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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. 3)/*/
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)
March 30, 1998
- --------------------------------------------------------------------------------
(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.
<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).
SCHEDULE 13D
CUSIP NO. 001629 10 4 PAGE 2 OF PAGES
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
A. L. Industrier AS
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2 Check the Appropriate Box if a Member of a Group (a) [_]
(b) [_]
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3 SEC Use Only
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4 Source of Funds/*/
00, BK
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5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [_]
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6 Citizenship or Place of Organization
Norway
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7 Sole Voting Power
NUMBER OF
9,500,000
SHARES ------------------------------------------------------------
8 Shared Voting Power
BENEFICIALLY
-0-
OWNED BY ------------------------------------------------------------
9 Sole Dispositive Power
EACH
9,500,000
REPORTING PERSON ------------------------------------------------------------
10 Shared Dispositive Power
WITH
-0-
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
9,500,000
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12 Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares/*/ [_]
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13 Percent of Class Represented by Amount in Row (11)
37.5%
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14 Type of Reporting Person/*/
CO
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/*/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>
Amendment No. 3 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. 3 to its Schedule 13D Statement
dated February 19, 1997 (as amended from time to time, the "Schedule 13D")
relating to the Class A Common Stock, par value $.20 per share (the "Common
Stock") of Alpharma Inc. (the "Issuer") to amend the items and schedules set
forth herein and to file certain exhibits. No amendment is made to the items or
schedules not set forth below.
ITEM 2. IDENTITY AND BACKGROUND.
-----------------------
(a) The Schedule 13D is the statement of A. L. Industrier AS ("Industrier")
with respect to shares of Common Stock of the Issuer which are issuable upon
conversion on a share for share basis of shares of Class B Common Stock , par
value $.20 per share (the "Class B Stock") of the issuer. 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 to Amendment No. 2 to the
Schedule 13D, 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 51% 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 and Sissener 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).
<PAGE>
(e) During the past five years, neither Industrier, nor 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.
-------------------------------------------------
On March 30, 1998 Industrier acquired $67,850,000 of 5 3/4 % convertible
(Class B) subordinated B notes of the Issuer (the "B Notes") at par using funds
which were borrowed from Den norske Bank (the "Bank"). The borrowing was made
pursuant to a loan agreement dated March 25, 1998 (the "1998 Loan Agreement")
which is filed as Exhibit I to this amendment. Reference is made to such
Exhibit for the terms of such loan which are hereby incorporated by reference.
The borrowings under the 1998 Loan Agreement are secured by a pledge of
4,740,500 shares of Class B Stock and $33,857,150 principal amount of B Notes
pursuant to the terms of a Share Pledge Agreement dated March 30, 1998 and a
Note Pledge Agreement dated March 30, 1998 (collectively, the "Pledge
Agreements") which are filed as Exhibits II and III, respectively to this
amendment. Reference is hereby made to Item 6 of this amendment. The Pledge
Agreements replace and supersede the Securities Pledge Agreement dated June 27,
1997 filed as Exhibit II to Amendment No. 2 to the Schedule 13D, and the pledge
of the Class B Stock pursuant to the Pledge Agreement includes 2,000,000 shares
of Class B Stock previously pledged pursuant to such Securities Pledge Agreement
dated June 27, 1997.
ITEM 4. PURPOSE OF TRANSACTION
----------------------
The purposes of the purchase of the B Notes by Industrier are to increase
Industrier's investment in Issuer and to provide Issuer with additional
borrowing capacity and capital to carry out its corporate purposes, including
seeking the acquisition of other businesses. The acquisition of additional
shares of Class B Stock will not affect Industrier's position as a controlling
person of issuer.
Subject to such actions as may be taken by the Issuer's Board of Directors in
the normal course of carrying out its responsibilities (including pursuing a
corporate strategy which includes seeking the acquisition of other businesses),
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 transactions or material sale of the assets of Issuer,
any change in the Board of Directors (except as may occur at the next annual
meeting of
<PAGE>
Issuer), any material change in Issuer's capitalization (except such as occurs
as a result of the issuance of the B Notes and a related series of "A Notes"
(defined and described in Item 5 below), dividend policy, business or corporate
structure, any change in Issuer's certificate of incorporation or bylaws 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. Notwithstanding the foregoing, Sissener and
related parties continue to explore the sale of Warrants beneficially owned by
Sissener and such related parties to purchase shares of Common Stock or the
shares of Common Stock which may be purchased pursuant to such Warrants prior to
the January 3, 1999 expiration date of such Warrants. Reference is made to
Items 5 and 6 to this amendment.
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) Industrier beneficially owns 9,500,000 shares of Common Stock which it may
acquire upon conversion, on a share for share basis, of Class B Stock which it
beneficially owns. Such beneficial ownership of Common Stock constitutes
approximately 37.5% of the outstanding Common Stock (assuming conversion of the
Class B Stock and the issuance of no shares of Common Stock pursuant to any
outstanding Warrants or convertible securities of the Issuer).
Sissener beneficially owns certain Warrants to purchase an aggregate of
1,383,004 shares of Common Stock, all of which are currently exercisable. The
Warrants have an exercise price of $20.69 (subject to antidilution adjustment
upon the occurrence of certain events) and expire, if not previously exercised,
on January 3, 1999. The exercise price of the Warrants and the number of shares
of Common Stock issuable on exercise of the Warrants was adjusted in September,
1997, as a result of the rights offering referred to in Amendment No. 2 to the
Schedule 13D.
The Class B Notes acquired by Industrier are convertible into Class B Stock at
a conversion price of $28.59375 per share upon the occurrence of certain events,
including the conversion into Common Stock of at least 75% of the 5 3/4
Convertible Subordinated Notes due 2005 (the "A Notes") by the holders thereof,
provided on such event the B Notes shall not be converted prior to April 6,
2001. The A Notes in a principal amount of $125,000,000 were issued by the
Issuer on March 30, 1998, in a Rule 144A offering and up to $18,750,000 of A
Notes are issuable upon exercise of an overallotment option. The A Notes are
immediately convertible into Common Stock at a conversion price of $28.59375 per
share. The B Notes are also convertible by a pledgee in
<PAGE>
the event of a default in the secured obligation or, after October 31, 1999, by
a transferee of the B Notes or a portion thereof. Industrier does not
beneficially own shares issuable on conversion of the B Notes, because the B
Notes are not convertible within 60 days.
(b) 8,226,562 of the shares of Issuer beneficially owned by Industrier are
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.
(d) Except as set forth in the Pledge Agreements, 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 Stock beneficially owned by
Industrier or the common Stock issuable 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 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 as amended, filed as Exhibit I to the
Schedule 13D, as originally filed, and Exhibit I to Amendment No. 2 to the
Schedule 13D;
(ii) A Note Purchase Agreement dated March 5, 1998, as amended by Amendment
No. 1 thereto dated March 25, 1998, filed as Exhibit IV to this amendment, under
which Industrier purchased the B Notes. The provisions of such Exhibit IV are
hereby incorporated herein by reference.
(iii) A Control Agreement dated February 7, 1986, as amended from time to
time (the "Control Agreement"), (filed as Exhibit III to the Schedule 13D as
originally filed) which prohibits Industrier from selling or otherwise
transferring any shares of Class B Stock prior to November 1, 1999 without the
prior approval of Issuer's Board of Directors, except that up to 50% of 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
<PAGE>
Boston (filed as Exhibit V to the Schedule 13D as originally filed) which sets
forth the provisions of the Warrants to purchase shares of Common Stock
beneficially owned by Sissener;
(v) The Pledge Agreements described in Item 3 above and filed as Exhibits II
and III to this Amendment. The provisions of such Exhibits are hereby herein
incorporated by reference.
(vi) The 1998 Loan Agreement described in Item 3 above and filed as Exhibit I
to this Amendment. The provisions of such Exhibit I are hereby incorporated
herein by reference.
(vii) The B Notes, a form of which is filed as Exhibit V hereto. Reference
is hereby made to Item 5. The provisions of such Exhibit V are hereby
incorporated herein by reference.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS:
---------------------------------
Exhibit I - Loan Agreement dated March 30, 1998 (described in
Item 3)
Exhibit II - Share Pledge Agreement dated March 30, 1998 (described
in Items 3 and 6)
Exhibit III - Note Pledge Agreement dated March 30, 1998 (described in
Items 3 and 6)
Exhibit IV - Note Purchase Agreement dated March 5, 1998, as amended
(described in Items 3 and 6)
Exhibit V - Form of 5 3/4% Convertible (Class B) Subordinated B Note
due 2005 (described in Item 6)
<PAGE>
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: March 30, 1998
A. L. Industrier AS
By:/s/ Glen E. Hess
----------------
Name: Glen E. Hess
Title: Attorney-in-Fact
As authorized attorney-in-fact
<PAGE>
EXHIBIT INDEX
TO
AMENDMENT NO. 3
---------------
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT NAME
- ------------ ------------------------
<S> <C>
Exhibit I Loan Agreement dated March 30, 1998 (described in Item 3)
Exhibit II Share Pledge Agreement dated March 30, 1998 (described in Items 3
and 6)
Exhibit III Note Pledge Agreement dated March 30, 1998 (described in
Items 3 and 6)
Exhibit IV Note Purchase Agreement dated March 5, 1998, as amended (described
in Items 3 and 6)
Exhibit V Form of 5 3/4 Convertible (Class B) Subordinated B Note due 2005
(described in Item 6)
</TABLE>
<PAGE>
NOK 166,000,000
USD 73,000,000
LOAN FACILITY AGREEMENT
between
AL INDUSTRIER AS
as Borrower
and
THE BANKS AND FINANCIAL INSTITUTIONS NAMED HEREIN
as Banks
and
DEN NORSKE BANK A&A
as Agent
DATED 25 Mars 1998
<PAGE>
-2-
CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
1. DEFINITIONS 3
2. THE LOAN FACILITY 7
3. PURPOSE 8
4. CONDITIONS PRECEDENT 8
5. INTEREST 10
6. REPAYMENT 11
7. DENOMINATION AND CALCULATIONS 11
8. REPRESENTATIONS, UNDERTAKINGS AND SECURITY 11
9. USD UNAVAILABILITY 13
10. CHANGES IN CIRCUMSTANCES 14
11. FEES AND EXPENSES 15
12. PAYMENTS 16
13. EVENTS OF DEFAULT 17
14. TRANSFER 19
15. AGENCY 19
16. NOTICES AND TIME 21
17. GOVERNING LAW AND JURISDICTION 21
</TABLE>
EXHIBIT 1
BANK COMMITMENTS
EXHIBIT 2
FORM OF DRAWDOWN NOTICE
<PAGE>
-3-
This Loan Facility Agreement (the "AGREEMENT") is made on 25 Mars 1998
between:
(1) AL INDUSTRIER AS of Harbitzalleen 3,0212 Oslo
(the "BORROWER"); and
(2) THE BANKS AND FINANCIAL INSTITUTIONS LISTED IN EXHIBIT 1 HERETO
(the "BANKS"); and
(3) DEN NORSKE BANK ASA of Stranden 21,0250 Oslo, Norway
Foretaksregisteret No 810 508 482 (The Register of Business Enterprises),
(as the "AGENT").
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)
Oslo, New York and London, and (b) additionally in
relation to payments hereunder the place for
provision of funds or due payments;
"COMMITMENT" means Commitment A and Commitment B (as the same
may be reduced from time to time in compliance
with Clause 2.5);
"COMMITMENT A" means NOK 166,000,000;
"COMMITMENT B" means USD 73,000,000;
"DRAWDOWN DATE" means a date upon which a Drawing is advanced to
the Borrower;
<PAGE>
-4-
"DRAWING" means an advance to the Borrower in an amount
of (i) in case of a request under Commitment
A: not less than NOK 25,000,000 and (ii) in
case of a request under Commitment B: not
less than USD 1,000,000;
"EVENT OF DEFAULT" means any of the events specified in Clause
13;
"FACILITY" means the loan facility, the terms and
conditions of which are set out in this
Agreement;
"FINAL MATURITY DATE" means 31 August 2001;
"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 of Clause 12.2;
"LIBOR" (London Interbank Offered Rate) means the
rate per annum determined by the Agent as the
rate at which the Agent, in accordance with
its usual practice, is offering comparable
lendings in the relevant eurocurrency for the
relevant Interest Period in the London
Interbank Eurocurrency Market at or about
11:00 a.m. London time on the Quotation Date;
"LOAN" means the aggregate principal amount of
Commitment A and Commitment B for the time
being advanced and outstanding hereunder;
"MARGIN" means (i) if Value Adjusted Equity is five
times the Commitment or more; 0.80 per cent
per annum, and (ii) if Value Adjusted Equity
is three times the Commitment or more but
less than five times the Commitment; 1.20
per cent per annum, and (iii) if Value
Adjusted Equity is
<PAGE>
-5-
twice the Commitment or more but
less than three times the
Commitment; 2.0 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
calendar quarter which commences
immediately subsequent to the
expiry of the present calendar
quarter during which the current
figures of Value Adjusted Equity
are presented to the Agent;
"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;
"NIBOR" (Norwegian Interbank Offered Rate)
means the rate per annum determined
by the Agent as the rate at which
the Agent, 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 in
the Quotation Date;
"NOK" means the lawful currency of
Norway;
"NOTE PURCHASE AGREEMENT" means the agreement entered into on
5 March 1998 between Alpharma Inc.
as seller and the Borrower as buyer
of up to USD 68,000,000 principle
amount of convertible subordinated
notes;
"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
<PAGE>
-6-
would ordinarily be given in the
London Interbank Eurocurrency
Market for deposits in the currency
in relation to which such rate is
to be determined for delivery on
the first day of that Interest
Period, or (b) it such earlier day
is not a Banking Day the preceding
Banking Day;
"SECURITY DOCUMENTS" means the documents listed in
Clause 8.3;
"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 31 July 2001;
"USD" means the lawful currency of the
United States of America; and
"VALUE ADJUSTED EQUITY" means, in respect of the Borrower,
the aggregate value at any time 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 Borrower's ownership
interest (expressed in per
<PAGE>
-7-
cent) in the same shall comprise the
value applicable under the sub-clause
(ii), and
(iii) the aggregate number of class B
shares in Alpharma Inc. owned by the
Borrower and by AS Wangs Fabrik
together, multiplied by the listed value
on the New York Stock Exchange of one
class A share in Alpharma Inc., and
(iv) the total number of class B notes
in Alpharma Inc. owned by the Borrower,
multiplied by the face value (or if
class A notes are listed on the New York
Stock Exchange, the listed value) of one
class A note, provided always that (a)
if the listed value on the New York
Stock Exchange of one class A share in
Alpharma Inc. is below USD 9.50 or (b)
if value adjusted equity in Alpharma
Inc. (defined as the total number of
class A shares and class B shares
outstanding at any time multiplied by
the listed value on the New York Stock
Exchange of one class A share in
Alpharma Inc.) is less than USD
243,000,000, the applicable value to be
calculated under this sub-clause (iv)
shall be zero.
2. THE LOAN FACILITY
2.1 The Banks shall take part in the Facility on a several basis with the
respective participations in Commitment A and Commitment B
respectively as listed in Exhibit 1 hereto.
2.2 No Bank shall have the amount of its participation increased or
reduced as a result of the failure of any other Bank to provide the
amount of its participation.
2.3 Upon satisfaction of the conditions set out in Clause 4 the Banks
shall make the Commitment available to the Borrower during the period
from the date hereof up to and including the Term Date.
<PAGE>
-8-
2.4 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 8 Drawings may be
outstanding under Commitment A and Commitment B together at any given
time. The aggregate of the NOK-Drawings shall at any time not exceed
Commitment A, and the aggregate of the USD-Drawings shall at any time
not exceed Commitment B.
2.5 The Borrower may cancel any undrawn amount under either of Commitment
A or Commitment B in whole or in part by giving 10 Banking Days
irrevocable prior written notice of such amount to the Agent. Any
amounts cancelled may not be subsequently drawn.
3. PURPOSE
3.1 The Borrower shall apply Commitment A partly in refinancing its
existing loans and partly for general corporate purposes and shall
apply Commitment B partly in financing the purchase of certain
convertible subordinated notes in accordance with the terms of the
Note Purchase Agreement and partly for general corporate purposes.
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 Agent shall have received not less than 5 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,
<PAGE>
-9-
(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 Security Documents and
specifying the persons authorized to sign this Agreement
and such Security Documents on its behalf;
(iv) the Security Documents;
(v) a copy of the Note Purchase Agreement;
(vi) legal opinion(s) from such counsel in such jurisdictions as
the Agent may reasonably have requested addressing
questions or circumstances of relevance to this Facility;
(vii) a copy of any consent necessary from governmental or other
authorities for the execution of and performance under this
Agreement by the Borrower;
(b) the Agent 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 2 attached hereto;
(c) the Agent shall not have received notice from any Bank prior to
11:00 a.m. London time on the Quotation Date prior to the
Drawdown Date that it is unable to obtain deposits in USD in the
London Interbank Eurocurrency Market in a sum necessary to fund
its participation in the Loan.
4.2 The Agent may, in its discretion, (i) extend the period for delivery
of any of the documents referred to above on such conditions as it
thinks fit, and (ii) require any copy document to be certified as a
true copy.
4.3 The Agent shall promptly notify each Bank of any notice received
pursuant to Clause 4.1 (b) or (c) and of compliance with Clause 4.1
(a), and shall promptly notify the Borrower of any notice received
pursuant to Clause 4.1 (c).
<PAGE>
-10-
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 Agent, 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 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 Agent to be the aggregate of
(i) in respect of an outstanding amount in USD; the applicable Margin
and LIBOR and (ii) in respect of an outstanding amount in NOK; the
applicable Margin and NIBOR.
5.3 The Agent shall give notice to the Borrower and each Bank 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.
<PAGE>
-11-
6.2 The Borrower shall repay the Loan in full on the earlier of the date
on which the conversion of the notes described in the Note Purchase
Agreement takes place and the Final Maturity Date.
7. DENOMINATION AND CALCULATIONS
7.1 For the purpose of calculation of the applicable Margin as described
in Clause 5.2 hereof, all relevant figures shall be denominated as
follows:
(a) Commitment shall mean the aggregate of (i) the USD equivalent of
Commitment A on the date of calculation and (ii) Commitment B (as
both the same may be reduced from time to time in compliance with
Clause 2.5);
(b) all amounts of Value Adjusted Equity as expressed in NOK shall be
converted to USD, based on the applicable exchange rate between
NOK and USD on the date of calculation.
8. REPRESENTATIONS, UNDERTAKINGS AND SECURITY
8.1 The Borrower represents to the Agent and the Banks 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:
(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 contractual restrictions,
binding on the Borrower;
(c) it is not in default under any other agreement to which it is a
party, nor is it in default in respect of any financial
commitment or obligation.
8.2 The Borrower undertakes to the Agent and the Banks that so long as any
amount is outstanding hereunder:
<PAGE>
-12-
(a) it will promptly inform the Agent on behalf of the Banks 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 Agent for distribution to the Banks copies
of (i) the annual audited accounts of itself, Nopal AS, Dynal AS
and Alpharma Inc. not later than 120 days after the end of each's
respective financial year (ii) the unaudited quarterly reports of
the same including balance sheets, profit and loss statements and
calculations of Value Adjusted Equity within 50 days after the
end of each calendar quarter and (iii) such other financial
information as the Agent may reasonably request;
(c) it will not make any further borrowings or enter into any
guarantee liabilities exceeding in aggregate NOK 5,000,000 or the
equivalent in other currency(ies) without the prior written
consent of the Agent on behalf of the Majority Banks;
(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 8.3 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;
(e) it will, in the case of a sale of the whole or any part of its
shares (or as the case may be convertible subordinated notes) in
either of Dynal AS or Nopal AS or Alpharma Inc., simultaneously
with such sale, apply all proceeds of such sale in repayment of
the Loan, and the Commitment shall be deemed to be partly
cancelled in accordance with Clause 2.5 above and be reduced
accordingly;
(f) it will, in the case of any redemption or repurchase by Alpharma
Inc. of the convertible subordinated notes in (as issued by)
Alpharma Inc., simultaneously with such redemption or repurchase
apply all amounts received by it pursuant to such redemption or
repurchase in repayment of the Loan, and the Commitment shall be
deemed to be partly cancelled in accordance with Clause 2.5 above
and be reduced accordingly.
<PAGE>
-13-
8.3 The Loans and all amounts outstanding hereunder, shall be secured by
the following in form and content satisfactory to the Agent:
(a) a pledge of the Borrower's shares in Nopal AS and of the
Borrower's shares in Dynal AS all as generally deposited with the
Agent in accordance with a declaration of pledge
(pantsettelseserklaering);
(b) a pledge over a total of 4,740,500 shares of class B stock in
Alpharma Inc. executed by AS Wangs Fabrik; and
(c) a pledge of up to 49.9 per cent of the aggregate convertible
subordinated notes in (as issued by) Alpharma Inc.
In the event of an early repayment in part of the Loan and partly
cancellation of the Commitment as set out in Clause 8.2 (e) and (f)
above, the Borrower and the Banks shall negotiate to agree upon a
reduction of the value of the security listed in (a), (b) and (c)
above proportionally to the amount of the early repayment and
cancellation which has taken place. A sale of pledged shares in Dynal
AS as described in Clauses 8.2 (e) and (a) shall give the Borrower an
exclusive right to have released such shares from security.
9 USD UNAVAILABILITY
9.1 In the event that on any Quotation date the Banks are unable to obtain
deposits in USD in the London Interbank Eurocurrency Market to the
fund a Drawing or the Loan, the Agent shall forthwith notify the
Borrower and until such notice is withdrawn the obligation of the
Banks to advance any Drawing shall be suspended. The Banks shall
endeavour to fund the Loan with USD from such other sources as may be
available to them and in event the rate of interest payable on such
amount shall be the aggregate of the Margin and such rate as the Banks
may from time to time certify as being the cost to them of funds in
USD.
9.2 In the event that the Banks are unable to fund such amount from
alternative sources, the Agent 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 Banks are 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
<PAGE>
-14-
amount on giving the Agent not less than 7 Banking Days' irrevocable
written notice.
If at any time when the Banks are funding the Loan from alternative
sources the Agent determines that USD deposits are available to them
in the London Interbank Eurocurrency Market the Agent 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 under Clause 5.1 shall be the aggregate of the
Margin and such rate as the Agent may certify as the rate at which the
Banks are able to obtain deposits for such period as aforesaid.
10 CHANGES IN CIRCUMSTANCES
10.1 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) any of the Banks incurs a cost as a result of its having entered
into this Agreement and/or performing its obligations hereunder;
or
(b) there is an increase in the cost to any of the Banks of
maintaining or funding its portion of the Commitment, the Loan or
any advances hereunder; or
(c) any of the Banks becomes liable for any new taxes (other than on
net income) calculated by reference to the Commitment or the
Loan; or
(d) any of the Banks 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 such Bank based on such Bank's obligations
hereunder; or
(e) any of the Banks' effective return hereunder is reduced in any
other manner;
<PAGE>
-15-
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 Agent either in the form of an increased margin
or in the form of an indemnification. The relevant Bank shall via the
Agent give the Borrower notice within a reasonable time of its
intention to claim compensation under this Clause 10.1 and shall
specify the form and amount of such compensation. The relevant Bank's
determination of the amount of compensation to be made under this
Clause 10.1 shall, absent manifest error be conclusive. The Borrower
shall be entitled to prepay such Bank's portion of the Loan at any
time following receipt of notice from the Agent as aforesaid on
giving not less than 7 Banking Days' irrevocable written notice. In
such event the Borrower shall nevertheless compensate such Bank for
such requested indemnification for the period from its receipt of
notice from the Agent up to and including the date of prepayment.
10.2 In the event that it shall be unlawful for any Bank to make available
its portion of the Commitment or maintain or fund its portion of the
Loan hereunder then such Bank's obligations shall terminate and all
amounts owing by the Borrower to such Bank shall become due and
payable on demand by such Bank through the Agent.
11. FEE AND EXPENSES
11.1 The Borrower shall pay to the Agent:
(a) for the account of the Agent, on the date hereof, an arrangement
fee as set out in a separate letter from the Agent to the
Borrower;
(b) for the account of the Banks, a commitment fee in respect of the
undrawn part of Commitment A and Commitment B respectively for
the period from the date hereof (for each Bank from the date
when such Bank was committed, as the case may be) 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 computed in NOK
and/or in USD respectively and shall be paid quarterly in
arrears commencing on the date hereof and finally on the last
day of such period as aforesaid;
<PAGE>
-16-
(c) upon demand, all expenses (including internal and external legal
and collateral fees of the Agent) incurred by the Agent in
connection with the preparation, execution or termination of this
Agreement and any other documents delivered pursuant to this
Agreement or incurred by the Agent and the Banks in connection
with the preservation or enforcement of any rights hereunder and
thereunder.
11.2 The obligations of the Borrower in Clause 11.1 (c) above shall survive
the Final Maturity Date.
12. PAYMENTS
12.1 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 would thereby fail in a new calendar
month in which event it shall be the preceding Banking Day.
12.2 In the event that any payment to be made hereunder by the Borrower to
any Bank is not received by the Agent on the due date therefor,
interest will be charged by such 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 such Bank
are offered to such Bank in the London Interbank Eurocurrency Market
at approximately 11:00 a.m. London time on the due date for payment
and on each succeeding Banking Day until payment in full of the amount
due is received by such Bank; provided that it the Agent 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 12.2 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.
12.3 All payments to be made by the Borrower hereunder shall be made
without set-off or counterclaim.
<PAGE>
-17-
12.4 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 Agent for
account of the Banks such additional amounts as may be necessary to
ensure that the Banks receive a net amount equal to that which they
would have received had such payment not been made subject to any
Taxes, and (ii) deliver to the Agent within 10 Banking Days of any
request by it an official receipt in respect of the payment of any
Taxes so deducted.
12.5 If any amount of principal is, for any reason whatsoever, unpaid on a
day other than the last day of the then current Interest Period
relating to such amount, the Borrower shall pay to the Agent for
account of the Banks on request such amount as may be necessary to
compensate the Banks for any loss or premium or penalty incurred by
them in respect of the liquidation or re-employment of funds borrowed
for the purpose of maintaining the amount repaid.
12.6 If the Agent pays any amount to a Bank or the Borrower which has not
but ought to have been paid to it by the Borrower or a Bank (as the
case may be) then unless such amount is paid within 3 Banking Days of
the due date such Bank or the Borrower (as the case may be) shall
refund such amount to the Agent on demand. At the time such amount is
paid or refunded the person paying the same shall also pay interest to
the Agent on such amount at such rate per annum as reflects the cost
to the Agent of funding such amount during the period from time to
time when such amount ought to have been paid to the time when such
amount was actually paid, provided, however, that this shall not
reduce the obligations of the Borrower according to Clause 12.2 above.
12.7 Interest, commitment fee and any other payments hereunder of an annual
nature shall accure from day to day and be calculated on the actual
number of days elapsed and on the basis of a 360 day year.
13. EVENTS OF DEFAULT
13.1 The obligations of the Banks hereunder shall terminate forthwith and
any amount outstanding shall become immediately due and payable
together with interest thereon and the Banks may exchange all or part
of any outstanding amounts hereunder to NOK or USD as the case may be
or enforce their rights under this
<PAGE>
-18-
Agreement and the Security Documents in the manner and order they deem
appropriate, if any of the following events occurs and the Agent, upon the
instruction of the Banks, gives notice to the Borrower:
(a) If the Borrower fails to pay any sum due hereunder on the due date
and, 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
Agent 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
(f) If the 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 judgement is given
by any court for the liquidation, winding-up or reorganization 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 Agent
on behalf of the Banks); or
<PAGE>
-19-
(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 Agent; or
(k) if there is any material, in the opinion of the Banks, change of
ownership in the Borrower or in AS Wangs Fabrik without the prior
written approval of the Agent on behalf of the Banks; or
(l) if Value Adjusted Equity is or becomes less than twice the
Commitment any time hereunder, provided that all relevant figures
shall be determined in accordance with Clause 7.1 hereof;
(m) if a situation arises which, in the opinion of the Banks will
prevent fulfilment by the Borrower of its obligations hereunder.
13.2 Clause 13.1 (d) - (i) shall also apply with respect to AS Wangs
Fabrik.
14. TRANSFER
14.1 Any 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 by giving not less than 10 Banking Days' prior
written notice to the Agent, which shall promptly notify the Borrower.
In event of transfer references herein to such Bank shall be construed
as references to its transferee or transferees to the extent
necessary.
15. AGENCY
15.1 Each Bank authorises the Agent to take such action on its behalf and
to exercise such powers as are specifically delegated to it by the
terms hereof together with all such powers as are reasonably
incidental thereto. The relationship between the Agent and each Bank
is that of agent and principal only, and nothing herein shall
<PAGE>
-20-
(nor shall it be construed so as to) constitute the Agent a trustee
for any Bank or impose on it any duties or obligations other than
those for which express provision is made herein.
15.2 Except as expressly provided herein the Agent shall distribute
promptly to the Banks all sums received from the Borrower rateably
in proportion to the amount of each Bank's participation in the
Facility.
15.3 The Agent will promptly advise each Bank of any notice received by
it from the Borrower hereunder. The Agent shall not be under any
obligation towards any Bank to ascertain or enquire as to the
performance or observance of any of the terms or conditions hereof
or of the Security Documents to be performed or observed by any
other party hereto or thereto.
15.4 Each Bank shall indemnify, to the extent not reimbursed by the
Borrower, the Agent rateably according to the amount of its
participation in the Facility against any loss, expenses (including
legal fees) or liability (except such as results from the Agent's
own gross negligence or wilful misconduct), which the Agent may
suffer or incur in connection with implementation, administration or
enforcement of this Agreement or any Security Document.
15.5 In performing its duties and exercising its powers hereunder the
Agent will be entitled to rely on (i) any communication believed by
it to be genuine and to have been sent or signed by the person by
whom it purports to have been sent and signed and (ii) the opinions
and statements of any professional advisers selected by it in
connection herewith and shall not be liable to any other party
hereto for any consequence of any such reliance.
15.6 The Agent takes no responsibility for the truth of any
representations made herein nor for the adequacy or enforceability
of this Agreement and neither the Agent (except in the case of gross
negligence or wilful misconduct) nor any of its directors, officers
or employees shall be liable for any action taken or omitted by it
or any of them.
15.7 Notwithstanding the agency hereinbefore constituted the Agent may
without liability to account make loans to, accept deposits from and
generally engage in any kind of banking or trust business with the
Borrower.
<PAGE>
-21-
15.8 Each Bank acknowledges that it has taken and will take such
independent action and make such investigations as it deems necessary
to inform itself as to the financial condition and affairs of the
Borrower.
16. NOTICES AND TIME
16.1 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 Agent, 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 Skayen, 0212 Oslo
telefax no. 22 52 91 50
Attention: Sverre Bjertnes
(c) if to the Banks, at their respective addresses listed in Exhibit
1 hereto;
or to such other address as one party may hereafter notify to the
other parties.
16.2 Communications sent by letter or telefax shall be affective upon
receipt. Any communication by telefax from the Borrower to the Agent
shall be confirmed by letter if so requested by the Agent.
16.3 No failure or delay on the part of the Agent or the Banks to exercise
any power or right 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 cummulative and are not exclusive of any
remedies provided by law.
17. GOVERNING LAW AND JURISDICTION
17.1 This Agreement shall be governed by and construed in accordance with
Norwegian law.
17.2 The Borrower hereby irrevocably submits to the non-exclusive
jurisdiction of the Norwegian courts, the venue to be elected by the
Agent.
<PAGE>
-22-
The Borrower
- ------------
AL INDUSTRIER AS
By /s/Sveere Bzertnbs Roald Zltun
-------------------------------------------
Name in block letters U.K DIR ADM DIR
-------------------------
Title SVEERE BZERTNBS ROALD ZLTUN
-----------------------------------------
The Banks
- ---------
P.P. DEN NORSKE BANK ASA
By /s/ Erik Borgen
--------------------------------------------
Name in block letters ERIK BORGEN
-------------------------
DEPUTY MANGING DIRECTOR/
Title HEAD OF CORPORATE DIVISION
-----------------------------------------
The Agent:
- ---------
p.p. DEN NORSKE BANK ASA
By /s/ Erik Boreen
--------------------------------------------
Name in block letters ERIK BORGEN
-------------------------
DEPUTY HANGING DIRECTOR
Title HEAD OF CORPORATE DIVISION
-----------------------------------------
<PAGE>
-23-
EXHIBIT 1
BANK COMMITMENTS
----------------
Commitment A Commitment B
Den norske Bank ASA NOK 166,000,000 USD 73,000,000
N-D 107 Oslo
Norway
Telefax: 22 48 10 46
Attn: Credit Administration
<PAGE>
-24-
EXHIBIT 2
F O R M O F
D R A W D O W N NO 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 inter alia ourselves as Borrower and Den norske Bank
ASA as Agent. 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 ................. 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, not of applicable fees and expenses described in Clause 11, shall
be transferred to the account 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 storementioned date, by
reasons beyond the control of the Agent and/or the Banks, we hereby undertake to
reimburse you as Agent and all the Banks for any and all costs incurred,
including but not limited to interest.
Yours faithfully,
AL INDUSTRIER AS
<PAGE>
EXHIBIT II
4,740,500 Shares of Alpharma Inc.
Share Pledge Agreement
----------------------
This SHARE PLEDGE AGREEMENT, dated March 30, 1998 (this "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 ("DnB"), a banking corporation organized and existing under the
---
laws of the Kingdom of Norway, as agent (in such capacity, the "Secured Party")
-------------
for itself and the banks and financial institutions listed on Exhibit 1 to the
Loan Agreement defined below (collectively, the "Lenders").
-------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, AL Industrier AS, a corporation organized and existing under
the laws of the Kingdom of Norway (the "Borrower"), has entered into the Loan
--------
Facility Agreement, dated March 30, 1998 (the "Loan Agreement"), with the
--------------
Secured Party and the Lenders;
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 and the Lenders to enter into the Loan
Agreement and to perform their respective obligations thereunder, has agreed 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 8.3(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 Lenders to extend the Loan to the Borrower, the Secured Party and the
Pledgor hereby agree as follows:
<PAGE>
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").
------------------
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, so long as an Event of Default shall have occurred and be continuing (i)
to transfer to or to register in the name of the Secured Party or its nominee
any or all of the Pledged Collateral, subject to the restrictions on Transfer
set forth in Section 12(a)(ii) hereof, and (ii) to exchange certificates or
instruments representing or evidencing the Pledged Collateral for certificates
or instruments of smaller or larger denominations.
(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) Voting Rights. While the Pledged Shares are in the 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
2
<PAGE>
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 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 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
3
<PAGE>
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; and (i) 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 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 Pledged Collateral to secure the Obligations. Any
sums paid upon or in respect of the Pledged Shares upon the liquidation or
dissolution of Alpharma shall similarly be paid over to the Secured Party to be
held by it as additional Pledged 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
4
<PAGE>
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
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 cure periods under the Loan
Agreement (the "Default Cure Period") forthwith sell,
-------------------
5
<PAGE>
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, (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 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
Alpharma.
(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, the issuer of the Pledged
--------------
Shares. 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 Shares 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
6
<PAGE>
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 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
7
<PAGE>
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 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
8
<PAGE>
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 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.
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,
9
<PAGE>
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 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 the Class A shares of common stock of Alpharma,
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
10
<PAGE>
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 hereunder, and (iv) the failure by Pledgor to perform or observe
any of the provisions hereof. All obligations provided for in this Section 17
shall survive the repayment of the Loan, the termination of this Agreement and
the Loan Agreement, and the discharge or repayment of the Obligations.
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 herefrom, 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, as Agent
P.O. Box 1171 Sentrum
N-0107 Oslo
Norway
Telefax No.: +47 22 48 10 46
11
<PAGE>
Attention: Credit Administration
If to the Pledgor, at:
Wangs Fabrik AS
P.O. Box 158 Skyen
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
12
<PAGE>
such right, power or remedy, or be construed to be a waiver of 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. To the extent that under the laws of the Kingdom of Norway, Norwegian
laws are not applicable to the creation and perfection of the security interest
in the Pledged Shares granted hereby, the parties hereto hereby agree that
Articles 8 and 9 of the Uniform Commercial Code as in effect in the State of
Delaware on the date of this Agreement govern such creation and perfection.
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
13
<PAGE>
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 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>
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: ____________________
Name:
Title:
DEN NORSKE BANK ASA, as Agent
By: ______________________
Name:
Title:
Attachment: Exhibit 1
Description of Pledged Securities
<PAGE>
Exhibit 1
---------
to Share
--------
Pledge Agreement
----------------
The Securities pledged to the Secured Party are Four Million Seven
Hundred Forty Thousand Five Hundred (4,740,500) 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,
evidenced by the following share certificate[s]:
Certificate No. Date of Issue No. of Shares
- --------------- ------------- -------------
1 3/25/97 2,000,000
19 3/17/98 2,740,500
<PAGE>
EXHIBIT III
[EXECUTION VERSION]
$33,857,150 principal amount of 5 3/4% Convertible
(Class B) Subordinated Notes Due 2005 of Alpharma Inc.
Note Pledge Agreement
---------------------
This NOTE PLEDGE AGREEMENT, dated March 30, 1998 (this "Agreement"),
---------
is made and entered into by and between AL Industrier AS, a corporation
organized and existing under the laws of the Kingdom of Norway (the "Pledgor"),
-------
and Den norske Bank ASA ("DnB"), a banking corporation organized and existing
---
under the laws of the Kingdom of Norway, as agent (in such capacity, the
"Secured Party") for itself and the banks and financial institutions listed on
- --------------
Exhibit 1 to the Loan Agreement defined below (collectively, the "Lenders").
-------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Pledgor has entered into the Loan Facility Agreement,
dated March 30, 1998 (the "Loan Agreement"), with the Secured Party and the
--------------
Lenders;
WHEREAS, all capitalized terms used herein and not defined herein
shall have the respective meanings accorded to them in the Loan Agreement;
WHEREAS, in order to induce the Secured Party and the Lenders to enter
into the Loan Agreement and to perform their respective obligations thereunder,
the Pledgor has agreed to enter into this Agreement and to pledge the Pledged
Notes (as such term is hereinafter defined) in order to secure the Obligations
(as such term is hereinafter defined); and
WHEREAS, pursuant to Clause 8.3(c) of the Loan Agreement, the Pledgor
has agreed 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 Notes") in order to
-------------
secure its obligations under the Loan Agreement;
NOW THEREFORE, in consideration of the premises and in order to induce
the Lenders to extend the Loan to the Pledgor, 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,
<PAGE>
the Pledged Notes, and in any instruments which evidence such Pledged Notes,
and, except as expressly set forth in Section 3(c) of this Agreement, in all
proceeds thereof and therefrom (collectively, the "Pledged Collateral").
------------------
SECTION 2. Security for Obligations. This Agreement secures the
------------------------
payment and performance of all obligations of the Pledgor 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 are referred
to in this Agreement as the "Obligations").
-----------
SECTION 3. Delivery of Pledged Collateral.
------------------------------
(a) Delivery of Pledged Notes. All instruments which represent or
-------------------------
evidence the Pledged Notes shall, on the later to occur of (i) the execution and
delivery of this Agreement by the Pledgor, or (ii) the issuance of the Pledged
Notes by Alpharma Inc., a Delaware corporation ("Alpharma"), 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, so long as an Event of Default shall have occurred and be continuing (i)
to transfer to or to register in the name of the Secured Party or its nominee
any or all of the Pledged Collateral, subject to the restrictions on Transfer
set forth in Section 12(a)(ii) hereof, and (ii) to exchange instruments
representing or evidencing the Pledged Collateral for instruments of smaller or
larger denominations.
(b) Notice to Alpharma Inc. Pledgor shall, upon execution and
----------------------
delivery of this Agreement, notify the issuer of the Pledged Notes, Alpharma, in
writing of its pledge of the Pledged Notes 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 Notes
contemplated under this Agreement, and shall obtain the written consent and
agreement thereto of Alpharma.
(c) Rights under Pledged Notes. While the Pledged Notes are in the
--------------------------
possession of the Secured Party and unless and until an Event of Default shall
have occurred, the Pledgor shall be entitled to receive payments of principal,
premium (if any), and interest on the Pledged Notes subject to the lien and
security interest granted to the Secured Party, provided, however, that the
-------- -------
Pledgor shall not be entitled to exercise, or permit any other party to
exercise, any other right under the
2
<PAGE>
Pledged Notes, including, without limitation, any right of conversion,
redemption, repurchase or exchange, unless, simultaneously with such exercise,
(i) in the case of any conversion or exchange of the Pledged Notes, the Pledgor
will, at its expense, 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 of the Secured Party in the shares, notes or other
securities received by the Pledgor upon any such conversion or exchange of the
Pledged Notes, or (ii) in the case of any redemption or repurchase of the
Pledged Notes, any amounts received by the Pledgor pursuant to such redemption
of repurchase shall be applied by the Pledgor in prepayment of the Loan in
accordance with Section 8.2(f) of the Loan Agreement.
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 Notes, 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 Notes 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 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 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
3
<PAGE>
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 Notes have been duly authorized,
executed, and delivered and authenticated by the Trustee and consideration equal
to the face amount thereof has been paid to Alpharma; (g) the use of proceeds
received by the Pledgor under the Loan Agreement will not violate 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
Notes 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 Notes 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 Notes; and (i) the Pledgor is not
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 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. Rights under Pledged Notes. Upon the occurrence and
--------------------------
during the continuance of an Event of Default, all rights of Pledgor under the
Pledged Notes 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 rights.
SECTION 7. Other B Notes. If, while the Loan Agreement is in effect,
-------------
the Pledgor shall become entitled to receive any other B Note in addition to, in
substitution of, or in exchange for, any Pledged Notes, 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 49.9% of the same forthwith
to the Secured Party in accordance with the
4
<PAGE>
terms and provisions of this Agreement, as additional Pledged Collateral to
secure the Obligations. All instruments which represent or evidence any B Note
in addition to, in substitution of, or in exchange for, any Pledged Notes shall,
upon the issuance thereof by Alpharma, 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. Any sums paid upon or in respect of the
Pledged Notes upon the liquidation or dissolution of Alpharma shall similarly be
paid over to the Secured Party to be held by it as additional Pledged 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
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 payment of principal, premium (if any), and interest 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
5
<PAGE>
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 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, (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 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 Alpharma.
(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, the issuer of the Pledged
--------------
Notes. As such, the Secured Party acknowledges that any Transfer of such
Pledged Notes 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 Notes 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
6
<PAGE>
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 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
7
<PAGE>
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 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 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;
8
<PAGE>
(iii) to make available to noteholders, 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 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
9
<PAGE>
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 Pledgor under
Section 6 of the Note Purchase Agreement dated March 5, 1998, between the
Pledgor and Alpharma. 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 Notes 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 Notes, 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 of the fact that
the price at which the Pledged Notes 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
the Convertible (Class A) Subordinated Notes Due 2005 of Alpharma, even if the
Secured Party accepts the first offer received and does not offer the Pledged
Notes 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
10
<PAGE>
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 hereunder, and (iv) the
failure by Pledgor to perform or observe any of the provisions hereof. All
obligations provided for in this Section 17 shall survive the repayment of the
Loan, the termination of this Agreement and the Loan Agreement, and the
discharge or repayment of the Obligations.
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;
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(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 herefrom, 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, as Agent
P.O. Box 1171 Sentrum
N-0107 Oslo
Norway
Telefax No.: +47 22 48 10 46
Attention: Credit Administration
If to the Pledgor, at:
AL Industrier AS
P.O. Box 158 Skyen
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,
12
<PAGE>
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 any default on the part of the Pledgor 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. To the extent that under the laws of the Kingdom of Norway, Norwegian
laws are not applicable to the creation and perfection of the security interest
in the Pledged Notes granted hereby, the parties hereto hereby agree that
Articles 8 and 9 of the Uniform Commercial Code as in effect in the State of
Delaware on the date of this Agreement govern such creation and perfection.
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
13
<PAGE>
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 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>
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.
AL INDUSTRIER AS
By: ____________________
Name:
Title:
DEN NORSKE BANK ASA, as Agent
By: ______________________
Name:
Title:
Attachment: Exhibit 1
Description of Pledged Notes
<PAGE>
Exhibit 1
---------
to Note Pledge Agreement
------------------------
The notes pledged to the Secured Party are Thirty-Three Million Eight
Hundred Fifty-Seven Thousand One Hundred Fifty Dollars ($33,857,150) principal
amount of 5 3/4% Convertible (Class B) Subordinated Notes due 2005 issued by
Alpharma Inc. (formerly A.L. Laboratories, Inc.), a corporation organized and
existing under the laws of the State of Delaware, evidenced by the following
instruments:
Note No. Date of Issue Principal Amount Issue Price
- -------- ------------- ---------------- -----------
2 3/30/98 $33,857,150 $33,857,150
<PAGE>
EXHIBIT IV
FINAL EXECUTION COPY
====================
NOTE PURCHASE AGREEMENT
Note Purchase Agreement dated as of March 5, 1998 by and between Alpharma
Inc., a Delaware corporation, ("Alpharma") and A. L. Industrier AS, a Norwegian
corporation, ("Industrier").
WHEREAS Alpharma currently has two classes of authorized and issued common
stock, consisting of Class A Common Stock, $.20 par value per share, (the "Class
A Stock") and Class B Common Stock, $.20 par value per share, (the "Class B
Stock"); and
WHEREAS Industrier owns a majority of the outstanding Class B Stock through
its wholly-owned subsidiary, Wangs Fabrik AS ("Wangs"); and
WHEREAS Alpharma desires to strengthen its financial position and support
certain corporate strategies through the offering and issuance of Convertible
Subordinated Notes through investment bankers (the "Initial Purchasers") to
certain institutional investors and other qualified purchasers (the "Offering")
and has requested Industrier to increase its investment in Alpharma through the
purchase of similar Convertible Subordinated Notes; and
WHEREAS the Board of Directors of Alpharma has approved the Offering of up
to $115,000,000 principal amount of Convertible Subordinated Notes having the
terms (except as inapplicable) described in the portion of the draft of Offering
Memorandum attached as Appendix A hereto (the "A Notes") and the sale and
issuance to Industrier of up to $68,000,000 principal amount of a Convertible
Subordinated Note having substantially the same rights, terms and conditions as
the A Notes and ranking pari passu with the A Notes but being automatically
convertible into Class B Stock instead of Class A Stock upon the conversion of a
minimum percentage of outstanding A Notes (the "B Note"); and
WHEREAS Industrier has agreed to make an additional investment in Alpharma
by subscribing for and purchasing a newly issued B Note on the terms set forth
herein;
NOW THEREFORE the parties agree as follows:
1. Subscription for B Note. Industrier hereby irrevocably subscribes for
-----------------------
and agrees to purchase from Alpharma, and Alpharma hereby agrees to issue and
sell to Industrier (or if designated by Industrier, Wangs), (i) a B Note in the
principal amount of $59,000,000 for an aggregate consideration of $59,000,000
(the "Base Subscription Consideration") and (ii) if the Initial Purchasers in
the Offering exercise their overallotment option, an additional B Note (the
"Overallotment Note") in the principal amount equal to the Overallotment Amount
for an aggregate consideration equal to the sum of the Overallotment Amount plus
accrued interest on such Overallotment Note from the date interest begins
accruing on such Overallotment Note. The
<PAGE>
Overallotment Amount shall equal the product (rounded to the nearest $100,000)
of (x) the percentage derived by multiplying the principal amount of A Notes
purchased by the Initial Purchasers pursuant to their overallotment option by
the principal amount of the A Notes (excluding notes issued pursuant to the
overallotment option) initially purchased by the Initial Purchasers in the
Offering, multiplied by (y) $59,000,000. For example, if the Initial Purchasers
purchase $100,000,000 A Notes in the Offering and then purchase $10,000,000 of A
Notes pursuant to their overallotment option, the Overallotment Amount shall be
$5,900,000. The form of B Notes shall be substantially the same as Appendix B
hereto, with the interest rate, premium and automatic conversion price to be
inserted being the same as the interest rate, premium and conversion price of
the A Notes. Such terms of the A Notes shall be determined at the normal
pricing in connection with the Offering of the A Notes.
2. Payment of Subscription Consideration and Issuance of B Notes.
-------------------------------------------------------------
a. Industrier shall pay the Base Subscription Consideration by wire
transfer to Alpharma's account at such bank as Alpharma may designate in United
States funds on the same date that the A Notes are sold by Alpharma in the
Offering (the "Payment Date") and, if specified by Alpharma, such funds shall be
held in escrow pursuant to the terms of a mutually satisfactory escrow agreement
until, and subject to, the approval required by the rules of the New York Stock
Exchange for the issuance of the B Notes pursuant to this Agreement. Upon
receipt of the Base Subscription Consideration, Alpharma shall issue and deliver
to Industrier a B Note in the principal amount of $59,000,000 in the name of
Industrier (or Wangs) or, if Alpharma has requested payment into escrow as
aforesaid, shall deliver such B Note into such escrow.
b. Industrier shall pay the consideration for the Overallotment Note
by wire transfer to Alpharma's account at such bank as Alpharma may designate in
United States funds on the same date that the A Notes are sold pursuant to the
overallotment option; provided that Alpharma shall notify Industrier promptly
upon receiving notice that the overallotment option with respect to the A Notes
has been exercised and further provided that such funds shall be held in the
aforementioned escrow if the Base Subscription Consideration is then held in
such escrow. Upon receipt of such consideration, Alpharma shall issue and
deliver the Overallotment Note to Industrier or, if such consideration is held
in escrow, shall deliver such Overallotment Note into such escrow.
c. The B Notes shall contain appropriate legends to reflect
applicable securities law limitations and the existing Control Agreement, as
amended, between Industrier and Alpharma.
3. Conditions to Purchase of B Note.
--------------------------------
a. The obligation of Industrier to purchase the B Notes as herein
provided is subject only to the conditions (which may be waived by Industrier)
that (i) Industrier shall receive a written legal opinion of Kirkland & Ellis
dated as of the Payment Date stating that (A) the B Notes has been properly
authorized and will, when issued in accordance herewith, be duly issued and
enforceable in accordance with its terms and (B) the shares of Class B Stock,
when issued upon
2
<PAGE>
automatic conversion of the B Notes, will be properly authorized and validly
issued shares of Class B Stock, with the rights, privileges and limitations set
forth in Alpharma's Certificate of Incorporation, as amended; and (ii) that the
A Notes were issued and sold by Alpharma pursuant to the Offering.
b. The obligation of Alpharma to issue the B Notes as herein
provided is subject only to the conditions (which may be waived by Alpharma)
that (i) the A Notes have been issued and sold by Alpharma pursuant to the
Offering; and (ii) the issuance and sale of the B Notes to Industrier shall have
been approved by the stockholders of Alpharma if required in accordance with the
rules of the New York Stock Exchange. Alpharma will use its reasonable best
efforts to cause all conditions in this paragraph 3b to be fulfilled.
4. Representations, Warranties and Consents .
----------------------------------------
a. Industrier represents and warrants that it has received all
information which it has requested regarding financial, operational, personnel
and other developments relating to Alpharma, including copies of Alpharma's
report on form 10-K for 1996, its draft form 10-K for 1997 (with audited
financial statements for 1997), its reports on form 10-Q for the fiscal quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997, and information
regarding recent discussions regarding possible acquisitions and other corporate
developments. Industrier acknowledges that its subscription the for B Note
hereunder is unconditional and irrevocable (except as provided in section 3a
above) and shall not be affected in any way by any financial, operational,
personnel or other development (whether favorable or unfavorable) affecting or
threatening to affect Alpharma. Industrier further acknowledges that certain
information provided to Industrier regarding Alpharma is confidential and that
through certain common officers and/or directors Industrier has received or may
in the future receive confidential information relating to Alpharma, and
Industrier hereby agrees to keep all such information confidential and to use
reasonable effort to cause each officer, director and employee of Industrier to
keep such information confidential.
b. Industrier represents and warrants that (i) this Agreement has
been duly authorized, executed and delivered on behalf of Industrier and is a
valid and binding agreement of Industrier, enforceable in accordance with its
terms, and (ii) Industrier (or Wangs) will acquire the B Notes for investment
and without any intent to distribute or resell any of the B Notes or the Class B
Stock into which the B Notes may be converted. Industrier hereby agrees that
the B Notes (and the Class B Stock into which the B Notes may be converted) are
subject in all respects to the Control Agreement, as amended, between Industrier
and Alpharma, provided that the B Notes may be pledged in whole or part on the
same basis that shares of Class B Stock may be pledged under the Control
Agreement so long as the total number of shares of Class B Stock that are
pledged and the number of shares of Class B Stock into which any pledged B Notes
may be converted shall not aggregate more than 49.9% of the total of the number
of shares of Class B Stock outstanding plus the number of shares of Class B
Stock into which the B Notes may be converted. Industrier further agrees not to
sell or transfer the B Notes or any shares of Class B Stock issuable on
conversion thereof except in compliance with United States securities laws.
3
<PAGE>
c. Alpharma represents and warrants that (i) this Agreement has been
duly authorized, executed and delivered on behalf of Alpharma and is a valid and
binding agreement of Alpharma, enforceable in accordance with its terms; (ii)
the B Notes have been properly authorized and, when issued pursuant hereto, will
be duly issued and enforceable in accordance with their terms; (iii) the shares
of Class B Stock, when issued upon conversion of the B Notes, will be properly
authorized and validly issued shares of Class B Stock, with the rights,
privileges and limitations set forth in Alpharma's Certificate of Incorporation,
as amended; and (iv) the execution and delivery of this Agreement by Alpharma
and its performance of its obligations hereunder will not breach, violate or
cause a default under any agreement or commitment binding on Alpharma or
Alpharma's Bylaws or Certificate of Incorporation as amended.
5. Right to Exchange B Note.
------------------------
a. Alpharma agrees that Industrier shall have the right, exercisable
at any time after October 31, 1999, upon not less than ten days prior written
notice to Alpharma, to exchange all or part of the B Notes for a like principal
amount of A Notes (with interest payment terms such that the aggregate interest
payments under the B Notes and A Notes shall not be enlarged or diminished for
any period during which such exchange takes place) which A Notes shall be issued
pursuant to and governed by the indenture governing the A Notes issued pursuant
to the Offering and such A Notes shall continue to be subject to all securities
law transfer restrictions applicable to the B Notes until such A Notes have been
effectively registered under the Securities Act of 1933 pursuant to the
registration rights agreement referred to in paragraph 6 of this Agreement.
b. Industrier agrees that its right to cause such exchange of B
Notes for A Notes shall only be exercised for the purpose and with the intention
of transferring such A Notes promptly after the exchange to one or more
transferees unaffiliated with Industrier and Alpharma and that, pending such
transfer, any A Notes held by Industrier shall not be convertible in Class A
Stock at the holder's discretion but shall be automatically converted into Class
A Stock upon the same event and at the same time as the B Notes for which such A
Notes had been exchanged shall have been automatically converted. Following
such transfer to an unaffiliated transferee, the A Notes shall be convertible at
the discretion of the holder in the same manner and with the same effect as
other A Notes issued under the Indenture. Alpharma agrees to use its reasonable
best
efforts to cause the Class A Notes issued in exchange for the B Notes (and the
Class A Stock issuable upon conversion thereof) to be listed on the New York
Stock Exchange as promptly as practicable after receiving a request for
registration pursuant to paragraph 6 of this Agreement.
6. Registration Rights. Alpharma agrees that Industrier (or Wangs) as
-------------------
holder of the B Notes shall be entitled to cause Alpharma at any time after
November 1, 1999 to register under the Securities Act of 1933, as amended, any
of the A Notes received by Industrier or its subsidiaries upon any exchange
provided for in paragraph 5 hereof (or any Class A Stock into which such A Notes
are convertible). Such registration rights shall be set forth in a mutually
agreeable registration rights agreement which provides for : (i) one demand
registration of at least $30,000,000 of securities; (ii) payment by Alpharma of
all reasonable expenses except underwriting commissions; (iii) Alpharma's right
to defer registration for up to six months for good corporate purposes; (iv) the
4
<PAGE>
selection of mutually acceptable managing underwriters; (v) unlimited piggy-back
registration if acceptable to the managing underwriters and not adverse to
Alpharma's interest; (vi) non-transferability of the registration rights and
(vii) such other terms and conditions as are customary in private placement
registration rights agreements. The registration rights agreement shall be
consistent with the registration rights agreement referred to in the Stock
Subscription Agreement dated February 10, 1997, and shall be prepared and agreed
to as promptly as practicable.
7. Miscellaneous
-------------
a. No Third Party Beneficiaries. This Agreement shall not confer
----------------------------
any rights or remedies upon any person other than the parties and their
respective successors and permitted assigns.
b. Entire Agreement. This Agreement (including the appendices
----------------
hereto and documents referred to herein) constitutes the entire agreement
between the parties with respect to the B Notes and supersedes any prior
understandings, agreements, or representations by or among the Parties, written
or oral, to the extent they related in any way to the subject matter hereof.
c. Succession and Assignment. This Agreement shall be binding upon
-------------------------
and inure to the benefit of the parties named herein and their respective
successors and permitted assigns. Neither Party may assign either this Agreement
or any of its rights, interests, or obligations hereunder without the prior
written approval of the other party; provided, however, that the Buyer may
-------- -------
assign any or all of its rights and interests (but not its obligations)
hereunder to Wangs.
d. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
e. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the domestic laws of the State of Delaware without giving
effect to any choice or conflict of law provision or rule (whether of this State
of Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware.
f. Amendments and Waivers. No amendment of any provision of this
----------------------
Agreement shall be valid unless the same shall be in writing and signed by each
party hereto. No waiver by any party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
* * *
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Note
Purchase Agreement as of the date first above written.
ALPHARMA INC.
By:____________________________
Its:___________________________
A. L. INDUSTRIER AS
By:___________________________
Its:__________________________
6
<PAGE>
AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT
Amendment No. I dated as of March 25, 1997 to Note Purchase Agreement dated
as of March 5, 1998 (the "Note Purchase Agreement") by and between Alpharma
Inc., a Delaware corporation ("Alpharma"), and A. L. Industrier AS, a Norwegian
corporation ("Industrier"). Capitalized terms used herein and not otherwise
defined have the meanings given to them in the Note Purchase Agreement.
WHEREAS, in view of the increase of size of the offering of the A Notes,
the parties wish to amend the Note Purchase Agreement to eliminate references to
the Overallotment Note and to provide that the entire B Note, in the principal
amount of $67,850,000, will be purchased concurrently with the closing of the
offering of the A Notes.
NOW THEREFORE, the parties agree as follows:
1 . Paragraph I of the Note Purchase Agreement is amended and restated in
its entirety as follows:
"Subscription for B Note. Industrier hereby irrevocably subscribes for
--------------------
and agrees to purchase from Alpharma, and Alpharma hereby agrees to
issue and sell to Industrier (or if designated by Industrier, Wangs) a B
Note in the principal amount of $67,850,000 for an aggregate
consideration of $67,850,000 (the "Base Subscription Consideration").
The form of B Notes shall be substantially the same as Appendix B
hereto, with the interest rate, premium and automatic conversion price
to be inserted being the same as the interest rate, premium and
conversion price of the A Notes. Such terms of the A Notes shall be
determined at the normal pricing in connection with the Offering
of the A Notes."
2. Paragraph 2a of the Note Purchase Agreement is amended to delete
"$59,000,000" and replace it with "$67,850,000."
3. Paragraph 2b of the Note Purchase Agreement is deleted.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1
to the Note Purchase Agreement as of the date first above written.
ALPHARMA INC.
By:__________________________
Its:
A.L. INDUSTRIER AS
By:__________________________
Its:
2
<PAGE>
EXHIBIT V
ALPHARMA INC.
THIS NOTE WAS ORIGINALLY ISSUED ON MARCH 30, 1998 AND SUCH ISSUANCE WAS NOT
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE OR OTHER SECURITIES LAW. NEITHER THIS NOTE NOR THE
CLASS B COMMON STOCK OBTAINABLE UPON CONVERSION HEREOF MAY BE OFFERED OR
SOLD, PLEDGED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE OR
OTHER SECURITIES LAW COVERING SUCH SECURITY OR PURSUANT TO AN EXEMPTION
FROM SUCH REGISTRATION REQUIREMENT. THE TRANSFER AND EXERCISE OF THIS NOTE
AND THE COMMON STOCK OBTAINABLE UPON CONVERSION HEREOF ARE ALSO SUBJECT TO
THE CONDITIONS SPECIFIED IN THE CONTROL AGREEMENT, DATED AS OF FEBRUARY 7,
1986 (AS AMENDED AND MODIFIED FROM TIME TO TIME), BETWEEN THE ISSUER HEREOF
AND THE HOLDER.
5 3/4% CONVERTIBLE (CLASS B) SUBORDINATED NOTE DUE 2005
ALPHARMA INC., a Delaware corporation (herein called the "Company"), for
value received, hereby promises to pay to A.L. INDUSTRIER A.S. or assigns, the
principal sum of_______________________ on April 1, 2005, and to pay interest
thereon as provided below, until the principal hereof is paid or duly provided
for. The right to payment of principal, premium and interest is subordinated to
the rights of Senior Indebtedness as set forth in the Indenture referred to
below. The principal hereof may be automatically converted into shares of Class
B Common Stock, $.20 par value per share ("Class B Stock"), of the Company as
provided below.
1. Interest. The Company promises to pay interest on the principal
--------
amount of this Note at the rate of 5 3/4% per annum. The Company will pay
interest semi-annually on April 1 and October 1 of each year commencing October
1, 1998. Interest on this Note will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of this
Note. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment. The Company will pay interest on this Note to the
-----------------
holder hereof at the close of business on the applicable interest payment date.
The Holder of this Note must surrender this Note to the Company to collect
principal payments. The Company will pay principal, premium if any, and
interest at the principal executive office of the Company in the United States
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may pay principal,
premium, if any, and interest by check
<PAGE>
payable in such money. It may mail an interest check to a Holder's address in
the records of the Company or by other means acceptable to the Holder.
3. Indenture. Reference is hereby made to an Indenture dated as of March
---------
30, 1998 (the "Indenture") between the Company and the First Union National
Bank, as Trustee which governs certain convertible subordinated notes having
terms substantially the same as this Note but which are convertible at the
holder's discretion into Class A Common Stock of the Company (such stock
referred to as "Class A Stock" and such notes as "Class A Notes"). Terms used
herein or used in defined terms herein, including "Senior Indebtedness",
"Indebtedness" and "Change of Control", which are defined in the Indenture have
the meanings assigned to them in the Indenture (unless the context otherwise
requires). Reference is hereby also made to the Note Purchase Agreement dated
as of March 5, 1998, between the Company and A.L. Industrier A.S. (the "Note
Purchase Agreement").
4. Optional Redemption. This Note may be redeemed for cash on at least
-------------------
30 and not more than 60 days notice at the option of the Company on or after
April 6, 2001 in whole at any time or in part from time to time, at the
redemption prices (expressed as percentages of principal amount) set forth
below, plus accrued interest, if any, to the redemption date; provided that this
Note may not be redeemed in whole or part unless the Company has duly called the
Class A Notes for redemption in accordance with the Indenture on a redemption
date at least five business days earlier than the redemption date applicable to
the Note. The redemption date shall be determined by the Company.
The redemption price (expressed as a percentage of principal amount)
for the portion of this Note redeemed on and after April 6, 2001 and prior to
April 1, 2002 is 103.286% and the redemption prices (expressed as percentages of
principal amount) are as follows for the twelve-month period beginning April 1:
Year Percentage
---- ----------
2002 102.464%
2003 101.643%
2004 100.821%
5. Notice of Redemption. Notice of redemption will be mailed at least 30
--------------------
days but not more than 60 days before the redemption date to the Holder of this
Note at its address on the records of the Company. From and after the
redemption date interest ceases to accrue on this Note or portions thereof
called for redemption. A call of this Note for redemption shall not affect or
limit any automatic conversion that occurs on or prior to the redemption date
under paragraph 7 hereof.
6. Repurchase at Option of Holder. In the event of a Change in Control
------------------------------
with respect to the Company, then the Holder of this Note shall have the right,
at the Holder's option, subject to the rights of the holders of Senior
Indebtedness, to require the Company to repurchase this Note or
2
<PAGE>
any portion thereof which is $1,000 or any integral multiple thereof on a
business day (the "Repurchase Date") that is no later than 90 days after the
date of such Change in Control, unless otherwise required by applicable law, at
a price equal to 100% of principal amount of the Note, plus accrued and unpaid
interest to the Repurchase Date.
Within 30 days after the occurrence of the Change in Control, the
Company will give notice of the occurrence of such Change in Control to the
Holder hereof. Such notice shall include, among other things, the date by which
Holder must notify the Company of such Holder's intention to exercise the
repurchase option and of the procedure which such Holder must follow to exercise
such right. Exercise of the repurchase option by the Holder hereof will be
revocable at any time prior to the close of business on or prior to the
Repurchase Date, and the Holder who submits this Note will be subject to
automatic conversion of this Note into Class B Common Stock as herein provided
prior to close of business on the Repurchase Date.
7. Automatic Conversion. The principal of this Note will automatically
--------------------
convert into shares of Class B Stock without any act required on the part of the
holder hereof on the close of business on the date (the "Conversion Date") which
is the later of (i) April 6, 2001, or (ii) the Conversion Event Date. The
Conversion Event Date shall be the first business day following the occurrence
of Conversion Event. A Conversion Event shall mean the conversion of one or
more Class A Notes so that at least 75% in principal amount of the Class A Notes
originally issued under the Indenture in the Offering (defined in the Note
Purchase Agreement), including any Class A Notes issued upon exercise of the
overallotment option, shall have been converted (whether on or before the date
of such occurrence) by the holders thereof into shares of Class A Stock of the
Company. The conversion price is $28.59375 per share, subject to adjustment in
certain events as provided herein. To determine the number of shares of Class B
Stock issuable upon automatic conversion of this Note, divide the principal
amount hereof by the conversion price in effect on the conversion date and round
the result to the nearest 1/100th share. The Company will deliver a check in
lieu of any fractional share. On conversion no payment or adjustment for
interest accrued on this Note will be made. The conversion price and the number
of shares of Class B Stock into which the Note is convertible shall be adjusted
in the same manner and at the same time as the Class A Notes are or would be
adjusted pursuant to Article Ten of the Indenture so that the conversion price
under this Note is at all times the same as the conversion price then applicable
to the Class A Notes (or if the Class A Notes are no longer outstanding on the
Conversion Date, the same as the conversion price applicable to the Class A
Notes would have been if they had been outstanding on such Conversion Date).
The Company shall promptly give the Holder written notice of any adjustment in
the conversion price.
Such conversion as set forth in the preceding paragraph shall be
automatic on the Conversion Date specified if a Conversion Event Date has
occurred and from and after the Conversion Date this Note shall be deemed to be
no longer outstanding and shall represent the number of shares of Class B Stock
into which this Note was converted on such Conversion Date. To receive stock
certificates for Class B Stock upon automatic conversion of this Note, the
Holder must surrender this Note to the Company, attention Treasurer, at its
principal executive office in the United States.
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<PAGE>
Notwithstanding any other provision of this Note, this Note shall
become convertible at the option of the Holder into shares of Class B Stock in
the same manner, at the same conversion price (as from time to time adjusted)
and with the same effect as provided in Article Ten of the Indenture with
respect to Class A Stock issuable on conversion of Class A Notes if and only if
the Holder shall be an assignee of the original Holder of this Note and such
assignee is not an affiliate of the Company.
Except as provided in the preceding paragraph with respect to an
assignee who is not an affiliate, this Note shall not be converted unless a
Conversion Event shall have occurred.
8. Subordination. This Note is subordinated in right of payment, in the
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same manner and to the same extent as is set forth in the Indenture with respect
to the Class A Notes, to the prior payment in full of all Senior Indebtedness.
The obligations of the Company under this Note shall not constitute Senior
Indebtedness under the Indenture nor shall the obligations of the Company under
the Class A Notes constitute Senior Indebtedness under this Note. The
obligations of the Company under this Note shall rank pari passu with the
Company's obligations under the Class A Notes. The Holder by accepting this
Note agrees to such subordination and authorizes the Company or any agent
therefor to give it effect. To the extent necessary to give effect to this
paragraph 8, the provisions of Article Twelve of the Indenture are hereby
incorporated by reference but with references to the Class A Notes referring to
this Note.
9. Transfer and Exchange; Division of Note. Any transfer or assignment
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of this Note is subject to the limitations and restrictions set forth in the
Note Purchase Agreement. The Company may require the Holder, among other
things, to furnish appropriate evidence of compliance with such limitations and
restrictions. The Holder may exchange this Note after October 31, 1999 for a
like principal amount of Class A Notes as set forth in the Note Purchase
Agreement and subject to the limitations set forth therein. No service charge
shall be made for any transfer or exchange, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Company need not exchange or transfer this Note if it
has been called for redemption in whole or in part.
At the Holder's request made at any time the Company will divide this
Note into two or more Notes having in the aggregate the same principal amount as
this Note, each such Note to be of like tenor as this Note and to bear such
legends as are borne by this Note. To effect such division the Holder shall
deliver this Note to the Company with its written request for dividing this
Note; provided that such right to divide this Note shall not limit or affect the
limitations on transfer referred to in the Note Purchase Agreement or this
paragraph 9.
10. Merger or Consolidation. The Company shall not consolidate with, or
-----------------------
merge into, or transfer or lease all or substantially all of its assets to, any
person unless, among other things, the person is organized under the laws of the
United States or consents to submit to the jurisdiction of any new York State or
Federal court sitting in the City of New York, such person assumes by written
agreement all the obligations of the Company under this Note and after giving
effect to the transaction no Default or Event of Default exists.
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<PAGE>
Notwithstanding the foregoing, any subsidiary of the Company may
consolidate with, merge into or transfer all or part of its properties and
assets to the Company or any other subsidiary or subsidiaries of the Company.
11. Defaults and Remedies. An Event of Default is: default for 30 days in
---------------------
payment of interest on this Note; default in payment of principal on the Note
when due; failure by the Company for 60 days after notice to it to comply with
any of its agreements in this Note, in the Note Purchase Agreement or in the
Indenture; default by the Company causing acceleration of an aggregate amount of
at least $10,000,000 of Indebtedness of the Company for borrowed money under any
mortgage, indenture or instrument under which such Indebtedness is issued or by
which such Indebtedness is secured or evidenced unless within 60 days such
acceleration is rescinded or waived or such Indebtedness is discharged by the
Company; and any event of bankruptcy or insolvency which would constitute an
Event of Default under the Indenture. If any Event of Default occurs and is
continuing, the Holder hereof may declare all this Note to be due and payable
immediately and upon such declaration all principal, premium, if any, and
accrued and unpaid interest shall immediately become due and payable.
12. No Recourse Against Others. No past, present or future director,
--------------------------
officer, employee or stockholder, as such, of the Company shall have any
liability for any obligations of the Company under this Note or for any claim
based on, in respect of or by reason of such obligations or their creation.
Each Holder by accepting this Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of this Note.
THE COMPANY WILL FURNISH TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND
WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO:
ALPHARMA INC.
ONE EXECUTIVE DRIVE
FOR LEE, NEW JERSEY 07024
ATTENTION: TREASURER
* * * * *
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IN WITNESS WHEREOF, ALPHARMA INC. has caused this instrument to be
duly signed under its corporate seal.
[SEAL] ALPHARMA INC.
By:____________________________
By:____________________________
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