February 6, 2008
Exhibit
10.2
February
6, 2008
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
Barre
Parent Corporation
000 Xxxxx
00 Xxxx
Xxxxxxxxxxx,
Xxx Xxxxxx 00000
Re: Consent
to Disposition of API Division
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, the "Loan Agreement"),
among Alpharma Inc., a Delaware corporation ("Alpharma"), 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
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 the 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 certain Subsidiaries that are not Borrowers
intend to dispose of all of the capital stock and other Equity Interests they
own in certain entities, which are not Borrowers, associated with Alpharma's
active pharmaceuticals business (the "API Stock
Disposition") and, in connection therewith, Alpharma intends to dispose
of certain assets relating to its active pharmaceutical ingredients business
located in the United States (the "API Asset
Disposition" and,
collectively with the API Stock Disposition, the "API Disposition"),
which assets are more particularly described on Exhibit A attached
hereto (the "API
Assets"). For illustrative purposes, a list of the Accounts
and Inventory of Alpharma, which would constitute "API Assets" as of December
31, 2007, is attached hereto and incorporated herein as Exhibit
B.
The API Asset Disposition does
not constitute a Permitted Asset Disposition under the Loan
Agreement. Borrowers have requested that Agent and Lenders consent to
the API Asset Disposition and agree to release their Liens on the API Assets in
connection therewith. Agent and Lenders are willing to do so, on the
terms and subject to the conditions set forth 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
to API Disposition. Notwithstanding
the provisions of
Section 10.2.10
of the Loan Agreement and the definition of Permitted Asset Disposition set
forth in the Loan Agreement, Agent and Lenders hereby consent to the API Asset
Disposition and agree to execute a release of Agent's security interest in and
Liens upon the API Assets, subject to Borrowers' satisfaction of the conditions
precedent set forth in Section 2 of this
letter agreement.
2. Conditions
Precedent. Agent's and
Lenders' consent to the API Asset Disposition and agreement to release their
Liens upon the API Assets shall be subject to satisfaction of the following
conditions precedent: (a) both before and after giving effect to the
consummation of the API Disposition, no Default or Event of Default exists, and
Availability is not less than $25,000,000; (b) not less than 10 days prior to
the consummation of the API Disposition (or such lesser period of time to which
Agent, in its discretion, may agree in writing), Borrowers deliver to Agent
draft copies of the purchase agreement and other material agreements anticipated
to be executed or delivered in connection with the API Disposition (the "Transaction
Documents"); (c) the API Disposition is consummated and the API Assets
are transferred to the purchaser thereof on or before August 15, 2008; and (d)
concurrently with the consummation of the API Disposition, Alpharma, in its
capacity as Borrower Representative, delivers to Agent a release letter
confirming the consummation of the API Disposition in accordance with the
conditions contained in this Section
2.
3. Additional
Covenants. As additional
consideration for Agent's and Lenders' execution and performance of this letter
agreement, Borrowers hereby agree with Agent and Lenders that: (a) not less than 30
days after the consummation of the API Disposition, Borrowers shall deliver to
Agent executed copies of the Transaction Documents; (b) within 60 days after the
date of the consummation of the API Disposition (or such longer period to which
Agent may consent in writing in its reasonable discretion), Borrowers shall
repay, or cause to be repaid, all amounts owed by Alpharma (Taizhou)
Pharmaceuticals Co., Ltd. in respect of the Chinese Credit Facility; and (c) the
Loan Agreement shall be amended in accordance with Section 5 of this
letter agreement, and Borrowers shall cause Alpharma Animal Health (Shenzhou)
Co., Ltd., Alpharma Animal Health (Yantai) Co., Ltd., and Alpharma Animal Health
(Beijing) Trading Co., Ltd. to execute and deliver
to Bank of America
Shanghai or the applicable Affiliate of BofA such documents, agreements or
instruments as may be reasonably requested by Bank of America Shanghai or such
other Affiliate of BofA to evidence the amendments to the Chinese Credit
Facility contemplated thereby. Borrowers agree that the violation of
any covenant set forth in this Section 3 shall
constitute an Event of Default.
4. Form of
Release. Agent's release
of its security interests in and Liens upon the API Assets shall be effected by
a partial release of the API Assets from the collateral described in the
following UCC-1 financing statements, which partial releases will be in the form
attached hereto as Exhibit
C:
Debtor
Name
|
Jurisdiction
|
File
No.
|
File
Date
|
Xxxx
County, Illinois
|
0530418057
|
10/31/05
|
|
Xxxxxxx
Xxxxxx, Xxxxxxxx
|
0000000
|
11/1/05
|
|
Delaware
Secretary of State
|
5287754
7
|
9/16/05
|
|
Quebec,
Canada
|
200510111582818627600
|
10/26/05
|
|
Alberta,
Canada
|
05101127644
|
10/11/05
|
|
Ontario,
Canada
|
619596594
|
Borrowers
will assume sole responsibility for the costs of such filings. In
addition, promptly upon Agent's receipt of Borrowers' reasonable written request
therefor, Agent agrees to prepare and file, at Borrowers' expense, such other
UCC partial releases and other lien termination statements as may be necessary
to reflect of record the release of Agent's liens upon the API
Assets.
5. Amendments
to Loan Agreement. Upon repayment of
amounts outstanding in respect of the Chinese Credit Facility in accordance with
Section 3(b) of
this letter agreement (but in any event, within 60 days after the consummation
of the API Disposition, or such longer period of time to which Agent may consent
in writing in its reasonable discretion), the Loan Agreement shall be deemed
amended by deleting the definitions of "Chinese Credit Facility Reserve" and
"Chinese Credit Facility" contained in Section 1.1 of the
Loan Agreement and by substituting the following new definitions, respectively,
in lieu thereof:
Chinese Credit Facility
Reserve - such reserves as may be established from time to time by Agent
(i) at any time that Availability is less than $35,000,000 and as determined by
Agent in its reasonable credit judgment or (ii) if at the time of or after
giving effect to any payment under the New Senior Notes, Availability is or
would be less than $35,000,000, and such reserves may reflect the outstanding
principal amount of the Chinese Credit Facility plus all accrued interest
thereon and fees payable under the terms of the Chinese Credit Facility, all as
determined by Agent.
Chinese Credit
Facility - a $10,600,000 credit facility provided to Alpharma China by
Bank of America Shanghai or another Affiliate of BofA.
Alpharma
Inc., et
al.
February 6,
2008
Page
4
__________________
6. No Other
Consent or Release. The consent
contained herein shall not be deemed a waiver of any provision of the Loan
Agreement (other than Section 10.2.10
thereof, in connection with the API Disposition as set forth herein) or a
consent to any transaction other than the API Asset Disposition on the terms set
forth herein. Except for the release by Agent of its security
interest in the API Assets as expressly set forth herein, Agent and Lenders
shall retain all of their liens upon, security interests in and claims to all
other property of Borrowers or any other Person that secures the whole or any
part of the Obligations.
7. Acknowledgments
and Stipulations; Representation and Warranties. By its signature below, each
Borrower hereby (a) 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; (b) acknowledges and stipulates that (i) 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 subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law, and (ii) all of the Obligations of such
Borrower 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) represents and
warrants to Agent and Lenders, to induce Agent and Lenders to enter into this
letter agreement, that (i) the execution, delivery and performance of this
letter agreement has been duly authorized by all requisite corporate or limited
liability company action on the part of such Borrower, and (ii) all of the
representations and warranties made by such Borrower in the Loan Agreement and
the other Loan Documents are true and correct in all material respects on and as
of the date hereof, except to the extent that any such representation or
warranty is stated to relate to an earlier date, in which case such
representation or warranty shall be true and correct in all material respects on
and as of such earlier date.
8. 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
and the exhibits hereto and the consummation of the transactions herein
described.
9. Miscellaneous. This letter
agreement shall be governed by and construed in accordance with the internal
laws of the State of New York and shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and
assigns. Each Borrower acknowledges and 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.
[Remainder
of page intentionally left blank;
signatures
begin on following page.]
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 | |||
|
By:
|
/s/ Xxxx X. Xxxxx | |
Name: Xxxx X. Xxxxx | |||
Title: Senior Vice President | |||
DNB NOR BANK ASA, as a Lender | ||||
|
By:
|
/s/ Xxxxxx X. Xxxxxxxxxx | ||
Name: | Xxxxxx X. Xxxxxxxxxx | |||
Title: | Senior Vice President | |||
|
By:
|
/s/ Xxxxxx Xxxxxx | ||
Name: | Xxxxxx Xxxxxx | |||
Title: | Senior Vice President | |||
PNC BANK, NATIONAL ASSOCIATION, | |||
as a Lender | |||
|
By:
|
/s/ Xxxxxx Xxxxxxx | ||
Name: | Xxxxxx Xxxxxxx | |||
Title: | Vice President | |||
[Signatures continue on following page.]
Consent
Letter Regarding Disposition of API Division
BORROWERS:
ALPHARMA INC. | |||
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxx | |
Xxxxxxx X. Xxxxxxxx, Executive Vice | |||
President and Chief Financial Officer | |||
ALPHARMA OPERATING CORPORATION | |||
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxx | |
Xxxxxxx X. Xxxxxxxx, President | |||
ALPHARMA U.S. INC. | |||
|
By:
|
/s/ Xxxxxx X. Xxxxxxxx, III | ||
Xxxxxx X. Xxxxxxxx, III, Secretary |
[CORPORATE SEAL]
ALPHARMA EURO HOLDINGS INC. | |||
|
By:
|
/s/ Xxxxxxxxxxx Xxxxxx | |
Xxxxxxxxxxx Xxxxxx, Secretary | |||
ALPHARMA (BERMUDA) INC. | |||
|
By:
|
/s/ Xxxxxxxxxxx Xxxxxx | |
Xxxxxxxxxxx Xxxxxx, Secretary | |||
[Signatures continued on following page.]
Consent
Letter Regarding Disposition of API Division
ALPHARMA USHP INC. | |||
|
By:
|
/s/ Xxxxxxxxxxx Xxxxxx | |
Xxxxxxxxxxx Xxxxxx, Secretary | |||
ALPHARMA ANIMAL HEALTH | |||
COMPANY | |||
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxx | |
Xxxxxxx X. Xxxxxxxx, Vice President and | |||
Treasurer | |||
MIKJAN CORPORATION | |||
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxx | |
Xxxxxxx X. Xxxxxxxx, President | |||
ALPHARMA HOLDINGS INC. | |||
|
By:
|
/s/ Xxxxxxxxxxx Xxxxxx | |
Xxxxxxxxxxx Xxxxxx, Secretary | |||
ALPHARMA SPECIALTY PHARMA INC. | |||
|
By:
|
/s/ Xxxxxxxxxxx Xxxxxx | |
Xxxxxxxxxxx Xxxxxx, Secretary | |||
PUREPAC PHARMACEUTICAL | |||
HOLDINGS, INC. | |||
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxx | |
Xxxxxxx X. Xxxxxxxx, President | |||
[Signatures continued on following page.]
Consent
Letter Regarding Disposition of API Division
ALPHARMA PHARMACEUTICALS LLC | |||
|
By:
|
/s/ Xxxxxx Xxxxxx | |
Xxxxxx Xxxxxx, President and | |||
Chief Executive Officer | |||
BARRE PARENT CORPORATION | |||
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxx | |
Xxxxxxx X. Xxxxxxxx, President | |||
Consent
Letter Regarding Disposition of API Division