Exhibit 10.1
PLEDGE AND ESCROW
AGREEMENT
by and among
CV THERAPEUTICS,
INC.,
WELLS FARGO BANK, NATIONAL
ASSOCIATION,
as Trustee,
and
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Escrow Agent
Dated as of July 1,
2005
PLEDGE AND ESCROW
AGREEMENT
THIS PLEDGE AND ESCROW AGREEMENT
(this “ Agreement ”), dated as of July 1, 2005,
is by and among CV Therapeutics, Inc. (the “ Company
”), Wells Fargo Bank, National Association, as trustee under
the Indenture referred to below (the “ Trustee
”), and Wells Fargo Bank, National Association, in its
capacity as escrow agent (the “ Escrow Agent
”).
RECITALS
The Company and the Trustee have
entered into an Indenture, dated as of July 1, 2005 (the “
Indenture ”), pursuant to which the Company will issue
up to $149,500,000 in aggregate principal amount of its 3¼%
Senior Subordinated Convertible Notes due 2013 (the “
Notes ”).
The Company desires to establish an
escrow account with the Escrow Agent into which an amount equal to
$15,183,594 will be, simultaneously with the original issuance of
the Notes, deposited by the Company to be held and distributed in
accordance with the terms and conditions set forth herein, and the
Escrow Agent is willing to establish such an account and to accept
such funds in accordance with the terms hereinafter set
forth.
Capitalized terms used but not
defined herein shall have the meanings assigned to such terms in
the Indenture.
AGREEMENT
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:
Section 1. Establishment of
Escrow Account . The
Escrow Agent shall establish on the date hereof and maintain in the
Trustee’s name a “securities account” (within the
meaning of Article 8 of the Uniform Commercial Code of the State of
New York as in effect from time to time (the “ New York
UCC ”)) (the “ Escrow Account ”) to
which there shall be immediately credited and held amounts received
by the Escrow Agent from the Company in accordance with Section 3
hereof. The funds credited to the Escrow Account shall be applied
and disbursed only as provided herein. The Escrow Agent shall
segregate the funds credited to the Escrow Account from its other
funds held as an agent or in trust. The Escrow Agent shall treat
all property held by it in the Escrow Account as “financial
assets” (as defined in Section 8-102(a)(9) of the New York
UCC) in accordance with Section 8-501 (or successor section) of the
New York UCC.
Section 2. Deposit to the Escrow
Account; Investments.
(a) Concurrently with the execution
and delivery of this Agreement, the Company shall deliver to the
Escrow Agent for deposit in the Escrow Account an amount equal to
$15,183,594 (the “ Escrow Funds ”). All amounts
to be deposited with the Escrow Agent shall be transferred by wire
transfer of immediately available funds to the following
account:
WELLS FARGO BANK, N.A.
ABA No.: 121000248
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Account No.: 0001038377
Account Name: Corporate Trust
Clearing Account
FFC: CV Therapeutics Pledge Account,
#18068201
Attention: Joe Taffe
(b) Promptly following the deposit
of any funds into the Escrow Account, the Escrow Agent shall invest
such funds in the name of the Trustee in Government Securities as
instructed by the Company. For purposes of this Agreement, “
Government Securities ” shall mean (i) noncallable
direct obligations of, or noncallable obligations the payment of
principal of and interest on which are unconditionally guaranteed
by, the United States of America; (ii) noncallable bonds,
debentures or notes issued by Federal National Mortgage
Association, Government National Mortgage Association, Federal Farm
Credit Banks, Federal Land Banks, Federal Home Loan Banks, Farmers
Home Administration, Federal Home Loan Mortgage Corporation or any
of their successors or any other comparable federal agency
hereafter created to the extent that said obligations are
unconditionally guaranteed by the United States of America; and
(iii) holdings in any mutual fund or similar investment vehicle
that holds only securities of the type set forth in (i) or (ii)
above. Promptly following the deposit of any funds into the Escrow
Account, the Company shall provide written instructions to the
Escrow Agent as to the specific Government Securities in which
funds are to be invested and until such instructions are given by
the Company, the Escrow Agent shall not invest such funds. All such
amounts shall remain so invested until the close of business on the
Business Day prior to any withdrawal by the Escrow Agent pursuant
to Section 4 hereof. All Government Securities from time to time
credited to the Escrow Account constituting “security
entitlements” as defined in Section 8-102(a)(17) of the New
York UCC shall be held in the name of the Trustee and in no event
shall the Company be or be deemed to be the “entitlement
holder” (as such term is defined in as defined in Section
8-102(a)(7) of the New York UCC) with respect thereto.
Section 3. Security
Interest.
(a) Pledge and Assignment .
The Company hereby irrevocably pledges, assigns, grants,
hypothecates and sets over to the Trustee, for the equal and
ratable benefit of the Holders of the Notes, a first priority
continuing security interest in all of the Company’s right,
title and interest in and to all of the following whether now owned
or existing or hereafter acquired or created (collectively, the
“ Collateral ”):
(i) all funds from time to time held
in the Escrow Account, including, without limitation, the Escrow
Funds and all certificates and instruments, if any, from time to
time, representing or evidencing the Escrow Account or the Escrow
Funds;
(ii) all investments of funds in the
Escrow Account, which all shall constitute Government Securities,
and whether held by or registered in the name of the Escrow Agent
and all certificates and instruments, if any, from time to time
representing or evidencing any such Government
Securities;
(iii) all promissory notes,
certificates of deposit, deposit accounts, checks and other
instruments evidencing such Government Securities from time to time
hereafter delivered to or otherwise possessed by the Escrow Agent,
for or on behalf of the Company, in substitution for or in addition
to any or all of the then existing Collateral;
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(iv) all interest, dividends, cash,
instruments, securities and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of the then existing Collateral;
and
(v) all proceeds of the foregoing
including, without limitation, all cash proceeds and all non-cash
proceeds thereof.
The Trustee hereby appoints the
Escrow Agent to act as the Trustee’s agent, on behalf of the
Holders of the Notes, for purposes of perfecting the foregoing
pledge, assignment and security interest in the Collateral, and the
Escrow Agent hereby accepts such appointment. For so long as the
foregoing pledge, assignment and security interest remains in
effect, the Escrow Agent hereby waives any right of setoff or
banker’s lien that it, in its individual capacity or in its
capacity as an agent for Persons other than the Trustee and the
Holders of the Notes, may have with respect to any or all of the
Collateral.
(b) Secured Obligations .
This Agreement secures the due and punctual payment and performance
of all obligations of the Company, whether now or hereafter
existing, under the Notes, the Indenture and this Agreement,
including, without limitation, interest and premium, if any,
accrued on the Notes after the commencement of a bankruptcy,
reorganization or similar proceeding involving the Company to the
extent permitted by applicable law (collectively, the “
Secured Obligations ”).
(c) Delivery of Collateral .
All certificates or instruments, if any, representing or evidencing
all or any portion of the Collateral shall be held by the Escrow
Agent on behalf of the Trustee pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by
duly executed instruments of transfer or assignments in blank, all
in form and substance reasonably satisfactory to the Trustee, and
all in form and substance sufficient to convey a valid security
interest in such Collateral to the Trustee. All securities in
uncertificated or book-entry form and all security entitlements, if
any, in each case representing or evidencing the Collateral shall
be registered in the name of the Trustee (or any of its nominees)
as the registered owner thereof, by book-entry or as otherwise
appropriate so as to properly identify the interest of the Trustee
therein. In addition, the Trustee shall have the right, at any time
following the occurrence of an Event of Default, to transfer to or
to register in the name of the Trustee or any of its nominees any
or all other Collateral. Except as otherwise provided herein, all
Collateral shall be deposited and held in the Escrow Account. The
Escrow Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing all or any
portion of the Collateral for certificates or instruments of
smaller or larger denominations in the same aggregate
amount.
(d) Maintaining the Escrow
Account . So long as this Agreement is in full force and
effect:
(i) subject to the other terms and
conditions of this Agreement, all Collateral held by the Escrow
Agent pursuant to this Agreement shall be held in the Escrow
Account, which shall be subject to the exclusive dominion and
control of the Trustee for the benefit of the Trustee and the equal
and ratable benefit of the Holders of the Notes;
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(ii) the Escrow Account and all
Collateral from time to time therein shall remain segregated from
all other funds or other property otherwise held by the Trustee or
the Escrow Agent, as applicable;
(iii) all amounts (including,
without limitation, any Escrow Funds or interest on or other
proceeds of the Escrow Funds or any Government Securities held in
the Escrow Account) shall remain on deposit in the Escrow Account
until withdrawn in accordance with this Agreement; and
(iv) the Escrow Agent shall take all
steps necessary to ensure that the Trustee is the holder or
entitlement holder (as the case may be) of all of the Collateral
and that either the Trustee for the equal and ratable benefit of
the Holders of the Notes or, to the extent required by applicable
law, the Escrow Agent, for the benefit of the Trustee and the equal
and ratable benefit of the Holders of the Notes, is the holder or
entitlement holder of all Government Securities and other
uncertificated securities on the books of the applicable Federal
Reserve Bank or other applicable securities
intermediary.
(e) Further Assurances .
Prior to, contemporaneously herewith, and at any time and from time
to time hereafter, the Company shall, at the Company’s
expense, execute and deliver to the Trustee or its designee such
other instruments and documents, and take all further action as the
Trustee deems reasonably necessary or advisable or may reasonably
request to confirm or perfect the security interest of the Trustee
granted or purported to be granted hereby or to enable the Trustee
to exercise and enforce its rights and remedies hereunder with
respect to any Collateral, and the Company shall take all necessary
action to preserve and protect the security interest created hereby
as a first priority, perfected lien and encumbrance upon the
Collateral.
(f) Transfers and Other Liens
. The Company agrees that it shall not (i) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant
any option with respect to, any of the Collateral or (ii) create or
permit to exist any Lien upon or with respect to any of the
Collateral, except for the security interest under Section 3 of
this Agreement.
Section 4. Distributions from
Escrow Account .
Funds (or Government Securities that are scheduled to mature or
that can be liquidated on or before the date of the applicable
Scheduled Interest Payment) on deposit in the Escrow Account shall
be withdrawn by the Escrow Agent and transferred only in accordance
with this Section 4:
(a) Event of Default.
(i) For so long as an Event of
Default has occurred and is continuing under the Indenture, no
amounts shall be disbursed from the Escrow Account, except as
provided in clause (ii) below.
(ii) If (A) any Event of Default has
occurred and is continuing under Section 4.1 of the Indenture, (B)
any other Event of Default has occurred and is continuing
that
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results in the acceleration of the payment of
principal, interest, premium, if any, pursuant to the terms of the
Indenture, or (C) any material breach or violation of any
representation, warranty or agreement contained in this Agreement
has occurred:
(I) The Trustee may, without notice
to the Company except as required by applicable law and at any time
or from time to time, direct the Escrow Agent to liquidate all
Collateral and transfer all proceeds thereof to the Paying Agent to
apply such funds in accordance with Section 4.2 of the
Indenture.
(II) The Trustee (and/or the Escrow
Agent at its direction and on its behalf) may also, in addition to
the other rights and remedies provided for herein, exercise in
respect of the Collateral all the rights and remedies of a secured
party upon default under the New York UCC, and may also, without
notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sales, at any
of the Trustee’s or the Escrow Agent’s offices or
elsewhere, for cash, on credit or for future delivery, and upon
such other terms as the Trustee may deem commercially reasonable.
The Company agrees that, to the extent notice of sale shall be
required by law, at least twenty (20) days’ notice to the
Company of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Trustee and the Escrow Agent shall not be
obligated to make any sale of Collateral regardless of notice of
sale having been given. The Trustee and/or the Escrow Agent on its
behalf may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which
it was so adjourned.
(III) Any cash held by the Escrow
Agent as Collateral and all net cash proceeds received by the
Trustee or the Escrow Agent in respect of any sale or liquidation
of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of the Trustee, be held by
the Trustee or the Escrow Agent as collateral for, and then or at
any time thereafter be applied (after payment of any costs and
expenses incurred in connection with any sale, liquidation or
disposition of or realization upon the Collateral and the payment
of any amounts payable to the Trustee or the Escrow Agent) in whole
or in part by the Trustee for the equal and ratable benefit of the
Holders of the Notes against all or any part of the Secured
Obligations in such order as described in Section 4.13 of the
Indenture.
(b) Scheduled Interest
Payments . Pursuant to the Notes and Section 2.1 of the
Indenture, the Company is obligated to make payments of interest on
the Notes on each of February 16, 2006, August 16, 2006, February
16, 2007, August 16, 2007, February 16, 2008 and August 16, 2008
(each, a “ Scheduled Interest Payment ”). The
Scheduled Interest Payments due on the Notes may be made, at the
election of the Company, from (1) amounts held in the Escrow
Account in accordance wi
