Page 106 of 117 Pages
EXHIBIT E
---------
WAIVER, CONSENT AND AMENDMENT AGREEMENT
THIS WAIVER, CONSENT AND AMENDMENT AGREEMENT ("Agreement") is made as of
May 30, 1997, by and between Ascent Pediatrics, Inc. (the "Company"), Triumph-
Connecticut Limited Partnership (the "Principal Purchaser"), and the other
purchasers listed on the signature pages hereto (the "Other Purchasers").
WHEREAS, pursuant to a Securities Purchase Agreement dated as of January
31, 1997 (the "Purchase Agreement") among the Company, the Principal Purchaser
and certain of the Other Purchasers (i) the Company issued and sold to the
Principal Purchaser and certain of the Other Purchasers at the First Closing (as
such term is defined in the Purchase Agreement) $2,000,000 aggregate principal
amount of the Company's Subordinated Secured Notes due December 31, 2002 and
Series A Warrants to purchase in the aggregate 264,036 shares of the Company's
Common Stock; and (ii) the Company agreed to issue and sell to the Principal
Purchaser and certain of the Other Purchasers, and the Principal Purchaser and
certain of the Other Purchasers agreed to purchase from the Company, at the
Second Closing (as such term is defined in the Purchase Agreement) an additional
$5,000,000 aggregate principal amount of the Company's Subordinated Secured
Notes due December 31, 2002, additional Series A Warrants to purchase in the
aggregate 396,054 shares of the Company's Common Stock, and Series B Warrants to
purchase in the aggregate 256,702 shares of the Company's Common Stock; and
WHEREAS, pursuant to a Waiver and Amendment dated as of March 13, 1997
among the Company, the Principal Purchaser and certain of the Other Purchasers,
the parties to the Purchase Agreement agreed to waive Section 3.1(l)(ii) of the
Purchase Agreement and to modify Section 3.1(q) of the Purchase Agreement to
provide for the Second Closing to occur after or contemporaneous with either (i)
the receipt by the Company of the Primsol Solution FDA Approval (as such term is
defined in the Purchase Agreement), or (ii) the closing of a Qualified Public
Offering (as such term is defined in the Purchase Agreement); and
WHEREAS, pursuant to an Assignment, Assumption and Consent Agreement dated
as of April 29, 1997 among the Principal Purchaser, Xxxxxxx X. Lick (the "New
Purchaser") and the Company, the Principal Purchaser sold and assigned to the
New Purchaser, and the New Purchaser purchased and assumed from the Principal
Purchaser, a 0.33898305% interest in and to all rights and interests of the
Principal Purchaser under the Purchase Agreement, and the New Purchaser became
one of the "Purchasers" as such term is defined in the Purchase Agreement; and
WHEREAS, the Company has informed the Purchasers that it intends to
consummate a Qualified Public Offering on or about June 4, 1997, and in
connection with such Qualified Public Offering, on May 27, 1997 the Company
amended its Charter Documents to effectuate a 0.85-for-one reverse split of the
Company's Common Stock; and
Page 107 of 117 Pages
WHEREAS, Subsection 2.2 of the Purchase Agreement provides for the Company
to give the Purchasers thirty (30) days prior written notice of the proposed
Second Closing; and
WHEREAS, Subsection 3.1(o) of the Purchase Agreement provides as a
condition to the Second Closing that the Company's Charter Documents (as such
term is defined in the Purchase Agreement) shall not have been modified or
amended since the date of execution of the Purchase Agreement; and
WHEREAS, there exists a potential conflict in the notice requirements of
Subsections 6.5 and 6.8 of the Purchase Agreement.
NOW THEREFORE, in contemplation of the Second Closing, for good and
valuable consideration, the Company and the Purchasers hereby expressly agree to
the following waivers, consents and modifications to the Purchase Agreement:
1. The Purchasers hereby consent to the amendment of the Company's
Charter Documents to effectuate the 0.85-for-one reverse split of the Company's
Common Stock, and waive Subsection 3.1(o) of the Purchase Agreement to the
extent that such Subsection prohibits such an amendment of the Company's Charter
Documents prior to the Second Closing.
2. The Purchasers hereby waive the provision in Subsection 2.2 of the
Purchase Agreement that requires the Company to give the Purchasers thirty (30)
days prior written notice of the proposed Second Closing, and subject to the
satisfaction by the Company of all conditions precedent set forth in Subsections
3.1 and 3.2 of the Purchase Agreement, the Company and the Purchasers agree that
the Second Closing shall take place on June 4, 1997, immediately following the
consummation of the Qualified Public Offering.
3. The Company and the Purchasers hereby agree that Subsection 6.5 of
the Purchase Agreement be, and it hereby is, amended to replace Subsection 6.5
in its entirety with the following new Subsection 6.5:
" 6.5. Optional Redemption. The Company may at any time and
-------------------
from time to time redeem the then outstanding principal amount of the
Notes, in whole or in part (provided that any partial redemption shall be
in an aggregate principal amount of at least $500,000 or integral
multiples of $500,000 in excess thereof, and shall be allocated among all
of the Notes outstanding, pro rata, in the same proportion as the
outstanding principal amount of each Note bears to the aggregate
outstanding principal amount of all Notes), at a redemption price equal to
100% of the principal amount of Notes to be redeemed, by giving written
notice of redemption to all holders of the Notes not less than 30 days and
not more than 60 days prior to the Redemption Date, specifying (i) the
aggregate principal amount of all Notes to be redeemed, (ii) the principal
amount of Notes held by each holder to be redeemed, (iii) the Redemption
Date, and (iv) the accrued and unpaid interest (as of the Redemption Date)
applicable to the Notes to be
2
Page 108 of 117 Pages
redeemed. Notice of redemption having been so given, the aggregate
principal amount of Notes so specified in such notice and all accrued and
unpaid interest to the Redemption Date applicable to the Notes to be
redeemed, shall become due and payable on the Redemption Date; provided
--------
that upon receipt of any such written notice of redemption, each holder of
Notes shall have 20 days to elect to exercise its rights under Subsection
6.8 of this Agreement to convert into shares of Common Stock all or a
portion of the principal amount of Notes held by such holder that are the
subject of the Company's proposed redemption. To the extent any holder of
Notes shall elect to exercise its rights under Subsection 6.8 within such
20 day period to convert into Common Stock all or any portion of the
principal amount of Notes held by such holder that are the subject of the
Company's proposed redemption, that portion of the principal amount of
Notes which such holder has elected to convert shall not be subject to the
Company's proposed redemption. To the extent any holder of Notes does not
elect to exercise its rights under Subsection 6.8 within such 20 day
period to convert into shares of Common Stock any of the Notes held by
such holder that are the subject of the Company's proposed redemption,
such holder shall be deemed to have waived its rights under Subsection 6.8
to convert into shares of Common Stock those Notes held by such holder
that are the subject of the Company's proposed redemption. No redemption
of the Notes pursuant to this Subsection 6.5 shall relieve the Company
from its obligation under Subsection 2.2 of this Agreement to issue and
sell to the Purchasers the Notes and Warrants to be issued and sold to the
Purchasers at the Second Closing. In connection with any such redemption
(or, if applicable, conversion), the holders of Notes shall deliver the
Notes to the Company, and, in connection with holders whose Notes are
redeemed (or, if applicable, converted) only in part, the Company (at the
Company's expense) shall execute, authenticate and deliver to such holders
new Notes equal in principal amount to the unredeemed (and unconverted)
portion of the Notes surrendered."
4. The Company and the Purchasers hereby agree that Subsection 6.8 of
the Purchase Agreement be, and it hereby is, amended to replace paragraphs (a)
and (b) of Subsection 6.8 with the following new paragraphs (a) and (b):
"(a) Subject to the provisions of Subsections 6.5 and 6.7(b)
of this Agreement, if there occurs a Qualified Public Offering, each
holder of Notes shall have the right, at any time and from time to
time until the date which is two years after the Qualified Public
Offering Date, to cause the Company to convert the Notes held by such
holder, in whole or in part, into such number of shares of Common
Stock as shall equal the quotient of (i) the aggregate principal
amount of the Notes tendered for conversion divided by (ii) the
Initial Qualified Public Offering Price. Any partial conversion of
any holder's Notes shall be in a principal amount of not less than
the lesser of 25% of the principal amount of each such holder's Notes
or $250,000.
3
Page 109 of 117 Pages
(b) Subject to the provisions of Subsections 6.5 and 6.7(b)
of this Agreement, each holder of Notes electing to have all or any
portion of its Notes converted into Common Stock pursuant to this
Subsection 6.8 will be required to deliver to the Company, at its
principal office, at least thirty (30) days prior to the date of
conversion, a written notice of conversion specifying (i) the
principal amount of Notes such holder elects to have converted, (ii)
the name or names in which such holder desires the certificate or
certificates for Common Stock to be issued, and (iii) the address to
which such holder desires delivery to be made of such new
certificates for Common Stock to be issued upon such conversion. On
the date of conversion, the Company shall issue and deliver to such
holder or its designee, by hand delivery, by courier or by first
class mail (postage prepaid), at the address designated by such
holder, certificates for the number of shares of Common Stock to
which such holder shall be entitled as a result of the conversion of
its Notes, and upon receipt by the such holder of such certificates
for shares of Common Stock, such holder shall deliver such Notes to
the Company for cancellation. In connection with any holder whose
Notes are converted into Common Stock only in part, the Company shall
execute, authenticate and deliver to such holder new Notes equal in
principal amount to the unconverted portion of the Notes surrendered.
The issuance of certificates for Common Stock upon conversion of
Notes shall be made without charge to the holders of the Notes for
any issuance tax in respect thereof or other costs incurred by the
Company in connection with such conversion and the related issuance
of such Common Stock."
5. The Company and the Purchasers agree that in accordance with the
terms of the Series A Warrants and the Series B Warrants, effective as of May
27, 1997, the numbers of shares of Common Stock purchasable upon the exercise of
the Series A Warrants and the Series B Warrants, and the purchase prices for
such shares shall be deemed adjusted to give effect to the 0.85-for-one reverse
split of the Company's Common Stock as follows: (i) the aggregate number of
shares of Common Stock purchasable upon exercise of all Series A Warrants issued
at the First Closing shall be adjusted from 264,036 shares of pre-split Common
Stock to 224,429 shares of post-split Common Stock; (ii) the aggregate number of
shares of Common Stock purchasable upon exercise of all Series A Warrants to be
issued at the Second Closing shall be adjusted from 396,054 shares of pre-split
Common Stock to 336,644 shares of post-split Common Stock; (iii) the aggregate
number of shares of Common Stock purchasable upon exercise of all Series B
Warrants to be issued at the Second Closing shall be adjusted from 256,702
shares of pre-split Common Stock to 218,195 shares of post-split Common Stock;
(iv) the purchase price payable upon exercise of the Series A Warrants shall be
adjusted from $.01 per share of pre-split Common Stock to $.01 per share of
post-split Common Stock; and (v) the purchase price payable upon exercise of the
Series B Warrants shall be adjusted from $4.50 per share of pre-split Common
Stock to $5.29 per share of post-split Common Stock. Accordingly, at the Second
Closing, the Company shall issue to each Purchaser: (i) a Series A Warrant
Certificate dated the date of the Second Closing for the purchase, at an
exercise price of $.01 per
4
Page 110 of 117 Pages
share, of the number of shares of post-split Common Stock of the Company
specified opposite such Purchaser's name on the signature page hereto under the
heading "Shares of Common Stock issuable upon exercise of Series A Warrants to
be issued to Purchaser at Second Closing"; and (ii) a Series B Warrant
Certificate dated the date of the Second Closing for the purchase, at an
exercise price of $5.29 per share, of the number of shares of post-split Common
Stock of the Company specified opposite such Purchaser's name on the signature
page hereto under the heading "Shares of Common Stock issuable upon exercise of
Series B Warrants to be issued to Purchaser at Second Closing". In addition, at
the request of each Purchaser, the Company shall deliver to such Purchaser a new
post-split Series A Warrant Certificate dated the date of the First Closing for
the purchase, at an exercise price of $.01 per share, of the number of shares of
post-split Common Stock of the Company specified opposite such Purchaser's name
on the signature page hereto under the heading "Shares of Common Stock issuable
upon exercise of Series A Warrants held by Purchaser as of 5/30/97", against
delivery by such Purchaser of the original pre-split Series A Warrant
Certificate held by such Purchaser.
6. Pursuant to Subsection 6.7(a) of the Purchase Agreement, within
thirty days after the consummation of the Qualified Public Offering, the Company
must either (i) redeem all of the Notes or (ii) convert all of the Notes into
Converted Notes (as such term is defined in the Purchase Agreement). The
Company has informed the Purchasers that the Company does not intend to redeem
the Notes following the consummation of its Qualified Public Offering.
Accordingly, the Company and the Purchasers agree that: (i) in lieu of the
$5,000,000 aggregate principal amount of Notes to be issued and sold to the
Purchasers at the Second Closing, the Company shall issue and sell to the
Purchasers on the Second Closing Date $5,000,000 aggregate principal amount of
Converted Notes; and (ii) in exchange for the $2,000,000 aggregate principal
amount of Notes currently held by the Purchasers, the Company shall issue to the
Purchasers on the Second Closing Date $2,000,000 aggregate principal amount of
Converted Notes. The principal amount of Converted Notes to be issued to each
Purchaser on the Second Closing Date shall be as set forth on the signature
pages hereto, and the terms of the Converted Notes shall be as follows: (a) the
Converted Notes shall have a Stated Maturity (as such term is defined in the
Purchase Agreement) of September 2, 1999; (b) the principal of the Converted
Notes shall be due payable in eight equal quarterly installments commencing on
December 2, 1997 and continuing on the 2nd day of each March, June, September
and December thereafter with a final installment due and payable on September 2,
1999; (c) the Converted Notes shall bear interest on the unpaid principal
balance thereof from September 2, 1997 through their Stated Maturity at the
Applicable Converted Note Rate (as such term is defined in the Purchase
Agreement); and (d) interest on the unpaid principal amount of the Converted
Notes shall be payable quarterly in arrears commencing on December 2, 1997 and
continuing on the 2nd day of each March, June, September and December
thereafter, and upon any other payment of any principal amount of the Converted
Notes.
5
Page 111 of 117 Pages
7. The Company and the Purchasers hereby further agree that the term
"Registrable Shares" as defined in Section 13 of the Purchase Agreement be, and
it hereby is, amended to replace such definition in its entirety with the
following new definition:
"Registrable Shares" means (i) the shares of Common Stock
issued or issuable upon exercise or conversion of any share of the
Preferred Stock, any of the Series D Common Warrants, the Series E Common
Warrants, the Series F Common Warrants or the Warrants, (ii) the shares of
Common Stock issued or issuable upon the purchase by any holder of
Warrants pursuant to the conversion or exercise of any such holder's Pre-
emptive Right, (iii) the shares of Common Stock issued or issuable upon
the conversion by any holder of Notes of all or any portion of such
holder's Notes, and (iv) any other shares of Common Stock of the Company
issued in respect of such shares (because of stock splits, stock
dividends, reclassifications, recapitalizations, or similar events);
provided, however, that shares of Common Stock which are Registrable
-------- -------
Shares shall cease to be Registrable Shares upon any sale pursuant to a
Registration Statement, Section 4(1) of the Securities Act or Rule 144
under the Securities Act, or any sale in any manner to a person or entity
which, by virtue of Section 9 of the Series F Financing Agreement is not
entitled to the registration rights provided by Section 8 of the Series F
Financing Agreement. Wherever reference is made in this Agreement to a
request or consent of holders of a certain percentage of Registrable
Shares or certain Registrable Shares, or a certain number of Registrable
Shares or certain Registrable Shares, the determination of such percentage
or number shall include shares of Common Stock issuable upon conversion of
the Preferred Stock.
8. Except as otherwise expressly set forth herein, all of the terms and
conditions of the Purchase Agreement, the Notes, the Warrants and the Security
Documents shall remain in full force and effect.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
6
Page 112 of 117 Pages
WAIVER, CONSENT AND AMENDMENT AGREEMENT
COMPANY SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned, being duly authorized, has executed
this Agreement on behalf of the Company as of the date first above written.
ASCENT PEDIATRICS, INC.
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President, Finance
Page 113 of 117 Pages
WAIVER, CONSENT AND AMENDMENT AGREEMENT
PURCHASER SIGNATURE PAGE
Accepted and agreed as of the
date first written above:
/s/ Xxxxxxx X. Lick
----------------------------
Xxxxxxx X. Lick
Principal amount of Notes
held by Purchaser as of 5/30/97: $5,714.29
Address: c/o Triumph Capital
Group, Inc.
00 Xxxxx Xx., 00xx Xxxxx Shares of Common Stock
Xxxxxx, XX 00000 issuable upon exercise of
Series A Warrants held by
Telephone: (000) 000-0000 Purchaser as of 5/30/97: 641*
Telecopy: (000) 000-0000
Aggregate Purchase Price to be paid
by Purchaser at Second Closing: $14,285.71
Credit for Closing Fee owed to
Purchaser at Second Closing: ($285.71)
Net Purchase Price to be paid
by Purchaser at Second Closing: $14,000
Tax ID No.: ###-##-#### Principal amount of Notes to
be purchased by Purchaser at
Second Closing: $14,285.71
Shares of Common Stock
issuable upon exercise of
Series A Warrants to be issued
to Purchaser at Second Closing: 961*
Shares of Common Stock
issuable upon exercise of
Series B Warrants to be issued
to Purchaser at Second Closing: 623*
* After giving effect to 0.85-for-one stock split
Page 114 of 117 Pages
WAIVER, CONSENT AND AMENDMENT AGREEMENT
PURCHASER SIGNATURE PAGE
Accepted and agreed as of the
date first written above:
TRIUMPH-CONNECTICUT LIMITED PARTNERSHIP
BY: TRIUMPH-CONNECTICUT CAPITAL ADVISORS, L.P.,
its General Partner
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director Principal amount of Notes
held by Purchaser as of 5/30/97: $1,680,000.00
Address: c/o Triumph Capital
Group, Inc. Shares of Common Stock
00 Xxxxx Xxxxxx, 00xx Xxxxx issuable upon exercise of
Xxxxxx, XX 00000 Series A Warrants held by
Telephone: (000) 000-0000 Purchaser as of 5/30/97: 188,522*
Telecopy: (000) 000-0000
Aggregate Purchase Price to be paid
by Purchaser at Second Closing: $4,200,000.00
Credit for Closing Fee owed to
Purchaser at Second Closing: ($84,000.00)
Net Purchase Price to be paid
by Purchaser at Second Closing: $4,116,000.00
Tax ID No.: 00-0000000 Principal amount of Notes to
be purchased by Purchaser at
Second Closing: $4,200,000.00
Shares of Common Stock
issuable upon exercise of
Series A Warrants to be issued
to Purchaser at Second Closing: 282,784*
Shares of Common Stock
issuable upon exercise of
Series B Warrants to be issued
to Purchaser at Second Closing: 183,285*
* After giving effect to 0.85-for-one stock split
Page 115 of 117 Pages
WAIVER, CONSENT AND AMENDMENT AGREEMENT
PURCHASER SIGNATURE PAGE
Accepted and agreed as of the
date first written above:
/s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx
--and--
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx Principal amount of Notes
held by Purchaser as of 5/30/97: $285,714.29
Shares of Common Stock
Address: 80 Irving Place issuable upon exercise of
Xxx Xxxx, XX 00000 Series A Warrants held by
Telephone: (000) 000-0000 Purchaser as of 5/30/97: 32,061*
Telecopy: (000) 000-0000
Aggregate Purchase Price to be paid
by Purchaser at Second Closing: $714,285.71
Xxxx X. Xxxxxx'x Tax ID No.: Credit for Closing Fee owed to
###-##-#### Purchaser at Second Closing: ($ 14,285.71)
Xxxxxx X. Xxxxxx'x Tax ID No.: Net Purchase Price to be paid
###-##-#### by Purchaser at Second Closing: $700,000.00
Principal amount of Notes to
be purchased by Purchaser at
Second Closing: $714,285.71
Shares of Common Stock
issuable upon exercise of
Series A Warrants to be issued
to Purchaser at Second Closing: 48,092*
Shares of Common Stock
issuable upon exercise of
Series B Warrants to be issued
to Purchaser at Second Closing: 31,171*
* After giving effect to 0.85-for-one stock split
Page 116 of 117 Pages
WAIVER, CONSENT AND AMENDMENT AGREEMENT
PURCHASER SIGNATURE PAGE
Accepted and agreed as of the
date first written above:
Xxxxxxxxx X. Xxxxxxx XX and E. Xxxx
Xxxxxx, as Trustees of the Triumph Capital
Group, Inc. 401(k) Plan and Trust for the
account of Xxxxxx X. Xxxxx
By: /s/ Xxxxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxxxx X. Xxxxxxx XX, as Trustee
By: /s/ E. Xxxx Xxxxxx
-----------------------------------
E. Xxxx Xxxxxx, as Trustee Principal amount of Notes
held by Purchaser as of 5/30/97: $21,428.57
Address: c/o Triumph Capital
Group, Inc. Shares of Common Stock
00 Xxxxx Xxxxxx, 00xx Xxxxx issuable upon exercise of
Xxxxxx, XX 00000 Series A Warrants held by
Telephone: (000) 000-0000 Purchaser as of 5/30/97: 2,404*
Telecopy: (000) 000-0000
Aggregate Purchase Price to be paid
by Purchaser at Second Closing: $53,571.43
Credit for Closing Fee owed to
Purchaser at Second Closing: ($1,071.43)
Net Purchase Price to be paid
by Purchaser at Second Closing: $52,500.00
Principal amount of Notes to
be purchased by Purchaser at
Second Closing: $53,571.43
Shares of Common Stock
issuable upon exercise of
Series A Warrants to be issued
to Purchaser at Second Closing: 3,606*
Shares of Common Stock
issuable upon exercise of
Series B Warrants to be issued
to Purchaser at Second Closing: 2,337*
* After giving effect to 0.85-for-one stock split
Page 117 of 117 Pages
WAIVER, CONSENT AND AMENDMENT AGREEMENT
PURCHASER SIGNATURE PAGE
Accepted and agreed as of the
date first written above:
/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxx
Principal amount of Notes
held by Purchaser as of 5/30/97: $7,142.85
Address: 000 Xxxxxxx Xxxx Shares of Common Stock
Berwyn, PA 19312-2020 issuable upon exercise of
Series A Warrants held by
Telephone: (000) 000-0000 Purchaser as of 5/30/97: 801*
Telecopy: (000) 000-0000
Aggregate Purchase Price to be paid
by Purchaser at Second Closing: $17,857.15
Credit for Closing Fee owed to
Purchaser at Second Closing: ($ 357.15)
Net Purchase Price to be paid
by Purchaser at Second Closing: $17,500.00
Tax ID No. ###-##-#### Principal amount of Notes to
be purchased by Purchaser at
Second Closing: $17,857.15
Shares of Common Stock
issuable upon exercise of
Series A Warrants to be issued
to Purchaser at Second Closing: 1,201*
Shares of Common Stock
issuable upon exercise of
Series B Warrants to be issued
to Purchaser at Second Closing: 779*
* After giving effect to 0.85-for-one stock split
