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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BETWEEN
ASCENT PEDIATRICS, INC.
AND
BIRD MERGER CORPORATION
February 16, 1999
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AGREEMENT AND PLAN OF MERGER
Agreement entered into as of February 16, 1999 by and between Ascent
Pediatrics, Inc., a Delaware corporation (the "Company"), and Bird Merger
Corporation, a Delaware corporation and a wholly-owned subsidiary of the Company
(the "Transitory Subsidiary"). The Company and the Transitory Subsidiary are
referred to collectively herein as the "Parties."
This Agreement has been entered into concurrently with and pursuant to
a Master Agreement, substantially in the form of Exhibit A attached hereto (the
"Master Agreement"), entered into between the Company, Alpharma, Inc., a
Delaware corporation ("Parent"), and Alpharma USPD Inc., a Maryland corporation
and wholly-owned subsidiary of Parent ("Alpharma").
This Agreement contemplates a tax-free merger of the Transitory
Subsidiary into the Company. In such merger, the stockholders of the Company
will receive the consideration set forth herein in exchange for their capital
stock of the Company.
NOW, THEREFORE, in consideration of the representations, warranties and
covenants herein contained, the Parties agree as follows.
ARTICLE I
THE MERGER
1.1 The Merger. Upon and subject to the terms and conditions of this
Agreement, the Transitory Subsidiary (which at all times shall have no assets or
business operations and shall exist solely for the purpose of effecting the
Merger) shall merge with and into the Company (with such merger referred to
herein as the "Merger") at the Effective Time (as defined below). From and after
the Effective Time, the separate corporate existence of the Transitory
Subsidiary shall cease and the Company shall continue as the surviving
corporation in the Merger (the "Surviving Corporation"). The "Effective Time"
shall be the time at which the Company and the Transitory Subsidiary file the
certificate of merger or other appropriate documents prepared and executed in
accordance with the relevant provisions of the Delaware General Corporation Law
with the Secretary of State of the State of Delaware (the "Certificate of
Merger").
1.2 The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall occur concurrently with the Closing Date (as
defined in the Master Agreement) and shall take place at the offices of Xxxx and
Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000, commencing at 9:00 a.m. local time
on such date as the Company, the Transitory Subsidiary and Alpharma shall agree
(or at such other
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place and/or time and/or on such other date as the Company, the Transitory
Subsidiary and Alpharma may agree).
1.3 Actions at the Closing. At the Closing, (a) the Company and the
Transitory Subsidiary shall file with the Secretary of State of the State of
Delaware the Certificate of Merger, and (b) the Depositary (as defined below)
shall deliver on the Company's behalf Depositary Receipts (as defined below) to
a bank or trust company or other entity appointed by the Company to act as the
exchange agent in accordance with Section 1.5.
1.4 Conversion of Shares. At the Effective Time, by virtue of the
Merger and without any action on the part of any Party or the holder of any of
the following securities:
(a) Each share of common stock, $.00004 par value per share,
of the Company ("Old Common Stock") issued and outstanding immediately prior to
the Effective Time (other than shares of Old Common Stock held in the Company's
treasury and Dissenting Shares (if applicable and as defined in Section 1.7))
shall be converted into and represent the right to receive one depositary share
(a "Depositary Share") issued pursuant to the Depositary Agreement (the
"Depositary Agreement") dated as of the date hereof by and among the Company,
Alpharma and State Street Bank and Trust Company (the "Depositary"),
substantially in the form of Exhibit B attached hereto (such Depositary Shares
being referred to herein as the "Merger Consideration"). Each Depositary Share
shall evidence one share of common stock, $.00004 par value per share, of the
Surviving Corporation ("New Common Stock"), subject to the Call Option (as such
term is defined in the Depositary Agreement), and shall be represented by a
depositary receipt (a "Depositary Receipt").
(b) Each share of Old Common Stock held in the Company's
treasury immediately prior to the Effective Time shall be cancelled and retired
without payment of any consideration therefor.
(c) Each share of common stock, $.01 par value per share, of
the Transitory Subsidiary issued and outstanding immediately prior to the
Effective Time shall be converted into and thereafter evidence the right to
receive $.01 per share.
1.5 Exchange of Shares
(a) Prior to the Effective Time, the Company shall appoint
State Street Bank and Trust Company or another mutually acceptable bank or trust
company as agent (the "Exchange Agent") for the purpose of exchanging
certificates representing shares of Old Common Stock outstanding prior to the
Effective Time for the Merger Consideration. At or prior to the Effective Time,
the Company shall deposit with the Depositary a number of shares of New Common
Stock equal to the
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number of shares of Old Common Stock outstanding immediately prior to the
Effective Time, and the Depositary shall, in turn, deposit with the Exchange
Agent Depositary Receipts representing the number of Depositary Shares
corresponding to the number of shares of New Common Stock so deposited. Promptly
after the Effective Time, the Surviving Corporation shall cause the Exchange
Agent to send to each holder of shares of Old Common Stock at the Effective Time
a letter of transmittal in customary form for use in such exchange (which shall
specify that the delivery shall be effected, and risk of loss and title shall
pass, only upon proper delivery of the certificates representing shares of Old
Common Stock to the Exchange Agent).
(b) Each holder of shares of Old Common Stock that have been
converted into a right to receive the Merger Consideration, upon surrender to
the Exchange Agent of a certificate or certificates formerly representing such
shares of Old Common Stock together with a duly executed letter of transmittal
covering such shares of Old Common Stock, shall be entitled to receive the
Merger Consideration payable in respect of such shares of Old Common Stock.
After the Effective Time, each such certificate shall, until so surrendered,
represent for all purposes only the right to receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be issued
to a person other than the registered holder of the shares of Old Common Stock
represented by the certificate or certificates surrendered in exchange therefor,
it shall be a condition to such issuance that the certificate or certificates so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the person requesting such issuance shall pay the Exchange
Agent any transfer or other taxes required as a result of such issuance to a
person other than the registered holder of such shares of Old Common Stock or
establish to the satisfaction of the Exchange Agent that such tax has been paid
or is not payable.
(d) After the Effective Time, there shall be no further
registration of transfers of shares of Old Common Stock outstanding prior to the
Effective Time. If, after the Effective Time, certificates representing shares
of Old Common Stock outstanding prior to the Effective Time are presented to the
Surviving Corporation, they shall be cancelled and exchanged for the
consideration provided for, and in accordance with the procedures set forth, in
this Article I.
(e) Any portion of the Merger Consideration deposited with the
Exchange Agent in accordance with this Section 1.5 that remains unclaimed by the
holders of shares of Old Common Stock one year after the Effective Time shall be
returned upon demand to the Depositary, who shall return underlying shares of
New Common Stock to the Surviving Corporation in accordance with the Depositary
Agreement, and any such holder who has not exchanged his shares of Old Common
Stock for Depositary Shares in accordance with this Article I prior to that time
shall
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thereafter look only to the Surviving Corporation for payment of the Merger
Consideration in respect of his shares of Old Common Stock, but shall have no
greater rights against the Surviving Corporation than may be accorded to its
general creditors under applicable law. Notwithstanding the foregoing, the
Surviving Corporation shall not be liable to any holder of shares of Old Common
Stock for any shares of New Common Stock issued to a public official pursuant to
applicable abandoned property laws. Any portion of the Merger Consideration
remaining unclaimed by holders of shares of Old Common Stock as of a date which
is immediately prior to such time as such amounts would otherwise escheat to or
become property of any government entity shall, to the extent permitted by
applicable law, become property of the Surviving Corporation, free and clear of
any claims or interest of any person previously entitled thereto.
(f) No dividends, interest or other distributions with respect
to the Merger Consideration shall be paid to the holder of any unsurrendered
certificates representing shares of Old Common Stock outstanding prior to the
Effective Time until such certificates are surrendered as provided in this
Section. Upon such surrender, there shall be paid, without interest, to the
person in whose name the certificates representing the Merger Consideration into
which such shares of Old Common Stock were converted are registered, all
dividends, interest and other distributions payable in respect of such
securities on any date subsequent to, and in respect of a record date after, the
Effective Time.
(g) The Depositary Receipts and the share certificates
evidencing the shares of New Common Stock deposited with the Depositary shall
bear the following legend:
THE [SHARES OF COMMON STOCK EVIDENCED BY THE DEPOSITARY SHARES
REPRESENTED HEREBY/SHARES OF COMMON STOCK EVIDENCED HEREBY] ARE SUBJECT TO A
CALL OPTION PURSUANT TO A DEPOSITARY AGREEMENT DATED FEBRUARY 16, 1999 AMONG
ASCENT, ALPHARMA USPD INC. AND STATE STREET BANK AND TRUST COMPANY. A COPY OF
THIS AGREEMENT MAY BE OBTAINED FROM THE SECRETARY OF ASCENT.
1.6 Treatment of Convertible Securities, Warrants and Options.
(a) Effective as of the Effective Time, each convertible
security, warrant or option of the Company outstanding as of the Effective Time,
whether or not then vested, convertible or exercisable, shall (when vested,
convertible or exercisable in accordance with the terms thereof) be convertible
into or exercisable for a number of Depositary Shares or shares of New Common
Stock, as determined in accordance with Section 1.6(b), equal to the number of
shares of Old Common Stock
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issuable upon conversion or exercise of such convertible security, warrant or
option in accordance with the terms thereof.
(b) From and after the Effective Time until the Option
Determination Date (as defined in the Depositary Agreement), from time to time
upon the conversion or exercise of any convertible security, warrant or option
of the Surviving Corporation, the Surviving Corporation shall deposit with the
Depositary a number of shares of New Common Stock corresponding to the number of
Depositary Shares issuable upon conversion or exercise of such convertible
security, warrant or option, and the Surviving Corporation shall cause the
Depositary to issue to the holder of such convertible security, warrant or
option upon such conversion or exercise, Depositary Receipts representing the
number of Depositary Shares issuable upon conversion or exercise of such
convertible security, warrant or option. From and after the Option Closing Date
(as defined in the Depositary Agreement), holders of any outstanding convertible
securities, warrants or options of the Surviving Corporation shall have the
right to receive from the Surviving Corporation upon conversion or exercise
thereof (and the payment of any exercise or purchase price provided for under
the terms of such convertible security, warrant or option) cash in an amount
equal to the Option Exercise Price (as defined in the Depositary Agreement) for
each Depositary Share for which such convertible security, warrant or option is
convertible or exercisable. From and after the Option Expiration Date (as
defined in the Depositary Agreement), such holders shall have the right to
receive from the Surviving Corporation upon conversion or exercise of such
convertible securities, warrants or options shares of New Common Stock.
(c) Prior to the Effective Time, the Company shall make any
amendments to the respective terms of any convertible security, warrant or
option of the Company then outstanding or the Company's 1992 Stock Incentive
Plan, 1997 Director Stock Option Plan or 1997 Employee Stock Purchase Plan that
are necessary or advisable to give effect to the transactions contemplated by
this Section 1.6, including without limitation providing that all references
therein to Old Common Stock be deemed to be references to Depositary Shares.
1.7 Dissenting Shares. If appraisal rights are available under Section
262 of the Delaware General Corporation Law, shares of Old Common Stock held as
of the Effective Time by a stockholder of the Company who has not voted such
shares of Old Common Stock in favor of the adoption of this Agreement and the
Merger and with respect to which appraisal shall have been duly demanded and
perfected in accordance with Section 262 of the Delaware General Corporation Law
and not effectively withdrawn or forfeited prior to the Effective Time
("Dissenting Shares") shall not be converted into or represent the right to
receive the Merger Consideration, unless such stockholder shall have forfeited
his right to appraisal under the Delaware General Corporation Law or withdrawn,
with the consent of the Surviving Corporation, his demand for appraisal. If such
stockholder has so forfeited or
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withdrawn his right to appraisal of Dissenting Shares, then (a) as of the
occurrence of such event, such stockholder's Dissenting Shares shall cease to be
Dissenting Shares and shall be converted into and represent the right to receive
the Merger Consideration issuable pursuant to Section 1.4(a) in respect of such
shares of Old Common Stock held by such stockholder, (b) promptly following the
occurrence of such event, the Surviving Corporation shall deposit with the
Depositary a number of shares of New Common Stock equal to the number of shares
of Old Common Stock held by such stockholder, and (c) the Depositary shall, in
turn, deposit with the Exchange Agent Depositary Receipts representing the
number of Depositary Shares corresponding to the number of shares of New Common
Stock so deposited.
1.8 Call Option. The shares of New Common Stock shall be subject to a
Call Option exercisable upon the terms and conditions set forth in the
Depositary Agreement.
1.9 No Further Rights. From and after the Effective Time, no shares of
Old Common Stock shall be deemed to be outstanding, and holders of shares of Old
Common Stock shall cease to have any rights with respect thereto, except as
provided herein or by law.
ARTICLE II
SURVIVING CORPORATION
2.1 Certificate of Incorporation. The Certificate of Incorporation of
the Surviving Corporation shall be the same as the Certificate of Incorporation
of the Company, except that such Certificate of Incorporation shall be amended
in the Merger in the manner set forth in Exhibit C attached hereto.
2.2 By-laws. The By-laws of the Surviving Corporation shall be the same
as the By-laws of the Company.
2.3 Directors and Officers. The directors of the Company at the
Effective Time shall be the directors of the Surviving Corporation, until their
successors are duly elected or appointed and qualified in accordance with
applicable law, and the officers of the Company at the Effective Time shall be
the officers of the Surviving Corporation.
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ARTICLE III
CONDITIONS TO CONSUMMATION OF MERGER
3.1 Conditions to Each Party's Obligations. The respective obligations
of each Party to consummate the Merger are subject to the satisfaction of the
following conditions:
(a) The Company's stockholders shall have approved and adopted
this Agreement (including the exhibits attached hereto) and the Merger; and
(b) A Registration Statement of the Company on Form S-4 (the
"Registration Statement") registering the Depositary Shares and the underlying
shares of New Common Stock shall have been filed with the Securities and
Exchange Commission (the "SEC") and become effective in accordance with the
provisions of the Securities Act of 1933, as amended, and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued by the SEC and remain in effect.
ARTICLE IV
MISCELLANEOUS
4.1 Succession. At the Effective Time, the Surviving Corporation shall
succeed to all of the rights, privileges, debts, liabilities, powers and
property of the Company and the Transitory Subsidiary in the manner of and as
more fully set forth in Section 259 of the Delaware General Corporation Law.
Without limiting the foregoing, at the Effective Time, all property, rights,
privileges, franchises, patents, trademarks, licenses, registrations and other
assets of every kind and description of the Company and the Transitory
Subsidiary shall be transferred to, vested in and devolved upon the Surviving
Corporation without further act or deed, and all property, rights and every
other interest of the Company and the Transitory Subsidiary shall be as
effectively the property of the Surviving Corporation as they were of the
Company and the Transitory Subsidiary, respectively. All rights of creditors of
the Company and the Transitory Subsidiary and all liens upon any property of the
Company and the Transitory Subsidiary shall be preserved unimpaired, and all
debts, liabilities and duties of the Company and the Transitory Subsidiary shall
attach to the Surviving Corporation and may be enforced against it to the same
extent as if said debts, liabilities and duties had been incurred or contracted
by it.
4.2 Further Assurances. From time to time, as and when required by the
Surviving Corporation or by its successors and assigns, there shall be executed
and
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delivered on behalf of the Company or the Transitory Subsidiary such deeds and
other instruments, and there shall be taken or caused to be taken by it such
further and other action, as shall be appropriate or necessary in order to vest
or perfect in or to confirm of record or otherwise in the Surviving Corporation
the title to and possession of all the property, interests, assets, rights,
privileges, immunities, powers, franchises and authority of the Company and the
Transitory Subsidiary, and otherwise to carry out the purposes of this
Agreement, and the officers and directors of the Company and the Transitory
Subsidiary are fully authorized in the name and on behalf of the Company or the
Transitory Subsidiary, as the case may be, or otherwise to take any and all such
action and to execute and deliver any and all such deeds and other instruments.
4.3 Abandonment. At any time prior to the Effective Time, if the Master
Agreement has been terminated, this Agreement may be terminated and the Merger
may be abandoned by the Board of Directors of either the Company or the
Transitory Subsidiary or both, notwithstanding approval of this Agreement by the
stockholders of the Company or the Transitory Subsidiary.
4.4 Amendment. This Agreement may be amended by the Boards of Directors
of the Company and the Transitory Subsidiary at any time prior to the Effective
Time, provided that such amendment shall have been consented to by Alpharma; and
provided further that an amendment made subsequent to the approval of this
Agreement by the stockholders of either the Company or the Transitory Subsidiary
shall not (i) alter or change the amount or kind of shares, securities, cash,
property and/or rights to be received in exchange for or on conversion of all or
any of the shares of any class or series thereof of such corporation, (ii) alter
or change any term of the Certificate of Incorporation of the Surviving
Corporation to be effected by the Merger, or (iii) alter or change any of the
terms and conditions of this Agreement if such alteration or change would
adversely affect the holders of any class or series of the stock of such
corporation.
4.5 Governing Law. This Agreement and the legal relations between the
parties shall be governed by and construed in accordance with the laws of the
State of Delaware, without giving effect to the principles of conflicts of law
thereof.
4.6 Counterparts. In order to facilitate the filing and recording of
this Agreement, the same may be executed in any number of counterparts, each of
which shall be deemed to be an original.
[REMAINDER OF PAGE LEFT BLANK.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement and Plan of Merger to be executed and attested on its behalf of its
officers thereunto duly authorized, as of the date first above written.
ASCENT PEDIATRICS, INC.
By: /s/Xxxxxx Xxxxxxxx
---------------------------------
Chairman
BIRD MERGER CORPORATION
By: /s/Xxxx X. Xxx
---------------------------------
President
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I, ___________________, Secretary of Ascent Pediatrics, Inc., a
corporation organized and existing under the laws of the State of Delaware (the
"Company"), hereby certify that the Agreement and Plan of Merger to which this
certificate is attached, after having been duly signed on behalf of the Company
and having been signed on behalf of Bird Merger Corporation, a corporation
organized and existing under the laws of the State of Delaware, was duly
submitted to the stockholders of the Company at a meeting of said stockholders
pursuant to Section 251 of the General Corporation Law of Delaware; and that the
Agreement and Plan of Merger was approved at said meeting by the affirmative
vote of stockholders representing at least a majority of the outstanding stock
of the Company entitled to vote thereon.
WITNESS my hand on this _____ day of ____________, 1999.
------------------------------------
Secretary
I, Xxxx X. Xxxxxxxx, Secretary of Bird Merger Corporation, a
corporation organized and existing under the laws of the State of Delaware
("Transitory Subsidiary"), hereby certify that the Agreement and Plan of Merger
to which this certificate is attached, after having been duly signed on behalf
of Transitory Subsidiary and having been signed on behalf of Ascent Pediatrics,
Inc., a corporation organized and existing under the laws of the State of
Delaware, was duly submitted to the sole stockholder of Transitory Subsidiary by
written action of said stockholder pursuant to Section 251 of the General
Corporation Law of Delaware and that by said written action the Agreement and
Plan of Merger was approved by the affirmative vote of the sole stockholder
representing at least a majority of the outstanding stock of Transitory
Subsidiary entitled to vote thereon.
WITNESS my hand on this ____ day of ________________, 1999.
------------------------------------
Secretary
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EXHIBIT A
MASTER AGREEMENT
BY AND AMONG
ASCENT PEDIATRICS, INC.,
ALPHARMA, INC.
AND
ALPHARMA USPD INC.
FEBRUARY 16, 1999
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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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(x) 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
Xxxx and Xxxx 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
Xxxxxxxx & Xxxxx, counsel for Parent and Alpharma, dated the
Closing
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32
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
X-00
00
Xxx-Xxxxxxxx Xxxxxxxx) 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.
A-24
37
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.
0000 Xxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
Attention: President
A-25
38
with a copy to:
Alpharma USPD Inc.
0000 Xxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
Attention: Chief Legal Officer
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
If to the Company, 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.
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39
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)
A-27
40
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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41
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/ Xxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxx
----------------------------- ----------------------------
Secretary Title: President
Attest: ALPHARMA USPD INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------- ----------------------------
Secretary Title: President
Attest: ALPHARMA, INC.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------- ----------------------------
Secretary Title: Vice President
Finance and Chief
Financial Officer
A-30
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Exhibit A
OPINION OF XXXX AND XXXX 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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44
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.
X-00
00
XXXXXXX X
Form of Xxxxxxxx & Xxxxx 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
B-1
46
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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47
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:
-------------------------
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EXHIBIT B
DEPOSITARY AGREEMENT
dated as of February 16, 1999
among
ALPHARMA USPD INC.,
ASCENT PEDIATRICS, INC.
and
STATE STREET BANK AND TRUST COMPANY
As Depositary
49
TABLE OF CONTENTS
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ARTICLE I - DEFINITIONS..........................................................................2
ARTICLE II - DEPOSIT OF NEW COMMON STOCK........................................................13
SECTION 2.01 Deposit of New Common Stock; Depositary Receipts..................13
ARTICLE III - COMPANY CALL OPTION...............................................................14
SECTION 3.01 Company Call Option...............................................14
SECTION 3.02 Effectiveness.....................................................14
ARTICLE IV - ALPHARMA CALL OPTION...............................................................15
SECTION 4.01 Alpharma Call Option..............................................15
SECTION 4.02 Option Closing Date...............................................17
SECTION 4.03 Covenants of the Company and Alpharma.............................18
SECTION 4.04 Effectiveness.....................................................19
ARTICLE V - THE CALL OPTION CLOSING.............................................................19
SECTION 5.01 Closing Shares............................................19
SECTION 5.02 Notice of Option Exercise; Delivery of Option
Exercise Price....................................................21
SECTION 5.03 Company Options, Etc..............................................23
ARTICLE VI - FORM OF DEPOSITARY RECEIPTS, DEPOSIT OF STOCK,
EXECUTION AND DELIVERY, TRANSFER, SURRENDER
AND REDEMPTION OF DEPOSITARY RECEIPTS...................................................24
SECTION 6.01 Form and Transferability of Depositary Receipts...................24
SECTION 6.02 Execution and Delivery of Depositary Receipts.....................25
SECTION 6.03 Transfer of Depositary Receipts...................................25
SECTION 6.04 Combinations and Split-ups of Depositary Receipts.................26
SECTION 6.05 Limitations on Execution and Delivery, Transfer,
Split-up, Combination, Surrender and Exchange of
Depositary Receipts. ............................................26
SECTION 6.06 Lost Depositary Receipts, etc.....................................26
SECTION 6.07 Cancellation and Destruction of Surrendered Depositary
Receipts..........................................................27
SECTION 6.08 Representations and Warranties as to Stock........................27
(i)
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ARTICLE VII - THE DEPOSITED SECURITIES, NOTICES.................................................27
SECTION 7.01 Cash Distributions................................................27
SECTION 7.02 Distributions Other Than Cash.....................................28
SECTION 7.03 Fixing of Record Date for Holders of Depositary
Receipts..........................................................28
SECTION 7.04 Voting Rights.....................................................28
SECTION 7.05 Changes Affecting Deposited Securities and
Reclassifications, Recapitalizations, etc.........................29
SECTION 7.06 Reports...........................................................29
SECTION 7.07 Lists of Depositary Receipt Holders...............................29
ARTICLE VIII - THE DEPOSITARY, ALPHARMA AND THE COMPANY.........................................30
SECTION 8.01 Maintenance of Offices, Agencies, Transfer Books by
the Depositary Registrar..........................................30
SECTION 8.02 Prevention or Delay in Performance by the Depositary,
the Depositary's Agents or the Company............................31
SECTION 8.03 Obligations of the Depositary, the Depositary's Agents
and the Company...................................................31
SECTION 8.04 Resignation and Removal of the Depositary,
Appointment of Successor Depositary...............................33
SECTION 8.05 Corporate Notices and Reports.....................................34
SECTION 8.06 Deposit of New Common Stock by the Company........................34
SECTION 8.07 Indemnification...................................................34
SECTION 8.08 Charges and Expenses..............................................34
SECTION 8.09 Consequential Damages.............................................35
ARTICLE IX - AMENDMENT AND TERMINATION..........................................................35
SECTION 9.01 Amendment.........................................................35
SECTION 9.02 Termination.......................................................36
ARTICLE X - MISCELLANEOUS.......................................................................36
SECTION 10.01 Counterparts......................................................36
SECTION 10.02 Exclusive Benefits of Parties.....................................36
SECTION 10.03 Invalidity of Provisions..........................................36
SECTION 10.04 Notices...........................................................37
SECTION 10.05 Depositary's Agents...............................................38
SECTION 10.06 Holders of Depositary Receipts are Parties........................38
SECTION 10.07 Governing Law.....................................................39
SECTION 10.08 Headings..........................................................39
(ii)
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SECTION 10.09 Successors and Assigns............................................39
(iii)
52
DEPOSITARY AGREEMENT, dated as of February 16, 1999, among ALPHARMA USPD
INC., a Maryland corporation ("Alpharma"), ASCENT PEDIATRICS, INC., a Delaware
corporation (the "Company"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company, as depositary (the "Depositary").
WITNESSETH:
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, 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 on the date hereof;
(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 below) (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 hereunder, each Depositary Share evidencing one share of
common stock, $.00004 par value per share, of the Company (the "New
Common Stock"), represented by a depositary receipt (a "Depositary
Receipt") and subject to the right and option of the Company, upon the
terms and conditions set forth in Article III hereof, to purchase all
outstanding shares of New Common Stock of the Company deposited with the
Depositary hereunder; and
(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;
WHEREAS, it is desired to provide as hereinafter set forth in this
Depositary Agreement for the terms and conditions pursuant to which the Company
may exercise the Call Option (as defined below);
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WHEREAS, as a condition to, and as additional consideration for,
Alpharma agreeing to make Loans (as defined below), Alpharma, the Company and
Alpharma, Inc., a Delaware corporation, have entered into a Master Agreement
dated as of February 16, 1999 (the "Master Agreement"), pursuant to which the
Company has agreed to assign to Alpharma the Call Option;
WHEREAS, it is desired to provide as hereinafter set forth in this
Depositary Agreement for the terms and conditions pursuant to which Alpharma may
exercise the Call Option following the assignment by the Company to Alpharma of
the Call Option;
WHEREAS, it is desired to provide, as hereinafter set forth in this
Depositary Agreement, for the deposit on behalf of the holders of Old Common
Stock of the Depositary Shares with the Depositary for the purposes set forth in
this Depositary Agreement and for the issuance hereunder of Depositary Receipts
evidencing Depositary Shares or the proceeds received therefor upon exercise of
the Call Option described herein; and
WHEREAS, the Depositary Receipts are to be substantially in the form of
Exhibit A attached hereto, with appropriate insertions, modifications and
omissions, as hereinafter provided in this Depositary Agreement;
NOW, THEREFORE, in consideration of the premises, it is agreed by and
among the parties hereto as follows:
ARTICLE I
DEFINITIONS
The following definitions shall for all purposes, unless otherwise
clearly indicated, apply to the respective terms used in this Depositary
Agreement and the Depositary Receipts:
"2001 Audited Financial Statements" shall mean the audited balance sheet
of the Company as of December 31, 2001, and the related audited statements of
operations, changes in stockholders' equity and cash flows of the Company for
the fiscal year ended December 31, 2001, together with the notes thereto. These
financial statements shall be prepared in accordance with GAAP (as defined
below), shall be prepared on a consolidated basis (if the Company has any
subsidiaries) and shall be accompanied by a report on such statements by an
Approved Accounting Firm (as defined below) confirming that such statements were
prepared in all material respects in conformity with GAAP.
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"90-Day Extension Date" shall have the meaning ascribed to it in Section
4.02(a) of this Depositary Agreement.
"180-Day Extension Date" shall have the meaning ascribed to it in
Section 4.02(a) of this Depositary Agreement.
"Adjusted 2001 Operating Income" shall mean the sum of:
(i) the Company's net income for the fiscal year ended
December 31, 2001 as reflected in the 2001 Audited Financial Statements,
(ii) the Excluded Interest Expense (as defined below),
(iii) the provision for income taxes for the fiscal year
ended December 31, 2001 as reflected in the 2001 Audited Financial
Statements, and
(iv) the amount by which the Company's research and
development expenses for the fiscal year ended December 31, 2001 as
reflected in the 2001 Audited Financial Statements exceeds $1.5 million,
as adjusted to (A) exclude Extraordinary Items (as defined below), (B) reflect
GAAP Adjustments (as defined below), (C) exclude the amount, if any, by which
the Company's research and development expenses for the fiscal year ended
December 31, 2001 as reflected in the 2001 Audited Financial Statements is less
than $1.5 million and (D) exclude any interest income earned in the fiscal year
ended December 31, 2001 on any Permitted Investment of the principal amount of
any Loan (as defined below).
"Affiliate" shall have the meaning ascribed to it in Rule 405
promulgated under the 1933 Act.
"Alpharma" shall have the meaning ascribed to it in the Introductory
Paragraph to this Depositary Agreement.
"Antitrust Approval Condition" shall have the meaning ascribed to it in
Section 4.02(a) of this Depositary Agreement.
"Approved Accounting Firm" shall mean one of the public accounting firms
currently known as the "Big Five"; provided, that following the Call Option
Transfer, such term shall also include any other public accounting firm
reasonably acceptable to Alpharma.
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"Business Day" shall mean 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 or in any other city in which the Depositary's
Office is located.
"Call Option" shall mean the right and option to purchase all but not
less than all of the outstanding shares of New Common Stock deposited with the
Depositary hereunder upon the terms and conditions set forth in this Depositary
Agreement.
"Call Option Exercise Notice" shall mean the written notice delivered to
the Depositary by the holder of the Call Option pursuant to Section 3.01(a) or
Section 4.01(a) (as applicable) indicating that the holder has elected to
exercise the Call Option.
"Call Option Rejection Notice" shall mean the written notice delivered
to the Depositary by the holder of the Call Option pursuant to Section 3.01(c)
or Section 4.01(d) (as applicable) indicating that the holder has elected not to
exercise the Call Option.
"Call Option Transfer" shall mean the transfer of the Call Option by the
Company to Alpharma in accordance with Sections 5.2(n) and 7.2 of the Master
Agreement and in accordance with Section 10.09 of this Depositary Agreement.
"Call Period" shall (i) prior to a Call Option Transfer, have the
meaning ascribed to it in Section 3.01(a) of this Depositary Agreement and (ii)
from and after a Call Option Transfer, have the meaning ascribed to it in
Section 4.01(a) of this Depositary Agreement.
"Certificate of Incorporation" shall mean the Amended and Restated
Certificate of Incorporation of the Company, as amended from time to time after
the date hereof.
"Company" shall have the meaning ascribed to it in the Introductory
Paragraph of this Depositary Agreement.
"Conflict of Law Condition" shall have the meaning ascribed to it in
Section 4.02(a) of this Depositary Agreement.
"Depositary" shall have the meaning ascribed to it in the Introductory
Paragraph of this Depositary Agreement and, as the context requires, any
successor appointed pursuant to the terms of this Depositary Agreement.
"Depositary's Agent" or "Depositary's Agents" shall mean an agent or
agents, as the case may be, appointed by the Depositary as provided, and for the
purposes specified, in Section 10.05 of this Depositary Agreement.
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"Depositary Bank Account" shall have the meaning ascribed to it in
Section 5.01(a) of this Depositary Agreement.
"Depositary's Office" shall mean the shareholder services office of the
Depositary at which at any particular time its shareholder services business
shall be administered, which at the date of this Depositary Agreement is located
at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
"Depositary Receipt" shall mean one or more of the depositary receipts
issued hereunder, substantially in the form of Exhibit A attached hereto.
"Depositary Share" shall have the meaning ascribed to it in the Preamble
to this Depositary Agreement.
"Depositary Share Consideration" shall mean (a) following the Option
Closing, the right to receive the Option Exercise Price, without interest, or
(b) following the Option Expiration Date, the right to receive one share of New
Common Stock (subject to adjustment for any stock dividend, stock split, reverse
stock split or similar event affecting the New Common Stock after the date
hereof), together with all declared but unpaid dividends thereon.
"Determination Date Notice" shall have the meaning ascribed to it in
Section 5.03 of this Depositary Agreement.
"Dispute Notice" shall have the meaning set forth in Section 4.01(b)(i)
of this Depositary Agreement.
"Dissenting Shares" shall have the meaning ascribed to it in the Merger
Agreement.
"Effective Time" shall have the meaning ascribed to it in Article I of
the Merger Agreement.
"Excluded Interest Expense" shall mean the sum of the Company's interest
expense (including without limitation the full effect of both cash and non-cash
accrued and accreted interest) for the fiscal year ended December 31, 2001 as
reflected in the 2001 Audited Financial Statements, in respect of or associated
with:
(i) the First Loan and any Unrestricted Loans (each as
defined in the Loan Agreement),
(ii) an amount of Project Loans equal to the lesser of
(a) $8.0 million and (b) the amount by which the sum of the Company's
research and
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development expenses for the three fiscal years ending December 31,
2001, as reflected in the Company's audited financial statements,
exceeds $4.5 million
(iii) any convertible subordinated notes of the Company
issued or issuable pursuant to the Series G Agreement,
(iv) any other loans to the Company that are convertible
into equity or other convertible securities of the Company, and
(v) any loans to the Company or debt securities of the
Company originally issued as a unit or together with warrants, or such
warrants;
other than, in the case of items (iii), (iv) and (v), such loans or securities
which will not have been converted into Depositary Shares as of the Option
Closing Date and which are not required by their terms to be converted into
Depositary Shares on or prior to the Option Closing Date.
"Exercising Party" shall have the meaning ascribed to it in Section
5.01(a) of this Depositary Agreement.
"Extraordinary Items" shall mean any events or transactions that are
distinguished by their unusual nature and by the infrequency of their occurrence
(as defined by Accounting Principle Board No. 30) as reflected in the 2001
Audited Financial Statements.
"Final Closing Shares" shall have the meaning ascribed to it in Section
5.01(b) of this Depositary Agreement.
"Final Extension Date" shall mean the latest date on which the Option
Closing may be held pursuant to Section 4.02 of this Depositary Agreement.
"Follow-up Depositary Notice" shall have the meaning ascribed to it in
Section 5.01(b) of this Depositary Agreement.
"GAAP" shall mean U.S. generally accepted accounting principles as in
effect from time to time.
"GAAP Adjustments" shall mean all adjustments to the 2001 Audited
Financial Statements required in connection with the calculation of the Adjusted
2001 Operating Income in order (i) to reflect GAAP and the other accounting
methods, treatments, principles and procedures in a manner consistent with the
preparation of the Company's audited financial statements for the fiscal year
ended December 31, 1998 and (ii) to account for any of the following actions to
the extent that such
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actions are not consistent with the Company's ordinary course of business and
past practice and have the effect of increasing Adjusted 2001 Operating Income:
(a) deferring the fulfillment of orders placed in the calendar
year 2000 until the calendar year 2001;
(b) announcing any price increase, effective January, 2002, which
price increase results in an unusually large number of orders being
received and shipped in December 2001;
(c) announcing and implementing any unusual promotion during the
fiscal year ending December 31, 2001, including, for example, changes in
payment terms and significant discounts;
(d) selling intangible or other operating assets during the
fiscal year ending December 31, 2001 (except to the extent that such
sale constitutes an Extraordinary Item);
(e) deferring the incurrence of necessary expenses for staff,
regulatory compliance, quality control or maintenance and repairs with
the effect that operations after December 31, 2001 are burdened with
disproportionately higher expenses;
(f) prepaying and recognizing expenses in the fiscal year ending
December 31, 2000 that would otherwise have been recognized in the
fiscal year ending December 31, 2001;
(g) classifying selling, general and administrative expenses as
research and development expenses (except to the extent consistent with
the accounting methods, treatments, principles and procedures used in
the preparation of the Company's audited financial statements for prior
fiscal years);
(h) implementing unusual employee, customer or vendor incentive
programs that are inconsistent with industry practice and that have the
effect of increasing the Company's net income for the fiscal year ending
December 31, 2001 at the expense of the Company's net income for the
fiscal year ending December 31, 2002; and
(i) unreasonably allocating license fees, royalties or other
consideration to, or otherwise entering into agreements containing
front-loaded payment terms providing for payment in, the fiscal year
ending December 31, 2001, which fees, royalties, other consideration or
payments would otherwise be payable to the Company in another fiscal
year;
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provided however, that no adjustment to the 2001 Audited Financial Statements
shall be made hereunder with respect to such adjustments as shall have been
waived by Alpharma in writing.
"HSR Act" shall have the meaning ascribed to it in Section 4.03(c) of
this Depositary Agreement.
"Initial Depositary Notice" shall have the meaning ascribed to it in
Section 5.01(a) of this Depositary Agreement.
"Letter of Transmittal" shall have the meaning ascribed to it in Section
4.03(c) of this Depositary Agreement.
"Loan" shall have the meaning ascribed to it in the Loan Agreement.
"Loan Agreement" shall have the meaning ascribed to it in the Preamble
to this Depositary Agreement.
"Master Agreement" shall have the meaning ascribed to it in the Preamble
to this Depositary Agreement.
"Material Adverse Effect" shall have the meaning ascribed to it in the
Master Agreement.
"Merger" shall have the meaning ascribed to it in the Preamble to this
Depositary Agreement.
"Merger Agreement" shall have the meaning ascribed to it in the Preamble
to this Depositary Agreement.
"Nasdaq" shall mean the Nasdaq National Market.
"New Common Stock" shall mean the New Common Stock as defined in the
Preamble to this Depositary Agreement or any security into which the New Common
Stock may be converted.
"Neutral Accountants" shall have the meaning ascribed to it in Section
4.01(a)(ii)(B) of this Depositary Agreement.
"Non-Alpharma Directors" shall have the meaning ascribed to it in
Section 6.3 of the Master Agreement.
"Old Common Stock" shall have the meaning ascribed to it in the Preamble
to this Depositary Agreement.
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"Option Closing" shall mean the closing of the exercise of the Call
Option.
"Option Closing Date" shall mean the date specified pursuant to Section
3.01(b) or Section 4.02(a) (as applicable) for the Option Closing.
"Option Determination Date" shall mean the first to occur of the Option
Closing Date and the Option Expiration Date.
"Option Exercise Deliverables" shall mean the 2001 Audited Financial
Statements and the Option Exercise Price Statement.
"Option Exercise Price" shall mean, for each share of New Common Stock,
the price determined by dividing:
(A) the greater of:
(i) $140,000,000 and
(ii) the sum of (a) the product of (x) 12.2 and
(y) the Adjusted 2001 Operating Income, and (b) the aggregate
exercise price of all options and warrants of the Company issued
by the Company after December 31, 1998 and either (I) exercised
prior to the Option Closing Date (to the extent that the Company
has cash and cash equivalents on the date immediately preceding
the Option Closing Date in an amount equal to or greater than the
aggregate exercise price of such options and warrants) or (II)
outstanding as of the date immediately preceding the Option
Closing Date, by
(B) the sum of (i) the number of shares of New Common
Stock outstanding as of the date immediately preceding the Option
Closing Date, and (ii) the number of shares of New Common Stock issuable
upon the exercise or conversion of any options, warrants, rights or
convertible securities of the Company outstanding as of the date
immediately preceding the Option Closing Date (excluding the shares of
New Common Stock issuable upon conversion of the convertible securities
issued to Alpharma pursuant to the Loan Agreement);
provided that, notwithstanding the foregoing, in the event that the Option
Exercise Price calculated in the manner set forth above (the "Original Option
Exercise Price") shall equal a price per share of New Common Stock that is less
than $11.76 per share (subject to appropriate adjustment in the event of any
stock split, stock dividend, reverse stock split or other similar
recapitalization affecting the New Common Stock) and warrants to purchase at
least 75,000 Depositary Shares (subject to appropriate adjustment in the event
of any stock split, stock dividend, reverse stock split or other
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similar recapitalization affecting the New Common Stock) issued pursuant to the
Triumph Agreement (the "Triumph Warrants") remain outstanding as of the Option
Closing Date, the Option Exercise Price shall mean:
(X) with respect to each Depositary Share that is
issuable upon exercise of the Triumph Warrants which are outstanding as
of the Option Closing Date ("Triumph Warrant Shares"), $11.76 (subject
to appropriate adjustment in the event of a stock split, stock dividend,
reverse stock split or other similar recapitalization affecting the New
Common Stock);
(Y) with respect to each Depositary Share (the "Series G
Shares") issued or issuable upon conversion of the Series G Preferred or
any convertible notes issuable upon exchange of the Series G Preferred
outstanding as of the Option Closing Date or issued or issuable upon
exercise of the warrants issued pursuant to the Series G Agreement (to
the extent any such shares continue to be held as of the Option Closing
Date by one of the purchasers set forth on Schedule 1 to the Series G
Agreement or an Affiliate of any of such purchasers), the Original
Option Exercise Price; and
(Z) with respect to any Depositary Shares outstanding as
of the Option Closing Date or issuable as of the Option Closing Date
upon conversion of securities of the Company convertible into Depositary
Shares of the Company or upon exercise of rights, options or warrants to
acquire Depositary Shares (other than Triumph Warrant Shares and the
Series G Shares) (all of such Depositary Shares being referred to as the
"Stockholder Shares"), the difference between (i) the Original Option
Exercise Price and (ii) the price determined by dividing (a) the product
of (I) the Triumph Warrant Shares and (II) the difference between $11.76
(subject to appropriate adjustment in the event of a stock split, stock
dividend, reverse stock split or other similar recapitalization
affecting the New Common Stock) and the Original Option Exercise Price,
by (b) the number of Stockholder Shares.
"Option Exercise Price Statement" shall mean a statement from the
Company (a) stating the Option Exercise Price as calculated by the Company and
setting forth in reasonable detail the manner in which such calculation was made
(which stated Option Exercise Price shall be calculated based upon the Company's
reasonable assumptions as to what the Option Exercise Price will be as of the
date immediately preceding the Option Closing Date), (b) stating the Adjusted
2001 Operating Income as calculated by the Company and setting forth the manner
in which such amount was calculated and (c) setting forth the GAAP Adjustments
used in the calculation of Adjusted 2001 Operating Income as calculated by the
Company.
"Option Expiration Date" shall mean December 31, 2002; provided, that
from and after a Call Option Transfer, the Option Expiration Date shall be the
first to occur
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of (i) the date on which the Call Option terminates in accordance with Section
4.01(a) of this Depositary Agreement, (ii) the date on which the Call Option
terminates in accordance with Section 4.02(c) of this Depositary Agreement and
(iii) the Final Extension Date, if Alpharma exercises the Call Option but the
Option Closing has not occurred on or before the Final Extension Date; provided
further that, notwithstanding the foregoing, in the event of a Call Option
Transfer, the Option Expiration Date shall occur immediately at 5:00 p.m.
(Boston, Massachusetts time) (the "Final Refusal Time") on the third Business
Day following the day on which the Company provides written notice to Alpharma
that Alpharma has refused or otherwise failed to make a Loan requested by the
Company pursuant to Section 2.3 of the Loan Agreement if prior to the Final
Refusal Time Alpharma has still not funded such Loan, unless Alpharma's failure
to fund such Loan is due to the Company's failure to satisfy the condition set
forth in Section 4.2(f) or Section 4.3(d) of the Loan Agreement.
"Original Option Exercise Price" shall have the meaning ascribed to it
in the definition of "Option Exercise Price.
"Permitted Investment" shall have the meaning ascribed to it in the Loan
Agreement.
"Person" means any 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.
"Preliminary Closing Shares" shall have the meaning ascribed to it in
Section 5.01(a) of this Depositary Agreement.
"Record Date" shall mean the date fixed pursuant to Section 7.03 of this
Depositary Agreement.
"Record Holder" with respect to a Depositary Receipt shall mean the
person in whose name a Depositary Receipt is registered on the books of the
Depositary maintained for such purpose as of a specified Record Date.
"Registrar" shall mean any bank or trust company which shall be
appointed to register Depositary Receipts as herein provided.
"Registration Statement" shall mean the Registration Statement on Form
S-4 of the Company relating to the offering of the New Common Stock and the
Depositary Shares in connection with the Merger.
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"Required Antitrust Approvals" shall have the meaning ascribed to it in
Section 4.03(c) of this Depositary Agreement.
"Series G Agreement" shall mean the Series G Securities Purchase
Agreement dated May 13, 1998 between the Company and the Purchasers (as defined
therein), as amended.
"Series G Preferred" shall mean the shares of Series G Convertible
Exchangeable Preferred Stock of the Company, par value $.01 per share, issued
pursuant to the Series G Agreement.
"Series G Shares" shall have the meaning ascribed to it in the
definition of Option Exercise Price.
"Stockholder Shares" shall have the meaning ascribed to it in the
definition of Option Exercise Price.
"Transitory Subsidiary" shall have the meaning ascribed to it in the
Preamble to this Depositary Agreement.
"Triumph Agreement" shall mean the Securities Purchase Agreement dated
as of January 31, 1997 among the Company, Triumph-Connecticut Limited
Partnership and the other Purchasers named therein, as amended.
"Triumph Warrants" shall have the meaning ascribed to it in the
definition of Option Exercise Price.
"Triumph Warrant Shares" shall have the meaning ascribed to it in the
definition of Option Exercise Price.
"1933 Act" shall mean the Securities Act of 1933 and the rules and
regulations promulgated thereunder, as amended from time to time.
References to any party hereto shall include such party's respective
successors and assigns.
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ARTICLE II
DEPOSIT OF NEW COMMON STOCK
SECTION 2.01 Deposit of New Common Stock; Depositary Receipts.
(a) At or prior to the Effective Time, the Company shall deposit with
the Depositary a number of shares of New Common Stock equal to the number of
shares of Old Common Stock outstanding immediately prior to the Effective Time
(excluding any Dissenting Shares and shares held in the Company's treasury). The
Company shall make such deposit by delivery of (i) a certificate or certificates
for the New Common Stock to be deposited, registered in the name of the
Depositary, (ii) all such certifications as may be required by the Depositary in
accordance with the provisions of this Depositary Agreement and (iii) a written
order directing the Depositary, in its capacity as Depositary hereunder, to
execute and deliver to or upon the written order of the person or persons stated
in such order a Depositary Receipt or Depositary Receipts representing the
number of Depositary Shares set forth in such order.
(b) All shares of New Common Stock to be issued by the Company from and
after the date hereof through the Option Determination Date (other than the Note
Conversion Shares (as defined in the Loan Agreement)) shall be deposited
hereunder by the Company in the manner prescribed by paragraph (a) above. In the
case of any conversion or exercise of any convertible security, warrant or
option (other than the Note (as defined in the Loan Agreement)) from and after
the date hereof and through the Option Determination Date, the Company shall
deposit with the Depositary in the manner prescribed in paragraph (a) above a
number of shares of New Common Stock corresponding to the number of Depositary
Shares issuable upon conversion or exercise of such convertible security,
warrant or option; provided that, following the Option Determination Date, the
Company's obligation to deposit shares of New Common Stock hereunder shall be
governed by and subject to Sections 5.02 and 5.03.
(c) Promptly following any deposit by the Company of shares of New
Common Stock with the Depositary pursuant to this Section 2.01, the Depositary
shall issue Depositary Receipts in the manner directed by the Company, such
Depositary Receipts representing a number of Depositary Shares corresponding to
the number of shares of New Common Stock so deposited by the Company with the
Depositary.
(d) Each Depositary Share shall, as provided herein, represent an
interest in one share of New Common Stock. Subject to the terms of this
Depositary Agreement, until the Option Determination Date, each share of New
Common Stock represented by a Depositary Share shall be held in custody by the
Depositary and
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each owner of a Depositary Share shall be entitled, proportionately, to all the
rights of the New Common Stock represented thereby, including the dividend,
voting and liquidation rights set forth in the Certificate of Incorporation.
Following the Option Determination Date, each owner of a Depositary Share shall
be entitled to receive the Depositary Share Consideration in respect of such
Depositary Share.
ARTICLE III
COMPANY CALL OPTION
SECTION 3.01 Company Call Option.
(a) Prior to a Call Option Transfer, the Company shall have the right,
at its sole option, to purchase all but not less than all of the outstanding
shares of New Common Stock deposited with the Depositary hereunder as of the
Option Closing Date at a price per share of New Common Stock equal to the Option
Exercise Price and on such other terms and conditions as are specified in this
Depositary Agreement. The Company may elect to exercise the Call Option by
delivery of the Call Option Exercise Notice to the Depositary at any time during
the period (the "Call Period") commencing February 1, 2002 and continuing until
December 31, 2002.
(b) The Call Option Exercise Notice shall specify a date for the Option
Closing (the "Option Closing Date"), which shall be a date not earlier than ten
Business Days after the date of the Call Option Exercise Notice nor later than
January 15, 2003; provided, that the Company, in its sole discretion, at any
time may postpone the Option Closing to a date no later than January 15, 2003.
The Option Closing shall take place at 10:00 a.m. (Boston time) on the Option
Closing Date at the offices of the Company's legal counsel in Boston,
Massachusetts.
(c) If, in lieu of the Call Option Exercise Notice, the Company delivers
to the Depositary the Call Option Rejection Notice or if the Call Period expires
without the Call Option Exercise Notice being provided to the Depositary, then,
effective as of the date of the Call Option Rejection Notice or as of the
expiration of the Call Period, as the case may be, the Call Option shall
terminate and become null and void and of no further force or effect.
SECTION 3.02 Effectiveness. This Article III, including without
limitation the Company's right to exercise the Call Option, shall be of no force
or effect from and after a Call Option Transfer.
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ARTICLE IV
ALPHARMA CALL OPTION
SECTION 4.01 Alpharma Call Option.
(a) The Company shall deliver the Option Exercise Deliverables to
Alpharma on or before March 30, 2002. Alpharma shall have the right, at its sole
option, to purchase all but not less than all of the outstanding shares of New
Common Stock deposited with the Depositary hereunder as of the Option Closing
Date at a price per share of New Common Stock equal to the Option Exercise Price
and on such other terms and conditions as are specified in this Depositary
Agreement. Alpharma may elect to exercise the Call Option by providing the Call
Option Exercise Notice to the Company and the Depositary at any time during the
period (the "Call Period") commencing upon the date the Company delivers to
Alpharma the Option Exercise Deliverables and continuing until the later of (A)
the date 20 days after the date of such delivery and (B) if Alpharma in good
faith disputes the Option Exercise Price pursuant to clause (b) of this Section
4.01, the date 10 days after the Option Exercise Price is determined pursuant to
clause (b) of this Section 4.01.
(b) (i) Following delivery of the Option Exercise Deliverables, if
Alpharma in good faith disputes the Option Exercise Price as shown on the Option
Exercise Price Statement prepared by the Company, Alpharma shall deliver to the
Company within 20 days after receiving the Option Exercise Deliverables a
statement (the "Dispute Notice") disputing the Company's calculation of and,
insofar as Alpharma is capable based upon the information available to it,
setting forth what Alpharma believes is the correct Option Exercise Price and
describing the basis for the determination of such different Option Exercise
Price. Alpharma and the Company shall use reasonable efforts to resolve such
differences regarding the determination of the Option Exercise Price for a
period of 10 days after Alpharma has given the Dispute Notice.
(ii) If Alpharma and the Company do not reach a final resolution
within 10 days after Alpharma has given the Dispute Notice, unless Alpharma and
the Company mutually agree to continue their efforts to resolve such
differences, Alpharma and the Company shall agree within five Business Days
thereafter upon one of the public accounting firms currently known as the "Big
Five" (other than one which has a then existing relationship with either
Alpharma or the Company) (the "Neutral Accountants") to resolve such differences
in the manner provided below. Alpharma and the Company shall each be entitled to
make a presentation to the Neutral Accountants, pursuant to procedures to be
determined by the Neutral Accountants, advocating the merits of the Option
Exercise Price espoused by such
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party, which presentations shall be made within 10 Business Days after Alpharma
and the Company agree on the Neutral Accountants; and the Neutral Accountants
shall be required to resolve the differences between Alpharma and the Company
and to determine the Option Exercise Price within 10 Business Days thereafter.
The Option Exercise Price determined by the Neutral Accountants shall be deemed
to be the Option Exercise Price. Such determination by the Neutral Accountants
shall be conclusive and binding upon Alpharma and the Company, absent fraud or
manifest error. Nothing herein shall be construed to authorize or permit the
Neutral Accountants (A) to determine any questions or matters whatsoever under
or in connection with this Depositary Agreement except for the resolution of
differences between Alpharma and the Company regarding the Option Exercise Price
and (B) to apply any accounting methods, treatments, principles or procedures
other than as set forth in the definitions of "2001 Audited Financial
Statements," "Adjusted 2001 Operating Income," "Excluded Interest Expense,"
"GAAP Adjustments" and "Option Exercise Price" in Article I of this Depositary
Agreement.
(iii) Alpharma, on the one hand, and the Company, on the other
hand, shall share equally the fees and expenses of the Neutral Accountants;
provided that if the Neutral Accountants determine that either Alpharma or the
Company has adopted a position or positions with respect to the Option Exercise
Price that is unreasonable, frivolous or clearly without merit, the Neutral
Accountants may, in their discretion, assign a greater portion of any such fees
and expenses to such party.
(iv) The failure of Alpharma to deliver a Dispute Notice within
20 days after receiving the Option Exercise Deliverables shall constitute
acceptance of the Option Exercise Price set forth on the Option Exercise Price
Statement, whereupon such Option Exercise Price shall be deemed to be conclusive
and the final determination of the Option Exercise Price.
(v) During the period commencing January 1, 2002 and continuing
until the earliest of (A) the date 20 days after such delivery of the Option
Exercise Deliverables, (B) the delivery to the Company of the Call Option
Exercise Notice and (C) the delivery to the Company of the Dispute Notice, the
Company will afford Alpharma, during regular business hours of the Company, upon
reasonable notice and as often as Alpharma may reasonably request, access to the
Company's books, accounts, records and work papers and to the Company's
employees and independent public accountants solely for the purpose of
evaluating the accuracy of the Option Exercise Price Statement; provided that
such access shall not interfere with or disrupt the business or operations of
the Company.
(c) The Call Option Exercise Notice shall specify a date not earlier
than ten Business Days nor later than 15 Business Days after the date of the
Call Option Exercise Notice for the closing of the exercise of the Call Option.
The closing of the exercise of the Call Option shall take place at 10:00 a.m.
(Boston time) on the date
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specified in the Call Option Exercise Notice (or such other date as may be
provided under Section 4.02) at the offices of the Company's legal counsel in
Boston, Massachusetts.
(d) If, in lieu of the Call Option Exercise Notice, Alpharma delivers
the Call Option Rejection Notice to the Company and the Depositary or if the
Call Period expires without the Call Option Exercise Notice being provided to
the Company or the Depositary, then, effective as of the date of the Call Option
Rejection Notice or as of the expiration of the Call Period, as the case may be,
the Call Option shall terminate and become null and void and of no further force
or effect.
SECTION 4.02 Option Closing Date.
(a) Subject to this Section 4.02(a) and Sections 4.02(b) and 4.02(c)
below, the Option Closing shall occur on the date specified in the Call Option
Exercise Notice (the "Option Closing Date"); provided that notwithstanding
anything in this Depositary Agreement to the contrary, the Option Closing shall
not occur on the scheduled Option Closing Date if either of the following
conditions are in existence as of the scheduled Option Closing Date:
(i) any provision of any applicable law or regulation or any
judgment, injunction, order or decree prohibits the Option Closing and
the failure to comply with such provision, judgment, injunction, order
or decree would have a material adverse effect on the Company or
Alpharma (the "Conflict of Law Condition"); or
(ii) any Required Antitrust Approval shall not have been obtained
(the "Antitrust Approval Condition").
If either of the closing conditions described above has not been
satisfied as of the scheduled Option Closing Date, then the Option Closing Date
shall be extended to the earlier of (x) the date which is five Business Days
after the date that both closing conditions have been satisfied and (y) the date
which is 90 days after the date of the Call Option Exercise Notice (the "90-Day
Extension Date").
If the Antitrust Approval Condition has not been satisfied as of the
90-Day Extension Date, the Option Closing Date shall be further extended to the
earlier of (I) the date which is five Business Days after the date that both
closing conditions have been satisfied and (II) the date which is 180 days after
the date of the Call Option Exercise Notice (the "180-Day Extension Date").
(b) If the Option Closing does not occur on or prior to the 90-Day
Extension Date or the 180-Day Extension Date, as applicable, because one or both
of the closing conditions set forth in Section 4.02(a) has not been satisfied,
then, effective as of such
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date, the Call Option shall terminate and become null and void and of no further
force or effect.
(c) Notwithstanding the foregoing, if any event shall occur during the
period commencing on the date on which Alpharma delivers the Call Option
Exercise Notice to the Company and ending on the Option Closing Date that has a
Material Adverse Effect with respect to the Company, Alpharma may, in its sole
discretion, elect not to proceed with the Option Closing and to terminate the
Call Option by providing written notice of such election and termination to the
Company and the Depositary within 10 days of becoming aware of such event (but
in no event after the Option Closing Date). Effective as of the date of such
notice, the Call Option shall terminate and become null and void and of no
further force or effect.
SECTION 4.03 Covenants of the Company and Alpharma.
(a) The Company and Alpharma shall (i) use all commercially
reasonable efforts to promptly take, or cause to be taken, all actions and do,
or cause to be done, all things necessary, proper or appropriate to satisfy the
conditions to the Option Closing set forth in Section 4.02(a) and to consummate
and make effective the transactions contemplated by this Depositary Agreement on
the terms and conditions set forth herein and (ii) not take any action which
might reasonably be expected to impair the ability of the parties to consummate
the transactions contemplated by this Depositary Agreement.
(b) In the event that any action, suit, proceeding or
investigation relating hereto or to the transactions contemplated by this
Depositary Agreement is commenced, whether before or after the exercise of the
Call Option, each of the Company and Alpharma agrees to fully cooperate and use
their respective best efforts to vigorously defend against and respond thereto
(including, without limitation and, to the extent applicable, seeking to remove
promptly any injunction or other legal barrier that may prevent the consummation
of the transactions contemplated by this Depositary Agreement).
(c) The Company and Alpharma shall each:
(i) take all actions necessary to make the filings
required of such party under the Xxxx Xxxxx Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), relating to the
possible exercise of the Call Option by September 30, 2001, which
filings shall comply in all respects with the requirements of the HSR
Act;
(ii) comply at the earliest practicable date with any
formal or informal request for additional information received by such
party from the
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Federal Trade Commission or Antitrust Division of the Department of
Justice pursuant to the HSR Act;
(iii) consult and cooperate with the other party and
consider in good faith the views of the other party, in connection with
any analyses, appearances, presentations, memoranda, briefs, arguments,
opinions and proposals made or submitted by or on behalf of any party in
connection with proceedings under or relating to the Required Antitrust
Approvals;
(iv) request early termination of the applicable waiting
period under the HSR Act; and
(v) take any and all such other commercially reasonable
actions as are required in order to obtain the approval of the
governmental entity with the jurisdiction of enforcing applicable
antitrust laws (the "Required Antitrust Approvals"), including without
limitation complying with the HSR Act and obtaining termination or
expiration of the applicable waiting period under the HSR Act.
At any time and from time to time following the date of this Depositary
Agreement and prior to receipt of the Required Antitrust Approvals, each party
shall provide 30 days' prior written notice to the other party of any
transactions or other business activities in which such party is engaged which
such party reasonably believes could have an adverse impact on either party's
ability to obtain the Required Antitrust Approvals.
SECTION 4.04 Effectiveness. This Article IV, including without
limitation Alpharma's right to exercise the Call Option, shall be of no force or
effect prior to a Call Option Transfer.
ARTICLE V
THE CALL OPTION CLOSING
SECTION 5.01 Closing Shares.
(a) On or before the date three Business Days prior to the Option
Closing Date, (i) the Depositary shall provide the Company and, following a Call
Option Transfer, Alpharma with a written notice (the "Initial Depositary
Notice") specifying the total number of shares of New Common Stock deposited
hereunder as of the date five Business Days prior to the Option Closing Date
(the "Preliminary Closing Shares"), and (ii) the Company shall deliver to the
Depositary and, following a Call
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Option Transfer, Alpharma a written notice specifying as of the date five
Business Days prior to the Option Closing Date (I) the amounts specified in
clauses (A)(ii)(b) and (B)(ii) of the definition of Option Exercise Price and
(II) the number of outstanding Triumph Warrant Shares and Series G Shares, if
applicable. Following receipt of the Initial Depositary Notice and on or before
the Option Closing Date, the Company, if it shall have exercised the Call Option
pursuant to Section 3.01 of this Depositary Agreement, or Alpharma, if it shall
have exercised the Call Option pursuant to Section 4.01 of this Depositary
Agreement (the party exercising the Call Option being referred to herein as the
"Exercising Party"), shall pay to the Depositary an amount equal to the product
of (A) the Option Exercise Price and (B) the number of Preliminary Closing
Shares (if applicable, taking into account the proviso to the definition of
Option Exercise Price), by wire transfer to a bank account of the Depositary
(the "Depositary Bank Account") designated by the Depositary in writing prior to
the Option Closing in a bank having combined capital, surplus and undivided
profits aggregating at least $500,000,000.
(b) On the Option Closing Date, (i) the Depositary shall provide the
Company and, following a Call Option Transfer, Alpharma with a written notice
(the "Follow-up Depositary Notice") specifying the total number of shares of New
Common Stock deposited hereunder as of the Option Closing Date (the "Final
Closing Shares"), and (ii) the Company shall deliver to the Depositary and,
following a Call Option Transfer, Alpharma a written notice specifying the
number of Triumph Warrant Shares and Series G Shares, if applicable, outstanding
as of the Option Closing Date. On or prior to the first Business Day following
receipt of the Follow-up Depositary Notice, the Exercising Party shall pay to
the Depositary an amount equal to the product of (A) the Option Exercise Price
and (B) the difference between the number of Preliminary Closing Shares and the
number of Final Closing Shares (taking into account the proviso to the
definition of Option Exercise Price, if applicable) by wire transfer to the
Depositary Bank Account.
(c) Any payments hereunder shall be made for payment to the holders of
Depositary Shares, and the Depositary shall disburse the funds so deposited to
the holders of Depositary Shares in accordance with Section 5.02. At the Option
Closing, the Depositary shall deliver to the Exercising Party a certificate or
certificates evidencing all of the New Common Stock held by the Depositary for
which payment has been made by the Exercising Party accompanied by a duly
endorsed stock power or stock powers with respect thereto. Any certificates not
delivered at the Option Closing shall be delivered promptly upon receipt of
payment therefor in accordance with subsection (b) of this Section 5.01.
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SECTION 5.02 Notice of Option Exercise; Delivery of Option Exercise
Price.
(a) Promptly following the Option Determination Date, the Depositary
shall mail notice thereof, postage prepaid, to the holders of record of the
Depositary Shares at their respective addresses then appearing on the books of
the Depositary, but neither failure to mail such notice nor any defect therein
or in the mailing thereof shall affect the validity of any exercise of the Call
Option or the rights of the holders of Depositary Shares to receive the
Depositary Share Consideration. The Company shall provide the Depositary with
the form of such notice and each such notice shall state the form and amount of
the Depositary Share Consideration. Such notice shall be accompanied by a letter
of transmittal (the "Letter of Transmittal"), which the Company shall supply, in
customary form for use in the exchange of Depositary Receipts representing
Depositary Shares for cash or certificates representing shares of New Common
Stock, as the case may be (which Letter of Transmittal shall specify (i) the
place or places designated by the Depositary where Depositary Receipts
representing Depositary Shares are to be surrendered for payment of the
Depositary Share Consideration and (ii) that delivery of Depositary Receipts
shall be effected, and risk of loss shall pass, only upon proper delivery to the
Depositary).
(b) Each holder of Depositary Shares following the Option Determination
Date shall, upon surrender to the Depositary of a Depositary Receipt or
Depositary Receipts and a duly executed Letter of Transmittal, be entitled to
receive the Depositary Share Consideration attributable to the Depositary Shares
held of record by such holder. Upon receipt of a duly completed Letter of
Transmittal and a Depositary Receipt or Depositary Receipts, without
unreasonable delay, the Depositary shall deliver to such holder, or to the
person or persons designated by such holder as hereinafter provided, the number
of whole shares of New Common Stock or cash represented by the Depositary
Receipt or Depositary Receipts so surrendered. No holder of a Depositary Receipt
or Depositary Receipts shall be entitled to any distribution of shares of New
Common Stock held by the Depositary pursuant to the terms of this Depositary
Agreement except upon the occurrence of the Option Expiration Date and pursuant
to the provisions of this Article V. No holder of a Depositary Receipt or
Depositary Receipts shall be entitled to any distribution of cash held by the
Depositary pursuant to the terms of this Depositary Agreement except upon the
occurrence of the Option Closing and pursuant to the provisions of this Article
V. In no event will fractional shares of New Common Stock be distributed by the
Depositary. If fractional shares of New Common Stock would otherwise be required
to be issued to a holder of Depositary Shares, the Depositary shall pay to such
holder in cash an amount equal to such fraction multiplied by the fair market
value of one share of New Common Stock on the Option Expiration Date, as
determined by the Board of Directors of the Company in good faith, which
determination of fair market value shall promptly be provided in writing by the
Company to the Depositary. Delivery of the New Common Stock or the cash being
distributed by the Depositary hereunder shall be made by the delivery of such
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certificates, documents of title and other instruments as the Depositary may
deem appropriate, which, if required by law, shall be properly endorsed or
accompanied by proper instruments of transfer.
Delivery of the New Common Stock or the cash to be distributed by the
Depositary hereunder shall be made by the Depositary by first class mail under
the provisions of the Depositary's first class mail bond protecting the
Depositary from loss or liability arising out of the non-receipt or non-delivery
of such New Common Stock or cash or arising out of the replacement thereof, for
any deliveries where market value does not exceed the amount of the Depositary's
first class mail bond. Any mail delivery exceeding such amount shall be
delivered by registered mail or overnight mail and shall be insured separately
for the replacement value of its contents at the time of mailing. Any Depositary
Share Consideration remaining unclaimed at the expiration of two years after the
date of mailing of the notice specified in Section 5.02(a) to holders of
Depositary Receipts shall be returned to the Exercising Party, if such notice
relates to an Option Closing, or to the Company, if such notice relates to an
Option Expiration Date, after which return such holders shall have no claim
against the Depositary but shall either have a claim as an unsecured creditor
against the Exercising Party for the Option Exercise Price, without interest, or
against the Company for shares of New Common Stock (together with accrued and
unpaid dividends from the Option Expiration Date), as the case may be, but shall
have no greater rights against the Company or, following a Call Option Transfer,
against Alpharma than may be accorded such party's respective general creditors
under applicable law. Notwithstanding the foregoing, none of Alpharma, the
Company and the Depositary shall be liable to any holder of Depositary Shares
for any amount paid to any public official pursuant to abandoned property laws.
After an Option Closing, any portion of the Depositary Share Consideration
remaining unclaimed by holders of Depositary Shares as of the date which is
immediately prior to such time as such amounts would otherwise escheat to or
become property of any government entity shall, to the extent permitted by
applicable law, become property of the Exercising Party, free and clear of any
claims or interest of any person previously entitled thereto. If the Call Option
terminates without being exercised, or if such option is exercised but the
Option Closing does not occur on or before January 15, 2003 or, following a Call
Option Transfer, the Final Extension Date, any portion of the New Common Stock
remaining unclaimed by holders of Depositary Shares as of the date which is
immediately prior to such time as such New Common Stock would otherwise escheat
to or become property of any government entity shall, to the extent permitted by
applicable law, become property of the Company, free and clear of any claims or
interest of any person previously entitled thereto.
(c) If the New Common Stock or the cash being distributed are to be
delivered to a person or persons other than the Record Holder of the Depositary
Receipt or Depositary Receipts being surrendered, such holder shall execute and
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deliver to the Depositary a written order (accompanied by a signature guarantee
if required by the Depositary) so directing the Depositary and the Depositary
may require that the Depositary Receipt or Depositary Receipts surrendered by
such holder for withdrawal of such shares of New Common Stock be properly
endorsed in blank or accompanied by a properly executed instrument of transfer
in blank. It shall be a condition of such distribution that the person
requesting such distribution shall pay the Depositary any transfer or other
taxes required as a result of such payment to a person other than the registered
holder of such Depositary Shares or establish to the satisfaction of the
Exchange Agent (as defined in the Merger Agreement) that such tax has been paid
or is not payable.
(d) After the Option Determination Date, there shall be no further
registration of transfers of Depositary Shares outstanding prior to such date.
If, after such date, Depositary Receipts are presented to the Depositary they
shall be cancelled and exchanged for the Depositary Share Consideration.
(e) Any funds received by the Depositary pursuant to this Depositary
Agreement shall be held by the Depositary, in its capacity as Depositary, on
behalf of the holders of Depositary Receipts. No interest will accrue on such
funds.
SECTION 5.03 Company Options, Etc. The Company will make appropriate
provision to assure that any securities of the Company convertible into
Depositary Shares of the Company, or any rights, options or warrants to acquire
Depositary Shares outstanding on the Option Closing Date (whether or not
convertible, vested, exercisable or exchangeable on such date) are convertible
into or exercisable or exchangeable solely for the cash that the holders thereof
would have received had they converted, exercised or exchanged such convertible
securities, rights, options and warrants for Depositary Shares, immediately
prior to the Option Closing Date. Promptly after the Option Determination Date,
the Depositary shall give the holders of such convertible securities, rights,
options or warrants notice (a "Determination Date Notice") of the event giving
rise to the Option Determination Date (i.e., the Option Closing or Option
Expiration Date), which Determination Date Notice shall be in the form provided
by the Company to the Depositary. If the event giving rise to the Option
Determination Date was the Option Closing, then from and after the Option
Determination Date, holders of such convertible securities, rights, options or
warrants shall have the right to receive from the Exercising Party (and not the
Depositary or, if Alpharma is the Exercising Party, the Company) upon conversion
or exercise thereof (and the payment of any exercise or purchase price provided
for under the terms of such convertible security, right, warrant or option) cash
in an amount equal to the Option Exercise Price for each Depositary Share for
which such convertible security, right warrant or option is convertible or
exercisable. Upon any such conversion or exercise, the Exercising Party shall
promptly pay such holders the cash to which they would be entitled hereunder. If
the event giving rise to the Option Determination Date was the Option Expiration
Date, then, from and
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after the Option Determination Date, holders of such convertible securities,
rights, options or warrants shall have the right to receive from the Company
(and not Alpharma or the Depositary) upon conversion or exercise thereof (and
the payment of any exercise or purchase price provided for under the terms of
such convertible security, right, warrant or option) the number of shares of New
Common Stock for which such convertible security, right warrant or option is
convertible or exercisable. Nothing herein shall be deemed or construed as a
waiver of any other rights that a holder of any such securities may have.
ARTICLE VI
FORM OF DEPOSITARY RECEIPTS, DEPOSIT OF STOCK,
EXECUTION AND DELIVERY, TRANSFER, SURRENDER
AND REDEMPTION OF DEPOSITARY RECEIPTS
SECTION 6.01 Form and Transferability of Depositary Receipts.
(a) Depositary Receipts shall be engraved or printed or lithographed on
steel-engraved borders and shall be substantially in the form set forth in
Exhibit A annexed to this Depositary Agreement, with appropriate insertions,
modifications and omissions, as hereinafter provided. Depositary Receipts shall
be executed by the Depositary by the manual signature of a duly authorized
officer of the Depositary, provided that such signature may be a facsimile if a
Registrar for the Depositary Receipts (other than the Depositary) shall have
been appointed and such Depositary Receipts are countersigned by manual
signature of a duly authorized officer of the Registrar. No Depositary Receipt
shall be entitled to any benefits under this Depositary Agreement or be valid or
obligatory for any purpose, unless it shall have been executed manually by a
duly authorized officer of the Depositary or if a Registrar for the Depositary
Receipts (other than the Depositary) shall have been appointed, by facsimile
signature of a duly authorized officer of the Depositary and, if executed by
facsimile signature of the Depositary, shall have been countersigned manually by
a duly authorized officer of such Registrar. The Depositary shall record on its
books each Depositary Receipt so signed and delivered as hereinafter provided.
All Depositary Receipts shall be dated the date of their execution.
(b) Except as the Depositary may otherwise determine, Depositary
Receipts shall be in denominations of any number of whole Depositary Shares.
(c) Depositary Receipts may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes not inconsistent with the
provisions of this Depositary Agreement as may be required by the Depositary or
required to comply with any applicable law or any regulation thereunder or with
the rules and regulations of any securities exchange upon which the Depositary
Shares or the
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Depositary Receipts, may be listed or to conform with any usage with respect
thereto, or to indicate any special limitations or restrictions to which any
particular Depositary Receipts are subject by reason of the date of issuance of
the Deposit Shares or otherwise.
(d) Title to a Depositary Receipt which is properly endorsed or
accompanied by a properly executed instrument of transfer and to Depositary
Shares evidenced thereby shall be transferable by delivery with the same effect
as in the case of a negotiable instrument; provided, however, that until a
Depositary Receipt shall be transferred on the books of the Depositary as
provided in Section 4.03, the Depositary, each Depositary's Agent and the
Company may, notwithstanding any notice to the contrary, treat the Record Holder
thereof at such time as the absolute owner thereof for the purpose of
determining the person entitled to distribution of dividends or other
distributions or to any notice provided for in this Depositary Agreement and for
all other purposes.
SECTION 6.02 Execution and Delivery of Depositary Receipts.
(a) Upon each delivery to the Depositary of a certificate or
certificates for New Common Stock to be deposited hereunder, registered in its
name as provided above, the Depositary shall hold such shares in an account to
be established by the Depositary, at the Depositary's Office, or at such other
place or places as the Depositary shall determine.
(b) Upon receipt by the Depositary of a certificate or certificates for
New Common Stock deposited in accordance with the provisions of this Section
4.02, together with the other documents required as above specified, the
Depositary, subject to the terms and conditions of this Depositary Agreement,
shall execute and deliver a Depositary Receipt or Depositary Receipts evidencing
beneficial ownership of the number of Depositary Shares representing the New
Common Stock so deposited and registered in such name or names as may be
requested by the person or persons named in the written order delivered to the
Depositary in accordance with the first paragraph of this Section 6.02. The
Depositary shall execute and deliver such Depositary Receipt at the Depositary's
Office and at such other offices, if any, as it may designate. Delivery at other
offices shall be at the risk and expense of the Company. However, in each case,
subsequent to the initial deposit hereunder, such delivery shall be made only
upon payment to the Depositary of all taxes and governmental charges and fees
payable in connection with such deposit and the transfer of the deposited New
Common Stock.
SECTION 6.03 Transfer of Depositary Receipts. Subject to the terms and
conditions of this Depositary Agreement, the Depositary shall make transfers on
its books from time to time of Depositary Receipts upon any surrender thereof by
the holder in person or by duly authorized attorney, properly endorsed or
accompanied
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by a properly executed instrument of transfer, and duly stamped as may be
required by law. Thereupon the Depositary shall execute a new Depositary Receipt
or Depositary Receipts and deliver the same to or upon the order of the person
entitled thereto evidencing beneficial ownership of the same aggregate number of
Depositary Shares as those evidenced by the Depositary Receipt or Depositary
Receipts surrendered.
SECTION 6.04 Combinations and Split-ups of Depositary Receipts. Upon
surrender of a Depositary Receipt or Depositary Receipts at the Depositary's
Office or at such other offices as it may designate for the purpose of effecting
a split-up or combination of such Depositary Receipt or Depositary Receipts, by
the holder or by duly authorized attorney, properly endorsed or accompanied by a
properly executed instrument of transfer, together with written instructions
specifying the number of Depositary Receipts to be received upon such split-up
or combination, and subject to the terms and conditions of this Depositary
Agreement, the Depositary shall execute and deliver a new Depositary Receipt or
Depositary Receipts in the authorized denominations requested, evidencing the
same aggregate number of Depositary Shares evidenced by the Depositary Receipt
or Depositary Receipts surrendered.
SECTION 6.05 Limitations on Execution and Delivery, Transfer, Split-up,
Combination, Surrender and Exchange of Depositary Receipts.
(a) As a condition precedent to the execution and delivery, transfer,
split-up, combination, surrender, or exchange of any Depositary Receipt, the
Depositary, or any of the Depositary's Agents, or the Company, may require
payment to it of a sum sufficient for the payment (or, in the event that the
Depositary or the Company shall have made such payment, the reimbursement to it)
of any tax or other governmental charge with respect thereto, may require the
production of proof satisfactory to it as to the identity and genuineness of any
signature and may also require compliance with such regulations, if any, as the
Depositary or the Company may establish consistent with the provisions of this
Depositary Agreement.
(b) The transfer of Depositary Receipts may be refused, or the transfer,
split-up, combination, surrender or exchange of outstanding Depositary Receipts
may be suspended (i) during any period when the register of stockholders of the
Company is closed, or (ii) if any such action is deemed necessary or advisable
by the Depositary, any of the Depositary's Agents or the Company at any time or
from time to time because of any requirement of law or of any government or
governmental body or commission, or under any provision of this Depositary
Agreement.
SECTION 6.06 Lost Depositary Receipts, etc. In case any Depositary
Receipt shall be mutilated or destroyed or lost or stolen, the Depositary in its
discretion may execute and deliver a Depositary Receipt of like form and tenor
in exchange and substitution for such mutilated Depositary Receipt, or in lieu
of and in substitution
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for such destroyed, lost or stolen Depositary Receipt, upon receipt by the
Depositary of an appropriate affidavit of loss and a corporate bond of indemnity
which shall include indemnification of the Company and the Depositary for the
Depositary Shares evidenced by such Depositary Receipt by a surety all in such
form and substance as have been approved by the Depositary.
SECTION 6.07 Cancellation and Destruction of Surrendered Depositary
Receipts. All Depositary Receipts surrendered to the Depositary or any
Depositary's Agent shall be cancelled by the Depositary. Except as prohibited by
applicable law or regulation, the Depositary is authorized to destroy such
Depositary Receipts so cancelled.
SECTION 6.08 Representations and Warranties as to Stock. The Company
hereby represents and warrants that the New Common Stock deposited hereunder
upon consummation of the Merger is, and will be deemed to have represented and
warranted that any additional shares of New Common Stock which it deposits
hereunder from time to time in accordance with Section 2.01 will be, when
issued, validly issued, fully paid and nonassessable. Such representation and
warranty shall survive any deposit of shares of New Common Stock and the
issuance of Depositary Receipts.
ARTICLE VII
THE DEPOSITED SECURITIES, NOTICES
SECTION 7.01 Cash Distributions. Whenever the Depositary shall receive
any cash dividend or other cash distribution on the New Common Stock, the
Depositary shall, subject to Section 6.02, promptly distribute to Record Holders
of Depositary Receipts on the Record Date fixed pursuant to Section 7.03 hereof
such amounts of such sum as are, as nearly as practicable, in proportion to the
respective numbers of Depositary Shares evidenced by the Depositary Receipts
held by such holders; provided, that in case the Company or the Depositary shall
be required to withhold and does withhold from any cash dividend or other cash
distribution received by the Depositary in respect of the Stock an amount on
account of taxes, the amount made available for distribution or distributed in
respect of Depositary Shares shall be reduced accordingly. The Depositary shall
distribute or make available for distribution, as the case may be, only such
amount, however, as can be distributed without attributing to any owner of
Depositary Shares a fraction of one cent and any balance, not so distributable
shall be held by the Depositary (without liability for interest thereon) and
shall be added to and be treated as part of the next sum received by the
Depositary for distribution to Record Holders of Depositary Receipts then
outstanding.
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SECTION 7.02 Distributions Other Than Cash. Whenever the Depositary
shall receive any distribution other than cash upon the New Common Stock, the
Depositary shall, subject to Section 6.02, promptly distribute to Record Holders
of Depositary Receipts on the Record Date fixed pursuant to Section 7.03 hereof
such amount of the securities or property received by it as are, as nearly as
practicable, in proportion to the respective numbers of Depositary Shares
evidenced by the Depositary Receipts held by such holders.
SECTION 7.03 Fixing of Record Date for Holders of Depositary Receipts.
Whenever any cash dividend or other cash distribution shall become payable or
any distribution other than cash shall be made, or if rights, preferences or
privileges shall at any time be offered, with respect to New Common Stock, or
whenever the Depositary shall receive notice of any meeting at which holders of
New Common Stock are entitled to vote or of which holders of New Common Stock
are entitled to notice, the Depositary shall in each such instance fix a Record
Date for the determination of the Record Holders of Depositary Receipts who
shall be entitled to receive such dividend, distribution, rights, preferences or
privileges, or to give instructions for the exercise of voting rights at any
such meeting, or who shall be entitled to notice of such meeting. The Record
Date established by the Depositary shall be the same as the Record Date set by
the Company for the holders of its New Common Stock with respect to the
corresponding right or privilege.
SECTION 7.04 Voting Rights.
(a) Upon receipt of notice of any meeting at which the holders of New
Common Stock are entitled to vote, the Depositary shall, as soon as practicable
thereafter, mail to the Record Holders of Depositary Receipts a notice which
shall be provided by the Company and which shall contain (i) such information as
is contained in such notice of meeting, and (ii) a statement that the Record
Holders of Depositary Receipts at the close of business on a specified Record
Date will be entitled, subject to any applicable provision of law and of the
Company's Certificate of Incorporation, to instruct the Depositary as to the
exercise of the voting rights pertaining to the number of shares of New Common
Stock represented by their respective Depositary Shares, and a brief statement
as to the manner in which such instructions may be given. Upon the written
request of a Record Holder of a Depositary Receipt on such Record Date, the
Depositary shall vote or cause to be voted the number of shares of New Common
Stock represented by the Depositary Shares evidenced by such Depositary Receipt
in accordance with the instructions set forth in such request. The Company
hereby agrees to take all reasonable action which may be deemed necessary by the
Depositary in order to enable the Depositary to vote such New Common Stock or
cause such New Common Stock to be voted. In the absence of specific instructions
from the holder of a Depositary Receipt, the Depositary will abstain from voting
to the extent of the New Common Stock represented by the Depositary Shares
evidenced by such Depositary Receipt.
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(b) Record Holders of Depositary Shares shall also be entitled to vote
on certain amendments of this Depositary Agreement pursuant to Section 9.01.
SECTION 7.05 Changes Affecting Deposited Securities and
Reclassifications, Recapitalizations, etc. Upon any split-up, consolidation or
any other reclassification of New Common Stock, or upon any recapitalization,
reorganization, merger, amalgamation, consolidation or sale of all or
substantially all of the Company's assets affecting the Company or to which it
is a party, the Depositary shall, upon the instructions of the Company treat any
shares of stock or other securities, cash (including without limitation cash
paid in lieu of fractional shares) or property which shall be received by the
Depositary in exchange for or upon conversion of or in respect of the New Common
Stock as new deposited property under this Depositary Agreement, and Depositary
Receipts then outstanding shall, subject to Sections 3.01 and 4.01, thenceforth
represent the new deposited property so received in exchange for or upon
conversion or in respect of such New Common Stock. In any such case the
Depositary may in its discretion, with the approval of the Company, execute and
deliver additional Depositary Receipts, or may call for the surrender of all
outstanding Depositary Receipts to be exchanged for new Depositary Receipts
specifically describing such new deposited property.
SECTION 7.06 Reports. The Depositary shall make available for inspection
by holders of Depositary Receipts at the Depositary's Office, and at such other
places as it may from time to time deem advisable during normal business hours,
copies of this Depositary Agreement and any reports and communications received
from the Company which are both (a) received by the Depositary as the holder of
New Common Stock and (b) made generally available to the holders of New Common
Stock of the Company.
SECTION 7.07 Lists of Depositary Receipt Holders. Promptly upon request
from time to time of the Company or, from and after the Option Closing, Alpharma
(if Alpharma is the Exercising Party), the Depositary shall furnish to the
Company or Alpharma, as the case may be, a list, as of a recent date, of the
names, addresses and holdings of Depositary Shares by all persons in whose names
Depositary Receipts are registered on the books of the Depositary as Record
Holders.
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ARTICLE VIII
THE DEPOSITARY, ALPHARMA AND THE COMPANY
SECTION 8.01 Maintenance of Offices, Agencies, Transfer Books by the
Depositary Registrar.
(a) Upon execution of this Depositary Agreement in accordance with its
terms, the Depositary shall maintain at the Depositary's Office facilities for
the execution and delivery, transfer, surrender and exchange of Depositary
Receipts, and at the offices of the Depositary's Agents, if any, facilities for
the delivery, transfer, surrender and exchange of Depositary Receipts, all in
accordance with the provisions of this Depositary Agreement.
(b) The Depositary shall maintain, or cause one of the Depositary's
Agents to maintain, appropriate records which shall reflect registrations,
registrations of transfers, exchanges, split-ups and combinations and
conversions of Depositary Shares. Such records shall be open for inspection by
the Company, the Record Holders of Depositary Receipts and, from and after the
Option Closing, Alpharma (if Alpharma is the Exercising Party), to the same
extent and for the same purposes as a Record Holder of New Common Stock may
inspect books for the transfer of New Common Stock as provided by applicable
law. The Depositary shall, if requested by the Company or, from and after the
Option Closing, Alpharma (if Alpharma is the Exercising Party), consult with
such party upon its receipt of any request by a Record Holder for inspection.
The Depositary may close such books, at any time or from time to time, when
deemed expedient by it in connection with the performance of its duties
hereunder.
(c) If the Depositary Receipts or the Depositary Shares evidenced
thereby (or the New Common Stock represented by such Depositary Shares) are
quoted with NASDAQ, the Depositary may, with the approval of the Company,
appoint a Registrar for registry of such Depositary Receipts or Depositary
Shares in accordance with the requirements of NASDAQ. Such Registrar (which may
be the Depositary if so permitted by the requirements of NASDAQ) may be removed
and a substitute Registrar appointed by the Depositary upon the request or with
the approval of the Company. If the Depositary Receipts or the Depositary Shares
are (or the New Common Stock is) listed on one or more other stock exchanges or
quoted on a national trading market, the Depositary will, at the request of the
Company, arrange such facilities for the delivery, transfer, surrender and
exchange of such Depositary Receipts, Depositary Shares or New Common Stock as
may be required by law or applicable stock exchange or trading market
regulations.
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SECTION 8.02 Prevention or Delay in Performance by the Depositary, the
Depositary's Agents or the Company. None of the Depositary, any Depositary's
Agent or the Company shall incur any liability to any holder of any Depositary
Receipt, if by reason of any provision of any present or future law, or
regulation promulgated thereunder, of the United States of America, or of any
other governmental authority or, in the case of the Depositary or the
Depositary's Agent, by reason of any provision, present or future, of the
Company's Certificate of Incorporation or in the case of the Depositary, the
Depositary's Agent or the Company by reason of any act of God or war or other
circumstance beyond the control of the relevant party, the Depositary, any
Depositary's Agent or the Company shall be prevented or forbidden from doing or
performing any act or thing which the terms of this Depositary Agreement provide
shall be done or performed; nor shall the Depositary, any Depositary's Agent or
the Company incur any liability to any holder of a Depositary Receipt by reason
of any non-performance or delay, caused as aforesaid, in the performance of any
act or thing which the terms of this Depositary Agreement provide shall or may
be done or performed, or by reason of any exercise of, or failure to exercise,
any discretion provided for in this Depositary Agreement except, in case of any
such exercise or failure to exercise discretion not caused as aforesaid, if
caused by the negligence or willful misconduct of the party charged with such
exercise or failure to exercise.
SECTION 8.03 Obligations of the Depositary, the Depositary's Agents and
the Company.
(a) None of the Depositary, any Depositary's Agent or the Company
assumes any obligation or shall be subject to any liability under this
Depositary Agreement to holders of Depositary Receipts except that nothing
herein shall relieve the Depositary, the Depositary's Agent or the Company for
liability arising out of negligence or bad faith on the part of such person or
persons in the performance of such duties as are specifically set forth in this
Depositary Agreement.
(b) The Depositary agrees to comply with all information reporting and
withholding requirements with respect to any applicable law.
(c) None of the Depositary, any Depositary's Agent or the Company shall
be under any obligation to appear in, prosecute or defend any action, suit or
other proceeding with respect to New Common Stock, Depositary Shares or
Depositary Receipts, which in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all expense and liability
be furnished as often as may be required.
(d) None of the Depositary, any Depositary's Agent or the Company shall
be liable for any action or any failure to act by it in reliance upon the advice
of or information from legal counsel, accountants, any person presenting New
Common
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Stock for deposit, any holder of a Depositary Receipt or any other person
believed by it in good faith to be competent to give such advice or information.
The Depositary, any Depositary's Agent and the Company may each rely and shall
each be protected in acting upon any written notice, request, direction or other
document believed by it to be genuine and to have been signed or presented by
the proper party or parties.
(e) The Depositary and the Depositary's Agents may own and deal in any
class of securities of the Company and its Affiliates and in Depositary Shares.
The Depositary may also act as transfer agent or registrar of any of the
securities of the Company and its Affiliates.
(f) Notwithstanding any other provision of this Depositary Agreement
that may be interpreted to the contrary, neither the Depositary nor any of the
Depositary's Agents is a trustee hereunder. It is intended that neither the
Depositary nor any Depositary's Agent shall be deemed to be an "issuer" of the
securities under the federal securities laws or applicable state securities
laws, it being expressly understood and agreed that the primary purpose of this
Depositary Agreement is to facilitate the implementation of the Call Option and
that the Depositary and the Depositary's Agents are acting only in a ministerial
custodial capacity as Depositary for the Depositary Shares and the Depositary
Share Consideration and have no obligation or right to exercise any discretion
regarding the preservation of any property held on behalf of the Record Holders
of outstanding Depositary Receipts.
(g) Neither the Depositary (or its officers, directors, employees or
agents) nor any Depositary's Agent makes any representation or has any
responsibility as to the validity of the Registration Statement filed by the
Company in connection with the Merger, the New Common Stock, the Depositary
Shares or any instruments referred to therein or herein, or as to the
correctness of any statement made therein or herein; provided, that the
Depositary is responsible for (i) its representations in this Depositary
Agreement and (ii) the validity of any action taken or required to be taken by
the Depositary in connection with this Depositary Agreement.
(h) The Depositary assumes no responsibility for the correctness of the
description of certain provisions of the Depositary Agreement which appears in
the Depositary Receipts. Notwithstanding any other provision herein or set forth
in the Depositary Receipts, the Depositary makes no warranties or
representations as to the validity, genuineness or sufficiency of any New Common
Stock at any time deposited with the Depositary hereunder or of the Depositary
Shares, as to the value of the Depositary Shares or as to any right, title or
interest of the Record Holders of the Depositary Receipts to the Depositary
Shares. The Depositary shall not be accountable for the use or application by
the Company of the Depositary Shares or Depositary Receipts or the proceeds of
either thereof.
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SECTION 8.04 Resignation and Removal of the Depositary, Appointment of
Successor Depositary.
(a) The Depositary may at any time resign as Depositary hereunder by
written notice of its election to do so delivered to the Company, such
resignation to take effect upon the appointment of a successor depositary and
its acceptance of such appointment as hereinafter provided.
(b) The Depositary may at any time be removed by the Company by written
notice of such removal delivered to the Depositary, such removal to take effect
upon the appointment of a successor depositary and its acceptance of such
appointment as hereinafter provided.
(c) In case at any time the Depositary acting hereunder shall resign or
be removed at any time prior to the termination of this Depositary Agreement,
the Company (with the prior written approval of Alpharma from and after a Call
Option Transfer, which shall not be unreasonably withheld or delayed) shall,
within 60 days after the delivery of the notice of resignation or removal, as
the case may be, appoint a successor depositary, which shall be a bank or trust
company having its principal office in the United States of America and having a
combined capital and surplus of at least $500,000,000. If a successor Depositary
shall not have been appointed in 90 days, the resigning Depositary may petition
a court of competent jurisdiction to appoint a successor depositary, and the
Company and Alpharma shall bear equally the expense of any such petition. Every
successor depositary shall execute and deliver to its predecessor and to
Alpharma and the Company an instrument in writing accepting its appointment
hereunder, and thereupon such successor depositary, without any further act or
deed, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor and for all purposes shall be the Depositary
under this Depositary Agreement, and such predecessor, upon payment of all sums
due it and on the written request of the Company, shall promptly execute and
deliver an instrument transferring to such successor all rights and powers of
such predecessor hereunder, shall duly assign, transfer and deliver all rights,
title and interest in the New Common Stock and any moneys or property held
hereunder to such successor, and shall deliver to such successor a list of the
Record Holders of all outstanding Depositary Receipts. Any successor depositary
shall promptly mail notice of its appointment to the Record Holders of
Depositary Receipts.
(d) Any corporation into or with which the Depositary may be merged,
consolidated or converted or any corporation to which the Depositary may
transfer all or substantially all of its shareholder services business shall be
the successor of such Depositary without the execution or filing of any document
or any further act. Such successor depositary may authenticate the Depositary
Receipts either in the name of the predecessor depositary or in the name of the
successor depositary.
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SECTION 8.05 Corporate Notices and Reports. The Company agrees that it
will deliver to the Depositary, and the Depositary will, promptly after receipt
thereof, transmit to the Record Holders of Depositary Receipts, in each case at
the address recorded in the Depositary's books, copies of all notices and
reports (including, without limitation, financial statements) required by law,
by the rules of NASDAQ or any national securities exchange upon which the New
Common Stock, the Depositary Shares or the Depositary Receipts are listed or by
the Company's Certificate of Incorporation to be furnished by the Company to
holders of New Common Stock. Such transmission will be at the Company's expense
and the Company will provide the Depositary with such number of copies of such
documents as the Depositary may reasonably request for such purpose. In
addition, the Depositary will transmit to the holders of Depositary Receipts (at
the Company's expense) such other documents as may be requested by the Company.
SECTION 8.06 Deposit of New Common Stock by the Company. The Company
shall instruct the Depositary upon the deposit of shares of New Common Stock
hereunder as to whether the shares of New Common Stock so deposited are
registered under the provisions of the 1933 Act, are covered by a then effective
registration statement under the 1933 Act or are restricted. The Depositary
agrees that, consistent with Section 6.01(c) of this Depositary Agreement, upon
the instruction of the Company, it shall incorporate into the Depositary
Receipts evidencing the Depositary Shares to be issued in respect of such New
Common Stock any legends or other stock transfer restrictions deemed appropriate
and requested by the Company.
SECTION 8.07 Indemnification. The Company agrees to indemnify the
Depositary, any Depositary's Agent and any Registrar against, and hold each of
them harmless from, any liability, costs and expenses (including reasonable
attorneys' fees) which may arise out of acts performed or omitted in accordance
with the provisions of this Depositary Agreement (as the same may be amended,
modified or supplemented from time to time) and the Depositary Receipts (i) by
the Depositary, any Registrar or any of their respective agents (including any
Depositary's Agent), except for any liability arising out of negligence or bad
faith on the part of any such person or persons, or (ii) by the Company or any
of its respective agents (other than the Depositary, the Depositary's Agents,
the Registrar, if any, or any of their agents).
SECTION 8.08 Charges and Expenses. No charges and expenses of the
Depositary or any Depositary's Agent hereunder, or those of any Registrar, shall
be payable by any person other than the Company, except for any taxes and other
governmental charges and except as provided in this Section 8.08. If the
Depositary incurs charges or expenses at the election of a holder for which it
is not otherwise liable hereunder, such holder will be liable for such charges
and expenses. All other charges and expenses of the Depositary and any
Depositary's Agent hereunder and
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of any Registrar (including, in each case, fees and expenses of counsel)
incident to the performance of their respective obligations hereunder will be
paid upon consultation and agreement between the Depositary and the Company as
to the amount and nature of such charges and expenses. The Depositary shall
present its statement for charges and expenses to the Company once every three
months or at such other intervals as the Company and the Depositary may agree.
SECTION 8.09 Consequential Damages. No party to this Depositary
Agreement shall be liable to the other parties for consequential damages under
any provision of this Depositary Agreement or any consequential damages arising
out of any act or failure to act hereunder.
ARTICLE IX
AMENDMENT AND TERMINATION
SECTION 9.01 Amendment. The form of the Depositary Receipts and any
provision of this Depositary Agreement may at any time and from time to time be
amended by written agreement between Alpharma, the Company and the Depositary in
any respect which they may deem necessary or desirable; provided that prior to
the Option Determination Date, no such amendment or waiver by the Company shall
be effective without the approval of a majority of the Non-Alpharma Directors;
provided, further, that if a Call Option Transfer to Alpharma does not occur on
or before the ninetieth day following the Effective Time of the Merger, Alpharma
shall reasonably cooperate with the Company and the Depositary in adopting any
amendment to this Agreement that the Company and the Depositary may request. Any
amendment which shall impose any fees, taxes or charges (other than taxes and
other governmental charges, fees and telegram, telex or delivery expenses
payable by owners of Depositary Shares) shall not become effective as to
outstanding Depositary Receipts until the expiration of three months after
notice of such amendment shall have been given to the Record Holders of
outstanding Depositary Receipts. If any such amendment shall materially and
adversely alter the rights of holders of Depositary Receipts, it shall not
become effective as to outstanding Depositary Receipts until the Record Holders
of Depositary Receipts representing not less than a majority of the number of
Depositary Shares then outstanding shall have consented thereto in writing or by
voting therefor in person or by proxy at a meeting held on notice for such
purpose or any adjournment or adjournments thereof. Every holder of an
outstanding Depositary Receipt at the time any such amendment so becomes
effective shall be deemed, by continuing to hold such Depositary Receipt, to
consent and agree to such amendment and to be bound by this Depositary Agreement
as amended thereby. In addition, in no event shall any amendment obligate or
empower the Depositary to act as a trustee with respect to Depositary Shares or
cash held by it on behalf of the Record Holders of outstanding Depositary
Receipts or
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otherwise result in the Depositary being treated as other than the mere
custodian of the New Common Stock on behalf of such Record Holders.
SECTION 9.02 Termination. This Depositary Agreement shall be of no
further force and effect from and after the earliest of:
(i) September 30, 1999 if the Effective Time has not occurred
prior to or on such date;
(ii) the later of (A) 24 months after the Option Determination
Date and (B) the date on which all securities of the Company convertible
into Depositary Shares of the Company, and any rights, options or
warrants to acquire Depositary Shares outstanding on the Option
Determination Date cease to be convertible into or exercisable or
exchangeable for the Depositary Share Consideration; and
(iii) the date that no Depositary Receipts remain outstanding.
Upon the termination of this Depositary Agreement, the Company shall be
discharged from all obligations under this Depositary Agreement except for its
obligations to the Depositary, any Depositary's Agent and any Registrar under
Sections 8.07 and 8.08.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Counterparts. This Depositary Agreement may be executed in
any number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed an original, but all such counterparts taken together shall constitute
one and the same instrument. Copies of this Depositary Agreement shall be filed
with the Depositary and the Depositary's Agents and shall be open to inspection
during business hours at the Depositary's Corporate Trust Office and the
respective offices of the Depositary's Agents, if any, by any holder of a
Depositary Receipt.
SECTION 10.02 Exclusive Benefits of Parties. This Depositary Agreement
is for the exclusive benefit of the Depositary, Alpharma and the Company, and
their respective successors hereunder, and shall not be deemed to give any legal
or equitable right, remedy or claim to any other person whatsoever.
SECTION 10.03 Invalidity of Provisions. In case any one or more of the
provisions contained in this Depositary Agreement or in the Depositary Receipts
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should be or become invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein or therein shall in no wise be affected, prejudiced or disturbed thereby.
SECTION 10.04 Notices.
(a) 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.
0000 Xxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
Attention: President
with a copy to:
Alpharma USPD Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxx Xxx, Xxx Xxxxxx 00000
Attention: Chief Legal Officer
If to the Company, 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.
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If to the Depositary, to:
State Street Bank and Trust Company
c/o EquiServe, L.P.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
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.
(b) Any and all notices given to any Record Holder of a Depositary
Receipt hereunder or under the Depositary Receipts shall be in writing and shall
be deemed to have been duly given if personally delivered or sent by mail or by
telegram or telex confirmed by letter, addressed to such holder at the address
of such Record Holder as it appears on the books of the Registrar, or, if such
holder shall have filed with the Registrar a written request that notices
intended for such holder be mailed to some other address, at the address
designated in such request. Delivery of a notice sent by mail or by telegram or
telex shall be deemed to be effected at the time when a duly addressed letter
containing the same notice (or a confirmation thereof in the case of a telegram
or telex message) is deposited, postage prepaid, in a post-office letter box.
The Depositary or the Company may, however, act upon any telegram or telex
message received by it from any holder of a Depositary Receipt, notwithstanding
that such telegram or telex message shall not subsequently be confirmed by
letter as aforesaid.
SECTION 10.05 Depositary's Agents. The Depositary may from time to time
appoint Depositary's Agents (which may include the Company) for the purposes of
this Depositary Agreement and may at any time appoint additional Depositary's
Agents and vary or terminate the appointment of such Depositary's Agents;;
provided that no such Depositary Agent may hold the New Common Stock at any
time, other than EquiServe Limited Partnership, a Delaware limited partnership,
which may hold the New Common Stock as service agent for the Depositary. The
Depositary will notify the Company of any such action.
SECTION 10.06 Holders of Depositary Receipts are Parties. The holders of
Depositary Receipts from time to time shall be parties to this Depositary
Agreement and shall be bound by all of the terms and conditions hereof and of
the Depositary Receipts by acceptance thereof.
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90
SECTION 10.07 Governing Law. This Depositary Agreement and the
Depositary Receipts and all rights hereunder and thereunder and provisions
hereof and thereof shall be governed by and construed in accordance with the
laws of the State of Delaware, without giving effect to the principles of
conflicts of law thereof.
SECTION 10.08 Headings. The headings of articles and sections in this
Depositary Agreement and in the form of the Depositary Receipt set forth in
Exhibit A hereto have been inserted for convenience only and are not to be
regarded as a part of this Depositary Agreement or to have any bearing upon the
meaning or interpretation of any provision contained herein or in the Depositary
Receipts.
SECTION 10.09 Successors and Assigns. The provisions of this Depositary
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
Depositary Agreement without the consent of the other party hereto.
Notwithstanding the foregoing, (i) the Company may transfer the Call Option to
and assign, delegate or otherwise transfer all of its rights and obligations as
the holder of the Call Option under this Depositary Agreement to Alpharma in
accordance with Sections 5.2(n) and 7.2 of the Master Agreement, and (ii)
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 or its
rights and obligations under the Master Agreement to such transferee and (b)
such transferee agrees in writing to be bound by and subject to the provisions
of this Depositary Agreement and the Master Agreement.
[REMAINDER OF PAGE LEFT BLANK.]
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91
IN WITNESS WHEREOF, the parties hereto have duly executed this
Depositary Agreement as of the day and year first above set forth and all
holders of Depositary Receipts shall become parties hereto upon acceptance by
them of Depositary Receipts issued in accordance with the terms hereof.
Attest: ASCENT PEDIATRICS, INC.
/s/ Xxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxx
----------------------------- -------------------------------
Secretary Title: President
Attest: ALPHARMA USPD INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------- -------------------------------
Secretary Title: President
Attest: STATE STREET BANK AND TRUST
COMPANY
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
----------------------------- -------------------------------
Vice President Title: Vice President
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92
EXHIBIT A
FORM OF DEPOSITARY RECEIPT
------ DEPOSITARY RECEIPT ------
number FOR number
------ DEPOSITARY SHARES, ------
EACH REPRESENTING ONE SHARE OF COMMON STOCK,
$.00004 PAR VALUE PER SHARE,
OF
ASCENT PEDIATRICS, INC.
SUBJECT TO THE CALL OPTION EXERCISABLE PURSUANT TO
THE DEPOSITARY AGREEMENT,
SEE BELOW AND REVERSE.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFICATE IS TRANSFERABLE IN BOSTON, NEW YORK,
CHICAGO OR LOS ANGELES
SEE REVERSE FOR
CERTAIN DEFINITIONS
CUSIP
State Street Bank and Trust Company, a Massachusetts trust company, as
Depositary (the "Depositary"), hereby certifies that
is the registered owner of Depositary Shares
By Depositary and Registrar
Authorized Signature
93
Each Depositary Share ("Depositary Shares") represents one share (a
"Share") of Common Stock, $.00004 par value per share, (the "Common Stock") of
Ascent Pediatrics, Inc., a Delaware corporation (the "Company") (i) subject to
an option under the Depositary Agreement dated as of February 19, 1999 (the
"Depositary Agreement"), among the Company, Alpharma USPD, Inc., a Maryland
corporation ("Alpharma"), and the Depositary to purchase all shares of Common
Stock held by the Depositary at any time during the Call Period (as defined in
the Depositary Agreement) (the "Call Option") at the Option Exercise Price
determined in accordance with the Depository Agreement (the "Option Exercise
Price"), and (ii) deposited with the Depositary. Subject to the terms and
entitled to the benefits of the Depositary Agreement, each owner of a Depositary
Share is entitled proportionately to all the powers, preferences and rights and
the qualifications, limitations or restrictions of such preferences and/or
rights of the Common Stock represented thereby, including dividends and voting
rights as set forth in the Amended and Restated Certificate of Incorporation and
the By-Laws of the Company, as amended from time to time (copies of which are on
file with the Depositary). If the Call Option is exercised, the holders of
Depositary Shares will be entitled to receive the Option Exercise Price paid in
respect thereof. By accepting this Depositary Receipt, the holder hereof agrees
to be bound by all of the terms and conditions of the Depositary Agreement. This
Depositary Receipt shall not be valid or obligatory for any purpose or entitled
to any benefits under the Depositary Agreement unless it shall have been
executed by the Depositary by the manual signature of a duly authorized officer
or, if executed in facsimile by the Depositary, countersigned by a Registrar in
respect of the Depositary Receipts by the manual signature of a duly authorized
officer thereof.
The Company will furnish without charge to each holder of a Depositary
Receipt who so requests a copy of the Depositary Agreement, such request to be
addressed to the Depositary named on the face of this receipt.
The following receipt abbreviations, when used in the instructions on the
face of this receipt shall be construed as though they were written out in full
according to applicable laws or regulations
TEN COM - as tenants in common UNIF GIFT MIN ACT___________Custodian____________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_______________
in common (State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, ________ hereby sell(s), assign(s) and transfer(s) unto
--------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE. PLEASE INSERT
SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
-------------------------------------------------------------- Depositary Shares
represented by the within Depositary Receipt, and does (do) hereby irrevocably
constitute and appoint ________________________________________________ Attorney
--------------------------------------------------------------------------------
to transfer such Depositary Shares on the books of the within named Depositary,
with full power of substitution in the premises.
Dated __________________________
X __________________________________________
NOTICE: THE SIGNATURE APPEARING ABOVE TO
THIS ASSIGNMENT MUST CORRESPOND WITH THE
NAME AS WRITTEN UPON THE FACE OF THIS
DEPOSITARY RECEIPT IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY
CHANGE WHATEVER.
94
EXHIBIT C
CERTIFICATE OF MERGER
OF
BIRD MERGER CORPORATION
(A DELAWARE CORPORATION)
INTO
ASCENT PEDIATRICS, INC.
(A DELAWARE CORPORATION)
Ascent Pediatrics, Inc., a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware, does hereby
certify:
FIRST: That the name and state of incorporation of each of the
constituent corporations of the merger is as follows:
Name State of Incorporation
---- ----------------------
Ascent Pediatrics, Inc. Delaware
Bird Merger Corporation Delaware
SECOND: That an Agreement and Plan of Merger between the parties to the
merger has been approved, adopted, certified, executed and acknowledged by each
of the constituent corporations in accordance with the requirements of
Subsection (c) of Section 251 of the General Corporation Law of the State of
Delaware.
THIRD: That the name of the surviving corporation of the merger is Ascent
Pediatrics, Inc., a Delaware Corporation.
FOURTH: That the amendments or changes in the Restated Certificate of
Incorporation of Ascent Pediatrics, Inc., a Delaware corporation, which is the
surviving corporation, that are to be effected by the merger are as follows:
That the following Article FOURTEENTH be and hereby is inserted
immediately following Article THIRTEENTH of the Restated Certificate of
Incorporation of the surviving corporation:
95
"FOURTEENTH. The Board of Directors of the Corporation may discuss,
consider and take any actions relating to any of the following matters, without
the participation or consent of any Alpharma Director (as defined below), upon
the approval of a majority of the Non-Alpharma Directors (as defined below) of
the Corporation then in office:
(a) approve any amendment or waiver by the Corporation of the form of
Depositary Receipt (as defined in the Depositary Agreement dated
as of February 16, 1999 (the "Depositary Agreement") by and among
the Corporation, Alpharma USPD, Inc., a Delaware corporation
("Alpharma"), and State Street Bank and Trust Company) or any
provision of the Depositary Agreement pursuant to Section 9.01 of
the Depositary Agreement;
(b) consent to any waiver or exception to Section 6.1 of the Master
Agreement dated as of February 16, 1999 by and between the
Corporation, Alpharma and Alpharma, Inc., a Delaware corporation
("Parent"), (the "Master Agreement");
(c) exclude any Alpharma Director from access to any documents or
other materials provided to the other members of the Board of
Directors of the Corporation which relate to any matter with
respect to which the Corporation and Alpharma have a potential
conflict of interest if counsel to the Corporation advises the
Non-Alpharma Directors that such exclusion is appropriate given
such potential conflict of interest;
(d) approve any amendment or waiver by the Corporation of any
provision of the Master Agreement pursuant to Section 8.5(a)
thereof; or
(e) make any other determination under the terms of the Depositary
Agreement, the Master Agreement or the Loan Agreement dated as of
February 16, 1999 (the "Loan Agreement") by and among the
Corporation, Alpharma and Parent, or that otherwise relates to any
matter with respect to which the Corporation and Alpharma have a
potential conflict of interest if counsel to the Corporation has
advised the Corporation to such effect.
Any act or decision done or made by a majority of the Non-Alpharma Directors
pursuant to this Article FOURTEENTH shall be regarded as the act of the Board of
Directors of the Corporation. For purposes of this Article FOURTEENTH, (i) the
"Non-Alpharma Directors" shall mean all members of the Board of Directors of the
Corporation at any time in office, excluding any Alpharma Director then in
office, and (ii) the "Alpharma Director" shall mean the member of the Board of
Directors of the Corporation nominated by Alpharma and appointed to the Board of
Directors pursuant to Section 6.5 of the Loan Agreement and any successor to or
replacement
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96
of such director then in office who was elected to the Board of Directors upon
the nomination of Alpharma. This Article FOURTEENTH shall terminate and be of no
further force or effect from and after the Option Expiration Date (as defined in
the Depositary Agreement).
FIFTEENTH. The Board of Directors of the Corporation may not, without the
consent of the Alpharma Director then in office, authorize the issuance of any
securities of the Company convertible into any equity security of the Company
(including Depositary Shares (as defined in the Depositary Agreement)), or any
rights, options or warrants to acquire any equity security of the Company,
which, following the Option Closing (as defined in the Depositary Agreement)
(whether or not convertible, vested, exercisable or exchangeable on the Option
Closing Date (as defined in the Depositary Agreement)), are not convertible into
or exercisable or exchangeable solely for the cash that the holders thereof
would have received had they converted, exercised or exchanged such convertible
securities, rights, options and warrants for such equity security of the Company
immediately prior to the Option Closing Date. This Article FIFTEENTH shall
terminate and be of no further force or effect from and after the Option
Expiration Date."
FIFTH: That the executed Agreement and Plan of Merger is on file at the
principal place of business of the surviving corporation. The address of said
principal place of business is 000 Xxxxxxxxxxx Xxxxxx, Xxxxx X-000, Xxxxxxxxxx,
Xxxxxxxxxxxxx 00000.
SIXTH: That a copy of the Agreement and Plan of Merger will be furnished
by the surviving corporation upon request and without cost to any stockholder of
any constituent corporation.
SEVENTH: That this Certificate of Merger shall be effective upon filing.
IN WITNESS WHEREOF, Ascent Pediatrics, Inc. has caused this Certificate
to be executed by its Chief Executive Officer this _____ day of ___________,
1999.
ASCENT PEDIATRICS, INC.
(a Delaware corporation)
By: ___________________________
Xxxx X. Xxx
Chief Executive Officer
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