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EXHIBIT 99.1
EXCLUSIVE REMEDY AGREEMENT
This EXCLUSIVE REMEDY AGREEMENT (this "EXCLUSIVE REMEDY AGREEMENT") is made
effective as of October 1, 2001 by and among Medicis Pharmaceutical Corporation,
a Delaware corporation (the "PARENT"), Ascent Pediatrics, Inc., a Delaware
corporation (the "COMPANY"), FS Private Investments LLC, a Delaware limited
liability company ("FS PRIVATE"), Xxxxxx Xxxx Investors II L.P., a Delaware
limited partnership ("FS II"), FS Employee Investors LLC, a Delaware limited
liability company ("FS EMPLOYEE"), FS Ascent Investments LLC, a Delaware limited
liability company ("FS ASCENT"), FS Parallel Fund L.P., a Delaware limited
partnership ("FS PARALLEL"), BancBoston Ventures Inc. ("BANCBOSTON"), Xxxxx
Partners ("XXXXX"), Xxxxxxx X. Xxxxxxx, Sc.D. ("XXXXXXX"), Xxxxxx X. Xxxxxxx
("XXXXXXX"), Medical Science Partners L.P. ("MEDICAL SCIENCE") and Xxxxxx
Xxxxxxxx, Ph.D. ("CLEMENTE").
WHEREAS, each share of common stock of the Company, par value $.00004 per
share (the "COMPANY COMMON STOCK"), is currently held by State Street Bank and
Trust Company as depositary (the "DEPOSITARY") under that certain Depositary
Agreement dated February 16, 1999, as amended, by and among the Company, the
Depositary and Alpharma USPD, Inc. (the "DEPOSITARY AGREEMENT"). Each share of
Company Common Stock is evidenced by a depositary share (each a "DEPOSITARY
SHARE") which is represented by a depositary receipt;
WHEREAS, each of FS Private, FS II, FS Employee, FS Ascent, FS Parallel,
BancBoston, Flynn, Baddour, Xxxxxxx, Medical Science and Clemente are holders of
the issued and outstanding Depositary Shares as set forth opposite such holder's
name on SCHEDULE A hereto (such Depositary Shares owned and any additional
Depositary Shares issued during the Term hereof being referred to as the
"SUBJECT SHARES" and each holder of the Subject Shares a "DEPOSITARY HOLDER" and
collectively the "DEPOSITARY HOLDERS");
WHEREAS, each Depositary Holder desires that Parent, MPC Merger Corp., a
Delaware corporation and wholly owned subsidiary of Parent ("MERGER SUB"), and
the Company enter into an Agreement and Plan of Merger dated the date hereof
(the "MERGER AGREEMENT"; capitalized terms used but not defined herein shall
have the meanings set forth in the Merger Agreement) providing for the merger of
Merger Sub with and into the Company (the "MERGER") upon the terms and subject
to the conditions set forth in the Merger Agreement; and
WHEREAS, each Depositary Holder and the Company are executing this
Exclusive Remedy Agreement as an inducement to Parent and Merger Sub to enter
into and execute the Merger Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by Parent
and Merger Sub of the Merger Agreement and the mutual covenants, conditions and
agreements contained herein and therein, the parties agree as follows:
1. TERM. This Exclusive Remedy Agreement shall terminate upon the
earliest to occur of (a) the consummation of the Merger, (b) the termination of
the Merger Agreement pursuant to its terms and (c) the Drop Dead Date; provided,
however, that in the
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event that the Merger is consummated then SECTIONS 3, 4, 5, 6, 7, 8, 9, 10, 11
and 12 of this Exclusive Remedy Agreement shall continue in full force and
effect and shall not terminate (the "TERM").
2. REPRESENTATIONS AND WARRANTIES OF EACH DEPOSITARY HOLDER. Each
Depositary Holder severally and not jointly represents and warrants to Parent
that:
(a) such Depositary Holder is the record and beneficial owner of
such Depositary Shares as is set forth opposite such holder's name on SCHEDULE A
hereto;
(b) the Depositary Shares are held by such Depositary Holder
free and clear of all liens, encumbrances, claims, security interests or any
other restrictions whatsoever (other than any restrictions under applicable
securities laws), and there are no outstanding subscriptions, options, rights,
contracts, understandings or agreements to purchase or otherwise acquire the
Depositary Shares, other than the additional shares of Series H Preferred Stock
and additional Series G Warrants that are issuable under the Fifth Amendment to
the May 1998 Securities Purchase Agreement dated as of December 29, 2000; and
(c) such Depositary Holder has all requisite power and authority
and, if such Depositary Holder is a natural person, the legal capacity, to enter
into this Exclusive Remedy Agreement and to perform its obligations hereunder.
To the extent not a natural person, such Depositary Holder is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization. The execution and delivery of this Exclusive Remedy Agreement by
such Depositary Holder and the performance by such Depositary Holder of its
obligations hereunder have been duly authorized by all necessary action on the
part of such Depositary Holder. This Exclusive Remedy Agreement has been duly
executed and delivered by, and constitutes a valid and binding agreement of,
such Depositary Holder, enforceable against such Depositary Holder in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws and except that the availability of equitable
remedies, including specific performance, is subject to the discretion of the
court before which any proceeding for such remedy may be brought (the
"ENFORCEABILITY EXCEPTION"). If the Depositary Holder is married and the
Depositary Shares of the Depositary Holder constitute community property or
spousal approval is otherwise required for this Agreement to be legal, valid and
binding, then, to the extent so required, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, the Depositary Holder's spouse, enforceable against such spouse in
accordance with its terms, subject to the Enforceability Exception.
3. EXCLUSIVE REMEDY. Each Depositary Holder hereby covenants and
agrees that, during the Term, with regard to any disputes arising out of
SECTIONS 2.03, 9.02, 9.03 and 9.04 of the Merger Agreement, as its exclusive
remedy such Depositary Holder shall be bound by the terms and conditions of the
following provisions of the Merger Agreement as if such Depositary Holder were a
party thereto:
(a) SECTION 2.03(d) regarding dispute resolution and arbitration
in respect of disputes, controversies and claims as to
Contingent Payments payable by Parent pursuant to
SECTION 2.03; and
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(b) SECTION 9.04 regarding the Calculation Representative with
respect to any claims for setoff pursuant to Article IX or
any dispute, claim or controversy under SECTION 2.03(d) of
the Merger Agreement.
4. GOVERNING LAW. This Exclusive Remedy Agreement will be governed
by the laws of the State of Delaware without regard to conflicts of laws
principles.
5. NOTICES. All notices, requests, claims, demands and other
communications under this Exclusive Remedy Agreement shall be in writing and
shall be deemed given if delivered personally or sent by overnight courier
(providing proof of delivery) to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice): (i) if to
the Company, Parent or Merger Sub, to the appropriate address set forth in
Section 10.01 of the Merger Agreement; and (ii) if to a Depositary Holder, to
the appropriate address set forth on SCHEDULE A hereto.
6. HEADINGS. The descriptive headings contained in this Exclusive
Remedy Agreement are included for convenience of reference purposes only and
shall not affect in any way the meaning or interpretation of this Exclusive
Remedy Agreement.
7. ENTIRE AGREEMENT. This Exclusive Remedy Agreement (including the
documents and instruments referred to herein) constitutes the entire agreement,
and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof, and this Exclusive
Remedy Agreement is not intended to confer upon any other person (other than
Parent and Merger Sub) any rights or remedies hereunder.
8. COUNTERPARTS. This Exclusive Remedy Agreement may be executed and
delivered (including by facsimile) in two or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement and shall become effective as to any
Depositary Holder when one or more counterparts have been signed by each of the
Company, Parent and Merger Sub and such Depositary Holder and delivered to the
Company, Parent and Merger Sub and such Depositary Holder even if all of the
parties for which signature blocks exist have not executed a counterpart to this
Exclusive Remedy Agreement.
9. REMEDIES. As between any Depositary Holder, Parent and Merger
Sub, each of such parties agrees that irreparable damage to the other,
non-breaching party would occur and that such non-breaching party would not have
any adequate remedy at law in the event that any of the provisions of this
Exclusive Remedy Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the
non-breaching party shall be entitled to an injunction or injunctions to prevent
breaches by the other party of this Exclusive Remedy Agreement and to enforce
specifically the terms and provisions of this Exclusive Remedy Agreement, this
being in addition to any other remedy to which it may be entitled at law or in
equity.
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10. ASSIGNMENT. Neither this Exclusive Remedy Agreement nor any of
the rights, interests or obligations under this Exclusive Remedy Agreement shall
be assigned, in whole or in part, by operation of law or otherwise, by any of
the parties without the prior written consent of the other parties. Any
assignment in violation of the foregoing shall be void.
11. AMENDMENT. No amendment, modification or waiver in respect of
this Exclusive Remedy Agreement shall be effective against any party unless it
shall be in writing and signed by such party.
12. SEPARABILITY. If any provision of this Exclusive Remedy Agreement
shall be declared to be invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall not affect the remaining provisions hereof
which shall remain in full force and effect.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed and delivered this
Exclusive Remedy Agreement as of the date first written above.
ASCENT PEDIATRICS, INC., a Delaware corporation
By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
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Title: President
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MEDICIS PHARMACEUTICAL CORPORATION,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxx, Xx.
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Name: Xxxx X. Xxxxxxxx, Xx.
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Title: Executive Vice-President & Chief
Financial Officer
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XXXXXX XXXX INVESTORS II L.P., a Delaware
limited Partnership, FS EMPLOYEE INVESTORS LLC,
a Delaware limited liability company, and
FS PARALLEL FUND L.P., a Delaware limited
partnership
BY: FS PRIVATE INVESTMENTS LLC, Manager
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: Managing Member
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FS ASCENT INVESTMENTS LLC, a Delaware limited
liability company
BY: FS PRIVATE INVESTMENTS LLC, Manager
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: Managing Member
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EXCLUSIVE REMEDY AGREEMENT SIGNATURE PAGE
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BANCBOSTON VENTURES INC.
By:
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Name:
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Title:
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XXXXX PARTNERS
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
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Title: Partner
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By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx, Sc.D.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Medical Science Partners, L.P.
By: /s/ Xxxxx Xxxxxxx
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its general partner
By:
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Name: Xxxxx Xxxxxxx
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Title: Managing General Partner
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By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx, Ph.D.
EXCLUSIVE REMEDY AGREEMENT SIGNATURE PAGE
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FS PRIVATE INVESTMENTS LLC, a Delaware limited
liability company
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: Managing Member
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EXCLUSIVE REMEDY AGREEMENT SIGNATURE PAGE
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SCHEDULE A TO EXCLUSIVE REMEDY AGREEMENT
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STOCKHOLDER ADDRESS DEPOSITARY SHARES HELD
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FS Private Investments LLC c/o FS Private Investments 150,000
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
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Xxxxxx Xxxx Investors II L.P. c/o FS Private Investments 6,343,387
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
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FS Employee Investors LLC c/o FS Private Investments 543,670
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
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FS Ascent Investments LLC c/o FS Private Investments 1,862,585
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
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FS Parallel Fund L.P. c/o FS Private Investments 308,604
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
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BancBoston Ventures Inc. 000 Xxxxxxx Xxxxxx 000,000
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
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Xxxxx Partners c/o FS Private Investments 95,212
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
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Medical Sciences Partners L.P. 000 Xxxxxxxxx Xxxx 000,000
Xxxxxxxxxx, XX
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Xxxxxx Xxxxxxxx 00 Xxxxxxx Xxxxx Xxxx 000,000
Xxxxxxxxxx, XX 00000
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Xxxxxxx X. Xxxxxxx 00000 X.X. 00xx Xxxxxx 000,000
Xxxxxxxxx, XX 00000
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Xxxxxx X. Xxxxxxx Five Olde Greenhouse Lane ---
Xxxxxxx, XX 00000
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