PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 30th day of January,
2001, by and between Triangle Pharmaceuticals, Inc. (the "Company"), a
corporation organized under the laws of the State of Delaware, with its
principal offices at 0 Xxxxxxxxxx Xxxxx, 0000 Xxxxxxxxxx Xxxxx, Xxxxxx,
Xxxxx Xxxxxxxx 00000 and the purchaser whose name and address is set forth
on the signature page hereof (the "Purchaser").
IN CONSIDERATION of the mutual covenants contained in this
Agreement, the Company and the Purchaser agree as follows:
SECTION 1. Authorization of Sale of the Shares. Subject to
the terms and conditions of this Agreement, the Company has authorized the
sale of up to 7,700,000 shares (the "Shares") of common stock, par value
$0.001 per share (the "Common Stock"), of the Company.
SECTION 2. Agreement to Sell and Purchase the Shares. At
the Closing (as defined in Section 3), the Company will sell to the
Purchaser and the Purchaser will buy from the Company, upon the terms and
conditions hereinafter set forth, the number of Shares (at the purchase
price) shown below:
Price Per
Number to Be Share In Aggregate
Purchased Dollars Price
------------ --------- ---------
1,300,000 $6.00 $7,800,000
The Company proposes to enter into this same form of
purchase agreement with certain other investors (the "Other Purchasers")
and expects to complete sales of the Shares to them. The Purchaser and the
Other Purchasers are hereinafter sometimes collectively referred to as the
"Purchasers," and this Agreement and the agreements executed by the Other
Purchasers are hereinafter sometimes collectively referred to as the
"Agreements." The term "Placement Agent" shall mean Banc of America
Securities LLC.
SECTION 3. Delivery of the Shares at the Closing. The
completion of the purchase and sale of the Shares (the "Closing") shall
occur within three business days (or on such other later date as the
Placement Agent and the Company both agree) of the date of receipt by the
Company of confirmation by the Securities and Exchange Commission (the
"Commission") of the Commission's willingness to declare effective the
registration statement to be filed by the Company pursuant to Section 7.1
hereof (the "Registration Statement") at a place and time (the "Closing
Date") to be agreed upon by the Company and the Placement Agent and of
which the Purchasers will be notified by facsimile transmission or
otherwise.
At the Closing, the Company shall deliver to the
Purchaser one or more stock certificates registered in the name of the
Purchaser, or in such nominee name(s) as designated by the Purchaser in
writing, representing the number of Shares set forth in Section 2 above.
The name(s) in which the stock certificates are to be registered are set
forth in the Stock Certificate Questionnaire attached hereto as part of
Appendix I. The Company's obligation to complete the purchase and sale of
the Shares and deliver such stock certificate(s) to the Purchaser at the
Closing shall be subject to the following conditions, any one or more of
which may be waived by the Company: (a) receipt by the Company of same-day
funds in the full amount of the purchase price for the Shares being
purchased hereunder; (b) completion of the purchases and sales under the
Agreements with all of the Other Purchasers; and (c) the accuracy of the
representations and warranties made by the Purchasers and the fulfillment
of those undertakings of the Purchasers to be fulfilled prior to the
Closing. The Purchaser's obligation to accept delivery of such stock
certificate(s) and to pay for the Shares evidenced thereby shall be subject
to the following conditions: (a) the Commission has notified the Company of
the Commission's willingness to declare the Registration Statement
effective on or prior to the 75th day after the date such Registration
Statement was filed by the Company; and (b) the accuracy in all material
respects of the representations and warranties made by the Company herein
and the fulfillment in all material respects of those undertakings of the
Company to be fulfilled prior to Closing. The Purchaser's obligations
hereunder are expressly not conditioned on the purchase by any or all of
the Other Purchasers of the Shares that they have agreed to purchase from
the Company.
SECTION 4. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to, and covenants with, the
Purchaser as follows:
4.1 Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and the Company is qualified to
do business as a foreign corporation in each jurisdiction in which
qualification is required, except where failure to so qualify would not
have a Material Adverse Effect (as defined herein). The Company has only
one subsidiary, which is a direct, wholly-owned subsidiary (the
"Subsidiary") of the Company and which has no material assets, other than
those license agreements described in the Company's 10-K for the year ended
December 31, 1999 (Exhibit A). The Subsidiary is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and is qualified to do business as a foreign corporation in
each jurisdiction in which qualification is required, except where failure
to so qualify would not have a Material Adverse Effect.
4.2 Authorized Capital Stock. Except as disclosed in or
contemplated by the Confidential Private Placement Memorandum dated January
17, 2001 prepared by the Company, including all Exhibits (except Exhibit
G), supplements and amendments thereto (the "Private Placement
Memorandum"), the Company had authorized and outstanding capital stock as
set forth under the heading "Capitalization" in the Private Placement
Memorandum as of the date set forth therein; the issued and outstanding
shares of the Company's Common Stock have been duly authorized and validly
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issued, are fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, were not issued in violation of
or subject to any preemptive rights or other rights to subscribe for or
purchase securities, and conform in all material respects to the
description thereof contained in the Private Placement Memorandum. Except
as disclosed in or contemplated by the Private Placement Memorandum
(including the issuance of options under the Company's 1996 Stock Incentive
Plan and the issuance of shares of Common Stock pursuant to the Company's
Employee Stock Purchase Plan after September 30, 1998), the Company does
not have outstanding any options to purchase, or any preemptive rights or
other rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, shares
of its capital stock, any shares of capital stock of any subsidiary or any
such options, rights, convertible securities or obligations. The
description of the Company's stock, stock bonus and other stock plans or
arrangements and the options or other rights granted and exercised
thereunder, set forth in the Private Placement Memorandum accurately and
fairly presents the information required to be shown with respect to such
plans, arrangements, options and rights.
4.3 Issuance, Sale and Delivery of the Shares. The Shares
have been duly authorized and, when issued, delivered and paid for in the
manner set forth in this Agreement, will be duly authorized, validly
issued, fully paid and nonassessable, and will conform in all material
respects to the description thereof set forth in the Private Placement
Memorandum. No preemptive rights or other rights to subscribe for or
purchase exist with respect to the issuance and sale of the Shares by the
Company pursuant to this Agreement. No stockholder of the Company has any
right (which has not been waived or has not expired by reason of lapse of
time following notification of the Company's intent to file the
Registration Statement) to require the Company to register the sale of any
shares owned by such stockholder under the Securities Act of 1933, as
amended (the "Securities Act"), in the Registration Statement. No further
approval or authority of the stockholders or the Board of Directors of the
Company will be required for the issuance and sale of the Shares to be sold
by the Company as contemplated herein.
4.4 Due Execution, Delivery and Performance of the
Agreements. The Company has full legal right, corporate power and authority
to enter into the Agreements and perform the transactions contemplated
hereby. The Agreements have been duly authorized, executed and delivered by
the Company. The making and performance of the Agreements by the Company
and the consummation of the transactions herein contemplated will not
violate any provision of the organizational documents of the Company or its
Subsidiary and will not result in the creation of any lien, charge,
security interest or encumbrance upon any assets of the Company or its
Subsidiary pursuant to the terms or provisions of, or will not conflict
with, result in the breach or violation of, or constitute, either by itself
or upon notice or the passage of time or both, a default under any
agreement, mortgage, deed of trust, lease, franchise, license, indenture,
permit or other instrument to which the Company or its Subsidiary is a
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party or by which the Company or its Subsidiary or their respective
properties may be bound or affected and in each case which would have a
material adverse effect on the condition (financial or otherwise),
properties, business, prospects or results of operations of the Company and
its Subsidiary taken as a whole (a "Material Adverse Effect") or, to the
Company's knowledge, any statute or any authorization, judgment, decree,
order, rule or regulation of any court or any regulatory body,
administrative agency or other governmental body applicable to the Company
or its Subsidiary or any of its respective properties. No consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the
execution and delivery of this Agreement or the consummation of the
transactions contemplated by this Agreement, except for compliance with the
Blue Sky laws and federal securities laws applicable to the offering of the
Shares. Upon their execution and delivery, and assuming the valid execution
thereof by the respective Purchasers, the Agreements will constitute valid
and binding obligations of the Company, enforceable in accordance with
their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as the indemnification agreements of the
Company in Section 7.3 hereof may be legally unenforceable.
4.5 Accountants. PricewaterhouseCoopers LLP, who has
expressed its opinion with respect to the consolidated financial statements
to be incorporated by reference from the Company's Annual Report on Form
10-K for the year ended December 31, 1999 into the Registration Statement
and the Prospectus which forms a part thereof, are independent accountants
as required by the Securities Act and the rules and regulations promulgated
thereunder (the "Rules and Regulations").
4.6 No Defaults. Except as disclosed in the Private
Placement Memorandum, and except as to defaults, violations and breaches
which individually or in the aggregate would not be material to the Company
or its Subsidiary taken as a whole, neither the Company nor its Subsidiary
is in violation or default of any provision of its certificate of
incorporation or bylaws, or other organizational documents, or in breach of
or default with respect to any provision of any agreement, judgment,
decree, order, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which it is a party or by which it
or any of its properties are bound; and there does not exist any state of
fact which, with notice or lapse of time or both, would constitute an event
of default on the part of the Company or its Subsidiary as defined in such
documents, except such defaults which individually or in the aggregate
would not be material to the Company and its Subsidiary taken as a whole.
4.7 Contracts. The contracts described in the Private
Placement Memorandum that are material to the Company and its Subsidiary
taken as a whole, are in full force and effect on the date hereof; and
neither the Company nor its Subsidiary is, nor to the Company's knowledge
is any other party, in breach of or default under any of such contracts
which would have a Material Adverse Effect.
4.8 No Actions. Except as disclosed in the Private
Placement Memorandum, there are no legal or governmental actions, suits or
proceedings pending or, to the Company's knowledge, threatened to which the
Company or its Subsidiary is or may be a part or of which property owned or
leased by the Company or its Subsidiary is or may be the subject, or
related to environmental or discrimination matters, which actions, suits or
proceedings, individually or in the aggregate, might prevent or might
reasonably be expected to materially and adversely affect the transactions
contemplated by this Agreement or result in a material adverse change in
the condition (financial or otherwise), properties, business, prospects or
results of operations of the Company and its Subsidiary, taken as a whole
(a "Material Adverse Change"); and no labor disturbance by the employees of
the Company or its Subsidiary exists, to the Company's knowledge, or is
imminent which might reasonably be expected to have a Material Adverse
Effect. Except as disclosed in the Private Placement Memorandum, neither
the Company nor its Subsidiary is a party to or subject to the provisions
of any material injunction, judgment, decree or order of any court,
regulatory body administrative agency or other governmental body.
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4.9 Properties. Each of the Company and its Subsidiary has
good and marketable title to all the properties and assets reflected as
owned by it in the consolidated financial statements included in the
Private Placement Memorandum, subject to no lien, mortgage, pledge, charge
or encumbrance of any kind except (i) those, if any, reflected in such
consolidated financial statements, or (ii) those which are not material in
amount and do not adversely affect the use made and promised to be made of
such property by the Company or its Subsidiary. Each of the Company and its
Subsidiary holds its leased properties under valid and binding leases, with
such exceptions as are not materially significant in relation to their
respective businesses. Except as disclosed in the Private Placement
Memorandum, each of the Company and its Subsidiary owns or leases all such
properties as are necessary to its operations as now conducted.
4.10 No Material Change. Since September 30, 2000 and except
as described in or specifically contemplated by the Private Placement
Memorandum, (i) the Company and its Subsidiary have not incurred any
material liabilities or obligations, indirect, or contingent, or entered
into any material verbal or written agreement or other transaction which is
not in the ordinary course of business or which could reasonably be
expected to result in a material reduction in the future earnings of the
Company; (ii) the Company and its Subsidiary have not sustained any
material loss or interference with their businesses or properties from
fire, flood, windstorm, accident or other calamity not covered by
insurance; (iii) the Company and its Subsidiary have not paid or declared
any dividends or other distributions with respect to their capital stock
and none of the Company and its Subsidiary is in default in the payment of
principal or interest on any outstanding debt obligations; (iv) there has
not been any change in the capital stock of the Company or its Subsidiary
other than the sale of the Shares hereunder and shares or options issued
pursuant to employee equity incentive plans or purchase plans approved by
the Company's Board of Directors, or indebtedness material to the Company
or its Subsidiary (other than in the ordinary course of business); and (v)
except for the operating losses and negative cash flow the Company has
continued to incur, there has not been a Material Adverse Change.
4.11 Intellectual Property. Except as disclosed in or
specifically contemplated by the Private Placement Memorandum, (i) the
Company and its Subsidiary own or have obtained valid and enforceable
licenses or options for the inventions, patent applications, patents,
trademarks (both registered and unregistered), tradenames, copyrights and
trade secrets necessary for the conduct of the Company's and its
Subsidiary's respective businesses as currently conducted and as the
Private Placement Memorandum indicates the Company and its Subsidiary
contemplate conducting (collectively, the "Intellectual Property"); and
(ii) to the Company's knowledge (for each of the following subsections (a)
through (e)): (a) there are no third parties who have any ownership rights
to any Intellectual Property that is owned by, or has been licensed to, the
Company or its Subsidiary for the product indications described in the
Private Placement Memorandum that would preclude the Company or its
Subsidiary from conducting their respective businesses as currently
conducted and as the Private Placement Memorandum indicates the Company and
its Subsidiary contemplate conducting, except for the ownership rights of
the owners of the Intellectual Property licensed or optioned by the Company
or its Subsidiary; (b) there are currently no sales of any products that
would constitute an infringement by third parties of any Intellectual
Property owned, licensed or optioned by the Company or its Subsidiary; (c)
there is no pending or threatened action, suit, proceeding or claim by
others challenging the rights of the Company or its Subsidiary in or to any
Intellectual Property owned, licensed or optioned by the Company or its
Subsidiary, other than non-material claims; (d) there is no pending or
threatened action, suit, proceeding or claim by others challenging the
validity or scope of any Intellectual Property owned, licensed or optioned
by the Company, other than non-material claims; and (e) there is no pending
or threatened action, suit, proceeding or claim by others that the Company
infringes or otherwise violates any patent, trademark, copyright, trade
secret or other proprietary right of others, other than non-material
claims.
4.12 Compliance. None of the Company and its Subsidiary has
been advised, nor do they have any reason to believe, that they are not
conducting business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which they are conducting their
business, including, without limitation, all applicable local, state and
federal environmental laws and regulations; except where failure to be so
in compliance would not have a Material Adverse Effect.
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4.13 Taxes. Each of the Company and its Subsidiary has filed
all necessary federal, state and foreign income and franchise tax returns
and has paid or accrued all taxes shown as due thereon, and each of the
Company and its Subsidiary has no knowledge of a tax deficiency which has
been or might be asserted or threatened against it which could have a
Material Adverse Effect.
4.14 Transfer Taxes. On the Closing Date, all stock transfer
or other taxes (other than income taxes) which are required to be paid in
connection with the sale and transfer of the Shares to be sold to the
Purchaser hereunder will be, or will have been, fully paid or provided for
by the Company and all laws imposing such taxes will be or will have been
fully complied with.
4.15 Investment Company. The Company is not an "investment
company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for an investment company, within the meaning of the
Investment Company Act of 1940, as amended.
4.16 Offering Materials. The Company has not distributed and
will not distribute prior to the Closing Date any offering material in
connection with the offering and sale of the Shares other than the Private
Placement Memorandum or any amendment or supplement thereto. The Company
has not in the past nor will it hereafter take any action independent of
the Placement Agent to sell, offer for sale or solicit offers to buy any
securities of the Company which would bring the offer, issuance or sale of
the Shares, as contemplated by this Agreement, within the provisions of
Section 5 of the Securities Act, unless such offer, issuance or sale was or
shall be within the exemptions of Section 4 of the Securities Act.
4.17 Insurance. Each of the Company and its Subsidiary
maintains insurance of the types and in the amounts that the Company
reasonably believes is adequate for its business, including, but not
limited to, insurance covering all real and personal property owned or
leased by the Company or its Subsidiary against theft, damage, destruction,
acts of vandalism and all other risks customarily insured against by
similarly situated companies, all of which insurance is in full force and
effect.
4.18 Contributions. Neither the Company at any time since
its incorporation nor its Subsidiary at any time since it was acquired by
the Company has, directly or indirectly, (i) made any unlawful contribution
to any candidate for public office, or failed to disclose fully any
contribution in violation of law, or (ii) made any payment to any federal
or state governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof.
4.19 Additional Information. The information contained in
the following documents, which the Placement Agent has furnished to the
Purchaser, or will furnish prior to the Closing, is or will be true and
correct in all material respects as of their respective final dates:
(a) the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1999 (without exhibits);
(b) the Company's Proxy Statement for the 2000 Annual
Meeting of Stockholders;
(c) the Company's Quarterly Reports on Form 10-Q for the
fiscal quarters ended March 31, 2000, June 30, 2000 and September
30, 2000 (each without exhibits);
(d) the Company's Current Report on Form 8-K filed with
the Commission on November 3, 2000 (without exhibits);
(e) the Registration Statement;
(f) the Private Placement Memorandum, including all
addenda and exhibits thereto (other than the Appendices); and
(g) all other documents, if any, filed by the Company
with the Securities and Exchange Commission since September 30,
2000 pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
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4.20 Legal Opinion. Prior to the Closing, Xxxxxxx, Xxxxxxx
& Xxxxxxxx, LLP, counsel to the Company, will deliver its legal opinion to
the Placement Agent reasonably satisfactory to the Placement Agent and
counsel to the Placement Agent. Such opinion shall also state that each of
the Purchasers may rely thereon as though it were addressed directly to
such Purchaser.
4.21 Intellectual Property Opinion. Prior to the Closing,
King & Spalding, patent counsel for the Company, will deliver its legal
opinion to the Placement Agent reasonably satisfactory to the Placement
Agent and counsel to the Placement Agent. Such opinion shall state that
each of the Purchasers may rely thereon as though it were addressed
directly to such Purchaser.
4.22 No Integration. Neither the Company nor any of its
affiliates nor any person acting on the Company's behalf has, directly or
indirectly, at any time within the past six (6) months made, nor will any
such party make within six (6) months of the Closing Date, any offer or
sale of any security or solicitation of any offer to buy any security under
circumstances, that in the opinion of the Company's counsel, concurred by
the Placement Agent's counsel, would eliminate the availability of the
exemption from registration under Regulation D under the Securities Act in
connection with the offer and sale of the Securities as contemplated
hereby.
4.23 Certificate. At the Closing, the Company will deliver
to Purchaser a certificate executed by the Chairman of the Board or
President and the chief financial or accounting officer of the Company,
dated the Closing Date, in form and substance reasonably satisfactory to
the Purchasers, to the effect that the representations and warranties of
the Company set forth in this Section 4 are true and correct in all
material respects as of the date of this Agreement and as of the Closing
Date, and the Company has complied with all the agreements and satisfied
all the conditions herein on its part to be performed or satisfied on or
prior to such Closing Date.
SECTION 5. Representations, Warranties and Covenants of
the Purchaser. (a) The Purchaser represents and warrants to, and covenants
with, the Company that: (i) the Purchaser is knowledgeable, sophisticated
and experienced in making, and is qualified to make, decisions with respect
to investments in shares representing an investment decision like that
involved in the purchase of the Shares, including investments in securities
issued by the Company, and has requested, received, reviewed and considered
all information it deems relevant in making an informed decision to
purchase the Shares; (ii) the Purchaser is acquiring the number of Shares
set forth in Section 2 above in the ordinary course of its business and for
its own account for investment only and with no present intention of
distributing any of such Shares or any arrangement or understanding with
any other persons regarding the distribution of such Shares; (iii) the
Purchaser will not, directly or indirectly, offer, sell, pledge, transfer
or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) any of the Shares except in
compliance with the Securities Act and the Rules and Regulations; (iv) the
Purchaser has completed or caused to be completed the Registration
Statement Questionnaire attached hereto as part of Appendix I, for use in
preparation of the Registration Statement, and the answers thereto are true
and correct as of the date hereof and will be true and correct as of the
effective date of the Registration Statement; (v) the Purchaser has, in
connection with its decision to purchase the number of Shares set forth in
Section 2 above, relied solely upon the Private Placement Memorandum and
the documents included therein and the representations and warranties of
the Company contained herein; and (vi) the Purchaser is either a "large
institutional accredited investor" as defined in Rule 501(a)(1), (2), (3),
(7) or (8) (and within the meaning of the SEC No-Action Letters: Black Box,
Inc. (June 26, 1990) and Squadron, Elenoff, Pleasant & Xxxxxx (February 28,
1992)) or is a "qualified institutional buyer" as such term is defined in
Rule 144A(a)(1) under the Securities Act.
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(b) The Purchaser understands that the Shares are being
offered and sold to it in reliance upon specific exemptions from
the registration requirements of the Securities Act, the Rules and
Regulations and state securities laws and that the Company is
relying upon the truth and accuracy of, and the Purchaser's
compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth
herein in order to determine the availability of such exemptions
and the eligibility of the Purchaser to acquire the Shares.
(c) The Purchaser understands that the information
contained in the Private Placement Memorandum is strictly
confidential and proprietary to the Company and has been prepared
from the Company's publicly available documents and other
information and is being submitted to the Purchaser solely for
such Purchaser's confidential use. The Purchaser agrees to use the
information contained in the Private Placement Memorandum for the
sole purpose of evaluating a possible investment in the Shares and
the Purchaser hereby acknowledges that except as required by
applicable securities laws, it is prohibited from reproducing or
distributing the Private Placement Memorandum, this Purchase
Agreement, or any other offering materials, in whole or in part,
or divulging or discussing any of their contents. Further, the
Purchaser understands and expressly agrees that the existence and
nature of all conversations and presentations, if any, regarding
the Company and this offering, as well as any other information
about the Company received by the Purchaser in connection with
this Offering must be kept strictly confidential. The Purchaser
understands that the federal securities laws impose restrictions
on trading based on information regarding this offering. In
addition, the Purchaser hereby acknowledges that unauthorized
disclosure of information regarding this offering may cause the
Company to violate Regulation FD.
(d) The Purchaser understands that its investment in the
Shares involves a significant degree of risk and that the market
price of the Common Stock has been volatile and that no
representation is being made as to the future value of the Common
Stock. The Purchaser has the knowledge and experience in financial
and business matters as to be capable of evaluating the merits and
risks of an investment in the Shares and has the ability to bear
the economic risks of an investment in the Shares.
(e) The Purchaser understands that no United States
federal or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement
of the Shares.
(f) The Purchaser understands that until the Shares may be
sold pursuant to Rule 144 under the Securities Act without any
restriction as to the number of securities as of a particular date
that can then be immediately sold, the Shares may bear a
restrictive legend in substantially the following form (and a stop
transfer order may be placed against transfer of the certificates
for the Shares):
"The securities represented by this certificate have not
been registered under the Securities Act of 1933, as
amended. The securities may not be sold, transferred or
assigned in the absence of an effective registration
statement for the securities under said Act, or an
opinion of counsel, in form, substance and scope
reasonably acceptable to the Company, that registration
is not required under said Act or unless sold pursuant to
Rule 144 under said Act."
(g) The Purchaser's principal executive offices are in the
jurisdiction set forth immediately below the Purchaser's name on
the signature pages hereto.
(h)The Purchaser hereby covenants with the Company not to
make any sale of the Shares under the Registration Statement
without effectively causing the prospectus delivery requirement
under the Securities Act to be satisfied, and the Purchaser
acknowledges and agrees that such Shares are not transferable on
the books of the Company unless the certificate submitted to the
transfer agent evidencing the Shares is accompanied by a separate
Purchaser's Certificate of Subsequent Sale: (i) in the form of
Appendix II hereto, (ii) executed by an officer of, or other
authorized person designated by, the Purchaser, and (iii) to the
effect that (A) the Shares have been sold in accordance with the
Registration Statement, the Securities Act and any applicable
state securities or blue sky laws and (B) the requirement of
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delivering a current prospectus has been satisfied. The Purchaser
acknowledges that there may occasionally be times when the Company
must suspend the use of the prospectus forming a part of the
Registration Statement until such time as an amendment to the
Registration Statement has been filed by the Company and declared
effective by the Commission, or until such time as the Company has
filed an appropriate report with the Commission pursuant to the
Exchange Act. The Purchaser hereby covenants that it will not sell
any Shares pursuant to said prospectus during the period
commencing at the time at which the Company gives the Purchaser
written notice of the suspension of the use of said prospectus and
ending at the time the Company gives the Purchaser written notice
that the Purchaser may thereafter effect sales pursuant to said
prospectus. The Company hereby covenants that it will promptly
notify the Purchaser of the commencement and ending of such
period. The Purchaser further covenants to notify the Company
promptly of the sale of all of its Shares.
(i) The Purchaser further represents and warrants to, and
covenants with, the Company that (i) the Purchaser has full right,
power, authority and capacity to enter into this Agreement and to
consummate the transactions contemplated hereby and has taken all
necessary action to authorize the execution, delivery and
performance of this Agreement, and (ii) upon the execution and
delivery of this Agreement, this Agreement shall constitute a
legal, valid and binding obligation of the Purchaser, enforceable
in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law) and except as the indemnification agreements of the Purchaser
in Section 7.3 hereof may be legally unenforceable.
(j) The Purchaser hereby represents that if the Purchaser
is not a United States person (as such term is defined under
Regulation S of the Securities Act), the Purchaser has satisfied
itself as to the full observance of the laws of its jurisdiction
in connection with any invitation to subscribe for the Shares or
any use of this Agreement, including (i) the legal requirements
within its jurisdiction for the purchase of the Shares, (ii) any
foreign exchange restrictions applicable to such purchase, (iii)
any governmental or other consents that may need to be obtained
and (iv) the income tax and other tax consequences, if any, that
may be relevant to the purchase, holding, redemption, sale or
transfer of the Shares. The Purchaser further represents that its
subscription and payment for, and its continued beneficial
ownership of the Shares, will not violate any applicable
securities or other laws of its jurisdiction.
SECTION 6. Survival of Representations, Warranties and
Agreements. Notwithstanding any investigation made by any party to this
Agreement or by the Placement Agent, all covenants, agreements,
representations and warranties made by the Company and the Purchaser herein
and in the certificates for the Shares delivered pursuant hereto shall
survive the execution of this Agreement, the delivery to the Purchaser of
the Shares being purchased and the payment therefor.
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SECTION 7. Registration of the Shares; Compliance with the
Securities Act.
7.1 Registration Procedures and Expenses. The Company
shall:
(a) as soon as practicable, prepare and file with
the Commission the Registration Statement on
Form S-3 relating to the sale of the Shares by
the Purchaser from time to time on the Nasdaq
National Market or the facilities of any
national securities exchange on which the Common
Stock is then traded or in privately-negotiated
transactions;
(b) use its reasonable efforts, subject to receipt
of necessary information from the Purchasers, to
cause the Commission to notify the Company of
the Commission's willingness to declare the
Registration Statement effective within 75 days
after the Registration Statement is filed by the
Company;
(c) promptly prepare and file with the Commission
such amendments and supplements to the
Registration Statement and the prospectus used
in connection therewith as may be necessary to
keep the Registration Statement effective until
the earlier of (i) two years after the effective
date of the Registration Statement or (ii) the
date on which the Shares may be resold by the
Purchasers without registration by reason of
Rule 144(k) under the Securities Act or any
other rule of similar effect;
(d) furnish to the Purchaser with respect to the
Shares registered under the Registration
Statement (and to each underwriter, if any, of
such Shares) such number of copies of
prospectuses and such other documents as the
Purchaser may reasonably request, in order to
facilitate the public sale or other disposition
of all or any of the Shares by the Purchaser;
provided, however, that the obligation of the
Company to deliver copies of prospectuses to the
Purchaser shall be subject to the receipt by the
Company of reasonable assurances from the
Purchaser that the Purchaser will comply with
the applicable provisions of the Securities Act
and of such other securities or blue sky laws as
may be applicable in connection with any use of
such prospectuses;
(e) file documents required of the Company for
normal blue sky clearance in states specified in
writing by the Purchaser; provided, however,
that the Company shall not be required to
qualify to do business or consent to service of
process in any jurisdiction in which it is not
now so qualified or has not so consented; and
(f) bear all expenses in connection with the
procedures in paragraphs (a) through (e) of this
Section 7.1 and the registration of the Shares
pursuant to the Registration Statement, other
than fees and expenses, if any, of counsel or
other advisers to the Purchaser or the Other
Purchasers or underwriting discounts, brokerage
fees and commissions incurred by the Purchaser
or the Other Purchasers, if any.
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7.2 Transfer of Shares After Registration. The Purchaser
agrees that it will not effect any disposition of the Shares or its right
to purchase the Shares that would constitute a sale within the meaning of
the Securities Act, except as contemplated in the Registration Statement
referred to in Section 7.1, and that it will promptly notify the Company of
any changes in the information set forth in the Registration Statement
regarding the Purchaser or its plan of distribution.
7.3 Indemnification. For the purpose of this Section 7.3:
---------------
(i) the term "Purchaser/Affiliate" shall mean any
affiliates of the Purchaser and any person who
controls the Purchaser or any affiliate of the
Purchaser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange
Act; and
(ii) the term "Registration Statement" shall include
any final prospectus, exhibit, supplement or
amendment included in or relating to, and any
document incorporated by reference in, the
Registration Statement referred to in Section
7.1.
(a) The Company agrees to indemnify and hold harmless each
of the Purchasers and each Purchaser/Affiliate, against any losses, claims,
damages, liabilities or expenses, joint or several, to which such
Purchasers or such Purchaser/Affiliates may become subject, under the
Securities Act, the Exchange Act, or any other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement
of any litigation, if such settlement is effected with the written consent
of the Company), insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, including the
prospectus, financial statements and schedules, and all other documents
filed as a part thereof, as amended at the time of effectiveness of the
Registration Statement, including any information deemed to be a part
thereof as of the time of effectiveness pursuant to paragraph (b) of Rule
430A, or pursuant to Rule 434, of the Rules and Regulations, or the
prospectus, in the form first filed with the Commission pursuant to Rule
424(b) of the Regulations, or filed as part of the Registration Statement
at the time of effectiveness if no Rule 424(b) filing is required (the
"Prospectus"), or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state in any of them a
material fact required to be stated therein or necessary to make the
statements in the Registration Statement or any amendment or supplement
thereto not misleading or in the Prospectus or any amendment or supplement
thereto not misleading in the light of the circumstances under which they
were made, or arise out of or are based in whole or in part on any
inaccuracy in the representations and warranties of the Company contained
in this Agreement, or any failure of the Company to perform its obligations
hereunder or under law, and will reimburse each Purchaser and each such
Purchaser/Affiliate for any legal and other expenses as such expenses are
reasonably incurred by such Purchaser or such Purchaser/Affiliate in
connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided,
however, that the Company will not be liable in any such case to the extent
that any such loss, claim, damage, liability or expense arises out of or is
based upon (i) an untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, the Prospectus or
any amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the
Purchaser expressly for use therein, or (ii) the failure of such Purchaser
to comply with the covenants and agreements contained in Sections 5(h) or
7.2 hereof respecting the sale of the Shares, or (iii) the inaccuracy of
any representations made by such Purchaser herein or (iv) any statement or
omission in any Prospectus that is corrected in any subsequent Prospectus
that was delivered to the Purchaser prior to the pertinent sale or sales by
the Purchaser.
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(b) Each Purchaser will severally, but not jointly,
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, against any losses, claims, damages,
liabilities or expenses to which the Company, each of its directors, each
of its officers who signed the Registration Statement or controlling person
may become subject, under the Securities Act, the Exchange Act, or any
other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Purchaser) insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof as contemplated below) arise out of or are based upon (i) any
failure to comply with the covenants and agreements contained in Sections
5(h) or 7.2 hereof respecting the sale of the Shares or (ii) the inaccuracy
of any representation made by such Purchaser herein or (iii) any untrue or
alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements in the Registration Statement or any amendment or supplement
thereto not misleading or in the Prospectus or any amendment or supplement
thereto not misleading in the light of the circumstances under which they
were made, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any
Purchaser expressly for use therein, and will reimburse the Company, each
of its directors, each of its officers who signed the Registration
Statement or controlling person for any legal and other expense reasonably
incurred by the Company, each of its directors, each of its officers who
signed the Registration Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action.
(c) Promptly after receipt by an indemnified party under
this Section 7.3 of notice of the threat or commencement of any action,
such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 7.3 promptly notify the
indemnifying party in writing thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have
to any indemnified party for contribution or otherwise than under the
indemnity agreement contained in this Section 7.3 or to the extent it is
not prejudiced as a result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying
party will be entitled to participate in, and, to the extent that it may
wish, jointly with all other indemnifying parties similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action
include both the indemnified party, and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a
conflict of interest, based upon the advice of such indemnified party's
counsel, between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that
there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right
to select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying
party will not be liable to such indemnified party under this Section 7.3
for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof unless (i) the indemnified
party shall have employed such counsel in connection with the assumption of
legal defenses in accordance with the proviso to the preceding sentence (it
being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel, approved by such
indemnifying party in the case of paragraph (a), representing the
-12-
indemnified parties who are parties to such action, plus local counsel, if
appropriate) or (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of
action, in each of which cases the reasonable fees and expenses of counsel
shall be at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section
7.3 is required by its terms but is for any reason held to be unavailable
to or otherwise insufficient to hold harmless an indemnified party under
paragraphs (a), (b) or (c) of this Section 7.3 in respect to any losses,
claims, damages, liabilities or expenses referred to herein, then each
applicable indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of any losses, claims,
damages, liabilities or expenses referred to herein (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company
and the Purchaser from the placement of the Common Stock contemplated by
this Agreement 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
the relative fault of the Company and the Purchaser in connection with the
statements or omissions or inaccuracies in the representations and
warranties in this Agreement that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and each Purchaser on the other shall be deemed to be in the same
proportion as the amount paid by such Purchaser to the Company pursuant to
this Agreement for the Shares purchased by such Purchaser that were sold
pursuant to the Registration Statement bears to the difference (the
"Difference") between the amount such Purchaser paid for the Shares that
were sold pursuant to the Registration Statement and the amount received by
such Purchaser from such sale. The relative fault of the Company on the one
hand and each Purchaser on the other shall be determined by reference to,
among other things, whether the untrue or alleged statement of a material
fact or the omission or alleged omission to state a material fact or the
inaccurate or the alleged inaccurate representation and/or warranty relates
to information supplied by the Company or by such Purchaser and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in paragraph (c) of this Section 7.3, any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
paragraph (c) of this Section 7.3 with respect to the notice of the threat
or commencement of any threat or action shall apply if a claim for
contribution is to be made under this paragraph (d); provided, however,
that no additional notice shall be required with respect to any threat or
action for which notice has been given under paragraph (c) for purposes of
indemnification. The Company and each Purchaser agree that it would not be
just and equitable if contribution pursuant to this Section 7.3 were
determined solely by pro rata allocation (even if the Purchaser were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to in this paragraph. Notwithstanding the provisions of this
Section 7.3, no Purchaser shall be required to contribute any amount in
excess of the amount by which the Difference exceeds the amount of any
damages that such Purchaser has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Purchasers' obligations to contribute pursuant to this Section 7.3 are
several and not joint.
7.4 Termination of Conditions and Obligations. The
conditions precedent imposed by Section 5 or this Section 7 upon the
transferability of the Shares shall cease and terminate as to any
particular number of the Shares upon the passage of two years from the
effective date of the Registration Statement covering such Shares or at
such time as an opinion of counsel satisfactory in form and substance to
the Company shall have been rendered to the effect that such conditions are
not necessary in order to comply with the Securities Act.
-13-
7.5 Information Available. So long as the Registration
Statement is effective covering the resale of Shares owned by the Purchaser,
the Company will furnish to the Purchaser:
(a) as soon as practicable (but in the case of the
Company's Annual Report to Stockholders, within
150 days after the end of each fiscal year of
the Company), one copy of (i) its Annual Report
to Stockholders (which Annual Report shall
contain financial statements audited in
accordance with generally accepted accounting
principles in the United States of America by a
firm of certified public accountants of
recognized standing), (ii) if not included in
substance in the Annual Report to Stockholders,
upon the request of the Purchaser, its Annual
Report on Form 10-K, (iii) upon the request of
the Purchaser, each of its Quarterly Reports to
its stockholders and, if not included in
substance in its quarterly report to
stockholders, its quarterly report on Form 10-Q,
(iv) a copy of the Registration Statement (the
foregoing, in each case, excluding exhibits);
(b) upon the request of the Purchaser, all exhibits
excluded by the parenthetical to subparagraph (a)(iv)
of this Section 7.5; and
(c) upon the request of the Purchaser, a reasonable
number of copies of the prospectuses to supply to
any other party requiring such prospectuses;
and the Company, upon the reasonable request of the Purchaser, will meet
with the Purchaser or a representative thereof at the Company's
headquarters to discuss information relevant for disclosure in the
Registration Statement covering the Shares and will otherwise reasonably
cooperate with any Purchaser conducting an investigation for the purpose of
reducing or eliminating such Purchaser's exposure to liability under the
Securities Act, including the reasonable production of information at the
Company's headquarters, subject to appropriate confidentiality limitations.
SECTION 8. Broker's Fee. The Purchaser acknowledges that
the Company intends to pay to the Placement Agent a fee in respect of the
sale of the Shares to the Purchaser. Each of the parties hereto hereby
represents that, on the basis of any actions and agreements by it, there
are no other brokers or finders entitled to compensation in connection with
the sale of the Shares to the Purchaser.
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SECTION 9. Notices. All notices, requests, consents and
other communications hereunder shall be in writing, shall be mailed by
first-class registered or certified airmail, confirmed facsimile or
nationally recognized overnight express courier postage prepaid, and shall
be deemed given when so mailed and shall be delivered as addressed as
follows:
(a) if to the Company, to:
Triangle Pharmaceuticals, Inc.
0 Xxxxxxxxxx Xxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx, Phleger & Xxxxxxxx LLP
0000 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other person at such other place as the
Company shall designate to the Purchaser in writing;
and
(b) if to the Purchaser, at its address as set forth
at the end of this Agreement, or at such other
address or addresses as may have been furnished
to the Company in writing.
SECTION 10. Changes. This Agreement may not be modified or
amended except pursuant to an instrument in writing signed by the Company
and the Purchaser.
SECTION 11. Headings. The headings of the various sections
of this Agreement have been inserted for convenience of reference only and
shall not be deemed to be part of this Agreement.
SECTION 12 . Severability. In case any provision contained
in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby.
SECTION13 . Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York and
the federal law of the United States of America.
SECTION 14 . Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but
all of which, when taken together, shall constitute but one instrument, and
shall become effective when one or more counterparts have been signed by
each party hereto and delivered to the other parties. Facsimile signatures
shall be deemed original signatures.
SECTION 15 . Entire Agreement. This Agreement and the
instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except
as specifically set forth herein or therein, neither the Company nor the
Purchaser makes any representation, warranty, covenant or undertaking with
respect to such matters.
SECTION 16 . Third Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may
any provision hereof be enforced by, any other person.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives as of the
day and year first above written.
TRIANGLE PHARMACEUTICALS, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: President and Chief
Operating Officer
Print or Type:
Name of Purchaser
(Individual or Institution):
Xxxxxx Laboratories
---------------------------------
Name of Individual representing
Purchaser (if an Institution):
Xxxxxxx X. Leiden, M.D., Ph.D.
---------------------------------
Title of Individual representing
Purchaser (if an Institution):
Executive Vice President, Pharmaceuticals
and Chief Scientific Officer
---------------------------------
Signature by:
Individual Purchaser or Individual
representing Purchaser:
/s/ Xxxxxxx X. Leiden
---------------------------------
Address: X-0xx Xxxx. XX0X
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, XX 00000-0000
Telephone: 000-000-0000
Facsimile: 000-000-0000
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