EXHIBIT 10.3
AMENDMENT NUMBER ONE TO
DECLARATION OF REGISTRATION RIGHTS
This Amendment Number One (the "Amendment") to the Declaration of
Registration Rights, dated August 28, 1997 (the "Original Declaration"),
delivered in connection with the Reorganization Agreement (defined below) by and
among Triangle Pharmaceuticals, Inc. ("Triangle"), Project Z Corporation
("Project Z"), Avid Corporation ("Avid") and the Securityholder Agent (as such
term is defined in the Reorganization Agreement) (the "Securityholder Agent"),
is made as of this 24th day of March, 2000, on behalf and as attorney-in-fact
for all of the stockholders, optionholders and warrantholders of Avid
immediately prior to the merger of Project Z with and into Avid (the "Former
Avid Stockholders"). Capitalized terms used herein which are not defined herein
shall have the definitions ascribed to them in the Reorganization Agreement.
RECITALS
A. Triangle and, Project Z and Avid entered into an Agreement and Plan of
Reorganization dated as of June 30, 1997 (the "Original Reorganization
Agreement"), as amended (the "Reorganization Agreement") which contained the
terms of the merger of Project Z with and into Avid and after which Avid became
a wholly-owned subsidiary of Triangle, which terms included certain registration
rights covering the resale of the shares of Parent Common Stock issued in the
Merger.
B. In connection with the Original Reorganization Agreement, Triangle
delivered the Original Declaration, which described the terms and conditions of
the registration rights granted in the Original Reorganization Agreement.
C. Triangle, Avid and the Securityholder Agent, on behalf of and as
attorney-in-fact for the Former Avid Stockholders, are concurrently herewith
entering into an amendment to the Reorganization Agreement, and in connection
therewith, Triangle will issue 400,000 shares of Parent Common Stock to the
Former Avid Stockholders as a Third Payment (the "Third Payment Shares").
D. Triangle, Avid (including in its capacity as successor to Project Z)
and the Securityholder Agent desire to amend the Original Declaration to grant
registration rights in connection with the Third Payment Shares.
NOW, THEREFORE, in consideration of the foregoing and the promises and
covenants contained herein, and for other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
16. AMENDMENTS TO Declaration.
16.1 Section 1. The following definition is added to Section 1:
"h. "Third Payment Registrable Securities" means for each Holder:
(a) the number of shares of Parent Common Stock issued to such Holder in
connection with the Third Payment, excluding a number of shares reserved
(i) in
connection with Assumed Options equal to the number of shares that the
holders of the Assumed Options would have received had all of the Assumed
Options and Assumed Warrants been exercised in full immediately prior to
the Effective Time (assuming that the exercise price was paid in cash),
and (ii) in connection with the Assumed Warrants equal to the number of
shares that the holders of the Assumed Warrants would have received had
all of the Assumed Options and Assumed Warrants been exercised in full
immediately prior to the Effective Time (assuming that the exercise price
was paid in cash), and (b) for all Holders the aggregate of all Third
Payment Registrable Securities held by all such Holder in connection
therewith, excluding those shares reserved in Section 1(h)(a)(i) and
Section 1(h)(a)(ii) above, together with all other shares of Parent Common
Stock which may hereafter be issued with respect thereto as the result of
a stock split, stock dividend or otherwise.
16.2 Section 2. Section 2 of the Original Declaration is hereby
amended and restated in its entirety as follows:
"(i) If one of the conditions described in Section 1.6(b)(ii)(A) of
the Reorganization Agreement is satisfied, Parent shall use its
commercially reasonable efforts to cause the Registrable Securities held
by each Holder following the Merger to be registered under the Act so as
to permit the resale thereof, and in connection therewith shall prepare
and file a registration statement on Form S-3 with the SEC within sixty
(60) days following Parent's receipt of the written request of the
Majority Holders; provided, however, that each Holder shall at the request
of Parent provide to Parent all such information and materials with
respect to such Holder and take all such action as may be reasonably
required in order to permit Parent to comply with all applicable
requirements of the SEC with respect to such registration statement and to
obtain any desired acceleration of the effective date of such registration
statement, such provision of information and materials by each Holder to
be a condition precedent to the obligations of Parent pursuant to this
Declaration with respect to such Holder. The Majority Holders may not
request registration earlier than the second anniversary of the Closing
Date nor later than the fourth anniversary of the Closing Date. Parent
shall not be required to effect more than one (1) registration under this
Section 2(i) of this Declaration. The offering made pursuant to such
registration shall not be underwritten.
(ii) Notwithstanding the foregoing, Parent shall use its
commercially reasonable efforts to cause the Third Payment Registrable
Securities held by each Holder following the Third Payment to be
registered under the Act so as to permit the resale thereof , and in
connection therewith shall prepare and file a registration statement on
Form S-3 with the SEC on or before June 1, 2000; provided, however, that
each Holder shall at the request of Parent provide to Parent all such
information and materials with respect to such Holder and take all such
action as may be reasonably required in order to permit Parent to comply
with all applicable requirements of the SEC with respect to such
registration statement and to obtain any desired acceleration of the
effective date of such registration statement, such provision of
information and materials by each Holder to be a condition precedent to
the obligations of Parent pursuant to this Declaration with respect to
such Holder. Parent shall not be required to effect more than one (1)
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registration under this Section 2(ii) of this Declaration. The offering
made pursuant to such registration shall not be underwritten."
16.3 Section 3. Section 3 of the Original Declaration is hereby
amended and restated in its entirety as follows:
"Postponement of Registration. Notwithstanding Section 2 above,
Parent shall be entitled to postpone the declaration of effectiveness of
the registration statement prepared and filed pursuant to Section 2(i) for
up to one hundred eighty (180) calendar days and the declaration of
effectiveness of the registration statement prepared and filed pursuant to
Section 2(ii) for up to ninety (90) days, if the Board of Directors of
Parent, acting in good faith, determines that there exist business reasons
for such postponement; provided, however, that the Company may not
postpone the declaration of effectiveness of any registration statement
pursuant to this Section 3 more than once in any twelve-month period."
16.4 Section 4. Section 4 of the Original Declaration is hereby
amended and restated in its entirety as follows:
"Obligations of Parent. Subject to the limitations of Sections 3, 5
and 12, Parent shall (i) prepare and file with the SEC the registration
statements on Form S-3 in accordance with Section (2) hereof with respect
to the applicable shares of Registrable Securities and shall use
reasonable efforts to cause such registration statements to become
effective as promptly as practicable after filing and to keep such
registration statement effective for ninety (90) calendar days (which
period shall be extended by any period of time during which the Holders
are not permitted to resell their Registrable Securities under the
registration statement as a result of the provisions of Section 5 below or
a lock-up of the Registrable Securities pursuant to Section 5.1(e) of the
Reorganization Agreement); (ii) prepare and file with the SEC such
amendments and supplements to such registration statements and the
prospectuses used in connection therewith as may be necessary to comply
with the provisions of the Act with respect to the resale or other
disposition of all securities proposed to be registered in such
registration statement; (iii) furnish to each Holder such number of copies
of any prospectus (including any preliminary prospectus and any amended or
supplemented prospectus) in conformity with the requirements of the Act,
and such other documents, as each Holder may reasonably request in order
to effect the offering and resale of the shares of the Registrable
Securities to be offered and resold, but only while Parent shall be
required under the provisions hereof to cause the registration statements
to remain current; and (iv) use its commercially reasonable efforts to
register or qualify the shares of the Registrable Securities covered by
such registration statement under the securities or blue sky laws of such
jurisdictions as each Holder shall reasonably request (provided that
Parent 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 jurisdiction where it has not been qualified).
16.5 Section 5. The first sentence of Section 5 of the Original
Declaration is hereby amended and restated in its entirety as follows:
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"Selling Procedures. Any sale of Registrable Securities pursuant to
any registration statement filed in accordance with Section 2 hereof shall
be subject to the following conditions and procedures:"
17. EFFECT OF AMENDMENT.
Except as amended and set forth above, the Original Declaration shall
continue in full force and effect. In the event of any conflict between the
terms of the Original Declaration and the terms of this Amendment, the terms of
this Amendment shall govern and control. This Amendment shall become effective
when executed and delivered by Triangle, Avid and a majority of the individuals
constituting the Securityholder Agent.
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This Amendment is hereby executed as of the date first above written.
TRIANGLE: TRIANGLE PHARMACEUTICALS, INC., a
Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: President and Chief Operating Officer
AVID: AVID CORPORATION, a Pennsylvania
corporation
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
SECURITYHOLDER AGENT:
--------------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxxx
--------------------------------------------
Xxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxx
--------------------------------------------
Xxxxxx X. Xxxxx
[SIGNATURE PAGE TO AMENDMENT NUMBER ONE TO
DECLARATION OF REGISTRATION RIGHTS]
