March 14, 2007

 

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 Branded Products Division Inc.
One Executive Drive
Fort Lee, New Jersey 07024

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, modified or
supplemented, 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 Speciality Pharma Inc., a Delaware corporation formerly
known as Alpharma Pharmaceuticals Inc., Purepac Pharmaceutical Holdings, Inc., a
Delaware corporation, and Alpharma Branded Products Division Inc., a Delaware
corporation (each a "Borrower" and collectively, "Borrowers"), the various
financial institutions party thereto from time to time (each a "Lender" and
collectively, "Lenders") and Bank of America, N.A., a national banking
association ("BofA"), 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
meanings ascribed to such terms in the Loan Agreement.

Parent and the other Borrowers have advised Agent and Lenders of Parent's
proposed issuance of new unsecured Senior Notes due no sooner than 2027 in the
original principal amount of up to $300,000,000 (collectively, the "New Senior
Notes") pursuant to an Indenture between Parent, as issuer of the New Senior
Notes, and the trustee named therein (the "New Senior Notes Indenture").

Borrowers have provided to Agent and Lenders a description of the terms of the
proposed New Senior Notes Indenture and the New Senior Notes to be issued
thereunder, such description of terms being more particularly described on
Exhibit A attached hereto (the "New Senior Notes Terms"), and Borrowers have
requested that Agent and Required Lenders (i) acknowledge that the proposed New
Senior Notes Terms are satisfactory to Agent and Required Lenders and consent to
the same, and (ii) agree to amend the Loan Agreement in order to permit the
issuance of the New Senior Notes, subject to the New Senior Notes Terms (the
"Proposed Issuance").

Additionally, Borrowers have advised Agent and Lenders of the desire of certain
subsidiaries of Borrowers currently being formed in The People's Republic of
China (collectively referred to as "Alpharma China"), to establish one or more
bank and checking accounts with Bank of America Shanghai or another Affiliate of
BofA, and for Bank of America Shanghai or such other Affiliate of BofA to
provide to Alpharma China (i) a $10,600,000 credit facility (the "Chinese Credit
Facility"), and (ii) certain bank product services from time to time
(collectively with the Chinese Credit Facility, the "Chinese Facilities").
Borrowers have requested that Agent and Required Lenders consent to the Chinese
Facilities and amend the Loan Agreement in order to permit the same.

Agent and Required Lenders are willing to (i) acknowledge that the proposed New
Senior Notes Terms with respect to the Proposed Issuance are satisfactory to
Agent and Lenders and consent to the same, (ii) consent to each of the Chinese
Facilities, and (iii) agree to amend the Loan Agreement in order to permit the
Proposed Issuance and the Chinese Facilities, in each case 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
severally acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:

Acknowledgment of and Consent to Issuance of the New Senior Notes

.
Agent and Lenders hereby consent to the Proposed Issuance subject to the
satisfaction of each of the following conditions:

(a) No Event of Default exists at the time of, or will exist immediately after
giving effect to, the Proposed Issuance; and

(b) any change to the New Senior Note Terms (excluding any terms relating to
pricing) that is materially adverse to the Agent and Lenders shall be acceptable
to Agent (and without limiting the generality of the foregoing, the New Senior
Notes shall at all times remain unsecured).

Consent to Chinese Facilities

.
Borrowers have advised Agent and Lenders of Alpharma China's desire to enter
into the Chinese Facilities with Bank of America Shanghai or another Affiliate
of BofA. Agent and Required Lenders hereby consent to each of the Chinese
Facilities to be provided by Bank of America Shanghai or another Affiliate of
BofA to Alpharma China, subject to the following terms: (a)

Borrower's agree to jointly and severally indemnify and hold harmless BofA from
and against any and all amounts BofA may pay to Bank of America Shanghai or any
other Affiliate of BofA in connection with any of the Chinese Facilities, and
other cash management and overdraft services provided by Bank of America
Shanghai or any Affiliate of BofA to Alpharma China, whether or not any such
payment is made pursuant to a written indemnity or support agreement or
otherwise and such indemnification obligation shall constitute an Obligation,
shall be treated as Banking Relationship Debt for purposes of Section 5.6.1 of
the Loan Agreement and shall be secured by all of the Collateral; and

(b) Any and all debts, liabilities and obligations of Alpharma China now or
hereafter arising from or in connection with any of the Chinese Facilities, and
the accounts and services provided in connection therewith, shall constitute an
Obligation, shall be treated as Banking Relationship Debt for purposes of
Section 5.6.1 of the Loan Agreement and shall be secured by all of the
Collateral.

Amendments to Loan Agreement

. In addition to the foregoing consents, the parties hereto agree to amend the
Loan Agreement as follows:

(a) By adding the following new definitions to Section 1.1 of the Loan Agreement
in proper alphabetical sequence:

Alpharma China

- certain subsidiaries of Borrowers currently being formed in The People's
Republic of China

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.

New Senior Notes

- Parent's Convertible Senior Notes having a maturity date no sooner than 2027
in the original principal amount of no greater than $300,000,000, to be
initially issued pursuant to the New Senior Notes Indenture on the New Senior
Notes Issuance Date on an unsecured basis.

New Senior Note Documents

- the New Senior Notes, the New Senior Notes Indenture and any and all other
documents, agreements or instruments executed in connection therewith or
pursuant thereto.

New Senior Notes Indenture

- the Indenture between Parent and the trustee named thereunder governing the
New Senior Notes, as from time to time amended or modified in accordance with
this Agreement.

New Senior Notes Issuance Date

- the date on which the New Senior Notes have been issued and the proceeds from
the New Senior Notes are received by Parent pursuant to the terms of the New
Senior Notes Indenture.

(b) By deleting from Section 1.1 of the Loan Agreement the definitions of
"Availability Reserve", "Bank Products", and "Full Payment", by substituting in
lieu thereof the following new definitions:

Availability Reserve

- on any date of determination thereof, an amount equal to the sum of
the following (without duplication): (i) the Inventory Reserve; (ii) the Rent
Reserve; (iii) the LC Reserve; (iv) the aggregate amount of reserves established
by Agent from time to time in its reasonable credit judgment in respect of
Banking Relationship Debt; (v) the Environmental Reserve; (vi) the aggregate
amount of all liabilities and obligations that are secured by Liens upon any of
the Collateral that are senior in priority to Agent's Liens if such Liens are
not Permitted Liens (provided that the imposition of a reserve hereunder on
account of such Liens shall not be deemed a waiver of the Event of Default that
arises from the existence of such Liens) or are Permitted Liens for property
taxes under Section 10.2.5(ii); (vii) the Chinese Credit Facility Reserve, and
(viii) such additional reserves, in such amounts and with respect to
such matters, as Agent in its reasonable credit judgment may elect to impose
from time to time. If Agent shall elect to establish any reserve under clause
(viii) above or to change any of the foregoing reserves to increase the amount
of such reserves, then unless an Event of Default exists, Agent agrees to give
Borrower Representative notice of such reserve but Agent's failure to give such
notice shall not result in any liability to Agent hereunder but until such
notice is given, such reserve shall not be effective. If an Event of Default
exists, Agent shall not be required to give such notice as provided in the
forgoing sentence but may do so at its election.

Bank Products

- any one or more of the following types of products, services or facilities
extended to any Obligor by any Lender or any Affiliate of a Lender: (i)
commercial credit cards; (ii) merchant card services; (iii) products or services
under Cash Management Agreements; (iv) products under Hedging Agreements; (v)
interstate depository network services, and (vi) the Chinese Credit Facility and
any and all banking services provided from time to time by Bank of America
Shanghai or another Affiliate of Bank of America to Alpharma China or any other
Subsidiary of Parent.

Full Payment

- with respect to any of the Obligations, the full and final payment in full, in
cash and in Dollars, of such Obligations (other than contingent indemnification
obligations for which no claim has been made or asserted), including all
interests, fees and other charges payable in connection therewith under any of
the Loan Documents, whether such interests, fees or other charges accrue or are
incurred prior to or during the pendency of an Insolvency Proceeding and whether
or not any of the same are allowed or recoverable in any bankruptcy case
pursuant to Section 506 of the Bankruptcy Code or otherwise; with respect to any
LC Obligations represented by undrawn Letters of Credit and Banking Relationship
Debt (including Debt arising under Hedging Agreements), the depositing of cash
with Agent, as security for the payment of such Obligations, not to exceed 103%
of the aggregate undrawn amount of such Letters of Credit and 100% of Agent's
good faith estimate of the amount of Banking Relationship Debt due and to become
due after termination of such Bank Products (provided, that with respect to the
Chinese Credit Facility, Borrowers may provide cash collateral to Agent in an
amount equal to 100% of the Chinese Credit Facility or replacement collateral
satisfactory in all respects to Bank of America Shanghai); and with respect to
any Obligations that are contingent in nature (other than Obligations consisting
of LC Obligations or Banking Relationship Debt), such as a right of Agent or a
Lender to indemnification by any Obligor, the depositing of cash with Agent in
an amount equal to 100% of such Obligations or, if such Obligations are
unliquidated in amount and represent a claim which has been overtly asserted (or
is reasonably probable of assertion) against Agent or a Lender and for which an
indemnity has been provided by Borrowers in any of the Loan Documents, in an
amount that is equal to such claim or Agent's good faith estimate of such claim.
None of the Loans shall be deemed to have been paid in full until all
Commitments related to such Loans have expired or been terminated.

(c) By adding the following new sentence at the end of Section 3.1.5 of the Loan
Agreement :

Notwithstanding anything to the contrary contained in this Section 3.1.5, for
purposes of this Section 3.1.5 only, the term Obligations shall not include
Banking Relationship Debt arising under the Chinese Credit Facility or any
banking services provided by Bank of America Shanghai or another Affiliate of
Bank of America to Alpharma China (other than with respect to any amounts paid
under any indemnity by Agent or any Lender to Bank of America Shanghai or such
other Affiliate of Bank of America).

(d) By deleting the first sentence of clause (ii) of Section 4.1.1 of the Loan
Agreement and by substituting in lieu thereof the following:

(ii) Unless payment is otherwise timely made by Borrowers, the becoming due of
any amount required to be paid with respect to any of the Obligations (whether
as principal, accrued interest, fees or other charges, including Extraordinary
Expenses and LC Obligations, any amounts owed for Banking Relationship Debt )
shall be deemed irrevocably to be a request (without any requirement for the
submission of a Notice of Borrowing) for Revolver Loans on the due date of, and
in an aggregate amount required to pay, such Obligations, and the proceeds of
such Revolver Loans may be disbursed by way of direct payment of the relevant
Obligation and shall bear interest as Base Rate Loans; provided, however, that
for purposes of this clause (ii) of Section 4.1.1 only, the term Obligations
shall not include Banking Relationship Debt arising under the Chinese Credit
Facility or any banking services provided by Bank of America Shanghai or another
Affiliate of Bank of America to Alpharma China (other than with respect to any
amounts paid under any indemnity by Agent or any Lender to Bank of America
Shanghai or such other Affiliate of Bank of America).

(e) By deleting the first sentence of Section 6.2.4 of the Loan Agreement and by
substituting in lieu thereof the following:

On the effective date of termination of the Commitments by Agent or by
Borrowers, all of the Obligations shall be immediately due and payable, Lenders
shall have no obligation to make any Loans, Issuing Bank shall have no
obligation to issue any Letters of Credit, and BofA may terminate any Bank
Products (including any services or products under Cash Management Agreements),
provided, however, that with respect to the Chinese Credit Facility, such
Obligations shall not be immediately due and payable if Borrowers provide cash
collateral to Agent in an amount equal to 100% of the Chinese Credit Facility or
replacement collateral satisfactory in all respects to Bank of America Shanghai.

(f) By adding the following new clause (xvi) of Section 10.2.3 of the Loan
Agreement immediately following clause (xv) thereto, and by redesignating the
existing clause (xvi) of Section 10.2.3 of the Loan Agreement as clause (xvii)
thereof:

(xvi) the New Senior Notes and refinancings thereof so long as the Refinancing
Conditions are satisfied;

(g) By deleting clause (ii) of Section 10.2.6 of the Loan Agreement and by
substituting in lieu thereof the following:

(ii) Funded Debt (including the New Senior Notes but excluding the Obligations)
prior to the date on which any such payment is required to be made pursuant to
any instrument or agreement evidencing such Funded Debt, including any voluntary
prepayment, redemption, conversion, defeasance or other acquisition for value of
any such Funded Debt unless each of the Permitted Payment Conditions are
satisfied, and other than (a) payments in equity securities (as long as no
Change in Control would result therefrom); (b) payments of interest in-kind; (c)
prepayment in whole or in part with the proceeds of any equity securities issued
or capital contributions received by any Borrower or any Domestic Subsidiary for
the purpose of making such payment or prepayment; (d) refinancings of Debt to
the extent permitted under Section 10.2.3(vii) or (xvi); (e) prepayments,
repurchase, defeasance, retirement, satisfaction or redemption of the New Senior
Notes so long as each of the Permitted Payment Conditions is satisfied;
provided, that, no voluntary defeasance or redemption by Borrowers shall be
permitted on any date prior to March 1, 2014; and (f) payments permitted under
Section 10.2.6(i).

(h) By deleting Section 10.2.8 of the Loan Agreement in its entirety and by
substituting in lieu thereof the following:

10.2.8 Upstream Payments

. Create or suffer to exist any encumbrance or restriction on the ability of a
Domestic Subsidiary to make any Upstream Payment, except for encumbrances or
restrictions (i) pursuant to the Loan Documents, (ii) existing under Applicable
Law (iii) identified and fully disclosed in Schedule 10.2.8, (iv) under any
documents relating to joint ventures of any Obligor to the extent that such
joint ventures are not prohibited hereunder, (v) the foregoing shall not apply
to any restrictions in existence prior to the time any such Person became a
Subsidiary and not created in contemplation of any such acquisition, (vi) under
any agreement relating to the New Senior Notes, or any refinancing or
replacement thereof, and (vii) under any agreement relating to Debt incurred
under Section 10.2.3(xvii) to the extent not more restrictive than those
existing on the date hereof.

(i) By adding the following new Section 10.2.21 to the Loan Agreement
immediately following Section 10.2.20 thereof:

10.2.21 Amendments to New Senior Notes Documents

. Amend, modify or supplement, or permit any Subsidiary to amend, modify or
supplement (or consent to any amendment, modification or supplement of) any of
the New Senior Note Documents (or any replacements or substitutions or renewals
thereof), or pursuant to which the New Senior Notes are issued or extended,
except in connection with any refinancing thereof permitted under Section
10.2.3, if such amendment, modification or supplement provides for any of the
following or has any of the following effects:

(i) increases the aggregate principal amount of the New Senior Notes above
$300,000,000;

(ii) shortens the final maturity date of such Debt;

(iii) amends, modifies or adds any financial or negative covenants in a manner
which when taken as a whole is more onerous or more restrictive in any material
respect to Borrowers and their Domestic Subsidiaries taken as a whole or amends,
modifies or supplements any of the New Senior Note Documents to grant Liens in
any property of an Obligor to secure the New Senior Notes (which shall at all
times remain unsecured); or

(iv) results in any of the Loan Documents, the Commitments or any of the credit
facilities evidenced hereby, not constituting a permitted credit facility under
the New Senior Note Documents.

(j) By deleting Section 12.1.5 of the Loan Agreement in its entirety, and by
substituting the following in lieu thereof:

12.1.5 Other Defaults

. There shall occur any default or event of default on the part of any Obligor
under (i) the New Senior Notes (after giving effect to the expiration of any
grace period set forth therein), or (ii) any agreement, document or instrument
to which such Obligor is a party or by which such Obligor or any of its
Properties is bound, creating or relating to any Debt (excluding the Obligations
and the New Senior Notes) in excess of $10,000,000 if (after giving effect to
the expiration of any grace period set forth therein), in each case, the payment
or maturity of such Debt may be accelerated in consequence of such default or
event of default or demand for payment of such Debt may be made.

(k) By deleting Section 15.18 of the Loan Agreement in its entirety, and by
substituting the following in lieu thereof:

15.18 Certifications Regarding Indentures

.

Upon and after the New Senior Notes Issuance Date, on each day that Borrowers
request or are deemed to have requested any Loan, Letter of Credit or other
extension of credit hereunder, each Borrower hereby certifies to Agent and
Lenders that neither the execution or performance of this Agreement by Borrowers
nor the incurrence of any Debt pursuant to the terms of this Agreement or any of
the other Loan Documents violates any provision of the New Senior Notes
Indenture. Each Borrower further certifies to Agent and Lenders that (i) all of
the Commitments constitute a "Credit Facility" (or the equivalent term defined
in the New Senior Notes Indenture) under the New Senior Notes Documents, and
(ii) that all Obligations collectively constitute "Senior Indebtedenss" (or the
equivalent term defined in the New Senior Notes Indenture) under the New Senior
Notes Documents.

No Novation, etc

. The parties hereto acknowledge and agree that, except as set forth herein,
nothing in this letter agreement 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, and the Agent's and Lenders'
willingness to consent to the Proposed Issuance and the Chinese Facilities as
set forth herein, shall not extend to, or be deemed a consent, to any other
refinancing, issuance or other transactions other than in accordance with the
terms of the Loan Agreement. 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.

Acknowledgments and Stipulations; Representation and Warranties

. By its signature below, each Borrower hereby (a) ratifies and reaffirms the
Obligations, each of the Loan Documents and all of such Borrower's covenants,
duties, indebtedness and liabilities under the Loan Documents; (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
each 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.

Miscellaneous

. This letter agreement shall be governed by and construed in accordance with
the internal laws of the State of New York (but without regard to conflict of
law principles). This letter agreement shall be binding upon an inure to the
benefit of the parties and their respective successors and assigns. 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. Any signature delivered by a party by
facsimile transmission shall be deemed to be an original signature hereto. Each
Borrower agrees to take such further actions as Agent and Lenders 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. To the fullest extent permitted by Applicable Law, each of
the parties hereto hereby waives the right to trial by jury in any action, suit,
counterclaim or proceeding arising out of or related to this letter agreement.

[Signatures commence 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/ John M. Olsen____________________

John M. Olsen

, Senior Vice President  

DNB NOR BANK ASA

, as a Lender

By:_/s/ Philip F. Kurpiewski________________

Philip F. Kurpiewski, Senior Vice President

By:_/s/ Alfred C. Jones, III

Alfred C. Jones, III, Senior Vice President

 

PNC BANK, NATIONAL ASSOCIATION

, as a Lender

By:_/s/ Gordon Wilkins____________________

Gordon Wilkins, Vice President

 

ALPHARMA INC.

By: /s/ Jeffrey S. Campbell

Jeffrey S. Campbell

, Vice President and Interim Chief Financial Officer  

ALPHARMA OPERATING CORPORATION

By: /s/ Jeffrey S. Campbell

Jeffrey S. Campbell, President  

ALPHARMA U.S. INC.

By: /s/ Christine Sacco

Christine Sacco

, Treasurer

[CORPORATE SEAL]

 

ALPHARMA EURO HOLDINGS INC.

By: /s/ Christopher Towner

Christopher Towner

, Secretary  

ALPHARMA (BERMUDA) INC.

By: /s/ Christopher Towner

Christopher Towner

, Secretary  

ALPHARMA USHP INC.

By: /s/ Christopher Towner

Christopher Towner

, Secretary  

ALPHARMA ANIMAL HEALTH COMPANY

By: /s/ Jeffrey S. Campbell

Jeffrey S. Campbell

, Vice President and Treasurer  

MIKJAN CORPORATION

By: /s/ Jeffrey S. Campbell

Jeffrey S. Campbell, President  

ALPHARMA HOLDINGS INC.

By: /s/ Christopher Towenr

Christopher Towner

, Secretary

 

ALPHARMA SPECIALITY PHARMA INC.

By: /s/ Christopher Towner

Christopher Towner

, Secretary  

PUREPAC PHARMACEUTICAL HOLDINGS, INC.

By: /s/ Jeffrey S. Campbell

Jeffrey S. Campbell, President  

ALPHARMA BRANDED PRODUCTS DIVISION INC.

By: /s/ Ronald Warner

Ronald Warner, President and Chief Executive Officer

 

BARRE PARENT CORPORATION

By: /s/ Jeffrey S. Campbell

Jeffrey S. Campbell, President  

Exhibit A

New Senior Notes Terms

[provided by Borrowers - see attached]