-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UUT/Ivo+M1OSQBIl7iUJwUAz4ZwWtIE44BXzSvfuUqgIO67q4NgPVWHVFg8f2oT+ vW7eKly6NcykFWufiotnYQ== 0001047469-02-007125.txt : 20021216 0001047469-02-007125.hdr.sgml : 20021216 20021216165924 ACCESSION NUMBER: 0001047469-02-007125 CONFORMED SUBMISSION TYPE: SC TO-T PUBLIC DOCUMENT COUNT: 19 FILED AS OF DATE: 20021216 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GILEAD SCIENCES INC CENTRAL INDEX KEY: 0000882095 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 943047598 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T BUSINESS ADDRESS: STREET 1: 333 LAKESIDE DR CITY: FOSTER CITY STATE: CA ZIP: 94404 BUSINESS PHONE: 6505743000 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TRIANGLE PHARMACEUTICALS INC CENTRAL INDEX KEY: 0001022622 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 561930728 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T SEC ACT: 1934 Act SEC FILE NUMBER: 005-47359 FILM NUMBER: 02859030 BUSINESS ADDRESS: STREET 1: 4611 UNIVERSITY DRIVE CITY: DURHAM STATE: NC ZIP: 27707 BUSINESS PHONE: 9194935980 MAIL ADDRESS: STREET 1: 4611 UNIVERSITY DRIVE CITY: DURHAM STATE: NC ZIP: 27707 SC TO-T 1 a2096276zscto-t.htm SC TO-T
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Schedule TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934

Triangle Pharmaceuticals, Inc.
(Name of Subject Company (Issuer))

Simbolo Acquisition Sub, Inc. (Offeror)
Gilead Sciences, Inc. (Parent of Offeror)
(Names of Filing Persons)

COMMON STOCK, PAR VALUE $0.001 PER SHARE
(Title of Class of Securities)

89589H 10 4
(CUSIP Number of Class of Securities)

Gregg H. Alton, Esq.
Vice President and General Counsel
Gilead Sciences, Inc.
333 Lakeside Drive
Foster City, California 94404
Tel: (650) 574-3000
(Name, address, and telephone number of person authorized to receive notices
and communications on behalf of filing persons)

with copies to:

Richard E. Climan, Esq.
David A. Lipkin, Esq.
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306-2155
Tel: (650) 843-5000
Fax: (650) 849-7400

Calculation of Filing Fee

Transaction valuation(1)		Amount of filing fee(2)


$476,659,788		$43,853

(1): Estimated solely for the purpose of calculating the registration fee pursuant to Rule 0-11(d) under the Securities Exchange Act of 1934, as amended, based on the product of (i) $6.00 (i.e. the tender offer price) and (ii) 79,443,298, the estimated number of shares of Triangle common stock to be acquired in this tender offer and the merger (including 2,539,165 shares of Triangle common stock issuable upon the exercise of outstanding options having an exercise price less than or equal to $6.00).
(2): The amount of the filing fee, calculated in accordance with Rule 0-11(a)(2) under the Securities Exchange Act of 1934, as amended, equals 0.0092% of the transaction valuation.
o: Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number or the form or schedule and the date of its filing.

Amount Previously Paid: N/A
Form or Registration No.: N/A

Filing Party: N/A
Date Filed: N/A

o: Check the box if the filing relates to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

ý: third-party tender offer subject to Rule 14d-1.
o: issuer tender offer subject to Rule 13e-4.
o: going-private transaction subject to Rule 13e-3.
o: amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer: o

ITEMS 1-9, AND ITEM 11.

This Tender Offer Statement on Schedule TO (this "Schedule TO") relates to the offer by Simbolo Acquisition Sub, Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Gilead Sciences, Inc., a Delaware corporation ("Gilead"), to purchase all the outstanding shares of common stock, par value $0.001 per share, of Triangle Pharmaceuticals, Inc., a Delaware corporation, at a purchase price of $6.00 per share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 16, 2002, and in the Letter of Transmittal, copies of which are filed with this Schedule TO as Exhibits (a)(1) and (a)(2) hereto, respectively. This Schedule TO is being filed on behalf of the Purchaser and Gilead. The information set forth in the Offer to Purchase, including Schedule I thereto, and the Letter of Transmittal, are hereby incorporated by reference in answer to Items 1-9 and 11 of this Schedule TO.

ITEM 10. FINANCIAL STATEMENTS

Not Applicable.

ITEM 12. EXHIBITS

(a)(1)		Offer to Purchase, dated December 16, 2002.
(a)(2)		Form of Letter of Transmittal.
(a)(3)		Form of Notice of Guaranteed Delivery.
(a)(4)		Form of Letter from the Dealer Manager to Brokers, Dealers, Banks, Trust Companies and Other Nominees.
(a)(5)		Form of Letter to Clients for use by Brokers, Dealers, Banks, Trust Companies and Other Nominees.
(a)(6)		Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(7)		Joint Press Release issued by Gilead Sciences, Inc. and Triangle Pharmaceuticals, Inc. on December 4, 2002.
(a)(8)		Summary Newspaper Advertisement published in The Wall Street Journal on December 16, 2002.
(b)		Not applicable.
(d)(1)		Agreement and Plan of Merger, dated as of December 3, 2002, by and among Gilead Sciences, Inc., Simbolo Acquisition Sub, Inc. and Triangle Pharmaceuticals, Inc.
(d)(2)		Form of Stockholder Agreement (including agreement to tender), dated as of December 3, 2002, among Gilead Sciences, Inc., Simbolo Acquisition Sub, Inc. and selected stockholders of Triangle Pharmaceuticals, Inc.
(d)(3)		Form of Stockholder Agreement (including agreement to tender and agreement to vote to adopt the Merger Agreement), dated as of December 3, 2002, among Gilead Sciences, Inc., Simbolo Acquisition Sub, Inc. and selected stockholders of Triangle Pharmaceuticals, Inc.
(d)(4)		Confidentiality Agreement, dated November 1, 2002, between Gilead Sciences, Inc. and Triangle Pharmaceuticals, Inc.
(d)(5)		7.50% Convertible Promissory Note, dated December 9, 2002, between Gilead Sciences, Inc. and Triangle Pharmaceuticals, Inc.
(d)(6)		Investor Rights Agreement, dated as of December 9, 2002, between Gilead Sciences, Inc. and Triangle Pharmaceuticals, Inc.
(g)		Not applicable.
(h)		Not applicable.

SIGNATURES

After due 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.

SIMBOLO ACQUISITION SUB, INC.
By:	/s/ JOHN MILLIGAN
	Name:	John Milligan, Ph.D.
	Title:	President
GILEAD SCIENCES, INC.
By:	/s/ JOHN C. MARTIN
	Name:	John C. Martin
	Title:	President and Chief Executive Officer
	Dated: December 16, 2002

INDEX TO EXHIBITS

Exhibit No.		Document
(a)(1)		Offer to Purchase, dated December 16, 2002.
(a)(2)		Form of Letter of Transmittal.
(a)(3)		Form of Notice of Guaranteed Delivery.
(a)(4)		Form of Letter from the Dealer Manager to Brokers, Dealers, Banks, Trust Companies and Other Nominees.
(a)(5)		Form of Letter to Clients for use by Brokers, Dealers, Banks, Trust Companies and Other Nominees.
(a)(6)		Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(7)		Joint Press Release issued by Gilead Sciences, Inc. and Triangle Pharmaceuticals, Inc. on December 4, 2002.
(a)(8)		Summary Newspaper Advertisement published in The Wall Street Journal on December 16, 2002.
(b)		Not applicable.
(d)(1)		Agreement and Plan of Merger, dated as of December 3, 2002, by and among Gilead Sciences, Inc., Simbolo Acquisition Sub, Inc. and Triangle Pharmaceuticals, Inc.
(d)(2)		Form of Stockholder Agreement (including agreement to tender), dated as of December 3, 2002, among Gilead Sciences, Inc., Simbolo Acquisition Sub, Inc. and selected stockholders of Triangle Pharmaceuticals, Inc.
(d)(3)		Form of Stockholder Agreement (including agreement to tender and agreement to vote to adopt the Merger Agreement), dated as of December 3, 2002, among Gilead Sciences, Inc., Simbolo Acquisition Sub, Inc. and selected stockholders of Triangle Pharmaceuticals, Inc.
(d)(4)		Confidentiality Agreement, dated November 1, 2002, between Gilead Sciences, Inc. and Triangle Pharmaceuticals, Inc.
(d)(5)		7.50% Convertible Promissory Note, dated December 9, 2002, between Gilead Sciences, Inc. and Triangle Pharmaceuticals, Inc.
(d)(6)		Investor Rights Agreement, dated as of December 9, 2002, between Gilead Sciences, Inc. and Triangle Pharmaceuticals, Inc.
(g)		Not applicable.
(h)		Not applicable.

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SIGNATURES
INDEX TO EXHIBITS
EX-99.(A)(1) 3 a2096276zex-99_a1.htm EXHIBIT 99(A)(1)
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Exhibit (a)(1)

Offer to Purchase for Cash
All Outstanding Shares of Common Stock

Triangle Pharmaceuticals, Inc.

Simbolo Acquisition Sub, Inc.,
a wholly owned subsidiary of
Gilead Sciences, Inc.

$6.00 Net per Share

THE OFFER (AS DEFINED HEREIN) AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JANUARY 15, 2003, UNLESS THE OFFER IS EXTENDED.

Pursuant to an Agreement and Plan of Merger, dated as of December 3, 2002 (the "Merger Agreement"), by and among Gilead Sciences, Inc., a Delaware corporation ("Gilead"), Simbolo Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Gilead (the "Purchaser"), and Triangle Pharmaceuticals, Inc., a Delaware corporation ("Triangle"), the Purchaser is offering to purchase all of the outstanding shares of common stock, par value $0.001 per share, of Triangle at a price of $6.00 per share, net to the seller in cash, without interest thereon (the "Offer Price"), upon the terms and subject to the conditions set forth in this Offer to Purchase and the Letter of Transmittal enclosed with this Offer to Purchase, which, together with any amendments or supplements hereto or thereto, collectively constitute the "Offer" described in this Offer to Purchase. Following the purchase by the Purchaser of shares of Triangle common stock in the Offer and the satisfaction or waiver of each of the applicable conditions set forth in the Merger Agreement, the Purchaser will be merged with and into Triangle (the "Merger"), with Triangle surviving the Merger as a wholly owned subsidiary of Gilead. As a result of the Merger, each outstanding share of Triangle common stock (other than shares owned by Gilead, the Purchaser, Triangle or any wholly owned subsidiary of Gilead or Triangle, or by any stockholder of Triangle who is entitled to and properly exercises appraisal rights under Delaware law) will be converted into the right to receive the Offer Price.

Triangle's board of directors has, at a meeting held on December 3, 2002, by the unanimous vote of all directors of Triangle, (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are in the best interests of Triangle and its stockholders, (ii) approved and adopted the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, in accordance with the Delaware General Corporation Law and (iii) declared that the Merger Agreement is advisable. Accordingly, Triangle's board of directors unanimously recommends that the stockholders of Triangle accept the Offer and tender their shares of Triangle common stock to the Purchaser in the Offer and, if required, vote to adopt the Merger Agreement.

stock, plus, at the election of Gilead, an additional number of shares of Triangle common stock up to but not exceeding the aggregate number of shares of Triangle common stock issuable upon the exercise of any outstanding option that is vested or is expected to become vested (other than by reason of the Merger) on or before June 1, 2003, or any warrant or other right to acquire capital stock of Triangle, or upon the conversion of any security convertible into capital stock of Triangle. (The foregoing condition is referred to as the "Minimum Condition" in this Offer to Purchase). The Offer is also subject to other conditions described in Section 13 (Certain Conditions to the Offer) of this Offer to Purchase.

Certain of Triangle's directors and certain additional stockholders of Triangle have entered into stockholder agreements with Gilead and the Purchaser pursuant to which they have agreed, in their respective capacities as stockholders of Triangle, to tender all of their shares of Triangle common stock, as well as any additional shares of Triangle common stock which they may acquire (pursuant to Triangle stock options or otherwise), to the Purchaser in the Offer. The parties to certain of those stockholder agreements have also agreed to vote all of their shares of Triangle common stock in favor of adoption of the Merger Agreement and otherwise in favor of the Merger. As of December 3, 2002, the stockholders who executed stockholder agreements held in the aggregate 31,574,469 shares of Triangle common stock, which represented approximately 41% of the outstanding shares of Triangle common stock as of that date. Of such shares of Triangle common stock, 30,906,949 shares, which represented approximately 40% of the outstanding shares of Triangle common stock as of that date, were held by stockholders whose Stockholder Agreements also contained the voting provisions described above. The stockholder agreements provide that they terminate upon any termination of the Merger Agreement.

IMPORTANT

Any stockholder of Triangle who desires to tender all or any portion of such stockholder's shares of Triangle common stock to the Purchaser in the Offer should either (i) complete and sign the Letter of Transmittal (or a facsimile copy of it) for the Offer, which is enclosed with this Offer to Purchase, in accordance with the instructions contained in the Letter of Transmittal (having such stockholder's signature on the Letter of Transmittal guaranteed if required by Instruction 1 to the Letter of Transmittal), mail or deliver the Letter of Transmittal (or a facsimile copy of it) and any other required documents to the depositary for the Offer, Mellon Investor Services LLC (the "Depositary"), and either deliver the certificates representing such shares to the Depositary along with the Letter of Transmittal (or a facsimile copy of it) or tender such shares by book-entry transfer by following the procedures described in Section 2 (Procedures for Tendering Shares of Triangle Common Stock in the Offer) of this Offer to Purchase, in each case prior to the Expiration Date of the Offer or (ii) request such stockholder's broker, dealer, bank, trust company or other nominee to effect the transaction for such stockholder. Any stockholder of Triangle with shares of Triangle common stock registered in the name of a broker, dealer, bank, trust company or other nominee must contact that institution in order to tender such shares to the Purchaser in the Offer.

Any stockholder of Triangle who desires to tender shares of Triangle common stock to the Purchaser in the Offer and whose certificates representing such shares are not immediately available, or who cannot comply in a timely manner with the procedures for tendering shares by book-entry transfer, or who cannot deliver all required documents to the Depositary prior to the Expiration Date of the Offer, may tender such shares to the Purchaser in the Offer by following the procedures for guaranteed delivery described in Section 2 (Procedures for Tendering Shares of Triangle Common Stock in the Offer) of this Offer to Purchase.

Questions regarding the Offer, and requests for assistance in connection with the Offer, may be directed to the Information Agent or the Dealer Manager for the Offer at their respective addresses and telephone numbers listed below. Additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be obtained from the Information Agent or the Dealer Manager.

The Information Agent for the Offer is:

Georgeson Shareholder Communications Inc.
17 State Street, 10^th Floor
New York, NY 10004

Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (866) 295-4328

The Dealer Manager for the Offer is:

Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004

Call Collect: (212) 902-1000
Call Toll Free: (800) 323-5678

TABLE OF CONTENTS

			Page
SUMMARY TERM SHEET			5
INTRODUCTION			13
THE TENDER OFFER			15
	1.	Terms of the Offer	15
	2.	Procedures for Tendering Shares of Triangle Common Stock in the Offer	18
	3.	Withdrawal Rights	22
	4.	Acceptance for Payment and Payment for Shares of Triangle Common Stock	23
	5.	Certain United States Federal Income Tax Consequences	24
	6.	Price Range of Shares of Triangle Common Stock; Dividends on Shares of Triangle Common Stock	25
	7.	Effect of the Offer on the Market for Triangle Common Stock; Nasdaq Listing of Triangle Common Stock; Exchange Act Registration of Triangle Common Stock; Margin Regulations	26
	8.	Certain Information Concerning Triangle	28
	9.	Certain Information Concerning the Purchaser and Gilead	28
	10.	Source and Amount of Funds	29
	11.	Background of the Offer	29
	12.	Purpose of the Offer and the Merger; Plans for Triangle; The Merger Agreement; The Stockholder Agreements; The Convertible Loan	36
	13.	Certain Conditions to the Offer	60
	14.	Certain Legal Matters	62
	15.	Fees and Expenses	65
	16.	Miscellaneous	65
SCHEDULE I Directors and Executive Officers of the Purchaser and Gilead			S-1

SUMMARY TERM SHEET

We are Simbolo Acquisition Sub, Inc., and we are making an offer to purchase all of the outstanding shares of common stock of Triangle Pharmaceuticals, Inc. ("Triangle"). The following are some of the questions you, as a stockholder of Triangle, may have about our offer and our answers to those questions. This Summary Term Sheet provides important and material information about our offer that is described in more detail elsewhere in this Offer to Purchase, but this Summary Term Sheet may not include all of the information about our offer that is important to you. We urge you to carefully read the remainder of this Offer to Purchase and the Letter of Transmittal for our offer because the information in this Summary Term Sheet is not complete. Additional important information about our offer is contained in the remainder of this Offer to Purchase and the Letter of Transmittal for our offer. We have included cross-references in this Summary Term Sheet to other sections of this Offer to Purchase to direct you to the sections of this Offer to Purchase in which a more complete description of the topics covered in this Summary Term Sheet appear.

Who is offering to buy my Triangle shares?

Our name is Simbolo Acquisition Sub, Inc. We are a Delaware corporation organized as a wholly owned subsidiary of Gilead Sciences, Inc. ("Gilead") for the sole purpose of making a tender offer for the outstanding shares of common stock of Triangle. Gilead is an independent biopharmaceutical company focused on the discovery, development and commercialization of antivirals, antibacterials and antifungals to treat life-threatening infectious diseases. See Introduction and Section 9 (Certain Information Concerning the Purchaser and Gilead) of this Offer to Purchase for more information.

How many shares of Triangle common stock are you offering to purchase?

We are making an offer to purchase all of the outstanding shares of common stock of Triangle. See Introduction and Section 1 (Terms of the Offer) of this Offer to Purchase for more information.

How much are you offering to pay for my shares of Triangle common stock, what is the form of payment and will I have to pay any fees or commissions if I tender my shares in your offer?

We are offering to pay $6.00 per share, net to you, in cash (without interest) for each of your shares of Triangle common stock. If you are the record owner of your shares and you tender them in our offer, you will not have to pay any brokerage fees or similar expenses to do so. If you own your shares through a broker or other nominee, and your broker tenders your shares in our offer on your behalf, your broker or nominee may charge you a fee for doing so. You should consult your broker or nominee to determine whether it will charge you a fee for tendering your shares in our offer. See Introduction and Section 1 (Terms of the Offer) of this Offer to Purchase for more information.

Do you have the financial resources to pay for all of the shares of Triangle common stock that you are offering to purchase?

Yes. Our parent company, Gilead, will contribute to us sufficient funds to pay for all of the shares of Triangle common stock that are accepted for payment by us in our offer, and to make payments for all shares of Triangle common stock that are not accepted for payment in our offer and that will be converted into the right to receive $6.00 per share in cash (without interest) in the merger described below following the successful completion of our offer. Gilead expects to use its cash on hand and cash equivalents to make this contribution. Our offer is not conditioned upon any financing contingencies. See Section 10 (Source and Amount of Funds) of this Offer to Purchase for more information.

Is your financial condition relevant to my decision whether to tender my shares of Triangle common stock in your offer?

No. We do not believe that our financial condition is relevant to your decision whether to tender your shares of Triangle common stock in our offer because:

•: cash is the only consideration that we are paying to the holders of Triangle common stock in connection with our offer;
•: we are offering to purchase all of the outstanding shares of Triangle common stock in our offer;
•: our offer is not subject to any financing contingencies; and
•: Gilead has sufficient cash on hand and cash equivalents to provide us with the amount of cash consideration payable to holders of Triangle common stock in our offer and the merger described below.

See Section 10 (Source and Amount of Funds) of this Offer to Purchase for more information.

What are the terms of the convertible loan that Gilead has made to Triangle?

On December 9, 2002, Gilead loaned $50,000,000 to Triangle, to help fund Triangle's working capital needs and for other corporate purposes pending the successful completion of our offer, pursuant to an obligation to provide such funds that was set forth in the merger agreement. The loan is unsecured and Gilead holds no security interest in any Triangle assets. Triangle's obligation to repay such loan is evidenced by a 7.50% Convertible Promissory Note, pursuant to which Gilead will become entitled to convert principal and accrued and unpaid interest under the convertible loan into Triangle common stock at a price of $6.90 per share after December 9, 2003. Contemporaneously with the provision of the convertible loan and the execution of the convertible note, Gilead and Triangle entered into an investor rights agreement providing Gilead with certain rights associated with its possible acquisition and ownership of Triangle common stock. (We sometimes refer to the convertible promissory note and the investor rights agreement as the "financing documents" in this Offer to Purchase.) Portions of the convertible loan may be forgiven by Gilead under certain circumstances set forth in the merger agreement. See Section 12 (Purpose of the Offer and the Merger; Plans for Triangle; The Merger Agreement; The Stockholder Agreements; The Convertible Loan) of this Offer to Purchase for more information.

How long do I have to tender my shares of Triangle common stock in your offer?

Unless we extend our offer, you will have until 12:00 midnight, New York City time, on January 15, 2003, to tender your shares of Triangle common stock in our offer. If you cannot deliver everything that is required to tender your shares by that time, you may be able to use a guaranteed delivery procedure to tender your shares, as described in Section 2 (Procedures for Tendering Shares of Triangle Common Stock in the Offer) of this Offer to Purchase.

What are the most significant conditions to your offer?

We are not obligated to purchase any shares of Triangle common stock that are tendered in our offer unless, prior to the expiration of our offer, the number of shares validly tendered in accordance with the terms of our offer and not withdrawn, together with any shares of Triangle common stock then owned by Gilead or any wholly owned subsidiary of Gilead (including us), represent greater than 50% of the "adjusted outstanding share number," which is defined in the merger agreement as the sum of all then-outstanding shares of Triangle common stock, plus, at the election of Gilead, an additional number of shares of Triangle common stock up to but not

exceeding the aggregate number of shares of Triangle common stock issuable upon the exercise of any outstanding option that is vested or is expected to become vested (other than by reason of the merger) on or before June 1, 2003, or any warrant or other right to acquire capital stock of Triangle, or upon the conversion of any security convertible into capital stock of Triangle. (The foregoing condition is referred to as the "minimum condition.")

Our offer is not subject to any financing contingencies, but it is subject to a number of other conditions, including conditions with respect to the accuracy of Triangle's representations and warranties in the merger agreement as of the date of the merger agreement, the expiration or termination of the waiting period applicable to our offer under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, Triangle's compliance in all material respects with its covenants set forth in the merger agreement, and the absence of any legal proceeding involving a governmental body related to our offer or the merger. See Section 13 (Certain Conditions to the Offer) of this Offer to Purchase for more information about these and other conditions to our offer.

We can waive any condition to our offer without Triangle's consent, other than the minimum condition.

Under what circumstances can or must you extend your offer?

We are permitted to (but not required to) extend our offer beyond its initial expiration date of January 15, 2003:

•: for any period required by any rule or regulation of the Securities and Exchange Commission applicable to our offer;
•: for such amount of time as we determine to be necessary to permit all of the conditions to our offer to be satisfied; and
•: for an additional period of not more than ten business days, if the minimum condition has been satisfied, but the sum of the number of shares of Triangle common stock that have been validly tendered and not withdrawn in our offer as of the scheduled or any extended expiration date of our offer, together with any shares of Triangle common stock then owned by Gilead or any wholly owned subsidiary of Gilead (including us), represents less than 90% of the outstanding number of shares of Triangle common stock as of that date.

In addition, we are required, upon the written request of Triangle prior to January 15, 2003, or prior to any subsequent date as of which our offer is scheduled to expire, if any condition to our offer has not been satisfied or waived, to extend our offer from time to time for such period of time (but in each case not more than 15 business days) as Triangle reasonably requests. However, we are not required to extend our offer beyond June 1, 2003.

See Section 1 (Terms of the Offer) of this Offer to Purchase for more information.

At our option, we may (but are not required to) also provide for a subsequent offering period, and one or more extensions thereof, following the expiration of and acceptance for payment of shares tendered in our offer. During any subsequent offering period, if there is one, you could tender your shares to us for the same offer price payable in our offer. See Section 1 (Terms of the Offer) of this Offer to Purchase for more information.

How will I be notified if you extend your offer?

If we extend our offer, we will inform the Depositary, Mellon Investor Services LLC, of that fact and will make a public announcement of the extension not later than 9:00 a.m., New York City time, on the next business day after the day on which our offer was previously scheduled to expire. See Section 1 (Terms of the Offer) of this Offer to Purchase for more information.

How do I tender my shares of Triangle common stock in your offer?

To tender all or any portion of your shares of Triangle common stock in our offer, you must either deliver the certificate or certificates representing your tendered shares, together with the Letter of Transmittal (or a facsimile copy of it) enclosed with this Offer to Purchase, properly completed and duly executed, together with any required signature guarantees, and any other required documents, to the Depositary, Mellon Investor Services LLC, or tender your shares using the book-entry procedure described in Section 2 (Procedures for Tendering Shares of Triangle Common Stock in the Offer), prior to the expiration of our offer.

If you hold your shares of Triangle common stock in street name through a broker, dealer, bank, trust company or other nominee and you wish to tender all or any portion of your shares of Triangle common stock in our offer, the broker, dealer, bank, trust company or other nominee that holds your shares must tender them on your behalf through the Depositary.

If you cannot deliver the items that are required to be delivered to the Depositary by the expiration of our offer, you may obtain additional time to do so by having a broker, bank or other fiduciary that is a member of the Securities Transfer Agent's Medallion Program or other eligible institution guarantee that the missing items will be received by the Depositary within three Nasdaq National Market trading days. You may use the Notice of Guaranteed Delivery enclosed with this Offer to Purchase for this purpose. To tender shares of Triangle common stock in this manner, however, the Depositary must receive the missing items within such three trading day period. See Section 2 (Procedures for Tendering Shares of Triangle Common Stock in the Offer) of this Offer to Purchase for more information.

Can I withdraw shares that I previously tendered in your offer? Until what time may I withdraw previously tendered shares?

Yes. You can withdraw some or all of the shares of Triangle common stock that you previously tendered in our offer at any time until the expiration date of our offer as it may be extended. Further, if we have not accepted your shares for payment by February 14, 2003, you can withdraw them at any time after February 14, 2003. Once we accept your tendered shares for payment upon the expiration of our offer, however, you will no longer be able to withdraw them. In addition, your right to withdraw your previously tendered and accepted shares will not apply to any subsequent offering period (which is not the same as an extension of our offer), if one is provided. See Section 1 (Terms of the Offer) and Section 3 (Withdrawal Rights) of this Offer to Purchase for more information.

How do I withdraw my previously tendered shares?

To withdraw any shares of Triangle common stock that you previously tendered in our offer, you (or, if your shares are held in street name, the broker, dealer, bank, trust company or other nominee that holds your shares) must deliver a written notice of withdrawal (or a facsimile copy of one), with the required information, to the Depositary while you still have the right to withdraw your shares. See Section 1 (Terms of the Offer) and Section 3 (Withdrawal Rights) of this Offer to Purchase for more information.

Has Triangle's board of directors approved your offer?

Yes. Our offer is being made pursuant to an Agreement and Plan of Merger, dated as of December 3, 2002, by and among Gilead, Triangle and us. Triangle's board of directors has, by the unanimous vote of all directors of Triangle:

•: determined that the merger agreement and the transactions contemplated thereby, including our offer and the merger contemplated by the merger agreement, are in the best interests of Triangle and its stockholders;
•: approved and adopted the merger agreement and the transactions contemplated thereby, including our offer and the merger contemplated by the merger agreement in accordance with applicable law; and
•: declared that the merger agreement is advisable.

Accordingly, Triangle's board of directors unanimously recommends that you accept our offer and tender your shares of Triangle common stock pursuant to our offer and, if required, vote to adopt the merger agreement.

The factors considered by Triangle's board of directors in making the determinations and the recommendation described above are described in Triangle's Solicitation/Recommendation Statement on Schedule 14D-9, which has been filed with the Securities and Exchange Commission and is being mailed to the stockholders of Triangle with this Offer to Purchase.

Banc of America Securities LLC, which acted as the financial advisor to Triangle's board of directors, delivered an opinion to Triangle's board of directors, dated December 3, 2002, to the effect that, as of that date, based upon and subject to the assumptions made, the procedures followed, other matters considered and the limitations of the review undertaken in its opinion, the offer price to be paid to stockholders whose shares of Triangle common stock are accepted for payment in our offer and to be paid to stockholders in the merger was fair, from a financial point of view, to the holders of shares of Triangle common stock. Stockholders of Triangle are urged to, and should, carefully read Triangle's Solicitation/Recommendation Statement on Schedule 14D-9 and the opinion of Banc of America Securities LLC in their entirety.

Have any stockholders of Triangle already agreed to tender their shares in your offer?

Yes. As noted above, certain of Triangle's directors and certain additional stockholders of Triangle have entered into stockholder agreements with Gilead and us pursuant to which they have agreed, in their respective capacities as stockholders of Triangle, to tender all of their shares of Triangle common stock, as well as any additional shares of Triangle common stock which they may acquire (pursuant to Triangle stock options or otherwise), to us in our offer. The parties to certain of those stockholder agreements have also agreed to vote all of their shares of Triangle common stock in favor of adoption of the merger agreement and otherwise in favor of the Merger. As of December 3, 2002, the stockholders who executed stockholder agreements held in the aggregate 31,574,469 shares of Triangle common stock, which represented approximately 41% of the outstanding shares of Triangle common stock as of that date. Of such shares of Triangle common stock, 30,906,949 shares, which represented approximately 40% of the outstanding shares of Triangle common stock as of that date, were held by stockholders whose Stockholder Agreements also contained the voting provisions described above. The stockholder agreements provide that they terminate upon any termination of the merger agreement.

What are your plans if you successfully complete your offer but do not acquire all of the outstanding shares of Triangle common stock in your offer?

If we successfully complete our offer and certain limited conditions are satisfied, as soon as practicable following the successful completion of our offer, we intend to merge with and into Triangle. As a result of that merger, (i) all of the outstanding shares of Triangle common stock that are not tendered in our offer, other than shares that are owned by Gilead, Triangle or us (or any wholly owned subsidiary of Gilead or Triangle) and any shares that are owned by any stockholder of Triangle who is entitled to and properly exercises appraisal rights under Delaware law in respect of their shares, will be canceled and converted into the right to receive $6.00 per share in cash (without interest) and (ii) all of our issued and outstanding shares of capital stock which are owned by Gilead will be converted into a number of shares of Triangle common stock equal to the number obtained by dividing the number of shares of Triangle common stock issued and outstanding immediately prior to the completion of the merger by 100, as a result of which Gilead will own all of the issued and outstanding shares of Triangle.

Our obligation to merge with Triangle following the successful completion of our offer is conditioned on the adoption of the merger agreement by Triangle's stockholders under Delaware law (if required) and no temporary restraining order, preliminary or permanent injunction or other order preventing the completion of the merger having been issued by any court of competent jurisdiction and remaining in effect, and there not being any legal requirement enacted or deemed applicable to the merger that makes completion of the merger illegal. If we successfully complete our offer, we will hold a sufficient number of shares of Triangle common stock to ensure the requisite adoption of the merger agreement by Triangle stockholders under Delaware law to complete the merger. In addition, if we own at least 90% of the outstanding shares of Triangle common stock, we will not be required to obtain stockholder approval to complete the merger.

If you successfully complete your offer, what will happen to Triangle's board of directors?

If we successfully complete our offer, under the merger agreement we are entitled to designate at least a majority of the members of Triangle's board of directors. In such case Triangle has agreed (to the extent requested by Gilead) to use its reasonable best efforts to cause Gilead's designees to be elected or appointed to its board of directors in such number as is proportionate to Gilead's share ownership. Therefore, if we successfully complete our offer, Gilead will obtain control over the management of Triangle shortly thereafter. However, we and Gilead have also agreed in the merger agreement that Triangle will use its reasonable best efforts to ensure that at least two of the members of Triangle's board of directors, at all times prior to the completion of the merger, are individuals who were directors of Triangle on December 3, 2002, the date of the merger agreement. After the election or appointment of the directors designated by Gilead to Triangle's board of directors and prior to the completion of the merger, under the terms of the merger agreement, the approval of the individuals who were directors of Triangle on December 3, 2002 (or their successors) will be required to authorize any of the following actions of Triangle, to the extent the action in question could reasonably be expected to affect adversely the holders of shares of Triangle common stock (other than Gilead or us): (i) any action by Triangle with respect to any amendment or waiver of any term or condition of the merger agreement, the merger, the financing documents or the certificate of incorporation or bylaws of Triangle; (ii) any termination or rescission of the merger agreement, the merger or the financing documents by Triangle; (iii) any extension by Triangle of the time for the performance of any of the obligations or other acts of Gilead or us, or any waiver or assertion of any of Triangle's rights under the merger agreement or the financing documents; or (iv) any other consent or action by Triangle's board of directors with respect to the merger agreement, the merger or the financing documents. See Section 12 (Purpose of the Offer

and the Merger; Plans for Triangle; The Merger Agreement; The Stockholder Agreements; The Convertible Loan) of this Offer to Purchase for more information.

If I decide not to tender my shares of Triangle common stock in your offer, how will your offer affect my shares?

If we successfully complete our offer, but you do not tender your shares in our offer, and the merger takes place, your shares will be canceled and converted into the right to receive the same amount of cash that you would have received had you tendered your shares in our offer (without interest), subject to your right to pursue your appraisal rights under Delaware law. Therefore, if we complete the merger, unless you perfect your appraisal rights under Delaware law, the only difference to you between having your shares accepted for payment in our offer and not doing so is that you will be paid earlier if you have your shares accepted for payment in our offer.

If we successfully complete our offer, then until such time thereafter as we complete the merger, the number of stockholders of Triangle and the number of shares of Triangle common stock that remain in the hands of the public may be so small that there may no longer be an active public trading market (or, possibly, any public trading market) for such shares. Also, shares of Triangle common stock may no longer be eligible to be traded on The Nasdaq National Market or any other securities exchange, and Triangle may cease making filings with the Securities and Exchange Commission or otherwise cease being required to comply with the Securities and Exchange Commission's rules relating to publicly held companies. See Section 7 (Effect of the Offer on the Market for Triangle Common Stock; Nasdaq Listing of Triangle Common Stock; Exchange Act Registration of Triangle Common Stock; Margin Regulations) and Section 12 (Purpose of the Offer and the Merger; Plans for Triangle; The Merger Agreement; The Stockholder Agreements; The Convertible Loan) of this Offer to Purchase for more information.

Are appraisal rights available in either your offer or the merger?

Appraisal rights are not available in connection with our offer. If you choose not to tender your shares of Triangle common stock in our offer, however, and we purchase shares of Triangle common stock in our offer, appraisal rights will be available to you in connection with our merger with and into Triangle. If you choose to exercise your appraisal rights in connection with the merger, and you comply with the applicable requirements under Delaware law, you will be entitled to payment for your shares based on a fair and independent appraisal of the value of your shares as of December 3, 2002, the date prior to public announcement of the proposed transaction with Gilead. This value may be more or less than the $6.00 per share that we are offering to pay you for your shares in our offer or that you would otherwise receive in the Merger. See Section 12 (Purpose of the Offer and the Merger; Plans for Triangle; The Merger Agreement; The Stockholder Agreements; The Convertible Loan) of this Offer to Purchase for more information.

What are the United States federal income tax consequences of having my shares of Triangle common stock accepted for payment in your offer or receiving cash in the merger?

The receipt of cash pursuant to our offer (or the merger) will be a taxable transaction for United States federal income tax purposes under the Internal Revenue Code of 1986, as amended, and may also be a taxable transaction under applicable state, local or foreign income or other tax laws. Generally, for United States federal income tax purposes, a stockholder having shares of Triangle common stock accepted for payment in our offer or receiving cash in the merger will recognize gain or loss equal to the difference between the amount of cash received by the stockholder in our offer (or the merger) and the stockholder's aggregate adjusted tax basis in the shares tendered by the stockholder and accepted for payment in our offer (or converted into cash in the merger). Gain or loss will be calculated separately for each block of shares tendered and accepted for payment in

our offer (or converted into cash in the merger). See Section 5 (Certain United States Federal Income Tax Consequences) of this Offer to Purchase for more information.

Stockholders are urged to consult their own tax advisors to determine the particular tax consequences to them (including the application and effect of any state, local or foreign income and other tax laws) of our offer and the merger.

What is the market value of my shares of Triangle common stock?

On December 3, 2002, the last trading day before Gilead and Triangle announced that they had entered into the merger agreement, the last sale price of shares of Triangle common stock reported on The Nasdaq National Market was $4.50 per share; therefore, the offer price of $6.00 per share represents a premium of 33.33% over the closing price of Triangle shares before announcement of the merger agreement. On December 13, 2002, the last full trading day prior to the commencement of our offer, the last sale price of shares of Triangle common stock reported on The Nasdaq National Market was $5.86 per share. We advise you to obtain a recent quotation for shares of Triangle common stock when deciding whether to tender your shares in our offer. See Section 6 (Price Range of Shares of Triangle Common Stock; Dividends on Shares of Triangle Common Stock) of this Offer to Purchase for more information.

Whom can I contact if I have questions about your offer?

You should contact the Information Agent or the Dealer Manager for our offer at their respective addresses and telephone numbers listed below if you have any questions about our offer.

The Information Agent for the Offer is:

Georgeson Shareholder Communications Inc.
17 State Street, 10^th Floor
New York, NY 10004

Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (866) 295-4328

The Dealer Manager for the Offer is:

Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004

Call Collect: (212) 902-1000
Call Toll Free: (800) 323-5678

To: The Holders of Common Stock of Triangle Pharmaceuticals, Inc.:

INTRODUCTION

Simbolo Acquisition Sub, Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Gilead Sciences, Inc., a Delaware corporation ("Gilead"), hereby offers to purchase all of the outstanding shares of common stock, par value $0.001 per share, of Triangle Pharmaceuticals, Inc., a Delaware corporation ("Triangle"), at a price of $6.00 per share, net to the seller in cash (without interest thereon) (the "Offer Price"), upon the terms and subject to the conditions set forth in this Offer to Purchase and the Letter of Transmittal enclosed with this Offer to Purchase, which, together with any amendments or supplements hereto or thereto, collectively constitute the "Offer" described in this Offer to Purchase.

Tendering Triangle stockholders whose shares of Triangle common stock are registered in their own names and who tender their shares directly to Mellon Investor Services LLC, which is acting as the Depositary for the Offer, will not be obligated to pay brokerage fees or commissions in connection with the Offer or, except as set forth in Instruction 6 to the Letter of Transmittal for the Offer, transfer taxes on the sale of the shares in the Offer. A stockholder of Triangle who holds shares of Triangle common stock through a broker, dealer, bank, trust company or other nominee should consult with such institution to determine whether it will charge any service fees for tendering such stockholder's shares to the Purchaser in the Offer.

The Purchaser will pay all fees and expenses of the Depositary, Goldman, Sachs & Co., which is acting as the dealer manager for the Offer (the "Dealer Manager"), and Georgeson Shareholder Communications Inc., which is acting as the information agent for the Offer (the "Information Agent"), incurred in connection with the Offer. See Section 15 (Fees and Expenses) of this Offer to Purchase for more information.

The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of December 3, 2002, by and among Gilead, the Purchaser and Triangle (the "Merger Agreement") pursuant to which, following the purchase by the Purchaser of shares of Triangle common stock in the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into Triangle (the "Merger"), with Triangle surviving the Merger as a wholly owned subsidiary of Gilead. As a result of the Merger, each outstanding share of Triangle common stock (other than shares owned by Gilead, the Purchaser, Triangle or any wholly owned subsidiary of Gilead or Triangle, or by any stockholder of Triangle who is entitled to and properly exercises appraisal rights under Delaware law) will be converted into the right to receive the Offer Price, without interest thereon. See Section 12 (Purpose of the Offer and the Merger; Plans for Triangle; The Merger Agreement; The Stockholder Agreements; The Convertible Loan) of this Offer to Purchase for more information.

Triangle's board of directors has, at a meeting held on December 3, 2002, by the unanimous vote of all directors of Triangle, (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are in the best interests of Triangle and its stockholders, (ii) approved and adopted the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, in accordance with the DGCL (as defined below) and (iii) declared that the Merger Agreement is advisable. Accordingly, Triangle's board of directors unanimously recommends that the stockholders of Triangle accept the Offer and tender their shares of Triangle common stock to the Purchaser in the Offer and, if required, vote to adopt the Merger Agreement.

Banc of America Securities LLC, which acted as the financial advisor to Triangle's board of directors, delivered an opinion to Triangle's board of directors, dated December 3, 2002, to the effect that, as of that date, based upon and subject to the assumptions made, the procedures followed, other matters considered and the limitations of the review undertaken in its opinion, the Offer Price to be paid to tendering stockholders in the Offer and to be paid to holders of Triangle common stock in the Merger was fair, from a financial point of view, to the holders of shares of Triangle common stock. Stockholders of Triangle are urged to, and should, carefully read Triangle's Solicitation/Recommendation Statement on Schedule 14D-9 and the opinion of Banc of America Securities LLC in their entirety.

The Offer is conditioned upon, among other things, there being validly tendered in accordance with the terms of the Offer and not withdrawn prior to the Expiration Date (as defined in Section 1 of this Offer to Purchase) of the Offer (excluding shares tendered by notice of guaranteed delivery that have not been delivered to the Depositary by the Expiration Date) shares of Triangle common stock that, together with any shares of Triangle common stock then owned by Gilead or any wholly owned subsidiary of Gilead (including the Purchaser), represent greater than 50% of the "Adjusted Outstanding Share Number," which is defined in the Merger Agreement as the sum of all then-outstanding shares of Triangle common stock, plus, at the election of Gilead, an additional number of shares of Triangle common stock up to but not exceeding the aggregate number of shares of Triangle common stock issuable upon the exercise of any outstanding option that is vested or is expected to become vested (other than by reason of the Merger) on or before June 1, 2003, or any warrant or other right to acquire capital stock of Triangle, or upon the conversion of any security convertible into capital stock of Triangle. (The foregoing condition is referred to as the "Minimum Condition.") The Offer is also subject to other conditions described in Section 13 (Certain Conditions to the Offer) of this Offer to Purchase.

Completion of the Merger is also subject to the satisfaction of certain conditions, including (i) the acceptance for payment of, and payment for, shares of Triangle common stock by the Purchaser in the Offer and (ii) the adoption of the Merger Agreement by the affirmative vote of the holders of greater than 50% of the outstanding shares of Triangle common stock, if required by applicable law. If the Offer is successfully completed, the Purchaser will have sufficient voting power to adopt the Merger Agreement without the vote of any other holder of Triangle common stock. In addition, if the Purchaser owns 90% or more of the outstanding shares of Triangle common stock, under applicable law, the Purchaser and Gilead will be able to complete the Merger without adoption of the Merger Agreement by the holders of Triangle common stock. In such event, under

the terms of the Merger Agreement, Gilead, the Purchaser and Triangle have agreed to take all necessary and appropriate action to cause the Merger to become effective as soon as practicable without a stockholders' meeting. See Section 12 (Purpose of the Offer and the Merger; Plans for Triangle; The Merger Agreement; The Stockholder Agreements; The Convertible Loan) of this Offer to Purchase for more information.

Triangle has informed the Purchaser that, as of December 3, 2002, there were: (i) 76,904,133 shares of Triangle common stock issued and outstanding; (ii) 10,953,922 shares of Triangle common stock subject to outstanding options (of which 4,371,509 are vested or are expected to become vested (other than by reason of the Merger) on or before June 1, 2003); (iii) 300,000 shares of Triangle common stock subject to an outstanding warrant to purchase shares of Triangle common stock from Triangle; and (iv) no shares of Triangle common stock issuable upon the conversion of outstanding Triangle securities (other than the options and warrants described above). Based upon the foregoing, the Minimum Condition will be satisfied if between 38,452,067 shares of Triangle common stock (assuming that Gilead elects to include only outstanding shares of Triangle common stock in calculating Triangle's Adjusted Outstanding Share Number) and 40,787,822 shares of Triangle common stock (assuming that Gilead elects to include both outstanding shares of Triangle common stock and the maximum permissible number of options and warrants in calculating Triangle's Adjusted Outstanding Share Number) are validly tendered and not withdrawn prior to the Expiration Date of the Offer. The actual number of shares of Triangle common stock that are required to be tendered to satisfy the Minimum Condition will depend upon the actual Adjusted Outstanding Share Number as determined by Gilead.

Certain U.S. federal income tax consequences of the sale of the shares of Triangle common stock purchased by the Purchaser pursuant to the Offer and the conversion of shares of Triangle common stock pursuant to the Merger are described in Section 5 (Certain United States Federal Income Tax Consequences) of this Offer to Purchase.

If, between the date of the Merger Agreement and the date on which any particular share of Triangle common stock is accepted for payment and paid for pursuant to the Offer, the outstanding shares of Triangle common stock are changed into a different number or class of shares by reason of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction, then the Offer Price applicable to such share will be appropriately adjusted.

This Offer to Purchase and the Letter of Transmittal for the Offer contain important information about the Offer and should be read carefully and in their entirety before any decision is made with respect to the Offer.

THE TENDER OFFER

1. Terms of the Offer

Upon the terms of and subject to the conditions to the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), the Purchaser will accept for payment and pay for all shares of Triangle common stock that are validly tendered on or prior to the Expiration Date of the Offer and not theretofore withdrawn in accordance with the procedures for withdrawal described in Section 3 (Withdrawal Rights) of this Offer to Purchase. The term "Expiration Date" as used in this Offer to Purchase means 12:00 midnight, New York City time, on January 15, 2003, unless and until the Purchaser extends the period of time during which the Offer is open in accordance with the terms of the Merger Agreement, in which event the term Expiration Date of the Offer as used in this Offer to Purchase will mean the latest time at which the Offer, as so extended by the Purchaser, will expire.

Under the terms of the Merger Agreement, upon the written request of Triangle prior to January 15, 2003, the Purchaser is obligated to extend the Offer, by giving oral or written notice of such extension to the Depositary, for such period of time (not more than 15 business days) as Triangle reasonably requests if the Minimum Condition or any other conditions to the Offer provided for in the Merger Agreement (the "Offer Conditions") have not been satisfied or waived by 12:00 midnight, New York City time, on January 15, 2003, the initial Expiration Date of the Offer. In addition, if on any subsequent date as of which the Offer is scheduled to expire, any of the Offer Conditions has not been satisfied or waived, the Purchaser must, if Triangle so requests in writing prior to the then-scheduled Expiration Date of the Offer, extend the Offer from time to time for such period of time (but in each case not more than 15 business days) as Triangle reasonably requests.

Subject to the terms of the Merger Agreement, the Purchaser expressly reserves the right (but is not obligated under the terms of the Merger Agreement or for any other reason) to increase the Offer Price and to waive or make any other changes to the terms and conditions of the Offer, except that, without the prior written consent of Triangle: (i) the Minimum Condition may not be amended or waived; and (ii) no change may be made to the Offer that (A) changes the form of consideration to be paid pursuant to the Offer, (B) decreases the Offer Price or the number of shares of Triangle common stock sought to be purchased in the Offer, (C) imposes conditions to the Offer in addition to the Offer Conditions, (D) except as otherwise permitted by the Merger Agreement, extends the Expiration Date of the Offer beyond the initial Expiration Date of the Offer or (E) amends any other term of the Offer in a manner adverse to the holders of Triangle common stock. Under no circumstances will interest be paid on the Offer Price for tendered shares of Triangle common stock, regardless of any extension of or amendment to the Offer or any delay in paying for any shares.

If by 12:00 midnight, New York City time, on January 15, 2003 (or by any other time and date then scheduled as the Expiration Date of the Offer), any or all of the Offer Conditions have not been satisfied or waived, subject to the terms of the Merger Agreement and the applicable rules and regulations of the Securities and Exchange Commission, the Purchaser may (i) subject to the qualification described in the immediately preceding paragraph of this Offer to Purchase with respect to the Minimum Condition, waive all of the conditions to the Offer that remain unsatisfied and accept for payment and pay for all shares of Triangle common stock that have been validly tendered and not withdrawn prior to the Expiration Date of the Offer, (ii) extend the Offer and, subject to the right of holders of shares of Triangle common stock previously tendered to withdraw such tendered shares at any time prior to the Expiration Date of the Offer, retain all of the shares that have been previously tendered and not withdrawn during the period or periods for which the Offer is extended, (iii) subject to the qualifications described in the immediately preceding paragraph of this Offer to Purchase, amend the Offer or (iv) terminate the Offer in accordance with the Merger Agreement, not accept for payment or pay for any shares of Triangle common stock and return all previously tendered shares to the owners of such shares.

The rights reserved by the Purchaser described in the two preceding paragraphs are in addition to its rights pursuant to Section 13 (Certain Conditions to the Offer) of this Offer to Purchase. Any extension of the Offer, waiver of conditions to the Offer, amendment to the Offer or termination will be followed as promptly as practicable by a public announcement thereof. An announcement in the case of an extension will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date of the Offer. Without limiting the manner in which the Purchaser may choose to make any public announcement, subject to applicable law (including Rules 14d-4(d), 14d-6(c) and 14e-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which require that material changes be promptly disseminated to holders of shares of Triangle common stock), the Purchaser will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by

issuing a release to the PR Newswire and/or Dow Jones news services. The phrase "business day" as used in this paragraph has the meaning set forth in Rule 14d-1 under the Exchange Act.

In the event that the Purchaser makes a material change in the terms of the Offer or the information concerning the Offer, or waives a material condition to the Offer, the Purchaser will disseminate additional tender offer materials and extend the Offer to the extent required by Rules 14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which the Offer must remain open following a material change in the terms of the Offer or information concerning the Offer, other than a change in price or a change in the percentage of securities sought, will depend upon the facts and circumstances then existing, including the relative materiality of the changed terms or information. With respect to a change in price or a change in the percentage of securities sought, a minimum period of ten business days is generally required under the applicable rules and regulations of the Securities and Exchange Commission to allow for adequate dissemination to stockholders.

Under Rule 14d-11 of the Exchange Act and subject to the conditions described in the following paragraph of this Offer to Purchase, the Purchaser may elect to provide for a subsequent offering period, immediately following the Expiration Date of the Offer, of not fewer than three business days nor more than twenty business days in length. If provided, a subsequent offering period would be an additional period of time, following the Expiration Date of the Offer and the acceptance for payment of, and the payment for, any shares of Triangle common stock that are validly tendered in the Offer and not withdrawn prior to the Expiration Date of the Offer, during which holders of shares of Triangle common stock that were not previously tendered in the Offer may tender such shares to the Purchaser in exchange for the Offer Price on the same terms that applied to the Offer. A subsequent offering period is not the same as an extension of the Offer, which will have been previously completed if a subsequent offering period is provided. The Purchaser will accept for payment, and pay for, any shares of Triangle common stock that are validly tendered to the Purchaser during a subsequent offering period, if provided, as promptly as practicable after any such shares are validly tendered to the Purchaser during such subsequent offering period, for the same price paid to holders of shares of Triangle common stock that were validly tendered in the Offer and not withdrawn prior to the Expiration Date of the Offer, net to the holders thereof in cash. Holders of shares of Triangle common stock that are validly tendered to the Purchaser during a subsequent offering period, if provided, will not have the right to withdraw such tendered shares.

Under Rule 14d-11 of the Exchange Act, the Purchaser may provide for a subsequent offering period so long as, among other things, (i) the initial twenty business day period of the Offer has expired, (ii) the Purchaser offers the same form and amount of consideration for shares of Triangle common stock in the subsequent offering period that was offered in the Offer, (iii) the Purchaser immediately accepts and promptly pays for all shares of Triangle common stock that are validly tendered to the Purchaser and not withdrawn prior to the Expiration Date of the Offer, (iv) the Purchaser announces the results of the Offer, including the approximate number and percentage of shares of Triangle common stock that were validly tendered in the Offer, no later than 9:00 a.m., New York City time, on the next business day after the Expiration Date of the Offer and immediately begins the subsequent offering period and (v) the Purchaser immediately accepts and promptly pays for shares of Triangle common stock as they are tendered during the subsequent offering period.

The Purchaser does not currently intend to provide for a subsequent offering period following the expiration of the Offer, although it reserves the right to do so in its sole discretion.

Triangle has provided the Purchaser with a list and security position listings of Triangle's stockholders for the purpose of disseminating the Offer to holders of shares of Triangle common

stock. This Offer to Purchase and the Letter of Transmittal enclosed with this Offer to Purchase and other materials related to the Offer will be mailed to record holders of shares of Triangle common stock, and will be furnished to brokers, dealers, banks, trust companies and other nominees whose names, or the names of whose nominees, appear on the list of Triangle's stockholders, or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of shares of Triangle common stock.

2. Procedures for Tendering Shares of Triangle Common Stock in the Offer

Valid Tender

For a stockholder to validly tender shares of Triangle common stock in the Offer:

•: the certificate(s) representing the tendered shares, together with the Letter of Transmittal (or a facsimile copy of it), properly completed and duly executed, together with any required signature guarantees (as described below under the caption "Signature Guarantees") and any other required documents, must be received by the Depositary at one of its addresses listed on the back cover of this Offer to Purchase prior to the Expiration Date of the Offer;
•: in the case of a tender effected pursuant to the book-entry transfer procedures described below under the caption "Book-Entry Transfer", (i) either the Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees (as described below under the caption "Signature Guarantees"), or an Agent's Message (as described below under the caption "Book-Entry Transfer"), and any other required documents, must be received by the Depositary at one of its addresses listed on the back cover of this Offer to Purchase prior to the Expiration Date of the Offer and (ii) the shares to be tendered must be delivered pursuant to the book-entry transfer procedures described below under the caption "Book-Entry Transfer," and a Book-Entry Confirmation (as described below under the caption "Book-Entry Transfer") must be received by the Depositary prior to the Expiration Date of the Offer; or
•: the tendering stockholder must comply with the guaranteed delivery procedures described below under the caption "Guaranteed Delivery" prior to the Expiration Date of the Offer.

The valid tender of shares of Triangle common stock in accordance with one of the procedures described above will constitute a binding agreement between the tendering stockholder and the Purchaser upon the terms of and subject to the conditions to the Offer.

The method of delivery of shares of Triangle common stock to be tendered in the Offer, the Letter of Transmittal and all other required documents, including delivery through the Book-Entry Transfer Facility described below, is at the election and risk of the tendering stockholder. Shares of Triangle common stock to be tendered in the Offer will be deemed delivered only when actually received by the Depositary (including, in the case of a Book-Entry Transfer, by Book-Entry Confirmation described below). If delivery of shares is made by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

Book-Entry Transfer

The Depositary will establish an account with respect to the shares of Triangle common stock at The Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant of the Book-Entry Transfer Facility's system may effect a book-entry delivery of shares of Triangle common stock in the Offer by causing the Book-Entry Transfer Facility to transfer such shares into the Depositary's account in accordance with the Book-Entry Transfer Facility's procedures for such transfer. The confirmation of a book-entry transfer of shares into the

Depositary's account at the Book-Entry Transfer Facility as described above is sometimes referred to in this Offer to Purchase as a "Book-Entry Confirmation." The term "Agent's Message" as used in this Offer to Purchase means a message, transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that (i) the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the shares of Triangle common stock that such participant has received, (ii) the participant agrees to be bound by the terms of the Letter of Transmittal and (iii) the Purchaser may enforce such agreement against such participant.

Although delivery of shares of Triangle common stock may be effected through book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility, the Letter of Transmittal enclosed with this Offer to Purchase (or a facsimile copy of it), properly completed and duly executed, together with any required signature guarantees (as described below under the caption "Signature Guarantees"), or an Agent's Message (as described above), and any other required documents, must be received by the Depositary at one of its addresses listed on the back cover of this Offer to Purchase prior to the Expiration Date of the Offer to effect a valid tender of shares by book-entry. Delivery of documents to the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility's procedures does not constitute delivery to the Depositary.

Signature Guarantees

No signature guarantee is required on the Letter of Transmittal that is being returned with shares of Triangle common stock being tendered in the Offer if (i) the Letter of Transmittal is signed by the registered holder(s) of the shares of Triangle common stock tendered with such Letter of Transmittal, unless such registered holder(s) has completed either the box labeled Special Payment Instructions or the box labeled Special Delivery Instructions on such Letter of Transmittal or (ii) shares of Triangle common stock are tendered for the account of a financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agent's Medallion Program, Nasdaq Stock Market Medallion Signature Guarantee Program or the Stock Exchange Medallion Program or by any other eligible guarantor institution, as such term is defined in Rule 17Ad-15 under the Exchange Act (which are sometimes referred to as "Eligible Institutions" in this Offer to Purchase). For purposes of the foregoing, a registered holder of shares of Triangle common stock includes any participant in the Book-Entry Transfer Facility's system whose name appears on a security position listing as the owner of such shares. In all other cases, all signatures on the Letter of Transmittal that is being returned with shares of Triangle common stock being tendered in the Offer must be guaranteed by an Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal enclosed with this Offer to Purchase for more information. If certificates representing shares of Triangle common stock being tendered in the Offer are registered in the name of a person other than the signer of the Letter of Transmittal that is being returned with such shares, or if payment is to be made or certificates representing shares of Triangle common stock not being tendered or not accepted for payment are to be returned to a person other than the registered holder of the certificates surrendered, the tendered certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holders or owners appear on such certificates, with the signatures on such certificates or stock powers guaranteed as aforesaid. See Instructions 1 and 5 to the Letter of Transmittal enclosed with this Offer to Purchase for more information.

Guaranteed Delivery

If a stockholder desires to tender shares of Triangle common stock in the Offer and such stockholder's certificates representing such shares are not immediately available, or the book-entry transfer procedures described above under the caption "Book-Entry Transfer" cannot be completed on a timely basis, or time will not permit all required documents to reach the Depositary prior to the

Expiration Date of the Offer, such stockholder may tender such shares of Triangle common stock if all the following conditions are met:

•: such tender is made by or through an Eligible Institution (as described above under the caption "Signature Guarantees");
•: a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form enclosed with this Offer to Purchase, is received by the Depositary at one of its addresses listed on the back cover of this Offer to Purchase prior to the Expiration Date of the Offer; and
•: either (i) the certificates representing tendered shares of Triangle common stock being tendered in the Offer, together with the Letter of Transmittal enclosed with this Offer to Purchase (or facsimile copy of it), properly completed and duly executed, and any required signature guarantees (as described above under the caption "Signature Guarantees"), and any other required documents, are received by the Depositary at one of its addresses listed on the back cover of this Offer to Purchase within three trading days (as described below) after the date of execution of such Notice of Guaranteed Delivery or (ii) in the case of a book-entry transfer effected pursuant to the book-entry transfer procedures described above under the caption "Book-Entry Transfer," (1) either the Letter of Transmittal enclosed with this Offer to Purchase (or facsimile copy of it), properly completed and duly executed, and any required signature guarantees (as described above under the caption "Signature Guarantees"), or an Agent's Message (as described above under the caption "Book-Entry Transfer"), and any other required documents, is received by the Depositary at one of its addresses listed on the back cover of this Offer to Purchase and (2) such shares are delivered pursuant to the book-entry transfer procedures described above under the caption "Book-Entry Transfer" and a Book-Entry Confirmation (as described above under the caption "Book-Entry Transfer") is received by the Depositary, in each case within three trading days after the date of execution of such Notice of Guaranteed Delivery. For purposes of the foregoing, a trading day is any day on which The Nasdaq National Market is open for business.

The Notice of Guaranteed Delivery described above may be delivered by hand or transmitted by telegram, facsimile transmission or mail to the Depositary, and must include a guarantee by an Eligible Institution (as described above under the caption "Signature Guarantees") in the form set forth in such Notice of Guaranteed Delivery. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

The method of delivery of share certificates, the Letter of Transmittal and all other required documents is at the option and risk of the tendering stockholder, and delivery will be made only when actually received by the Depositary.

Other Requirements

Notwithstanding any provision hereof, in all cases payment for shares of Triangle common stock that are accepted for payment in the Offer will be made only after timely receipt by the Depositary of the following:

•: certificates for such shares, or a timely Book-Entry Confirmation (as described above under the caption "Book-Entry Transfer") with respect to such shares;
•: the Letter of Transmittal enclosed with this Offer to Purchase (or a facsimile copy of it), properly completed and duly executed, with any required signature guarantees (as described above under the caption "Signature Guarantees"), or in the case of a Book-Entry Transfer, an

Agent's Message in lieu of the Letter of Transmittal, as described above under the caption "Book-Entry Transfer"); and

•: any other documents required by the Letter of Transmittal.

Accordingly, tendering stockholders may be paid at different times depending upon when certificates for shares of Triangle common stock being tendered in the Offer or Book-Entry Confirmations with respect to shares of Triangle common stock being tendered in the Offer are actually received by the Depositary.

Under no circumstances will interest be paid by the Purchaser on the Offer Price payable in respect of shares of Triangle common stock being tendered in the Offer, regardless of any extension of the Offer or any delay in making such payment.

Appointment

By executing and returning the Letter of Transmittal enclosed with this Offer to Purchase (or a facsimile copy of it), or in the case of a book-entry transfer, by delivery of an Agent's Message in lieu of the Letter of Transmittal as described above under the caption "Book-Entry Transfer," a stockholder tendering shares of Triangle common stock in the Offer will be irrevocably appointing designees of the Purchaser as such stockholder's attorneys-in-fact and proxies in the manner described in the Letter of Transmittal, each with full power of substitution, to the full extent of such stockholder's rights with respect to the shares of Triangle common stock being tendered by such stockholder and accepted for payment by the Purchaser and with respect to any and all other shares of Triangle common stock or other securities or rights issued or issuable in respect of such shares on or after the date of this Offer to Purchase. All such proxies will be considered coupled with an interest in the shares of Triangle common stock being tendered. Such appointment will be effective when, and only to the extent that, the Purchaser accepts for payment the shares of Triangle common stock being tendered by such stockholder as provided in this Offer to Purchase. Upon the effectiveness of such appointment, all prior powers of attorney, proxies and consents given by such stockholder with respect to such shares of Triangle common stock or other securities or rights will, without further action, be revoked and no subsequent powers of attorney, proxies, consents or revocations may be given (and, if given, will not be effective). The designees of the Purchaser will thereby be empowered to exercise all voting and other rights with respect to such shares of Triangle common stock and other securities or rights in respect of any annual, special or adjourned meeting of Triangle's stockholders, actions by written consent in lieu of any such meeting or otherwise, as they in their sole discretion deem proper. The Purchaser reserves the right to require that, in order for shares of Triangle common stock to be deemed validly tendered, immediately upon the Purchaser's acceptance for payment of such shares, the Purchaser must be able to exercise full voting, consent and other rights with respect to such shares and other securities or rights, including voting at any meeting of stockholders.

Determination of Validity

All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any tender of shares of Triangle common stock in the Offer will be determined by the Purchaser in its sole discretion, which determination will be final and binding. The Purchaser reserves the absolute right to reject any or all tenders of shares of Triangle common stock determined by it not to be in proper form or the acceptance for payment of or payment for which may, in the opinion of the Purchaser, be unlawful. The Purchaser also reserves the absolute right to waive any defect or irregularity in the tender of any shares of Triangle common stock of any particular stockholder, whether or not similar defects or irregularities are waived in the case of other stockholders. No tender of shares of Triangle common stock in the Offer will be deemed to have been validly made until all defects or irregularities relating thereto have been cured or waived. None of the Purchaser,

Gilead, Triangle, the Depositary, the Dealer Manager, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. The Purchaser's interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto and any other documents related to the Offer) will be final and binding.

Backup Withholding

In order to avoid backup withholding of United States federal income tax on payments of cash in connection with the Offer, a stockholder whose shares of Triangle common stock are accepted for payment in the Offer who is a U.S. citizen or a U.S. resident alien must, unless an exemption applies, provide the Depositary with such stockholder's correct taxpayer identification number on a Substitute Form W-9 and certify under penalty of perjury that such taxpayer identification number is correct and that such stockholder is not subject to backup withholding. If a stockholder does not provide such stockholder's correct taxpayer identification number or fails to provide the certifications described above, the United States Internal Revenue Service may impose a penalty on such stockholder and the payment of cash to such stockholder in connection with the Offer may be subject to backup withholding at a rate of 30%. All stockholders tendering shares of Triangle common stock in the Offer should complete and sign the main signature form and the Substitute Form W-9 included as part of the Letter of Transmittal enclosed with this Offer to Purchase to provide the information and certification necessary to avoid backup withholding (unless an applicable exemption exists and is proved in a manner satisfactory to the Purchaser and the Depositary). Certain stockholders (including, among others, all corporations and certain foreign individuals and entities) are not subject to backup withholding. Stockholders who are not U.S. citizens or U.S. resident aliens should complete, sign and return to the Depositary the main signature form and a Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, copies of which may be obtained by contacting the Depositary, to provide the information and certification necessary to avoid backup withholding. See Instruction 9 to the Letter of Transmittal enclosed with this Offer to Purchase.

3. Withdrawal Rights

Except as otherwise provided in this Section 3, tenders of shares of Triangle common stock in the Offer are irrevocable. Shares of Triangle common stock that are tendered in the Offer may be withdrawn pursuant to the procedures described below at any time prior to the Expiration Date of the Offer and shares that are tendered may also be withdrawn at any time after February 14, 2003 unless accepted for payment on or before that date as provided in this Offer to Purchase. In the event that the Purchaser provides for a subsequent offering period following the successful completion of the Offer, (i) no withdrawal rights will apply to shares tendered during such subsequent offering period and (ii) no withdrawal rights will apply to shares that were previously tendered in the Offer and accepted for payment.

For a withdrawal of shares of Triangle common stock previously tendered in the Offer to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses listed on the back cover of this Offer to Purchase, specifying the name of the person having tendered the shares to be withdrawn, the number of shares to be withdrawn and the name of the registered holder of the shares to be withdrawn, if different from the name of the person who tendered the shares. If certificates for shares have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and, unless such shares have been tendered by an Eligible Institution, any and all signatures on the notice of withdrawal must be guaranteed by an Eligible Institution. If shares have been tendered pursuant to the book-entry transfer procedures described in Section 2 of this Offer to Purchase, any notice of

withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn shares and otherwise comply with the Book-Entry Transfer Facility's procedures.

All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by the Purchaser in its sole discretion, which determination will be final and binding. None of the Purchaser, Gilead, Triangle, the Depositary, the Dealer Manager, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification.

Withdrawals of shares of Triangle common stock may not be rescinded. Any shares withdrawn will thereafter be deemed not have been validly tendered for purposes of the Offer. However, withdrawn shares may be re-tendered at any time prior to the Expiration Date of the Offer by following one of the procedures described in Section 2 hereof.

4. Acceptance for Payment and Payment for Shares of Triangle Common Stock

On the terms of and subject to the conditions to the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), promptly after the Expiration Date of the Offer, the Purchaser will accept for payment, and will pay for, all shares of Triangle common stock validly tendered to the Purchaser in the Offer and not withdrawn prior to the Expiration Date of the Offer. Subject to the terms of the Merger Agreement, the Purchaser expressly reserves the right, in its sole discretion, to delay acceptance for payment of or the payment for shares of Triangle common stock that are tendered in the Offer in order to comply in whole or in part with any applicable law. Any such delays will be effected in compliance with Rule 14e-1(c) under the Exchange Act (relating to a bidder's obligation to pay for or return tendered securities promptly after the termination or withdrawal of such bidder's offer).

In all cases, payment for shares of Triangle common stock that are accepted for payment in the Offer will be made only after timely receipt by the Depositary of:

•: the certificates representing such shares, together with the Letter of Transmittal enclosed with this Offer to Purchase (or a facsimile copy of it), properly completed and duly executed, and any required signature guarantees (as described in Section 2 (Procedures for Tendering Shares of Triangle Common Stock in the Offer) of this Offer to Purchase under the caption "Signature Guarantees"); or
•: in the case of a transfer effected pursuant to the book-entry transfer procedures as described in Section 2 (Procedures for Tendering Shares of Triangle Common Stock in the Offer) of this Offer to Purchase under the caption "Book-Entry Transfer" a Book-Entry Confirmation and either the Letter of Transmittal enclosed with this Offer to Purchase (or a facsimile copy of it), properly completed and duly executed, and any required signature guarantees (as described in Section 2 of this Offer to Purchase under the caption "Signature Guarantees") or an Agent's Message, and any other required documents.

Accordingly, stockholders tendering shares of Triangle common stock in the Offer may be paid at different times depending upon when certificates for shares or Book-Entry Confirmations with respect to shares are actually received by the Depositary.

The per share consideration paid to any stockholder in the Offer will be the highest per share consideration paid to any other stockholder in the Offer.

For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, shares of Triangle common stock that are validly tendered in the Offer and not withdrawn prior to the Expiration Date of the Offer as, if and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance for payment of such shares. On the

terms of and subject to the conditions to the Offer, payment for shares of Triangle common stock that are accepted for payment in the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as an agent for stockholders tendering shares in the Offer for the purpose of receiving payment from the Purchaser and transmitting payment to such stockholders whose shares of Triangle common stock have been accepted for payment in the Offer.

Under no circumstances will interest be paid on the Offer Price for shares of Triangle common stock that are tendered in the Offer, regardless of any extension of, or amendment to, the Offer or any delay in paying for such shares.

If the Purchaser is delayed in its acceptance for payment of, or payment for, shares of Triangle common stock that are tendered in the Offer, or is unable to accept for payment, or pay for, shares that are tendered in the Offer for any reason, then, without prejudice to the Purchaser's rights under the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange Act (relating to a bidder's obligation to pay for or return tendered securities promptly after the termination or withdrawal of such bidder's offer) and the terms of the Merger Agreement), the Depositary may, nevertheless, on behalf of the Purchaser, retain shares of Triangle common stock that are tendered in the Offer, and such shares may not be withdrawn except to the extent that stockholders tendering such shares are entitled to do so as described in Section 3 (Withdrawal Rights) of this Offer to Purchase.

If any shares of Triangle common stock that are tendered in the Offer are not accepted for payment pursuant to the terms and conditions of the Offer for any reason, the certificates for such shares will be returned (and, if certificates are submitted for more shares than are tendered, new certificates for the shares not tendered will be sent) in each case without expense to the stockholder tendering such shares (or, in the case of shares delivered by book-entry transfer of such shares into the Depositary's account at the Book-Entry Transfer Facility pursuant to the book-entry transfer procedures, such shares will be credited to an account maintained at the Book-Entry Transfer Facility), as promptly as practicable after the expiration or termination of the Offer.

5. Certain United States Federal Income Tax Consequences

The receipt of cash in the Offer or the Merger will be a taxable transaction for United States federal income tax purposes under the Internal Revenue Code of 1986, as amended (which is sometimes referred to as the "IRC" in this Offer to Purchase), and may also be a taxable transaction under applicable state, local or foreign income or other tax laws. Generally, for U.S. federal income tax purposes, a U.S. stockholder whose shares of Triangle common stock are accepted for payment in the Offer will recognize gain or loss equal to the difference between the amount of cash received by the stockholder in the Offer or the Merger and the stockholder's aggregate adjusted tax basis in the shares tendered by the stockholder and accepted for payment in the Offer or converted into cash in the Merger, as the case may be. Gain or loss will be calculated separately for each block of shares tendered and accepted for payment in the offer or converted into cash in the merger, as the case may be.

If shares of Triangle common stock that are tendered in the Offer are held by a tendering U.S. stockholder as capital assets, gain or loss recognized by such stockholder will be capital gain or loss, which will be long-term capital gain or loss if such stockholder's holding period for such shares exceeds one year. In the case of a tendering non-corporate stockholder, long-term capital gains will be eligible for a maximum United States federal income tax rate of 20%. In addition, there are limits on the deductibility of capital losses.

A stockholder (other than certain exempt stockholders including, among others, all corporations and certain foreign individuals) that tenders shares of Triangle common stock in the Offer may be subject to 30% backup withholding unless such stockholder provides such

stockholder's taxpayer identification number and certifies under penalty of perjury that such taxpayer identification number is correct (or properly certifies that it is awaiting a taxpayer identification number) and certifies as to no loss of exemption from backup withholding and otherwise complies with the applicable requirements of the backup withholding rules. A stockholder whose shares of Triangle common stock are accepted for payment in the Offer that does not furnish a required taxpayer identification number or which does not otherwise establish a basis for an exemption from backup withholding may be subject to a penalty imposed by the United States Internal Revenue Service. See Section 2 (Procedures for Tendering Shares of Triangle Common Stock in the Offer) of this Offer to Purchase under the caption "Backup Withholding". Each stockholder that is tendering shares of Triangle common stock in the Offer who is a U.S. citizen or U.S. resident alien should complete and sign the Substitute Form W-9 included as part of the Letter of Transmittal enclosed with this Offer to Purchase to provide the information and certification necessary to avoid backup withholding. Stockholders who are not U.S. citizens or U.S. resident aliens should complete, sign and return to the Depositary a Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, copies of which may be obtained by contacting the Depositary, in order to avoid backup withholding.

If backup withholding applies to a stockholder that is tendering shares of Triangle common stock in the Offer, the Depositary is required to withhold 30% of any amounts that would otherwise be paid to such stockholder in connection with the Offer. Backup withholding is not an additional tax. Rather, the amount of the backup withholding can be credited against the United States federal income tax liability of the person subject to the backup withholding, provided that the required information is given to the United States Internal Revenue Service. If backup withholding results in an overpayment of tax, the stockholder subject to such backup withholding can obtain a refund by filing a United States federal income tax return.

The foregoing description is based on the IRC, regulations issued thereunder, judicial decisions and administrative rulings, all of which are subject to change, possibly with retroactive effect. The foregoing description may not be applicable with respect to shares of Triangle common stock that are received pursuant to the exercise of employee stock options or otherwise as compensation or with respect to holders of shares of Triangle common stock who are subject to special tax treatment under the IRC — such as non-U.S. persons, insurance companies, dealers or brokers in securities or currencies, tax-exempt organizations and financial institutions — and may not apply to a holder of shares of Triangle common stock in light of individual circumstances, such as holding shares of Triangle common stock as a hedge or as part of a hedging, straddle, conversion, synthetic security, integrated investment or other risk-reduction transaction.

6. Price Range of Shares of Triangle Common Stock; Dividends on Shares of Triangle Common Stock

Shares of Triangle common stock are listed on The Nasdaq National Market under the symbol "VIRS", and have been listed on The Nasdaq National Market at all times since November 1, 1996.

The following table sets forth, for each of the periods indicated, the high and low closing sales prices per share of Triangle common stock on The Nasdaq National Market.

		High		Low
Fiscal Year Ended December 31, 2000:
	First Quarter	$	27.25	$	11.50
	Second Quarter		15.00		4.88
	Third Quarter		11.06		5.00
	Fourth Quarter		9.44		4.50
Fiscal Year Ended December 31, 2001:
	First Quarter		8.75		4.50
	Second Quarter		6.45		3.75
	Third Quarter		4.75		2.25
	Fourth Quarter		4.50		2.90
Fiscal Year Ending December 31, 2002:
	First Quarter		5.95		3.60
	Second Quarter		5.11		2.11
	Third Quarter		5.20		1.69
	Fourth Quarter (through December 13, 2002)		5.93		2.01

On December 3, 2002, the last trading day before Gilead and Triangle announced that they had entered into the Merger Agreement, the last sale price of shares of Triangle common stock reported on The Nasdaq National Market was $4.50 per share; therefore, the Offer Price of $6.00 per share represents a premium of 33.33% over such price. On December 13, 2002, the last full trading day prior to the commencement of the Offer, the last sale price of shares of Triangle common stock reported on The Nasdaq National Market was $5.86 per share. Stockholders are urged to obtain current market quotations for shares of Triangle common stock before making a decision with respect to the Offer.

Triangle has not declared or paid any cash dividends since its initial public offering. In addition, under the terms of the Merger Agreement, Triangle is not permitted to declare or pay dividends in respect of shares of its common stock.

7. Effect of the Offer on the Market for Triangle Common Stock; Nasdaq Listing of Triangle Common Stock; Exchange Act Registration of Triangle Common Stock; Margin Regulations

Effect of the Offer on the Market for Triangle Common Stock

The purchase of shares of Triangle common stock in the Offer will reduce the number of holders of shares of Triangle common stock and the number of shares of Triangle common stock that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining shares of Triangle common stock held by the public.

Nasdaq Listing of Triangle Common Stock

Gilead intends to cause all shares of Triangle common stock to be delisted from The Nasdaq National Market promptly upon completion of the Merger.

Even if the Merger is not completed, if shares of Triangle common stock are accepted for payment in the Offer, Triangle may no longer meet the requirements for continued listing on The Nasdaq National Market, depending upon the number of shares accepted for payment in the Offer. According to Nasdaq's published guidelines, Nasdaq would consider disqualifying shares of

Triangle common stock for listing on The Nasdaq National Market if, among other possible grounds, the number of publicly held shares of Triangle common stock falls below 750,000, the total number of beneficial holders of round lots of shares of Triangle common stock falls below 400, or the market value of publicly held shares of Triangle common stock over a 30-consecutive business day period is less than $5,000,000. Shares of Triangle common stock that are held by directors or officers of Triangle, or by any beneficial owner of more than 10% of the shares of Triangle common stock, are not considered to be publicly held for this purpose. According to Triangle, as of December 3, 2002, there were 76,904,133 shares of its common stock outstanding. If, as a result of the purchase of shares of Triangle common stock in the Offer or otherwise, the shares of Triangle common stock no longer meet the requirements of Nasdaq for continued listing and such shares are either no longer eligible for The Nasdaq National Market or are delisted from Nasdaq altogether, the market for Triangle common stock will be adversely affected.

If Nasdaq were to delist shares of Triangle common stock, the market for shares of Triangle common stock would be adversely affected. It is possible that such shares would continue to trade on other securities exchanges or in the over-the-counter market and that price quotations would be reported by such exchanges. Under such circumstances, however, the extent of the public market for Triangle common stock and the availability of such quotations would depend upon the number of holders of such shares remaining at such time, the level of interest in maintaining a market in such shares on the part of securities firms, the possible termination of registration of such shares under the Exchange Act (as described below) and other factors.

Exchange Act Registration of Triangle Common Stock

Triangle common stock is currently registered under the Exchange Act. Such registration may be terminated upon application of Triangle to the Securities and Exchange Commission if shares of Triangle common stock are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of registration of shares of Triangle common stock under the Exchange Act would reduce the information required to be furnished by Triangle to its stockholders and to the Securities and Exchange Commission and would make certain provisions of the Exchange Act no longer applicable to Triangle, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy or information statement pursuant to sections 14(a) and 14(c) of the Exchange Act in connection with meetings of Triangle's stockholders and the related requirement of furnishing an annual report to Triangle's stockholders, and the requirements of Rule 13e-3 under the Exchange Act with respect to going private transactions. Furthermore, the ability of affiliates of Triangle and persons holding restricted securities of Triangle to dispose of such securities pursuant to Rule 144 or 144A promulgated under the Securities Act of 1933, as amended (the "Securities Act"), may be impaired or eliminated if Triangle common stock is no longer registered under the Exchange Act. The Purchaser intends to seek to cause Triangle to apply for termination of registration of Triangle common stock under the Exchange Act as soon after the successful completion of the Offer as the requirements for such termination are met.

Margin Regulations

Shares of Triangle common stock are currently margin securities under the regulations of the Board of Governors of the Federal Reserve System (which is sometimes referred to as the "Federal Reserve Board" in this Offer to Purchase), which has the effect, among other things, of allowing brokers to extend credit on the collateral of shares of Triangle common stock. Depending upon factors similar to those described above regarding listing and market quotations, it is possible that, following the Offer, shares of Triangle common stock would no longer constitute margin securities for the purposes of the margin regulations of the Federal Reserve Board and therefore could no longer be used as collateral for loans made by brokers.

8. Certain Information Concerning Triangle

General

Triangle is a Delaware corporation with its principal offices located at 4 University Place, 4611 University Drive, Durham, North Carolina 27707. Triangle's telephone number at that address is (919) 493-5980. Triangle was incorporated in Delaware on July 12, 1995. Triangle develops new drug candidates primarily in the antiviral area, with a particular focus on therapies for HIV, including AIDS, and the hepatitis B virus.

Available Information

Triangle is subject to the informational requirements of the Exchange Act and, in accordance therewith, is required to file reports and other information with the Securities and Exchange Commission relating to its business, financial condition and other matters. Certain information as of particular dates concerning Triangle's directors and executive officers, their remuneration, stock options and other matters, the principal holders of Triangle's securities and any material interest of such persons in transactions with Triangle is required to be disclosed in Triangle's proxy statements distributed to Triangle's stockholders and filed with the Securities and Exchange Commission. Such reports, proxy statements and other information is available for inspection at the public reference facilities of the Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such information is obtainable, by mail, upon payment of the Securities and Exchange Commission's customary charges, by writing to the Securities and Exchange Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The Securities and Exchange Commission also maintains a web site on the Internet at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that are filed electronically with the Securities and Exchange Commission.

Except as otherwise stated in this Offer to Purchase, the information concerning Triangle contained in this Offer to Purchase has been taken from or based upon publicly available documents on file with the Securities and Exchange Commission and other publicly available information. Although the Purchaser and Gilead do not have any knowledge that any such information is untrue, neither the Purchaser nor Gilead takes any responsibility for the accuracy or completeness of such information or for any failure by Triangle to disclose events that may have occurred and may affect the significance or accuracy of any such information.

9. Certain Information Concerning the Purchaser and Gilead

The Purchaser is a Delaware corporation and a wholly owned subsidiary of Gilead. The Purchaser was organized by Gilead to acquire Triangle and has not conducted any unrelated activities since its organization. All outstanding shares of capital stock of the Purchaser are owned by Gilead. The principal office of the Purchaser is located at the same address as Gilead's principal office listed below, and its telephone number at that address is the same telephone number as Gilead's telephone number listed below.

Gilead is a Delaware corporation with its principal office located at 333 Lakeside Drive, Foster City, California 94404. Gilead's telephone number at that address is (650) 574-3000. Gilead is an independent biopharmaceutical company focused on the discovery, development and commercialization of antivirals, antibacterials and antifungals to treat life-threatening infectious diseases.

The name, citizenship, business address, present principal occupation or employment and five-year employment history of each of the directors and executive officers of the Purchaser and Gilead are listed in Schedule I to this Offer to Purchase.

During the last five years, none of the Purchaser, Gilead or, to the best knowledge of the Purchaser and Gilead, any of the persons listed in Schedule I to this Offer to Purchase (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) was a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of such laws.

Except as described in this Offer to Purchase, none of the Purchaser, Gilead or, to the knowledge of the Purchaser and Gilead, any of the persons listed in Schedule I to this Offer to Purchase, or any associate or majority-owned subsidiary of Gilead, the Purchaser or any of the persons listed in Schedule I to this Offer to Purchase, beneficially owns any equity security of Triangle, and none of the Purchaser, Gilead or, to the knowledge of the Purchaser and Gilead, any of the other persons or entities referred to above, or any of the respective directors, executive officers or subsidiaries of any of the foregoing, has effected any transaction in any equity security of Triangle during the past 60 days.

Except as described in this Offer to Purchase or the Tender Offer Statement on Schedule TO filed by Gilead with the Securities and Exchange Commission to which this Offer to Purchase is filed as an exhibit, (i) there have not been any contacts, transactions or negotiations between the Purchaser or Gilead, any of their respective subsidiaries or, to the knowledge of the Purchaser and Gilead, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and Triangle or any of its directors, officers or affiliates, on the other hand, that are required to be disclosed pursuant to the rules and regulations of the Securities and Exchange Commission and (ii) none of the Purchaser, Gilead or, to the knowledge of the Purchaser and Gilead, any of the persons listed on Schedule I to this Offer to Purchase, has any contract, arrangement, understanding or relationship with any person with respect to any securities of Triangle.

10. Source and Amount of Funds

The Offer is not conditioned on any financing contingencies.

The total amount of funds required by the Purchaser to pay for all outstanding shares of Triangle common stock that are tendered in the Offer and converted into the right to receive cash in the Merger, and to pay all fees and expenses related to the Offer and the Merger, is estimated to be approximately $485 million. The Purchaser plans to obtain all funds needed for the Offer and the Merger through capital contributions or loans that will be made by Gilead, either directly or through one or more wholly owned subsidiaries of Gilead, to the Purchaser. Gilead expects to use its cash on hand and cash equivalents to make this contribution.

The Purchaser believes that the financial condition of Gilead and its affiliates is not material to a decision by a holder of shares of Triangle common stock whether to tender such shares in the Offer because (i) cash is the only consideration that will be paid to the holders of Triangle common stock in connection with the Offer and the Merger, (ii) the Purchaser is offering to purchase all of the outstanding shares of Triangle common stock in the Offer, (iii) the Offer is not subject to any financing contingencies and (iv) Gilead has sufficient cash on hand and cash equivalents to provide the Purchaser with the amount of cash consideration payable to holders of Triangle common stock in the Offer and the Merger.

11. Background of the Offer

Gilead regularly evaluates different strategies to improve its competitive position and enhance stockholder value, including opportunities for acquisitions of other companies or their assets.

On or about August 8, 2001, Gilead and Triangle executed a mutual confidentiality agreement imposing confidentiality obligations on each other in connection with the evaluation or pursuit of certain mutually beneficial business opportunities such as a possible strategic or financial transaction between the two companies. This agreement contained mutual standstill provisions prohibiting each party for a period of 18 months from the date of the agreement from offering to acquire or acquiring (via a tender offer or otherwise) the other party, or taking certain related actions including soliciting proxies, without the prior written consent of the other party's board of directors.

On August 23, 2001, Dr. John Milligan, then the Vice President of Corporate Development of Gilead, Dr. Howard Jaffe, Senior Medical Advisor of Gilead, and Peter Virsik, Manager, Corporate Development of Gilead, met with Dr. David Barry, then the Chairman and Chief Executive Officer of Triangle, and a representative of Banc of America Securities, financial advisor to Triangle, in San Francisco to discuss the possibility of a business combination involving Triangle and Gilead or some other type of financing transaction.

In late August, 2001, Robert Weiland, Director, Licensing and New Business Development, Americas of Abbott Laboratories ("Abbott"), which then held certain product rights with respect to Coviracil® under the terms of an agreement with Triangle, met with Dr. Milligan of Gilead at Abbott's headquarters in Illinois to discuss a potential three-way collaboration among Gilead, Triangle and Abbott with respect to a possible co-formulation of Viread®, an HIV drug developed and marketed by Gilead, and Coviracil®.

On September 20, 2001, Dr. Milligan and Mr. Virsik of Gilead had a telephone conference with Chris Rallis, the President and Chief Operating Officer of Triangle. This telephone conference focused on the financial and strategic aspects of a possible collaboration.

During the months of September and October, 2001, Mr. Rallis and Robert Amundsen, Chief Financial Officer of Triangle, participated in several telephone conferences with representatives of Gilead to further discuss a possible collaboration between the two companies including their respective products.

In November 2001, Gilead, Triangle and Abbott executed a mutual confidentiality agreement relating to a potential collaboration for the development of combination therapies for HIV, including a co-formulation of Viread® and Coviracil®.

On November 30, 2001, representatives of Abbott and Gilead met at Gilead's headquarters in Foster City, California to discuss (among other things) a potential co-promotion relationship involving a co-formulation of Viread® and Coviracil®. William Calhoun, Director, Strategic Partnerships, Mr. Weiland and representatives of Abbott's formulation and regulatory groups participated in this meeting on behalf of Abbott. Dr. Milligan, Dr. Terry Dahl, Director, Formulation, Jung Choi, Director, Corporate Development, Mr. Virsik and Dr. Carol Brosgart, Vice President, Clinical Research, participated in this meeting on behalf of Gilead.

On December 10, 2001, Gilead and Abbott executed a Material Transfer Agreement in order to facilitate the conduct of initial co-formulation work at Abbott on Viread® and Coviracil®.

During the week of December 16, 2001, Dr. Milligan and Mr. Virsik of Gilead met with Mr. Weiland of Abbott to further discuss a possible collaboration.

On January 22, 2002, Abbott sent to Gilead a proposed development plan for a co-formulation of Viread® and Coviracil®.

On January 28, 2002, Dr. Barry, the Chairman and Chief Executive Officer of Triangle, died unexpectedly. His position with Triangle was not immediately filled.

On January 30, 2002, at a regularly scheduled meeting, Gilead's board of directors discussed potential collaboration and acquisition opportunities, including a possible transaction with Triangle.

On February 22, 2002, Gilead sent to Abbott a proposed term sheet for a co-formulation of Viread® and Coviracil®.

From March 4 through March 6, 2002, representatives of Triangle, Abbott and Gilead jointly conducted market research in three cities with respect to a possible co-formulation of Viread® and Coviracil®. Shay Weisbrich, Vice President, Sales and Marketing, Americas, Antoinette Kenton, Manager, Market Research, Akram Bouchenaki, Director, Global Marketing, Dr. Bruno Delagneau, Vice President of Global Marketing, Mike Inouye, Senior Vice President of Sales and Marketing, Rick Wantiez, Director of Global Marketing, and Mr. Virsik participated in this process on behalf of Gilead. Mr. Calhoun, John Fitzgerald, Senior Manager, Global Licensing and New Business Development, Ana Nicolau and additional marketing personnel of Abbott participated in this process on behalf of Abbott. Paul Dreyer, Executive Vice President of Commercial Operations, participated in this process on behalf of Triangle.

On March 13, 2002, representatives of Triangle, Abbott and Gilead had a telephone conference to discuss a possible co-formulation of Viread® and Coviracil®. Gerald Wenker, Divisional Vice President, Licensing and New Business Development-Americas on behalf of Abbott, Mr. Dreyer on behalf of Triangle and Dr. Milligan (who had since been appointed Senior Vice President and Chief Financial Officer) and Mr. Virsik on behalf of Gilead participated in this conference.

On April 3, 2002, representatives of Triangle, Abbott and Gilead met at Gilead's headquarters to discuss the results of the market research conducted in early March 2002, as well as a potential co-promotion arrangement. Mr. Dreyer and Dr. Franck Rousseau, Executive Vice President of Medical Affairs and Chief Medical Officer, participated in these discussions on behalf of Triangle. Mr. Wenker, Mr. Calhoun, Isabelle Gaultier, Senior Marketing and Business Manager, Anti-Virals and Mr. Fitzgerald participated in these discussions on behalf of Abbott. Dr. Milligan, Dr. Jaffe, Mr. Inouye, Dr. Delagneau, Deborah Fletcher, then Director, U.S. Sales, Dr. Norbert Bischofberger, Executive Vice President, Research and Development, and Mr. Virsik participated in these discussions on behalf of Gilead. At and shortly after this meeting, Gilead learned that there was a possibility that Triangle might seek to reacquire from Abbott all product rights with respect to Coviracil®, that Abbott and Triangle might seek to terminate their business relationship, and that further discussions regarding a possible co-formulation of Viread® and Coviracil® would therefore be exclusively or primarily between Gilead and Triangle.

On April 25, 2002, Triangle delivered a proposal to Gilead regarding a potential co-promotion arrangement between the companies for a co-formulation of Viread® and Coviracil®, and for Coviracil® as a single agent drug, conditioned on Triangle's reacquisition from Abbott of all product rights with respect to Coviracil®.

On May 1, 2002, at a regularly scheduled meeting, Gilead's board of directors further discussed potential collaboration and acquisition opportunities, including a possible transaction with Triangle.

On May 2, 2002, Mr. Dreyer and Mr. Amundsen of Triangle and Dr. Milligan and Mr. Virsik of Gilead participated in a telephone conference. During this conference, the parties discussed a co-promotion arrangement both for a possible co-formulation of Viread® and Coviracil® and for Coviracil® as a single agent drug. The parties also discussed the status of Triangle's discussions with Abbott regarding the possible reacquisition by Triangle of all product rights with respect to Coviracil®, as well as certain matters associated with the possibility of such a reacquisition, including the European Union regulatory discussions regarding Coviracil®, potential timelines for a meeting with the United States Food and Drug Administration (the "FDA") with regard to a New

Drug Application, the possible terms of a settlement of certain patent disputes involving Coviracil®, clinical trial updates and the respective product revenue expectations of Triangle and Gilead.

On July 1, 2002, representatives of Triangle met with representatives of Gilead at Gilead's headquarters. At this meeting, Triangle made a commercial and scientific presentation to Gilead regarding Coviracil® and regarding a possible co-formulation of Viread® and Coviracil®. Mr. Rallis, Mr. Amundsen, Mr. Dreyer and Dr. Rousseau participated in this meeting on behalf of Triangle, and Dr. Bischofberger, Mark Perry, Executive Vice President, Operations, Dr. Jaffe, Mr. Inouye, Dr. William Lee, Senior Vice President, Research, Dr. Milligan and Mr. Virsik participated in this meeting on behalf of Gilead.

On July 25, 2002, at a regularly scheduled meeting, Gilead's board of directors was updated by members of Gilead's management on the status of discussions with Triangle.

On July 30, 2002, Triangle announced favorable clinical trial results with respect to Coviracil®, and confirmed its intention to file a New Drug Application for Coviracil® with the FDA during the third quarter of 2002.

Also on July 30, 2002, Triangle publicly announced its reacquisition of product rights under its agreement with Abbott, the parties having terminated a collaboration they formed in June 1999 for the development and commercialization of several products being developed by Triangle, including Coviracil®. Termination of the collaboration caused the right to commercialize these products to revert from Abbott to Triangle and released Abbott from its substantial milestone payment obligations and other funding obligations under the collaboration. On that date, Mr. Dreyer contacted Dr. Milligan by email to notify him of this development.

On July 31, 2002, Gilead sent to Triangle a proposed term sheet for a collaboration between the companies involving a possible co-formulation of Viread® and Coviracil®.

During August 2002, Dr. Milligan and Mr. Dreyer discussed the proposed collaboration by telephone on a number of occasions. These discussions did not result in an agreement on a structure for a collaboration between Triangle and Gilead.

On August 5, 2002, Triangle announced that Daniel Welch had been named Chairman and Chief Executive Officer of Triangle.

On September 6, 2002, Dr. Milligan sent a letter to Mr. Welch setting forth a revised proposal for a co-promotion arrangement for a co-formulation of Viread® and Coviracil® and for Coviracil® as a single agent drug.

On September 24, 2002, Mr. Dreyer sent Dr. Milligan a letter responding to Gilead's proposal regarding a possible co-promotion arrangement, setting forth certain alternative structuring and financial proposals on behalf of Triangle with respect to any such arrangement.

On September 27, 2002, representatives of Triangle and Gilead met in San Diego, California in order to discuss a possible co-promotion arrangement for a co-formulation of Viread® and Coviracil® and for Coviracil® as a single agent. At this meeting, Gilead decided to conduct scientific due diligence in North Carolina. Mr. Welch, Mr. Dreyer, Joseph Quinn, Vice President, Biometrics, and Dr. Cary Moxham, Vice President, Business Development, participated in the meeting on behalf of Triangle. Dr. John Martin, President and Chief Executive Officer, Mr. Perry, Dr. Jaffe, Dr. Milligan, Dr. Michael Hitchcock, Vice President and Chief of Staff, Research and Development, and Mr. Virsik participated in the meeting on behalf of Gilead.

On October 10, 2002, Dr. Milligan, Dr. Jaffe, Dr. Bischofberger and Dr. Hitchcock of Gilead met with Mr. Quinn, Mr. Dreyer, Mr. Welch, Andrew Finkle, Executive Vice President, General Counsel, Anne McKay, Executive Vice President, Regulatory Affairs, Robert Blum, Vice President, Clinical

Pharmacology and Drug Metabolism, Dr. Moxham, Dr. George Szezech, Vice President Toxicology and Preclinical Pharmacology, Linda Anderson, Director, Regulatory Compliance, Dr. Jean Cui, Director, Drug Safety Surveillance and Kevin Hurley, CMC Specialist of Triangle in North Carolina to conduct regulatory and clinical due diligence on Coviracil®.

During the week of October 13, 2002, Mr. Welch on behalf of Triangle and Dr. Martin on behalf of Gilead met in Laguna Niguel, California at the Biotech CEO conference. The parties jointly decided that, because Triangle and Gilead had not been able to come to terms on a collaboration regarding Coviracil®, it made sense for the parties to discuss a possible acquisition by Gilead of Triangle. Mr. Welch undertook to discuss the possibility of such an acquisition with Triangle's board of directors.

During the last two weeks of October 2002, Dr. Milligan on behalf of Gilead and Mr. Welch on behalf of Triangle had various discussions with respect to a possible acquisition by Gilead of Triangle, including discussions regarding potential structures and terms.

On October 24, 2002, Gilead commenced working with Goldman, Sachs & Co. ("Goldman Sachs") as Gilead's financial advisor with respect to a possible acquisition of Triangle by Gilead.

On October 30, 2002, at a regularly scheduled meeting of Gilead's board of directors, Dr. Martin, Mr. Perry and Dr. Milligan discussed with the board a possible acquisition of Triangle by Gilead. The board approved the transmittal of a letter to Triangle indicating Gilead's interest in acquiring Triangle in a stock-for-stock transaction that would be valued at $5.00 per share of Triangle common stock, which then represented an exchange ratio of 0.137 of a share of Gilead common stock for each outstanding share of Triangle common stock.

On November 1, 2002, Dr. Martin on behalf of Gilead sent to Mr. Welch on behalf of Triangle a letter setting forth the proposal described above. Following the delivery of this letter, Dr. Martin, Dr. Milligan and Mr. Welch participated in a telephone conference in which Mr. Welch invited Gilead to conduct additional due diligence with respect to Triangle.

From November 5 through November 7, 2002, representatives of Gilead conducted due diligence at Triangle's facilities and at the offices of Triangle's outside legal counsel in North Carolina, and continued to discuss with representatives of Triangle a possible acquisition of Triangle by Gilead. Dr. Martin, Dr. Milligan, Mr. Perry, Dr. Jaffe, Dr. Hitchcock, Dr. Taiyin Yang, Vice President, Manufacturing, Michael Aguiar, Vice President, Finance, Gregg Alton, Vice President and General Counsel, David Lawson, Senior Corporate Counsel, Mark Bosse, Senior Director, Intellectual Property, and Mr. Virsik of Gilead, and Gilead's legal and financial advisors, participated in the conduct of this due diligence and these discussions on behalf of Gilead, and Mr. Welch, Mr. Rallis, Mr. Amundsen, Mr. Dreyer, Dr. Rousseau, Mr. Finkle, Ms. McKay, Dr. Moxham, Dr. Szezech, Mr. Quinn, Thomas Staab, Treasurer, and Pamela Goss, Senior Associate Director of Finance, participated in these discussions on behalf of Triangle. During this period, Gilead sought an agreement from Triangle that Triangle would negotiate an acquisition transaction exclusively with Gilead for a specified period of time. Triangle refused to agree to such exclusivity, and insisted on retaining the right to discuss alternative transactions with other third parties. During this period, Gilead and Triangle also negotiated and executed a mutual confidentiality agreement dated November 1, 2002 relating to a possible strategic or financial transaction. This agreement contained provisions extending for an additional period through November 1, 2003, the standstill period that was in effect between the parties under the confidentiality agreement that had been entered into in August 2001. These provisions prohibited either party from offering to acquire or acquiring the other party, or taking certain related actions including soliciting proxies, without the prior written consent of the other party's board of directors.

On November 11, 2002, Dr. Martin sent Mr. Welch a letter indicating Gilead's interest in acquiring Triangle in a stock-for-stock transaction at a fixed exchange ratio of 0.154 of a share of Gilead common stock for each outstanding share of Triangle common stock, which then represented an implied valuation of $5.50 per share of Triangle common stock. This letter again requested that Triangle negotiate exclusively with Gilead.

On November 13, 2002, Mr. Welch had a telephone conversation with Dr. Milligan to discuss a price collar provision that Triangle had apparently expected would be part of Gilead's proposal. During this conversation, Mr. Welch indicated that Triangle would not agree to a fixed exchange ratio or an exchange ratio formulation that included a collar in any stock-for-stock transaction. He indicated that Triangle was instead seeking a transaction with a fixed per share valuation deliverable to Triangle's stockholders upon completion of the transaction. The parties determined to continue exploring this issue.

On November 15, 2002, Mr. Alton delivered to Mr. Finkle an initial draft of a merger agreement contemplating an acquisition by Gilead of Triangle in a stock-for-stock transaction.

Also on November 15, 2002, at a special meeting of Gilead's board of directors, Dr. Martin, Mr. Perry, Mr. Alton and Dr. Milligan made presentations to the board regarding the potential benefits of and rationale for an acquisition of Triangle, as well as the structure and range of values of the proposed acquisition. Members of Gilead's senior management also discussed with the board the status of the negotiations with Triangle and the results of the due diligence investigation of Triangle as completed to date. Representatives of Gilead's financial advisor, Goldman Sachs, also made a financial presentation to the board with respect to the proposed acquisition.

During the week of November 18, 2002, representatives of Gilead and Triangle engaged in further discussions regarding the structure of a proposed acquisition and the consideration payable to stockholders of Triangle in such an acquisition.

On November 20, 2002, Dr. Milligan proposed to Mr. Welch an acquisition of Triangle by Gilead for cash consideration of $5.50 per share.

On November 21, 2002, Mr. Finkle sent to Mr. Alton a markup prepared by Triangle's outside legal counsel of Gilead's November 15, 2002 draft agreement for a stock-for-stock acquisition.

On November 23, 2002, Mr. Welch and Mr. Finkle, on behalf of Triangle, and Dr. Milligan, Mr. Alton and Mr. Virsik on behalf of Gilead, met at Cooley Godward LLP's offices in Reston, Virginia to discuss Gilead's proposal for a possible acquisition of Triangle by Gilead involving cash consideration of $5.50 per share payable to stockholders of Triangle. Representatives of Smith, Andersen, Blount, Dorsett, Mitchell & Jernigan LLP (Triangle's outside North Carolina counsel), King & Spalding (Triangle's outside special mergers and acquisitions counsel) and Banc of America Securities LLC (Triangle's financial advisor) also participated in the discussions on behalf of Triangle, and representatives of Cooley Godward LLP (Gilead's outside counsel) and Goldman Sachs (Gilead's financial advisor) also participated in the discussions on behalf of Gilead. In the course of these discussions, the parties also discussed the possibility of structuring the acquisition as a two-step transaction (consisting of a cash tender offer followed by a cash merger). Representatives of Triangle stressed that Gilead should bear the risk of adverse events occurring subsequent to signing the definitive acquisition agreement, and further indicated that the consideration payable to stockholders of Triangle would need to be higher than the $5.50 per share figure proposed by Gilead. Triangle's representatives also emphasized Triangle's desire to significantly limit the circumstances under which the transaction could be terminated by Gilead between the signing of the definitive acquisition agreement and the closing of the transaction, and stressed that because any acquisition of Triangle would be in lieu of a financing, the definitive acquisition agreement and related documents would need to address Triangle's liquidity and capital

resources requirements through the closing of the acquisition. The parties also discussed the extent to which it would be appropriate for Gilead to seek and obtain stockholder agreements from directors and other significant stockholders of Triangle committing such stockholders to tender their shares of Triangle common stock in the cash tender offer and vote to approve the merger (if necessary). Dr. Milligan and Mr. Welch discussed these matters further at a breakfast meeting in Reston held on November 24, 2002.

On November 26, 2002, at a special meeting of Gilead's board of directors, members of Gilead's senior management and representatives of Goldman Sachs discussed with the board a proposed acquisition of Triangle by Gilead at a price of $6.00 per share of Triangle common stock in a transaction structured as a cash tender offer by a wholly owned subsidiary of Gilead for all of Triangle's issued and outstanding shares followed by a cash merger of that subsidiary into Triangle. In addition, the acquisition would be accompanied by a $50 million convertible loan that would be made by Gilead to Triangle at or shortly after the time of the signing of the definitive acquisition agreement in order to address Triangle's working capital and liquidity concerns that had been previously expressed to Gilead. Dr. Martin, Mr. Perry, Dr. Milligan, Dr. Bischofberger, Mr. Alton and representatives of Goldman Sachs reviewed the negotiations that had taken place with Triangle since the last board meeting, and also updated the board on the due diligence review that had occurred. Goldman Sachs updated its financial presentation to the board concerning the proposed acquisition. Gilead's board discussed with members of Gilead's senior management and financial advisors the proposed terms of the Offer and the Merger. The members of Gilead's board, having determined that the Offer and the Merger were in the best interests of Gilead, then approved the Offer and the Merger and the related transactional agreements, and provided the executive officers of Gilead with delegated authority to complete the negotiation of a definitive merger agreement and related documents involving Gilead and Triangle.

Also on November 26, 2002, Mr. Alton on behalf of Gilead provided a draft of a proposed merger agreement to Triangle and Triangle's financial advisors and outside legal counsel, contemplating an acquisition of Triangle by Gilead in a transaction involving a cash tender offer by a wholly owned subsidiary of Gilead for all of Triangle's issued and outstanding shares followed by a cash merger of that subsidiary into Triangle. On November 27, 2002, Gilead provided drafts of a proposed form of stockholder agreement and the proposed forms of documents relating to the convertible loan to Triangle and Triangle's financial advisors and outside legal counsel.

On November 29 and November 30, 2002, representatives of Gilead and Triangle continued to negotiate the various agreements relating to the proposed acquisition and convertible loan via telephone conferences involving representatives of the respective companies and their respective financial and legal advisors. On November 30, Mr. Welch, Dr. Milligan and representatives of Triangle's and Gilead's financial advisors met by phone to develop a series of principles underlying the terms of the transaction. Following that call, the parties decided to meet at the offices of Triangle's outside counsel in Raleigh, North Carolina on Sunday, December 1, 2002 to continue negotiations. Gilead also agreed to provide Triangle with a revised draft of the merger agreement prior to the meeting.

Early in the morning on December 1, 2002, Gilead provided Triangle with a revised draft of the merger agreement and revised drafts of the accompanying financing documents, for consideration in the meetings beginning that evening. The Gilead team, comprised of Dr. Milligan, Mr. Alton and various other representatives of Gilead and its financial and legal advisors, arrived in Raleigh late in the afternoon on December 1, for the purpose of meeting with a team comprised of Mr. Welch, Mr. Finkle and various other representatives of Triangle and its financial and legal advisors. Negotiations that evening and into the morning of December 2, 2002 led to circulation of new drafts of transaction documents by Gilead on the evening of December 2. Negotiations then continued

overnight into the morning of December 3, 2002, resulting in general business understandings on all material points, subject to the preparation and review of final documentation.

On December 3, 2002, at a special meeting of Triangle's board of directors, the board unanimously approved the merger agreement, ancillary agreements and related matters, and unanimously voted to recommend the Offer and the Merger to Triangle's stockholders. Late on December 3, Gilead, Triangle and the Purchaser executed the merger agreement, and certain of Triangle's directors, executive officers and stockholders executed stockholder agreements in favor of Gilead and the Purchaser.

On December 4, 2002, before the open of trading on The Nasdaq National Market, Gilead and Triangle issued a joint press release announcing the execution of the merger agreement.

On December 9, 2002, Gilead provided the convertible loan to Triangle, Triangle and Gilead executed the promissory note evidencing the convertible loan, and Gilead and Triangle executed the related investor rights agreement.

On December 16, 2002, the Purchaser commenced the Offer.

12. Purpose of the Offer and the Merger; Plans for Triangle; The Merger Agreement; The Stockholder Agreements; The Convertible Loan

Purpose of the Offer and the Merger

The purpose of the Offer and Merger is to enable Gilead to acquire the entire equity interest in, and thus control of, Triangle. The Offer, as the first step in the acquisition of Triangle, is intended to facilitate the acquisition of all of the outstanding shares of Triangle common stock or, if fewer than all of the outstanding shares of Triangle common stock are tendered in the Offer and not withdrawn prior to the Expiration Date of the Offer, such lesser number of shares of Triangle common stock, subject to the conditions to the Offer described in Section 13 (Certain Conditions to the Offer) of this Offer to Purchase. The purpose of the Merger is for Gilead to acquire any and all outstanding shares of Triangle common stock that are not tendered in the Offer and accepted for payment by the Purchaser in the Offer.

Plans for Triangle

If the Minimum Condition and the other conditions to the Offer described in Section 13 (Certain Conditions to the Offer) of this Offer to Purchase have been satisfied and the Purchaser purchases the shares of Triangle common stock that are tendered in the Offer, Gilead intends and will have the right to designate representatives to Triangle's board of directors who will constitute at least a majority of the board of directors and therefore control Triangle. Following successful completion of the Offer and the Merger, Gilead intends to integrate Triangle's operations with those of Gilead under the direction of Gilead management. Gilead's principal reason for acquiring Triangle is to broaden its antiviral pipeline with additional HIV and hepatitis B products and to enhance its expertise in antiviral research and development. Gilead intends to continue to review Triangle and its assets, corporate structure, capitalization, operations, properties, policies, management and personnel and, subject to the terms of the Merger Agreement, to consider whether any changes would be desirable in light of the circumstances then existing, and reserves the right to take such actions or effect such changes as it deems desirable.

The Merger Agreement

The following is a summary of the Merger Agreement. The following summary does not purport to be a complete description of the terms and conditions of the Merger Agreement and is qualified in its entirety by reference to the Merger Agreement, a copy of which is filed as an exhibit to the

Tender Offer Statement on Schedule TO that has been filed with the Securities and Exchange Commission by the Purchaser and Gilead in connection with the Offer, and is incorporated in this Offer to Purchase by reference. The Merger Agreement may be examined, and copies obtained, by following the procedures described in Section 8 (Certain Information Concerning Triangle) of this Offer to Purchase.

The Offer

The Merger Agreement provides for the commencement of the Offer by the Purchaser. The Purchaser's obligation to accept for payment shares of Triangle common stock that are tendered in the Offer is subject to the satisfaction or waiver, if permitted under the Merger Agreement, of each of the conditions to the Offer that are described in Section 13 (Certain Conditions to the Offer) of this Offer to Purchase. Without Triangle's prior written consent: (i) the Minimum Condition may not be amended or waived; and (ii) no change may be made to the Offer that (A) changes the form of consideration to be paid pursuant to the Offer, (B) decreases the Offer Price or the number of shares of Triangle common stock sought to be purchased in the Offer, (C) imposes conditions to the Offer in addition to the Offer Conditions, (D) except as otherwise permitted by the Merger Agreement, extends the Expiration Date of the Offer beyond the initial Expiration Date of the Offer or (E) amends any other term of the Offer in a manner adverse to the holders of Triangle common stock.

The Offer is initially scheduled to expire 20 business days following the date of the commencement of the Offer. Notwithstanding anything to the contrary contained in the Merger Agreement, but subject to the parties' respective termination rights under the Merger Agreement: (i) if, on any date as of which the Offer is scheduled to expire, any Offer Condition has not been satisfied or waived, the Purchaser may, in its discretion, extend the Offer from time to time for such period of time as the Purchaser reasonably determines to be necessary to permit such Offer Condition to be satisfied; (ii) if, on any date as of which the Offer is scheduled to expire, any Offer Condition has not been satisfied or waived, the Purchaser must, if Triangle so requests in writing prior to the then-scheduled Expiration Date of the Offer, extend the Offer from time to time for such period of time (but in each case not more than 15 business days) as Triangle reasonably requests; (iii) the Purchaser may, in its discretion, extend the Offer from time to time for any period of time required by any rule or regulation of the Securities and Exchange Commission applicable to the Offer; (iv) if, on any date as of which the Offer is scheduled to expire, the Minimum Condition has been satisfied but the sum of the number of shares of Triangle common stock that have been validly tendered pursuant to the Offer (and not withdrawn) plus the number of shares of Triangle common stock owned by Gilead or any wholly-owned subsidiary of Gilead is less than 90% of the number of shares of Triangle common stock outstanding, then the Purchaser may, in its discretion, extend the offer for an additional period of not more than ten business days; and (v) the Purchaser may, in its discretion, elect to provide for a subsequent offering period (and one or more extensions thereof) in accordance with Rule 14d-11 under the Exchange Act. However, the Purchaser is not required to extend the Offer beyond June 1, 2003.

The Merger Agreement further provides that, on the terms of and subject to the conditions to the Offer, Gilead must cause the Purchaser to accept for payment all the shares of Triangle common stock that are validly tendered in the Offer and not withdrawn as soon as practicable after the Purchaser is permitted to do so under applicable legal requirements and Gilead must cause the Purchaser to pay for such shares promptly thereafter.

Top-Up Option

Pursuant to the Merger Agreement, Gilead and Purchaser have an irrevocable option (the "Top-Up Option") to purchase from Triangle, at a price per share equal to the Offer Price, a number

of shares of Triangle common stock (the "Top-Up Option Shares") that, when added to the number of any outstanding shares of Triangle common stock owned by Gilead or any wholly-owned subsidiary of Gilead at the time of exercise of the Top-Up Option, constitutes one share of Triangle common stock more than 90% of the number of shares of Triangle common stock that will be outstanding immediately after the issuance of the Top-Up Option Shares. The Top-Up Option may be exercised by Gilead or the Purchaser, in whole but not in part, at any time on or after the first date on which Purchaser accepts any shares of Triangle common stock for payment pursuant to the Offer (the "Acceptance Date"), and on or prior to the tenth business day after the later of (i) the Acceptance Date or (ii) the expiration of any subsequent offering period.

Appointment of Directors after Acceptance for Payment of Shares Tendered in the Offer

The Merger Agreement provides that, effective upon the Acceptance Date, Gilead will be entitled to designate to serve on Triangle's board of directors (the "Post-Acceptance Board") the number of directors, rounded up to the next whole number, equal to the product of (i) the total number of directors on Triangle's board of directors (giving effect to the election of any additional directors pursuant to these provisions) and (ii) a fraction having a numerator equal to the aggregate number of shares of Triangle common stock then beneficially owned by Gilead or the Purchaser (including all shares of Triangle common stock accepted for payment pursuant to the Offer), and having a denominator equal to the total number of shares of Triangle common stock then outstanding.

Pursuant to the Merger Agreement, if Gilead requests on or after the Acceptance Date, Triangle must use its reasonable best efforts to take all actions (including, to the extent necessary, obtaining resignations of incumbent directors and increasing the number of authorized directors) necessary to cause Gilead's designees to be elected or appointed to Triangle's board of directors. Furthermore, pursuant to the terms of the Merger Agreement, Triangle must (to the extent requested by Gilead) use its reasonable best efforts to cause individuals designated by Gilead to constitute the number of members, rounded up to the next whole number, on (i) each committee of Triangle's board of directors and (ii) the board of directors of each subsidiary of Triangle (and each committee thereof) that represents at least the same percentage as individuals designated by Gilead represent on Triangle's board of directors. The Merger Agreement requires that Triangle use its reasonable best efforts to ensure that, at all times until the completion of the Merger, at least two of the members of Triangle's board of directors are individuals who were directors of Triangle on the date of the Merger Agreement (the "Continuing Directors").

After the election or appointment of the directors designated by Gilead to Triangle's board of directors and prior to the completion of the Merger, under the terms of the Merger Agreement, the approval of a majority of the Continuing Directors will be required to authorize any of the following actions of Triangle, to the extent the action in question could reasonably be expected to affect adversely the holders of shares of Triangle common stock (other than Gilead or the Purchaser): (i) any action by Triangle with respect to any amendment or waiver of any term or condition of the Merger Agreement, the Merger, the Financing Documents (as defined below) or the certificate of incorporation or bylaws of Triangle; (ii) any termination or rescission of the Merger Agreement, the Merger or the Financing Documents by Triangle; (iii) any extension by Triangle of the time for the performance of any of the obligations or other acts of Gilead or the Purchaser, or any waiver or assertion of any of Triangle's rights under the Merger Agreement or the Financing Documents; or (iv) any other consent or action by Triangle's board of directors with respect to the Merger Agreement, the Merger or the Financing Documents.

The Merger

The Merger Agreement provides that, following the satisfaction or waiver of the conditions to the Merger described below under the caption "Conditions to the Merger", the Purchaser will be merged with and into Triangle in accordance with the applicable provisions of Delaware law, and Triangle will continue as the surviving corporation in the Merger and the separate corporate existence of the Purchaser will cease.

Certificate of Incorporation and Bylaws of the Surviving Corporation

The Merger Agreement provides that upon the completion of the Merger, the certificate of incorporation of the surviving corporation will be amended and restated to conform to Annex III to the Merger Agreement, and the bylaws of the surviving corporation will be amended and restated to conform to the bylaws of the Purchaser as in effect immediately prior to the completion of the Merger.

Directors and Officers of the Surviving Corporation

Under the terms of the Merger Agreement, upon the completion of the Merger, the directors and officers of the surviving corporation will be the respective individuals who are directors and officers of the Purchaser immediately prior to the completion of the Merger.

Conversion of Shares of Triangle Common Stock

Pursuant to the Merger Agreement, each share of Triangle common stock that is issued and outstanding immediately prior to the completion of the Merger (other than shares owned by Gilead, the Purchaser or Triangle, or by a wholly owned subsidiary of Gilead, the Purchaser or Triangle, or by any stockholder of Triangle who is entitled to and properly exercises appraisal rights under Delaware law) will be converted into the right to receive $6.00 (the price per share paid in the Offer) in cash, without interest thereon.

Appraisal Rights

Shares of Triangle common stock that are outstanding immediately prior to the completion of the Merger that are held by persons who have neither voted in favor of the Merger nor consented thereto in writing and who have properly and validly exercised their statutory rights of appraisal in respect of such shares in accordance with Section 262 of the General Corporation Law of the State of Delaware (the "DGCL") will not be converted into the right to receive $6.00 per share (the price per share paid in the Offer). Instead, these stockholders will only be entitled to receive payment of the fair value of their shares of Triangle common stock in accordance with Section 262 of the DGCL. Shares of Triangle common stock held by stockholders who fail to perfect, or otherwise withdraw or lose, their rights to appraisal under Section 262 of the DGCL, however, will be converted into the right to receive $6.00 per share (the price per share paid in the Offer) in cash, without interest thereon. A stockholder may withdraw his demand for appraisal by delivering to Triangle a written withdrawal of his demand for appraisal. The foregoing summary of Section 262 does not purport to be complete and is qualified in its entirety by reference to Section 262. Failure to follow the steps that Section 262 requires for perfecting appraisal rights may result in the loss of those rights.

Treatment of Triangle Options and Employee Stock Purchase Plan

The Merger Agreement provides that upon completion of the Merger, Gilead will cause each option to purchase Triangle common stock that is outstanding and unexercised immediately prior to the completion of the Merger, whether or not vested and whether or not the exercise price of such

option is in excess of the Offer Price, to become an option to purchase Gilead common stock by assuming such option in accordance with, and to the extent permitted by, the terms (as in effect as of the date of the Merger Agreement) of the stock incentive plan under which such option was issued and the terms of the stock option agreement by which such option is evidenced. Each option assumed by Gilead will be exercisable for that number of shares of Gilead common stock equal to the product obtained by multiplying (i) the aggregate number of shares of Triangle common stock that were issuable upon exercise of such option immediately prior to the completion of the Merger by (ii) the ratio of (x) the Offer Price ($6.00) to (y) the closing price per share of Gilead common stock on The Nasdaq Stock Market on the trading day immediately preceding the date on which the Merger is completed (the "Conversion Ratio"), rounding down to the nearest whole share. The per share exercise price under each option assumed by Gilead will be adjusted by dividing the per share exercise price under such option by the Conversion Ratio and rounding up to the nearest whole cent. Any restriction on the exercise of any option assumed by Gilead will continue in full force and effect, and the term, exercisability, vesting schedule and other provisions of such option will otherwise remain unchanged (subject to any change in such option triggered by the transactions contemplated by the Merger Agreement under the express terms (as in effect on the date of the Merger Agreement) of the stock incentive plan under which such option was issued and the terms of the agreement by which such option is evidenced). The Merger Agreement also provides that Gilead must file with the Securities and Exchange Commission, no later than 30 days after the date on which the Merger is completed, a registration statement on Form S-8 relating to the shares of Gilead common stock issuable with respect to the options assumed by Gilead in accordance with the Merger Agreement. If the assumption of any option in the manner described in Merger Agreement is not permitted under the terms of the stock incentive plan under which such option was issued as construed by the plan administrator prior to the Acceptance Date, then Gilead will not be required to assume such option in the manner described in the Merger Agreement, and Gilead will instead be entitled to cause such option to be treated in a manner permitted by the terms of such stock incentive plan. Notwithstanding the above, in lieu of assuming an outstanding option in accordance with the Merger Agreement, Gilead may elect to cause such option to be replaced by issuing a reasonably equivalent replacement stock option in substitution therefor.

Upon the completion of the Merger, Triangle's 1996 Employee Stock Purchase Plan (the "ESPP") will be terminated. The rights of participants in the ESPP with respect to any offering period then underway will be determined by treating the last business day prior to the completion of the Merger as the last day of such offering period and by making such other pro-rata adjustments as may be necessary to reflect the shortened offering period but otherwise treating such shortened offering period as a fully effective and completed offering period for all purposes under the ESPP. Prior to the completion of the Merger, Triangle must take all actions (including, if appropriate, amending the terms of the ESPP) that are necessary to give effect to the transactions contemplated by the Merger Agreement.

Representations and Warranties

Triangle made representations and warranties to the Purchaser and Gilead in the Merger Agreement, effective as of the date of the Merger Agreement, including representations relating to:

•: its subsidiaries and due organization;
•: its certificate of incorporation and bylaws;
•: its capitalization;
•: its filings with the Securities and Exchange Commission and financial statements;

•: the absence of certain changes during the period from September 30, 2002 through the date of the Merger Agreement;
•: title to its assets;
•: its inventories;
•: its intellectual property;
•: its contracts;
•: its liabilities;
•: its compliance with legal requirements;
•: certain of its business practices;
•: governmental authorizations and regulatory matters;
•: tax matters;
•: employee and labor matters, and its benefit plans;
•: environmental matters;
•: its insurance policies;
•: legal proceedings and orders;
•: its authority to enter into, and the enforceability of, the Merger Agreement and the Financing Documents;
•: the inapplicability of Section 203 of the DGCL;
•: noncontravention of laws and agreements, and absence of needed consents;
•: the fairness opinion received by Triangle's board of directors;
•: the financial advisory fees payable by Triangle;
•: the amendment to the Rights Agreement between Triangle and American Stock Transfer & Trust Company, as Rights Agent (as amended, the "Company Rights Agreement"); and
•: the information supplied by Triangle for inclusion in this Offer to Purchase and Triangle's Solicitation/Recommendation Statement on Schedule 14D-9.

The Purchaser and Gilead made representations and warranties to Triangle in the Merger Agreement, including representations relating to:

•: their valid existence;
•: their authority to enter into, and the enforceability of, the Merger Agreement and the Financing Documents;
•: noncontravention of laws and agreements, and absence of needed consents;
•: the information supplied by them for inclusion in this Offer to Purchase and Triangle's Solicitation/Recommendation Statement on Schedule 14D-9;
•: their nonreliance on any financial forecast, revenue projection, or financial model made available by Triangle to Gilead or its representatives;
•: the sufficiency of the funds held by them to complete the transactions contemplated by the Merger Agreement; and

•: the financial advisory fees payable by them.

Interim Conduct of Business

The Merger Agreement provides that, as otherwise expressly permitted under the Merger Agreement or as specified in the disclosure schedule provided by Triangle to Gilead and the Purchaser in connection with the Merger Agreement, as required by the Financing Documents (as defined below) or as reasonably necessary to comply with applicable legal requirements, during the period from the date of the Merger Agreement through the completion of the Merger, Triangle must:

•: use reasonable efforts to ensure that each of Triangle and its subsidiaries (A) conducts its business and operations in the ordinary course and in accordance with past practices and (B) preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, producers, partners, strategic partners, landlords, creditors, licensors, licensees, employees and other persons having business relationships with Triangle or either of its subsidiaries, except in certain circumstances;
•: use commercially reasonable efforts to ensure that it and each of its subsidiaries conducts its business and operations in compliance in all material respects with all applicable legal requirements and the requirements of all material contracts;
•: use commercially reasonable efforts to keep in full force its insurance policies or comparable replacements, except where Triangle receives Gilead's prior written approval;
•: promptly notify Gilead of (A) any written notice (or other communication known to Triangle) received from any person alleging that the consent of such person is or may be required in connection with any of the transactions contemplated by the Merger Agreement, and (B) any material legal proceeding commenced or, to the knowledge of Triangle, threatened against, relating to or involving or otherwise affecting Triangle or either of its subsidiaries;
•: use commercially reasonable efforts to (A) effectuate the transfer from Abbott Laboratories to Yuhan Corporation (or, with the consent of Gilead, another third party) of the technology necessary to manufacture bulk Emtricitabine in accordance with the Supply and Manufacturing Agreement between Triangle and Abbott Laboratories and in accordance with certain plans, procedures, requirements and timetables provided in the disclosure schedule delivered by Triangle to Gilead and the Purchaser in connection with the Merger Agreement and (B) effectuate the transfer from Abbott Laboratories to a third-party contract manufacturer of the technology necessary to formulate finished Emtricitabine from bulk Emtricitabine as promptly as reasonably practicable;
•: use commercially reasonable efforts to (A) prosecute and secure the approval by the FDA of the Coviracil new drug application filed by Triangle with the FDA on September 3, 2002 and (B) file with the European Medicines Evaluation Agency (the "EMEA"), and prosecute and secure approval by the EMEA of, a marketing authorisation application for marketing approval of Coviracil in the European Union;
•: (A) consult with Gilead in connection with any proposed meeting with the FDA or any other governmental body relating to any product of Triangle containing Amdoxovir, Clevudine or Emtricitabine (a "Triangle Pharmaceutical Product") and promptly provide Gilead with a summary report of any such meeting that occurs and (B) provide Gilead and its representatives with a reasonable opportunity to review any filing made on or after December 11, 2002 and any correspondence or other material communication, proposed to be submitted or otherwise transmitted to the FDA or any other governmental body on behalf of Triangle or either of its subsidiaries relating to any Triangle Pharmaceutical Product;

•: (A) make and keep Gilead reasonably informed of Triangle's plans and arrangements to obtain and maintain the quantities of bulk Emtricitabine and finished Emtricitabine and related raw materials and components and (B) use commercially reasonable efforts to obtain and maintain on a commercially reasonable basis quantities of bulk Emtricitabine and finished Emtricitabine and related raw materials and components that Triangle reasonably expects to be required by it or either of its subsidiaries to make sales of Coviracil for one year; and
•: use commercially reasonable efforts to maintain adequate and suitable quantities of Emtricitabine, Amdoxovir and Clevudine in bulk active pharmaceutical and finished product form for the conduct of all clinical trials being conducted by or on behalf of Triangle or either of its subsidiaries.

The Merger Agreement further provides that during the period from the date of the Merger Agreement through the completion of the Merger, except as otherwise expressly permitted or required by the Merger Agreement or the Financing Documents, without the prior written consent of Gilead, Triangle must not, and must not permit either of its subsidiaries to:

•: declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities;
•: sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security, (B) any option, call, warrant or right to acquire any capital stock or other security, or (C) any instrument convertible into or exchangeable for any capital stock or other security (except in certain limited circumstances);
•: except as may be required by applicable legal requirements, amend or waive any of its rights under, or alter the acceleration of vesting under, any provision of Triangle's Amended and Restated 1996 Stock Incentive Plan, the Triangle CEO Incentive Plan, or any provision of any agreement evidencing any outstanding option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related contract;
•: amend or terminate the Company Rights Agreement or amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction;
•: form any subsidiary or acquire any equity interest or other interest in any other entity;
•: make any capital expenditure (except that Triangle or its subsidiaries may make capital expenditures that, when added to all other capital expenditures made on behalf of Triangle or its subsidiaries between the date of the Merger Agreement and the completion of the Merger, do not exceed $2,200,000 in the aggregate);
•: except as otherwise expressly permitted by the Merger Agreement, enter into or become bound by, or permit any of the material assets owned or used by it to become bound by, any material contract, or amend or terminate, or waive or exercise any material right or remedy under, any material contract, in each case other than in the ordinary course of business consistent with past practices;

•: acquire, lease or license any right or other asset from any other person or sell or otherwise dispose of, or lease or license, any right or other asset to any other person (except in certain limited circumstances), or waive or relinquish any material right;
•: commence, sponsor, participate in or provide funding for any clinical trial except those trials being conducted as of the date of the Merger Agreement or for which Triangle has a written protocol proposal as of the date of the Merger Agreement (the "Permitted Trials");
•: place, cancel or modify any order for any Triangle Pharmaceutical Product (in bulk active pharmaceutical or finished product form) other than the placement of orders that are reasonably necessary for Triangle to comply with its obligations to use its commercially reasonable efforts to obtain and maintain on a commercially reasonable basis quantities of bulk Emtricitabine and finished Emtricitabine and related raw materials and components that Triangle reasonably expects to be required by it and its subsidiaries to make sales of Coviracil for one year and to maintain suitable quantities of Triangle Pharmaceutical Products to conduct the Permitted Trials;
•: enter into any contract covering multiple manufacturing "campaigns" or any contract with a term of more than 270 days, in each case for manufacture of any Triangle Pharmaceutical Product (in bulk active pharmaceutical or finished product form) or any raw material relating to such manufacture, that cannot be terminated (without penalty) within 60 days after delivery of a termination notice by Triangle;
•: other than in the ordinary course of business consistent with past practices, write off as uncollectible, or establish any extraordinary reserve with respect to, any receivable or other indebtedness;
•: make any pledge of any of its assets or permit any of its material assets to become subject to any encumbrances other than encumbrances for current taxes not yet due and payable and that do not (in any case or in the aggregate) materially detract from the value of the assets subject thereto or materially impair the operations of Triangle and its subsidiaries taken as a whole;
•: lend money to any person, or incur or guarantee any indebtedness (except that Triangle may make routine borrowings and advancement of expenses in the ordinary course of business and in accordance with past practices);
•: except as may be required by applicable legal requirements, adopt, establish, enter into or amend any employee benefit plan, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees (except in certain limited circumstances);
•: hire any employee or promote any employee (except in certain limited circumstances);
•: except as may be required by applicable legal requirements, change in any material respect any of its personnel policies or other business policies, or any of its methods of accounting or accounting practices in any material respect;
•: make any material tax election;
•: commence (except in certain limited circumstances) or settle any legal proceeding; or
•: agree, commit or offer to take any of the actions described above.

Non-Solicitation and Related Provisions

The Merger Agreement requires that Triangle immediately cease and cause to be terminated any existing discussions with any person that relate to any offer, proposal, inquiry or indication of interest (other than an offer, proposal, inquiry or indication of interest made or submitted by Gilead) contemplating a transaction or series of transactions involving any of the following:

•: any merger, consolidation, amalgamation, share exchange, business combination, recapitalization, tender offer, exchange offer or other similar transaction in which Triangle or its subsidiaries is a constituent corporation;
•: any merger, consolidation, amalgamation, share exchange, business combination, recapitalization, tender offer, exchange offer, transaction involving the issuance or acquisition of securities or other similar transaction in which a person or "group" (as defined in the Exchange Act and the rules thereunder) of persons directly or indirectly acquires beneficial or record ownership of securities representing more than 15% of the outstanding securities of any class of voting securities of Triangle or either of its subsidiaries;
•: the issuance by Triangle or its subsidiaries (in connection with a merger or otherwise) of securities representing more than 15% of the outstanding securities of any class of voting securities of Triangle or either of its subsidiaries;
•: any sale, lease, exchange, transfer, license, acquisition or disposition of any business or businesses or assets that constitute or account for 15% or more of the consolidated net revenues, net income or assets of Triangle and its subsidiaries;
•: any license, sublicense or assignment of, or any grant of any marketing, distribution, co-promotion or other right with respect to, any Triangle Pharmaceutical Product or any related intellectual property or intellectual property right material to any Triangle Pharmaceutical Product; or
•: any liquidation or dissolution of Triangle or either of its subsidiaries.

Each of the transactions referred to above is referred to as an "Acquisition Transaction," and any offer, proposal, inquiry or indication of interest (other than an offer, proposal, inquiry or indication of interest made or submitted by Gilead) contemplating any Acquisition Transaction, is referred to as an "Acquisition Proposal." The Merger Agreement further provides that Triangle must not directly or indirectly, and must not authorize or permit either of its subsidiaries or any of the officers, directors, employees, agents, attorneys, accountants, advisors or representatives (collectively "Representatives") of Triangle or either of its subsidiaries directly or indirectly to:

•: solicit, initiate, intentionally encourage, intentionally induce or intentionally facilitate the making, submission or announcement of any Acquisition Proposal (whether by amending, or granting any waiver under, the Company Rights Agreement or otherwise) or take any action that would reasonably be expected to lead to an Acquisition Proposal;
•: furnish any information regarding Triangle or its subsidiaries to any person in connection with or in response to an Acquisition Proposal or an inquiry or indication of interest that would reasonably be expected to lead to an Acquisition Proposal;
•: engage in discussions or negotiations with any person with respect to any Acquisition Proposal;
•: approve, endorse or recommend any Acquisition Proposal; or
•: enter into any letter of intent or similar document or any contract contemplating or otherwise relating to any Acquisition Transaction.

However, prior to the Acceptance Date, and subject to Triangle's right to terminate the Merger Agreement to accept a Superior Offer (as defined below), Triangle is not prohibited by the non-solicitation and related provisions described above from furnishing information regarding Triangle and its subsidiaries to, or entering into discussions or negotiations with, any person in response to a Superior Offer that is submitted to Triangle by such person (and not withdrawn) if (1) such Superior Offer has not resulted directly or indirectly from any breach of the provisions described above or from any action taken by Triangle or any of its Representatives with the intent of circumventing any of the provisions described above, (2) the board of directors of Triangle concludes in good faith, after having taken into account the advice of its outside legal counsel, that the failure to take such action would be inconsistent with the fiduciary obligations of Triangle's board of directors to Triangle's stockholders under applicable legal requirements, (3) at least one business day prior to furnishing any such information to, or entering into discussions or negotiations with, such person, Triangle gives Gilead written notice of the identity of such person and of Triangle's intention to furnish information to, or enter into discussions or negotiations with, such person, and Triangle receives from such person an executed confidentiality agreement containing provisions (including "standstill" provisions) no less favorable to Triangle than the provisions contained in the Confidentiality Agreement, dated November 1, 2002, between Gilead and Triangle (the "Confidentiality Agreement"), and (4) at least one business day prior to furnishing any such information to such person, Triangle furnishes such information to Gilead (to the extent such information has not been previously furnished by Triangle to Gilead). For purposes of the Merger Agreement, "Superior Offer" means an unsolicited, bona fide written offer made by a third party to acquire (or otherwise enter into a transaction which would result in such third party becoming the holder of) at least a majority of the outstanding shares of Triangle common stock on terms that the board of directors of Triangle determines, in its good faith judgment (after taking into account the price and consideration offered and the likelihood that the proposed acquisition will ultimately be completed and after taking into account the advice of Banc of America Securities LLC or another independent financial advisor of nationally recognized reputation) to be more favorable to Triangle's stockholders than the terms of the Offer and the Merger. However, any such offer will be deemed not to be a "Superior Offer" if any financing required to complete the transaction contemplated by such offer is not committed and is not reasonably capable of being obtained by such third party. The Merger Agreement provides that any breach by any Representative of Triangle or either of its subsidiaries of, or action taken by any Representative of Triangle or either of its subsidiaries with the intent of circumventing, any of the non-solicitation and related provisions described above will be deemed to be a breach of those provisions of the Merger Agreement, whether or not such Representative is purporting to act on behalf of Triangle or either of its subsidiaries.

The Merger Agreement provides that, notwithstanding the non-solicitation and related provisions described above, after March 1, 2003, Triangle may enter into confidential discussions regarding (but may not enter into any contract regarding) a Contract Sales Arrangement (as defined below) with a Contract Sales Organization (as defined below) if (i) such Contract Sales Organization has executed and delivered to Triangle a confidentiality agreement containing provisions (including "standstill" provisions) no less favorable to Triangle than the terms of the Confidentiality Agreement, (ii) at least five business days prior to initiating such discussions, Triangle has given Gilead written notice of the identity of such Contract Sales Organization and of Triangle's intention to enter into such discussions, (iii) Triangle periodically provides Gilead with term sheets and draft contracts to keep Gilead reasonably informed of the status of such discussions, and (iv) Triangle otherwise keeps Gilead reasonably informed with respect to the status of such discussions. For purposes of the preceding sentence: (1) "Contract Sales Organization" means an entity commonly and primarily known as a "contract sales organization" that is engaged primarily in the business of promoting products for third parties and is not, and is not a direct or indirect affiliate of, an entity commonly

and primarily known as a "pharmaceutical", "biopharmaceutical" or "biotechnology" company; and (2) "Contract Sales Arrangement" means an arrangement (that is terminable by Triangle within three years without payment or penalty) between Triangle and a Contract Sales Organization under which such Contract Sales Organization (A) would promote (and would only be granted such rights as are necessary to promote) a Triangle Pharmaceutical Product for a fee (which may be fixed or based upon a percentage of revenues or otherwise) but (B) would not be granted any research, development, manufacturing, sublicensing or other rights with respect to such Triangle Pharmaceutical Product or with respect to any intellectual property underlying or related to such Triangle Pharmaceutical Product except as necessary for the purpose of clause "(A)".

The Merger Agreement also requires that Triangle promptly (and in no event later than 24 hours) after receipt of any Acquisition Proposal, any inquiry or indication of interest that would reasonably be expected lead to an Acquisition Proposal or any request for nonpublic information relating thereto, advise Gilead orally and in writing of such Acquisition Proposal, inquiry, indication of interest or request (including the identity of the person making or submitting such Acquisition Proposal, inquiry, indication of interest or request, and the material terms thereof) that is made or submitted by any person prior to the Acceptance Date. Triangle must keep Gilead reasonably informed with respect to the status of any such Acquisition Proposal, inquiry, indication of interest or request and any modification or proposed modification thereto.

Triangle Stockholders' Meeting

As promptly as practicable following the Acceptance Date (and following the expiration of any subsequent offering period), if the adoption of the Merger Agreement by Triangle's stockholders is required by law in order to complete the Merger, Triangle, acting through the Post-Acceptance Board, must take all action necessary under all applicable legal requirements to call, give notice of and hold a meeting of the holders of Triangle common stock to vote on the adoption of the Merger Agreement.

Under the Merger Agreement, Gilead has agreed to cause all shares of Triangle common stock owned by Gilead or any subsidiary of Gilead to be voted in favor of the adoption of the Merger Agreement and completion of the Merger at the Triangle stockholder meeting. However, if the Purchaser owns, by virtue of the Offer or otherwise, at least 90% of the outstanding shares of Triangle common stock, then the parties are required under the Merger Agreement to take all necessary and appropriate action to cause the Merger to become effective as soon as practicable without a stockholders' meeting in accordance with Section 253 of the DGCL.

Recommendation of Triangle's Board of Directors

Triangle's board of directors has unanimously recommended that the stockholders of Triangle accept the Offer, tender their shares of Triangle common stock pursuant to the Offer and (if required by applicable law) adopt the Merger Agreement (the "Triangle Board Recommendation"). The Merger Agreement provides that, except as provided below, neither Triangle's board of directors nor any committee thereof may withdraw the Triangle Board Recommendation or modify the Triangle Board Recommendation in a manner adverse to Gilead or the Purchaser, and no resolution by the board of directors of Triangle or any committee thereof to withdraw or modify the Triangle Board Recommendation in a manner adverse to Gilead or the Purchaser may be adopted.

Notwithstanding the foregoing, at any time prior to the Acceptance Date, the Triangle Board Recommendation may be withdrawn or modified in a manner adverse to Gilead and the Purchaser if: (i) an unsolicited, bona fide written offer by a third party unaffiliated with Triangle to acquire or otherwise enter into a transaction which would result in such third party becoming the holder of at least a majority of the outstanding shares of Triangle common stock is made to Triangle and is not

withdrawn; (ii) Triangle provides Gilead with at least two business days' prior notice of any meeting of Triangle's board of directors or any committee thereof at which such board of directors or such committee will determine whether such offer is a Superior Offer; (iii) Triangle's board of directors determines in good faith (after taking into account the advice of Banc of America Securities LLC or another independent financial advisor of nationally recognized reputation) that such offer constitutes a Superior Offer; (iv) Triangle's board of directors determines in good faith, after having taken into account the advice of Triangle's outside legal counsel, that, in light of such Superior Offer, the failure to withdraw the Triangle Board Recommendation or modify the Triangle Board Recommendation in a manner adverse to Gilead or the Purchaser would be inconsistent with the fiduciary obligations of Triangle's board of directors to Triangle's stockholders under applicable legal requirements; and (v) such Superior Offer shall not have resulted directly or indirectly from any breach of the non-solicitation or related provisions of the Merger Agreement or from any action taken by Triangle or any of its Representatives with the intent of circumventing any of the provisions set forth in the non-solicitation or related provisions of the Merger Agreement.

Reasonable Efforts to Complete Transactions

The Merger Agreement provides that, subject to the terms and conditions thereof, Gilead and Triangle must use reasonable efforts to take, or cause to be taken, all actions necessary to complete the transactions contemplated by the Merger Agreement, including (i) making all filings (if any) and giving all notices (if any) required to be made and given in connection with the Offer and the Merger and the other transactions contemplated by the Merger Agreement, (ii) using reasonable efforts to obtain each consent (if any) required to be obtained in connection with the Offer and the Merger and the other transactions contemplated by the Merger Agreement, and (iii) using reasonable efforts to lift any restraint, injunction or other legal bar to the Offer, the Merger or any of the other transactions contemplated by the Merger Agreement. However, Gilead does not have any obligation: (i) to dispose of or transfer or cause any of its subsidiaries to dispose of or transfer any assets, or to commit to cause Triangle or either of its subsidiaries to dispose of any assets; (ii) to discontinue or cause any of its subsidiaries to discontinue developing or offering any product; (iii) to license or otherwise make available, or cause any of its subsidiaries to license or otherwise make available, to any person, any right with respect to any of its products for any indication, or any other intellectual property or intellectual property right, or to commit to cause Triangle or either of its subsidiaries to license or otherwise make available to any person any right with respect to Emtricitabine or any other material Triangle Pharmaceutical Product for any indication, or any related intellectual property or intellectual property right; (iv) to hold separate or cause any of its subsidiaries to hold separate any assets or operations, or to commit to cause Triangle or either of its subsidiaries to hold separate any assets or operations; or (v) to make or cause any of its subsidiaries to make any commitment (to any governmental body or otherwise) regarding its future operations or the future operations of Triangle or either of its subsidiaries.

Employee Benefits Matters

Pursuant to the Merger Agreement, Gilead is to make available, or cause Triangle to make available, upon the completion of the Merger, (i) to each employee of Triangle who holds a position of Executive Vice President or higher as of the date of the Merger Agreement and who remains employed by Triangle immediately prior to the completion of the Merger, continued "at-will" employment for a minimum period of 180 days from the completion of the Merger, and (ii) to each employee of Triangle who holds a position at a level below Executive Vice President as of the date of the Merger Agreement and who remains employed by Triangle immediately prior to the completion of the Merger, continued "at-will" employment for a minimum period of 120 days from the completion of the Merger. The terms and conditions of employment for each employee of Triangle who, following the completion of the Merger, either continues his or her employment with

Triangle, or becomes an employee of Gilead (in either case, a "Continuing Employee"), will include (x) the right to receive, during the applicable minimum period specified above, a salary and benefits under health and welfare plans that are comparable to the salary and the benefits under health and welfare plans to which such Continuing Employee is entitled as of the date of the Merger Agreement, and (y) the right to continue receiving the salary and benefits described in clause "(x)" for the remainder of the applicable minimum period if the employment of such Continuing Employee were terminated by Triangle or Gilead during such minimum period. However, nothing in the Merger Agreement is to be construed to (i) limit the right of Gilead or Triangle to amend or terminate any benefit plan at any time following the completion of the Merger or (ii) affect the "at-will" status of any Continuing Employee. Following the expiration of the applicable minimum period specified above with respect to a Continuing Employee, such Continuing Employee (if he or she continues to be employed by Triangle or Gilead) will have the right to receive benefits under Gilead's health and welfare benefit plans that are comparable to the benefits under such plans to which similarly situated employees of Gilead are then entitled. The Merger Agreement provides that, to the extent permitted by applicable legal requirements and the terms of such plans, for purposes of participation, vesting and differential benefits based on length of service in any such plan, all service by a Continuing Employee with Triangle is to be credited toward service with Gilead. In addition, the Merger Agreement provides that Gilead will, at or after the completion of the Merger, grant to Continuing Employees options to purchase common stock of Gilead under Gilead's stock option plans. Gilead will determine the levels of such stock option grants on an employee-by-employee basis, in a manner determined by Gilead to be adequate to maintain continuing incentives for Continuing Employees after the completion of the Merger.

The Merger Agreement further requires that, unless otherwise directed in writing by Gilead, Triangle take (or cause to be taken) all actions necessary or appropriate to terminate, any plan, program, policy, contract or other arrangement (with certain exceptions) providing for compensation, severance, performance awards, stock or stock-related awards, fringe benefits or other employee benefits or remuneration of any kind that is or has been maintained, contributed to or required to be contributed to by Triangle, its subsidiaries or any of its affiliates for the benefit of any current or former employee or director of Triangle, its subsidiaries or any of its affiliates, or with respect to which Triangle or its subsidiaries or any of its affiliates has or may in the future have any liability or obligation and that contains a cash or deferred arrangement intended to qualify under Section 401(k) of the IRC.

Directors' and Officers' Indemnification and Insurance

The Merger Agreement provides that all rights to indemnification by Triangle existing in favor of those persons who are directors and officers of Triangle as of the date of the Merger Agreement (the "Indemnified Persons") for their acts and omissions occurring prior to the completion of the Merger, as provided in Triangle's bylaws (as in effect as of the date of the Merger Agreement) and as provided in the indemnification agreements between Triangle and said Indemnified Persons (as in effect as of the date of the Merger Agreement) in the forms disclosed by Triangle to Gilead prior to the date of the Merger Agreement, will survive the Merger and must be observed by Triangle to the fullest extent available under Delaware law.

In addition, the Merger Agreement provides that from the time of the completion of the Merger until the sixth anniversary of the completion of the Merger, Gilead must cause Triangle to, and Triangle must maintain in effect, for the benefit of the Indemnified Persons with respect to their acts and omissions occurring prior to the completion of the Merger, the existing policy of directors' and officers' liability insurance maintained by Triangle as of the date of the Merger Agreement in the form disclosed by Triangle to Gilead prior to the date of the Merger Agreement (the "Existing Policy"). However, (i) Triangle may substitute for the Existing Policy a policy or policies of

comparable coverage; and (ii) Triangle will not be required to pay annual premiums for the Existing Policy (or for any substitute policies) in excess of $1,250,000 in the aggregate. In the event any future annual premiums for the Existing Policy (or any substitute policies) exceed $1,250,000 in the aggregate, Triangle will be entitled to reduce the amount of coverage of the Existing Policy (or any substitute policies) to the amount of coverage that can be obtained for a premium equal to $1,250,000.

Conditions to the Merger

The Merger Agreement provides that the respective obligations of the parties to complete the Merger are subject to the satisfaction or waiver of the following conditions:

•: if required by applicable law, the Merger Agreement must be adopted by the affirmative vote of the holders of greater than 50% of the shares of Triangle common stock outstanding on the record date for the meeting of the holders of Triangle common stock to vote on the adoption of the Merger Agreement;
•: no temporary restraining order, preliminary or permanent injunction or other order preventing the completion of the Merger shall have been issued by any court of competent jurisdiction and remain in effect, and there shall not be any legal requirement enacted or deemed applicable to the Merger that makes completion of the Merger illegal; and
•: the Purchaser shall have accepted for payment and paid for shares of Triangle common stock pursuant to the Offer.

Termination of the Merger Agreement

The Merger Agreement provides that it may be terminated:

•: by mutual written consent of Gilead and Triangle at any time prior to the completion of the Merger;
•: by either Gilead or Triangle at any time prior to the completion of the Merger if a court of competent jurisdiction or other governmental body shall have issued a final and nonappealable order, decree or ruling, or shall have taken any other action, having the effect of permanently restraining, enjoining or otherwise prohibiting the acquisition or acceptance for payment of, or payment for, shares of Triangle common stock in the Offer or the Merger or making the purchase by the Purchaser of shares of Triangle common stock in the Offer or completion of the Merger illegal, except that a party will not be permitted to terminate the Merger Agreement on the foregoing basis if the imposition of such order, decree or ruling or the taking of such action is attributable to the failure of such party to perform any covenant in the Merger Agreement required to be performed by such party on or prior to the Acceptance Date;
•: by either Gilead or Triangle prior to the Acceptance Date if the Offer shall have expired without the acceptance for payment of shares of Triangle common stock (the "Expiration Termination Right"), except that a party shall not be permitted to terminate the Merger Agreement on the foregoing basis if the failure to accept shares of Triangle common stock for payment in the Offer is attributable to a failure on the part of such party to perform any covenant in the Merger Agreement required to be performed by such party on or prior to the Acceptance Date;
•: by either Gilead or Triangle at any time prior to the Acceptance Date if the acceptance for payment of shares of Triangle common stock pursuant to the Offer has not occurred on or prior to the close of business on June 1, 2003 (the "End Date Termination Right"), except

that a party may not terminate the Merger Agreement on the foregoing basis if the failure to accept shares of Triangle common stock for payment pursuant to the Offer by the close of business on June 1, 2003 is attributable to a failure on the part of such party to perform any covenant in the Merger Agreement required to be performed by such party on or prior to the Acceptance Date;

•: by Gilead or Triangle on April 21, 2003, if (i) the HSR Condition, the Legality Condition or the Legal Proceeding Condition (each as defined in Section 13 (Certain Conditions to the Offer) of this Offer to Purchase) shall not have been satisfied prior to the termination of the Merger Agreement, and (ii) Triangle has delivered to Gilead, on April 15, 2003, an irrevocable notice of intended termination of the Merger Agreement; except that Triangle may not terminate the Merger Agreement on the foregoing basis if (A) the failure to satisfy such condition is attributable to a failure on the part of Triangle to perform any covenant in the Merger Agreement required to be performed by Triangle on or prior to the Acceptance Date or (B) Gilead has delivered to Triangle on or prior to April 21, 2003 a document confirming that Gilead is forgiving $20,000,000 of the principal balance of the Convertible Loan (as defined below);
•: by Gilead or Triangle on May 21, 2003, if (i) the HSR Condition, the Legality Condition or the Legal Proceeding Condition shall not have been satisfied prior to the termination of the Merger Agreement, and (ii) Triangle shall have delivered to Gilead, on May 15, 2003, an irrevocable notice of intended termination of the Merger Agreement; except that Triangle may not terminate the Merger Agreement on the foregoing basis if (A) the failure to satisfy such condition is attributable to a failure on the part of Triangle to perform any covenant in the Merger Agreement required to be performed by Triangle on or prior to the Acceptance Date or (B) Gilead has delivered to Triangle on or prior to May 21, 2003 a document confirming that Gilead is forgiving $10,000,000 of the principal balance of the Convertible Loan;
•: by Gilead at any time prior to the Acceptance Date (i) if a Triggering Event (as defined below) has occurred (the "Triggering Event Termination Right") or (ii) if (A) the board of directors of Triangle shall have taken any action demonstrating that the board of directors of Triangle does not support the Offer or the Merger or does not believe that the Offer or the Merger is in the best interests of Triangle's stockholders or (B) a tender or exchange offer relating to securities of Triangle has been commenced by any person (other than Gilead and the Purchaser) and Triangle has not sent to its securityholders, within ten business days after the commencement of such tender or exchange offer, a statement disclosing that Triangle recommends rejection of such tender or exchange offer (the "Support Termination Right");
•: by Triangle at any time prior to the Acceptance Date, in order to accept a Superior Offer and enter into the Specified Agreement (as defined below) relating to such Superior Offer, if (i) such Superior Offer has not resulted directly or indirectly from any breach of the non-solicitation or related provisions of the Merger Agreement or from any action taken by Triangle or any of its Representatives with the intent of circumventing any of those provisions, (ii) the board of directors of Triangle, after satisfying all of the requirements for withdrawing or modifying its recommendation of the Offer and otherwise causing Triangle to comply in all material respects with the provisions of the Merger Agreement, has authorized Triangle to enter into a binding written definitive acquisition agreement providing for the completion of a transaction constituting a Superior Offer (the "Specified Agreement"), (iii) Triangle has delivered to Gilead a written notice (that includes a copy of the Specified Agreement as an attachment) containing Triangle's representation that the Specified Agreement has been duly executed and delivered to Triangle by the other party thereto, that the board of directors of Triangle has authorized the execution and delivery of the Specified Agreement on behalf of Triangle and that Triangle will enter into the Specified Agreement immediately upon

termination of the Merger Agreement, (iv) a period of at least three business days has elapsed since the receipt by Gilead of such notice, and Triangle has made its Representatives reasonably available during such period for the purpose of engaging in negotiations with Gilead regarding a possible amendment of the Offer or a possible alternative transaction, (v) any proposal by Gilead to amend the Offer or enter into an alternative transaction has been considered by the board of directors of Triangle in good faith, and Triangle's board of directors has determined in good faith (after having taken into account the advice of Triangle's outside legal counsel and the advice of Banc of America Securities LLC or another independent financial advisor of nationally recognized reputation) that the terms of the proposed amended Offer (or other alternative transaction) are not as favorable to Triangle's stockholders, from a financial point of view, as the transaction contemplated by the Specified Agreement, (vi) Triangle has paid the entire outstanding principal balance of, all accrued and unpaid interest on and any other amounts owing under the Convertible Loan, and (vii) Triangle has paid to Gilead the fee required to be made to Gilead pursuant to the Merger Agreement in connection with such termination (the "Superior Offer Termination Right");

•: by Gilead at any time prior to the Acceptance Date if (i) any of Triangle's representations and warranties contained in the Merger Agreement are inaccurate as of the date of the Merger Agreement such that the Accuracy Condition (as defined in Section 13 (Certain Conditions to the Offer) of this Offer to Purchase) would not be satisfied (except that, for purposes of determining the accuracy of such representations and warranties as of the date of the Merger Agreement, (A) all materiality qualifications contained in such representations and warranties will be disregarded and (B) any update of or modification to the disclosure schedule provided by Triangle to Gilead and the Purchaser in connection with the Merger Agreement made or purported to have been made after the date of the Merger Agreement will be disregarded), or (ii) any of Triangle's covenants contained in the Merger Agreement have been breached such that the Covenant Condition (as defined in Section 13 (Certain Conditions to the Offer) of this Offer to Purchase) would not be satisfied except that if an inaccuracy in any of Triangle's representations and warranties or a breach of a covenant by Triangle is curable by Triangle within 30 days after the date of the occurrence of such inaccuracy or breach and Triangle is continuing to exercise reasonable efforts to cure such inaccuracy or breach, then Gilead may not terminate the Merger Agreement on account of such inaccuracy or breach (1) during the 30-day period commencing on the date on which Triangle receives notice of such inaccuracy or breach or (2) after such 30-day period if such inaccuracy or breach has been cured in a manner that does not result in a breach of any covenant of Triangle; or
•: by Triangle at any time prior to the Acceptance Date if (i) any of Gilead's representations and warranties contained in the Merger Agreement are materially inaccurate as of the date of the Merger Agreement, such that the inaccuracy in Gilead's representations and warranties has a material adverse effect on Gilead's ability to satisfy its obligations under the Merger Agreement (except that, for purposes of determining the accuracy of such representations and warranties as of the date of the Merger Agreement, all materiality qualifications contained in such representations and warranties will be disregarded), or (ii) any of Gilead's covenants contained in the Merger Agreement have been materially breached; except that if an inaccuracy in any of Gilead's representations and warranties or a breach of a covenant by Gilead is curable by Gilead within 30 days after the date of the occurrence of such inaccuracy or breach and Gilead is continuing to exercise reasonable efforts to cure such inaccuracy or breach, then Triangle may not terminate the Merger Agreement on the foregoing basis on account of such inaccuracy or breach (1) during the 30-day period commencing on the date on which Gilead receives notice of such inaccuracy or breach or

(2) after such 30-day period if such inaccuracy or breach has been cured in a manner that does not result in a breach of any covenant of Gilead.

A "Triggering Event" will be deemed to have occurred if: (i) the board of directors of Triangle has failed to recommend that Triangle's stockholders accept the Offer, tender their shares of Triangle common stock pursuant to the Offer or (if required by applicable law) vote to adopt the Merger Agreement, or has withdrawn or modified in a manner adverse to Gilead the Triangle Board Recommendation; (ii) Triangle has failed to include the Triangle Board Recommendation in the Schedule 14D-9; (iii) the board of directors of Triangle has approved, endorsed or recommended any Acquisition Proposal; (iv) Triangle has entered into any letter of intent or similar document or any contract contemplating any Acquisition Transaction; or (v) any Acquisition Proposal has resulted directly or indirectly from Triangle or either of its subsidiaries or any Representative of Triangle or either of its subsidiaries having breached, or having taken any action with the intent of circumventing, any of the non-solicitation or related provisions of the Merger Agreement.

Fees and Expenses; Termination Fee

The Merger Agreement provides that all fees and expenses incurred in connection with the Merger Agreement and the Offer, the Merger and the other transactions contemplated by the Merger Agreement are to be paid by the party incurring such expenses, whether or not any shares of Triangle common stock are purchased pursuant to the Offer and whether or not the Merger is completed, except that Gilead and Triangle will share equally all fees and expenses, other than attorneys' fees, incurred in connection with the filing, printing and mailing of this Offer to Purchase and all related documents and the proxy statement relating to the Merger, if required, and any amendments or supplements thereto.

The Merger Agreement further provides that if (i) the Merger Agreement is terminated by Gilead or Triangle pursuant to the Expiration Termination Right or the End Date Termination Right, (ii) at or prior to the time of the termination of the Merger Agreement an Acquisition Proposal has been disclosed, announced, commenced, submitted or made and (iii) within 360 days after the date of termination of the Merger Agreement, an Acquisition Transaction is completed or Triangle enters into a definitive agreement contemplating an Acquisition Transaction, then Triangle must pay to Gilead, in cash, a nonrefundable fee in an amount equal to $18,000,000 at or prior to the completion of such Acquisition Transaction. Solely for purposes of clause "(iii)" of the preceding sentence, (1) the term "Acquisition Transaction" is not deemed to include a pure equity financing transaction that is not related to a merger, consolidation, amalgamation, share exchange, business combination, tender offer or exchange offer if, following such pure equity financing transaction, no person or "group" (as defined in the Exchange Act or the rules thereunder) of persons has beneficial or record ownership of securities representing more than 35% of the outstanding securities of any class of voting securities of Triangle or either of its subsidiaries, (2) the definition of Acquisition Transaction is not deemed to include any license, sublicense or assignment of, or any grant of any marketing, distribution, co-promotion or other right with respect to, any Triangle Pharmaceutical Product or any related intellectual property or intellectual property right material to any Triangle Pharmaceutical Product, and (3) each reference in the definition of Acquisition Transaction to "15%" is deemed to refer instead to "35%."

The Merger Agreement provides that if the Merger Agreement is terminated by Gilead pursuant to the Triggering Event Termination Right or by Triangle pursuant to the Superior Offer Termination Right, then Triangle must pay to Gilead, in cash at the time specified in the next sentence, a nonrefundable fee in an amount equal to $18,000,000. In the case of termination of the Merger Agreement by Gilead pursuant to the Triggering Event Termination Right, the fee referred to in the preceding sentence must be paid by Triangle within two business days after such termination; and in the case of termination of the Merger Agreement by Triangle pursuant to the Superior Offer

Termination Right, the fee referred to in the preceding sentence must be paid by Triangle at or prior to the time of such termination.

The Merger Agreement provides that if the Merger Agreement is terminated by Gilead pursuant to the Support Termination Right, then Triangle must make a nonrefundable cash payment to Gilead, within two business days after such termination, in an amount equal to the lesser of $1,500,000 or the aggregate amount of all fees and expenses (including all attorneys' fees, accountants' fees and filing fees) that have been paid or that may become payable by or on behalf of Gilead in connection with the preparation and negotiation of the Merger Agreement and otherwise in connection with the Offer, the Merger or any of the other transactions contemplated by the Merger Agreement.

If Triangle fails to pay when due any amount described above, then (i) Triangle must reimburse Gilead for all costs and expenses (including reasonable fees and reasonable disbursements of counsel) incurred in connection with the collection of such overdue amount and the enforcement by Gilead of its rights, and (ii) Triangle must pay to Gilead interest on such overdue amount (for the period commencing as of the date such overdue amount was originally required to be paid and ending on the date such overdue amount is actually paid to Gilead in full) at a rate per annum three percentage points above the "prime rate" (as announced by Bank of America, N.A. or any successor thereto) in effect on the date such overdue amount was originally required to be paid.

The Stockholder Agreements

The following is a summary of the Stockholder Agreements entered into by Gilead and the Purchaser with certain of Triangle's directors and certain additional stockholders of Triangle. The following summary does not purport to be a complete description of the terms of these Stockholder Agreements and is qualified in its entirety by reference to the forms of the Stockholder Agreements, copies of which are filed as Exhibit (d)(2) and Exhibit (d)(3) to the Tender Offer Statement on Schedule TO that has been filed with the Securities and Exchange Commission by the Purchaser and Gilead in connection with the Offer, and are incorporated in this Offer to Purchase by reference. The forms of Stockholder Agreements may be examined, and copies obtained, by following the procedures described in Section 8 (Certain Information Concerning Triangle) of this Offer to Purchase.

In order to induce Gilead and the Purchaser to enter into the Merger Agreement, each of: Bijou Trust U/A 3/11/86 c.o. McFadden Trustee f/b/o Piers Moreton Trust; Anthony B. Evnin; Standish M. Fleming; Fleming Family Trust; Fleming Family Children's Trust; Forward II Associates, L.P.; Forward Ventures IV B, L.P.; GEM Trust U/A/ 3/4/83 c.o. McFadden Trustees f/b/o/ Georgiana Moreton Trust; George & Leslie Taylor McFadden Trustees, U/A dated 9/22/71 f/b/o Elizabeth Cutting McFadden Trust; Dennis Gillings, Ph.D.; Grabowski Associates Pension Plan; Henry G. Grabowski, Ph.D.; Stewart J. Hen; Jonathan S. Leff; Carol McFadden; Wilhemina Josephine McFadden 1995 Trust dated Nov. 6, 1995 between George McFadden, as donor, and David R. Hamilton, as Trustee; and Daniel G. Welch has entered into a Stockholder Agreement with Gilead and the Purchaser. Pursuant to the Stockholder Agreements, each of the stockholders has agreed, in their respective capacities as stockholders of Triangle, to tender all of their shares of Triangle common stock, as well as any additional shares of Triangle common stock which they may acquire (pursuant to Triangle stock options or otherwise), to the Purchaser in the Offer. In addition, each of: Forward Ventures II, L.P.; Forward Ventures III, L.P.; Forward Ventures IV, L.P.; George McFadden; the Alexander B. McFadden Trust; Warburg Pincus Private Equity VIII, L.P.; Venrock Associates; Venrock Associates II, L.P.; and QFinance, Inc. has entered into a Stockholder Agreement with Gilead and the Purchaser in which they agreed to tender their shares to the Purchaser in the offer and also, at any meeting of, or written action by, the stockholders of Triangle, to vote all of their shares of Triangle common stock

in favor of the Merger, the execution and delivery of the Merger Agreement by Triangle and the adoption and approval of the Merger Agreement and the transactions contemplated thereby.

Each of the stockholders that has entered into a Stockholder Agreement has agreed, in such person's capacity as a stockholder of Triangle, to promptly (and, in any event, not later than five business days after commencement of the Offer) validly tender or cause to be tendered into the Offer, pursuant to and in accordance with the terms of the Offer, and to not withdraw or permit the withdrawal of (unless and until the Offer expires without the Purchaser having accepted for payment any shares of Triangle common stock tendered in the Offer), all of such stockholder's shares of Triangle common stock, including any additional shares of Triangle common stock which such stockholder may acquire.

Each such stockholder has also agreed that, with certain limited exceptions, such stockholder will not (except as contemplated by the Stockholder Agreement) sell, pledge, encumber, grant an option with respect to, transfer or otherwise dispose of any of such stockholder's shares of Triangle common stock, or enter into an agreement or commitment contemplating any of the foregoing. In addition, each such stockholder has also agreed, in such person's capacity as a stockholder of Triangle, not to take, directly or indirectly any action that Triangle or any of its representatives would be prohibited from taking, directly or indirectly, pursuant to the nonsolicitation or related provisions of the Merger Agreement. However, the foregoing provisions do not preclude those stockholders who are also members of the Triangle board of directors (or their representatives) from taking certain actions (acting as a member of the board of directors of Triangle) that they are permitted to take under the Merger Agreement. In addition, nothing in the respective Stockholder Agreements is to be construed to limit or affect any action or inaction by any stockholder, or any director, officer, partner, member or employee, as applicable, of such stockholder, in either case serving on Triangle's board of directors acting in such person's capacity as a director or fiduciary of Triangle, and no such stockholder will have any liability to Gilead or Purchaser or any of their affiliates under the Stockholder Agreement for any action or inaction taken by such stockholder, or any director, officer, partner, member or employee, as applicable, of such stockholder, serving on Triangle's board of directors acting in such person's capacity as a director or a fiduciary of Triangle.

Each of the stockholders whose Stockholder Agreement contains voting provisions has agreed, pursuant to the terms of such stockholder's respective Stockholder Agreement and in such person's capacity as a stockholder of Triangle, as follows:

•: that until the earlier of the completion of the Merger or the termination of the Merger Agreement, at any meeting of Triangle's stockholders, and in any action by consent of Triangle's stockholders, such stockholder will vote (or cause to be voted) all of such stockholder's shares of Triangle common stock: (i) in favor of the Merger, the execution and delivery of the Merger Agreement by Triangle, and the adoption and approval of the Merger Agreement and in favor of the other actions contemplated thereby; and (ii) against certain matters and actions specified in the Stockholder Agreement; and
•: to appoint Gilead and certain representatives of Gilead as such stockholder's attorneys and proxies, with full power of substitution and resubstitution, to vote and otherwise act with respect to all such stockholder's shares of Triangle common stock at any meeting of Triangle's stockholders, and in any action by written consent of Triangle's stockholders, on the matters and in the manner specified in the Stockholder Agreement.

In addition, pursuant to the Stockholder Agreement entered into by Warburg Pincus Private Equity VIII, L. P. ("Warburg"), Warburg agreed that after the completion of the Merger, neither Warburg nor any affiliate of Warburg will have any rights or claims against Triangle, Gilead or any other person under the Purchase Agreement, dated as of August 24, 2001, between Warburg and Triangle.

Shares Subject to the Stockholder Agreements

As of December 3, 2002, the stockholders who executed Stockholder Agreements held in the aggregate 31,574,469 shares of Triangle common stock, which represented approximately 41% of the outstanding shares of Triangle common stock as of that date. Of such shares of Triangle common stock, 30,906,949 shares, which represented approximately 40% of the outstanding shares of Triangle common stock as of that date, were held by stockholders whose Stockholder Agreements also contained the voting provisions described above. The Stockholder Agreements provide that they terminate upon any termination of the Merger Agreement.

The Convertible Loan

The following is a summary of the $50,000,000 convertible loan (the "Convertible Loan") that was made by Gilead to Triangle on December 9, 2002, to help fund Triangle's working capital needs and for other corporate purposes pending the successful completion of the Offer, pursuant to an obligation to provide such funds that was set forth in the Merger Agreement. The following summary does not purport to be a complete description of the terms and conditions of the Convertible Loan, the 7.50% Convertible Note (the "Convertible Note") evidencing the Convertible Loan executed by Triangle in favor of Gilead, or the Investor Rights Agreement between Triangle and Gilead providing Gilead with certain rights associated with its possible acquisition and ownership of the Triangle common stock into which the Convertible Loan is convertible. This summary is qualified in its entirety by reference to the Convertible Note and the Investor Rights Agreement (as defined below), copies of which are filed as exhibits to the Tender Offer Statement on Schedule TO that has been filed with the Securities and Exchange Commission by the Purchaser and Gilead in connection with the Offer, and which are incorporated in this Offer to Purchase by reference.

Under the terms of the Merger Agreement, Gilead agreed, at or before the close of business on December 10, 2002, to lend Triangle the sum of $50,000,000. Gilead provided such funds to Triangle on December 9, 2002. Contemporaneously with the provision of such funds to Triangle, Triangle and Gilead executed the Convertible Note, and Triangle and Gilead entered into the Investor Rights Agreement.

Convertible Note

Pursuant to the terms of the Convertible Note, the Convertible Loan will bear interest on the outstanding daily balance thereof from the date of disbursement until satisfaction in full at 7.50% per annum, with a default rate of interest equal to the lesser of 17.0% per annum or the maximum rate permissible by law. Commencing with a payment on December 31, 2002, Triangle is required to pay interest on the Convertible Loan in cash quarterly in arrears on March 31, June 30, September 30 and December 31 of each year and on the maturity date. The Convertible Loan is unsecured.

The outstanding principal amount of the Convertible Loan (and any interest accrued thereon) is immediately due and payable upon the earliest of the following dates:

•: the date of termination of the Merger Agreement pursuant to the Superior Offer Termination Right;
•: December 9, 2007; or
•: the date on which any event of default occurs under the Convertible Note.

The events of default under the Convertible Note include the following:

•: if Triangle fails to pay when due the principal of or premium, if any, or interest on the Convertible Note when due at its stated maturity, upon required repurchase, upon declaration or acceleration or otherwise;
•: if (A) Triangle or either of its subsidiaries makes an assignment for the benefit of creditors, (B) an order, judgment or decree is entered adjudicating Triangle or either of its subsidiaries bankrupt or insolvent, (C) any order for relief with respect to Triangle or either of its subsidiaries is entered under the Bankruptcy Reform Act, Title 11 of the United States Code, (D) Triangle or either of its subsidiaries petitions or applies to any tribunal for the appointment of a custodian, trustee, receiver or liquidator of Triangle or either of its subsidiaries or of any substantial part of the assets of Triangle or either of its subsidiaries, or commences any proceeding relating to Triangle or either of its subsidiaries under any bankruptcy reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, or (E) any such petition or application is filed, or any such proceeding is commenced, against Triangle or either of its subsidiaries and either (1) Triangle or either of its subsidiaries by any act indicates its approval thereof, consent thereto or acquiescence therein or (2) such petition, application or proceeding is not dismissed within 45 days;
•: if Triangle or either of its subsidiaries defaults under any indebtedness for money borrowed by Triangle or either of its subsidiaries (or the payment of which is guaranteed by Triangle or either of its subsidiaries), beyond the period of grace, if any, provided in the instrument or agreement under which such indebtedness was created, the aggregate outstanding principal amount of which exceeds $1,000,000, other than indebtedness owed to Triangle or any of its Subsidiaries, whether such indebtedness or guarantee existed as of December 9, 2002 or is created thereafter;
•: if Triangle fails to comply with its obligations under the provisions of the Convertible Note relating to Gilead's right to convert the Convertible Loan into shares of Triangle common stock or to have the Convertible Loan repurchased upon any change of control of Triangle; and
•: if Triangle fails to comply with any of several covenants specified in the Convertible Note.

The principal amount of the Convertible Loan may be reduced under the following circumstances:

•: if (i) Triangle delivers to Gilead, on April 15, 2003, an irrevocable notice of intended termination of the Merger Agreement, (ii) the HSR Condition, the Legality Condition or the Legal Proceeding Condition (each as defined in Section 13 (Certain Conditions to the Offer) of this Offer to Purchase) shall not have been satisfied, (iii) the failure to satisfy any such condition is not attributable to a failure on the part of Triangle to perform any covenant in the Merger Agreement required to be performed by Triangle on or prior to the Acceptance Date, and (iv) Gilead delivers to Triangle on or prior to April 21, 2003 a document confirming that Gilead is forgiving $20,000,000 of the principal balance of the Convertible Loan (which has the effect under the Merger Agreement of preventing the termination of the Merger Agreement notwithstanding the foregoing notice from Triangle), then the principal amount of the Convertible Loan will be reduced by $20,000,000; and
•: if (i) Triangle delivers to Gilead, on May 15, 2003, an irrevocable notice of intended termination of the Merger Agreement, (ii) the HSR Condition, the Legality Condition or the Legal Proceeding Condition shall not have been satisfied, (iii) the failure to satisfy any such condition is not attributable to a failure on the part of Triangle to perform any covenant in the

Merger Agreement required to be performed by Triangle on or prior to the Acceptance Date, and (iv) Gilead delivers to Triangle on or prior to May 21, 2003 a document confirming that Gilead is forgiving $10,000,000 of the principal balance of the Convertible Loan (which has the effect under the Merger Agreement of preventing the termination of the Merger Agreement notwithstanding the foregoing notice from Triangle), then the principal amount of the Convertible Loan will be reduced by $10,000,000.

At any time after December 9, 2003, the Convertible Note plus all accrued and unpaid interest and unpaid delay or default amounts thereon is convertible, in whole or in part, at the option of Gilead, at any time and from time to time into fully paid and nonassessable shares of Triangle common stock at a price of $6.90 per share. The conversion price is subject to adjustment for stock splits, dividends, distributions, the effect of certain corporate transactions involving Triangle and the effect of certain issuances of additional securities by Triangle.

From and after December 9, 2005, or upon a "Change of Control" of Triangle (as defined below) prior to December 9, 2003, Triangle, at its option, may upon written notice to Gilead redeem the Convertible Note, in whole but not in part, to the extent it has funds legally available and irrevocably reserved therefor and such redemption is not prohibited by the terms of its outstanding indebtedness, at the redemption price of 100% of the face amount thereof, plus an amount equal to all accrued and unpaid interest and unpaid delay or default amounts thereon, if any, to the redemption date; except that in the event of such redemption by Triangle from and after December 9, 2005, (i) a registration statement covering the shares into which the Convertible Loan is convertible has been declared effective by the Securities and Exchange Commission and is currently effective, and (ii) Triangle is permitted (without the necessity of any further approvals or action) by law and under the rules of any securities exchange on which Triangle common stock is traded to convert the Convertible Note into shares of Triangle common stock and Triangle intends and has the financial resources and ability to redeem the Convertible Note. Triangle's right to redeem the Convertible Note does not prevent Gilead from converting the Convertible Note into shares of Triangle common stock at any time after December 9, 2003 prior to the payment of the redemption proceeds of the Convertible Note.

For purposes of the Convertible Note, "Change of Control" means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any person or group of shares representing a majority of the voting securities of Triangle; (b) any transaction or series of related transactions (including without limitation, any reorganization, merger or consolidation) such that the outstanding shares of Triangle common stock (or securities which are convertible into or exchangeable for Triangle common stock) are exchanged for or converted into securities which represent less than a majority of the voting securities of the surviving entity; (c) any transaction or series of related transactions (including without limitation, any reorganization, merger or consolidation) such that Triangle's stockholders immediately prior to such transaction or series of transactions own less than a majority of the voting securities of the surviving entity; (d) the sale, lease, transfer, conveyance or other disposition, in one or a series of related transactions, of all or substantially all of Triangle's assets; or (e) the occupation of a majority of the seats (other than vacant seats) on the board of directors of Triangle by persons who were neither (i) nominated by the board of directors of Triangle nor (ii) appointed by directors so nominated.

In the event that a Change of Control occurs at any time after December 9, 2003, Gilead has the right for ninety (90) days after delivery of notice to Gilead of such Change of Control, at Gilead's option, to require Triangle to repurchase the Convertible Loan or any portion thereof. The date of such repurchase will be thirty (30) days after the date on which Triangle is required to notify Gilead of such Change of Control. The repurchase price in the event of such Change of Control will be equal to the greater of (A) the "Conversion Value" (as defined below) of the Convertible Note or (B) the sum of (i) the face amount of the Convertible Note as of that date, (ii) accrued but unpaid

interest on the Convertible Note as of that date, and (iii) unpaid delay or default amounts on the Convertible Note as of that date. The "Conversion Value" of the Convertible Note as of a particular date means the value that Gilead would be entitled to receive upon (a) conversion of the Convertible Note at $6.90 per share (subject to adjustment as described above), followed by (b) the subsequent sale of the shares of Triangle common stock received thereby at the greater of the last closing price per share of Triangle common stock immediately prior to the time (A) of the closing of a repurchase of the Convertible Note or (B) of the event triggering the right to repurchase.

Investor Rights Agreement

In order to induce Gilead to make the Convertible Loan, Triangle agreed to provide Gilead with registration rights pursuant to an Investor Rights Agreement dated as of December 9, 2002, between Triangle and Gilead (the "Investor Rights Agreement" and together with the Convertible Note, the "Financing Documents"). Pursuant to the terms of the Investor Rights Agreement, Triangle must use its best efforts to effect the registration of any shares of Triangle common stock issuable upon conversion of the Convertible Note (except for securities (a) sold in the public market pursuant to a registration statement or under Rule 144 of the Securities Act, (b) sold in certain private transactions or (c) held by a person whose registration rights under the Investor Rights Agreement have terminated or expired) (the "Registrable Securities").

Triangle has agreed to prepare and file with the Securities and Exchange Commission a shelf registration statement on Form S-3 as expeditiously as reasonably possible after the Convertible Note becomes convertible in accordance with its terms (and in any event within fifteen days thereafter), covering the sale of the Registrable Securities, and must keep the registration statement effective for up to two years or, if earlier, (a) until each holder of Registrable Securities has distributed its Registrable Securities or (b) the date on which the Registrable Securities may be resold by each holder thereof without restriction by the volume limitations of Rule 144(e) of the Securities Act. Triangle must also prepare and file with the Securities and Exchange Commission any 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. After the registration of the Registrable Securities, Triangle must furnish to each holder of Registrable Securities copies of a current prospectus, registration statement, any amendment or supplement thereto and any documents incorporated by reference therein and such other documents as such holder may reasonably require in order to facilitate the disposition of Registrable Securities owned by such holder. Triangle must also use its best efforts to list the Registrable Securities with all securities exchanges and/or markets on which Triangle common stock is then listed and prepare and file any required filings with the National Association of Securities Dealers, Inc. or any exchange or market where Triangle common stock is listed.

Pursuant to the Investor Rights Agreement, Gilead has agreed, except under limited circumstances, not to make any disposition of all or any portion of Registrable Securities until (a) there is in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; (b) the disposition is made under Rule 144 under the Securities Act or its equivalent or (c) (A) the transferee has agreed in writing to be bound by the terms of the Investor Rights Agreement, (B) Gilead has notified Triangle of the proposed disposition and furnished Triangle with a statement of the circumstances surrounding the proposed disposition and (C) if reasonably requested by Triangle upon the written advice of counsel to Triangle, Gilead shall have furnished Triangle with an opinion of counsel, reasonably satisfactory to Triangle, that such disposition will not require registration under the Securities Act. Pursuant to the Investor Rights Agreement, Gilead is permitted to engage in derivative, hedging or similar transactions with respect to the Registrable Securities

and the Convertible Note. Gilead is also permitted to pledge the Registrable Securities and the Convertible Note pursuant to a bona fide margin account or lending arrangement entered into in compliance with law.

Gilead has agreed not to transfer a number of Registrable Securities greater than 3% of the outstanding shares of Triangle common stock per calendar quarter, except that Gilead may transfer a "block" (as defined in Rule 10b-18(a) of the Exchange Act) in one or more private transactions. Upon receipt of notice from Triangle, Gilead must immediately discontinue any sales of Registrable Securities until it receives an amended registration statement, supplemented or amended prospectus or is advised in writing by Triangle that the use of the applicable registration statement may be resumed. Notwithstanding the foregoing, Gilead may not be prohibited from selling Registrable Securities under the registration statement as a result of suspensions on more than two occasions in any twelve-month period unless, in the good faith judgment of Triangle's board of directors, upon written advice of counsel to Triangle, the sale of the Registrable Securities under the registration statement would reasonably be likely to cause a violation of the Securities Act or the Exchange Act and result in potential liability to Triangle.

All registration rights granted under the Investor Rights Agreement terminate on December 9, 2009. Notwithstanding the foregoing, the registration rights expire if all Registrable Securities may be sold under Rule 144(k) of the Securities Act. Gilead may assign the rights to cause Triangle to register Registrable Securities to any transferee or assignee of Registrable Securities that (a) is a person or entity that holds Registrable Securities pursuant to a transfer permitted by the Investor Rights Agreement or (b) acquires at least one million shares of Registrable Securities.

13. Certain Conditions to the Offer

The following is a summary of all of the conditions to the Offer, and the Offer is expressly conditioned on the satisfaction of these conditions. The following summary does not purport to be a complete description of the conditions to the Offer contained in the Merger Agreement and is qualified in its entirety by reference to the Merger Agreement, a copy of which is filed as an exhibit to the Tender Offer Statement on Schedule TO that has been filed with the Securities and Exchange Commission by the Purchaser and Gilead in connection with the Offer, and is incorporated in this Offer to Purchase by reference. The Merger Agreement may be examined, and copies obtained, by following the procedures described in Section 8 (Certain Information Concerning Triangle) of this Offer to Purchase.

The Merger Agreement provides that the Purchaser is not required to accept for payment, or (subject to any applicable rule or regulation of the Securities and Exchange Commission) pay for, and may delay the acceptance for payment of, or (subject to any applicable rule or regulation of the Securities and Exchange Commission) the payment for, any tendered shares of Triangle common stock, and (subject to the terms of the Merger Agreement) may terminate the Offer on any scheduled Expiration Date of the Offer and not accept for payment any tendered shares of Triangle common stock, if (i) the Minimum Condition has not been satisfied by midnight, New York City time, on the Expiration Date of the Offer or (ii) any of the following conditions shall not have been satisfied:

•: the waiting period applicable to the purchase of or payment for shares of Triangle common stock pursuant to the Offer under the HSR Act shall have expired or been terminated, and there shall not be in effect any voluntary agreement between Gilead and the Federal Trade Commission or the Department of Justice pursuant to which Gilead has agreed not to consummate the Offer for any period of time (the "HSR Condition");
•: each of the representations and warranties of Triangle contained in the Merger Agreement shall have been accurate in all respects as of the date of the Merger Agreement (except that

any representation or warranty that, by its express terms, speaks only as of an earlier date need only have been accurate as of such earlier date); except that, (i) this does not require any of Triangle's representations and warranties contained in the Merger Agreement to have been accurate as of a date subsequent to the date of the Merger Agreement, (ii) for purposes of determining the accuracy of such representations and warranties as of the date of the Merger Agreement (or any applicable earlier date), (A) all materiality qualifications contained in such representations and warranties shall be disregarded and (B) any update of or modification to Triangle's disclosure schedule provided to Gilead and the Purchaser in connection with the Merger Agreement made or purported to have been made after the date of the Merger Agreement shall be disregarded and (iii) the inaccuracies in such representations and warranties shall be disregarded for purposes of such condition if all such inaccuracies and the circumstances and events underlying such inaccuracies, considered collectively: (A) do not have a material and adverse effect on the intrinsic value of Triangle and its subsidiaries taken as a whole, as compared to the intrinsic value of Triangle and its subsidiaries taken as a whole as of the date of the Merger Agreement assuming the accuracy as of the date of the Merger Agreement of such representations and warranties; (B) do not have a material and adverse effect on the financial condition of Triangle and its subsidiaries taken as a whole, as compared to the financial condition of Triangle and its subsidiaries taken as a whole as of the date of the Merger Agreement assuming the accuracy as of the date of the Merger Agreement of such representations and warranties; and (C) do not have a material and adverse effect on the capitalization of Triangle, as compared to the capitalization of Triangle as of the date of the Merger Agreement assuming the accuracy as of the date of the Merger Agreement of such representations and warranties (the "Accuracy Condition");

•: each covenant or obligation that Triangle is required to comply with or to perform at or prior to the Acceptance Date has been complied with and performed in all material respects (the "Covenant Condition");
•: Gilead and Triangle have received a certificate executed by the Chief Executive Officer and Chief Financial Officer of Triangle confirming that the Accuracy Condition and the Covenant Condition have been duly satisfied, which certificate shall be in full force and effect;
•: no temporary restraining order, preliminary or permanent injunction or other order preventing the purchase of or payment for shares of Triangle common stock pursuant to the Offer, or preventing completion of the Merger or any of the other transactions contemplated by the Merger Agreement, shall have been issued by any court of competent jurisdiction and remain in effect, and there is not any legal requirement enacted or deemed applicable to the Offer, the Merger or any of the other transactions contemplated by the Merger Agreement that makes the purchase of or payment for shares of Triangle common stock pursuant to the Offer, or the completion of the Merger or any of the other transactions contemplated by the Merger Agreement, illegal (the "Legality Condition"); and
•: there shall not be pending or overtly threatened any legal proceeding in which a governmental body is or is threatened to become a party or is otherwise involved (excluding any legal proceeding where the only involvement of any governmental body is that a court or other tribunal is the venue for the adjudication of such legal proceeding): (i) challenging or seeking to restrain or prohibit the purchase of or payment for shares of Triangle common stock pursuant to the Offer, or the completion of the Merger or any of the other transactions contemplated by the Merger Agreement; (ii) relating to the Offer, the Merger or any of the other transactions contemplated by the Merger Agreement and seeking to obtain from Gilead or Triangle or either of Triangle's subsidiaries any damages or other relief that may be material to Gilead or Triangle or either of Triangle's subsidiaries; (iii) seeking to prohibit or

limit in any material respect Gilead's ability to vote, receive dividends with respect to or otherwise exercise ownership rights with respect to the stock of Triangle; (iv) that if adversely determined could reasonably be expected to have the effect of materially and adversely affecting the right of Gilead, Triangle or either of Triangle's subsidiaries to own the assets or operate the business of Triangle or either of its subsidiaries; or (v) seeking to compel Triangle or either of its subsidiaries, Gilead or any subsidiary of Gilead to dispose of, hold separate or license any material asset or material right as a result of the Offer, the Merger or any of the other transactions contemplated by the Merger Agreement (the "Legal Proceeding Condition").

The foregoing conditions are for the sole benefit of Gilead and the Purchaser and, subject to the terms and conditions of the Merger Agreement, may be waived by Gilead or the Purchaser, in whole or in part, at any time and from time to time, in the sole discretion of Gilead and the Purchaser. The failure by Gilead or the Purchaser at any time to exercise any of the foregoing rights will not be deemed a waiver of any such right and each such right will be deemed an ongoing right that may be asserted at any time and from time to time. The Offer is expressly subject to the satisfaction of each of the foregoing conditions.

If the Offer is terminated pursuant to the foregoing provisions, all tendered shares of Triangle common stock will be promptly returned to the tendering stockholders.

14. Certain Legal Matters

Except as described in this Section 14, based on information provided by Triangle, none of Triangle, the Purchaser or Gilead is aware of any license or regulatory permit that appears to be material to the business of Triangle that might be adversely affected by the Purchaser's acquisition of shares of Triangle common stock in connection with the Offer or the Merger, or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority that would be required for the acquisition and ownership of shares of Triangle common stock by the Purchaser in connection with the Offer or the Merger. Should any such approval or other action be required, the Purchaser and Gilead presently contemplate that such approval or other action will be sought, except as described below under "State Takeover Laws". While, except as otherwise described in this Offer to Purchase, the Purchaser does not presently intend to delay the acceptance for payment of, or payment for, shares of Triangle common stock that are tendered in the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to obtain any such approval or other action might not result in consequences adverse to Triangle's business or that certain parts of Triangle's business might not have to be disposed of or other substantial conditions complied with in the event that such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could decline to accept for payment, or pay for, shares of Triangle common stock that are tendered in the Offer. See Section 13 (Certain Conditions to the Offer) of this Offer to Purchase for certain conditions to the Offer, including conditions with respect to governmental actions.

Delaware Law

In general, Section 203 of the DGCL prevents an interested stockholder (generally, a stockholder owning 15% or more of a corporation's outstanding voting stock or an affiliate thereof) from engaging in a business combination (generally defined to include a merger and certain other transactions as described below) with a Delaware corporation for a period of three years following the time when such stockholder became an interested stockholder unless (i) prior to such time the

corporation's board of directors approved either the business combination or the transaction that resulted in such stockholder becoming an interested stockholder, (ii) upon completion of the transaction that resulted in such stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the corporation's voting stock outstanding at the time the transaction commenced (excluding shares owned by certain employee stock option plans and persons who are directors and also officers of the corporation) or (iii) at or subsequent to such time, the business combination is approved by the corporation's board of directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at least 66²/3% of the outstanding voting stock not owned by the interested stockholder (and such action may not be taken by written consent).

Triangle's board of directors has taken all actions necessary to exempt the Merger Agreement, the Stockholder Agreements, the Offer, the Merger and the other transactions contemplated by the Merger Agreement from the provisions of Section 203 of the DGCL.

State Takeover Statutes

A number of states have adopted laws that purport, to varying degrees, to apply to attempts to acquire corporations that are incorporated in, or that have substantial assets, stockholders, principal executive offices or principal places of business or whose business operations otherwise have substantial economic effects in, such states. Triangle, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted such laws. Except as described in this Offer to Purchase, it is not known whether any of these laws will, by their terms, apply to the Offer or the Merger and the Purchaser has not complied with any such laws. To the extent that certain provisions of these laws purport to apply to the Offer or the Merger, it is believed that there are reasonable bases for contesting such laws.

In 1982, in a case named Edgar v. MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. In 1987, however, in a case named CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the United States held that the State of Indiana could, as a matter of corporate law, constitutionally disqualify a potential acquiror from voting shares of a target corporation without the prior approval of the remaining stockholders where, among other things, the corporation is incorporated, and has a substantial number of stockholders, in the state. Subsequently, in a case named TLX Acquisition Corp. v. Telex Corp., a Federal District Court located in the State of Oklahoma ruled that certain Oklahoma statutes were unconstitutional insofar as they purported to apply to corporations incorporated outside of the State of Oklahoma in that they would subject such corporations to inconsistent regulations. Similarly, in a case named Tyson Foods, Inc. v. McReynolds, a Federal District Court located in the State of Tennessee ruled that four Tennessee takeover statutes were unconstitutional as applied to corporations incorporated outside of the State of Tennessee. This decision was affirmed by the United States Court of Appeals for the Sixth Circuit. In December 1988, a Federal District Court located in the State of Florida held in a case named Grand Metropolitan PLC v. Butterworth that the provisions of the Florida Affiliated Transactions Act and the Florida Control Share Acquisition Act were unconstitutional as applied to corporations incorporated outside of the State of Florida.

Antitrust

United States Antitrust Law. Under the HSR Act, and the rules that have been promulgated under the HSR Act by the Federal Trade Commission (the "FTC"), certain acquisition transactions may not be completed unless certain information has been furnished to the FTC and the Antitrust Division of the Department of Justice (the "Antitrust Division") and certain waiting period

requirements have been satisfied. The Offer and the Merger are subject to the filing and waiting period requirements of the HSR Act.

Pursuant to the requirements of the HSR Act, Gilead, on behalf of itself and the Purchaser, filed a Notification and Report Form with respect to the Offer and Merger with the Antitrust Division and the FTC on December 9, 2002. As a result, the waiting period applicable to the purchase of shares pursuant to the Offer is scheduled to expire at 11:59 p.m., New York City time, on December 24, 2002. However, prior to such time, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material relevant to the Offer from the Purchaser. If such a request is made, the waiting period will be extended until 11:59 p.m., New York City time, on the tenth day after substantial compliance by the Purchaser with such request. Thereafter, such waiting period can be extended only by court order.

The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of shares of Triangle common stock in the Offer and the Merger. At any time before the Purchaser's acquisition of shares of Triangle common stock, the FTC or the Antitrust Division could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the Purchaser's acquisition of shares of Triangle common stock in the Offer, the Merger or otherwise, or seeking the divestiture of shares of Triangle common stock acquired by the Purchaser, or the divestiture of substantial assets of Gilead, Triangle or their respective subsidiaries. At any time after the Purchaser's acquisition of shares of Triangle common stock in the Offer and the Merger, the FTC or the Antitrust Division could take such action under the antitrust laws as either deems necessary or desirable in the public interest, including seeking the divestiture of the shares of Triangle common stock acquired by the Purchaser in the Offer and the Merger or the divestiture of substantial assets of Gilead, Triangle or their respective subsidiaries. In this regard, the Merger Agreement provides that at the request of Gilead, Triangle must agree to divest, sell, license, dispose of, hold separate or otherwise take or commit to take any action that limits the ability of Triangle or either of its subsidiaries to operate or retain any of the businesses, product lines or assets of Triangle or either of its subsidiaries, provided that any such action is conditioned upon the completion of the transactions contemplated by the Merger Agreement. However, under the Merger Agreement Gilead does not have any obligation: (i) to dispose of or transfer or cause any of its subsidiaries to dispose of or transfer any assets, or to commit to cause Triangle or either of its subsidiaries to dispose of any assets; (ii) to discontinue or cause any of its subsidiaries to discontinue developing or offering any product; (iii) to license or otherwise make available, or cause any of its subsidiaries to license or otherwise make available, to any person, any right with respect to any of its products for any indication, or any other intellectual property or intellectual property right, or to commit to cause Triangle or either of its subsidiaries to license or otherwise make available to any person any right with respect to Emtricitabine or any other material Company Pharmaceutical Product for any indication, or any related intellectual property or intellectual property right; (iv) to hold separate or cause any of its subsidiaries to hold separate any assets or operations (either before or after the completion of the Merger), or to commit to cause Triangle or either of its subsidiaries to hold separate any assets or operations; or (v) to make or cause either of its subsidiaries to make any commitment (to any governmental body or otherwise) regarding its future operations or the future operations of Triangle or either of its subsidiaries.

Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. There can be no assurance that a challenge to the Offer or the Merger or other acquisition of shares of Triangle common stock by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 13 (Certain Conditions to the Offer) of this Offer to Purchase for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions.

Foreign Antitrust Law. The antitrust and competition laws of certain foreign countries may apply to the Offer and the Merger and filings and notifications may be required. The Purchaser, Gilead and Triangle are reviewing whether any such filings are required in connection with the Offer or the Merger and intend to make such filings promptly to the extent required.

Federal Reserve Board Regulations

Shares of Triangle common stock are currently margin securities under the regulations of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which has the effect, among other things, of allowing brokers to extend credit on the collateral of shares of Triangle common stock. Depending upon factors similar to those described above regarding listing and market quotations, it is possible that, following the Offer, shares of Triangle common stock would no longer constitute margin securities for the purposes of the margin regulations of the Federal Reserve Board and therefore could no longer be used as collateral for loans made by brokers.

15. Fees and Expenses

The Purchaser and Gilead have retained Goldman, Sachs & Co. to act as the Dealer Manager for the Offer, Georgeson Shareholder Communications Inc. to act as the Information Agent for the Offer, and Mellon Investor Services LLC to serve as the Depositary for the Offer. Each of the the Information Agent and the Depositary will receive reasonable and customary compensation for its services, and each of the Dealer Manager, the Information Agent and the Depositary will be reimbursed for certain reasonable out-of-pocket expenses and will be indemnified against certain liabilities and expenses in connection with its services, including certain liabilities and expenses under United States federal securities laws.

The Information Agent may contact holders of Triangle common stock by mail, telephone, facsimile, email, telegraph and personal interview and may request banks, brokers, dealers and other nominees to forward materials relating to the Offer to beneficial owners of Triangle common stock.

Neither the Purchaser nor Gilead will pay any fees or commissions to any broker or dealer or other person (other than to the Depositary, the Dealer Manager, the Information Agent and in the event that the laws of one or more jurisdictions require the Offer to be made by a broker or dealer licensed in such jurisdiction, to such broker or dealer) in connection with the solicitation of tenders of shares of Triangle common stock in connection with the Offer. Upon request, the Purchaser will reimburse brokers, dealers, banks, trust companies and other nominees for customary mailing and handling expenses incurred by them in forwarding material to their customers.

16. Miscellaneous

The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of shares of Triangle common stock in any jurisdiction in which the making of the Offer or the acceptance of the Offer would not be in compliance with the laws of such jurisdiction. Neither the Purchaser nor Gilead is aware of any jurisdiction in which the making of the Offer or the acceptance of the Offer would not be in compliance with the laws of such jurisdiction. To the extent that the Purchaser or Gilead becomes aware of any state law that would limit the class of offerees in the Offer, the Purchaser may amend, in its discretion, the Offer and, depending on the timing of such amendment, if any, may extend, in its discretion, the Offer to provide adequate dissemination of such information to holders of shares of Triangle common stock prior to the expiration of the Offer. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser

by the Dealer Manager or by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by the Purchaser.

No person has been authorized to give any information or to make any representation on behalf of the Purchaser or Gilead that is not contained in this Offer to Purchase or in the Letter of Transmittal and, if given or made, such information or representation must not be relied upon as having been authorized.

The Purchaser and Gilead have filed with the Securities and Exchange Commission a Tender Offer Statement on Schedule TO pursuant to Rule 14d-3 under the Exchange Act, together with exhibits, furnishing certain additional information with respect to the Offer, and may file amendments to such document. In addition, Triangle has filed with the Securities and Exchange Commission a Solicitation/Recommendation Statement on Schedule 14D-9 pursuant to Rule 14d-9 under the Exchange Act, together with exhibits, containing its recommendation with respect to the Offer and the reasons for such recommendation and furnishing certain additional information with respect to the Offer. Such documents and any amendments to such documents, including the related exhibits, should be available for inspection and copies should be obtainable in the manner described in Section 8 (Certain Information Concerning Triangle) of this Offer to Purchase, except that such material will not be available at the regional offices of the Securities and Exchange Commission.

SIMBOLO ACQUISITION SUB, INC.

December 16, 2002

SCHEDULE I

DIRECTORS AND EXECUTIVE OFFICERS OF
THE PURCHASER AND GILEAD

1. Directors and Executive Officers of the Purchaser

The name, business address, present principal occupation or employment and material occupations, positions, offices or employment for the past five years of each of the directors and executive officers of the Purchaser are set forth below. The business address of each such director and executive officer is Simbolo Acquisition Sub, Inc., c/o Gilead Sciences, Inc., 333 Lakeside Drive, Foster City, California 94404. All directors and officers listed below are citizens of the United States.

Name and Position		Present Principal Occupation or Employment and Employment History
John Milligan, Ph.D. President		Dr. Milligan was appointed Senior Vice President and Chief Financial Officer in March 2002. Dr. Milligan joined Gilead Sciences in 1990, beginning as a Research Scientist and transitioning to Project Management in 1994. In 1996 he became Director of Project Management and Project Team Leader for the Gilead and Hoffmann-La Roche collaboration on Tamiflu®. In 1998 he transitioned to Corporate Development and in March 2000 he was promoted to Vice President, Corporate Development with responsibility for licensing, corporate partnerships and mergers and acquisitions. Dr. Milligan received a doctorate in Biochemistry from the University of Illinois and was an American Cancer Society Postdoctoral fellow at the University of California at San Francisco.
Mike Aguiar Chief Financial Officer and Director		Mike Aguiar joined Gilead in September 2002 as Vice President of Finance. Prior to joining Gilead he served as the Vice President of Finance at Immunex where he was responsible for all financial activities and led the divestiture of the Luekine product line. Prior to Immunex Mr. Aguiar was with Honeywell International for 6 years and served in a variety of finance management positions. He was most recently the CFO of the $1.3B Electronic Materials business unit. Prior to Honeywell, he was a mergers and acquisitions associate at Geneva Capital. Mr. Aguiar received an MBA from the University of Michigan in finance and has a bachelor of science degree in Biology from the University of California, Irvine.
Gregg H. Alton Secretary and Director		Gregg H. Alton is Gilead's Vice President and General Counsel. Mr. Alton joined Gilead in October 1999 as Associate General Counsel and in April 2000 was promoted to General Counsel. Prior to joining Gilead, Mr. Alton was in private practice. From 1993 to 1997 and from 1998 to 1999, Mr. Alton was a member of the Mergers and Acquisitions Group in Cooley Godward llp's Palo Alto office. From 1997 to 1998, Mr. Alton practiced law at the Boston office of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. In private practice, Mr. Alton focused primarily on representing biotechnology, healthcare and high technology companies in corporate transactions, in particular, mergers and acquisitions and securities offerings. Mr. Alton received his J.D. from Stanford Law School in 1993, his bachelor's degree from the University of California at Berkeley in 1989, and is a member of the State Bar of California.

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2. Directors and Executive Officers of Gilead

The name, business address, present principal occupation or employment and material occupations, positions, offices or employment for the past five years of each of the directors and executive officers of Gilead are set forth below. Except as indicated below, the business address of each such director or executive officer is c/o Gilead Sciences, Inc., 333 Lakeside Drive, Foster City, California 94404. All directors and officers listed below are citizens of the United States.

Name and Position		Present Principal Occupation or Employment and Employment History
John C. Martin President and Chief Executive Officer Director		Dr. Martin has served as President and CEO of Gilead since April 1996. He joined Gilead in October 1990 as Vice President for Research and Development. From 1984 to 1990 he was employed at Bristol-Myers Squibb, where he was Director of Antiviral Chemistry and participated in the development of ddI and D4T. Dr. Martin was with Syntex Corporation from 1978 to 1984. Dr. Martin is the co-inventor of ganciclovir, a pharmaceutical now marketed by Syntex for the treatment of cytomegalovirus infection. Dr. Martin served on a variety of government committees for the evaluation of antiviral research funding and on the editorial board of Antiviral Research. He was President of the International Society of Antiviral Research from 1998 through 2000 and Chairman of the Board of Directors of the Bay Area Bioscience Center from 1999 through 2001. He currently serves on the National Advisory Allergy & Infectious Diseases Council. Dr. Martin received his Ph.D. in organic chemistry from the University of Chicago and received the Isbell Award of the American Chemical Society for his applications of carbohydrate chemistry to the design of medicinally active nucleosides and nucleotides.
Norbert W. Bischofberger, Ph.D. Executive Vice President, Research and Development		Dr. Bischofberger joined Gilead in August 1990 as Director of Organic Chemistry and was promoted to Vice President, Organic Chemistry in February 1993 and Senior Vice President, Research and Development in January 1998. In November 2000, Dr. Bischofberger was promoted to Executive Vice President of Research and Development. From 1986 to 1990, Dr. Bischofberger was in Genentech's DNA Synthesis Group, where he served most recently as Senior Scientist, DNA Chemistry. He received his Ph.D. in Organic Chemistry at Eidgenossische Technische Hochschule in Zurich, Switzerland. He then performed postdoctoral research in steroid chemistry at Syntex, followed by research in Professor George Whiteside's lab at Harvard University, where his emphasis was organic chemistry and applied enzymology.

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Mark L. Perry, J.D. Executive Vice President, Operations		Mr. Perry joined Gilead in July 1994 as Vice President, General Counsel, and Secretary and assumed the additional responsibilities of Chief Financial Officer in July 1996. Mr. Perry was promoted to Senior Vice President in January 1998, in February 2000 was promoted to Senior Vice President, Operations and in November 2000 was promoted to Executive Vice President, Operations. From 1981 to 1994, Mr. Perry was with Cooley Godward in San Francisco and Palo Alto, California. Cooley Godward serves as Gilead's outside counsel. Mr. Perry was an associate with Cooley Godward from 1981 to 1987, and a partner from 1987 to 1994. Mr. Perry received his J.D. from the University of California, Davis and is a member of the California Bar.
Michael K. Inouye Senior Vice President, Sales and Marketing		Mr. Inouye joined Gilead in 1995 as Vice President, Sales and Marketing to build up Gilead's commercial organization before the launch of Vistide. He was promoted to Senior Vice President, Sales and Marketing in November 2000. Immediately before Gilead, Mr. Inouye was Vice President, Sales and Marketing at InSite Vision from 1994 to 1995. Prior to that, he was with Merck and Co., Inc. for 13 years where he held a succession of sales and marketing management positions, including Senior Director, Marketing Planning and Senior Region Director, Field Sales. Before joining Merck in 1980, Mr. Inouye was with American Home Products in field sales.
William A. Lee, Ph.D. Senior Vice President, Research		Dr. Lee joined Gilead as Director of Pharmaceutical Product Development in August 1991, became Vice President, Pharmaceutical Product Development in January 1995 and in February 2000 was promoted to Vice President, Research and Pharmaceutical Development. In November 2000, Dr. Lee was promoted to Senior Vice President, Research and Product Development. Dr. Lee is a co-inventor of Roche's immune suppressive drug, Cellcept, a prodrug of mycophenolic acid, which is currently on the market. Dr. Lee was Department Head of Drug Delivery and Formulation at California Biotechnology, Inc. from 1986 to 1991 and with Syntex from 1985 to 1986. He received his Ph.D. in Physical Organic Chemistry from the University of California at San Diego and did postdoctoral work at the Ecole Polytech Federal Lausanne and the University of California at Santa Barbara.

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John Milligan, Ph.D. Senior Vice President and Chief Financial Officer		Dr. Milligan was appointed Senior Vice President and Chief Financial Officer in March 2002. Dr. Milligan joined Gilead in 1990, beginning as a Research Scientist and transitioning to Project Management in 1994. In 1996 he became Director of Project Management and Project Team Leader for the Gilead and Hoffmann-La Roche collaboration on Tamiflu®. In 1998 he transitioned to Corporate Development and in March 2000 he was promoted to Vice President, Corporate Development with responsibility for licensing, corporate partnerships and mergers and acquisitions. Dr. Milligan received a doctorate in Biochemistry from the University of Illinois and was an American Cancer Society Postdoctoral fellow at the University of California at San Francisco.
James M. Denny Chairman of the Gilead Board of Directors		Mr. Denny joined Gilead's board of directors in 1996 following his retirement from Sears and serves as Chairman of the Audit Committee. He is a former director of Astra AB and previously served as Executive Vice President and Chief Financial and Planning Officer of G.D. Searle & Co., as well as Chairman of Pearle Health Services, Inc., a Searle-affiliated company. He is a director of Allstate Corporation, GATX Corporation and ChoicePoint, Inc., the Chairman of Northwestern Memorial Foundation, and a Senior Advisor to William Blair Capital Partners, LLC.
Paul Berg, Ph.D. Director		Dr. Berg joined the Gilead board of directors and became a member of the Scientific Advisory Board in April 1998. Dr. Berg is currently Cahill Professor in Cancer Research and Biochemistry emeritus at Stanford University School of Medicine, where he has been on the faculty since 1959. He has been the Director of the Stanford University Beckman Center for Molecular and Genetic Medicine since its founding in 1985. Dr. Berg is a director of Affymetrix, Inc. and Transgene, Inc. He has been a member of the National Academy of Sciences since 1966 and received the Nobel Prize for Chemistry in 1980 for his studies of the biochemistry of nucleic acids, particularly recombinant DNA.
Etienne F. Davignon Director		Mr. Davignon joined Gilead's board of directors in September 1990. He has served as the Vice Chairman of Société Générale de Belgique, a diversified financial and industrial company, since 1985. Mr. Davignon served as the European Community's Commissioner for Industry and International Markets from 1977 to 1981, and as the EC's Vice President for Research, Industry and Energy Policies from 1981 to 1984. Mr. Davignon is a director of Fiat S.A., Compagnie de Suez, Minorco S.A. and a number of other European companies.

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Cordell W. Hull Director		Mr. Hull is the co-founder, Chairman and CEO of InfrastructureWorld, Inc., a business-to-business portal for the global infrastructure community. Prior to founding InfrastructureWorld, Inc., he held the positions of Chairman of Bechtel Enterprises, Chief Financial Officer of Bechtel Group and President of American Express Company's merchant banking operations in London. Mr. Hull serves as a Director of Darby Overseas Investments, Ltd., Bechtel Group, Inc., Bechtel Enterprises and the Fremont Group.
Gordon E. Moore, Ph.D. Director		Dr. Moore joined Gilead's board of directors in January 1996, and served as a member of Gilead's Business Advisory Board from July 1991 until January 1996. Dr. Moore also serves as Chairman of the Compensation Committee. Dr. Moore is a co-founder and Chairman Emeritus of Intel Corporation, where he previously served as Chairman, President and Chief Executive Officer. He also served as Director of Research and Development for the Fairchild Semiconductor Division of Fairchild Camera and Instrument Corporation. Dr. Moore is a director of Transamerica Corporation and is Chairman of the Board of Trustees at the California Institute of Technology. He received the National Medal of Technology in 1990.
George P. Shultz, Ph.D. Director		Dr. Shultz joined Gilead's board of directors in January 1996. Dr. Shultz currently serves as Distinguished Fellow at the Hoover Institution and as a director of the Bechtel Group, Inc., AirTouch Communications and Gulfstream Aerospace Corporation. Dr. Shultz served as U.S. Secretary of State from 1982 to 1989 and earlier served as Secretary of Labor, Director of the Office of Management and Budget and Secretary of the Treasury. Previously, he served as Dean of the Graduate School of Business at the University of Chicago and as President of the Bechtel Group, Inc. In 1989, Dr. Shultz was awarded the Medal of Freedom, the nation's highest civilian honor.
Gayle Edlund Wilson Director		Wife of former California Governor Pete Wilson, Mrs. Wilson served as California's First Lady from 1991-1999. Mrs. Wilson currently serves as a director of Chela Financial, Inc., a nonprofit corporation providing financial assistance to students pursuing higher education, and the Ralph M. Parsons Foundation, a nonprofit organization providing grants primarily in the areas of higher education, social impact, civic and cultural issues, and health. She also serves as an advisor for BroadDaylight, Inc., a leading provider of software designed to streamline Web-based customer service functions. In addition, Mrs. Wilson is a trustee of the California Institute of Technology (Caltech) and a member of its Jet Propulsion Lab Committee. Mrs. Wilson also serves on the Compensation Committee of Gilead's board of directors.

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Manually signed facsimile copies of the Letter of Transmittal will be accepted. The Letter of Transmittal, certificates for shares of Triangle common stock and any other required documents should be sent or delivered by each stockholder of Triangle or such stockholder's broker, dealer, bank, trust company or other nominee to the Depositary at one of its addresses set forth below.

By Facsimile Transmission:		By Registered or Certified Mail:		By Overnight Courier:		By Hand:
For Eligible Institutions Only: (201) 296-4293 For Confirmation Only: (201) 296-4860		P.O. Box P.O. Box 3301 South Hackensack, NJ 07606 Attn: Reorganization Department		85 Challenger Road Mail Stop Reorg Ridgefield Park, NJ 07660 Attn: Reorganization Department		120 Broadway 13^th Floor New York, NY 10271

Questions regarding the Offer, and requests for assistance in connection with the Offer, may be directed to the Information Agent or the Dealer Manager at their respective telephone numbers and locations listed below. Additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery or any other materials related to the Offer may be obtained from the Information Agent or Dealer Manager. You may also contact your broker, dealer, bank, trust company or other nominee for assistance concerning the Offer.

The Information Agent for the Offer is:

Georgeson Shareholder Communications Inc.
17 State Street, 10^th Floor
New York, NY 10004

Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (866) 295-4328

The Dealer Manager for the Offer is:

Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004

Call Collect: (212) 902-1000
Call Toll Free: (800) 323-5678

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IMPORTANT
TABLE OF CONTENTS
SUMMARY TERM SHEET
INTRODUCTION
THE TENDER OFFER
SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER AND GILEAD
EX-99.(A)(2) 4 a2096276zex-99_a2.htm EXHIBIT 99(A)(2)
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Exhibit (a)(2)

LETTER OF TRANSMITTAL

To Tender
Shares of Common Stock

Triangle Pharmaceuticals, Inc.

Pursuant to the Offer to Purchase
Dated December 16, 2002

Simbolo Acquisition Sub, Inc.,
A Wholly Owned Subsidiary of
Gilead

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JANUARY 15, 2003, UNLESS THE OFFER IS EXTENDED.

The Depositary for the Offer is:

By Facsimile Transmission:		By Registered or Certified Mail:		By Overnight Courier:	By Hand:
For Eligible Institutions Only: (201) 296-4293 For Confirmation Only: (201) 296-4860		P.O. Box P.O. Box 3301 South Hackensack, NJ 07606 Attn: Reorganization Department		85 Challenger Road Mail Stop — Reorg Ridgefield Park, NJ 07660 Attn: Reorganization Department	120 Broadway 13^th Floor New York, NY 10271

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY FOR THE OFFER. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED BELOW, WITH SIGNATURE GUARANTEE IF REQUIRED, AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW.

The Instructions set forth in this Letter of Transmittal should be read carefully before this Letter of Transmittal is completed.



Description of Shares Tendered

Name(s) and Address(es) of Registered Holder(s) (Please Fill In, if Blank, Exactly as Name(s) and Addresses Appear(s) on Share Certificate(s))		Shares Tendered (Attach Additional Signed List If Necessary)

		Share Certificate Number(s)*	Total Number of Shares Represented by Share Certificate(s)*	Number of Shares Tendered**




		Total Shares

*	Need not be completed if transfer is made by book-entry transfer.
**	Unless otherwise indicated, it will be assumed that all shares represented by the listed certificates are being tendered. See Instruction 4. IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE BEEN LOST OR DESTROYED, SEE INSTRUCTION 10.

This Letter of Transmittal is to be used either if certificates for Shares (as defined herein) are to be delivered herewith or, unless an Agent's Message (as defined in the Offer to Purchase, which is defined herein) is utilized, if delivery of Shares is to be made pursuant to the procedures for book-entry transfer described in the Offer to Purchase to an account maintained by the Depositary (as defined herein) at the Book-Entry Transfer Facility (as defined in the Offer to Purchase). Stockholders whose certificates for Shares are not immediately available or who cannot deliver either the certificates for, or a Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to, their Shares, and all other documents required hereby, to the Depositary prior to the Expiration Date (as defined in the Offer to Purchase) of the Offer (as defined below) must tender their Shares in accordance with the guaranteed delivery procedures described in the Offer to Purchase. See Instruction 2. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary.

o: CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):

Name of Tendering Institution:

Account Number:

Transaction Code Number:

o: CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY, ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:

Name(s) of Registered Owner(s):

Date of Execution of Notice of Guaranteed Delivery:

Name of Institution that Guaranteed Delivery:

If delivered by book-entry transfer check box: o

NOTE: SIGNATURES MUST BE PROVIDED BELOW

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

The undersigned hereby tenders to Simbolo Acquisition Sub, Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Gilead Sciences, Inc., a Delaware corporation ("Gilead"), the above described shares of common stock, par value $0.001 per share ("Shares"), of Triangle Pharmaceuticals, Inc., a Delaware corporation ("Triangle"), upon the terms and subject to the conditions set forth in the Purchaser's Offer to Purchase, dated December 16, 2002 (the "Offer to Purchase"), and this Letter of Transmittal (which, together with any amendments or supplements thereto or hereto, collectively constitute the "Offer"), receipt of which is hereby acknowledged.

Upon the terms of the Offer, subject to, and effective upon, acceptance for payment of, and payment for, the Shares tendered herewith in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchaser all right, title and interest in and to all the Shares that are being tendered herewith (and any and all dividends, distributions, other Shares or other securities or rights issued or issuable in respect thereof on or after December 16, 2002 (collectively, "Distributions")) and irrevocably constitutes and appoints Mellon Investor Services LLC (the "Depositary") the true and lawful agent and attorney-in-fact of the undersigned, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to the full extent of the undersigned's rights with respect to such Shares (and any and all Distributions) (i) to deliver certificates for such Shares (and any such other Shares or securities or rights) or transfer ownership of such Shares (and any and all Distributions) on the account books maintained by the Book-Entry Transfer Facility together, in any such case, with all accompanying evidences of transfer and authenticity to, or upon the order of, the Purchaser, (ii) to present such Shares (and any and all Distributions) for transfer on Triangle's books and (iii) to receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any and all Distributions), all in accordance with the terms of the Offer.

The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered herewith (and any and all Distributions) and, when the same are accepted for payment by the Purchaser, the Purchaser will acquire good title thereto, free and clear of all liens, restrictions, claims and encumbrances, and the same will not be subject to any adverse claim. The undersigned will, upon request, execute any additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered herewith (and any and all Distributions). In addition, the undersigned shall remit and transfer promptly to the Depositary for the account of the Purchaser any and all Distribution in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance and transfer or appropriate assurance thereof, the Purchaser shall be entitled to all rights and privileges as owner of each such Distribution and may withhold the entire purchase price of the Shares tendered hereby or deduct from such purchase price, the amount of value of such Distribution as determined by the Purchaser in its sole discretion.

All authority conferred or agreed to be conferred pursuant to this Letter of Transmittal shall be binding upon the successors, assigns, heirs, executors, administrators and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. Except as described in the Offer to Purchase, this tender is irrevocable. The Purchaser reserves the right to require that, in order for the Shares or other securities to be deemed validly tendered, immediately upon the Purchaser's acceptance for payment of such Shares, the Purchaser must be able to exercise full voting, consent and other rights with respect to such Shares (and any and all Distributions), including voting at any meeting of Triangle's stockholders.

By executing this Letter of Transmittal, the undersigned hereby irrevocably appoints each of John Milligan and Gregg Alton as an attorney-in-fact and proxy of the undersigned, each with full power of substitution and resubstitution, to vote at any annual, special, adjourned or postponed meeting of Triangle's stockholders or otherwise in such manner as each such attorney-in-fact and proxy (or his or her substitute) shall in his or her sole discretion deem proper with respect to, to execute any written consent concerning any matter as each such attorney-in-fact and proxy (or his or her substitute) shall in his or her sole discretion deem proper with respect to, and to otherwise act as each such attorney-in-fact and proxy (or his or her substitute) shall in his or her sole discretion deem proper with respect to, the Shares tendered herewith that have been accepted for payment by the Purchaser prior to the time any such action is taken and with respect to which the undersigned is entitled to vote (and any and all Distributions). This appointment is effective when, and only to

the extent that, the Purchaser accepts for payment such Shares as provided in the Offer to Purchase. This power of attorney and proxy are irrevocable and are granted in consideration of the acceptance for payment of such Shares in accordance with the terms of the Offer. Upon such acceptance for payment, all prior powers of attorney, proxies and consents given by the undersigned with respect to the Shares tendered herewith (and any and all Distributions) will, without further action, be revoked and no subsequent powers of attorney, proxies, consents or revocations may be given (and, if given, will not be deemed effective) by the undersigned in respect of such Shares.

The undersigned understands that the valid tender of Shares pursuant to any of the procedures described in the Offer to Purchase and in the Instructions hereto will constitute a binding agreement between the undersigned and the Purchaser upon the terms of and subject to the conditions to the Offer (and if the Offer is extended or amended, the terms or conditions of any such extension or amendment).

Unless otherwise indicated herein in the box labeled "Special Payment Instructions," please issue the check for the purchase price and/or return any certificate(s) for Shares not tendered or accepted for payment in the name(s) of the registered holder(s) indicated herein in the box labeled "Description of Shares Tendered" on the cover page of this Letter of Transmittal. Similarly, unless otherwise indicated herein in the box labeled "Special Delivery Instructions," please mail the check for the purchase price and/or return any certificates for Shares not tendered or accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) indicated herein in the box labeled "Description of Shares Tendered" on the cover page of this Letter of Transmittal. In the event that both of the boxes herein labeled "Special Payment Instructions" and "Special Delivery Instructions," respectively, are completed, please issue the check for the purchase price and/or return any certificate(s) for Shares not tendered or accepted for payment (and any accompanying documents, as appropriate) in the name of, and deliver such check and/or return such certificates (and any accompanying documents, as appropriate) to, the person or persons indicated therein. Please credit any Shares tendered herewith by book-entry transfer that are not accepted for payment by crediting the account at the Book-Entry Transfer Facility. The undersigned recognizes that the Purchaser has no obligation pursuant to the Special Payment Instructions to transfer any Shares from the name of the registered holder(s) thereof if the Purchaser does not accept for payment any of the Shares so tendered.

IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE BEEN LOST OR DESTROYED, SEE INSTRUCTION 10.

SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)

To be completed ONLY if certificate(s) for Shares not tendered or not accepted for payment and/or the check for the purchase price of Shares accepted for payment is/are to be issued in the name of someone other than the undersigned.

Issue o check o certificates to:

Name		(Please Print)
Address
(Include Zip Code)
(Employer Identification or Social Security Number)

SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)

To be completed ONLY if certificate(s) for Shares not tendered or not accepted for payment and/or the check for the purchase price of Shares accepted for payment is/are to be mailed to someone other than the undersigned or to the undersigned at an address other than that listed above.

Issue o check o certificates to:

Name		(Please Print)
Address
(Include Zip Code)
(Employer Identification or Social Security Number)

(Also complete Substitute Form W-9 below)

SIGN HERE
(Also Complete Substitute Form W-9 Below)

Signature:

(Signature(s) of Stockholder(s))

Dated:

200

(Must be signed by registered holder(s) as name(s) appear(s) on the certificate(s) for the Shares or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please provide the following information and see Instruction 5.)

Name(s)
(Please Print)

Capacity (full title)

Address
(Include Zip Code)

Daytime Area Code and Telephone Number

Taxpayer Identification or Social Security Number

(See Substitute Form W-9)

GUARANTEE OF SIGNATURE(S)
(If Required — See Instructions 1 and 5)

FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE BELOW.

Authorized Signature

Name

(Please Print)

Title

Name of Firm

Address

(Include Zip Code)

Daytime Area Code and Telephone Number

Dated:

200

INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

1. Guarantee of Signatures. No signature guarantee is required on this Letter of Transmittal if (i) this Letter of Transmittal is signed by the registered holder(s) of Shares tendered herewith, unless such registered holder(s) has completed either the box labeled "Special Payment Instructions" or the box labeled "Special Delivery Instructions" on this Letter of Transmittal or (ii) such Shares are tendered for the account of a financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agent's Medallion Program, Nasdaq Stock Market Guarantee Program or the Stock Exchange Medallion Program or by any other "eligible guarantor institution", as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (each, an "Eligible Institution"). For purposes of this Instruction, a registered holder of Shares includes any participant in the Book-Entry Transfer Facilities system whose name appears on a security position listing as the owner of the Shares. In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.

2. Requirements of Tender. This Letter of Transmittal is to be completed by stockholders either if certificates are to be tendered herewith or, unless an Agent's Message is utilized, if delivery of Shares is to be made pursuant to the procedures for book-entry transfer described in the Offer to Purchase to an account maintained by the Depositary at the Book Entry Transfer Facility. For a stockholder to validly tender Shares in the Offer, either (i) the certificate(s) representing the tendered Shares, together with this Letter of Transmittal (or a facsimile copy of it), properly completed and duly executed, together with any required signature guarantees and any other required documents, must be received by the Depositary at one of its addresses listed herein prior to the Expiration Date of the Offer, (ii) in the case of a tender effected pursuant to a book-entry transfer (a) either this Letter of Transmittal (or a facsimile copy of it), properly completed and duly executed, together with any required signature guarantees, or an Agent's Message, and any other required documents, must be received by the Depositary at one of its addresses listed herein prior to the Expiration Date of the Offer and (b) the Shares to be tendered must be delivered pursuant to the book-entry transfer procedures described in the Offer to Purchase and a Book-Entry Confirmation must be received by the Depositary prior to the Expiration Date of the Offer or (iii) the tendering stockholder must comply with the guaranteed delivery procedures described in the Offer to Purchase prior to the Expiration Date of the Offer.

If a stockholder desires to tender Shares in the Offer and such stockholder's certificates representing such Shares are not immediately available, or the book-entry transfer procedures described in the Offer to Purchase cannot be completed on a timely basis, or time will not permit all required documents to reach the Depositary prior to the Expiration Date of the Offer, such stockholder may tender such Shares if all the following conditions are met: (i) such tender is made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser, is received by the Depositary at one of its addresses listed herein prior to the Expiration Date of the Offer; and (iii) either (a) the certificates representing such Shares, together with this Letter of Transmittal (or a facsimile copy of it), properly completed and duly executed, and any required signature guarantees, and any other required documents, are received by the Depositary at one of its addresses listed herein within three trading days (as described below) after the date of execution of such Notice of Guaranteed Delivery or (b) in the case of a book-entry transfer effected pursuant to the book-entry transfer procedures described in the Offer to Purchase, (1) either this Letter of Transmittal (or a facsimile copy of it), properly completed and duly executed, and any required signature guarantees, or an Agent's Message, and any other required documents, is received by the Depositary at one of its addresses listed herein and (2) such Shares are delivered pursuant to the book-entry transfer procedures described in the Offer to Purchase and a Book-Entry Confirmation is received by the Depositary, in each case within three trading days after the date of execution of such Notice of Guaranteed Delivery. For purposes of the foregoing, a trading day is any day on which the Nasdaq National Market is open for business.

The method of delivery of Shares to be tendered in the Offer, this Letter of Transmittal and all other required documents, including delivery through the Book-Entry Transfer Facility, is at the election and risk of the tendering stockholder. Shares to be tendered in the Offer, will be deemed delivered only when actually received by the Depositary (including, in the case of a book-entry transfer, by Book-Entry Confirmation). If delivery of Shares is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be accepted for payment. All tendering stockholders, by execution of this Letter of Transmittal (or a facsimile copy of it), waive any right to receive any notice of the acceptance of their Shares for payment.

3. Inadequate Space. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate schedule attached hereto and separately signed on each page in the same manner as this Letter of Transmittal.

4. Partial Tenders (Applicable to Certificate Stockholders Only). If fewer than all the Shares evidenced by any certificate submitted are to be tendered herewith, fill in the number of Shares that are to be tendered in the box entitled "Number of Shares Tendered." In any such case, new certificate(s) for the remainder of the Shares that were evidenced by the old certificate(s) will be sent to the registered holder(s), unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the acceptance of payment of, and payment for, the Shares tendered herewith. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated.

5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered herewith, the signature(s) must correspond with the name(s) as written on the face of the certificate(s) without any change whatsoever.

If any of the Shares tendered herewith are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.

If any tendered Shares are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations of certificates.

If this Letter of Transmittal or any certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and proper evidence, satisfactory to the Purchaser, of their authority so to act must be submitted.

When this Letter of Transmittal is signed by the registered owner(s) of the Shares tendered herewith, no endorsements of certificates or separate stock powers are required unless payment is to be made to, or certificates for Shares not tendered or accepted for payment are to be issued to, a person other than the registered owner(s). Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution.

If this Letter of Transmittal is signed by a person other than the registered owner(s) of certificate(s) listed on the cover page, such certificate(s) must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered owner(s) appear on such certificate(s) and the signatures on such certificates or stock powers must be guaranteed by an Eligible Institution.

6. Stock Transfer Taxes. Except as otherwise provided in this Instruction 6, the Purchaser will pay any stock transfer taxes with respect to the transfer and sale of Shares to it or its order in the Offer. If, however, payment of the purchase price is to be made to, or if certificates for Shares not to be tendered or not accepted for payment are to be registered in the name of, any person(s) other than the registered owner(s), or if tendered certificate(s) are registered in the name of any person(s) other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered owner(s) or such person(s)) payable on account of the transfer to such person(s) will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted.

Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the certificate(s) listed in this Letter of Transmittal.

7. Special Payment and Delivery Instructions. If a check is to be issued in the name of, and/or certificates for Shares not accepted for payment are to be returned to, a person other than the person signing this Letter of Transmittal, or if a check is to be sent and/or such certificates are to be returned to a person other than the person signing this Letter of Transmittal or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal must be completed.

8. Waiver of Conditions. Subject to the terms and conditions of the Merger Agreement (as defined in the Offer to Purchaser), the Purchaser reserves the absolute right in its sole discretion to waive any of the specified conditions (other than the Minimum Condition (as defined in the Offer to Purchase)) of the Offer, in whole or in part, in the case of any Shares to be tendered herewith.

9. Backup Withholding. In order to avoid backup withholding of U.S. federal income tax on payments of cash in the Offer, a stockholder tendering Shares in the Offer who is a U.S. citizen or a U.S. resident alien must, unless an exemption applies, provide the Depositary with such stockholder's correct taxpayer identification number ("TIN") on Substitute Form W-9 included below in this Letter of Transmittal and certify

under penalties of perjury that such TIN is correct and that such stockholder is not subject to backup withholding. If a stockholder does not provide such stockholder's correct TIN or fails to provide the certifications described above, the Internal Revenue Service (the "IRS") may impose a penalty on such stockholder and payment of cash to such stockholder in the Offer may be subject to backup withholding of 30%.

Backup withholding is not an additional tax. Rather, the amount of the backup withholding can be credited against the Federal income tax liability of the person subject to the backup withholding, provided that the required information is given to the IRS. If backup withholding results in an overpayment of tax, a refund can be obtained by the stockholder upon filing an income tax return.

The stockholder is required to give the Depositary the TIN (i.e., social security number or employer identification number) of the record owner(s) of the Shares tendered herewith. If such Shares are held in more than one name, or are not in the name of the actual owner(s), consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report.

The box in Part 3 of the Substitute Form W-9 may be checked if the tendering stockholder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the stockholder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Depositary will withhold 30% on all payments made prior to the time a properly certified TIN is provided to the Depositary. However, such amounts will be refunded to such Stockholder if a TIN is provided to the Depositary within 60 days.

See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for more instructions.

Certain stockholders (including, among others, all corporations and certain foreign individuals and entities) are not subject to backup withholding. Tendering stockholders who are not U.S. citizens or U.S. resident aliens should complete and sign the main signature form and a Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, copies of which may be obtained from the Depositary, in order to avoid backup withholding. Stockholders should consult their tax advisors about qualifying for exemption from backup withholding and the procedure for obtaining such exemption.

10. Lost, Destroyed or Stolen Certificates. If any certificate representing Shares has been lost, destroyed or stolen, the Stockholder should promptly notify the transfer agent for Triangle common stock, American Stock Transfer & Trust Company, at (800) 937-5449. The stockholder will then be instructed by American Stock Transfer & Trust Company as to the steps that must be taken in order to replace such certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been completed.

IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE COPY OF IT) TOGETHER WITH ANY SIGNATURE GUARANTEES, OR IN THE CASE OF A BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE OF THE OFFER AND EITHER CERTIFICATES FOR TENDERED SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER DESCRIBED IN THE OFFER TO PURCHASE, IN EACH CASE PRIOR TO THE EXPIRATION DATE OF THE OFFER, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR GUARANTEED DELIVERY DESCRIBED IN THE OFFER TO PURCHASE.


PAYERS NAME: Mellon Investor Services LLC

SUBSTITUTE Form W-9	Part 1 PLEASE PROVIDE YOUR TIN IN THE BOX AT THE RIGHT AND CERTIFY BY SIGNING AND DATING BELOW.	Social Security Number(s) OR Employer Identification Number

Department of the Treasury Internal Revenue Service Payers Request for Taxpayer Identification Number (TIN)	Part 2 Certification. Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued for me) and (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends or (c) the IRS has notified me that I am no longer subject to backup withholding.

	Certification Instructions You must cross out item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax returns. However, if after being notified by the IRS that you are subject to backup withholding, you received another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out such item (2). If you are exempt from backup withholding, check the box in Part 4 above.	Part 3 Awaiting TIN o Part 4 Exempt TIN o

		Signature:				Date:

NOTE:

Failure to complete and return this Substitute Form W-9 may result in backup withholding of 30% of any payments made to you in the Offer. Please review the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional information.

You must complete the following certificate if you checked
the box in part 3 of Substitute Form W-9.

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number to the Depositary, 30% of all reportable payments made to me will be withheld, but will be refunded to me if I provide a certified taxpayer identification number within 60 days.

Signature

Date:

, 200

Manually signed facsimile copies of this Letter of Transmittal will be accepted. This Letter of Transmittal, certificates for Shares and any other required documents should be sent or delivered by each stockholder or such stockholder's broker, dealer, bank, trust company or other nominee to the Depositary at one of its addresses listed below.

By Facsimile Transmission:		By Registered or Certified Mail:		By Overnight Courier:	By Hand:
For Eligible Institutions Only: (201) 296-4293 For Confirmation Only: (201) 296-4860		P.O. Box P.O. Box 3301 South Hackensack, NJ 07606 Attn: Reorganization Department		85 Challenger Road Mail Stop — Reorg Ridgefield Park, NJ 07660 Attn: Reorganization Department	120 Broadway 13^th Floor New York, NY 10271

Questions regarding the Offer, and requests for assistance in connection with the Offer, may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers listed below. Additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery or any other materials related to the Offer may be obtained from the Information Agent and the Dealer Manager and will be furnished promptly free of charge. You may also contact your broker, dealer, bank, trust company or other nominee for assistance concerning the Offer.

The Information Agent for the Offer is:

Georgeson Shareholder Communications Inc.
17 State Street, 10^th Floor
New York, NY 10004

Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (866) 295-4328

Goldman Sachs

The Dealer Manager for the Offer is:

Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004

Call Collect: (212) 902-1000
Call Toll Free: (800) 323-5678

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Exhibit (a)(2)

EX-99.(A)(3) 5 a2096276zex-99_a3.htm EXHIBIT 99 (A)(3)
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Exhibit (a)(3)

Notice of Guaranteed Delivery

for

Tender of Shares of Common Stock

of

Triangle Pharmaceuticals, Inc.

to

Simbolo Acquisition Sub, Inc.,
a wholly owned subsidiary of
Gilead Sciences, Inc.

(not to be used for signature guarantees)

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JANUARY 15, 2003, UNLESS THE OFFER IS EXTENDED.

This Notice of Guaranteed Delivery, or a form substantially equivalent hereto, must be used to accept the Offer (as defined below) (i) if certificates ("Share Certificates") representing shares of common stock, par value $0.001 per share ("Shares"), of Triangle Pharmaceuticals, Inc., a Delaware corporation, are not immediately available, (ii) if Share Certificates and all other required documents cannot be delivered to Mellon Investor Services LLC, the depositary for the Offer (the "Depositary") or (iii) if the procedures for book-entry transfer cannot be completed on a timely basis. This form may be delivered by hand to the Depositary or transmitted by facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution (as defined in the Purchaser's Offer to Purchase, dated December 16, 2002 (the "Offer to Purchase")). See Section 2 of the Offer to Purchase.

The Depositary for the Offer is:

By Facsimile Transmission:		By Registered or Certified Mail:		By Overnight Courier:		By Hand:
For Eligible Institutions Only: (201) 296-4293 For Confirmation Only: (201) 296-4860		P.O. Box P.O. Box 3301 South Hackensack, NJ 07606 Attn: Reorganization Department		85 Challenger Road Mail Stop — Reorg Ridgefield Park, NJ 07660 Attn: Reorganization Department		120 Broadway 13^th Floor New York, NY 10271

Delivery of this Notice of Guaranteed Delivery to an address other than as set forth above or transmission of instructions via a facsimile to a number other than as set forth above will not constitute a valid delivery to the Depositary. Deliveries to Triangle Pharmaceuticals, Inc., Goldman, Sachs & Co., the Dealer Manager for the Offer, or Georgeson Shareholder Communications Inc., the Information Agent for the Offer, will not be forwarded to the Depositary and therefore will not constitute valid delivery.

This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal for the Offer is required to be guaranteed by an "Eligible Institution" (as defined in the Offer to Purchase) under the Instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on such Letter of Transmittal.

The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal or an Agent's Message (as defined in the Offer to Purchase) and shares to the Depositary in the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution.

The guarantee on the reverse side must be completed.

Ladies and Gentlemen:

The undersigned hereby tenders to Simbolo Acquisition Sub, Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Gilead Sciences, Inc., a Delaware corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"), receipt of which is hereby acknowledged, the number of Shares set forth below, all pursuant to the guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase.

Number of Shares:

Certificate Nos. (if available):

(Check box if Shares will be tendered by book-entry transfer) o [The Depository Trust Company]
Account Number

Dated

Name(s) of Record Holder(s):



Please Print
Address(es):


			(Zip Code)
Daytime Area Code and Tel. No.:

Signature(s):

GUARANTEE
(not to be used for signature guarantee)

The undersigned, a firm that is a participant in the Security Transfer Agent's Medallion Program or Nasdaq Stock Market Guarantee Program or the Stock Exchange Medallion Program or an "eligible guarantor institution", as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby guarantees to deliver to the Depositary either the certificates representing the Shares tendered herewith, in proper form for transfer, or a Book-Entry Confirmation (as defined in Section 2 of the Offer to Purchase) with respect to such Shares, in any such case together with a properly completed and duly executed Letter of Transmittal for the Offer (or a facsimile copy of it), with any required signature guarantees, or an Agent's Message (as defined Section 2 of the Offer to Purchase), and any other required documents, within three trading days (as described in the Letter of Transmittal for the Offer) after the date hereof.

The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver a Letter of Transmittal for the Offer or an Agent's Message and certificates for Shares to the Depositary within the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution.

Name of Firm

Address(es):


				(Zip Code)
Area Code and Tel. No.:

Authorized Signature

Name:
		Please Type or Print
Title:

Dated:

NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL FOR THE OFFER.

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Notice of Guaranteed Delivery for Tender of Shares of Common Stock of Triangle Pharmaceuticals, Inc. to Simbolo Acquisition Sub, Inc., a wholly owned subsidiary of Gilead Sciences, Inc. (not to be used for signature guarantees)
EX-99.(A)(4) 6 a2096276zex-99_a4.htm EXHIBIT 99(A)(4)

Exhibit (a)(4)

Offer to Purchase for Cash
All Outstanding Shares of Common Stock

Triangle Pharmaceuticals, Inc.

$6.00 Net per Share

Simbolo Acquisition Sub, Inc.,
a wholly owned subsidiary of
Gilead Sciences, Inc.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JANUARY 15, 2003, UNLESS THE OFFER IS EXTENDED.

December 16, 2002

To Brokers, Dealers, Banks,
Trust Companies and other Nominees:

We have been engaged by Simbolo Acquisition Sub, Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Gilead Sciences, Inc., a Delaware corporation ("Gilead"), to act as the dealer manager (the "Dealer Manager") in connection with the Purchaser's offer to purchase all of the outstanding shares of common stock, par value $0.001 per share (the "Shares"), of Triangle Pharmaceuticals, Inc., a Delaware corporation ("Triangle"), at a price of $6.00 per share (the "Offer Price"), net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Purchaser's Offer to Purchase, dated December 16, 2002 (the "Offer to Purchase"), and in the Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). Please furnish copies of the enclosed materials to those of your clients for whom you hold Shares that are registered in your name or in the name of your nominee.

Holders of Shares who wish to tender their Shares but whose certificates for such Shares (the "Share Certificates") are not immediately available, who cannot complete the procedures for book-entry transfer on a timely basis, or who cannot deliver all other required documents to Mellon Investor Services LLC (the "Depositary") prior to the Expiration Date (as defined in the Offer to Purchase) of the Offer must tender their Shares according to the guaranteed delivery procedure set forth in the Offer to Purchase.

Enclosed herewith are copies of the following documents:

1. The Offer to Purchase dated December 16, 2002;

2. The Letter of Transmittal to be used by stockholders of Triangle to tender Shares in the Offer (manually signed facsimile copies of the Letter of Transmittal may also be used to tender Shares);

3. A letter to stockholders of Triangle from the Chief Executive Officer and the Chairman of Triangle's board of directors, accompanied by Triangle's Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission by Triangle which includes the recommendation of Triangle's board of directors that Triangle stockholders accept the Offer and tender their Shares to the Purchaser pursuant to the Offer;

4. A printed form of letter that may be sent to your clients for whose account you hold Shares that are registered in your name or in the name of your nominee, with space provided for obtaining such clients instructions with regard to the Offer;

5. Notice of Guaranteed Delivery to be used to accept the Offer if Share Certificates are not immediately available or if such certificates and all other required documents cannot be delivered to the Depositary or if the procedures for book-entry transfer cannot be completed on a timely basis;

6. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9; and

7. Return envelope addressed to Mellon Investor Services LLC as the Depositary for the Offer.

We urge you to contact your clients promptly. Please note that the Offer and withdrawal rights will expire at 12:00 midnight, New York City time, on January 15, 2003, unless the Offer is extended.

The Offer is conditioned upon, among other things, there being validly tendered in accordance with the terms of the Offer and not withdrawn prior to the Expiration Date (as defined in the Offer to Purchase) of the Offer, that number of Shares that, together with any shares of Triangle common stock then owned by Gilead or any wholly owned subsidiary of Gilead (including the Purchaser), represent a majority of the "Adjusted Outstanding Share Number", which is defined in the Merger Agreement as the sum of all then-outstanding shares of Triangle common stock, plus, at the election of Gilead, an additional number of shares of Triangle common stock up to but not exceeding the aggregate number of shares of Triangle common stock issuable upon the exercise of any outstanding option that is vested or is expected to become vested (other than by reason of the Merger) on or before June 1, 2003, or any warrant or other right to acquire capital stock of Triangle, or upon the conversion of any security convertible into Triangle capital stock. (The foregoing condition is referred to as the "Minimum Condition" in this Offer to Purchase). Certain of Triangle's directors and certain additional stockholders of Triangle have entered into stockholder agreements with Gilead and the Purchaser pursuant to which they have agreed, in their respective capacities as stockholders of Triangle, to tender all of their shares of Triangle common stock, as well as any additional shares of Triangle common stock which they may acquire (pursuant to Triangle stock options or otherwise), to the Purchaser in the Offer. The parties to certain of those stockholder agreements have also agreed to vote all of their shares of Triangle common stock in favor of adoption of the Merger Agreement and otherwise in favor of the Merger. As of December 3, 2002, the stockholders who executed stockholder agreements held in the aggregate 31,574,469 shares of Triangle common stock, which represented approximately 41% of the outstanding shares of Triangle common stock as of that date. Of such shares of Triangle common stock, 30,906,949 shares, which represented approximately 40% of the outstanding shares of Triangle common stock, were held by stockholders whose Stockholder Agreements also contained the voting provisions described above. The stockholder agreements provide that they terminate upon any termination of the Merger Agreement. The Offer is subject to certain other conditions contained in Sections 1 and 13 of the Offer to Purchase.

The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of December 3, 2002 (the "Merger Agreement"), by and among Gilead, the Purchaser and Triangle pursuant to which, following the purchase of shares of Triangle common stock in the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into Triangle (the "Merger"), with Triangle surviving the Merger as a wholly owned subsidiary of Gilead. As a result of the Merger, each outstanding Share (other than Shares owned by Gilead, the Purchaser, Triangle or any subsidiary of Gilead or Triangle, or by any stockholder of Triangle who is entitled to and

properly exercises appraisal rights under Delaware law) will be converted into the right to receive the price per Share paid in the Offer in cash, without interest thereon.

Triangle's board of directors has, at a meeting held on December 3, 2002, by the unanimous vote of all directors of Triangle, (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are in the best interests of Triangle and its stockholders, (ii) approved the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger and (iii) declared that the Merger Agreement is advisable. Accordingly, Triangle's board of directors unanimously recommends that the stockholders of Triangle accept the Offer and tender their shares of Triangle common stock to the Purchaser in the Offer and, if required, vote to adopt the Merger Agreement.

On the terms of and subject to the conditions to the Offer, promptly after the Expiration Date of the Offer, the Purchaser will accept for payment, and pay for, all Shares validly tendered to the Purchaser and not withdrawn prior to the Expiration Date of the Offer. To validly tender Shares in the Offer (i) the certificate(s) representing the tendered Shares, together with the Letter of Transmittal (or a facsimile copy of it), properly completed and duly executed, together with any required signature guarantees, and any other required documents, must be received by the Depositary prior to the Expiration Date of the Offer, (ii) in the case of a tender effected pursuant to the book-entry transfer procedures described in the Offer to Purchase (a) either the Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees, or an Agent's Message, (as defined in the Offer to Purchase), and any other required documents, must be received by the Depositary prior to the Expiration Date of the Offer and (b) the Shares to be tendered must be delivered pursuant to the book-entry transfer procedures described in the Offer to Purchase and a Book-Entry Confirmation (as defined in the Offer to Purchase), must be received by the Depositary prior to the Expiration Date of the Offer or (iii) the tendering stockholder must comply with the guaranteed delivery procedures described in the Offer to Purchase prior to the Expiration Date of the Offer.

Neither the Purchaser nor Gilead will pay any fees or commissions to any broker or dealer or other person (other than the Dealer Manager, the Depositary and Georgeson Shareholder Communications Inc., who is serving as the Information Agent for the Offer, as described in the Offer to Purchase) in connection with the solicitation of tenders of Shares in connection with the Offer. You will be reimbursed by the Purchaser upon request for customary mailing and handling expenses incurred by you in forwarding the enclosed materials to your customers. The Purchaser will pay or cause to be paid all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, except as otherwise provided in Instruction 6 of the Letter of Transmittal.

Questions regarding the Offer, and requests for additional copies of the enclosed material, may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers listed on the back cover of the Offer to Purchase.

Very truly yours,

Goldman, Sachs & Co.

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, GILEAD, THE DEALER MANAGER, THE DEPOSITARY OR THE INFORMATION AGENT OR AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER NOT CONTAINED IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL FOR THE OFFER.

EX-99.(A)(5) 7 a2096276zex-99_a5.htm EXHIBIT 99(A)(5)
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Exhibit (a)(5)

Offer to Purchase for Cash
All Outstanding Shares of Common Stock

Triangle Pharmaceuticals, Inc.

$6.00 Net per Share

Simbolo Acquisition Sub, Inc.,
a wholly owned subsidiary of
Gilead Sciences, Inc.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JANUARY 15, 2003, UNLESS THE OFFER IS EXTENDED.

December 16, 2002

To Our Clients:

Enclosed for your consideration is an Offer to Purchase, dated December 16, 2002 (the "Offer to Purchase"), and the Letter of Transmittal (which, together with amendments or supplements thereto, collectively constitute the "Offer") relating to the Offer by Simbolo Acquisition Sub, Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Gilead Sciences, Inc., a Delaware corporation ("Gilead"), to purchase all of the outstanding shares of common stock, par value $0.001 per share (the "Shares"), of Triangle Pharmaceuticals, Inc., a Delaware corporation ("Triangle"), at a price of $6.00 per share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer. Also enclosed for your consideration is a letter to the stockholders of Triangle from the Chairman and Chief Executive Officer of Triangle, accompanied by Triangle's Solicitation/Recommendation Statement on Schedule 14D-9.

We (or our nominees) are the holder of record of Shares held by us for your account. A tender of such Shares can be made only by us as the holder of record and pursuant to your instructions. The enclosed Letter of Transmittal is furnished to you for your information only and cannot be used to tender Shares held by us for your account.

We request instructions as to whether you wish to tender any or all of the Shares held by us for your account pursuant to the terms and conditions set forth in the Offer.

Your attention is directed to the following:

1. The offer price for the Offer is $6.00 per Share, net to the seller in cash (without interest thereon) (the "Offer Price"), upon the terms of and subject to the conditions to the Offer.

2. The Offer is being made for all outstanding Shares.

3. The Offer is conditioned upon, among other things, there being validly tendered in accordance with the terms of the Offer and not withdrawn prior to the Expiration Date (as defined below) of the Offer Shares that, together together with any shares of Triangle common stock then owned by Gilead or any wholly owned subsidiary of Gilead (including the Purchaser), represent a majority of the "Adjusted Outstanding Share Number", which is defined in the Merger Agreement as the sum of all then-outstanding shares of Triangle common stock, plus, at the election of Gilead, an additional number of shares of Triangle common stock up to

but not exceeding the aggregate number of shares of Triangle common stock issuable upon the exercise of any outstanding option that is vested or is expected to become vested (other than by reason of the Merger) on or before June 1, 2003, or any warrant or other right to acquire capital stock of Triangle, or upon the conversion of any convertible security. (The foregoing condition is referred to as the "Minimum Condition" in this Offer to Purchase). Certain of Triangle's directors and certain additional stockholders of Triangle have entered into stockholder agreements with Gilead and the Purchaser pursuant to which they have agreed, in their respective capacities as stockholders of Triangle, to tender all of their shares of Triangle common stock, as well as any additional shares of Triangle common stock which they may acquire (pursuant to Triangle stock options or otherwise), to the Purchaser in the Offer. The parties to certain of those stockholder agreements have also agreed to vote all of their shares of Triangle common stock in favor of the Merger, the execution and delivery by Triangle of the Merger Agreement and the adoption and approval of the Merger Agreement. The Offer is subject to certain other conditions contained in Sections 1 and 13 of the Offer to Purchase.

4. The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of December 3, 2002 (the "Merger Agreement"), by and among Gilead, the Purchaser and Triangle pursuant to which, following the purchase of shares of Triangle common stock in the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into Triangle (the "Merger"), with Triangle surviving the Merger as a wholly owned subsidiary of Gilead. As a result of the Merger, each outstanding Share (other than Shares owned by Gilead, the Purchaser, Triangle or any wholly owned subsidiary of Gilead or Triangle, or by any stockholder of Triangle who is entitled to and properly exercises appraisal rights under Delaware law) will be converted into the right to receive the price per Share paid in the Offer in cash, without interest thereon.

5. Triangle's board of directors has, at a meeting held on December 3, 2002, by the unanimous vote of all directors of Triangle, (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are in the best interests of Triangle and its stockholders, (ii) approved the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger and (iii) declared that the Merger Agreement is advisable. Accordingly, Triangle's board of directors unanimously recommends that the stockholders of Triangle accept the Offer and tender their shares of Triangle common stock to the Purchaser in the Offer and, if required, vote to adopt the Merger Agreement.

6. The Offer and withdrawal rights expire at 12:00 midnight, New York City time, on January 15, 2003 (the "Expiration Date"), unless the Offer is extended by the Purchaser, in which event the term Expiration Date shall mean the latest time at which the Offer, as so extended by the Purchaser, will expire.

7. Any stock transfer taxes applicable to a sale of Shares to the Purchaser will be borne by the Purchaser, except as otherwise set forth in Instruction 6 of the Letter of Transmittal.

8. Tendering stockholders will not be obligated to pay brokerage fees or commissions to the Dealer Manager, the Depositary or the Information Agent, or except as set forth in Instruction 6 of the Letter of Transmittal for the Offer, transfer taxes on the purchase of Shares by the Purchaser in the Offer. However, federal income tax backup withholding at a rate of 30% may be required, unless the required taxpayer identification information is provided or an exemption is available. See the Letter of Transmittal for the Offer for more information.

Your instructions to us should be forwarded promptly to permit us to submit a tender on your behalf prior to the Expiration Date of the Offer.

If you wish to have us tender any or all of the Shares held by us for your account, please so instruct us by completing, executing and returning to us the instruction form. An envelope to return your instructions to us is enclosed. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified on the detachable part hereof. Your instructions should be forwarded to us in ample time to permit us to submit a tender on your behalf prior to the Expiration Date of the Offer.

On the terms of and subject to the conditions to the Offer, promptly after the Expiration Date of the Offer, the Purchaser will accept for payment, and pay for, all Shares validly tendered to the Purchaser in the Offer and not withdrawn prior to the Expiration Date of the Offer. To validly tender Shares in the Offer (i) the certificate(s) representing the tendered Shares, together with the Letter of Transmittal (or a facsimile copy of it), properly completed and duly executed, together with any required signature guarantees and any other required documents, must be received by the Depositary for the Offer prior to the Expiration Date of the Offer, (ii) in the case of a tender effected pursuant to the book-entry transfer procedures described in the Offer to Purchase (a) either the Letter of Transmittal (or a facsimile copy of it), properly completed and duly executed, together with any required signature guarantees, or an Agent's Message described in the Offer to Purchase, and any other required documents, must be received by the Depositary for the Offer prior to the Expiration Date of the Offer and (b) the Shares to be tendered must be delivered pursuant to the book-entry transfer procedures described in the Offer to Purchase and a Book-Entry Confirmation described in the Offer to Purchase must be received by the Depositary for the Offer prior to the Expiration Date of the Offer or (iii) the tendering stockholder must comply with the guaranteed delivery procedures described in the Offer to Purchase prior to the Expiration Date of the Offer.

Under no circumstances will interest be paid on the purchase price of the Shares to be paid by the Purchaser, regardless of any extension of the Offer or any delay in making such payment.

The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. In those jurisdictions where securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of the Purchaser by Goldman, Sachs & Co., the Dealer Manager, or one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by the Purchaser.

INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
OF TRIANGLE PHARMACEUTICALS, INC.

The undersigned acknowledge(s) receipt of your letter, the Offer to Purchase of Simbolo Acquisition Sub, Inc., dated December 16, 2002 (the "Offer to Purchase"), and the Letter of Transmittal relating to shares of common stock, par value $0.001 per share (the "Shares"), of Triangle Pharmaceuticals, Inc., a Delaware corporation.

This will instruct you to tender the number of Shares indicated below (or, if no number is indicated below, all shares) held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer to Purchase and Letter of Transmittal.

Number of Shares to be Tendered(1):

		SIGN HERE
		Signature(s)


		Please Type or Print Name(s)


		Please Type or Print Address(es)


		Area Code and Telephone Number

		Taxpayer Identification or Social Security No.

Dated: , 200

(1): Unless otherwise indicated, it will be assumed that all your Shares are to be tendered.

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INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF TRIANGLE PHARMACEUTICALS, INC.
EX-99.(A)(6) 8 a2096276zex-99_a6.htm EXHIBIT 99(A)(6)
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Exhibit (a)(6)

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

Guidelines for Determining the Proper Identification Number for the Payee (You) to Give the Payer.

Social Security numbers have nine digits separated by two hyphens: e.g., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: e.g., 00-0000000. The table below will help determine the number to give the payer.


For this type of account:			Give the SOCIAL SECURITY number of	For this type of account:		Give the EMPLOYER IDENTIFICATION number of

1.	An individual's account		The individual	6.	Sole proprietorship account	The owner(3)
2.	Two or more individuals (joint account)		The actual owner of the account or, if combined funds, any one of the individuals(1)	7.	A valid trust, estate, or pension trust	The legal entity(4)
3.	Custodian account of a minor (Uniform Gift to Minors Act)		The minor(2)	8.	Corporate account	The corporation
4.	a.	The usual revocable savings trust account (grantor is also trustee)	The grantor-trustee(1)	9.	Partnership account held in the name of the business	The partnership
	b.	So-called trust account that is not a legal or valid trust under State law	The actual owner(1)	10.	Association, club, religious, charitable, educational or other tax-exempt organization	The organization
5.	Sole proprietorship account		The owner(3)	11.	A broker or registered nominee	The broker or nominee
				12.	Account with the Department of Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments	The public entity

(1): List first and circle the name of the person whose number you furnish.
(2): Circle the minor's name and furnish the minor's social security number.
(3): You must show your individual name but, you may also enter your business or "doing business as" name. You may use either your social security number or your employer identification number (if you have one).
(4): List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)

Note: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed.

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2

Obtaining a Number

If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service (IRS) and apply for a number.

Payees Exempt From Backup Withholding

Payees specifically exempted from backup withholding on ALL payments include the following:

•: A corporation.
•: A financial institution.
•: An organization exempt from tax under Section 501(a), or an individual retirement plan.
•: The United States or any agency or instrumentality thereof.
•: A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof.
•: A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof.
•: An international organization or any agency, or instrumentality thereof.
•: A registered dealer in securities or commodities registered in the United States or a possession of the United States.
•: A real estate investment trust.
•: A common trust fund operated by a bank under Section 584(a).
•: An exempt charitable remainder trust, or a non-exempt trust described in Section 4947(a)(1).
•: An entity registered at all times under the investment Company Act of 1940.
•: A foreign central bank of issue.

Payments of dividends and patronage dividends not generally subject to backup withholding include the following:

•: Payments to nonresident aliens subject to withholding under Section 1441.
•: Payments to partnerships not engaged in a trade or business in the United States and which have at least one nonresident alien partner.
•: Payments of patronage dividends where the amount received is not paid in money.
•: Payments made by certain foreign organizations.
•: Payments made to a nominee.

Payments of interest not generally subject to backup withholding include the following:

•: Payments of interest on obligations issued by individuals.

Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payers trade or business and you have not provided your correct taxpayer identification number to the payer.

•: Payments of tax-exempt interest (including exempt-interest dividends under Section 852).
•: Payments described in Section 6049(b)(5) to nonresident aliens.
•: Payments on tax-free covenant bonds under Section 1451.
•: Payments made by certain foreign organizations.
•: Payments made to a nominee.

Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE EXEMPT ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.

Certain payments other than interest dividends, and patronage dividends, that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A.

Privacy Act Notice. Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 30% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply.

Penalties

(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500.

(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE.

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GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 Page 2
EX-99.(A)(7) 9 a2096276zex-99_a7.txt EXHIBIT 99(A)(7) EXHIBIT (a)(7) [LOGO] GILEAD CONTACTS: TRIANGLE CONTACTS: Susan Hubbard, Investors Daniel G. Welch (650) 522-5715 (919) 402-1111 Amy Flood, Media R. Andrew Finkle (650) 522-5643 (919) 493-5980 FOR IMMEDIATE RELEASE GILEAD SCIENCES TO ACQUIRE TRIANGLE PHARMACEUTICALS FOR $464 MILLION GILEAD TO LAUNCH COVIRACIL(R) IN 2003 WILL DEVELOP CO-FORMULATION OF VIREAD(R) AND COVIRACIL FOSTER CITY, CA AND DURHAM, NC, DECEMBER 4, 2002 - Gilead Sciences, Inc. (Nasdaq: GILD) and Triangle Pharmaceuticals, Inc. (Nasdaq: VIRS) today announced that they have signed a definitive agreement under which Gilead plans to acquire Triangle. The transaction has been structured as a two-step acquisition comprised of a cash tender offer for all of the outstanding Triangle common stock at $6.00 per share, followed by a cash merger in which Gilead would acquire any remaining outstanding Triangle common stock at $6.00 per share. The value of the transaction is approximately $464 million. The deal is expected to be dilutive to earnings in 2003, neutral in 2004 and accretive in 2005 and beyond. The tender offer is subject to various conditions, including the tender of at least a majority of the shares of Triangle common stock in the tender offer and the receipt of clearance under the Hart-Scott-Rodino Antitrust Improvements Act. Gilead and Triangle expect the tender offer to close in the first half of 2003. "As a company dedicated to advancing therapeutics against life-threatening infectious diseases, Gilead has a strong scientific and strategic rationale for the acquisition of Triangle. Our focus in infectious diseases has enabled us to successfully launch Viread(R) (tenofovir disoproxil fumarate) and Hepsera(TM) (adefovir dipivoxil) in the United States within the span of one year. We believe Triangle's product portfolio offers important synergies and opportunities for growth while allowing us to leverage the infrastructure, capabilities and relationships with HIV and hepatitis B-treating physicians that we have built around the world," commented John C. Martin, PhD, President and CEO, Gilead Sciences. "Together, our combined organization is well positioned to successfully launch Coviracil(R) (emtricitabine, FTC) into the competitive HIV marketplace." "The Triangle team has built a portfolio of products with great potential for patients suffering from HIV disease and chronic hepatitis B," said Daniel G. Welch, Chairman and CEO, Triangle Pharmaceuticals. "Gilead has recognized this potential and brings the experience of its team to ours, allowing us to more fully realize the potential of Coviracil and our other compounds in development. This transaction validates the oustanding accomplishments and the value created by the Triangle team." - more - December 4, 2002 Page 2 STRENGTHENED ANTIVIRAL FRANCHISE Triangle's pipeline of products includes the antiviral Coviracil, a one pill, once daily nucleoside analogue for the treatment of HIV and for which Triangle filed a New Drug Application with the U.S. Food and Drug Administration in September 2002. Triangle expects to file a Marketing Authorisation Application in Europe before the end of the year. In addition to pursuing the commercialization of Coviracil as a single agent, Gilead plans to immediately initiate development of a co-formulation of Viread and Coviracil as a potential fixed-dose combination treatment for patients with HIV. Coviracil also is being evaluated in a Phase III study for patients with chronic hepatitis B. The Triangle portfolio includes amdoxovir (DAPD), a nucleoside analogue in Phase II clinical studies for the treatment of HIV, and clevudine (L-FMAU), a nucleoside analogue in Phase I/II studies for the treatment of chronic hepatitis B. Gilead's current product portfolio includes six commercially available products, four of which are antivirals. These include Viread for the treatment of HIV, marketed exclusively by Gilead; Hepsera for the treatment of chronic hepatitis B, for which Gilead has retained rights in the United States, Canada, Europe, Australia and New Zealand and for which GlaxoSmithKline has licensed rights in Asia, Latin America and select other territories; Vistide(R) (cidofovir injection) for the treatment of cytomegalovirus retinitis, marketed in the United States by Gilead and internationally by Pharmacia Corporation; and Tamiflu(R) (oseltamivir phosphate) for the treatment and prevention of influenza, marketed worldwide by Hoffmann-La Roche. Gilead also markets AmBisome(R) (amphotericin B) liposome for injection internationally and with Fujisawa Healthcare in the United States and markets DaunoXome(R) (daunorubicin citrate liposome injection) worldwide. TERMS OF THE TRANSACTION The definitive agreement provides that Gilead will commence a two-step acquisition comprised of a cash tender offer for all outstanding Triangle common stock at $6.00 per share, followed by a cash merger in which Gilead would acquire any remaining outstanding Triangle common stock at $6.00 per share. Upon completion of the second-step merger, Triangle will become a wholly owned subsidiary of Gilead. In connection with this transaction, Gilead is providing to Triangle $50 million of interim financing for working capital needs in exchange for a convertible note. Up to $30 million of this loan may become forgivable under certain circumstances. The Board of Directors of Triangle has voted to recommend the tender offer and the merger to its stockholders. Gilead does not anticipate any changes to its Board of Directors or senior management team as a result of the transaction. Goldman, Sachs & Co. is acting as financial advisor to Gilead; Banc of America Securities LLC is representing Triangle. CONFERENCE CALL Gilead will host a conference call today, December 4, 2002, at 9:00 a.m. Eastern Time. To access the live call, please dial 1-800-967-7185 (U.S.) or 1-719-457-2634 (international). Telephone replay is available approximately one hour after the call through 7:00 p.m. Eastern Time, December 7, 2002. To access, please call 1-888-203-1112 (U.S.) or 1-719-457-0820 (international). The conference ID number is 366111. The information provided on the teleconference is only accurate at the time of the conference call, and Gilead will take no responsibility for providing updated information. ABOUT TRIANGLE PHARMACEUTICALS Triangle Pharmaceuticals, Inc. is a specialty pharmaceutical company engaged in the development of new antiviral drug candidates, with a particular focus on therapies for the human immunodeficiency virus (HIV) and the hepatitis B virus. Triangle's proprietary drug candidates under development for HIV and/or hepatitis B include Coviracil(R) (emtricitabine), amdoxovir (formerly DAPD) and clevudine (formerly L-FMAU). - more - December 4, 2002 Page 3 ABOUT GILEAD SCIENCES Gilead Sciences is a biopharmaceutical company that discovers, develops and commercializes therapeutics to advance the care of patients suffering from life-threatening diseases worldwide. The company has six marketed products and focuses its research and clinical programs on anti-infectives. Headquartered in Foster City, CA, Gilead has operations in the United States, Europe and Australia. This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those referred to in the forward-looking statements. These risks include the risk to both companies that the acquisition of Triangle by Gilead contemplated in the definitive acquisition agreement will not be consummated. In addition, statements in this press release relating to the expected benefits of the contemplated acquisition are subject to the risk that the products and employees of Gilead and Triangle will not be integrated successfully, that Triangle's products in development will not receive regulatory approvals or market acceptance, risks associated with Gilead's ability to develop a co-formulation of Viread and Coviracil, and the general risks associated with the respective businesses of Gilead and Triangle as described in the reports and other documents filed by each of them with the Securities and Exchange Commission. The reader is cautioned not to rely on these forward-looking statements. All forward-looking statements are based on information currently available to Gilead and Triangle, and neither Gilead nor Triangle assumes any obligation to update any forward-looking statement or other statement included in this press release. ADDITIONAL INFORMATION AND WHERE TO FIND IT This announcement is neither an offer to purchase nor a solicitation of an offer to sell Triangle shares. The tender offer will only be made through an offer to purchase, letter of transmittal and related tender offer materials. At the time the expected tender offer is commenced, Gilead will file these tender offer materials with the Securities and Exchange Commission and Triangle will file a solicitation/recommendation statement with respect to the offer. The tender offer materials and the solicitation/recommendation statement will contain important information. Stockholders are urged to read this information carefully before making any decisions about the tender offer. The tender offer materials, certain other offer materials, and the solicitation/recommendation statement will be sent free of charge to all stockholders of Triangle. All of these materials will also be available free of charge at the SEC's website at www.sec.gov. # # # FOR MORE INFORMATION ON GILEAD SCIENCES, PLEASE CALL THE GILEAD PUBLIC AFFAIRS DEPARTMENT AT 1-800-GILEAD-5 (1-800-445-3235) OR VISIT WWW.GILEAD.COM. FOR MORE INFORMATION ON TRIANGLE PHARMACEUTICALS, PLEASE CALL 1-919-493-5980 OR VISIT WWW.TRIPHARM.COM. EX-99.(A)(8) 10 a2096276zex-99_a8.txt EXHIBIT 99(A)(8) EXHIBIT (a)(8) THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER TO SELL SHARES OF TRIANGLE PHARMACEUTICALS, INC. COMMON STOCK. THE OFFER (AS DEFINED BELOW) DESCRIBED HEREIN IS MADE SOLELY BY THE OFFER TO PURCHASE DATED DECEMBER 16, 2002, AND THE RELATED LETTER OF TRANSMITTAL AND ANY AMENDMENTS OR SUPPLEMENTS THERETO, EACH OF WHICH IS BEING DELIVERED TO HOLDERS OF TRIANGLE COMMON STOCK. THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS OF SHARES OF TRIANGLE COMMON STOCK IN ANY JURISDICTION IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION OR ANY ADMINISTRATIVE OR JUDICIAL ACTION PURSUANT THERETO. THE PURCHASER (AS DEFINED BELOW) MAY, IN ITS DISCRETION, TAKE SUCH ACTION AS IT MAY DEEM NECESSARY TO MAKE THE OFFER IN ANY JURISDICTION AND EXTEND THE OFFER TO HOLDERS OF SHARES OF TRIANGLE COMMON STOCK IN SUCH JURISDICTION. IN THOSE JURISDICTIONS WHERE SECURITIES, BLUE SKY OR OTHER LAWS REQUIRE THE OFFER TO BE MADE BY A LICENSED BROKER OR DEALER, THE OFFER WILL BE DEEMED TO BE MADE ON BEHALF OF THE PURCHASER BY GOLDMAN, SACHS & CO., THE DEALER MANAGER FOR THE OFFER, OR BY ONE OR MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER THE LAWS OF SUCH JURISDICTION TO BE DESIGNATED BY THE PURCHASER. NOTICE OF OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF TRIANGLE PHARMACEUTICALS, INC. BY SIMBOLO ACQUISITION SUB, INC., A WHOLLY OWNED SUBSIDIARY OF GILEAD SCIENCES, INC. AT $6.00 NET PER SHARE Simbolo Acquisition Sub, Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Gilead Sciences, Inc., a Delaware corporation ("Gilead"), is offering to purchase all of the outstanding shares of common stock, par value $0.001 per share, of Triangle Pharmaceuticals, Inc., a Delaware corporation ("Triangle"), at a price of $6.00 per share, net to the seller in cash, without interest thereon (the "Offer Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 16, 2002 (the "Offer to Purchase"), and the related Letter of Transmittal which, together with any amendments or supplements thereto, collectively constitute the "Offer" described herein. Tendering Triangle stockholders whose shares of Triangle common stock are registered in their own names and who tender their shares directly to Mellon Investor Services LLC (the "Depositary") will not be obligated to pay brokerage fees or commissions in connection with the Offer or, except as set forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the sale of shares in the Offer. Stockholders of Triangle who hold their shares of Triangle common stock through brokers, dealers, banks, trust companies or other nominees should consult with such institutions to determine whether they will charge any service fees for tendering such stockholder's shares to the Purchaser in the Offer. The Purchaser is offering to acquire all of the shares of Triangle common stock as a first step in Gilead acquiring the entire equity interest in, and thus control of, Triangle. Following the purchase of shares of Triangle common stock in the Offer, the Purchaser intends to complete the Merger described below to enable Gilead to acquire all of the outstanding shares of Triangle common stock that are not tendered to and accepted for payment by the Purchaser in the Offer. ================================================================================ THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON JANUARY 15, 2003, UNLESS THE OFFER IS EXTENDED. ================================================================================ The Offer is conditioned upon, among other things, there being validly tendered and not withdrawn in accordance with the terms of the Offer prior to the Expiration Date (as defined below) of the Offer shares of Triangle common stock that, together with any shares of Triangle common stock then owned by Gilead or any wholly owned subsidiary of Gilead (including the Purchaser), represent a majority of the "Adjusted Outstanding Share Number", which is defined in the Merger Agreement as the sum of all then-outstanding shares of Triangle common stock, plus, at the election of Gilead, an additional number of shares of Triangle common stock up to but not exceeding the aggregate number of shares of Triangle common stock issuable upon the exercise of any outstanding option that is vested or is expected to become vested (other than by reason of the Merger) on or before June 1, 2003, or any warrant or other right to acquire capital stock of Triangle, or upon the conversion of any convertible security. The foregoing condition is referred to as the "Minimum Condition" in this Offer to Purchase. Certain of Triangle's directors and certain additional stockholders of Triangle have entered into stockholder agreements with Gilead and the Purchaser pursuant to which they have agreed, in their respective capacities as stockholders of Triangle, to tender all of their shares of Triangle common stock, as well as any additional shares of Triangle common stock which they may acquire (pursuant to Triangle stock options or otherwise), to the Purchaser in the Offer. The parties to certain of those stockholder agreements have also agreed to vote all of their shares of Triangle common stock in favor of the Merger, the execution and delivery by Triangle of the Merger Agreement and the adoption and approval of the Merger Agreement. As of December 3, 2002, the stockholders who executed stockholder agreements held in the aggregate 31,574,469 shares of Triangle common stock, which represented approximately 41% of the outstanding shares of Triangle common stock as of that date. The stockholder agreements provide that they terminate upon any termination of the Merger Agreement. The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of December 3, 2002, by and among Gilead, the Purchaser and Triangle (the "Merger Agreement"), pursuant to which, following the purchase of shares of Triangle common stock in the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into Triangle (the "Merger"), with Triangle surviving the Merger as a wholly owned subsidiary of Gilead. Upon the completion of the Merger, each outstanding share of Triangle common stock (other than shares owned by Gilead, the Purchaser, Triangle or any wholly owned subsidiary of Gilead or Triangle, or by any stockholder of Triangle who is entitled to and properly exercises appraisal rights under Delaware law) will be converted into the right to receive the price per share paid in the Offer in cash, without interest thereon. TRIANGLE'S BOARD OF DIRECTORS HAS, AT A MEETING HELD ON DECEMBER 3, 2002, BY THE UNANIMOUS VOTE OF ALL DIRECTORS OF TRIANGLE, (i) DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, ARE IN THE BEST INTERESTS OF TRIANGLE AND ITS STOCKHOLDERS, (ii) APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER AND (iii) DECLARED THAT THE MERGER AGREEMENT IS ADVISABLE. ACCORDINGLY, TRIANGLE'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF TRIANGLE ACCEPT THE OFFER AND TENDER THEIR SHARES OF TRIANGLE COMMON STOCK TO THE PURCHASER IN THE OFFER AND, IF REQUIRED, VOTE TO ADOPT THE MERGER AGREEMENT. On the terms of and subject to the conditions to the Offer, promptly after the Expiration Date of the Offer, the Purchaser will accept for payment, and pay for, all shares of Triangle common stock validly tendered to the Purchaser in the Offer and not withdrawn prior to the Expiration Date of the Offer. The Purchaser will be deemed to have accepted for payment, and thereby purchased, shares of Triangle common stock that are validly tendered in the Offer and not withdrawn prior to the Expiration Date of the Offer as, if and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance for payment of such shares. Payment for shares of Triangle common stock that are accepted for payment in the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for stockholders tendering shares in the Offer for the purpose of receiving payment from the Purchaser and transmitting payment to such stockholders whose shares of Triangle common stock have been accepted for payment in the Offer. For a stockholder to validly tender shares of Triangle common stock in the Offer (i) the certificate(s) representing the tendered shares, together with the Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees and any other required documents, must be received by the Depositary prior to the Expiration Date of the Offer, (ii) in the case of a tender effected pursuant to the book-entry transfer procedures (a) either a Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees, or an Agent's Message (as defined in Section 2 of the Offer to Purchase), and any other required documents, must be received by the Depositary prior to the Expiration Date of the Offer and (b) the shares to be tendered must be delivered pursuant to the book-entry transfer procedures described in the Offer to Purchase and a Book-Entry Confirmation (as defined in Section 2 of the Offer to Purchase) must be received by the Depositary prior to the Expiration Date of the Offer or (iii) the tendering stockholder must comply with the guaranteed delivery procedures described in the Offer to Purchase prior to the Expiration Date of the Offer. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE FOR SHARES OF TRIANGLE COMMON STOCK THAT ARE TENDERED IN THE OFFER, REGARDLESS OF ANY EXTENSION OF, OR AMENDMENT TO, THE OFFER OR ANY DELAY IN PAYING FOR SUCH SHARES. For purposes of the Offer and as used herein and in the Offer to Purchase, the term "Expiration Date" means 12:00 midnight, New York City time, on January 15, 2003, unless and until the Purchaser extends the period of time during which the Offer is open in accordance with the terms of the Merger Agreement, in which event the term "Expiration Date" will mean the latest time at which the Offer, as so extended by the Purchaser, will expire. Under the terms of the Merger Agreement, upon the written request of Triangle prior to January 15, 2003, the Purchaser is obligated to extend the Offer, by giving oral or written notice of such extension to the Depositary, for such period of time (not more than 15 business days) as Triangle reasonably requests if the Minimum Condition or any other condition provided for in the Merger Agreement (the "Offer Conditions") has not been satisfied or waived by 12:00 midnight, Eastern Standard Time, on January 15, 2003, the initial Expiration Date of the Offer. In addition, if on any subsequent date as of which the Offer is scheduled to expire, any of the Offer Conditions has not been satisfied or waived, the Purchaser shall, if Triangle so requests in writing prior to the then-scheduled Expiration Date of the Offer, extend the Offer from time to time for such period of time (but in each case not more than 15 business days) as Triangle reasonably requests. If the Purchaser extends the Offer, the Purchaser will inform the Depositary of that fact and will make a public announcement of the extension not later than 9:00 a.m., Eastern Standard Time, on the next business day after the previously scheduled Expiration Date of the Offer. During any such extension, all shares of Triangle common stock previously tendered and not withdrawn will remain subject to the Offer, subject to the right of a tendering stockholder to withdraw such shares. Shares of Triangle common stock that are tendered in the Offer may be withdrawn pursuant to the procedures described in the Offer to Purchase at any time prior to the Expiration Date of the Offer, and shares that are tendered may also be withdrawn at any time after February 14, 2003 unless accepted for payment on or before that date. In the event that the Purchaser provides for a subsequent offering period following the successful completion of the Offer, (i) no withdrawal rights will apply to shares tendered during such subsequent offering period and (ii) no withdrawal rights will apply to shares that were previously tendered in the Offer and accepted for payment. For a withdrawal of shares of Triangle common stock previously tendered in the Offer to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses listed on the back cover of the Offer to Purchase, specifying the name of the person having tendered the shares to be withdrawn, the number of shares to be withdrawn and the name of the registered holder of the shares to be withdrawn, if different from the name of the person who tendered the shares. If certificates for shares have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and, unless such shares have been tendered by a financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agent's Medallion Program, Nasdaq Stock Market Medallion Signature Guarantee Program or the Stock Exchange Medallion Program (each an "Eligible Institution"), any and all signatures on the notice of withdrawal must be guaranteed by an Eligible Institution. If shares have been tendered pursuant to the book-entry transfer procedures described in Section 2 of the Offer to Purchase, any notice of withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility (as defined in Section 2 of the Offer to Purchase) to be credited with the withdrawn shares and otherwise comply with the Book-Entry Transfer Facility's procedures. Withdrawals of tenders of shares may not be rescinded, and any shares withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. Withdrawn shares may be re-tendered in the Offer, however, by following one of the procedures described in Section 2 of the Offer to Purchase at any time prior to the Expiration Date of the Offer. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by the Purchaser in its sole discretion, which determination will be final and binding. None of the Purchaser, Gilead, Triangle, Goldman, Sachs & Co., the dealer manager for the Offer (the "Dealer Manager"), the Depositary, Georgeson Shareholder Communciations Inc., the information agent for the Offer (the "Information Agent"), or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Under Rule 14d-11 of the Securities Exchange Act of 1934, as amended, and subject to conditions described in the Offer to Purchase, the Purchaser may elect to provide for a subsequent offering period, immediately following the Expiration Date of the Offer, of not less than three business days nor more than twenty business days in length. If provided, a subsequent offering period would be an additional period of time, following the Expiration Date of the Offer and the acceptance for payment of, and the payment for, any shares of Triangle common stock that are validly tendered in the Offer and not withdrawn prior to the Expiration Date of the Offer, during which holders of shares of Triangle common stock that were not previously tendered in the Offer may tender such shares to the Purchaser in exchange for the Offer Price on the same terms that applied to the Offer. A subsequent offering period is not the same as an extension of the Offer, which will have been previously completed if a subsequent offering period is provided. The Purchaser will accept for payment, and pay for, any shares of Triangle common stock that are validly tendered to the Purchaser during a subsequent offering period, if provided, as promptly as practicable after any such shares are validly tendered to the Purchaser during such subsequent offering period, for the same price paid to holders of shares of Triangle common stock that were validly tendered in the Offer and not withdrawn prior to the Expiration Date of the Offer, net to the holders thereof in cash. Holders of shares of Triangle common stock that are validly tendered to the Purchaser during a subsequent offering period, if provided, will not have the right to withdraw such tendered shares. Triangle has provided the Purchaser with a list, and security position listings, of Triangle's stockholders for the purpose of disseminating the Offer to holders of shares of Triangle common stock. The Offer to Purchase, and the Letter of Transmittal and other materials related to the Offer will be mailed to record holders of shares of Triangle common stock, and will be furnished to brokers, dealers, banks, trust companies and other nominees whose names, or the names of whose nominees, appear on the list of Triangle's stockholders, or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of shares of Triangle common stock. The receipt of cash in the Offer or the Merger will be a taxable transaction for United States federal income tax purposes under the Internal Revenue Code of 1986, as amended, and may also be a taxable transaction under applicable state, local or foreign income or other tax laws. Generally, for U.S. federal income tax purposes, a U.S. stockholder tendering shares of Triangle common stock in the Offer will recognize gain or loss equal to the difference between the amount of cash received by the stockholder in the Offer or the Merger and the stockholder's aggregate adjusted tax basis in the shares tendered by the stockholder and accepted for payment in the Offer or converted into cash in the Merger, as the case may be. If shares of Triangle common stock that are tendered in the Offer are held by a tendering U.S. stockholder as capital assets, gain or loss recognized by such stockholder will be capital gain or loss, which will be long-term capital gain or loss if such stockholder's holding period for such shares exceeds one year. All stockholders should consult with their own tax advisors as to the particular tax consequences of the Offer and the Merger to them, including the applicability and effect of the alternative minimum tax and any state, local or foreign income and other tax laws and of changes in such tax laws. For a more complete description of certain U.S. federal income tax consequences of the Offer and the Merger, see Section 5 of the Offer to Purchase. The Purchaser expressly reserves the right (but shall not be obligated), at any time and from time to time, to increase the Offer Price or to make any other changes in the terms of and conditions to the Offer, subject to the terms of the Merger Agreement, which provides that certain conditions may not be waived and certain modifications may not be made without the consent of Triangle. The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. THE OFFER TO PURCHASE AND LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION AND SHOULD BE READ CAREFULLY AND IN THEIR ENTIRETY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. Questions regarding the Offer, and requests for assistance in connection with the Offer, may be directed to the Dealer Manager or the Information Agent as set forth below. Requests for copies of the Offer to Purchase, the Letter of Transmittal and all other materials related to the Offer may be directed to the Information Agent or the Dealer Manager, as set forth below, or brokers, dealers, banks, trust companies or other nominees, and copies will be furnished promptly at the Purchaser's expense. No fees or commissions will be payable to brokers, dealers or other persons (other than the Dealer Manager and Information Agent, as described in the Offer to Purchase) for soliciting tenders of shares of Triangle common stock in the Offer. THE INFORMATION AGENT FOR THE OFFER IS: GEORGESON SHAREHOLDER COMMUNICATIONS INC. 17 STATE STREET, 10TH FLOOR NEW YORK, NY 10004 BANKS AND BROKERS CALL COLLECT: (212) 440-9800 ALL OTHERS CALL TOLL FREE: (866) 295-4328 THE DEALER MANAGER FOR THE OFFER IS: GOLDMAN, SACHS & CO. 85 BROAD STREET NEW YORK, NEW YORK 10004 CALL COLLECT: (212) 902-1000 CALL TOLL FREE: (800) 323-5678 December 16, 2002 ================================================================================ EX-99.(D)(1) 11 a2096276zex-99_d1.txt EXHIBIT 99(D)(1) EXHIBIT (d)(1) AGREEMENT AND PLAN OF MERGER THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made and entered into as of December 3, 2002, by and among: GILEAD SCIENCES, INC., a Delaware corporation ("Parent"); SIMBOLO ACQUISITION SUB, INC., a Delaware corporation and a wholly owned subsidiary of Parent ("Acquisition Sub"); and TRIANGLE PHARMACEUTICALS, INC., a Delaware corporation (the "Company"). Certain capitalized terms used in this Agreement are defined in Annex I. RECITALS A. The boards of directors of Parent, Acquisition Sub and the Company have determined that it is in the best interests of their respective stockholders for Parent to acquire the Company upon the terms and subject to the conditions set forth in this Agreement. B. In furtherance of the acquisition of the Company by Parent, it is proposed: (i) that Acquisition Sub make a cash tender offer for any and all of the outstanding shares of Company Common Stock at a price of $6.00 per share (such dollar amount, or any greater dollar amount per share paid pursuant to the Offer, subject to adjustment pursuant to Section 1.1(e), being referred to in this Agreement as the "Offer Price"), net to the seller in cash, upon the terms and subject to the conditions set forth in this Agreement (such cash tender offer, as it may be amended from time to time, being referred to in this Agreement as the "Offer"); and (ii) that, after acquiring shares of Company Common Stock pursuant to the Offer, Acquisition Sub merge with and into the Company upon the terms and subject to the conditions set forth in this Agreement (the merger of Acquisition Sub into the Company being referred to in this Agreement as the "Merger"). C. The board of directors of the Company has: (i) determined that this Agreement and the transactions contemplated by this Agreement, including the Offer and the Merger, are in the best interests of the Company's stockholders; and (ii) resolved to recommend that the stockholders of the Company accept the Offer, tender their shares pursuant to the Offer and (if required by applicable law) adopt this Agreement. D. In order to induce Parent and Acquisition Sub to enter into this Agreement and to consummate the transactions contemplated by this Agreement, concurrently with the execution and delivery of this Agreement, certain stockholders of the Company are executing Stockholder Agreements in favor of Parent and Acquisition Sub (the "Stockholder Agreements"). E. In order to induce the Company to enter into this Agreement, Parent is agreeing to loan to the Company the sum of $50,000,000 and, in connection therewith, the Company and Parent will execute and deliver a Convertible Promissory Note in the form attached as Exhibit A (the "Promissory Note") and an Investor Rights Agreement in the form attached as Exhibit B (the "Investor Rights Agreement," and, together with the Promissory Note, the "Financing Documents"). 1. AGREEMENT The parties to this Agreement, intending to be legally bound, agree as follows: SECTION 1. THE OFFER 1.1 CONDUCT OF THE OFFER. (a) Provided that each of the conditions set forth in clauses "(b)," "(c)," "(e)" and "(f)" of Annex II are satisfied as of the commencement of the Offer, Parent shall cause Acquisition Sub to commence (within the meaning of Rule 14d-2 under the Exchange Act) the Offer as promptly as practicable after the date of this Agreement, and in any event (provided that the Company has fulfilled its obligation to provide information to Parent and Acquisition Sub on a timely basis as contemplated by Section 1.1(d)) Parent shall use reasonable efforts to cause Acquisition Sub to commence the Offer within ten business days after the date of this Agreement. (b) The obligation of Acquisition Sub to accept for payment and to pay for any shares of Company Common Stock validly tendered pursuant to the Offer shall be subject to (i) the condition that there shall be validly tendered (and not withdrawn) a number of shares of Company Common Stock that, together with any shares of Company Common Stock owned by Parent or any wholly-owned Subsidiary of Parent immediately prior to the acceptance for payment of shares of Company Common Stock pursuant to the Offer, represents more than fifty (50) percent of the Adjusted Outstanding Share Number (the "Minimum Condition") and (ii) the other conditions set forth in Annex II. (The Minimum Condition and the other conditions set forth in Annex II are referred to collectively in this Agreement as the "Offer Conditions.") Acquisition Sub expressly reserves the right, in its sole discretion, to increase the Offer Price and to waive or make any other changes to the terms and conditions of the Offer; PROVIDED, HOWEVER, that without the prior written consent of the Company: (i) the Minimum Condition may not be amended or waived; and (ii) no change may be made to the Offer that (A) changes the form of consideration to be paid pursuant to the Offer, (B) decreases the Offer Price or the number of shares of Company Common Stock sought to be purchased in the Offer, (C) imposes conditions to the Offer in addition to the Offer Conditions, (D) except as provided in Section 1.1(c), extends the expiration date of the Offer beyond the initial expiration date of the Offer or (E) amends any other term of the Offer in a manner adverse to the holders of Company Common Stock. Subject to the terms and conditions of the Offer and this Agreement, Parent shall cause Acquisition Sub to, and Acquisition Sub shall, accept for payment all shares of Company Common Stock validly tendered pursuant to the Offer (and not withdrawn) as soon as practicable after Acquisition Sub is permitted to do so under applicable Legal Requirements, and Parent shall cause Acquisition Sub to pay for such shares promptly thereafter, and in any event in compliance with Rule 14e-1(c) under the Exchange Act. Parent shall provide, or cause to be provided to Acquisition Sub, on a timely basis, the funds necessary to pay for any shares of Company Common Stock that Acquisition Sub accepts or is obligated to accept for payment pursuant to the Offer. (c) The Offer shall initially be scheduled to expire 20 business days following the date of the commencement thereof. Notwithstanding anything to the contrary contained in this Agreement, but subject to the parties' respective termination rights under 2. Section 8.1: (i) if, on any date as of which the Offer is scheduled to expire, any Offer Condition has not been satisfied or waived, Acquisition Sub may, in its discretion (and without the consent of the Company or any other Person), extend the Offer from time to time for such period of time as Acquisition Sub reasonably determines to be necessary to permit such Offer Condition to be satisfied; (ii) if, on any date as of which the Offer is scheduled to expire, any Offer Condition has not been satisfied or waived, Acquisition Sub shall, if the Company so requests in writing prior to the then-scheduled expiration date of the Offer, extend the Offer from time to time for such period of time (but in each case not more than 15 business days) as the Company reasonably requests; (iii) Acquisition Sub may, in its discretion (and without the consent of the Company or any other Person), extend the Offer from time to time for any period of time required by any rule or regulation of the SEC applicable to the Offer; (iv) if, on any date as of which the Offer is scheduled to expire, the Minimum Condition has been satisfied but the sum of the number of shares of Company Common Stock that have been validly tendered pursuant to the Offer (and not withdrawn) plus the number of shares of Company Common Stock owned by Parent or any wholly-owned Subsidiary of Parent is less than 90% of the number of shares of Company Common Stock outstanding, then Acquisition Sub may, in its discretion (and without the consent of the Company or any other Person), extend the offer for an additional period of not more than ten business days; and (v) Acquisition Sub may, in its discretion (and without the consent of the Company or any other Person), elect to provide for a subsequent offering period (and one or more extensions thereof) in accordance with Rule 14d-11 under the Exchange Act and in compliance with all other provisions of applicable securities laws. (d) On the date of commencement of the Offer, Parent and Acquisition Sub shall (i) file with the SEC a Tender Offer Statement on Schedule TO with respect to the Offer, which will contain or incorporate by reference the offer to purchase shares of Company Common Stock pursuant to the Offer (the "Offer to Purchase") and the forms of related letter of transmittal and summary advertisement and (ii) cause the Offer to Purchase and related documents to be disseminated to holders of shares of Company Common Stock in accordance with all applicable Legal Requirements. (Said Tender Offer Statement on Schedule TO and all exhibits, amendments and supplements thereto are referred to collectively in this Agreement as the "Offer Documents.") Parent and Acquisition Sub shall use reasonable efforts to cause the Offer Documents to comply in all material respects with the Exchange Act and the rules and regulations thereunder. Each of Parent, Acquisition Sub and the Company shall use reasonable efforts to respond promptly to any comments of the SEC or its staff with respect to the Offer Documents or the Offer, to correct promptly any information provided by it for use in the Offer Documents if and to the extent that such information shall have become false or misleading in any material respect, and to take all steps necessary to cause the Offer Documents, as supplemented or amended to correct such information, to be filed with the SEC and to be disseminated to holders of shares of Company Common Stock to the extent required by applicable federal securities laws. The Company shall promptly furnish to Parent and Acquisition Sub all information concerning the Acquired Corporations and the Company's stockholders that may be required or reasonably requested in connection with any action contemplated by this Section 1.1(d). The Company and its counsel shall be given reasonable opportunity to review and comment on the Offer Documents prior to the filing thereof with the SEC. Parent and Acquisition Sub shall provide the Company and its counsel with any comments Parent, Acquisition Sub or their counsel may receive from the SEC or its staff with respect to the Offer Documents promptly after receipt of such comments. 3. (e) If, between the date of this Agreement and the date on which any particular share of Company Common Stock is accepted for payment and paid for pursuant to the Offer, the outstanding shares of Company Common Stock are changed into a different number or class of shares by reason of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction, then the Offer Price applicable to such share shall be appropriately adjusted. 1.2 COMPANY ACTIONS. (a) The Company hereby consents to the Offer and represents that its board of directors, at a meeting duly called and held, has (i) determined that this Agreement and the transactions contemplated by this Agreement, including the Offer and the Merger, are in the best interests of the Company's stockholders, (ii) approved this Agreement and the transactions contemplated by this Agreement, including the Offer and the Merger, in accordance with the requirements of the Delaware General Corporation Law (the "DGCL"), (iii) declared that this Agreement is advisable, (iv) resolved to recommend that stockholders of the Company accept the Offer, tender their shares of Company Common Stock pursuant to the Offer and (if required by applicable law) adopt this Agreement (the recommendation of the Company's board of directors that the stockholders of the Company accept the Offer, tender their shares of Company Common Stock pursuant to the Offer and (if required by applicable law) adopt this Agreement being referred to as the "Company Board Recommendation"), and (v) to the extent necessary, adopted a resolution for the purpose of causing the Company not to be subject to any restriction set forth in any state takeover law or similar Legal Requirement that might otherwise apply to the Offer, the Merger, any of the Stockholder Agreements, any of the Financing Documents or any of the other transactions contemplated by this Agreement, any of the Stockholder Agreements or any of the Financing Documents. Subject to Section 1.2(b): (A) the Company consents to the inclusion of the Company Board Recommendation in the Offer Documents in a form and manner reasonably determined by the Company to be acceptable; and (B) the Company Board Recommendation shall not be withdrawn or modified in a manner adverse to Parent or Acquisition Sub, and no resolution by the board of directors of the Company or any committee thereof to withdraw or modify the Company Board Recommendation in a manner adverse to Parent or Acquisition Sub shall be adopted. (b) Notwithstanding anything to the contrary contained in Section 1.2(a), at any time prior to the Acceptance Date, the Company Board Recommendation may be withdrawn or modified in a manner adverse to Parent and Acquisition Sub if: (i) an unsolicited, bona fide written offer by a third party unaffiliated with the Company to acquire or otherwise enter into a transaction which would result in such third party becoming the holder of at least a majority of the outstanding shares of Company Common Stock is made to the Company and is not withdrawn; (ii) the Company provides Parent with at least two business days' prior notice of any meeting of the Company's board of directors or any committee thereof at which such board of directors or such committee will determine whether such offer is a Superior Offer; (iii) the Company's board of directors determines in good faith (after taking into account the advice of Banc of America Securities LLC or another independent financial advisor of nationally recognized reputation) that such offer constitutes a Superior Offer; (iv) the Company's board of directors determines in good faith, after having taken into account the advice of the Company's outside legal counsel, that, in light of such Superior Offer, the failure to withdraw or modify such 4. Company Board Recommendation in a manner adverse to Parent or Acquisition Sub would be inconsistent with the fiduciary obligations of the Company's board of directors to the Company's stockholders under applicable Legal Requirements; and (v) such Superior Offer shall not have resulted directly or indirectly from any breach of Section 5.3 or from any action taken by the Company or any of its Representatives with the intent of circumventing any of the provisions set forth in Section 5.3. (c) On the date of commencement of the Offer, the Company shall file with the SEC and (following or contemporaneously with the dissemination of the Offer to Purchase and related documents) disseminate to holders of shares of Company Common Stock a Solicitation/Recommendation Statement on Schedule 14D-9 (together with any amendments or supplements thereto, the "Schedule 14D-9") that, subject only to Section 1.2(b), shall reflect the Company Board Recommendation. Each of Parent and Acquisition Sub shall promptly furnish to the Company all information concerning Parent and Acquisition Sub that is required or reasonably requested by the Company in connection with any action contemplated by this Section 1.2(c). The Company shall use reasonable efforts to cause the Schedule 14D-9 to comply in all material respects with the Exchange Act and the rules and regulations thereunder and other applicable Legal Requirements. Each of Parent, Acquisition Sub and the Company agrees promptly to correct any information provided by it for use in the Schedule 14D-9 if and to the extent that such information shall have become false or misleading in any material respect, and the Company further agrees to take all steps necessary to cause the Schedule 14D-9, as supplemented or amended to correct such information, to be filed with the SEC and to be disseminated to holders of shares of Company Common Stock to the extent required by applicable federal securities laws. The Company shall give Parent and its counsel reasonable opportunity to review and comment on the Schedule 14D-9 (including any amendment thereto) prior to the filing thereof with the SEC. The Company shall provide Parent and its counsel with any comments the Company or its counsel may receive from the SEC or its staff with respect to the Schedule 14D-9 promptly after receipt of such comments. (d) The Company shall, or shall cause its transfer agent to, (i) promptly furnish Parent with an accurate and complete list of its stockholders as of the most recent practicable date, mailing labels and an accurate and complete copy of the most recent available listing or computer file containing the names and addresses of all record holders of shares of Company Common Stock and lists of securities positions of shares of Company Common Stock held in stock depositories, and (ii) provide to Parent such additional information (including updated lists of stockholders, mailing labels and lists of securities positions) and such other assistance as Parent may reasonably request in order to disseminate and otherwise communicate the Offer and the Merger to the holders of shares of Company Common Stock. Except as required by applicable Legal Requirements or legal process, and except as necessary to disseminate the Offer Documents, Parent and Acquisition Sub shall hold in confidence the information contained in any such listings and files to the extent required by the Confidentiality Agreement, dated as of November 1, 2002, between Parent and the Company (the "Confidentiality Agreement") and shall use and return such information in the manner set forth in the Confidentiality Agreement. 5. 1.3 DIRECTORS. (a) Effective as of the Acceptance Date, Parent shall be entitled to designate to serve on the Company's board of directors (the "Post-Acceptance Board") the number of directors, rounded up to the next whole number, equal to the product of: (i) the total number of directors on the Company's board of directors (giving effect to the election of any additional directors pursuant to this Section); and (ii) a fraction having a numerator equal to the aggregate number of shares of Company Common Stock then beneficially owned by Parent or Acquisition Sub (including all shares of Company Common Stock accepted for payment pursuant to the Offer) and having a denominator equal to the total number of shares of Company Common Stock then outstanding. At Parent's request on or after the Acceptance Date, the Company shall use its reasonable best efforts to take all actions (including, to the extent necessary, obtaining resignations of incumbent directors and increasing the number of authorized directors) necessary to cause Parent's designees to be elected or appointed to the Company's board of directors. In connection with the designation by Parent of individuals to serve on the Company's board of directors, the Company shall (to the extent requested by Parent) use its reasonable best efforts to cause individuals designated by Parent to constitute the number of members, rounded up to the next whole number, on (A) each committee of the Company's board of directors and (B) the board of directors of each Subsidiary of the Company (and each committee thereof) that represents at least the same percentage as individuals designated by Parent represent on the Company's board of directors. Notwithstanding the provisions of this Section 1.3, the Company shall use its reasonable best efforts to ensure that, at all times prior to the Effective Time (as defined in Section 2.3), at least two of the members of the Company's board of directors are individuals who were directors of the Company on the date of this Agreement (the "Continuing Directors"); PROVIDED, HOWEVER, that (1) if at any time prior to the Effective Time there shall be only one Continuing Director serving as a director of the Company for any reason, then the Company's board of directors shall cause an individual selected by the remaining Continuing Director to be designated to serve on the Company's board of directors (and such individual shall be deemed to be a Continuing Director for all purposes under this Agreement), and (2) if at any time prior to the Effective Time no Continuing Directors then remain, then the Company's board of directors shall designate two individuals to serve on the Company's board of directors who are not officers, employees or affiliates of the Company, Parent or Acquisition Sub (and such individuals shall be deemed to be Continuing Directors for all purposes under this Agreement). (b) The Company's obligation to appoint Parent's designees to the Company's board of directors shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 thereunder. The Company shall promptly take all actions, and shall include in the Schedule 14D-9 such information with respect to the Company and its officers and directors, as Section 14(f) of the Exchange Act and Rule 14f-1 thereunder require in order to fulfill its obligations under this Section 1.3, so long as Parent shall have provided to the Company on a timely basis the information and consents with respect to Parent and its nominees, officers, directors and affiliates required by Section 14(f) of the Exchange Act and Rule 14f-1 thereunder. The provisions of this Section 1.3 are in addition to, and shall not limit, any right that Acquisition Sub, Parent or any affiliate of Acquisition Sub or Parent may have (with respect to the election of directors or otherwise) under applicable Legal Requirements as a holder or beneficial owner of shares of Company Common Stock. 6. (c) Following the election or appointment of Parent's designees pursuant to Section 1.3(a) and until the Effective Time, the approval of a majority of the Continuing Directors shall be required to authorize any Adverse Action (as defined below). For purposes of this Section 1.3(c), "Adverse Action" shall mean any of the following actions of the Company, to the extent the action in question could reasonably be expected to affect adversely the holders of shares of Company Common Stock (other than Parent or Acquisition Sub): (i) any action by the Company with respect to any amendment or waiver of any term or condition of this Agreement, the Merger, the Financing Documents or the certificate of incorporation or bylaws of the Company; (ii) any termination or rescission of this Agreement, the Merger or the Financing Documents by the Company; (iii) any extension by the Company of the time for the performance of any of the obligations or other acts of Parent or Acquisition Sub, or any waiver or assertion of any of the Company's rights under this Agreement or the Financing Documents; or (iv) any other consent or action by the Company's board of directors with respect to this Agreement, the Merger or the Financing Documents. The approval by a majority of the Continuing Directors of any Adverse Action shall constitute the valid authorization of the Company's board of directors with respect to such Adverse Action, and no other action on the part of the Company or by any other director of the Company shall be required to authorize such Adverse Action. 1.4 TOP-UP OPTION. (a) The Company hereby grants to Parent and Acquisition Sub an irrevocable option (the "Top-Up Option") to purchase, at a price per share equal to the Offer Price, a number of shares of Company Common Stock (the "Top-Up Option Shares") that, when added to the number of shares of Company Common Stock owned by Parent or any wholly-owned Subsidiary of Parent at the time of exercise of the Top-Up Option, constitutes one share of Company Common Stock more than 90% of the number of shares of Company Common Stock that will be outstanding immediately after the issuance of the Top-Up Option Shares. The Top-Up Option may be exercised by Parent or Acquisition Sub, in whole but not in part, at any time on or after the Acceptance Date and on or prior to the tenth business day after the later of (i) the Acceptance Date or (ii) the expiration of any subsequent offering period; PROVIDED, HOWEVER, that the obligation of the Company to deliver Top-Up Option Shares upon the exercise of the Top-Up Option is subject to the condition that no provision of any applicable law and no judgment, injunction, order or decree shall prohibit the exercise of the Top-Up Option or the delivery of the Top-Up Option Shares in respect of such exercise. The parties shall cooperate to ensure that the issuance of the Top-Up Option Shares is accomplished consistent with all applicable Legal Requirements, including compliance with an applicable exemption from registration of the Top-Up Option Shares under the Securities Act. (b) In the event Parent or Acquisition Sub wishes to exercise the Top-Up Option, Parent shall so notify the Company and shall set forth in such notice (i) the number of shares of Company Common Stock that are expected to be owned by Parent or any wholly-owned Subsidiary of Parent immediately preceding the purchase of the Top-Up Option Shares and (ii) a place and time for the closing of the purchase of the Top-Up Option Shares. The Company shall, as soon as practicable following receipt of such notice, notify Parent of the number of shares of Company Common Stock then outstanding and the number of Top-Up Option Shares. At the closing of the purchase of the Top-Up Option Shares, Parent or Acquisition Sub, as the case may be, shall pay the Company the aggregate price required to be 7. paid for the Top-Up Option Shares, and the Company shall cause to be issued to Parent or Acquisition Sub a certificate representing the Top-Up Option Shares. SECTION 2. MERGER TRANSACTION 2.1 MERGER OF ACQUISITION SUB INTO THE COMPANY. Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, Acquisition Sub shall be merged with and into the Company, and the separate existence of Acquisition Sub shall cease. The Company will continue as the surviving corporation in the Merger (the "Surviving Corporation"). 2.2 EFFECT OF THE MERGER. The Merger shall have the effects set forth in this Agreement and in the applicable provisions of the DGCL. 2.3 CLOSING; EFFECTIVE TIME. The consummation of the Merger (the "Closing") shall take place at the offices of Cooley Godward LLP, Five Palo Alto Square, 3000 El Camino Real, Palo Alto, California, at 10:00 a.m. on a date to be designated by Parent (the "Closing Date"), which shall be no later than the third business day after the satisfaction or waiver of the last to be satisfied or waived of the conditions set forth in Section 7. Subject to the provisions of this Agreement, a certificate of merger satisfying the applicable requirements of the DGCL shall be duly executed by the Company and, concurrently with or as soon as practicable following the Closing, delivered to the Secretary of State of the State of Delaware for filing. The Merger shall become effective upon the date and time of the filing of such certificate of merger with the Secretary of State of the State of Delaware (the "Effective Time"). 2.4 CERTIFICATE OF INCORPORATION AND BYLAWS; DIRECTORS AND OFFICERS. (a) The Certificate of Incorporation of the Surviving Corporation shall be amended and restated as of the Effective Time to conform to Annex III. (b) Unless otherwise determined by Parent prior to the Effective Time: (i) the Bylaws of the Surviving Corporation shall be amended and restated as of the Effective Time to conform to the Bylaws of Acquisition Sub as in effect immediately prior to the Effective Time; and (ii) the directors and officers of the Surviving Corporation immediately after the Effective Time shall be the respective individuals who are directors and officers of Acquisition Sub immediately prior to the Effective Time. 2.5 CONVERSION OF SHARES. (a) At the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Acquisition Sub, the Company or any stockholder of the Company: (i) any shares of Company Common Stock then held by the Company or any wholly owned Subsidiary of the Company (or held in the Company's 8. treasury) shall be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor; (ii) any shares of Company Common Stock then held by Parent, Acquisition Sub or any other wholly owned Subsidiary of Parent shall be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor; (iii) except as provided in clauses "(i)" and "(ii)" above and subject to Sections 2.5(b), 2.5(c) and 2.7, each share of Company Common Stock then outstanding shall be converted into the right to receive a cash amount equal to the Offer Price, without interest (the "Merger Consideration"); and (iv) each share of the common stock, $0.01 par value per share, of Acquisition Sub then outstanding shall be converted into the number of shares of common stock of the Surviving Corporation determined by dividing (i) the number of shares of Company Common Stock outstanding immediately prior to the Effective Time by (ii) 100. (b) If, between the date of this Agreement and the Effective Time, the outstanding shares of Company Common Stock are changed into a different number or class of shares by reason of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction, then the Merger Consideration shall be appropriately adjusted to reflect such change. (c) If any shares of Company Common Stock outstanding immediately prior to the Effective Time are unvested or are subject to a repurchase option, risk of forfeiture or other condition under any applicable restricted stock purchase agreement or other agreement with the Company or under which the Company has any rights, then, to the extent the Company has the legal or contractual right to do so, the Company shall use reasonable efforts to ensure that: (i) the consideration payable in the Merger with respect thereto will also be unvested or subject to the same repurchase option, risk of forfeiture or other condition; and (ii) from and after the Effective Time, Parent is entitled to exercise any such repurchase option or any similar right as the Company's assignee. 2.6 SURRENDER OF CERTIFICATES; STOCK TRANSFER BOOKS. (a) At the Effective Time: (a) all shares of Company Common Stock outstanding immediately prior to the Effective Time shall automatically be canceled and retired and shall cease to exist, and all holders of certificates representing shares of Company Common Stock that were outstanding immediately prior to the Effective Time shall cease to have any rights as stockholders of the Company; and (b) the stock transfer books of the Company shall be closed with respect to all shares of Company Common Stock outstanding immediately prior to the Effective Time. No further transfer of any such shares of Company Common Stock shall be made on such stock transfer books after the Effective Time. If, after the Effective Time, a valid certificate previously representing any shares of Company Common Stock (a "Company Stock Certificate") is presented to the Paying Agent (as defined in Section 2.6(b)) or to the Surviving 9. Corporation or Parent, such Company Stock Certificate shall be canceled and shall be exchanged as provided in this Section 2.6. (b) Prior to the Effective Time, Parent shall designate a reputable bank or trust company, which bank or trust company shall be reasonably acceptable to the Company, to act as agent (the "Paying Agent") for the holders of shares of Company Common Stock to receive the funds to which holders of such shares shall become entitled pursuant to Section 2.5. Parent shall (or shall cause Acquisition Sub to), at or prior to the Effective Time, deposit with the Paying Agent the cash consideration referred to in Section 2.5(a)(iii). Such funds shall be invested by the Paying Agent as directed by the Surviving Corporation; PROVIDED, HOWEVER, that Parent shall promptly replace any monies lost through any investment made pursuant to this Section 2.6(b) and Parent shall in any event be liable for the payment of the cash consideration referred to in Section 2.5(a)(iii), notwithstanding any such losses. (c) As soon as reasonably practicable after the Effective Time, Parent shall cause the Paying Agent to mail to the record holders of Company Common Stock entitled to receive Merger Consideration (i) a letter of transmittal in customary form and containing such provisions as Parent may reasonably specify (including a provision confirming that delivery of the Company Stock Certificates shall be effected, and risk of loss and title to Company Stock Certificates shall pass, only upon delivery of such Company Stock Certificates to the Exchange Agent), and (ii) instructions for use in effecting the surrender of Company Stock Certificates in exchange for the cash consideration referred to in Section 2.5(a)(iii). Upon surrender of a Company Stock Certificate to the Exchange Agent for exchange, together with a duly executed letter of transmittal and such other documents as may be reasonably required by the Exchange Agent or Parent, (1) the holder of such Company Stock Certificate shall be entitled to receive, in exchange for each share of Company Common Stock previously represented by such Company Stock Certificate, the Merger Consideration, and (2) the Company Stock Certificate so surrendered shall be canceled. In the event of a transfer of ownership of any share of Company Common Stock prior to the Effective Time that has not been registered in the transfer records of the Company, the Merger Consideration payable in respect of such share of Company Common Stock shall be paid to the transferee of such share if the Company Stock Certificate that previously represented such share is presented to the Paying Agent accompanied by all documents required to evidence and effect such transfer and to evidence that any applicable stock transfer taxes have been paid. Until surrendered as contemplated by this Section 2.6(c), each Company Stock Certificate shall be deemed, from and after the Effective Time, to represent only the right to receive the Merger Consideration with respect to each share of Company Common Stock represented by such Company Stock Certificate. If any Company Stock Certificate shall have been lost, stolen or destroyed, Parent may, in its discretion and as a condition precedent to the payment of any Merger Consideration, require the owner of such lost, stolen or destroyed Company Stock Certificate to provide an appropriate affidavit and to deliver a bond (in such sum as Parent may reasonably direct, but not more than market value plus a reasonable sum to cover applicable costs incurred by Parent or the Surviving Corporation) as indemnity against any claim that may be made against the Paying Agent, Parent or the Surviving Corporation with respect to such Company Stock Certificate, and upon compliance with any such condition precedent, if any, Parent shall cause the Paying Agent to pay the Merger Consideration in respect of any share previously represented by such Company Stock Certificate in accordance with this Section 2.6. 10. (d) At any time following the 180th day after the Effective Time, the Surviving Corporation shall be entitled to require the Paying Agent to deliver to it any funds which had been made available to the Paying Agent and not disbursed to the holders of Company Stock Certificates, and any holder of a Company Stock Certificate that has not theretofore surrendered its Company Stock Certificate in accordance with this Section 2.6 shall thereafter look only to Parent as a general creditor of Parent for satisfaction of such holder's claim for any Merger Consideration that may be payable upon due surrender of the Company Stock Certificate held by such holder. (e) Each of the Paying Agent, Parent and the Surviving Corporation shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to this Agreement to any holder or former holder of Company Common Stock such amounts as may be required to be deducted or withheld therefrom under the Code or any provision of state, local or foreign tax law or under any other applicable Legal Requirement, whereupon Parent will pay or cause payment of such amounts to the appropriate Governmental Bodies as and when due. To the extent such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid. (f) Neither Parent nor the Surviving Corporation shall be liable to any holder or former holder of Company Common Stock or to any other Person with respect to any Merger Consideration that may be payable upon due surrender of any Company Stock Certificate that is delivered to any public official pursuant to any applicable abandoned property law, escheat law or similar Legal Requirement. If any Company Stock Certificate has not been surrendered by the earlier of (i) the fifth anniversary of the date on which the Merger becomes effective and (ii) the date immediately prior to the date on which the cash amount that such Company Common Stock Certificate represents the right to receive would otherwise escheat to or become the property of any Governmental Body, then such cash amount shall, to the extent permitted by applicable Legal Requirements, become the property of the Surviving Corporation, free and clear of all claims or interest of any Person previously entitled thereto. Except as otherwise provided in this Agreement, the Surviving Corporation shall pay all charges and expenses, including those of the Paying Agent, in connection with the exchange of the cash consideration referred to in Section 2.5(a)(iii) for shares of Company Common Stock. 2.7 SHARES SUBJECT TO APPRAISAL RIGHTS. (a) Notwithstanding anything to the contrary contained in this Agreement, any share of Company Common Stock that, as of the Effective Time, is held by a holder who has preserved appraisal rights under Section 262 of the DGCL with respect to such share shall not be converted into or represent the right to receive the Merger Consideration, and the holder of such share shall be entitled only to such rights with respect to such share as may be granted to such holder pursuant to Section 262 of the DGCL; PROVIDED, HOWEVER, that if such appraisal rights shall not be perfected or the holder of such share shall otherwise lose such holder's appraisal rights with respect to such share, then, as of the later of the Effective Time or the time of the failure to perfect such status or the loss of such rights, such share shall automatically be converted into and shall represent only the right to receive (upon the surrender of the certificate representing such share) the Merger Consideration. 11. (b) The Company shall give Parent (i) prompt notice of any written demand received by the Company prior to the Effective Time to require the Company to purchase shares of Company Common Stock pursuant to Section 262 of the DGCL, and (ii) the opportunity to participate in all negotiations and proceedings with respect to any such demand, notice or instrument. The Company shall not make any payment or settlement offer prior to the Effective Time with respect to any such demand unless Parent shall have consented in writing to such payment or settlement offer. 2.8 FURTHER ACTION. If, at any time after the Effective Time, any further action is determined by Parent to be necessary or desirable to carry out the purposes of this Agreement or to vest the Surviving Corporation with full right, title and possession of and to all rights and property of Acquisition Sub and the Company, the officers and directors of the Surviving Corporation and Parent shall be fully authorized (in the name of Acquisition Sub, in the name of the Company and otherwise) to take such action. SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY Subject to Section 9.6(a), except as set forth in the applicable part of the Company Disclosure Schedule or (subject to Section 9.12(e)) as expressly set forth in the factual disclosures contained in the Company SEC Documents (as defined in Section 3.4) filed with the SEC from January 1, 2002 through the date of this Agreement or in any exhibit thereto (including exhibits incorporated by reference therein), the Company represents and warrants to Parent and Acquisition Sub as follows: 3.1 SUBSIDIARIES; DUE ORGANIZATION; ETC. (a) The Company has no Subsidiaries, except for Avid Corporation, a Pennsylvania corporation ("Avid"), and Triangle Pharma, Limited, a company organized under the laws of England and Wales ("Triangle Pharma"); and neither the Company nor either of its Subsidiaries owns any capital stock of, or any equity interest of any nature in, any other Entity, other than capital stock of Avid and Triangle Pharma and the capital stock and equity interests held by the Company for passive investment in connection with the management of working capital as reflected in the notes to the Unaudited Interim Balance Sheet. (The Company and its Subsidiaries are referred to collectively in this Agreement as the "Acquired Corporations.") None of the Acquired Corporations has agreed or is obligated to make, or is bound by any Contract under which it may become obligated to make, any future investment in or capital contribution to any other Entity. None of the Acquired Corporations has, at any time since January 1, 2000, been a general partner of any general partnership or limited partnership. (b) Each of the Acquired Corporations is a corporation duly organized, validly existing and in good standing (to the extent such concept is recognized) under the laws of the jurisdiction of its incorporation and has all necessary corporate power and authority: (i) to conduct its business in the manner in which its business is currently being conducted; (ii) to own and use its assets in the manner in which its assets are currently owned and used; and (iii) to perform its obligations under all Contracts by which it is bound. 12. (c) Each of the Acquired Corporations is qualified or registered to do business as a foreign corporation, and is in good standing (to the extent such concept is recognized), under the laws of all jurisdictions where the nature of its business requires such qualification or registration and where the potential consequences of failing to be so qualified or registered are materially adverse to such Acquired Corporation. 3.2 CERTIFICATE OF INCORPORATION AND BYLAWS. The Company has made available to Parent accurate and complete copies of the certificate of incorporation, bylaws and other charter and organizational documents of the respective Acquired Corporations, including all amendments thereto. 3.3 CAPITALIZATION, ETC. (a) The authorized capital stock of the Company consists of: (i) 175,000,000 shares of Company Common Stock, of which 76,904,133 shares have been issued and are outstanding as of the date of this Agreement; and (ii) 10,000,000 shares of Preferred Stock, $.001 par value per share, (A) 170,000 shares of which have been designated "Series A Preferred Stock," none of which are outstanding as of the date of this Agreement, (B) 230,000 shares of which have been designated "Series B Preferred Stock," none of which are outstanding as of the date of this Agreement and (C) 1,200,000 of which have been designated "Series B Junior Participating Preferred Stock," none of which are outstanding as of the date of this Agreement. The Company does not hold any shares of its capital stock in its treasury. All of the outstanding shares of Company Common Stock have been duly authorized and validly issued, and are fully paid and nonassessable. There are no shares of Company Common Stock held by either of the Company's Subsidiaries. None of the outstanding shares of Company Common Stock is entitled or subject to any preemptive right, right of participation, right of maintenance or any similar right. None of the outstanding shares of Company Common Stock is subject to any right of first refusal in favor of any of the Acquired Corporations. There is no Acquired Corporation Contract relating to the voting or registration of, or restricting any Person from purchasing, selling, pledging or otherwise disposing of (or granting any option or similar right with respect to) any shares of Company Common Stock. None of the Acquired Corporations is under any obligation, or is bound by any Contract pursuant to which it may become obligated, to repurchase, redeem or otherwise acquire any outstanding shares of Company Common Stock. (b) As of the date of this Agreement: (i) all of the shares of the Company's Series B Junior Participating Preferred Stock are reserved for future issuance upon exercise of the rights (the "Rights") issued pursuant to the Rights Agreement, dated as of February 1, 1999 between the Company and American Stock Transfer & Trust Company, as Rights Agent (as amended by that certain Amendment to Rights Agreement, dated as of June 2, 1999, that certain Amendment to Rights Agreement, dated as of August 24, 2001, and that certain Amendment to Rights Agreement, dated as of July 30, 2002, the "Company Rights Agreement"); (ii) 10,953,922 shares of Company Common Stock are subject to issuance pursuant to stock options granted and outstanding under the Company's Amended and Restated 1996 Stock Incentive Plan (the "Company Option Plan"); (iii) 58,040 shares of Company Common Stock are reserved for future issuance pursuant to the Company's 1996 Employee Stock Purchase Plan (the "ESPP"); (iv) 2,300,000 shares of Company Common Stock are reserved for future issuance pursuant to the CEO Incentive Plan; and (v) 300,000 shares of 13. Company Common Stock are reserved for future issuance to Ramius Securities, LLC pursuant to a Common Stock Underwriting Agreement, dated as of November 1, 2000, between Ramius Securities, LLC and the Company. (Options to purchase shares of Company Common Stock (whether granted by the Company pursuant to the Company Option Plan, assumed by the Company in connection with any merger, acquisition or similar transaction or otherwise issued or granted) are referred to in this Agreement as "Company Options.") Part 3.3(b) of the Company Disclosure Schedule sets forth the following information, accurate in all material respects, with respect to each Company Option outstanding as of the date of this Agreement: (i) the particular plan (if any) pursuant to which such Company Option was granted; (ii) the name of the optionee; (iii) the number of shares of Company Common Stock subject to such Company Option; (iv) the exercise price of such Company Option; (v) the date on which such Company Option was granted; (vi) the applicable vesting schedule (and the terms of any right to accelerate the vesting of such Company Option), and the extent to which such Company Option is vested and exercisable as of the date of this Agreement; and (vii) the date on which such Company Option expires. The Company has made available to Parent accurate and complete copies of all stock option plans governing any stock options granted by any Acquired Corporation that are outstanding as of the date of this Agreement, and the forms of all stock option agreements evidencing such options. (c) Except as provided in the Financing Documents and except as set forth in Section 3.3(b) above, there is no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of the capital stock or other securities of any of the Acquired Corporations; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of the capital stock or other securities of any of the Acquired Corporations; or (iii) stockholder rights plan (or similar plan or Contract commonly referred to as a "poison pill") under which any of the Acquired Corporations is or may become obligated to sell or otherwise issue any shares of its capital stock or any other securities. (d) All outstanding shares of Company Common Stock, options, warrants and other securities of the Acquired Corporations have been issued and granted in compliance in all material respects with (i) all applicable securities laws and other applicable Legal Requirements, and (ii) all requirements set forth in applicable Contracts. (e) All of the outstanding shares of capital stock of each of the Company's Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof, and are owned beneficially and of record by the Company, free and clear of any Encumbrances. 3.4 SEC FILINGS; FINANCIAL STATEMENTS. (a) The Company has made available to Parent accurate and complete copies of each registration statement, proxy statement and other statement, report, schedule, form and other document filed by the Company with the SEC since January 1, 2000, and all amendments thereto (the "Company SEC Documents"). Neither of the Company's Subsidiaries is required to file any documents with the SEC. As of the time it was filed with the SEC (or, if 14. amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing): (i) each of the Company SEC Documents complied in all material respects with the applicable requirements of the Securities Act or the Exchange Act (as the case may be) and, to the extent not included in the Exchange Act or the Securities Act, the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"); and (ii) except to the extent that information contained in any Company SEC Document has been revised or superseded by a later filed Company SEC Document filed prior to the date of this Agreement, none of the Company SEC Documents when filed contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The principal executive officer of the Company and the principal financial officer of the Company (and each former principal executive officer of the Company and each former principal financial officer of the Company, as applicable) has made the certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act and the rules and regulations of the SEC thereunder with respect to the Company's filings pursuant to the Exchange Act. For purposes of the preceding sentence, "principal executive officer" and "principal financial officer" shall have the meanings given to such terms in the Sarbanes-Oxley Act. (b) Except to the extent stated therein, the financial statements (including any related notes) contained in the Company SEC Documents: (i) when filed, complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto; (ii) when filed, were prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC, and except that the unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end adjustments that will not, individually or in the aggregate, be material in amount), and (iii) fairly present the consolidated financial position of the Company and its Subsidiaries as of the respective dates thereof and the consolidated results of operations and cash flows of the Company and its Subsidiaries for the periods covered thereby (except as may be indicated in the notes to such financial statements or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC, and except that the unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end adjustments that will not, individually or in the aggregate, be material in amount). 3.5 ABSENCE OF CHANGES. From September 30, 2002 through the date of this Agreement, and except for the transactions contemplated by this Agreement or the Financing Documents that are to occur contemporaneously with the execution hereof: (a) there was no event, and no circumstance arose, that individually or in combination with any other events or circumstances, has had a material adverse effect on the Acquired Corporations taken as a whole; (b) none of the Acquired Corporations (i) declared, accrued, set aside or paid any dividend or made any other distribution in respect of any shares of capital stock, or (ii) repurchased, redeemed or otherwise reacquired any shares of capital stock or other securities; 15. (c) none of the Acquired Corporations sold, issued or granted, or authorized the sale, issuance or grant of, (i) any capital stock or other security (except for Company Common Stock issued upon the valid exercise of outstanding Company Options), (ii) any option, call, warrant or right to acquire any capital stock or other security (except for Company Options), or (iii) any instrument convertible into or exchangeable for any capital stock or other security; (d) the Company did not (i) amend or waive any of its rights under, or permit the acceleration of vesting under, (A) any provision of the Company Option Plan, (B) any provision of any Contract evidencing any outstanding Company Option, or (C) any restricted stock purchase agreement or (ii) otherwise modify any of the terms of any outstanding option or other security or any related Contract; (e) there was no amendment to the certificate of incorporation, bylaws or other charter or organizational documents of any of the Acquired Corporations, and none of the Acquired Corporations effected or was a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction; (f) none of the Acquired Corporations made any capital expenditure which, when added to all other capital expenditures made on behalf of the Acquired Corporations from September 30, 2002 through the date of this Agreement, exceeds $250,000 in the aggregate; (g) except in the ordinary course of business and consistent with past practices, none of the Acquired Corporations (i) entered into or become bound by, or permitted any of the assets owned or used by it to become bound by, any Material Contract (as defined in Section 3.10), or (ii) amended or terminated, or waived or exercised any material right or remedy under, any Material Contract; (h) except in the ordinary course of business and consistent with past practices, none of the Acquired Corporations (i) acquired, leased or licensed any material right or other material asset from any other Person, (ii) sold or otherwise disposed of, or leased or licensed, any right or other asset to any other Person, or (iii) waived or relinquished any material right, except (in each case) for rights or other assets acquired, leased, licensed or disposed of or otherwise licensed on a non-exclusive basis only for research or to enable third parties to provide services to the Acquired Corporations; (i) none of the Acquired Corporations wrote off as uncollectible, or established any extraordinary reserve with respect to, any indebtedness in excess of $100,000 in the aggregate; (j) none of the Acquired Corporations made any pledge of any of its assets or otherwise permitted any of its material assets to become subject to any Encumbrance; 16. (k) none of the Acquired Corporations (i) lent money to any Person (which shall not be deemed to include the prepayment of business expenses in the ordinary course of business and consistent with past practices), or (ii) incurred or guaranteed any indebtedness for borrowed money; (l) none of the Acquired Corporations (i) adopted, established or entered into any Company Employee Plan, (ii) caused or permitted any Company Employee Plan to be amended in any material respect, or (iii) paid any bonus or made any profit-sharing or similar payment to, or materially increased the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees except as disclosed elsewhere in the Company Disclosure Schedule or in the ordinary course of business and consistent with past practices; (m) none of the Acquired Corporations changed any of its methods of accounting or accounting practices in any material respect, except as required by generally accepted accounting principles; (n) none of the Acquired Corporations made any material Tax election; (o) none of the Acquired Corporations commenced or settled any material Legal Proceeding; and (p) none of the Acquired Corporations agreed or committed to take any of the actions referred to in clauses "(b)" through "(o)" above. 3.6 TITLE TO ASSETS. As of the date of this Agreement, the Acquired Corporations own, and have good and valid title to the rights and other assets reflected on the Unaudited Interim Balance Sheet (except for inventory sold or otherwise disposed of in the ordinary course of business since the date of the Unaudited Interim Balance Sheet, and except for any Intellectual Property Rights or Intellectual Property which is covered under Section 3.9), subject only to deficiencies of title which do not in the aggregate have a material adverse effect on the Acquired Corporations taken as a whole. As of the date of this Agreement, all of said rights and other assets are owned by the Acquired Corporations free and clear of any Encumbrances, except for (1) any Encumbrance for current Taxes not yet due and payable and (2) Encumbrances that do not (in any case or in the aggregate) materially detract from the value of the assets subject thereto or materially impair the operations of the Acquired Corporations taken as a whole. 3.7 REAL PROPERTY. None of the Acquired Corporations owns any real property or any interest in real property. 3.8 INVENTORIES. (a) Part 3.8(a) of the Company Disclosure Schedule provides, as of the date of this Agreement: (i) in Part 3.8(a)(i) of the Company Disclosure Schedule, an accurate and complete summary (by quantity and expiration/retest date) of each Acquired Corporation's 17. existing inventories of Bulk Emtricitabine (except for discrepancies that are reasonably acceptable according to customary pharmaceutical industry practices), manufactured by Abbott under the Abbott Agreement and (ii) in Part 3.8(a)(ii) of the Company Disclosure Schedule, an accurate and complete summary (by quantity and delivery date for each such order) of each Acquired Corporation's outstanding firm orders placed with, and accepted by, Abbott for Bulk Emtricitabine, to be manufactured by Abbott under the Abbott Agreement. To the Knowledge of the Company, the inventories referred to above in this subsection were manufactured by Abbott in accordance in all material respects with the requirements of and warranties specified in the Abbott Agreement therefor. No Acquired Corporation has any outstanding firm order placed with, and accepted by, Abbott for Finished Emtricitabine. (b) Part 3.8(b) of the Company Disclosure Schedule sets forth an accurate and complete breakdown of the pricing applicable to the Company's firm orders for the purchase of Bulk Emtricitabine and Finished Emtricitabine from Abbott as of the date of this Agreement. (c) For each Company Pharmaceutical Product, the total of the Acquired Corporations' inventories, in bulk active pharmaceutical and finished product form, plus the quantities thereof represented by the Acquired Corporations' firm orders therefor, are reasonably sufficient for the conduct of all clinical trials being conducted by or on behalf of any of the Acquired Corporations thereon for the next four (4) months. 3.9 INTELLECTUAL PROPERTY. (a) Part 3.9(a) of the Company Disclosure Schedule accurately identifies in all material respects, with respect to each Company Pharmaceutical Product, all material Acquired Corporation Patent Rights necessary or, to the Knowledge of the Company, currently intended for use, in the manufacture, use, import, offer for sale, sale or other development or commercialization of such Company Pharmaceutical Product, that is owned by or licensed to the Acquired Corporations (all such material Acquired Corporation Patent Rights required to be identified in Part 3.9(a) of the Company Disclosure Schedule being referred to as "Product IP"), and, for each item of Product IP, (i) whether it is Registered IP, and if it is Registered IP the jurisdiction in which such item of Registered IP has been registered or filed and the applicable registration or serial number; (ii) the identity of any other Person that has an ownership interest in such item of Product IP and the nature of such ownership interest; (iii) the identity of any license agreement under which the Company has obtained rights in such item of Product IP; and (iv) any Contract pursuant to which any of the Acquired Corporations has granted or made any license, material right (including any right to receive any royalty payment, milestone payment, success payment or maintenance fee or similar fee) or material Encumbrance to, under or in connection with such item of Product IP to or in favor of any other Person, other than non-exclusive licenses only for research or manufacturing on behalf of the Acquired Corporations. The Company has provided Parent with an accurate and complete copy of the License Agreement, dated as of April 17, 1996, between the Company and Emory University relating to Emtricitabine. (b) The Acquired Corporations have sufficient right, title and interest in and to the Product IP: 18. (i) to conduct the business of the Acquired Corporations in substantially the same manner as currently conducted, including its proposed plans to make, have made, import, offer for sale, sell and otherwise develop and commercialize each Company Pharmaceutical Product worldwide, to the Knowledge of the Company (A) with no payment obligation to any Person or with respect to any Product IP other than as set forth in any license agreement listed or required to be listed in Part 3.9(a) of the Company Disclosure Schedule and (B) without materially infringing (directly, contributorily, by inducement or otherwise), materially misappropriating or otherwise materially violating any material Intellectual Property Right of any other Person, except as otherwise described in Part 3.9(b)(i) of the Company Disclosure Schedule; (ii) to the Knowledge of the Company, to exclude all other Persons from making, having made, importing, offering for sale, selling and otherwise developing and commercializing each Company Pharmaceutical Product in the countries listed or required to be listed in Part 3.9(a) of the Company Disclosure Schedule to the extent allowable by that country and except as otherwise described in Part 3.9(b)(ii) of the Company Disclosure Schedule; and (iii) to the Knowledge of the Company, to make, have made, import, offer for sale, sell and otherwise develop and commercialize a Combination Product of Emtricitabine in combination with adefovir dipivoxil or any other compound yielding adefovir in vivo, or with tenofovir disoproxil fumarate or any other compound yielding tenofovir in vivo ("Emtricitabine Combination") without materially misappropriating or otherwise materially violating any material Intellectual Property Right of any other Person. (c) To the Knowledge of the Company, except as described in Part 3.9(c) of the Company Disclosure Schedule, none of SmithKline-Beecham Corporation, a Pennsylvania corporation (d/b/a GlaxoSmithKline), Glaxo Group Limited, a corporation organized under the laws of England and Wales, GlaxoSmithKline, Inc., a Canadian corporation, Shire Pharmaceuticals Group plc, a corporation organized under the laws of England and Wales, Shire-Biochem, Inc., a Canadian corporation, and Emory University, a Georgia non-profit corporation, has the right or ability, under any Contract to which an Acquired Corporation or Emory University is a party, or under any Intellectual Property Right claiming any composition of matter, method of use or method of manufacture of Emtricitabine, whether as a sole active pharmaceutical ingredient or as an Emtricitabine Combination, to exclude, enjoin or prevent any of the Acquired Corporations from, or to sue or require payment from any of the Acquired Corporations with respect to, manufacturing, having manufactured, using, importing, offering for sale, selling or otherwise developing or commercializing, in each case worldwide, any Emtricitabine Combination. (d) To the Knowledge of the Company: (i) each material granted claim that covers a Company Pharmaceutical Product or its method of pharmaceutical use or manufacture in an Acquired Corporation Patent Right is valid, subsisting and enforceable, and (ii) there is no basis for a claim that any such material granted claim in any Acquired Corporation Patent Right is invalid or unenforceable in any material respect. 19. (e) Neither (i) the execution, delivery or performance of this Agreement or the Financing Documents, nor (ii) the acquisition of or payment for any shares of Company Common Stock by Acquisition Sub pursuant to the Offer or the consummation of the Merger or any of the other transactions contemplated by this Agreement or the Financing Documents will, with or without notice or the lapse of time, result in or give any other Person the right or option to cause or declare: (A) a loss of, or material Encumbrance on, any Product IP; (B) a material breach of any Contract listed or required to be listed in Part 3.9(a) of the Company Disclosure Schedule; (C) the release, disclosure or delivery of any Product IP by or to any escrow agent or other Person; or (D) the grant, assignment or transfer to any other Person of any material license or other material right or material interest under, to or in any of the Product IP. Part 3.9(e) of the Company Disclosure Schedule identifies any Consent that any of the Acquired Corporations was, is or will be required to obtain from any Person under any Acquired Corporation Contract relating to Emtricitabine listed or required to be listed in Part 3.9(a) of the Company Disclosure Schedule in connection with (i) the execution, delivery or performance of this Agreement, or (ii) the acquisition of or payment for any shares of Company Common Stock by Acquisition Sub pursuant to the Offer or the consummation of the Merger or any of the other transactions contemplated by this Agreement. (f) To the Knowledge of the Company, no Person has materially infringed, materially misappropriated, or otherwise materially violated, and no Person is currently materially infringing, materially misappropriating or otherwise materially violating, any Product IP. Part 3.9(f) of the Company Disclosure Schedule accurately identifies in all material respects (and, to the extent in the possession of any of the Acquired Corporations, the Company has provided to Parent a complete and accurate copy of) each written or electronic communication or correspondence that has been sent or otherwise delivered by or to any of the Acquired Corporations or any other party to a Contract listed or required to be listed in Part 3.9(a) of the Company Disclosure Schedule, or any Representative of any of the Acquired Corporations or such other party to such a Contract, regarding any actual, alleged or suspected material infringement or material misappropriation of any Product IP and provides a brief description of the current status of the matter referred to in such letter, communication or correspondence. (g) To the Knowledge of the Company with respect to Company Pharmaceutical Products: (i) none of the Acquired Corporations has ever materially infringed (directly, contributorily, by inducement or otherwise), materially misappropriated or otherwise materially violated any Intellectual Property Right of any other Person, and (ii) none of the parties to any of the license agreements listed or required to be listed in Part 3.9(a) of the Company Disclosure Schedule has, with respect to the Product IP, materially infringed (directly, contributorily, by inducement or otherwise), materially misappropriated or otherwise materially violated any Intellectual Property Right of any other Person. (h) Except as indicated in Part 3.9(h) of the Company Disclosure Document, no material adversarial Legal Proceeding involving any material Intellectual Property or material Intellectual Property Right owned by or licensed to any of the Acquired Corporations is pending or, to the Knowledge of the Company, has been threatened, except for any adversarial Legal Proceeding that would not be reasonably likely to materially and adversely affect: (A) the use or exploitation of such material Intellectual Property or material Intellectual Property Right 20. by any of the Acquired Corporations; or (B) the manufacturing, use, distribution or sale of any Company Pharmaceutical Product. (i) Except as disclosed in Part 3.9(i) of the Company Disclosure Schedule, as of the date of this Agreement: (i) there are no material claims or Legal Proceedings that have been brought by or on behalf of an Acquired Corporation, asserting that: (1) any Person bound by an Acquired Corporation Contract affecting or relating to the protection or disclosure of Acquired Corporation Trade Secrets has breached such Contract, or (2) any Person has acquired, disclosed or misused any Acquired Corporation Trade Secret in violation of any such Contract, or (3) any Person has acquired, disclosed or misused any Acquired Corporation Trade Secret in violation of any Legal Requirement, if in any such case such breach, acquisition, disclosure or misuse would be reasonably likely to result in a material adverse effect on the development, manufacturing, use, distribution or sale of any Company Pharmaceutical Product; and (ii) there are no material claims or Legal Proceedings that have been made or brought, or, to the Knowledge of the Company, have been overtly threatened against an Acquired Corporation, or to the Knowledge of the Company, have been made or brought against an employee of an Acquired Corporation, asserting that any such Person has breached any such Contract, or otherwise improperly disclosed, acquired or misused a trade secret, that, if adversely determined, would materially adversely affect the development, manufacturing, use, distribution or sale of any Company Pharmaceutical Product. 3.10 CONTRACTS. (a) Part 3.10 of the Company Disclosure Schedule identifies each Acquired Corporation Contract in effect as of the date of this Agreement to which any Acquired Corporation is a party that constitutes a "Material Contract." (For purposes of this Agreement, "Material Contract" means: (i) any Contract (A) pursuant to which any of the Acquired Corporations is or may become obligated to make any severance, termination or similar payment to any current or former employee or director in excess of $100,000, or (B) providing for base salary by any Acquired Corporation to any current employee in excess of $100,000 on an annualized basis (unless the entire amount remaining to be paid thereunder is less than $25,000); 21. (ii) any Contract relating to the acquisition, transfer, development, sharing or license of any Product IP by any Acquired Corporation on an exclusive or co-exclusive (with the Company) basis, including by field or territory; (iii) any Contract (A) creating or relating to any partnership or collaboration, or any joint development, joint marketing, distribution or similar arrangement, other than research and development collaborations conducted in the ordinary course of business consistent with practices, or (B) in which any Acquired Corporation grants any Person the right to market any product containing Emtricitabine; (iv) any Contract providing for the manufacture of Bulk Emtricitabine or Finished Emtricitabine for any Acquired Corporation; (v) any Contract with any clinical research organization (a "CRO Contract") providing clinical trial services for any clinical trial sponsored by any Acquired Corporation for any product containing Emtricitabine; (vi) any Contract that provides for indemnification of any officer or director of any Acquired Corporation; (vii) any Contract prohibiting any of the Acquired Corporations (A) from competing with any other Person, (B) from acquiring any product or other asset or any services from any other Person, (C) from developing, selling, supplying, distributing, offering, supporting or servicing any product or any technology or other asset to or for any other Person, (D) from performing services for any other Person, or (E) from transacting business or dealing in any other manner with any other Person; (viii) any Contract of a type required to be disclosed by Section 3.3, other than any Contract providing for the grant of Company Options; and (ix) any Contract providing a guaranty in excess of $100,000. The Company has delivered to Parent an accurate and complete copy of each Acquired Corporation Contract that constitutes a Material Contract and is identified on Part 3.10 of the Company Disclosure Schedule as having been delivered to Parent (it being understood that to the extent any Material Contract is based on a standard-form Contract of the Company, the Company has only delivered the standard-form Contract unless such Material Contract deviates in any material respect from such standard-form Contract, in which case the Company has also provided an accurate and complete copy of such Material Contract as well). The identification of an Acquired Corporation Contract on Part 3.10 of the Company Disclosure Schedule shall not constitute such Acquired Corporation Contract as a Material Contract if such Acquired Corporation Contract is not encompassed within any of clauses "(i)" through "(ix)" above. (b) As of the date of this Agreement, each Material Contract is valid and in full force and effect, and is enforceable in accordance with its terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies. 22. (c) Each of the CRO Contracts identified in Part 3.10(a)(v) of the Company Disclosure Schedule is terminable and may be discontinued by the Company at will (upon delivery of notice of not more than 90 days) without penalty or cost (other than reimbursement for previously incurred or committed expenses) in connection with the termination by the Company of the applicable research program to which such Contract relates or the preclinical or clinical development program to which such Contract relates. (d) As of the date of this Agreement, except as otherwise has not had a material adverse effect on the Acquired Corporations taken as a whole: (i) none of the Acquired Corporations has materially violated or breached, or committed any material default under, any Material Contract; and, to the Knowledge of the Company, no other Person has materially violated or breached, or committed any material default under, any Material Contract; and (ii) to the Knowledge of the Company, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) is reasonably likely to (A) result in a material violation or breach of any of the provisions of any Material Contract, (B) give any Person the right to declare a material default or exercise any material remedy under any Material Contract or (C) give any Person the right to cancel, terminate or modify any Material Contract. From January 1, 2000 through the date of this Agreement, none of the Acquired Corporations has received any written notice or to its Knowledge received any other communication regarding any actual or possible material violation or breach of, or material default under, any Material Contract, other than any which the Company has addressed and resolved in a commercially reasonable manner. (e) As of the date of this Agreement, each Acquired Corporation has satisfied its respective diligence obligations (if any) under the specified sections of each of the Acquired Corporation Contracts identified in Part 3.10(e) of the Company Disclosure Schedule, none of which have been amended other than in a document a copy of which has been filed with the SEC by the Company prior to the date of this Agreement. (f) Each of the Acquired Corporation Contracts entered into since January 1, 2000 to establish a clinical trial at any clinical site conformed in form substantially with the standard form used by the Company as of the date of such agreement. Since January 1, 2000 there has not been any material adverse effect to any Phase III clinical trial conducted by any of the Acquired Corporations resulting primarily from the breach of any such Acquired Corporation Contracts by clinical site participating therein under any such Contracts nor primarily due to the Company's relations in general with the clinical sites participating therein, taken as a whole. 3.11 LIABILITIES. As of the date of this Agreement: (a) None of the Acquired Corporations has any accrued, contingent or other liabilities of any nature, either matured or unmatured ("Liabilities"), of a type required by generally accepted accounting principles to be reflected on a consolidated balance sheet of the Company or the notes thereto except for: (a) Liabilities identified in the Unaudited Interim Balance Sheet or the notes thereto; (b) current Liabilities that have been incurred by the Acquired Corporations from September 30, 2002 through the date of this Agreement in 23. the ordinary course of business and consistent with past practices; and (c) Liabilities which have not had a material adverse effect on the Acquired Corporations taken as a whole; and (b) To the Company's Knowledge, none of the Acquired Corporations has any other Liabilities, except for: (a) Liabilities identified in the Unaudited Interim Balance Sheet or the notes thereto; (b) current Liabilities that have been incurred by the Acquired Corporations in the ordinary course of business and consistent with past practices; and (c) Liabilities which have not had a material adverse effect on the Acquired Corporations taken as a whole. 3.12 COMPLIANCE WITH LEGAL REQUIREMENTS. Each of the Acquired Corporations is as of the date of this Agreement, and at all times from January 1, 2000 through the date of this Agreement has been, in compliance in all material respects with all applicable Legal Requirements. From January 1, 2000 through the date of this Agreement, none of the Acquired Corporations has received any notice or to its Knowledge received any other communication from any Governmental Body regarding any actual or possible material violation of, or material failure to comply with, any Legal Requirement. 3.13 CERTAIN BUSINESS PRACTICES. As of the date of this Agreement, none of the Acquired Corporations, and (to the Knowledge of the Company) no director, officer, agent or employee of any of the Acquired Corporations, has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity or (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended. 3.14 GOVERNMENTAL AUTHORIZATIONS; REGULATORY MATTERS. (a) As of the date of this Agreement, (i) the Acquired Corporations hold all material Governmental Authorizations necessary to enable the Acquired Corporations to conduct their respective businesses in the manner in which such businesses are currently being conducted, and (ii) all such Governmental Authorizations are valid and in full force and effect. Each of the Acquired Corporations is as of the date of this Agreement, and at all times from January 1, 2000 through the date of this Agreement has been, in material compliance with the terms and requirements of such Governmental Authorizations. From January 1, 2000 through the date of this Agreement, none of the Acquired Corporations has received any written notice or, to the Knowledge of the Company, any other communication from any Governmental Body regarding (a) any actual or possible violation of or failure to comply with any term or requirement of any material Governmental Authorization, or (b) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any material Governmental Authorization. No Governmental Body has at any time from January 1, 2000 challenged in writing the right of any of the Acquired Corporations to develop, manufacture, offer or sell any of the Company Pharmaceutical Products. (b) Each Company Pharmaceutical Product is being as of the date of this Agreement, and at all times from January 1, 2000 through the date of this Agreement has been, developed, tested, manufactured, labeled, stored, distributed and marketed in compliance 24. in all material respects with all applicable Legal Requirements, including those relating to investigational use, premarket clearance, good manufacturing practices, good clinical practices, good laboratory practices, recordkeeping, filing of reports and security. (c) The Company has made available to Parent each annual report filed by any of the Acquired Corporations with the FDA with respect to any Company Pharmaceutical Product or any similar state or foreign Governmental Body from January 1, 2000 through the date of this Agreement. (d) The Company has made available to Parent (i) accurate and complete copies of each New Drug Application ("NDA") and Investigational New Drug Application ("IND") and each similar state or foreign regulatory filing made on behalf of any of the Acquired Corporations from January 1, 2000 through the date of this Agreement, including all supplements, amendments and annual reports (and with respect to the NDA for Coviracil filed by the Company with the FDA on September 3, 2002 (the "Coviracil NDA"), has provided such NDA to Parent) and (ii) all material correspondence received from the FDA and similar state and foreign Governmental Bodies from January 1, 2000 through the date of this Agreement that concerns a Company Pharmaceutical Product. (e) As of the date of this Agreement, none of the Acquired Corporations has Knowingly made an untrue statement of a material fact or fraudulent statement to the FDA or any similar state or foreign Governmental Body, Knowingly failed to disclose a material fact required to be disclosed to the FDA or any similar state or foreign Governmental Body, or Knowingly committed an act, made a statement or failed to make a statement, that (in any such case) establishes a basis for the FDA to invoke its policy respecting "Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities," set forth in 56 Fed. Reg. 46191 (September 10, 1991). None of the Acquired Corporations, nor any officer, employee or to the Knowledge of the Acquired Corporations, any (i) agent of any of the Acquired Corporations or (ii) principal investigator or sub-investigator of any clinical investigation sponsored by any of the Acquired Corporations has, on account of actions taken for or on behalf of any Acquired Corporation, been convicted of any crime under 21 U.S.C. Section 335s(a) or any similar state or foreign Legal Requirement or under 21 U.S.C. Section 335a(b) or any similar state or foreign Legal Requirement. (f) From January 1, 2000 through the date of this Agreement, no Company Pharmaceutical Product has been recalled, suspended or discontinued as a result of any action by the FDA or any similar state or foreign Governmental Body. From January 1, 2000 through the date of this Agreement, no clinical trial of a Company Pharmaceutical Product has been suspended, put on hold or terminated prior to completion, and no IND for a Company Pharmaceutical Product has been suspended, withdrawn, rejected or refused, in each case, as a result of any action by the FDA or any similar state or foreign Governmental Body or voluntarily by any of the Acquired Corporations based on serious adverse effects on human health. None of the Acquired Corporations, no marketing partner nor marketing licensee of an Acquired Corporation for any Company Pharmaceutical Product (with respect to each Company Pharmaceutical Product licensed to such marketing partner or marketing licensee), nor any Company Partner (with respect to each Company Pharmaceutical Product manufactured by such Company Partner), has received any written notice or, to the Knowledge of the Company, other 25. communication from January 1, 2000 through the date of this Agreement indicating that the FDA or any similar state or foreign Governmental Body has commenced or threatened to initiate any action to withdraw approval, terminate clinical development, request the recall of any Company Pharmaceutical Product, or to enjoin or place any material restriction on the production, sale, marketing, reimbursement or testing of any Company Pharmaceutical Product. 3.15 TAX MATTERS. (a) Each of the Tax Returns required to be filed by or on behalf of the respective Acquired Corporations with any Governmental Body with respect to any taxable period ending on or before the Closing Date (the "Acquired Corporation Returns") (i) has been or will be filed on or before the applicable due date (including any extensions of such due date), and (ii) has been, or will be when filed, prepared in all material respects in compliance with all applicable Legal Requirements. All amounts shown on the Acquired Corporation Returns to be due on or before the Closing Date have been or will be paid on or before the Closing Date. (b) The Unaudited Interim Balance Sheet fully accrues all actual and contingent liabilities for Taxes with respect to all periods through September 30, 2002 in accordance with generally accepted accounting principles. Each of the Acquired Corporations will establish, in the ordinary course of business and consistent with its past practices, reserves adequate for the payment of all Taxes for the period from September 30, 2002 through the Closing Date. (c) No Acquired Corporation Return has been examined or audited since January 1, 2000, and no Acquired Corporation has received written notice of any current examination or audit by any Governmental Body. No current extension or waiver of the limitation period applicable to any of the Acquired Corporation Returns has been granted by any Acquired Corporation, and no such extension or waiver has been requested from any of the Acquired Corporations. (d) No claim or Legal Proceeding is pending as of the date of this Agreement or, to the Knowledge of the Company, has been threatened against or with respect to any of the Acquired Corporations in respect of any material Tax. There are no material unsatisfied liabilities for Taxes (including liabilities for interest, additions to tax and penalties thereon and related expenses) with respect to any notice of deficiency or similar document received by any of the Acquired Corporations with respect to any material Tax (other than liabilities for Taxes asserted under any such notice of deficiency or similar document which are being contested in good faith by the Acquired Corporations and with respect to which adequate reserves for payment have been established on the Unaudited Interim Balance Sheet). There are no liens for material Taxes upon any of the assets of any of the Acquired Corporations except liens for current Taxes not yet due and payable. None of the Acquired 26. Corporations has entered into or become bound by any agreement or consent pursuant to Section 341(f) of the Code (or any comparable provision of state or foreign Tax laws). None of the Acquired Corporations has been, and none of the Acquired Corporations will be, required to include any adjustment in taxable income for any tax period (or portion thereof) pursuant to Section 481 or 263A of the Code (or any comparable provision of state or foreign Tax laws) as a result of any transaction or event occurring, or accounting methods employed, prior to the Closing. None of the Acquired Corporations has made any distribution of stock of any controlled corporation, as that term is defined in Code Section 355(a)(1). (e) There is no agreement, plan, arrangement or other Contract covering any employee or independent contractor or former employee or independent contractor of any of the Acquired Corporations that, considered individually or considered collectively with any other such Contracts, is reasonably likely to give rise directly or indirectly to the payment of any amount that would not be deductible pursuant to Section 280G or Section 162 of the Code (or any comparable provision under state or foreign Tax laws). None of the Acquired Corporations is, or has ever been, a party to or bound by any tax indemnity agreement, tax sharing agreement, tax allocation agreement or similar Contract. 3.16 EMPLOYEE AND LABOR MATTERS; BENEFIT PLANS. (a) The Company Disclosure Schedule accurately sets forth as of the date of this Agreement the following information, accurate in all material respects, with respect to each employee of each of the Acquired Corporations (including any employee of any of the Acquired Corporations who is on a leave of absence or on layoff status): (i) the name of such employee, the Acquired Corporation by which such employee is employed and the date as of which such employee was originally hired by such Acquired Corporation; (ii) such employee's title; and (iii) the salary received by such employee (A) with respect to services performed in 2001 and (B) with respect to services performed from January 1 through November 30, 2002. (b) As of the date of this Agreement, the employment of each of the Acquired Corporations' employees is terminable by the applicable Acquired Corporation at will (subject to notice periods not longer than sixty (60) days). (c) To the Knowledge of the Company, no employee of any of the Acquired Corporations is a party to or is bound by any confidentiality agreement, noncompetition agreement or other Contract (with any Person) that is reasonably likely to have a material adverse effect on the Acquired Corporations taken as a whole. (d) As of the date of this Agreement, none of the Acquired Corporations is a party to or bound by any union Contract or collective bargaining agreement. (e) As of the date of this Agreement, none of the Acquired Corporations is engaged in any unfair labor practice of any nature. From January 1, 2002 through the date of this Agreement, there has not been any slowdown, work stoppage, labor dispute or union organizing activity, or any similar activity or dispute, affecting any of the Acquired Corporations or any of their employees. As of the date of this Agreement, there is not now pending, and to the Knowledge of the Company, no Person has threatened to commence, any such slowdown, work stoppage, labor dispute or union organizing activity or any similar 27. activity or dispute. As of the date of this Agreement, there are no actions, suits, claims, labor disputes or grievances pending or, to the Knowledge of the Company, threatened relating to any labor, safety or discrimination matters involving any Company Employee, including charges of unfair labor practices or discrimination complaints. (f) Part 3.16(f) of the Company Disclosure Schedule lists each Company Employee Plan and each Company Employee Agreement in effect as of the date of this Agreement. None of the Acquired Corporations intends or has committed to establish or enter into any new Company Employee Plan, or to modify any Company Employee Plan (except to conform any such Company Employee Plan to the requirements of any applicable Legal Requirements, in each case as disclosed to Parent in writing prior to the date of this Agreement or as required by this Agreement). (g) As of the date of this Agreement: (i) each of the Acquired Corporations and Company Affiliates has performed in all material respects all material obligations required to be performed under each Company Employee Plan; (ii) none of the Acquired Corporations is in default or violation in any material respect of, and the Company does not have Knowledge of any material default or material violation by any other party to, the terms of any Company Employee Plan; (iii) each Company Employee Plan has been established and maintained substantially in accordance with its terms and in compliance in all material respects with all applicable Legal Requirements, including ERISA and the Code; (iv) any Company Employee Plan intended to be qualified under Section 401(a) of the Code has obtained a favorable determination letter (or opinion letter, if applicable) as to its qualified status under the Code; (v) no "prohibited transaction," within the meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA, that is not otherwise exempt under Section 408 of ERISA, has occurred with respect to any Company Employee Plan; (vi) there are no material claims or Legal Proceedings pending, or, to the Knowledge of the Company, threatened (other than routine claims for benefits), against any Company Employee Plan or against the assets of any Company Employee Plan; (vii) each Company Employee Plan (other than any Company Employee Plan to be terminated prior to the time any Acquired Corporation or any Company Affiliate becomes under common control with Parent within the meaning of any of Sections 414(b), 414(c), 414(m) and 414(o) of the Code in accordance with this Agreement) can be amended, terminated or otherwise discontinued after the Closing in accordance with its terms, without material liability to Parent, the Acquired Corporations or any Company Affiliate (other than ordinary administration expenses); 28. (viii) there are no audits, inquiries or Legal Proceedings pending or, to the Knowledge of the Company, threatened by the IRS, the United States Department of Labor or any other Governmental Body with respect to any Company Employee Plan; (ix) none of the Acquired Corporations nor any Company Affiliate has ever incurred any penalty or tax with respect to any Company Employee Plan under Section 502(i) of ERISA or Sections 4975 through 4980 of the Code; and (x) each of the Acquired Corporations and Company Affiliates has made all contributions and other payments required by the terms of each Company Employee Plan. (h) From January 1, 2000 through the date of this Agreement, none of the Acquired Corporations has maintained, established, sponsored, participated in or contributed to (1) any Company Employee Plan that would constitute a "defined benefit plan" within the meaning of Section 3(35) of ERISA, (2) any Company Employee Plan qualified under Section 401(a) of the Code in which capital stock of any Acquired Corporation or any Company Affiliate is or was held as a plan asset or (3) any Foreign Plan. (i) As of the date of this Agreement, no Company Employee Plan provides (except at no cost to the Acquired Corporations or any Company Affiliate), or reflects or represents any liability of any of the Acquired Corporations or any Company Affiliate to provide, retiree life insurance, retiree health benefits or other retiree employee welfare benefits to any Person for any reason, except as may be required by COBRA or other applicable Legal Requirements. Other than commitments made that involve no material future costs to any of the Acquired Corporations or any Company Affiliate, as of the date of this Agreement, none of the Acquired Corporations nor any Company Affiliate has represented, promised or committed (whether in oral or written form) to any Company Employee (either individually or to Company Employees as a group) or any other Person that any Company Employee or other Person would be provided with retiree life insurance, retiree health benefit or other retiree employee welfare benefits, except to the extent required by applicable Legal Requirements. (j) Except as expressly required or provided by this Agreement, neither (i) the execution, delivery or performance of this Agreement nor (ii) the acquisition of or payment for any shares of Company Common Stock by Acquisition Sub pursuant to the Offer or the consummation of the Merger or any of the other transactions contemplated by this Agreement will (either alone or in combination with any termination of employment or any other event or circumstance) constitute an event under any Company Employee Plan, Company Employee Agreement, trust or loan that may result (either alone or in connection with any other circumstance or event) in any payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any Company Employee. (k) Each of the Acquired Corporations and Company Affiliates: (i) is as of the date of this Agreement and at all times from January 1, 2000 through the date of this Agreement has been in substantial compliance with all applicable Legal Requirements with 29. respect to employment, employment practices, terms and conditions of employment and wages and hours, in each case, with respect to Company Employees, including the health care continuation requirements of COBRA, the requirements of FMLA, the requirements of HIPAA and the requirements of any similar provisions of state law; (ii) has withheld and reported all amounts required by applicable Legal Requirements or by Contract to be withheld and reported with respect to wages, salaries and other payments to Company Employees; (iii) is not liable for any arrears of wages or any taxes or any penalty for failure to comply with the Legal Requirements applicable to the foregoing; and (iv) is not liable for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Body with respect to unemployment compensation benefits, social security or other benefits or obligations for Company Employees (other than routine payments to be made in the normal course of business and consistent with past practice). There are no pending or, to the Knowledge of the Company, threatened claims or Legal Proceedings against any of the Acquired Corporations or any Company Affiliate under any workers' compensation policy or long-term disability policy. 3.17 ENVIRONMENTAL MATTERS. As of the date of this Agreement, each of the Acquired Corporations (i) is in compliance in all material respects with all, and is not subject to any material liability under any, applicable material Environmental Laws, and (ii) possesses all material permits and other material Governmental Authorizations required under applicable material Environmental Laws, and is in compliance in all material respects with the terms and conditions thereof. (For purposes of this Section 3.17: (A) "Environmental Law" means any federal, state, local or foreign Legal Requirement relating to pollution or protection of human health or the environment (including ambient air, surface water, ground water, land surface or subsurface strata), including any law or regulation relating to emissions, discharges, releases or threatened releases of Materials of Environmental Concern, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern; and (B) "Materials of Environmental Concern" means chemicals, radioactive compounds, infectious disease agents, pollutants, contaminants, wastes, toxic substances, petroleum and petroleum products and any other substance that is regulated by any Environmental Law.) 3.18 INSURANCE. The Company has made available to Parent copies of all material insurance policies and all material self insurance programs and arrangements relating to the business, assets and operations of the Acquired Corporations. As of the date of this Agreement, each of such insurance policies is in full force and effect. From January 1, 2000 through the date of this Agreement, none of the Acquired Corporations has received any written notice regarding any actual or threatened (a) cancellation or invalidation of any insurance policy, (b) refusal of any coverage or rejection of any material claim under any insurance policy, or (c) material adjustment in the amount of the premiums payable with respect to any insurance policy. 30. 3.19 LEGAL PROCEEDINGS; ORDERS. (a) As of the date of this Agreement, there is no pending Legal Proceeding, and (to the Knowledge of the Company) no Person has threatened to commence any Legal Proceeding: (i) that involves any of the Acquired Corporations or any of the assets owned or used by any of the Acquired Corporations, except as otherwise would not have a material adverse effect on the Acquired Corporations taken as a whole; or (ii) that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise materially interfering with, the Offer, the Merger or any of the other transactions contemplated by this Agreement. (b) As of the date of this Agreement, there is no order, writ, injunction, judgment or decree applicable to any of the Acquired Corporations by name, or specifically applicable to any of the assets owned or used by any of the Acquired Corporations, that has not been fully performed or satisfied. 3.20 AUTHORITY; INAPPLICABILITY OF ANTI-TAKEOVER STATUTES; BINDING NATURE OF AGREEMENT. Subject in the case of the Merger to the adoption of this Agreement by the holders of the Company Common Stock (if necessary), the Company has the corporate right, power and authority to enter into and to perform its obligations under this Agreement and the Financing Documents. The board of directors of the Company (at a meeting duly called and held) has, (a) determined that this Agreement and the transactions contemplated by this Agreement, including the Offer and the Merger, are in the best interests of the Company's stockholders, (b) approved and adopted this Agreement and the transactions contemplated by this Agreement, including the Offer and the Merger, in accordance with the requirements of the DGCL, (c) declared that this Agreement is advisable, (d) resolved to recommend that the stockholders of the Company accept the Offer and tender their shares of Company Common Stock pursuant to the Offer and (if required by applicable law) adopt this Agreement and approve the Merger, and (e) to the extent necessary, adopted a resolution for the purpose of causing the Company not to be subject to any state takeover law or similar Legal Requirement that might otherwise apply to this Agreement, any of the Stockholder Agreements, any of the Financing Documents, the Offer, the Merger or any of the other transactions contemplated by this Agreement, any of the Stockholder Agreements or any of the Financing Documents. This Agreement and the Financing Documents constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies. 3.21 SECTION 203 OF THE DGCL NOT APPLICABLE. As of the date hereof and at all times on or prior to the Effective Time, the board of directors of the Company has and will take all actions necessary to ensure that the restrictions applicable to business combinations contained in Section 203 of the DGCL are not, and will not be, applicable to the execution, delivery or performance of this Agreement or any of the Stockholder Agreements or the purchase of or payment for shares of Company Common Stock pursuant to the Offer, or to the consummation of the Merger or any of the other transactions contemplated by this Agreement or any of the Stockholder Agreements or any of the Financing Documents. Prior to the execution of the Stockholder Agreements, the board of directors of the Company approved the Stockholder Agreements and the transactions contemplated thereby. 31. 3.22 INTENT TO TENDER; VOTE REQUIRED. As of the date of this Agreement, the Company has been advised and believes in good faith that all of its directors and executive officers currently intend to tender all of their shares of Company Common Stock pursuant to the Offer. If required under applicable Legal Requirements, the affirmative vote of the holders of a majority of the shares of Company Common Stock outstanding on the record date for the Company Stockholders' Meeting (the "Required Company Stockholder Vote") is the only vote of the holders of any class or series of the Company's capital stock necessary to adopt this Agreement, approve the Merger or consummate any of the other transactions contemplated by this Agreement. 3.23 NON-CONTRAVENTION; CONSENTS. Subject in the case of the Merger to the adoption of this Agreement by the holders of the Company Common Stock (if necessary), and subject to the introductory clauses of the following sentence, and except as otherwise would not have a material adverse effect on the Acquired Corporations taken as a whole, neither (1) the execution, delivery or performance of this Agreement or any of the Financing Documents, nor (2) the acquisition by Acquisition Sub of any shares of Company Common Stock pursuant to the Offer or the consummation of the Merger or any of the other transactions contemplated by this Agreement or the Financing Documents, will directly or indirectly (with or without notice or lapse of time): (a) contravene or otherwise violate (i) any of the provisions of the certificate of incorporation, bylaws or other charter or organizational documents of any of the Acquired Corporations, or (ii) any applicable resolution adopted by the stockholders, the board of directors or any committee of the board of directors of any of the Acquired Corporations; (b) contravene or otherwise violate any Legal Requirement or any order, writ, injunction, judgment or decree to which any of the Acquired Corporations, or any of the assets owned or used by any of the Acquired Corporations, is subject; (c) contravene or otherwise violate any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any material Governmental Authorization that is held by any of the Acquired Corporations or that otherwise relates to the business of any of the Acquired Corporations or to any of the assets owned or used by any of the Acquired Corporations; (d) contravene or otherwise violate or breach, or result in a default under, any provision of any Material Contract, or give any Person the right to (i) declare a default or exercise any remedy under any Material Contract or (ii) cancel, terminate or modify any term of any Material Contract; (e) result in the imposition or creation of any material Encumbrance upon or with respect to any material asset owned or used by any of the Acquired Corporations (except for liens that will not, in any case or in the aggregate, materially detract from the value of the assets subject thereto or materially impair the operations of any of the Acquired Corporations); or 32. (f) result in the transfer of any material asset of any of the Acquired Corporations to any Person. Subject in the case of the Merger to the adoption of this Agreement by the holders of the Company Common Stock (if necessary), except as may be required by the Exchange Act, the DGCL, the HSR Act, any foreign antitrust law or regulation and the NASD Bylaws (as they relate to the Proxy Statement), none of the Acquired Corporations was, is or will be required to make any filing with or give any notice to, or to obtain any Consent from, any Person in connection with (x) the execution, delivery or performance of this Agreement, any of the Stockholder Agreements or any of the Financing Documents, (y) the acquisition of or payment for any shares of Company Common Stock by Acquisition Sub pursuant to the Offer or (z) the consummation of the Merger or any of the other transactions contemplated by this Agreement, any of the Stockholder Agreements or any of the Financing Documents. 3.24 FAIRNESS OPINION. The Company's board of directors has received the written opinion of Banc of America Securities, LLC, financial advisor to the Company, dated the date of this Agreement, to the effect that the Offer Price is fair to the stockholders of the Company from a financial point of view. The Company has furnished an accurate and complete copy of said written opinion to Parent. 3.25 FINANCIAL ADVISOR. Except for Banc of America Securities, LLC, no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the Offer, the Merger or any of the other transactions contemplated by this Agreement or any of the Financing Documents based upon arrangements made by or on behalf of any of the Acquired Corporations. The Company has furnished to Parent accurate and complete copies of all agreements under which any such fees, commissions or other amounts have been paid to or may become payable and all indemnification and other agreements related to the engagement of Banc of America Securities, LLC. 3.26 COMPANY RIGHTS AGREEMENT. The Company has amended the Company Rights Agreement to provide that: (a)(i) neither Parent nor Acquisition Sub, nor any affiliate of Parent or Acquisition Sub, shall be deemed to be an Acquiring Person (as defined in the Company Rights Agreement), (ii) no Distribution Date (as defined in the Company Rights Agreement), Triggering Event (as defined in the Company Rights Agreement) or Shares Acquisition Date (as defined in the Company Rights Agreement) shall be deemed to occur and (iii) the Rights will not separate from the Company Common Stock, in the case of each of clauses "(i)," "(ii)" or "(iii)," as a result of the execution, delivery or performance of this Agreement, the Stockholder Agreements, the Financing Documents or the purchase of or payment for shares of Company Common Stock pursuant to the Offer, or the consummation of the Merger or any of the other transactions contemplated by this Agreement or thereby or the public announcement of the execution and delivery of this Agreement, the Stockholder Agreements or the Financing Documents; (b) the moment in time immediately prior to the Effective Time shall be the "Final Expiration Date" (as defined in the Company Rights Agreement); and (c) none of the Company, Parent, Acquisition Sub or the Surviving Corporation, nor any of their respective affiliates, shall have any obligations under the Company Rights Agreement to any holder (or former holder) of Rights as of or following the Effective Time. 33. 3.27 FULL DISCLOSURE. None of the information supplied or to be supplied by or on behalf of the Company for inclusion or incorporation by reference in the Offer Documents or the Schedule 14D-9 will, at the time the Offer Documents and the Schedule 14D-9 are mailed to the stockholders of the Company or at any time between the time the Offer Documents and the Schedule 14D-9 are mailed to the stockholders of the Company and the Acceptance Date, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. SECTION 4. REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION SUB Parent and Acquisition Sub represent and warrant to the Company as follows: 4.1 VALID EXISTENCE. Parent and Acquisition Sub are corporations duly incorporated, validly existing and in good standing under the laws of the State of Delaware. 4.2 AUTHORITY; BINDING NATURE OF AGREEMENT. Parent and Acquisition Sub have the corporate right, power and authority to enter into and to perform their obligations under this Agreement and the Financing Documents. The execution, delivery and performance by Parent and Acquisition Sub of this Agreement and the Financing Documents have been duly authorized by all necessary action on the part of Parent and Acquisition Sub and their respective boards of directors. This Agreement and the Financing Documents constitute the legal, valid and binding obligations of Parent and Acquisition Sub, enforceable against them in accordance with its terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies. 4.3 NON-CONTRAVENTION; CONSENTS. Neither the execution and delivery of this Agreement by Parent and Acquisition Sub nor the acquisition of or payment for any shares of Company Common Stock by Acquisition Sub pursuant to the Offer or the consummation of the Merger or any of the other transactions contemplated by this Agreement will (a) contravene, conflict with or result in a violation of any breach of any provisions of the certificate of incorporation or bylaws of Parent or Acquisition Sub, (b) result in a default by Parent or Acquisition Sub under any material Contract to which Parent or Acquisition Sub is a party or (c) contravene, conflict with or result in a material violation by Parent or Acquisition Sub of any Legal Requirement, order, writ, injunction, judgment or decree to which Parent or Acquisition Sub is subject. 4.4 DISCLOSURE. None of the information supplied or to be supplied by or on behalf of Parent for inclusion in the Offer Documents will, at the time the Offer Documents are mailed to the stockholders of the Company or at any time between the time the Offer Documents are mailed to the stockholders of the Company and the Acceptance Date, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. None of the information supplied by Parent or Acquisition Sub to the Company for inclusion in the Schedule 14D-9 pursuant to Section 1.3(b) shall, at the time of the filing with the SEC of the Schedule 14D-9, contain any untrue statement of a material fact or 34. omit to state any material fact required to be stated therein or necessary in order that the statements made therein, in light of the circumstances under which they were made, not misleading. None of the information supplied or to be supplied by or on behalf of Parent for inclusion in the Proxy Statement will, at the time the Proxy Statement is filed with the SEC or at the time the Proxy Statement is mailed to the stockholders of the Company or (including any corrections or modifications made by Parent or Acquisition Sub to such information) at the time of the Company Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. 4.5 FORECASTS, ETC. Neither Parent nor Acquisition Sub has relied on any financial forecast, revenue projection, or financial model made available by the Company to Parent or its Representatives, it being understood that Parent and Merger Sub are solely responsible for developing for themselves, together with their Representatives, any such financial information concerning the Company or its business for or in connection with the transactions contemplated by this Agreement. 4.6 SUFFICIENT FUNDS. Parent and Acquisition Sub have and will have sufficient funds to enable them to consummate the transactions contemplated by this Agreement in accordance with the terms of this Agreement and the payment of all fees and expenses incurred by Parent and Acquisition Sub in connection with such transactions. 4.7 FINANCIAL ADVISOR. Except for Goldman Sachs & Co., no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the Offer, the Merger or any of the other transactions contemplated by this Agreement based upon arrangements made by or on behalf of Parent or Acquisition Sub. SECTION 5. CERTAIN COVENANTS OF THE COMPANY 5.1 ACCESS AND INVESTIGATION. (a) During the period from the date of this Agreement through the Effective Time (the "Pre-Closing Period") and subject to applicable Legal Requirements, the Company shall, and shall cause the respective Representatives of the Acquired Corporations to: (a) provide Parent and Parent's Representatives with reasonable access during normal business hours to the Acquired Corporations' Representatives, personnel, facilities and assets and to all existing books, records, Tax Returns, work papers and other documents and information relating to the Acquired Corporations (it being understood that such access will be coordinated through the Company's General Counsel or any individual designated by the Company's General Counsel); and (b) provide Parent and Parent's Representatives with such copies of the existing books, records, Tax Returns, work papers and other documents and information relating to the Acquired Corporations as Parent may reasonably request. Without limiting the generality of the foregoing, during the Pre-Closing Period, the Company shall promptly provide to Parent (at the Company's reasonable election) either copies of or access to: (i) all material operating and financial reports prepared by the Acquired Corporations for the Company's senior management, including (A) copies of 35. the unaudited monthly consolidated balance sheets of the Acquired Corporations and the related unaudited monthly consolidated statements of operations, statements of stockholders' equity and statements of cash flows and (B) copies of any development plans, write-off reports, hiring reports and capital expenditure reports prepared for the Company's senior management; (ii) any written materials or communications sent by or on behalf of the Company to its stockholders; (iii) any material notice, document or other communication sent by or on behalf of any of the Acquired Corporations to any party to any Material Contract or sent to any of the Acquired Corporations by any party to any Material Contract (other than any communication that relates solely to routine commercial transactions between an Acquired Corporation and the other party to any such Material Contract and that is of the type sent in the ordinary course of business and consistent with past practices); (iv) any notice, report or other document filed with or sent to any Governmental Body on behalf of any of the Acquired Corporations in connection with the Offer, the Merger or any of the other transactions contemplated by this Agreement; (v) any (i) material notice, report, correspondence, action, document or other communication received by any of the Acquired Corporations or (to the Knowledge of the Company) any Company Partner from, or sent on behalf of any of the Acquired Corporations or (to the Knowledge of the Company) any Company Partner to, the FDA or any other similar Governmental Body relating to the clinical or regulatory status of any Company Pharmaceutical Product or (ii) material notice, report or other document received by any of the Acquired Corporations from, or sent on behalf of any of the Acquired Corporations to, any other Governmental Body; (vi) promptly after it is available, access to a copy of the MAA (as defined in Section 5.2(c)(ii)) and the Coviracil NDA; (vii) any order or proposed order for any Company Pharmaceutical Product (whether in bulk active pharmaceutical or finished product form), placed by any of the Acquired Corporations with Abbott or any other Person; and (viii) for each Company Pharmaceutical Product, all master and executed clinical and commercial batch production records for manufacturing thereof in bulk active pharmaceutical and finished product form. (b) Without limiting the generality of anything contained in Section 5.2(a), during the Pre-Closing Period, the Company shall ensure that its officers confer and consult with Parent and Parent's Representatives on a reasonable, periodic basis concerning operational, financial, regulatory, intellectual property, manufacturing and clinical matters and otherwise report regularly to Parent concerning the status of the business of the Acquired Corporations. 36. (c) The Company shall use reasonable efforts to enable Parent to meet with Representatives of Emory University for the purpose of obtaining information regarding the relationships between the Acquired Corporations and Emory University. 5.2 OPERATION OF THE COMPANY'S BUSINESS. (a) Except as otherwise expressly permitted under this Agreement or as specified in the Company Disclosure Schedule, as required by the Financing Documents or as reasonably necessary to comply with applicable Legal Requirements, during the Pre-Closing Period: (i) the Company shall use reasonable efforts to ensure that each of the Acquired Corporations (A) conducts its business and operations in the ordinary course and in accordance with past practices, and (B) preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, Producers, Company Partners, strategic partners, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Acquired Corporations, other than where the failure to maintain such relations and goodwill is commercially reasonable and is not reasonably likely to have an effect on the Acquired Corporations of a magnitude in excess of $50,000 (individually), or where the Company receives Parent's prior written approval; (ii) the Company shall use commercially reasonable efforts to ensure that each of the Acquired Corporations conducts its business and operations in compliance in all material respects with all applicable Legal Requirements and the requirements of all Material Contracts; (iii) the Company shall use commercially reasonable efforts to keep in full force all insurance policies referred to in Section 3.18 or comparable replacements, except where the Company receives Parent's prior written approval; and (iv) the Company shall promptly notify Parent of (A) any written notice (or other communication known to the Company) received from any Person alleging that the Consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement, and (B) any material Legal Proceeding commenced or, to the Knowledge of the Company, threatened against, relating to or involving or otherwise affecting any of the Acquired Corporations. (b) During the Pre-Closing Period, the Company shall use commercially reasonable efforts to (i) effectuate the transfer from Abbott to Yuhan (or with the consent of Parent not to be unreasonably withheld, another third party) of the technology necessary to manufacture Bulk Emtricitabine in accordance with Exhibit 18 of the Abbott Agreement and in accordance with the plans, procedures, requirements and timetable set forth in Schedule 5.2(b)(i) and (ii) effectuate the transfer from Abbott to a third-party contract manufacturer of the technology necessary to formulate Finished Emtricitabine from Bulk Emtricitabine as promptly as reasonably practicable. (c) During the Pre-Closing Period, the Company shall use commercially reasonable efforts to: (i) prosecute and secure the approval by the FDA of the Coviracil NDA; and (ii) file with the European Medicines Evaluation Agency (the "EMEA"), and prosecute and secure approval by the EMEA of, a Marketing Authorisation Application for marketing approval of Coviracil in the European Union (the "MAA"). (d) During the Pre-Closing Period, the Company shall (i) consult with Parent in connection with any proposed meeting with the FDA or any other Governmental Body 37. relating to any Company Pharmaceutical Product and promptly provide Parent with a summary report of any such meeting that occurs and (ii) provide Parent and its Representatives with a reasonable opportunity to review any filing made on or after December 11, 2002 and any correspondence or other material communication, proposed to be submitted or otherwise transmitted to the FDA or any other Governmental Body on behalf of any of the Acquired Corporations relating to any Company Pharmaceutical Product. (e) During the Pre-Closing Period, the Company shall (i) make and keep Parent reasonably informed of the Company's plans and arrangements to obtain and maintain the quantities of Bulk Emtricitabine and Finished Emtricitabine and related raw materials and components, and (ii) use commercially reasonable efforts to obtain and maintain on a commercially reasonable basis quantities of Bulk Emtricitabine and Finished Emtricitabine and related raw materials and components that the Company reasonably expects to be required by the Acquired Corporations to make sales of Coviracil for one year. (f) During the Pre-Closing Period, except as otherwise expressly permitted or required by this Agreement or the Financing Documents, without the prior written consent of Parent, the Company shall not, and shall not permit either of its Subsidiaries to: (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities; (ii) sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security, (B) any option, call, warrant or right to acquire any capital stock or other security, or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that (1) the Company may issue shares of Company Common Stock (x) upon the valid exercise of Company Options outstanding as of the date of this Agreement or issued in a manner permitted by this Agreement, and (y) pursuant to the ESPP, and (2) the Company may (x) in the ordinary course of business grant options in 2002 to purchase no more than a total of 2,500,000 shares of Company Common Stock in the aggregate pursuant to the Company Option Plan, and (y) in the ordinary course of business and consistent with past practices grant options to purchase no more than 200,000 shares of Company Common Stock in the aggregate in each calendar month in 2003 prior to the Acceptance Date pursuant to the Company Stock Option Plan; provided that such options (1) are issued only to employees of the Company and (2) have an exercise price equal to the fair market value of the Company Common Stock covered by such options as of the time of grant of such options; (iii) except as may be required by applicable Legal Requirements, amend or waive any of its rights under, or alter the acceleration of vesting under, any provision of the Company Option Plan, the CEO Incentive Plan, any provision of any agreement evidencing any outstanding Company Option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract; 38. (iv) amend or terminate the Company Rights Agreement or amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction; (v) form any Subsidiary or acquire any equity interest or other interest in any other Entity; (vi) make any capital expenditure (except that the Acquired Corporations may make capital expenditures that, when added to all other capital expenditures made on behalf of the Acquired Corporations during the Pre-Closing Period, do not exceed $2,200,000 in the aggregate); (vii) except as otherwise expressly permitted by this Section 5.2, enter into or become bound by, or permit any of the material assets owned or used by it to become bound by, any Material Contract, or amend or terminate, or waive or exercise any material right or remedy under, any Material Contract, in each case other than in the ordinary course of business consistent with past practices; (viii) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices or for non-exclusive licenses to other Persons granted only for research or to enable third parties to render services for the Acquired Corporations), or waive or relinquish any material right; (ix) commence, sponsor, participate in, or provide funding for any clinical trial except those trials being conducted as of the date of this Agreement or for which the Company has a written protocol proposal as of the date of this Agreement; (x) place, cancel or modify any order for any Company Pharmaceutical Product (in bulk active pharmaceutical or finished product form) other than the placement of orders that are reasonably necessary for the Company to comply with its obligations under Section 5.2(e)(ii) to maintain adequate and suitable quantities of Company Pharmaceutical Product to conduct trials permitted by Section 5.2(f)(ix); (xi) enter into any Contract covering multiple manufacturing "campaigns" or any Contract with a term of more than 270 days, in each case for manufacture of any Company Pharmaceutical Product (in bulk active pharmaceutical or finished product form) or any raw material relating to such manufacture, that cannot be terminated (without penalty) within 60 days after delivery of a termination notice by the Company; 39. (xii) other than in the ordinary course of business consistent with past practices, write off as uncollectible, or establish any extraordinary reserve with respect to, any receivable or other indebtedness; (xiii) make any pledge of any of its assets or permit any of its material assets to become subject to any Encumbrances other than Encumbrances of the type described in Section 3.6(1) and (2); (xiv) lend money to any Person, or incur or guarantee any indebtedness (except that the Company may make routine borrowings and advancement of expenses in the ordinary course of business and in accordance with past practices); (xv) except as may be required by applicable Legal Requirements, adopt, establish, enter into or amend any employee benefit plan, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees (except that the Company (A) may make routine, reasonable salary increases in connection with the Company's customary employee review process, and (B) may pay customary bonus payments and profit sharing payments consistent with past practices payable in accordance with existing bonus and profit sharing plans referred to in Part 3.16(g) of the Company Disclosure Schedule); (xvi) hire any employee or promote any employee (except that the Company may hire or promote any employee in order to fill a necessary position vacated after the date of this Agreement if the Company has provided Parent with notice of the Company's intent to hire or promote such employee at least ten days prior to the hiring or promotion of such employee); (xvii) except as may be required by applicable Legal Requirements, change in any material respect any of its personnel policies or other business policies, or any of its methods of accounting or accounting practices in any material respect; (xviii) make any material Tax election; (xix) commence (except to the extent reasonably necessary to avoid the actual or potential loss of any material legal right of the Acquired Corporations) or settle any Legal Proceeding; or (xx) agree, commit or offer to take any of the actions described in clauses "(i)" through "(xix)" of this Section 5.2(f). (g) During the Pre-Closing Period, the Acquired Corporations shall use commercially reasonable efforts to maintain adequate and suitable quantities of Emtricitabine, Amdoxovir and Clevudine in bulk active pharmaceutical and finished product form for the conduct of all clinical trials being conducted by or on behalf of any of the Acquired Corporations. 40. (h) During the Pre-Closing Period, the Company shall not willfully conceal from Parent: (i) its Knowledge of any material inaccuracy in any representation or warranty made by the Company in this Agreement as of the date hereof; (ii) its Knowledge of any material breach of any covenant or obligation of the Company hereunder; or (iii) if Acquisition Sub shall not yet have accepted for payment any shares of Company Common Stock pursuant to the Offer, the Company's Knowledge of an event, condition, fact or circumstance that the Company Knows makes the timely satisfaction of any of the Offer Conditions impossible. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any Legal Proceeding or material claim threatened in writing or commenced against or with respect to any Acquired Corporation. No notifications given to Parent pursuant to this Section 5.2(h) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or constitute an admission by the Company that any such material inaccuracy or breach has actually occurred. For the avoidance of doubt, the events in clauses "(i) - (iii)" above, respectively, are Knowledge of each inaccuracy, breach or impossibility, not just knowledge of the underlying facts giving rise thereto. 5.3 NO SOLICITATION. (a) The Company shall not directly or indirectly, and shall not authorize or permit either of its Subsidiaries or any Representative of any of the Acquired Corporations directly or indirectly to, (i) solicit, initiate, intentionally encourage, intentionally induce or intentionally facilitate the making, submission or announcement of any Acquisition Proposal (whether by amending, or granting any waiver under, the Company Rights Agreement or otherwise) or take any action that would reasonably be expected to lead to an Acquisition Proposal, (ii) furnish any information regarding any of the Acquired Corporations to any Person in connection with or in response to an Acquisition Proposal or an inquiry or indication of interest that would reasonably be expected to lead to an Acquisition Proposal, (iii) engage in discussions or negotiations with any Person with respect to any Acquisition Proposal, (iv) approve, endorse or recommend any Acquisition Proposal or (v) enter into any letter of intent or similar document or any Contract contemplating or otherwise relating to any Acquisition Transaction; PROVIDED, HOWEVER, that prior to the Acceptance Date (and subject to the Company's right to terminate this Agreement pursuant to Section 8.1(h)), this Section 5.3(a) shall not prohibit the Company from furnishing information regarding the Acquired Corporations to, or entering into discussions or negotiations with, any Person in response to a Superior Offer that is submitted to the Company by such Person (and not withdrawn) if (1) such Superior Offer shall not have resulted directly or indirectly from any breach of this Section 5.3 or from any action taken by the Company or any of its Representatives with the intent of circumventing any of the provisions set forth in this Section 5.3, (2) the board of directors of the Company concludes in good faith, after having taken into account the advice of its outside legal counsel, that the failure to take such action would be inconsistent with the fiduciary obligations of the Company's board of directors to the Company's stockholders under applicable Legal Requirements, (3) at least one business day prior to furnishing any such information to, or entering into discussions or negotiations with, such Person, the Company gives Parent written notice of the identity of such Person and of the Company's intention to furnish information to, or enter into discussions or negotiations with, such Person, and the Company receives from such Person an executed confidentiality agreement containing provisions (including "standstill" provisions) no less 41. favorable to the Company than the provisions contained in the Confidentiality Agreement, and (4) at least one business day prior to furnishing any such information to such Person, the Company furnishes such information to Parent (to the extent such information has not been previously furnished by the Company to Parent). Without limiting the generality of the foregoing, the Company acknowledges and agrees that any breach by any Representative of any of the Acquired Corporations of, or action taken by any Representative of any of the Acquired Corporations with the intent of circumventing, any of the provisions set forth in the preceding sentence shall be deemed to constitute a breach of this Section 5.3 by the Company (whether or not such Representative is purporting to act on behalf of any of the Acquired Corporations). Notwithstanding anything to the contrary contained in this Section 5.3(a), after March 1, 2003, the Company may enter into confidential discussions regarding (but may not enter into any Contract regarding) a Contract Sales Arrangement (as defined below) with a Contract Sales Organization (as defined below) if (i) such Contract Sales Organization shall have executed and delivered to the Company a confidentiality agreement containing provisions (including "standstill" provisions) no less favorable to the Company than the terms of the Confidentiality Agreement, (ii) at least five business days prior to initiating such discussions, the Company shall have given Parent written notice of the identity of such Contract Sales Organization and of the Company's intention to enter into such discussions, (iii) the Company periodically provides Parent with term sheets and draft Contracts to keep Parent reasonably informed of the status of such discussions, and (iv) the Company otherwise keeps Parent reasonably informed with respect to the status of such discussions. For purposes of the preceding sentence: (1) "Contract Sales Organization" shall mean an Entity commonly and primarily known as a "contract sales organization" that is engaged primarily in the business of promoting products for third parties and is not, and is not a direct or indirect affiliate of, an entity commonly and primarily known as a "pharmaceutical", "biopharmaceutical" or "biotechnology" company; and (2) "Contract Sales Arrangement" shall mean an arrangement (that is terminable by the Company within three years without payment or penalty) between the Company and a Contract Sales Organization under which such Contract Sales Organization (A) would promote (and would only be granted such rights as are necessary to promote) a Company Pharmaceutical Product for a fee (which may be fixed or based upon a percentage of revenues or otherwise) but (B) would not be granted any research, development, manufacturing, sublicensing or other rights with respect to such Company Pharmaceutical Product or with respect to any Intellectual Property underlying or related to such Company Pharmaceutical Product except as necessary for the purpose of clause "(A)". (b) The Company shall, promptly (and in no event later than 24 hours) after receipt of any Acquisition Proposal, any inquiry or indication of interest that would reasonably be expected to lead to an Acquisition Proposal or any request for nonpublic information relating thereto, advise Parent orally and in writing of such Acquisition Proposal, inquiry, indication of interest or request (including the identity of the Person making or submitting such Acquisition Proposal, inquiry, indication of interest or request, and the material terms thereof) that is made or submitted by any Person prior to the Acceptance Date. The Company shall keep Parent reasonably informed with respect to the status of any such Acquisition Proposal, inquiry, indication of interest or request and any modification or proposed modification thereto. 42. (c) The Company shall immediately cease and cause to be terminated any existing discussions with any Person that relate to any Acquisition Proposal. (d) The Company agrees not to release or permit the release of any Person from, or to waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Acquired Corporations is a party or under which any of the Acquired Corporations has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company also will promptly request each Person that has executed, on or after January 1, 2002, a confidentiality agreement in connection with its consideration of a possible Acquisition Transaction or a possible acquisition of securities of the Company to return all confidential information heretofore furnished to such Person by or on behalf of any of the Acquired Corporations. (e) Nothing in this Section 5.3 or elsewhere in this Agreement shall prohibit the Company from (i) filing with the SEC a report on Form 8-K with respect to this Agreement, including a copy of this Agreement and any related agreement as exhibits to such report or (ii) taking and disclosing to its stockholders a position contemplated by Rule 14d-9, Rule 14e-2(a) or Item 1012(a) of Regulation M-A under the Exchange Act with regard to an Acquisition Proposal or (subject to Parent's rights under Section 8.1(g)) making any other disclosure to the Company's stockholders if the failure to do so would result in a violation of any applicable Legal Requirement (provided that the board of directors of the Company shall not be permitted to withdraw or modify the Company Board Recommendation in a manner adverse to Parent or Acquisition Sub except as specifically provided in Section 1.2(b)). SECTION 6. ADDITIONAL COVENANTS OF THE PARTIES 6.1 STOCKHOLDER APPROVAL; PROXY STATEMENT. (a) As promptly as practicable following the Acceptance Date (and following the expiration of any subsequent offering period), if the adoption of this Agreement by the Company's stockholders is required by law in order to consummate the Merger, the Company, acting through the Post-Acceptance Board, shall take all action necessary under all applicable Legal Requirements to call, give notice of and hold a meeting of the holders of Company Common Stock to vote on the adoption of this Agreement (the "Company Stockholders' Meeting"). The Company shall ensure that all proxies solicited in connection with the Company Stockholders' Meeting are solicited in compliance with all applicable Legal Requirements. (b) As promptly as practicable following the Acceptance Date (and following the expiration of any subsequent offering period), if the adoption of this Agreement by the Company's stockholders is required by law in order to consummate the Merger, the Company shall prepare and file with the SEC the Proxy Statement and shall use reasonable efforts to respond to any comments of the SEC or its staff and to cause the Proxy Statement to be mailed to the Company's stockholders, as promptly as practicable. The Company shall notify Parent promptly of the receipt of any comments from the SEC or its staff and of any request by the SEC or its staff for any amendment or supplement to the Proxy Statement or for additional information, and will supply Parent with copies of all correspondence between the Company or 43. any of its Representatives, on the one hand, and the SEC or its staff, on the other hand, with respect to the Proxy Statement. The Company shall give Parent an opportunity to comment on any correspondence with the SEC or its staff or any proposed material to be included in the Proxy Statement prior to transmission to the SEC or its staff and shall not transmit any such material to which Parent reasonably objects. If at any time prior to the Company Stockholders' Meeting there shall occur any event that should be set forth in an amendment or supplement to the Proxy Statement, the Company shall promptly prepare such an amendment or supplement and, after obtaining the consent of Parent to such amendment or supplement, shall promptly transmit such amendment or supplement to the Company's stockholders. Parent shall furnish to the Company such information concerning itself and Acquisition Sub for inclusion in the Proxy Statement as may be requested by the Company and required to be included in the Proxy Statement under applicable Legal Requirements. (c) Notwithstanding anything to the contrary contained in this Agreement, if Acquisition Sub shall own, by virtue of the Offer or otherwise, at least 90% of the outstanding shares of Company Common Stock, the parties shall take all necessary and appropriate action to cause the Merger to become effective as soon as practicable without a stockholders' meeting in accordance with Section 253 of the DGCL. (d) Parent agrees to cause all shares of Company Common Stock owned by Parent or any subsidiary of Parent to be voted in favor of the adoption of the Agreement and consummation of the Merger at the Company Stockholders' Meeting. 6.2 REGULATORY APPROVALS. Each party shall use reasonable efforts to file, as soon as practicable after the date of this Agreement, all notices, reports and other documents required to be filed by such party with any Governmental Body with respect to the Offer, the Merger and the other transactions contemplated by this Agreement, and to submit promptly any additional information requested by any such Governmental Body. Without limiting the generality of the foregoing, the Company and Parent shall, promptly after the date of this Agreement, prepare and file the notifications required under the HSR Act and any applicable foreign antitrust laws or regulations in connection with the Offer, the Merger or the other transactions contemplated by this Agreement. The Company and Parent shall respond as promptly as practicable to (i) any inquiries or requests received from the Federal Trade Commission or the Department of Justice for additional information or documentation and (ii) any inquiries or requests received from any state attorney general, foreign antitrust authority or other Governmental Body in connection with antitrust or related matters. Each of the Company and Parent shall (1) give the other party prompt notice of the commencement or threat of commencement of any Legal Proceeding by or before any Governmental Body with respect to the Offer, the Merger or any of the other transactions contemplated by this Agreement, (2) keep the other party informed as to the status of any such Legal Proceeding or threat, and (3) promptly inform the other party of any communication to or from the Federal Trade Commission, the Department of Justice or any other Governmental Body regarding the Offer, the Merger or any of the other transactions contemplated by this Agreement. Except as may be prohibited by any Governmental Body or by any Legal Requirement, (a) the Company and Parent will consult and cooperate with one another, and will consider in good faith the views of one another, in connection with any analysis, appearance, presentation, memorandum, brief, argument, opinion or proposal made or submitted in connection with any Legal Proceeding under or relating to the 44. HSR Act or any other foreign, federal or state antitrust or fair trade law, and (b) in connection with any such Legal Proceeding, each of the Company and Parent will permit authorized Representatives of the other party to be present at each meeting or conference relating to any such Legal Proceeding and to have access to and be consulted in connection with any document, opinion or proposal made or submitted to any Governmental Body in connection with any such Legal Proceeding. At the request of Parent, the Company shall agree to divest, sell, license, dispose of, hold separate or otherwise take or commit to take any action that limits the ability of any of the Acquired Corporations to operate or retain any of the businesses, product lines or assets of any of the Acquired Corporations, provided that any such action is conditioned upon the consummation of the transactions contemplated by this Agreement. 6.3 STOCK OPTIONS; ESPP. (a) At the Effective Time, Parent shall cause any Company Option that is outstanding and unexercised immediately prior to the Effective Time, whether or not vested and whether or not the exercise price of such Company Option is in excess of the Offer Price, to become an option to purchase Parent Common Stock by assuming such Company Option in accordance with, and to the extent permitted by, the terms (as in effect as of the date of this Agreement) of the stock incentive plan under which such Company Option was issued and the terms of the stock option agreement by which such Company Option is evidenced. From and after the Effective Time, (i) each Company Option assumed by Parent may be exercised solely for shares of Parent Common Stock, (ii) the number of shares of Parent Common Stock subject to each Company Option assumed by Parent shall be equal to the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time multiplied by the Conversion Ratio (as defined below), rounding down to the nearest whole share, (iii) the per share exercise price under each Company Option assumed by Parent shall be adjusted by dividing the per share exercise price under such Company Option by the Conversion Ratio and rounding up to the nearest whole cent, and (iv) any restriction on the exercise of any Company Option assumed by Parent shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such Company Option shall otherwise remain unchanged (subject to any change in such Company Option triggered by the transactions contemplated by this Agreement under the express terms (as in effect on the date of this Agreement) of the stock incentive plan under which such Company Option was issued and the terms of the stock option agreement by which such Company Option is evidenced); PROVIDED, HOWEVER, that each Company Option assumed by Parent in accordance with this Section 6.3(a) shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction subsequent to the Effective Time. Parent shall file with the SEC, no later than 30 days after the date on which the Merger becomes effective, a registration statement on Form S-8 relating to the shares of Parent Common Stock issuable with respect to the Company Options assumed by Parent in accordance with this Section 6.3(a). If the assumption of any Company Option in the manner described in this Section 6.3(a) is not permitted under the terms of the stock incentive plan under which such Company Option was issued as construed by the plan administrator prior to the Acceptance Date, then Parent shall not be required to assume such Company Option in the manner described in this Section 6.3(a), and Parent shall instead be entitled to cause such Company Option to be treated in a manner permitted by the terms of such stock incentive plan. Notwithstanding anything to the 45. contrary contained in this Section 6.3, in lieu of assuming an outstanding Company Option in accordance with this Section 6.3(a), Parent may, at its election, cause such Company Option to be replaced by issuing a reasonably equivalent replacement stock option in substitution therefor. For purposes of this Section 6.3(a), "Conversion Ratio" shall mean the ratio of (i) the Offer Price to (ii) the closing price per share of Parent Common Stock on The Nasdaq Stock Market on the trading day immediately preceding the date on which the Merger becomes effective. (b) Prior to the Effective Time, the Company shall take all action that may be necessary (under each plan pursuant to which any Company Option is outstanding and otherwise) to effectuate the provisions of this Section 6.3 and to ensure that, from and after the Effective Time, any holder of a Company Option has no rights with respect thereto other than those specifically provided in this Section 6.3. (c) As of the Effective Time, the ESPP shall be terminated. The rights of participants in the ESPP with respect to any offering period then underway under the ESPP shall be determined by treating the last business day prior to the Effective Time as the last day of such offering period and by making such other pro-rata adjustments as may be necessary to reflect the shortened offering period but otherwise treating such shortened offering period as a fully effective and completed offering period for all purposes under the ESPP. Prior to the Effective Time, the Company shall take all actions (including, if appropriate, amending the terms of the ESPP) that are necessary to give effect to the transactions contemplated by this Section 6.3(c). 6.4 EMPLOYEE BENEFITS. (a) Parent shall make available, or shall cause the Surviving Corporation to make available, at the Effective Time, (i) to each employee of the Company who holds a position of Executive Vice President or higher as of the date of this Agreement and who remains employed by the Company immediately prior to the Effective Time, continued "at-will" employment for a minimum period of 180 days from the Effective Time, and (ii) to each employee of the Company who holds a position at a level below Executive Vice President as of the date of this Agreement and who remains employed by the Company immediately prior to the Effective Time, continued "at-will" employment for a minimum period of 120 days from the Effective Time. The terms and conditions of employment for each employee of the Company who, following the Effective Time, either continues his or her employment with the Surviving Corporation, or becomes an employee of Parent (in either case, a "Continuing Employee"), will include (x) the right to receive, during the applicable minimum period specified above, a salary and benefits under health and welfare plans that are comparable to the salary and the benefits under health and welfare plans to which such Continuing Employee is entitled as of the date of this Agreement, and (y) the right to continue receiving the salary and benefits described in clause "(x)" of this sentence for the remainder of the applicable minimum period if the employment of such Continuing Employee were terminated by the Surviving Corporation or Parent during such minimum period. Nothing contained in this Section 6.4 shall be construed to (i) limit the right of Parent or the Surviving Corporation to amend or terminate any benefit plan at any time or (ii) affect the "at-will" status of any Continuing Employee. 46. (b) Following the expiration of the applicable minimum period specified in Section 6.4(a) with respect to a Continuing Employee, such Continuing Employee (if he or she continues to be employed by the Surviving Corporation or Parent) shall have the right to receive benefits under Parent's health and welfare benefit plans that are comparable to the benefits under such plans to which similarly situated employees of Parent are then entitled. To the extent permitted by applicable Legal Requirements and the terms of such plans, for purposes of participation, vesting and differential benefits based on length of service in any such plan, all service by a Continuing Employee with the Company shall be credited toward service with Parent. (c) Parent shall, at or after the Effective Time, grant to Continuing Employees options to purchase common stock of Parent under Parent's stock option plans. Parent shall determine the levels of such stock option grants on an employee-by-employee basis, in a manner determined by Parent to be adequate to maintain continuing incentives for Continuing Employees after the Effective Time. (d) Unless otherwise directed in writing by Parent, the Company shall take (or cause to be taken) all actions necessary or appropriate to terminate, effective immediately prior to the time at which any Acquired Corporation or any Company Affiliate becomes under common control with Parent within the meaning of any of Sections 414(b), 414(c), 414(m) and 414(o) of the Code, any Company Employee Plan that contains a cash or deferred arrangement intended to qualify under Section 401(k) of the Code. 6.5 INDEMNIFICATION OF OFFICERS AND DIRECTORS. (a) All rights to indemnification by the Company existing in favor of those Persons who are directors and officers of the Company as of the date of this Agreement (the "Indemnified Persons") for their acts and omissions occurring prior to the Effective Time, as provided in the Company's bylaws (as in effect as of the date of this Agreement) and as provided in the indemnification agreements between the Company and said Indemnified Persons (as in effect as of the date of this Agreement) in the forms disclosed by the Company to Parent prior to the date of this Agreement, shall survive the Merger and shall be observed by the Surviving Corporation to the fullest extent available under Delaware law. (b) From the Effective Time until the sixth anniversary of the Effective Time, Parent shall cause the Surviving Corporation to, and the Surviving Corporation shall, maintain in effect, for the benefit of the Indemnified Persons with respect to their acts and omissions occurring prior to the Effective Time, the existing policy of directors' and officers' liability insurance maintained by the Company as of the date of this Agreement in the form disclosed by the Company to Parent prior to the date of this Agreement (the "Existing Policy"); PROVIDED, HOWEVER, that (i) the Surviving Corporation may substitute for the Existing Policy a policy or policies of comparable coverage, and (ii) the Surviving Corporation shall not be required to pay annual premiums for the Existing Policy (or for any substitute policies) in excess of $1,250,000 in the aggregate. In the event any future annual premiums for the Existing Policy (or any substitute policies) exceed in the aggregate $1,250,000, the Surviving Corporation shall be entitled to reduce the amount of coverage of the Existing Policy (or any substitute policies) to the amount of coverage that can be obtained for a premium equal to $1,250,000. 47. (c) In the event Parent or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation of such consolidation or merger, or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each such case, to the extent necessary to effectuate the purposes of this Section 6.5, proper provision shall be made so that the successors and assigns of Parent assume the obligations set forth in this Section 6.5, and none of the actions described in clause "(i)" or clause "(ii)" shall be taken until such provision is made. (d) Parent shall cause the Surviving Corporation to perform all of the Surviving Corporation's obligations under this Section 6.5. The provisions of this Section 6.5 shall be enforceable by each Indemnified Person and his heirs and representatives, and are in addition to and not in substitution for, any other right to indemnification or contribution that such Indemnified Person may have under the certificate of incorporation and bylaws of the Company or the Surviving Corporation, under any Acquired Corporation Contract, under the DGCL or otherwise. 6.6 ADDITIONAL AGREEMENTS. (a) Subject to Section 6.6(b) and the other terms and provisions of this Agreement, Parent and the Company shall use reasonable efforts to take, or cause to be taken, all actions necessary to consummate the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, but subject to Section 6.6(b) and the other terms and provisions of this Agreement, each party to this Agreement (i) shall make all filings (if any) and give all notices (if any) required to be made and given by such party in connection with the Offer and the Merger and the other transactions contemplated by this Agreement, (ii) shall use reasonable efforts to obtain each Consent (if any) required to be obtained (pursuant to any applicable Legal Requirement or Contract, or otherwise) by such party in connection with the Offer and the Merger or any of the other transactions contemplated by this Agreement, and (iii) shall use reasonable efforts to lift any restraint, injunction or other legal bar to the Offer, the Merger or any of the other transactions contemplated by this Agreement. Each party shall promptly deliver to the other parties a copy of each such filing made, each such notice given and each such Consent obtained by such party during the Pre-Closing Period. (b) Notwithstanding anything to the contrary contained in this Agreement, Parent shall not have any obligation under this Agreement: (i) to dispose of or transfer or cause any of its Subsidiaries to dispose of or transfer any assets, or to commit to cause any of the Acquired Corporations to dispose of any assets; (ii) to discontinue or cause any of its Subsidiaries to discontinue developing or offering any product; (iii) to license or otherwise make available, or cause any of its Subsidiaries to license or otherwise make available, to any Person, any right with respect to any of its products for any indication, or any other Intellectual Property or Intellectual Property Right, or to commit to cause any of the Acquired Corporations to license or otherwise make available to any Person any right with respect to Emtricitabine or any other material Company Pharmaceutical Product for any indication, or any related Intellectual Property or Intellectual Property Right; (iv) to hold separate or cause any of its Subsidiaries to hold separate any assets or operations (either before or after the Closing Date), or to commit to cause any of the Acquired Corporations to hold separate any assets or operations; or (v) to make or 48. cause any of its Subsidiaries to make any commitment (to any Governmental Body or otherwise) regarding its future operations or the future operations of any of the Acquired Corporations. 6.7 DISCLOSURE. Parent and the Company shall consult with each other and consider in good faith the comments of one another before issuing any press release or otherwise making any public statement with respect to the Offer, the Merger or any of the other transactions contemplated by this Agreement. 6.8 SECTION 16 MATTERS. Prior to the Effective Time, the Company shall take such reasonable steps as are required to cause the disposition of Company Common Stock and Company Options in connection with the Merger by each individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company to be exempt from Section 16(b) of the Exchange Act pursuant to Rule 16b-3 under the Exchange Act. If the Company delivers the Section 16 Information (as defined below) to Parent at least 30 days prior to the Effective Time, then, prior to the Effective Time, Parent shall take such reasonable steps as are required to cause the acquisition of options to purchase shares of Parent Common Stock in connection with the Merger by each individual who, immediately after the Effective Time, will become subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to Parent to be exempt from Section 16(b) of the Exchange Act pursuant to Rule 16b-3 under the Exchange Act. For purposes of this Section 6.8, "Section 16 Information" shall mean for each individual who, immediately after the Effective Time will become subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to Parent, the number of shares of Company Common Stock subject to Company Options held by such individual that are expected to be converted into options to purchase shares of Parent Common Stock in connection with the Merger. 6.9 RESIGNATION OF OFFICERS AND DIRECTORS. The Company shall use reasonable efforts to obtain and deliver to Parent at the Closing (effective as of the Effective Time) the resignation of each officer and director of each of the Acquired Corporations (other than those designees of Parent elected to the board of directors of each of the Acquired Corporations pursuant to Section 1.3), it being understood that any such resignation of an officer of the Company shall constitute a termination by the Company Without Cause upon a Change in Control (both as defined in any employment agreement to which such officer is a party) as provided in any employment agreement to which such officer is a party. 6.10 TERMINATION OF RIGHTS. The Company shall use reasonable efforts to ensure that, from and after the Effective Time, neither Warburg nor any affiliate of Warburg will have any contractual or other right or claim against the Surviving Corporation or Parent relating to the issuance, transfer or registration of any shares of Company Common Stock. 6.11 LOAN. At or before the close of business on December 10, 2002, Parent will lend the Company the sum of $50,000,000, and contemporaneously with such loan, Parent and the Company will execute and deliver the Promissory Note and the Investor Rights Agreement. 49. SECTION 7. CONDITIONS PRECEDENT TO THE MERGER The obligations of the parties to effect the Merger are subject to the satisfaction, at or prior to the Closing, of each of the following conditions: 7.1 STOCKHOLDER APPROVAL. If required by applicable law, this Agreement shall have been duly adopted by the Required Company Stockholder Vote. 7.2 NO RESTRAINTS. No temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the Merger shall have been issued by any court of competent jurisdiction and remain in effect, and there shall not be any Legal Requirement enacted or deemed applicable to the Merger that makes consummation of the Merger illegal. 7.3 CONSUMMATION OF OFFER. Acquisition Sub shall have accepted for payment and paid for shares of Company Common Stock pursuant to the Offer. SECTION 8. TERMINATION 8.1 TERMINATION. This Agreement may be terminated: (a) by mutual written consent of Parent and the Company at any time prior to the Effective Time; (b) by either Parent or the Company at any time prior to the Effective Time if a court of competent jurisdiction or other Governmental Body shall have issued a final and nonappealable order, decree or ruling, or shall have taken any other action, having the effect of permanently restraining, enjoining or otherwise prohibiting the acquisition or acceptance for payment of, or payment for, shares of Company Common Stock pursuant to the Offer or the Merger or making the purchase of or payment for shares of Company Common Stock pursuant to the Offer or the consummation of the Merger illegal; PROVIDED, HOWEVER, that a party shall not be permitted to terminate this Agreement pursuant to this Section 8.1(b) if the imposition of such order, decree or ruling or the taking of such action is attributable to the failure of such party to perform any covenant in this Agreement required to be performed by such party on or prior to the Acceptance Date; (c) by either Parent or the Company at any time prior to the Acceptance Date if the Offer shall have expired without the acceptance for payment of shares of Company Common Stock; PROVIDED, HOWEVER, that a party shall not be permitted to terminate this Agreement pursuant to this Section 8.1(c) if the failure to accept shares of Company Common Stock for payment pursuant to the Offer is attributable to a failure on the part of such party to perform any covenant in this Agreement required to be performed by such party on or prior to the Acceptance Date; (d) by either Parent or the Company at any time prior to the Acceptance Date if the acceptance for payment of shares of Company Common Stock pursuant to the Offer shall not have occurred on or prior to the close of business on June 1, 2003; PROVIDED, HOWEVER, that a party shall not be permitted to terminate this Agreement pursuant to this Section 8.1(d) if the failure to accept shares of Company 50. Common Stock for payment pursuant to the Offer by the close of business on June 1, 2003 is attributable to a failure on the part of such party to perform any covenant in this Agreement required to be performed by such party on or prior to the Acceptance Date; (e) by Parent or the Company on April 21, 2003, if (i) the condition set forth in clause "(a)," clause "(e)" or clause "(f)" of Annex II shall not have been satisfied prior to the termination of this Agreement, and (ii) the Company shall have delivered to Parent, on April 15, 2003, an irrevocable notice of intended termination of this Agreement pursuant to this Section 8.1(e); PROVIDED, HOWEVER, that the Company shall not be permitted to terminate this Agreement pursuant to this Section 8.1(e) if (A) the failure to satisfy such condition is attributable to a failure on the part of the Company to perform any covenant in this Agreement required to be performed by the Company on or prior to the Acceptance Date or (B) Parent shall have delivered to the Company on or prior to April 21, 2003 a document confirming that Parent is forgiving $20,000,000 of the principal balance of the Promissory Note; (f) by Parent or the Company on May 21, 2003, if (i) the condition set forth in clause "(a)," clause "(e)" or clause "(f)" of Annex II shall not have been satisfied prior to the termination of this Agreement, and (ii) the Company shall have delivered to Parent, on May 15, 2003, an irrevocable notice of intended termination of this Agreement pursuant to this Section 8.1(f); PROVIDED, HOWEVER, that the Company shall not be permitted to terminate this Agreement pursuant to this Section 8.1(f) if (A) the failure to satisfy such condition is attributable to a failure on the part of the Company to perform any covenant in this Agreement required to be performed by the Company on or prior to the Acceptance Date or (B) Parent shall have delivered to the Company on or prior to May 21, 2003 a document confirming that Parent is forgiving $10,000,000 of the principal balance of the Promissory Note; (g) by Parent at any time prior to the Acceptance Date (i) if a Triggering Event shall have occurred or (ii) if (A) the board of directors of the Company shall have taken any action demonstrating that the board of directors of the Company does not support the Offer or the Merger or does not believe that the Offer or the Merger is in the best interests of the Company's stockholders or (B) a tender or exchange offer relating to securities of the Company shall have been commenced by any Person (other than Parent and Acquisition Sub) and the Company shall not have sent to its securityholders, within ten business days after the commencement of such tender or exchange offer, a statement disclosing that the Company recommends rejection of such tender or exchange offer; (h) by the Company at any time prior to the Acceptance Date, in order to accept a Superior Offer and enter into the Specified Agreement (as defined below) relating to such Superior Offer, if (i) such Superior Offer shall not have resulted directly or indirectly from any breach of Section 5.3 or from any action taken by the Company or any of its Representatives with the intent of circumventing any of the provisions set forth in Section 5.3, (ii) the board of directors of the Company, after satisfying all of the requirements set forth in Section 1.2(b) and otherwise causing the Company to comply in all material respects with the provisions of this Agreement, shall have authorized the 51. Company to enter into a binding written definitive acquisition agreement providing for the consummation of a transaction constituting a Superior Offer (the "Specified Agreement"), (iii) the Company shall have delivered to Parent a written notice (that includes a copy of the Specified Agreement as an attachment) containing the Company's representation that the Specified Agreement has been duly executed and delivered to the Company by the other party thereto, that the board of directors of the Company has authorized the execution and delivery of the Specified Agreement on behalf of the Company and that the Company will enter into the Specified Agreement immediately upon termination of this Agreement pursuant to this Section 8.1(h), (iv) a period of at least three business days shall have elapsed since the receipt by Parent of such notice, and the Company shall have made its Representatives reasonably available during such period for the purpose of engaging in negotiations with Parent regarding a possible amendment of the Offer or a possible alternative transaction, (v) any proposal by Parent to amend the Offer or enter into an alternative transaction shall have been considered by the board of directors of the Company in good faith, and the Company's board of directors shall have determined in good faith (after having taken into account the advice of the Company's outside legal counsel and the advice of Banc of America Securities LLC or another independent financial advisor of nationally recognized reputation) that the terms of the proposed amended Offer (or other alternative transaction) are not as favorable to the Company's stockholders, from a financial point of view, as the transaction contemplated by the Specified Agreement, (vi) the Company shall have paid the entire outstanding principal balance of, all accrued and unpaid interest on and any other amounts owing under the Promissory Note, and (vii) the Company shall have paid to Parent the fee required to be paid to Parent pursuant to Section 8.3(c); (i) by Parent at any time prior to the Acceptance Date if (i) any of the Company's representations and warranties contained in this Agreement shall be inaccurate as of the date of this Agreement such that the condition set forth in clause "(b)" of Annex II would not be satisfied (it being understood that, for purposes of determining the accuracy of such representations and warranties as of the date of this Agreement, (A) all materiality qualifications contained in such representations and warranties shall be disregarded and (B) any update of or modification to the Company Disclosure Schedule made or purported to have been made after the date of this Agreement shall be disregarded), or (ii) any of the Company's covenants contained in this Agreement shall have been breached such that the condition set forth in paragraph "(c)" of Annex II would not be satisfied; PROVIDED, HOWEVER, that if an inaccuracy in any of the Company's representations and warranties or a breach of a covenant by the Company is curable by the Company within 30 days after the date of the occurrence of such inaccuracy or breach and the Company is continuing to exercise reasonable efforts to cure such inaccuracy or breach, then Parent may not terminate this Agreement under this Section 8.1(i) on account of such inaccuracy or breach (1) during the 30-day period commencing on the date on which the Company receives notice of such inaccuracy or breach or (2) after such 30-day period if such inaccuracy or breach shall have been cured in a manner that does not result in a breach of any covenant of the Company; (j) by the Company at any time prior to the Acceptance Date if (i) any of Parent's representations and warranties contained in this Agreement shall be materially 52. inaccurate as of the date of this Agreement, such that the inaccuracy in Parent's representations and warranties shall have a material adverse effect on Parent's ability to satisfy its obligations under this Agreement (it being understood that, for purposes of determining the accuracy of such representations and warranties as of the date of this Agreement, all materiality qualifications contained in such representations and warranties shall be disregarded), or (ii) any of Parent's covenants contained in this Agreement shall have been materially breached; PROVIDED, HOWEVER, that if an inaccuracy in any of Parent's representations and warranties or a breach of a covenant by Parent is curable by Parent within 30 days after the date of the occurrence of such inaccuracy or breach and Parent is continuing to exercise reasonable efforts to cure such inaccuracy or breach, then the Company may not terminate this Agreement under this Section 8.1(j) on account of such inaccuracy or breach (1) during the 30-day period commencing on the date on which Parent receives notice of such inaccuracy or breach or (2) after such 30-day period if such inaccuracy or breach shall have been cured in a manner that does not result in a breach of any covenant of Parent; or (k) by Parent or the Company on or after December 11, 2002 if the other party shall not have taken the actions required to be taken by such other party under Section 6.11 prior to the termination of this Agreement. 8.2 EFFECT OF TERMINATION. In the event of the termination of this Agreement as provided in Section 8.1, this Agreement shall be of no further force or effect; PROVIDED, HOWEVER, that (i) this Section 8.2, Section 8.3 and Section 9 (and the Confidentiality Agreement) shall survive the termination of this Agreement and shall remain in full force and effect, (ii) the termination of this Agreement shall not relieve any party from any liability for fraud, for any willful or knowing breach by such party of any representation or warranty set forth in this Agreement or for any breach of any covenant or obligation contained in this Agreement and (iii) no termination of this Agreement shall in any way affect any of the parties' rights or obligations with respect to any shares of Company Common Stock accepted for payment and paid for pursuant to the Offer prior to such termination. 8.3 EXPENSES; TERMINATION FEES. (a) Except as set forth in this Section 8.3, all fees and expenses incurred in connection with this Agreement and the Offer, the Merger and the other transactions contemplated by this Agreement shall be paid by the party incurring such expenses, whether or not any shares of Company Common Stock are purchased pursuant to the Offer and whether or not the Merger is consummated; PROVIDED, HOWEVER, that Parent and the Company shall share equally all fees and expenses, other than attorneys' fees, incurred in connection with the filing, printing and mailing of the Offer Documents and the Proxy Statement and any amendments or supplements thereto. (b) If (i) this Agreement is terminated by Parent or the Company pursuant to Section 8.1(c) or Section 8.1(d), (ii) at or prior to the time of the termination of this Agreement an Acquisition Proposal shall have been disclosed, announced, commenced, submitted or made and (iii) within 360 days after the date of termination of this Agreement, an Acquisition Transaction is consummated or the Company enters into a definitive agreement 53. contemplating an Acquisition Transaction, then the Company shall pay to Parent, in cash, a nonrefundable fee in an amount equal to $18,000,000 at or prior to the consummation of such Acquisition Transaction. Solely for purposes of clause "(iii)" of the preceding sentence, (1) the term "Acquisition Transaction" shall not be deemed to include a pure equity financing transaction that is not related to a merger, consolidation, amalgamation, share exchange, business combination, tender offer or exchange offer if, following such pure equity financing transaction, no Person or "group" (as defined in the Exchange Act or the rules thereunder) of Persons has beneficial or record ownership of securities representing more than 35% of the outstanding securities of any class of voting securities of any of the Acquired Corporations, (2) clause "(b)(ii)" of the definition of Acquisition Transaction shall be disregarded, and (3) each reference in the definition of Acquisition Transaction to "15%" shall be deemed to refer instead to "35%." (c) If this Agreement is terminated by Parent pursuant to Section 8.1(g)(i) or by the Company pursuant to Section 8.1(h), then the Company shall pay to Parent, in cash at the time specified in the next sentence, a nonrefundable fee in an amount equal to $18,000,000. In the case of termination of this Agreement by the Company pursuant to Section 8.1(h), the fee referred to in the preceding sentence shall be paid by the Company at or prior to the time of such termination; and in the case of termination of this Agreement by Parent pursuant to Section 8.1(g)(i), the fee referred to in the preceding sentence shall be paid by the Company within two business days after such termination. (d) If this Agreement is terminated by Parent pursuant to Section 8.1(g)(ii), then the Company shall make a nonrefundable cash payment to Parent, within two business days after such termination, in an amount equal to the lesser of $1,500,000 or the aggregate amount of all fees and expenses (including all attorneys' fees, accountants' fees and filing fees) that have been paid or that may become payable by or on behalf of Parent in connection with the preparation and negotiation of this Agreement and otherwise in connection with the Offer, the Merger or any of the other transactions contemplated by this Agreement. (e) If the Company fails to pay when due any amount payable under this Section 8.3, then (i) the Company shall reimburse Parent for all costs and expenses (including reasonable fees and reasonable disbursements of counsel) incurred in connection with the collection of such overdue amount and the enforcement by Parent of its rights under this Section 8.3, and (ii) the Company shall pay to Parent interest on such overdue amount (for the period commencing as of the date such overdue amount was originally required to be paid and ending on the date such overdue amount is actually paid to Parent in full) at a rate per annum three percentage points above the "prime rate" (as announced by Bank of America, N.A. or any successor thereto) in effect on the date such overdue amount was originally required to be paid. SECTION 9. MISCELLANEOUS PROVISIONS 9.1 AMENDMENT. This Agreement may not be amended except by an instrument in writing signed on behalf of each of Parent and the Company; PROVIDED, HOWEVER, that after the adoption of this Agreement by the Company's stockholders, no amendment shall be made which by law requires further approval of the stockholders of the Company without the further approval of such stockholders. 54. 9.2 WAIVER. (a) No failure on the part of any party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. (b) No party shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given. 9.3 NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the representations and warranties contained in this Agreement shall survive the acceptance for payment of shares of Company Common Stock pursuant to the Offer. 9.4 ENTIRE AGREEMENT; COUNTERPARTS. This Agreement and the other agreements referred to herein constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, among or between any of the parties with respect to the subject matter hereof and thereof; PROVIDED, HOWEVER, that the Confidentiality Agreement shall not be superseded and shall remain in full force and effect. This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. 9.5 APPLICABLE LAW; JURISDICTION. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. In any action between any of the parties arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement, (a) each of the parties irrevocably and unconditionally consents and submits to the jurisdiction and venue of the state and federal courts located in the State of Delaware and (b) each of the parties irrevocably waives the right to trial by jury. Each of the parties hereby irrevocably waives (to the fullest extent permitted by applicable law), and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the state or federal courts in the State of Delaware for any reason other than the failure to lawfully serve process, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in any such court (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), (c) that such action or proceeding is brought in an inconvenient forum, (d) that the venue of such action or proceeding is improper and (e) that this Agreement, or the subject matter of this Agreement, may not be enforced in or by any such court. 55. 9.6 DISCLOSURE SCHEDULE. (a) The Company Disclosure Schedule shall be arranged in separate parts corresponding to the numbered and lettered sections contained in Section 3, and the information disclosed in any numbered or lettered part shall be deemed to relate to and to qualify only the particular representation or warranty set forth in the corresponding numbered or lettered section in Section 3, and shall not be deemed to relate to or to qualify any other representation or warranty, except to the extent that it would be readily apparent to a reader reviewing such information that such information also reflects an exception to such other representation or warranty. (b) For purposes of this Agreement, as of the date of this Agreement, each statement or other item of information set forth in the Company Disclosure Schedule shall be deemed to supplement the representations and warranties to which such Company Disclosure Schedule refers. 9.7 ASSIGNABILITY; THIRD-PARTY BENEFICIARIES. This Agreement shall be binding upon, and shall be enforceable by and inure solely to the benefit of, the parties hereto and their respective successors and assigns; PROVIDED, HOWEVER, that neither this Agreement nor any of the rights of any party under this Agreement may be assigned by such party without the prior written consent of the other parties, and any attempted assignment of this Agreement or any of such rights by such party without such consent shall be void and of no effect. Other than Section 6.5 (which is intended to be for the benefit of the Indemnified Parties and may be enforced by the Indemnified Parties), nothing in this Agreement, express or implied, is intended to or shall confer upon any Company Employee or stockholder of the Company or any other Person (other than the parties hereto) any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 9.8 NOTICES. Any notice or other communication required or permitted to be delivered to any party under this Agreement shall be in writing and shall be deemed properly delivered, given and received upon receipt at the address or facsimile telephone number set forth beneath the name of such party below (or at such other address or facsimile telephone number as such party shall have specified in a written notice given to the other parties hereto): 56. if to Parent or Acquisition Sub: Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 Attention: General Counsel Facsimile: 650-522-5537 with a copy to: Robert L. Jones, Jr. Cooley Godward LLP Five Palo Alto Square 3000 El Camino Real Palo Alto, CA 94306 Facsimile: 650-849-7400 if to the Company: Triangle Pharmaceuticals, Inc. 4 University Place 4611 University Drive Durham, NC 27707 Attention: General Counsel Facsimile: 919-493-5925 with a copy to: Gerald F. Roach Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. 2500 First Union Capitol Center Raleigh, NC 27601 Facsimile: 919-821-6800 9.9 COOPERATION. Each party to this Agreement agrees to cooperate with the other and to execute and deliver such further documents, certificates, agreements and instruments and to take such other actions as may be reasonably requested by the other parties to evidence or reflect the transactions contemplated by this Agreement and to carry out the intent and purposes of this Agreement. 9.10 SEVERABILITY. In the event that any provision of this Agreement, or the application of any such provision to any Person or set of circumstances, shall be determined to be invalid, unlawful, void or unenforceable to any extent, the remainder of this Agreement, and the application of such provision to Persons or circumstances other than those as to which it is 57. determined to be invalid, unlawful, void or unenforceable, shall not be impaired or otherwise affected and shall continue to be valid and enforceable to the fullest extent permitted by law. 9.11 ENFORCEMENT. The parties agree that irreparable damage would occur if any of the provisions of this Agreement was not performed in accordance with its specific terms. It is accordingly agreed by the parties to this Agreement that they each shall be entitled to specific performance of the terms of this Agreement in addition to any other remedy to which each party is entitled at law or in equity. 9.12 CONSTRUCTION. (a) For purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice versa; the masculine gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter genders; and the neuter gender shall include masculine and feminine genders. (b) The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement. (c) As used in this Agreement, the words "include" and "including," and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words "without limitation." (d) Except as otherwise indicated, all references in this Agreement to "Sections," "Annexes" and "Schedules" are intended to refer to Sections of this Agreement and Annexes or Schedules to this Agreement. (e) For purposes of Section 3, a matter will be deemed to be "expressly set forth in the factual disclosures contained in" a Company SEC Document only if such matter: (i) is historical in nature and relates specifically to the Company; (ii) is specifically disclosed in reasonable detail in such Company SEC Document; and (iii) does not appear only as part of any forward-looking or cautionary statement or general disclaimer, or only as part of any general description of applicable Legal Requirements or general industry or other conditions. Without limiting the generality of the foregoing, for purposes of Section 3, except as set forth in the introduction to Section 3, no matter incorporated by reference in any Company SEC Document shall (solely by virtue of such incorporation by reference) be deemed to be "contained" in such Company SEC Document. (f) The bold-faced headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement. 58. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first above written. GILEAD SCIENCES, INC. By: /s/ John C. Martin ----------------------------------------- Printed Name: JOHN C. MARTIN ------------------------------- Title: Chief Executive Officer -------------------------------------- SIMBOLO ACQUISITION SUB, INC. By: /s/ John F. Milligan ----------------------------------------- Printed Name: John F. Milligan ------------------------------- Title: President -------------------------------------- TRIANGLE PHARMACEUTICALS, INC. By: /s/ Daniel G. Welch ----------------------------------------- Printed Name: Daniel G. Welch ------------------------------- Title: CHAIRMAN AND CHIEF EXECUTIVE OFFICER -------------------------------------- 59. ANNEX I CERTAIN DEFINITIONS For purposes of the Agreement (including this Annex I): ABBOTT. "Abbott" shall mean Abbott Laboratories, an Illinois corporation. ABBOTT AGREEMENT. "Abbott Agreement" shall mean that certain Supply and Manufacturing Agreement, dated as of July 30, 2002, between the Company and Abbott. ACCEPTANCE DATE. "Acceptance Date" shall mean the first date on which Acquisition Sub accepts any shares of Company Common Stock for payment pursuant to the Offer. ACQUIRED CORPORATION CONTRACT. "Acquired Corporation Contract" shall mean any Contract: (a) to which any of the Acquired Corporations is a party; (b) by which any of the Acquired Corporations or any asset of any of the Acquired Corporations is or may become bound or under which any of the Acquired Corporations has, or may become subject to, any obligation; or (c) under which any of the Acquired Corporations has or may acquire any right or interest. ACQUIRED CORPORATION PATENT RIGHT. "Acquired Corporation Patent Right" shall mean any Patent Right within the Company IP that includes any claim covering a Company Pharmaceutical Product or its method of therapeutic use or manufacture. ACQUIRED CORPORATION TRADE SECRETS. "Acquired Corporation Trade Secrets" shall mean all present trade secret and similar rights, which exist under the laws of any jurisdiction in the world, that are owned by, licensed to or controlled by any Acquired Corporation and are material to the Company. ACQUISITION PROPOSAL. "Acquisition Proposal" shall mean any offer, proposal, inquiry or indication of interest (other than an offer, proposal, inquiry or indication of interest made or submitted by Parent) contemplating any Acquisition Transaction. ACQUISITION TRANSACTION. "Acquisition Transaction" shall mean any transaction or series of transactions involving: (a) (i) any merger, consolidation, amalgamation, share exchange, business combination, recapitalization, tender offer, exchange offer or other similar transaction in which any of the Acquired Corporations is a constituent corporation, (ii) any merger, consolidation, amalgamation, share exchange, business combination, recapitalization, tender offer, exchange offer, transaction involving the issuance or acquisition of securities or other similar transaction in which a Person or "group" (as defined in the Exchange Act and the rules thereunder) of Persons directly or indirectly acquires beneficial or record ownership of securities representing more than 15% of the outstanding securities of any class of voting securities of any of the Acquired Corporations, or (iii) the issuance by any of the Acquired Corporations (in connection 1. with a merger or otherwise) of securities representing more than 15% of the outstanding securities of any class of voting securities of any of the Acquired Corporations; (b) any (i) sale, lease, exchange, transfer, license, acquisition or disposition of any business or businesses or assets that constitute or account for 15% or more of the consolidated net revenues, net income or assets of the Acquired Corporations or (ii) any license, sublicense or assignment of, or any grant of any marketing, distribution, co-promotion or other right with respect to, any Company Pharmaceutical Product or any related Intellectual Property or Intellectual Property Right material to any Company Pharmaceutical Product; or (c) any liquidation or dissolution of any of the Acquired Corporations. ADJUSTED OUTSTANDING SHARE NUMBER. "Adjusted Outstanding Share Number" shall mean the sum of: (i) the aggregate number of shares of Company Common Stock outstanding immediately prior to the acceptance of shares of Company Common Stock pursuant to the Offer, PLUS (ii) at the election of Parent, an additional number of shares up to but not exceeding the aggregate number of shares of Company Common Stock issuable upon the exercise of any outstanding option (or portion thereof) that is vested or is expected to become vested (other than by reason of the Merger) on or before June 1, 2003, or any warrant or other right to acquire capital stock of the Company, or upon the conversion of any convertible security. AGREEMENT. "Agreement" shall mean the Agreement and Plan of Merger to which this Annex I is attached, as it may be amended from time to time. AMDOXOVIR. "Amdoxovir" shall mean (i) (beta)-D-Dioxolanyl purines of the formula set forth below wherein R is OH, Cl, NH2, or H, and X is H, alkyl, acyl, monophosphate, diphosphate or triphosphate; (ii) all 5' alkylated and acylated and N6 acylated derivatives thereof; (iii) any salts, esters, racemic mixtures and purified enantiomers of any of the foregoing; and (iv) any and all polymorphs, hydrates and solvates of any of the foregoing. [GRAPHIC OMITTED] BULK EMTRICITABINE. "Bulk Emtricitabine" shall mean the bulk form of Emtricitabine, suitable for formulating into Finished Emtricitabine, as set forth in filings made by the Company with Governmental Bodies for Coviracil or for Emtricitabine, as such filings may be amended from time to time. 2. CLEVUDINE. "Clevudine" shall mean the compound known as L-FMAU, with the chemical name 2'-flouro-5-methyl-(beta)-L-arabinofuranosyluracil, including any salts and esters thereof. COBRA. "COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended. COMPANY AFFILIATE. "Company Affiliate" shall mean any Person under common control with any of the Acquired Corporations within the meaning of any of Sections 414(b), 414(c), 414(m) and 414(o) of the Code, and the regulations issued thereunder. COMPANY COMMON STOCK. "Company Common Stock" shall mean the Common Stock, $0.001 par value per share, of the Company. COMPANY DISCLOSURE SCHEDULE. "Company Disclosure Schedule" shall mean the disclosure schedule that has been prepared by the Company in accordance with the requirements of Section 9.6 of the Agreement and that has been delivered by the Company to Parent on the date of the Agreement. COMPANY EMPLOYEE. "Company Employee" shall mean any current or former employee or director of any of the Acquired Corporations or any Company Affiliate. COMPANY EMPLOYEE AGREEMENT. "Company Employee Agreement" shall mean any agreement establishing a fixed term of employment between any of the Acquired Corporations or any Company Affiliate and any Company Employee. COMPANY EMPLOYEE PLAN. "Company Employee Plan" shall mean any plan, program, policy, practice, Contract or other arrangement (other than a Company Employee Agreement) providing for compensation, severance, termination pay, deferred compensation, performance awards, stock or stock-related awards, fringe benefits or other employee benefits or remuneration of any kind (whether written, unwritten or otherwise, and whether funded or unfunded), including each "employee benefit plan," within the meaning of Section 3(3) of ERISA (whether or not ERISA is applicable to such plan), that is or has been maintained, contributed to or required to be contributed to by any of the Acquired Corporations or any Company Affiliate for the benefit of any Company Employee, or with respect to which any of the Acquired Corporations or any Company Affiliate has or may in the future have any liability or obligation. COMPANY IP. "Company IP" shall mean all Intellectual Property Rights and Intellectual Property in which any of the Acquired Corporations has (or purports to have) an ownership interest or an exclusive license or similar exclusive right. COMPANY IP CONTRACT. "Company IP Contract" shall mean any Contract to which any of the Acquired Corporations is or was a party, or by which any of the Acquired Corporations is or was bound, that (i) contains any assignment or license of, or any covenant not to assert or enforce, any Intellectual Property Right or (ii) otherwise relates to any Company IP or any Intellectual Property developed by, with or for any of the Acquired Corporations. COMPANY PARTNER. "Company Partner" shall mean any manufacturer of any Company Pharmaceutical Product. 3. COMPANY PHARMACEUTICAL PRODUCT. "Company Pharmaceutical Product" shall mean any product of the Company containing Amdoxovir, Clevudine or Emtricitabine. CONSENT. "Consent" shall mean any approval, consent, ratification, permission, waiver or authorization (including any Governmental Authorization). CONTRACT. "Contract" shall mean any legally binding written, oral or other agreement, contract, subcontract, lease, understanding, instrument, note, option, warranty, purchase order, license, sublicense, insurance policy, benefit plan or legally binding commitment or undertaking of any nature. COVIRACIL. "Coviracil" shall mean Finished Emtricitabine in either (i) a packaged form as 30 200mg Emtricitabine capsules per bottle or (ii) a liquid form as 10mg/mL Emtricitabine solution in a 170 mL bottle, in each case as set forth in filings made by the Company with Governmental Bodies for Coviracil, as such filings may be amended from time to time. EMTRICITABINE. "Emtricitabine" shall have the meaning set forth in Part 3.8 of the Company Disclosure Schedule. ENCUMBRANCE. "Encumbrance" shall mean any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, claim, infringement, interference, option, right of first refusal, preemptive right, community property interest or restriction of any nature (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset). ENTITY. "Entity" shall mean any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any company limited by shares, limited liability company or joint stock company), firm, society or other enterprise, association, organization or entity. ERISA. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. FINISHED EMTRICITABINE. "Finished Emtricitabine" shall mean a finished pharmaceutical formulation containing Emtricitabine as an active ingredient. FMLA. "FMLA" shall mean the Family Medical Leave Act of 1993, as amended. 4. FOREIGN PLAN. "Foreign Plan" shall mean any: (i) plan, program, policy, practice, Contract or other arrangement mandated by a Governmental Body other than the United States; (ii) Company Employee Plan maintained or contributed to by any of the Acquired Corporations or any Company Affiliate that is not subject to United States law; or (iii) Company Employee Plan that covers or has covered Company Employees whose services are performed primarily outside of the United States. GOVERNMENTAL AUTHORIZATION. "Governmental Authorization" shall mean any permit, license, certificate, franchise, permission, variance, clearance, registration, qualification or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement. GOVERNMENTAL BODY. "Governmental Body" shall mean any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; or (c) governmental or quasi-governmental authority of any nature (including any governmental division, department, agency, commission, instrumentality, official, ministry, fund, foundation, center, organization, unit, body or Entity and any court or other tribunal). HIPAA. "HIPAA" shall mean the Health Insurance Portability and Accountability Act of 1996, as amended. HSR ACT. "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. INTELLECTUAL PROPERTY. "Intellectual Property" shall mean algorithms, apparatus, assay components, biological materials, cell lines, clinical data, chemical compositions or structures, databases, data collections, diagrams, formulae, inventions (whether or not patentable), know-how, logos, marks (including brand names, product names, logos, and slogans), methods, network configurations and architectures, processes, proprietary information, protocols, schematics, specifications, software, techniques, URLs, web sites, works of authorship and other forms of technology (whether or not embodied in any tangible form and including all tangible embodiments of the foregoing, such as instruction manuals, laboratory notebooks, prototypes, samples, studies and summaries). INTELLECTUAL PROPERTY RIGHTS. "Intellectual Property Rights" shall mean all past and present rights of the following types, which exist or have been created under the laws of any jurisdiction in the world: (i) rights associated with works of authorship, including exclusive exploitation rights, copyrights and moral rights; (ii) trademark and trade name rights and similar rights; (iii) trade secret rights; (iv) patent and industrial property rights; (v) other proprietary rights in Intellectual Property; and (vi) rights in or relating to registrations, renewals, extensions, combinations, divisions and reissues of, and applications for, any of the rights referred to in clauses "(i)" through "(v)" above. IRS. "IRS" shall mean the United States Internal Revenue Service. KNOWLEDGE. The Company shall be deemed to have "Knowledge" of any fact or other matter if such fact or other matter is within the knowledge of any member of the Company's 5. board of directors or any officer of the Company with the title of executive vice president or in a more senior position; and with respect to the representations and warranties in Section 3.14 of the Agreement, the Company shall also be deemed to have "Knowledge" of any fact or other matter if such fact or other matter is within the knowledge of any employee in a clinical or regulatory department with the title of senior director or in a more senior position. LAMIVUDINE. "Lamivudine" shall mean lamivudine (2R,cis)-4-amino-1- (2-hydroxymethyl-1,3-oxathiolan-5-yl)-(1H)-pyrimidin-2-one. LEGAL PROCEEDING. "Legal Proceeding" shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), audit or investigation commenced, brought, conducted or heard by or before, or otherwise involving, any court or other Governmental Body or any arbitrator or arbitration panel. LEGAL REQUIREMENT. "Legal Requirement" shall mean any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body (or under the authority of the Nasdaq National Market). PARENT COMMON STOCK. "Parent Common Stock" shall mean the Common Stock, $.001 par value per share, of Parent. PATENT RIGHT. "Patent Right" shall mean (a) any patent or patent application or (b) any continuation, continuation-in-part, divisional, re-examination, extension, reissue or foreign counterpart of any patent or patent application. PERSON. "Person" shall mean any individual, Entity or Governmental Body. PROXY STATEMENT. "Proxy Statement" shall mean the proxy statement to be sent to the Company's stockholders in connection with the Company Stockholders' Meeting. REGISTERED IP. "Registered IP" shall mean all Intellectual Property Rights that are registered, filed or issued under the authority of, with or by any Governmental Body, including all patents, registered copyrights and registered trademarks and all applications for any of the foregoing. REPRESENTATIVES. "Representatives" shall mean officers, directors, employees, agents, attorneys, accountants, advisors and representatives. SEC. "SEC" shall mean the United States Securities and Exchange Commission. SECURITIES ACT. "Securities Act" shall mean the Securities Act of 1933, as amended. SUBSIDIARY. An Entity shall be deemed to be a "Subsidiary" of another Person if such Person directly or indirectly owns or purports to own, beneficially or of record, (a) an amount of voting securities of other interests in such Entity that is sufficient to enable such Person to elect at least a majority of the members of such Entity's board of directors or other governing body, or (b) at least 50% of the outstanding equity or financial interests or such Entity. 6. SUPERIOR OFFER. "Superior Offer" shall mean an unsolicited, bona fide written offer made by a third party to acquire (or otherwise enter into a transaction which would result in such third party becoming the holder of) at least a majority of the outstanding shares of Company Common Stock on terms that the board of directors of the Company determines, in its good faith judgment (after taking into account the price and consideration offered and the likelihood that the proposed acquisition will ultimately be consummated and after taking into account the advice of Banc of America Securities LLC or another independent financial advisor of nationally recognized reputation) to be more favorable to the Company's stockholders than the terms of the Offer and the Merger; PROVIDED, HOWEVER, that any such offer shall not be deemed to be a "Superior Offer" if any financing required to consummate the transaction contemplated by such offer is not committed and is not reasonably capable of being obtained by such third party. TAX. "Tax" shall mean any tax (including any income tax, franchise tax, capital gains tax, gross receipts tax, value-added tax, surtax, estimated tax, unemployment tax, national health insurance tax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including any customs duty), deficiency or fee, and any related charge or amount (including any fine, penalty or interest), imposed, assessed or collected by or under the authority of any Governmental Body. TAX RETURN. "Tax Return" shall mean any return (including any information return), report, statement, declaration, estimate, schedule, notice, notification, form, election, certificate or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Legal Requirement relating to any Tax. TRIGGERING EVENT. A "Triggering Event" shall be deemed to have occurred if: (i) the board of directors of the Company shall have failed to recommend that the Company's stockholders accept the Offer, tender their shares of Company Common Stock pursuant to the Offer or (if required by applicable law) vote to adopt the Agreement, or shall have withdrawn or modified in a manner adverse to Parent the Company Board Recommendation; (ii) the Company shall have failed to include in the Offer Documents the Company Board Recommendation; (iii) the board of directors of the Company shall have approved, endorsed or recommended any Acquisition Proposal; (iv) the Company shall have entered into any letter of intent or similar document or any Contract contemplating any Acquisition Transaction; or (v) any Acquisition Proposal shall have resulted directly or indirectly from any of the Acquired Corporations or any Representative of any of the Acquired Corporations having breached, or having taken any action with the intent of circumventing, any of the provisions set forth in Section 5.3. UNAUDITED INTERIM BALANCE SHEET. "Unaudited Interim Balance Sheet" shall mean the unaudited consolidated balance sheet of the Company and its consolidated subsidiaries as of September 30, 2002, included in the Company's Report on Form 10-Q for the fiscal quarter ended September 30, 2002, as filed with the SEC prior to the date of this Agreement. WARBURG. "Warburg" shall mean the Warburg Pincus Private Equity Fund VIII, L.P. YUHAN. "Yuhan" shall mean Yuhan Corporation. 7. ANNEX II CONDITIONS OF THE OFFER Capitalized terms used but not defined in this Annex II shall have the meanings set forth in the Agreement and Plan of Merger to which this Annex II is attached (the "Agreement"). Notwithstanding any other provision of the Offer or the Agreement, Acquisition Sub shall not be required to accept for payment, or (subject to any applicable rule or regulation of the SEC) pay for, and may delay the acceptance of payment of, or (subject to any applicable rule or regulation of the SEC) the payment for, any tendered shares of Company Common Stock, and (subject to Section 1.1(c)(ii) of the Agreement) may terminate the Offer on any scheduled expiration date and not accept for payment any tendered shares of Company Common Stock, if (i) the Minimum Condition shall not have been satisfied by midnight, U.S. Eastern Time, on the expiration date of the Offer, or (ii) any of the following additional conditions shall not have been satisfied: (a) the waiting period applicable to the purchase of or payment for shares of Company Common Stock pursuant to the Offer under the HSR Act shall have expired or been terminated, and there shall not be in effect any voluntary agreement between Parent and the Federal Trade Commission or the Department of Justice pursuant to which Parent has agreed not to consummate the Offer for any period of time, which agreement has been entered into consistent with Parent's obligations under Sections 6.2 and 6.6; (b) each of the representations and warranties of the Company contained in the Agreement shall have been accurate in all respects as of the date of the Agreement (except that any representation or warranty that, by its express terms, speaks only as of an earlier date need only have been accurate as of such earlier date); PROVIDED, HOWEVER, that (i) for avoidance of doubt, this clause "(b)" does not require any of the Company's representations and warranties contained in the Agreement to be accurate as of a date subsequent to the date of the Agreement, (ii) for purposes of determining the accuracy of such representations and warranties as of the date of the Agreement (or any applicable earlier date), (A) all materiality qualifications contained in such representations and warranties shall be disregarded and (B) any update of or modification to the Company Disclosure Schedule made or purported to have been made after the date of the Agreement shall be disregarded, and (iii) the inaccuracies in such representations and warranties shall be disregarded for purposes of this clause "(b)" if all such inaccuracies and the circumstances and events underlying such inaccuracies, considered collectively: (x) do not have a material and adverse effect on the intrinsic value of the Acquired Corporations taken as a whole, as compared to the intrinsic value of the Acquired Corporations taken as a whole as of the date of the Agreement assuming the accuracy as of the date of the Agreement of such representations and warranties; (y) do not have a material and adverse effect on the financial condition of the Acquired Corporations taken as a whole, as compared to the financial condition of the Acquired Corporations taken as a whole as of the date of the Agreement assuming the accuracy as of the date of the Agreement of such representations and warranties; and 8. (z) do not have a material and adverse effect on the capitalization of the Company, as compared to the capitalization of the Company as of the date of the Agreement assuming the accuracy as of the date of the Agreement of such representations and warranties. (c) each covenant or obligation that the Company is required to comply with or to perform at or prior to the Acceptance Date shall have been complied with and performed in all material respects; (d) Parent and the Company shall have received a certificate executed by the Chief Executive Officer and Chief Financial Officer of the Company confirming that the conditions set forth in clauses "(b)" and "(c)" of this Annex II have been duly satisfied, which certificate shall be in full force and effect; (e) no temporary restraining order, preliminary or permanent injunction or other order preventing the purchase of or payment for shares of Company Common Stock pursuant to the Offer, or preventing consummation of the Merger or any of the other transactions contemplated by the Agreement, shall have been issued by any court of competent jurisdiction and remain in effect, and there shall not be any Legal Requirement enacted or deemed applicable to the Offer, the Merger or any of the other transactions contemplated by the Agreement that makes the purchase of or payment for shares of Company Common Stock pursuant to the Offer, or the consummation of the Merger or any of the other transactions contemplated by the Agreement, illegal; and (f) there shall not be pending or overtly threatened any Legal Proceeding in which a Governmental Body is or is threatened to become a party or is otherwise involved (excluding any Legal Proceeding where the only involvement of any Governmental Body is that a court or other tribunal is the venue for the adjudication of such Legal Proceeding): (i) challenging or seeking to restrain or prohibit the purchase of or payment for shares of Company Common Stock pursuant to the Offer, or the consummation of the Merger or any of the other transactions contemplated by the Agreement; (ii) relating to the Offer, the Merger or any of the other transactions contemplated by the Agreement and seeking to obtain from Parent or any of the Acquired Corporations any damages or other relief that may be material to Parent or the Acquired Corporations; (iii) seeking to prohibit or limit in any material respect Parent's ability to vote, receive dividends with respect to or otherwise exercise ownership rights with respect to the stock of the Surviving Corporation; (iv) that if adversely determined could reasonably be expected to have the effect of materially and adversely affecting the right of Parent or any of the Acquired Corporations to own the assets or operate the business of the Acquired Corporations; or (v) seeking to compel any of the Acquired Corporations, Parent or any Subsidiary of Parent to dispose of, hold separate or license any material asset or material right as a result of the Offer, the Merger or any of the other transactions contemplated by the Agreement. The foregoing conditions are for the sole benefit of Parent and Acquisition Sub and may be waived by Parent or Acquisition Sub, in whole or in part at any time and from time to time, in the sole discretion of Parent and Acquisition Sub. The failure by Parent or Acquisition Sub at 9. any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. 10. EX-99.(D)(2) 12 a2096276zex-99_d2.txt EXHIBIT 99(D)(2) EXHIBIT (d)(2) STOCKHOLDER AGREEMENT THIS STOCKHOLDER AGREEMENT ("Agreement") is entered into as of December 3, 2002, by and among GILEAD SCIENCES, INC., a Delaware corporation ("Parent"), SIMBOLO ACQUISITION SUB, INC., a Delaware corporation and a wholly owned subsidiary of Parent ("Acquisition Sub"), and ____________________ ("Stockholder"). RECITALS A. Stockholder is a holder of record and the "beneficial owner" (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of certain shares of common stock of TRIANGLE PHARMACEUTICALS, INC., a Delaware corporation (the "Company"). B. Contemporaneously with the execution and delivery of this Agreement, Parent, Acquisition Sub and the Company are entering into an Agreement and Plan of Merger of even date herewith (the "Merger Agreement") which provides (subject to the conditions set forth therein) for the (i) commencement by Acquisition Sub of a tender offer for all of the issued and outstanding shares of Company Common Stock (as defined herein), and (ii) the subsequent merger of Acquisition Sub with and into the Company. C. Stockholder is entering into this Agreement in order to induce Parent to enter into the Merger Agreement. AGREEMENT The parties to this Agreement, intending to be legally bound, agree as follows: SECTION 1. CERTAIN DEFINITIONS For purposes of this Agreement: (a) "COMPANY COMMON STOCK" shall mean the common stock, par value $0.001 per share, of the Company. (b) Stockholder shall be deemed to "OWN" or to have acquired "OWNERSHIP" of a security if Stockholder: (i) is the record owner of such security; or (ii) is the "beneficial owner" (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of such security. (c) "SUBJECT SECURITIES" shall mean: (i) all securities of the Company (including all shares of Company Common Stock and all options, warrants and other rights to acquire shares of Company Common Stock) Owned by Stockholder as of the date of this Agreement; and (ii) all additional securities of the Company (including all additional shares of Company Common Stock and all additional options, warrants and other rights to acquire shares of Company Common Stock) of which Stockholder acquires Ownership during the period from the date of this Agreement through the Termination Date. (d) "SUBJECT SHARES" shall mean: (i) all shares of Company Common Stock Owned by Stockholder as of the date of this Agreement; and (ii) all additional shares of Company Common Stock of which Stockholder acquires Ownership during the period from the date of this Agreement through the Termination Date. (e) "TERMINATION DATE" shall mean the earlier of the following: (i) the date on which the parties hereto, by mutual written consent, validly terminate this Agreement; (ii) the date on which the Merger becomes effective; or (iii) the date on which the Merger Agreement is validly terminated. (f) A Person shall be deemed to have a effected a "TRANSFER" of a security if such Person directly or indirectly: (i) sells, pledges, encumbers, grants an option with respect to, transfers or disposes of such security or any interest in such security to any Person other than Parent; or (ii) enters into an agreement or commitment contemplating the sale of, pledge of, encumbrance of, grant of an option with respect to, transfer of or disposition of such security or any interest therein to any Person other than Parent. (g) Other capitalized terms used but not otherwise defined in this Agreement have the meanings assigned to such terms in the Merger Agreement. SECTION 2. TRANSFER OF SUBJECT SECURITIES AND VOTING RIGHTS 2.1 RESTRICTION ON TRANSFER OF SUBJECT SECURITIES. Subject to Section 2.2, during the period from the date of this Agreement through the Termination Date, Stockholder shall not, directly or indirectly, cause or permit any Transfer of any of the Subject Securities to be effected. 2.2 PERMITTED TRANSFERS. Section 2.1 shall not prohibit a transfer of Company Common Stock by Stockholder (a) if Stockholder is an individual (i) to any member of Stockholder's immediate family, or to a trust for the benefit of Stockholder or any member of Stockholder's immediate family, or (ii) upon the death of Stockholder, or (b) if Stockholder is a partnership or limited liability company, to one or more partners or members of Stockholder or to an affiliated Person under common control with Stockholder; PROVIDED, HOWEVER, that a transfer referred to in this sentence shall be permitted only if, as a precondition to such transfer, the transferee agrees in writing to be bound by all of the terms of this Agreement. SECTION 3. AGREEMENT TO TENDER 3.1 TENDER OF SUBJECT SHARES. Stockholder agrees (i) to promptly (and, in any event, not later than five business days after commencement of the Offer) validly tender or cause to be validly tendered into the Offer, pursuant to and in accordance with the terms of the Offer, all of 2. the Subject Shares Owned by Stockholder as of the date of this Agreement (free and clear of any encumbrances or restrictions), and (ii) if Stockholder acquires Ownership of any additional Subject Shares after the date of this Agreement, to promptly (and, in any event, not later than two business days after Stockholder acquires Ownership of such additional Subject Shares) validly tender or cause to be validly tendered into the Offer, pursuant to and in accordance with the terms of the Offer, all of such additional Subject Shares (free and clear of any encumbrances or restrictions). Stockholder agrees not to withdraw, and agrees not to permit the withdrawal of, any of the Subject Shares from the Offer unless and until the Offer expires without Acquisition Sub having accepted for payment any shares of Company Common Stock tendered in the Offer. Stockholder acknowledges and agrees that Acquisition Sub's obligation to accept for payment shares of Company Common Stock validly tendered in the Offer, including any Subject Shares validly tendered by Stockholder, is subject to the terms and conditions of the Merger Agreement and the Offer. For all the Subject Shares validly tendered in the Offer and not withdrawn, provided that Acquisition Sub accepts for purchase and purchases shares of Company Common Stock pursuant to the Offer, Stockholder will be entitled to receive the highest price per share paid by Acquisition Sub for shares of Company Common Stock pursuant to the Offer. 3.2 STOCKHOLDER INFORMATION. Stockholder hereby agrees to permit Parent and Acquisition Sub to publish and disclose in the Offer Documents and, if approval of the stockholders of the Company is required under the terms of the DGCL or other applicable law, in the Proxy Statement, Stockholder's identity and ownership of shares of Company Common Stock and the nature of Stockholder's commitments, arrangements and understandings under this Agreement. 3.3 FURTHER ASSURANCES. (a) Stockholder shall, at Stockholder's own expense, perform such further acts and execute such other documents and instruments as may reasonably be required to vest in Parent the power to carry out and give effect to the provisions of this Agreement. (b) Stockholder shall not enter into any tender, voting or other such agreement, or grant a proxy or power of attorney, with respect to any of the Subject Shares that is inconsistent with this Agreement or otherwise take any other action with respect to the Subject Shares that would in any way restrict, limit or interfere with the performance of Stockholder's obligations hereunder or the transactions contemplated hereby. SECTION 4. WAIVER OF APPRAISAL RIGHTS Stockholder hereby irrevocably and unconditionally waives, and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal and any dissenters' rights relating to the Merger that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Common Stock Owned by Stockholder. 3. SECTION 5. NO SOLICITATION Stockholder agrees that, during the period from the date of this Agreement through the Termination Date, Stockholder shall not, directly or indirectly, and Stockholder shall ensure that Stockholder's Representatives do not, directly or indirectly take any action that the Company or any of its Representatives would be prohibited from taking, directly or indirectly, pursuant to Section 5.3(a) of the Merger Agreement. Notwithstanding the foregoing, if Stockholder or any Representative of Stockholder is a member of the board of directors of the Company, such member of the board of directors of the Company may take actions in such capacity (acting as a member of the board of directors of the Company) to the extent permitted by Section 1.2(b) of the Merger Agreement or the proviso in Section 5.3(a) of the Merger Agreement. SECTION 6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER Stockholder hereby represents and warrants to Parent as follows: 6.1 AUTHORIZATION, ETC. Stockholder has all requisite right, power and authority to execute and deliver this Agreement and to perform Stockholder's obligations hereunder. This Agreement has been duly executed and delivered by Stockholder and, assuming the due authorization, execution and delivery by Parent and Acquisition Sub of this Agreement, constitutes a legal, valid and binding obligation of Stockholder, enforceable against Stockholder in accordance with its terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies. If Stockholder is a corporation, then Stockholder is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it was organized. If Stockholder is a general or limited partnership, then Stockholder is a partnership duly organized, validly existing and in good standing under the laws of the jurisdiction in which it was organized. If Stockholder is a limited liability company, then Stockholder is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction in which it was organized. 6.2 NO CONFLICTS OR CONSENTS. (a) The execution and delivery of this Agreement by Stockholder do not, and the performance of this Agreement by Stockholder will not: (i) conflict with or violate any law, rule, regulation, order, decree or judgment applicable to Stockholder or by which Stockholder or any of Stockholder's properties is or may be bound or affected; or (ii) result in or constitute (with or without notice or lapse of time) any breach of or default under, or give to any other Person (with or without notice or lapse of time) any right of termination, amendment, acceleration or cancellation of, or result (with or without notice or lapse of time) in the creation of any encumbrance or restriction on any of the Subject Securities pursuant to, any Contract to which Stockholder is a party or by which Stockholder or any of Stockholder's affiliates or properties is or may be bound or affected (other than any necessary filings under the HSR Act or the Exchange Act), except for any such breaches, defaults or other occurrences that would not prevent or delay the performance by Stockholder of Stockholder's obligations under this Agreement. 4. (b) The execution and delivery of this Agreement by Stockholder do not, and the performance of this Agreement by Stockholder will not, require any consent or approval of any Person. (c) Exhibit A identifies each Contract under which Stockholder or any affiliate of Stockholder has or may acquire any right against any of the Acquired Corporations. Except as disclosed on Exhibit A, neither Stockholder nor any affiliate of Stockholder shall have any rights or claims under any such Contract against the Company, Parent or any other Person after the Effective Time. 6.3 TITLE TO SECURITIES. As of the date of this Agreement: (a) Stockholder holds of record (free and clear of any encumbrances or restrictions other than restrictions imposed by applicable securities laws or pursuant to this Agreement) the number of outstanding shares of Company Common Stock set forth under the heading "Shares Held of Record" on the signature page hereof; (b) Stockholder holds (free and clear of any encumbrances or restrictions other than restrictions imposed by applicable securities laws or pursuant to this Agreement) the options, warrants and other rights to acquire shares of Company Common Stock set forth under the heading "Options and Other Rights" on the signature page hereof; (c) Stockholder Owns the additional securities of the Company set forth under the heading "Additional Securities Beneficially Owned" on the signature page hereof; and (d) Stockholder does not directly or indirectly Own any shares of capital stock or other securities of the Company, or any option, warrant or other right to acquire (by purchase, conversion or otherwise) any shares of capital stock or other securities of the Company, other than the shares and options, warrants and other rights set forth on the signature page hereof. SECTION 7. MISCELLANEOUS 7.1 FURTHER ASSURANCES. From time to time and without additional consideration, Stockholder shall (at Stockholder's sole expense) execute and deliver, or cause to be executed and delivered, such additional transfers, assignments, endorsements and other instruments, and shall (at Stockholder's sole expense) take such further actions, as Parent may request for the purpose of carrying out and furthering the intent of this Agreement. 7.2 FIDUCIARY DUTIES. Notwithstanding anything in this Agreement to the contrary: (a) Stockholder makes no agreement or understanding herein in any capacity other than in Stockholder's capacity as a record holder and beneficial owner of Subject Securities; (b) nothing in this Agreement shall be construed to limit or affect any action or inaction by Stockholder, or any director, officer, partner, member or employee, as applicable, of Stockholder, in either case serving on the Company's board of directors acting in such person's capacity as a director or fiduciary of the Company; and (c) Stockholder shall have no liability to Parent, Acquisition Sub or any of their respective affiliates under this Agreement or otherwise as a result of any action or inaction by Stockholder, or any director, officer, partner, member or employee, as applicable, of Stockholder, in either case serving on the Company's board of directors acting in such person's capacity as a director or fiduciary of the Company. 5. 7.3 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The termination of this Agreement shall not relieve Stockholder from any liability for any breach by Stockholder prior to such termination of any representation, warranty, covenant or agreement contained in this Agreement. 7.4 EXPENSES. All costs and expenses incurred in connection with the transactions contemplated by this Agreement shall be paid by the party incurring such costs and expenses. 7.5 NOTICES. Any notice or other communication required or permitted to be delivered to either party under this Agreement shall be in writing and shall be deemed properly delivered, given and received when received at the address or facsimile telephone number set forth beneath the name of such party below (or at such other address or facsimile telephone number as such party shall have specified in a written notice given to the other party): if to Stockholder: at the address set forth on the signature page hereof; and if to Parent or Acquisition Sub: Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 Attention: General Counsel Facsimile: (650) 522-5537 7.6 SEVERABILITY. If any provision of this Agreement or any part of any such provision is held under any circumstances to be invalid or unenforceable in any jurisdiction, then (a) such provision or part thereof shall, with respect to such circumstances and in such jurisdiction, be deemed amended to conform to applicable laws so as to be valid and enforceable to the fullest possible extent, (b) the invalidity or unenforceability of such provision or part thereof under such circumstances and in such jurisdiction shall not affect the validity or enforceability of such provision or part thereof under any other circumstances or in any other jurisdiction, and (c) the invalidity or unenforceability of such provision or part thereof shall not affect the validity or enforceability of the remainder of such provision or the validity or enforceability of any other provision of this Agreement. Each provision of this Agreement is separable from every other provision of this Agreement, and each part of each provision of this Agreement is separable from every other part of such provision. 7.7 ENTIRE AGREEMENT. This Agreement and any other documents delivered by the parties in connection herewith constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings between the parties with respect thereto. No addition to or modification of any provision of this Agreement shall be binding upon either party unless made in writing and signed by both parties. 6. 7.8 ASSIGNMENT; BINDING EFFECT. Except as provided herein, neither this Agreement nor any of the interests or obligations hereunder may be assigned or delegated by Stockholder, and any attempted or purported assignment or delegation of any of such interests or obligations shall be void. Subject to the preceding sentence, this Agreement shall be binding upon Stockholder and (if applicable) Stockholder's heirs, estate, executors and personal representatives and Stockholder's successors and assigns, and shall inure to the benefit of Parent and its successors and assigns. Without limiting any of the restrictions set forth in Section 2 or Section 7.1 or elsewhere in this Agreement, this Agreement shall be binding upon any Person to whom any Subject Securities are transferred. Nothing in this Agreement is intended to confer on any Person (other than Parent and its successors and assigns) any rights or remedies of any nature. 7.9 INDEPENDENCE OF OBLIGATIONS. The covenants and obligations of Stockholder set forth in this Agreement shall be construed as independent of any other agreement or arrangement between Stockholder, on the one hand, and the Company or Parent, on the other. The existence of any claim or cause of action by Stockholder against the Company or Parent shall not constitute a defense to the enforcement of any of such covenants or obligations against Stockholder. 7.10 SPECIFIC PERFORMANCE. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached. Stockholder agrees that, in the event of any breach or threatened breach by Stockholder of any covenant or obligation contained in this Agreement, Parent shall be entitled (in addition to any other remedy that may be available to it, including monetary damages) to seek and obtain (a) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation, and (b) an injunction restraining such breach or threatened breach. 7.11 NON-EXCLUSIVITY. The rights and remedies of Parent under this Agreement are not exclusive of or limited by any other rights or remedies which it may have, whether at law, in equity, by contract or otherwise, all of which shall be cumulative (and not alternative). Without limiting the generality of the foregoing, the rights and remedies of Parent under this Agreement, and the obligations and liabilities of Stockholder under this Agreement, are in addition to their respective rights, remedies, obligations and liabilities under common law requirements and under all applicable statutes, rules and regulations. 7.12 GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL. (a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. In any action between the parties arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement each of the parties irrevocably and unconditionally consents and submits to the jurisdiction and venue of the state and federal courts located in the State of Delaware. 7. (b) EACH PARTY IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO THIS AGREEMENT OR THE ENFORCEMENT OF ANY PROVISION OF THIS AGREEMENT. 7.13 COUNTERPARTS. This Agreement may be executed in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. 7.14 CAPTIONS. The captions contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement. 7.15 WAIVER. No failure on the part of any party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. No party shall not be deemed to have waived any claim available to such party arising out of this Agreement, or any power, right, privilege or remedy of such party under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given. 7.16 CONSTRUCTION. (a) For purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice versa; the masculine gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter genders; and the neuter gender shall include masculine and feminine genders. (b) The parties agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement. (c) As used in this Agreement, the words "include" and "including," and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words "without limitation." (d) Except as otherwise indicated, all references in this Agreement to "Sections" and "Exhibits" are intended to refer to Sections of this Agreement and Exhibits to this Agreement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.] 8. IN WITNESS WHEREOF, Parent and Stockholder have caused this Agreement to be executed as of the date first written above. GILEAD SCIENCES, INC. -------------------------------------------- By -------------------------------------------- Title SIMBOLO ACQUISITION SUB, INC. -------------------------------------------- By -------------------------------------------- Title STOCKHOLDER -------------------------------------------- Signature -------------------------------------------- Printed Name Address: ------------------------------- ------------------------------- ------------------------------- Facsimile: -------------------------------

SIGNATURE PAGE TO STOCKHOLDER AGREEMENT EXHIBIT A CERTAIN CONTRACTS A-1 EX-99.(D)(3) 13 a2096276zex-99_d3.txt EXHIBIT 99(D)(3) EXHIBIT (d)(3) STOCKHOLDER AGREEMENT THIS STOCKHOLDER AGREEMENT ("Agreement") is entered into as of December __, 2002, by and among GILEAD SCIENCES, INC., a Delaware corporation ("Parent"), SIMBOLO ACQUISITION SUB, INC., a Delaware corporation and a wholly owned subsidiary of Parent ("Acquisition Sub"), and ____________________ ("Stockholder"). RECITALS A. Stockholder is a holder of record and the "beneficial owner" (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of certain shares of common stock of TRIANGLE PHARMACEUTICALS, INC., a Delaware corporation (the "Company"). B. Contemporaneously with the execution and delivery of this Agreement, Parent, Acquisition Sub and the Company are entering into an Agreement and Plan of Merger of even date herewith (the "Merger Agreement") which provides (subject to the conditions set forth therein) for the (i) commencement by Acquisition Sub of a tender offer for all of the issued and outstanding shares of Company Common Stock (as defined herein), and (ii) the subsequent merger of Acquisition Sub with and into the Company. C. Stockholder is entering into this Agreement in order to induce Parent to enter into the Merger Agreement. AGREEMENT The parties to this Agreement, intending to be legally bound, agree as follows: SECTION 1. CERTAIN DEFINITIONS For purposes of this Agreement: (a) "COMPANY COMMON STOCK" shall mean the common stock, par value $0.001 per share, of the Company. (b) Stockholder shall be deemed to "OWN" or to have acquired "OWNERSHIP" of a security if Stockholder: (i) is the record owner of such security; or (ii) is the "beneficial owner" (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of such security. (c) "SUBJECT SECURITIES" shall mean: (i) all securities of the Company (including all shares of Company Common Stock and all options, warrants and other rights to acquire shares of Company Common Stock) Owned by Stockholder as of the date of this Agreement; and (ii) all additional securities of the Company (including all additional shares of Company Common Stock and all additional options, warrants and other rights to acquire shares of Company Common Stock) of which Stockholder acquires Ownership during the period from the date of this Agreement through the Termination Date. (d) "SUBJECT SHARES" shall mean: (i) all shares of Company Common Stock Owned by Stockholder as of the date of this Agreement; and (ii) all additional shares of Company Common Stock of which Stockholder acquires Ownership during the period from the date of this Agreement through the Termination Date. (e) "TERMINATION DATE" shall mean the earlier of the following: (i) the date on which the parties hereto, by mutual written consent, validly terminate this Agreement; (ii) the date on which the Merger becomes effective; or (iii) the date on which the Merger Agreement is validly terminated. (f) A Person shall be deemed to have a effected a "TRANSFER" of a security if such Person directly or indirectly: (i) sells, pledges, encumbers, grants an option with respect to, transfers or disposes of such security or any interest in such security to any Person other than Parent; or (ii) enters into an agreement or commitment contemplating the sale of, pledge of, encumbrance of, grant of an option with respect to, transfer of or disposition of such security or any interest therein to any Person other than Parent. (g) Other capitalized terms used but not otherwise defined in this Agreement have the meanings assigned to such terms in the Merger Agreement. SECTION 2. TRANSFER OF SUBJECT SECURITIES AND VOTING RIGHTS 2.1 RESTRICTION ON TRANSFER OF SUBJECT SECURITIES. Subject to Section 2.3, during the period from the date of this Agreement through the Termination Date, Stockholder shall not, directly or indirectly, cause or permit any Transfer of any of the Subject Securities to be effected. 2.2 RESTRICTION ON TRANSFER OF VOTING RIGHTS. During the period from the date of this Agreement through the Termination Date, Stockholder shall ensure that: (a) none of the Subject Securities is deposited into a voting trust; and (b) no proxy is granted, and no voting agreement or similar agreement is entered into, with respect to any of the Subject Securities. 2.3 PERMITTED TRANSFERS. Section 2.1 shall not prohibit a transfer of Company Common Stock by Stockholder (a) if Stockholder is an individual (i) to any member of Stockholder's immediate family, or to a trust for the benefit of Stockholder or any member of Stockholder's immediate family, or (ii) upon the death of Stockholder, or (b) if Stockholder is a partnership or limited liability company, to one or more partners or members of Stockholder or to an affiliated Person under common control with Stockholder; PROVIDED, HOWEVER, that a transfer referred to in this sentence shall be permitted only if, as a precondition to such transfer, the transferee agrees in writing to be bound by all of the terms of this Agreement. 2. SECTION 3. AGREEMENT TO TENDER 3.1 TENDER OF SUBJECT SHARES. Stockholder agrees (i) to promptly (and, in any event, not later than five business days after commencement of the Offer) validly tender or cause to be validly tendered into the Offer, pursuant to and in accordance with the terms of the Offer, all of the Subject Shares Owned by Stockholder as of the date of this Agreement (free and clear of any encumbrances or restrictions), and (ii) if Stockholder acquires Ownership of any additional Subject Shares after the date of this Agreement, to promptly (and, in any event, not later than two business days after Stockholder acquires Ownership of such additional Subject Shares) validly tender or cause to be validly tendered into the Offer, pursuant to and in accordance with the terms of the Offer, all of such additional Subject Shares (free and clear of any encumbrances or restrictions). Stockholder agrees not to withdraw, and agrees not to permit the withdrawal of, any of the Subject Shares from the Offer unless and until the Offer expires without Acquisition Sub having accepted for payment any shares of Company Common Stock tendered in the Offer. Stockholder acknowledges and agrees that Acquisition Sub's obligation to accept for payment shares of Company Common Stock validly tendered in the Offer, including any Subject Shares validly tendered by Stockholder, is subject to the terms and conditions of the Merger Agreement and the Offer. For all the Subject Shares validly tendered in the Offer and not withdrawn, provided that Acquisition Sub accepts for purchase and purchases shares of Company Common Stock pursuant to the Offer, Stockholder will be entitled to receive the highest price per share paid by Acquisition Sub for shares of Company Common Stock pursuant to the Offer. 3.2 STOCKHOLDER INFORMATION. Stockholder hereby agrees to permit Parent and Acquisition Sub to publish and disclose in the Offer Documents and, if approval of the stockholders of the Company is required under the terms of the DGCL or other applicable law, in the Proxy Statement, Stockholder's identity and ownership of shares of Company Common Stock and the nature of Stockholder's commitments, arrangements and understandings under this Agreement. SECTION 4. VOTING OF SHARES 4.1 VOTING COVENANT. Stockholder hereby agrees that, prior to the Termination Date, at any meeting of the stockholders of the Company, however called, and in any written action by consent of stockholders of the Company, unless otherwise directed in writing by Parent, Stockholder shall cause the Subject Securities to be voted: (a) in favor of the Merger, the execution and delivery by the Company of the Merger Agreement and the adoption and approval of the Merger Agreement and the terms thereof, in favor of each of the other actions contemplated by the Merger Agreement and in favor of any action in furtherance of any of the foregoing; (b) against any action or agreement that would result in a breach of any representation, warranty, covenant or obligation of the Company in the Merger Agreement; and (c) against the following actions (other than the Merger and the transactions contemplated by the Merger Agreement): (A) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company or any subsidiary of 3. the Company; (B) any sale, lease, sublease, license, sublicense or transfer of a material portion of the rights or other assets of the Company or any subsidiary of the Company; (C) any reorganization, recapitalization, dissolution or liquidation of the Company or any subsidiary of the Company; (D) any change in a majority of the board of directors of the Company; (E) any amendment to the Company's certificate of incorporation or bylaws; (F) any material change in the capitalization of the Company or the Company's corporate structure; and (G) any other action which is intended, or could reasonably be expected, to impede, interfere with, delay, postpone, discourage or adversely affect the Merger or any of the other transactions contemplated by the Merger Agreement or this Agreement. Prior to the Termination Date, Stockholder shall not enter into any agreement or understanding with any Person to vote or give instructions in any manner inconsistent with clause "(a)", clause "(b)" or clause "(c)" of the preceding sentence. 4.2 PROXY; FURTHER ASSURANCES. (a) Contemporaneously with the execution of this Agreement: (i) Stockholder shall deliver to Parent a proxy in the form attached to this Agreement as Exhibit A, which shall be irrevocable to the fullest extent permitted by law (at all times prior to the Termination Date) with respect to the shares referred to therein (the "Proxy"); and (ii) Stockholder shall cause to be delivered to Parent an additional proxy (in the form attached hereto as Exhibit A) executed on behalf of the record owner of any outstanding shares of Company Common Stock that are owned beneficially (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934), but not of record, by Stockholder. (b) Stockholder shall, at Stockholder's own expense, perform such further acts and execute such further proxies and other documents and instruments as may reasonably be required to vest in Parent the power to carry out and give effect to the provisions of this Agreement. (c) Stockholder shall not enter into any tender, voting or other such agreement, or grant a proxy or power of attorney, with respect to any of the Subject Shares that is inconsistent with this Agreement or otherwise take any other action with respect to the Subject Shares that would in any way restrict, limit or interfere with the performance of Stockholder's obligations hereunder or the transactions contemplated hereby. SECTION 5. WAIVER OF APPRAISAL RIGHTS Stockholder hereby irrevocably and unconditionally waives, and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal and any dissenters' rights relating to the Merger that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Common Stock Owned by Stockholder. 4. SECTION 6. NO SOLICITATION Stockholder agrees that, during the period from the date of this Agreement through the Termination Date, Stockholder shall not, directly or indirectly, and Stockholder shall ensure that Stockholder's Representatives do not, directly or indirectly take any action that the Company or any of its Representatives would be prohibited from taking, directly or indirectly, pursuant to Section 5.3(a) of the Merger Agreement. Notwithstanding the foregoing, if Stockholder or any Representative of Stockholder is a member of the board of directors of the Company, such member of the board of directors of the Company may take actions in such capacity (acting as a member of the board of directors of the Company) to the extent permitted by Section 1.2(b) of the Merger Agreement or the proviso in Section 5.3(a) of the Merger Agreement. SECTION 7. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER Stockholder hereby represents and warrants to Parent as follows: 7.1 AUTHORIZATION, ETC. Stockholder has all requisite right, power and authority to execute and deliver this Agreement and the Proxy and to perform Stockholder's obligations hereunder and thereunder. This Agreement and the Proxy have been duly executed and delivered by Stockholder and, assuming the due authorization, execution and delivery by Parent and Acquisition Sub of this Agreement, constitute legal, valid and binding obligations of Stockholder, enforceable against Stockholder in accordance with their terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies. If Stockholder is a corporation, then Stockholder is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it was organized. If Stockholder is a general or limited partnership, then Stockholder is a partnership duly organized, validly existing and in good standing under the laws of the jurisdiction in which it was organized. If Stockholder is a limited liability company, then Stockholder is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction in which it was organized. 7.2 NO CONFLICTS OR CONSENTS. (a) The execution and delivery of this Agreement and the Proxy by Stockholder do not, and the performance of this Agreement and the Proxy by Stockholder will not: (i) conflict with or violate any law, rule, regulation, order, decree or judgment applicable to Stockholder or by which Stockholder or any of Stockholder's properties is or may be bound or affected; or (ii) result in or constitute (with or without notice or lapse of time) any breach of or default under, or give to any other Person (with or without notice or lapse of time) any right of termination, amendment, acceleration or cancellation of, or result (with or without notice or lapse of time) in the creation of any encumbrance or restriction on any of the Subject Securities pursuant to, any Contract to which Stockholder is a party or by which Stockholder or any of Stockholder's affiliates or properties is or may be bound or affected (other than any necessary filings under the HSR Act or the Exchange Act), except for any such breaches, defaults or other occurrences that would not prevent or delay the performance by Stockholder of Stockholder's obligations under this Agreement. 5. (b) The execution and delivery of this Agreement and the Proxy by Stockholder do not, and the performance of this Agreement and the Proxy by Stockholder will not, require any consent or approval of any Person. The execution and delivery of any additional proxy pursuant to Section 4.2(a)(ii) with respect to any shares of Company Common Stock that are owned beneficially but not of record by Stockholder do not, and the performance of any such additional proxy will not, require any consent or approval of any Person. (c) Exhibit B identifies each Contract under which Stockholder or any affiliate of Stockholder has or may acquire any right against any of the Acquired Corporations. Except as disclosed on Exhibit B, neither Stockholder nor any affiliate of Stockholder shall have any rights or claims under any such Contract against the Company, Parent or any other Person after the Effective Time. 7.3 TITLE TO SECURITIES. As of the date of this Agreement: (a) Stockholder holds of record (free and clear of any encumbrances or restrictions other than restrictions imposed by applicable securities laws or pursuant to this Agreement) the number of outstanding shares of Company Common Stock set forth under the heading "Shares Held of Record" on the signature page hereof; (b) Stockholder holds (free and clear of any encumbrances or restrictions other than restrictions imposed by applicable securities laws or pursuant to this Agreement) the options, warrants and other rights to acquire shares of Company Common Stock set forth under the heading "Options and Other Rights" on the signature page hereof; (c) Stockholder Owns the additional securities of the Company set forth under the heading "Additional Securities Beneficially Owned" on the signature page hereof; and (d) Stockholder does not directly or indirectly Own any shares of capital stock or other securities of the Company, or any option, warrant or other right to acquire (by purchase, conversion or otherwise) any shares of capital stock or other securities of the Company, other than the shares and options, warrants and other rights set forth on the signature page hereof. SECTION 8. MISCELLANEOUS 8.1 FURTHER ASSURANCES. From time to time and without additional consideration, Stockholder shall (at Stockholder's sole expense) execute and deliver, or cause to be executed and delivered, such additional transfers, assignments, endorsements, proxies, consents and other instruments, and shall (at Stockholder's sole expense) take such further actions, as Parent may request for the purpose of carrying out and furthering the intent of this Agreement. 8.2 FIDUCIARY DUTIES. Notwithstanding anything in this Agreement to the contrary: (a) Stockholder makes no agreement or understanding herein in any capacity other than in Stockholder's capacity as a record holder and beneficial owner of Subject Securities; (b) nothing in this Agreement shall be construed to limit or affect any action or inaction by Stockholder, or any director, officer, partner, member or employee, as applicable, of Stockholder, in either case serving on the Company's board of directors acting in such person's capacity as a director or fiduciary of the Company; and (c) Stockholder shall have no liability to Parent, Acquisition Sub or any of their respective affiliates under this Agreement or otherwise as a result of any action or inaction by Stockholder, or any director, officer, partner, member or employee, as applicable, of 6. Stockholder, in either case serving on the Company's board of directors acting in such person's capacity as a director or fiduciary of the Company. 8.3 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The termination of this Agreement shall not relieve Stockholder from any liability for any breach by Stockholder prior to such termination of any representation, warranty, covenant or agreement contained in this Agreement. 8.4 EXPENSES. All costs and expenses incurred in connection with the transactions contemplated by this Agreement shall be paid by the party incurring such costs and expenses. 8.5 NOTICES. Any notice or other communication required or permitted to be delivered to either party under this Agreement shall be in writing and shall be deemed properly delivered, given and received when received at the address or facsimile telephone number set forth beneath the name of such party below (or at such other address or facsimile telephone number as such party shall have specified in a written notice given to the other party): if to Stockholder: at the address set forth on the signature page hereof; and if to Parent or Acquisition Sub: Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 Attention: General Counsel Facsimile: (650) 522-5537 8.6 SEVERABILITY. If any provision of this Agreement or any part of any such provision is held under any circumstances to be invalid or unenforceable in any jurisdiction, then (a) such provision or part thereof shall, with respect to such circumstances and in such jurisdiction, be deemed amended to conform to applicable laws so as to be valid and enforceable to the fullest possible extent, (b) the invalidity or unenforceability of such provision or part thereof under such circumstances and in such jurisdiction shall not affect the validity or enforceability of such provision or part thereof under any other circumstances or in any other jurisdiction, and (c) the invalidity or unenforceability of such provision or part thereof shall not affect the validity or enforceability of the remainder of such provision or the validity or enforceability of any other provision of this Agreement. Each provision of this Agreement is separable from every other provision of this Agreement, and each part of each provision of this Agreement is separable from every other part of such provision. 8.7 ENTIRE AGREEMENT. This Agreement, the Proxy and any other documents delivered by the parties in connection herewith constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings between the parties with respect thereto. No addition to or modification of 7. any provision of this Agreement shall be binding upon either party unless made in writing and signed by both parties. 8.8 ASSIGNMENT; BINDING EFFECT. Except as provided herein, neither this Agreement nor any of the interests or obligations hereunder may be assigned or delegated by Stockholder, and any attempted or purported assignment or delegation of any of such interests or obligations shall be void. Subject to the preceding sentence, this Agreement shall be binding upon Stockholder and (if applicable) Stockholder's heirs, estate, executors and personal representatives and Stockholder's successors and assigns, and shall inure to the benefit of Parent and its successors and assigns. Without limiting any of the restrictions set forth in Section 2 or Section 8.1 or elsewhere in this Agreement, this Agreement shall be binding upon any Person to whom any Subject Securities are transferred. Nothing in this Agreement is intended to confer on any Person (other than Parent and its successors and assigns) any rights or remedies of any nature. 8.9 INDEPENDENCE OF OBLIGATIONS. The covenants and obligations of Stockholder set forth in this Agreement shall be construed as independent of any other agreement or arrangement between Stockholder, on the one hand, and the Company or Parent, on the other. The existence of any claim or cause of action by Stockholder against the Company or Parent shall not constitute a defense to the enforcement of any of such covenants or obligations against Stockholder. 8.10 SPECIFIC PERFORMANCE. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement or the Proxy were not performed in accordance with its specific terms or were otherwise breached. Stockholder agrees that, in the event of any breach or threatened breach by Stockholder of any covenant or obligation contained in this Agreement or in the Proxy, Parent shall be entitled (in addition to any other remedy that may be available to it, including monetary damages) to seek and obtain (a) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation, and (b) an injunction restraining such breach or threatened breach. 8.11 NON-EXCLUSIVITY. The rights and remedies of Parent under this Agreement are not exclusive of or limited by any other rights or remedies which it may have, whether at law, in equity, by contract or otherwise, all of which shall be cumulative (and not alternative). Without limiting the generality of the foregoing, the rights and remedies of Parent under this Agreement, and the obligations and liabilities of Stockholder under this Agreement, are in addition to their respective rights, remedies, obligations and liabilities under common law requirements and under all applicable statutes, rules and regulations. 8.12 GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL. (a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. In any action between the parties arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement each of the parties irrevocably and unconditionally consents and submits to the jurisdiction and venue of the state and federal courts located in the State of Delaware. 8. (b) EACH PARTY IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO THIS AGREEMENT OR THE PROXY OR THE ENFORCEMENT OF ANY PROVISION OF THIS AGREEMENT OR THE PROXY. 8.13 COUNTERPARTS. This Agreement may be executed in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. 8.14 CAPTIONS. The captions contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement. 8.15 WAIVER. No failure on the part of any party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. No party shall not be deemed to have waived any claim available to such party arising out of this Agreement, or any power, right, privilege or remedy of such party under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given. 8.16 CONSTRUCTION. (a) For purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice versa; the masculine gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter genders; and the neuter gender shall include masculine and feminine genders. (b) The parties agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement. (c) As used in this Agreement, the words "include" and "including," and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words "without limitation." (d) Except as otherwise indicated, all references in this Agreement to "Sections" and "Exhibits" are intended to refer to Sections of this Agreement and Exhibits to this Agreement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.] 9. IN WITNESS WHEREOF, Parent, Acquisition Sub and Stockholder have caused this Agreement to be executed as of the date first written above. GILEAD SCIENCES, INC. ---------------------------------------- By ---------------------------------------- Title SIMBOLO ACQUISITION SUB, INC. ---------------------------------------- By ---------------------------------------- Title STOCKHOLDER ---------------------------------------- Signature ---------------------------------------- Printed Name Address: --------------------------- --------------------------- --------------------------- Facsimile: ---------------------------

SIGNATURE PAGE TO STOCKHOLDER AGREEMENT EXHIBIT A FORM OF IRREVOCABLE PROXY The undersigned stockholder (the "Stockholder") of TRIANGLE PHARMACEUTICALS, INC., a Delaware corporation (the "Company"), hereby irrevocably (to the fullest extent permitted by law) appoints and constitutes JOHN MILLIGAN, GREGG ALTON and GILEAD SCIENCES, INC., a Delaware corporation ("Parent"), and each of them, the attorneys and proxies of the Stockholder, with full power of substitution and resubstitution, to the full extent of the Stockholder's rights with respect to (i) the outstanding shares of capital stock of the Company owned of record by the Stockholder as of the date of this proxy, which shares are specified on the final page of this proxy, and (ii) any and all other shares of capital stock of the Company which the Stockholder may acquire on or after the date hereof. (The shares of the capital stock of the Company referred to in clauses "(i)" and "(ii)" of the immediately preceding sentence are collectively referred to as the "Shares.") Upon the execution hereof, all prior proxies given by the Stockholder with respect to any of the Shares are hereby revoked, and the Stockholder agrees that no subsequent proxies will be given with respect to any of the Shares. This proxy is irrevocable, is coupled with an interest and is granted in connection with, and as security for, the Stockholder Agreement, dated as of the date hereof, between Parent and the Stockholder (the "Stockholder Agreement"), and is granted in consideration of Parent entering into the Agreement and Plan of Merger, dated as of the date hereof, among Parent, Simbolo Acquisition Sub, Inc., a wholly-owned subsidiary of Parent, and the Company (the "Merger Agreement"). This proxy will terminate on the Termination Date (as defined in the Stockholder Agreement). The attorneys and proxies named above will be empowered, and may exercise this proxy, to vote the Shares at any time until the earlier to occur of the valid termination of the Merger Agreement or the effective time of the merger contemplated thereby (the "Merger") at any meeting of the stockholders of the Company, however called, and in connection with any written action by consent of stockholders of the Company: (i) in favor of the Merger, the execution and delivery by the Company of the Merger Agreement and the adoption and approval of the Merger Agreement and the terms thereof, in favor of each of the other actions contemplated by the Merger Agreement and in favor of any action in furtherance of any of the foregoing; and (ii) against any action or agreement that would result in a breach of any representation, warranty, covenant or obligation of the Company in the Merger Agreement; and (iii) against the following actions (other than the Merger and the other transactions contemplated by the Merger Agreement): (A) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company or any subsidiary of the Company; (B) any sale, lease, sublease, license, sublicense or transfer of a material portion of the rights or other assets of the Company or any subsidiary of the Company; (C) any reorganization, recapitalization, dissolution or liquidation of the Company or any subsidiary of the Company; (D) any change in a majority of the board of directors of the Company; (E) any amendment to the Company's A-1 certificate of incorporation or bylaws; (F) any material change in the capitalization of the Company or the Company's corporate structure; and (G) any other action which is intended, or could reasonably be expected to impede, interfere with, delay, postpone, discourage or adversely affect the Merger or any of the other transactions contemplated by the Merger Agreement or the Stockholder Agreement. The Stockholder may vote the Shares on all other matters not referred to in this proxy, and the attorneys and proxies named above may not exercise this proxy with respect to such other matters. This proxy shall be binding upon the heirs, estate, executors, personal representatives, successors and assigns of the Stockholder (including any transferee of any of the Shares). If any provision of this proxy or any part of any such provision is held under any circumstances to be invalid or unenforceable in any jurisdiction, then (a) such provision or part thereof shall, with respect to such circumstances and in such jurisdiction, be deemed amended to conform to applicable laws so as to be valid and enforceable to the fullest possible extent, (b) the invalidity or unenforceability of such provision or part thereof under such circumstances and in such jurisdiction shall not affect the validity or enforceability of such provision or part thereof under any other circumstances or in any other jurisdiction, and (c) the invalidity or unenforceability of such provision or part thereof shall not affect the validity or enforceability of the remainder of such provision or the validity or enforceability of any other provision of this proxy. Each provision of this proxy is separable from every other provision of this proxy, and each part of each provision of this proxy is separable from every other part of such provision. Dated: December __, 2002 STOCKHOLDER ------------------------------------- Signature ------------------------------------- Printed Name Number of shares of common stock of the Company owned of record as of the date of this proxy: ------------------------------------- SIGNATURE PAGE TO IRREVOCABLE PROXY EXHIBIT B CERTAIN CONTRACTS B-1 EX-99.(D)(4) 14 a2096276zex-99_d4.txt EXHIBIT 99(D)(4) Exhibit (d)(4) CONFIDENTIAL November 1, 2002 Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 Attention: John F. Milligan, Ph.D Dear Sirs: In connection with the analysis of a possible strategic or financial transaction (the "Transaction") between Gilead Sciences, Inc. ("Gilead") and Triangle Pharmaceuticals, Inc. ("Triangle"), Gilead may deliver to Triangle or its Representatives (as defined below) certain oral and written Information (as defined below) concerning Gilead and the Transaction, and Triangle may deliver to Gilead or its Representatives certain oral and written Information concerning Triangle and the Transaction. Gilead and Triangle are sometimes referred to herein individually as a "Party" and collectively as the "Parties." As used herein, "Information" means (i) all data, reports, analyses, compilations, studies, interpretations, forecasts, records and other materials (in whatever form maintained, whether documentary, computer storage or otherwise) to the extent such materials contain or otherwise reflect confidential or proprietary information concerning a Party, any of its subsidiaries or affiliates or the Transaction that such Party or its Representatives may provide to the other Party or its Representatives in the course of the evaluation of the Transaction ("Provided Information"), together with all data, reports, analyses, compilations, studies, interpretations, forecasts, records or other materials (in whatever form maintained, whether documentary, computer storage or otherwise) prepared by the other Party or its Representatives to the extent such materials contain or otherwise reflect or are based upon any Provided Information or reflect the review of, interest in, or evaluation of all or any portion of the Transaction ("Derived Information"), and (ii) the fact that discussions or negotiations are taking place between Triangle and Gilead concerning the Transaction and all confidential or proprietary information related thereto with respect to the Transaction, including the status thereof. As used herein, "Representatives" means, collectively, the controlled affiliates of a Party and the respective directors, officers, employees, investment bankers, accountants, attorneys, financial advisors, lenders and consultants of such Party or its controlled affiliates. As used herein, the term "person" shall be broadly interpreted to include, without limitation, any corporation, partnership, trust or individual. Each Party hereby agrees to use the Information concerning the other Party solely for the purpose of evaluating a possible Transaction, that the Information concerning the other Party will be kept confidential and that the Party will not disclose any of the Information concerning the other Party in any manner whatsoever; provided, however, that (i) each Party November 1, 2002 Page 2 of 6 may make disclosure of any such Information concerning the other Party to which the other Party gives its prior written consent, (ii) each Party may make disclosure of any Information concerning the other Party in order, based upon the advice of such Party's counsel, that such disclosure is necessary, to avoid violating the federal securities and other applicable laws, regulations and orders; provided that each Party agrees, to the extent reasonably practicable and legally permissible, to notify the other Party of any such required disclosure prior to the making of such disclosure and to cooperate with the other Party, at such other Party's expense, to the extent it may seek to limit such disclosure; and provided further, that with respect to disclosure under this clause (ii), each Party will give reasonable advance notice to the other Party prior to disclosing technical scientific information included in the Information concerning the other Party and reasonably cooperate with the other Party to the extent it may seek to limit such disclosure; (iii) each Party may disclose to its Representatives any Information concerning the other Party if and to the extent that such Representatives, in the reasonable judgment of the Party, need to know any Information concerning the other Party for the purpose of evaluating a possible Transaction and are informed of the confidential nature of the Information concerning the other Party and the Party's confidentiality obligations hereunder; and (iv) neither party shall be permitted to disclose any Information regarding any proposed Transaction to any third party unless outside counsel shall have advised such party that it is required to do so under applicable federal securities laws. If a Transaction is not consummated or if the other Party so requests, each Party promptly will return to the other Party all copies of the Provided Information concerning the other Party in its possession and in the possession of its Representatives, and will destroy all copies of any Derived Information concerning the other Party; provided that a Party may keep one copy of the Information in its legal files for the sole purpose of ensuring or demonstrating compliance with the obligations contained herein. However, this Agreement will continue to apply to such Information on the terms set forth herein. Notwithstanding the return or destruction of any Information concerning the other Party, or documents or material containing or reflecting any Information concerning the other Party, each Party and its Representatives will continue to be bound by its obligations of confidentiality and other obligations hereunder for the terms specified in this Agreement. Neither Party will initiate or maintain contact (except for those contacts made in the ordinary course of business) in any way relating to the Information or a possible Transaction with any officer, director, shareholder, employee or agent of the other Party or its subsidiaries regarding its business, operations, prospects or finances, except with the express written consent of the other Party. It is understood that each Party will arrange for appropriate contacts for due diligence purposes. It is further understood that all (i) communications regarding a possible Transaction, (ii) requests for additional information, (iii) requests for facility tours or management meetings and (iv) discussions or questions regarding procedures will be submitted or directed to a single designee of each Party specified in writing by such Party. This Agreement shall not apply to such of the Information as (i) is or becomes generally available to the public other than as a result of unauthorized disclosure by the Party to which the Information is disclosed or any of its Representatives, (ii) was within the possession of November 1, 2002 Page 3 of 6 the Party to which the Information is disclosed prior to its being furnished to such Party by or on behalf of the other Party pursuant hereto, provided that the source of such information was not known by the Party to which the Information is disclosed to be in violation of a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the other Party or any other party with respect to such Information, (iii) becomes available to the Party to which the Information is disclosed on a nonconfidential basis from a source other than the other Party or any of its Representatives, provided that such source is not known by the Party to which the Information is disclosed to be in violation of a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the other Party or any other party with respect to such Information, or (iv) was, or is in the future, independently developed by the Party to which the Information is disclosed or by any of its affiliates without reliance on the Information concerning the other Party. Although each Party has endeavored and will endeavor to include in the Information it discloses to the other Party the information which it believes to be relevant for the purpose of the other Party's evaluation of a possible Transaction, each Party (i) acknowledges that neither the other Party nor any of its subsidiaries or affiliates or any of its Representatives makes any representation or warranty (express or implied) as to the accuracy or completeness of any Information and (ii) agrees to assume full responsibility for all conclusions it derives from the Information. Each Party shall be entitled to, and shall, rely solely on representations and warranties made in any final agreement relating to the Transaction. In the event that either Party or any person to whom it or its Representatives transmit Information concerning the other Party becomes legally compelled (by oral questions, interrogatories, requests for Information or documents, subpoenas, civil investigative demands or otherwise) to disclose any such Information, such Party shall provide the other Party with prompt written notice so that the other Party may seek a protective order or other appropriate remedy, or both. If, in the absence of a protective order or other remedy or the receipt of a waiver by the other Party, such Party or any of its Representatives are nonetheless, based upon the advice of such Party's counsel, legally compelled to disclose Information concerning the other Party to any tribunal, such Party or its Representative may, without liability hereunder, disclose to such tribunal any portion of the Information concerning the other Party which such Party's counsel advises is legally required to be disclosed. Each Party shall be entitled to reimbursement from the other Party for such Party's reasonable expenses, including the fees and expenses of such Party's counsel, in connection with any action required of such Party by this paragraph. Each Party agrees that, for a period of twelve (12) months from the date of this Agreement (the "Standstill Period"), neither it nor any of its Representatives acting on its behalf (excluding its investment bankers) who have knowledge of the discussions regarding the Transaction and access to material non-public information about Triangle and Gilead, as the case may be will, without the prior written consent of the other Party's board of directors: (i) acquire, offer to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, any voting securities or direct or indirect rights to acquire any voting securities of the other Party or any subsidiary of the other Party, or any assets of the other Party or any subsidiary November 1, 2002 Page 4 of 6 or division thereof; (ii) make, or in any way participate in, directly or indirectly, any "solicitation" of "proxies" (as such terms are used in the rules of the Securities Exchange Commission) to vote, or seek to advise or influence any person or entity with respect to the voting of, any voting securities of the other Party, (iii) make any public announcements with respect to, or submit a proposal for, or offer of (with or without conditions) any extraordinary transaction involving the other Party or its securities or assets, (iv) form, join or in any way participate in a "group" (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) in connection with any of the foregoing or (v) request the other Party or any of its Representatives, directly or indirectly, to amend or waive any provision of this paragraph. Notwithstanding anything to the contrary contained in this Agreement, if, at any time during the Standstill Period, any person other than a Party or its Representatives (i) commences or publicly announces a tender offer for at least 50% of the outstanding capital stock of a Party, (ii) commences or publicly announces a proxy contest with respect to the election of any directors of a Party, or (iii) enters into an agreement with a Party contemplating the acquisition (by way of merger, tender offer or otherwise) of at least 50% of the outstanding capital stock of such Party or all or substantially all of such Party's assets, then (in any of such cases) the restrictions applicable to the other Party, as set forth in this paragraph, shall immediately terminate and cease to be of any further force or effect. Notwithstanding any of the above restrictions, nothing shall prohibit the purchase, holding and/or sale by either Party or its subsidiaries of less than two percent (2%) of the voting securities of the other Party and/or other relationships between the Parties in the ordinary course of business (e.g., licensing and other comparable transactions). Each Party agrees that neither it, its Representatives who are participating in negotiations or discussions between the Parties for a possible Transaction, or its officer(s) primarily responsible for human resources, employment issues and firm-wide recruiting will at any time from the date of this Agreement and for a period of one year thereafter, without obtaining the prior written consent of the other Party, solicit or direct any other person to solicit for employment with such Party any employee of the other Party so long as such employee is employed by the other; provided, however, that this paragraph will not prevent either Party or any Representative of either Party from: (a) causing to be placed or posted any general advertisement or similar notice (including any advertisement or notice on such Party's web site) that is not targeted specifically at employees of the other Party, or soliciting for employment any employee of the other Party who responds to any such advertisement or notice; or (b) engaging any recruiting firm or similar organization to identify or solicit persons for employment on behalf of such Party, provided that such recruiting firm is not instructed to solicit for employment employee of the other party or otherwise violate the terms of this Agreement. Provided also that such Party takes reasonable measures through its officer(s) primarily responsible for human resources, employment issues and firm-wide recruiting to prevent the solicitation for employment of such employees. Each Party understands and agrees that no contract or agreement providing for a Transaction with the other Party shall be deemed to exist between the Parties unless and until a definitive Transaction agreement has been executed and delivered, and each Party hereby waives, in advance, any claims (including, without limitation, breach of contract) in connection with a November 1, 2002 Page 5 of 6 possible Transaction with the other Party unless and until the Parties shall have entered into a definitive Transaction agreement. Each Party also agrees that unless and until a Transaction agreement between the Parties has been executed and delivered, the other Party has no legal obligation of any kind whatsoever with respect to any such Transaction by virtue of this Agreement or any other written or oral expression with respect to such Transaction except, in the case of this Agreement, for the matters specifically agreed to herein. For purposes of this Agreement, the term "Transaction agreement" does not include the nonbinding provisions of an executed letter of intent or the nonbinding provisions of any other preliminary written agreement in principle. Each Party further understands that (i) the other Party shall be free to conduct the process for a possible Transaction as it in its sole discretion shall determine, and (ii) the other Party reserves the right, in its sole and absolute discretion, to reject any and all proposals including, but not limited to those relating to such process, and to terminate discussions and negotiations with such Party at any time. This Agreement shall inure to the benefit of and be binding upon Triangle and Gilead and their respective successors and permitted assigns. Each Party agrees that the other Party may be irreparably injured by a breach of this Agreement by such Party or its Representatives and that the other Party shall be entitled to seek equitable relief, including injunctive relief and specific performance, in the event of any breach of the provisions of this Agreement. Such remedies shall not be deemed to be the exclusive remedies for a breach of this Agreement by such Party or its Representatives, but shall be in addition to all other remedies available at law or in equity. Any assignment of this Agreement by Gilead or Triangle without the prior written consent of the other Party shall be void. This Agreement shall cover Information disclosed from the date hereof to May 1, 2003 and this Agreement shall terminate on such date (or such earlier date, if any, that the Information is returned or destroyed pursuant to the provisions hereof) but the obligations applicable to the Information (including, without limitation confidentiality and non-disclosure) shall survive and continue in full force and effect for a period of five (5) years from the date hereof and the standstill and non-solicitation obligations set forth herein shall survive and continue in full force and effect for the respective periods set forth above. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without regard to its conflicts of laws provisions. This Agreement contains the entire agreement between the Parties concerning confidentiality of the Information concerning each of the Parties and related matters. No modifications of this Agreement or waiver of the terms and conditions hereof shall be binding upon the Parties, unless approved in writing by each of Triangle and Gilead. No written consent required by this Agreement shall be unreasonably withheld. November 1, 2002 Page 6 of 6 If the foregoing reflects our agreement, kindly sign and return the duplicate copy of this letter to us. Sincerely, TRIANGLE PHARMACEUTICALS, INC. By: /s/ ANDREW FINKLE --------------------------------- Exec. VP. Agreed to as of the date set forth above: GILEAD SCIENCES, INC. By: /s/ JOHN MILLIGAN ------------------------------------ Sr. VP and CFO EX-99.(D)(5) 15 a2096276zex-99_d5.txt EXHIBIT 99(D)(5) EXHIBIT (d)(5) 7.50% CONVERTIBLE PROMISSORY NOTE $50,000,000.00 Durham, North Carolina December 9, 2002 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS NOTE IS ALSO SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 17 HEREOF. FOR VALUE RECEIVED, the undersigned, TRIANGLE PHARMACEUTICALS, INC., a Delaware corporation (the "COMPANY"), promises to pay to GILEAD SCIENCES, INC. (the "INVESTOR"), in lawful money of the United States and in immediately available funds, the principal amount of Fifty Million Dollars ($50,000,000.00) (together with increases to such amount pursuant to Section 1 below, the "FACE AMOUNT") together with interest thereon calculated from the date hereof and delay or default amounts payable pursuant to, and in accordance with, the provisions of this Note. This Note was issued in connection with that Agreement and Plan of Merger among the Investor, Simbolo Acquisition Sub, Inc., and the Company dated December 3, 2002 (the "MERGER AGREEMENT"). As used herein, "NOTE" means this 7.50% Convertible Promissory Note and any similar convertible promissory note issued by the Company in exchange for, upon the partial conversion of, or to effect a transfer of, this Note. 1. ACCRUAL OF INTEREST. Except as otherwise expressly provided in Section 9 hereof, interest shall accrue at the rate of seven and one half percent (7.50%) per annum (based on a year of 365 days for the actual days elapsed) on the Face Amount and, if not paid in cash on the Interest Payment Date (as defined below) shall result, on each Interest Payment Date, in a corresponding increase in the then outstanding Face Amount of this Note. 2. PAYMENT OF PRINCIPAL AND INTEREST ON NOTE. (a) SCHEDULED PAYMENT OF PRINCIPAL. The Company shall pay the Face Amount, together with all accrued and unpaid interest and unpaid delay or default amounts thereon, if any, in cash to the Holder of this Note on the earlier of (i) December 9, 2007 or (ii) the termination of the Merger Agreement pursuant to Section 8.1(h) (in each case, the "MATURITY DATE"). (b) PAYMENT OF INTEREST. Commencing with a payment on December 31, 2002, the Company shall pay interest on this Note in cash quarterly in arrears on March 31, June 30, September 30 and December 31 of each year and on the Maturity Date, or if any such day is not a business day, on the next succeeding business day (each an "INTEREST PAYMENT DATE") to Holders of record on the immediately preceding March 15, June 15, September 15 and December 15, respectively. (c) REDUCTION OF FACE AMOUNT ON HSR CLEARANCE DELAY. The Face Amount of the Note may be reduced in accordance with, and subject to, the provisions of Sections 8.1(e) and 8.1(f) of the Merger Agreement. 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. (a) REQUISITE POWER AND AUTHORITY. The Company has all requisite power and authority to execute and deliver this Note and the other Note Documents, to consummate the transactions contemplated hereby and thereby and to perform its obligations hereunder and thereunder. All action on the Company's part necessary for the execution and delivery of this Note and the other Note Documents, the consummation of the transactions contemplated hereby and thereby and the performance of all obligations of the Company hereunder and thereunder prior to the issuance of this Note has been taken. The Note Documents have been or will be duly executed and delivered by the Company. The Note Documents (assuming due execution and delivery by the Investor) are legal, valid and binding obligations of the Company, enforceable against it in accordance with their terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. (b) OFFERING VALID. Assuming the accuracy of the representations and warranties of the Investor contained in Section 5 hereof, the offer, sale and issuance of the Note and the conversion of the Note into the Conversion Shares will be exempt from the registration requirements of the Securities Act and will have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable state securities laws. (c) NO GENERAL SOLICITATION. Neither the Company, nor any of its Subsidiaries or Affiliates, or, to its knowledge, any person acting on its or their behalf has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of the Note or the Conversion Shares. (d) NO INTEGRATED OFFERING. Neither the Company, nor any of its Subsidiaries or Affiliates, nor to its knowledge any person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration under the Securities Act of the Note or the Conversion Shares. The issuance of the Note and the Conversion Shares to the Investor or any other Holder will not be integrated with any other issuance of the Company's securities (past, current or future) which requires stockholder approval under the rules of the Nasdaq National Market. 2 (e) FORM S-3. The Company is eligible as of the Issue Date to file the of the Issue Date Form S-3 under the Securities Act and the rules promulgated thereunder, and as of the Issue Date Form S-3 is permitted under the Securities Act and the rules promulgated thereunder to be used for the transactions contemplated by the Note Documents. 4. COVENANTS OF THE COMPANY. (a) PAYMENT OF NOTE. The Company shall promptly pay the principal of and interest on this Note on the dates and in the manner provided herein. (b) SEC REPORTS AND AVAILABLE INFORMATION. The Company shall file with the SEC the annual reports and the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) that are specified in Sections 13 and 15(d) of the Exchange Act within the time periods specified therein. (c) LIMITATION ON INDEBTEDNESS. The Company shall not, and shall not permit any of its Subsidiaries to, Incur or suffer to exist any Indebtedness except: (i) Indebtedness evidenced by this Note; (ii) Permitted Indebtedness; (iii) Indebtedness owing by any of the Wholly-Owned Subsidiaries to any other Wholly-Owned Subsidiaries or the Company; (iv) other Indebtedness in an aggregate amount not to exceed $42,500,000 at any time; and (v) refinancings, extensions or other modifications of any of the items of Indebtedness and described in the foregoing clauses (i) through (iv). (d) REPURCHASE RIGHT UPON A CHANGE OF CONTROL. The Company shall not agree to or permit a Change of Control unless it has available to it cash or committed financing sufficient to repurchase this Note, and irrevocably and unconditionally agrees to repurchase this Note pursuant to Section 8 hereof. (e) CORPORATE EXISTENCE. The Company shall, and shall cause each of its Subsidiaries to: (i) do or cause to be done all things reasonably necessary to preserve and keep in full force and effect its and their corporate existence, and its rights and franchises; and (ii) use commercially reasonable efforts to maintain, preserve and protect all of its material patents, trademarks and trade names, and preserve all the remainder of its material assets, in use or useful in the conduct of its business and keep the same in good repair, working order and condition (taking into consideration ordinary wear and tear) and from time to time make, or cause to be made, all needful and proper repairs, renewals and replacements, betterments and improvements thereto consistent with industry practices. (f) TAX COMPLIANCE. The Company shall pay all transfer, excise or similar taxes (not including income or franchise taxes) in connection with the issuance, sale, delivery or transfer by the Company to the Holders of this Note and the Conversion Shares, and shall indemnify and save each Holder harmless without limitation as to time against any and all liabilities with respect to such taxes. The Company shall not be responsible for any taxes in connection with the transfer of this Note or such Conversion Shares by the Holder thereof. The obligations of the Company under this Section 4(f) shall survive the payment, prepayment, conversion or redemption of this Note. 3 (g) STATEMENT BY OFFICERS AS TO DEFAULT. The Company shall deliver to the Holders, as soon as possible and in any event within five days after the Company becomes aware of the occurrence of any Event of Default or an event which, with notice or the lapse of time or both, would constitute an Event of Default, an Officers' Certificate setting forth the details of such Event of Default or Default and the action which the Company proposes to take with respect thereto. (h) APPROVED MARKET LISTING. The Company shall not voluntarily remove the Common Stock from listing on an Approved Market. (i) RESERVATION OF SHARES; STOCK EXCHANGE LISTING. (i) The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of this Note and the issuance of the Conversion Shares, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of this Note and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of this Note, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose, including without limitation engaging in best efforts to obtain the requisite shareholder approval. Without in any way limiting the foregoing, the Company agrees to reserve and at all times keep available solely for purposes of conversion of this Note such number of authorized but unissued shares of Common Stock that is at least equal to 150% of the aggregate shares issuable upon conversion of this Note, which number shall be appropriately adjusted for any stock split, reverse split, stock dividend or reclassification of the Common Stock. (ii) The Company shall at its expense (i) not less than thirty (30) days prior to the first anniversary of the date of issuance of this Note, prepare and submit an application to Nasdaq for listing the Conversion Shares and (ii) cause all shares of Common Stock issued upon the conversion of this Note to be listed at the time of such issuance on Nasdaq and/or such other national securities exchange shares on which shares of Common Stock are then listed on and shall maintain such listing. (j) NOTE ISSUABLE ON CONVERSION. Upon any partial conversion by the Investor (or then Holder) of this Note into Common Stock pursuant to the terms hereof, the Company shall issue and deliver to the Investor (or Holder) within three (3) trading days of the conversion date, a new Note for the principal amount of this Note which the Investor (or Holder) has not yet elected to convert but which is evidenced in part by this Note submitted to the Company in connection with such conversion (with the number of and denomination of such new Note(s) designated by the Investor or Holder). (k) FORM D; BLUE SKY LAWS. The Company agrees to file a Form D with respect to this Note and Conversion Shares, as required under Regulation D and to provide a copy thereof to the Investor promptly after such filing. The Company has taken such action as the Company shall have reasonably determined is necessary to qualify this Note and Conversion Shares for sale to the Investor under applicable securities or "blue sky" laws of the states of the 4 United States (or to obtain an exemption from such qualification), and has provided evidence of any such action so taken to the Investor. (l) SUBORDINATED INDEBTEDNESS. The Company will not make any payment in respect to any Indebtedness that is subordinated to the Indebtedness owing by the Company to the Holder under the Note Documents, except in compliance with the terms of such Indebtedness, or amend any provision contained in any documentation relating to such Indebtedness that would adversely affect the Investor's rights without the consent of the Investor. 5. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. (a) REQUISITE POWER AND AUTHORITY. The Investor has all requisite power and authority to execute and deliver this Note and the other Note Documents, to consummate the transactions contemplated hereby and thereby and to perform its obligations hereunder and thereunder. All action on the Investor's part necessary for the execution and delivery of this Note and the other Note Documents, the consummation of the transactions contemplated hereby and thereby and the performance of all obligations of the Investor hereunder and thereunder prior to the issuance of this Note has been taken. The Note Documents have been or will be duly executed and delivered by the Investor. The Note Documents (assuming due execution and delivery by the Company) are legal, valid and binding obligations of the Investor, enforceable against it in accordance with their terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. (b) INVESTMENT REPRESENTATIONS. The Investor acknowledges that neither this Note nor the Conversion Shares have been registered under the Securities Act or under any state securities laws. The Investor (a) is acquiring this Note and the Conversion Shares for its own account, not as a nominee or agent, and not with the present view to, or for resale in connection with, any distribution thereof in violation of applicable securities laws, (b) is an "accredited investor" within the meaning of Regulation D, Rule 501(a), promulgated by the SEC, (c) acknowledges that this Note and the Conversion Shares must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from the registration requirements of the Securities Act is available and (d)represents that by reason of its business or financial experience, the Investorhas the capacity to protect its own interests in connection with the transactions contemplated by the Note Documents. (c) NO BROKER. The Investor has not employed any broker or finder or incurred any liability for any brokerage or finders' fees or any similar fees or commissions in connection with the transactions contemplated by this Note. (d) DISCLOSURE OF INFORMATION. Without limiting any of the representations and warranties of the Company set forth in the Merger Agreement, the Investor represents that it has conducted its own due diligence investigation of the Company, that it has had an opportunity to ask questions and receive answers from the Company regarding this Note and the business, properties and financial condition of the Company. 5 6. OPTIONAL REDEMPTION. (a) OPTIONAL REDEMPTION. From and after the third (3rd) anniversary of the Issue Date (as hereinafter defined), or upon a Change of Control during the first year after the Issue Date, the Company, at its option, may upon written notice to the Holder of this Note redeem this Note, in whole but not in part, to the extent it has funds legally available and irrevocably reserved therefor and such redemption is not prohibited by the terms of its outstanding indebtedness, at the redemption price of 100% of the Face Amount thereof, plus an amount equal to all accrued and unpaid interest and unpaid delay or default amounts thereon, if any, to the redemption date; PROVIDED, HOWEVER, that in the event of such redemption by the Company from and after the third (3rd) anniversary of the Issue Date, (i) a registration statement covering the Conversion Shares has been declared effective by the SEC and is currently effective, and (ii) the Company is permitted (without the necessity of any further approvals or action) by law and under the rules of any securities exchange on which the Common Stock is traded to convert this Note into shares of Common Stock and the Company intends and has the financial resources and ability to redeem this Note. Nothing in this Section 6 shall prevent the Holder from converting this Note into Common Stock at any time after the first anniversary of the Issue Date prior to the payment of the redemption proceeds of this Note. (b) PAYMENT OF REDEMPTION PRICE. (i) The amount of the redemption price, on any redemption set forth herein, shall be paid to the Holder of this Note in cash. (ii) The Company's written notice shall specify the time and place of the redemption of this Note, calling upon the Holder to surrender this Note to the Company on the redemption date at the place designated in the notice. The date such written notice is received by a Holder is the "REDEMPTION RECORD DATE." The redemption date shall be not fewer than thirty (30) nor more than sixty (60) trading days after the Redemption Record Date. On or after the redemption date, the Holder of this Note shall present and surrender this Note to the Company at the place designated in the redemption notice and thereupon the redemption price of this Note, and any unpaid interest and unpaid delay or default amounts thereon to the redemption date, shall be paid in cash to or on the order of the person whose name appears in the Note Register (as herein defined) as the owner thereof, and the surrendered Note shall be canceled by the Company. Any notice of redemption by the Company shall be irrevocable, and any failure by the Company to redeem this Note for cash on the redemption date under this Section 6 shall result (without limiting the Holder's other rights under Section 9 and the other provisions of the Transaction Documents) in the automatic and permanent termination of all of the Company's rights under this Section 6. (iii) If a notice of redemption has been given pursuant to this Section 6 and the Holder of this Note shall, prior to the close of business on the business day immediately preceding the redemption date, give written notice to the Company pursuant to Section 7 below of the conversion of this Note (or any portion thereof), then such redemption shall not become effective as to this Note (or the portion thereof) to be converted and such conversion shall become effective as provided in Section 7 below. 6 7. CONVERSION RIGHTS; ADJUSTMENTS. The Holders of this Note shall have conversion rights as follows (the "CONVERSION RIGHTS"): (a) HOLDER'S RIGHT TO CONVERT. At any time after the first anniversary of the Issue Date, the Face Amount of this Note plus all accrued and unpaid interest and unpaid delay or default amounts thereon shall be convertible, in whole or inpart, at the option of the Holder thereof, at any time and from time to time into fully paid and nonassessable shares of the Company's Common Stock, par value $0.001 per share (the "COMMON STOCK") at the Conversion Price (as defined below) in effect as of the applicable Conversion Date (as defined below); PROVIDED, HOWEVER, that this Note may only be converted in such amounts and to the extent that such conversion would not violate the HSR Act (as defined in the Merger Agreement). The price at which shares of Common Stock shall be issuable upon conversion of this Note (the "CONVERSION PRICE") shall initially be $6.90. The Conversion Price shall be subject to adjustment as provided below. (b) FRACTIONAL SHARES. No fractional shares of Common Stock shall be issued upon conversion of this Note. In lieu of fractional shares, the Company shall pay cash equal to such fraction multiplied by the Closing Price per Share of Common Stock on the trading date immediately preceding the related Conversion Date. (c) MECHANICS OF CONVERSION. (i) In order to exercise its conversion rights under this Note, the Holder shall deliver written notice in the form of Exhibit 1 to the Company stating that such Holder elects to convert all or part of the Face Amount, plus the ratable portion of any accrued but unpaid interest and unpaid delay or default amounts, represented by this Note. Such notice shall state the portion of the Face Amount proposed to be converted into Common Stock, plus the ratable portion of any accrued but unpaid interest and unpaid delay or default amounts proposed to be converted into Common Stock, and shall be accompanied within one (1) trading day by this Note. The date contained in the notice shall be the conversion date ("CONVERSION DATE") and the Holder shall be deemed to own the underlying Common Stock as of such date. As soon as practicable (but no later than three (3) days) after the Conversion Date, the Company shall issue and deliver to such Holder a certificate or certificates for the number of shares of Common Stock determined by dividing (i) the portion of the Face Amount proposed to be converted into Common Stock, plus the ratable portion of any accrued and unpaid interest and Payments proposed to be converted into Common Stock, by (ii) the Conversion Price in effect as of such Conversion Date whereupon, in the case where this Note shall have been converted in its entirety, this Note shall be cancelled and, in the case where only part of this Note is converted (by election of the Holder), the amount outstanding under this Note shall be correspondingly reduced and the Company shall execute and deliver (at its own expense) a new Note of any authorized denomination as requested by the Holder in an aggregate principal amount equal to and in exchange for the unconverted portion of the principal amount of this Note so surrendered. Notwithstanding anything to the contrary in this Section 7, in the case where only a part of this Note is converted, the amount of the unconverted portion of this Note shall be at least $10,000. The conversion pursuant to Section 7 shall be deemed to have been made immediately prior to the close of business on the Conversion Date. The person or persons entitled to receive the 7 Common Stock issuable upon such conversion shall be treated for all purposes as the record Holder of such Common Shares at the close of business on the Conversion Date. (ii) If this Note shall have been surrendered for conversion as herein provided it shall no longer be deemed to be outstanding and all rights with respect to this Note, including the rights, if any, to receive interest, notices and consent rights shall immediately cease and terminate on the Conversion Date, except only the right of the Holder to receive shares of Common Stock or cash, as the case may be, in exchange therefor, and, if applicable, cash for any fractional shares of Common Stock and a replacement Note in respect of the portion of this Note that has not been converted into Common Stock. This Note, to the extent so converted, shall be retired and canceled. (d) ADJUSTMENTS TO CONVERSION PRICE. (i) SPECIAL DEFINITIONS. For purposes of this Section 7, the following definitions shall apply: (a) "OPTION" shall mean Rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities, other than such Rights, options or warrants granted to employees, directors or bona fide consultants of the Company pursuant to plans or arrangements approved by the Company's board of directors. (b) "CONVERTIBLE SECURITIES" shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock. (c) "ADDITIONAL SHARES OF COMMON STOCK" shall mean all shares of Common Stock issued (or, pursuant to Section 7(d)(x) below, deemed to be issued) by the Company after the Issue Date. (d) "RIGHTS TO ACQUIRE COMMON STOCK" (or "RIGHTS") shall mean all rights issued by the Company to acquire Common Stock whether by exercise of a warrant, option or similar call, or conversion of any existing instruments, in either case for consideration fixed, in amount or by formula, as of the date of issuance. (ii) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the Company shall at any time or from time to time after the Issue Date effect a subdivision of the outstanding Common Stock, the Conversion Price then in effect immediately before that subdivision shall be proportionately decreased. If the Company shall at any time or from time to time after the Issue Date combine the outstanding shares of Common Stock, the Conversion Price then in effect immediately before the combination shall be proportionately increased. Any adjustment under this paragraph shall become effective at the close of business on the date the subdivision or combination becomes effective. (iii) ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS. In the event the Company at any time or from time to time after the Issue Date shall make or issue a dividend or other distribution payable in Additional Shares of Common Stock, then and in each such event the Conversion Price in effect immediately prior to such event shall be decreased as 8 of the time of such issuance, by multiplying such Conversion Price by a fraction, the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such issuance and the denominator of which shall be the total number of shares of Common Stock outstanding immediately prior to such issuance plus the number of such Additional Shares of Common Stock issuable in payment of such dividend or distribution. (iv) ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In the event the Company at any time, or from time to time after the Issue Date shall make or issue, a dividend or other distribution payable in securities of the Company (other than shares of Common Stock) or other assets or properties (including, without limitation, cash dividends), then and in each such event provision shall be made so that the Holder of this Note shall receive in addition to the number of shares of Common Stock receivable upon conversion of this Note, the amount of securities of the Company or other assets or properties that they would have received had this Note been converted into Common Stock on the date of such event and had thereafter, during the period from the date of such event to and including the Conversion Date, retained such securities or other assets or properties receivable by them as aforesaid during such period giving application to all adjustments called for during such period, under this paragraph with respect to the rights of the Holder of this Note; PROVIDED that, in the event rights or benefits under such securities, assets or properties shall terminate prior to the time that the Holder of this Note may elect to convert this Note into shares of Common Stock, such amount of securities, assets or properties that the Holder would have received had such Holder converted his or her notes immediately prior to the distribution shall be distributed to the Holder of this Note on the date the securities, assets or properties are distributed to the holders of Common Stock. (v) ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE OR SUBSTITUTION. If the Common Stock issuable upon the conversion of this Note shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares, stock dividend or reorganization, reclassification, merger, consolidation or asset sale provided for elsewhere in this Section 7), then and in each such event the Holder of this Note (whether then outstanding or thereafter issued) shall have the right thereafter to convert this Note into the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification, or other change, by holders of the number of shares of Common Stock into which this Note might have been converted immediately prior to such reorganization, reclassification, or change, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof. (vi) REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR ASSET SALES. If at any time after the Issue Date there is a tender offer, exchange offer, merger, consolidation, recapitalization, sale of all or substantially all of the Company's assets or reorganization involving the Common Stock (collectively, a "CAPITAL REORGANIZATION") (other than a merger, consolidation, sale of assets, recapitalization, subdivision, combination, reclassification, exchange or substitution of shares provided for elsewhere in this Section 7), as part of such Capital Reorganization, subject to Section 6, provision shall be made so that the Holder of this Note will thereafter be entitled to receive upon conversion of this Note the number of shares of stock or other securities or property of the Company to which a holder of the number of shares of Common Stock deliverable upon conversion would have been entitled on such Capital 9 Reorganization, subject to adjustment in respect to such stock, securities or other property by the terms thereof. In any such case, appropriate adjustment will be made in the application of the provisions of this Section 7 with respect to the rights of the Holder of this Note after the Capital Reorganization to the end that the provisions of this Section 7 (including adjustment of the Conversion Price then in effect and the number of shares issuable upon conversion of this Note) will be applicable after that event and be as nearly equivalent as practicable to the conversion rights of the Holder of this Note prior to such Capital Reorganization. In the event that the Company is not the surviving entity of any such Capital Reorganization, this Note shall become a Note of such surviving entity, with the holder of such Note having the same powers, rights and preferences as provided herein. The adjustment provided in this Section 7(d)(vi) shall not impact the rights of the Holder of this Note set forth in Section 8. (vii) NO IMPAIRMENT. The Company will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Section 7 and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the Holder of this Note against impairment to the extent required hereunder. Nothing in this Section 7 shall affect the continued accrual of interest on this Note in accordance with the terms of this Note. (viii) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 7, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Holder of this Note a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment are based and shall file a copy of such certificate with its corporate records. The Company shall, upon the reasonable written request of the Holder of this Note, furnish or cause to be furnished to the Holder a similar certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Price then in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which then would be received upon the conversion of this Note. Despite such adjustment or readjustment, the form of this Note, if the same shall reflect the initial or any subsequent Conversion Price, need not be changed in order for the adjustments or readjustments to be valid in accordance with the provisions of this Note, which shall control. (ix) NOTICE OF RECORD DATE. In the event: (A) that the Company declares a dividend (or any other distribution) on its Common Stock payable in Common Stock or other securities of the Company; (B) that the Company subdivides or combines its outstanding shares of Common Stock; 10 (C) of any reclassification of the Common Stock of the Company (other than a subdivision or combination of its outstanding shares of Common Stock or a stock dividend or stock distribution thereon); (D) of any Capital Reorganization; or (E) of the involuntary or voluntary dissolution, liquidation or winding up of the Company; THEN the Company shall cause to be filed at its principal office, and shall cause to be mailed to the Holder of this Note at their last addresses as shown on the records of the Company, at least ten (10) days prior to the record date specified in (A) below or twenty (20) days prior to the date specified in (B) below, a notice stating (A) the record date of such dividend, distribution, subdivision or combination, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution, subdivision or combination are to be determined, or (B) the date on which such reclassification, Capital Reorganization, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, Capital Reorganization, dissolution or winding up. (x) ISSUE OF SECURITIES DEEMED ISSUE OF ADDITIONAL SHARES OF COMMON STOCK. If the Company at any time or from time to time after the Issue Date issues (other than pursuant to the Transaction Documents) any Options or Convertible Securities or Rights to Acquire Common Stock, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options, Rights to Acquire Common Stock or, in the case of Convertible Securities, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue; PROVIDED, HOWEVER, that in any such case: (A) No further adjustment in the Conversion Price shall be made upon the subsequent issue of shares of Common Stock upon the exercise of such Options, Rights or conversion or exchange of such Convertible Securities; (B) Upon the expiration or termination of any unexercised Option, Right or Convertible Security issued or granted after the Issue Date, the Conversion Price shall be adjusted immediately to reflect the applicable Conversion Price which would have been in effect had such Option, Right or Convertible Security (to the extent outstanding immediately prior to such expiration or termination) never been issued; and (C) In the event of any change in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any Option, Right or Convertible Security, including, but not limited to, a change resulting from the provisions thereof, the 11 Conversion Price then in effect shall forthwith be readjusted to such Conversion Price as would have been obtained had the Conversion Price adjustment that was originally made upon the issuance of such Option, Right or Convertible Security which were not exercised or converted prior to such change been made upon the basis of such change, but no further adjustment shall be made for the actual issuance of Common Stock upon the exercise or conversion of any such Option, Right or Convertible Security. 8. REPURCHASE RIGHT UPON A CHANGE OF CONTROL. (a) In the event that a Change of Control shall occur at any time after the first (1st) anniversary of the Issue Date, then each Holder shall have the right for ninety (90) days after delivery of the Company Notice (the "REPURCHASE RIGHT"), at the Holder's option to require the Company to repurchase, and upon the exercise of such right the Company shall repurchase this Note in its entirety, or any portion of the principal amount hereof requested by the Holder that is equal to $10,000 or any integral multiple thereof. The date of such repurchase (the "REPURCHASE DATE") shall be thirty (30) days after the date the Company Notice (as defined in Section 8(b)) is required to be delivered. The repurchase price in the event of such Change of Control shall be equal to the Redemption Price. (i) "CHANGE OF CONTROL" means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or Group of shares representing a majority of the voting securities of the Company; (b) any transaction or series of related transactions (including without limitation, any reorganization, merger or consolidation) such that the outstanding shares of the Common Stock (or securities which are convertible into or exchangeable for Common Stock) are exchanged for or converted into securities which represent less than a majority of the voting securities of the surviving entity; (c) any transaction or series of related transactions (including without limitation, any reorganization, merger or consolidation) such that the Company's shareholders immediately prior to such transaction or series of transactions own less than a majority of the voting securities of the surviving entity; (d) the sale, lease, transfer, conveyance or other disposition, in one or a series of related transactions, of all or substantially all of the Company's assets; or (e) the occupation of a majority of the seats (other than vacant seats) on the board of directors of the Company by Persons who were neither (i) nominated by the board of directors of the Company nor (ii) appointed by directors so nominated. (ii) "CONVERSION VALUE" of this Note as of a particular date means the value that the Holder would be entitled to receive upon (a) conversion of this Note at the Conversion Price in effect as of such date, followed by (b) the subsequent sale of the Conversion Shares received thereby at the greater of the last Closing Price per Share of Common Stock immediately prior to the time (A) of the closing of a repurchase of this Note or (B) of the event triggering the right to repurchase. (iii) "CLOSING PRICE PER SHARE OF COMMON STOCK" means the price of one share of Common Stock determined as follows: 12 (A) If the Common Stock is approved for trading on the Nasdaq National Market System or the Nasdaq Small-Cap Market, the last reported "BID" price thereon on the date of valuation; (B) If clause (A) above does not apply and the Common Stock is listed on New York Stock Exchange or the American Stock Exchange, the closing bid price on such exchange on the date of valuation; (C) If neither clause (A) nor clause (B) above applies but the Common Stock is quoted in the over-the-counter market, another recognized exchange, on the pink sheets or bulletin board, (I) the last sales price on the date of valuation or, if there is no such sales price, (II) the mean between the last reported "BID" and "ASKED" prices thereof on the date of valuation; and (D) If neither clause (A), (B) or (C) above applies, the market value as determined by a nationally recognized investment banking firm or other nationally recognized financial advisor retained by the Company and reasonably acceptable to the Holder for such purpose, taking into consideration, among other factors, the earnings history, book value and prospects for the Company, and the prices at which shares of Common Stock recently have been traded. Such determination shall be conclusive and binding on all persons. (iv) "REDEMPTION PRICE" of this Note as of a particular date means the greater of (A) the Conversion Value or (B) the sum of (i) the Face Amount of this Note as of such date, (ii) accrued but unpaid interest hereon as of such date, and (iii) unpaid delay or default amounts thereon as of such date. (b) Not later than three (3) days prior to the date of a Change of Control after the first anniversary of the Issue Date, the Company shall give to the Holder of this Note notice (the "COMPANY NOTICE"), of the Change of Control and of the Repurchase Right set forth herein arising as a result thereof. Each notice of a Repurchase Right shall be mailed to the Holder of this Note at their last address as shown on the records of the Company and shall state: (i) the Repurchase Date; (ii) the date by which the Repurchase Right must exercised; (iii) the Redemption Price; (iv) a description of the procedure which the Holder must follow to exercise a Repurchase Right, and the place or places where this Note is to be surrendered for payment of the Redemption Price; (v) that on the Repurchase Date the Redemption Price will become due and payable upon this Note, and that interest thereon shall cease to accrue on and after said date; 13 (vi) the Conversion Price then in effect, the date on which the right to convert the principal amount of this Note to be repurchased will terminate and the place where this Note may be surrendered for conversion; and (vii) the place or places that this Note shall be delivered upon exercise of a Repurchase Right. No failure of the Company to give the foregoing notices or defect therein shall limit the Holder's right to exercise a Repurchase Right or affect the validity of the proceedings for the repurchase of this Note. If any of the foregoing provisions or other provisions of this Section 8 are inconsistent with applicable law, such law shall govern. (c) To otherwise exercise a Repurchase Right, the Holder shall deliver to the Company on or before the fifteenth (15th) day after the date of the Company Notice written notice of the Holder's exercise of such right, which notice shall set forth the name of the Holder, the Face Amount, interest and unpaid delay or default amounts of this Note, and a statement that an election to exercise the Repurchase Right is being made thereby. Such written notice shall be irrevocable, except that the right of the Holder to convert this Note shall continue until midnight (Eastern Time) on the business day immediately preceding the Repurchase Date. (d) In the event a Repurchase Right shall be exercised in accordance with the terms hereof, the Company shall pay or cause to be paid to the Holder of this Note the Redemption Price, in cash within three (3) trading days after the Repurchase Date. (e) If this Note (or any portion thereof) surrendered for repurchase shall not be so paid on the Repurchase Date, the Redemption Price, shall, until paid, bear interest to the extent permitted by applicable law from the Repurchase Date at the rate of seventeen percent (17.0%) per annum, and this Note shall remain convertible into Common Stock until the principal of this Note (or portion thereof, as the case may be) shall have been paid or duly provided for. (f) When this Note is repurchased only in part it shall be surrendered to the Company and the Company shall execute and make available for delivery to the Holder of this Note without service charge, a new Note, containing identical terms and conditions, each in an authorized denomination in aggregate principal amount equal to and in exchange for the unrepurchased portion of the principal of the Note so surrendered. 9. EVENTS OF DEFAULT. (a) DEFINITION. For purposes of this Note, an "EVENT OF DEFAULT" shall be deemed to have occurred if: (i) the Company fails to pay when due the principal of or premium, if any, or interest on this Note when due at its stated maturity, upon required repurchase, upon declaration or acceleration or otherwise; 14 (ii) (a) the Company or any of its Subsidiaries makes an assignment for the benefit of creditors, (B) an order, judgment or decree is entered adjudicating the Company or any of its Subsidiaries bankrupt or insolvent, (C) any order for relief with respect to the Company or any of its Subsidiaries is entered under the Bankruptcy Reform Act, Title 11 of the United States Code, (D) the Company or any of its Subsidiaries petitions or applies to any tribunal for the appointment of a custodian, trustee, receiver or liquidator of the Company or any of its Subsidiaries or of any substantial part of the assets of the Company or any of its Subsidiaries, or commences any proceeding relating to the Company or any of its Subsidiaries under any bankruptcy reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, or (E) any such petition or application is filed, or any such proceeding is commenced, against the Company or any of its Subsidiaries and either (1) the Company or any of its Subsidiaries by any act indicates its approval thereof, consent thereto or acquiescence therein or (2) such petition, application or proceeding is not dismissed within forty-five (45) days; (iii) the Company or any of its Subsidiaries defaults under any Indebtedness for money borrowed by the Company or any of its Subsidiaries (or the payment of which is guaranteed by the Company or any of its Subsidiaries), beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created, the aggregate outstanding principal amount of which exceeds $1,000,000, other than indebtedness owed to the Company or any of its Subsidiary, whether such indebtedness or guarantee now exists, or is created after the date hereof; (iv) the Company fails to comply with its obligations under Section 7 or Section 8 of this Note; or (v) the Company fails to comply with any of the covenants set forth in Sections 4(c), 4(d), 4(e)(i), 4(h) and 4(i) hereof. (b) CONSEQUENCES OF EVENTS OF DEFAULT. (i) If an Event of Default has occurred pursuant to Sections 9(a)(i) or (iv) of this Note, then the Holder of the Note may declare all or any portion of the outstanding principal amount of and accrued but unpaid interest and unpaid delay or default amounts on the Note due and payable and demand immediate payment of the Redemption Price as of the date of such Event of Default. If an Event of Default specified in Section 9(a)(ii) occurs, this Note shall automatically and immediately become due and payable at the Redemption Price as of the date of such Event of Default. (ii) If an Event of Default has occurred pursuant to Sections 9(a)(iii) or (v) of this Note, then (in addition to the other remedies available) the Holder may declare, by written notice to the Company, all or any portion of this Note due and payable at the applicable Redemption Price. (iii) During the continuance of an Event of Default, the interest on this Note shall accrue at a rate of seventeen percent (17.0%) per annum (based on a year of 365 days) 15 on the Face Amount, plus any accrued but unpaid interest and unpaid delay or default amounts hereon. (iv) Subject to the other provisions of this Note, each Holder of any portion of this Note shall also have, upon the occurrence and continuance of an Event of Default, any other rights which such Holder may have pursuant to applicable law or contract. 10. AMENDMENT AND WAIVER. Except as otherwise expressly provided herein, the provisions of this Note may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder. 11. PLACE OF PAYMENT. Payments of principal and interest and all notices and other communications to the Investor hereunder or with respect hereto are to be delivered to the Investor at the address identified on the signature page of the Investor Rights Agreement or to such other address or to the attention of such other person as specified by prior written notice to the Company, including any transferee of this Note. 12. COSTS OF COLLECTION. In the event that the Company fails to pay when due (including, without limitation upon acceleration in connection with an Event of Default) the full amount of principal and/or interest hereunder, the Company shall indemnify and hold harmless the Holder of any portion of this Note from and against all reasonable costs and expenses incurred in connection with the enforcement of this provision or collection of such principal and interest, including, without limitation, reasonable attorneys' fees and expenses. 13. WAIVERS. The Company hereby waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note. 14. BENEFITS OF THE INVESTOR RIGHTS AGREEMENT. The Investor and all transferees (to the extent permitted in the Investor Rights Agreement) shall be entitled to the rights and benefits granted to them in the Investor Rights Agreement. 15. REGISTRATION OF TRANSFER AND EXCHANGE GENERALLY. (a) REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE GENERALLY. The Company shall keep at its principal executive offices a register (the register maintained in such being herein sometimes collectively referred to as the "NOTE REGISTER") in which the Company shall provide for the registration of this Note and of transfers and exchanges of this Note. Subject to the provisions of the Investor Rights Agreement regarding restrictions on transfer and provided the transferee agrees to be bound by the terms of the Investor Rights Agreement, upon surrender for registration of transfer of this Note at its principal executive office, the Company shall execute and deliver, in the name of the designated transferee or transferees, one or more new Notes in denominations of not less than $1,000,000 each (provided that if necessary to enable the registration by the Holder of this entire Note, one Note may be in a denomination of less than $1,000,000) or integral multiples thereof, of a like aggregate principal amount and bearing such restrictive legends as may be required by law. 16 At the option of a Holder, this Note may be exchanged for one or more other Notes of any authorized denominations, of a like aggregate principal amount and bearing such restrictive legends as may be required by law upon surrender of this Note at the Company's principal executive offices. Whenever this Note is so surrendered for exchange, the Company shall execute and make available for delivery the Note which the Holder is entitled to receive upon such exchange. Any Note issued upon any registration of transfer or exchange of this Note shall be the valid obligation of the Company, evidencing the same debt, and entitled to the same benefits as the Note surrendered upon such registration of transfer or exchange. If this Note is presented or surrendered for registration of transfer or for exchange it shall (if so required by the Company) be duly endorsed, or be accompanied by a written instrument of transfer, in form satisfactory to the Company, duly executed by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of this Note. (b) MUTILATED, DESTROYED, LOST AND STOLEN NOTE. If this Note becomes mutilated and is surrendered to the Company, the Company shall execute and make available for delivery in exchange therefor a new Note of like tenor and principal amount and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company (i) evidence to its reasonable satisfaction of the destruction, loss or theft of this Note and (ii) such security or indemnity as may be required by the Company to save itself harmless, then, in the absence of notice to the Company that this Note has been acquired by a protected purchaser, the Company shall execute and make available for delivery, in lieu of such destroyed, lost or stolen Note, a new Note of like tenor and principal amount and bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Note, pay the amount required to be paid hereunder with respect to this Note, subject to the Holders' conversion rights pursuant to Section 7 hereof. Every new Note issued pursuant to this Section in lieu of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Note shall be at any time enforceable by anyone. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Note. 16. GOVERNING LAW. THIS NOTE AND THE RIGHTS AND DUTIES OF THE COMPANY AND THE HOLDER HEREOF SHALL BE GOVERNED BY, CONSTRUED IN AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED ENTIRELY WITHIN THAT STATE. THE COMPANY AND THE HOLDER HEREBY SUBMIT TO THE 17 EXCLUSIVE PERSONAL JURISDICTION AND WAIVE ANY OBJECTION AS TO VENUE IN EITHER (I) THE STATE OF DELAWARE OR (II) THE COUNTY OF SAN FRANCISCO, STATE OF CALIFORNIA. THE COMPANY AND THE HOLDER WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS NOTE. 17. TRANSFEREES. (a) The provisions hereof shall inure to the benefit of, to be binding upon and be enforceable by, any Transferee. (b) Notwithstanding anything to the contrary in this Note, any Transfer permitted or required by this Note shall be in compliance with federal and state securities laws, including without limitation the Securities Act. Notwithstanding anything to the contrary in this Note, the Holder agrees (and, by its acceptance of this Note, each Transferee will be deemed to agree) that prior to the earlier of the expiration of the applicable holding period under Rule 144(a) of the Securities Act or registration of the Conversion Shares, that without the Company's consent, it shall not Transfer this Note to any Person that that is not an Affiliate of such Holder or an Institutional Investor. An "Institutional Investor" shall be defined as a "qualified institutional buyer" (as such term is defined under Rule 144A promulgated under the Securities Act or any successor law, rule or regulation) or "accredited investor" (as such term is defined under Regulation D promulgated under the Securities Act, or any successor law, rule or regulation). 18. OTHER DEFINITIONS. The following terms as used in this Note shall have the following meanings: (a) "Affiliate" means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person, for so long as such Person remains so associated to the specified Person; PROVIDED that beneficial ownership of 5% or more of voting interests of a Person shall be deemed "control". (b) "beneficial owner" or "beneficially own" has the meaning given such term in Rule 13d-3 under the Exchange Act and a Person's beneficial ownership of Common Stock or other voting stock of the Company shall be calculated in accordance with the provisions of such Rule; PROVIDED, HOWEVER, that for purposes of determining beneficial ownership, (i) a Person shall be deemed to be the beneficial owner of any security which may be acquired by such Person whether within 60 days or thereafter, upon the conversion, exchange or exercise of any warrants, options, rights or other securities and (ii) no Person shall be deemed to beneficially own any security solely as a result of such Person's execution hereof. (c) "Board of Directors" means the board of directors of the Company. (d) "business day" means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in San Francisco, California. 18 (e) "Capital Stock" means, with respect to any Person at any time, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of capital stock, partnership interests (whether general or limited) or equivalent ownership interests in or issued by such Person, and with respect to the Company includes, without limitation, any and all shares of Common Stock and Preferred Stock. (f) "Common Stock" means the Company's common stock, par value $0.001 per share, and any securities issued in respect thereof, or in substitution therefore, in connection with any stock split, dividend or combination, or any reclassification, recapitalizations, merger, consolidation, exchange or other similar reorganization. (g) "Company" means TRIANGLE PHARMACEUTICALS, Inc., together with its successors by merger or otherwise. (h) "Conversion Shares" means the shares of Common Stock issuable upon the conversion of this Note. (i) "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. (j) "Encumbrance" means any security interest, pledge, mortgage, Lien (statutory or other), charge, option to purchase, lease or otherwise acquire any interest or any claim, restriction, covenant, title defect, hypothecation, assignment, deposit arrangement or other encumbrance of any kind or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement). (k) "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. (l) "Fiscal Year" means the fiscal year of the Company ending on December 31 of each year. (m) "GAAP" means generally accepted accounting principles in the United States of America as in effect from time to time, including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board. (n) "Group" shall have the meaning assigned to it in Section 13(d)(3) of the Exchange Act. (o) "Holder" means any noteholder and any other holder of this Note (including any direct or indirect Transferees of a noteholder) entitled to the rights, and bound by the obligations, under this Note. (p) "HSR Act" means the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended. 19 (q) "Incur" means issue, create, assume, guarantee, incur or otherwise become liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) will be deemed to be incurred by such Subsidiary at the time it becomes a Subsidiary; and the terms "Incurred" and "Incurrence" have meanings correlative to the foregoing. (r) "Indebtedness" means, with respect to any Person on any date of determination (without duplication) (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (including, without limitation, reimbursement and all other obligations with respect to surety bonds, letters of credit and bankers' acceptances, whether or not matured, but not including obligations to trade creditors incurred in the ordinary course of business), (ii) all obligations evidenced by notes, bonds, debentures or similar instruments, (iii) all indebtedness created or arising under any conditional sale or other title retention agreements with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (iv) all capital lease obligations, (v) all guaranteed indebtedness, (vi) all Indebtedness referred to in clause (i), (ii), (iii), (iv) or (v) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness (but only to the extent of the fair market value of such property in the case of such indebtedness that has not been assumed by such Person) and (vii) all liabilities under Title IV of the Employee Retirement Income Security Act of 1974 (or any successor legislation thereto), as amended from time to time and any regulations promulgated thereunder. (s) "Investor Rights Agreement" means the Investor Rights Agreement, dated as of December 9, 2002, between the Company and the Investor. (t) "Issue Date" shall mean December 9, 2002, the date of the issuance of this Note. (u) "Lien" means any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, lien, charge, claim, security interest, easement or encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement perfecting a security interest as to assets owned by the relevant Person under the Uniform Commercial Code or comparable law of any jurisdiction). (v) "Note Documents" means the Investor Rights Agreement, this Note and any other document, instrument or agreement entered into between Company and the Holders in connection with this foregoing, all as amended or extended from time to time. (w) "Officer" means the Chairman of the Board of Directors, the President, any Vice President, the Treasurer, the Corporate Controller or the Secretary of the Company. 20 (x) "Officers' Certificate" means a certificate signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company. (y) "Permitted Indebtedness" means, with respect to the Company, (i) taxes or assessments or other governmental charges or levies, either not yet due and payable or to the extent that nonpayment thereof is permitted by the terms hereof; (ii) obligations under workmen's compensation, unemployment insurance, social security or public liability laws or similar legislation; (iii) bids, tenders, contracts (other than contracts for the payment of money) or leases to which the Company or any of its Subsidiaries is a party as lessee made in the ordinary course of business; (iv) Indebtedness as set forth in any documents filed under the Exchange Act; and (v) Indebtedness that is subordinated and junior in right of payment to this Note. (z) "Person" means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivisions thereof or any Group comprised of two or more of the foregoing. (aa) "Permits" means all material licenses, permits, orders, consents, approvals, registrations, authorizations, qualifications and filings with and under all federal, state, local or foreign laws and governmental authorities and all industry or other non-governmental self-regulatory organizations. (bb) "Preferred Stock" means, with respect to the Company, any Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over the Common Stock. (cc) "SEC" means the U.S. Securities and Exchange Commission or any other federal agency then administering the Securities Act or the Exchange Act and other federal securities laws. (dd) "Securities Act" means the Securities Act of 1933, as amended. (ee) "Subsidiary" of any Person means any corporation, association, partnership, joint venture, limited liability company or other business entry of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership and joint venture interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (1) such Person, (2) such Person and one or more Subsidiaries of such Person or (3) one or more Subsidiaries of such Person. Unless otherwise specified herein, each reference to a Subsidiary will refer to a Subsidiary of the Company. (ff) "Transaction Documents" means the Investor Rights Agreement, this Note, the Merger Agreement and any other document, instrument or agreement entered into between Company and the Holder in connection with this foregoing, all as amended or extended from time to time. 21 (gg) "Transfer" means, directly or indirectly, to sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, this Note. (hh) "Transferee" means any Person to whom any Holder or any Transferee thereof Transfers this Note of the Company in accordance with the terms hereof. The words "hereof", "herein" and "hereunder" and words of similar import when used in this Note shall refer to this Note as a whole and not to any particular provision of this Note, and Section references are to this Note unless otherwise specified. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 19. DELAYS OR OMISSIONS. It is agreed that no delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, Default or noncompliance by another party under the Note Documents, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, Default or noncompliance, or any acquiescence therein, or of or in any similar breach, Default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character on the Holders' part of any breach, Default or noncompliance under the Note Documents or any waiver on such party's part of any provisions or conditions of the Note Documents, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under the Note Documents, by law, or otherwise afforded to any party, shall be cumulative and not alternative. 20. SURVIVAL. The warranties, representations and covenants of the Company and the Purchaser contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing, and shall continue as long as this Note is outstanding or issuable. 21. SUBORDINATION. The indebtedness evidenced by this Note is hereby expressly subordinated in right and time of payment to the prior payment in full of the Company's indebtedness to Abbott Laboratories pursuant to the letter agreement dated July 30, 2002, including any renewals or extensions thereof (the "SENIOR INDEBTEDNESS"). If an event of default has occurred with respect to the Senior Indebtedness, permitting the Holder thereof to accelerate the maturity thereof, then unless and until such event of default shall have been cured or waived or shall have ceased to exist, or the Senior Indebtedness shall have been paid in full, no payment shall be made in respect of the principal of or interest on this Note. Nothing contained in the preceding paragraphs shall impair, as between the Company and the Holder, the obligation of the Company, which is absolute and unconditional, to pay to the Holder hereof the principal hereof and interest hereon as and when the same shall become due and payable, or shall prevent the Holder, upon default hereunder, from exercising all rights, powers and remedies otherwise provided herein or by applicable law, all subject to the rights, if any, of the holders of Senior Indebtedness under the preceding paragraphs to amounts otherwise 22 payable or deliverable to the Holder pursuant to this Note. 22. NASDAQ LIMITATION ON CONVERSION OF SHARES. Notwithstanding anything to the contrary contained herein, until the requisite vote under the rule and regulation of the Nasdaq Stock Market (the "Requisite Vote") is obtained, the number of shares of Common Stock that may be acquired by the Holder upon conversion of this Note pursuant to the terms hereof shall not exceed the number of shares which the Holder shall, in the aggregate, be entitled to convert without violating the rules and regulations of the Nasdaq Stock Market. This Section 22 shall terminate and be of no further force and effect when the Requisite Vote is obtained. 23 IN WITNESS WHEREOF, the parties hereto have executed and delivered, this NOTE on December 9, 2002. COMPANY: TRIANGLE PHARMACEUTICALS, INC. By: /s/ DANIEL G. WELCH ------------------------------------------------- Name: Daniel G. Welch Title: Chairman and Chief Executive Officer INVESTOR: GILEAD SCIENCES, INC. By: /s/ JOHN C. MARTIN -------------------------------------------------- Name: John C. Martin Title: Chief Executive Officer

EXHIBIT 1 (TO BE EXECUTED BY REGISTERED HOLDER IN ORDER TO CONVERT NOTE) CONVERSION NOTICE FOR 7.50% CONVERTIBLE PROMISSORY NOTE DUE 2007 The undersigned, as Holder of the 7.50% Convertible Promissory Note Due 2007 of TRIANGLE PHARMACEUTICALS, INC. (the "COMPANY"), in the outstanding principal amount of U.S. $50,000,000 (the "Note"), hereby elects to convert that portion of the outstanding principal amount of the Note shown on the next page into shares of Common Stock, $.0001 par value per share (the "COMMON STOCK"), of the Company according to the conditions of the Note, as of the date written below. The undersigned hereby requests that share certificates for the Common Stock to be issued to the undersigned pursuant to this Conversion Notice be issued in the name of, and delivered to, the undersigned or its designee as indicated below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any. Conversion Information: NAME OF HOLDER: -------------------------------------------- By: ---------------------------------------------------------- Print Name: Print Title: Print Address of Holder: ---------------------------------------------------------- ---------------------------------------------------------- Issue Common Stock to: ------------------------------------ at: -------------------------------------------------------- Electronically transmit and credit Common Stock to: at: ---------- -------------------------------------------- ---------------------------------------------------------- Date of Conversion ---------------------------------------------------------- Applicable Conversion Price

THE COMPUTATION OF THE NUMBER OF COMMON SHARES TO BE RECEIVED IS SET FORTH ON THE ATTACHED PAGE Page 2 to Conversion Notice for: ------------------------------------------------ (NAME OF HOLDER) COMPUTATION OF NUMBER OF COMMON SHARES TO BE RECEIVED A. Face Amount converted: $ ----------------- B. Accrued, unpaid interest on Face Amount converted: $ ----------------- C. Delay or default amounts due Holder on Face Amount converted: $ ----------------- TOTAL DOLLAR AMOUNT CONVERTED (TOTAL OF A + B + C) $ ----------------- ================= Conversion Price $ ----------------- Number of Shares of Common Stock = Total Dollar Amount Converted = $ ----------------------------- ----------------- Conversion Price $ ----------------- Number of shares of Common Stock = ---------------------------------------- If the conversion is not being settled by DTC, please issue and deliver _____ certificate(s) for shares of Common Stock in the following amount(s): - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Please issue and deliver _____ new Note(s) in the following amounts: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------

EX-99.(D)(6) 16 a2096276zex-99_d6.txt EXHIBIT 99(D)(6) EXHIBIT (d)(6) TRIANGLE PHARMACEUTICALS, INC. INVESTOR RIGHTS AGREEMENT THIS INVESTOR RIGHTS AGREEMENT (the "RIGHTS AGREEMENT") is entered into as of the 9th day of December, 2002, by and among TRIANGLE PHARMACEUTICALS, INC., a Delaware corporation (the "COMPANY") and GILEAD SCIENCES, INC., a Delaware corporation (the "PURCHASER"). RECITALS WHEREAS, the Company will issue to the Purchaser a Convertible Note (as defined below) which is convertible into Common Stock of the Company; and WHEREAS, in order to induce the Purchaser to purchase the Note, the Company has agreed to provide the registration rights set forth in this Rights Agreement for the benefit of the Purchaser. NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants and conditions set forth in this Rights Agreement and the Note, the parties mutually agree as follows: SECTION 1. GENERAL. 1.1 DEFINITIONS. As used in this Rights Agreement the following terms shall have the following respective meanings: "APPROVED MARKET" means the New York Stock Exchange, the American Stock Exchange, the Nasdaq National Market or the Nasdaq Small Cap Market. "COMMON STOCK" means the Company's Common Stock, $0.001 par value. "CONVERSION SHARES" means the shares of the Company's Common Stock issuable upon conversion of the Convertible Note. "CONVERTIBLE NOTE CLOSING DATE" means the date of the closing of the sale of the Convertible Note. "CONVERTIBLE NOTE" means the Company's 7.50% Convertible Promissory Note. "DERIVATIVE TRANSACTIONS" shall mean derivative, hedging or similar transactions. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "FILING DATE" shall have the meaning set forth in Section 2.2(a). "FORM S-3" means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC which 1 permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC. "HOLDER" means any person owning of record any shares of the Registrable Securities that have not been sold to the public or any assignee of record of such Registrable Securities in accordance with Section 2.9 hereof. "PURCHASER" means the Purchaser and its transferees and assigns. "PURCHASER SECURITIES" means the Registrable Securities and the Convertible Note. "REGISTER," "REGISTERED," and "REGISTRATION" refer to a registration (including a shelf registration) effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or documents. "REGISTRABLE SECURITIES" shall mean (i) the Conversion Shares, (ii) securities issued or issuable upon any stock split, stock dividend, recapitalization or similar event with respect to the foregoing, and (iii) other securities issued as a dividend or other distribution with respect to, in exchange for or in replacement of the securities referred to in the preceding clauses. Notwithstanding the foregoing, Registrable Securities shall not include any securities (i) sold by a person to the public either pursuant to a registration statement or Rule 144, (ii) sold in a private transaction in which the transferor's rights under Section 2 of this Rights Agreement are not assigned or (iii) held by a Holder whose registration rights have terminated or expired under Section 2.6 hereof. "REGISTRATION EXPENSES" shall mean all expenses (other than Selling Expenses) incurred by the Company in complying with Section 2.2 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, reasonable fees and disbursements not to exceed Thirty Thousand Dollars ($30,000) of a single special counsel for the Holders of Registrable Securities, blue sky fees and expenses and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company). "REGISTRATION STATEMENT" shall have the meaning set forth in Section 2.2. "SEC" or "COMMISSION" means the Securities and Exchange Commission. "SECURITIES ACT" shall mean the Securities Act of 1933, as amended. "SELLING EXPENSES" shall mean all (i) underwriting discounts and selling commissions applicable to the sale of Registrable Securities, (ii) stock transfer taxes and (iii) the costs, fees and expenses of any accountants, attorneys (other than the reasonable fees and disbursements of a single special counsel for the Holders (not to exceed $15,000) which are Registration Expenses) or other expert retained by the Holders. "TRANSACTION DOCUMENTS" means the Convertible Note and this Rights Agreement. 2 SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER. 2.1 RESTRICTIONS ON TRANSFER. (a) Each Holder agrees not to make any disposition of all or any portion of the Registrable Securities unless and until: (i) There is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or (ii) The disposition is made under Rule 144 under the Securities Act or its equivalent; or (iii) (A) The transferee has agreed in writing to be bound by the terms of this Rights Agreement, (B) such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition, and (C) if reasonably requested by the Company upon the written advice of counsel to the Company, such Holder shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration under the Securities Act. (iv) Notwithstanding the provisions of paragraphs (i), (ii) and (iii) above, no such registration statement or opinion of counsel shall be necessary for a transfer by a Holder which is (A) a partnership to its partners or former partners in accordance with partnership interests, (B) a corporation to its shareholders in accordance with their interest in the corporation, or to a wholly-owned subsidiary or an affiliate of such corporation (the term "AFFILIATE" being defined herein as any other person or entity directly or indirectly controlling, controlled by or under common control with such person or entity, with "CONTROL" meaning the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities or voting interests, by contract or otherwise), (C) a limited liability company to its members or former members in accordance with their interest in the limited liability company, or (D) to such Holder's family member or trust for the benefit of an individual Holder, provided any such transferee will be subject to the terms of this Rights Agreement to the same extent as if he were an original Holder hereunder. (b) Each certificate representing Registrable Securities shall (unless the Registration Statement (as defined below) has been declared effective by the SEC at the time issuance thereof) be stamped or otherwise imprinted with legends substantially similar to the following (in addition to any legend required under applicable state securities laws): THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE 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. 3 (c) The Company agrees to reissue certificates for Registrable Securities without the legend set forth above (A) upon the effectiveness of the Registration Statement or (B) within three (3) trading days of receipt of a written request from the Purchaser, which request shall include such information as is reasonably necessary for the Company and its counsel to determine that such Registrable Securities (i) have been sold to a purchaser or purchasers who (in the opinion of counsel to the seller or such purchaser(s), in form and substance reasonably satisfactory to the Company and its counsel) are able to dispose of such shares publicly without registration under the Securities Act, (ii) have been sold pursuant to an effective registration statement, (iii) may be sold pursuant to Rule 144(k), or (iv) have been sold in compliance with Rule 144. (d) Any legend endorsed on an instrument pursuant to applicable state securities laws and the stop-transfer instructions with respect to such securities shall be removed upon receipt by the Company of an order of the appropriate blue sky authority authorizing such removal. (e) Holder agrees to only dispose of the Registrable Securities pursuant to the Registration Statement (as defined below) or an exemption from applicable securities law registration requirements, and otherwise in compliance with any other applicable rule, regulation or law. (f) Subject to compliance with applicable law, nothing in this Rights Agreement will restrict any Holder from engaging in Derivative Transactions with respect to the Purchaser Securities. Furthermore, nothing herein shall limit the right of any Holder to pledge the Purchaser Securities pursuant to a bona fide margin account or lending arrangement entered into in compliance with law, including applicable securities laws. 2.2 REQUIRED REGISTRATION. The Company shall use its best efforts to effect the registration of the Registrable Securities (including without limitation the execution of an undertaking to file post-effective amendments, appropriate qualification under applicable Blue Sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act) as would permit or facilitate the sale or distribution of all the Registrable Securities in the manner (including manner of sale) reasonably requested by a Holder and in all U.S. jurisdictions. Such best efforts by the Company shall include the following: (a) The Company shall, as expeditiously as reasonably possible after the first date upon which the Convertible Promissory Note is convertible under its terms: (i) But in any event within fifteen (15) days thereafter (the "FILING DATE"), prepare and file a shelf registration statement with the Commission on Form S-3 under the Securities Act (or in the event that the Company is ineligible to use such form, such other form as the Company is eligible to use under the Securities Act) covering the sale from time to time by each Holder of any Registrable Securities (such registration statement, including any amendments or supplements thereto and prospectuses contained therein, and any additional registration statement(s) as may be necessary to permit the disposition of all Registrable Securities, is referred to herein as the "REGISTRATION STATEMENT"), which Registration Statement, to the extent allowable under the Securities Act and the rules promulgated thereunder (including 4 Rule 416), shall also cover such number of additional shares of Common Stock as may become issuable to prevent dilution resulting from stock splits, stock dividends or similar events. The number of shares of Common Stock initially included in the initial Registration Statement shall not exceed the number of shares allowed under Rule 415; PROVIDED that such number of shares of Common Stock shall be not less than the number of shares of Common Stock into which the Convertible Note and any interest that may accrue during the term thereof may be converted. Thereafter, the Company shall use its best efforts to cause such Registration Statement to be declared effective as soon as practicable. The Company shall provide each Holder and its legal counsel reasonable opportunity, but not less than three (3) full business days, to review the Registration Statement or amendment or supplement thereto prior to filing. Without limiting the foregoing, the Company will promptly respond to all SEC comments, inquiries and requests and shall provide each Holder with copies of all correspondence in connection therewith, and shall request acceleration of effectiveness at the earliest practicable date. (ii) Prepare and file with the SEC such amendments and supplements to such Registration Statement and the prospectus used in connection with such Registration Statement, or prepare and file such additional registration statements, as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities and promptly notify each Holder of the filing and effectiveness of such Registration Statement and any amendments or supplements or additional registration statements. (iii) After the registration, furnish to each Holder such numbers of copies of a current prospectus conforming with the requirements of the Securities Act, copies of the Registration Statement, any amendment or supplement thereto and any documents incorporated by reference therein and such other documents as such Holder may reasonably require in order to facilitate the disposition of Registrable Securities owned by such Holder. (iv) Use its best efforts to register and qualify the securities covered by such Registration Statement under such other securities or Blue Sky laws of all U.S. jurisdictions; PROVIDED that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions. (v) Notify each Holder immediately of the happening of any event as a result of which the prospectus (including any supplements thereto or thereof and any information incorporated or deemed to be incorporated by reference therein) included in such Registration Statement, as then in effect, includes an untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and use its best efforts to promptly update and/or correct such prospectus. (vi) Notify each Holder immediately of the issuance by the SEC or any state securities commission or agency of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose. The Company shall use its best efforts to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible time. 5 (vii) Use its best efforts to list the Registrable Securities covered by such Registration Statement with all securities exchange(s) and/or markets on which the Common Stock is then listed and prepare and file any required filings with the National Association of Securities Dealers, Inc. or any exchange or market where the Common Stock is then traded. (viii) If applicable, take all steps necessary to enable each Holder to avail itself of the prospectus delivery mechanism set forth in Rule 153 (or successor thereto) under the Securities Act. (b) The Company shall supplement or amend the Registration Statement or cause the related prospectus to be amended or supplemented if required under the Securities Act or by the rules, regulations or instructions applicable to the registration form used for such Registration Statement or with respect to updated information about the Purchaser of Registrable Securities, use its best efforts to cause any such amendment to become effective and such Registration Statement or related prospectus to become usable as soon as practicable thereafter and promptly furnish to each Holder of Registrable Securities included in the Registration Statement copies of any such supplement or amendment. (c) Holder of Registrable Securities agrees, by acquisition of such Registrable Securities that, upon actual receipt of any notice from the Company pursuant to Section 2.2(a)(v) or Section 2.5(e), such Holder will immediately discontinue any sales of such Registrable Securities (a "SUSPENSION") until such Holder's receipt of an amended Registration Statement, supplemented or amended prospectus thereunder, or until it is advised in writing by the Company that the use of the applicable Registration Statement may be resumed. Notwithstanding the foregoing, such Holder shall not be prohibited from selling Registrable Securities under the Registration Statement as a result of Suspensions on more than two (2) occasions in any twelve (12) month period, each such Suspension lasting no longer than the lesser of (a) sixty (60) days and (b) the period commencing on the first day of such Suspension and ending on the day on which a shareholder of the Company other than such Holder has the ability to sell securities of the Company under an effective Registration Statement on Form S-3), unless, in the good faith judgment of the Company's Board of Directors, upon written advice of counsel to the Company, the sale of Registrable Securities under the Registration Statement in reliance on this paragraph would be reasonably likely to cause a violation of the Securities Act or the Exchange Act and result in potential liability to the Company. 2.3 VOLUME LIMITATIONS ON TRANSFERS. The Holder expressly covenants and agrees not to offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of (such event, a "Transfer"), directly or indirectly, a number of Registrable Securities greater than three percent (3%) of the outstanding shares of Company common stock per calendar quarter, measured as of the first day of such calendar quarter; provided however, that, subject to compliance with applicable securities laws, such Holder shall be permitted to Transfer, in one or more private transactions, a "block" (as such term is defined in Rule 10b-18(a) of the Exchange Act) of Registrable Securities without violating the provisions of this Section 2.3. 6 2.4 EXPENSES OF REGISTRATION. All Registration Expenses incurred in connection with the Registration Statement herein shall be borne by the Company. All Selling Expenses incurred in connection with the Registration Statement shall be borne by the Holders pro rata on the basis of the number of shares sold. 2.5 OBLIGATIONS OF THE COMPANY. Without limiting the requirements of Section 2.2, the Company shall: (a) Keep the Registration Statement effective for up two (2) years or, if earlier, (i) until each Holder has completed the distribution related thereto, or (ii) the date on which the Registrable Securities may be resold by each Holder without restriction by the volume limitations of Rule 144(e) under the Securities Act. (b) 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. (c) Furnish to each Holder such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities being registered by them. (d) Register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by such Holder. (e) Notify each Holder covered by the Registration Statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and promptly file, and use its best efforts to cause to become effective, an amendment to such registration statement to cause the Registration Statement not to include an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. 2.6 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted under this Section 2 shall terminate and be of no further force and effect seven (7) years after the Convertible Note Closing Date. Notwithstanding the foregoing, each Holder's registration rights shall expire if (i) all Registrable Securities held by and issuable to such Holder may be sold under Rule 144(k) under the Securities Act. 2.7 FURNISHING INFORMATION. It shall be a condition precedent to the obligations of the Company to take any action pursuant to Section 2.2 that a Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended 7 method of disposition of such securities as shall be required to effect the registration of Registrable Securities. 2.8 INDEMNIFICATION. (a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, officers, affiliates, directors and legal counsel of such Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act (each, a "HOLDER INDEMNIFIED PERSON"), against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a "VIOLATION") by the Company: (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law in connection with the offering covered by the Registration Statement; and the Company will reimburse (as and when incurred from time to time) each Holder Indemnified Person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action or enforcing the provisions of this Section 2.8; PROVIDED, HOWEVER, that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder Indemnified Person. (b) To the extent permitted by law, each Holder will, indemnify and hold harmless the Company, each of its directors, its officers, affiliates and legal counsel and each person, if any, who controls the Company within the meaning of the Securities Act, and any underwriter (each, a "COMPANY INDEMNIFIED PERSON" and, together with the Holder Indemnified Persons, "INDEMNIFIED PARTY") against any losses, claims, damages or liabilities to which the Company or any such director, officer, affiliate, controlling person or underwriter may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder under an instrument duly executed by such Holder and stated to be specifically for use in connection with the Registration Statement; and the Purchaser will reimburse (as and when incurred from time to time) any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person or underwriter in connection with investigating or defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the indemnity agreement 8 contained in this Section 2.8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of such Holder, which consent shall not be unreasonably withheld; PROVIDED FURTHER, that in no event shall any indemnity under this Section 2.8 exceed the net proceeds from the offering received by such Holder. (c) Promptly after receipt by an Indemnified Party under this Section 2.8 of notice of the commencement of any action (including any governmental action), such Indemnified Party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; PROVIDED, HOWEVER, that an Indemnified Party shall have the right to retain its own counsel, with the reasonable fees and expenses to be paid by the indemnifying party, if the Indemnified Party determines that representation of such Indemnified Party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Party and any other party represented by such counsel in such proceeding or if the counsel retained by the indemnifying party fails to assume the representation of the Indemnified Party. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, shall not relieve such indemnifying party of any liability to the Indemnified Party under this Section 2.8, except to the extent that the indemnifying party is materially prejudiced by such delay, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any Indemnified Party otherwise than under this Section 2.8. (d) If the indemnification provided for in this Section 2.8 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such Indemnified Party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the Indemnified Party on the other in connection with the Violation(s) that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the Indemnified Party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the Indemnified Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; PROVIDED, that in no event shall any contribution by a Holder hereunder exceed the proceeds from the offering received by such Holder. 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. (e) The obligations of the Company and each Holder under this Section 2.8 shall survive completion of any offering of Registrable Securities in the Registration Statement. No indemnifying party, in the defense of any such claim or litigation, shall, except with the 9 consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. 2.9 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned by the Purchaser to any transferee or assignee of Registrable Securities which (i) is a person or entity which holds Registrable Securities, as the case may be, pursuant to a transfer permitted by Section 2.1, or (ii) acquires at least one million (1,000,000) shares of Registrable Securities (as adjusted for stock splits and combinations). 2.10 RULE 144 REPORTING. With a view to making available to the Purchaser the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its best efforts to: (a) Make and keep public information available, as those terms are understood and defined in SEC Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of the first registration filed by the Company for an offering of its securities to the general public; (b) File with the SEC, in a timely manner, all reports and other documents required of the Company under the Exchange Act; and (c) So long as Purchaser owns any Registrable Securities, furnish to the Purchaser forthwith upon request: a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 of the Securities Act, and of the Exchange Act (at any time after it has become subject to such reporting requirements); a copy of the most recent annual or quarterly report of the Company; and such other reports and documents as a Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any such securities without registration. SECTION 3. MISCELLANEOUS. 3.1 GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL. THIS RIGHTS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED ENTIRELY WITHIN THAT STATE. EACH OF THE PARTIES HEREBY SUBMITS TO THE EXCLUSIVE PERSONAL JURISDICTION AND WAIVE ANY OBJECTION AS TO VENUE IN EITHER (I) THE STATE OF DELAWARE OR (II) THE COUNTY OF SAN FRANCISCO, STATE OF CALIFORNIA. THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS RIGHTS AGREEMENT. 3.2 SURVIVAL. The representations, warranties, covenants, and agreements made herein shall survive any investigation made by the Purchaser and the closing of the transactions contemplated hereby. All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of the Company pursuant hereto in connection with the 10 transactions contemplated hereby shall be deemed to be representations and warranties by the Company hereunder solely as of the date of such certificate or instrument. 3.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto and shall inure to the benefit of and be enforceable by each person who shall be a holder of Registrable Securities from time to time; PROVIDED, HOWEVER, that prior to the receipt by the Company of adequate written notice of the transfer of any Registrable Securities specifying the full name and address of the transferee, the Company may deem and treat the person listed as the holder of such shares in its records as the absolute owner and holder of such shares for all purposes, including the payment of dividends or any redemption price. 3.4 ENTIRE AGREEMENT. The Transaction Documents constitute the full and entire understanding and agreement between the parties with regard to the subject matter hereof. 3.5 SEVERABILITY. In case any provision of this Rights Agreement shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 3.6 AMENDMENT AND WAIVER. Except as specifically set forth below, any provision of this Rights Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Purchaser. 3.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to exercise any right, power, or remedy accruing to the Purchaser, upon any breach, default or noncompliance of the Company under this Rights Agreement shall impair any such right, power, or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent, or approval of any kind or character on the Purchaser's part of any breach, default or noncompliance under this Rights Agreement or any waiver on Purchaser's part of any provisions or conditions of this Rights Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Rights Agreement, by law, or otherwise afforded to the Purchaser, shall be cumulative and not alternative. 3.8 NOTICES. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt, or (v) if earlier, upon receipt. All communications shall be sent to the party to be notified at the address as set forth on the signature page hereto or at such other address as such party may designate by ten (10) days advance written notice to the other parties hereto. 11 3.9 ATTORNEYS' FEES. In the event that any dispute among the parties to this Rights Agreement should result in litigation, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Rights Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals. 3.10 TITLES AND SUBTITLES. The titles of the sections and subsections of this Rights Agreement are for convenience of reference only and are not to be considered in construing this Rights Agreement. 3.11 COUNTERPARTS. This Rights 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. 12 IN WITNESS WHEREOF, the parties hereto have executed this INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof. COMPANY: PURCHASER: TRIANGLE PHARMACEUTICALS, INC. GILEAD SCIENCES, INC. By: /s/ DANIEL G. WELCH By: /s/ JOHN C. MARTIN ----------------------------------- ----------------------------------- Name: Daniel G. Welch Name: John C. Martin Title: Chairman and CEO Title: Chief Executive Officer Address/Telephone/Facsimile: Address/Telephone/Facsimile: 4 University Place 333 Lakeside Drive 4611 University Place Foster City, CA 94404 Durham, NC 27707 Tel: (650) 574-3000 Fax: (650) 578-9264 Tel: (919) 493-5980 Fax: (919) 493-5925

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