Amendment No. 1
to Consulting Agreement
The Consulting Agreement dated as of October 12, 2000 (the "Agreement")
between Ascent Pediatrics, Inc. and Xxxxxx X. Xxxxxxx is hereby amended as
follows as of the 12th day of July, 2001. Capitalized terms used herein and not
otherwise defined herein shall have the meanings set forth in the Agreement.
1. Section 2 "Term" is hereby deleted and the following is hereby
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substituted in lieu thereof:
"2. Term. This Agreement shall be deemed to have commenced effective
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as of April 1, 2000 and, subject to earlier termination in accordance with the
provisions of Section 4, shall continue until April 1, 2002 (such period, as it
may be extended, being referred to as the "Consultation Period"); provided that
the Consultation Period shall automatically be extended for additional six-month
periods unless either party shall provide written notice to the other at least
30 days prior to such expiration of its or his desire to terminate this
Agreement upon its expiration."
2. Section 4 "Termination" is hereby deleted and the following is
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hereby substituted in lieu thereof:
"4. Termination.
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4.1 General. The Company may, without prejudice to any right or
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remedy it may have due to any failure of the Consultant to perform his
obligations under this Agreement, terminate the Consultation Period upon 30
days' prior written notice to the Consultant. In the event of such termination,
the Consultant shall be entitled to (i) payment for services performed and
expenses paid or incurred prior to the effective date of termination and (ii) if
applicable, the Payment Amount (as defined below). Such payments shall
constitute full settlement of any and all claims of the Consultant of every
description against the Company. Notwithstanding the foregoing, the Company may
terminate the Consultation Period, effective immediately upon receipt of written
notice, if the Consultant breaches or threatens to breach any provision of
Section 6.
4.2 Company Sale Payment. If the date of the consummation of a
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Company Sale (the "Company Sale Date") occurs during the Consultation Period,
then upon the consummation of the Company Sale (as defined below), the Company
will pay the Consultant Two Hundred and Twenty Five Thousand Dollars ($225,000)
(the "Payment Amount"). Notwithstanding the foregoing, if the Consultation
Period was terminated less than 12 months prior to the Company Sale Date by the
Company without Cause (as defined in Section 4.4(a)), including without
limitation termination by the Company pursuant to Section 2, the Company shall
pay to the Consultant, upon the consummation of a Company Sale, the Payment
Amount, unless during the period between the date of termination of the
Consultation Period and the Company Sale Date the Consultant has breached the
terms of any agreement between the Consultant and the Company, including without
limitation this Agreement or any other employment, non-competition or
confidentiality agreement entered into between the Company and the Consultant.
4.3 Form of Payment. The Company shall pay the Payment Amount to
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the Consultant in cash; provided that if the consideration paid to the Company
or the stockholders of the Company, as the case may be, by the acquiring party
consists in whole or in part of securities or other property of such party (or
an affiliate of such party) (it being understood that the Company currently
intends to seek to cause the acquiring party to pay cash), the Company may
elect, in its sole discretion, to pay the Payment Amount to the Consultant in
whole or in part through the issuance to the Consultant of such securities or
other property, such securities or other property being valued in the manner
determined in good faith by the Board of Directors of the Company.
4.4 Definitions.
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(a) "Cause" shall mean (i) conviction of any felony or any
crime involving moral turpitude or dishonesty; (ii) participation in a fraud or
act of dishonesty against the Company; (iii) willful and material breach of the
Company's policies; (iv) intentional and material damage to the Company's
property; or (v) material breach of the obligations or duties of the Consultant
under any agreement between the Consultant and the Company, including without
limitation this Agreement or any other employment, non-competition or
confidentiality agreement entered into between the Company and the Consultant.
(b) "Company Sale" shall mean:
(i) the sale of all or substantially all of the assets
of the Company to another corporation or entity, or the merger, consolidation or
reorganization of the Company into or with another corporation or entity, with
the result that, upon conclusion of the transaction, the voting securities of
the Company immediately prior thereto do not represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the voting securities of
the acquiring entity or the continuing or surviving entity of such
consolidation, merger or reorganization; or
(ii) the acquisition after the date hereof by an
individual, entity or group (within the meaning of Section 13(d)(3) or Section
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) (a "Person") of beneficial ownership of any capital stock of the Company
if, after such acquisition, such Person beneficially owns (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) 50% or more of either (x) the
then-outstanding Depositary Shares of the Company (the "Outstanding Depositary
Shares") or (y) the combined voting power of the then-outstanding securities of
the Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that the following
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acquisitions shall not constitute a Company Sale: (A) any acquisition directly
from the Company (excluding an acquisition pursuant to the exercise, conversion
or exchange of any security exercisable for, convertible into or exchangeable
for Depositary Shares or voting securities of the Company, unless the Person
exercising, converting or exchanging such security acquired such security
directly from the Company or an underwriter or agent of the Company), (B) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, (C) any
acquisition by any corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportion as their ownership of the
Outstanding Depositary Shares or the Outstanding Company Voting Securities, or
(D) any acquisition in one or more related transactions of less than 2% of the
Outstanding Depositary Shares or the Outstanding Company Voting Securities."
3. Section 14 "Effect of Termination" is hereby deleted and the
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following is hereby substituted in lieu thereof:
"14. Effect of Termination. The following sections of this Agreement
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shall survive the termination of this Agreement: Section 4 (Termination),
Section 6 (Inventions and Proprietary Information), Section 7 (Independent
Contractor Status), Section 8 (Notices), Section 12 (Governing Law), Section 13
(Successors and Assigns), and Section 14 (Effect of Termination)."
4. In all other respects, the Agreement shall remain in full force and
effect, and all references in the Agreement to this "Agreement" shall mean the
Agreement as amended hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year set forth above.
ASCENT PEDIATRICS, INC.
By: __/s/ Xxxxxx Xxxxxxxx, Ph. D.
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Xxxxxx Xxxxxxxx, Ph. D.
Title: President
CONSULTANT
By: __/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
