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EXHIBIT 10.5
GUARANTY AGREEMENT
GUARANTY AGREEMENT, dated as of February 16, 1998 (the "Guaranty
Agreement"), from Alpharma Inc., a Delaware corporation ("Parent"), for the
benefit of Ascent Pediatrics, Inc., a Delaware corporation ("Ascent"), and each
of its successors and assigns, under the Loan Agreement dated as of the date
hereof (the "Loan Agreement") between Ascent and Alpharma USPD, Inc., a Maryland
corporation ("Alpharma USPD"), the Master Agreement dated as of the date hereof
among Ascent, Parent and Alpharma USPD, the Depositary Agreement dated as of the
date hereof among Ascent, Alpharma USPD and State Street Bank and Trust Company
as Depositary and the Registration Rights Agreement dated as of the date hereof
between Ascent and Alpharma USPD (collectively, the "Agreements"). Capitalized
terms used herein and not otherwise defined herein shall have the meanings given
to them in the Agreements.
WHEREAS, Parent owns and holds all of the issued and outstanding capital
stock of Alpharma USPD;
WHEREAS, as a condition to Ascent's execution and delivery of the
Agreements and its performance of the transactions contemplated thereby, Ascent
has required Parent to guarantee Alpharma USPD's performance and compliance with
the covenants, agreements, obligations, terms and conditions applicable to
Alpharma USPD contained in the Agreements;
WHEREAS, in consideration for the execution and delivery of the Agreements
by Ascent and the performance by Ascent of the transactions contemplated
thereby, Parent is willing to guarantee Alpharma USPD's performance and
compliance with the covenants, agreements, obligations, terms and conditions
applicable to Alpharma USPD contained in the Agreements;
NOW, THEREFORE, in consideration of the mutual agreements herein and in
the Agreements contained, the parties hereto, intending to be legally bound
hereby, agree as follows:
SECTION 1. Guarantee.
Parent irrevocably and unconditionally guarantees to Ascent and its
successors and assigns the due and punctual performance of and compliance with
all covenants, agreements, obligations, terms and conditions of each of the
Agreements executed or to be executed by Alpharma USPD and required to be
performed or complied with by Alpharma USPD. This guarantee is an irrevocable
guaranty of performance and compliance and shall continue in effect with respect
to each of the Agreements
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notwithstanding (a) any extension or modification of the terms of such
Agreement, (b) any assumption of any such guaranteed obligation by any other
party or (c) any other act or event which might otherwise operate as a legal or
equitable discharge of Parent's obligations under this Agreement.
Notwithstanding the foregoing, this guaranty shall not apply to an extension or
modification of the terms of an Agreement, without the prior written consent of
Parent, if such extension or modification is agreed to by Alpharma USPD at a
time when such party is not an Affiliate (as defined in the Loan Agreement) of
Parent. Parent hereby waives all special suretyship and other defenses and
notice requirements. This guarantee is in no way conditioned upon any
requirement that Ascent first attempt to collect or enforce the guaranteed
obligation from or against Alpharma USPD. So long as any obligation of Alpharma
USPD to Ascent under any of the Agreements remains outstanding, Parent hereby
waives (but only with respect to Ascent and not as to any other parties) all
rights to subrogation arising out of any payment by Parent under this Guaranty
Agreement.
SECTION 2. Representations and Warranties. Parent represents and warrants
to the Company that:
(a) Parent (i) is duly incorporated, validly existing and in good standing
under the laws of the State of Delaware, 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 (as defined in the Loan Agreement) with respect to Parent),
(b) it has full power and authority to execute, deliver and perform this
Guaranty Agreement,
(c) the person executing this Guaranty Agreement on behalf of Parent has
the appropriate authority to act on behalf of Parent,
(d) this Guaranty Agreement has been duly authorized, executed and
delivered by Parent and constitutes a legal, valid and binding agreement of
Parent, enforceable against Parent 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
(e) the compliance by Parent with the provisions of this Guaranty
Agreement and the consummation of the transactions contemplated hereby will not
result in a breach or violation of or conflict with any of the terms or
provisions of, or
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constitute a default under, (i) the Certificate of Incorporation and Bylaws of
Parent, (ii) any contract or other agreement to which Parent is a party or by
which Parent 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 Parent, 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 Parent.
SECTION 3. Costs and Expenses. Parent will pay all out-of-pocket costs and
expenses (including without limitation reasonable legal fees and expenses)
incurred by or on behalf of Ascent in connection with the enforcement of
Parent's obligations under this Guaranty Agreement.
SECTION 4. Notices, etc.
(a) Parent hereby covenants and agrees that Parent shall provide Ascent
with notice of any bankruptcy, insolvency, reorganization, arrangement,
adjustment, composition, dissolution, liquidation, or the like of Parent.
(b) 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 Parent, to:
Alpharma, Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxx Xxx, Xxx Xxxxxx 00000
Attention: President
with a copy to:
Alpharma, Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxx Xxx, Xxx Xxxxxx 00000
Attention: Chief Legal Officer
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If to Ascent, to:
Ascent Pediatrics, Inc.
000 Xxxxxxxxxxx Xxxxxx, Xxxxx X000
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxx
with a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, 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.
SECTION 5. Amendments and Waivers. No term or provision of this Guaranty
Agreement may be changed, modified, amended, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which
enforcement of such change, modification, amendment, waiver, discharge or
termination is sought.
SECTION 6. Miscellaneous. This Guaranty Agreement shall remain in full
force and effect until payment in full of all sums payable by Alpharma USPD
under the Agreements and performance in full of all obligations of Parent
hereunder or of Alpharma USPD in accordance with the terms and conditions of the
Agreements. The obligations of each of the parties under this Guaranty Agreement
shall not be assigned without the prior written consent of the other party
hereto. In addition, Ascent shall not assign this Guaranty Agreement to another
party unless such assignment is made in connection with the assignment to such
party of at least one of the Agreements. This Guaranty Agreement shall inure to
the benefit of, and be binding on and enforceable against, the successors and
assigns of the respective parties hereto. The headings contained in this
Guaranty Agreement are for purposes of reference only and shall not affect in
any way the meaning or interpretation of this Guaranty Agreement. Any provision
of this Guaranty Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating
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the remaining provisions hereof or affecting the validity or enforceability of
such provisions in any other jurisdiction. This Guaranty Agreement constitutes
the entire agreement and supersedes all prior agreements and understandings,
both written and oral, between the parties with respect to the subject matter
hereof. This Guaranty Agreement may be executed in several counterparts, each of
which shall be deemed an original, and all of which shall constitute one and the
same instrument. This Guaranty Agreement shall be governed in all respects,
including without limitation validity, interpretation and effect, by the laws of
the State of Delaware.
IN WITNESS WHEREOF, the parties have duly executed this Guaranty Agreement
as of the date first above written.
ALPHARMA INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Alpharma, Inc.
Title: Vice President Finance and
Chief Financial Officer
ASCENT PEDIATRICS, INC.
By: /s/ Xxxx X. Xxx
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Name: Xxxx X. Xxx
Title: President and
Chief Executive Officer
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