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EXHIBIT 10.32
[CONFORMED COPY]
Ascent Pediatrics, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies & Gentlemen:
The purpose of this letter is to confirm our agreement and
understanding with respect to certain arrangements among FS Private Investments
LLC ("▇▇▇▇▇▇ ▇▇▇▇"), BancBoston Ventures Inc. ("BancBoston") and Ascent
Pediatrics, Inc. (together with any successor thereto, the "Company"), in
connection with a $16,000,000 investment by certain investment partnerships
managed by ▇▇▇▇▇▇ ▇▇▇▇, BancBoston and another investor in the Series G
Convertible Exchangeable Preferred Stock, Subordinated Notes and Warrants of
the Company (the "Financing").
Upon the closing of the Financing, the Company shall pay to (i) ▇▇▇▇▇▇
▇▇▇▇ a closing fee in the amount of $381,250 in cash and (ii) BancBoston a
closing fee in the amount of $118,750 in cash.
▇▇▇▇▇▇ ▇▇▇▇ agrees to provide ongoing customary financial advisory
services consistent with the fee arrangements set forth herein, at such times
and on such matters as the Company and ▇▇▇▇▇▇ ▇▇▇▇ shall mutually agree, for a
period of five (5) years commencing with the closing date of the Financing (the
"Advisory Term"). The Company shall pay to ▇▇▇▇▇▇ ▇▇▇▇ an advisory fee equal to
$150,000 for each year of the Advisory Term, payable quarterly in arrears.
The Company has all requisite corporate power and authority to enter
into this Agreement. This Agreement has been duly and validly authorized by all
necessary corporate action on the part of the Company and has duly executed and
delivered by the Company and constitutes a legal, valid and binding agreement of
the Company, enforceable in accordance with its terms. The execution, delivery
and performance by the Company of this Agreement will not result in any
violation by the Company of any provision of law.
This agreement may not be amended or modified except in writing and
shall be governed by and construed in accordance with the internal laws of the
State of New York.
For the convenience of the parties, any number of counterparts of this
agreement may be executed by the parties hereto. Each such counterpart shall be,
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and shall be deemed to be, an original instrument, but all such counterparts
taken together shall constitute one and the same Agreement.
If the foregoing correctly sets forth our agreement and understanding,
we would appreciate your signing the enclosed copy of.
Very truly yours,
FS PRIVATE INVESTMENTS LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Member
BANCBOSTON VENTURES INC.
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
AGREED AND ACCEPTED:
ASCENT PEDIATRICS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇
Title: President and CEO
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February 16, 1999
Ascent Pediatrics, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The purpose of this letter (this "Amendment") is to amend the financial
advisory services fee arrangements set forth in the letter (the "Initial
Letter") among FS Private Investments LLC ("▇▇▇▇▇▇ ▇▇▇▇"), BancBoston Ventures
Inc. ("BancBoston") and Ascent Pediatrics, Inc. (together with any successor
thereto, the "Company"), which confirmed such parties agreement and
understanding with respect to certain arrangements among such parties in
connection with the $16,000,000 investment by certain investment partnerships
managed by ▇▇▇▇▇▇ ▇▇▇▇, BancBoston and another investor (collectively, the
"Purchasers") in the Series G Convertible Exchangeable Preferred Stock,
Subordinated Notes and Warrants of the Company (the "Financing").
This Amendment shall be effective on the Second Amendment Closing Date
(as such term is defined in the Second Amendment dated February 16, 1999 to the
Securities Purchase Agreement dated May 13, 1998 by and among ▇▇▇▇▇▇ ▇▇▇▇
Investors II L.P., FS Employee Investors LLC, FS Parallel Fund L.P., BancBoston
Ventures Inc., ▇▇▇▇▇ Partners and Ascent Pediatrics, Inc., as amended (such
Securities Purchase Agreement as so and heretofore amended, the "Purchase
Agreement").
Pursuant to this Amendment, ▇▇▇▇▇▇ ▇▇▇▇ and the Company agree as
follows:
1. FEE ARRANGEMENTS. Prior to the Second Amendment
Closing Date, the financial advisory service fee arrangements shall be
as set forth in the Initial Letter. On the Second Amendment Closing
Date, in lieu of any additional cash fees required to be paid to ▇▇▇▇▇▇
▇▇▇▇ pursuant to the Initial Letter for such services, the Company
shall issue to ▇▇▇▇▇▇ ▇▇▇▇ 150,000 unregistered shares (the "Shares")
of the Company's common stock, par value $.00004 per share (the "Common
Stock"). The aggregate dollar value of the Shares is $525,000.
2. REGISTRATION RIGHTS. The Company hereby grants the
registration rights to ▇▇▇▇▇▇ ▇▇▇▇ which were granted pursuant to
Article X of the Purchase Agreement. Under such Article X, ▇▇▇▇▇▇ ▇▇▇▇
shall be deemed to be a "Holder" (as defined therein) for all purposes
and the Shares shall be deemed to be Registrable Securities (as defined
therein) for all purposes. In addition, for purposes of Section 10.3
thereof, at the election of ▇▇▇▇▇▇ ▇▇▇▇, the Shares shall also be
deemed to be either Registrable Conversion Shares or Registrable
Warrant Shares (both as defined therein). This paragraph 2 shall be an
amendment to Article X of the Purchase Agreement.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to ▇▇▇▇▇▇ ▇▇▇▇ as follows:
(i) The Company has full power and authority to execute
and deliver this Amendment and issue the Shares and
to execute and deliver such other documents furnished
or to be furnished by the Company hereunder, subject
to the approval of the stockholders of the Company of
this Amendment and the transactions contemplated
hereby. This Amendment, subject to the approval of
the stockholders of the Company of this Amendment and
the transactions contemplated hereby, has been duly
authorized, executed and delivered by the Company
and, subject to the approval of the stockholders of
the Company of this Amendment and the transactions
contemplated hereby, constitutes a legal, valid and
binding agreement of the Company, enforceable against
the Company in accordance with its terms, subject to
bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting
creditors' rights and to general principles of
equity. Subject to the approval of the stockholders
of the Company of this Amendment and the transactions
contemplated hereby, the issuance of the Shares
pursuant to this Amendment, the compliance by the
Company with the provisions of this Amendment, and
the consummation of the other transactions herein
contemplated will not result in the creation or
imposition of any lien, charge, security interest or
encumbrance upon any of the assets of the Company
pursuant to the terms or provisions of, or result in
a breach or violation of or conflict with any of the
terms or provisions of, or constitute a default
under, or give any other party a right to terminate
any of its obligations under, or result in the
acceleration of any obligation under, (i) the
Certificate of Incorporation and Bylaws of the
Company, or (ii) any contract or other agreement to
which the Company is a party or by which the Company
or any of its respective properties is bound, or
(iii) any judgment, ruling, decree, order, statute,
rule or regulation of any court or other governmental
agency or body, domestic or foreign, applicable to
the business or properties of the Company, except,
with respect to clauses (ii) and (iii), circumstances
that would not, individually or in the aggregate,
reasonably be expected to have a material adverse
effect on the Company.
(ii) Subject to the approval of the stockholders of the
Company of this Amendment and the transactions
contemplated hereby, the Shares have been duly
authorized for issuance hereby, and, when
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issued and delivered in accordance with the
provisions of this Amendment, will be validly issued,
fully paid and nonassessable.
4. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇
hereby represents and warrants to the Company that (i) it is an "accredited
investor" as that term is defined in Rule 501(a) promulgated under the
Securities Act of 1933, as amended, (ii) it has the requisite knowledge and
experience in financial and business matters to be capable of evaluating the
merits and risks of an investment in the Company, (iii) it has had an
opportunity to discuss the Company's business, management and financial affairs
with the Company's management, (iv) it is acquiring the Shares for investment
for its own account and not with a view to, or for resale in connection with,
any distribution thereof; nor with any present intention of distributing or
selling the same; and ▇▇▇▇▇▇ ▇▇▇▇ has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment providing for
the disposition thereof, (v) it is not in material breach or violation of, or in
default under, any term or provision of (A) its organizational and governing
documents, (B) any indenture, mortgage, deed of trust, voting trust agreement,
stockholders, partners or members agreement, note agreement or other agreement
or instrument to which it is a party or by which it is bound or to which any of
its property is subject, or (C) any statute, judgment, decree, order, rule or
regulation applicable to ▇▇▇▇▇▇ ▇▇▇▇ or of any arbitrator, court, regulatory
body, administrative agency or any other governmental agency or body, domestic
or foreign, having jurisdiction over ▇▇▇▇▇▇ ▇▇▇▇ or any of its activities or
properties, (vi) ▇▇▇▇▇▇ ▇▇▇▇ represents that it has not been organized,
reorganized or recapitalized specifically for the purpose of investing in the
Company, (vii) it understands that the Shares have not been registered under the
Securities Act and it will not offer, sell, transfer, pledge, hypothecate or
otherwise dispose of any Shares except pursuant to an exemption from, or
otherwise in a transaction not subject to, the registration requirements of the
Securities Act or pursuant to an effective registration statement under the
Securities Act, and, in each case, in accordance with any applicable state
securities or "blue sky" laws and (viii) it understands that any certificates
representing the Shares and any other securities issued in respect of such
securities upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall be stamped or otherwise imprinted with a
legend in the following form (in addition to any legend required under other
applicable securities laws):
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR ANY STATE SECURITIES
LAWS AND MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED."
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▇▇▇▇▇▇ ▇▇▇▇ further represents that (i) it has full power and authority to
execute, deliver and perform this Amendment, (ii) the person executing this
Amendment on behalf of ▇▇▇▇▇▇ ▇▇▇▇ has the appropriate authority to act on
behalf of ▇▇▇▇▇▇ ▇▇▇▇, and (iii) this Amendment has been duly authorized,
executed and delivered by ▇▇▇▇▇▇ ▇▇▇▇ and constitutes a legal, valid and binding
agreement of ▇▇▇▇▇▇ ▇▇▇▇, enforceable against ▇▇▇▇▇▇ ▇▇▇▇ in accordance with its
terms, subject to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to general
principles of equity, and (iv) it has not employed any broker or finder in
connection with the transactions contemplated by this Amendment. To the best of
its knowledge, ▇▇▇▇▇▇ ▇▇▇▇ acknowledges receipt of, and the opportunity to
review, the information that it believes necessary to make an investment in the
Shares."
Except as amended by this Amendment, the Initial Letter shall remain in
full force and effect in accordance with its terms. This Amendment shall be
deemed to be part of the Initial Letter.
This agreement may not be amended or modified except in writing and
shall be governed by and construed in accordance with the internal laws of the
State of New York.
For the convenience of the parties, any number of counterparts of this
agreement may be executed by the parties hereto. Each such counterpart shall be,
and shall be deemed to be, an original instrument, but all such counterparts
taken together shall constitute one and the same Amendment.
If the foregoing correctly sets forth our agreement and understanding,
we would appreciate your signing the enclosed copy of this Amendment and
returning the same to us.
Very truly yours,
FS PRIVATE INVESTMENTS LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Member
AGREED AND ACCEPTED:
ASCENT PEDIATRICS, INC.
By: /s / ▇▇▇▇. ▇. ▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇
Title: President and CEO
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ASCENT PEDIATRICS, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
May 25, 1999
Ladies and Gentleman:
The purpose of this letter is to confirm and clarify that the issuance
by Ascent Pediatrics, Inc. (the "Company") of 150,000 shares of the Company's
common stock, par value $.00004 per share, to FS Private Investments LLC
("▇▇▇▇▇▇ ▇▇▇▇") pursuant to the amendment dated as of February 16, 1999 to the
financial advisory services fee agreement dated as of May 13, 1998 (the
"Agreement") among ▇▇▇▇▇▇ ▇▇▇▇, BancBoston Ventures Inc. and the Company will be
in complete satisfaction of all financial advisory services to be provided by
▇▇▇▇▇▇ ▇▇▇▇ under the Agreement and that, following the issuance of such shares,
neither the Company nor ▇▇▇▇▇▇ ▇▇▇▇ will have any further obligations under the
Agreement.
If the foregoing correctly sets forth our agreement and understanding,
we would appreciate your signing the enclosed copy of this letter and returning
the same to us.
Very truly yours,
ASCENT PEDIATRICS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇
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▇▇▇▇ ▇. ▇▇▇, President
AGREED AND ACCEPTED:
FS PRIVATE INVESTMENTS LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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