<PAGE>
________________________________________________________________________________
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM 10-Q
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000.
( ) 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
______________________________
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, CALIFORNIA 94304
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (650) 812-0585
Indicate by check whether the Registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities and 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
The number of shares of Common Stock, $0.001 par value, outstanding as
of April 30, 2000 was 18,367,831.
________________________________________________________________________________
________________________________________________________________________________
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CV THERAPEUTICS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(unaudited)
<TABLE>
<CAPTION>
December 31, March 31,
1999 2000
--------- ---------
(A) (unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 20,763 $216,423
Marketable securities 70,494 56,488
Other current assets 2,447 2,474
--------- ---------
Total current assets 93,704 275,385
Notes receivable from related parties 448 479
Property and equipment, net 2,676 2,539
Intangible and other assets 79 6,341
--------- ---------
Total Assets $ 96,907 $284,744
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 1,541 $ 1,350
Accrued liabilities 3,227 4,283
Current portion of long-term debt 500 -
Current portion of capital lease obligation 398 407
--------- ---------
Total current liabilities 5,666 6,040
Long-term debt 7,000 4,500
Capital lease obligation 855 750
Convertible subordinated notes - 196,250
Deferred revenue 1,000 1,000
Other liabilities 239 193
--------- ---------
Total liabilities 14,760 208,733
Commitments
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized, none
issued and outstanding - -
Common stock, $0.001 par value, 30,000,000 shares authorized, 18,157,261
and 18,349,639 shares issued and outstanding at December 31, 1999 and
March 31, 2000, respectively; at amounts paid in 175,777 176,657
Notes receivable issued for stock (87) (37)
Deferred compensation (691) (792)
Accumulated deficit (92,675) (99,758)
Cumulative other comprehensive income (177) (59)
--------- ---------
Total stockholders' equity 82,147 76,011
--------- ---------
Total Liabilities and Stockholders' Equity $ 96,907 $284,744
========= =========
</TABLE>
(A) Derived from the audited financial statements included in the Company's
Annual Report on Form 10-K for 1999
See accompanying notes
<PAGE>
CV THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
-------------------------
1999 2000
--------- ---------
<S> <C> <C>
Revenues:
Collaborative research $ - $ -
Operating expenses:
Research and development 4,199 6,694
General and administrative 1,184 1,532
--------- ---------
Total operating expenses 5,383 8,226
--------- ---------
Loss from operations (5,383) (8,226)
Interest income 575 2,048
Interest and other expense (245) (905)
--------- ---------
Net loss $ (5,053) $ (7,083)
========= =========
Basic and diluted net loss per share $ (0.45) $ (0.39)
========= =========
Shares used in computing basic and diluted
net loss per share 11,232 18,247
========= =========
</TABLE>
See accompanying notes
<PAGE>
CV THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
-------------------------
1999 2000
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (5,053) $ (7,083)
Adjustments to reconcile net loss to net cash used in
operating activities:
Amortization of deferred compensation 170 207
Depreciation and amortization 382 452
Change in assets and liabilities:
Other current assets 188 (27)
Intangible and other assets 32 (6,293)
Accounts payable 29 (191)
Accrued and other liabilities (223) 1,010
--------- ---------
Net cash used in operating activities (4,475) (11,925)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investments (5,643) (3,549)
Maturities of investments 6,000 17,500
Capital expenditures (377) (142)
Notes receivable from officers and employees 21 50
--------- ---------
Net cash provided by investing activities 1 13,859
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on capital lease obligations (20) (96)
Borrowings under long-term debt - 196,250
Repayments of long-term debt (500) (3,000)
Net proceeds from issuance of common stock, net of repurchases 108 572
--------- ---------
Net cash provided by (used in) financing activities (412) 193,726
--------- ---------
Net increase (decrease) in cash and cash equivalents (4,886) 195,660
Cash and cash equivalents at beginning of period 11,954 20,763
--------- ---------
Cash and cash equivalents at end of period $ 7,068 $216,423
========= =========
</TABLE>
See accompanying notes
<PAGE>
CV THERAPEUTICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying 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 the results of
operations for the interim periods presented. The results of operations for
the three-month period ended March 31, 2000 are not necessarily indicative
of the results to be expected for the entire year ending December 31, 2000
or of future operating results for any interim period. The financial
information included herein should be read in conjunction with our Annual
Report on Form 10-K for the year ended December 31, 1999 which includes the
audited consolidated financial statements and the notes thereto.
Revenue Recognition
Revenue under our collaborative research arrangements is recognized
based on the performance requirements of the contract. Payments received,
which are still subject to future performance requirements, are recorded as
deferred revenue until earned.
Net Loss Per Share
Net loss per share is computed using the weighted average number of
common shares outstanding. Common equivalent shares have been excluded from
the computation as their effect is antidilutive.
2. COMPREHENSIVE LOSS
The components of comprehensive loss for the three months ended March
31, 1999 and 2000 are as follows:
<TABLE>
<CAPTION>
1999 2000
--------- ---------
<S> <C> <C>
(in thousands)
Net loss $ (5,053) $ (7,083)
Unrealized gains (losses) on securities (27) 118
--------- ---------
Comprehensive loss $ (5,080) $ (6,965)
========= =========
</TABLE>
3. SALE OF CONVERTIBLE SUBORDINATED NOTES
In March 2000 we entered into a purchase agreement pursuant to which we
sold to certain initial purchasers $196.3 million aggregate principal amount
of convertible subordinated notes. The offering of the notes was made to
qualified institutional buyers under Rule 144A of the Securities Act of
1933, as amended. Interest on the notes will accrue at a rate of 4.75% per
year, subject to adjustment in certain circumstances. The notes will mature
on March 7, 2007 and will be convertible into shares of CV Therapeutics'
common stock at a conversion price of $63.84 per share, subject to
adjustment in certain circumstances. We may, at our option, redeem the notes
at any time after March 7, 2003 or earlier if our stock prices reach certain
defined levels. At March 31, 2000 the market value of the subordinated notes
was $174.4 million.
<PAGE>
4. SUBSEQUENT EVENT
In April 2000 we earned a $6.5 million milestone, consisting of $2.0
million in cash and a $4.5 million line of credit, from our partner, Biogen
Inc. We have not accessed the addition to the line of credit. The milestone
was released by Biogen in connection with the recently completed Phase II
trial of CVT-124, an adenosine A1 receptor antagonist, and Biogen's decision
to continue with the adenosine A1 receptor antagonist program.
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 Report contain forward-looking
statements that involve risks and uncertainties. Our actual results may
differ materially from the results discussed in the forward-looking
statements. Factors that might cause such a difference include, but are not
limited to, those discussed in "Risk Factors".
OVERVIEW
CV Therapeutics is a biopharmaceutical company engaged in the discovery
and development of new small molecule drugs for the treatment of
cardiovascular diseases. Since our inception in December 1990, substantially
all of our resources have been dedicated to research and development. To
date, we have not generated any product revenues and do not expect to
generate any product revenues for at least several years. As of March 31,
2000, we had an accumulated deficit of $99.8 million. We expect our sources
of revenue, if any, for the next several years to consist of payments under
corporate partnerships and interest income. The process of developing our
products will require significant additional research and development,
preclinical testing and clinical trials, as well as regulatory approval.
These activities, together with our general and administrative expenses, are
expected to result in operating losses for the foreseeable future. We will
not receive product revenue unless we or our collaborative partners complete
clinical trials and successfully commercialize one or more of our products.
We are subject to risks common to biopharmaceutical companies, including
risks inherent in our 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 us and, in some cases, our collaborators, to conduct
preclinical tests and clinical trials, demonstrate efficacy and safety of
our product candidates, obtain regulatory clearances enter into
manufacturing, distribution and marketing arrangements, and obtain market
acceptance. We cannot provide assurance that we will generate revenues or
achieve and sustain profitability in the future.
RESULTS OF OPERATIONS
Research and Development Expenses. Research and development expenses
increased to $6.7 million for the quarter ended March 31, 2000, compared to
$4.2 million for the quarter ended March 31, 1999. The increase was due to
greater external costs associated with ranolazine and our other clinical
programs in addition to hiring additional employees to provide support for
an increased level of activity in our research, development and clinical
programs. We expect research and development expenses to continue to
increase in the future as we further expand product development efforts and
clinical trials.
General and Administrative Expenses. General and administrative
expenses increased to $1.5 million for the quarter ended March 31, 2000,
compared to $1.2 million for the quarter ended March 31, 1999. The increase
was due primarily to greater use of outside consultants for general business
matters. We expect general and administrative expenses to continue to
increase in the future in line with our research and development activities.
Interest Income. Interest income was $2.0 million for the quarter ended
March 31, 2000, compared to $575,000 for the quarter ended March 31, 1999.
The increase was due to higher average investment balances as
<PAGE>
the result of our follow-on offering in October 1999 and the sale of convertible
subordinated notes in March 2000. We expect that interest income will
fluctuate with average investment balances.
Interest and Other Expense. Interest and other expense was $905,000
for the quarter ended March 31, 2000 compared to $245,000 for the quarter
ended March 31, 1999. The increase was due to interest expense related to
the sale of convertible subordinated notes in March 2000. Quarterly interest
expense on the convertible subordinated notes will be $2.3 million. We
expect that other interest expense will fluctuate with average debt and loan
balances.
LIQUIDITY AND CAPITAL RESOURCES
We have financed our operations since inception primarily through
private placements and public offerings of debt and equity securities,
equipment and leasehold improvement financing, other debt financing and
payments under corporate collaborations. In January 1998, we completed a
follow-on public offering and raised net proceeds of approximately $19.6
million. In December 1998, we drew down $4.5 million under a general purpose
loan facility with Biogen. As of March 31, 2000 the outstanding balance for
this note was $4.5 million. Interest on this note is payable at prime plus
one and one-half percent (1.5%), or 10.25% at March 31, 2000, payable
annually, in arrears, each March 10th. In May 1999, we entered into a sales
and marketing services agreement with Innovex Inc. pursuant to which
Innovex's parent, Quintiles Transnational Corp., purchased 1,043,705 shares
of our common stock for a total investment of $5.0 million. In addition, we
entered into two promissory notes with Quintiles. The first promissory note
in the amount of $10.0 million may be drawn down by us upon filing a New
Drug Application for ranolazine. The second promissory note shall be a cash
amount to be determined after commercial launch of ranolazine. Both notes
are convertible into shares of common stock at the option of Quintiles upon
certain events. In October 1999, we completed a follow-on public offering
and raised approximately $64.3 million. In March 2000, we entered into a
purchase agreement pursuant to which we sold to certain initial purchasers
$196.3 million aggregate principal amount of convertible subordinated notes.
The offering of the notes was made to qualified institutional buyers under
Rule 144A of the Securities Act of 1933, as amended. Interest on the notes
will accrue at a rate of 4.75% per year, subject to adjustment in certain
circumstances. The notes will mature on March 7, 2007 and will be
convertible into shares of CV Therapeutics' common stock at a conversion
price of $63.84 per share, subject to adjustment in certain circumstances.
We may, at our option, redeem the notes at any time after March 7, 2003 or
earlier if our stock price reaches certain defined levels.
Cash, cash equivalents and marketable securities at March 31, 2000
totaled $272.9 million compared to $91.3 million at December 31, 1999. The
increase was due to the sale of $196.3 million in aggregate principal amount
of convertible subordinated notes offset by $11.9 million used to fund
operations and $3.0 million to retire long-term debt.
Net cash used in operations for the three months ended March 31, 2000
was $11.9 million compared to $4.5 million for the three months ended March
31, 1999. The increase was due to $6.3 million incurred in the sale of the
subordinated notes with the remainder related to increased research and
development efforts.
As of March 31, 2000, we have invested $8.6 million in property and
equipment with the rate of investment having increased during the last
eighteen months in line with increased research and development efforts.
This trend should continue for the foreseeable future.
We may require substantial additional funding in order to complete our
research and development activities and commercialize any potential
products. We currently estimate that our existing resources and projected
interest income, including the proceeds from our recently completed offering
of convertible subordinated notes, will enable us to maintain our current
and planned operations for at least the next 24 months. However, we cannot
assure that we will not require additional funding prior to then or that
additional financing will be available on acceptable terms or at all.
<PAGE>
Our future capital requirements will depend on many factors, including
scientific progress in our research and development programs, the size and
complexity of these programs, the scope and results of preclinical studies
and clinical trials, our ability 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 our control.
We cannot guarantee that the additional financing to meet our capital
requirements will be available on acceptable terms or at all. Insufficient
funds may require us to delay, scale back or eliminate some or all of our
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 we would otherwise
choose or may adversely affect our ability to operate as a going concern. If
additional funds are raised by issuing equity securities, substantial
dilution to existing stockholders may result.
RISK FACTORS
OUR PRODUCT CANDIDATES WILL TAKE AT LEAST SEVERAL YEARS TO DEVELOP, AND
WE CANNOT ASSURE YOU THAT WE WILL SUCCESSFULLY DEVELOP, MARKET AND
MANUFACTURE THESE PRODUCTS.
Since our inception in 1990, we have dedicated substantially all of our
resources to research and development. We do not have any marketed products
and we have not generated any product revenue. Because all of our potential
products are in research, preclinical or clinical development, we will not
realize product revenues for at least several years, if at all.
We have not applied for or received regulatory approval in the United
States or any foreign jurisdiction for the commercial sale of any of our
products. All of our product candidates are either in clinical trials under
an Investigational New Drug, or IND, or applicable foreign authority
submission, or are in preclinical research and development. We have not
submitted an NDA to the FDA or equivalent application to any other foreign
regulatory authorities for any of our product candidates, and the products
have not been determined to be safe or effective in humans for their
intended uses.
Conducting clinical trials is a lengthy, time-consuming and expensive
process. Before obtaining regulatory approvals for the commercial sale of
any products, we must demonstrate through preclinical testing and clinical
trials that our product candidates are safe and effective for use in humans.
We will incur substantial expense for, and devote a significant amount of
time to, preclinical testing and clinical trials.
Drug discovery methods based upon molecular cardiology are relatively
new. We cannot be certain that these methods will lead to commercially
viable pharmaceutical products. In addition, some of our compounds within
our cardiac imaging, cell cycle inhibition, cardiac conduction, cardiac
metabolism and Tangier drug discovery programs are in the early stages of
research and development, and we have not submitted IND applications or
commenced clinical trials for these new compounds. We cannot be certain when
these clinical trials will commence, if at all. Because these compounds are
in the early stages of product development, we could abandon further
development efforts before they reach clinical trials.
We cannot be certain that any of our product development efforts will be
successfully completed or that any of our products will be shown to be safe
and effective. Even if we believe that any product is safe and effective, we
may not obtain the required regulatory approvals. Furthermore, we may not be
able to manufacture our products in commercial quantities or market any
products successfully.
IF WE ARE UNABLE TO SATISFY THE REGULATORY REQUIREMENTS FOR OUR CLINICAL
TRIALS, WE WILL NOT BE ABLE TO COMMERCIALIZE OUR DRUG CANDIDATES.
<PAGE>
All of our products may require additional development, preclinical
studies, clinical trials and regulatory approval prior to commercialization.
Any delays in our clinical trials would delay market launch and would
increase our cash requirements.
We currently have only two products in clinical development: ranolazine
and CVT-510. Many factors could delay completion of our clinical trials,
including:
* slower than anticipated patient enrollment
* difficulty in obtaining sufficient supplies of clinical trial
materials
* adverse events occurring during the clinical trials.
For example, our first Phase III clinical trial of ranolazine had
challenging enrollment criteria. These criteria required patients who suffer
from angina to stop taking all of their other anti-anginal medications and
receive only placebo during segments of the clinical trial. This meant that
they received no medication to treat their angina when they received
placebo. Given the difficulty of identifying patients willing to completely
stop taking anti-anginal medications, enrollment for this trial was slower
than anticipated. We cannot assure you that enrollment for the second Phase
III trial for ranolazine will not also be delayed.
In addition, data obtained from preclinical and clinical activities are
susceptible to different interpretations, which could delay, limit or
prevent regulatory approval. Delays or rejections may be based upon many
factors, including changes in regulatory policy during the period of product
development. For example, the initial clinical trials with ranolazine used a
different formulation of ranolazine than we used in the MARISA trials and
than we are using in the CARISA trial. This means that the NDA will contain
data from trials using two different formulations and is subject to
interpretation by the FDA. An unfavorable interpretation could result in
actions by the FDA that would delay potential approval. We may be unable to
maintain our proposed schedules for IND applications and clinical protocol
submissions to the FDA, initiations of clinical trials and completions of
clinical trials as a result of FDA reviews or complications that may arise
in any phase of the clinical trial program.
Furthermore, even if our clinical trials occur on schedule, the results
may differ from those obtained in preclinical studies and earlier clinical
trials. Clinical trials may not demonstrate sufficient safety and efficacy
to obtain the necessary approvals. For example, in November 1995, based on
unfavorable efficacy data from a Phase II trial, we terminated a prior
development program.
IF WE ARE UNABLE TO SATISFY GOVERNMENTAL REGULATIONS RELATING TO THE
DEVELOPMENT OF OUR DRUG CANDIDATES, WE MAY BE UNABLE TO OBTAIN NECESSARY
REGULATORY APPROVALS TO COMMERCIALIZE OUR PRODUCTS.
The research, testing, manufacturing and marketing of drug products are
subject to extensive regulation by numerous regulatory authorities in the
United States and other countries. Failure to comply with FDA or other
applicable regulatory requirements may subject a company to administrative
or judicially imposed sanctions. These include:
* warning letters
* civil penalties
* criminal penalties
* injunctions
* product seizure or detention
<PAGE>
* product recalls
* total or partial suspension of production
* FDA refusal to approve pending NDAs or supplements to approved
NDAs.
The process of obtaining FDA and other required regulatory approvals,
including foreign approvals, often takes many years and can vary
substantially based upon the type, complexity and novelty of the products
involved. Furthermore, this approval process is extremely expensive and
uncertain. We cannot guarantee that any of our products under development
will be approved for marketing by the FDA. Even if regulatory approval of a
product is granted, we cannot be certain that we will be able to obtain the
labeling claims necessary or desirable for the promotion of those products.
Even if we obtain regulatory approval, we may be required to undertake
postmarketing trials. In addition, identification of side effects after a
drug is on the market or the occurrence of manufacturing problems could
cause subsequent withdrawal of approval, reformulation of the drug,
additional preclinical testing or clinical trials, changes in labeling of
the product, and additional marketing applications.
If we receive regulatory approval, we will also be subject to ongoing
FDA obligations and continued regulatory review. In particular, we or our
third party manufacturers will be required to adhere to regulations setting
forth current good manufacturing practices, known as cGMP. The regulations
require that we manufacture our products and maintain our records in a
prescribed manner with respect to manufacturing, testing and quality control
activities. Furthermore, we or our third party manufacturers must pass a
preapproval inspection of manufacturing facilities by the FDA before
obtaining marketing approval. We will also be subject to ongoing FDA
requirements for submission of safety reports and other postmarket
information.
If we receive regulatory approval and if any of our products or services
become reimbursable by a government health care program, such as Medicare or
Medicaid, we may become subject to certain federal and state health care
fraud and abuse and reimbursement laws. These laws include the federal
"Anti-Kickback Statute," "False Claims Act," and "Physician Self-Referral
Law," and their state counterparts. If and when we become subject to such
laws, our arrangements with third parties, including health care providers,
physicians, vendors, and Innovex, will need to comply with these laws as
applicable. We do not know whether our existing or future arrangements will
be found to be compliant. Violations of these statutes could result in
criminal and civil penalties and exclusion from governmental health care
programs.
OUR PRODUCTS, EVEN IF APPROVED BY THE FDA OR FOREIGN REGULATORY
AGENCIES, MAY NOT BE ACCEPTED BY PHYSICIANS, INSURERS OR PATIENTS.
If any of our products after receiving FDA or other foreign regulatory
approval fail to achieve market acceptance, our ability to become profitable
in the future will be adversely affected. We believe that market acceptance
will depend on our ability to provide acceptable evidence of safety,
efficacy and cost effectiveness. In addition, we believe market acceptance
depends on the effectiveness of our marketing strategy and the availability
of reimbursement for our products.
WE HAVE NO MARKETING OR SALES EXPERIENCE, AND IF WE ARE UNABLE TO ENTER
INTO COLLABORATIONS WITH MARKETING PARTNERS OR IF WE ARE UNABLE TO DEVELOP
OUR OWN SALES AND MARKETING CAPABILITY, WE MAY NOT BE SUCCESSFUL IN
COMMERCIALIZING OUR PRODUCTS.
We currently have no sales, marketing or distribution capability. As a
result, we depend on collaborations with third parties, such as Innovex and
Biogen, which have established distribution systems and direct sales forces.
In particular, we have entered into a sales and marketing services agreement
with Innovex with respect to ranolazine. Innovex will market and sell
ranolazine in the United States using a dedicated sales force if and when
<PAGE>
FDA approval to market ranolazine has been granted. Commercialization of
ranolazine depends on Innovex to perform their contractual obligations.
Their failure to do so would adversely affect commercialization of
ranolazine. To the extent that we enter into co-promotion or other licensing
arrangements, our revenues will depend upon the efforts of third parties,
over which we may have little control. In addition, Biogen is responsible
for establishing marketing and sales activities for any product that results
from the AdentriTM program.
If we are unable to reach and maintain agreement with one or more
pharmaceutical companies or collaborative partners, we may be required to
market our products directly. We may elect to establish our own specialized
sales force and marketing organization to market our products to
cardiologists. In order to do this, we would have to develop a marketing and
sales force with technical expertise and with supporting distribution
capability. Developing a marketing and sales force is expensive and time
consuming and could delay any product launch. We cannot be certain that we
will be able to develop this capacity.
OUR BUSINESS DEPENDS ON ATTRACTING AND RETAINING COLLABORATORS AND
LICENSORS.
We may not be able to retain current or attract new corporate and
academic collaborators, licensors, licensees and others. Our business
strategy requires us to enter into various arrangements with these parties,
and we are dependent upon the success of these parties in performing their
obligations. If we fail to obtain and maintain these arrangements, the
development of our products would be delayed. We may be unable to proceed
with the development, manufacture or sale of products or we might have to
fund development of a particular product candidate internally. If we have to
fund development and commercialization of all of our products internally,
our future capital requirements will increase substantially.
The collaborative arrangements that we may enter into in the future may
place responsibility on the collaborative partner for preclinical testing
and clinical trials, manufacturing and preparation and submission of
applications for regulatory approval of potential pharmaceutical products.
We cannot control the amount and timing of resources which our collaborative
partners devote to our programs. If a collaborative partner fails to
successfully develop or commercialize any product, product launch would be
delayed. In addition, collaborators may pursue competing technologies or
product candidates.
Under our collaborative arrangements, we may also have to meet
performance milestones. If we fail to meet our obligations under our
collaborative arrangements, our collaborators could terminate their
arrangements or we could lose rights to the compounds under development. For
example, under our agreement with Innovex, we are required to launch the
product by a specific date. If we fail to reach this milestone, Innovex will
no longer be obligated to provide sales and marketing services for
ranolazine. Under our agreement with Biogen, in order for us to receive
development milestone payments, Biogen must meet development milestones.
Under our license agreement with Syntex U.S.A., Inc., a subsidiary of Roche,
for ranolazine, we are required to make milestone payments to Syntex
following FDA approval of ranolazine and following regulatory approval of
ranolazine in Europe. These payments are due no later than March 31, 2005
and March 31, 2006, respectively.
In addition, collaborative arrangements in our industry are extremely
complex, particularly with respect to intellectual property rights. Disputes
may arise in the future with respect to the ownership of rights to any
technology developed with or by third parties. These and other possible
disagreements between us and our collaborators could lead to delays in the
collaborative research, development or commercialization of product
candidates. These disputes could also result in litigation or arbitration,
which is time consuming and expensive.
WE EXPECT TO CONTINUE TO OPERATE AT A LOSS AND MAY NEVER ACHIEVE
PROFITABILITY.
We cannot be certain that we will ever achieve and sustain
profitability. Since our inception, we have been engaged in research and
development activities. We have generated no product revenues. As of March
31, 2000, we had an accumulated deficit of $99.8 million. The process of
developing our products requires significant additional research and
development, preclinical testing and clinical trials, as well as regulatory
approvals. These
<PAGE>
activities, together with our general and administrative expenses, are expected
to result in operating losses for the foreseeable future.
WE MUST SECURE ADDITIONAL FINANCING TO MEET OUR FUTURE NEEDS.
We may require additional funding in order to complete our research and
development activities and commercialize any products. In the past, we have
financed our operations primarily through the sale of equity securities,
payments from our collaborators, equipment and leasehold improvement
financing and other debt financing. We have generated no product revenue,
and none is expected for at least several years. We anticipate that our
existing resources and projected interest income will enable us to maintain
our current and planned operations for at least the next 24 months. However,
we may require additional funding prior to that time.
Additional financing may not be available on acceptable terms or at all.
If we are unable to raise additional funds, we may:
* have to delay, scale back or eliminate some or all of our
research or development programs
* lose rights under existing licenses
* have to relinquish more of, or all of, our rights to product
candidates at an earlier stage of development or on less
favorable terms than we would otherwise seek
* be unable to operate as a going concern.
Our future capital requirements will depend on many factors, including:
* scientific progress in our research and development programs
* the size and complexity of our programs
* the timing, scope and results of preclinical studies and
clinical trials
* our ability 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 or obtaining preclinical and clinical
material.
There may be additional factors that could affect our need for
additional financing. Many of these factors are not within our control.
INABILITY TO COMPETE SUCCESSFULLY IN OUR MARKET WILL HARM OUR BUSINESS.
The pharmaceutical and biopharmaceutical industries, and the market for
cardiovascular drugs in particular, are intensely competitive. If regulatory
approvals are received, some of our products will compete with
well-established, proprietary and generic cardiovascular therapies that have
generated substantial sales over a number of years. Many of these therapies
are reimbursed from government health administration authorities and private
health insurers.
<PAGE>
In addition, we are aware of companies which are developing products
that may compete in the same markets as our products. Many of these
potential competitors have substantially greater product development
capabilities and financial, scientific, marketing and sales resources. Other
companies may succeed in developing products earlier or obtain approvals
from the FDA more rapidly than either we or our corporate partners are able
to achieve. Competitors may also develop products that are safer or more
effective than those under development or proposed to be developed by us and
our corporate partners. In addition, research and development by others
could render our technology or our products obsolete or non-competitive.
WE MAY BE UNABLE TO EFFECTIVELY PROTECT OUR INTELLECTUAL PROPERTY.
Our success will depend to a significant degree on our ability to:
* obtain patents and licenses to patent rights
* maintain trade secrets
* operate without infringing on the proprietary rights of others.
We cannot be certain that patents will issue from any of our pending or
future patent applications, that any issued patent will be sufficient to
protect our technology or that we will be able to obtain extensions of
patents beyond the initial term. For example, a primary patent relating to
ranolazine will expire in May 2003 unless we are granted an extension based
upon the Waxman-Hatch Act, which we anticipate would extend the patent
protection for an additional five years.
Patent applications in the United States are maintained in secrecy until
a patent issues. As a result, we can never be certain that others have not
filed patent applications for technology covered by our pending applications
or that we were the first to invent the technology. There may be third party
patents, patent applications and other intellectual property relevant to our
products and technology which are not known to us and that block or compete
with our compounds, products or processes.
Competitors may have filed applications for, or may have received
patents and may obtain additional patents and proprietary rights relating
to, compounds, products or processes that block or compete with ours. We may
have to participate in interference proceedings declared by the Patent and
Trademark Office. These proceedings determine the priority of invention and,
thus, the right to a patent for the technology in the United States. In
addition, litigation may be necessary to enforce any patents issued to us or
to determine the scope and validity of the proprietary rights of third
parties. Litigation and interference proceedings, even if they are
successful, are expensive to pursue, and we could use a substantial amount
of our limited financial resources in either case.
Just as it is important to protect our proprietary rights, we also must
not infringe patents issued to competitors and not breach the licenses that
might cover technology used in our potential products. If our competitors
own or have rights to technology that we need in our product development
efforts, we will need to obtain a license to those rights. If we fail to
obtain any necessary licenses, we may be unable to complete product
development.
We also rely on trade secrets to develop and maintain our competitive
position. Although we protect our proprietary technology in part by
confidentiality agreements with employees, consultants, collaborators,
advisors and corporate partners, these agreements may be breached. We cannot
assure you that these agreements will provide this meaningful protection or
adequate remedies in the event of unauthorized use or disclosure of this
information. We also cannot assure you that the parties to these agreements
will not breach them. In that event, we may not have adequate remedies for
any breach. As a result, third parties may gain access to our trade secrets,
and third parties may disclose our trade secrets and confidential technology
to the public. In addition, it is possible that our trade secrets will
otherwise become known or be discovered independently by our competitors.
<PAGE>
Patent litigation is becoming more widespread in the biopharmaceutical
industry. Although no third party has asserted a claim of infringement
against us, we cannot assure you that third parties will not assert patent
or other intellectual property infringement claims against us with respect
to our products or technology or other matters. If they do, we may not
prevail and we may not be able to obtain any necessary licenses on
reasonable terms, if at all. Any such claims against us, with or without
merit, as well as claims initiated by us against third parties, can be
time-consuming and expensive to defend or prosecute.
WE HAVE NO MANUFACTURING EXPERIENCE AND WILL DEPEND ON THIRD PARTIES TO
MANUFACTURE OUR PRODUCTS.
We do not currently operate manufacturing facilities for clinical or
commercial production of our products under development. We have no
experience in manufacturing, and we currently lack the resources or
capability to manufacture any of our products on a clinical or commercial
scale. As a result, we are dependent on corporate partners, licensees or
other third parties for the manufacturing of clinical and commercial scale
quantities of our products.
For example, we have entered into an agreement with a third party
manufacturer for clinical scale production of an amount of ranolazine's
active pharmaceutical ingredient that we believe will be sufficient to
support the remainder of the Phase III clinical program. We cannot be
certain that we will be able to enter into an agreement for the commercial
scale manufacture of the active ingredient in ranolazine. If we are unable
to do so, our Phase III trials of ranolazine will be delayed. We have
entered into an agreement with a third party manufacturer for clinical scale
production of ranolazine tablets sufficient to support the remainder of the
Phase III clinical program and are negotiating with them for registration
and commercialization supply of ranolazine tablets. If we are unable to
negotiate an agreement to supply ranolazine tablets for registration and
commercialization, commercial launch of ranolazine may be delayed. In
addition, because we have used various manufacturers for ranolazine in
different clinical trials prior to FDA approval of ranolazine, we will be
required to demonstrate to the FDA's satisfaction the bioequivalence of the
multiple sources of ranolazine used in our clinical trials and their
bioequivalence to the product to be commercially supplied.
FAILURE TO OBTAIN ADEQUATE REIMBURSEMENT FROM GOVERNMENT HEALTH
ADMINISTRATION AUTHORITIES, PRIVATE HEALTH INSURERS AND OTHER ORGANIZATIONS
COULD MATERIALLY ADVERSELY AFFECT OUR FUTURE BUSINESS, RESULTS OF OPERATIONS
AND FINANCIAL CONDITION.
Our ability and the ability of our existing and future corporate
partners to market and sell our products will depend in part on the extent
to which reimbursement for the cost of our products and related treatments
will be available from government health administration authorities, private
health insurers and other organizations. Third party payors are increasingly
challenging the price of medical products and services.
Significant uncertainty exists as to the reimbursement status of newly
approved health care products. In addition, for sales of our products in
Europe, we will be required to seek reimbursement on a country-by-country
basis. We cannot be certain that any products approved for marketing will be
considered cost effective or that reimbursement will be available or that
allowed reimbursement in foreign countries will be adequate. In addition,
payors' reimbursement policies could adversely affect our or any corporate
partner's ability to sell our products on a profitable basis.
OUR OPERATIONS INVOLVE HAZARDOUS MATERIALS, WHICH COULD SUBJECT US TO
SIGNIFICANT LIABILITY.
Our research and development activities involve the controlled use of
hazardous materials, including hazardous chemicals, radioactive materials
and pathogens. Accordingly, we are subject to federal, state and local laws
governing the use, handling and disposal of these materials. We may incur
significant costs to comply with additional environmental and health and
safety regulations in the future. Although we believe that our safety
procedures for handling and disposing of hazardous materials comply with
regulatory requirements, we cannot eliminate the risk of accidental
contamination or injury from these materials. In the event of an accident or
<PAGE>
environmental discharge, we may be held liable for any resulting damages,
which may exceed our financial resources and may materially adversely affect
our business, financial condition and results of operations.
WE MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS IF OUR PRODUCTS HARM
PEOPLE, AND WE HAVE ONLY LIMITED PRODUCT LIABILITY INSURANCE.
The manufacture and sale of human therapeutic products involve an
inherent risk of product liability claims and associated adverse publicity.
We currently have only limited product liability insurance for clinical
trials and no commercial product liability insurance. We do not know if we
will be able to maintain existing or obtain additional product liability
insurance on acceptable terms or with adequate coverage against potential
liabilities. This type of insurance is expensive and may not be available on
acceptable terms. If we are unable to obtain or maintain sufficient
insurance coverage on reasonable terms or to otherwise protect against
potential product liability claims, we may be unable to commercialize our
products. A successful product liability claim brought against us in excess
of our insurance coverage, if any, may require us to pay substantial
amounts. This could adversely affect our results of operations and our need
for and the timing of additional financing.
THE MARKET PRICE OF OUR STOCK MAY CONTINUE TO BE HIGHLY VOLATILE.
Within the last 12 months, our common stock has traded between $4.13 and
$69.00. The market price of the shares of common stock for our company has
been and may continue to be highly volatile. Announcements may have a
significant impact on the market price of our common stock. These
announcements may include:
* results of our clinical trials and preclinical studies, or those
of our corporate partners or our competitors
* our operating results
* developments in our relationships with corporate partners
* developments affecting our corporate partners
* negative regulatory action or regulatory approval with respect
to our announcement or our competitors' announcement of new
products
* government regulations, reimbursement changes and governmental
investigations or audits related to us or to our products
* developments related to our patents or other proprietary rights
or those of our competitors
* changes in the position of securities analysts with respect to
our stock
* operating results below the expectations of public market
analysts and investors
* market conditions for biopharmaceutical or biotechnology stocks
in general
The stock market has from time to time experienced extreme price and
volume fluctuations, which have particularly affected the market prices for
emerging biotechnology and biopharmaceutical companies, and which have often
been unrelated to their operating performance. These broad market
fluctuations may adversely affect the market price of our common stock. In
addition, sales of substantial amounts of our common stock in the public
market, could lower its market price.
<PAGE>
WE DO NOT GENERATE SUFFICIENT CASH FLOW TO PAY INTEREST AND MAKE OTHER
PAYMENTS ON CERTAIN INDEBTEDNESS.
Currently, we are not generating sufficient cash flow to pay interest
and make other payments that are required as a result of the consummation of
the sale of $196.3 million of convertible subordinated notes in March 2000.
This may require us to use a portion of the proceeds from the sale of the
notes to pay interest or borrow additional funds or sell additional equity
to meet our debt service obligation. If we are unable to satisfy our debt
service requirements, substantial liquidity problems could result, which
would negatively impact our future prospects.
DELAWARE LAW, PROVISIONS IN OUR CHARTER AND OUR RIGHTS PLAN COULD MAKE
THE ACQUISITION OF OUR COMPANY BY ANOTHER COMPANY MORE DIFFICULT.
Provisions of our certificate of incorporation may have the effect of
delaying or preventing changes in control or management or limit the price
that investors may be willing to pay for shares of our common stock. In
addition, we are subject to the provisions of Section 203 of the Delaware
General Corporation Law, an anti-takeover law, which could delay a merger,
tender offer or proxy contest or make a similar transaction more difficult.
In addition, our board of directors has the authority to issue up to
5,000,000 shares of preferred stock without stockholders' approval. The
rights of the holders of common stock will be subject to, and may be
affected by, the rights of the holders of any preferred stock that may be
issued in the future. The issuance of preferred stock could have the effect
of making it more difficult for a third party to acquire a majority of our
outstanding voting stock.
Furthermore, in February 1999, the board of directors enacted
anti-takeover provisions, including a stockholder rights plan, or "poison
pill," and severance agreements in the event of a change of control for key
executives.
ITEM 3. MARKET RISK
Our exposure to market rate risk for changes in interest rates relates
primarily to our investment portfolio. As of March 31, 2000 no significant
changes have occurred since our Annual Report on Form 10-K for the year
ended December 31, 1999.
<PAGE>
PART II. OTHER INFORMATION
ITEM 2. RECENT SALE OF UNREGISTERED SECURITIES
In March 2000, CV Therapeutics completed a private placement of $196.3
million aggregate principal amount of 4 3/4% Convertible Subordinated Notes
due March 7, 2007. The initial purchasers of the Notes were Merrill Lynch &
Co., J.P. Morgan & Co., Robertson Stephens and SG Cowen. We sold the Notes
to the initial purchasers for $190.1 million. The sale of the Notes to the
initial purchasers was exempt from registration under the Securities Act of
1933, as amended, under Section 4(2) thereof, as a transaction not involving
a public offering. The Notes were reoffered in the United States to
qualified institutional buyers in reliance on Rule 144A under the Securities
Act.
The Notes are convertible, at the option of the holder, at any time
prior to maturity, into CV Therapeutics common stock at a conversion price
of $63.84 per share, which is equal to a conversion rate of 15.6642 shares
per $1,000 principal amount of Notes, subject to adjustment.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 of Regulation S-K
EXHIBIT NUMBER DESCRIPTION
10.72 Indenture dated March 7,
2000 between the Company
and Norwest Bank Minnesota.
10.73 Convertible subordinated
note dated March 7, 2000.
10.74 Purchase agreement dated
March 1, 2000 between the
Company and Merrill Lynch
& Co., Merrill Lynch,
Pierce, Fenner & Smith
Incorporated, J.P. Morgan
Securities Inc.,
FleetBoston Robertson
Stephens Inc. and SG
Cowen Securities
Corporation as
Representatives(s) of the
several Initial Purchasers
10.75 Resale Registration
Rights agreement dated
March 7, 2000 between the
Company and Merrill Lynch
& Co., Merrill Lynch,
Pierce, Fenner & Smith
Incorporated, J.P. Morgan
Securities Inc.,
FleetBoston Robertson
Stephens Inc. and SG
Cowen Securities
Corporation as
Representatives(s) of the
several Initial Purchasers
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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: May 15, 2000 By: /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)
Date: May 15, 2000 By: /s/ DANIEL K. SPIEGELMAN
Daniel K. Spiegelman
Chief Financial Officer
(Principal Financial and Accounting Officer)
<PAGE>
INDENTURE, dated as of March 7, 2000, between CV
THERAPEUTICS, INC., a corporation duly organized and existing
under the laws of the State of Delaware, having its principal
office at 3172 Porter Drive, Palo Alto, California 94304 (the
"Company"), and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as
Trustee (the "Trustee"), having its principal corporate trust
office at Sixth & Marquette, MAC N9303-120, Minneapolis, MN
55479.
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
its 4_% Convertible Subordinated Notes due 2007 (herein called
the "Securities") of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company has
duly authorized the execution and delivery of this Indenture.
All things necessary to make the Securities, when the
Securities are executed by the Company and authenticated and
delivered hereunder and duly issued by the Company, the valid
obligations of the Company, and to make this Indenture a valid
agreement of the Company, in accordance with their and its terms,
have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all
Holders of the Securities, as follows:
<PAGE>
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1 Definitions.
For all purposes of this Indenture and the Securities, the
following terms are defined as follows:
"Act", when used with respect to any Holder of a
Security, has the meaning specified in Section 14.4(a)
hereof.
"Adjusted Interest Rate" means, with respect to any
Reset Transaction, the rate per annum that is the arithmetic
average of the rates quoted by two Reference Dealers
selected by the Company or its successor as the rate at
which interest on the Securities should accrue so that the
fair market value, expressed in dollars, of a Security
immediately after the later of:
(1) the public announcement of such Reset
Transaction; or
(2) the public announcement of a change in
dividend policy in connection with such Reset Transaction,
will equal the average Trading Price of a Security for the
20 Trading Days preceding the date of public announcement of
such Reset Transaction; provided that the Adjusted Interest
Rate shall not be less than 4.75% per annum.
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by
or under direct or indirect common control with such
specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person,
means the power to direct the management and policies of
such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Bankruptcy Law" means Title 11 of the U.S. Code or any
similar federal or state law for the relief of debtors.
"Board of Directors" means either the board of
directors of the Company or any committee of that board
empowered to act for it with respect to this Indenture.
"Board Resolution" means a resolution duly adopted by
the Board of Directors, a copy of which, certified by the
Secretary or an Assistant Secretary of the Company to be in
full force and effect on the date of such certification,
shall have been delivered to the Trustee.
<PAGE>
"Business Day", when used with respect to any Place of
Payment or Place of Conversion, means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment or Place of
Conversion, as the case may be, are authorized or obligated
by law to close.
"Change of Control" means the occurrence of any of the
following after the original issuance of the Securities:
(1) the acquisition by any person, including any
syndicate or group deemed to be a "person" under Section
13(d)(3) of the Exchange Act, of beneficial ownership,
directly or indirectly, through a purchase, merger or other
acquisition transaction or series of transactions, of shares
of capital stock of the Company entitling such person to
exercise 50% or more of the total voting power of all shares
of capital stock of the Company entitled to vote generally
in elections of directors, other than any such acquisition
by the Company, any subsidiary of the Company or any
employee benefit plan of the Company;
(2) any consolidation or merger of the Company
with or into any other person, any merger of another person
into the Company, or any conveyance, transfer, sale, lease
or other disposition of all or substantially all of the
properties and assets of the Company to another person,
other than (a) any such transaction (x) that does not result
in any reclassification, conversion, exchange or
cancellation of outstanding shares of capital stock of the
Company and (y) pursuant to which holders of capital stock
of the Company immediately prior to such transaction have
the entitlement to exercise, directly or indirectly, 50% or
more of the total voting power of all shares of capital
stock of the Company entitled to vote generally in the
election of directors of the continuing or surviving person
immediately after such transaction or (b) any merger which
is effected solely to change the jurisdiction of
incorporation of the Company and results in a
reclassification, conversion or exchange of outstanding
shares of Common Stock solely into shares of common stock of
the surviving entity;
(3) during any consecutive two-year period,
individuals who at the beginning of that two-year period
constituted the Board of Directors (together with any new
directors whose election to the Board of Directors, or whose
nomination for election by the stockholders of the Company,
was approved by a vote of a majority of the directors then
still in office who were either directors at the beginning
of such period or whose elections or nominations for
election were previously so approved) cease for any reason
to constitute a majority of the Board of Directors then in
office; or
(4) the Company is liquidated or dissolved or a
resolution is passed by the Company's stockholders approving
a plan of liquidation or dissolution of the Company other
than in a transaction which complies with the provisions
described in Article 6 of the Indenture.
Beneficial ownership shall be determined in accordance with
Rule 13d-3 promulgated by the SEC under the Exchange Act.
The term "person" shall include any syndicate or
<PAGE>
group which would be deemed to be a "person" under Section 13(d)(3)
of the Exchange Act.
"Chief Executive Officer" means any chief executive
officer of the Company.
"Closing Date" means March 7, 2000 or such later date
on which the Securities may be delivered pursuant to the
Purchase Agreement.
"Closing Price" of any security on any date of
determination means:
(1) the closing sale price (or, if no closing
sale price is reported, the last reported sale price) of
such security (regular way) on the New York Stock Exchange
on such date;
(2) if such security is not listed for trading on
the New York Stock Exchange on any such date, the closing
sale price as reported in the composite transactions for the
principal U.S. securities exchange on which such security is
so listed;
(3) if such security is not so listed on a U.S.
national or regional securities exchange, the closing sale
price as reported by the Nasdaq National Market;
(4) if such security is not so reported, the last
quoted bid price for such security in the over-the-counter
market as reported by the National Quotation Bureau or
similar organization; or
(5) if such bid price is not available, the
average of the mid-point of the last bid and ask prices of
such security on such date from at least three nationally
recognized independent investment banking firms retained for
this purpose by the Company.
"Common Stock" means any stock of any class of the
Company which has no preference in respect of dividends or
of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
Company and which is not subject to redemption by the
Company. However, subject to the provisions of Section
12.11 hereof, shares issuable on conversion of Securities
shall include only shares of the class designated as Common
Stock, par value $0.001 per share, of the Company at the
date of this Indenture or shares of any class or classes
resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
Company and which are not subject to redemption by the
Company, provided that if at any time there shall be more
than one such resulting class, the shares of each such class
then so issuable shall be substantially in the proportion
which the total number of shares of such class resulting
from all such reclassifications bears to the total number of
shares of all such classes resulting from all such
reclassifications.
"Company" means the corporation named as the "Company"
in the first paragraph of this instrument until a successor
corporation shall have become such pursuant to the
<PAGE>
applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Notice" has the meaning specified in Section
11.3 hereof.
"Company Order" means a written order signed in the
name of the Company by both (1) the Chief Executive Officer,
the President or a Vice President and (2) so long as not the
same as the officer signing pursuant to clause (1), the
Chief Financial Officer, the Treasurer or the Secretary of
the Company, and delivered to the Trustee.
"Conversion Agent" means any Person authorized by the
Company to convert Securities in accordance with Article 12
hereof.
"Conversion Price" has the meaning specified in Section
12.1 hereof.
"Corporate Trust Office" means for purposes of
presentation or surrender of Securities for payment,
registration, transfer, exchange or conversion or for
service of notices or demands upon the Company, the office
of the Trustee located in the City of New York (which at the
date of this Indenture is located at Norwest Corporate
Trust, c/o The Depository Trust Company, 1st Floor, TADS
Dept., 55 Water Street, New York, NY 10041), and for all
other purposes, the office of the Trustee located in the
City of Minneapolis, Minnesota (which at the date of this
Indenture is located at Sixth & Marquette, MAC N9303-120,
Minneapolis, MN 55479).
"Corporation" means corporations, associations, limited
liability companies, companies and business trusts.
"Current Market Price" has the meaning set forth in
Section 12.4(g).
"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any
Bankruptcy Law.
"Default" means an event which is, or after notice or
lapse of time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in
Section 2.17 hereof.
"Depositary" means The Depository Trust Company, its
nominees and their respective successors.
"Designated Senior Debt" means Senior Debt of the
Company which, at the date of determination, has an
aggregate amount outstanding of, or under which, at the date
of determination, the holders thereof are committed to lend
up to, at least $12.5 million and is specifically designated
in the instrument, agreement or other document evidencing or
governing that Senior Debt as "Designated Senior Debt" for
purposes of this Indenture (provided that such instrument,
agreement or other document may place limitations and
conditions on the right of such Senior Debt to exercise the
rights of Designated Senior Debt).
<PAGE>
"Dividend Yield" on any security for any period means
the dividends paid or proposed to be paid pursuant to an
announced dividend policy on such security for such period
divided by, if with respect to dividends paid on such
security, the average Closing Price of such security during
such period and, if with respect to dividends proposed to be
paid on such security, the Closing Price of such security on
the effective date of the related Reset Transaction.
"Dollar," "U.S. Dollar" or "U.S. $" means a dollar or
other equivalent unit in such coin or currency of the United
States as at the time shall be legal tender for the payment
of public and private debts.
"DTC Participants" has the meaning specified in Section
2.8 hereof.
"Event of Default" has the meaning specified in Section
4.1 hereof.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Expiration Time" has the meaning specified in Section
12.4(f) hereof.
"Fair market value" has the meaning set forth in
Section 12.4(g) hereof.
"Global Security" has the meaning specified in Section
2.2 hereof.
"Guarantee" means any obligation, contingent or
otherwise, of any Person, directly or indirectly
guaranteeing any Indebtedness of any other Person and any
obligation, direct or indirect, contingent or otherwise, of
such Person:
(1) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or
maintain financial statement conditions or otherwise); or
(2) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect
thereof (in whole or in part);
provided, however, that the term "guarantee" will not
include endorsements for collection or deposit in the
ordinary course of business. The term "guarantee" used as a
verb has a corresponding meaning.
"Holder," when used with respect to any Security, means
the Person in whose name the Security is registered in the
Register.
"Indebtedness," when used with respect to any Person,
and without duplication means:
<PAGE>
(1) all indebtedness, obligations and other
liabilities (contingent or otherwise) of such Person for
borrowed money (including obligations of the Company in
respect of overdrafts, foreign exchange contracts, currency
exchange agreements, Interest Rate Protection Agreements,
and any loans or advances from banks, whether or not
evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or other instruments for the
payment of money, or incurred in connection with the
acquisition of any property, services or assets (whether or
not the recourse of the lender is to the whole of the assets
of such Person or to only a portion thereof), other than any
account payable or other accrued current liability or
obligation to trade creditors incurred in the ordinary
course of business in connection with the obtaining of
materials or services;
(2) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with
respect to letters of credit, bank guarantees, bankers'
acceptances, surety bonds, performance bonds or other
guaranty of contractual performance;
(3) all obligations and liabilities (contingent
or otherwise) in respect of (a) leases of such Person
required, in conformity with generally accepted accounting
principles, to be accounted for as capitalized lease
obligations on the balance sheet of such Person and (b) any
lease or related documents (including a purchase agreement)
in connection with the lease of real property which provides
that such Person is contractually obligated to purchase or
cause a third party to purchase the leased property and
thereby guarantee a minimum residual value of the leased
property to the landlord and the obligations of such Person
under such lease or related document to purchase or to cause
a third party to purchase the leased property;
(4) all obligations of such Person (contingent or
otherwise) with respect to an interest rate or other swap,
cap or collar agreement or other similar instrument or
agreement or foreign currency hedge, exchange, purchase or
similar instrument or agreement;
(5) all direct or indirect guaranties or similar
agreements by such Person in respect of, and obligations or
liabilities (contingent or otherwise) of such Person to
purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of, indebtedness, obligations or
liabilities of another Person of the kind described in
clauses (1) through (4);
(6) any indebtedness or other obligations
described in clauses (1) through (4) secured by any
mortgage, pledge, lien or other encumbrance existing on
property which is owned or held by such Person, regardless
of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person; and
(7) any and all deferrals, renewals, extensions,
refinancings, replacements, restatements and refundings of,
or amendments, modifications or supplements to, any
indebtedness, obligation or liability of the kind described
in clauses (1) through (6).
<PAGE>
"Indenture" means this instrument as originally
executed or as it may from time to time be supplemented or
amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof.
"Initial Purchasers" mean Merrill Lynch, Pierce, Fenner
& Smith Incorporated, J.P. Morgan Securities Inc.,
FleetBoston Robertson Stephens Inc. and SG Cowen Securities
Corporation.
"Interest Payment Date" means each March 7 and
September 7.
"Interest Rate" means, (a) if a Reset Transaction has
not occurred, 4.75% per annum, or (b) following the
occurrence of a Reset Transaction, the Adjusted Interest
Rate related to such Reset Transaction to, but not including
the effective date of any succeeding Reset Transaction.
"Interest Rate Protection Agreement" means, with
respect to any Person, any interest rate swap agreement,
interest rate cap or collar agreement or other financial
agreement or arrangement designed to protect such person
against fluctuations in interest rates, as in effect from
time to time.
"Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended.
"Liquidated Damages" means all liquidated damages, if
any, payable pursuant to Section 3 of the Registration
Rights Agreement.
"Maturity" means the date on which the principal of
such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by acceleration,
conversion, call for redemption, exercise of a Repurchase
Right or otherwise.
"Nasdaq National Market" means the National Association
of Securities Dealers Automated Quotation National Market or
any successor national securities exchange or automated over-
the-counter trading market in the United States.
"Non-Electing Share" has the meaning specified in
Section 12.11 hereof.
"Officer" of the Company means the Chief Executive
Officer, the President, the Chief Financial Officer, the
Treasurer, any Vice President or the Secretary of the
Company.
"Officers' Certificate" means a certificate signed by
both (1) the Chief Executive Officer, the President or a
Vice President and (2) so long as not the same as the
officer signing pursuant to clause (1), the Chief Financial
Officer, the Treasurer or the Secretary of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of
counsel, who may be counsel to the Company (and may include
directors or employees of the Company) and which opinion is
acceptable to the Trustee which acceptance shall not be
unreasonably withheld.
<PAGE>
"Outstanding," when used with respect to Securities,
means, as of the date of determination, all Securities
theretofore authenticated and delivered under this
Indenture, except Securities:
(1) previously canceled by the Trustee or
delivered to the Trustee for cancellation;
(2) for the payment or redemption of which money
in the necessary amount has been previously deposited with
the Trustee or any Paying Agent (other than the Company) in
trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the
Holders of such Securities, provided that if such Securities
are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture; and
(3) which have been paid, in exchange for or in
lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands
such Securities are valid obligations of the Company.
"Paying Agent" has the meaning specified in Section 2.5
hereof.
"Payment Blockage Notice" has the meaning specified in
Section 13.1(d) hereof.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, estate, unincorporated
organization or government or any agency or political
subdivision thereof.
"Physical Securities" has the meaning specified in
Section 2.2 hereof.
"Place of Conversion" means any city in which any
Conversion Agent is located.
"Place of Payment" means any city in which any Paying
Agent is located.
"Predecessor Security" of any particular Security means
every previous Security evidencing all or a portion of the
same debt as that evidenced by such particular Security;
and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.12 hereof in
exchange for or in lieu of a mutilated, destroyed, lost or
stolen Security shall be deemed to evidence the same debt as
the mutilated, destroyed, lost or stolen Security.
"Purchase Agreement" means the Purchase Agreement,
dated March 1, 2000, between the Company and the Initial
Purchasers.
"QIB" means a "qualified institutional buyer" as
defined in Rule 144A.
"Quoted Price" of the Common Stock means the last
reported sale price of the Common Stock on the Nasdaq
National Market, or, if the Common Stock is listed on a
<PAGE>
national securities exchange, then on such exchange, or if
the Common Stock is not quoted on Nasdaq National Market or
listed on an exchange, the average of the last bid and asked
price on the National Association of Securities Dealers
Automated Quotation System.
"Record Date" means either a Regular Record Date or a
Special Record Date, as the case may be, provided that, for
purposes of Section 12.4 hereof, Record Date has the meaning
specified in Section 12.4(g) hereof.
"Redemption Date," when used with respect to any
Security to be redeemed, means the Optional Redemption Date
in the event of an Optional Redemption or the Provisional
Redemption Date, in the event of a Provisional Redemption,
as the case may be.
"Redemption Price," when used with respect to any
Security to be redeemed, means the Optional Redemption
Price, in the event of an Optional Redemption, or the
Provisional Redemption Price, in the event of a Provisional
Redemption, as the case may be.
"Reference Dealer" means a dealer engaged in the
trading of convertible securities.
"Reference Period" has the meaning set forth in Section
12.4(d) hereof.
"Register" has the meaning specified in Section 2.5
hereof.
"Registrar" has the meaning specified in Section 2.5
hereof.
"Registration Rights Agreement" means the Resale
Registration Rights Agreement dated March 7, 2000, between
the Company and the Initial Purchasers.
"Regular Record Date" for the interest on the
Securities (including Liquidated Damages, if any) payable
means the February 20 (whether or not a Business Day) next
preceding a March 7 Interest Payment Date and the August 30
(whether or not a Business Day) next preceding a September 7
Interest Payment Date.
"Repurchase Date" has the meaning specified in Section
11.1 hereof.
"Repurchase Price" has the meaning specified in Section
11.1 hereof.
"Repurchase Right" has the meaning specified in Section
11.1 hereof.
"Reset Transaction" means a merger, consolidation or
statutory share exchange to which the entity that is the
issuer of the shares of common stock into which the
Securities are then convertible into is a party; a sale of
all or substantially all the assets of that entity; a
recapitalization of those shares of common stock; or a
distribution described in Section 12.4(d) hereof; after the
effective date of which transaction or distribution the
Securities would be convertible into:
<PAGE>
(1) shares of an entity the common stock of which
had a Dividend Yield for the four fiscal quarters of such
entity immediately preceding the public announcement of such
transaction or distribution that was more than 2.5% higher
then the Dividend Yield on the Common Stock (or other common
stock then issuable upon conversion of the Securities) for
the four fiscal quarters preceding the public announcement
of such transaction or distribution; or
(2) shares of an entity that announces a dividend
policy prior to the effective date of such transaction or
distribution which policy, if implemented, would result in a
Dividend Yield on such entity's common stock for the next
four fiscal quarters that would result in such a 2.5% basis
point increase.
"Responsible Officer," when used with respect to the
Trustee, means any officer of the Trustee, including any
vice president, assistant vice president, secretary,
assistant secretary, the treasurer, any assistant treasurer,
the managing director or any other officer of the Trustee
customarily performing functions similar to those performed
by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular
subject.
"Restricted Securities" means the Securities defined as
such in Section 2.3 hereof.
"Restricted Securities Legend" has the meaning set
forth in Section 2.3(a) hereof.
"Rule 144" means Rule 144 under the Securities Act
(including any successor rule thereof), as the same may be
amended from time to time.
"Rule 144A" means Rule 144A as promulgated under the
Securities Act (including any successor rule thereof), as
the same may be amended from time to time.
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning ascribed to it in the
first paragraph under the caption "Recitals of the Company".
"Securities Act" means the Securities Act of 1933, as
amended.
"Senior Debt" means the principal of, premium, if any,
interest (including all interest accruing subsequent to the
commencement of any bankruptcy or similar proceeding,
whether or not a claim for post-petition interest is
allowable as a claim in any such proceeding) and rent
payable on or termination payment with respect to or in
connection with, and all fees, costs, expenses and other
amounts accrued or due on or in connection with,
Indebtedness of the Company, whether outstanding on the date
of this Indenture or thereafter created, incurred, assumed,
guaranteed or in effect guaranteed by the Company (including
all deferrals, renewals, extensions or refundings of, or
amendments, modifications or supplements to, the foregoing),
except for (a) any particular Indebtedness in respect of
which the instrument creating or evidencing the same or the
assumption or guarantee thereof expressly provides that such
Indebtedness
<PAGE>
shall not be senior in right of payment to the
Securities or expressly provides that such Indebtedness is
pari passu or junior to the Securities and (b) any
Indebtedness between or among the Company and/or any of its
subsidiaries, or any of the Company's Affiliates. The term
"Senior Debt" shall include, without limitation, all
Designated Senior Debt.
"Significant Subsidiary" means any Subsidiary which is
a "significant subsidiary" within the meaning of Rule 405
under the Securities Act.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to
Section 2.17 hereof.
"Stated Maturity" means the date specified in any
Security as the fixed date for the payment of principal on
such Security or on which an installment of interest
(including Liquidated Damages, if any) on such Security is
due and payable.
"Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or
indirectly, by the Company or by one or more other
Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition only,
"voting stock" means stock which ordinarily has voting power
for the election of directors, whether at all times or only
so long as no senior class of stock has such voting power by
reason of any contingency.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.
Code Section 77aaa-77bbbb), as in effect on the date of this
Indenture; provided, however, that in the event the TIA is
amended after such date, "TIA" means, to the extent required
by such amendment, the Trust Indenture Act of 1939, as so
amended, or any successor statute.
"Trading Day" means:
(1) if the applicable security is listed or
admitted for trading on the New York Stock Exchange or
another national security exchange, a day on which the New
York Stock Exchange or such other national security exchange
is open for business;
(2) if the applicable security is quoted on the
Nasdaq National Market, a day on which trades may be made
thereon; or
(3) if the applicable security is not so listed,
admitted for trading or quoted, any day other than a
Saturday or Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law or
executive order to close.
"Trading Price" of a security on any date of
determination means:
(1) the closing sale price (or, if no closing
sale price is reported, the last reported sale price) of
such security (regular way) on the New York Stock Exchange
on such date;
<PAGE>
(2) if such security is not listed for trading on
the New York Stock Exchange on any such date, the closing
sale price as reported in the composite transactions for the
principal U.S. securities exchange on which such security is
so listed;
(3) if such security is not so listed on a U.S.
national or regional securities exchange, the closing sale
price as reported by the Nasdaq National Market;
(4) if such security is not so reported, the last
price quoted by Interactive Data Corporation for such
security or, if Interactive Data Corporation is not quoting
such price, a similar quotation service selected by the
Company;
(5) if such security is not so quoted, the
average of the mid-point of the last bid and ask prices for
such security from at least two dealers recognized as market-
makers for such security; or
(6) if such security is not so quoted, the
average of the last bid and ask prices for such security
from a Reference Dealer.
"Transfer Agent" means any Person, which may be the
Company, authorized by the Company to exchange or register
the transfer of Securities.
"Trigger Event" has the meaning specified in Section
12.4(d) hereof.
"Trustee" means the Person named as the "Trustee" in
the first paragraph of this instrument until a successor
Trustee shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall
mean such successor Trustee.
"U.S. Government Obligations" means: (1) direct
obligations of the United States of America for the payment
of which the full faith and credit of the United States of
America is pledged or (2) obligations of a person controlled
or supervised by and acting as an agency or instrumentality
of the United States of America, the payment of which is
unconditionally guaranteed as a full faith and credit
obligation by the United States of America and which in
either case, are non-callable at the option of the issuer
thereof.
"Vice President," when used with respect to the
Company, means any vice president, whether or not designated
by a number or a word or words added before or after the
title "vice president."
Section 1.2 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA,
the provision is incorporated by reference in and made a part of
this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Holder;
<PAGE>
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the Securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined
by the TIA, defined by TIA reference to another statute or
defined by SEC rule have the meanings assigned to them by such
definitions.
Section 1.3 Rules of Construction.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with accounting
principles generally accepted in the United States prevailing at
the time of any relevant computation hereunder; and
(3) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
<PAGE>
ARTICLE 2
THE SECURITIES
Section 2.1 Title and Terms.
The Securities shall be known and designated as the "4_%
Convertible Subordinated Notes due 2007"of the Company. The
aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to
$175,000,000 (or $201,250,000 if the over-allotment option set
forth in Section 2 of the Purchase Agreement is exercised in
full), except for securities authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of
other Securities pursuant to Section 2.7, 2.8, 2.9, 2.12, 7.5,
10.8, 11.1 or 12.2 hereof. The Securities shall be issuable in
denominations of $1,000 or integral multiples thereof.
The Securities shall mature on March 7, 2007.
Interest shall accrue from March 7, 2000 at the Interest
Rate until the principal thereof is paid or made available for
payment. Interest shall be payable semiannually in arrears on
March 7 and September 7 in each year, commencing September 7,
2000.
Interest on the Securities shall be computed (i) for any
full semiannual period for which a particular Interest Rate is
applicable on the basis of a 360-day year of twelve 30-day months
and (ii) for any period for which a particular Interest Rate is
applicable shorter than a full semiannual period for which
interest is calculated, on the basis of a 30-day month and, for
such periods of less than a month, the actual number of days
elapsed over a 30-day month. For purposes of determining the
Interest Rate, the Trustee may assume that a Reset Transaction
has not occurred unless the Trustee has received an Officers'
Certificate stating that a Reset Transaction has occurred and
specifying the Adjusted Interest Rate then in effect.
A Holder of any Security at the close of business on a
Regular Record Date shall be entitled to receive interest
(including Liquidated Damages, if any) on such Security on the
corresponding Interest Payment Date.
A Holder of any Security which is converted after the close
of business on a Regular Record Date and prior to the
corresponding Interest Payment Date (other than any Security
whose Maturity is prior to such Interest Payment Date) shall be
entitled to receive interest (including Liquidated Damages, if
any) on the principal amount of such Security on such Interest
Payment Date, notwithstanding the conversion of such Security
prior to such Interest Payment Date. However, any such Holder
which surrenders any such Security for conversion during the
period between the close of business on such Regular Record Date
and ending with the opening of business on the corresponding
Interest Payment Date shall be required to pay the Company an
amount equal to the interest (including Liquidated Damages, if
any) on the principal amount of such Security so converted, which
is payable by the Company to such Holder on such Interest Payment
Date, at the time such Holder surrenders such Security for
conversion. Notwithstanding the foregoing, any such Holder which
surrenders for conversion any Security which has been called for
redemption by the Company in a notice of redemption given by the
Company pursuant to Section 10.5 hereof (whether the Redemption
Date for such Security is on
<PAGE>
such Interest Payment Date or otherwise) shall be entitled to receive
(and retain) such interest (including Liquidated Damages, if any) and
need not pay the Company an amount equal to the interest (including
Liquidated Damages, if any) on the principal amount of such Security
so converted at the time such Holder surrenders such Security for
conversion.
Principal of, and premium, if any, and interest on, Global
Securities shall be payable to the Depositary in immediately
available funds.
Principal and premium, if any, on Physical Securities shall
be payable at the office or agency of the Company maintained for
such purpose, initially the Corporate Trust Office of the
Trustee. Interest on Physical Securities will be payable by (i)
U.S. Dollar check drawn on a bank located in the city where the
Corporate Trust Office of the Trustee is located mailed to the
address of the Person entitled thereto as such address shall
appear in the Register, or (ii) upon application to the Registrar
not later than the relevant Record Date by a Holder of an
aggregate principal amount in excess of $5,000,000, wire transfer
in immediately available funds.
The Securities shall be redeemable at the option of the
Company as provided in Article 10 hereof.
The Securities shall have a Repurchase Right exercisable at
the option of Holders as provided in Article 11 hereof.
The Securities shall be convertible as provided in Article
12 hereof.
The Securities shall be subordinated in right of payment to
Senior Debt of the Company as provided in Article 13 hereof.
Section 2.2 Form of Securities.
The Securities and the Trustee's certificate of
authentication to be borne by such Securities shall be
substantially in the form annexed hereto as Exhibit A, which is
incorporated in and made a part of this Indenture. The terms and
provisions contained in the form of Security shall constitute,
and are hereby expressly made, a part of this Indenture and to
the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such
terms and provisions and to be bound thereby.
Any of the Securities may have such letters, numbers or
other marks of identification and such notations, legends and
endorsements as the officers executing the same may approve
(execution thereof to be conclusive evidence of such approval)
and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with
any rule or regulation made pursuant thereto or with any rule or
regulation of any securities exchange or automated quotation
system on which the Securities may be listed or designated for
issuance, or to conform to usage.
The Securities will be offered and sold only to QIBs in
reliance on Rule 144A and shall be issued initially only in the
form of one or more permanent Global Securities (each, a "Global
Security") in registered form without interest coupons. The
Global Securities shall be:
<PAGE>
(1) duly executed by the Company and authenticated by the
Trustee as hereinafter provided;
(2) registered in the name of the Depositary (or its nominee)
for credit to the respective accounts of the Holders at the
Depositary; and
(3) deposited with the Trustee, as custodian for the Depositary.
The Global Securities shall be substantially in the form of
Security set forth in Exhibit A annexed hereto (including the
text and schedule called for by footnotes 1 and 2 thereto). The
aggregate principal amount of the Global Securities may from time
to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depositary (or its
nominee), in accordance with the instructions given by the Holder
thereof, as hereinafter provided.
Securities issued in exchange for interests in the Global
Securities pursuant to Section 2.8(d) hereof shall be issued in
the form of permanent definitive Securities (the "Physical
Securities") in registered form without interest coupons. The
Physical Securities shall be substantially in the form set forth
in Exhibit A annexed hereto.
The Securities shall be typed, printed, lithographed or
engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as
determined by the Officers executing such Securities, as
evidenced by their execution of such Securities.
Section 2.3 Legends.
(a) Restricted Securities Legends.
Each Security issued hereunder shall, upon issuance, bear
the legend set forth in Section 2.3(a)(i) or Section 2.3(a)(ii)
(each, a "Restricted Securities Legend"), as the case may be, and
such legend shall not be removed except as provided in Section
2.3(a)(iii). Each Security that bears or is required to bear the
Restricted Securities Legend set forth in Section 2.3(a)(i)
(together with any Common Stock issued upon conversion of the
Securities and required to bear the Restricted Securities Legend
set forth in Section 2.3(a)(ii), collectively, the "Restricted
Securities") shall be subject to the restrictions on transfer set
forth in this Section 2.3(a) (including the Restricted Securities
Legend set forth below), and the Holder of each such Restricted
Security, by such Holder's acceptance thereof, shall be deemed to
have agreed to be bound by all such restrictions on transfer.
As used in Section 2.3(a), the term "transfer" encompasses
any sale, pledge, transfer or other disposition whatsoever of any
Restricted Security.
(i) Restricted Securities Legend for Securities.
Except as provided in Section 2.3(a)(iii), until two years
after the original issuance date of any Security, any certificate
evidencing such Security (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if
any, issued upon conversion
<PAGE>
thereof which shall bear the legend set forth in Section 2.3(a)(ii),
if applicable) shall bear a Restricted Securities Legend in substantially
the following form:
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED
OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS
A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT); (2) AGREES THAT IT WILL NOT
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTE
EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER THE NOTE
EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON
CONVERSION OF SUCH NOTE EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER
IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO
BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE NOTE
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THE NOTE EVIDENCED HEREBY WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF SUCH NOTE (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(D) ABOVE), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO
THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
NORWEST BANK MINNESOTA, N.A., AS TRUSTEE (OR ANY SUCCESSOR
TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFER IS
PURSUANT TO CLAUSE 2(C) ABOVE, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO NORWEST BANK MINNESOTA, N.A., AS
TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS AND OTHER INFORMATION AS THE
COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, THIS LEGEND WILL BE REMOVED UPON THE
EARLIER OF THE TRANSFER OF THIS NOTE EVIDENCED HEREBY
PURSUANT TO CLAUSE 2(C) OR 2(D) ABOVE OR THE EXPIRATION OF
TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED
HEREBY.
(ii) Restricted Securities Legend for Common Stock Issued Upon
Conversion of the Securities.
<PAGE>
Until two years after the original issuance date of any
Security, any stock certificate representing Common Stock issued
upon conversion of such Security shall bear a Restricted
Securities Legend in substantially the following form:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT
BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. THE HOLDER HEREOF AGREES THAT UNTIL THE
EXPIRATION OF TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE
NOTE UPON THE CONVERSION OF WHICH THE COMMON STOCK EVIDENCED
HEREBY WAS ISSUED, (1) IT WILL NOT RESELL OR OTHERWISE
TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) IN
ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT OR (D) IN ACCORDANCE WITH
A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT AND THAT CONTINUES TO BE EFFECTIVE
AT THE TIME OF SUCH TRANSFER; (2) PRIOR TO ANY SUCH TRANSFER
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(D) ABOVE), IT
WILL FURNISH TO NORWEST BANK MINNESOTA, N.A, AS TRANSFER
AGENT (OR ANY SUCCESSOR, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS AND OTHER INFORMATION AS THE
COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT; AND (3) IT WILL DELIVER TO EACH PERSON
TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE l(D) ABOVE) A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS
LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF
THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE l(C) OR
l(D) ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL
ISSUANCE OF THE NOTE UPON THE CONVERSION OF WHICH THE COMMON
STOCK EVIDENCED HEREBY WAS ISSUED.
(iii) Removal of the Restricted Securities Legends.
Each Security or share of Common Stock issued upon
conversion of such Security shall bear the Restricted Securities
Legend set forth in Section 2.3(a)(i) or 2.3(a)(ii), as the case
may be, until the earlier of:
(A) two years after the original issuance date of such Security;
(B) such Security or Common Stock has been sold pursuant to a
registration statement that has been declared effective under the
<PAGE>
Securities Act (and which continues to be effective at the time
of such sale); or
(C) such Common Stock has been issued upon conversion of
Securities that have been sold pursuant to a registration
statement that has been declared effective under the Securities
Act (and which continues to be effective at the time of such
sale).
The Holder must give notice thereof to the Trustee and any
transfer agent for the Common Stock, as applicable.
Notwithstanding the foregoing, the Restricted Securities
Legend may be removed if there is delivered to the Company such
satisfactory evidence, which may include an opinion of
independent counsel, as may be reasonably required by the Company
that neither such legend nor the restrictions on transfer set
forth therein are required to ensure that transfers of such
Security will not violate the registration requirements of the
Securities Act. Upon provision of such satisfactory evidence,
the Trustee, at the written direction of the Company, shall
authenticate and deliver in exchange for such Securities another
Security or Securities having an equal aggregate principal amount
that does not bear such legend. If the Restricted Securities
Legend has been removed from a Security as provided above, no
other Security issued in exchange for all or any part of such
Security shall bear such legend, unless the Company has
reasonable cause to believe that such other Security is a
"restricted security" within the meaning of Rule 144 and
instructs the Trustee in writing to cause a Restricted Securities
Legend to appear thereon.
Any Security (or security issued in exchange or substitution
thereof) as to which such restrictions on transfer shall have
expired in accordance with their terms or as to which the
conditions for removal of the Restricted Securities Legend set
forth in Section 2.3(a)(i) as set forth therein have been
satisfied may, upon surrender of such Security for exchange to
the Registrar in accordance with the provisions of Section 2.7
hereof, be exchanged for a new Security or Securities, of like
tenor and aggregate principal amount, which shall not bear the
Restricted Securities Legend required by Section 2.3(a)(i).
Any such Common Stock as to which such restrictions on
transfer shall have expired in accordance with their terms or as
to which the conditions for removal of the Restricted Securities
Legend set forth in Section 2.3(a)(ii) as set forth therein have
been satisfied may, upon surrender of the certificates
representing such shares of Common Stock for exchange in
accordance with the procedures of the transfer agent for the
Common Stock, be exchanged for a new certificate or certificates
for a like aggregate number of shares of Common Stock, which
shall not bear the Restricted Securities Legend required by
Section 2.3(a)(ii).
(b) Global Security Legend.
Each Global Security shall also bear the following legend on
the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC") TO CV
THERAPEUTICS, INC. (OR ITS SUCCESSOR) OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE,
<PAGE>
CONVERSION OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Section 2.4 Execution, Authentication, Delivery and Dating.
Two Officers shall execute the Securities on behalf of the
Company by manual or facsimile signature. If an Officer whose
signature is on a Security no longer holds that office at the
time the Security is authenticated, the Security shall be valid
nevertheless.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities
executed by the Company to the Trustee for authentication,
together with a Company Order for the authentication and delivery
of such Securities, and the Trustee in accordance with such
Company Order shall authenticate and deliver such Securities as
in this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture, or be valid or obligatory for any purpose, unless
there appears on such Security a certificate of authentication
substantially in the form provided for herein executed by or on
behalf of the Trustee by manual signature, and such certificate
upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and
delivered hereunder.
The Trustee may appoint an authenticating agent or agents
reasonably acceptable to the Company with respect to the
Securities. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such
agent.
Section 2.5 Registrar and Paying Agent.
The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for
exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent").
The Registrar shall keep a register of the Securities (the
"Register") and of their transfer and exchange. The Company may
appoint one or more co-Registrars and one or more additional
Paying Agents for the Securities. The term "Paying Agent"
includes any additional paying agent and the term "Registrar"
includes any additional registrar. The Company may change any
Paying Agent or Registrar without prior notice to any Holder.
The Company will cause each Paying Agent (other than the
Trustee) to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
<PAGE>
(1) hold all sums held by it for the payment of the principal of
and premium, if any, or interest (including Liquidated Damages,
if any) on Securities in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as provided in this Indenture;
(2) give the Trustee notice of any Default by the Company in the
making of any payment of principal and premium, if any, or
interest (including Liquidated Damages, if any); and
(3) at any time during the continuance of any such Default, upon
the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Company shall give prompt written notice to the Trustee
of the name and address of any Agent who is not a party to this
Indenture. If the Company fails to appoint or maintain another
entity as Registrar or Paying Agent, the Trustee shall act as
such. The Company or any Affiliate of the Company may act as
Paying Agent or Registrar; provided, however, that none of the
Company, its subsidiaries or the Affiliates of the foregoing
shall act:
(i) as Paying Agent in connection with redemptions, offers to
purchase and discharges, as otherwise specified in this
Indenture, and
(ii) as Paying Agent or Registrar if a Default or Event of
Default has occurred and is continuing.
The Company hereby initially appoints the Trustee as
Registrar and Paying Agent for the Securities.
Section 2.6 Paying Agent to Hold Assets in Trust.
Not later than 11:00 a.m. (New York City time) on each due
date of the principal, premium, if any, and interest (including
Liquidated Damages, if any) on any Securities, the Company shall
deposit with one or more Paying Agents money in immediately
available funds sufficient to pay such principal, premium, if
any, and interest (including Liquidated Damages, if any) so
becoming due. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent (if other than the Company) shall
have no further liability for the money so paid over to the
Trustee.
If the Company shall act as a Paying Agent, it shall, prior
to or on each due date of the principal of and premium, if any,
or interest (including Liquidated Damages, if any) on any of the
Securities, segregate and hold in trust for the benefit of the
Holders a sum sufficient with monies held by all other Paying
Agents, to pay the principal and premium, if any, or interest
(including Liquidated Damages, if any) so becoming due until such
sums shall be paid to such Persons or otherwise disposed of as
provided in this Indenture, and shall promptly notify the Trustee
of its action or failure to act.
<PAGE>
Section 2.7 General Provisions Relating to Transfer and
Exchange.
The Securities are issuable only in registered form. A
Holder may transfer a Security only by written application to the
Registrar stating the name of the proposed transferee and
otherwise complying with the terms of this Indenture. No such
transfer shall be effected until, and such transferee shall
succeed to the rights of a Holder only upon, final acceptance and
registration of the transfer by the Registrar in the Register.
Furthermore, any Holder of a Global Security shall, by acceptance
of such Global Security, agree that transfers of beneficial
interests in such Global Security may be effected only through a
book-entry system maintained by the Holder of such Global
Security (or its agent) and that ownership of a beneficial
interest in the Security shall be required to be reflected in a
book-entry. Notwithstanding the foregoing, in the case of a
Restricted Security, a beneficial interest in a Global Security
being transferred in reliance on an exemption from the
registration requirements of the Securities Act other than in
accordance with Rule 144 and Rule 144A may only be transferred
for a Physical Security.
When Securities are presented to the Registrar with a
request to register the transfer or to exchange them for an equal
aggregate principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or make
the exchange as requested if its requirements for such
transactions are met (including that such Securities are duly
endorsed or accompanied by a written instrument of transfer duly
executed by the Holder thereof or by an attorney who is
authorized in writing to act on behalf of the Holder). Subject
to Section 2.4 hereof, to permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall
authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange
or redemption of the Securities, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than
any such transfer taxes or other similar governmental charge
payable upon exchanges pursuant to Section 2.14, 7.5 or 10.8
hereof).
Neither the Company nor the Registrar shall be required to
exchange or register a transfer of any Securities:
(1) for a period of 15 Business Days prior to the day of any
selection of Securities for redemption under Article 10 hereof;
(2) so selected for redemption or, if a portion of any Security
is selected for redemption, such portion thereof selected for
redemption; or
(3) surrendered for conversion or, if a portion of any Security
is surrendered for conversion, such portion thereof surrendered
for conversion.
Section 2.8 Book-Entry Provisions for the Global Securities.
(a) The Global Securities initially shall:
(i) be registered in the name of the Depositary (or a nominee
thereof);
(ii) be delivered to the Trustee as custodian for such
Depositary; and
<PAGE>
(iii) bear the Restricted Securities Legend as set forth in
Section 2.3(a)(i) hereof.
Members of, or participants in, the Depositary ("DTC
Participants") shall have no rights under this Indenture with
respect to any Global Security held on their behalf by the
Depositary, or the Trustee as its custodian, or under such Global
Security, and the Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing contained
herein shall prevent the Company, the Trustee or any agent of the
Company or Trustee from giving effect to any written
certification, proxy or other authorization furnished by the
Depositary or impair, as between the Depositary and the DTC
Participants, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) The registered Holder of a Global Security may grant proxies
and otherwise authorize any Person, including DTC Participants
and Persons that may hold interests through DTC Participants, to
take any action which a Holder is entitled to take under this
Indenture or the Securities.
(c) A Global Security may not be transferred, in whole or in
part, to any Person other than the Depositary (or a nominee
thereof), and no such transfer to any such other Person may be
registered. Beneficial interests in a Global Security may be
transferred in accordance with the rules and procedures of the
Depositary and the provisions of Section 2.9 hereof.
(d) If at any time:
(i) the Depositary notifies the Company in writing that it is no
longer willing or able to continue to act as Depositary for the
Global Securities, or the Depositary ceases to be a "clearing
agency" registered under the Exchange Act, and a successor
depositary for the Global Securities is not appointed by the
Company within 90 days of such notice or cessation;
(ii) the Company, at its option, notifies the Trustee in writing
that it elects to cause the issuance of the Securities in
definitive form under this Indenture in exchange for all or any
part of the Securities represented by a Global Security or Global
Securities; or
(iii) an Event of Default has occurred and is continuing and
the Registrar has received a request from the Depositary for the
issuance of Physical Securities in exchange for such Global
Security or Global Securities,
the Depositary shall surrender such Global Security or Global
Securities to the Trustee for cancellation and the Company shall
execute, and the Trustee, upon receipt of an Officers'
Certificate and Company Order for the authentication and delivery
of Securities, shall authenticate and deliver in exchange for
such Global Security or Global Securities, Physical Securities of
like tenor as that of the Global Securities in an aggregate
principal amount equal to the aggregate principal amount of such
Global Security or Global Securities. Such Physical Securities
shall be registered in such names as the Depositary shall
identify in writing as the beneficial owners of the Securities
represented by such Global Security or Global Securities (or any
nominees thereof).
<PAGE>
Notwithstanding the foregoing, in connection with any
transfer of beneficial interests in a Global Security to
beneficial owners pursuant to Section 2.8(d) hereof, the
Registrar shall reflect on its books and records the date and a
decrease in the principal amount of such Global Security in an
amount equal to the principal amount of the beneficial interest
in such Global Security to be transferred.
Section 2.9 Special Transfer Provisions.
Unless a Security is transferred after the time period
referred to in Rule 144(k) under the Securities Act or otherwise
sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be
effective at the time of such sale), the following provisions
shall apply.
With respect to the registration of any proposed transfer of
Securities to a QIB:
(i) If the Securities to be transferred consist of an interest
in the Global Securities, the transfer of such interest may be
effected only through the book-entry system maintained by the
Depositary.
(ii) If the Securities to be transferred consist of Physical
Securities, the Registrar shall register the transfer if such
transfer is being made by a proposed transferor who has checked
the box provided for on the form of Security stating, or has
otherwise advised the Company and the Registrar in writing, that
the sale has been made in compliance with the provisions of Rule
144A to a transferee who has signed the certification provided
for on the form of Security stating or has otherwise advised the
Company and the Registrar in writing that:
(A) it is purchasing the Securities for its own account or an
account with respect to which it exercises sole investment
discretion, in each case for investment and not with a view to
distribution;
(B) it and any such account is a QIB within the meaning of Rule
144A;
(C) it is aware that the sale to it is being made in reliance on
Rule 144A;
(D) it acknowledges that it has received such information
regarding the Company as it has requested pursuant to Rule 144A
or has determined not to request such information; and
(E) it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
In addition, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the
Global Securities in an amount equal to the principal amount of the
<PAGE>
Physical Securities to be transferred, and the Trustee shall
cancel the Physical Securities so transferred.
By its acceptance of any Security bearing the Restricted
Securities Legend, each Holder of such a Security acknowledges
the restrictions on transfer of such Security set forth in this
Indenture and agrees that it will transfer such Security only as
provided in this Indenture. The Registrar shall not register a
transfer of any Security unless such transfer complies with the
restrictions on transfer of such Security set forth in this
Indenture. The Registrar shall be entitled to receive and rely
on written instructions from the Company verifying that such
transfer complies with such restrictions on transfer. In
connection with any transfer of Securities, each Holder agrees by
its acceptance of the Securities to furnish the Registrar or the
Company such certifications, legal opinions or other information
as either of them may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or a
transaction not subject to, the registration requirements of the
Securities Act; provided that the Registrar shall not be required
to determine (but may rely on a determination made by the Company
with respect to) the sufficiency of any such certifications,
legal opinions or other information.
The Registrar shall retain copies of all letters, notices
and other written communications received pursuant to Section 2.8
hereof or this Section 2.9. The Company shall have the right to
inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of
reasonable written notice to the Registrar.
Section 2.10 Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of
the names and addresses of Holders and shall otherwise comply
with Section 312(a) of the TIA. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee prior to or
on each Interest Payment Date and at such other times as the
Trustee may request in writing a list in such form and as of such
date as the Trustee may reasonably require of the names and
addresses of Holders relating to such Interest Payment Date or
request, as the case may be.
Section 2.11 Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the registered Holder of a Global Security as
the absolute owner of such Global Security for the purpose of
receiving payment thereof or on account thereof and for all other
purposes whatsoever, whether or not such Security be overdue, and
notwithstanding any notice of ownership or writing thereon, or
any notice of previous loss or theft or other interest therein.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name any Security is
registered as the owner of such Security for the purpose of
receiving payment of principal of and premium, if any, and
interest (including Liquidated Damages, if any) on such Security
and for all other purposes whatsoever, whether or not such
Security be overdue, and notwithstanding any notice of ownership
or writing thereon, or any notice of previous loss or theft or
other interest therein.
<PAGE>
Section 2.12 Mutilated, Destroyed, Lost or Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of like tenor and
principal amount and bearing a number not contemporaneously
outstanding.
If there is delivered to the Company and the Trustee
(1) evidence to their satisfaction of the destruction, loss or
theft of any Security, and
(2) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then,
in the absence of notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company
shall execute and, upon request, the Trustee shall authenticate
and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the
Company in its discretion, but subject to any conversion rights,
may, instead of issuing a new Security, pay such Security, upon
satisfaction of the condition set forth in the preceding
paragraph.
Upon the issuance of any new Security under this Section,
the Company may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Security shall be at
any time enforceable by anyone, and such new Security shall be
entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.
Section 2.13 Treasury Securities.
In determining whether the Holders of the requisite
principal amount of Outstanding Securities are present at a
meeting of Holders for quorum purposes or have given any request,
demand, authorization, direction, notice, consent or waiver
hereunder, Securities owned by the Company or any Affiliate of
the Company shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such determination as to
the presence of a quorum or upon any such request, demand,
authorization, direction, notice, consent or waiver, only such
Securities of which the Trustee has received written notice and
are so owned shall be so disregarded.
<PAGE>
Section 2.14 Temporary Securities.
Pending the preparation of Securities in definitive form,
the Company may execute and the Trustee shall, upon written
request of the Company, authenticate and deliver temporary
Securities (printed or lithographed). Temporary Securities shall
be issuable in any authorized denomination, and substantially in
the form of the Securities in definitive form but with such
omissions, insertions and variations as may be appropriate for
temporary Securities, all as may be determined by the Company.
Every such temporary Security shall be executed by the Company
and authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with the same effect, as the
Securities in definitive form. Without unreasonable delay, the
Company will execute and deliver to the Trustee Securities in
definitive form (other than in the case of Securities in global
form) and thereupon any or all temporary Securities (other than
any such Securities in global form) may be surrendered in
exchange therefor, at each office or agency maintained by the
Company pursuant to Section 9.2 and the Trustee shall
authenticate and deliver in exchange for such temporary
Securities an equal aggregate principal amount of Securities in
definitive form. Such exchange shall be made by the Company at
its own expense and without any charge therefor. Until so
exchanged, the temporary Securities shall in all respects be
entitled to the same benefits and subject to the same limitations
under this Indenture as Securities in definitive form
authenticated and delivered hereunder.
Section 2.15 Cancellation.
All securities surrendered for payment, redemption,
repurchase, conversion, registration of transfer or exchange
shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee. All Securities so delivered shall be
canceled promptly by the Trustee, and no Securities shall be
issued in lieu thereof except as expressly permitted by any of
the provisions of this Indenture. Upon written instructions of
the Company, the Trustee shall destroy canceled Securities and,
after such destruction, shall deliver a certificate of such
destruction to the Company. If the Company shall acquire any of
the Securities, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by
such Securities unless the same are delivered to the Trustee for
cancellation.
Section 2.16 CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP"
numbers (if then generally in use), and the Trustee shall use
CUSIP numbers in notices of redemption or exchange as a
convenience to Holders; provided that any such notice shall state
that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in
any such notice and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of
such numbers. The Company shall promptly notify the Trustee of
any change in the CUSIP numbers.
<PAGE>
Section 2.17 Defaulted Interest.
If the Company fails to make a payment of interest
(including Liquidated Damages, if any) on any Security when due
and payable ("Defaulted Interest"), it shall pay such Defaulted
Interest plus (to the extent lawful) any interest payable on the
Defaulted Interest, in any lawful manner. It may elect to pay
such Defaulted Interest, plus any such interest payable on it, to
the Persons who are Holders of such Securities on which the
interest is due on a subsequent Special Record Date. The Company
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each such Security. The Company
shall fix any such Special Record Date and payment date for such
payment. At least 15 days before any such Special Record Date,
the Company shall mail to Holders affected thereby a notice that
states the Special Record Date, the Interest Payment Date, and
amount of such interest (and such Liquidated Damages, if any) to
be paid.
<PAGE>
ARTICLE 3
SATISFACTION AND DISCHARGE
Section 3.1 Satisfaction and Discharge of Indenture.
When:
(1) The Company shall deliver to the trustee for cancellation
all securities previously authenticated (other than any
securities which have been destroyed, lost or stolen and in lieu
of, or in substitution for which, other securities shall have
been authenticated and delivered) and not previously canceled, or
(2) (A) all the securities not previously canceled or delivered
to the trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption,
(B) the Company shall deposit with the Trustee, in trust, cash
in U.S. dollars and/or U.S. Government Obligations which through
the payment of interest and principal in respect thereof, in
accordance with their terms, will provide (and without
reinvestment and assuming no tax liability will be imposed on
such Trustee), not later than one day before the due date of any
payment of money, an amount in cash, sufficient, in the opinion
of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, to pay principal of, premium, if any, or interest
(including Liquidated Damages, if any) on all of the Securities
(other than any Securities which shall have been mutilated,
destroyed, lost or stolen and in lieu of or in substitution for
which other Securities shall have been authenticated and
delivered) not previously canceled or delivered to the Trustee
for cancellation, on the dates such payments of principal,
premium, if any, or interest (including Liquidated Damages, if
any) are due to such date of maturity or redemption, as the case
may be, and
(C) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel to the effect that (x) the
Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (y) since the date of
execution of this Indenture, there has been a change in the
applicable federal income tax law, in the case of either clause
(x) or (y) to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders will not recognize
income, gain or loss for federal income tax purposes as a result
of such deposit and discharge and will be subject to federal
income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit and
discharge had not occurred, and
if, in the case of either clause (1) or (2), the Company shall
also pay or cause to be paid all other sums payable hereunder by
the Company, then this Indenture shall cease to be of further
effect (except as to:
<PAGE>
(i) remaining rights of registration of transfer, substitution
and exchange and conversion of Securities,
(ii) rights hereunder of Holders to receive payments of principal
of and premium, if any, and interest (including Liquidated
Damages, if any) on, the Securities and the other rights, duties
and obligations of Holders, as beneficiaries hereof with respect
to the amounts, if any, so deposited with the Trustee, and
(iii) the rights, obligations and immunities of the Trustee
hereunder),
and the Trustee, on demand of the Company accompanied by an
Officers' Certificate and an Opinion of Counsel and at the cost
and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture;
provided, however, the Company shall reimburse the Trustee for
all amounts due the Trustee under Section 5.8 hereof and for any
costs or expenses thereafter reasonably and properly incurred by
the Trustee and to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Securities.
Section 3.2 Deposited Monies to Be Held in Trust.
Subject to Section 3.3 hereof, all monies deposited with the
Trustee pursuant to Section 3.1 hereof shall be held in trust and
applied by it to the payment, notwithstanding the provisions of
Article 13 hereof, either directly or through any Paying Agent
(including the Company if acting as its own Paying Agent), to the
Holders of the particular Securities for the payment or
redemption of which such monies have been deposited with the
Trustee, of all sums due and to become due thereon for principal,
premium, if any, and interest (including Liquidated Damages, if
any). All monies deposited with the Trustee pursuant to Section
3.1 hereof (and held by it or any Paying Agent) for the payment
of Securities subsequently converted shall be returned to the
Company upon request of the Company.
Section 3.3 Return of Unclaimed Monies.
The Trustee and the Paying Agent shall pay to the Company
any money held by them for the payment of principal or premium,
if any, or interest (including Liquidated Damages, if any) that
remains unclaimed for two years after the date upon which such
payment shall have become due. After payment to the Company,
Holders entitled to the money must look to the Company for
payment as general creditors unless an applicable abandoned
property law designates another Person, and all liability of the
Trustee and such Paying Agent with respect to such money shall
cease.
<PAGE>
ARTICLE 4
DEFAULTS AND REMEDIES
Section 4.1 Events of Default.
An "Event of Default" with respect to the Securities occurs
when any of the following occurs (whatever the reason for such
Event of Default and whether it shall be occasioned by the
provisions of Article 13 hereof or be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(a) the Company defaults in the payment of the principal of or
premium, if any, on any of the Securities when it becomes due and
payable at Maturity, upon redemption or exercise of a Repurchase
Right or otherwise, whether or not such payment is prohibited by
Article 13 hereof; or
(b) the Company defaults in the payment of interest (including
Liquidated Damages, if any) on any of the Securities when it
becomes due and payable and such default continues for a period
of 30 days, whether or not such payment is prohibited by Article
13 hereof; or
(c) the Company fails to deliver shares of Common Stock,
together with cash instead of fractional shares, when those
shares of Common Stock or cash instead of fractional shares are
required to be delivered following conversion of a Security in
accordance with Article 12, and that failure continues for 10
days; or
(d) the Company fails to perform or observe any other term,
covenant or agreement contained in the Securities or this
Indenture and the failure continues for a period of 60 days after
written notice of such failure, requiring the Company to remedy
the same, shall have been given to the Company by the Trustee or
to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities; or
(e) (i) the Company fails to make any payment by the end of the
applicable grace period, if any, after the maturity of any
Indebtedness for borrowed money in an amount in excess of
$5,000,000 or (ii) there is an acceleration of any Indebtedness
for borrowed money in an amount in excess of $5,000,000 because
of a default with respect to such Indebtedness without such
Indebtedness having been discharged or such acceleration having
been cured, waived, rescinded or annulled, in the case of either
(i) or (ii) above, for a period of 30 days after written notice
to the Company by the Trustee or to the Company and the Trustee
by Holders of at least 25% in aggregate principal amount of the
Outstanding Securities; or
(f) the entry by a court having jurisdiction in the premises of
(i) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable U.S. federal
or state bankruptcy, insolvency, reorganization or other similar
law or (ii) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable U.S. federal or state
law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or
of any substantial part
<PAGE>
of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief
or any such other decree or order unstayed and in effect for a period
of 60 consecutive days; or
(g) the commencement by the Company of a voluntary case or
proceeding under any applicable U.S. federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by the Company to the entry of a decree or order for
relief in respect of the Company in an involuntary case or
proceeding under any applicable U.S. federal or state bankruptcy,
insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding
against the Company, or the filing by the Company of a petition
or answer or consent seeking reorganization or relief under any
applicable U.S. federal or state law, or the consent by the
Company to the filing of such petition or to the appointment of
or the taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or the making
by the Company of an assignment for the benefit of creditors, or
the admission by the Company in writing of its inability to pay
its debts generally as they become due, or the taking of
corporate action by the Company expressly in furtherance of any
such action.
Section 4.2 Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default with respect to Outstanding
Securities (other than an Event of Default specified in Section
4.1(f) or 4.1(g) hereof) occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities, by written notice to the Company, may
declare due and payable 100% of the principal amount of all
Outstanding Securities plus any accrued and unpaid interest to
the date of payment. Upon a declaration of acceleration, such
principal and accrued and unpaid interest to the date of payment
shall be immediately due and payable.
If an Event of Default specified in Section 4.1(f) or 4.1(g)
hereof occurs, all unpaid principal and accrued and unpaid
interest (including Liquidated Damages, if any) on the
Outstanding Securities shall become and be immediately due and
payable, without any declaration or other act on the part of the
Trustee or any Holder.
The Holders of a majority in aggregate principal amount of
the Outstanding Securities by written notice to the Trustee may
rescind and annul an acceleration and its consequences if:
(1) all existing Events of Default, other than the nonpayment of
principal of or interest on the Securities which have become due
solely because of the acceleration, have been remedied, cured or
waived, and
(2) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction;
provided, however, that in the event such declaration of
acceleration has been made based on the existence of an Event of
Default under Section 4.1(e) hereof and such Event of Default has
been remedied, cured or waived in accordance with Section 4.1(e)
hereof, then, without any further action by the Holders, such
declaration of acceleration shall be rescinded automatically and
<PAGE>
the consequences of such declaration shall be annulled. No such
rescission or annulment shall affect any subsequent Default or
impair any right consequent thereon.
Section 4.3 Other Remedies.
If an Event of Default with respect to Outstanding
Securities occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to
enforce the performance of any provision of the Securities.
The Trustee may maintain a proceeding in which it may
prosecute and enforce all rights of action and claims under this
Indenture or the Securities, even if it does not possess any of
the Securities or does not produce any of them in the proceeding.
Section 4.4 Waiver of Past Defaults.
The Holders, either (a) through the written consent of not
less than a majority in aggregate principal amount of the
Outstanding Securities or (b) by the adoption of a resolution, at
a meeting of Holders of the Outstanding Securities at which a
quorum is present, by the Holders of at least a majority in
aggregate principal amount of the Outstanding Securities
represented at such meeting, may, on behalf of the Holders of all
of the Securities, waive an existing Default or Event of Default,
except a Default or Event of Default:
(1) in the payment of the principal of or premium, if any, or
interest (including Liquidated Damages, if any) on any Security
(provided, however, that subject to Section 4.7 hereof, the
Holders of a majority in aggregate principal amount of the
Outstanding Securities may rescind an acceleration and its
consequences, including any related payment default that resulted
from such acceleration);
(2) in respect of the right to convert any Security in
accordance with Article 12; or
(3) in respect of a covenant or provision hereof which, under
Section 7.2 hereof, cannot be modified or amended without the
consent of the Holders of each Outstanding Security affected.
Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have
been cured, for every purpose of this Indenture; provided,
however, that no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 4.5 Control by Majority.
The Holders, either (a) through the written consent of not
less than a majority in aggregate principal amount of the
Outstanding Securities, or (b) by the adoption of a resolution,
at a meeting of Holders of the Outstanding Securities at which a
quorum is present, by the Holders of at least a majority in
aggregate principal amount of the Outstanding Securities
represented at such meeting, shall have the right to direct the
time, method and place of
<PAGE>
conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that:
(1) conflicts with any law or with this Indenture;
(2) the Trustee determines may be unduly prejudicial to the
rights of the Holders not joining therein, or
(3) may expose the Trustee to personal liability.
The Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 4.6 Limitation on Suit.
No Holder of any Security shall have any right to pursue any
remedy with respect to this indenture or the Securities
(including, instituting any proceeding, judicial or otherwise,
with respect to this Indenture or for the appointment of a
receiver or trustee) unless:
(1) such Holder has previously given written notice to the
Trustee of an Event of Default that is continuing;
(2) the Holders of at least 25% in aggregate principal amount of
the Outstanding Securities shall have made written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders have offered to the Trustee indemnity
satisfactory to it against any costs, expenses and liabilities
incurred in complying with such request;
(4) the Trustee has failed to comply with the request for 60
days after its receipt of such notice, request and offer of
indemnity; and
(5) during such 60-day period, no direction inconsistent with
such written request has been given to the Trustee by the Holders
of a majority in aggregate principal amount of the Outstanding
Securities (or such amount as shall have acted at a meeting
pursuant to the provisions of this Indenture);
provided, however, that no one or more of such Holders may use
this Indenture to prejudice the rights of another Holder or to
obtain preference or priority over another Holder.
Section 4.7 Unconditional Rights of Holders to Receive Payment
and to Convert.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute
and unconditional, to receive payment of the principal of and
premium, if any, and interest (including Liquidated Damages, if
any) on such Security on the Stated Maturity expressed in such
Security (or, in the case of redemption, on the Redemption Date,
or in the case of the exercise of a Repurchase Right, on the
Repurchase Date) and to
<PAGE>
convert such Security in accordance with Article 12, and to bring suit
for the enforcement of any such payment on or after such respective dates
and right to convert, and such rights shall not be impaired or affected
without the consent of such Holder.
Section 4.8 Collection of Indebtedness and Suits for
Enforcement by the Trustee.
The Company covenants that if:
(1) a Default or Event of Default is made in the payment of any
interest (including Liquidated Damages, if any) on any Security
when such interest (including Liquidated Damages, if any) becomes
due and payable and such Default or Event of Default continues
for a period of 30 days, or
(2) a Default or Event of Default is made in the payment of the
principal of or premium, if any, on any Security at the Maturity
thereof,
the Company shall, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then
due and payable (as expressed therein or as a result of any
acceleration effected pursuant to Section 4.2 hereof) on such
Securities for principal and premium, if any, and interest
(including Liquidated Damages, if any) and, to the extent that
payment of such interest shall be legally enforceable, interest
on any overdue principal and premium, if any, and on any overdue
interest (including Liquidated Damages, if any), calculated using
the Interest Rate, and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express
trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid, may prosecute such proceeding to
judgment or final decree and may enforce the same against the
Company and collect the moneys adjudged or decreed to be payable
in the manner provided by law out of the property of the Company,
wherever situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights
and the rights of the Holders of Securities by such appropriate
judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
Section 4.9 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company
or the property of the Company or its creditors, the Trustee
(irrespective of whether the principal of the Securities shall
then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal or
interest (including Liquidated Damages, if any)) shall be
entitled and empowered, by intervention in such proceeding or
otherwise,
<PAGE>
(1) to file and prove a claim for the whole amount of principal
and premium, if any, and interest (including Liquidated Damages,
if any) owing and unpaid in respect of the Securities and to file
such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the
Holders of Securities allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable
or deliverable on any such claim and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial
proceedings is hereby authorized by each Holder of Securities to
make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to
the Holders of Securities, to pay to the Trustee any amount due
to it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel and any other
amounts due the Trustee under Section 5.8.
Nothing contained herein shall be deemed to authorize the
Trustee to authorize or consent to or accept, or adopt on behalf
of any Holder of a Security, any plan of reorganization,
arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee
to vote in respect of the claim of any Holder of a Security in
any such proceeding.
Section 4.10 Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security has instituted
any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned
for any reason, or has been determined adversely to the Trustee
or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and
the Holders of Securities shall be restored severally and
respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
Section 4.11 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in
the last paragraph of Section 2.12, no right or remedy conferred
in this Indenture upon or reserved to the Trustee or to the
Holders of Securities is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or hereafter existing at law or
in equity or otherwise. The assertion or employment of any right
or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right
or remedy.
<PAGE>
Section 4.12 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or any acquiescence therein.
Every right and remedy given by this Article or by law to the
Trustee or to the Holders of Securities may be exercised from
time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Securities, as the case may be.
Section 4.13 Application of Money Collected.
Subject to Article 13, any money and property collected by
the Trustee pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money and property on account
of principal or premium, if any, or interest (including
Liquidated Damages, if any), upon presentation of the Securities
and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee;
SECOND: To the payment of the amounts then due and
unpaid for principal of and premium, if any, and interest
(including Liquidated Damages, if any) on the Securities and
coupons in respect of which or for the benefit of which such
money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and
payable on such Securities for principal and premium, if
any, and interest (including Liquidated Damages, if any),
respectively; and
THIRD: Any remaining amounts shall be repaid to the
Company.
Section 4.14 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by such Holder's acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against
any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to
any suit instituted by the Company, to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in aggregate
principal amount of the Outstanding Securities, or to any suit
instituted by any Holder of any Security for the enforcement of
the payment of the principal of or premium, if any, or interest
(including Liquidated Damages, if any) on any Security on or
after the Stated Maturity expressed in such Security (or, in the
case of redemption or exercise of a Repurchase Right, on or after
the Redemption Date) or for the enforcement of the right to
convert any Security in accordance with Article 12.
<PAGE>
Section 4.15 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim to take the benefit or advantage of, any
stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
<PAGE>
ARTICLE 5
THE TRUSTEE
Section 5.1 Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) The Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture or the
TIA, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; provided, however, that in the
case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee,
the Trustee shall examine the certificates or opinions to
determine whether or not, on their face, they conform to the
requirements to this Indenture (but need not investigate or
confirm the accuracy of any facts stated therein).
(b) In case an Event of Default actually known to a Responsible
Officer of the Trustee has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except
that:
(1) This paragraph (c) shall not be construed to limit the
effect of paragraph (a) of this Section 5.1;
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(3) The Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance
with a direction received by it of the Holders of a majority in
principal amount of the Outstanding Securities (or such lesser
amount as shall have acted at a meeting pursuant to the
provisions of this Indenture) relating to the time, method and
place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture.
<PAGE>
(d) Whether or not herein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 5.1.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any liability in
the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers. The Trustee may refuse
to perform any duty or exercise any right or power unless it
receives indemnity satisfactory to it against any loss,
liability, cost or expense (including, without limitation,
reasonable fees of counsel).
(f) The Trustee shall not be obligated to pay interest on any
money or other assets received by it unless otherwise agreed in
writing with the Company. Assets held in trust by the Trustee
need not be segregated from other funds except to the extent
required by law.
(g) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, coupon, other
evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records
and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or
additional liability of any kind by reason of such inquiry or
investigation.
(h) The Trustee shall not be deemed to have notice or actual
knowledge of any Event of Default or a Registration Default (as
such term is defined in the Registration Rights Agreement) or the
obligation of the Company to pay Liquidated Damages unless a
Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact a Default
is received by the Trustee pursuant to Section 14.2 hereof, and
such notice references the Securities and this Indenture.
(i) The rights, privileges, protections, immunities and benefits
given to the Trustee hereunder, including, without limitation,
its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder,
and each Paying Agent, authenticating agent, Conversion Agent or
Registrar acting hereunder.
Section 5.2 Certain Rights of Trustee.
Subject to the provisions of Section 5.1 hereof and subject
to Sections 315(a) through (d) of the TIA:
(1) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter
stated in the document.
(2) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, or
both. The Trustee shall not be liable
<PAGE>
for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel
(3) The Trustee may act through attorneys and agents and shall
not be responsible for the misconduct or negligence of any
attorney or agent appointed with due care.
(4) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith which it believed to be
authorized or within the discretion or rights or powers conferred
upon it by this Indenture, unless the Trustee's conduct
constitutes negligence.
(5) The Trustee may consult with counsel of its selection and
the advice of such counsel as to matters of law shall be full and
complete authorization and protection in respect of any action
taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(6) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall
be sufficient if signed by an Officer of the Company.
(7) The permissive rights of the Trustee to do things enumerated
in this Indenture shall not be construed as a duty unless so
specified herein.
Section 5.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Securities and may otherwise deal
with the Company or any Affiliate of the Company with the same
rights it would have if it were not Trustee. However, in the
event that the Trustee acquires any conflicting interest (as such
term is defined in Section 310(b) of the TIA), it must eliminate
such conflict within 90 days, apply to the SEC for permission to
continue as trustee (to the extent permitted under Section 310(b)
of the TIA) or resign. Any agent may do the same with like
rights and duties. The Trustee is also subject to Sections 5.11
and 5.12 hereof.
Section 5.4 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law.
The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise expressly agreed
with the Company.
Section 5.5 Trustee's Disclaimer.
The recitals contained herein and in the Securities (except
for those in the certificate of authentication) shall be taken as
the statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no
representations as to the validity, sufficiency or priority of
this Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Company of
Securities or the proceeds thereof.
<PAGE>
Section 5.6 Notice of Defaults.
Within 90 days after the occurrence of any Default or Event
of Default hereunder of which the Trustee has received written
notice, the Trustee shall give notice to Holders pursuant to
Section 14.2 hereof, unless such Default or Event of Default
shall have been cured or waived; provided, however, that, except
in the case of a Default or Event of Default in the payment of
the principal of or premium, if any, or interest (including
Liquidated Damages, if any), or in the payment of any redemption
or repurchase obligation on any Security, the Trustee shall be
protected in withholding such notice if and so long as
Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interest of the Holders.
Section 5.7 Reports by Trustee to Holders.
The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as
may be required by Section 313 of the TIA at the times and in the
manner provided by the TIA.
A copy of each report at the time of its mailing to Holders
shall be filed with the SEC, if required, and each stock
exchange, if any, on which the Securities are listed. The
Company shall promptly notify the Trustee when the Securities
become listed on any stock exchange.
Section 5.8 Compensation and Indemnification.
The Company covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, reasonable
compensation (which shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust)
and the Company covenants and agrees to pay or reimburse the
Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by or on behalf of it
in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other persons
not regularly in its employ), except to the extent that any such
expense, disbursement or advance is due to its negligence or bad
faith. When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 4.1
hereof, the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for the services
are intended to constitute expenses of administration under any
Bankruptcy Law. The Company also covenants to indemnify the
Trustee and its officers, directors, employees and agents for,
and to hold such Persons harmless against, any loss, liability or
expense incurred by them, arising out of or in connection with
the acceptance or administration of this Indenture or the trusts
hereunder or the performance of their duties hereunder, including
the costs and expenses of defending themselves against or
investigating any claim of liability in the premises, except to
the extent that any such loss, liability or expense was due to
the negligence or willful misconduct of such Persons. The
obligations of the Company under this Section 5.8 to compensate
and indemnify the Trustee and its officers, directors, employees
and agents and to pay or reimburse such Persons for expenses,
disbursements and advances shall constitute additional
indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture or the earlier resignation or removal
of the Trustee. Such additional indebtedness shall be a senior
claim to that of the Securities upon all property and funds held
or collected by the Trustee as such, except funds held in trust
for the
<PAGE>
benefit of the Holders of particular Securities, and the
Securities are hereby subordinated to such senior claim.
"Trustee" for purposes of this Section 5.8 shall include any
predecessor Trustee, but the negligence or willful misconduct of
any Trustee shall not affect the indemnification of any other
Trustee.
Section 5.9 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor
Trustee's acceptance of appointment as provided in this Section
5.9.
The Trustee may resign and be discharged from the trust
hereby created by so notifying the Company in writing. The
Holders of at least a majority in aggregate principal amount of
Outstanding Securities may remove the Trustee by so notifying the
Trustee and the Company in writing. The Company must remove the
Trustee if:
(i) the Trustee fails to comply with Section 5.11 hereof or
Section 310 of the TIA;
(ii) the Trustee becomes incapable of acting.
(iii) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under
any Bankruptcy Law; or
(iv) a Custodian or public officer takes charge of the Trustee or
its property.
If the Trustee resigns or is removed or if a vacancy exists
in the office of the Trustee for any reason, the Company shall
promptly appoint a successor Trustee. The Trustee shall be
entitled to payment of its fees and reimbursement of its expenses
while acting as Trustee. Within one year after the successor
Trustee takes office, the Holders of at least a majority in
aggregate principal amount of Outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by
the Company.
Any Holder may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor
Trustee if the Trustee fails to comply with Section 5.11 hereof.
If an instrument of acceptance by a successor Trustee shall
not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation or removal, the resigning or
removed Trustee, as the case may be, may petition, at the expense
of the Company, any court of competent jurisdiction for the
appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company.
Thereupon the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all
the rights, powers and duties of the Trustee under this
Indenture. The Company shall mail a notice of the successor
Trustee's succession to the Holders. The retiring Trustee shall
promptly transfer all property held by it as
<PAGE>
Trustee to the successor Trustee. Notwithstanding replacement of the
Trustee pursuant to this Section 5.9, the Company's obligations under
Section 5.8 hereof shall continue for the benefit of the retiring
Trustee with respect to expenses, losses and liabilities incurred
by it prior to such replacement.
Section 5.10 Successor Trustee by Merger, Etc.
Subject to Section 5.11 hereof, if the Trustee consolidates
with, merges or converts into, or transfers or sells all or
substantially all of its corporate trust business to, another
corporation or national banking association, the successor entity
without any further act shall be the successor Trustee as to the
Securities.
Section 5.11 Corporate Trustee Required; Eligibility.
The Trustee shall at all times satisfy the requirements of
Sections 310(a)(1), (2) and (5) of the TIA. The Trustee shall at
all times have (or, in the case of a corporation included in a
bank holding company system, the related bank holding company
shall at all times have), a combined capital and surplus of at
least $100 million as set forth in its (or its related bank
holding company's) most recent published annual report of
condition. The Trustee is subject to Section 310(b) of the TIA.
Section 5.12 Collection of Claims Against the Company.
The Trustee is subject to Section 311(a) of the TIA,
excluding any creditor relationship listed in Section 311(b) of
the TIA. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the TIA to the extent indicated
therein.
<PAGE>
ARTICLE 6
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 6.1 Company May Consolidate, Etc., Only on Certain
Terms.
The Company shall not consolidate with or merge into any
other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and the
Company shall not permit any Person to consolidate with or merge
into the Company or convey, transfer or lease its properties and
assets substantially as an entirety to the Company, unless:
(1) in the event that the Company shall consolidate with or
merge into another Person or convey, transfer or lease its
properties and assets substantially as an entirety to any Person,
the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, limited
liability company, partnership or trust organized and validly
existing under the laws of the United States of America, any
State thereof or the District of Columbia and, if the entity
surviving such transaction or transferee entity is not the
Company, then such surviving or transferee entity shall expressly
assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee,
the due and punctual payment of the principal of and premium, if
any and interest (including Liquidated Damages, if any), on all
the Securities and the performance of every covenant of this
Indenture on the party of the Company to be performed or observed
and shall have provided for conversion rights in accordance with
Section 12.11 hereof;
(2) at the time of consummation of such transaction, no Event of
Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have happened and
be continuing; and
(3) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this Article
and that all conditions precedent herein provided for relating to
such transaction have been complied with.
Section 6.2 Successor Substituted.
Upon any consolidation or merger by the Company with or into
any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety
to any Person, in accordance with Section 6.1 hereof, the
successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease
is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this
Indenture with the same effect as if such successor Person had
been named as the Company herein, and thereafter, except in the
case of a lease to another Person, the
<PAGE>
predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities.
<PAGE>
ARTICLE 7
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 7.1 Without Consent of Holders of Securities.
Without the consent of any Holders of Securities, the
Company, when authorized by a Board Resolution, and the Trustee,
at any time and from time to time, may amend this Indenture and
the Securities to:
(a) add to the covenants of the Company for the benefit of the
Holders of Securities;
(b) surrender any right or power herein conferred upon the
Company;
(c) make provision with respect to the conversion rights of
Holders of Securities pursuant to Section 12.11 hereof;
(d) provide for the assumption of the Company's obligations to
the Holders of Securities in the case of a merger, consolidation,
conveyance, transfer or lease pursuant to Article 6 hereof;
(e) reduce the Conversion Price; provided, that such reduction
in the Conversion Price shall not adversely affect the interest
of the Holders of Securities (after taking into account tax and
other consequences of such reduction) in any material respect;
(f) comply with the requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA;
(g) make any changes or modifications to this Indenture
necessary in connection with the registration of any Securities
under the Securities Act as contemplated in the Registration
Rights Agreement, provided that such action pursuant to this
clause (g) does not adversely affect the interests of the Holders
of Securities in any material respect;
(h) cure any ambiguity, correct or supplement any provision
herein which may be inconsistent with any other provision herein
or which is otherwise defective, or make any other provisions
with respect to matters or questions arising under this Indenture
which the Company and the Trustee may deem necessary or desirable
and which shall not be inconsistent with the provisions of this
Indenture, provided that such action pursuant to this clause (h)
does not, in the good faith opinion of the Board of Directors and
the Trustee, adversely affect the interests of the Holders of
Securities in any material respect;
(i) add or modify any other provisions with respect to matters
or questions arising under this Indenture which the Company and
the Trustee may deem necessary or desirable and which shall not
be inconsistent with the provisions of this Indenture, provided
that such action pursuant to this clause (i) does not adversely
affect the interests of the Holders of Securities in any material
respect; or
<PAGE>
(j) make provision for the establishment of a book-entry system,
in which Holders would have the option to participate, for the
clearance and settlement of transactions in Securities originally
issued in definitive form.
Section 7.2 With Consent of Holders of Securities.
Except as provided below in this Section 7.2, this Indenture
or the Securities may be amended or supplemented, and
noncompliance by the Company in any particular instance with any
provision of this Indenture or the Securities may be waived, in
each case (i) with the written consent of the Holders of at least
a majority in aggregate principal amount of the Outstanding
Securities or (ii) by the adoption of a resolution, at a meeting
of Holders of the Outstanding Securities at which a quorum is
present, by the Holders of a majority in aggregate principal
amount of the Outstanding Securities represented at such meeting.
Without the written consent or the affirmative vote of each
Holder of Securities affected, an amendment or waiver under this
Section 7.2 may not:
(a) change the Stated Maturity of the principal of, or any
installment of interest (including Liquidated Damages, if any)
on, any Security;
(b) reduce the principal amount of, or premium, if any, on any
Security;
(c) reduce the Interest Rate or interest (including Liquidated
Damages, if any) on any Security;
(d) change the currency of payment of principal of, premium, if
any, or interest (including Liquidated Damages, if any) on any
Security;
(e) impair the right of any Holder to institute suit for the
enforcement of any payment on or with respect to, or the
conversion of, any Security;
(f) modify the obligation of the Company to maintain an office
or agency in The City of New York pursuant to Section 9.2 hereof;
(g) except as permitted by Section 12.11 hereof, adversely
affect the right to convert any Security as provided in Article
12 hereof;
(h) adversely affect the Repurchase Right;
(i) modify the subordination provisions of the Securities
in a manner adverse to the Holders of Securities,
(j) modify any of the provisions of this Section, Section
4.4 or Section 14.11, except to increase any percentage contained
herein or therein or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent
of the Holder of each Outstanding Security affected thereby; or
<PAGE>
(k) reduce the requirements of Section 8.4 hereof for
quorum or voting, or reduce the percentage in aggregate principal
amount of the Outstanding Securities the consent of whose Holders
is required for any such supplemental indenture or the consent of
whose Holders is required for any waiver provided for in this
Indenture.
It shall not be necessary for any Act of Holders of
Securities under this Section to approve the particular form of
any proposal supplemental indenture, but it shall be sufficient
if such Act shall approve the substance thereof.
Section 7.3 Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities shall be
set forth in a supplemental indenture that complies with the TIA
as then in effect.
Section 7.4 Revocation of Consents and Effect of Consents or
Votes.
Until an amendment, supplement or waiver becomes effective,
a written consent to it by a Holder is a continuing consent by
the Holder and every subsequent Holder of a Security or portion
of a Security that evidences the same debt as the consenting
Holder's Security, even if notation of the consent is not made on
any Security; provided, however, that unless a record date shall
have been established, any such Holder or subsequent Holder may
revoke the consent as to its Security or portion of a Security if
the Trustee receives written notice of revocation before the date
the amendment, supplement or waiver becomes effective.
An amendment, supplement or waiver becomes effective on
receipt by the Trustee of written consents from or affirmative
votes by, as the case may be, the Holders of the requisite
percentage of aggregate principal amount of the Outstanding
Securities, and thereafter shall bind every Holder of Securities;
provided, however, if the amendment, supplement or waiver makes a
change described in any of the clauses (a) through (k) of Section
7.2 hereof, the amendment, supplement or waiver shall bind only
each Holder of a Security which has consented to it or voted for
it, as the case may be, and every subsequent Holder of a Security
or portion of a Security that evidences the same indebtedness as
the Security of the consenting or affirmatively voting, as the
case may be, Holder.
Section 7.5 Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security:
(a) the Trustee may require the Holder of a Security to deliver
such Securities to the Trustee, the Trustee may place an
appropriate notation on the Security about the changed terms and
return it to the Holder and the Trustee may place an appropriate
notation on any Security thereafter authenticated; or
(b) if the Company or the Trustee so determines, the Company in
exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms.
<PAGE>
Failure to make the appropriate notation or issue a new
Security shall not affect the validity and effect of such
amendment, supplement or waiver.
Section 7.6 Trustee to Sign Amendment, Etc.
The Trustee shall sign any amendment authorized pursuant to
this Article 7 if the amendment does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If the
amendment does adversely affect the rights, duties, liabilities
or immunities of the Trustee, the Trustee may but need not sign
it. In signing or refusing to sign such amendment, the Trustee
shall be entitled to receive and shall be fully protected in
relying upon an Officers' Certificate and an Opinion of Counsel
as conclusive evidence that such amendment is authorized or
permitted by this Indenture.
<PAGE>
ARTICLE 8
MEETING OF HOLDERS OF SECURITIES
Section 8.1 Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities may be called at any time
and from time to time pursuant to this Article to make, give or
take any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be
made, given or taken by Holders of Securities.
Notwithstanding anything contained in this Article 8, the
Trustee may, during the pendency of a Default or an Event of
Default, call a meeting of Holders of Securities in accordance
with its standard practices.
Section 8.2 Call Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities for any purpose specified in Section 8.1 hereof, to be
held at such time and at such place in The City of New York.
Notice of every meeting of Holders of Securities, setting forth
the time and the place of such meeting, in general terms the
action proposed to be taken at such meeting and the percentage of
the principal amount of the Outstanding Securities which shall
constitute a quorum at such meeting, shall be given, in the
manner provided in Section 14.2 hereof, not less than 21 nor more
than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of
the Outstanding Securities shall have requested the Trustee to
call a meeting of the Holders of Securities for any purpose
specified in Section 8.1 hereof, by written request setting forth
in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have made the first
publication of the notice of such meeting within 21 days after
receipt of such request or shall not thereafter proceed to cause
the meeting to be held as provided herein, then the Company or
the Holders of Securities in the amount specified, as the case
may be, may determine the time and the place in The City of New
York for such meeting and may call such meeting for such purposes
by giving notice thereof as provided in paragraph (a) of this
Section.
Section 8.3 Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of
Securities, a Person shall be (a) a Holder of one or more
Outstanding Securities or (b) a Person appointed by an instrument
in writing as proxy for a Holder or Holders of one or more
Outstanding Securities by such Holder or Holders. The only
Persons who shall be entitled to be present or to speak at any
meeting of Holders shall be the Persons entitled to vote at such
meeting and their counsel, any representatives of the Trustee and
its counsel and any representatives of the Company and its
counsel.
<PAGE>
Section 8.4 Quorum; Action.
The Persons entitled to vote a majority in principal amount
of the Outstanding Securities shall constitute a quorum. In the
absence of a quorum within 30 minutes of the time appointed for
any such meeting, the meeting shall, if convened at the request
of Holders of Securities, be dissolved. In any other case, the
meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any
such adjourned meeting, such adjourned meeting may be further
adjourned for a period of not less than 10 days as determined by
the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned
meeting shall be given as provided in Section 8.2(a) hereof,
except that such notice need be given only once and not less than
five days prior to the date on which the meeting is scheduled to
be reconvened.
At a meeting or an adjourned meeting duly reconvened and at
which a quorum is present as aforesaid, any resolution and all
matters (except as limited by the second paragraph of Section 7.2
hereof) shall be effectively passed and decided if passed or
decided by the Persons entitled to vote not less than a majority
in principal amount of Outstanding Securities represented and
voting at such meeting.
Any resolution passed or decisions taken at any meeting of
Holders of Securities duly held in accordance with this Section
shall be binding on all the Holders of Securities, whether or not
present or represented at the meeting.
Section 8.5 Determination of Voting Rights; Conduct and
Adjournment of Meetings.
(a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders of Securities in regard to
proof of the holding of Securities and of the appointment of
proxies and in regard to the appointment and duties of inspectors
of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall deem
appropriate.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman (which may be the Trustee) of the meeting,
unless the meeting shall have been called by the Company or by
Holders of Securities as provided in Section 8.2(b) hereof, in
which case the Company or the Holders of Securities calling the
meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in principal amount of the
Outstanding Securities represented at the meeting.
(c) At any meeting, each Holder of a Security or proxy shall be
entitled to one vote for each $1,000 principal amount of
Securities held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any
Security challenged as not Outstanding and ruled by the chairman
of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a
Security or proxy.
<PAGE>
(d) Any meeting of Holders of Securities duly called pursuant to
Section 8.2 hereof at which a quorum is present may be adjourned
from time to time by Persons entitled to vote a majority in
principal amount of the Outstanding Securities represented at the
meeting, and the meeting may be held as so adjourned without
further notice.
Section 8.6 Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of
Holders of Securities shall be by written ballots on which shall
be subscribed the signatures of the Holders of Securities or of
their representatives by proxy and the principal amounts and
serial numbers of the Outstanding Securities held or represented
by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record, at least
in duplicate, of the proceedings of each meeting of Holders of
Securities shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more Persons having knowledge of the facts
setting forth a copy of the notice of the meeting and showing
that said notice was given as provided in Section 8.2 hereof and,
if applicable, Section 8.4 hereof. Each copy shall be signed and
verified by the affidavits of the permanent chairman and
secretary of the meeting and one such copy shall be delivered to
the Company and another to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at
the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
<PAGE>
ARTICLE 9
COVENANTS
Section 9.1 Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of
and premium, if any, and interest (including Liquidated Damages,
if any) in respect of the Securities in accordance with the terms
of the Securities and this Indenture. The Company will deposit
or cause to be deposited with the Trustee as directed by the
Trustee, no later than the day of the Stated Maturity of any
Security or installment of interest (including Liquidated
Damages, if any), all payments so due.
Section 9.2 Maintenance of Offices or Agencies.
The Company hereby appoints the Trustee's Corporate Trust
Office as its office in The City of New York, where Securities
may be:
(i) presented or surrendered for payment;
(ii) surrendered for registration of transfer or exchange;
(iii) surrendered for conversion;
and where notices and demands to or upon the Company in respect
of the Securities and this Indenture maybe served.
The Company may at any time and from time to time vary or
terminate the appointment of any such office or appoint any
additional offices for any or all of such purposes; provided,
however, that until all of the Securities have been delivered to
the Trustee for cancellation, or moneys sufficient to pay the
principal of and premium, if any, and interest (including
Liquidated Damages, if any) on the Securities have been made
available for payment and either paid or returned to the Company
pursuant to the provisions of Section 9.3 hereof, the Company
will maintain in The City of New York, an office or agency where
Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer or
exchange, where Securities may be surrendered for conversion and
where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Company
will give prompt written notice to the Trustee, and notice to the
Holders in accordance with Section 14.2 hereof, of the
appointment or termination of any such agents and of the location
and any change in the location of any such office or agency.
If at any time the Company shall fail to maintain any such
required office or agency in The City of New York, or shall fail
to furnish the Trustee with the address thereof, presentations
and surrenders may be made at, and notices and demands may be
served on, the Corporate Trust Office of the Trustee.
<PAGE>
Section 9.3 Corporate Existence.
Subject to Article 6 hereof, the Company will do or cause to
be done all things necessary to preserve and keep in full force
and effect its corporate existence, rights (charter and
statutory) and franchises; provided, however, that the Company
shall not be required to preserve any such right or franchise if
the Company determines that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that
the loss thereof is not disadvantageous in any material respect
to the Holders.
Section 9.4 Maintenance of Properties.
The Company will maintain and keep its properties and every
part thereof in such repair, working order and condition, and
make or cause to be made all such needful and proper repairs,
renewals and replacements thereto, as in the judgment of the
Company are necessary in the interests of the Company; provided,
however, that nothing contained in this Section shall prevent the
Company from selling, abandoning or otherwise disposing of any of
its properties or discontinuing a part of its business from time
to time if, in the judgment of the Company, such sale,
abandonment, disposition or discontinuance is advisable and does
not materially adversely affect the interests or business of the
Company.
Section 9.5 Payment of Taxes and Other Claims.
The Company will, and will cause any Significant Subsidiary
to, promptly pay and discharge or cause to be paid and discharged
all material taxes, assessments and governmental charges or
levies lawfully imposed upon it or upon its income or profits or
upon any of its property, real or personal, or upon any part
thereof, as well as all material claims for labor, materials and
supplies which, if unpaid, might by law become a lien or charge
upon its property; provided, however, that neither the Company
nor any Significant Subsidiary shall be required to pay or
discharge or cause to be paid or discharged any such tax,
assessment, charge, levy, or claim if the amount, applicability
or validity thereof shall currently be contested in good faith by
appropriate proceedings and if the Company or such Significant
Subsidiary, as the case may be, shall have set aside on its books
reserves deemed by it adequate with respect thereto.
Section 9.6 Reports.
(a) The Company shall deliver to the Trustee within 15 days
after it files them with the SEC copies of the annual reports and
of the information, documents, and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) which the Company is required to file with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act;
provided, however, the Company shall not be required to deliver
to the Trustee any materials for which the Company has sought and
received confidential treatment by the SEC. The Company also
shall comply with the other provisions of Section 314(a) of the
TIA.
(b) If at any time the Company is not subject to Section 13 or
15(d) of the Exchange Act, upon the request of a Holder of a
Security, the Company will promptly furnish or cause to be
furnished to such Holder or to a prospective purchaser of such
Security designated by such Holder, as the case may be, the
information, if any, required to be delivered by it pursuant to
<PAGE>
Rule 144A(d)(4) under the Securities Act to permit compliance
with Rule 144A in connection with the resale of such Security;
provided, however, that the Company shall not be required to
furnish such information in connection with any request made on
or after the date which is two years from the later of the date
such security was last acquired from the Company or an Affiliate
of the Company.
Section 9.7 Compliance Certificate.
The Company shall deliver to the Trustee, within 90 days
after the end of each fiscal year of the Company, an Officers'
Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company, they would
normally have knowledge of any failure by the Company to comply
with all conditions, or Default by the Company with respect to
any covenants, under this Indenture, and further stating whether
or not they have knowledge of any such failure or default and, if
so, specifying each such failure or Default and the nature
thereof. Within five Business Days of an Officer of the Company
coming to have actual knowledge of a Default, regardless of the
date, the Company shall deliver an Officers' Certificate to the
Trustee specifying such Default and the nature and status
thereof.
Section 9.8 Resale of Certain Securities.
During the period of two years after the last date of
original issuance of any Securities, the Company shall not, and
shall not permit any of its Affiliates to, resell any Securities,
or shares of Common Stock issuable upon conversion of the
Securities, which constitute "restricted securities" under Rule
144, that are acquired by any of them within the United States or
to "U.S. persons" (as defined in Regulation S) except pursuant to
an effective registration statement under the Securities Act or
an applicable exemption therefrom. The Trustee shall have no
responsibility or liability in respect of the Company's
performance of its agreement in the preceding sentence.
<PAGE>
ARTICLE 10
REDEMPTION OF SECURITIES
Section 10.1 Provisional Redemption.
Any time prior to March 7, 2003, the Company may, at its
option, redeem the Securities in whole or in part on any date
from time to time, upon notice as set forth in Section 10.5, at a
redemption price equal to $1,000 per $1,000 principal amount of
the Securities redeemed plus accrued and unpaid interest, if any
(such amount, together with the Make-Whole Payment described
below, the "Provisional Redemption Price"), to but excluding the
date of redemption (the "Provisional Redemption Date") if (i) the
Closing Price of the Common Stock has exceeded 150% of the
Conversion Price (as defined in Article 12 and as such may be
adjusted from time to time) then in effect for at least 20
Trading Days in any consecutive 30-Trading Day period ending on
the Trading Day prior to the date of mailing of the provisional
notice of redemption pursuant to Section 10.5 (the "Notice Date")
and (ii) a registration statement covering resales of the
Securities and the Common Stock issuable upon conversion thereof
is effective and available for use and is expected to remain
effective for the 30 days following the Provisional Redemption
Date.
Upon any such Provisional Redemption, the Company shall make
an additional payment in cash (the "Make-Whole Payment") with
respect to the Securities called for redemption to Holders on the
Notice Date in an amount equal to $107.14 per $1,000 principal
amount of the Securities, less the amount of any interest
actually paid on such Securities prior to the Notice Date. The
Company shall make the Make-Whole Payment on all Securities
called for Provisional Redemption, including those Securities
converted into Common Stock between the Notice Date and the
Provisional Redemption Date.
Section 10.2 Optional Redemption.
Except as set forth under Section 10.1, the Securities are
not redeemable prior to March 7, 2003. On and after March 7,
2003, the Company may, at its option, redeem the Securities in
whole at any time or in part from time to time, on any date prior
to maturity, upon notice as set forth in Section 10.5, at the
redemption price (expressed as percentages of the principal
amount) set forth below if redeemed during the 12-month period
beginning March 7 of the years indicated and ending March 6 of
the following year:
Redemption Price
March 7, 2003 through March 6, 2004 102.714%
March 7, 2004 through March 6, 2005 102.036%
March 7, 2005 through March 6, 2006 101.357%
March 7, 2006 and thereafter 100.679%
<PAGE>
(the "Optional Redemption Price"), plus any interest accrued but
not paid prior to the Optional Redemption Date.
Section 10.3 Notice to Trustee.
If the Company elects to redeem Securities pursuant to the
redemption provisions of Section 10.1 or Section 10.2 hereof, it
shall notify the Trustee at least 30 days prior to the Redemption
Date of such intended Redemption Date, the principal amount of
Securities to be redeemed and the CUSIP numbers of the Securities
to be redeemed.
Section 10.4 Selection of Securities to Be Redeemed.
If fewer than all the Securities are to be redeemed, the
Trustee shall select the particular Securities to be redeemed
from the Outstanding Securities by a method that complies with
the requirements of any exchange on which the Securities are
listed, or, if the Securities are not listed on an exchange, on a
pro rata basis or by lot or in accordance with any other method
the Trustee considers fair and appropriate. Securities and
portions thereof that the Trustee selects shall be in amounts
equal to the minimum authorized denominations for Securities to
be redeemed or any integral multiple thereof.
If any Security selected for partial redemption is converted
in part before termination of the conversion right with respect
to the portion of the Security so selected, the converted portion
of such Security shall be deemed to be the portion selected for
redemption (provided, however, that the Holder of such Security
so converted and deemed redeemed shall not be entitled to any
additional interest payment as a result of such deemed redemption
than such Holder would have otherwise been entitled to receive
upon conversion of such Security). Securities which have been
converted during a selection of Securities to be redeemed may be
treated by the Trustee as Outstanding for the purpose of such
selection.
The Trustee shall promptly notify the Company and the
Registrar in writing of the Securities selected for redemption
and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Securities redeemed
or to be redeemed only in part, to the portion of the principal
amount of such Securities which has been or is to be redeemed.
Section 10.5 Notice of Redemption.
Notice of redemption shall be given in the manner provided
in Section 14.2 hereof to the Holders of Securities to be
redeemed. Such notice shall be given not less than 20 nor more
than 60 days prior to the Redemption Date.
All notices of redemption shall state:
(1) the Redemption Date;
<PAGE>
(2) the Redemption Price and interest accrued and unpaid to the
Redemption Date, if any;
(3) if fewer than all the Outstanding Securities are to be
redeemed, the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities which
will be outstanding after such partial redemption;
(4) that on the Redemption Date the Redemption Price and
interest accrued and unpaid to the Redemption Date, if any, will
become due and payable upon each such Security to be redeemed,
and that interest thereon shall cease to accrue on and after such
date;
(5) the Conversion Price, the date on which the right to convert
the principal of the Securities to be redeemed will terminate and
the places where such Securities may be surrendered for
conversion;
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued and
unpaid interest, if any; and
(7) the CUSIP number of the Securities.
The notice given shall specify the last date on which
exchanges or transfers of Securities may be made pursuant to
Section 2.7 hereof, and shall specify the serial numbers of
Securities and the portions thereof called for redemption.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the
Company's request, by the Trustee in the name of and at the
expense of the Company.
Section 10.6 Effect of Notice of Redemption.
Notice of redemption having been given as provided in
Section 10.5 hereof, the Securities so to be redeemed shall, on
the Redemption Date, become due and payable at the Redemption
Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price and
accrued and unpaid interest) such Securities shall cease to bear
interest. Upon surrender of any such Security for redemption in
accordance with such notice, such Security shall be paid by the
Company at the Redemption Price plus accrued and unpaid interest,
if any; provided, however, that the installments of interest on
Securities whose Stated Maturity is prior to or on the Redemption
Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such on the
relevant Record Date according to their terms and the provisions
of Section 2.1 hereof.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and premium,
if any, shall, until paid, bear interest from the Redemption Date
at the Interest Rate.
<PAGE>
Section 10.7 Deposit of Redemption Price.
Prior to or on any Redemption Date, the Company shall
deposit with the Trustee or with a Paying Agent an amount of
money sufficient to pay the Redemption Price of all the
Securities to be redeemed on that Redemption Date, other than any
Securities called for redemption on that date which have been
converted prior to the date of such deposit, and accrued and
unpaid interest, if any, on such Securities.
If any Security called for redemption is converted, any
money deposited with the Trustee or with a Paying Agent or so
segregated and held in trust for the redemption of such Security
shall (subject to any right of the Holder of such Security or any
Predecessor Security to receive interest as provided in the
fourth to last paragraph of Section 2.1 hereof) be paid to the
Company on Company Request or, if then held by the Company, shall
be discharged from such trust.
Section 10.8 Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for
that purpose pursuant to Section 9.2 hereof (with, if the Company
or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or the Holder's
attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or
Securities of any authorized denomination as requested by such
Holder in aggregate principal amount equal to and in exchange for
the unredeemed portion of the principal of the Security so
surrendered.
<PAGE>
ARTICLE 11
REPURCHASE AT THE OPTION OF A HOLDER
UPON A CHANGE OF CONTROL
Section 11.1 Repurchase Right.
In the event that a Change in Control shall occur, each
Holder shall have the right (the "Repurchase Right"), at the
Holder's option, but subject to the provisions of Section 11.2
hereof, to require the Company to repurchase, and upon the
exercise of such right the Company shall repurchase, all of such
Holder's Securities not theretofore called for redemption, or any
portion of the principal amount thereof that is equal to $1,000
or any integral multiple thereof (provided that no single
Security may be repurchased in part unless the portion of the
principal amount of such Security to be Outstanding after such
repurchase is equal to $1,000 or integral multiples thereof), on
the date (the "Repurchase Date") that is 45 days after the date
of the Company Notice at a purchase price equal to 100% of the
principal amount of the Securities to be repurchased (the
"Repurchase Price"), plus interest accrued and unpaid to, but
excluding, the Repurchase Date; provided, however, that
installments of interest on Securities whose Stated Maturity is
prior to or on the Repurchase Date shall be payable to the
Holders of such Securities, or one or more Predecessor
Securities, registered as such on the relevant Record Date
according to their terms and the provisions of Section 2.1
hereof.
Subject to the fulfillment by the Company of the conditions
set forth in Section 11.2 hereof, the Company may elect to pay
the Repurchase Price by delivering the number of shares of Common
Stock equal to (i) the Repurchase Price divided by (ii) 95% of
the average of the Closing Prices per share of Common Stock for
the five consecutive Trading Days immediately preceding and
including the third Trading Day prior to the Repurchase Date.
Whenever in this Indenture (including Sections 2.2, 4.1(a)
and 4.7 hereof) or Exhibit A annexed hereto there is a reference,
in any context, to the principal of any Security as of any time,
such reference shall be deemed to include reference to the
Repurchase Price payable in respect to such Security to the
extent that such Repurchase Price is, was or would be so payable
at such time, and express mention of the Repurchase Price in any
provision of this Indenture shall not be construed as excluding
the Repurchase Price in those provisions of this Indenture when
such express mention is not made; provided, however, that, for
the purposes of Article 13 hereof, such reference shall be deemed
to include reference to the Repurchase Price only to the extent
the Repurchase Price is payable in cash.
Section 11.2 Conditions to the Company's Election to Pay the
Repurchase Price in Common Stock.
(a) The shares of Common Stock to be issued upon repurchase of
Securities hereunder:
(i) shall not require registration under any federal securities
law before such shares may be freely transferable without being
subject to any transfer restrictions under
<PAGE>
the Securities Act upon repurchase or, if such registration is
required, such registration shall be completed and shall become
effective prior to the Repurchase Date; and
(ii) shall not require registration with, or approval of, any
governmental authority under any state law or any other federal
law before shares may be validly issued or delivered upon
repurchase or if such registration is required or such approval
must be obtained, such registration shall be completed or such
approval shall be obtained prior to the Repurchase Date.
(b) The shares of Common Stock to be listed upon repurchase of
Securities hereunder are, or shall have been, approved for
listing on the Nasdaq National Market or the New York Stock
Exchange or listed on another national securities exchange, in
any case, prior to the Repurchase Date.
(c) All shares of Common Stock which may be issued upon
repurchase of Securities will be issued out of the Company's
authorized but unissued Common Stock and will, upon issue, be
duly and validly issued and fully paid and nonassessable and free
of any preemptive or similar rights.
(d) If any of the conditions set forth in clauses (a) through
(d) of this Section 11.2 are not satisfied in accordance with the
terms thereof, the Repurchase Price shall be paid by the Company
only in cash.
Section 11.3 Notices; Method of Exercising Repurchase Right,
Etc.
(a) Unless the Company shall have theretofore called for
redemption all of the Outstanding Securities, prior to or on the
30th day after the occurrence of a Change in Control, the
Company, or, at the written request and expense of the Company
prior to or on the 30th day after such occurrence, the Trustee
shall give to all Holders of Securities notice, in the manner
provided in Section 14.2 hereof, of the occurrence of the Change
of Control and of the Repurchase Right set forth herein arising
as a result thereof (the "Company Notice"). The Company shall
also deliver a copy of such notice of a Repurchase Right to the
Trustee. Each notice of a Repurchase Right shall state:
(1) the Repurchase Date;
(2) the date by which the Repurchase Right must exercised;
(3) the Repurchase Price and accrued and unpaid interest, if
any, and whether the Repurchase Price shall be paid by the
Company in cash or by delivery of shares of Common Stock;
(4) a description of the procedure which a Holder must follow to
exercise a Repurchase Right, and the place or places where such
Securities, are to be surrendered for payment of the Repurchase
Price and accrued and unpaid interest, if any;
(5) that on the Repurchase Date the Repurchase Price and accrued
and unpaid interest, if any, will become due and payable upon
each such Security designated
<PAGE>
by the Holder to be repurchased, and that interest thereon shall cease
to accrue on and after said date;
(6) the Conversion Rate then in effect, the date on which the
right to convert the principal amount of the Securities to be
repurchased will terminate and the place where such Securities
may be surrendered for conversion, and
(7) the place or places where such Securities, together with the
Option to Elect Repayment Upon a Change of Control certificate
included in Exhibit A annexed hereto are to be delivered for
payment of the Repurchase Price and accrued and unpaid interest,
if any.
No failure of the Company to give the foregoing notices or
defect therein shall limit any Holder's right to exercise a
Repurchase Right or affect the validity of the proceedings for
the repurchase of Securities.
If any of the foregoing provisions or other provisions of
this Article 11 are inconsistent with applicable law, such law
shall govern.
(b) To exercise a Repurchase Right, a Holder shall deliver to
the Trustee prior to or on the 30th day after the date of the
Company Notice:
(1) written notice of the Holder's exercise of such right, which
notice shall set forth the name of the Holder, the principal
amount of the Securities to be repurchased (and, if any Security
is to be repurchased in part, the serial number thereof, the
portion of the principal amount thereof to be repurchased) and a
statement that an election to exercise the Repurchase Right is
being made thereby, and, in the event that the Repurchase Price
shall be paid in shares of Common Stock, the name or names (with
addresses) in which the certificate or certificates for shares of
Common Stock shall be issued, and
(2) the Securities with respect to which the Repurchase Right is
being exercised.
Such written notice shall be irrevocable, except that the right
of the Holder to convert the Securities with respect to which the
Repurchase Right is being exercised shall continue until the
close of business on the Business Day immediately preceding the
Repurchase Date.
(c) In the event a Repurchase Right shall be exercised in
accordance with the terms hereof, the Company shall pay or cause
to be paid to the Trustee the Repurchase Price in cash for
payment to the Holder on the Repurchase Date or, if shares of
Common Stock are to be paid, shares of Common Stock, as provided
above, as promptly after the Repurchase Date as practicable,
together with accrued and unpaid interest to the Repurchase Date
payable in cash with respect to the Securities as to which the
Repurchase Right has been exercised; provided, however, that
installments of interest that mature prior to or on the
Repurchase Date shall be payable in cash to the Holders of such
Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Regular Record
Date.
<PAGE>
(d) If any Security (or portion thereof) surrendered for
repurchase shall not be so paid on the Repurchase Date, the
principal amount of such Security (or portion thereof, as the
case may be) shall, until paid, bear interest to the extent
permitted by applicable law from the Repurchase Date at the
Interest Rate, and each Security shall remain convertible into
Common Stock until the principal of such Security (or portion
thereof, as the case may be) shall have been paid or duly
provided for.
(e) Any Security which is to be repurchased only in part shall
be surrendered to the Trustee (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee
duly executed by the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and make available for delivery to the
Holder of such Security without service charge, a new Security or
Securities, containing identical terms and conditions, each in an
authorized denomination in aggregate principal amount equal to
and in exchange for the unrepurchased portion of the principal of
the Security so surrendered.
(f) Any issuance of shares of Common Stock in respect of the
Repurchase Price shall be deemed to have been effected
immediately prior to the close of business on the Repurchase Date
and the Person or Persons in whose name or names any certificate
or certificates for shares of Common Stock shall be issuable upon
such repurchase shall be deemed to have become on the Repurchase
Date the holder or holders of record of the shares represented
thereby; provided, however, that any surrender for repurchase on
a date when the stock transfer books of the Company shall be
closed shall constitute the Person or Persons in whose name or
names the certificate or certificates for such shares are to be
issued as the record holder or holders thereof for all purposes
at the opening of business on the next succeeding day on which
such stock transfer books are open. No payment or adjustment
shall be made for dividends or distributions on any Common Stock
issued upon repurchase of any Security declared prior to the
Repurchase Date.
(g) No fractions of shares of Common Stock shall be issued upon
repurchase of any Security or Securities. If more than one
Security shall be repurchased from the same Holder and the
Repurchase Price shall be payable in shares of Common Stock, the
number of full shares which shall be issued upon such repurchase
shall be computed on the basis of the aggregate principal amount
of the Securities (or specified portions thereof) to be so
repurchased. Instead of any fractional share of Common Stock
which would otherwise be issued on the repurchase of any Security
or Securities (or specified portions thereof), the Company shall
pay a cash adjustment in respect of such fraction (calculated to
the nearest one-100th of a share) in an amount equal to the same
fraction of the Quoted Price of the Common Stock as of the
Trading Day preceding the Repurchase Date.
(h) Any issuance and delivery of certificates for shares of
Common Stock on repurchase of Securities shall be made without
charge to the Holder of Securities being repurchased for such
certificates or for any tax or duty in respect of the issuance or
delivery of such certificates or the Securities represented
thereby; provided, however, that the Company shall not be
required to pay any tax or duty which may be payable in respect
of (i) income of the Holder or (ii) any transfer involved in the
issuance or delivery of certificates for shares of Common Stock
in a name other than that of the Holder of the Securities being
repurchased, and
<PAGE>
no such issuance or delivery shall be made unless the Persons requesting
such issuance or delivery has paid to the Company the amount of any such
tax or duty or has established, to the satisfaction of the Company, that
such tax or duty has been paid.
(i) All Securities delivered for repurchase shall be delivered
to the Trustee to be canceled at the direction of the Trustee,
which shall dispose of the same as provided in Section 2.15
hereof.
<PAGE>
ARTICLE 12
CONVERSION OF SECURITIES
Section 12.1 Conversion Right and Conversion Price.
Subject to and upon compliance with the provisions of this
Article, at the option of the Holder thereof, any Security or any
portion of the principal amount thereof which is $1,000 or an
integral multiple of $1,000 may be converted at the principal
amount thereof, or of such portion thereof, into the number of
duly authorized, fully paid and nonassessable shares of Common
Stock obtained by dividing the aggregate principal amount of such
Security (or portion thereof) surrendered for conversion by the
Conversion Price, determined as hereinafter provided, in effect
at the time of conversion. Such conversion right shall expire at
the close of business on March 1, 2007.
In case a Security or portion thereof is called for
redemption, such conversion right in respect of the Security or
the portion so called, shall expire at the close of business on
the second Business Day preceding the Redemption Date, unless the
Company defaults in making the payment due upon redemption. In
the case of a Change of Control for which the Holder exercises
its Repurchase Right with respect to a Security or portion
thereof, such conversion right in respect of the Security or
portion thereof shall expire at the close of business on the
Business Day preceding the Repurchase Date.
The price at which shares of Common Stock shall be delivered
upon conversion (the "Conversion Price") shall be initially equal
to $63.84 per share of Common Stock. The Conversion Price shall
be adjusted in certain instances as provided in paragraphs (a),
(b), (c), (d), (e), (f), (h) and (1) of Section 12.4 hereof.
Section 12.2 Exercise of Conversion Right.
To exercise the conversion right, the Holder of any Security
to be converted shall surrender such Security duly endorsed or
assigned to the Company or in blank, at the office of any
Conversion Agent, accompanied by a duly signed conversion notice
substantially in the form attached to the Security to the Company
stating that the Holder elects to convert such Security or, if
less than the entire principal amount thereof is to be converted,
the portion thereof to be converted.
Any Holder which surrenders any Security for conversion
during the period between the close of business on any Regular
Record Date and ending with the opening of business on the
corresponding Interest Payment Date (except in the case of any
Security whose Maturity is prior to such Interest Payment Date)
shall be accompanied by payment in New York Clearing House funds
or other funds acceptable to the Company of an amount equal to
the interest (including Liquidated Damages, if any) to be
received on such Interest Payment Date on the principal amount of
the Security being surrendered for conversion. Notwithstanding
the foregoing, any such Holder which surrenders for conversion
any Security which has been called for redemption by the Company
in a notice of redemption given by the Company pursuant to
Section 10.5 hereof (whether the Redemption Date for such
Security is on such Interest Payment Date or
<PAGE>
otherwise), need not pay the Company an amount equal to the interest
(including Liquidated Damages, if any) in the principal amount of such
Security so converted at the time such Holder surrenders such
Security for conversion.
Securities shall be deemed to have been converted
immediately prior to the close of business on the day of
surrender of such Securities for conversion in accordance with
the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person
or Persons entitled to receive the Common Stock issuable upon
conversion shall be treated for all purposes as the record holder
or holders of such Common Stock at such time. As promptly as
practicable on or after the conversion date, the Company shall
cause to be issued and delivered to such Conversion Agent a
certificate or certificates for the number of full shares of
Common Stock issuable upon conversion, together with payment in
lieu of any fraction of a share as provided in Section 12.3
hereof.
In the case of any Security which is converted in part only,
upon such conversion the Company shall execute and the Trustee
shall authenticate and deliver to the Holder thereof, at the
expense of the Company, a new Security or Securities of
authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such
Securities.
If shares of Common Stock to be issued upon conversion of a
Restricted Security, or Securities to be issued upon conversion
of a Restricted Security in part only, are to be registered in a
name other than that of the Holder of such Restricted Security,
such Holder must deliver to the Conversion Agent a certificate in
substantially the form set forth in the form of Security set
forth in Exhibit A annexed hereto, dated the date of surrender of
such Restricted Security and signed by such Holder, as to
compliance with the restrictions on transfer applicable to such
Restricted Security. Neither the Trustee nor any Conversion
Agent, Registrar or Transfer Agent shall be required to register
in a name other than that of the Holder shares of Common Stock or
Securities issued upon conversion of any such Restricted Security
not so accompanied by a properly completed certificate.
The Company hereby initially appoints the Trustee as the
Conversion Agent.
Section 12.3 Fractions of Shares.
No fractional shares of Common Stock shall be issued upon
conversion of any Security or Securities. If more than one
Security shall be surrendered for conversion at one time by the
same Holder, the number of full shares which shall be issued upon
conversion thereof shall be computed on the basis of the
aggregate principal amount of the Securities (or specified
portions thereof) so surrendered. Instead of any fractional
share of Common Stock which would otherwise be issued upon
conversion of any Security or Securities (or specified portions
thereof), the Company shall pay a cash adjustment in respect of
such fraction (calculated to the nearest one-100th of a share) in
an amount equal to the same fraction of the Quoted Price of the
Common Stock as of the Trading Day preceding the date of
conversion.
Section 12.4 Adjustment of Conversion Price.
The Conversion Price shall be subject to adjustments,
calculated by the Company, from time to time as follows:
<PAGE>
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in
shares of Common Stock, the Conversion Price in effect at the
opening of business on the date following the date fixed for the
determination of stockholders entitled to receive such dividend
or other distribution shall be reduced by multiplying such
Conversion Price by a fraction:
(i) the numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on the Record
Date (as defined in Section 12.4(g)) fixed for such
determination, and
(ii) the denominator of which shall be the sum of such number of
shares and the total number of shares constituting such dividend
or other distribution.
Such reduction shall become effective immediately after the
opening of business on the day following the Record Date. If any
dividend or distribution of the type described in this Section
12.4(a) is declared but not so paid or made, the Conversion Price
shall again be adjusted to the Conversion Price which would then
be in effect if such dividend or distribution had not been
declared.
(b) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
Conversion Price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective
shall be proportionately reduced, and conversely, in case
outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day
upon which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision
or combination becomes effective.
(c) In case the Company shall issue rights or warrants (other
than any rights or warrants referred to in Section 12.4(d)) to
all holders of its outstanding shares of Common Stock entitling
them to subscribe for or purchase shares of Common Stock (or
securities convertible into Common Stock) at a price per share
(or having a conversion price per share) less than the Current
Market Price (as defined in Section 12.4(g)) on the Record Date
fixed for the determination of stockholders entitled to receive
such rights or warrants, the Conversion Price shall be reduced so
that the same shall equal the price determined by multiplying the
Conversion Price in effect at the opening of business on the date
after such Record Date by a fraction:
(i) the numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on the Record
Date plus the number of shares which the aggregate offering price
of the total number of shares so offered for subscription or
purchase (or the aggregate conversion price of the convertible
securities so offered) would purchase at such Current Market
Price, and
(ii) the denominator of which shall be the number of shares of
Common Stock outstanding on the close of business on the Record
Date plus the
<PAGE>
total number of additional shares of Common Stock
so offered for subscription or purchase (or into which the
convertible securities so offered are convertible).
Such adjustment shall become effective immediately after the
opening of business on the day following the Record Date fixed
for determination of stockholders entitled to receive such rights
or warrants. To the extent that shares of Common Stock (or
securities convertible into Common Stock) are not delivered
pursuant to such rights or warrants, upon the expiration or
termination of such rights or warrants the Conversion Price shall
be readjusted to the Conversion Price which would then be in
effect had the adjustments made upon the issuance of such rights
or warrants been made on the basis of the delivery of only the
number of shares of Common Stock (or securities convertible into
Common Stock) actually delivered. In the event that such rights
or warrants are not so issued, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in
effect if such date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed.
In determining whether any rights or warrants entitle the holders
to subscribe for or purchase shares of Common Stock at less than
such Current Market Price, and in determining the aggregate
offering price of such shares of Common Stock, there shall be
taken into account any consideration received for such rights or
warrants, the value of such consideration if other than cash, to
be determined by the Board of Directors.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class
of capital stock of the Company (other than any dividends or
distributions to which Section 12.4(a) applies) or evidences of
its indebtedness, cash or other assets, including securities, but
excluding (1) any rights or warrants referred to in Section
12.4(c), (2) any stock, securities or other property or assets
(including cash) distributed in connection with a
reclassification, change, merger, consolidation, statutory share
exchange, combination, sale or conveyance to which Section 12.11
hereof applies and (3) dividends and distributions paid
exclusively in cash (the securities described in foregoing
clauses (1), (2) and (3) hereinafter in this Section 12.4(d)
called the "securities"), then, in each such case, subject to the
second succeeding paragraph of this Section 12.4(d), the
Conversion Price shall be reduced so that the same shall be equal
to the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on the Record
Date (as defined in Section 12.4(g)) with respect to such
distribution by a fraction:
(i) the numerator of which shall be the Current Market Price
(determined as provided in Section 12.4(g)) on such date less the
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and set forth in a Board
Resolution) on such date of the portion of the shares of capital
stock, evidences of indebtedness, cash or other assets, including
securities, so distributed applicable to one share of Common
Stock (determined on the basis of the number of shares of the
Common Stock outstanding on the Record Date), and
(ii) the denominator of which shall be such Current Market Price
on such date.
<PAGE>
Such reduction shall become effective immediately prior to the
opening of business on the day following the Record Date.
However, in the event that the then fair market value (as so
determined) of the portion of the securities so distributed
applicable to one share of Common Stock is equal to or greater
than the Current Market Price on the Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that
each Holder shall have the right to receive upon conversion of a
Security (or any portion thereof) the amount of shares of capital
stock, evidences of indebtedness, cash or other assets, including
securities, such Holder would have received had such Holder
converted such Security (or portion thereof) immediately prior to
such Record Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be
in effect if such dividend or distribution had not been declared.
If the Board of Directors determines the fair market value
of any distribution for purposes of this Section 12.4(d) by
reference to the actual or when issued trading market for any
securities comprising all or part of such distribution, it must
in doing so consider the prices in such market over the same
period (the "Reference Period") used in computing the Current
Market Price pursuant to Section 12.4(g) to the extent possible,
unless the Board of Directors in a Board Resolution determines in
good faith that determining the fair market value during the
Reference Period would not be in the best interest of the Holder.
Rights or warrants distributed by the Company to all holders
of Common Stock entitling the holders thereof to subscribe for or
purchase shares of the Company's capital stock (either initially
or under certain circumstances), which rights or warrants, until
the occurrence of a specified event or events ("Trigger Event"):
(i) are deemed to be transferred with such shares of Common
Stock;
(ii) are not exercisable; and
(iii) are also issued in respect of future issuances of
Common Stock,
shall be deemed not to have been distributed for purposes of this
Section 12.4(d) (and no adjustment to the Conversion Price under
this Section 12.4(d) will be required) until the occurrence of
the earliest Trigger Event. If such right or warrant is subject
to subsequent events, upon the occurrence of which such right or
warrant shall become exercisable to purchase different
securities, evidences of indebtedness or other assets or entitle
the holder to purchase a different number or amount of the
foregoing or to purchase any of the foregoing at a different
purchase price, then the occurrence of each such event shall be
deemed to be the date of issuance and record date with respect to
a new right or warrant (and a termination or expiration of the
existing right or warrant without exercise by the holder
thereof). In addition, in the event of any distribution (or
deemed distribution) of rights or warrants, or any Trigger Event
or other event (of the type described in the preceding sentence)
with respect thereto, that resulted in an adjustment to the
Conversion Price under this Section 12.4(d):
(1) in the case of any such rights or warrants which shall all
have been redeemed or repurchased without exercise by any holders
thereof, the Conversion Price shall be readjusted upon such final
redemption or repurchase to give effect
<PAGE>
to such distribution or
Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase
price received by a holder of Common Stock with respect to such
rights or warrant (assuming such holder had retained such rights
or warrants), made to all holders of Common Stock as of the date
of such redemption or repurchase, and
(2) in the case of such rights or warrants all of which shall
have expired or been terminated without exercise, the Conversion
Price shall be readjusted as if such rights and warrants had
never been issued.
For purposes of this Section 12.4(d) and Sections 12.4(a),
12.4(b) and 12.4(c), any dividend or distribution to which this
Section 12.4(d) is applicable that also includes shares of Common
Stock, a subdivision or combination of Common Stock to which
Section 12.4(b) applies, or rights or warrants to subscribe for
or purchase shares of Common Stock to which Section 12.4(c)
applies (or any combination thereof), shall be deemed instead to
be:
(1) a dividend or distribution of the evidences of indebtedness,
assets, shares of capital stock, rights or warrants other than
such shares of Common Stock, such subdivision or combination or
such rights or warrants to which Sections 12.4(a), 12.4(b) and
12.4(c) apply, respectively (and any Conversion Price reduction
required by this Section 12.4(d) with respect to such dividend or
distribution shall then be made), immediately followed by
(2) a dividend or distribution of such shares of Common Stock,
such subdivision or combination or such rights or warrants (and
any further Conversion Price reduction required by Sections
12.4(a), 12.4(b) and 12.4(c) with respect to such dividend or
distribution shall then be made), except:
(A) the Record Date of such dividend or distribution shall be
substituted as (x) "the date fixed for the determination of
stockholders entitled to receive such dividend or other
distribution", "Record Date fixed for such determination" and
"Record Date" within the meaning of Section 12.4(a), (y) "the day
upon which such subdivision becomes effective" and "the day upon
which such combination becomes effective" within the meaning of
Section 12.4(b), and (z) as "the Record Date fixed for the
determination of stockholders entitled to receive such rights or
warrants," such "Record Date," "the Record Date fixed for the
determination of stockholders entitled to receive such rights or
warrants" and "such dated fixed for the determination of
stockholders entitled to receive such rights or warrants" within
the meaning of Section 12.4(c), and
(B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of
business on the Record Date fixed for such determination" within
the meaning of Section 12.4(a) and any reduction or increase in
the number of shares of Common Stock resulting from such
subdivision or combination shall be disregarded in connection
with such dividend or distribution..
<PAGE>
(e) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any
cash that is distributed upon a reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or
conveyance to which Section 12.11 hereof applies or as part of a
distribution referred to in Section 12.4(d) hereof), in an
aggregate amount that, combined together with:
(1) the aggregate amount of any other such distributions to all
holders of Common Stock made exclusively in cash within the 12
months preceding the date of payment of such distribution, and in
respect of which no adjustment pursuant to this Section 12.4(e)
has been made, and
(2) the aggregate of any cash plus the fair market value (as
determined by the Board of Directors, whose determination shall
be conclusive and set forth in a Board Resolution), as of the
expiration of the tender or exchange offer referred to below, of
consideration payable in respect of any tender or exchange offer
by the Company or any of its subsidiaries for all or any portion
of the Common Stock concluded within the 12 months preceding the
date of such distribution, and in respect of which no adjustment
pursuant to Section 12.4(f) hereof has been made,
exceeds 10% of the product of the Current Market Price
(determined as provided in Section 12.4(g)) on the Record Date
with respect to such distribution times the number of shares of
Common Stock outstanding on such date, then and in each such
case, immediately after the close of business on such date, the
Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on such Record
Date by a fraction:
(i) the numerator of which shall be equal to the Current Market
Price on the Record Date less an amount equal to the quotient of
(x) the excess of such combined amount over such 10% and (y) the
number of shares of Common Stock outstanding on the Record Date,
and
(ii) the denominator of which shall be equal to the Current
Market Price on such date.
In the event that such dividend or distribution is not so paid or
made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend
or distribution had not been declared.
(f) In case a tender or exchange offer made by the Company or
any of its subsidiaries for all or any portion of the Common
Stock shall expire and such tender or exchange offer (as amended
upon the expiration thereof) shall require the payment to
stockholders (based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of
Purchased Shares (as defined below)) of an aggregate
consideration having a fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and
set forth in a Board Resolution) that combined together with:
<PAGE>
(1) the aggregate of the cash plus the fair market value (as
determined by the Board of Directors, whose determination shall
be conclusive and set forth in a Board Resolution), as of the
expiration of the other tender or exchange offer referred to
below, of consideration payable in respect of any other tender or
exchange offers by the Company or any of its subsidiaries for all
or any portion of the Common Stock expiring within the preceding
12 months and in respect of which no adjustment pursuant to this
Section 12.4(f) has been made, and
(2) the aggregate amount of any distributions to all holders of
the Company's Common Stock made exclusively in cash within the
preceding 12 months and in respect of which no adjustment
pursuant to Section 12.4(e) has been made, exceeds 10% of the
product of the Current Market Price (determined as provided in
Section 12.4(g)) as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender or exchange
offer (as it may be amended) times the number of shares of Common
Stock outstanding (including any tendered or exchanged shares) on
the Expiration Time, then, and in each such case, immediately
prior to the opening of business on the day after the date of the
Expiration Time, the Conversion Price shall be adjusted so that
the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to close of business
on the date of the Expiration Time by a fraction:
(i) the numerator of which shall be (x) the number of shares of
Common Stock outstanding (including any tendered or exchanged
shares) at the Expiration Time multiplied by the Current Market
Price of the Common Stock on the Trading Day next succeeding the
Expiration Time minus (y) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders
based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered
or exchanged and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred
to as the "Purchased Shares"), and
(ii) the denominator shall be the product of the number of shares
of Common Stock outstanding (less any Purchased Shares) on the
Expiration Time and the Current Market Price of the Common Stock
on the Trading Day next succeeding the Expiration Time.
Such reduction (if any) shall become effective immediately prior
to the opening of business on the day following the Expiration
Time. In the event that the Company is obligated to purchase
shares pursuant to any such tender offer, but the Company is
permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion Price which
would then be in effect if such tender or exchange offer had not
been made. If the application of this Section 12.4(f) to any
tender or exchange offer would result in an increase in the
Conversion Price, no adjustment shall be made for such tender or
exchange offer under this Section 12.4(f).
<PAGE>
(g) For purposes of this Section 12.4, the following terms shall
have the meanings indicated:
(1) "Current Market Price" shall mean the average of the daily
Closing Prices per share of Common Stock for the ten consecutive
Trading Days immediately prior to the date in question; provided,
however, that if:
(i) the "ex" date (as hereinafter defined) for any event
(other than the issuance or distribution requiring such
computation) that requires an adjustment to the Conversion Price
pursuant to Section 12.4(a), (b), (c), (d), (e) or (f) occurs
during such ten consecutive Trading Days, the Closing Price for
each Trading Day prior to the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the same
fraction by which the Conversion Price is so required to be
adjusted as a result of such other event;
(ii) the "ex" date for any event (other than the issuance or
distribution requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 12.4(a),
(b), (c), (d), (e) or (f) occurs on or after the "ex" date for
the issuance or distribution requiring such computation and prior
to the day in question, the Closing Price for each Trading Day on
and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction
by which the Conversion Price is so required to be adjusted as a
result of such other event; and
(iii) the "ex" date for the issuance or distribution
requiring such computation is prior to the day in question, after
taking into account any adjustment required pursuant to clause
(i) or (ii) of this proviso, the Closing Price for each Trading
Day on or after such "ex" date shall be adjusted by adding
thereto the amount of any cash and the fair market value (as
determined by the Board of Directors in a manner consistent with
any determination of such value for purposes of Section 12.4(d)
or (f), whose determination shall be conclusive and set forth in
a Board Resolution) of the evidences of indebtedness, shares of
capital stock or assets being distributed applicable to one share
of Common Stock as of the close of business on the day before
such "ex" date.
For purposes of any computation under Section 12.4(f), the
Current Market Price of the Common Stock on any date shall be
deemed to be the average of the daily Closing Prices per share of
Common Stock for such day and the next two succeeding Trading
Days; provided, however, that if the "ex" date for any event
(other than the tender offer requiring such computation) that
requires an adjustment to the Conversion Price pursuant to
Section 12.4(a), (b), (c), (d), (e) or (f) occurs on or after the
Expiration Time for the tender or exchange offer requiring such
computation and prior to the day in question, the Closing Price
for each Trading Day on and after the "ex" date for such other
event shall be adjusted by multiplying such Closing Price by the
<PAGE>
reciprocal of the fraction by which the Conversion Price is so
required to be adjusted as a result of such other event. For
purposes of this paragraph, the term "ex" date, when used:
(A) with respect to any issuance or distribution, means the
first date on which the Common Stock trades regular way on the
relevant exchange or in the relevant market from which the
Closing Price was obtained without the right to receive such
issuance or distribution;
(B) with respect to any subdivision or combination of shares of
Common Stock, means the first date on which the Common Stock
trades regular way on such exchange or in such market after the
time at which such subdivision or combination becomes effective,
and
(C) with respect to any tender or exchange offer, means the
first date on which the Common Stock trades regular way on such
exchange or in such market after the Expiration Time of such
offer.
Notwithstanding the foregoing, whenever successive
adjustments to the Conversion Price are called for pursuant
to this Section 12.4, such adjustments shall be made to the
Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 12.4 and to avoid
unjust or inequitable results as determined in good faith by
the Board of Directors.
(2) "fair market value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction.
(3) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders
of Common Stock have the right to receive any cash, securities or
other property or in which the Common Stock (or other applicable
security) is exchanged for or converted into any combination of
cash, securities or other property, the date fixed for
determination of stockholders entitled to receive such cash,
securities or other property (whether such date is fixed by the
Board of Directors or by statute, contract or otherwise).
(h) The Company may make such reductions in the Conversion
Price, in addition to those required by Section 12.4(a), (b),
(c), (d), (e) or (f), as the Board of Directors considers to be
advisable to avoid or diminish any income tax to holders of
Common Stock or rights to purchase Common Stock resulting from
any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from
time to time may reduce the Conversion Price by any amount for
any period of time if the period is at least 20 days and the
reduction is irrevocable during the period and the Board of
Directors determines in good faith that such reduction would be
in the best interests of the Company, which determination shall
be conclusive and set forth in a Board Resolution. Whenever the
Conversion Price is reduced pursuant to the preceding sentence,
the Company shall mail to the Trustee and each Holder at the
address of such Holder as it appears in the Register a notice of
the reduction at least 15 days
<PAGE>
prior to the date the reduced Conversion Price takes effect, and such
notice shall state the reduced Conversion Price and the period during which
it will be in effect.
(i) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of
at least 1% in such price; provided, however, that any
adjustments which by reason of this Section 12.4(i) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Article 12 shall be made by the Company and shall be made to
the nearest cent or to the nearest one hundredth of a share, as
the case may be. No adjustment need be made for a change in the
par value or no par value of the Common Stock.
(j) In any case in which this Section 12.4 provides that an
adjustment shall become effective immediately after a Record Date
for an event, the Company may defer until the occurrence of such
event (i) issuing to the Holder of any Security converted after
such Record Date and before the occurrence of such event the
additional shares of Common Stock issuable upon such conversion
by reason of the adjustment required by such event over and above
the Common Stock issuable upon such conversion before giving
effect to such adjustment and (ii) paying to such holder any
amount in cash in lieu of any fraction pursuant to Section 12.3
hereof.
(k) For purposes of this Section 12.4, the number of shares of
Common Stock at any time outstanding shall not include shares
held in the treasury of the Company but shall include shares
issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.
(l) If the distribution date for the rights provided in the
Company's rights agreement, if any, occurs prior to the date a
Security is converted, the Holder of the Security who converts
such Security after the distribution date is not entitled to
receive the rights that would otherwise be attached (but for the
date of conversion) to the shares of Common Stock received upon
such conversion; provided, however, that an adjustment shall be
made to the Conversion Price pursuant to clause 12.4(b) as if the
rights were being distributed to the common stockholders of the
Company immediately prior to such conversion. If such an
adjustment is made and the rights are later redeemed, invalidated
or terminated, then a corresponding reversing adjustment shall be
made to the Conversion Price, on an equitable basis, to take
account of such event.
Section 12.5 Notice of Adjustments of Conversion Price.
Whenever the Conversion Price is adjusted as herein provided
(other than in the case of an adjustment pursuant to the second
paragraph of Section 12.4(h) for which the notice required by
such paragraph has been provided), the Company shall promptly
file with the Trustee and any Conversion Agent other than the
Trustee an Officers' Certificate setting forth the adjusted
Conversion Price and showing in reasonable detail the facts upon
which such adjustment is based. Promptly after delivery of such
Officers' Certificate, the Company shall prepare a notice stating
that the Conversion Price has been adjusted and setting forth the
adjusted Conversion Price and the date on which each adjustment
becomes effective, and shall mail such notice to each Holder at
the address of such Holder as it appears in the Register within
20 days of the
<PAGE>
effective date of such adjustment. Failure to deliver such notice shall
not effect the legality or validity of any such adjustment.
Section 12.6 Notice Prior to Certain Actions.
In case at any time after the date hereof:
(1) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than in cash
out of its capital surplus or its consolidated retained earnings;
(2) the Company shall authorize the granting to the holders of
its Common Stock of rights or warrants to subscribe for or
purchase any shares of capital stock of any class (or of
securities convertible into shares of capital stock of any class)
or of any other rights;
(3) there shall occur any reclassification of the Common Stock
of the Company (other than a subdivision or combination of its
outstanding Common Stock, a change in par value, a change from
par value to no par value or a change from no par value to par
value), or any merger, consolidation, statutory share exchange or
combination to which the Company is a party and for which
approval of any shareholders of the Company is required, or the
sale, transfer or conveyance of all or substantially all of the
assets of the Company; or
(4) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
the Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of securities pursuant
to Section 9.2 hereof, and shall cause to be provided to the
Trustee and all Holders in accordance with Section 14.2 hereof,
at least 20 days (or 10 days in any case specified in clause (1)
or (2) above) prior to the applicable record or effective date
hereinafter specified, a notice stating:
(A) the date on which a record is to be taken for the
purpose of such dividend, distribution, rights or warrants, or, if
a record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend, distribution,
rights or warrants are to be determined, or
(B) the date on which such reclassification, merger,
consolidation, statutory share exchange, combination, sale,
transfer, conveyance, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities, cash or
other property deliverable upon such reclassification, merger,
consolidation, statutory share exchange, sale, transfer,
dissolution, liquidation or winding up.
Neither the failure to give such notice nor any defect
therein shall affect the legality or validity of the proceedings
or actions described in clauses (1) through (4) of this Section
12.6.
<PAGE>
Section 12.7 Company to Reserve Common Stock.
The Company shall at all times use its best efforts to
reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock, for the purpose of
effecting the conversion of Securities, the full number of shares
of fully paid and nonassessable Common Stock then issuable upon
the conversion of all Outstanding Securities.
Section 12.8 Taxes on Conversions.
Except as provided in the next sentence, the Company will
pay any and all taxes (other than taxes on income) and duties
that may be payable in respect of the issue or delivery of shares
of Common Stock on conversion of Securities pursuant hereto. A
Holder delivering a Security for conversion shall be liable for
and will be required to pay any tax or duty which may be payable
in respect of any transfer involved in the issue and delivery of
shares of Common Stock in a name other than that of the Holder of
the Security or Securities to be converted, and no such issue or
delivery shall be made unless the Person requesting such issue
has paid to the Company the amount of any such tax or duty, or
has established to the satisfaction of the Company that such tax
or duty has been paid.
Section 12.9 Covenant as to Common Stock.
The Company covenants that all shares of Common Stock which
may be issued upon conversion of Securities will upon issue be
fully paid and nonassessable and, except as provided in Section
12.8, the Company will pay all taxes, liens and charges with
respect to the issue thereof.
Section 12.10 Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered
to the Trustee to be canceled by or at the direction of the
Trustee, which shall dispose of the same as provided in Section
2.9.
Section 12.11 Effect of Recapitalization, Reclassification,
Consolidation, Merger or Sale.
If any of following events occur, namely:
(i) any recapitalization, reclassification or change of the
outstanding shares of Common Stock (other than a change in par
value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination),
(ii) any merger, consolidation, statutory share exchange or
combination of the Company with another corporation as a result
of which holders of Common Stock shall be entitled to receive
stock, securities or other property or assets (including cash)
with respect to or in exchange for such Common Stock or
<PAGE>
(iii) any sale, conveyance or lease of the properties and
assets of the Company as, or substantially as, an entirety to any
other corporation as a result of which holders of Common Stock
shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for
such Common Stock,
the Company or the successor or purchasing corporation, as the
case may be, shall execute with the Trustee a supplemental
indenture (which shall comply with the TIA as in force at the
date of execution of such supplemental indenture if such
supplemental indenture is then required to so comply) providing
that each Security shall be convertible into the kind and amount
of shares of stock and other securities or property or assets
(including cash) which such Holder would have been entitled to
receive upon such recapitalization, reclassification, change,
merger, consolidation, statutory share exchange, combination,
sale or conveyance had such Securities been converted into Common
Stock immediately prior to such recapitalization,
reclassification, change, merger, consolidation, statutory share
exchange, combination, sale or conveyance assuming such holder of
Common Stock did not exercise its rights of election, if any, as
to the kind or amount of securities, cash or other property
receivable upon such recapitalization, reclassification, change,
merger, consolidation, statutory share exchange, combination,
sale or conveyance (provided that, if the kind or amount of
securities, cash or other property receivable upon such
recapitalization, reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or
conveyance is not the same for each share of Common Stock in
respect of which such rights of election shall not have been
exercised ("Non-Electing Share"), then for the purposes of this
Section 12.11 the kind and amount of securities, cash or other
property receivable upon such recapitalization, reclassification,
change, merger, consolidation, statutory share exchange,
combination, sale or conveyance for each Non-Electing Share shall
be deemed to be the kind and amount so receivable per share by a
plurality of the Non-Electing Shares). Such supplemental
indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for
in this Article 12. If, in the case of any such
recapitalization, reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or
conveyance, the stock or other securities and assets receivable
thereupon by a holder of shares of Common Stock includes shares
of stock or other securities and assets of a corporation other
than the successor or purchasing corporation, as the case may be,
in such recapitalization, reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or
conveyance, then such supplemental indenture shall also be
executed by such other corporation and shall contain such
additional provisions to protect the interests of the Holders of
the Securities as the Board of Directors shall reasonably
consider necessary by reason of the foregoing, including to the
extent practicable the provisions providing for the Repurchase
Rights set forth in Article 11 hereof.
The Company shall cause notice of the execution of such
supplemental indenture to be mailed to each Holder, at the
address of such Holder as it appears on the Register, within 20
days after execution thereof. Failure to deliver such notice
shall not affect the legality or validity of such supplemental
indenture.
The above provisions of this Section shall similarly apply
to successive recapitalizations, reclassifications, mergers,
consolidations, statutory share exchanges, combinations, sales
and conveyances.
<PAGE>
If this Section 12.11 applies to any event or occurrence,
Section 12.4 hereof shall not apply.
Section 12.12 Responsibility of Trustee for Conversion
Provisions.
The Trustee, subject to the provisions of Section 5.1
hereof, and any Conversion Agent shall not at any time be under
any duty or responsibility to any Holder of Securities to
determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature
or intent of any such adjustments when made, or with respect to
the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. Neither the
Trustee, subject to the provisions of Section 5.1 hereof, nor any
Conversion Agent shall be accountable with respect to the
validity or value (of the kind or amount) of any Common Stock, or
of any other securities or property, which may at any time be
issued or delivered upon the conversion of any Security; and it
or they do not make any representation with respect thereto.
Neither the Trustee, subject to the provisions of Section 5.1
hereof, nor any Conversion Agent shall be responsible for any
failure of the Company to make any cash payment or to issue,
transfer or deliver any shares of stock or share certificates or
other securities or property upon the surrender of any Security
for the purpose of conversion; and the Trustee, subject to the
provisions of Section 5.1 hereof, and any Conversion Agent shall
not be responsible or liable for any failure of the Company to
comply with any of the covenants of the Company contained in this
Article.
<PAGE>
ARTICLE 13
SUBORDINATION
Section 13.1 Securities Subordinated to Senior Debt.
The Company covenants and agrees, and each Holder of
Securities, by such Holder's acceptance thereof, likewise
covenants and agrees, that the Indebtedness represented by the
Securities and the payment of the principal of and premium, if
any, and interest (including Liquidated Damages, if any) on each
and all of the Securities is hereby expressly subordinated and
junior, to the extent and in the manner set forth and as set
forth in this Section 13.1, in right of payment to the prior
payment in full of all Senior Debt.
(a) In the event of any distribution of assets of the Company
upon any dissolution, winding up, liquidation or reorganization
of the Company, whether in bankruptcy, insolvency, reorganization
or receivership proceedings or upon an assignment for the benefit
of creditors or any other marshalling of the assets and
liabilities of the Company or otherwise, the holders of all
Senior Debt shall first be entitled to receive payment of the
full amount due thereon in respect of all such Senior Debt and
all other amounts due or provision shall be made for such amount
in cash, or other payments satisfactory to the holders of Senior
Debt, before the Holders of any of the Securities are entitled to
receive any payment or distribution of any character, whether in
cash, securities or other property, on account of the principal
of or premium, if any, or interest (including Liquidated Damages,
if any) on the Securities.
(b) In the event of any acceleration of Maturity of the
Securities because of an Event of Default, unless the full amount
due in respect of all Senior Debt is paid in cash or other form
of payment satisfactory to the holders of Senior Debt, no payment
shall be made by the Company with respect to the principal of,
premium, if any, or interest (including Liquidated Damages, if
any) on the Securities or to acquire any of the Securities
(including any redemption, conversion or cash repurchase pursuant
to the exercise of the Repurchase Right), and the Company shall
give prompt written notice of such acceleration to such holders
of Senior Debt.
(c) In the event of and during the continuance of any default in
payment of the principal of or premium, if any, or interest on,
rent or other payment obligation in respect of, any Senior Debt,
unless all such payments due in respect of such Senior Debt have
been paid in full in cash or other payments satisfactory to the
holders of Senior Debt, no payment shall be made by the Company
with respect to the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Securities or to
acquire any of the Securities (including any redemption,
conversion or cash repurchase pursuant to the exercise of the
Repurchase Right). The Company shall give prompt written
notice to the Trustee of any default under any Senior Debt or
under any agreement pursuant to which Senior Debt may have been
issued.
(d) During the continuance of any event of default with respect
to any Designated Senior Debt, as such event of default is
defined under any such Designated Senior Debt or in any agreement
pursuant to which any Designated Senior Debt has been issued
(other than a default in payment of the principal of or premium,
if any, or interest on, rent or other payment obligation in
respect of any Designated Senior Debt), permitting the holder or
holders of such Designated
<PAGE>
Senior Debt to accelerate the maturity
thereof (or in the case of any lease, permitting the landlord
either to terminate the lease or to require the Company to make
an irrevocable offer to terminate the lease following an event of
default thereunder), no payment shall be made by the Company,
directly or indirectly, with respect to principal of, premium, if
any, or interest (including Liquidated Damages, if any) on the
Securities for 179 days following notice in writing (a "Payment
Blockage Notice") to the Company, from any holder or holders of
such Designated Senior Debt or their representative or
representatives or the trustee or trustees under any indenture or
under which any instrument evidencing any such Designated Senior
Debt may have been issued, that such an event of default has
occurred and is continuing, unless such event of default has been
cured or waived or such Designated Senior Debt has been paid in
full in cash or other payment satisfactory to the holders of such
Designated Senior Debt; provided, however, if the maturity of
such Designated Senior Debt is accelerated (or in the case of any
lease, as a result of such event of default, the landlord under
the lease has given the Company notice of its intention to
terminate the lease or to require the Company to make an
irrevocable offer to terminate the lease following an event of
default thereunder), no payment may be made on the Securities
until such Designated Senior Debt has been paid in full in cash
or other payment satisfactory to the holders of such Designated
Senior Debt or such acceleration (or termination, in the case of
a lease) has been cured or waived.
For purposes of this Section 13.1(d), such Payment Blockage
Notice shall be deemed to include notice of all other events of
default under such indenture or instrument which are continuing
at the time of the event of default specified in such Payment
Blockage Notice. The provisions of this Section 13.1(d) shall
apply only to one such Payment Blockage Notice given in any
period of 365 days with respect to any issue of Designated Senior
Debt, and no such continuing event of default that existed or was
continuing on the date of delivery of any Payment Blockage Notice
shall be, or shall be made, the basis for a subsequent Payment
Blockage Notice.
(e) In the event that, notwithstanding the foregoing provisions
of Sections 13.1(a), 13.1(b), 13.1(c) and 13.1(d), any payment on
account of principal, premium, if any, or interest (including
Liquidated Damages, if any) on the Securities shall be made by or
on behalf of the Company and received by the Trustee, by any
Holder or by any Paying Agent (or, if the Company is acting as
its own Paying Agent, money for any such payment shall be
segregated and held in trust):
(i) after the occurrence of an event specified in Section
13.1(a) or 13.1(b), then, unless all Senior Debt is paid in full
in cash, or provision shall be made therefor,
(ii) after the happening of an event of default of the type
specified in Section 13.1(c) above, then, unless the amount of
such Senior Debt then due shall have been paid in full, or
provision made therefor or such event of default shall have been
cured or waived, or
(iii) after the happening of an event of default of the type
specified in Section 13.1(d) above and delivery of a Payment
Blockage Notice, then, unless such event of default shall have
been cured or waived or the 179-day period specified in Section
13.1(d) shall have expired,
<PAGE>
such payment (subject, in each case, to the provisions of Section
13.7 hereof) shall be held in trust for the benefit of, and shall
be immediately paid over to, the holders of Designated Senior
Debt (unless an event described in Section 13.1(a), (b) or (c)
has occurred, in which case the payment shall be held in trust
for the benefit of, and shall be immediately paid over to all
holders of Senior Debt) or their representative or
representatives or the trustee or trustees under any indenture
under which any instruments evidencing any of the Designated
Senior Debt or Senior Debt, as the case may be, may have been
issued, as their interests may appear.
Section 13.2 Subrogation.
Subject to the payment in full of all Senior Debt to which
the Indebtedness evidenced by the Securities is in the
circumstances subordinated as provided in Section 13.1 hereof,
the Holders of the Securities shall be subrogated to the rights
of the holders of such Senior Debt to receive payments or
distributions of cash, property or securities of the Company
applicable to such Senior Debt until all amounts owing on the
Securities shall be paid in full, and, as between the Company,
its creditors other than holders of such Senior Debt, and the
Holders of the Securities, no such payment or distribution made
to the holders of Senior Debt by virtue of this Article which
otherwise would have been made to the holders of the Securities
shall be deemed to be a payment by the Company on account of such
Senior Debt, provided that the provisions of this Article are and
are intended solely for the purpose of defining the relative
rights of the Holders of the Securities, on the one hand, and the
holders of Senior Debt, on the other hand.
Section 13.3 Obligation of the Company Is Absolute and
Unconditional.
Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as
between the Company, its creditors other than the holders of
Senior Debt, and the Holders of the Securities, the obligation of
the Company, which is absolute and unconditional, to pay to the
Holders of the Securities the principal of and premium, if any,
and interest (including Liquidated Damages, if any) on the
Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect
the relative rights of the Holders of the Securities and
creditors of the Company other than the holders of Senior Debt,
nor shall anything contained herein or therein prevent the
Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article
of the holders of Senior Debt in respect of cash, property or
securities of the Company received upon the exercise of any such
remedy.
Section 13.4 Maturity of or Default on Senior Debt.
Upon the maturity of any Senior Debt by lapse of time,
acceleration or otherwise, all principal of or premium, if any,
or interest on, rent or other payment obligations in respect of
all such matured Senior Debt shall first be paid in full, or such
payment shall have been duly provided for, before any payment on
account of principal, or premium, if any, or interest (including
Liquidated Damages, if any) is made upon the Securities.
<PAGE>
Section 13.5 Payments on Securities Permitted.
Except as expressly provided in this Article, nothing
contained in this Article shall affect the obligation of the
Company to make, or prevent the Company from making, payments of
the principal of, or premium, if any, or interest (including
Liquidated Damages, if any) on the Securities in accordance with
the provisions hereof and thereof, or shall prevent the Trustee
or any Paying Agent from applying any moneys deposited with it
hereunder to the payment of the principal of, or premium, if any,
or interest (including Liquidated Damages, if any) on the
Securities.
Section 13.6 Effectuation of Subordination by Trustee.
Each Holder of Securities, by such Holder's acceptance
thereof, authorizes and directs the Trustee on such Holder's
behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article and
appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes.
Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee and the Holders of the
Securities shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which any such
dissolution, winding up, liquidation or reorganization proceeding
affecting the affairs of the Company is pending or upon a
certificate of the trustee in bankruptcy, receiver, assignee for
the benefit of creditors, liquidating trustee or agent or other
Person making any payment or distribution, delivered to the
Trustee or to the Holders of the Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment
or distribution, and as to other facts pertinent to the right of
such Persons under this Article, and if such evidence is not
furnished, the Trustee may defer any payment to such Persons
pending judicial determination as to the right of such Persons to
receive such payment.
Section 13.7 Knowledge of Trustee.
Notwithstanding the provision of this Article or any other
provisions of this Indenture, the Trustee shall not be charged
with knowledge of the existence of any Senior Debt, of any
default in payment of principal of, premium, if any, or interest
on, rent or other payment obligation in respect of any Senior
Debt, or of any facts which would prohibit the making of any
payment of moneys to or by the Trustee, or the taking of any
other action by the Trustee, unless a Responsible Officer of the
Trustee having responsibility for the administration of the trust
established by this Indenture shall have received written notice
thereof from the Company, any Holder of Securities, any Paying or
Conversion Agent of the Company or the holder or representative
of any class of Senior Debt, and, prior to the receipt of any
such written notice, the Trustee shall be entitled in all
respects to assume that no such default or facts exist; provided,
however, that unless on the third Business Day prior to the date
upon which by the terms hereof any such moneys may become payable
for any purpose the Trustee shall have received the notice
provided for in this Section 13.7, then, anything herein
contained to the contrary notwithstanding, the Trustee shall have
full power and authority to receive such moneys and apply the
same to the purpose for which they were received, and shall not
be affected by any notice to the contrary which may be received
by it on or after such date.
<PAGE>
Section 13.8 Trustee's Relation to Senior Debt.
The Trustee shall be entitled to all the rights set forth in
this Article with respect to any Senior Debt at the time held by
it, to the same extent as any other holder of Senior Debt and
nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder.
Nothing contained in this Article shall apply to claims of
or payments to the Trustee under or pursuant to Section 5.8
hereof.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants
and obligations as are specifically set forth in this Article,
and no implied covenants or obligations with respect to the
holders of Senior Debt shall be read into this Indenture against
the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt and the Trustee
shall not be liable to any holder of Senior Debt if it shall pay
over or deliver to Holders, the Company or any other Person
moneys or assets to which any holder of Senior Debt shall be
entitled by virtue of this Article or otherwise.
Section 13.9 Rights of Holders of Senior Debt Not Impaired.
No right of any present or future holder of any Senior Debt
to enforce the subordination herein shall at any time or in any
way be prejudiced or impaired by any act or failure to act on the
part of the Company or by any noncompliance by the Company with
the terms, provisions and covenants of this Indenture, regardless
of any knowledge thereof any such holder may have or be otherwise
charged with.
Section 13.10 Modification of Terms of Senior Debt.
Any renewal or extension of the time of payment of any
Senior Debt or the exercise by the holders of Senior Debt of any
of their rights under any instrument creating or evidencing
Senior Debt, including without limitation the waiver of default
thereunder, may be made or done all without notice to or assent
from the Holders of the Securities or the Trustee.
No compromise, alteration, amendment, modification,
extension, renewal or other change of, or waiver, consent or
other action in respect of, any liability or obligation under or
in respect of, or of any of the terms, covenants or conditions of
any indenture or other instrument under which any Senior Debt is
outstanding or of such Senior Debt, whether or not such release
is in accordance with the provisions or any applicable document,
shall in any way alter or affect any of the provisions of this
Article or of the Securities relating to the subordination
thereof.
Section 13.11 Certain Conversions Not Deemed Payment.
For the purposes of this Article 13 only:
(1) the issuance and delivery of junior securities upon
conversion of Securities in accordance with Article 12 hereof
shall not be deemed to constitute a payment or distribution on
account of the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on Securities or on
account of the purchase or other acquisition of Securities, and
<PAGE>
(2) the payment, issuance or delivery of cash (except in
satisfaction of fractional shares pursuant to Section 12.3
hereof), property or securities (other than junior securities)
upon conversion of a Security shall be deemed to constitute
payment on account of the principal of, premium, if any, or
interest (including Liquidated Damages, if any) on such Security.
For the purposes of this Section 13.11, the term "junior
securities" means:
(a) shares of any common stock of the Company or
(b) other securities of the Company that are subordinated in
right of payment to all Senior Debt that may be outstanding at
the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than,
the Securities are so subordinated as provided in this Article.
Nothing contained in this Article 13 or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as
among the Company, its creditors (other than holders of Senior
Debt) and the Holders of Securities, the right, which is absolute
and unconditional, of the Holder of any Security to convert such
Security in accordance with Article 12 hereof.
<PAGE>
ARTICLE 14
OTHER PROVISIONS OF GENERAL APPLICATION
Section 14.1 Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA which
are required to be part of this Indenture, and shall, to the
extent applicable, be governed by such provisions.
Section 14.2 Notices.
Any notice or communication to the Company or the Trustee is
duly given if in writing and delivered in person or mailed by
first-class mail to the address set forth below:
(a) if to the Company:
CV Therapeutics, Inc.
3172 Porter Drive
Palo Alto, California 94304
Attention: Louis G. Lange
with a copy to:
Cooley Godward LLP
5 Palo Alto Square
Palo Alto, CA 94306
Attention: Alan C. Mendelson
(b) if to the Trustee:
Norwest Bank Minnesota,
National Association
Sixth & Marquette
MAC N9303-120
Minneapolis, MN 55479
Attention: Corporate Trust Service
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or
communications.
Any notice or communication to a Holder shall be mailed by
first-class mail to his address shown on the Register kept by the
Registrar. Failure to mail a notice or communication to a Holder
or any defect in such notice or communication shall not affect
its sufficiency with respect to other Holders.
<PAGE>
If a notice or communication is mailed or sent in the manner
provided above within the time prescribed, it is duly given as of
the date it is mailed, whether or not the addressee receives it,
except that notice to the Trustee shall only be effective upon
receipt thereof by the Trustee.
If the Company mails a notice or communication to Holders,
it shall mail a copy to the Trustee at the same time.
Section 14.3 Communication by Holders with Other Holders.
Holders may communicate pursuant to Section 312(b) of the
TIA with other Holders with respect to their rights under the
Securities or this Indenture. The Company, the Trustee, the
Registrar and anyone else shall have the protection of Section
312(c) of the TIA.
Section 14.4 Acts of Holders of Securities.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be
given or taken by Holders of Securities may be embodied in and
evidenced by:
(1) one or more instruments of substantially similar
tenor signed by such Holders in person or by agent or proxy
duly appointed in writing;
(2) the record of Holders of Securities voting in
favor thereof, either in person or by proxies duly appointed
in writing, at any meeting of Holders of Securities duly
called and held in accordance with the provisions of Article
8; or
(3) a combination of such instruments and any such
record.
Except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments or record or
both are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or
instruments and record (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act"
of the Holders of Securities signing such instrument or
instruments and so voting at such meeting. Proof of execution of
any such instrument or of a writing appointing any such agent or
proxy, or of the holding by any Person of a Security, shall be
sufficient for any purpose of this Indenture and (subject to
Section 5.1 hereof) conclusive in favor of the Trustee and the
Company if made in the manner provided in this Section. The
record of any meeting of Holders of Securities shall be proved in
the manner provided in Section 8.6 hereof.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be provided in any manner which the
Trustee reasonably deems sufficient.
(c) The principal amount and serial numbers of Securities held
by any Person, and the date of such Person holding the same,
shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice,
consent, election, waiver or other Act of the Holders of any
Security shall bind every future Holder of the same Security and
the Holder of every Security issued upon the registration of
transfer thereof or in exchange
<PAGE>
therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon,
whether or not notation of such action is made upon such Security.
Section 14.5 Certificate and Opinion as to Conditions
Precedent.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be
so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one
or several documents.
Any certificate or opinion of an officer of the Company may
be based, insofar as it relates to legal matters, upon an Opinion
of Counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the Opinion of Counsel with
respect to the matters upon which such certificate or opinion is
based is erroneous. Any such Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or
representations by, an officer or officers of the Company stating
that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows, or in
the exercise of reasonable care should know, that the certificate
or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but
need not, be consolidated and form one instrument.
Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture,
the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied
with and an Opinion of Counsel stating that in the opinion of
such Counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or
request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating
to such particular application or request, no additional
certificate or opinion need be furnished.
Section 14.6 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with
a condition or covenant provided for in this Indenture shall
include:
(1) a statement that each individual signing such
certificate or opinion on behalf of the Company has read
such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope
of the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
<PAGE>
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as
is necessary to enable him to express an informed opinion as
to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of
each such individual, such condition or covenant has been
complied with.
Section 14.7 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the
construction hereof.
Section 14.8 Successors and Assigns.
All covenants and agreements in this Indenture by the
Company shall bind its successors and assigns, whether so
expressed or not.
Section 14.9 Separability Clause.
In case any provision in this Indenture or the Securities
shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section 14.10 Benefits of Indenture.
Nothing contained in this Indenture or in the Securities,
express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, the holders of
Senior Debt and the Holders of Securities, any benefit or legal
or equitable right, remedy or claim under this Indenture.
Section 14.11 Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 14.12 Counterparts.
This instrument may be executed in any number of
counterparts, each of which when so executed shall be deemed to
be an original but all such counterparts shall together
constitute but one and the same instrument.
Section 14.13 Legal Holidays.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security or the last day on which a
Holder of a Security has a right to convert such Security shall
not be a Business Day at any Place of Payment or Place of
Conversion, then (notwithstanding any other provision of this
Indenture or of the Securities) payment of interest (including
<PAGE>
Liquidated Damages, if any) or principal or premium, if any, or
conversion of the Securities, need not be made at such Place of
Payment or Place of Conversion on such day, but may be made on
the next succeeding Business Day at such Place of Payment or
Place of Conversion with the same force and effect as if made on
the Interest Payment Date or Redemption Date or at the Stated
Maturity or on such last day for conversion, provided, that in
the case that payment is made on such succeeding Business Day, no
interest shall accrue on the amount so payable for the period
from and after such Interest Payment Date, Redemption Date or
Stated Maturity, as the case may be.
Section 14.14 Recourse Against Others.
No recourse for the payment of the principal of or premium,
if any, or interest (including Liquidated Damages, if any) on any
Security, or for any claim based thereon or otherwise in respect
thereof, shall be had against any incorporator, shareholder,
officer or director, as such, past, present or future, of the
Company or of any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by
the acceptance thereof and as part of the consideration for the
issue thereof, expressly waived and released.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed all as of the day and year first
above written.
CV THERAPEUTICS, INC.
By:
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By:
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF SECURITY
[FACE OF SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC") TO CV
THERAPEUTICS, INC. (OR ITS SUCCESSOR) OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, CONVERSION OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.(1)
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT); (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY RESELL
OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON
STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR
(D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS
TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE)
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY WITHIN
TWO YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH NOTE (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO
THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
NORWEST BANK MINNESOTA, N.A., AS TRUSTEE (OR ANY SUCCESSOR
TRUSTEE, AS
_______________________________
(1) This legend should be included only if the Security is
issued in global form
<PAGE>
APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT TO
CLAUSE 2(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO NORWEST BANK MINNESOTA, N.A., AS TRUSTEE (OR ANY
SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
OPINIONS AND OTHER INFORMATION AS THE COMPANY MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, THIS LEGEND WILL
BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS NOTE
EVIDENCED HEREBY PURSUANT TO CLAUSE 2(C) OR 2(D) ABOVE OR THE
EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE
EVIDENCED HEREBY.
<PAGE>
CV THERAPEUTICS, INC.
4_% Convertible Subordinated Note due 2007
CUSIP NO. __________
No.________ $___________
CV THERAPEUTICS, INC., a Delaware corporation (the
"Company", which term includes any successor corporation under
the Indenture hereinafter referred to), for value received,
hereby promises to pay to
, or its registered assigns, the principal sum of
U.S. Dollars ($ ) on March 7, 2007.
Interest Payment Dates: March 7 and September 7,
commencing September 7, 2000.
Regular Record Dates: February 20 and August 20.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this
Security to be duly executed manually or by facsimile by its duly
authorized officers.
Dated: CV THERAPEUTICS, INC.
By:
Name:
Title:
By:
Name:
Title:
Trustee's Certificate of Authentication
This is one of the 4_% Convertible Subordinated
Notes due 2007 described in the within-named
Indenture.
NORWEST BANK MINNESOTA, N.A.
as Trustee
By:
Authorized Signatory
Dated:
<PAGE>
[REVERSE OF SECURITY]
CV THERAPEUTICS, INC.
4_% Convertible Subordinated Note due 2007
Capitalized terms used herein but not defined shall have the
meanings assigned to them in the Indenture referred to below
unless otherwise indicated.
1. Principal and Interest.
CV Therapeutics, Inc., a Delaware corporation (the
"Company") promises to pay interest on the principal amount of
this Security at the Interest Rate from the date of issuance
until repayment at Maturity, redemption or repurchase. The
Company will pay interest on this Security semiannually in
arrears on March 7 and September 7 of each year (each an
"Interest Payment Date"), commencing September 7, 2000.
Interest on the Securities shall be computed (i) for any
full semiannual period for which a particular Interest Rate is
applicable on the basis of a 360-day year of twelve 30-day months
and (ii) for any period for which a particular Interest Rate is
applicable shorter than a full semiannual period for which
interest is calculated, on the basis of a 30-day month and, for
such periods of less than a month, the actual number of days
elapsed over a 30-day month.
A Holder of any Security at the close of business on a
Regular Record Date shall be entitled to receive interest on such
Security on the corresponding Interest Payment Date. A Holder of
any Security which is converted after the close of business on a
Regular Record Date and prior to the corresponding Interest
Payment Date (other than any Security whose Maturity is prior to
such Interest Payment Date) shall be entitled to receive interest
on the principal amount of such Security, notwithstanding the
conversion of such Security prior to such Interest Payment Date.
However, any such Holder which surrenders any such Security for
conversion during the period between the close of business on
such Regular Record Date and ending with the opening of business
on the corresponding Interest Payment Date shall be required to
pay the Company an amount equal to the interest on the principal
amount of such Security so converted, which is payable by the
Company to such Holder on such Interest Payment Date, at the time
such Holder surrenders such Security for conversion.
Notwithstanding the foregoing, any such Holder which surrenders
for conversion any Security which has been called for redemption
by the Company in a notice of redemption given by the Company
pursuant to Section 10.5 of the Indenture (whether the Redemption
Date for such Security is on such Interest Payment Date or
otherwise) shall be entitled to receive (and retain) such
interest and need not pay the Company an amount equal to the
interest on the principal amount of such Security so converted at
the time such Holder surrenders such Security for conversion.
In accordance with the terms of the Resale Registration
Rights Agreement, dated March 7, 2000, between the Company and
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities Inc., FleetBoston Robertson
Stephens Inc. and SG Cowen Securities Corporation, during the
first 90 days following a Registration Default (as
<PAGE>
defined in the Registration Rights Agreement), the Interest Rate borne
by the Securities shall be increased by 0.25% on:
(A) June 6, 2000, if the shelf registration statement
(the "Shelf Registration Statement") is not filed prior to
or on June 5, 2000;
(B) August 5, 2000, if the Shelf Registration
Statement is not declared effective by the Securities and
Exchange Commission prior to or on August 4, 2000;
(C) the day after the fifth Business Day after the
Shelf Registration Statement, previously declared effective,
ceases to be effective or fails to be usable, if a post-
effective amendment (or report filed pursuant to the
Exchange Act) that cures the Shelf Registration Statement is
not filed with the Securities and Exchange Commission during
such five Business Day period; or
(D) the day following the 45th or 60th day, as the
case may be, of any period that the prospectus contained in
the Shelf Registration Statement has been suspended, if such
suspension has not been terminated.
From and after the 91st day following such Registration Default,
the Interest Rate borne by the Securities shall be increased by
0.50%. In no event shall the Interest Rate borne by the
Securities be increased by more than 0.50%.
Any amount of additional interest will be payable in cash
semiannually, in arrears, on each Interest Payment Date and will
cease to accrue on the date the Registration Default is cured.
The Holder of this Security is entitled to the benefits of the
Registration Rights Agreement.
2. Method of Payment.
Interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be
paid to the person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest.
Principal of, and premium, if any, and interest on, Global
Securities will be payable to the Depositary in immediately
available funds.
Principal and premium, if any, on Physical Securities will
be payable at the office or agency of the Company maintained for
such purpose, initially the Corporate Trust Office of the
Trustee. Interest on Physical Securities will be payable by (i)
U.S. Dollar check drawn on a bank located thecity where the
Corporate Trust Office of the Trustee is located mailed to the
address of the Person entitled thereto as such address shall
appear in the Register, or (ii) upon application to the Registrar
not later than the relevant Record Date by a Holder of an
aggregate principal amount in excess of $5,000,000, wire transfer
in immediately available funds.
<PAGE>
3. Paying Agent and Registrar.
Initially, Norwest Bank Minnesota, National Association, the
Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change the Paying Agent or Registrar
without notice to any Holder.
4. Indenture.
The Company issued this Security under an Indenture, dated
as of March 7, 2000 (the "Indenture"), between the Company and
Norwest Bank Minnesota, National Association, as trustee (the
"Trustee"). The terms of the Security include those stated in
the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939, as amended ("TIA"). This
Security is subject to all such terms, and Holders are referred
to the Indenture and the TIA for a statement of all such terms.
To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Security and the terms of
the Indenture, the terms of the Indenture shall control.
5. Provisional Redemption.
The Securities may be redeemed at the election of the
Company, as a whole or from time to time in part or any date, at
any time prior to March 7, 2003 (a "Provisional Redemption"), at
a Redemption Price equal to $1,000 per $1,000 principal amount of
the Securities plus accrued and unpaid interest, if any, to but
excluding the date of redemption (the "Provisional Redemption
Date") if (i) the Closing Price of the Common Stock has exceeded
150% of the Conversion Price (as may be adjusted from time to
time) then in effect for at least 20 trading Days in any
consecutive 30-Trading Day period ending on the Trading Day prior
to the date of mailing of the provisional notice of redemption
upon not less than 20 nor more than 60 days notice (the "Notice
Date"), and (ii) a registration statement covering resales of the
Securities and Common Stock issuable upon the conversion thereof
is effective and available for use and is expected to remain
effective for the 30 days following the Provisional Redemption
Date.
Upon any such Provisional Redemption, the Company shall make
an additional payment in cash (the "Make-Whole Payment") with
respect to the Securities called for redemption to Holders on the
Notice Date in an amount equal to $107.14 per $1,000 principal
amount of the Securities, less the amount of any interest
actually paid on such Securities prior to the Notice Date. The
Company shall make the Make-Whole Payment on all Securities
called for Provisional Redemption, including those Securities
converted into Common Stock between the Notice Date and the
Provisional Redemption Date.
6. Optional Redemption.
Except as provided above, this Security is not redeemable
prior to March 7, 2003. This Security may be redeemed in whole
or in part, upon not less than 20 nor more than 60 days' notice,
at any time on or after March 7, 2003, at the option of the
Company, at the redemption price (expressed as percentages of the
principal amount) set forth below if redeemed during the 12-month
period beginning March 7 of the years indicated and ending March
6 of the following years, plus any interest accrued but not paid
prior to the Optional Redemption Date.
<PAGE>
During the Twelve Months
Commencing Redemption Prices
March 7, 2003, through March 6, 2004 102.714%
March 7, 2004, through March 6, 2005 102.036%
March 7, 2005, through March 6, 2006 101.357%
March 7, 2006 and thereafter 100.679%
If fewer than all the Securities are to be redeemed, the
Trustee shall select the particular Securities to be redeemed
from the Outstanding Securities by the methods as provided in the
Indenture. If any Security selected for partial redemption is
converted in part before termination of the conversion right with
respect to the portion of the Security so selected, the converted
portion of such Security shall be deemed to be the portion
selected for redemption (provided, however, that the Holder of
such Security so converted and deemed redeemed shall not be
entitled to any additional interest payment as a result of such
deemed redemption than such Holder would have otherwise been
entitled to receive upon conversion of such Security).
Securities which have been converted during a selection of
Securities to be redeemed may be treated by the Trustee as
Outstanding for the purpose of such selection.
On and after the Redemption Date, interest ceases to accrue
on Securities or portions of Securities called for redemption,
unless the Company defaults in the payment of the Redemption
Price and accrued and unpaid interest.
Notice of redemption will be given by the Company to the
Holders as provided in the Indenture.
7. Repurchase Right Upon a Change of Control.
If a Change in Control occurs, the Holder of Securities, at
the Holder's option, shall have the right, in accordance with the
provisions of the Indenture, to require the Company to repurchase
the Securities (or any portion of the principal amount hereof
that is at least $1,000 or an integral multiple thereof, provided
that the portion of the principal amount of this Security to be
Outstanding after such repurchase is at least equal to $1,000) at
the Repurchase Price, plus any interest accrued and unpaid to the
Repurchase Date.
Subject to the conditions provided in the Indenture, the
Company may elect to pay the Repurchase Price by delivering a
number of shares of Common Stock equal to (i) the Repurchase
Price divided by (ii) 95% of the average of the Closing Prices
per share for the five consecutive Trading Days immediately
preceding and including the third Trading Day prior to the
Repurchase Date.
No fractional shares of Common Stock will be issued upon
repurchase of any Securities. Instead of any fractional share of
Common Stock which would otherwise be issued upon conversion of
such Securities, the Company shall pay a cash adjustment as
provided in the Indenture.
<PAGE>
A Company Notice will be given by the Company to the Holders
as provided in the Indenture. To exercise a repurchase Right, a
Holder must deliver to the Trustee a written notice as provided
in the Indenture.
8. Conversion Rights.
Subject to and upon compliance with the provisions of the
Indenture, the Holder of Securities is entitled, at such Holder's
option, at any time before the close of business on March 1, 2007
to convert the Holder's Securities (or any portion of the
principal amount hereof which is $1,000 or an integral multiple
thereof), at the principal amount thereof or of such portion,
into duly authorized, fully paid and nonassessable shares of
Common Stock of the Company at the Conversion Price in effect at
the time of conversion.
In the case of a Security (or a portion thereof) is called
for redemption, such conversion right in respect of the Security
(or such portion thereof) so called, shall expire at the close of
business on the second Business Day preceding the Redemption
Date, unless the Company defaults in making the payment due upon
redemption. In the case of a Change of Control for which the
Holder exercises its Repurchase Right with respect to a Security
(or a portion thereof), such conversion right in respect of the
Security (or portion thereof) shall expire at the close of
business on the Business Day preceding the Repurchase Date.
The Conversion Price shall be initially equal to $63.84 per
share of Common Stock. The Conversion Price shall be adjusted
under certain circumstances as provided in the Indenture.
To exercise the conversion right, the Holder must surrender
the Security (or portion thereof) duly endorsed or assigned to
the Company or in blank, at the office of the Conversion Agent,
accompanied by a duly signed conversion notice to the Company.
Any Security surrendered for conversion during the period between
the close of business on any Regular Record Date to the opening
of business on the corresponding Interest Payment Date (other
than any Security whose Maturity is prior to such Interest
Payment Date), shall be accompanied by payment in New York
Clearing House funds or other funds acceptable to the Company of
an amount equal to the interest payable on such Interest Payment
Date by the Company on the principal amount of the Security being
surrendered for conversion. Notwithstanding the foregoing, any
such Holder which surrenders for conversion any Security which
has been called for redemption by the Company in a notice of
redemption given by the Company pursuant to Section 10.5 hereof
(whether the Redemption Date for such Security is on such
Interest Payment Date or otherwise), need not pay the Company an
amount equal to the interest in the principal amount of such
Security so converted at the time such Holder surrenders such
Security for conversion.
No fractional shares of Common Stock will be issued upon
conversion of any Securities. Instead of any fractional share of
Common Stock which would otherwise be issued upon conversion of
such Securities, the Company shall pay a cash adjustment as
provided in the Indenture.
<PAGE>
9. Subordination.
The Indebtedness evidenced by this Security is, to the
extent and in the manner provided in the Indenture, subordinated
and subject in right of payment to the prior payment in full of
all amounts then due on all Senior Debt of the Company, and this
Security is issued subject to such provisions of the Indenture
with respect thereto. Each Holder of this Security, by accepting
the same, (a) agrees to and shall be bound by such provisions,
(b) authorizes and directs the Trustee on such Holder's behalf to
take such action as may be necessary or appropriate to effectuate
the subordination so provided and (c) appoints the Trustee such
Holder's attorney-in-fact for any and all such purposes.
10. Denominations; Transfer; Exchange.
The Securities are issuable in registered form, without
coupons, in denominations of $1,000 and integral multiples of
$1,000 in excess thereof. A Holder may register the transfer or
exchange of Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company
may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture.
In the event of a redemption in part, the Company will not
be required (a) to register the transfer of, or exchange,
Securities for a period of 15 days immediately preceding the date
notice is given identifying the serial numbers of the Securities
called for such redemption, or (b) to register the transfer of,
or exchange, any such Securities, or portion thereof, called for
redemption.
In the event of redemption, conversion or repurchase of the
Securities in part only, a new Security or Securities for the
unredeemed, unconverted or unrepurchased portion thereof will be
issued in the name of the Holder hereof.
11. Persons Deemed Owners.
The registered Holder of this Security shall be treated as
its owner for all purposes.
12. Unclaimed Money.
The Trustee and the Paying Agent shall pay to the Company
any money held by them for the payment of principal, premium, if
any, or interest that remains unclaimed for two years after the
date upon which such payment shall have become due. After
payment to the Company, Holders entitled to the money must look
to the Company for payment as general creditors unless an
applicable abandoned property law designates another Person, and
all liability of the Trustee and such Paying Agent with respect
to such money shall cease.
13. Discharge Prior to Redemption or Maturity.
Subject to certain conditions contained in the Indenture,
the Company may discharge its obligations under the Securities
and the Indenture if (1) (a) all of the Outstanding
<PAGE>
Securities shall become due and payable at their scheduled Maturity
within one year or (b) all of the Outstanding Securities are scheduled
for redemption within one year, and (2) the Company shall have
deposited with the Trustee money and/or U.S. Government
Obligations sufficient to pay the principal of, and premium, if
any, and interest on, all of the Outstanding Securities on the
date of Maturity or redemption, as the case may be.
14. Amendment; Supplement; Waiver.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the
Holders of the Securities under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Outstanding
Securities (or such lesser amount as shall have acted at a
meeting pursuant to the provisions of the Indenture). The
Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities at
the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by
the Holder of this Security shall be conclusive and binding upon
such Holder and upon all future Holders of this Security and of
any Security issued upon registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Security or such other
Security.
No reference herein to the Indenture and no provision of
this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and premium, if any, and interest
(including Liquidated Damages, if any) on this Security at the
times, places and rate, and in the coin or currency, herein
prescribed or to convert this Security (or pay cash in lieu of
conversion) as provided in the Indenture.
15. Defaults and Remedies.
The Indenture provides that an Event of Default with respect
to the Securities occurs when any of the following occurs:
(a) the Company defaults in the payment of the
principal of or premium, if any, on any of the Securities
when it becomes due and payable at Maturity, upon redemption
or exercise of a Repurchase Right or otherwise, whether or
not such payment is prohibited by the subordination
provisions of Article 13 of the Indenture;
(b) the Company defaults in the payment of interest on
any of the Securities when it becomes due and payable and
such default continues for a period of 30 days, whether or
not such payment is prohibited by the subordination
provisions of Article 13 of the Indenture;
(c) the Company fails to deliver shares of Common
Stock, together with cash instead of fractional shares, when
those shares of Common Stock or cash instead of fractional
shares are required to be delivered following conversion of
a Security in accordance with the provisions of Article 12
of the Indenture;
<PAGE>
(d) the Company fails to perform or observe any other
term, covenant or agreement contained in the Securities or
the Indenture and such default continues for a period of 60
days after written notice of such failure is given as
specified in the Indenture;
(e) (i) the Company fails to make any payment by the
end of the applicable grace period, if any, after the
maturity of any Indebtedness for borrowed money in an amount
in excess of $5,000,000, or (ii) there is an acceleration of
any Indebtedness for borrowed money in an amount in excess
of $5,000,000 because of a default with respect to such
Indebtedness without such Indebtedness having been
discharged or such acceleration having been cured, waived,
rescinded or annulled, in the case of either clause (i) or
(ii) above, for a period of 30 days after written notice is
given to the Company as specified in the Indenture; and
(f) there are certain events of bankruptcy, insolvency
or reorganization of the Company.
If an Event of Default shall occur and be continuing, the
principal of all the Securities may be declared due and payable
in the manner and with the effect provided in the Indenture.
16. Authentication.
This Security shall not be valid until the Trustee (or
authenticating agent) executes the certificate of authentication
on the other side of this Security.
17. Abbreviations.
Customary abbreviations may be used in the name of a Holder
or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right
of survivorship and not as tenants in common), CUST (= Custodian)
and U/G/M/A (= Uniform Gifts to Minors Act).
18. Additional Rights of Holders of Transfer Restricted
Securities.
In addition to the rights provided to Holders under the
Indenture, Holders of Transfer Restricted Securities shall have
all the rights set forth in the Registration Rights Agreement.
19. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on this Security and the
Trustee may use CUSIP numbers in notices of redemption as a
convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on this Security or as
contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
<PAGE>
20. Governing Law.
The Indenture and this Security shall be governed by, and
construed in accordance with, the law of the State of New York.
21. Successor Corporation.
In the event a successor corporation assumes all the
obligations of the Company under this Security, pursuant to the
terms hereof and of the Indenture, the Company will be released
from all such obligations.
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below and have
your signature guaranteed: (I) or (we) assign and transfer this
Security to:
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
to transfer this Security on the books of the Company. The agent
may substitute another to act for him.
Dated: Your Name:
(Print your name exactly as it
appears on the face of this
Security)
Your Signature:
(Sign exactly as your name appears
on the face of this Security)
Signature Guarantee*:
* Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor acceptable to the Trustee).
<PAGE>
In connection with any transfer of this Security occurring prior
to the end of the period referred to in Rule 144(k) under the
Securities Act, the undersigned confirms that without utilizing
any general solicitation or general advertising that:
[Check One]
[ ] (a) this Security is being transferred in compliance with
the exemption from registration under the Securities Act of 1933,
as amended, provided by Rule 144A thereunder.
or
[ ] (b) this Security is being transferred other than in
accordance with (a) above and documents are being furnished which
comply with the conditions of transfer set forth in this Security
and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other
Registrar shall not be obligated to register this Security in the
name of any Person other than the Holder hereof unless the
conditions to any such transfer of registration set forth herein
and in Sections 2.7, 2.8 and 2.9 of the Indenture shall have been
satisfied.
Dated:
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
Signature Guarantee:
Signature must be guaranteed by a
participant in a recognized signature
guaranty medallion program or other
signature guarantor acceptable to the
Trustee.
<PAGE>
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is
purchasing this Security for its own account or an account with
respect to which it exercises sole investment discretion, in each
case for investment and not with a view to distribution, and that
it and any such account is a "Qualified Institutional Buyer"
within the meaning of Rule 144A under the Securities Act of 1933
and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant
to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
NOTICE: To be executed by an executive
officer
<PAGE>
CONVERSION NOTICE
TO: CV THERAPEUTICS, INC.
3172 Porter Drive
Palo Alto, California 94304
The undersigned registered owner of this Security hereby
irrevocably exercises the option to convert this Security, or the
portion hereof (which is $1,000 principal amount or an integral
multiple thereof) below designated, into shares of Common Stock
in accordance with the terms of the Indenture referred to in this
Security, and directs that the shares issuable and deliverable
upon such conversion, together with any check in payment for
fractional shares and any Securities representing any unconverted
principal amount hereof, be issued and delivered to the
registered holder hereof unless a different name has been
indicated below. If shares or any portion of this Security not
converted are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable
with respect thereto. Any amount required to be paid to the
undersigned on account of interest (including Liquidated Damages,
if any) accompanies this Security.
Dated: Your Name:
(Print your name exactly as it
appears on the face of this
Security)
Your Signature:
(Sign exactly as your name appears
on the face of this Security)
Signature Guarantee*:
Social Security or other Taxpayer
Identification Number:
Principal amount to be converted (if less than all): $
* Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor acceptable to the Trustee).
<PAGE>
Fill in for registration of shares (if to be issued) and
Securities (if to be delivered) other than to and in the name of
the registered holder:
(Name)
(Street Address)
(City, State and Zip Code)
<PAGE>
NOTICE OF EXERCISE OF REPURCHASE RIGHT
TO: CV THERAPEUTICS, INC.
3172 Porter Drive
Palo Alto, California 94304
The undersigned registered owner of this Security hereby
irrevocably acknowledges receipt of a notice from CV
Therapeutics, Inc. (the "Company") as to the occurrence of a
Change of Control with respect to the Company and requests and
instructs the Company to repay the entire principal amount of
this Security, or the portion thereof (which is $1,000 principal
amount or an integral multiple thereof) below designated, in
accordance with the terms of the Indenture referred to in this
Security, together with interest (including Liquidated Damages,
if any) accrued and unpaid to, but excluding, such date, to the
registered holder hereof, in cash.
Dated: Your Name:
(Print your name exactly as it
appears on the face of this
Security)
Your Signature:
(Sign exactly as your name appears
on the face of this Security)
Signature Guarantee*:
Social Security or other Taxpayer
Identification Number:
Principal amount to be repaid (if less than all): $
* Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor acceptable to the Trustee).
<PAGE>
SCHEDULE OF EXCHANGES FOR PHYSICAL SECURITIES(2)
The following exchanges of a part of this Global
Security for Physical Securities have been made:
Date of Amount of Amount of Principal Signature
Exchange decrease in increase in Amount of of
Principal Principal this Global authorized
Amount of Amount of Security officer of
this Global this Global following Trustee
Security Security such
decrease
(or
increase)
_______________________________
(2) This schedule should be included only if the Security is
issued in global form.
<PAGE>
INDENTURE
between
CV THERAPEUTICS, INC.,
as Issuer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
as Trustee
4_% CONVERTIBLE SUBORDINATED NOTES DUE 2007
Dated as of March 7, 2000
<PAGE>
CROSS-REFERENCE TABLE*
Trust Indenture Indenture
Act Section Section
310(a)(1) 5.11
(a)(2) 5.11
(a)(3) n/a
(a)(4) n/a
(a)(5) 5.11
(b) 5.3; 5.11
(c) n/a
311(a) 5.12
(b) 5.12
(c) n/a
312(a) 2.10
(b) 14.3
(c) 14.3
313(a) 5.7
(b)(1) n/a
(b)(2) 5.7
(c) 5.7; 14.2
(d) 5.7
314(a)(1), (2), (3) 9.6; 14.6
(a)(4) 9.6; 9.7; 14.6
(b) n/a
(c)(1) 14.5
(c)(2) 14.5
(c)(3) n/a
(d) n/a
(e) 14.6
(f) n/a
315(a) 5.1(a)
(b) 5.6; 14.2
(c) 5.1(b)
(d) 5.1(c)
(e) 4.14
316(a)(last sentence) 2.13
(a)(1)(A) 4.5
(a)(1)(B) 4.4
(a)(2) n/a
(b) 4.7
<PAGE>
(c) 7.4
317(a)(1) 4.8
(a)(2) 4.9
(b) 2.5
318(a) 14.1
(b) n/a
(c) 14.1
- --------------------------------
"n/a" means not applicable.
*This Cross-Reference Table shall not, for any purpose, be deemed
to be a part of the Indenture.
<PAGE>
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions. 2
Section 1.2 Incorporation by Reference of Trust Indenture Act. 13
Section 1.3 Rules of Construction. 14
ARTICLE 2 THE SECURITIES
Section 2.1 Title and Terms. 15
Section 2.2 Form of Securities. 16
Section 2.3 Legends. 17
Section 2.4 Execution, Authentication, Delivery and Dating. 21
Section 2.5 Registrar and Paying Agent. 21
Section 2.6 Paying Agent to Hold Assets in Trust. 22
Section 2.7General Provisions Relating to Transfer and Exchange. 23
Section 2.8 Book-Entry Provisions for the Global Securities. 23
Section 2.9 Special Transfer Provisions. 25
Section 2.10 Holder Lists. 26
Section 2.11 Persons Deemed Owners. 26
Section 2.12 Mutilated, Destroyed, Lost or Stolen Securities. 27
Section 2.13 Treasury Securities. 27
Section 2.14 Temporary Securities. 28
Section 2.15 Cancellation. 28
Section 2.16 CUSIP Numbers. 28
Section 2.17 Defaulted Interest. 29
ARTICLE 3 SATISFACTION AND DISCHARGE
Section 3.1 Satisfaction and Discharge of Indenture. 30
Section 3.2 Deposited Monies to Be Held in Trust. 31
Section 3.3 Return of Unclaimed Monies. 31
ARTICLE 4 DEFAULTS AND REMEDIES
Section 4.1 Events of Default. 32
Section 4.2 Acceleration of Maturity; Rescission and Annulment. 33
Section 4.3 Other Remedies. 34
Section 4.4 Waiver of Past Defaults. 34
Section 4.5 Control by Majority. 34
Section 4.6 Limitation on Suit. 35
Section 4.7 Unconditional Rights of Holders to Receive Payment
and to Convert. 35
Section 4.8 Collection of Indebtedness and Suits for Enforcement
by the Trustee. 36
Section 4.9 Trustee May File Proofs of Claim. 36
Section 4.10 Restoration of Rights and Remedies. 37
<PAGE>
Section 4.11 Rights and Remedies Cumulative. 37
Section 4.12 Delay or Omission Not Waiver. 38
Section 4.13 Application of Money Collected. 38
Section 4.14 Undertaking for Costs. 38
Section 4.15 Waiver of Stay or Extension Laws. 39
ARTICLE 5 THE TRUSTEE
Section 5.1 Certain Duties and Responsibilities. 40
Section 5.2 Certain Rights of Trustee. 41
Section 5.3 Individual Rights of Trustee. 42
Section 5.4 Money Held in Trust. 42
Section 5.5 Trustee's Disclaimer. 42
Section 5.6 Notice of Defaults. 43
Section 5.7 Reports by Trustee to Holders. 43
Section 5.8 Compensation and Indemnification. 43
Section 5.9 Replacement of Trustee. 44
Section 5.10 Successor Trustee by Merger, Etc. 45
Section 5.11 Corporate Trustee Required; Eligibility. 45
Section 5.12 Collection of Claims Against the Company. 45
ARTICLE 6 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 6.1Company May Consolidate, Etc., Only on Certain Terms. 46
Section 6.2 Successor Substituted. 46
ARTICLE 7 AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 7.1 Without Consent of Holders of Securities. 48
Section 7.2 With Consent of Holders of Securities. 49
Section 7.3 Compliance with Trust Indenture Act. 50
Section 7.4 Revocation of Consents and Effect of Consents or
Votes. 50
Section 7.5 Notation on or Exchange of Securities. 50
Section 7.6 Trustee to Sign Amendment, Etc. 51
ARTICLE 8 MEETING OF HOLDERS OF SECURITIES
Section 8.1 Purposes for Which Meetings May Be Called. 52
Section 8.2 Call Notice and Place of Meetings. 52
Section 8.3 Persons Entitled to Vote at Meetings. 52
Section 8.4 Quorum; Action. 53
Section 8.5 Determination of Voting Rights; Conduct and
Adjournment of Meetings. 53
Section 8.6 Counting Votes and Recording Action of Meetings. 54
ARTICLE 9 COVENANTS
<PAGE>
Section 9.1 Payment of Principal, Premium and Interest. 55
Section 9.2 Maintenance of Offices or Agencies. 55
Section 9.3 Corporate Existence. 56
Section 9.4 Maintenance of Properties. 56
Section 9.5 Payment of Taxes and Other Claims. 56
Section 9.6 Reports. 56
Section 9.7 Compliance Certificate. 57
Section 9.8 Resale of Certain Securities. 57
ARTICLE 10 REDEMPTION OF SECURITIES
Section 10.1 Provisional Redemption. 58
Section 10.2 Optional Redemption. 58
Section 10.3 Notice to Trustee. 59
Section 10.4 Selection of Securities to Be Redeemed. 59
Section 10.5 Notice of Redemption. 59
Section 10.6 Effect of Notice of Redemption. 60
Section 10.7 Deposit of Redemption Price. 61
Section 10.8 Securities Redeemed in Part. 61
ARTICLE 11 REPURCHASE AT THE OPTION OF A HOLDER UPON A CHANGE OF
CONTROL
Section 11.1 Repurchase Right. 62
Section 11.2 Conditions to the Company's Election to Pay the
Repurchase Price in Common Stock. 62
Section 11.3 Notices; Method of Exercising Repurchase Right,
Etc. 63
ARTICLE 12 CONVERSION OF SECURITIES
Section 12.1 Conversion Right and Conversion Price. 67
Section 12.2 Exercise of Conversion Right. 67
Section 12.3 Fractions of Shares. 68
Section 12.4 Adjustment of Conversion Price. 68
Section 12.5 Notice of Adjustments of Conversion Price. 77
Section 12.6 Notice Prior to Certain Actions. 78
Section 12.7 Company to Reserve Common Stock. 79
Section 12.8 Taxes on Conversions. 79
Section 12.9 Covenant as to Common Stock. 79
Section 12.10 Cancellation of Converted Securities. 79
Section 12.11 Effect of Recapitalization, Reclassification,
Consolidation, Merger or Sale. 79
Section 12.12 Responsibility of Trustee for Conversion
Provisions. 81
ARTICLE 13 SUBORDINATION
<PAGE>
Section 13.1 Securities Subordinated to Senior Debt. 82
Section 13.2 Subrogation. 84
Section 13.3 Obligation of the Company Is Absolute and
Unconditional. 84
Section 13.4 Maturity of or Default on Senior Debt. 84
Section 13.5 Payments on Securities Permitted. 85
Section 13.6 Effectuation of Subordination by Trustee. 85
Section 13.7 Knowledge of Trustee. 85
Section 13.8 Trustee's Relation to Senior Debt. 86
Section 13.9 Rights of Holders of Senior Debt Not Impaired. 86
Section 13.10 Modification of Terms of Senior Debt. 86
Section 13.11 Certain Conversions Not Deemed Payment. 86
ARTICLE 14 OTHER PROVISIONS OF GENERAL APPLICATION
Section 14.1 Trust Indenture Act Controls. 88
Section 14.2 Notices. 88
Section 14.3 Communication by Holders with Other Holders. 89
Section 14.4 Acts of Holders of Securities. 89
Section 14.5 Certificate and Opinion as to Conditions Precedent. 90
Section 14.6 Statements Required in Certificate or Opinion. 90
Section 14.7 Effect of Headings and Table of Contents. 91
Section 14.8 Successors and Assigns. 91
Section 14.9 Separability Clause. 91
Section 14.10 Benefits of Indenture. 91
Section 14.11 Governing Law. 91
Section 14.12 Counterparts. 91
Section 14.13 Legal Holidays. 91
Section 14.14 Recourse Against Others. 92
EXHIBITS
EXHIBIT A: Form of Security A-1
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC") TO CV
THERAPEUTICS, INC. (OR ITS SUCCESSOR) OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, CONVERSION OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR IN SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED
OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS
A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT); (2) AGREES THAT IT WILL NOT
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTE
EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER THE NOTE
EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON
CONVERSION OF SUCH NOTE EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER
IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO
BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE NOTE
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THE NOTE EVIDENCED HEREBY WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF SUCH NOTE (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(D) ABOVE), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO
THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
NORWEST BANK MINNESOTA, N.A., AS TRUSTEE (OR ANY SUCCESSOR
TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFER IS
PURSUANT TO CLAUSE 2(C) ABOVE, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO NORWEST BANK MINNESOTA, N.A., AS
TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS AND OTHER INFORMATION AS THE
COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE
<PAGE>
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, THIS LEGEND WILL
BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS NOTE EVIDENCED
HEREBY PURSUANT TO CLAUSE 2(C) OR 2(D) ABOVE OR THE EXPIRATION OF
TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED
HEREBY.
<PAGE>
CV THERAPEUTICS, INC.
4 3/4 % Convertible Subordinated Note due 2007
CUSIP NO. 126667 AA 2
No. 1 $175,000,000
CV THERAPEUTICS, INC., a Delaware corporation (the
"Company", which term includes any successor corporation
under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co., or its
registered assigns, the principal sum of One Hundred Seventy
Five Million U.S. Dollars ($175,000,000) on March 7, 2007.
Interest Payment Dates: March 7 and September 7,
commencing September 7, 2000.
Regular Record Dates: February 20 and August 20.
Reference is hereby made to the further provisions
of this Security set forth on the reverse hereof, which
further provisions shall for all purposes have the same
effect as if set forth at this place.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this
Security to be duly executed manually or by facsimile by its
duly authorized officers.
Dated: CV THERAPEUTICS, INC.
By:
Name:
Title:
By:
Name:
Title:
Trustee's Certificate of Authentication
This is one of the 4 3/4 % Convertible Subordinated
Notes due 2007 described in the within-named
Indenture.
NORWEST BANK MINNESOTA, N.A.
as Trustee
By:
Authorized Signatory
Dated:
<PAGE>
[REVERSE OF SECURITY]
CV THERAPEUTICS, INC.
4 3/4 % Convertible Subordinated Note due 2007
Capitalized terms used herein but not defined shall
have the meanings assigned to them in the Indenture referred
to below unless otherwise indicated.
1. Principal and Interest.
CV Therapeutics, Inc., a Delaware corporation (the
"Company") promises to pay interest on the principal amount
of this Security at the Interest Rate from the date of
issuance until repayment at Maturity, redemption or
repurchase. The Company will pay interest on this Security
semiannually in arrears on March 7 and September 7 of each
year (each an "Interest Payment Date"), commencing September
7, 2000.
Interest on the Securities shall be computed (i) for
any full semiannual period for which a particular Interest
Rate is applicable on the basis of a 360-day year of twelve
30-day months and (ii) for any period for which a particular
Interest Rate is applicable shorter than a full semiannual
period for which interest is calculated, on the basis of a
30-day month and, for such periods of less than a month, the
actual number of days elapsed over a 30-day month.
A Holder of any Security at the close of business on a
Regular Record Date shall be entitled to receive interest on
such Security on the corresponding Interest Payment Date. A
Holder of any Security which is converted after the close of
business on a Regular Record Date and prior to the
corresponding Interest Payment Date (other than any Security
whose Maturity is prior to such Interest Payment Date) shall
be entitled to receive interest on the principal amount of
such Security, notwithstanding the conversion of such
Security prior to such Interest Payment Date. However, any
such Holder which surrenders any such Security for
conversion during the period between the close of business
on such Regular Record Date and ending with the opening of
business on the corresponding Interest Payment Date shall be
required to pay the Company an amount equal to the interest
on the principal amount of such Security so converted, which
is payable by the Company to such Holder on such Interest
Payment Date, at the time such Holder surrenders such
Security for conversion. Notwithstanding the foregoing, any
such Holder which surrenders for conversion any Security
which has been called for redemption by the Company in a
notice of redemption given by the Company pursuant to
Section 10.5 of the Indenture (whether the Redemption Date
for such Security is on such Interest Payment Date or
otherwise) shall be entitled to receive (and retain) such
interest and need not pay the Company an amount equal to the
interest on the principal amount of such Security so
converted at the time such Holder surrenders such Security
for conversion.
In accordance with the terms of the Resale Registration
Rights Agreement, dated March 7, 2000, between the Company
and Merrill Lynch & Co., Merrill Lynch, Pierce,
<PAGE>
Fenner & Smith Incorporated, J.P. Morgan Securities Inc., FleetBoston
Robertson Stephens Inc. and SG Cowen Securities Corporation,
during the first 90 days following a Registration Default
(as defined in the Registration Rights Agreement), the
Interest Rate borne by the Securities shall be increased by
0.25% on:
(A) June 6, 2000, if the shelf registration
statement (the "Shelf Registration Statement") is not
filed prior to or on June 5, 2000;
(B) August 5, 2000, if the Shelf Registration
Statement is not declared effective by the Securities
and Exchange Commission prior to or on August 4, 2000;
(C) the day after the fifth Business Day after
the Shelf Registration Statement, previously declared
effective, ceases to be effective or fails to be
usable, if a post-effective amendment (or report filed
pursuant to the Exchange Act) that cures the Shelf
Registration Statement is not filed with the Securities
and Exchange Commission during such five Business Day
period; or
(D) the day following the 45th or 60th day, as
the case may be, of any period that the prospectus
contained in the Shelf Registration Statement has been
suspended, if such suspension has not been terminated.
From and after the 91st day following such Registration
Default, the Interest Rate borne by the Securities shall be
increased by 0.50%. In no event shall the Interest Rate
borne by the Securities be increased by more than 0.50%.
Any amount of additional interest will be payable in
cash semiannually, in arrears, on each Interest Payment Date
and will cease to accrue on the date the Registration
Default is cured. The Holder of this Security is entitled
to the benefits of the Registration Rights Agreement.
2. Method of Payment.
Interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the person in whose name that
Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record
Date for such interest.
Principal of, and premium, if any, and interest on,
Global Securities will be payable to the Depositary in
immediately available funds.
Principal and premium, if any, on Physical Securities
will be payable at the office or agency of the Company
maintained for such purpose, initially the Corporate Trust
Office of the Trustee. Interest on Physical Securities will
be payable by (i) U.S. Dollar check drawn on a bank located
thecity where the Corporate Trust Office of the Trustee is
located mailed to the address of the Person entitled thereto
as such address shall appear in the Register, or (ii) upon
application to the Registrar not later than the relevant
Record
<PAGE>
Date by a Holder of an aggregate principal amount in
excess of $5,000,000, wire transfer in immediately available
funds.
3. Paying Agent and Registrar.
Initially, Norwest Bank Minnesota, National
Association, the Trustee under the Indenture, will act as
Paying Agent and Registrar. The Company may change the
Paying Agent or Registrar without notice to any Holder.
4. Indenture.
The Company issued this Security under an Indenture,
dated as of March 7, 2000 (the "Indenture"), between the
Company and Norwest Bank Minnesota, National Association, as
trustee (the "Trustee"). The terms of the Security include
those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939,
as amended ("TIA"). This Security is subject to all such
terms, and Holders are referred to the Indenture and the TIA
for a statement of all such terms. To the extent permitted
by applicable law, in the event of any inconsistency between
the terms of this Security and the terms of the Indenture,
the terms of the Indenture shall control.
5. Provisional Redemption.
The Securities may be redeemed at the election of the
Company, as a whole or from time to time in part or any
date, at any time prior to March 7, 2003 (a "Provisional
Redemption"), at a Redemption Price equal to $1,000 per
$1,000 principal amount of the Securities plus accrued and
unpaid interest, if any, to but excluding the date of
redemption (the "Provisional Redemption Date") if (i) the
Closing Price of the Common Stock has exceeded 150% of the
Conversion Price (as may be adjusted from time to time) then
in effect for at least 20 trading Days in any consecutive 30-
Trading Day period ending on the Trading Day prior to the
date of mailing of the provisional notice of redemption upon
not less than 20 nor more than 60 days notice (the "Notice
Date"), and (ii) a registration statement covering resales
of the Securities and Common Stock issuable upon the
conversion thereof is effective and available for use and is
expected to remain effective for the 30 days following the
Provisional Redemption Date.
Upon any such Provisional Redemption, the Company shall
make an additional payment in cash (the "Make-Whole
Payment") with respect to the Securities called for
redemption to Holders on the Notice Date in an amount equal
to $107.14 per $1,000 principal amount of the Securities,
less the amount of any interest actually paid on such
Securities prior to the Notice Date. The Company shall make
the Make-Whole Payment on all Securities called for
Provisional Redemption, including those Securities converted
into Common Stock between the Notice Date and the
Provisional Redemption Date.
6. Optional Redemption.
Except as provided above, this Security is not
redeemable prior to March 7, 2003. This Security may be
redeemed in whole or in part, upon not less than 20 nor more
than 60 days' notice, at any time on or after March 7, 2003,
at the option of the Company, at
<PAGE>
the redemption price (expressed as percentages of the principal
amount) set forth below if redeemed during the 12-month period
beginning March 7 of the years indicated and ending March 6 of the
following years, plus any interest accrued but not paid prior to the
Optional Redemption Date.
During the Twelve Months
Commencing Redemption Prices
March 7, 2003, through March 6, 2004 102.714%
March 7, 2004, through March 6, 2005 102.036%
March 7, 2005, through March 6, 2006 101.357%
March 7, 2006 and thereafter 100.679%
If fewer than all the Securities are to be redeemed,
the Trustee shall select the particular Securities to be
redeemed from the Outstanding Securities by the methods as
provided in the Indenture. If any Security selected for
partial redemption is converted in part before termination
of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security
shall be deemed to be the portion selected for redemption
(provided, however, that the Holder of such Security so
converted and deemed redeemed shall not be entitled to any
additional interest payment as a result of such deemed
redemption than such Holder would have otherwise been
entitled to receive upon conversion of such Security).
Securities which have been converted during a selection of
Securities to be redeemed may be treated by the Trustee as
Outstanding for the purpose of such selection.
On and after the Redemption Date, interest ceases to
accrue on Securities or portions of Securities called for
redemption, unless the Company defaults in the payment of
the Redemption Price and accrued and unpaid interest.
Notice of redemption will be given by the Company to
the Holders as provided in the Indenture.
7. Repurchase Right Upon a Change of Control.
If a Change in Control occurs, the Holder of
Securities, at the Holder's option, shall have the right, in
accordance with the provisions of the Indenture, to require
the Company to repurchase the Securities (or any portion of
the principal amount hereof that is at least $1,000 or an
integral multiple thereof, provided that the portion of the
principal amount of this Security to be Outstanding after
such repurchase is at least equal to $1,000) at the
Repurchase Price, plus any interest accrued and unpaid to
the Repurchase Date.
Subject to the conditions provided in the Indenture,
the Company may elect to pay the Repurchase Price by
delivering a number of shares of Common Stock equal to (i)
the Repurchase Price divided by (ii) 95% of the average of
the Closing Prices per share for the five consecutive
Trading Days immediately preceding and including the third
Trading Day prior to the Repurchase Date.
<PAGE>
No fractional shares of Common Stock will be issued
upon repurchase of any Securities. Instead of any
fractional share of Common Stock which would otherwise be
issued upon conversion of such Securities, the Company shall
pay a cash adjustment as provided in the Indenture.
A Company Notice will be given by the Company to the
Holders as provided in the Indenture. To exercise a
repurchase Right, a Holder must deliver to the Trustee a
written notice as provided in the Indenture.
8. Conversion Rights.
Subject to and upon compliance with the provisions of
the Indenture, the Holder of Securities is entitled, at such
Holder's option, at any time before the close of business on
March 1, 2007 to convert the Holder's Securities (or any
portion of the principal amount hereof which is $1,000 or an
integral multiple thereof), at the principal amount thereof
or of such portion, into duly authorized, fully paid and
nonassessable shares of Common Stock of the Company at the
Conversion Price in effect at the time of conversion.
In the case of a Security (or a portion thereof) is
called for redemption, such conversion right in respect of
the Security (or such portion thereof) so called, shall
expire at the close of business on the second Business Day
preceding the Redemption Date, unless the Company defaults
in making the payment due upon redemption. In the case of a
Change of Control for which the Holder exercises its
Repurchase Right with respect to a Security (or a portion
thereof), such conversion right in respect of the Security
(or portion thereof) shall expire at the close of business
on the Business Day immediately preceding the Repurchase
Date.
The Conversion Price shall be initially equal to $63.84
per share of Common Stock. The Conversion Price shall be
adjusted under certain circumstances as provided in the
Indenture.
To exercise the conversion right, the Holder must
surrender the Security (or portion thereof) duly endorsed or
assigned to the Company or in blank, at the office of the
Conversion Agent, accompanied by a duly signed conversion
notice to the Company. Any Security surrendered for
conversion during the period between the close of business
on any Regular Record Date to the opening of business on the
corresponding Interest Payment Date (other than any Security
whose Maturity is prior to such Interest Payment Date),
shall be accompanied by payment in New York Clearing House
funds or other funds acceptable to the Company of an amount
equal to the interest payable on such Interest Payment Date
by the Company on the principal amount of the Security being
surrendered for conversion. Notwithstanding the foregoing,
any such Holder which surrenders for conversion any Security
which has been called for redemption by the Company in a
notice of redemption given by the Company pursuant to
Section 10.5 hereof (whether the Redemption Date for such
Security is on such Interest Payment Date or otherwise),
need not pay the Company an amount equal to the interest in
the principal
<PAGE>
amount of such Security so converted at the time such Holder
surrenders such Security for conversion.
No fractional shares of Common Stock will be issued
upon conversion of any Securities. Instead of any
fractional share of Common Stock which would otherwise be
issued upon conversion of such Securities, the Company shall
pay a cash adjustment as provided in the Indenture.
9. Subordination.
The Indebtedness evidenced by this Security is, to the
extent and in the manner provided in the Indenture,
subordinated and subject in right of payment to the prior
payment in full of all amounts then due on all Senior Debt
of the Company, and this Security is issued subject to such
provisions of the Indenture with respect thereto. Each
Holder of this Security, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on such Holder's behalf to take such
action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee such
Holder's attorney-in-fact for any and all such purposes.
10. Denominations; Transfer; Exchange.
The Securities are issuable in registered form, without
coupons, in denominations of $1,000 and integral multiples
of $1,000 in excess thereof. A Holder may register the
transfer or exchange of Securities in accordance with the
Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer
documents and the Company may require a Holder to pay any
taxes and fees required by law or permitted by the
Indenture.
In the event of a redemption in part, the Company will
not be required (a) to register the transfer of, or
exchange, Securities for a period of 15 days immediately
preceding the date notice is given identifying the serial
numbers of the Securities called for such redemption, or (b)
to register the transfer of, or exchange, any such
Securities, or portion thereof, called for redemption.
In the event of redemption, conversion or repurchase of
the Securities in part only, a new Security or Securities
for the unredeemed, unconverted or unrepurchased portion
thereof will be issued in the name of the Holder hereof.
11. Persons Deemed Owners.
The registered Holder of this Security shall be treated
as its owner for all purposes.
12. Unclaimed Money.
The Trustee and the Paying Agent shall pay to the
Company any money held by them for the payment of principal,
premium, if any, or interest that remains unclaimed for two
years after the date upon which such payment shall have
become due. After payment
<PAGE>
to the Company, Holders entitled to the money must look to the
Company for payment as general creditors unless an applicable abandoned
property law designates another Person, and all liability of the Trustee
and such Paying Agent with respect to such money shall cease.
13. Discharge Prior to Redemption or Maturity.
Subject to certain conditions contained in the
Indenture, the Company may discharge its obligations under
the Securities and the Indenture if (1) (a) all of the
Outstanding Securities shall become due and payable at their
scheduled Maturity within one year or (b) all of the
Outstanding Securities are scheduled for redemption within
one year, and (2) the Company shall have deposited with the
Trustee money and/or U.S. Government Obligations sufficient
to pay the principal of, and premium, if any, and interest
on, all of the Outstanding Securities on the date of
Maturity or redemption, as the case may be.
14. Amendment; Supplement; Waiver.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification
of the rights and obligations of the Company and the rights
of the Holders of the Securities under the Indenture at any
time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the
Outstanding Securities (or such lesser amount as shall have
acted at a meeting pursuant to the provisions of the
Indenture). The Indenture also contains provisions
permitting the Holders of specified percentages in principal
amount of the Securities at the time Outstanding, on behalf
of the Holders of all the Securities, to waive compliance by
the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of
any Security issued upon registration of transfer hereof or
in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this
Security or such other Security.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair
the obligation of the Company, which is absolute and
unconditional, to pay the principal of and premium, if any,
and interest (including Liquidated Damages, if any) on this
Security at the times, places and rate, and in the coin or
currency, herein prescribed or to convert this Security (or
pay cash in lieu of conversion) as provided in the
Indenture.
15. Defaults and Remedies.
The Indenture provides that an Event of Default with
respect to the Securities occurs when any of the following
occurs:
(a) the Company defaults in the payment of the
principal of or premium, if any, on any of the
Securities when it becomes due and payable at Maturity,
upon redemption or exercise of a Repurchase Right or
otherwise,
<PAGE>
whether or not such payment is prohibited by
the subordination provisions of Article 13 of the
Indenture;
(b) the Company defaults in the payment of
interest on any of the Securities when it becomes due
and payable and such default continues for a period of
30 days, whether or not such payment is prohibited by
the subordination provisions of Article 13 of the
Indenture;
(c) the Company fails to deliver shares of Common
Stock, together with cash instead of fractional shares,
when those shares of Common Stock or cash instead of
fractional shares are required to be delivered
following conversion of a Security in accordance with
the provisions of Article 12 of the Indenture;
(d) the Company fails to perform or observe any
other term, covenant or agreement contained in the
Securities or the Indenture and such default continues
for a period of 60 days after written notice of such
failure is given as specified in the Indenture;
(e) (i) the Company fails to make any payment by
the end of the applicable grace period, if any, after
the maturity of any Indebtedness for borrowed money in
an amount in excess of $5,000,000, or (ii) there is an
acceleration of any Indebtedness for borrowed money in
an amount in excess of $5,000,000 because of a default
with respect to such Indebtedness without such
Indebtedness having been discharged or such
acceleration having been cured, waived, rescinded or
annulled, in the case of either clause (i) or (ii)
above, for a period of 30 days after written notice is
given to the Company as specified in the Indenture; and
(f) there are certain events of bankruptcy,
insolvency or reorganization of the Company.
If an Event of Default shall occur and be continuing,
the principal of all the Securities may be declared due and
payable in the manner and with the effect provided in the
Indenture.
16. Authentication.
This Security shall not be valid until the Trustee (or
authenticating agent) executes the certificate of
authentication on the other side of this Security.
17. Abbreviations.
Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (=
joint tenants with right of survivorship and not as tenants
in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts
to Minors Act).
<PAGE>
18. Additional Rights of Holders of Transfer Restricted
Securities.
In addition to the rights provided to Holders under the
Indenture, Holders of Transfer Restricted Securities shall
have all the rights set forth in the Registration Rights
Agreement.
19. CUSIP Numbers.
Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on this
Security and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed
on this Security or as contained in any notice of redemption
and reliance may be placed only on the other identification
numbers placed thereon.
20. Governing Law.
The Indenture and this Security shall be governed by,
and construed in accordance with, the law of the State of
New York.
21. Successor Corporation.
In the event a successor corporation assumes all the
obligations of the Company under this Security, pursuant to
the terms hereof and of the Indenture, the Company will be
released from all such obligations.
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below and
have your signature guaranteed: (I) or (we) assign and
transfer this Security to:
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip
code)
and irrevocably appoint
to transfer this Security on the books of the Company. The
agent may substitute another to act for him.
Dated: Your Name:
(Print your name exactly as it
appears on the face of this
Security)
Your Signature:
(Sign exactly as your name
appears on the face of this
Security)
Signature Guarantee*:
* Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor acceptable
to the Trustee).
<PAGE>
In connection with any transfer of this Security occurring
prior to the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms that
without utilizing any general solicitation or general
advertising that:
[Check One]
[ ] (a) this Security is being transferred in compliance
with the exemption from registration under the Securities
Act of 1933, as amended, provided by Rule 144A thereunder.
or
[ ] (b) this Security is being transferred other than in
accordance with (a) above and documents are being furnished
which comply with the conditions of transfer set forth in
this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee or
other Registrar shall not be obligated to register this
Security in the name of any Person other than the Holder
hereof unless the conditions to any such transfer of
registration set forth herein and in Sections 2.7, 2.8 and
2.9 of the Indenture shall have been satisfied.
Dated:
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of
the within-mentioned instrument in
every particular, without
alteration or any change
whatsoever.
Signature Guarantee:
Signature must be guaranteed by a
participant in a recognized
signature guaranty medallion
program or other signature
guarantor acceptable to the
Trustee.
<PAGE>
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is
purchasing this Security for its own account or an account
with respect to which it exercises sole investment
discretion, in each case for investment and not with a view
to distribution, and that it and any such account is a
"Qualified Institutional Buyer" within the meaning of Rule
144A under the Securities Act of 1933 and is aware that the
sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding
the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim
the exemption from registration provided by Rule 144A.
Dated:
NOTICE: To be executed by an
executive officer
<PAGE>
CONVERSION NOTICE
TO: CV THERAPEUTICS, INC.
3172 Porter Drive
Palo Alto, California 94304
The undersigned registered owner of this Security
hereby irrevocably exercises the option to convert this
Security, or the portion hereof (which is $1,000 principal
amount or an integral multiple thereof) below designated,
into shares of Common Stock in accordance with the terms of
the Indenture referred to in this Security, and directs that
the shares issuable and deliverable upon such conversion,
together with any check in payment for fractional shares and
any Securities representing any unconverted principal amount
hereof, be issued and delivered to the registered holder
hereof unless a different name has been indicated below. If
shares or any portion of this Security not converted are to
be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes
payable with respect thereto. Any amount required to be
paid to the undersigned on account of interest (including
Liquidated Damages, if any) accompanies this Security.
Dated: Your Name:
(Print your name exactly as it
appears on the face of this
Security)
Your Signature:
(Sign exactly as your name
appears on the face of this
Security)
Signature Guarantee*:
Social Security or other Taxpayer
Identification Number:
Principal amount to be converted (if less than all): $
* Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor acceptable
to the Trustee).
<PAGE>
Fill in for registration of shares (if to be issued) and
Securities (if to be delivered) other than to and in the
name of the registered holder:
(Name)
(Street Address)
(City, State and Zip Code)
<PAGE>
NOTICE OF EXERCISE OF REPURCHASE RIGHT
TO: CV THERAPEUTICS, INC.
3172 Porter Drive
Palo Alto, California 94304
The undersigned registered owner of this Security
hereby irrevocably acknowledges receipt of a notice from CV
Therapeutics, Inc. (the "Company") as to the occurrence of a
Change of Control with respect to the Company and requests
and instructs the Company to repay the entire principal
amount of this Security, or the portion thereof (which is
$1,000 principal amount or an integral multiple thereof)
below designated, in accordance with the terms of the
Indenture referred to in this Security, together with
interest (including Liquidated Damages, if any) accrued and
unpaid to, but excluding, such date, to the registered
holder hereof, in cash.
Dated: Your Name:
(Print your name exactly as it
appears on the face of this
Security)
Your Signature:
(Sign exactly as your name
appears on the face of this
Security)
Signature Guarantee*:
Social Security or other Taxpayer
Identification Number:
Principal amount to be repaid (if less than all): $
* Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor acceptable
to the Trustee).
<PAGE>
SCHEDULE OF EXCHANGES FOR PHYSICAL SECURITIES
The following exchanges of a part of this Global
Security for Physical Securities have been made:
Date of Amount of Amount of Principal Signature
Exchange decrease in increase in Amount of of
Principal Principal this Global authorized
Amount of Amount of Security officer of
this Global this Global following Trustee
Security Security such
decrease
(or
increase)
<PAGE>
CV Therapeutics, Inc.
(a Delaware corporation)
$175,000,000
4 3/4% Convertible Subordinated Notes due 2007
PURCHASE AGREEMENT
March 1, 2000
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
J.P. Morgan Securities Inc.
FleetBoston Robertson Stephens Inc.
SG Cowen Securities Corporation
as Representative(s) of the several Initial Purchasers
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
CV Therapeutics, Inc., a Delaware corporation (the
"Company"), confirms its agreement with Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch") and each of the other initial purchasers named in
Schedule A hereto (collectively, the "Initial Purchasers,"
which term shall also include any initial purchaser
substituted as hereinafter provided in Section 11 hereof),
for which Merrill Lynch and J.P. Morgan Securities Inc.,
FleetBoston Robertson Stephens Inc. and SG Cowen Securities
Corporation are acting as representatives (in such capacity,
the "Representatives"), with respect to the issue and sale
by the Company and the purchase by the Initial Purchasers,
acting severally and not jointly, of the respective
principal amounts set forth in said Schedule A of
$175,000,000 aggregate principal amount of the Company's 4_%
Convertible Subordinated Notes due 2007 (the "Notes"), and
with respect to the grant by the Company to the Initial
Purchasers of the option described in Section 2(b) hereof to
purchase all or any part of an additional $26,250,000
aggregate principal amount of Notes to cover over-
allotments, if any. The aforesaid $175,000,000 aggregate
principal amount of Notes (the "Initial Securities") to be
purchased by the Initial Purchasers and all or any part of
the $26,250,000 aggregate principal amount of
<PAGE>
Notes subject to the option described in Section 2(b) hereof (the
"Option Securities") are hereinafter called, collectively, the
"Securities." The Securities are to be issued pursuant to
an indenture to be dated as of March 7, 2000 (the
"Indenture") between the Company and Norwest Bank,
Minnesota, N.A., as trustee (the "Trustee"). Securities
issued in book-entry form will be issued to Cede & Co. as
nominee of The Depository Trust Company ("DTC") pursuant to
a letter agreement, to be dated as of the Closing Time (as
defined in Section 2(c)) (the "DTC Agreement"), among the
Company, the Trustee and DTC.
The Securities are convertible at the option of the
holder at any time on or prior to maturity, unless
previously redeemed or otherwise purchased, into shares of
the Company's Common Stock, par value $.001 per share (the
"Common Stock"), at the initial conversion price specified
in Schedule A hereto.
The Company understands that the Initial Purchasers
propose to make an offering of the Securities on the terms
and in the manner set forth herein and agrees that the
Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to
purchasers ("Subsequent Purchasers") at any time after this
Agreement has been executed and delivered. The Securities
are to be offered and sold through the Initial Purchasers
without being registered under the Securities Act of 1933,
as amended (the "1933 Act"), in reliance upon exemptions
therefrom. Pursuant to the terms of the Securities and the
Indenture, investors that acquire Securities may only resell
or otherwise transfer such Securities if such Securities are
hereafter registered under the 1933 Act or if an exemption
from the registration requirements of the 1933 Act is
available (including the exemption afforded by Rule 144A
("Rule 144A") of the rules and regulations promulgated under
the 1933 Act by the Securities and Exchange Commission (the
"Commission")). Prior to the purchase of the Securities by
the Initial Purchasers, the Company will enter into with the
Initial Purchasers an agreement (the "Registration Rights
Agreement") pursuant to which the Company is required to
file and use its reasonable best efforts to have declared
effective a registration statement under the 1933 Act to
register resales of the Securities and the shares of Common
Stock issuable upon conversion thereof.
The Company has prepared and delivered to the Initial
Purchasers copies of a preliminary offering memorandum dated
February 25, 2000 (the "Preliminary Offering Memorandum")
and has prepared and will deliver to the Initial Purchasers,
on the date hereof or the next succeeding day, copies of a
final offering memorandum dated March 1, 2000 (the "Final
Offering Memorandum"), each for use by the Initial
Purchasers in connection with its solicitation of purchases
of, or offering of, the Securities. "Offering Memorandum"
means, with respect to any date or time referred to in this
Agreement, the most recent offering memorandum (whether the
Preliminary Offering Memorandum or the Final Offering
Memorandum, or any amendment or supplement to either such
<PAGE>
document), which has been prepared and delivered by the
Company to the Initial Purchasers in connection with their
solicitation of purchases of, or offering of, the
Securities.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties. The Company
represents and warrants to each Initial Purchaser as of the
date hereof, as of the Closing Time referred to in
Section 2(c) hereof and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agrees with each
Initial Purchaser, as follows:
(i) Offering Memorandum. The Offering Memorandum does
not, and at the Closing Time (and, if any Option Securities
are purchased, at each Date of Delivery) will not, include
an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; provided that this
representation, warranty and agreement shall not apply to
statements in or omissions from the Offering Memorandum made
in reliance upon and in conformity with information
furnished to the Company in writing by any Initial Purchaser
expressly for use in the Offering Memorandum.
(ii) Documents Filed Pursuant to the 1934 Act. Each of
the Company's (a) Form 10-K, for the fiscal year ended
December 31, 1998; (b) 1999 Proxy Statement Pursuant to
Section 14(a) of the Securities Exchange Act of 1934 (the
"1934 Act"); (c) Forms 10-Q, for the fiscal quarters ended
March 31, 1999 and September 30, 1999; (d) Form 10-Q, for
the fiscal quarter ended June 30, 1999, as amended by Form
10-Q/A dated October 4, 1999; (e) Forms 8-K, dated February
2, 1999, May 5, 1999 and February 25, 2000; and (f) the
description of the Company's Common Stock contained in the
Company's registration statement on Form 8-A, dated October
30, 1996 (collectively, the documents listed in (a) through
(f) above are referred as the "1934 Act Reports"), filed
with the Commission pursuant to the 1934 Act at the time
they were filed with the Commission complied or will comply
in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission
thereunder (the "1934 Act Regulations"), and, when filed
with the Commission (or, if amended, when amended), did not
or will not include an untrue statement of a material fact
or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading.
(iii) Independent Accountants. The accountants who
certified the financial statements and supporting schedules
included in the Offering Memorandum are
<PAGE>
independent public accountants with respect to the Company and its
subsidiary within the meaning of Regulation S-X under the 1933 Act.
(iv) Financial Statements. The financial statements,
together with the related schedules and notes, included in
the Offering Memorandum present fairly the financial
position of the Company and its consolidated subsidiary at
the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its
consolidated subsidiary for the periods specified; said
financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on
a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Offering
Memorandum present fairly in accordance with GAAP the
information required to be stated therein. The selected
financial data and the summary financial information
included in the Offering Memorandum present fairly the
information shown therein and have been compiled on a basis
consistent with that of the audited financial statements
included in the Offering Memorandum.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the
Offering Memorandum (exclusive of any amendments thereto
after the date hereof), except as otherwise stated therein,
(A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and
its subsidiary considered as one enterprise, whether or not
arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions
entered into by the Company or its subsidiary, other than
those in the ordinary course of business, which are material
with respect to the Company and its subsidiary considered as
one enterprise and (C) there has been no dividend or
distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been
duly organized and is validly existing as a corporation in
good standing under the laws of the State of Delaware and
has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in
the Offering Memorandum and to enter into and perform its
obligations under this Agreement, the Registration Rights
Agreement, the Indenture and the Securities; and the Company
is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction
in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in
good standing could not reasonably be expected to result in
a Material Adverse Effect.
<PAGE>
(vii) Good Standing of CVT Adenosine Company. The
Company does not own, directly or indirectly, any interest
in any other corporation, association or other business
entity other than CVT Adenosine Company, a Cayman Islands
corporation ("CVTA"). CVTA has been duly organized and is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own, lease and operate its
properties and to conduct its business and is duly qualified
as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the
failure so to qualify or to be in good standing could not
reasonably be expected to result in a Material Adverse
Effect; all of the issued and outstanding capital stock of
CVTA has been duly authorized and validly issued, is fully
paid and non-assessable and is owned by the Company,
directly or through its subsidiary, free and clear of any
security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding shares of capital
stock of CVTA was issued in violation of any preemptive or
similar rights of any securityholder of CVTA.
(viii) Capitalization. The authorized, issued and
outstanding capital stock of the Company (a) as of September
30, 1999, was as set forth in the Offering Memorandum in the
column entitled "Actual" under the caption "Capitalization",
(b) was, as of such date, after giving effect to receipt by
the Company of the net proceeds from its public offering of
Common Stock in October 1999, as set forth in the Offering
Memorandum in the column entitled "Pro Forma" under the
caption "Capitalization" (except for subsequent issuances,
if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred
to in the Offering Memorandum or pursuant to the exercise of
convertible securities, options or warrants referred to in
the Offering Memorandum, and (c) after giving effect to the
transactions contemplated by this Agreement, would have been
as set forth in the Offering Memorandum in the column
entitled "Pro Forma as Adjusted" under the caption
"Capitalization" (except for subsequent issuances, if any,
pursuant to this Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the
Offering Memorandum or pursuant to the exercise of
convertible securities, options or warrants referred to in
the Offering Memorandum. The shares of issued and
outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-
assessable; none of the outstanding shares of capital stock
of the Company was issued in violation of the preemptive or
other similar rights of any securityholder of the Company.
The shares of issued and outstanding capital stock of the
Company have been issued in compliance, in all material
respects, with all federal and state securities laws.
Except as stated in the Offering
<PAGE>
Memorandum (exclusive of any amendments thereto after the date
hereof), there are no outstanding options, warrants or other rights
calling for the issuance of, and no commitments, or arrangements to
issue, any shares of capital stock of the Company or any
security convertible into or exchangeable for capital stock
of the Company.
(ix) Authorization of Agreements. This Agreement has
been duly authorized, executed and delivered by the Company.
The Registration Rights Agreement has been duly authorized
and, at the Closing Time, will have been duly executed and
delivered by the Company and will constitute a valid and
legally binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at
law).
(x) Authorization of the Indenture. The Indenture has
been duly authorized by the Company and, when executed and
delivered by the Company and the Trustee, will constitute a
valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at
law). The Indenture conforms in all material respects with
the Trust Indenture Act of 1939, as amended (the "1939
Act").
(xi) Authorization of the Securities. The Securities
have been duly authorized and, at the Closing Time, will
have been duly executed by the Company and, when
authenticated, issued and delivered in the manner provided
for in the Indenture and delivered against payment of the
purchase price therefor as provided in this Agreement, will
constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement
thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a
<PAGE>
proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of, the
Indenture.
(xii) Description of the Securities and the Indenture.
The Securities and the Indenture will conform in all
material respects to the respective statements relating
thereto contained in the Offering Memorandum and will be in
substantially the respective forms of the drafts thereof
dated February 29, 2000, with such changes thereto as may be
consented to by the Initial Purchasers, such consent not to
be unreasonably withheld.
(xiii) Authorization and Description of Common Stock. The
Common Stock conforms in all material respects to the
statements relating thereto contained in the Offering
Memorandum and such description conforms in all material
respects to the rights set forth in the instruments defining
the same. Upon issuance and delivery of the Securities in
accordance with this Agreement and the Indenture, the
Securities will be convertible at the option of the holder
thereof for shares of Common Stock in accordance with the
terms of the Securities and the Indenture; the shares of
Common Stock issuable upon conversion of the Securities have
been duly authorized and reserved for issuance upon such
conversion by all necessary corporate action and such
shares, when issued upon such conversion, will be validly
issued and will be fully paid and non-assessable; no holder
of such shares will be subject to personal liability by
reason of being such a holder; and the issuance of such
shares upon such conversion will not be subject to the pre
emptive or other similar rights of any securityholder of the
Company.
(xiv) Absence of Defaults and Conflicts. Neither the
Company nor its subsidiary is (a) in violation of its
charter or by-laws, (b) in default in the performance or
observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or its
subsidiary is a party or by which it or any of them may be
bound, or to which any of the property or assets of the
Company or its subsidiary is subject (collectively,
"Agreements and Instruments") or (c) in violation of any
applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality
or court, domestic or foreign, having jurisdiction over the
Company or its subsidiary or any of their assets, properties
or operations, except for such defaults or violations in the
case of clauses (b) and (c) that could not result in a
Material Adverse Effect. The execution, delivery and
performance of this Agreement, the Registration Rights
Agreement, the Indenture and the Securities and any other
agreement or instrument entered into or issued or to be
entered into or issued by the Company in connection with the
<PAGE>
transactions contemplated hereby or thereby or in the
Offering Memorandum and the consummation of the transactions
contemplated herein and in the Offering Memorandum
(including the issuance and sale of the Securities and the
use of the proceeds from the sale of the Securities as
described in the Offering Memorandum under the caption "Use
of Proceeds" and the issuance of the shares of Common Stock
issuable upon conversion of the Securities) and compliance
by the Company with its obligations hereunder and under the
Registration Rights Agreement, the Indenture and the
Securities have been duly authorized by all necessary
corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or a
Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or its subsidiary
pursuant to, the Agreements and Instruments except for such
conflicts, breaches or defaults or liens, charges or
encumbrances that, singly and in the aggregate, could not
reasonably be expected to result in a Material Adverse
Effect, nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or its
subsidiary or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or its subsidiary or
any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition
which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such
indebtedness by the Company or its subsidiary.
(xv) Absence of Labor Dispute. No labor dispute with
the employees of the Company or its subsidiary exists or, to
the knowledge of the Company, is imminent, and the Company
is not aware of any existing or imminent labor disturbance
by the employees of any of its or its subsidiary's principal
suppliers, manufacturers, customers or contractors, which,
in either case, could result in a Material Adverse Effect.
(xvi) Absence of Proceedings. Except as disclosed in the
Offering Memorandum (exclusive of any amendments thereto
after the date hereof), there is no action, suit,
proceeding, inquiry or investigation before or brought by
any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or its
subsidiary which could reasonably be expected to result in a
Material Adverse Effect, or which could materially and
adversely affect the properties or assets of the Company or
its subsidiary or the consummation of the transactions
contemplated by this Agreement and the Registration Rights
Agreement or the
<PAGE>
performance by the Company of its obligations hereunder or thereunder.
The aggregate of all pending legal or governmental proceedings to
which the Company or its subsidiary is a party or of which any of
their respective property or assets is the subject which are
not described in the Offering Memorandum (exclusive of any
amendments thereto after the date hereof), including
ordinary routine litigation incidental to the business,
could not reasonably be expected to result in a Material
Adverse Effect.
(xvii) Possession of Intellectual Property. The Company
and its subsidiary own or possess adequate patents, patent
rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade
names or other intellectual property, including, without
limitation, all of the intellectual property described in
the Offering Memorandum as being owned or licensed by the
Company (collectively, "Intellectual Property"), necessary
to carry on the business now operated by them. Except as
set forth in the Offering Memorandum (exclusive of any
amendments thereto after the date hereof), no valid U.S.
patent is, or to the knowledge of the Company would be,
infringed by the activities of the Company in the
manufacture, use, offer for sale or sale of any product or
component thereof as described in the Offering Memorandum.
The patent applications (the "Patent Applications") filed by
or on behalf of the Company described in the Offering
Memorandum have been properly prepared and filed on behalf
of the Company; except as set forth in the Offering
Memorandum (exclusive of any amendments thereto after the
date hereof) each of the Patent Applications and patents
(the "Patents") described in the Offering Memorandum is
assigned or licensed to the Company, and, except as set
forth in the Offering Memorandum (exclusive of any
amendments thereto after the date hereof), no other entity
or individual has any right or claim in any Patent, Patent
Application or any patent to be issued therefrom; and, to
the knowledge of the Company, each of the Patent
Applications discloses potentially patentable subject
matter. There are no actions, suits or judicial proceedings
pending relating to patents or proprietary information to
which the Company is a party or of which any property of the
Company is subject and neither the Company nor its
subsidiary has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any
facts or circumstances which could render any Intellectual
Property invalid or inadequate to protect the interest of
the Company or its subsidiary therein, and which
infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
<PAGE>
(xviii) Clinical Trials. The human clinical trials
conducted by the Company or in which the Company has
participated relating to ranolazine and CVT-510 that are
described in the Offering Memorandum, or the results of
which are referred to in the Offering Memorandum are the
only human clinical trials currently being conducted by or
on behalf of the Company, and, to the best of the Company's
knowledge, such studies and tests were and, if still
pending, are being, conducted in accordance with
experimental protocols, procedures and controls pursuant to
accepted professional scientific standards; the descriptions
of the results of such studies, tests and trials contained
in the Offering Memorandum are accurate and complete in all
material respects. The Company has no knowledge of any
other studies or tests, the results of which call into
question the results of the clinical trials described in the
Offering Memorandum. The Company has not received any
notices or correspondence from the FDA or any other
governmental agency requiring the termination, suspension or
modification of any clinical trials conducted by, or on
behalf of, the Company or in which the Company has
participated that are described in the Offering Memorandum
or the results of which are referred to in the Offering
Memorandum. All human clinical trials previously conducted
by or on behalf of the Company while conducted by or on
behalf of the Company, were conducted in accordance with
experimental protocols, procedures and controls pursuant to
accepted professional scientific standards; the descriptions
of the results of such studies, tests and trials contained
in the Offering Memorandum, if any, are accurate and
complete in all material respects.
(xix) Absence of Further Requirements. No filing with,
or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or
governmental authority or agency is necessary or required
for the performance by the Company of its obligations
hereunder or under the Registration Rights Agreement or the
Indenture, in connection with the offering, issuance or sale
of the Securities under this Agreement, the issuance of
shares of Common Stock upon conversion of Securities or the
consummation of the transactions contemplated by this
Agreement, the Registration Rights Agreement or the
Indenture, except (a) such as may be required under the 1933
Act or the 1933 Act Regulations in connection with the
transactions contemplated by the Registration Rights
Agreement or (b) or as may be required under the state
securities or blue sky laws.
(xx) Possession of Licenses and Permits. The Company
and its subsidiary possess such permits, licenses,
approvals, consents and other authorizations (including,
licenses, pharmacy licenses, accreditation and other
similar documentation or approvals of any local health
departments) (collectively, "Governmental Licenses") issued
by the appropriate federal, state, local or
<PAGE>
foreign regulatory agencies or bodies, including, without
limitation, the Food and Drug Administration ("FDA"),
necessary to conduct the business now operated by them; the
Company and its subsidiary are in compliance with the terms
and conditions of all such Governmental Licenses and all
applicable FDA rules and regulations, guidelines and
policies, except where the failure so to comply could not
reasonably be expected to, singly and in the aggregate,
result in a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except
where the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force
and effect could not reasonably be expected to result in a
Material Adverse Effect; and neither the Company nor its
subsidiary has received any notice of proceedings relating
to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, could
reasonably be expected to result in a Material Adverse
Effect.
(xxi) Title to Property. Neither the Company nor its
subsidiary owns any real property. The Company and its
subsidiary have good title to all other properties owned by
them, in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in
the Offering Memorandum or (b) do not, singly and in the
aggregate, materially affect the value of such property and
do not interfere with the use made and proposed to be made
of such property by the Company or its subsidiary; and all
of the leases and subleases material to the business of the
Company and its subsidiary, considered as one enterprise,
and under which the Company or its subsidiary holds
properties described in the Offering Memorandum, are in full
force and effect, and neither the Company nor its subsidiary
has any notice of any material claim of any sort that has
been asserted by anyone adverse to the rights of the Company
or its subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of
such the Company or its subsidiary to the continued
possession of the leased or subleased premises under any
such lease or sublease.
(xxii) Accuracy of Contract Descriptions. All of the
descriptions of contracts or other documents contained in
the Offering Memorandum (exclusive of any amendments thereto
after the date hereof) are accurate and complete
descriptions of such contracts or other documents. There
are no contracts or documents which are required to be
described in the 1934 Act Reports or to be filed as exhibits
thereto which have not been so described therein and filed
as required. There are no contracts or other documents
which would be required to be described in the Offering
Memorandum if the Offering Memorandum were a prospectus
included in a registration statement on Form S-1 that have
not been
<PAGE>
so described in the Offering Memorandum (exclusive
of any amendments thereto after the date hereof).
(xxiii) Tax Returns and Payment of Taxes. The Company
and its subsidiary have timely filed all Federal, state,
local and foreign tax returns that are required to be filed
or have duly requested extensions thereof and all such tax
returns are true, correct and complete, except to the extent
that any failure to file or request an extension, or any
incorrectness could not reasonably be expected to, singly
and in the aggregate, result in a Material Adverse Effect.
The Company and its subsidiary have timely paid all taxes
shown as due on such filed tax returns (including any
related assessments, fines or penalties), except to the
extent that any such taxes are being contested in good faith
and by appropriate proceedings, or to the extent that any
failure to pay could not reasonably be expected to, singly
and in the aggregate, result in a Material Adverse Effect;
and adequate charges, accruals and reserves have been
provided for in the financial statements referred to in
Section 1(a)(iii) above in accordance with GAAP in respect
of all Federal, state, local and foreign taxes for all
periods as to which the tax liability of the Company or its
subsidiary has not been finally determined or remains open
to examination by applicable taxing authorities. Neither
the Company nor its subsidiary is a "United States real
property holding corporation" within the meaning of
Section 897(c)(2) of the Internal Revenue Code of 1986, as
amended.
(xxiv) Insurance. The Company and its subsidiary are
insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are
prudent and customary in the businesses in which they are
engaged; and the Company has no reason to believe that the
Company or its subsidiary will not be able to renew its
existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business, except where
the failure to renew or maintain such coverage could not
reasonably be expected to result in a Material Adverse
Effect.
(xxv) Year 2000. The Company has reviewed its operations
and those of its subsidiary and has made inquiries of any
third party with which the Company or its subsidiary has a
material relationship to evaluate the extent to which the
business or operations of the Company or its subsidiary will
be affected by the Year 2000 Problem. Other than as set
forth in the Offering Memorandum, the Company does not
anticipate incurring operating expenses or costs material to
the financial position or results of operations of the
Company and its subsidiary in connection with the actions
that the Company currently believes are necessary to address
the Year 2000 Problem. As a result of the aforementioned
review, the
<PAGE>
Company has no reason to believe, and does not
believe, that the Year 2000 Problem will have a Material
Adverse Effect on the Company and its subsidiary considered
as one enterprise or result in any material loss or
interference with the business or operations of the Company
or its subsidiary. The "Year 2000 Problem" as used herein
means any risk that computer hardware or software used in
the receipt, transmission, processing, manipulation,
storage, retrieval, retransmission or other utilization of
data or in the operation of mechanical or electrical systems
of any kind will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as
effectively as in the case of dates or time periods
occurring prior to January 1, 2000.
(xxvi) Environmental Laws. Except as described in the
Offering Memorandum (exclusive of any amendments thereto
after the date hereof) and except such matters as could not
reasonably be expected to, singly and in the aggregate,
result in a Material Adverse Effect, (A) neither the Company
nor its subsidiary is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any
judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human
health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or
to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"),
(B) the Company and its subsidiary have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or its
subsidiary and (D) there are no events or circumstances that
could form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private
party or governmental body or agency, against or affecting
the Company or its subsidiary relating to Hazardous
Materials or Environmental Laws.
(xxvii) Solvency of the Company. The Company is, and
immediately after the Closing Time will be, Solvent. As
used herein, the term "Solvent" means, with respect to the
Company on a particular date, that on such date (a) the fair
market value of the assets of the Company is greater than
the total amount of
<PAGE>
liabilities (including contingent
liabilities) of the Company, (b) the present fair salable
value of the assets of the Company is greater than the
amount that will be required to pay the probable liabilities
of the Company on its debts as they become absolute and
matured, (c) the Company is able to realize upon its assets
and pay its debts and other liabilities, including
contingent obligations, as they mature and (d) the Company
does not have unreasonably small capital.
(xxviii) Absence of Price Stabilization. Neither the
Company nor any of its affiliates, as such term is defined
in Rule 501(b) under the 1933 Act (each, an "Affiliate"),
has taken or will take, directly or indirectly, any action
designed or intended to stabilize or manipulate the price of
any security of the Company, or which caused or resulted in,
or which could in the future cause or result in,
stabilization or manipulation of the price of any security
of the Company, nor has the Company become aware that any of
its Affiliates has taken, directly or indirectly, any action
designed or intended to stabilize or manipulate the price of
any security of the Company, or which caused or resulted in,
or which could in the future cause or result in
stabilization or manipulation of the price of any security
of the Company.
(xxix) Investment Company Act. The Company is not, and
upon the issuance and sale of the Securities as herein
contemplated and the application of the net proceeds
therefrom as described in the Offering Memorandum will not
be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxx) Registration Rights. Except as described in the
Offering Memorandum (exclusive of any amendments thereto
after the date hereof), there are no persons with
registration rights or other similar rights to have any
securities of the Company or its subsidiary registered under
the 1933 Act.
(xxxi) Similar Offerings. Neither the Company nor any of
its Affiliates has, directly or indirectly, solicited any
offer to buy, sold or offered to sell or otherwise
negotiated in respect of, or will solicit any offer to buy
or offer to sell or otherwise negotiate in respect of, in
the United States or to any United States citizen or
resident, any security which is or could be integrated with
the sale of the Securities in a manner that could require
the Securities to be registered under the 1933 Act.
(xxxii) Rule 144A Eligibility. The Securities are
eligible for resale pursuant to Rule 144A and will not be,
at the Closing Time, of the same class as
<PAGE>
securities listed on a national securities exchange registered under
Section 6 of the 1934 Act, or quoted in a U.S. automated interdealer
quotation system.
(xxxiii) No General Solicitation. None of the Company,
its Affiliates or any person acting on its or any of their
behalf (other than the Initial Purchasers, as to whom the
Company makes no representation) has engaged or will engage,
in connection with the offering of the Securities, in any
form of general solicitation or general advertising within
the meaning of Rule 502(c) under the 1933 Act.
(xxxiv) Related Party Transactions. There is no
relationship, direct or indirect, between or among the
Company on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company on the
other hand, which is required to be described in the 1934
Act Reports that has not been so described.
(xxxv) No Registration Required. Subject to compliance by
the Initial Purchasers with the procedures set forth in
Section 6 hereof, it is not necessary in connection with the
offer, sale and delivery of the Securities to the Initial
Purchasers and to each Subsequent Purchaser in the manner
contemplated by this Agreement and the Offering Memorandum
to register the Securities under the 1933 Act or to qualify
the Indenture under the 1939 Act.
(xxxvi) Reporting Company; Nasdaq Listing. The Company
is subject to and in compliance with the reporting
requirements of Section 13 or Section 15(d) of the 1934 Act.
The Common Stock is registered pursuant to Section 12(g) of
the 1934 Act and is listed on the Nasdaq National Market,
and the Company has taken no action designed to, or likely
to have the effect of, terminating the registration of the
Common Stock under the 1934 Act or delisting the Common
Stock from the Nasdaq National Market, nor has the Company
received any notification that the Commission or the NASD is
contemplating terminating such registration or listing.
(xxxvii) Accounting Controls. The Company and its
subsidiary maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (a)
transactions are executed in accordance with management's
general or specific authorization, (b) transactions are
recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain accountability for assets, (c)
access to assets is permitted only in accordance with
management's general or specific authorization and (d) the
recorded accountability for assets is compared with the
<PAGE>
existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(b) Officer's Certificates. Any certificate signed by any
officer of the Company or its subsidiary delivered to the
Representatives or to counsel for the Initial Purchasers
shall be deemed a representation and warranty by the Company
to the Initial Purchasers as to the matters covered thereby.
SECTION 2. Sale and Delivery to Initial Purchasers;
Closing.
(a) Securities. On the basis of the representations and
warranties herein contained and subject to the terms and
conditions herein set forth, the Company agrees to sell to
each Initial Purchaser and each Initial Purchaser agrees to
purchase from the Company, severally and not jointly, at the
price set forth in Schedule B, the aggregate principal
amount of Initial Securities set forth in Schedule A
opposite the name of such Initial Purchaser.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject
to the terms and conditions herein set forth, the Company
hereby grants an option to the Initial Purchasers severally
and not jointly to purchase up to an additional $26,250,000
aggregate principal amount of Securities at the same price
set forth in Schedule B for the Initial Securities, plus
accrued interest, if any, from the date of the Closing Time
(as hereinafter defined) to the relevant Date of Delivery
(as hereinafter defined). The option hereby granted will
expire 30 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of
covering over-allotments which may be made in connection
with the offering and distribution of the Initial Securities
upon notice by Merrill Lynch the Company setting forth the
number of Option Securities as to which the Initial
Purchasers are then exercising the option and the time and
date of payment and delivery for such Option Securities.
Any such time and date of delivery (a "Date of Delivery")
shall be determined by the Representatives, but shall not be
later than seven full business days after the exercise of
such option, nor in any event prior to the Closing Time. If
the option is exercised as to all or any portion of the
Option Securities, each of the Initial Purchasers, acting
severally and not jointly, will purchase that proportion of
the total number of Option Securities then being purchased
which the number of Initial Securities set forth in Schedule
A opposite the name of such Initial Purchasers bears to the
total number of Initial Securities, subject in each case to
such adjustments as Merrill Lynch in its discretion shall
make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and
delivery of certificates for, the Initial Securities shall
be made at the office of Debevoise & Plimpton, 875 Third
Avenue, New York, New York 10022, or at such other place as
shall be agreed upon by
<PAGE>
the Representatives and the Company,
at 9:00 a.m. (Eastern time) on the third (fourth, if the
pricing occurs after 4:30 p.m. (Eastern time) on any given
day) business day after the date hereof, or such other time
not later than ten business days after such date as shall be
agreed upon by the Representatives and the Company (such
time and date of payment and delivery being herein called
the "Closing Time").
In addition, in the event that any or all of the Option
Securities are purchased by the Initial Purchasers, payment
of the purchase price for, and delivery of certificates for,
such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by
the Representatives and the Company, on each Date of
Delivery as specified in the notice from the Representatives
to the Company. Payment shall be made to the Company by
wire transfer of immediately available funds to a bank
account designated by the Company, against delivery to the
Initial Purchasers of certificates for the Securities to be
purchased by them. It is understood that each Initial
Purchaser has authorized Merrill Lynch, for its account, to
accept delivery of, receipt for, and make payment of the
purchase price for, the Initial Securities and the Option
Securities, if any, which it has agreed to purchase.
Merrill Lynch, individually and not as representative of the
Initial Purchasers, may (but shall not be obligated to) make
payment of the purchase price for the Initial Securities or
the Option Securities, if any, to be purchased by any
Initial Purchaser whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case
may be, but such payment shall not relieve such Initial
Purchaser from its obligations hereunder.
(d) Denominations; Registration. Certificates for the
Initial Securities and the Option Securities, if any, shall
be in such denominations ($100,000 or integral multiples of
$1,000 in excess thereof) and registered in such names as
the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of
Delivery, as the case may be. The certificates, which may
be in temporary form, for the Initial Securities and the
Option Securities, if any, shall be made available for
examination and packaging by the Representatives in The City
of New York not later than 10:00 a.m. (Eastern time) on the
last business day prior to the Closing Time or the relevant
Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company
covenants with each Initial Purchaser as follows:
(a) Offering Memorandum. The Company, as promptly as
possible, will furnish to each Initial Purchaser, without
charge, such number of copies of the Preliminary Offering
Memorandum, the Final Offering Memorandum and any amendments
and supplements thereto and documents incorporated by
reference therein as such Initial Purchaser may reasonably
request.
<PAGE>
(b) Notice and Effect of Material Events. The Company
will immediately notify the Initial Purchasers, and confirm
such notice in writing, of (x) any filing made by the
Company of information relating to the offering of the
Securities with any securities exchange or any other
regulatory body in the United States or any other
jurisdiction, and (y) prior to the completion of the
placement of the Securities by the Initial Purchasers as
evidenced by a notice in writing from the Initial Purchasers
to the Company, any material changes in or affecting the
condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its
subsidiary considered as one enterprise which (i) make any
statement in the Offering Memorandum false or misleading or
(ii) are not disclosed in the Offering Memorandum. In such
event or if during such time any event shall occur or
condition exist as a result of which it is necessary, in the
reasonable opinion of any of the Company, its counsel, the
Initial Purchasers or counsel for the Initial Purchasers, to
amend or supplement the Final Offering Memorandum in order
that the Final Offering Memorandum not include any untrue
statement of a material fact or omit to state a material
fact necessary in order to make the statements therein not
misleading in the light of the circumstances then existing,
the Company will forthwith amend or supplement the Final
Offering Memorandum by preparing and furnishing to each
Initial Purchaser an amendment or amendments of, or a
supplement or supplements to, the Final Offering Memorandum
(in form and substance satisfactory in the reasonable
opinion of counsel for the Initial Purchasers) so that, as
so amended or supplemented, the Final Offering Memorandum
will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances
existing at the time it is delivered to a Subsequent
Purchaser, not misleading.
(c) Amendment to Offering Memorandum and Supplements. The
Company will advise the Initial Purchasers promptly of any
proposal to amend or supplement the Offering Memorandum and
will not effect such amendment or supplement without the
consent of the Initial Purchasers. Neither the consent of
the Initial Purchasers, nor the Initial Purchasers' delivery
of any such amendment or supplement, shall constitute a
waiver of any of the conditions set forth in Section 5
hereof.
(d) DTC. The Company will cooperate with the Initial
Purchasers and use its best efforts to permit the Securities
to be eligible for clearance and settlement through the
facilities of DTC.
(e) Use of Proceeds. The Company will use the net
proceeds received by it from the sale of the Securities in
the manner specified in the Offering Memorandum under "Use
of Proceeds."
<PAGE>
(f) Listing. The Company will use its best efforts to
effect and maintain the listing of the shares of Common
Stock issuable upon conversion of the Securities on the
Nasdaq National Market.
(g) Restriction on Sale of Securities. During a period of
90 days from the date of the Offering Memorandum, the
Company will not, without the prior written consent of the
Merrill Lynch, (i) directly or indirectly, offer, pledge,
sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer
or dispose of any share of Common Stock or any securities
convertible into or exercisable or exchangeable for or
repayable with Common Stock or file any registration
statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement
or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of
ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence
shall not apply to (A) the Securities to be sold hereunder
and the common stock that may be issued upon conversion of
the Security pursuant to their terms, (B) any shares of
Common Stock issued by the Company upon the exercise of an
option or warrant or the conversion of a security
outstanding on the date hereof and referred to in the
Offering Memorandum, (C) any shares of Common Stock issued
or options or rights to purchase Common Stock granted
pursuant to existing employee benefit plans of the Company
or (D) any shares of Common Stock issued pursuant to any non-
employee director stock plan or dividend reinvestment plan.
(h) PORTAL Designation. The Company will use its best
efforts to permit the Securities to be designated PORTAL
securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers,
Inc. ("NASD") relating to trading in the PORTAL Market.
(i) Reporting Requirements. The Company, during the
period when the Offering Memorandum is required to be
delivered pursuant to Section 6(a)(vii) hereof, will file
all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by
the 1934 Act and the 1934 Act Regulations.
(j) Registration Rights Agreement; Trust Indenture Act.
The Company agrees that it will comply with all the terms
and conditions of the Registration Rights Agreement and that
prior to any registration of the Securities pursuant to the
Registration Rights Agreement, or at such earlier time as
may be required, that it will cause the Indenture to be
qualified under the 1939 Act.
<PAGE>
(k) The Company will use its best efforts to obtain a
waiver from each person who would otherwise have the right
to have Securities of the Company (other than shares of
Common Stock issuable upon conversion of the Notes)
registered on the registration statement filed pursuant to
the Registration Rights Agreement ("the Resale Registration
Statement"). To the extent the Company does not receive
such waivers, the Company will use its best efforts to
obtain the consent of such persons from whom waivers are not
obtained to file a separate registration statement with
respect to all such other registrable securities, rather
than include them in the Resale Registration Statement and,
upon receipt of such consent, to register such registrable
securities in accordance therewith.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident
to the performance of its obligations under this Agreement,
including (i) the preparation, printing, delivery to the
Initial Purchasers and any filing of the Offering Memorandum
(including financial statements and any schedules or
exhibits and any document incorporated therein by reference)
and of each amendment or supplement thereto, (ii) the
preparation, printing and delivery to the Initial Purchasers
of this Agreement, the Indenture and such other documents as
may be required in connection with the offering, purchase,
sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for
the Securities to the Initial Purchasers and the
certificates for the shares of Common Stock issuable upon
conversion thereof, including any stock or other transfer
taxes, any stamp or other duties payable upon the sale,
issuance and delivery of the Securities to the Initial
Purchasers and any charges of DTC in connection therewith,
(iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the reasonable fees and
disbursements of counsel for the Initial Purchasers in
connection with the preparation of the Blue Sky Survey,
(vi) the fees and expenses of the Trustee, any transfer
agent or registrar for the Securities or the Common Stock,
including the fees and disbursements of counsel for the
Trustee in connection with the Indenture and the Securities,
(vii) any fees and expenses payable in connection with the
initial and continued designation of the Securities as
PORTAL securities under the PORTAL Market Rules pursuant to
NASD Rule 5322, (viii) the fees and expenses payable in
connection with the listing of the shares of Common Stock
issuable upon conversion of the Securities on the Nasdaq
National Market and (ix) the performance by the Company of
its obligations under the Registration Rights Agreement.
(b) Termination of Agreement. If this Agreement is
terminated by the Representatives in accordance with the
provisions of Section 5 or Section 10(a)(i) hereof, the
Company shall reimburse the Initial Purchasers for all of
their out-of-pocket expenses, including the reasonable fees
and disbursements of counsel for the Initial Purchasers.
<PAGE>
SECTION 5. Conditions of Initial Purchasers'
Obligations. The obligations of the several Initial
Purchasers hereunder are subject to the accuracy of the
representations and warranties contained in Section 1 hereof
or in certificates of any officer of the Company or its
subsidiary delivered pursuant to the provisions hereof, to
the performance by the Company of its covenants and other
obligations hereunder, and to the following further
conditions:
(a) Opinion of Counsel for Company. At the Closing Time,
the Representatives shall have received the favorable
opinions, dated as of the Closing Time, of Cooley Godward
LLP, counsel for the Company, McDonnell Boehnen Hulbert &
Berghoff, special intellectual property counsel for the
Company, Covington & Burling, special regulatory counsel for
the Company and Truman Bodden & Company, special Cayman
Islands counsel for the Company, in form and substance
satisfactory to counsel for the Initial Purchasers, to the
effect set forth in Exhibits A-1, A-2, A-3 and A-4,
respectively, hereto and to such further effect as counsel
to the Initial Purchaser may reasonably request.
(b) Opinion of Counsel for Initial Purchasers. At the
Closing Time, the Representatives shall have received the
favorable opinion, dated as of the Closing Time, of
Debevoise & Plimpton, counsel for the Initial Purchasers, in
form and substance reasonably satisfactory to the Initial
Purchasers.
(c) Officers' Certificate. At the Closing Time, there
shall not have been, since the date hereof or since the
respective dates as of which information is given in the
Offering Memorandum, any material adverse change in the
condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and
its subsidiary considered as one enterprise, whether or not
arising in the ordinary course of business, and the
Representatives shall have received a certificate of the
President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company,
dated as of the Closing Time, to the effect that (i) there
has been no such material adverse change, (ii) the
representations and warranties in Section 1 hereof are true
and correct with the same force and effect as though
expressly made at and as of the Closing Time, and (iii) the
Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or
prior to the Closing Time.
(d) Accountants' Comfort Letter. At the time of the
execution of this Agreement, the Representatives shall have
received from Ernst & Young LLP a letter dated such date, in
form and substance satisfactory to the Initial Purchasers,
containing statements and information of the type ordinarily
included in accountants' "comfort letters" with respect to
the financial statements and certain financial information
contained in or incorporated by reference into the Offering
Memorandum.
<PAGE>
(e) Bring-down Comfort Letter. At the Closing Time, the
Representatives shall have received from Ernst & Young LLP a
letter, dated as of the Closing Time, to the effect that
they reaffirm the statements made in the letter furnished
pursuant to subsection (d) of this Section, except that the
specified date referred to shall be a date not more than
three business days prior to the Closing Time.
(f) PORTAL. At the Closing Time, the Securities and the
Common Stock issuable upon conversion of the Securities
shall have been designated for trading on PORTAL.
(g) Approval for Listing. At the Closing Time, the shares
of Common Stock issuable upon conversion of the Securities
shall have been approved for listing on the Nasdaq National
Market.
(h) No Downgrading. Since the date of this Agreement,
there shall not have occurred a downgrading in the rating
accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as that term is
defined by the Commission for purposes of Rule 436(g)(2)
under the 1933 Act, and no such securities rating
organization shall have publicly announced that it has under
surveillance or review, with possible negative implications,
its ratings of any of the Company's securities.
(i) Lock-up Agreements. At the date of this Agreement,
the Representatives shall have received an agreement
substantially in the form of Exhibit C hereto signed by the
persons listed on Schedule C hereto.
(j) Conditions to Purchase of Option Securities. In the
event that the Initial Purchasers exercises their option
provided in Section 2(b) hereof to purchase all or any
portion of the Option Securities, the representations and
warranties contained in Section 1 hereof and the statements
in any certificates furnished by the Company or any
subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant
Date of Delivery, the Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date
of Delivery, of the President or a Vice President of the
Company and of the chief financial or chief accounting
officer of the Company confirming that the certificate
delivered at Closing Time pursuant to Section 5(c) hereof
remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable
opinions of Cooley Godward LLP, counsel for the Company,
McDonnell Boehnen Hulbert & Berghoff, special intellectual
property for the Company, Covington & Burling, special
regulatory counsel for the Company and Truman Bodden &
Company,
<PAGE>
special Cayman Islands counsel to the Company, in
form and substance satisfactory to counsel for the Initial
Purchasers, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinions required by
Section 5(a) hereof.
(iii) Opinion of Counsel for Initial Purchasers. The
favorable opinion of Debevoise & Plimpton, counsel for the
Initial Purchasers, dated such Date of Delivery, relating to
the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iv) Bring-down Comfort Letter. A letter from Ernst &
Young LLP, in form and substance satisfactory to the
Representatives and dated such Date of Delivery,
substantially in the same form and substance as the letter
furnished to the Representatives pursuant to Section 5(e)
hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.
(v) No Downgrading. Subsequent to the date of this
Agreement, no downgrading shall have occurred in the rating
accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as that term is
defined by the Commission for purposes of Rule 436(g)(2)
under the 1933 Act, and no such securities rating
organization shall have publicly announced that it has under
surveillance or review, with possible negative implications,
its ratings of any of the Company's securities.
(k) Additional Documents. At the Closing Time and at each
Date of Delivery, counsel for the Initial Purchasers shall
have been furnished with such documents and opinions as they
may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of
the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Representatives
and counsel for the Initial Purchasers.
(l) Termination of Agreement. If any condition specified
in this Section shall not have been fulfilled when and as
required to be fulfilled, this Agreement, or, in the case of
any condition to the purchase of Option Securities, on a
Date of Delivery which is after the Closing Time, the
obligations of the several Initial Purchasers to purchase
the relevant Option Securities, may be terminated by the
Representatives by notice to the Company at any time at or
prior to the Closing Time or such Date of Delivery, as the
case may be, and such termination shall be without
liability of any party to any other party
<PAGE>
except as provided in Section 4 and except that Sections 1, 7, 8 and
9 shall survive any such termination and remain in full force and
effect.
SECTION 6. Subsequent Offers and Resales of the
Securities.
(a) Offer and Sale Procedures. Each Initial Purchaser and
the Company hereby establish and agree to observe the
following procedures in connection with the offer and sale
of the Securities:
(i) Offers and Sales only to Qualified Institutional
Buyers. Offers and sales of the Securities shall only be
made to persons whom the offeror or seller reasonably
believes to be qualified institutional buyers, as defined in
Rule 144A under the 1933 Act ("Qualified Institutional
Buyers").
(ii) No General Solicitation. No general solicitation
or general advertising (within the meaning of Rule 502(c)
under the 1933 Act) will be used in the United States in
connection with the offering or sale of the Securities.
(iii) Purchases by Non-Bank Fiduciaries. In the case of
a non-bank Subsequent Purchaser of a Security acting as a
fiduciary for one or more third parties, each third party
shall, in the judgment of such Initial Purchaser, be a
Qualified Institutional Buyer.
(iv) Subsequent Purchaser Notification. Each Initial
Purchaser will take reasonable steps to inform, and cause
each of its U.S. Affiliates to take reasonable steps to
inform, persons acquiring Securities from such Initial
Purchaser or affiliate, as the case may be, in the United
States that the Securities (A) have not been and will not be
registered under the 1933 Act, (B) are being sold to them
without registration under the 1933 Act in reliance on Rule
144A, and (C) may not be offered, sold or otherwise
transferred except (1) to the Company or any subsidiary
thereof or (2) in accordance with Rule 144A to a person whom
the seller reasonably believes is a Qualified Institutional
Buyer that is purchasing such Securities for its own account
or for the account of a Qualified Institutional Buyer to
whom notice is given that the offer, sale or transfer is
being made in reliance on Rule 144A.
(v) Minimum Principal Amount. No sale of the Securities
to any one Subsequent Purchaser will be for less than U.S.
$100,000 principal amount and no Security will be issued in
a smaller principal amount. If the Subsequent Purchaser is
a non-bank fiduciary acting on behalf of others, each person
for whom it is acting must purchase at least U.S. $100,000
principal amount of the Securities.
<PAGE>
(vi) Restrictions on Transfer. The transfer
restrictions and the other provisions set forth in the
Offering Memorandum under the heading "Notice to Investors,"
including the legend required thereby, shall apply to the
Securities and the Common Stock issuable upon the conversion
thereof except as otherwise agreed by the Company and the
Initial Purchasers.
(vii) Delivery of Offering Memorandum. Each Initial
Purchaser will deliver to each purchaser of the Securities
from such Initial Purchaser, in connection with its original
distribution of the Securities, a copy of the Offering
Memorandum, as amended and supplemented at the date of such
delivery.
(b) Covenants of the Company. The Company covenants with
each Initial Purchaser as follows:
(i) Integration. The Company agrees that it will not and
will cause its Affiliates not to, directly or indirectly,
solicit any offer to buy, sell or make any offer or sale of,
or otherwise negotiate in respect of, securities of the
Company of any class if, as a result of the doctrine of
"integration" referred to in Rule 502 under the 1933 Act,
such offer or sale could render invalid (for the purpose of
(i) the sale of the Securities by the Company to the Initial
Purchasers, (ii) the resale of the Securities by any Initial
Purchaser to Subsequent Purchasers or (iii) the resale of
the Securities by such Subsequent Purchasers to others) the
exemption from the registration requirements of the 1933 Act
provided by Section 4(2) thereof or by Rule 144A thereunder
or otherwise.
(ii) Rule 144A Information. The Company agrees that, in
order to render the Securities eligible for resale pursuant
to Rule 144A under the 1933 Act, while any of the Securities
remain outstanding, it will make available, upon request, to
any holder of Securities or prospective purchasers of
Securities the information specified in Rule 144A(d)(4),
unless the Company furnishes information to the Commission
pursuant to Section 13 or 15(d) of the 1934 Act.
(iii) Restriction on Repurchases. Until the expiration
of two years after the original issuance of the Securities,
the Company will not, and will cause its Affiliates not to,
resell any Securities which are "restricted securities" (as
such term is defined under Rule 144(a)(3) under the 1933
Act), whether as beneficial owner or otherwise (except as
agent acting as a securities broker on behalf of and for the
account of customers in the ordinary course of business in
unsolicited broker's transactions).
(c) Qualified Institutional Buyer. Each Initial Purchaser
severally and not jointly represents and warrants to, and
agrees with, the Company that it is a "qualified
institutional buyer" within the meaning of Rule 144A under
the 1933 Act (a "Qualified
<PAGE>
Institutional Buyer") and an "accredited investor" within the meaning
of Rule 501(a) under the 1933 Act (an "Accredited Investor").
(d) Additional Representations and Warranties of the
Initial Purchasers. Each Initial Purchaser severally and
not jointly represents and agrees that it has not entered
and will not enter into any contractual arrangements with
respect to the distribution of the Securities, except with
its affiliates or with the prior written consent of the
Company.
SECTION 7. Indemnification.
(a) Indemnification of the Initial Purchasers. The
Company agrees to indemnify and hold harmless each Initial
Purchaser and each person, if any, who controls any Initial
Purchaser within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Memorandum or the
Final Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency
or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; provided that
(subject to Section 7(d) below) any such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by
the Merrill Lynch), reasonably incurred in investigating,
preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not
apply to any loss, liability, claim, damage or expense (x)
to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information
furnished to the Company by any Initial Purchaser
<PAGE>
through Merrill Lynch expressly for use in the Offering Memorandum
(or any amendment thereto), and (y) with respect to the
Preliminary Offering Memorandum, to the extent that the
Company shall sustain the burden of proving (i) that any
such loss, claim, expense, damage or liability of such
Initial Purchaser results from the fact that such Initial
Purchaser sold the Notes to a person as to whom there was
not sent or given, at or prior to the written confirmation
of such sale, a copy of the Final Offering Memorandum (as
then amended or supplemented), (ii) that the Company had
previously furnished copies thereof in sufficient quantities
to such Initial Purchaser and the loss, claim, expense,
damage or liability of such Initial Purchaser results from
an untrue statement or omission of a material fact contained
in the Preliminary Offering Memorandum that was corrected in
the Final Offering Memorandum and (iii) that sending such
Final Offering Memorandum by the date of closing to the
person or persons asserting such loss, liability, claim,
damage or expense would have constituted a defense to the
claim asserted by such person or persons.
(b) Indemnification of Company. Each Initial Purchaser
severally agrees to indemnify and hold harmless the Company
and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Offering Memorandum in
reliance upon and in conformity with written information
furnished to the Company by such Initial Purchaser through
Merrill Lynch expressly for use in the Offering Memorandum.
(c) Actions against Parties; Notification. Each
indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any
action commenced against it in respect of which indemnity
may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party
from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. In
the case of parties indemnified pursuant to Section 7(a)
above, counsel to the indemnified parties shall be selected
by Merrill Lynch, and, in the case of parties indemnified
pursuant to Section 7(b) above, counsel to the indemnified
parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of
any such action; provided, however, that counsel to the
indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or
separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall,
<PAGE>
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this
Section or Section 8 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all
liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act
by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse.
If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for
fees and expenses of counsel, such indemnifying party agrees
that it shall be liable for any settlement of the nature
contemplated by Section 7(a)(ii) effected without its
written consent if (i) such settlement is entered into more
than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30
days prior to such settlement being entered into, and (iii)
such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to
the date of such settlement; provided that an indemnifying
party shall not be liable for any such settlement, if such
indemnifying party (1) reimburses such indemnified party in
accordance with such request for the amount of such fees and
expenses of counsel as the indemnifying party believes in
good faith to be reasonable, and (2) provides written notice
to the indemnified party that the indemnifying party
disputes in good faith the reasonableness of the unpaid
balance of such fees and expenses.
SECTION 8. Contribution. If the indemnification
provided for in Section 7 hereof is for any reason
unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities,
claims, damages or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the
Initial Purchasers on the other hand from the offering of
the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the
one hand and of the Initial Purchasers on the other hand in
connection with the statements or omissions which resulted
in such losses, liabilities, claims, damages or expenses, as
well as any other relevant equitable considerations.
<PAGE>
The relative benefits received by the Company on the
one hand and the Initial Purchasers on the other hand in
connection with the offering of the Securities pursuant to
this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting
discount received by the Initial Purchasers, bear to the
aggregate initial offering price of the Securities.
The relative fault of the Company on the one hand and
the Initial Purchasers on the other hand shall be determined
by reference to, among other things, whether any such untrue
or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to
information supplied by the Company or by the Initial
Purchasers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to
this Section were determined by pro rata allocation (even if
the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to
above in this Section. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section
shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in
investigating, preparing or defending against any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section, no
Initial Purchaser shall be required to contribute any amount
in excess of the amount by which the total price at which
the Securities purchased and sold by it hereunder exceeds
the amount of any damages which such Initial 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 1933 Act) shall
be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who
controls an Initial Purchaser within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as such Initial Purchaser,
and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the
Company. The Initial Purchasers' respective obligations to
contribute pursuant to this Section 8 are several in
<PAGE>
proportion to the principal amount of Securities set forth
opposite their respective names in Schedule A hereto and not
joint.
SECTION 9. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and
agreements contained in this Agreement or in certificates of
officers of the Company or its subsidiary submitted pursuant
hereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any
Initial Purchaser or controlling person, or by or on behalf
of the Company, and shall survive delivery of the Securities
to the Initial Purchasers.
SECTION 10. Termination of Agreement.
(a) Termination; General. The Representatives may
terminate this Agreement, by notice to the Company, at any
time at or prior to the Closing Time (i) if there has been,
since the time of execution of this Agreement or since the
respective dates as of which information is given in the
Offering Memorandum, any material adverse change in the
condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and
its subsidiary considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there
has occurred any material adverse change in the financial
markets in the United States or the international financial
markets, any outbreak of hostilities or escalation thereof
or other calamity or crisis or any change or development
involving a prospective change in national or international
political, financial or economic conditions, in each case
the effect of which is such as to make it, in the judgment
of the Representatives, impracticable to market the
Securities or to enforce contracts for the sale of the
Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the
Commission or the Nasdaq National Market, or if trading
generally on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market has been
suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has
been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant
to this Section, such termination shall be without liability
of any party to any other party except as provided in
Section 4 hereof, and provided further that Sections 1, 7, 8
and 9 shall survive such termination and remain in full
force and effect.
SECTION 11. Default by One or More of the Initial
Purchasers. If one or more of the Initial Purchasers shall
fail at the Closing Time to purchase the Securities which it
or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the
<PAGE>
Representatives shall have the right, within 24 hours thereafter,
to make arrangements for one or more of the non-defaulting Initial
Purchasers, or any other initial purchasers, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if,
however, the Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed
10% of the aggregate principal amount of the Securities to
be purchased hereunder, each of the non-defaulting Initial
Purchasers shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting Initial
Purchasers, or
(b) if the number of Defaulted Securities exceeds 10% of
the aggregate principal amount of the Securities to be
purchased hereunder, this Agreement shall terminate without
liability on the part of any non-defaulting Initial
Purchaser.
No action taken pursuant to this Section shall relieve
any defaulting Initial Purchaser from liability in respect
of its default.
In the event of any such default which does not result
in a termination of this Agreement, either the
Representatives or the Company shall have the right to
postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Offering
Memorandum or in any other documents or arrangements.
SECTION 12. Notices. All notices and other
communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the
Initial Purchasers shall be directed to them at North Tower,
World Financial Center, New York, New York 10281, attention
of Syndicate Operations, with a copy to Debevoise &
Plimpton, 875 Third Avenue, New York, New York, 10022,
attention of Peter J. Loughran; notices to the Company shall
be directed to it at 3172 Porter Drive, Palo Alto,
California 94304, attention of Louis G. Lange with a copy to
Cooley Godward LLP, 5 Palo Alto Square, Palo Alto,
California 94306, attention of Alan C. Mendelson.
SECTION 13. Parties. This Agreement shall inure to the
benefit of and be binding upon the Initial Purchasers, the
Company and their respective successors. Nothing expressed
or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other
than the Initial Purchasers and the Company and their
respective successors and the controlling persons and
officers and directors referred to in Sections 7 and 8 and
their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be
for the sole and exclusive benefit of the Initial Purchasers
and the Company and
<PAGE>
their respective successors, and said
controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of
Securities from the Initial Purchasers shall be deemed to be
a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW
YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section
headings herein are for convenience only and shall not
affect the construction hereof.
<PAGE>
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to
the Company a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a binding agreement
among the Initial Purchasers and the Company in accordance
with its terms.
Very truly yours,
CV THERAPEUTICS, INC.
By
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
J.P. MORGAN SECURITIES INC.
FLEETBOSTON ROBERTSON STEPHENS INC.
SG COWEN SECURITIES CORPORATION
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
Authorized Signatory
For themselves and as Representatives of the other Initial
Purchasers named in Schedule A hereto.
<PAGE>
SCHEDULE A
Name of Initial Purchaser
Principal Amount
of Securities
Merrill Lynch, Pierce, Fenner & Smith Incorporated 87,002,000
J.P. Morgan Securities Inc. 29,166,000
FleetBoston Robertson Stephens Inc. 29,166,000
SG Cowen Securities Corporation 29,166,100
Total $175,000,000
<PAGE>
SCHEDULE B
CV Therapeutics, Inc.
$175,000,000 4 3/4% Convertible Subordinated Notes due 2007
1. The initial offering price of the Securities shall be
100% of the principal amount thereof, plus accrued interest,
if any, from the date of issuance.
2. The purchase price to be paid by the Initial
Purchasers for the Securities shall be 96.875% of the
principal amount thereof.
3. The interest rate on the Securities shall be 4_% per
annum.
4. The Securities shall be convertible into shares of the
Company's Common Stock, par value $.001 per share, at an
initial conversion price of $63.84 per share (equivalent to
a conversion rate of 15.6642 shares per $1,000 principal
amount of Securities).
5. The Securities may be redeemed at the option of the
Company prior to March 7, 2003, in whole or in part, if:
the closing price of the Company's common stock
has exceeded 150% of the conversion price then in
effect for at least 20 trading days within a period
of 30 consecutive trading days ending on the
trading day prior to the date of mailing of the
provisional redemption notice (which date shall be
at least 20 but not more than 60 trading days prior
to the provisional redemption date); and
the shelf registration statement covering resales
of the notes and the common stock issuable upon
conversion of the notes is effective and available
for use and is expected to remain effective for the
30 days following the provisional redemption date.
6. The provisional redemption price to be paid in the
event of a provisional redemption described in paragraph 5
above and to be supplied in the Offering Memorandum (and
correspondingly in the Indenture) shall be a price equal to
$1,000 per $1,000 principal amount of Notes to be redeemed
plus accrued and unpaid interest, if any, to the provisional
redemption date.
Upon any provisional redemption, the Company shall also
make an additional payment in cash with respect to the notes
called for redemption to holders on the notice date in an
amount equal to $107.14 per $1,000 principal amount of
notes, less the amount of any interest actually paid on the
notes prior to the notice date. The Company is
<PAGE>
obligated to make this additional payment on all notes called for
provisional redemption, including any notes converted after
the notice date and before the provisional redemption date.
7. The Securities may be redeemed at the option of the
Company at any time after March 7, 2003 in whole or in part.
8. The redemption prices to be supplied in the Offering
Memorandum (and correspondingly in the Indenture) (expressed
as a percentage of principal amount) are as follows for the
12-month period specified below:
Year Redemption
Price
March 7, 2003 through March 6, 2004 102.714%
March 7, 2004 through March 6, 2005 102.036%
March 7, 2005 through March 6, 2006 101.357%
March 7, 2006 and thereafter 100.679%
<PAGE>
SCHEDULE C
List of Persons Subject to Lock-Up
Louis G. Lange, M.D., Ph.D.
Daniel K. Spiegelman
Andrew A. Wolff, M.D.
Brent K. Blackburn, Ph.D.
Richard M. Lawn, Ph.D.
David C. McCaleb
Thomas L. Gutshall
Barbara J. McNeil, M.D., Ph.D.
J. Leighton Read, M.D.
Costa G. Sevastopoulos, Ph.D.
Isaac Stein
<PAGE>
Exhibit A-1
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware.
(ii) The Company has corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum and to
enter into and perform its obligations under the Purchase
Agreement, the Registration Rights Agreement, the Indenture
and the Securities.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a
Material Adverse Effect.
(iv) The Company has an authorized capitalization as
set forth in the Offering Memorandum; the shares of issued
and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-
assessable and are not subject to any preemptive or, to the
best of our knowledge, other similar rights of any
securityholder of the Company.
(v) To the best of our knowledge and information, the
Company does not have any subsidiaries other than CVTA.
(vi) The Purchase Agreement has been duly authorized,
executed and delivered by the Company.
(vii) The Indenture has been duly authorized, executed
and delivered by the Company and (assuming the due
authorization, execution and delivery thereof by the
Trustee) constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with
its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally, or by general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(viii) The Securities are in the form contemplated by the
Indenture, have been duly authorized by the Company and,
when executed by the Company and authenticated by the
Trustee in the manner provided in the Indenture (assuming
the due authorization,
<PAGE>
execution and delivery of the Indenture by the Trustee) and issued
and delivered against payment of the purchase price therefor will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium (including, without
limitation, all laws relating to fraudulent transfers), or
other similar laws relating to or affecting enforcement of
creditors' rights generally, or by general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law), and will be entitled to the
benefits of the Indenture.
(ix) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and
constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally, or by general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(x) If a California court were to apply California law in
any proceeding relating to the Indenture, the Securities and
the Registration Rights Agreement, each of them would
constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with their
terms under California law, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws
relating to or affecting enforcement of creditors' rights
generally, or by general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity
or at law).
(xi) Upon issuance and delivery of the Securities in
accordance with the Purchase Agreement and the Indenture,
the Securities shall be convertible at the option of the
holder thereof for shares of Common Stock in accordance with
the terms of the Securities and the Indenture; the shares of
Common Stock issuable upon conversion of the Securities have
been duly authorized and reserved for issuance upon such
conversion by all necessary corporate action; such shares,
when issued upon such conversion, will be validly issued and
will be fully paid and non-assessable and free and clear of
all liens, encumbrances, equities or claims imposed by or
arising from actions of the Company and no holder of such
Common Stock is or will be subject to personal liability by
reason of being such a holder.
(xii) The issuance of the shares of Common Stock upon
conversion of the Securities is not subject to the
preemptive or, to our knowledge, other similar rights of any
securityholder of the Company. There is no restriction upon
the voting or transfer of
<PAGE>
any shares of common stock pursuant to the Company's certificate
of incorporation or bylaws.
(xiii) The Indenture conforms in all material respects
with the 1939 Act.
(xiv) The Securities, the Indenture and the Common Stock
conform in all material respects to the descriptions thereof
contained in the Offering Memorandum.
(xv) To the best of our knowledge, except as set forth in
the Offering Memorandum, there are no contracts, agreements
or understandings between the Company and any person
granting such person the right to (1) require the Company to
file a registration statement pursuant to the 1933 Act with
respect to any securities of the Company or (2) include in a
registration statement filed pursuant to the 1933 Act any
securities of the Company.
(xvi) To the best of our knowledge, except as disclosed in
the Offering Memorandum, there is not pending or overtly
threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any subsidiary is a
party, or to which the property of the Company or any
subsidiary thereof is subject, before or brought by a court
or governmental agency or body, which could reasonably be
expected to result in a Material Adverse Effect, or which
could reasonably be expected to materially and adversely
affect the properties or assets thereof or the consummation
of the transactions contemplated in the Purchase Agreement,
the Indenture, the Securities and the Registration Rights
Agreement or the performance by the Company of its
obligations thereunder or the transactions contemplated by
the Offering Memorandum.
(xvii) The information in the Offering Memorandum under
"Business-Collaborations and Licenses", "Description of
Notes," "Description of Capital Stock" and "United States
Federal Income Tax Considerations," to the extent that it
constitutes matters of law, summaries of legal matters or
legal documents or instruments, the Company's charter and
bylaws or legal proceedings, or legal conclusions, has been
reviewed by us and is correct in all material respects.
(xviii) All descriptions in the Offering Memorandum of
contracts and other documents to which the Company or its
subsidiary is a party are accurate in all material respects.
(xix) To the best of our knowledge, the Company is not in,
nor with the giving of notice or lapse of time would be, in
violation of or in default under its certificate of
incorporation or by-laws .
(xx) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of,
any court or governmental authority or agency,
<PAGE>
domestic or foreign (other than such as may be required under the
applicable securities laws of the various jurisdictions in
which the Securities will be offered or sold, as to which we
need express no opinion) is necessary or required in
connection with the due authorization, execution and
delivery of the Purchase Agreement or the Registration
Rights Agreement or the due execution, delivery or
performance of the Indenture by the Company or for the
offering, issuance, sale or delivery of the Securities to
the Initial Purchasers or the resale by the Initial
Purchasers in accordance with the terms of the Purchase
Agreement or for the issuance of shares of Common Stock upon
conversion of Securities.
(xxi) It is not necessary in connection with the offer, sale
and delivery of the Securities to the Initial Purchasers and
to each Subsequent Purchaser in the manner contemplated by
the Purchase Agreement and the Offering Memorandum or in
connection with the conversion of the Notes into shares of
the Company's Common Stock in the manner contemplated in the
Indenture to register the Securities or the shares of Common
Stock issuable upon conversion of the Notes under the 1933
Act or to qualify the Indenture under the 1939 Act.
(xxii) The execution, delivery and performance of the
Purchase Agreement, the DTC Agreement, the Indenture, the
Registration Rights Agreement and the Securities and the
consummation of the transactions contemplated in the
Purchase Agreement, the Registration Rights Agreement and in
the Offering Memorandum (including the use of the proceeds
from the sale of the Securities as described in the Offering
Memorandum under the caption "Use Of Proceeds" and the
issuance of the shares of Common Stock issuable upon
conversion of the Securities) and compliance by the Company
with its obligations under the Purchase Agreement, the
Indenture, the Registration Rights Agreement and the
Securities do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(xiv) of the Purchase Agreement)
under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or its subsidiary thereof pursuant to any material
contract filed or incorporated by reference as an exhibit to
the Company's 1998 Form 10-K and Forms 10-Q for the quarters
ended March 31, June 30 and September 30, 1999 (except for
such conflicts, breaches or defaults or liens, charges or
encumbrances that could not reasonably be expected to have a
Material Adverse Effect), nor will such action result in any
violation of the provisions of the certificate of
incorporation or by-laws of the Company, or to our
knowledge, any applicable law, statute (except for the
securities or blue sky laws of the various states as to
which we express no opinion), rule, regulation, judgment,
order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its properties,
assets or operations.
<PAGE>
(xxiii) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of
the proceeds thereof described in the Offering Memorandum,
will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are
defined in the 1940 Act.
Nothing has come to our attention that would lead us to
believe that the Offering Memorandum or any amendment or
supplement thereto (except for financial statements and
schedules, related notes, other financial data and
statistical data derived therefrom included therein or
omitted therefrom as to which we need make no statement), at
the time the Offering Memorandum was issued, at the time any
such amended or supplemented Offering Memorandum was issued
or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading.
In rendering such opinion, such counsel may rely as to
matters of fact (but not as to legal conclusions), to the
extent they deem proper, on certificates of responsible
officers of the Company and public officials. Such opinion
shall not state that it is to be governed or qualified by,
or that it is otherwise subject to, any treatise, written
policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of
the ABA Section of Business Law (1991).
<PAGE>
Exhibit A-2
FORM OF OPINION OF COMPANY'S
INTELLECTUAL PROPERTY COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
(i) To the best of our knowledge, the Company owns or
possesses all Intellectual Property currently employed by
them in connection with the business now operated by them
except where the failure to own or possess or otherwise be
able to acquire such Intellectual Property could not, singly
or in the aggregate, have a Material Adverse Effect.
(ii) Based upon a review of the third party rights
made known to us and discussions with scientific personnel
of the Company, we are not aware of any valid United States
or foreign patent, that is or would be infringed by the
activities of the Company in the manufacture, use or sale of
any presently proposed product, the technologies employed by
the Company or the method of their use in any presently
proposed product, each as described in the Offering
Memorandum and as such are related to the foregoing
technology and products.
(iii) We have reviewed the Company patent applications
which are identified in the Patent Schedule included with
this letter, and in such counsel's opinion the Company's
patent applications have been properly prepared and filed,
and are being diligently pursued by the Company, and the
inventions described in the Company patent applications are
owned by, have been assigned to or are licensed to the
Company.
(iv) To our knowledge except as disclosed in the
Offering Memorandum no party or individual has any right or
claim in any of the inventions, patents or patent
applications listed in the Patent Schedule and to the best
of our knowledge each of the Company's patent applications
discloses patentable subject matter.
(v) To the best of our knowledge, the Company is not
infringing or otherwise violating any Intellectual Property
of others, unless otherwise disclosed in the Offering
Memorandum. To the best of our knowledge, the Company has
not received any notice of infringement of or conflict with
asserted rights of others with respect to any Intellectual
Property.
(vi) We know of no legal or governmental proceedings
that are pending or, to the best of our knowledge, that are
threatened, relating to any Intellectual Property, except
(A) as disclosed in the Offering Memorandum or (B) which,
singly or in the aggregate, if
<PAGE>
the subject of an unfavorable decision, ruling or finding, could
have a Material Adverse Effect.
We are familiar with the Intellectual Property used by
the Company in its business and the manner of such use and
we have reviewed the Offering Memorandum, including
particularly the portions of the Offering Memorandum
describing or referring to any Intellectual Property
(collectively, the "Intellectual Property Disclosure"). We
have reviewed, among other things, the statements in the
Offering Memorandum under the captions:
"Risk Factors - We may be unable to effectively protect
our intellectual property, "
"Risk Factors -Our business depends on attracting and
retaining collaborators and licensors," and
"Business - Collaborations and Licenses," and "Business
- Patents and Proprietary Technology."
We have no reason to believe that the information
contained or incorporated by reference in the Intellectual
Property Disclosure in the Offering Memorandum at the time
the Offering Memorandum was issued, at the time any amended
or supplemented Offering Memorandum was issued or at the
Closing Time, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely as to
matters of fact (but not as to legal conclusions), to the
extent they deem proper, on certificates of responsible
officers of the Company and public officials. Such opinion
shall not state that it is to be governed or qualified by,
or that it is otherwise subject to, any treatise, written
policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of
the ABA Section of Business Law (1991).
<PAGE>
Exhibit A-3
FORM OF OPINION OF COMPANY'S REGULATORY COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
We have acted as special counsel to the Company with
respect to certain United States Food and Drug
Administration ("FDA") regulatory matters. In our capacity
as special FDA regulatory counsel to the Company, we have
reviewed at your request (1) those portions of the Offering
Memorandum set forth under the captions "Risk Factors - Our
product candidates will take at least several years to
develop, and we cannot assure you that we will successfully
develop, market, and manufacture these products", "Risk
Factors - If we are unable to satisfy the regulatory
requirements for our clinical trials, we will not be able to
commercialize our drug candidates", "Risk Factors - If we
are unable to satisfy governmental regulations relating to
the development of our drug candidates, we may be unable to
obtain necessary regulatory approvals to commercialize our
products", "Risk Factors - Our products, even if approved by
the FDA or foreign regulatory agencies, may not be accepted
by physicians, insurers or patients", "Risk Factors - We
have no manufacturing experience and will depend on third
parties to manufacture our products", "Risk Factors -
Failure to obtain adequate reimbursement from government
health administration authorities, private health insurers
and other organizations could materially adversely affect
our future business, results of operations and financial
condition", "Business-Manufacturing" and "Business -
Government Regulation" (collectively, the "Regulatory
Disclosure").
We have examined originals, or copies that are
identified as being true copies of originals, of submissions
made by the Company to the FDA pertaining to the Company's
product candidates identified in the Offering Memorandum and
related correspondence between FDA and the Company, clinical
trial protocols submitted to the FDA, representative
clinical investigator files for each clinical trial, and
records of drug shipments to investigators, in all such
cases pertaining to such product candidates, which documents
were identified to us by the Company as all of the material
FDA regulatory documents and communications in the Company's
possession. We have also relied upon oral statements of
Company representatives as to matters of fact and have made
no other investigation of fact.
(i) the statements in the Regulatory Disclosure,
insofar as such statements purport to describe or summarize
applicable provisions of the Federal Food, Drug, and
Cosmetic Act ("FDCA") and the regulations promulgated
thereunder, are accurate and complete in all material
respects and fairly present the information set forth
therein;
<PAGE>
(ii) the Company has obtained such licenses, permits,
approvals, and authorizations required by the FDA that are
necessary for the conduct of the business of the Company as
it is currently conducted and described in the Offering
Memorandum and to our knowledge such authorizations are in
effect;
(iii) we are not aware of any lawsuit or regulatory
proceeding, pending or threatened, brought by or before the
FDA, in which the Company is or would be the defendant or
respondent, nor are we aware of any adverse judgment,
decree, or order currently in effect that has been issued by
the FDA against the Company.
We have no reason to believe that the information
contained in the Regulatory Disclosure in the Offering
Memorandum at the time the Offering Memorandum was issued,
at the time any amended or supplemented Offering Memorandum
was issued or at the Closing Time, included or includes an
untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
In rendering such opinion, such counsel may rely as to
matters of fact (but not as to legal conclusions), to the
extent they deem proper, on certificates of responsible
officers of the Company and public officials. Such opinion
shall not state that it is to be governed or qualified by,
or that it is otherwise subject to, any treatise, written
policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of
the ABA Section of Business Law (1991).
<PAGE>
Exhibit A-4
FORM OF OPINION OF COMPANY'S SPECIAL
CAYMAN ISLANDS COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
(i) CVTA has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power
and authority to own, lease and operate its properties and
to conduct its business as described in the Offering
Memorandum and is duly qualified as a foreign corporation to
transact business and is in good standing in each
jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to
qualify or to be in good standing could not reasonably be
expected to result in a Material Adverse Effect; all of the
issued and outstanding capital stock of the CVTA has been
duly authorized and validly issued, is fully paid and
non-assessable and, to the best of our knowledge and
information, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(ii) To the best of our knowledge, CVTA is not in, nor
with the giving of notice or lapse of time would be, in
violation of or in default under its certificate of
incorporation or bylaws.
In rendering such opinion, such counsel may rely as to
matters of fact (but not as to legal conclusions), to the
extent they deem proper, on certificates of responsible
officers of the Company and public officials. Such opinion
shall not state that it is to be governed or qualified by,
or that it is otherwise subject to, any treatise, written
policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of
the ABA Section of Business Law (1991).
<PAGE>
Exhibit B
March 1, 2000
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J.P. Morgan Securities, Inc.
FleetBoston Robertson Stephens Inc.
SG Cowen Securities Corporation
as Representative(s) of the several Initial Purchasers
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
The undersigned, a stockholder and/or officer and/or
director of CV Therapeutics, Inc., a Delaware corporation
(the "Company"), understands that Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch"), J.P. Morgan Securities, Inc., FleetBoston Robertson
Stephens Inc. and SG Cowen Securities Corporation propose to
enter into a Purchase Agreement (the "Purchase Agreement")
with the Company providing for the offering of the Company's
4_% Convertible Subordinate Notes due 2007 which are
convertible at the option of the holder at any time on or
prior to maturity into shares of the Company's Common Stock,
par value $.001 per share (the "Common Stock"). In
recognition of the benefit that such an offering will confer
upon the undersigned as a stockholder and/or officer and/or
director of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, the undersigned agrees that, during a
period of 90 days from the date of the Purchase Agreement,
the undersigned will not, without the prior written consent
of Merrill Lynch, directly or indirectly, (i) offer, pledge,
sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any
option, right or warrant for the sale of, or otherwise
dispose of or transfer any shares of the Company's Common
Stock or any securities convertible into or exchangeable or
exercisable for or repayable with Common Stock, whether now
owned or hereafter acquired by the undersigned or with
respect to which the undersigned has or hereafter acquires
the power of disposition, or file any registration statement
under the Securities Act of 1933, as amended, with respect
to any of the foregoing or (ii) enter into any swap
<PAGE>
or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or
transaction is to be settled by delivery of Common Stock or
other securities, in cash or otherwise. The undersigned
understands that Merrill Lynch has agreed, subject to
approval by the Company's Chief Executive Officer, to an
exception to the foregoing agreements to permit the sale of
up to 100,000 shares of Common Stock in the aggregate by the
undersigned and the other persons executing letter
agreements identical to this letter agreement.
Very truly yours,
Signature:
_________________________
Print Name:
________________________
<PAGE>
Execution Copy
RESALE REGISTRATION RIGHTS AGREEMENT
among
CV THERAPEUTICS, INC.,
MERRILL LYNCH & CO.,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
J.P. MORGAN SECURITIES INC.,
FLEETBOSTON ROBERTSON STEPHENS INC. and
SG COWEN SECURITIES CORPORATION
Dated March 7, 2000
<PAGE>
Resale Registration Rights Agreement (this
"Agreement"), dated March 7, 2000, among CV Therapeutics,
Inc., a Delaware corporation (together with any successor
entity, the "Issuer"), Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), J.P.
Morgan Securities Inc., FleetBoston Robertson Stephens Inc.,
and SG Cowen Securities Corporation (collectively, the
"Initial Purchasers").
Pursuant to the Purchase Agreement, dated March 1,
2000, between the Issuer and the Initial Purchasers (the
"Purchase Agreement"), the Initial Purchasers have agreed to
purchase from the Issuer up to $175,000,000 ($201,250,000 if
the Initial Purchasers exercise the over-allotment option in
full) in aggregate principal amount of 4_% Convertible
Subordinated Notes due 2007 (the "Notes"). The Notes will
be convertible into fully paid, nonassessable common stock,
par value $.001 per share, of the Issuer (the "Common
Stock") on the terms, and subject to the conditions, set
forth in the Indenture (as defined herein). To induce the
Initial Purchasers to purchase the Notes, the Issuer has
agreed to provide the registration rights set forth in this
Agreement pursuant to the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following meanings:
Advice: As defined in Section 4(c)(ii) hereof.
Business Day: A day other than a Saturday or Sunday or
any federal holiday in the United States.
Commission: Securities and Exchange Commission.
Common Stock: As defined in the preamble hereto.
Damages Payment Date: Each Interest Payment Date. For
purposes of this Agreement, if no Notes are outstanding,
"Damages Payment Date" shall mean each March 7 and
September 7.
Effectiveness Period: As defined in Section 2(a)(iii)
hereof.
Effectiveness Target Date: As defined in Section
2(a)(ii) hereof.
Exchange Act: Securities Exchange Act of 1934, as
amended.
<PAGE>
Holder: A Person who owns, beneficially or otherwise,
Transfer Restricted Securities.
Indenture: The Indenture, dated as of March 7, 2000,
between the Issuer and Norwest Bank, Minnesota, N.A., as
trustee, pursuant to which the Notes are to be issued, as
such Indenture is amended, modified or supplemented from
time to time in accordance with the terms thereof.
Initial Purchasers: As defined in the preamble hereto.
Interest Payment Date: As defined in the Indenture.
Issuer: As defined in the preamble hereto.
Liquidated Damages: As defined in Section 3(a) hereof.
Majority of Holders: Holders holding over 50% of the
aggregate principal amount of Notes outstanding; provided
that, for purpose of this definition, a holder of shares of
Common Stock which constitute Transfer Restricted Securities
and were issued upon conversion of the Notes shall be deemed
to hold an aggregate principal amount of Notes (in addition
to the aggregate principal amount of Notes held by such
holder) equal to the aggregate principal amount of Notes
converted by such Holder into such shares of Common Stock.
NASD: National Association of Securities Dealers, Inc.
Notes: As defined in the preamble hereto.
Person: An individual, partnership, corporation,
unincorporated organization, trust, joint venture or a
government or agency or political subdivision thereof.
Prospectus: The prospectus included in a Shelf
Registration Statement, as amended or supplemented by any
prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material
incorporated by reference into such Prospectus.
Questionnaire Deadline: As defined in Section 2(b)
hereof.
Record Holder: With respect to any Damages Payment
Date, each Person who is a Holder on the record date with
respect to the Interest Payment Date on which such Damages
Payment Date shall occur. In the case of a Holder of shares
of Common Stock issued upon conversion of the Notes, "Record
Holder" shall mean each Person who is a
<PAGE>
Holder of shares of Common Stock which constitute Transfer Restricted
Securities on the February 20 or August 20 immediately preceding the
Damages Payment Date.
Registration Default: As defined in Section 3(a)
hereof.
Sale Notice: As defined in Section 4(e) hereof.
Securities Act: Securities Act of 1933, as amended.
Shelf Filing Deadline: As defined in Section 2(a)(i)
hereof.
Shelf Registration Statement: As defined in Section
2(a)(i) hereof.
Suspension Period: As defined in Section 4(b)(i)
hereof.
TIA: Trust Indenture Act of 1939, as in effect on the
date the Indenture is qualified under the TIA.
Transfer Restricted Securities: Each Note and each
share of Common Stock issued upon conversion of Notes until
the earlier of:
(i) the date on which such Note or such share of Common
Stock issued upon conversion has been effectively registered
under the Securities Act and disposed of in accordance with
the Shelf Registration Statement;
(ii) the date on which such Note or such share of Common
Stock issued upon conversion is transferred in compliance
with Rule 144 under the Securities Act or may be sold or
transferred pursuant to Rule 144(k) under the Securities Act
(or any other similar provision then in force); or
(iii) the date on which such Note or such share of Common
Stock issued upon conversion ceases to be outstanding
(whether as a result of redemption, repurchase and
cancellation, conversion or otherwise).
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Issuer are sold to
an underwriter for reoffering to the public.
2. Shelf Registration.
(a) The Issuer shall:
(i) not later than 90 days after the date hereof (the
"Shelf Filing Deadline"), cause to be filed a registration
statement pursuant to Rule 415 under
<PAGE>
the Securities Act (the "Shelf Registration Statement"), which Shelf
Registration Statement shall provide for resales of all Transfer
Restricted Securities held by Holders that have provided the
information required pursuant to the terms of Section 2(b)
hereof;
(ii) use its best efforts to cause the Shelf Registration
Statement to be declared effective by the Commission as
promptly as practicable, but in no event later than 150 days
after the date hereof (the "Effectiveness Target Date"); and
(iii) use its best efforts to keep the Shelf Registration
Statement continuously effective, supplemented and amended
as required by the provisions of Section 4(b) hereof to the
extent necessary to ensure that (A) it is available for
resales by the Holders of Transfer Restricted Securities
entitled to the benefit of this Agreement and (B) conforms
with the requirements of this Agreement and the Securities
Act and the rules and regulations of the Commission
promulgated thereunder as announced from time to time for a
period (the "Effectiveness Period") of:
(1) two years following the last date of original
issuance of Notes; or
(2) such shorter period that will terminate when (x)
all of the Holders of Transfer Restricted Securities are
able to sell all Transfer Restricted Securities immediately
without restriction pursuant to Rule 144(k) under the
Securities Act or any successor rule thereto, (y) when all
Transfer Restricted Securities have ceased to be outstanding
(whether as a result of redemption, repurchase and
cancellation, conversion or otherwise) or (z) all Transfer
Restricted Securities registered under the Shelf
Registration Statement have been sold.
(b) No Holder may include any of its Transfer Restricted
Securities in the Shelf Registration Statement pursuant to
this Agreement unless such Holder furnishes to the Issuer in
writing, prior to or on the 20th Business Day after receipt
of a request therefor (the "Questionnaire Deadline"), [such
information as the Issuer may reasonably request, including]
the information specified in the form of questionnaire
attached hereto as Exhibit A, for use in connection with the
Shelf Registration Statement or the Prospectus or
preliminary Prospectus included therein and in any
application to be filed with or under state securities laws.
[In connection with all such requests for information from
Holders in addition to that set forth in Exhibit A, the
Issuer shall notify such Holders of the requirements set
forth in the preceding sentence.] No Holder shall be
entitled to Liquidated Damages pursuant to Section 3 hereof
unless such Holder shall have provided all such requested
information prior to or on the Questionnaire Deadline.
<PAGE>
3. Liquidated Damages.
(a) If:
(i) the Shelf Registration Statement is not filed with the
Commission prior to or on the Shelf Filing Deadline;
(ii) the Shelf Registration Statement has not been declared
effective by the Commission prior to or on the Effective
Target Date;
(iii) subject to the provisions of Section 4(b)(i) hereof,
the Shelf Registration Statement is filed and declared
effective but, during the Effectiveness Period, shall
thereafter cease to be effective or fail to be usable for
its intended purpose without being succeeded within five
Business Days by a post-effective amendment to the Shelf
Registration Statement or a report filed with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act that cures such failure and, in the case of a
post-effective amendment, is itself immediately declared
effective; or
(iv) prior to or on the 45th or 60th day, as the case may
be, of any Suspension Period, such suspension has not been
terminated,
(each such event referred to in foregoing clauses
(i) through (iv), a "Registration Default"), the
Issuer hereby agrees to pay liquidated damages
("Liquidated Damages") with respect to the
Transfer Restricted Securities from and including
the day following the Registration Default to but
excluding the day on which the Registration
Default has been cured:
(A) in respect of the Notes, to each holder of Notes,
(x) with respect to the first 90-day period during which a
Registration Default shall have occurred and be continuing,
in an amount per year equal to an additional 0.25% of the
principal amount of the Notes and (y) with respect to the
period commencing on the 91st day following the day the
Registration Default shall have occurred and be continuing,
in an amount per year equal to an additional 0.50% of the
principal amount of the Notes; provided that in no event
shall Liquidated Damages accrue at a rate per year exceeding
0.50% of the principal amount of the Notes; and
(B) In respect of any shares of Common Stock, to each
holder of shares of Common Stock issued upon conversion of
Notes, (x) with respect to the first 90-day period in which
a Registration Default shall have occurred and be
continuing, in an amount per year equal to 0.25% of
<PAGE>
the principal amount of the converted Notes and (y) with respect
to the period commencing the 91st day following the day the
Registration Default shall have occurred and be continuing,
in an amount per year equal to 0.50% of the principal amount
of the converted Notes; provided that in no event shall
Liquidated Damages accrue at a rate per year exceeding 0.50%
of the principal amount of the converted Notes.
(b) All accrued Liquidated Damages shall be paid in
arrears to Record Holders by the Issuer on each Damages
Payment Date by wire transfer of immediately available funds
or by federal funds check. Following the cure of all
Registration Defaults relating to any particular Note or
share of Common Stock, the accrual of Liquidated Damages
with respect to such Note or share of Common Stock will
cease.
All obligations of the Issuer set forth in this Section
3 that are outstanding with respect to any Transfer
Restricted Security at the time such security ceases to be a
Transfer Restricted Security shall survive until such time
as all such obligations with respect to such Transfer
Restricted Security shall have been satisfied in full.
The Liquidated Damages set forth above shall be the
exclusive monetary remedy available to the Holders for such
Registration Default.
4. Registration Procedures.
(a) In connection with the Shelf Registration Statement,
the Issuer shall comply with all the provisions of Section
4(b) hereof and shall use its best efforts to effect such
registration to permit the resale of the Transfer Restricted
Securities in accordance with the intended method or methods
of distribution thereof, and pursuant thereto, shall as
expeditiously as possible prepare and file with the
Commission a Shelf Registration Statement relating to
registration on any appropriate form under the Securities
Act.
(b) In connection with the Shelf Registration Statement
and any Prospectus required by this Agreement to permit the
resale of Transfer Restricted Securities, the Issuer shall:
(i) Subject to any notice by the Issuer in accordance with
this Section 4(b) of the existence of any fact or event of
the kind described in Section 4(b)(iii)(D), use its best
efforts to keep the Shelf Registration Statement continuous
ly effective during the Effectiveness Period. Upon the
occurrence of any event that would cause the Shelf
Registration Statement or the Prospectus contained therein
(A) to contain a material misstatement or omission or
(B) not be effective and usable for resale of Transfer
Restricted Securities during the Effectiveness Period, the
Issuer shall file promptly an appropriate amendment to
<PAGE>
the Shelf Registration Statement or a report filed with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act, in the case of clause (A), correcting any
such misstatement or omission, and, in the case of either
clause (A) or (B), use its best efforts to cause any such
amendment to be declared effective and the Shelf
Registration Statement and the related Prospectus to become
usable for their intended purposes as soon as practicable
thereafter. Notwithstanding the foregoing, the Issuer may
suspend the effectiveness of the Shelf Registration
Statement by written notice to the Holders for a period not
to exceed an aggregate of 45 days in any 90-day period (each
such period, a "Suspension Period") if:
(x) an event occurs and is continuing as a
result of which the Shelf Registration Statement
would, in the Issuer's reasonable judgment,
contain an untrue statement of a material fact or
omit to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading; and
(y) the Issuer reasonably determines that
the disclosure of such event at such time would
have a material adverse effect on the business of
the Issuer (and its subsidiaries, if any, taken as
a whole);
provided that in the event the disclosure relates to a
previously undisclosed proposed or pending material
business transaction, the disclosure of which would
impede the Issuer's ability to consummate such
transaction, the Issuer may extend a Suspension Period
from 45 days to 60 days; provided, however, that
Suspension Periods shall not exceed an aggregate of 90
days in any 360-day period.
(ii) Prepare and file with the Commission such post-
effective amendments to the Shelf Registration Statement as
may be necessary to keep the Shelf Registration Statement
effective during the Effectiveness Period; cause the
Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to
Rule 424 under the Securities Act, and to comply fully with
the applicable provisions of Rules 424 and 430A under the
Securities Act in a timely manner; and comply with the
provisions of the Securities Act with respect to the
disposition of all securities covered by the Shelf
Registration Statement during the applicable period in
accordance with the intended method or methods of
distribution by the sellers thereof set forth in the Shelf
Registration Statement or Prospectus supplement.
(iii) Advise the selling Holders that have provided the
information required by Section 4(d) of this Agreement,
Merrill Lynch, as representative of the Initial Purchasers,
and the underwriter(s), if any, promptly (but in any event
<PAGE>
within five Business Days) and, if requested by such
Persons, confirm such advice in writing:
(A) with respect to the Shelf Registration Statement or
any post-effective amendment thereto, when the same has
become effective, and when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed,
(B) of any request by the Commission for amendments to the
Shelf Registration Statement or amendments or supplements to
the Prospectus or for additional information relating
thereto,
(C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration
Statement under the Securities Act or of the suspension by
any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of
the preceding purposes, or
(D) of the existence of any fact or the happening of any
event, during the Effectiveness Period, that makes any
statement of a material fact made in the Shelf Registration
Statement or the Prospectus, any amendment or supplement
thereto, or any document incorporated by reference therein
untrue, or that requires the making of any additions to or
changes in the Shelf Registration Statement or the
Prospectus in order to make the statements therein not
misleading.
If at any time the Commission shall issue any stop
order suspending the effectiveness of the Shelf
Registration Statement, or any state securities
commission or other regulatory authority shall issue an
order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Issuer
shall use its reasonable best efforts to obtain the
withdrawal or lifting of such order at the earliest
possible time.
(iv) Furnish to each of the selling Holders that have
provided the information required by Section 4(d) of this
Agreement, Merrill Lynch, as representative of the Initial
Purchasers and each of the underwriter(s), if any, before
filing with the Commission, a copy of the Shelf Registration
Statement and copies of any Prospectus included therein or
any amendments or supplements to the Shelf Registration
Statement or Prospectus (other than documents incorporated
by reference after the initial filing of the Shelf
Registration
<PAGE>
Statement), which documents will be subject to
the review of such Holders, Merrill Lynch as representative
of the Initial Purchasers and underwriter(s), if any, for a
period of at least ten Business Days, and the Issuer will
not file any Shelf Registration Statement or Prospectus or
any amendment or supplement to the Shelf Registration
Statement or Prospectus (other than documents incorporated
by reference) to which a selling Holder of Transfer
Restricted Securities covered by the Shelf Registration
Statement, Merrill Lynch, as representative of the Initial
Purchasers, or the underwriter(s), if any, shall reasonably
object within five Business Days after the receipt thereof.
A selling Holder, Merrill Lynch, as representative of the
Initial Purchasers, or underwriter, if any, shall be deemed
to have reasonably objected to such filing if the Shelf
Registration Statement, amendment, Prospectus or supplement,
as applicable, as proposed to be filed, contains a material
misstatement or omission. Notwithstanding the foregoing,
the Issuer shall not be required to furnish the selling
Holders with any amendment or supplement to the Shelf
Registration Statement or Prospectus filed solely to reflect
changes to the amount of Notes held by any particular Holder
at the request of such Holder or immaterial revisions to the
information contained therein.
(v) If the selling Holders propose to make an underwritten
public offering of the Transfer Restricted Securities, make
available at reasonable times for inspection by one or more
representatives of the selling Holders, designated in
writing by a Majority of Holders whose Transfer Restricted
Securities are included in the Shelf Registration Statement,
any underwriter participating in any distribution pursuant
to the Shelf Registration Statement and any attorney or
accountant retained by such selling Holders or any of the
underwriter(s), all financial and other records, pertinent
corporate documents and properties of the Issuer as shall be
reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the
Issuer's officers, directors, managers and employees to
supply all information reasonably requested by any such
representative or representatives of the selling Holders,
underwriter, attorney or accountant in connection with the
Shelf Registration Statement after the filing thereof and
before its effectiveness; provided, however, that any
information designated by the Issuer as confidential at the
time of delivery of such information shall be kept
confidential by the recipient thereof.
(vi) If requested by any selling Holders, Merrill Lynch, as
representative of the Initial Purchasers, or the
underwriter(s), if any, promptly incorporate in the Shelf
Registration Statement or Prospectus, pursuant to a
supplement or post-effective amendment if necessary, such
information as such selling Holders, Merrill Lynch, as
representative of the Initial Purchasers, and such
underwriter(s), if any, may reasonably request to have
included therein, including, without
<PAGE>
limitation: (1)information relating to the "Plan of Distribution"
of the Transfer Restricted Securities, (2) information with respect
to the principal amount of Notes or number of shares of
Common Stock being sold to such underwriter(s), (3) the
purchase price being paid therefor and (4) any other terms
of the offering of the Transfer Restricted Securities to be
sold in such offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as
reasonably practicable after the Issuer is notified of the
matters to be incorporated in such Prospectus supplement or
post-effective amendment. Notwithstanding the foregoing,
following the effective date of the Shelf Registration
Statement, the Issuer shall not be required to file more
than one such supplement or post-effective amendment to
reflect changes in the amount of Notes held by any
particular Holder at the request of such Holder in any 30-
day period.
(vii) Furnish to each selling Holder, Merrill Lynch, as
representative of the Initial Purchasers, and each of the
underwriter(s), if any, without charge, at least one copy of
the Shelf Registration Statement, as first filed with the
Commission, and of each amendment thereto (and any documents
incorporated by reference therein or exhibits thereto (or
exhibits incorporated in such exhibits by reference) as such
Person may request).
(viii) Deliver to each selling Holder, Merrill Lynch, as
representative of the Initial Purchasers, and each of the
underwriter(s), if any, without charge, as many copies of
the Prospectus (including each preliminary prospectus) and
any amendment or supplement thereto as such Persons
reasonably may request; subject to any notice by the Issuer
in accordance with this Section 4(b) of the existence of any
fact or event of the kind described in Section 4(b)(iii)(D),
the Issuer hereby consents to the use of the Prospectus and
any amendment or supplement thereto by each of the selling
Holders and each of the underwriter(s), if any, in
connection with the offering and the sale of the Transfer
Restricted Securities covered by the Prospectus or any
amendment or supplement thereto.
(ix) If an underwriting agreement is entered into and the
registration is an Underwritten Registration, the Issuer
shall:
(A) upon request, furnish to each selling Holder and each
underwriter, if any, in such substance and scope as they may
reasonably request and as are customarily made by issuers to
underwriters in primary underwritten offerings, upon the
date of closing of any sale of Transfer Restricted
Securities in an Underwritten Registration:
(1) a certificate, dated the date of such closing, signed
by the Chief Financial Officer of the Issuer confirming, as
of the date
<PAGE>
thereof, the matters set forth in Section 5(c)
of the Purchase Agreement and such other matters as such
parties may reasonably request;
(2) opinions, each dated the date of such closing, of
counsel to the Issuer covering such of the matters set forth
in the exhibits to the Purchase Agreement referred to in
Section 5(a) thereof as are customarily covered in legal
opinions to underwriters in connection with primary
underwritten offerings of securities; and
(3) customary comfort letters, dated the date of such
closing, from the Issuer's independent certified public
accountants (and from any other accountants whose report is
contained or incorporated by reference in the Shelf
Registration Statement), in the customary form and covering
matters of the type customarily covered in comfort letters
to underwriters in connection with primary underwritten
offerings of securities;
(B) set forth in full in the underwriting agreement, if
any, indemnification provisions and procedures which provide
rights no less protective than those set forth in Section 6
hereof with respect to all parties to be indemnified; and
(C) deliver such other documents and certificates as may
be reasonably requested by such parties to evidence
compliance with clause (A) above and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the selling Holders pursuant to
this clause (ix).
(x) Before any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the
underwriter(s), if any, and their respective counsel in
connection with the registration and qualification of the
Transfer Restricted Securities under the securities or Blue
Sky laws of such jurisdictions as the selling Holders or
underwriter(s), if any, may reasonably request and do any
and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the Shelf Registration
Statement; provided, however, that the Issuer shall not be
required (A) to register or qualify as a foreign corporation
or a dealer of securities where it is not now so qualified
or to take any action that would subject it to the service
of process in any jurisdiction where it is not now so
subject or (B) to subject itself to taxation in any such
jurisdiction if they are not now so subject.
<PAGE>
(xi) Cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation
and delivery of certificates representing Transfer
Restricted Securities to be sold and, when issued to the
purchasers of Transfer Restricted Securities pursuant to the
Shelf Registration Statement, not bearing any restrictive
legends (unless required by applicable securities laws); and
enable such Transfer Restricted Securities to be in such
denominations and registered in such names as the selling
Holders or the underwriter(s), if any, may request at least
two Business Days before any sale of Transfer Restricted
Securities made by the selling Holders or such
underwriter(s).
(xii) Use its best efforts to cause the Transfer Restricted
Securities covered by the Shelf Registration Statement to be
registered with or approved by such other U.S. governmental
agencies or authorities as may be necessary to enable the
seller or sellers thereof or the underwriter(s), if any, to
consummate the disposition of such Transfer Restricted
Securities.
(xiii) Subject to Section 4(b)(i) hereof, if any fact or
event contemplated by Section 4(b)(iii)(D) hereof shall
exist or have occurred, use its reasonable best efforts to
prepare a supplement or post-effective amendment to the
Shelf Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or
omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading.
(xiv) Provide CUSIP numbers for all Transfer Restricted
Securities not later than the effective date of the Shelf
Registration Statement and provide the Trustee under the
Indenture with certificates for the Notes that are in a form
eligible for deposit with The Depository Trust Company.
(xv) Cooperate with respect to in any filings required to
be made with the NASD and in the performance of any due
diligence investigation by any underwriter that is required
to be retained in accordance with the rules and regulations
of the NASD.
(xvi) Otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission and all
reporting requirements under the rules and regulations of
the Exchange Act.
(xvii) Cause the Indenture to be qualified under the TIA
not later than the effective date of the Shelf Registration
Statement required by this Agreement, and, in connection
therewith, cooperate with the trustee and the holders of
Notes
<PAGE>
to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance
with the terms of the TIA; and execute and use its best
efforts to cause the trustee thereunder to execute all
documents that may be required to effect such changes and
all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a
timely manner.
(xviii) Cause all Transfer Restricted Securities covered by
the Shelf Registration Statement to be listed or quoted, as
the case may be, on each securities exchange or automated
quotation system on which similar securities issued by the
Issuer are then listed or quoted.
(xix) Make available to each Holder upon written request
each document filed with the Commission pursuant to the
requirements of Section 13 and Section 15 of the Exchange
Act after the effective date of the Shelf Registration
Statement.
(xx) If requested by the underwriters, make appropriate
officers of the Issuer available to the underwriters for
meetings with prospective purchasers of the Transfer
Restricted Securities and prepare and present to potential
investors customary "road show" material in a manner
consistent with new issuances of other securities similar to
the Transfer Restricted Securities.
(xxi) Use its best efforts to obtain a waiver from each
person who would otherwise have the right to have securities
of the Company (other than Transfer Restricted Securities)
registered on the Shelf Registration Statement required by
this Agreement. To the extent the Issuer does not receive
such waivers, it will use its best efforts to obtain the
consent of such persons from whom waivers are not obtained
to file a separate registration statement with respect to
all such other registrable securities, rather than include
them in the Shelf Registration Statement and, upon receipt
of such consent, to register such registrable securities in
accordance therewith.
(c) Each Holder agrees by acquisition of a Transfer
Restricted Security that, upon receipt of any notice from
the Issuer of the existence of any fact of the kind
described in Section 4(b)(iii)(D) hereof, such Holder will,
and will use its reasonable best efforts to cause any
underwriter(s) in an Underwritten Offering to, forthwith
discontinue disposition of Transfer Restricted Securities
pursuant to the Shelf Registration Statement until:
(i) such Holder has received copies of the supplemented or
amended Prospectus contemplated by Section 4(b)(xiii)
hereof; or
<PAGE>
(ii) such Holder is advised in writing (the "Advice") by
the Issuer that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental
filings that are incorporated by reference in the
Prospectus.
If so directed by the Issuer, each Holder will deliver to
the Issuer (at the Issuer's expense) all copies, other than
permanent file copies then in such Holder's possession, of
the Prospectus covering such Transfer Restricted Securities
that was current at the time of receipt of such notice of
suspension.
(d) Each Holder who intends to be named as a selling
Holder in the Shelf Registration Statement shall furnish to
the Issuer in writing, prior to or on the 20th Business Day
after receipt of a request therefor as set forth in a
questionnaire, such information regarding such Holder and
the proposed distribution by such Holder of its Transfer
Restricted Securities as the Issuer may reasonably request
for use in connection with the Shelf Registration Statement
or Prospectus or preliminary Prospectus included therein.
(The form of the questionnaire is attached hereto as
Exhibit A.) Holders that do not complete the questionnaire
and deliver it to the Issuer shall not be named as selling
securityholders in the Prospectus or preliminary Prospectus
included in the Shelf Registration Statement and therefore
shall not be permitted to sell any Transfer Restricted
Securities pursuant to the Shelf Registration Statement.
Each Holder who intends to be named as a selling Holder in
the Shelf Registration Statement shall promptly furnish to
the Issuer in writing such other information as the Issuer
may from time to time reasonably request in writing. Each
Holder as to which the Shelf Registration Statement is being
effected agrees to furnish promptly to the Issuer all
information required to be disclosed in order to make
information previously furnished to the Issuer by such
Holder not materially misleading.
(e) Upon the effectiveness of the Shelf Registration
Statement, each Holder shall notify the Issuer at least
three Business Days prior to any intended distribution of
Transfer Restricted Securities pursuant to the Shelf
Registration Statement (a "Sale Notice"). Each Holder of
this Security, by accepting the same, agrees to hold any
communication by the Issuer in response to a Sale Notice in
confidence.
5. Registration Expenses.
(a) All expenses incident to the Issuer's performance of
or compliance with this Agreement shall be borne by the
Issuer regardless of whether a Shelf Registration Statement
becomes effective, including, without limitation:
(i) all registration and filing fees and expenses
(including filings made by any Initial Purchasers, Holders
or underwriters with the NASD);
<PAGE>
(ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws;
(iii) all expenses of printing (including printing of
Prospectuses and certificates for the Common Stock to be
issued upon conversion of the Notes), messenger and delivery
services and telephone;
(iv) all fees and disbursements of counsel to the Issuer
and, subject to Section 5(b) below, the Holders of Transfer
Restricted Securities;
(v) all application and filing fees in connection with
listing (or authorizing for quotation) the Common Stock on a
national securities exchange or automated quotation system
pursuant to the requirements hereof; and
(vi) all fees and disbursements of independent certified
public accountants of the Issuer (including the expenses of
any special audit and comfort letters required by or
incident to such performance).
The Issuer shall bear its internal expenses (including,
without limitation, all salaries and expenses of their
officers and employees performing legal, accounting or other
duties), the expenses of any annual audit and the fees and
expenses of any Person, including special experts, retained
by the Issuer.
(b) In connection with the review of the Shelf
Registration Statement and other documents referred to in
this Agreement, the Issuer shall, against a reasonably
detailed invoice therefor, reimburse Merrill Lynch, on
behalf of the Initial Purchasers, and the Holders of
Transfer Restricted Securities being registered pursuant to
the Shelf Registration Statement, for the reasonable fees
and disbursements of not more than one counsel, which shall
be Debevoise & Plimpton, or such other counsel as may be
chosen by a Majority of Holders for whose benefit the Shelf
Registration Statement is being prepared.
6. Indemnification and Contribution.
(a) The Issuer agrees to indemnify and hold harmless each
Initial Purchaser, each Holder whose securities are included
in a Shelf Registration Statement, each Person who
participates as an underwriter (any such Person being an
"Underwriter") and each Person, if any, who controls any
Initial Purchaser, Holder or Underwriter within the meaning
of either Section 15 of the Securities Act or Section 20 of
the Exchange Act as follows:
<PAGE>
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in such Shelf Registration Statement (or any
amendment thereto), including all documents incorporated
therein by reference, or the omission or alleged omission
therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading,
or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or
any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency
or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; provided that
(subject to Section 6(d) below) any such settlement is
effected with the written consent of the Issuer; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by
any indemnified party), reasonably incurred in
investigating, preparing or defending against any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under
subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement shall not
apply to any loss, liability, claim, damage or expense to
the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to
the Issuer by the Initial Purchasers, such Holder or such
Underwriter expressly for use in a Shelf Registration
Statement (or any amendment thereto) or any Prospectus (or
any amendment or supplement thereto).
(b) Each Holder whose securities are included in a Shelf
Registration Statement, severally but not jointly, agrees to
indemnify and hold harmless the Issuer, the Initial
Purchasers, each Underwriter and the other selling Holders
and each Person, if any, who controls the Issuer, the
Initial Purchasers, any Underwriter or any other selling
Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, against any and all
loss, liability, claim, damage and expense described in the
indemnity contained in Section 6(a) hereof, as incurred, but
only with respect to
<PAGE>
untrue statements or omissions, or alleged untrue statements or
omissions, made in such Shelf Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information
with respect to such Holder furnished to the Issuer by such
Holder expressly for use in such Shelf Registration
Statement (or any amendment thereto) or such Prospectus (or
any amendment or supplement thereto); provided, however,
that no such Holder shall be liable for any claims hereunder
in excess of the amount of net proceeds received by such
Holder from the sale of Transfer Restricted Securities
pursuant to such Shelf Registration Statement.
(c) Each indemnified party shall give notice as promptly
as reasonably practicable to each indemnifying party of any
action or proceeding commenced against it in respect of
which indemnity may be sought hereunder, but failure so to
notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the
extent it is not materially prejudiced as a result thereof
and in any event shall not relieve it from any liability
which it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate
at its own expense in the defense of such action; provided,
however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the
indemnifying party or parties be liable for the fees and
expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified
parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent
to the entry of any judgment with respect to any litigation,
or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 (whether
or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any
indemnified party.
(d) If at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of
the nature contemplated by Section 6(a)(ii) effected without
its written consent if (i) such settlement is entered into
more than 45 days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into
and (iii) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior
<PAGE>
to the date of such settlement; provided that an
indemnifying party shall not be liable for any such
settlement if such indemnifying party (1) reimburses such
indemnified party in accordance with such request for the
amount of such fees and expenses of such counsel as the
indemnifying party believes in good faith to be reasonable
and (2) provides written notice to the indemnified party and
the indemnifying party disputes in good faith the reasonable
ness of the unpaid balance of such fees and expenses.
(e) If the indemnification provided for in this Section 6
is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses,
liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as
incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Issuer from
the offering and sale of the Transfer Restricted Securities
on the one hand and a Holder with respect to the sale by the
Holder of the Transfer Restricted Securities on the other
hand; or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the
indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand in connection
with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
The relative benefits received by the Issuer on the one
hand and a Holder on the other hand with respect to such
offering and such sale shall be deemed to be in the same
proportion as the total net proceeds from the offering of
the Notes purchased under the Purchase Agreement (before
deducting expenses) received by the Issuer, as set forth on
the table of the Offering Memorandum dated March 1, 2000
relating to the Notes on the one hand bear to the total net
proceeds received by such Holder with respect to its sale of
Transfer Restricted Securities on the other. The relative
fault of the indemnifying party or parties on the one hand
and the indemnified party or parties on the other hand shall
be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material
fact relates to information supplied by the indemnifying
party or parties on the one hand or the indemnified party or
parties on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6 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 Section 6. The
aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to
above in this Section 6 shall be
<PAGE>
deemed to include any legal or other expenses reasonably incurred
by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 6, no
Holder shall be required to contribute any amount in excess
of the amount by which the total price at which the Transfer
Restricted Securities purchased by it were resold exceeds
the amount of any damages which such Holder has otherwise
been required to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. The
Holders' obligations to contribute as provided in this
Section 6(e) are several and not joint.
No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
For purposes of this Section 6, each Person, if any,
who controls an Initial Purchaser, a Holder or an
Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Initial Purchaser,
such Holder or such Underwriter, and each director of the
Issuer, and each Person, if any, who controls the Issuer
within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to
contribution as the Issuer.
7. Rule 144A. In the event the Issuer is not subject to
Section 13 or 15(d) of the Exchange Act, the Issuer hereby
agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding, to make available
to any Holder or beneficial owner of Transfer Restricted
Securities in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities
from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act in
order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144A.
8. Participation in Underwritten Registrations. No Holder
may participate in any Underwritten Registration hereunder
unless such Holder:
(i) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to
approve such arrangements and
<PAGE>
(ii) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms
of such underwriting arrangements.
9. Selection of Underwriters. The Holders of Transfer
Restricted Securities covered by the Shelf Registration
Statement who desire to do so may sell such Transfer
Restricted Securities in an Underwritten Offering. In any
such Underwritten Offering, the investment banker or
investment bankers and manager or managers that will
administer the offering will be selected by a Majority of
Holders whose Transfer Restricted Securities are included in
such offering; provided, that such investment bankers and
managers must be reasonably satisfactory to the Issuer.
10. Miscellaneous.
(a) Remedies. The Issuer acknowledges and agrees that any
failure by the Issuer to comply with its obligations under
Section 2 hereof may result in material irreparable injury
to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the
event of any such failure, the Initial Purchasers or any
Holder may obtain such relief as may be required to
specifically enforce the Issuer's obligations under Section
2 hereof. The Issuer further agrees to waive the defense in
any action for specific performance that a remedy at law
would be adequate.
(b) Adjustments Affecting Transfer Restricted Securities.
The Issuer shall not, directly or indirectly, take any
action with respect to the Transfer Restricted Securities as
a class that would adversely affect the ability of the
Holders to include such Transfer Restricted Securities in a
registration undertaken pursuant to this Agreement.
(c) No Inconsistent Agreements. The Issuer will not, on
or after the date of this Agreement, enter into any
agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof.
In addition, the Issuer shall not, on or after the date
hereof, grant to any of its security holders (other than the
holders of Transfer Restricted Securities in such capacity)
the right to include any of its securities in the Shelf
Registration Statement provided for in this Agreement other
than the Transfer Restricted Securities. Except as
disclosed in the Offering Memorandum dated March 1, 2000
relating to the Notes, the Issuer has not previously entered
into any agreement (which has not expired or been
terminated) granting any registration rights with respect to
its securities to any Person which rights conflict with the
provisions hereof.
(d) Amendments and Waivers. This Agreement may not be
amended, modified or supplemented, and waivers or consents
to or departures from the provisions hereof
<PAGE>
may not be given, unless the Issuer has obtained the written consent
of a Majority of Holders.
(e) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing
by hand-delivery, first-class mail (registered or certified,
return receipt requested), telex, telecopier, or air courier
guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the registrar under the Indenture or the transfer
agent of the Common Stock, as the case may be; and
(ii) if to the Issuer:
CV Therapeutics, Inc.
3172 Porter Drive
Palo Alto, California 94304
Attention: Daniel K. Spiegelman
With a copy to:
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306-2155
Attention: Alan Mendelson
All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if
telecopied; and on the next Business Day, if timely
delivered to an air courier guaranteeing overnight delivery.
(f) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and
assigns of each of the parties, including without limitation
and without the need for an express assignment, subsequent
Holders of Transfer Restricted Securities; provided,
however, that (i) this Agreement shall not inure to the
benefit of or be binding upon a successor or assign of a
Holder unless and to the extent such successor or assign
acquired Transfer Restricted Securities from such Holder and
(ii) nothing contained herein shall be deemed to permit any
assignment, transfer or other disposition of Transfer
Restricted Securities in violation of the terms of the
Purchase Agreement or the Indenture. If any transferee of
any Holder shall acquire Transfer
<PAGE>
Restricted Securities, in any manner, whether by operation of law
or otherwise, such Transfer Restricted Securities shall be held subject
to all of the terms of this Agreement, and by taking and holding
such Transfer Restricted Securities such person shall be
conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement.
(g) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall
constitute one and the same agreement.
(h) Securities Held by the Issuer or Their Affiliates.
Whenever the consent or approval of Holders of a specified
percentage of Transfer Restricted Securities is required
hereunder, Transfer Restricted Securities held by the Issuer
or its "affiliates" (as such term is defined in Rule 405
under the Securities Act) shall not be counted in
determining whether such consent or approval was given by
the Holders of such required percentage.
(i) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
(j) Governing Law. This Agreement shall be governed by,
and construed in accordance with, the law of the State of
New York, without regard to conflict of laws principles
thereof.
(k) Severability. If any one or more of the provisions
contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(l) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect
of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein with respect to
the registration rights granted by the Issuer with respect
to the Transfer Restricted Securities. This Agreement
supersedes all prior agreements and understandings between
the parties with respect to such subject matter.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
CV THERAPEUTICS, INC.
By_________________________________
Name:
Title:
MERRILL LYNCH, PIERCE, FENNER &
SMITH
INCORPORATED
J.P. MORGAN SECURITIES INC.
FLEETBOSTON ROBERTSON STEPHENS INC.
SG COWEN SECURITIES CORPORATION
By: Merrill Lynch, Pierce, Fenner &
Smith
Incorporated
By________________________________
Authorized Signatory
<PAGE>
Exhibit A
CV THERAPEUTICS, INC.
FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE
The undersigned beneficial holder of 4 3/4% Convertible
Subordinated Notes due 2007 (the "Notes") of CV Therapeutics,
Inc. (the "Issuer"), or common stock, par value $.001 per share
(the "Shares" and together with the Notes, the "Transfer
Restricted Securities") of the Issuer understands that the Issuer
has filed, or intends to file, with the Securities and Exchange
Commission (the "Commission") a registration statement (the
"Shelf Registration Statement"), for the registration and resale
under Rule 415 of the Securities Act of 1933, as amended (the
"Securities Act"), of the Transfer Restricted Securities in
accordance with the terms of the Registration Rights Agreement,
dated March 7, 2000 (the "Registration Rights Agreement") between
the Issuer and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, J.P. Morgan Securities Inc., FleetBoston
Robertson Stephens Inc. and SG Cowen Securities Corporation. A
copy of the Registration Rights Agreement is available from the
Issuer upon request at the address set forth below. All
capitalized terms not otherwise defined herein have the meaning
ascribed thereto in the Registration Rights Agreement.
Each beneficial owner of Transfer Restricted Securities is
entitled to the benefits of the Registration Rights Agreement.
In order to sell or otherwise dispose of any Transfer Restricted
Securities pursuant to the Shelf Registration Statement, a
beneficial owner of Transfer Restricted Securities generally will
be required to be named as a selling securityholder in the
related Prospectus, deliver a Prospectus to purchasers of
Transfer Restricted Securities and be bound by those provisions
of the Registration Rights Agreement applicable to such
beneficial owner (including certain indemnification provisions).
Beneficial owners that do not complete this Notice and
Questionnaire within 20 Business Days of receipt hereof and
deliver it to the Issuer as provided below will not be named as
selling securityholders in the prospectus and therefore will not
be permitted to sell any Transfer Restricted Securities pursuant
to the Shelf Registration Statement.
Certain legal consequences arise from being named as a
selling securityholder in the Shelf Registration Statement and
the related Prospectus. Accordingly, holders and beneficial
owners of Transfer Restricted Securities are advised to consult
their own securities law counsel regarding the consequences of
being named or not being named as a selling securityholder in the
Shelf Registration Statement and the related Prospectus.
<PAGE>
REGISTRATION STATEMENT QUESTIONNAIRE
The undersigned beneficial owner (the "Selling
Securityholder") of Transfer Restricted Securities hereby elects
to include in the Shelf Registration Statement for the
registration and resale of the Transfer Restricted Securities the
Transfer Restricted Securities beneficially owned by it and
listed below in Item (3) (unless otherwise specified under Item
3). The undersigned agrees to be bound with respect to such
Transfer Restricted Securities by the terms and conditions of
this Questionnaire.
Upon any sale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement under the Securities Act, the
Selling Securityholder will be required to deliver to the Issuer
the notice of transfer set forth in Appendix I attached hereto
(completed and signed) and hereby undertakes to do so.
The Selling Securityholder hereby provides the following
information to the Issuer and represents and warrants that such
information is accurate and complete:
(1) (a) Full Legal Name of Selling Securityholder:
(b) Full Legal Name of Registered Holder (if not the
same as in (a) above) through which Transfer
Restricted Shares listed in (3) below are held:
(c) Full legal Name of DTC participant (if applicable
and if not the same as in (b) above) through which
Transfer Restricted Shares are held:
(2) Address and Telephone Numbers for Selling
Securityholder:
Telephone:
Fax:
Contact Person:
<PAGE>
(3) Beneficial Ownership of type and amount of
Transfer Restricted Securities:
Fill in the type and amount of Transfer Restricted
Securities owned of record and beneficially (see
definition) by the Selling Securityholder:
Type of Security Of Record Beneficially
(4) Other securities of the Issuer owned by the Selling
Securityholder:
Except as set forth below and under Item (3) above, the
undersigned Selling Securityholder is not the
beneficial or registered owner of any shares of Common
Stock or any other securities of the Issuer.
State any exceptions here:
(5) Relationships with the Issuer:
Except as set forth below, neither the Selling
Securityholder nor any of its affiliates, officers (see
definition), directors or principal shareholders (5% or
more) has held any position or office or has had any
other material (see definition) relationship with the
Issuer (or its predecessors or affiliate) during the
past three years.
State any exceptions here:
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling
Securityholder intends to distribute the Transfer
Restricted Securities above in Item (3) pursuant to the
Shelf Registration Statement only as follows: All or a
portion of such Transfer Restricted Securities may be
sold from time to time directly by the undersigned
Selling Securityholder or, alternatively, through
underwriters, broker-dealers or agents. If the Transfer
Restricted Securities are sold through underwriters or
broker-dealers, the Selling Securityholder will be
responsible for discounts and commissions. Such
Transfer Restricted Securities may be sold in one or
more transactions at fixed prices, at prevailing market
prices at the time of sale, at varying prices
determined at the time of sale, or at negotiated
prices. Such sales may be effected in transactions
(which may involve crosses or block transactions)
(i) on any national securities exchange or quotation
service on which the Transfer Restricted Securities may
be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions
otherwise than on such exchanges or services or in the
over-the-counter market, or (iv) through the writing of
options.
<PAGE>
The Selling Securityholder may also enter into
hedging transactions with broker-dealers, which may in
turn engage in short sales of the Transfer Restricted
Securities and deliver Transfer Restricted Securities
to close out such short positions, or loan or pledge
Transfer Restricted Securities to broker-dealers that
in turn may sell such securities.
State any exceptions here:
(7) NASD Matters:
1. Do you know of any information pertaining to underwriting
compensation and arrangements (see definition) or any dealings
between any Underwriter or Related Person (see definition), NASD
Member (see definition) or Person Associated with a Member of the
NASD (see definition) on the one hand, and the Issuer or any
parent, subsidiary or Controlling (see definition) shareholder
thereof on the other hand?
Answer: [ ] Yes [ ] No If "yes," please
describe
<PAGE>
2. (a) Are you (i) an NASD Member (see definition), (ii) a
Controlling (see definition) shareholder of an NASD Member,
(iii) a Person Associated with a Member of the NASD (see
definition), or (iv) an Underwriter or a Related Person (see
definition) with respect to the proposed offering; or (b) do you
own any shares or other securities of any NASD Member not
purchased in the open market; or (c) have you made any
outstanding subordinated loans to any NASD Member?
Answer: [ ] Yes [ ] No If "yes," please
describe
__________________________________________________________
3. Have you been an underwriter, or a Controlling (see
definition) person or member of any investment banking or
brokerage firm which has been or might be an underwriter, for
securities of the Issuer?
Answer: [ ] Yes [ ] No If "yes," please
describe
__________________________________________________________
4. If the answer to either Question 2 or 3 above is "yes," set
forth below information as to all purchases and acquisitions
(including contracts for purchase or acquisition) of securities
of the Issuer by you during the last 18 months, as well as to all
proposed purchases and acquisitions which are to be consummated
in whole or in part within the next 12 months.
Seller or Amount and Description
Prospective Nature of Price or Other of
Seller Securities Consideration Date Relationship
<PAGE>
5.
Set forth below information as to all sales and dispositions
(including contracts to sell or to dispose) of securities
of the Issuer during the last 18 months by you to any
NASD Member (see definition) or any Person Associated
with a Member of the NASD (see definition) or any
Underwriter or Related Person (see definition) as well as
to all proposed sales and dispositions by you to such
persons which are to be consummated by you in whole or in
part within the next 12 months. Also set forth below a
description of the relationship, affiliation or
association of you and, if known, the other party or
parties to the above transactions with an underwriter or
other person or entity "in the stream of distribution"
with respect to the offering.
Buyer or Amount and Description
Prospective Nature of Price or Other of
Buyer Securities Consideration Date Relationship
6. If you have had during the last 18 months, or are to have
within the next 12 months, any transactions of the character
referred to in Question 4 or 5 of this Section, describe briefly
below the relationship, affiliation or association of both you
and, if known, the other party or parties to any such transaction
with an underwriter or other person or entity "in the stream of
distribution" with respect to the proposed transaction. In any
case, where the purchaser (whether you or any such party) is
known by you to be a member of a "private investment group," such
as a hedge fund or other group of purchasers, furnish, if known,
the names of all persons comprising the Group (see definition)
and their association with or relationship to any broker-dealer.
Description:
<PAGE>
The Selling Securityholder acknowledges that it understands
it obligation to comply with the provisions of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules thereunder, relating to stock manipulation, particularly
Regulation M thereunder (or any successor rules), in connection
with the offering of its Transfer Restricted Securities covered
by the Shelf Registration Statement. The Selling Securityholder
agrees that neither it nor any person acting on its behalf, will
sell or purchase any securities of the Issuer in violation of
such provisions, so long as the Transfer Restricted Securities
beneficially owned by it are being offered pursuant to the
Registration Statement.
In the event that the Selling Security holder transfers all
or any portion of the Transfer Restricted Securities listed in
Item (3) above after the date on which such information is
provided to the Issuer, the Selling Securityholder agrees to
notify the transferee(s) at the time of the transfer of the
transferee(s) rights and obligations under the Registration
Rights Agreement and this questionnaire.
By signing below, the Selling Securityholder consents to the
disclosure of the information contained herein in its answers to
Items (1) through (7) above and the inclusion of such information
in the Shelf Registration Statement and related Prospectus. The
Selling Securityholder understands that such information will be
relied upon by the Issuer in connection with the preparation of
the Shelf Registration Statement and related Prospectus and any
amendments or supplements thereto.
The undersigned Selling Securityholder agrees to promptly
notify the Issuer of any inaccuracies or changes in the
information provided herein which may occur subsequent to the
date hereof at any time while the Shelf Registration Statement is
in effect. All notices hereunder shall be made in writing and
shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by facsimile or (iii) one
business day after being deposited with a reputable next-day
courier, postage prepaid, as follows:
(i) To the Issuer
CV THERAPEUTICS
2172 Porter Drive
Palo Alto, CA 94304
Attn: Daniel K. Spiegelman
Fax: (650) 858-0388
(ii) With a copy to:
COOLEY GODWARD LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Attention: Andrea Vachss, Esq.
Fax: (650) 849-7400
<PAGE>
Once this questionnaire is executed by the Selling Security
holder and received by the Issuer, this questionnaire, and the
representations and warranties contained herein, shall be binding
on, shall inure to the benefit of and shall be enforceable by the
respective successors, heirs, personal representatives, and
assigns of the Issuer and the Selling Securityholder (with
respect to the Transfer Restricted Securities beneficially owned
by such Selling Securityholder and listed in Item (3) above).
<PAGE>
In Witness Whereof, the undersigned, by authority duly
given, has caused this Questionnaire to be executed and delivered
either in person or by its duly authorized agent.
Dated:
Selling Securityholder
(Print/type full legal name of
registered
owner of Transfer Restricted
Securities)
By:
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED QUESTIONNAIRE TO THE
COMPANY'S COUNSEL AT:
COOLEY GODWARD LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Attention: Andrea Vachss, Esq.
Fax: (650) 849-7400
<PAGE>
Exhibit A
DEFINITIONS
For purposes of the representations made in this
Questionnaire, the following definitions shall be applicable:
Arrangement. The term "arrangement" means any plan, contract,
agreement, authorization or arrangement, whether or not set forth
in writing.
Beneficial Ownership. The term "beneficially owned" as
applied to an interest in securities means (a) any direct or
indirect interest in the securities which entitles you to any of
the rights or benefits of ownership, even though you are not the
holder or owner of record or (b) securities owned by you or to
which you have a right to acquire, directly or indirectly,
including those held for your own benefit (regardless of how
registered) or securities held by others for your own benefit
(regardless of how registered), such as custodians, brokers,
nominees, pledgees, etc. and including securities held by an
estate or trust in which you have an interest as legatee or
beneficiary, securities owned by a partnership of which you are a
partner, securities held by a personal holding company of which
you are a shareholder, etc., and securities held in the name of
your spouse, minor children and any relative (sharing the same
home). "Beneficial ownership" includes having or sharing,
directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise:
(1) voting power which includes the power to vote, or to
direct the voting of, such security; and/or
(2) investment power which includes the power to dispose, or
to direct the disposition, of such security. Any person who,
directly or indirectly, creates or uses a trust, proxy, power of
attorney, pooling arrangement or any other contract, arrangement
or device with the purpose or effect of divesting such person of
beneficial ownership of a security or preventing the vesting of
such beneficial ownership as part of a plan or scheme to evade
the reporting requirements of Section 13(d) of the Exchange Act,
is deemed for purposes of such section to be the beneficial owner
of such security.
The Securities and Exchange Commission (the "SEC") has
expressed the view that a person may be regarded as the
beneficial owner of securities which are held in the name of such
person's spouse, minor children or other relatives (including
relatives of the person's spouse) who share the person's home if
the relationship which exists results in such person obtaining
benefits substantially equivalent of ownership of the securities.
The SEC has expressed the view that a person may be deemed to
be the beneficial owner of a security if that person has the
right to acquire beneficial ownership of such security within 60
days, including, but not limited to, any right to acquire:
(1) through the exercise of any option, warrant or right;
(2) through the conversion of a security; (3) pursuant to the
right to revoke a trust, discretionary account or similar
arrangements; or (4) pursuant to the automatic termination of a
trust, discretionary account or similar arrangement.
<PAGE>
If you have any reason to believe that any interest in
securities of the Issuer, however remote, which you or the above-
described relatives may have is a beneficial interest, please
describe such interest.
Control. The term "control" (including the terms
"controlling," "controlled by" and "under common control with")
means the possession, direct or indirect, of the power, either
individually or with others, to direct or cause the direction of
the management and policies of a person, whether through the
ownership of voting securities, by contract, or otherwise.
(Rule 405 under the Securities Act of 1933, as amended)
Group. The term "group" includes a partnership, syndicate or
other group, whether formally organized or not, which has as a
purpose the acquiring, holding or disposing of securities of the
Issuer.
Material. The term "material," when used in this Information
Statement to qualify a requirement for the furnishing of
information as to any subject, limits the information required to
those matters as to which there is a substantial likelihood that
a reasonable investor would attach importance in determining
whether to purchase securities of the Issuer. The materiality of
any relationship is to be determined on the basis of the
significance of the information to investors in light of all of
the circumstances of the particular case. The importance of the
relationship, the relationship of the parties to the transaction
with each other and the amount involved in the transaction are
among the factors to be considered in determining the
significance of the information to investors. If you have any
question as to whether or not a matter is "material," please
describe the matter, and, if such is the case, state your belief
that the matter is not "material."
NASD Member. The term "NASD member" means either any broker
or dealer admitted to membership in the National Association of
Securities Dealers, Inc. ("NASD"). (NASD Manual, By-laws
Article I, Definitions)
Officers. The term "officers" means that of the president,
secretary, treasurer, any vice president in charge of a principal
business function (such as sales, administration or finance) and
any other person who performs similar policy-making functions for
the Issuer.
Person Associated with a member of the NASD. The term "person
associated with a member of the NASD" means every sole
proprietor, partner, officer, director, branch manager or
executive representative of any NASD Member, or any natural
person occupying a similar status or performing similar
functions, or any natural person engaged in the investment
banking or securities business who is directly or indirectly
controlling or controlled by a NASD Member, whether or not such
person is registered or exempt from registration with the NASD
pursuant to its bylaws. (NASD Manual, By-laws Article I,
Definitions)
Underwriter or a Related Person. The term "underwriter or a
related person" means, with respect to a proposed offering,
underwriters, underwriters' counsel, financial consultants and
advisors, finders, members of the selling or distribution group,
and any and all other persons associated with or related to any
of such persons. (NASD Interpretation)
<PAGE>
Appendix I
BROKER'S NOTICE OF TRANSFER OF SECURITIES PURSUANT TO
REGISTRATION STATEMENT
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Attention: Andrea Vachss, Esq.
Fax: (650) 849-7400
Re: CV Therapeutics, Inc. (the "Company")
Ladies and Gentlemen:
Please be advised that has transferred, on
(date), pursuant to the Registration Statement on Form S-3
(SEC File No. ) filed by the Company (complete all
blanks that apply):
$________ principal amount of 4 3/4% Convertible
Subordinated Notes Due 2007.
_________ shares of Common Stock.
We hereby certify that the prospectus delivery requirements,
if any, of the Securities Act of 1933, as amended, have been
satisfied with respect to the transfer described above and
that the above-named beneficial owner of the Shares is named
as a selling Security holder in the Prospectus dated
____________________ or in amendments or supplements
thereto, and that the securities transferred are [a portion
of] the securities listed in such owner's name.
Dated: _______________________
Very truly yours,
Name:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains financial information extracted from the Consolidated
Balance Sheet as of March 31, 2000 and the Consolidated Statement of
Operations for the three month period ended March 31, 2000 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 216,423
<SECURITIES> 56,488
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 275,385
<PP&E> 8,626
<DEPRECIATION> (6,087)
<TOTAL-ASSETS> 284,744
<CURRENT-LIABILITIES> 6,040
<BONDS> 196,250
0
0
<COMMON> 176,657
<OTHER-SE> (100,646)
<TOTAL-LIABILITY-AND-EQUITY> 284,744
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 8,226
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 894
<INCOME-PRETAX> (7,083)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,083)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,083)
<EPS-BASIC> (0.39)
<EPS-DILUTED> (0.39)
</TABLE>
