SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 3)
ASCENT PEDIATRICS, INC.
(Name of Issuer)
Common Stock,
$.00004 PAR VALUE PER SHARE
(Title of Class of Securities)
04362X101
(CUSIP Number)
Brian P. Friedman
FS Private Investments LLC
55 East 52nd Street, 37th Floor
New York, New York 10055-0002
(212) 409-5600
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
FEBRUARY 14, 2000
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the
following box [ ]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
- -------------------------------- ----------------------------------
CUSIP No. 04362 X1 01 Page 2
- -------------------------------- ----------------------------------
- ---------- --------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
FS Private Investments LLC 13-3940694
- ---------- --------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF, OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------- --------- --------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -----------------------------------------------------------------
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER 6,050,314, which includes 1,105,263
EACH shares of Common Stock issuable upon the conversion of
REPORTING $5,250,000 aggregate principal amount of the Company's 8.0%
PERSON Convertible Subordinated Notes, 1,333,333 shares of Common
WITH Stock issuable upon conversion of $4,000,000 aggregate
principal amount of Third Amendment Notes, 600,000
shares of Common Stock issuable upon the exercise of Third
Amendment Warrants and 1,000,000 shares of Common Stock
issuable upon the exercise of Fourth Amendment Warrants.
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER 6,050,314, which includes
1,105,263 shares of Common Stock issuable upon the
conversion of $5,250,000 aggregate principal amount of the
Company's 8.0% Convertible Subordinated Notes, 1,333,333
shares of Common Stock issuable upon conversion of
$4,000,000 aggregate principal amount of Third Amendment
Notes, 600,000 shares of Common Stock issuable upon the
exercise of Third Amendment Warrants and 1,000,000 shares
of Common Stock issuable upon the exercise of Fourth
Amendment Warrants.
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,050,314
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
44.2%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------- ------------------------------------------
CUSIP No. 04362 X1 01 Page 3
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Furman Selz Investors II L.P. 13-3937561
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 5,188,196, which includes 974,316
OWNED BY shares of Common Stock issuable upon the conversion
EACH of $4,628,000 aggregate principal amount of the
REPORTING Company's 8.0% Convertible Subordinated Notes,
PERSON 1,175,407 shares of Common Stock issuable upon
WITH conversion of $3,526,222 aggregate principal
amount of Third Amendment Notes, 528,933 shares of
Common Stock issuable upon the exercise of Third
Amendment Warrants and 881,556 shares of Common Stock
issuable upon the exercise of Fourth Amendment
Warrants.
-----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER 5,188,196, which includes
974,316 shares of Common Stock issuable upon the
conversion of $4,628,000 aggregate principal
amount of the Company's 8.0% Convertible
Subordinated Notes, 1,175,407 shares of Common Stock
issuable upon conversion of $3,526,222 aggregate
principal amount of Third Amendment Notes,
528,933 shares of Common Stock issuable upon the
exercise of Third Amendment Warrants and
881,556 shares of Common Stock issuable upon the
exercise of Fourth Amendment Warrants.
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,188,196
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
39.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------- ------------------------------------------
CUSIP No. 04362 X1 01 Page 4
- -------------------------------- ------------------------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
FS Employee Investors LLC 13-3937563
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 444,741, which includes 83,579
OWNED BY shares of Common Stock issuable upon the conversion
EACH of $397,000 aggregate principal amount of the
REPORTING Company's 8.0% Convertible Subordinated Notes,
PERSON WITH 100,741 shares of Common Stock issuable upon the
conversion of $302,222 aggregate principal amount of
Third Amendment Notes, 45,333 shares of Common Stock
issuable upon the exercise of Third Amendment
Warrants and 75,555 shares of Common Stock issuable
upon the exercise of Fourth Amendment Warrants.
-----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
444,741, which includes 83,579 shares of Common
Stock issuable upon the conversion of $397,000
aggregate principal amount of the Company's 8.0%
Convertible Subordinated Notes, 100,741 shares of
Common Stock issuable upon the conversion of
$302,222 aggregate principal amount of Third
Amendment Notes, 45,333 shares of Common Stock
issuable upon the exercise of Third Amendment
Warrants and 75,555 shares of Common Stock issuable
upon the exercise of Fourth Amendment Warrants.
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
444,741
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------- ------------------------------------------
CUSIP No. 04362 X1 01 Page 5
- -------------------------------- ------------------------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
FS Parallel Fund L.P. 13-3974766
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 252,377, which includes 47,368
0WNED BY shares of Common Stock issuable upon the conversion
EACH REPORTING of $225,000 aggregate principal amount of the
PERSON WITH Company's 8.0% Convertible Subordinated Notes, 57,185
shares of Common Stock issuable upon conversion of
$171,556 aggregate principal amount of Third
Amendment Notes, 25,734 shares of Common Stock
issuable upon the exercise of Third Amendment
Warrants and 42,889 shares of Common Stock issuable
upon the exercise of Fourth Amendment Warrants
-----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER 252,377, which includes
47,368 shares of Common Stock issuable upon the
conversion of $225,000 aggregate principal amount of
the Company's 8.0% Convertible Subordinated Notes,
57,185 shares of Common Stock issuable upon
conversion of $171,556 aggregate principal amount of
Third Amendment Notes, 25,734 shares of Common Stock
issuable upon the exercise of Third Amendment
Warrants and 42,889 shares of Common Stock issuable
upon the exercise of Fourth Amendment Warrants.
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
252,377
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------- ------------------------------------------
CUSIP No. 04362 X1 01 Page 6
- -------------------------------- ------------------------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Furman Selz Investments II LLC 13-3937560
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 5,885,314, which includes
OWNED BY 1,105,263 shares of Common Stock issuable upon the
EACH conversion of $5,250,000 aggregate principal amount
REPORTING of the Company's 8.0% Convertible Subordinated Notes,
PERSON WITH 1,333,333 shares of Common Stock issuable upon the
conversion of $4,000,000 aggregate principal amount
of Third Amendment Notes, 600,000 shares of
Common Stock issuable upon the exercise of Third
Amendment Warrants, and 1,000,000 shares of Common
Stock issuable upon the exercise of Fourth Amendment
Warrants.
-----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER 5,885,314, which includes
1,105,263 shares of Common Stock issuable upon the
conversion of $5,250,000 aggregate principal amount
of the Company's 8.0% Convertible Subordinated Notes,
1,333,333 shares of Common Stock issuable upon the
conversion of $4,000,000 aggregate principal amount
of Third Amendment Notes, 600,000 shares of Common
Stock issuable upon the exercise of Third Amendment
Warrants, and 1,000,000 shares of Common Stock
issuable upon the exercise of Fourth Amendment
Warrants.
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,885,314
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------- ------------------------------------------
CUSIP No. 04362 X1 01 Page 7
- -------------------------------- ------------------------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
ING Furman Selz Asset Management LLC 13-4038444
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 5,885,314, which includes
OWNED BY 1,105,263 shares of Common Stock issuable upon the
EACH conversion of $5,250,000 aggregate principal amount
REPORTING of the Company's 8.0% Convertible Subordinated Notes,
PERSON WITH 1,333,333 shares of Common Stock issuable upon the
conversion of $4,000,000 aggregate principal amount
of Third Amendment Notes, 600,000 shares of
Common Stock issuable upon the exercise of Third
Amendment Warrants, and 1,000,000 shares of Common
Stock issuable upon the exercise of Fourth Amendment
Warrants.
-----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER 5,885,314, which includes
1,105,263 shares of Common Stock issuable upon the
conversion of $5,250,000 aggregate principal amount
of the Company's 8.0% Convertible Subordinated Notes,
1,333,333 shares of Common Stock issuable upon the
conversion of $4,000,000 aggregate principal amount
of Third Amendment Notes, 600,000 shares of Common
Stock issuable upon the exercise of Third Amendment
Warrants, and 1,000,000 shares of Common Stock
issuable upon the exercise of Fourth Amendment
Warrants.
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,885,314
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------- -------------------------------------------
CUSIP No. 04362 X1 01 Page 8
- -------------------------------- -------------------------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
ING (U.S.) Financial Holdings Corporation 51-0262561
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 5,885,314, which includes
OWNED BY 1,105,263 shares of Common Stock issuable upon the
EACH conversion of $5,250,000 aggregate principal amount
REPORTING of the Company's 8.0% Convertible Subordinated Notes,
PERSON WITH 1,333,333 shares of Common Stock issuable upon the
conversion of $4,000,000 aggregate principal amount
of Third Amendment Notes, 600,000 shares of
Common Stock issuable upon the exercise of Third
Amendment Warrants, and 1,000,000 shares of Common
Stock issuable upon the exercise of Fourth Amendment
Warrants.
-----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER 5,885,314, which includes
1,105,263 shares of Common Stock issuable upon the
conversion of $5,250,000 aggregate principal amount
of the Company's 8.0% Convertible Subordinated Notes,
1,333,333 shares of Common Stock issuable upon the
conversion of $4,000,000 aggregate principal amount
of Third Amendment Notes, 600,000 shares of Common
Stock issuable upon the exercise of Third Amendment
Warrants, and 1,000,000 shares of Common Stock
issuable upon the exercise of Fourth Amendment
Warrants.
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,885,314
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------- -------------------------------------------
CUSIP No. 04362 X1 01 Page 9
- -------------------------------- -------------------------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
ING Bank N.V.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
The Netherlands
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 5,885,314, which includes
OWNED BY 1,105,263 shares of Common Stock issuable upon the
EACH conversion of $5,250,000 aggregate principal amount
REPORTING of the Company's 8.0% Convertible Subordinated Notes,
PERSON 1,333,333 shares of Common Stock issuable upon the
WITH conversion of $4,000,000 aggregate principal amount
of Third Amendment Notes, 600,000 shares of
Common Stock issuable upon the exercise of Third
Amendment Warrants, and 1,000,000 shares of Common
Stock issuable upon the exercise of Fourth Amendment
Warrants.
-----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER 5,885,314, which includes
1,105,263 shares of Common Stock issuable upon the
conversion of $5,250,000 aggregate principal amount
of the Company's 8.0% Convertible Subordinated Notes,
1,333,333 shares of Common Stock issuable upon the
conversion of $4,000,000 aggregate principal amount
of Third Amendment Notes, 600,000 shares of Common
Stock issuable upon the exercise of Third Amendment
Warrants, and 1,000,000 shares of Common Stock
issuable upon the exercise of Fourth Amendment
Warrants.
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,885,314
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
BK
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------- -------------------------------------------
CUSIP No. 04362 X1 01 Page 10
- -------------------------------- -------------------------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
ING Groep N.V.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
The Netherlands
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 5,885,314, which includes
OWNED BY 1,105,263 shares of Common Stock issuable upon the
EACH conversion of $5,250,000 aggregate principal amount
REPORTING of the Company's 8.0% Convertible Subordinated Notes,
PERSON WITH 1,333,333 shares of Common Stock issuable upon the
conversion of $4,000,000 aggregate principal amount
of Third Amendment Notes, 600,000 shares of
Common Stock issuable upon the exercise of Third
Amendment Warrants, and 1,000,000 shares of Common
Stock issuable upon the exercise of Fourth Amendment
Warrants.
-----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER 5,885,314, which includes
1,105,263 shares of Common Stock issuable upon the
conversion of $5,250,000 aggregate principal amount
of the Company's 8.0% Convertible Subordinated Notes,
1,333,333 shares of Common Stock issuable upon the
conversion of $4,000,000 aggregate principal amount
of Third Amendment Notes, 600,000 shares of Common
Stock issuable upon the exercise of Third Amendment
Warrants, and 1,000,000 shares of Common Stock
issuable upon the exercise of Fourth Amendment
Warrants.
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,885,314
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IC
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------- ------------------------------------------
CUSIP No. 04362 X1 01 Page 11
- -------------------------------- ------------------------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Brian P. Friedman ###-##-####
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 6,050,314, which includes
OWNED BY 1,105,263 shares of Common Stock issuable upon the
EACH conversion of $5,250,000 aggregate principal amount
REPORTING of the Company's 8.0% Convertible Subordinated Notes,
PERSON WITH 1,333,333 shares of Common Stock issuable upon
conversion of $4,000,000 aggregate principal amount
of Third Amendment Notes, 600,000 shares of
Common Stock issuable upon the exercise of Third
Amendment Warrants and 1,000,000 shares of Common
Stock issuable upon the exercise of Fourth Amendment
Warrants.
-----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER 6,050,314, which includes
1,105,263 shares of Common Stock issuable upon the
conversion of $5,250,000 aggregate principal amount
of the Company's 8.0% Convertible Subordinated Notes,
1,333,333 shares of Common Stock issuable upon
conversion of $4,000,000 aggregate principal amount
of Third Amendment Notes, 600,000 shares of Common
Stock issuable upon the exercise of Third Amendment
Warrants and 1,000,000 shares of Common Stock
issuable upon the exercise of Fourth Amendment
Warrants.
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,050,314
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
44.2%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------- -------------------------------------------
CUSIP No. 04362 X1 01 Page 12
- -------------------------------- -------------------------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
James L. Luikart ###-##-####
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 6,050,314, which includes
OWNED BY 1,105,263 shares of Common Stock issuable upon the
EACH conversion of $5,250,000 aggregate principal amount
REPORTING of the Company's 8.0% Convertible Subordinated Notes,
PERSON WITH 1,333,333 shares of Common Stock issuable upon
conversion of $4,000,000 aggregate principal amount
of Third Amendment Notes, 600,000 shares of
Common Stock issuable upon the exercise of Third
Amendment Warrants and 1,000,000 shares of Common
Stock issuable upon the exercise of Fourth Amendment
Warrants.
-----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER 6,050,314, which includes
1,105,263 shares of Common Stock issuable upon the
conversion of $5,250,000 aggregate principal amount
of the Company's 8.0% Convertible Subordinated Notes,
1,333,333 shares of Common Stock issuable upon
conversion of $4,000,000 aggregate principal amount
of Third Amendment Notes, 600,000 shares of Common
Stock issuable upon the exercise of Third Amendment
Warrants and 1,000,000 shares of Common Stock
issuable upon the exercise of Fourth Amendment
Warrants.
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,050,314
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
44.2%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
<PAGE>
ITEM 1. SECURITY AND ISSUER.
The securities to which this statement relates are shares of
common stock, $0.00004 par value per share (the "Common Stock"), of Ascent
Pediatrics, Inc., a Delaware corporation ("Ascent" or the "Company"). The
principal executive office of Ascent is located at 187 Ballardvale Street,
Wilmington, Massachusetts 01887.
The Reporting Persons are filing this Amendment No. 3 to Schedule 13D
to take account of, first, advances made to the Company pursuant to an
amendment, dated July 1, 1999 (the "Third Amendment"), to the Securities
Purchase Agreement dated May 13, 1998 and amended on February 16, 1999 (the
"Purchase Agreement") among the Company, and the persons named as purchasers on
Schedule I attached thereto (each a "Purchaser" and collectively, the
"Purchasers"); second, a subsequent amendment, dated October 15, 1999 (the
"Fourth Amendment"), to the Purchase Agreement; and third, certain structural
changes in the corporate structure of the Reporting Persons.
Pursuant to the Purchase Agreement, certain of the Reporting Persons
acquired shares of the Series G Convertible Exchangeable Preferred Stock, $.01
par value per share (the "Preferred Shares"), warrants to purchase shares of
Common Stock (the "Warrants") and 8% Subordinated Notes due 2005 of the Company
(the "Subordinated Notes"). The Preferred Shares were convertible into Common
Stock and exchangeable into convertible subordinated notes of the Company (the
"Convertible Notes").
Pursuant to an amendment to the Purchase Agreement on February 16,
1999 (the "Second Amendment"), certain of the Reporting Persons agreed to
purchase additional shares of Common Stock from the Company (the "Direct
Shares"), to exercise all outstanding Warrants and to exchange all outstanding
Preferred Shares for Convertible Notes in accordance with the terms of the
Certificate of Designation, Voting Powers, Preferences and Rights of the
Preferred Shares as of the Alpharma Transaction Closing Date (as defined in Item
4 below). Pursuant to the Third Amendment, certain of the Reporting Persons
agreed to purchase up to $4,000,000 aggregate principal amount of 7.5%
Convertible Subordinated Notes of the Company (the "Third Amendment Notes") and
warrants to purchase up to an aggregate of 600,000 shares of Common Stock (the
"Third Amendment Warrants" and, collectively with the Third Amendment Notes, the
"Third Amendment Securities").
Pursuant to the Fourth Amendment, certain of the Reporting Persons
agreed to purchase up to $10,000,000 aggregate principal amount of 7.5%
Convertible Subordinated Notes of the Company (the "Fourth Amendment Notes") and
warrants to purchase up to an aggregate of 5,000,000 shares of Common Stock (the
"Fourth Amendment Warrants" and, collectively with the Fourth Amendment Notes,
the "Fourth Amendment Securities").
ITEM 2. IDENTITY AND BACKGROUND.
The following table provides certain information about each of the
Reporting Persons.
<TABLE>
<CAPTION>
CITIZENSHIP OR STATE OF PRINCIPAL OCCUPATION OR
NAME AND ADDRESS INCORPORATION/ORGANIZATION BUSINESS
- ---------------- --------------------------- -----------------------
<S> <C> <C>
Furman Selz Investors II L.P. ("Investors") Delaware Limited Partnership for
55 East 52nd Street, 37th Floor Investments
New York, New York 10055-0002
FS Employee Investors LLC ("Employee Delaware Limited Liability Company for
Investors") Investments
55 East 52nd Street, 37th Floor
New York, New York 10055-0002
FS Parallel Fund L.P. ("Parallel Fund") Delaware Limited Partnership for
55 East 52nd Street, 37th Floor Investments
New York, New York 10055-0002
FS Private Investments LLC ("Private Delaware Manager of Investors, Employee
Investments") Investors and Parallel Fund
55 East 52nd Street, 37th Floor
New York, New York 10055-0002
Furman Selz Investments II LLC Delaware Holding Company
("FS Investments II")
55 East 52nd Street
New York, New York 10055-0002
ING Furman Selz Asset Management LLC Delaware Holding Company
("ING FS Management")
230 Park Avenue
New York, New York 10169
ING (U.S.) Financial Holdings Corporation Delaware Holding Company
("ING U.S.")
135 East 57th Street
New York, New York 10022
ING Bank N.V. The Netherlands Bank
("ING Bank")
P.O. Box 810
1000 AV
Amsterdam, The Netherlands
ING Groep N.V. The Netherlands Insurance Company
("ING Groep")
Strawinskylaan 2631
1077 ZZ Amsterdam
Brian P. Friedman USA Managing Member of Private
55 East 52nd Street, 37th Floor Investments
New York, New York 10055-0002
James L. Luikart USA Managing Member of Private
55 East 52nd Street, 37th Floor Investments
New York, New York 10055-0002
</TABLE>
The Executive Board of ING Groep is the following:
E. Kist (Chairman)
F.S. Hubbell (as of May 2, 2000)
J.H.M. Lindenbergh
C. Maas
A.H.G. Rinnooy Kan
D. Robins (as of May 2, 2000)
M. Tilmant
The Executive Board of ING Bank is the following:
E. Kist (Chairman)
F.S. Hubbell (as of May 2, 2000)
J.H.M. Lindenbergh
C. Maas
A.H.G. Rinnooy Kan
D. Robins (as of May 2, 2000)
M. Tilmant
The directors and executive officers of ING (U.S.) Financial Holdings
Corporation are the following:
Directors:
Michael Petrycki
Wietze Prinsen
Bart Staal
Officers:
Fernando Gentil President
Bart Staal Executive Vice President
Joseph Kaminsky Senior Vice President
Benjamin Emanuel Vice President
David Rutkin Vice President
Andrew W. Druch General Counsel, Secretary
and Managing Director
Edward Chow Assistant Secretary
Patrick Murphy Assistant Secretary
Mark Seffinger Assistant Secretary
The officers of ING FS Management are the following:
Timothy Schantz President
Edmund A. Hajim CEO
Robert Miller Executive Vice President
and CFO
Kevin Cassidy Executive Vice President
Gerald Lins General Counsel
Joseph Kaminsky Senior Vice President
Wendy Prager Vice President and Assistant
Secretary
Benjamin Emanuel Vice President
David Rutkin Vice President
ING Groep owns 100% of ING Bank, which owns 100% of ING U.S., which is
the sole managing member and owner of 100% of the interests of ING FS
Management, which is the sole managing member and owner of 81.5% of the
interests of FS Investments II, which is the sole managing member of Employee
Investors, which beneficially owns 444,741 shares of Common Stock of the
Company. FS Investments II is the sole general partner of Investors, which
beneficially owns 5,188,196 shares of Common Stock of the Company. FS
Investments II is the sole general partner of Parallel Fund, which beneficially
owns 252,337 shares of Common Stock of the Company.
As a result of its role as manager of Investors, Employee Investors
and Parallel Fund (the "Funds"), Private Investments may be deemed to be the
beneficial owner of the shares beneficially owned by the Funds. In addition to
these shares, Private Investments also beneficially owns 165,000 additional
shares of Common Stock.
As a result of their positions as Managing Members of Private
Investments, Brian P. Friedman and James L. Luikart may be deemed to be the
beneficial owners of the shares beneficially owned by Private Investments and
therefore deemed to be the beneficial owners of the shares held by the Funds.
ING FS Management's ownership interests in FS Investments II were
acquired from ING Barings LLC, which is a wholly owned subsidiary of ING Merger,
LLC. As a result of this transfer, ING Barings LLC and ING Merger, LLC no longer
beneficially own any shares of the Company's Common Stock.
(d) and (e). None of the Reporting Persons, and to the knowledge of
the Reporting Persons, none of the other individuals named have, within the last
five years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), or have been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding been or are subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violations with respect to
such laws.
(f) Brian P. Friedman and James L. Luikart are United States citizens.
The filing of this statement shall not be construed as an admission
that Private Investments, FS Investments II, ING FS Management, ING U.S., ING
Bank, ING Groep, Brian P. Friedman or James L. Luikart are, for purposes of
Sections 13(d) or 13(g) of the Securities Exchange Act of 1934, the beneficial
owner of any shares covered by this statement.
ITEM 3. SOURCE AND AMOUNT OF FUNDS.
The funds for the purchase of Third Amendment Securities and Fourth
Amendment Securities by Investors and Parallel Fund were provided from the
partners' capital contributions.
The funds for the purchase of Third Amendment Securities and Fourth
Amendment Securities by Employee Investors were provided from member
contributions.
ITEM 4. PURPOSE OF TRANSACTION.
On May 13, 1998, Investors, Employee Investors and Parallel Fund
purchased (i) 4,628, 397 and 225 Preferred Shares, respectively, (ii)
$5,950,667, $509,668 and $289,665, aggregate principal amount, respectively, of
Subordinated Notes and (iii) Warrants to purchase an aggregate of 1,399,662,
119,961 and 68,095 shares of Common Stock, respectively, pursuant to the
Purchase Agreement.
On February 16, 1999, the Company entered into a Loan Agreement with
Alpharma USPD Inc. ("Lender") and Alpharma Inc., pursuant to which Lender agreed
to lend to the Company up to $40,000,000 (the "Alpharma Transaction"). In
connection with the Alpharma Transaction, the Company agreed to grant to the
Lender an option during a specified period during the first half of 2002 to
purchase all of the outstanding shares of the Company's Common Stock. The
Company and a wholly-owned subsidiary of the Company entered into an Agreement
and Plan of Merger, which was consummated on July 23, 1999 (the "Alpharma
Transaction Closing Date"), pursuant to which, each share of Common Stock was
converted into the right to receive one Depositary Share (the "Depositary
Shares"). Each Depositary Share evidences one share of Common Stock of the
Company subject to the Lender's option.
In connection with the Alpharma Transaction, the Second Amendment to
the Purchase Agreement was executed on February 16, 1999. Under the Second
Amendment, the following three pertinent exchanges involving Investors, Employee
Investors and Parallel Fund (collectively, the "Funds") occurred on the Alpharma
Transaction Closing Date. First, the Funds purchased 225,000 shares of Common
Stock from the Company for $675,000. Second, the Funds acquired an additional
1,587,718 shares of Common Stock through the exercise of all of their Warrants
outstanding as of February 16, 1999 at an exercise price adjusted from $4.75 to
$3.00 per share of Common Stock. Third, the Company exchanged its Convertible
Notes for the Preferred Shares held by the Funds in accordance with the terms of
the Preferred Shares. The Convertible Notes are convertible at the option of the
holder into shares of Common Stock and will automatically convert into Common
Stock under certain circumstances. Pursuant to the terms of the Convertible
Notes, the conversion price and number of shares of Common Stock issuable upon
the conversion of the Convertible Notes are subject to adjustment upon the
occurrence of certain events, such as stock splits, stock dividends, mergers,
reclassifications and similar corporate events.
On July 1, 1999, the Company and the Purchasers executed the Third
Amendment, pursuant to which, among other things, the Funds collectively agreed
to lend to the Company up to $4,000,000 in exchange for the Third Amendment
Notes and Third Amendment Warrants. $2,000,000 of the total $4,000,000 was
advanced to the Company and, pursuant to the Third Amendment, the Company issued
to the Funds Third Amendment Notes in the aggregate principal amount of
$2,000,000 and Third Amendment Warrants to purchase up to 300,000 shares of
Common Stock.
On October 15, 1999, the Company and the Purchasers executed the
Fourth Amendment, pursuant to which, among other things, the Funds collectively
agreed to lend to the Company up to $10,000,000 in exchange for the Fourth
Amendment Notes and the Fourth Amendment Warrants. Upon execution of the Fourth
Amendment, and pursuant to its terms, the Company immediately issued Fourth
Amendment Warrants to the Funds to purchase up to 1,000,000 shares of Common
Stock.
On December 30, 1999, the Funds advanced an additional $1,000,000 to
the Company pursuant to the Third Amendment, and the Company issued to the Funds
Third Amendment Notes in the aggregate principal amount of $1,000,000 and Third
Amendment Warrants to purchase up to 150,000 shares of Common Stock. On February
14, 2000, the Funds advanced to the Company the remaining $1,000,000 under the
Third Amendment, and the Company issued to the Funds Third Amendment Notes in
the aggregate principal amount of $1,000,000 and Third Amendment Warrants to
purchase up to 150,000 shares of Common Stock.
The Third Amendment Notes and Fourth Amendment Notes are convertible
into shares of Common Stock at a conversion price of $3.00 per share in
accordance with the terms of the Purchase Agreement as amended and are due on
July 1, 2004. The Third Amendment Warrants are exercisable at $3.00 per share of
Common Stock and expire on July 1, 2006. The Fourth Amendment Warrants are
exercisable at $3.00 per share of Common Stock and expire on October 15, 2006.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b)
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES
TO BE BENEFICIALLY SHARED VOTING SHARED INVESTMENT SOLE VOTING SOLE INVESTMENT PERCENTAGE
NAME OWNED POWER POWER POWER POWER OF CLASS
- ---- ------------------ ------------- ---------------- ----------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Private Investments 6,050,314 6,050,314 6,050,314 0 0 44.2
Investors 5,188,196 5,188,196 5,188,196 0 0 39.3
Employee Investors 447,741 447,741 447,741 0 0 4.5
Parallel Fund 252,377 252,377 252,377 0 0 2.6
FS Investments II 5,885,314 5,885,314 5,885,314 0 0 43.0
ING FS Management 5,885,314 5,885,314 5,885,314 0 0 43.0
ING U.S. 5,885,314 5,885,314 5,885,314 0 0 43.0
ING Bank 5,885,314 5,885,314 5,885,314 0 0 43.0
ING Groep 5,885,314 5,885,314 5,885,314 0 0 43.0
Brian P. Friedman 6,050,314 6,050,314 6,050,314 0 0 44.2
James L. Luikart 6,050,314 6,050,314 6,050,314 0 0 44.2
</TABLE>
<PAGE>
As of November 9, 1999, the Company had 9,643,883 shares of Common
Stock outstanding. This figure does not include outstanding warrants, options
and securities convertible into shares of Common Stock.
(b) See the answer to Item 2 hereof.
(c) Other than the transactions described herein, no transactions by
any of the Reporting Persons required to be reported by this Item have taken
place in the last sixty (60) days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Private Investments is the manager of each of Investors, Employee
Investors and Parallel Fund. The general partner of each of Investors and
Parallel Fund and the managing member of Employee Investors have delegated all
relevant rights to Private Investments.
Brian P. Friedman and James L. Luikart are the managing members of
Private Investments.
Two employees of Private Investments serve as directors of the Company
and periodically receive options to purchase Common Stock under the Company's
Director Stock Option Plan. By the terms of their employment with Private
Investments, both must assign all such options to Private Investments.
ITEM 7. MATERIAL FILED AS EXHIBITS. PAGE
A. Joint Reporting Agreement and Power of Attorney on
Behalf of Each Reporting Person............................26
B. Fourth Amendment, dated October 15, 1999, to the
Securities Purchase Agreement dated May 13, 1998
and amended on February 16, 1999 and July 1, 1999..........30
C. Second Supplemental Agreement, dated October 15,
1999 among the Company, Alpharma USPD Inc.,
Alpharma Inc., State Street Bank and Trust Company
and each of the Purchasers.................................64
D. Amended and Restated Subordination Agreement,
dated October 15, 1999 among the Company,
Alpharma USPD Inc., and each of the Purchasers.............74
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February __, 2000
FURMAN SELZ INVESTORS II L.P.
By: FS PRIVATE INVESTMENTS LLC
By: /S/ BRIAN P. FRIEDMAN
----------------------------
Name: Brian P. Friedman
Title: Managing Member
FS EMPLOYEE INVESTORS LLC
By: FS PRIVATE INVESTMENTS LLC
By: /S/ BRIAN P. FRIEDMAN
---------------------------
Name: Brian P. Friedman
Title: Managing Member
FS PARALLEL FUND, L.P.
By: FS PRIVATE INVESTMENTS LLC
By: /S/ BRIAN P. FRIEDMAN
----------------------------
Name: Brian P. Friedman
Title: Managing Member
FS PRIVATE INVESTMENTS LLC
By: /S/ BRIAN P. FRIEDMAN
----------------------------
Name: Brian P. Friedman
Title: Managing Member
FURMAN SELZ INVESTMENTS II LLC
By: /S/ BRIAN P. FRIEDMAN
----------------------------
Name: Brian P. Friedman
Title: President
ING FURMAN SELZ ASSET
MANAGEMENT LLC
By: *
----------------------------
Name: Robert J. Miller
Title: Executive Vice President
ING (U.S.) FINANCIAL HOLDINGS
CORPORATION
By: *
----------------------------
Name: Andrew Druch
Title: Secretary
ING BANK N.V.
By: *
----------------------------
Name: J.H.J. Houben
Title: Managing Principal
By: *
----------------------------
Name: P.F.M. Van Lierop
Title: Senior Legal Advisor
ING GROEP N.V.
By: *
----------------------------
Name: J.H.J. Houben
Title: Managing Principal
<PAGE>
/S/ BRIAN P. FRIEDMAN
---------------------------
Name: Brian P. Friedman
/S/ JAMES L. LUIKART
-----------------------------
Name: James L. Luikart
*By: /S/ ROBERT MILLER
-------------------------
Robert Miller
Attorney-in-Fact
<PAGE>
EXHIBIT A
JOINT REPORTING AGREEMENT
AND
POWER OF ATTORNEY
WHEREAS, the statement or amended statement of Schedule 13D (the
"Joint Statement") to which this joint reporting agreement and power of attorney
(the "Agreement") is an exhibit is being filed on behalf of two or more persons
(collectively, the "Reporting Persons"); and
WHEREAS, the Reporting Persons prefer to file the Joint Statement on
behalf of all of the Reporting Persons rather than individual statements on
Schedule 13D on behalf of each of the Reporting Persons;
NOW, THEREFORE, the undersigned hereby agree as follows with each of
the other Reporting Persons:
1. Each of the Reporting Persons is responsible for the timely filing
of the Joint Statement and any amendments thereto.
2. Each of the Reporting Persons is responsible for the completeness
and accuracy of the information concerning such Reporting Person contained in
the Joint Statement.
3. None of the Reporting Persons is responsible for the completeness
or accuracy of the information concerning the other Reporting Persons contained
in the Joint Statement, unless such Reporting Person knows or has reason to
believe that such information is inaccurate.
4. The undersigned agrees that the Joint Statement is, and any
amendment thereto will be, filed on behalf of each of the Reporting Persons.
5. Each of Furman Selz Investments II LLC, ING Furman Selz Asset
Management LLC, ING (U.S.) Financial Holdings Corporation, ING Bank N.V., ING
Groep N.V. hereby appoints Robert Miller as attorney-in-fact with authority to
execute and deliver on behalf of it any and all documents (including any
amendments thereto) required to be filed or otherwise executed and delivered by
it pursuant to the Securities Exchange Act of 1934, as amended, the Securities
Act of 1933, as amended, all other federal, state and local securities and
corporation laws, and all regulations promulgated thereunder. Each of Furman
Selz Investments II LLC, ING Furman Selz Asset Management LLC, ING (U.S.)
Financial Holdings Corporation, ING Bank N.V., ING Groep N.V. further grant
Robert Miller authority, as attorney-in-fact, to execute, deliver, or file on
behalf of it any document necessary to amend this Joint Reporting Agreement and
Power of Attorney for the purpose of adding additional parties thereto at such
time or times as he should, in his discretion, deem appropriate.
6. Each of Brian P. Friedman and James L. Luikart hereby appoints
Brian P. Friedman and James L. Luikart, and each of them, as attorney-in-fact
with authority to execute and deliver on his behalf any and all documents
(including any amendments thereto) required to be filed or otherwise executed
and delivered by him pursuant to the Securities Exchange Act of 1934, as
amended, the Securities Act of 1933, as amended, all other federal, state and
local securities and corporation laws, and all regulations promulgated
thereunder.
7. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same document.
<PAGE>
Dated: February __, 2000
FURMAN SELZ INVESTMENTS II LLC
By: /S/ BRIAN P. FRIEDMAN
--------------------------
Name: Brian P. Friedman
Title: President
ING FURMAN SELZ ASSET MANAGEMENT LLC
By: /S/ ROBERT J. MILLER
--------------------------
Name: Robert J. Miller
Title: Vice President
ING (U.S.) FINANCIAL HOLDINGS
CORPORATION
By: /S/ ANDREW DRUCH
--------------------------
Name: Andrew Druch
Title: Secretary
ING BANK N.V.
By: /S/ J.H.J. HOUBEN
--------------------------
Name: J.H.J. Houben
Title:
By: /S/ P.F.M. VAN LIEROP
--------------------------
Name: P.F.M. Van Lierop
Title: Senior Legal Advisor
ING GROEP N.V.
By: /S/ J.H.J. HOUBEN
-------------------------
Name: J.H.J. Houben
Title:
/S/ BRIAN P. FRIEDMAN
-------------------------
Brian P. Friedman
/S/ JAMES L. LUIKART
-------------------------
James L. Luikart
<PAGE>
EXHIBIT B
FOURTH AMENDMENT
DATED OCTOBER 15, 1999
TO THE
SECURITIES PURCHASE AGREEMENT
DATED MAY 13, 1998
BY AND AMONG
FURMAN SELZ INVESTORS II L.P.
FS EMPLOYEE INVESTORS LLC
FS PARALLEL FUND L.P.
BANCBOSTON VENTURES INC.
FLYNN PARTNERS
AND
ASCENT PEDIATRICS, INC.
<PAGE>
FOURTH AMENDMENT dated as of the 15th day of October 1999 (the "Fourth
Amendment") among Ascent Pediatrics, Inc. (the "Company"), Furman Selz Investors
II L.P. ("Investors"), FS Employee Investors LLC ("Employee"), FS Parallel Fund
L.P. ("Parallel" and together with Investors and Employee, the "Furman Selz
Entities"), BancBoston Ventures Inc. ("BancBoston") and Flynn Partners
("Flynn"), (each of Investors, Employee, Parallel, BancBoston and Flynn are
herein referred to individually as a "Purchaser", and collectively, as the
"Purchasers").
WHEREAS, the Company and the Purchasers are parties to a Securities
Purchase Agreement dated as of May 13, 1998, as amended September 30, 1998,
February 16, 1999 and July 1, 1999 (the "Series G Purchase Agreement");
WHEREAS, pursuant to the Third Amendment dated as of July 1, 1999 (the
"Third Amendment") to the Series G Purchase Agreement, the Furman Selz Entities
advanced $2,000,000 to the Company and agreed to advance an additional
$2,000,000 to the Company pursuant to the terms set forth therein;
WHEREAS, the Furman Selz Entities wish to purchase from the Company,
and the Company wishes to issue and sell to the Furman Selz Entities, (i) up to
$10,000,000 aggregate principal amount of 7.5% Convertible Subordinated Notes of
the Company substantially in the form attached hereto as EXHIBIT A (the "Fourth
Amendment Convertible Notes"), and (ii) warrants substantially in the form
attached hereto as EXHIBIT B (the "Fourth Amendment Warrants") to purchase up to
an aggregate of 5,000,000 depositary shares of the Company ("Depositary
Shares"), each Depositary Share representing one share of Common Stock of the
Company subject to a call option and represented by a depositary receipt;
WHEREAS, the Furman Selz Entities and the Company desire to provide
for such purchase and sale and to establish various rights and obligations in
connection therewith; and
WHEREAS, in connection with such purchase and sale, the Purchasers and
the Company desire to amend certain provisions of the Series G Purchase
Agreement.
NOW THEREFORE, in consideration of these premises, the mutual
covenants and agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS AND INTERPRETATION.
(a) All capitalized terms used herein which are not otherwise
specifically defined herein shall have the respective meaning as ascribed
thereto in the Series G Purchase Agreement.
(b) Unless otherwise expressly indicated, all references contained
herein to SECTIONS or other subdivisions or SCHEDULES refer to the corresponding
SECTIONS and other subdivisions or SCHEDULES of the Series G Purchase Agreement.
(c) The sections and the headings in the sections in this Fourth
Amendment are for convenience only. Said sections and headings shall not be
deemed to be part of this Fourth Amendment and in no way define, limit, extend
or describe the scope or intent of its provisions.
ARTICLE II
SALE AND PURCHASE OF FOURTH AMENDMENT
CONVERTIBLE NOTES AND FOURTH AMENDMENT WARRANTS
Section 2.1 ADVANCES.
(a) AMOUNT AND TERM.
(i) Subject to the terms and conditions hereinafter set forth,
each Furman Selz Entity severally agrees to make loans hereunder (each, a
"Fourth Amendment Advance" and collectively the "Fourth Amendment Advances") in
an aggregate amount not to exceed such Furman Selz Entity's Commitment
Percentage (as defined in clause (ii) below) of $10,000,000 to the Company from
time to time on any Business Day (as defined in clause (iv) below) occurring on
and after the date hereof to and including June 30, 2001 (the "Termination
Date").
(ii) "Commitment Percentage" shall mean, as to each Furman Selz
Entity, the amount shown as such Furman Selz Entity's Commitment Percentage on
SCHEDULE 1 hereto.
(iii) As used herein, the term "Business Day" shall mean any day
other than a Saturday, Sunday or other day on which banks in the State of New
York or the Commonwealth of Massachusetts are authorized by law to remain
closed.
(b) FOURTH AMENDMENT CONVERTIBLE NOTES. On the date hereof, the
Company shall issue to each Furman Selz Entity a Fourth Amendment Convertible
Note in an original principal amount equal to the Furman Selz Entity's
Commitment Percentage of $10,000,000. There shall be attached to each Fourth
Amendment Convertible Note, and maintained by the Company, a register in which
the Company shall, from time to time, record (i) the date and amount of each
Fourth Amendment Advance under the Fourth Amendment Convertible Note, and (ii)
the date and amount of any principal and interest payments made by the Company
under the Fourth Amendment Convertible Note. The entries made in the register by
the Company shall be conclusive and binding for all purposes, absent manifest
error.
(c) MAKING THE FOURTH AMENDMENT ADVANCES.
(i) Any Fourth Amendment Advance, including without limitation
the initial Fourth Amendment Advance, shall be made on at least twelve (12)
Business Days' notice (each, a "Notice") from the Company to each Furman Selz
Entity specifying the date (which date shall be a Business Day) and the amount
of such Fourth Amendment Advance. Upon fulfillment of the applicable conditions
set forth in Section 2.2 hereof, each Furman Selz Entity shall pay the portion
of such Fourth Amendment Advance equal to such Furman Selz Entity's Commitment
Percentage of the aggregate amount specified in the Notice in United States
dollars by wire transfer of same day funds to the account of the Company at such
banking institution as may be designated by the Company.
(ii) Each Notice shall contain a certificate from the Chief
Executive Officer of the Company that the conditions set forth in Section 2.2(c)
below have been met.
(iii) Fourth Amendment Advances shall be made, upon fulfillment
of the applicable conditions, in installments of no less than $250,000.
Section 2.2 CONDITIONS OF LENDING.
(a) OBLIGATION TO LEND. Subject to the conditions set forth herein,
each Furman Selz Entity hereby agrees to the making of Fourth Amendment Advances
up to and until the Termination Date upon receipt of Notices from the Company.
All obligations of the Furman Selz Entities hereunder shall be several, and not
joint and several.
(b) CONDITIONS TO THE INITIAL FOURTH AMENDMENT ADVANCE. The agreement
of each Furman Selz Entity to make the initial Fourth Amendment Advance is
subject to the condition that each Furman Selz Entity shall have received the
following, each dated as of the date hereof:
(i) The applicable Initial Fourth Amendment Warrant (as defined
in Section 2.3) executed by the Company;
(ii) The applicable Fourth Amendment Convertible Note executed by
the Company.
(iii) Certified copies of the resolutions of the Board of
Directors of the Company approving this Fourth Amendment, the Fourth Amendment
Convertible Notes and the Fourth Amendment Warrants and all documents evidencing
other necessary corporate action, governmental approvals and consents of other
persons, if any, with respect to this Fourth Amendment, each Fourth Amendment
Convertible Note and each Fourth Amendment Warrant.
(iv) All legal matters incident to the consummation of the
transactions contemplated hereby shall be satisfactory to counsel for the Furman
Selz Entity, and the Furman Selz Entities shall have received from Hale and Dorr
LLP, counsel for the Company, such firm's opinion addressed to the Furman Selz
Entities and dated the date hereof in the form attached hereto as EXHIBIT C.
(v) The Company shall have obtained the consent of Alpharma USPD
Inc. ("Alpharma") to the transactions contemplated by this Fourth Amendment, and
the Subordination Agreement (as defined below) shall have been amended to
reflect the issuance of the Fourth Amendment Convertible Notes.
(c) CONDITIONS TO FOURTH AMENDMENT ADVANCES. The agreement of each
Furman Selz Entity to make any Fourth Amendment Advance shall be subject to the
fulfillment to their reasonable satisfaction, or the waiver by the Furman Selz
Entities, on or prior to the date of such Fourth Amendment Advance of each of
the following conditions:
(i) No event has occurred and is continuing which constitutes a
Default or an Event of Default;
(ii) No event has occurred and is continuing which constitutes an
Impairment Event (as defined by clause (ii) of the definition of "Impairment
Event" in the Loan Agreement dated as of February 16, 1999 between the Company
and Alpharma, as amended (the "Loan Agreement")); provided that this condition
shall be deemed to be fulfilled if Alpharma agrees in writing that the
occurrence of such an Impairment Event will not be a condition to its obligation
to make the next Loan requested of it by the Company under the Loan Agreement.
Section 2.3 WARRANTS.
(a) INITIAL FOURTH AMENDMENT WARRANTS. Upon execution of this Fourth
Amendment, the Company will issue to each Furman Selz Entity a Fourth Amendment
Warrant (each, an "Initial Fourth Amendment Warrant") to acquire a number of
Depositary Shares equal to the product of such Furman Selz Entity's Commitment
Percentage and 1,000,000, at an exercise price of $3.00 per share; provided that
in the event that the Company is required hereunder to issue to a Furman Selz
Entity a Fourth Amendment Warrant to purchase fractional Depositary Shares, the
number of shares issuable upon exercise of such Fourth Amendment Warrant shall
be rounded down to the nearest whole number.
(b) SUBSEQUENT FOURTH AMENDMENT WARRANTS. Upon receipt of any Advance
hereunder from a Furman Selz Entity, the Company will issue to such Furman Selz
Entity a Fourth Amendment Warrant (each, a "Subsequent Fourth Amendment
Warrant") to acquire:
(i) in the case of Advances hereunder which, together with all
previous Advances hereunder total $4,000,000 or less, 1 Depositary Share of the
Company (subject to appropriate adjustment for stock splits, stock dividends,
reclassifications or any similar recapitalization affecting the Depositary
Shares) for each $4.00 in principal amount of Advances made by such Furman Selz
Entity;
(ii) in the case of Advances hereunder which, together with all
previous Advances hereunder total from $4,000,001 to $7,000,000, 1 Depositary
Share of the Company (subject to appropriate adjustment for stock splits, stock
dividends, reclassifications or any similar recapitalization affecting the
Depositary Shares) for each $3.00 in principal amount of Advances made by such
Furman Selz Entity;
(iii) in the case of Advances hereunder which, together with all
previous Advances hereunder total from $7,000,001 to $9,000,000, 1 Depositary
Share of the Company (subject to appropriate adjustment for stock splits, stock
dividends, reclassifications or any similar recapitalization affecting the
Depositary Shares) for each $2.00 in principal amount of Advances made by such
Furman Selz Entity; and
(iv) in the case of Advances hereunder which, together with all
previous Advances hereunder total from $9,000,001 to $10,000,000, 1 Depositary
Share of the Company (subject to appropriate adjustment for stock splits, stock
dividends, reclassifications or any similar recapitalization affecting the
Depositary Shares) for each $1.00 in principal amount of Advances made by such
Furman Selz Entity.
Each Subsequent Fourth Amendment Warrant shall have an exercise price of $3.00
per share (subject to appropriate adjustment for stock splits, stock dividends,
reclassifications or any similar recapitalization affecting the Depositary
Shares); provided that (i) in the event that the Company is required hereunder
to issue to a Furman Selz Entity a Subsequent Fourth Amendment Warrant to
purchase fractional Depositary Shares, the number of shares issuable upon
exercise of such Subsequent Fourth Amendment Warrant shall be rounded down to
the nearest whole number and (ii) in the event that subsequent to the date
hereof the exercise price of the Initial Fourth Amendment Warrants issued on the
date hereof is adjusted pursuant to Article III of such Initial Fourth Amendment
Warrants, the initial exercise price of the Subsequent Fourth Amendment Warrants
issued after the date hereof in connection with any subsequent Advance shall
equal the adjusted exercise price of the Initial Fourth Amendment Warrants
issued on the date hereof; and provided further that such Furman Selz Entity
reaffirms the representations and warranties contained in Article IV.
Section 2.4 PURCHASE PRICE ALLOCATION. The Company and the Furman Selz
Entities agree to use their best efforts to reach agreement with respect to the
allocation of the purchase price for the Initial Fourth Amendment Warrants to be
issued on the date hereof. The Company and the Furman Selz Entities further
agree to use their best efforts to reach agreement with respect to the
allocation of the purchase price for the Fourth Amendment Convertible Notes and
Subsequent Fourth Amendment Warrants issued upon each Fourth Amendment Advance
made hereunder.
Section 2.5 THIRD AMENDMENT ADVANCES.
(a) The Furman Selz Entities each hereby confirm that, notwithstanding
this Fourth Amendment, each Furman Selz Entity is and shall remain obligated to
make advances under the Third Amendment (each, a "Third Amendment Advance") in
accordance with the terms of the Third Amendment, as amended by this Section
2.5.
(b) Clause (c)(ii)(b) of Section 2.2 of the Third Amendment is hereby
deleted in its entirety and replaced with the following:
"(b) notwithstanding the foregoing, the condition set forth in
this clause (ii) shall not be deemed to be fulfilled if following
such Advance and any advance under the Fourth Amendment dated as
of October 15, 1999 to the Series G Purchase Agreement made as of
the date of such Advance hereunder, the Company would continue to
be in a Negative Equity Position unless Alpharma agrees in
writing that the occurrence of a Negative Equity Impairment Event
will not be a condition to its obligation to make the next Loan
(as defined in the Loan Agreement) requested of it by the Company
under the Loan Agreement; and"
SECTION 2.6 SECURITY. As security for the full and timely payment of
all Fourth Amendment Advances and the performance of the obligations contained
herein in connection with the Fourth Amendment Advances, the Company covenants
that it will, on or before each Loan Date for a Secured Loan (each as defined in
the Loan Agreement), do or cause to be done, all things necessary in the
reasonable opinion of the Furman Selz Entities and their counsel, to grant the
Furman Selz Entities a duly perfected security interest in all of the Collateral
(as defined in the Loan Agreement) acquired by the Company with the proceeds of
said Secured Loan, such security interest to be junior to any security interest
in the Collateral granted by the Company to Alpharma pursuant to the Second
Supplemental Agreement (as defined below). At the request of the Furman Selz
Entities, the Company will cause its duly authorized officers to execute on its
behalf, any certificate, instrument, statement or document, or to take such
other action which the Furman Selz Entities, counsel reasonably deems necessary,
from time to time, to create, continue or preserve the Furman Selz Entities,
security interest in and to the Collateral (and the perfection and priority
thereof) as contemplated hereby, specifically including the execution of such
security agreement and the filing of such financing statements in the form
reasonably requested by counsel to the Furman Selz Entities.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Furman Selz Entities as
follows:
SECTION 3.1 ORGANIZATION AND EXISTENCE, ETC. The Company (a) is duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, and has all requisite power and authority to carry on its business
as now conducted and as proposed to be conducted, and (b) is duly qualified to
do business as a foreign corporation and is in good standing (or the equivalent
thereof under applicable law) in each jurisdiction in which the conduct of its
business requires such qualification by reason of the ownership or leasing of
property or otherwise (except for those jurisdictions in which the failure so to
qualify does not have a Material Adverse Effect). "Material Adverse Effect"
means, when used in connection with the Company, any development, change or
effect that is materially adverse to the business, properties, assets, net
worth, financial condition, results of operations or future prospects (including
without limitation, future equity value) of the Company and its Subsidiaries
taken as a whole.
SECTION 3.2 CAPITALIZATION OF THE COMPANY.
(a) As of the date hereof, (i) the Company's authorized capital stock
consists of: (1) 60,000,000 shares of Common Stock, of which 9,643,833 shares
are validly issued and outstanding, fully paid and non-assessable, each of which
shares is subject to a call option held by Alpharma, represented by a Depositary
Share and held of record by State Street Bank and Trust Company, as Depositary,
and (2) 5,000,000 shares of "blank check" preferred stock, $.01 par value per
share, of which 7,000 shares have been designated Series G Convertible
Exchangeable Preferred Stock, all of which shares were exchanged for 8%
convertible subordinated notes of the Company on July 23, 1999; and (ii) the
Company has outstanding the securities set forth on SCHEDULE 3.2 attached hereto
which are convertible into or exercisable or exchangeable for Common Stock (the
"Derivative Securities").
(b) All the issued and outstanding shares of capital stock of the
Company are free of preemptive and similar rights and have been offered, issued,
sold and delivered by the Company in transactions in compliance with the
applicable federal, state and foreign securities laws. Other than as set forth
in SCHEDULE 3.2 attached hereto, there are no outstanding agreements or
commitments requiring the Company to issue capital stock or Derivative
Securities as of the date hereof.
SECTION 3.3 AUTHORIZATION; BINDING OBLIGATIONS.
(a) The Company has full power and authority to execute and deliver
this Fourth Amendment, the Fourth Amendment Convertible Notes, the Fourth
Amendment Warrants and such other documents furnished or to be furnished by the
Company hereunder. This Fourth Amendment has been duly authorized, executed and
delivered by the Company and 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. The issuance, offering and sale of the Fourth Amendment
Convertible Notes and the Fourth Amendment Warrants pursuant to this Fourth
Amendment and the compliance by the Company with the provisions of this Fourth
Amendment, the Fourth Amendment Convertible Notes and the Fourth Amendment
Warrants, 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, (ii) subject to Alpharma's consent to this Fourth
Amendment and the transactions contemplated hereby, any contract or other
agreement to which the Company is a party or by which the Company or any of its
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.
(b) The Fourth Amendment Convertible Notes have been duly authorized
for issuance and the Depositary Shares issuable upon conversion of the Fourth
Amendment Convertible Notes have been duly authorized and reserved for issuance,
and (i) the Fourth Amendment Convertible Notes have been duly executed and
delivered by the Company and constitute valid and legally binding obligations of
the Company enforceable against the Company in accordance with their terms,
subject to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity, (ii) the principal amount outstanding under the Fourth
Amendment Convertible Notes will be convertible into Depositary Shares in
accordance with the provisions of this Fourth Amendment and the Fourth Amendment
Convertible Notes, and (iii) the Depositary Shares initially issuable upon such
conversion, when issued and delivered in accordance with the provisions of this
Fourth Amendment and the Fourth Amendment Convertible Notes, will be validly
issued, fully paid and nonassessable.
(c) The Fourth Amendment Warrants have been duly authorized for
issuance and the Depositary Shares issuable upon exercise of the Fourth
Amendment Warrants have been duly authorized and reserved for issuance and (i)
the Initial Fourth Amendment Warrants being delivered on the date hereof have
been, and the Subsequent Fourth Amendment Warrants being delivered after the
date hereof in connection with any subsequent Advance, when delivered, will have
been, duly executed and delivered by the Company in accordance with this Fourth
Amendment and constitute and will constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance with
their terms, subject to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to general
principles of equity, (ii) the Fourth Amendment Warrants will be exercisable for
Depositary Shares in accordance with their terms, and (iii) the Depositary
Shares issuable upon exercise of the Fourth Amendment Warrants, when issued and
delivered in accordance with the provisions of the Fourth Amendment Warrants,
will be validly issued, fully paid and nonassessable.
SECTION 3.4 COMPLIANCE WITH INSTRUMENTS, ETC. Except as set forth on
SCHEDULE 3.4 hereto, the Company is not in breach or violation of, or in default
under, any term or provision of (i) its Certificate of Incorporation and Bylaws,
(ii) subject to Alpharma's approval of this Fourth Amendment and the
transactions contemplated hereby and the execution on the date hereof of the
Second Supplemental Agreement (the "Second Supplemental Agreement") by and among
the Company, Alpharma, Alpharma Inc., State Street Bank and Trust Company and
the Purchasers, any indenture, mortgage, deed of trust, voting trust agreement,
stockholders agreement, note agreement, debt instrument 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, the effect of which breach, violation or default,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect, or (iii) any statute, judgment, decree, order, rule or
regulation applicable to the Company or of any arbitrator, court, regulatory
body, administrative agency or any other governmental agency or body, domestic
or foreign, having jurisdiction over the Company or any of its respective
activities or properties and the effect of which breach, violation or default,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.
SECTION 3.5 LITIGATION. Except as set forth on SCHEDULE 3.5 hereto,
there are no actions, suits, proceedings or investigations pending, or, to the
knowledge of the Company, threatened, against the Company before or by any
court, regulatory body or administrative agency or any other governmental agency
or body, domestic or foreign, which would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, or any actions, suits,
proceedings or investigations pending, or, to the knowledge of the Company,
threatened, which challenge the validity of any action taken or to be taken
pursuant to or in connection with this Fourth Amendment or the issuance of the
Fourth Amendment Convertible Notes or the Fourth Amendment Warrants and the
Depositary Shares issuable upon the conversion or exercise thereof which would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. As it pertains to the Company, when used herein, the phrases "to
the knowledge of" or derivatives thereof shall mean the actual knowledge of the
Chief Executive Officer or Vice President, Finance of the Company.
SECTION 3.6 OFFERING. Subject to the Furman Selz Entities'
representations and warranties in Article IV of this Fourth Amendment, the
offer, sale and issuance of the Fourth Amendment Convertible Notes and the
Fourth Amendment Warrants as contemplated by this Fourth Amendment are not
subject to the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and neither the Company nor anyone acting on its
behalf, has taken or will take any action that would cause such registration
requirements to be applicable.
SECTION 3.7 PERMITS; GOVERNMENTAL AND OTHER APPROVALS. Subject to the
consent of Alpharma to this Fourth Amendment and the transactions contemplated
hereby, no approval, consent, authorization or other order of, and no
designation, filing, registration, qualification or recording with, any
governmental authority, domestic or foreign, is required for the Company's
performance of this Fourth Amendment or the consummation of the transactions
contemplated hereby except for the filing of a Form D under the Securities Act
and the filing of a Form 8-K under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
SECTION 3.8 SUBSIDIARIES. The Company has no subsidiaries and owns no
securities of other corporations or entities other than short-term money market
investments.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE FURMAN SELZ ENTITIES
Each Furman Selz Entity, severally and not jointly, 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, (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
Fourth Amendment Convertible Notes and the Fourth Amendment Warrants and the
Depositary Shares issuable upon the conversion or exercise thereof 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, except as contemplated by the Series G
Purchase Agreement or this Fourth Amendment, such Furman Selz Entity 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 or may be bound or to which any of its property is or
may be subject, or (C) any statute, judgment, decree, order, rule or regulation
applicable to such Furman Selz Entity or of any arbitrator, court, regulatory
body, administrative agency or any other governmental agency or body, domestic
or foreign, having jurisdiction over such Furman Selz Entity or any of its
activities or properties, (vi) any Furman Selz Entity which is a corporation,
partnership, limited liability company or trust represents that it has not been
organized, reorganized or recapitalized specifically for the purpose of
investing in the Company, (vii) it understands that the Fourth Amendment
Convertible Notes and the Fourth Amendment Warrants and the Depositary Shares
issuable upon the conversion or exercise thereof have not been registered under
the Securities Act and it will not offer, sell, transfer, pledge, hypothecate or
otherwise dispose of any of the Fourth Amendment Convertible Notes or the Fourth
Amendment Warrants or the Depositary Shares issuable upon the conversion or
exercise thereof 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 the Fourth Amendment Convertible Notes
and the Fourth Amendment Warrants and any certificates representing the
Depositary Shares issuable upon the conversion or exercise thereof 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."
Each Furman Selz Entity further represents that (i) it has full power
and authority to execute, deliver and perform this Fourth Amendment, (ii) the
person executing this Fourth Amendment on behalf of such Furman Selz Entity has
the appropriate authority to act on behalf of such Furman Selz Entity, (iii)
this Fourth Amendment has been duly authorized, executed and delivered by such
Furman Selz Entity and constitutes a legal, valid and binding agreement of such
Furman Selz Entity, enforceable against such Furman Selz Entity 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 Fourth Amendment. To
the best of its knowledge, each Furman Selz Entity acknowledges receipt of, and
the opportunity to review, the information that it believes necessary to make an
investment in the Fourth Amendment Convertible Notes and the Fourth Amendment
Warrants and the Depositary Shares issuable upon the conversion or exercise
thereof.
ARTICLE V
AMENDMENTS TO THE SERIES G PURCHASE AGREEMENT
SECTION 5.1 AGREEMENT OF FURMAN SELZ ENTITIES. Each of the Furman Selz
Entities, by its execution of this Fourth Amendment, hereby joins in and agrees
to be bound by and subject to the provisions of Articles VII, VIII, IX, X, XI,
XII, XIII, XIV, XV, XVI and XVII of the Series G Purchase Agreement, all as
amended from time to time in accordance with Article XIV of the Series G
Purchase Agreement, as a Purchaser or a Holder thereunder, with respect to the
Fourth Amendment Convertible Notes and the Fourth Amendment Warrants issued or
issuable to such Furman Selz Entities and the Depositary Shares issued or
issuable upon conversion or exercise thereof.
SECTION 5.2 DEFINITIONS. For purposes of Articles VII, VIII, IX, X,
XI, XII, XIII, XIV, XV, XVI and XVII of the Series G Purchase Agreement: (a) the
terms "Notes" and "Convertible Notes" shall hereby be amended to include the
Fourth Amendment Convertible Notes; (b) the term "Note Conversion Shares" shall
hereby be amended to include the Depositary Shares issued or issuable upon
conversion of the Fourth Amendment Convertible Notes; (c) the term "Warrants"
shall hereby be amended to include the Fourth Amendment Warrants; (d) the term
"Warrant Shares" shall hereby be amended to include the Depositary Shares issued
or issuable upon exercise of the Fourth Amendment Warrants; and (e) the term
"Securities" shall hereby be amended to include the Fourth Amendment Convertible
Notes and the Fourth Amendment Warrants.
SECTION 5.3 CONVERSION. Article XII of the Series G Purchase Agreement
is hereby amended as follows:
(a) Section 12.1 of Article XII is hereby amended by inserting
immediately following the definition of "Person" the following definitions:
"CONVERTIBLE NOTES" means the 8% Convertible Notes, the Third
Amendment Convertible Notes and the Fourth Amendment Convertible Notes.
"FOURTH AMENDMENT CONVERTIBLE NOTES" means the 7.5% convertible
notes issued as of October 15, 1999."
(b) Section 12.2 of Article XII is hereby deleted in its entirety and
the following paragraph is hereby inserted in lieu thereof:
"12.2 RIGHT OF CONVERSION; CONVERSION PRICE.
(a) CONVERSION TO COMMON STOCK. Any holder of Convertible Notes shall
have the right, at its option, at any time to convert, subject to the terms and
provisions of this Article XII, such Convertible Notes into shares of Common
Stock upon surrender of the Convertible Notes to be so converted, accompanied by
written notice of conversion duly executed, to the Company, and, if so required
by the Company, duly endorsed to the Company or in blank or accompanied by
proper instruments of transfer to the Company or in blank. The 8% Convertible
Notes shall be convertible at the conversion price of $4.75 per share of Common
Stock, or in case an adjustment of such price has taken place pursuant to the
provisions of this Article XII, the price as last adjusted (such price or
adjusted price being referred to herein as the "8% Note Conversion Price"). The
Third Amendment Convertible Notes shall be convertible at the conversion price
of $3.00 per share of Common Stock, or in case an adjustment of such price has
taken place pursuant to the provisions of this Article XII, the price as last
adjusted (such price or adjusted price being referred to herein as the "Third
Amendment Conversion Price"). The Fourth Amendment Convertible Notes shall be
convertible at the conversion price of $3.00 per share of Common Stock, or in
case an adjustment of such price has taken place pursuant to the provisions of
this Article XII, the price as last adjusted (such price or adjusted price being
referred to herein as the "Fourth Amendment Conversion Price," and together with
the 8% Note Conversion Price and the Third Amendment Conversion Price, the
"Conversion Price"). The number of shares of Common Stock issuable upon such
conversion shall be equal to (a) the aggregate principal amount of the
Convertible Note to be converted plus accrued but unpaid interest thereon to the
date of conversion, divided by (b) the applicable Conversion Price. Whenever the
Conversion Price in effect shall be adjusted pursuant to this Article XII, the
Company shall promptly provide to each holder of Convertible Notes a notice
stating that the Conversion Price has been adjusted and setting forth the
adjusted Conversion Price, which notice shall be signed on behalf of the Company
by the President and the Chief Financial Officer of the Company and shall set
forth in reasonable detail a calculation to the nearest cent of the Conversion
Price, the method of calculation and the facts requiring such adjustment.
(b) CONVERSION TO DEPOSITARY SHARES; CALL OPTION EXERCISE.
Notwithstanding the foregoing, from and after July 23, 1999 until the Option
Determination Date (as defined in the Depositary Agreement dated as of February
16, 1999 by and among the Company, Alpharma and State Street Bank and Trust
Company (the "Depositary Agreement")), each Convertible Note shall be
convertible into a number of depositary shares, each Depositary Share
representing one share of Common Stock of the Company subject to a call option
(a "Depositary Share"), equal to the number of shares of Common Stock that would
otherwise be issuable upon conversion of such Convertible Note. From and after
the Option Expiration Date (as defined in the Depositary Agreement), each
Convertible Note shall be convertible into Common Stock of the Company in
accordance with subclause (a) of this Section 12.2."
(c) Section 12.4 of Article XII is hereby amended by deleting Section
12.4(c) in its entirety and inserting in lieu thereof the following:
"(c) Notwithstanding Sections 12.4(a) and (b), no adjustment to
the applicable Conversion Price with respect to the Convertible Notes shall be
made in connection with the issuance of:
(i) the Securities and the securities issued or issuable upon
conversion or exercise of the Securities, or other Derivative Securities
outstanding as of June 1, 1998;
(ii) shares of Common Stock or rights, options or warrants to
acquire Common Stock issued to directors, employees or consultants of the
Company pursuant to a stock option plan, employee stock purchase plan,
restricted stock plan or other similar stock plan or agreement (and, in the case
of rights, options, or warrants, the Common Stock issued or issuable upon
exercise thereof) and approved by the Board of Directors;
(iii) the Direct Purchase Shares and the shares of Common Stock
issuable pursuant to the letter agreement dated February 16, 1999 among the
Company and FS Private Investments LLC;
(iv) the Third Amendment Convertible Notes and the associated
Third Amendment Warrants and the shares of Common Stock issued or issuable upon
conversion or exercise thereof; and
(v) the Fourth Amendment Convertible Notes and the associated
Fourth Amendment Warrants and the securities issued or issuable upon conversion
or exercise thereof."
SECTION 5.4 SECURED LOANS. Article VIII of the Series G Purchase
Agreement is hereby amended as follows:
(a) Section 8.2 of Article VIII is hereby amended by adding the
following clause to the beginning of the first sentence thereof:
"Except for any security interest in the Collateral with respect
to Secured Loans or Fourth Amendment Secured Loans".
(b) Section 8.12 of Article VIII is hereby amended by deleting clause
(iii) in its entirety and replacing it with the following:
"(iii) securities permitted by Section 8.1(g) of the Loan
Agreement."
(c) Section 8.15 of Article VIII is hereby amended by adding the
following definitions:
"SECURED LOANS" means all Project Loans and all Screened
Project Loans (each as defined in the Second Supplemental
Agreement dated October 15, 1999 by and between the Company,
Alpharma USPD Inc., Alpharma Inc., State Street Bank and Trust
Company and the Purchasers).
"COLLATERAL" means all assets, properties, contract rights
and other intangibles and choses in action purchased, licensed or
otherwise acquired by the Company with the proceeds of a Secured
Loan.
"FOURTH AMENDMENT SECURED LOANS" means all Fourth Amendment
Advances (as defined in the Fourth Amendment dated as of October
15, 1999 (the "Fourth Amendment") to this Agreement) to the
extent that such Fourth Amendment Advances are secured by
Collateral pursuant to the terms of the Fourth Amendment."
ARTICLE VI
OTHER AGREEMENTS, WAIVERS AND CONSENTS
SECTION 6.1 SENIORITY OF NOTES. The Furman Selz Entities hereby agree
that the 7.5% Convertible Subordinated Note in the aggregate principal amount of
up to $40,000,000 (the "Alpharma Convertible Note") issued by the Company on
February 19, 1999 to Alpharma pursuant to the Loan Agreement dated as of
February 16, 1999 by and among the Company, Alpharma and Alpharma Inc., as
amended (the "Alpharma Loan Agreement"), shall rank pari passu in right of
payment with the Fourth Amendment Convertible Notes, the Third Amendment
Convertible Notes, the Subordinated Notes and the Convertible Notes issuable
upon exchange of the Preferred Stock, except as otherwise provided in the
Subordination Agreement dated as of February 16, 1999 among the Company, the
Purchasers and Alpharma, as amended (the "Subordination Agreement").
SECTION 6.2 CONSENT TO ISSUANCE OF THE FOURTH AMENDMENT CONVERTIBLE
NOTES AND FOURTH AMENDMENT WARRANTS. The Purchasers hereby consent, in all
respects under the Series G Purchase Agreement, including without limitation
under Sections 8.1 and 8.7, to the consummation of the transactions contemplated
by this Fourth Amendment, including without limitation the issuance of the
Fourth Amendment Convertible Notes and the Fourth Amendment Warrants.
SECTION 6.3 RIGHTS OF FIRST REFUSAL. The Purchasers hereby waive any
rights of first refusal held by the Purchasers under Section 7.7 of the Series G
Purchase Agreement which were, are or may be applicable to (i) the issuance of
the Fourth Amendment Convertible Notes and the Depositary Shares issuable upon
the conversion thereof and (ii) the issuance of the Fourth Amendment Warrants
and the Depositary Shares issuable upon the exercise thereof.
SECTION 6.4 ANTIDILUTION ADJUSTMENT. The Purchasers hereby agree that
no adjustment shall be made to the Conversion Price of the Convertible Notes
under Section 12.4 of the Purchase Agreement or the Warrant Price and the
Warrant Shares under Article III of the Warrants or under Article III of the
Third Amendment Warrants with respect to (i) the issuance of the Fourth
Amendment Convertible Notes and the Depositary Shares issuable upon the
conversion thereof and (ii) the issuance of the Fourth Amendment Warrants and
the Depositary Shares issuable upon the exercise thereof.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 THE SERIES G PURCHASE AGREEMENT. Except as amended by this
Fourth Amendment, the Series G Purchase Agreement shall remain in full force and
effect in accordance with its terms. This Fourth Amendment shall be deemed to be
included in the Series G Purchase Agreement as defined above.
SECTION 7.2 GOVERNING LAW. The rights and obligations of the parties
under or pursuant to this Fourth Amendment shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 7.3 EXPENSES. The Company will pay all reasonable legal fees
and disbursements of counsel for the Furman Selz Entities incurred with respect
to the negotiation, execution and consummation of this Fourth Amendment and the
transactions contemplated by this Fourth Amendment.
SECTION 7.4 REFERENCES TO SERIES G PURCHASE AGREEMENT. Whenever in any
certificate, letter, notice or other instrument reference is made to the Series
G Purchase Agreement, such reference without more shall include this Fourth
Amendment.
SECTION 7.5 AMENDMENTS TO ALPHARMA AGREEMENTS. No amendment to the
Alpharma Loan Agreement or any of the Ancillary Agreements shall have the effect
of changing the meaning of any provision of this Fourth Amendment or the Series
G Purchase Agreement without the consent of the Purchasers (and permitted
assignees of the Purchasers) in accordance with Article XIV of the Series G
Purchase Agreement.
SECTION 7.6 COUNTERPARTS. This Fourth Amendment may be executed
simultaneously in counterparts, each of which shall be deemed an original, and
it shall not be necessary in making proof of the contents of this Fourth
Amendment to produce or account for more than one such counterpart.
SECTION 7.7 EFFECTIVENESS. This Fourth Amendment to the Series G
Purchase Agreement shall be effective on the date hereof.
SECTION 7.8 DEPOSITARY SHARE CONVERSION. From and after the Option
Expiration Date, the term Depositary Shares as used herein shall be deemed to
include the shares of Common Stock issuable upon the exchange of the Depositary
Shares upon expiration of the Call Option (as defined in the Depositary
Agreement).
<PAGE>
IN WITNESS WHEREOF this Fourth Amendment has been executed by duly
authorized representatives of the parties hereto on the day, month and year
first above written.
ASCENT PEDIATRICS, INC.
By:
-------------------------------
Name: Alan R. Fox
Title: President and
Chief Executive Officer
FURMAN SELZ INVESTORS II L.P.
FS EMPLOYEE INVESTORS LLC
FS PARALLEL FUND L.P.
By: FS PRIVATE INVESTMENTS LLC,
MANAGER
By:
------------------------------
Name: James L. Luikart
Title: Managing Member
BANCBOSTON VENTURES INC.
By:
-----------------------------
Name: Marcia T. Bates
Title: Managing Director
FLYNN PARTNERS
By:
----------------------------
Name: James E. Flynn,
General Partner
Flynn Partners
<PAGE>
Exhibit A
FORM OF 7.5% CONVERTIBLE SUBORDINATED NOTE DUE JULY 1, 2004
THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS AND MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
$_________ OCTOBER 15, 1999
WILMINGTON, MASSACHUSETTS
FOR VALUE RECEIVED, ASCENT PEDIATRICS, INC., a Delaware corporation
(the "undersigned"), hereby promises to pay to the order of ____________, or
registered assigns, the principal amount of _______________ Dollars
($__________), or if less, the aggregate unpaid amount of all Advances made to
the undersigned under the Fourth Amendment (as defined below), on July 1, 2004,
and to pay interest from the date hereof (computed on the basis of a 360-day
year of twelve 30-day months) on the unpaid principal amount outstanding hereof
at the rate of 7.5% per annum until the unpaid principal amount outstanding
hereunder shall become due and payable, and to pay, on demand, interest on any
overdue principal, including any overdue prepayment of principal and premium, if
any, at the rate of 12% per annum.
SCHEDULE A attached hereto and incorporated herein by reference
records (i) the date and amount of each Advance hereunder and (ii) the date and
amount of any principal and interest payments made by the Company hereunder;
provided however that any failure to endorse such information on such Schedule
or continuation thereof shall not in any manner affect the obligation of the
Company to make payments of principal and interest in accordance with the terms
of this Note.
Payments of principal, premium, if any, and interest shall be made to
the registered holder hereof in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, at the office of the Company at 187 Ballardvale
Street, Suite B125, Wilmington, Massachusetts 01887, subject to the right of the
registered holder hereof under the Fourth Amendment to receive direct payment in
immediately available funds.
Accrued interest shall be paid by the undersigned quarterly on March
31, June 30, September 30 and December 31 of each year, commencing on December
31, 1999.
If any amounts under this Note become due and payable on a Saturday or
Sunday or a day on which banks in the State of New York or the Commonwealth of
Massachusetts are authorized by law to remain closed, such amounts shall be paid
on the next succeeding day that such banks shall be open for business.
This Note has been issued pursuant to, and is one of a series of notes
(the "Fourth Amendment Convertible Notes") issued pursuant to the Fourth
Amendment dated as of October 15, 1999 (the "Fourth Amendment") to the
Securities Purchase Agreement dated as of May 13, 1998 between the undersigned
and the Purchasers named therein, as amended (such Securities Purchase
Agreement, as amended on September 30, 1998, February 16, 1999 and July 1, 1999
and by the Fourth Amendment being referred to herein as the "Purchase
Agreement"). This Note is subject to and entitled to the benefits of all of the
provisions of the Purchase Agreement. Capitalized terms herein are used as
defined in the Purchase Agreement unless otherwise defined herein.
This Note may be redeemed by either the undersigned or the holder as
provided in Article IX of the Purchase Agreement. This Note may, or in certain
circumstances, shall automatically, be converted into Depositary Shares or other
securities of the Company in accordance with Section 12.2 of the Purchase
Agreement.
This Note is a general unsecured obligation of the undersigned and is
subordinated to all Senior Indebtedness in accordance with Article XI of the
Purchase Agreement and, as provided under Article XI, in certain circumstances,
to Senior Indebtedness under the Subordination Agreement dated as of February
16, 1999 among the Company, Alpharma USPD Inc. and the Original Lenders named
therein, as amended. Upon the occurrence of any one or more Events of Default,
all amounts then remaining unpaid on this Note may be declared to be immediately
due and payable subject to and as provided in the Purchase Agreement.
This Note may be amended and the provisions hereof may be waived only
in accordance with Article XIV of the Purchase Agreement.
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, ASCENT PEDIATRICS, INC. has caused this Note to be
duly executed.
ASCENT PEDIATRICS, INC.
(CORPORATE SEAL)
ATTEST: By:
----------------------
Name:
Title:
- -------------------------
Name:
Title: Secretary
<PAGE>
Exhibit B
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
VOID AFTER 5:00 P.M., NEW YORK TIME, ON OCTOBER 15, 2006, OR IF NOT A BUSINESS
DAY, AS DEFINED HEREIN, AT 5:00 P.M., NEW YORK TIME, ON THE NEXT FOLLOWING
BUSINESS DAY.
WARRANT TO PURCHASE
_________ DEPOSITARY SHARES
WARRANT TO PURCHASE DEPOSITARY SHARES
OF
ASCENT PEDIATRICS, INC.
--------------------------
This certifies that, for value received, ____________ or registered
assigns ("Warrantholder"), is entitled to purchase from Ascent Pediatrics, Inc.,
a Delaware corporation (the "Company"), subject to the terms set forth below, at
any time prior to the Expiration Date, after which time this Warrant shall
become void, _________ Warrant Shares at the Warrant Price. The Warrant Price
and the number of Warrant Shares purchasable hereunder are subject to adjustment
from time to time as provided herein.
This Warrant is one of a series of warrants (the "Warrants")
evidencing the right to purchase Depositary Shares of the Company issued
pursuant to a certain Fourth Amendment (the "Fourth Amendment"), dated as of
October 15, 1999, to the Series G Securities Purchase Agreement, dated as of May
13, 1998, by and between the Company and the persons named therein, as amended
(such Securities Purchase Agreement, as amended on September 30, 1998, February
16, 1999 and July 1, 1999 and by the Fourth Amendment being referred to herein
as the "Purchase Agreement"), copies of which Purchase Agreement are on file at
the principal office of the Company, and the holder of this Warrant shall be
entitled to all of the benefits of and be bound by all of the applicable
obligations of the Purchase Agreement, as provided therein.
ARTICLE I
DEFINED TERMS
Section 1.1. DEFINITION OF TERMS. As used in this Warrant, the
following capitalized terms shall have the following respective meanings:
(a) "Business Day" shall mean a day other than a Saturday, Sunday or
other day on which banks in the State of New York or the Commonwealth of
Massachusetts are authorized by law to remain closed.
(b) "Convertible Notes" shall mean the 7.5% Convertible Subordinated
Notes due July 1, 2004 issued pursuant to the Third Amendment dated as of July
1, 1999 to the Purchase Agreement, the 7.5% Convertible Subordinated Notes due
July 1, 2004 issuable pursuant to the Fourth Amendment and the 8.0% Convertible
Subordinated Notes issued on July 23, 1999 pursuant to the Purchase Agreement.
(c) "Common Stock" shall mean the Common Stock, $.00004 par value per
share, of the Company.
(d) "Closing Price" shall mean, with respect to any day, the last
reported sales price of the Depositary Shares, regular way, or in case no sale
takes place on such day, the average of the reported closing bid and asked
prices of the Depositary Shares, regular way, in either case as reported on the
principal national securities exchange on which the Depositary Shares is listed
or admitted to trading or, if the Depositary Shares are not listed or admitted
to trading on any national securities exchange, but is traded in the
over-the-counter market, the closing sale price of the Depositary Shares or in
case no sale is publicly reported, the average of the representative closing bid
and asked quotations for the Depositary Shares on the Nasdaq National Market,
or, if bid and asked prices for such day shall not have been reported on The
Nasdaq Stock Market, the average of the bid and asked prices for the Depositary
Shares as furnished by any New York Stock Exchange, Inc. member firm regularly
making a market in the Depositary Shares and selected for such purpose by the
Board of Directors of the Company.
(e) "Depositary Shares" means the depositary shares of the Company
issued pursuant to the Depositary Agreement dated as of February 16, 1999 by and
among the Company, Alpharma USPD Inc. and State Street Bank and Trust Company,
as amended (the "Depositary Agreement"), each Depositary Share representing one
share of Common Stock of the Company subject to a call option and represented by
a depositary receipt.
(f) "Expiration Date" shall mean the earlier of (a) October 15, 2006,
or if such day is not a Business Day, the next succeeding day which is a
Business Day.
(g) "Fair Market Value" with respect to the date of any exercise by
the Warrantholder of all or a portion of this Warrant, shall mean the average
daily Closing Price of the Depositary Shares, as applicable, for thirty (30)
consecutive trading days commencing forty-five (45) days before the date of such
exercise by the Warrantholder of all or a portion of this Warrant, PROVIDED,
HOWEVER, that where no public market exists for the Depositary Shares at the
time of the exercise of all or a portion of this Warrant, the fair market value
per share shall be determined by the Company's Board of Directors in good faith.
(h) "Fourth Amendment" shall mean the Fourth Amendment, dated as of
October 15, 1999, to the Purchase Agreement.
(i) "Person" shall mean any individual, corporation, association,
company, business trust, partnership, limited liability company, joint venture,
joint-stock company, trust, unincorporated organization, association or any
other entity or government or any agency or political subdivision thereof.
(j) "Purchase Agreement" shall mean that certain Securities Purchase
Agreement, dated as of May 13, 1998, among the Company and the persons named
therein, as amended.
(k) "Related Person" of any Person means any other Person directly or
indirectly owning (A) twenty percent (20%) or more of the outstanding common
stock of such Person (or, in the case of a Person that is not a corporation,
twenty percent (20%) or more of the equity interest in such Person) or (B)
twenty percent (20%) or more of the combined voting power of the voting capital
stock of such Person.
(l) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(m) "Subordinated Notes" shall mean the Company's 8% Subordinated
Notes due 2005 issued pursuant to the Purchase Agreement.
(n) "Third Amendment" shall mean the Third Amendment, dated as of July
1, 1999, to the Purchase Agreement.
(o) "Warrant Price" shall mean Three Dollars ($3.00) per Warrant
Share, as such price may be adjusted from time to time pursuant to Article III
hereof.
(p) "Warrant Shares" shall mean the Depositary Shares purchasable upon
exercise of this Warrant.
ARTICLE II
DURATION AND EXERCISE OF WARRANT
Section 2.1. EXERCISE OF WARRANT. The Warrantholder may exercise this
Warrant, in whole or in part, by presentation and surrender of this Warrant at
the address of the Company set forth in Section 4.6 hereof or at such other
address as the Company may designate by notice in writing to the Warrantholder
with the Subscription Form annexed hereto duly executed, accompanied by payment
of the Warrant Price for each Warrant Share purchased. Upon receipt thereof, the
Company shall cause to be issued certificates for the Warrant Shares so
purchased in such denominations as are requested for delivery to the
Warrantholder. Such certificates shall be delivered as promptly as practicable
to the Warrantholder. Upon any partial exercise of this Warrant, the Company
shall execute and deliver a new Warrant of like tenor and date for the balance
of the Warrant Shares purchasable hereunder. Upon exercise, the Warrantholder
shall be deemed to be the holder of record of Depositary Shares issuable upon
such exercise, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such Depositary Shares
shall not then be actually delivered to the Warrantholder. If at the time this
Warrant is exercised, a registration statement is not in effect to register
under the Securities Act the Warrant Shares issuable upon exercise of this
Warrant, the Company may require the Warrantholder to make such representations,
and may place such legends on certificates representing the Warrant Shares, as
may be reasonably required to permit the Warrant Shares to be issued without
such registration. The Company shall pay any and all stock transfer and similar
taxes which may be payable in respect of the issue of the Warrant or in respect
of the issue of any of the Warrant Shares, except the Company shall not pay such
transfer taxes if the Warrant Shares are issued to a Person other than the
Warrantholder.
Section 2.2. RESERVATION OF SHARES. The Company hereby agrees that at
all times there shall be reserved for issuance and delivery upon exercise of
this Warrant such number of Depositary Shares or other shares of capital stock
of the Company as may be from time to time issuable upon exercise of this
Warrant. All such shares shall be duly authorized, and when issued upon such
exercise, shall be validly issued, fully paid and nonassessable, free and clear
of all liens, security interests, charges and other encumbrances or
restrictions, other than those restrictions imposed by the Securities Act of
1933, and free and clear of all preemptive and similar rights.
Section 2.3. FRACTIONAL SHARES. The Company shall not be required to
issue any fraction of a Depositary Share in connection with the exercise of this
Warrant, and in any case where the Warrantholder would, except for the
provisions of this Section 2.3, be entitled under the terms of this Warrant to
receive a fraction of a share upon the exercise of this Warrant, the Company
shall, upon the exercise of this Warrant and receipt of the Warrant Price (as
adjusted to cover the balance of the share), issue the largest number of whole
shares purchasable upon exercise of this Warrant, but in no event shall the
Company issue more than such number of Depositary Shares as are issuable
pursuant to the exercise of this Warrant. The Company shall not be required to
make any cash or other adjustment in respect of such fraction of a share to
which the Warrantholder would otherwise be entitled.
Section 2.4. PAYMENT FOR WARRANT SHARES.
(a) Payment of the aggregate Warrant Price for Warrant Shares to be
purchased upon exercise of all or a portion of this Warrant shall be made in
full by delivery to the Company, at its address set forth in Section 4.6 hereof
or at such other address as the Company may designate by notice in writing to
the Warrantholder, of a certified or bank cashier check or by wire transfer to
an account in the United States designated by the Company.
(b) Payment of the aggregate Warrant Price may also be made in full by
(i) delivery to the Company of Convertible Notes plus accrued interest thereon,
in an aggregate principal amount equal to the aggregate Warrant Price, (ii)
delivery to the Company of Subordinated Notes plus accrued interest thereon, in
an aggregate principal amount equal to the aggregate Warrant Price or (iii) a
combination of cash (payable by wire transfer or certified or bank check),
Convertible Notes or Subordinated Notes beneficially owned by such Warrantholder
and such accumulated dividends or accrued interest, as the case may be, in an
aggregate principal amount equal to the aggregate Warrant Price. Any Convertible
Notes or Subordinated Notes surrendered for exchange hereunder shall be, if so
required by the Company, accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company duly delivered by the
Warrantholder.
(c) Notwithstanding any provisions herein to the contrary, if the Fair
Market Value of one Depositary Share is greater than the Warrant Price (at the
date of calculation as set forth below), in lieu of exercising this Warrant for
cash, the Warrantholder may elect to receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof, which portion shall
be canceled) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Subscription Form annexed hereto and notice
of such election in which event the Company shall issue to the Warrantholder a
number of Depositary Shares computed using the following formula:
X = Y(A-B)
------
A
Where X = the number of Depositary Shares to be
issued to the Warrantholder
Y = the number of Depositary Shares purchasable
under the Warrant or, if only a portion of
the Warrant is being exercised, the portion
of the Warrant being canceled (at the date
of such calculation)
A = the Fair Market Value of one Depositary
Share (at the date of such calculation)
B = Warrant Price (as adjusted to the date of
such calculation)
ARTICLE III
ADJUSTMENT OF WARRANT PRICE OR WARRANT SHARES
Section 3.1. ADJUSTMENT OF WARRANT PRICE.
(a) Except as hereinafter provided, in case the Company shall at any
time after the date hereof issue or sell any obligations or Depositary Shares,
for a consideration per share less than the Warrant Price in effect immediately
prior to the issuance or sale of such shares, or without consideration, then,
and thereafter successively upon each issuance or sale, the Warrant Price in
effect immediately prior to each such issuance or sale shall forthwith be
reduced to a price determined by dividing (i) an amount equal to (X) the total
number of Depositary Shares outstanding immediately prior to such issuance or
sale multiplied by the Warrant Price in effect immediately prior to such
issuance or sale, plus (Y) the consideration, if any, received by the Company
upon such issuance or sale, by (ii) the total number of Depositary Shares
outstanding immediately after such issuance or sale.
For the purposes of any computation to be made in accordance with the
provisions of this paragraph (a), the following shall be applicable:
(i) In case of the issuance or sale of Depositary Shares for a
consideration part or all of which shall be cash, the amount of the cash
consideration therefor shall be deemed to be the amount of cash received by the
Company for such shares (or, if such Depositary Shares are offered by the
Company for subscription, the subscription price, or, if Depositary Shares shall
be sold to underwriters or dealers for public offering without a subscription
offering, the public offering price) before deducting therefrom any commissions
or other expenses paid or incurred by the Company for any underwriting of, or
otherwise in connection with the issuance of such shares;
(ii) In case of the issuance or sale of Depositary Shares for a
consideration part or all of which shall be other than cash (otherwise than as a
dividend or other distribution on any Depositary Shares of the Company or on
conversion, exercise or exchange of other securities of the Company or upon
acquisition of the assets or securities of another company or upon merger or
consolidation with another entity), the amount of consideration therefor other
than cash shall be the value of such consideration as of the date of the
issuance or sale of the Depositary Shares, irrespective of accounting treatment,
but as determined by the Board of Directors of the Company in good faith. The
reclassification of securities other than Depositary Shares into Depositary
Shares shall be deemed to involve the issuance for a consideration other than
cash of such Depositary Shares immediately prior to the close of business on the
date fixed for the determination of security holders entitled to receive such
Depositary Shares;
(iii) In case of the issuance of Depositary Shares upon
conversion or exchange of any obligations or of any securities of the Company
that shall be convertible into or exchangeable for Depositary Shares or upon the
exercise of rights or options to subscribe for or to purchase Depositary Shares
(other than upon exercise of this Warrant), the amount of consideration received
by the Company for such Depositary Shares shall be deemed to be the sum of (A)
the amount of the consideration received by the Company upon the original
issuance of such obligations, shares, rights or options, as the case may be,
plus (B) the consideration, if any, other than such obligations, shares, rights
or options, received by the Company upon such conversion, exchange, or exercise
except in adjustment of interest and dividends. The amount of the consideration
received by the Company upon the original issuance of the obligations, shares,
rights or options so converted, exchanged or exercised and the amount of the
consideration, if any, other than such obligations, shares, rights or options,
received by the Company upon such conversion, exchange or exercise shall be
determined in the same manner provided in subparagraphs (i) and (ii) above with
respect to the consideration received by the Company in case of the issuance of
Depositary Shares; if such obligations, shares, rights or options shall have
been issued as a dividend upon any securities of the Company, the amount of the
consideration received by the Company upon the original issuance thereof shall
be deemed to be zero. In case of the issuance of Warrant Shares upon exercise of
this Warrant, the Company shall be deemed to have received the Warrant Price
then in effect as the consideration for each Depositary Share so issued;
(iv) Depositary Shares issuable by way of dividend or other
distribution on any securities of the Company shall be deemed to have been
issued and to be outstanding at the close of business on the record date fixed
for the determination of security holders entitled to receive such dividend or
other distribution and shall be deemed to have been issued without
consideration. Depositary Shares issued otherwise than as a dividend, shall be
deemed to have been issued and to be outstanding at the close of business on the
date of issue;
(v) The number of Depositary Shares at any time outstanding shall
not include any shares then owned or held by or for the account of the Company,
but shall include the aggregate number of shares deliverable in respect of
options, rights and exercisable, convertible and exchangeable securities at all
times while such options, rights or securities remain outstanding and
unexercised, unconverted or unexchanged, as the case may be; and
(vi) No adjustment shall be made to the Warrant Price in effect
upon conversion or exchange of (i) securities convertible or exercisable or
exchangeable for Depositary Shares or for other securities that are subsequently
exercisable for Depositary Shares that are outstanding as of the date of the
Fourth Amendment, or (ii) any obligations or any securities of the Company that
shall be convertible into or exercisable or exchangeable for Depositary Shares
or upon the exercise of rights or options to subscribe for or to purchase
Depositary Shares for which an adjustment in the Warrant Price has previously
been made in accordance with paragraph (b) of this Section 3.1.
(vii) In the event that any payment is made to the holders of
warrants issued pursuant to the Securities Purchase Agreement dated as of
January 31, 1997 among the Company, Triumph Connecticut Limited Partnership and
the other purchasers named therein pursuant to Section 8.3(b) (or successor
provision) of such Securities Purchase Agreement which does not result in a
modification pursuant to Section 3.4, the Company shall be deemed to have issued
without consideration as of the date of the event giving rise to such payment a
number of Depositary Shares equal to the amount of such payment divided by the
Closing Price on the date of such event.
(b) In case the Company shall at any time after the date hereof issue
options or rights to subscribe for Depositary Shares, or issue any obligations
or securities convertible into or exchangeable for Depositary Shares, otherwise
than as contemplated by Section 3.1(a)(vi) or pursuant to Section 3.3 hereof,
for a consideration per share less than the Warrant Price in effect immediately
prior to the issuance of such options or rights or convertible or exchangeable
securities, or without consideration, the Warrant Price in effect immediately
prior to the issuance of such options or rights or securities shall be reduced
to a price determined by making a computation in accordance with the provisions
of paragraph (a) of this Section 3.1, provided that:
(i) the aggregate maximum number of Depositary Shares deliverable
under such options or rights shall be considered to have been delivered at the
time such options or rights were issued, and for a consideration equal to the
minimum purchase price per Depositary Share provided for in such options or
rights, plus the consideration (determined in the same manner as consideration
received on the issue or sale of Depositary Shares), if any, received by the
Company for such options or rights;
(ii) the aggregate maximum number of Depositary Shares
deliverable upon conversion of or exchange for any such obligations or
securities shall be considered to have been delivered at the time of issuance of
such securities, and for a consideration equal to the consideration (determined
in the same manner as consideration received on the issue or sale of Depositary
Shares) received by the Company for such securities, plus the consideration, if
any, to be received by the Company upon the exchange or conversion thereof; and
(iii) on the expiration of such options or rights, or an increase
in the minimum exercise price thereof, or a decrease in the maximum number of
Depositary Shares deliverable upon exercise or conversion of such options,
rights or convertible or exchangeable securities pursuant to the terms thereof
(and not as a result of exercise or conversion), or the termination of such
right to convert or exchange, the Warrant Price in effect shall forthwith be
readjusted to such Warrant Price as would have obtained (A) in the case of the
expiration or termination of options or rights or the termination of the right
to convert or exchange convertible or exchangeable securities, had no
adjustments been made upon the issuance of such options, rights or convertible
or exchangeable securities, or (B) in the case of an increase in the minimum
exercise price thereof, or a decrease in the maximum number of shares
deliverable thereunder, had the adjustments made upon the issuance of such
options, rights or convertible or exchangeable securities been made upon the
basis of the delivery of only the number of Depositary Shares (A) actually
deliverable upon the exercise of such options or rights or upon conversion or
exchange of such securities, or (B) deliverable by reason of such increase in
price or decrease in number of shares.
(c) No adjustment to the Warrant Price shall be made in connection
with the issuance of:
(i) the Convertible Notes, the Warrants issued pursuant to the
Third Amendment, the Warrants issued pursuant to the Fourth Amendment, the
Warrants issued pursuant to the Purchase Agreement and the New Warrants, as such
term is defined in the Purchase Agreement (together, the "Convertible
Securities"), and the securities issued or issuable upon conversion or exercise
of the Convertible Securities, or other currently outstanding securities that
are convertible, exercisable or exchangeable for Depositary Shares; and
(ii) Depositary Shares or rights, options or warrants to acquire
Depositary Shares issued to directors, employees or consultants of the Company
pursuant to a stock option plan or agreement (and, in the case of rights,
options, or warrants, the Depositary Shares issued or issuable upon exercise
thereof) and approved by the Board of Directors;
(d) In case the Company shall at any time after the date hereof
subdivide or combine the outstanding Depositary Shares, the Warrant Price in
effect shall forthwith be proportionately decreased in the case of the
subdivision or proportionately increased in the case of combination to the
nearest one cent. Any such adjustment shall become effective at the close of
business on the date that such subdivision or combination shall become
effective.
(e) No adjustment to the Warrant Price shall be made in connection
with the conversion of all outstanding Depositary Shares into shares of Common
Stock on the Option Expiration Date (as defined in the Depositary Agreement)
pursuant to the terms of the Depositary Agreement.
Section 3.2. ADJUSTMENT OF WARRANT SHARES. In the event of an
adjustment of the Warrant Price, the number of Depositary Shares (or
reclassified or recapitalized stock) issuable upon exercise of this Warrant
after such adjustment shall be equal to the number determined by multiplying the
number of Depositary Shares issuable upon exercise of this Warrant immediately
prior to such adjustment by a fraction, of which the numerator is the Warrant
Price in effect immediately prior to such adjustments, and the denominator is
the Warrant Price in effect immediately after such adjustment.
Section 3.3. DIVIDENDS AND DISTRIBUTIONS. In the event that the
Company shall at any time after the date hereof pay any dividend (other than in
Depositary Shares) on, or make any distribution of its assets upon or with
respect to, the Depositary Shares, or in the event that the Company shall offer
options or rights to subscribe for Depositary Shares, or issue any securities
convertible into or exchangeable for Depositary Shares, to all of its holders of
Depositary Shares, then on the record date for such payment, distribution or
offer or, in the absence of a record date, on the date of such payment,
distribution or offer, the Warrantholder shall receive what the Warrantholder
would have received had it exercised this Warrant in full immediately prior to
the record date of such payment, distribution or offer or, in the absence of a
record date, immediately prior to the date of such payment, distribution or
offer.
Section 3.4. MERGERS, CONSOLIDATIONS, RECLASSIFICATIONS. In the case
of any reorganization or reclassification of the outstanding Depositary Shares
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination) or in
the case of any consolidation of the Company into, or merger of the Company with
another corporation in which it is not the surviving entity (or it is the
surviving entity, but its Depositary Shares become shares of another
corporation), or in the case of any sale, lease or conveyance of all, or
substantially all, of the property, assets, business and goodwill of the Company
as an entirety, the Warrantholder shall thereafter have the right upon exercise
of this Warrant to receive the kind and amount of shares of stock and other
securities, cash and property receivable upon such reorganization,
reclassification, consolidation, merger or disposition by a holder of the number
of Depositary Shares which the Warrantholder would have received had it
exercised this Warrant immediately prior to such reorganization,
reclassification, consolidation, merger or disposition, at a price equal to the
aggregate Warrant Price then in effect for exercising this Warrant in full (the
kind, amount and price of such stock and other securities to be subject to
adjustment as herein provided); provided, however, that the kind and amount of
such shares of stock and other securities, cash and other property shall be
determined as if any payment made to the holders of warrants issued pursuant to
the Securities Purchase Agreement dated as of January 31, 1997 among the
Company, Triumph Connecticut Limited Partnership and the other purchasers named
therein upon such reorganization, reclassification, consolidation, merger or
disposition in excess of the amount such holders would otherwise have been
entitled to receive under the terms of such warrants without regard to Section
8.3(b) (or successor provision) of such Securities Purchase Agreement had not
been made. The foregoing provisions of this Section 3.4 shall similarly apply to
successive reorganizations, reclassifications, consolidations, mergers and
dispositions.
Section 3.5. NOTICE OF ADJUSTMENT. Whenever the Warrant Price or the
number of Warrant Shares shall be adjusted pursuant to the provisions of Article
III, the Company shall prepare and deliver forthwith to the Warrantholder a
certificate signed by the President of the Company and by its Chief Financial
Officer, setting forth the adjusted number of Warrant Shares purchasable upon
the exercise of this Warrant and the Warrant Price calculated to the nearest
cent and setting forth in reasonable detail the method of calculation and the
facts requiring such adjustment and upon which such calculation is based.
Section 3.6. NOTICE OF CERTAIN CORPORATE ACTION. In case at any time:
(A) the Company shall declare any dividend (or any other
distributions) on Depositary Shares; or
(B) the Company shall authorize the granting to all holders of
its Depositary Shares of rights to subscribe for or purchase
any shares of stock of any class or of any other rights; or
(C) there shall be any reclassification of the Depositary Shares
or capital stock of the Company; or
(D) there shall be any capital reorganization by the Company; or
(E) there shall be any (i) consolidation or merger involving the
Company, other than the merger contemplated by the Merger
Agreement, or (ii) sale, transfer or other disposition of
all or substantially all of the Company property, assets or
business (except a merger or other reorganization in which
the Company shall be the surviving corporation and its
shares of capital stock shall continue to be outstanding and
unchanged and except a consolidation, merger, sale, transfer
or other disposition involving a wholly-owned subsidiary);
or
(F) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company or any partial
liquidation of the Company or distribution to holders of
Depositary Shares;
then, in each of such cases, the Company shall give written notice to the
Warrantholder of the date on which (i) the books of the Company shall close or a
record date shall be fixed for such dividend, distribution or subscription
rights or (ii) such reorganization, reclassification, consolidation, merger,
disposition, dissolution, liquidation or winding-up, as the case may be, shall
take place. Such notice also shall specify the date as of which the holders of
Depositary Shares of record shall participate in such dividend, distribution or
subscription rights, or shall be entitled to exchange their depositary receipts
for Depositary Shares for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be. Such notice shall be
given at least twenty (20) days prior to the action in question and not less
than twenty (20) days prior to the record date or the date on which the Company
transfer books are closed in respect thereto.
Section 3.7. ADJUSTMENT FOR EXPIRATION OF CALL OPTION. From and after
the Option Expiration Date, this Warrant shall be exercisable into a number of
shares of Common Stock of the Company equal to the number of shares of Common
Stock that the Warrantholder would have received upon the exchange of the
Depositary Shares that the Warrantholder would have received had it exercised
this Warrant in full immediately prior to the Option Expiration Date. From and
after the Option Expiration Date, all references herein to Depositary Shares
shall be deemed to include the Common Stock of the Company.
Section 3.8. FORM OF WARRANT AFTER ADJUSTMENTS. The form of this
Warrant need not be changed because of any adjustments in the Warrant Price or
the number or kind of the Warrant Shares.
ARTICLE IV
MISCELLANEOUS
Section 4.1. SUCCESSORS AND ASSIGNS; TRANSFERS.
(a) The terms of this Warrant shall be binding upon, inure to the
benefit of and be enforceable by and against any successors or assigns of the
Company and of the Warrantholder; PROVIDED, HOWEVER, that the Company may not
assign its rights or obligations hereunder.
(b) Subject to the provisions of paragraph (f) below and Section 17.3
of the Purchase Agreement, this Warrant and all rights hereunder are
transferable by the Warrantholder, in whole or in party, upon surrender of this
Warrant with a properly executed assignment at the principal office of the
Company.
(c) Any transferee to whom rights hereunder are transferred shall, as
a condition to such transfer, deliver to the Company a written instrument by
which such transferee agrees to be bound by the obligations imposed upon the
Warrantholder under this Warrant to the same extent as if such transferee was
the Warrantholder.
(d) The Company will maintain a register containing the names and
addresses of the Warrantholders of the Warrants. Any Warrantholder may change
its or his address as shown on the warrant register by written notice to the
Company requesting such change.
(e) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Warrantholder as the absolute owner hereof
for all purposes; provided, however, that if and when this Warrant is properly
assigned in blank, the Company may (but shall not be obligated to) treat the
bearer hereof as the absolute owner hereof for all purposes, notwithstanding any
notice to the contrary.
(f) This Warrant and the Warrant Shares shall not be sold or
transferred unless either (i) they first shall have been registered under the
Securities Act or (ii) the Company first shall have been furnished with an
opinion of legal counsel, reasonably satisfactory to the Company, to the effect
that such sale or transfer is exempt from the registration requirements of the
Securities Act.
(g) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may
not be offered, sold or otherwise transferred, pledged or
hypothecated unless and until such securities are registered
under such Act or an opinion of counsel reasonably satisfactory
to the Company is obtained to the effect that such registration
is not required."
The foregoing legend shall be removed from the certificates
representing any Warrant Shares, at the request of the holder thereof, at such
time as they become eligible for resale pursuant to Rule 144(k) under the
Securities Act.
Section 4.2. RIGHTS AS STOCKHOLDER. Except as provided herein, the
Warrantholder, as such, shall not be entitled to vote or be deemed to be a
stockholder of the Company for any purpose, nor shall anything contained in this
Warrant be construed to confer upon the Warrantholder, as such, any rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action or receive notice of meetings.
Section 4.3. ACCEPTANCE BY WARRANTHOLDER. Receipt of this Warrant by
the Warrantholder shall constitute acceptance of an agreement to the foregoing
terms and conditions.
Section 4.4. GOVERNING LAW. This Warrant and the rights of the parties
hereunder shall be governed in all respects by the laws of the State of New
York, without giving effect to the provisions thereof relating to conflicts of
law.
Section 4.5. SEVERABILITY. In case any provision of this Warrant shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 4.6. NOTICES. Any notices or certificates by the Company to
the Warrantholder and by the Warrantholder to the Company shall be deemed
delivered if in writing and delivered in person or by registered mail (return
receipt requested) to the Warrantholder, at its address in the registry of
Warrantholders maintained by the Company, and if to the Company, at 187
Ballardvale Street, Suite B125, Wilmington, MA 01887, Attention: Principal
Financial Officer. The Company may change its address by written notice to the
Warrantholder.
Section 4.7. AMENDMENT. This Warrant may be amended or modified (or
any provision hereof waived) only if Warrantholders holding at least eighty
percent (80%) of the Warrant Shares (assuming exercise of all the Warrants)
shall approve such amendment, modification or waiver in writing; PROVIDED,
HOWEVER, that no amendment that adversely affects the rights of any
Warrantholder in a manner different from the rights of the other Warrantholders
shall be effective against such Warrantholder unless approved in writing by such
Warrantholder. After an amendment, modification or waiver of a provision the
Warrants becomes effective, the Company shall mail to the Warrantholders a
notice briefly describing the amendment, modification or waiver.
IN WITNESS WHEREOF, this Warrant has been duly executed by the Company
under its corporate seal as of the 15th day of October, 1999.
ASCENT PEDIATRICS, INC.
By:_________________________________
Name:
<PAGE>
EXHIBIT C
ASCENT PEDIATRICS, INC.
SECOND SUPPLEMENTAL AGREEMENT
DATE: OCTOBER 15, 1999
<PAGE>
SECOND SUPPLEMENTAL AGREEMENT (the "Agreement") dated as of October
15, 1999 among Ascent Pediatrics, Inc., a Delaware corporation (the "Company"),
Alpharma USPD Inc., a Maryland corporation (the "Lender"), Alpharma Inc., a
Delaware corporation (the "Parent"), State Street Trust Bank and Trust Company
(the "Depositary") and each of the Original Lenders named in the Subordination
Agreement described below.
WHEREAS, pursuant to the Loan Agreement dated as of February 16, 1999
among the Company, the Lender and the Parent (the "Loan Agreement"), the Lender
has agreed to loan to the Company an aggregate of up to $40 million from time to
time upon the terms and conditions set forth therein, as amended as described
below;
WHEREAS, the Lender, the Company and the Depositary are parties to a
Depositary Agreement dated February 16, 1999, as amended as described below (the
"Depositary Agreement"):
WHEREAS, the Lender, the Company and the Original Lenders named
therein are parties to a Subordination Agreement dated February 16, 1999, as
amended as described below (the "Subordination Agreement"):
WHEREAS, the Company, the Lender and the Parent are parties to a
Master Agreement dated February 16, 1999, as amended as described below (the
"Master Agreement");
WHEREAS, the Loan Agreement, Depositary Agreement, Subordination
Agreement and the Master Agreement were amended pursuant to the terms of the
Supplemental Agreement dated July 1, 1999 between the parties hereto (the
"Supplemental Agreement"):
WHEREAS, the parties hereto wish to further supplement and amend the
Loan Agreement, the Depositary Agreement, the Master Agreement, the
Subordination Agreement and the Supplemental Agreement upon the terms and
conditions set forth herein;
WHEREAS, the Lender is the sole holder of the Note (as defined in the
Loan Agreement) and the parties are entering into this Second Supplemental
Agreement (to the extent it modifies the Loan Agreement) pursuant to Section
12.1 of the Loan Agreement;
WHEREAS, on or prior to the date hereof, this Second Supplemental
Agreement has been approved by a majority of the Non-Alpharma Directors pursuant
to Section 9.01 of the Depositary Agreement and Section 8.5 of the Master
Agreement;
NOW, THEREFORE, in consideration of the premises, it is agreed by and
among the parties hereto as follows:
ARTICLE I
DEFINITIONS, ETC.
1.1 Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to them in the Loan Agreement or in the
Ancillary Agreements (as defined in the Loan Agreement).
1.2 Unless the context otherwise requires:
a. a term has the meaning assigned to it;
b. an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
c. "or" is not exclusive;
d. words in the singular include the plural and in the plural
include the singular;
e. provisions apply to successive events and transactions; and
f. "herein", "hereof" and other words of similar import refer to
this Agreement as a whole and not to any particular Article,
Section or other subdivision.
1.3 This Agreement amends and supplements the Loan Agreement, the
Depositary Agreement, the Subordination Agreement, the Guaranty
Agreement, the Master Agreement and the Supplemental Agreement. In
case of any inconsistency between the terms of this Agreement and the
Loan Agreement, the Depositary Agreement, the Subordination Agreement,
the Guaranty Agreement, the Master Agreement, or the Supplemental
Agreement, the terms of this Agreement shall govern. In the absence of
such inconsistency, all provisions of the Loan Agreement, the
Depositary Agreement, the Subordination Agreement, the Guaranty
Agreement, the Master Agreement and the Supplemental Agreement shall
remain in full force and effect. Without limiting the foregoing, the
conditions set forth in Article II hereof shall for all purposes be
considered part of the Loan Agreement. Any reference to the Loan
Agreement, the Depositary Agreement, the Master Agreement, the
Guaranty Agreement, the Subordination Agreement or the Supplemental
Agreement in any such agreement or to the Ancillary Agreements shall
be deemed to be a reference to such agreement as modified hereby. Any
reference in any such agreement to approval or adoption of the Merger
Agreement and the transactions contemplated thereby shall be deemed to
be a reference to the Merger Agreement and such transactions as
modified hereby.
1.4 The parties may sign any number of copies of this Agreement. Each
signed copy shall be an original and may be signed in counterparts,
but all of them together represent the same agreement.
1.5 The laws of the State of New York, without regard to principles of
conflicts of law, shall govern this Agreement to the extent it
modifies the Loan Agreement or the Subordination Agreement. The laws
of the State of Delaware, without regard to principals of conflict of
laws, shall govern this Agreement to the extent it modifies the
Depositary Agreement or the Master Agreement.
ARTICLE II
ADDITIONAL CONDITIONS AND OBLIGATIONS OF THE LENDER
2.1 The obligation of the Lender to make any Loans on or after the date
hereof is subject to the fulfillment to its reasonable satisfaction,
or the waiver by the Lender, on or prior to the applicable Loan Date,
of each of the following additional conditions:
(a) The Fourth Amendment to the May 1998 Securities Purchase
Agreement in the form attached hereto as Exhibit A (the "Fourth
Amendment to the Securities Purchase Agreement") shall be in full
force and effect and
(b) The Company and each of the Furman Selz Entities shall have
performed in all material respects all of their respective
obligations under the Fourth Amendment to the Securities Purchase
Agreement including, without limitation, the satisfaction of the
conditions set forth in Section 2.2(b) thereof.
2.2 The obligation of the Lender to make any Secured Loans (as defined in
the Loan Agreement (as amended)) on or after the date hereof is
subject to the fulfillment to its reasonable satisfaction, or the
waiver by Lender, on or prior to the applicable Loan Date, of each of
the following conditions:
(a) The Lender shall be reasonably satisfied that the security
interest required by Section 13.10 of the Loan Agreement (as
amended) has attached to the Collateral (as defined in the Loan
Agreement) and
(b) The Amendment to the Subordination Agreement, in the form
attached hereto as Exhibit B shall be in full force and effect.
ARTICLE III
AGREEMENTS AND AMENDMENTS
THE PLAN UPDATE
3.1 The Lender agrees that the Company delivered to the Lender, on or
about September 21, 1999, a detailed operating plan covering the
periods through December 31, 2001 which includes, on an annual basis,
$1.4 million in research and development and sales force expenditure
reductions from the previously approved Plan and reflects the
immediate commercial introduction of the Primsol product. The
representatives of the Company and the Lender agree to cause their
respective representatives to the Screening Committee to take all
action necessary to approve said September 21, 1999 plan as an Update,
as that term is used in Section 4.1 of the Supplemental Agreement.
THE SECURED LOAN
3.2 The Loan Agreement (as amended) is further amended by adding the
following definitions to Section 1.1 thereof:
"Secured Loans" means all Project Loans and Screened Project
Loans.
"Collateral" means all assets, properties, contract rights and
other intangibles and chooses in action purchased, licensed or
otherwise acquired by the Company with the proceeds of a Secured
Loan.
3.3 The Loan Agreement (as amended) is further amended by adding the
following clause to Article XIII of the Loan Agreement:
13.10 SECURITY.
As security for the full and timely payment of all Secured Loans
and the performance of all obligations contained herein in
connection with the Secured Loans, the Company covenants that it
will, on or before each Loan Date for a Secured Loan, do or cause
to be done, all things necessary in the reasonable opinion of the
Lender and, its counsel, to grant to the Lender a duly perfected
first priority purchase money security interest in all of the
Collateral acquired by Company with the proceeds of said Secured
Loan. At the request of the Lender, the Company will cause its
duly authorized officers to execute on its behalf, any
certificate, instrument, statement or document, or to procure any
such certificate, instrument, statement or document, or to take
such other action which the Lender's counsel reasonably deems
necessary, from time to time, to create, continue or preserve
Lender's security interest in and to the Collateral (and the
perfection and priority thereof) as contemplated hereby,
specifically including the execution of such security agreement
and the filing of such financing statements in the form
reasonably requested by Lender's counsel.
3.4 Section 7.2 of the Loan Agreement is hereby amended by adding the
following clause to the beginning of the first sentence thereof:
"Except for any security interest in the Collateral with respect
to Secured Loans and Fourth Amendment Advances (as defined in the
Fourth Amendment to the Securities Purchase Agreement), ..."
THE OPTION EXERCISE PERIOD
3.5 The definition of the term "2001 Audited Financial Statements" in
Article I of the Depositary Agreement (as amended by the Supplemental
Agreement) is hereby amended by changing (a) the term "2001 Audited
Financial Statements" to the term "2002 Audited Financial Statements"
in said definition and in each other place where the term "2001
Audited Financial Statements" appears in the Depositary Agreement and
(b) the date "December 31, 2001" to "December 31, 2002" in each of the
two places it appears in said definition.
3.6 The definition of the term "Adjusted 2001 Operating Income" in Article
I of the Depositary Agreement (as amended by the Supplemental
Agreement) is hereby amended by changing (a) the term "Adjusted 2001
Operating Income" to the term "2002 Operating Income" in said
definition and in each other place where the term "Adjusted 2001
Operating Income" appears in the Depositary Agreement and (b) the date
"December 31, 2001" to "December 31, 2002" in each of the five places
it appears in said definition.
3.7 The definition of the term "Excluded Interest Expense" in Article I of
the Depositary Agreement (as amended by the Supplemental Agreement) is
hereby amended by changing the date "December 31, 2001" each time it
appears to "December 31, 2002."
3.8 The definition of the term "GAAP Adjustments" in Article I of the
Depositary Agreement (as amended by the Supplemental Agreement) is
hereby amended by changing (a) all references to "2000" and "2001" to
"2001" and "2002", respectively and (b) all references to "December
31, 2001" and "December 31, 2002" to "December 31, 2002" and "December
31, 2003", respectively.
3.9 The definition of the term "Option Expiration Date" in Article I of
the Depositary Agreement (as amended by the Supplemental Agreement) is
hereby amended by changing the term "December 31, 2002" to "December
31, 2003".
3.10 Section 3.01 of the Depositary Agreement (as amended by the
Supplemental Agreement) is hereby amended by (a) restating the last
sentence of subsection (a) as follows:
"The Company may elect to exercise the Call Option by delivery of
the Call Option Exercise Notice to the Depositary at any time
during the period (the "Call Period") commencing February 1, 2003
and continuing until December 31, 2003."
and (b) changing the two references to "January 15, 2003" in
subsection (b) to "January 15, 2004".
3.11 Section 4.01 of the Depositary Agreement (as amended by the
Supplemental Agreement) is hereby amended by (a) restating the first
sentence of subsection (a) as follows:
"The Company shall deliver the Option Exercise Deliverables to
Alpharma on or before March 30, 2003."
and (b) changing the reference to "January 1, 2002" in subsection (b)
(v) to "January 1, 2003".
3.12 Section 4.03 (c) (i) of the Depositary Agreement (as amended by the
Supplemental Agreement) is hereby amended by changing the reference to
"September 30, 2001" to "September 30, 2002".
3.13 Section 5.02 (b) of the Depositary Agreement (as amended by the
Supplemental Agreement) is hereby amended by changing the reference in
the second paragraph thereof from "January 15, 2003" to "January 15,
2004".
3.14 Section 2.6 of the Loan Agreement (as amended) is hereby amended by
(a) changing the reference to "December 31, 2002" to "December 31,
2003" and (b) changing the reference to "February 28, 2003" to
"February 28, 2004".
3.15 Section 2.7 of the Loan Agreement (as amended) is hereby amended by
changing the reference to "December 31, 2002" to "December 31, 2003".
3.16 Section 6.8 of the Loan Agreement (as amended) is hereby amended by
changing the reference to the "2001 fiscal year" to the "2002 fiscal
year".
3.17 It is recognized that the stockholders of Ascent must approve the
amendments contained in Sections 3.5 through 3.16 of this Agreement
(the "Option Extension Provisions") in order for such provisions to be
effective. The parties therefore agree that the Option Extension
Provisions shall have no force and effect unless and until approved by
the holders of a majority of the Depositary Shares (the "Favorable
Shareholder Vote") and that, at all times prior to a Favorable
Shareholder Vote, the Depositary Agreement shall continue to be in
full force and effect in the form existing without considering the
Option Extension Provisions. A Favorable Shareholder Vote shall be
deemed to have taken place (and the Option Extension Provisions shall
thereupon be effective as amendments to the Depositary Agreement) upon
the delivery to the Lender and the Depositary of an opinion of the
Company's counsel to the effect that a Favorable Shareholder Vote has
taken place and that each of the Agreements referred to in Section 1.3
of this Agreement (as amended hereby) are valid, binding and
enforceable against the Company. The failure to obtain a Favorable
Shareholder Vote shall not effect any of the amendments or terms of
this Agreement other than the Option Extension Provisions.
THE MINIMUM PURCHASE PRICE
3.18 Subclause (i) of Clause (A) of the definition of "Option Exercise
Price" in Article I of the Depositary Agreement (as amended by the
Supplemental Agreement) is amended and restated in its entirety as
follows:
"$140,000,000 plus an amount equal to all funds actually advanced
to the Company under the Fourth Amendment to the Securities
Purchase Agreement and which have not been repaid as of the date
of delivery of the Option Exercise Deliverables."
CONDITIONS FOR UNRESTRICTED LOANS
3.19 The Lender agrees that the existence of a Plan or Update approved by
the Screening Committee (as those terms are defined in the
Supplemental Agreement) is not a condition precedent to the Lender's
obligation to fund an Unrestricted Loan, and that Article III, Section
(c) of the Supplemental Agreement is hereby amended and restated as
follows:
"The Lender shall be reasonably satisfied that the proceeds of
any Project Loans or Screened Loans will be used for the
purposes approved by the Screening Committee pursuant to
Section 4.3 of this Agreement."
3.20 Section 4.1 of the Supplemental Agreement is hereby amended by
deleting the entire third sentence of such Section which begins as
follows:
"Notwithstanding Section 6.6 of the Loan Agreement, the
Company shall use the proceeds of Unrestricted Loans only for
the purposes specified in the Plan..."
GENERAL
3.21 The definition of the term "Option Expiration Date" in the Depositary
Agreement (as amended by the Supplemental Agreement) is amended by
adding the following text to the end of such definition:
"or Article II of the Second Supplemental Agreement dated October
13, 1999 between the same parties".
3.22 Subclause III of Clause Y of the provision in the definition of the
term "Option Exercise Price" in the Depositary Agreement (as amended
by the Supplemental Agreement) is amended and restated in its entirety
as follows:
"(III) the 7.5% Convertible Subordinated Notes due July 1, 2004,
in each case outstanding as of the Option Closing Date, or issued
or issuable upon exercise of the warrants issued pursuant to the
Series G Agreement, as amended by the fourth amendment hereto,
dated as of October 1, 1999 (to the extent any shares continue to
be held as of the Option Closing Date by one of the purchasers
set forth on Schedule 1 to the Series G Agreement as so amended
or an Affiliate of any such purchaser), the Original Option
Exercise Price, and"
3.23 Section 7.1(i) of the Loan Agreement is hereby amended and restated as
follows:
"(i) Indebtedness incurred pursuant to the Third and Fourth Amendments
to the May 1998 Securities Purchase Agreement."
3.24 The Loan Agreement is hereby amended to amend and restate clause (i)
of the definition of "Impairment Event" in its entirety as follows:
"(i) the existence of a Negative Equity Position, provided, however,
that notwithstanding the requirements of GAAP, (A) any amounts
outstanding under the 8% Subordinated Notes, (B) any amounts
outstanding under any debt securities issued upon conversion or
exchange of the Series G Preferred and (C) any amounts
outstanding under the Company's 7.5% Convertible Subordinated
Notes due July 1, 2004 (including, without limitation, any Notes
issued under the Fourth Amendment to the Securities Purchase
Agreement) shall be considered to be equity for purposes of this
clause only;".
<PAGE>
3.25 The Lender consents to the Company entering into the Fourth Amendment
to the Securities Purchase Agreement and consummating the transactions
contemplated thereby including, without limitation, for the purpose of
Sections 7.7 and 7.12 of the Loan Agreement, as amended.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first set forth above.
ASCENT PEDIATRICS, INC.
By: /S/ EMMETT CLEMENTE
----------------------
Name: Emmett Clemente
Title: Chairman
ALPHARMA USPD INC.
By: /S/ THOMAS L. ANDERSON
-----------------------
Name: Thomas L. Anderson
Title: President
ALPHARMA INC.
By: /S/ JEFFREY E. SMITH
-----------------------
Name: Jeffrey E. Smith
Title: Vice President, Finance
STATE STREET BANK AND TRUST COMPANY
By: /S/ CHARLES ROSSI
-----------------------
Name: Charles Rossi
Title: Vice President
<PAGE>
EXHIBIT D
AMENDED AND RESTATED SUBORDINATION AGREEMENT
This AMENDED AND RESTATED SUBORDINATION AGREEMENT (this "Agreement")
is dated as of October 15, 1999 and made among ASCENT PEDIATRICS, INC., a
Delaware corporation (the "Company"), the original lenders named on the
signature pages hereto (the "Original Lenders"), and ALPHARMA USPD, INC., a
Maryland corporation ("Alpharma").
WHEREAS, the Original Lenders have entered into a Series G Securities
Purchase Agreement dated as of May 13, 1998, with the Company, pursuant to which
they purchased 7,000 shares of Series G Preferred Stock of the Company (the
"Series G Preferred") and $9,000,000 principal amount of 8% Subordinated Notes
of the Company (the "Subordinated Notes");
WHEREAS, the Original Lenders have exchanged all outstanding shares of
the Series G Preferred for 8% Convertible Subordinated Notes (the "8%
Convertible Notes");
WHEREAS, the Series G Securities Purchase Agreement has been further
amended by the third and fourth amendments thereto, which provided for the
issuance from time to time of 7.5% Convertible Subordinated Notes of the Company
(the "7.5% Convertible Notes" and, together with the 8% Convertible Notes and
the Subordinated Notes, the "Furman Notes");
WHEREAS, Alpharma has entered into a Loan Agreement (the "Loan
Agreement") with the Company, as amended to date, pursuant to which Alpharma
will make a First Loan and Unrestricted Loans to the Company in the maximum
principal amount of up to $12,000,000 (the "Alpharma Note") and Project Loans
and Screened Project Loans to the Company in the maximum principal amount of
$28,000,000 (the "Secured Loans"); and
WHEREAS, the extension of credit by Alpharma to the Company will
benefit the Original Lenders, and in extending such credit, Alpharma has relied
on the subordination of the Original Lenders as hereinafter set forth;
WHEREAS, the parties hereto have entered into a Subordination
Agreement dated February 16, 1999 (the "Subordination Agreement");
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
mutually acknowledged, the parties hereby amend and restate the Subordination
Agreement in its entirety as follows:
1. DEFINITIONS. Capitalized terms used but not defined herein shall
have the meanings set forth in the Loan Agreement. The following definitions
shall for all purposes apply to the respective terms used in this Agreement.
"OFFICERS' CERTIFICATE" means the certificate signed by two Officers
or by an Officer and an Assistant Treasurer or an Assistant Secretary of the
Company.
"SENIOR INDEBTEDNESS" means the principal, premium, if any, and unpaid
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not a claim
for post-filing interest is allowed in such proceeding), fees, charges,
expenses, reimbursement and indemnification obligations, and all other amounts
payable under or in respect of Secured Loans and Borrowed Money Indebtedness in
an aggregate principal amount not greater than $50,000,000 (which in the case of
clause (C)(i) prior to or on the Option Expiration Date, must consist solely of
Screened Project Indebtedness and (ii) thereafter, may include up to $10,000,000
of Borrowed Money Indebtedness that is not Screened Project Indebtedness), which
in the case of clause (C) is designated by the Company as Senior Indebtedness.
2. SUBORDINATION.
2.1 AGREEMENT TO SUBORDINATE. The Company, Alpharma and the Original
Lenders agree, that (a) the Indebtedness evidenced by the Alpharma Note and the
Furman Notes and the payment of principal thereof will be subordinated in right
of payment to the prior payment in full of the Senior Indebtedness and (b) such
portion of the Furman Notes equal in principal amount to the amount of any
Negative Equity Position existing as the result of or at the time of a payment
will be subordinate in right of payment to the Alpharma Note, all as provided in
this Section 2. To the extent not subordinate in right of payment pursuant to
clause (b) of the immediately preceding sentence, the Furman Notes will rank
pari passu with the Alpharma Note.
2.2 LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any distribution of
assets to creditors of the Company in a liquidation, winding up or dissolution
of the Company or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its property:
(a) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash of the principal of and interest
(including interest accruing after the commencement of any such
proceeding) to the date of payment on the Senior Indebtedness
before holders of the Alpharma Note or the Furman Notes shall be
entitled to receive any payment of principal of or interest on
the Alpharma Note and the Furman Notes, respectively;
(b) holders of the Alpharma Note and the Furman Notes shall be
entitled to receive payment in full in cash (or to share ratably
in any payment if payment in full is not possible) of the
principal and interest (including interest accruing after the
commencement of any such proceeding) to the date of payment;
PROVIDED, HOWEVER, that if the Company has a Negative Equity
Position as a result of or at the time of the payment
contemplated hereby, holders of the Alpharma Note shall be
entitled to receive payment in cash of principal and interest
(including interest accruing after the commencement of any such
proceeding) to the date of payment on the Alpharma Note in an
amount equal to the amount of such Negative Equity Position,
before holders of the Furman Notes shall be entitled to receive
any payment of principal of or interest on the Furman Notes; and
(c) until the Senior Indebtedness is paid in full in cash, any
distribution to which Alpharma or the Original Lenders would be
entitled but for this Section shall be made to holders of Senior
Indebtedness as their interests may appear.
(d) until the portion of the Alpharma Note equal in principal amount
to the amount of any Negative Equity Position existing as the
result of or at the time of a payment is paid in full in cash,
any distribution to which holders of the Furman Notes would be
entitled but for this Section shall be made to holders of the
Alpharma Note as their interests may appear.
2.3 COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO SECURITIES IN CERTAIN
CIRCUMSTANCES.
(a) Under any circumstances,
(i) No payment of principal of, or premium, if any, or interest
may be made by the Company, directly or indirectly, on the
Alpharma Note or Furman Notes at any time if a default in
payment or interest on Senior Indebtedness exists, and (A)
such default is subject to judicial proceedings or (B)
notice of such default has been received by the Company from
a holder of Senior Indebtedness, unless and until such
default shall have been cured or waived or shall have ceased
to exist. During the continuance of any event of default
with respect to any Senior Indebtedness, as such event of
default is defined under any such Senior Indebtedness or in
any agreement pursuant to which any Senior Indebtedness has
been issued (other than default in payment of the principal
of, or premium, if any, or interest on any Senior
Indebtedness), permitting the holders of such Senior
Indebtedness to accelerate the maturity thereof, no payment
may be made by the Company, directly or indirectly, with
respect to principal of, or premium, if any, or interest on
the Alpharma Note or Furman Notes for 183 days following
written notice to the Company, from any holder or holders of
such Senior Indebtedness or their representative or
representatives or the trustee or trustees under any
indenture payment under which any instrument evidencing any
such Senior Indebtedness may have been issued, that such an
event of default has occurred and is continuing. However, if
the maturity of such Senior Indebtedness is accelerated, no
payment may be made on the Alpharma Note or Furman Notes
until such Senior Indebtedness that has matured has been
paid or such acceleration has been cured or waived.
(ii) In the event that, notwithstanding the foregoing, any
payment by the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing,
shall be received by holders of the Alpharma Note or the
Furman Notes before all Senior Indebtedness is paid in full,
in cash, or provision is made for such payment to the
satisfaction of the holders thereof, and if such fact shall
then have been or thereafter be made known to such holders,
then and in such event such payment shall be paid over or
delivered to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any
instruments evidencing any Senior Indebtedness may have been
issued, as their respective interests may appear, for
application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full, after giving effect to any concurrent
payment to or for the holders of such Senior Indebtedness,
and, until so delivered, the same shall be held in trust by
holders of the Alpharma Note or the Furman Note as the
property of the holders of Senior Indebtedness.
(iii) The holders of Senior Indebtedness may, at any time and
from time to time, without the consent of or notice to
holders of the Alpharma Note or the Furman Notes, without
incurring responsibility to holders of the Alpharma Note or
the Furman Notes and without impairing or releasing the
obligations of holders of the Alpharma Note or the Furman
Notes hereunder to the holders of Senior Indebtedness: (A)
change the manner, place or terms of payment or change or
extend the time of payment of, or renew or alter, Senior
Indebtedness, or otherwise amend in any manner Senior
Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding;
(B) sell, exchange, release or otherwise deal with any
Property pledged, mortgaged or otherwise securing Senior
Indebtedness; (C) release any Person liable in any manner
for the collection of Senior Indebtedness; and/or (D)
exercise or refrain from exercising any rights against the
Company and any other Person.
(b) In the event there is a Negative Equity Position at the time of or
as a result of any payment
(i) No payment of principal of, or premium, if any, or interest
may be made by the Company, directly or indirectly, on such
portion of the Furman Notes equal in principal amount to the
amount of such Negative Equity Position at any time if a
default in payment or interest on the Alpharma Note exists,
and (A) such default is subject to judicial proceedings or
(B) notice of such default has been received by the Company
from a holder of the Alpharma Note, unless and until such
default shall have been cured or waived or shall have ceased
to exist. During the continuance of any event of default
with respect to the Alpharma Note, as such event of default
is defined under the Alpharma Note or in the Loan Agreement
as amended from time to time (other than default in payment
of the principal of, or premium, if any, or interest on the
Alpharma Note), permitting the holders of the Alpharma Note
to accelerate the maturity thereof, no payment may be made
by the Company, directly or indirectly, with respect to
principal of, or premium, if any, or interest on such
portion of the Furman Notes equal in principal amount to the
amount of such Negative Equity Position for 183 days
following written notice to the Company, from any holder or
holders of the Alpharma Note or their representative or
representatives, that such an event of default has occurred
and is continuing. However, if the maturity of the Alpharma
Note is accelerated, no payment may be made on such portion
of the Furman Notes equal in principal amount to the amount
of such Negative Equity Position until the Alpharma Note has
been paid to the extent it has matured or such acceleration
has been cured or waived.
(ii) In the event that, notwithstanding the foregoing, any
payment by the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing,
shall be received by holders of the Furman Notes before such
portion of the Alpharma Note equal in principal amount to
the amount of such Negative Equity Position is paid in full,
in cash, or provision is made for such payment to the
satisfaction of the holders thereof, and if such fact shall
then have been or thereafter be made known to such holders,
then and in such event such payment shall be paid over or
delivered to the holders of the Alpharma Note or their
representative or representatives, as their respective
interests may appear, for application to the payment of any
portion of the Alpharma Note remaining unpaid to the extent
necessary to pay such portion of the Alpharma Note equal in
principal amount to the amount of such Negative Equity
Position in full, after giving effect to any concurrent
payment to or for the holders of the Alpharma Note, and,
until so delivered, the same shall be held in trust by
holders of the Furman Notes as the property of the holders
of the Alpharma Note.
(iii) The holders of the Alpharma Note may, at any time and from
time to time, without the consent of or notice to holders of
the Furman Notes, without incurring responsibility to
holders of the Furman Notes and without impairing or
releasing the obligations of holders of the Furman Notes
hereunder to the holders of the Alpharma Note: (A) change
the manner, place or terms of payment or change or extend
the time of payment of, or renew or alter, the Alpharma
Note, or otherwise amend in any manner the Alpharma Note or
any instrument evidencing the same or any agreement under
which the Alpharma Note is outstanding; (B) sell, exchange,
release or otherwise deal with any Property pledged,
mortgaged or otherwise securing the Alpharma Note; (C)
release any Person liable in any manner for the collection
of the Alpharma Note; and/or (D) exercise or refrain from
exercising any rights against the Company and any other
Person.
Nothing contained in this Section 2 will limit the right of
holders of the Alpharma Note or the Furman Notes to take any
action to accelerate the maturity of Senior Indebtedness,
the Alpharma Note or the Furman Notes or to pursue any
rights or remedies hereunder.
2.4 ACCELERATION OF SECURITIES. If payment of the Alpharma Note or
Furman Notes is accelerated because of an event of default, the Company shall
promptly notify holders of Senior Indebtedness of the acceleration. If payment
of the Furman Notes is accelerated because of an event of default, the Company
shall promptly notify Alpharma.
2.5 NOTICE BY COMPANY. The Company shall promptly notify (a) holders
of the Alpharma Note or the Furman Notes, as applicable, in writing of any facts
known to the Company that would cause a payment of principal of or interest on
the Alpharma Note or the Furman Notes, as applicable, to violate this Section,
but failure to give such notice shall not affect the subordination of the
Alpharma Note and the Furman Notes, as applicable, to the Senior Indebtedness as
provided in this Section or the subordination of the Furman Notes to the
Alpharma Note as provided in this Section.
2.6 SUBROGATION. (a) After all Senior Indebtedness is paid in full in
cash and until the Alpharma Note and the Furman Notes are paid in full in cash,
holders of the Alpharma Note and the Furman Notes shall be subrogated to the
rights of holders of Senior Indebtedness to receive distributions applicable to
Senior Indebtedness to the extent that distributions otherwise payable to
holders of the Alpharma Note and the Furman Notes have been applied to the
payment of Senior Indebtedness. A distribution made under this Section to
holders of Senior Indebtedness which otherwise would have been made to holders
of the Alpharma Note and the Furman Notes is not, as between the Company and
holders of the Alpharma Note and the Furman Notes, a payment by the Company on
Senior Indebtedness.
(b) In the event of a Negative Equity Position, after such portion of
the Alpharma Note equal in principal amount to the amount of such Negative
Equity Position is paid in full in cash and until the Furman Notes are paid in
full in cash, holders of the Furman Notes shall be subrogated to the rights of
holders of the Alpharma Note to receive distributions applicable to the Alpharma
Note to the extent that distributions otherwise payable to holders of the Furman
Notes have been applied to the payment of the Alpharma Note. A distribution made
under this Section to holders of the Alpharma Note which otherwise would have
been made to holders of the Furman Notes is not, as between the Company and such
holders, a payment by the Company on the Alpharma Note.
2.7 RELATIVE RIGHTS. This Section 2 defines the relative rights of
Alpharma, the Original Lenders and holders of Senior Indebtedness. Nothing in
this Agreement shall:
(a) affect the relative rights of Alpharma, the Original Lenders and
creditors of the Company other than holders of Senior
Indebtedness; or
(b) prevent Alpharma or the Original Lenders from exercising their
available remedies upon a Default or Event of Default, subject to
the rights of holders of Senior Indebtedness and, where
applicable, holders of the Alpharma Note to receive distributions
otherwise payable to holders of the Alpharma Note or the Furman
Notes.
If the Company fails because of this Section to pay principal of or
interest on the Alpharma Note or the Furman Notes on the due date, the failure
is still a default or event of default.
2.8 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No right of any
holder of Senior Indebtedness to enforce the subordination of the indebtedness
evidenced by the Alpharma Notes or the Furman Notes shall be impaired by any act
or failure to act by the Company or by its failure to comply with this
Agreement. No right of any holder of the Alpharma Note to enforce the
subordination of the indebtedness evidenced by the Furman Notes shall be
impaired by any act or failure to act by the Company or by its failure to comply
with this Agreement.
2.9 OFFICERS' CERTIFICATE. If there occurs an event referred to in
Section 2.2 or 2.3 the Company shall promptly give to Alpharma and the Original
Lenders an Officers' Certificate (on which Alpharma and the Original Lenders may
conclusively rely) identifying all holders of Senior Indebtedness and the
principal amount of Senior Indebtedness then outstanding held by each such
holder and stating the reasons why such Officers' Certificate is being delivered
to Alpharma or the Original Lenders.
2.10 OBLIGATION OF COMPANY UNCONDITIONAL. Nothing contained in this
Section 2 or elsewhere in this Agreement, the Loan Agreement, the May 1998
Securities Purchase Agreement, the Alpharma Note or the Furman Notes is intended
to or shall impair, as between the Company, its creditors other than holders of
Senior Indebtedness and Alpharma and the Original Lenders, the obligation of the
Company, which is absolute and unconditional, to pay to Alpharma and the
Original Lenders the principal of and interest on the Project Loans, Screened
Project Loans, Alpharma Note and the Furman Notes, as applicable, as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of Alpharma and the Original
Lenders and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent Alpharma and the
Original Lenders from exercising all remedies otherwise permitted by applicable
law upon default under this Agreement, subject to the rights, if any, under this
Section 2 of the holders of Senior Indebtedness and holders of the Alpharma
Note, in respect of cash, property or securities of the Company received upon
the exercise of any such remedy. Upon any distribution of assets of the Company
referred to in this Section 2, Alpharma and the Original Lenders are entitled to
rely upon any order or decree by any court of competent jurisdiction in which
such dissolution, winding up, liquidation or reorganization proceedings are
pending, or a certificate of the liquidating trustee or agent or other Person
making any distribution to Alpharma and the Original Lenders for the purpose of
ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Section 2. Nothing
contained in this Section 2 or elsewhere in this Agreement, Project Loans,
Screened Project Loans, the Alpharma Note or the Furman Notes is intended to or
shall affect the obligation of the Company to make, or prevent the Company from
making, at any time except during the pendency of any dissolution, winding up,
liquidation or reorganization proceeding, and except during the continuance of
any default specified in Section 2.3 (not cured or waived), payments at any time
of the principal or of interest on the Securities.
2.11 THIS AGREEMENT NOT TO PREVENT EVENTS OF DEFAULT. The failure to
make a payment of principal of or interest on the Alpharma Note or the Furman
Notes by reason of any of the provisions of this Section 2 shall not be
construed as preventing the occurrence of an Event of Default or an event of
default under the Alpharma Note or the Furman Notes.
3. EFFECT OF FAILURE TO PAY. The failure to make any payment on
account of the Alpharma Note or the Furman Notes by reason of the operation of
any provision of this Agreement shall not be construed as preventing the
occurrence of an event of default under the applicable documents.
4. NO DISPOSITION. No holder of the Alpharma Note or the Furman Notes
will sell, assign, pledge, encumber or otherwise dispose of any of the Alpharma
Note or the Furman Notes, as the case may be, unless such sale, assignment
pledge, encumbrance or disposition is made expressly subject to this Agreement.
5. LEGENDS. The Company and the holders of the Alpharma Note and the
Furman Notes shall cause each instrument or document which now or hereafter
evidences all or any portion of the Alpharma Note and the Furman Notes to be
conspicuously marked with the following legend:
THIS INSTRUMENT IS SUBJECT TO THE TERMS OF AN AMENDED AND
RESTATED SUBORDINATION AGREEMENT DATED AS OF OCTOBER 15, 1999,
AMONG ASCENT PEDIATRICS, INC., ALPHARMA USPD, INC. AND THE
ORIGINAL LENDERS NAMED THEREIN, WHICH AGREEMENT IS INCORPORATED
HEREIN BY REFERENCE. NOTWITHSTANDING ANY STATEMENT TO THE
CONTRARY CONTAINED IN THIS INSTRUMENT, NO PAYMENT OF ANY NATURE
ON ACCOUNT OF THE OBLIGATIONS HEREUNDER, WHETHER PRINCIPAL OR
INTEREST, SHALL BE MADE, PAID, RECEIVED OR ACCEPTED EXCEPT IN
ACCORDANCE WITH THE EXPRESS TERMS OF SUCH AGREEMENT.
6. ENFORCEMENT. The holders of the Alpharma Note and the Furman Notes
hereby acknowledge that the provisions of this Agreement are intended to be
enforceable at all times, whether before or after the commencement of a
proceeding in connection with or premised on the occurrence of a Bankruptcy
Event.
7. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company, Alpharma and the Original Lenders. This Agreement shall be freely
assignable at any time by Alpharma or the Original Lenders provided any such
assignment is in conjunction with the assignment of the related Alpharma Note or
Furman Notes.
8. GOVERNING LAW. THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
EXCEPT FOR ITS RULES RELATING TO THE CONFLICTS OF LAW.
9. AMENDMENTS AND WAIVERS. Except as otherwise provided herein, this
Agreement may be changed, modified or waived only by a writing signed by the
Company, Alpharma and the Original Lenders.
10. FURTHER ASSURANCES. The Company, Alpharma and the Original Lenders
each will, at the Company's expense and at any time and from time to time,
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, or that any of them may
request, in order to protect any right or interest granted or purported to be
granted by this Agreement or to enable the holders of the Alpharma Note or the
Furman Notes to exercise and enforce their rights and remedies hereunder.
11. NOTICES. All notices, requests, claims, and other communications
to any party hereunder or pursuant to the terms hereof shaft be in writing. Any
such notice, request, demand, claim, or other communication to any party
hereunder shall be deemed duly delivered three Business Days after it is sent by
registered or certified mail, return receipt requested, postage prepaid, or one
Business Day after it is sent via a reputable nationwide overnight courier
service, in each case to the intended recipient as set forth below:
Notices shall be addressed as follows: (i) if to the Company or
Alpharma, to the addresses set forth in the Loan Agreement; (ii) if to the
Original Lenders, to the addresses set forth in the May 1998 Securities Purchase
Agreement; and (iii) to such other address as the party addressed shall have
previously designated by written notice to the serving party, given in
accordance with this Section 11. A notice not given as provided above shall, if
it is in writing, be deemed given if and when actually received by the party to
whom given.
* * * * *
IN WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
ASCENT PEDIATRICS, INC.
By: /S/ EMMETT CLEMENTE
----------------------------
Name: Emmett Clemente
Title: Chairman
ALPHARMA USPD, INC.
By: /S/ THOMAS L. ANDERSON
----------------------------
Name: Thomas L. Anderson
Title: President
ORIGINAL LENDERS:
FURMAN SELZ INVESTORS II L.P.
FS EMPLOYEE INVESTORS L.L.C.
FS PARALLEL FUND L.P.
By: FS PRIVATE INVESTMENTS LLC
MANAGER
By: /S/ JAMES L. LUIKART
----------------------------
Name: James L. Luikart
Title: Managing Member
BANCBOSTON VENTURES INC.
By: /S/ MARCIA T. BATES
----------------------------
Name: Marcia T. Bates
Title: Managing Director
<PAGE>
FLYNN PARTNERS
By: /S/ JAMES E. FLYNN
-----------------------------
Name: James E. Flynn, General
Partner
Flynn Partners
