November 13, 1998
Forum Capital Markets LLC
00 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Mr. X. Xxxxx Xxxxxxx
Pecks Management Partners Ltd.
000 Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Mr. Xxxxxx Xxxxx
Dear Sirs:
This letter sets forth our agreement in respect of the purchase by Forum
Capital Markets, LLC ("Forum") and Pecks Management Partners Ltd. ("Pecks";
Forum and Pecks collectively, the "Lender") of the loan made by Silicon Valley
Bank to Hybridon, Inc. ("Hybridon") pursuant to the Loan and Security Agreement
dated December 31, 1996, as amended (the "Loan"). The terms of the purchase of
the Loan are as follows:
1. The Lender will purchase the Loan as soon as practicable.
2. The Lender will lend an additional amount to Hybridon as soon as
practicable so that the outstanding principal amount of the Loan is
increased to $6,000,000.
3. The terms of the Loan will be amended as follows:
(a) Maturity: November 30, 2003.
(b) Interest Rate: 8% for the term of the Loan.
(c) Amortization: Interest is payable monthly in arrears; the
principal is due in full at maturity of the Loan.
(d) Conversion: The Loan will be convertible, at the Lender's option,
in whole or in part, into shares of common stock, par value $.001
per share, of Hybridon ("Common Stock") at a rate equal to the
mid-point between the bid and ask price on the date of closing of
the purchase of the Loan.
(e) Covenants: The threshold of the Minimum Liquidity covenant will
be reduced from $4,000,000 to $2,000,000.
Forum Capital Markets, LLC
Pecks Management Partners, Ltd.
November 13, 1998
Page 2
(f) Prepayment: The Loan may not be prepaid, in whole or in part, at
any time prior to December 1, 2000.
4. The other terms of the Loan will remain unchanged.
5. Forum will receive a fee of $400,000, which will be reinvested by Forum
by purchasing from Hybridon either (a) shares of Hybridon stock (either
Common Stock or Preferred Stock) and accompanying warrants on the same
terms as are sold to investors in Hybridon's next equity offering to
occur after the date of this letter (the "Placement Price") or (b) if no
equity offering is consummated prior to May 1, 1999, 160,000 shares of
Hybridon Common Stock and warrants to purchase an additional 40,000
shares of Hybridon Stock at $3.00 per share. In addition, Forum will
receive warrants exercisable until maturity of the Loan to purchase
$400,000 of shares of Common Stock priced at the Placement Price, or if
no equity offering is consummated prior to May 1, 1999, at $3.00 per
share. These shares and warrants will be issued as soon as practicable
following satisfaction of Section 4.10 of the Indenture dated as of
March 26, 1997, governing Hybridon's 9% Convertible Subordinated Notes
due 2004.
If this letter correctly sets forth our agreement, please so acknowledge
by signing in the space indicated below and returning a copy of this letter to
the undersigned by telecopier. Counterparts are, of course, acceptable.
Very truly yours,
HYBRIDON, INC.
By: /s/ X. X. Xxxxxxxxx XXX
-----------------------------------
Name: X. Xxxxxxx Xxxxxxxxx III
Title: President, CEO and Chairman
AGREED AND ACCEPTED AGREED AND ACCEPTED
as of November 16, 1998: as of November 16, 1998:
FORUM CAPITAL MARKETS, LLC PECKS MANAGEMENT PARTNERS
LTD.
By: /s/ X. Xxxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------------ ---------------------------
Name: X. Xxxxx Xxxxxxx Name: Xxxxxx X. Xxxxx
Title: Senior Managing Partner Title: Chairman
