SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. ___)
Triangle Pharmaceuticals, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.001 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
89589H 10 4
- --------------------------------------------------------------------------------
(CUSIP Number)
Jose M. de Lasa with a copy to:
Senior Vice President, Secretary James T. Lidbury
and General Counsel Mayer, Brown & Platt
Abbott Laboratories 190 South LaSalle Street
100 Abbott Park Road Chicago, Illinois 60603
Abbott Park, Illinois 60064-3500 (312) 782-0600
(847) 937-6100
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Persons
Authorized to Receive Notices and Communications)
June 2, 1999
- --------------------------------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g),
check the following box / /
(Continued on following pages)
(Page 1 of 12 Pages)
CUSIP NO.: 89589H 10 4 13D
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Abbott Laboratories (# 36-0698440)
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (_)
(b) (_)
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) (_)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
6,571,428 shares of Common Stock
NUMBER OF ---------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY ---------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 6,571,428 shares of Common Stock
PERSON ---------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,571,428 shares of Common Stock
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (_)
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
Page 2 of 12 Pages
ITEM 1. SECURITY AND ISSUER
This statement relates to the common stock, par value $0.001 per share
(the "Common Stock") of Triangle Pharmaceuticals, Inc., a Delaware
corporation (the "Issuer"). The Issuer's principal executive offices are
located at 4 University Place, 4611 University Drive, Durham, North Carolina.
ITEM 2. IDENTITY AND BACKGROUND
(a) - (c) This statement is being filed by Abbott Laboratories, an
Illinois corporation ("Abbott"). Abbott's principal offices are located at
100 Abbott Park Road, Abbott Park, Illinois 60064. Abbott's principal
business is the discovery, development, manufacture and sale of a broad and
diversified line of health care products and services. The names, business
addresses and principal occupation or employment (and the name, principal
business and address of any corporation or other organization in which such
employment is conducted) of each of the persons specified by Instruction C of
the Schedule 13D is set forth on Schedule 1 hereto.
(d) - (e) To the knowledge of Abbott, neither Abbott nor any of the
persons specified in Schedule 1 has, during the last five years, been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
Federal or State securities laws or finding any violation with respect to
such laws.
(f) See (a) - (c) above.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The aggregate purchase price for the 6,571,428 shares of Common Stock
(the "Shares") intended to be purchased under the Common Stock Purchase
Agreement made as of June 2, 1999 between the Issuer and Abbott (the "Stock
Purchase Agreement") will be $118,285,704. The anticipated source of the
funds required to purchase the Shares is the working capital of Abbott.
ITEM 4. PURPOSE OF THE TRANSACTION
On June 2, 1999 the Issuer and Abbott executed the Stock Purchase
Agreement, a Stockholder Rights Agreement (the "Stockholder Agreement"), a
Collaboration Agreement (the "Collaboration Agreement") and a Co-Promotion
Agreement (the "Co-Promotion Agreement"). At the closing under the Stock
Purchase Agreement, the Issuer and Abbott will also enter into a
Manufacturing and Supply Agreement (the "Supply Agreement" and, together
with the Stock Purchase Agreement, the Stockholder Agreement, the Collaboration
Agreement and the Co-Promotion Agreement, the "Alliance Agreements").
The closing under each of the Alliance Agreements is conditioned upon
the closing under each of the other Alliance Agreements (which closings are
collectively referred to as the "Closing") and is expected to occur on or
before the fifth business day after the expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 and satisfaction or waiver of applicable closing conditions,
including, without limitation, the receipt by each party of all
Page 3 of 12 Pages
authorizations, waivers, consents, approvals, licenses, franchises, and
permits for the execution, delivery, and performance of the Alliance
Agreements.
The purpose of the Alliance Agreements is to establish a world-wide
strategic alliance between Abbott and the Issuer for six antiviral products
(the "Products"). Pursuant to the terms of the Collaboration Agreement, the
Issuer and Abbott will collaborate with respect to the clinical development,
registration, distribution and marketing of various proprietary
pharmaceutical products for the prevention and treatment of human
immunodeficiency virus ("HIV") and hepatitis B virus ("HBV"). Among the
Products, four are Issuer products, all of which are in development, and two
are Abbott products, of which one is approved for treatment of HIV and the
other is in Phase III development.
The full text of the press release filed herewith as Exhibit 99(a)(3)
is incorporated herein by this reference.
Abbott intends to monitor its interests in the Issuer on an ongoing
basis and to take such measures as it deems appropriate from time to time in
furtherance of such interests. Subject to the limitations set forth in the
Alliance Agreements, Abbott may from time to time acquire additional shares
of Common Stock, dispose of some or all of the shares of Common Stock then
beneficially owned by it, discuss the Issuer's business, operations, or other
affairs with the Issuer's management, board of directors, stockholders or
others or take such other actions as Abbott may deem appropriate.
Notwithstanding the foregoing, except as described in this Item 4 or in Item
6 below, Abbott has no present plan or proposal which relates to or would
result in any of the matters referred to in Items (a) through (j) of Item 4
of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) Abbott may be deemed to be the beneficial owner of the 6,571,428
Shares which are subject to the Stock Purchase Agreement. Upon issuance, the
Shares will represent 17.6% of the total outstanding shares of Common Stock.
(b) After the Closing, Abbott will have the sole power to vote and to
dispose of all 6,571,428 of the Shares.
(c) Other than the execution of the Stock Purchase Agreement on June
2, 1999, Abbott has not effected any transactions in the Common Stock in the
past 60 days.
(d) - (e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SECURITIES OF THE ISSUER
Reference is made to Item 4 above.
The following summaries of the principal terms of the Stock Purchase
Agreement and the Stockholder Agreement do not purport to be complete and
reference is made to the full text of such agreements which are filed as
exhibits to this statement and are incorporated herein by this reference.
Page 4 of 12 Pages
A. STOCK PURCHASE AGREEMENT
The Stock Purchase Agreement obligates Abbott to buy and the Issuer to sell,
at Closing, 6,571,428 shares of Common Stock (the "Maximum Shares"), at a
price of $18.00 per share, for an aggregate purchase price of $118,285,704.
The Maximum Shares will represent, after issuance, approximately 17.6% of the
outstanding voting securities of the Issuer. Under the Stock Purchase
Agreement, the Issuer will seek a written determination from the NASDAQ Stock
Market that the purchase and sale of the Maximum Shares (as defined below)
does not require stockholder approval under Rule 4460 of the Nasdaq
National Market Issuer Designation Requirements (a "Written
Determination"). If the Company does not receive a Written Determination,
then the Stock Purchase Agreement obligates Abbott to buy and the Issuer to
sell, at closing, 6,116,229 shares of Common Stock (the "Minimum Shares"),
at a price of $18.00 per share, for an aggregate purchase price of
$110,092,122. The Minimum Shares would represent, after issuance,
approximately 16.6% of the outstanding voting securities of the Issuer.
If Abbott buys the Minimum Shares at the Closing, then the Company will
submit for stockholder consideration and approval the issuance and sale to
Abbott of an additional 455,199 shares of Common Stock (the "Make-Up
Shares" and, together with the Minimum Shares, or the Maximum Shares, or any
portion thereof the "Shares"). The Issuer's board of directors will
recommend approval of the issuance of the Make-Up Shares to Abbott and take
all lawful action to solicit such approval. If approved by stockholders, then
the Issuer will issue and sell to Abbott the Make-Up Shares, at a price of
$18.00 per share, for an aggregate purchase price of $8,193,582.
The Issuer has adopted an amendment to the Rights Agreement, dated as of
February 1, 1999 (the "Rights Agreement"), by and between the Issuer and
American Stock Transfer and Trust Company, as Rights Agent, that permits
Abbott, after the Closing, to acquire up to 21% of Common Stock without
triggering the provisions of the Rights Agreement, until such time as Abbott
holds less than the Minimum Purchaser Interest (as defined below).
The purchase of Shares has been approved by the board of directors prior
to the date of the Stock Purchase Agreement for the purposes of Section 203
of the Delaware General Corporation Law such that after the date of the Stock
Purchase Agreement, neither Abbott nor any of its affiliates are subject to
the restrictions on business combination transactions set forth in Section
203 with respect to the Issuer on account of such purchase. The Stock
Purchase Agreement is subject to termination if the closing has not occurred
within 90 days of June 2, 1999 or upon the termination of the
Collaboration Agreement.
B. STOCKHOLDER AGREEMENT
Under the Stockholder Agreement, at any time following the Registration
Rights Date (as defined below), the Issuer has agreed to register with the
Securities and Exchange Commission (the "SEC") for public sale, all or a
portion of the Shares upon request by Abbott (the "Demand Rights"). The
Issuer will not be obligated to file a registration statement for the Shares
unless Abbott proposes to sell a minimum aggregate of $10,000,000 of Shares
or 600,000 Shares, whichever is less, pursuant to such registration. The
Issuer will not be obligated to effect any more than one registration in any
consecutive 12 month period and the Issuer will not be obligated to effect
more than three registrations based on Demand Rights.
Page 5 of 12 Pages
If, at any time following the Registration Rights Date (as defined
below), the Issuer determines to register any of its securities, either for
its own account or for the account of a security holder or holders exercising
their respective registration rights, other than (a) a registration
relating solely to employee benefit plans on Form S-8 or (b) a
registration on Form S-4 relating solely to a transaction subject to Rule
145 under the Securities Act, then the Issuer will notify Abbott and use its
reasonable efforts to include in such registration, and any underwriting
involved therein, all Shares not previously registered or otherwise sold to
the public and requested by Abbot to be included (the "Piggyback Rights").
Abbott will not be entitled to exercise any Demand Rights or Piggyback
Rights before the Registration Rights Date. If the Issuer has not received
approval from the U.S. Food and Drug Administration of a minimum of two HIV
products by January 1, 2002, then the Registration Rights Date shall be
June 30, 2002. If the Issuer has received approval from the U.S. Food and
Drug Administration of a minimum of two HIV products by January 1, 2002,
then the Registration Rights Date shall be June 30, 2003.
Abbott will not be entitled to exercise any Demand Rights or Piggyback
Rights after the earlier of (a) such time as Abbott can sell all of the
Shares within a given three-month period without compliance with the
registration requirements of the Securities Act pursuant to Rule 144 and
(b) the date when the aggregate number of shares of Common Stock of the
Issuer held by Abbott is less than 7.0% of the total number of outstanding
shares of Common Stock (the "Minimum Purchaser Interest").
Abbott has agreed that during the period commencing at the Closing until
the Registration Rights Date (the "Initial Restricted Period"), neither it
nor any of its affiliates will, directly or indirectly, sell, contract to
sell or otherwise transfer or dispose of the Shares. For so long as Abbott
maintains the Minimum Purchaser Interest and during the period commencing at
the last day of the Initial Restricted Period until the second anniversary of
the Registration Rights Date, Abbott has further agreed that it will not,
directly or indirectly, sell, contract to sell or otherwise transfer or
dispose of the Shares other than in compliance with the volume restrictions
then set forth under Rule 144.
In the event that Abbott desires to transfer any Shares after the
Initial Restricted Period, the Issuer will have an exclusive, irrevocable,
assignable option to purchase some or all such Shares (the "Issuer
Option"). In the event that the Issuer notifies Abbott that it is not
interested in purchasing the Shares or fails to give proper notice of its
intent to exercise the Issuer Option, then Abbott will be free to sell or
transfer the Shares to any third party. The Issuer Option does not apply to
sales (a) which are registered under the Securities Act or made pursuant
to Rule 144; (b) which, to Abbott's knowledge, are not made to any one
purchaser in amount exceeding the lesser of an aggregate of $5,000,000 and
300,000 Shares (the "Maximum Purchase Amount") and (c) with respect to
which Abbott has obtained a written agreement from the underwriter to
allocate no more than the Maximum Purchase Amount to any one purchaser.
If the Issuer sells securities, then, subject to certain exceptions, the
Issuer will offer to Abbott the right to purchase the number of securities
that are necessary to prevent a reduction in Abbott's percentage ownership in
the Issuer's capital stock as calculated on a fully diluted basis prior to
the sale.
Commencing at the Closing and through June 30, 2005 (the "Standstill
Period"), Abbott has agreed not to acquire beneficial ownership of any
additional shares of Common Stock, any securities convertible into or
exchangeable for Common Stock, or any other right to acquire Common Stock
except by way of
Page 6 of 12 Pages
stock dividend or other distributions of Common Stock made available to
holders of Common Stock generally, if, after giving effect to such
acquisition of additional shares, the total beneficial ownership of Abbott
would exceed twenty-one percent (the "Ownership Limitation") of the Issuer's
total Common Stock then outstanding, without the Issuer's consent. During the
Standstill Period, Abbott and its affiliates will not (i) make, participate
or encourage any solicitation of proxies, (ii) subject any Common Stock to a
voting trust or other voting arrangement or (iii) form, join or encourage the
formation of a group of persons, which group would be required to file a
Schedule 13D with the SEC. If a person has taken all steps legally required
to commence a formal tender offer or has publicly announced its intention to
commence a formal tender offer or if the board of directors of the Issuer has
made a decision to dispose of all or substantially all of the assets of the
Issuer or to merge or consolidate the Issuer with another company, then the
restrictions discussed above in this paragraph will toll and have no force
and effect until the circumstances that triggered such tolling have ceased.
Following the Closing, the Issuer has agreed to increase to eight the
number of members constituting the board of directors of the Issuer and to
nominate and support for election to the Issuer's board an individual
designated by Abbott to the class of directors whose term expires at the 2002
annual meeting. The Stockholders Agreement provides that, as long as Abbott
holds at least the Minimum Purchaser Interest, the Issuer will use its
reasonable efforts to cause its board of directors to nominate and support
for election such number of individuals designated by Abbott which, together
with the initially elected director nominated by Abbott, would reflect the
percentage of Common Stock owned by Abbott and its subsidiaries.
The Stockholder Agreement is subject to termination if the Effective
Date has not occurred within 90 days of June 2, 1999 or upon the
termination of the Collaboration Agreement.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT NO. DESCRIPTION
- ----------- -----------
99(a)(1) Stock Purchase Agreement made as of June 2, 1999.
99(a)(2) Stockholder Rights Agreement made as of June 2, 1999.
99(a)(3) Press Release dated June 3, 1999.
Page 7 of 12 Pages
SCHEDULE 1
Information Concerning Executive Officers and
Directors of Abbott Laboratories
The current corporate officers and directors of Abbott Laboratories are
listed below. The address of Abbott Laboratories is: Abbott Laboratories, 100
Abbott Park Road, Abbott Park, Illinois 60064-3500. Abbott Laboratories does
not consider all of its corporate officers TO be executive officers as
defined by the Securities Exchange Act of 1934 or Releases thereunder. Unless
otherwise indicated, all positions set forth below opposite an individual's
name refer to positions within Abbott Laboratories, and the business address
listed for each individual not principally employed by Abbott Laboratories is
also the address of the corporation or other organization which principally
employs that individual.
POSITION/PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT
NAME AND BUSINESS ADDRESS CITIZENSHIP
CORPORATE OFFICERS
- ------------------
Miles D. White(1) Chairman of the Board and U.S.A.
Chief Executive Officer
Robert L. Parkinson, Jr.(1) President and Chief Operating Officer U.S.A.
Joy A. Amundson(1) Senior Vice President, Ross Products U.S.A.
Thomas D. Brown(1) Senior Vice President, Diagnostic U.S.A.
Operations
Gary P. Coughlan(1) Senior Vice President, Finance and Chief U.S.A.
Financial Officer
Jose M. de Lasa(1) Senior Vice President, Secretary and U.S.A.
General Counsel
William G. Dempsey(1) Senior Vice President, Chemical and U.S.A.
Agricultural Products
Richard A. Gonzalez(1) Senior Vice President, Hospital Products U.S.A.
Arthur J. Higgins(1) Senior Vice President, Pharmaceutical United Kingdom
Operations
Thomas M. Wascoe(1) Senior Vice President, Human Resources U.S.A.
Page 8 of 12 Pages
CORPORATE OFFICERS
- ------------------
CONTINUED
- ---------
Josef Wendler(1) Senior Vice President, International Germany
Operations
Catherine V. Babington Vice President, Investor Relations and U.S.A.
Public Affairs
Patrick J. Balthrop Vice President, Diagnostic Commercial U.S.A.
Operations
Mark E. Barmak Vice President, Litigation and Government U.S.A.
Affairs
Christopher B. Begley Vice President, Abbott Health Systems U.S.A.
Christopher A. Bleck Vice President, Pediatrics, Ross Products U.S.A.
Douglas C. Bryant Vice President, Diagnostic Operations, U.S.A.
Asia and Pacific
Gary R. Byers Vice President, Internal Audit U.S.A.
Thomas F. Chen Vice President, Pacific, Asia, and Africa U.S.A.
Operations
Kenneth W. Farmer Vice President, Management Information U.S.A.
Services and Administration
Edward J. Fiorentino Vice President, Pharmaceutical Products, U.S.A.
Marketing and Sales
Gary L. Flynn(1) Vice President and Controller U.S.A.
Thomas C. Freyman Vice President, Hospital Products U.S.A.
Controller
Stephen R. Fussell Vice President, Compensation and U.S.A.
Development
David B. Goffredo Vice President, European Operations U.S.A.
Robert B. Hance Vice President, Diagnostic Operations, U.S.A.
Europe, Africa and Middle East
Page 9 of 12 Pages
CORPORATE OFFICERS
- ------------------
CONTINUED
- ---------
Guillermo A. Herrera Vice President, Latin America and Canada Colombia
Operations
James J. Koziarz Vice President, Diagnostic Products U.S.A.
Research and Development
John M. Leonard Vice President, Pharmaceutical U.S.A.
Development
Greg W. Linder Vice President and Treasurer U.S.A.
John F. Lussen Vice President, Taxes U.S.A.
Edward L. Michael Vice President, Diagnostic Assays and U.S.A.
Systems
Daniel W. Norbeck Vice President, Pharmaceutical Discovery U.S.A.
Edward A. Ogunro Vice President, Hospital Products U.S.A.
Research and Development
Theodore A. Olson Vice President U.S.A.
William H. Stadtlander Vice President, Ross Medical Nutritional U.S.A.
Products
Marcia A. Thomas Vice President, Corporate Quality U.S.A.
Assurance and Regulatory Affairs
Steven J. Weger, Jr. Vice President, Corporate Planning and U.S.A.
Development
Susan M. Widner Vice President, Diagnostic Operations, U.S.A.
U.S. and Canada
Lance B. Wyatt Vice President, Corporate Engineering U.S.A.
Page 10 of 12 Pages
POSITION/PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT
NAME AND BUSINESS ADDRESS CITIZENSHIP
DIRECTORS
- ---------
H. Laurance Fuller Co-Chairman of the Board U.S.A.
BP Amoco, p.l.c.
200 East Randolph Drive
Mail Code 3000
Chicago, Illinois 60601
(integrated petroleum and chemicals
company)
David A. Jones Chairman of the Board U.S.A.
Humana Inc.
500 W. Main Street
Humana Building
Louisville, Kentucky 40201
(health plan business)
Jeffrey M. Leiden, Frederick H. Rawson Professor of U.S.A.
M.D., Ph.D. Medicine and Pathology
University of Chicago Medical School
5841 S. Maryland Avenue
Mail Code 6080
Chicago, Illinois 60637
The Rt. Hon. the Lord Physician, Politician, and Businessman United Kingdom
Owen CH 78 Narrow Street
Limehouse,
London, E14 8BP, England
Robert L. Parkinson, Jr. Officer of Abbott U.S.A.
Boone Powell, Jr. President and Chief Executive Officer U.S.A.
Baylor Health Care System and
Baylor University Medical Center
3500 Gaston Avenue
Dallas, Texas 75246
Addison Barry Rand Former Executive Vice President U.S.A.
Xerox Corporation
100 First Stamford Place, Floor 2S
Stamford, Connecticut 06904
(document processing, insurance and
financial services company)
Page 11 of 12 Pages
DIRECTORS - CONTINUED
- ---------------------
W. Ann Reynolds, Ph.D. President
Office of the President U.S.A.
The University of Alabama at Birmingham
Suite 1070 Administration Building
701 S. 20th Street
Birmingham, Alabama 35294-0110
Roy S. Roberts Vice President and Group Executive North U.S.A.
American Vehicle Sales, Service and
Marketing
General Motors Corporation
20 Renaissance Center
Mail Code 482-B33-B82
Detroit, Michigan 48265
(manufacturer of motor vehicles)
William D. Smithburg Retired Chairman, President and Chief U.S.A.
Executive Officer The Quaker Oats Company
676 N. Michigan Avenue
Suite 3860
Chicago, Illinois 60611
(worldwide food manufacturer and
marketer of beverages and grain-based
products)
John R. Walter Chairman U.S.A.
Manpower Inc.
5301 North Ironwood Road
Milwaukee, Wisconsin 53217
(employment services organization)
William L. Weiss Chairman Emeritus, Ameritech Corporation U.S.A.
One First National Plaza
Suite 2530C
Chicago, Illinois 60603-2006
(telecommunications company)
Miles D. White Officer of Abbott U.S.A.
(1)Pursuant to Item 401(b) of Regulation S-K Abbott has identified these
persons as "executive officers" within the meaning of Item 401(b).
Page 12 of 12 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Dated: June 11, 1999
ABBOTT LABORATORIES
By: /s/ Gary L. Flynn
-----------------------------------
Name: Gary L. Flynn
Title: Vice President and Controller
----------------------------------------
TRIANGLE PHARMACEUTICALS, INC.
COMMON STOCK PURCHASE AGREEMENT
dated as of
June 2, 1999
----------------------------------------
TABLE OF CONTENTS
PAGE
----
SECTION 1 AUTHORIZATION AND SALE OF COMMON STOCK..........................................1
1.1 Authorization..................................................1
1.2 Sale of Common Stock...........................................1
1.3 Alternate Provisions...........................................1
1.4 Definition of Shares...........................................2
SECTION 2 CLOSING DATE; DELIVERY..........................................................2
2.1 Closing Date...................................................2
2.2 Delivery.......................................................2
2.3 Make-Up Closing................................................2
SECTION 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................................3
3.1 Organization and Standing......................................3
3.2 Corporate Power; Authorization.................................3
3.3 Issuance and Delivery of the Shares............................4
3.4 SEC Documents; Financial Statements............................4
3.5 Governmental Consents..........................................5
3.6 No Material Adverse Change.....................................5
3.7 Authorized Capital Stock.......................................5
3.8 Litigation.....................................................5
3.9 Rights Agreement...............................................6
3.10 Section 203....................................................6
3.11 No Shareholder Vote............................................6
3.12 Other Representations and Warranties...........................7
SECTION 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.................................7
4.1 Authorization..................................................7
4.2 Investment Experience..........................................7
4.3 Investment Intent..............................................7
4.4 Registration or Exemption Requirements.........................8
4.5 No Legal, Tax or Investment Advice.............................8
4.6 Legends........................................................8
4.7 Securities Ownership...........................................8
SECTION 5 CONDITIONS TO CLOSING OF PURCHASER..............................................8
5.1 Representations and Warranties.................................9
5.2 Performance....................................................9
5.3 Qualifications.................................................9
5.4 Other Agreements...............................................9
5.5 No Prohibition.................................................9
5.6 Existing Investors' Consent....................................9
5.7 Rights Agreement..............................................10
5.8 Board Representative..........................................10
5.9 Satisfaction of Collaboration Agreement Conditions............10
i
TABLE OF CONTENTS (Continued)
PAGE
----
5.10 Compliance Certificate........................................10
SECTION 6 CONDITIONS TO CLOSING OF COMPANY...............................................10
6.1 Representations and Warranties................................10
6.2 Performance...................................................11
6.3 Qualifications................................................11
6.4 Other Agreements..............................................11
6.5 No Prohibition................................................11
6.6 Existing Investors'Consent....................................11
6.7 Satisfaction of Collaboration Agreement Conditions............11
6.8 Compliance Certificate........................................11
SECTION 7 COVENANTS......................................................................12
7.1 HSR Act.......................................................12
7.2 Stockholder Consent...........................................12
7.3 Use of Funds..................................................12
SECTION 8 MISCELLANEOUS..................................................................12
8.1 Waivers and Amendments........................................12
8.2 Placement Agent's Fee.........................................12
8.3 Governing Law.................................................12
8.4 Dispute Resolution............................................12
8.5 Survival......................................................13
8.6 Successors and Assigns........................................13
8.7 Entire Agreement..............................................13
8.8 Notices, etc..................................................13
8.9 Severability of this Agreement................................14
8.10 Counterparts..................................................14
8.11 Termination...................................................14
8.12 Expenses......................................................15
8.13 Currency......................................................15
8.14 Attorneys' Fees...............................................15
8.15 No Third Party Rights.........................................15
ii
TRIANGLE PHARMACEUTICALS, INC.
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (the "Agreement") is
made as of June 2, 1999, by and among Triangle Pharmaceuticals, Inc., a
Delaware corporation (the "Company"), with its principal offices at 4
University Place, 4611 University Drive, Durham, North Carolina 27707, and
Abbott Laboratories, an Illinois corporation (the "Purchaser"), with its
principal offices at 100 Abbott Park Road, Abbott Park, Illinois 60064.
SECTION 1
AUTHORIZATION AND SALE OF COMMON STOCK
1.1 AUTHORIZATION. The Company has authorized the sale
and issuance of shares of its common stock, par value $.001 per share
(together with the associated preferred share purchase rights, the "Common
Stock") pursuant to this Agreement.
1.2 SALE OF COMMON STOCK. Except as otherwise provided
in Section 1.3 below and subject to the terms and conditions of this
Agreement, at the Closing (as defined in Section 2.1) the Company agrees to
issue and sell to the Purchaser and the Purchaser agrees to purchase from the
Company 6,571,428 shares of Common Stock (the "Maximum Shares") for the
purchase price of $118,285,704 (or $18.00 per share).
1.3 ALTERNATE PROVISIONS. The Company shall seek a
written determination from the Nasdaq Stock Market that the purchase and sale
of the Maximum Shares at the Closing does not require stockholder approval
under Rule 4460 of the Nasdaq National Market Issuer Designation Requirements
(a "Written Determination"). If the Company or its counsel receives a Written
Determination on or before the Closing Date (as defined in Section 2.1), then
the provisions of Section 1.2 shall be applicable and the remainder of this
Section 1.3 shall be inapplicable. However, if the Company or its counsel
does not receive a Written Determination on or before the Closing Date, then
Section 1.2 shall be inapplicable and, in lieu thereof, subject to the terms
and conditions of this Agreement, at the Closing the Company agrees to issue
and sell to the Purchaser and the Purchaser agrees to purchase from the
Company 6,116,229 shares of Common Stock (the "Minimum Shares") for the
purchase price of $110,092,122 (or $18.00 per share). As promptly as
practicable after the Closing of the purchase and sale of the Minimum Shares,
the Company will take, in accordance with applicable law and its certificate
of incorporation and bylaws, all action necessary to convene and hold a
meeting of holders of the Company's Common Stock (the "Stockholders Meeting")
to consider and vote upon the approval of the issuance to Purchaser of an
additional 455,199 shares of Common Stock (the "Make-Up Shares"). The
Company's Board of Directors shall recommend that the stockholders of the
Company approve the issuance to Purchaser of the Make-Up Shares and take all
lawful action to solicit such approval. If the issuance to Purchaser of the
Make-Up Shares is not approved at the Stockholders Meeting, then the Company
shall be under no obligation to sell and Purchaser shall be under no
obligation to purchase the Make-Up Shares.
1.4 DEFINITION OF SHARES. As used herein, the term
"Shares" shall be deemed to mean the Maximum Shares if Section 1.2 is
applicable and the Minimum Shares and the Make-Up Shares if Section 1.2 is
not applicable.
SECTION 2
CLOSING DATE; DELIVERY
2.1 CLOSING DATE. The closing of the purchase and sale
of the Maximum Shares or the Minimum Shares, whichever is applicable,
hereunder (the "Closing") shall be held at 10:00 a.m. at the offices of
Mayer, Brown & Platt, 190 South LaSalle Street, Chicago, Illinois 60603-3441,
as soon as practicable, but in any event no later than the fifth business day
following the expiration or early termination of all waiting periods imposed
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), and satisfaction (or waiver, if permissible) of, all other
closing conditions set forth in Sections 5 and 6 of this Agreement, or at
such other time and place upon which the Company and the Purchaser shall
agree. The date of the Closing is hereinafter referred to as the "Closing
Date".
2.2 DELIVERY. At the Closing, the Company will deliver
to the Purchaser a certificate, registered in the Purchaser's name,
representing the Maximum Shares or the Minimum Shares, whichever is
applicable, to be purchased by the Purchaser. Such delivery shall be against
payment of the purchase price therefor as set forth in Section 1.2 or Section
1.3, whichever is applicable, by wire transfer to the Company to the account
or accounts specified in writing (including bank name(s) and routing
number(s) and any other necessary wire transfer instructions) by the Company
at least two business days prior to the Closing.
2.3 MAKE-UP CLOSING. If the Purchaser purchases the
Minimum Shares at the Closing pursuant to Section 1.3 and the issuance to
Purchaser of the Make-Up Shares is approved at the Stockholders Meeting, then
the Company will, on the fifth business day following the date of the
Stockholders Meeting (the "Make-Up Closing Date"), issue and sell to the
Purchaser and the Purchaser will purchase from the Company the Make-Up Shares
at a purchase price of $8,193,582 (or $18.00 per share) (the "Make-Up
Closing"); provided, however, that the respective obligations of the Company
and the Purchaser to effect the Make-Up Closing shall be subject to the
continued satisfaction or waiver as of the Make-Up Closing of the conditions
set forth in Section 5 (with the exception of Section 5.1 as it applies to
the representation and warranties set forth in Sections 3.6 and 3.8 hereof)
and Section 6 (substituting therein the term "Make-Up Closing" for the term
"Closing," the term "Make-Up Closing Date" for the term "Closing Date" and
the term "Make-Up Shares" for the term "Minimum Shares"). The Make-Up Closing
will take place at such place as the parties hereto may mutually agree. At
the Make-Up Closing, the Company will deliver to the Purchaser a certificate,
registered in the Purchaser's name, representing the Make-Up Shares to be
purchased by the Purchaser. Such delivery shall be against payment of the
purchase price therefor as set forth in this Section 2.3 by wire transfer to
the Company to the account or accounts specified in writing (including bank
name(s) and routing number(s) and any other necessary wire transfer
instructions) by the Company as least two business days prior to the Make-Up
Closing.
2
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as expressly limited in this Section 3, the Company
represents and warrants to the Purchaser as of the date of this Agreement as
follows:
3.1 ORGANIZATION AND STANDING. The Company is a
corporation duly organized and validly existing under, and by virtue of, the
laws of the State of Delaware and is in good standing as a domestic
corporation under the laws of said state. The Company is duly qualified as a
foreign corporation and is in good standing in each jurisdiction in which the
ownership of its property or the nature of its business requires such
qualification except where the failure to so qualify does not have a material
adverse effect on the business of the Company. Except as set forth on
Schedule 3.1, the Company has no subsidiaries or affiliated companies and
does not otherwise have any direct or indirect equity interest in or loans to
any partnership, corporation, limited liability company, joint venture,
business association or other entity. The Company has delivered to Purchaser
complete and correct copies of the Certificate of Incorporation and Bylaws of
the Company as amended to the date hereof.
3.2 CORPORATE POWER; AUTHORIZATION. The Company has all
requisite legal and corporate power and authority and has taken all requisite
corporate action to execute and deliver this Agreement and each of the
Related Agreements (as defined in Section 5.4) to sell and issue the Shares
and to carry out and perform all of its obligations under this Agreement and
each of the Related Agreements. This Agreement and each of the Related
Agreements constitute the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization or similar laws relating to or
affecting the enforcement of creditors' rights generally and (ii) as limited
by equitable principles generally. Except as set forth on Schedule 3.2, the
execution and delivery of this Agreement and each of the Related Agreements
does not, and the performance of this Agreement and each of the Related
Agreements and the compliance with the provisions hereof and thereof and the
issuance, sale and delivery of the Shares by the Company will not, conflict
with, or result in a breach or violation of the terms, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien pursuant to the terms of, the Certificate of
Incorporation or Bylaws of the Company or materially conflict with or result
in a material violation of the terms, conditions or provisions of, or
constitute a material default under, or result in the creation or imposition
of any material lien pursuant to the terms of any statute, law, rule or
regulation or any order, judgment, decree or any indenture, mortgage,
license, lease or other material agreement or instrument to which the Company
or any of its properties is subject.
3.3 ISSUANCE AND DELIVERY OF THE SHARES. The Shares,
when issued in compliance with the provisions of this Agreement, will be
validly issued, fully paid and nonassessable. The issuance and delivery of
the Shares is not subject to preemptive rights, rights of first refusal or
any other similar rights of any person pursuant to any agreement between the
Company and any such person or pursuant to the Company's Certificate of
Incorporation or Bylaws. At the Closing, the Purchaser will receive good and
marketable title to the Shares free of any liens, encumbrances or
restrictions (unless created by the Purchaser), other than restrictions
expressly set forth in this Agreement or the Related Agreements or
restrictions on transferability under applicable securities laws.
3
3.4 SEC DOCUMENTS; FINANCIAL STATEMENTS. Each report or
proxy statement delivered to the Purchaser is a true and complete copy of
such document as filed by the Company with the Securities and Exchange
Commission (the "SEC"). The Company has delivered to the Purchaser its Annual
Report on Form 10-K for the year ended December 31, 1998 (the "1998 10-K")
its Proxy Statement for the 1999 Annual Meeting of Stockholders and its
Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 (the
"First Quarter 10-Q"). The Company has filed in a timely manner all documents
that the Company was required to file with the SEC under Sections 13, 14(a)
and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since its initial public offering. As of their respective filing
dates, all documents filed by the Company with the SEC (the "SEC Documents")
complied in all material respects with the requirements of the Exchange Act
or the Securities Act of 1933, as amended (the "Securities Act"), as
applicable. None of the SEC Documents as of their respective dates contained
any untrue statement of material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC
Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto. The Financial Statements
have been prepared in accordance with generally accepted accounting
principles consistently applied and fairly present in all material respects
the consolidated financial position of the Company and any subsidiaries at
the dates thereof and the consolidated results of their operations and
consolidated cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal, recurring adjustments). Except as reflected
or reserved against in the consolidated financial statements of the Company
at December 31, 1998, as updated by the condensed consolidated financial
statements of the Company at March 31, 1999, to the Company's knowledge, the
Company has no liabilities that are required to be reported in the
consolidated balance sheet of the Company under GAAP except for liabilities
incurred in the ordinary course of business since December 31, 1998, and
liabilities which would not, individually or in the aggregate, have a
material adverse effect on the Company's properties or assets or the business
of the Company as presently conducted or proposed to be conducted.
3.5 GOVERNMENTAL CONSENTS. No consent, approval, order
or authorization of, or registration, qualification, designation, declaration
or filing with, any federal, state, or local governmental authority or, to
the Company's knowledge, with any international governmental authority, on
the part of the Company is required in connection with the execution of this
Agreement except for (a) such filings as have been made prior to the Closing,
except that any notices of sale required to be filed with the SEC under
Regulation D of the Securities Act, or such post-closing filings as may be
required under applicable state securities laws, which will be timely filed
within the applicable periods therefor, (b) the filing of the Nasdaq National
Market Notification Form with the Nasdaq National Market, and (c) such
filings as may be required by the HSR Act.
3.6 NO MATERIAL ADVERSE CHANGE. Except as otherwise
disclosed herein and in the 1998 10-K and the First Quarter 10-Q, since
December 31, 1998, there have not been any changes in the assets,
liabilities, financial condition, business, business prospects or results of
operations of the Company from that reflected in the Financial Statements
except changes in the
4
ordinary course of business which have not been, either individually or in
the aggregate, materially adverse.
3.7 AUTHORIZED CAPITAL STOCK. The authorized capital
stock of the Company consists of (i) 75,000,000 shares of Common Stock, of
which, as of June 1, 1999, 30,734,819 shares were outstanding, and (ii)
5,000,000 shares of Preferred Stock, of which, as of June 1, 1999, 170,000
shares were designated Series A Preferred Stock, none of which were
outstanding, and 1,200,000 shares were designated Series B Junior
Participating Preferred Stock pursuant to that certain Rights Agreement by
and between the Company and American Stock Transfer & Trust Company, dated
February 1, 1999 (the "Rights Agreement"), none of which were outstanding. As
of June 1, 1999, the Company has reserved for issuance shares of Common Stock
in connection with the following options, convertible securities, and plans:
(i) 3,823,723 shares of Common Stock reserved for issuance pursuant to the
Company's 1996 Stock Incentive Plan, of which, at June 1, 1999, options to
purchase 2,552,434 shares of Common Stock were outstanding, (ii) 300,000
shares of Common Stock reserved for issuance under the Company's Employee
Stock Purchase Plan, of which at June 1, 1999, 65,584 shares of Common Stock
had been issued under such plan. Except as set forth in this Section 3.7 and
in Schedule 3.7 hereof, there are no other options, warrants, conversion
privileges or other contractual rights presently outstanding or in existence
to purchase or otherwise acquire any authorized but unissued shares of
capital stock or other securities of the Company.
3.8 LITIGATION. Except as disclosed in the 1998 10-K and
the First Quarter 10-Q, there are no actions, suits, proceedings or
investigations pending or, to the best of the Company's knowledge, threatened
against the Company or any of its properties before or by any court or
arbitrator or any governmental body, agency or official.
3.9 RIGHTS AGREEMENT. Prior to the execution of this
Agreement, the Company has adopted an amendment to the Rights Agreement
substantially in the form set forth as Exhibit 3.9, with the effect that (i)
from the Effective Date (as such term is defined in the Collaboration
Agreement, as hereinafter defined) up until such time as Purchaser holds less
than the Minimum Purchaser Interest (as such term is defined in the
Stockholder Rights Agreement, as hereinafter defined), neither Purchaser nor
its U.S. wholly-owned subsidiaries shall be deemed to be an Acquiring Person
(as defined in the Rights Agreement), that the Distribution Date (as defined
in the Rights Agreement) will not be deemed to occur and that the Rights (as
defined in the Rights Agreement) will not separate from the Common Stock as a
result of entering into this Agreement or any of the Related Agreements or
the consummation of the transactions contemplated hereby or thereby (other
than any purchases permitted under Section 5.3 of the Stockholder Rights
Agreement or otherwise which cause Purchaser's Beneficial Ownership (as the
term "Beneficial Ownership" is defined in the Stockholder Rights Agreement)
of Shares of Common Stock to exceed 21% of the total shares of Common Stock
of the Company outstanding from time to time hereafter) or as a result of the
acquisition by Purchaser of beneficial ownership of shares of Common Stock
not exceeding twenty-one percent (21%) of the total shares of Common Stock
outstanding from time to time hereafter, and (ii) for the period commencing
as of the date of this Agreement and ending on the earlier of (x) the
Effective Date and (y) termination of this Agreement (the "Interim Period"),
neither Purchaser nor its U.S. wholly-owned
5
subsidiaries shall be deemed to be an Acquiring Person (as defined in the
Rights Agreement), that the Distribution Date (as defined in the Rights
Agreement) will not be deemed to occur and that the Rights (as defined in the
Rights Agreement) will not separate from the Common Stock as a result solely
of Purchaser entering into this Agreement and being deemed the Beneficial
Owner (as defined in the Rights Agreement) of the Shares; provided that
Purchaser does not become the Beneficial Owner of any securities of the
Company in addition to the Shares during the Interim Period.
3.10 SECTION 203. The purchase of Shares pursuant to this
Agreement has been approved by the Board of Directors of the Company prior to
the date of this Agreement for the purposes of Section 203 of the Delaware
General Corporation Law such that after the date of this Agreement, neither
Purchaser nor any of its Affiliates will be subject to the restrictions on
business combination transactions set forth in said Section 203 with respect
to the Company on account of such purchase.
3.11 NO SHAREHOLDER VOTE. The execution, delivery and
performance of this Agreement and the Related Agreements is not required to
be submitted for a vote or other approval of the stockholders of the Company
under Section 271 of the Delaware General Corporation Law. The issuance and
sale by the Company of the Minimum Shares does not require approval of the
stockholders of the Company under any applicable federal or state laws or
regulations or under the rules and regulations of the National Association of
Securities Dealers (including the designation or maintenance criteria of the
NASDAQ National Market) or any other self-regulatory organization applicable
to the Company.
3.12 OTHER REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by the Company in the Related Agreements
are true and correct as of the date made. Notwithstanding anything to the
contrary herein and anything in any other Related Agreement, the Company
makes no representation and warranty (and shall have no liability) arising
from any requirement to obtain stockholder approval pursuant to the Nasdaq
National Market Issuer Designation Requirements, including Rule 4460
thereunder, with respect to the issuance and sale of the Maximum Shares.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Except as expressly limited in this Section 4, the
Purchaser hereby represents and warrants to the Company as of the date of
this Agreement as follows:
4.1 AUTHORIZATION. Purchaser has all requisite legal and
corporate power and authority and has taken all requisite corporate or other
action to execute and deliver this Agreement and each of the Related
Agreements, to purchase the Shares and to carry out and perform all of its
obligations under this Agreement. This Agreement and each of the Related
Agreements constitutes the legal, valid and binding obligation of the
Purchaser, enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, or similar laws relating
to or affecting the enforcement of creditors' rights generally and (ii) as
limited by equitable principles generally.
6
4.2 INVESTMENT EXPERIENCE. Purchaser is an "accredited
investor" as defined in Rule 501(a) under the Securities Act. Purchaser
believes that it has had access to and has acquired sufficient information
about the Company to reach an informed and knowledgeable decision to acquire
the Shares. Purchaser has such business and financial experience as is
required to give it the capacity to protect its own interests in connection
with the purchase of the Shares.
4.3 INVESTMENT INTENT. Purchaser is purchasing the
Shares for its own account as principal, for investment purposes only, and
not with a present view to, or for, resale, distribution or fractionalization
thereof, in whole or in part, within the meaning of the Securities Act.
Purchaser understands that its acquisition of the Shares has not been
registered under the Securities Act or registered or qualified under any
state securities law in reliance on specific exemptions therefrom, which
exemptions may depend upon, among other things, the bona fide nature of
Purchaser's investment intent as expressed herein. 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 (a) in compliance with the Securities Act and
the rules and regulations promulgated thereunder and (b) in compliance with
the terms of the Stockholder Rights Agreement dated as of the date of this
Agreement between the Company and Purchaser (the "Stockholder Rights
Agreement").
4.4 REGISTRATION OR EXEMPTION REQUIREMENTS. Purchaser
further acknowledges and understands that the Shares may not be resold or
otherwise transferred except in a transaction registered under the Securities
Act or unless an exemption from such registration is available.
4.5 NO LEGAL, TAX OR INVESTMENT ADVICE. Purchaser
understands that nothing in this Agreement or any other materials presented
to Purchaser in connection with the purchase and sale of the Shares
constitutes legal, tax or investment advice. Purchaser has consulted such
legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of the Shares.
4.6 LEGENDS. To the extent applicable, each certificate
or other document evidencing any of the Shares shall be endorsed with the
legends set forth below:
(a) "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144
PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED."
(b) "THE SHARES REPRESENTED HEREBY ARE SUBJECT TO
THE RESTRICTIONS ON TRANSFER CONTAINED IN A COMMON STOCK PURCHASE AGREEMENT
AND A STOCKHOLDER RIGHTS AGREEMENT, EACH AS AMENDED
7
FROM TIME TO TIME. THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF
SUCH AGREEMENTS TO THE HOLDER HEREOF WITHOUT CHARGE."
(c) Any other legend required by law.
4.7 SECURITIES OWNERSHIP. As of the date hereof,
Purchaser does not "beneficially own" (as such term is defined in Section
5.4(a) of the Stockholder Rights Agreement, subject to the limitation
contained in Section 5.2(c) thereof) any securities of the Company.
SECTION 5
CONDITIONS TO CLOSING OF PURCHASER
The Purchaser's obligation to purchase the Maximum Shares
or the Minimum Shares, as applicable, at the Closing is subject to the
fulfillment or waiver as of the Closing of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Company contained in Section 3 and in the Related
Agreements that are qualified as to materiality shall be true and correct as
of the Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date and the
representations and warranties of the Company contained in Section 3 and the
Related Agreements that are not qualified as to materiality shall in all
material respects be true and correct on and as of the Closing Date with the
same effect as though such representations and warranties had been made on
and as of the Closing Date.
5.2 PERFORMANCE. The Company shall have performed and
complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or
before the Closing.
5.3 QUALIFICATIONS. All authorizations, approvals, or
permits, if any, of any governmental authority or regulatory body of the
United States or of any state that are required as of the Closing in
connection with the lawful issuance and sale of the Maximum Shares or the
Minimum Shares, as applicable, pursuant to this Agreement shall have been
duly obtained and shall be effective as of the Closing. Without limiting the
generality of the foregoing, both Purchaser and the Company shall have filed
such forms with the United States Department of Justice ("DOJ") and the
Federal Trade Commission ("FTC") as shall be required by the HSR Act and the
applicable waiting periods under the HSR Act shall have expired or earlier
been terminated without notice from such governmental agencies that
additional inquiries are being made.
5.4 OTHER AGREEMENTS. The Company shall have executed
and delivered the Stockholder Rights Agreement, the Collaboration Agreement,
dated as of the date hereof by and between the parties hereto (the
"Collaboration Agreement"), and the Co-Promotion Agreement, dated as of the
date hereof by and between the parties hereto (collectively, the "Related
Agreements").
8
5.5 NO PROHIBITION. There shall not then be in effect
any order enjoining or restraining the transactions contemplated by this
Agreement or any of the Related Agreements. There shall not be in effect any
law, rule or regulation prohibiting or restricting the purchase and sale of
the Maximum Shares or the Minimum Shares, as applicable, or requiring any
consent or approval of any person in connection with the purchase and sale of
the Maximum Shares or the Minimum Shares, as applicable, which consent or
approval shall not have been obtained.
5.6 EXISTING INVESTORS' CONSENT. The Company's Restated
Investors' Rights Agreement dated June 11, 1996, as amended and in the form
attached hereto as Exhibit 5.6(A) (the "Existing Investors' Rights
Agreement") shall not have been amended or modified in any way without
Purchaser's prior written consent and Purchaser shall have been provided with
a consent by the holders of a majority of the Registrable Securities under
the Existing Investors' Rights Agreement in substantially the form attached
hereto as Exhibit 5.6(B) or such other form as reasonably acceptable to
Purchaser, consenting to the granting of the registration rights to the
Purchaser pursuant to the Stockholder Rights Agreement (the "Existing
Investors' Consent").
5.7 RIGHTS AGREEMENT. Prior to the execution of this
Agreement, the Company shall have adopted an amendment to the Rights
Agreement, substantially in the form set forth as Exhibit 3.9 hereto.
5.8 BOARD REPRESENTATIVE. Arrangements shall have been
made to Purchaser's reasonable satisfaction for one designee of Purchaser to
be elected to the Board of Directors of the Company pursuant to the
Stockholder Rights Agreement.
5.9 SATISFACTION OF COLLABORATION AGREEMENT CONDITIONS.
The conditions of Sections 16.8(a) and (b) (with the exception of Section
16.8(a)(iii)) of the Collaboration Agreement shall have been satisfied.
5.10 COMPLIANCE CERTIFICATE. The Company shall have
delivered to the Purchaser a certificate substantially in the form of Exhibit
5.10 attached hereto executed by the Chief Financial Officer of the Company,
dated the Closing Date, and certifying the fulfillment of the conditions
specified in Section 5.1 through 5.8, with the exception of the conditions
specified in Section 5.5 as such conditions may apply to Purchaser.
SECTION 6
CONDITIONS TO CLOSING OF COMPANY
The Company's obligation to sell and issue the Maximum
Shares or the Minimum Shares, as applicable, at the Closing is subject to the
fulfillment or waiver as of the Closing of the following conditions:
6.1 REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Purchaser contained in Section 4 and in the Related
Agreements that are qualified as to materiality shall be true and correct as
of the Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date and the representations
and warranties of the Purchaser contained in Section 4 and the Related
Agreements that are not qualified as to materiality shall in all material
respects be true and
9
correct on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date.
6.2 PERFORMANCE. The Purchaser shall have performed and
complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by the Purchaser
on or before the Closing.
6.3 QUALIFICATIONS. All authorizations, approvals, or
permits, if any, of any governmental authority or regulatory body of the
United States or of any state that are required as of the Closing in
connection with the lawful issuance and sale of the Maximum Shares or the
Minimum Shares, as applicable, pursuant to this Agreement shall have been
duly obtained and shall be effective as of the Closing. Without limiting the
generality of the foregoing, both Purchaser and the Company shall have filed
such forms with the DOJ and the FTC as shall be required by the HSR Act and
the applicable waiting periods under the HSR Act shall have expired or
earlier been terminated without notice from such governmental agencies that
additional inquiries are being made.
6.4 OTHER AGREEMENTS. The Purchaser shall have executed
and delivered each of the Related Agreements.
6.5 NO PROHIBITION. There shall not then be in effect
any order enjoining or restraining the transactions contemplated by this
Agreement or any of the Related Agreements. There shall not be in effect any
law, rule or regulation prohibiting or restricting the purchase and sale of
the Maximum Shares or the Minimum Shares, as applicable, or requiring any
consent or approval of any person in connection with the purchase and sale of
the Maximum Shares or the Minimum Shares, as applicable, which consent or
approval shall not have been obtained.
6.6 EXISTING INVESTORS' CONSENT. If the Existing
Investors' Consent shall not have been obtained, the terms of the
Stockholders' Rights Agreement shall have been modified to the mutual
satisfaction of the parties to the Stockholder Rights Agreement.
6.7 SATISFACTION OF COLLABORATION AGREEMENT CONDITIONS.
The conditions of Sections 16.8(a) and (c) (with the exception of Section
16.8(a)(iii)) of the Collaboration Agreement shall have been satisfied.
6.8 COMPLIANCE CERTIFICATE. The Purchaser shall have
delivered to the Company a certificate substantially in the form of Exhibit
6.8 attached hereto executed by an authorized officer of the Purchaser, dated
the Closing Date, and certifying the fulfillment of the conditions specified
in Section 6.1 through 6.6, with the exception of the conditions specified in
Section 6.5 as such conditions may apply to the Company.
SECTION 7
COVENANTS
7.1 HSR ACT. Purchaser and the Company each shall file
such forms with the DOJ and the FTC as shall be required by the HSR Act as
promptly as practicable upon execution of this Agreement, each shall promptly
respond to any requests for additional information from
10
the DOJ or the FTC and shall each cooperate fully with the other with respect
to compliance with the HSR Act.
7.2 STOCKHOLDER CONSENT. The Company shall use its
reasonable efforts to secure the Existing Investor's Consent.
7.3 USE OF FUNDS. The Company shall use the proceeds
from the sale of the Shares to Purchaser and the milestone payments
contemplated by Section 5.1 of the Collaboration Agreement for proper
corporate purposes, including allocating in a responsible manner a sufficient
portion of such proceeds and milestone payments calculated to cause the
Company to use its reasonable efforts to fulfill its obligations under each
of the Related Agreements.
SECTION 8
MISCELLANEOUS
8.1 WAIVERS AND AMENDMENTS. The terms of this Agreement
may be waived or amended only with the written consent of the Company and the
Purchaser.
8.2 PLACEMENT AGENT'S FEE. Each of the parties hereto
hereby represents that, on the basis of any actions and agreements by it,
there are no brokers or finders entitled to compensation in connection with
the sale of the Shares to the Purchaser other than Warburg Dillon Read LLC
and Goldman, Sachs & Co., the fees and expenses of which will be paid by the
Company and Purchaser, respectively.
8.3 GOVERNING LAW. This Agreement shall be governed in
all respects by and construed in accordance with the laws of the State of
Delaware without any regard to conflicts of laws principles.
8.4 DISPUTE RESOLUTION. The parties hereto agree that
any disputes which may arise during the term of this Agreement which relate
to either party's rights and/or obligations hereunder shall be resolved in
accordance with the ADR provisions contained in Exhibit 8.4 hereto, except
that either party may seek judicial relief or enforcement to pursue equitable
or other remedies not addressed by the ADR provisions, including without
limitation specific performance or injunctive relief, to pursue a claim of
fraudulent or otherwise inequitable treatment under the ADR proceedings or to
otherwise enforce a judgment under the ADR proceedings.
8.5 SURVIVAL. The representations, warranties, covenants
and agreements made in this Agreement shall survive any investigation made by
the Company or the Purchaser and the Closing.
8.6 SUCCESSORS AND ASSIGNS. The provisions hereof shall
inure to the benefit of, and be binding upon, the successors and permitted
assigns of the parties to this Agreement. Notwithstanding the foregoing,
neither party shall assign this Agreement without the prior written consent
of the other party, except that Purchaser may assign this Agreement to any
direct or indirect wholly-owned domestic (i.e., incorporated in a state of
the U.S.) subsidiary of
11
Purchaser; provided, however, that no such assignment shall relieve or limit
Purchaser's obligations hereunder.
8.7 ENTIRE AGREEMENT. This Agreement and the Related
Agreements constitute the full and entire understanding and agreement between
the parties with regard to the subjects hereof.
8.8 NOTICES, ETC. All notices and other communications
required or permitted under this Agreement shall be in writing and may be
delivered in person, by facsimile, overnight delivery service or registered
or certified United States mail, addressed to the Company or the Purchaser,
as the case may be, at their respective addresses set forth below, or at such
other address as the Company or the Purchaser shall have furnished to the
other party in writing:
If to the Company:
Triangle Pharmaceuticals, Inc.
4 University Place
4611 University Drive
Durham, North Carolina 27707
Telephone: 919-493-5980
Facsimile: 919-493-5925
Attention: Chief Executive Officer and
General Counsel
Copy to:
Brobeck, Phleger & Harrison LLP
550 West "C" Street
Suite 1200
San Diego, CA 92101
Attention: John Denniston
If to the Purchaser:
Abbott Laboratories
Dept. 309; Bldg. AP30
200 Abbott Park Road
Abbott Park, IL 60064
Telephone: (847) 938-6863
Facsimile: (847) 938-5383
Attention: Senior Vice President, Pharmaceutical
Operations and
Senior Vice President, International Operations
12
Copy to:
General Counsel
Abbott Laboratories
Dept. 364; Building AP6D
100 Abbott Park Road
Abbott Park, IL 60064
Telephone: (847) 937-8906
Facsimile: (847) 938-6277
All notices and other communications shall be effective upon actual receipt
thereof by the person to whom notice is directed.
8.9 SEVERABILITY OF THIS AGREEMENT. If any provision of
this Agreement shall be judicially determined to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
8.10 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
8.11 TERMINATION.
(a) OUTSIDE DATE. If the Effective Date has not
occurred within ninety (90) days from the execution of this Agreement (other
than through the failure of the party seeking to terminate this Agreement to
comply fully with its obligations under this Agreement or any of the other
Related Agreements) or such later date as the parties hereto may agree,
either party may terminate this Agreement by written notice to the other.
(b) TERMINATION OF COLLABORATION AGREEMENT. This
Agreement is subject to termination upon termination of the Collaboration
Agreement pursuant to the terms of Sections 16.5 (b) and (c) of the
Collaboration Agreement.
8.12 EXPENSES. Except as provided by the ADR provisions
contained in Exhibit 8.4 and Section 8.14 hereof, the Company and the
Purchaser each shall bear its own expenses incurred on its behalf with
respect to this Agreement and the transactions contemplated hereby, including
fees of legal counsel; provided, however, that the Company and Purchaser
shall share equally the fee(s) required to be paid in connection with the
filing(s) required under the HSR Act in connection with the transactions
contemplated by this Agreement and the other Triangle-Abbott Alliance
Agreements.
8.13 CURRENCY. All references to "dollars" or "$" in this
Agreement shall be deemed to refer to United States dollars.
8.14 ATTORNEYS' FEES. If any action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys' fees, costs and
necessary disbursements in addition to any other relief to which such party
may be entitled.
13
8.15 NO THIRD PARTY RIGHTS. Except where expressly
provided to the contrary, nothing in this Agreement shall create or be deemed
to create any rights in any person or entity not a party to this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
14
The foregoing agreement is hereby executed as of the date
first above written.
"COMPANY"
TRIANGLE PHARMACEUTICALS, INC., a
Delaware corporation
By: ____________________________________
Name: ____________________________________
Title: ____________________________________
"PURCHASER"
ABBOTT LABORATORIES, an Illinois
corporation
By: ____________________________________
Name: ____________________________________
Title: ____________________________________
15
-------------------------------------
TRIANGLE PHARMACEUTICALS, INC.
STOCKHOLDER RIGHTS AGREEMENT
dated as of
June 2, 1999
-------------------------------------
TABLE OF CONTENTS
PAGE
----
SECTION 1 REGISTRATION RIGHTS............................................................1
1.1 Registration Request..........................................1
1.2 Company Registration..........................................2
1.3 Underwriting..................................................2
1.4 Allocation of Registration Opportunities......................2
1.5 Registration Expenses.........................................3
1.6 Company Obligations...........................................3
1.7 Prospectus Supplements........................................3
1.8 Rule 144......................................................4
1.9 Selling Procedures............................................4
1.10 Purchaser Information.........................................4
1.11 Termination of Registration Rights............................4
1.12 Registration Rights Date......................................5
SECTION 2 INDEMNIFICATION AND CONTRIBUTION...............................................5
2.1 Indemnification by the Company................................5
2.2 Indemnification by Purchaser..................................6
2.3 Indemnification Procedures....................................6
2.4 Contribution..................................................6
2.5 Continuing Obligations........................................7
SECTION 3 RESTRICTIONS ON TRANSFERABILITY OF SHARES: COMPLIANCE WITH SECURITIES ACT......7
3.1 Restrictions on Transferability...............................7
3.2 Compliance with Securities Act................................7
3.3 Right of First Refusal........................................8
3.4 Market Stand-Off Agreement....................................9
SECTION 4 ADDITIONAL PURCHASE RIGHT......................................................9
4.1 Purchase Right................................................9
4.2 Definitions..................................................10
SECTION 5 COVENANTS OF PURCHASER........................................................11
5.1 Transfer Restriction.........................................11
5.2 Standstill Provisions........................................11
5.3 Tolling; Termination Upon Certain Events.....................12
5.4 Definitions..................................................13
SECTION 6 NOMINATION FOR ELECTION TO COMPANY BOARD OF DIRECTORS.........................14
6.1 Initial Board Designee.......................................15
6.2 Continuing Rights............................................15
SECTION 7 NO RESTRICTIONS...............................................................16
7.1 Rights Agreement.............................................16
i
TABLE OF CONTENTS (continued)
SECTION 8 MISCELLANEOUS.................................................................18
8.1 Waivers and Amendments.......................................18
8.2 Governing Law................................................18
8.3 Dispute Resolution...........................................18
8.4 Successors and Assigns.......................................18
8.5 Entire Agreement.............................................18
8.6 Notices, etc.................................................18
8.7 Severability of this Agreement...............................20
8.8 Counterparts.................................................20
8.9 Expenses.....................................................20
8.10 No Third Party Rights........................................20
8.11 SEC Rule Changes.............................................20
8.12 Attorneys' Fees..............................................20
8.13 Termination..................................................20
Exhibit A - Form of Registration Statement Questionnaire
Exhibit B - Form of Purchaser's Certificate of Subsequent Sale
ii
TRIANGLE PHARMACEUTICALS, INC.
STOCKHOLDER RIGHTS AGREEMENT
This Stockholder Rights Agreement (the "Agreement") is made
as of June 2, 1999, by and among Triangle Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), with its principal offices at 4 University
Place, 4611 University Drive, Durham, North Carolina 27707 and Abbott
Laboratories, an Illinois corporation ("Purchaser"), with its principal
offices at 100 Abbott Park Road, Abbott Park, Illinois 60064, and shall be
effective subject to and commencing as of the Closing Date (as such term is
defined in the Stock Purchase Agreement (as hereinafter defined)) (the
"Effective Date").
RECITALS
WHEREAS, the Company and Purchaser are parties to a certain
Common Stock Purchase Agreement of even date herewith (the "Stock Purchase
Agreement") pursuant to which the Company has agreed to issue and sell, and
Purchaser has agreed to purchase, up to 6,571,428 shares of Common Stock of
the Company; and
WHEREAS, in order to induce the Company to enter into the
Stock Purchase Agreement and to induce Purchaser to purchase shares of the
Company's Common Stock pursuant to the Stock Purchase Agreement, the Company
and Purchaser are entering into this Agreement to provide Purchaser with
certain rights to cause the Company to register shares of Common Stock issued
to Purchaser pursuant to the Stock Purchase Agreement, and certain other
matters as set forth herein.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
SECTION 1
REGISTRATION RIGHTS
1.1 REGISTRATION REQUEST. At any time from and after the
Registration Rights Date (as defined in Section 1.12 hereof) Purchaser may
request the Company to file a registration statement registering the resale
of the Shares (as defined in the Stock Purchase Agreement). Within forty five
(45) days following such request, the Company shall prepare and file a
registration statement with the Securities and Exchange Commission (the
"SEC") under the Securities Act of 1933, as amended (the "Securities Act") to
register the resale of the Shares by Purchaser (the "Registration
Statement"). Purchaser shall deliver to the Company an executed copy of the
Registration Statement Questionnaire in the form attached hereto as Exhibit A
at the time the request for registration is made. Notwithstanding the
foregoing, the Company shall not be obligated to effect any registrations
under this Section 1 unless (i) Purchaser proposes to sell a minimum
aggregate of ten million dollars ($10,000,000) of Company securities or
600,000 Shares, whichever is less, pursuant to such registration and (ii)
Company has not been obligated to effect any more than one (1) registration
in any consecutive twelve (12) month period. Further, the Company shall not
be obligated to effect any further registrations under this Section
1 after it has effected a total of three (3) registrations under this Section
1 for which Registration Statements have been declared effective.
1.2 COMPANY REGISTRATION. If at any time following the
Registration Rights Date, the Company shall determine to register any of its
securities, either for its own account or the account of a security holder or
holders exercising their respective registration rights, other than (i) a
registration relating solely to employee benefit plans on Form S-8 (or
similar successor form), or (ii) a registration on Form S-4 (or similar
successor form) relating solely to a transaction subject to Rule 145 under
the Securities Act, the Company will (a) promptly give Purchaser written
notice thereof, and (b) subject to the terms of Sections 1.3 and 1.4 hereof,
use its 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 Registrable Securities (as hereinafter
defined) specified in a written request to the Company made within 15
business days after receipt of such written notice by Purchaser. "Registrable
Securities" include such portion of the Shares which have not previously been
registered or otherwise sold to the public.
1.3 UNDERWRITING. Notwithstanding the foregoing, if the
registration of which the Company gives notice pursuant to Section 1.2 hereof
is for a registered offering involving an underwriting, the right to
registration pursuant to this Section 1 shall be conditioned upon such
Purchaser's participation in such underwriting and the inclusion of
Purchaser's Registrable Securities in the underwriting to the extent provided
herein. Purchaser shall (together with the Company and the holders of other
securities of the Company distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected by the Company.
Notwithstanding any other provision of this Section 1, if
the representative of the underwriters advises the Company in writing that
marketing factors require a limitation on the number of shares to be
underwritten, the representative may (subject to the limitations set forth
below) exclude all Registrable Securities from, or limit the number of
Registrable Securities 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 first to the
Company for securities being sold for its own account and thereafter as set
forth in Section 1.4 hereof. If any person does not agree to the terms of any
such underwriting, he shall be excluded therefrom by written notice from the
Company or the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
1.4 ALLOCATION OF REGISTRATION OPPORTUNITIES. In any
circumstance in which all of the Registrable Securities and other shares of
Common Stock of the Company (including shares of Common Stock issued or
issuable upon conversion of shares of any currently unissued series of
Preferred Stock of the Company) with registration rights (the "Other Shares")
requested to be included in a registration on behalf of Purchaser or other
selling stockholders cannot be so included as a result of limitations on the
aggregate number of shares of Registrable Securities and Other Shares which
may be so included, the number of shares of Registrable Securities and Other
Shares may be allocated among Purchaser and other selling stockholders
requesting inclusion of shares pro rata on the basis of the number of shares
of Registrable Securities and Other Shares that would be held by Purchaser
and other selling stockholders, assuming
2
conversion; provided, however, that, so that such allocation shall not
operate to reduce the aggregate number of Registrable Securities and Other
Shares to be included in such registration, if Purchaser or any other selling
stockholder does not request inclusion of the maximum number of shares of
Registrable Securities and Other Shares allocated to it pursuant to the
above-described procedure, the remaining portion of its allocation shall be
reallocated among Purchaser, if applicable, and those other requesting
selling stockholders whose allocations did not satisfy their requests pro
rata on the basis of the number of shares of Registrable Securities and Other
Shares that would be held by Purchaser and such other selling stockholders,
assuming conversion, and this procedure shall be repeated until all of the
shares of Registrable Securities and Other Shares that may be included in the
registration on behalf of Purchaser and other selling stockholders have been
so allocated.
1.5 REGISTRATION EXPENSES. The Company shall pay all
Registration Expenses (as defined below) in connection with any registration,
qualification or compliance hereunder, and Purchaser shall pay all Selling
Expenses (as defined below) and other expenses that are not Registration
Expenses. "Registration Expenses" shall mean all expenses, except for Selling
Expenses, incurred by the Company in complying with the registration
provisions herein described, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses and the
expense of any attest services incident to or required by any such
registration. "Selling Expenses" shall mean all selling commissions,
underwriting fees and stock transfer taxes applicable to the Shares and all
fees and disbursements of counsel for Purchaser.
1.6 COMPANY OBLIGATIONS. In the case of the registration
effected by the Company pursuant to this Section 1, the Company will use
reasonable efforts to: (i) keep such registration effective until the
earliest of (A) such date as all of the Shares have been resold or (B) if the
Company is not then eligible to effect such registration on Form S-3, one
hundred twenty (120) days after the effective date of the Registration
Statement or (C) termination of registration rights pursuant to Section 1.11
hereof; (ii) prepare and file with the SEC such amendments and supplements to
the Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all securities covered
by the Registration Statement; (iii) furnish such number of prospectuses and
other documents incident thereto, including any amendment of or supplement to
the prospectus, as Purchaser from time to time may reasonably request; (iv)
cause all Shares registered as described herein to be listed on each
securities exchange and quoted on each quotation service on which similar
securities issued by the Company are then listed or quoted; (v) provide a
transfer agent and registrar for all Shares registered pursuant to the
Registration Statement and a CUSIP number for all such Shares; (vi) otherwise
use reasonable efforts to comply with all applicable rules and regulations of
the SEC; and (vii) file the documents required of the Company and otherwise
use reasonable efforts to maintain requisite blue sky clearance in (A) all
jurisdictions in which any of the Shares are originally sold and (B) all
other states specified in writing by Purchaser, provided as to clause (B),
however, that the Company shall not be required to qualify to do business or
consent to service of process in any state in which it is not now so
qualified or has not so consented.
1.7 PROSPECTUS SUPPLEMENTS. The Company shall furnish to
Purchaser upon request a reasonable number of copies of a supplement to or an
amendment of such prospectus as
3
may be necessary in order to facilitate the public sale or other disposition
of all or any of the Shares held by Purchaser.
1.8 RULE 144. With a view to making available to
Purchaser the benefits of Rule 144 (or its successor rule) promulgated under
the Securities Act ("Rule 144") and any other rule or regulation of the SEC
that may at any time permit Purchaser to sell Shares to the public without
registration, the Company covenants and agrees to: (i) make and keep public
information available, as those terms are understood and defined in Rule 144,
until the earlier of (A) such date as all of the Shares may be resold
pursuant to Rule 144(k) or (B) such date as all of the Shares shall have been
resold; (ii) use reasonable efforts to file with the SEC in a timely manner
all reports and other documents required of the Company under the Securities
Act and under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"); and (iii) furnish to Purchaser upon request, as long as Purchaser owns
any Shares, (A) a written statement by the Company that it has complied with
the reporting requirements of the Securities Act and the Exchange Act, (B) a
copy of the most recent annual report on form 10-K or quarterly report of the
Company on form 10-Q, and (C) such other information as may be reasonably
requested in order to avail Purchaser of any rule or regulation of the SEC
that permits the selling of any such Shares without registration.
1.9 SELLING PROCEDURES. In the event Purchaser intends
to sell the Shares pursuant to the Registration Statement, Purchaser shall
give the Company three (3) business days' notice of its intent to sell in
reliance on such Registration Statement (the "Notice of Sale"). The Company
may refuse to permit Purchaser to resell any Shares pursuant to the
Registration Statement; provided, however, that in order to exercise this
right, the Company must deliver a certificate in writing within three (3)
business days following the Notice of Sale to Purchaser to the effect that
amendment of such Registration Statement is necessary because a sale pursuant
to the Registration Statement in its then-current form could constitute a
violation of the federal securities laws. In such an event, the Company shall
use reasonable efforts to amend the Registration Statement if necessary and
take all other actions necessary to allow such sale under the federal
securities laws, and shall notify Purchaser promptly after it has determined
that such sale has become permissible under the federal securities laws.
Notwithstanding the foregoing, the Company shall not under any circumstances
be entitled to exercise its right to refuse to permit the resale of any
Shares pursuant to the Registration Statement more than three (3) times in
any twelve (12) month period, and each such period during which sales in
reliance upon the Registration Statement may be prohibited shall not exceed
sixty (60) days. Purchaser hereby covenants and agrees that it will not sell
any Shares pursuant to the Registration Statement during the periods sales in
reliance upon the Registration Statement are prohibited as set forth in this
Section 1.9.
1.10 PURCHASER INFORMATION. Purchaser covenants that it
will promptly notify the Company of any changes in the information set forth
in the Registration Statement regarding Purchaser or its "Plan of
Distribution."
1.11 TERMINATION OF REGISTRATION RIGHTS. Purchaser shall
not be entitled to exercise any right provided for in, nor shall the Company
have any continuing obligation under, this Section 1 after the earlier of (a)
such time as Purchaser can sell all of the Shares within a given three-month
period without compliance with the registration requirements of the
Securities
4
Act pursuant to Rule 144 and (b) the date when the aggregate number of shares
of Common Stock of the Company held by Purchaser is less than 7.0% of the
total number of outstanding shares of the Common Stock of the Company
(assuming the full conversion and exercise of all convertible and exercisable
securities of the Company) (the "Minimum Purchaser Interest"), at which time
Purchaser's registration rights herein shall terminate and shall be of no
further force and effect regardless of any subsequent increases in
Purchaser's stock ownership interest in the Company. For purposes of
determining whether Purchaser owns the Minimum Purchaser Interest if (i)
Purchaser timely delivers to the Company a Purchase Election pursuant to
which Purchaser elects to purchase Offered Qualifying Securities and (ii) the
Purchase Right Settlement Date takes place after the Qualifying Closing for
any particular Qualifying Securities, then for the period commencing with the
Qualifying Closing and ending on the Purchase Right Settlement Date, the
calculation of the Minimum Purchaser Interest shall exclude the particular
Qualifying Securities purchased at such Qualifying Closing.
1.12 REGISTRATION RIGHTS DATE. For purposes of this
Agreement, the Registration Rights Date shall be: (i) June 30, 2003, if the
Company has received approval from the U.S. Food and Drug Administration or
any successor entity thereto of a minimum of two Products (as hereinafter
defined) for the human clinical treatment of HIV (the "Minimum Product
Approvals") by January 1, 2002 or (ii) June 30, 2002 if Minimum Product
Approvals have not been obtained by January 1, 2002. "Products" shall have
the meaning set forth in that certain Collaboration Agreement between the
parties hereto, dated as of the date hereof (the "Collaboration Agreement").
SECTION 2
INDEMNIFICATION AND CONTRIBUTION
2.1 INDEMNIFICATION BY THE COMPANY. The Company agrees
to indemnify and hold harmless Purchaser, each of Purchaser's directors,
officers and U.S. wholly-owned subsidiaries, and each person, if any, who
controls Purchaser within the meaning of the Act or the Exchange Act, from
and against any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) to which they may become subject (under the
Securities Act or otherwise) insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or
are based upon any untrue statement of a material fact contained in a
Registration Statement delivered or circulated by Purchaser in connection
with a sale of Company securities by Purchaser, or arise out of any failure
by the Company to fulfill any undertaking included in the Registration
Statement, and the Company will, as incurred, reimburse Purchaser and such
persons for any legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim;
provided, however, that the Company shall not be liable in any such case to
the extent that such loss, claim, damage or liability arises out of, or is
based upon (i) an untrue statement made in such Registration Statement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of Purchaser specifically for use in preparation of
the Registration Statement, (ii) the failure of Purchaser to comply with the
covenants and agreements contained in Section 3.2 hereof, or (iii) any untrue
statement in any prospectus that is corrected in any subsequent prospectus
that was delivered to Purchaser prior to the pertinent sale or sales by
Purchaser.
5
2.2 INDEMNIFICATION BY PURCHASER. Purchaser agrees to
indemnify and hold harmless the Company, each of the Company's Affiliates (as
defined below), directors and officers, and each person, if any, who controls
the Company within the meaning of the Act or the Exchange Act, from and
against any losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) to which they may become subject (under the Securities
Act or otherwise) insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of, or are based upon
(i) an untrue statement made in such Registration Statement in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of Purchaser specifically for use in preparation of the Registration
Statement, (ii) the failure of Purchaser to comply with the covenants and
agreements contained in Section 3.2 hereof, or (iii) any untrue statement in
any prospectus that is corrected in any subsequent prospectus that was
delivered to Purchaser prior to the pertinent sale or sales by Purchaser, and
Purchaser will, as incurred, reimburse the Company and such persons for any
legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim; provided, however,
that Purchaser shall not be liable for any amount in excess of the amount by
which the net amount received by Purchaser from the sale of the Shares to
which such loss relates minus the amount of any damages which Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
2.3 INDEMNIFICATION PROCEDURES. Promptly after receipt
by any indemnified person of a notice of a claim or the beginning of any
action in respect of which indemnity is to be sought against an indemnifying
person pursuant to this Section 2, such indemnified person shall notify the
indemnifying person in writing of such claim or of the commencement of such
action, and, subject to the provisions hereinafter stated, in case any such
action shall be brought against an indemnified person and the indemnifying
person shall have been notified thereof, the indemnifying person shall be
entitled to participate therein, and, to the extent that it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to the
indemnified person. After notice from the indemnifying person to such
indemnified person of the indemnifying person's election to assume the
defense thereof, the indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate in the reasonable judgment of the indemnified person for the
same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying
person.
2.4 CONTRIBUTION. If the indemnification provided for in
this Section 2 is unavailable to or insufficient to hold harmless an
indemnified party under Section 2.1 or 2.2 above in respect of any losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to therein, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the Company on
the one hand and Purchaser on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement
6
of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company on the one hand or
Purchaser on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and Purchaser agree that it would not be just and equitable if
contribution pursuant to this Section 2.4 were determined by pro rata
allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 2.4. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, or liabilities (or actions in respect thereof) referred to
above in this Section 2.4 shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. 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.
2.5 CONTINUING OBLIGATIONS. The obligations of the
Company and Purchaser under this Section 2 shall survive the completion of
the offering of the Shares pursuant to the Registration Statement and shall
be in addition to any liability which the Company and Purchaser may otherwise
have.
SECTION 3
RESTRICTIONS ON TRANSFERABILITY OF SHARES:
COMPLIANCE WITH SECURITIES ACT
3.1 RESTRICTIONS ON TRANSFERABILITY. "Restricted
Securities" (as hereinafter defined) shall not be transferable in the absence
of a registration under the Securities Act or an exemption therefrom or in
the absence of compliance with any term of this Agreement or the Stock
Purchase Agreement, including without limitation Sections 3.3 and 5 hereof.
The Company shall be entitled to give stop transfer instructions to its
transfer agent with respect to Restricted Securities in order to enforce the
foregoing restrictions.
3.2 COMPLIANCE WITH SECURITIES ACT. Purchaser hereby
covenants with the Company not to make any sale of Restricted Securities
except (A) in accordance with the terms of this Agreement, including without
limitation Sections 3.3 and 5 hereof and (B) either (i) in accordance with a
registration statement covering the resale of the applicable Restricted
Securities, as the case may be, that has been declared effective by the SEC,
in which case Purchaser covenants to comply with the requirement of
delivering a current prospectus, or (ii) in accordance with Rule 144, in
which case Purchaser covenants to comply with Rule 144, or (iii) subject to
this Section 3.2, in connection with a private placement by Purchaser made in
compliance with all applicable rules and regulations of the SEC in effect at
such time. Purchaser further acknowledges and agrees that such Restricted
Securities are not transferable on the books of the Company unless the
certificate submitted to the Company's transfer agent evidencing such
Restricted Securities is accompanied by a separate certificate executed by an
officer of, or other person duly authorized by, Purchaser in the form
attached hereto as Exhibit B.
7
3.3 RIGHT OF FIRST REFUSAL.
Except as otherwise expressly provided in this Section 3.3,
in the event Purchaser desires to transfer any or all of its Restricted
Securities, Purchaser must deliver a notice in writing by certified mail
("Notice") to the Company stating (A) its bona fide intention to sell or
transfer such securities, (B) the number of such Restricted Securities to be
sold or transferred, (C) the price, if any, for which Purchaser proposes to
sell or transfer such Restricted Securities, and (D) the name of the proposed
purchaser or transferee. In the event the proposed transfer is partially or
completely in exchange for assets other than cash, then such assets shall be
deemed to have a cash value in the amount determined by the Company's Board
of Directors in its sole good faith opinion, in which case such cash value
ascertained by the Board, when added to any cash to be exchanged and then
divided by the number of Restricted Securities to be transferred, shall be
deemed the price per security set forth in the Notice.
The Company shall then have an exclusive, irrevocable
option (the "Company Option"), at any time within thirty (30) days of receipt
of the Notice, to purchase some or all of the Restricted Securities to which
the Notice refers at the price per security specified in the Notice (as
determined above). The Company shall exercise the Company Option by written
notice signed by an officer of the Company and delivered or mailed to the
Purchaser (the "Company Settlement Notice"), which notice shall specify the
time, place and date for settlement of such purchase.
Within thirty (30) days of receipt of the Company
Settlement Notice, the Purchaser must deliver to the Company all certificates
or other related documentation for the securities being acquired by the
Company which are not already in the Company's custody, together with proper
assignments in blank of the Restricted Securities with signatures properly
guaranteed and with such other documents as may be required by the Company to
provide reasonable assurance that each necessary endorsement is genuine and
effective, and the Company must thereupon deliver to the Purchaser full cash
payment for the Restricted Securities being acquired, provided that if the
terms of payment set forth in the Notice were other than cash against
delivery, the Company shall pay for said securities as described above. In
the event the Company notifies Purchaser that it is not interested in the
purchase of the Restricted Securities or fails to give Purchaser timely
notice of its interest, Purchaser shall be free to sell or transfer the
Restricted Securities to any third party, subject to the restrictions in this
Agreement. The Company may at any time freely assign the Company Option to
any third party.
Notwithstanding anything to the contrary herein, the
Company Option shall not apply with respect to Permitted Sales (as defined
below) which (i) to Purchaser's knowledge are not made to any one purchaser
(including any Affiliates of such Purchaser, if any) in an amount exceeding
the lesser of (x) an aggregate of five million dollars ($5,000,000) in
Company securities and (z) 300,000 Shares (the "Maximum Purchase Amount") and
(ii) with respect to which Purchaser has obtained a written agreement from
the appropriate broker or representative to allocate no more than the Maximum
Purchase Amount to any one purchaser (including any Affiliates of such
purchaser, if any). For purposes of this Section 3.3, "Permitted Sales" shall
mean sales registered under the Securities Act or pursuant to Rule 144.
8
3.4 MARKET STAND-OFF AGREEMENT.
Purchaser hereby agrees that, during the period of duration
specified by the Company pursuant to the request of an underwriter of Common
Stock or other securities of the Company following the effective date of a
registration statement of the Company filed under the Act, Purchaser shall
not, to the extent requested by the Company and such underwriter, directly or
indirectly sell, offer to sell, contract to sell (including, without
limitation, any short sale), grant any option to purchase or otherwise
transfer or dispose of any securities of the Company held by it at any time
during such period except Common Stock included in such registration (a
"Black-Out"); provided, however, the duration of any such Black-Out shall not
exceed ninety (90) consecutive days; and provided further that there shall be
a minimum of ninety (90) consecutive days per calendar year during which
Purchaser shall not be subject to a Black-Out pursuant to this Section 3.4.
The foregoing notwithstanding, Purchaser shall not be subject to any
Black-Out unless all executive officers and directors (with the exception of
any Purchaser Representative or Purchaser Designee) of the Company who own
shares of Common Stock of the Company enter into similar agreements and all
other holders of registration rights granted by the Company are subject to or
obligated to enter into similar agreements providing for such Black-Out.
SECTION 4
ADDITIONAL PURCHASE RIGHT
4.1 PURCHASE RIGHT. If, prior to the Termination Date
(as defined below), the Company sells Qualifying Securities (as defined
below), then the Company will offer to Purchaser the right to purchase that
number of Qualifying Securities (the "Offered Qualifying Securities") that
are necessary to prevent a reduction in Purchaser's percentage ownership of
the Company's capital stock, calculated on a fully-diluted basis (assuming
full conversion and exercise of all convertible and exercisable securities)
immediately prior to the closing (the "Qualifying Closing") of such sale of
Qualifying Securities. The Company shall deliver written notice to Purchaser
describing the material terms of such Qualifying Securities and the number of
Offered Qualifying Securities Purchaser is entitled to purchase 45 days prior
to or within fifteen (15) days after the Qualifying Closing (the "Company
Notice"). Purchaser shall be permitted to purchase all or any portion of such
Offered Qualifying Securities by delivering written notice to the Company of
its election to purchase (a "Purchase Election") within thirty (30) days
after receipt of the Company Notice, and the closing of the sale of the
Offered Qualifying Securities to Purchaser shall occur on the "Purchase Right
Settlement Date". For purposes of this Agreement, the Purchase Right
Settlement Date shall be the fifth business day following the later to occur
of (i) the date of the Qualifying Closing and (ii) the date Purchaser
delivers the Purchase Election to the Company. The Company shall notify
Purchaser in writing that the Qualifying Closing has taken place (including
the date on which the Qualifying Closing took place) no later than three
business days prior to the applicable Purchase Right Settlement Date. Neither
the Company nor Purchaser will be obligated to effect the sale and purchase
of the Offered Qualifying Securities unless the Qualifying Closing shall have
occurred. If purchaser makes a Purchase Election, the Qualifying Closing
occurs and purchaser nevertheless fails to purchase the Offered Qualifying
Securities on the Purchase Right Settlement Date, Purchaser's purchase rights
under this Section 4.1 arising out of the sale of the Qualifying Securities
sold at
9
such Qualifying Closing shall terminate and be of no further force and effect
under this Agreement, unless the reason for such failure to purchase the
Offered Qualifying Securities is a breach by the Company of its obligations
hereunder. If Purchaser shall elect to purchase any such Offered Qualifying
Securities, the Offered Qualifying Securities which it shall have elected to
purchase shall be issued and sold to Purchaser on the same terms and
conditions and at the same price as the Qualifying Securities are issued and
sold to third parties except that (i) if such Qualifying Securities are
issued for consideration other than cash, Purchaser shall pay the fair market
value thereof, as determined in good faith by the Board of Directors of the
Company, in cash, (ii) if such Qualifying Securities are issued in connection
with a Non-Standard Issuance of Stock (as defined below) of the Company, then
Purchaser shall pay the fair market value of the Offered Qualifying
Securities upon the date of purchase as determined in good faith by the Board
of Directors of the Company, and (iii) if such Qualifying Securities include
securities convertible into or exercisable for any shares of any class of
capital stock of the Company, then Purchaser shall be able to purchase
Offered Qualifying Securities at fair market value of the respective
securities at the date of purchase, as determined in good faith by the Board
of Directors of the Company, only upon the exercise of the security by the
respective security holder. In the latter case, Company shall provide
Purchaser with prompt notice of such exercise, at which time Purchaser shall
have thirty (30) days after the date of such notice to make a full cash
payment to Company for the Offered Qualifying Securities. If Purchaser fails
to make a full cash payment to Company by such date, Purchaser's purchase
rights under this Section 4.1 shall terminate and be of no further force and
effect under this Agreement.
4.2 DEFINITIONS. For purposes of this Section 4, the
following terms shall have the following meanings:
(a) "Non-Standard Issuance of Stock" of the Company
shall mean Qualifying Securities that are (i) securities issued pursuant to
the acquisition of another business entity or business segment of any such
entity by the Company by merger, purchase of substantially all the assets or
other reorganization, including without limitation securities that may in the
future be issued in connection with the Company's August 28, 1997 acquisition
of Avid Corporation; (ii) securities issued in connection with any
borrowings, direct or indirect, from financial institutions or other persons
by the Company, whether or not presently authorized, including any type of
loan or payment evidenced by any type of debt instrument, provided such
borrowings do not have any equity features including warrants, options or
other rights to purchase capital stock and are not convertible into capital
stock of the Company; (iii) securities issued to vendors, customers,
licensors or to other persons in similar commercial situations with the
Company if such issuance is approved by the Company's Board of Directors,
including without limitation securities subject to issuance in connection
with that certain License Agreement by and between the Company and Mitsubishi
Chemical Corporation, dated June 17, 1997; (iv) securities issued in
connection with obtaining lease financing, whether issued to a lessor,
guarantor or other person; or (v) securities issued in a firm commitment
underwritten public offering pursuant to a registration under the 1933 Act.
(b) "Qualifying Securities" shall mean all shares
of, or securities convertible into or exercisable for any shares of, any
class of capital stock of the Company other than: (i) securities issued to
employees, consultants, officers or directors of the Company pursuant to any
stock option, stock purchase or stock bonus plan, agreement or arrangement
10
approved by the Company's Board of Directors; (ii) securities issued pursuant
to the conversion or exercise of convertible or exercisable securities
outstanding on the date of this Agreement; (iii) securities that may in the
future be issued in connection with that certain Rights Agreement by and
between the Company and American Stock Transfer & Trust Company, dated
February 1, 1999 (the "Rights Agreement"), and (iv) securities issued in
connection with any stock split, stock dividend or recapitalization of the
Company which does not alter Purchaser's percentage ownership of the voting
securities of the Company.
(c) "Termination Date" shall mean the first to occur
of (i) the date that Purchaser holds less than the Minimum Purchaser
Interest, and (ii) the date that Purchaser exercises registration rights
pursuant to Section 1 hereof.
SECTION 5
COVENANTS OF PURCHASER
5.1 TRANSFER RESTRICTION. Purchaser hereby agrees that
during the time period commencing as of the Effective Date until the
Registration Rights Date (with such time period being referred to as the
"Initial Restricted Period"), that neither it nor any affiliate (as defined
in Rule 144) (each an "Affiliate") of Purchaser shall, directly or indirectly
sell, offer to sell, contract to sell (including, without limitation, any
short sale), grant any option to purchase or otherwise transfer or dispose of
any Restricted Securities. For so long as the aggregate number of shares of
Common Stock of the Company held by Purchaser exceeds the Minimum Purchaser
Interest, Purchaser hereby also agrees that during the time period commencing
as of the last day of the Initial Restricted Period until the second
anniversary of the Registration Rights Date (with such time period being
referred to as the "Follow-On Restricted Period"), that neither it nor any
Affiliate shall, directly or indirectly sell, offer to sell, contract to sell
(including, without limitation, any short sale), grant any option to purchase
or otherwise transfer or dispose of any of the Restricted Securities at any
time during the Follow-On Restricted Period other than in compliance with the
volume restrictions then set forth under Rule 144 (even if such volume
limitations are not applicable to Purchaser under such rule). In order to
enforce the foregoing covenant, the Company may impose legends and/or
stop-transfer instructions with respect to the Restricted Securities held by
Purchaser (and the Restricted Securities of every other person subject to the
foregoing restriction) until the end of such periods. Following the last day
of the Follow-On Restricted Period, any restrictions under this Section 5.1
shall terminate and be of no further force and effect.
5.2 STANDSTILL PROVISIONS.
Except as provided in Section 5.3 below:
(a) Commencing as of the Effective Date and through
June 30, 2005 (the "Standstill Period"), Purchaser (including all Affiliates)
shall not acquire "Beneficial Ownership" (as hereinafter defined) of any
additional shares of Common Stock of the Company, any securities convertible
into or exchangeable for Common Stock, or any other right to acquire Common
Stock, except by way of stock dividends or other distributions or offerings
made available to holders of Common Stock generally, from the Company or any
other person or
11
entity, if after giving effect to such acquisition of additional shares, the
total Beneficial Ownership of Purchaser (together with all of its Affiliates)
shall be greater than twenty one percent (21%) (the "Beneficial Ownership
Limitation") of the Company's total Common Stock from time to time
outstanding without the prior written consent of the Company, which consent
may be withheld in its sole discretion; PROVIDED, HOWEVER, that in no event
shall the Company's sale or issuance to Purchaser of Restricted Securities
constitute a violation of this Section 5.2 .
(b) It shall not be a violation of the prohibition
contained in Section 5.2(a) if Purchaser or any of its Affiliates shall
exceed the Beneficial Ownership Limitation solely as a result of an
acquisition or retirement of shares of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the proportionate number
of shares of Common Stock Beneficially Owned by Purchaser or any of its
Affiliates, provided that Purchaser and its Affiliates do not thereafter
acquire Beneficial Ownership of additional shares of Common Stock while still
exceeding the Beneficial Ownership Limitation.
(c) Beneficial Ownership by Purchaser's benefit
plans or any of Purchaser's Affiliates' benefit plans that are maintained for
Purchaser's employees or Purchaser's Affiliates' employees of up to an
aggregate of two percent (2%) of the total outstanding shares of Common Stock
from time to time outstanding shall not be considered to constitute
Beneficial Ownership by Purchaser and shall be excluded from the calculation
of the Beneficial Ownership Limitation.
(d) During the Standstill Period, neither Purchaser
nor any Affiliate shall (i) make, or in any way participate, directly or
indirectly, in any "solicitation" of "proxies" to vote (as such terms are
used in the proxy rules of the SEC) or seek to advise, encourage or influence
any person or entity with respect to the voting of any shares of capital
stock of the Company, initiate, propose or otherwise solicit stockholders of
the Company for the approval of one or more stockholder proposals or induce
or attempt to induce any other individual, firm, corporation, partnership or
other entity to initiate any stockholder proposal or (ii) deposit any
securities of the Company having the right to vote generally in any election
of directors of the Company ("Voting Stock") into a voting trust or subject
any shares of Voting Stock to any arrangement or agreement with respect to
the voting of such securities or (iii) form, join or in any way participate
in or otherwise encourage the formation of a "13D Group" (as defined below)
with respect to any securities of the Company.
(e) During the Standstill Period, the Company shall
notify Purchaser in writing within forty-eight (48) hours in the event that
the Company becomes aware that any person or 13D Group has acquired
Beneficial Ownership of shares of Common Stock representing 5% or more of the
then total outstanding shares of Common Stock.
5.3 TOLLING; TERMINATION UPON CERTAIN EVENTS.
Notwithstanding the foregoing, in the event that:
(a) a "Person" (as defined below) has taken all
steps legally required to commence a formal tender offer, or has publicly
announced its intention to commence a formal tender offer; or
12
(b) the Board of Directors of the Company has made a
decision to dispose of all or substantially all of the assets of the Company,
or to merge or consolidate with another entity (other than a merger or
consolidation effected for tax purposes or to change the domicile of the
Company to any state in the United States) (an event described in either
5.3(a) or (b) shall be a "Tolling Event") then:
(i) the Company shall immediately notify
Purchaser in writing of the occurrence of such Tolling Event and the facts
and circumstances of such Tolling Event (a "Tolling Notice"); and
(ii) Section 5.2 shall toll and have no force
and effect beginning immediately upon the occurrence of such Tolling Event
(whether or not Purchaser has received a Tolling Notice) and ending on the
Reset Date. The "Reset Date" shall be (A) if Purchaser has not commenced a
formal tender offer or has not participated directly in the "solicitation" of
"proxies" to vote (as such terms are used in the proxy rules of the SEC) for
a business combination transaction involving the Company during the pendency
of such Tolling Event, the date that the Company notifies Purchaser in
writing that such Tolling Event has been terminated or abandoned (a
"Termination Notice"); and (B) if Purchaser has commenced a formal tender
offer or has participated directly in the "solicitation" of "proxies" to vote
(as such terms are used in the proxy rules of the SEC) for a business
combination transaction involving the Company (such commencement or
participation referred to herein as a "Purchaser Proposal") prior to receipt
by Purchaser of a Termination Notice, the date that is the earlier of (x) six
(6) months following the date of Purchaser's receipt of a Termination Notice
and (y) the date Purchaser withdraws or ceases to actively pursue any
Purchaser Proposal.
On the Reset Date, Section 5.2 shall immediately apply to Purchaser and its
Affiliates with full force and effect, except that the Beneficial Ownership
Limitation shall be adjusted to equal Purchaser's Beneficial Ownership
interest as of the Reset Date. Notwithstanding anything to the contrary in
this Agreement, except as specifically provided in Section 7 of this
Agreement nothing in this Agreement shall be deemed to be a waiver of any of
the Company's rights under the Rights Agreement, which shall at all times
remain in full force and effect.
5.4 DEFINITIONS.
(a) A Person, Purchaser or an Affiliate shall be
deemed to be the "Beneficial Owner" of or to have acquired "Beneficial
Ownership" of and shall be deemed to "beneficially own" any securities:
(i) which such Person or any such Person's
Affiliates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's
Affiliates has (A) the right to acquire, exercisable immediately, pursuant to
any agreement, arrangement or understanding (other than customary
arrangements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon the exercise
of conversion rights or exchange rights, warrants or options or otherwise;
PROVIDED, HOWEVER, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, securities tendered
13
pursuant to a tender or exchange offer made by or on behalf of such Person or
any of such Person's Affiliates until such tendered securities are accepted
for purchase or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; PROVIDED, HOWEVER, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person in response to
a public proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations promulgated under the Exchange Act
and (2) is not also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such
Person's Affiliates has any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated by
the proviso to Section 5.4(a)(ii)(B)) or disposing of any securities of the
Company.
Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, the phrase, "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially under Rule 13d-3 of the Exchange
Act.
(b) "Person" as used herein shall mean any
individual, corporation, partnership, firm, association, unincorporated
organization, joint venture, trust or other entity, and shall include any
successor (by merger or otherwise) of such entity, or any of the foregoing
acting together as a group, but shall specifically exclude Purchaser (or any
Affiliate of Purchaser or any 13D Group of which Purchaser is a member).
(c) "Restricted Securities" as used herein shall
mean the Shares and any Offered Qualifying Securities issued to Purchaser, as
well as any securities of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange
for or replacement of such Shares or Offered Qualifying Securities.
(d) "13D Group" as used herein shall mean any group
of Persons formed for the purpose of acquiring, holding, voting or disposing
of Voting Stock, which would be required under Section 13(d) of the Exchange
Act, and the rules and regulations thereunder (as in effect, and based on
legal interpretations thereof existing, on the date hereof), to file a
statement on Schedule 13D with the SEC as a "person" within the meaning of
Section 13(d)(3) of the Exchange Act if such group beneficially owned Voting
Stock representing more than 5% of any class of Voting Stock then outstanding.
SECTION 6
NOMINATION FOR ELECTION TO COMPANY BOARD OF DIRECTORS
14
6.1 INITIAL BOARD DESIGNEE. Promptly following the
Effective Date, the Company shall (i) increase to eight the number of members
constituting the Board of Directors of the Company and (ii) nominate and
support for election to the Company's Board of Directors an individual
designated to the Company in writing by Purchaser on or before the Effective
Date (the "Purchaser Representative"), to the class of directors whose term
expires at the 2002 annual meeting of stockholders of the Company, to fill
the vacancy resulting from the expansion of the Board of Directors.
6.2 CONTINUING RIGHTS.
(a) From and after the Effective Date, subject to
the terms and conditions of this Section 6, upon the request of Purchaser,
the Company shall use its reasonable efforts to cause its Board of Directors
to nominate and support for election such number of individuals designated in
writing by Purchaser ("Purchaser Designees"), if any, which together with the
Purchaser Representative does not exceed the "Permitted Number of Purchaser
Representatives," as defined in Section 6.2 (b) hereof. Notwithstanding the
foregoing, the Company shall have no obligation under this Section 6 with
respect to any Purchaser Designee or Purchaser Representative who is not
approved by the Company's Board of Directors to serve on the Company's Board
of Directors, which approval shall not be unreasonably withheld. Should a
Purchaser Representative or Purchaser Designee be approved by the Company's
Board of Directors, the Company hereby agrees that, with the exception of any
matters or materials addressing matters which in the good faith judgment of
the Company's Board of Directors (excluding any Purchaser Representative or
Purchaser Designee) may give rise to a potential or actual conflict of
interest, during the tenure of such Purchaser Representative's or Purchaser
Designee's service on the Company's Board, such Purchaser Representative or
Purchaser Designee shall be included in all Board meetings in which all other
non-executive members of the Company's Board are invited to attend in person
or by telephone and shall be provided with all copies of materials, whether
in paper, electronic or other format, that are provided to all other
non-executive members of the Company's Board.
(b) For purposes of this Section 6 the "Permitted
Number of Purchaser Representatives" shall equal the greater of (a) the
product rounded to the nearest whole number of (x) the total number of board
seats constituting the Company's Board of Directors and (y) the percentage of
the total number of outstanding shares of the Common Stock of the Company
held by Purchaser (assuming the full conversion and exercise of all
convertible and exercisable securities of the Company), and (b) one. When
rounding to the nearest whole number, the parties shall round down for
fractions greater than zero but less than one-half and shall round up for
fractions equal to or greater than one-half but less than one. If at any time
the total number of Purchaser Designees and Purchaser Representatives serving
on the Company's Board of Directors exceeds the Permitted Number of Purchaser
Representatives, Purchaser shall promptly take all appropriate action to
cause to resign that number of Purchaser Designees or Purchaser
Representatives as is required to make the remaining number of Purchaser
Representatives and Purchaser Designees conform to this Section 6.2 (b).
(c) Subject to the conditions set forth herein,
Purchaser shall have the right to designate any replacement for a Purchaser
Representative or Purchaser Designee, upon the death, resignation,
retirement, disqualification or removal from office for other cause of such
15
director. Such replacement must conform to the standards and conditions set
forth in this Section 6.
(d) Any and all of the Company's obligations
pursuant to this Section 6 shall terminate on the date when the aggregate
number of shares of Common Stock of the Company held by Purchaser is less
than the Minimum Purchaser Interest. At such time of termination of the
Company's obligations under this Section 6, Purchaser shall promptly take all
appropriate action to cause to resign all Purchaser Representatives and
Purchaser Designees constituting the Company's Board of Directors at such
time.
SECTION 7
NO RESTRICTIONS
7.1 RIGHTS AGREEMENT.
(a) From the Effective Date up until such time as
Purchaser holds less than the Minimum Purchaser Interest, the Company will
take all necessary steps to ensure that neither Purchaser nor any of its U.S.
wholly-owned subsidiaries, will be deemed to be an Acquiring Person (as
defined in the Rights Agreement), that the Distribution Date (as defined in
the Rights Agreement) will not be deemed to occur and that the Rights (as
defined in the Rights Agreement) will not separate from the Common Stock as a
result of entering into this Agreement, the Stock Purchase Agreement or any
of the Related Agreements (as defined in the Stock Purchase Agreement) or the
consummation of the transactions contemplated hereby or thereby (other than
any purchases permitted under Section 5.3 hereof or otherwise which cause
Purchaser's Beneficial Ownership of shares of Common Stock to exceed 21% of
the total shares of Common Stock of the Company outstanding from time to time
hereafter) or as a result of the acquisition by Purchaser of Beneficial
Ownership of shares of Common Stock not exceeding twenty-one percent (21%) of
the total shares of Common Stock outstanding from time to time hereafter.
(b) From the Effective Date up until such time as
Purchaser holds less than the Minimum Purchaser Interest, the Company will
not amend, interpret or enforce the Rights Agreement or adopt any new
stockholder rights agreement or similar agreement, plan or measure, if such
amendment, interpretation, enforcement or adoption would prevent Purchaser or
any of its U.S. wholly-owned subsidiaries from acquiring or holding
Beneficial Ownership of shares of Common Stock not exceeding twenty-one
percent (21%) of the total shares of Common Stock outstanding from time to
time hereafter.
(c) For the period commencing as of the date of this
Agreement and ending on the earlier of (x) the Effective Date and (y)
termination of this Agreement (the "Interim Period"), neither Purchaser nor
its U.S. wholly-owned subsidiaries shall be deemed to be an Acquiring Person
(as defined in the Rights Agreement), the Distribution Date (as defined in
the Rights Agreement) will not be deemed to occur and the Rights (as defined
in the Rights Agreement) will not separate from the Common Stock as a result
solely of Purchaser entering into this Agreement and being deemed the
Beneficial Owner (as defined in the Rights
16
Agreement) of the Shares; provided that Purchaser does not become the
Beneficial Owner of any securities of the Company in addition to the Shares
during the Interim Period.
17
SECTION 8
MISCELLANEOUS
8.1 WAIVERS AND AMENDMENTS. The terms of this Agreement
may be waived or amended only with the written consent of the Company and
Purchaser.
8.2 GOVERNING LAW. This Agreement shall be governed in
all respects by and construed in accordance with the laws of the State of
Delaware without any regard to conflicts of laws principles.
8.3 DISPUTE RESOLUTION. The parties hereto agree that
any disputes which may arise during the term of this Agreement which relate
to either party's rights and/or obligations hereunder shall be resolved in
accordance with the ADR provisions contained in Exhibit 8.3 hereto (the "ADR
Provisions"), except that either party may seek judicial relief or
enforcement to pursue equitable remedies not addressed by the ADR Provisions,
including without limitation specific performance or injunctive relief, to
pursue a claim of fraudulent or otherwise inequitable treatment under the ADR
proceedings or to otherwise enforce a judgment under the ADR proceedings.
8.4 SUCCESSORS AND ASSIGNS. The provisions hereof shall
inure to the benefit of, and be binding upon, the successors and permitted
assigns of the parties to this Agreement. Notwithstanding the foregoing,
neither party shall assign this Agreement without the prior written consent
of the other party, except that (i) Purchaser may assign this Agreement to
any direct or indirect wholly-owned domestic (i.e., incorporated in a state
in the U.S.) subsidiary of Purchaser provided, however, that no such
assignment shall relieve or limit Purchaser's obligations hereunder, and (ii)
this Agreement may be assigned by either party without such prior written
consent to any entity that acquires all or substantially all of its business,
whether by merger, consolidation, sale of assets or other similar transaction.
8.5 ENTIRE AGREEMENT. This Agreement, the Stock Purchase
Agreement and the Related Agreements constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof. Upon the Effective Date, this Agreement shall completely supersede
the Confidentiality Agreement dated October 28, 1998, as amended on May 20,
1999 ("Confidentiality Agreement"), between the Company and Purchaser, which
shall as of the Effective Date be of no further force and effect. The
Confidentiality Agreement shall remain in full force and effect through the
earlier of: (i) the Effective Date, and (ii) the date the Confidentiality
Agreement expires or terminates pursuant to the terms thereof. The parties
hereto hereby agree to maintain as confidential the existence and terms of
this Agreement unless written consent is obtained by the other regarding the
proposed disclosure. Notwithstanding the foregoing, should disclosure be
otherwise required by law or by any regulatory agency, the parties hereby
agree to cooperate in good faith to limit disclosure to a mutually agreeable
extent and to obtain confidential treatment or a protective order.
8.6 NOTICES, ETC. All notices and other communications
required or permitted under this Agreement shall be in writing and may be
delivered in person, by facsimile, overnight delivery service or registered
or certified United States mail, addressed to the Company or the
18
Purchaser, as the case may be, at their respective addresses set forth below,
or at such other address as the Company or the Purchaser shall have furnished
to the other party in writing:
If to the Company:
Triangle Pharmaceuticals, Inc.
4 University Place
4611 University Drive
Durham, North Carolina 27707
Telephone: 919-493-5980
Facsimile: 919-493-5925
Attention: Chief Executive Officer and
General Counsel
Copy to:
Brobeck, Phleger & Harrison LLP
550 West "C" Street
Suite 1200
San Diego, CA 92101
Attention: John Denniston
If to the Purchaser:
Abbott Laboratories
Dept. 309; Bldg. AP30
200 Abbott Park Road
Abbott Park, IL 60064
Telephone: (847) 938-6863
Facsimile: (847) 938-5383
Attention: Senior Vice President, Pharmaceutical
Operations and
Senior Vice President, International Operations
Copy to:
General Counsel
Abbott Laboratories
Dept. 364; Building AP6D
100 Abbott Park Road
Abbott Park, IL 60064
Telephone: (847) 937-8906
Facsimile: (847) 938-6277
All notices and other communications shall be effective
upon actual receipt thereof by the person to whom notice is directed.
19
8.7 SEVERABILITY OF THIS AGREEMENT. If any provision of
this Agreement shall be judicially determined to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
8.8 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
8.9 EXPENSES. Except as set forth in the ADR Provisions
and Section 8.12 hereof, the Company and Purchaser shall each bear its own
expenses incurred on its behalf with respect to this Agreement and the
transactions contemplated hereby, including fees of legal counsel; provided,
however, that the Company and Purchaser shall share equally the fee(s)
required to be paid in connection with the filing(s) required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, in
connection with the transactions contemplated by this Agreement and the other
Triangle-Abbott Alliance Agreements.
8.10 NO THIRD PARTY RIGHTS. Except where expressly
provided to the contrary, nothing in this Agreement shall create or be deemed
to create any rights in any person or entity not a party of this Agreement.
8.11 SEC RULE CHANGES. To the extent necessary to give
effect to the agreements and understandings of the parties set forth in this
Agreement, any reference in this Agreement to any forms, rules, regulations
or procedures of the SEC or any provision of the Securities Act or the
Exchange Act existing as of the date of this Agreement shall be deemed to
refer to any modifying, supplementing or succeeding rules, regulations,
procedures or provisions as may exist from time to time after the date of
this Agreement.
8.12 ATTORNEYS' FEES. If any action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys' fees, costs and
necessary disbursements in addition to any other relief to which such party
may be entitled.
8.13 TERMINATION.
(a) OUTSIDE DATE. If the Effective Date has not
occurred within ninety (90) days from the execution of this Agreement (other
than through the failure of the party seeking to terminate this Agreement to
comply fully with its obligations under this Agreement or any of the other
Triangle-Abbott Alliance Agreements (as defined in the Collaboration
Agreement)) or such later date as the parties hereto may agree, either party
may terminate this Agreement by written notice to the other.
(b) TERMINATION OF COLLABORATION AGREEMENT. This
Agreement is subject to termination upon termination of the Collaboration
Agreement pursuant to the terms of Sections 16.5(b) and 16.5(c) of the
Collaboration Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
20
The foregoing agreement is hereby executed as of the date
first above written.
"COMPANY"
TRIANGLE PHARMACEUTICALS, INC., a
Delaware corporation
By: ____________________________________
Name: ____________________________________
Title: ____________________________________
"PURCHASER"
ABBOTT LABORATORIES, an Illinois
corporation
Name: ____________________________________
By: ____________________________________
Name: ____________________________________
Title: ____________________________________
21
Exhibit A
SYMBOL
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration
Statement, please provide us with the following information regarding
Purchaser.
1. Please state your organization's name exactly as it
should appear in the Registration Statement:
2. Have you or your organization had any position, office
or other material relationship within the past three years with the Company
or its affiliates other than as disclosed in the Prospectus included in the
Registration Statement?
_________ Yes _________ No
If yes, please indicate the nature of any such relationships below:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Exhibit B
SYMBOL
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
To: _____________________________
_____________________________
_____________________________
Attention: [__________]
The undersigned, Purchaser or an officer of, or other
person duly authorized by, Purchaser, hereby certifies that __________________
___________________________________ was Purchaser of the shares evidenced by
the attached certificate, and as such, proposes to transfer such shares on or
about ________ either (i) in accordance with the registration statement, file
number [__________], in which case Purchaser certifies that the requirement
of delivering a current prospectus has been complied with or will be complied
with in connection with such sale, or (ii) in accordance with Rule 144 under
the Securities Act of 1933, as amended ("Rule 144"), in which case Purchaser
certifies that it has complied with or will comply with the requirements of
Rule 144.
Print or type:
Name of Purchaser: ____________________________________________
Name of Individual
representing Purchaser
(if an Institution): ____________________________________________
Title of Individual
representing Purchaser
(if an Institution): ____________________________________________
Signature by: ____________________________________________
Purchaser or Individual
representing Purchaser: ____________________________________________
FOR IMMEDIATE RELEASE
Contact:
ABBOTT LABORATORIES TRIANGLE PHARMACEUTICALS, INC.
Melissa Brotz Nick Ellis
U.S. Media President and COO
(847) 935-3456 (919) 493-5980
Laureen Cassidy Carolyn Underwood
Media Outside the U.S. VP, Commercial Operations
(847) 938-7743 (919) 493-5980
John Thomas Douglas MacDougal
Investment Community Priscilla Harlan
(847) 938-2655 Feinstein Kean Partners, Inc.
(617) 577-8110
ABBOTT LABORATORIES AND TRIANGLE PHARMACEUTICALS
ANNOUNCE $335 MILLION WORLDWIDE ALLIANCE
TO MARKET SIX ANTIVIRAL PRODUCTS
ABBOTT PARK, Ill., and DURHAM, N.C. (June 3, 1999) -- Abbott Laboratories
(NYSE: ABT) and Triangle Pharmaceuticals, Inc. (Nasdaq: VIRS) today announced
a worldwide strategic alliance for six antiviral products. In the United
States, Abbott and Triangle will co-promote the four Triangle products
currently in development for HIV and hepatitis B (HBV), and Abbott's two HIV
protease inhibitors (PIs). Outside the United States, Abbott will have
exclusive sales and marketing rights for the four Triangle antivirals.
The agreement significantly expands Abbott's antiviral pharmaceutical
product portfolio -- which currently includes two HIV PIs: Norvir-Registered
Trademark- (ritonavir), approved in 1996, and ABT-378, currently in Phase III
development -- to include three nucleoside reverse transcriptase inhibitor
(NRTIs) and one non-nucleoside reverse transcriptase inhibitor (NNRTI),
medications commonly used for the treatment of HIV and HBV. The agreement
provides Abbott and Triangle with an unequaled development portfolio of all
marketed classes of HIV treatments.
"This alliance is a prime example of Abbott's strategy to partner with
top-quality companies, such as Triangle, whose products fit strategically
with our worldwide pharmaceutical business," said Arthur Higgins, Senior Vice
President, Pharmaceutical Operations at Abbott. "One of our goals is to be
the leading healthcare company in the HIV arena, and this agreement
strengthens our position worldwide by giving us access to every segment of
pharmaceutical intervention in HIV."
Abbott's HIV franchise is unique in that it offers a broad portfolio
across pharmaceutical, diagnostic and nutritional products for people living
with HIV and AIDS.
"Our success in bringing a number of HIV and HBV drug candidates forward
in development provided us with a unique situation to make a portfolio deal,"
said Dr. David Barry, Chairman and Chief Executive Officer at Triangle.
"Along the way, we resisted licensing away any of our global rights to the
drug candidates, thus increasing the opportunity for a deal with a single
strong partner rather than having to make numerous country-by-country deals
with multiple partners. Our strategic alliance with Abbott introduces a
strong international presence, additional strength in the U.S. market, and
the financial support to provide added stability to our development and
commercialization goals."
"This alliance positions the two companies to potentially launch at
least one new antiviral each year over the next four years," said Higgins.
In 1998 in the United States, NRTIs accounted for an estimated $885
million in antiviral sales, PIs accounted for $865 million and NNRTIs
accounted for approximately $100 million. Outside the United States, the
market for antiviral HIV treatment, which includes these three categories, is
estimated at $2 billion.
According to the Centers for Disease Control, HIV affects approximately
33 million people worldwide and approximately 650,000 to 950,000 Americans.
Hepatitis B is the ninth leading cause of death worldwide and affects
approximately 350 million people. Currently, only two treatments have been
approved for the treatment of chronic hepatitis B.
Among the four Triangle products Abbott will co-promote is Coactinon(TM)
(emivirine), formerly known at MKC-442, an NNRTI, currently in Phase III
clinical trials. Triangle expects to file a New Drug Application (NDA) for
Coactinon by the end of this year, while Abbott expects to submit a European
application in mid-2000.
Coviracil(TM) (emtricitabine), formerly known as FTC, an NRTI, is also
in Phase III clinical trials for the treatment of HIV and in Phase I/II for
HBV. An NDA for Coviracil for the treatment of HIV is expected to be filed
in 2000 with a European filing expected in 2001. Abbott also expects to file
an NDA for its investigational PI, ABT-378, in 2000.
The other two NRTIs included in the agreement are in earlier development
stages. DAPD, an NRTI, is in Phase I/II for the treatment of HIV. Triangle
plans to begin Phase I/II trials in HBV later this year. Phase I/II trials
with L-FMAU, a compound under investigation for the treatment of HBV, are
also planned for late 1999.
Under the terms of this agreement, Abbott will purchase approximately
6.57 million shares of Triangle's Common Stock at $18 per share.
Additionally, the agreement provides for non-contingent research funding of
$31.7 million, up to $185 million of contingent development milestone
payments and the sharing of future commercialization costs.
In addition, the partners plan to execute a manufacturing agreement
before closing that will allow Abbott to manufacture certain Triangle
products worldwide.
Triangle and Abbott will share profits and losses for all Triangle drug
candidates. Triangle will receive detailing fees and commissions on
incremental sales they generate for Abbott's protease inhibitors. In
addition, Abbott will have the right of first discussion to market future
Triangle compounds. Warburg Dillon Read acted as financial advisors to
Triangle in this alliance. Goldman Sachs acted as financial advisors to
Abbott in this alliance.
The closing of the agreement is subject to the satisfaction of several
conditions, including Hart-Scott-Rodino antitrust clearance and the
negotiation of the manufacturing agreement between the parties.
Triangle Pharmaceuticals, Inc., based in Durham, N.C., is engaged in the
development of new drug candidates primarily in the antiviral area, with a
particular focus on therapies for the human immunodeficiency virus, including
the acquired immunodeficiency syndrome and the hepatitis B virus. Prior to
their employment with Triangle, members of Triangle's management team played
instrumental roles in the identification clinical development and
commercialization of several leading antiviral therapies. More information
about Triangle's portfolio, management and product development strategy is
available on Triangle's website at http://www.tripharm.com.
Abbott Laboratories has been a leader in AIDS research since the early
years of the epidemic. In 1985, the company developed the first licensed
test to detect HIV in the blood, and remains the leader in HIV diagnostics.
Abbott retroviral and hepatitis tests are used to screen more than half of
the world's donated blood supply. In addition, Abbott developed the HIV
protease inhibitor, Norvir, and Advera-Registered Trademark-, a nutritional
supplement to meet the unique dietary needs of people living with HIV.
Abbott continues to conduct aggressive research on new treatments to fight
HIV and AIDS. Abbott is committed to supporting HIV/AIDS awareness programs
including the development of its Positive Partnership Program with POZ
magazine and HEALTH INSIGHTS & VIEWS patient newsletter. In addition, Abbott
supports numerous programs of AIDS Service Organizations (ASOs).
Abbott Laboratories is a global, diversified health care company devoted
to the discovery, development, manufacture and marketing of pharmaceutical,
diagnostic, nutritional and hospital products. The company employs 56,000
people and markets its products in more than 130 countries.
ABBOTT'S NEWS RELEASES AND OTHER INFORMATION ARE AVAILABLE ON THE
COMPANY'S WEB SITE AT http://www.abbott.com.
TRIANGLE PHARMACEUTICALS, INC. FORWARD LOOKING STATEMENT:
STATEMENTS IN THIS PRESS RELEASE MAY CONTINUE FORWARD-LOOKING STATEMENTS AND
ARE SUBJECT TO NUMEROUS RISKS AND UNCERTAINTIES, INCLUDING THE FAILURE OF THE
CLOSING TO TAKE PLACE DUE TO THE FAILURE OF CLOSING CONDITIONS, THE FAILURE
TO SUCCESSFULLY COMPLETE PIVOTAL CLINICAL TRIALS, TRIANGLE'S FUTURE CAPITAL
NEEDS, THE INABILITY TO COMMERCIALIZE COVIRACIL (EMTRICITABINE) AND DAPD DUE
TO PATENT RIGHTS HELD BY THIRD PARTIES, TRIANGLE'S ABILITY TO OBTAIN
ADDITIONAL FUNDING, PATENT PROTECTION, AND REQUIRED REGULATORY APPROVALS FOR
ITS DRUG CANDIDATES, THE DEVELOPMENT OF COMPETITIVE PRODUCTS BY OTHERS, THE
COST OF COACTIVE THERAPY AND THE EXTENT TO WHICH COACTIVE THERAPY ACHIEVES
MARKET ACCEPTANCE, TRIANGLE'S SUCCESS IN IDENTIFYING NEW DRUG CANDIDATES,
ACQUIRING RIGHTS TO THE CANDIDATES ON FAVORABLE TERMS AND DEVELOPING ANY
CANDIDATES TO WHICH TRIANGLE ACQUIRES ANY RIGHTS, AND THESE AND OTHER RISKS
DETAILED FROM TIME TO TIME IN TRIANGLE'S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION. THE ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
PROJECTED IN THIS PRESS RELEASE. TRIANGLE DISCLAIMS ANY OBLIGATION TO UPDATE
STATEMENTS IN THIS PRESS RELEASE.
