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EXHIBIT 99.1
MASTER AGREEMENT dated as of February 16, 1999 among Ascent Pediatrics,
Inc., a Delaware corporation (the "Company"), Alpharma, Inc., a Delaware
corporation ("Parent"), and Alpharma USPD Inc., a Maryland corporation and
wholly owned subsidiary of Parent ("Alpharma").
WHEREAS, the Company and Bird Merger Corporation, a Delaware corporation
and wholly owned subsidiary of the Company ("Transitory Subsidiary"), have
entered into an Agreement and Plan of Merger dated as of February 16, 1999 (the
"Merger Agreement"), pursuant to which, among other things:
(i) Transitory Subsidiary shall be merged (the "Merger")
with and into the Company;
(ii) each share of common stock, $.00004 par value per
share, of the Company issued and outstanding immediately prior to the
Effective Time (as defined in the Merger Agreement) (the "Old Common
Stock") (other than shares of Old Common Stock held in the Company's
treasury and shares of Old Common Stock as to which appraisal rights have
been perfected by the holders thereof (if such rights are available under
Section 262 of the Delaware General Corporation Law)) shall be converted
in the Merger into and represent the right to receive one depositary
share (a "Depositary Share") issued pursuant to the Depositary Agreement,
each Depositary Share evidencing one share of common stock, $.00004 par
value per share, of the Company following the Merger (the "New Common
Stock"), represented by a depositary receipt ("Depositary Receipt") and
subject to the right and option of the Company (the "Call Option"), upon
the terms and conditions set forth in the Depositary Agreement (as
defined below), to purchase all of the outstanding shares of New Common
Stock of the Company deposited with the Depositary (as defined below);
(iii) each share of common stock, $.01 par value per share,
of Transitory Subsidiary issued and outstanding immediately prior to the
Effective Time shall be converted in the Merger into and thereafter
evidence the right to receive $.01 per share; and
WHEREAS, Alpharma and the Company have entered into a Loan Agreement
dated as of February 16, 1999 (the "Loan Agreement") pursuant to which Alpharma
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;
WHEREAS, as a condition to, and as additional consideration for, Alpharma
agreeing to make Loans (as defined below), the Company desires to assign the
Call Option to Alpharma; and
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WHEREAS, the Company, Alpharma, and State Street Bank and Trust Company
(the "Depositary") have entered into a Depositary Agreement dated as of February
16, 1999 (the "Depositary Agreement") providing for (i) the terms and conditions
pursuant to which the Company may exercise the Call Option prior to the transfer
of the Call Option to Alpharma and (ii) the terms and conditions pursuant to
which Alpharma may exercise the Call Option from and after the transfer of the
Call Option to Alpharma;
NOW, THEREFORE, in consideration of the premises, it is agreed by and
among the parties hereto as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
1.1 DEFINITIONS.
"Affiliate" shall have the meaning ascribed to it in Rule 405 promulgated
under the Securities Act.
"Alpharma Director" has the meaning set forth in Section 6.5(a) of the
Loan Agreement.
"Ancillary Agreements" shall mean the Depositary Agreement, the Loan
Agreement, the Registration Rights Agreement and the Subordination
Agreement dated as of February 16, 1999 by and among the Company,
Alpharma and the Purchasers (as defined in the May 1998 Securities
Purchase
Agreement).
"Board of Directors" means the Board of Directors of the Company or any
committee of the Board of Directors authorized to act for it hereunder.
"Business Day" means any day which is neither a Saturday nor a Sunday nor
a legal holiday on which banks are authorized or required to be closed in
Boston, Massachusetts, New York, New York or in any other city in which
the Depositary's Office (as defined in the Depositary Agreement) is
located.
"Capital Stock" means any and all shares, interests, participations or
other equivalents of or interests in (however designated) equity of the
Company, including any preferred stock, but excluding any debt securities
convertible into such equity prior to such conversion.
"Change in Control" of the Company means:
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(a) the acquisition by any Person or "group" within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act
(excluding, for this purpose, the Company or its Subsidiaries, any
employee benefit plan of the Company or its Subsidiaries which
acquires beneficial ownership of voting securities of the Company,
or Alpharma or its Affiliates) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of more
than 50% of the aggregate voting power of all classes of Voting
Capital Stock that are then outstanding or that are issuable upon
the conversion or exercise of convertible securities, options,
warrants or rights of the Company that are then outstanding;
provided that any voting securities acquired directly from the
Company by an underwriter of the Company as part of an
underwritten public offering of Capital Stock of the Company shall
not be deemed to be beneficially owned by such underwriter for
purposes of determining whether a Change in Control has occurred;
(b) Persons who, as of the Closing Date constitute all of
the Non-Alpharma Directors (the "Non-Alpharma Incumbent
Directors") cease for any reason to constitute at least a majority
of the Non- Alpharma Directors then in office, provided that any
Person becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the
Non-Alpharma Incumbent Directors shall be considered as though
such Person were one of the Non-Alpharma Incumbent Directors as of
the Closing Date; provided, however, that there shall be excluded
from this clause (b) any individual whose initial assumption of
office occurred as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents, by
or on behalf of a Person other than the Board of Directors;
(c) the consummation of a reorganization, merger or
consolidation involving the Company, if the stockholders of the
Company beneficially owning 100% of the aggregate voting power of
all classes of Voting Capital Stock that are then outstanding or
that are issuable upon conversion or exercise of convertible
securities, options, warrants or rights that are then outstanding
immediately prior to such reorganization, merger or consolidation
do not, immediately thereafter, beneficially own more than 50% of
the aggregate voting power of all classes of Voting Capital Stock
that are then outstanding or issuable upon conversion or exchange
of convertible securities, options, warrants or rights that are
then outstanding; or
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(d) a liquidation or dissolution of the Company (other than
pursuant to the United States Bankruptcy Code) or the conveyance,
transfer or leasing of all or substantially all of the assets of
the Company to any Person.
"Closing" has the meaning set forth in Section 2.1 of this Agreement.
"Closing Date" has the meaning set forth in Section 2.1 of this
Agreement.
"Common Stock" means (i) prior to the Effective Time (as defined in the
Merger Agreement), the Old Common Stock, and (ii) at and after the
Effective Time, the New Common Stock.
"Company" means the party named as such above until a successor replaces
it pursuant to the applicable provision hereof and thereafter means the
successor to such party.
"Depositary Agreement" shall have the meaning ascribed to it in the
Preamble to this Master Agreement.
"Effective Time" shall have the meaning ascribed to it in the Merger
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Financial Statements" has the meaning set forth in Section 3.7(a) of the
Loan Agreement.
"First Loan" has the meaning set forth in Section 2.3 of the Loan
Agreement.
"Forty Percent Limit" has the meaning set forth in Section 6.1 of this
Agreement.
"GAAP" means U.S. generally accepted accounting principles as in effect
from time to time.
"Guaranty Agreement" means the Guaranty Agreement dated as of February
16, 1999 between the Company and the Parent.
"Indebtedness" means and includes:
(a) all items which in accordance with GAAP would be
included on the liability side of a balance sheet on the date as
of which
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Indebtedness is to be determined (excluding capital stock, surplus
reserves and deferred credits);
(b) all guaranties, letter of credit, contingent
reimbursement obligations and other contingent obligations in
respect of, or any obligations to purchase or otherwise acquire,
indebtedness of others; and
(c) all indebtedness secured by any Lien existing on any
interest of the Person with respect to which indebtedness is being
determined in Property owned subject to such Lien whether or not
the indebtedness secured thereby shall been assumed.
"Intellectual Property" has the meaning set forth in Section 3.11(a) of
the Loan Agreement.
"Lien" means any mortgage, pledge, charge, encumbrance, security
interest, collateral assignment or other lien or restriction of any kind,
whether based on common law, constitutional provision, statute or
contract, and shall include reservations, exceptions, encroachments,
easements, rights of way, covenants, conditions, restrictions and other
title exceptions.
"Loan" means any borrowing by the Company of up to a maximum principal
amount of $40,000,000 from Alpharma pursuant to Section 2.1 of the Loan
Agreement and the other terms and conditions of the Loan Agreement.
"Loan Agreement" shall have the meaning ascribed to it in the Preamble to
this Master Agreement.
"Material Adverse Effect" means any development, change or effect that is
materially adverse to the business, Properties (including, without
limitation, Intellectual Property), assets, net worth, financial
condition, results of operations or future prospects (including, without
limitation, future equity value) of the Company or Alpharma, as the case
may be, and its Subsidiaries taken as a whole.
"May 1998 Securities Purchase Agreement" means the Series G Securities
Purchase Agreement dated as of May 13, 1998 by and among the Company and
the Purchasers named in Schedule I thereto, as amended.
"Merger" has the meaning set forth in the Preamble to this Agreement.
"Merger Agreement" has the meaning set forth in the Preamble to this
Agreement.
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"Merger Consideration" has the meaning set forth in Section 1.4(a) of the
Merger Agreement.
"New Common Stock" has the meaning set forth in the preamble to this
Agreement.
"Non-Alpharma Directors" has the meaning set forth in Section 6.3 of this
Agreement.
"Note" means the note to be issued by the Company to Alpharma pursuant to
Section 2.2(a) of the Loan Agreement, provided however, that in the event
that Alpharma exchanges all or a portion of the Note for one or more
Notes in accordance with Section 2.2(c) of the Loan Agreement or
transfers all or a portion of the Note in accordance with Article XII of
the Loan Agreement, all references to the Note in this Agreement shall be
deemed to include the Notes issued by the Company upon such exchange or
transfer.
"Note Conversion Shares" has the meaning set forth in Section 3.4(b) of
the Loan Agreement.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Old Common Stock" has the meaning set forth in the preamble to this
Agreement.
"Option Determination Date" has the meaning set forth in the Depositary
Agreement.
"Option Expiration Date" has the meaning set forth in the Depositary
Agreement.
"Person" means any individual, corporation, association, company,
business trust, partnership, joint venture, joint-stock company, limited
liability company, trust, unincorporated organization or association or
government or any agency or political subdivision thereof.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, tangible or intangible.
"Proxy Statement/Prospectus" has the meaning set forth in Section 4.1 of
this Agreement.
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"Registration Rights Agreement" means the Registration Rights Agreement
dated as of February 16, 1999 between the Company and Alpharma.
"S-4 Registration Statement" has the meaning set forth in Section 4.2 of
this Agreement.
"SEC" means the United States Securities and Exchange Commission.
"Second Amendment" shall mean the Second Amendment dated as of February
16, 1999 to the May 1998 Securities Purchase Agreement.
"Securities" means the Note and the Note Conversion Shares.
"Securities Act" means the Securities Act of 1933, as amended.
"Standstill Period" has the meaning set forth in Section 6.1 of this
Agreement.
"Stockholder Meeting" has the meaning set forth in Section 4.1 of this
Agreement.
"Subsidiary" of a Person means any corporation, association, partnership,
joint venture or other business entity of which more than fifty percent
(50%) of the Voting Capital Stock or other equity interests (in the case
of Persons other than corporations), is owned or controlled directly or
indirectly by the Person, or one or more of the Subsidiaries of the
Person, or a combination thereof.
"Voting Capital Stock" means the Capital Stock of the Company entitled to
vote generally in the election of directors.
The term "to the knowledge of" or derivatives thereof shall mean the
actual knowledge of the Chief Executive Officer or the Vice President,
Finance of the Company.
1.2 RULES OF CONSTRUCTION
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;
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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.
ARTICLE II
THE CLOSING
2.1 THE CLOSING. The Closing of the transactions contemplated by this
Agreement (the "Closing") shall occur within five days after the
satisfaction or waiver of all of the conditions to the obligations of the
parties hereunder, including without limitation the conditions set forth
in Article V hereof and in Section 4.2 of the Loan Agreement (the date of
such Closing being referred to as the "Closing Date").
2.2 ACTIONS AT THE CLOSING. At the Closing, (a) the Company shall deliver to
Alpharma the certificates, instruments and documents referred to in
Section 5.2(j), (b) the Company shall file with the Secretary of State of
the State of Delaware the Certificate of Merger and (c) following the
Effective Time of the Merger, Alpharma and the Company shall take such
other actions as are provided in this Agreement, the Merger Agreement and
the Ancillary Agreements.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 COMPANY REPRESENTATIONS AND WARRANTIES. The Company has made certain
representations and warranties to Alpharma pursuant to Article III of the
Loan Agreement, which representations and warranties are incorporated
herein by reference. The Company hereby confirms that such
representations and warranties are true and correct in all respects as of
the date hereof as if included herein.
3.2 ALPHARMA REPRESENTATIONS AND WARRANTIES. Alpharma represents and
warrants to the Company that:
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(a) it is an "accredited investor" as that term is defined in Rule
501(a) promulgated under the Securities Act,
(b) 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,
(c) it has had an opportunity to discuss the Company's business,
management and financial affairs with the Company's management,
(d) it is acquiring the Securities 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 Alpharma has no present or
contemplated agreement, undertaking, arrangement, obligation,
indebtedness or commitment providing for the disposition thereof,
(e) it is not in material breach or violation of, or in default under,
any term or provision of (i) its Certificate of Incorporation or
Bylaws, (ii) any indenture, mortgage, deed of trust, voting trust
agreement, stockholders agreement, note agreement or other
agreement or instrument to which it is a party or by which it is
bound or to which any of its Property is subject, the effect of
which breach, violation or default, individually or in the
aggregate, would reasonably be expected to have a Material Adverse
Effect with respect to Alpharma, or (iii) any statute, judgment,
decree, order, rule or regulation applicable to Alpharma or of any
arbitrator, court, regulatory body, administrative agency or any
other governmental agency or body, domestic or foreign, having
jurisdiction over Alpharma or any of its 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 with respect to Alpharma,
(f) it has not been organized, reorganized or recapitalized
specifically for the purpose of investing in the Company,
(g) it understands that the Securities have not been registered under
the Securities Act and it will not offer, sell, transfer, pledge,
hypothecate or otherwise dispose of any Securities 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,
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(h) it has full power and authority to execute, deliver and perform
this Agreement and the Ancillary Agreements,
(i) the Person executing this Agreement and the Ancillary Agreements
on behalf of Alpharma has the appropriate authority to act on
behalf of Alpharma,
(j) it has full power and authority to execute and deliver this
Agreement, the Ancillary Agreements and such other documents
furnished or to be furnished by Alpharma hereunder, this Agreement
and the Ancillary Agreements have each been duly authorized,
executed and delivered by Alpharma and each constitutes a legal,
valid and binding agreement of Alpharma, enforceable against
Alpharma 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,
(k) the compliance by Alpharma with the provisions of this Agreement
and the Ancillary Agreements and the consummation of the other
transactions contemplated hereby or thereby will not result in the
creation or imposition of any lien, charge, security interest or
encumbrance upon any of the assets of Alpharma 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 Alpharma, (ii) any contract or other agreement to which
Alpharma is a party or by which Alpharma or any of its respective
properties is bound, or (iii) any judgment, ruling, decree, order,
statute, rule or regulation of any court or other governmental
agency or body, domestic or foreign, applicable to the business or
properties of Alpharma, except, with respect to clauses (ii) and
(iii), in circumstances that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect with respect to Alpharma,
(l) it has not employed any broker or finder in connection with the
transactions contemplated by this Agreement or the Ancillary
Agreements,
(m) it acknowledges receipt of, and the opportunity to review, the
information that it believes necessary to make an investment in
the Securities, including, without limitation, the Financial
Statements and
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the other documents referenced in the Loan Agreement as having
been delivered to Alpharma by the Company,
(n) there is no action, suit, proceeding or investigation pending, or,
to the knowledge of Alpharma, threatened, against Alpharma before
or by any court, regulatory body or administrative agency or any
other governmental agency or body, domestic or foreign, or any
action, suit, proceeding or investigation pending, or, to the
knowledge of Alpharma, threatened, which challenges the validity
of any action taken or to be taken pursuant to or in connection
with this Agreement and the Ancillary Agreements or the issuance
of the Note or the Note Conversion Shares, which would not
reasonably be expected to have a Material Adverse Effect with
respect to Alpharma, and
(o) Alpharma (i) is duly incorporated, validly existing and in good
standing under the laws of the State of Maryland, and has all
requisite corporate power and authority to carry on its business
as now conducted and proposed to be conducted, and (ii) 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 with the
respect to Alpharma).
ARTICLE IV
STOCKHOLDER MEETING; PROXY MATERIAL;
REGISTRATION STATEMENT; STOCK LISTING; INDEMNIFICATION
4.1 Stockholder Meeting; Proxy Material. The Company shall cause a meeting of
its stockholders (the "Stockholder Meeting") to be duly called and held
as soon as reasonably practicable for the purpose of voting on the
approval and adoption of (i) the Merger Agreement (including the exhibits
attached thereto) and the transactions contemplated thereby, including
the Merger, and (ii) the Second Amendment and the transactions
contemplated thereby. The Board of Directors of the Company shall
recommend approval and adoption of (i) the Merger Agreement (including
the exhibits attached thereto) and the transactions contemplated thereby,
including the Merger, and (ii) the Second Amendment and the transactions
contemplated thereby, by the Company's stockholders. In connection with
the Stockholder Meeting, the Company (a) will promptly prepare and file
with the SEC, will use its best efforts to have cleared by the SEC and
will thereafter mail to its stockholders as promptly as
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practicable a proxy statement/prospectus and all other documents which
may be required to be filed or mailed in connection with the Stockholder
Meeting (collectively, the "Proxy Statement/Prospectus") and the
consummation of the transactions contemplated by (i) the Merger Agreement
and (ii) the Second Amendment, (b) will use its best efforts to obtain
the necessary approvals by its stockholders of (i) the Merger Agreement
(including the exhibits attached thereto) and the transactions
contemplated thereby, including the Merger, and (ii) the Second Amendment
and the transactions contemplated thereby, and (c) will otherwise comply
with all legal requirements applicable to the Stockholder Meeting.
4.2 S-4 Registration Statement. Promptly following the resolution to the
satisfaction of the SEC of all SEC comments on the Proxy
Statement/Prospectus (or the expiration of the ten-day period under Rule
14a- 6(a) under the Exchange Act if no SEC comments are received by such
date), the Company shall promptly prepare and file with the SEC, under
the Securities Act, a registration statement on Form S-4 with respect to
the Depositary Shares and the underlying shares of New Common Stock (the
"S-4 Registration Statement") and shall use its best efforts to cause the
S-4 Registration Statement to be declared effective as promptly as
practicable. The Company shall take any action required to be taken under
foreign or state securities or Blue Sky laws in connection with the
issuance of the Merger Consideration.
4.3 Cooperation. Alpharma will provide all information relating to Alpharma
and its Affiliates for use in preparation of the Proxy
Statement/Prospectus and the S-4 Registration Statement. The Company
shall give Alpharma and its counsel reasonable opportunity to review and
comment upon the Proxy Statement/Prospectus and the S-4 Registration
Statement and any amendments thereto prior to the filing thereof with the
SEC and prior to dissemination of the Proxy Statement/Prospectus to the
stockholders of the Company. The Company shall provide Alpharma and its
counsel with a copy of any written comments or telephonic notification of
any verbal comments the Company may receive from the SEC or its staff
with respect to the Proxy Statement/Prospectus and the S-4 Registration
Statement promptly after the receipt thereof, shall permit Alpharma and
its counsel to participate in the preparation of any written responses or
any verbal responses of the Company or its counsel and shall provide
Alpharma and its counsel with a copy of any written responses and
telephonic notification of any verbal responses of the Company or its
counsel. The Company agrees to use its best efforts, after consultation
with Alpharma, to respond promptly to all such comments of or requests by
the SEC and to cause the Proxy Statement/Prospectus and all required
amendments and supplements to be mailed to the stockholders entitled to
vote at the Stockholder Meeting at the earliest practicable time. The
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Proxy Statement/Prospectus shall contain the recommendations of the Board
of Directors of the Company referred to in Section 4.1.
4.4 Indemnification.
(a) The Company will indemnify and hold harmless Alpharma, each of its
directors and officers and each person, if any, who controls
Alpharma within the meaning of the Securities Act and the Exchange
Act against any losses, claims, damages or liabilities, joint or
several, to which Alpharma may become subject under the Securities
Act, the Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material
fact contained in the S-4 Registration Statement as of its
effective date or in the Proxy Statement/Prospectus as of the date
on which it is distributed to the Company's stockholders and as of
the date of the Stockholder Meeting, (ii) any omission or alleged
omission to state a material fact required to be stated in the S-4
Registration Statement or necessary to make the statements therein
not misleading as of its effective date or (iii) any omission or
alleged omission to state a material fact required to be stated in
the Proxy Statement/Prospectus or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading as of the date on which the Proxy
Statement/Prospectus is distributed to the Company's stockholders
and as of the date of the Stockholder Meeting, and the Company
will reimburse Alpharma for any legal or any other expenses
reasonably incurred by Alpharma in connection with investigating
or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any untrue statement or omission
made in the S-4 Registration Statement or the Proxy
Statement/Prospectus in reliance upon and in conformity with
information furnished to the Company, in writing, by or on behalf
of Alpharma specifically for use in the preparation thereof.
(b) Alpharma will indemnify and hold harmless the Company, each of its
directors and officers and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange
Act against any losses, claims, damages or liabilities, joint or
several, to which the Company, such directors and officers or
controlling persons may become subject under the Securities Act,
Exchange Act, state securities or Blue Sky laws or otherwise,
insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are
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based upon (i) any untrue statement or alleged untrue statement of
a material fact contained in the S-4 Registration Statement as of
its effective date or in the Proxy Statement/Prospectus as of the
date on which it is distributed to the Company's stockholders and
as of the date of the Stockholder Meeting, (ii) any omission or
alleged omission to state a material fact required to be stated in
the S-4 Registration Statement or necessary to make the statements
therein not misleading as of its effective date or (iii) any
omission or alleged omission to state a material fact required to
be stated in the Proxy Statement/Prospectus or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading as of the date on which it is
distributed to the Company's stockholders and as of the date of
the Stockholder Meeting if the statement or omission was made in
reliance upon and in conformity with information relating to
Alpharma furnished in writing to the Company by or on behalf of
Alpharma specifically for use in connection with the preparation
of the S-4 Registration Statement or the Proxy
Statement/Prospectus.
(c) Each party entitled to indemnification under this Section (the
"Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying
Party to assume the defense of any such claim or any litigation
resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall
not be unreasonably withheld); and, provided, further, that the
failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under
this Section except to the extent that the Indemnifying Party is
adversely affected by such failure. The Indemnified Party may
participate in such defense at such party's expense; provided,
however, that the Indemnifying Party shall pay such expense if
representation of such Indemnified Party by the counsel retained
by the Indemnifying Party would be inappropriate due to actual or
potential conflicting interests between the Indemnified Party and
any other party represented by such counsel in such proceeding;
provided further that in no event shall the Indemnifying Party be
required to pay the expenses of more than one law firm per
jurisdiction as counsel for the Indemnified Party. The
Indemnifying Party also shall be responsible for the expenses of
such defense if the Indemnifying Party does not elect to assume
such defense. No Indemnifying Party, in the defense of any such
claim or litigation shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into
any settlement which
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does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect of such claim or litigation, and no
Indemnified Party shall consent to entry of any judgment or settle
such claim or litigation without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably
withheld.
4.5 Stock Listing. The Company shall file a listing application with the
Nasdaq National Market to list the Depositary Shares to be issued in
connection with the Merger, and upon exercise or conversion of options,
warrants and convertible securities of the Company which are exercised or
converted after the Effective Time, on the Nasdaq National Market and
shall use reasonable efforts to cause such listing application to be
approved.
4.6 Fiduciary Duties. Neither the Company nor its Board of Directors shall be
obligated to make either of the recommendations set forth in Section 4.1
to the extent that the making of such recommendation would be
inconsistent with the fiduciary duties of the Board of Directors of the
Company, as determined in good faith by the Company's Board of Directors.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF
ALPHARMA AND THE COMPANY
5.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The obligation of the Company to
consummate the Merger and the other transactions contemplated by the
Merger Agreement, and the respective obligations of Alpharma and the
Company to consummate the transactions contemplated by this Agreement and
the Ancillary Agreements (other than the obligation of Alpharma to make
the First Loan, which is subject to the fulfillment or waiver of the
conditions set forth in Section 4.1 of the Loan Agreement, and the
obligation of the Company to issue the Note, which is subject to the
fulfillment or waiver of the conditions set forth in Section 5.1 of the
Loan Agreement) are subject to the satisfaction of the following
conditions:
(a) Stockholder Approval. The Company's stockholders shall have
approved and adopted the Merger Agreement (including the exhibits
attached thereto) and transactions contemplated thereby, including
the Merger.
(b) S-4 Registration Statement. The S-4 Registration Statement shall
have become effective in accordance with the provisions of the
Securities Act,
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and no stop order suspending the effectiveness of the S-4
Registration Statement shall have been issued by the SEC and
remain in effect.
(c) Litigation. No action, suit or proceeding shall be pending or
threatened by or before any court, regulatory body, administrative
agency or any other governmental agency or body wherein an
unfavorable judgment, order, decree, stipulation or injunction
would (i) prevent consummation of the Merger or any of the other
transactions contemplated by the Merger Agreement, this Agreement,
the Guaranty Agreement and the Ancillary Agreements or (ii) cause
the Merger or any of the other transactions contemplated by the
Merger Agreement, this Agreement, the Guaranty Agreement and the
Ancillary Agreements to be rescinded following consummation, and
no such judgment, order, decree, stipulation or injunction shall
be in effect.
(d) Second Amendment to May 1998 Securities Purchase Agreement
Amendment. The Second Amendment shall be in full force and effect.
The Second Amendment Closing Date (as defined in the Second
Amendment) shall have occurred and all the other transactions
required by the Second Amendment to have occurred at or prior to
the Closing Date shall have occurred.
5.2 CONDITIONS TO ALPHARMA'S OBLIGATIONS. The obligation of Alpharma to
consummate the transactions contemplated by this Agreement and the
Ancillary Agreements (other than the obligation of Alpharma to make the
First Loan, which is subject to the fulfillment or waiver of the
conditions set forth in Section 4.1 of the Loan Agreement) is subject to
the fulfillment to its reasonable satisfaction, or the waiver by
Alpharma, on or prior to the Closing Date, of each of the following
conditions:
(a) Representations and Warranties Correct. The representations and
warranties of the Company which are set forth in the Loan
Agreement and incorporated herein pursuant to Section 3.1 hereof
shall be (x) true and correct on and as of the date hereof and (y)
true and correct in all material respects on and as of the Closing
Date with the same force and effect as if they had been made on
and as of the Closing Date, except in the case of clause (y) for
(i) those representations and warranties which address matters
only as of a particular date (which shall be true and correct as
of such date) and (ii) circumstances in which the failure of such
representations and warranties to be true and correct would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect with respect to the Company.
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(b) Performance. All covenants, agreements and conditions contained in
this Agreement to be performed or complied with on or prior to the
Closing Date by the Company shall have been performed or complied
with by the Company in all material respects on or prior to the
Closing Date.
(c) No Impediments. No statute, judgment, order or decree of any
court, regulatory body, administrative agency or any other
governmental agency or body shall be in effect which would impose
any material limitation on the ability of Alpharma to exercise
full rights of ownership of the Securities.
(d) No Defaults. The Company shall not be in default under an
indenture, mortgage, agreement, instrument or commitment
evidencing or under which there is at the time outstanding any
Indebtedness of the Company or any Subsidiary in excess of
$200,000 or which results in such Indebtedness, in an aggregate
amount (with other defaulted Indebtedness) in excess of $200,000,
becoming due and payable prior to its due date.
(e) No Material Adverse Events. Except as set forth in the schedules
attached to the Loan Agreement pursuant to Article III thereof, as
disclosed in the 1934 Act Filings (as defined in the Loan
Agreement) filed with the SEC prior to the date hereof or as set
forth in Schedule 4.1(e) to the Loan Agreement, since September
30, 1998, there shall have been no Material Adverse Effect with
respect to the Company (other than the continued incurrence of
losses in the ordinary course of business).
(f) Compliance Certificate. The Company shall have delivered to
Alpharma a certificate of the Company's President, dated the
Closing Date, certifying to the fulfillment of the conditions
specified in subsections (a), (b), (d) and (e) of this Section
5.2.
(g) Proceedings and Other Documents. All corporate and other
proceedings in connection with the transactions contemplated by
this Agreement, the Merger Agreement and the Ancillary Agreements
shall have been taken, and Alpharma shall have received such other
documents and instruments in form and substance reasonably
satisfactory to it and its counsel, as to such other matters
incident to the transaction contemplated hereby as it may
reasonably request. The Merger Agreement and the Ancillary
Agreements shall be in full force and effect. The Merger shall
have occurred and all the other transactions required by the
Merger Agreement and the Ancillary
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Agreements to have occurred at or prior to the Effective Time
shall have occurred.
(h) Opinion of Counsel. Alpharma shall have received the opinion of
▇▇▇▇ and ▇▇▇▇ LLP, counsel for the Company, dated the Closing
Date, substantially with respect to the matters set forth on
Exhibit A attached hereto.
(i) Consents, Waivers, Etc. The Company shall have obtained all
consents or waivers necessary to execute and deliver this
Agreement, the Merger Agreement and the Ancillary Agreements,
effect the Merger, issue the Securities and carry out the
transactions contemplated hereby and thereby, and all such
consents and waivers shall be in full force and effect.
(j) Delivery. The Company shall have delivered to Alpharma (i) the
Note (in accordance with Section 4.1(l) of the Loan Agreement) and
(ii) the following:
(A) A certified copy of the Company's certificate of
incorporation and all amendments thereto, appropriately
authenticated;
(B) A copy of the Company's bylaws, as amended to date,
certified as being true by a principal Officer of the
Company; and
(C) A certificate of good standing of the Company as a foreign
corporation certified as of a recent date by the Secretary
of State of the Commonwealth of Massachusetts, and from
every jurisdiction in which the Company is qualified to do
business.
(k) Appraisal Rights. The number of shares as to which appraisal
rights have been asserted by stockholders of the Company in
connection with the Merger pursuant to Section 262 of the Delaware
General Corporation Law shall not exceed 5% of the number of
shares of Voting Capital Stock then outstanding.
(l) Board of Directors. The Board of Directors of the Company shall
have elected a nominee of Alpharma to serve as a Class I Director
of the Company immediately prior to, or concurrently with, the
Effective Time.
(m) Ancillary Agreements. The Merger Agreement and each of the
Ancillary Agreements shall have been executed and delivered by the
Company and the other parties thereto.
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(n) Call Option Transfer. Immediately following the Effective Time of
the Merger, the Company shall have transferred the Call Option to
Alpharma by executing the Call Option Assignment attached hereto
as Exhibit C.
5.3 CONDITIONS TO THE COMPANY'S OBLIGATIONS. The Company's obligations to
consummate the Merger and the other transactions contemplated by this
Agreement, the Merger Agreement and the Ancillary Agreements (other than
the obligation of the Company to issue the Note, which is subject to the
fulfillment or waiver of the conditions set forth in Section 5.1 of the
Loan Agreement) are subject to the fulfillment to its reasonable
satisfaction, or the waiver by the Company, on or prior to the Closing
Date, of each of the following conditions:
(a) Representations and Warranties Correct. The representations and
warranties of Alpharma in Section 3.2 hereof shall be (x) true and
correct on and as of the date hereof and (y) true and correct in
all material respects on and as of the Closing Date with the same
force and effect as if they had been made on and as of the Closing
Date, except in the case of clause (y) for (i) those
representations and warranties which address matters only as of a
particular date (which shall be true and correct as of the such
date) and (ii) circumstances in which the failure of such
representations and warranties to be true and correct would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect with respect to Alpharma.
(b) Performance. All covenants, agreements and conditions contained in
this Agreement to be performed or complied with on or prior to the
Closing Date by Alpharma shall have been performed or complied
with in all material respects on or prior to the Closing Date.
(c) Compliance Certificate. Alpharma shall have delivered to the
Company a certificate of Alpharma's President, dated the Closing
Date, certifying to the fulfillment of the conditions specified in
subsections (a) and (b) of this Section 5.3.
(d) No Impediments. No statute, judgment, order or decree of any
court, regulatory body, administrative agency or any other
governmental agency or body shall be in effect which would impose
any material limitation on the ability of the Company to exercise
its rights under this Agreement and the Ancillary Agreements.
(e) Opinion of Counsel. The Company shall have received the opinion of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for Parent and Alpharma, dated the
Closing
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Date, substantially with respect to the matters set forth on
Exhibit B attached hereto.
(f) Consents, Waivers, Etc. On or prior to the Closing Date, the
Company shall have obtained all consents or waivers necessary to
execute and deliver this Agreement, the Merger Agreement and the
Ancillary Agreements, effect the Merger, issue the Securities and
carry out the transactions contemplated hereby and thereby, and
all such consents and waivers shall be in full force and effect.
(g) Ancillary Agreements. Each of the Ancillary Agreements shall have
been executed and delivered by Alpharma and the other parties
thereto.
(h) Guaranty Agreement. The Guaranty Agreement shall have been
executed and delivered by Parent.
(i) Proceedings and Other Documents. All corporate and other
proceedings in connection with the transactions contemplated by
this Agreement, the Merger Agreement, the Guaranty Agreement and
the Ancillary Agreements required to be taken by Alpharma or
Parent shall have been taken, and the Company shall have received
such other documents and instruments in form and substance
reasonably satisfactory to it and its counsel, as to such other
matters incident to the transaction contemplated hereby as it may
reasonably request. The Guaranty Agreement and the Ancillary
Agreements shall be in full force and effect.
(j) First Loan. Alpharma shall have made the First Loan to the Company
under the Loan Agreement and any other Loan properly requested by
the Company to be made on or prior to the Closing Date.
5.4 COOPERATION. The Company and Alpharma shall each take all reasonable
steps and use all reasonable efforts necessary or desirable, and shall
cooperate with the other party to enable it, to obtain, as promptly as
practicable, all approvals, authorizations, certificates, consents and
clearances required to consummate the transactions contemplated by this
Agreement, the Merger Agreement and the Ancillary Agreements and satisfy
the conditions set forth in this Article V. Each of the Company and
Alpharma shall cooperate with the other party to agree, prior to the
Effective Time, upon a reasonable valuation of the Call Option.
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ARTICLE VI
COVENANTS OF ALPHARMA AND PARENT
6.1 STANDSTILL AGREEMENT. Each of the Parent and Alpharma agrees that, during
the period beginning on the date hereof and ending on (a) the date this
Agreement terminates (if this Agreement terminates pursuant to Section
8.8(a)(i) or (ii)) or (b) the seventh anniversary of the date this
Agreement terminates (if this Agreement terminates pursuant to Section
8.8(a)(iii)) (the "Standstill Period"), unless it has obtained the prior
written consent of the Company by vote of the majority of the
Non-Alpharma Directors of the Company then in office, it will not, and it
will cause its Affiliates to not:
(i) acquire, directly or indirectly, by purchase or otherwise, of
record or beneficially, any Voting Capital Stock (which for
purposes of this Agreement shall include without limitation New
Common Stock, Depositary Shares and Depositary Receipts), any
securities of the Company convertible into Voting Capital Stock
(which for purposes of this Agreement shall include without
limitation any convertible notes of the Company issued pursuant to
the Loan Agreement), or any rights, options or warrants to acquire
Voting Capital Stock of the Company, if after such acquisition
(and after giving effect to the conversion of any such convertible
securities and the exercise of any such rights, options or
warrants held by Parent, Alpharma and their respective Affiliates
(including an aggregate of 5,614,035 shares of Common Stock of the
Company issued or issuable upon conversion of the Note,
irrespective of whether the Note or any principal thereunder is
outstanding at such time)), Parent, Alpharma and their respective
Affiliates would together own of record or beneficially in the
aggregate more than forty percent (40%) of the aggregate voting
power of all classes of Voting Capital Stock that are then
outstanding or that are issuable upon conversion or exercise of
convertible securities, options, warrants or rights of the Company
that are then outstanding (the "Forty Percent Limit"); provided
that notwithstanding the provisions of this clause (i) the
foregoing restrictions shall not apply to voting securities
acquired (or deemed owned as provided above) in connection with
the existence or exercise of the Call Option. If the number of
shares of Voting Capital Stock that are then outstanding or that
are issuable upon conversion or exercise of convertible
securities, options, warrants or rights of the Company that are
then outstanding is reduced or if the aggregate ownership of
Parent, Alpharma and their respective Affiliates in the Company is
increased as a result of a recapitalization of the Company or as a
result of any other action taken by the Company, Parent, Alpharma
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and their respective Affiliates will not be required to dispose
of (and may continue to vote in accordance with Section 6.4) any
of its or their holdings of Voting Capital Stock even though
such action resulted in Parent's, Alpharma's and their
respective Affiliates' aggregate ownership exceeding the Forty
Percent Limit.
Except as otherwise explicitly provided above, if Parent,
Alpharma and their respective Affiliates shall at any time
during the Standstill Period own in the aggregate in excess of
the Forty Percent Limit, then:
(X) Parent and Alpharma shall (or shall cause their
respective Affiliates to) sell as promptly as
practicable under the circumstances sufficient
Voting Capital Stock so that after such sale Parent,
Alpharma and their respective Affiliates shall not
own in the aggregate more than the Forty Percent
Limit, and
(Y) notwithstanding Section 6.4 to the contrary, Parent
and Alpharma shall (and shall cause their respective
Affiliates to) refrain from voting on any matter as
to which the holders of all classes of Voting
Capital Stock shall have the right to vote with
respect to any such Voting Capital Stock held by
Parent, Alpharma and their respective Affiliates in
excess of the Forty Percent Limit (provided,
however, that the foregoing paragraph shall not be
deemed to limit the Company's remedies in the event
that the excess Voting Capital Stock were acquired
in violation of this Section);
(ii) "solicit" proxies with respect to voting securities of the
Company under any circumstances or become a "participant" in any
"election contest" relating to the election of directors of the
Company, as such terms are defined in Regulation 14A under the
Exchange Act;
(iii) deposit any voting securities of the Company in a voting trust
or subject them to a voting agreement or other agreement of
similar effect;
(iv) initiate, propose or otherwise solicit stockholders of the
Company for the approval of one or more stockholder proposals at
any time, or induce or attempt to induce any other person to
initiate any stockholder proposal;
(v) present, or propose to present, publicly or otherwise, to the
Company, the Board of Directors of the Company or the
stockholders of the
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Company any proposal or offer for a merger, tender or exchange
offer or other form of business combination involving the
Company, or effect, propose to effect or cause to occur any of
the foregoing; or
(vi) take any action individually or jointly with any partnership,
limited partnership, syndicate, or other group or assist any
other person, corporation, entity or group in taking any action
it could not take individually under the terms of this
Agreement.
6.2 RESIGNATION. Alpharma shall cause any director of the Company nominated
by Alpharma and appointed to the Board of Directors as contemplated by
Section 5.2(l) of this Agreement and Section 6.5 of the Loan Agreement,
and any successor or replacement thereof then in office who was elected
to the Board of Directors upon the nomination of Alpharma (the "Alpharma
Director"), to resign from the Board of Directors effective upon the
Option Expiration Date.
6.3 RECUSAL.
(a) Alpharma Director. Alpharma shall cause the Alpharma Director to
abstain from voting on and/or recuse himself from any matter to be
discussed, considered and/or acted upon at any meeting of the
Board of Directors of the Company or of a committee of the Board
of Directors of the Company with respect to which the Company and
Alpharma have a potential conflict of interest, if counsel to the
Company advises the Board of Directors of the Company or such
committee of the Board of Directors of the Company that such
abstention and/or recusal is appropriate given such potential
conflict of interest. The Company shall have the right by vote of
a majority of all directors of the Company then in office other
than the Alpharma Director (the "Non-Alpharma Directors") to
exclude the Alpharma Director from access to any documents or
other materials provided to the other members of the Board of
Directors of the Company which relate to any matter with respect
to which the Company and Alpharma have a potential conflict of
interest if counsel to the Company advises the Non-Alpharma
Directors that such exclusion is appropriate given such potential
conflict of interest.
(b) Non-Alpharma Directors. The Company shall request that any Non-
Alpharma Director abstain from voting and/or recuse himself from
any matter to be discussed, considered and/or acted upon at any
meeting of the Board of Directors of the Company or of a
Committee of the Board of Directors of the Company with respect
to which the Company and such Non-Alpharma Director (or an
Affiliate of such
▇-▇▇
▇▇
▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇) have a potential conflict of interest, if
counsel to the Company advises the Board of Directors of the
Company or such committee of the Board of Directors of the
Company that such abstention and/or recusal is appropriate given
such potential conflict of interest.
6.4 VOTING OF CAPITAL STOCK. During the Standstill Period, subject to clause
(Y) of clause (i) of Section 6.1, in any election of directors and in any
other vote to be taken by the stockholders of the Company as to any
matter (whether taken at an annual or special meeting of stockholders or
by written action), Parent and Alpharma shall, and shall cause their
respective Affiliates to, vote any Depositary Shares (or shares of New
Common Stock following the Option Expiration Date), or other Voting
Capital Stock which Parent, Alpharma or their respective Affiliates hold,
in the same manner and in the same proportion as the votes cast by the
other holders of Depositary Shares (or shares of New Common Stock
following the Option Expiration Date) or such other Voting Capital Stock.
ARTICLE VII
COVENANTS OF THE COMPANY
The Company hereby covenants and agrees as follows:
7.1 GENERAL COMPANY COVENANTS. The Company shall perform and comply with the
covenants of the Company set forth in Sections 6.1 through 6.8 and
Sections 7.1 through 7.13 of the Loan Agreement (including the
definitions set forth in Section 1.1 of the Loan Agreement to the extent
applicable to such sections), which covenants are incorporated herein by
reference, whether or not the Loan Agreement is in effect or any amounts
are outstanding thereunder, as if such covenants (including the
definitions set forth in Section 1.1 of the Loan Agreement to the extent
applicable to such sections) were included herein. Any waiver by Alpharma
or any holder of the Note of any of such covenants under the terms of the
Loan Agreement shall not constitute a waiver of any covenant of the
Company under this Agreement unless Alpharma waives such covenant in
accordance with Section 8.5(a).
7.2 CALL OPTION TRANSFER. Immediately following the Effective Time of the
Merger, the Company shall transfer the Call Option to Alpharma by
executing the Call Option Assignment attached hereto as Exhibit C.
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7.3 FUTURE OPTION GRANTS. Any options to purchase shares of Common Stock
granted by the Company to officers, directors or employees of, or
consultants or advisors to, the Company from and after the date hereof
through the Option Expiration Date shall provide that such options may
not be exercised on the Option Closing Date (as defined in the Depositary
Agreement).
7.4 FURTHER ASSURANCES. From time to time the Company shall execute and
deliver to Alpharma such other instruments, certificates, agreements and
documents and take such other action and do all other things as may be
reasonably requested by Alpharma in order to implement or effectuate the
terms and provisions of this Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 NOTICES. All notices, requests, demands, claims, and other communications
to any party hereunder or pursuant to the terms hereof shall 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:
If to Alpharma, to:
Alpharma USPD Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
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with a copy to:
Alpharma USPD Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Legal Officer
If to Parent, to:
Alpharma, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
with a copy to:
Alpharma, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Legal Officer
If to the Company, to:
Ascent Pediatrics, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇
with a copy to:
▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Any party may give any such notice, request, demand, claim, or other
communication using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the party for whom it is intended. Any party may
change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other parties
notice in the manner herein set forth.
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8.2 DUPLICATE ORIGINALS. The parties may sign any number of copies of this
Agreement. Each signed copy shall be an original, but all of them
together represent the same agreement.
8.3 PRESS RELEASES AND ANNOUNCEMENTS. Neither Parent or Alpharma, on the one
hand, nor the Company, on the other hand, shall issue any press release
or public disclosure relating to the existence of, or the subject matter
of this Agreement, the Merger Agreement or any of the Ancillary
Agreements without the prior written approval of the other party;
provided, however, that any party hereto may make any public disclosure
it believes in good faith is required by law or regulation (in which case
the disclosing party shall advise the other party and provide it with a
copy of the proposed disclosure prior to making the disclosure).
8.4 GOVERNING LAW. The laws of the State of Delaware, without regard to
principles of conflicts of law, shall govern this Agreement.
8.5 AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in
case of an amendment, by Alpharma and the Company, or in the
case of a waiver, by the party against whom the waiver is to be
effective; provided that no such amendment or waiver on behalf
of the Company shall be effective without the approval of a
majority of the Non-Alpharma Directors.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as waiver thereof nor shall
any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies
provided by law.
8.6 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that no party may assign, delegate or
otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other party hereto. Notwithstanding the
foregoing, Alpharma may assign, delegate or otherwise transfer all of its
rights and obligations under this Agreement to a transferee that acquires
all or substantially all of the business, assets or capital stock of
Alpharma; provided that (a) Alpharma also assigns, delegates or otherwise
transfers all of its rights and obligations under the Depositary
Agreement to such transferee and (b)
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such transferee agrees in writing to be bound by and subject to the
provisions of this Agreement and the Depositary Agreement.
8.7 SPECIFIC PERFORMANCE. The Company, Parent and Alpharma acknowledge and
agree that Alpharma's and the Company's respective remedies at law for a
breach or threatened breach of any of the provisions of this Agreement
would be inadequate and, in recognition of that fact, agree that, in the
event of a breach or threatened breach by Alpharma, Parent or the Company
of any of the provisions of this Agreement, in addition to any remedies
at law or otherwise, Alpharma and the Company, respectively, without
posting any bond shall be entitled to seek equitable relief in the form
of specific performance, a temporary restraining order, a temporary or
permanent injunction or any other equitable remedy which may then be
available.
8.8 TERMINATION.
(a) This Agreement shall terminate upon the earliest of (i) September
30, 1999 if the Closing has not occurred prior to or on such date,
(ii) the Option Closing Date and (iii) the Option Expiration Date;
provided that, notwithstanding the foregoing, (A) the terms of
Sections 4.4 and 8.12 of this Agreement and the obligations
thereunder shall survive the termination contemplated by this
Section 8.8 in accordance with their respective terms, and (B) the
terms of Sections 6.1 and 6.4 of this Agreement and the
obligations thereunder shall survive the termination contemplated
by this Section 8.8 in accordance with their respective terms and
shall terminate upon the expiration of the Standstill Period.
(b) Notwithstanding the foregoing, (i) Alpharma may terminate this
Agreement upon written notice to the Company if (A) the Board of
Directors of the Company withdraws its recommendation of the
Merger or (B) the stockholders fail to approve the Merger
Agreement (including the exhibits thereto) and the transactions
contemplated thereby, including the Merger, at the Stockholder
Meeting, and (ii) the Company may terminate this Agreement upon
written notice to Alpharma if the Board of Directors withdraws its
recommendation of the Merger in accordance with its fiduciary
duties as provided in Section 4.6 of this Agreement. In either of
such events, the Company shall pay to Alpharma in cash a
termination fee in the amount of $1,200,000, such termination fee
to be payable within ten Business Days after such termination.
8.9 ENTIRE AGREEMENT. This Agreement (including the documents referred to
herein, including the Merger Agreement, the Ancillary Agreements and the
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Guaranty Agreement) constitutes the entire agreement among the parties
and supersedes any prior understanding, agreements or representations as
between the parties, written or oral, with respect to the subject matter
hereof.
8.10 SEPARABILITY. In case any provision in this Agreement 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.
8.11 HEADINGS, ETC. The Headings of the Articles and Sections of this
Agreement have been inserted for convenience of reference only, are not
to be considered a part hereof and shall in no way modify or restrict any
of the terms or provisions hereof.
8.12 CONFIDENTIALITY. Each of Parent and Alpharma agree that it will keep
confidential and will not disclose, divulge or use for any purpose other
than to monitor Alpharma's investment in the Company any confidential,
proprietary or secret information which Parent or Alpharma may obtain
from the Company pursuant to financial statements, reports and other
materials submitted by the Company to Parent or Alpharma pursuant to this
Agreement, or pursuant to visitation or inspection rights granted
hereunder, unless such information is known, or until such information
becomes known, to the public (other than as a result of a breach of this
Section 8.12 by Parent or Alpharma); provided, however that Parent or
Alpharma, as the case may be, may disclose such information if required
by law, provided that Parent or Alpharma, as the case may be, provides
prior written notice to the Company of such proposed disclosure and takes
reasonable steps to avoid and/or minimize the extent of any such required
disclosure. Each of Parent and Alpharma further acknowledge and agree
that certain of the confidential, proprietary or secret information which
it may obtain hereunder may be material non-public information and that
neither it nor any of its Affiliates shall engage in any acquisition,
disposition or other similar transaction involving the Company's
securities on the basis of, or at such time as Parent or Alpharma
possesses, such material non-public information.
[REMAINDER OF PAGE LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above set forth.
Attest: ASCENT PEDIATRICS, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇
----------------------------- ----------------------------
Secretary Title: President
Attest: ALPHARMA USPD INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------- ----------------------------
Secretary Title: President
Attest: ALPHARMA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------- ----------------------------
Secretary Title: Vice President
Finance and Chief
Financial Officer
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Exhibit A
OPINION OF ▇▇▇▇ AND ▇▇▇▇ LLP
1. Each of the Company and Merger Sub is a corporation existing and in good
standing under the General Corporation Law of the State of Delaware.
2. The Company has the requisite corporate power and authority to execute,
deliver and perform the Merger Agreement and the Transaction Agreements.
The Merger Sub has the requisite corporate power and authority to
execute, deliver and perform the Merger Agreement.
3. The Board of Directors of the Company has adopted by requisite vote the
resolutions necessary to authorize the execution, delivery and
performance by the Company of the Merger Agreement and the Transaction
Agreements. The Board of Directors of the Merger Sub has adopted by
requisite vote the resolutions necessary to authorize the execution,
delivery and performance by the Merger Sub of the Merger Agreement.
4. The Company has duly executed and delivered the Merger Agreement and the
Transaction Agreements. The Merger Sub has duly executed and delivered
the Merger Agreement.
5. Each of the Merger Agreement and the Transaction Agreements is a valid
and binding obligation of the Company and is enforceable against the
Company in accordance with its respective terms. The Merger Agreement is
a valid and binding obligation of the Merger Sub and is enforceable
against the Merger Sub in accordance with its terms.
6. The Note has been duly authorized, executed, issued and delivered by the
Company and constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
7. The execution and delivery by the Company of the Merger Agreement
and the Transaction Agreements and the performance of its obligations
thereunder will not (a) constitute a violation of the certificate of
incorporation or bylaws of the Company, (b) constitute a material
violation by the Company of any statutory law or governmental
regulation covered by this Opinion, or (c) breach, or result in a default
under any existing obligation of the Company under any of its Other
Specified Agreements. The execution and delivery by the Merger Sub of
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the Merger Agreement and the performance of its obligations thereunder
will not (a) constitute a violation of the certificate of incorporation
or bylaws of the Merger Sub or (b) constitute a material violation by the
Merger Sub of any statutory law or governmental regulation covered by
this Opinion. The term Other Specified Agreements means those agreements
set forth on Schedule A attached hereto.
8. Except as provided on the schedule of Governmental Filings attached
hereto as Schedule B, to our knowledge and based in part upon the
representations of Alpharma in the Master Agreement, neither the Company
nor Merger Sub was required to obtain any consent, approval,
authorization or order of, or make any filings or registrations with, any
United States federal court or governmental agency in order to obtain the
right to enter into or perform under the Merger Agreement or, in the case
of the Company, any of the Transaction Agreements, or to take any of the
actions taken by it on or prior to this date to consummate the
transactions contemplated thereby, except for (i) such consents,
authorizations, approvals, orders, registrations or filings as have been
obtained or made prior to the date hereof, or as permitted to be made or
obtained on or after the date hereof pursuant to the Merger Agreement,
the Transaction Agreements and the exhibits and schedules thereto,
respectively; and (ii) such consents, authorizations, approvals, orders,
registrations or filings as could not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect.
9. Neither the Company nor Merger Sub is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
▇-▇▇
▇▇
▇▇▇▇▇▇▇ ▇
Form of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ Opinion
--------------------------------
1. Alpharma is a corporation existing and in good standing under the laws
of the State of Maryland. Parent is a corporation existing and in good
standing under the General Corporation Law of the State of Delaware.
2. Alpharma has the corporate power to enter into and perform its
obligations under the Transaction Agreements to which it is a party.
Parent has the corporate power to enter into and perform its
obligations under the Transaction Agreements to which it is a party.
3. The Board of Directors of Alpharma has adopted by requisite vote the
resolutions necessary to authorize the execution, delivery and
performance by Alpharma of the Transaction Agreements to which it is a
party. The Board of Directors of Parent has adopted by requisite vote
the resolutions necessary to authorize the execution, delivery and
performance by Parent of the Transaction Agreements to which it is a
party.
4. Alpharma has duly executed and delivered the Transaction Agreements to
which it is a party. Parent has duly executed and delivered the
Transaction Agreements to which it is a party.
5. Each of the Transaction Agreements to which Alpharma or Parent is a
party is a valid and binding obligation of Alpharma or Parent,
respectively, and is enforceable against Alpharma or Parent, as
applicable, in accordance with its respective terms.
6. The execution and delivery by each of Alpharma and Parent of the
Transaction Agreements to which it is a party and performance of its
obligations thereunder will not (a) constitute a violation of the
certificate of incorporation or bylaws of Alpharma or Parent,
respectively, (b) constitute a material violation by Alpharma or
Parent, respectively, of any applicable provision of statutory law or
governmental regulation covered by this Opinion or (c) breach, or
result in a default under any existing obligation of Alpharma or
Parent, respectively, under any of its Other Specified Agreements. Our
opinion in this paragraph does not address any impact the actions of
Alpharma or Parent may have under any financial covenants or tests, any
consequences a default by Alpharma or Parent under any of the
Transaction Agreements may have under any of the Other Specified
Agreements or any cross default provisions in the Other Specified
Agreements. The term Other Specified Agreements means those agreements
set forth on Schedule I attached hereto.
7. To our actual knowledge and based in part upon your representations in
the Master Agreement, neither Alpharma nor Parent was required to
obtain any consent, approval, authorization or order of, or make any
filings or registrations with, any United States
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34
federal court or governmental agency in order to obtain the right to
enter into or perform under any of the Transaction Agreements, or to
take any of the actions taken by it on or prior to this date to
consummate the transactions contemplated thereby, except for (i) such
consents, authorizations, approvals, orders, registrations or filings
as have been obtained or made prior to the date hereof, or as permitted
to be made or obtained on or after the date hereof pursuant to the
Transaction Agreements and the exhibits and schedules thereto,
respectively; and (ii) such consents, authorizations, approvals,
orders, registrations or filings as could not individually or in the
aggregate be expected to have a Material Adverse Effect.
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EXHIBIT C
CALL OPTION ASSIGNMENT
________________ __, 1999
Reference is hereby made to the Depositary Agreement (the "Depositary
Agreement") dated as of February 16, 1999 by and among Ascent Pediatrics, Inc.,
a Delaware corporation, Alpharma USPD Inc., a Maryland corporation, and State
Street Bank and Trust Company and to the Master Agreement (the "Master
Agreement") dated as of February 16, 1999 by and between the Company and
Alpharma.
In accordance with Sections 5.2(n) and 7.2 of the Master Agreement and
Section 10.09 of the Depositary Agreement, the Company hereby:
(i) assigns, transfers and otherwise delegates such of its rights
and obligations under the Call Option (as defined in the Depositary
Agreement) so that following such assignment, transfer and delegation,
Alpharma shall have the rights and obligations under the Call Option
specified in the Depositary Agreement;
(ii) agrees to undertake such other obligations and actions with
respect to Alpharma as are specified in the Depositary Agreement; and
(iii) relinquishes any and all rights to exercise the Call Option.
Executed as of the date set forth above.
ASCENT PEDIATRICS, INC.
By:
-------------------------------------
Its:
------------------------------------
Accepted:
ALPHARMA USPD INC.
By:
--------------------------
Its:
-------------------------