-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BEaVBh/h5jsk6tZCkNvkJ7uX3v04RjJRaUsFYneA7+dqrLJiwo4JHDYfb7wgu2KC avYY3a2WgHn/JMaHpK2zBQ== 0000950130-98-001740.txt : 19980406 0000950130-98-001740.hdr.sgml : 19980406 ACCESSION NUMBER: 0000950130-98-001740 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19980403 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ALPHARMA INC CENTRAL INDEX KEY: 0000730469 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 222095212 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-35893 FILM NUMBER: 98587064 BUSINESS ADDRESS: STREET 1: ONE EXECUTIVE DR STREET 2: P O BOX 1399 CITY: FORT LEE STATE: NJ ZIP: 07024 BUSINESS PHONE: 2019477774 FORMER COMPANY: FORMER CONFORMED NAME: A L PHARMA DATE OF NAME CHANGE: 19960513 FORMER COMPANY: FORMER CONFORMED NAME: A L LABORATORIES INC DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: AL INDUSTRIER AS CENTRAL INDEX KEY: 0001034786 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: HARBITZALLEEN 3 158 SKOYEN STREET 2: OSLO NORWAY MAIL ADDRESS: STREET 1: HARBITZALLEN 3 158 SKOYEN STREET 2: OSLO NORWAY SC 13D/A 1 SCHEDULE 13D/A OMB APPROVAL ---------------------------- OMB Number: 3235-0145 Expires: September 30, 1998 Estimated average burden hours per form........ 14.90 ---------------------------- 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. 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 - -------------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (a) [_] (b) [_] - -------------------------------------------------------------------------------- 3 SEC Use Only - -------------------------------------------------------------------------------- 4 Source of Funds/*/ 00, BK - -------------------------------------------------------------------------------- 5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [_] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Norway - -------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- 12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares/*/ [_] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 37.5% - -------------------------------------------------------------------------------- 14 Type of Reporting Person/*/ CO - -------------------------------------------------------------------------------- /*/SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. 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). (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 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 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 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) 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 EXHIBIT INDEX TO AMENDMENT NO. 3 ---------------
EXHIBIT NO. EXHIBIT NAME - ------------ ------------------------ 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)
EX-1 2 LOAN AGREEMENT DATED 3/30/98 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 -2- CONTENTS
PAGE 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
EXHIBIT 1 BANK COMMITMENTS EXHIBIT 2 FORM OF DRAWDOWN NOTICE -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; -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 -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 -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 -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. -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, -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). -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. -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: -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. -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 -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; -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; -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. -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 -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 -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 -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. -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. -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 ----------------------------------------- -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 -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 EX-2 3 SHARE PLEDGE AGREEMENT DATED 3/30/98 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: 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 EX-3 4 NOTE PLEDGE AGREEMENT DATED 3/30/98 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, 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 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 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 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 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 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 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 (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 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 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; 11 (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 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 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 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 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 EX-4 5 NOTE PURCHASE AGREEMENT DATED 3/5/98 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 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 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 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 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 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 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. 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 EX-5 6 5 3/4% CONVERTIBLE (CLASS B) SUBORDINATED NOTE 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 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 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. 3 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 ------------- 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 --------------------------------------- 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. 4 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 * * * * * 5 IN WITNESS WHEREOF, ALPHARMA INC. has caused this instrument to be duly signed under its corporate seal. [SEAL] ALPHARMA INC. By:____________________________ By:____________________________ 6 -----END PRIVACY-ENHANCED MESSAGE-----