EXHIBIT 10.1
PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 30th day of August, 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 and a purchase agreement with Warburg
Pincus Private Equity VIII, L.P. ("Warburg Pincus") dated August 24, 2001, the
Company has authorized the sale of 28,301,887 shares (the "Shares") of common
stock, par value $0.001 per share (the "Common Stock"), of the Company. The
Company has previously issued 9,628,002 Shares to Warburg Pincus. At the Closing
(as defined in Section 3), the Company will issue 13,013,508 shares to Warburg
Pincus and up to an additional 5,660,377 Shares (the "Additional Shares")
pursuant to this same form of purchase agreement and upon the same terms and
conditions to one or more investors approved by the Board of Directors of the
Company and reasonably acceptable to Warburg Pincus (the "Other Purchasers").
The Purchaser, Warburg Pincus and the Other Purchasers, if any, are hereinafter
sometimes referred 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." If by August 31, 2001,
less than all of the Additional Shares are agreed to be purchased and sold, then
if the Closing occurs, at the Closing, the Company shall sell to Warburg Pincus,
and Warburg Pincus shall purchase, such amount of Additional Shares as shall
remain unsold.
SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SHARES.
At the Closing, 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
SECTION 3. DELIVERY OF THE SHARES AT THE CLOSING.
3.1. CLOSING. The closing (the "Closing") shall take place
at the offices of Xxxxxxx Xxxx & Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX
00000 on the day of the stockholders' meeting of the Company approving the
issuance of the Shares to be issued at the Closing. At the Closing, the
Company shall deliver to each Purchaser a certificate for the number of
Shares being purchased by it at the Closing as set forth in Section 2 hereof
or the comparable provision of the other Agreements (and, if applicable, in
the case of Warburg Pincus, a certificate for the number of any unsold
allotment of Additional Shares as contemplated by
Section 2 hereof), against payment to the Company of the purchase price
therefor set forth opposite the name of such Purchaser in Section 2 hereof or
in the comparable provision of the other Agreements under the caption
"Aggregate Price" (and, if applicable, in the case of Warburg Pincus, the
purchase price for any such unsold allotment of Additional Shares), by wire
transfer to the Company of immediately available funds.
3.2. TERMINATION. The obligations of the parties to effect the
transactions to be effected at the Closing shall terminate if the Closing does
not occur on or before December 31, 2001; provided, however, that such
termination shall not release any party from liability for any breach of this
Agreement by such party that occurs prior to such termination.
3.3. CLOSING CONDITIONS. At the Closing, the Company shall
deliver to each Purchaser one or more stock certificates registered in the name
of such Purchaser, or in such nominee name(s) as designated by such Purchaser in
writing, representing the number of Shares set forth in Section 2 of the
Agreements. 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 Purchasers at the Closing
shall be subject to the following conditions:
(a) receipt by the Company of same-day funds in the full
amount of the purchase price for the Shares being purchased hereunder;
(b) approval by the stockholders of the Company of (i) an
amendment to the certificate of incorporation of the Company to increase the
authorized number of shares of Common Stock to a number at least sufficient to
permit the sales contemplated on the Closing and (ii) the sale of shares to the
Purchasers contemplated at the Closing,
(c) receipt of evidence satisfactory to it that the
Certificate of Amendment of the Company's Second Restated Certificate of
Incorporation (the "Certificate") has been filed with and accepted by the
Secretary of State of the State of Delaware; and
(d) expiration of the waiting period under the
Xxxx-Xxxxx-Xxxxxx AntiTrust Improvements Act of 1976 (the "HSR Waiting Period").
The Purchaser's obligation to accept delivery of such stock
certificate(s) and to pay for the Shares evidenced thereby at the Closing shall
be subject to the following condition:
(e) the accuracy, except any inaccuracies that would not
result in a Material Adverse Effect (as defined in Section 4.4), on and as of
the date of the Closing of the representations and warranties made by the
Company herein.
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 under the other Agreements.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
COMPANY. The Company hereby represents and warrants to, and covenants with, the
Purchaser as follows:
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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, 2000. 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. The
Company and the Subsidiary each have all requisite corporate power and authority
to carry on its business as now conducted.
4.2. AUTHORIZED CAPITAL STOCK. As of August 21, 2001, the
Company had authorized and outstanding capital stock as set forth under the
heading "Capitalization" on Schedule 4.2 hereof, and since such date, except as
contemplated by this Agreement and the other Agreements and except for stock
issuances pursuant to Company equity incentive programs disclosed in or
contemplated by the Company's (i) Annual Report on Form 10-K for the year ended
December 31, 2000, (ii) Current Report on Form 8-K filed with the Securities and
Exchange Commission (the "Commission") on August 7, 2001, (iii) Current Report
on Form 8-K filed with the Commission on August 9, 2001, (iv) Current Report on
Form 8-K filed with the Commission on August 24, 2001; (v) Quarterly Report on
Form 10-Q for the Quarter ended June 30, 2001, (vi) Proxy Statement for its
Annual Meeting of Stockholders on May 18, 2001, and (vii) any disclosure
schedule delivered by the Company to the Purchaser simultaneously with the
execution of this Agreement (collectively, the "Disclosure Documents"), there
have been no additional issuances of Common Stock. The issued and outstanding
shares of the Company's Common Stock have been duly authorized and validly
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 Disclosure Documents. Except as disclosed in or contemplated by
the Disclosure Documents (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
Disclosure Documents 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. Upon filing of
the Certificate with the Secretary of State of the State of Delaware, the Shares
to be issued at the Closing will be duly authorized, and all such Shares when
issued, delivered and paid for in the manner set forth in this Agreement, will
be duly authorized, validly issued, fully paid and nonassessable. No preemptive
rights or other rights (except rights that have been waived by holders of such
rights)
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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 a registration
statement on behalf of the Purchasers pursuant to Section 7.1 hereof (the
"Registration Statement") to require the Company to register the sale of any
securities 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 other than (i) approval by the stockholders
of the increase in authorized Common Stock contemplated by the Certificate and
(ii) as may be required by Rule 4350 of the Nasdaq National Market Qualitative
Listing Requirements.
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 the Subsidiary and will not result in
the creation of any lien, charge, security interest or encumbrance upon any
assets of the Company or the 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 the Subsidiary is a party or
by which the Company or the 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 the 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 the 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 (i) compliance with the Blue Sky laws
and federal securities laws applicable to the offering of the Shares; (ii) the
approval by the stockholders of the Company of the increase in authorized Common
Stock contemplated by the Certificate and of the issuance of the Shares to be
issued at the Closing pursuant to the terms of this Agreement, (iii) the filing
of the Certificate with the Secretary of State of the State of Delaware; and
(iv) expiration of the HSR Waiting Period. 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 7.4 hereof may be legally unenforceable.
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4.5. ACCOUNTANTS. PricewaterhouseCoopers LLP, who has
expressed its opinion with respect to the consolidated financial statements in
the Company's Annual Report on Form 10-K for the year ended December 31, 2000
(the "Financial Statements"), are independent accountants as required by the
Securities Act and the rules and regulations promulgated thereunder (the "Rules
and Regulations").
4.6. FINANCIAL STATEMENTS. The financial statements of the
Company included in the Disclosure Documents present fairly, in all material
respects, the consolidated financial condition of the Company, results of
operations and cash flows as of the dates and for the periods indicated. Such
financial statements are fairly presented, in all material respects, in
accordance with generally accepted accounting principles (except in the case of
quarterly financial statements for the absence of footnote disclosure and
subject, in the case of interim periods, to normal year-end adjustments which,
individually, and in the aggregate, will not be material).
4.7. NO DEFAULTS. Except as disclosed in the Disclosure
Documents, and except as to defaults, violations and breaches which individually
or in the aggregate would not be material to the Company or the Subsidiary taken
as a whole, neither the Company nor the 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 the Subsidiary as
defined in such documents, except such defaults which individually or in the
aggregate would not be material to the Company and the Subsidiary taken as a
whole.
4.8. CONTRACTS. The contracts described in the Disclosure
Documents that are material to the Company and the Subsidiary taken as a whole,
are in full force and effect on the date hereof; and neither the Company nor the
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.
4.9. NO ACTIONS. Except as disclosed in the Disclosure
Documents, there are no legal or governmental actions, suits or proceedings
pending or, to the Company's knowledge, threatened to which the Company or the
Subsidiary is or may be a part or of which property owned or leased by the
Company or the 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 the 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 Disclosure Documents,
neither the Company nor the 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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4.10. 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, subject to no lien, mortgage,
pledge, charge or encumbrance of any kind except (i) those, if any, reflected in
such 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 the 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 Disclosure Documents, each of the Company and its Subsidiary owns
or leases all such properties as are necessary to its operations as now
conducted.
4.11. NO MATERIAL CHANGE. Since June 30, 2001 and except as
described in or specifically contemplated by the Disclosure Documents, (i) the
Company and the 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 the 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 the Subsidiary have not paid or declared any
dividends or other distributions with respect to their capital stock and none of
the Company and the 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 the Subsidiary other than the sale of the
Shares hereunder or under the other Agreements 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 the
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.
4.12. INTELLECTUAL PROPERTY. Except as disclosed in or
specifically contemplated by Disclosure Documents, (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 the Subsidiary's respective businesses as currently
conducted and as the Disclosure Documents indicate 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 the Subsidiary for the product indications described in the Disclosure
Documents that would preclude the Company or the Subsidiary from conducting
their respective businesses as currently conducted and as the Disclosure
Documents indicate the Company and the Subsidiary contemplate conducting, except
for the ownership rights of the owners of the Intellectual Property licensed or
optioned by the Company or the 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 the
Subsidiary; (c) there is no pending or threatened action, suit, proceeding or
claim by others challenging the rights of the Company or the Subsidiary in or to
any Intellectual Property owned, licensed or optioned by the Company or
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the 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
or the Subsidiary, other than non-material claims; and (e) there is no pending
or threatened action, suit, proceeding or claim by others that the Company or
the Subsidiary infringes or otherwise violates any patent, trademark, copyright,
trade secret or other proprietary right of others, other than non-material
claims.
4.13. COMPLIANCE. Neither the Company nor the 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.
4.14. TAXES. Each of the Company and the 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
the 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.
4.15. 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.
4.16. NASDAQ NATIONAL MARKET. The Company's Common Stock is
registered pursuant to Section 12(g) of the Exchange Act and is listed on the
Nasdaq National Market, and the Company has taken no action designed to, or
likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act or de-listing the Common Stock from the Nasdaq National
Market, nor has the Company received any notification that the Commission or the
National Association of Securities Dealers, Inc. is contemplating terminating
such registration or listing.
4.17. NO MANIPULATION OF STOCK. The Company has not taken and
will not take, in violation of applicable law, any action designed to or that
might reasonably be expected to cause or result in stabilization or manipulation
of the price of the Common Stock to facilitate the transactions contemplated
hereby or the sale or resale of the shares of Common Stock.
4.18. 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.
4.19. 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. The Company has not in the
past nor will it hereafter take any action to sell, offer for sale or solicit
offers to buy any securities of the Company which would bring the offer,
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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.
4.20. INSURANCE. Each of the Company and the 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 the
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.
4.21. CONTRIBUTIONS. Neither the Company at any time since its
incorporation nor the 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.
4.22. DISCLOSURE DOCUMENTS. The information contained or
incorporated by reference in the Disclosure Documents was true and correct in
all material respects as of the respective dates of the filing thereof with the
Commission; and, as of such respective dates, the Disclosure Documents did not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except to
the extent updated or superseded by any report subsequently filed by the Company
with the Commission.
4.23. LEGAL OPINION. Prior to the Closing, Smith, Anderson,
Blount, Dorsett, Xxxxxxxx & Xxxxxxxx, L.L.P., counsel to the Company, will
deliver its legal opinion to the Purchaser or Purchasers purchasing stock at the
Closing reasonably satisfactory to Warburg Pincus and counsel to Warburg Pincus,
relating to the due organization and standing of the Company and the Subsidiary,
the due authorization, execution and delivery of the Agreements, the absence of
conflicts between the Agreements and other material agreements of the Company,
and the status of the Shares to be delivered at the Closing as duly authorized,
validly issued, fully paid and non-assessable shares of Common Stock of the
Company, free of any pre-emptive rights.
4.24. 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 second 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
Purchaser'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.
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4.25. 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, except as provided in
Section 3.4(f)(i), 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 the
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 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 and (vi) during the period beginning on the date hereof and
continuing until the date on which the Registration Statement referred to in
Section 7 hereof is declared effective by the Commission (such period shall be
referred to as the "Closing Period") the Purchaser has not engaged, nor will
engage in, any hedging or other transaction which is designed to or reasonably
expected to lead to or result in a disposition during the Closing Period of any
Shares or other securities of the Company ("Company Securities") owned by the
Purchaser (or as to which the Purchaser has a purchase obligation) even if such
securities would be disposed of by someone other than the Purchaser. Such
prohibited hedging or other transactions would include without limitation any
short sale (whether or not against the box) or any purchase, sale or grant of
any right (including without limitation any put or call option) with respect to
any Company Securities or with respect to any security (other than a broad-based
market basket or index) that includes, relates to or derives any significant
part of its value from Company Securities..
(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,
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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 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.
(d) 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.
(e) 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."
(f) The Purchaser's principal executive offices are in the
jurisdiction set forth immediately below the Purchaser's name on the signature
pages hereto.
5.2. The Purchaser hereby covenants with Company 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
(i) pursuant to an effective registration statement under the Securities Act or
(ii) pursuant to an available exemption from registration under the Securities
Act and applicable state securities laws and, if requested by the Company, upon
delivery by such Purchaser of an opinion of counsel reasonably satisfactory to
the Company to the effect that the proposed transfer is exempt from registration
under the Securities Act and applicable state securities laws. The Purchaser
acknowledges that (i) any transfer or purported transfer of the Shares in
violation of this Section 5 shall be voidable by the Company, (ii) the Company
shall not register any transfer of the Shares in violation of this Section 5,
and (iii) the Company may instruct any transfer agent for the Company to place
stop transfer orders as may be required on the transfer books of the Company in
order to ensure compliance with the provisions of this Section 5.
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(a) 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 7.4
hereof may be legally unenforceable.
(b) 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, the respective representations and warranties given by the parties
hereto shall survive the Closing and the consummation of the transactions
contemplated herein for a period of one year, without regard to any
investigation made by any party. The other covenants and agreements contained
herein shall survive for the period specified therein, or if not specified, for
a period of two years.
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 and in no event later than ten
days following the Closing or, in case the Company's
Stockholders do not approve sale of shares at the
Closing, 10 days following a stockholder meeting at which
such action was taken, or if, no such meeting is held
prior to December 31, 2001, within 10 days after such
date, 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
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Commission's willingness to declare the Registration
Statement effective within 60 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
restriction by the volume limitations of Rule 144(e)
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.
(g) advise each Purchaser, promptly after it shall receive
notice or obtain knowledge of the issuance of any stop
order by the Commission delaying or suspending the
effectiveness of the Registration Statement or of the
initiation or threat of any proceeding for that purpose;
and it will promptly use its reasonable best efforts to
prevent the issuance of any stop order or to obtain its
withdrawal at the earliest possible moment if such stop
order should be issued.
7.2. SUSPENSION. (a) Except in the event that paragraph (b)
below applies, the Company shall (i) prepare and file from time to time with
the Commission a post-effective amendment to the Registration Statement or a
supplement to the related prospectus or a
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supplement or amendment to any document incorporated therein by reference or
file any other required document so that such Registration Statement will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and so that, as thereafter delivered to the
purchasers of Shares being sold thereunder, such prospectus will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; (ii)
provide the Purchaser copies of any documents filed pursuant to Section
7.2(a)(i); and (iii) inform the Purchaser that the Company has complied with
its obligations in Section 7.2(a)(i) (or that, if the Company has filed a
post-effective amendment to the Registration Statement which has not yet been
declared effective, the Company will notify the Purchaser to that effect,
will use its reasonable best efforts to secure the effectiveness of such
post-effective amendment as promptly as possible and will promptly notify the
Purchaser pursuant to Section 7.2(a)(i) hereof when the amendment has become
effective).
(b) Subject to paragraph (c) below, in the event (i) of any
request by the Commission or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement for amendments
or supplements to a Registration Statement or related prospectus or for
additional information; (ii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any proceedings
for that purpose; (iii) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of any of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; (iv) of any event or
circumstance which, upon the advice of its counsel, necessitates the making of
any changes in the Registration Statement or prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case of the prospectus, it will not contain any untrue statement of a
material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (v) the Company
determines in good faith that offers and sales pursuant to the Registration
Statement should not be made by reason of the presence of material undisclosed
circumstances or developments with respect to which the disclosure that would be
required in such a Registration Statement or related prospectus is premature,
would have an adverse effect on the Company or is otherwise inadvisable, then
the Company shall deliver a certificate in writing to each Purchaser (the
"SUSPENSION NOTICE") to the effect of the foregoing and, upon receipt of such
Suspension Notice, such Purchaser will refrain from selling any Registrable
Securities pursuant to the Registration Statement (a "SUSPENSION") until such
Purchaser's receipt of copies of a supplemented or amended Prospectus prepared
and filed by the Company, or until it is advised in writing by the Company that
the current prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in any such prospectus. In the event of any Suspension, the Company will use its
reasonable efforts to cause the use of the prospectus so suspended to be resumed
as soon as reasonably practicable after the delivery of a Suspension Notice to
the Purchaser. In addition to and without limiting any other remedies
(including, without limitation, at law or at equity) available to such
Purchaser, such
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Purchaser shall be entitled to specific performance in the event that the
Company fails to comply with the provisions of this Section 7.2(b).
(c) Notwithstanding the foregoing paragraphs of this Section
7.2, the Purchaser shall not be prohibited from selling Shares under the
Registration Statement as a result of Suspensions on more than two occasions of
not more than 60 days each in any twelve month period, unless, in the good faith
judgment of the Company's Board of Directors, upon the written opinion of
counsel, the sale of Shares under the Registration Statement in reliance on this
paragraph 7.2(c) would be reasonably likely to cause a violation of the
Securities Act or the Exchange Act and result in liability to the Company.
(d) Provided that a Suspension is not then in effect, each
Purchaser may sell Shares under the Registration Statement, provided that it
arranges for delivery of a current prospectus to the transferee of such Shares.
Upon receipt of a request therefor, the Company will provide an adequate number
of current prospectuses to the Purchaser and to supply copies to any other
parties requiring such prospectuses. The Purchaser agrees not to take any action
with respect to any distribution deemed to be made pursuant to such Registration
Statement that constitutes a violation of Regulation M under the Exchange Act or
any other applicable rule, regulation or law.
(e) The Purchaser acknowledges and agrees that the Shares sold
pursuant to the Registration Statement are not transferable on the books of the
Company unless the stock certificate submitted to the transfer agent evidencing
such Shares is accompanied by a certificate reasonably satisfactory to the
Company to the effect that (i) the Shares have been sold in accordance with such
Registration Statement and (ii) the requirement of delivering a current
prospectus has been satisfied.
(f) In the event of a sale of Shares by the Purchaser pursuant
to the Registration Statement, the Purchaser shall deliver to the Company's
transfer agent an appropriate notification of the sale, so that the Shares may
be properly transferred.
7.3. COMPANY REGISTRATION.
(a) If the Company shall determine to register any of its
equity securities either for its own account or for the account of other
stockholders, other than the Registration Statement described in Sections 7.1
and 7.2 above, a registration relating solely to employee benefit plans, or a
registration relating solely to a Rule 145 transaction, or a registration on any
registration form which does not permit secondary sales or does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Shares, the Company will:
(i) promptly give to each Purchaser, and in case of any
disposition of its Shares to a third party who agrees to be bound by
the provisions of this Section 7.3 and makes the representations
contained in Section 5 hereof (in each case the "Transferee" and
together with the Purchasers, the "Holders"), a written notice thereof
(which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable blue
sky or other state securities laws); and
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(ii) if so requested by the Holders of at least 51% or
more of the Shares, use reasonable efforts to include in such
registration (and any related qualification under blue sky laws or
other compliance), and in any underwriting involved therein, all the
Shares (or in the case of Warburg Pincus any other shares of Common
Stock which it may then hold) specified in a written request or
requests, made by the Holders within ten (10) days after receipt of the
written notice from the Company described in clause (i) above, except
as set forth in Section 7.3(b) below. Such written request may specify
all or a part of the Holders' Shares. In the event any Holder requests
inclusion in a registration pursuant to this Section 7.3 in connection
with a distribution of shares of Common Stock to its partners, the
registration shall provide for the resale by such partners, if
requested by such Holder.
(b) UNDERWRITING. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 7.3(a)(i). In such event, the right of each of the
Holders to registration pursuant to this Section 7.3 shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's shares of Common Stock in the underwriting to the extent provided
herein. The Holders whose shares are to be included in such registration shall
(together with the Company and the other stockholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for underwriting by the Company. Notwithstanding any other provision of
this Section 7.3, if the representative determines that marketing factors
require a limitation on the number of shares to be underwritten, the
representative may limit the number of Shares to be included in the registration
and underwriting. The Company shall so advise all holders of securities
requesting registration, and the number of shares of securities that are
entitled to be included in the registration and underwriting shall be allocated
in the following manner: The securities of the Company held by officers,
directors and other stockholders of the Company (other than Shares and other
than securities held by holders who have contractual rights to participate in or
demand such registration ("DEMANDING HOLDERS")) shall be excluded from such
registration and underwriting to the extent required by such limitation, and, if
a limitation on the number of shares is still required, the number of shares
that may be included in the registration and underwriting by each of the Holders
and Demanding Holders shall be reduced (to the extent that such reduction with
respect to the Demanding Holder does not conflict with or violate existing
contractual rights), on a pro rata basis (based on the number of shares held by
such Holder), by such minimum number of shares as is necessary to comply with
such limitation. If any of the Holders or any officer, director or other
stockholder disapproves of the terms of any such underwriting, he may elect to
withdraw therefrom by written notice to the Company and the underwriter. Any
shares of Common Stock or other securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
7.4. INDEMNIFICATION. For the purpose of this Section 7.4:
(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
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(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 or Section 7.3.
(a) The Company agrees to indemnify and hold harmless each of
the Purchasers and each Purchaser/Affiliate, and in the case of an underwritten
offering described in Section 7.3(b) each underwriter and each person who
controls such underwriter, against any losses, claims, damages, liabilities or
expenses, joint or several, to which such Purchasers, such Purchaser/Affiliates
or such underwriter 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, and if applicable, each underwriter for any legal and other
expenses as such expenses are reasonably incurred by such Purchaser or such
Purchaser/Affiliate or such underwriter 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 Section 5 hereof respecting the sale of the Shares, or (iii) 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.
(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,
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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 Section 5 hereof respecting the sale of the Shares or (ii) 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 provided, however that the obligation of
each Purchaser to indemnify the Company shall be limited to the net proceeds
received by such purchaser from the sale of its shares.
(c) Promptly after receipt by an indemnified party under this
Section 7.4 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 7.4 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 7.4 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
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7.4 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 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 7.4 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 7.4 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 7.4, 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
7.4 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 7.4 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
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this paragraph. Notwithstanding the provisions of this Section 7.4, 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 7.4 are several and not joint.
7.5. 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.
7.6. 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 7.6; 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. COVENANTS.
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8.1. COVENANT PENDING THE CLOSING. Between the date of this
Agreement and the date of the Closing, the Company will advise the Purchasers
prior to the Closing of any action or event of which it becomes aware which has
the effect of making incorrect, in any material respect, any of the Company's
representations or warranties or which has the effect of rendering any of the
Company's covenants incapable of performance. Between the date of this Agreement
and the date of the Closing, each party to the Agreements shall use its
reasonable efforts to fulfill or cause the fulfillment of the conditions to the
consummation of the transactions contemplated by the Agreements at the Closing
as promptly as practicable.
8.2. PROXY STATEMENT. The Company shall use its reasonable
efforts to (a) prepare and file with the Commission, promptly after the date
hereof, preliminary proxy materials with respect to a meeting of the
stockholders for the purpose of approving (a) the increase in authorized Common
Stock contemplated by the Certificate and (b) the issuance of Shares to be
issued at the Closing as contemplated by this Agreement. Promptly after comments
are received from the Commission with respect to the preliminary proxy materials
and after the furnishing by the Company of all information required to be
contained therein, the Company shall file with the Commission the definitive
proxy statement and (b) acting through its Board of Directors, (i) call a
special meeting of the holders of the Company's Common Stock for the purpose of
voting upon the approval of the Certificate and the issuance of Shares to be
issued at the Closing as contemplated by this Agreement and (ii) include in the
proxy statement the recommendation of its Board of Directors that holders of the
Company's Common Stock approve the Certificate and such issuance as contemplated
by this Agreement.
8.3. HSR ACT FILING. The Company and Warburg Pincus shall, as
soon as practicable after the date of this Agreement, file Notification and
Report Forms under the HSR Act with the Federal Trade Commission (the "FTC") and
the Antitrust Division of the Department of Justice (the "Antitrust Division")
relating to the transaction contemplated by this Agreement and shall use their
reasonable efforts to respond as promptly as practicable to all inquiries
received from the FTC or the Antitrust Division for additional information or
documentation.
SECTION 9. BROKER'S FEE. 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, except Banc of America Securities, LLC, whose fees
shall be paid by the Company.
SECTION 10. 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
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Attention: Xxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to:
Smith, Anderson, Blount, Dorsett,
Xxxxxxxx & Xxxxxxxx, L.L.P.
Xxx Xxxxxx Xxx 0000
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, 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 11. CHANGES. This Agreement may not be modified or
amended except pursuant to an instrument in writing signed by the Company and
the Purchaser.
SECTION 12. 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 13. 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.
SECTION 14. 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 15. 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 16. 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.
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SECTION 17. 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.
(SIGNATURES ON FOLLOWING PAGE)
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(SIGNATURE PAGE TO THE
PURCHASE AGREEMENT)
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:
---------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President and Chief Operating Officer
By:
---------------------------------------------
Name:
----------------------------
Title:
----------------------------
Address:
--------------------------
Telephone:
--------------------------
Facsimile:
--------------------------
Attention:
--------------------------
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Schedule of Purchasers
Purchaser No. of Shares
--------- -------------
Caduceus Capital II, L.P. 540,000
PW Eucalyptus Fund, L.L.C. 940,000
PW Eucalyptus Fund, Ltd. 147,000
Q Finance, Inc 2,275,000
Warburg Pincus Private Equity VIII, L.P. 13,756,885
Winchester Global Trust Company Limited as Trustee for 1,015,000
Caduceus Capital Trust
TOTAL 18,673,885
SUMMARY INSTRUCTION SHEET FOR PURCHASER
(to be read in conjunction with the entire
Purchase Agreement which follows)
A. Complete the following items on the
Purchase Agreements:
1. Page 23 - Signature:
(i) Name of Purchaser (Individual or Institution)
(ii) Name of Individual representing Purchaser (if an
Institution)
(iii) Title of Individual representing Purchaser (if an
Institution)
(iv) Signature of Individual Purchaser or Individual
representing Purchaser
2. Appendix I - Stock Certificate Questionnaire:
Provide the information requested by the Stock Certificate
Questionnaire.
3. Return the properly completed and signed
Purchase Agreements
including the properly completed Appendix I to:
Triangle Pharmaceuticals, Inc.
0 Xxxxxxxxxx Xxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Esq.
B. Instructions regarding the transfer of funds for the purchase of Shares
will be sent by facsimile to the Purchaser by the Company at a later
date.
C. Upon the resale of the Shares by the Purchasers after the Registration
Statement covering the Shares is effective, as described in the
Purchase Agreement, the Purchaser:
(i) must deliver a current prospectus of the Company to
the buyer (prospectuses must be obtained from the
Company at the Purchaser's request); and
(ii) must send a letter in the form of Appendix II to the
Company so that the Shares may be properly
transferred.
SCHEDULE 4.2
------------
CAPITALIZATION AS OF AUGUST 21, 2001
48,381,918 shares of common stock issued and outstanding
APPENDIX I
TRIANGLE PHARMACEUTICALS, INC.
STOCK CERTIFICATE QUESTIONNAIRE
-------------------------------
Pursuant to Section 3 of the Agreement, please provide us with
the following information:
1 The exact name that your Shares are to be registered in
(this is the name that will appear on your stock
certificate(s)). You may use a nominee name if
appropriate: _______________________
2 The relationship between the Purchaser of the Shares and
the Registered Holder listed in response to item 1 above: _______________________
3 The mailing address of the Registered Holder listed in
response to item 1 above: _______________________
_______________________
_______________________
_______________________
4 The Social Security Number or Tax Identification Number
of the Registered Holder listed in response to item 1 above: _______________________
APPENDIX I
TRIANGLE PHARMACEUTICALS, INC.
REGISTRATION STATEMENT QUESTIONNAIRE
------------------------------------
In connection with the preparation of the Registration Statement,
please provide us with the following information:
1. Pursuant to the "Selling Shareholder" section of the Registration
Statement, please state your or your organization's name exactly as it should
appear in the Registration Statement:
2. Please provide the number of shares that you or your organization
will own immediately after Closing, including those Shares purchased by you or
your organization pursuant to this
Purchase Agreement and those shares purchased
by you or your organization through other transactions:
3. Have you or your organization had any position, office or other
material relationship within the past three years with the Company or its
affiliates?
_____ Yes _____ No
If yes, please indicate the nature of any such relationships below:
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4. Are you (i) an NASD Member (see definition), (ii) a Controlling (see
definition) shareholder of an NASD Member, (iii) a Person Associated with a
Member of the NASD (see definition), or (iv) an Underwriter or a Related Person
(see definition) with respect to the proposed offering; or (b) do you own any
shares or other securities of any NASD Member not purchased in the open market;
or (c) have you made any outstanding subordinated loans to any NASD Member?
Answer: [ ] Yes [ ] No If "yes," please describe below
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NASD MEMBER. The term "NASD member" means either any broker or dealer
admitted to membership in the National Association of Securities Dealers, Inc.
("NASD"). (NASD Manual, By-laws Article I, Definitions)
CONTROL. The term "control" (including the terms "controlling,"
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power, either individually or with others, to direct or cause
the direction of the management and policies of a person, whether through the
ownership of voting securities, by contract, or otherwise. (Rule 405 under the
Securities Act of 1933, as amended)
PERSON ASSOCIATED WITH A MEMBER OF THE NASD. The term "person
associated with a member of the NASD" means every sole proprietor, partner,
officer, director, branch manager or executive representative of any NASD
Member, or any natural person occupying a similar status or performing similar
functions, or any natural person engaged in the investment banking or securities
business who is directly OR INDIRECTLY controlling or controlled by a NASD
Member, whether or not such person is registered or exempt from registration
with the NASD pursuant to its bylaws. (NASD Manual, By-laws Article I,
Definitions)
UNDERWRITER OR A RELATED PERSON. The term "underwriter or a related
person" means, with respect to a proposed offering, underwriters, underwriters'
counsel, financial consultants and advisors, finders, members of the selling or
distribution group, and any and all other persons associated with or related to
any of such persons. (NASD Interpretation)
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