Exhibit 10.3

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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 May 18, 2004

 

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PLEDGE AND ESCROW AGREEMENT

 

THIS PLEDGE AND ESCROW AGREEMENT (this “Agreement”), dated as of May 18, 2004,
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 May 18,
2004 (the “Indenture”), pursuant to which the Company will issue up to
$150,000,000 in aggregate principal amount of its 2¾% Senior Subordinated
Convertible Notes due 2012 (the “Notes”).

 

The Company desires to establish an escrow account with the Escrow Agent into
which an amount equal to 8.25% of the aggregate principal amount of the Notes
originally issued from time to time under the Indenture 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 8.25% of the aggregate principal amount of the Notes originally issued
under the Indenture on the date hereof (the “Initial Escrow Funds”).
Concurrently with the original issuance of any additional Notes under the
Indenture after the date hereof in connection with the exercise of the Initial
Purchasers’ option to purchase additional Notes pursuant to Section 2(b) of the
Purchase

 

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Agreement, the Company shall deliver to the Escrow Agent for deposit in the
Escrow Account an additional amount equal to 8.25% of the aggregate principal
amount of such additional Notes (the “Additional Escrow Funds” and, together
with the Initial Escrow Funds, 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, NATIONAL ASSOCIATION

ABA No.: 121000248

Account No.: 0001038377

Account Name: Corporate Trust Clearing Account

FFC: Wells Fargo as Trustee for CVT 2.75% Holders,

          Account No. 16112301

Attention: Joseph 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. 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. 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;

 

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(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;

 

(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 Escrow Agent, 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 Escrow Agent (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 Escrow Agent therein. In addition, the
Escrow Agent 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 Escrow Agent
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

 

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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;

 

(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.

 

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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 results in the acceleration of the payment of principal,
interest, premium, if any, and Liquidated Damages, 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 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 or the Escrow Agent 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 the Trustee shall elect. Any surplus of such cash or cash proceeds
held by the Trustee or the Escrow Agent and remaining after payment in full of
all the Secured Obligations and the costs and expenses incurred by and amounts
payable to the Trustee or the Escrow Agent hereunder or under the Indenture
shall be paid over to the Company.

 

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(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 November 16, 2004, May 16, 2005, November 16, 2005, May 16, 2006,
November 16, 2006 and May 16, 2007 (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 with the
procedures set forth in subsection (i) below or (2) other sources of funds
available to the Company, as anticipated in subsection (ii) below, or from any
combination of (1) and (2) above; provided, however, that nothing herein shall
be construed as limiting the Company’s obligation to make all interest payments
due on the Notes at the times and in the amounts required by the Notes, which
obligation shall be absolute and unconditional.

 

(i) Payment of Interest. If the Company elects to cause a Scheduled Interest
Payment to be made using funds held in the Escrow Account, then, not later than
five (5) Business Days prior to the date of the applicable Scheduled Interest
Payment, the Company shall direct the Escrow Agent in writing to transfer from
the Escrow Account to the Paying Agent 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) necessary to provide for payment in full
(or, if the Company intends to make a portion of such interest payment with
funds or Government Securities in the Escrow Account and the remainder of such
interest payment with funds other than those in the Escrow Account, such
portion) of the next Scheduled Interest Payment on the Notes. At or prior to
1:00 p.m., New York City time, on the day that is no later than one (1) Business
Day following receipt of such notice, the Escrow Agent shall transfer such funds
(or such Government Securities, as applicable) to the Paying Agent as set forth
in paragraph (e)(ii) hereof, and shall notify the Company in writing that it has
made such transfer to the Paying Agent. If the Company does not intend to
utilize the funds (or Government Securities) in the Escrow Account to make any
such Scheduled Interest Payment in full, then the Company shall make the
Scheduled Interest Payment from Company Funds (as defined in Section 4(b)(ii)
below).

 

(ii) Release of Funds to the Company Due to Direct Payment of Interest by the
Company. If the Company makes any Scheduled Interest Payment or a portion of any
Scheduled Interest Payment from a source of funds other than the Escrow Account
(“Company Funds”), the Company may, after payment in full of such Scheduled
Interest Payment and upon at least five (5) Business Days prior notice, direct
the Escrow Agent, so long as no Event of Default has occurred and is continuing,
to release to the Company (or at the direction of the Company, to release to a
designated third party) an amount of funds or Government Securities from the
Escrow Account, the sum of the cumulative interest payments on and aggregate
principal amount of which is less than or equal to the amount of Company Funds
so expended in making the Scheduled Interest Payment. Upon receipt of such
notice, the Escrow Agent shall pay over or transfer to the Company the requested
amount.

 

(c) Investment Income. Subject to the provisions of Sections 3 and 4(a) above,
all investment income earned on amounts on deposit in the Escrow Account is the
personal property of the Company. Subject to the provisions of Section 9(b)
hereof, promptly following receipt of any investment income earned on amounts on
deposit in the Escrow Account, the Escrow Agent shall transfer such funds to the
Company pursuant to Section 4(e)(i) hereof.

 

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(d) Excess Escrow Funds. If, in the course of funding the Escrow Account
pursuant to Section 2(a) hereof, the Company either elects or is required to
deposit in the Escrow Account funds in an amount greater than that which is
required to fund the payment of the Scheduled Interest Payments (in order to
permit the Escrow Agent to purchase an amount of Government Securities equal to
or greater than that which is required to fund the payment of the Scheduled
Interest Payments or otherwise) (any such excess amounts being hereinafter
referred to as “Excess Escrow Funds”), the Company may, upon at least five (5)
Business Days prior written notice, direct the Escrow Agent, so long as no Event
of Default has occurred and is continuing, to release to the Company (or at the
direction of the Company, to release to a designated third party) an amount of
funds or Government Securities from the Escrow Account, the sum of the
cumulative interest payments on and aggregate principal amount of which is less
than or equal to the amount of the Excess Escrow Funds. Upon receipt of such
notice, the Escrow Agent shall pay over or transfer to the Company the requested
amount.

 

(e) Wire Transfer.

 

(i) All funds distributed from the Escrow Account to the Company shall be
transferred by wire transfer of immediately available funds to the following
account:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

ABA No.: 121000248

Account No.: 0000840245

Wells Fargo Client Account No.: 10126300

Account Name: CV Therapeutics, Inc.

 

(ii) All 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) distributed from the Escrow Account to the Paying Agent for payment on
the Notes shall be transferred by an account-to-account transfer of immediately
available funds to the following account:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

ABA No.: 121000248

Account No.: 0001038377

Account Name: Corporate Trust Clearing Account

FFC: CV Therapeutics 2.75% Conv Notes due 2012,

         Account No. 16112300

Attention: Joseph Taffe

 

(f) Written Instructions; Certificates. The Company shall, upon request by the
Escrow Agent, execute and deliver to the Escrow Agent such additional written
instructions and certificates hereunder as may be reasonably required by the
Escrow Agent to give effect to this Section 4.

 

Section 5. Termination of Security Interest. Upon payment in full of the
Scheduled Interest Payments, the security interest evidenced by this Agreement
in any Collateral remaining in the Escrow Account shall automatically terminate
and be of no further force and

 

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effect. Furthermore, upon the release of any Collateral from the Escrow Account
in accordance with the terms of this Agreement, whether upon release of such
Collateral to Holders of Notes as payment of interest on the Notes, to the
Company pursuant to Sections 4(b)(ii) or 4(c) or otherwise, the security
interest evidenced by this Agreement in such Collateral so released shall
automatically terminate and be of no further force and effect. The Escrow Agent
shall, upon request by the Company, execute and deliver to the Company such
additional written instructions and certificates hereunder as may be reasonably
required by the Company to give effect to this Section 5.

 

Section 6. Attorneys-in-Fact. The Company hereby irrevocably appoints each of
the Trustee and the Escrow Agent as the Company’s attorney-in-fact, coupled with
an interest, with full authority in the place and stead of the Company and in
the name of the Company or otherwise, from time to time in the Trustee’s or the
Escrow Agent’s discretion to take any action and to execute any instrument that
the Trustee or the Escrow Agent may deem necessary or advisable to accomplish
the purposes of this Agreement, including, without limitation, to receive,
endorse and collect all instruments made payable to the Company representing any
interest payment, dividend or other distribution in respect of the Collateral or
any part thereof and to give full discharge for the same, and the expenses of
the Trustee and the Escrow Agent incurred in connection therewith shall be
payable by the Company.

 

Section 7. Trustee or Escrow Agent May Perform. Without limiting the authority
granted under Section 6 hereof, if the Company fails to perform any agreement
contained herein, the Trustee or the Escrow Agent may, but shall not be
obligated to, itself perform, or cause performance of, such agreement, and the
expenses of the Trustee or the Escrow Agent incurred in connection therewith
shall be payable by the Company and shall be secured by the Collateral.

 

Section 8. Representations, Warranties and Agreements.

 

(a) The Company represents, warrants and agrees that:

 

(i) The execution, delivery and performance by the Company of this Agreement is
within its corporate power, has been duly authorized by all necessary corporate
action of the Company, and does not contravene, or constitute a default under,
any provision of applicable law or regulation or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Company (except
as would not, individually or in the aggregate, have a Material Adverse Effect
(as defined in the Purchase Agreement)), or of the certificate of incorporation
or bylaws of the Company or result in the creation or imposition of any Lien on
any assets of the Company other than the Lien contemplated hereby.

 

(ii) The Company has full corporate power and authority to enter into this
Agreement and has the right to vote, pledge and grant a security interest in the
Collateral as provided by this Agreement.

 

(iii) This Agreement has been duly executed and delivered by the Company and
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.

 

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(iv) Upon the execution and delivery of this Agreement by the parties hereto and
the delivery to the Escrow Agent of the Collateral, the pledge of the Collateral
pursuant to this Agreement creates a valid and perfected first priority security
interest in the Collateral, securing the payment of the Secured Obligations for
the benefit of the Trustee, the Escrow Agent and the Holders of the Notes,
enforceable as such against all creditors of the Company and any persons
purporting to purchase any of the Collateral from each of them.

 

(v) No consent of any other person and no consent, authorization, approval, or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required either (i) for the pledge by the Company of the
Collateral pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by each of them or (ii) for the exercise by the
Trustee or the Escrow Agent of the remedies in respect of the Collateral
pursuant to this Agreement.

 

(vi) No litigation, investigation or proceeding of or before any arbitrator or
governmental authority is pending or, to the best knowledge of the Company,
threatened by or against the Company or against any of its properties or
revenues with respect to this Agreement or any of the transactions contemplated
hereby.

 

(vii) The pledge of the Collateral pursuant to this Agreement is not prohibited
by any applicable law or governmental regulation, release, interpretation or
opinion of the Board of Governors of the Federal Reserve System or other
regulatory agency (including, without limitation, Regulations T, U and X of the
Board of Governors of the Federal Reserve System).

 

(viii) All information set forth herein relating to the Collateral is accurate
and complete in all material respects.

 

(b) The Escrow Agent represents, warrants and agrees that:

 

(i) The Escrow Agent is a “bank” within the meaning of Section 9-102(a)(8) of
the New York UCC.

 

(ii) The Escrow Agent is a “securities intermediary” within the meaning of
Section 8-102(a)(14) of the New York UCC.

 

(c) The Trustee represents, warrants and agrees that it is an “entitlement
holder” within the meaning of Section 8-102(a)(7) of the New York UCC.

 

Section 9. Fees and Expenses of Escrow Agent.

 

(a) The Company agrees to pay the Escrow Agent its agreed-upon compensation for
its services as Escrow Agent hereunder promptly upon request therefor, and to
reimburse the Escrow Agent for all reasonable and documented expenses of or
disbursements incurred by the Escrow Agent in the performance of its duties
hereunder, including the reasonable fees, expenses and disbursements of legal
counsel to the Escrow Agent.

 

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(b) The Escrow Agent shall have a lien upon any investment income on deposit in
the Escrow Account solely for any costs, expenses and fees that may arise
hereunder and may retain that portion of the investment income in the Escrow
Account equal to such unpaid amounts, until all such costs, expenses and fees
have been paid.

 

Section 10. Rights, Duties and Immunities of Escrow Agent. Acceptance by the
Escrow Agent of its duties under this Agreement is subject to the following
terms and conditions, which all parties to this Agreement hereby agree shall
govern and control the rights, duties and immunities of the Escrow Agent:

 

(a) The duties and obligations of the Escrow Agent shall be determined solely by
the express provisions of this Agreement and the Escrow Agent shall not be
liable except for the performance of such duties and obligations as are
specifically set out in this Agreement. The Escrow Agent shall not be required
to inquire as to the performance or observation of any obligation, term or
condition under any agreement or arrangement between the Company and the
Trustee. The Escrow Agent is not a party to, and is not bound by, any agreement
or other document out of which this Agreement may arise. The Escrow Agent shall
be under no liability to any party hereto by reason of any failure on the part
of any party hereto (other than the Escrow Agent) or any maker, guarantor,
endorser or other signatory of any document or any other person to perform such
person’s obligations under any such document. The Escrow Agent shall not be
bound by any waiver, modification, termination or rescission of this Agreement
or any of the terms hereof, unless evidenced by a writing delivered to the
Escrow Agent signed by the proper party or parties and, if the duties or rights
of the Escrow Agent are affected, unless it shall give its prior written consent
thereto. This Agreement shall not be deemed to create a fiduciary relationship
between the parties hereto under state or federal law.

 

(b) The Escrow Agent shall not be responsible in any manner for the validity or
sufficiency of this Agreement or of any property delivered hereunder, or for the
value or collectibility of any note, check or other instrument, if any, so
delivered, or for any representations made or obligations assumed by any party
other than the Escrow Agent. Nothing herein contained shall be deemed to
obligate the Escrow Agent to deliver any cash, instruments, documents or any
other property referred to herein, unless the same shall have first been
received by the Escrow Agent pursuant to this Agreement.

 

(c) The Company shall reimburse and indemnify the Escrow Agent for, and hold it
harmless against, any loss, liability or expense, including but not limited to
reasonable legal counsel fees, incurred without bad faith, gross negligence or
willful misconduct on the part of the Escrow Agent, arising out of or in
conjunction with its acceptance of, or the performance of its duties and
obligations under, this Agreement, as well as the costs and expenses of
defending against any claim or liability arising out of or relating to this
Agreement.

 

(d) The Escrow Agent shall be fully protected in acting on and relying upon any
written notice, direction, request, waiver, consent, receipt or other paper or
document which the Escrow Agent in good faith believes to have been signed and
presented by the Company.

 

(e) The Escrow Agent shall not be liable for any error of judgment, or for any
act done or step taken or omitted by it in good faith or for any mistake in act
or law, or for

 

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anything which it may do or refrain from doing in connection herewith, except
its own gross negligence or willful misconduct.

 

(f) The Escrow Agent may seek the advice of legal counsel in the event of any
dispute or question as to the construction of any of the provisions of this
Agreement or its duties hereunder, and except for its own bad faith, gross
negligence or willful misconduct it shall incur no liability and shall be fully
protected in respect of any action taken, omitted or suffered by it in good
faith in accordance with the advice or opinion of such counsel.

 

(g) The parties hereto agree that if the Escrow Agent is notified by the
Trustee, the Company or the Holders of the Notes of any dispute with respect to
the payment, ownership or right of possession of the Escrow Account, the Escrow
Agent is authorized and directed to retain in its possession, without liability
to anyone, except for its bad faith, willful misconduct or gross negligence, all
or any part of the Escrow Account until such dispute shall have been settled
either by mutual agreement by the parties concerned or by the final order,
decree or judgment of a court or other tribunal of competent jurisdiction in the
United States of America, and a notice executed by the parties to the dispute or
their authorized representatives shall have been delivered to the Escrow Agent
setting forth the resolution of the dispute. The Escrow Agent shall be under no
duty whatsoever to institute, defend or partake in such proceedings.

 

(h) The agreements set forth in this Section 10 shall survive the resignation or
removal of the Escrow Agent, the termination of this Agreement and the payment
of all amounts hereunder.

 

Section 11. Resignation or Removal of Escrow Agent.

 

(a) The Escrow Agent shall have the right to resign upon 30 days’ prior written
notice to the Company and the Trustee. The Company shall have the right to
remove the Escrow Agent upon 30 days’ prior written notice to the Escrow Agent
and the Trustee. In the event of such resignation or removal, the Company shall
appoint a successor escrow agent hereunder by delivering to the Escrow Agent a
written notice of such appointment. Upon receipt of such notice, the Escrow
Agent shall deliver to the designated successor escrow agent all money and other
property held hereunder and shall thereupon be released and discharged from any
and all further responsibilities whatsoever under this Agreement; provided,
however, that the Escrow Agent shall not be deprived of its compensation earned
prior to such time.

 

(b) If no successor escrow agent shall have been designated by the date
specified in the Escrow Agent’s notice, all obligations of the Escrow Agent
hereunder shall nevertheless cease and terminate. The Escrow Agent’s sole
responsibility thereafter shall be to keep safely all property then held by it
and to deliver the same to a person designated by the other parties hereto or in
accordance with the direction of a final order or judgment of a court of
competent jurisdiction.

 

Section 12. Miscellaneous.

 

(a) Waiver. No waiver of any provision of this Agreement nor consent to any
departure by any party therefrom shall in any event be effective unless the same
shall be in

 

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writing and signed by each of the non-breaching parties and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.

 

(b) Severability. If, for any reason whatsoever, any one or more of the
provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid in a particular case or in all cases, such
circumstances shall not have the effect of rendering any of the other provisions
of this Agreement inoperative, unenforceable or invalid, and the inoperative,
unenforceable or invalid provision shall be construed as if it were written so
as to effectuate, to the maximum extent possible, the parties’ intent.

 

(c) Binding Effect. This Agreement shall inure to and be binding upon the
parties and their respective successors and permitted assigns; provided,
however, that the Company may not assign its rights or obligations hereunder
without the express prior written consent of the Trustee.

 

(d) Choice of Law. The existence, validity, construction, operation and effect
of any and all terms and provisions of this Agreement shall be determined in
accordance with and governed by the internal laws of the State of New York
including, without limitation the New York UCC, without giving effect to the
conflicts of law principles of such State. The securities intermediary’s
jurisdiction for purposes of Section 8-110 of the New York UCC shall be the
State of New York.

 

(e) Entire Agreement. This Agreement, the Purchase Agreement, the Notes and the
Indenture contain the entire agreement among the parties with respect to the
subject matter hereof and supersede any and all prior agreements, understandings
and commitments with respect thereto, whether oral or written; provided,
however, that this Agreement is executed and accepted by the Trustee and the
Escrow Agent subject to all terms and conditions of its acceptance of the trust
under the Indenture, as fully as if said terms and conditions were set forth at
length herein.

 

(f) Amendments. This Agreement may be amended only by a writing signed by duly
authorized representatives of all parties. The Trustee and the Escrow Agent may
execute an amendment to this Agreement only if the requisite consent of each of
the Holders of the Notes required by Article VII of the Indenture has been
obtained, unless no such consent is required by such Section 7.1 of the
Indenture.

 

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(g) Notices. All notices, requests, instructions, orders and other
communications required or permitted to be given or made under this Agreement to
any party hereto shall be delivered in writing by hand delivery or overnight
delivery, or shall be delivered by facsimile or telephonically with machine
confirmation of full delivery not more than 24 hours following such facsimile or
telephonic notice. A notice given in accordance with the preceding sentence
shall be deemed to have been duly given upon the sending thereof. Notices should
be addressed as follows:

 

To the Company:

 

CV Therapeutics, Inc.

3172 Porter Drive

Palo Alto, California 94304

Attention: General Counsel

Facsimile number: (650) 858-0388

Telephone number: (650) 384-8611

 

With a copy (which shall not constitute notice) to:

 

Latham & Watkins LLP

135 Commonwealth Drive

Menlo Park, California 94025

Attention: Alan C. Mendelson, Esq.

Facsimile number: (650) 463-4639

Telephone number: (650) 328-4600

 

To the Trustee or the Escrow Agent:

 

Wells Fargo Bank, National Association

Corporate Trust Services

MAC N9303-110

Sixth and Marquette Avenue

Minneapolis, Minnesota 55479

Attention: Michael T. Lechner

Facsimile number: (612) 667-2160

Telephone number: (612) 316-4305

 

or at such other address, facsimile number or phone number as the specified
entity most recently may have designated in writing in accordance with this
paragraph to the other parties.

 

(h) Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. Delivery of an executed counterpart of a
signature page to this Agreement by facsimile shall be effective as delivery of
a manually executed counterpart of this Agreement.

 

(i) Interpretation. The headings of the sections contained in this Agreement are
solely for convenience or reference and shall not affect the meaning or
interpretation of this Agreement.

 

[Signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day first written above.

 

CV THERAPEUTICS, INC. By:  

/s/    LOUIS G. LANGE

   

Name: Louis G. Lange M.D., Ph.D.

   

Title: Chairman and Chief Executive Officer

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee By:  

/s/    MICHAEL T. LECHNER

   

Name: Michael T. Lechner

   

Title: Assistant Vice President

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Escrow Agent By:  

/s/    MICHAEL T. LECHNER

   

Name: Michael T. Lechner

   

Title: Assistant Vice President