EXHIBIT 1.2
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 ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ 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 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.
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 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.
* * *
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:
AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT
Amendment No. 1 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 1 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: