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EX-10.2 - EX-10.2 - Bausch Health Companies Inc. | y86806exv10w2.htm |
EX-99.1 - EX-99.1 - Bausch Health Companies Inc. | y86806exv99w1.htm |
EX-4.3 - EX-4.3 - Bausch Health Companies Inc. | y86806exv4w3.txt |
EX-4.1 - EX-4.1 - Bausch Health Companies Inc. | y86806exv4w1.htm |
EX-3.1 - EX-3.1 - Bausch Health Companies Inc. | y86806exv3w1.htm |
EX-4.2 - EX-4.2 - Bausch Health Companies Inc. | y86806exv4w2.htm |
EX-99.2 - EX-99.2 - Bausch Health Companies Inc. | y86806exv99w2.htm |
EX-10.1 - EX-10.1 - Bausch Health Companies Inc. | y86806exv10w1.htm |
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 1, 2010 (September 27, 2010)
Valeant Pharmaceuticals International, Inc.
(Exact name of registrant as specified in its charter)
Canada | 001-14956 | 98-0448205 | ||
(State or other jurisdiction | (Commission File Number) | (IRS Employer | ||
of incorporation) | Identification Number) |
7150 Mississauga Road | ||
Mississauga, Ontario | ||
Canada | L5N 8M5 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (905) 286-3000
Biovail Corporation
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Table of Contents
Introductory Note
This Current Report on Form 8-K is being filed in connection with the consummation on
September 28, 2010 (the Effective Date), at 12:01 a.m., Eastern Daylight Time (the
Effective Time), of the merger and certain other transactions
contemplated by the Agreement and Plan of Merger, dated as of June 20, 2010 (the Merger
Agreement), by and among Biovail Corporation (Biovail), Biovail Americas Corp., a
wholly-owned subsidiary of Biovail (BAC), Beach Merger Corp., a wholly-owned subsidiary
of BAC (Merger Sub), and Valeant Pharmaceuticals International (Old Valeant).
At the Effective Time, pursuant to the terms and conditions of the Merger Agreement, Merger
Sub merged with and into Old Valeant, with Old Valeant surviving as a wholly owned subsidiary of
BAC (the Merger). In connection with the Merger, Biovail was renamed Valeant
Pharmaceuticals International, Inc. and is hereinafter referred to as the Company.
The descriptions contained in this Current Report on Form 8-K of the Merger Agreement and the
transactions contemplated thereby are not complete and are qualified in their entirety by the full
and complete text of the Merger Agreement, a copy of which is attached as Exhibit 2.1 to this
Current Report on Form 8-K and incorporated herein by reference.
The following transactions occurred in connection with the consummation of the Merger:
Item 1.01 Entry into a Material Definitive Agreement
The disclosure set forth in Item 2.03 below is incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement
Effective September 28, 2010, the Company terminated its Credit Agreement (the Existing Credit
Agreement), dated as of June 9, 2009, among the Company, the Lenders party thereto, JPMorgan
Chase Bank, N.A., Toronto Branch, as Administrative Agent, J.P. Morgan Securities Inc. and Scotia
Capital Inc., as Joint Bookrunners and Joint Lead Arrangers, The Bank of Nova Scotia and National
Bank of Canada, as Syndication Agents, and HSBC Bank Canada and The Toronto-Dominion Bank, as
Documentation Agents.
As of September 28, 2010, there were no extensions of credit outstanding under the Existing
Credit Agreement.
A description of the material terms of the Existing Credit Agreement was included in the
Companys Report of Foreign Private Issuer on Form 6-K filed
with the Securities and Exchange Commission (the SEC) on June 19, 2009. Such
description is incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets
At the Effective Time, each outstanding share of Old Valeant common stock, par value $0.01 per
share (Old Valeant Common Stock), (other than shares of Old Valeant Common Stock held by Old Valeant, as treasury stock, New Valeant, BAC or Merger Sub (all of which were canceled)) was converted into the right to receive 1.7809 of the
Companys common shares, no par value (the Common Shares), plus cash in lieu of
fractional shares. Based on the closing price of the Common Shares on September 27, 2010, Old
Valeant stockholders received consideration valued at approximately $3.6 billion.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
On September 27, 2010, Old Valeant secured financing consisting of extensions of credit and
commitments aggregating $2.75 billion under the New Credit Facilities (as defined below). On
September 27, 2010, Old Valeant used a portion of the proceeds from the New Credit Facilities to
undertake the transactions set forth below.
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1) | Old Valeant funded a one-time special cash dividend of $16.77 per share of Old Valeant Common Stock to Old Valeant stockholders of record as of the close of business on September 27, 2010 (the Pre-Merger Special Dividend) and dividend equivalent payments to holders of certain Old Valeant equity awards. | ||
2) | Old Valeant repaid in full, in an aggregate principal amount of $30 million, the Credit and Guaranty Agreement (the Old Valeant Existing Credit Facility), dated as of May 26, 2010, among Old Valeant, certain subsidiaries of Old Valeant, as Guarantors, Goldman Sachs Credit Partners L.P., as Sole Lead Arranger, and Goldman Sachs Bank USA, as Administrative Agent and Collateral Agent. | ||
3) | In accordance with the Indenture, dated as of June 9, 2009, between Old Valeant, the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A. (the 8.375% Trustee), Old Valeant defeased its 8.375% Senior Notes due 2016 (the 8.375% Notes) by depositing with the 8.375% Trustee an amount sufficient to pay 100% of the outstanding aggregate principal amount of the 8.375% Notes, plus the applicable premium, plus accrued and unpaid interest, on October 27, 2010, the redemption date. | ||
4) | In accordance with the Indenture, dated as of April 9, 2010, between Old Valeant, the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A. (the 7.625% Trustee), Old Valeant defeased its 7.625% Senior Notes due 2020 (the 7.625% Notes) by depositing with the 7.625% Trustee an amount sufficient to pay 100% of the outstanding aggregate principal amount of the 7.625% Notes, plus the applicable premium, plus accrued and unpaid interest, on October 27, 2010, the redemption date. |
As of the Effective Date, the New Credit Facilities were guaranteed by the Company and certain
of its subsidiaries (other than Old Valeant).
On the Effective Date, Old Valeant issued $1.2 billion aggregate principal amount of the
Senior Notes (as defined below) pursuant to the Senior Notes Indenture (as defined below), a
portion of the proceeds of which Old Valeant used on the Effective Date to pay down $1.0 billion in
term loans under the New Credit Facilities. Taking this into account, the aggregate amount of
financing obtained was $2.95 billion (the Merger Financing).
The following transactions took place in connection with the Merger Financing:
The New Credit Facilities
On September 27, 2010, Old Valeant entered into the Credit and Guaranty Agreement (the
Credit Agreement) with certain subsidiaries of Old Valeant, as Guarantors, each of the
lenders named therein, Goldman Sachs Lending Partners LLC (GSLP), Morgan Stanley Senior
Funding, Inc. and Jefferies Finance LLC, as Joint Lead Arrangers, Joint Bookrunners and Syndication
Agents, GSLP, as Administrative Agent and Collateral Agent, and each of Bank of America, N.A., DnB
NOR Bank ASA, SunTrust Bank and The Bank of Nova Scotia, as Documentation Agent. On September 28,
2010, the Company and certain of its subsidiaries entered into Counterpart Agreements to the
Credit Agreement, each in substantially the same form (such
Counterpart Agreement entered into by the Company being known as the Counterpart Agreement). The Credit Agreement consists of (1) a four-and-one half-year nonamortizing
$125 million senior secured revolving credit facility (the Revolving Credit Facility),
which will include a sublimit for the issuance of standby and commercial letters of credit and a
sublimit for swing line loans, (2) a five-year amortizing $1.0 billion senior secured term loan A
facility (the Tranche A Term Loan Facility) and (3) a six-year amortizing $1.625 billion senior secured term
loan B facility, consisting of a $1.5 billion tranche B term loan facility and a
$125 million delayed draw tranche B term loan facility (the Tranche B Term Loan
Facility, and together with the Revolving Credit Facility and the Tranche A Term Loan
Facility, the New Credit Facilities).
The loans under the Revolving Credit Facility may be made to, and the letters of credit under
the Revolving Credit Facility may be issued on behalf of, Old Valeant, provided that, after
the Effective Time, the Credit Agreement may be amended without the consent of the lenders
thereunder to permit the Company to borrow loans, and to have letters of credit issued on its
behalf, under the Revolving Credit Facility. The loans under the Tranche A Term Loan Facility and
the Tranche B Term Loan Facility were made to Old Valeant on September 27, 2010, and
were used for the purposes of (1) refinancing the Old Valeant Existing Credit Facility, the 8.375%
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Notes and the 7.625% Notes (collectively, the Refinancings),
(2) funding the
Pre-Merger Special Dividend and dividend equivalent payments to holders of certain Old Valeant equity awards and (3) paying fees and expenses incurred in connection with the
Refinancings and the New Credit Facilities. The loans under the delayed draw Tranche B Term Loan
Facility may be made to Old Valeant and used by the Company, together with cash on hand, for the
payment of a special dividend of $1.00 per common share of the Company that it is anticipated the Company will pay, subject to the discretion of the Board of Directors of the Company, and to
compliance with applicable law, on December 31, 2010, or such other date as the Board of Directors
of the Company may determine.
The New Credit Facilities provide that Old Valeant has the right at any time to seek
commitments to provide additional term loan facilities or additional revolving credit commitments
in an aggregate principal amount of up to $250 million. The lenders under the New Credit
Facilities are not under any obligation to provide any such additional term loan facilities or
revolving credit commitments.
All borrowings under the New Credit Facilities, including the additional term loan facilities
and revolving commitments, are subject to the satisfaction of customary conditions, including the
absence of a default or an event of default and the accuracy in all material respects of
representations and warranties.
Borrowings under the New Credit Facilities will bear interest at a rate per annum equal to, at
Old Valeants option, either (a) a base rate determined by reference to the higher of (1) the rate
of interest quoted in the print edition of The Wall Street Journal, Money Rates Section, as the
Prime Rate (currently defined as the base rate on corporate loans posted by at least 75% of the
nations thirty largest banks), (2) the federal funds effective rate plus 1/2 of 1% and (3) a LIBO rate determined by reference to the costs of funds for U.S. dollar deposits for a one-month interest period adjusted for certain additional costs plus 1% or (b) a LIBO rate determined by
reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such
borrowing adjusted for certain additional costs, in each case plus an applicable margin. For
purpose of determining the interest rate payable on loans under the Tranche B Term Loan Facility
under clauses (a) and (b) of the immediately preceding
sentence, the base rate and LIBO rate will in no event be
less than 2.50% and 1.50%, respectively. The applicable margin for borrowings under the Revolving Credit Facility will be
3.00% with respect to base rate borrowings and 4.00% with respect to LIBO rate borrowings. The
applicable margin for borrowings under the Tranche A Term Loan Facility will be 3.00% with respect
to base rate borrowings and 4.00% with respect to LIBO rate borrowings. The applicable margin for
borrowings under the Tranche B Term Loan Facility will be 3.00% with respect to base rate
borrowings and 4.00% with respect to LIBO rate borrowings.
In addition to paying interest on outstanding principal under the Revolving Credit Facility,
Old Valeant will be required to pay a commitment fee of 0.75% per annum in respect of the
unutilized commitments thereunder, payable quarterly in arrears. Old Valeant will also be required
to pay letter of credit fees on the maximum amount available to be drawn under all outstanding
letters of credit in an amount equal to the applicable margin on LIBO rate borrowings under the
Revolving Credit Facility on a per annum basis, payable quarterly in arrears, as well as customary
fronting fees for the issuance of letters of credit fees and agency fees.
Prior to the funding of the delayed draw commitments under the Tranche B Term Loan Facility,
Old Valeant will be required to pay a commitment fee equal to 0.75% per annum in respect of the
unutilized commitments thereunder, payable quarterly in arrears.
Subject to certain exceptions and customary baskets set forth in the Credit Agreement,
Old Valeant will be required to make mandatory prepayments of the loans under the Tranche A Term
Loan Facility and the Tranche B Term Loan Facility, on a pro rata basis, under certain
circumstances, including from (1) 100% of net cash proceeds from asset sales outside the ordinary
course of business (subject to reinvestment rights), (2) 100% of the net cash proceeds of insurance
and condemnation proceeds for property or asset losses (subject to
reinvestment rights and net proceeds
threshold), (3) 50%
(with a step down to 25% based on achievement of a specified leverage ratio) of the net cash
proceeds received from certain issuances of equity interests, (4) 100% of the net cash proceeds
from the incurrence of debt not otherwise permitted by the terms of the Credit Agreement and (5)
50% of annual excess cash flow (with a step down to 25% based on achievement of a specified
leverage ratio), with any excess amounts after the prepayment of the loans under the Tranche A Term
Loan Facility and the Tranche B Term Loan Facility to be applied against the outstanding amounts
under the Revolving Credit Facility. For so long as any loans under the Tranche A Term Loan
Facility remain outstanding, the lenders under the Tranche B Term Loan Facility will be permitted
to waive any mandatory prepayments of the loans under the Tranche B Term Loan Facility.
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Old Valeant will be permitted to voluntarily reduce the unutilized portion of the commitment
amount and repay outstanding loans under the New Credit Facilities at any time without premium or
penalty, other than customary breakage costs with respect to LIBO rate loans.
The Tranche A Term Loan Facility will mature on the five-year anniversary of the closing date
for the New Credit Facilities and will amortize in equal quarterly installments of 10% of the
original principal amount per year for each of the first and second years after such closing date
and in equal quarterly installments of 20% of the original principal amount per year for each of
the third and fourth years after such closing date, with the remaining balance amortizing in equal
quarterly installments in the last year. The Tranche B Term Loan Facility will mature on the
six-year anniversary of the closing date for the New Credit Facilities and will amortize in an
amount equal to 1% of the original principal amount per year payable in quarterly installments,
with the remaining balance to be due at the maturity of the Tranche B Term Loan Facility. The
Revolving Credit Facility will mature on the four-and-one-half-year anniversary of the closing date
for the New Credit Facilities and will not amortize.
Old Valeants obligations under the New Credit Facilities, as well as certain hedging
arrangements and cash management arrangements entered into with lenders under the New Credit
Facilities (or affiliates thereof), are guaranteed, as of September 27, 2010, or will be
guaranteed, by Old Valeants existing and future direct and indirect domestic subsidiaries and,
after the Effective Time, by the Company and its existing and future direct and indirect
subsidiaries (other than Old Valeant), in each case excluding immaterial subsidiaries designated by
Old Valeant or the Company from time to time that, individually or in the aggregate, constitute
less than (1) 7.5% of the total assets and (2) 7.5% of the total revenues of the Company and its
consolidated subsidiaries (including Old Valeant) at the time of designation and, in each case
subject to certain exclusions set forth in the credit documentation governing the New Credit
Facilities.
Old Valeants obligations and the obligations of the guarantors under the New Credit
Facilities and certain hedging arrangements and cash management arrangements entered into with
lenders under the New Credit Facilities (or affiliates thereof) are secured, or will be secured, by
first-priority security interests in substantially all tangible and intangible assets of Old
Valeant and the guarantors, including 100% of the capital stock of Old Valeant and each domestic
subsidiary of Old Valeant, 65% of the capital stock of each foreign subsidiary of Old Valeant that
is directly owned by Old Valeant or a guarantor and, after the Effective Time, 100% of the capital
stock of Old Valeant and each other subsidiary of the Company (other than Old Valeants
subsidiaries) that is owned by a guarantor, in each case subject to certain exclusions set forth in
the credit documentation governing the New Credit Facilities.
The New Credit Facilities contain a number of covenants that, among other things and subject
to certain exceptions, restrict Old Valeants ability and the ability of the Company and its
subsidiaries to:
| incur additional indebtedness; | ||
| create liens; | ||
| enter into agreements and other arrangements that include negative pledge clauses; | ||
| pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; | ||
| create restrictions on the payment of dividends or other distributions by subsidiaries; | ||
| make investments, loans, advances and acquisitions; | ||
| merge, amalgamate or sell assets, including equity interests of the subsidiaries; | ||
| enter into sale and leaseback transactions; | ||
| engage in transactions with affiliates; | ||
| enter into new lines of business; and | ||
| enter into amendments of or waivers under subordinated indebtedness, organizational documents and certain other material agreements. |
The Credit Agreement requires that the Company maintain a minimum interest coverage ratio and
a maximum leverage ratio. In addition, the Credit Agreement limits the aggregate amount of capital
expenditures permitted to be made during any fiscal year, subject to a limited one-year
carryforward of up to a maximum amount of $27.5 million for the unused capital expenditures capacity in any such fiscal year.
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The Credit Agreement will also contain certain customary affirmative covenants and events of
default. If an event of default, as specified in the Credit Agreement, shall occur and be
continuing, Old Valeant may be required to repay all amounts outstanding under the New Credit
Facilities.
The foregoing summary of the New Credit Facilities is not complete and is qualified in its
entirety by the full and complete text of (i) the Credit Agreement and (ii) the Counterpart Agreement,
copies of which are attached as Exhibits
10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
The Senior Notes Offering
On the Effective Date, Old Valeant completed its previously announced offering (the
Senior Notes Offering) of $500 million aggregate principal amount of 6.75% Senior Notes
due 2017 (the 2017 Notes) and $700 million aggregate principal amount of 7.00% Senior
Notes due 2020 (the 2020 Notes and, together with the 2017 Notes, the Senior
Notes) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of
1933, as amended (the Securities Act), and outside the United States to non-United States
persons pursuant to Regulation S under the Securities Act. The Senior Notes have not been and will
not be registered under the Securities Act or any state securities law and may not be offered or
sold in the United States absent registration or an applicable exemption from the registration
requirements. The Senior Notes are the senior unsecured obligations of Old Valeant and are jointly
and severally guaranteed on a senior unsecured basis by the Company and each of the Companys
subsidiaries (other than Old Valeant) that is a guarantor under the New Credit Facilities. Certain
of the future subsidiaries of Old Valeant and the Company may be required to guarantee the Senior
Notes.
A portion of the proceeds of the Senior Notes Offering were used to repay $1.0 billion of the
Term Loan B Facility and the remaining portion will be used for general corporate purposes.
The Senior Notes were issued pursuant to the Indenture, dated as of the Effective Date, among
Old Valeant, the Company, The Bank of New York Mellon Trust Company, as trustee, and the Company
and the other Guarantors named therein (the Senior Notes Indenture).
Pursuant to the Senior Notes Indenture, the 2017 Notes will mature on October 1, 2017, and the
2020 Notes will mature on October 1, 2020. The 2017 Notes will accrue interest at the rate of
6.75% per year and the 2020 Notes will accrue interest at the rate of 7.00% per year. Interest on
the Senior Notes will be payable semi-annually in arrears on each April 1 and October 1, commencing
on April 1, 2011.
Old Valeant may redeem all or a portion of the 2017 Notes at any time prior to October 1,
2014, and Old Valeant may redeem all or a portion of the 2020 notes at any time prior to October 1,
2015, in each case at a price equal to 100% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of redemption, plus a make-whole premium. On or after
October 1, 2014, Old Valeant may redeem all or a portion of the 2017 Notes, and on or after October
1, 2015, Old Valeant may redeem all or a portion of the 2020 Notes, in each case at the redemption
prices applicable to the 2017 Notes or the 2020 Notes, as applicable, as set forth in the Senior
Notes Indenture, plus accrued and unpaid interest to the date of redemption of the 2017 Notes or
the 2020 Notes, as applicable. In addition, prior to October 1, 2013, Old Valeant may redeem up to
35% of the aggregate principal amount of either the 2017 Notes or the 2020 Notes, in each case with
the net proceeds of certain equity offerings.
If Old
Valeant or the Company experiences a Change of Control (as defined in the Senior Notes Indenture),
unless Old Valeant has exercised its right to redeem all of the 2017 Notes or the 2020 Notes, as
applicable, each holder of 2017 Notes or 2020 Notes, as applicable, may require Old Valeant to
repurchase such holders 2017 Notes or 2020 Notes, as applicable, in whole or in part, at a
purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to
the purchase date of the 2017 Notes or 2020 Notes, as applicable.
The Senior Notes Indenture contains covenants that limit the ability of the Company and any of
its restricted subsidiaries (as such term is defined in the Senior Notes Indenture) to, among other
things:
| incur or guarantee additional debt; | ||
| make certain investments and other restricted payments; |
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| create liens; | ||
| enter into transactions with affiliates; | ||
| engage in mergers, consolidations or amalgamations; | ||
| repurchase capital stock, repurchase subordinated debt and make certain investments; and | ||
| transfer and sell assets. |
If an event of default, as specified in the Senior Notes Indenture, shall occur and be
continuing, either the trustee or the holders of a specified percentage of the Senior Notes may
accelerate the maturity of all the Senior Notes.
The foregoing summary of the Senior Notes Indenture is not complete and is qualified in its
entirety by reference to the full and complete text of the Senior Notes Indenture, a copy of which is attached
as Exhibit 4.1 to this Current Report on Form 8-K and incorporated herein by reference.
The Convertible Notes
On September 27,
2010, Old Valeant, the Company and The Bank of New York Mellon Trust Company,
N.A., as successor to The Bank of New York Mellon (formerly the Bank of New York) (the
Convertible Notes Trustee), entered into the First Supplemental Indenture to be effective
at the Effective Time (the First Supplemental Indenture) to the indenture dated as of
November 19, 2003 (the Base Indenture), by and between Old Valeant, Ribapharm Inc. and
the Convertible Notes Trustee. The First Supplemental Indenture (a) states that, as provided in
the Merger Agreement, each of Old Valeants 4.0% Convertible Notes due 2013 (the Convertible
Notes) issued pursuant to the Base Indenture became convertible solely into the number of
Common Shares that the holder of such Convertible Note would have received pursuant to the Merger
Agreement if such holder had converted such Convertible Note immediately before the Effective Time
and (b) provides that the Company fully and unconditionally guarantees, on a subordinated basis,
the full and punctual payment when due of all obligations of Old Valeant under the Base Indenture,
whether for payment of principal or interest on the Convertible Notes, and all other monetary
obligations of Old Valeant under the Convertible Notes. As of the Effective Time, the outstanding
principal amount of the Convertible Notes was approximately $225 million.
The guarantee is the unsecured obligation of the
Company, ranking equally in right of payment with all of the Companys existing and future subordinated
indebtedness and junior in right of payment to all of the Companys unsubordinated indebtedness. Interest on the
Convertible Notes is payable semi-annually on May 15 and November 15 of each year. In addition, Old Valeant has
the right to redeem the Convertible Notes, in whole or in part, at their principal amount on or after May 20, 2011.
Upon conversion, Old Valeant has the right to satisfy the conversion obligations by delivery, at Old Valeants option,
in Common Shares, in cash or a combination thereof. The Convertible Notes are subordinated unsecured
obligations, ranking junior in right of payment to Old Valeants senior debt. The Base Indenture provides for
customary events of default, including the failure by Old Valeant to pay any indebtedness on any debt instrument in
excess of $15 million at final maturity (either at the stated maturity or upon acceleration thereof).
The foregoing
summary of the First Supplemental Indenture and the Base Indenture are not complete, and qualified in
their entirety by reference to the full and complete text of (i) the First Supplemental Indenture and
(ii) the Base Indenture, copies
of which are attached as Exhibits 4.2 and 4.3, respectively, to this Current Report on Form 8-K and incorporated herein by
reference.
In connection with Old Valeants offering of the Convertible Notes, Old Valeant entered into convertible
note hedge and written call option transactions with respect to its
common stock (the Convertible Note Hedge).
The Convertible Note Hedge was expected to reduce the potential dilution from conversion of the Convertible Notes.
In connection with the Merger, New Valeant agreed to guarantee Old Valeants obligations under the written call
option transactions entered into by Old Valeant as part of the Convertible Note Hedge.
Item 3.03 Material Modification to Rights of Security Holders
The disclosure set forth in Item 5.03 below is incorporated herein by reference.
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
Composition of the Companys Board of Directors
At the Effective Time, in accordance with the Merger Agreement, each of the following
individuals tendered his resignation from the Companys Board of Directors:
1) | Douglas J.P. Squires; | ||
2) | J. Spencer Lanthier; | ||
3) | Serge Gouin; | ||
4) | David H. Laidley; |
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5) | Mark Parrish; | ||
6) | Frank Potter; and | ||
7) | Sir Louis R. Tull. |
At the Effective Time, in accordance with the Merger Agreement, the Companys Board of
Directors appointed the following individuals, each of whom (except where noted) served as a
director of Old Valeant immediately prior to the Effective Time (the New Directors), to
serve on the Companys Board of Directors until the next meeting of shareholders at which directors
are elected:
1) | J. Michael Pearson; | ||
2) | Robert A. Ingram; | ||
3) | Theo Melas-Kyriazi; | ||
4) | G. Mason Morfit; | ||
5) | Norma A. Provencio; and | ||
6) | Katharine B. Stevenson.* |
* | Pursuant to the Merger Agreement, Katharine B. Stevenson was selected to serve on the Companys Board of Directors by Old Valeant from a list of candidates chosen by an independent search firm mutually retained by Old Valeant and the Company and such selection was approved by the Company. Ms. Stevenson did not previously serve as a director of the Company or Old Valeant. |
In connection with their appointments as directors, each of the New Directors (except for Mr.
Pearson), is eligible to participate in the Companys Deferred Share Unit Plan for Canadian
Directors or the Companys Deferred Share Unit Plan for U.S. Directors, as the case may be. These
plans are described in the Companys Definitive Proxy Statement on Schedule 14A filed on April 21,
2010. Such descriptions are incorporated herein by reference.
The following table sets forth the membership of the various committees of the Board of
Directors of the Company as determined by the Companys Board of Directors on the Effective Date:
Committee | Membership | |
Audit Committee | Michael R. Van Every (Chairperson) Theo Melas-Kyriazi |
|
Norma A. Provencio | ||
Katharine B. Stevenson | ||
Nominating and Corporate Governance Committee | G. Mason Morfit (Chairperson) | |
Robert A. Ingram | ||
Robert N. Power | ||
Lloyd M. Segal | ||
Compensation Committee | Robert N. Power (Chairperson) | |
G. Mason Morfit | ||
Norma A. Provencio | ||
Risk and Compliance Committee | Theo Melas-Kyriazi (Chairperson) | |
Dr. Laurence E. Paul | ||
Katharine B. Stevenson | ||
Michael R. Van Every |
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Committee | Membership | |
Special Committee (Monitors & Corporate Integrity Agreement) |
Norma A. Provencio (Chairperson) Michael R. Van Every |
|
Transactions Committee* | Dr. Laurence E. Paul (Chairperson) Theo Melas-Kyriazi |
|
G. Mason Morfit | ||
Lloyd M. Segal |
* | The Board of Directors of the Company created the Transactions Committee and appointed its membership on the Effective Date. |
At the Effective Time and pursuant to the Merger Agreement and the terms of the Biovail
Corporation Non-Executive Chairman and Biovail Laboratories International SRL President Agreement
(the Wells Chairman Agreement), dated as of June 20, 2010, among the Company, Biovail
Laboratories International SRL (BLS) and William M. Wells, the Company terminated Mr.
Wells employment as Chief Executive Officer of the Company. Concurrent with the termination of
Mr. Wells employment as Chief Executive Officer, pursuant to the Merger Agreement and the Wells
Chairman Agreement, the Companys Board of Directors elected Mr. Wells to serve as Chairman of
the Board of Directors. The material terms of the Wells Chairman Agreement are described in the
Companys Current Report on Form 8-K filed on June 23, 2010. Such description is incorporated
herein by reference.
The foregoing summary of the Wells Chairman Agreement is not complete and is qualified in
its entirety by the full and complete text of the Wells Chairman
Agreement, a copy of which is attached as
Exhibit 10.3 to this Current Report on Form 8-K and
is incorporated herein by reference.
Other Changes in Management
At the Effective Time and pursuant to the Merger Agreement and the terms of the Employment
Agreement, dated as of June 20, 2010, by and between the Company, BLS and Mr. Pearson (the
Pearson Employment Agreement), the Companys Board of Directors appointed Mr. Pearson as
Chief Executive Officer of the Company. Mr. Pearson was also appointed to serve on the Companys
Board of Directors. The material terms of the Pearson Employment Agreement are described in the
Companys Current Report on Form 8-K filed on June 23, 2010. Such description is incorporated
herein by reference.
The foregoing summary of the Pearson Employment Agreement is not complete and is qualified in
its entirety by the full and complete text of the Pearson Employment
Agreement, a copy of which is attached
as Exhibit 10.4 to this Current Report on Form 8-K and is incorporated herein by reference.
On the Effective Date, pursuant to integration planning related to the Merger, each of the
following individuals employment was terminated, and each was removed from his or her position as
an executive officer of the Company:
1) | Gilbert Godin and | ||
2) | Gregory D. Gubitz. |
On
the Effective Date, pursuant to integration planning related to the
Merger, each of the following individuals ceased to serve as an executive officer of the Company:
1) | H. Christian Fibiger; and | ||
2) | Christine C. Mayer. |
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On the Effective Date, the Companys Board of Directors determined that Margaret Mulligan
will remain the Companys Chief Financial Officer and will also
serve as Executive Vice President and Mark Durham will remain Senior Vice
President, Human Resources. Also on the Effective Date, in addition to the appointment of Mr.
Pearson as Chief Executive Officer of the Company, the Companys Board of Directors appointed Rajiv
De Silva as President, Valeant Pharmaceuticals International, Inc.
and Chief Operating Officer, Specialty Pharmaceuticals and Robert Chai-Onn
as Executive Vice President, General Counsel and Corporate Secretary . Set forth below is a
description of the prior business experience of Messrs. Pearson, De Silva and Chai-Onn.
J. Michael Pearson, 51. Mr. Pearson has served as the Chief Executive Officer and Chairman of
the Board of Directors of Old Valeant since February 2008. Prior to joining Old Valeant,
Mr. Pearson was a Director at McKinsey. Mr. Pearson joined McKinsey in 1985 and over a 23-year
career he worked with leading CEOs and was an integral driver of major turnarounds, acquisitions,
and corporate strategy. Within McKinsey, Mr. Pearson held various positions, including as a member
of McKinseys Board of Directors, head of its global pharmaceutical practice and head of its
mid-Atlantic region.
Rajiv de Silva, 43. Mr. De Silva has served as the Chief Operating Officer of Specialty
Pharmaceuticals of Old Valeant since January 2009. Prior to joining Old Valeant, Mr. De Silva held
various leadership positions with Novartis AG (Novartis). He was President, Novartis Vaccines
USA and Head, Vaccines of the Americas since 2007, during which time he played a key leadership
role at Novartis Vaccines & Diagnostics Division and served as a member of the Executive Committee
of Novartis Vaccines & Diagnostics. From 2005 to 2007, he served as President, Novartis
Pharmaceuticals Canada. He originally joined Novartis as Global Head, Strategic Planning for
Novartis Pharma AG, in Basel, Switzerland, in 2003. Prior to his time at Novartis, Mr. De Silva
was a Principal at McKinsey, where he focused his consulting practice on the pharmaceutical
industry. During his nine years at McKinsey, he led multiple efforts related to pharmaceutical
strategy, sales and marketing, research and development operations, organization design, and
mergers and acquisitions.
Robert Chai-Onn, 40. Mr. Chai-Onn has served as Vice President, Assistant General Counsel at
Old Valeant since 2004. Prior to joining Old Valeant, Mr. Chai-Onn was a corporate lawyer at the law firm of Gibson, Dunn & Crutcher LLP, where he worked primarily in the areas of mergers and acquisitions, securities and corporate finance, in addition to providing general corporate advice to public and private companies.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
At the Effective Time, in accordance with the Merger Agreement and as approved by the
Companys shareholders at the special meeting of shareholders held on September 27, 2010, the
Company filed Articles of Amendment to its Articles of Continuance (the Articles of
Amendment) to change the Companys name from Biovail Corporation to Valeant Pharmaceuticals
International, Inc.
The reasons for such change are described in the Companys Registration Statement on Form S-4
filed on July 21, 2010, as amended by Amendment No. 1 filed on August 18, 2010. Such descriptions are incorporated herein by reference.
The Articles of Amendment are attached as Exhibit 3.1 to this Current Report on Form 8-K and are
incorporated herein by reference.
Item 5.07 Submission of Matters to a Vote of Security Holders
On September 27, 2010, the Company held a special meeting of shareholders at which the
Companys shareholders voted on following two proposals:
1) | To issue such number of Common Shares in the capital of the Company as is necessary to complete the Merger, being 1.7809 Common Shares in the capital of the Company for each share of Old Valeant Common Stock, and such other Common Shares in the capital of the Company as contemplated by the Merger Agreement (the Share Issuance Resolution); and |
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2) | To amend the Articles of Continuance of the Company to change the name of the Company from Biovail Corporation to Valeant Pharmaceuticals International, Inc. (the Name Change Resolution). |
For each of the foregoing proposals, a quorum was present for the purposes of the vote.
Shareholders present in person at the special meeting or by proxy voted to approve the Share
Issuance Resolution as follows:
Number of Votes Cast in Favor |
124,792,772 | |||
Number of Votes Cast Against |
125,825 | |||
Number of
Votes Abstaining |
0 |
Shareholders present in person at the special meeting or by proxy voted to approve the Name
Change Resolution as follows:
Number of Votes Cast in Favor |
124,775,152 | |||
Number of Votes Cast Against |
143,444 | |||
Number of
Votes Abstaining |
1 |
The votes cast in favor of both the Share Issuance Resolution and the Name Change
Resolution represented 78.7% of the Common Shares issued and outstanding as of the
record date for the special meeting and 99.9% of the Common Shares present in person or
represented by proxy at the special meeting.
On September 27, 2010, the Company issued a press release announcing the foregoing voting
results of the special meeting of shareholders. Such press release is attached as Exhibit 99.1 to
this Current Report on Form 8-K and is incorporated herein by reference.
Item 8.01 Other Events
A copy of the press release announcing Old Valeants declaration of the Pre-Merger
Special
Dividend and the consummation of
the Merger is attached as Exhibit 99.2 to this Current Report on Form 8-K and is
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(a) Financial statements of business acquired.
The financial statements required by Item 9.01(a) of Form 8-K will be filed by amendment
within 71 calendar days after the date on which this Current Report on Form 8-K must be filed.
(b) Pro forma financial information.
The pro forma financial statements required by Item 9.01(b) of Form 8-K will be filed by
amendment within 71 calendar days after the date on which this Current Report on Form 8-K must be
filed.
(c) Shell company transactions.
Not applicable.
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(d) Exhibits.
2.1
|
Agreement and Plan of Merger, dated as of June 20, 2010, among Valeant Pharmaceuticals International, Biovail Corporation, Biovail Americas Corp. and Beach Merger Corp. (incorporated by reference to Exhibit 2.1 of the Companys Current Report on Form 8-K filed on June 23, 2010). | |
3.1
|
Articles of Amendment to the Articles of Continuance of Valeant Pharmaceuticals International, Inc., dated September 28, 2010. | |
4.1
|
Indenture, dated as of September 28, 2010, among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., The Bank of New York Mellon Trust Company, N.A., as trustee, and the Guarantors listed therein. | |
4.2
|
First Supplemental Indenture dated as of September 27, 2010, and effective as of September 28, 2010, to the Indenture dated as of November 19, 2003, between Valeant Pharmaceuticals International, Ribapharm Inc. and The Bank of New York Mellon Trust Company, N.A, as successor to The Bank of New York Mellon (formerly the Bank of New York) (the Convertible Notes Trustee), between Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc. (formerly known as Biovail Corporation), and the Convertible Notes Trustee. | |
4.3
|
Indenture, dated November 19, 2003, between Valeant Pharmaceuticals International, Ribapharm Inc. and The Bank of New York Mellon Trust Company, N.A, as successor to The Bank of New York Mellon (formerly The Bank of New York). | |
10.1
|
Credit and Guaranty Agreement, dated as of September 27, 2010, among Valeant Pharmaceuticals International and, upon consummation of the Merger and delivery of the Counterpart Agreement pursuant to Section 5.16 thereto, the Company, certain subsidiaries of Valeant Pharmaceuticals International, as Guarantors, and, upon consummation of the Merger and delivery of the Counterpart Agreement pursuant to Section 5.16 thereto, certain subsidiaries of the Company, as Guarantors, each of the lenders named therein, Goldman Sachs Lending Partners LLC (GSLP), Morgan Stanley Senior Funding, Inc. and Jefferies Finance LLC, as Joint Lead Arrangers, Joint Bookrunners and Syndication Agents, GSLP, as Administrative Agent and Collateral Agent, and each of Bank of America, N.A., DnB NOR Bank ASA, SunTrust Bank and The Bank of Nova Scotia, as Documentation Agent. | |
10.2
|
Counterpart Agreement, dated as of September 28, 2010, between Valeant Pharmaceuticals International, Inc. and Goldman Sachs Lending Partners LLC, as Administrative Agent and Collateral Agent. | |
10.3
|
Biovail Corporation Non-Executive Chairman and Biovail Laboratories International SRL President Agreement, dated as of June 20, 2010, among Biovail Corporation, Biovail Laboratories International SRL and William M. Wells (incorporated by reference to Exhibit 10.4 to the Companys Current Report on Form 8-K filed on June 23, 2010). | |
10.4
|
Employment Agreement, dated as of June 20, 2010, by and between Biovail Corporation, Biovail Laboratories International SRL and J. Michael Pearson (incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K filed on June 23, 2010). | |
99.1
|
Press release of Biovail Corporation, issued on September 27, 2010. | |
99.2
|
Press release of Valeant Pharmaceuticals International, Inc., issued on September 28, 2010. |
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
VALEANT PHARMACEUTICALS INTERNATIONAL, INC., | ||||||
by | /s/ Margaret Mulligan | |||||
Title: Chief Financial Officer |
Date: October 1, 2010
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Exhibit Index
Exhibit No. | Description | |
2.1
|
Agreement and Plan of Merger, dated as of June 20, 2010, among Valeant Pharmaceuticals International, Biovail Corporation, Biovail Americas Corp. and Beach Merger Corp. (incorporated by reference to Exhibit 2.1 of the Companys Current Report on Form 8-K filed on June 23, 2010). | |
3.1*
|
Articles of Amendment to the Articles of Continuance of Biovail Corporation, dated September 28, 2010. | |
4.1*
|
Indenture, dated as of September 28, 2010, among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., The Bank of New York Mellon Trust Company, N.A., as trustee, and the Guarantors listed therein. | |
4.2*
|
First Supplemental Indenture dated as of September 27, 2010, and effective as of September 28, 2010, to the Indenture dated as of November 19, 2003, between Valeant Pharmaceuticals International, Ribapharm Inc. and The Bank of New York Mellon Trust Company, N.A, as successor to The Bank of New York Mellon (formerly the Bank of New York) (the Convertible Notes Trustee), between Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc. (formerly known as Biovail Corporation), and the Convertible Notes Trustee. | |
4.3*
|
Indenture, dated November 19, 2003, between Valeant Pharmaceuticals International, Ribapharm Inc. and The Bank of New York Mellon Trust Company, N.A, as successor to The Bank of New York Mellon (formerly The Bank of New York). | |
10.1*
|
Credit and Guaranty Agreement, dated as of September 27, 2010, among Valeant Pharmaceuticals International and, upon consummation of the Merger and delivery of the Counterpart Agreement pursuant to Section 5.16 thereto, the Company, certain subsidiaries of Valeant Pharmaceuticals International, as Guarantors, and, upon consummation of the Merger and delivery of the Counterpart Agreement pursuant to Section 5.16 thereto, certain subsidiaries of the Company, as Guarantors, each of the lenders named therein, Goldman Sachs Lending Partners LLC (GSLP), Morgan Stanley Senior Funding, Inc. and Jefferies Finance LLC, as Joint Lead Arrangers, Joint Bookrunners and Syndication Agents, GSLP, as Administrative Agent and Collateral Agent, and each of Bank of America, N.A., DnB NOR Bank ASA, SunTrust Bank and The Bank of Nova Scotia, as Documentation Agent. | |
10.2*
|
Counterpart Agreement, dated as of September 28, 2010, between Valeant Pharmaceuticals International, Inc. and Goldman Sachs Lending Partners LLC, as Administrative Agent and Collateral Agent. | |
10.3
|
Biovail Corporation Non-Executive Chairman and Biovail Laboratories International SRL President Agreement, dated as of June 20, 2010, among Biovail Corporation, Biovail Laboratories International SRL and William M. Wells (incorporated by reference to Exhibit 10.4 to the Companys Current Report on Form 8-K filed on June 23, 2010). | |
10.4
|
Employment Agreement, dated as of June 20, 2010, by and between Biovail Corporation, Biovail Laboratories International SRL and J. Michael Pearson (incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K filed on June 23, 2010). | |
99.1*
|
Press release of Biovail Corporation, issued on September 27, 2010. | |
99.2*
|
Press release of Valeant Pharmaceuticals International, Inc., issued on September 28, 2010. |
* | Filed herewith |
13