DRAFT OF OCTOBER 29, 1996
FORM OF UNDERWRITING AGREEMENT
CV THERAPEUTICS, INC.
2,875,000 Shares of Common Stock
Underwriting Agreement
, 1996
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▇.▇. ▇▇▇▇▇▇ Securities Inc.
Invemed Associates, Inc.
UBS Securities Inc.
As Representatives of several underwriters
listed in Schedule I hereto
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
CV Therapeutics, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to the several Underwriters listed in Schedule I hereto (the
"Underwriters"), for whom you are acting as representatives(the
"Representatives") an aggregate of 2,500,000 shares of Common Stock, par value
$.001 per share, of the Company (the "Underwritten Shares") and, for the sole
purpose of covering over-allotments in connection with the sale of the
Underwritten Shares, at the option of the Underwriters, up to an additional
375,000 shares of Common Stock, of the Company (the "Option Shares"). The
Underwritten Shares and the Option Shares are herein referred to as the
"Shares". The shares of Common Stock of the Company to be outstanding after
giving effect to the sale of the Shares are herein referred to as the "Stock".
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement, including a prospectus, relating to the Shares. The registration
statement as amended at the time when it shall become effective including
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act, is referred to
in this Agreement as the "Registration Statement", and the prospectus in the
form first used to confirm sales of Shares is referred to in this Agreement as
the "Prospectus". If the Company has filed an abbreviated registration
statement pursuant to Rule 462(b) under the Securities Act (the
"Rule 462 Registration Statement"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462 Registration
Statement.
The Company hereby agrees with the Underwriters as follows:
1. The Company agrees to issue and sell the Underwritten Shares to the
several Underwriters as hereinafter provided, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Company the respective number of Underwritten Shares set forth opposite
such Underwriter's name in Schedule I hereto at a purchase price per share (the
"Purchase Price") of $ .
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In addition, the Company agrees to issue and sell the Option Shares to the
several Underwriters as hereinafter provided, and the Underwriters on the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, shall have the option to purchase, severally and
not jointly, from the Company up to an aggregate of 375,000 Option Shares at the
Purchase Price, for the sole purpose of covering over-allotments (if any) in the
sale of Underwritten Shares by the several Underwriters.
If any Option Shares are to be purchased, the number of Option Shares to be
purchased by each Underwriter shall be the number of Option Shares which bears
the same ratio to the aggregate number of Option Shares being purchased as the
number of Underwritten Shares set forth opposite the name of such Underwriter in
Schedule I hereto (or such number increased as set forth in Section 9 hereof)
bears to the aggregate number of Underwritten Shares being purchased from the
Company by the several Underwriters, subject, however, to such adjustments to
eliminate any fractional Shares as the Representatives in their sole discretion
shall make.
The Underwriters may exercise the option to purchase the Option Shares at
any time (but not more than once) on or before the thirtieth day following the
date of this Agreement, by written notice from the Representatives to the
Company. Such notice shall set forth the aggregate number of Option Shares as
to which the option is being exercised and the date and time when the Option
Shares are to be delivered and paid for which may be the same date and time as
the Closing Date (as hereinafter defined), but shall not be earlier than the
Closing Date nor later than the tenth full Business Day (as hereinafter defined)
after the date of such notice (unless such time and date are postponed in
accordance with the provisions of Section 9 hereof). Any such notice shall be
given at least two Business Days prior to the date and time of delivery
specified therein.
2. The Company understands that the Underwriters intend (i) to make a
public offering of the Shares as soon after (A) the Registration Statement has
become effective and (B) the parties hereto have executed and delivered this
Agreement, as in the judgment of the Representatives is advisable and (ii)
initially to offer the Shares upon the terms set forth in the Prospectus.
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3. Payment for the Shares shall be made by wire transfer in immediately
available funds to the account specified by the Company to the Representatives,
no later than noon the Business Day (as defined below) prior to the Closing Date
(as defined below), in the case of the Underwritten Shares, on _______________,
1996, or at such other time on the same or such other date, not later than the
fourth Business Day after the date of this Agreement or thereafter, as the
Representatives and the Company may agree upon in writing or, in the case of the
Option Shares, on the date and time specified by the Representatives in the
written notice of the Underwriters' election to purchase such Option Shares.
The time and date of such payment for the Underwritten Shares is referred to
herein as the "Closing Date" and the time and date for such payment for the
Option Shares, if other than the Closing Date, are herein referred to as the
"Additional Closing Date". As used herein, the term "Business Day" means any
day other than a day on which banks are permitted or required to be closed in
New York City.
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters
(including, without limitation, by "full-fast" electronic transfer by Depository
Trust Company) of the Shares to be purchased on such date registered in such
names and in such denominations as the Representatives shall request in writing
not later than two full Business Days prior to the Closing Date or the
Additional Closing Date, as the case may be, with any transfer taxes payable in
connection with the transfer to the Underwriters of the Shares duly paid by the
Company. The certificates for the Shares will be made available for inspection
and packaging by the Representatives at the office of ▇.▇. ▇▇▇▇▇▇ Securities
Inc. set forth above not later than 1:00 P.M., New York City time, on the
Business Day prior to the Closing Date or the Additional Closing Date, as the
case may be.
4. The Company represents and warrants to each Underwriter that:
(a) no order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and the preliminary prospectus
filed as part of the Registration Statement complied, at the time the
Registration Statement was declared effective, in all material respects with the
Securities Act, and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use therein;
(b) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been instituted
or, to the knowledge of the Company, threatened by the Commission; and the
Registration Statement and Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) comply, or will
comply, as the case may be, in all material respects with the Securities Act and
do not and will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the date of the Prospectus and any
amendment or supplement thereto,
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contain any 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, and the Prospectus, as amended or supplemented, if applicable,
at the Closing Date or Additional Closing Date, as the case may be, will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; except that the foregoing
representations and warranties shall not apply to statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use therein;
(c) the financial statements, and the related notes thereto, included
in the Registration Statement and the Prospectus present fairly the consolidated
financial position of the Company as of the dates indicated and the results of
its operations and changes in its consolidated cash flows for the periods
specified; and said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis, and the
supporting schedules included in the Registration Statement present fairly the
information required to be stated therein;
(d) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, with the exception of option
grants made to employees of or consultants to the Company, there has not been
any change in the capital stock or long-term debt of the Company, or any
material adverse change, in or affecting the general affairs, business,
prospects, management, financial position, stockholders' equity or results of
operations of the Company, otherwise than as set forth or contemplated in the
Prospectus; and except as set forth or contemplated in the Prospectus the
Company has not entered into any transaction or agreement (whether or not in the
ordinary course of business) material to the Company;
(e) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation, with power and corporate authority to own its properties and
conduct its business as described in the Prospectus, and has been duly qualified
as a foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, other than where
the failure to be so qualified or in good standing would not have a material
adverse effect on the Company;
(f) the Company does not own or control, directly or indirectly, any
interest in any other corporation, association, or other business entity;
(g) this Agreement has been duly authorized, executed and delivered
by the Company;
(h) the Company has an authorized capitalization as set forth in the
Prospectus and such authorized capital stock conforms as to legal matters to the
description thereof set forth in the Prospectus, and all of the outstanding
shares of capital stock of the Company have been duly
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authorized and validly issued, are fully-paid and non-assessable and are not
subject to any pre-emptive or similar rights; and, except as described in or
expressly contemplated by the Prospectus, there are no outstanding rights
(including, without limitation, pre-emptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock of the
Company or any such subsidiary, any such convertible or exchangeable securities
or any such rights, warrants or options;
(i) the Shares to be issued and sold by the Company hereunder have
been duly authorized, and, when issued and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be duly issued
and will be fully paid and non-assessable and will conform to the descriptions
thereof in the Prospectus; and the issuance of the Shares is not subject to any
preemptive or similar rights;
(j) the Company is not, nor with the giving of notice or lapse of
time or both would be, in violation of or in default under, its Certificate of
Incorporation or By-Laws or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a party or by
which it or any of its properties is bound, except for violations and defaults
which individually and in the aggregate are not material to the Company; the
issue and sale of the Shares and the performance by the Company of its
obligations under this Agreement and the consummation of the transactions
contemplated herein will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument which is material
to the Company to which the Company is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will any such action result
in any violation of the provisions of the Certificate of Incorporation or the
By-Laws of the Company or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company, its subsidiaries or any of their respective properties; and no
consent, approval, authorization, order, license, registration or qualification
of or with any such court or governmental agency or body is required for the
issue and sale of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement, except such consents, approvals,
authorizations, orders, licenses, registrations or qualifications as have been
obtained under the Securities Act and as may be required by the National
Association of Securities Dealers, Inc. (the "NASD"), under state securities or
Blue Sky Laws in connection with the purchase and distribution of the Shares by
the Underwriters;
(k) other than as set forth or contemplated in the Prospectus, there
are no legal or governmental investigations, actions, suits or proceedings
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its properties or to which the Company is or may be a party or
to which any property of the Company is or may be the subject which, if
determined adversely to the Company, could individually or in the aggregate
have, or reasonably be expected to have, a material adverse effect on the
general affairs, business, prospects, management, financial position,
stockholders' equity or results of operations of the Company, and, to
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the best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others; and there are
no statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or Prospectus or to be filed as exhibits
to the Registration Statement that are not described or filed as required;
(l) the Company owns no real property, has good and marketable title
to all personal property owned by it, in each case free and clear of all liens,
encumbrances and defects except such as are described or referred to in the
Prospectus or such as do not materially affect the value of such property and do
not interfere with the use made or proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid, existing
and enforceable leases with such exceptions as are not material and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company or its subsidiaries;
(m) The Company owns or possesses adequate licenses or other rights
to use all patents, copyrights, trademarks, service marks, trade names,
technology and know-how (collectively, the "Intellectual Property") necessary
(in any material respect) to conduct its business in the manner described in the
Prospectus or otherwise not material, the Company is not obligated to pay a
royalty, grant a license, or provide other consideration to any third party in
connection with its patents, copyrights, trademarks, service marks, trade names,
or technology other than as disclosed in the Prospectus, and, except as
disclosed in the Prospectus, the Company and its subsidiaries have not received
any notice of infringement or conflict with (and the Company knows of no
infringement or conflict with) asserted rights of others with respect to the
Intellectual Property which could reasonably be expected to result in any
material adverse effect upon the Company or its subsidiaries and, except as
disclosed in the Prospectus, the discoveries, inventions, products or processes
of the Company referred to in the Prospectus do not, to the best knowledge of
the Company, infringe or conflict with any right or patent of any third party,
or any discovery, invention, product or process which is the subject of a patent
application filed by any third party, known to the Company which could have a
material adverse effect on the Company or its subsidiaries. Other than Syntex,
the University of Florida Research Foundation, Inc. and ▇▇▇▇▇ ▇▇, to the extent
described in the Prospectus under the caption "Business -- Licenses and
Collaborations," no third party including any academic or governmental
organization, possesses rights to the Intellectual Property which, if exercised,
could enable such third party to develop products competitive to those of the
Company or could have a material adverse effect on the ability of the Company to
conduct its business in the manner described in the Prospectus.
(n) no relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which is required by the Securities
Act to be described in the Registration Statement and the Prospectus which is
not so described;
(o) no person has the right to require the Company to register any
securities for offering and sale under the Securities Act by reason of the
filing of the Registration Statement with the Commission or the issue and sale
of the Shares;
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(p) the Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or entity "controlled"
by an "investment company", as such terms are defined in the Investment Company
Act of 1940, as amended (the "Investment Company Act");
(q) the Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida) relating to doing business
with the Government of Cuba or with any person or affiliate located in Cuba;
(r) Ernst & Young LLP, who have certified certain financial
statements of the Company, are independent public accountants as required by the
Securities Act;
(s) the Company has filed all federal, state, local and foreign tax
returns which have been required to be filed and have paid all taxes shown
thereon and all assessments received by it to the extent that such taxes have
become due and are not being contested in good faith; and, except as disclosed
in the Registration Statement and the Prospectus, there is no tax deficiency
which has been or might reasonably be expected to be asserted or threatened
against the Company;
(t) the Company has not taken nor will it take, directly or
indirectly, any action designed to, or that might be reasonably expected to,
cause or result in stabilization or manipulation of the price of the Common
Stock;
(u) the Company owns, possesses or has obtained all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal, state, local
and other governmental authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other tribunals, domestic or
foreign, necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date hereof, and
the Company not has received any actual notice of any proceeding relating to
revocation or modification of any such license, permit, certificate, consent,
order, approval or other authorization, except as described in the Registration
Statement and the Prospectus; and the Company is in compliance with all laws and
regulations relating to the conduct of its business as conducted as of the date
hereof; the Company is not in violation of any foreign, state or local law,
order, rule, regulation, writ, injunction or decree of any court or governmental
agency or body, including, but not limited to, the United States Food and Drug
Administration (the "FDA"); all of the descriptions in the Registration
Statement and Prospectus of the legal and governmental proceedings by or before
the FDA or any foreign, state or local government body exercising comparable
authority are true, complete and accurate in all material respects;
(v) the human clinical trials conducted by the Company or in which
the Company has participated that are described in the Registration Statement
and Prospectus, or the results of which are referred to in the Registration
Statement and Prospectus, and, to the best of the Company's knowledge, such
studies and tests conducted on behalf of the Company, 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
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trials contained in the Registration Statement and Prospectus are accurate and
complete in all material respects; and 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 Registration Statement and Prospectus or the results of which
are referred to in the Registration Statement and Prospectus;
(w) there are no existing or, to the best knowledge of the Company,
threatened labor disputes with the employees of the Company which are likely to
have a material adverse effect on the Company;
(x) the Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"),
(ii) has received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(iii) is in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the Company;
(y) in the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company, in the course of which it identifies and
evaluates associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of properties
or compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or in the
aggregate, have a material adverse effect on the Company; and
(z) each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended, ("ERISA") that
is maintained, administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and its affiliates
has been maintained in compliance with its terms and the requirements of any
applicable statutes, orders, rules and regulations, including but not limited to
ERISA and the Internal Revenue Code of 1986, as amended, ("Code"). No
prohibited transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code has occurred with respect to any such plan excluding
transactions effected pursuant to a statutory or administrative exemption. For
each such plan which is subject to the funding rules of Section 412 of the Code
or Section 302 of ERISA no "accumulated funding deficiency" as defined in
Section 412 of the Code has been incurred, whether or not waived, and the fair
market value of the assets of each such plan (excluding for these purposes
accrued but unpaid contributions) exceeded the present value of all benefits
accrued under such plan determined using reasonable actuarial assumptions.
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5. The Company covenants and agrees with each of the several Underwriters
as follows:
(a) to use its best efforts to cause the Registration Statement to
become effective at the earliest possible time and, if required, to file the
final Prospectus with the Commission within the time periods specified by Rule
424(b) and Rule 430A under the Securities Act and to furnish copies of the
Prospectus to the Underwriters in New York City prior to 10:00 a.m., New York
City time, on the Business Day next succeeding the date of this Agreement in
such quantities as the Representatives may reasonably request;
(b) to deliver, at the expense of the Company, to the Representatives
four (4) signed copies of the Registration Statement (as originally filed) and
each amendment thereto, in each case including exhibits, and, upon request, to
each other Underwriter a conformed copy of the Registration Statement (as
originally filed) and each amendment thereto, in each case without exhibits and,
during the period mentioned in paragraph (e) below, to each of the Underwriters
as many copies of the Prospectus (including all amendments and supplements
thereto) as the Representatives may reasonably request;
(c) before filing any amendment or supplement to the Registration
Statement or the Prospectus, whether before or after the time the Registration
Statement becomes effective, to furnish to the Representatives a copy of the
proposed amendment or supplement for review and not to file any such proposed
amendment or supplement to which the Representatives reasonably object;
(d) to advise the Representatives promptly, and to confirm such
advice in writing (i) when the Registration Statement has become effective, (ii)
when any amendment to the Registration Statement has been filed or becomes
effective, (iii) when any supplement to the Prospectus or any amended Prospectus
has been filed and to furnish the Representatives with copies thereof, (iv) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for any additional information,
(v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus or the
initiation or threatening of any proceeding for that purpose, (vi) of the
occurrence of any event, within the period referenced in paragraph (e) below, as
a result of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
and (vii) of the receipt by the Company of any notification with respect to any
suspension of the qualification of the Shares for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and to use its best efforts to prevent the issuance of any such stop
order, or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus, or of any order suspending any such qualification
of the shares, or notification of any such order thereof and, if issued, to
obtain as soon as possible the withdrawal thereof;
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(e) if, during such period of time after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters a
prospectus relating to the Shares is required by law to be delivered in
connection with sales by the Underwriters or any dealer, any event shall occur
as a result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with law, forthwith to prepare and
furnish, at the expense of the Company, to the Underwriters and to the dealers
(whose names and addresses the Representatives will furnish to the Company) to
which Shares may have been sold by the Representatives on behalf of the
Underwriters and to any other dealers upon request, such amendments or
supplements to the Prospectus as may be necessary so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus will comply with law;
(f) to endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives shall
reasonably request and to continue such qualification in effect so long as
reasonably required for distribution of the Shares; PROVIDED that the Company
shall not be required to file a general consent to service of process in any
jurisdiction;
(g) to make generally available to its security holders and to the
Representatives as soon as practicable an earnings statement covering a period
of at least twelve months beginning with the first fiscal quarter of the Company
occurring after the effective date of the Registration Statement, which shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of
the Commission promulgated thereunder;
(h) so long as the Shares are outstanding, to furnish to the
Representatives copies of all reports or other communications (financial or
other) furnished to holders of the Shares, and copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange;
(i) for a period of 180 days after the date of the initial public
offering of the Shares not to (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 to purchase or otherwise transfer or dispose
of, directly or indirectly, any shares of Stock or any securities convertible
into or exercisable or exchangeable for Stock or (ii) enter into any swap or
other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Stock, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of Stock or such other
securities, in cash or otherwise without the prior written consent of ▇.▇.
▇▇▇▇▇▇, other than the Shares to be sold hereunder and any shares of Stock of
the Company issued upon the exercise of options or warrants outstanding as of
the date hereof and additional options granted under the Company's 1994 Equity
Incentive Plan, as amended, 1992 Stock Option Plan, as amended or Non-Employee
Directors' Stock Option Plan, and any shares of Stock issued under the Employee
Stock Purchase Plan;
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(j) to use the net proceeds received by the Company from the sale of
the Shares pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds";
(k) to use its best efforts to list for quotation the Shares on the
National Association of Securities Dealers Automated Quotations National Market
(the "Nasdaq National Market");
(l) to file with the Commission such reports on Form SR as may be
required by Rule 463 under the Securities Act;
(m) whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of its obligations hereunder,
including without limiting the generality of the foregoing, all costs and
expenses (i) incident to the preparation, issuance, execution and delivery of
the Shares, (ii) incident to the preparation, printing and filing under the
Securities Act of the Registration Statement, the Prospectus and any preliminary
prospectus (including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or qualification of
the Shares under the laws of such jurisdictions as the Representatives may
designate (including fees of counsel for the Underwriters and its
disbursements), (iv) in connection with the listing of the Shares on the Nasdaq
National Market, (v) related to the filing with, and clearance of the offering
by, the National Association of Securities Dealers, Inc., (vi) in connection
with the printing (including word processing and duplication costs) and delivery
of this Agreement, the Preliminary and Supplemental Blue Sky Memoranda and the
furnishing to the Underwriters and dealers of copies of the Registration
Statement and the Prospectus, including mailing and shipping, as herein
provided, (vii) any expenses incurred by the Company in connection with a "road
show" presentation to potential investors, (viii) the cost of preparing stock
certificates and (ix) the cost and charges of any transfer agent and any
registrar.
6. The several obligations of the Underwriters hereunder to purchase the
Shares on the Closing Date or the Additional Closing Date, as the case may be,
are subject to the performance by the Company of its obligations hereunder and
to the following additional conditions:
(a) the Registration Statement shall have become effective (or if a
post-effective amendment is required to be filed under the Securities Act, such
post-effective amendment shall have become effective) not later than 5:00 P.M.,
New York City time, on the date hereof; and no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
shall be in effect, and no proceedings for such purpose shall be pending before
or threatened by the Commission; the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Securities Act and in
accordance with Section 5(a) hereof; and all requests for additional information
shall have been complied with to the satisfaction of the Representatives;
-11-
(b) the representations and warranties of the Company contained
herein are true and correct on and as of the Closing Date or the Additional
Closing Date, as the case may be, as if made on and as of the Closing Date or
the Additional Closing Date, as the case may be, and the Company shall have
complied with all agreements and all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date or the Additional Closing
Date, as the case may be;
(c) since the respective dates as of which information is given in
the Prospectus, with the exception of option grants to employees of or
consultants to the Company, there shall not have been any change in the capital
stock or long-term debt of the Company or any material adverse change in or
affecting the general affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of the Company,
otherwise than as set forth or contemplated in the Prospectus, the effect of
which in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares on
the Closing Date or the Additional Closing Date, as the case may be, on the
terms and in the manner contemplated in the Prospectus; and the Company has not
sustained since the date of the latest audited financial statements included in
the Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus;
(d) the Representatives shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, a certificate of an
executive officer of the Company, with specific knowledge about the Company's
financial matters, satisfactory to the Representatives to the effect set forth
in subsections (a) and (b) (with respect to the respective representations,
warranties, agreements and conditions of the Company) of this Section and to the
further effect that there has not occurred any material adverse change in or
affecting the general affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole from that set forth or contemplated in the
Prospectus, as amended or supplemented if applicable;
(e) ▇▇▇▇▇▇ Godward LLP, counsel for the Company, shall have furnished
to the Representatives their written opinion, dated the Closing Date or the
Additional Closing Date, as the case may be, in form and substance satisfactory
to the Representatives, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation, corporate with power and authority to own its properties and
conduct its business as described in the Prospectus;
(ii) the Company has been duly qualified as a foreign
corporation for the transaction of business and to the best of such counsel's
knowledge is in good standing under the laws of each other jurisdiction in which
it owns or leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company taken as a
whole;
-12-
(iii) to the best of such counsel's knowledge, there are no
legal or governmental investigations, actions, suits or proceedings pending or,
to the best of such counsel's knowledge, threatened against or affecting the
Company or any of its properties; and such counsel does not know of any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or Prospectus or to be filed as exhibits
to the Registration Statement that are not described or filed as required;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the authorized capital stock of the Company conforms
as to legal matters to the description thereof contained in the Prospectus;
(vi) the shares of capital stock of the Company
outstanding prior to the issuance of the Shares have been duly authorized and
are validly issued, fully paid and non-assessable;
(vii) the Shares have been duly authorized, and when
delivered to and paid for the Underwriters in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable and the
issuance of the Shares is not subject to any preemptive or to the best of such
counsel's knowledge similar rights;
(viii) the statements in the Prospectus under "Business --
Licenses and Collaborations," "Certain Transactions," "Shares Eligible for
Future Sale," "Description of Capital Stock," and in the Registration Statement
in Items 14 and 15, insofar as such statements constitute a summary of the terms
of the Stock, legal matters, documents or proceedings referred to therein,
fairly present the information required to be presented under the Securities
Act & Rules with respect to such terms, legal matters, documents or proceedings;
(ix) such counsel is of the opinion that the Registration
Statement and the Prospectus and any amendments and supplements thereto (other
than the financial statements and related schedules and financial and
statistical data derived therefrom and included therein, as to which such
counsel need express no opinion) comply as to form in all material respects with
the requirements of the Securities Act and Rules; such counsel believes that
(other than the financial statements and related schedules and financial and
statistical data derived therefrom and included therein, as to which such
counsel need express no belief) the Registration Statement and the prospectus
included therein at the time the Registration Statement became effective did not
contain any 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 that the Prospectus, as amended or supplemented, if applicable,
does not contain any 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;
-13-
(x) The Company is not, nor, or with the giving of notice
or lapse of time or both would be, in violation of or in default under, its
Certificate of Incorporation or By-Laws or, to the best knowledge of such
counsel, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to which the Company is a party or by which it or
any of its properties is bound, except for violations and defaults which
individually and in the aggregate are not material to the Company; the issue and
sale of the Shares being delivered on the Closing Date or the Additional Closing
Date, as the case may be; the performance by the Company of its obligations
under this Agreement and the consummation of the transactions contemplated
herein will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, the Certificate of Incorporation
or the By-Laws of the Company or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to which the
Company is a party or by which the Company is bound or to which any of the
property or assets of the Company is subject, nor will any such action result in
any violation of the provisions of or any applicable law or statute or any
order, rule or regulation of any court or governmental agency so far as is known
to such counsel or body having jurisdiction over the Company or any of its
properties; other than as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by the
Underwriters as to which such counsel need express no opinion;
(xi) no consent, approval, authorization, order, license,
registration or qualification of or with any court or governmental agency or
body is required for the issue and sale of the Shares or the consummation of the
other transactions contemplated by this Agreement, except such consents,
approvals, authorizations, orders, licenses, registrations or qualifications as
have been obtained under the Securities Act and; as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Shares by the Underwriters as to which such counsel need express no opinion;
(xii) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company", as such
terms are defined in the Investment Company Act;
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the States of California and Delaware, to the extent such counsel deems proper
and to the extent specified in such opinion, if at all, upon an opinion or
opinions (in form and substance reasonably satisfactory to Underwriters'
counsel) of other counsel reasonably acceptable to the Underwriters' counsel,
familiar with the applicable laws; (B) as to matters of fact, to the extent such
counsel deems proper, on certificates of responsible officers of the Company and
certificates or other written statements of officials of jurisdictions having
custody of documents respecting the corporate existence or good standing of the
Company. The opinion of such counsel for the Company shall state that the
opinion of any such other counsel upon which they relied is in form satisfactory
to such counsel and, in such counsel's opinion, the Underwriters and they are
justified in relying thereon. With respect to the matters to be covered in
subparagraph (x) above counsel may state their opinion and belief is based upon
their participation in the preparation of the Registration Statement and the
Prospectus and any amendment or supplement thereto and review and discussion of
the contents thereof but is without independent check or verification except as
specified.
-14-
The opinion of ▇▇▇▇▇▇ Godward LLP described above and the opinions of
Saliwanchik & Saliwanchik, ▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇ and McDonnell,
Boehnen, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Ltd. described below each shall be rendered to the
Underwriters at the request of the Company and shall so state therein;
(f) Saliwanchik & Saliwanchik, special intellectual property counsel
for the Company, shall have furnished to the Representatives their written
opinion, dated the Closing Date or the Additional Closing Date, as the case may
be, in form and substance satisfactory to the Representatives, to the effect
that:
(i) such counsel represents the University of Florida in
certain matters relating to intellectual property, including patents, trade
secrets and certain trademark matters, related the CVT-124;
(ii) such counsel is familiar with CVT-124 as used by the
Company in its business and the manner of its use and has read the portions of
the Registration Statement and the Prospectus entitled "Risk Factors --
Intellectual Property" and "Business -- Intellectual Property" (collectively,
the "Intellectual Property Portion");
(iii) the Intellectual Property Portion contains accurate
descriptions of the patent applications filed in the United States and outside
the United States related to CVT-124 (the "CVT-124 Applications") and issued and
allowed patents related to CVT-124 (the "CVT-124 Patents") licensed to the
Company by the University of Florida, each of which CVT-124 Applications and
CVT-124 Patents shall be listed on exhibits to such opinion, and fairly
summarizes the legal matters, documents and proceedings relating thereto;
(iv) based upon a review of the third party rights made known
to counsel and discussions with scientific personnel of the Company and the
University of Florida, such counsel is 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 Prospectus and solely as the
foregoing relates to CVT-124;
(v) such counsel has reviewed the CVT-124 Applications, which
CVT-124 Applications are described in the Intellectual Property Portion, and in
the opinion of such counsel the CVT-124 Applications have been properly prepared
and filed, and are being diligently pursued by the University of Florida, and
the inventions described in the CVT-124 Applications are licensed to the
Company;
(vi) to such counsel's knowledge, no entity or individual other
than the Company and the University of Florida has any right or claim in any of
the inventions, the CVT-124 Patents, the CVT-124 Applications, or any patent to
be issued therefrom, and in such counsel's opinion each of the CVT-124
Applications discloses patentable subject matter;
-15-
(vii) such counsel is aware of no pending or threatened claim,
suit, judicial or governmental proceedings relating to the CVT-124 Patents or
the CVT-124 Applications or the subject matter therein, based upon review of the
CVT-124 Patents and the CVT-124 Applications, such counsel is not aware of any
rights of third parties to any of the inventions described in the CVT-124
Patents or the CVT-124 Applications which could reasonably be expected to
materially affect the ability of the Company to conduct its business as
described in the Prospectus, including the commercialization of its products
currently under development; and
(viii) such counsel has no reason to believe that the information
contained in the Intellectual Property Portion of the Registration Statement or
the Prospectus, solely as the foregoing relates to the CVT-124 Patents and CVT-
124 Applications, at the time it became effective contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that, at the Closing Date, the information contained in the Intellectual
Property Portion of the Prospectus or any amendment or supplement to the
Intellectual Property Portion of the Prospectus, solely as the foregoing relates
to the CVT-124 Patents and CVT-124 Applications, contains any untrue statement
of a material fact 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;
(g) ▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇, intellectual property counsel to
Syntex, on behalf of the Company, shall have furnished to the Representatives
their written opinion, dated the Closing Date or the Additional Closing Date, as
the case may be, in form and substance satisfactory to the Representatives, to
the effect that:
(i) such counsel represents Syntex in certain matters relating
to intellectual property, including patents, trade secrets and certain trademark
matters, related to Ranolazine;
(ii) such counsel is familiar with Ranolazine use and has read
the portions of the Registration Statement and the Prospectus entitled "Risk
Factors -- Intellectual Property" and "Business -- Intellectual Property"
(collectively, the "Intellectual Property Portion");
(iii) the Intellectual Property Portion contains accurate
descriptions of the patent applications filed in the United States and outside
the United States related to Ranolazine (the "Ranolazine Applications") and
issued and allowed patents related to Ranolazine (the "Ranolazine Patents")
licensed to the Company by Syntex, each of which Ranolazine Applications and
Ranolazine Patents shall be listed on exhibits to such opinion, and fairly
summarizes the legal matters, documents and proceedings relating thereto;
(iv) such counsel has reviewed the Ranolazine Applications,
which Ranolazine Applications are described in the Intellectual Property
Portion, and in the opinion of such counsel the Ranolazine Applications have
been properly prepared and filed, and are being diligently pursued by Syntex,
and the inventions described in the Ranolazine Applications are licensed to the
Company;
-16-
(v) to such counsel's knowledge, no entity or individual other
than the Company and Syntex has any right or claim in any of the inventions, the
Ranolazine Patents, the Ranolazine Applications, or any patent to be issued
therefrom, and in such counsel's opinion each of the Ranolazine Applications
discloses patentable subject matter;
(vi) such counsel is aware of no pending or threatened claim,
suit, judicial or governmental proceedings relating to the Ranolazine Patents or
the Ranolazine Applications or the subject matter therein, based upon review of
the Ranolazine Patents and the Ranolazine Applications, such counsel is not
aware of any rights of third parties to any of the inventions described in the
Ranolazine Patents or the Ranolazine Applications; and
(vii) such counsel has no reason to believe that the information
contained in the Intellectual Property Portion of the Registration Statement or
the Prospectus, solely as the foregoing relates to the Ranolazine Patents and
the Ranolazine Applications, at the time it became effective contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that, at the Closing Date, the information contained in the
Intellectual Property Portion of the Prospectus or any amendment or supplement
to the Intellectual Property Portion of the Prospectus, solely as the foregoing
relates to the Ranolazine Patents and the Ranolazine Applications, contains any
untrue statement of a material fact 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; and
(h) McDonnell, Boehnen, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Ltd., intellectual
property counsel for the Company, shall have furnished to the Representatives
their written opinion, dated the Closing Date or the Additional Closing Date, as
the case may be, in form and substance satisfactory to the Representatives, to
the effect that:
(i) such counsel represents the Company in certain matters
relating to intellectual property, including patents, trade secrets and certain
trademark matters, related to the Company's products under development as
described in the Prospectus, other than CVT-124 and Ranolazine;
(ii) such counsel is familiar with the foregoing technology and
products as used by the Company in its business and the manner of its use and
has read the portions of the Registration Statement and the Prospectus entitled
"Risk Factors -- Intellectual Property" and "Business -- Intellectual Property"
(collectively, the "Intellectual Property Portion");
(iii) the Intellectual Property Portion contains accurate
descriptions of the patent applications filed in the United States and outside
the United States related to the foregoing technology and products (the "Company
Applications") and issued and allowed patents related to the foregoing
technology and products (the "Company Patents") and patents licensed to the
Company, each of which Company Applications and Company Patents shall be listed
on exhibits to such opinion, and fairly summarizes the legal matters, documents
and proceedings relating thereto;
-17-
(iv) based upon a review of the third party rights made known
to counsel and discussions with scientific personnel of the Company, such
counsel is 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 Prospectus and as such are related to the foregoing technology and
products;
(v) such counsel has reviewed the Company Applications, which
Company Applications are described in the Intellectual Property Portion, and in
the opinion of such counsel the Company Applications have been properly prepared
and filed, and are being diligently pursued by the Company, and the inventions
described in the Company Applications are owned by, assigned or licensed to the
Company;
(vi) to such counsel's knowledge, no other entity or individual
has any right or claim in any of the inventions, the Company Patents, the
Company Applications, or any patent to be issued therefrom, and in such
counsel's opinion each of the Company Applications discloses patentable subject
matter;
(vii) such counsel is aware of no pending or threatened claim,
suit, judicial or governmental proceedings relating to the Company Patents or
the Company Applications or the subject matter therein, based upon review of the
Company Patents and the Company Applications, such counsel is not aware of any
rights of third parties to any of the inventions described in the Company
Patents or the Company Applications which could reasonably be expected to
materially affect the ability of the Company to conduct its business as
described in the Prospectus, including the commercialization of its products
currently under development; and
(viii) such counsel has no reason to believe that the information
contained in the Intellectual Property Portion of the Registration Statement or
the Prospectus at the time it became effective contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that, at
the Closing Date, the information contained in the Intellectual Property Portion
of the Prospectus or any amendment or supplement to the Intellectual Property
Portion of the Prospectus contains any untrue statement of a material fact 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.
(i) on the effective date of the Registration Statement and the
effective date of the most recently filed post-effective amendment to the
Registration Statement and also on the Closing Date or Additional Closing Date,
as the case may be, Ernst & Young LLP shall have furnished to you letters, dated
the respective dates of delivery thereof, in form and substance satisfactory to
you, containing statements and information of the type customarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus;
-18-
(j) the Representatives shall have received on and as of the Closing
Date or Additional Closing Date, as the case may be, an opinion of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation, counsel to the
Underwriters, with respect to the due authorization and valid issuance of the
Shares, the Registration Statement, the Prospectus and other related matters as
the Representatives may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters;
(k) the Shares to be delivered on the Closing Date or Additional
Closing Date, as the case may be, shall have been approved for listing on the
Nasdaq National Market;
(l) on or prior to the Closing Date or Additional Closing Date, as
the case may be, the Company shall have furnished to the Representatives such
further certificates and documents as the Representatives shall reasonably
request; and
(m) the "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and certain stockholders, officers and directors
of the Company relating to sales and certain other dispositions of shares of
Stock or certain other securities, delivered to you on or before the date
hereof, shall be in full force and effect on the Closing Date or Additional
Closing Date, as the case may be.
7. The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including, without
limitation, the legal fees and other expenses incurred in connection with any
suit, action or proceeding or any claim asserted) caused by any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use therein.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and each person who controls the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from the Company to each Underwriter, but only with
reference to information relating to such Underwriter furnished to the Company
in writing by such Underwriter through the Representatives expressly for use in
the Registration Statement, the Prospectus, any amendment or supplement thereto,
or any preliminary prospectus.
-19-
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Underwriters
and such control persons of Underwriters shall be designated in writing by ▇.▇.
▇▇▇▇▇▇ Securities Inc. and any such separate firm for the Company, its
directors, its officers who sign the Registration Statement and such control
persons of the Company shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested an Indemnifying Person
to reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an Indemnified Person in respect of any losses,
claims, damages or liabilities referred to therein, then each Indemnifying
Person under such paragraph, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other
-20-
hand from the offering of the Shares or (ii) if the allocation provided by
clause (i) above 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 the
Underwriters on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same respective proportions as the net proceeds from the offering (before
deducting expenses) received by the Company and the total underwriting discounts
and the commissions received by the Underwriters, in each case as set forth in
the table on the cover of the Prospectus, bear to the aggregate public offering
price of the Shares. The relative fault of the Company on the one hand and the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by PRO RATA
allocation (even if the Underwriters were treated as one entity for such
purposes) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective number of Shares set forth opposite their names in Schedule I hereto,
and not joint.
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Underwriter or any person controlling any Underwriter or by or on behalf of
the Company, its officers or directors or any other person controlling the
Company and (iii) acceptance of and payment for any of the Shares.
-21-
8. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Shares) may
be terminated in the absolute discretion of the Representatives, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (or, in the case of the Option Shares, prior to the
Additional Closing Date) (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange or the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of or
guaranteed by the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities, or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in the judgment of the Representatives, is material and adverse and which,
in the judgment of the Representatives, makes it impracticable to market the
Shares being delivered at the Closing Date or the Additional Closing Date, as
the case may be, on the terms and in the manner contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x) execution
and delivery hereof by the parties hereto and (y) release of notification of the
effectiveness of the Registration Statement (or, if applicable, any post-
effective amendment) by the Commission.
If on the Closing Date or the Additional Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Shares to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the number of Shares set
forth opposite their respective names in Schedule I bears to the aggregate
number of Underwritten Shares set forth opposite the names of all such non-
defaulting Underwriters, or in such other proportions as the Representatives may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; PROVIDED
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 9 by an
amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If on the Closing Date or the Additional Closing
Date, as the case may be, any Underwriter or Underwriters shall fail or refuse
to purchase Shares which it or they have agreed to purchase hereunder on such
date, and the aggregate number of Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date, and arrangements satisfactory to the Representatives and the
Company for the purchase of such Shares are not made within 36 hours after such
default, this Agreement (or the obligations of the several Underwriters to
purchase the Option Shares, as the case may be) shall terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case either you or the Company shall have the right to postpone the Closing
Date (or, in the case of the Option Shares, the Additional Closing Date), but in
no event for longer than seven days, in order that the required changes, if any,
in the Registration Statement and in the Prospectus or in any other documents or
arrangements may be
-22-
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement or any condition of the Underwriters' obligations cannot be fulfilled,
the Company agrees to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all out-of-
pocket expenses (including the fees and expenses of its counsel) reasonably
incurred by the Underwriter in connection with this Agreement or the offering
contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon the
Company, the Underwriters, any controlling persons referred to herein and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. No purchaser of Shares from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
12. Any action by the Underwriters hereunder may be taken by the
Representatives jointly or by ▇.▇. ▇▇▇▇▇▇ Securities Inc. alone on behalf of the
Underwriters, and any such action taken by the Representatives jointly or by
▇.▇. ▇▇▇▇▇▇ Securities Inc. alone shall be binding upon the Underwriters. 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 Underwriters shall be given to the
Representatives, c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ (telefax: (▇▇▇) ▇▇▇-▇▇▇▇); Attention: Syndicate Department. Notices
to the Company shall be given to it at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(telefax: (▇▇▇) ▇▇▇-▇▇▇▇); Attention: President, with a copy to ▇▇▇▇▇▇ Godward
LLP, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇; Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Esq.
13. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument.
14. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to the conflicts of
laws provisions thereof.
-23-
If the foregoing is in accordance with your understanding, please sign and
return four counterparts hereof.
Very truly yours,
CV THERAPEUTICS, INC.
By:
------------------------------------
Title:
Accepted: , 1996
---------
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Invemed Associates, Inc.
UBS Securities Inc.
Acting severally on behalf
of themselves and the
several Underwriters listed
in Schedule I hereto.
By: ▇.▇. ▇▇▇▇▇▇ Securities Inc.
Acting on behalf of itself and the
several Underwriters listed in
Schedule I hereto.
By:
-------------------------------
Title:
-24-
SCHEDULE I
NUMBER OF SHARES
UNDERWRITER TO BE PURCHASED
-------------------------------------------------- -------------------------
▇.▇. ▇▇▇▇▇▇ Securities Inc.. . . . . . . . . . . .
Invemed Associates, Inc. . . . . . . . . . . . . .
UBS Securities Inc.. . . . . . . . . . . . . . . .
Total:
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