FORM OF
PURCHASE AGREEMENT
THIS AGREEMENT is made as of the __ day of December, 1998, by and
among 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
3,500,000 shares (the "Shares") of the 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
--------- ------- -----
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 Vector Securities International, Inc.
SECTION 3. Delivery of the Shares at the Closing. The completion of
the purchase and sale of the Shares (the "Closing") shall occur as soon as
practicable and as agreed by the parties hereto following notification by the
Securities and Exchange Commission (the "Commission") to the Company 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
60th 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 and each of its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and the Company and
each of its subsidiaries 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) on the
Company.
4.2. Authorized Capital Stock. Except as disclosed in or
contemplated by the Confidential Private Placement Memorandum dated December 1,
1998 prepared by the Company, including all Exhibits (except Exhibit J),
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 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
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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 any of its subsidiaries and will not
result in the creation of any lien, charge, security interest or encumbrance
upon any assets of the Company 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 any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or any of 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 subsidiaries, 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 any of its subsidiaries or any of their 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
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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 have expressed
their 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, 1997 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 and its
subsidiaries, taken as a whole, neither the Company nor any of its subsidiaries
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 any of
its subsidiaries as defined in such documents, except such defaults which
individually or in the aggregate would not be material to the Company and its
subsidiaries, taken as a whole.
4.7. Contracts. The contracts described in the Private Placement
Memorandum that are material to the Company and its subsidiaries, taken as a
whole, are in full force and effect on the date hereof; and neither the Company
nor any of its subsidiaries, nor, to the Company's knowledge, any other party is
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 any
of its subsidiaries is or may be a part or of which property owned or leased by
the Company or any of its subsidiaries 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 subsidiaries, taken as a whole (a "Material
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Adverse Change"); and no labor disturbance by the employees of the Company or
any of its subsidiaries 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 any of
its subsidiaries is 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.
4.9. Properties. Each of the Company and its subsidiaries has good
and marketable title to all the properties and assets reflected as owned by them
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 subsidiaries. Each of the Company and its subsidiaries 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
subsidiaries owns or leases all such properties as are necessary to its
operations as now conducted.
4.10. No Material Change. Since September 30, 1998 and except as
described in or specifically contemplated by the Private Placement Memorandum,
(i) neither the Company nor its subsidiaries has 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 or its subsidiaries;
(ii) neither the Company nor its subsidiaries has sustained any material loss or
interference with its businesses or properties from fire, flood, windstorm,
accident or other calamity not covered by insurance; (iii) neither the Company
nor its subsidiaries has paid or declared any dividends or other distributions
with respect to its capital stock and neither the Company nor its subsidiaries
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 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 (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
subsidiaries 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 subsidiaries' respective businesses as
currently conducted and as the Private Placement Memorandum indicate the Company
and its subsidiaries 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
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who have any ownership rights to any Intellectual Property that is owned by, or
has been licensed to, the Company or its subsidiaries for the product
indications described in the Private Placement Memorandum that would preclude
the Company or its subsidiaries from conducting their respective businesses as
currently conducted and as the Private Placement Memorandum indicates the
Company and its subsidiaries contemplate conducting, except for the ownership
rights of the owners of the Intellectual Property licensed or optioned by the
Company or its subsidiaries; (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 subsidiaries; (c)
there is no pending or threatened action, suit, proceeding or claim by others
challenging the rights of the Company or its subsidiaries in or to any
Intellectual Property owned, licensed or optioned by the Company or its
subsidiaries, 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 its subsidiaries, other than non-material claims; and (e) there is no pending
or threatened action, suit, proceeding or claim by others that the Company or
its subsidiaries infringe or otherwise violate any patent, trademark, copyright,
trade secret or other proprietary right of others, other than non-material
claims.
4.12. Compliance. Neither the Company nor any of its subsidiaries
has been advised, or has reason to believe, that it is not conducting business
in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting 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.
4.13. Taxes. Each of the Company and its subsidiaries 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 neither the Company nor its
subsidiaries has 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
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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 subsidiaries 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
subsidiaries 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 subsidiaries at any time since they were 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 Company represents and warrants
that 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 Current Reports on Form 8-K filed with the
Commission on September 11, 1997, November 12, 1997 and April
2, 1998;
(b) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 (without exhibits);
(c) the Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1998, June 30, 1998 and September 30,
1998;
(d) the Company's Proxy Statement for the 1998 Annual Meeting of
Stockholders;
(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 December 31, 1997
pursuant to the reporting
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requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
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. If requested by the Placement
Agent, 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. 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 (as defined for
purposes of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976 and the
regulations thereunder) 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 Act and the Rules and
Regulations; (iv) the Purchaser has completed or caused to be completed the
Registration Statement Questionnaire and the Stock Certificate Questionnaire,
both attached hereto as 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
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Memorandum and the documents included therein and the representations and
warranties of the Company contained herein; and (vi) the Purchaser is an
"accredited investor" within the meaning of Rule 501 of Regulation D promulgated
under the Securities Act.
(b) The Purchaser hereby covenants with the Company not to make any
sale of the Shares without satisfying the prospectus delivery requirement under
the Securities Act, 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 officer's certificate: (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 the Rules and
Regulations and any applicable state securities or blue sky laws and (B) the
requirement of 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 Purchaser further covenants to notify the Company promptly of
the sale of all of its Shares.
(c) 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
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.
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 through the
automated quotation system of the Nasdaq National Market or
the facilities of any national securities exchange on which
the Company's 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 60 days after the
Registration Statement is filed by the Company;
(c) 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)
twenty-four months 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 reasonable 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
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(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.
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 include the Purchaser and
any affiliate of such Purchaser; and
(ii) the term "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or
relating to the Registration Statement referred to in Section
7.1.
(a) The Company agrees to indemnify and hold harmless each of the
Purchasers and each person, if any, who controls any Purchaser within the
meaning of the Securities Act, against any losses, claims, damages, liabilities
or expenses, joint or several, to which such Purchasers or such 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 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 any of them, in light of the
circumstances under which they were made, not misleading, 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
-11-
this Agreement, or any failure of the Company to perform its obligations
hereunder or under law, and will reimburse each Purchaser and each such
controlling person for any legal and other expenses as such expenses are
reasonably incurred by such Purchaser or such controlling person 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(b) or 7.2 hereof respecting 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.
(b) Each Purchaser will severally 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 the Securities 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(b) 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 therein not misleading, 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
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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 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 indemnified
parties who are parties to such action) or (ii) the indemnified 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 Common Stock 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 which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The respective 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
-13-
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 such Selling Stockholders and each Purchaser 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 twenty-four months 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.
7.5. 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 after available (but in the case of the
Company's Annual Report to Stockholders, within 120 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
-14-
audited in accordance with generally accepted accounting
principles by a national firm of certified public
accountants), (ii) if not included in substance in the Annual
Report to Stockholders, its Annual Report on Form 10-K, (iii)
if not included in substance in its Quarterly Reports to
Shareholders, its quarterly reports on Form 10-Q, and (iv) a
full copy of the particular Registration Statement covering
the Shares (the foregoing, in each case, excluding exhibits);
(b) upon the reasonable 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 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.
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
Attn: General Counsel
with a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
000 Xxxx X Xxxxxx
Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
-15-
Attn: Xxxx X. Xxxxxxxxx, Esq.
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.
SECTION 13. 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.
-16-
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
---------------------------------------
Print or Type:
Name of Purchaser
(Individual or Institution):
---------------------------------------
Name of Individual representing Purchaser
(if an Institution):
---------------------------------------
Title of Individual representing Purchaser
(if an Institution):
---------------------------------------
Signature by:
Individual Purchaser or Individual
representing Purchaser:
---------------------------------------
Address:
-----------------------------
Telephone:
-----------------------------
Telecopier:
-----------------------------
-17-
SUMMARY INSTRUCTION SHEET FOR PURCHASER
(to be read in conjunction with the entire
Purchase Agreement which follows)
A. Complete the following items on BOTH Purchase Agreements:
1. Page 17 - 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.
Appendix I - Registration Statement Questionnaire:
Provide the information requested by the Registration Statement
Questionnaire.
3. Return BOTH properly completed and signed Purchase Agreements
including the properly completed Appendix I to:
Vector Securities International, Inc.
Xxxxx 000
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx Xxxxxxxx
B. Instructions regarding the transfer of funds for the purchase of Shares
will be sent by facsimile to the Purchaser by the Placement Agent 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.
Appendix I
(one of two)
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
(two of two)
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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APPENDIX II
Attention:
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, [an officer of, or other person duly authorized by]
_____________________________________________________________
[fill in official name of individual or institution]
hereby certifies that he/she [said institution] is the Purchaser of
the shares evidenced by the attached certificate, and as such,
sold such shares on ______________ in accordance with
[date]
Registration Statement number _____________________________________
[fill in the number of or otherwise
________________________________ and the requirement of delivering a
identify Registration Statement]
current prospectus by the Company has been complied with in connection with such
sale.
Print or Type:
Name of Purchaser
(Individual or
Institution): ______________________
Name of Individual
representing
Purchaser (if an
Institution) ______________________
Title of Individual
representing
Purchaser (if an
Institution): ______________________
Signature by:
Individual Purchaser
or Individual repre-
senting Purchaser: ______________________
