October 7, 2008
EXECUTION VERSION
October 7, 2008
Alpharma Inc.
Alpharma Operating Corporation
Alpharma U.S. Inc.
Barre Parent Corporation
Alpharma Euro Holdings Inc.
Alpharma (Bermuda) Inc.
Alpharma USHP Inc.
Alpharma Animal Health Company
Mikjan Corporation
Alpharma Holdings Inc.
Alpharma Specialty Pharma Inc.
Purepac Pharmaceutical Holdings, Inc.
Alpharma Pharmaceuticals LLC
000 Xxxxx 00 Xxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Alpharma Operating Corporation
Alpharma U.S. Inc.
Barre Parent Corporation
Alpharma Euro Holdings Inc.
Alpharma (Bermuda) Inc.
Alpharma USHP Inc.
Alpharma Animal Health Company
Mikjan Corporation
Alpharma Holdings Inc.
Alpharma Specialty Pharma Inc.
Purepac Pharmaceutical Holdings, Inc.
Alpharma Pharmaceuticals LLC
000 Xxxxx 00 Xxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Loan and Security Agreement dated March
10, 2006 (as at any time amended, restated, supplemented or otherwise modified, the “Loan
Agreement”), among Alpharma Inc., a Delaware corporation (“Parent”); Alpharma Operating
Corporation, a Delaware corporation; Alpharma U.S. Inc., a Delaware corporation; Barre Parent
Corporation, a Delaware corporation; Alpharma Euro Holdings Inc., a Delaware corporation; Alpharma
(Bermuda) Inc., a Delaware corporation; Alpharma USHP Inc., a Delaware corporation; Alpharma Animal
Health Company, a Texas corporation; Mikjan Corporation, an Arkansas corporation; Alpharma Holdings
Inc., a Delaware corporation; Alpharma Specialty Pharma Inc., a Delaware corporation f/k/a Alpharma
Pharmaceuticals Inc.; Purepac Pharmaceutical Holdings, Inc., a Delaware corporation; and Alpharma
Pharmaceuticals LLC, a Delaware limited liability company f/k/a Alpharma Branded Products Division
Inc. (collectively, “Borrowers” and each individually, a “Borrower”); the various financial
institutions party thereto from time to time (collectively, “Lenders”); and Bank of America, N.A.,
a national banking association, in its capacity as collateral and administrative agent for Lenders
(together with its successors in such capacity, “Agent”). Capitalized terms used herein and not
otherwise defined herein shall have the meaning ascribed to such terms in the Loan Agreement.
Borrowers have informed Agent and Lenders that Alpharma Ireland Limited, a corporation
organized under the laws of Ireland (“Alpharma Ireland”), desires to effect a certain Development
and License Agreement (the “License Agreement”) with Durect Corporation, a Delaware corporation
(“Licensor”), pursuant to which Alpharma Ireland will license from Licensor certain proprietary
products for pain treatment and certain patents and know-how relating thereto. In connection with
the License Agreement, Licensor is requiring an unsecured guaranty from Parent with respect to all
milestone payments of up to $263,000,000 in the aggregate and all royalty and other payments owing
by Alpharma Ireland under the License Agreement (the “Parent Guaranty”). Borrowers have requested
that Agent and
Lenders consent to the Parent Guaranty, and Agent and Lenders are willing to do so, on the terms
and subject to the conditions contained herein.
NOW THEREFORE, for Ten Dollars ($10.00) in hand paid, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Consent. Subject to the satisfaction of the conditions precedent set forth below,
Agent and Xxxxxxx hereby consent to the Parent Guaranty. Such consent is subject to the
satisfaction of the following conditions precedent in form and substance satisfactory to Agent and
Lenders in their sole and absolute discretion: (a) the Parent Guaranty and the License Agreement
are executed and all conditions precedent to the effectiveness thereto are satisfied on or before
December 31, 2008; (b) at the time of the execution of the Parent Guaranty and the License
Agreement, and after giving effect thereto and hereto, no Default or Event of Default exists or
would result therefrom; and (c) in connection with the execution of the License Agreement, Licensor
and Alpharma Ireland have filed all documents that are required or permitted to be filed pursuant
to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 (as at any time amended, the “HSR”) and
have received all necessary approval under the HSR in connection therewith.
2. Amendment to Loan Agreement. Upon satisfaction of the conditions precedent set
forth above, the Loan Agreement shall be deemed amended as follows:
(a) By deleting the definition of “Permitted Contingent Obligations” in Section 1.1 of the
Loan Agreement and by substituting in lieu thereof the following:
Permitted Contingent Obligations — each of the following:
(i) Contingent Obligations arising from endorsements of items of payment for
collection or deposit in the Ordinary Course of Business;
(ii) Contingent Obligations of any Consolidated Group Member existing as of the
Closing Date, including extensions and renewals thereof that do not increase
the amount of such Contingent Obligations as of the date of such extension or
renewal;
(iii) Contingent Obligations arising under indemnity agreements to title insurers to
cause such title insurers to issue to Agent title insurance policies;
(iv) Contingent Obligations with respect to customary indemnification obligations in
favor of purchasers in connection with dispositions of Equipment permitted under
Section 8.4.2;
(v) Contingent Obligations consisting of reimbursement obligations from time to time
owing by any Borrower to Issuing Bank with respect to Letters of Credit (but in no
event to include reimbursement obligations at any time owing by a Borrower to any
other Person that may issue letters of credit for the account of Xxxxxxxxx);
(vi) unsecured guaranties made by a Consolidated Group Member for Debt or other
obligations of another Consolidated Group Member that is expressly permitted to be
incurred hereunder or not prohibited;
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(vii) Contingent Obligations of Parent arising under that certain unsecured guaranty
dated September 4, 2007 (the “IDEA Guaranty”), from Parent to IDEA AG, a German
corporation (“IDEA”), with respect to milestone payments of up to $192,000,000 in
the aggregate and all royalty and other payments owing by Alpharma Ireland Limited
(“Alpharma Ireland”) under that certain Exclusive License Agreement dated September
4, 2007 (the “IDEA License Agreement”; together with the IDEA Guaranty,
collectively, the “IDEA Agreements” and each individually, an “IDEA Agreement”),
between IDEA and Alpharma Ireland, and with respect to each IDEA Agreement, as in
effect on the date of execution thereof without giving effect to any amendment or
modification thereto;
(viii) Contingent Obligations of Parent arising under that certain unsecured
guaranty dated as of September 19, 2008 (the “Durect Guaranty”), from Parent to
Durect Corporation, a Delaware corporation (“Durect”), with respect to milestone
payments of up to $263,000,000 in the aggregate and all royalty and other payments
owing by Alpharma Ireland under that certain Development and License Agreement dated
as of September 19, 2008 (the “Durect License Agreement”; together with the Durect
Guaranty, collectively, the “Durect Agreements” and each individually, a “Durect
Agreement”), between Durect and Alpharma Ireland, and with respect to each Durect
Agreement, as in effect on the date of execution thereof without giving effect to
any amendment or modification thereto;
(ix) other unsecured Contingent Obligations not to exceed $25,000,000 in the
aggregate at any time;
(x) the Permitted Euro Debt Guaranty; and
(xi) unsecured guaranties made by a Consolidated Group Member for Debt of another
Consolidated Group Member that is expressly permitted to be incurred hereunder.
(b) By adding the following new Section 10.2.23 to the Loan Agreement immediately following
Section 10.2.22 thereof:
10.2.23 Amendments to Durect Agreements. Amend, modify or supplement,
or permit Alpharma Ireland or any other Subsidiary to amend, modify or supplement
(or consent to any amendment, modification or supplement) the Durect Guaranty or the
Durect License Agreement or any documents executed in connection therewith, without
Agent’s prior written consent, if such amendment, modification or supplement
increases or otherwise modifies the payment obligations thereunder or modifies the
maturity date of any payment obligations thereunder, or otherwise creates additional
obligations, covenants, representations or warranties of Parent or any other
Borrower or any Domestic Subsidiary.
3. Additional Covenant. Notwithstanding anything contained herein, Borrowers covenant
and agree that no proceeds of Loans shall be used to fund the upfront consideration or any other
obligations under the Parent Guaranty or the License Agreement.
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4. Expense Reimbursement. Borrowers jointly and severally agree to reimburse Agent
for all costs and expenses (including legal fees) incurred by Agent in connection with the
preparation of this letter agreement.
5. Miscellaneous. By its signature below, each Borrower hereby: (i) ratifies and
reaffirms the Obligations, each of the Loan Documents to which such Borrower is a party and all of
such Borrower’s covenants, duties, indebtedness and liabilities under the Loan Documents to which
such Borrower is a party; (ii) acknowledges and stipulates that (a) the Loan Agreement and the
other Loan Documents executed by such Borrower are legal, valid and binding obligations of such
Borrower that are enforceable against such Borrower in accordance with the terms thereof, (b) all
of the Obligations are owing and payable without defense, offset or counterclaim (and to the extent
there exists any such defense, offset or counterclaim on the date hereof, the same is hereby waived
by such Borrower) and (c) the security interests and Liens granted by such Borrower in favor of
Agent are duly perfected, first priority security interests and Liens; (iii) represents and
warrants to Agent and Lenders, to induce Agent and Lenders to enter into this letter agreement,
that (a) no Default or Event of Default exists on the date hereof, (b) the execution, delivery and
performance of this letter agreement have been duly authorized by all requisite corporate or
limited liability company action on the part of such Borrower, (c) this letter agreement has been
duly executed and delivered by such Xxxxxxxx and (d) all of the representations and warranties made
by such Borrower in the Loan Agreement and the other Loan Documents are true and correct on and as
of the date hereof (except those representations and warranties that expressly relate to an earlier
date); (iv) agrees that, upon the effectiveness of this letter agreement, each reference in the
Loan Agreement to “this Agreement,” “hereunder,” or words of like import shall mean and be a
reference to the Loan Agreement, as amended by this letter agreement; (v) agrees that this letter
agreement shall be part of the Loan Agreement and a breach of any representation, warranty or
covenant herein shall constitute an Event of Default thereunder; (vi) agrees that this letter
agreement shall be governed by and construed in accordance with the internal laws of the State of
New York; (vii) agrees that this letter agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective legal representatives, successors and assigns; (viii)
agrees that, except as otherwise expressly provided in this letter agreement, nothing herein shall
be deemed to amend or modify any provision of the Loan Agreement or any of the other Loan
Documents, each of which shall remain in full force and effect; (ix) agrees that this letter
agreement is not intended to be, nor shall it be construed to create, a novation or accord and
satisfaction, and the Loan Agreement as herein modified shall continue in full force and effect;
(x) agrees that this letter agreement may be executed in any number of counterparts and by
different parties to this letter agreement on separate counterparts, each of which, when so
executed, shall be deemed an original, but all such counterparts shall constitute one and the same
agreement; (xi) agrees that any manually executed signature delivered by a party by facsimile or
electronic mail transmission shall be deemed to be an original signature hereto; (xii) agrees to
take such further actions as Agent and Xxxxxxx shall reasonably request from time to time in
connection herewith to evidence or give effect to the amendments set forth herein or any of the
transactions contemplated hereby; and (xiii) agrees that section titles and references used in this
letter agreement shall be without substantive meaning or content of any kind whatsoever and are not
a part of the agreements among the parties hereto. To the fullest extent permitted by Applicable
Law, the parties hereto each hereby waives the right to trial by jury in any action, suit,
counterclaim or proceeding arising out of or related to this letter agreement.
[Remainder of page intentionally left blank; Signatures begin on following page.]
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The parties hereto have caused this letter agreement to be duly executed under seal and
delivered by their respective duly authorized officers on the date first written above.
| Very truly yours, | ||||||
| BANK OF AMERICA, N.A., as Agent and a Lender |
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| By: | /s/ Xxxx X. Xxxxx
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| DNB NOR BANK ASA, as a Lender | ||||||
| By: Name: Title: |
/s/ Xxxxxx X. Xxxxxxxxxx
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| By: Name: Title: |
/s/ Xxxxxxx Xxxxx
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| PNC BANK, NATIONAL ASSOCIATION, as a Lender |
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| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| [Signatures continue on following page.] |
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Letter
Agreement Regarding Durect Documents
| BORROWERS: | ||||||
| ALPHARMA INC. | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx
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| President and Chief Financial Officer | ||||||
| ALPHARMA OPERATING CORPORATION | ||||||
| By: | /s/ Xxxxxxx Xxxx
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| ALPHARMA U.S. INC. | ||||||
| By: | /s/ Xxxxxxx Xxxx
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| ALPHARMA EURO HOLDINGS INC. | ||||||
| By: | /s/ Xxxxxxx Xxxxxx
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| ALPHARMA (BERMUDA) INC. | ||||||
| By: | /s/ Xxxxxxx Xxxxxx
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| [Signatures continue on following page.] |
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Letter
Agreement Regarding Durect Documents
| ALPHARMA USHP INC. | ||||||
| By: | /s/ Xxxxxxx Xxxxxx
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| ALPHARMA ANIMAL HEALTH COMPANY | ||||||
| By: | /s/ Xxxxxxx Xxxx
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| MIKJAN CORPORATION | ||||||
| By: | /s/ Xxxxxxx Xxxx
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| ALPHARMA HOLDINGS INC. | ||||||
| By: | /s/ Xxxxxxx Xxxxxx
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| [Signatures continue on following page.] |
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Letter
Agreement Regarding Durect Documents
| ALPHARMA SPECIALTY PHARMA INC. | ||||||
| By: | /s/ Xxxxxxx Xxxxxx
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| PUREPAC PHARMACEUTICAL HOLDINGS, INC. | ||||||
| By: | /s/ Xxxxxxx Xxxx
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| ALPHARMA PHARMACEUTICALS LLC | ||||||
| By: | /s/ Xxxxxxx Xxxxx Xxxxxxx
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| Pharmaceutical Commercial Operations | ||||||
| BARRE PARENT CORPORATION | ||||||
| By: | /s/ Xxxxxxx Xxxx
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Letter
Agreement Regarding Durect Documents
