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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
ALPHARMA INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
Class A Common Stock, par value $.20 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
001629 10 4
- --------------------------------------------------------------------------------
(CUSIP Number)
Einar W. Sissener
c/o Alpharma Inc.
One Executive Drive
Fort Lee, New Jersey 07024
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
June 27, 1997
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [_]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filled
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 001629 10 4 PAGE 2 OF 47 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
A. L. Industrier AS
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
00, BK
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(D) OR 2(E) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Norway
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 9,500,000
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
-0-
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 9,500,000
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
-0-
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
9,500,000
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
40%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
<PAGE>
Page 3 of 47 Pages
Amendment No. 1 to Statement on Schedule 13D
--------------------------------------------
Pursuant to Rule 13d-2(a) of Regulation 13D-G of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended (the
"Act"), the undersigned hereby files this Amendment No. 1 to its Schedule 13D
Statement ("Schedule 13D") dated February 10, 1997 (the "Original Schedule 13D")
relating to the Common Stock of Alpharma Inc. (the "Issuer") to amend the
following Items and Schedules not expressly set forth below.
Item 2. Identity and Background.
-----------------------
(a) This Statement constitutes the Schedule 13D of A. L. Industrier
AS, a Norwegian corporation ("Industrier") with respect to 1,273,438 shares of
Class A Common Stock (the "Common Stock") of the Issuer which are issuable upon
conversion of 1,273,438 newly issued shares of Class B Common Stock of the
Issuer par value $.20 per share (the "Class B Stock") which Industrier acquired
from Issuer (the "New Class B Shares") on June 27, 1997. Until its name change
in 1994, Industrier's corporate name was Apothekernes Laboratorium A.S.
Certain information required by Item 2 concerning directors and executive
officers of Industrier is set forth on Schedule A hereto, which Schedule A is
incorporated herein by reference.
Mr. Einar W. Sissener ("Sissener") is Chairman of the Board of Industrier
and, together with a family controlled private holding company and certain
relatives, beneficially owns approximately 55% of Industrier's outstanding
shares entitled to vote and, accordingly, may be deemed a controlling person of
Industrier.
(b) The address of the principal business office of Industrier is
Harbitzalleen 3, 0275 Oslo, Norway.
(c) Industrier is a holding company which owns, in addition to its
interest in Issuer's shares, controlling and non-controlling interests in
corporations engaged, primarily in Norway and other European countries, in the
food industry, the medical diagnostic industry and other industries and owns
certain real estate interests in Norway.
(d) During the past five years, neither Industrier or to the knowledge
of Industrier any of the executive officers or directors of Industrier, has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the past five years, neither Industrier, or to the knowledge
of Industrier any of the executive officers or directors of Industrier, has been
a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which such person was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) Industrier is a corporation organized and existing under the laws
of Norway and, to its knowledge, each of its executive officers and directors is
a citizen of Norway.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
Funds to acquire the shares of Class B Common Stock to be purchased
pursuant to the Amended Stock Subscription Agreement were obtained from a
borrowing from Den norske Bank ASA ("Den norske"). Industrier entered into a
Loan Facility Agreement with Den norske, dated as of June 19, 1997 (the "Loan
Agreement") pursuant to which Industrier may borrow up to NOK 200,000,000 to
finance (a) its foreign currency loans and (b) the purchase of the Class B
Common Stock. The term of the loan is 59 months and the loan facility may be
utilized on a revolving credit basis, with a maximum of eight (8) drawings to be
outstanding at any time.
<PAGE>
Page 4 of 47 Pages
Industrier pledged 2,000,000 shares of Class B Stock (the "Pledged
Shares") to Den norske as security for the loan, pursuant to the Securities
Pledge Agreement between Den norske and Wangs Fabrik AS, a wholly-owned
subsidiary of Industrier ("Wangs"), dated as of June 27, 1997 (the "Securities
Pledge Agreement"). The Securities Pledge Agreement provides that Wangs, as
pledgor, will retain all dividend rights and all voting rights to the Pledged
Shares for so long as no Event of Default (as defined in the Loan Agreement) has
occurred. If an Event of Default occurs, Den norske shall have the right to
receive dividends, exercise voting rights and, subject to certain limitations
set forth in the Securities Pledge Agreement, transfer the Pledged Shares.
Item 4. Purpose of Transaction
----------------------
Industrier owns beneficially 9,500,000 shares of Class B Common Stock of
Issuer, including 8,226,562 shares which it acquired in 1983 in exchange for its
ownership of all the capital stock of the Issuer's predecessor. The exchange was
pursuant to a recapitalization transaction that preceded the initial public
offering of Issuer's Common Stock in 1984. The Class B Common Stock entitles the
holders thereof, as a class, to elect a majority of the directors of Issuer and
is convertible, on a share for share basis, into Common Stock. Industrier owns
all of the outstanding shares of Issuer's Class B Common Stock and accordingly
has been a controlling person of Issuer since 1983. Prior to the filing of this
Schedule 13D, Industrier had reported its beneficial ownership of Common Stock
(which may be acquired upon conversion of its Class B Common Stock of Issuer) on
Schedule 13G. In 1994 Sissener and other shareholders of Industrier received
certain warrants to purchase shares of Common Stock in a transaction between
Issuer and Industrier. See Item 5 below.
On February 10, 1997, Industrier and Issuer entered into the Stock
Subscription Agreement under which Industrier agreed to purchase from Issuer
1,273,438 newly-issued shares of Class B Common Stock at a price of $16.34 per
share (total consideration: $20,807,976.92). Industrier and Issuer entered into
Amendment No. 1 to the Stock Subscription Agreement on June 27, 1997 (such
agreement as amended the "Amended Stock Subscription Agreement"), to provide for
the consummation of such purchase on or before June 27, 1997, a date earlier
than that originally contemplated by the Stock Subscription Agreement. The
purchase was closed on June 27, 1997. The Amended Stock Subscription Agreement
also provides for a payment to be made by the Issuer to Industrier in
consideration for Industrier's agreement to purchase the Class B Common Stock
earlier than required by the original Stock Subscription Agreement. The amount
of such payment is expected to be approximately $450,000 or less as determined
by the Amended Stock Subscription Agreement and will be made on or about
November 30, 1997.
The purposes of the transaction contemplated by the Amended Stock
Subscription Agreement are to increase Industrier's investment in Issuer and to
provide Issuer with additional equity capital. The acquisition of additional
shares of Class B Common Stock will not increase or otherwise affect
Industrier's position as a controlling person of Issuer because it previously
owned (and has no present intention to dispose of) all outstanding shares of
Issuer's Class B Common Stock. As set forth in the Amended Stock Subscription
Agreement, the Issuer intends, subject to registration under the Securities Act
of 1933, to effect a distribution of special rights to the holders of the Common
Stock. Each holder of Common Stock will receive one-sixth of one such special
right for each share of Common Stock held of record on the record date specified
in the Prospectus relating to such rights. Each right will entitle the holder
thereof to acquire one of a share of Common Stock at an exercise price of $16.34
per share. The expiration date of the special rights has not yet been
determined, but is expected to be a date no later than November 30, 1997. The
Rights are expected to be issued in August or September 1997.
Except for the special rights distribution referred to above and subject
to such actions as may be taken by the Issuer's Board of Directors in the normal
course of carrying out is responsibilities, Industrier has no present plan or
proposal which relates to or would result in the acquisition or disposition by
any person of securities of Issuer, any extraordinary corporate transaction or
sale of material assets of Issuer, any change in the board of directors (except
as may occur at the next annual meeting of Issuer), any material change in the
Issuer's capitalization, dividend policy, business or corporate structure, any
change in Issuer's charter, bylaws
<PAGE>
Page 5 of 47 Pages
or other instruments which may impede an acquisition of control of Issuer,
causing any class of Issuer's securities to be delisted or to become eligible
for termination of registration under Section 12(g)(4) of the Securities
Exchange Act of 1934 or any similar action.
Nothing herein is intended to limit Industrier's right and ability to
suggest to Issuer a plan or proposal for any such action in the future and to
exercise its voting rights in its discretion as holder of the Class B Common
Stock of Issuer to elect a majority of the Issuer's directors.
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a) Based on Industrier's beneficial ownership of 9,500,000 shares of
Class B Common Stock (including the 1,273,438 shares acquired under the Amended
Stock Subscription Agreement), Industrier beneficially owns 9,500,000 shares of
Common Stock which it may acquire upon conversion, on a share-for-share basis,
of the Class B Common Stock. Such beneficial ownership of Common Stock
constitutes approximately 40% of the outstanding Common Stock (assuming
conversion of such Class B Common Stock and the issuance of no shares of Common
Stock pursuant to the special rights offering described in item 4 above).
Sissener beneficially owns certain Warrants to purchase an aggregate of
1,383,004 shares of Common Stock, of which 233,250 Warrants (owned by a family
trust and by Sissener's wife) are currently exercisable and the balance become
exercisable on October 3, 1997. The Warrants have an exercise price of $21.945
(subject to antidilution adjustment upon the occurrence of certain events,
including the special rights distribution described in Item 4 above) and expire,
if not previously exercised, on January 3, 1999.
(b) The shares of Issuer beneficially owned by Industrier is held of
record by Wangs. However, Industrier possesses sole power to direct voting and
disposition of such shares. Sissener possesses sole power of disposition as to
the Warrants beneficially owned by him.
(c) Industrier has effected no transactions in the Issuer's Common
Stock during the past sixty days except the execution of Amendment No. 1 to the
Stock Subscription Agreement on June 27, 1997 and the closing of the purchase of
such shares pursuant thereto.
(d) Except as set forth in the Securities Pledge Agreement described in
Item 3, no person other than Industrier has any right to receive or direct the
receipt of dividends from, or the proceeds from any sale of, the shares of Class
B Common Stock beneficially owned by Industrier or the Common Stock issuance
upon conversion thereof.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
-------------------------------------------------------------
Respect to Securities of the Issuer.
-----------------------------------
Industrier is not a party to or otherwise subject to any contract,
arrangement, understanding or relationship with any person relating to any
securities of the Issuer, except:
(i) The Stock Subscription Agreement described in item 4 above and
filed as Exhibit I to the Original Schedule 13D (which contains provisions for
Issuer to provide certain registration rights to Industrier);
(ii) Amendment No. 1 to the Stock Subscription Agreement described
in item 4 above and filed as Exhibit I hereto (which provides that Industrier
purchase Issuer's Class B Common Stock on or before June 27, 1997 and provides
for a payment to be made by Issuer to Industrier in consideration therefor).
<PAGE>
Page 6 of 47 Pages
(iii) A Control Agreement dated February 7, 1986, as amended from
time to time (the "Control Agreement"), (filed as Exhibit III to the Original
Schedule 13D) which prohibits Industrier from selling or otherwise transferring
any shares of Issuer's Class B Common Stock prior to November 1, 1999 without
the prior approval of Issuer's Board of Directors, except that up to 50% such
shares may be pledged pursuant to normal financing arrangements;
(iv) A Warrant Agreement dated October 3, 1994, between Issuer and
The First National Bank of Boston (filed as Exhibit V to the Original Schedule
13D) which sets forth the provisions of the Warrants to purchase shares of
Common Stock beneficially owned by Sissener; and
(v) The Securities Pledge Agreement described in Item 3 above and
filed as Exhibit II hereto (which provides for a pledge of 2,000,000 shares of
Issuer's Class B Stock by Wangs as security for borrowings to be made to finance
the acquisition of shares by Industrier). See Item 3 above.
(vi) The Loan Agreement described in Item 3 above and filed as
Exhibit III hereto (which provides for a loan to be made by Den norske to
Industrier). See Item 3 above.
The provisions of the exhibits referred to in this Item 6 are herein
incorporated by reference.
Item 7. Materials to be Filed as Exhibits.
---------------------------------
Exhibit I -- Amendment No. 1 to the Stock Subscription Agreement
dated June 27, 1997 (described in item 4).
Exhibit II -- Securities Pledge Agreement dated June 27, 1997
(described in Item 3).
Exhibit III -- Loan Agreement dated June 19, 1997 (described in
Item 3).
<PAGE>
Page 7 of 47 Pages
Signature
---------
After reasonable inquiry and to the best of the undersigned's
knowledge and belief, the undersigned certifies that the information set forth
in this Statement is true, complete and correct.
Dated: July 2, 1997
A. L. Industrier AS
By: /s/ Glen E. Hess
------------------------
Name: Glen E. Hess
Title: Attorney-in-Fact
As authorized attorney-in-fact
<PAGE>
Page 8 of 47 Pages
EXHIBIT INDEX
TO
AMENDMENT NO. 1
---------------
Exhibit No. Exhibit Name Page No.
----------- ------------ --------
Exhibit I - Amendment No. 1 to the Stock Subscription
Agreement dated June 27, 1997 (described in
item 4). 9
Exhibit II - Securities Pledge Agreement dated June 27,
1997 (described in Item 3). 12
Exhibit III - Loan Agreement dated June 19, 1997
(described in Item 3). 28
<PAGE>
Page 9 of 47 Pages
EXHIBIT I
---------
AMENDMENT NO. 1 TO STOCK
SUBSCRIPTION AND PURCHASE AGREEMENT
This Amendment No. 1 (this "Amendment") to the Subscription and
---------
Purchase Agreement dated as of February 10, 1997, (the "Subscription Agreement")
----------------------
by and between Alpharma Inc., a Delaware corporation ("Alpharma") and A.L.
--------
Industrier AS, a Norwegian corporation ("Industrier") is made by and between
----------
Alpharma and Industrier this 27th day of June, 1997. Capitalized terms used but
not otherwise defined herein have the respective meanings accorded such terms in
the Subscription Agreement.
WHEREAS, Alpharma and Industrier wish to amend the Subscription
Agreement to provide for the purchase of the New B Shares by Industrier on June
27, 1997, rather than on the date which the Rights expire (the "Date Change")
-----------
and to make conforming changes to the Subscription Agreement to provide for such
Date Change;
WHEREAS, in connection with the Date Change and in consideration for
Industrier's agreement hereby to effectuate the Date Change, Alpharma shall make
a compensating payment to Industrier;
NOW THEREFORE, in consideration of the premises and the good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
8. The first sentence of Section 2 of the Subscription Agreement is
hereby deleted and replaced in its entirety by:
"Industrier shall pay the Subscription Consideration by wire
transfer in United States funds on or before June 27, 1997 (the
"Payment Date") to Alpharma's account at such bank as Alpharma may
------------
designate."
9. Section 3b of the Subscription Agreement is hereby deleted and
replaced in its entirety by:
"b. The obligation of Alpharma to issue the New B Shares as
herein provided is subject only to the condition (which may be
waived by Alpharma) that the issuance of the New B Shares shall
have complied in all material respects with the Bylaws and
Certificate of Incorporation, as amended, of Alpharma, the
Delaware General Corporation Law and United States securities
laws. Alpharma will use its reasonable best efforts to cause the
condition in this paragraph b. to be fulfilled."
10. Section 5 of the Subscription Agreement is hereby deleted and
replaced in its entirety by:
"5. Rights Issuance. Industrier acknowledges that Alpharma
---------------
intends to distribute to the holders of its outstanding Class A
Stock certain transferable Rights entitling such holders to
purchase shares of Class A Stock at $16.34 per share on or before
November 30, 1997. Each such holder will receive the right to
purchase approximately .16 share of Class A Stock for each share
of Class A Stock held by such holder on the record date for such
distribution. The Rights and the Class A Stock issuable on
exercise thereof
<PAGE>
Page 10 of 47 Pages
are required to be registered under the Securities Act of 1933 and
may be listed for trading on the New York Stock Exchange or traded
over the counter. Alpharma intends to take such actions as are
appropriate to effect such registration, listing or trading and
may make such changes in the terms of the Rights as the Board of
Directors determines are appropriate to effect such registration,
listing or trading, comply with applicable law and otherwise carry
out the intent and purpose of such Rights distribution. Industrier
agrees to the issuance of such Rights and hereby waives any right
to receive Rights or any similar right to purchase Common Stock of
the Company which it may have under Alpharma's Certificate of
Incorporation as a result of the Rights distribution provided for
herein."
11. The following is hereby inserted as Section 6 to the Subscription
Agreement:
"6. Early Payment Amount. Subject to the adjustment set
--------------------
forth herein, Alpharma shall pay to Industrier on the earlier of
(a) November 30, 1997 or (b) the date that the Rights expire (the
"Reimbursement Date"), the amount of $447,977 (the "Early Payment
------------------ -------------
Amount"). The Early Payment Amount shall be increased by $3,950
------
for each day, if any, that the Payment Date precedes June 27,
1997. The Early Payment Amount shall be (i) decreased by $3,950
for each day, if any, that the Reimbursement Date precedes
November 30, 1997. (For example, if the Payment Date is June 25,
1997 and the Reimbursement Date is November 25, 1997, the Early
Payment Amount shall be $447,977 + (2 days x $3,950) - (5 days x
$3,950) = $447,977 + $7,900 - $19,750 = $436,127); and (ii)
increased by $3,950 for each day, if any, that the Reimbursement
Date follows November 30, 1 997.
12. The following section references are hereby deleted and replaced
as follows:
(a) The section heading "6" is hereby deleted and replaced
by the heading "7."
(b) The section heading "7" is hereby deleted and replaced
by the heading "8."
(c) The section heading "8" is hereby deleted and replaced
by the heading "9."
Except as expressly set forth herein, no change is made hereby to the
terms and provisions of the Subscription Agreement and as amended hereby the
Subscription Agreement shall remain in full force and effect.
* * * * *
<PAGE>
Page 11 of 47 Pages
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the date first written above.
ALPHARMA INC.
By: /s/ Jeffrey E. Smith
-----------------------
Its: V.P. Finance and CFO
-----------------------
A.L. INDUSTRIER AS
By: /s/ Roald Jotun
-----------------------
Its: Administrative Director
-----------------------
By: /s/ Sverre Bjertnes
-----------------------
Its: V.P. of Finance
-----------------------
<PAGE>
Page 12 of 47 Pages
Securities Pledge Agreement
---------------------------
This PLEDGE AGREEMENT, dated June 27, 1997 (the "Agreement"), is made and
entered into by and between Wangs Fabrik AS, a corporation organized and
existing under the laws of the Kingdom of Norway (the "Pledgor"), and Den norske
Bank ASA, a banking corporation organized and existing under the laws of the
Kingdom of Norway (the "Secured Party").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, AL Industrier, a corporation organized and existing under the laws
of the Kingdom of Norway (the "Borrower") has entered into the Loan Facility
Agreement, dated June 19, 1997 (the "Loan Agreement"), with the Secured Party;
WHEREAS, all capitalized terms used herein and not defined herein shall
have the respective meanings accorded to them in the Loan Agreement;
WHEREAS, the Pledgor is a wholly owned subsidiary of the Borrower and, in
order to induce the Secured Party to enter into the Loan Agreement, desires to
enter into this Agreement and to pledge the Pledged Shares (as such term is
hereinafter defined) in order to secure the Obligations (as such term is
hereinafter defined); and
WHEREAS, pursuant to Clause 7.3(b) of the Loan Agreement, the Borrower has
agreed to cause the Pledgor to grant to the Secured Party a first priority
pledge of, in and over the securities identified in Exhibit 1 to this Agreement
(all such securities are collectively hereinafter referred to as the "Pledged
Shares") in order to secure the obligations of the Borrower under the Loan
Agreement;
NOW THEREFORE, in consideration of the premises and in order to induce the
Secured Party to extend the Loan to the Borrower, the Secured Party and the
Pledgor hereby agree as follows:
SECTION 1. Pledge. The Pledgor hereby pledges, assigns, hypothecates,
------
transfers and delivers to the Secured Party, and grants to the Secured Party a
security interest in, the Pledged Shares, and in any certificates which evidence
such Pledged Shares, and, except as expressly set forth in Section 3(c) of this
Agreement, in all proceeds thereof and therefrom (collectively, the "Pledged
Collateral").
<PAGE>
Page 13 of 47 Pages
SECTION 2. Security for Obligations. This Agreement secures the payment
------------------------
and performance of all obligations of the Borrower now or hereafter existing
under the Loan Agreement, whether for principal, interest, fees, expenses or
otherwise, and all obligations of the Pledgor now or hereafter existing under
this Agreement (all such obligations of the Pledgor and Borrower are
collectively referred to in this Agreement as the "Obligations").
SECTION 3. Delivery of Pledged Collateral.
------------------------------
(a) Certificated Shares. All certificates or instruments which represent
-------------------
or evidence the Pledged Shares shall, simultaneously with the execution and
delivery of this Agreement by the Pledgor, be delivered by the Pledgor to, and
be held by or on behalf of, the Secured Party pursuant hereto, and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Secured Party. The Secured Party shall have the right to
register in the name of the Secured Party as pledgee hereunder any or all of the
Pledged Collateral.
(b) Notice to Alpharma Inc. Pledgor shall, upon execution and delivery of
----------------------
this Agreement, notify the issuer of the Pledged Shares, Alpharma Inc., a
Delaware corporation ("Alpharma"), in writing of its pledge of the Pledged
Shares and request in writing that Alpharma take all such action, if any, as may
be necessary or required under the laws of the State of Delaware to give full
and complete legal force, effect and recognition to the creation and perfection
of the pledge of the Pledged Shares contemplated under this Agreement.
(c) While the Pledged Shares are in possession of the Secured Party and
unless and until an Event of Default shall have occurred, the Pledgor shall
retain ownership of and each and all of the voting rights, dividend rights,
liquidation rights and other rights of the Pledged Shares subject to the lien
and security interest granted to the Secured Party.
SECTION 4. Representations, Warranties and Covenants of the Pledgor. The
--------------------------------------------------------
Pledgor represents and warrants, and so long as this Agreement is in effect
shall be deemed continuously to represent and warrant, that (a) it is the legal
record and beneficial owner of, and has good and (subject to applicable
securities laws) marketable title to, the Pledged Shares, subject to no lien or
encumbrance whatsoever, except the lien created by this Agreement; (b) it has
full power, authority and legal right to pledge all the Pledged Shares pursuant
to this Agreement; (c) this Agreement has been duly authorized, executed and
delivered by the Pledgor and constitutes a legal, valid and binding obligation
of the Pledgor enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting enforcement of creditors' rights generally and except
2
<PAGE>
Page 14 of 47 Pages
as enforcement thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law); (d) no
consent of any other person (including, without limitation, stockholders or
creditors of the Pledgor), and no consent, license, permit, approval or
authorization of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority, domestic or foreign, is required
to be obtained by the Pledgor in connection with the execution, delivery and
performance of this Agreement, other than those that have been obtained prior to
the date hereof and other than filings for disclosure purposes pursuant to the
Securities and Exchange Act of 1934; (e) the execution, delivery and performance
of this Agreement will not violate any provisions of any applicable law or
regulation or of any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, or of the certificate
of incorporation or by-laws of Alpharma or of the Pledgor, or of any securities
issued by the Pledgor, or of any mortgage, indenture, lease, contract, or other
agreement, instrument or undertaking to which the Pledgor is a party, or which
purports to be binding upon the Pledgor or upon any of its assets, and will not
result in the creation or imposition of any lien or other encumbrance on any of
the assets of the Pledgor except as contemplated by this Agreement; (f) all of
the Pledged Shares have been duly and validly issued, are fully paid and non-
assessable; (g) neither the use of proceeds received by the Borrower under the
Loan Agreement, nor the pledge of the Pledged Shares under this Agreement,
violates Regulation G, T, U or X of the Board of Governors of the United States
Federal Reserve System as now or from time to time hereafter in effect; (h) the
pledge of the Pledged Shares and the perfection of such pledge, as contemplated
in Section 3 of this Agreement, creates a legal, valid and enforceable lien on,
and a first perfected security interest in, the Pledged Shares and the proceeds
thereof and therefrom, subject to no prior lien or other encumbrance, or to any
agreement purporting to grant to any third party a lien or other encumbrance on
the property or assets of the Pledgor which would include the Pledged Shares;
(i) pursuant to the provisions of Section 8.c. of the Stock Subscription and
Purchase Agreement, dated February 10, 1997, by and between Borrower and
Alpharma (the "Stock Purchase Agreement"), Borrower has assigned all of its
rights and interests under the Stock Purchase Agreement to the Pledgor in order
lawfully to permit the Pledgor to enter into this Agreement and to pledge the
Pledged Shares to the Secured Party hereunder; and (j) neither the Pledgor nor
the Borrower is an "investment company" as such term is defined in Section 3 of
the Investment Company Act of 1940. The Pledgor covenants and agrees that it
will (i) defend the Secured Party's right, title and security interest in and to
the Pledged Collateral against the claims and demands of all entities, and (ii)
have like title to and right to pledge any other property at any time hereafter
pledged to the Secured Party
3
<PAGE>
Page 15 of 47 Pages
as Pledged Collateral hereunder, and will likewise defend the Secured Party's
right thereto and security interest therein.
SECTION 5. Further Assurances. The Pledgor agrees that at any time and
------------------
from time to time, at its expense it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Secured Party may reasonably request, in
order to perfect and protect the security interest intended to be granted
hereby, and to enable the Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any of the Pledged Collateral.
SECTION 6. Voting Rights. Upon the occurrence and during the continuance
-------------
of an Event of Default, all rights of Pledgor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise shall cease,
and all such rights shall thereupon become vested in the Secured Party, which
shall thereupon have the sole right to exercise such voting and other consensual
rights.
SECTION 7. Stock Dividends and Distributions. If, while this Agreement is
---------------------------------
in effect, the Pledgor shall become entitled to receive or shall receive any
additional securities representing a stock dividend upon (or a distribution in
connection with any reclassification or increase or reduction of capital by, or
issued in connection with any reorganization of, Alpharma), or in addition to,
in substitution of, or in exchange for, any Pledged Shares, or otherwise, the
Pledgor agrees to accept the same and to hold the same in trust on behalf of and
for the benefit of the Secured Party and to pledge the same forthwith to the
Secured Party in accordance with the terms and provisions of this Agreement, as
additional Collateral to secure the Obligations. Any sums paid upon or in
respect of the Pledged Shares upon the liquidation or dissolution of Alpharma
thereof shall similarly be paid over to the Secured Party to be held by it as
additional Collateral for the Obligations.
SECTION 8. Transfers and Other Liens. The Pledgor agrees that it will not
-------------------------
(i) sell or otherwise dispose of, or grant any option or warrant with respect
to, any of the Pledged Collateral or enter into any agreement to do any of the
foregoing, or (ii) create or permit to exist any lien or other encumbrance upon
or with respect to any of the Pledged Collateral, except for liens or other
encumbrances in favor of the Secured Party.
SECTION 9. Secured Party Appointed Attorney-in-Fact. The Pledgor hereby
----------------------------------------
appoints the Secured Party attorney-in-fact, with full authority in the place
and stead of Pledgor and in the name of Pledgor or otherwise, from time to time
in the Secured Party's discretion, to take any action and to execute any
4
<PAGE>
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instrument which the Secured Party may deem necessary or advisable to accomplish
any of the purposes expressly set forth in this Agreement, including, without
limitation, if and only if an Event of Default has occurred and is continuing,
to receive, endorse and collect all instruments made payable to Pledgor
representing any dividend, interest payment or other distribution in respect of
the Pledged Collateral or any part thereof and to give full discharge for the
same.
SECTION 10. Secured Party May Perform. If Pledgor fails to perform any
-------------------------
agreement contained herein, the Secured Party may itself perform, or cause the
performance of, such agreement, and the expenses of the Secured Party incurred
in connection therewith shall be payable by Pledgor under Section 17 of this
Agreement.
SECTION 11. Reasonable Care. The Secured Party shall be deemed to have
---------------
exercised reasonable care in the custody and preservation of any Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Secured Party accords its own property, it
being understood that the Secured Party shall not have any responsibility for
(i) ascertaining or taking action with respect to conversions, exchanges, tender
offers or other matters relative to any of the Pledged Collateral, whether or
not the Secured Party has or is deemed to have knowledge of such matters, or
(ii) taking any necessary steps to preserve rights against any entity with
respect to any of the Pledged Collateral.
SECTION 12. Remedies upon Default. (a) Upon the occurrence and during the
---------------------
continuance of any Event of Default under the Loan Agreement, the Secured Party
without demand of performance or other demand, advertisement or notice of any
kind (except the notice specified below of time and place of public or private
sale) to or upon the Pledgor or any other entity (all and each of which demands,
advertisements and notices are hereby expressly waived by the Pledgor), may (i)
forthwith collect, receive, appropriate and realize upon the Pledged Collateral,
or any part thereof, and (ii) if an Event of Default is continuing after
expiration of all applicable grace and cure periods under the Loan Agreement
(the "Default Cure Period") forthwith sell, assign, give option or options to
purchase, contract to sell or otherwise dispose of and deliver (each, a
"Transfer") the Pledged Collateral, or any part thereof, in one or more parcels
at public or private sale or sales, at any exchange, broker's board or at the
Secured Party's offices or elsewhere, (A) upon such terms and conditions as the
Secured Party may deem advisable, (B) at such prices as the Secured Party may
deem best, but not less than eighty percent (80%) of the then current market
price of the Class A shares of common stock of Alpharma, Inc., (C) for cash or
on credit or for future delivery without assumption of any credit risk, (D) with
the right to the Secured Party upon any such sale
5
<PAGE>
Page 17 of 47 Pages
or sales, public or private, to purchase the whole or any part of the Pledged
Collateral so sold, free of any right or equity of redemption in the Pledgor,
which right or equity is hereby expressly waived and released by the Pledgor,
and (E) provided that prior to any such Transfer, the Secured Party shall give
written notice thereof to the Board of Directors of the Issuer.
(b) The Secured Party hereby acknowledges that the Pledgor is a "control
person" (as such term is defined in Rule 405 of the Securities Act of 1933, as
amended (the "Securities Act")) of Alpharma Inc., a Delaware corporation and
issuer of the Pledged Shares (the "Issuer"). As such, the Secured Party
acknowledges that any Transfer of such Pledged Shares by the Secured Party might
require registration under the Securities Act of 1933. In any event, the
Secured Party hereby covenants that it shall not make any Transfer of the
Pledged Securities in a manner which conflicts with the Securities Act.
(c) The Secured Party shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all costs
and expenses of every kind incurred therein or incidental to the care,
safekeeping or otherwise of any and all of the Pledged Collateral or in any way
related to the rights of the Secured Party hereunder, including reasonable
attorneys' fees and legal expenses, to the payment in whole or in part, of the
Obligations, in such order as the Secured Party may elect, and only after so
paying over such net proceeds and after the payment by the Secured Party of any
other amount required by any provision of law, need the Secured Party account
for the surplus, if any, to the Pledgor. After the Default Cure Period has
lapsed and the Secured Party intends to exercise its remedy under Section
12(a)(ii) hereof, the Pledgor agrees that the Secured Party need not give more
than five days notice of the time and place of any public sale, or of the time
after which a private sale or other intended disposition is to take place, and
that such notice is reasonable notification of such matters. No notification
need be given to the Pledgor if it has signed after default a statement
renouncing or modifying any right to notification of sale or other intended
disposition. In addition to the rights and remedies granted to it in this
Agreement and in any other instrument or agreement securing, evidencing or
related to any of the Obligations, the Secured Party shall have all the rights
and remedies of a secured party under applicable law. The Pledgor shall remain
liable for any deficiency if the proceeds of any sale or other disposition of
the Pledged Collateral are insufficient to pay all the Obligations and all other
amounts to which the Secured Party is entitled, and shall also be liable for the
fees of any attorneys employed by the Secured Party to collect such deficiency.
(d) Instead of exercising the power of sale provided in Section 12(a)(ii)
hereof, the Secured Party may proceed by a suit or suits at law or in equity to
foreclose the pledge under this Agreement and sell the Pledged Collateral or any
portion
6
<PAGE>
Page 18 of 47 Pages
thereof under a judgment or decree of a court or courts of competent
jurisdiction.
(e) The Secured Party, as attorney-in-fact pursuant to Section 9 hereof
may, in the name and stead of the Pledgor, make and execute all conveyances,
assignments and transfers of the Pledged Collateral sold pursuant to Section
12(a) hereof or Section 12(b) hereof, and the Pledgor hereby ratifies and
confirms all that the Secured Party, as said attorney-in-fact, shall so do by
virtue hereof. Nevertheless, the Pledgor shall, if so requested by the Secured
Party, ratify and confirm any sale or sales by executing and delivering to the
Secured Party, or to any purchaser or purchasers of the Pledged Collateral, all
such instruments as may, in the judgment of the Secured Party, be advisable for
the purpose.
(f) The receipt of the Secured Party for the purchase money paid at any
such sale made by it shall be a sufficient discharge therefor to any purchaser
of the Pledged Collateral, or any portion thereof, sold as aforesaid; and no
such purchaser (or the representatives or assigns of such purchaser), after
paying such purchase money and receiving such receipt, shall be bound to see to
the application of such purchase money or any part thereof, or in any manner
whatsoever be answerable for any loss, misapplication or nonapplication of any
such purchase money, or any part thereof, or be bound to inquire as to the
authorization, necessity, expediency or regularity of any such sale.
(g) No sale or other disposition of all or any part of the Pledged
Collateral by the Secured Party pursuant to this Agreement shall be deemed to
relieve the Pledgor or the Borrower of its obligations in respect of any
Obligations except to the extent the proceeds thereof are applied by the Secured
Party to the payment of such Obligations.
SECTION 13. Secured Party's Right of Set-off. Pledgor recognizes and
--------------------------------
agrees that with respect to any time or other deposit, certificate of deposit or
any other balance of account standing to the credit of Pledgor on the books of
the Secured Party wherever located, the Secured Party has a right of set-off to
the full extent permitted by law. Pledgor further agrees that the Secured Party
may exercise such right of set-off at any time when an Event of Default under
the Loan Agreement shall occur, regardless of the stated maturity of any time
deposit or other such credit balance.
SECTION 14. Registration Rights. (a) If the Secured Party shall determine
-------------------
to exercise its right to sell all or any of the Pledged Collateral pursuant to
Section 12(a)(ii) of this Agreement, Pledgor agrees that, upon request of the
Secured Party, Pledgor will, at its own expense, use its best efforts to cause
Alpharma to:
(i) execute and deliver all such instruments and documents, and do or
cause to be done all such other acts
7
<PAGE>
Page 19 of 47 Pages
and things, as may be necessary or, in the opinion of the Secured Party,
advisable to register such Pledged Collateral under the provisions of the
United States Securities Act of 1933, as amended, and any rules or
regulations promulgated thereunder (the "Securities Act"), and to cause the
registration statement related thereto to become effective and to remain
effective for such period as prospectuses are required by law to be
furnished, and to make all amendments and supplements thereto and to the
related prospectus which, in the opinion of the Secured Party, are necessary
or advisable, all in conformity with the requirements of the Securities Act;
(ii) use its best efforts to qualify the Pledged Collateral under
the state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Pledged Collateral, as requested
by the Secured Party;
(iii) to make available to security holders, as soon as
practicable, an earnings statement which will satisfy the provisions of
Section 11(a) of the Securities Act; and
(iv) do or cause to be done all such other acts and things as may
be necessary to make such sale of the Pledged Collateral or any part thereof
valid and binding and in compliance with applicable law.
(b) Pledgor agrees to indemnify, pay and hold the Secured Party and each
underwriter (within the meaning of Section 2(11) of the Securities Act) and the
officers, directors, employees and agents of the Secured Party and each
underwriter and each Person controlling (within the meaning of the Securities
Act) the Secured Party or any underwriter (collectively called the
"Indemnitees") harmless from and against, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitee shall be designated a party thereto),
which may be imposed on, incurred by, or asserted against such Indemnitee, in
any manner related to or arising out of any actual or alleged untrue statement
of any material fact contained in any such registration statement or
qualification statement or any similar document, or any part thereof or
amendment or supplement thereto, or any actual or alleged omission to state any
material fact required to be stated in any such registration statement,
qualification statement or any similar document, or any part thereof or
amendment or supplement thereto, or necessary to make the statements contained
therein
8
<PAGE>
Page 20 of 47 Pages
not misleading (the "Indemnified Liabilities"); provided that Pledgor shall have
no obligation to an Indemnitee hereunder with respect to Indemnified Liabilities
on account of any actual or alleged untrue statement contained in, or any actual
or alleged omission from, any information furnished in writing to Pledgor by
such person specifically for use in such registration statement, qualification
statement, or similar document. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, Pledgor shall
contribute the maximum portion which it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by the Indemnitees or any of them. All obligations provided for in
this paragraph of Section 14 shall survive the repayment of the Loan, the
termination of this Agreement and the Loan Agreement, and the discharge or
repayment of the Obligations. Pledgor further acknowledges the impossibility of
ascertaining the amount of damages which would be suffered by the Secured Party
by reason of the failure by Pledgor to perform any of the covenants contained in
this Section and, consequently, agrees that, if Pledgor shall fail to perform
any of such covenants, it shall pay, as liquidated damages and not as a penalty,
an amount equal to the lesser of (i) the value of the Pledged Collateral on the
date the Secured Party shall demand compliance with this Section less the
proceeds of the sale of any of the Pledged Collateral pursuant to this Section
14, or (ii) the Obligations. Upon such payment, the Secured Party will deliver
to Pledgor any part of the Pledged Collateral with respect to which such payment
is made.
(c) In order further to provide the Secured Party with the rights to which
it is entitled under Section 14(a) of this Agreement, subject to the
restrictions contained therein and in Section 12(a)(ii) hereof, Pledgor hereby
assigns to the Secured Party the Registration Rights of the Borrower and Pledgor
under Section 6 of the Stock Purchase Agreement with respect to 1,273,438 of the
Pledged Shares. Pledgor represents that Alpharma has consented in writing to
the assignment of such rights to the Secured Party hereunder.
SECTION 15. Private Sale. Subject to the restrictions on Transfers of the
------------
Pledged Shares set forth in Section 12(a)(ii) hereof, (a) the Pledgor recognizes
that the Secured Party may be unable to effect a public sale of any or all the
Pledged Shares, by reason of certain prohibitions contained in the Securities
Act, and accordingly that the Secured Party may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers who will be
obliged to agree, among other things, to acquire such securities for their own
account, for investment and not with a view to the distribution and resale
thereof. The Pledgor acknowledges and agrees that any such private sale shall
be deemed to have been made in a commercially reasonable manner, and waives any
claims against the Secured Party arising by reason
9
<PAGE>
Page 21 of 47 Pages
of the fact that the price at which the Pledged Shares may be sold in a private
sale may be less than the price which might have been obtained in a public sale
or was less than the aggregate amount of the Obligations or the stock exchange
market price of shares of Alpharma of the same class as the Pledged Shares, even
if the Secured Party accepts the first offer received and does not offer the
Pledged Shares to more than one possible Purchaser. The Secured Party shall be
under no obligation to delay a sale of any of the Pledged Collateral for the
period of time necessary to permit the registration of such securities for
public sale under the Securities Act, or under applicable state securities laws.
(b) The Pledgor agrees to use its best efforts to do or cause to be done
all such other acts and things as may be necessary to make such sale or sales of
any portion of or all the Pledged Collateral valid and binding and in compliance
with any and all applicable laws, regulations, orders, writs, injunctions,
decrees or awards of any and all courts, arbitrators or governmental
instrumentalities, domestic or foreign, having jurisdiction over any such sale
or sales, all at the Pledgor's expense. The Pledgor further agrees that a
breach of any of the covenants contained in this Section 15 will cause
irreparable injury to the Secured Party, that the Secured Party has no adequate
remedy at law in respect of such breach and, as a consequence, agrees that each
and every covenant contained in this paragraph shall be specifically enforceable
against the Pledgor. The Pledgor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except for
a defense that no Event of Default has occurred under the Loan Agreement.
SECTION 16. Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 17. Indemnity and Expenses. Pledgor shall on demand indemnify the
----------------------
Secured Party from and against any and all claims, losses and liabilities
growing out of or resulting from this Agreement (including, without limitation,
enforcement of this Agreement). Pledgor shall upon demand pay to the Secured
Party the amount of any and all expenses, including the fees and expenses of its
counsel and of any experts and agents, which the Secured Party may incur in
connection with (i) the preparation and administration of this Agreement, (ii)
the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Secured Party
10
<PAGE>
Page 22 of 47 Pages
hereunder, and (iv) the failure by Pledgor to perform or observe any of the
provisions hereof.
SECTION 18. Security Interest Absolute. All rights of the Secured Party
--------------------------
and security interests hereunder, and all obligations of the Pledgor hereunder,
shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Loan Agreement
or any instrument related thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment or
waiver under, or any consent to any departure from, the Loan Agreement;
(iii) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of, or consent to
departure from, any guaranty for all or any of the Obligations; or
(iv) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third-party
pledgor.
SECTION 19. Amendments. No amendment or waiver of any provision of this
----------
Agreement, nor consent to any departure by Pledgor here from, shall in any event
be effective unless the same shall be in writing and signed by the Secured
Party, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 20. Addresses for Notices. All notices and other communications
---------------------
provided for under this Agreement shall be in writing and shall be addressed as
follows:
If to the Secured Party, at:
Den norske Bank ASA
P.O. Box 1171 Sentrum
N-0107 Oslo
Norway
Telefax No.: +47 22 48 10 46
Attention: Credit Administration
11
<PAGE>
Page 23 of 47 Pages
If to the Pledgor, at:
Wangs Fabrik AS
P.O. Box 158 Skoyen
0212 Oslo
Norway
Telefax No.: +47 22 52 91 50
Attention: Sverre Bjertnes
or to such other address as one party may notify the other in writing. Notices
sent by letter or telefax shall be effective upon receipt. Each party shall
confirm by letter any telefax notice to the other party to this Agreement.
SECTION 21. Continuing Security Interest; Transfer of Facility. This
--------------------------------------------------
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) remain in full force and effect until payment in full of the Loan
and all other Obligations then due and owing, (ii) be binding upon the Pledgor,
its successors and assigns, and (iii) inure to the benefit of the Secured Party
and its successors, transferees and assigns. Without limiting the generality of
the foregoing clause (iii), the Secured Party may assign or otherwise transfer
the Loan, in whole or in part, to any other person or entity, and such other
person or entity shall thereupon become vested with all the benefits in respect
thereof granted to the Secured Party herein or otherwise. Upon the payment in
full of the Loan and all other Obligations then due and owing, Pledgor shall be
entitled to the return, upon its request and at its expense, of such of the
Pledged Collateral as shall not have been sold or otherwise applied pursuant to
the terms hereof.
SECTION 22. No Waiver; Cumulative Remedies. Each right, power and remedy
------------------------------
herein specifically granted to the Secured Party or otherwise available to it at
law or in equity or otherwise shall be cumulative, and shall be in addition to
every other right, power and remedy herein specifically given or now or
hereafter existing at law, in equity or otherwise; and each right, power and
remedy, whether specifically granted herein or otherwise existing, may be
exercised at any time and from time to time as often and in such order as may be
deemed expedient by the Secured Party in its complete discretion; and the
exercise or commencement of exercise of any right, power or remedy shall not be
construed as a waiver of the right to exercise, at the same time or thereafter,
the same or any other right, power or remedy. No delay or omission by the
Secured Party in exercising any such right or power, or in pursuing any such
remedy, shall impair any such right, power or remedy, or be construed to be a
waiver of
12
<PAGE>
Page 24 of 47 Pages
any default on the part of the Pledgor or Borrower or an acquiescence therein.
No waiver by the Secured Party of any breach or default of or by the Pledgor
hereunder shall be deemed to be a waiver of any other similar, previous or
subsequent breach or default.
SECTION 23. Governing Law; Terms. This Agreement shall be governed by and
--------------------
be construed in accordance with the internal laws of the Kingdom of Norway.
SECTION 24. Submission to Jurisdiction; Agent for Service of Process. (a)
--------------------------------------------------------
The Pledgor hereby irrevocably submits to the non-exclusive jurisdiction of any
state or federal court sitting in the County of New York, State of New York, in
connection with any action or proceeding arising out of or related to this
Agreement, or any other Security Document, or the transactions contemplated
hereby or thereby, irrevocably consents to the service of process in such
actions, and, to the maximum extent permitted by law, waives irrevocably any
objection to venue or objections in the nature of forum non conveniens that it
----- --- ----------
may have.
(b) The Pledgor hereby irrevocably appoints C T Corporation System (the
"Process Agent"), with an office on the date hereof at 1633 Broadway, New York,
New York 10019, United States, as its agent to receive on behalf of itself and
its property service of copies of the summons and complaint and any other
process which may be served in any such action or proceeding. Such service may
be made by mailing or delivering a copy of such process to the Pledgor in care
of the Process Agent (or any successor thereto, as the case may be) at such
Process Agent's above address (or the address of any successor thereto, as the
case may be), and the Pledgor hereby irrevocably authorizes and directs the
Process Agent (and any successor thereto) to accept such service on its behalf.
The Pledgor shall appoint a successor agent for service of process should the
agency of C T Corporation System terminate for any reason, and further shall at
all times maintain an agent for service of process in New York, New York, so
long as there shall be outstanding any Obligations hereunder. The Pledgor shall
give notice to the Secured Party of any appointment of successor agents for
service of process, and shall obtain from each successor agent a letter of
acceptance of appointment and promptly deliver the same to the Secured Party.
As an alternative method of service, the Pledgor also irrevocably consents to
the service of any and all process in any such action or proceeding by the
mailing of copies of such process to it at its address specified in Section 20
hereof. The Pledgor agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Section 24 shall affect the right of the Secured Party to serve legal process in
any other manner permitted by law, or
13
<PAGE>
Page 25 of 47 Pages
affect the right of the Secured Party to bring any action or proceeding against
the Pledgor or its properties in the courts of any other jurisdiction.
SECTION 25. WAIVER OF JURY TRIAL. BOTH PLEDGOR AND SECURED PARTY HEREBY
--------------------
IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE LOAN AGREEMENT, OR
ANY OTHER SECURITY DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
14
<PAGE>
Page 26 of 47 Pages
IN WITNESS WHEREOF, Pledgor and the Secured Party have each caused this
Pledge Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
WANGS FABRIK AS
By: /s/Roald Jotun; Sverre Bjertnes
--------------------------------
Name: Roald Jotun; Sverre Bjertnes
Title: Administrative Director;
V.P. of Finance
DEN NORSKE BANK ASA
By: /s/Pal Skoe
-------------------------------
Name: Pal Skoe
Title: Sr. Vice President
Attachment: Exhibit 1
Description of Pledged Securities
15
<PAGE>
Page 27 of 47 Pages
Exhibit 1
---------
to Securities
-------------
Pledge Agreement
----------------
The Securities pledged to the Secured Party are Two Million
(2,000,000) shares of Class B Common Stock, $0.20 par value, of Alpharma Inc.
(formerly A.L. Laboratories, Inc.), a corporation organized and existing under
the laws of the State of Delaware.
<PAGE>
Page 28 of 47 Pages
Exhibit III
NOK 200,000,000
LOAN FACILITY AGREEMENT
between
AL INDUSTRIER AS
and
DEN NORSKE BANK ASA
DATED June 19, 1997
<PAGE>
Page 29 of 47 Pages
-2-
CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
1. DEFINITIONS 3
2. THE LOAN FACILITY 7
3. PURPOSE 8
4. CONDITIONS PRECEDENT 8
5. INTEREST 9
6. REPAYMENT 10
7. REPRESENTATIONS, UNDERTAKINGS AND SECURITY 10
8. UNAVAILABILITY 12
9. CHANGES IN CIRCUMSTANCES 13
10. FEES AND EXPENSES 14
11. PAYMENTS 14
12. EVENTS OF DEFAULT 16
13. TRANSFER 17
14. NOTICES AND TIME 18
15. GOVERNING LAW AND JURISDICTION 18
</TABLE>
EXHIBIT 1
FORM OF DRAWDOWN NOTICE
<PAGE>
Page 30 of 47 Pages
-3-
This Loan Facility Agreement (the "Agreement") is made on June 19, 1997
between:
(1) AL INDUSTRIER AS of Harbitzalleen 3.0212 Oslo, Norway
(the "Borrower"):and
(2) DEN NORSKE BANK ASA of Stranden 21, Oslo, Norway
Foretaksregisteret NO 810 506 482 (the Register of Business Enterprises)
(the "Bank").
1. DEFINITIONS
1.1 As used in this Agreement and in any documents delivered pursuant
hereto, the following expressions shall have the following meanings
respectively:
"Banking Day" means a day upon which banks are open
for transactions contemplated by this
Agreement in (a) Norway, and (b)
additionally, in relation to payments
hereunder, the place for provision of
funds or due payment;
"Commitment" means NOK 200,000,000 (as the same may
be reduced from time to time in
compliance with Clauses 2.3 or 7.2 (e));
"Counter-Indemnity" means the counter indemnity/recourse
letter executed by the Borrower in
favour of the Bank stating inter alia
its liability towards the Bank in
respect of the Irrevocable Payment
Letter;
"Drawdown Date" means a date upon which a Drawing is
advanced to the Borrower;
"Drawing" means an advance to the Borrower in an
amount of not less than NOK 10,000,000
but in
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multiples of NOK 5,000,000 of the
Commitment;
"Event of Default" means any of the events specified in
Clause 12;
"Facility" means the loan facility, the terms and
conditions of which are set out in this
Agreement,
"Interest Payment Date" means the last day of each Interest
Period;
"Interest Period" means a period calculated in accordance
with the provisions of Clause 5.1 or
Clause 11.2;
"Irrevocable Payment Letter" means a letter dated 21 February 1997
from the Bank of Union Bank of Norway
subject to which the Bank undertakes,
upon certain terms and conditions, to
make that certain payment as set out
in the Purchase Agreement;
"NIBOR" (Norwegian Interbank Offered Rate) means
the rate per annum determined by the
Bank as the rate at which the Bank, in
accordance with its usual practice, is
offering comparable lendings in NOK for
the relevant Interest Period in the
Norwegian Interbank Market at or about
12:00 noon Norwegian time on the
Quotation Date;
"Loan" means the aggregate principal amount of
the Commitment for the time being
advanced and outstanding hereunder;
"Margin" means (i) if Value Adjusted Equity is
NOK 1,000,000,000 or more: 0,80 per cent
per annum, and (ii) if Value Adjusted
Equity is between NOK 750,000,000 and
NOK 1,000,000,000: 1 per cent per annum,
and (iii) if Value Adjusted Equity is
less than NOK
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750,000,000: 1.20 per cent per annum,
provided always that the applicable
margin as calculated under either of
(i), (ii) or (iii) above shall be set in
advance for the whole calender quarter
which commences immediately subsequent
to the expiry of the present calender
quarter during which the current figures
of Value Adjusted Equity are presented
to the Bank.
"Maturity Date" means the date occurring 60 months after
the first Drawdown Date;
"month(s)" means a period calculated from any
specified day to and including the day
numerically corresponding to such
specified day (or, if such specified day
is the last day or if there shall be no
day numerically corresponding to such
specified day, the last day) in the
relevant subsequent calendar month;
"NOK" means the lawful currency of Norway;
"Purchase Agreement" means the stock subscription and
purchase agreement dated 10 February
1997 between Alpharma Inc. as issuer and
seller and the Borrower as subscriber
and purchaser of a certain number of
shares at a price equal to the
Subscription Consideration and on terms
as set out therein;
"Quotation Date" means in relation to any Interest Period
for which an interest rate is to be
determined hereunder (a) the day on
which quotations would ordinarily be
given in the Norwegian Interbank Market
for deposits in NOK for delivery on the
first day of that Interest Period,
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or (b) if such earlier day is not a
Banking Day the preceding Banking Day;
"Security Documents" means the documents listed in Clause
7.3;
"Subscription Consideration" means USD 20,807,976.92;
"Taxes" means any taxes, levies, duties,
charges, fees, deductions and
withholdings levied or imposed by any
governmental or other taxing authority
whatsoever;
"Term Date" means the date occurring 59 months
after the first Drawdown Date;
"USD" means the lawful currency of the United
States of America; and
"Value Adjusted Equity" means in respect of the Borrower, the
aggregate value, calculated on the last
day of each calendar quarter and
presented to the Bank no later than 60
days after each such date, of
(i) yearly (on a 12 months rolling
basis) profit from operations less
royalty to shareholders in Nopal AS
multiplied by 10, and
(ii) yearly (on a 12 months rolling
basis) profit from operations in
Dynal AS multiplied by 10, the sum
of which shall, for the purpose of
this definition in no event be
calculated to be less than NOK
400,000,000 and shall be further
multiplied by the Borrower's
ownership interest (expressed in
per cent) in Dynal AS, provided
always that if and when Dynal AS
becomes listed on any stock
exchange. Dynal AS' total
consolidated stock value multiplied
by the
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Borrower's ownership interest (expressed
in per cent) in the same shall comprise
the value applicable under this sub-
clause (ii), and
(iii) the total consolidated stock value of
Alpharma, Inc. as listed on the New York
Stock Exchange multiplied by the
Borrower's ownership interest (expressed
in per cent) in Alpharma Inc.
less the aggregate, on the date of
calculation, net interest bearing liabilities
of the Borrower and of AS Wangs Fabrik.
2. THE LOAN FACILITY
2.1 Upon satisfaction of the conditions set out in Clause 4 the Bank
shall make the Commitment available to the Borrower during the period
from the date hereof up to and including the Term Date. The first
Drawing shall have to be made not later than on 30 June 1997.
2.2 Up to the Term Date the Borrower may utilize the Facility on a
revolving credit basis, such that any amount repaid prior to the Term
Date may be redrawn by the Borrower, subject to the terms and
conditions of this Agreement. Not more than 6 Drawings may be
outstanding hereunder at any given time.
2.3 The Borrower may cancel any undrawn amount of the Commitment in whole
or in part by giving 10 Banking Days irrevocable prior written notice
of such cancellation to the Bank. Amounts cancelled may not be
subsequently drawn.
2.4 The obligation of the Bank under the Irrevocable Payment Letter to
pay the Subscription Consideration on behalf of the Borrower, the
counter liability of which by the Borrower to the Bank is evidenced
by the Counter-Indemnity, shall be considered to be made available to
the Borrower under and as a part of the Commitment in accordance with
Clause 2.1 above. Such payment obligation of the Bank shall therefor
be considered as being advanced and outstanding under this Agreement,
and shall accordingly be included in the term "Loan" as defined
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herein. The amount of such advance as aforesaid shall be calculated on
each date of receipt by the Bank of a drawdown notice in accordance
with Clause 4.1 (b) below, as the NOK equivalent rounded upwards to the
nearest NOK 1,000,000, of the Subscription Consideration.
3. PURPOSE
3.1 The Borrower shall apply the Commitment in refinancing its foreign
currency loans the equivalent of which is originally NOK 70,000,000 and
NOK 10,000,000 and in financing the purchase of 1,273,438 subscribed
shares in Alpharma Inc.
4. CONDITIONS PRECEDENT
4.1 A Drawing may be made on any Banking Day during the period from the
date hereof up to and including the Term Date, provided:
(a) the Bank shall have received not less than 3 Banking Days prior
to the first proposed Drawdown Date the following in form and
content satisfactory to it:-
(i) a counterpart of this Agreement duly signed on behalf of
the Borrower;
(ii) a company certificate evidencing that the Borrower is
duly registered as a limited company and a copy of its
articles of association;
(iii) a copy of the resolution of the board of directors of the
Borrower approving the execution and performance by the
Borrower of this Agreement and the relevant Security
Documents and specifying the persons authorized to sign
this Agreement and such Security Documents on its behalf;
(iv) the Security Documents;
(v) legal opinion(s) from such counsel in such jurisdictions
as the Bank may reasonably have requested addressing
questions or circumstances of relevance to this Facility;
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(vi) a copy of any consent necessary from governmental or
other authorities for the execution of and performance
under this Agreement by the Borrower;
(vii) a company certificate evidencing that AS Wangs Fabrik is
duly registered as a limited company and a copy of its
articles of association;
(viii) a copy of the resolution of the board of directors of AS
Wangs Fabrik approving its execution and performance of
the relevant Security Documents;
(b) the Bank shall have received not later than 12:00 noon Oslo
time on the third Banking Day prior to each proposed Drawdown
Date an irrevocable written drawdown notice substantially in
the form of Exhibit 1 attached hereto;
(c) the Bank shall not have determined prior to 12:00 noon
Norwegian time on the Quotation Date prior to the Drawdown Date
that it is unable to obtain deposits in the Norwegian Interbank
Market in a sum necessary to fund the Drawing; and
4.2 The Bank may, in its discretion, (i) extend the period for delivery
of any of the documents referred to above on such conditions as it
deems appropriate and (ii) require any copy document to be certified
as a true copy.
5. INTEREST
5.1 Each Interest Period shall begin on the Drawdown Date or, as the case
may be, on the Interest Payment Date in respect of the preceding
Interest Period and shall end on such date 1, 3, 6 or 12 months
thereafter as the Borrower may elect, subject to availability, by not
less than 3 Banking Days' written notice to the Bank, provided that:
(a) if any Interest Period would otherwise end on a day which is
not a Banking Day it shall be extended to end on the succeeding
Banking Day
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unless it would thereby end in a new calendar month in which event
it shall be shortened to end on the preceding Banking Day:
(b) subject to paragraph (c) below if no election is made by the
Borrower in respect of any Interest Period the length of such
Interest Period shall be 3 months;
(c) the availability of 1 month Interest Periods shall be limited to
3 for each twelve month period after the first Drawdown Date.
5.2 The Borrower shall pay interest on the Loan or the relevant part
thereof in arrears on each interest Payment Date and additionally in
the case of an Interest Period exceeding 6 months duration at six-
monthly intervals during such Interest Period at the annual rate which
is conclusively certified by the Bank to be the aggregate of the Margin
and NIBOR.
5.3 The Bank shall give notice to the Borrower of each interest rate fixed
on the Quotation Date for the relevant Interest Period, which notice
shall, in the absence of manifest error, be conclusive.
6. REPAYMENT
6.1 Each Drawing advanced and outstanding under the Agreement shall be due
and repayable on its respective Interest Payment Date.
6.2 The Borrower shall repay the Loan outstanding on the Term Date in one
amount on the Maturity Date.
7. REPRESENTATIONS, UNDERTAKINGS AND SECURITY
7.1 The Borrower represents to the Bank that:
(a) It is duly formed and validly existing under the laws of Norway
and has the power and has obtained all necessary consents for the
execution and performance of this Agreement and the Security
Documents to which it is a party:
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(b) this Agreement constitutes and those of the Security Documents
to which it is a party upon execution will constitute valid,
binding and enforceable obligations of the Borrower, and the
execution and performance of this Agreement and such Security
Documents do not and will not contravene any applicable law,
order, regulation or restriction of any kind, including
correctual restrictions, binding on the Borrower; and
(c) it is not default under any other agreement to which it is a
party, nor is it in default in respect to any financial
commitment or obligation.
7.2 The Borrower undertakes to the Bank that so long as any amount is
outstanding hereunder:
(a) It will promptly inform the Bank of any occurrence of which it
becomes aware which in its reasonable opinion, might adversely
affect its ability to perform its obligations hereunder or
under any Security Document or constitute an Event of Default;
(b) It will deliver to the Bank copies of (i) the annual audited
accounts of itself, Nopal AS, Dynal AS and Alpharma Inc. not
later than 180 days after the end of each respective financial
year (ii) the unaudited quarterly reports of the same including
balance sheets and profit and loss statements within 60 days
after the end of each calendar quarter and (iii) such other
financial information as the Bank may reasonably request;
(c) It will not make any further borrowings or enter into any
guarantee liabilities exceeding in aggregate NOK 5,000,000
without the prior written consent of the Bank;
(d) It will not create, incur or allow to exist over any of its
assets any further mortgage, charge, pledge or lien other than
those mentioned in Clause 7.3 or, as the case may be, use any
existing security as aforesaid (which may be released following
repayment in part or in full of the liabilities so secured) to
secure any other (new) financial obligation, without the prior
written consent of the Bank;
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(e) it will, in case of a sale of the whole or any part of its shares
in Dynal AS, Nopal AS or Alpharma Inc., apply all proceeds of
such sale in repayment of the Loan, and the Commitment shall be
reduced accordingly.
7.3 The Loan, and all amounts outstanding hereunder, shall be secured by
the following in form and content satisfactory to the Bank:
(a) a pledge of all the Borrower's shares in Nopal AS as generally
deposited with the Bank in accordance with
"pantsettelseserklaering" dated 12 October 1994; and
(b) a pledge over a total of 2,000,000 shares of class B stock in
Alpharma Inc. executed by AS Wangs Fabrik.
8. UNAVAILABILITY
8.1 In the event that on any Quotation Date the Bank is unable to obtain
deposits in the Norwegian Interbank Market to fund a Drawing or the
Loan, it shall forthwith notify the Borrower and until such notice is
withdrawn the obligations of the Bank to advance any Drawing shall be
suspended. The Bank shall endeavour to fund the Loan from such other
sources as may be available to it and in such event the rate of
interest payable on such amount shall be the aggregate of the Margin
and such rate as the Bank may from time to time certify as being the
cost to it of funds in NOK.
8.2 In the event that the Bank is unable to fund such amount from
alternative sources, it shall forthwith notify the Borrower and the
Borrower shall repay such amount on the earlier of the next following
Interest Payment Date and the date falling 5 Banking Days after
receipt of such notice. In the event that the Bank is able to fund
such amount from alternative sources, but the Borrower considers the
interest rate so determined to be too high, it may prepay such amount
on giving the Bank not less than 5 Banking Days' Irrevocable written
notice.
If at any time when the Bank is funding the Loan from alternative
sources, it determines that deposits are available to it in the
Norwegian Interbank Market, it shall forthwith notify the Borrower and
the rate of interest payable on such amount for the period from the
expiry of the then current period for funding from alternative sources
to the expiry of the then current Interest Period determined
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under Clause 5.1 shall be the aggregate of the Margin and such rate as
the Bank may certify as the rate at which it is able to obtain deposits
for such period as aforesaid.
9. CHANGES IN CIRCUMSTANCES
9.1 If by reason of: (i) changes in any existing law, rule or regulation,
or (ii) the adoption of any new law, rule or regulation, or (iii) any
change in the interpretation or administration of (i) or (ii) above by
any governmental authority, or (iv) compliance with any directive or
request from any governmental authority (whether or not having the
force of law):
(a) the Bank incurs a cost as a result of it having entered into this
Agreement and/or performing its obligations hereunder; or
(b) there is an increase in the cost to the Bank of maintaining or
funding the Commitment, the Loan or any advances hereunder; or
(c) the Bank becomes liable for any new taxes (other than on net
income) calculated by reference to the Commitment or the Loan; or
(d) the Bank becomes subject to any new or modified capital adequacy
or similar requirements which will have the effect of increasing
the amount of capital required or expected to be maintained by the
Bank based on the Bank's obligations hereunder; or
(e) the Bank's effective return hereunder is reduced in any other
manner;
then any such cost; liability or reduction of return as referred to in
the preceding paragraphs (a)-(e) shall be payable by the Borrower upon
request by the Bank either in the form of an increased margin or the
form of an indemnification. The Bank may not claim such compensation
with retroactive effect. The Bank shall give the Borrower notice within
a reasonable time of its intention to claim compensation under this
Clause 9.1 and it shall specify the form and amount of such
compensation. The Bank's determination of the amount of compensation to
be made under this Clause 9.1 shall, absent manifest error, be
conclusive. The Borrower shall be entitled to prepay the Loan in
accordance with Clause 7 at any
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time following receipt of notice from the Bank as aforesaid on
giving not less than 5 Banking Days' irrevocable written notice.
In such event the Borrower shall nevertheless compensate the Bank
for such requested indemnification for the period up to and
including the date of prepayment.
9.2 In the event that it shall be unlawful for the Bank to make
available the Commitment or maintain or fund the Loan hereunder
then the Bank's obligations shall terminate and all amounts owing
by the Borrower to the Bank shall become due and payable on
demand.
10. FEES AND EXPENSES
10.1 The Borrower shall pay to the Bank:
(a) on the date hereof, an arrangement fee of 0.35 per cent flat
of the Commitment;
(b) a commitment fee in USD in respect of the undrawn part of the
Commitment for the period from the date hereof up to and
including the earlier of the date on which the Commitment is
fully utilized and the Term Date, equal to 50 per cent of the
applicable Margin at such time calculated on the daily
average undrawn amount of the Commitment, such fee to be
payable quarterly in arrears commencing on the date hereof
and finally on the last day of such period as aforesaid; and
(c) upon demand, all expenses (including internal and external
legal and collateral fees) incurred by the Bank in connection
with the preparation, execution or termination of this
Agreement and any other documents delivered pursuant to this
Agreement or the preservation or enforcement of any rights
hereunder and/or thereunder.
10.2 The obligations of the Borrower in Clause 10.1 (c) above shall
survive the final Repayment Date.
11. PAYMENTS
11.1 In the event that the date on which a payment is due to be made
hereunder is not a Banking Day, such date of payment shall be the
following Banking Day unless it
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would thereby fall in a new calendar month in which event it shall be
the preceding Banking Day.
11.2 In the event that any payment to be made hereunder by the Borrower to
the Bank is not received on the due date therefor, interest will be
charged by the Bank from the due date until the date that payment is
received at a rate which is equal to the aggregate of (i) the Margin
(ii) a default funding charge of 3% per annum and (iii) the rate at
which deposits from one Banking Day to the next in an amount
approximately equal to the defaulted amount due to the Bank is offered
to the Bank in the Norwegian Interbank Market at 12:00 noon Norwegian
time on the due date for payment and on each succeeding Banking Day
until payment in full of the amount due is received by the Bank,
provided that if the Bank determines that such default may be
reasonably expected to continue unremedied for a period exceeding one
week then it may require by notice to the Borrower that the funding
cost shall be determined by reference to the rate at which deposits
are offered as aforesaid for periods of such length (not exceeding
three months) as it may designate. Interest charged under this Clause
11.2 shall be payable on demand and unless so paid shall be added to
the defaulted amount at the end of each month following the due date
for payment of such amount.
11.3 All payments to be made by the Borrower hereunder shall be made
without set-off or counterclaim.
11.4 All payments to be made by the Borrower hereunder shall be made free
and clear of and without deduction for or on account of any present
or future Taxes of any nature now or hereafter imposed unless the
Borrower is compelled by law to make payment subject to any such
Taxes. In that event the Borrower shall (i) pay to the Bank such
additional amount as may be necessary to ensure that the Bank receives
a net amount equal to that which it would have received had such
payment not been made subject to any Taxes, and (ii) deliver to the
Bank within 10 Banking Days of any request by it an official receipt
in respect of the payment of any Taxes so deducted.
11.5 If any amount of principal is, for any reason whatsoever, repaid on a
day other than the last day of the then current Interest Period
relating to such amount, the Borrower shall pay to the Bank on request
such amount as may be necessary to compensate the Bank for any loss or
premium or penalty incurred by it in respect
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of the liquidation or re-employment of funds borrowed for the
purpose of maintaining the amount repaid.
11.5 Interest, commitment fee and any other payments hereunder of an
annual nature shall accrue from day to day and be calculated on
the actual number of days elapsed and on the basis of a 360 day
year.
12. EVENTS OF DEFAULT
12.1 The obligations of the Bank hereunder shall terminate forthwith
and any amount outstanding shall become immediately due and
payable together with interest thereon and the Bank may enforce
its rights under this Agreement and the Security Documents in the
manner and order it deems appropriate, if any of the following
events occurs and the Bank gives notice to the Borrower:
(a) if the Borrower fails to pay any sum due hereunder on the due
date end, to the extent such failure is caused by any
technical or administrative error, within 3 Banking Days of
the due date; or
(b) if the Borrower defaults in the due performance or observance
of any term or covenant contained herein or in any Security
Document and such default continues unremedied for a period
of 10 Banking Days after the Bank has given to the Borrower
notice of such default; or
(c) if any material representation made by the Borrower in this
Agreement or in any notice, certificate or statement
delivered or made pursuant hereto proves to have been
inaccurate or misleading when made; or
(d) if any indebtedness in respect of borrowed money or guarantee
liabilities of the Borrower is not paid when due or becomes
due prior to the specified payment date by reason of default;
or
(e) if a distress or other execution is levied upon or against
any substantial part of the assets of the Borrower and is not
discharged within 30 days; or
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17
(f) If Borrower is unable or admits in writing its inability to pay
its lawful debts as they mature or makes a general assignment
for the benefit of its creditors; or
(g) if any proceedings are commenced in or any order or judgment
is given by any court for the liquidation, winding-up or
reorganisation of the Borrower or for the appointment of a
receiver, trustee or liquidator of the Borrower or all or any
part of its assets (save for the purpose of amalgamation or
reorganisation not involving insolvency, the terms of which
shall have received the prior written approval of the Bank); or
(h) if the Borrower ceases or threatens to cease to carry on its
business or disposes or threatens to dispose of a substantial
part of its assets or the same are seized or appropriated for
any reason; or
(i) if any Security Document ceases to be in full force and
effect; or
(j) if any consent required for the performance by the Borrower of
its obligations hereunder is revoked or is otherwise modified
in a manner unacceptable to the Bank; or
(k) if there is any material, in the Bank's opinion, change of
ownership in the Borrower or in AS Wangs Fabrik without the
prior written approval of the Bank; or
(l) if Value Adjusted Equity is or becomes less than NOK
500,000,000; or
(m) if a situation arises which, in the opinion of the Bank, will
prevent fulfilment by the Borrrower of its obligations
hereunder.
12.2 Clause 12.1 (d) - (i) shall also apply with respect to AS Wangs Fabrik.
13. TRANSFER
13.1 The Bank may upon prior written consent from the Borrower transfer all
or part of its participation in the Facility to any other bank or
financial institution. In such event references herein to the Bank
shall be construed as references to its transferee or transferees to
the extent necessary.
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14. NOTICES AND TIME
14.1 Every notice under this Agreement shall be in writing and may be
given or made by letter or telefax. Communications hereunder shall
be addressed as follows:
(a) if to the Bank, at P.O. Box 1171
Sentrum, N-0107 Oslo, Norway,
telefax no. 22 48 10 46
Attention: Credit Administration
(b) if to the Borrower, at P.O. Box 158
Sk(o with slash)yen, 0212 Oslo
telefax no. 22 62 91 50,
Attention: Sverre Bjertnes;
or such other address as one party may notify the other in writing.
14.2 Communications sent by letter or telefax shall be effective upon
receipt. Any communication by telefax from the Borrower to the Bank
shall be confirm by letter if so requested by the Bank.
14.3 No failure or delay on the part of the Bank to exercise any power
or rights under this Agreement or the Security Documents shall
operate as a waiver thereof or of any other power or right. The
remedies provided herein are cumulative and are not exclusive of
any remedies provided by law.
15. GOVERNING LAW AND JURISDICTION
15.1 This Agreement shall be governed by and construed in accordance
with Norwegian law.
15.2 The Borrower hereby irrevocably submits to the non-exclusive
jurisdiction of the Norwegian courts, the venue to be elected by
the Bank.
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The Borrower
- ------------
AL INDUSTRIER AS
By /s/ Roald Jotun; /s/ Sverre Bjertnes
----------------------------------------------------
Name in block letters Roald Jotun; /s/ Sverre Bjertnes
---------------------------------
Title Administrative Director; V.P. of Finance
-------------------------------------------------
The Bank
- --------
p.p. DEN NORSKE BANK ASA
By /s/ Pal Skoe
----------------------------------------------------
Name in block letters Pal Skoe
---------------------------------
Title Sr. Vice President
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EXHIBIT 1
FORM OF
D R A W D O W N N O T I C E
From: AL INDUSTRIER AS
To: Den norske Bank ASA
Attention: Credit Administration
Date:
----------------------------
Dear Sirs,
We refer to a Loan Facility Agreement dated 19 (the
-------------- --
"Agreement") made between ourselves as Borrower and Den norske Bank ASA. Terms
defined in the Agreement shall have the same meaning in this notice.
We hereby give you irrevocable notice that pursuant to the Agreement and on
19 , we wish to draw down the amount of NOK
- ----------------- -- ---------------
upon the terms and subject to the conditions contained therein.
The Interest Period for the Drawing shall, subject to the provisions of the
Agreement, be of months duration.
---------
The Drawing, net of applicable fees and expenses described in Clause 10, shall
be transferred to the amount of with ,
---------------- --------------------
account no. .
------------------
As of today no event has occurred which with or without notice and/or lapse of
time would constitute an Event of Default under the Agreement.
In the event that drawdown does not take place on the aforementioned date, by
reasons beyond the control of the Bank, we hereby undertake to reimburse you for
any and all costs incurred, including but not limited to interest.
Yours faithfully,
AL INDUSTRIER AS
-------------------------
