,857 shares of
the Company's common stock and $3.0 million was funding under a credit
facility. Of the $7.0 million of deferred revenue, $1.8 million represents a
premium over the $5.2 million market value that was paid for the 669,857
shares of the Company's common stock. In addition, CVT may receive
development milestones, equity investments, funding under a general purpose
loan facility and royalties from any future product sales. The Company is
obligated to repay the current outstanding principal portion of this credit
facility, which bears interest on the outstanding principal at a rate equal
to prime plus one (1%) percent, by February 2005.
3. SUBSEQUENT EVENT
On October 7, 1997 the Company sold 1,397,147 shares of its common stock
at a purchase price of $9.25 per share to Biotech Target S.A., an affiliate
of BB Biotech AG of Switzerland (the "Purchaser"). The Purchaser currently
holds approximately 16.6 percent of the 8.4 million common shares outstanding
after the private placement.
7
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CV THERAPEUTICS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
THIS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS AND OTHER PARTS OF THIS FORM 10-Q CONTAIN FORWARD
LOOKING STATEMENTS WHICH INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S
ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED HEREIN. FACTORS
THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE
LISTED BELOW AND THOSE LISTED IN "RISK FACTORS" IN THE COMPANY'S ANNUAL
REPORT ON FORM 10-K/A FOR THE YEAR ENDED DECEMBER 31, 1996.
OVERVIEW
CV Therapeutics, Inc. ("CVT" or the "Company") is an early stage
biopharmaceutical company focused exclusively on the application of molecular
cardiology to the discovery, development and commercialization of novel small
molecule drugs for the treatment of cardiovascular disease. Since its
inception in December 1990, substantially all of the Company's resources have
been dedicated to research and development. To date, CVT has not generated
any product revenue and does not expect to generate any such revenues for at
least several years. As of September 30, 1997, the Company had an
accumulated deficit of approximately $53.4 million. The Company expects its
sources of revenue, if any, for the next several years to consist of payments
under corporate partnerships and interest income. The process of developing
the Company's products will require significant additional research and
development, preclinical testing and clinical trials, as well as regulatory
approval. These activities, together with the Company's general and
administrative expenses, are expected to result in operating losses for the
foreseeable future. The Company will not receive product revenue unless it
or its collaborative partners complete clinical trials and successfully
commercializes one or more of its products.
CVT is subject to risks common to biopharmaceutical companies, including
risks inherent in its research and development efforts and clinical trials,
reliance on collaborative partners, enforcement of patent and proprietary
rights, the need for future capital, potential competition and uncertainty of
regulatory approval. In order for a product to be commercialized, it will be
necessary for CVT and its collaborators to conduct preclinical tests and
clinical trials, demonstrate efficacy and safety of the Company's product
candidates, obtain regulatory clearances and enter into manufacturing,
distribution and marketing arrangements, as well as obtain market acceptance.
There can be no assurance that the Company will generate revenues or achieve
and sustain profitability in the future.
On March 7, 1997, the Company entered into two research collaboration and
license agreements ("the Biogen Agreements"), one with Biogen, Inc.
("Biogen") and one with Biogen's wholly owned subsidiary, Biotech
Manufacturing Limited ("Biotech Manufacturing" and together with Biogen, the
"Biogen Entities"). The Biogen Agreements grant the Biogen Entities the
exclusive worldwide rights to develop and commercialize CVT-124 and any other
adenosine A1 antagonist owned by the Company for all indications. In
exchange for such rights to develop, manufacture and sell the technology, the
Company received upfront payments of $16.0 million. Of this amount $0.8
million was recognized as revenue immediately, $7.0 million was deferred and
will be recognized as revenue as the Company fulfills its research and
development obligations and achieves a specific milestone as identified in
the Biogen Agreements, $5.2 million was for the purchase of 669,857 shares of
the Company's common stock and $3.0 million was funding under a credit
facility. Of the $7.0 million of deferred revenue, $1.8 million represents a
premium over the $5.2 million market value that was paid for the 669,857
shares of the Company's common stock. In addition, CVT may receive
development milestones, equity investments, funding under a general purpose
loan facility and royalties from any future product sales. The Company is
obligated to repay the current outstanding principal portion of this credit
facility, which bears interest on the outstanding principal at a rate equal
to prime plus one (1%) percent, by February 2005.
RESULTS OF OPERATIONS
REVENUES. The Company recognized revenues of $605,000 for the quarter
ended September 30, 1997, as compared to no revenue for the quarter ended
September 30, 1996. Revenue for the nine-month period ended September 30,
1997 was $2.2 million compared to $250,000 during the nine-month period ended
September 30, 1996. Revenue for both the three-and nine-month periods ended
September 30, 1997 was attributable to an up front license fee in connection
with the Biogen Agreements for the development and commercialization of
CVT-124.
8
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CV THERAPEUTICS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
RESEARCH AND DEVELOPMENT EXPENSES. The Company's research and development
expenses increased to $2.1 million for the quarter ended September 30, 1997,
compared to $1.8 million for the quarter ended September 30, 1996. Research
and development expenses increased to $7.0 million for the nine-month period
ended September 30, 1997, compared to $5.8 million for the nine-month period
ended September 30, 1996. The increase for the quarter ended September 30,
1997, over the quarter ended September 30, 1996 was primarily due to the
issuance of shares of the Company's common stock valued at $544,000 to Syntex
(U.S.A.), Inc. ("Syntex"), an indirect subsidiary of Roche Holding Limited,
under an amended agreement with Syntex for the license of ranolazine. The
increase in research and development expenses for the nine-month period ended
September 30, 1997, over the same period in 1996 was primarily due to a $1.0
million milestone payment to Syntex payable under the original license
agreement for ranolazine and the issuance of shares of the Company's common
stock to Syntex referenced above. These expenses were partially offset by a
decrease in other research and development expenses primarily as a result of
decreased use of outside contract services by the Company. The Company
expects research and development expenses to increase significantly over the
next several years as the Company expands research and product development
efforts.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased to $1.3 million for the quarter ended September 30, 1997, compared
to $778,000 for the quarter ended September 30, 1996. General and
administrative expenses increased to $3.5 million for the nine-month period
ended September 30, 1997, compared to $2.2 million for the nine-month period
ended September 30, 1996. The increases for both the three-month and
nine-month periods ended September 30, 1997 over the same periods in 1996
were primarily due to the amortization of deferred compensation expense,
personnel recruiting expenses and new administrative expenses associated with
becoming a public company. The Company expects general and administrative
expense to increase in the future due to increases in the Company's
development activities.
INTEREST INCOME (EXPENSE), NET. Interest income (expense), net increased
to $133,000 for the quarter ended September 30, 1997, compared to $(368,000)
for the quarter ended September 30 1996. Interest income (expense), net
increased to $503,000 for the nine-month period ended September 30, 1997,
compared to $(597,000) for the nine-month period ended September 30, 1996.
The increases for both the three-month and nine-month periods ended September
30, 1997 over the same periods in 1996 were a result of higher average
investment balances resulting from the proceeds of the Company's initial
public offering completed in November 1996 and payments received in
connection with the Company's collaboration and license agreements with the
Biogen Entities entered into in March 1997 compared to the same periods in
1996 in which the Company had lower average investment balances and
prepayment penalties associated with a restructuring of the Company's debt.
The Company expects that interest income (expense), net will fluctuate with
average investment balances.
The Company records and amortizes over the related vesting periods deferred
compensation representing the difference between the exercise price of
options granted and the deemed fair value of its common stock at the time of
grant. Options generally vest over four years. Deferred compensation of
approximately $2.3 million has been recorded and is being amortized to both
research and development expenses as well as general and administrative
expenses over the related vesting periods of the options granted.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since inception primarily through
private placements of preferred and common stock, an initial public offering
of common stock, equipment and leasehold improvement financing, other debt
financing and payments under corporate collaborations. In November 1996, the
Company completed an initial public offering and raised net proceeds of
approximately $12.0 million. On March 7, 1997, the Company entered into two
research collaboration and license agreements with the Biogen Entities that
together resulted in cash receipts of $16.0 million. Of this amount, $7.0
million was recognized as deferred revenue, $5.2 million was an equity
investment consisting of the purchase of 669,857 shares of the Company's
common stock, $3.0 million was funding under a credit facility and $0.8
million was recognized as revenue in the three-month period ended March 31,
1997. In addition, the Biogen Entities agreed to make significant
development milestones and equity investments and provide funding under a
general purpose loan facility, all of which are subject to achievement of
certain clinical development and commercialization milestones, and pay
royalties from any future product sales. As of September 30, 1997 the Company
had received approximately $68.7 million in net proceeds from the sale of
equity securities, and approximately $16.2 million, before repayment, from
loans and equipment financings.
9
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CV THERAPEUTICS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
Cash, cash equivalents and short- and long-term investments at September
30, 1997 totaled $28.9 million compared to $21.6 million at December 31,
1996. The increase in 1997 was due to the receipt of the upfront payments of
$16.0 million associated with the Company's collaborations with the Biogen
Entities. The Company's funds are currently invested in short- and
long-term, investment grade, interest-bearing debt obligations.
Net cash used in operations for the nine-month period ended September 30,
1997 was $503,000, compared to $6,152,000 for the nine-month period ended
September 30, 1996. The decrease in cash used in operating activities in
1997 was primarily the result of deferred revenue of $6.0 million recorded in
conjunction with the upfront payment under the collaboration with the Biogen
Entities.
Through September 30, 1997, the Company had invested approximately $6.1
million in property and equipment, of which approximately $4.4 million was
financed through equipment and leasehold financing agreements.
Subsequent to the end of the quarter ended September 30, 1997 the Company
raised net proceeds of $12.3 million in a private placement of equity
securities with Biotech Target S.A.
The Company will require substantial additional funding in order to
complete its research and development activities and commercialize any
potential products. The Company currently estimates that its existing
resources, including the net proceeds from the Company's initial public
offering, payments from the Biogen Entities, net proceeds from the October
1997 sale of common stock to Biotech Target S.A. and projected interest
income, will enable the Company to maintain its current and planned
operations through 1999. However, there can be no assurance that the Company
will not require additional funding prior to such time. The Company's
forecast of the period of time through which its financial resources will be
adequate to support its operations is a forward-looking statement that
involves risks and uncertainties, and actual results could vary as a result
of a number of factors. The Company's future capital requirements will
depend on many factors, including scientific progress in its research and
development programs, the size and complexity of such programs, the scope and
results of preclinical studies and clinical trials, the ability of the
Company to establish and maintain corporate partnerships, the time and costs
involved in obtaining regulatory approvals, the costs involved in filing,
prosecuting and enforcing patent claims, competing technological and market
developments, the cost of manufacturing preclinical and clinical material and
other factors not within the Company's control. There can be no assurance
that such additional financing to meet the Company's capital requirements
will be available on acceptable terms or at all. Insufficient funds may
require the Company to delay, scale back or eliminate some or all of its
research or development programs, to lose rights under existing licenses or
to relinquish greater or all rights to product candidates at an earlier stage
of development or on less favorable terms than the Company would otherwise
choose or may adversely affect the Company's ability to operate as a going
concern. If additional funds are raised by issuing equity securities,
substantial dilution to existing stockholders may result.
ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company's business, financial condition and results of operations are
subject to various risks, including those described below and elsewhere in
the Report.
The Company is an early stage company and must be evaluated in light of the
uncertainties and complications present in an early stage biopharmaceutical
company. All of the Company products are at an early stage of development,
and the Company has not generated any product revenue. In addition, the
Company has only two products in clinical development, CVT-124 and
Ranolazine. There can be no assurance that clinical trials conducted by the
Company will demonstrate sufficient safety and efficacy to obtain the
requisite approvals or that marketable products will result. In addition,
the rate of completion of clinical trials may be delayed by many factors.
The Company's product candidates will require significant additional
development, preclinical studies, clinical trials and regulatory approval
prior to commercialization. These activities may take several years and
require the expenditure of substantial resources. In addition, these
activities, together with the Company's general and administrative expense,
are expected to result in operation losses for the foreseeable future.
The Company's strategy for the research, development and commercialization
of its product candidates has required, and will continue to require, the
Company to enter into various arrangements with corporate and
10
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CV THERAPEUTICS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
academic collaborators, licensors, licensees and others, and the Company is
dependent upon the success of these parties in performing their
responsibilities. There can be no assurance that the Company will be able to
enter into additional collaborative arrangements or license agreements on
acceptable terms, or at all, or that the contemplated benefits from any of
these agreements will be realized.
The Company's business is affected by other factors, including: uncertainty
of market acceptance, intense competition and rapid technological change,
uncertainty of patent position and proprietary rights, dependence on key
personnel and the need to attract and retain key employees and consultants,
limited manufacturing, marketing and sales experience, significant government
regulation, uncertainty of product pricing and reimbursement, and product
liability exposure and the availability of insurance.
11
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CV THERAPEUTICS, INC.
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
In July 1997, the Company issued 75,000 shares of the Company's common
stock to Syntex (U.S.A.), Inc. ("Syntex"), an indirect subsidiary of Roche
Holding Limited, under an amended agreement with Syntex for the license of
ranolazine. The issuance was deemed to be exempt from registration under the
Securities Act of 1933, as amended, by virtue of Regulation D promulgated
thereunder.
On November 19, 1996, the Securities and Exchange Commission declared the
Company's registration statement (file number 2-12675) effective. The
offering commenced on November 19, 1996 and terminated following the sale of
all securities registered. J.P. Morgan Securities Inc., Invemed Associates,
Inc. and UBS Securities LLC served as the managing underwriters. The Company
registered, for its own account 1,750,000 shares of common stock for an
aggregate offering price of $14,000,000, and sold 1,750,000 shares of common
stock for an aggregate sales price of $14,000,000. In connection with the
offering, the Company incurred the following expenses and made direct or
indirect payments to others: $980,000 for underwriting discounts and
commissions and $1,050,000 for other expenses for a total of $2,030,000 in
expenses. Following the deduction of such expenses, the Company received net
offering proceeds of $11,970,000. The Company has used all the net proceeds
for temporary investments, including money market and short-and long-term
funds. Such payments were direct or indirect.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 of Regulation S-K
Exhibit Description
Number
------- ----------------------------------------------------------
10.45 Common Stock Purchase Agreement, dated October 7, 1997, by
and between CV Therapeutics, Inc. and Biotech Target S.A.
10.46* Letter Agreement between CV Therapeutics, Inc. and
Michael M. Wick, M.D., Ph.D., dated April 30, 1997
10.47* Transition Agreement between CV Therapeutics, Inc. and
Kathy Stafford dated September 15, 1997
10.48 First Amendment to Security Agreement, dated as of
March 7, 1997, by and between Hambrecht & Quist Guaranty
Finance, LLC and CV Therapeutics, Inc.
10.49 First Amendment to Security Agreement, dated as of
March 7, 1997, by and between Hambrecht & Quist Transition
Capital, LLC and CV Therapeutics, Inc.
10.50 First Amendment to Business Loan Agreement, dated as of
March 7, 1997, by and between Hambrecht & Quist Transition
Capital, LLC and CV Therapeutics, Inc.
10.51 First Amendment to Master Lease Agreement, dated as of
March 7, 1997, by and between Hambrecht & Quist Guaranty
Finance, LLC and CV Therapeutics, Inc.
10.52 Second Amendment to Security Agreement, dated as of
May 19, 1997, by and between Hambrecht & Quist Guaranty
Finance, LLC and CV Therapeutics, Inc.
10.53 Second Amendment to Security Agreement, dated as of
May 19, 1997, by and between Hambrecht & Quist Transition
Capital, LLC and CV Therapeutics, Inc.
11.1 Statement of computation of net loss per share
27.1 Financial Data Schedule
____________
* Indicates management compensatory contract, plan or arrangement.
(b) Reports on Form 8-K
None.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
CV THERAPEUTICS, INC.
Date: November 14, 1997
/s/ Louis G. Lange, M.D., Ph.D.
----------------------------------------
Louis G. Lange, M.D., Ph.D.
Chairman of the Board & Chief
Executive Officer
(Principal Executive Officer)
/s/ Kathleen A. Stafford
----------------------------------------
Kathleen A. Stafford
Chief Financial Officer
(Principal Financial and Accounting Officer)
13
<PAGE>
CV THERAPEUTICS, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
- -------------------------------------------------------------------------------
<S> <C>
10.45 Common Stock Purchase Agreement, dated October 7,
1997, by and between CV Therapeutics, Inc. and
Biotech Target S.A.
10.46* Letter Agreement between CV Therapeutics, Inc. and
Michael M. Wick, M.D., Ph.D., dated April 30, 1997
10.47* Transition Agreement between CV Therapeutics, Inc.
and Kathy Stafford dated September 15, 1997
10.48 First Amendment to Security Agreement, dated as of
March 7, 1997, by and between Hambrecht & Quist Guaranty
Finance, LLC and CV Therapeutics, Inc.
10.49 First Amendment to Security Agreement, dated as of
March 7, 1997, by and between Hambrecht & Quist Transition
Capital, LLC and CV Therapeutics, Inc.
10.50 First Amendment to Business Loan Agreement, dated as of
March 7, 1997, by and between Hambrecht & Quist Transition
Capital, LLC and CV Therapeutics, Inc.
10.51 First Amendment to Master Lease Agreement, dated as of
March 7, 1997, by and between Hambrecht & Quist Guaranty
Finance, LLC and CV Therapeutics, Inc.
10.52 Second Amendment to Security Agreement, dated as of
May 19, 1997, by and between Hambrecht & Quist Guaranty
Finance, LLC and CV Therapeutics, Inc.
10.53 Second Amendment to Security Agreement, dated as of
May 19, 1997, by and between Hambrecht & Quist Transition
Capital, LLC and CV Therapeutics, Inc.
11.1 Statement of computation of net loss per share
27.1 Financial Data Schedule
____________
</TABLE>
* Indicates management compensatory contract, plan or arrangement.
14
<PAGE>
Exhibit 10.45
CV THERAPEUTICS, INC.
COMMON STOCK PURCHASE AGREEMENT
OCTOBER 7, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 1. PURCHASE AND SALE OF COMMON STOCK. . . . . . . . . . . . . . . . . 1
SECTION 2. CLOSING DATE; DELIVERY . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Closing Date. . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Delivery. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . . . 1
3.1 Organization and Standing.. . . . . . . . . . . . . . . . . . 1
3.2 Corporate Power; Authorization. . . . . . . . . . . . . . . . 1
3.3 Issuance and Delivery of the Shares.. . . . . . . . . . . . . 2
3.4 Full Disclosure.. . . . . . . . . . . . . . . . . . . . . . . 2
3.5 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.6 Governmental Consents.. . . . . . . . . . . . . . . . . . . . 3
3.7 No Material Adverse Change. . . . . . . . . . . . . . . . . . 3
3.14 Intellectual Property . . . . . . . . . . . . . . . . . . . . 4
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER . . . . . . 4
4.1 Authorization.. . . . . . . . . . . . . . . . . . . . . . . . 4
4.2 Investment Experience.. . . . . . . . . . . . . . . . . . . . 5
4.3 Investment Intent.. . . . . . . . . . . . . . . . . . . . . . 5
4.4 Registration or Exemption Requirements. . . . . . . . . . . . 5
4.5 Restriction on Short Sales. . . . . . . . . . . . . . . . . . 5
4.6 No Legal, Tax or Investment Advice. . . . . . . . . . . . . . 6
SECTION 5. CONDITIONS TO CLOSING OF PURCHASER . . . . . . . . . . . . . . . . 6
5.1 Representations and Warranties. . . . . . . . . . . . . . . . 6
5.2 Legal Opinion.. . . . . . . . . . . . . . . . . . . . . . . . 6
5.3 Officers Certificate.. . . . . . . . . . . . . . . . . . . . 6
5.4 Covenants.. . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 6. CONDITIONS TO CLOSING OF COMPANY . . . . . . . . . . . . . . . . . 6
6.1 Representations and Warranties. . . . . . . . . . . . . . . . 6
6.2 Covenants.. . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 7. REGISTRATION RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . 7
7.1 Registration Requirements . . . . . . . . . . . . . . . . . . 7
7.2 Indemnification and Contribution. . . . . . . . . . . . . . . 9
SECTION 8. RESTRICTIONS ON TRANSFERABILITY OF SHARES: COMPLIANCE WITH
SECURITIES ACT . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.1 Restrictions on Transferability.. . . . . . . . . . . . . . . 11
8.2 Restrictive Legend. . . . . . . . . . . . . . . . . . . . . . 11
8.3 Transfer of Shares after Registration.. . . . . . . . . . . . 12
8.4 Purchaser Information.. . . . . . . . . . . . . . . . . . . . 12
SECTION 9. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9.1 Waivers and Amendments. . . . . . . . . . . . . . . . . . . . 12
9.2 Governing Law.. . . . . . . . . . . . . . . . . . . . . . . . 12
9.3 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9.4 Successors and Assigns. . . . . . . . . . . . . . . . . . . . 13
9.5 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . 13
9.6 Notices, etc. . . . . . . . . . . . . . . . . . . . . . . . . 13
9.7 Severability of this Agreement. . . . . . . . . . . . . . . . 14
9.8 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 14
9.9 Further Assurances. . . . . . . . . . . . . . . . . . . . . . 14
9.10 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
i.
<PAGE>
Exhibit A Instruction Sheet for Purchaser
Exhibit A-1 Stock Certificate Questionnaire
Exhibit A-2 Registration Statement Questionnaire
Exhibit A-3 Certificate for Corporate, Partnership, Trust, Foundation and
Joint Purchasers
Exhibit B Purchaser's Certificate of Subsequent Sale
Exhibit C Form of Legal Opinion
ii.
<PAGE>
CV THERAPEUTICS, INC.
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (the "Agreement") is made as of
October 7, 1997 (the "Effective Date"), by and between CV THERAPEUTICS, INC., a
Delaware corporation (the "Company") and BIOTECH TARGET S.A., a corporation
organized under the laws of Panama (the "Purchaser").
SECTION 1. PURCHASE AND SALE OF COMMON STOCK
Subject to the terms and conditions of this Agreement, the Company agrees
to issue and sell to Purchaser and Purchaser agrees to purchase from the Company
1,397,147 shares of the Company's Common Stock, $0.001 par value (the "Shares"),
for a purchase price of $12,923,610.
SECTION 2. CLOSING DATE; DELIVERY
2.1 CLOSING DATE. The closing of the purchase and sale of the Shares
hereunder (the "Closing") shall be held at the offices of Cooley Godward LLP,
Five Palo Alto Square, 3000 El Camino Real, Palo Alto, California, 94306 at
10:00 a.m., on October 7, 1997 or at such other time and place upon which the
Company and Purchaser shall agree. The date of the Closing is hereinafter
referred to as the "Closing Date."
2.2 DELIVERY. At the Closing, the Company will deliver to Purchaser a
certificate, registered in Purchaser's name, representing the number of shares
of Common Stock to be purchased by Purchaser. Such delivery shall be against
payment of the purchase price therefor by wire transfer to the Company's bank
account.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser as of the Closing Date as
follows:
3.1 ORGANIZATION AND STANDING. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has full power and authority to own and operate its properties and
assets and to carry on its business as presently conducted and as proposed to be
conducted. The Company is qualified as a foreign corporation to do business in
each jurisdiction in the United States in which the ownership of its property or
the conduct of its business requires such qualification, except where any
statutory fines or penalties or any corporate disability imposed for the failure
to qualify would not materially or adversely affect the Company, its assets,
financial condition or operations.
3.2 CORPORATE POWER; AUTHORIZATION. The Company has all requisite
corporate power to, and has taken all requisite corporate action to, execute
and deliver this Agreement, to sell and issue the Shares and to carry out and
perform all of its obligations under this Agreement. This Agreement
constitutes the legal, valid and binding obligation of the Company,
1.
<PAGE>
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or affecting the enforcement of creditors' rights generally, (ii) as
limited by equitable principles generally and (iii) as to those provisions of
Section 7.2 relating to indemnity or contribution, as may be limited by
applicable laws. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby by the Company will
(i) conflict with or violate any provision of the Amended and Restated
Certificate of Incorporation or Restated By-Laws of the Company; (ii)
conflict with or violate any law, rule, regulation, ordinance, order, writ,
injunction, judgment or decree applicable to the Company or its business,
which violation would have a material adverse effect on the Company; or (iii)
conflict with or result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination or cancellation of, or accelerate
the performance required by or maturity of, or result in the creation of any
security interest, lien, charge or encumbrance on any of the Company's assets
pursuant to any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, permit, license, franchise, lease contract, or other
instrument or obligation to which the Company is a party, which breach,
default, termination, cancellation, acceleration, security interest, lien,
charge or encumbrance would have a material adverse effect on the Company.
3.3 ISSUANCE AND DELIVERY OF THE SHARES. The Shares, when issued and paid
for in compliance with the provisions of this Agreement, will be validly issued,
fully paid and nonassessable. The issuance and delivery of the Shares is not
subject to preemptive, co-sale, right of first refusal or any other similar
rights of the stockholders of the Company or any liens or encumbrances,
PROVIDED, HOWEVER, that the Shares may be subject to restrictions on transfer
under state and/or federal securities laws as set forth herein or as otherwise
required by such laws at the time a transfer is proposed.
3.4 FULL DISCLOSURE. The Company has furnished to Purchaser the following
documents filed with or to be filed with the Securities and Exchange Commission
(collectively, the "SEC Documents") and the Company warrants that the
information contained in such documents, as of their respective dates, did not
contain any untrue statement of a material fact, and did not omit to state any
material fact necessary to make any statement, in light of the circumstances
under which such statement was made, not misleading:
(a) The prospectus for the Company's initial public offering of
Common Stock, dated November 19, 1996.
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997, and June 30, 1997.
(c) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
3.5 LITIGATION. Except as set forth in the SEC Documents, there is no
pending or, to the Company s knowledge, threatened action, suit or other
proceeding before any court,
2.
<PAGE>
governmental body or authority, or arbitrator to which the Company is a party
or to which its property or assets are subject and to the Company's
knowledge, no basis exists for any (i) material legal proceeding by or
against the Company or (ii) governmental proceeding or investigation of the
Company.
3.6 GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
Federal, state, or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
this Agreement except for (a) compliance with the securities and blue sky laws
in the states and other jurisdictions in which shares of Common Stock are
offered and/or sold, which compliance will be effected in accordance with such
laws, and (b) the filing of a registration statement and all amendments thereto
with the SEC as contemplated by Section 7.1 of this Agreement.
3.7 NO MATERIAL ADVERSE CHANGE. Since June 30, 1997, there have not been
any changes in the assets, liabilities, financial condition or operations of the
Company from that reflected in the SEC Documents except changes in the ordinary
course of business or which have not been, either individually or in the
aggregate, materially adverse.
3.8 CAPITALIZATION. At October 3, 1997, the Company had 7,020,444 shares
of Common Stock outstanding, held 28,527 shares of Common Stock in treasury, and
had options and warrants to purchase 916,579 and 549,504 shares of Common Stock,
respectively, outstanding.
3.9 NO VIOLATIONS. The Company is not in violation of its charter, bylaws
or other organizational document, or of any law, administrative regulation,
ordinance, order, judgment or decree of any court or governmental agency,
arbitration panel or authority applicable to the Company, except for violations
which, individually or in the aggregate, would not have a material adverse
effect on the Company. The Company is not in default in any material respect in
the performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness in any indenture,
mortgage, deed of trust, or any other agreement or instrument to which the
Company is a party or by which the Company is bound or by which the properties
of the Company are bound or affected, except for violations which, individually
or in the aggregate, would not have a material adverse effect on the Company,
and there exists no condition which, with the passage of time or otherwise,
would constitute a material default under any such document or instrument or
result in the imposition of any material penalty or the acceleration of any
material indebtedness.
3.10 GOVERNMENTAL PERMITS, ETC. The Company has all necessary franchises,
licenses, permits, certificates and other authorizations from any foreign,
federal, state or local government or governmental agency, department, or body
that are currently necessary for the operation of the business of the Company as
currently conducted and as described in reports required to be filed by the
Company under the Securities and Exchange Act of 1934, as amended (the "1934 Act
Filings") and the absence of which would have a material adverse effect on the
Company.
3.
<PAGE>
3.11 FINANCIAL STATEMENTS. The financial statements of the Company and the
related notes contained in the 1934 Act Filings present fairly, subject to
normal year end adjustments in the case of the quarterly statements, the
financial position of the Company as of the dates indicated, and the results of
its operations and cash flows for the periods therein specified and the assets
and liabilities of the Company have not changed materially since the date of the
most recent 1934 Act Filing except for changes in the ordinary course of
business. Such financial statements (including the related notes) have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods therein specified, except as disclosed
in the 1934 Act Filings.
3.12 OPERATION OF THE BUSINESS. Except as described in the 1934 Act
Filings, the Company owns and retains all such assets and contractual rights
necessary for it to operate its business as described in the 1934 Act Filings,
except where the failure to own or retain such assets or contractual rights
would not have a material adverse effect upon the operations of the Company.
3.13 ENVIRONMENTAL MATTERS. The Company is in compliance with all
applicable local, state and federal safety and environmental laws and
regulations, except where the failure to comply with such environmental laws and
regulations would not have a material adverse effect upon the operations of the
Company.
3.14 INTELLECTUAL PROPERTY. Except as described in the SEC Documents, the
Company owns or possesses sufficient rights to use all material patents, patent
rights, trademarks, copyrights, licenses, inventions, trade secrets and know-how
described or referred to in the SEC Documents, as owned or used by it or that
are necessary for the conduct of its business as now conducted or as described
in the SEC Documents. Except as described in the SEC Documents, the Company has
not entered into or become party to any material development, license or other
agreement pursuant to which it has secured the right or obligation to use, or
granted others the right or obligation to use, any trademarks, servicemarks,
trade names, copyrights, patents or any other intellectual property right. All
technical information developed by or belonging to the Company which has not
been patented has been kept confidential.
3.15 RELIANCE. The Company acknowledges that the Purchaser has reviewed
and relied upon the 1934 Act Filings in making its decision to purchase the
Shares.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
Purchaser hereby represents and warrants to the Company, effective as of
the Closing Date, as follows:
4.1 AUTHORIZATION. Purchaser represents and warrants to the Company that:
(i) Purchaser has all requisite legal and corporate or other power and capacity
and has taken all requisite corporate or other action to execute and deliver
this Agreement, to purchase the Shares and to carry out and perform all of its
obligations under this Agreement; and (ii) this Agreement constitutes the legal,
valid and binding obligation of the Purchaser, enforceable in accordance
4.
<PAGE>
with its terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, or similar laws relating to or affecting the enforcement of
creditors' rights generally and (b) as limited by equitable principles
generally.
4.2 INVESTMENT EXPERIENCE. Purchaser is an "accredited investor" as
defined in Rule 501(a) under the Securities Act of 1933, as amended (the
"Securities Act"). Purchaser is aware of the Company's business affairs and
financial condition and has had access to and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision to
acquire the Shares. Purchaser has such business and financial experience as is
required to give it the capacity to protect its own interests in connection with
the purchase of the Shares.
4.3 INVESTMENT INTENT. Purchaser is purchasing the Shares for its own
account as principal, for investment purposes only, and not with a view to, or
for, resale, distribution or fractionalization thereof, in whole or in part,
within the meaning of the Securities Act. Purchaser understands that its
acquisition of the Shares has not been registered under the Securities Act or
registered or qualified under any state securities law in reliance on specific
exemptions therefrom, which exemptions may depend upon, among other things, the
bona fide nature of Purchaser's investment intent as expressed herein.
Purchaser will complete or cause to be completed the Purchaser
Certificates/Questionnaire attached hereto as Exhibits A-1 through A-3 for use
in connection with the sale of Shares and in preparation of the Registration
Statement (as defined below), will deliver the such Certificates/Questionnaires
to the Company on or prior to the October 13, 1997, and the responses provided
therein shall be true and correct as of the Closing Date.
4.4 REGISTRATION OR EXEMPTION REQUIREMENTS. Purchaser further
acknowledges and understands that the Shares must be held for investment
purposes, and they may not be resold or otherwise transferred except in a
transaction registered under the Securities Act or pursuant to an exemption from
such registration. Purchaser understands that the certificate(s) evidencing the
Shares will be imprinted with a legend that prohibits the transfer of the Shares
unless (i) they are registered or such registration is not required, and (ii) if
the transfer is pursuant to an exemption from registration other than Rule 144
under the Securities Act ("Rule 144") and, if the Company shall so request in
writing, an opinion of counsel will be required satisfactory to the Company to
the effect that the transaction is so exempt and in compliance with applicable
state law.
4.5 RESTRICTION ON SHORT SALES. Purchaser represents and warrants to and
covenants with the Company that Purchaser has not engaged and will not engage in
any short sales of the Company's Common Stock prior to the effectiveness of the
Registration Statement, except to the extent that any such short sale is fully
covered by shares of Common Stock of the Company other than the Shares.
4.6 NO LEGAL, TAX OR INVESTMENT ADVICE. Purchaser understands that
nothing in this Agreement or any other materials presented to Purchaser in
connection with the purchase and sale of the Shares constitutes legal, tax or
investment advice and that independent legal counsel
5.
<PAGE>
has reviewed these documents and materials on Purchaser's behalf. Purchaser
has consulted such legal, tax and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection with its
purchase of the Shares.
SECTION 5. CONDITIONS TO CLOSING OF PURCHASER
Purchaser's obligation to purchase the Shares at the Closing is, at the
option of Purchaser, subject to the fulfillment or waiver as of the Closing Date
of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by the Company in Section 3 hereof shall be true and correct in all
material respects when made, and shall be true and correct in all material
respects on the Closing Date with the same force and effect as if they had been
made on and as of said date.
5.2 LEGAL OPINION. The Company shall have delivered a legal opinion from
Cooley Godward LLP, counsel to the Company, addressed to Purchaser in the form
attached hereto as Exhibit C with respect to the sale of the Shares by the
Company hereunder.
5.3 OFFICERS CERTIFICATE. The Company shall deliver to Purchaser a
certificate, dated as of the Closing Date, signed by the Chief Executive Officer
of the Company, stating that the representations and warranties set forth in
Section 3 are true as of and all of the closing conditions set forth in Section
5 have been satisfied on the Closing Date.
5.4 COVENANTS. All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the Closing Date shall
have been performed or complied with in all material respects.
SECTION 6. CONDITIONS TO CLOSING OF COMPANY
The Company's obligation to sell and issue the Shares is, at the option of
the Company, subject to the fulfillment or waiver of the following conditions:
6.1 REPRESENTATIONS AND WARRANTIES. The representations made by Purchaser
in Section 4 hereof shall be true and correct in all material respects when
made, and shall be true and correct in all material respects on the Closing Date
with the same force and effect as if they had been made on and as of such date.
6.2 COVENANTS. All covenants, agreements and conditions contained in this
Agreement to be performed by Purchaser on or prior to the Closing Date shall
have been performed or complied with in all material respects.
SECTION 7. REGISTRATION RIGHTS
7.1 REGISTRATION REQUIREMENTS
6.
<PAGE>
(a) Except as provided in paragraph (d) below, the Company shall
prepare and file a registration statement on Form S-3 with the SEC under the
Securities Act to register the resale of the Shares by Purchaser on November 19,
1997 and use its best efforts to cause the registration statement to be declared
effective as soon as practicable. In the event that at any time the filing of
such registration statement is undertaken or is required to be undertaken the
Company fails to qualify for use of Form S-3 for purposes of registering for
resale the Shares, the Company shall cause a registration statement on Form S-1
to be filed as soon as practicable thereunder. The Purchaser agrees to furnish
promptly to the Company in writing all information reasonably required by the
Company to file such a registration statement on Form S-3 or a registration
statement on Form S-1, as the case may be (either such registration statement
referred to hereinafter as the "Registration Statement").
(b) The Company shall pay all Registration Expenses (as defined
below) in connection with any registration, qualification or compliance
hereunder, and Purchaser shall pay all Selling Expenses (as defined below) and
other expenses that are not Registration Expenses relating to the Shares resold
by Purchaser. "Registration Expenses" shall mean all expenses, except for
Selling Expenses, incurred by the Company in complying with the registration
provisions herein described, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel and independent public accountants for the Company,
blue sky fees, transfer agent fees and expenses and the expense of any special
audits incident to or required by any such registration. "Selling Expenses"
shall mean selling commissions, underwriting fees and stock transfer taxes
applicable to the Shares and, subject to Section 9.10, all fees and
disbursements of counsel for Purchaser.
(c) In the case of the registration effected by the Company pursuant
to these registration provisions, the Company will use its best efforts to: (i)
keep such registration effective until the earlier of (A) the third anniversary
of the Closing Date, (B) such date as all of the Shares have been resold or (C)
such time as all of the Shares held by Purchaser can be sold within a given
three-month period without compliance with the registration requirements of the
Securities Act pursuant to Rule 144; (ii) prepare and file with the SEC such
amendments and supplements to the Registration Statement and the prospectus used
in connection with the Registration Statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by the Registration Statement; (iii) furnish such number of
prospectuses and other documents incident thereto, including any amendment of or
supplement to the prospectus, as Purchaser from time to time may reasonably
request in order to facilitate the public sale or other disposition of all or
any of the Shares held by Purchaser; (iv) cause all Shares registered as
described herein to be listed on each securities exchange and quoted on each
quotation service on which similar securities issued by the Company are then
listed or quoted; (v) provide a transfer agent and registrar for all Shares
registered pursuant to the Registration Statement and a CUSIP number for all
such Shares; (vi) promptly comply with all applicable rules and regulations of
the SEC; and (vii) file the documents required of the Company and otherwise
promptly obtain, if applicable, and maintain requisite blue sky clearance in (A)
all jurisdictions in which any of the Shares are originally sold and (B) all
other states specified in writing by Purchaser, provided as to clause (B),
however, that the Company shall not be required to qualify to do business or
consent to service of process
7.
<PAGE>
in any state in which it is not now so qualified or has not so consented.
The Company shall use its best efforts to qualify for use of Form S-3 under
the Securities Act to register the resale of the Shares and to maintain such
qualification during the periods described in paragraph (i).
(d) The Company may delay the filing of the Registration Statement
for up to eighty (80) days by giving written notice to Purchaser if the Company
shall have determined that the Company may be required to disclose any material
corporate development which disclosure may have a negative material effect on
the Company. The duration of any such delay shall be added to the period of
time that the Company agrees to keep the Registration Statement open.
(e) Following the effectiveness of the Registration Statement, the
Company may, at any time, but not more than once in any six-month period,
suspend the effectiveness of such registration statement for up to 45 days, as
appropriate (a "Suspension Period"), by giving notice to Purchaser, if the
Company shall have determined that the Company may be required to disclose any
material corporate development which disclosure may have a negative material
effect on the Company. The Company agrees to use commercially reasonable
efforts to minimize the length of any suspension. The duration of any
Suspension Period shall be added to the period of time that the Company agrees
to keep the Registration Statement effective. Purchaser agrees that, upon
receipt of any notice from the Company of a Suspension Period, Purchaser shall
forthwith discontinue disposition of shares covered by such Registration
Statement or prospectus until Purchaser (i) is advised in writing by the Company
that the use of the applicable prospectus may be resumed, (ii) has received
copies of a supplemental or amended prospectus, if applicable, and (iii) has
received copies of any additional or supplemental filings which are incorporated
or deemed to be incorporated by reference in such prospectus.
(f) The Company will, as expeditiously as possible, notify Purchaser
(i) of the effective date of the Registration Statement and the date when any
post-effective amendment to the Registration Statement becomes effective; (ii)
of any stop order or notification from the SEC or any other jurisdiction as to
the suspension of the effectiveness of the Registration Statement; and (iii) of
the end of any suspension hereunder.
(g) With a view to making available to Purchaser the benefits of Rule
144 and any other rule or regulation of the SEC that may at any time permit
Purchaser to sell Shares to the public without registration or pursuant to
registration, the Company covenants and agrees to: (i) make and keep public
information available, as those terms are understood and defined in Rule 144,
until the earlier of (A) the third anniversary of the Closing Date or (B) such
date as all of the Shares shall have been resold; (ii) file with the SEC in a
timely manner all reports and other documents required of the Company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and maintain
registration of its Common Stock under Section 12 of the Exchange Act; and (iii)
furnish to Purchaser upon request, as long as Purchaser owns any Shares, (A) a
written statement by the Company that it has complied with the reporting
requirements of the Exchange Act, (B) a copy of the most recent annual or
quarterly report of the Company, and (C) such other information as may be
reasonably requested in order to avail Purchaser of any rule or regulation of
the SEC that permits the selling of any such Shares without registration.
8.
<PAGE>
7.2 INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify Purchaser and hold Purchaser
harmless from and against any losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) to which Purchaser may become subject (under
the Securities Act, Exchange Act, state securities laws or otherwise) insofar as
such losses, claims, damages or liabilities (or actions, proceedings or
settlements in respect thereof) arise out of, or are based upon, (i) any untrue
statement (or alleged untrue statement) of a material fact contained in the
Registration Statement, on the effective date thereof or any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, (ii) the omission or the alleged omission of a material fact required
to be stated therein or necessary to make the statements therein not misleading,
(iii) any failure by the Company (or its agents) to fulfill any undertaking
included in the Registration Statement, or (iv) breach by the Company of its
representations, warranties, covenants or obligations in this Agreement, and the
Company will, as incurred, reimburse Purchaser for any legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, loss, damage, proceeding or claim; PROVIDED, HOWEVER, that the Company
shall not be liable in any such case to the extent that such loss, claim, damage
or liability arises out of, or is based upon (i) an untrue statement (or
omission) made in such Registration Statement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of Purchaser
specifically for use in preparation of the Registration Statement unless
Purchaser provided the Company with additional written information a reasonable
time prior to the effectiveness of the Registration Statement as is required to
make the previously supplied information true and correct, (ii) the failure of
Purchaser to comply with the covenants and agreements contained in Section 7.1
or 8.3 hereof, or (iii) any untrue statement (or omission) in any Prospectus
that is corrected in any subsequent Prospectus that was delivered to Purchaser
by the Company a reasonable time prior to the pertinent sale or sales by
Purchaser. The Company will reimburse Purchaser for any legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligations under
this section and the possibility that such payments might later be held to be
improper, provided, that (i) to the extent any such payment is ultimately held
to be improper, the persons receiving such payments shall promptly refund them
and (ii) such persons shall provide to the Company, upon request, reasonable
assurances of their ability to effect any refund, when and if due.
(b) Purchaser agrees to indemnify and hold harmless the Company from
and against any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) to which the Company may become subject (under
the Securities Act or otherwise) insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon (i) an untrue statement made in such Registration Statement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of Purchaser specifically for use in preparation of the
Registration Statement, PROVIDED, HOWEVER, that Purchaser shall not be liable in
any such case for any untrue statement included in any Prospectus which
statement has been corrected, in writing, by Purchaser and delivered to the
Company a reasonable time before the sale from which such loss occurred, (ii) a
breach by the
9.
<PAGE>
Purchaser of its representations, warranties, covenants or obligations in
this Agreement, or (iii) any untrue statement in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the Purchaser
prior to the pertinent sale or sales by Purchaser, PROVIDED, FURTHER,
HOWEVER, that the liability of Purchaser hereunder shall be limited to the
proceeds received by Purchaser from the sale of the Shares covered by such
Registration Statement; and PROVIDED, FURTHER, HOWEVER, that the obligations
of Purchaser hereunder shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability, or action if settlement is effected
without the consent of Purchaser. Purchaser will reimburse the Company for
any legal or other expenses reasonably incurred in investigating, defending
or preparing to defend any such action, proceeding or claim notwithstanding
the absence of a judicial determination as to the propriety and
enforceability of the obligations under this section and the possibility that
such payments might later be held to be improper, provided, that (i) to the
extent any such payment is ultimately held to be improper, the persons
receiving such payments shall promptly refund them and (ii) such persons
shall provide to Purchaser, upon request, reasonable assurances of their
ability to effect any refund, when and if due.
(c) Promptly after receipt by any indemnified person of a notice of a
claim or the commencement of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 7.2, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and the indemnifying person shall have been notified thereof,
the indemnifying person shall be entitled to participate therein, and, to the
extent that it shall wish, to assume and undertake the defense thereof, with
counsel reasonably satisfactory to the indemnified person. After notice from
the indemnifying person to such indemnified person of the indemnifying person's
election to assume and undertake the defense thereof, the indemnifying person
shall not be liable to such indemnified person for any legal expenses
subsequently incurred by such indemnified person in connection with the defense
thereof; PROVIDED, HOWEVER, that if there exists or shall exist a conflict of
interest that would make it inappropriate in the reasonable judgment of the
indemnified person for the same counsel to represent both the indemnified person
and such indemnifying person or any affiliate or associate thereof, the
indemnified person shall be entitled to retain its own counsel at the expense of
such indemnifying person.
(d) If the indemnification provided for in this Section 7.2 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions proceedings or settlements in respect thereof) referred
to therein, then the indemnifying party shall contribute to the amount paid or
payable by such indemnified party as result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Purchaser
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to
10.
<PAGE>
information supplied by the Company on the one hand or Purchaser on the other
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
Purchaser agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation or by
any other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), Purchaser shall not be required to
contribute any amount in excess of the amount by which the amount received by
Purchaser (net of Selling Expenses) from the sale of the Shares to which such
loss relates exceeds the amount of any damages which Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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.
(e) The obligations of the Company and Purchaser under this Section
7.2 shall be in addition to any liability which the Company and Purchaser may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls the Company or Purchaser within the meaning of the
Securities Act.
SECTION 8. RESTRICTIONS ON TRANSFERABILITY OF SHARES: COMPLIANCE WITH
SECURITIES ACT
8.1 RESTRICTIONS ON TRANSFERABILITY. The Shares shall not be transferable
in the absence of a registration under the Securities Act or an exemption
therefrom or in the absence of compliance with any term of this Agreement. The
Company shall be entitled to give stop transfer instructions to its transfer
agent with respect to the Shares in order to enforce the foregoing restrictions.
8.2 RESTRICTIVE LEGEND. Each certificate representing Shares shall bear
substantially the following legends (in addition to any legends required under
applicable securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR ANY STATE SECURITIES LAWS. THE SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM.
ADDITIONALLY, THE TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO CERTAIN RESTRICTIONS SPECIFIED IN THE COMMON STOCK PURCHASE
AGREEMENT DATED OCTOBER 7, 1997 BETWEEN THE COMPANY AND THE ORIGINAL
PURCHASER, AND NO TRANSFER OF SHARES SHALL BE VALID OR EFFECTIVE ABSENT
11.
<PAGE>
COMPLIANCE WITH SUCH RESTRICTIONS. ALL SUBSEQUENT HOLDERS OF THIS
CERTIFICATE WILL HAVE AGREED TO BE BOUND BY CERTAIN OF THE TERMS OF THE
AGREEMENT, INCLUDING SECTIONS 7.1 AND 8.3 OF THE AGREEMENT. COPIES OF THE
AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE
REGISTERED HOLDER OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY.
Upon the request of Purchaser, the Company shall remove the foregoing
legend from the certificates evidencing the Shares and issue to Purchaser new
certificates free of any transfer legend if with such request, and at the
request of the Company, the Company shall have received an opinion of counsel
satisfactory to the Company, to the effect that any transfers by Purchaser of
such Shares may be made to the public without compliance with either Section 5
of the Securities Act or Rule 144 thereunder and applicable state securities
laws.
8.3 TRANSFER OF SHARES AFTER REGISTRATION. Purchaser hereby covenants
with the Company not to make any sale of the Shares except either (i) in
accordance with the Registration Statement, in which case Purchaser covenants to
comply with the requirement of delivering a current prospectus, (ii) in
accordance with Rule 144, in which case Purchaser covenants to comply with Rule
144, or (iii) otherwise in accordance with and pursuant to applicable federal
and state securities laws. Purchaser further acknowledges and agrees that such
Shares are not transferable on the books of the Company unless the certificate
submitted to the Company's transfer agent evidencing such Shares is accompanied
by a separate certificate executed by an officer of, or other person duly
authorized by, the Purchaser in the form attached hereto as Exhibit B.
8.4 PURCHASER INFORMATION. Purchaser covenants that it will promptly
notify the Company in writing of any changes in the information set forth in the
Registration Statement regarding Purchaser.
SECTION 9. MISCELLANEOUS
9.1 WAIVERS AND AMENDMENTS. The terms of this Agreement may be waived or
amended with the written consent of the Company and Purchaser.
9.2 GOVERNING LAW. This Agreement shall be governed in all respects by
and construed in accordance with the laws of the State of Delaware without any
regard to conflicts of laws principles.
9.3 SURVIVAL. The representations, warranties, covenants and agreements
made in this Agreement shall survive any investigation made by the Company or
Purchaser and the Closing. With respect to any registration made pursuant to
this Agreement, the covenants and agreements set forth in section 7.1 shall
continue in effect until all obligations hereunder with respect thereto are
fulfilled, and provided that the indemnification and contribution obligations as
set forth in Section 7.2 shall survive for the period of the statute of
limitations with respect thereto.
12.
<PAGE>
9.4 SUCCESSORS AND ASSIGNS. The provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties to this Agreement. Notwithstanding the foregoing,
Purchaser shall not assign this Agreement without the prior written consent of
the Company, which consent shall not be unreasonably withheld, except that
Purchaser is entitled to assign this Agreement to its Affiliates (as such term
is defined in Rule 12b-2 of the Exchange Act).
9.5 ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
thereof.
9.6 NOTICES, ETC. All notices and other communications required or
permitted under this Agreement shall be effective upon receipt and shall be in
writing and may be delivered in person, by telecopy, overnight delivery service
or registered or certified United States mail, addressed to the Company or
Purchaser, as the case may be, at their respective addresses set forth below:
If to the Company:
CV Therapeutics, Inc.
3172 Porter Drive
Palo Alto, CA 94304
Attn: Louis G. Lange, M.D., Ph.D.
Chief Executive Officer
Telephone: (650) 812-9510
Facsimile: (650) 858-0388
With a copy to:
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306-2155
Attn: Alan C. Mendelson, Esq.
Telephone: (650) 843-5000
Facsimile: (650) 857-0663
If to Purchaser:
Biotech Target S.A.
Swiss Bank Tower
Panama 1
Republic of Panama
13.
<PAGE>
With copies to:
Bellevue Asset Management AG
Grafenauweg 4
CH-6301 Zug
SWITZERLAND
Attn: Dr. Andreas Bremer
Telephone: 011-41-724-5920
Facsimile: 011-41-724-5958
and:
Baker & McKenzie
815 Connecticut Avenue, N.W.
Washington, D.C. 20006
Attn: Daniel Goelzer
Telephone: (202) 452-7000
Facsimile: (202) 452-7072
All notices and other communications shall be effective upon the earlier of
actual receipt thereof by the person to whom notice is directed or (i) in the
case of notices and communications sent by personal delivery or telecopy, one
business day after such notice or communication arrives at the applicable
address or was successfully sent to the applicable telecopy number, (ii) in the
case of notices and communications sent by overnight delivery service, at noon
(local time) on the second business day following the day such notice or
communication was sent, and (iii) in the case of notices and communications sent
by United States mail, seven days after such notice or communication shall have
been deposited in the United States mail. Any notice delivered to a party
hereunder shall be sent simultaneously, by the same means, to such party's
counsel as set forth above.
9.7 SEVERABILITY OF THIS AGREEMENT. If any provision of this Agreement
shall be judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
9.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
9.9 FURTHER ASSURANCES. Each party to this Agreement shall do and perform
or cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as the other party hereto may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
14.
<PAGE>
9.10 EXPENSES. The Company agrees to bear the cost of reasonable fees and
expenses of one counsel for the Purchaser, in an amount not to exceed $10,000,
and reasonable fees and expenses of one counsel for the Purchaser in connection
with its review of the Registration Statement.
9.11 CHOICE OF FORUM; VENUE; SERVICE OF PROCESS. Any claim, suit, action
or proceeding between the parties hereto relating to this Agreement, to any
document, instrument, or agreement delivered pursuant hereto, referred to
herein, or contemplated hereby, or in any other manner arising out of or
relating to the transactions contemplated by or referenced in this Agreement,
shall be commenced and maintained exclusively in the United States District of
Delaware or, if such Court lacks jurisdiction over the subject matter, in a
state court of competent subject matter jurisdiction sitting in the State of
Delaware. The parties hereby submit themselves unconditionally and irrevocably
to the personal jurisdiction of such courts. The parties further agree that
venue shall be exclusively in Delaware. The parties irrevocably waive any
objection to such personal jurisdiction or venue including, but not limited to,
the objection that any suit, action, or proceeding brought in the State of
Delaware has been brought in an inconvenient forum. The parties irrevocably
agree that process issuing from such courts may be served on them, either
personally or by certified mail, return receipt requested, at the addresses
given in Section 9.6 hereof or such addresses as are subsequently confirmed in
writing; and further irrevocably waive any objection to service of process made
in such manner and at such addresses, including without limitation, any
objection that service in such manner and at such addresses is not authorized by
the local or procedural laws of the State of Delaware.
15.
<PAGE>
The foregoing agreement is hereby executed as of the date first above
written.
CV THERAPEUTICS, INC. BIOTECH TARGET S.A.
By: /s/ Louis G. Lange By: /s/ Dr. Andreas Bremer
----------------------------- --------------------------------
Louis G. Lange, M.D., Ph.D. Dr. Andreas Bremer
Chief Executive Officer Authorized Signatory
By: /s/ H. Jorg Graf
--------------------------------
H. Jorg Graf
Authorized Signatory
<PAGE>
EXHIBIT A
INSTRUCTION SHEET FOR PURCHASER
(to be read in conjunction with the entire
Common Stock Purchase Agreement)
A. Complete the following items in the Common Stock Purchase Agreement:
1. Provide the information regarding the Purchaser requested on the
signature page. The Agreement must be executed by an individual
authorized to bind the Purchaser.
2. Exhibit A-1 - Stock Certificate Questionnaire:
Provide the information requested by the Stock Certificate
Questionnaire.
3. Exhibit A-2 - Registration Statement Questionnaire:
Provide the information requested by the Registration Statement
Questionnaire.
4. Exhibit A-3 - Purchaser Certificate:
Provide the information requested by the Certificate.
5. Return the signed Common Stock Purchase Agreement including the
properly completed Exhibit A to:
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Attn: Joanne Marshall Shea
Fax: (650) 857-0663
B. Instructions regarding the transfer of funds for the purchase of Shares
will be telecopied to Purchaser by the Company at a later date.
C. Upon the resale of the Shares by Purchaser after the Registration Statement
covering the Shares is effective, as described in the Common Stock Purchase
Agreement, Purchaser:
(i) must deliver a current prospectus, and annual and quarterly
reports of the Company to the buyer (prospectuses, and annual and
quarterly reports may be obtained from the Company at the
Purchaser's request); and
1.
<PAGE>
(ii) must send a letter in the form of Exhibit B to the Company so
that the Shares may be properly transferred.
2.
<PAGE>
EXHIBIT A-1
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 4.3 of the Common Stock Purchase Agreement, please
provide us with the following information:
1. The exact name that the Shares
are to be registered in (this is
the name that will appear on the
stock certificate(s)). You may
use a nominee name if
appropriate:
____________________________
2. The relationship between the
Purchaser of the Shares and the
Registered Holder listed in
response to item 1 above:
____________________________
3. The mailing address of the
Registered Holder listed in
response to item 1 above:
____________________________
____________________________
____________________________
____________________________
____________________________
4. The Tax Identification Number of
the Registered Holder listed in
response to item 1 above:
____________________________
<PAGE>
EXHIBIT A-2
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information regarding the Purchaser.
1. Please state your organization's name exactly as it should appear in
the Registration Statement:
2. Have you or your organization had any position, office or other
material relationship within the past three years with the Company?
_____ Yes _____ No
If yes, please indicate the nature of any such relationships below:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
EXHIBIT A-3
CERTIFICATE FOR CORPORATE, PARTNERSHIP,
TRUST, FOUNDATION AND JOINT PURCHASERS
If the investor is a corporation, partnership, trust, pension plan,
foundation, joint purchaser (other than a married couple) or other entity, an
authorized officer, partner, or trustee must complete, date and sign this
Certificate.
CERTIFICATE
The undersigned certifies that the representations and responses below are
true and accurate:
(a) The investor has been duly formed and is validly existing and has full
power and authority to invest in the Company. The person signing on behalf of
the undersigned has the authority to execute and deliver the Common Stock
Purchase Agreement on behalf of the Purchaser and to take other actions with
respect thereto.
(b) Indicate the form of entity of the undersigned:
_____ Limited Partnership
_____ General Partnership
_____ Corporation
_____ Revocable Trust (identify each grantor and indicate under
what circumstances the trust is revocable by the grantor):
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
(Continue on a separate piece of paper, if necessary.)
_____ Other Type of Trust (indicate type of trust and, for trusts
other than pension trusts, name the grantors and
beneficiaries):
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
(Continue on a separate piece of paper, if necessary.)
1.
<PAGE>
_____ Other form of organization (indicate form of organization):
____________________________________________________________.
(c) Indicate the date the undersigned entity was formed:__________________.
(d) In order for the Company to offer and sell the Shares in conformance
with state and federal securities laws, the following information must be
obtained regarding your investor status. Please initial each category
applicable to you as an investor in the Company.
______ 1. A bank as defined in Section 3(a)(2) of the Securities Act,
or any savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether acting in its
individual or fiduciary capacity;
______ 2. A broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934;
______ 3. An insurance company as defined in Section 2(13) of the
securities Act;
______ 4. An investment company registered under the Investment
Company Act of 1940 or a business development company as defined in
Section 2(a)(48) of that Act;
______ 5. A Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958;
______ 6. A plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan
has total assets in excess of $5,000,000;
______ 7. An employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment decision is
made by a plan fiduciary, as defined in Section 3(21) of such act,
which is either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee benefit
plan has total assets in excess of $5,000,000 or, if a self-directed
plan, with investment decisions made solely by persons that are
accredited investors;
______ 8. A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
______ 9. An organization described in Section 501(c)(3) of the
Internal Revenue Code, a corporation, Massachusetts or similar
business trust, or
2.
<PAGE>
partnership, not formed for the specific purpose of acquiring the
Shares, with total assets in excess of $5,000,000;
______ 10. A trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Shares, whose
purchase is directed by a sophisticated person who has such knowledge
and experience in financial and business matters that such person is
capable of evaluating the merits and risks of investing in the
Company;
______ 11. An entity in which all of the equity owners qualify
under any of the above subparagraphs. If the undersigned belongs to
this investor category only, list the equity owners of the
undersigned, and the investor category which each such equity owner
satisfies:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
(Continue on a separate piece of paper, if necessary.)
(e) The state of incorporation or formation of the investor is __________
and the investor's principal office is located in the state of _______________.
Dated:_____________________, 19__
__________________________________________
Name of investor
__________________________________________
Signature and title of authorized
officer, partner or trustee
3.
<PAGE>
EXHIBIT B
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
To: CV Therapeutics, Inc.
3172 Porter Drive
Palo Alto, CA 94304
The undersigned, the Purchaser or an officer of, or other person duly
authorized by the Purchaser, hereby certifies that __________________ was the
Purchaser of the shares evidenced by the attached certificate, and as such,
proposes to transfer such shares on or about_________ either (check the
applicable box) / / (i) in accordance with the registration statement, file
number ________ in which case the Purchaser certifies that the requirement of
delivering a current prospectus has been complied with or will be complied with
in connection with such sale; / / (ii) in accordance with Rule 144 under the
Securities Act of 1933 ("Rule 144"), in which case the Purchaser certifies that
it has complied with or will comply with the requirements of Rule 144; or / /
(iii) otherwise in accordance with and pursuant to applicable federal and state
securities laws.
Print or type:
Name of Purchaser: _________________________________________________
Name of Individual
representing Purchaser: _________________________________________________
Title of Individual
representing Purchaser: _________________________________________________
Signature by:
Individual representing
Purchaser: _________________________________________________
<PAGE>
EXHIBIT C
FORM OF OPINION
October 7, 1997
Biotech Target S.A.
Swiss Bank Tower
Panama 1
Republic of Panama
RE: SALE AND PURCHASE OF CV THERAPEUTICS, INC. COMMON STOCK
Gentlemen:
We have acted as counsel for CV Therapeutics, Inc., a Delaware corporation (the
"Company"), in connection with the issuance and sale of 1,397,147 shares of the
Company's Common Stock to Biotech Target S.A., a corporation organized under the
laws of Panama ("Purchaser"), pursuant to the terms of that certain Common Stock
Purchase Agreement, dated October 7, 1997, by and between the Company and
Purchaser (the "Agreement"). The shares of Common Stock issued to Purchaser at
the closing (the "Closing") are referred to herein as the "Shares". We are
rendering this opinion pursuant to Section 5.2 of the Agreement. Except as
otherwise defined herein, capitalized terms used but not defined herein have the
respective meanings given to them in the Agreement.
In connection with this opinion, we have examined and relied upon the
representations and warranties as to factual matters contained in and made
pursuant to the Agreement by the parties thereto and originals or copies
certified to our satisfaction, of such records, documents, certificates,
opinions, memoranda and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below. Where we render
an opinion "to the best of our knowledge" or concerning an item "known to us" or
our opinion otherwise refers to our knowledge, it is based solely upon (i) an
inquiry of attorneys within this firm who perform legal services for the
Company, (ii) receipt of a certificate executed by an officer of the Company
covering such matters, and (iii) such other investigation, if any, that we
specifically set forth herein.
In rendering this opinion, we have assumed: the genuineness and authenticity of
all signatures on original documents; the authenticity of all documents
submitted to us as originals; the conformity to originals of all documents
submitted to us as copies; the accuracy, completeness and authenticity of
certificates of public officials; and the due authorization, execution and
delivery of all documents where authorization, execution and delivery are
prerequisites to the effectiveness of such documents (except the due
authorization, execution and delivery of the
<PAGE>
Agreement by the Company). We have also assumed: that all individuals
executing and delivering documents had the legal capacity to so execute and
deliver; that you have received all documents you were to receive under the
Agreement; that the Agreement is an obligation binding upon you; that you
have filed any required California franchise or income tax returns and have
paid any required California franchise or income taxes; and that there are no
extrinsic agreements or understandings among the parties to the Agreement
that would modify or interpret the terms of the Agreement or the respective
rights or obligations of the parties thereunder.
Our opinion is expressed only with respect to the federal laws of the United
States of America and the laws of the State of California and the General
Corporation Law of the State of Delaware. We express no opinion as to whether
the laws of any particular jurisdiction apply, and no opinion to the extent that
the laws of any jurisdiction other than those identified above are applicable to
the subject matter hereof. We are not rendering any opinion as to compliance
with any antifraud law, rule or regulation relating to securities, or to the
sale or issuance thereof.
With regard to our opinion in paragraph 4 below, we have examined and relied
upon a certificate executed by an officer of the Company, to the effect that the
consideration for all outstanding shares of capital stock of the Company was
received by the Company in accordance with the provisions of the applicable
Board of Directors resolutions and any plan or agreement relating to the
issuance of such shares, and we have undertaken no independent verification with
respect thereto.
On the basis of the foregoing, in reliance thereon and with the foregoing
qualifications, we are of the opinion that:
1. The Company has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Delaware.
2. The Company has the requisite corporate power to own or lease its
property and assets and to conduct its business as it is currently being
conducted and, to the best of our knowledge, is qualified as a foreign
corporation to do business in each jurisdiction in the United States in which
the ownership of its property or the conduct of its business requires such
qualification and where any statutory fines or penalties or any corporate
disability imposed for the failure to qualify would materially or adversely
affect the Company, its assets, financial condition or operations.
3. The Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes a valid, legal and binding agreement of
the Company enforceable against the Company in accordance with its terms, except
as rights to indemnity under Section 7.2 of the Agreement may be limited by
applicable laws and except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, arrangement, moratorium or other
2.
<PAGE>
similar laws affecting creditors' rights, and subject to general equity
principles and to limitations on availability of equitable relief, including
specific performance.
4. The Shares have been duly authorized and, upon issuance and delivery
in accordance with the terms of the Agreement, will be validly issued, fully
paid and nonassessable.
5. The offer and sale of the Shares as contemplated by the Agreement do
not violate any provision of the Company's Amended and Restated Certificate of
Incorporation or Restated Bylaws and do not violate or contravene (a) any
governmental statute, rule or regulation applicable to the Company or (b) any
order, writ, judgment, injunction, decree, determination or award which has been
entered against the Company and of which we are aware, the violation or
contravention of which would materially and adversely affect the Company, its
assets, financial condition or operations.
6. All consents, approvals, authorizations, or orders of, and filings,
registrations, and qualifications with any regulatory authority or governmental
body in the United States required for the issuance and sale of the Shares as
contemplated by the Agreement, have been made or obtained, except for the filing
of a Form D pursuant to the Securities and Exchange Commission Regulation D.
7. The offer and sale of the Shares as contemplated by the Agreement is
exempt from the registration requirements of the Securities Act of 1933, as
amended.
3.
<PAGE>
This opinion is intended solely for your benefit and is not to be made available
to or be relied upon by any other person, firm, or entity without our prior
written consent.
Very truly yours,
COOLEY GODWARD LLP
By __________________________
Deborah A. Marshall
4.
<PAGE>
Exhibit 10.46
[CV THERAPEUTICS LETTERHEAD]
April 30, 1997
Michael M. Wick, MD, PhD
28254 Radcliffe Lane
Los Altos, CA 94022
Dear Mike:
CV Therapeutics ("the Company") accepts your resignation as Senior Vice
President, Research, effective May 31, 1997. On May 31, 1997, you will be
paid for all salary owed to you up through that date, as well as any earned
unpaid vacation that will have accrued as of May 31, 1997. In order to
assist you with your transition from the Company, the Company is willing to
provide you with the following additional compensation and benefits.
For the period of June 1, 1997 - February 28, 1998 you will act as a
consultant to the Company ("the Consulting Period"), and shall perform such
services as may be reasonably requested. The consultancy will be to focus on
areas at my direction, such as the cell cycle program, the A1 Agonist program
and the chemistry related to CVT-124. The work required will not exceed more
than one day per week, at the maximum. On June 1, 1997, you will receive a
lump sum payment for 4-1/2 additional months salary (or $71,250.00, minus any
applicable taxes). For the period of October 16, 1997 through February 28,
1998 under your consultancy, you will be paid at your current salary rate
(nine payments of $7,916.67 each, minus any applicable taxes).
During your Consulting Period, your stock options will continue to vest at
their current rate under the terms of your consultancy. Attached hereto as
Exhibit A is a copy of your current stock option status report. As of June
1, 1997 these options will be non-qualified options, and I would advise you
to consult with an appropriate professional regarding any questions you might
have on the tax treatment of your options. During the Consulting Period, the
Company will provide you with reasonable access to its facilities and to
administrative support. We will also provide you with outplacement services
for up to one year, or until you have found employment, whichever comes
soonest.
Your medical, dental and vision benefit coverage will continue through May
31, 1997. Subsequent to this date, you are eligible to continue your coverage
under COBRA. If you elect to continue your coverage, CV Therapeutics will
cover the cost of your COBRA payment for up to nine months (up to and
including the month of February 1998).
At regular intervals during the Consulting Period, you may submit any
documented expense reimbursement statements reflecting any business expenses
you've incurred through the consulting period, for which you seek
reimbursement. Any expense greater than $500, or any business travel during
the consulting period would require prior approval. During the consulting
period, there are no responsibilities or authority on behalf
1
<PAGE>
of the Company other than as provided for above. You agree not to represent
the Company in any manner to any third party unless we discuss it beforehand.
You agree that for one (1) year following the Consulting Period, you will
not, either directly or through others, solicit or attempt to solicit any
employee, consultant, or independent contractor of the Company to terminate
his or her relationship with the Company in order to become an employee,
consultant or independent contractor to or for any other person or entity.
You agree to return all Company property in your possession within five days
of May 31, 1997 (by June 5, 1997) and acknowledge that nothing herein shall
impair the covenants and obligations set forth in your Employment,
Confidential Information and Invention Assignment Agreement ("Proprietary
Information Agreement"). A copy of which is attached hereto as Exhibit B.
We mutually agree that neither party will disparage the other in any manner
likely to be harmful to the other party, his or the Company's business
reputation, or the personal or business reputation of the Company's
directors, shareholders, or employees, provided that each party shall respond
accurately and fully to any question, inquiry or request for information when
required by legal process. We agree to prepare a mutually acceptable
announcement regarding your departure.
In the event that the Company terminates your consultancy for cause prior to
February 28, 1998, the Company's obligation to pay any amounts to you under
this consultancy or to vest any additional vesting of stock options will
cease immediately, and your consultancy shall end immediately. For purposes
of this paragraph, "cause" shall mean: (i) indictment or conviction of any
felony or of any crime involving dishonesty; (ii) participation in any fraud
or act of dishonesty against the Company; (iii) material breach of your
duties of the Company including but not limited to unsatisfactory performance
of job duties or violations of Company policy; (iv) material breach of your
Proprietary Information Agreement; or (v) material breach of any of the
covenants in this Agreement. "Cause" may include any single instance of
material breach of your duties as a consultant. [to be notified and given
10 days to cure breach](MW/LL)
In consideration for the Company providing you with the above additional pay
and benefits, you agree that this arrangement will constitute full and final
release and settlement of any and all claims, charges, and the like relating
to your employment or to your termination from employment, including any
claim in contract, tort, or under any federal or state employment statute, or
employment discrimination statutes, including Federal and State statutes
which govern age discrimination, which you may now or in the future have
against the Company or anyone connected with it.
As part of your full and final release of any and all claims against the
Company, and parties connected to the Company, you agree to waive your rights
under California Civil Code section 1542 which provides 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 EFFECTED THIS SETTLEMENT WITH THE
DEBTOR."
2
<PAGE>
We agree to keep confidential any and all language relating to the terms of
this Agreement. You also acknowledge that the Company has no obligation or
liability to you except as provided by this Agreement.
Pursuant to the Older Worker's Benefit Protection Act, you have up to and
including twenty-one (21) days from the date of this letter (up until May 21,
1997), in which to accept the terms of this Agreement, though you may accept
it at any time within those 21 days. You may consult an attorney of your
choice about this Agreement.
To accept this Agreement, please date and sign this letter and return it to
me. (An extra copy is enclosed for your file.) Once you do so, you will
still have an additional seven (7) days in which to revoke your acceptance.
To revoke, you must send me a written statement of revocation. If you do not
revoke, the eighth day after the date of your acceptance will be the "final
effective date" of the Agreement. By revoking your acceptance of this
Agreement, you will relinquish any and all rights conferred upon you by the
terms of this Agreement.
Mike, I am pleased that we are able to address and agree on the terms of your
departure from CV Therapeutics. CV Therapeutics and I wish you every success
in your future endeavors.
Sincerely,
/s/ Louis G. Lange
- ----------------------------------
Dr. Louis G. Lange, MD, PhD
By signing this letter, I, Michael M. Wick, acknowledge that I have had the
opportunity to review this agreement; and that I understand the terms of this
Agreement and that I voluntarily agree to them.
/s/ Michael M. Wick 5 May 97
- ---------------------------------- ---------------------------
Michael M. Wick, MD, PhD Date
3
<PAGE>
Exhibit A
<TABLE>
<CAPTION>
STOCK OPTION SUMMARY
MIKE WICK
------------------------------------------------------------------------
Shares Shares Vesting
Grant Number of Exercise Vesting Vested as ------------------------------------------------------------------------
Date Shares Price Summary of 6/1/1997 7/1/97 8/1/97 9/1/97 10/1/97 11/1/97 12/1/97 1/1/98 2/1/98 3/1/98 TOTAL
- ------- --------- -------- -------------- ----------- ------ ------ ------ ------- ------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/7/95 32,500 $2.50 7,800 vesting 15,600 650 650 650 650 650 650 650 650 650 21,450
May 1, 1996;
650 each month
thereafter
- ---------------------------------------------------------------------------------------------------------------------------------
9/10/96 27,500 $2.50 5,500 vesting 5,500 458 458 458 458 458 7,790
September 10,
1997; 458
each month
thereafter
----------------------------------------------------------------------------------------------------
60,000 Cumulative 15,600 16,250 16,900 17,550 23,700 24,808 25,916 27,024 28,132 29,240 29,240
total
----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT B
CV THERAPEUTICS, INC.
EMPLOYMENT, CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT
As a condition of my employment with CV Therapeutics, Inc., its subsidiaries,
affiliates, successors or assigns (together the "Company"), and in consideration
of my employment with the Company and my receipt of the compensation now and
hereafter paid to me by Company, I agree to the following:
1. At-Will Employment. I understand and acknowledge that my employment
with the Company is for an unspecified duration and constitutes "at-will"
employment. I acknowledge that this employment relationship may be terminated at
any time, with or without good cause or for any or no cause, at the option
either of the Company or myself, with or without notice.
2. Confidential Information.
(a) Company Information. I agree at all times during the term of my
employment and thereafter, to hold in strictest confidence, and not to use,
except for the benefit of the Company, or to disclose to any person, firm or
corporation without written authorization of the Board of Directors of the
Company, any Confidential Information of the Company. I understand that
"Confidential Information" means any Company proprietary information, technical
data, trade secrets or know-how, including, but not limited to, research,
product plans, products, services, customer lists and customers (including, but
not limited to, customers of the Company on whom I called or with whom I became
acquainted during my term of my employment), markets, software, developments,
inventions, processes, formulas, proprietary materials and biologics,
technology, designs, drawings, engineering, hardware configuration information,
marketing, finances or other business information disclosed to me by the Company
either directly or indirectly in writing, orally or by drawings or observation
of materials, parts, equipment, or research experiments. I further understand
that Confidential Information does not include any of the foregoing items which
has become publicly known and made generally available through no wrongful act
of mine or of others who were under confidentiality obligations as to the item
or items involved.
(b) Former Employer Information. I agree that I will not, during my
employment with the Company, improperly use or disclose any proprietary
information or trade secrets of any former or concurrent employer or other
person or entity and that I will not bring onto the premises of the Company any
unpublished document or proprietary information belonging to any such employer,
person or entity unless consented to in writing by such employer, person or
entity.
1.
<PAGE>
(c) Third Party Information. I recognize that the Company has
received and in the future will receive from third parties their confidential or
proprietary 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. I agree to hold all such confidential or proprietary information in
the strictest confidence and not to disclose it to any person, firm or
corporation or to use it except as necessary in carrying out my work for the
Company consistent with the Company's agreement with such third party.
3. Inventions.
(a) Inventions Retained and Licensed. I have attached hereto, as
Exhibit A, a list describing all inventions, original works of authorship,
developments, improvements, and trade secrets which were made by me prior to my
employment with the Company (collectively referred to as "Prior Inventions"),
which belong to me, which relate to the Company's proposed business, products or
research and development, and which are not assigned to the Company hereunder;
or, if no such list is attached, I represent that there are no such Prior
Inventions. If in the course of my employment with the Company, I incorporate
into a Company product, process or machine a Prior Invention owned by me or in
which I have an interest, the Company is hereby granted and shall have a
nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make,
have made, modify, use and sell such Prior Invention as part of or in connection
with such product, process or machine.
(b) Assignment of Inventions. I agree that I will promptly make full
written disclosure to the Company, will hold in trust for the sole right and
benefit of the Company, and hereby assign to the Company, or its designee, all
my right, title, and interest in and to any and all inventions, original works
of authorship, developments, concepts, improvements or trade secrets, whether or
not patentable or registrable under copyright or similar laws, which I may
solely or jointly conceive or develop or reduce to practice, or cause to be
conceived or developed or reduced to practice, during the period of time I am in
the employ of the Company (collectively referred to as "Inventions"), except as
provided in Section 3 (f) below. I further acknowledge that all original works
of authorship which are made by me (solely or jointly with others) within the
scope of and during the period of my employment with the Company and which are
protectible by copyright are "works made for hire," as that term is defined in
the United States Copyright Act.
(c) Inventions Assigned to the United States. I agree to assign to
the United States government all my right, title, and interest in and to any and
all Inventions whenever such full title is required to be in the United States
by a contract between the Company and the United States or any of its agencies.
(d) Maintenance of Records. I agree to keep and maintain adequate and
current written records of all Inventions made by me (solely or jointly with
others) during the term of my employment with the Company. The records will be
in the form of notes, sketches, drawings, and any other format that may be
specified by the Company. The records will be available to and remain the sole
property of the Company at all times.
2.
<PAGE>
(e) Patent and Copyright Registrations. I agree to assist the
Company, or its designee, at the Company's expense, in every proper way to
secure the Company's rights in the Inventions and any copyrights, patents, mask
work rights or other intellectual property rights relating thereto in any and
all countries, including the disclosure to the Company of all pertinent
information and data with respect thereto, the execution of all applications,
specifications, oaths, assignments and all other instruments which the Company
shall deem necessary in order to apply for and obtain such rights and in order
to assign and convey to the Company, its successors, assigns and nominees the
sole and exclusive rights, title and interest in and to such Inventions, and any
copyrights, patents, mask work rights or other intellectual property rights
relating thereto. I further agree that my obligation to execute or cause to be
executed, when it is in my power to do so, any such instrument or papers shall
continue after the termination of this Agreement. If the Company is unable
because of my mental or physical incapacity or for any other reason to secure my
signature to apply for or to pursue any application for any United States or
foreign patents or copyright registrations covering Inventions or original works
of authorship assigned to the Company as above, then I hereby irrevocably
designate and appoint the Company and its duly authorized officers and agents as
my agent and attorney in fact, to act for and in my behalf and stead to execute
and file any such applications and to do all other lawfully permitted acts to
further the prosecution and issuance of letters patent or copyright
registrations thereon with the same legal force and effect as if executed by me.
(f) Exception to Assignments. I understand that the provisions of
this Agreement requiring assignment of Inventions to the Company do not apply to
any invention which qualifies fully under the provisions of California Labor
Code section 2870 (attached hereto as Exhibit B). I will advise the Company
promptly in writing of any inventions that I believe meet the criteria in
California Labor Code Section 2870 and not otherwise disclosed on Exhibit A.
4. Conflicting Employment. I agree that, during the term of my employment
with the Company, I will not engage in any other employment, occupation,
consulting or other business activity directly related to the business in which
the Company is now involved or becomes involved during the term of my
employment, nor will I engage in any other conduct or activities that conflict
with my obligations to the Company or is not in the best interests of the
Company.
5. Returning Company Documents. I agree that, at the time of leaving the
employ of the Company, I will deliver to the Company (and will not keep in my
possession, recreate or deliver to anyone else) any and all devices, records,
data, notes, reports, proposals, lists, correspondence, specifications,
drawings, blueprints, sketches, materials, equipment, other documents or
property, or reproductions of any aforementioned items developed by me pursuant
to my employment with the Company or otherwise belonging to the Company, its
successors or assigns. In the event of the termination of my employment, I agree
to sign and deliver the "Termination Certification" attached hereto as Exhibit
C.
3.
<PAGE>
6. Notification of New Employer. In the event that I leave the employ of
the Company, I hereby grant consent to notification by the Company to my new
employer about my rights and obligations under this Agreement.
7. Solicitation of Employees and Customer. I acknowledge and agree that
(i) the identity and particular skills, experience and comparison levels of
employees of the Company, and (ii) the identity, appropriate knowledge of
personnel, product requirements, and price sensitivity of customers of the
Company, is not publicly available information and constitutes valuable trade
secrets of the Company. Accordingly, I agree that for a period of (12) months
immediately following the termination of my relationship with the Company for
any reason, whether with or without cause, I shall not either directly or
indirectly without the consent of the Company:
(a) solicit, induce, recruit or encourage any of the Company's
employees to leave their employment, or take away such employees, or attempt to
solicit, induce, recruit, encourage or take away employees of the Company,
either for myself or for any other person or entity; or
(b) solicit or accept the business of any customer of the Company,
which business is competitive with any significant part of the business
conducted by the Company or any subsidiary or affiliate thereof at the time of
the termination of my employment or as contemplated to be conducted by the
Company at such time.
8. Conflict of Interest Guidelines. I agree to diligently adhere to the
Conflict of Interest Guidelines attached as Exhibit D hereto.
9. Representations. I agree to execute any proper oath or verify any
proper document required to carry out the terms of this Agreement. I represent
that my performance of all the terms of this Agreement will not breach any
agreement to keep in confidence proprietary 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 oral or written agreement in
conflict herewith.
10. Arbitration and Equitable Relief.
(a) Arbitration. Except as provided in Section 10(b) below, I agree
that any dispute or controversy arising out of or relating to any
interpretation, construction, performance or breach of this Agreement, shall be
settled by arbitration to be held in Santa Clara County, California, in
accordance with the rules then in effect of the American Arbitration
Association. The arbitrator may grant injunctions or other relief in such
dispute or controversy. The decision of the arbitrator shall be final,
conclusive and binding on the parties to the arbitration. Judgment may be
entered on the arbitrator's decision in any court having jurisdiction. The
Company and I shall each pay one-half of the costs and expenses of such
arbitration, and each of us shall separately pay our counsel fees and expenses.
4.
<PAGE>
(b) Equitable Remedies. I agree that it would be impossible or
inadequate to measure and calculate the Company's damages from any breach of the
covenants set forth in Sections 2, 3, 5 and 7 herein. Accordingly, I agree that
if I breach any of such Sections, the Company will have available, in addition
to any other right or remedy available, the right to obtain an injunction from a
court of competent jurisdiction restraining such breach or threatened breach and
to specific performance of any such provision of this Agreement. I further agree
that no bond or other security shall be required in obtaining such equitable
relief and I hereby consent to the issuance of such injunction and to the
ordering of specific performance.
11. General Provisions.
(a) Governing Law; Consent to Personal Jurisdiction. This Agreement
will be governed by the laws of the State of California. I hereby expressly
consent to the personal jurisdiction of the state and federal courts located in
California for any lawsuit filed there against me by the Company arising from or
relating to this Agreement.
(b) Entire Agreement. This Agreement sets forth the entire agreement
and understanding between the Company and me relating to the subject matter
herein 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 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.
(c) Severability. If one or more of the provisions in this Agreement
are deemed void by law, then the remaining provisions will continue in full
force and effect.
(d) 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 assigns.
Date: May
--------------
/s/ Michael Wick
-------------------------------------------
Signature
Michael Wick
-------------------------------------------
Name of Employee (typed or printed)
CV Therapeutics, Inc.
By /s/ Louis Lange
----------------------------
Title CEO
--------------------------
Date 5/8/95
--------------------------
5.
<PAGE>
6.
<PAGE>
EXHIBIT A
LIST OF PRIOR INVENTIONS
AND ORIGINAL WORKS OF AUTHORSHIP
Title Date Identifying Number
or Brief Description
- ------------------------- ----------------------- ----------------------
Catechols As 1985-1990 per CV.
Metabolic modulator
Free Rad. scavngrs
______ No inventions or improvements
______ Additional Sheets Attached
Signature of Employee: /s/ Michael Wick
----------------------------
Print Name of Employee: Michael Wick
---------------------------
Date: 18 May 95
-------------------------
7.
<PAGE>
EXHIBIT B
CALIFORNIA LABOR CODE SECTION 2870
EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS
"(a) 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 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.
(b) To the extent a provision in the employment agreement purports to require
an employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable."
8.
<PAGE>
EXHIBIT C
CV THERAPEUTICS, INC.
TERMINATION CERTIFICATION
This is to certify that I do not have in my possession, nor have I failed to
return, any devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, materials,
equipment, other documents or property, or reproductions of any aforementioned
items belonging to CV Therapeutics, Inc., its subsidiaries, affiliates,
successors or assigns, except where authorized in writing.
I further certify that I have complied with all the terms of the CV Therapeutics
Employment, Confidential Information and Invention Assignment Agreement signed
by me, including the reporting of any inventions and original works of
authorship (as defined therein)), conceived or made by me (solely or jointly
with others) covered by that agreement.
I further agree that, in compliance with the Employment, Confidential
Information and Invention Assignment Agreement, I will preserve as confidential
all trade secrets, confidential knowledge, data or other proprietary information
relating to products, processes, know-how, designs, formulas, developmental or
experimental work, computer programs, data bases, other original works of
authorship, customer lists, business plans, financial information or other
subject matter pertaining to any business of CV Therapeutics or any of its
employees, clients, consultants, or licensees.
I further agree that in compliance with the Employment, Confidential Information
and Invention Assignment Agreement, for twelve (12) months from this date: (a) I
will not hire any employees of the Company and will not solicit, induce, recruit
or encourage any of the Company's employees to leave their employment; (b) I
will not solicit or accept the business of any customer of the Company, which
business is competitive with any significant part of the business conducted by
the Company or any subsidiary or affiliate thereof at the time of termination of
my employment or as contemplated to be conducted by the Company at such time.
Date: 5/6/97
-------------------------
/s/ Mike Wick
-------------------------------------------
(Employee's Signature)
Mike Wick
--------------------------------------------
(Type/Print Employee's Name)
9.
<PAGE>
EXHIBIT D
CONFLICT OF INTEREST GUIDELINES
It is the policy of CV Therapeutics to conduct its affairs in strict compliance
with the letter and spirit of the law and to adhere to the highest principles of
business ethics. Accordingly, all officers, employees and independent
contractors must avoid activities which are in conflict, or give the appearance
of being in conflict, with these principles and with the interests of the
company. The following are potentially compromising situations that must be
avoided. Any exceptions must be reported to the Chief Executive Officer and
written approval for continuation must be obtained.
1. Revealing confidential information to outsiders or misusing confidential
information. Unauthorized divulging of information is a violation of this
policy whether or not for personal gain and whether or not harm to the
company is intended. (The Employment, Confidential Information and
Invention Assignment Agreement elaborates on this principle and is a
binding agreement.)
2. Accepting or offering substantial gifts, excessive entertainment, favors or
payments which may be deemed to constitute undue influence or otherwise be
improper or embarrassing to CV Therapeutics.
3. Participating in civic or professional organizations that might involve
divulging confidential information of the company.
4. Initiating or approving personnel actions affecting reward or punishment of
employees or applicants where there is a family relationship or is or
appears to be a personal or social involvement.
5. Initiating or approving any form of personal or social harassment of
employees.
6. Investing or holding outside directorship in suppliers, customers, or
competing companies, including financial speculations, where such
investment or directorship might influence in any manner a decision or
course of action of the company.
7. Borrowing from or lending to employees, customers or suppliers.
8. Acquiring real estate of interest to CV Therapeutics.
9. Improperly using or disclosing to the company any proprietary information
or trade secrets of any former or concurrent employer or other person or
entity with whom obligations of confidentiality exist.
10.
<PAGE>
10. Unlawfully discussing prices, costs, customers, sales or markets with
competing companies or their employees.
11. Making any unlawful agreement with distributors with respect to prices.
12. Improperly using or authorizing the use of any inventions that are the
subject of patent claims of any other person or entity.
13. Engaging in any conduct that is not in CV Therapeutics' best interest.
Each officer, employee and independent contractor must take every necessary
action to ensure compliance with these guidelines and to bring problem areas to
the attention of higher management for review. Violations of this conflict of
interest policy may result in discharge without warning.
11.
<PAGE>
Exhibit 10.47
CV THERAPEUTICS
INTEROFFICE MEMORANDUM
DATE: SEPTEMBER 15, 1997
TO: Louis Lange
FROM: Kathy Stafford
SUBJECT: Transition Agreement
- -------------------------------------------------------------------------------
As we have discussed over the last few weeks, I would like to formalize my
exit as CFO at CV Therapeutics. I have very much enjoyed my time with the
company and am excited by the prospects for CVT. However, for personal
reasons - not the least of which is a 100+ mile per day commute and a desire
to spend more time with my children - I need to return to project consulting
for CVT on a more limited basis.
I have outlined below our agreement regarding my transition:
1. RECRUITING A NEW CFO
CVT will initiate a search immediately for a new CFO, and I will
cooperate in any way required to recruit a suitable replacement
2. TIME COMMITMENT
I will remain as CFO until the earlier of 12/31/97, or when a
replacement is found, working 24 hours per week. I will become a
consultant to CVT on 1/1/98. If a new CFO has not been secured by then,
I will commit to 20 hours per week until March 31, 1998. The earlier of
March 31, 1998 or when a CFO replacement is named, I will convert to a
project consultant and commit to four (4) days per month.
3. COMPENSATION
CASH
- From September 15 to December 31, my salary will be set at $125,000 per
annum. If we close any kind of financing before March 31, 1998, I will
receive a one time payment of $20,000. In addition, I will be eligible
for full bonus consideration for my work in 1997, not prorated for part
time work. My car and cell phone allowance of $1,000 per month will
remain in effect until 12/31/97.
<PAGE>
3. COMPENSATION (CON'T)
- From 1/1/98 until 3/31/98, or until a CFO replacement has been named,
whichever comes first, I will be compensated at the rate of $135 per
hour, plus car and cell phone expenses. I will not be eligible for CVT
benefits, except that which is available through COBRA.
- Thereafter, I will receive $4,167 per month for twelve months. Any cash
compensation after the twelve months will be mutually agreed by CVT and
me.
STOCK:
- Under all scenarios above, my stock will continue to vest on its current
schedule. I am aware that when my status converts from employee to
consultant, any unvested stock options will convert to NQ status.
OTHER:
I will keep the title of CFO until 12/31/97. From 1/1/98 until 3/31/98
(or earlier if a CFO replacement has been named), I will use the title
of Acting CFO. Thereafter I will carry no title.
Please sign Below to indicate your agreement with the summary above.
/s/ Louis Lange /s/ Kathy Stafford
------------------------------ ------------------------------
Louis Lange Kathy Stafford
<PAGE>
FIRST AMENDMENT TO SECURITY AGREEMENT
THIS FIRST AMENDMENT TO SECURITY AGREEMENT ("Amendment") is entered into
as of March 7th, 1997, by and among Hambrecht & Quist Guaranty Finance, LLC
("H&QGF"), a California limited liability company, and CV Therapeutics, Inc.
a Delaware corporation ("CVT").
RECITALS
A. H&QGF and CVT are parties to that certain Security Agreement, dated
as of September 27, 1996 (the "H&QGF Security Agreement") and certain Related
Documents (as defined in the H&QGF Security Agreement).
B. CVT intends to enter into certain transactions (the "Collaboration")
contemplated by (i) a Research Collaboration and License Agreement
substantially in the form attached hereto as Exhibit A; (ii) a Loan Agreement
and Promissory Note substantially in the forms attached hereto as Exhibits B
and C respectively; (iii) a Common Stock Purchase Agreement substantially in
the form attached hereto as Exhibit D; and (iv) any related documents
provided for by any of the foregoing ((i) through (ii), collectively, the
"Collaboration Agreement").
NOW THEREFORE, in consideration of the foregoing recitals and other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree to
amend the H&QGF Security Agreement only as follows:
THEREFORE, the Security Agreement is amended only as follows:
1. The definition of "Collateral" in the Security Agreement is hereby
amended by adding the following language at the end of Subsection (iv):
Notwithstanding any provision to the contrary herein, or in any Related
Document, the terms "Collateral" and "IP Collateral" shall not include any of
the foregoing which comprises, claims, contains, relates to, or is the
molecule defined as CVT-124 in that certain IND filed on September 20, 1995
(as further described in U.S. Patent Application Serial No.08/330,640 filed
on October 28, 1994), or any other Adenosine A1 Antagonist, or the
manufacture or use of such molecules, or is derived therefrom.
2. Except as specifically amended hereby, the Security Agreement shall
remain in full force and effect.
1.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
CVT CV THERAPEUTICS, INC.,
a Delaware corporation
By: /s/ Louis Lange
----------------------------
Printed Name: L. Lange
------------------
Title: CEO
-------------------------
H&QGF HAMBRECHT & QUIST GUARANTY FINANCE, LLC,
a California limited liability company
By: /s/ Andrew W. Kahn
----------------------------
Printed Name: Andrew W. Kahn
------------------
Title: Manager
-------------------------
2.
<PAGE>
FIRST AMENDMENT TO SECURITY AGREEMENT
THIS FIRST AMENDMENT TO SECURITY AGREEMENT ("Amendment") is entered into
as of March 7th, 1997, by and among Hambrecht & Quist Transition Capital, LLC
("H&QTC"), a California limited liability company, and CV Therapeutics, Inc.
a Delaware corporation ("CVT").
RECITALS
A. H&QTC and CVT are parties to that certain Security Agreement, dated
as of September 27, 1996 (the "H&QTC Security Agreement") and certain Related
Documents (as defined in the H&QTC Security Agreement).
B. CVT intends to enter into certain transactions (the "Collaboration")
contemplated by (i) a Research Collaboration and License Agreement
substantially in the form attached hereto as Exhibit A; (ii) a Loan Agreement
and Promissory Note substantially in the forms attached hereto as Exhibits B
and C respectively; (iii) a Common Stock Purchase Agreement substantially in
the form attached hereto as Exhibit D; and (iv) any related documents
provided for by any of the foregoing ((i) through (ii), collectively, the
"Collaboration Agreement").
NOW THEREFORE, in consideration of the foregoing recitals and other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree to
amend the H&QTC Security Agreement only as follows:
THEREFORE, the Security Agreement is amended only as follows:
1. The definition of "Collateral" in the Security Agreement is hereby
amended by adding the following language at the end of Subsection (iv):
Notwithstanding any provision to the contrary herein, or in any Related
Document, the terms "Collateral" and "IP Collateral" shall not include any of
the foregoing which comprises, claims, contains, relates to, or is the
molecule defined as CVT-124 in that certain IND filed on September 20, 1995
(as further described in U.S. Patent Application Serial No.08/330,640 filed
on October 28, 1994), or any other Adenosine A1 Antagonist, or the
manufacture or use of such molecules, or is derived therefrom.
2. Except as specifically amended hereby, the Security Agreement shall
remain in full force and effect.
1.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
CVT CV THERAPEUTICS, INC.,
a Delaware corporation
By: /s/ Louis Lange
-----------------------------
Printed Name: L. Lange
-------------------
Title: CEO
--------------------------
H&QTC HAMBRECHT & QUIST TRANSITION CAPITAL, LLC,
a California limited liability company
By: /s/ Andrew W. Kahn
-----------------------------
Printed Name: Andrew W. Kahn
-------------------
Title: Chief Financial Officer
--------------------------
2.
<PAGE>
FIRST AMENDMENT TO BUSINESS LOAN AGREEMENT
THIS FIRST AMENDMENT TO BUSINESS LOAN AGREEMENT ("Amendment") is entered
into as of March 7th, 1997, by and among Hambrecht & Quist Transition
Capital, LLC ("H&QTC"), a California limited liability company, and CV
Therapeutics, Inc., a Delaware corporation ("CVT").
RECITALS
A. H&QTC and CVT are parties to that certain Business Loan Agreement,
dated as of September 27, 1996 (the "H&QTC Loan Agreement") and certain
Related Documents (as defined in the H&QTC Loan Agreement).
B. CVT intends to enter into certain transactions (the "Collaboration")
contemplated by (i) a Research Collaboration and License Agreement
substantially in the form attached hereto as Exhibit A; (ii) a Loan Agreement
and Promissory Note substantially in the form attached hereto as Exhibits B
and C, respectively; (iii) a Common Stock Purchase Agreement substantially in
the form attached hereto as exhibit D; and (iv) any related documents
provided for by any of the foregoing ((i) through (iv), collectively, the
"Collaboration Agreement").
NOW, THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereby agree to
amend the H&QTC Loan Agreement only as follows:
THEREFORE, the Business Loan Agreement is amended only as follows:
1. The following definition will be added to Section 1 of the Business Loan
Agreement:
"PERMITTED UNSECURED INDEBTEDNESS" shall mean and include all
Indebtedness from Borrower to Biotech Manufacturing Ltd., a wholly owned
subsidiary of Biogen, Inc. under that certain Loan Agreement dated as of
March 10, 1997.
2. The definition of Related Documents is struck in its entirety, and the
following definition substituted therefor:
"RELATED DOCUMENTS" means and includes without limitation the
PROMISSORY NOTE, the Security Agreement, all other promissory
notes, credit agreements, loan agreements, guaranties, security
agreements, mortgages, deeds of trust, and all other instruments
and documents, whether now or hereafter existing, executed in
connection with any of the foregoing and agreements between Debtor
and Hambrecht & Quist Guaranty Finance, LLC ("H&QGF") including
without limitation the Master Lease Agreement, Equipment
Schedules, and the Security Agreement.
3. Section 5.1 is struck in its entirety, and the following is substituted
therefor:
<PAGE>
Section 5.1 INDEBTEDNESS AND LIENS
(a) incur, assume or permit to exist any Indebtedness other than
(i) Permitted Senior Indebtedness, (ii) accounts payable to trade
creditors for goods and services and current operating liabilities (not
the result of the borrowing of money) incurred in the ordinary course
of Borrower's business in accordance with customary terms and that are
not delinquent, and (iii) Indebtedness of Borrower secured by liens
permitted pursuant to clause (b)(ii) of this Section 5.1; (iv)
Indebtedness existing on the date hereof and disclosed in Exhibit A
hereto, (v) contingent obligations of Borrower consisting of guarantees
(and other credit support) of the obligations of vendors and suppliers
of Borrower in respect of transactions entered into in the ordinary
course of business, (vi) other Indebtedness of Borrower, provided that
the total amount in the aggregate outstanding INDEBTEDNESS at any time
described in (iv), (v), and (vi) above not to exceed $250,000; (vii)
Permitted Unsecured Indebtedness, and (viii) extensions, renewals,
refundings, refinancings, modifications, amendments and restatements of
any of the items of Indebtedness described in (i) through (vii) above,
PROVIDED that the principal amount thereof is not increased or the
terms thereof are not modified to impose more burdensome terms upon
Borrower, (b) except as otherwise permitted herein, or in any Related
Document, create, incur, or assume any mortgage, pledge encumbrance,
lien or charge of any kind (including the charge upon property at any
time purchased or acquired under conditional sale or other property at
any time purchased or acquired under conditional sale or other title
retention agreement) upon any asset now owned or hereafter acquired,
except for (i) SECURITY INTEREST that are granted in favor of the
SENIOR LENDER as security for the PERMITTED SENIOR INDEBTEDNESS, (ii)
other than as permitted pursuant to clause (iii) hereof, SECURITY
INTERESTS that are to secure Borrower's Indebtedness incurred solely
for the purpose of financing the acquisition or lease of any specific
items of equipment and granted in favor of a purchase money lender or
equipment lessor with respect to such Indebtedness, but only to the
extent that such lien is confined solely to the equipment so acquired
and such INDEBTEDNESS is limited to the purchase price or lease
obligations the respect to such equipment, and (iii) easements,
reservations, rights of way, restrictions, minor defects or
irregularities in title and other similar liens, (iv) liens in favor of
customers and revenue authorities arising as a matter of law to secure
payments of customs duties in connection with the importation of goods;
(v) liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of setoff or similar
rights and remedies as to deposit accounts or other funds maintained
with a creditor depository institution; (vi) liens existing on the date
hereof and disclosed on Exhibit A hereto; (vii) liens not otherwise
permitted, which liens do not in the aggregate exceed $250,000 at any
time (ix) liens incurred in connection with the extension, renewal or
refinancing of the indebtedness secured by liens of the type described
in clauses (i) through (ii) above, provided that any extension, renewal
or replacement lien shall be limited to the property encumbered by the
existing lien and the principal amount of the indebtedness being
extended, renewed or refinanced does not increase.
4. Except as specifically amended hereby, the Business Loan Agreement shall
remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
CVT: CV Therapeutics, Inc.
a Delaware corporation
By: /s/ Louis Lange
------------------------------
Printed Name: L. Lange
--------------------
Title: CEO
---------------------------
H&QTC: Hambrecht & Quist Transition Capital, LLC
a California limited liability company
By: /s/ Andrew W. Kahn
------------------------------
Printed Name: Andrew W. Kahn
--------------------
Title: Chief Executive Officer
---------------------------
<PAGE>
FIRST AMENDMENT TO MASTER LEASE AGREEMENT
THIS FIRST AMENDMENT TO MASTER LEASE AGREEMENT ("Amendment") is entered
into as of March 7th, 1997, by and among Hambrecht & Quist Guaranty Finance,
LLC ("H&QGF"), a California limited liability company, and CV Therapeutics,
Inc. a Delaware corporation ("CVT").
RECITALS
A. H&QGF and CVT are parties to that certain Master Lease Agreement,
dated as of September 27, 1996 (the "H&QGF Lease Agreement") and certain
Related Documents (as defined in the H&QGF Lease Agreement).
B. H&QGF and CVT were parties to that certain Business Loan Agreement,
dated as of September 27, 1996 (the "H&QGF Loan Agreement") and certain
Related Documents (as defined in the H&QGF Loan Agreement).
C. H&QGF and CVT were parties to that certain Financing Agreement, dated
as September 27, 1996 (the "Financing Agreement).
D. On February 17, 1997, CVT executed a certain Formal Acceptance of
Lease Option and Warranty Bill of Sale to elect the Lease Option as defined
in the H&QGF Financing Agreement.
E. The H&QGF Loan Agreement and the Financing Agreement have been
terminated and their provisions superseded by the provisions of that certain
Master Lease Agreement and certain Related Documents, dated as of September
27, 1996 (the "Lease Agreement"), to which H&QGF is a party.
F. CVT intends to enter into certain transactions (the "Collaboration")
contemplated by (i) a Research Collaboration and License Agreement
substantially in the form attached hereto as Exhibit A; (ii) a Loan Agreement
and Promissory Note substantially in the form attached hereto as Exhibits B
and C, respectively; (iii) a Common Stock Purchase Agreement substantially in
the form attached hereto as Exhibit D; and (iv) any related documents
provided for by any of the foregoing ((i) through (iv), collectively, the
"Collaboration Agreement").
NOW, THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereby agree to
amend the Master Lease Agreement only as follows;
1. The definition of Related Documents is struck in its entirety, and the
following definition is substituted therefor:
For the purposes of this Master Lease Agreement, the term Related
Documents means and includes without limitation this Master Lease
Agreement and the Equipment Schedule, and (a) agreements between Lessor
and Lessee all dated as of September 27, 1996 including but not limited
to: the Security Agreement between Lessor, as Secured Party, and
Lessee, as Debtor, and excluding the H&QGF Loan Agreement and the
Financing Agreement; and (b) agreements between Hambrecht & Quist
Transition Capital, LLC ("H&QTC") and Lessee all dated as of September
<PAGE>
27, 1996 including but not limited to: the Business Loan Agreement
between H&QTC as Secured Party and Lessee, as Debtor, the Security
Agreement between H&QTC, as Secured Party, and Lessee, as Debtor.
2. Except as specifically amended hereby, the Master Lease Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
CVT: CV Therapeutics, Inc.
a Delaware corporation
By: /s/ Louis Lange
------------------------------
Printed Name: L. Lange
--------------------
Title: CEO
---------------------------
H&QGF: Hambrecht & Quist Guaranty Finance, LLC
a California limited liability company
By: /s/ Andrew W. Kahn
------------------------------
Printed Name: Andrew W. Kahn
--------------------
Title: Manager
---------------------------
<PAGE>
SECOND AMENDMENT TO SECURITY AGREEMENT
THIS SECOND AMENDMENT TO SECURITY AGREEMENT ("Amendment") is entered
into as of May 19, 1997, by and among Hambrecht & Quist Guaranty Finance, LLC
("H&QGF"), a California limited liability company, and CV Therapeutics, Inc.
a Delaware corporation ("CVT").
RECITALS
A. H&QGF and CVT are parties to that certain Security Agreement, dated
as of September 27, 1996, amended by that certain First Amendment to Security
Agreement dated March 7, 1997 (the "H&QGF Security Agreement") and certain
Related Documents (as defined in the H&QGF Security Agreement).
NOW THEREFORE, in consideration of the foregoing recitals and other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree to
amend the H&QGF Security Agreement only as follows:
THEREFORE, the Security Agreement is amended only as follows:
1. The last sentence at the end of Subsection (iv) in the definition of
"Collateral" in the Security Agreement that currently reads as follows:
Notwithstanding any provision to the contrary herein, or in any Related
Document, the terms "Collateral" and "IP Collateral" shall not include
any of the foregoing which comprises, claims, contains, relates to, or
is the molecule defined as CVT-124 in that certain IND filed on
September 20, 1995 (as further described in U.S. Patent Application
Serial No. 08/330,640 filed on October 28, 1994), or any other
Adenosine A1 Antagonist, or the manufacture or use of such molecules,
or is derived therefrom.
Shall be amended so that it reads as follows:
Notwithstanding any provision to the contrary herein, or in any Related
Document, the terms "Collateral" and "IP Collateral" shall not include
any of the foregoing which comprises, claims, contains, relates to, or
is the molecule defined as CVT-124 in that certain IND filed on
September 20, 1995 (as further described in U.S. Patent Application
Serial No. 08/330,640 filed on October 28, 1994), or any other
Adenosine A1 Antagonist, or the manufacture or use of such molecules,
or is derived therefrom (the "CVT-124"), except that the terms
"Collateral" and "IP Collateral" shall refer without limitation to the
right to payments under license agreements, joint venture agreements
and other collaborative agreements relating to CVT-124, including the
Collaboration Agreement and any and all other contracts with relate to
CVT-124, including those rights to payment thereunder which are
included as Collateral under clause (v) below.
2. Except as specifically amended hereby, the Security Agreement shall
remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
CVT CV Therapeutics, Inc.,
a Delaware corporation
By: /s/ K A Stafford
--------------------------------
Printed Name: K A Stafford
----------------------
Title: CFO
-----------------------------
H&QGF Hambrecht & Quist Guaranty Finance, LLC,
a California limited liability company
By: /s/ Donald M. Campbell
--------------------------------
Printed Name: Donald M. Campbell
----------------------
Title: Chief Executive Officer
-----------------------------
<PAGE>
SECOND AMENDMENT TO SECURITY AGREEMENT
THIS SECOND AMENDMENT TO SECURITY AGREEMENT ("Amendment") is entered
into as of May 19, 1997, by and among Hambrecht & Quist Transition Capital,
LLC ("H&QTC"), a California limited liability company, and CV Therapeutics,
Inc. a Delaware corporation ("CVT").
RECITALS
A. H&QTC and CVT are parties to that certain Security Agreement, dated
as of September 27, 1996, amended by that certain First Amendment to Security
Agreement dated March 7, 1997 (the "H&QTC Security Agreement") and certain
Related Documents (as defined in the H&QTC Security Agreement).
NOW THEREFORE, in consideration of the foregoing recitals and other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree to
amend the H&QTC Security Agreement only as follows:
THEREFORE, the Security Agreement is amended only as follows:
1. The last sentence at the end of Subsection (iv) in the definition of
"Collateral" in the Security Agreement that currently reads as follows:
Notwithstanding any provision to the contrary herein, or in any Related
Document, the terms "Collateral" and "IP Collateral" shall not include
any of the foregoing which comprises, claims, contains, relates to, or
is the molecule defined as CVT-124 in that certain IND filed on
September 20, 1995 (as further described in U.S. Patent Application
Serial No. 08/330,640 filed on October 28, 1994), or any other
Adenosine A1 Antagonist, or the manufacture or use of such molecules,
or is derived therefrom.
Shall be amended so that it reads as follows:
Notwithstanding any provision to the contrary herein, or in any Related
Document, the terms "Collateral" and "IP Collateral" shall not include
any of the foregoing which comprises, claims, contains, relates to, or
is the molecule defined as CVT-124 in that certain IND filed on
September 20, 1995 (as further described in U.S. Patent Application
Serial No. 08/330,640 filed on October 28, 1994), or any other
Adenosine A1 Antagonist, or the manufacture or use of such molecules,
or is derived therefrom (the "CVT-124"), except that the terms
"Collateral" and "IP Collateral" shall refer without limitation to the
right to payments under license agreements, joint venture agreements
and other collaborative agreements relating to CVT-124, including the
Collaboration Agreement and any and all other contracts with relate to
CVT-124, including those rights to payment thereunder which are
included as Collateral under clause (v) below.
2. Except as specifically amended hereby, the Security Agreement shall
remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
CVT CV Therapeutics, Inc.,
a Delaware corporation
By: /s/ K.A. Stafford
---------------------------------
Printed Name: K.A. Stafford
-----------------------
Title: CFO
------------------------------
H&QTC Hambrecht & Quist Transition Capital, LLC,
a California limited liability company
By: /s/ Andrew W. Kahn
---------------------------------
Printed Name: Andrew W. Kahn
-----------------------
Title: Chief Executive Officer
------------------------------
<PAGE>
Exhibit 11.1
CV THERAPEUTICS, INC.
Statement of Computation of Net Loss Per Share
(In thousands, except net loss per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net loss $ (2,673) $ (2,971) $ (7,798) $ (8,367)
Historical:
Weighted average common stock outstanding 7,010 406 6,755 386
Shares related to Staff Accounting Bulletin Nos. 55, 64 and 83:
Stock options - 340 - 340
Warrants - 965 - 965
---------- ---------- ---------- ----------
Total shares used in calculating net loss per share 7,010 1,711 6,755 1,691
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net loss per share $ (0.38) $ (1.74) $ (1.15) $ (4.95)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Pro forma:
Shares used in calculating net loss per share (per above) 1,711 1,691
Preferred stock if-converted 3,238 3,017
---------- ----------
Total shares used in calculating pro forma net loss per share 4,949 4,708
---------- ----------
Pro forma net loss per share $ (0.60) $ (1.78)
---------- ----------
---------- ----------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1997 AND THE
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTH PERIOD
ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 19,012
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 19,865
<PP&E> 6,081
<DEPRECIATION> (3,604)
<TOTAL-ASSETS> 32,979
<CURRENT-LIABILITIES> 4,965
<BONDS> 0
0
0
<COMMON> 71,119
<OTHER-SE> (53,620)
<TOTAL-LIABILITY-AND-EQUITY> 32,979
<SALES> 0
<TOTAL-REVENUES> 2,236
<CGS> 0
<TOTAL-COSTS> 10,537
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (7,798)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,798)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,798)
<EPS-PRIMARY> (1.15)
<EPS-DILUTED> (1.15)
</TABLE>
