UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q |
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x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended June 30, 2015 |
OR |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
Commission File Number: 001-14956
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
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British Columbia, Canada (State or other jurisdiction of incorporation or organization) | 98-0448205 (I.R.S. Employer Identification No.) |
2150 St. Elzéar Blvd. West, Laval, Quebec (Address of principal executive offices) | H7L 4A8 (Zip Code) |
(514) 744-6792
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer x | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common shares, no par value — 342,788,885 shares outstanding as of July 22, 2015.
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2015
INDEX
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Part I. | Financial Information | |
Item 1. | | |
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Item 2. | | |
Item 3. | | |
Item 4. | | |
Part II. | Other Information | |
Item 1. | | |
Item 1A. | | |
Item 2. | | |
Item 3. | | |
Item 4. | | |
Item 5. | | |
Item 6. | | |
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VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2015
Introductory Note
Except where the context otherwise requires, all references in this Quarterly Report on Form 10-Q (this “Form 10-Q”) to the “Company”, “we”, “us”, “our” or similar words or phrases are to Valeant Pharmaceuticals International, Inc. and its subsidiaries.
In this Form 10-Q, references to “$” are to United States (“U.S.”) dollars, references to “€” are to Euros, and references to RUR are to Russian rubles.
Forward-Looking Statements
Caution regarding forward-looking information and statements and “Safe-Harbor” statements under the U.S. Private Securities Litigation Reform Act of 1995:
To the extent any statements made in this Form 10-Q contain information that is not historical, these statements are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and may be forward-looking information within the meaning defined under applicable Canadian securities legislation (collectively, “forward-looking statements”).
These forward-looking statements relate to, among other things: the expected benefits of our acquisitions and other transactions (including the acquisition of Salix Pharmaceuticals, Ltd. (“Salix”)), such as cost savings, operating synergies and growth potential of the Company; our business strategy, business plans and prospects, product pipeline, prospective products or product approvals, future performance or results of current and anticipated products; exposure to foreign currency exchange rate changes and interest rate changes; the outcome of contingencies, such as certain litigation, investigations and regulatory proceedings; general market conditions; and our expectations regarding our financial performance, including revenues, expenses, gross margins, liquidity and income taxes.
Forward-looking statements can generally be identified by the use of words such as “believe”, “anticipate”, “expect”, “intend”, “estimate”, “plan”, “continue”, “will”, “may”, “could”, “would”, “should”, “target”, “potential”, “opportunity”, “tentative”, “positioning”, “designed”, “create”, “predict”, “project”, “forecast”, “seek”, “ongoing”, “increase”, or “upside” and variations or other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements may not be appropriate for other purposes. Although we have indicated above certain of these statements set out herein, all of the statements in this Form 10-Q that contain forward-looking statements are qualified by these cautionary statements. These statements are based upon the current expectations and beliefs of management. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, including, but not limited to, factors and assumptions regarding the items outlined above. Actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following:
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• | the challenges and difficulties associated with managing the rapid growth of our Company and a large complex business; |
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• | our ability to retain, motivate and recruit executives and other key employees; |
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• | the introduction of products that compete against our products that do not have patent or data exclusivity rights; |
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• | our ability to compete against companies that are larger and have greater financial, technical and human resources than we do, as well as other competitive factors, such as technological advances achieved, patents obtained and new products introduced by our competitors; |
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• | our ability to identify, finance, acquire, close and integrate acquisition targets successfully and on a timely basis; |
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• | factors relating to the acquisition and integration of the companies, businesses and products acquired by the Company, such as the time and resources required to integrate such companies, businesses and products, the difficulties associated with such integrations (including potential disruptions in sales activities and potential challenges with information technology systems integrations), the difficulties and challenges associated with entering into new business areas and new geographic markets, the difficulties, challenges and costs associated with managing and integrating new facilities, |
equipment and other assets, and the achievement of the anticipated benefits from such integrations, as well as risks associated with the acquired companies, businesses and products;
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• | factors relating to our ability to achieve all of the estimated synergies from our acquisitions as a result of cost-rationalization and integration initiatives. These factors may include greater than expected operating costs, the difficulty in eliminating certain duplicative costs, facilities and functions, and the outcome of many operational and strategic decisions, some of which have not yet been made; |
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• | factors relating to our recent acquisition of Salix, including the impact of substantial additional debt on our financial condition and results of operations; our ability to effectively and efficiently integrate the operations of the Company and Salix; our ability to achieve the estimated synergies from this transaction; the challenges associated with entering into Salix's gastrointestinal (GI) business, which is a new business for our Company; our ability to further reduce wholesaler inventory levels of certain of Salix's products and the timing of such reduction; and, once integrated, the effects of such business combination on our future financial condition, operating results, strategy and plans; |
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• | our ability to secure and maintain third party research, development, manufacturing, marketing or distribution arrangements; |
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• | our eligibility for benefits under tax treaties and the continued availability of low effective tax rates for the business profits of certain of our subsidiaries; |
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• | our substantial debt and debt service obligations and their impact on our financial condition and results of operations; |
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• | our future cash flow, our ability to service and repay our existing debt, our ability to raise additional funds, if needed, and any restrictions that are or may be imposed as a result of our current and future indebtedness, in light of our current and projected levels of operations, acquisition activity and general economic conditions; |
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• | any downgrade by rating agencies in our corporate credit ratings, which may impact, among other things, our ability to raise additional debt capital and implement elements of our growth strategy; |
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• | interest rate risks associated with our floating rate debt borrowings; |
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• | the risks associated with the international scope of our operations, including our presence in emerging markets and the challenges we face when entering new geographic markets (including the challenges created by new and different regulatory regimes in such countries); |
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• | adverse global economic conditions and credit markets and foreign currency exchange uncertainty and volatility in the countries in which we do business (such as the recent instability in Russia, Ukraine and the Middle East); |
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• | economic factors over which the Company has no control, including changes in inflation, interest rates, foreign currency rates, and the potential effect of such factors on revenues, expenses and resulting margins; |
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• | the introduction of generic competitors of our branded products; |
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• | our ability to obtain and maintain sufficient intellectual property rights over our products and defend against challenges to such intellectual property; |
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• | the expense, timing and outcome of legal proceedings, arbitrations, investigations, tax and other regulatory audits, and regulatory proceedings and settlements thereof (including the matters assumed as part of our acquisition of Salix); |
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• | the risk that our products could cause, or be alleged to cause, personal injury and adverse effects, leading to potential lawsuits, product liability claims and damages and/or withdrawals of products from the market; |
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• | the availability of and our ability to obtain and maintain adequate insurance coverage and/or our ability to cover or insure against the total amount of the claims and liabilities we face, whether through third party insurance or self-insurance; |
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• | the difficulty in predicting the expense, timing and outcome within our legal and regulatory environment, including with respect to approvals by the U.S. Food and Drug Administration (the "FDA"), Health Canada and similar agencies in other countries, legal and regulatory proceedings and settlements thereof, the protection afforded by our patents and other intellectual and proprietary property, successful generic challenges to our products and infringement or alleged infringement of the intellectual property of others; |
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• | the results of continuing safety and efficacy studies by industry and government agencies; |
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• | ongoing oversight and review of our products and facilities by regulatory and governmental agencies, including periodic audits by the FDA, and the results thereof; |
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• | the availability and extent to which our products are reimbursed by government authorities and other third party payors, as well as the impact of obtaining or maintaining such reimbursement on the price of our products; |
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• | the inclusion of our products on formularies or our ability to achieve favorable formulary status, as well as the impact on the price of our products in connection therewith; |
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• | the impact of price control restrictions on our products, including the risk of mandated price reductions; |
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• | the success of preclinical and clinical trials for our drug development pipeline or delays in clinical trials that adversely impact the timely commercialization of our pipeline products, as well as factors impacting the commercial success of our currently marketed products, which could lead to material impairment charges; |
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• | the results of management reviews of our research and development portfolio, conducted periodically and in connection with certain acquisitions, the decisions from which could result in terminations of specific projects which, in turn, could lead to material impairment charges; |
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• | negative publicity or reputational harm to our products and business; |
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• | the uncertainties associated with the acquisition and launch of new products, including, but not limited to, the acceptance and demand for new pharmaceutical products, and the impact of competitive products and pricing; |
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• | our ability to obtain components, raw materials or finished products supplied by third parties and other manufacturing and related supply difficulties, interruptions and delays; |
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• | the disruption of delivery of our products and the routine flow of manufactured goods; |
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• | the seasonality of sales of certain of our products; |
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• | declines in the pricing and sales volume of certain of our products that are distributed or marketed by third parties, over which we have no or limited control; |
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• | compliance with, or the failure to comply with, health care “fraud and abuse” laws and other extensive regulation of our marketing, promotional and pricing practices, worldwide anti-bribery laws (including the U.S. Foreign Corrupt Practices Act), worldwide environmental laws and regulation and privacy and security regulations; |
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• | the impacts of the Patient Protection and Affordable Care Act (as amended) and other legislative and regulatory healthcare reforms in the countries in which we operate; |
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• | potential ramifications, including possible financial penalties, relating to Salix's restatement of its historical financial results and our ability to address historic weaknesses in Salix's internal control over financial reporting; |
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• | interruptions, breakdowns or breaches in our information technology systems; and |
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• | other risks detailed from time to time in our filings with the U.S. Securities and Exchange Commission (the “SEC”) and the Canadian Securities Administrators (the “CSA”), as well as our ability to anticipate and manage the risks associated with the foregoing. |
Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found under Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, under Item 1A. "Risk Factors" of Part II of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, and in the Company's other filings with the SEC and CSA. When relying on our forward-looking statements to make decisions with respect to the Company, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. These forward-looking statements speak only as of the date made. We undertake no obligation to update or revise any of these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect actual outcomes, except as required by law. We caution that, as it is not possible to predict or identify all relevant factors that may impact forward-looking statements, the foregoing list of important factors that may affect future results is not exhaustive and should not be considered a complete statement of all potential risks and uncertainties.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(All dollar amounts expressed in millions of U.S. dollars)
(Unaudited)
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| | | | | | | |
| As of June 30, 2015 | | As of December 31, 2014 |
Assets | | | |
Current assets: | | | |
Cash and cash equivalents | $ | 958.0 |
| | $ | 322.6 |
|
Trade receivables, net | 2,371.0 |
| | 2,075.8 |
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Inventories, net | 1,229.5 |
| | 950.6 |
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Prepaid expenses and other current assets | 1,075.3 |
| | 650.8 |
|
Deferred tax assets, net | 711.4 |
| | 193.3 |
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Total current assets | 6,345.2 |
| | 4,193.1 |
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Property, plant and equipment, net | 1,359.9 |
| | 1,310.5 |
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Intangible assets, net | 23,149.7 |
| | 11,255.9 |
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Goodwill | 17,233.1 |
| | 9,346.4 |
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Deferred tax assets, net | 88.3 |
| | 54.0 |
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Other long-term assets, net | 167.0 |
| | 167.4 |
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Total assets | $ | 48,343.2 |
| | $ | 26,327.3 |
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| | | |
Liabilities | | | |
Current liabilities: | | | |
Accounts payable | $ | 415.8 |
| | $ | 398.0 |
|
Accrued and other current liabilities | 3,054.7 |
| | 2,179.4 |
|
Acquisition-related contingent consideration | 191.4 |
| | 141.8 |
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Current portion of long-term debt | 590.9 |
| | 0.9 |
|
Deferred tax liabilities, net | 38.2 |
| | 10.7 |
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Total current liabilities | 4,291.0 |
| | 2,730.8 |
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Acquisition-related contingent consideration | 514.4 |
| | 167.0 |
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Long-term debt | 30,290.2 |
| | 15,228.0 |
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Pension and other benefit liabilities | 226.4 |
| | 239.8 |
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Liabilities for uncertain tax positions | 101.2 |
| | 102.6 |
|
Deferred tax liabilities, net | 6,152.8 |
| | 2,227.5 |
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Other long-term liabilities | 208.8 |
| | 197.1 |
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Total liabilities | 41,784.8 |
| | 20,892.8 |
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Commitments and contingencies (Note 15) |
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|
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Equity | | | |
Common shares, no par value, unlimited shares authorized, 342,769,031 and | | | |
334,402,964 issued and outstanding at June 30, 2015 and December 31, 2014, respectively | 9,880.8 |
| | 8,349.2 |
|
Additional paid-in capital | 234.0 |
| | 243.9 |
|
Accumulated deficit | (2,387.9 | ) | | (2,365.0 | ) |
Accumulated other comprehensive loss | (1,291.5 | ) | | (915.9 | ) |
Total Valeant Pharmaceuticals International, Inc. shareholders’ equity | 6,435.4 |
| | 5,312.2 |
|
Noncontrolling interest | 123.0 |
| | 122.3 |
|
Total equity | 6,558.4 |
| | 5,434.5 |
|
Total liabilities and equity | $ | 48,343.2 |
| | $ | 26,327.3 |
|
The accompanying notes are an integral part of these consolidated financial statements.
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF (LOSS) INCOME
(All dollar amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
|
| | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2015 | | 2014 | | 2015 | | 2014 |
Revenues | | | | | | | |
Product sales | $ | 2,695.0 |
| | $ | 1,994.1 |
| | $ | 4,841.9 |
| | $ | 3,845.2 |
|
Other revenues | 37.4 |
| | 47.0 |
| | 81.4 |
| | 82.1 |
|
| 2,732.4 |
| | 2,041.1 |
| | 4,923.3 |
| | 3,927.3 |
|
Expenses | | | | | | | |
Cost of goods sold (exclusive of amortization and impairments of | | | | | | | |
finite-lived intangible assets shown separately below) | 669.9 |
| | 569.6 |
| | 1,230.3 |
| | 1,073.7 |
|
Cost of other revenues | 15.2 |
| | 16.0 |
| | 29.5 |
| | 30.3 |
|
Selling, general and administrative | 685.5 |
| | 515.7 |
| | 1,259.3 |
| | 997.7 |
|
Research and development | 81.1 |
| | 66.5 |
| | 136.9 |
| | 127.8 |
|
Amortization and impairments of finite-lived intangible assets | 585.4 |
| | 365.6 |
| | 950.6 |
| | 720.8 |
|
Restructuring, integration and other costs | 143.4 |
| | 142.1 |
| | 198.4 |
| | 275.7 |
|
In-process research and development impairments and other charges | 12.3 |
| | 8.4 |
| | 12.3 |
| | 20.4 |
|
Acquisition-related costs | 9.5 |
| | 0.6 |
| | 19.3 |
| | 2.1 |
|
Acquisition-related contingent consideration | 11.7 |
| | 1.9 |
| | 18.8 |
| | 10.8 |
|
Other expense (income) | 176.9 |
| | (0.4 | ) | | 183.0 |
| | (43.7 | ) |
| 2,390.9 |
| | 1,686.0 |
| | 4,038.4 |
| | 3,215.6 |
|
Operating income | 341.5 |
| | 355.1 |
| | 884.9 |
| | 711.7 |
|
Interest income | 0.9 |
| | 1.2 |
| | 1.8 |
| | 3.0 |
|
Interest expense | (412.7 | ) | | (241.2 | ) | | (710.5 | ) | | (487.7 | ) |
Loss on extinguishment of debt | — |
| | — |
| | (20.0 | ) | | (93.7 | ) |
Foreign exchange and other | 5.6 |
| | 3.4 |
| | (65.5 | ) | | (10.0 | ) |
Gain on investments, net | — |
| | 2.5 |
| | — |
| | 2.5 |
|
(Loss) income before (recovery of) provision for income taxes | (64.7 | ) | | 121.0 |
| | 90.7 |
| | 125.8 |
|
(Recovery of) provision for income taxes | (13.1 | ) | | (1.0 | ) | | 67.8 |
| | 24.1 |
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Net (loss) income | (51.6 | ) | | 122.0 |
| | 22.9 |
|
| 101.7 |
|
Less: Net income (loss) attributable to noncontrolling interest | 1.4 |
| | (3.8 | ) | | 2.2 |
| | (1.5 | ) |
Net (loss) income attributable to Valeant Pharmaceuticals International, Inc. | $ | (53.0 | ) | | $ | 125.8 |
| | $ | 20.7 |
| | $ | 103.2 |
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| | | | | | | |
(Loss) earnings per share attributable to Valeant Pharmaceuticals International, Inc.: | | | | | | | |
Basic | $ | (0.15 | ) | | $ | 0.38 |
| | $ | 0.06 |
| | $ | 0.31 |
|
Diluted | $ | (0.15 | ) | | $ | 0.37 |
| | $ | 0.06 |
| | $ | 0.30 |
|
| | | | | | | |
Weighted-average common shares (in millions) | | | | | | | |
Basic | 344.4 |
| | 335.3 |
| | 340.5 |
| | 335.1 |
|
Diluted | 344.4 |
| | 341.3 |
| | 347.1 |
| | 341.4 |
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The accompanying notes are an integral part of these consolidated financial statements.
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(All dollar amounts expressed in millions of U.S. dollars)
(Unaudited)
|
| | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2015 | | 2014 | | 2015 | | 2014 |
Net (loss) income | $ | (51.6 | ) | | $ | 122.0 |
| | $ | 22.9 |
| | $ | 101.7 |
|
Other comprehensive income (loss) | | | | | | | |
Foreign currency translation adjustment | 36.4 |
| | 13.8 |
| | (375.1 | ) | | 6.4 |
|
Unrealized gain on equity method investment, net of tax | — |
| | 18.5 |
| | — |
| | 18.5 |
|
Net unrealized holding gain on available-for-sale equity securities: | | | | | | | |
Arising in period | — |
| | 2.7 |
| | — |
| | 2.7 |
|
Pension and postretirement benefit plan adjustments | (0.5 | ) | | (0.6 | ) | | (0.9 | ) | | (1.2 | ) |
Other comprehensive income (loss) | 35.9 |
| | 34.4 |
| | (376.0 | ) | | 26.4 |
|
Comprehensive (loss) income | (15.7 | ) | | 156.4 |
| | (353.1 | ) | | 128.1 |
|
Less: Comprehensive income (loss) attributable to noncontrolling interest | 1.2 |
| | (4.7 | ) | | 1.8 |
| | (3.2 | ) |
Comprehensive (loss) income attributable to Valeant Pharmaceuticals International, Inc. | $ | (16.9 | ) | | $ | 161.1 |
| | $ | (354.9 | ) | | $ | 131.3 |
|
The accompanying notes are an integral part of these consolidated financial statements.
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(All dollar amounts expressed in millions of U.S. dollars)
(Unaudited)
|
| | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2015 | | 2014 | | 2015 | | 2014 |
Cash Flows From Operating Activities | | | | | | | |
Net (loss) income | $ | (51.6 | ) | | $ | 122.0 |
| | $ | 22.9 |
| | $ | 101.7 |
|
Adjustments to reconcile net loss (income) to net cash provided by operating activities: | | | | | | | |
Depreciation and amortization, including impairments of finite-lived intangible assets | 635.0 |
| | 407.7 |
| | 1,042.0 |
| | 808.8 |
|
Amortization and write-off of debt discounts and debt issuance costs | 92.7 |
| | 11.3 |
| | 103.2 |
| | 23.5 |
|
In-process research and development impairments | 12.3 |
| | 0.4 |
| | 12.3 |
| | 0.4 |
|
Acquisition accounting adjustment on inventory sold | 46.0 |
| | 4.3 |
| | 70.5 |
| | 9.5 |
|
Acquisition-related contingent consideration | 11.7 |
| | 1.9 |
| | 18.8 |
| | 10.8 |
|
Allowances for losses on accounts receivable and inventories | 14.6 |
| | 16.0 |
| | 26.8 |
| | 35.6 |
|
Deferred income taxes | (50.1 | ) | | (21.4 | ) | | 12.4 |
| | (11.4 | ) |
Additions (reductions) to accrued legal settlements | 4.8 |
| | 1.5 |
| | 6.3 |
| | (47.3 | ) |
Payments of accrued legal settlements | (2.9 | ) | | (0.9 | ) | | (5.9 | ) | | (1.0 | ) |
Share-based compensation | 25.9 |
| | 15.6 |
| | 60.9 |
| | 40.4 |
|
Tax benefits from stock options exercised | (7.7 | ) | | — |
| | (25.6 | ) | | (1.2 | ) |
Foreign exchange (gain) loss | (10.3 | ) | | (5.3 | ) | | 65.6 |
| | 7.3 |
|
Loss on extinguishment of debt | — |
| | — |
| | 20.0 |
| | 93.7 |
|
Payment of accreted interest on contingent consideration | (9.9 | ) | | (7.5 | ) | | (12.1 | ) | | (8.2 | ) |
Other | (2.7 | ) | | (3.7 | ) | | (9.9 | ) | | 6.1 |
|
Changes in operating assets and liabilities: | | | | | | | |
Trade receivables | (241.8 | ) | | (53.7 | ) | | (308.8 | ) | | (83.8 | ) |
Inventories | (48.3 | ) | | (12.1 | ) | | (86.8 | ) | | (81.3 | ) |
Prepaid expenses and other current assets | (118.4 | ) | | 24.8 |
| | (163.5 | ) | | 29.0 |
|
Accounts payable, accrued and other liabilities | 111.2 |
| | (124.9 | ) | | 52.5 |
| | (72.3 | ) |
Net cash provided by operating activities | 410.5 |
| | 376.0 |
| | 901.6 |
| | 860.3 |
|
| | | | | | | |
Cash Flows From Investing Activities | | | | | | | |
Acquisition of businesses, net of cash acquired | (13,090.9 | ) | | (68.0 | ) | | (13,885.9 | ) | | (374.3 | ) |
Acquisition of intangible assets and other assets | (9.2 | ) | | (10.4 | ) | | (58.0 | ) | | (31.5 | ) |
Purchases of property, plant and equipment | (46.8 | ) | | (113.5 | ) | | (112.6 | ) | | (171.6 | ) |
Proceeds from sales and maturities of short-term investments | — |
| | — |
| | 17.7 |
| | — |
|
Net settlement of assumed derivative contracts | 184.6 |
| | — |
| | 184.6 |
| | — |
|
Settlement of foreign currency forward exchange contracts | (26.3 | ) | | — |
| | (26.3 | ) | | — |
|
Purchase of equity method investment | — |
| | (75.9 | ) | | — |
| | (75.9 | ) |
Decrease (increase) in restricted cash and cash equivalents (Note 8) | 10,343.9 |
| | — |
| | (5.2 | ) | | — |
|
Other | (0.5 | ) | | 1.4 |
| | — |
| | 2.8 |
|
Net cash used in investing activities | (2,645.2 | ) | | (266.4 | ) | | (13,885.7 | ) | | (650.5 | ) |
| | | | | | | |
Cash Flows From Financing Activities | | | | | | | |
Issuance of long-term debt, net of discount | 4,921.4 |
| | 49.3 |
| | 16,925.8 |
| | 408.4 |
|
Repayments of long-term debt | (247.9 | ) | | (120.3 | ) | | (1,358.2 | ) | | (554.2 | ) |
Repayments of convertible notes assumed | (3,122.8 | ) | | — |
| | (3,122.8 | ) | | — |
|
Issuance of common stock, net | — |
| | — |
| | 1,433.7 |
| | — |
|
Repurchases of common shares | (50.0 | ) | | — |
| | (50.0 | ) | | — |
|
Proceeds from exercise of stock options | 7.6 |
| | 3.6 |
| | 22.1 |
| | 7.1 |
|
Tax benefits from stock options exercised | 7.7 |
| | — |
| | 25.6 |
| | 1.2 |
|
Payment of employee withholding tax upon vesting of share-based awards | (45.6 | ) | | (8.8 | ) | | (61.5 | ) | | (36.5 | ) |
Payments of contingent consideration | (68.7 | ) | | (72.5 | ) | | (81.0 | ) | | (82.2 | ) |
Payments of financing costs | (75.1 | ) | | (0.2 | ) | | (101.7 | ) | | (8.6 | ) |
Other | (1.3 | ) | | (7.7 | ) | | (0.4 | ) | | (14.5 | ) |
Net cash provided by (used in) financing activities | 1,325.3 |
| | (156.6 | ) | | 13,631.6 |
| | (279.3 | ) |
Effect of exchange rate changes on cash and cash equivalents | 3.0 |
| | 1.9 |
| | (12.1 | ) | | 0.4 |
|
Net (decrease) increase in cash and cash equivalents | (906.4 | ) | | (45.1 | ) | | 635.4 |
| | (69.1 | ) |
Cash and cash equivalents, beginning of period | 1,864.4 |
| | 576.3 |
| | 322.6 |
| | 600.3 |
|
Cash and cash equivalents, end of period | $ | 958.0 |
| | $ | 531.2 |
| | $ | 958.0 |
| | $ | 531.2 |
|
| | | | | | | |
Non-Cash Investing and Financing Activities | | | | | | | |
Acquisition of businesses, contingent and deferred consideration obligations at fair value | $ | (387.7 | ) | | $ | (27.4 | ) | | $ | (674.6 | ) | | $ | (49.1 | ) |
Acquisition of businesses, debt assumed | (3,123.1 | ) | | — |
| | (3,123.1 | ) | | (4.0 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
| |
1. | DESCRIPTION OF BUSINESS |
The Company is a multinational, specialty pharmaceutical and medical device company, continued under the laws of the Province of British Columbia, that develops, manufactures, and markets a broad range of branded, generic and branded generic pharmaceuticals, over-the-counter (“OTC”) products, and medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment, and aesthetics devices), which are marketed directly or indirectly in over 100 countries.
On April 1, 2015, the Company acquired Salix Pharmaceuticals, Ltd. ("Salix"), pursuant to an Agreement and Plan of Merger dated February 20, 2015, as amended on March 16, 2015 (the "Merger Agreement"), with Salix surviving as a wholly owned subsidiary of Valeant Pharmaceuticals International ("Valeant"), a subsidiary of the Company (the "Salix Acquisition").
For further information regarding the Salix Acquisition, including the related financing, see Note 3, Note 8 and Note 11.
| |
2. | SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation
The accompanying unaudited consolidated financial statements (the “unaudited consolidated financial statements”) have been prepared by the Company in United States (“U.S.”) dollars and in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting, which do not conform in all respects to the requirements of U.S. GAAP for annual financial statements. Accordingly, these condensed notes to the unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto prepared in accordance with U.S. GAAP that are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (the “2014 Form 10-K”). The unaudited consolidated financial statements have been prepared using accounting policies that are consistent with the policies used in preparing the Company’s audited consolidated financial statements for the year ended December 31, 2014. The unaudited consolidated financial statements reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position and results of operations for the interim periods presented.
Reclassifications
Certain reclassifications have been made to prior year amounts to conform with the current year presentation.
Use of Estimates
In preparing the unaudited consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the dates of the unaudited consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates and the operating results for the interim periods presented are not necessarily indicative of the results expected for the full year.
On an ongoing basis, management reviews its estimates to ensure that these estimates appropriately reflect changes in the Company’s business and new information as it becomes available. If historical experience and other factors used by management to make these estimates do not reasonably reflect future activity, the Company’s results of operations and financial position could be materially impacted.
Adoption of New Accounting Standards
In April 2015, the Financial Accounting Standards Board ("FASB") issued guidance which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt, consistent with the presentation of a debt discount. The guidance is effective for annual periods beginning after December 15, 2015, and all annual and interim periods thereafter. As permitted, the Company early-adopted this guidance in the second quarter of 2015. The adoption of this guidance, which was applied retrospectively and impacted presentation only, resulted in a reclassification of $26 million as of December 31, 2014 from Other long-term assets, net to Long-term debt (treated as a deduction to Long-term debt) on the consolidated balance sheet. There was no impact on the Company's results of operations. The Company will continue to present debt issuance costs associated with revolving-debt arrangements within Other long-term assets, net.
Recently Issued Accounting Standards, Not Adopted as of June 30, 2015
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
In May 2014, the FASB and the International Accounting Standards Board issued converged guidance on recognizing revenue from contracts with customers. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the revenue model to contracts within its scope, an entity will: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In addition to these provisions, the new standard provides implementation guidance on several other topics, including the accounting for certain revenue-related costs, as well as enhanced disclosure requirements. The new guidance requires entities to disclose both quantitative and qualitative information that enables users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Early application is permitted but not before the annual reporting period (and interim reporting period) beginning January 1, 2017. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance. The Company is evaluating the impact of adoption of this guidance on its financial position and results of operations.
In August 2014, the FASB issued guidance which requires management to assess an entity’s ability to continue as a going concern and to provide related disclosures in certain circumstances. Under the new guidance, disclosures are required when conditions give rise to substantial doubt about an entity’s ability to continue as a going concern within one year from the financial statement issuance date. The guidance is effective for annual periods ending after December 15, 2016, and all annual and interim periods thereafter. Early application is permitted. The adoption of this guidance will not have any impact on the Company’s financial position and results of operations and, at this time, the Company does not expect any impact on its disclosures.
In February 2015, the FASB issued guidance which amends certain consolidation requirements. The new guidance has the following stipulations, among others: (i) eliminates the presumption that a general partner should consolidate a limited partnership and eliminates the consolidation model specific to limited partnerships, (ii) clarifies when fees paid to a decision maker should be a factor to include in the consolidation of variable interest entities (“VIEs”), (iii) amends the guidance for assessing how relationships of related parties affect the consolidation analysis of VIEs, and (iv) reduces the number of VIE consolidation models from two to one by eliminating the indefinite deferral for certain investment funds. The guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2015. Early application is permitted. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt the guidance. The Company is evaluating the impact of adoption of this guidance on its financial position and results of operations, as well as its disclosures.
In July 2015, the FASB issued guidance which requires entities to measure most inventory “at the lower of cost and net realizable value (“NRV”),” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. Under the new guidance, inventory is “measured at the lower of cost and net realizable value,” which eliminates the need to determine replacement cost and evaluate whether it is above the ceiling (NRV) or below the floor (NRV less a normal profit margin). The guidance defines NRV as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” The guidance is effective for annual periods beginning after December 15, 2016, and interim periods therein. Early application is permitted. The Company is evaluating the impact of adoption of this guidance on its financial position and results of operations.
The Company’s business strategy involves selective acquisitions with a focus on core geographies and therapeutic classes.
(a) Business combinations in 2015 included the following:
Salix
Description of the Transaction
On April 1, 2015, the Company acquired Salix, pursuant to the Merger Agreement, among the Company, Valeant, Sun Merger Sub, Inc., a wholly owned subsidiary of Valeant (“Sun Merger Sub”), and Salix. Salix is a specialty pharmaceutical company dedicated to developing and commercializing prescription drugs and medical devices used in treatment of variety of
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
gastrointestinal (GI) disorders with a portfolio of over 20 marketed products, including Xifaxan®, Uceris®, Apriso®, and Relistor®.
In accordance with the terms of the Merger Agreement, Sun Merger Sub commenced a tender offer (the “Offer”) for all of Salix’s outstanding shares of common stock, par value $0.001 per share (the “Salix Shares”), at a purchase price of $173.00 per Salix Share, net to the holder in cash, without interest, less any applicable withholding taxes. The Offer expired on April 1, 2015, as scheduled. A sufficient number of Salix Shares were validly tendered in the Offer such that the minimum tender condition to the Offer was satisfied, and Sun Merger Sub accepted for payment all such tendered Salix Shares. Following the expiration of the Offer on April 1, 2015, Sun Merger Sub merged with and into Salix, with Salix surviving as a wholly owned subsidiary of Valeant (the “Merger”). The Merger was governed by Section 251(h) of the General Corporation Law of the State of Delaware, with no stockholder vote required to consummate the Merger. At the effective time of the Merger, each Salix Share then outstanding was converted into the right to receive $173.00 in cash, without interest, less any applicable withholding taxes, except for Salix Shares then owned by the Company or Salix or their respective wholly owned subsidiaries, which Salix Shares were cancelled for no consideration.
In connection with the Merger, each unexpired and unexercised option to purchase Salix Shares (the “Salix Options”), whether or not then exercisable or vested, was cancelled and, in exchange therefor, each former holder of any such cancelled Salix Option was entitled to receive, a payment in cash (subject to any applicable withholding or other taxes required by applicable law to be withheld) of an amount equal to the product of (i) the total number of Salix Shares previously subject to such Salix Option and (ii) the excess, if any, of $173.00 over the exercise price per Salix Share previously subject to such Salix Option. Each unvested Salix Share subject to forfeiture restrictions, repurchase rights or other restrictions (the “Salix Restricted Stock”) automatically became fully vested and was cancelled and, in exchange therefor, each former holder of such cancelled Salix Restricted Stock was entitled to receive, a payment in cash (subject to any applicable withholding or other taxes required by applicable law to be withheld) equal to $173.00 per share of Salix Restricted Stock.
The Salix Acquisition (including the Offer and the Merger), as well as related transactions and expenses, were funded through a combination of: (i) the proceeds from an issuance of senior unsecured notes that closed on March 27, 2015; (ii) the proceeds from incremental term loan commitments; (iii) the proceeds from a registered offering of Valeant’s common shares in the United States that closed on March 27, 2015; and (iv) cash on hand.
For further information regarding the debt and equity issuances, see Note 8 and Note 11, respectively.
Fair Value of Consideration Transferred
The following table indicates the consideration transferred to effect the Salix Acquisition:
|
| | | | | | | | |
(In millions except per share data) | | Conversion Calculation | | Fair Value |
Number of shares of Salix common stock outstanding as of acquisition date | | 64.3 |
| | |
|
Multiplied by Per Share Merger Consideration | | $ | 173.00 |
| | $ | 11,123.9 |
|
Number of outstanding stock options of Salix cancelled and exchanged for cash(a) | | 0.1 |
| | 10.1 |
|
Number of outstanding restricted stock of Salix cancelled and exchanged for cash(a) | | 1.1 |
| | 195.0 |
|
| | | | 11,329.0 |
|
Less: Cash consideration paid for Salix’s restricted stock that was accelerated at the closing of the Salix Acquisition(a) | | | | (164.5 | ) |
Add: Payment of Salix’s Term Loan B Credit Facility(b) | | | | 1,125.2 |
|
Add: Payment of Salix’s 6.00% Senior Notes due 2021(b) | | | | 842.3 |
|
Total fair value of consideration transferred | | |
| | $ | 13,132.0 |
|
___________________________________
| |
(a) | The purchase consideration paid to holders of Salix stock options and restricted stock attributable to pre-combination services was included as a component of purchase price. Purchase consideration of $165 million paid for outstanding restricted stock that was accelerated by the Company in connection with the Salix Acquisition was excluded from purchase price and accounted for as post-combination expense within Other expense (income) in the second quarter of 2015. |
| |
(b) | The repayment of Salix’s Term Loan B Credit Facility has been reflected as part of the purchase consideration as the debt was repaid concurrently with the consummation of the Salix Acquisition and was not assumed by the Company as part of the acquisition. Similarly, the redemption of Salix’s 6.00% |
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
Senior Notes due 2021 has been reflected as part of the purchase consideration as the indenture governing the 6.00% Senior Notes due 2021 was satisfied and discharged concurrently with the consummation of the Salix Acquisition and was not assumed by the Company as part of the acquisition.
Assets Acquired and Liabilities Assumed
The transaction has been accounted for as a business combination under the acquisition method of accounting. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of acquisition date. Due to the timing of this acquisition, these amounts are provisional and subject to change. The Company will finalize these amounts as it obtains the information necessary to complete the measurement process. Any changes resulting from facts and circumstances that existed as of the acquisition date may result in retrospective adjustments to the provisional amounts recognized at the acquisition date. These changes could be significant. The Company will finalize these amounts no later than one year from the acquisition date.
|
| | | | |
| | Amounts Recognized as of Acquisition Date |
Cash and cash equivalents | | $ | 113.7 |
|
Inventories(a) | | 233.2 |
|
Other assets(b) | | 1,400.3 |
|
Property, plant and equipment, net | | 24.3 |
|
Identifiable intangible assets, excluding acquired IPR&D(c) | | 6,756.3 |
|
Acquired IPR&D(d) | | 5,366.8 |
|
Current liabilities(e) | | (1,764.2 | ) |
Contingent consideration, including current and long-term portion(f) | | (327.9 | ) |
Long-term debt, including current portion(g) | | (3,123.1 | ) |
Deferred income taxes, net(h) | | (3,512.0 | ) |
Other non-current liabilities | | (7.3 | ) |
Total identifiable net assets | | 5,160.1 |
|
Goodwill(i) | | 7,971.9 |
|
Total fair value of consideration transferred | | $ | 13,132.0 |
|
________________________
| |
(a) | Includes an estimated fair value step-up adjustment to inventory of $108 million. |
| |
(b) | Primarily includes an estimated fair value of $1.27 billion to record the capped call transactions and convertible bond hedge transactions that were entered into by Salix prior to the Salix Acquisition in connection with its 1.5% Convertible Senior Notes due 2019 and 2.75% Convertible Senior Notes due 2015. These instruments were settled on the date of the Salix Acquisition and, as such, the fair value was based on the settlement amounts. Other current assets also includes an estimated insurance recovery of $80 million, based on estimated fair value, related to the legal matters discussed in (e) below. |
| |
(c) | The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets: |
|
| | | | | | |
| | Weighted- Average Useful Lives (Years) | | Amounts Recognized as of Acquisition Date |
Product brands | | 10 | | $ | 6,088.3 |
|
Corporate brand | | 20 | | 668.0 |
|
Total identifiable intangible assets acquired | | 11 | | $ | 6,756.3 |
|
| |
(d) | A multi-period excess earnings methodology (income approach) was used to determine the estimated fair values of the acquired in-process research and development (“IPR&D”) assets from a market participant perspective. The projected cash flows from these assets were adjusted for the probabilities of successful development and commercialization of each project, and the Company used risk-adjusted discount rates of 10%-11% to present value the projected cash flows. |
The IPR&D assets primarily relate to Xifaxan® 550 mg for the treatment of irritable bowel syndrome with diarrhea (new indication) in adults ("Xifaxan IBS-D"). In determining the fair value of Xifaxan IBS-D ($4.79 billion as of the acquisition date), the Company assumed material cash inflows would
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
commence in 2015. In May 2015, Xifaxan IBS-D received approval from the U.S. Food and Drug Administration (the "FDA"), and, accordingly, such asset has been reclassified to an amortizable intangible asset as of the approval date and is being amortized over a period of 10 years.
Other IPR&D assets include, among others, Oral Relistor® for the treatment of opioid-induced constipation in adult patients with chronic non-cancer pain and Xifaxan® for the treatment of early decompensated liver cirrhosis. In determining the fair value of these two programs, the Company (i) estimated that it will incur development costs of approximately $90 million, in the aggregate, to complete development, and (ii) assumed material cash inflows for the Oral Relistor® and Xifaxan® programs would commence in 2017 and 2018, respectively. On June 23, 2015, the Company announced that it had submitted a New Drug Application to the FDA for Oral Relistor®.
| |
(e) | Primarily includes an estimated fair value of $1.08 billion to record the warrant transactions that were entered into by Salix prior to the Salix Acquisition in connection with its 1.5% Convertible Senior Notes due 2019 (these instruments were settled on the date of the Salix Acquisition and, as such, the fair value was based on the settlement amounts), as well as accruals for (i) the estimated fair value of $336 million (exclusive of the related insurance recovery described in (b) above) for potential losses and related costs associated with legal matters relating to the legacy Salix business (See Note 15 for additional information regarding these legal matters) and (ii) product returns and rebates of $251 million. |
| |
(f) | The contingent consideration consists of potential payments to third parties including developmental milestone payments due upon specified regulatory achievements, commercialization milestones contingent upon achieving specified targets for net sales, and royalty-based payments. The range of potential milestone payments (excluding royalty-based payments) is from nil if none of the milestones are achieved to a maximum of up to approximately $650 million (the majority of which relates to sales-based milestones) over time if all milestones are achieved, in the aggregate, to third parties, including up to $250 million in developmental and sales-based milestones to Progenics Pharmaceuticals, Inc. related to Relistor® (including Oral Relistor®), and various other developmental and sales-based milestones. The total fair value of the contingent consideration of $328 million (including current portion of $11 million) as of the acquisition date was determined using probability-weighted discounted cash flows. Refer to Note 5 for additional information regarding contingent consideration. |
| |
(g) | The following table summarizes the fair value of long-term debt assumed as of the acquisition date: |
|
| | | | |
| | Amounts Recognized as of Acquisition Date |
1.5% Convertible Senior Notes due 2019(1) | | $ | 1,837.1 |
|
2.75% Convertible Senior Notes due 2015(1) | | 1,286.0 |
|
Total long-term debt assumed | | $ | 3,123.1 |
|
____________________________________
| |
(1) | The Company subsequently redeemed these amounts in full in the second quarter of 2015, except for a nominal amount of the 1.5% Convertible Senior Notes due 2019. |
| |
(h) | Comprises deferred tax assets ($237 million) and deferred tax liabilities ($3.75 billion). |
| |
(i) | Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents the following: |
| |
• | the Company’s expectation to develop and market new product brands, product lines and technology; |
| |
• | cost savings and operating synergies expected to result from combining the operations of Salix with those of the Company; |
| |
• | the value of the continuing operations of Salix’s existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and |
| |
• | intangible assets that do not qualify for separate recognition (for instance, Salix’s assembled workforce). |
The provisional amount of goodwill has been allocated to the Company’s Developed Markets segment.
Acquisition-Related Costs
The Company has incurred to date $13 million of transaction costs directly related to the Salix Acquisition, which includes expenditures for advisory, legal, valuation, accounting and other similar services. These costs have been expensed as acquisition-related costs.
Revenue and Net Loss of Salix
The revenues of Salix for the period from the acquisition date to June 30, 2015 were $313 million and net loss was $200 million. The net loss includes the effects of the acquisition accounting adjustments and acquisition-related costs.
Other Business Combinations (excluding the Salix Acquisition)
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
Description of the Transactions
In the six-month period ended June 30, 2015, the Company completed other business combinations, which included the February 23, 2015 acquisition of the assets of Dendreon Corporation ("Dendreon") and the February 10, 2015 acquisition of certain assets of Marathon Pharmaceuticals, LLC ("Marathon"), as well as other smaller acquisitions, for an aggregate purchase price of $1.07 billion. The Dendreon acquisition was completed via a "stalking horse bid" in a sales process conducted under the U.S. Bankruptcy Code for a purchase price of $415 million, net of cash received ($495 million less cash received of $80 million). The purchase price includes approximately $50 million in stock consideration, and such shares were issued in June 2015. The assets acquired from Dendreon included the worldwide rights to the Provenge® product (an immunotherapy treatment designed to treat men with advanced prostate cancer). The assets acquired from Marathon comprised a portfolio of hospital products, including Nitropress®, Isuprel®, Opium Tincture, Pepcid®, Seconal® Sodium, Amytal® Sodium, and Iprivask® for an aggregate purchase price of $286 million (which is net of a $64 million assumed liability owed to a third party which is reflected in the table below).
The other business combinations (excluding the Salix Acquisition described earlier) completed during the six-month period ended June 30, 2015 included contingent consideration arrangements with an aggregate acquisition date fair value of $112 million, primarily driven by the contingent consideration liability assumed as part of the acquisition of certain assets of Marathon (as described further below).
The smaller acquisitions not specifically identified above are not material individually or in the aggregate. The Dendreon and Marathon acquisitions, as well as the other smaller acquisitions, are included in the aggregated amounts presented below.
Assets Acquired and Liabilities Assumed
These transactions have been accounted for as business combinations under the acquisition method of accounting. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed related to the business combinations, in the aggregate, as of the applicable acquisition dates. The following recognized amounts related to the Dendreon and Marathon acquisition, as well as certain smaller acquisitions, are provisional and subject to change:
| |
• | amounts for intangible assets, property and equipment, inventories, receivables and other working capital adjustments pending finalization of the valuation; |
| |
• | amounts for income tax assets and liabilities, pending finalization of estimates and assumptions in respect of certain tax aspects of the transaction; and |
| |
• | amount of goodwill pending the completion of the valuation of the assets acquired and liabilities assumed. |
The Company will finalize these amounts as it obtains the information necessary to complete the measurement processes. Any changes resulting from facts and circumstances that existed as of the acquisition dates may result in retrospective adjustments to the provisional amounts recognized at the acquisition dates. These changes could be significant. The Company will finalize these amounts no later than one year from the respective acquisition dates.
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
|
| | | | | | | | | | | | |
| | Amounts Recognized as of Acquisition Dates | | Measurement Period Adjustments(a) | | Amounts Recognized as of June 30, 2015 (as adjusted) |
Cash | | $ | 81.1 |
| | $ | — |
| | $ | 81.1 |
|
Accounts receivable(b) | | 25.4 |
| | — |
| | 25.4 |
|
Inventories | | 107.3 |
| | (0.3 | ) | | 107.0 |
|
Other current assets | | 18.1 |
| | — |
| | 18.1 |
|
Property, plant and equipment | | 72.1 |
| | (14.3 | ) | | 57.8 |
|
Identifiable intangible assets, excluding acquired IPR&D(c) | | 874.7 |
| | 7.4 |
| | 882.1 |
|
Acquired IPR&D | | 25.5 |
| | (1.5 | ) | | 24.0 |
|
Other non-current assets | | 1.2 |
| | — |
| | 1.2 |
|
Deferred tax asset, net | | 5.8 |
| | 3.2 |
| | 9.0 |
|
Current liabilities(d) | | (92.8 | ) | | — |
| | (92.8 | ) |
Non-current liabilities(d) | | (96.0 | ) | | — |
| | (96.0 | ) |
Total identifiable net assets | | 1,022.4 |
| | (5.5 | ) | | 1,016.9 |
|
Goodwill(e) | | 55.9 |
| | (0.9 | ) | | 55.0 |
|
Total fair value of consideration transferred | | $ | 1,078.3 |
| | $ | (6.4 | ) | | $ | 1,071.9 |
|
________________________
| |
(a) | The measurement period adjustments primarily relate to the Dendreon acquisition and reflect: (i) a reduction in the estimated fair value of property, plant and equipment driven by further assessment of the fair value of a manufacturing facility, (ii) refinements of the estimated fair value of intangible assets, and (iii) the tax impact of pre-tax measurement period adjustments. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. |
| |
(b) | The gross contractual amount of trade accounts receivable acquired was $25 million, of which the Company expects a nominal amount will be uncollectible. |
| |
(c) | The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets: |
|
| | | | | | | | | | | | | | |
| | Weighted- Average Useful Lives (Years) | | Amounts Recognized as of Acquisition Dates | | Measurement Period Adjustments | | Amounts Recognized as of June 30, 2015 (as adjusted) |
Product brands | | 7 | | $ | 603.3 |
| | $ | 0.5 |
| | $ | 603.8 |
|
Product rights | | 3 | | 42.6 |
| | 0.4 |
| | 43.0 |
|
Partner relationships | | 8 | | 7.8 |
| | — |
| | 7.8 |
|
Technology/know-how | | 10 | | 219.0 |
| | 6.5 |
| | 225.5 |
|
Other | | 6 | | 2.0 |
| | — |
| | 2.0 |
|
Total identifiable intangible assets acquired | | 8 | | $ | 874.7 |
| | $ | 7.4 |
| | $ | 882.1 |
|
| |
(d) | As part of the Marathon acquisition, the Company assumed a contingent consideration liability related to potential payments for Isuprel® and Nitropress®, the amounts of which are dependent on the timing of generic entrants for these products. The fair value of the liability as of the acquisition date was determined using probability-weighted projected cash flows, with $41 million classified in Current liabilities and $46 million classified in Non-current liabilities in the table above. As of June 30, 2015, the assumptions used for determining the fair value of the contingent consideration liability have not changed significantly from those used as of the acquisition date. During the second quarter of 2015, the Company made contingent consideration payments of $6 million related to the Marathon acquisition. |
| |
(e) | The goodwill relates primarily to the Marathon and other smaller acquisitions. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. Substantially all of the goodwill is expected to be deductible for tax purposes. The goodwill represents primarily the cost savings, operating synergies and other benefits expected to result from combining the operations with those of the Company. |
The provisional amount of goodwill has been allocated primarily to the Company’s Developed Markets segment.
Acquisition-Related Costs
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
The Company has incurred to date $7 million, in the aggregate, of transaction costs directly related to these business combinations, which includes expenditures for advisory, legal, valuation, accounting and other similar services. These costs have been expensed as acquisition-related costs.
Revenue and Net Income
The revenues of these business combinations for the period from the respective acquisition dates to June 30, 2015 were $366 million, in the aggregate, and net income was $91 million, in the aggregate. The net income includes the effects of the acquisition accounting adjustments and acquisition-related costs.
(b) Business combinations in 2014 included the following:
In the year ended December 31, 2014, the Company completed business combinations, which included the acquisition of the following businesses, for an aggregate purchase price of $1.42 billion. The aggregate purchase price included contingent consideration payment obligations with an aggregate acquisition date fair value of $133 million.
| |
• | On July 7, 2014, the Company acquired all of the outstanding common stock of PreCision Dermatology, Inc. (“PreCision”) for an aggregate purchase price of $459 million. Under the terms of the merger agreement, the Company agreed to pay contingent consideration of $25 million upon the achievement of a sales-based milestone for 2014. The fair value of this contingent consideration was determined to be nominal as of the acquisition date, based on the sales forecast. As the sales-based milestone was not achieved, no such payment was made. The Company recognized a post-combination expense of $20 million within Other (income) expense in the third quarter of 2014 related to the acceleration of unvested stock options for PreCision employees. In connection with the acquisition of PreCision, the Company was required by the Federal Trade Commission (“FTC”) to divest the rights to PreCision’s Tretin-X® (tretinoin) cream product and PreCision’s generic tretinoin gel and cream products. PreCision develops and markets a range of medical dermatology products, treating a number of topical disease states such as acne and atopic dermatitis with products such as Locoid® and Clindagel®. |
| |
• | On January 23, 2014, the Company acquired all of the outstanding common stock of Solta Medical, Inc. (“Solta Medical”) for $293 million, which includes $2.92 per share in cash and $44 million for the repayment of Solta Medical’s long-term debt, including accrued interest. Solta Medical designs, develops, manufactures, and markets energy-based medical device systems for aesthetic applications, and its products include the Thermage CPT® system, the Fraxel® repair system, the Clear + Brilliant® system, and the Liposonix® system. |
| |
• | During the year ended December 31, 2014, the Company completed other smaller acquisitions, including the consolidation of variable interest entities, which are not material individually or in the aggregate. These acquisitions are included in the aggregated amounts presented below. |
Assets Acquired and Liabilities Assumed
These transactions have been accounted for as business combinations under the acquisition method of accounting. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed related to the business combinations, in the aggregate, as of the applicable acquisition dates. The following recognized amounts related to certain smaller acquisitions are provisional and subject to change:
| |
• | amounts for intangible assets, property and equipment, inventories, receivables and other working capital adjustments pending finalization of the valuation; |
| |
• | amounts for income tax assets and liabilities, pending finalization of estimates and assumptions in respect of certain tax aspects of the transaction; and |
| |
• | amount of goodwill pending the completion of the valuation of the assets acquired and liabilities assumed. |
The Company will finalize these amounts as it obtains the information necessary to complete the measurement processes. Any changes resulting from facts and circumstances that existed as of the acquisition dates may result in retrospective adjustments to the provisional amounts recognized at the acquisition dates. These changes could be significant. The Company will finalize these amounts no later than one year from the respective acquisition dates.
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
|
| | | | | | | | | | | | |
| | Amounts Recognized as of Acquisition Dates | | Measurement Period Adjustments(a) | | Amounts Recognized as of June 30, 2015 (as adjusted) |
Cash and cash equivalents | | $ | 33.6 |
| | $ | 1.1 |
| | $ | 34.7 |
|
Accounts receivable(b) | | 87.7 |
| | (5.9 | ) | | 81.8 |
|
Assets held for sale(c) | | 125.7 |
| | (0.8 | ) | | 124.9 |
|
Inventories | | 170.4 |
| | (15.8 | ) | | 154.6 |
|
Other current assets | | 19.1 |
| | (4.8 | ) | | 14.3 |
|
Property, plant and equipment, net | | 58.5 |
| | 2.7 |
| | 61.2 |
|
Identifiable intangible assets, excluding acquired IPR&D(d) | | 697.2 |
| | 14.6 |
| | 711.8 |
|
Acquired IPR&D(e) | | 65.8 |
| | (2.8 | ) | | 63.0 |
|
Other non-current assets | | 4.0 |
| | (2.1 | ) | | 1.9 |
|
Current liabilities | | (152.0 | ) | | (21.8 | ) | | (173.8 | ) |
Long-term debt, including current portion | | (11.2 | ) | | — |
| | (11.2 | ) |
Deferred income taxes, net | | (116.0 | ) | | 40.5 |
| | (75.5 | ) |
Other non-current liabilities | | (13.4 | ) | | (0.1 | ) | | (13.5 | ) |
Total identifiable net assets | | 969.4 |
| | 4.8 |
| | 974.2 |
|
Noncontrolling interest | | (15.0 | ) | | 0.3 |
| | (14.7 | ) |
Goodwill(f) | | 410.4 |
| | 46.1 |
| | 456.5 |
|
Total fair value of consideration transferred | | $ | 1,364.8 |
| | $ | 51.2 |
| | $ | 1,416.0 |
|
________________________
| |
(a) | The measurement period adjustments primarily reflect: (i) a net increase in the fair value of contingent consideration related to smaller acquisitions based on assessment of probability and timing assumptions for potential milestone payments, related to factors that existed as of the respective acquisition dates, (ii) a decrease in the net deferred tax liability primarily related to the PreCision and Solta Medical acquisitions, (iii) an increase in current liabilities primarily related to the PreCision acquisition and other smaller acquisitions, and (iii) a decrease in inventory primarily related to the Solta Medical acquisition and other smaller acquisitions. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. |
| |
(b) | The fair value of trade accounts receivable acquired was $82 million, with the gross contractual amount being $88 million, of which the Company expects that $6 million will be uncollectible. |
| |
(c) | Assets held for sale relate to the Tretin-X® product rights and the product rights for the generic tretinoin gel and cream products acquired in the PreCision acquisition, which were subsequently divested in the third quarter of 2014. |
| |
(d) | The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets: |
|
| | | | | | | | | | | | | | |
| | Weighted- Average Useful Lives (Years) | | Amounts Recognized as of Acquisition Dates | | Measurement Period Adjustments | | Amounts Recognized as of June 30, 2015 (as adjusted) |
Product brands | | 10 | | $ | 506.0 |
| | $ | (1.7 | ) | | $ | 504.3 |
|
Product rights | | 8 | | 95.2 |
| | (3.3 | ) | | 91.9 |
|
Corporate brand | | 15 | | 28.9 |
| | 1.7 |
| | 30.6 |
|
In-licensed products | | 9 | | 1.5 |
| | (0.3 | ) | | 1.2 |
|
Partner relationships | | 9 | | 37.5 |
| | 4.2 |
| | 41.7 |
|
Other | | 9 | | 28.1 |
| | 14.0 |
| | 42.1 |
|
Total identifiable intangible assets acquired | | 10 | | $ | 697.2 |
| | $ | 14.6 |
| | $ | 711.8 |
|
| |
(e) | The acquired IPR&D assets primarily relate to programs from smaller acquisitions. In addition, the Solta Medical acquisition includes a program for the development of a next generation Thermage® product. |
| |
(f) | The goodwill relates primarily to the PreCision and Solta Medical acquisitions. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. Substantially all of the goodwill is not expected to be deductible for tax purposes. The goodwill recorded from the PreCision and Solta Medical acquisitions represents the following: |
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
| |
• | cost savings, operating synergies and other benefits expected to result from combining the operations of PreCision and Solta Medical with those of the Company; |
| |
• | the Company’s expectation to develop and market new products and technology; and |
| |
• | intangible assets that do not qualify for separate recognition (for instance, PreCision’s and Solta Medical’s assembled workforces). |
The provisional amount of goodwill from the PreCision acquisition has been allocated to the Company’s Developed Markets segment ($194 million). The amount of goodwill from the Solta Medical acquisition has been allocated to both the Company’s Developed Markets segment ($56 million) and Emerging Markets segment ($38 million).
Pro Forma Impact of Business Combinations
The following table presents unaudited pro forma consolidated results of operations for the three-month and six-month periods ended June 30, 2015 and 2014, as if the 2015 acquisitions had occurred as of January 1, 2014 and the 2014 acquisitions had occurred as of January 1, 2013.
|
| | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2015 | | 2014 | | 2015 | | 2014 |
Revenues | $ | 2,732.4 |
| | $ | 2,595.7 |
| | $ | 4,883.7 |
| | $ | 5,055.1 |
|
Net loss attributable to Valeant Pharmaceuticals International, Inc. | (24.9 | ) | | (51.7 | ) | | (329.6 | ) | | (353.8 | ) |
| | | | | | | |
Loss per share attributable to Valeant Pharmaceuticals International, Inc.: | | | | | | | |
Basic | $ | (0.07 | ) | | $ | (0.15 | ) | | $ | (0.96 | ) | | $ | (1.03 | ) |
Diluted | $ | (0.07 | ) | | $ | (0.15 | ) | | $ | (0.96 | ) | | $ | (1.03 | ) |
Pro forma revenues in the three-month and six-month periods ended June 30, 2015 as compared to the three-month and six-month periods ended June 30, 2014 were impacted by the following:
| |
• | growth from the existing business, including the impact of recent product launches; |
| |
• | negative foreign currency exchange impact; and |
| |
• | lower sales resulting from the July 2014 divestiture of facial aesthetic fillers and toxins. |
The unaudited pro forma consolidated results of operations were prepared using the acquisition method of accounting and are based on the historical financial information of the Company and the acquired businesses described above. Except to the extent realized in the three-month and six-month periods ended June 30, 2015, the unaudited pro forma information does not reflect any cost savings, operating synergies and other benefits that the Company may achieve as a result of these acquisitions, or the costs necessary to achieve these cost savings, operating synergies and other benefits. In addition, except to the extent recognized in the three-month and six-month periods ended June 30, 2015, the unaudited pro forma information does not reflect the costs to integrate the operations of the Company with those of the acquired businesses.
The unaudited pro forma information is not necessarily indicative of what the Company’s consolidated results of operations actually would have been had the 2015 acquisitions and the 2014 acquisitions been completed on January 1, 2014 and January 1, 2013, respectively. In addition, the unaudited pro forma information does not purport to project the future results of operations of the Company. The unaudited pro forma information reflects primarily the following adjustments:
| |
• | elimination of the historical intangible asset amortization expense of these acquisitions; |
| |
• | additional amortization expense related to the fair value of identifiable intangible assets acquired; |
| |
• | adjustments to depreciation expense related to fair value adjustments to property, plant and equipment acquired; |
| |
• | additional interest expense associated with financing obtained by the Company in connection with the Salix Acquisition; and |
| |
• | the exclusion from pro forma earnings in the three-month and six-month periods ended June 30, 2015 of the acquisition accounting adjustments on these acquisitions’ inventories that were sold subsequent to the acquisition date of $45 million |
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
and $3 million for the three-month periods ended June 30, 2015 and 2014, $69 million and $8 million for the six-month periods ended June 30, 2015 and 2014, and the acquisition-related costs incurred for these acquisitions, and the inclusion of those amounts in pro forma earnings for the corresponding comparative periods.
In addition, all of the above adjustments were adjusted for the applicable tax impact.
| |
4. | RESTRUCTURING, INTEGRATION AND OTHER COSTS |
In connection with the Salix Acquisition, the Bausch & Lomb Holdings Incorporated (“B&L”) acquisition (the "B&L Acquisition"), as well as other acquisitions, the Company has implemented cost-rationalization and integration initiatives to capture operating synergies and generate cost savings across the Company. These measures included:
| |
• | workforce reductions across the Company and other organizational changes; |
| |
• | closing of duplicative facilities and other site rationalization actions company-wide, including research and development facilities, sales offices and corporate facilities; |
| |
• | leveraging research and development spend; and/or |
Salix Acquisition-Related Cost-Rationalization and Integration Initiatives
The Company estimates that it will incur total costs of approximately $300 million in connection with the cost-rationalization and integration initiatives relating to the Salix Acquisition, which we expect to substantially complete by mid 2016. Since the acquisition date, total costs of $124 million have been incurred through June 30, 2015, including (i) $82 million of restructuring expenses, (ii) $29 million of integration expenses, and (iii) $13 million of acquisition-related costs. The estimate of total costs to be incurred primarily includes: employee termination costs payable to approximately 400 employees of the Company and Salix who have been or will be terminated as a result of the Salix Acquisition; IPR&D termination costs related to the transfer to other parties of product-development programs that do not align with our research and development model; costs to consolidate or close facilities and relocate employees; and contract termination and lease cancellation costs.
Salix Restructuring Costs
The following table summarizes the major components of the restructuring costs incurred in connection with the Salix Acquisition since the acquisition date through June 30, 2015:
|
| | | | | | | | | | | | | | | | |
| | Severance and Related Benefits | | IPR&D Termination Costs | | Contract Termination, Facility Closure and Other Costs | | Total
|
Balance, January 1, 2015 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
|
Costs incurred and/or charged to expense | | 82.4 |
| | — |
| | — |
| | 82.4 |
|
Cash payments | | (25.7 | ) | | — |
| | — |
| | (25.7 | ) |
Non-cash adjustments | | 2.2 |
| | — |
| | — |
| | 2.2 |
|
Balance, June 30, 2015 | | $ | 58.9 |
| | $ | — |
| | $ | — |
| | $ | 58.9 |
|
Salix Integration Costs
As mentioned above, the Company has incurred $29 million of integration costs related to the Salix Acquisition since the acquisition date, which related primarily to integration consulting, duplicate labor, transition service, and other costs. The Company made payments of $16 million related to Salix integration costs since the acquisition date.
B&L Acquisition-Related Cost-Rationalization and Integration Initiatives
The Company estimated that it will incur total costs of approximately $600 million (excluding charges of $53 million described under the table below) in connection with the cost-rationalization and integration initiatives relating to the B&L Acquisition, which were substantially completed by the end of 2014. However, restructuring and integration costs of $8 million, in the aggregate, have been incurred in 2015. Since the acquisition date, total costs of $577 million (including $52 million related
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
to cost-rationalization measures at a contact lens manufacturing plant in Waterford, Ireland, as described below) were incurred through June 30, 2015, including (i) $307 million of restructuring expenses, (ii) $257 million of integration expenses, and (iii) $13 million of acquisition-related costs. The estimate of total costs to be incurred primarily includes: employee termination costs payable to approximately 3,000 employees of the Company and B&L who have been or will be terminated as a result of the B&L Acquisition; IPR&D termination costs related to the transfer to other parties of product-development programs that did not align with our research and development model; costs to consolidate or close facilities and relocate employees; and contract termination and lease cancellation costs.
B&L Restructuring Costs
The following table summarizes the major components of the restructuring costs incurred in connection with the B&L Acquisition since the acquisition date through June 30, 2015:
|
| | | | | | | | | | | | | | | | | | | | |
| | Employee Termination Costs | | IPR&D Termination Costs | | Contract Termination, Facility Closure and Other Costs | | |
| Severance and Related Benefits | | Share-Based Compensation(1) | | | | Total |
Balance, January 1, 2013 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
|
Costs incurred and/or charged to expense | | 155.7 |
| | 52.8 |
| | — |
| | 25.6 |
| | 234.1 |
|
Cash payments | | (77.8 | ) | | (52.8 | ) | | — |
| | (7.8 | ) | | (138.4 | ) |
Non-cash adjustments | | 11.4 |
| | — |
| | — |
| | (6.8 | ) | | 4.6 |
|
Balance, December 31, 2013 | | $ | 89.3 |
| | $ | — |
| | $ | — |
| | $ | 11.0 |
| | $ | 100.3 |
|
Costs incurred and charged to expense | | 46.0 |
| | — |
| | — |
| | 23.7 |
| | 69.7 |
|
Cash payments | | (110.7 | ) | | — |
| | — |
| | (24.9 | ) | | (135.6 | ) |
Non-cash adjustments | | (5.7 | ) | | — |
| | — |
| | (5.4 | ) | | (11.1 | ) |
Balance, December 31, 2014(2) | | $ | 18.9 |
| | $ | — |
| | $ | — |
| | $ | 4.4 |
| | $ | 23.3 |
|
Costs incurred and charged to expense | | 3.0 |
| | — |
| | — |
| | 0.9 |
| | 3.9 |
|
Cash payments | | (12.6 | ) | | — |
| | — |
| | (1.3 | ) | | (13.9 | ) |
Non-cash adjustments | | (1.5 | ) | | — |
| | — |
| | (1.2 | ) | | (2.7 | ) |
Balance, March 31, 2015 | | $ | 7.8 |
| | $ | — |
| | $ | — |
| | $ | 2.8 |
| | $ | 10.6 |
|
Costs incurred and charged to expense | | (0.5 | ) | | — |
| | — |
| | 0.1 |
| | (0.4 | ) |
Cash payments | | (3.7 | ) | | — |
| | — |
| | (0.1 | ) | | (3.8 | ) |
Non-cash adjustments | | 0.3 |
| | — |
| | — |
| | — |
| | 0.3 |
|
Balance, June 30, 2015 | | $ | 3.9 |
| | $ | — |
| | $ | — |
| | $ | 2.8 |
| | $ | 6.7 |
|
___________________________________
| |
(1) | Relates to B&L’s previously cancelled performance-based options and the acceleration of unvested stock options for B&L employees as a result of the B&L Acquisition were recognized in Other expense (income). |
| |
(2) | In the six-month period ended June 30, 2014, the Company recognized $52 million of restructuring charges and made payments of $82 million related to the B&L Acquisition. |
B&L Integration Costs
As mentioned above, the Company has incurred $257 million of integration costs related to the B&L Acquisition since the acquisition date. In the six-month periods ended June 30, 2015 and 2014, the Company incurred $8 million and $100 million, respectively, of integration costs related to the B&L Acquisition, which related primarily to integration consulting, duplicate labor, transition service, and other costs. The Company made payments of $10 million and $112 million related to B&L integration costs during the six-month periods ended June 30, 2015 and 2014, respectively.
In addition to the restructuring and integration costs described above, the Company has recognized $52 million of restructuring costs related to a contact lens manufacturing plant in Waterford, Ireland (the plant was acquired as part of the B&L Acquisition) since the acquisition date (substantially all of which were recognized in the second quarter of 2014). These costs related to employee termination costs with respect to cost-rationalization measures. A reduction of $4 million was recognized in the
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
three-month and six-month periods ended June 30, 2015 based on revised estimates. The Company made payments of $19 million in the six-month period ended June 30, 2015 with respect to this initiative. The Company did not make any payments in the three-month period ended June 30, 2014 with respect to this initiative.
Other Restructuring and Integration-Related Costs (Excluding Salix and B&L)
In the six-month period ended June 30, 2015, in addition to the restructuring and integration costs associated with the Salix Acquisition and the B&L Acquisition described above, the Company incurred an additional $79 million of other restructuring, integration-related and other costs. These costs included (i) $52 million of integration consulting, duplicate labor, transition service, and other costs, (ii) $24 million of severance costs, (iii) $2 million of facility closure costs, and (iv) $1 million of other costs. These costs primarily related to integration and restructuring costs for the Dendreon and other smaller acquisitions. The Company made payments of $54 million during the six-month period ended June 30, 2015 (in addition to the payments related to the Salix Acquisition and the B&L Acquisition described above).
In the six-month period ended June 30, 2014, in addition to the restructuring and integration costs associated with the B&L Acquisition described above, the Company incurred an additional $68 million of other restructuring, integration-related and other costs. These costs included (i) $46 million of integration consulting, duplicate labor, transition service, and other costs, (ii) $12 million of severance costs, (iii) $6 million of other costs, and (iv) $4 million of facility closure costs. These costs primarily related to (i) integration and restructuring costs for Solta Medical and other smaller acquisitions and (ii) intellectual property migration and the global consolidation of the Company’s manufacturing facilities. The Company made payments of $58 million during the six-month period ended June 30, 2014 (in addition to the payments related to the B&L Acquisition described above).
| |
5. | FAIR VALUE MEASUREMENTS |
Fair value measurements are estimated based on valuation techniques and inputs categorized as follows:
| |
• | Level 1 — Quoted prices in active markets for identical assets or liabilities; |
| |
• | Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and |
| |
• | Level 3 — Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using discounted cash flow methodologies, pricing models, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. |
If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following fair value hierarchy table presents the components and classification of the Company’s financial assets and liabilities measured at fair value as of June 30, 2015 and December 31, 2014:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | As of June 30, 2015 | | As of December 31, 2014 |
| | Carrying Value | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | Carrying Value | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) |
Assets: | | | | | | | | | | | | | | | | |
Cash equivalents(1) | | $ | 484.9 |
| | $ | 481.9 |
| | $ | 3.0 |
| | $ | — |
| | $ | 4.6 |
| | $ | 2.8 |
| | $ | 1.8 |
| | $ | — |
|
Restricted cash and cash equivalents | | $ | 8.1 |
| | $ | 8.1 |
| | $ | — |
| | $ | — |
| | $ | 9.1 |
| | $ | 9.1 |
| | $ | — |
| | $ | — |
|
Liabilities: | | | | | | |
| | | | | | | | | | |
Acquisition-related contingent consideration | | $ | (705.8 | ) | | $ | — |
| | $ | — |
| | $ | (705.8 | ) | | $ | (308.8 | ) | | $ | — |
| | $ | — |
| | $ | (308.8 | ) |
___________________________________
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
| |
(1) | Cash equivalents include highly liquid investments with an original maturity of three months or less at acquisition, primarily including money market funds, reflected in the balance sheet at carrying value, which approximates fair value due to their short-term nature. |
In March 2015, the Company entered into foreign currency forward-exchange contracts to sell €1.53 billion and buy U.S. Dollars in order to reduce its exposure to the variability in expected cash inflows attributable to the changes in foreign exchange rates related to the €1.50 billion aggregate principal amount and related interest of 4.50% senior unsecured notes due 2023 (the "Euro Notes") issued on March 27, 2015, the proceeds of which were used to finance the Salix Acquisition (see Note 8 on the closing of the Salix Acquisition). These derivative contracts were not designated as hedges for accounting purposes, and such contracts matured on April 1, 2015 (which coincides with the consummation of the Salix Acquisition). A foreign exchange loss of $26 million was recognized in Foreign exchange and other in the consolidated statement of income (loss) for the three-month period ended March 31, 2015.
In addition to the above, the Company has time deposits valued at cost, which approximates fair value due to their short-term maturities. The carrying value of $25 million and $43 million as of June 30, 2015 and December 31, 2014, respectively, related to these investments is classified within Prepaid expenses and other current assets in the consolidated balance sheets. These investments are Level 2.
There were no transfers between Level 1 and Level 2 during the six-month period ended June 30, 2015.
Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)
The fair value measurement of contingent consideration obligations arising from business combinations is determined using unobservable (Level 3) inputs. These inputs include (i) the estimated amount and timing of projected cash flows; (ii) the probability of the achievement of the factor(s) on which the contingency is based; and (iii) the risk-adjusted discount rate used to present value the probability-weighted cash flows. Significant increases (decreases) in any of those inputs in isolation could result in a significantly lower (higher) fair value measurement.
The following table presents a reconciliation of contingent consideration obligations measured on a recurring basis using significant unobservable inputs (Level 3) for the six-month period ended June 30, 2015:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance, January 1, 2015 | | Issuances(a) | | Payments(b) | | Net Unrealized Loss(c) | | Foreign Exchange(d) | | Release from Restricted Cash | | Balance, June 30, 2015 |
Acquisition-related contingent consideration | $ | (308.8 | ) | | $ | (477.3 | ) | | $ | 93.1 |
| | $ | (18.8 | ) | | $ | 2.0 |
| | $ | 4.0 |
| | $ | (705.8 | ) |
____________________________________
| |
(a) | Primarily relates to contingent consideration liabilities assumed in the Salix and Marathon acquisitions, as well as the impact of measurement period adjustments, as described in Note 3. |
| |
(b) | Primarily relates to payments of acquisition-related contingent consideration related to the OraPharma Topco Holdings, Inc. acquisition consummated in June 2012, the Targretin® agreement entered into with Eisai Inc. in February 2013, and the Elidel®/Xerese®/Zovirax® agreement entered into with Meda Pharma SARL in June 2011 (the "Elidel®/Xerese®/Zovirax® agreement"). |
| |
(c) | For the six-month period ended June 30, 2015, a net loss of $19 million was recognized as Acquisition-related contingent consideration in the consolidated statements of (loss) income, primarily reflecting accretion for the time value of money for the Elidel®/Xerese®/Zovirax® agreement and the Salix Acquisition. |
| |
(d) | Included in other comprehensive income (loss). |
For the six-month period ended June 30, 2015, there were no transfers into or out of Level 3.
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
There were no significant assets or liabilities that were re-measured at fair value on a non-recurring basis subsequent to initial recognition in the six-month period ended June 30, 2015.
The components of inventories as of June 30, 2015 and December 31, 2014 were as follows:
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
|
| | | | | | | | |
| | As of June 30, 2015 | | As of December 31, 2014 |
Raw materials(1) | | $ | 260.6 |
| | $ | 191.1 |
|
Work in process(1) | | 125.9 |
| | 94.2 |
|
Finished goods(1) | | 843.0 |
| | 665.3 |
|
| | $ | 1,229.5 |
| | $ | 950.6 |
|
___________________________________
| |
(1) | The components of inventories shown in the table above are net of allowance for obsolescence. |
| |
7. | INTANGIBLE ASSETS AND GOODWILL |
Intangible Assets
The major components of intangible assets as of June 30, 2015 and December 31, 2014 were as follows:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | As of June 30, 2015 | | As of December 31, 2014 |
| | Gross Carrying Amount | | Accumulated Amortization, Including Impairments | | Net Carrying Amount | | Gross Carrying Amount | | Accumulated Amortization, Including Impairments | | Net Carrying Amount |
Finite-lived intangible assets: | | | | | | | | | | | | |
Product brands | | $ | 21,591.1 |
| | $ | (3,988.8 | ) | | $ | 17,602.3 |
| | $ | 10,320.2 |
| | $ | (3,579.8 | ) | | $ | 6,740.4 |
|
Corporate brands | | 1,020.5 |
| | (80.6 | ) | | 939.9 |
| | 364.2 |
| | (65.2 | ) | | 299.0 |
|
Product rights | | 3,250.9 |
| | (1,473.4 | ) | | 1,777.5 |
| | 3,225.9 |
| | (1,263.8 | ) | | 1,962.1 |
|
Partner relationships | | 213.4 |
| | (114.1 | ) | | 99.3 |
| | 223.1 |
| | (107.5 | ) | | 115.6 |
|
Technology and other | | 518.2 |
| | (363.2 | ) | | 155.0 |
| | 275.5 |
| | (124.3 | ) | | 151.2 |
|
Total finite-lived intangible assets | | 26,594.1 |
| | (6,020.1 | ) | | 20,574.0 |
| | 14,408.9 |
| | (5,140.6 | ) | | 9,268.3 |
|
Indefinite-lived intangible assets: | | | | | | | | | | | | |
Acquired IPR&D(1) | | 878.2 |
| | — |
| | 878.2 |
| | 290.1 |
| | — |
| | 290.1 |
|
Corporate brand(2) | | 1,697.5 |
| | — |
| | 1,697.5 |
| | 1,697.5 |
| | — |
| | 1,697.5 |
|
| | $ | 29,169.8 |
| | $ | (6,020.1 | ) | | $ | 23,149.7 |
| | $ | 16,396.5 |
| | $ | (5,140.6 | ) | | $ | 11,255.9 |
|
____________________________________
| |
(1) | The Company acquired certain IPR&D assets as part of the Salix Acquisition, as described further in Note 3. |
Also, in the second quarter of 2015, the Company wrote-off an IPR&D asset of $12 million related to the Arestin® Peri-Implantitis development program (Developed Markets segment), resulting from analysis of Phase 3 study data. The write-off of the IPR&D asset was recognized in In-process research and development impairments and other charges in the consolidated statement of (loss) income.
| |
(2) | Represents the B&L corporate trademark, which has an indefinite useful life and is therefore not amortized. |
Estimated aggregate amortization expense, as of June 30, 2015, for each of the five succeeding years ending December 31 is as follows:
|
| | | | | | | | | | | | | | | | | | | | |
| | 2015 | | 2016 | | 2017 | | 2018 | | 2019 |
Amortization expense(1) | | $ | 2,218.0 |
| | $ | 2,520.3 |
| | $ | 2,493.7 |
| | $ | 2,361.5 |
| | $ | 2,223.7 |
|
____________________________________
| |
(1) | Estimated amortization expense shown in the table above does not include potential future impairments of finite-lived intangible assets. |
Goodwill
The changes in the carrying amount of goodwill in the six-month period ended June 30, 2015 were as follows:
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
|
| | | | | | | | | | | | |
| | Developed Markets | | Emerging Markets | | Total |
Balance, January 1, 2015 | | $ | 7,115.0 |
| | $ | 2,231.4 |
| | $ | 9,346.4 |
|
Additions(a) | | 8,017.5 |
| | 9.4 |
| | 8,026.9 |
|
Adjustments(b) | | 49.7 |
| | 0.5 |
| | 50.2 |
|
Foreign exchange and other | | (119.3 | ) | | (71.1 | ) | | (190.4 | ) |
Balance, June 30, 2015 | | $ | 15,062.9 |
| | $ | 2,170.2 |
| | $ | 17,233.1 |
|
____________________________________
| |
(a) | Primarily relates to the Salix Acquisition (as described in Note 3). |
| |
(b) | Primarily reflects the impact of measurement period adjustments related to the PreCision acquisition and other smaller acquisitions. |
As described in Note 3, the allocations of the goodwill balance associated with the Salix Acquisition and certain other acquisitions are provisional and subject to the completion of the valuation of the assets acquired and liabilities assumed.
A summary of the Company’s consolidated long-term debt as of June 30, 2015 and December 31, 2014, respectively, is outlined in the table below:
|
| | | | | | | | | | |
| | Maturity Date | | As of June 30, 2015 | | As of December 31, 2014 |
Revolving Credit Facility(1) | | April 2018 | | $ | — |
| | $ | 165.0 |
|
Series A-1 Tranche A Term Loan Facility(1) | | April 2016 | | 139.3 |
| | 139.3 |
|
Series A-2 Tranche A Term Loan Facility(1) | | April 2016 | | 135.9 |
| | 135.5 |
|
Series A-3 Tranche A Term Loan Facility(1) | | October 2018 | | 1,876.2 |
| | 1,633.8 |
|
Series A-4 Tranche A Term Loan Facility(1) | | April 2020 | | 974.6 |
| | — |
|
Series D-2 Tranche B Term Loan Facility(1) | | February 2019 | | 1,084.1 |
| | 1,088.4 |
|
Series C-2 Tranche B Term Loan Facility(1) | | December 2019 | | 832.3 |
| | 835.0 |
|
Series E-1 Tranche B Term Loan Facility(1) | | August 2020 | | 2,529.4 |
| | 2,543.8 |
|
Series F Tranche B Term Loan Facility(1) | | April 2022 | | 4,070.0 |
| | — |
|
Senior Notes: | | | | | | |
6.875% | | December 2018 | | — |
| | 496.6 |
|
7.00% | | October 2020 | | 687.7 |
| | 687.5 |
|
6.75% | | August 2021 | | 645.8 |
| | 645.4 |
|
7.25% | | July 2022 | | 541.5 |
| | 540.9 |
|
6.375% | | October 2020 | | 2,224.0 |
| | 2,221.6 |
|
6.75% | | August 2018 | | 1,586.6 |
| | 1,584.5 |
|
7.50% | | July 2021 | | 1,608.3 |
| | 1,606.9 |
|
5.625% | | December 2021 | | 892.7 |
| | 891.8 |
|
5.50% | | March 2023 | | 990.0 |
| | — |
|
5.375% | | March 2020 | | 1,976.5 |
| | — |
|
5.875% | | May 2023 | | 3,211.0 |
| | — |
|
4.50%(2) | | May 2023 | | 1,652.0 |
| | — |
|
6.125% | | April 2025 | | 3,210.8 |
| | — |
|
Other(3) | | Various | | 12.4 |
| | 12.9 |
|
| | | | 30,881.1 |
| | 15,228.9 |
|
Less current portion | | | | (590.9 | ) | | (0.9 | ) |
Total long-term debt | | | | $ | 30,290.2 |
| | $ | 15,228.0 |
|
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
____________________________________
| |
(1) | Together, the “Senior Secured Credit Facilities” under the Company’s Third Amended and Restated Credit and Guaranty Agreement, as amended (the “Credit Agreement”). |
| |
(2) | Represents the U.S. dollar equivalent of Euro-denominated debt (discussed below). |
| |
(3) | Relates primarily to the debentures assumed in the B&L Acquisition. |
The Company’s Senior Secured Credit Facilities and indentures related to its senior notes contain customary covenants, including, among other things, and subject to certain qualifications and exceptions, covenants that restrict the Company’s ability and the ability of its subsidiaries to: incur or guarantee additional indebtedness; create or permit liens on assets; pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; make certain investments and other restricted payments; engage in mergers, acquisitions, consolidations and amalgamations; transfer and sell certain assets; and engage in transactions with affiliates.
The Company’s Senior Secured Credit Facilities also contain specified financial covenants (consisting of a secured leverage ratio and an interest coverage ratio), various customary affirmative covenants and specified events of default. The Company’s indentures also contain certain customary affirmative covenants and specified events of default.
As of June 30, 2015, the Company was in compliance with all covenants related to the Company’s outstanding debt.
The total fair value of the Company’s long-term debt, with carrying values of $30.88 billion and $15.23 billion at June 30, 2015 and December 31, 2014, was $31.85 billion and $15.78 billion, respectively. The fair value of the Company’s long-term debt is estimated using the quoted market prices for the same or similar debt issuances (Level 2).
Senior Secured Credit Facilities
On January 22, 2015, the Company and certain of its subsidiaries, as guarantors, entered into joinder agreements to allow for an increase in commitments under the Revolving Credit Facility to $1.50 billion and the issuance of $250 million in incremental term loans under the Series A-3 Tranche A Term Loan Facility. The Revolving Credit Facility and the Series A-3 Tranche A Term Loan Facility terms remained unchanged.
On March 5, 2015, the Company entered into an amendment to the Credit Agreement to implement certain revisions in connection with the Salix Acquisition. The amendment, among other things, permitted the Salix Acquisition and the refinancing, repayment, termination and discharge of Salix's outstanding indebtedness, as well as the issuance of senior unsecured notes to be used to fund the Salix Acquisition (as described below). The amendment also modified the interest coverage ratio financial maintenance covenant applicable to the Company through March 31, 2016.
Concurrently with the Salix Acquisition on April 1, 2015, the Company obtained incremental term loan commitments in the aggregate principal amount of $5.15 billion (the "Incremental Term Loan Facilities") under its existing Credit Agreement. The Incremental Term Loan Facilities, which were fully drawn in the second quarter of 2015, consist of (1) $1.00 billion of tranche A term loans (the "Series A-4 Tranche A Term Loan Facility"), bearing interest at a rate per annum equal to, at the election of the Company, (i) the base rate plus a range between 0.75% and 1.25% or (ii) LIBO rate plus a range between 1.75% and 2.25%, in each case, depending on the Company's leverage ratio and having terms that are consistent with the Company's existing tranche A term loans, and (2) $4.15 billion of tranche B term loans (the "Series F Tranche B Term Loan Facility"), bearing interest at a rate per annum equal to, at election of the Company, (i) the base rate plus a range between 2.00% and 2.25% or (ii) LIBO rate plus a range between 3.00% and 3.25%, depending on the Company's secured leverage ratio and subject to a 1.75% base rate floor and 0.75% LIBO rate floor, and having terms that are consistent with the Company's existing tranche B term loans. In connection with the issuance of the Incremental Term Loan Facilities the Company incurred a total of approximately $85 million of costs and fees (treated as a deduction to Long-term debt), including an original issue discount of approximately $21 million.
The Series A-4 Tranche A Term Loan Facility matures on April 1, 2020 and amortizes quarterly commencing June 30, 2015 at the initial annual rate of 5%. The amortization schedule under the Series A-4 Tranche A Term Loan Facility will increase to 10% annually commencing June 30, 2016 and 20% annually commencing June 30, 2017, payable in quarterly installments. The Series F Tranche B Term Loan Facility matures on April 1, 2022 and amortizes quarterly commencing June 30, 2015 at an annual rate of 1%.
On May 29, 2015, the Company and certain of its subsidiaries, as guarantors, entered into Amendment No. 11 to the Credit Agreement to reprice the Series D-2 Tranche B Term Loan Facility. The applicable margins for borrowings under the Series
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
D-2 Tranche B Term Loan Facility, as modified by the repricing, are initially 1.75% with respect to base rate borrowings and 2.75% with respect to LIBO rate borrowings, then, upon delivery of the financial statements of the Company for the fiscal quarter ending September 30, 2015, between 1.50% and 1.75% for base rate borrowings and between 2.50% and 2.75% for LIBO rate borrowings, in each case, based on the secured leverage ratio of the Company for each fiscal quarter for which financial statements are delivered as required under the Credit Agreement, subject to a 1.75% base rate floor and a 0.75% LIBO rate floor. Any prepayment of the Series D-2 Tranche B Term Loan Facility in connection with any repricings or refinancings thereof prior to November 29, 2015 will require a prepayment premium of 1.0% of such loans prepaid. Costs and fees incurred in connection with the repricing of the Series D-2 Tranche B Term Loan Facility were nominal.
For the six-month period ended June 30, 2015, the effective rate of interest on the Company’s borrowings was as follows: (i) 2.42% per annum under the Revolving Credit Facility, (ii) 2.29% per annum under both the Series A-1 Tranche A Term Loan Facility and the Series A-2 Tranche A Term Loan Facility, (iii) 2.28% per annum under the Series A-3 Tranche A Term Loan Facility, (iv) 2.44% per annum under the Series A-4 Tranche A Term Loan Facility, (v) 3.50% per annum under the Series D-2 Tranche B Term Loan Facility, the Series C-2 Tranche B Term Loan Facility, and the Series E-1 Tranche B Term Loan Facility, and (vi) 4.00% per annum under the Series F Tranche B Term Loan Facility.
5.50% Senior Notes due 2023
On January 30, 2015, the Company issued $1.00 billion aggregate principal amount of the 5.50% senior unsecured notes due 2023 ("2023 Notes") in a private placement. The 2023 Notes mature on March 1, 2023 and bear interest at the rate of 5.50% per annum, payable semi-annually in arrears, commencing on September 1, 2015. In connection with the issuance of the 2023 Notes, the Company incurred approximately $8 million in underwriting fees, which were recognized as debt issue discount and resulted in net proceeds of $992 million. The 2023 Notes are guaranteed by each of the Company’s subsidiaries that is a guarantor of the Company’s existing Senior Secured Credit Facilities.
The net proceeds of the 2023 Notes offering were used to (i) redeem all of the outstanding 6.875% senior notes on February 17, 2015, as described below, (ii) repay amounts drawn under the Revolving Credit Facility, and (iii) for general corporate purposes.
The indenture governing the terms of the 2023 Notes provides that at any time prior to March 1, 2018, the Company may redeem up to 40% of the aggregate principal amount of the 2023 Notes using the proceeds of certain equity offerings at a redemption price of 105.50% of the principal amount of the 2023 Notes, plus accrued and unpaid interest to the date of redemption. On or after March 1, 2018, the Company may redeem all or a portion of the 2023 Notes at the redemption prices applicable to the 2023 Notes, as set forth in the 2023 Notes indenture, plus accrued and unpaid interest to the date of redemption.
If the Company experiences a change in control, the Company may be required to repurchase the 2023 Notes, in whole or in part, at a purchase price equal to 101% of the aggregate principal amount of the 2023 Notes repurchased, plus accrued and unpaid interest to, but excluding the applicable purchase date of the 2023 Notes.
6.875% Senior Notes
On February 17, 2015, Valeant redeemed $500 million of the outstanding principal amount of its 6.875% senior notes due December 2018 (the "December 2018 Notes") for $524 million, including a call premium of $17 million, plus accrued and unpaid interest, and satisfied and discharged the December 2018 Notes indenture. In connection with this transaction, the Company recognized a loss on extinguishment of debt of $20 million in the three-month period ended March 31, 2015.
Senior Unsecured Notes
On March 27, 2015, VRX Escrow Corp. (the "Issuer"), a newly formed wholly owned Canadian subsidiary of the Company, issued $2 billion aggregate principal amount of 5.375% senior unsecured notes due 2020 (the "2020 Notes"), $3.25 billion aggregate principal amount of 5.875% senior unsecured notes due 2023 (the "May 2023 Notes"), €1.50 billion aggregate principal amount of the Euro Notes, and $3.25 billion aggregate principal amount of 6.125% senior unsecured notes due 2025 (the "2025 Notes" and, together with the 2020 Notes, the May 2023 Notes and the Euro Notes, the "Notes") in a private placement. In connection with the issuance of the Notes, the Company incurred approximately $114 million in underwriting fees, in the aggregate, which were recognized as debt issue discount in the first quarter of 2015.
In addition, the Issuer entered into an escrow and security agreement (the “Escrow Agreement”) dated as of March 27, 2015, with an escrow agent. Pursuant to the Escrow Agreement, the proceeds from the issuance of the Notes, together with cash sufficient to fund certain accrued and unpaid interest on the Notes, totaling $10.34 billion in the aggregate, were deposited
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
into escrow accounts and held as collateral security for the Issuer’s obligations until the consummation of the Salix Acquisition which occurred on April 1, 2015.
At the time of the closing of the Salix Acquisition in April 2015, (1) the Issuer was voluntarily liquidated and all of its obligations were assumed by, and all of its assets were distributed to, the Company, (2) the Company assumed all of the Issuer's obligations under the Notes and the related indenture and (3) the funds previously held in escrow were released to the Company and were used to finance the Salix Acquisition (as such, the $10.34 billion referenced in the preceding paragraph was released from Restricted cash and cash equivalents in April 2015.)
The net proceeds from the issuance of the Notes, together with borrowings under the Company's Incremental Term Loan Facilities (described above), equity financing (described in Note 11) and cash on hand, were used to fund (i) the transactions contemplated by the Merger Agreement, (ii) the refinancing, repayment, termination and discharge of Salix’s outstanding indebtedness, and (iii) certain transaction expenses.
The 2020 Notes will mature on March 15, 2020 and bear interest at the rate of 5.375% per annum, payable semi-annually in arrears, commencing on September 15, 2015. The May 2023 Notes and the Euro Notes will mature on May 15, 2023 and bear interest at the rate of 5.875% and 4.50% per annum, respectively, payable semi-annually in arrears, commencing on November 15, 2015. The 2025 Notes will mature on April 15, 2025 and bear interest at the rate of 6.125% per annum, payable semi-annually in arrears, commencing on October 15, 2015.
The Notes are guaranteed by each of the Company’s subsidiaries that is a guarantor of the Company’s existing Senior Secured Credit Facilities.
The indenture governing the terms of the Notes provides that the Company may redeem up to 40% of the aggregate principal amount of each series of the Notes using the proceeds of certain equity offerings, subject to specified conditions, at any time prior to (i) March 15, 2017 with respect to the 2020 Notes and at a redemption price of 105.375% of the principal amount of the 2020 Notes, plus accrued and unpaid interest to the date of the redemption, (ii) May 15, 2018 with respect to the May 2023 Notes and at a redemption price of 105.875% of the principal amount of the May 2023 Notes, plus accrued and unpaid interest to the date of the redemption, (iii) May 15, 2018 with respect to the Euro Notes and at a redemption price of 104.50% of the principal amount of the Euro Notes, plus accrued and unpaid interest to the date of the redemption, and (iv) April 15, 2018 with respect to the 2025 Notes and at a redemption price of 106.125% of the principal amount of the 2025 Notes, plus accrued and unpaid interest to the date of the redemption. On or after March 15, 2017, May 15, 2018, May 15, 2018, and April 15, 2020, the Company may redeem all or a portion of the 2020 Notes, the May 2023 Notes, the Euro Notes, and the 2025 Notes, respectively, at the redemption prices applicable to each series of the Notes, as set forth in the indenture.
If the Company experiences a change in control, the Company may be required to repurchase the Notes, as applicable, in whole or in part, at a purchase price equal to 101% of the aggregate principal amount of the applicable series of the Notes repurchased, plus accrued and unpaid interest to, but excluding the applicable purchase date of such series of the Notes.
Convertible Notes
The convertible notes assumed as of the acquisition date by the Company in connection with the Salix Acquisition consisted of two tranches: (i) 2.75% senior notes due May 15, 2015 (the “2.75% Convertible Notes”), with an outstanding principal amount of $345 million and (ii) 1.5% convertible senior notes due March 15, 2019 (the “1.5% Convertible Notes”), with an outstanding principal amount of $690 million.
In connection with the completion of the Salix Acquisition, the Company and the trustee of each of the convertible notes entered into a supplemental indenture on April 1, 2015, providing that, at and after the effective time of the Salix Acquisition, the right to convert each $1,000 principal amount of any notes into cash, shares of common stock of Salix or a combination of cash and shares of common stock of Salix at the Company's election, has been changed to a right to convert each $1,000 principal amount of such notes into cash.
During the second quarter of 2015, all of the outstanding principal amount of the 2.75% Convertible Notes were settled in cash at an average price of $3,729.46 per $1,000 principal amount of the notes, plus accrued interest, and all of the outstanding principal amount of the 1.5% Convertible Notes, except for a nominal amount, were settled in cash at an average price of $2,663.26 per $1,000 principal amount of the notes. The remaining outstanding principal amount of the 1.5% Convertible Notes will be converted at a conversion price of $2,628.68 per $1,000 principal amount of the notes when surrendered by the noteholders for conversion.
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
Commitment Letter
In connection with the Salix Acquisition (see Note 3), the Company entered into a commitment letter dated as of February 20, 2015 (as amended and restated as of March 8, 2015, the “Commitment Letter”), with a syndicate of banks, led by Deutsche Bank and HSBC. Pursuant to the Commitment Letter, commitment parties committed to provide (i) incremental term loans pursuant to the Credit Agreement of up to $5.55 billion and (ii) senior unsecured increasing rate bridge loans under a new senior unsecured bridge facility of up to $9.60 billion. Subsequently, the Company obtained $15.25 billion in debt financing comprised of a combination of the incremental term loan facilities under the Company's existing Credit Agreement in an aggregate principal amount of $5.15 billion and the issuance of the Notes in the U.S. dollar equivalent aggregate principal amount of approximately $10.1 billion, as described above. In the first quarter of 2015, the Company expensed $72 million of financing costs associated with the Commitment Letter to Interest expense in the consolidated statement of income (loss).
In addition, on March 27, 2015, the Company issued new equity of approximately $1.45 billion to fund the Salix Acquisition (see Note 11 for further information regarding the equity issuance).
| |
9. | SHARE-BASED COMPENSATION |
In May 2014, shareholders approved the Company’s 2014 Omnibus Incentive Plan (the “2014 Plan”) which replaced the Company’s 2011 Omnibus Incentive Plan (the “2011 Plan”) for future equity awards granted by the Company. The Company transferred the common shares available under the 2011 Plan to the 2014 Plan. The maximum number of common shares that may be issued to participants under the 2014 Plan is equal to 18,000,000 common shares, plus the number of common shares under the 2011 Plan reserved but unissued and not underlying outstanding awards, plus the number of common shares becoming available for reuse after awards are terminated, forfeited, cancelled, exchanged or surrendered under the 2011 Plan and the Company’s 2007 Equity Compensation Plan. The Company registered, in the aggregate, 20,000,000 common shares of common stock for issuance under the 2014 Plan. Approximately 14,458,169 shares were available for future grants as of June 30, 2015. The Company uses reserved and unissued common shares to satisfy its obligation under its share-based compensation plans.
The following table summarizes the components and classification of share-based compensation expense related to stock options and restricted share units (“RSUs”) for the three-month and six-month periods ended June 30, 2015 and 2014:
|
| | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2015 | | 2014 | | 2015 | | 2014 |
Stock options | $ | 3.5 |
| | $ | 4.2 |
| | $ | 7.4 |
| | $ | 9.3 |
|
RSUs | 22.4 |
| | 11.4 |
| | 53.5 |
| | 31.1 |
|
Share-based compensation expense | $ | 25.9 |
| | $ | 15.6 |
| | $ | 60.9 |
| | $ | 40.4 |
|
| | | | | | | |
Research and development expenses | $ | 1.5 |
| | $ | 1.4 |
| | $ | 3.0 |
| | $ | 2.8 |
|
Selling, general and administrative expenses | 24.4 |
| | 14.2 |
| | 57.9 |
| | 37.6 |
|
Share-based compensation expense | $ | 25.9 |
| | $ | 15.6 |
| | $ | 60.9 |
| | $ | 40.4 |
|
In the six-month periods ended June 30, 2015 and 2014, the Company granted approximately 97,000 stock options with a weighted-average exercise price of $201.70 per option and approximately 261,000 stock options with a weighted-average exercise price of $117.83 per option, respectively. The weighted-average fair values of all stock options granted to employees in the six-month periods ended June 30, 2015 and 2014 were $66.81 and $62.15, respectively.
In the six-month periods ended June 30, 2015 and 2014, the Company granted approximately 45,000 time-based RSUs with a weighted-average grant date fair value of $224.45 per RSU and approximately 91,000 time-based RSUs with a weighted-average grant date fair value of $135.42 per RSU, respectively.
In the six-month periods ended June 30, 2015 and 2014, the Company granted approximately 693,000 performance-based RSUs with a weighted-average grant date fair value of $310.56 per RSU and approximately 410,000 performance-based RSUs with a weighted-average grant date fair value of $209.72 per RSU, respectively.
On June 30, 2015, an executive terminated his employment and has subsequently entered into a consulting service agreement with the Company through January 2016. As a result, the outstanding awards held by the executive were modified to allow
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
the recipient to continue vesting in those awards as service is rendered. Share-based compensation expense previously recognized of $6 million related to the original awards was reversed in the second quarter of 2015 when such awards were deemed improbable of vesting. The modified awards will be re-measured at fair value, at each reporting period, until a performance commitment is reached or the performance is complete. The value of the modified awards will be recognized as expense over the requisite service period.
As of June 30, 2015, the total remaining unrecognized compensation expense related to non-vested stock options, time-based RSUs and performance-based RSUs amounted to $365 million, in the aggregate, which will be amortized over a weighted-average period of 3.42 years.
| |
10. | PENSION AND POSTRETIREMENT EMPLOYEE BENEFIT PLANS |
The Company sponsors defined benefit plans and a participatory defined benefit postretirement medical and life insurance plan, which covers certain U.S. employees and employees in certain other countries.
Net Periodic (Benefit) Cost
The following table provides the components of net periodic (benefit) cost for the Company’s defined benefit pension plans and postretirement benefit plan for the three-month and six-month periods ended June 30, 2015 and 2014:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Pension Benefit Plans | | Postretirement Benefit Plan |
| U.S. Plan | | Non-U.S. Plans | |
| | Three Months Ended June 30, |
| | 2015 | | 2014 | | 2015 | | 2014 | | 2015 | | 2014 |
Service cost | | $ | 0.4 |
| | $ | 0.1 |
| | $ | 0.8 |
| | $ | 1.0 |
| | $ | 0.5 |
| | $ | 0.4 |
|
Interest cost | | 2.4 |
| | 2.7 |
| | 1.6 |
| | 2.1 |
| | 0.5 |
| | 0.6 |
|
Expected return on plan assets | | (3.6 | ) | | (3.7 | ) | | (2.0 | ) | | (2.0 | ) | | (0.1 | ) | | (0.1 | ) |
Amortization of prior service credit | | — |
| | — |
| | (0.2 | ) | | — |
| | (0.7 | ) | | (0.6 | ) |
Amortization of net loss | | — |
| | — |
| | 0.4 |
| | — |
| | — |
| | — |
|
Net periodic (benefit) cost | | $ | (0.8 | ) | | $ | (0.9 | ) | | $ | 0.6 |
| | $ | 1.1 |
| | $ | 0.2 |
| | $ | 0.3 |
|
| | | | | | | | | | | | |
| | Pension Benefit Plans | | Postretirement Benefit Plan |
| U.S. Plan | | Non-U.S. Plans | |
| | Six Months Ended June 30, |
| | 2015 | | 2014 | | 2015 | | 2014 | | 2015 | | 2014 |
Service cost | | $ | 0.8 |
| | $ | 0.2 |
| | $ | 1.6 |
| | $ | 2.0 |
| | $ | 1.0 |
| | $ | 0.8 |
|
Interest cost | | 4.8 |
| | 5.4 |
| | 3.2 |
| | 4.3 |
| | 1.0 |
| | 1.2 |
|
Expected return on plan assets | | (7.2 | ) | | (7.4 | ) | | (4.0 | ) | | (4.0 | ) | | (0.2 | ) | | (0.2 | ) |
Amortization of prior service credit | | — |
| | — |
| | (0.3 | ) | | — |
| | (1.3 | ) | | (1.2 | ) |
Amortization of net loss | | — |
| | — |
| | 0.7 |
| | — |
| | — |
| | — |
|
Net periodic (benefit) cost | | $ | (1.6 | ) | | $ | (1.8 | ) | | $ | 1.2 |
| | $ | 2.3 |
| | $ | 0.5 |
| | $ | 0.6 |
|
During the six-month period ended June 30, 2015, the Company contributed $4 million and $3 million to the U.S. and Non-U.S. pension benefit plans, respectively. In 2015, the Company expects to contribute $10 million and $7 million to the U.S. and Non-U.S. pension benefit plans, respectively, inclusive of amounts contributed to the plans during the six-month period ended June 30, 2015.
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Valeant Pharmaceuticals International, Inc. Shareholders | | | | |
| Common Shares | | Additional Paid-In Capital | | Accumulated Deficit | | Accumulated Other Comprehensive Loss | | Valeant Pharmaceuticals International, Inc. Shareholders’ Equity | | Noncontrolling Interest | | Total Equity |
| Shares | | Amount | | | | | | |
Balance, January 1, 2014 | 333.0 |
| | $ | 8,301.2 |
| | $ | 228.8 |
| | $ | (3,278.5 | ) | | $ | (132.8 | ) | | $ | 5,118.7 |
| | $ | 114.6 |
| | $ | 5,233.3 |
|
Common shares issued under share-based compensation plans | 0.8 |
| | 24.7 |
| | (17.5 | ) | | — |
| | — |
| | 7.2 |
| | — |
| | 7.2 |
|
Settlement of stock options | — |
| | — |
| | (3.1 | ) | | — |
| | — |
| | (3.1 | ) | | — |
| | (3.1 | ) |
Share-based compensation | — |
| | — |
| | 40.4 |
| | — |
| | — |
| | 40.4 |
| | — |
| | 40.4 |
|
Employee withholding taxes related to share-based awards | — |
| | — |
| | (36.5 | ) | | — |
| | — |
| | (36.5 | ) | | — |
| | (36.5 | ) |
Tax benefits from stock options exercised | — |
| | — |
| | 1.2 |
| | — |
| | — |
| | 1.2 |
| | — |
| | 1.2 |
|
Acquisition of noncontrolling interest | — |
| | — |
| | (1.1 | ) | | — |
| | — |
| | (1.1 | ) | | (2.2 | ) | | (3.3 | ) |
| 333.8 |
| | 8,325.9 |
| | 212.2 |
| | (3,278.5 | ) | | (132.8 | ) | | 5,126.8 |
| | 112.4 |
| | 5,239.2 |
|
Comprehensive income: | | | | | | | | | | | | | | | |
Net income (loss) | — |
| | — |
| | — |
| | 103.2 |
| | — |
| | 103.2 |
| | (1.5 | ) | | 101.7 |
|
Other comprehensive income (loss) | — |
| | — |
| | — |
| | — |
| | 28.1 |
| | 28.1 |
| | (1.7 | ) | | 26.4 |
|
Total comprehensive income | | | | | | | | | | | 131.3 |
| | (3.2 | ) | | 128.1 |
|
Balance, June 30, 2014 | 333.8 |
| | $ | 8,325.9 |
| | $ | 212.2 |
| | $ | (3,175.3 | ) | | $ | (104.7 | ) | | $ | 5,258.1 |
| | $ | 109.2 |
| | $ | 5,367.3 |
|
| | | | | | | | | | | | | | | |
Balance, January 1, 2015 | 334.4 |
| | $ | 8,349.2 |
| | $ | 243.9 |
| | $ | (2,365.0 | ) | | $ | (915.9 | ) | | $ | 5,312.2 |
| | $ | 122.3 |
| | $ | 5,434.5 |
|
Issuance of common stock (see below) | 7.5 |
| | 1,481.0 |
| | — |
| | — |
| | — |
| | 1,481.0 |
| | — |
| | 1,481.0 |
|
Common shares issued under share-based compensation plans | 1.1 |
| | 57.0 |
| | (34.9 | ) | | — |
| | — |
| | 22.1 |
| | — |
| | 22.1 |
|
Repurchases of common shares | (0.2 | ) | | (6.4 | ) | | — |
| | (43.6 | ) | | — |
| | (50.0 | ) | | — |
| | (50.0 | ) |
Share-based compensation | — |
| | — |
| | 60.9 |
| | — |
| | — |
| | 60.9 |
| | — |
| | 60.9 |
|
Employee withholding taxes related to share-based awards | — |
| | — |
| | (61.5 | ) | | — |
| | — |
| | (61.5 | ) | | — |
| | (61.5 | ) |
Tax benefits from stock options exercised | — |
| | — |
| | 25.6 |
| | — |
| | — |
| | 25.6 |
| | — |
| | 25.6 |
|
Noncontrolling interest distributions | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (1.1 | ) | | (1.1 | ) |
| 342.8 |
| | 9,880.8 |
| | 234.0 |
| | (2,408.6 | ) | | (915.9 | ) | | 6,790.3 |
| | 121.2 |
| | 6,911.5 |
|
Comprehensive loss: | | | | | | | | | | | | | | | |
Net income (loss) | — |
| | — |
| | — |
| | 20.7 |
| | — |
| | 20.7 |
| | 2.2 |
| | 22.9 |
|
Other comprehensive loss | — |
| | — |
| | — |
| | — |
| | (375.6 | ) | | (375.6 | ) | | (0.4 | ) | | (376.0 | ) |
Total comprehensive loss | | | | | | | | | | | (354.9 | ) | | 1.8 |
| | (353.1 | ) |
Balance, June 30, 2015 | 342.8 |
| | $ | 9,880.8 |
| | $ | 234.0 |
| | $ | (2,387.9 | ) | | $ | (1,291.5 | ) | | $ | 6,435.4 |
| | $ | 123.0 |
| | $ | 6,558.4 |
|
On March 27, 2015, the Company completed, pursuant to an Underwriting Agreement dated March 17, 2015 with Deutsche Bank Securities Inc. on behalf of several underwriters, a registered offering in the United States of 7,286,432 of its common shares, no par value, at a price of $199.00 per common share, for aggregate gross proceeds of approximately $1.45 billion. In connection with the issuance of these new common shares, the Company incurred approximately $18 million of issuance costs, which has been reflected as reduction to the gross proceeds from the equity issuance. The proceeds of this offering were used to fund the Salix Acquisition. The Company granted the underwriters an option to purchase additional common shares equal to up to 15% of the common shares initially issued in the offering. This option was not exercised by the underwriters.
On June 10, 2015, the Company issued 213,610 common shares, representing a portion of the consideration transferred in connection with the Dendreon acquisition. The shares had an aggregate value of approximately $50 million as of the date of issuance. See Note 3 for additional information regarding the Dendreon acquisition.
On November 20, 2014, the Company announced that its Board of Directors had approved a new securities repurchase program (the "2014 Securities Repurchase Program"). In June 2015, under the 2014 Securities Repurchase Program, the Company repurchased 224,215 of its common shares for an aggregate price of $50 million. The excess of the purchase price over the carrying value of the common shares repurchased of $44 million was charged to accumulated deficit. These common shares were subsequently canceled.
| |
12. | ACCUMULATED OTHER COMPREHENSIVE LOSS |
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
The components of accumulated other comprehensive loss as of June 30, 2015 and 2014, were as follows:
|
| | | | | | | | | | | | | | | | | | | | |
| | Foreign Currency Translation Adjustment | | Unrealized Gain on Equity Investment | | Net Unrealized Holding Gain on Available-For-Sale Equity Securities | | Pension Adjustment | | Total |
Balance, January 1, 2014 | | $ | (170.3 | ) | | $ | — |
| | $ | — |
| | $ | 37.5 |
| | $ | (132.8 | ) |
Foreign currency translation adjustment | | 8.1 |
| | — |
| | — |
| | — |
| | 8.1 |
|
Unrealized gain on equity method investment, net of tax(1) | | — |
| | 18.5 |
| | — |
| | — |
| | 18.5 |
|
Net unrealized holding gain on available-for-sale equity securities, net of tax | | — |
| | — |
| | 2.7 |
| | — |
| | 2.7 |
|
Pension adjustment(2) | | — |
| | — |
| | — |
| | (1.2 | ) | | (1.2 | ) |
Balance, June 30, 2014 | | $ | (162.2 | ) | | $ | 18.5 |
| | $ | 2.7 |
| | $ | 36.3 |
| | $ | (104.7 | ) |
| | | | | | | | | | |
Balance, January 1, 2015 | | $ | (886.5 | ) | | $ | — |
| | $ | — |
| | $ | (29.4 | ) | | $ | (915.9 | ) |
Foreign currency translation adjustment | | (374.7 | ) | | — |
| | — |
| | — |
| | (374.7 | ) |
Pension adjustment(2) | | — |
| | — |
| | — |
| | (0.9 | ) | | (0.9 | ) |
Balance, June 30, 2015 | | $ | (1,261.2 | ) | | $ | — |
| | $ | — |
| | $ | (30.3 | ) | | $ | (1,291.5 | ) |
____________________________________
| |
(1) | Relates to the Company's investment in PS Fund 1, LLC ("PS Fund 1"), an entity that we previously owned with Pershing Square Capital Management, L.P. ("Pershing Square"). The Company is no longer a member of PS Fund 1. |
| |
(2) | Reflects changes in defined benefit obligations and related plan assets of the Company’s defined benefit pension plans and the U.S. postretirement benefit plan (see Note 10). |
Income taxes are not provided for foreign currency translation adjustments arising on the translation of the Company’s operations having a functional currency other than the U.S. dollar. Income taxes allocated to reclassification adjustments were not material.
In the three-month period ended June 30, 2015, the Company recognized an income tax benefit of $13 million, comprised of $13 million related to the expected tax benefit in tax jurisdictions outside of Canada and an income tax benefit of a nominal amount related to Canadian income taxes. In the six-month period ended June 30, 2015, the Company recognized an income tax expense of $68 million, comprised of $67 million related to the expected tax expense in tax jurisdictions outside of Canada and an income tax expense of $1 million related to Canadian income taxes. In the three-month and six-month periods ended June 30, 2015, the Company’s effective tax rate was different from the Company’s statutory Canadian tax rate due to tax expense generated from the Company’s annualized mix of earnings by jurisdiction and a benefit for restructurings undertaken to streamline operations in Germany.
The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. When the Company establishes or reduces the valuation allowance against its deferred tax assets, the provision for income taxes will increase or decrease, respectively, in the period such determination is made. The valuation allowance against deferred tax assets is estimated to be $1.03 billion as of June 30, 2015 and was $859 million as of December 31, 2014. The Company will continue to assess this amount for appropriateness on a go-forward basis associated with the deferred tax assets previously established.
As of June 30, 2015, the Company had $359 million of unrecognized tax benefits, which included $40 million relating to interest and penalties. Of the total unrecognized tax benefits, $102 million would reduce the Company’s effective tax rate, if recognized. The Company anticipates that a nominal amount of unrecognized tax benefits may be resolved within the next 12 months.
The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. As of June 30, 2015, the Company had accrued $33 million for interest and $7 million for penalties.
The Company is currently under examination by the Canada Revenue Agency for three separate cycles: (a) years 2005 to 2006, (b) 2007 through 2009, and (c) 2010 through 2011. In February 2013, the Company received a proposed audit adjustment
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
for the years 2005 through 2007. The Company disagrees with the adjustments and has filed a Notice of Objection. The total proposed adjustment would result in a loss of tax attributes which are subject to a full valuation allowance and would not result in material change to the provision for income taxes.
The Company’s U.S. consolidated federal income tax return for the 2011 and 2012 tax years is currently under examination by the Internal Revenue Service. The Company remains under examination for various state tax audits in the U.S. for years 2002 to 2013. In addition, certain affiliates of the Company in other regions outside of Canada and the U.S. are currently under examination by relevant taxing authorities, and all necessary accruals have been recorded, including uncertain tax benefits. At this time, the Company does not expect that proposed adjustments, if any, would be material to the Company's financial statements.
| |
14. | (LOSS) EARNINGS PER SHARE |
(Loss) earnings per share attributable to Valeant Pharmaceuticals International, Inc. for the three-month and six-month periods ended June 30, 2015 and 2014 were calculated as follows:
|
| | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2015 | | 2014 | | 2015 | | 2014 |
Net (loss) income attributable to Valeant Pharmaceuticals International, Inc. | $ | (53.0 | ) | | $ | 125.8 |
| | $ | 20.7 |
| | $ | 103.2 |
|
| | | | | | | |
Basic weighted-average number of common shares outstanding | 344.4 |
| | 335.3 |
| | 340.5 |
| | 335.1 |
|
Diluted effect of stock options, RSUs and other(a) | — |
| | 6.0 |
| | 6.6 |
| | 6.3 |
|
Diluted weighted-average number of common shares outstanding | 344.4 |
| | 341.3 |
| | 347.1 |
| | 341.4 |
|
| | | | | | | |
(Loss) earnings per share attributable to Valeant Pharmaceuticals International, Inc.: | | | | | | | |
Basic | $ | (0.15 | ) | | $ | 0.38 |
| | $ | 0.06 |
| | $ | 0.31 |
|
Diluted | $ | (0.15 | ) | | $ | 0.37 |
| | $ | 0.06 |
| | $ | 0.30 |
|
____________________________________
| |
(a) | In the three-month period ended June 30, 2015, all potential common shares issuable for stock options and RSUs were excluded from the calculation of diluted loss per share, as the effect of including them would have been anti-dilutive. The dilutive effect of potential common shares issuable for stock options and RSUs on the weighted-average number of common shares outstanding would have been as follows: |
|
| | | |
| | Three Months Ended June 30, |
| | 2015 |
Basic weighted-average number of common shares outstanding | | 344.4 |
|
Diluted effect of stock options, RSUs and other | | 6.5 |
|
Diluted weighted-average number of common shares outstanding | | 350.9 |
|
In the three-month and six-month periods ended June 30, 2015, stock options to purchase approximately 92,000 common shares in both of the corresponding periods of the Company were not included in the computation of diluted (loss) earnings per share because the effect would have been anti-dilutive under the treasury stock method, compared with 915,000 common shares in both of the corresponding periods of 2014.
From time to time, the Company becomes involved in various legal and administrative proceedings, which include product liability, intellectual property, commercial, antitrust, governmental and regulatory investigations, related private litigation and ordinary course employment-related issues. From time to time, the Company also initiates actions or files counterclaims. The Company could be subject to counterclaims or other suits in response to actions it may initiate. The Company believes that
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
the prosecution of these actions and counterclaims is important to preserve and protect the Company, its reputation and its assets. Certain of these proceedings and actions are described below.
Unless otherwise indicated, the Company cannot reasonably predict the outcome of these legal proceedings, nor can it estimate the amount of loss, or range of loss, if any, that may result from these proceedings. An adverse outcome in certain of these proceedings could have a material adverse effect on the Company’s business, financial condition and results of operations, and could cause the market value of its common shares to decline.
Governmental and Regulatory Inquiries
Legacy Biovail Matters
On May 16, 2008, Biovail Pharmaceuticals, Inc. (“BPI”), the Company’s former subsidiary, entered into a written plea agreement with the U.S. Attorney’s Office (“USAO”) for the District of Massachusetts whereby it agreed to plead guilty to violating the U.S. Anti-Kickback Statute and pay a fine of $22 million.
In addition, on May 16, 2008, the Company entered into a non-prosecution agreement with the USAO whereby the USAO agreed to decline prosecution of Biovail Corporation (“Biovail”) in exchange for continuing cooperation and a civil settlement agreement and pay a civil penalty of $2 million. A hearing before the U.S. District Court in Boston took place on September 14, 2009 and the plea was approved.
In addition, as part of the overall settlement, Biovail entered into a Corporate Integrity Agreement (“CIA”) with the Office of the Inspector General ("OIG") and the Department of Health and Human Services on September 11, 2009. The CIA required the Company to have a compliance program in place and to undertake a set of defined corporate integrity obligations for a five-year term which concluded on September 10, 2014. The CIA also included requirements for an annual independent review of these obligations. The Company submitted its final annual report to the OIG on February 6, 2015.
Civil Investigative Demand from the U.S. Federal Trade Commission
On May 2, 2012, Medicis Pharmaceutical Corporation ("Medicis") received a civil investigative demand from the FTC requiring that Medicis provide to the FTC information and documents relating to various settlement and other agreements with makers of generic SOLODYN® products following patent infringement claims and litigation, each of which was previously filed with the FTC and the Antitrust Division of the Department of Justice, and other efforts principally relating to SOLODYN®. On June 7, 2013, Medicis received an additional civil investigative demand relating to such settlements, agreements and efforts. Medicis is cooperating with this investigative process. If, at the conclusion of this process, the FTC believes that any of the agreements or efforts violates antitrust laws, it could challenge Medicis through a civil administrative or judicial proceeding. If the FTC ultimately challenges the agreements, we would expect to vigorously defend any such action.
Subpoenas from the New York Office of Inspector General for the U.S. Department of Health and Human Services
On June 29, 2011, B&L received a subpoena from the New York Office of Inspector General for the U.S. Department of Health and Human Services regarding payments and communications between B&L and medical professionals related to its pharmaceutical products Lotemax® and Besivance®. The government has indicated that the subpoena was issued in connection with a civil investigation, and B&L is cooperating fully with the government’s investigation. B&L has heard of no additional activity at this time, and whether the government’s investigation is ongoing or will result in further requests for information is unknown. B&L and the Company will continue to work with the Office of Inspector General regarding the scope of the subpoena and any additional specific information that may be requested.
ISTA Settlement with Department of Justice
On or about May 24, 2013 (prior to the Company’s acquisition of B&L in August 2013), B&L’s subsidiary, ISTA Pharmaceuticals, Inc. (“ISTA”), reached agreement with the U.S. government to resolve and conclude civil and criminal allegations against ISTA. The settlement involved conduct by ISTA that occurred between January 2006 and March 2011, prior to B&L’s acquisition of ISTA in June 2012. B&L was aware of the government investigation prior to its acquisition, and fully cooperated with the government to resolve the matter. In connection with the settlement, ISTA pled guilty to certain charges and paid approximately $34 million in civil and criminal fines, including interest and attorney’s fees. In addition, B&L agreed to maintain a specified compliance and ethics program and to annually certify compliance with this requirement
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
to the Department of Justice for a period of three years. Failure to comply with the requirements of the settlement could result in fines.
Securities
Allergan Securities Litigation
On August 1, 2014, Allergan Inc. ("Allergan") commenced the federal securities litigation in the U.S. District Court for the Central District of California against the Company, Valeant, Valeant’s subsidiary AGMS Inc. (“AGMS”), Pershing Square Capital Management, L.P. ("Pershing Square"), PS Management, GP, LLC, PS Fund 1, LLC (“PS Fund 1”) and William A. Ackman (Allergan, Inc. et al. v. Valeant Pharmaceuticals International, Inc., et al., Case No. 14-cv-01214-DOC). The lawsuit alleged violations of Sections 13(d), 14(a), 14(e) and 20A of the Exchange Act and rules promulgated by the SEC under those Sections. On August 19, 2014, the Company, Valeant, AGMS, PS Fund 1 and William A. Ackman filed Counterclaims against Allergan and the members of the Allergan Board of Directors alleging violations of Sections 14(a), 14(e) and 20A of the Exchange Act and rules promulgated by the SEC under those Sections. On November 4, 2014, the Court denied in part and granted in part a motion filed by plaintiffs seeking a preliminary injunction. The Court directed the defendants to make certain additional disclosures, and otherwise denied the motion. On January 28, 2015, the plaintiffs filed an amended complaint, alleging that all defendants violated Section 14(e) of the Exchange Act and SEC rules under that section. The amended complaint also asserted violations of Sections 13(d) and Schedule 13D thereunder and Section 20A of the Exchange Act against Pershing Square, PS Management, GP, LLC, PS Fund 1 and William A. Ackman. On April 9, 2015, the parties filed a stipulation providing for the voluntary dismissal of all claims.
Allergan Shareholder Class Action
On December 16, 2014, Anthony Basile filed a putative class action lawsuit against the Company, Valeant, AGMS, Pershing Square, PS Management, GP, LLC, PS Fund 1 and William A. Ackman in the U.S. District Court for the Central District of California (Basile v. Valeant Pharmaceuticals International, Inc., et al., Case No. 14-cv-02004-DOC). On June 26, 2015, lead plaintiffs the State Teachers Retirement System of Ohio, the Iowa Public Employees Retirement System and Patrick T. Johnson filed an amended complaint against the Company, Valeant, J. Michael Pearson, Pershing Square, PS Management, GP, LLC, PS Fund 1 and William A. Ackman. The amended complaint alleges claims on behalf of a putative class of sellers of Allergan securities between February 25, 2014 and April 21, 2014, against all defendants asserting violations of Section 14(e) of the Exchange Act and rules promulgated by the SEC thereunder and Section 20A of the Exchange Act. The amended complaint also alleges violations of Section 20(a) of the Exchange Act against Pershing Square, PS Management, GP, LLC, William A. Ackman and J. Michael Pearson. The amended complaint seeks, among other relief, money damages, equitable relief, and attorneys’ fees and costs. Defendants have not yet responded to the amended complaint. The Company is reviewing these claims and intends to vigorously defend these matters.
Salix Shareholder Class Actions
Following the announcement of the execution of the Merger Agreement with Salix, six purported stockholder class actions were filed challenging the Salix Acquisition. All of the actions were filed in the Delaware Court of Chancery, and alleged claims against some or all of the board of directors of Salix (the “Salix Board”), the Company, Salix, Valeant and Sun Merger Sub, Inc. (“Sun Merger Sub”). On March 17, 2015, the Court consolidated the actions under the caption Salix Pharmaceuticals, Ltd. Shareholder Litigation, Consolidated C.A. No.10721-CB, and designated the complaint in one action to be the operative complaint. The operative complaint alleges generally that the members of the Salix Board breached their fiduciary duties to stockholders, and that the other defendants aided and abetted such breaches, by seeking to sell Salix through an allegedly inadequate sales process and for allegedly inadequate consideration and by agreeing to allegedly preclusive deal protections. The complaint also alleges that the Schedule 14D-9 filed by Salix in connection with the Salix Acquisition contained inaccurate or materially misleading information about, among other things, the Salix Acquisition and the sales process leading up to the Merger Agreement. The complaint seeks, among other things, injunctive relief, including enjoining the proposed transaction, and unspecified attorneys’ and other fees and costs. On April 1, 2015, the defendants filed motions to dismiss the action. Those motions remain pending. The Company is vigorously defending this matter.
Antitrust
Solodyn® Antitrust Class Actions
On July 22, 2013, United Food and Commercial Workers Local 1776 & Participating Employers Health and Welfare Fund, filed a civil antitrust class action complaint in the United States District Court for the Eastern District of Pennsylvania, Case
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
No. 2:13-CV-04235-JCJ, against Medicis, the Company and various manufacturers of generic forms of Solodyn, alleging that the defendants engaged in an anticompetitive scheme to exclude competition from the market for minocycline hydrochloride extended release tablets, a prescription drug for the treatment of acne marketed by Medicis under the brand name, Solodyn. The plaintiff further alleges that the defendants orchestrated a scheme to improperly restrain trade, and maintain, extend and abuse Medicis’ alleged monopoly power in the market for minocycline hydrochloride extended release tablets to the detriment of plaintiff and the putative class of end-payor purchasers it seeks to represent, causing them to pay overcharges. Plaintiff alleges violations of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, and of various state antitrust and consumer protection laws, and further alleges that defendants have been unjustly enriched through their alleged conduct. Plaintiff seeks declaratory and injunctive relief and, where applicable, treble, multiple, punitive and/or other damages, including attorneys’ fees. Additional class action complaints making similar allegations against all defendants, including Medicis and the Company have been filed in various courts by other private plaintiffs purporting to represent certain classes of similarly-situated direct or end-payor purchasers of Solodyn (Rochester Drug Co-Operative, Inc., Case No. 2:13-CV-04270-JCJ (E.D. Pa. filed July 23, 2013); Local 274 Health & Welfare Fund, Case No. 2:13-CV-4642-JCJ (E.D.Pa. filed Aug. 9, 2013); International Union of Operating Engineers Local 132 Health and Welfare Fund (N.D. Cal. filed Aug 1, 2013; voluntarily dismissed and re-filed in E.D. Pa on Aug. 30, 2013, as Case No. 2:13-cv-05108); Sheet Metal Workers Local No. 25 Health & Welfare Fund, Case No. 2:13-CV-4659-JCJ (E.D. Pa. filed Aug. 8, 2013); Fraternal Order of Police, Fort Lauderdale Lodge 31, Insurance Trust Fund, Case No. 2:13-CV-5021-JCJ (E.D. Pa. filed Aug. 27, 2013); Heather Morgan, Case No. 2:13-CV-05097 (E.D. Pa. filed Aug. 29, 2013); Plumbers & Pipefitters Local 176 Health & Welfare Trust Fund, Case No. 2:13-CV-05105 (E.D. Pa. filed Aug. 30, 2013); Ahold USA, Inc., Case No. 1:13-cv-12225 (D. Mass. filed Sept. 9, 2013); City of Providence, Rhode Island, Case No. 2:13-cv-01952 (D. Ariz. filed Sept. 24, 2013); International Union of Operating Engineers Stationary Engineers Local 39 Health & Welfare Trust Fund, Case No. 1:13-cv-12435 (D. Mass. filed Oct. 2, 2013); Painters District Council No. 30 Health and Welfare Fund et al., Case No. 1:13-cv-12517 (D. Mass. filed Oct. 7, 2013); Man-U Service Contract Trust Fund, Case No. 13-cv-06266-JCJ (E.D. Pa. filed Oct. 25, 2013); Allied Services Division Welfare Fund, Case No. 1:14-cv-10786 (D. Mass. filed Mar. 14, 2014); and NECA-IBEW Welfare Trust Fund, Case No. 1:14-cv-11015 (D. Mass. filed Mar. 19, 2014).). By order dated February 25, 2014, the Judicial Panel for Multidistrict Litigation (‘‘JPML’’) centralized the cases in the District of Massachusetts, and the Multi-District Litigation (‘‘MDL’’), captioned In re Solodyn (Minocycline Hydrochloride) Antitrust Litigation, Case No. 1:14-md-02503-DJC, is now pending before U.S. District Judge Denise Casper. On September 12, 2014, the Direct Purchaser Plaintiffs and the End-Payor Plaintiffs each filed a consolidated amended class action complaint. The Direct Purchaser Plaintiffs, with the Defendants’ consent, subsequently filed a corrected amended complaint on September 22, 2014. On November 24, 2014, the Defendants jointly moved to dismiss the Direct Purchaser Plaintiffs’ and the End Payor Plaintiffs’ complaints. Oral argument on the Defendants’ motion was held on March 12, 2015 and a decision is currently pending. On March 26, 2015, and on April 6, 2015, two additional non-class action complaints were filed against Medicis in the Middle District of Pennsylvania by purported direct purchasers of Solodyn, making similar allegations and seeking similar relief to that sought in the other direct purchaser plaintiff complaints (Walgreen Co., et al. v. Medicis Pharmaceutical Corp.. No. 1:15-cv-00611-YK (M.D. Pa. filed March 26, 2015); Rite Aid Corp., et al. v. Medicis Pharmaceutical Corp., No. 1:15-cv-00673-YK (M.D. Pa. filed April 6, 2015)). The JPML transferred the Walgreen and Rite Aid complaints to the District of Massachusetts on April 8, 2015, and May 1, 2015, respectively, where they are now included in the MDL. The Walgreen and Rite Aid cases have been stayed pending the outcome of the pending motion to dismiss the class action complaints. The Company intends to vigorously defend these actions.
Intellectual Property
AntiGrippin® Litigation
Two suits have been brought against the Company’s subsidiary, Natur Produkt International, JSC ("Natur Produkt") seeking lost profits in connection with the registration by Natur Produkt of its AntiGrippin® trademark. The plaintiffs in these matters allege that Natur Produkt violated Russian competition law by preventing plaintiffs from producing and marketing their products under certain brand names. The first matter (Case No. A-56-23056/2013, Arbitration Court of St. Petersburg) was accepted for proceedings on June 24, 2013 and a hearing was held on November 28, 2013. In a decision dated December 4, 2013, the court found in favor of the plaintiff (AnviLab) and awarded the plaintiff lost profits in the amount of approximately RUR 1.66 billion (being approximately $50 million at the December 4, 2013 decision date). This charge was recognized in the fourth quarter of 2013 in Other (income) expense in the consolidated statements of income (loss). Natur Produkt appealed this decision, and a hearing in the appeal proceeding was held on March 16, 2014. The appeal court found in favor of Natur Produkt and dismissed the plaintiff’s claim in full. Following this decision, the Company concluded that the potential loss was no longer probable, and therefore the reserve was reversed in the first quarter of 2014 in Other (income) expense in the consolidated statements of income (loss). Anvilab appealed the appeal court’s decision to the cassation court. On June 19,
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
2014, the cassation court resolved that the matter is within the jurisdiction of the Intellectual Property (IP) court in this instance. The hearing before the IP court was held on July 30, 2014 and August 1, 2014. The IP court found in favor of the plaintiff and ruled to send the case for the second review to the court of the first instance, indicating that the court of the first instance should decide on the amount of damages suffered by Anvilab. Natur Produkt appealed the decision of the IP Court to the Supreme Court on September 15, 2014, but, on October 22, 2014, the Supreme Court denied that appeal and the matter was sent back to the court of first instance for the second review. The court of first instance appointed an expert to provide a report on the claimed lost profit amount, which was provided on or about March 10, 2015. Hearings before the court of first instance in this matter were held on March 12, 2015 and April 9, 2015. Following the April 9, 2015 hearing, the court of first instance ruled in favor of the plaintiff and awarded the plaintiff lost profits in the amount of approximately RUR 1.66 billion (being approximately $30 million as of June 30, 2015). Natur Produkt filed an appeal against this decision, both as to the merits and the quantum of damages, to the appeal court on May 15, 2015. The hearing before the appeal court is scheduled for July 28, 2015. At this time, the Company cannot predict the outcome of this appeal. Accordingly, the Company has not recognized a reserve as of June 30, 2015.
Natur Produkt was served with a claim in the second matter (Case No. A-56-38592/2013, Arbitration Court of St. Petersburg) on July 16, 2013 by the plaintiff in that matter (ZAO Tsentr Vnedreniya PROTEK (“Protek”)). A hearing was held in this matter on September 29, 2013 and, on October 18, 2013, the court found in favor of Natur Produkt. Protek filed an appeal of the decision on November 26, 2013. A hearing in the appeal proceeding was held on January 30, 2014 and the appeal court also found in favor of Natur Produkt. Protek appealed that decision to the cassation court (Case No. A-56-38592/2013) and, on July 7, 2014, the cassation court also found in favor of Natur Produkt. Protek did not exercise its right to appeal the cassation court decision to the Supreme Court.
Patent Litigation/Paragraph IV Matters
The Company (and/or certain of its affiliates) is also party to certain patent infringement proceedings in the United States, including as arising from claims filed by the Company in connection with Notices of Paragraph IV Certification received from third parties respecting their pending ANDA applications for generic versions of certain products sold by or on behalf of the Company, including Prolensa®, Apriso® and Uceris®, or other similar suits. These matters are proceeding in the ordinary course.
General Civil Actions
Afexa Class Action
On March 9, 2012, a Notice of Civil Claim was filed in the Supreme Court of British Columbia which seeks an order certifying a proposed class proceeding against the Company and a predecessor, Afexa (Case No. NEW-S-S-140954). The proposed claim asserts that Afexa and the Company made false representations respecting Cold-FX® to residents of British Columbia who purchased the product during the applicable period and that the proposed class has suffered damages as a result. On November 8, 2013, the Plaintiff served an amended notice of civil claim which sought to re-characterize the representation claims and broaden them from what was originally claimed. On December 8, 2014, the Company filed a motion to strike certain elements of the Plaintiff’s claim for failure to state a cause of action. In response, the Plaintiff proposed further amendments to its claim. The hearing on the motion to strike and the Plaintiff’s amended claim was held on February 4, 2015. The Court allowed certain amendments and a new certification hearing is expected to be held in early 2016. The Company denies the allegations being made and is vigorously defending this matter.
Product Liability Matters
MoistureLoc™ Product Liability Lawsuits
Currently, B&L has been served or is aware that it has been named as a defendant in approximately 321 currently active product liability lawsuits (some with multiple plaintiffs) pending in a New York State Consolidated Proceeding described below, as well as in certain other U.S. state courts, on behalf of individuals who claim they suffered personal injury as a result of using a contact lens solution with MoistureLoc™. Two consolidated cases were established to handle MoistureLoc™ claims. First, on August 14, 2006, the Federal Judicial Panel on Multidistrict Litigation created a coordinated proceeding in the Federal District Court for the District of South Carolina. Second, on January 2, 2007, the New York State Litigation Coordinating Panel ordered the consolidation of cases filed in New York State, and assigned the coordination responsibilities to the Supreme Court of the State of New York, New York County. There are approximately 320 currently active non-fusarium cases pending in the New York Consolidated Proceeding. On July 15, 2009, the New York State Supreme Court overseeing
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
the New York Consolidated Proceeding granted B&L’s motion to exclude plaintiffs’ general causation testimony with regard to non-fusarium infections, which effectively excluded plaintiffs from testifying that MoistureLoc™ caused non-fusarium infections. On September 15, 2011, the New York State Appellate Division, First Department, affirmed the Trial Court’s ruling. On February 7, 2012, the New York Court of Appeals denied plaintiffs’ additional appeal. Plaintiffs subsequently filed a motion to renew the trial court’s ruling, and B&L cross-filed a motion for summary judgment to dismiss all remaining claims. On May 31, 2013, the Trial Court denied Plaintiffs’ motion to renew, and granted B&L’s motion for summary judgment, dismissing all remaining non-fusarium claims. On June 28, 2013, Plaintiffs filed a Notice of Appeal to the Trial Court’s ruling. The appeal was argued January 20, 2015. The Court issued its decision on February 10, 2015, denying plaintiffs’ appeal to renew and affirming the lower court’s decision granting B&L’s motion for summary judgment regarding all remaining non-fusarium claims. On March 10, 2015, the plaintiffs filed their motion for leave to appeal this decision, which was denied on May 21, 2015. Plaintiffs filed their motion for leave to appeal from that decision to the New York State Court of Appeals on July 1, 2015. B&L filed its brief in opposition on July 13, 2015 and a decision is pending.
All matters under jurisdiction of the coordinated proceedings in the Federal District Court for the District of South Carolina have been dismissed, including individual actions for personal injury and a class action purporting to represent a class of consumers who suffered economic claims as a result of purchasing a contact lens solution with MoistureLoc™.
Currently, B&L has settled approximately 630 cases in connection with MoistureLoc™ product liability suits. All U.S.-based fusarium claims have now been resolved and there is one active fusarium claim involving a claimant outside of the United States that remains pending. The parties in this active matter are involved in settlement discussions, and the Company currently expects that any potential settlement amounts would not be material.
Salix Legal Proceedings
The estimated fair values of the potential losses regarding the matters described below, along with other matters, are included as part of contingent liabilities assumed in the Salix Acquisition. Refer to Note 3 for additional information.
DOJ Subpoena
On February 1, 2013, Salix received a subpoena from the U.S. Attorney’s Office for the Southern District of New York requesting documents regarding sales and promotional practices for its Xifaxan®, Relistor® and Apriso® products. Salix and the Company are continuing to respond to the subpoena and are cooperating fully with the subpoena and related government investigation.
Salix SEC Investigation
The SEC is conducting an investigation into possible securities law violations by Salix relating to disclosures by Salix of inventory amounts in the distribution channel and related issues in press releases, on analyst calls and in Salix’s various SEC filings, as well as related accounting issues. Salix and the Company are cooperating with the SEC in its investigation, including through the production of documents to the SEC Enforcement Staff. We cannot predict the outcome or the duration of the SEC investigation or any other legal proceedings or any enforcement actions or other remedies that may be imposed on Salix or the Company arising out of the SEC investigation.
Salix Securities Litigation
Beginning on November 7, 2014, three putative class action lawsuits were filed by shareholders of Salix, each of which generally alleges that Salix and certain of its former officers and directors violated federal securities laws in connection with Salix’s disclosures regarding certain products, including with respect to disclosures concerning historic wholesaler inventory levels, business prospects and demand, reserves and internal controls. Two of these actions were filed in the U.S. District Court for the Southern District of New York, and are captioned: Woburn Retirement System v. Salix Pharmaceuticals, Ltd., et al. (Case No: 1:14-CV-08925 (KMW)), and Bruyn v. Salix Pharmaceuticals, Ltd., et al. (Case No. 1:14-CV-09226 (KMW)). These two actions have been consolidated and an initial schedule has been set. Salix and the Company are vigorously defending this consolidated matter. A third action was filed in the U.S. District Court for the Eastern District of North Carolina under the caption Grignon v. Salix Pharmaceuticals, Ltd. et al. (Case No. 5:14-cv-00804-D), but was subsequently voluntarily dismissed.
Reportable Segments
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
The Company has two operating and reportable segments: (i) Developed Markets and (ii) Emerging Markets. The following is a brief description of the Company’s segments:
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• | Developed Markets consists of (i) sales in the U.S. of pharmaceutical products, OTC products, and medical device products, as well as alliance and contract service revenues, in the areas of dermatology and podiatry, neurology, gastrointestinal disorders, eye health, oncology and urology, dentistry, and aesthetics, and (ii) pharmaceutical products, OTC products, and medical device products sold in Western Europe, Canada, Japan, Australia and New Zealand. |
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• | Emerging Markets consists of branded generic pharmaceutical products and branded pharmaceuticals, OTC products, and medical device products. Products are sold primarily in Central and Eastern Europe (primarily Poland and Russia), Asia, Latin America (Mexico, Brazil, and Argentina and exports out of Mexico to other Latin American markets), Africa and the Middle East. |
Segment profit is based on operating income after the elimination of intercompany transactions. Certain costs, such as restructuring and acquisition-related costs, other expense (income), and in-process research and development impairments and other charges, are not included in the measure of segment profit, as management excludes these items in assessing financial performance.
Corporate includes the finance, treasury, tax and legal operations of the Company’s businesses and maintains and/or incurs certain assets, liabilities, expenses, gains and losses related to the overall management of the Company, which are not allocated to the other business segments. In addition, a portion of share-based compensation is considered a corporate cost, since the amount of such expense depends on Company-wide performance rather than the operating performance of any single segment.
Segment Revenues and Profit
Segment revenues and profit for the three-month and six-month periods ended June 30, 2015 and 2014 were as follows:
|
| | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2015 | | 2014 | | 2015 | | 2014 |
Revenues: | | | | | | | |
Developed Markets(1) | $ | 2,237.6 |
| | $ | 1,479.7 |
| | $ | 4,002.0 |
| | $ | 2,901.5 |
|
Emerging Markets(2) | 494.8 |
| | 561.4 |
| | 921.3 |
| | 1,025.8 |
|
Total revenues | 2,732.4 |
| | 2,041.1 |
| | 4,923.3 |
| | 3,927.3 |
|
| | | | | | | |
Segment profit: | | | | | | | |
Developed Markets(3) | 678.5 |
| | 458.0 |
| | 1,314.5 |
| | 897.3 |
|
Emerging Markets(4) | 78.3 |
| | 96.0 |
| | 132.9 |
| | 164.1 |
|
Total segment profit | 756.8 |
| | 554.0 |
| | 1,447.4 |
| | 1,061.4 |
|
| | | | | | | |
Corporate(5) | (61.5 | ) | | (46.3 | ) | | (130.7 | ) | | (84.4 | ) |
Restructuring, integration and other costs | (143.4 | ) | | (142.1 | ) | | (198.4 | ) | | (275.7 | ) |
In-process research and development impairments and other charges | (12.3 | ) | | (8.4 | ) | | (12.3 | ) | | (20.4 | ) |
Acquisition-related costs | (9.5 | ) | | (0.6 | ) | | (19.3 | ) | | (2.1 | ) |
Acquisition-related contingent consideration | (11.7 | ) | | (1.9 | ) | | (18.8 | ) | | (10.8 | ) |
Other (expense) income | (176.9 | ) | | 0.4 |
| | (183.0 | ) | | 43.7 |
|
Operating income | 341.5 |
| | 355.1 |
| | 884.9 |
| | 711.7 |
|
Interest income | 0.9 |
| | 1.2 |
| | 1.8 |
| | 3.0 |
|
Interest expense | (412.7 | ) | | (241.2 | ) | | (710.5 | ) | | (487.7 | ) |
Loss on extinguishment of debt | — |
| | — |
| | (20.0 | ) | | (93.7 | ) |
Foreign exchange and other | 5.6 |
| | 3.4 |
| | (65.5 | ) | | (10.0 | ) |
Gain on investments, net | — |
| | 2.5 |
| | — |
| | 2.5 |
|
(Loss) income before (recovery of) provision for income taxes | $ | (64.7 | ) | | $ | 121.0 |
| | $ | 90.7 |
| | $ | 125.8 |
|
____________________________________
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(All tabular amounts expressed in millions of U.S. dollars, except per share data)
(Unaudited)
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(1) | Developed Markets segment revenues reflect incremental product sales revenue in the three-month and six-month periods ended June 30, 2015 from 2014 and 2015 acquisitions of $546 million and $754 million, respectively, in the aggregate, primarily from the Salix, Marathon, and Dendreon acquisitions. |
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(2) | Emerging Markets segment revenues reflect incremental product sales revenue in the three-month and six-month periods ended June 30, 2015 from 2014 and 2015 acquisitions of $13 million and $25 million, respectively, in the aggregate. |
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(3) | Developed Markets segment profit in the three-month and six-month periods ended June 30, 2015 reflects the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets of $555 million and $870 million, in the aggregate, primarily from the Salix acquisition, compared with $216 million and $441 million in the corresponding periods of 2014. |
| |
(4) | Emerging Markets segment profit in the three-month and six-month periods ended June 30, 2015 reflects the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets of $76 million and $151 million, in the aggregate, compared with $79 million and $154 million in the corresponding periods of 2014. |
| |
(5) | Corporate reflects non-restructuring-related share-based compensation expense of $14 million and $38 million in the three-month and six-month periods ended June 30, 2015, respectively, compared with $6 million and $21 million in the corresponding periods of 2014. |
Segment Assets
Total assets by segment as of June 30, 2015 and December 31, 2014 were as follows:
|
| | | | | | | |
| As of June 30, 2015 | | As of December 31, 2014 |
Assets: | | | |
Developed Markets(1) | $ | 40,368.4 |
| | $ | 19,093.4 |
|
Emerging Markets(1) | 6,126.2 |
| | 6,332.9 |
|
| 46,494.6 |
| | 25,426.3 |
|
Corporate | 1,848.6 |
| | 901.0 |
|
Total assets | $ | 48,343.2 |
| | $ | 26,327.3 |
|
____________________________________
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(1) | Segment assets as of June 30, 2015 were impacted by the provisional amounts of identifiable intangible assets and goodwill of the various acquisitions in the current year. See Note 3 for additional information regarding the current year acquisitions. |
On July 16, 2015, the Company entered into an agreement to acquire Mercury (Cayman) Holdings, the holding company of Amoun Pharmaceutical (“Amoun”) for consideration of approximately $800 million, plus contingent payments. Amoun develops and markets a wide range of pharmaceutical brands in therapeutic areas such as anti-hypertensives, broad spectrum antibiotics, and anti-diarrheals in the Middle East and North Africa.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
INTRODUCTION
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the unaudited consolidated financial statements, and notes thereto, prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for the interim period ended June 30, 2015 (the “unaudited consolidated financial statements”). This MD&A should also be read in conjunction with the annual MD&A and the audited consolidated financial statements and notes thereto prepared in accordance with U.S. GAAP that are contained in our Annual Report on Form 10-K for the year ended December 31, 2014 (the “2014 Form 10-K”).
Additional information relating to the Company, including the 2014 Form 10-K, is available on SEDAR at www.sedar.com and on the U.S. Securities and Exchange Commission (the “SEC”) website at www.sec.gov.
Unless otherwise indicated herein, the discussion and analysis contained in this MD&A is as of July 27, 2015.
All dollar amounts are expressed in U.S. dollars, unless otherwise noted.
OVERVIEW
We are a multinational, specialty pharmaceutical and medical device company that develops, manufactures, and markets a broad range of branded, generic and branded generic pharmaceuticals, over-the-counter (“OTC”) products, and medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment, and aesthetics devices), which are marketed directly or indirectly in over 100 countries. In the Developed Markets segment, we focus most of our efforts in the dermatology, neurology, gastrointestinal (GI) disorders, and eye health therapeutic classes. In the Emerging Markets segment, we focus primarily on branded generics, OTC products, and medical devices. We are diverse not only in our sources of revenue from our broad drug and medical device portfolio, but also among the therapeutic classes and geographies we serve.
On April 1, 2015, we acquired Salix Pharmaceuticals, Ltd. (“Salix”), pursuant to an Agreement and Plan of Merger dated February 20, 2015, as amended on March 16, 2015 (the “Merger Agreement”). Subject to the terms and conditions set forth in the Merger Agreement, Salix became a wholly owned subsidiary of Valeant Pharmaceuticals International (“Valeant”), our subsidiary (the “Salix Acquisition”). Salix is a specialty pharmaceutical company dedicated to developing and commercializing prescription drugs and medical devices used in treatment of variety of GI disorders with a portfolio of over 20 marketed products, including Xifaxan®, Apriso®, Uceris®, and Relistor®. For further information regarding the Salix Acquisition, see Note 3 titled "BUSINESS COMBINATIONS" of notes to unaudited consolidated financial statements.
Our strategy is to focus our business on core geographies and therapeutic classes that offer attractive growth opportunities while maintaining our lower selling, general and administrative cost model and decentralized operating structure. Within our chosen therapeutic classes and geographies, we primarily focus on durable products which have the potential for strong operating margins and sustainable organic growth. Further, we have completed numerous transactions over the past few years to expand our portfolio offering and geographic footprint, including, among others, the Salix Acquisition and the acquisition of Bausch & Lomb Holdings Incorporated ("B&L") in August 2013 (the "B&L Acquisition"), and we will continue to pursue value-added business development opportunities as they arise. The growth of our business is further augmented through our lower risk, output-focused research and development model, which allows us to advance certain development programs to drive future commercial growth, while minimizing our research and development expense. We believe this strategy will allow us to maximize both the growth rate and profitability of the Company and to enhance shareholder value.
BUSINESS DEVELOPMENT
We have completed several transactions, including, among others, the Salix Acquisition (April 2015), the acquisition of the assets of Dendreon Corporation ("Dendreon") (February 2015) and the acquisition of certain products from Marathon Pharmaceuticals, LLC ("Marathon") (February 2015), as well as other smaller acquisitions. For further information regarding our acquisitions, see Note 3 titled "BUSINESS COMBINATIONS" of notes to the unaudited consolidated financial statements.
RESTRUCTURING AND INTEGRATION
In connection with our acquisitions, we have implemented cost-rationalization and integration initiatives to capture operating synergies and generate cost savings across the Company. These measures included:
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• | workforce reductions across the Company and other organizational changes; |
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• | closing of duplicative facilities and other site rationalization actions company-wide, including research and development facilities, sales offices and corporate facilities; |
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• | leveraging research and development spend; and/or |
Salix Acquisition-Related Cost-Rationalization and Integration Initiatives
The complementary nature of the Company and Salix businesses has provided an opportunity to capture significant operating synergies from reductions in sales and marketing, general and administrative expenses, and research and development. In total, in connection with the acquisition of Salix, we have identified approximately $530 million of cost synergies on an annual run rate basis that we expect to achieve substantially by the end of 2015. This amount does not include revenue synergies or the benefits of incorporating Salix’s operations into the Company’s corporate structure. We estimate that we will incur total costs of approximately $300 million in connection with these cost-rationalization and integration initiatives.
B&L Acquisition-Related Cost-Rationalization and Integration Initiatives
The complementary nature of the Company and B&L businesses has provided an opportunity to capture significant operating synergies from reductions in sales and marketing, general and administrative expenses, and research and development. In total, in connection with the acquisition of B&L, we identified greater than $900 million of cost synergies on an annual run rate basis that were substantially achieved by the end of 2014. This amount does not include revenue synergies or the benefits of incorporating B&L’s operations into the Company’s corporate structure. We estimated that we will incur total costs of approximately $600 million (excluding the charges of $53 million described in Note 4 titled "RESTRUCTURING, INTEGRATION AND OTHER COSTS" of notes to the unaudited consolidated financial statements) in connection with these cost-rationalization and integration initiatives, which were substantially completed by the end of 2014.
See Note 4 of notes to the unaudited consolidated financial statements for detailed information summarizing the major components of costs incurred in connection with our acquisition-related initiatives through June 30, 2015.
SELECTED FINANCIAL INFORMATION
The following table provides selected financial information for the periods indicated:
|
| | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2015 | | 2014 | | Change | | 2015 | | 2014 | | Change |
($ in millions, except per share data) | $ | | $ | | $ | | % | | $ | | $ | | $ | | % |
Revenues | 2,732.4 |
| | 2,041.1 |
| | 691.3 |
| | 34 | | 4,923.3 |
| | 3,927.3 |
| | 996.0 |
| | 25 |
|
Operating expenses | 2,390.9 |
| | 1,686.0 |
| | 704.9 |
| | 42 | | 4,038.4 |
| | 3,215.6 |
| | 822.8 |
| | 26 |
|
Net (loss) income attributable to Valeant Pharmaceuticals International, Inc. | (53.0 | ) | | 125.8 |
| | (178.8 | ) | | NM | | 20.7 |
| | 103.2 |
| | (82.5 | ) | | (80 | ) |
(Loss) earnings per share attributable to Valeant Pharmaceuticals International, Inc.: | | | | | | | | | | | | | | | |
Basic | (0.15 | ) | | 0.38 |
| | (0.53 | ) | | NM | | 0.06 |
| | 0.31 |
| | (0.25 | ) | | (81 | ) |
Diluted | (0.15 | ) | | 0.37 |
| | (0.52 | ) |
| NM | | 0.06 |
| | 0.30 |
| | (0.24 | ) | | (80 | ) |
____________________________________
NM — Not meaningful
Financial Performance
Changes in Revenues
Total revenues increased $691 million, or 34%, to $2.73 billion in the second quarter of 2015 and increased $996 million, or 25%, to $4.92 billion in the first half of 2015, primarily due to incremental product sales revenue of $559 million and $780 million (which includes a negative foreign currency exchange impact of $4 million and $7 million, respectively), in the aggregate, from all 2014 and 2015 acquisitions in the second quarter and first half of 2015, respectively. This increase was partially offset by (i) a negative foreign currency impact on the existing business of $169 million and $305 million, in the aggregate, in the
second quarter and first half of 2015, respectively, and (ii) a negative impact from divestitures and discontinuations of $53 million and $124 million, in the aggregate, in the second quarter and first half of 2015, respectively. Excluding the items described above, we realized incremental product sales revenue of $360 million and $639 million, in the aggregate, in the second quarter and first half of 2015, respectively, related to growth from the remainder of the existing business. The above changes in revenues are further described below under “Results of Operations — Revenues by Segment”.
As is customary in the pharmaceutical industry, our gross product sales are subject to a variety of deductions in arriving at reported net product sales. Provisions for these deductions are recorded concurrently with the recognition of gross product sales revenue and include cash discounts and allowances, chargebacks, and distribution fees, which are paid to direct customers, as well as rebates and returns, which can be paid to both direct and indirect customers. Provision balances relating to estimated amounts payable to direct customers are netted against accounts receivable, and balances relating to indirect customers are included in accrued liabilities. The provisions recorded to reduce gross product sales to net product sales were as follows:
|
| | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2015 | | 2014 | | 2015 | | 2014 |
($ in millions) | | $ | | $ | | $ | | $ |
Gross product sales | | 3,968.6 |
| | 2,749.6 |
| | 7,218.6 |
| | 5,200.1 |
|
Provisions to reduce gross product sales to net product sales | | 1,273.6 |
| | 755.5 |
| | 2,376.7 |
| | 1,354.9 |
|
Net product sales | | 2,695.0 |
| | 1,994.1 |
| | 4,841.9 |
| | 3,845.2 |
|
Percentage of provisions to gross sales | | 32 | % | | 27 | % | | 33 | % | | 26 | % |
Provisions as a percentage of gross sales increased to 32% and 33% for the second quarter and first half of 2015, respectively, compared with 27% and 26% in the second quarter and first half of 2014. The increase was driven by (i) higher provisions for rebates, chargebacks, and returns, including managed care rebates for Jublia® and the co-pay assistance programs for launch products including Jublia®, Onexton®, and Retin-A Micro® Microsphere 0.08% (“RAM 0.08%”) and (ii) higher rebate percentages for sales to the U.S. government (including Wellbutrin XL®) partially offset by (iii) lower provisions (mainly rebates) associated with products acquired in the Salix Acquisition in the second quarter of 2015.
Changes in Earnings Attributable to Valeant Pharmaceuticals International, Inc.
Net loss attributable to Valeant Pharmaceuticals International, Inc. was $53 million in the second quarter of 2015, compared with net income of $126 million in the second quarter of 2014 and net income in the first half of 2015 was $21 million, compared with net income of $103 million in the first half of 2014, reflecting the following factors: (i) an increase in contribution (product sales revenue less cost of goods sold, exclusive of amortization and impairments of finite-lived intangible assets) of $601 million and $840 million in the second quarter and first half of 2015, respectively, more than offset by (ii) an increase in operating expenses driven mainly by an increase in selling, general and administrative expenses, amortization and impairments of finite-lived intangible assets, and other expense, and (iii) an increase in non-operating expenses driven mainly by interest expense. The above changes are further described below under “Results of Operations”.
RESULTS OF OPERATIONS
Reportable Segments
We have two operating and reportable segments: (i) Developed Markets and (ii) Emerging Markets. The following is a brief description of our segments:
| |
• | Developed Markets consists of (i) sales in the U.S. of pharmaceutical products, OTC products, and medical device products, as well as alliance and contract service revenues, in the areas of dermatology and podiatry, neurology, gastrointestinal disorders, eye health, oncology and urology, dentistry, and aesthetics, and (ii) pharmaceutical products, OTC products, and medical device products sold in Western Europe, Canada, Japan, Australia and New Zealand. |
| |
• | Emerging Markets consists of branded generic pharmaceutical products and branded pharmaceuticals, OTC products, and medical device products. Products are sold primarily in Central and Eastern Europe (primarily Poland and Russia), Asia, Latin America (Mexico, Brazil, and Argentina and exports out of Mexico to other Latin American markets), Africa and the Middle East. |
Revenues By Segment
The following table displays revenues by segment for the second quarters and first halves of 2015 and 2014, the percentage of each segment’s revenues compared with total revenues in the respective period, and the dollar and percentage change in the dollar amount of each segment’s revenues. Percentages may not add due to rounding.
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2015 | | 2014 | | Change | | 2015 | | 2014 | | Change |
($ in millions) | $ | % | | $ | % | | $ | % | | $ | % | | $ | % | | $ | % |
Developed Markets | 2,237.6 |
| 82 | | 1,479.7 |
| 72 | | 757.9 |
| 51 |
| | 4,002.0 |
| 81 | | 2,901.5 |
| 74 | | 1,100.5 |
| 38 |
|
Emerging Markets | 494.8 |
| 18 | | 561.4 |
| 28 | | (66.6 | ) | (12 | ) | | 921.3 |
| 19 | | 1,025.8 |
| 26 | | (104.5 | ) | (10 | ) |
Total revenues | 2,732.4 |
| 100 | | 2,041.1 |
| 100 | | 691.3 |
| 34 |
| | 4,923.3 |
| 100 | | 3,927.3 |
| 100 | | 996.0 |
| 25 |
|
Total revenues increased $691 million, or 34%, to $2.73 billion in the second quarter of 2015, and increased $996 million, or 25%, to $4.92 billion in the first half of 2015. The growth in the Developed Markets was driven primarily by price, as significant volume increases in U.S. dermatology and U.S. eye heath were offset by volume declines for certain U.S. neurology & other/generic products. The growth in the Emerging Markets, exclusive of the negative foreign currency exchange impact described below, was driven entirely by volume, as price had a negative impact. The growth was mainly attributable to the effect of the following factors:
Developed Markets segment:
| |
• | the incremental product sales revenue of $546 million and $754 million (which includes a negative foreign currency exchange impact of $3 million and $5 million, in the aggregate, in the second quarter and first half of 2015, respectively), in the aggregate, from all 2014 and 2015 acquisitions in the second quarter and first half of 2015, respectively, primarily from (i) the 2014 acquisition of PreCision Dermatology, Inc. ("PreCision") (mainly driven by Clindagel® product sales) and (ii) the 2015 acquisitions of Salix (mainly driven by Xifaxan®, as well as Apriso®, Glumetza® and Uceris® product sales), certain assets of Marathon (mainly driven by Nitropress® and Isuprel® product sales), and assets of Dendreon (Provenge® product sales). Regarding the Salix Acquisition, we reduced wholesaler inventory levels during the second quarter of 2015, and further reductions are anticipated in the third quarter of 2015. |
This factor was partially offset by:
| |
• | a negative foreign currency exchange impact on the existing business of $73 million and $133 million in the second quarter and first half of 2015, respectively, due to the impact of a strengthening of the U.S. dollar against certain currencies, including the Euro, Canadian dollar, Japanese yen, and Australian dollar; and |
| |
• | a negative impact from divestitures and discontinuations of $49 million and $111 million in the second quarter and first half of 2015, respectively, primarily driven by $41 million and $94 million, respectively, related to the divestiture in the third quarter of 2014 of facial aesthetic fillers and toxins. |
Excluding the items described above, we realized incremental product sales revenue from the remainder of the existing business of $337 million and $584 million in the second quarter and first half of 2015, respectively. The growth reflected (1) higher sales of (i) Jublia® (launched in mid-2014), (ii) Arestin®, (iii) Targretin®, (iv) Solodyn®, (v) the Carac® franchise, (vi) the Retin-A® franchise (including the launch of RAM 0.08% in mid-2014), (vii) Xenazine®, (viii) Ziana®, and (2) higher sales from other recent product launches, including the launches of Biotrue® ONEday, Bausch + Lomb Ultra®, and Onexton®.
Emerging Markets segment:
| |
• | the incremental product sales revenue of $13 million and $25 million (which includes a negative foreign currency exchange impact of $1 million and $2 million, in the aggregate, in the second quarter and first half of 2015, respectively), in the aggregate, primarily from all 2014 acquisitions in the second quarter and first half of 2015, respectively. |
This factor was more than offset by:
| |
• | a negative foreign currency exchange impact on the existing business of $96 million and $172 million in the second quarter and first half of 2015, respectively, due to the impact of a strengthening of the U.S. dollar against certain currencies, including the Russian ruble, Polish zloty, Euro, Brazilian real, and Mexican peso; and |
| |
• | a negative impact from divestitures and discontinuations of $5 million and $12 million in the second quarter and first half of 2015, respectively, primarily from Latin America. |
Excluding the items described above, we realized incremental product sales revenue from the remainder of the existing business of $23 million and $55 million in the second quarter and first half of 2015, respectively. The growth primarily reflected higher sales in Asia (primarily China), Africa and Latin America (primarily Mexico).
Segment Profit
Segment profit is based on operating income after the elimination of intercompany transactions. Certain costs, such as restructuring, integration and acquisition-related costs, in-process research and development impairments and other charges and other expense (income), are not included in the measure of segment profit, as management excludes these items in assessing segment financial performance. In addition, a portion of share-based compensation is not allocated to segments, since the amount of such expense depends on company-wide performance rather than the operating performance of any single segment.
The following table displays profit by segment for the second quarters and first halves of 2015 and 2014, the percentage of each segment’s profit compared with corresponding segment revenues in the respective period, and the dollar and percentage change in the dollar amount of each segment’s profit. Percentages may not add due to rounding.
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2015 | | 2014 | | Change | | 2015 | | 2014 | | Change |
($ in millions) | $ | %(1) | | $ | %(1) | | $ | % | | $ | %(1) | | $ | %(1) | | $ | % |
Developed Markets | 678.5 |
| 30 | | 458.0 |
| 31 | | 220.5 |
| 48 |
| | 1,314.5 |
| 33 | | 897.3 |
| 31 | | 417.2 |
| 46 |
|
Emerging Markets | 78.3 |
| 16 | | 96.0 |
| 17 | | (17.7 | ) | (18 | ) | | 132.9 |
| 14 | | 164.1 |
| 16 | | (31.2 | ) | (19 | ) |
Total segment profit | 756.8 |
| 28 | | 554.0 |
| 27 | | 202.8 |
| 37 |
| | 1,447.4 |
| 29 | | 1,061.4 |
| 27 | | 386.0 |
| 36 |
|
____________________________________
(1) — Represents profit as a percentage of the corresponding revenues.
Total segment profit increased $203 million, or 37%, to $757 million in the second quarter of 2015, and increased $386 million, or 36%, to $1.45 billion in the first half of 2015, mainly attributable to the effect of the following factors:
Developed Markets segment:
| |
• | an increase in contribution of $416 million and $580 million, in the aggregate, from all 2014 and 2015 acquisitions in the second quarter and first half of 2015, respectively, primarily from sales of Salix, Marathon, Dendreon and PreCision products, including expenses for acquisition accounting adjustments related to inventory of $46 million and $71 million, in the aggregate, in the second quarter and first half of 2014, respectively; and |
| |
• | a favorable impact of $6 million and $13 million related to the existing business acquisition accounting adjustments related to inventory in the second quarter and first half of 2014, respectively, that did not similarly occur in the second quarter and first half of 2015. |
Those factors were partially offset by:
| |
• | an increase in operating expenses (including amortization and impairments of finite-lived intangible assets) of $420 million and $498 million in the second quarter and first half of 2015, respectively, primarily associated with the acquisitions of new businesses within the segment; |
| |
• | a negative foreign currency exchange impact on the existing business contribution of $54 million and $99 million in the second quarter and first half of 2015, respectively, due to the impact of a strengthening of the U.S. dollar against certain currencies, including the Euro, Canadian dollar, Japanese yen, and Australian dollar; and |
| |
• | a decrease in contribution related to divestitures and discontinuations of $39 million and $89 million in the second quarter and first half of 2015, respectively, primarily driven by $36 million and $80 million, respectively related to the divestiture in the third quarter of 2014 of facial aesthetic fillers and toxins. |
Excluding the items described above, we realized incremental contribution from product sales from the remainder of the existing business of $318 million and $508 million in the second quarter and first half of 2015, respectively. The growth reflected (1) higher sales of (i) Jublia® (launched in mid-2014), (ii) Arestin®, (iii) Targretin®, (iv) Solodyn®, (v) the
Carac® franchise, (vi) the Retin-A® franchise (including the launch of RAM 0.08% in mid-2014), (vii) Xenazine®, (viii) Ziana®, and (2) higher sales from other recent product launches, including the launches of Biotrue® ONEday, Bausch + Lomb Ultra®, and Onexton®.
Emerging Markets segment:
| |
• | a decrease in operating expenses (including amortization and impairments of finite-lived intangible assets) of $31 million and $43 million in the second quarter and first half of 2015, respectively, primarily driven by foreign currency exchange; and |
| |
• | an increase in contribution of $7 million and $14 million in the second quarter and first half of 2015, respectively, primarily from all 2014 acquisitions. |
These factors were more than offset by:
| |
• | a negative foreign currency exchange impact on the existing business contribution of $58 million and $104 million in the second quarter and first half of 2015, respectively, due to the impact of a strengthening of the U.S. dollar against certain currencies, including the Russian ruble, Polish zloty, Euro, Brazilian real, and Mexican peso; and |
| |
• | a decrease in contribution related to divestitures and discontinuations of $3 million and $7 million in the second quarter and first half of 2015, respectively. |
Excluding the items described above, we realized incremental contribution from product sales from the remainder of the existing business of $9 million and $28 million in the second quarter and first half of 2015, respectively. The growth primarily reflected higher sales in Asia (primarily China), Africa and Latin America (primarily Mexico).
Operating Expenses
The following table displays the dollar amount of each operating expense category for the second quarters and first halves of 2015 and 2014, the percentage of each category compared with total revenues in the respective period, and the dollar and percentage changes in the dollar amount of each category. Percentages may not add due to rounding.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2015 | | 2014 | | Change | | 2015 | | 2014 | | Change |
($ in millions) | $ | %(1) | | $ | %(1) | | $ | % | | $ | %(1) | | $ | %(1) | | $ | % |
Cost of goods sold (exclusive of amortization and impairments of finite-lived intangible assets shown separately below) | 669.9 |
| 25 | | 569.6 |
| 28 |
| | 100.3 |
| 18 |
| | 1,230.3 |
| 25 | | 1,073.7 |
| 27 |
| | 156.6 |
| 15 |
|
Cost of other revenues | 15.2 |
| 1 | | 16.0 |
| 1 |
| | (0.8 | ) | (5 | ) | | 29.5 |
| 1 | | 30.3 |
| 1 |
| | (0.8 | ) | (3 | ) |
Selling, general and administrative | 685.5 |
| 25 | | 515.7 |
| 25 |
| | 169.8 |
| 33 |
| | 1,259.3 |
| 26 | | 997.7 |
| 25 |
| | 261.6 |
| 26 |
|
Research and development | 81.1 |
| 3 | | 66.5 |
| 3 |
| | 14.6 |
| 22 |
| | 136.9 |
| 3 | | 127.8 |
| 3 |
| | 9.1 |
| 7 |
|
Amortization and impairments of finite-lived intangible assets | 585.4 |
| 21 | | 365.6 |
| 18 |
| | 219.8 |
| 60 |
| | 950.6 |
| 19 | | 720.8 |
| 18 |
| | 229.8 |
| 32 |
|
Restructuring, integration and other costs | 143.4 |
| 5 | | 142.1 |
| 7 |
| | 1.3 |
| 1 |
| | 198.4 |
| 4 | | 275.7 |
| 7 |
| | (77.3 | ) | (28 | ) |
In-process research and development impairments and other charges | 12.3 |
| — | | 8.4 |
| — |
| | 3.9 |
| 46 |
| | 12.3 |
| — | | 20.4 |
| 1 |
| | (8.1 | ) | (40 | ) |
Acquisition-related costs | 9.5 |
| — | | 0.6 |
| — |
| | 8.9 |
| NM |
| | 19.3 |
| — | | 2.1 |
| — |
| | 17.2 |
| NM |
|
Acquisition-related contingent consideration | 11.7 |
| — | | 1.9 |
| — |
| | 9.8 |
| NM |
| | 18.8 |
| — | | 10.8 |
| — |
| | 8.0 |
| 74 |
|
Other expense (income) | 176.9 |
| 6 | | (0.4 | ) | — |
| | 177.3 |
| NM |
| | 183.0 |
| 4 | | (43.7 | ) | (1 | ) | | 226.7 |
| NM |
|
Total operating expenses | 2,390.9 |
| 88 | | 1,686.0 |
| 83 |
| | 704.9 |
| 42 |
| | 4,038.4 |
| 82 | | 3,215.6 |
| 82 |
| | 822.8 |
| 26 |
|
____________________________________
(1) — Represents the percentage for each category as compared to total revenues.
NM — Not meaningful
Cost of Goods Sold (exclusive of amortization and impairments of finite-lived intangible assets)
Cost of goods sold increased $100 million, or 18%, to $670 million in the second quarter of 2015, and increased $157 million, or 15%, to $1.23 billion in the first half of 2015. As a percentage of revenue, Cost of goods sold was 25% for both the second quarter and first half of 2015, as compared to 28% and 27% for the second quarter and first half of 2014, respectively. Cost of goods sold was impacted primarily by:
| |
• | a favorable impact from sales of products acquired in the Salix Acquisition in the second quarter of 2015, as well as Isuprel® and Nitropress® product sales (these products were acquired from Marathon in the first quarter of 2015), as such products have a higher gross profit margin than our overall gross profit margin. This is partially offset by a lower gross profit margin related to the Provenge® product, which was acquired as part of the Dendreon acquisition in the first quarter of 2015; and |
| |
• | a favorable impact from product mix and geographic mix driven by growth in the U.S. businesses and recent dermatology product launches, including Jublia®, RAM 0.08%, and Onexton®. These products have a higher gross profit margin than our overall margin. |
Those factors were partially offset by:
| |
• | an unfavorable impact on gross margin from foreign currency exchange of $108 million and $195 million in the second quarter and first half of 2015, respectively; and |
| |
• | the impact of incremental acquisition accounting adjustments of $42 million and $61 million in the second quarter and first half of 2015, respectively, primarily related to step-up for acquired inventory from the Salix and Marathon acquisitions which was expensed in the second quarter and first half of 2015 that did not similarly occur in the second quarter and first half of 2014. |
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A") increased $170 million, or 33%, to $686 million in the second quarter of 2015, and increased $262 million, or 26%, to $1.26 billion in the first half of 2015. As a percentage of revenue, SG&A was 25% and 26% in the second quarter and first half of 2015, respectively, as compared to 25% in both the second quarter and first half of 2014. SG&A in the second quarter and first half of 2015 was impacted primarily by:
| |
• | higher expenses of $124 million and $187 million, respectively, to support recent product launches in dermatology, including Jublia® and Onexton®; |
| |
• | higher expenses of $98 million and $123 million, respectively, related to acquisitions, including Salix and Dendreon; |
| |
• | increased share-based compensation expense of $10 million and $20 million, respectively, primarily driven by new awards granted during the period and the impact of the accelerated vesting related to certain performance-based RSU awards (as a result of a modification made to share-based awards, we expect an increase in share-based compensation expense in the future. Refer to Note 9 of notes to the unaudited consolidated financial statements for further details); and |
| |
• | higher expenses of $10 million to support launches in the contact lens business for both the second quarter and first half of 2015. |
Those factors were partially offset by
| |
• | a favorable impact from foreign currency exchange of $50 million and $95 million in the second quarter and first half of 2015, respectively; and |
| |
• | lower expenses of $21 million and $30 million, respectively, related to the facial aesthetic fillers and toxins assets which were divested in the third quarter of 2014. |
Research and Development Expenses
Research and development expenses increased $15 million, or 22%, to $81 million in the second quarter of 2015, and increased $9 million, or 7%, to $137 million in the first half of 2015, primarily due to spending on programs acquired in the Salix and Dendreon acquisitions.
Amortization and Impairments of Finite-Lived Intangible Assets
Amortization and impairments of finite-lived intangible assets increased $220 million, or 60%, to $585 million in the second quarter of 2015, and increased $230 million, or 32%, to $951 million in the first half of 2015, primarily due to amortization of all 2014 acquisitions and all 2015 acquisitions in the first half of 2015 (primarily the Salix, Marathon, PreCision, and Dendreon acquisitions) that did not similarly exist in the second quarter and first half of 2014, partially offset by a decrease of $10 million and $25 million in the second quarter and first half of 2015, respectively, in amortization of the facial aesthetic fillers and toxins assets which were divested in July 2014.
As part of our ongoing assessment of potential impairment indicators related to our finite-lived and indefinite-lived intangible assets, we will closely monitor the performance of our product portfolio. If our ongoing assessments reveal indications of impairment, we may determine that an impairment charge is necessary and such charge could be material.
Restructuring, Integration and Other Costs
We recognized restructuring, integration and other costs of $143 million and $198 million in the second quarter and first half of 2015, respectively, primarily related to the Salix and Dendreon acquisitions, as well as other smaller acquisitions.
We recognized restructuring, integration and other costs of $142 million and $276 million in the second quarter and first half of 2014, respectively, primarily related to the B&L and Solta Medical acquisitions, as well as other smaller acquisitions.
Refer to Note 4 titled "RESTRUCTURING, INTEGRATION AND OTHER COSTS" of notes to unaudited consolidated financial statements for further details.
In-Process Research and Development Impairments and Other Charges
In the second quarter and first half of 2015, we recognized an in-process research and development charge of $12 million related to the write-off of the Arestin® Peri-Implantitis development program, resulting from analysis of Phase 3 study data.
In the second quarter and first half of 2014, we recognized in-process research and development charges of $8 million and $20 million, respectively, primarily related to (i) an up-front payment made in connection with an amendment to a license and distribution agreement with a third party in the first quarter of 2014 and (ii) payments to third parties associated with the achievement of specific developmental and regulatory milestones under our research and development programs, including Jublia®, in the second quarter of 2014.
Acquisition-Related Contingent Consideration
In the second quarter and first half of 2015, we recognized an acquisition-related contingent consideration loss of $12 million and $19 million. The net loss was primarily driven by fair value adjustments to reflect accretion for the time value of money related to the Elidel®/Xerese®/Zovirax® agreement entered into with Meda Pharma SARL (“Meda”) in June 2011 (the “Elidel®/Xerese®/Zovirax® agreement”) and the Salix Acquisition.
In the second quarter and first half of 2014, we recognized an acquisition-related contingent consideration loss of $2 million and $11 million, respectively. The net loss was primarily driven by (i) fair value adjustments to reflect accretion for the time value of money related to the Elidel®/Xerese®/Zovirax® agreement, partially offset by (ii) a net gain recognized in the second quarter of 2014 related the Targretin® agreement entered into with Eisai Inc. in February 2013 due to changes in the estimated probability associated with potential milestone payments.
Other Expense (Income)
In the second quarter and first half of 2015, we recognized other expense of $177 million and $183 million, respectively, primarily due to a post-combination expense of $168 million, in the aggregate, related to the acceleration of unvested restricted stock for Salix employees (including $3 million of related payroll taxes) in connection with the Salix Acquisition.
We recognized other income of $44 million in the first half of 2014, primarily due to the reversal of a $50 million reserve related to the AntiGrippin® litigation in the first quarter of 2014, partially offset by a $6 million charge recognized in the first quarter of 2014 related to a settlement of a pre-existing relationship with respect to the acquisition of Solta Medical. Refer to Note 15 titled "LEGAL PROCEEDINGS" and Note 3 titled "BUSINESS COMBINATIONS" of notes to unaudited consolidated financial statements for further details related to the AntiGrippin® litigation and the acquisition of Solta Medical, respectively.
Non-Operating Income (Expense)
The following table displays the dollar amounts of each non-operating income or expense category in the second quarters and first halves of 2015 and 2014 and the dollar and percentage changes in the dollar amount of each category.
|
| | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2015 | | 2014 | | Change | | 2015 | | 2014 | | Change |
($ in millions; Income (Expense)) | $ | | $ | | $ | % | | $ | | $ | | $ | % |
Interest income | 0.9 |
| | 1.2 |
| | (0.3 | ) | (25 | ) | | 1.8 |
| | 3.0 |
| | (1.2 | ) | (40 | ) |
Interest expense | (412.7 | ) | | (241.2 | ) | | (171.5 | ) | 71 |
| | (710.5 | ) | | (487.7 | ) | | (222.8 | ) | 46 |
|
Loss on extinguishment of debt | — |
| | — |
| | — |
| NM |
| | (20.0 | ) | | (93.7 | ) | | 73.7 |
| (79 | ) |
Foreign exchange and other | 5.6 |
| | 3.4 |
| | 2.2 |
| 65 |
| | (65.5 | ) | | (10.0 | ) | | (55.5 | ) | 555 |
|
Gain on investments, net | — |
| | 2.5 |
| | (2.5 | ) | NM |
| | — |
| | 2.5 |
| | (2.5 | ) | NM |
|
Total non-operating expense | (406.2 | ) | | (234.1 | ) | | (172.1 | ) | 74 |
| | (794.2 | ) | | (585.9 | ) | | (208.3 | ) | 36 |
|
____________________________________
NM — Not meaningful
Interest Expense
Interest expense increased $172 million, or 71%, to $413 million in the second quarter of 2015, primarily due to an increase of (i) $157 million related to the issuances of senior unsecured notes and (ii) $29 million related to our term loans, primarily due to issuances as part of the Salix Acquisition, partially offset by a decrease of (iii) $25 million related to the early redemptions of the 6.875% senior notes due 2018 (the "December 2018 Notes") in December 2014 and February 2015 and the 6.75% senior notes due 2017 (the "2017 Notes") in October 2014.
Interest expense increased $223 million, or 46%, to $711 million in the first half of 2015, primarily due to an increase of (i) $174 million related to the issuances of senior unsecured notes, (ii) $72 million related to financing costs associated with the commitment letter entered into in connection with the Salix Acquisition and (iii) $14 million related to our term loans, primarily due to issuances as part of the Salix Acquisition, partially offset by a decrease of (iv) $45 million related to the early redemptions of the December 2018 Notes in December 2014 and February 2015 and the 2017 Notes in October 2014.
Loss on Extinguishment of Debt
In the first half of 2015, we recognized losses of $20 million related to the redemption of the December 2018 Notes in February 2015. Refer to Note 8 titled "LONG-TERM DEBT" of notes to unaudited consolidated financial statements for further details.
In the first half of 2014, we recognized losses of $94 million, related to the refinancing of our Series E tranche B term loan facility in February 2014.
Foreign Exchange and Other
In the first half of 2015, we recognized foreign exchange and other losses of $66 million primarily due to (i) a net foreign exchange loss of $38 million on intercompany loans, driven by a euro-denominated intercompany loan and (ii) the $26 million loss recognized in the first quarter of 2015 in connection with the foreign currency forward-exchange contracts entered into in March 2015 (refer to Note 5 titled "FAIR VALUE MEASUREMENTS" of notes to unaudited consolidated financial statements for further details.
In the first half of 2014, we recognized foreign exchange and other losses of $10 million primarily due to the foreign exchange losses on intercompany loans.
Income Taxes
The following table displays the dollar amounts of the current and deferred (recovery of) provision for income taxes in the second quarters and first halves of 2015 and 2014 and the dollar and percentage changes in the dollar amount of each provision. Percentages may not add due to rounding.
|
| | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2015 | | 2014 | | Change | | 2015 | | 2014 | | Change |
($ in millions; Expense (Income)) | $ | | $ | | $ | % | | $ | | $ | | $ | % |
Current income tax expense | 37.0 |
| | 20.3 |
| | 16.7 |
| 82 | | 55.4 |
| | 35.4 |
| | 20.0 |
| 56 |
Deferred income tax expense | (50.1 | ) | | (21.3 | ) | | (28.8 | ) | 135 | | 12.4 |
| | (11.3 | ) | | 23.7 |
| NM |
Total (recovery of) provision for income taxes | (13.1 | ) | | (1.0 | ) | | (12.1 | ) | NM | | 67.8 |
| | 24.1 |
| | 43.7 |
| 181 |
____________________________________
NM — Not meaningful
In the three-month period ended June 30, 2015, we recognized an income tax benefit of $13 million, comprised of $13 million related to the expected tax benefit in tax jurisdictions outside of Canada and an income tax benefit of a nominal amount related to Canadian income taxes. In the six-month period ended June 30, 2015, we recognized an income tax expense of $68 million, comprised of $67 million related to the expected tax expense in tax jurisdictions outside of Canada and an income tax expense of $1 million related to Canadian income taxes. In the three-month and six-month periods ended June 30, 2015, our effective tax rate was different from our statutory Canadian tax rate due to tax expense generated from our annualized mix of earnings by jurisdiction and a benefit for restructurings undertaken to streamline our operations in Germany.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
Our primary sources of cash include: cash collected from customers, funds available from our revolving credit facility, issuances of long-term debt and issuances of equity. Our primary uses of cash include: business development transactions, funding ongoing operations, interest and principal payments, securities repurchases and restructuring activities. The following table displays cash flow information for the second quarters and first halves of 2015 and 2014:
|
| | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2015 | | 2014 | | Change | | 2015 | | 2014 | | Change |
($ in millions) | $ | | $ | | $ | % | | $ | | $ | | $ | % |
Net cash provided by operating activities | 410.5 |
| | 376.0 |
| | 34.5 |
| 9 | | 901.6 |
| | 860.3 |
| | 41.3 |
| 5 |
|
Net cash used in investing activities | (2,645.2 | ) | | (266.4 | ) | | (2,378.8 | ) | NM | | (13,885.7 | ) | | (650.5 | ) | | (13,235.2 | ) | NM |
|
Net cash provided by (used in) financing activities | 1,325.3 |
| | (156.6 | ) | | 1,481.9 |
| NM | | 13,631.6 |
| | (279.3 | ) | | 13,910.9 |
| NM |
|
Effect of exchange rate changes on cash and cash equivalents | 3.0 |
| | 1.9 |
| | 1.1 |
| 58 | | (12.1 | ) | | 0.4 |
| | (12.5 | ) | NM |
|
Net (decrease) increase in cash and cash equivalents | (906.4 | ) | | (45.1 | ) | | (861.3 | ) | NM | | 635.4 |
| | (69.1 | ) | | 704.5 |
| NM |
|
Cash and cash equivalents, beginning of period | 1,864.4 |
| | 576.3 |
| | 1,288.1 |
| 224 | | 322.6 |
| | 600.3 |
| | (277.7 | ) | (46 | ) |
Cash and cash equivalents, end of period | 958.0 |
| | 531.2 |
| | 426.8 |
| 80 | | 958.0 |
| | 531.2 |
| | 426.8 |
| 80 |
|
____________________________________
NM — Not meaningful
Operating Activities
Net cash provided by operating activities increased $35 million, or 9%, to $411 million in the second quarter of 2015, primarily due to:
| |
• | the inclusion of cash flows in the second quarter of 2015 from all 2014 and 2015 acquisitions, including Marathon, Dendreon, and PreCision; |
| |
• | incremental cash flows from the continued growth of the existing business, including new product launches; and |
| |
• | lower payments of $38 million related to restructuring, integration and other costs primarily due to lower payments related to the B&L Acquisition, partially offset by payments made in the second quarter of 2015 related to the Salix and Dendreon acquisitions. |
Those factors were partially offset by:
| |
• | payment of $168 million for outstanding restricted stock that was accelerated in connection with the Salix Acquisition, which includes $3 million of related payroll taxes (recognized as a post-combination expense within Other expense (income)); and |
| |
• | an increased investment in working capital of $131 million in the second quarter of 2015, primarily related to the post-acquisition build up in accounts receivable for recent acquisitions (primarily the Salix Acquisition) where minimal accounts receivable balances were acquired and the impact of changes related to timing of payments and receipts in the ordinary course of business. |
Net cash provided by operating activities increased $41 million, or 5%, to $902 million in the first half of 2015, primarily due to:
| |
• | the inclusion of cash flows in the first half of 2015 from all 2014 and 2015 acquisitions, including Dendreon and PreCision; |
| |
• | incremental cash flows from the continued growth of the existing business, including new product launches; and |
| |
• | lower payments of $110 million related to restructuring, integration and other costs primarily due to lower payments related to the B&L Acquisition, partially offset by payments made in 2015 related to the Salix and Dendreon acquisitions. |
Those factors were partially offset by:
| |
• | an increased investment in working capital of $298 million in the first half of 2015, primarily related to the post-acquisition build up in accounts receivable for recent acquisitions (primarily the Salix and Marathon acquisitions) where minimal accounts receivable balances were acquired and the impact of changes related to timing of payments and receipts in the ordinary course of business; and |
| |
• | payment of $168 million for outstanding restricted stock that was accelerated in connection with the Salix Acquisition, which includes $3 million of related payroll taxes. |
Investing Activities
Net cash used in investing activities increased $2.38 billion to $2.65 billion in the second quarter of 2015, primarily due to:
| |
• | an increase of $13.02 billion, in the aggregate, related to higher purchases of businesses (net of cash acquired) and intangible assets, driven by the Salix Acquisition. This amount includes restricted cash and cash equivalents released from escrow in April 2015 to fund the Salix Acquisition (see bullet point below). |
This factor was partially offset by:
| |
• | a decrease of $10.34 billion in restricted cash and cash equivalents as the net proceeds from the issuance of the senior notes in the first quarter of 2015 were released from escrow and utilized to fund the Salix Acquisition in April 2015. See note 8 of notes to the unaudited consolidated financial statements for additional information; |
| |
• | a decrease of $185 million related to the net impact from the settlement of derivative contracts assumed in the Salix Acquisition (consists of the settlement of the $1.27 billion asset mostly offset by the settlement of the $1.08 billion liability, as further described in Note 3 titled "BUSINESS COMBINATIONS" of notes to the unaudited consolidated financial statements); |
| |
• | a decrease of $76 million related to the investment in the second quarter of 2014 in PS Fund 1, LLC ("PS Fund 1"), an entity that we previously owned with Pershing Square Capital Management, L.P. ("Pershing Square") (we are no longer a member of PS Fund 1), which did not similarly occur in the second quarter of 2015; and |
| |
• | a decrease of $67 million in purchases of property, plant and equipment. |
Net cash used in investing activities increased $13.24 billion to $13.89 billion in the first half of 2015, primarily due to:
| |
• | an increase of $13.54 billion, in the aggregate, related to higher purchases of businesses (net of cash acquired) and intangible assets, driven by the Salix, Dendreon and Marathon acquisitions. |
This factor was partially offset by:
| |
• | a decrease of $185 million related to the net impact from the settlement of derivative contracts assumed in the Salix Acquisition; |
| |
• | a decrease of $76 million related to the investment in the second quarter of 2014 in PS Fund 1, an entity that we previously owned with Pershing Square (we are no longer a member of PS Fund 1), which did not similarly occur in the first half of 2015; and |
| |
• | a decrease of $59 million in purchases of property, plant and equipment. |
Financing Activities
Net cash provided by financing activities was $1.33 billion in the second quarter of 2015, compared with the net cash used in financing activities of $157 million in the second quarter of 2014, reflecting an increase of $1.48 billion, primarily due to:
| |
• | an increase due to the net proceeds of $5.06 billion, in the aggregate, related to the issuances of incremental term loans under the Series A-4 Tranche A Facility and the Series F Tranche B Term Loan Facility in the second quarter of 2015. |
This factor was partially offset by:
| |
• | a decrease due to $3.12 billion paid in connection with the redemption of the convertible notes assumed in the Salix Acquisition in the second quarter of 2015; |
| |
• | a decrease due to $225 million paid in connection with our revolving credit facility in the second quarter 2015; |
| |
• | a decrease due to $50 million paid to repurchase common shares in June 2015; and |
| |
• | a decrease due to $23 million paid in connection with the Series A-4 Tranche A Facility and the Series F Tranche B Term Loan Facility. |
Net cash provided by financing activities was $13.63 billion in the first half of 2015, compared with the net cash used in financing activities of $279 million in the first half of 2014, reflecting an increase of $13.91 billion, primarily due to:
| |
• | an increase due to the net proceeds of $10 billion related to the issuance of the senior notes in the first quarter of 2015, (which were released from escrow in April 2015, as explained above under "Investing Activities", and utilized to fund the Salix Acquisition); |
| |
• | an increase due to the net proceeds of $5.06 billion, in the aggregate, related to the issuances of incremental term loans under the Series A-4 Tranche A Facility and the Series F Tranche B Term Loan Facility in the second quarter of 2015; |
| |
• | an increase due to the net proceeds of $1.43 billion related to the issuance of common stock in March 2015, which were utilized to fund the Salix Acquisition; |
| |
• | an increase due to the net proceeds of $992 million from the issuance of the 2023 Notes in the first quarter of 2015; and |
| |
• | an increase due to the net proceeds of $250 million related to the issuance of incremental term loans under the Series A-3 Tranche A Term Loan Facility in the first quarter of 2015. |
Those factors were partially offset by:
| |
• | a decrease due to $3.12 billion paid in connection with the redemption of the convertible notes assumed in the Salix Acquisition in the second quarter of 2015; and |
| |
• | a decrease due to $500 million paid in connection with the redemption of the December 2018 Notes in the first quarter of 2015. |
See Note 8 titled "LONG TERM DEBT" of notes to the unaudited consolidated financial statements for additional information regarding the financing activities described above.
Debt and Liquidity
See Note 8 of notes to the unaudited consolidated financial statements for detailed information regarding our long-term debt.
The senior notes issued by us are our senior unsecured obligations and are jointly and severally guaranteed on a senior unsecured basis by each of our subsidiaries that is a guarantor under our senior secured credit facilities. The senior notes issued by our subsidiary Valeant are senior unsecured obligations of Valeant and are jointly and severally guaranteed on a senior unsecured basis by us and each of our subsidiaries (other than Valeant) that is a guarantor under our senior secured credit facilities. Certain of the future subsidiaries of the Company and Valeant may be required to guarantee the senior notes. The non-guarantor subsidiaries had total assets of $7.71 billion and total liabilities of $3.97 billion as of June 30, 2015, and net revenues of $1.68 billion and net loss from operations of $123 million for the six-month period ended June 30, 2015.
Our primary sources of liquidity are our cash, cash collected from customers, funds available from our revolving credit facility, issuances of long-term debt and issuances of equity. We believe these sources will be sufficient to meet our current liquidity needs. We have commitments approximating $70 million for expenditures related to property, plant and equipment. Since part of our business strategy is to expand through strategic acquisitions, we may be required to seek additional debt financing, issue additional equity securities or sell assets, as necessary, to finance future acquisitions, such as the additional debt and equity financing that was required in connection with the Salix Acquisition (see Notes 3, 8, and 11 of notes to the unaudited consolidated financial statements for information regarding the Salix Acquisition and the related debt and equity financing) or for other general corporate purposes. Our current corporate credit rating is Ba3 from Moody’s Investors Service and BB- from Standard and Poor’s. A downgrade may increase our cost of borrowing and may negatively impact our ability to raise additional debt capital.
As of June 30, 2015, we were in compliance with all of our covenants related to our outstanding debt. As of June 30, 2015, our short-term portion of long-term debt totaled $591 million, in the aggregate. We believe our existing cash and cash generated from operations will be sufficient to cover our debt maturities as they become due.
OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS
We have no off-balance sheet arrangements that have a material current effect or that are reasonably likely to have a material future effect on our results of operations, financial condition, capital expenditures, liquidity, or capital resources.
The following table summarizes our contractual obligations related to our long-term debt, including interest, as of June 30, 2015:
|
| | | | | | | | | | | | | | | |
| | Payments Due by Period |
| | Total | | 2015 | | 2016 and 2017 | | 2018 and 2019 | | Thereafter |
($ in millions) | | $ | | $ | | $ | | $ | | $ |
Long-term debt obligations, including interest(1) | | 42,233.0 |
| | 892.8 |
| | 4,713.1 |
| | 8,320.7 |
| | 28,306.4 |
|
___________________________________
| |
(1) | Expected interest payments assume repayment of the principal amount of the debt obligations at maturity. |
Under certain agreements, the Company may be required to make payments contingent upon the achievement of specific developmental, regulatory, or commercial milestones. In connection with the Salix Acquisition in April 2015, the Company may make contingent consideration payments to third parties, as further described in Note 3 titled “BUSINESS COMBINATIONS” and Note 5 titled “FAIR VALUE MEASUREMENTS” of notes to the unaudited consolidated financial statements. In addition to these contingent consideration payments, the Company estimates that it may pay other potential milestones of up to approximately $500 million over time (the majority of which relates to sales-based milestones), in the aggregate, to third-parties in connection with certain agreements assumed in the Salix Acquisition. Due to the nature of these arrangements, the future potential payments related to the attainment of the specified milestones over a period of several years are inherently uncertain.
There have been no other material changes outside the normal course of business to the items specified in the contractual obligations table and related disclosures under the heading “Off-Balance Sheet Arrangements and Contractual Obligations” in "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in the 2014 Form 10-K.
OUTSTANDING SHARE DATA
Our common shares are listed on the TSX and the NYSE under the ticker symbol “VRX”.
At July 22, 2015, we had 342,788,885 outstanding common shares. In addition, as of July 22, 2015, we had outstanding 7,114,467 stock options and 838,570 time-based RSUs that each represent the right of a holder to receive one of the Company’s common shares, and 1,792,763 performance-based RSUs that represent the right of a holder to receive a number of the Company's common shares up to a specified maximum. A maximum of 5,451,056 common shares could be issued upon vesting of the performance-based RSUs outstanding.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Critical accounting policies and estimates are those policies and estimates that are most important and material to the preparation of our consolidated financial statements, and which require management’s most subjective and complex judgment due to the need to select policies from among alternatives available, and to make estimates about matters that are inherently uncertain. There have been no material changes to our critical accounting policies and estimates disclosed under the heading “Critical Accounting Policies and Estimates” in the annual MD&A contained in the 2014 Form 10-K.
NEW ACCOUNTING STANDARDS
Adoption of New Accounting Standards
Information regarding the recently issued new accounting guidance (adopted and not adopted as of June 30, 2015) is contained in Note 2 titled "SIGNIFICANT ACCOUNTING POLICIES" of notes to the unaudited consolidated financial statements.
FORWARD-LOOKING STATEMENTS
Caution regarding forward-looking information and statements and “Safe-Harbor” statements under the U.S. Private Securities Litigation Reform Act of 1995:
To the extent any statements made in this MD&A contain information that is not historical, these statements are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and may be forward-looking information within the meaning defined under applicable Canadian securities legislation (collectively, “forward-looking statements”).
These forward-looking statements relate to, among other things: the expected benefits of our acquisitions and other transactions (including the acquisition of Salix ), such as cost savings, operating synergies and growth potential of the Company; our business strategy, business plans and prospects, product pipeline, prospective products or product approvals, future performance or results of current and anticipated products; exposure to foreign currency exchange rate changes and interest rate changes; the outcome of contingencies, such as certain litigation, investigations and regulatory proceedings; general market conditions; and our expectations regarding our financial performance, including revenues, expenses, gross margins, liquidity and income taxes.
Forward-looking statements can generally be identified by the use of words such as “believe”, “anticipate”, “expect”, “intend”, “estimate”, “plan”, “continue”, “will”, “may”, “could”, “would”, “should”, “target”, “potential”, “opportunity”, “tentative”, “positioning”, “designed”, “create”, “predict”, “project”, “forecast”, “seek”, “ongoing”, “increase”, or “upside” and variations or other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements may not be appropriate for other purposes. Although we have indicated above certain of these statements set out herein, all of the statements in this Form 10-Q that contain forward-looking statements are qualified by these cautionary statements. These statements are based upon the current expectations and beliefs of management. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, including, but not limited to, factors and assumptions regarding the items outlined above. Actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following:
| |
• | the challenges and difficulties associated with managing the rapid growth of our Company and a large complex business; |
| |
• | our ability to retain, motivate and recruit executives and other key employees; |
| |
• | the introduction of products that compete against our products that do not have patent or data exclusivity rights; |
| |
• | our ability to compete against companies that are larger and have greater financial, technical and human resources than we do, as well as other competitive factors, such as technological advances achieved, patents obtained and new products introduced by our competitors; |
| |
• | our ability to identify, finance, acquire, close and integrate acquisition targets successfully and on a timely basis; |
| |
• | factors relating to the acquisition and integration of the companies, businesses and products acquired by the Company, such as the time and resources required to integrate such companies, businesses and products, the difficulties associated with such integrations (including potential disruptions in sales activities and potential challenges with information technology systems integrations), the difficulties and challenges associated with entering into new business areas and new geographic markets, the difficulties, challenges and costs associated with managing and integrating new facilities, equipment and other assets, and the achievement of the anticipated benefits from such integrations, as well as risks associated with the acquired companies, businesses and products; |
| |
• | factors relating to our ability to achieve all of the estimated synergies from our acquisitions as a result of cost-rationalization and integration initiatives. These factors may include greater than expected operating costs, the difficulty in eliminating certain duplicative costs, facilities and functions, and the outcome of many operational and strategic decisions, some of which have not yet been made; |
| |
• | factors relating to our recent acquisition of Salix, including the impact of substantial additional debt on our financial condition and results of operations; our ability to effectively and efficiently integrate the operations of the Company and Salix; our ability to achieve the estimated synergies from this transaction; the challenges associated with entering into Salix's gastrointestinal (GI) business, which is a new business for our Company; our ability to further reduce wholesaler inventory levels of certain of Salix's products and the timing of such reduction; and, once integrated, the effects of such business combination on our future financial condition, operating results, strategy and plans; |
| |
• | our ability to secure and maintain third party research, development, manufacturing, marketing or distribution arrangements; |
| |
• | our eligibility for benefits under tax treaties and the continued availability of low effective tax rates for the business profits of certain of our subsidiaries; |
| |
• | our substantial debt and debt service obligations and their impact on our financial condition and results of operations; |
| |
• | our future cash flow, our ability to service and repay our existing debt, our ability to raise additional funds, if needed, and any restrictions that are or may be imposed as a result of our current and future indebtedness, in light of our current and projected levels of operations, acquisition activity and general economic conditions; |
| |
• | any downgrade by rating agencies in our corporate credit ratings, which may impact, among other things, our ability to raise additional debt capital and implement elements of our growth strategy; |
| |
• | interest rate risks associated with our floating rate debt borrowings; |
| |
• | the risks associated with the international scope of our operations, including our presence in emerging markets and the challenges we face when entering new geographic markets (including the challenges created by new and different regulatory regimes in such countries); |
| |
• | adverse global economic conditions and credit markets and foreign currency exchange uncertainty and volatility in the countries in which we do business (such as the recent instability in Russia, Ukraine and the Middle East); |
| |
• | economic factors over which the Company has no control, including changes in inflation, interest rates, foreign currency rates, and the potential effect of such factors on revenues, expenses and resulting margins; |
| |
• | the introduction of generic competitors of our branded products; |
| |
• | our ability to obtain and maintain sufficient intellectual property rights over our products and defend against challenges to such intellectual property; |
| |
• | the expense, timing and outcome of legal proceedings, arbitrations, investigations, tax and other regulatory audits, and regulatory proceedings and settlements thereof (including the matters assumed as part of our acquisition of Salix); |
| |
• | the risk that our products could cause, or be alleged to cause, personal injury and adverse effects, leading to potential lawsuits, product liability claims and damages and/or withdrawals of products from the market; |
| |
• | the availability of and our ability to obtain and maintain adequate insurance coverage and/or our ability to cover or insure against the total amount of the claims and liabilities we face, whether through third party insurance or self-insurance; |
| |
• | the difficulty in predicting the expense, timing and outcome within our legal and regulatory environment, including with respect to approvals by the U.S. Food and Drug Administration (the "FDA"), Health Canada and similar agencies in other countries, legal and regulatory proceedings and settlements thereof, the protection afforded by our patents and other intellectual and proprietary property, successful generic challenges to our products and infringement or alleged infringement of the intellectual property of others; |
| |
• | the results of continuing safety and efficacy studies by industry and government agencies; |
| |
• | ongoing oversight and review of our products and facilities by regulatory and governmental agencies, including periodic audits by the FDA, and the results thereof; |
| |
• | the availability and extent to which our products are reimbursed by government authorities and other third party payors, as well as the impact of obtaining or maintaining such reimbursement on the price of our products; |
| |
• | the inclusion of our products on formularies or our ability to achieve favorable formulary status, as well as the impact on the price of our products in connection therewith; |
| |
• | the impact of price control restrictions on our products, including the risk of mandated price reductions; |
| |
• | the success of preclinical and clinical trials for our drug development pipeline or delays in clinical trials that adversely impact the timely commercialization of our pipeline products, as well as factors impacting the commercial success of our currently marketed products, which could lead to material impairment charges; |
| |
• | the results of management reviews of our research and development portfolio, conducted periodically and in connection with certain acquisitions, the decisions from which could result in terminations of specific projects which, in turn, could lead to material impairment charges; |
| |
• | negative publicity or reputational harm to our products and business; |
| |
• | the uncertainties associated with the acquisition and launch of new products, including, but not limited to, the acceptance and demand for new pharmaceutical products, and the impact of competitive products and pricing; |
| |
• | our ability to obtain components, raw materials or finished products supplied by third parties and other manufacturing and related supply difficulties, interruptions and delays; |
| |
• | the disruption of delivery of our products and the routine flow of manufactured goods; |
| |
• | the seasonality of sales of certain of our products; |
| |
• | declines in the pricing and sales volume of certain of our products that are distributed or marketed by third parties, over which we have no or limited control; |
| |
• | compliance with, or the failure to comply with, health care “fraud and abuse” laws and other extensive regulation of our marketing, promotional and pricing practices, worldwide anti-bribery laws (including the U.S. Foreign Corrupt Practices Act), worldwide environmental laws and regulation and privacy and security regulations; |
| |
• | the impacts of the Patient Protection and Affordable Care Act (as amended) and other legislative and regulatory healthcare reforms in the countries in which we operate; |
| |
• | potential ramifications, including possible financial penalties, relating to Salix's restatement of its historical financial results and our ability to address historic weaknesses in Salix's internal control over financial reporting; |
| |
• | interruptions, breakdowns or breaches in our information technology systems; and |
| |
• | other risks detailed from time to time in our filings with the U.S. Securities and Exchange Commission (the “SEC”) and the Canadian Securities Administrators (the “CSA”), as well as our ability to anticipate and manage the risks associated with the foregoing. |
Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found under Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, under Item 1A. "Risk Factors" of Part II of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, and in the Company's other filings with the SEC and CSA. When relying on our forward-looking statements to make decisions with respect to the Company, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. These forward-looking statements speak only as of the date made. We undertake no obligation to update or revise any of these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect actual outcomes, except as required by law. We caution that, as it is not possible to predict or identify all relevant factors that may impact forward-looking statements, the foregoing list of important factors that may affect future results is not exhaustive and should not be considered a complete statement of all potential risks and uncertainties.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to our exposures to market risks as disclosed under the heading “Quantitative and Qualitative Disclosures About Market Risks” in the annual MD&A contained in the 2014 Form 10-K.
Interest Rate Risk
As of June 30, 2015, we had $17.78 billion and $11.83 billion principal amount of issued fixed rate debt and variable rate debt, respectively, that requires U.S. dollar repayment, as well as €1.50 billion principal amount of issued fixed rate debt that requires repayment in Euros. The estimated fair value of our issued fixed rate debt as of June 30, 2015, including the debt denominated in Euros, was $20.07 billion. If interest rates were to increase by 100 basis-points, the fair value of our long-term debt would decrease by approximately $800 million. If interest rates were to decrease by 100 basis-points, the fair value of our long-term debt would increase by approximately $605 million. We are subject to interest rate risk on our variable rate debt as changes in interest rates could adversely affect earnings and cash flows. A 100 basis-points increase in interest rates, based on 3-month LIBOR, would have an annualized pre-tax effect of approximately $78 million in our consolidated statements of (loss) income and cash flows, based on current outstanding borrowings and effective interest rates on our variable rate debt. For the tranches in our credit facility that have a LIBOR floor, an increase in interest rates would only impact interest expense on those term loans to the extent LIBOR exceeds the floor. While our variable-rate debt may impact earnings and cash flows as interest rates change, it is not subject to changes in fair value.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), has evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2015. Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of June 30, 2015.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal controls over financial reporting that occurred during the three-month period ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
For information concerning legal proceedings, reference is made to Note 15 titled "LEGAL PROCEEDINGS" of notes to the unaudited consolidated financial statements included under Part I, Item 1, of this Quarterly Report on Form 10-Q.
Item 1A. Risk Factors
There have been no material changes to the risk factors disclosed in Part I, Item 1A. of our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, as supplemented by risk factors disclosed in Item 1A. of Part II of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table contains information about our purchases of equity securities during the three-month period ended June 30, 2015:
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Period | Total Number of Shares (or Units) Purchased(1) | | Average Price Paid Per Share(2) | | Total Number of Shares Purchased as Part of Publicly Announced Plan | | Maximum Number (Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plan(1) |
| | | | | | | (In millions) |
April 1, 2015 to April 30, 2015 | — |
| | $ | — |
| | — |
| | $ | 2,000 |
|
May 1, 2015 to May 31, 2015 | — |
| | $ | — |
| | — |
| | $ | 2,000 |
|
June 1, 2015 to June 30, 2015 | 224,215 |
| | $ | 223.00 |
| | 224,215 |
| | $ | 1,950 |
|
__________________ | |
(1) | On November 20, 2014, our Board of Directors authorized the repurchase of up to $2.0 billion of senior notes, common shares and/or other securities, subject to any restrictions in our financing agreements and applicable law (the “2014 Securities Repurchase Program”). The 2014 Securities Repurchase Program will terminate on November 20, 2015 or at such time as we complete our purchases. In June 2015, under the 2014 Securities Repurchase Program, the Company repurchased 224,215 of its common shares. These common shares were subsequently canceled. |
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(2) | The average price paid per share excludes any broker commissions. |
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.
Item 6. Exhibits
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10.1*† | | Separation Agreement dated July 14, 2015 between Valeant Pharmaceuticals International, Inc. and Howard B. Schiller. |
10.2*† | | Employment Letter dated June 10, 2015 between Valeant Pharmaceuticals International, Inc. and Robert Rosiello. |
10.3* | | Amendment No. 11 to the Third Amended and Restated Credit and Guaranty Agreement, dated as of February 13, 2012, as amended, among Valeant Pharmaceuticals International, Inc., the guarantors party thereto, the lenders party thereto and the agents party thereto (the “Third Amended and Restated Credit and Guaranty Agreement”), dated as of May 29, 2015, by and among Valeant Pharmaceuticals International, Inc., certain subsidiaries of Valeant Pharmaceuticals International, Inc. as guarantors, each of the lenders named therein, and Barclays Bank PLC, as administrative and collateral agent. |
10.4 | | Joinder Agreement dated April 1, 2015 to the Third Amended and Restated Credit and Guaranty Agreement, relating to the Series A-4 Tranche A Term Loan Facility, originally filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 filed on April 30, 2015, which is incorporated by reference herein. |
10.5 | | Joinder Agreement dated April 1, 2015 to the Third Amended and Restated Credit and Guaranty Agreement, relating to the Series F Tranche B Term Loan Facility, originally filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 filed on April 30, 2015, which is incorporated by reference herein. |
10.6** | | Supply Agreement dated June 24, 1996 between Alfa Wassermann S.p.A. and Salix Pharmaceuticals, Ltd., originally filed as Exhibit 10.13 to Form S-1 of Salix Pharmaceuticals, Ltd. (“Salix”) filed on August 15, 1997, which is incorporated by reference herein. |
10.7** | | Amendment Number Two to Supply Agreement dated August 6, 2012 by and between Alfa Wassermann S.p.A. and Salix Pharmaceuticals, Inc., originally filed as Exhibit 10.97 to Salix’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed on November 8, 2012, which is incorporated by reference herein. |
10.8** | | Amendment Number Three to Supply Agreement dated July 30, 2014 between Salix Pharmaceuticals, Inc. and Alfa Wassermann, S.p.A., originally filed as Exhibit 10.1 to Salix’s Current Report on Form 8-K filed on October 17, 2014, which is incorporated by reference herein. |
10.9** | | Amendment Number Four to Supply Agreement dated September 4, 2014 between Salix Pharmaceuticals, Inc. and Alfa Wassermann, S.p.A., originally filed as Exhibit 10.2 to Salix’s Current Report on Form 8-K filed on October 17, 2014, which is incorporated by reference herein. |
10.10** | | Amended and Restated License Agreement dated August 6, 2012 by and between Alfa Wassermann S.p.A. and Salix Pharmaceuticals, Inc., originally filed as Exhibit 10.95 to Salix’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed on November 8, 2012, which is incorporated by reference herein. |
10.11** | | Letter Amendment dated September 5, 2012 by and between Alfa Wassermann S.p.A. and Salix Pharmaceuticals, Inc., originally filed as Exhibit 10.100 to Salix’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed on November 8, 2012, which is incorporated by reference herein. |
10.12** | | Trademark License Agreement (Alfa to Salix) dated August 6, 2012 by and between Alfa Wassermann Hungary Kft. and Salix Pharmaceuticals, Inc., originally filed as Exhibit 10.98 to Salix’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed on November 8, 2012, which is incorporated by reference herein. |
10.13** | | License Agreement dated June 22, 2006 between Cedars-Sinai Medical Center and Salix Pharmaceuticals, Inc., originally filed as Exhibit 10.55 to Salix’s Current Report on Form 8-K filed on July 5, 2006, which is incorporated by reference herein. |
31.1* | | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* | | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* | | Certificate of the Chief Executive Officer of Valeant Pharmaceuticals International, Inc. pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2* | | Certificate of the Chief Financial Officer of Valeant Pharmaceuticals International, Inc. pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS* | | XBRL Instance Document |
101.SCH* | | XBRL Taxonomy Extension Schema Document |
101.CAL* | | XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB* | | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* | | XBRL Taxonomy Extension Presentation Linkbase Document |
101.DEF* | | XBRL Taxonomy Extension Definition Document |
____________________________________
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** | Portions of this exhibit have been omitted pursuant to an application for, or an order with respect to, confidential treatment. Such information has been omitted and filed separately with the SEC. |
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† | Management contract or compensatory plan or arrangement. |
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, thereunto duly authorized.
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| Valeant Pharmaceuticals International, Inc. (Registrant) |
Date: July 27, 2015 | /s/ J. MICHAEL PEARSON J. Michael Pearson Chairman of the Board and Chief Executive Officer (Principal Executive Officer) |
Date: July 27, 2015 | /s/ ROBERT L. ROSIELLO Robert L. Rosiello Executive Vice-President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
INDEX TO EXHIBITS
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Exhibit Number | | | Exhibit Description |
10.1*† | | Separation Agreement dated July 14, 2015 between Valeant Pharmaceuticals International, Inc. and Howard B. Schiller. |
10.2*† | | Employment Letter dated June 10, 2015 between Valeant Pharmaceuticals International, Inc. and Robert Rosiello. |
10.3* | | Amendment No. 11 to the Third Amended and Restated Credit and Guaranty Agreement, dated as of February 13, 2012, as amended, among Valeant Pharmaceuticals International, Inc., the guarantors party thereto, the lenders party thereto and the agents party thereto (the “Third Amended and Restated Credit and Guaranty Agreement”), dated as of May 29, 2015, by and among Valeant Pharmaceuticals International, Inc., certain subsidiaries of Valeant Pharmaceuticals International, Inc. as guarantors, each of the lenders named therein, and Barclays Bank PLC, as administrative and collateral agent. |
10.4 | | Joinder Agreement dated April 1, 2015 to the Third Amended and Restated Credit and Guaranty Agreement, relating to the Series A-4 Tranche A Term Loan Facility, originally filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 filed on April 30, 2015, which is incorporated by reference herein. |
10.5 | | Joinder Agreement dated April 1, 2015 to the Third Amended and Restated Credit and Guaranty Agreement, relating to the Series F Tranche B Term Loan Facility, originally filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 filed on April 30, 2015, which is incorporated by reference herein. |
10.6** | | Supply Agreement dated June 24, 1996 between Alfa Wassermann S.p.A. and Salix Pharmaceuticals, Ltd., originally filed as Exhibit 10.13 to Form S-1 of Salix Pharmaceuticals, Ltd. (“Salix”) filed on August 15, 1997, which is incorporated by reference herein. |
10.7** | | Amendment Number Two to Supply Agreement dated August 6, 2012 by and between Alfa Wassermann S.p.A. and Salix Pharmaceuticals, Inc., originally filed as Exhibit 10.97 to Salix’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed on November 8, 2012, which is incorporated by reference herein. |
10.8** | | Amendment Number Three to Supply Agreement dated July 30, 2014 between Salix Pharmaceuticals, Inc. and Alfa Wassermann, S.p.A., originally filed as Exhibit 10.1 to Salix’s Current Report on Form 8-K filed on October 17, 2014, which is incorporated by reference herein. |
10.9** | | Amendment Number Four to Supply Agreement dated September 4, 2014 between Salix Pharmaceuticals, Inc. and Alfa Wassermann, S.p.A., originally filed as Exhibit 10.2 to Salix’s Current Report on Form 8-K filed on October 17, 2014, which is incorporated by reference herein. |
10.10** | | Amended and Restated License Agreement dated August 6, 2012 by and between Alfa Wassermann S.p.A. and Salix Pharmaceuticals, Inc., originally filed as Exhibit 10.95 to Salix’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed on November 8, 2012, which is incorporated by reference herein. |
10.11** | | Letter Amendment dated September 5, 2012 by and between Alfa Wassermann S.p.A. and Salix Pharmaceuticals, Inc., originally filed as Exhibit 10.100 to Salix’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed on November 8, 2012, which is incorporated by reference herein. |
10.12** | | Trademark License Agreement (Alfa to Salix) dated August 6, 2012 by and between Alfa Wassermann Hungary Kft. and Salix Pharmaceuticals, Inc., originally filed as Exhibit 10.98 to Salix’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed on November 8, 2012, which is incorporated by reference herein. |
10.13** | | License Agreement dated June 22, 2006 between Cedars-Sinai Medical Center and Salix Pharmaceuticals, Inc., originally filed as Exhibit 10.55 to Salix’s Current Report on Form 8-K filed on July 5, 2006, which is incorporated by reference herein. |
31.1* | | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* | | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* | | Certificate of the Chief Executive Officer of Valeant Pharmaceuticals International, Inc. pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2* | | Certificate of the Chief Financial Officer of Valeant Pharmaceuticals International, Inc. pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS* | | XBRL Instance Document |
101.SCH* | | XBRL Taxonomy Extension Schema Document |
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| | | |
101.CAL* | | XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB* | | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* | | XBRL Taxonomy Extension Presentation Linkbase Document |
101.DEF* | | XBRL Taxonomy Extension Definition Document |
____________________________________
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** | Portions of this exhibit have been omitted pursuant to an application for, or an order with respect to, confidential treatment. Such information has been omitted and filed separately with the SEC. |
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† | Management contract or compensatory plan or arrangement. |
Exhibit 10.1
June 10, 2015
Robert
Rosiello
Dear Rob:
Effective as of the date hereof (the
Effective Date), this letter outlines the details of your employment with Valeant Pharmaceuticals International, Inc. or its applicable subsidiary (the Company), and your Company assignment. Your employment with the Company
shall commence as of June 11, 2015 (the Commencement Date).
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Title: Effective as of the Commencement Date, you shall be Executive Vice President and you shall be Executive Vice President, Chief Financial Officer, effective on July 1, 2015 (the Appointment
Date). You shall report to the Chief Executive Officer. |
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Office Location: Your principal place of employment will be in New Jersey. |
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Base Salary: Your base salary will be $83,333.34 per month ($1,000,000 annualized). |
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Sign-on Bonus. The Company will pay you a one-time sign-on bonus payment of $6,000,000, which amount shall be payable to you on or promptly following the Appointment Date (or on such other date in as the
Chief Executive Officer may determine), subject to your continued employment on the payment date. In the event that you terminate your employment other than for Good Reason or should the Company terminate your employment for Cause, in either case
within three years of the Appointment Date, you will immediately repay to the Company a pro-rata portion of the net amount of the sign-on bonus payment actually received by you after tax and other applicable withholdings, based on the portion of
such three year period which has not elapsed as of the date of termination. |
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Annual Incentive: You will be eligible to participate in the Companys management bonus plan beginning with the 2015 calendar year, on a pro-rata basis for the portion of 2015 during which you are
employed. Your target bonus will be 120% of your base salary, with the potential of up to 240% of your base salary. This plan, and therefore your participation, is subject to change at the discretion of the Board of Directors. Bonuses are payable at
the time the other management bonuses are paid. To be eligible for any bonus payment, you must be employed by the Company, and you must not have given or received notice of the termination of your employment, on the day on which the applicable bonus
is paid to other members of the Company management. |
June 10, 2015
Robert Rosiello
Page 2 of 10
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Equity Awards: The Companys Talent and Compensation Committee of the Companys Board of Directors (the Committee) approved, effective as of the Appointment Date, the grant of a
target number of 68,000 Performance-based Restricted Share Units (each, a PSU). The Committee has also approved the additional grant of a target number of 68,000 PSUs (each, an Additional PSU). The PSUs and Additional PSUs
shall vest between 0-300%, based on meeting certain Company performance criteria described below, as measured approximately five years from the grant date in respect of the PSUs, and approximately three years from the grant date in respect of the
Additional PSUs. The triggers for 1x, 2x and 3x vesting shall be based on attaining a 10%, 20% and 30% 5-year or 3-year compound total shareholder return, respectively, with measurements governed by the award agreements (which shall contain terms
consistent with the terms customarily provided to other similarly situated executives of the Company, with such modifications to reflect that the applicable performance measurement period) and measured off of a base price equal to the average of the
closing price on the NYSE of the Companys share price for the 20 trading days ending on (and including) the trading day immediately prior to the date hereof. |
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These equity awards are contingent upon your acceptance of this letter agreement and will be made pursuant to the terms of the Companys 2014 Omnibus Incentive Plan and subject to applicable grant agreements. The
grant date for the PSUs and Additional PSUs set forth above shall be the Appointment Date. |
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Share Ownership Commitment. You also agree to comply with any share ownership requirements adopted by the Company applicable to you, which shall be on the same terms as similarly situated executives of the
Company. |
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Matching Grants for Share Purchases. In connection with such share ownership, you shall also be eligible to receive matching share units under the Companys matching share unit program.
Notwithstanding anything in such program to the contrary, you shall receive a grant of one matching share unit for each common share of the Company purchased, up to $5,000,000 in purchases. Each such matching share unit shall vest in equal annual
portions over the 5-year period following grant and shall have such other terms consistent with the terms customarily provided to similarly situated executives of the Company. |
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Good Reason. You may terminate your employment for Good Reason (as defined below) by delivering to the Company a Notice of Termination
(as defined below) not less than thirty (30) days prior to the termination of your employment for Good Reason. The Company shall have the option of terminating your duties and responsibilities prior to the expiration of such thirty-day notice
period, subject to the payment by the Company of the compensation and benefits provided in this letter, as may be applicable. For purposes of this letter, Good Reason shall mean the occurrence of any of the events or conditions described
in clauses (i) through (iii) immediately below which are not cured by the Company (if susceptible to cure by the Company) within thirty (30) days after the Company has received a Notice of Termination. Notice of
Termination means a written notice provided by you |
June 10, 2015
Robert Rosiello
Page 3 of 10
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within ninety (90) days of the initial existence of the event or condition constituting Good Reason specifying the particular events or conditions which constitute Good Reason and the
specific cure requested by you. |
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(i) |
Diminution of Responsibility. (A) any material reduction in your duties or responsibilities as in effect immediately prior thereto, or (B) removal of you from the position of Executive Vice President, Chief
Financial Officer. For the avoidance of doubt, the term Diminution of Responsibility shall not include (Y) any such removal resulting from a promotion, your death or Disability, the termination of your employment for Cause, or your
termination of your employment other than for Good Reason, (Z) the reduction of or change in any particular duties or responsibilities provided you are given other duties or responsibilities such that your overall duties and responsibilities
remain substantially comparable to your overall duties and responsibilities prior to the reduction or change; |
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(ii) |
Compensation Reduction. Any reduction in your base salary or target bonus opportunity which is not comparable to reductions in the base salary or target bonus opportunity of other similarly-situated senior executives at
the Company; or |
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(iii) |
Company Breach. Any other material breach by the Company of any material provision of this letter. |
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Change in Control. For purposes of this letter and, except to the extent as would result in a violation of Section 409A of the Code, a Change in Control shall be deemed to occur if and
when the first of the following occurs: |
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(i) |
the acquisition (other than from the Company), by any person (as such term is defined in Section 13(c) or 14(d) of the Securities Exchange Act of 1934, as amended (the 1934 Act)) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the 1934 Act) of fifty percent (50%) or more of the combined voting power of the Companys then outstanding voting securities; |
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(ii) |
the individuals who, as of the date hereof, are members of the Board (the Incumbent Board), cease for any reason to constitute at least a majority of the Board, unless the election, or nomination for
election by the Companys shareholders, of any new director was approved by a vote of at least a majority of the Incumbent Board, and such new director shall, for purposes of this letter, be considered as a member of the Incumbent Board;
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(iii) |
the closing of an amalgamation or similar business combination (each, an Amalgamation) involving the Company if (i) the shareholders
of the Company, immediately before such Amalgamation, do not, as a result of such Amalgamation, |
June 10, 2015
Robert Rosiello
Page 4 of 10
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own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting securities of the entity resulting from such Amalgamation in
substantially the same proportion as their ownership of the combined voting power of the voting securities of the Company outstanding immediately before such Amalgamation or (ii) immediately following the Amalgamation, the individuals who
comprised the Board immediately prior thereto do not constitute at least a majority of the board of directors of the entity resulting from such Amalgamation (or, if the entity resulting from such Amalgamation is then a subsidiary, the ultimate
parent thereof); or |
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(iv) |
a complete liquidation or dissolution of the Company or the closing of an agreement for the sale or other disposition of all or substantially all of the assets of the Company. |
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur pursuant to this letter agreement, solely because fifty percent
(50%) or more of the combined voting power of the Companys then outstanding securities is acquired by (i) a trustee or other fiduciary holding securities under one or more employee benefit plans maintained by the Company or any of
its subsidiaries or (ii) any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the shareholders of the Company in the same proportion as their ownership of shares in the Company immediately prior to
such acquisition. In addition, notwithstanding the foregoing, solely to the extent required by Section 409A, a Change of Control shall be deemed to have occurred only if a change in the ownership or effective control of the Company or a change
in ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Section 409A.
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Disability. The Company may terminate your employment, on written notice to you after having established your Disability and while you remain Disabled, subject to the payment by the Company to you of the
applicable compensation and benefits provided pursuant to this letter agreement. For purposes of this letter agreement, Disability shall have the meaning assigned to such term in the 2014 Omnibus Incentive Plan. |
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Cause. The Company may terminate your employment for Cause, subject to the payment by the Company to you of the applicable
compensation and benefits provided in this letter agreement. Cause shall mean, for purposes of this letter, cause as defined by applicable common law and (1) conviction of any felony or indictable offense (other than one
related to a vehicular offense) or other criminal act involving fraud; (2) willful misconduct that results in a material economic detriment to the Company; (3) material violation of Company policies and directives, which is not cured after
written notice and a reasonable opportunity for cure; (4) continued refusal by you to perform your duties after written notice identifying the deficiencies and a reasonable opportunity for cure; or (5) a material violation by you of any
material covenants to the Company. No action or inaction shall be, or be deemed to be, willful if not demonstrably willful and if taken or not taken by you in good faith |
June 10, 2015
Robert Rosiello
Page 5 of 10
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and with the understanding that such action or inaction was not adverse to the best interests of the Company. Reference in this paragraph to the Company shall also include direct and indirect
subsidiaries of the Company, and materiality shall be measured based on the action or inaction and the impact upon the Company taken as a whole. The Company may suspend you, with pay, upon your indictment for the commission of a felony or indictable
offense as described under clause (1) above. Such suspension may remain effective until such time as the indictment is either dismissed or a verdict of not guilty has been entered. |
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Employee and Executive Benefits. You will be eligible to participate in the employee benefit plans and programs generally made available to similarly situated employees of the Company on the terms and
conditions applicable generally to all employees. During your employment with the Company, the Company shall provide you with (or reimburse you for the cost of) term life insurance in the face amount of $20,000,000, subject to your insurability and
you taking steps reasonably requested by the Company to obtain such insurance, if required. In addition, the Company shall reimburse you for incremental taxes incurred by you outside of the United States because of any services you provide to
the Company outside of the United States or any business that the Company conducts outside of the United States, if such incremental amount during any tax year exceeds 1% or more of your average base salary for such tax year. You
shall be required to participate in any tax equalization program the Company may have in effect from time to time in order to qualify for the benefit described in the preceding sentence. |
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Conditions to Reimbursement. The following provisions shall be in effect for any reimbursements (and in-kind benefits) to which you otherwise may become entitled under this letter, in order to assure that
such reimbursements (and in-kind benefits) do not create a deferred compensation arrangement subject to Section 409A of the Internal Revenue Code (Section 409A): |
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(i) |
The amount of reimbursements (or in-kind benefits) to which you may become entitled in any one calendar year shall not affect the amount of expenses eligible for reimbursement (or in-kind benefits) hereunder in any
other calendar year. |
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(ii) |
Each reimbursement to which you become entitled shall be made by the Company as soon as administratively practicable following your submission of the supporting documentation, but in no event later than the close of
business of the calendar year following the calendar year in which the reimbursable expense is incurred. |
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(iii) |
Your right to reimbursement (or in-kind benefits) cannot be liquidated or exchanged for any other benefit or payment. |
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At-Will Employment. Your employment with the Company is at will. This means that you or the Company have the option to
terminate your employment at any time, with or without advance notice, and with or without Cause or with or without Good Reason. This letter of employment does not constitute an express or implied agreement of continuing or long term employment. The
at will nature of your |
June 10, 2015
Robert Rosiello
Page 6 of 10
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employment can be altered only by a written agreement specifying the altered status of your employment. Such written agreement must be signed by both you and the Chief Executive Officer.
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Severance Benefits. Notwithstanding the immediately preceding bullet paragraph, if your employment is terminated by the Company without Cause or by you for Good Reason, the Company shall have the following
obligations: |
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(i) |
The Company will pay you an amount equal to the sum of (A) your annual salary as of the Termination Date, plus (B) your annual target bonus as of the Termination Date, provided that, if your termination occurs
either in contemplation of a Change in Control or at any time within twelve (12) months following a Change in Control, the Company shall instead pay you an amount equal to two times the sum of (A) your annual salary as of the Termination
Date, plus (B) your annual target bonus as of the Termination Date. The Termination Date shall be the date specified as the effective date of the termination of your employment in any notice of termination of employment provided by
the Company to you or accepted by the Company in the event of your giving notice of the termination of your employment. |
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(ii) |
The Company will pay you any accrued but unpaid salary or vacation pay and any deferred compensation. In addition, the Company will pay you any bonus earned but unpaid in respect of any fiscal year preceding the
Termination Date. The Company will also pay you a bonus in respect of the fiscal year in which the Termination Date occurs, as though you had continued in employment until the payment of bonuses by the Company to its executives for such fiscal year,
in an amount equal to the product of (A) the lesser of (x) the bonus that you would have been entitled to receive based on actual achievement against the stated performance objectives or (y) the bonus that you would have been entitled
to receive assuming that the applicable performance objectives for such fiscal year were achieved at target, and (B) a fraction (i) the numerator of which is the number of days in such fiscal year through Termination Date and
(ii) the denominator of which is 365; provided that, if your termination occurs either in contemplation of a Change in Control or at any time within twelve (12) months following a Change in Control, then in the foregoing calculation the
amount under (A) shall be equal to (y). Any bonus payable to you under this bullet shall be paid in no event later than March 15 of the calendar year following the calendar year in which the Termination Date occurs. |
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(iii) |
The Company will provide you with continued coverage under any health, medical, dental or vision program or policy in which you were eligible to participate at the time of your employment termination for 12 months
following such termination on terms no less favorable to you and your dependents (including with respect to payment for the costs thereof) than those in effect immediately prior to such termination. |
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(iv) |
The Company shall provide outplacement services through one or more outside firms of your choosing up to an aggregate of $20,000, which services shall extend until the earlier of (i) 12 months following the
Termination Date or (ii) the date that you secure full time employment. |
June 10, 2015
Robert Rosiello
Page 7 of 10
Notwithstanding anything herein to the contrary, the Company shall have no obligation to pay
or provide any of the severance benefits referenced or set forth in this letter and shall have no obligations to you in respect of the termination of your employment save and except for obligations that are expressly established by applicable
employment standards legislation unless you execute and deliver, within 45 days of the date of your termination, and do not revoke, a general release in form satisfactory to the Company and any revocation period set forth in the release has lapsed.
Subject to compliance with Section 409A, the Company shall pay all cash severance benefits due within 10 business days following the satisfaction of all of the conditions set forth in the preceding sentence. You shall not be required to
mitigate the amount of any severance payment provided for under this letter by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to you in any subsequent
employment.
Notwithstanding anything herein to the contrary, in no event shall the timing of your execution of the general release,
directly or indirectly, result in you designating the calendar year of payment, and if a payment that is subject to execution of the general release could be made in more than one taxable year, payment shall be made in the later taxable year.
It is understood that, during your employment by the Company, you will not engage in any activities that constitute a conflict of interest with
the interests of the Company, as outlined in the Companys conflict of interest policies for employees and executives in effect from time to time.
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Covenant Not to Solicit. To protect the confidential information and other trade secrets of the Company and its affiliates, you agree, during your employment with the Company or any of its affiliates and
for a period of twelve (12) months after your cessation of employment with the Company or any of its affiliates, not to solicit, attempt to solicit, or participate in or assist in any way in the solicitation or attempted solicitation of any
employees or independent contractors of the Company or any of its affiliates. For purposes of this covenant, solicit or solicitation means directly or indirectly influencing or attempting to influence employees of the Company
or any of its affiliates to become employed with any other person, partnership, firm, corporation or other entity. You agree that the covenants contained in this paragraph are reasonable and necessary to protect the confidential information and
other trade secrets of the Company and its affiliates, provided, that solicitation through general advertising or the provision of references shall not constitute a breach of such obligations. For purposes of this paragraph, an affiliate
shall mean any direct or indirect subsidiary of the Company or any joint venture or collaboration in which any such entity or the Company participates. |
June 10, 2015
Robert Rosiello
Page 8 of 10
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Remedies for Breach of Obligations Under the Covenants Not to Solicit Above. It is the intent and desire of you and the Company (and its affiliates) that the restrictive provisions in the paragraph
captioned Covenant Not to Solicit above be enforced to the fullest extent permissible under the laws and public policies as applied in each jurisdiction in which enforcement is sought. If any particular provision in such paragraph shall
be determined to be invalid or unenforceable, such covenant shall be amended, without any action on the part of either party hereto, to delete therefrom the portion so determined to be invalid or unenforceable, such deletion to apply only with
respect to the operation of such covenant in the particular jurisdiction in which such adjudication is made. Your obligations under the two preceding paragraphs shall survive the termination of your employment with or any other employment
arrangement with the Company or any of its affiliates. You acknowledge that the Company or its affiliates will suffer irreparable injury, not readily susceptible of valuation in monetary damages, if you breach your obligations under the paragraph
captioned Covenant Not to Solicit above. Accordingly, you agree that the Company and its affiliates will be entitled, in addition to any other available remedies, to obtain injunctive relief against any breach or prospective breach by
you of your obligations under either such paragraph in any Federal or state court sitting in the State of New Jersey, or, at the Companys (or its affiliates) election, in any other state or jurisdiction in which you maintain your
principal residence or your principal place of business. You agree that the Company or its affiliates may seek the remedies described in the preceding sentence notwithstanding any arbitration or mediation agreement that you may enter into with the
Company or any of its affiliates. You hereby submit to the non-exclusive jurisdiction of all those courts for the purposes of any actions or proceedings instituted by the Company or its affiliates to obtain that injunctive relief, and you agree that
process in any or all of those actions or proceedings may be served by registered mail, addressed to the last address provided by you to the Company or its affiliates, or in any other manner authorized by law. |
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Indemnification. You shall be indemnified by the Company as provided in its articles or, if applicable, pursuant to an indemnification agreement with the Company if such agreements are provided to
similarly situated executives. |
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Section 409A. The parties intend for the payments and benefits under this letter to be exempt from Section 409A or, if not so
exempt, to be paid or provided in a manner which complies with the requirements of such section, and intend that this letter shall be construed and administered in accordance with such intention. Any payments that qualify for the short-term
deferral exception or another exception under Section 409A shall be paid under the applicable exception. For purposes of the limitations on nonqualified deferred compensation under Section 409A, each payment of compensation under
this letter shall be treated as a separate payment of compensation. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that
would otherwise be payable and benefits that would otherwise be provided pursuant to this letter during the six-month period immediately following your separation from service shall instead be paid on the first business day after the date that is
six months following your Termination Date (or death, if earlier), |
June 10, 2015
Robert Rosiello
Page 9 of 10
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with interest from the date such amounts would otherwise have been paid at the short-term applicable federal rate, compounded semi-annually, as determined under Section 1274 of the Internal
Revenue Code of 1986, as amended, for the month in which payment would have been made but for the delay in payment required to avoid the imposition of an additional rate of tax on you under Section 409A. |
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Withholding Taxes. All payments to you or your beneficiary under this letter agreement shall be subject to withholding on account of federal, state and local taxes as required by law. |
You acknowledge that you have, reviewed, agreed, signed and returned the Companys customary on-boarding documentation.
Policies of the Company will govern any other matter not specifically covered by this letter.
Except as specifically described in the following sentence, the terms of this letter constitute the entire agreement between the Company and you with respect
to the subject matter hereof, superseding all prior agreements and negotiations. This letter is governed by the laws of the State of New Jersey. All currency amounts set forth in the letter agreement refer to U.S. dollars.
This letter and the documents referenced herein are the full, complete and exclusive agreement between you and the Company regarding all of the subjects
covered by this letter, and supersede in their entirety any other written or verbal agreement between you and the Company.
June 10, 2015
Robert Rosiello
Page 10 of 10
As confirmation of acceptance of this letter agreement, please sign this letter indicating your agreement and
acceptance of the terms and conditions of employment. In addition, please mail the original signed letter in the envelope provided. A duplicate copy of this letter is included for your records.
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Sincerely, |
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Valeant Pharmaceuticals International, Inc. |
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By: |
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/s/ J. Michael Pearson |
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J. Michael Pearson |
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Chief Executive Officer |
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/s/ Robert Rosiello |
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Robert Rosiello |
Exhibit 10.2
SEPARATION AGREEMENT
SEPARATION AGREEMENT dated the 14 day of July, 2015 between Valeant Pharmaceuticals International, Inc. (Valeant) and
Howard B. Schiller (Mr. Schiller and together with Valeant, the Parties).
WHEREAS, Mr. Schiller
served as Valeants Executive Vice President and Chief Financial Officer pursuant to an agreement entered into on November 10, 2011 (the 2011 Agreement);
WHEREAS, Mr. Schiller voluntary resigned from his employment with Valeant, and ceased to serve as Valeants Executive Vice
President and Chief Financial Officer, effective as of the Termination Date (as defined below);
WHEREAS, the Parties have agreed
that Mr. Schiller will serve as a consultant to Valeant during the Consulting Period (as defined below);
WHEREAS, in
connection with his ceasing to serve as Valeants Executive Vice President and Chief Financial Officer and his continuing service as a consultant to Valeant, Valeant has agreed to provide Mr. Schiller with certain payments and benefits;
and
WHEREAS, Valeant and Mr. Schiller desire to enter into this Separation Agreement (this Agreement) to set
forth the Parties agreement as to Mr. Schillers entitlements and continuing obligations in connection with his termination of employment with Valeant and service as a consultant to Valeant.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency whereof is hereby acknowledged, the Parties hereto agree as follows:
1. |
Capitalized Terms. Unless otherwise defined herein, capitalized terms shall have the meaning set forth in the 2011 Agreement. |
2. |
Termination Date. The Parties agree that June 30, 2015 was the last day of Mr. Schillers employment with Valeant (the Termination Date) and that Mr. Schillers service as
Valeants Executive Vice President and Chief Financial Officer terminated as of the Termination Date. Effective as of the Termination Date, Mr. Schiller resigned from all positions he held as an officer, director, benefit plan trustee or
otherwise with respect to Valeant and its subsidiaries, other than his role as a member of Valeants board of directors. Mr. Schiller became eligible to receive compensation as a non-employee director of Valeant following the Termination
Date in accordance with Valeants non-employee director compensation program as then in effect, pro-rated for any portion of the year for which he did not qualify as a non-employee director. It is intended that the Termination Date shall
constitute Mr. Schillers separation from service within the meaning of Section 409A of the Internal Revenue Code (Section 409A). |
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(a) |
For a period beginning on July 1, 2015 and expiring on January 31, 2016 (the Consulting Period), Mr. Schiller agrees to make himself reasonably available to consult with Valeant as reasonably
requested by Valeant from time to time (the Services), provided that it is the intent that such consulting services shall not exceed twenty percent (20%) of the average level of services that Mr. Schiller performed during the
three year period prior to July 1, 2015. Valeant may terminate the Services by written notice at any time prior to the end of the Consulting Period. |
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(b) |
In exchange for the Services performed hereunder, Valeant agrees to pay Mr. Schiller $2,500.00 per month. Valeant shall reimburse Mr. Schiller for any reasonable and documented out of pocket travel and meal
expenses incurred by Mr. Schiller in providing the Services, provided that they are consistent with Valeants travel policy applicable to non-CEO executives of Valeant and that appropriate proof of expenditure is provided. The fee for the
Services shall be paid within forty-five (45) days following the last day of each calendar month during the Consulting Period, with the last payment due within forty-five (45) days following the termination or expiration of the Consulting
Period. |
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(c) |
In all matters relating to the Services, Mr. Schiller shall be acting as an independent contractor. Neither Mr. Schiller, nor any affiliated employees or subcontractors, shall be the agent(s) or employee(s) of
Valeant under the meaning or application of any federal or state laws, including but not limited to unemployment insurance or workers compensation laws. Mr. Schiller will be solely responsible for all income, business or other taxes
imposed on the recipient and payable as a result of the fees paid for the Services. Mr. Schiller shall not sign any agreement or make any commitments on behalf of Valeant, or bind Valeant in any way, nor shall Mr. Schiller make any public
statements concerning the Services that purport to be on behalf of Valeant, in each case without prior express written consent from Valeant. |
4. |
Remuneration Upon Termination. The Parties acknowledge that in connection with Mr. Schillers termination of employment with Valeant on the Termination Date, he became entitled to any accrued but unpaid
salary or vacation pay, payable in accordance with Valeants policies with respect to such remuneration. |
5. |
Treatment of Outstanding Equity Awards Upon Termination. Any equity compensation awards held by Mr. Schiller that were unvested as of the Termination Date immediately terminated, except as specifically set
forth below: |
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(a) |
subject to Mr. Schiller executing the general release of claims attached hereto as Annex A (the Release), within 60 days following
the Termination Date, and the applicable seven (7) calendar day revocation period expiring (the date upon which such revocation expires being referred to hereinafter as the Effective Date) and Mr. Schiller providing the
Services as reasonably requested by Valeant during the |
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Consulting Period, any stock options held by Mr. Schiller shall remain outstanding and stock options which were unvested as of the Termination Date shall continue to vest during the
Consulting Period in accordance with their existing terms. Upon the expiration or termination of the Consulting Period, any stock options that are unvested shall immediately terminate; provided however that, if the Consulting Period is terminated by
Valeant other than for Cause (as defined in the 2011 Agreement) prior to January 31, 2016, any such stock options that would have vested on or prior to January 31, 2016 shall vest in full as of immediately prior to the termination of the
Consulting Period. Any outstanding stock options that are vested as of the expiration or termination of the Consulting Period (including stock options that vest in accordance with the prior sentence) shall remain exercisable for ninety
(90) days following the later of (i) the expiration or termination of the Consulting Period and (ii) Mr. Schiller ceasing to serve as a member of Valeants board of directors (but, in either case, in no event beyond the
expiration of the original term of the applicable stock option; provided, however if the stock option would otherwise expire under the terms of this Section 5(a) during a period self-imposed by Valeant (within the meaning of Section 613(m)
of the TSX Company Manual) when Mr. Schiller is prohibited from trading in the Companys securities (a Blackout Period). the term of such stock option shall be extended until the tenth business day following the end of the
Blackout Period, at which time any unexercised portion of the stock option shall expire); |
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(b) |
subject to the occurrence of the Effective Date and Mr. Schiller providing the Services as reasonably requested by Valeant during the Consulting Period, any matching share units held by Mr. Schiller which were
unvested as of the Termination Date shall remain outstanding and continue to vest during the Consulting Period and shall be settled (less any amount withheld in respect of any applicable withholding taxes) as soon as practicable (but in any event no
later than March 15, 2016) following the vesting date of such matching share units. Upon the expiration or termination of the Consulting Period, any matching share units that are unvested shall immediately terminate; provided however that, if
the Consulting Period is terminated by Valeant other than for Cause prior to January 31, 2016, any such matching share units that would have vested on or prior to January 31, 2016 shall vest in full as of immediately prior to the
termination of the Consulting Period; and |
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(c) |
subject to the occurrence of the Effective Date, Mr. Schiller executing the general release of claims attached hereto as Annex B (the
Second Release) within ten (10) days following the earlier to occur of the events described in clauses (i) and (ii) below (the date upon which the Second Release is executed being referred to hereinafter as the
Second Effective Date), and Mr. Schiller providing the Services as reasonably requested by Valeant during the Consulting Period, any performance restricted share units held by Mr. Schiller which were unvested as of the
Termination Date shall remain outstanding during the Consulting Period and shall vest upon the earlier of (i) the expiration or termination of the Consulting Period (including by reason of Mr. Schillers death or disability (as
defined in the |
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2011 Agreement)) and (ii) any qualifying vesting event under the terms of the applicable performance restricted share award agreement. Notwithstanding anything to the contrary in the
applicable award agreement or plan, outstanding performance restricted share units that vest in accordance with the terms of this Section 5(c) shall be settled in the form of 100,000 common shares of Valeant (less any amount withheld in respect
of any applicable withholding taxes) as soon as practicable following the Second Effective Date (but in any event no later than March 15, 2016). |
6. |
Covenant Not to Solicit and Not to Compete. |
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(a) |
To protect the confidential information and other trade secrets of Valeant and its affiliates, Mr. Schiller hereby agrees, through January 31, 2017, not to solicit, attempt to solicit, or participate in or
assist in any way in the solicitation or attempted solicitation of any employees or independent contractors of Valeant or any its affiliates. For purposes of this covenant, solicit or solicitation means directly or indirectly
influencing or attempting to influence employees of Valeant or any of its affiliates to become employed with any other person, partnership, firm, corporation or other entity, provided that solicitation through general advertising or the provision of
references shall not constitute a breach of such obligations. |
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(b) |
To protect the confidential information and other trade secrets of Valeant and its affiliates, Mr. Schiller hereby agrees, through January 31, 2017, not to engage in prohibited activities (as
defined below) in any country in which Valeant conducts business or plans to conduct business as of the Termination Date. For purposes of this covenant, prohibited activities means directly or indirectly engaging as an owner, director,
employee, consultant or agent of any entity that develops, manufactures, markets and/or distributes (directly or indirectly) consumer products, branded or generic prescription or non-prescription pharmaceuticals or medical devices for treatments in
the fields of neurology, dermatology, oncology, ophthalmology/eye health, hepatology, or the treatment or prevention of gastro-intestinal conditions or diseases; provided that prohibited activities shall not mean Mr. Schillers
investment in securities of a publicly-traded company equal to less than five (5%) percent of such companys outstanding voting securities and provided further that passive ownership of equity in private or public companies shall not be a
violation of this section if owned through private equity firms, other comingled accounts or discretionary accounts so long as Mr. Schiller has no involvement in the investment or discretion in the selection of the investment.
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(c) |
Mr. Schiller agrees that the covenants contained in this Section 6 are reasonable and necessary to protect the confidential information and other trade secrets of Valeant and its affiliates. For the purposes
of this Section, an affiliate shall mean any direct or indirect subsidiary of Valeant or any joint venture or collaboration in which any such entity or Valeant participates. |
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(d) |
It is the intent and desire of Mr. Schiller and Valeant (and its affiliates) that the restrictive provisions in this subsection be enforced to the fullest extent permissible under the laws and public policies as
applied in each jurisdiction in which enforcement is sought. If any particular provision in this Section shall be determined to be invalid or unenforceable, such covenant shall be amended, without any action on the part of either Party, to delete
therefrom the portion so determined to be invalid or unenforceable, such deletion to apply only with respect to the operation of such covenant in the particular jurisdiction in which such adjudication is made. Mr. Schiller acknowledges that
Valeant or its affiliates will suffer irreparable injury, not readily susceptible of valuation in monetary damages, if Mr. Schiller breaches his obligations under this subsection. Accordingly, Mr. Schiller agree that Valeant and its
affiliates will be entitled, in addition to any other available remedies, to obtain injunctive relief against any breach or prospective breach by Mr. Schiller of his obligations under this subsection in any Federal or state court sitting in the
State of New Jersey, or, at Valeants (or its affiliates) election, in any other state or jurisdiction in which Mr. Schiller maintains his principal residence or his principal place of business. Mr. Schiller agrees that Valeant
or its affiliates may seek the remedies described in the preceding sentence notwithstanding any arbitration or mediation agreement that Mr. Schiller may enter into with Valeant or any of its affiliates. Mr. Schiller hereby submits to the
non-exclusive jurisdiction of all those courts for the purposes of any actions or proceedings instituted by Valeant or its affiliates to obtain that injunctive relief, and Mr. Schiller agrees that process in any or all of those actions or
proceedings may be served by overnight courier (including FedEx), addressed to the last address provided by Mr. Schiller to Valeant, or in any other manner authorized by law. |
7. |
Confidentiality. Mr. Schiller will not disclose to, or use for the benefit of, any third party any confidential information other than in the good faith performance of his duties for Valeant. For purposes of
this covenant, confidential information means any information about Valeant or any of its affiliates, their clients, directors, officers, employees, consultants or other similar personnel which is not known or available publicly or
generally within the pharmaceutical industry, including, but not limited to, information relating to business operations, including customer and supply lists, customer files, marketing data, business plans, strategies, compensation terms, employee
lists, contracts, financial records and accounts, products in development, product plans, projections and budgets, and similar information. Anything herein to the contrary notwithstanding, the provisions of this Section shall not apply (i) when
disclosure is required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) of competent jurisdiction to order Mr. Schiller to disclose or make accessible any information, or
(ii) as to information that is or becomes available to Mr. Schiller on a non-confidential basis from a source outside of Valeant and such source does not breach any confidentiality or other obligation in making such disclosure to
Mr. Schiller. Mr. Schiller may retain his address books provided they contain only contact information. |
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8. |
Non-Disparagement. Mr. Schiller agrees not to make written or oral statements about Valeant, its subsidiaries or affiliates, or its directors, executive officers or non-executive officer employees that are
negative or disparaging. Valeant shall require its directors and executive officers not to make written or oral statements about Mr. Schiller that are negative or disparaging. Notwithstanding the forgoing, nothing in this Agreement shall
preclude (a) either Party (and, in the case of Valeant, its directors, executive officers, and non-executive officer employees) from communicating or testifying truthfully to the extent required by law to any federal, state, provincial or local
governmental agency or in response to a subpoena to testify issued by a court of competent jurisdiction, (b) Mr. Schiller, if after consulting with Valeant it is determined in good faith by Mr. Schiller that a false or misleading
statement concerning Mr. Schiller has been made by a director, executive officer or non-executive officer employee, from making statements specifically to rebut any such false or misleading statements made by such director, officer or employee,
or (c) Valeants directors, executive officers or non-executive officer employees, if after consulting with Mr. Schiller it is determined in good faith by such director, officer or employee that a false or misleading statement
concerning such director, officer or employee has been made by Mr. Schiller, from making statements specifically to rebut any such false or misleading statements made by Mr. Schiller. |
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(a) |
During the eighteen (18) month period following the Termination Date, Mr. Schiller agrees to make himself reasonably available (after taking into account his personal and professional schedule) to cooperate
with Valeant and its affiliates in matters that materially concern: (i) requests for information about the services Mr. Schiller provided to Valeant, its affiliates and their predecessors during his employment with Valeant, its affiliates
and their predecessors, (ii) the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of Valeant, its affiliates and their predecessors which relate to events or occurrences
that transpired while Mr. Schiller was employed by Valeant, its affiliates or their predecessors or (iii) any investigation or review by any federal, state or local regulatory, quasi-regulatory or self-governing authority (including,
without limitation, the US Department of Justice, the US Federal Trade Commission or the US Securities and Exchange Commission) as any such investigation or review relates to events or occurrences that transpired while Mr. Schiller was employed
by Valeant, its affiliates and their predecessors. Mr. Schillers cooperation shall include: (A) making himself reasonably available to meet and speak with officers or employees of Valeant, Valeants counsel or any third-parties
at the request of Valeant at times and locations to be determined by Valeant reasonably and in good faith, taking into account Mr. Schillers business and personal needs and (B) giving accurate and truthful information at any
interviews and accurate and truthful testimony in any legal proceedings or actions. Unless required by law or legal process, Mr. Schiller will not knowingly or intentionally furnish information to or cooperate with any non-governmental entity
(other than Valeant) in connection with any potential or pending proceeding or legal action involving matters arising during Mr. Schillers employment with Valeant, its affiliates and their predecessors. |
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(b) |
If Valeant requests services pursuant this Section, Mr. Schiller shall not be entitled to any payments above those set forth in this Agreement; provided, however, that Valeant will reimburse Mr. Schiller for
any reasonable, out-of-pocket travel, hotel and meal expenses incurred in connection with Mr. Schillers performance of obligations pursuant to this Section for which Mr. Schiller has obtained prior approval from Valeant.
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(c) |
If Mr. Schiller reasonably determines that he should be represented by counsel in connection with any matter described in this Section, he shall be represented by counsel selected by Valeant, which may be (at
Valeants election) the same counsel representing Valeant or its affiliates in such matter unless Mr. Schiller reasonably determines that he should be separately represented due to Valeants counsel having an actual conflict of
interest, in which case Valeant shall agree to, and shall, pay the reasonable costs and expenses of separate counsel selected by Valeant in consultation with Mr. Schiller for matters with respect to which Mr. Schiller is cooperating with
Valeant pursuant to this Section. |
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(d) |
Nothing in this Agreement, the 2011 Agreement, or any other agreement by and between the Parties is intended to or shall preclude or in any way limit or restrict Mr. Schiller from providing accurate and truthful
testimony in response to a valid subpoena, court order, regulatory or governmental request or other judicial, administrative or legal process or otherwise as required by law (in the case of formal legal process) in which event Mr. Schiller
shall notify Valeant in writing as promptly as practicable after receiving any such request of the anticipated testimony and at least ten (10) days prior to providing such testimony (or, if such notice is not possible under the circumstances,
with as much prior notice as is possible). |
10. |
Other Valeant Policies. Mr. Schiller agrees that he shall continue to be bound by and comply with the terms of his confidentiality obligations to Valeant, the Standards of Business Conduct and any other
policies of Valeant and its affiliates that survive termination of employment. |
11. |
Indemnification. From and after the date hereof, Mr. Schiller shall be indemnified by Valeant as provided in its articles, director and officer indemnification policies, and any other indemnification
policies or plans in effect and applicable to directors or non-CEO executives of Valeant, including with respect to Mr. Schillers actions or inactions prior to the date hereof. |
12. |
Section 409A; Other Tax Matters. The Parties intend for the payments and benefits under this Agreement to be exempt from Section 409A
or, if not so exempt, to be paid or provided in a manner which complies with the requirements of such section, and intend that this Agreement shall be construed and administered in accordance with such intention. Any payments that qualify for the
short-term deferral exception or another exception under Section 409A shall be paid under the applicable exception. For purposes of the limitations on nonqualified deferred compensation under Section 409A, each payment of
compensation under this Agreement shall be treated as a separate payment of |
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compensation. To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise
be provided pursuant to this Agreement during the six (6) month period immediately following Mr. Schillers separation from service shall instead be paid on the first business day after the date that is six (6) months following
his termination of employment (or upon his death, if earlier). Notwithstanding any other provision of this Agreement, Valeant may withhold from amounts payable under this Agreement all amounts that are required or authorized to be withheld,
including, but not limited to, federal, state, local and foreign taxes required to be withheld by applicable laws or regulations. |
13. |
Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New Jersey, without regard to the application of any choice-of-law rules that would result in the
application of another states laws. |
14. |
Entire Agreement. This Agreement sets forth the entire agreement between Mr. Schiller and Valeant concerning the termination of Mr. Schillers employment and his service as a consultant to Valeant,
and supersedes any other written or oral promises concerning the subject matter of this Agreement, including, without limitation, those set forth in the 2011 Agreement. No waiver or amendment of this Agreement will be effective unless it is in
writing, refers to this Agreement, and is signed by Mr. Schiller and Valeants Chief Executive Officer. |
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.
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VALEANT PHARMACEUTICALS |
INTERNATIONAL, INC. |
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By: |
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/s/ J. Michael Pearson |
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J. Michael Pearson |
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/s/ Howard B. Schiller |
Howard B. Schiller |
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ANNEX A
General Waiver & Release
This Legal Release (Release) dated as of the last date executed below (the Release Date) is between Valeant
Pharmaceuticals International, Inc. (Valeant) and Howard B. Schiller (Employee).
Employee Release.
Employee, on behalf of himself, and Employees heirs, executors, administrators, and/or assigns, does hereby RELEASE AND FOREVER DISCHARGE Valeant, together with its parents, subsidiaries, affiliates, predecessors, and successor
corporations and business entities, past, present and future, and its and their agents, directors, officers, employees, shareholders, insurers and reinsurers, and employee benefit plans (and the trustees, administrators, fiduciaries, agents,
insurers, and reinsurers of such plans) past, present and future, and their heirs, executors, administrators, predecessors, successors, and assigns (collectively, the RELEASEES), of and from any and all legally waivable claims,
causes of actions, suits, lawsuits, debts, promises, agreements and demands whatsoever in law or in equity, known or unknown, suspected or unsuspected, which Employee or which Employees heirs, executors administrators, or assigns hereafter
ever had, now have, or may have, from the beginning of time to the date Employee executes this Release arising out of or attributable to (i) Employees employment, consultancy, directorship or other service relationship with the Company or
any Releasees or the termination of such relationship or service or (ii) any event, condition, circumstance or obligation that occurred, existed or arose on or prior to the date of this Release relating to Valeant and its affiliates, in each
case, except as expressly set forth herein. This general waiver and release does not include any claims, causes of actions, suits, lawsuits, debts, and demands whatsoever in law or in equity, known or unknown, suspected or unsuspected which may come
into existence post the date of this Release.
The claims being waived and released include, without limitation:
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(a) |
any and all claims of violation of any foreign or United States federal, state, provincial and local law arising from or relating to Employees recruitment, hire, employment and termination of employment with
Valeant; |
|
(b) |
any and all claims of wrongful discharge, emotional distress, defamation, misrepresentation, fraud, detrimental reliance, breach of contractual obligations, promissory estoppel, negligence, assault and battery, and
violation of public policy; |
|
(c) |
all claims to disputed wages, compensation, and benefits, including any claims for violation of applicable state laws relating to wages and hours of work; |
|
(d) |
any and all claims for violation of any state or federal statute or regulation relating to termination of employment, unlawful discrimination,
harassment or retaliation under applicable federal, state and local constitutions, statutes, laws, and regulations (which includes, but is not limited to, the Age Discrimination in |
9
|
Employment Act, as amended (ADEA), Title VII of the Civil Rights Act of 1964, 42 U.S.C. 1981, the Employee Retirement Income Security Act (ERISA), the Family and Medical
Leave Act of 1993, the Americans with Disabilities Act, the Rehabilitation Act, the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the New Jersey Law Against Discrimination and Conscientious Employee Protection Act, the
California Fair Employment and Housing Act and the California Family Rights Act), the Ontario Employment Standards Act, 2000, Human Rights Code, and Workplace Safety and Insurance Act; and |
|
(e) |
any and all claims for monetary damages and any other form of personal relief. |
In waiving and
releasing any and all claims against the Releasees, whether or not now known to Employee, Employee understands that this means that, if Employee later discovers facts different from or in addition to those facts currently known by Employee,
or believed by Employee to be true, the waivers and releases of this Release will remain effective in all respects despite such different or additional facts and Employees later discovery of such facts, even if Employee would not have
agreed to this Release if Employee had prior knowledge of such facts.
Notwithstanding any provision of this Release to the contrary, by
executing this Release, Employee is not waiving and releasing any and all claims Employee may have for:
|
(a) |
unemployment, state disability and/or paid family leave insurance benefits pursuant to the terms of applicable state law; |
|
(b) |
continuation of existing participation in Valeant-sponsored group health benefit plans under the United States federal law known as COBRA and/or under any applicable state counterpart law; |
|
(c) |
any benefit entitlements that are vested as of the date of termination pursuant to the terms of a Valeant-sponsored benefit plan, policy or other arrangement, whether or not governed by the United States federal law
known as ERISA; |
|
(d) |
violation of any foreign or United States federal, state or local statutory and/or public policy right or entitlement that, by applicable law, is not waivable; |
|
(e) |
any claims, causes of actions, suits, lawsuits, debts, or demands whatsoever arising out of or relating to Employees right to enforce the terms of this Release and the Separation Agreement dated July 14, 2015
between Employee and Valeant (the Separation Agreement); and |
|
(f) |
any rights or claims for indemnification under any written agreements with any of the Releasees, the charter, by-laws or operating agreements of the Company, or under applicable law or the Employment Letter, dated
November 10, 2011 between Employee and Valeant (the Employment Letter) or any rights as an insured, or to coverage, under any directors and officers liability insurance policy; |
10
|
(g) |
any claims relating to Employees rights under the Employment Letter that are intended to survive the termination of Employees employment |
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(h) |
any wrongful act or omission occurring after the date Employee signs this Release and |
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(i) |
any rights relating to your ongoing service as a member of Valeants board of directors. |
Nothing in this Release shall prevent Employee from filing a charge with the Equal Employment Opportunity Commission (or similar state or
local agency) or participating in any investigation conducted by the Equal Employment Opportunity Commission (or similar state or local agency); provided, however, that Employee acknowledges and agrees that any claims by Employee for personal relief
in connection with such a charge or investigation (such as reinstatement or monetary damages) hereby are barred.
No
Admission. Nothing about the fact or content of this Release shall considered to be or treated by Employee or Valeant as an admission of any wrongdoing, liability or violation of law by Employee or by any Releasee.
Consideration & Revocation Periods; Effective Date. Employee acknowledges that (a) Valeant has advised him
in this writing of his right to consult with an attorney prior to signing this Release; (b) he has carefully read and fully understands all of the provisions of this Release, and (c) he is entering into this Release, including the releases
set forth herein, knowingly, freely and voluntarily in exchange for good and valuable consideration (including, but not limited to, the payments to be made under the Separation Agreement to which he would not be entitled in the absence of signing
this Release. Employee has twenty-one (21) calendar days to consider this Release, although Employee may sign it sooner, but not before June 30, 2015.
In addition, for the period of seven (7) calendar days after the date Employee signs this Release (7-day Revocation Period),
Employee may revoke it by delivering written notice of revocation to Valeant by hand-delivery or by facsimile or e-mail transmission using the street, facsimile or e-mail address for Valeant stated below.
Because of this 7-day Revocation Period, this Release will not become effective and enforceable until the eighth calendar day after the date
Employee signed it , provided that Employee has delivered Employees signed Release to Valeant, and Employee did not revoke the Release.
Delivery to Valeant. Employee should return this Release, signed by Employee (and any notice of revocation, if
applicable) to:
11
Valeant Pharmaceuticals International, Inc.
400 Somerset Corporate Boulevard
Bridgewater, NJ 08807
Attn:
General Counsel
Judicial Interpretation/Modification; Severability. In the event that this Release shall be held
to be void, voidable, unlawful or, for any reason, unenforceable, the Release shall be voidable at the sole discretion of Valeant.
Changes to Release. No changes to this Release can be effective except by another written agreement signed by Employee and by
Valeants Chief Executive Officer.
Complete Agreement. Except for the Separation Agreement, and any equity or other
employee benefit plans, programs or policies referenced herein or therein as surviving this Release, this Release, assuming it is executed and not revoked during the 7-day Revocation Period, cancels, supersedes and replaces any and all prior
agreements (written, oral or implied-in-fact or in-law) between Employee and Valeant regarding all of the subjects covered by this Release. This Release, together with the Separation Agreement and any equity or other employee benefit plans, programs
or policies referenced herein or therein as surviving this Release, is the full, complete and exclusive agreement between Employee and Valeant regarding all of the subjects covered by this Release and the Separation Agreement, and neither Employee
nor Valeant is relying on any representation or promise that is not expressly stated in this Release or the Separation Agreement.
12
I HAVE READ THIS RELEASE. I UNDERSTAND THAT I AM GIVING UP IMPORTANT RIGHTS. I AM AWARE OF MY RIGHT TO CONSULT
WITH AN ATTORNEY OF MY OWN CHOOSING DURING THE CONSIDERATION PERIOD, AND THAT VALEANT HAS ADVISED ME TO UNDERTAKE SUCH CONSULTATION BEFORE SIGNING THIS RELEASE. I SIGN THIS RELEASE FREELY AND VOLUNTARILY, WITHOUT DURESS OR COERCION.
13
ANNEX B
General Waiver & Release
This Legal Release (Release) dated as of the last date executed below (the Release Date) is between Valeant
Pharmaceuticals International, Inc. (Valeant) and Howard B. Schiller (Employee).
Employee Release.
Employee, on behalf of himself, and Employees heirs, executors, administrators, and/or assigns, does hereby RELEASE AND FOREVER DISCHARGE Valeant, together with its parents, subsidiaries, affiliates, predecessors, and successor
corporations and business entities, past, present and future, and its and their agents, directors, officers, employees, shareholders, insurers and reinsurers, and employee benefit plans (and the trustees, administrators, fiduciaries, agents,
insurers, and reinsurers of such plans) past, present and future, and their heirs, executors, administrators, predecessors, successors, and assigns (collectively, the RELEASEES), of and from any and all legally waivable claims,
causes of actions, suits, lawsuits, debts, promises, agreements and demands whatsoever in law or in equity, known or unknown, suspected or unsuspected, which Employee or which Employees heirs, executors administrators, or assigns hereafter
ever had, now have, or may have, from the beginning of time to the date Employee executes this Release arising out of or attributable to (i) Employees employment, consultancy, directorship or other service relationship with the Company or
any Releasees or the termination of such relationship or service or (ii) any event, condition, circumstance or obligation that occurred, existed or arose on or prior to the date of this Release, in each case, except as expressly set forth
herein. This general waiver and release does not include any claims, causes of actions, suits, lawsuits, debts, and demands whatsoever in law or in equity, known or unknown, suspected or unsuspected which may come into existence post the date of
this Release.
The claims being waived and released include, without limitation:
|
(a) |
any and all claims of violation of any foreign or United States federal, state, provincial and local law arising from or relating to Employees recruitment, hire, employment and termination of employment with
Valeant; |
|
(b) |
any and all claims of wrongful discharge, emotional distress, defamation, misrepresentation, fraud, detrimental reliance, breach of contractual obligations, promissory estoppel, negligence, assault and battery, and
violation of public policy; |
|
(c) |
all claims to disputed wages, compensation, and benefits, including any claims for violation of applicable state laws relating to wages and hours of work; |
|
(d) |
any and all claims for violation of any state or federal statute or regulation relating to termination of employment, unlawful discrimination,
harassment or retaliation under applicable federal, state and local constitutions, statutes, laws, and regulations (which includes, but is not limited to, Title VII of the Civil Rights Act
|
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of 1964, 42 U.S.C. 1981, the Employee Retirement Income Security Act (ERISA), the Family and Medical Leave Act of 1993, the Americans with Disabilities Act, the Rehabilitation Act,
the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the New Jersey Law Against Discrimination and Conscientious Employee Protection Act, the California Fair Employment and Housing Act and the California Family Rights Act), the
Ontario Employment Standards Act, 2000, Human Rights Code, and Workplace Safety and Insurance Act; and |
|
(e) |
any and all claims for monetary damages and any other form of personal relief. |
In waiving and
releasing any and all claims against the Releasees, whether or not now known to Employee, Employee understands that this means that, if Employee later discovers facts different from or in addition to those facts currently known by Employee,
or believed by Employee to be true, the waivers and releases of this Release will remain effective in all respects despite such different or additional facts and Employees later discovery of such facts, even if Employee would not have
agreed to this Release if Employee had prior knowledge of such facts.
Notwithstanding any provision of this Release to the contrary, by
executing this Release, Employee is not waiving and releasing any and all claims Employee may have for:
|
(a) |
unemployment, state disability and/or paid family leave insurance benefits pursuant to the terms of applicable state law; |
|
(b) |
continuation of existing participation in Valeant-sponsored group health benefit plans under the United States federal law known as COBRA and/or under any applicable state counterpart law; |
|
(c) |
any benefit entitlements that are vested as of the date of termination pursuant to the terms of a Valeant-sponsored benefit plan, policy or other arrangement, whether or not governed by the United States federal law
known as ERISA; |
|
(d) |
violation of any foreign or United States federal, state or local statutory and/or public policy right or entitlement that, by applicable law, is not waivable; |
|
(e) |
any claims, causes of actions, suits, lawsuits, debts, or demands whatsoever arising out of or relating to Employees right to enforce the terms of this Release and the Separation Agreement dated July 14, 2015
between Employee and Valeant (the Separation Agreement); and |
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(f) |
any rights or claims for indemnification under any written agreements with any of the Releasees, the charter, by-laws or operating agreements of the Company, or under applicable law or the Employment Letter, dated
November 10, 2011 between Employee and Valeant (the Employment Letter) or any rights as an insured, or to coverage, under any directors and officers liability insurance policy; |
15
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(g) |
any claims relating to Employees rights under the Employment Letter that are intended to survive the termination of Employees employment |
|
(h) |
any wrongful act or omission occurring after the date Employee signs this Release. |
Nothing in
this Release shall prevent Employee from filing a charge with the Equal Employment Opportunity Commission (or similar state or local agency) or participating in any investigation conducted by the Equal Employment Opportunity Commission (or similar
state or local agency); provided, however, that Employee acknowledges and agrees that any claims by Employee for personal relief in connection with such a charge or investigation (such as reinstatement or monetary damages) hereby are barred.
No Admission. Nothing about the fact or content of this Release shall considered to be or treated by Employee or Valeant
as an admission of any wrongdoing, liability or violation of law by Employee or by any Releasee.
Consideration Periods; Effective
Date. Employee acknowledges that (a) Valeant has advised him in this writing of his right to consult with an attorney prior to signing this Release; (b) he has carefully read and fully understands all of the provisions of
this Release, and (c) he is entering into this Release, including the releases set forth herein, knowingly, freely and voluntarily in exchange for good and valuable consideration (including, but not limited to, the payments to be made under the
Employment Letter, to which he would not be entitled in the absence of signing this Release. Employee has twenty-one (21) calendar days to consider this Release, although Employee may sign it sooner, but not before the last day of the
Consulting Period (as defined in the Separation Agreement).
Delivery to Valeant. Employee should return this
Release, signed by Employee to:
Valeant Pharmaceuticals International, Inc.
400 Somerset Corporate Boulevard
Bridgewater, NJ 08807
Attn:
General Counsel
Judicial Interpretation/Modification; Severability. In the event that this Release shall be held
to be void, voidable, unlawful or, for any reason, unenforceable, the Release shall be voidable at the sole discretion of Valeant.
Changes to Release. No changes to this Release can be effective except by another written agreement signed by Employee and by
Valeants Chief Executive Officer.
Complete Agreement. Except for the Separation Agreement, and any equity or other
employee benefit plans, programs or policies referenced herein or therein as surviving this Release, this Release, assuming it is executed, cancels, supersedes and replaces any and all prior agreements (written, oral or implied-in-fact or in-law)
between Employee and Valeant regarding
16
all of the subjects covered by this Release. This Release, together with the Separation Agreement and any equity or other employee benefit plans, programs or policies referenced herein or therein
as surviving this Release, is the full, complete and exclusive agreement between Employee and Valeant regarding all of the subjects covered by this Release and the Separation Agreement, and neither Employee nor Valeant is relying on any
representation or promise that is not expressly stated in this Release or the Separation Agreement.
17
I HAVE READ THIS RELEASE. I UNDERSTAND THAT I AM GIVING UP IMPORTANT RIGHTS. I AM AWARE OF MY RIGHT TO CONSULT
WITH AN ATTORNEY OF MY OWN CHOOSING DURING THE CONSIDERATION PERIOD, AND THAT VALEANT HAS ADVISED ME TO UNDERTAKE SUCH CONSULTATION BEFORE SIGNING THIS RELEASE. I SIGN THIS RELEASE FREELY AND VOLUNTARILY, WITHOUT DURESS OR COERCION.
18
Exhibit 10.3
EXECUTION VERSION
AMENDMENT NO. 11 TO THIRD AMENDED AND RESTATED CREDIT AND GUARANTY
AGREEMENT
AMENDMENT NO. 11 TO THIRD AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT, dated as of May 29, 2015 (this Amendment
No. 11), by and among VALEANT PHARMACEUTICALS INTERNATIONAL, INC., a corporation continued under the laws of the Province of British Columbia (Borrower), the Guarantors, BARCLAYS BANK PLC, as Administrative Agent
(Administrative Agent) and Collateral Agent under the Credit Agreement (as defined below), each of the financial institutions set forth on Schedule A annexed hereto (each a Repriced Term Loan Lender and
collectively the Repriced Term Loan Lenders), and each of the other Lenders that is a signatory hereto.
W I T N E S
S E T H:
WHEREAS, the Borrower, the Administrative Agent, the Guarantors party thereto from time to time and each lender from time
to time party thereto (the Lenders) have entered into a Third Amended and Restated Credit and Guaranty Agreement, dated as of February 13, 2012, as amended by Amendment No. 1, dated as of March 6, 2012, by Amendment
No. 2, dated as of September 10, 2012, by Amendment No. 3, dated as of January 24, 2013, by Amendment No. 4, dated as of February 21, 2013, by Amendment No. 5, dated as of June 6, 2013, by Amendment
No. 6, dated as of June 26, 2013, by Amendment No. 7, dated as of September 17, 2013, by Amendment No. 8, dated as of December 20, 2013, by the Successor Agent Agreement and Amendment No. 9, dated as of
January 8, 2015, by Amendment No. 10, dated as of March 5, 2015, as further supplemented by the Joinder Agreement, dated as of June 14, 2012, by the Joinder Agreement, dated as of July 9, 2012, by the Joinder Agreement,
dated as of September 11, 2012, by the Joinder Agreement, dated as of October 2, 2012, by the Joinder Agreement, dated as of December 11, 2012, by the Joinder Agreements, each dated as of August 5, 2013, by the Joinder
Agreements, each dated as of February 6, 2014, by the Joinder Agreements, each dated as of January 22, 2015 and by the Joinder Agreements, each dated as of April 1, 2015 (as the same may be further amended, restated, amended and
restated, supplemented or otherwise modified from time to time, the Credit Agreement) (capitalized terms not otherwise defined in this Amendment No. 11 have the same meanings as specified in the Credit Agreement);
WHEREAS, on the date hereof, the Borrower, the Administrative Agent and the Repriced Term Loan Lenders, constituting no less than the Lenders
required pursuant to Section 10.5 of the Credit Agreement (determined immediately prior to giving effect to this Amendment No. 11), desire to amend the Credit Agreement as described in this Amendment No. 11, (i) to re-price all
of the Borrowers Series D-2 Tranche B Term Loans, (ii) to amend certain other provisions of the Credit Agreement as set forth herein and (iii) to make certain other modifications as set forth herein;
WHEREAS, the Administrative Agent, the Collateral Agent, the Borrower, the Guarantors, the Repriced Term Loan Lenders (which shall constitute
the Lenders required pursuant to Section 10.5 of the Credit Agreement) are willing to so agree, subject to the conditions set forth herein;
WHEREAS, each Lender with a Series D-2 Tranche B Term Loan that executes and delivers a lender consent and election to this Amendment
No. 11 substantially in the form of Exhibit A hereto (a Lender Consent and Election) shall be deemed, upon effectiveness of this Amendment No. 11 to have consented to this Amendment No. 11 with respect to all of its
Series D-2 Tranche B Term Loans, as applicable; and
NOW, THEREFORE, in consideration of these premises and for other good and valuable
consideration, the sufficiency and receipt of all of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION
1. Amendment.
The Credit Agreement is, effective as of the Amendment No. 11 Effective Date (as
defined below), hereby amended pursuant to Section 10.5 of the Credit Agreement, to delete the stricken text (indicated textually in the same manner as the following example:
stricken text) and to add the double-underlined text (indicated textually in
the same manner as the following example: double-underlined text) as set
forth in the Credit Agreement attached as Exhibit B hereto.
SECTION 2. Representations and Warranties. By
its execution of this Amendment No. 11, each Credit Party hereby represents and warrants to the Agents and the Lenders that:
(a)
this Amendment No. 11 has been duly authorized, executed and delivered by it and constitutes a legal, valid and binding obligation of each Credit Party hereto, enforceable against such Credit Party in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other Laws affecting creditors rights generally and by general principles of equity;
(b) the execution, delivery and performance by the Credit Parties of this Amendment No. 11 and the other Credit Documents to which they
are parties and the consummation of the transactions contemplated by this Amendment No. 11 and the other Credit Documents do not and will not (i) violate (A) any provision of any Applicable Law, (B) any of the Organizational
Documents of the Borrower or any of its Subsidiaries, or (C) any order, judgment or decree of any court or other agency of government binding on the Borrower or any of its Subsidiaries, except with respect to clauses (A) and (C) to
the extent that such violation could not reasonably be expected to have a Material Adverse Effect; (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of
the Borrower or any of its Subsidiaries, except to the extent that such conflict, breach or default could not reasonably be expected to have a Material Adverse Effect; (iii) result in or require the creation or imposition of any Lien upon any
of the properties or assets of the Borrower or any of its Subsidiaries (other than any Liens created under any of the Credit Documents in favor of Collateral Agent, on behalf of the Secured Parties); or (iv) require any approval of
stockholders, members or partners or any approval or consent of any Person under any Contractual Obligation of the Borrower or any of its Subsidiaries, except for such approvals or consents which will be obtained on or before the Amendment
No. 11 Effective Date and disclosed in writing to the Lenders and except for any such approval or consent the failure of which to obtain could not reasonably be expected to have a Material Adverse Effect;
(c) each of the representations and warranties contained in Article 4 of the Credit Agreement is true and correct in all material respects as
of the Amendment No. 11 Effective Date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties are true and correct in all material respects on and as
of such earlier date (provided that representations and warranties that are qualified by materiality shall be true and correct in all respects); and
(d) no Default or Event of Default exists, or will result from the execution of this Amendment No. 11 and the transactions contemplated
hereby as of the Amendment No. 11 Effective Date.
-2-
SECTION 3. Effectiveness. This Amendment No. 11 shall become effective
on and as of the date (such date the Amendment No. 11 Effective Date) on which:
(a) this Amendment No. 11 shall have been executed and delivered by (A) the
Borrower, (B) the Guarantors, (C) the Repriced Term Loan Lenders constituting the Lenders required under Section 10.5 of the Credit Agreement and (D) the Administrative Agent;
(b) the Administrative Agent shall have received from the Borrower reimbursement for all
reasonable and invoiced out-of-pocket fees and expenses owed to the Administrative Agent in connection with this Amendment No. 11 and the transactions contemplated hereby, including the reasonable fees, charges and disbursements of counsel;
(c) the Administrative Agent shall have received an officers certificate from the
Borrower including a representation by a Responsible Officer that (i) no Default or Event of Default exists and is continuing on the date hereof and (ii) all representations and warranties contained in the Credit Agreement and in this
Amendment No. 11 are true and correct in all material respects on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in
all material respects as of such earlier date (provided that representations and warranties that are qualified by materiality shall be true and correct in all respects); and
(d) the Administrative Agent shall have received the following legal opinions and documents:
originally executed copies of the favorable written opinions of (i) Skadden, Arps, Slate, Meagher & Flom LLP, U.S. counsel to the Credit Parties, (ii) Chancery Chambers, special Barbados counsel to the Credit Parties,
(iii) Norton Rose Fulbright Canada LLP, special Canadian counsel to the Credit Parties, (iv) Baker & McKenzie, special Luxembourg counsel to the Credit Parties, (v) Conyers Dill & Pearman Limited, special Bermuda
counsel to the Credit Parties, (vi) Arthur Cox, special Ireland counsel to the Credit Parties, (vii) Venable LLP, special Maryland counsel to the Credit Parties, (viii) Souza, Cescon, Barrieu & Flesch Advogados, special
Brazil counsel to the Credit Parties, (ix) Squire Sanders Święcicki Krześniak sp.k., special Poland counsel to the Credit Parties, (x) Tark Grunte Sutkiene, special Lithuania counsel to the Credit Parties,
(xi) Allen & Overy LLP, special Netherlands counsel to the Administrative Agent, (xii) Rajah & Tann LLP, special Singapore counsel to the Credit Parties and (xiii) Stamford Law Corporation, special Singapore counsel
to the Administrative Agent, together with all other legal opinions and other documents reasonably requested by Administrative Agent in connection with this Amendment No. 11.
SECTION 4. Amendment, Modification and Waiver.
This Amendment No. 11 may not be amended, modified or waived except in accordance with Section 10.5 of the Credit Agreement.
SECTION 5. Reference to and Effect on the Credit Agreement and the Credit Documents.
On and after the Amendment No. 11 Effective Date, each reference in the Credit Agreement or any other Credit Document to this
Agreement, hereunder, hereof or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement, as amended by this Amendment No. 11.
SECTION 6. Entire Agreement.
-3-
This Amendment No. 11, the Credit Agreement and the other Credit Documents constitute the
entire agreement among the parties hereto with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and verbal, among the parties hereto with respect to the subject matter hereof.
Except as expressly set forth herein, this Amendment No. 11 shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of any party under, the Credit Agreement, nor alter, modify,
amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect. It is understood and
agreed that each reference in each Credit Document to the Credit Agreement, whether direct or indirect, shall hereafter be deemed to be a reference to the Credit Agreement as amended hereby and that this Amendment No. 11 is a Credit Document.
SECTION 7. Reaffirmation.
(a) Each Credit Party hereby expressly acknowledges the terms of this Amendment No. 11
and affirms or reaffirms, as applicable, as of the date hereof, the covenants and agreements contained in each Credit Document to which it is a party, including, in each case, such covenants and agreements as in effect immediately after giving
effect to this Amendment No. 11 and the transactions contemplated hereby.
(b) Each
Credit Party, by its signature below, hereby affirms and confirms (1) its obligations under each of the Credit Documents to which it is a party, and (2) the pledge of and/or grant of a security interest in its assets as Collateral to
secure such Obligations, all as provided in the Collateral Documents as originally executed, and acknowledges and agrees that such guarantee, pledge and/or grant continue in full force and effect in respect of, and to secure, such Obligations under
the Credit Agreement and the other Credit Documents.
SECTION 8. Governing Law and Waiver of Jury Trial.
THIS AMENDMENT NO. 11 AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. SECTIONS 10.15 and 10.16 OF THE CREDIT AGREEMENT ARE HEREBY INCORPORATED BY REFERENCE INTO THIS AMENDMENT NO. 11 AND SHALL APPLY HERETO.
SECTION 9. Severability.
In case any provision in or obligation hereunder shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 10. Counterparts.
This Amendment No. 11 may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an
original but all such counterparts together shall constitute but one and the same instrument. Delivery of an executed counterpart to this Amendment No. 11 by facsimile transmission or other electronic transmission shall be effective as delivery
of a manually signed counterpart of this Amendment No. 11.
SECTION 11. Headings.
-4-
Section headings herein are included herein for convenience of reference only and shall not
constitute a part hereof for any other purpose or be given any substantive effect.
SECTION 12. Lender Signatures.
Each Repriced Term Loan Lender that executes a Lender Consent and Election hereby consents to this Amendment No. 11, with respect to all
of its Series D-2 Tranche B Term Loans. Each Lender signatory to this Amendment No. 11 agrees that such Lender shall not be entitled to receive a copy of any other Lenders signature page to this Amendment No. 11, but agrees that a
copy of such signature page may be delivered to the Borrower and the Administrative Agent.
[Remainder of page intentionally left blank]
-5-
IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to
execute and deliver this Amendment No. 11 as of the date first written above.
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VALEANT PHARMACEUTICALS
INTERNATIONAL, INC. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
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VALEANT PHARMACEUTICALS INTERNATIONAL |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
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BAUSCH & LOMB INCORPORATED |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
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BAUSCH & LOMB HOLDINGS INCORPORATED |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Vice President and Treasurer |
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SOLTA MEDICAL, INC. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
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ATON PHARMA, INC. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
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CORIA LABORATORIES, LTD. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
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DOW PHARMACEUTICAL SCIENCES, INC. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
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OBAGI MEDICAL PRODUCTS, INC. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Treasurer |
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OMP, INC. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Treasurer |
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ONPHARMA INC. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Treasurer |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
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Signed by |
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Valeant Holdco 2 Pty Ltd (ACN 154 341 367) |
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in accordance with section 127 of the Corporations Act 2001 by two directors: |
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/s/ Robert R. Chai-Onn |
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/s/ Linda A. LaGorga |
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Signature of director |
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Signature of director |
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Robert R. Chai-Onn |
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Linda A. LaGorga |
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Name of director (please print) |
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Name of director (please print) |
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Signed by |
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Wirra Holdings Pty Limited (ACN 122 216 577) |
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in accordance with section 127 of the Corporations Act 2001 by two directors: |
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/s/ Robert R. Chai-Onn |
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/s/ Linda A. LaGorga |
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Signature of director |
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Signature of director |
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Robert R. Chai-Onn |
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Linda A. LaGorga |
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Name of director (please print) |
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Name of director (please print) |
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Signed by |
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Wirra Operations Pty Limited (ACN 122 250 088) |
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in accordance with section 127 of the Corporations Act 2001 by two directors: |
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/s/ Robert R. Chai-Onn |
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/s/ Linda A. LaGorga |
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Signature of director |
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Signature of director |
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Robert R. Chai-Onn |
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Linda A. LaGorga |
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Name of director (please print) |
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Name of director (please print) |
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[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
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Signed by |
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iNova Pharmaceuticals (Australia) Pty Limited (ACN 000 222 408) |
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in accordance with section 127 of the Corporations Act 2001 by two directors: |
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/s/ Robert R. Chai-Onn |
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/s/ Linda A. LaGorga |
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Signature of director |
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Signature of director |
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Robert R. Chai-Onn |
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Linda A. LaGorga |
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Name of director (please print) |
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Name of director (please print) |
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Signed by |
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Wirra IP Pty Limited (ACN 122 536 350) |
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in accordance with section 127 of the Corporations Act 2001 by two directors: |
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/s/ Robert R. Chai-Onn |
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/s/ Linda A. LaGorga |
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Signature of director |
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Signature of director |
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Robert R. Chai-Onn |
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Linda A. LaGorga |
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Name of director (please print) |
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Name of director (please print) |
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Signed by |
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iNova Sub Pty Limited (ACN 134 398 815) |
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in accordance with section 127 of the Corporations Act 2001 by two directors: |
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/s/ Robert R. Chai-Onn |
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/s/ Linda A. LaGorga |
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Signature of director |
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Signature of director |
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Robert R. Chai-Onn |
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Linda A. LaGorga |
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Name of director (please print) |
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Name of director (please print) |
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[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
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Signed by |
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Valeant Pharmaceuticals Australasia Pty Limited (ACN 001 083 352) |
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in accordance with section 127 of the Corporations Act 2001 by a director and secretary/director: |
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/s/ Robert R. Chai-Onn |
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/s/ Linda A. LaGorga |
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Signature of director |
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Signature of director/secretary |
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Robert R. Chai-Onn |
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Linda A. LaGorga |
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Name of director (please print) |
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Name of director/secretary (please print) |
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[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
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Signed by |
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DermaTech Pty Limited (ACN 003 982 161) |
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in accordance with section 127 of the Corporations Act 2001 by a director and secretary/director: |
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/s/ Robert R. Chai-Onn |
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/s/ Linda A. LaGorga |
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Signature of director |
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Signature of director/secretary |
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Robert R. Chai-Onn |
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Linda A. LaGorga |
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Name of director (please print) |
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Name of director/secretary (please print) |
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Signed by |
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Private Formula International Holdings Pty Ltd (ACN 095 450 918) |
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in accordance with section 127 of the Corporations Act 2001 by a director and secretary/director: |
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/s/ Robert R. Chai-Onn |
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/s/ Linda A. LaGorga |
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Signature of director |
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Signature of director/secretary |
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Robert R. Chai-Onn |
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Linda A. LaGorga |
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Name of director (please print) |
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Name of director/secretary (please print) |
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[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
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Signed by |
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Private Formula International Pty Ltd (ACN 095 451 442) |
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in accordance with section 127 of the Corporations Act 2001 by a director and secretary/director: |
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/s/ Robert R. Chai-Onn |
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/s/ Linda A. LaGorga |
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Signature of director |
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Signature of director/secretary |
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Robert R. Chai-Onn |
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Linda A. LaGorga |
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Name of director (please print) |
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Name of director/secretary (please print) |
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Signed by |
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Ganehill Pty Ltd (ACN 065 261 538) |
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in accordance with section 127 of the Corporations Act 2001 by a director and secretary/director: |
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/s/ Robert R. Chai-Onn |
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/s/ Linda A. LaGorga |
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Signature of director |
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Signature of director/secretary |
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Robert R. Chai-Onn |
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Linda A. LaGorga |
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/s/ Robert R. Chai-Onn |
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/s/ Linda A. LaGorga |
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Name of director (please print) |
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Name of director/secretary (please print) |
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[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
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Signed by |
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Bausch & Lomb (Australia) Pty Ltd (ACN: 000 650 251) |
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in accordance with section 127 of the Corporations Act 2001 by a director and secretary/director: |
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/s/ Robert R. Chai-Onn |
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/s/ Linda A. LaGorga |
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Signature of director |
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Signature of director/secretary |
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Robert R. Chai-Onn |
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Linda A. LaGorga |
|
|
Name of director (please print) |
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Name of director/secretary (please print) |
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[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
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HYTHE PROPERTY INCORPORATED |
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By: |
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/s/ Mauricio Zavala |
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Name: |
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Mauricio Zavala |
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Title: |
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Manager and Assistant Secretary |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
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VALEANT INTERNATIONAL BERMUDA |
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By: |
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/s/ Graham Jackson |
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Name: |
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Graham Jackson |
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Title: |
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Director |
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VALEANT PHARMACEUTICALS NOMINEE BERMUDA |
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By: |
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/s/ Peter McCurdy |
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Name: |
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Peter McCurdy |
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Title: |
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President and Assistant Secretary |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
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PROBIÓTICA LABORATÓRIOS LTDA. |
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By: |
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/s/ Marcelo Noll Barboza |
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Name: |
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Marcelo Noll Barboza |
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Title: |
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Officer |
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By: |
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/s/ Guilherme Maradei |
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Name: |
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Guilherme Maradei |
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Title: |
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Officer |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
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IOLAB CORPORATION |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Treasurer |
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TECHNOLAS PERFECT VISION, INC. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
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BAUSCH & LOMB PHARMA HOLDINGS CORP. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
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BAUSCH & LOMB CHINA, INC. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
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BAUSCH & LOMB SOUTH ASIA, INC. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
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BAUSCH & LOMB TECHNOLOGY CORPORATION |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Treasurer |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
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RHC HOLDINGS, INC. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
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SIGHT SAVERS, INC. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
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BAUSCH & LOMB INTERNATIONAL, INC. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
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BAUSCH & LOMB REALTY CORPORATION. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Vice President and Treasurer |
|
ISTA PHARMACEUTICALS, LLC |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
|
VRX HOLDCO, INC. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Chief Financial Officer and Treasurer |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
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|
VALEANT CANADA GP LIMITED |
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By: |
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/s/ Howard B. Schiller |
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Name: |
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Howard B. Schiller |
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Title: |
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Executive Vice President and Chief Financial Officer |
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VALEANT CANADA S.E.C./VALEANT CANADA LP |
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By: |
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/s/ Howard B. Schiller |
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Name: |
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Howard B. Schiller |
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Title: |
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Executive Vice President and Chief Financial Officer |
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V-BAC HOLDING CORP. |
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By: |
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/s/ Robert R. Chai-Onn |
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Name: |
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Robert R. Chai-Onn |
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Title: |
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Vice President |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
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MEDICIS PHARMACEUTICAL CORPORATION |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
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|
OCEANSIDE PHARMACEUTICALS, INC. |
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By: |
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/s/ Howard B. Schiller |
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Name: |
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Howard B. Schiller |
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Title: |
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Chief Financial Officer and Treasurer |
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|
DR. LEWINNS PRIVATE FORMULA INTERNATIONAL, INC. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
|
Senior Vice President and Treasurer |
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|
PRINCETON PHARMA HOLDINGS, LLC |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
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Senior Vice President and Treasurer |
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|
PRIVATE FORMULA CORP. |
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By: |
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/s/ Linda A. LaGorga |
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Name: |
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Linda A. LaGorga |
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Title: |
|
Senior Vice President and Treasurer |
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|
RENAUD SKIN CARE LABORATORIES, INC. |
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By: |
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|
|
/s/ Linda A. LaGorga |
|
|
Name: Linda A. LaGorga |
|
|
Title: Senior Vice President and Treasurer |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
VALEANT BIOMEDICALS, INC. |
|
|
By: |
|
/s/ Howard B.
Schiller |
Name: |
|
Howard B. Schiller |
Title: |
|
Chief Financial Officer and Treasurer |
|
VALEANT PHARMACEUTICALS NORTH AMERICA LLC |
|
|
By: |
|
/s/ Linda A.
LaGorga |
Name: |
|
Linda A. LaGorga |
Title: |
|
Senior Vice President and Treasurer |
|
BIOVAIL AMERICAS CORP. |
|
|
By: |
|
/s/ Howard B.
Schiller |
Name: |
|
Howard B. Schiller |
Title: |
|
Chief Financial Officer and Treasurer |
|
ORAPHARMA, INC. |
|
|
By: |
|
/s/ Linda A.
LaGorga |
Name: |
|
Linda A. LaGorga |
Title: |
|
Senior Vice President and Treasurer |
|
ORAPHARMA TOPCO HOLDINGS, INC. |
|
|
By: |
|
/s/ Linda A.
LaGorga |
Name: |
|
Linda A. LaGorga |
Title: |
|
Senior Vice President and Treasurer |
|
PRESTWICK PHARMACEUTICALS, INC. |
|
|
By: |
|
/s/ Howard B.
Schiller |
Name: |
|
Howard B. Schiller |
Title: |
|
Chief Financial Officer and Treasurer |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
SALIX PHARMACEUTICALS, LTD. |
|
|
By: |
|
/s/ Linda A.
LaGorga |
Name: |
|
Linda A. LaGorga |
Title: |
|
Senior Vice President and Treasurer |
|
SALIX PHARMACEUTICALS, INC. |
|
|
By: |
|
/s/ Linda A.
LaGorga |
Name: |
|
Linda A. LaGorga |
Title: |
|
Senior Vice President and Treasurer |
|
OCEANA THERAPEUTICS, INC. |
|
|
By: |
|
/s/ Linda A.
LaGorga |
Name: |
|
Linda A. LaGorga |
Title: |
|
Senior Vice President and Treasurer |
|
SANTARUS, INC. |
|
|
By: |
|
/s/ Linda A.
LaGorga |
Name: |
|
Linda A. LaGorga |
Title: |
|
Senior Vice President and Treasurer |
|
INKINE PHARMACEUTICAL COMPANY, INC. |
|
|
By: |
|
/s/ Linda A.
LaGorga |
Name: |
|
Linda A. LaGorga |
Title: |
|
Senior Vice President and Treasurer |
|
GLYCYX PHARMACEUTICALS, LTD. |
|
|
By: |
|
/s/ Linda A.
LaGorga |
Name: |
|
Linda A. LaGorga |
Title: |
|
Senior Vice President and Treasurer |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
AMAZONIAN REGIONAL BOTANICAL
PRODUCTS LLC |
|
|
By: |
|
/s/ Linda A.
LaGorga |
Name: |
|
Linda A. LaGorga |
Title: |
|
Senior Vice President and Treasurer |
|
SPL SOUTH AMERICA ONE LLC |
|
|
By: |
|
/s/ Linda A.
LaGorga |
Name: |
|
Linda A. LaGorga |
Title: |
|
Senior Vice President and Treasurer |
|
COVELLA PHARMACEUTICALS, INC. |
|
|
By: |
|
/s/ Linda A.
LaGorga |
Name: |
|
Linda A. LaGorga |
Title: |
|
Senior Vice President and Treasurer |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
BIOVAIL INTERNATIONAL S.Á.R.L. |
|
|
By: |
|
/s/ Giuseppe Di
Modica |
Name: |
|
Giuseppe Di Modica |
Title: |
|
Manager |
|
VALEANT PHARMACEUTICALS LUXEMBOURG S.Á.R.L. |
|
|
By: |
|
/s/ Giuseppe Di
Modica |
Name: |
|
Giuseppe Di Modica |
Title: |
|
Manager |
|
VALEANT INTERNATIONAL LUXEMBOURG S.Á.R.L. |
|
|
By: |
|
/s/ Giuseppe Di
Modica |
Name: |
|
Giuseppe Di Modica |
Title: |
|
Manager |
|
BAUSCH & LOMB LUXEMBOURG S.Á.R.L. |
|
|
By: |
|
/s/ Giuseppe Di
Modica |
Name: |
|
Giuseppe Di Modica |
Title: |
|
Manager |
|
VALEANT FINANCE LUXEMBOURG S.Á.R.L. |
|
|
By: |
|
/s/ Giuseppe Di
Modica |
Name: |
|
Giuseppe Di Modica |
Title: |
|
Manager |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
|
|
LABORATOIRE CHAUVIN S.A.S. |
|
|
|
By: |
|
|
|
/s/ Linda A. LaGorga |
|
|
Name: |
|
Linda A. LaGorga |
|
|
Title: |
|
General Manager |
|
BAUSCH & LOMB FRANCE S.A.S. |
|
|
|
By: |
|
|
|
/s/ Linda A. LaGorga |
|
|
Name: |
|
Linda A. LaGorga |
|
|
Title: |
|
General Manager |
|
BCF S.A.S. |
|
|
|
By: |
|
|
|
/s/ Linda A. LaGorga |
|
|
Name: |
|
Linda A. LaGorga |
|
|
Title: |
|
General Manager |
|
CHAUVIN OPSIA S.A.S. |
|
|
|
By: |
|
|
|
/s/ Linda A. LaGorga |
|
|
Name: |
|
Linda A. LaGorga |
|
|
Title: |
|
General Manager |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
|
|
VALEANT PHARMA HUNGARY LLC |
|
|
|
By: |
|
|
|
/s/ István Langer |
|
|
Name: |
|
István Langer |
|
|
Title: |
|
Managing Director |
|
VALEANT PHARMA HUNGARY LLC |
|
|
|
By: |
|
|
|
/s/ Zoltán Gábor |
|
|
Name: |
|
Zoltán Gábor |
|
|
Title: |
|
Finance Director |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
|
|
VALEANT PHARMACEUTICALS IRELAND |
|
|
|
By: |
|
|
|
/s/ Graham Jackson |
|
|
Name: |
|
Graham Jackson |
|
|
Title: |
|
Director |
|
VALEANT HOLDINGS IRELAND |
|
|
|
By: |
|
|
|
/s/ Graham Jackson |
|
|
Name: |
|
Graham Jackson |
|
|
Title: |
|
Director |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
|
|
B.L.J. COMPANY, LTD. |
|
|
|
By: |
|
|
|
/s/ Thomas Joseph Appio |
|
|
Name: |
|
Thomas Joseph Appio |
|
|
Title: |
|
Representative Director and President |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
|
|
AB SANITAS |
|
|
|
By: |
|
|
|
/s/ Karol Muchalak |
|
|
Name: |
|
Karol Muchalak |
|
|
Title: |
|
General Manager |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
|
|
UCYCLYD PHARMA, INC. |
|
|
|
By: |
|
|
|
/s/ Linda A. LaGorga |
|
|
Name: |
|
Linda A. LaGorga |
|
|
Title: |
|
Senior Vice President and Treasurer |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
|
|
VALEANT EUROPE B.V. |
|
|
|
By: |
|
|
|
/s/ Robert Meijer |
|
|
Name: |
|
Robert Meijer |
|
|
Title: |
|
Attorney-in-Fact |
|
BAUSCH & LOMB B.V. |
|
|
|
By: |
|
|
|
/s/ Robert Meijer |
|
|
Name: |
|
Robert Meijer |
|
|
Title: |
|
Attorney-in-Fact |
|
BAUSCH & LOMB OPS B.V. |
|
|
|
By: |
|
|
|
/s/ Robert Meijer |
|
|
Name: |
|
Robert Meijer |
|
|
Title: |
|
Attorney-in-Fact |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
|
|
PRZEDSIĘBIORSTWO FARMACEUTYCZNE JELFA S.A. |
|
|
|
By: |
|
|
|
/s/ Marcin Wnukowski |
|
|
Name: |
|
Marcin Wnukowski |
|
|
Title: |
|
Attorney-in-Fact |
|
VALEANT SP.Z O. O. |
|
|
|
By: |
|
|
|
/s/ Marcin Wnukowski |
|
|
Name: |
|
Marcin Wnukowski |
|
|
Title: |
|
Attorney-in-Fact |
|
VP VALEANT SP. Z O.O.SP.J. |
|
|
|
By: |
|
|
|
/s/ Marcin Wnukowski |
|
|
Name: |
|
Marcin Wnukowski |
|
|
Title: |
|
Attorney-in-Fact |
|
VALEANT SPÓŁKA Z OGRANICZONĄ
ODPOWIEDZIALNOŚCIĄ SP.J. |
|
|
|
By: |
|
|
|
/s/ Marcin Wnukowski |
|
|
Name: |
|
Marcin Wnukowski |
|
|
Title: |
|
Attorney-in-Fact |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
|
|
PHARMASWISS D.O.O., BEOGRAD |
|
|
|
By: |
|
|
|
/s/ Dejan Antonić |
|
|
Name: |
|
Dejan Antonić |
|
|
Title: |
|
General Manager |
|
|
|
|
|
|
|
(corporate stamp) |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
|
|
PHARMASWISS D.O.O., |
|
|
|
By: |
|
|
|
/s/ Senahil Asanagić |
|
|
Name: |
|
Senahil Asanagić |
|
|
Title: |
|
Director |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
|
|
INOVA PHARMACEUTICALS PROPRIETARY
LIMITED |
|
|
|
By: |
|
|
|
/s/ Robert R. Chai-Onn |
|
|
Name: |
|
Robert R. Chai-Onn |
|
|
Title: |
|
Director |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
|
|
PHARMASWISS SA |
|
|
|
By: |
|
|
|
/s/ Matthias Courvoisier |
|
|
Name: |
|
Matthias Courvoisier |
|
|
Title: |
|
Director |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
Executed by BAUSCH & LOMB U.K. LIMITED, acting by: |
|
/s/ Linda A. LaGorga
................................... |
Director |
|
Name of director: Linda A. LaGorga in the presence of: |
|
/s/ Kaleena T. Nguyen
................................... |
Name of witness: Kaleena T. Nguyen |
Address: 400 Somserset Corporate Blvd., |
Bridgewater, NJ 08807 U.S.A. |
Occupation: Legal |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
|
|
BAUSCH & LOMB IOM S.P.A. |
|
|
|
By: |
|
|
|
/s/ Linda A. LaGorga |
|
|
|
|
|
Name: |
|
Linda A. LaGorga |
|
|
Title: |
|
Director |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
|
|
|
|
SIGNED for and on behalf |
|
) |
|
|
|
|
of VALEANT PHARMACEUTICALS NEW ZEALAND LIMITED |
|
) ) |
|
/s/ Linda A. LaGorga |
|
/s/ Robert R. Chai-Onn |
|
|
|
|
|
|
|
Name: Linda A. LaGorga Title:
Director |
|
Name: Robert R. Chai-Onn Title:
Director |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
|
|
INOVA PHARMACEUTICALS (SINGAPORE) PTE LIMITED |
|
|
|
By: |
|
|
|
/s/ Howard Schiller |
|
|
|
|
|
Name: |
|
Howard Schiller |
|
|
Title: |
|
Director |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
|
|
|
|
|
BARCLAYS BANK PLC, individually as Administrative Agent and Collateral Agent |
|
|
|
By: |
|
|
|
/s/ Craig J. Malloy |
|
|
|
|
|
Name: Craig J. Malloy |
|
|
Title: Director |
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
[Lender Signature Pages Omitted]
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
EXHIBIT A
TO AMENDMENT NO. 11
LENDER CONSENT AND ELECTION
LENDER CONSENT AND ELECTION (this Lender Consent and Election) pursuant to Amendment No. 11 (Amendment
No. 11) to that certain Third Amended and Restated Credit and Guaranty Agreement, dated as of February 13, 2012, as amended by Amendment No. 1, dated as of March 6, 2012, by Amendment No. 2, dated as of
September 10, 2012, by Amendment No. 3, dated as of January 24, 2013, by Amendment No. 4, dated as of February 21, 2013, by Amendment No. 5, dated as of June 6, 2013, by Amendment No. 6, dated as of
June 26, 2013, by Amendment No. 7, dated as of September 17, 2013, by Amendment No. 8, dated as of December 20, 2013, by the Successor Agent Agreement and Amendment No. 9, dated as of January 8, 2015, by Amendment
No. 10, dated as of March 5, 2015, by the Joinder Agreement, dated as of June 14, 2012, by the Joinder Agreement, dated as of July 9, 2012, by the Joinder Agreement, dated as of September 11, 2012, by the Joinder Agreement
dated as of October 2, 2012, by the Joinder Agreement, dated as of December 11, 2012, by the Joinder Agreements, each dated as of August 5, 2013, by the Joinder Agreements, each dated as of February 6, 2014, by the Joinder
Agreements, each dated as of January 22, 2015 and by the Joinder Agreements, each dated as of April 1, 2015 (as it may be amended, restated, replaced, supplemented or otherwise modified from time to time, the Credit Agreement,
the terms defined therein and not otherwise defined herein being used herein as therein defined), by and among Borrower, certain Subsidiaries of Borrower, as Guarantors, the Lenders party thereto from time to time, Goldman Sachs Lending Partners LLC
(GSLP), J.P. Morgan Securities LLC and Morgan Stanley Senior Funding, Inc. (Morgan Stanley), as Joint Lead Arrangers and Joint Bookrunners, JPMorgan Chase Bank, N.A. (JPMorgan) and Morgan
Stanley, as Co-Syndication Agents, JPMorgan, as Issuing Bank, Barclays Bank PLC (as successor GSLP), as Administrative Agent and Collateral Agent and the other Agents party thereto.
The undersigned signatory, in its capacity as a Lender with respect to the Series D-2 Tranche B Term Loans hereby irrevocably and unconditionally
consents to Amendment No. 11:
¨
IN WITNESS WHEREOF, the undersigned has caused this Lender Consent and Election to be executed and delivered by a
duly authorized officer.
|
|
|
Date: ___________, 2015 |
|
,
as a Lender |
(type name of the legal entity) |
|
|
By: |
|
|
|
|
|
Name: |
|
|
Title: |
|
|
|
If a second signature is necessary: |
|
|
By: |
|
|
|
|
|
Name: |
|
|
Title: |
|
|
[Signature Page to
Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement]
EXHIBIT B
TO AMENDMENT NO. 11
[Attached]
MARKED VERSION REFLECTING CHANGES
PURSUANT TO AMENDMENT NO. 11
ADDED TEXT SHOWN
UNDERSCORED
DELETED TEXT SHOWN STRIKETHROUGH
THIRD AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT1
dated as of February 13, 2012
among
VALEANT
PHARMACEUTICALS INTERNATIONAL, INC.,
as Borrower,
CERTAIN SUBSIDIARIES OF VALEANT PHARMACEUTICALS INTERNATIONAL, INC.,
as Guarantors,
VARIOUS
LENDERS FROM TIME TO TIME PARTY HERETO,
GOLDMAN SACHS LENDING PARTNERS LLC, J.P. MORGAN SECURITIES LLC and
MORGAN STANLEY SENIOR FUNDING, INC.,
as Joint Lead Arrangers and Joint Bookrunners,
JPMORGAN CHASE BANK, N.A., and MORGAN STANLEY SENIOR FUNDING, INC.
as Co-Syndication Agents
JPMORGAN CHASE BANK, N.A.,
as Issuing Bank
BARCLAYS BANK PLC,
as
Administrative Agent and Collateral Agent,
and
RBC CAPITAL MARKETS, DNB BANK ASA,
THE BANK OF NOVA SCOTIA and SUNTRUST BANK,
as Co-Documentation Agents
$15,475,000,000 Senior Secured Credit Facilities
1 |
Conformed to reflect Amendment No. 1, dated as of March 6, 2012, Amendment No. 2, dated as of September 10, 2012, Amendment No. 3, dated as of January 24, 2013, Amendment No. 4, dated
as of February 21, 2013, Amendment No. 5, dated as of June 6, 2013, Amendment No. 6, dated as of June 26, 2013, Amendment No. 7, dated as of September 17, 2013, Amendment No. 8, dated as of December 20,
2013, the Successor Agent Agreement and Amendment No. 9, dated as of January 8, 2015, Amendment No. 10, dated as of March 5, 2015, Amendment
No. 11, dated as of May 29, 2015, the Joinder Agreement, dated as of June 14, 2012, the Joinder Agreement, dated as of July 9, 2012, the Joinder Agreement, dated as of September 11, 2012, the Joinder Agreement,
dated as of October 2, 2012, the Joinder Agreement, dated as of December 11, 2012, the Joinder Agreements, each dated as of August 5, 2013, the Joinders Agreements, each dated as of February 6, 2014, the Joinder Agreements, each
dated as of January 22, 2015, and the Joinder Agreements, each dated as of April 1, 2015. This document is provided for convenience only. In the event of any conflict between this document and the Third Amended and Restated Credit
Agreement, Amendment No. 1, dated as of March 6, 2012, Amendment No. 2, dated as of September 10, 2012, Amendment No. 3, dated as of January 24, 2013, Amendment No. 4, dated as of February 21, 2013, Amendment
No. 5, dated as of June 6, 2013, Amendment No. 6, dated as of June 26, 2013, Amendment No. 7, dated as of September 17, 2013, Amendment No. 8, dated as of December 20, 2013, the Successor Agent Agreement and
Amendment No. 9, dated as of January 8, 2015, Amendment No. 10, dated as of March 5, 2015, Amendment No. 11, dated as of May 29,
2015, the Joinder Agreement, dated as of June 14, 2012, the Joinder Agreement, dated as of July 9, 2012, the Joinder Agreement, dated as of September 11, 2012, the Joinder Agreement, dated as of October 2, 2012, the
Joinder Agreement, dated as of December 11, 2012, the Joinder Agreements, each dated as of August 5, 2013, the Joinder Agreements, each dated as of February 6, 2014, the Joinder Agreements, each dated as of January 22, 2015, or
the Joinder Agreements, each dated as of April 1, 2015 (collectively, the Credit Agreement), except to the extent that the Credit Agreement has been further amended by the Third Amended and Restated Credit Agreement,
Amendment No. 1, dated as of March 6, 2012, Amendment No. 2, dated as of September 10, 2012, Amendment No. 3, dated as of January 24, 2013, Amendment No. 4, dated as of February 21, 2013, Amendment No. 5,
dated as of June 6, 2013, Amendment No. 6, dated as of June 26, 2013, Amendment No. 7, dated as of September 17, 2013, Amendment No. 8, dated as of December 20, 2013, the Successor Agent Agreement and Amendment
No. 9, dated as of January 8, 2015, Amendment No. 10, dated as of March 5, 2013, Amendment No. 11, dated as of May 29, 2015, the
Joinder Agreement, dated as of June 14, 2012, the Joinder Agreement, dated as of July 9, 2012, the Joinder Agreement, dated as of September 11, 2012, the Joinder Agreement, dated as of October 2, 2012, the Joinder Agreement,
dated as of December 11, 2012, the Joinder Agreements, each dated as of August 5, 2013, the Joinder Agreements, each dated as of February 6, 2014, the Joinder Agreements, each dated as of January 22, 2015, and the Joinder
Agreements, each dated as of April 1, 2015 shall control. |
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
|
|
Page |
|
|
|
|
SECTION 1. |
|
DEFINITIONS AND INTERPRETATION |
|
|
2 |
|
|
|
|
1.1 |
|
Definitions |
|
|
2 |
|
1.2 |
|
Accounting Terms |
|
|
48 |
|
1.3 |
|
Interpretation, etc. |
|
|
49 |
|
1.4 |
|
Currency Matters |
|
|
49 |
|
1.5 |
|
Pro Forma Transactions; Covenant Calculations |
|
|
50 |
|
1.6 |
|
Effect of This Agreement on the Second Amended and Restated Credit Agreement and Other Credit Documents |
|
|
50 |
|
1.7 |
|
Medicis Transactions |
|
|
50 |
|
1.8 |
|
Bausch & Lomb Transactions |
|
|
5050 |
|
1.9 |
|
Acquisition Escrow Debt Transactions |
|
|
51 |
|
|
|
|
SECTION 2. |
|
LOANS AND LETTERS OF CREDIT |
|
|
5151 |
|
|
|
|
2.1 |
|
Term Loans |
|
|
5151 |
|
2.2 |
|
Revolving Loans |
|
|
52 |
|
2.3 |
|
Swing Line Loans |
|
|
52 |
|
2.4 |
|
Issuance of Letters of Credit and Purchase of Participations Therein |
|
|
5454 |
|
2.5 |
|
Pro Rata Shares; Availability of Funds |
|
|
5757 |
|
2.6 |
|
Use of Proceeds |
|
|
58 |
|
2.7 |
|
Evidence of Debt; Register; Lenders Books and Records; Notes |
|
|
5858 |
|
2.8 |
|
Interest on Loans |
|
|
59 |
|
2.9 |
|
Conversion/Continuation |
|
|
6060 |
|
2.10 |
|
Default Interest |
|
|
61 |
|
2.11 |
|
Fees |
|
|
61 |
|
2.12 |
|
Scheduled Payments/Commitment Reductions |
|
|
6464 |
|
2.13 |
|
Voluntary Prepayments/Commitment Reductions |
|
|
6666 |
|
2.14 |
|
Mandatory Prepayments |
|
|
6969 |
|
2.15 |
|
Application of Prepayments |
|
|
7070 |
|
2.16 |
|
General Provisions Regarding Payments |
|
|
7171 |
|
2.17 |
|
Ratable Sharing |
|
|
7272 |
|
2.18 |
|
Making or Maintaining Eurodollar Rate Loans |
|
|
73 |
|
2.19 |
|
Increased Costs; Capital Adequacy |
|
|
7474 |
|
2.20 |
|
Taxes; Withholding, etc. |
|
|
7575 |
|
2.21 |
|
Obligation to Mitigate |
|
|
77 |
|
2.22 |
|
Defaulting Lenders |
|
|
7777 |
|
2.23 |
|
Removal or Replacement of a Lender |
|
|
78 |
|
2.24 |
|
Interest Act (Canada) |
|
|
78 |
|
2.25 |
|
Incremental Facilities |
|
|
79 |
|
2.26 |
|
Extensions of Loans and Commitments |
|
|
8181 |
|
|
|
|
SECTION 3. |
|
CONDITIONS PRECEDENT |
|
|
8383 |
|
|
|
|
3.1 |
|
Third Restatement Date |
|
|
8383 |
|
3.2 |
|
Prior Credit Dates |
|
|
85 |
|
3.3 |
|
Conditions to Each Credit Extension |
|
|
85 |
|
|
|
|
SECTION 4. |
|
REPRESENTATIONS AND WARRANTIES |
|
|
86 |
|
|
|
|
4.1 |
|
Organization; Requisite Power and Authority; Qualification |
|
|
86 |
|
-i-
|
|
|
|
|
|
|
|
|
|
|
Page |
|
|
|
|
4.2 |
|
Equity Interests and Ownership |
|
|
86 |
|
4.3 |
|
Due Authorization |
|
|
8787 |
|
4.4 |
|
No Conflict |
|
|
8787 |
|
4.5 |
|
Governmental Consents |
|
|
8787 |
|
4.6 |
|
Binding Obligation |
|
|
8787 |
|
4.7 |
|
Historical Financial Statements |
|
|
87 |
|
4.8 |
|
Projections |
|
|
87 |
|
4.9 |
|
No Material Adverse Change |
|
|
88 |
|
4.10 |
|
Adverse Proceedings, etc. |
|
|
8888 |
|
4.11 |
|
Payment of Taxes |
|
|
8888 |
|
4.12 |
|
Properties |
|
|
8888 |
|
4.13 |
|
Environmental Matters |
|
|
8989 |
|
4.14 |
|
No Defaults |
|
|
8989 |
|
4.15 |
|
Governmental Regulation |
|
|
89 |
|
4.16 |
|
Federal Reserve Regulations |
|
|
89 |
|
4.17 |
|
Employee Matters |
|
|
89 |
|
4.18 |
|
Employee Benefit Plans |
|
|
9090 |
|
4.19 |
|
Canadian Employee Benefit Plans |
|
|
90 |
|
4.20 |
|
Solvency |
|
|
9191 |
|
4.21 |
|
Compliance with Statutes, etc. |
|
|
9191 |
|
4.22 |
|
Disclosure |
|
|
9191 |
|
4.23 |
|
PATRIOT Act and PCTFA |
|
|
91 |
|
4.24 |
|
Creation, Perfection, etc. |
|
|
91 |
|
4.25 |
|
OFAC Matters |
|
|
9292 |
|
|
|
|
SECTION 5. |
|
AFFIRMATIVE COVENANTS |
|
|
9292 |
|
|
|
|
5.1 |
|
Financial Statements and Other Reports |
|
|
9292 |
|
5.2 |
|
Existence |
|
|
9595 |
|
5.3 |
|
Payment of Taxes and Claims |
|
|
9595 |
|
5.4 |
|
Maintenance of Properties |
|
|
95 |
|
5.5 |
|
Insurance |
|
|
95 |
|
5.6 |
|
Books and Records; Inspections |
|
|
9696 |
|
5.7 |
|
Lenders Meetings |
|
|
96 |
|
5.8 |
|
Compliance with Laws |
|
|
96 |
|
5.9 |
|
Environmental |
|
|
96 |
|
5.10 |
|
Subsidiaries |
|
|
97 |
|
5.11 |
|
Additional Material Real Estate Assets |
|
|
9999 |
|
5.12 |
|
Interest Rate Protection |
|
|
9999 |
|
5.13 |
|
Further Assurances |
|
|
9999 |
|
5.14 |
|
Maintenance of Ratings |
|
|
99 |
|
5.15 |
|
Post-Closing Matters |
|
|
99 |
|
5.16 |
|
Canadian Employee Benefit Plans |
|
|
99 |
|
|
|
|
SECTION 6. |
|
NEGATIVE COVENANTS |
|
|
99 |
|
|
|
|
6.1 |
|
Indebtedness |
|
|
100100 |
|
6.2 |
|
Liens |
|
|
102 |
|
6.3 |
|
No Further Negative Pledges |
|
|
105105 |
|
6.4 |
|
Restricted Junior Payments |
|
|
105105 |
|
6.5 |
|
Restrictions on Subsidiary Distributions |
|
|
106 |
|
6.6 |
|
Investments |
|
|
106 |
|
6.7 |
|
Financial Covenants |
|
|
108 |
|
6.8 |
|
Fundamental Changes; Disposition of Assets; Acquisitions |
|
|
108 |
|
6.9 |
|
Disposal of Subsidiary Interests |
|
|
110 |
|
-ii-
|
|
|
|
|
|
|
|
|
|
|
Page |
|
|
|
|
6.10 |
|
Sales and Leasebacks |
|
|
110 |
|
6.11 |
|
Transactions with Shareholders and Affiliates |
|
|
110 |
|
6.12 |
|
Conduct of Business |
|
|
111111 |
|
6.13 |
|
Amendments or Waivers with Respect to Subordinated Indebtedness |
|
|
111 |
|
6.14 |
|
Amendments or Waivers of Organizational Documents |
|
|
111 |
|
6.15 |
|
Fiscal Year |
|
|
111 |
|
6.16 |
|
Specified Subsidiary Dispositions |
|
|
111 |
|
6.17 |
|
Biovail Insurance |
|
|
111 |
|
6.18 |
|
Establishment of Defined Benefit Plan |
|
|
111 |
|
|
|
|
SECTION 7. |
|
GUARANTY |
|
|
111 |
|
|
|
|
7.1 |
|
Guaranty of the Obligations |
|
|
111 |
|
7.2 |
|
Contribution by Guarantors |
|
|
112111 |
|
7.3 |
|
Payment by Guarantors |
|
|
112112 |
|
7.4 |
|
Liability of Guarantors Absolute |
|
|
112112 |
|
7.5 |
|
Waivers by Guarantors |
|
|
114114 |
|
7.6 |
|
Guarantors Rights of Subrogation, Contribution, etc. |
|
|
114 |
|
7.7 |
|
Subordination of Other Obligations |
|
|
115115 |
|
7.8 |
|
Continuing Guaranty |
|
|
115 |
|
7.9 |
|
Authority of Guarantors or Borrower |
|
|
115 |
|
7.10 |
|
Financial Condition of Borrower |
|
|
115 |
|
7.11 |
|
Bankruptcy, etc. |
|
|
115 |
|
7.12 |
|
Discharge of Guaranty upon Sale of Guarantor |
|
|
116 |
|
7.13 |
|
Swiss Guarantee Limitations |
|
|
116 |
|
|
|
|
SECTION 8. |
|
EVENTS OF DEFAULT |
|
|
118118 |
|
|
|
|
8.1 |
|
Events of Default |
|
|
118118 |
|
|
|
|
SECTION 9. |
|
AGENTS |
|
|
120 |
|
|
|
|
9.1 |
|
Appointment of Agents |
|
|
120 |
|
9.2 |
|
Powers and Duties |
|
|
120 |
|
9.3 |
|
General Immunity |
|
|
121120 |
|
9.4 |
|
Agents Entitled to Act as Lender |
|
|
122121 |
|
9.5 |
|
Lenders Representations, Warranties and Acknowledgment |
|
|
122122 |
|
9.6 |
|
Right to Indemnity |
|
|
122 |
|
9.7 |
|
Successor Administrative Agent, Collateral Agent and Swing Line Lender |
|
|
123122 |
|
9.8 |
|
Collateral Documents and Guaranty |
|
|
124 |
|
9.9 |
|
Withholding Taxes |
|
|
125 |
|
9.10 |
|
Quebec Security |
|
|
126125 |
|
|
|
|
SECTION 10. |
|
MISCELLANEOUS |
|
|
126 |
|
|
|
|
10.1 |
|
Notices |
|
|
126 |
|
10.2 |
|
Expenses |
|
|
127 |
|
10.3 |
|
Indemnity |
|
|
128127 |
|
10.4 |
|
Set-Off |
|
|
128 |
|
10.5 |
|
Amendments and Waivers |
|
|
129128 |
|
10.6 |
|
Successors and Assigns; Participations |
|
|
131131 |
|
10.7 |
|
Independence of Covenants |
|
|
134133 |
|
10.8 |
|
Survival of Representations, Warranties and Agreements |
|
|
134134 |
|
10.9 |
|
No Waiver; Remedies Cumulative |
|
|
134 |
|
10.10 |
|
Marshalling; Payments Set Aside |
|
|
134 |
|
-iii-
|
|
|
|
|
|
|
|
|
|
|
Page |
|
|
|
|
10.11 |
|
Severability |
|
|
134 |
|
10.12 |
|
Obligations Several; Independent Nature of Lenders Rights |
|
|
134 |
|
10.13 |
|
Headings |
|
|
134 |
|
10.14 |
|
APPLICABLE LAW |
|
|
135134 |
|
10.15 |
|
CONSENT TO JURISDICTION |
|
|
135135 |
|
10.16 |
|
WAIVER OF JURY TRIAL |
|
|
135 |
|
10.17 |
|
Confidentiality |
|
|
136135 |
|
10.18 |
|
Usury Savings Clause |
|
|
136 |
|
10.19 |
|
Counterparts |
|
|
137136 |
|
10.20 |
|
Effectiveness; Entire Agreement |
|
|
137137 |
|
10.21 |
|
PATRIOT Act; PCTFA |
|
|
137137 |
|
10.22 |
|
Electronic Execution of Assignments |
|
|
137 |
|
10.23 |
|
No Fiduciary Duty |
|
|
137 |
|
10.24 |
|
Judgment Currency |
|
|
137 |
|
10.25 |
|
Joint and Several Liability |
|
|
138 |
|
10.26 |
|
Advice of Counsel; No Strict Construction |
|
|
138 |
|
10.27 |
|
Day Not a Business Day |
|
|
138 |
|
10.28 |
|
Limitations Act, 2002 |
|
|
138 |
|
10.29 |
|
Parallel Debt (The Netherlands, Poland, Japan, Serbia, Slovenia) |
|
|
138 |
|
10.30 |
|
Parallel Debt (France) |
|
|
139139 |
|
10.31 |
|
Parallel Debt (Hungary) |
|
|
140139 |
|
APPENDICES:
|
|
|
A-1 |
|
Revolving Commitments |
A-2 |
|
Tranche B Term Loan Commitments |
B |
|
Notice Addresses |
SCHEDULES:
|
|
|
1.1(b) |
|
Third Restatement Date Guarantors |
2.11(c) |
|
Closing Fee |
3.1(e)(i) |
|
Mortgaged Properties |
4.1 |
|
Jurisdictions of Organization and Qualification |
4.2 |
|
Equity Interests and Ownership |
4.12 |
|
Real Estate Assets |
4.18 |
|
Certain Defined Benefit Plans |
5.10(a) |
|
Barbados Security Documents |
5.10(b) |
|
Quebec Security Documents |
5.10(c) |
|
Luxembourg Security Documents |
5.10(d) |
|
Swiss Security Documents |
5.15 |
|
Post-Closing Matters |
6.1 |
|
Certain Indebtedness |
6.2 |
|
Certain Liens |
6.3 |
|
Certain Negative Pledges |
6.5 |
|
Certain Restrictions on Subsidiary Distributions |
6.6 |
|
Certain Investments |
6.11 |
|
Certain Affiliate Transactions |
EXHIBITS:
|
|
|
A-1 |
|
Funding Notice |
A-2 |
|
Conversion/Continuation Notice |
B-1 |
|
Revolving Loan Note |
B-2 |
|
Swing Line Note |
-iv-
|
|
|
B-3 |
|
Tranche A Term Loan Note |
B-4 |
|
Tranche B Term Loan Note |
C |
|
Compliance Certificate |
D |
|
Assignment Agreement |
E |
|
Prepayment Notice |
F-1 |
|
Third Restatement Date Certificate |
F-2 |
|
Solvency Certificate |
G |
|
Counterpart Agreement |
H-1 |
|
Canadian Guarantee |
H-2 |
|
Barbados Guarantee |
I-1 |
|
Second Amended and Restated Pledge and Security Agreement |
I-2 |
|
Canadian Pledge and Security Agreement |
J-1 |
|
Intercompany Note |
J-2 |
|
Subordination Agreement |
K |
|
Joinder Agreement |
L |
|
Contribution Agreement |
M |
|
Collateral Questionnaire |
-v-
THIRD AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT
This THIRD AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT, dated as of February 13, 2012, is entered into by and among
VALEANT PHARMACEUTICALS INTERNATIONAL, INC., a corporation continued under the laws of the Province of British Columbia (Borrower), CERTAIN SUBSIDIARIES OF BORROWER, as Guarantors, the Lenders party hereto from time
to time, GOLDMAN SACHS LENDING PARTNERS LLC (GSLP), J.P. MORGAN SECURITIES LLC (J.P. Morgan) and MORGAN STANLEY SENIOR FUNDING, INC. (Morgan Stanley), as Joint Lead
Arrangers and Joint Bookrunners, JPMORGAN CHASE BANK, N.A. and Morgan Stanley as Co-Syndication Agents (in such capacity, the Co-Syndication Agents), JPMorgan Chase Bank, N.A., as Issuing Bank, BARCLAYS BANK PLC (as
successor to GSLP) (Barclays), as Administrative Agent (together with its permitted successors in such capacity, Administrative Agent) and as Collateral Agent (together with its permitted successors in such
capacity, Collateral Agent), and RBC CAPITAL MARKETS, DNB BANK ASA, THE BANK OF NOVA SCOTIA and SUNTRUST BANK, as Co-Documentation Agents (in such capacity, Co-Documentation Agents).
RECITALS:
WHEREAS, capitalized terms used in these Recitals and not defined shall have the respective meanings set forth for such terms in
Section 1.1 hereof.
WHEREAS, Valeant Pharmaceuticals International, a Delaware corporation (VPI),
Borrower, the guarantors party thereto, the lenders party thereto, and GSLP, as administrative agent and collateral agent for the lenders party thereto, originally entered into the Credit and Guaranty Agreement dated as of June 29, 2011 (the
Original Credit Agreement), subsequently entered into the Amended and Restated Credit and Guaranty Agreement dated as of August 10, 2011, as further amended by Amendment No. 1 dated as of August 12, 2011, as further
amended by Amendment No. 2 dated as of September 7, 2011 (collectively, the First Amended and Restated Credit Agreement), and subsequently entered into the Second Amended and Restated Credit and Guaranty Agreement, dated
as of October 20, 2011, as amended by the Joinder Agreement, dated as of December 19, 2011 (collectively, the Second Amended and Restated Credit Agreement).
WHEREAS, on the Second Restatement Date, the Lenders extended certain credit facilities to Borrower, in an aggregate principal amount
not to exceed $2,000,000,000, consisting of (a) up to $275,000,000 aggregate principal amount of Revolving Commitments, the proceeds of which were or will be used (i) to finance a portion of the Acquisitions and pay related fees and
expenses, (ii) for permitted capital expenditures and permitted acquisitions, (iii) to provide for the ongoing working capital requirements of Borrower and its Subsidiaries, (iv) for general corporate purposes of Borrower and its
Subsidiaries and (v) to fund original issue discount and closing fees with respect to the Loans made on the Second Restatement Date, (b) an aggregate principal amount of $1,225,000,000 of Initial Draw Tranche A Term Loans, the proceeds of
which were or will be used (i) on the Second Restatement Date to fund the repayment of a loan from VPI to Borrower followed by a use of the repayment proceeds by VPI to fund the repayment in full of all loans outstanding under the First Amended
and Restated Credit Agreement and the payment of all fees and expenses related thereto (the Refinancing) and (ii) for general corporate purposes of Borrower and its Subsidiaries and (c) an aggregate principal amount of
$500,000,000 of Delayed Draw Term Loans, the proceeds of which were or will be used (i) to finance a portion of the Acquisitions and pay related fees and expenses and (ii) for general corporate purposes of Borrower and its Subsidiaries. On
the Second Amendment and Restatement Joinder Date, the Lenders extended an additional aggregate principal amount of $500,000,000 of Series A New Term Loans, the proceeds of which were or will be used for general corporate purposes of Borrower and
its Subsidiaries, including acquisitions.
WHEREAS, the Lenders have agreed to extend an aggregate principal amount of $600,000,000
of Tranche B Term Loan Commitments, the proceeds of which will be used to (i) repay a portion of the Revolving Loans outstanding as of the Third Restatement Date (but not to permanently reduce Revolving Commitments with respect thereto) and
(ii) for general corporate purposes of Borrower and its Subsidiaries, including acquisitions.
WHEREAS, Borrower, the lenders
party hereto and the other parties hereto desire to amend and restate, without novation, the Second Amended and Restated Credit Agreement on and subject to the terms and conditions set forth herein and in Amendment No. 1 to Second Amended and
Restated Credit and Guaranty Agreement, dated as of
the date hereof (the Amendment Agreement), among Borrower, the lenders party thereto, the Administrative Agent, the Collateral Agent and the other parties thereto.
NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the Second Amended and
Restated Credit Agreement is hereby amended and restated, without novation, to read in its entirety as follows and, accordingly, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1 Definitions. The following terms used herein, including in the preamble, recitals,
exhibits, appendices and schedules hereto, shall have the following meanings:
2010 Merger means the merger of VPI with
and into Beach Merger Corp. pursuant to the 2010 Merger Agreement.
2010 Merger Agreement means the Agreement and Plan
of Merger, dated as of June 20, 2010, among VPI, Borrower, Biovail Americas Corp. and Beach Merger Corp., together with all exhibits, schedules, documents, agreements, and instruments executed and delivered in connection therewith, as the same
has been amended, or modified in accordance with the terms and provisions thereof.
2010 Transactions means,
collectively, (i) the redemption of VPIs 8.375% Senior Notes due 2016, issued under that certain indenture dated as of June 9, 2009, among VPI, the guarantors party thereto and The Bank of New York Mellon Trust Company, Inc., as
trustee, and VPIs 7.625% Senior Notes due 2020, issued under that certain indenture dated as of April 9, 2010, among VPI, the guarantors party thereto and The Bank of New York Mellon Trust Company, Inc., as trustee, (ii) the
repayment in full and termination of that certain credit and guaranty agreement, dated as of May 26, 2010, among VPI, the guarantors party thereto, Goldman Sachs Lending Partners L.P., as sole lead arranger, and Goldman Sachs Bank USA, as
administrative agent and collateral agent, (iii) the repayment in full and termination of that certain credit agreement, dated as of June 9, 2009, among Borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., Toronto Branch, as
Administrative Agent, (iv) the payment of the Pre-Merger Special Dividend (as such term is defined in the 2010 Merger Agreement) made on September 27, 2010, immediately prior to the consummation of the 2010 Merger, pro rata to VPIs
shareholders on the record date of such for such dividend, (v) the consummation of the 2010 Merger, (vi) the issuance of the Senior Notes and (vii) the payment of all fees and expenses related thereto.
Acquisition Debt Additional Escrow Amount means an amount equal to (a) all interest that could accrue on the
applicable Acquisition Escrow Debt from and including the date of issuance or incurrence thereof to and including the Escrow Acquisition Termination Date and (b) all fees and expenses that are incurred in connection with the issuance or
incurrence of such Acquisition Escrow Debt and all premium, fees, expenses or other amounts payable in connection with the Acquisition Escrow Debt Redemption.
Acquisition Debt Escrow Account means a deposit or securities account at a financial institution (such institution, the
Acquisition Debt Escrow Agent) into which any Acquisition Debt Escrowed Funds are deposited.
Acquisition Debt
Escrow Agent has the meaning given to such term in the definition of the term Acquisition Debt Escrow Account.
Acquisition Debt Escrow Debt Documents means the definitive documentation governing any applicable Acquisition Escrow Debt,
including the applicable Acquisition Debt Escrow Documents and any other documents entered into by the Borrower, VPI and/or Acquisition Debt Escrow Issuer in connection with any Acquisition Escrow Debt; provided that such documents shall
require that (a) if the applicable Escrow Acquisition shall not be consummated on or before the corresponding Escrow Acquisition Termination Date, such Acquisition Escrow Debt shall be redeemed in full (the Acquisition Escrow Debt
Redemption) no later than the third Business Day after the Escrow Acquisition Termination Date and (b) the Acquisition Debt Escrowed Funds shall be released from the Acquisition Debt Escrow Account on or before three Business Days
after the Escrow Acquisition
-2-
Termination Date (A) upon the consummation of the Escrow Acquisition and applied to finance a portion of such Escrow Acquisition or (B) to effectuate the Acquisition Escrow Debt
Redemption.
Acquisition Debt Escrow Documents means the agreement(s) governing the Acquisition Debt Escrow Account and
any other documents entered into in order to provide the Acquisition Debt Escrow Agent (or its designee) a Lien on the Acquisition Debt Escrowed Funds.
Acquisition Debt Escrow Issuer means a newly-formed, wholly-owned direct or indirect subsidiary of Borrower or VPI, which,
prior to the consummation of any Escrow Acquisition, shall have no operations, assets or activities, other than the entering into of the Acquisition Debt Escrow Debt Documents, the issuance or incurrence of the Acquisition Escrow Debt, and
activities incidental thereto, including the deposit of the Acquisition Debt Escrowed Funds in the Acquisition Debt Escrow Account.
Acquisition Debt Escrowed Funds means an amount, in cash or Eligible Escrow Investments, not to exceed the sum of
(a) the issue price of the applicable Acquisition Escrow Debt, plus (b) the Acquisition Debt Additional Escrow Amount, plus (c) so long as they are retained in the Acquisition Debt Escrow Account, any income, proceeds or products of
the foregoing.
Acquisition Escrow Debt means Indebtedness (which may be in the form of loans or notes) issued or
incurred after the Amendment No. 5 Effective Date of an Acquisition Debt Escrow Issuer to finance any Permitted Acquisition (each, an Escrow Acquisition) consummated after the Amendment No. 5 Effective Date (excluding,
for the avoidance of doubt, any Indebtedness issued or incurred in connection with the Bausch & Lomb Acquisition); provided that (x) the net proceeds of such Indebtedness are deposited into an Acquisition Debt Escrow Account
upon the issuance thereof and (y) at the time of the issuance or incurrence thereof, Administrative Agent shall have received a certificate from the chief executive officer or the chief financial officer (or the equivalent thereof) of Borrower
certifying that subject to and upon the consummation of such Escrow Acquisition, such Acquisition Escrow Debt shall, on a Pro Forma Basis, be permitted under the Credit Documents.
Acquisition Escrow Debt Redemption shall have the meaning given to such term in the definition of the term
Acquisition Debt Escrow Debt Documents.
Acquisitions means, collectively, the Orthodermatologics
Acquisition and the Dermik Acquisition.
Additional Credit Party means any Credit Party, as of the Third Restatement
Date, that was not a Credit Party as of the Second Restatement Date.
Additional Escrow Amount means an amount equal to
(a) all interest that could accrue on the New Senior Notes from and including the date of issuance thereof to and including the Termination Date and (b) all fees and expenses that are incurred in connection with the issuance of the New
Senior Notes and all fees, expenses or other amounts payable in connection with the New Senior Notes Redemption.
Additional Series A-3 Tranche A Term Loan Funding Date means February 6, 2014.
Additional Series A-3 Tranche A Term Loan Joinder Agreement means the Joinder Agreement, dated as of February 6, 2014,
by and among the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent and the New Term Loan Lenders party thereto.
Adjusted Eurodollar Rate means with respect to any Eurodollar Rate Loans for any Interest Period, an interest rate per
annum equal to (i) the Eurodollar Rate for such Interest Period multiplied by (ii) the Statutory Reserve Rate; provided, that notwithstanding the foregoing, the Adjusted Eurodollar Rate in respect of the Tranche B Term Loans shall
at no time be less than 0.75%.
Administrative Agent as defined in the preamble hereto.
-3-
Adverse Proceeding means any action, suit, claim, proceeding, hearing (in each
case, whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of Borrower or any of its Subsidiaries) pursuant to any statute, regulation, ordinance, common law, equity or any
other legal principle or process, or before or by any Governmental Authority, domestic or foreign (including any Environmental Claims), whether pending or, to the knowledge of Borrower or any of its Subsidiaries, threatened against or affecting
Borrower or any of its Subsidiaries or any property of Borrower or any of its Subsidiaries.
Affected Lender as defined
in Section 2.18(b).
Affected Loans as defined in Section 2.18(b).
Affiliate means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under
common control with, that Person. For the purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as applied to
any Person, means the possession, directly or indirectly, of the power (i) solely for purposes of Section 6.11, to vote 10% or more of the Securities having ordinary voting power for the election of directors of such Person or (ii) to
direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.
Agent means each of (a) the Administrative Agent, (b) each Co-Syndication Agent, (c) the Collateral Agent,
(d) each Co-Documentation Agent, (e) each Senior Managing Agent and (f) any other Person appointed under the Credit Documents to serve in an agent or similar capacity.
Agent Affiliates as defined in Section 10.1(b)(3).
Aggregate Amounts Due as defined in Section 2.17.
Agreement means this Third Amended and Restated Credit and Guaranty Agreement, dated as of February 13, 2012, as it
may be amended, restated, supplemented or otherwise modified from time to time.
Amendment Agreement as defined
in the recitals.
Amendment No. 2 Effective Date means September 10, 2012.
Amendment No. 3 means Amendment No. 3 to Third Amended and Restated Credit and Guaranty Agreement, dated as of
January 24, 2013, by and among the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent, the New Term Loan Lenders party thereto, the New Revolving Loan Lenders party thereto and the Requisite Lenders party thereto.
Amendment No. 3 Effective Date means January 24, 2013.
Amendment No. 4 means Amendment No. 4 to Third Amended and Restated Credit and Guaranty Agreement, dated as of
February 21, 2013, by and among the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent, the New Term Loan Lenders party thereto and the Requisite Lenders party thereto.
Amendment No. 4 Delivery Date as defined in the definition of Applicable Margin.
Amendment No. 4 Effective Date means February 21, 2013.
Amendment No. 5 means Amendment No. 5 to Third Amended and Restated Credit and Guaranty Agreement, dated as of
June 6, 2013, by and among the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent and the Requisite Lenders party thereto.
Amendment No. 5 Effective Date means June 6, 2013.
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Amendment No. 6 means Amendment No. 6 to Third Amended and Restated
Credit and Guaranty Agreement, dated as of June 26, 2013, by and among the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent, the Requisite Lenders and the other Lenders party thereto.
Amendment No. 6 Effective Date means June 26, 2013.
Amendment No. 7 means Amendment No. 7 to Third Amended and Restated Credit and Guaranty Agreement, dated as of
September 17, 2013, by and among the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent, the Requisite Lenders and the other Lenders party thereto.
Amendment No. 7 Effective Date means September 17, 2013.
Amendment No. 8 means Amendment No. 8 to Third Amended and Restated Credit and Guaranty Agreement, dated as of
December 20, 2013, by and among the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent, the Requisite Lenders and the other Lenders party thereto.
Amendment No. 8 Effective Date means December 20, 2013.
Amendment No. 10 means Amendment No. 10 to Third Amended and Restated Credit and Guaranty Agreement, dated as of
March 5, 2015, by and among the Borrower, the Guarantors party thereto, the Administrative Agent, the Collateral Agent and the Requisite Lenders party thereto.
Amendment No. 10 Effective Date means March 5, 2015.
Amendment
No. 11 means Amendment No. 11 to Third Amended and Restated Credit and Guaranty Agreement, dated as of May 29, 2015, by and among the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent and the Requisite
Lenders party thereto.
Amendment No. 11 Effective
Date means May 29, 2015.
Applicable Law means any and all current and future applicable laws (including common law and equity), statutes, by-laws, rules, regulations, orders, ordinances, protocols, codes, treaties, policies,
directions, directives, decrees, restrictions, judgments, decisions, in each case, of, from or required by any Governmental Authority and, in each case, whether having the force of law or not.
Applicable Margin means
(a) (i) with respect to Tranche B Term Loans that are Eurodollar Rate Loans,
(x) for the period commencing on the Third Restatement Date until (but not including) the Series A Tranche B Term Loan Funding Date, 2.75% per annum, (y) for the period commencing on the Series A Tranche B Term Loan Funding Date until
(but not including) the Series D Tranche B Term Loan Funding Date, 3.75% per annum, and (z) for the period commencing on the Series D Tranche B Term Loan Funding Date until (but not including) the Amendment No. 4 Effective Date,
3.25% per annum,
(ii) with respect to Tranche B Term Loans that are
Base Rate Loans, (x) for the period commencing on the Third Restatement Date until (but not including) the Series A Tranche B Term Loan Funding Date, 1.75% per annum, (y) for the period commencing on the Series A Tranche B Term Loan
Funding Date until (but not including) the Series D Tranche B Term Loan Funding Date, 2.75% per annum, and (z) for the period commencing on the Series D Tranche B Term Loan Funding Date until (but not including) the Amendment No. 4
Effective Date, 2.25% per annum,
(iii) for the period commencing on
the Amendment No. 4 Effective Date until (but not including) the Series E Tranche B Term Loan Funding Date, (w) with respect to Series C-1 Tranche B Term Loans that are Eurodollar Rate Loans, 2.75% per annum, (x) with respect to
Series C-1 Tranche B Term Loans that are Base Rate Loans, 1.75% per annum, (y) with respect to Series D-1 Tranche B Term Loans that
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are Eurodollar Rate Loans, 2.75% per annum, and (z) with respect to Series D-1 Tranche B Term Loans that are Base Rate Loans, 1.75% per annum,
(iv) for the period commencing on the Series E Tranche B Term Loan Funding
Date until (but not including) the Amendment No. 7 Effective Date, (w) with respect to Series C-1 Tranche B Term Loans that are Eurodollar Rate Loans, 3.625% per annum, (x) with respect to Series C-1 Tranche B Term Loans that are
Base Rate Loans, 2.625% per annum, (y) with respect to Series D-1 Tranche B Term Loans that are Eurodollar Rate Loans, 3.625% per annum, and (z) with respect to Series D-1 Tranche B Term Loans that are Base Rate Loans,
2.625% per annum,
(v) (x) until delivery of financial statements of
Borrower and a related Compliance Certificate for the first full Fiscal Quarter commencing on or after the Amendment No. 7 Effective Date pursuant to Section 5.1(c), (A) with respect to Series C-2 Tranche B Term Loans that are
Eurodollar Rate Loans, 3.00% per annum, (B) with respect to Series C-2 Tranche B Term Loans that are Base Rate Loans, 2.00% per annum, (C) with respect to Series D-2 Tranche B Term Loans that are Eurodollar Rate Loans,
3.00% per annum, and (D) with respect to Series D-2 Tranche B Term Loans that are Base Rate Loans, 2.00% per annum, and
(y) thereafter (and solely with respect to the Series D-2 Tranche B Term Loans, until (but not including) the Amendment
No. 11 Effective Date), the percentages per annum set forth in the table below, based upon the Secured Leverage Ratio of Borrower, as of the last day of the most recently ended Fiscal Quarter
for which financial statements were required to have been delivered pursuant to Section 5.1(a) or (b):
|
|
|
|
|
|
|
Pricing
Level |
|
Secured Leverage Ratio
|
|
Eurodollar Rate Loans
|
|
Base Rate Loans |
I |
|
> 1.75 to 1.0 |
|
3.00% |
|
2.00% |
II |
|
< 1.75 to 1.0 |
|
2.75% |
|
1.75% |
(vi) (x) with respect to Series E Tranche B
Term Loans that are Eurodollar Rate Loans, 3.75% per annum, and (y) with respect to Series E Tranche B Term Loans that are Base Rate Loans, 2.75% per annum,
(vii) (x) until delivery of financial statements of Borrower and a related
Compliance Certificate for the first full Fiscal Quarter commencing on or after the Series E-1 Tranche B Term Loan Funding Date, pursuant to Section 5.1(c), (A) with respect to Series E-1 Tranche B Term Loans that are Eurodollar Rate
Loans, 3.00% per annum and (B) with respect to Series E-1 Tranche B Term Loans that are Base Rate Loans, 2.00% per annum and (y) thereafter, the percentages per annum set forth in the table below, based upon the Secured Leverage
Ratio of Borrower, as of the last day of the most recently ended Fiscal Quarter for which financial statements were required to have been delivered pursuant to Section 5.1(a) or (b):
|
|
|
|
|
|
|
Pricing
Level |
|
Secured Leverage Ratio
|
|
Eurodollar Rate Loans
|
|
Base Rate Loans |
I |
|
> 1.75 to 1.0 |
|
3.00% |
|
2.00% |
II |
|
< 1.75 to 1.0 |
|
2.75% |
|
1.75% |
and
(viii) (x) until delivery of
financial statements of Borrower and a related Compliance Certificate for the first full Fiscal Quarter commencing on or after April 1, 2015, pursuant to Section 5.1(c), (A) with respect to Series F Tranche B Term Loans that are
Eurodollar Rate Loans, 3.25% per annum and (B) with respect to Series F Tranche B Term Loans that are Base Rate Loans, 2.25% per annum and (y) thereafter, the percentages per annum set forth in the table below, based upon the
Secured Leverage Ratio of Borrower, as of the last day of the most recently ended Fiscal Quarter for which financial statements were required to have been delivered pursuant to Section 5.1(a) or (b):
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|
|
|
|
|
|
|
Pricing Level
|
|
Secured Leverage Ratio
|
|
Eurodollar Rate Loans
|
|
Base Rate Loans |
I |
|
> 1.75 to 1.0 |
|
3.25% |
|
2.25% |
II |
|
< 1.75 to 1.0 |
|
3.00% |
|
2.00% |
and
(ix)
(x) for the period commencing on the Amendment No. 11 Effective Date until delivery of financial statements of Borrower and a related Compliance Certificate for the first full Fiscal Quarter commencing on or after
the Amendment No. 11 Effective Date, pursuant to Section 5.1(c), (A) with respect to Series D-2 Tranche B Term Loans that are Eurodollar Rate Loans, 2.75% per annum and (B) with respect to Series D-2 Tranche B Term Loans
that are Base Rate Loans, 1.75% per annum and (y) thereafter, the percentages per annum set forth in the table below, based upon the Secured Leverage Ratio of Borrower, as of the last day of the most recently ended Fiscal Quarter for which
financial statements were required to have been delivered pursuant to Section 5.1(a) or (b):
|
|
|
|
|
|
|
Pricing
Level
|
|
Secured
Leverage Ratio |
|
Eurodollar Rate Loans |
|
Base Rate Loans
|
I |
|
> 1.75 to 1.0 |
|
2.75% |
|
1.75% |
II |
|
< 1.75 to 1.0 |
|
2.50% |
|
1.50% |
and
(b) other than with respect to the Series A-4 Tranche A Term Loans,
(i) until delivery of financial statements of Borrower and a related Compliance Certificate for the first full Fiscal Quarter commencing on or after the Second Restatement Date pursuant to Section 5.1(c) (the Delivery
Date), (A) with respect to Revolving Loans and Tranche A Term Loans that are Eurodollar Rate Loans, 2.75% per annum, (B) with respect to Revolving Loans, Swing Line Loans and Tranche A Term Loans that are Base Rate Loans,
1.75% per annum,
(ii) for the period commencing on the Delivery Date
until (but not including) the Amendment No. 3 Effective Date, the percentages per annum set forth in the table below, based upon the Leverage Ratio of Borrower, as of the last day of the most recently ended Fiscal Quarter for which financial
statements were required to have been delivered pursuant to Section 5.1(a) or (b):
|
|
|
|
|
|
|
Pricing
Level |
|
Leverage Ratio
|
|
Eurodollar Rate Loans |
|
Base Rate Loans |
I |
|
> 4.0 to 1.0 |
|
3.00% |
|
2.00% |
II |
|
< 4.0 to 1.0 but > 3.25 to 1.0 |
|
2.75% |
|
1.75% |
III |
|
< 3.25 to 1.0 |
|
2.50% |
|
1.50% |
and
(iii) thereafter, the percentages per annum set forth in the table below,
based upon the Leverage Ratio of Borrower, as of the last day of the most recently ended Fiscal Quarter for which financial statements were required to have been delivered pursuant to Section 5.1(a) or (b):
|
|
|
|
|
|
|
Pricing
Level |
|
Leverage Ratio
|
|
Eurodollar Rate Loans
|
|
Base Rate Loans |
I |
|
> 4.0 to 1.0 |
|
2.25% |
|
1.25% |
II |
|
< 4.0 to 1.0 but > 3.25 to 1.0 |
|
2.00% |
|
1.00% |
III |
|
< 3.25 to 1.0 |
|
1.75% |
|
0.75% |
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(c) (i) until delivery of
financial statements of Borrower and a related Compliance Certificate for the first full Fiscal Quarter commencing on or after April 1, 2015, pursuant to Section 5.1(c), (A) with respect to Series A-4 Tranche A Term Loans that are
Eurodollar Rate Loans, 2.25% per annum and (B) with respect to Series A-4 Tranche A Term Loans that are Base Rate Loans, 1.25% per annum and (ii) thereafter, the percentages per annum set forth in the table below, based upon the
Leverage Ratio of Borrower, as of the last day of the most recently ended Fiscal Quarter for which financial statements were required to have been delivered pursuant to Section 5.1(a) or (b):
|
|
|
|
|
|
|
Pricing Level
|
|
Leverage Ratio
|
|
Eurodollar Rate Loans
|
|
Base Rate Loans |
I |
|
> 4.0 to 1.0 |
|
2.25% |
|
1.25% |
II |
|
< 4.0 to 1.0 but > 3.25 to 1.0
|
|
2.00% |
|
1.00% |
III |
|
< 3.25 to 1.0 |
|
1.75% |
|
0.75% |
Any increase or decrease in the Applicable Margin resulting from a change in the Secured Leverage Ratio or
Leverage Ratio, as applicable, shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 5.1 (including, for the avoidance of doubt, the latest delivery under
the Second Amended and Restated Credit Agreement); provided that Pricing Level I shall apply (x) as of the first Business Day after the date on which a Compliance Certificate was required to have been delivered but was not delivered, and
shall continue to so apply to and including the date on which such Compliance Certificate is so delivered (and thereafter the Pricing Level otherwise determined in accordance with this definition shall apply) and (y) as of the first Business
Day after an Event of Default shall have occurred and be continuing, and shall continue to so apply to but excluding the date on which such Event of Default is cured or waived (and thereafter the Pricing Level otherwise determined in accordance with
this definition shall apply).
In the event that Administrative Agent and Borrower determine that any financial statements previously
delivered were incorrect or inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for
any period (an Applicable Period) than the Applicable Margin applied for such Applicable Period, then (i) Borrower shall as soon as practicable deliver to Administrative Agent the corrected financial statements for such
Applicable Period, (ii) the Applicable Margin shall be determined as if the Pricing Level for such higher Applicable Margin were applicable for such Applicable Period and (iii) Borrower shall within three (3) Business Days thereof by
Administrative Agent pay to Administrative Agent the accrued additional amount owing as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by Administrative Agent in accordance with this
Agreement. This paragraph shall not limit the rights of Administrative Agent and Lenders with respect to Section 2.8 and Section 8.
Approved Electronic Communications means any notice, demand, communication, information, document or other material that
any Credit Party provides to an Agent pursuant to any Credit Document or the transactions contemplated therein which is distributed to the Agents or to the Lenders by means of electronic communications pursuant to Section 10.1(b).
Arrangers J.P. Morgan, GSLP and Morgan Stanley, each in its capacity as a joint lead arranger.
Asset Sale means a sale, lease or sub-lease (as lessor or sublessor), sale and leaseback, assignment, conveyance, exclusive
license (as licensor or sublicensor), transfer or other disposition to, or any exchange of property with, any Person (other than Borrower or any Guarantor Subsidiary), in one transaction or a series of transactions, of all or any part of
Borrowers or any of its Subsidiaries businesses, assets or properties of any kind, whether real, personal, or mixed and whether tangible or intangible, whether now owned or hereafter acquired, leased or licensed, including, the Equity
Interests of any of Borrowers Subsidiaries, other than:
(1)
inventory (or other assets, including, for greater certainty, Intellectual Property) sold, leased or licensed out in the ordinary course of business (excluding any such sales, leases or licenses out by operations or divisions discontinued or to be
discontinued);
-8-
(2) an issuance of Equity
Interests by a Subsidiary of Borrower to Borrower or to another Subsidiary (so long as such issuance would otherwise be permitted under Section 6.6) or the issuance of directors qualifying shares or of other nominal amounts of other
Equity Interests that are required to be held by specified Persons under Applicable Law;
(3) the sale or other disposition of cash or Cash Equivalents;
(4) a Restricted Junior Payment that is permitted by Section 6.4 or
Investment that is permitted by Section 6.6;
(5) the license of
Intellectual Property to third persons in the ordinary course of business;
(6) the sale, exchange or other disposition of accounts receivable in
connection with the compromise, settlement or collection thereof consistent with past practice;
(7) leases or subleases entered into in the ordinary course of business, to
the extent that they do not materially interfere with the business of Borrower or any of its Subsidiaries;
(8) the sale or other disposition of Investments under clause (c)(i) and
(k) of Section 6.6;
(9) sales, leases, licenses or other
dispositions of other assets for aggregate consideration not to exceed $100,000,000 for all such sales, leases or licenses in any Fiscal Year;
(10) sales, leases, licenses or other dispositions of assets to Borrower or any of its
respective Subsidiaries; provided that, if any such disposition involves a Credit Party and a Subsidiary that is not a Credit Party, then such disposition shall be made in compliance with Section 6.11; and
(11) the disposition of assets resulting in Cash proceeds satisfying the definition of
Net Insurance/Condemnation Proceeds and applied in accordance with Section 2.14(b).
For purposes of clarity, Asset
Sale shall not include the issuance of any Equity Interests of Borrower (including the issuance by any other Person of any warrant, right or option to purchase or other arrangements or rights to acquire any Equity Interests of Borrower).
Assignment Agreement means an Assignment and Assumption Agreement substantially in the form of Exhibit D, with such
amendments or modifications as may be approved by Administrative Agent.
Assignment Effective Date as defined in
Section 10.6(b).
Australian Collateral means: (a) all Collateral Documents governed by the laws of any state
or territory of Australia, and (b) all other Liens in respect of Collateral located in any state or territory of Australia (or taken to be located in any state or territory of Australia for the purposes of any stamp duty law).
Authorized Officer means, as applied to any Person, any individual holding the position of chairman of the board (if an
officer), chief executive officer, president, vice president (or the equivalent thereof), chief financial officer (or the equivalent thereof) or treasurer of such Person; provided that the secretary or assistant secretary of such Person shall
have delivered an incumbency certificate to the Administrative Agent as to the authority of such Authorized Officer.
Bankruptcy
Code means Title 11 of the United States Code entitled Bankruptcy, as now and hereafter in effect, or any successor statute.
Barbados Credit Party means each of Valeant Holdings (Barbados) SRL, Valeant International (Barbados) SRL, Biovail
Laboratories International (Barbados) SRL, Hythe Property Incorporated and each other Credit Party that is organized under the laws of Barbados.
-9-
Barbados Guarantee means the Barbados Guarantee Agreement, dated as of the
Third Restatement Date, by each Barbados Credit Party substantially in the form of Exhibit H-2, as it may be amended, restated, supplemented or otherwise modified from time to time.
Barbados Security Documents means each of the documents set forth on Schedule 5.10(a), dated as of the Third Restatement
Date, as each of such documents may be amended, restated, supplemented or otherwise modified from time to time and additional analogous agreements as may be entered into from time to time in accordance with Section 5.10 and as required by the
Collateral Documents.
Barclays as defined in the preamble hereto.
Base Rate means, for any day, a rate per annum equal to the greater of (i) the Prime Rate in effect on such day and
(ii) the Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1%. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively; provided, however, that notwithstanding the foregoing, the Base Rate in respect of
Tranche B Term Loans shall at no time be less than 1.75% per annum. On any day that Base Rate Loans are outstanding, in no event shall the Base Rate be less than the sum of (i) the Adjusted Eurodollar Rate (after giving effect to
the Adjusted Eurodollar Rate floor set forth in the definition thereof in the case of Tranche B Term Loans) that would be payable on such day for a Eurodollar Rate Loan with a one-month interest period plus (ii) the
difference between the Applicable Margin for Eurodollar Rate Loans and the Applicable Margin for Base Rate Loans.
Base Rate
Loan means a Loan bearing interest at a rate determined by reference to the Base Rate.
Bausch & Lomb
Acquisition means the acquisition of Bausch & Lomb Holdings Incorporated pursuant to the Bausch & Lomb Acquisition Agreement.
Bausch & Lomb Acquisition Agreement means the Agreement and Plan of Merger (together with all exhibits and
schedules thereto, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, collectively, the Bausch & Lomb Acquisition Agreement), dated as of May 24, 2013,
among the Borrower, VPI, one of VPIs wholly owned U.S. domiciled subsidiaries and Bausch & Lomb Holdings Incorporated.
Bausch & Lomb Additional Escrow Amount means an amount equal to (a) all interest that could accrue on the
Bausch & Lomb New Senior Notes from and including the date of issuance thereof to and including the Bausch & Lomb Termination Date and (b) all fees and expenses that are incurred in connection with the issuance of the
Bausch & Lomb New Senior Notes and all premium, fees, expenses or other amounts payable in connection with the Bausch & Lomb New Senior Notes Redemption.
Bausch & Lomb Equity Financing means the issuance and/or sale of equity or equity-linked securities of the
Borrower issued and/or sold, as applicable, to (i) finance a portion of the Bausch & Lomb Transactions or (ii) finance the repayment or prepayment of any outstanding Bausch & Lomb Interim Loans incurred to finance the
Bausch & Lomb Acquisition.
Bausch & Lomb Escrow Account means a deposit or securities account at a
financial institution (such institution, the Bausch & Lomb Escrow Agent) into which the Bausch & Lomb Escrowed Funds are deposited.
Bausch & Lomb Escrow Agent shall have the meaning given to such term in the definition of the term
Bausch & Lomb Escrow Account.
Bausch & Lomb Escrow Issuer means a newly-formed,
wholly-owned subsidiary of Borrower, which, prior to the consummation of the Bausch & Lomb Acquisition, shall have no operations, assets or activities, other than the entering into of the Bausch & Lomb New Senior Notes Documents,
the issuance of the Bausch & Lomb New Senior Notes, and activities incidental thereto, including the deposit of the Bausch & Lomb Escrow Funds in the Bausch & Lomb Escrow Account.
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Bausch & Lomb Escrowed Funds means an amount, in cash or Eligible
Escrow Investments, not to exceed the sum of (a) the issue price of the Bausch & Lomb New Senior Notes, plus (b) the Bausch & Lomb Additional Escrow Amount, plus (c) so long as they are retained in the
Bausch & Lomb Escrow Account, any income, proceeds or products of the foregoing.
Bausch & Lomb Interim
Loans means, collectively, the Bausch & Lomb Series A Interim Loans and the Bausch & Lomb Series B Interim Loans incurred pursuant to the Bausch & Lomb Senior Interim Loan Documents.
Bausch & Lomb New Senior Notes means debt securities issued after the Amendment No. 5 Effective Date of the
Bausch & Lomb Escrow Issuer to finance a portion of the Bausch & Lomb Transactions; provided that the net proceeds of such debt securities are deposited into the Bausch & Lomb Escrow Account upon the issuance
thereof.
Bausch & Lomb New Senior Notes Documents means the Bausch & Lomb New Senior Notes
Indenture, the Bausch & Lomb New Senior Notes Escrow Documents and any other documents entered into by the Borrower, VPI and/or Bausch & Lomb Escrow Issuer in connection with the Bausch & Lomb New Senior Notes;
provided that such documents shall require that (a) if the Bausch & Lomb Acquisition shall not be consummated on or before the Bausch & Lomb Termination Date, the Bausch & Lomb New Senior Notes shall be
redeemed in full (the Bausch & Lomb New Senior Notes Redemption) no later than the third Business Day after the Bausch & Lomb Termination Date and (b) the Bausch & Lomb Escrowed Funds shall be
released from the Bausch & Lomb Escrow Account before the Bausch & Lomb Termination Date or within three Business Days after the Bausch & Lomb Termination Date (A) upon the consummation of the Bausch & Lomb
Transactions and applied to finance a portion of the Bausch & Lomb Acquisition or (B) to effectuate the Bausch & Lomb New Senior Notes Redemption.
Bausch & Lomb New Senior Notes Escrow Documents means the agreement(s) governing the Bausch & Lomb Escrow
Account and any other documents entered into in order to provide the Bausch & Lomb Escrow Agent (or its designee) a Lien on the Bausch & Lomb Escrowed Funds.
Bausch & Lomb New Senior Notes Indenture means the indenture pursuant to which the Bausch & Lomb New
Senior Notes shall be issued.
Bausch & Lomb New Senior Notes Redemption shall have the meaning given to such
term in the definition of the term Bausch & Lomb New Senior Notes Documents.
Bausch & Lomb
Refinancing shall have the meaning given to such term in the definition of the term Bausch & Lomb Transactions.
Bausch & Lomb Senior Interim Loan Documents means customary documentation for interim unsecured bridge loans;
provided, that the Bausch & Lomb Interim Loans (i) are not guaranteed by any Subsidiary of the Borrower that is not a Guarantor, (ii) are not secured by a Lien on any assets of the Borrower or any of its Subsidiaries,
(iii) have a final maturity date not prior to the date that is at least 180 days after the latest Term Loan Maturity Date and (iv) the terms of such Bausch & Lomb Interim Loans do not provide for any scheduled repayment, mandatory
redemption or sinking fund obligations prior to the latest Term Loan Maturity Date (other than mandatory prepayments with any Cash proceeds from any Bausch & Lomb Equity Financing or from the issuance of Bausch & Lomb New Senior
Notes).
Bausch & Lomb Series A Interim Loans means senior unsecured interim loans incurred by the Borrower or
VPI in an aggregate principal amount not to exceed $3,275,000,000 to finance a portion of the Bausch & Lomb Transactions.
Bausch & Lomb Series B Interim Loans means senior unsecured interim loans incurred by the Borrower or VPI in an
aggregate principal amount not to exceed $1,700,000,000 to finance a portion of the Bausch & Lomb Transactions.
Bausch & Lomb Termination Date means 5:00 pm New York time on the sixth-month anniversary of the date of the
Bausch & Lomb Acquisition Agreement.
-11-
Bausch & Lomb Transactions means collectively, (a) the
Bausch & Lomb Acquisition and other related transactions contemplated by the Bausch & Lomb Acquisition Agreement; (b) the incurrence of new Term Loans hereunder pursuant to a Joinder Agreement in accordance with
Section 2.25 to be entered into after the Amendment No. 5 Effective Date; (c) the issuance of the Bausch & Lomb New Senior Notes; (d) the incurrence of the Bausch & Lomb Interim Loans, if any; (e) the
issuance and/or sale of the Bausch & Lomb Equity Financing; (f) the refinancing, repayment, termination and discharge of certain Indebtedness of Bausch & Lomb Holdings Incorporated (the Bausch & Lomb
Refinancing); and (g) the payment of all fees and expenses owing in connection with the foregoing.
Bausch & Lomb Unsecured Debt means, collectively, the Bausch & Lomb New Senior Notes and the
Bausch & Lomb Interim Loans.
Beneficiary means each Agent, Issuing Bank, Lender and Lender Counterparty.
BIA means the Bankruptcy and Insolvency Act (Canada).
Biovail Insurance means Biovail Insurance Incorporated, a company organized under the laws of Barbados.
Biovail Insurance Trust Indenture means the trust indenture dated as of June 25, 2003, entered into among Biovail
Insurance, Zurich Insurance Company and the other parties thereto.
Board of Governors means the Board of Governors of
the United States Federal Reserve System, or any successor thereto.
Borrower as defined in the preamble hereto.
Borrower Convertible Notes means Borrowers 5.375% Senior Convertible Notes due 2014, issued under that certain
indenture dated as of June 10, 2009, among Borrower, The Bank of New York Mellon, as trustee, and BNY Trust Company of Canada, as co-trustee.
Business Day means (i) any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the
State of New York or the Province of Ontario or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close and (ii) with respect to all notices, determinations, fundings
and payments in connection with the Adjusted Eurodollar Rate or any Eurodollar Rate Loans, the term Business Day means any day which is a Business Day described in clause (i) and which is also a day for trading by and between banks
in Dollar deposits in the London interbank market.
Canadian Confirmation of Guarantee and Security means the
Confirmation of Guarantee and Security to be executed as of the Third Restatement Date by each Canadian Credit Party, as it may be amended, restated, supplemented or otherwise modified form time to time.
Canadian Credit Party means Borrower and each other Credit Party that (i) is organized under the laws of Canada or any
province or territory thereof, (ii) carries on business in Canada, or (iii) has any title or interest in or to material property in Canada.
Canadian Dollars and the sign CDN$ mean the lawful money of Canada.
Canadian Employee Benefit Plans means all plans, arrangements, agreements, programs, policies, practices or undertakings,
whether oral or written, formal or informal, funded or unfunded, insured or uninsured, registered or unregistered to which a Canadian Credit Party is a party or bound or in which their employees participate or under which a Canadian Credit Party
has, or will have, any liability or contingent liability, or pursuant to which payments are made, or benefits are provided to, or an entitlement to payment or benefits may arise with respect to any of their employees or former employees, directors
or officers, individuals working on contract with a Canadian Credit Party or other individuals providing services to a Canadian Credit Party of a kind normally provided by employees (or
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any spouses, dependants, survivors or beneficiaries of any such person), but does not include the Canada Pension Plan that is maintained by the Government of Canada or any Employee Benefit Plan.
Canadian Guarantee means the Canadian Guarantee, dated as of June 29, 2011, by each Canadian Credit Party
satisfying clause (i) of the definition thereof substantially in the form of Exhibit H-1, as it may be amended, restated, supplemented or otherwise modified from time to time.
Canadian Pension Plan means all Canadian Employee Benefit Plans that are required to be registered under Canadian
provincial or federal pension benefits standards legislation.
Canadian Pension Plan Termination Event means an event
which would entitle a Person (without the consent of a Canadian Credit Party) to wind up or terminate a Canadian Pension Plan in full or in part, or the institution of any steps by any Person to withdraw from, terminate participation in, wind up or
order the termination or wind-up of, in full or in part, any Canadian Pension Plan, or the receipt by a Canadian Credit Party of correspondence from a Governmental Authority relating to a potential or actual, partial or full, termination or wind-up
of any Canadian Pension Plan, or an event respecting any Canadian Pension Plan which would result in the revocation of the registration of such Canadian Pension Plan or which could otherwise reasonably be expected to adversely affect the tax status
of any such Canadian Pension Plan.
Canadian Pledge and Security Agreement means the Canadian Pledge and Security
Agreement, dated as of June 29, 2011, by each Canadian Credit Party (satisfying clause (i) of the definition thereof) substantially in the form of Exhibit I-2, as it may be amended, restated, supplemented or otherwise modified from time to
time.
Capital Lease means, as applied to any Person, any lease of any property (whether real, personal or mixed) by
that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.
Cash means money, currency or a credit balance in any demand or Deposit Account.
Cash Equivalents means, as at any date of determination, any of the following: (i) marketable securities
(a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or the Government of Canada, or (b) issued by any agency of the United States Government or the Government of Canada, the
obligations of which are backed by the full faith and credit of such government, in each case maturing within one year after such date; (ii) marketable direct obligations issued by any state of the United States of America or any province of
Canada or any political subdivision of any such state or province or any public instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P
or at least P-1 from Moodys; (iii) commercial paper maturing no more than 270 days from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moodys; (iv) certificates of deposit or bankers acceptances maturing within one year after such date and issued or accepted by any Lender or by (a) any commercial bank organized under the laws of the United States of America or
any state thereof or the District of Columbia that (x) is at least adequately capitalized (as defined in the regulations of its primary Federal banking regulator) and (y) has Tier 1 capital (as defined in such regulations) of
not less than $500,000,000, or (b) any bank listed on Schedule I of the Bank Act (Canada) that has Tier 1 capital (as defined in OSFI Guideline A-1 on Capital Adequacy Requirements) of not less than CDN$500,000,000; (v) shares of any money
market mutual fund that (a) has substantially all of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less than $5,000,000,000, and
(c) has the highest rating obtainable from either S&P or Moodys; (vi) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (i) above and entered into with a
financial institution satisfying the criteria described in clause (iv) above; and (vii) other short-term investments utilized by Foreign Subsidiaries in accordance with normal investment practices for cash management in investments of the
type analogous to the foregoing.
Cash Management Agreement means any agreement or arrangement to provide treasury,
depository, overdraft, credit or debit card, purchase card, electronic funds transfer (including automated clearing house fund transfer services) and other cash management services.
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CBCA means the Canada Business Corporations
Act.
CCAA means the Companies Creditors Arrangement Act (Canada).
Change of Control means, at any time, (i) any Person or group (within the meaning of Rules 13d-3
and 13d-5 under the Exchange Act or Part XX of the Securities Act (Ontario)) (a) shall have acquired beneficial ownership of 35% or more on a fully diluted basis of the voting and/or economic interest in the Equity Interests of Borrower
or (b) shall have obtained the power (whether or not exercised) to elect a majority of the members of the board of directors (or similar governing body) of Borrower; (ii) Borrower shall cease, directly or indirectly, to beneficially own
and control 100% on a fully diluted basis of the economic and voting interest in the Equity Interests of VPI; or (iii) the majority of the seats (other than vacant seats) on the board of directors (or similar governing body) of Borrower shall
cease to be occupied by Persons who either (a) were members of the board of directors (or similar governing body) of Borrower immediately following the Third Restatement Date or (b) were nominated for election by the board of directors (or
similar governing body) of Borrower, a majority of whom were members of the board of directors (or similar governing body) of Borrower immediately following the Third Restatement Date or whose election or nomination for election was previously
approved by a majority of such members.
Class means (i) with respect to Lenders, each of the following classes of
Lenders: (a) Lenders having Tranche A Term Loan Exposure, (b) Lenders having Tranche B Term Loan Exposure, (c) Lenders (including Swing Line Lender) having Revolving Exposure and (d) Lenders having New Term Loan Exposure of each
applicable Series and (ii) with respect to Loans, each of the following classes of Loans: (a) Tranche A Term Loans, (b) Tranche B Term Loans, (c) Revolving Loans (including Swing Line Loans) and (d) each additional Series of
New Term Loans.
CNI Growth Amount means, on any date of determination, (a) 50% of Cumulative Consolidated Net
Income minus (b) (1) the aggregate amount at the time of determination of Restricted Junior Payments made since the Third Restatement Date using the CNI Growth Amount pursuant to Section 6.4(h) and (2) Investments made
since the Third Restatement Date using the CNI Growth Amount pursuant to Section 6.6(i).
Co-Syndication Agents as
defined in the preamble hereto.
Collateral means, collectively, all of the real, personal and mixed property
(including Equity Interests) in which Liens are purported to be granted pursuant to the Collateral Documents as security for the Obligations; provided that the Collateral shall not include any Acquisition Debt Escrowed Funds, the Escrowed
Funds, the Bausch & Lomb Escrowed Funds, any Acquisition Debt Escrow Account, the Escrow Account, the Bausch & Lomb Escrow Account, any Acquisition Debt Escrow Debt Documents, any of the New Senior Notes Documents, any of the
Bausch & Lomb Senior Interim Loan Documents or any of the Bausch & Lomb New Senior Notes Documents.
Collateral
Agent as defined in the preamble hereto.
Collateral Documents means the Second Amended and Restated Pledge
and Security Agreement, the Canadian Pledge and Security Agreement, the Barbados Security Documents, the U.S. Mortgages, the Canadian Mortgages, the Quebec Security Documents, the Luxembourg Security Documents, the Swiss Security Documents, the
Intellectual Property Security Agreements and all other instruments, documents and agreements delivered by or on behalf or at the request of any Credit Party pursuant to this Agreement, the Original Credit Agreement, the First Amended and Restated
Credit Agreement, the Second Amended and Restated Credit Agreement or any of the other Credit Documents in order to grant to, or perfect, preserve or protect in favor of, Collateral Agent, for the benefit of Secured Parties, a Lien on any real,
personal or mixed property of that Credit Party as security for the Obligations or to protect or preserve the interest of the Collateral Agent or the Secured Parties therein.
Collateral Questionnaire means a certificate substantially in the form of Exhibit M.
Commitment means any Revolving Commitment or Term Loan Commitment.
Compliance Certificate means a Compliance Certificate substantially in the form of Exhibit C.
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Consolidated Adjusted EBITDA means, for any period, an amount determined for
Borrower and its Subsidiaries on a consolidated basis equal to Consolidated Net Income for such period, plus, (i) to the extent deducted in determining Consolidated Net Income for such period, the sum, without duplication of amounts for:
(a) Consolidated Interest Expense;
(b) provisions for taxes based on income;
(c) total depreciation expense;
(d) total amortization expense;
(e) fees and expenses incurred in connection with the Transactions or the 2010
Transactions;
(f) non-cash non-recurring expenses or charges;
(g) (i) restructuring charges (which, for the avoidance of doubt, shall include
retention, severance, systems establishment costs, excess pension charges, contract termination costs and costs to consolidate facilities and relocate employees) not to exceed (x) $100,000,000 in any twelve-month period ending on or prior to
December 31, 2013 and (y) $125,000,000 in any twelve-month period ending after December 31, 2013 (in each case, other than such charges contemplated by the following clause (ii)) and (ii) (w) in any twelve-month period
ending on or prior to December 31, 2013, any restructuring charges (which, for the avoidance of doubt, shall include retention, severance, systems establishment costs, excess pension charges, contract termination costs and costs to consolidate
facilities and relocate employees and charges in connection with the termination or settlement of employee stock options, restricted stock units and performance stock units) in connection with the Medicis Acquisition, (x) on or prior to
December 31, 2014, any restructuring charges (which, for the avoidance of doubt, shall include retention, severance, systems establishment costs, excess pension charges, contract termination costs and costs to consolidate facilities and
relocate employees and charges in connection with the termination or settlement of employee stock options, restricted stock units and performance stock units) in connection with the Bausch & Lomb Acquisition, (y) on or prior to
March 31, 2016, any restructuring charges (which, for the avoidance of doubt, shall include retention, severance, systems establishment costs, excess pension charges, contract termination costs and costs to consolidate facilities and relocate
employees and charges in connection with the termination or settlement of employee stock options, restricted stock units and performance stock units) in connection with the Sun Acquisition and (z) any restructuring charges (which, for the
avoidance of doubt, shall include retention, severance, systems establishment costs, excess pension charges, contract termination costs and costs to consolidate facilities and relocate employees and charges in connection with the termination or
settlement of employee stock options, restricted stock units and performance stock units, in each case in existence as of the Original Closing Date) in connection with the Sanitas Acquisition, the Transactions or the 2010 Transactions;
(h) any extraordinary gain or loss and any expense or charge attributable to
the disposition of discontinued operations;
(i) (i) fees and expenses in
connection with any proposed or actual issuance of any Indebtedness or Equity Interests, or any proposed or actual acquisitions, investments, asset sales or divestitures permitted hereunder, in an aggregate amount not to exceed $75,000,000 in any
twelve month period (in each case, other than such fees and expenses contemplated by the following clause) and (ii) (x) fees and expenses in connection with the Medicis Acquisition, (y) fees and expenses in connection with the
Bausch & Lomb Acquisition and (z) fees and expenses in connection with the Sun Acquisition;
(j) other non-Cash charges (including impairment charges and other write offs
of intangible assets and goodwill but excluding any such non-Cash charge to the extent that it represents an accrual or reserve for potential Cash items in any future period or amortization of a prepaid Cash charge that was paid in a prior period);
and
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(k) the amount of costs savings
and synergies projected by Borrower in good faith to be realized on or prior to September 30, 2012 as a result of the 2010 Transactions, net of the amount of actual cost savings and synergies realized during such period as a result of the 2010
Transactions; provided that (i) such cost savings and synergies are (A) reasonably identifiable, (B) factually supportable and (C) certified by the chief financial officer (or the equivalent thereof) of Borrower and
(ii) the aggregate amount of such cost savings and synergies increasing Consolidated Adjusted EBITDA pursuant to this clause (k) shall not exceed $140,000,000; minus
(ii) non-Cash gains increasing Consolidated Net Income for such period (excluding any such non-Cash gain to the extent it represents the reversal of an
accrual or reserve for potential Cash items in any prior period and any such non-Cash gain relating to Cash received in a prior period (or to be received in a future period)).
Consolidated Capital Expenditures means, for any period, the aggregate of all expenditures of Borrower and its Subsidiaries
during such period determined on a consolidated basis that, in accordance with GAAP, are or should be included in purchase of property and equipment or similar items reflected in the consolidated statement of cash flows of Borrower and
its Subsidiaries; provided that Consolidated Capital Expenditures shall not include any expenditures (i) for replacements and substitutions for fixed assets, capital assets or equipment to the extent made with Net Insurance/Condemnation
Proceeds invested pursuant to Section 2.14(b) or with Net Asset Sale Proceeds invested pursuant to Section 2.14(a), (ii) which constitute a Permitted Acquisition permitted under Section 6.8, (iii) made by Borrower or any of
its Subsidiaries to effect leasehold improvements to any property leased by Borrower or such Subsidiary as lessee, to the extent that such expenses have been reimbursed by the landlord or (iv) made with the proceeds from the issuance of Equity
Interests of Borrower permitted hereunder that are Not Otherwise Applied.
Consolidated Current Assets means, as at any
date of determination with respect to any Person, the total assets of such Person and its Subsidiaries on a consolidated basis that may properly be classified as current assets in conformity with GAAP, excluding Cash and Cash Equivalents.
Consolidated Current Liabilities means, as at any date of determination with respect to any Person, the total liabilities
of such Person and its Subsidiaries on a consolidated basis that may properly be classified as current liabilities in conformity with GAAP, excluding the current portion of long term debt.
Consolidated Excess Cash Flow means, for any period, an amount (if positive) equal to:
(i) the sum, without duplication, of the amounts for such period of
(a) Consolidated Net Income, plus, (b) to the extent reducing Consolidated Net Income, the sum, without duplication, of amounts for non Cash charges reducing Consolidated Net Income (including for depreciation and amortization and
impairment charges and other write offs of intangible assets and goodwill but excluding any such non Cash charge to the extent that it represents an accrual or reserve for a potential Cash charge in any future period or amortization of a prepaid
Cash charge that was paid in a prior period), plus (c) the Consolidated Working Capital Adjustment, minus
(ii) the sum, without duplication, of (a) the amounts for such period
paid from Internally Generated Cash of (1) scheduled repayments of Indebtedness for borrowed money (excluding repayments of Revolving Loans or Swing Line Loans except to the extent the Revolving Commitments are permanently reduced in connection
with such repayments) and scheduled repayments of obligations under Capital Leases (excluding any interest expense portion thereof), (2) Consolidated Capital Expenditures and (3) the aggregate amount of any premium, make-whole or penalty
payments actually paid in Cash by the Borrower or any of its Subsidiaries during such period that are required to be made in connection with any prepayment of Indebtedness, plus (b) other non Cash gains increasing Consolidated Net Income
for such period (excluding any such non Cash gain to the extent it represents the reversal of an accrual or reserve for a potential Cash charge in any prior period), plus (c) the aggregate amount of Restricted Junior Payments made in
Cash by Borrower or any of its Subsidiaries during such period pursuant to clauses (d) and (g) of Section 6.4 using Internally Generated Cash, except to the extent that such Restricted Junior Payments are made to fund expenditures
that reduce Consolidated Net Income, plus (d) the aggregate amount of Investments or other acquisitions made in cash by Borrower or any of its Subsidiaries during such period pursuant to clauses (g), (h), (i), (j), (k) and
(l) of Section 6.6 (other than any intercompany Investments) or clause (h) of Section 6.8,
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in each case, using Internally Generated Cash. As used in this clause (ii), scheduled repayments of Indebtedness do not include mandatory prepayments or voluntary prepayments thereof.
Consolidated Interest Expense means, for any period, (a) total interest expense (including imputed interest
expense in respect of obligations under Capital Leases as determined in accordance with GAAP as well as interest required to be capitalized in accordance with GAAP) of Borrower and its Subsidiaries on a consolidated basis for such period with
respect to all outstanding Indebtedness of Borrower and its Subsidiaries, including all commissions, discounts and other fees and charges owed with respect to letters of credit and the net effect of Interest Rate Agreements, but excluding, however,
any amount not payable in Cash during such period and any amounts referred to in Section 2.11(c) payable on or before the Third Restatement Date, minus (b) total interest income of Borrower and its Subsidiaries on a consolidated
basis for such period.
Consolidated Net Income means, for any period, the net income (or loss) of Borrower and its
Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP, provided that there will be excluded (a) the income (or loss) of any Person (other than a Subsidiary of
Borrower) in which any other Person (other than Borrower or any of its Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to Borrower or any of its Subsidiaries by such Person
during such period, (b) except as otherwise expressly provided herein, the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Borrower or is merged into or consolidated with Borrower or any of its Subsidiaries
or the income (or loss) in respect of the assets of any Person accrued prior to the date such assets are acquired by Borrower or any of its Subsidiaries, (c) the income of any Subsidiary of Borrower (other than any such Subsidiary that is a
Credit Party) during such period to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary, (d) any after tax gains or losses attributable to Asset Sales and casualty or condemnation events (of the type described in the
definition of Net Insurance/Condemnation Proceeds) or returned surplus assets of any Pension Plan, in each case accrued during such period, (e) (to the extent not included in clauses (a) through (d) above) any net
extraordinary gains or net extraordinary losses accrued during such period, (f) the cumulative effect of a change in accounting principles and (g) solely for purposes of calculating the CNI Growth Amount for such period, amortization or
depreciation expense incurred during such period with respect to assets that are used or useful in the business or lines of business in which Borrower and/or its Subsidiaries are engaged as of the Third Restatement Date or similar or related or
ancillary businesses; provided further that, without duplication of amounts included in clause (a) of the preceding proviso, the net income of a Specified Joint Venture for such period shall be included in the calculation of
Consolidated Net Income in proportion to Borrower and its Subsidiaries Equity Interests in such Specified Joint Venture (provided that the net income of all Specified Joint Ventures included pursuant to this proviso for any period shall
not exceed 10% of the aggregate Consolidated Net Income for Borrower and its Subsidiaries for such period); provided, further, that, without duplication of any amounts that may be eligible to be included in clause (a) of the first
proviso, the net income of a Permitted Majority Investment for such period shall be included in the calculation of Consolidated Net Income in proportion to Borrower and its Subsidiaries Equity Interests in such Permitted Majority Investment.
Consolidated Secured Indebtedness means, as of any date of determination, Consolidated Total Debt that is secured by a
Lien on any assets of Borrower and its Subsidiaries.
Consolidated Total Assets means, as of any date of determination,
the total assets of Borrower and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.
Consolidated
Total Debt means, as at any date of determination, the aggregate principal amount of all Indebtedness of Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP (net of unrestricted and unencumbered Cash
and Cash Equivalents of Borrower and its Subsidiaries as of such date in an amount not to exceed $600,000,000), provided that the term Indebtedness (for purposes of this definition) shall not include any letter of credit, except
to the extent of unreimbursed amounts thereunder, provided that Consolidated Total Debt shall not include (x) any unreimbursed amount under commercial letters of credit until one (1) day after such amount is drawn and (y) the
Net Mark-to-Market Exposure of any Hedge Agreement, provided further that, for purposes of the definition of Consolidated Total Debt the Indebtedness in respect of convertible debt securities shall be deemed to be the aggregate
principal amount thereof outstanding as of such date of determination.
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Consolidated Working Capital means, as at any date of determination, the
Consolidated Current Assets of Borrower minus the Consolidated Current Liabilities of Borrower, in each case as of such date. Consolidated Working Capital at any date may be a positive or negative number.
Consolidated Working Capital Adjustment means, for any period on a consolidated basis, the Consolidated Working Capital as
of the beginning of such period minus the Consolidated Working Capital as of the end of such period. The Consolidated Working Capital Adjustment for any period may be a positive or negative number. In calculating the Consolidated Working
Capital Adjustment there shall be excluded the effect of reclassification during such period of current assets to long term assets and current liabilities to long term liabilities and the effect of any Permitted Acquisition during such period.
Contractual Obligation means, as applied to any Person, any provision of any Security issued by that Person or of any
indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.
Contribution Agreement means a contribution agreement substantially in the form of Exhibit L among the Credit Parties and
Administrative Agent.
Conversion/Continuation Date means the effective date of a continuation or conversion, as the
case may be, as set forth in the applicable Conversion/Continuation Notice.
Conversion/Continuation Notice means a
Conversion/Continuation Notice substantially in the form of Exhibit A-2.
Corresponding Debt as defined in
Section 10.30(b).
Counterpart Agreement means a Counterpart Agreement substantially in the form of Exhibit G
delivered by a Credit Party pursuant to Section 5.10 or a similar agreement, in form and substance reasonably acceptable to the Administrative Agent, pursuant to which any Credit Party becomes a Guarantor hereunder. Such Counterpart Agreement
may, if reasonably requested by Borrower, include limitations on guarantees applicable to such Subsidiary and required under Applicable Law.
Credit Date means the date of a Credit Extension.
Credit Document means any of this Agreement, the Notes, if any, the Canadian Guarantee, the Barbados Guarantee, the
Counterpart Agreements, if any, the Collateral Documents, the Canadian Confirmation of Guarantee and Security, any documents or certificates executed by Borrower in favor of Issuing Bank relating to Letters of Credit, and all other documents,
instruments or agreements executed and delivered by or on behalf of or at the request of a Credit Party (or any officer of a Credit Party pursuant to the terms hereof) for the benefit of any Agent, Issuing Bank or any Lender in connection herewith
on or after the date hereof and all annexes, appendices, schedules and exhibits to any of the foregoing, as may be amended, restated, supplemented or otherwise modified from time to time.
Credit Extension means the making of a Loan or the issuing of a Letter of Credit.
Credit Party means Borrower and each Guarantor.
Cumulative Consolidated Net Income means, as of any date of determination, Consolidated Net Income of Borrower and its
Subsidiaries for the period (taken as one accounting period) commencing on the first day of the Fiscal Quarter of Borrower ending on September 30, 2011 and ending on the last day of the most recently ended Fiscal Quarter or Fiscal Year, as
applicable, for which financial statements required to be delivered pursuant to Section 5.1(a) or Section 5.1(b), and the related Compliance Certificate required to be delivered pursuant to Section 5.1(c), have been received by
Administrative Agent.
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Currency Agreement means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar agreement or arrangement, each of which is for the purpose of hedging the foreign currency risk associated with Borrowers and its Subsidiaries operations and
not for speculative purposes.
Default means a condition or event that, after notice or lapse of time or both, would
constitute an Event of Default.
Default Excess means, with respect to any Funds Defaulting Lender, the excess, if any,
of such Defaulting Lenders Pro Rata Share of the aggregate outstanding principal amount of Loans of all Lenders (calculated as if all Funds Defaulting Lenders (including such Funds Defaulting Lender) had funded all of their respective
Defaulted Loans) over the aggregate outstanding principal amount of all Loans of such Funds Defaulting Lender.
Default
Period means, (x) with respect to any Funds Defaulting Lender, the period commencing on the date that such Lender became a Funds Defaulting Lender and ending on the earliest of: (i) the date on which all Commitments are cancelled
or terminated and/or the Obligations are declared or become immediately due and payable, (ii) the date on which (a) the Default Excess with respect to such Defaulting Lender shall have been reduced to zero (whether by the funding by such
Defaulting Lender of any Defaulted Loans of such Defaulting Lender or by the non pro rata application of any voluntary or mandatory prepayments of the Loans in accordance with the terms of Section 2.13 or Section 2.14 or by a combination
thereof) or such Defaulting Lender shall have paid all amounts due under Section 9.6, as the case may be, and (b) such Defaulting Lender shall have delivered to Borrower and Administrative Agent a written reaffirmation of its intention to
honor its obligations hereunder with respect to its Commitments, and (iii) the date on which Borrower, Administrative Agent and Requisite Lenders waive all failures of such Defaulting Lender to fund or make payments required hereunder in
writing; and (y) with respect to any Insolvency Defaulting Lender, the period commencing on the date such Lender became an Insolvency Defaulting Lender and ending on the earliest of the following dates: (i) the date on which all
Commitments are cancelled or terminated and/or the Obligations are declared or become immediately due and payable and (ii) the date that such Defaulting Lender ceases to hold any portion of the Loans or Commitments.
Defaulted Loan means any Revolving Loan or portion of any unreimbursed payment under Section 2.3(b)(v) or 2.4(e) not
made by any Lender when required hereunder.
Defaulting Lender means any Funds Defaulting Lender or Insolvency
Defaulting Lender.
Defined Benefit Plan means any Canadian Employee Benefit Plan which contains a defined
benefit provision, as defined in subsection 147.1(1) of the Income Tax Act (Canada).
Delayed Draw
Commitment as defined in the Second Amended and Restated Credit Agreement.
Delayed Draw Term Loan means a
Tranche A Term Loan made by a Lender pursuant to Section 2.1(a)(ii) of the Second Amended and Restated Credit Agreement.
Deposit Account means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit
union or like organization, other than an account evidenced by a negotiable certificate of deposit.
Dermik Acquisition
means the acquisition of certain assets and rights, and assumption of certain liabilities, relating to Dermik, a business unit of Sanofi, by Borrower and certain of its wholly-owned Subsidiaries pursuant to that certain asset purchase agreement,
dated as of July 8, 2011, by and among Sanofi, Borrower and Valeant International (Barbados) SRL, including the disclosure letter, schedules, annexes and exhibits attached thereto and all material documents related to the consummation of the
transactions contemplated thereby, as amended, modified and supplemented.
Designated Noncash Consideration means
non-Cash consideration received by Borrower or any of its Subsidiaries in connection with an Asset Sale that is designated by Borrower as Designated Noncash Consideration, less the amount of Cash received in connection with a subsequent sale of such
Designated Noncash Consideration,
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which Cash shall be considered Net Asset Sale Proceeds received as of such date and shall be applied pursuant to Section 2.14(a).
Disqualified Equity Interests means any Equity Interest which, by its terms (or by the terms of any security or other
Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (i) matures or is mandatorily redeemable (other than solely for Equity Interests which are not otherwise
Disqualified Equity Interests), pursuant to a sinking fund obligation or otherwise, (ii) is redeemable at the option of the holder thereof (other than solely for Equity Interests which are not otherwise Disqualified Equity Interests), in whole
or in part, (iii) provides for scheduled payments or dividends in cash, or (iv) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each
case, prior to the date that is 91 days after the latest Term Loan Maturity Date, except, in the case of clauses (i) and (ii), if as a result of a change of control or asset sale, so long as any rights of the holders thereof upon the occurrence
of such a change of control or asset sale event are subject to the prior payment in full of all Obligations (other than contingent amounts not yet due), the cancellation or expiration of all Letters of Credit and the termination of the Commitments).
Dollars and the sign $ mean the lawful money of the United States of America.
Domestic Subsidiary means any Subsidiary organized under the laws of the United States of America, any State thereof or the
District of Columbia.
Eligible Assignee means any Person other than a natural Person that is (i) a Lender, an
Affiliate of any Lender or a Related Fund (any two or more Related Funds being treated as a single Eligible Assignee for all purposes hereof) or (ii) a commercial bank, insurance company, investment or mutual fund or other entity that is an
accredited investor (as defined in Regulation D under the Securities Act or as defined under the Canadian Securities Administrators National Instrument 45-106, as amended, supplemented, replaced or otherwise modified from time to time)
and which extends credit or buys loans in the ordinary course of business; provided, neither any Credit Party nor any Affiliate thereof shall be an Eligible Assignee.
Eligible Escrow Investments means (x)(1) securities issued or directly and fully guaranteed or insured by the U.S.
government or any agency or instrumentality thereof (provided, that the full faith and credit of the U.S. is pledged in support thereof) having repricings or maturities of not more than one year from the date of acquisition; (2) certificates of
deposit and time deposits with maturities of one year or less from the date of acquisition, bankers acceptances with maturities not exceeding one year and overnight bank deposits, in each case, with any United States commercial bank having
capital and surplus in excess of $500,000,000 and a Thomson Bank Watch Rating of B or better; (3) repurchase obligations with a term of not more than 14 days for underlying securities of the types described in clauses (1) and
(2) above entered into and (y) money market funds that invest solely in investments of the kinds described in clauses (1) through (3) of subclause (x) above.
Employee Benefit Plan means, in respect of any Credit Party, any employee benefit plan as defined in
Section 3(3) of ERISA which is or was sponsored, maintained or contributed to by, or required to be contributed by, Borrower, any of its Subsidiaries or any of its ERISA Affiliates in each case other than any Canadian Employee Benefit Plan.
Environmental Claim means any notice of violation, claim, legal charge, action, suit, proceeding, demand, abatement
order or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of or liability under any Environmental Law;
(ii) in connection with any Hazardous Material or any actual or alleged Release or threat of Release of any Hazardous Materials; or (iii) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural
resources or the environment.
Environmental Laws means the common law, any and all foreign or domestic, federal, state
or provincial (or any subdivision of either of them) statutes, ordinances, by-laws, orders, rules, codes, guidelines, regulations, judgments, Governmental Authorizations, or any other requirements of Governmental Authorities relating to (i) the
generation, use, storage, treatment, presence, handling, abatement, remediation, transportation or Release or threat of Release of Hazardous Materials; (ii) as it relates to exposure to Hazardous Materials, occupational safety and health
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and industrial hygiene; or (iii) land use or the protection of the environment, natural resources, or human, plant or animal safety, health or welfare, in each of cases (i) through
(iii), in any manner applicable to Borrower or any of its Subsidiaries or any Facility.
Equity Interests means any and
all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and membership
interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing (excluding convertible securities to the extent constituting Indebtedness for purposes of this Agreement).
Equivalent Amount means, at any time, (a) with respect to Dollars or an amount denominated in Dollars, such
amount and (b) with respect to an amount denominated in a currency other than Dollars, the equivalent amount thereof in Dollars at such time on the basis of the Spot Rate as of such time for the purchase of Dollars with such currency.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor thereto.
ERISA Affiliate means, as applied to any Person, (i) any corporation which is a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (ii) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common
control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (iii) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue
Code of which that Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member. Any former ERISA Affiliate of Borrower or any of its Subsidiaries shall continue to be considered
an ERISA Affiliate of Borrower or any such Subsidiary within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of Borrower or such Subsidiary and with respect to liabilities arising after such period for
which Borrower or such Subsidiary could be liable under the Internal Revenue Code or ERISA.
ERISA Event means
(i) a reportable event within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30 day notice to the PBGC has been waived by
regulation); (ii) the failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Internal Revenue Code) or
the failure to make by its due date a required installment under Section 430(j) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (iii) the provision by
the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal by Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to Borrower, any of its Subsidiaries or any of their respective
ERISA Affiliates pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which might constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan; (vi) the imposition of liability on Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA
or by reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal of Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and
4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefore, or the receipt by Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or omission which could give rise to the
imposition on Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l),
or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or
against Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee
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Benefit Plan; (x) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under
Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the
Internal Revenue Code; or (xi) the imposition of a Lien on the assets of Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 430(k) of the Internal Revenue Code or ERISA or a violation of
Section 436 of the Internal Revenue Code by Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates.
Escrow Account means a deposit or securities account at a financial institution (such institution, the Escrow
Agent) into which the Escrowed Funds are deposited.
Escrow Acquisition has the meaning given to such term in
the definition of the term Acquisition Escrow Debt.
Escrow Acquisition Termination Date means the
agreed termination date of any Escrow Acquisition.
Escrow Agent shall have the meaning given to such term
in the definition of the term Escrow Account.
Escrow Issuer means a newly-formed, wholly-owned
subsidiary of Borrower, which, prior to the consummation of the Medicis Acquisition, shall have no operations, assets or activities, other than the entering into of the New Senior Notes Documents, the issuance of the New Senior Notes, and activities
incidental thereto, including the deposit of the Escrow Funds in the Escrow Account.
Escrowed Funds means an amount,
in cash or Eligible Escrow Investments, not to exceed the sum of (a) the issue price of the New Senior Notes, plus (b) the Additional Escrow Amount, plus (c) so long as they are retained in the Escrow Account, any income, proceeds or
products of the foregoing.
Eurodollar Rate means for any Interest Period as to any Eurodollar Rate Loan, (i) the
rate per annum determined by the Administrative Agent to be the offered rate which appears on the page of the Reuters Screen which displays the London interbank offered rate administered by ICE Benchmark Administration Limited (such page currently
being the LIBOR01 page) (the LIBO Rate) for deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period in Dollars, determined as of approximately 11:00 a.m. (London, England
time), two Business Days prior to the commencement of such Interest Period, (ii) in the event the rate referenced in the preceding clause (i) does not appear on such page or service or if such page or service shall cease to be available,
the rate determined by the Administrative Agent to be the offered rate on such other page or other service which displays the LIBO Rate for deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest
Period in Dollars, determined as of approximately 11:00 a.m. (London, England time) two Business Days prior to the commencement of such Interest Period or (iii) in the event the rates referenced in the preceding clauses (i) and
(ii) are not available, the rate per annum determined by the Administrative Agent to be the average offered quotation rate by major banks in the London interbank market to Barclays for deposits (for delivery on the first day of the relevant
period) in Dollars of amounts in same day funds comparable to the principal amount of the Eurodollar Rate Loan for which the Eurodollar Rate is then being determined with maturities comparable to such Interest Period as of approximately 11:00 a.m.
(London, England time) two Business Days prior to the commencement of such Interest Period; provided that if LIBO Rates are quoted under either of the preceding clauses (i) or (ii), but there is no such quotation for the Interest Period
elected, the LIBO Rate shall be equal to the Interpolated Rate; provided, further that if any such rate determined pursuant to the preceding clauses (i), (ii) or (iii) is below zero, the Eurodollar Rate will be deemed to be zero.
Eurodollar Rate Loan means a Loan bearing interest at a rate determined by reference to the Adjusted Eurodollar Rate.
Event of Default means each of the conditions or events set forth in Section 8.1.
Exchange Act means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.
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Excluded Subsidiary means (a) any Subsidiary that is not a wholly-owned
Subsidiary and (b) any Immaterial Subsidiary.
Excluded Taxes means, with respect to any Agent, any Lender
(including each Swing Line Lender and Issuing Bank) or any other recipient of any payment to be made by or on account of any obligation of any Credit Party hereunder or under any other Credit Document, (a) any Taxes imposed on (or measured by)
its net income or profits (or any franchise or similar Taxes in lieu thereof) or, in the case of Canada, capital, by a jurisdiction as a result of (i) the recipient being organized, resident or, in the case of any Lender, having its lending
office located or (ii) the recipient carrying on or being engaged in or being deemed to carry on or be engaged in a trade or business (including having a permanent establishment) for Tax purposes (other than any trade or business arising or
deemed to arise from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transactions pursuant to, or enforced,
any Credit Documents), in such jurisdiction (including any political subdivision of such jurisdiction), (b) any branch profits tax within the meaning of section 884(a) of the Internal Revenue Code or similar Tax imposed by any jurisdiction
described in clause (a) and (c) any withholding tax (including U.S. federal backup withholding tax) that is attributable to a Lenders failure to comply with Section 2.20(d).
Existing Revolving Loans as defined in Section 2.26(b).
Existing Revolving Tranche as defined in Section 2.26(b).
Existing Term Loan Tranche as defined in Section 2.26(a).
Existing Tranche shall mean any Existing Term Loan Tranche or Existing Revolving Tranche, as applicable.
Extended Revolving Commitments as defined in Section 2.26(b).
Extended Revolving Loans as defined in Section 2.26(b).
Extended Revolving Loan Exposure means, with respect to any Lender, as of any date of determination, the outstanding
principal amount of the Extended Revolving Loans of such Lender.
Extended Term Loans as defined in
Section 2.26(a).
Extended Term Loan Exposure means, with respect to any Lender, as of any date of determination,
the outstanding principal amount of the Extended Term Loans of such Lender.
Extending Lender as defined in
Section 2.26(c).
Extension Amendment as defined in Section 2.26(d).
Extension Date means any date on which any Existing Term Loan Tranche or Existing Revolving Tranche is modified to extend
the related scheduled maturity date(s) in accordance with Section 2.26 (with respect to the Lenders under such Existing Term Loan Tranche or Existing Revolving Tranche which agree to such modification).
Extension Election as defined in Section 2.26(c).
Extension Request means any Term Loan Extension Request or Revolving Extension Request.
Extension Tranche means all Extended Term Loans of the same tranche or Extended Revolving Commitments of the same tranche
that are established pursuant to the same Extension Amendment (or any subsequent Extension Amendment to the extent such Extension Amendment expressly provides that the Extended Term Loans or Extended Revolving Commitments, as applicable, provided
for therein are intended to be a part of any previously established Extension Tranche).
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Facility means any real property (including all buildings, fixtures or other
improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by Borrower or any of its Subsidiaries or any of their respective predecessors or Affiliates.
Federal Funds Effective Rate means, for any day, the rate per annum (expressed as a decimal, rounded upwards, if necessary,
to the next higher 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided that, (i) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published
on the next succeeding Business Day, and (ii) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average (rounded upwards, if necessary, to the next higher 1/100 of 1%) of the
quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
Financial Officer Certification means, with respect to the financial statements for which such certification is required,
the certification of the chief financial officer (or the equivalent thereof) of Borrower that such financial statements fairly present, in all material respects, the financial condition of Borrower and its Subsidiaries as at the dates indicated and
the results of their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year end adjustments.
Financial Plan as defined in Section 5.1(i).
First Amended and Restated Credit Agreement as defined in the recitals.
First Restatement Date means August 10, 2011.
First Priority means, with respect to any Lien purported to be created in any Collateral pursuant to any Collateral
Document, that such Lien is the only Lien to which such Collateral is subject, other than any Permitted Lien.
Fiscal
Quarter means a fiscal quarter of any Fiscal Year.
Fiscal Year means the fiscal year of Borrower and its
Subsidiaries ending on December 31 of each calendar year.
Flood Hazard Property means any Real Estate Asset
subject to a Mortgage in favor of Collateral Agent, for the benefit of the Secured Parties, and located in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards.
Foreign Security Agreements as defined in Section 10.29.
Foreign Subsidiary means any Subsidiary that is not a Domestic Subsidiary.
French Parallel Debt as defined in Section 10.30(a).
French Security Documents as defined in Section 10.30.
Funding Notice means a notice substantially in the form of Exhibit A-1.
Funds Defaulting Lender means any Lender who (i) defaults in its obligation to fund any Revolving Loan or its portion
of any unreimbursed payment under Section 2.3(b)(v) or 2.4(e) or its Pro Rata Share of any payment under Section 9.6, (ii) has notified Borrower or Administrative Agent in writing, or has made a public statement, that it does not
intend to comply with its obligation to fund any Revolving Loan or its portion of any unreimbursed payment under Section 2.3(b)(v) or 2.4(e) or its Pro Rata Share of any payment under Section 9.6, (iii) has failed to confirm that it
will comply with its obligation to fund any Revolving Loan or its portion of any unreimbursed payment under Section 2.3(b)(v) or 2.4(e) or its Pro Rata Share of any payment under Section 9.6 within five Business Days
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after written request for such confirmation from Administrative Agent (which request may only be made after all conditions to funding have been satisfied); provided that such Lender shall
cease to be a Funds Defaulting Lender upon receipt of such confirmation by Administrative Agent, or (iv) has failed to pay to Administrative Agent or any other Lender any amount (other than its portion of any Revolving Loan or amounts required
to be paid under Section 2.3(b)(v), 2.4(e) or 9.6 or any other amount that is de minimis) due under any Credit Document within five Business Days of the date due, unless such amount is the subject of a good faith dispute.
GAAP means, subject to the limitations on the application thereof set forth in Section 1.2, United States generally
accepted accounting principles in effect as of the date of determination thereof.
Governmental Acts means any act or
omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority.
Governmental Authority means any federal, state, provincial, territorial, municipal, national or other government,
governmental department, commission, board, bureau, court, agency, organization, central bank, tribunal or instrumentality or political subdivision thereof or any other entity, officer or examiner exercising executive, legislative, judicial,
regulatory, governmental (quasi-governmental) or administrative functions of or pertaining to any government or any court or central bank, in each case whether associated with a state of the United States, the United States, a province or territory
of Canada, Canada, Barbados, or a foreign entity or government.
Governmental Authorization means any permit, license,
approval, authorization, plan, directive, direction, certificate, accreditation, registration, notice, agreement, consent order or consent decree or other like instrument of, from or required by any Governmental Authority.
Grantor means Borrower and each of its Subsidiaries, in each case granting a Lien to Collateral Agent to secure any
Obligations.
GSLP as defined in the preamble hereto.
Guarantee of or by any Person (the guarantor) means any obligation, contingent or otherwise, of the
guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the primary obligor) in any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the
payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to
support such Indebtedness or obligation, provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The term Guarantee as a verb has a corresponding meaning.
Guaranteed Obligations as defined in Section 7.1.
Guarantor means, (i) on the Third Restatement Date, each of Borrowers Subsidiaries listed on Schedule 1.1(b) and
(ii) thereafter, any Person that executes a Counterpart Agreement, pursuant to Section 5.10.
Guarantor
Subsidiary means each Guarantor other than Borrower.
Guaranty means the guaranty of each Guarantor set forth
in Section 7.
Hazardous Materials means any chemical, material or substance: (i) that is prohibited,
limited, restricted or otherwise regulated under Environmental Laws, (ii) that may or could reasonably be expected to pose a hazard to the health and safety of the owners, occupants or any Persons in the vicinity of any Facility or to the
indoor or outdoor environment, or (iii) that are included in the definition of hazardous substances, waste, hazardous waste,
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hazardous materials, toxic substances, pollutants, polluting substance, contaminants, contamination, dangerous
goods, deleterious substances or words of similar import under any Environmental Law.
Hedge
Agreement means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments
or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value, any Interest Rate Agreement or any similar transaction or combination of these transactions; provided that no phantom stock
or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of Borrower or any of its Subsidiaries shall be a Hedge Agreement.
Highest Lawful Rate means the maximum lawful interest rate, if any, that at any time or from time to time may be contracted
for, charged, or received under the laws applicable to any Lender which are presently in effect or, to the extent allowed by law, under such Applicable Law which may hereafter be in effect and which allow a higher maximum nonusurious interest rate
than Applicable Law now allows.
Historical Financial Statements means as of the Third Restatement Date, (i) the
audited consolidated financial statements of Borrower and its Subsidiaries, for the immediately preceding three Fiscal Years ended more than 90 days prior to the Third Restatement Date, consisting of consolidated balance sheets and the related
consolidated statements of income, stockholders equity and cash flows for such Fiscal Years, and (ii) the unaudited consolidated financial statements of Borrower and its Subsidiaries as of the most recent ended Fiscal Quarter after the
date of the most recent audited consolidated financial statements and ended at least 45 days prior to the Third Restatement Date, consisting of a consolidated balance sheet and the related consolidated statements of income and cash flows for the
three-, six- or nine-month period, as applicable, ending on such date, and, in each case, certified by the chief financial officer of Borrower that they fairly present, in all material respects, the financial condition of Borrower and its
Subsidiaries, respectively, as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year end adjustments and the absence of footnotes in the
case of the unaudited consolidated financial statements.
Immaterial Subsidiary means any Subsidiary of Borrower,
designated in writing to Administrative Agent by Borrower as an Immaterial Subsidiary, that, individually and collectively with all other Immaterial Subsidiaries as of the relevant date of determination, has (i) total assets as of
such date of less than 7.5% of Consolidated Total Assets as of such date and (ii) total revenues for the ended four-fiscal-quarter period most recently ended prior to such date of less than 7.5% of the consolidated total revenues
of Borrower and its Subsidiaries for such period. It is understood and agreed that Borrower may, from time to time, redesignate any Immaterial Subsidiary as a non-Immaterial Subsidiary to the extent that the requirements set forth in
Section 5.10 are satisfied with respect to such Subsidiary at or prior to the date of such redesignation.
Increased Amount
Date as defined in Section 2.25.
Increased Cost Lender as defined in Section 2.23.
Indebtedness means, as applied to any Person, without duplication, (i) all indebtedness of such Person for borrowed
money (including for the avoidance of doubt, convertible debt securities); (ii) that portion of obligations of such Person with respect to Capital Leases that is properly classified as a liability on a balance sheet of such Person in conformity
with GAAP; (iii) notes payable and drafts accepted representing extensions of credit to such Person whether or not representing obligations for borrowed money; (iv) any obligation of such Person owed for all or any part of the deferred
purchase price of property or services including any earn out obligations to the extent required to be reflected on a consolidated balance sheet of Borrower prepared in accordance with GAAP (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than twelve months from the date of incurrence of the obligation in respect thereof or (b) evidenced by a note or similar written instrument; (v) all indebtedness of such Person secured by any Lien
on any property or asset owned or held by such Person regardless of whether the indebtedness secured thereby shall have been assumed by such Person or is nonrecourse to the credit of such Person; (vi) the face amount of any letter of credit
issued for the account of such Person or as to which that Person is otherwise liable for reimbursement of drawings; (vii) Disqualified Equity Interests issued by such Person; (viii) the direct or indirect guaranty, endorsement (otherwise
than for collection or deposit in the ordinary course of business),
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co making, discounting with recourse or sale with recourse by such Person of the obligation of another Person to the extent such obligation would constitute Indebtedness pursuant to any of
clauses (i) through (vii) or clause (xi) hereof; (ix) any obligation of such Person the primary purpose or intent of which is to provide assurance to an obligee that the obligation constituting Indebtedness pursuant to clauses
(i) through (vii) or (xi) hereof of the obligor thereof will be paid or discharged, or any agreement relating thereto will be complied with, or the holders thereof will be protected (in whole or in part) against loss in respect
thereof; (x) any liability of such Person for an obligation constituting Indebtedness pursuant to clauses (i) through (vii) or (xi) hereof of another through any agreement (contingent or otherwise) (a) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or
(b) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (a) or (b) of this clause (x), the primary purpose or intent thereof
is as described in clause (ix) above; and (xi) the Net Mark-to-Market Exposure of any Hedge Agreement. The amount of Indebtedness of any Person for purposes of clause (v) above shall (unless such Indebtedness has been assumed by such
Person) be deemed to be equal to the lesser of (i) the aggregate unpaid amount of such Indebtedness and (ii) the fair market value of the property encumbered thereby as determined by such Person in good faith.
Indemnified Liabilities means, collectively, any and all liabilities, obligations, losses, damages (expectation, reliance
or otherwise, and including natural resource damages), penalties, claims (including Environmental Claims), fines, orders, actions, judgments, suits, costs (including the costs of any investigation, study, sampling, testing, abatement, cleanup,
removal, remediation or other response action necessary to remove, remediate, clean up or abate any Release or threat of Release of Hazardous Materials) and expenses (including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding or hearing commenced or threatened by any Person, whether or not any such Indemnitee shall be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect or consequential and whether based on any Applicable Law or on contract or otherwise, that may be issued to, imposed on, incurred or suffered by, or asserted against any
such Indemnitee, in any manner relating to or arising out of (i) this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby (including the Lenders agreement to make Credit Extensions (including, for
the avoidance of doubt, any Issuing Bank agreement to issue Letters of Credit), the syndication of the credit facilities provided for herein or the use or intended use of the proceeds thereof, or any enforcement of any of the Credit Documents
(including any sale of, collection from, or other realization upon any of the Collateral or the enforcement of the Guaranty)) or (ii) any Environmental Claim or any Release or threat of Release of Hazardous Materials related to Borrower or any
of its Subsidiaries, including such claims or activities relating to or arising from, directly or indirectly, any past or present activity, operation, land ownership, occupation or use, or practice by or of Borrower or any of its Subsidiaries.
Indemnified Taxes means any Taxes other than Excluded Taxes and Other Taxes.
Indemnitee as defined in Section 10.3(a).
Indemnitee Agent Party as defined in Section 9.6.
Initial Draw Tranche A Term Loan means a Tranche A Term Loan made by a Lender to Borrower pursuant to
Section 2.1(a)(i) of the Second Amended and Restated Credit Agreement.
Insolvency Defaulting Lender means any
Lender with a Revolving Commitment or Term Loan Commitment who (i) has been adjudicated as, or determined by any Governmental Authority having regulatory authority over such Person or its assets to be, insolvent, (ii) becomes the subject
of an insolvency, bankruptcy, dissolution, liquidation or reorganization proceeding, or (iii) becomes the subject of an appointment of a receiver, intervenor or conservator under any Insolvency Laws now or hereafter in effect; provided
that a Lender shall not be an Insolvency Defaulting Lender solely by virtue of the ownership or acquisition by a Governmental Authority or an instrumentality thereof of any Equity Interest in such Lender or a parent company thereof.
Insolvency Laws means any of the Bankruptcy Code, the BIA, the CCAA, the WURA and the CBCA, and any other applicable
insolvency, corporate arrangement or restructuring or other similar law of any jurisdiction
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including any law of any jurisdiction permitting a debtor to obtain a stay or a compromise of the claims of its creditors against it.
Installment as defined in Section 2.12.
Installment Date as defined in Section 2.12.
Intellectual Property as defined in the Second Amended and Restated Pledge and Security Agreement, the Canadian Pledge and
Security Agreement, the Quebec Security Documents, the Barbados Security Documents, the Luxembourg Security Documents and the Swiss Security Documents, as applicable.
Intellectual Property Security Agreements has the meaning assigned to that term in the Second Amended and Restated Pledge
and Security Agreement and the Canadian Pledge and Security Agreement, as applicable.
Intercompany Note means a
promissory note substantially in the form of Exhibit J-1 evidencing Indebtedness owed among Credit Parties and their Subsidiaries.
Interest Coverage Ratio means the ratio as of the last day of any Fiscal Quarter of (i) Consolidated Adjusted EBITDA
for the four Fiscal Quarter period then ended to (ii) Consolidated Interest Expense for such four Fiscal Quarter period.
Interest Payment Date means with respect to (i) any Loan that is a Base Rate Loan, each March 31, June 30,
September 30 and December 31 of each year, commencing on the first such date to occur after the Third Restatement Date, and the final maturity date of such Loan; and (ii) any Loan that is a Eurodollar Rate Loan, the last day of each
Interest Period applicable to such Loan; provided that, in the case of each Interest Period of longer than three months Interest Payment Date shall also include each date that is three months, or an integral multiple thereof,
after the commencement of such Interest Period.
Interest Period means, in connection with a Eurodollar Rate Loan, an
interest period of one, two, three or six months (or interest periods of twelve months if mutually agreed upon by Borrower and the applicable Lenders), as selected by Borrower in the applicable Funding Notice or Conversion/Continuation Notice,
(i) initially, commencing on the Credit Date or Conversion/Continuation Date thereof, as the case may be; and (ii) thereafter, commencing on the day on which the immediately preceding Interest Period expires; provided that,
(a) if an Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day unless no further Business Day occurs in such month, in which case such Interest Period
shall expire on the immediately preceding Business Day; (b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clauses (c) and (d), of this definition, end on the last Business Day of a calendar month; (c) no Interest Period with respect to any portion of any Class of Term Loans shall extend beyond such
Classs Term Loan Maturity Date; and (d) no Interest Period with respect to any portion of the Revolving Loans shall extend beyond the Revolving Commitment Termination Date.
Interest Rate Agreement means any interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedging agreement or other similar agreement or arrangement.
Interest Rate Determination Date
means, with respect to any Interest Period, the date that is two Business Days prior to the first day of such Interest Period.
Interpolated Rate means, in relation to the LIBO Rate, the rate which results from interpolating on a linear basis between:
(i) the applicable LIBO Rate for the longest period (for which that LIBO
Rate is available) which is less than the Interest Period of that Loan; and
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(ii) the applicable LIBO Rate for
the shortest period (for which that LIBO Rate is available) which exceeds the Interest Period of that Loan,
each as of approximately 11:00 a.m. (London,
England time) two Business Days prior to the commencement of such Interest Period of that Loan.
Internal Revenue Code
means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and any successor statute.
Internally Generated Cash means, with respect to any period, any cash of Borrower and its Subsidiaries generated during
such period, excluding Net Asset Sale Proceeds, Net Insurance/Condemnation Proceeds and any cash that is received from an incurrence of Indebtedness, an issuance of Equity Interests or a capital contribution.
Investment means (i) any direct or indirect purchase or other acquisition by Borrower or any of its Subsidiaries of,
or of a beneficial interest in, any of the Securities of any other Person (other than a Guarantor Subsidiary); (ii) any direct or indirect purchase or other acquisition for value, by any Subsidiary of Borrower from any Person (other than
Borrower or any other Credit Party), of any Equity Interests of such Person; (iii) any direct or indirect loan, advance (other than advances to employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures
in the ordinary course of business) or capital contributions by Borrower or any of its Subsidiaries to any other Person (other than Borrower or any other Credit Party), including all indebtedness and accounts receivable from that other Person that
are not current assets or did not arise from sales to that other Person in the ordinary course of business and (iv) all investments consisting of any exchange traded or over the counter derivative transaction, including any Interest Rate
Agreement and Currency Agreement, whether entered into for hedging or speculative purposes. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write ups, write downs or write offs with respect to such Investment, less an amount equal to any returns of capital or sale proceeds actually received in cash in respect of any such Investment (which amount shall
not exceed the amount of such Investment valued at cost at the time such Investment was made).
Issuance Notice means
an Issuance Notice in form and substance reasonably satisfactory to Issuing Bank.
Issuing Bank means JPMorgan Chase
Bank, N.A., including its affiliates and branches, in its capacity as Issuing Bank hereunder, together with its permitted successors and assigns in such capacity.
January 2015 Additional Series A-3 Tranche A Term Loan Funding Date means January 22, 2015.
January 2015 New Revolving Loan Commitment Effective Date means January 22, 2015.
January 2015 Revolving Loan Commitment Increase Joinder Agreement means the Joinder Agreement, dated as of January 22,
2015, by and among the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent and the New Revolving Loan Lenders party thereto.
January 2015 Additional Series A-3 Tranche A Term Loan Joinder Agreement means the Joinder Agreement, dated as of
January 22, 2015, by and among the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent and the New Term Loan Lenders party thereto.
Joinder Agreement means an agreement substantially in the Form of Exhibit K.
Joint Venture means a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other
legal form and, for the avoidance of doubt, includes a Specified Joint Venture.
Judgment Conversion Date as defined in
Section 10.24(a).
Judgment Currency as defined in Section 10.24(a).
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Lender means each financial institution listed on the signature pages hereto
as a Lender, and any other Person that becomes a party hereto pursuant to an Assignment Agreement or a Joinder Agreement.
Lender
Counterparty means, at any time, each Person that is a counterparty to a Hedge Agreement or Cash Management Agreement, provided that such Person is a Lender, an Agent, or an Affiliate of a Lender or Agent at such time or was a
Lender, an Agent or an Affiliate of a Lender or Agent, at the time such Hedge Agreement or Cash Management Agreement was entered into or, in the case of any such Hedge Agreement or Cash Management Agreement in effect as of the Third Restatement
Date, Second Restatement Date, First Restatement Date, Original Closing Date or any time prior thereto, is a Lender, an Agent or an Affiliate of a Lender or an Agent as of the Third Restatement Date, Second Restatement Date, First Restatement Date
or Original Closing Date.
Letter of Credit means a commercial or standby letter of credit issued or to be issued by
Issuing Bank pursuant to this Agreement.
Letter of Credit Sublimit means, as of any date of determination, the lesser
of (i) $100,000,000 and (ii) the aggregate unused amount of the Revolving Commitments then in effect.
Letter of Credit
Usage means, as of any date of determination, the sum of (i) the maximum aggregate amount which is, or at any time thereafter may become, available for drawing under all Letters of Credit then outstanding, and (ii) the aggregate
amount of all drawings under Letters of Credit honored by Issuing Bank and not theretofore reimbursed by or on behalf of Borrower.
Leverage Ratio means the ratio as of the last day of any Fiscal Quarter of (i) Consolidated Total Debt as of such day
to (ii) Consolidated Adjusted EBITDA for the four Fiscal Quarter period ending on such date.
LIBO Rate has the
meaning given to such term in the definition of the term Eurodollar Rate.
Lien means (i) any
lien, mortgage, hypothecation, deed of trust, pledge, assignment, security interest, charge, deposit arrangement or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention
agreement, and any lease or license in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing and (ii) in the case of Securities, any purchase option, call or similar
right of a third party with respect to such Securities.
Loan means any of a Tranche A Term Loan, a Tranche B Term
Loan, a New Term Loan, a Revolving Loan and a Swing Line Loan.
Luxembourg Guarantor means Biovail International,
S.à r.l., a private limited liability company (société à responsabilité limitée) organized under the laws of Luxembourg, and each other Guarantor that is organized under the laws of Luxembourg.
Luxembourg Security Documents means each of the documents set forth on Schedule 5.10(c), dated as of the Second
Restatement Date, as each of such documents may be amended, restated, supplemented or otherwise modified from time to time and additional analogous agreements as may be entered into from time to time in accordance with Section 5.10 and as
required by the Collateral Documents.
Margin Stock as defined in Regulation U.
Material Adverse Effect means a material adverse effect on (i) the business, operations, properties, assets or
condition (financial or otherwise) of Borrower and its Subsidiaries taken as a whole, (ii) the ability of any Credit Party to fully and timely pay its Obligations when due or (iii) the rights, remedies and benefits available to, or
conferred upon, any Agent and any Lender or any Secured Party under any Credit Document.
Material Real Estate Asset
means any fee owned Real Estate Asset having a fair market value in excess of $20,000,000; provided that in no event shall Material Real Estate Assets include the Real Estate Assets of Borrower
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and its Subsidiaries owned as of the Original Closing Date and located in (a) Carolina, Puerto Rico and (b) Christ Church, Barbados.
Maximum Amount as defined in 7.13(a).
Medicis Acquisition means the acquisition of Medicis Pharmaceutical Corporation pursuant to the Medicis Acquisition
Agreement.
Medicis Acquisition Agreement means the Agreement and Plan of Merger (together with all exhibits and
schedules thereto, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, collectively, the Medicis Acquisition Agreement), dated as of September 2, 2012, among the
Borrower, VPI, one of Borrowers other wholly owned U.S. domiciled subsidiaries and Medicis Pharmaceutical Corporation.
Medicis Transactions means collectively, (a) the Medicis Acquisition and other related transactions contemplated by
the Medicis Acquisition Agreement; (b) the incurrence of new Term Loans hereunder pursuant to a Joinder Agreement in accordance with Section 2.25 to be entered into after the Amendment No. 2 Effective Date; (c) the issuance of
the New Senior Notes; and (d) the payment of all fees and expenses owing in connection with the foregoing.
Merger
Agreement means the Agreement and Plan of Merger, dated as of June 20, 2010, among Borrower, VPI, Biovail Americas Corp. and Beach Merger Corp., together with all exhibits, schedules, documents, agreements, and instruments executed
and delivered in connection therewith, as the same may be amended or modified in accordance with the terms thereof.
Moodys means Moodys Investors Service, Inc.
Mortgage means a mortgage, deed of trust, debenture or similar document creating a Lien on real property, in form and
substance reasonably satisfactory to the Collateral Agent, as it may be amended, restated, supplemented or otherwise modified from time to time.
Multiemployer Plan means any Employee Benefit Plan which is a multiemployer plan as defined in
Section 3(37) of ERISA.
Narrative Report means, with respect to the financial statements for which such narrative
report is required, a narrative report describing the operations of Borrower and its Subsidiaries that complies with the applicable requirements under the Exchange Act for a Management Discussion and Analysis for the applicable Fiscal
Quarter or Fiscal Year and for the period from the beginning of the then current Fiscal Year to the end of such period to which such financial statements relate.
Net Asset Sale Proceeds means, with respect to any Asset Sale, an amount equal to: (i) Cash payments (including any
Cash received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise (including by way of milestone payment), but only as and when so received) received by Borrower or any of its Subsidiaries from such Asset
Sale, minus (ii) any reasonable fees and out-of-pocket expenses and bona fide direct costs incurred in connection with such Asset Sale, including (a) income or gains taxes payable by the seller as a result of any gain recognized in
connection with such Asset Sale, (b) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the stock or assets in question and that is
required to be repaid under the terms thereof as a result of such Asset Sale, (c) a reasonable reserve for any indemnification payments (fixed or contingent) attributable to sellers indemnities, contributions, cost sharings and
representations and warranties to purchaser or any advisor in respect of such Asset Sale undertaken by Borrower or any of its Subsidiaries in connection with such Asset Sale and (d) fees paid for legal and financial advisory services in
connection with such Asset Sale; provided that proceeds from Asset Sales permitted under clause (e) of Section 6.8, shall not be included in the calculation of proceeds for purposes of this definition except as expressly set forth
in such clause.
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Net Insurance/Condemnation Proceeds means an amount equal to: (i) any
Cash payments or proceeds received by Borrower or any of its Subsidiaries (a) under any property damage or casualty insurance policies in respect of any covered loss thereunder or (b) as a result of the taking of any assets of Borrower or
any of its Subsidiaries by any Person pursuant to the power of eminent domain, condemnation or otherwise, or pursuant to a sale of any such assets to a purchaser with such power under threat of such a taking, minus (ii) (a) any
actual and reasonable costs incurred by Borrower or any of its Subsidiaries in connection with the adjustment or settlement of any claims of Borrower or such Subsidiary in respect thereof, and (b) any reasonable fees and out-of-pocket expenses
and bona fide direct costs incurred in connection with any sale of such assets as referred to in clause (i)(b) of this definition, including income taxes payable as a result of any gain recognized in connection therewith.
New Hungarian Civil Code as defined in Section 10.31.
Net Mark-to-Market Exposure of a Person means, as of any date of determination, the excess (if any) of all unrealized
losses over all unrealized profits of such Person arising from Hedge Agreements. As used in this definition, unrealized losses means the fair market value of the cost to such Person of replacing such Hedge Agreement as of the date of
determination (assuming the Hedge Agreement were to be terminated as of that date), and unrealized profits means the fair market value of the gain to such Person of replacing such Hedge Agreement as of the date of determination (assuming
such Hedge Agreement were to be terminated as of that date).
New Revolving Loan Commitment Effective Date means
September 11, 2012.
New Revolving Loan Lender as defined in Section 2.25.
New Revolving Loan Commitments as defined in Section 2.25.
New Revolving Loan Exposure means, with respect to any Lender, as of any date of determination, the outstanding principal
amount of the New Revolving Loans of such Lender.
New Revolving Loan Maturity Date means the date on which New
Revolving Loans of a Series shall become due and payable in full hereunder, as specified in the applicable Joinder Agreement, including by acceleration or otherwise.
New Revolving Loans as defined in Section 2.25.
New Senior Notes means debt securities issued after the Amendment No. 2 Effective Date of the Escrow Issuer to finance
a portion of the Medicis Transactions; provided that the net proceeds of such debt securities are deposited into the Escrow Account upon the issuance thereof.
New Senior Notes Documents means the New Senior Notes Indenture, the New Senior Notes Escrow Documents and any other
documents entered into by the Borrower, VPI and/or Escrow Issuer in connection with the New Senior Notes; provided that such documents shall require that (a) if the Medicis Acquisition shall not be consummated on or before the
Termination Date, the New Senior Notes shall be redeemed in full (the New Senior Notes Redemption) no later than the third Business Day after the Termination Date and (b) the Escrowed Funds shall be released from the Escrow
Account before the Termination Date or within three Business Days after the Termination Date (A) upon the consummation of the Medicis Transactions and applied to finance a portion of the Medicis Acquisition or (B) to effectuate the New
Senior Notes Redemption.
New Senior Notes Escrow Documents means the agreement(s) governing the Escrow Account and any
other documents entered into in order to provide the Escrow Agent (or its designee) a Lien on the Escrowed Funds.
New Senior
Notes Indenture means the indenture pursuant to which the New Senior Notes shall be issued.
New Senior Notes
Redemption shall have the meaning given to such term in the definition of the term New Senior Notes Documents.
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New Term Loan Commitments as defined in Section 2.25.
New Term Loan Exposure means, with respect to any Lender, as of any date of determination, the outstanding principal amount
of the New Term Loans of such Lender.
New Term Loan Lender as defined in Section 2.25.
New Term Loan Maturity Date means the date on which New Term Loans of a Series shall become due and payable in full
hereunder, as specified in the applicable Joinder Agreement, including by acceleration or otherwise.
New Term Loans as
defined in Section 2.25.
Non-Consenting Lender as defined in Section 2.23.
Non-Public Information means information which has not been disseminated in a manner making it available to investors
generally, within the meaning of Regulation FD.
Not Otherwise Applied means, with reference to any amount of any
transaction or event, that such amount (i) was not required to be applied to prepay the Loans pursuant to Section 2.14, and (ii) was not previously applied in determining the permissibility of a transaction under the Credit Documents
where such permissibility was (or may have been) contingent on the receipt or availability of such amount.
Note means
a Tranche A Term Loan Note, a Tranche B Term Loan Note, a Revolving Loan Note or a Swing Line Note.
Notice means a
Funding Notice, an Issuance Notice, or a Conversion/Continuation Notice.
Obligation Currency as defined in
Section 10.24(a).
Obligations means all obligations of every nature of each Credit Party (and, with respect to
any obligations in respect of Hedge Agreements and Cash Management Agreements, any Subsidiary of a Credit Party) owing to any Secured Party (including former Agents) (but limited, in the case of obligations in respect of Hedge Agreement and Cash
Management Agreements, to those obligations owing to Lender Counterparties) under any Credit Document, Hedge Agreement or Cash Management Agreement whether for principal, interest (including interest which, but for the filing of a petition in
bankruptcy with respect to such Credit Party, would have accrued on any Obligation, whether or not a claim is allowed against such Credit Party (or, with respect to any obligations in respect of Hedge Agreements and Cash Management Agreements, any
Subsidiary of a Credit Party) for such interest in the related bankruptcy proceeding), reimbursement of amounts drawn under Letters of Credit, payments for early termination of Hedge Agreements or Cash Management Agreements, fees, expenses,
indemnification or otherwise.
Obligee Guarantor as defined in Section 7.7.
OFAC as defined in Section 4.25.
Organizational Documents means (i) with respect to any corporation or company or society with restricted liability,
its certificate, memorandum or articles of incorporation, organization, association or amalgamation or other constituting documents, in each case, as amended, and its by laws, as amended, (ii) with respect to any limited partnership, its
certificate or declaration of limited partnership, as amended, and its partnership agreement, as amended, (iii) with respect to any general partnership, its partnership agreement, as amended, and (iv) with respect to any limited liability
company, its articles of organization, as amended, and its operating agreement, as amended. In the event any term or condition of this Agreement or any other Credit Document requires any Organizational Document to be certified by a Governmental
Authority, the reference to any such Organizational Document shall only be to a document of a type customarily certified by such Governmental Authority.
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Original Closing Date means June 29, 2011.
Original Credit Agreement as defined in the recitals.
Orthodermatologics Acquisition means the acquisition of certain assets and rights, and assumption of certain liabilities,
relating to the Ortho Dermatologics Division of Janssen Pharmaceuticals, Inc., a Subsidiary of Johnson & Johnson, by certain wholly-owned Subsidiaries of Borrower, pursuant to that certain asset purchase agreement, dated as of July 15,
2011, by and among Janssen Pharmaceuticals, Inc., Valeant Pharmaceuticals North America LLC, Valeant International (Barbados) SRL and, solely for the purposes set forth therein, Valeant Pharmaceuticals International, Inc., including all schedules,
annexes and exhibits attached thereto and all material documents related to the consummation of the transactions contemplated thereby, as amended, modified and supplemented.
Other Taxes as defined in Section 2.20(e).
Parallel Debt means in relation to an Underlying Debt an obligation to pay to the Administrative Agent an amount equal to
(and in the same currency as) the amount of the Underlying Debt.
PATRIOT Act means the Uniting and Strengthening
America by providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001).
PBGC means the Pension Benefit Guaranty Corporation or any successor thereto.
PCTFA as defined in Section 4.23.
Pension Plan means, in respect of any Credit Party, any Employee Benefit Plan, other than a Multiemployer Plan, which is
subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA.
Permitted Acquisition means any
acquisition by Borrower or any of its wholly owned Subsidiaries, whether by purchase, merger, amalgamation or otherwise, of all or substantially all of the assets of, all of the Equity Interests of, or a business line or unit or a division of, or a
product or a product candidate of, any Person; provided that:
(i)
at the time the definitive documentation for such Permitted Acquisition is entered into, no Default or Event of Default shall have occurred and be continuing or would result therefrom;
(ii) all transactions in connection therewith shall be consummated, in all
material respects, in accordance with all Applicable Law and in conformity with all applicable Governmental Authorizations;
(iii) in the case of the acquisition of Equity Interests, (a) all of the
Equity Interests (except for any such Securities in the nature of directors qualifying shares required pursuant to Applicable Law) acquired or otherwise issued by such Person or any newly formed Subsidiary of Borrower in connection with such
acquisition shall be owned 100% by Borrower or a Guarantor Subsidiary, and (b) Borrower shall have taken, or shall promptly cause to be taken and, in any event, shall cause to be taken within 60 days of such acquisition (or such longer period
as shall be reasonably acceptable to the Administrative Agent), each of the applicable actions set forth in Section 5.10 (including causing such Subsidiary, other than an Excluded Subsidiary, to become a Guarantor and subject to the Collateral
Documents), it being understood that the acquisition of Equity Interests shall constitute a Permitted Acquisition during such period if it satisfies all conditions of the definition of Permitted Acquisition other than those set forth in this clause
(iii)(b);
(iv) Borrower and its Subsidiaries shall be in compliance with
the financial covenants set forth in Section 6.7 on a Pro Forma Basis after giving effect to such acquisition as of the last day of the Fiscal Quarter most recently ended for which financial statements are required to have been delivered
pursuant to Section 5.1(a) or 5.1(b), as applicable (as determined in accordance with Section 1.5); provided that, at Borrowers option (the Borrowers election to exercise such option in connection with any Permitted
Acquisition, a Limited Condition Acquisition Election), compliance with such covenants may be tested
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at the time the definitive documentation for such Permitted Acquisition is entered into (the Limited Condition Acquisition Test Date); provided, further, that if
the Borrower has made a Limited Condition Acquisition Election for any Permitted Acquisition, then in connection with any subsequent calculation of the ratios or baskets on or following the relevant Limited Condition Acquisition Test Date and prior
to the earlier of (i) the date on which such Permitted Acquisition is consummated or (ii) the date that the definitive agreement for such Permitted Acquisition is terminated or expires without consummation of such Permitted Acquisition,
any such ratio or basket shall be calculated on a Pro Forma Basis assuming such Permitted Acquisition and other transactions in connection therewith (including any Incurrence of Indebtedness or Liens and the use of proceeds thereof) have been
consummated, except that (other than solely with respect to the incurrence ratios subject to the Limited Condition Acquisition Election) (x) Consolidated Total Assets of any target or targets of such Permitted Acquisition shall only be used in
the determination of any asset-based basket if and when such Permitted Acquisition has been consummated and (y) Consolidated Adjusted EBITDA and Consolidated Net Income of any target or targets of such Permitted Acquisition cannot be used for
purposes of calculating any restricted payment or builder basket capacity, including without limitation, under Sections 6.4(h) and 6.6(i), until such Permitted Acquisition has been consummated;
(v) in the case of an acquisition involving aggregate consideration in excess
of $300,000,000, Borrower shall have delivered to Administrative Agent at least two (2) Business Days prior to the consummation of such proposed acquisition, (i) a Compliance Certificate evidencing compliance with Section 6.7 as
required under clause (iv) above and (ii), all other relevant material financial information with respect to such acquired assets, including the aggregate consideration for such acquisition and any other information required to demonstrate
compliance with Section 6.7; and
(vi) any Person or assets or
division as acquired in accordance herewith shall be in same business or lines of business in which Borrower and/or its Subsidiaries are engaged as of the Third Restatement Date or similar or related or ancillary businesses.
Permitted Interim Investment means any acquisition by Borrower or any of its wholly owned Subsidiaries of any Equity
Interests of any Person, which acquisition has been designated by Borrower in writing to the Administrative Agent as a Permitted Interim Investment; provided that:
(i) such acquisition complies with each of the conditions set forth in clauses
(i), (ii), (iv), (v) and (vi) of the definition of Permitted Acquisition;
(ii) at the time of any such acquisition of Equity Interests, the
Administrative Agent shall have received a certificate from the chief executive officer or the chief financial officer (or the equivalent thereof) of Borrower certifying that such acquisition is pursuant to a transaction or series of transactions in
which Borrower or a wholly owned Subsidiary of Borrower intends to acquire all remaining Equity Interests of such Person such that it becomes a wholly owned Subsidiary of Borrower;
(iii) within 180 days following the initial acquisition of Equity Interests of
such Person, Borrower or a wholly owned Subsidiary of Borrower shall have either (x) commenced and have outstanding a tender offer for all remaining Equity Interests of such Person or (y) entered into and have in effect a binding merger or
similar agreement with such Person (it being understood and agreed that the satisfaction of the condition contained in this clause (iii) shall be satisfied only if and for so long as any such tender offer remains open and/or such merger or
similar agreement remains in effect);
(iv) except as otherwise agreed by
the Administrative Agent as a result of any applicable rules and regulations of the Board of Governors, all Equity Interests of such Person owned by Borrower or any of its Subsidiaries shall be pledged, or credited to a securities account at the
Collateral Agent, as collateral for the Obligations; and
(v) upon the
acquisition of the remaining Equity Interests of such Person such that such Person thereafter becomes a wholly owned Subsidiary of Borrower or any of its Subsidiaries the aggregate Investment represented by the acquisition of Equity Interests in
such Person shall either (x) comply with and
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satisfy the requirements of clause (iii) of the definition of Permitted Acquisition or (y) be made pursuant to and in compliance with Section 6.6(d)(ii) or 6.6(i).
Permitted Liens means each of the Liens permitted pursuant to Section 6.2.
Permitted Majority Investments shall have the meaning given to such term in Section 6.6(o).
Permitted Secured Notes means debt securities of any Credit Party that are secured by a Lien ranking pari passu with
or junior to the Liens securing the Obligations; provided that (a) the terms of such debt securities do not provide for any scheduled repayment, mandatory redemption or sinking fund obligations prior to the latest Term Loan Maturity Date
(other than customary offers to repurchase upon a change of control, asset sale or event of loss and customary acceleration rights after an event of default), (b) the covenants, events of default, guarantees, collateral and other terms of which
(other than interest rate and redemption premiums), taken as a whole, are not more restrictive to Borrower or any of its Subsidiaries than those in this Agreement, (c) Borrower will cause the collateral agent or representatives for the holders
of Permitted Secured Notes to enter into an intercreditor agreement with Collateral Agent in form and substance usual and customary for transactions of this type and otherwise satisfactory to Collateral Agent in its sole discretion, (d) at the
time that any such Permitted Secured Notes are issued (and after giving effect thereto) no Default or Event of Default shall exist, be continuing or result therefrom, (e) on a Pro Forma Basis after giving effect to the incurrence of such
Permitted Secured Notes (and the use of proceeds thereof), Borrower shall be in compliance with the covenants set forth in Section 6.7 as of the last day of the most recently ended Fiscal Quarter for which financial statements were required to
have been delivered pursuant to Section 5.1(a) or (b), as applicable, in each case, as if such Permitted Secured Notes had been outstanding on the last day of such Fiscal Quarter and (f) no Subsidiary of Borrower (other than a Guarantor)
shall be an obligor and no Permitted Secured Notes shall be secured by any collateral other than the Collateral.
Person means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability
companies, unlimited liability companies, limited liability partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal
entities, and Governmental Authorities.
Platform as defined in Section 5.1(n).
Post Merger Special Dividend as defined in the Merger Agreement.
PPSA means the Personal Property Security Act (Ontario); provided, however, if the validity,
attachment, perfection (or opposability), effect of perfection or of non-perfection or priority of Collateral Agents security interest in any Collateral are governed by the personal property security laws or laws relating to personal or
movable property of any jurisdiction other than Ontario, PPSA shall also include those personal property security laws or laws relating to movable property in such other jurisdiction for the purpose of the provisions hereof relating to such
validity, attachment, perfection (or opposability), effect of perfection or of non-perfection or priority and for the definitions related to such provisions.
Pre-Merger Special Dividend as defined in the Merger Agreement.
Prescription Drug Business means the business or businesses comprising Borrowers and/or its Subsidiaries
businesses in Europe and Latin America as of the Third Restatement Date.
Prime Rate means 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 (30) largest banks), as in effect from time
to time. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. Any Agent or any other Lender may otherwise make commercial loans or other loans at rates of interest at, above
or below the Prime Rate.
Principal Office means, for each of Administrative Agent, Swing Line Lender and Issuing Bank,
such Persons Principal Office as set forth on Appendix B, or such other office or office of a third party or sub-agent, as
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appropriate, as such Person may from time to time designate in writing to Borrower, Administrative Agent and each Lender.
Projections as defined in Section 4.8.
Pro Forma Basis means, with respect to the calculation of the covenants contained in Section 6.7 or for purposes of
determining the Interest Coverage Ratio, Leverage Ratio or Secured Leverage Ratio as of any date, that such calculation shall give pro forma effect to all Permitted Acquisitions, Acquisitions, Investments that result in a Person becoming a
Subsidiary of Borrower, and all sales, transfers or other dispositions of any material assets outside the ordinary course of business that have occurred during (or, if such calculation is being made for the purpose of determining whether any
proposed acquisition will constitute (or will be permitted as) a Permitted Acquisition, or any Indebtedness (including New Term Loans) or Liens may be incurred, since the beginning of) the four consecutive Fiscal Quarter period most-recently ended
on or prior to such date as if they occurred on the first day of such four consecutive Fiscal Quarter period (including expected cost savings (without duplication of actual cost savings) to the extent (a) such cost savings would be permitted to
be reflected in pro forma financial information complying with the requirements of GAAP and Article 11 of Regulation S-X under the Securities Act as interpreted by the Staff of the Securities and Exchange Commission, and as certified by a financial
officer of Borrower or (b) Borrower in good faith believes that such cost savings will be realized within one year after the applicable Permitted Acquisition, Acquisition, Investment or sale, transfer or other disposition of material assets
outside the ordinary course of business and all steps necessary for the realization of such cost savings have been taken as certified by a financial officer of Borrower. Notwithstanding the foregoing, for all purposes under this Agreement, other
than as permitted by clause (k) of the definition of Consolidated Adjusted EBITDA, no cost savings or synergies relating to the 2010 Transactions shall be included for purposes of calculating the covenants (including New Term Loans)
contained in Sections 6.1 and 6.7 or for purposes of determining the Interest Coverage Ratio, Leverage Ratio or Secured Leverage Ratio until actually realized. Notwithstanding the foregoing, for all purposes under this Agreement, the amount of cost
savings or synergies related to any Permitted Majority Investment that may be included for the purposes of calculating the covenants contained in Sections 6.1 and 6.7 or for purposes of determining the Interest Coverage Ratio, Leverage Ratio or
Secured Leverage Ratio shall not exceed the portion of the cost savings or synergies related to the Permitted Majority Investment equal to the percentage of the capital stock of such Permitted Majority Investment owned by the Borrower or any of its
Subsidiaries.
Pro Rata Share means (i) with respect to all payments, computations and other matters relating to
the Tranche A Term Loan of any Lender, the percentage obtained by dividing (a) the Tranche A Term Loan Exposure of that Lender by (b) the aggregate Tranche A Term Loan Exposure of all Lenders; (ii) with respect to all payments,
computations and other matters relating to the Tranche B Term Loan Commitment or Tranche B Term Loan of any Lender, the percentage obtained by dividing (a) the Tranche B Term Loan Exposure of that Lender by (b) the aggregate Tranche B Term
Loan Exposure of all Lenders; (iii) with respect to all payments, computations and other matters relating to the Revolving Commitment or Revolving Loans of any Lender or any Letters of Credit issued or participations purchased therein by any
Lender or any participations in any Swing Line Loans purchased by any Lender, the percentage obtained by dividing (a) the Revolving Exposure of that Lender by (b) the aggregate Revolving Exposure of all Lenders (exclusive of the Revolving
Exposure of the Swing Line Lender and the Issuing Bank in their capacities as such) and (iv) with respect to all payments, computations, and other matters relating to New Term Loan Commitments or New Term Loans of a particular Series, the
percentage obtained by dividing (a) the New Term Loan Exposure of that Lender with respect to that Series by (b) the aggregate New Term Loan Exposure of all Lenders with respect to that Series. For all other purposes with respect to each
Lender, Pro Rata Share means the percentage obtained by dividing (A) an amount equal to the sum of the Tranche A Term Loan Exposure, the Tranche B Term Loan Exposure, the Revolving Exposure and the New Term Loan Exposure of that
Lender, by (B) an amount equal to the sum of the aggregate Tranche A Term Loan Exposure, the Tranche B Term Loan Exposure, the aggregate Revolving Exposure and the aggregate New Term Loan Exposure of all Lenders (exclusive of the Revolving
Exposure of the Swing Line Lender and the Issuing Bank in their capacities as such).
Public Lenders means Lenders that
do not wish to receive material non-public information with respect to Borrower, its Subsidiaries or their respective Securities.
Quebec Security Documents means each of the documents set forth on Schedule 5.10(b), as each such document may be amended,
restated, supplemented or otherwise modified from time to time and additional analogous
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agreements as may be entered into from time to time in accordance with Section 5.10 and as required by the Collateral Documents.
Real Estate Asset means, at any time of determination, any interest (fee, leasehold or otherwise) then owned by any Credit
Party in any real property.
Refinancing as defined in the recitals.
Refinancing Indebtedness as defined in Section 6.1(r).
Refunded Swing Line Loans as defined in Section 2.3(b)(iv).
Register as defined in Section 2.7(b).
Regulation D means Regulation D of the Board of Governors, as in effect from time to time.
Regulation FD means Regulation FD as promulgated by the U.S. Securities and Exchange Commission under the Securities Act
and Exchange Act as in effect from time to time.
Regulation T means Regulation T of the Board of Governors, as in
effect from time to time and all official rulings and interpretations thereunder or thereof.
Regulation U means
Regulation U of the Board of Governors, as in effect from time to time and all official rulings and interpretations thereunder or thereof.
Regulation X means Regulation X of the Board of Governors, as in effect from time to time and all official rulings and
interpretations thereunder or thereof.
Reimbursement Date as defined in Section 2.4(d).
Related Fund means, with respect to any Lender that is an investment fund, any other investment fund that invests in
commercial loans and that is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.
Release means any release, spill, emission, emanation, leaking, pumping, pouring, injection, spraying, escaping, deposit,
disposal, discharge, dispersal, dumping, abandonment, placing, exhausting, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed
receptacles containing any Hazardous Material), including the movement of any Hazardous Material through the air, soil, surface water or groundwater.
Replacement Lender as defined in Section 2.23.
Repricing Transaction means the prepayment or refinancing of all or a portion of the Tranche B Term Loans with the
incurrence by any Credit Party of any long-term bank debt financing having an effective interest cost or weighted average yield (excluding any arrangement or commitment fees in connection therewith) that is less than the effective interest cost for
or weighted average yield of the Tranche B Term Loans, including without limitation, as may be effected through any amendment to this Agreement relating to the effective interest cost for, or weighted average yield of, the Tranche B Term Loans.
Required Prepayment Date as defined in Section 2.15(d).
Requisite Lenders means one or more Lenders having or holding Tranche A Term Loan Exposure, Tranche B Term Loan Exposure,
New Term Loan Exposure and/or Revolving Exposure and representing more than 50% of the sum of (i) the aggregate Tranche A Term Loan Exposure of all Lenders, (ii) the aggregate Tranche B Term
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Loan Exposure of all Lenders, (iii) the aggregate Revolving Exposure of all Lenders and (iv) the aggregate New Term Loan Exposure of all Lenders.
Responsible Officer means, as applied to any Person, any individual holding the position of chairman of the board (if an
officer), chief executive officer, president, vice president (or the equivalent thereof), chief financial officer (or the equivalent thereof) or treasurer of such Person.
Restricted Junior Payment means (i) any dividend or other distribution, direct or indirect, on account of any shares
of any class of stock of Borrower or any of its Subsidiaries (or any direct or indirect parent of Borrower or any of its Subsidiaries) now or hereafter outstanding, except a dividend payable solely in shares of that class of stock (or, in the case
of preferred stock, in shares of that class of stock or in common stock) to the holders of that class; (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares
of any class of stock of Borrower or any of its Subsidiaries (or any direct or indirect parent thereof) now or hereafter outstanding; (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of stock of Borrower or any of its Subsidiaries (or any direct or indirect parent of Borrower) now or hereafter outstanding; and (iv) any payment or prepayment of principal of, premium, if any, or interest
on, or redemption, purchase, retirement, defeasance (including in substance or legal defeasance), sinking fund or similar payment with respect to, any Subordinated Indebtedness owed to a Person that is not Borrower or a Guarantor (other than
(x) regularly scheduled payments of interest and principal in respect of any Subordinated Indebtedness and (y) the conversion of convertible securities to common stock of Borrower, in each case in accordance with the terms of, and only to
the extent required by, and subject to the subordination provisions contained in, the indenture or other agreement pursuant to which such Subordinated Indebtedness was issued); provided, that in no event shall any payment or other
distribution (including, without limitation, upon conversion, unwind or settlement) in respect of Borrower Convertible Notes, the VPI Convertible Notes or the Sun Convertible Notes and the issuer written call option transactions or issuer warrant
transactions relating thereto be deemed a Restricted Junior Payment.
Restricted Obligations as defined in
Section 7.13(a).
Revolving Commitment means the commitment of a Lender to make or otherwise fund any Revolving
Loan and to acquire participations in Letters of Credit and Swing Line Loans hereunder and Revolving Commitments means such commitments of all Lenders in the aggregate. The amount of each Lenders Revolving Commitment, if any, is
set forth on Schedule A to the Revolving Loan Commitment Increase Joinder Agreement, Schedule B to Amendment No. 3, Schedule B to Amendment No. 6, Schedule A to the January 2015 Revolving Loan Commitment Increase Joinder Agreement or in
the applicable Assignment Agreement, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of the Revolving Commitments as of the January 2015 New Revolving Loan Commitment Effective Date is
$1,500,000,000.
Revolving Commitment Period means the period from and including the Second Restatement Date to but
excluding the Revolving Commitment Termination Date.
Revolving Commitment Termination Date means (x) with respect
to the Revolving Commitments and Revolving Loans outstanding as of the Amendment No. 8 Effective Date, the earliest to occur of (i) April 20, 2018, (ii) the date such Revolving Commitments are permanently reduced to zero pursuant
to Section 2.13(b) or 2.14 (iii) the date of the termination of such Revolving Commitments pursuant to Section 8.1, and (y) with respect to any other Class of Revolving Commitments and Revolving Loans hereunder created pursuant
to an Extension Amendment or Joinder Amendment, the maturity set forth therefor in the applicable Extension Amendment or Joinder Agreement.
Revolving Exposure means, with respect to any Lender as of any date of determination, (i) prior to the termination of
the Revolving Commitments, that Lenders Revolving Commitment as of such date; and (ii) after the termination of the Revolving Commitments, the sum of (a) the aggregate outstanding principal amount of the Revolving Loans of that
Lender, (b) in the case of Issuing Bank, the aggregate Letter of Credit Usage in respect of all Letters of Credit issued by that Lender (net of any participations by Lenders in such Letters of Credit), (c) the aggregate amount of all
participations by that Lender in any outstanding Letters of Credit or any unreimbursed drawing under any Letter of Credit, (d) in the case of Swing Line Lender, the aggregate outstanding principal amount
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of all Swing Line Loans (net of any participations therein by other Lenders), and (e) the aggregate amount of all participations therein by that Lender in any outstanding Swing Line Loans,
in each case as of such date.
Revolving Extension Request as defined in Section 2.26(b).
Revolving Loan means a Loan denominated in Dollars made by a Lender to Borrower pursuant to Section 2.2(a), as such
Loan (x) may be increased, if applicable, by any New Revolving Loans Commitments, in accordance with Section 2.25 and/or (y) extended, if applicable, by any Extended Revolving Commitment, in accordance with Section 2.26.
Revolving Loan Commitment Increase Joinder Agreement means the Joinder Agreement, dated as of September 11, 2012, by
and among the Borrower, the Administrative Agent and the New Revolving Loan Lenders party thereto.
Revolving Loan Note
means a promissory note in the form of Exhibit B-1, as it may be amended, restated, supplemented or otherwise modified from time to time.
S&P means Standard & Poors, a Division of The McGraw Hill Companies, Inc.
Sanitas Acquisition means the acquisition of all of the outstanding shares of AB Sanitas and assumption of certain
liabilities of AB Sanitas, to be implemented by acquisition of a controlling interest in AB Sanitas followed by a mandatory tender offer to acquire the remaining shares, pursuant to that certain Share Sale and Purchase Agreement, dated as of
May 23, 2011, by and between certain shareholders of AB Sanitas, AB Sanitas and Borrower, including all schedules, annexes and exhibits attached thereto and all material documents related to the consummation of the transactions contemplated
thereby, as amended, modified and supplemented, together with subsequent actions to obtain any shares that remain outstanding thereafter.
SEC means the U.S. Securities and Exchange Commission.
Second Amended and Restated Credit Agreement as defined in the recitals.
Second Amended and Restated Pledge and Security Agreement means the Second Amended and Restated Pledge and Security
Agreement, dated as of the Third Restatement Date, among each of the Grantors party thereto and the Collateral Agent, substantially in the form of Exhibit I-1, as it may be amended, restated, supplemented or otherwise modified from time to time.
Second Amendment and Restatement Joinder Date means December 19, 2011.
Second Restatement Date means October 20, 2011.
Secured Leverage Ratio means, as of any date of determination, the ratio, on a Pro Forma Basis, of (a) Consolidated
Secured Indebtedness as of such date to (b) Consolidated Adjusted EBITDA for the four Fiscal Quarter period ending on such date.
Secured Parties has the meaning assigned to that term in the Second Amended and Restated Pledge and Security Agreement, the
Canadian Pledge and Security Agreement, the Quebec Security Documents, the Barbados Security Documents, the Luxembourg Security Documents and the Swiss Security Documents, in each case as applicable.
Securities means any stock, shares, partnership interests, voting trust certificates, certificates of interest or
participation in any profit sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known
as securities or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.
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Securities Act means the Securities Act of 1933, as amended from time to time,
and any successor statute.
Senior Notes means, collectively, the 6.500% Senior Notes due 2016 of VPI, the 6.750%
Senior Notes due 2017 of VPI, the 6.750% Senior Notes due 2021 of VPI, the 6.875% Senior Notes due 2018 of VPI, the 7.000% Senior Notes due 2020 of VPI and the 7.250% Senior Notes due 2022 of VPI.
Series A New Term Loan means a Series A New Term Loan made by a Lender to Borrower pursuant to the Joinder Agreement dated
December 19, 2011.
Series A Tranche B Term Loan Funding Date means June 14, 2012.
Series A Tranche B Term Loan Joinder Agreement means the Joinder Agreement, dated as of June 14, 2012, by and among
the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent and the New Term Loan Lenders party thereto.
Series
A Tranche B Term Loans means a Series A Tranche B Term Loan made pursuant to Section 6 of the Series A Tranche B Term Loan Joinder Agreement.
Series A-1 Tranche A Term Loans means a Series A-1 Tranche A Term Loan made by a Lender to Borrower pursuant to Amendment
No. 3.
Series A-2 Tranche A Term Loan Funding Date means August 5, 2013.
Series A-2 Tranche A Term Loan Joinder Agreement means the Joinder Agreement, dated as of August 5, 2013, by and among
the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent and the New Term Loan Lenders party thereto.
Series
A-2 Tranche A Term Loans means a Series A-2 Tranche A Term Loan made pursuant to Section 6 of the Series A-2 Tranche A Term Loan Joinder Agreement.
Series A-3 Tranche A Term Loans means a Series A-3 Tranche A Term Loan made and/or converted from existing Loans pursuant
to (x) Amendment No. 8, (y) Section 3 of the Additional Series A-3 Tranche A Term Loan Joinder Agreement and (z) Section 4 of the January 2015 Additional Series A-3 Tranche A Term Loan Joinder Agreement.
Series A-4 Tranche A Term Loan Funding Date means the Delayed Draw Series A-4 Funding Date as defined in the
Series A-4 Tranche A Term Loan Joinder Agreement.
Series A-4 Tranche A Term Loan Joinder Agreement means the Joinder
Agreement, dated as of April 1, 2015, by and among the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent and the New Term Loan Lenders party thereto.
Series A-4 Tranche A Term Loans means a Series A-4 Tranche A Term Loan to the extent made pursuant to Section 6 of the
Series A-4 Tranche A Term Loan Joinder Agreement.
Series B Tranche B Term Loan Funding Date means July 9,
2012.
Series B Tranche B Term Loan Joinder Agreement means the Joinder Agreement, dated as of July 9,
2012, by and among the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent and the New Term Loan Lenders party thereto.
Series B Tranche B Term Loans means a Series B Tranche B Term Loan made pursuant to Section 6 of the Series B Tranche
B Term Loan Joinder Agreement.
Series C Tranche B Term Loan Funding Date means December 11, 2012.
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Series C Tranche B Term Loan Joinder Agreement means the Joinder Agreement,
dated as of December 11, 2012, by and among the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent and the New Term Loan Lenders party thereto.
Series C Tranche B Term Loans means a Series C Tranche B Term Loan made pursuant to Section 7 of the Series C Tranche
B Term Loan Joinder Agreement.
Series C-1 Tranche B Term Loan Funding Date means February 21, 2013.
Series C-1 Tranche B Term Loans means a Series C-1 Tranche B Term Loan made pursuant to Amendment No. 4.
Series C-2 Tranche B Term Loan Funding Date means September 17, 2013.
Series C-2 Tranche B Term Loans means a Series C-2 Tranche B Term Loan made pursuant to Amendment No. 7.
Series D Tranche B Term Loan Funding Date means October 2, 2012.
Series D Tranche B Term Loan Joinder Agreement means the Joinder Agreement, dated as of October 2, 2012, by and among
the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent and the New Term Loan Lenders party thereto.
Series
D Tranche B Term Loans means a Series D Tranche B Term Loan made pursuant to Section 5 of the Series D Tranche B Term Loan Joinder Agreement.
Series D-1 Tranche B Term Loan Funding Date means February 21, 2013.
Series D-1 Tranche B Term Loans means a Series D-1 Tranche B Term Loan made pursuant to Amendment No. 4.
Series D-2 Tranche B Term Loan Funding Date means September 17, 2013.
Series D-2 Tranche B Term Loans means a Series D-2 Tranche B Term Loan made pursuant to Amendment No. 7.
Series E Tranche B Term Loan Funding Date means August 5, 2013.
Series E Tranche E Term Loan Joinder Agreement means the Joinder Agreement, dated as of August 5, 2013, by and among
the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent and the New Term Loan Lenders party thereto.
Series
E Tranche B Term Loans means a Series E Tranche B Term Loan made pursuant to Section 7 of the Series E Tranche B Term Loan Joinder Agreement.
Series E-1 Tranche B Term Loan Funding Date means February 6, 2014.
Series E-1 Tranche B Term Loan Joinder Agreement means the Joinder Agreement, dated as of February 6, 2014, by and
among the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent and the New Term Loan Lenders party thereto.
Series E-1 Tranche B Term Loans means a Series E-1 Tranche B Term Loan made pursuant to Section 6 of the Series E-1
Tranche B Term Loan Joinder Agreement.
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Series F Tranche B Term Loan Joinder Agreement means the Joinder Agreement,
dated as of April 1, 2015, by and among the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent and the New Term Loan Lenders party thereto.
Series F Tranche B Term Loans means the Series F-1 Tranche B Term Loans and the Series F-2 Tranche B Term Loans.
Series F-1 Tranche B Term Loans means a Series F-1 Tranche B Term Loan made pursuant to Section 1 of the Series F
Tranche B Term Loan Joinder Agreement.
Series F-1 Tranche B Term Loan Funding Date means April 1,
2015.
Series F-2 Tranche B Term Loans means a Series F-2 Tranche B Term Loan made pursuant to Section 2 of
the Series F Tranche B Term Loan Joinder Agreement. For the avoidance of doubt, the Series F-2 Tranche B Term Loans shall be identical to, and constitute, Series F-1 Tranche B Term Loans for all purposes hereunder, other than for purposes of
Section 2.11(o) hereunder.
Series F-2 Tranche B Term Loan Funding Date as defined in the Series F Tranche
B Term Loan Joinder Agreement.
Solvency Certificate means a Solvency Certificate of the chief financial officer (or
the equivalent thereof) of Borrower substantially in the form of Exhibit F-2.
Solvent means, with respect to any
Credit Party, that as of the date of determination (after giving effect to all rights of reimbursement, contribution and subrogation under Applicable Law and the Credit Documents), if subject to the Insolvency Laws of (a) any jurisdiction other
than Canada or any political subdivision thereof, (i) the sum of such Credit Partys debt (including contingent liabilities) does not exceed the present fair saleable value of such Credit Partys present assets; (ii) such Credit
Partys capital is not unreasonably small in relation to its business as contemplated on the Third Restatement Date and reflected in the Projections or with respect to any transaction contemplated to be undertaken after the Third Restatement
Date; and (iii) such Credit Party has not incurred and does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise);
and (b) Canada or any political subdivision thereof, (i) the property of such Credit Party is sufficient, if disposed of at a fairly conducted sale under legal process, to enable payment of all its obligations, due and accruing due,
(ii) the property of such Credit Party is, at a fair valuation, greater than the total amount of liabilities, including contingent liabilities, of such Credit Party; and (iii) such Credit Party has not ceased paying its current obligations
in the ordinary course of business as they generally become due. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5
or any other analogous criteria in any jurisdiction).
Specified Asset Disposition means the sale, transfer or other
disposition of Retigabine (and for the avoidance of doubt, Intellectual Property related thereto) in accordance with Section 6.8.
Specified Joint Venture, with respect to any Person, means a Joint Venture (a) in which such Person, directly or
indirectly (i) owns more than 50% of the Equity Interests (or owns at least 50% of the Equity Interests if such Joint Venture is consolidated in the financial statements of such Person) and (ii) with respect to any Joint Venture in which
such Person owns more than 50% of the Equity Interests, exercises control (as defined in the definition of Affiliate) and (b) that is designated in writing by the Board of Directors (or equivalent governing body) of such Person as a
Specified Joint Venture for purposes of this Agreement.
Spot Rate means, on any day, for purposes of
determining the Equivalent Amount of any currency, the rate at which such currency may be exchanged into Dollars at the time of determination on such day appearing on the Reuters Currencies page for such currency. In the event that such rate does
not appear on the Reuters Currencies page, the Spot Rate shall be determined by reference to such other publicly available service for displaying exchange rates as
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may be agreed upon by Administrative Agent and Borrower or, in the absence of such an agreement, the Spot Rate shall instead be the arithmetic average of the spot rates of exchange of
Administrative Agent in the market where its foreign currency exchange operations in respect of such currency are then being conducted, at or about such time as Administrative Agent shall elect after determining that such rates shall be the basis
for determining the Spot Rate on such date for the purchase of Dollars for delivery two Business Days later; provided that if at the time of any such determination, for any reason, no such spot rate is being quoted, Administrative Agent may
use any reasonable method it deems appropriate to determine such rate, and such determination shall be conclusive absent manifest error.
Statutory Reserve Rate means a fraction (expressed as a decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board of Governors to which the
Administrative Agent is subject with respect to the Adjusted Eurodollar Rate, for eurocurrency funding (currently referred to as Eurocurrency Liabilities in Regulation D of the Board of Governors). Such reserve percentages shall include
those imposed pursuant to such Regulation D. Eurodollar Rate Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
Subordinated Indebtedness means Indebtedness that, by its terms, is subordinated in right and time of payment to the
Obligations on terms reasonably satisfactory to Administrative Agent and containing such terms and conditions that are market terms and conditions on the date of issuance.
Subsidiary means, with respect to any Person, any corporation, company, partnership, limited liability company, unlimited
liability company, association, society with restricted liability, Joint Venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at
the time owned or controlled, directly or indirectly, legally or beneficially, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof; provided, in no event shall any Specified Joint Venture with
respect to which such Person is party be considered to be a Subsidiary. Notwithstanding the foregoing (and except for purposes of Sections 4.11, 4.13, 4.18, 4.19, 4.23, 4.25, 5.3, 5.8, 5.9, 8.1(j) and 8.1(k), and the definition of Unrestricted
Subsidiary contained herein), an Unrestricted Subsidiary shall be deemed not to be a Subsidiary of the Borrower or any of its Subsidiaries for all purposes of this Agreement.
Subsidiary Redesignation shall have the meaning provided in the definition of Unrestricted Subsidiary contained
in this Section 1.1.
Sun means Salix Pharmaceuticals, Ltd., a Delaware corporation.
Sun Acquisition means the acquisition of Sun pursuant to the Sun Acquisition Agreement.
Sun Acquisition Agreement means the Agreement and Plan of Merger (together with all exhibits and schedules thereto, as the
same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time), dated as of February 20, 2015, among the Borrower, VPI, Sun Merger Sub and Sun.
Sun Convertible Notes means the 1.50% Convertible Senior Notes due 2019, issued pursuant to that certain indenture dated as
of March 16, 2012, by and between Sun and U.S. Bank National Association, as trustee and the 2.75% Convertible Senior Notes due 2015, issued pursuant to that certain indenture dated as of June 3, 2010, by and between Sun and U.S. Bank
National Association, as trustee.
Sun Interim Loans means senior unsecured interim loans incurred by the Borrower or
VPI in an aggregate principal amount not to exceed $9,600,000,000 to finance a portion of the Sun Transactions.
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Sun Merger Sub means Sun Merger Sub, Inc., a Delaware corporation and a
wholly-owned Subsidiary of VPI.
Sun New Senior Notes means unsecured debt securities issued after the Amendment
No. 10 Effective Date of either the Borrower or an Acquisition Debt Escrow Issuer to finance a portion of the Sun Transactions; provided that if such debt securities are issued by an Acquisition Debt Escrow Issuer, the net proceeds
thereof are deposited into an Acquisition Debt Escrow Account upon the issuance thereof.
Sun Refinancing shall have
the meaning given to such term in the definition of Sun Transaction.
Sun Transactions means collectively,
(a) the Sun Acquisition and other related transactions contemplated by the Sun Acquisition Agreement; (b) the incurrence of new Term Loans hereunder pursuant to a Joinder Agreement in accordance with Section 2.25 to be entered into
after the Amendment No. 10 Effective Date; (c) the issuance of the Sun New Senior Notes; (d) the incurrence of the Sun Interim Loans, if any; (e) the refinancing, repayment, termination and discharge of (i) all outstanding
loans and termination of commitments under any credit facility (other than under certain ordinary course local credit lines) to which Salix Pharmaceuticals, Ltd. or any of its subsidiaries is a party, (ii) Salix Pharmaceuticals, Ltd.s
6.00% Senior Notes due 2021 and (iii) Salix Pharmaceuticals, Ltd.s 1.50% Convertible Senior Notes due 2019 and 2.75% Convertible Senior Notes due 2015, together with any cash payments required to unwind any hedges or warrants related
thereto (the Sun Refinancing); and (f) the payment of all fees and expenses owing in connection with the foregoing.
Sun Unsecured Debt means, collectively, the Sun New Senior Notes and the Sun Interim Loans.
Swing Line Lender means Barclays in its capacity as the lender of Swing Line Loans hereunder, together with its permitted
successors and assigns in such capacity.
Swing Line Loan means a Loan made by Swing Line Lender to Borrower pursuant
to Section 2.3.
Swing Line Note means a promissory note in the form of Exhibit B-2, as it may be amended,
restated, supplemented or otherwise modified from time to time.
Swing Line Sublimit means, as of any date of
determination, the lesser of (i) $25,000,000, and (ii) the aggregate unused amount of Revolving Commitments then in effect.
Swiss Federal Tax Administration means the Swiss authority responsible for levying Swiss Federal Withholding Tax.
Swiss Federal Withholding Tax means taxes imposed under the Swiss Withholding Tax Act.
Swiss Withholding Tax Act means the Swiss Federal Act on Withholding Tax of 13 October 1965 (Bundesgesetz über
die Verrechnungssteuer), together with the related ordinances, regulations and guidelines, all as amended and applicable from time to time.
Swiss Guarantor means PharmaSwiss SA, in Zug, Switzerland (CH-170.3.023.567-7), a company limited by shares
(Aktiengesellschaft), organized under the laws of Switzerland and any other Guarantor that is organized under the laws of Switzerland.
Swiss Security Documents means each of the documents set forth on Schedule 5.10(d), dated as of the Second Restatement
Date, as each of such documents may be amended, restated, supplemented or otherwise modified from time to time and additional analogous agreements as may be entered into from time to time in accordance with Section 5.10 and as required by the
Collateral Documents.
Tax means any present or future tax, levy, impost, duty, assessment, charge, fee, deduction or
withholding of any nature and whatever called, including any interest, additions to tax or penalties thereto, by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or assessed.
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Terminated Lender as defined in Section 2.23.
Termination Date means June 3, 2013.
Term Loan means a Tranche A Term Loan, a Tranche B Term Loan, an Extended Term Loan and/or a New Term Loan, as the context
requires.
Term Loan Commitment means the Tranche B Term Loan Commitment or the New Term Loan Commitment of a Lender,
and Term Loan Commitments means such commitments of all Lenders.
Term Loan Commitment Termination
Date means with respect to the Tranche B Term Loans, the date which is the earlier to occur of (x) the date which is seven years after the Third Restatement Date and (y) the first date on which all undrawn Term Loan Commitments
have been terminated or reduced to zero pursuant to the terms hereof.
Term Loan Extension Request as defined in
Section 2.26(a).
Term Loan Maturity Date means (i) with respect to the Tranche A Term Loans, the Tranche A
Term Loan Maturity Date, (ii) with respect to the Tranche B Term Loans, the Tranche B Term Loan Maturity Date, (iii) with respect to any Extended Term Loans, the maturity set forth therefor in the applicable Extension Amendment, and
(iv) with respect to the New Term Loans of a Series, the New Term Loan Maturity Date of such Series of New Term Loans.
Third Restatement Date means February 13, 2012.
Third Restatement Date Certificate means a Third Restatement Date Certificate of Borrower substantially in the form of
Exhibit F-1.
Total Utilization of Revolving Commitments means, as at any date of determination, the sum of
(i) the aggregate principal amount of all outstanding Revolving Loans (other than Revolving Loans made for the purpose of repaying any Refunded Swing Line Loans or reimbursing Issuing Bank for any amount drawn under any Letter of Credit, but
not yet so applied), (ii) the aggregate principal amount of all outstanding Swing Line Loans and (iii) the Letter of Credit Usage.
Tranche A New Term Loans means New Term Loans with required annual principal repayments greater than 1% of the original
principal amount of such New Term Loans and otherwise with terms similar to the Tranche A Term Loans.
Tranche A Term
Loan means an Initial Draw Tranche A Term Loan, a Delayed Draw Term Loan, a Series A New Term Loan, a Series A-1 Tranche A Term Loan, a Series A-2 Tranche A Term Loan, a Series A-3 Tranche A Term Loan and a Series A-4 Tranche A Term Loan.
Tranche A Term Loan Exposure means, with respect to any Lender, as of any date of determination, the outstanding
principal amount of the Tranche A Term Loans of such Lender as of such date.
Tranche A Term Loan Maturity Date means
(a) with respect to Series A-1 Tranche A Term Loans and Series A-2 Tranche A Term Loans, the earlier of (i) April 20, 2016 and (ii) the date on which all Tranche A Term Loans shall become due and payable in full hereunder,
whether by acceleration or otherwise , (b) with respect to the Series A-3 Tranche A Term Loans, the earlier of (i) October 20, 2018 (the Series A-3 Tranche A Term Loan Maturity Date) and (ii) the date on which
all Tranche A Term Loans shall become due and payable in full hereunder, whether by acceleration or otherwise and (c) with respect to the Series A-4 Tranche A Term Loans, the earlier of (i) April 1, 2020 (the Series A-4
Tranche A Term Loan Maturity Date) and (ii) the date on which all Tranche A Term Loans shall become due and payable in full hereunder, whether by accelleration or otherwise.
Tranche A Term Loan Note means a promissory note in the form of Exhibit B-3, as it may be amended, restated, supplemented
or otherwise modified from time to time.
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Tranche B New Term Loans means New Term Loans with required annual principal
repayments not greater than 1% of the original principal amount of such New Term Loans and otherwise with terms similar to the Tranche B Term Loans.
Tranche B Term Loan means a Tranche B Term Loan made by a Lender to Borrower pursuant to Section 2.1(a), a Series A
Tranche B Term Loan made pursuant to the Series A Tranche B Term Loan Joinder Agreement (except as expressly set forth herein, including for purposes of Section 2.13(a)), a Series B Tranche B Term Loan made pursuant to the Series B Tranche B
Term Loan Joinder Agreement (except as expressly set forth herein, including for purposes of Section 2.13(a)), a Series C Tranche B Term Loan made pursuant to the Series C Tranche B Term Loan Joinder Agreement (except as expressly set forth
herein, including for purposes of Section 2.13(a)), a Series D Tranche B Term Loan made pursuant to the Series D Tranche B Term Loan Joinder Agreement (except as expressly set forth herein, including for purposes of Section 2.13(a)), a
Series C-1 Tranche B Term Loan made pursuant to Amendment No. 4 (except as expressly set forth herein, including for purposes of Section 2.13(a)), a Series D-1 Tranche B Term Loan made pursuant to Amendment No. 4 (except as expressly
set forth herein, including for purposes of Section 2.13(a)), a Series E Tranche B Term Loan made pursuant to the Series E Tranche B Joinder Agreement (except as expressly set forth herein, including for purposes of Section 2.13(a)), a
Series C-2 Tranche B Term Loan made pursuant to Amendment No. 7 (except as expressly set forth herein, including for purposes of Section 2.13(a)), a Series D-2 Tranche B Term Loan made pursuant to Amendment No. 7 (except as expressly
set forth herein, including for purposes of Section 2.13(a)), a Series E-1 Tranche B Term Loan made pursuant to the Series E-1 Tranche B Term Loan Joinder Agreement (except as expressly set forth herein, including for purposes of
Section 2.13(a)) and a Series F Tranche B Term Loan made pursuant to the Series F Tranche B Term Loan Joinder Agreement (except as expressly set forth herein, including for purposes of Section 2.13(a)).
Tranche B Term Loan Commitment means the commitment of a Lender to make or otherwise fund a Tranche B Term Loan on the
Third Restatement Date and Tranche B Term Loan Commitments means such commitments of all Lenders in the aggregate. The amount of each Lenders Tranche B Term Loan Commitment, if any, is set forth on Appendix A-2 or in the
applicable Assignment Agreement, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of the Tranche B Term Loan Commitments as of the Third Restatement Date is $600,000,000.
Tranche B Term Loan Exposure means, with respect to any Lender, as of any date of determination, the outstanding principal
amount of the Tranche B Term Loans of such Lender.
Tranche B Term Loan Maturity Date means (a) with respect to
Tranche B Term Loans (other than Series C Tranche B Term Loans, Series C-1 Tranche B Term Loans, Series C-2 Tranche B Term Loans, Series E Tranche B Term Loans, Series E-1 Tranche B Term Loans and Series F Tranche B Term Loans) the earlier of
(i) the date which is seven years after the Third Restatement Date and (ii) the date on which all Tranche B Term Loans shall become due and payable in full hereunder, whether by acceleration or otherwise, (b) with respect to Series C
Tranche B Term Loans, Series C-1 Tranche B Term Loans and Series C-2 Tranche B Term Loans, December 11, 2019 (the Series C Tranche B Term Loan Maturity Date), (c) with respect to Series E Tranche B Term Loans and Series
E-1 Tranche B Term Loans, August 5, 2020 (the Series E-1 Tranche B Term Loan Maturity Date) and (d) with respect to Series F Tranche B Term Loans, April 1, 2022 (the Series F Tranche B Term Loan Maturity
Date).
Tranche B Term Loan Note means a promissory note in the form of Exhibit B-4, as it may be amended,
restated, supplemented or otherwise modified from time to time.
Transactions means the entry into this Agreement, the
Original Credit Agreement, the First Amended and Restated Credit Agreement, the Second Amended and Restated Credit Agreement and the Credit Documents and the making of the Loans hereunder and thereunder and the consummation of the Acquisitions on
and after the Second Restatement Date, and the payment of all fees and expenses related thereto.
Type of Loan means
(i) with respect to Tranche A Term Loans, a Base Rate Loan or a Eurodollar Rate Loan, (ii) with respect to Tranche B Term Loans, a Base Rate Loan or a Eurodollar Rate Loan and (iii) with respect to Revolving Loans, a Base Rate Loan or
a Eurodollar Rate Loan and (iv) with respect to Swing Line Loans, a Base Rate Loan.
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UCC means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
Underlying Debt means in relation to a Credit Party and at
any time, each obligation (whether present or future, actual or contingent) owing by that Credit Party to a Secured Party under the Credit Documents (including for the avoidance of doubt any change or increase in those obligations pursuant to or in
connection with any amendment or supplement or restatement or novation of any Credit Document, in each case whether or not anticipated as of the date of this Agreement) excluding that Credit Partys Parallel Debts.
Unrestricted Subsidiary means any Subsidiary of the Borrower designated by the Borrower after the Amendment No. 6
Effective Date as an Unrestricted Subsidiary hereunder by written notice to the Administrative Agent so long as (i) no Default or Event of Default has occurred and is continuing or would result therefrom, (ii) immediately after giving
effect to such designation (as well as all other such designations theretofore consummated after the first day of such applicable period), Borrower and its Subsidiaries shall be in compliance with the financial covenants set forth in
Section 6.7 on a Pro Forma Basis as of the last day of the Fiscal Quarter most recently ended for which financial statements are required to have been delivered pursuant to Section 5.1(a) or 5.1(b), as applicable (as determined in
accordance with Section 1.5), (iii) such Unrestricted Subsidiary shall be capitalized (to the extent capitalized by the Borrower or any of its Subsidiaries) through Investments as permitted by, and in compliance with, Section 6.6(i),
and any prior or concurrent Investments in such Subsidiary by the Borrower or any of its Subsidiaries shall be deemed to have been made under Section 6.6(i), (iv) without duplication of clause (iii), any assets owned by such Unrestricted
Subsidiary at the time of the initial designation thereof shall be treated as Investments pursuant to Section 6.6(i), (v) such Subsidiary shall have been designated an unrestricted subsidiary (or otherwise not be subject to the
covenants and defaults) under any other Indebtedness permitted to be incurred hereunder (to the extent the concept of unrestricted subsidiaries exists in the documents governing such Indebtedness) and all Refinancing Indebtedness in respect of any
of the foregoing and all Disqualified Equity Interests and (vi) without duplication of clause (iii) and (iv), such designation shall constitute an Investment by the Borrower therein at the date of such designation in an amount equal to the
net book value of the Borrowers or its Subsidiarys (as applicable) investment therein (and such designation shall only be permitted to the extent such Investment is permitted under Section 6.6(i)). The Borrower may designate any
Unrestricted Subsidiary to be a Subsidiary for purposes of this Agreement (each, a Subsidiary Redesignation); provided, that (i) such Unrestricted Subsidiary, both before and after giving effect to such designation,
shall be a wholly owned Subsidiary of the Borrower, (ii) no Default or Event of Default has occurred and is continuing or would result therefrom, (iii) immediately after giving effect to such Subsidiary Redesignation (as well as all other
Subsidiary Redesignations theretofore consummated after the first day of such applicable period), Borrower and its Subsidiaries shall be in compliance with the financial covenants set forth in Section 6.7 on a Pro Forma Basis as of the last day
of the Fiscal Quarter most recently ended for which financial statements are required to have been delivered pursuant to Section 5.1(a) or 5.1(b), as applicable (as determined in accordance with Section 1.5), and (iv) the Borrower
shall have delivered to the Administrative Agent an officers certificate executed by a Responsible Officer of such Borrower, certifying to the best of such officers knowledge, compliance with the requirements of preceding clauses
(i) through (iii), inclusive, and containing the calculations and information required by the preceding clause (iii).
VPI as defined in the recitals hereto.
VPI Convertible Notes means VPIs 4.0% Convertible Subordinated Notes due 2013, issued under that certain indenture
dated as of November 19, 2003, among VPI, Ribapharm Inc. and The Bank of New York Mellon, as trustee.
Waivable Mandatory
Prepayment as defined in Section 2.15(d).
WURA means the Winding-Up and Restructuring Act
(Canada).
1.2 Accounting Terms. Except as otherwise expressly provided herein, all
accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with GAAP; provided that, if Borrower notifies the Administrative Agent that Borrower requests an amendment to any provision (including any
definition) hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies Borrower that the Requisite Lenders
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request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such
provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Financial
statements and other information required to be delivered by Borrower to Lenders pursuant to Sections 5.1(a) and 5.1(b) shall be prepared in accordance with GAAP as in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in Section 5.1(d), if applicable).
1.3 Interpretation, etc. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the reference. References herein to any Section, Appendix, Schedule or Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may be, hereof unless
otherwise specifically provided. The use herein of the word include or including, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or matters, whether or not non limiting language (such as without limitation or but not limited to or words of similar import) is used with reference
thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter. The terms lease and license shall include sub lease and sub license, as applicable. A
reference to a statute includes all regulations made pursuant to such statute and, unless otherwise specified, the provisions of any statute or regulation which amends, revises, restates, supplements or supersedes any such statute or any such
regulation. In this Agreement, where the terms continuing, continuance or words to similar effect are used in relation to a Default or an Event of Default, the terms shall mean only, in the case of a Default, that the
applicable event or circumstance has not been waived or, if capable of being cured, cured, prior to the event becoming or resulting in an Event of Default, and in the case of an Event of Default, that such event or circumstance has not been waived.
For purposes of any assets, liabilities or entities located in the Province of Québec or charged by any deed of hypothec (or any
other Credit Document) and for all other purposes pursuant to which the interpretation or construction of this Agreement may be subject to the laws of the Province of Québec or a court or tribunal exercising jurisdiction in the Province of
Québec, (a) personal property shall include movable property, (b) real property or real estate shall include immovable property, (c) tangible property
shall include corporeal property, (d) intangible property shall include incorporeal property, (e) security interest, mortgage and lien shall include a
hypothec, right of retention, prior claim and a resolutory clause, (f) all references to filing, perfection, priority, remedies, registering or recording under the UCC or PPSA shall include
publication under the Civil Code of Québec, (g) all references to perfection of or perfected liens or security interest shall include a reference to a hypothec which is opposable or can be
set up as against third parties, (h) any right of offset, right of setoff or similar expression shall include a right of compensation, (i) common law shall include civil
law, (j) tort shall include extracontractual liability, (k) bailor shall include depositor and bailee shall include depositary, (l) goods shall
include corporeal movable property other than chattel paper, documents of title, instruments, money and securities, (m) an agent shall include a mandatary, (n) construction liens shall
include legal hypothecs in favour of persons having taken part in the construction or renovation of an immovable, (o) joint and several shall include solidary, (p) gross negligence or willful
misconduct shall be deemed to be intentional or gross fault, (q) beneficial ownership shall include ownership and legal title shall include holding title on behalf of an owner as mandatary
or prete-nom; (r) easement shall include servitude, (s) priority shall include prior claim or rank, as applicable; (t) survey shall include
certificate of location and plan, (u) state shall include province, (v) fee simple title shall include ownership, (w) accounts shall include claims,
(x) conditional sale shall include instalment sale, (y) purchase money financing or purchase money lien shall include instalment sales, reservations of ownership, contracts of lease,
leasing contracts and vendors hypothecs. The parties hereto confirm that it is their wish that this Agreement and any other document executed in connection with the transactions contemplated herein be drawn up in the English language
only and that all other documents contemplated thereunder or relating thereto, including notices, may also be drawn up in the English language only. Les parties aux présentes confirment que cest leur volonté que cette
convention et les autres documents de crédit soient rédigés en langue anglaise seulement et que tous les documents, y compris tous avis, envisagés par cette convention et les autres documents peuvent être
rédigés en langue anglaise seulement.
1.4 Currency Matters. All
Obligations of each Credit Party under the Credit Documents shall be payable in Dollars, and all calculations, comparisons, measurements or determinations under the Credit Documents shall be made in Dollars. For the purpose of such calculations,
comparisons, measurements or determinations,
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amounts denominated in other currencies shall be converted into the Equivalent Amount of Dollars on the date of calculation, comparison, measurement or determination.
1.5 Pro Forma Transactions; Covenant Calculations. (a) With respect to any period
during which any Permitted Acquisition or any sale, transfer or other disposition of any material assets outside the ordinary course of business occurs, for purposes of determining compliance with the covenants contained in Sections 6.1 and 6.7, or
for purposes of determining the Interest Coverage Ratio, Leverage Ratio or Secured Leverage Ratio as of any date, calculations with respect to such period shall be made on a Pro Forma Basis. (b) All Indebtedness that has been defeased,
satisfied and discharged or irrevocably called for redemption in accordance with the terms of the agreements governing such Indebtedness with such Cash sufficient to satisfy such defeasance, satisfaction and discharge or redemption irrevocably
deposited with the appropriate entity for such purpose will be deemed not to be outstanding for purposes of calculating the amount of Indebtedness outstanding at any time under the covenants and financial or other calculations under this Agreement;
provided, that all such Cash and other assets deposited pursuant to the foregoing will not be included in any such covenant or financial or other calculation under this Agreement which are calculated on a basis net of Cash.
1.6 Effect of This Agreement on the Second Amended and Restated Credit Agreement and Other
Credit Documents. Upon satisfaction of the conditions precedent to the effectiveness of this Agreement set forth in Section 3.1 hereof, this Agreement shall be binding on Borrower, the Agents, the Lenders and the other parties hereto, and
the Second Amended and Restated Credit Agreement and the provisions thereof shall be replaced in their entirety by this Agreement and the provisions hereof, with the parties hereby agreeing that there is no novation of the Second Amended and
Restated Credit Agreement; provided that the Collateral and the Credit Documents shall continue to secure, guarantee, support and otherwise benefit the Obligations of Borrower and the other Credit Parties under this Agreement and the other
Credit Documents. Upon the effectiveness of this Agreement, each Credit Document that was in effect immediately prior to the date of this Agreement shall continue to be effective and, unless the context otherwise requires, any reference to the
Credit Agreement contained therein shall be deemed to refer to this Agreement.
1.7 Medicis Transactions. Notwithstanding anything to the contrary in any Credit
Document, nothing contained in any Credit Document shall prevent (a) the granting or existence of any Liens on the Escrow Account, the Escrowed Funds or any New Senior Notes Documents or pursuant to any New Senior Notes Escrow Documents, in
each case, in favor of the Escrow Agent or the trustee under the New Senior Notes Indenture (or their designees), (b) the making of any Restricted Junior Payment in connection with the consummation of the Medicis Acquisition and the other
Medicis Transactions, (c) the holding of the Escrowed Funds in the Escrow Account or (d) any other transaction contemplated by the New Senior Notes Documents (it being understood, for the avoidance of doubt, that any such granting of
Liens, making of Restricted Junior Payments and other transactions shall be deemed made exclusively in reliance upon this Section 1.7 and not any other exception or basket under any other provision of any Credit Document). In addition, prior to
the consummation of the Medicis Acquisition, Escrow Issuer shall not be deemed a Subsidiary for purposes of this Agreement or any other Credit Document, and, for the avoidance of doubt, shall not be subject to the (i) requirements of
Section 5 (including, for the avoidance of doubt, Section 5.10) or Section 6 hereof, (ii) representations and warranties in Section 4 hereof or (iii) Events of Default in Section 8 hereof. The Lenders, the Issuing
Bank and their respective Affiliates hereby agree that none of the Administrative Agent, the Collateral Agent or any Affiliate thereof shall have any liability or obligation to the Lenders, in their capacities as such, with respect to any
transactions contemplated by the New Senior Notes Documents.
1.8 Bausch & Lomb Transactions; Sun Transactions. Notwithstanding
anything to the contrary in any Credit Document, nothing contained in any Credit Document shall prevent (a) the granting or existence of any Liens on the Bausch & Lomb Escrow Account, the Bausch & Lomb Escrowed Funds or any
Bausch & Lomb New Senior Notes Documents or pursuant to any Bausch & Lomb New Senior Notes Escrow Documents, in each case, in favor of the Bausch & Lomb Escrow Agent or the trustee under the Bausch & Lomb New
Senior Notes Indenture (or their designees), (b) the making of any Restricted Junior Payment in connection with the consummation of the Bausch & Lomb Acquisition and the other Bausch & Lomb Transactions, (c) the holding
of the Bausch & Lomb Escrowed Funds in the Bausch & Lomb Escrow Account or (d) any other transaction contemplated by the Bausch & Lomb New Senior Notes Documents (it being understood, for the avoidance of doubt, that
any such granting of Liens, making of Restricted Junior Payments and other transactions shall be deemed made exclusively in reliance upon this Section 1.8 and not any other exception or basket under any other provision of any Credit Document).
In addition, prior to the
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consummation of the Bausch & Lomb Acquisition, Bausch & Lomb Escrow Issuer shall not be deemed a Subsidiary for purposes of this Agreement or any other Credit Document, and, for
the avoidance of doubt, shall not be subject to the (i) requirements of Section 5 (including, for the avoidance of doubt, Section 5.10) or Section 6 hereof, (ii) representations and warranties in Section 4 hereof or
(iii) Events of Default in Section 8 hereof. The Lenders, the Issuing Bank and their respective Affiliates hereby agree that none of the Administrative Agent, the Collateral Agent or any Affiliate thereof shall have any liability or
obligation to the Lenders, in their capacities as such, with respect to any transactions contemplated by the Bausch & Lomb New Senior Notes Documents. Notwithstanding anything to the contrary in any Credit Document, nothing contained in any
Credit Document shall prevent the Sun Transactions.
1.9 Acquisition Escrow Debt
Transactions. Notwithstanding anything to the contrary in any Credit Document, nothing contained in any Credit Document shall prevent (a) the incurrence of Acquisition Escrow Debt, (b) the granting or existence of any Liens on
any Acquisition Debt Escrow Account, any Acquisition Debt Escrowed Funds or any Acquisition Debt Escrow Debt Documents, in each case, in favor of any Acquisition Debt Escrow Agent or the agent or trustee under any Acquisition Debt Escrow Debt
Documents (or any designee thereof), (c) the holding of any Acquisition Debt Escrowed Funds in an Acquisition Debt Escrow Account or (d) any other transaction contemplated by any Acquisition Debt Escrow Debt Document (it being understood,
for the avoidance of doubt, that any such incurrence of Acquisition Escrow Debt, granting of Liens and other transactions shall, prior to the consummation of the applicable Escrow Acquisition be deemed made exclusively in reliance upon this
Section 1.8 and not any other exception or basket under any other provision of any Credit Document). In addition, prior to the consummation of the applicable Escrow Acquisition, the applicable Acquisition Debt Escrow Issuer shall not be deemed
a Subsidiary for purposes of this Agreement or any other Credit Document, and, for the avoidance of doubt, shall not be subject to the (i) requirements of Section 5 (including, for the avoidance of doubt, Section 5.10) or
Section 6 hereof, (ii) representations and warranties in Section 4 hereof or (iii) Events of Default in Section 8 hereof. It is understood, for the avoidance of doubt, that from and after the date of the consummation of the
applicable Escrow Acquisition, any Indebtedness incurred to finance such Permitted Acquisition, the granting or existing of any Liens in connection with such Indebtedness (or otherwise) or any other transaction in connection with such Permitted
Acquisition shall be subject to the applicable (i) covenants in Section 5 and Section 6 hereof, and (ii) Events of Default in Section 8 hereof. The Lenders, the Issuing Bank and their respective Affiliates hereby agree that
none of the Administrative Agent, the Collateral Agent or any Affiliate thereof shall have any liability or obligation to the Lenders, in their capacities as such, with respect to any transactions contemplated by any Acquisition Debt Escrow Debt
Documents.
SECTION 2. |
LOANS AND LETTERS OF CREDIT |
2.1 Term
Loans.
(a) Loan Commitments. Subject to the terms and conditions hereof, each
Lender severally agrees to make, on the Third Restatement Date, Tranche B Term Loans in Dollars to Borrower in an amount equal to such Lenders Tranche B Term Loan Commitment.
Any amount borrowed under this Section 2.1(a) and subsequently repaid or prepaid may not be reborrowed. Subject to Sections 2.13(a) and
2.14, all amounts owed hereunder with respect to the Tranche A Term Loans and the Tranche B Term Loans shall be paid in full no later than the Tranche A Term Loan Maturity Date and the Tranche B Term Loan Maturity Date, respectively. Each
Lenders Tranche B Term Loan Commitment shall terminate immediately and without further action on the Third Restatement Date after giving effect to the funding of such Lenders Tranche B Term Loan Commitment on such date.
(b) Borrowing Mechanics for Tranche B Term Loans on the Third Restatement Date.
(i) Borrower shall deliver to Administrative Agent a fully executed Funding Notice for Tranche
B Term Loans no later than three days prior to the Third Restatement Date. Promptly upon receipt by Administrative Agent of such Funding Notice, Administrative Agent shall notify each Lender of the proposed borrowings.
(ii) Each Lender shall make its Tranche B Term Loan available to Administrative Agent not later
than 11:00 a.m. (New York City time) on the Third Restatement Date, by wire transfer of same day funds in Dollars at the Principal Office designated by Administrative Agent.
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Upon satisfaction or waiver of the conditions precedent specified herein, Administrative Agent
shall make the proceeds of the Tranche B Term Loans available to Borrower on the Third Restatement Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Loans received by Administrative Agent from Lenders to be
credited to the account of Borrower, at the Principal Office designated by Administrative Agent or to such other account as may be designated in writing to Administrative Agent by Borrower.
2.2 Revolving Loans.
(a) Revolving Commitments. During the Revolving Commitment Period, subject to the terms
and conditions hereof, each Lender severally agrees to make Revolving Loans in Dollars to Borrower in an aggregate amount up to but not exceeding such Lenders Revolving Commitment; provided, that after giving effect to the making of any
Revolving Loans in no event shall the Total Utilization of Revolving Commitments exceed the Revolving Commitments then in effect. Amounts borrowed pursuant to this Section 2.2(a) may be repaid and reborrowed, only in the currency borrowed,
during the Revolving Commitment Period. Each Lenders Revolving Commitment shall expire on the Revolving Commitment Termination Date and all Revolving Loans and all other amounts owed hereunder with respect to the Revolving Loans and the
Revolving Commitments shall be paid in full no later than such date.
(b) Borrowing
Mechanics for Revolving Loans.
(i) Except pursuant to Section 2.4(d), Revolving
Loans that are Base Rate Loans shall be made in an aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of that amount, Revolving Loans that are Eurodollar Rate Loans shall be in an aggregate minimum amount of
$5,000,000 and integral multiples of $1,000,000 in excess of that amount.
(ii) Subject to
Section 3.3(b), whenever Borrower desires that Lenders make Revolving Loans, Borrower shall deliver to Administrative Agent a fully executed and delivered Funding Notice no later than 1:00 p.m. (New York City time) at least three Business Days
in advance of the proposed Credit Date in the case of a Eurodollar Rate Loan and at least one Business Day in advance of the proposed Credit Date in the case of a Revolving Loan that is a Base Rate Loan.
(iii) Notice of receipt of each Funding Notice in respect of Revolving Loans, together with the
amount of each Lenders Pro Rata Share thereof, if any, together with the applicable interest rate, shall be provided by Administrative Agent to each applicable Lender by telefacsimile with reasonable promptness, but (provided
Administrative Agent shall have received such notice by 1:00 p.m. (New York City time)) not later than 2:00 p.m. (New York City time) on the same day as Administrative Agents receipt of such Notice from Borrower.
(iv) Each Lender shall make the amount of its Revolving Loan available to Administrative Agent
not later than 12:00 p.m. (New York City time) on the applicable Credit Date by wire transfer of same day funds in Dollars, at the Principal Office designated by Administrative Agent. Except as provided herein, upon satisfaction or waiver of the
conditions precedent specified herein, Administrative Agent shall make the proceeds of such Revolving Loans available to Borrower on the applicable Credit Date by causing an amount of same day funds in Dollars, equal to the proceeds of all such
Revolving Loans received by Administrative Agent from Lenders to be credited to the account of Borrower at the Principal Office designated by Administrative Agent or such other account as may be designated in writing to Administrative Agent by
Borrower.
2.3 Swing Line Loans.
(a) Swing Line Loans Commitments. During the Revolving Commitment Period, subject to
the terms and conditions hereof, Swing Line Lender shall make Swing Line Loans in Dollars to Borrower in the aggregate amount up to but not exceeding the Swing Line Sublimit; provided, that after giving effect to the making of any Swing Line
Loan, in no event shall the Total Utilization of Revolving Commitments exceed the Revolving Commitments then in effect. Amounts borrowed pursuant to this Section 2.3 may be repaid and reborrowed during the Revolving Commitment Period. Swing
Line Lenders Revolving Commitment shall expire on the Revolving Commitment
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Termination Date and all Swing Line Loans and all other amounts owed hereunder with respect to the Swing Line Loans and the Revolving Commitments shall be paid in full no later than such date.
(b) Borrowing Mechanics for Swing Line Loans.
(i) Swing Line Loans shall be made in an aggregate minimum amount of $500,000 and integral
multiples of $100,000 in excess of that amount.
(ii) Subject to Section 3.3(b),
whenever Borrower desires that Swing Line Lender make a Swing Line Loan, Borrower shall deliver to Administrative Agent a Funding Notice no later than 12:00 p.m. (New York City time) on the proposed Credit Date.
(iii) Swing Line Lender shall make the amount of its Swing Line Loan available to
Administrative Agent not later than 2:00 p.m. (New York City time) on the applicable Credit Date by wire transfer of same day funds in Dollars, at the Principal Office designated by Administrative Agent. Except as provided herein, upon satisfaction
or waiver of the conditions precedent specified herein, Administrative Agent shall make the proceeds of such Swing Line Loans available to Borrower on the applicable Credit Date by causing an amount of same day funds in Dollars equal to the proceeds
of all such Swing Line Loans received by Administrative Agent from Swing Line Lender to be credited to the account of Borrower at the Principal Office designated by Administrative Agent, or to such other account as may be designated in writing to
Administrative Agent by Borrower.
(iv) With respect to any Swing Line Loans which have not
been voluntarily prepaid by Borrower pursuant to Section 2.13, Swing Line Lender may at any time in its sole and absolute discretion, deliver to Administrative Agent (with a copy to Borrower), no later than 1:00 p.m. (New York City time) at
least one Business Day in advance of the proposed Credit Date, a notice (which shall be deemed to be a Funding Notice given by Borrower) requesting that each Lender holding a Revolving Commitment make Revolving Loans that are Base Rate Loans to
Borrower on such Credit Date in an amount equal to the amount of such Swing Line Loans (the Refunded Swing Line Loans) outstanding on the date such notice is given which Swing Line Lender requests Lenders to prepay. Anything
contained in this Agreement to the contrary notwithstanding, (1) the proceeds of such Revolving Loans made by the Lenders other than Swing Line Lender shall be immediately delivered by Administrative Agent to Swing Line Lender (and not to
Borrower) and applied to repay a corresponding portion of the Refunded Swing Line Loans and (2) on the day such Revolving Loans are made, Swing Line Lenders Pro Rata Share of the Refunded Swing Line Loans (determined by reference to Swing
Line Lenders Revolving Commitment, if any) shall be deemed to be paid with the proceeds of a Revolving Loan made by Swing Line Lender to Borrower, and such portion of the Swing Line Loans deemed to be so paid shall no longer be outstanding as
Swing Line Loans and shall no longer be due under the Swing Line Note of Swing Line Lender but shall instead constitute part of Swing Line Lenders outstanding Revolving Loans to Borrower and shall be due under the Revolving Loan Note issued by
Borrower to Swing Line Lender. Borrower hereby authorizes Administrative Agent and Swing Line Lender to charge Borrowers accounts with Administrative Agent and Swing Line Lender (up to the amount available in each such account) in order to
immediately pay Swing Line Lender the amount of the Refunded Swing Line Loans to the extent of the proceeds of such Revolving Loans made by Lenders, including the Revolving Loans deemed to be made by Swing Line Lender, are not sufficient to repay in
full the Refunded Swing Line Loans. If any portion of any such amount paid (or deemed to be paid) to Swing Line Lender should be recovered by or on behalf of Borrower from Swing Line Lender in bankruptcy, by assignment for the benefit of creditors
or otherwise, the loss of the amount so recovered shall be ratably shared among all Lenders in the manner contemplated by Section 2.17.
(v) If for any reason Revolving Loans are not made pursuant to Section 2.3(b)(iv) in an
amount sufficient to repay any amounts owed to Swing Line Lender in respect of any outstanding Swing Line Loans on or before the third Business Day after demand for payment thereof by Swing Line Lender, each Lender holding a Revolving Commitment
shall be deemed to, and hereby agrees to, have purchased a participation in such outstanding Swing Line Loans, and in an amount equal to its Pro Rata Share of the applicable unpaid amount together with accrued interest thereon. Upon one Business
Days notice from Swing Line Lender, each Lender holding a Revolving Commitment shall deliver to Swing Line Lender an amount equal to its respective participation in the applicable unpaid amount in same day funds at the Principal Office of
Swing Line Lender. In order to evidence such participation each Lender holding a Revolving Commitment agrees to enter into a participation agreement at the request of Swing Line Lender in form and substance reasonably satisfactory to Swing Line
Lender. In the event any Lender holding a
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Revolving Commitment fails to make available to Swing Line Lender the amount of such Lenders participation as provided in this paragraph, Swing Line Lender shall be entitled to recover such
amount on demand from such Lender together with interest thereon for three Business Days at the rate customarily used by Swing Line Lender for the correction of errors among banks and thereafter at the Base Rate, as applicable.
(vi) Notwithstanding anything contained herein to the contrary, (1) each Lenders
obligation to make Revolving Loans for the purpose of repaying any Refunded Swing Line Loans pursuant to the second preceding paragraph and each Lenders obligation to purchase a participation in any unpaid Swing Line Loans pursuant to the
immediately preceding paragraph shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against Swing Line Lender,
any Credit Party or any other Person for any reason whatsoever; (B) the occurrence or continuation of a Default or Event of Default; (C) any adverse change in the business, operations, properties, assets, condition (financial or otherwise)
or prospects of any Credit Party; (D) any breach of this Agreement or any other Credit Document by any party thereto; or (E) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing;
provided that such obligations of each Lender are subject to the condition that Swing Line Lender had not received prior notice from Borrower or the Requisite Lenders that any of the conditions under Section 3.3 to the making of the
applicable Refunded Swing Line Loans or other unpaid Swing Line Loans, were not satisfied at the time such Refunded Swing Line Loans or unpaid Swing Line Loans were made; and (2) Swing Line Lender shall not be obligated to make any Swing Line
Loans (A) if it has elected not to do so after the occurrence and during the continuation of a Default or Event of Default, (B) it does not in good faith believe that all conditions under Section 3.3 to the making of such Swing Line
Loan have been satisfied or waived by the Requisite Lenders or (C) at a time when any Lender is a Defaulting Lender unless Swing Line Lender has entered into arrangements reasonably satisfactory to it and Borrower to eliminate Swing Line
Lenders risk with respect to the Defaulting Lenders participation in such Swing Ling Loan, including by cash collateralizing such Defaulting Lenders Pro Rata Share of the outstanding Swing Line Loans.
(c) Resignation and Removal of Swing Line Lender. Swing Line Lender may resign as Swing
Line Lender upon 30 days prior written notice to Administrative Agent, Lenders and Borrower. Swing Line Lender may be replaced at any time by written agreement among Borrower, Administrative Agent, the replaced Swing Line Lender
(provided that no consent will be required if the replaced Swing Line Lender has no Swing Line Loans outstanding) and the successor Swing Line Lender. Administrative Agent shall notify the Lenders of any such replacement of Swing Line Lender.
At the time any such replacement or resignation shall become effective, (i) Borrower shall prepay any outstanding Swing Line Loans made by the resigning or removed Swing Line Lender, (ii) upon such prepayment, the resigning or removed
Swing Line Lender shall surrender any Swing Line Note held by it to Borrower for cancellation, and (iii) Borrower shall issue, if so requested by the successor Swing Line Lender, a new Swing Line Note to the successor Swing Line Lender, in the
principal amount of the Swing Line Sublimit then in effect and with other appropriate insertions. From and after the effective date of any such replacement or resignation, (x) any successor Swing Line Lender shall have all the rights and
obligations of a Swing Line Lender under this Agreement with respect to Swing Line Loans made thereafter and (y) references herein to the term Swing Line Lender shall be deemed to refer to such successor or to any previous Swing
Line Lender, or to such successor and all previous Swing Line Lenders, as the context shall require.
2.4 Issuance of Letters of Credit and Purchase of Participations Therein.
(a) Letters of Credit. During the Revolving Commitment Period, subject to the terms and
conditions hereof, Issuing Bank agrees to issue Letters of Credit for the account of Borrower; provided, (i) the stated amount of each Letter of Credit shall not be less than $100,000 (or the Equivalent Amount thereof in any
alternative currency) or such lesser amount as is acceptable to Issuing Bank; (ii) after giving effect to such issuance, in no event shall the Total Utilization of Revolving Commitments exceed the Revolving Commitments then in effect;
(iii) after giving effect to such issuance, in no event shall the Letter of Credit Usage exceed the Letter of Credit Sublimit then in effect; (iv) in no event shall any standby Letter of Credit have an expiration date later than the
earlier of (1) the Revolving Commitment Termination Date and (2) the date which is 30 months from the date of issuance of such standby Letter of Credit; (v) in no event shall any Letter of Credit have an expiration date later than the
earlier of (1) the Revolving Commitment Termination Date and (2) the date which is 30 months from the date of issuance of such commercial Letter of Credit; and (vi) Issuing Bank shall be under no obligation to issue any Letter of
Credit if the issuance of such Letter of Credit would violate one or more policies of Issuing Bank applicable to letters of credit generally and not solely to letters of
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credit issuable to Borrower. Subject to the foregoing, Issuing Bank may agree that a standby Letter of Credit will automatically be extended for one or more successive periods not to exceed one
year each, unless Issuing Bank elects not to extend for any such additional period, and so notifies the beneficiary thereof 30 days in advance that such standby Letter of Credit will not be so extended; provided that Issuing Bank shall not
extend any such Letter of Credit if it has received written notice that an Event of Default has occurred and is continuing at the time Issuing Bank must elect to allow such extension; provided, further, that if any Lender is a
Defaulting Lender, Issuing Bank shall not be required to issue any Letter of Credit unless Issuing Bank has entered into arrangements reasonably satisfactory to it and Borrower to eliminate Issuing Banks risk with respect to the participation
in Letters of Credit of the Defaulting Lender, including by cash collateralizing such Defaulting Lenders Pro Rata Share of the Letter of Credit Usage.
(b) Notice of Issuance. Subject to Section 3.3(b), whenever Borrower desires the
issuance, amendment or modification of a Letter of Credit, it shall deliver to Administrative Agent an Issuance Notice no later than 12:00 p.m. (New York City time) at least three Business Days (in the case of standby letters of credit) or five
Business Days (in the case of commercial letters of credit), or in each case such shorter period as may be agreed to by Issuing Bank in any particular instance, in advance of the proposed date of issuance, amendment or modification. Upon
satisfaction or waiver of the conditions set forth in Section 3.3, Issuing Bank shall issue, amend or modify the requested Letter of Credit only in accordance with Issuing Banks standard operating procedures. Upon the issuance of any
Letter of Credit or amendment or modification to a Letter of Credit, Issuing Bank shall promptly notify each Lender with a Revolving Commitment of such issuance, which notice shall be accompanied by a copy of such Letter of Credit or amendment or
modification to a Letter of Credit and the amount of such Lenders respective participation in such Letter of Credit pursuant to Section 2.4(e).
(c) Responsibility of Issuing Bank with Respect to Requests for Drawings and Payments.
In determining whether to honor any drawing under any Letter of Credit by the beneficiary thereof, Issuing Bank shall be responsible only to examine the documents delivered under such Letter of Credit with reasonable care so as to ascertain whether
they appear on their face to be in accordance with the terms and conditions of such Letter of Credit. As between Borrower and Issuing Bank, Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of Credit issued by Issuing
Bank, by the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, Issuing Bank shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) failure of the beneficiary of any such Letter of Credit to comply fully with any conditions required in order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of Issuing Bank, including any Governmental Acts; none of the above shall affect or impair, or prevent the vesting of, any of Issuing Banks rights or powers hereunder. Without
limiting the foregoing and in furtherance thereof, any action taken or omitted by Issuing Bank under or in connection with the Letters of Credit or any documents and certificates delivered thereunder, if taken or omitted in good faith, shall not
give rise to any liability on the part of Issuing Bank to Borrower. Notwithstanding anything to the contrary contained in this Section 2.4(c), Borrower shall retain any and all rights it may have against Issuing Bank for any liability arising
solely out of the gross negligence or willful misconduct of Issuing Bank.
(d) Reimbursement by Borrower of Amounts Drawn or Paid Under Letters of Credit. In the
event Issuing Bank has determined to honor a drawing under a Letter of Credit, it shall immediately notify Borrower and Administrative Agent, and Borrower shall reimburse Issuing Bank on or before the Business Day immediately following the date on
which Borrower was notified by Issuing Bank that such drawing was honored (the Reimbursement Date) in an Equivalent Amount in Dollars and in same day funds equal to the amount of such honored drawing; provided that anything
contained herein to the contrary notwithstanding, (i) unless Borrower shall have notified Administrative Agent and Issuing Bank prior to 10:00 a.m. (New York City time) on the date such drawing is honored that Borrower intends to reimburse
Issuing Bank for the amount of such honored drawing with
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funds other than the proceeds of Revolving Loans, Borrower shall be deemed to have given a timely Funding Notice to Administrative Agent requesting Lenders with Revolving Commitments to make
Revolving Loans that are Base Rate Loans on the Reimbursement Date in an Equivalent Amount in Dollars equal to the amount of such honored drawing, and (ii) subject to satisfaction or waiver of the conditions specified in Section 3.3,
Lenders with Revolving Commitments shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans in the amount of such honored drawing, the proceeds of which shall be applied directly by Administrative Agent to reimburse Issuing
Bank for the amount of such honored drawing; and provided, further, that if for any reason proceeds of Revolving Loans are not received by Issuing Bank on the Reimbursement Date in an amount equal to the amount of such honored drawing,
Borrower shall reimburse Issuing Bank, on demand, in an amount in same day funds equal to the excess of the amount of such honored drawing over the aggregate amount of proceeds of such Revolving Loans, if any, which are so received. Nothing in this
Section 2.4(d) shall be deemed to relieve any Lender with a Revolving Commitment from its obligation to make Revolving Loans on the terms and conditions set forth herein, and Borrower shall retain any and all rights it may have against any such
Lender resulting from the failure of such Lender to make such Revolving Loans under this Section 2.4(d).
(e) Lenders Purchase of Participations in Letters of Credit. Immediately upon the
issuance of each Letter of Credit, each Lender having a Revolving Commitment shall be deemed to have purchased, and hereby agrees to irrevocably purchase, from Issuing Bank a participation in such Letter of Credit and any drawings honored thereunder
in an amount equal to such Lenders Pro Rata Share (with respect to the Revolving Commitments) of the maximum amount which is or at any time may become available to be drawn thereunder. In the event that Borrower shall fail for any reason to
reimburse Issuing Bank as provided in Section 2.4(d), Issuing Bank shall promptly notify Administrative Agent of the unreimbursed amount of such honored drawing and Administrative Agent shall notify each Lender with a Revolving Commitment of
such Lenders respective participation therein based on such Lenders Pro Rata Share of the Revolving Commitments. Each Lender with a Revolving Commitment shall make available to Administrative Agent for the account of the Issuing Bank an
amount equal to its respective participation, in an Equivalent Amount in Dollars and in same day funds, at the office of Administrative Agent specified in such notice, not later than 12:00 p.m. (New York City time) on the first business day (under
the laws of the jurisdiction in which such office of Issuing Bank is located) after the date notified by Administrative Agent. The Administrative Agent shall remit the funds so received to the Issuing Bank. In the event that any Lender with a
Revolving Commitment fails to make available to Administrative Agent for the account of the Issuing Bank on such business day the amount of such Lenders participation in such Letter of Credit as provided in this Section 2.4(e), Issuing
Bank (acting through the Administrative Agent) shall be entitled to recover such amount on demand from such Lender together with interest thereon for three Business Days at the rate customarily used by Issuing Bank for the correction of errors among
banks and thereafter at the Base Rate. Nothing in this Section 2.4(e) shall be deemed to prejudice the right of any Lender with a Revolving Commitment to recover from Issuing Bank any amounts made available by such Lender to Issuing Bank
pursuant to this Section in the event that the payment with respect to a Letter of Credit in respect of which payment was made by such Lender constituted gross negligence or willful misconduct on the part of Issuing Bank. In the event Issuing Bank
(acting through the Administrative Agent) shall have been reimbursed by other Lenders pursuant to this Section 2.4(e) for all or any portion of any drawing honored by Issuing Bank under a Letter of Credit, the Issuing Bank (acting through the
Administrative Agent) shall distribute to each Lender which has paid all amounts payable by it under this Section 2.4(e) with respect to such honored drawing such Lenders Pro Rata Share of all payments subsequently received by Issuing
Bank from Borrower in reimbursement of such honored drawing when such payments are received. Any such distribution shall be made to a Lender at its primary address set forth below its name on Appendix B or at such other address as such Lender may
request.
(f) Obligations Absolute. The obligation of Borrower to reimburse Issuing
Bank for drawings honored under the Letters of Credit issued by it and to repay any Revolving Loans made by Lenders pursuant to Section 2.4(d) and the obligations of Lenders under Section 2.4(e) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms hereof under all circumstances including any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit; (ii) the existence of any claim, set-off,
defense or other right which Borrower or any Lender may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons for whom any such transferee may be acting), Issuing Bank, Lender or any other Person or, in the
case of a Lender, against Borrower, whether in connection herewith, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between Borrower or one of its Subsidiaries and the beneficiary for which any
Letter of Credit was procured); (iii) any draft or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or
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inaccurate in any respect; (iv) payment by Issuing Bank under any Letter of Credit against presentation of a draft or other document which does not substantially comply with the terms of
such Letter of Credit; (v) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of Borrower or any of its Subsidiaries; (vi) any breach hereof or any other Credit Document by
any party thereto; (vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing; or (viii) the fact that an Event of Default or a Default shall have occurred and be continuing; provided, in
each case, that payment by Issuing Bank under the applicable Letter of Credit shall not have constituted gross negligence or willful misconduct of Issuing Bank under the circumstances in question.
(g) Indemnification. Without duplication of any obligation of Borrower under
Section 10.2 or 10.3, in addition to amounts payable as provided herein, Borrower hereby agrees to protect, indemnify, pay and save harmless Issuing Bank from and against any and all claims, demands, liabilities, damages, losses, costs, charges
and expenses (including reasonable fees, expenses and disbursements of counsel and allocated costs of internal counsel) which Issuing Bank may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of
Credit by Issuing Bank, other than as a result of (1) the gross negligence or willful misconduct of Issuing Bank or (2) the wrongful dishonor by Issuing Bank of a proper demand for payment made under any Letter of Credit issued by it, or
(ii) the failure of Issuing Bank to honor a drawing under any such Letter of Credit as a result of any Governmental Act, other than any Governmental Act resulting from the gross negligence or willful misconduct of Issuing Bank.
(h) Resignation and Removal of Issuing Bank. An Issuing Bank may resign as Issuing Bank
upon 60 days prior written notice to Administrative Agent, Lenders and Borrower. An Issuing Bank may be replaced at any time by written agreement among Borrower, Administrative Agent, the replaced Issuing Bank (provided that no consent will
be required if the replaced Issuing Bank has no Letters of Credit or reimbursement Obligations with respect thereto outstanding) and the successor Issuing Bank. Administrative Agent shall notify the Lenders of any such replacement of the Issuing
Bank. At the time any such replacement or resignation shall become effective, Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank. From and after the effective date of any such replacement or resignation,
(i) any successor Issuing Bank shall have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term Issuing Bank
shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement or resignation of an Issuing Bank hereunder, the replaced Issuing
Bank shall remain a party hereto to the extent that Letters of Credit issued by it remain outstanding and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement or resignation, but shall not be required to issue additional Letters of Credit.
2.5 Pro Rata Shares; Availability of Funds.
(a) Pro Rata Shares. All Loans shall be made, and all participations shall be purchased,
by Lenders simultaneously and proportionately to their respective Pro Rata Shares, it being understood that no Lender shall be responsible for any default by any other Lender in such other Lenders obligation to make a Loan requested hereunder
or purchase a participation required hereby nor shall any Term Loan Commitment or Revolving Commitment of any Lender be increased or decreased as a result of a default by any other Lender in such other Lenders obligation to make a Loan
requested hereunder or purchase a participation required hereby.
(b) Availability of
Funds. Unless Administrative Agent shall have been notified by any Lender prior to the applicable Credit Date that such Lender does not intend to make available to Administrative Agent the amount of such Lenders Loan requested on such
Credit Date, Administrative Agent may assume that such Lender has made such amount available to Administrative Agent on such Credit Date and Administrative Agent may, in its sole discretion, but shall not be obligated to, make available to Borrower
a corresponding amount on such Credit Date. If such corresponding amount is not in fact made available to Administrative Agent by such Lender, Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender
together with interest thereon, for each day from such Credit Date until the date such amount is paid to Administrative Agent, at the customary rate set by Administrative Agent for the correction of errors among banks for three Business Days and
thereafter at the Base Rate. If such Lender does not pay such corresponding amount forthwith upon Administrative Agents demand therefor, Administrative Agent shall promptly notify Borrower and Borrower shall immediately pay such corresponding
amount to Administrative Agent together with interest thereon, for each day from such Credit Date until the date such
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amount is paid to Administrative Agent, at the rate payable hereunder for Base Rate Loans for such Class of Loans. Nothing in this Section 2.5(b) shall be deemed to relieve any Lender from
its obligation to fulfill its Term Loan Commitments and Revolving Commitments hereunder or to prejudice any rights that Borrower may have against any Lender as a result of any default by such Lender hereunder.
2.6 Use of Proceeds.
(a) The proceeds of the Loans shall be used as follows:
(i) the proceeds of the Revolving Loans, Swing Line Loans and Letters of Credit
made after the Third Restatement Date shall be applied by Borrower, as applicable, to (A) finance a portion of any Acquisition and pay related fees and expenses, (B) fund permitted capital expenditures and permitted acquisitions,
(C) provide for the ongoing working capital requirements of Borrower and its Subsidiaries and (D) provide for general corporate purposes of Borrower and its Subsidiaries; and
(ii) the proceeds of the Tranche B Term Loans made on the Third Restatement
Date shall be applied by Borrower, as applicable, to (A) repay a portion of the Revolving Loans outstanding as of the Third Restatement Date (but not to permanently reduce Revolving Commitments with respect thereto), (B) fund permitted
capital expenditures and permitted acquisitions, (C) provide for general corporate purposes of Borrower and its Subsidiaries and (D) pay all fees and expenses in connection with the incurrence of the Tranche B Term Loans and the repayment
of Revolving Loans (including fees and expenses in connection with the amendment and restatement of the Second Amended and Restated Credit Agreement).
(b) No portion of the proceeds of any Credit Extension shall be used in any manner that causes
or might cause such Credit Extension or the application of such proceeds to violate Regulation T, Regulation U or Regulation X of the Board of Governors or any other regulation thereof.
2.7 Evidence of Debt; Register; Lenders Books and Records; Notes.
(a) Lenders Evidence of Debt. Each Lender shall maintain on its internal records
an account or accounts evidencing the Obligations of Borrower to such Lender, including the amounts of the Loans made by it and each repayment and prepayment in respect thereof. Any such recordation shall be conclusive and binding on Borrower,
absent manifest error; provided, that the failure to make any such recordation, or any error in such recordation, shall not affect any Lenders Revolving Commitments or Borrowers Obligations in respect of any applicable Loans; and
provided further that, in the event of any inconsistency between the Register and any Lenders records, the recordations in the Register shall govern.
(b) Register. Administrative Agent (or its agent or sub-agent appointed by it) shall
maintain at the Principal Office designated by Administrative Agent a register for the recordation of the names and addresses of Lenders and the Revolving Commitments and Loans of each Lender from time to time (the Register). The
Register shall be available for inspection by Borrower or any Lender (with respect to any entry relating to such Lenders Loans) at any reasonable time and from time to time upon reasonable prior notice. Administrative Agent shall record, or
shall cause to be recorded, in the Register the Revolving Commitments and the Loans in accordance with the provisions of Section 10.6, and each repayment or prepayment in respect of the principal amount of the Loans, and any such recordation
shall be conclusive and binding on Borrower and each Lender, absent manifest error; provided that failure to make any such recordation, or any error in such recordation, shall not affect any Lenders Revolving Commitments or
Borrowers Obligations in respect of any Loan. Borrower hereby designates Administrative Agent to serve as Borrowers agent solely for purposes of maintaining the Register as provided in this Section 2.7, and Borrower hereby agrees
that, to the extent Administrative Agent serves in such capacity, Administrative Agent and its officers, directors, employees, agents, sub-agents and affiliates shall constitute Indemnitees.
(c) Notes. If so requested by any Lender by written notice to Borrower (with a copy to
Administrative Agent) at least two Business Days prior to the Third Restatement Date, or at any time thereafter, Borrower shall execute and deliver to such Lender (and/or, if applicable and if so specified in such notice, to any Person who is an
assignee of such Lender pursuant to Section 10.6) on the Third Restatement Date (or, if such notice is delivered after
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the Third Restatement Date, as promptly as practicable after Borrowers receipt of such notice) a Note or Notes to evidence such Lenders Tranche A Term Loans, Tranche B Term Loans, New
Term Loans, Revolving Loan or Swing Line Loan, as the case may be.
2.8 Interest on
Loans.
(a) Except as otherwise set forth herein, each Class of Loans shall bear
interest on the unpaid principal amount thereof from the date made through repayment (whether by acceleration or otherwise) thereof as follows:
(i) in the case of Tranche A Term Loans and Revolving Loans:
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if a Base Rate Loan, at the Base Rate plus the Applicable Margin; or |
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if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus the Applicable Margin; and |
(ii) in the case of Swing Line Loans, at the Base Rate plus the
Applicable Margin; and
(iii) in the case of Tranche B Loans:
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if a Base Rate Loan, at the Base Rate plus the Applicable Margin; or |
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|
|
if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus the Applicable Margin. |
(b) The basis for determining the rate of interest with respect to any Loan (except a Swing
Line Loan which can be made and maintained as a Base Rate Loan only), and the Interest Period with respect to any Eurodollar Rate Loan, shall be selected by Borrower and notified to Administrative Agent and Lenders pursuant to the applicable Funding
Notice or Conversion/Continuation Notice, as the case may be; provided that, until the date on which Administrative Agent notifies Borrower that the primary syndication of the Loans and Revolving Commitments has been completed, as determined
by Administrative Agent (but in no event to exceed 90 days after the Third Restatement Date), the Tranche B Term Loans shall be maintained as either (1) Eurodollar Rate Loans having an Interest Period of no longer than three months or
(2) Base Rate Loans. If on any day a Loan is outstanding with respect to which a Funding Notice or Conversion/Continuation Notice has not been delivered to Administrative Agent in accordance with the terms hereof specifying the applicable basis
for determining the rate of interest, then for that day such Loan shall be a Base Rate Loan.
(c) In connection with Eurodollar Rate Loans there shall be no more than seven
(7) Interest Periods outstanding at any time. In the event Borrower fails to specify between a Base Rate Loan or a Eurodollar Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice, such Loan (if outstanding as a
Eurodollar Rate Loan) will be automatically converted into a Base Rate Loan on the last day of then current Interest Period for such Loan (or if outstanding as a Base Rate Loan will remain as, or (if not then outstanding) will be made as, a Base
Rate Loan). In the event Borrower fails to specify an Interest Period for any Eurodollar Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice, Borrower shall be deemed to have selected an Interest Period of one month. As soon
as practicable after 10:00 a.m. (New York City time) on each Interest Rate Determination Date, Administrative Agent shall determine (which determination shall, absent manifest error, be final, conclusive and binding upon all parties) the interest
rate that shall apply to the Eurodollar Rate Loans for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to Borrower and each
Lender.
(d) Interest payable pursuant to Section 2.8(a) shall be computed (i) in
the case of Base Rate Loans (other than Base Rate Loans for which the Base Rate has been calculated pursuant to the third sentence of the definition thereof), on the basis of a 365 day or 366 day year, as the case may be, and (ii) in the case
of Eurodollar Rate Loans and Base Rate Loans for which the Base Rate has been calculated pursuant to the third sentence of the definition thereof, on the basis of a 360 day year, in each case for the actual number of days elapsed in the period
during which it
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accrues. In computing interest on any Loan, the date of the making of such Loan or the first day of an Interest Period applicable to such Loan or, with respect to a Term Loan, the last Interest
Payment Date with respect to such Term Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate Loan shall be included, and the date of payment of
such Loan or the expiration date of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate Loan shall be
excluded; provided that, if a Loan is repaid on the same day on which it is made, one days interest shall be paid on that Loan.
(e) Except as otherwise set forth herein, interest on each Loan (i) shall accrue on a
daily basis and shall be payable in arrears on each Interest Payment Date with respect to interest accrued on and to each such payment date; (ii) shall accrue on a daily basis and shall be payable in arrears upon any prepayment of that Loan,
whether voluntary or mandatory, to the extent accrued on the amount being prepaid; and (iii) shall accrue on a daily basis and shall be payable in arrears at maturity of the Loans, including final maturity of the Loans; provided,
however, with respect to any voluntary prepayment of a Revolving Loan that is a Base Rate Loan, accrued interest shall instead be payable on the applicable Interest Payment Date.
(f) Borrower agrees to pay to Issuing Bank, with respect to drawings honored under any Letter
of Credit, interest on the amount paid by Issuing Bank in respect of each such honored drawing from the date such drawing is honored to but excluding the date such amount is reimbursed by or on behalf of Borrower at a rate equal to (i) for the
period from the date such drawing is honored to but excluding the applicable Reimbursement Date, the rate of interest otherwise payable hereunder with respect to Revolving Loans that are Base Rate Loans, and (ii) thereafter, the rate of
interest required pursuant to Section 2.10.
(g) Interest payable pursuant to
Section 2.8(f) shall be computed on the basis of a 365/366 day year for the actual number of days elapsed in the period during which it accrues, and shall be payable on demand or, if no demand is made, on the date on which the related drawing
under a Letter of Credit is reimbursed in full. Promptly upon receipt by Issuing Bank of any payment of interest pursuant to Section 2.8(g), Issuing Bank shall distribute to each Lender, out of the interest received by Issuing Bank in respect
of the period from the date such drawing is honored to but excluding the date on which Issuing Bank is reimbursed for the amount of such drawing (including any such reimbursement out of the proceeds of any Revolving Loans), the amount that such
Lender would have been entitled to receive in respect of the letter of credit fee that would have been payable in respect of such Letter of Credit for such period if no drawing had been honored under such Letter of Credit. In the event Issuing Bank
shall have been reimbursed by Lenders for all or any portion of such honored drawing, Issuing Bank shall distribute to each Lender which has paid all amounts payable by it under Section 2.4(e) with respect to such honored drawing such
Lenders Pro Rata Share of any interest received by Issuing Bank in respect of that portion of such honored drawing so reimbursed by Lenders for the period from the date on which Issuing Bank was so reimbursed by Lenders to but excluding the
date on which such portion of such honored drawing is reimbursed by Borrower.
2.9
Conversion/Continuation.
(a) Subject
to Section 2.18 and so long as no Default or Event of Default shall have occurred and then be continuing, Borrower shall have the option:
(i) to convert at any time all or any part of any Term Loan or Revolving Loan
equal to $5,000,000 and integral multiples of $1,000,000 in excess of that amount from one Type of Loan to another Type of Loan; provided that a Eurodollar Rate Loan may only be converted on the expiration of the Interest Period applicable to
such Eurodollar Rate Loan unless Borrower shall pay all amounts due under Section 2.18 in connection with any such conversion;
(ii) upon the expiration of any Interest Period applicable to any Eurodollar
Rate Loan, to continue all or any portion of such Loan equal to $5,000,000 and integral multiples of $1,000,000 in excess of that amount as a Eurodollar Rate Loan;
(b) Subject to Section 3.3(b), Borrower shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 10:00 a.m. (New York City time) at least one Business Day in advance of the proposed conversion date (in the case of a conversion to a Base Rate Loan), at least three Business Days in advance of
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the proposed conversion/continuation date (in the case of a conversion to, or a continuation of, a Eurodollar Rate Loan).
2.10 Default Interest. Upon the occurrence and during the continuance of an Event of Default, any
overdue amounts shall thereafter bear interest (including post petition interest in any proceeding under Insolvency Laws) payable on demand at a rate which is 2% per annum in excess of the interest rate otherwise payable hereunder for Base Rate
Loans (or, in the case of any fees and other amounts, at a rate which is 2% per annum in excess of the interest rate otherwise payable hereunder for Base Rate Loans). Payment or acceptance of the increased rates of interest provided for in this
Section 2.10 is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Administrative Agent or any Lender.
2.11 Fees.
(a) Borrower agrees to pay to Lenders having Revolving Exposure (for purposes of clarity,
excluding the Issuing Bank, in its capacity as such):
(i) commitment fees
accruing at 0.50% per annum on the average of the daily difference between (a) the Revolving Commitments, and (b) the aggregate principal amount of (x) all outstanding Revolving Loans (for the avoidance of doubt, excluding Swing
Line Loans) plus (y) the Letter of Credit Usage; and
(ii) letter of credit fees accruing at the Applicable Margin for Revolving
Loans that are Eurodollar Rate Loans on the average aggregate daily maximum amount available to be drawn under all such Letters of Credit (regardless of whether any conditions for drawing could then be met and determined as of the close of business
on any date of determination).
Notwithstanding the foregoing, any commitment fee which accrued with respect to the Revolving Commitment
of a Defaulting Lender during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by Borrower so long as such Lender shall be a Defaulting Lender except to the extent that such commitment
fee shall otherwise have been due and payable by Borrower prior to such time; and provided, further, that no such commitment fee shall accrue on the Revolving Commitment of a Defaulting Lender so long as such Lender shall be a
Defaulting Lender. All fees referred to in this Section 2.11(a) shall be paid to Administrative Agent at its Principal Office and upon receipt, Administrative Agent shall promptly distribute to each Lender its Pro Rata Share thereof.
(b) Borrower agrees to pay directly to Issuing Bank, for its own account, the following fees:
(i) a fronting fee accruing at 0.125% per annum on the average
aggregate daily maximum amount available to be drawn under all Letters of Credit (determined as of the close of business on any date of determination); and
(ii) such documentary and processing charges for any issuance, amendment,
transfer or payment of a Letter of Credit as are in accordance with Issuing Banks standard schedule for such charges and as in effect at the time of such issuance, amendment, transfer or payment, as the case may be.
(c) Borrower agrees to pay on the Third Restatement Date to Administrative Agent, for the
account of each Lender party to this Agreement as a Lender on Third Restatement Date, as fee compensation for the funding of such Lenders Tranche B Term Loans, a closing fee in an amount equal to the percentage of the stated principal amount
of such Lenders Tranche B Term Loans set forth in Schedule 2.11(c) payable to such Lender from the proceeds of its Tranche B Term Loan as and when funded on the Third Restatement Date. Such closing fee will be in all respects fully earned, due
and payable on the Third Restatement Date and non-refundable and non-creditable thereafter.
-61-
(d) All fees referred to in Section 2.11(a)
and 2.11(b)(i) shall be calculated on the basis of a 360-day year and the actual number of days elapsed and shall be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year during the
Revolving Commitment Period, commencing on March 31, 2012, and on the Revolving Commitment Termination Date.
(e) In addition to any of the foregoing fees, Borrower agrees to pay to Agents such other fees
in the amounts and at the times separately agreed upon.
(f) Borrower agrees to pay on the
Series A Tranche B Term Loan Funding Date to Administrative Agent, for the account of each New Term Loan Lender party to the Series A Tranche B Term Loan Joinder Agreement, as fee compensation for the funding of such New Term Loan Lenders
Series A Tranche B Term Loans, a closing fee in an amount equal to 2.50% of the aggregate principal amount of such New Term Loan Lenders Series A Tranche B Term Loans funded as of the Series A Tranche B Term Loan Funding Date.
(g) Borrower agrees to pay on the Series B Tranche B Term Loan Funding Date to Administrative
Agent, for the account of each New Term Loan Lender party to the Series B Tranche B Term Loan Joinder Agreement, as fee compensation for the funding of such New Term Loan Lenders Series B Tranche B Term Loans, a closing fee in an amount equal
to 2.00% of the aggregate principal amount of such New Term Loan Lenders Series B Tranche B Term Loans funded as of the Series B Tranche B Term Loan Funding Date.
(h) Borrower agrees to pay on New Revolving Loan Commitment Effective Date to Administrative
Agent, for the account of each New Revolving Loan Lender party to the Revolving Loan Commitment Increase Joinder Agreement, as fee compensation for the commitments of such New Revolving Loan Lenders New Revolving Loan Commitments (as defined
in the Revolving Loan Commitment Increase Joinder Agreement), a closing fee in an amount equal to 1.00% of the aggregate principal amount of such New Revolving Loan Lenders New Revolving Loan Commitments as of the New Revolving Loan Commitment
Effective Date.
(i) Borrower agrees to pay on the Series C Tranche B Term Loan Funding
Date to Administrative Agent, for the account of each New Term Loan Lender party to the Series C Tranche B Term Loan Joinder Agreement, (1) as fee compensation for the funding of such New Term Loan Lenders Series C Tranche B Term Loans, a
closing fee in an amount equal to 0.50% of the aggregate principal amount of such New Term Loan Lenders Series C Tranche B Term Loans funded as of the Series C Tranche B Term Loan Funding Date, and (2) a nonrefundable ticking fee on the
amount of such New Term Loan Lenders respective New Term Loan Commitment (as in effect on such date), for the period from October 4, 2012 to but excluding the Series C Tranche B Term Loan Funding Date, at a rate per annum, calculated on
the basis of a year of 360 days and the actual number of days expired during the applicable period, equal to 3.25%.
(j) Borrower agrees to pay on the Amendment No. 3 Effective Date to the Administrative
Agent, for the account of (i) each New Term Loan Lender (as defined in Amendment No. 3) party to Amendment No. 3, as fee compensation for the funding of such New Term Loan Lenders Series A-1 Tranche A Term Loans, a closing fee
in an amount equal to 0.10% of the aggregate principal amount of such New Term Loan
Lenders Series A-1 Tranche A Term Loans funded on the Amendment No. 3 Effective Date, and (ii) each New Revolving Loan Lender (as defined in Amendment No. 3) party to
Amendment No. 3, as fee compensation for the establishment of the New Revolving Loan Commitments (as defined in Amendment No. 3) of such New Revolving Loan Lender, a closing fee in an amount equal to 0.10% of the aggregate principal amount
of the New Revolving Commitments of such New Revolving Loan Lender established as of the Amendment No. 3 Effective Date; provided that, notwithstanding the foregoing, (x) the closing fee payable to any New Term Loan Lender in
respect of Exchanged Series A-1 Tranche A Term Loans (as defined in Amendment No. 3) shall be 0.10% of the aggregate principal amount of such Exchanged Series A-1 Tranche A Term Loans, and (y) with respect to any New Revolving Loan Lender
that had outstanding Revolving Commitments immediately prior to the Amendment No. 3 Effective Date, the closing fee payable to such New Revolving Loan Lender in respect of the aggregate principal amount of its New Revolving Loan Commitments
that are equal to or less than the aggregate principal amount of its Revolving Commitments that were outstanding immediately prior to the Amendment No. 3 Effective Date shall be 0.10% of the aggregate principal amount of its New Revolving Loan
Commitments established as of the Amendment No. 3 Effective Date.
-62-
(k) Borrower agrees to pay: (i) on the Series
A-2 Tranche A Term Loan Funding Date to the Administrative Agent, for the account of each New Term Loan Lender party to the Series A-2 Tranche A Term Loan Joinder Agreement, (1) as fee compensation for the funding of such New Term Loan
Lenders Series A-2 Tranche A Term Loans, a closing fee in an amount equal to 1.50% of the aggregate principal amount of such New Term Loan Lenders Series A-2 Tranche A Term Loans funded as of the Series A-2 Tranche A Term Loan Funding
Date and (2) a nonrefundable ticking fee on the aggregate principal amount of such New Term Loan Lenders Series A-2 Tranche A Term Loan Commitment as of June 28, 2013, for the period from July 29, 2013, to but excluding the
Series A-2 Tranche A Term Loan Funding Date, at a rate per annum, calculated on the basis of a year of 360 days and the actual number of days expired during the applicable period, equal to 2.25%; and (ii) on the Series E Tranche B Term Loan
Funding Date to the Administrative Agent, for the account of each New Term Loan Lender party to the Series E Tranche B Term Loan Joinder Agreement, (1) as fee compensation for the funding of such New Term Loan Lenders Series E Tranche B
Term Loans, a closing fee in an amount equal to 1.50% of the aggregate principal amount of such New Term Loan Lenders Series E Tranche B Term Loans funded as of the Series E Tranche B Term Loan Funding Date and (2) a nonrefundable ticking
fee on the aggregate principal amount of such New Term Loan Lenders Series E Tranche B Term Loan Commitment as of June 28, 2013, for the period from July 29, 2013, to but excluding the Series E Tranche B Term Loan Funding Date, at a
rate per annum, calculated on the basis of a year of 360 days and the actual number of days expired during the applicable period, equal to 3.75%.
(l) Borrower agrees to pay: (i) on the Additional Series A-3 Tranche A Term Loan Funding
Date to the Administrative Agent, for the account of each New Term Loan Lender party to the Additional Series A-3 Tranche A Term Loan Joinder Agreement, as fee compensation for such New Term Loan Lenders Additional Series A-3 Tranche A Term
Loan Commitments (as defined in the Additional Series A-3 Tranche A Term Loan Joinder Agreement), a closing fee in an amount equal to 0.25% of the aggregate principal amount of such New Term Loan Lenders allocated Additional Series A-3 Tranche
A Term Loan Commitments which are actually funded on the Additional Series A-3 Tranche A Term Loan Funding Date and (ii) on the Series E-1 Tranche B Term Loan Funding Date to the Administrative Agent, for the account of each New Term Loan
Lender party to the Series E-1 Tranche B Term Loan Joinder Agreement, a nonrefundable ticking fee on the aggregate principal amount of such New Term Loan Lenders Series E-1 Tranche B Term Loan Commitment (as defined in the Series E-1 Tranche B
Term Loan Joinder Agreement) as of Series E-1 Tranche B Term Loan Funding Date, for the period from January 1, 2014, to but excluding the Series E-1 Tranche B Term Loan Funding Date, at a rate per annum, calculated on the basis of a year of 360
days and the actual number of days expired during the applicable period, equal to 3.00%.
(m) Borrower agrees to pay: (i) on the January 2015 New Revolving Loan Commitment
Effective Date to Administrative Agent, for the account of each New Revolving Loan Lender party to the January 2015 Revolving Loan Commitment Increase Joinder Agreement, as fee compensation for such New Revolving Loan Lenders New Revolving
Loan Commitments, a closing fee in an amount equal to 0.15% of the aggregate principal amount of such New Revolving Loan Lenders New Revolving Loan Commitments as of the January 2015 New Revolving Loan Commitment Effective Date and
(ii) on the January 2015 Additional Series A-3 Tranche A Term Loan Funding Date to Administrative Agent, for the account of each New Term Loan Lender party to the January 2015 Additional Series A-3 Tranche A Term Loan Joinder Agreement, as fee
compensation for such New Term Loan Lenders Additional Series A-3 Tranche A Term Loan Commitments (as defined in the January 2015 Additional Series A-3 Tranche A Term Loan Joinder Agreement), a closing fee in an amount equal to 0.15% of the
aggregate principal amount of such New Term Loan Lenders allocated Additional Series A-3 Tranche A Term Loan Commitments which are actually funded on the January 2015 Additional Series A-3 Tranche A Term Loan Funding Date.
(n) Borrower agrees to pay: (i) on the applicable Series A-4 Tranche A Term Loan Funding
Date to the Administrative Agent, for the account of each New Term Loan Lender party to the Series A-4 Tranche A Term Loan Joinder Agreement, as fee compensation for the funding of such New Term Loan Lenders Series A-4 Tranche A Term Loans, a
closing fee in an amount equal to 0.25% of the aggregate principal amount of such New Term Loan Lenders Series A-4 Tranche A Term Loans funded as of such Series A-4 Tranche A Term Loan Funding Date and (ii) on the earlier to occur of
(a) each Series A-4 Tranche A Term Loan Funding Date (with respect to the Series A-4 Tranche A Term Loans funded on such date) and (b) the Series A-4 Tranche A Term Loan Commitment Termination Date (as defined in the Series A-4 Tranche A
Term Loan Joinder Agreement) (with respect to the unfunded portion of the Series A-4 Tranche A Term Loan Commitments (as defined in the Series A-4 Tranche A Term Loan Joinder Agreement) remaining on such date), to the Administrative Agent, for the
account of each New Term Loan Lender party to the Series A-4 Tranche A Term Loan Joinder Agreement, a nonrefundable commitment fee on the actual daily
-63-
unfunded portion of such New Term Loan Lenders Series A-4 Tranche A Term Loan Commitments as of the date of the Series A-4 Tranche A Term Loan Joinder Agreement, for the period from the
date of the Series A-4 Tranche A Term Loan Joinder Agreement, to the earlier of (x) the final Series A-4 Tranche A Term Loan Funding Date and (y) the Series A-4 Tranche A Term Loan Commitment Termination Date at a rate per annum,
calculated on the basis of a year of 360 days and the actual number of days expired during the applicable period, equal to 0.25% (increasing to 0.50% on the date that is 60 days after the date of the Series A-4 Tranche A Term Loan Joinder
Agreement).
(o) Borrower agrees to pay: (i) on the Series F-1 Tranche B Term Loan
Funding Date to the Administrative Agent, for the account of each New Term Loan Lender party to the Series F Tranche B Term Loan Joinder Agreement with a Series F-1 Tranche B Term Loan Commitment (as defined in the Series F Tranche B Term Loan
Joinder Agreement), (1) as fee compensation for the funding of such New Term Loan Lenders Series F-1 Tranche B Term Loans, a closing fee in an amount equal to 0.50% of the aggregate principal amount of such New Term Loan Lenders
Series F-1 Tranche B Term Loans funded as of the Series F-1 Tranche B Term Loan Funding Date and (2) a nonrefundable ticking fee on the aggregate principal amount of such New Term Loan Lenders Series F-1 Tranche B Term Loan Commitments
for the period beginning on the date that is 30 days after the first date the Series F-1 Tranche B Term Loans have been allocated, and expiring on the earlier of (x) the Series F-1 Tranche B Term Loan Funding Date and (y) the Series F-1
Term Loan Commitment Termination Date (as defined in the Series F Tranche B Term Loan Joinder Agreement), at a rate per annum, calculated on the basis of a year of 360 days and the actual number of days expired during the applicable period, equal to
4.00%; and (ii) (1) on the applicable Series F-2 Tranche B Term Loan Funding Date to the Administrative Agent, for the account of each New Term Loan Lender party to the Series F Tranche B Term Loan Joinder Agreement with a Series F-2
Tranche B Term Loan Commitment (as defined in the Series F Tranche B Term Loan Joinder Agreement), as fee compensation for the funding of such New Term Loan Lenders Series F-2 Tranche B Term Loans, a closing fee in an amount equal to 0.50% of
the aggregate principal amount of such New Term Loan Lenders Series F-2 Tranche B Term Loans funded on such Series F-2 Tranche B Term Loan Funding Date and (2) on the earliest to occur of (a) the applicable Series F-2 Tranche B Term
Loan Funding Date (with respect to the Series F-2 Tranche B Term Loans funded on such date) and (b) the Series F-2 Tranche B Term Loan Commitment Termination Date (as defined in the Series F-2 Tranche B Term Loan Joinder Agreement) (with
respect to the unfunded portion of the Series F-2 Tranche B Term Loan Commitments remaining on such date), to the Administrative Agent, for the account of each New Term Loan Lender party to the Series F-2 Tranche B Term Loan Joinder Agreement with a
Series F-2 Tranche B Term Loan Commitment, a nonrefundable ticking fee on the aggregate principal amount of such New Term Loan Lenders Series F-2 Tranche B Term Loan Commitments for the period beginning on the date that is 30 days after the
first date the Series F-2 Tranche B Term Loans have been allocated, and expiring on the earlier of (x) the final Series F-2 Tranche B Term Loan Funding Date and (y) the Series F-2 Term Loan Commitment Termination Date (as defined in the
Series F Tranche B Term Loan Joinder Agreement), at a rate per annum, calculated on the basis of a year of 360 days and the actual number of days expired during the applicable period, equal to 4.00%.
2.12 Scheduled Payments/Commitment Reductions.
(a) Scheduled Installments. The principal amounts of the Tranche A Term Loans and
Tranche B Term Loans shall be repaid in consecutive quarterly installments (each, an Installment) equal to (i) the amount of Series A-1 Tranche A Term Loans or Series A-2 Tranche A Term Loans, as applicable, set forth below
or (ii) the percentage set forth below of, initially, an amount equal to the aggregate principal amount of Tranche A Term Loans and Tranche B Term Loans, as applicable, outstanding on the Third Restatement Date (or the Amendment No. 8
Effective Date in the case of Series A-3 Tranche A Term Loans (as increased by the principal amount of any Subsequent Exchanged Series A-3 Tranche A Term Loans (as defined in Amendment No. 8))) on the four quarterly scheduled Interest Payment
Dates (each such date, an Installment Date), commencing March 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
Date |
|
Series A-1 Tranche
A Term Loan
Installments |
|
Series A-2 Tranche
A Term Loan
Installments |
|
Series A-3 Tranche
A Term Loan
Installments |
|
Series A-4 Tranche A Term Loan Installments |
|
Series C-2 Tranche
B Term Loan
Installments |
|
Series D-2 Tranche
B Term Loan
Installments |
|
Series E-1 Tranche
B Term Loan
Installments |
|
Series F Tranche B
Term Loan
Installments |
December 31, 2013 |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
March 31, 2014 |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
June 30, 2014 |
|
$16,462,074.09 |
|
$13,019,451.66 |
|
- - |
|
- - |
|
0.25% |
|
0.25% |
|
0.25% |
|
- - |
-64-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
Date |
|
Series A-1 Tranche
A Term Loan
Installments |
|
Series A-2 Tranche
A Term Loan
Installments |
|
Series A-3 Tranche
A Term Loan
Installments |
|
Series A-4 Tranche A Term Loan Installments |
|
Series C-2 Tranche
B Term Loan
Installments |
|
Series D-2 Tranche
B Term Loan
Installments |
|
Series E-1 Tranche
B Term Loan
Installments |
|
Series F Tranche B
Term Loan
Installments |
September 30, 2014 |
|
$16,462,074.09 |
|
$13,019,451.66 |
|
- - |
|
- - |
|
0.25% |
|
0.25% |
|
0.25% |
|
- - |
December 31, 2014 |
|
$16,462,074.09 |
|
$13,019,451.66 |
|
- - |
|
- - |
|
0.25% |
|
0.25% |
|
0.25% |
|
- - |
March 31, 2015 |
|
$16,462,074.09 |
|
$13,019,451.66 |
|
- - |
|
- - |
|
0.25% |
|
0.25% |
|
0.25% |
|
- - |
June 30, 2015 |
|
$16,462,074.09 |
|
$13,019,451.66 |
|
- - |
|
1.25% |
|
0.25% |
|
0.25% |
|
0.25% |
|
0.25% |
September 30, 2015 |
|
$16,462,074.09 |
|
$13,019,451.66 |
|
- - |
|
1.25% |
|
0.25% |
|
0.25% |
|
0.25% |
|
0.25% |
December 31, 2015 |
|
$16,462,074.09 |
|
$13,019,451.66 |
|
- - |
|
1.25% |
|
0.25% |
|
0.25% |
|
0.25% |
|
0.25% |
March 31, 2016 |
|
$16,462,074.09 |
|
$13,019,451.66 |
|
5.42% |
|
1.25% |
|
0.25% |
|
0.25% |
|
0.25% |
|
0.25% |
Tranche A Term Loan Maturity Date |
|
Remaining Balance |
|
Remaining Balance |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
June 30, 2016 |
|
- - |
|
|
|
5.42% |
|
2.50% |
|
0.25% |
|
0.25% |
|
0.25% |
|
0.25% |
September 30, 2016 |
|
- - |
|
|
|
5.42% |
|
2.50% |
|
0.25% |
|
0.25% |
|
0.25% |
|
0.25% |
December 31, 2016 |
|
- - |
|
|
|
5.42% |
|
2.50% |
|
0.25% |
|
0.25% |
|
0.25% |
|
0.25% |
March 31, 2017 |
|
- - |
|
|
|
5.42% |
|
2.50% |
|
0.25% |
|
0.25% |
|
0.25% |
|
0.25% |
June 30, 2017 |
|
- - |
|
|
|
5.42% |
|
5.00% |
|
0.25% |
|
0.25% |
|
0.25% |
|
0.25% |
September 30, 2017 |
|
- - |
|
|
|
5.42% |
|
5.00% |
|
0.25% |
|
0.25% |
|
0.25% |
|
0.25% |
December 31, 2017 |
|
- - |
|
|
|
5.42% |
|
5.00% |
|
0.25% |
|
0.25% |
|
0.25% |
|
0.25% |
March 31, 2018 |
|
- - |
|
|
|
5.42% |
|
5.00% |
|
0.25% |
|
0.25% |
|
0.25% |
|
0.25% |
June 30, 2018 |
|
- - |
|
|
|
5.42% |
|
5.00% |
|
0.25% |
|
0.25% |
|
0.25% |
|
0.25% |
September 30, 2018 |
|
- - |
|
|
|
5.42% |
|
5.00% |
|
0.25% |
|
0.25% |
|
0.25% |
|
0.25% |
Series A-3 Tranche A Term Loan Maturity Date |
|
- - |
|
|
|
Remaining Balance |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
December 31, 2018 |
|
- - |
|
|
|
- - |
|
5.00% |
|
0.25% |
|
0.25% |
|
0.25% |
|
0.25% |
Tranche B Term Loan Maturity Date |
|
- - |
|
|
|
- - |
|
- - |
|
- - |
|
Remaining Balance |
|
- - |
|
- - |
March 31, 2019 |
|
- - |
|
|
|
- - |
|
5.00% |
|
0.25% |
|
- - |
|
0.25% |
|
0.25% |
June 30, 2019 |
|
- - |
|
|
|
- - |
|
5.00% |
|
0.25% |
|
- - |
|
0.25% |
|
0.25% |
September 30, 2019 |
|
- - |
|
|
|
- - |
|
5.00% |
|
0.25% |
|
- - |
|
0.25% |
|
0.25% |
Series C Tranche B Term Loan Maturity Date |
|
- - |
|
|
|
- - |
|
- - |
|
Remaining Balance |
|
- - |
|
- - |
|
- - |
December 31, 2019 |
|
- - |
|
|
|
- - |
|
5.00% |
|
- - |
|
- - |
|
0.25% |
|
0.25% |
March 31, 2020 |
|
- - |
|
|
|
- - |
|
5.00% |
|
- - |
|
- - |
|
0.25% |
|
0.25% |
Series A-4 Tranche A Term Loan Maturity Date |
|
|
|
|
|
|
|
Remaining Balance |
|
|
|
|
|
|
|
- - |
June 30, 2020 |
|
- - |
|
|
|
- - |
|
|
|
- - |
|
- - |
|
0.25% |
|
0.25% |
Series E-1 Tranche B Term Loan Maturity Date |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
Remaining Balance |
|
- - |
-65-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
Date |
|
Series A-1 Tranche
A Term Loan
Installments |
|
Series A-2 Tranche
A Term Loan
Installments |
|
Series A-3 Tranche
A Term Loan
Installments |
|
Series A-4 Tranche A Term Loan Installments |
|
Series C-2 Tranche
B Term Loan
Installments |
|
Series D-2 Tranche
B Term Loan
Installments |
|
Series E-1 Tranche
B Term Loan
Installments |
|
Series F Tranche B
Term Loan
Installments |
September 30, 2020 |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
0.25% |
December 31, 2020 |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
0.25% |
March 31, 2021 |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
0.25% |
June 30, 2021 |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
0.25% |
September 30, 2021 |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
0.25% |
December 31, 2021 |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
0.25% |
March 31, 2022 |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
0.25% |
Series F Tranche B Term Loan Maturity Date |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
- - |
|
Remaining Balance |
Notwithstanding the foregoing, (x) such Installments shall be reduced in connection with any voluntary or mandatory
prepayments of the Tranche A Term Loans and/or the Tranche B Term Loans as the case may be, in accordance with Sections 2.13, 2.14 and 2.15, as applicable; and (y) the Tranche A Term Loans and the Tranche B Term Loans, together with all other
amounts owed hereunder with respect thereto, shall, in any event, be paid in full no later than the Tranche A Term Loan Maturity Date and the Tranche B Term Loan Maturity Date, respectively.
In the event that any Extended Term Loans are established, such Extended Term Loans shall, subject to the requirements of Section 2.26,
mature and be repaid by the Borrower in the amounts and on the dates set forth in the applicable Extension Amendment.
2.13 Voluntary Prepayments/Commitment Reductions.
(a) Voluntary Prepayments.
(i) Any time and from time to time:
(A) with respect to Base Rate Loans, Borrower may prepay any such Loans on any
Business Day in whole or in part (in the case of a partial prepayment of Loans borrowed in Dollars, in an aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of that amount);
(B) with respect to Eurodollar Rate Loans, subject to Section 2.18(c),
Borrower may prepay any such Loans on any Business Day in whole or in part (in the case of a partial prepayment, in an aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of that amount); and
(C) with respect to Swing Line Loans, Borrower may prepay any such Loans on any
Business Day in whole or in part (in the case of a partial prepayment, in an aggregate minimum amount of $500,000, and in integral multiples of $100,000 in excess of that amount).
(ii) All such prepayments shall be made:
(A) upon not less than one Business Days prior written notice in the case
of Base Rate Loans;
(B) upon not less than three Business Days prior
written notice in the case of Eurodollar Rate Loans; and
(C) upon written
notice on the date of prepayment, in the case of Swing Line Loans;
-66-
in each case substantially in the form of Exhibit E and given to Administrative Agent or Swing Line Lender, as
the case may be, by 12:00 p.m. (New York City time) on the date required (and Administrative Agent will promptly transmit such original notice for Term Loans or Revolving Loans, as the case may be, by telefacsimile or telephone to each Lender) or
Swing Line Lender, as the case may be. Upon the giving of any such notice, the principal amount of the Loans specified in such notice shall become due and payable on the prepayment date specified therein; provided that a notice of voluntary
prepayment may state that such notice is conditional upon the effectiveness of other credit facilities or the receipt of the proceeds from the issuance of other Indebtedness or upon the closing of an acquisition transaction, in which case such
notice of prepayment may be revoked by Borrower (by notice to Administrative Agent on or prior to the specified date) if such condition is not satisfied. Any such voluntary prepayment shall be applied as specified in Section 2.15(a).
Notwithstanding Section 2.13(a) above, in the event that on or prior to the first anniversary of the Third Restatement Date, the
Borrower (x) makes any prepayment of Tranche B Term Loans in connection with any Repricing Transaction or (y) effects any amendment of this Agreement resulting in a Repricing Transaction, the Borrower shall pay to the Administrative Agent,
for the ratable account of each of the applicable Lenders, (I) in the case of clause (x) above, a prepayment premium of 1% of the amount of the Tranche B Term Loans being prepaid and (II) in the case of clause (y) above,
a payment equal to 1% of the aggregate amount of the applicable Tranche B Term Loans outstanding immediately prior to such amendment.
Notwithstanding Section 2.13(a) above, in the event that on or prior to the first anniversary of the Series A Tranche B Term Loan
Funding Date, the Borrower (x) makes any prepayment of the Series A Tranche B Term Loans in connection with any Repricing Transaction or (y) effects any amendment of the Credit Agreement resulting in a Repricing Transaction, the Borrower
shall pay to the Administrative Agent, for the ratable account of each of the applicable Lenders, (I) in the case of clause (x) above, a prepayment premium of 1% of the amount of the Series A Tranche B Term Loans being prepaid and (II) in
the case of clause (y) above, a payment equal to 1% of the aggregate amount of the applicable Series A Tranche B Term Loans outstanding immediately prior to such amendment.
Notwithstanding Section 2.13(a) above, in the event that on or prior to the first anniversary of the Series A Tranche B Term Loan
Funding Date, the Borrower (x) makes any prepayment of the Series B Tranche B Term Loans in connection with any Repricing Transaction or (y) effects any amendment of the Credit Agreement resulting in a Repricing Transaction, the Borrower
shall pay to the Administrative Agent, for the ratable account of each of the applicable Lenders, (I) in the case of clause (x) above, a prepayment premium of 1% of the amount of the Series B Tranche B Term Loans being prepaid and (II) in
the case of clause (y) above, a payment equal to 1% of the aggregate amount of the applicable Series B Tranche B Term Loans outstanding immediately prior to such amendment.
Notwithstanding Section 2.13(a) above, in the event that on or prior to the first anniversary of the Series D Tranche B Term Loan
Funding Date, the Borrower (x) makes any prepayment of the Series C Tranche B Term Loans in connection with any Repricing Transaction or (y) effects any amendment of the Credit Agreement resulting in a Repricing Transaction, the Borrower
shall pay to the Administrative Agent, for the ratable account of each of the applicable Lenders, (I) in the case of clause (x) above, a prepayment premium of 1% of the amount of the Series C Tranche B Term Loans being prepaid and (II) in
the case of clause (y) above, a payment equal to 1% of the aggregate amount of the applicable Series C Tranche B Term Loans outstanding immediately prior to such amendment.
Notwithstanding Section 2.13(a) above, in the event that on or prior to the first anniversary of the Series D Tranche B Term Loan
Funding Date, the Borrower (x) makes any prepayment of the Series D Tranche B Term Loans in connection with any Repricing Transaction or (y) effects any amendment of the Credit Agreement resulting in a Repricing Transaction, the Borrower
shall pay to the Administrative Agent, for the ratable account of each of the applicable Lenders, (I) in the case of clause (x) above, a prepayment premium of 1% of the amount of the Series D Tranche B Term Loans being prepaid and (II) in
the case of clause (y) above, a payment equal to 1% of the aggregate amount of the applicable Series D Tranche B Term Loans outstanding immediately prior to such amendment.
Notwithstanding Section 2.13(a) above, in the event that on or prior to the six month anniversary of the Series C-1 Tranche B Term
Loan Funding Date, the Borrower (x) makes any prepayment of the Series C-1 Tranche B Term Loans in connection with any Repricing Transaction or (y) effects any amendment of the Credit Agreement resulting in a Repricing Transaction, the
Borrower shall pay to the Administrative Agent, for the ratable account of each of the applicable Lenders, (I) in the case of clause (x) above, a prepayment premium of 1% of the amount of the Series C-1
-67-
Tranche B Term Loans being prepaid and (II) in the case of clause (y) above, a payment equal to 1% of the aggregate amount of the applicable Series C-1 Tranche B Term Loans outstanding
immediately prior to such amendment.
Notwithstanding Section 2.13(a) above, in the event that on or prior to the six month
anniversary of the Series D-1 Tranche B Term Loan Funding Date, the Borrower (x) makes any prepayment of the Series D-1 Tranche B Term Loans in connection with any Repricing Transaction or (y) effects any amendment of the Credit Agreement
resulting in a Repricing Transaction, the Borrower shall pay to the Administrative Agent, for the ratable account of each of the applicable Lenders, (I) in the case of clause (x) above, a prepayment premium of 1% of the amount of the
Series D-1 Tranche B Term Loans being prepaid and (II) in the case of clause (y) above, a payment equal to 1% of the aggregate amount of the applicable Series D-1 Tranche B Term Loans outstanding immediately prior to such amendment.
Notwithstanding Section 2.13(a) above, in the event that on or prior to the six month anniversary of the Series E Tranche B Term
Loan Funding Date, the Borrower (x) makes any prepayment of the Series E Tranche B Term Loans in connection with any Repricing Transaction or (y) effects any amendment of the Credit Agreement resulting in a Repricing Transaction, the
Borrower shall pay to the Administrative Agent, for the ratable account of each of the applicable Lenders, (I) in the case of clause (x) above, a prepayment premium of 1% of the amount of the Series E Tranche B Term Loans being prepaid and
(II) in the case of clause (y) above, a payment equal to 1% of the aggregate amount of the applicable Series E Tranche B Term Loans outstanding immediately prior to such amendment.
Notwithstanding Section 2.13(a) above, in the event that on or prior to the six month anniversary of the Series C-2 Tranche B Term
Loan Funding Date, the Borrower (x) makes any prepayment of the Series C-2 Tranche B Term Loans in connection with any Repricing Transaction or (y) effects any amendment of the Credit Agreement resulting in a Repricing Transaction, the
Borrower shall pay to the Administrative Agent, for the ratable account of each of the applicable Lenders, (I) in the case of clause (x) above, a prepayment premium of 1% of the amount of the Series C-2 Tranche B Term Loans being prepaid
and (II) in the case of clause (y) above, a payment equal to 1% of the aggregate amount of the applicable Series C-2 Tranche B Term Loans outstanding immediately prior to such amendment.
Notwithstanding Section 2.13(a) above, in the event that on or prior to the six month anniversary of the Series D-2 Tranche B Term
Loan Funding Date, the Borrower (x) makes any prepayment of the Series D-2 Tranche B Term Loans in connection with any Repricing Transaction or (y) effects any amendment of the Credit Agreement resulting in a Repricing Transaction, the
Borrower shall pay to the Administrative Agent, for the ratable account of each of the applicable Lenders, (I) in the case of clause (x) above, a prepayment premium of 1% of the amount of the Series D-2 Tranche B Term Loans being prepaid
and (II) in the case of clause (y) above, a payment equal to 1% of the aggregate amount of the applicable Series D-2 Tranche B Term Loans outstanding immediately prior to such amendment.
Notwithstanding Section 2.13(a) above, in the event that on or prior to the six month anniversary of the Series E-1 Tranche B Term
Loan Funding Date, the Borrower (x) makes any prepayment of the Series E-1 Tranche B Term Loans in connection with any Repricing Transaction or (y) effects any amendment of the Credit Agreement resulting in a Repricing Transaction, the
Borrower shall pay to the Administrative Agent, for the ratable account of each of the applicable Lenders, (I) in the case of clause (x) above, a prepayment premium of 1% of the amount of the Series E-1 Tranche B Term Loans being prepaid
and (II) in the case of clause (y) above, a payment equal to 1% of the aggregate amount of the applicable Series E Tranche B Term Loans outstanding immediately prior to such amendment.
Notwithstanding Section 2.13(a) above, in the event that on or prior to the six month anniversary of the Series F Tranche B Term
Loan Funding Date, the Borrower (x) makes any prepayment of the Series F Tranche B Term Loans in connection with any Repricing Transaction or (y) effects any amendment of the Credit Agreement resulting in a Repricing Transaction, the
Borrower shall pay to the Administrative Agent, for the ratable account of each of the applicable Lenders, (I) in the case of clause (x) above, a prepayment premium of 1% of the amount of the Series F Tranche B Term Loans being prepaid and
(II) in the case of clause (y) above, a payment equal to 1% of the aggregate amount of the applicable Series F Tranche B Term Loans outstanding immediately prior to such amendment.
Notwithstanding
Section 2.13(a) above, in the event that from the Amendment No. 11 Effective Date to the date that is on or prior to the six month anniversary of the Amendment No. 11 Effective Date, the Borrower (x) makes any prepayment of the
Series D-2 Tranche B Term Loans in connection with any Repricing Transaction or (y) effects any amendment of the Credit Agreement resulting in a Repricing Transaction, the Borrower shall pay to the Administrative Agent, for the ratable account
of each of the applicable Lenders, (I) in the case of clause (x) above, a
-68-
prepayment premium of 1% of the amount of the Series D-2 Tranche B Term Loans
being prepaid and (II) in the case of clause (y) above, a payment equal to 1% of the aggregate amount of the applicable Series D-2 Tranche B Term Loans outstanding immediately prior to such amendment.
(b) Voluntary Commitment Reductions.
(i) Borrower may, upon not less than three Business Days prior written or telephonic
notice promptly confirmed by delivery of written notice thereof to Administrative Agent (which original written or telephonic notice Administrative Agent will promptly transmit by telefacsimile or telephone to each applicable Lender), at any time
and from time to time terminate in whole or permanently reduce in part, without premium or penalty, the Revolving Commitments in an amount up to the amount by which the Revolving Commitments exceed the Total Utilization of Revolving Commitments at
the time of such proposed termination or reduction; provided that any such partial reduction of the Revolving Commitments shall be in an aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of that amount.
(ii) Borrowers notice to Administrative Agent shall designate the date (which shall
be a Business Day) of such termination or reduction and the amount of any partial reduction, and such termination or reduction of the Revolving Commitments shall be effective on the date specified in Borrowers notice and shall reduce the
Revolving Commitment of each Lender proportionately to its Pro Rata Share thereof; provided that a notice of termination or partial reduction may state that such notice is conditional upon the effectiveness of other credit facilities or the
receipt of the proceeds from the issuance of other Indebtedness or upon the closing of an acquisition transaction, in which case such notice of termination or partial reduction may be revoked by Borrower (by notice to the Administrative Agent on or
prior to the specified date) if such condition is not satisfied.
2.14 Mandatory Prepayments.
(a) Asset Sales. No later than three Business Days following the date of
receipt by Borrower or any of its Subsidiaries of any Net Asset Sale Proceeds, Borrower shall prepay the Loans as set forth in Section 2.15(b) in an aggregate amount equal to such Net Asset Sale Proceeds; provided that so long as no
Event of Default shall have occurred and be continuing, Borrower or any of its Subsidiaries may invest an amount equal to all or any portion of such Net Asset Sale Proceeds received from Asset Sales of assets within 365 days of receipt thereof in
real estate, equipment and other tangible assets, Intellectual Property or Intellectual Property licenses useful in the business of Borrower and its Subsidiaries (or any similar or related or ancillary business), in which case the amount of Net
Asset Sale Proceeds so invested shall not be required to be applied to prepay the Loans pursuant to this Section 2.14(a).
(b) Insurance/Condemnation Proceeds. No later than three Business Days following the
date of receipt by Borrower or any of its Subsidiaries, or Administrative Agent as loss payee, of any Net Insurance/Condemnation Proceeds in excess of $25,000,000 in the aggregate in any Fiscal Year, Borrower shall prepay the Loans as set forth in
Section 2.15(b) in an aggregate amount equal to such Net Insurance/Condemnation Proceeds; provided that, so long as no Event of Default shall have occurred and be continuing, Borrower or any of its Subsidiaries may invest an amount equal
to all or any portion of such Net Insurance/Condemnation Proceeds within 365 days of receipt thereof in real estate, equipment and other tangible assets useful in the business of Borrower and its Subsidiaries (or any similar or related or ancillary
business), which investment may include the repair, restoration or replacement of the applicable assets thereof, in which case the amount of Net Insurance/Condemnation Proceeds so invested shall not be required to be applied to prepay the Loans
pursuant to this Section 2.14(b).
(c) Issuance of Equity Securities. No later
than three Business Days following the date of receipt by Borrower or any of its Subsidiaries of any Cash proceeds from a capital contribution to, or the issuance of any Equity Interests of, Borrower or any of its Subsidiaries (other than
(i) pursuant to any employee stock or stock option compensation plan or any employment agreement, (ii) the receipt of a capital contribution from, or the issuance of Equity Interests to, Borrower or any of its Subsidiaries, (iii) the
issuance of directors qualifying shares or of other nominal amounts of other Equity Interests that are required to be held by specified Persons under Applicable Law and (iv) in connection with a Permitted Majority Investment), Borrower
shall prepay the Loans as set forth in Section 2.15(b) in an aggregate amount equal to 50% of such proceeds, in each case, net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses; provided that if, as of the end of the most recent four consecutive Fiscal Quarter period (determined for any
-69-
such period by reference to the Compliance Certificate delivered pursuant to Section 5.1(c) calculating the Leverage Ratio as of the last day of such four consecutive Fiscal Quarter period),
the Leverage Ratio determined on a Pro Forma Basis shall be 3.25:1.00 or less, Borrower shall only be required to make prepayments otherwise required hereby in an amount equal to 25% of such proceeds.
(d) Issuance of Debt. No later than two Business Days following the date of receipt by
Borrower or any of its Subsidiaries of any Cash proceeds from the incurrence of any Indebtedness of Borrower or any of its Subsidiaries (other than with respect to any Indebtedness permitted to be incurred pursuant to Section 6.1), Borrower
shall prepay the Loans as set forth in Section 2.15(b) in an aggregate amount equal to 100% of such proceeds, net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including reasonable legal
fees and expenses.
(e) Consolidated Excess Cash Flow. In the event that there
shall be Consolidated Excess Cash Flow for any Fiscal Year (commencing with Fiscal Year 2012), Borrower shall, no later than ninety days after the end of such Fiscal Year, prepay the Loans as set forth in Section 2.15(b) in an aggregate amount
equal to (i) 50% of such Consolidated Excess Cash Flow; provided that if, as of the last day of the most recently ended Fiscal Year the Leverage Ratio (determined for any such period by reference to the Compliance Certificate delivered
pursuant to Section 5.1(c) calculating the Leverage Ratio as of the last day of such Fiscal Year) shall be (x) 3.25:1.00 or less, Borrower shall only be required to make the prepayments otherwise required hereby in an amount equal to 25%
of such Consolidated Excess Cash Flow or (y) 2.50:1.00 or less, Borrower shall not be required to make prepayments pursuant to this Section 2.14(e) with respect to such Fiscal Year; minus (ii) voluntary repayments of the Loans
(excluding repayments of Revolving Loans or Swing Line Loans except to the extent the Revolving Commitments are permanently reduced in connection with such repayments) made with Internally Generated Cash.
(f) Revolving Loans and Swing Line Loans. (i) Borrower shall from time to time
prepay first, the Swing Line Loans, and second, the Revolving Loans to the extent necessary so that the Total Utilization of Revolving Commitments shall not at any time exceed the Revolving Commitments then in effect.
(g) Prepayment Certificate. Concurrently with any prepayment of the Loans pursuant to
Sections 2.14(a) through 2.14(e), Borrower shall deliver to Administrative Agent a certificate of an Authorized Officer demonstrating the calculation of the amount of the applicable net proceeds or Consolidated Excess Cash Flow, as the case may be.
In the event that Borrower shall subsequently determine that the actual amount received exceeded the amount set forth in such certificate, Borrower shall promptly make an additional prepayment of the Loans in an amount equal to such excess, and
Borrower shall concurrently therewith deliver to Administrative Agent a certificate of an Authorized Officer demonstrating the derivation of such excess.
2.15 Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of Loans. Any prepayment of any Loan
pursuant to Section 2.13(a) shall be applied as specified by Borrower in the applicable notice of prepayment; provided that, in the event Borrower fails to specify the Loans to which any such prepayment shall be applied, such prepayment
shall be applied as follows:
first, to repay outstanding Swing Line Loans to the full extent thereof;
second, to repay outstanding Revolving Loans to the full extent thereof; and
third, to prepay the Term Loans on a pro rata basis (in accordance with the respective outstanding principal amounts
thereof); and further applied on a pro rata basis to reduce the remaining scheduled Installments of principal of the Tranche A Term Loans, Tranche B Term Loans and the New Term Loans (if any).
(b) Application of Mandatory Prepayments by Type of Loans. Any amount required to be
paid pursuant to Sections 2.14(a) through 2.14(e) shall be applied as follows:
-70-
first, to prepay Term Loans on a pro rata basis (in accordance with the
respective outstanding principal amounts thereof) and further applied on a pro rata basis to reduce the remaining scheduled Installments of principal of the Tranche A Term Loans, Tranche B Term Loans and the New Term Loans (if any);
second, to prepay the Swing Line Loans to the full extent thereof;
third, to prepay the Revolving Loans to the full extent thereof;
fourth, to prepay outstanding reimbursement obligations with respect to Letters of Credit;
fifth, to cash collateralize Letters of Credit; and
sixth, to Borrower.
(c) Application of Prepayments of Loans to Base Rate Loans and Eurodollar Rate Loans.
Considering each Class of Loans being prepaid separately, any prepayment thereof shall be applied, as between the Base Rate Loans and the Eurodollar Rate Loans, as directed by Borrower.
(d) Waivable Mandatory Prepayment. Anything contained herein to the contrary
notwithstanding, so long as any Tranche A Term Loans are outstanding, in the event Borrower is required to make any mandatory prepayment (a Waivable Mandatory Prepayment) of the Tranche B Term Loans, not less than five Business
Days prior to the date (the Required Prepayment Date) on which Borrower is required to make such Waivable Mandatory Prepayment, Borrower shall notify Administrative Agent of the amount of such prepayment, and Administrative Agent
will promptly thereafter notify each Lender holding an outstanding Tranche B Term Loan of the amount of such Lenders Pro Rata Share of such Waivable Mandatory Prepayment and such Lenders option to refuse such amount. Each such Lender may
exercise such option by giving written notice to Borrower and Administrative Agent of its election to do so on or before the third Business Day prior to the Required Prepayment Date (it being understood that any Lender which does not notify Borrower
and Administrative Agent of its election to exercise such option on or before the third Business Day prior to the Required Prepayment Date shall be deemed to have elected, as of such date, not to exercise such option). On the Required Prepayment
Date, Borrower shall pay to Administrative Agent the amount of the Waivable Mandatory Prepayment, which amount shall be applied (i) in an amount equal to that portion of the Waivable Mandatory Prepayment payable to those Lenders that have
elected not to exercise such option, to prepay the Tranche B Term Loans of such Lenders (which prepayment shall be applied to the scheduled Installments of principal of the Tranche B Term Loans in accordance with Section 2.15(b)), and
(ii) in an amount equal to that portion of the Waivable Mandatory Prepayment otherwise payable to those Lenders that have elected to exercise such option, to prepay the Tranche A Term Loans (which prepayment shall be further applied to the
scheduled installments of principal of the Tranche A Term Loans in accordance with Section 2.15(b)), with any excess after such prepayment of the Tranche A Term Loans being further applied in accordance with clauses second through
sixth of Section 2.15(b).
2.16 General Provisions Regarding Payments.
(a) All payments by Borrower of principal, interest, fees and other Obligations shall be made
in Dollars in same day funds, without defense, recoupment, set-off or counterclaim, free of any restriction or condition, and delivered to Administrative Agent not later than (x) 12:00 p.m. (New York City time) on the date due at the Principal
Office designated by Administrative Agent for the account of Lenders; for purposes of computing interest and fees, funds received by Administrative Agent after that time on such due date shall be deemed to have been paid by Borrower on the next
succeeding Business Day.
(b) All payments in respect of the principal amount of any Loan
(other than voluntary prepayments of Revolving Loans that are Base Rate Loans) shall be accompanied by payment of accrued interest on the principal amount being repaid or prepaid, and all such payments (and, in any event, any payments in respect of
any Loan on a date when interest is due and payable with respect to such Loan) shall be applied to the payment of interest then due and payable before application to principal.
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(c) Administrative Agent (or its agent or
sub-agent appointed by it) shall promptly distribute to each Lender at such address as such Lender shall indicate in writing, such Lenders applicable Pro Rata Share of all payments and prepayments of principal and interest due hereunder,
together with all other amounts due thereto, including, all fees payable with respect thereto, to the extent received by Administrative Agent.
(d) Notwithstanding the foregoing provisions hereof, if any Conversion/Continuation Notice is
withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any Eurodollar Rate Loans, Administrative Agent shall give effect thereto in apportioning payments received thereafter.
(e) Subject to the provisos set forth in the definition of Interest Period as they
may apply to Revolving Loans, whenever any payment to be made hereunder with respect to any Loan shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and, with respect to
Revolving Loans only, such extension of time shall be included in the computation of the payment of interest hereunder or of the Revolving Commitment fees hereunder.
(f) Except as otherwise expressly provided herein, all payments by Borrower hereunder shall be
made to Administrative Agent, for the account of the respective Lenders to which such payment is owed, in Dollars and otherwise in the manner set forth in clause (a) of this Section 2.16.
(g) Administrative Agent shall deem any payment by or on behalf of Borrower hereunder that is
not made in same day funds prior to 12:00 p.m. (New York City time) to be a non-conforming payment. Any such payment shall not be deemed to have been received by Administrative Agent until the later of (i) the time such funds become available
funds, and (ii) the next succeeding Business Day. Administrative Agent shall give prompt telephonic notice to Borrower and each applicable Lender (confirmed in writing) if any payment is non-conforming. Any non-conforming payment may constitute
or become a Default or Event of Default in accordance with the terms of Section 8.1(a). Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event
less than the period from the date of such payment to the next succeeding applicable Business Day) at the rate determined pursuant to Section 2.10 from the date such amount was due and payable until the date such amount is paid in full.
(h) If an Event of Default shall have occurred and not otherwise been waived, and the maturity
of the Obligations shall have been accelerated pursuant to Section 8.1, all payments or proceeds received by Agents hereunder in respect of any of the Obligations, shall be applied in accordance with the application arrangements described in
Section 9.2 of the Second Amended and Restated Pledge and Security Agreement and the analogous sections of any other Collateral Documents.
2.17 Ratable Sharing. Lenders hereby agree among themselves that, except as otherwise provided in
the Collateral Documents with respect to amounts realized from the exercise of rights with respect to Liens on the Collateral, if any of them shall, whether by voluntary payment (other than a voluntary prepayment of Loans made and applied in
accordance with the terms hereof), through the exercise of any right of set-off, consolidation or bankers lien, by counterclaim or cross action or by the enforcement of any right under the Credit Documents or otherwise, or as adequate
protection of a deposit treated as cash collateral under any Insolvency Laws, receive payment or reduction of a proportion of the aggregate amount of principal, interest, amounts payable in respect of Letters of Credit, fees and other amounts then
due and owing to such Lender hereunder or under the other Credit Documents (collectively, the Aggregate Amounts Due to such Lender) which is greater than the proportion received by any other Lender in respect of the Aggregate
Amounts Due to such other Lender, then the Lender receiving such proportionately greater payment shall (a) notify Administrative Agent and each other Lender of the receipt of such payment and (b) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller of a participation simultaneously upon the receipt by such seller of its portion of such payment) in the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion to the Aggregate Amounts Due to them; provided that, if all or part of such proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Borrower or otherwise, those purchases shall be rescinded and the purchase prices paid for such participations shall be returned to such purchasing Lender ratably to the extent of
such recovery, but without interest. Borrower expressly consents to the foregoing arrangement and agrees that any holder of a participation so purchased may exercise any and
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all rights of bankers lien, consolidation, set-off or counterclaim with respect to any and all monies owing by Borrower to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder. The provisions of this Section 2.17 shall not be construed to apply to (a) any payment made by Borrower pursuant to and in accordance with the express terms of this Agreement or
(b) any payment obtained by any Lender as consideration for the assignment or sale of a participation in any of its Loans or other Obligations owed to it in accordance herewith.
2.18 Making or Maintaining Eurodollar Rate Loans.
(a) Inability to Determine Applicable Interest Rate. In the event that Administrative
Agent shall have determined (which determination shall be final and conclusive and binding upon all parties hereto absent manifest error), on any Interest Rate Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the London interbank market, adequate and fair means do not exist for ascertaining the interest rate applicable to such Loans on the basis provided for in the definition of Adjusted Eurodollar Rate for any requested Interest
Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, Administrative Agent shall on such date give notice (by email or by telephone confirmed in writing) to
Borrower and each Lender of such determination, whereupon (i) no Loans may be made as, or converted to, Eurodollar Rate Loans until such time as Administrative Agent notifies Borrower and Lenders that the circumstances giving rise to such
notice no longer exist, and (ii) any Funding Notice or Conversion/Continuation Notice given by Borrower with respect to the Loans in respect of which such determination was made shall be deemed to be rescinded by Borrower.
(b) Illegality or Impracticability of Eurodollar Rate Loans. In the event that on any
date any Lender shall have determined (which determination shall be final and conclusive and binding upon all parties hereto absent manifest error) that the making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any such treaty, governmental rule, regulation, guideline or order not having the force
of law even though the failure to comply therewith would not be unlawful), or (ii) has become impracticable, as a result of contingencies occurring after the date hereof which materially and adversely affect the London interbank market or the
position of such Lender in that market, then, and in any such event, such Lender shall be an Affected Lender and it shall on that day give notice (by email or by telephone confirmed in writing) to Borrower and Administrative Agent
of such determination (which notice Administrative Agent shall promptly transmit to each other Lender). If the Administrative Agent receives a notice from (x) any Lender pursuant to clause (i) of the preceding sentence or (y) a notice
from Lenders constituting Requisite Lenders pursuant to clause (ii) of the preceding sentence, then (1) the obligation of the Lenders (or, in the case of any notice pursuant to clause (i) of the preceding sentence, such Lender) to
make Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn by each Affected Lender, (2) to the extent such determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Borrower pursuant to a Funding Notice or a Conversion/Continuation Notice, Lenders (or in the case of any notice pursuant to clause (i) of the preceding sentence, such Lender) shall make such Loan as (or continue such Loan as
or convert such Loan to, as the case may be) a Base Rate Loan, (3) the Lenders (or in the case of any notice pursuant to clause (i) of the preceding sentence, such Lenders) obligations to maintain their respective outstanding
Eurodollar Rate Loans (the Affected Loans), shall be terminated at the earlier to occur of the expiration of the Interest Period then in effect with respect to the Affected Loans or when required by law, and (4) the Affected
Loans shall automatically convert into Base Rate Loans on the date of such termination. Notwithstanding anything herein to the contrary, to the extent a determination by an Affected Lender as described above relates to a Eurodollar Rate Loan then
being requested by Borrower pursuant to a Funding Notice or a Conversion/Continuation Notice, Borrower shall have the option, subject to the provisions of Section 2.18(c), to rescind such Funding Notice or Conversion/Continuation Notice as to
all Lenders by giving written or telephonic notice (promptly confirmed by delivery of written notice thereof) to Administrative Agent of such rescission on the date on which the Affected Lender gives notice of its determination as described above
(which notice of rescission Administrative Agent shall promptly transmit to each other Lender).
(c) Compensation for Breakage or Non-Commencement of Interest Periods. Borrower shall
compensate each Lender, as promptly as practicable after written request by such Lender (which request shall set forth the basis for requesting such amounts and shall be conclusive absent manifest error), for all reasonable losses, expenses and
liabilities (including any interest paid or calculated to be due and payable by such Lender to lenders of
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funds borrowed by it to make or carry its Eurodollar Rate Loans and any loss, expense or liability sustained by such Lender in connection with the liquidation or deployment of such funds but
excluding loss of anticipated profits) which such Lender may sustain: (i) if for any reason (other than a default by such Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date specified therefor in a Funding Notice or a
telephonic request for borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does not occur on a date specified therefor in a Conversion/Continuation Notice or a telephonic request for conversion or continuation; (ii) if any
prepayment or other principal payment of, or any conversion of, any of its Eurodollar Rate Loans occurs on a date prior to the last day of an Interest Period applicable to that Loan; or (iii) if any prepayment of any of its Eurodollar Rate
Loans is not made on any date specified in a notice of prepayment given by Borrower.
(d) Booking of Eurodollar Rate Loans. Any Lender may make, carry or transfer Eurodollar
Rate Loans at, to, or for the account of any of its branch offices or the office of an Affiliate of such Lender.
(e) Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation of all amounts
payable to a Lender under this Section 2.18 and under Section 2.19 shall be made as though such Lender had actually funded each of its relevant Eurodollar Rate Loans a matching deposit or other borrowing in the offshore interbank market
for such currency for a comparable amount and for a comparable period through the transfer of such matching deposit or other borrowing from an offshore office of such Lender to a domestic office of such Lender in the United States of America;
provided, however, each Lender may fund each of its Eurodollar Rate Loans in any manner it sees fit and the foregoing assumptions shall be utilized only for the purposes of calculating amounts payable under this Section 2.18 and
under Section 2.19.
2.19 Increased Costs; Capital Adequacy.
(a) Compensation for Increased Costs and Taxes. In the event that any Lender (which term
shall include Issuing Bank for purposes of this Section 2.19(a)) shall reasonably determine (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto) that any Applicable Law, or any change
therein or in the interpretation, administration or application thereof (including the introduction of any new Applicable Law), or any determination of any Governmental Authority, in each case that becomes effective after the date hereof, or
compliance by such Lender with any guideline, request or directive issued or made after the date hereof by any Governmental Authority (whether or not having the force of law): (i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Excluded Taxes (including any change in the rate of Excluded Taxes), Indemnified Taxes or Other Taxes indemnified under Section 2.20) with respect to this Agreement or any of the other Credit Documents or any of
its obligations hereunder or thereunder or any payments to such Lender (or its applicable lending office) of principal, interest, fees or any other amount payable hereunder; (ii) imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve), special deposit, compulsory loan, FDIC insurance or similar requirement against assets held by, or deposits or other liabilities in or for the account of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of such Lender (other than any such reserve or other requirements with respect to Eurodollar Rate Loans that are reflected in the definition of Adjusted Eurodollar
Rate); or (iii) imposes any other condition, cost or expense (other than with respect to a Tax matter) on or affecting such Lender (or its applicable lending office) or its obligations hereunder or the London interbank market and the
result of any of the foregoing is to increase the cost to such Lender of agreeing to make, making or maintaining Loans hereunder or to reduce any amount received or receivable by such Lender (or its applicable lending office) with respect thereto;
provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and
(y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each
case pursuant to Basel III, shall in each case be deemed a change of law, regardless of the date enacted, adopted or issued; then, in any such case, Borrower shall pay to such Lender, as promptly as practicable after receipt of the statement
referred to in the next sentence, such additional amount or amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its sole discretion shall determine) as may be necessary to
compensate such Lender for any such increased cost or reduction in amounts received or receivable hereunder. Such Lender shall deliver to Borrower (with a copy to Administrative Agent) a written statement, setting forth in reasonable detail the
basis for calculating the additional amounts owed to such Lender under this Section 2.19(a), which statement shall be conclusive and binding upon all parties hereto absent manifest error.
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(b) Capital Adequacy Adjustment. In the
event that any Lender (which term shall include Issuing Bank for purposes of this Section 2.19(b)) shall have reasonably determined that the adoption, effectiveness, phase in or applicability after the Third Restatement Date of any Applicable
Law regarding capital or liquidity adequacy, reserve requirements or similar requirements, or any change therein or in the interpretation, application or administration thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender (or its applicable lending office) with any Applicable Law regarding capital or liquidity adequacy, reserve requirements or similar requirements (whether or not having
the force of law) of any such Governmental Authority, has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of, or with reference to, such Lenders
Loans or Revolving Commitments or Letters of Credit, or participations therein or other obligations hereunder with respect to the Loans or the Letters of Credit to a level below that which such Lender or such controlling corporation could have
achieved but for such adoption, effectiveness, phase in, applicability, change or compliance (taking into consideration the policies of such Lender or such controlling corporation with regard to capital adequacy); provided that,
notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules,
guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall
in each case be deemed a change of law, regardless of the date enacted, adopted or issued, then from time to time, within five Business Days after receipt by Borrower from such Lender of the statement referred to in the next sentence, Borrower shall
pay to such Lender such additional amount or amounts as will compensate such Lender or such controlling corporation on an after tax basis for such reduction. Such Lender shall deliver to Borrower (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to Lender under this Section 2.19(b), which statement shall be conclusive and binding upon all parties hereto absent manifest error.
2.20 Taxes; Withholding, etc.
(a) Payments to Be Free and Clear. All sums payable by or on behalf of any Credit Party
hereunder and under the other Credit Documents shall (except to the extent required by law) be paid free and clear of, and without any deduction or withholding on account of, any Tax.
(b) Withholding of Taxes. If any Credit Party or any other applicable withholding agent
is required by law to make any deduction or withholding on account of any Indemnified Taxes or Other Taxes from any sum paid or payable by any Credit Party to any Agent or any Lender (which term shall include each Swing Line Lender and Issuing Bank
for purposes of this Section 2.20) under any of the Credit Documents: (i) Borrower shall notify Administrative Agent of any such requirement or any change in any such requirement as soon as Borrower becomes aware of it; (ii) the
applicable withholding agent shall make such deduction or withholding and pay such Indemnified Taxes or Other Taxes before the date on which penalties attach thereto, such payment to be made (if the liability to pay is imposed on any Credit Party)
for its own account or (if that liability is imposed on Administrative Agent or such Lender, as the case may be) on behalf of and in the name of Administrative Agent or such Lender; (iii) the sum payable by the Credit Party in respect of which
the relevant deduction, withholding or payment is required shall be increased to the extent necessary to ensure that, after the making of that deduction, withholding or payment (including any deduction, withholding or payment applicable to
additional amounts payable under this Section 2.20), Administrative Agent or such Lender, as the case may be, receives on the due date a net sum equal to what it would have received had no such deduction, withholding or payment been required or
made; and (iv) within thirty days after paying any sum from which it is required by law to make any deduction or withholding, and within thirty days after the due date of payment of any Indemnified Taxes or Other Taxes which it is required by
clause (ii) above to pay, Borrower (if Borrower is the withholding agent) shall deliver to Administrative Agent evidence reasonably satisfactory to the other affected parties of such deduction, withholding or payment and of the remittance
thereof to the relevant taxing or other authority.
(c) Borrower agrees to indemnify each
Agent and each Lender for (i) the full amount of Indemnified Taxes and Other Taxes (including any Indemnified Taxes or Other Taxes attributable to any amounts payable under this Section 2.20) payable by such Agent or such Lender (whether
or not such Taxes are correctly or legally imposed) and (ii) any reasonable expenses arising therefrom or with respect thereto. A certificate from the relevant Lender or Agent, setting forth in reasonable detail the basis and calculation of
such Taxes shall be conclusive, absent manifest error.
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(d) Evidence of Exemption from Withholding
Tax. Each Lender shall, at such times as are reasonably requested by Borrower or the Administrative Agent, provide Borrower and the Administrative Agent with any documentation prescribed by law or reasonably requested by Borrower or
Administrative Agent certifying as to any entitlement of such Lender to an exemption from, or reduction in, withholding tax with respect to any payments to be made to such Lender under the Credit Documents. Each Lender shall, whenever a lapse in
time or change in such Lenders circumstances renders such documentation obsolete, expired or inaccurate in any material respect, deliver promptly to Borrower and the Administrative Agent updated or other appropriate documentation (including
any new documentation reasonably requested by the applicable withholding agent) or promptly notify Borrower and the Administrative Agent of its inability to do so.
Notwithstanding anything to the contrary, a Lender shall be required to provide any documentation under this Section 2.20(d) only to the
extent it is legally eligible to do so.
(e) Payment of Taxes. In addition, Borrower
agrees to pay any present or future stamp, court or documentary, intangible, recording, filing or similar Taxes imposed by any Governmental Authority, which arise from any payment made under any Credit Document or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect to, any Credit Document (Other Taxes).
(f) Treatment of Certain Refunds. If any party determines, in its sole discretion
exercised in good faith, that it has received a refund of any Taxes (whether received in cash or applied by the taxing authority granting the refund to offset another Taxes otherwise owed) as to which it has been indemnified pursuant to this
Section 2.20 (including additional amounts paid pursuant to this Section 2.20), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the
Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such
indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid to such indemnified party pursuant to the previous sentence (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) in the event such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 2.20(f), in no event will any indemnified party be
required to pay any amount to any indemnifying party pursuant to this Section 2.20(f) if such payment would place such indemnified party in a less favorable position (on a net after-Tax basis) than such indemnified party would have been in if
the indemnification payments or additional amounts giving rise to such refund had never been paid. This Section 2.20(f) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating
to its Taxes which it deems confidential) to the indemnifying party or any other Person.
(g) Minimum Interest. As part of entering into this Agreement, the parties hereto have
assumed that the interest payable at the rates set forth in this Agreement is not and will not become subject to Swiss Federal Withholding Tax. Notwithstanding the foregoing, the parties hereto agree that in the event that (A) Swiss Federal
Withholding Tax is due on interest payments or other payments by any Credit Party under this Agreement and (B) Section 2.20(b) (Withholding of Taxes) is unenforceable for any reason:
(x) the applicable interest rate in relation to that interest payment shall be
(i) the interest rate which would have applied to that interest payment as provided for in Section 2.8 divided by (ii) 1 minus the rate at which the relevant Swiss Federal Withholding Tax deduction is required to be made under Swiss
domestic tax law and / or applicable double taxation treaties (where the rate at which the relevant Swiss Federal Withholding Tax deduction is required to be made is for this purpose expressed as a fraction of 1); and
(y) the Credit Party shall (i) pay the relevant interest at the adjusted
rate in accordance with paragraph (x) above, (ii) make the Swiss Federal Withholding Tax deduction on the interest so recalculated and (iii) all references to a rate of interest under the Agreement shall be construed accordingly.
To the extent that interest payable by any Credit Party under this Agreement becomes subject to Swiss Federal Withholding Tax, the parties
shall promptly co-operate in completing any procedural formalities (including
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submitting forms and documents required by the Swiss or foreign tax authorities) to the extent possible and necessary for the Credit Party to obtain the tax ruling from the Swiss Federal Tax
Administration.
Section 2.20(f) equally applies to this Section 2.20(g).
2.21 Obligation to Mitigate. Each Lender (which term shall include Issuing Bank for purposes of this
Section 2.21) agrees that, as promptly as practicable after the officer of such Lender responsible for administering its Loans or Letters of Credit, as the case may be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle such Lender to receive payments under Section 2.18, 2.19 or 2.20, it will, to the extent not inconsistent with the internal policies of such Lender and any
applicable legal or regulatory restrictions, use reasonable efforts to (a) make, issue, fund or maintain its Credit Extensions, including any Affected Loans, through another office of such Lender, or (b) take such other measures as such
Lender may deem reasonable, if as a result thereof the circumstances which would cause such Lender to be an Affected Lender would cease to exist or the additional amounts which would otherwise be required to be paid to such Lender pursuant to
Section 2.18, 2.19 or 2.20 would be materially reduced and if, as determined by such Lender in its sole discretion, the making, issuing, funding or maintaining of such Revolving Commitments, Loans or Letters of Credit through such other office
or in accordance with such other measures, as the case may be, would not otherwise adversely affect such Revolving Commitments, Loans or Letters of Credit or the interests of such Lender; provided, such Lender will not be obligated to utilize
such other office or take such other measures pursuant to this Section 2.21 unless Borrower agrees to pay all reasonable incremental expenses incurred by such Lender as a result of utilizing such other office or take such other measures as
described above. A certificate as to the amount of any such expenses payable by Borrower pursuant to this Section 2.21 (setting forth in reasonable detail the basis for requesting such amount) submitted by such Lender to Borrower (with a copy
to Administrative Agent) shall be conclusive absent manifest error.
2.22 Defaulting Lenders.
Anything contained herein to the contrary notwithstanding, in the event that any Lender becomes a Defaulting Lender, then during any Default Period with respect to such Defaulting Lender, such Defaulting Lender shall be deemed not to be a
Lender for purposes of any amendment, waiver or consent with respect to any provision of the Credit Documents that requires the approval of Requisite Lenders, and Borrower shall pay to Administrative Agent such additional amounts of cash
as reasonably requested by the Issuing Bank or the Swing Line Lender to be held as security for Borrowers reimbursement Obligations in respect of Letters of Credit and Swing Line Loans then outstanding (such amount not to exceed such
Defaulting Lenders obligations under Sections 2.3 and 2.4). During any Default Period with respect to a Funds Defaulting Lender that is not also an Insolvency Defaulting Lender, (a) any amounts that would otherwise be payable to such
Funds Defaulting Lender with respect to its Revolving Loans and Revolving Commitments under the Credit Documents (including, without limitation, voluntary and mandatory prepayments and fees) shall, in lieu of being distributed to such Funds
Defaulting Lender, be retained by Administrative Agent and applied in the following order of priority: first, to the payment of any amounts owing by such Funds Defaulting Lender to Administrative Agent, second, to the payment of any
amounts owing by such Funds Defaulting Lender to the Swing Line Lender, third, to the payment of any amounts owing by such Funds Defaulting Lender to the Issuing Bank, and fourth, to the payment of the Revolving Loans of other Lenders
(but not to the Revolving Loans of such Funds Defaulting Lender) as if such Funds Defaulting Lender had funded all Defaulted Loans of such Funds Defaulting Lender; and (b) the Total Utilization of Revolving Commitments as at any date of
determination shall be calculated as if such Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender. During any Default Period with respect to an Insolvency Defaulting Lender, any amounts that would otherwise be payable to such
Insolvency Defaulting Lender under the Credit Documents (including, without limitation, voluntary and mandatory prepayments and fees including fees payable under Section 2.11) may, in lieu of being distributed to such Insolvency Defaulting
Lender, be retained by Administrative Agent to collateralize indemnification and reimbursement obligations of such Insolvency Defaulting Lender in an amount reasonably determined by Administrative Agent. No Revolving Commitment of any Lender shall
be increased or otherwise affected, and, except as otherwise expressly provided in this Section 2.22, performance by Borrower of its obligations hereunder and the other Credit Documents shall not be excused or otherwise modified as a result of
any Lender becoming a Defaulting Lender or the operation of this Section 2.22. The rights and remedies against a Defaulting Lender under this Section 2.22 are in addition to other rights and remedies which Borrower may have against such
Defaulting Lender as a result of it becoming a Defaulting Lender and which Administrative Agent or any Lender may have against such Defaulting Lender with respect thereto. If any Letter of Credit Usage exists at the time such Lender becomes a
Defaulting Lender then all or any part of such Letter of Credit Usage shall be reallocated among the
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non-Defaulting Lenders in accordance with their respective Pro Rata Share but only to the extent (x) the sum of each non-Defaulting Lenders Revolving Exposures plus such Defaulting
Lenders Letter of Credit Usage does not exceed the total of such non-Defaulting Lenders Revolving Commitments and (y) no Default or Event of Default exists or shall have occurred.
2.23 Removal or Replacement of a Lender. Anything contained herein to the contrary notwithstanding,
in the event that: (a) (i) any Lender (an Increased Cost Lender) shall give notice to Borrower that such Lender is an Affected Lender or that such Lender is entitled to receive payments under Section 2.18, 2.19 or
2.20, (ii) the circumstances which have caused such Lender to be an Affected Lender or which entitle such Lender to receive such payments shall remain in effect, and (iii) such Lender shall fail to withdraw such notice within five Business
Days after Borrowers request for such withdrawal; or (b) (i) any Lender shall become a Defaulting Lender, (ii) the Default Period for such Defaulting Lender shall remain in effect, and (iii) such Defaulting Lender shall
fail to cure the default as a result of which it has become a Defaulting Lender within five Business Days after Borrowers request that it cure such default; or (c) in connection with any proposed amendment, modification, termination,
waiver or consent with respect to any of the provisions hereof as contemplated by Section 10.5(b), the consent of Requisite Lenders shall have been obtained but the consent of one or more of such other Lenders (each a Non-Consenting
Lender) whose consent is required shall not have been obtained; then, with respect to each such Increased Cost Lender, Defaulting Lender or Non-Consenting Lender (the Terminated Lender), Borrower may, by giving written
notice to Administrative Agent and any Terminated Lender of its election to do so, elect to cause such Terminated Lender (and such Terminated Lender hereby irrevocably agrees) to assign its outstanding Loans and its Revolving Commitments, if any, in
full to one or more Eligible Assignees (each a Replacement Lender) in accordance with the provisions of Section 10.6 and Borrower shall pay the fees, if any, payable thereunder in connection with any such assignment from an
Increased Cost Lender, a Non-Consenting Lender or Insolvency Defaulting Lender, and the Funds Defaulting Lender (if not also an Insolvency Defaulting Lender) shall pay the fees, if any, payable thereunder in connection with any such assignment from
such Defaulting Lender; provided, (1) on the date of such assignment, the Replacement Lender shall pay to Terminated Lender an amount equal to the sum of (A) an amount equal to the principal of, and all accrued interest on, all
outstanding Loans of the Terminated Lender, (B) an amount equal to all unreimbursed drawings that have been funded by such Terminated Lender, together with all then unpaid interest with respect thereto at such time and (C) an amount equal
to all accrued, but theretofore unpaid fees owing to such Terminated Lender pursuant to Section 2.11; (2) on the date of such assignment, Borrower shall pay any amounts payable to such Terminated Lender pursuant to Section 2.18(c),
2.19 or 2.20; or otherwise as if it were a prepayment; (3) in the case of any assignment resulting from a claim for compensation under Section 2.19 or payments required to be made under Section 2.20, such assignment will result in a
reduction in such compensation or payment and (4) in the event such Terminated Lender is a Non-Consenting Lender, each Replacement Lender shall consent, at the time of such assignment, to each matter in respect of which such Terminated Lender
was a Non-Consenting Lender; provided that Borrower may not make such election with respect to any Terminated Lender that is also an Issuing Bank unless, prior to the effectiveness of such election, Borrower shall have caused each outstanding
Letter of Credit issued thereby to be cancelled. Upon the prepayment of all amounts owing to any Terminated Lender and the termination of such Terminated Lenders Revolving Commitments, if any, such Terminated Lender shall no longer constitute
a Lender for purposes hereof; provided that any rights of such Terminated Lender to indemnification hereunder shall survive as to such Terminated Lender. Each Lender agrees that if Borrower exercises its option hereunder to cause
an assignment by such Lender as a Terminated Lender, such Lender shall, promptly after receipt of written notice of such election, execute and deliver all documentation necessary to effectuate such assignment in accordance with Section 10.6. In
the event that a Terminated Lender does not comply with the requirements of the immediately preceding sentence within one Business Day after receipt of such notice, each Lender hereby authorizes and directs the Administrative Agent to execute and
deliver such documentation as may be required to give effect to an assignment in accordance with Section 10.6 on behalf of such Terminated Lender and any such documentation so executed by the Administrative Agent shall be effective for purposes
of documenting an assignment pursuant to Section 10.6.
2.24 Interest Act (Canada). For
purposes of disclosure pursuant to the Interest Act (Canada), the annual rates of interest or fees to which the rates of interest or fees provided for in this Agreement and the other Credit Documents (and stated herein or therein, as applicable, to
be computed on the basis of a 360 day year or any other period of time less than a calendar year) are equivalent are the rates so provided for multiplied by the actual number of days in the applicable calendar year and divided by 360 or the actual
number of days in such other period of time, respectively.
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2.25 Incremental Facilities. Borrower may by written
notice to Administrative Agent elect to request (A) prior to the Revolving Commitment Termination Date, an increase to the existing Revolving Loan Commitments (any such increase, the New Revolving Loan Commitments) and/or
(B) the establishment of one or more new term loan commitments (the New Term Loan Commitments), by an amount such that Borrower and its Subsidiaries shall be in compliance, on a Pro Forma Basis after giving effect to such New
Term Loans or New Revolving Loan Commitments and the application of the proceeds thereof, with a Secured Leverage Ratio of 2.50 to 1.00; provided, that any New Revolving Loan Commitment or New Term Loan Commitment shall not be less
than $25,000,000 individually (or such lesser amount which shall be approved by Administrative Agent or such lesser amount that represents all remaining availability under any limit set forth above in this Section 2.25), and integral
multiples of $10,000,000 in excess of that amount. Each such notice shall specify (A) the date (each, an Increased Amount Date) on which Borrower proposes that the New Revolving Loan Commitments or New Term Loan Commitments
shall be effective and (B) the identity of each Lender or other Person that is an Eligible Assignee; provided that, Issuing Bank shall have consented (such consent not to be unreasonably withheld or delayed) to the allocation of New
Revolving Loan Commitments to any Eligible Assignee under clause (ii) of the definition thereof (each, a New Revolving Loan Lender or New Term Loan Lender, as applicable) to whom Borrower proposes any
portion of such New Revolving Loan Commitments or New Term Loan Commitments, as applicable, be allocated and the amounts of such allocations; provided that Barclays may elect or decline to arrange such New Revolving Loan Commitments or New
Term Loan Commitments, as applicable, in its sole discretion and any Lender approached to provide all or a portion of the New Revolving Loan Commitments or New Term Loan Commitments may elect or decline, in its sole discretion, to provide a New
Revolving Loan Commitments or New Term Loan Commitment.
Such New Revolving Loan Commitments or New Term Loan Commitments shall become
effective, as of such Increased Amount Date; provided that (1) no Default or Event of Default shall exist on such Increased Amount Date before or after giving effect to such New Revolving Loan Commitments or New Term Loan Commitments;
(2) both before and after giving effect to the making of any Series of New Term Loans, each of the conditions set forth in Section 3.3(a) shall be satisfied; provided that, solely with respect to the effectiveness of New Term Loans
incurred and/or New Revolving Loan Commitments established to finance the Medicis Acquisition, the Bausch & Lomb Acquisition or any Permitted Acquisition consummated after the Amendment No. 5 Effective Date, the Borrower shall not be
required to satisfy the conditions set forth in clause (iii) or (iv) of such Section 3.3(a); (3) Borrower and its Subsidiaries shall be in compliance, on a Pro Forma Basis after giving effect to such New Term Loans and the
application of the proceeds thereof, with each of the covenants set forth in Section 6.7 as of the last day of the most recently ended Fiscal Quarter after giving effect to such New Revolving Loan Commitments or New Term Loan Commitments;
(4) the New Revolving Loan Commitments or New Term Loan Commitments, as applicable, shall be effected pursuant to one or more Joinder Agreements executed and delivered by the applicable New Revolving Loan Lender or New Term Loan Lender, as the
case may be, Borrower and Administrative Agent (it being understood that the only representations and warranties that shall be certified in the Joinder Agreement with respect to New Term Loans incurred and/or New Revolving Loan Commitments
established to finance the Medicis Acquisition, the Bausch & Lomb Acquisition or any Permitted Acquisition consummated after the Amendment No. 5 Effective Date shall be those representations and warranties set forth in the seventh
paragraph of this Section 2.25), and each of which shall be recorded in the Register and shall be subject to the requirements set forth in Section 2.20(d); (5) Borrower shall make any payments required pursuant to Section 2.18(c)
in connection with the New Revolving Loan Commitments or New Term Loan Commitments, as applicable; (6) Borrower shall deliver or cause to be delivered any legal opinions or other documents reasonably requested by Administrative Agent in
connection with any such transaction; and (7) in the case of any New Revolving Loan Commitments or New Term Loan Commitments effected on an Increased Amount Date from and after April 1, 2016, Borrower and its Subsidiaries shall be in
compliance, on a Pro Forma Basis, with a Leverage Ratio as of the Increased Amount Date (assuming in the case of any New Revolving Commitments, that the full amount of all outstanding Revolving Commitments, including New Revolving Commitments, are
borrowed on such date), of 5.25 to 1.00; provided, further, that, (x) the effectiveness of New Term Loans incurred to finance the Medicis Acquisition or the Bausch & Lomb Acquisition shall not be subject to
Borrowers compliance with clauses (1), (3) or (7) of the foregoing proviso and (y) the effectiveness of New Term Loans incurred and/or New Revolving Loan Commitments established to finance any Permitted Acquisition consummated
after the Amendment No. 10 Effective Date shall not be subject to compliance with clauses (1), (3) and (7) of the foregoing proviso.
On any Increased Amount Date on which New Revolving Loan Commitments are effected, subject to the satisfaction of the foregoing terms and
conditions, (a) each of the Revolving Lenders shall assign to each of the New Revolving Loan Lenders, and each of the New Revolving Loan Lenders shall purchase from each of the Revolving
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Loan Lenders, at the principal amount thereof (together with accrued interest), such interests in the Revolving Loans outstanding on such Increased Amount Date as shall be necessary in order
that, after giving effect to all such assignments and purchases, such Revolving Loans will be held by existing Revolving Loan Lenders and New Revolving Loan Lenders ratably in accordance with their Revolving Loan Commitments after giving effect to
the addition of such New Revolving Loan Commitments to the Revolving Loan Commitments, (b) each New Revolving Loan Commitment shall be deemed for all purposes a Revolving Loan Commitment and each Loan made thereunder (a New Revolving
Loan) shall be deemed, for all purposes, a Revolving Loan and (c) each New Revolving Loan Lender shall become a Lender with respect to the New Revolving Loan Commitment and all matters relating thereto.
On any Increased Amount Date on which any New Term Loan Commitments of any Series are effective, subject to the satisfaction of the foregoing
terms and conditions, (i) each New Term Loan Lender of any Series shall make a Loan to Borrower (a New Term Loan) in an amount equal to its New Term Loan Commitment of such Series (unless the Joinder Agreement with respect to
any Series of New Term Loans shall provide for the making of such Series of New Term Loans on a date subsequent to the applicable Increased Amount Date), and (ii) each New Term Loan Lender of any Series shall become a Lender hereunder with
respect to the New Term Loan Commitment of such Series and the New Term Loans of such Series made pursuant thereto.
Administrative Agent
shall notify Lenders promptly upon receipt of Borrowers notice of each Increased Amount Date and in respect thereof (x) the New Revolving Loan Commitments and the New Revolving Loan Lenders or the Series of New Term Loan Commitments and
the New Term Loan Lenders of such Series, as applicable, and (y) in the case of each notice to any Revolving Loan Lender, the respective interests in such Revolving Loan Lenders Revolving Loans, in each case subject to the assignments
contemplated by this Section.
The terms and provisions of the Tranche A New Term Loans of any Series shall be, except with respect to
pricing, amortization and maturity and except as otherwise set forth herein or in the Joinder Agreement and otherwise reasonably satisfactory to Administrative Agent, identical to the Tranche A Term Loans. The terms and provisions of the Tranche B
New Term Loans of any Series shall be, except with respect to pricing, amortization and maturity and except as otherwise set forth herein or in the Joinder Agreement and otherwise reasonably satisfactory to Administrative Agent, identical to the
Tranche B Term Loans. The terms and provisions of the New Revolving Loans shall be, except with respect to maturity, identical to the Revolving Loans. In any event (i) the weighted average life to maturity of all New Term Loans of any Series
shall be no shorter than the then-remaining weighted average life to maturity of the Tranche B Term Loans (other than with respect to a Tranche A New Term Loan, which shall have a weighted average life to maturity not shorter than the remaining
weighted average life to maturity of the Tranche A Term Loans), (ii) the applicable New Term Loan Maturity Date of each Series shall be no shorter than the latest of the final maturity of the Tranche B Term Loans (other than with respect to a
Tranche A New Term Loan, which shall have a maturity date not earlier than the Tranche A Term Loan Maturity Date), and (iii) the yield applicable to the New Term Loans of each Series shall be determined by Borrower and the applicable new
Lenders and shall be set forth in each applicable Joinder Agreement; provided however (A) that the yield applicable to the Tranche A New Term Loans (after giving effect to all upfront or similar fees or original issue discount
payable with respect to such Tranche A New Term Loans) shall not be greater than the applicable yield payable pursuant to the terms of this Agreement as amended through the date of such calculation with respect to Tranche A Term Loans (including any
upfront or similar fees or original issue discount paid and payable to the initial Lenders hereunder) plus 0.50% per annum unless the interest rate with respect to the Tranche A Term Loan is increased so as to cause the then applicable
yield under this Agreement on the Tranche A Term Loans (including any upfront or similar fees or original issue discount paid and payable to the initial Lenders hereunder) to equal the yield then applicable to the Tranche A New Term Loans (after
giving effect to all upfront or similar fees or original issue discount payable with respect to such Tranche A New Term Loans) minus 0.50% per annum and (B) that the yield applicable to the Tranche B New Term Loans (after giving
effect to all upfront or similar fees or original issue discount payable with respect to such Tranche B New Term Loans) shall not be greater than the applicable yield payable pursuant to the terms of this Agreement as amended through the date of
such calculation with respect to Tranche B Term Loans (including any upfront or similar fees or original issue discount paid and payable to the initial Lenders hereunder) plus 0.50% per annum unless the interest rate with respect to the
Tranche B Term Loan is increased so as to cause the then applicable yield under this Agreement on the Tranche B Term Loans (including any upfront or similar fees or original issue discount paid and payable to the initial Lenders hereunder) to equal
the yield then applicable to the Tranche B New Term Loans (after giving effect to all upfront or similar fees or original issue discount payable with respect to such Tranche B New Term Loans) minus 0.50% per annum. For purposes of clause
(iii) of the immediately preceding sentence, upfront or similar fees and original issue discount will
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be equated to interest rates based upon an assumed four-year average life. Each Joinder Agreement may, without the consent of any other Lenders, effect such amendments to this Agreement and the
other Credit Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.25.
Except as expressly set forth in this Section 2.25, New Term Loans incurred and/or New Revolving Loan Commitments established to finance
the Medicis Acquisition, the Bausch & Lomb Acquisition or any Permitted Acquisition after the Amendment No. 5 Effective Date shall be entered into in accordance with this Section 2.25 and shall be subject to the terms and
conditions hereof; provided that as of the date of establishment of such New Term Loans incurred to finance the Medicis Acquisition or the Bausch & Lomb Acquisition, Borrower shall not be required to comply with the Secured Leverage
Ratio set forth in the first paragraph of this Section 2.25; provided that, as of such date, the representations and warranties set forth in Section 4.1(a) (solely with respect to due organization) 4.1(b) (solely with respect to the
Joinder Agreement to be entered into with respect to such New Term Loans and/or New Revolving Loan Commitments, as applicable), 4.3 (solely with respect to the Joinder Agreement to be entered into with respect to such New Term Loans and/or New
Revolving Loan Commitments, as applicable), 4.4(a)(ii) (solely with respect to the Joinder Agreement to be entered into with respect to such New Term Loans and/or New Revolving Loan Commitments, as applicable), 4.6 (solely with respect to the
Joinder Agreement to be entered into with respect to such New Term Loans and/or New Revolving Loan Commitments, as applicable), 4.15 (solely with respect to regulation under the Investment Company Act of 1940), 4.16 (solely with respect to the
Joinder Agreement to be entered into with respect to such New Term Loans and/or New Revolving Loan Commitments, as applicable) and 4.23 (solely with respect to the PATRIOT Act), in each case, shall be true and correct in all material respects on and
as of such date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date; provided that, in each case, such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in
the text thereof.
2.26 Extensions of Loans and Commitments.
(a) The Borrower may, at any time request that all or a portion of the Term Loans of any Class
(an Existing Term Loan Tranche) be modified to constitute another Class of Term Loans in order to extend the scheduled final maturity date thereof (any such Term Loans which have been so modified, Extended Term
Loans) and to provide for other terms consistent with this Section 2.26. In order to establish any Extended Term Loans, the Borrower shall provide a notice to the Administrative Agent (who shall provide a copy of such notice to each
of the Lenders of the applicable Existing Term Loan Tranche) (a Term Loan Extension Request) setting forth the proposed terms of the Extended Term Loans to be established, which terms shall be identical to those applicable to the
Term Loans of the Existing Term Loan Tranche from which they are to be modified except (i) the scheduled final maturity date shall be extended to the date set forth in the applicable Extension Amendment and the amortization shall be as set
forth in the Extension Amendment, (ii) (A) the Applicable Margin with respect to the Extended Term Loans may be higher or lower than the Applicable Margin for the Term Loans of such Existing Term Loan Tranche and/or (B) additional
fees (including prepayment or termination premiums) may be payable to the Lenders providing such Extended Term Loans in addition to or in lieu of any increased Applicable Margin contemplated by the preceding clause (A), in each case, to the extent
provided in the applicable Extension Amendment, (iii) any Extended Term Loans may participate on a pro rata basis or a less than pro rata basis (but not greater than a pro rata basis) in any voluntary or mandatory
prepayments or prepayment of Term Loans hereunder in each case as specified in the respective Term Loan Extension Request, (iv) the final maturity date and the scheduled amortization applicable to the Extended Term Loans shall be set forth in
the applicable Extension Amendment and the scheduled amortization of such Existing Term Loan Tranche shall be adjusted to reflect the amortization schedule (including the principal amounts payable pursuant thereto) in respect of the Term Loans under
such Existing Term Loan Tranche that have been extended as Extended Term Loans as set forth in the applicable Extension Amendment; provided, however, that the weighted average life to maturity of such Extended Term Loans shall be no
shorter than the weighted average life to maturity of the Term Loans of such Existing Term Loan Tranche and (v) the covenants set forth in Section 6.7 may be modified in a manner acceptable to the Borrower, the Administrative Agent and the
Lenders party to the applicable Extension Amendment, such modifications to become effective only after the latest maturity date of the then outstanding Term Loans in effect immediately prior to giving effect to such Extension Amendment (it being
understood that each Lender providing Extended Term Loans, by executing an Extension Amendment, agrees to be bound by such provisions and waives any inconsistent provisions set forth in Section 2.5(a), 2.17 or 10.5). Except as
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provided above, each Lender holding Extended Term Loans shall be entitled to all the benefits afforded by this Agreement (including, without limitation, the provisions set forth in
Section 2.15(a) and 2.15(b) applicable to Term Loans) and the other Credit Documents, and shall, without limiting the foregoing, benefit equally and ratably from the Guarantees and security interests created by the Collateral Documents. The
Credit Parties shall take any actions reasonably required by Administrative Agent to ensure and/or demonstrate that the Lien and security interests granted by the Collateral Documents continue to secure all the Obligations and continue to be
perfected under the UCC or otherwise after giving effect to the extension of any Term Loans, including, without limitation, the procurement of title insurance endorsements reasonably requested by and satisfactory to the Administrative Agent. No
Lender shall have any obligation to agree to have any of its Term Loans of any Existing Term Loan Tranche modified to constitute Extended Term Loans pursuant to any Term Loan Extension Request. Any Extended Term Loans of any Extension Tranche shall
constitute a separate Class of Term Loans from the Existing Term Loan Tranche from which they were modified.
(b) The Borrower may, at any time request that all or a portion of the Revolving Commitments of
any Class (an Existing Revolving Tranche and any related Revolving Loans thereunder, Existing Revolving Loans) be modified to constitute another Class of Revolving Commitments in order to extend the termination
date thereof (any such Revolving Commitments which have been so modified, Extended Revolving Commitments and any related Revolving Loans, Extended Revolving Loans) and to provide for other terms consistent with
this Section 2.26. In order to establish any Extended Revolving Commitments, the Borrower shall provide a notice to the Administrative Agent (who shall provide a copy of such notice to each of the Lenders of the applicable Existing Revolving
Tranche) (a Revolving Extension Request) setting forth the proposed terms of the Extended Revolving Commitments to be established, which terms shall be identical to those applicable to the Revolving Commitments of the Existing
Revolving Tranche from which they are to be modified except (i) the scheduled termination date of the Extended Revolving Commitments and the related scheduled maturity date of the related Extended Revolving Loans shall be extended to the date
set forth in the applicable Extension Amendment, (ii) (A) the Applicable Margin with respect to the Extended Revolving Loans may be higher or lower than the Applicable Margin for the Revolving Loans of such Existing Revolving Tranche
and/or (B) additional fees may be payable to the Lenders providing such Extended Revolving Commitments in addition to or in lieu of any increased Applicable Margin contemplated by the preceding clause (A), in each case, to the extent provided
in the applicable Extension Amendment and (iii) the covenants set forth in Section 6.7 may be modified in a manner acceptable to the Borrower, the Administrative Agent and the Lenders party to the applicable Extension Amendment, such
modifications to become effective only after the latest maturity date of the then outstanding Revolving Loans and/or Revolving Commitments in effect immediately prior to giving effect to such Extension Amendment (it being understood that each Lender
providing Extended Revolving Commitments, by executing an Extension Amendment, agrees to be bound by such provisions and waives any inconsistent provisions set forth in Section 2.5(a), 2.17 or 10.5). Except as provided above, each Lender
holding Extended Revolving Commitments shall be entitled to all the benefits afforded by this Agreement (including, without limitation, the provisions set forth in Sections 2.15(a) and 2.15(b) applicable to existing Revolving Loans) and the other
Credit Documents, and shall, without limiting the foregoing, benefit equally and ratably from the Guarantees and security interests created by the Collateral Documents. The Credit Parties shall take any actions reasonably required by Administrative
Agent to ensure and/or demonstrate that the Lien and security interests granted by the Collateral Documents continue to secure all the Obligations and continue to be perfected under the UCC or otherwise after giving effect to the extension of any
Revolving Commitments, including, without limitation, the procurement of title insurance endorsements reasonably requested by and satisfactory to the Administrative Agent. No Lender shall have any obligation to agree to have any of its Revolving
Commitments of any Existing Revolving Tranche modified to constitute Extended Revolving Commitments pursuant to any Revolving Extension Request. Any Extended Revolving Commitments of any Extension Tranche shall constitute a separate Class of
Revolving Commitments from the Existing Revolving Tranche from which they were modified. If, on any Extension Date, any Revolving Loans of any Extending Lender are outstanding under the applicable Existing Revolving Tranche, such Revolving Loans
(and any related participations) shall be deemed to be allocated as Extended Revolving Loans (and related participations) and Existing Revolving Loans (and related participations) in the same proportion as such Extending Lenders Extended
Revolving Commitments bear to its remaining Revolving Commitments of the Existing Revolving Tranche. In addition, if so provided in the relevant Extension Amendment and with the consent of Issuing Bank, participations in Letters of Credit expiring
on or after the latest Revolving Commitment Termination Date then in effect shall be re-allocated from Lenders of the Existing Revolving Tranche to Lenders holding Extending Revolving Commitments in accordance with the terms of such Extension
Amendment; provided, however, that such participation interests shall, upon receipt thereof by the relevant Lenders holding Extending Revolving Commitments, be deemed to be
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participation interests in respect of such Extending Revolving Commitments and the terms of such participation interests (including, without limitation, the commission applicable thereto) shall
be adjusted accordingly.
(c) The Borrower shall provide the applicable Extension Request
at least five (5) Business Days prior to the date on which Lenders under the Existing Tranche are requested to respond (or such shorter period as is agreed to by Administrative Agent in its sole discretion). Any Lender (an Extending
Lender) wishing to have all or a portion of its Term Loans or Revolving Commitments of the Existing Tranche subject to such Extension Request modified to constitute Extended Term Loans or Extended Revolving Commitments, as applicable,
shall notify the Administrative Agent (an Extension Election) on or prior to the date specified in such Extension Request of the amount of its Term Loans or Revolving Commitments of the Existing Tranche that it has elected to
modify to constitute Extended Term Loans or Extended Revolving Commitments, as applicable. In the event that the aggregate amount of Term Loans or Revolving Commitments of the Existing Tranche subject to Extension Elections exceeds the amount of
Extended Term Loans or Extended Revolving Commitments, as applicable, requested pursuant to the Extension Request, Term Loans or Revolving Commitments subject to such Extension Elections shall be modified to constitute Extended Term Loans or
Extended Revolving Commitments, as applicable, on a pro rata basis based on the amount of Term Loans or Revolving Commitments included in such Extension Elections. The Borrower shall have the right to withdraw any Extension Request upon
written notice to the Administrative Agent in the event that the aggregate amount of Term Loans or Revolving Commitments of the Existing Tranche subject to such Extension Request is less than the amount of Extended Term Loans or Extended Revolving
Commitments, as applicable, requested pursuant to such Election Request.
(d) Extended
Term Loans or Extended Revolving Commitments, as applicable, shall be established pursuant to an amendment (an Extension Amendment) to this Agreement (in a form reasonably satisfactory to the Administrative Agent). Each Extension
Amendment shall be executed by the Borrower, the Administrative Agent and the Extending Lenders (it being understood that such Extension Amendment shall not require the consent of any Lender other than (A) the Extending Lenders with respect to
the Extended Term Loans or Extended Revolving Commitments, as applicable, established thereby, (B) with respect to any extension of the Revolving Commitments that results in an extension of Issuing Banks obligations with respect to
Letters of Credit, the consent of Issuing Bank and (C) with respect to any extension of the Revolving Commitments that results in an extension of the Swing Line Lenders obligations with respect to Swing Line Loans, the Swing Line Lender).
(e) In addition to any conditions precedent set forth in any applicable Extension
Amendment, no Extension Amendment shall be effective unless no Default or Event of Default shall have occurred and be continuing at the time of such extension or after giving effect thereto.
SECTION 3. |
CONDITIONS PRECEDENT |
3.1 Third
Restatement Date. The effectiveness of this Agreement and the obligation of each Lender to make a Tranche B Term Loan, a Revolving Loan, or to issue a Letter of Credit, in each case on the Third Restatement Date are subject to the prior or
concurrent satisfaction, or waiver in accordance with Section 10.5, of the following conditions:
(a) Credit Party Documents. Administrative Agent and Arrangers shall
have received sufficient copies of each Credit Document executed and delivered by each applicable Credit Party for each Lender.
(b) Organizational Documents; Incumbency. Administrative Agent and
Arrangers shall have received (i) a copy of each Organizational Document executed and delivered by each Credit Party, as applicable, and, to the extent applicable, certified as of a recent date by the appropriate governmental official, each
dated the Third Restatement Date or a recent date prior thereto (or a certificate of a Responsible Officer certifying that the Organizational Documents previously delivered to Administrative Agent and Arranger on or about the Second Restatement Date
or the Second Amendment and Restatement Joinder Date remain in full force and effect and unmodified as of the Third Restatement Date); (ii) signature and incumbency certificates of the officers of such Person executing the Credit Documents to
which it is a party; (iii) resolutions of the board of directors or similar governing body of each Credit Party approving and authorizing the execution, delivery and performance of this Agreement and the other Credit Documents to
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which it is a party or by which it or its assets may be bound as of the Third Restatement Date, including the Amendment Agreement, certified as of the Third Restatement Date by its secretary or
an assistant secretary as being in full force and effect without modification or amendment; (iv) a certificate of status, certificate of compliance or other certificate of good standing from the applicable Governmental Authority of each Credit
Partys jurisdiction of incorporation, organization, amalgamation or formation and in each jurisdiction in which it is qualified as a foreign corporation or other entity to do business, each dated a recent date prior to the Third Restatement
Date; and (v) such other documents, including, without limitation, current international SRL licenses for the applicable Barbados Credit Parties, a negative certificate from the Luxembourg Trade and Companies Register with respect to the
Luxembourg Guarantor, an excerpt from the Luxembourg Trade and Companies Register for the Luxembourg Guarantor and an excerpt from the applicable commercial register for the Swiss Guarantor as Administrative Agent and Arrangers may reasonably
request.
(c) [Intentionally Omitted].
(d) Personal Property Collateral. Each Credit Party shall have
delivered to Collateral Agent:
(i) evidence satisfactory to Collateral
Agent of the compliance by each Credit Party with their obligations under the Second Amended and Restated Pledge and Security Agreement, the Canadian Pledge and Security Agreement, the Quebec Security Documents, the Barbados Security Documents, the
Luxembourg Security Documents, the Swiss Security Documents and the other Collateral Documents (including their obligations to execute and deliver, file or register UCC and PPSA financing statements (or equivalent filings), as applicable, to deliver
originals of securities, instruments and chattel paper and any agreements governing deposit and/or securities accounts as provided therein);
(ii) a completed supplement to the Collateral Questionnaire dated on or prior
to the Third Restatement Date and executed by an Authorized Officer of each Additional Credit Party, together with all attachments contemplated thereby; and
(iii) the results of a recent bring down lien search, by a Person reasonably
satisfactory to the Collateral Agent, of all effective UCC and PPSA financing statements (or equivalent filings, including Quebec Register of Personal and Moveable Real Rights filings) made with respect to any Credit Party in each jurisdiction where
the Collateral Agent, acting reasonably, considers it to be necessary or desirable that such searches be conducted, together with copies of all such filings disclosed by such search and (B) UCC and PPSA financing change statements (or similar
documents) duly executed or authorized by all applicable Persons for filing in all applicable jurisdictions as may be necessary to terminate any effective UCC or PPSA financing statements (or equivalent filings) disclosed in such search (other than
any such financing statements in respect of Permitted Liens).
(e)
Opinions of Counsel to Credit Parties. Lenders and their respective counsel shall have received originally executed copies of the favorable written opinions of:
(i) Skadden, Arps, Slate, Meagher & Flom LLP, U.S.
counsel to Borrower;
(ii) Chancery Chambers, special Barbados
counsel to Borrower;
(iii) Norton Rose Canada LLP, special Canadian
counsel to Borrower;
(iv) Stewart McKelvey, special Nova Scotia counsel
to Borrower;
(v) Fillmore Riley LLP, special Manitoba counsel to
Borrower;
(vi) Clark Wilson LLP, special British Columbia counsel to
Borrower; and
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(vii) Baker & McKenzie,
special Luxembourg and Swiss counsel to Borrower.
in each case as to such matters as Administrative Agent may reasonably request, dated
as of the Third Restatement Date and otherwise in form and substance reasonably satisfactory to Administrative Agent and Arrangers (and each Credit Party hereby instructs such counsel to deliver such opinions to Agents and Lenders).
(f) Fees and Expenses. Borrower shall have paid to the Administrative
Agent all fees payable on the Third Restatement Date referred to in Section 2.11(c) and shall have reimbursed the Administrative Agent and the Arrangers for their out-of-pocket expenses, including the invoiced legal fees and expenses of Cahill
Gordon & Reindel LLP; Lex Caribbean; Osler, Hoskin & Harcourt LLP, Lenz & Staehelin and Elvinger, Hoss & Prussen and Mallesons Stephen Jaques.
(g) Solvency Certificate. On the Third Restatement Date, Administrative
Agent and Arrangers shall have received a Solvency Certificate dated the Third Restatement Date and addressed to Administrative Agent and Lenders, and in form, scope and substance satisfactory to Administrative Agent, certifying that Borrower and
its Subsidiaries that are Credit Parties are and will be Solvent on a consolidated basis.
(h) Third Restatement Date Certificate. Borrower shall have delivered
to Administrative Agent and Arrangers an originally executed Third Restatement Date Certificate.
(i) Title Insurance. Administrative Agent shall have received an
executed copy of an endorsement amending the name of the insured under the title insurance policy in respect of the real property secured by the Quebec Security Documents.
Each Lender, by delivering its signature page to this Agreement, shall be deemed to have acknowledged receipt of, and consented to and approved, each Credit
Document and each other document required to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the Third Restatement Date.
Notwithstanding anything to the contrary contained in this Agreement or the other Credit Documents, the parties hereto acknowledge and agree
that (i) the delivery of any document or instrument, and the taking of any action, set forth on Schedule 5.15 hereto shall not be a condition precedent to the Third Restatement Date but shall be required to be satisfied after the Third
Restatement Date in accordance with Schedule 5.15 hereto, and (ii) all conditions precedent and representations, warranties, covenants, Events of Default and other provisions contained in this Agreement and the other Credit Documents shall be
deemed modified as set forth on Schedule 5.15 hereto (and to permit the taking of the actions described therein within the time periods required therein, rather than as elsewhere provided in the Credit Documents); provided that (x) to
the extent any representation and warranty would not be true because the actions set forth therein were not taken on the Third Restatement Date, the respective representation and warranty shall be required to be true and correct in all material
respects at the time the respective action is taken (or was required to be taken) in accordance with the provisions of Schedule 5.15 and (y) all representations and warranties relating to the Collateral Documents set forth in Schedule 5.15
shall be required to be true immediately after the actions required to be taken by Schedule 5.15 have been taken (or were required to be taken).
3.2 Prior Credit Dates. The obligations of (a) the Lenders (including the Swing
Line Lender) to make Loans and (b) Issuing Bank to issue Letters of Credit on the Original Closing Date, the First Restatement Date and the Second Restatement Date was subject to the satisfaction of all of the conditions precedent set forth in
Section 3.1 of the Original Credit Agreement, the First Amended and Restated Credit Agreement, and the Second Amended and Restated Credit Agreement, respectively.
3.3 Conditions to Each Credit Extension.
(a) Conditions Precedent. The obligation of each Lender to make any Loan, or Issuing
Bank to issue, amend, modify, renew or extend any Letter of Credit, on any Credit Date, on or after the Third Restatement Date, are subject to the satisfaction, or waiver in accordance with Section 10.5, of the following conditions precedent:
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(i) Administrative Agent shall
have received a fully executed and delivered Funding Notice or Issuance Notice, as the case may be;
(ii) after making the Credit Extensions requested on such Credit Date, the
Total Utilization of Revolving Commitments shall not exceed the Revolving Commitments then in effect;
(iii) as of such Credit Date, the representations and warranties contained
herein and in the other Credit Documents, in each case, shall be true and correct in all material respects on and as of that Credit Date to the same extent as though made on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date; provided that, in each case, such materiality
qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof;
(iv) no event shall have occurred and be continuing or would result from the
consummation of the applicable Credit Extension that would constitute an Event of Default or a Default; and
(v) on or before the date of issuance, amendment, modification, renewal or
extension of any Letter of Credit, Administrative Agent shall have received all other information required by the applicable Letter of Credit application, and such other documents or information as Issuing Bank may reasonably require in connection
with the issuance amendment, modification, renewal or extension of such Letter of Credit.
(b) Notices. Any Notice shall be executed by an Authorized Officer in a writing
delivered to Administrative Agent. In lieu of delivering a Notice, Borrower may give Administrative Agent telephonic notice by the required time of any proposed borrowing, conversion/continuation or issuance of a Letter of Credit, as the case may
be; provided that each such telephonic notice shall be promptly confirmed in writing by delivery of the applicable Notice to Administrative Agent on or before the close of business on the date that the telephonic notice is given. In the event
of a discrepancy between the telephonic notice and the written Notice, the written Notice shall govern. In the case of any Notice that is irrevocable once given, if Borrower provides telephonic notice in lieu thereof, such telephone notice shall
also be irrevocable once given. Neither Administrative Agent nor any Lender shall incur any liability to Borrower in acting upon any telephonic notice referred to above that Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized on behalf of Borrower or for otherwise acting in good faith.
SECTION 4. |
REPRESENTATIONS AND WARRANTIES |
In order to induce Agents, Lenders and Issuing Bank to
enter into this Agreement and to make each Credit Extension to be made thereby, each Credit Party represents and warrants to each Agent, each Lender and Issuing Bank, on the Third Restatement Date and on each Credit Date, that the following
statements are true and correct.
4.1 Organization; Requisite Power and Authority;
Qualification. Except as otherwise set forth on Schedule 4.1, each of Borrower and its Subsidiaries (a) is duly organized, validly existing and, to the extent such concept is applicable in the relevant jurisdiction, in good standing under
the laws of its jurisdiction of organization as identified in Schedule 4.1, (b) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into
the Credit Documents to which it is a party and to carry out the transactions contemplated thereby, and (c) to the extent such concept is applicable in the relevant jurisdiction, is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing has not had, and could not be reasonably expected to have, a
Material Adverse Effect.
4.2 Equity Interests and Ownership. The Equity Interests
of each of Borrower and its Subsidiaries have been duly authorized and validly issued and are fully paid and non-assessable. Except as set forth on Schedule 4.2, as of the date hereof, there is no existing option, warrant, call, right, commitment or
other agreement to which Borrower or any of its Subsidiaries is a party requiring, and there is no membership interest or other Equity Interests of
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Borrower or any of its Subsidiaries outstanding which upon conversion or exchange would require, the issuance by Borrower or any of its Subsidiaries of any additional membership interests or
other Equity Interests of Borrower or any of its Subsidiaries or other Securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase a membership interest or other Equity Interests of Borrower or any of its
Subsidiaries. Schedule 4.2 correctly sets forth the ownership interest of Borrower and each of its Subsidiaries as of the Third Restatement Date.
4.3 Due Authorization. The execution, delivery and performance of the Credit Documents
have been duly authorized by all necessary action on the part of each Credit Party that is a party thereto.
4.4 No Conflict. The execution, delivery and performance by Credit Parties of the
Credit Documents to which they are parties and the consummation of the transactions contemplated by the Credit Documents do not and will not (a) violate (i) any provision of any Applicable Law, (ii) any of the Organizational Documents
of Borrower or any of its Subsidiaries, or (iii) any order, judgment or decree of any court or other agency of government binding on Borrower or any of its Subsidiaries, except with respect to clauses (i) and (iii) to the extent that
such violation could not reasonably be expected to have a Material Adverse Effect; (b) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of Borrower or any
of its Subsidiaries, except to the extent that such conflict, breach or default could not reasonably be expected to have a Material Adverse Effect; (c) result in or require the creation or imposition of any Lien upon any of the properties or
assets of Borrower or any of its Subsidiaries (other than any Liens created under any of the Credit Documents in favor of Collateral Agent, on behalf of Secured Parties); or (d) require any approval of stockholders, members or partners or any
approval or consent of any Person under any Contractual Obligation of Borrower or any of its Subsidiaries, except for such approvals or consents which will be obtained on or before the Third Restatement Date and disclosed in writing to Lenders and
except for any such approval or consent the failure of which to obtain could not reasonably be expected to have a Material Adverse Effect.
4.5 Governmental Consents. (a) The execution, delivery and performance by Credit
Parties of the Credit Documents to which they are parties and the consummation of the financing contemplated by this Agreement do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by,
any Governmental Authority, except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to Collateral Agent for filing and/or recordation, and (b) with respect to the consummation of each Acquisition, as
of the date thereof, consummation of such Acquisition did not require any registration with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority as of the date thereof, except for such registrations,
consents, notices or other actions which were obtained or made on or before such date.
4.6 Binding Obligation. Each Credit Document has been duly executed and delivered by
each Credit Party that is a party thereto and is the legally valid and binding obligation of such Credit Party, enforceable against such Credit Party in accordance with its respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors rights generally or by equitable principles relating to enforceability.
4.7 Historical Financial Statements. The Historical Financial Statements were prepared
in conformity with GAAP and fairly present, in all material respects, the financial position, on a consolidated basis, of the Persons described in such financial statements as at the respective dates thereof and the results of operations and cash
flows, on a consolidated basis, of the Persons described therein for each of the periods then ended, subject, in the case of any such unaudited financial statements, to changes resulting from audit and normal year end adjustments and the absence of
footnotes. As of the Third Restatement Date, none of Borrower or any of its Subsidiaries has any contingent liability or liability for taxes, long term lease or unusual forward or long term commitment that is not reflected in the Historical
Financial Statements or the notes thereto and which in any such case is material in relation to the business, operations, properties, assets or condition (financial or otherwise) of Borrower and its Subsidiaries taken as a whole.
4.8 Projections. On and as of the Third Restatement Date, the Projections of Borrower
and its Subsidiaries for the period of Fiscal Year 2012 through and including Fiscal Year 2016 provided to Lenders or prospective Lenders in writing on or prior to the Third Restatement Date (the Projections) are based on good
faith estimates and assumptions made by the management of Borrower; provided that the Projections are not to be viewed
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as facts and that actual results during the period or periods covered by the Projections may differ from such Projections and that the differences may be material.
4.9 No Material Adverse Change. Since January 1, 2011, no event, circumstance or change
has occurred that has caused or evidences, or could reasonably be expected to have, either in any case or in the aggregate, a Material Adverse Effect.
4.10 Adverse Proceedings, etc. There are no Adverse Proceedings, individually or in the aggregate,
that could reasonably be expected to have a Material Adverse Effect. None of Borrower or any of its Subsidiaries (a) is in violation of any Applicable Laws (including Environmental Laws) that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, or (b) is subject to or in default with respect to any Governmental Authority or any final judgments, writs, injunctions, decrees, rules or regulations of any Governmental Authority, that,
individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
4.11 Payment of Taxes. Except for any failure that would not be reasonably expected to, individually
or in the aggregate, result in a Material Adverse Effect:
(a) all Tax
returns and reports of Borrower and each of its Subsidiaries required to be filed by any of them have been timely filed, and all Taxes (whether or not shown on such Tax returns) of Borrower and each of its Subsidiaries and upon their respective
properties, assets, income, businesses and franchises (including in the capacity of a withholding agent) which are due and payable have been timely paid (except for Taxes that are being contested in accordance with the terms of Section 5.3) and
adequate accruals and reserves have been made in accordance with GAAP for Taxes of Borrower and each of its Subsidiaries in that are not due and payable; and
(b) there is no current, or, to the knowledge of Borrower or its Subsidiaries,
proposed or pending audit, examination, Tax assessment, claims or proceedings against Borrower or any of its Subsidiaries which is not being actively contested by Borrower or such Subsidiary in good faith and by appropriate proceedings and for which
adequate reserves have been made in accordance with GAAP by Borrower or any of its Subsidiaries, as applicable.
4.12 Properties.
(a) Title. Each of Borrower and its Subsidiaries has (i) good, sufficient and
legal and beneficial title to (in the case of fee interests in real property), (ii) valid leasehold interests in (in the case of leasehold interests in real or personal property), (iii) valid licensed rights in (in the case of licensed
interests in intellectual property) and (iv) good title to (in the case of all other personal property), all of their respective properties and assets material to its business, except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such properties for their intended purposes. Except as permitted by this Agreement, all such properties and assets are free and clear of Liens.
(b) Real Estate. As of the Third Restatement Date, Schedule 4.12 contains a true,
accurate and complete list of (i) all Real Estate Assets, and (ii) all leases, subleases, licenses or assignments of leases, subleases, licenses or other agreements (together with all amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each Real Estate Asset of any Credit Party, regardless of whether such Credit Party is the landlord (licensor) or tenant (licensee) (whether directly or as an assignee or successor in interest) under such lease,
sublease, license, assignment or other agreement. Each agreement listed in clause (ii) of the immediately preceding sentence is in full force and effect and Borrower does not have knowledge of any default that has occurred and is continuing
thereunder, except to the extent that the failure to be in full force and effect or the occurrence and continuance of a default, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, and each such
agreement constitutes the legally valid and binding obligation of each applicable Credit Party, enforceable against such Credit Party in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors rights generally or by equitable principles. To the knowledge of the Credit Parties, none of the buildings or other structures located on any Real Estate Asset encroaches upon any
land not owned or leased by a Credit Party (except in a manner that constitutes a Permitted Lien), and there are no restrictive covenants or statutes, regulations, orders or other laws which
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restrict or prohibit the use in any material respect of any Real Estate Asset or such buildings or structures for the purposes for which they are currently used. To the knowledge of the Credit
Parties, there are no expropriation or similar proceedings, actual or threatened, against any Real Estate Asset or any part thereof.
(c) Intellectual Property. Each Credit Party possesses or has, by valid and enforceable
license, ownership or the right to use all Intellectual Property used in the conduct of its business and, to each Credit Partys knowledge, has the right to use such Intellectual Property without violation or infringement of any rights of
others with respect thereto.
4.13 Environmental Matters. None of Borrower or any of its
Subsidiaries or any of their respective Facilities or operations are subject to any actual or, to Borrowers knowledge, as applicable, threatened, order, consent decree or settlement agreement with any Person pursuant to any Environmental Law
or relating to any Environmental Claim or any Release or threat of Release of Hazardous Materials, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of Borrower or any of its
Subsidiaries has received any written notice of non-compliance with any Environmental Law, letter or request for information under Section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9604)
or any comparable state law, except as, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Each Facility is free from the presence of Hazardous Materials, except for such materials the presence
of which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. There are and, to each of Borrowers and its Subsidiaries knowledge, have been no conditions, occurrences, or Release or
threat of Release of Hazardous Materials that could reasonably be expected to form the basis of a Environmental Claim against Borrower or any of its Subsidiaries that, individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of Borrower or any of its Subsidiaries or, to any Credit Partys knowledge, any predecessor of Borrower or any of its Subsidiaries has filed any notice under any Environmental Law indicating past or present
treatment of Hazardous Materials at any Facility, except as, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, and none of Borrowers or any of its Subsidiaries operations involves
the generation, transportation, treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts 260 or 270 or any state or other equivalent, in each case, except as, individually or in the aggregate could not reasonably be
expected to result in a Material Adverse Effect. Borrower and each of its Subsidiaries, Facilities and operations are in compliance with applicable Environmental Laws, in each case, except as, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect.
4.14 No Defaults. None of Borrower or any
of its Subsidiaries is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any of its Contractual Obligations, and no condition exists which, with the giving of notice or the lapse
of time or both, could constitute such a default, except where the consequences, direct or indirect, of such default or defaults, if any, could not reasonably be expected to have a Material Adverse Effect.
4.15 Governmental Regulation. Borrower and its Subsidiaries are not subject to regulation under the
Investment Company Act of 1940 or any other Applicable Law or Governmental Authorization that restricts or limits their ability to incur Indebtedness or to perform or satisfy the Obligations.
4.16 Federal Reserve Regulations.
(a) None of Borrower or any of its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock.
(b) No portion of the proceeds of any Credit Extension shall be used in any manner, whether
directly or indirectly, that causes or could reasonably be expected to cause, such Credit Extension or the application of such proceeds to violate Regulation T, Regulation U or Regulation X of the Board of Governors or any other regulation thereof.
4.17 Employee Matters. None of Borrower or any of its Subsidiaries is engaged in any unfair
labor practice or other labor proceeding (including certification) or complaint that could reasonably be expected to have a Material Adverse Effect. Except as could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, there is (a) no unfair labor practice complaint pending against Borrower or any of its
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Subsidiaries or, to the knowledge of Borrower, threatened against any of them before the National Labor Relations Board or a labor board of any other jurisdiction, and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement pending against Borrower or any of its Subsidiaries or, to the knowledge of Borrower, threatened against any of them, and none of Borrower or any of its Subsidiaries is in
violation of any collective bargaining agreement, (b) no strike or work stoppage in existence or, to the knowledge of Borrower, threatened involving Borrower or any of its Subsidiaries and (c) to the knowledge of Borrower, no union
representation question existing with respect to the employees of Borrower or any of its Subsidiaries and, to the knowledge of Borrower, no union organization activity is taking place with respect to the employees of Borrower or any of its
Subsidiaries. Except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, all payments due from any Canadian Credit Party for employee health and welfare insurance have been paid or accrued as a
liability on the books of such Canadian Credit Party and such Canadian Credit Party has withheld and remitted all employee withholdings to be withheld or remitted by it and has made all employer contributions to be made by it, in each case, pursuant
to applicable law on account of the Canada Pension Plan maintained by the Government of Canada, employment insurance, employee income taxes, and any other required payroll deduction.
4.18 Employee Benefit Plans. Except as could not reasonably be expected to have a Material Adverse
Effect, (a) Borrower, each of its Subsidiaries and each of their respective ERISA Affiliates are in compliance with all applicable provisions and requirements of ERISA and the Internal Revenue Code and the regulations and published
interpretations thereunder with respect to each Employee Benefit Plan, and have performed all their obligations under each Employee Benefit Plan, (b) each Employee Benefit Plan which is intended to qualify under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the Internal Revenue Service indicating that such Employee Benefit Plan is so qualified and, to the knowledge of Borrower, nothing has occurred subsequent to the issuance of
such determination letter which would cause such Employee Benefit Plan to lose its qualified status, (c) no liability to the PBGC (other than required premium payments), the Internal Revenue Service, any Employee Benefit Plan or any trust
established under Title IV of ERISA has been or is expected to be incurred by Borrower, any of its Subsidiaries or any of their ERISA Affiliates, (d) no ERISA Event has occurred or is reasonably expected to occur and (e) except to the
extent required under Section 4980B of the Internal Revenue Code or similar state laws, no Employee Benefit Plan provides health or welfare benefits (through the purchase of insurance or otherwise) for any retired or former employee of
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates. The present value of the aggregate benefit liabilities under each Pension Plan sponsored, maintained or contributed to by Borrower, any of its Subsidiaries or any of
their ERISA Affiliates (determined as of the end of the most recent plan year on the basis of the actuarial assumptions specified for funding purposes in the most recent actuarial valuation for such Pension Plan), did not exceed the then-current
aggregate value of the assets of such Pension Plan by more than $150,000,000. As of the most recent valuation date for each Multiemployer Plan for which the actuarial report is available, the potential liability of Borrower, its Subsidiaries and
their respective ERISA Affiliates for a complete withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when aggregated with such potential liability for a complete withdrawal from all Multiemployer Plans, based
on information available pursuant to Section 4221(e) of ERISA, is not more than $150,000,000. Except as could not reasonably be expected to have a Material Adverse Effect, Borrower, each of its Subsidiaries and each of their ERISA Affiliates
have complied with the requirements of Section 515 of ERISA with respect to each Multiemployer Plan and are not in default (as defined in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan.
4.19 Canadian Employee Benefit Plans.
(a) Except as could not reasonably be expected to have a Material Adverse Effect and except as
set forth on Schedule 4.18, the Canadian Employee Benefit Plans are, and have been, established, registered, amended, funded, invested and administered in compliance with the terms of such Canadian Employee Benefit Plans (including the terms of any
documents in respect of such Canadian Employee Benefit Plans), all Applicable Laws and any applicable collective agreements. There is no investigation by a Governmental Authority or claim (other than routine claims for payment of benefits) pending
or, to the knowledge of a Canadian Credit Party, threatened involving any Canadian Employee Benefit Plan or its assets, and no facts exist which could reasonably be expected to give rise to any such investigation or claim (other than routine claims
for payment of benefits) which if determined adversely, could reasonably be expected to have a Material Adverse Effect.
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(b) All employer and employee payments,
contributions and premiums required to be remitted, paid to or in respect of each Canadian Pension Plan have been paid or remitted in accordance with its terms and all applicable laws.
(c) No Canadian Pension Plan Termination Events have occurred that individually or in the
aggregate, would result in a Canadian Credit Party owing an amount that could reasonably be expected to have a Material Adverse Effect.
(d) Except as set forth on Schedule 4.18, no Credit Party has any liability (contingent,
matured or otherwise) in respect of a Defined Benefit Plan.
None of the Canadian Employee Benefit Plans, other than the Canadian Pension
Plans, provide benefits beyond retirement or other termination of service to employees or former employees of a Canadian Credit Party, or to the beneficiaries or dependants of such employees.
4.20 Solvency. The Credit Parties are and, upon the incurrence of any Obligation by any Credit Party
on any date on which this representation and warranty is made, will be, Solvent, on a consolidated basis.
4.21 Compliance with Statutes, etc. Each of Borrower and its Subsidiaries is in compliance with all
Applicable Laws imposed by all Governmental Authorities, in respect of the conduct of its business and the ownership of its property (including compliance with all applicable Environmental Laws with respect to any Real Estate Asset or governing its
business and the requirements of any permits issued under such Environmental Laws with respect to any such Real Estate Asset or the operations of Borrower or any of its Subsidiaries as currently operated or conducted), except such non-compliance
that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
4.22 Disclosure. None of the reports, certificates or written statements furnished to Lenders by or
on behalf of Borrower or any of its Subsidiaries for use in connection with the Transactions, other than projections and information of a general economic or general industry nature, contains any untrue statement of a material fact or omits to state
a material fact (known to Borrower, in the case of any document not furnished by either of them) necessary in order to make the statements contained herein or therein not misleading as of the date made, in light of the circumstances in which the
same were made. Any projections and pro forma financial information contained in such materials are based upon good faith estimates and assumptions believed by Borrower to be reasonable at the time made, it being recognized by Lenders that such
projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results and such differences may be material. There are no facts known
(or which should upon the reasonable exercise of diligence be known) to Borrower (other than matters of a general economic nature) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect and that
have not been disclosed herein or other documents, certificates and statements furnished to Lenders for use in connection with the Transactions.
4.23 PATRIOT Act and PCTFA. To the extent applicable, each Credit Party is in compliance, in all
material respects, with the (i) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation
or executive order relating thereto, (ii) the PATRIOT Act, (iii) Part II.1 of the Criminal Code (Canada), (iv) the Proceeds of Crime (money laundering) and Terrorist Financing Act (Canada) (the PCTFA),
(v) the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism (Canada) and (vi) United Nations Al-Qaida and Taliban Regulations (Canada). No part of the proceeds of the Loans will be used,
directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.
4.24 Creation, Perfection, etc. Except as otherwise contemplated hereby or under any other Credit
Document, including without limitation in Section 3 hereof, all filings and other actions necessary to perfect the Liens on the Collateral created under, and in the manner contemplated by, the Collateral Documents have been duly made or taken
or otherwise provided for (to the extent required hereby or by the applicable Collateral Documents), and, to the
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extent not previously executed and delivered, when executed and delivered, the Collateral Documents will create in favor of Collateral Agent for the benefit of the Secured Parties, or in favor of
the Secured Parties, a valid and, together with such filings and other actions (to the extent required hereby or by the applicable Collateral Documents), perfected First Priority Lien on the Collateral, securing the payment of the Obligations.
4.25 OFAC Matters. None of Borrower, any of its Subsidiaries or, to the knowledge of Borrower, any
director, officer, agent, employee or affiliate of Borrower or any of its Subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (OFAC);
and Borrower and its Subsidiaries will not, directly or indirectly, use the proceeds of the Loans, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person or entity, for the purpose of
financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC.
SECTION 5. |
AFFIRMATIVE COVENANTS |
Each Credit Party covenants and agrees that so long as any
Commitment is in effect and until payment in full of all principal of and interest on each Loan and all fees, expenses and other amounts (other than contingent amounts not yet due) payable under any Credit Document and cancellation or expiration of
all Letters of Credit, each Credit Party shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section 5.
5.1 Financial Statements and Other Reports. Borrower will deliver to Administrative Agent on behalf
of each Lender:
(a) Quarterly Financial Statements. Within 45 days
after the end of each Fiscal Quarter of each Fiscal Year (other than the fourth Fiscal Quarter of any such Fiscal Year), commencing with the Fiscal Quarter ending September 30, 2011, the consolidated balance sheets of Borrower and its
Subsidiaries as at the end of such Fiscal Quarter and the related consolidated statements of income and cash flows of Borrower and its Subsidiaries for such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the
end of such Fiscal Quarter, setting forth in each case in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year, commencing with the first Fiscal Quarter for which such corresponding figures are
available, all in reasonable detail, together with a Financial Officer Certification and a Narrative Report with respect thereto;
(b) Annual Financial Statements. Within 90 days after the end of each
Fiscal Year, commencing with the Fiscal Year ending December 31, 2011, (i) the consolidated balance sheets of Borrower and its Subsidiaries as at the end of such Fiscal Year and the related consolidated statements of income,
stockholders equity and cash flows of Borrower and its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year commencing with the first Fiscal Year for which
such corresponding figures are available, all in reasonable detail, together with a Financial Officer Certification and a Narrative Report with respect thereto; and (ii) with respect to such consolidated financial statements a report thereon by
an independent certified public accountant (or accountants) of recognized national standing selected by Borrower, and reasonably satisfactory to Administrative Agent (which report and/or the accompanying financial statements shall be unqualified as
to going concern and scope of audit, and shall state that such consolidated financial statements fairly present, in all material respects, the consolidated financial position of Borrower and its Subsidiaries as at the dates indicated and the results
of their operations and their cash flows for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except as otherwise disclosed in such financial statements) and that the examination by such accountants in
connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards) together with a written statement by such independent certified public accountants stating (1) that their audit
examination has included a review of the terms of Section 6.7 of this Agreement and the related definitions, (2) whether, in connection therewith, any condition or event that constitutes a Default or an Event of Default under
Section 6.7 has come to their attention and, if such a condition or event has come to their attention, specifying the nature and period of existence thereof, and (3) that nothing has come to their attention that causes them to believe that
the information contained in any Compliance Certificate is not correct or that the matters set forth in such Compliance Certificate are not stated in accordance with the terms hereof (which statement may be limited to the extent required by
accounting rules or guidelines);
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(c) Compliance
Certificate. Together with each delivery of financial statements of Borrower and its Subsidiaries pursuant to Sections 5.1(a) and 5.1(b), a duly executed and completed Compliance Certificate;
(d) Statements of Reconciliation after Change in Accounting Principles.
If, as a result of any change in accounting principles and policies from those used in the preparation of the Historical Financial Statements, the consolidated financial statements of Borrower and its Subsidiaries delivered pursuant to
Section 5.1(a) or 5.1(b) will differ in any material respect from the consolidated financial statements that would have been delivered pursuant to such subdivisions had no such change in accounting principles and policies been made, then,
together with the first delivery of such financial statements after such change, one or more statements of reconciliation for all such prior financial statements in form and substance reasonably satisfactory to Administrative Agent;
(e) Notice of Default. Promptly upon any Responsible Officer of
Borrower obtaining knowledge (i) of any condition or event that constitutes a Default or an Event of Default or that notice has been given to Borrower with respect thereto; (ii) that any Person has given any notice to Borrower or any of
its Subsidiaries or taken any other action with respect to any event or condition set forth in Section 8.1(b); or (iii) of the occurrence of any event or change that has caused or evidences or could reasonably be expected to result in,
either individually or in the aggregate, a Material Adverse Effect, a certificate of an Authorized Officer specifying the nature and period of existence of such condition, event or change, or specifying the notice given and action taken by any such
Person and the nature of such claimed Event of Default, Default, default, event or condition, and what action Borrower has taken, is taking and proposes to take with respect thereto;
(f) Notice of Litigation. Promptly upon any Responsible Officer of
Borrower obtaining knowledge of any actual or threatened (i) Adverse Proceeding not previously disclosed in writing by Borrower to Lenders, or (ii) development in any Adverse Proceeding that, in the case of either clause (i) or (ii),
if adversely determined could be reasonably expected to result in a Material Adverse Effect, or seeks to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the Transactions, written notice
thereof together with such other information as may be reasonably available to Borrower to enable Lenders and their counsel to evaluate such matters;
(g) ERISA. (i) Promptly upon any Responsible Officer of Borrower
obtaining knowledge of the occurrence of or forthcoming occurrence of any ERISA Event, a written notice specifying the nature thereof, what action Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or
proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto; and (ii) with reasonable promptness, copies of (1) each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed by Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates with the Internal Revenue Service with respect to each Pension Plan; (2) all
notices received by Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event; and (3) copies of such other documents or governmental reports or filings relating to
any Employee Benefit Plan as Administrative Agent shall reasonably request;
(h) Canadian Employee Benefit Plans. Promptly upon any Responsible
Officer of Borrower obtaining knowledge of: (1) a Canadian Pension Plan Termination Event; (2) the failure to make a required contribution to or payment under any Canadian Pension Plan when due; (3) the occurrence of any event which
is reasonably likely to result in a Canadian Credit Party incurring any liability, fine or penalty with respect to any Canadian Employee Benefit Plan that could reasonably be expected to result in a Material Adverse Effect; (4) the
establishment of any material new Canadian Employee Benefit Plans or (5) any change to an existing Canadian Employee Benefit Plan that could reasonably be expected to result in a Material Adverse Effect; in the notice to the Administrative
Agent of the foregoing, copies of all documentation relating thereto as Administrative Agent shall reasonably request shall be provided;
(i) Financial Plan. As soon as practicable and in any event no later
than 60 days subsequent to the beginning of each Fiscal Year (beginning with the Fiscal Year ending December 31, 2012), a
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consolidated plan and financial forecast for such Fiscal Year and each Fiscal Year (or portion thereof) through the final maturity date of the Loans (a Financial Plan),
including forecasted consolidated statements of income of Borrower for each Fiscal Quarter of such Fiscal Year (it being understood that the forecasted financial information is not to be viewed as facts and that actual results during the period or
periods covered by the Financial Plan may differ from such forecasted financial information and that such differences may be material);
(j) Insurance Report. As soon as practicable and in any event within 60
days after the last day of each Fiscal Year, a certificate from Borrowers insurance broker in form and substance satisfactory to Administrative Agent outlining all material insurance coverage maintained as of the date of such certificate by
Borrower and its Subsidiaries;
(k) Information Regarding
Collateral. Borrower will furnish to Collateral Agent prompt (and in any event within 30 days of such change) written notice of any change (i) in any Credit Partys legal name, (ii) in any Credit Partys identity or corporate
structure, (iii) in any Credit Partys jurisdiction of organization or of the jurisdiction in which its chief executive office is located or (iv) in any Credit Partys Federal Taxpayer Identification Number or state
organizational identification number. Borrower agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code, the PPSA or similar laws of jurisdictions in which
Credit Parties are organized or otherwise that are required in order for Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral as contemplated in the Collateral
Documents. Borrower also agrees promptly to notify Collateral Agent if any material portion of the Collateral is damaged or destroyed;
(l) Annual Collateral Verification. Each year, at the time of delivery
of annual financial statements with respect to the preceding Fiscal Year pursuant to Section 5.1(b), Borrower shall deliver to Collateral Agent a certificate of an Authorized Officer (i) either confirming that there has been no change in
the information required by the Collateral Questionnaire since the date of the most recently delivered Collateral Questionnaire or the date of the most recent certificate delivered pursuant to this Section and/or identifying such changes and
(ii) certifying that all Uniform Commercial Code and PPSA financing statements (including fixtures filings, as applicable) and all supplemental Intellectual Property Security Agreements or other appropriate filings, recordings or registrations,
have been filed or recorded in each governmental, municipal or other appropriate office in each jurisdiction identified in the Collateral Questionnaire or pursuant to clause (i) above to the extent necessary to effect, protect and perfect the
security interests under the Collateral Documents for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period);
(m) Other Information. (A) Promptly upon their becoming publicly
available, copies (or e-mail notice) of (i) all financial statements, reports, notices and proxy statements sent or made available generally by Borrower to its security holders acting in such capacity or by any Subsidiary of Borrower to its
security holders other than Borrower or another Subsidiary of Borrower, (ii) all regular and periodic reports and all registration statements and prospectuses, if any, filed by Borrower or any of its Subsidiaries with any securities exchange or
with the Securities and Exchange Commission, the Ontario Securities Commission or any other Governmental Authority and (iii) all press releases and other statements made available generally by Borrower or any of its Subsidiaries to the public
concerning material developments in the business of Borrower or any of its Subsidiaries, and (B) such other information and data with respect to the operations, business affairs and financial condition of Borrower or any of its Subsidiaries as
from time to time may be reasonably requested by Administrative Agent or any Lender;
(n) Certification of Public Information. Borrower and each Lender
acknowledge that certain of the Lenders may be Public Lenders and, if documents or notices required to be delivered pursuant to this Section 5.1 or otherwise are being distributed through IntraLinks, SyndTrak or another relevant website or
other information platform (the Platform), any document or notice that Borrower has indicated contains Non-Public Information shall not be posted on that portion of the Platform designated for such Public Lenders. Borrower agrees
to clearly designate all information provided to Administrative Agent by or on behalf of Borrower which is suitable to make available to Public Lenders. If Borrower has not indicated
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whether a document or notice delivered pursuant to this Section 5.1 contains Non-Public Information, Administrative Agent reserves the right to post such document or notice solely on that
portion of the Platform designated for Lenders who wish to receive material non-public information with respect to Borrower, its Subsidiaries and their respective Securities; and
(o) Environmental Reports and Audits. As soon as practicable following
receipt thereof, copies of all environmental audits and written reports with respect to environmental matters at any Facility or that relate to any environmental liabilities of any Credit Party, in each case that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.
(p)
General. Any financial statement, report, notice, proxy statement, registration statement, prospectus or other document required to be delivered pursuant to this Section 5.1 shall be delivered in accordance with Section 10.1 and
shall be deemed to have been delivered on the date on which such financial statement, report, notice, proxy statement, registration statement, prospectus or other document is posted on the SECs website on the Internet at www.sec.gov and, in
each case, such financial statement, report, notice, proxy statement, registration statement, prospectus or other document is readily accessible to the Administrative Agent on such date; provided that Borrower shall give notice of any such
posting to Administrative Agent (who shall then give notice of any such posting to the Lenders). Furthermore, if any financial statement, certificate or other information required to be delivered pursuant to this Section 5.1 shall be required
to be delivered on any date that is not a Business Day, such financial statement, certificate or other information may be delivered to Administrative Agent on the next succeeding Business Day after such date.
5.2 Existence. Except as otherwise permitted under Section 6.8, each Credit Party
will, and will cause each of its Subsidiaries to, at all times preserve and keep in full force and effect its existence and all rights and franchises, licenses and permits material to its business; provided that no Credit Party (other than
Borrower with respect to existence) or any of its Subsidiaries shall be required to preserve any such existence, right or franchise, licenses and permits if such Persons board of directors (or similar governing body) shall determine that the
preservation thereof is no longer desirable in the conduct of the business of such Person, and that the loss thereof is not disadvantageous in any material respect to such Person or to Lenders.
5.3 Payment of Taxes and Claims. Except for failures that, individually and in the
aggregate, would not reasonably be expected to result in a Material Adverse Effect, each Credit Party will, and will cause each of its Subsidiaries to, pay all Taxes imposed upon it or any of its properties or assets or in respect of any of its
income, businesses or franchises before any penalty or fine accrues thereon, and all claims (including claims for labor, services, materials and supplies) for sums that have become due and payable and that by law have or may become a Lien upon any
of its properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided, no such Tax or claim need be paid if it is being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted, so long as (a) adequate reserve or other appropriate provision, as shall be required in conformity with GAAP shall have been made therefor, and (b) in the case of a Tax or claim which has or may become a Lien
against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such Tax or claim. No Credit Party will, nor will it permit any of its Subsidiaries to, file or consent to the
filing of any consolidated income tax return with any Person (other than Borrower or any of its Subsidiaries).
5.4 Maintenance of Properties. Each Credit Party will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all material properties used or useful in the business of Borrower and its Subsidiaries.
5.5 Insurance. Borrower and its Subsidiaries will maintain or cause to be maintained,
with financially sound and reputable insurers, such public liability insurance, property damage insurance and business interruption insurance with respect to liabilities, losses or damage in respect of the assets, properties and businesses of
Borrower and its Subsidiaries as is customarily carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses in the same or similar locations, in each case in such amounts (giving effect to
self-insurance), with such deductibles, covering such risks and otherwise on such terms and conditions as shall be customary for such Persons. Without limiting the generality of the foregoing, Borrower will maintain or cause to be
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maintained (a) flood insurance with respect to each Flood Hazard Property that is located in a community that participates in the National Flood Insurance Program, in each case in compliance
with any applicable regulations of the Board of Governors of the Federal Reserve System, and (b) replacement value property damage insurance on the Collateral under such policies of insurance, with such insurance companies, in such amounts,
with such deductibles, and covering such risks as are carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses in the same or similar locations. Each such policy of insurance shall
(i) name Collateral Agent, on behalf of the Secured Parties, as an additional insured thereunder as its interests may appear and (ii) in the case of each property damage insurance policy, contain a loss payable clause or endorsement,
reasonably satisfactory in form and substance to Collateral Agent, that names Collateral Agent, on behalf of the Secured Parties, as the loss payee thereunder and provides for at least thirty days prior written notice to Collateral Agent of
any modification or cancellation of such policy; provided that the provisions of the foregoing sentence shall not apply to any policy of insurance maintained solely for the purpose of compliance with Applicable Law to the extent that the
assets, properties and businesses that are the subject of such policy are separately the subject of an insurance policy with respect to which Borrower shall have satisfied the provision of the foregoing sentence.
5.6 Books and Records; Inspections. Each Credit Party will, and will cause each of its
Subsidiaries to, keep proper books of record and accounts in which full, true and correct entries in conformity in all material respects with GAAP shall be made of all dealings and transactions in relation to its business and activities. Each Credit
Party will, and will cause each of its Subsidiaries to, permit any authorized representatives designated by any Lender to visit and inspect any of the properties of any Credit Party and any of its respective Subsidiaries, to inspect, copy and take
extracts from its and their financial and accounting records, and to discuss its and their affairs, finances and accounts with its and their officers and independent public accountants, all upon reasonable notice and at such reasonable times during
normal business hours and as often as may reasonably be requested; provided that, excluding any such visits and inspections during the continuation of an Event of Default, only the Administrative Agent on behalf of the Lenders may exercise
rights under this Section 5.6 and the Administrative Agent shall not exercise such rights more often than once during any calendar year absent the existence of an Event of Default. Notwithstanding anything to the contrary in this
Section 5.6 or any other Credit Document, none of Borrower or any of its Subsidiaries shall be required to disclose, permit the inspection, examination or making of copies or taking of extracts of, or discussion of, any document, information or
other matter (a) that constitutes non-financial trade secrets or non-financial proprietary information, (b) in respect of which disclosure to Administrative Agent or any Lender (or any of their respective representatives) is prohibited by
any Applicable Law or any binding contractual agreement or (c) is subject to attorney-client or similar privilege or constitutes attorney work product.
5.7 Lenders Meetings. Borrower will, upon the request of Administrative Agent or
Requisite Lenders, participate in a meeting of Administrative Agent and Lenders once during each Fiscal Year to be held at Borrowers corporate offices (or at such other location as may be agreed to by Borrower and Administrative Agent) at such
time as may be agreed to by Borrower and Administrative Agent.
5.8 Compliance with
Laws. Each Credit Party will comply, and shall cause each of its Subsidiaries to comply, with the requirements of all Applicable Law, rules, regulations and orders of any Governmental Authority (including all Environmental Laws), non-compliance
with which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
5.9 Environmental.
(a) Environmental Disclosure. Borrower will deliver to Administrative Agent and
Lenders:
(i) as soon as practicable following receipt thereof, copies of
all written reports of environmental audits, investigations or analyses of any kind or character, whether prepared by personnel of Borrower or any of its Subsidiaries or, to the extent in Borrowers or any of its Subsidiaries possession
or control, by independent consultants, Governmental Authorities or any other Persons, with respect to significant environmental matters at any Facility or with respect to any Environmental Claims that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect;
(ii)
promptly upon the occurrence thereof, written notice describing in reasonable detail (1) any Release required to be reported to any Governmental Authority under any applicable Environmental
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Laws that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, (2) any response or remedial action taken by Borrower or any other Person as
a result of (A) any Hazardous Materials at a Facility the existence of which could reasonably be expected to result in one or more Environmental Claims having, individually or in the aggregate, a Material Adverse Effect, or (B) any
Environmental Claims that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, (3) Borrowers discovery of any occurrences or conditions at any Facility that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect, and (4) Borrowers discovery of any occurrence or condition on any real property adjoining or in the vicinity of any Facility that could cause such Facility or
any part thereof to be subject to any material restrictions on the ownership, occupancy, transferability or use thereof under any Environmental Laws that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse
Effect;
(iii) as soon as practicable following the sending or receipt
thereof by Borrower or any of its Subsidiaries, a copy of any and all written communications to or from any Governmental Authority or third party claimant or their representatives with respect to any Environmental Claims that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect;
(iv) prompt written notice describing in reasonable detail (1) any
proposed acquisition of stock, assets, or property by Borrower or any of its Subsidiaries that could reasonably be expected to (A) expose Borrower or any of its Subsidiaries to, or result in, Environmental Claims that could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect or (B) adversely affect the ability of Borrower or any of its Subsidiaries to maintain in full force and effect Governmental Authorizations required under any
Environmental Laws for their respective operations, the absence of which could reasonably be expected to result in a Material Adverse Effect and (2) any proposed action to be taken by Borrower or any of its Subsidiaries to modify current
operations in a manner that could reasonably be expected to subject Borrower or any of its Subsidiaries to any additional obligations or requirements under any Environmental Laws, to the extent any such obligation or requirement could reasonably be
expected to result in a Material Adverse Effect; and
(v) with reasonable
promptness, such other documents and information as from time to time may be reasonably requested by Administrative Agent in relation to any matters disclosed pursuant to this Section 5.9(a).
(b) Environmental Matters. Each Credit Party shall promptly take, and shall cause each
of its Subsidiaries promptly to take, any and all actions necessary to (i) cure any violation of applicable Environmental Laws by such Credit Party or its Subsidiaries that could reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect, and (ii) make an appropriate response to any Environmental Claim against such Credit Party or any of its Subsidiaries and discharge any obligations it may have to any Person thereunder where failure to do so could
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, except in each case to the extent such Credit Party or Subsidiary is contesting such violation, Environmental Claim or obligation in good faith and by
proper proceedings and appropriate reserves are being maintained in accordance with GAAP.
5.10 Subsidiaries.
(1) In the event that any Person becomes a Domestic Subsidiary of Borrower (including with
respect to any Subsidiary Redesignation resulting in an Unrestricted Subsidiary becoming a Subsidiary) (other than a Subsidiary that is, or would be, an Excluded Subsidiary), Borrower shall: (I) promptly cause such Domestic Subsidiary to become
a Guarantor hereunder and a Grantor under the Second Amended and Restated Pledge and Security Agreement by executing and delivering to Administrative Agent and Collateral Agent a Counterpart Agreement and a Pledge Supplement (as defined in the
Second Amended and Restated Pledge and Security Agreement ), and (II) take all such actions and execute and deliver, or cause to be executed and delivered, all such documents, instruments, agreements, and certificates as are similar to those
described in Sections 3.1(b), 3.1(f), 3.1(h) and 3.1(i) of the Original Credit Agreement.
(2) In the event that any Person becomes a Foreign Subsidiary of VPI (including with respect
to any Subsidiary Redesignation resulting in an Unrestricted Subsidiary becoming a Subsidiary) (other than a Subsidiary that
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is, or would be, an Excluded Subsidiary), and the ownership interests of such Foreign Subsidiary are directly owned by VPI or by any Guarantor that is a Domestic Subsidiary thereof, Borrower
shall, or shall cause such Domestic Subsidiary to: (I) deliver all such documents, instruments, agreements, and certificates as are similar to those described in Section 3.1(b), and (II) take all of the actions referred to in
Section 3.1(d)(i) necessary to grant and to perfect a First Priority Lien in favor of Collateral Agent, for the benefit of Secured Parties, under the Second Amended and Restated Pledge and Security Agreement (subject to the limitations set
forth therein) in 65% of such ownership interests that is voting stock and 100% of such ownership interest that is not voting stock.
(3) In the event that any Person becomes a Foreign Subsidiary of Borrower (but not a
Subsidiary of VPI) (including with respect to any Subsidiary Redesignation resulting in an Unrestricted Subsidiary becoming a Subsidiary) (other than a Subsidiary that is, or would be, an Excluded Subsidiary), Borrower shall: (I) promptly cause
such Subsidiary to become a Guarantor (and to deliver (x) a Canadian Guarantee in respect of any such Foreign Subsidiary that is a Canadian Credit Party satisfying clause (i) of the definition thereof, (y) a Barbados Guarantee in
respect of any such Foreign Subsidiary that is a Barbados Credit Party and (z) a Counterpart Agreement in form and substance sufficient to create a binding Guarantee of the Obligations by each such Foreign Subsidiary not meeting the
requirements of clauses (x) and (y) above) (and to deliver (v) the Luxembourg Security Documents in respect of any such Foreign Subsidiary that is a Luxembourg Guarantor, (w) the Swiss Security Documents, in respect of any such
Foreign Subsidiary that is a Swiss Guarantor, (x) the Canadian Pledge and Security Agreement and, as applicable, Quebec Security Documents, in respect of any such Foreign Subsidiary that is a Canadian Credit Party satisfying clause (i) of
the definition thereof, (y) the Barbados Security Documents in respect of any such Foreign Subsidiary that is a Barbados Credit Party and (z) such agreement or agreements under the laws of the jurisdiction of organization of such Foreign
Subsidiary as are analogous to the Collateral Documents described under clauses (v), (w), (x) and (y) above), and (II) take all such actions and execute and deliver, or cause to be executed and delivered, all such documents, instruments,
agreements, and certificates as are similar to those described in Sections 3.1(b), 3.1(f), 3.1(h) and 3.1(i) of the Original Credit Agreement.
(4) With respect to each such Subsidiary described in paragraph (1) through (3) of
this Section 5.10, Borrower shall promptly send to Administrative Agent written notice setting forth with respect to such Person (i) the date on which such Person became a Subsidiary of Borrower, and (ii) all of the data required to
be set forth in Schedules 4.1 and 4.2 with respect to all Subsidiaries of Borrower, and such written notice shall be deemed to supplement Schedules 4.1 and 4.2 for all purposes hereof.
(5) Notwithstanding anything in this Section 5.10 to the contrary, in no event shall
(i) any Subsidiary that is otherwise prohibited by Applicable Law from guaranteeing the Obligations or pledging its assets in support of the Obligations be required to execute a Counterpart Agreement or any Collateral Document or take any other
action set forth in paragraph (1), (2) or (3) of this Section 5.10 (including, without limitation, Biovail Insurance) and (ii) Borrower or any Guarantor be required to pledge the Equity Interests of any Subsidiary in support of
the Obligations if such pledge is otherwise prohibited by Applicable Law.
(6)
Notwithstanding anything in this Agreement or any other Credit Document to the contrary (including this Section 5.10 and Sections 5.11 and 5.13), no Credit Document shall require the creation or perfection of pledges of or security interests
in, or the obtaining of title insurance, legal opinions or other deliverables with respect to, particular assets of the Credit Parties, if, and for so long as, Administrative Agent, in consultation with Borrower, determines in writing that the cost
of creating or perfecting such pledges or security interests in such assets, or obtaining such title insurance, legal opinions or other deliverables in respect of such assets (taking into account any adverse tax consequences to Borrower and its
Subsidiaries (including the imposition of withholding or other material taxes)), shall be excessive in view of the benefits to be obtained by the Secured Parties therefrom. Administrative Agent may grant extensions of time for the creation and
perfection of security interests in or the obtaining of title insurance, legal opinions or other deliverables with respect to particular assets or the provision of the Guarantee (or any other guarantee in support of the Obligations) by any
Subsidiary where it determines that such action cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required to be accomplished by this Agreement or the other Credit Documents.
(7) If it becomes illegal for any Lender to hold or benefit from a Lien over real or personal
property pursuant to any law of the United States of America, such Lender may, in its sole discretion, notify the Administrative Agent and disclaim any benefit of such security interest to the extent of such illegality, but the election by any
Lender
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to so disclaim the benefit of such security interest shall not invalidate or render unenforceable such Lien for the benefit of each of the other Lenders.
5.11 Additional Material Real Estate Assets. In the event that any Credit Party acquires a Material
Real Estate Asset or a Real Estate Asset owned or leased on the Third Restatement Date becomes a Material Real Estate Asset and such interest has not otherwise been made subject to the Lien of the Collateral Documents in favor of Collateral Agent,
for the benefit of Secured Parties, then such Credit Party shall promptly take all such actions and execute and deliver, or cause to be executed and delivered, all such mortgages, documents, instruments, agreements, opinions and certificates similar
to those described in Sections 3.1(h) and 3.1(i) of the Original Credit Agreement with respect to each such Material Real Estate Asset that Collateral Agent shall reasonably request to create in favor of Collateral Agent, for the benefit of Secured
Parties, a valid and, subject to any filing and/or recording referred to herein, perfected First Priority security interest in such Material Real Estate Asset. In addition to the foregoing, Borrower shall, at the request of Collateral Agent,
deliver, from time to time, to Collateral Agent such appraisals as are required by Applicable Law of Material Real Estate Assets with respect to which Collateral Agent has been granted a Lien.
5.12 Interest Rate Protection. No later than ninety (90) days following the Third Restatement
Date and at all times thereafter until the third anniversary of the Third Restatement Date, Borrower shall obtain and cause to be maintained protection against fluctuations in interest rates pursuant to one or more Interest Rate Agreements in form
and substance reasonably satisfactory to Administrative Agent, in order to ensure that for a period of not less than three years after the Third Restatement Date, no less than 35% of the aggregate principal amount of the total Indebtedness for
borrowed money of Borrower and its Subsidiaries then outstanding is either (i) subject to such Interest Rate Agreements or (ii) Indebtedness that bears interest at a fixed rate.
5.13 Further Assurances. At any time or from time to time, each Credit Party will, at its expense,
promptly execute, acknowledge and deliver such further documents and do such other acts and things as Administrative Agent or Collateral Agent may reasonably request in order to effect fully the purposes of the Credit Documents. In furtherance and
not in limitation of the foregoing, each Credit Party shall take such actions as Administrative Agent or Collateral Agent may reasonably request from time to time to ensure that the Obligations are guarantied by the Guarantors and are secured by
substantially all of the assets of Borrower and the other Guarantors (subject to the limitations contained herein and in the other Credit Documents).
5.14 Maintenance of Ratings. At all times, Borrower shall use commercially reasonable efforts to
maintain (x) a corporate family rating issued by Moodys and a corporate credit rating issued by S&P and (y) public ratings issued by Moodys and S&P with respect to its senior secured debt.
5.15 Post-Closing Matters. Borrower and its Subsidiaries, as applicable, agree to execute and
deliver the documents and take the actions set forth on Schedule 5.15, in each case within the time limits specified on such schedule (unless Administrative Agent, in its sole and absolute discretion, shall have agreed to any particular longer
period).
5.16 Canadian Employee Benefit Plans. Each Canadian Credit Party shall:
(a) with respect to each Canadian Pension Plan, pay all contributions,
premiums and payments when due in accordance with its terms and applicable law; and
(b) promptly deliver to the Administrative Agent copies of: (A) annual
information returns, actuarial valuations and any other reports which have been filed with a Governmental Authority with respect to each Canadian Pension Plan; and (B) any direction, order, notice, ruling or opinion that a Canadian Credit Party
may receive from a Governmental Authority with respect to any Canadian Employee Benefit Plan.
SECTION 6. |
NEGATIVE COVENANTS |
Each Credit Party covenants and agrees that, so long as any
Commitment is in effect and until payment in full of all principal of and interest on each Loan and all fees, expenses and other amounts (other than contingent amounts
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not yet due) payable under any Credit Document and cancellation or expiration of all Letters of Credit, such Credit Party shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.
6.1 Indebtedness. No Credit Party shall, nor
shall it permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except:
(a) the Obligations;
(b) Senior Notes in an aggregate principal amount not to exceed
$4,350,000,000;
(c) Indebtedness of any Subsidiary of Borrower to
Borrower or any other such Subsidiary or of Borrower to any of its Subsidiaries; provided that (i) all such Indebtedness, if owed to a Credit Party, shall be evidenced by the Intercompany Note or another promissory note and shall be
subject to a First Priority Lien pursuant to the applicable Collateral Document, (ii) all such Indebtedness owing by a Credit Party to a Subsidiary that is not a Credit Party shall be unsecured and subordinated in right of payment to the
payment in full of the Obligations pursuant to the terms of a subordination agreement with respect to such Indebtedness substantially in the form of Exhibit J-2 among the Credit Parties and such Subsidiaries party to such Indebtedness and
(iii) in respect of any Indebtedness owing by a Subsidiary that is not a Credit Party to a Credit Party, such Indebtedness is permitted as an Investment under the proviso to Section 6.6(d);
(d) Indebtedness incurred by Borrower or any of its Subsidiaries arising from
agreements providing for indemnification, adjustment of purchase price or similar obligations (including Indebtedness consisting of the deferred purchase price of property acquired in a Permitted Acquisition) or from guaranties or letters of credit,
surety bonds, performance bonds or similar obligations securing the performance of Borrower or any such Subsidiary pursuant to such agreements, in connection with Permitted Acquisitions or permitted dispositions of any business, assets or Subsidiary
of Borrower or any of its Subsidiaries;
(e) Indebtedness which may be
deemed to exist pursuant to any guaranties, performance, surety, statutory, appeal or similar obligations incurred in the ordinary course of business;
(f) Indebtedness in respect of netting services, overdraft protections and
otherwise in connection with deposit accounts;
(g) guaranties in the
ordinary course of business of the obligations of suppliers, customers, franchisees of and licensees to and of Borrower and its Subsidiaries;
(h) guaranties by Borrower of Indebtedness of a Subsidiary of Borrower or
guaranties by a Subsidiary of Borrower of Indebtedness of Borrower or any other such Subsidiary, in each case with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.1; provided that (i) if the
Indebtedness that is being guarantied is unsecured and/or subordinated to the Obligations, the guaranty thereof shall be unsecured and/or subordinated to the Obligations to the same extent and (ii) in respect of any guaranty by a Credit Party
of Indebtedness of a Subsidiary that is not a Credit Party, such guaranty is permitted as an Investment under Section 6.6(d);
(i) Indebtedness described in Schedule 6.1 (other than Indebtedness described
in clauses (a) or (b) of this Section 6.1);
(j)
Indebtedness of Borrower or its Subsidiaries with respect to Capital Leases or purchase money Indebtedness in an aggregate principal amount at any time outstanding not to exceed the greater of (x) $50,000,000 and (y) 1.00% of Consolidated
Total Assets; provided, any such Indebtedness shall be secured only by the asset acquired in connection with the incurrence of such Indebtedness;
(k) Indebtedness of a Person or Indebtedness attaching to assets of a Person
that, in either case, becomes a Subsidiary of Borrower or Indebtedness attaching to assets that are acquired by Borrower or any
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of its Subsidiaries, in each case after the Third Restatement Date; provided that (x) on a Pro Forma Basis (including, for the avoidance of doubt, Subordinated Indebtedness) after
giving effect to the incurrence of such Indebtedness (including the use of proceeds thereof), the Leverage Ratio of Borrower shall be less than or equal to 5.25 to 1.00, as of the last day of the most recently ended Fiscal Quarter for which
financial statements were required to have been delivered pursuant to Section 5.1(a) or (b), (y) such Indebtedness existed at the time such Person became a Subsidiary or at the time such assets were acquired and, in each case, was not
created in anticipation thereof and (z) such Indebtedness is not guaranteed in any respect by Borrower or any Subsidiary (other than by any such Person that so becomes a Subsidiary);
(l) Indebtedness representing the deferred purchase price of property
(including Intellectual Property) or services, including earn-out obligations, purchase price adjustments, escrow arrangements or other arrangements representing deferred payments incurred in connection with the acquisition of equity or assets
permitted or consented to hereunder;
(m) (i) Indebtedness under any
Hedge Agreement (and any guarantees thereof), (ii) Indebtedness under any Cash Management Agreement (and any guarantees thereof) and (iii) Indebtedness arising under any Currency Agreement or Interest Rate Agreement (and, in each case, any
guarantees thereof), including any extensions thereof and such increases, if any, as shall result when the underlying obligations of such agreements are marked to market or increased to address accrued interest on the obligation relating to such
agreement; provided, that, with respect to Indebtedness under Hedge Agreements, Interest Rate Agreements or Currency Agreements (or Guarantees thereof), such Indebtedness is entered into in the ordinary course of business and not for
speculative purposes;
(n) Indebtedness in respect of performance and
surety bonds and completion guarantees provided by Borrower or any of its Subsidiaries;
(o) Indebtedness of Borrower or any Subsidiary as an account party in respect
of trade letters of credit;
(p) other Indebtedness (including, for the
avoidance of doubt, Subordinated Indebtedness) of Borrower or any Guarantor in an aggregate principal amount not to exceed $750,000,000; provided that no Indebtedness may be incurred pursuant to this clause (p) from and after April 1,
2016;
(q) other Indebtedness (including, for the avoidance of doubt,
Subordinated Indebtedness) of Borrower or any Guarantor; provided that on a Pro Forma Basis after giving effect to the incurrence of such Indebtedness (including the use of proceeds thereof including, without limitation, after the date of
incurrence or issuance of any such Indebtedness pursuant to any escrow arrangement, delayed draw, delayed closing or similar or analogous arrangement), (x) no Default or Event of Default has occurred and is continuing or would result therefrom
and (y) the Leverage Ratio of Borrower and its Subsidiaries shall be less than or equal to 5.25 to 1.00, as of the last day of the most recently ended Fiscal Quarter for which financial statements were required to have been delivered
pursuant to Section 5.1(a) or (b);
(r) provided that no
Default or Event of Default has occurred and is continuing or would result therefrom, the incurrence or issuance by Borrower or any Subsidiary of Borrower of Indebtedness which serves to extend, replace, refund, renew, defease or refinance any
Indebtedness incurred as permitted under clause (b), (i), (j), (k), (r), (s) or (v) of this Section 6.1 or any Indebtedness issued to so extend, replace, refund, renew, defease or refinance such Indebtedness, or any Indebtedness,
including additional Indebtedness, incurred to pay premiums (including tender premiums), defeasance costs and fees and expenses in connection therewith (the Refinancing Indebtedness); provided, however, that such
Refinancing Indebtedness:
(1) has a final maturity date later than the
date that is 91 days after the latest Term Loan Maturity Date, and has a weighted average life to the date of the latest Term Loan Maturity Date that is not less than the weighted average life to the date of the latest Term Loan Maturity Date of the
Indebtedness being extended, replaced, renewed, defeased, refunded or refinanced,
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(2) to the extent such
Refinancing Indebtedness extends, replaces, refunds, renews, defeases or refinances (x) Indebtedness subordinated or pari passu to the Obligations, such Refinancing Indebtedness is subordinated or pari passu to the Obligations at least to the
same extent (as determined in good faith by the board of directors of Borrower) as the Indebtedness being extended, replaced, renewed, defeased, refinanced or refunded or (y) Disqualified Equity Interests such Refinancing Indebtedness must be
Disqualified Equity Interests,
(3) shall have direct and contingent
obligors that are the same as (or, in the case of contingent obligors, no more expansive than) the direct and contingent obligors, respectively, of the refinanced Indebtedness, or
(4) shall not be secured by any assets that were not required to be used to
secure the Indebtedness being extended, replaced, renewed, defeased, refunded or refinanced;
(s) Permitted Secured Notes;
(t) Indebtedness owed to any Person (including obligations in respect of
letters of credit for the benefit of such Person) providing workers compensation, health, death, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness regarding
workers compensation claims pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;
(u) Indebtedness of Borrower or any of its Subsidiaries consisting of
(x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, incurred in the ordinary course of business;
(v) Indebtedness of Subsidiaries of Borrower (other than Biovail Insurance and
any other such Subsidiary that is not permitted by Applicable Law to guaranty the Obligations) that are not Credit Parties and that are organized under the laws of any jurisdiction other than the United States of America consisting of working
capital credit facilities in an aggregate principal amount at any time outstanding under this clause (v) not to exceed the greatest of (i) 2.5% of the consolidated total revenues for the four Fiscal Quarter period most recently ended,
(ii) 2.5% of the consolidated total assets, as determined in accordance with GAAP, as of the applicable date of determination, in each case of subclause (i) and (ii), of all Subsidiaries of Borrower (other than Biovail Insurance and any
other such Subsidiary that is not permitted by Applicable Law to guaranty the Obligations) that are not Credit Parties, and (iii) $40,000,000;
(w) the Bausch & Lomb Unsecured Debt; and
(x) the Sun Unsecured Debt.
6.2 Liens. No Credit Party shall, nor shall it permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset of any kind (including any document or instrument in respect of goods or accounts receivable) of Borrower or any of its
Subsidiaries, whether now owned or hereafter acquired, or any income, profits or royalties therefrom, or file or permit the filing of any financing statement or other similar notice of any Lien with respect to any such property, asset, income,
profits or royalties under the UCC of any State, the PPSA of any province or territory or under any similar recording or notice statute of jurisdictions in which Credit Parties are organized or under any applicable intellectual property laws, rules
or procedures, except:
(a) Liens in favor of Collateral Agent for the
benefit of Secured Parties granted pursuant to any Credit Document;
(b)
Liens for Taxes not yet due and payable or that are being contested in accordance with Section 5.3;
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(c) statutory Liens of landlords,
banks (and rights of set-off), of carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens imposed by law (other than any such Lien imposed pursuant to Section 430(k) of the Internal Revenue Code or ERISA or a
violation of Section 436 of the Internal Revenue Code or, in respect of a Canadian Credit Party, a Lien imposed pursuant to pension benefits standards legislation; provided that, in each case, such Liens shall be governed by Sections
5.1(g), 5.1(h), 8.1(j) and 8.1(k) and not this Section 6.2), in each case incurred in the ordinary course of business (i) for amounts not yet overdue or (ii) for amounts that are overdue and that (in the case of any such amounts
overdue for a period in excess of five days) are being contested in good faith by appropriate proceedings, so long as such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested
amounts;
(d) Liens incurred in the ordinary course of business in
connection with workers compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money or other Indebtedness), so long as no foreclosure, sale or similar proceedings have been commenced with respect to any
portion of the Collateral on account thereof;
(e) easements, rights of
way, restrictions, encroachments, encumbrances and other minor defects or irregularities in title, in each case which do not and will not interfere in any material respect with the ordinary conduct of the business of Borrower or any of its
Subsidiaries;
(f) any interest or title of a lessor, lessee, sublessor or
sublessee under any lease or sublease permitted hereunder and any interest or title of a licensor, licensee, sublicensor or sublicensee under any license or sublicense permitted hereunder;
(g) Liens solely on any cash earnest money deposits, escrow arrangements or
similar arrangements made by Borrower or any of its Subsidiaries in connection with any letter of intent or purchase agreement permitted hereunder;
(h) purported Liens evidenced by the filing of precautionary UCC or PPSA
financing statements (or any similar precautionary filings) relating solely to operating leases of personal property entered into in the ordinary course of business;
(i) Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection with the importation of goods;
(j) any zoning or similar law or right reserved to or vested in any
Governmental Authority to control or regulate the use of any real property;
(k) outbound licenses of patents, copyrights, trademarks and other
Intellectual Property rights granted by Borrower or any of its Subsidiaries in the ordinary course of business and not interfering in any material respect with the ordinary conduct of, or materially detracting from the aggregate value of, the
business of Borrower or such Subsidiary (taking into account the value of the license as well);
(l) Liens described in Schedule 6.2 or on a title report delivered pursuant to
Section 3.1(e)(iii) of the Original Credit Agreement and any modifications, renewals and extensions thereof and any Lien granted as a replacement or substitute therefor; provided that (x) such Lien shall not apply to any other
property or asset of Borrower or any Subsidiary other than improvements thereon or proceeds from the disposition of such asset and (y) such Lien shall secure only those obligations which it secures on the date hereof and any refinancing,
extensions, renewals or replacements thereof that do not increase the outstanding principal amount thereof (except by an amount not greater than accrued and unpaid interest with respect to such original obligations and any premium, fees, costs and
expenses incurred in connection with such extension, renewal or refinancing) and, in the case of any such obligations constituting Indebtedness, that are permitted under Section 6.1(r) as Refinancing Indebtedness in respect thereof;
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(m) Liens securing Indebtedness
permitted pursuant to Section 6.1(j) (and any Refinancing Indebtedness in respect thereof permitted under Section 6.1(r)); provided, any such Lien shall encumber only the asset acquired with the proceeds of such Indebtedness;
(n) Liens securing Indebtedness permitted by Sections 6.1(k) (and any
Refinancing Indebtedness in respect thereof permitted under Section 6.1(r)), provided any such Lien shall encumber only those assets which secured such Indebtedness at the time such assets were acquired by Borrower or its Subsidiaries;
(o) other Liens on assets other than the Collateral securing obligations
in an aggregate principal amount not to exceed 1.25% of Consolidated Total Assets at any time outstanding;
(p) Liens securing Indebtedness permitted by Section 6.1(m);
(q) Liens arising out of judgments, decrees, orders or awards that do not
constitute an Event of Default under Section 8.1(h);
(r) Liens
securing Indebtedness permitted by Sections 6.1(q) and (s); provided that either (x) on a Pro Forma Basis after giving effect to the incurrence of such Indebtedness (and the use of proceeds thereof) Borrower and its Subsidiaries shall be
in compliance with each of the covenants set forth in Section 6.7 as of the last day of the most recently ended Fiscal Quarter, as if such Indebtedness had been outstanding on the last day of such Fiscal Quarter or (y) the Cash proceeds of
Indebtedness secured by such Liens are applied to prepay Term Loans in accordance with Section 2.15;
(s) Liens on assets of any Subsidiary of Borrower (other than Biovail
Insurance and any other such Subsidiary that is not permitted by Applicable Law to guaranty the Obligations) that is not a Credit Party and that is organized in a jurisdiction other than the United States of America to the extent such Liens secure
Indebtedness of such Subsidiary permitted under Section 6.1(v);
(t)
Liens granted by any Canadian Credit Party to a landlord to secure the payment of rent and other obligations under a lease with such landlord for premises situated in the Province of Québec; provided that such Lien (i) is limited
to the tangible assets located at or about such leased premises and (ii) is incurred in the ordinary course of business (a) for amounts not yet overdue or (b) for amounts that are overdue and that (in the case of any such amounts
overdue for a period in excess of five days) are being contested in good faith by appropriate proceedings, so long as such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested
amounts;
(u) Liens arising by reason of deposits necessary to obtain
standby letters of credit in the ordinary course of business;
(v) Liens
in connection with repurchase obligations referred to in clause (vi) of the definition of the term Cash Equivalents;
(w) in connection with the sale or transfer of any Equity Interests or other
assets in a transaction permitted by Section 6.8, customary rights and restrictions contained in agreements relating to such sale or transfer pending the completion thereof;
(x) in the case of any Joint Venture, any put and call arrangements related to
its Equity Interests set forth in its Organizational Documents or any related joint venture or similar agreement;
(y) Liens in the nature of the right of setoff in favor of counterparties to
contractual agreements with Borrower or any of its Subsidiaries in the ordinary course of business; and
(z) Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business.
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provided, however, that no reference herein to Liens permitted hereunder (including Permitted
Liens), including any statement or provision as to the acceptability of any Liens (including Permitted Liens), shall in any way constitute or be construed as to provide for a subordination of any rights of the Agents, Lenders or other Secured
Parties hereunder or arising under any of the other Credit Documents in favor of such Liens.
6.3 No Further Negative Pledges. Except with respect to (a) specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant to an executed agreement with respect to a permitted Asset Sale or other sale or disposition permitted by Section 6.8, (b) restrictions by reason of customary
provisions restricting assignments, subletting or other transfers contained in leases, licenses, agreements in connection with a Permitted Majority Investment, Joint Venture agreements and similar agreements entered into in the ordinary course of
business (provided that such restrictions are limited to the property or assets secured by such Liens or the property or assets subject to such Liens or the property or assets subject to such leases, licenses, agreements in connection with a
Permitted Majority Investment, Joint Venture agreements and similar agreements, as the case may be), (c) restrictions and conditions imposed by law, and (d) restrictions identified on Schedule 6.3, no Credit Party nor any of its
Subsidiaries shall enter into any agreement prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired, to secure the Obligations.
6.4 Restricted Junior Payments. No Credit Party shall, nor shall it permit any of its
Subsidiaries through any manner or means or through any other Person to, directly or indirectly, declare, order, pay, make or set apart, or agree to declare, order, pay, make or set apart, any sum for any Restricted Junior Payment except for:
(a) the declaration and payment of dividends or the making of other
distributions by any Subsidiary of Borrower ratably to its direct equity holders;
(b) the redemption, repurchase, retirement, defeasance or other acquisition of
any Equity Interests, including any accrued and unpaid dividends thereon, or Subordinated Indebtedness of Borrower or any Equity Interests of any direct or indirect parent company of Borrower, in exchange for, or out of the proceeds of, the
substantially concurrent sale (other than to a Subsidiary) of, Equity Interests of Borrower or any direct or indirect parent company of Borrower to the extent contributed to Borrower (in each case, other than any Disqualified Equity Interests) or
Subordinated Indebtedness incurred under Section 6.1; provided that any such Subordinated Indebtedness shall be Refinancing Indebtedness;
(c) refinancings of Indebtedness permitted by Section 6.1;
(d) any Restricted Junior Payment to pay for the repurchase, retirement or
other acquisition or retirement for value of Equity Interests (other than Disqualified Equity Interests) of Borrower held by any future, present or former employee, director, officer or consultant of Borrower or any of its Subsidiaries or any direct
or indirect parent companies pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement (including, for the avoidance of doubt, any principal and interest payable on any notes issued by
Borrower or any direct or indirect parent company of Borrower in connection with any such repurchase, retirement or other acquisition), or any stock subscription or shareholder agreement, including any Equity Interest rolled over by management of
Borrower or any direct or indirect parent company of Borrower in connection with the 2010 Transactions; provided, that the aggregate amount of Restricted Junior Payments made under this clause (d) shall not exceed in any calendar year
$25,000,000 (with unused amounts for any year being carried over to the next succeeding year, but not to any subsequent year, and the permitted amount for each year shall be used prior to any amount carried over from the previous year);
provided further that such amount in any calendar year may be increased by an amount not to exceed:
(i) the cash proceeds of key man life insurance policies received by Borrower
or its Subsidiaries after the Original Closing Date; less
(ii)
the amount of any Restricted Junior Payments previously made with the cash proceeds described in subclause (i) of this clause (d);
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(e) cashless repurchases of
Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;
(f) cash payments in lieu of issuing fractional shares in connection with the
exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests of Borrower or any direct or indirect parent company of Borrower;
(g) so long as no Default or Event of Default has occurred and is continuing,
(i) Borrower may repurchase shares of Borrowers common stock within six months before or after any conversion date for Borrower Convertible Notes, which repurchases may be in an aggregate amount not to exceed the number of shares of
Borrowers common stock delivered upon conversion of Borrower Convertible Notes on such conversion date and (ii) Borrower may repurchase shares of Borrowers common stock within six months before or after the settlement of any written
call option agreements entered into in connection with the issuance of the VPI Convertible Notes, which repurchases may be in an aggregate amount not to exceed the number of shares of Borrowers common stock delivered upon settlement of such
written call options;
(h) other Restricted Junior Payments in an
aggregate amount taken together with all other Restricted Junior Payments made pursuant to this clause (h) not to exceed $350,000,000 (reduced on a dollar for dollar basis by outstanding Investments pursuant to clause (i) of
Section 6.6, other than Investments under such clause made using the CNI Growth Amount) at any time outstanding from and after the Amendment No. 6 Effective Date; provided that such amount shall be increased (but not decreased) by
the CNI Growth Amount as in effect immediately prior to the time of making of such Restricted Junior Payment; and
(i) Restricted Junior Payments in connection with the Pre-Merger Special
Dividend and/or the Post-Merger Special Dividend in an aggregate amount not to exceed $10,000,000.
6.5 Restrictions on Subsidiary Distributions. Except as provided herein, no Credit
Party shall, nor shall it permit any of its Subsidiaries to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Subsidiary of Borrower to (a) pay
dividends or make any other distributions on any of such Subsidiarys Equity Interests owned by Borrower or any other Subsidiary of Borrower, (b) repay or prepay any Indebtedness owed by such Subsidiary to Borrower or any other Subsidiary
of Borrower, (c) make loans or advances to Borrower or any other Subsidiary of Borrower, or (d) transfer, lease or license any of its property or assets to Borrower or any other Subsidiary of Borrower other than restrictions
(i) imposed by law or by any Credit Document, (ii) in agreements evidencing Indebtedness permitted by Section 6.1(k) that impose restrictions on the property so acquired, and any amendments, modifications, extensions or renewals
thereof (including any such extension or renewal arising as a result of an extension, renewal or refinancing of any Indebtedness containing such restriction or condition) that do not materially expand the scope of any such restriction or condition
taken as a whole, (iii) by reason of customary provisions restricting assignments, subletting or other transfers contained in leases, licenses, Joint Venture agreements and similar agreements entered into in the ordinary course of business,
(iv) that are or were created by virtue of any transfer of, agreement to transfer or option or right with respect to any property, assets or Equity Interests not otherwise prohibited under this Agreement, (v) in the case of any Subsidiary
that is not directly or indirectly wholly owned by Borrower, restrictions and conditions imposed by its Organizational Documents or any related joint venture, shareholders or similar agreement; provided that such restrictions and
conditions apply only to such Subsidiary and to any Equity Interests in such Subsidiary, or (vi) identified on Schedule 6.5, and any amendments, modifications, extensions or renewals thereof (including any such extension or renewal arising as a
result of an extension, renewal or refinancing of any Indebtedness containing such restriction or condition) that do not materially expand the scope of any such restriction or condition taken as a whole.
6.6 Investments. No Credit Party shall, nor shall it permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any Joint Venture, except:
(a) Investments in Cash and Cash Equivalents;
(b) equity Investments owned as of the Third Restatement Date in any
Subsidiary and Investments made after the Third Restatement Date in any Guarantor;
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(c) Investments (i) received
in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business and (ii) consisting of deposits, prepayments and other
credits to suppliers made in the ordinary course of business consistent with the past practices of Borrower or any of its Subsidiaries, as applicable;
(d) intercompany loans and advances to the extent permitted under
Section 6.1(c) and other Investments (i) in (including Guarantees of Indebtedness of) any Credit Party and (ii) in (including (without duplication for purposes of the proviso to this clause (ii)) Guarantees of Indebtedness of)
Subsidiaries of Borrower which are not Guarantors; provided that such Investments under this clause (ii) shall not exceed at any one time outstanding an aggregate amount of 4.0% of Consolidated Total Assets;
(e) Permitted Interim Investments and intercompany loans and advances and
capital contributions by Credit Parties to Subsidiaries that are not Credit Parties in connection with any Permitted Interim Investment; provided, that, for the avoidance of doubt, the acquisition of the remaining Equity Interests of a Person
such that such Person becomes a wholly owned Subsidiary of Borrower shall either (x) be subject to the provisions of Section 6.8(h) or (y) be made pursuant to and in compliance with Section 6.6(d)(ii) or 6.6(i);
(f) loans and advances to employees of Borrower and its Subsidiaries made in
the ordinary course of business in an aggregate principal amount not to exceed $25,000,000;
(g) Permitted Acquisitions permitted under Section 6.8;
(h) Investments described in Schedule 6.6 and any modification, replacement,
renewal or extension thereof to the extent not involving an additional Investment;
(i) (a) other Investments in an aggregate amount not to exceed
$350,000,000 (reduced on a dollar for dollar basis by Restricted Junior Payments pursuant to clause (h) of Section 6.4, other than Restricted Junior Payments under such clause made using the CNI Growth Amount) at any time outstanding from
and after the Amendment No. 6 Effective Date; provided that such amount shall be increased (but not decreased) by the CNI Growth Amount as in effect immediately prior to the time of making of such Investments and (b) Investments in
Pele Nova Biotecnologia S.A. at any time outstanding not to exceed $8,000,000;
(j) Investments represented by (i) any Hedge Agreement (and any
guarantees thereof), (ii) any Cash Management Agreement (and any guarantees thereof) and (iii) any Interest Rate Agreement or Currency Agreement (and any guarantees thereof); provided, that, with respect to Indebtedness under Hedge
Agreements for Interest Rate Agreements or Currency Agreements (or Guarantees thereof), such Indebtedness is entered into in the ordinary course of business and not for speculative purposes;
(k) Investments received in connection with the disposition of any asset
permitted by Section 6.8;
(l) Investments (which may take the form
of asset contributions) in (x) Joint Ventures consisting primarily of a Prescription Drug Business, (y) Joint Ventures involving aesthetic product lines of Borrower or its Subsidiaries and consisting of any or all of the Sculptra, Succeev,
Artesense, Selphyl, Viscountour, Renova, Kinerase and Refissa products, and/or (z) Joint Ventures (in addition to those described in clauses (x) and (y)) in an aggregate amount not exceeding 1.50% of Consolidated Total Assets in any
calendar year (with unused amounts for any year being carried over to the next succeeding year, but not to any subsequent year, and the permitted amount for each year shall be used prior to any amount carried over from the previous year);
(m) Investments of any Person existing at the time such Person becomes a
Subsidiary of Borrower or consolidates or merges with Borrower or any of its Subsidiaries (including in connection with a
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Permitted Acquisition) and any modification, replacement, renewal or extension thereof to the extent not involving an additional Investment so long as such Investments were not made in
contemplation of such Person becoming a Subsidiary of Borrower or of such consolidation or merger;
(n) extensions of trade credit in the ordinary course of business; and
(o) Investments in the capital stock of non-wholly owned Subsidiaries in
jurisdictions where Applicable Law does not permit Borrower to own 100% of the capital stock of such Subsidiary; provided that, Borrower or one or more of its wholly owned Subsidiaries owns more than 50% of such capital stock and the
aggregate amount of Investments made pursuant to this subclause (o) shall not exceed $150,000,000 per annum (with unused amounts in any calendar year permitted to be carried over to the next succeeding calendar year, but not to any subsequent
year, and the amount permitted pursuant to this subclause (o) being used prior to the use of any unused amount carried over from the previous year) (all such Investments pursuant to this subclause (o) Permitted Majority
Investments).
Notwithstanding the foregoing, in no event shall any Credit Party make any Investment which results in or facilitates in any
manner any Restricted Junior Payment not otherwise permitted under the terms of Section 6.4.
6.7 Financial Covenants.
(a) Interest Coverage Ratio. Borrower shall not permit the Interest Coverage Ratio as
of the last day of any Fiscal Quarter, beginning with the Fiscal Quarter ending December 31, 2014, to be less than (i) 2.25:1.00 through the Fiscal Quarter ending March 31, 2016 and (ii) 3.00:1.00 thereafter.
(b) Secured Leverage Ratio. Borrower shall not permit the Secured Leverage Ratio as of
the last day of (i) the Fiscal Quarter ending December 31, 2011, to exceed 1.75 to 1.0 and (ii) any subsequent Fiscal Quarter, beginning with Fiscal Quarter ending March 31, 2012, to exceed 2.50 to 1.0.
6.8 Fundamental Changes; Disposition of Assets; Acquisitions. No Credit Party shall,
nor shall it permit any of its Subsidiaries to, enter into any transaction of merger, amalgamation, arrangement, reorganization or consolidation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or license, exchange, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any part of its business, assets or property of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, whether now owned or hereafter acquired, leased or licensed, or acquire by purchase or otherwise (other than purchases or other acquisitions of inventory, materials and equipment and capital expenditures in the ordinary course of
business) the business or fixed assets of, or stock or other evidence of beneficial ownership of, any Person or any division or line of business or other business unit of any Person, except:
(a) any Subsidiary of Borrower may be (i) merged or amalgamated with or
merged into Borrower or any other Subsidiary of Borrower; provided that (A) in the case of such a merger or amalgamation involving Borrower, Borrower shall be the surviving Person or a Person that continues as an amalgamated corporation
and (B) in the case of such a merger or amalgamation involving any other Guarantor (and not involving Borrower), the surviving Person, or a Person that continues as an amalgamated corporation, shall be a Guarantor; provided
further that, in the case of this clause (B), solely for the purpose of internal corporate tax restructuring, it is understood that any Guarantor may merge or amalgamate with a non-Guarantor Subsidiary so long as (x) such non-Guarantor
Subsidiary merges or amalgamates with the Borrower or a Guarantor substantially simultaneous with, or no longer than one Business Day after the internal merger or amalgamation involving a Guarantor, with the surviving person, or the Person that
continues as an amalgamated corporation from such subsequent merger or amalgamation being the Borrower or a Guarantor, and (y) the Borrower shall certify to the Administrative Agent on the date of any such merger or amalgamation that such
merger or amalgamation shall comply with this Section 6.8(a), or (ii) other than with respect to Borrower, liquidated, wound up or dissolved if Borrower determines in good faith that such liquidation, winding up or dissolution is in the
best interest of Borrower and is not materially disadvantageous to the Lenders;
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(b) sales or other dispositions
of assets or property that do not constitute Asset Sales (which sales or other dispositions may take the form of a merger, amalgamation or similar transaction);
(c) Asset Sales (which Asset Sale may take the form of a merger, amalgamation
or similar transaction), the proceeds of which (valued at the principal amount thereof in the case of non-Cash proceeds consisting of notes or other debt Securities and valued at fair market value in the case of other non-Cash proceeds) when
aggregated with the proceeds of all other Asset Sales made within the same Fiscal Year, are less than 4.00% of Consolidated Total Assets (with the amount for any Fiscal Year increased by an amount equal to the excess, if any, of such amount
for the immediately preceding Fiscal Year over the amount of proceeds from Asset Sales made pursuant to this clause (c) in such immediately preceding Fiscal Year); provided that (1) the consideration received for such assets shall
be in an amount at least equal to the fair market value thereof (determined in good faith by the board of directors of Borrower (or similar governing body) of Borrower or the applicable Subsidiary or Credit Party for Asset Sales with a fair market
value in excess of $75,000,000), (2) no less than 75% thereof shall be paid in Cash, and (3) the Net Asset Sale Proceeds thereof shall be applied as required by Section 2.14(a);
(d) Asset Sales consisting of obsolete, worn out or surplus assets or
property, including, for greater certainty, Intellectual Property;
(e)
Asset Sales consisting of sale and leaseback transactions permitted by Section 6.10; provided that the Net Asset Sale Proceeds in excess of $50,000,000 from any such Asset Sale shall be applied as required by Section 2.14(a);
(f) Specified Asset Disposition; provided that the Net Asset Sale
Proceeds thereof shall be applied as required by Section 2.14(a);
(g)
Asset Sales of property to the extent that (i) such property is concurrently exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Asset
Sales are promptly applied to the purchase price of such replacement property;
(h) Permitted Acquisitions (which acquisition may take the form of a merger,
amalgamation or similar transaction so long as such merger, amalgamation or similar transaction would be permitted by clause (a) of this Section 6.8 if the acquired Person was, initially, a Subsidiary of Borrower); provided that
(x) in respect of acquisitions of assets that are not or have not become subject to the Collateral Documents and/or acquisitions of Equity Interests of Persons (other than Excluded Subsidiaries) that do not become Guarantors or are not owned by
a Credit Party, the consideration (other than Equity Interests of Borrower issued in payment of a portion of such consideration and the net proceeds of the issuance of Equity Interests of Borrower to the extent used to pay a portion of such
consideration) shall not exceed, collectively with any Investments then outstanding under Section 6.6(d)(ii) in Persons other than Credit Parties (without duplication of any such Investments then outstanding under Section 6.6(d)(ii)), 4.0%
of Consolidated Total Assets per Fiscal Year and (y) immediately prior to such Permitted Acquisition and on a Pro Forma Basis after giving effect thereto, Borrower and its Subsidiaries shall be in compliance with each of the covenants set forth
in Section 6.7 as of the last day of the most recently ended Fiscal Quarter;
(i)
Investments made in accordance with Section 6.6, other than pursuant to clause (g) thereof (which Investment may take the form of a merger, amalgamation or similar transaction so long as such
merger, amalgamation or similar transaction would be permitted by clause (a) of this Section 6.8 if the acquired Person was, initially, a Subsidiary of Borrower);
(j) Liens incurred in compliance with Section 6.2;
(k) dispositions of investments in Joint Ventures, to the extent required by,
or made pursuant to buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding arrangements; provided that the consideration received shall be in an amount at least equal to the fair
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market value thereof (determined in good faith by the board of directors of Borrower; provided that any Net Asset Sale Proceeds from any such disposition shall be applied as required by
Section 2.14(a);
(l) the disposition by Dow Pharmaceutical Sciences,
Inc. of its Equity Interests in Bioskin GmbH, a company with limited liability organized under the laws of Germany; provided that any Net Asset Sale Proceeds from any such disposition shall be applied as required by Section 2.14(a);
(m) Asset Sales in connection with any Acquisition or the Bausch &
Lomb Acquisition, for regulatory reasons; provided that any Net Asset Sale Proceeds therefrom shall be applied as required by Section 2.14(a);
(n) the Acquisitions; and
(o) Asset Sales by Sanitas AB of real property; provided that any Net
Asset Sale Proceeds from any such disposition shall be applied as required by Section 2.14(a).
For purposes of clause (c) of
this Section 6.8, each of the following will be deemed Cash:
(i) any
liabilities, as shown on Borrowers most recent consolidated balance sheet, of Borrower or any of its Subsidiaries (other than contingent liabilities and liabilities that are by their terms subordinated to the Loans) that are assumed by the
transferee of any such assets pursuant to an agreement that releases Borrower or such Subsidiary from further liability;
(ii) any securities, notes or other obligations received by Borrower or any
such Subsidiary from such transferee that are converted by Borrower or such Subsidiary into Cash within 180 days after the consummation of the applicable Asset Sale, to the extent of the Cash received in that conversion; and
(iii) any Designated Noncash Consideration having an aggregate fair market
value that, when taken together with all other Designated Noncash Consideration previously received and then outstanding, does not exceed at the time of the receipt of such Designated Noncash Consideration (with the fair market value of each item of
Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value) the greater of $100,000,000 or 1.00% of Consolidated Total Assets.
6.9 Disposal of Subsidiary Interests. Except for any sale of all of its interests in
the Equity Interests of any of its Subsidiaries in compliance with the provisions of Section 6.8, no Credit Party shall, nor shall it permit any of its Subsidiaries to directly or indirectly sell, assign, pledge or otherwise encumber or dispose
of any Equity Interests of any of its Subsidiaries, except to another Credit Party (subject to the restrictions on such disposition otherwise imposed hereunder), or to qualify directors if required by Applicable Law.
6.10 Sales and Leasebacks. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, become or remain liable as lessee or as a guarantor or other surety with respect to any lease of any property (whether real, personal or mixed), whether now owned or hereafter acquired, which such Credit
Party (a) has sold or transferred or is to sell or to transfer to any other Person (other than Borrower or any of its Subsidiaries), or (b) intends to use for substantially the same purpose as any other property which has been or is to be
sold or transferred by such Credit Party to any Person (other than Borrower or any of its Subsidiaries) in connection with such lease, except for any such sale and subsequent lease of any fixed or capital assets by a Credit Party or any of its
Subsidiaries that is made for Cash consideration in an amount not less than the fair value of such fixed or capital asset and is consummated within 90 days after such Credit Party or such Subsidiary acquires or completes the construction of such
fixed or capital asset, provided that, if such sale and leaseback results in Indebtedness with respect to Capital Leases, such Indebtedness is permitted by Section 6.1(j) and any Lien made the subject of such Indebtedness is permitted by
Section 6.2(m).
6.11 Transactions with Shareholders and Affiliates. No Credit
Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale,
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lease or exchange of any property or the rendering of any service) with any Affiliate of Borrower on terms that are less favorable to Borrower or that Subsidiary, as the case may be, than those
that might be obtained at the time from a Person who is not such an Affiliate; provided that the foregoing restriction shall not apply to (a) any transaction between or among Borrower and the Guarantors; (b) reasonable and customary
fees paid to members of the board of directors (or similar governing body) of Borrower or of its Subsidiaries; (c) compensation arrangements (including severance arrangements to the extent approved by a majority of the disinterested members of
Borrowers or the applicable Subsidiarys board of directors (or similar governing body) or the applicable committee thereof) for present or former officers and other employees of Borrower or of its Subsidiaries entered into in the
ordinary course of business; (d) transactions described in Schedule 6.11; (e) any Restricted Junior Payment permitted pursuant to Section 6.4; (f) indemnities provided for the benefit of, directors, officers or employees of
Borrower or of its Subsidiaries in the ordinary course of business; and (g) loans and advances to employees of Borrower or of its Subsidiaries permitted by Section 6.6(f) (as well as advances to employees contemplated by clause
(iii) of the defined term Investment).
6.12 Conduct of Business.
From and after the Third Restatement Date, no Credit Party shall, nor shall it permit any of its Subsidiaries to, engage in any business other than (i) the businesses engaged in by such Credit Party or Subsidiary on the Third Restatement Date
and similar or related or ancillary businesses and (ii) such other lines of business as may be consented to by Requisite Lenders.
6.13 Amendments or Waivers with Respect to Subordinated Indebtedness. No Credit Party
shall, nor shall it permit any of its Subsidiaries to, amend or otherwise change the terms of any Subordinated Indebtedness, if such amendment or change would be materially adverse to any Credit Party or Lenders.
6.14 Amendments or Waivers of Organizational Documents. No Credit Party shall, nor
shall it permit any of its Subsidiaries to, agree to any amendment, restatement, supplement or other modification to, or waiver of, any of its Organizational Documents after the Third Restatement Date that is materially adverse to such Credit Party
or such Subsidiary, as applicable, and to the Lenders.
6.15 Fiscal Year. No Credit
Party shall, nor shall it permit any of its Subsidiaries to, change its Fiscal Year end from December 31.
6.16
Specified Subsidiary Dispositions. Borrower will not, and will not permit any Subsidiary to, sell, transfer, lease or otherwise dispose of the Equity Interests it holds in Biovail Insurance.
6.17 Biovail Insurance. Borrower will not permit Biovail Insurance to (i) carry on
any business other than the business of an Exempt Insurance Company as defined under the Exempt Insurance Act of Barbados for the purpose of insuring Borrower and/or some or all of its Subsidiaries or (ii) cancel, terminate or otherwise amend
or modify the Biovail Insurance Trust Indenture.
6.18 Establishment of Defined Benefit
Plan. No Credit Party shall (a) sponsor, administer, maintain, contribute to, participate in or assume or incur any liability in respect of, any Defined Benefit Plan, or (b) acquire an interest in any Person if such Person sponsors,
administers, maintains, contributes to, participates in or has any liability in respect of, any Defined Benefit Plan, other than, with respect to clauses (a) and (b), Defined Benefit Plans that do not, in the aggregate, have a solvency deficit
in excess of $10,000,000 at any time.
7.1 Guaranty of the
Obligations. Subject to the provisions of the Contribution Agreement, Guarantors jointly and severally hereby irrevocably and unconditionally guaranty to Administrative Agent for the ratable benefit of the Beneficiaries the due and punctual
payment in full of all Obligations when the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a) or other Insolvency Laws) (collectively, the Guaranteed Obligations).
7.2 Contribution by Guarantors. Each of the Guarantors shall be party to, and subject
to the terms of, the Contribution Agreement.
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7.3 Payment by Guarantors. Subject to the
Contribution Agreement, Guarantors hereby jointly and severally agree, in furtherance of the foregoing and not in limitation of any other right which any Beneficiary may have at law or in equity against any Guarantor by virtue hereof, that upon the
failure of Borrower to pay any of the Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for
the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a) or analogous provisions of other Insolvency Laws), Guarantors will upon demand pay, or cause to be paid, in Cash, to Administrative Agent
for the ratable benefit of Beneficiaries, an amount equal to the sum of the unpaid principal amount of all Guaranteed Obligations then due as aforesaid, accrued and unpaid interest on such Guaranteed Obligations (including interest which, but for
Borrowers becoming the subject of a case or proceeding under any Insolvency Law, would have accrued on such Guaranteed Obligations, whether or not a claim is allowed against Borrower for such interest in the related bankruptcy case) and all
other Guaranteed Obligations then owed to Beneficiaries as aforesaid.
7.4 Liability of
Guarantors Absolute. To the extent permitted under Applicable Law, each Guarantor agrees that its obligations hereunder are irrevocable, absolute, independent and unconditional and shall not be affected by any circumstance which constitutes a
legal or equitable discharge of a guarantor or surety other than satisfaction in full of the Guaranteed Obligations. In furtherance of the foregoing and without limiting the generality thereof, each Guarantor agrees as follows:
(a) this Guaranty is a guaranty of payment and performance when due and not of
collectability. This Guaranty is a primary obligation of each Guarantor and not merely a contract of surety;
(b)
to the extent permitted under Applicable Law, Administrative Agent may enforce this Guaranty upon the occurrence of an Event of Default notwithstanding the existence of any dispute between Borrower and
any Beneficiary with respect to the existence of such Event of Default;
(c)
the obligations of each Guarantor hereunder are independent of the obligations of Borrower and the obligations of any other guarantor (including any other Guarantor) of the obligations of Borrower, and
a separate action or actions may be brought and prosecuted against such Guarantor whether or not any action is brought against Borrower or any of such other guarantors and whether or not Borrower is joined in any such action or actions;
(d) payment by any Guarantor of a portion, but not all, of the Guaranteed
Obligations shall in no way limit, affect, modify or abridge any Guarantors liability for any portion of the Guaranteed Obligations which has not been paid. Without limiting the generality of the foregoing, if Administrative Agent is awarded a
judgment in any suit brought to enforce any Guarantors covenant to pay a portion of the Guaranteed Obligations, such judgment shall not be deemed to release such Guarantor from its covenant to pay the portion of the Guaranteed Obligations that
is not the subject of such suit, and such judgment shall not, except to the extent satisfied by such Guarantor, limit, affect, modify or abridge any other Guarantors liability hereunder in respect of the Guaranteed Obligations;
(e) any Beneficiary, upon such terms as it deems appropriate, without notice
or demand and without affecting the validity or enforceability hereof or giving rise to any reduction, limitation, impairment, discharge or termination of any Guarantors liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time, place, manner or terms of payment of the Guaranteed Obligations; (ii) settle, compromise, release or discharge, or accept or refuse any offer of performance with
respect to, or substitutions for, the Guaranteed Obligations or any agreement relating thereto and/or subordinate the payment of the same to the payment of any other obligations; (iii) request and accept other guaranties of the Guaranteed
Obligations and take and hold security for the payment hereof or the Guaranteed Obligations; (iv) release, surrender, exchange, substitute, compromise, settle, rescind, waive, alter, subordinate or modify, with or without consideration, any
security for payment of the Guaranteed Obligations, any other guaranties of the Guaranteed Obligations, or any other obligation of any Person (including any other Guarantor) with respect to the Guaranteed Obligations; (v) enforce and apply any
security now or hereafter held by or for the benefit of such Beneficiary in respect hereof or the Guaranteed Obligations and direct the order or manner of sale thereof, or exercise any other right or remedy that such Beneficiary may have against any
such security, in each case as such Beneficiary in its discretion may
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determine consistent herewith or the applicable Hedge Agreement or Cash Management Agreement and any applicable security agreement, including foreclosure on any such security pursuant to one or
more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable, and even though such action operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any
Guarantor against Borrower or any security for the Guaranteed Obligations; and (vi) exercise any other rights available to it under the Credit Documents or any Hedge Agreements or any Cash Management Agreements; and
(f) this Guaranty and the obligations of Guarantors hereunder shall be valid
and enforceable and shall not be subject to any reduction, limitation, impairment, discharge or termination for any reason (other than payment in full of the Guaranteed Obligations), including the occurrence of any of the following, whether or not
any Guarantor shall have had notice or knowledge of any of them: (i) any failure or omission to assert or enforce or agreement or election not to assert or enforce, or the stay or enjoining, by order of court, by operation of law or otherwise,
of the exercise or enforcement of, any claim or demand or any right, power or remedy (whether arising under the Credit Documents or any Hedge Agreements or any Cash Management Agreements, at law, in equity or otherwise) with respect to the
Guaranteed Obligations or any agreement relating thereto, or with respect to any other guaranty of or security for the payment or performance of the Guaranteed Obligations; (ii) any rescission, waiver, amendment or modification of, or any
consent to departure from, any of the terms or provisions (including provisions relating to events of default) hereof, any of the other Credit Documents, any of the Hedge Agreements, any of the Cash Management Agreements or any agreement or
instrument executed pursuant thereto, or of any other guaranty or security for the Guaranteed Obligations, in each case whether or not in accordance with the terms hereof or such Credit Document, such Hedge Agreement, such Cash Management Agreement
or any agreement relating to such other guaranty or security; (iii) to the extent permitted by Applicable Law, the Guaranteed Obligations, or any agreement relating thereto, at any time being found to be illegal, invalid or unenforceable in any
respect; (iv) the application of payments received from any source (other than payments received pursuant to the other Credit Documents, any of the Hedge Agreements, any of the Cash Management Agreements or from the proceeds of any security for
the Guaranteed Obligations, except to the extent such security also serves as collateral for indebtedness other than the Guaranteed Obligations) to the payment of indebtedness other than the Guaranteed Obligations, even though any Beneficiary might
have elected to apply such payment to any part or all of the Guaranteed Obligations; (v) any Beneficiarys consent to the change, reorganization or termination of the corporate structure or existence of Borrower or any of its Subsidiaries
and to any corresponding restructuring of the Guaranteed Obligations; (vi) any failure to perfect or continue perfection of a security interest in any collateral which secures any of the Guaranteed Obligations; (vii) to the extent
permitted by Applicable Law, any defenses, set-offs or counterclaims which Borrower may allege or assert against any Beneficiary in respect of the Guaranteed Obligations, including failure of consideration, breach of warranty, payment, statute of
frauds, statute of limitations, accord and satisfaction and usury; and (viii) any other act or thing or omission, or delay to do any other act or thing, which may or might in any manner or to any extent vary the risk of any Guarantor as an
obligor in respect of the Guaranteed Obligations.
(g) Each of the Secured
Parties agrees not to enforce the guarantee created hereunder by, or any other Obligations under the Credit Document of a Guarantor established in Luxembourg (a Luxembourg Guarantor) in so far as the aggregate obligations and
liabilities of any Luxembourg Guarantor with respect to the repayment under a joint and several liability clause of any borrowing or costs or expenses not incurred directly or indirectly by or on behalf of the Luxembourg Guarantor, and the granting
of any guarantee, indemnity or security under the Credit Documents exceed 90% each time the higher of (i) the book value of all the assets of the Luxembourg Guarantor at the time of this Agreement or at the time the relevant guarantee or
security is enforced or (ii) the net assets (capitaux propres as referred to in article 34 of the Luxembourg law on the commercial register and annual accounts) of such Luxembourg Guarantor as shown in the financial statements as of the date of
this Agreement or in the latest financial statements (comptes annuels) available at the date of the relevant payment hereunder and approved by the shareholders of such Luxembourg Company, and as audited by its statutory auditor or its external
auditor (réviseur dentreprise), if required by law; it being understood that the payment obligations of the Luxembourg Guarantor shall not be limited to the extent that the Luxembourg Guarantor secures obligations of its direct or
indirect Subsidiaries or in respect of sums that have been made directly or indirectly available to the
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Luxembourg Guarantor. Notwithstanding anything to the contrary in the Credit Documents, the limitation set out in this Section 7.4(g) shall apply to the aggregate of all securities, whether
guarantees, pledges, security assignments, or otherwise, granted or to be granted by the Luxembourg Guarantor.
7.5
Waivers by Guarantors. To the extent permitted by Applicable Law, each Guarantor hereby waives, for the benefit of Beneficiaries: (a) any right to require any Beneficiary, as a condition of
payment or performance by such Guarantor, to (i) proceed against Borrower, any other guarantor (including any other Guarantor) of the Guaranteed Obligations or any other Person, (ii) proceed against or exhaust any security held from
Borrower, any such other guarantor or any other Person, (iii) proceed against or have resort to any balance of any Deposit Account or credit on the books of any Beneficiary in favor of Borrower or any other Person, or (iv) pursue any other
remedy in the power of any Beneficiary whatsoever; (b) any defense arising by reason of the incapacity, lack of authority or any disability or other defense of Borrower or any other Guarantor including any defense based on or arising out of the
lack of validity or the unenforceability of the Guaranteed Obligations or any agreement or instrument relating thereto or by reason of the cessation of the liability of Borrower or any other Guarantor from any cause other than satisfaction in full
of the Guaranteed Obligations; (c) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (d) any
defense based upon any Beneficiarys errors or omissions in the administration of the Guaranteed Obligations, except behavior which amounts to gross negligence, willful misconduct or bad faith; (e) (i) any principles or provisions of
law, statutory or otherwise, which are or might be in conflict with the terms hereof and any legal or equitable discharge of such Guarantors obligations hereunder, (ii) the benefit of any statute of limitations affecting such
Guarantors liability hereunder or the enforcement hereof, (iii) any rights to set-offs, recoupments and counterclaims, and (iv) promptness, diligence and any requirement that any Beneficiary protect, secure, perfect or insure any
security interest or lien or any property subject thereto; (f) notices, demands, presentments, protests, notices of protest, notices of dishonor and notices of any action or inaction, including acceptance hereof, notices of default hereunder,
the Hedge Agreements, the Cash Management Agreements or any agreement or instrument related thereto, notices of any renewal, extension or modification of the Guaranteed Obligations or any agreement related thereto, notices of any extension of credit
to Borrower and notices of any of the matters referred to in Section 7.4 and any right to consent to any thereof; and (g) any defenses or benefits that may be derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms hereof.
7.6
Guarantors Rights of Subrogation, Contribution, etc. Until the Guaranteed Obligations shall have been indefeasibly paid in full and the Revolving Commitments shall have terminated and all
Letters of Credit shall have expired or been cancelled, each Guarantor hereby waives, to the extent permitted by Applicable Law, any claim, right or remedy, direct or indirect, that such Guarantor now has or may hereafter have against Borrower or
any other Guarantor or any of its assets in connection with this Guaranty or the performance by such Guarantor of its obligations hereunder, in each case whether such claim, right or remedy arises in equity, under contract, by statute, under common
law or otherwise and including (a) any right of subrogation, reimbursement or indemnification that such Guarantor now has or may hereafter have against Borrower with respect to the Guaranteed Obligations, (b) any right to enforce, or to
participate in, any claim, right or remedy that any Beneficiary now has or may hereafter have against Borrower, and (c) any benefit of, and any right to participate in, any collateral or security now or hereafter held by any Beneficiary. In
addition, until the Guaranteed Obligations shall have been indefeasibly paid in full and the Revolving Commitments shall have terminated and all Letters of Credit shall have expired or been cancelled, each Guarantor shall withhold exercise of any
right of contribution such Guarantor may have against any other guarantor (including any other Guarantor) of the Guaranteed Obligations, including any such right of contribution as contemplated by the Contribution Agreement. Each Guarantor further
agrees that, to the extent the waiver or agreement to withhold the exercise of its rights of subrogation, reimbursement, indemnification and contribution as set forth herein is found by a court of competent jurisdiction to be void or voidable for
any reason, any rights of subrogation, reimbursement or indemnification such Guarantor may have against Borrower or against any collateral or security, and any rights of contribution such Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights any Beneficiary may have against Borrower, to all right, title and interest any Beneficiary may have in any such collateral or security, and to any right any Beneficiary may have against such other guarantor. If
any amount shall be paid to any Guarantor on account of any such subrogation, reimbursement, indemnification or contribution rights at any time when all Guaranteed Obligations shall not have been finally and indefeasibly paid in full, such amount
shall be held in trust for Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over to Administrative Agent for the benefit of Beneficiaries to be credited and applied against the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms hereof.
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7.7 Subordination of Other Obligations.
Any Indebtedness of Borrower or any Guarantor now or hereafter held by any Guarantor (the Obligee Guarantor) is hereby subordinated in right of payment to the Guaranteed Obligations, and any such Indebtedness collected or received
by the Obligee Guarantor after an Event of Default has occurred and is continuing shall be held in trust for Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over to Administrative Agent for the benefit of Beneficiaries to
be credited and applied against the Guaranteed Obligations but without affecting, impairing or limiting in any manner the liability of the Obligee Guarantor under any other provision hereof. Notwithstanding the foregoing, with respect to any
Guarantor incorporated under the laws of Singapore (each, a Singaporean Guarantor ), any Indebtedness of Borrower or any Guarantor now or hereafter held by any Singaporean Guarantor is hereby subordinated in right of payment to
the Guaranteed Obligations, and any such Indebtedness collected or received by any Singaporean Guarantor after an Event of Default has occurred and is continuing (up to the aggregate amount which may be or become payable as Guaranteed Obligations)
shall be held in trust for Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over to Administrative Agent for the benefit of Beneficiaries to be credited and applied against the Guaranteed Obligations but without affecting,
impairing or limiting in any manner the liability of such Singaporean Guarantor under any other provision hereof, and it is agreed that nothing in this Section 7.7 is intended to create a charge or other Lien.
7.8 Continuing Guaranty. This Guaranty is a continuing guaranty and shall remain in
effect until all of the Guaranteed Obligations shall have been paid in full and the Revolving Commitments shall have terminated and all Letters of Credit shall have expired or been cancelled. Each Guarantor hereby irrevocably waives any right to
revoke this Guaranty as to future transactions giving rise to any Guaranteed Obligations.
7.9
Authority of Guarantors or Borrower. It is not necessary for any Beneficiary to inquire into the capacity or powers of any Guarantor or Borrower or the officers, directors or any agents acting or
purporting to act on behalf of any of them.
7.10 Financial Condition of Borrower.
Any Credit Extension may be made to Borrower or continued from time to time, and any Hedge Agreements or Cash Management Agreements may be entered into from time to time, in each case without notice to or authorization from any Guarantor regardless
of the financial or other condition of Borrower at the time of any such grant or continuation or at the time such Hedge Agreement or Cash Management Agreement is entered into, as the case may be. No Beneficiary shall have any obligation to disclose
or discuss with any Guarantor its assessment, or any Guarantors assessment, of the financial condition of Borrower. Each Guarantor has adequate means to obtain information from Borrower on a continuing basis concerning the financial condition
of Borrower and its ability to perform its obligations under the Credit Documents and the Hedge Agreements and the Cash Management Agreements, and each Guarantor assumes the responsibility for being and keeping informed of the financial condition of
Borrower and of all circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations. Each Guarantor hereby waives and relinquishes any duty on the part of any Beneficiary to disclose any matter, fact or thing relating to the
business, operations or conditions of Borrower now known or hereafter known by any Beneficiary.
7.11
Bankruptcy, etc.
(a) So long as any
Guaranteed Obligations remain outstanding, no Guarantor shall, without the prior written consent of Administrative Agent acting pursuant to the instructions of Requisite Lenders, commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency case, application or proceeding of or against Borrower or any other Guarantor. The obligations of Guarantors hereunder shall not be reduced, limited, impaired, discharged, deferred, suspended or terminated by any case,
application or proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement of Borrower or any other Guarantor or by any defense which Borrower or any other Guarantor may have
by reason of the order, decree or decision of any court or administrative body resulting from any such proceeding.
(b)
Each Guarantor acknowledges and agrees that any interest on any portion of the Guaranteed Obligations which accrues after the commencement of any case, application or proceeding referred to in clause
(a) above (or, if interest on any portion of the Guaranteed Obligations ceases to accrue by operation of law by reason of the commencement of such case, application or proceeding, such interest as would have accrued on such portion of the
Guaranteed Obligations if such case, application or proceeding had not been commenced) shall be included in the Guaranteed Obligations because it is the intention of Guarantors and Beneficiaries that the Guaranteed Obligations which are guaranteed
by Guarantors
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pursuant hereto should be determined without regard to any rule of law or order which may relieve Borrower of any portion of such Guaranteed Obligations. Guarantors will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of creditors or similar Person to pay Administrative Agent, or allow the claim of Administrative Agent in respect of, any such interest accruing after the date on which such case,
application or proceeding is commenced.
(c) In the event that all or any portion of the
Guaranteed Obligations are paid by Borrower, the obligations of Guarantors hereunder shall continue and remain in full force and effect or be reinstated, as the case may be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from any Beneficiary as a preference, fraudulent transfer or otherwise, and any such payments which are so rescinded or recovered shall constitute Guaranteed Obligations for all purposes hereunder.
7.12 Discharge of Guaranty upon Sale of Guarantor. If all of the Equity Interests of
any Guarantor or any of its successors in interest hereunder shall be sold or otherwise disposed of (including by merger, amalgamation or consolidation) in accordance with the terms and conditions hereof, the Guaranty of such Guarantor or such
successor in interest, as the case may be, hereunder shall automatically be discharged and released without any further action by any Beneficiary or any other Person effective as of the time of such Asset Sale.
7.13 Swiss Guarantee Limitations. Notwithstanding anything to the contrary in this
Agreement or any other Credit Document, the following limitations shall apply to any Swiss Guarantor:
(a)
If complying with the obligations of the Swiss Guarantor under the guarantee (including for the avoidance of doubt, any restrictions of the Swiss Guarantors rights of set-off and/or subrogation
or its duties to subordinate or waive claims, if any) would constitute a repayment of capital (Einlagerückgewähr), a violation of the legally protected reserves (gesetzlich geschützte Reserven) or the payment of a
(constructive) dividend (Gewinnausschüttung) by the Swiss Guarantor or would otherwise be restricted under Swiss corporate law then applicable (the Restricted Obligations), the aggregate liability of the Swiss
Guarantor for Restricted Obligations shall not exceed the amount of the Swiss Guarantors freely disposable equity in accordance with Swiss law, being the total assets of the relevant Swiss Guarantor less the total of (1) the aggregate of
the relevant Swiss Guarantors liabilities, (2) the aggregate share capital and (3) statutory reserves (including reserves for own shares and revaluations as well as capital surplus (agio) to the extent such reserves cannot be
transferred into unrestricted, distributable reserves (the Maximum Amount). The amount of freely disposable equity shall be determined on the basis of an audited interim balance sheet as set out in clause (b)(ii) below. This
limitation shall only apply to the extent that it is a requirement under applicable Swiss mandatory law at the time the Swiss Guarantor is required to perform its guarantee obligations under the Credit Documents. Such limitation shall not free the
Swiss Guarantor from its obligations in excess thereof, but merely postpone the performance date therefor until such time as performance is again permitted notwithstanding such limitation.
(b) Immediately after having been requested to make any payments or otherwise
perform Restricted Obligations under the guarantee, the Swiss Guarantor shall, and any parent company of the Swiss Guarantor being a party to this Agreement shall procure that, the Swiss Guarantor will:
(i) perform any Restricted Obligations which are not affected by the above
limitations and take and cause to be taken all and any action, including, without limitation, (1) the passing of any shareholders resolutions to approve any payment or other performance under this Agreement or any other Credit Document
and (2) the obtaining of any confirmations which may be required as a matter of Swiss mandatory law in force at the time the Swiss Guarantor is required to make a payment or perform other obligations under this Agreement or any other Credit
Document, in order to allow a prompt payment of amounts owed by the Swiss Guarantor under this Agreement or any other Credit Document as well as the performance by the Swiss Guarantor of other obligations there related with a minimum of limitations;
and
(ii) in respect of any balance, if and to the extent requested by
the Collateral Agent or required under then applicable Swiss law, provide the Collateral Agent with an interim balance sheet audited by the statutory auditors of the Swiss Guarantor setting out the Maximum Amount,
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take such further corporate and other action as may be required by law (such as board and shareholders approvals and the receipt of any confirmations from the Swiss Guarantors
statutory auditors) and other measures necessary to allow the Swiss Guarantor to make the payments agreed hereunder with a minimum of limitations and, immediately thereafter, pay up to the Maximum Amount to the Collateral Agent.
(c) If the enforcement of the obligations of the Swiss Guarantor under the
Credit Documents would be limited due to the effects referred to in this Agreement, the Swiss Guarantor shall further, to the extent permitted by applicable law and Swiss accounting standards and upon request by the Collateral Agent, write up or
sell any of its assets that are shown in its balance sheet with a book value that is significantly lower than the market value of the assets, in case of sale, however, only if such assets are not necessary for the Swiss Guarantors business
(nicht betriebsnotwendig) and such sale is permitted under the Credit Documents.
(d)
To the extent required by applicable law, including double tax treaties, in force at the time, the Swiss Guarantor is required to make a payment under this Agreement it shall:
(i) use its best efforts to ensure that such payments can be made without
deduction of Swiss Withholding Tax, or with deduction of Swiss Federal Withholding Tax at a reduced rate, by discharging the liability to such tax by notification pursuant to applicable law (including tax treaties) rather than payment of the tax;
(ii) deduct the Swiss Federal Withholding Tax at such rate (being 35% on
the date hereof) as in force from time to time if the notification procedure pursuant to sub-paragraph (i) above does not apply; or shall deduct the Swiss Federal Withholding Tax at the reduced rate resulting after discharge of part of such tax
by notification if the notification procedure pursuant to sub-paragraph (i) applies for a part of the Swiss Federal Withholding Tax only; and shall pay within the time allowed any such taxes deducted to the Swiss Federal Tax Administration; and
(iii) notify and provide evidence to the Collateral Agent that the Swiss
Federal Withholding Tax has been paid to the Swiss Federal Tax Administration.
(e)
To the extent such deduction is made, and to the extent the maximum amount of freely disposable shareholder equity pursuant to this Agreement is not fully utilized, the Swiss Guarantor shall be
required to pay an additional amount so that after making any required deduction of Swiss Federal Withholding Tax the aggregate net amount paid to the Lenders is equal to the amount which would have been paid if no deduction of Swiss Federal
Withholding Tax had been required, provided that the aggregate amount paid (and including amounts withheld) shall in any event be limited to the maximum amount of freely disposable shareholder equity pursuant to this Agreement.
(f) The Swiss Guarantor shall use its reasonable efforts to ensure that any
Person which is, as a result of a deduction of Swiss Federal Withholding Tax, entitled to a full or partial refund of the Swiss Federal Withholding Tax, will, as soon as possible after the deduction of the Swiss Federal Withholding Tax,
(i) request a refund of the Swiss Federal Withholding Tax under any
applicable law (including double tax treaties), and
(ii) pay to the
Collateral Agent upon receipt any amount so refunded (and after deduction of any tax) if so required under the guarantee or the Indenture and to the extent legally permissible.
(g) Notwithstanding anything to the contrary in the Credit Documents, the
limitation set out in this Section 7.13 shall apply to the aggregate of all securities, whether guarantees, pledges, security assignments, or otherwise, granted or to be granted by the Swiss Guarantor.
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SECTION 8. |
EVENTS OF DEFAULT |
8.1 Events of
Default. If any one or more of the following conditions or events shall occur:
(a) Failure to Make Payments When Due. Failure by Borrower to pay
(i) when due any installment of principal of any Loan, whether at stated maturity, by acceleration, by notice of voluntary prepayment, by mandatory prepayment or otherwise; (ii) when due any amount payable to Issuing Bank in reimbursement
of any drawing under a Letter of Credit; or (iii) any interest on any Loan or any fee or any other amount due hereunder within three days after the date due; or
(b) Default in Other Agreements. (i) Failure of any Credit Party
or any of their respective Subsidiaries to pay when due any principal of or interest on or any other amount, including any payment in settlement, payable in respect of one or more items of Indebtedness (other than Indebtedness referred to in
Section 8.1(a)) in an individual principal amount (or Net Mark-to-Market Exposure) of $100,000,000 or with an aggregate principal amount (or Net Mark-to-Market Exposure) of $100,000,000 or more, in each case beyond the grace period, if any,
provided therefor; or (ii) breach or default by any Credit Party with respect to any other material term of (1) one or more items of Indebtedness in the individual or aggregate principal amounts (or Net Mark-to-Market Exposure)
referred to in clause (i) above or (2) any loan agreement, mortgage, indenture or other agreement relating to such item(s) of Indebtedness, in each case beyond the grace period, if any, provided therefor, if the effect of such
breach or default is to cause, or to permit the holder or holders of that Indebtedness (or a trustee on behalf of such holder or holders), to cause, that Indebtedness to become or be declared due and payable (or redeemable) prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may be; or
(c) Breach of Certain Covenants. Failure of any Credit Party to perform
or comply with any term or condition contained in Section 2.6, Section 5.1(e), Section 5.2 or Section 6; or
(d) Breach of Representations, Etc. Any representation, warranty,
certification or other statement made or deemed made by any Credit Party in any Credit Document or in any statement or certificate at any time given by any Credit Party or any of its Subsidiaries in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material respect as of the date made or deemed made; or
(e) Other Defaults Under Credit Documents. Any Credit Party shall
default in the performance of or compliance with any term contained herein or any of the other Credit Documents, other than any such term referred to in any other Section of this Section 8.1, and such default shall not have been remedied or
waived within thirty days after the earlier of (i) an officer of such Credit Party becoming aware of such default or (ii) receipt by Borrower of notice from Administrative Agent or any Lender of such default; or
(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A
court of competent jurisdiction shall enter a decree or order for relief in respect of Borrower or any of its Subsidiaries (other than any Immaterial Subsidiaries) in an involuntary case under any Insolvency Law, which decree or order is not stayed;
or any other similar relief shall be granted under any Applicable Law; or (ii) an involuntary case or proceeding (including the filing of any notice of intention in respect thereof) shall be commenced against Borrower or any of its Subsidiaries
(other than any Immaterial Subsidiaries) under any Insolvency Law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, receiver-manager, administrative receiver,
administrator, liquidator, sequestrator, trustee, custodian or other officer having similar powers over Borrower or any of its Subsidiaries (other than any Immaterial Subsidiaries), or over all or a substantial part of its property, shall have been
entered; or there shall have occurred the involuntary appointment of an interim receiver, trustee, custodian or similar officer of Borrower or any of its Subsidiaries (other than any Immaterial Subsidiaries) for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have been issued against any substantial part of the property of Borrower or any of its Subsidiaries (other than any Immaterial Subsidiaries), and any such event described in
this clause (ii) shall continue for sixty days without having been dismissed, bonded or discharged; or
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(g) Voluntary Bankruptcy;
Appointment of Receiver, etc. (i) Borrower or any of its Subsidiaries (other than any Immaterial Subsidiaries) shall have an order for relief entered with respect to it or shall file a petition or application seeking any relief or shall
otherwise commence a voluntary case or proceeding under any Insolvency Law, or shall consent to, or fail to contest in a timely manner the commencement of, or the entry of an order for relief in an involuntary case or proceeding, or to the
conversion of an involuntary case to a voluntary case or proceeding, under any such law, or shall consent to, or fail to contest in a timely manner, the commencement of, or the appointment of or taking possession by a receiver, receiver-manager,
trustee, custodian or other similar officer for all or a substantial part of its property; or Borrower or any of its Subsidiaries (other than any Immaterial Subsidiaries) shall make any assignment for the benefit of creditors; or (ii) Borrower
or any of its Subsidiaries (other than any Immaterial Subsidiaries) shall be unable, or shall fail generally, or shall admit in writing its inability, to pay its debts as such debts become due or is otherwise insolvent; or the board of directors (or
similar governing body) of Borrower or any of its Subsidiaries (other than any Immaterial Subsidiaries) (or any committee thereof) shall adopt any resolution or otherwise authorize any action to approve any of the actions referred to herein or in
Section 8.1(f); or
(h) Judgments and Attachments. Any money
judgment, writ or warrant of attachment or similar process involving an amount in excess of $100,000,000 individually or in the aggregate at any time (in either case to the extent not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or filed against Borrower, any of its Subsidiaries or any of their respective assets and shall remain undischarged, unvacated, unbonded or unstayed for a period of sixty days
(or in any event later than five days prior to the date of any proposed sale thereunder); or
(i) Dissolution. Any order, judgment or decree shall be entered against
any Credit Party decreeing the dissolution, winding-up or split-up of such Credit Party and such order shall remain undischarged or unstayed for a period in excess of thirty days; or
(j) Employee Benefit Plans. There shall occur one or more ERISA Events
that have had or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; or
(k) Canadian Employee Benefit Plans. (x) There shall occur one or
more Canadian Pension Plan Termination Events that have had or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or (y) a Canadian Credit Party fails to make a required contribution to or payment
under any Canadian Pension Plan when due and such failure has had or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; or
(l) Change of Control. A Change of Control shall occur; or
(m) Guaranties, Collateral Documents and Other Credit Documents. At any
time after the execution and delivery thereof, (i) the Guaranty for any reason, other than the satisfaction in full of all Obligations, shall cease to be in full force and effect (other than in accordance with its terms) or shall be declared to
be null and void or any Guarantor shall repudiate its obligations thereunder, (ii) this Agreement or any Collateral Document ceases to be in full force and effect (other than by reason of a release of Collateral in accordance with the terms
hereof or thereof or the satisfaction in full of the Obligations (other than Obligations in respect of any Hedge Agreement or Cash Management Agreement) in accordance with the terms hereof) or shall be declared null and void, or Collateral Agent
shall not have or shall cease to have a valid and perfected Lien in any Collateral purported to be covered by the Collateral Documents with the priority required by the relevant Collateral Document, in each case for any reason other than the failure
of Collateral Agent or any Secured Party to take any action within its control, or (iii) any Credit Party shall contest the validity or enforceability of any Credit Document in writing or deny in writing that it has any further liability,
including with respect to future advances by Lenders, under any Credit Document to which it is a party or shall contest the validity or perfection of any Lien in any portion of the Collateral purported to be covered by the Collateral Documents,
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THEN, (1) upon the occurrence of any Event of Default described in Section 8.1(f) or 8.1(g) with
respect to Borrower, automatically, and (2) upon the occurrence and during the continuance of any other Event of Default, at the request of (or with the consent of) Requisite Lenders, upon notice to Borrower by Administrative Agent,
(A) the Revolving Commitments, if any, of each Lender having such Revolving Commitments and the obligation of Issuing Bank to issue any Letter of Credit shall immediately terminate; (B) each of the following shall immediately become due
and payable, in each case without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by each Credit Party: (I) the unpaid principal amount of and accrued interest on the Loans, (II) an
amount equal to the maximum amount that may at any time be drawn under all Letters of Credit then outstanding (regardless of whether any beneficiary under any such Letter of Credit shall have presented, or shall be entitled at such time to present,
the drafts or other documents or certificates required to draw under such Letters of Credit), to be held as security for Borrowers reimbursement Obligations in respect of Letters of Credit then outstanding and (III) all other Obligations
(other than Hedge Agreements and Cash Management Agreements unless and to the extent such agreements are independently declared due and payable in accordance with their respective terms); provided, the foregoing shall not affect in any way
the obligations of Lenders under Section 2.3(b)(v) or Section 2.4(e); and (C) Administrative Agent may cause Collateral Agent to enforce any and all Liens and security interests created pursuant to Collateral Documents.
9.1 Appointment of
Agents. J.P. Morgan and Morgan Stanley are hereby appointed Co-Syndication Agents hereunder, and each Lender hereby authorizes J.P. Morgan and Morgan Stanley to act as Co-Syndication Agents in accordance with the terms hereof and the other
Credit Documents. Barclays is hereby appointed Administrative Agent and Collateral Agent hereunder and under the other Credit Documents and each Lender hereby authorizes Barclays to act as Administrative Agent and Collateral Agent in accordance with
the terms hereof and of the other Credit Documents. Each Agent hereby agrees to act in its capacity as such upon the express conditions contained herein and the other Credit Documents, as applicable. The provisions of this Section 9 are solely
for the benefit of Agents and Lenders and no Credit Party shall have any rights as a third party beneficiary of any of the provisions thereof. In performing its functions and duties hereunder, each Agent shall act solely as an agent of Lenders and
does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for Borrower or any of its Subsidiaries. Each Co-Syndication Agent, without consent of or notice to any party hereto, may
assign any and all of its rights or obligations hereunder (in its capacity as a Co-Syndication Agent) to any of its Affiliates. As of the Third Restatement Date, each of J.P. Morgan and Morgan Stanley, in each of their capacities as a Co-Syndication
Agent, shall not have any obligations but shall be entitled to all benefits of this Section 9. The Syndication Agents and any Agent described in clause (d) of the definition thereof may resign from such role at any time, with immediate
effect, by giving prior written notice thereof to Administrative Agent and Borrower.
9.2
Powers and Duties. Each Lender irrevocably authorizes each Agent to take such action on such Lenders behalf and to exercise such powers, rights and remedies hereunder and under the other
Credit Documents as are specifically delegated or granted to such Agent by the terms hereof and thereof, together with such powers, rights and remedies as are reasonably incidental thereto. Each Agent shall have only those duties and
responsibilities that are expressly specified herein and the other Credit Documents. Each Agent may exercise such powers, rights and remedies and perform such duties by or through its agents or employees. No Agent shall have, by reason hereof or any
of the other Credit Documents, a fiduciary relationship in respect of any Lender (except, in respect of Collateral Agent in its capacity as trustee under Section 9.8(a), to the extent such fiduciary relationship cannot lawfully be excluded);
and nothing herein or any of the other Credit Documents, expressed or implied, is intended to or shall be so construed as to impose upon any Agent any obligations in respect hereof or any of the other Credit Documents except as expressly set forth
herein or therein.
9.3 General Immunity.
(a) No Responsibility for Certain Matters. No Agent shall be responsible to any Lender
for the execution, effectiveness, genuineness, validity, enforceability, collectability or sufficiency hereof or any other Credit Document or for any representations, warranties, recitals or statements made herein or therein or made in any written
or oral statements or in any financial or other statements, instruments, reports or certificates or any other documents furnished or made by any Agent to Lenders or by or on behalf of any Credit Party or to any Agent or any Lender in
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connection with the Credit Documents and the transactions contemplated thereby or for the financial condition or business affairs of any Credit Party or any other Person liable for the payment of
any Obligations, nor shall any Agent be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained in any of the Credit Documents or as to the use of the
proceeds of the Loans or as to the existence or possible existence of any Event of Default or Default or to make any disclosures with respect to the foregoing. Anything contained herein to the contrary notwithstanding, Administrative Agent shall not
have any liability arising from confirmations of the amount of outstanding Loans or the Letter of Credit Usage or the component amounts thereof.
(b) Exculpatory Provisions. No Agent nor any of its officers, partners, directors,
employees or agents shall be liable to Lenders for any action taken or omitted by any Agent under or in connection with any of the Credit Documents except to the extent caused by such Agents gross negligence or willful misconduct, as
determined by a final, non-appealable judgment of a court of competent jurisdiction. Each Agent shall be entitled to refrain from any act or the taking of any action (including the failure to take an action) in connection herewith or with any of the
other Credit Documents or from the exercise of any power, discretion or authority vested in it hereunder or thereunder unless and until such Agent shall have received instructions in respect thereof from Requisite Lenders (or such other Lenders as
may be required to give such instructions under Section 10.5) and, upon receipt of such instructions from Requisite Lenders (or such other Lenders, as the case may be), such Agent shall be entitled to act or (where so instructed) refrain from
acting, or to exercise such power, discretion or authority, in accordance with such instructions. Without prejudice to the generality of the foregoing, (i) each Agent shall be entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons and shall be entitled to rely and shall be protected in relying on opinions and judgments of attorneys
(who may be attorneys for Borrower and its Subsidiaries), accountants, experts and other professional advisors selected by it; and (ii) no Lender shall have any right of action whatsoever against any Agent as a result of such Agent acting or
(where so instructed) refraining from acting hereunder or any of the other Credit Documents in accordance with the instructions of Requisite Lenders (or such other Lenders as may be required to give such instructions under Section 10.5).
(c) Delegation of Duties. Administrative Agent may perform any and all of its duties
and exercise its rights and powers under this Agreement or under any other Credit Document by or through any one or more sub-agents appointed by Administrative Agent. Administrative Agent and any such sub-agent may perform any and all of its duties
and exercise its rights and powers by or through their respective Affiliates. The exculpatory, indemnification and other provisions of this Section 9.3 and of Section 9.6 shall apply to any of the Affiliates of Administrative Agent and
shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. All of the rights, benefits, and privileges (including the exculpatory and
indemnification provisions) of this Section 9.3 and of Section 9.6 shall apply to any such sub-agent and to the Affiliates of any such sub-agent, and shall apply to their respective activities as sub-agent as if such sub-agent and
Affiliates were named herein. Notwithstanding anything herein to the contrary, with respect to each sub-agent appointed by the Administrative Agent, (i) such sub-agent shall be a third party beneficiary under this Agreement with respect to all
such rights, benefits and privileges (including exculpatory rights and rights to indemnification) and shall have all of the rights and benefits of a third party beneficiary, including an independent right of action to enforce such rights, benefits
and privileges (including exculpatory rights and rights to indemnification) directly, without the consent or joinder of any other Person, against any or all of Credit Parties and the Lenders, (ii) such rights, benefits and privileges (including
exculpatory rights and rights to indemnification) shall not be modified or amended without the consent of such sub-agent, and (iii) such sub-agent shall only have obligations to Administrative Agent and not to any Credit Party, Lender or any
other Person and no Credit Party, Lender or any other Person shall have any rights, directly or indirectly, as a third party beneficiary or otherwise, against such sub-agent; provided that the Administrative Agent shall be responsible for the
gross negligence, willful misconduct or bad faith of such sub-agent.
9.4 Agents
Entitled to Act as Lender. The agency hereby created shall in no way impair or affect any of the rights and powers of, or impose any duties or obligations upon, any Agent in its individual capacity as a Lender hereunder. With respect to its
participation in the Loans and the Letters of Credit, each Agent shall have the same rights and powers hereunder as any other Lender and may exercise the same as if it were not performing the duties and functions delegated to it hereunder, and the
term Lender shall, unless the context clearly otherwise indicates, include each Agent in its individual capacity. Any Agent and its Affiliates may accept deposits from, lend money to, own
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securities of, and generally engage in any kind of banking, trust, financial advisory or other business with Borrower or any of its Affiliates as if it were not performing the duties specified
herein, and may accept fees and other consideration from Borrower for services in connection herewith and otherwise without having to account for the same to Lenders.
9.5 Lenders Representations, Warranties and Acknowledgment.
(a) Each Lender represents and warrants that it has made its own independent investigation of
the financial condition and affairs of Borrower and its respective Subsidiaries in connection with Credit Extensions hereunder and that it has made and shall continue to make its own appraisal of the creditworthiness of Borrower and its
Subsidiaries. No Agent shall have any duty or responsibility, either initially or on a continuing basis, to make any such investigation or any such appraisal on behalf of Lenders or to provide any Lender with any credit or other information with
respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter, and no Agent shall have any responsibility with respect to the accuracy of or the completeness of any information provided to
Lenders.
(b) Each Lender, by delivering its signature page to this Agreement, or an
Assignment Agreement or a Joinder Agreement and funding its Tranche A Term Loans, Tranche B Term Loans, New Term Loans and/or Revolving Loans shall be deemed to have acknowledged receipt of, and consented to and approved, each Credit Document and
each other document required to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the Original Closing Date, on the First Restatement Date, on the Second Restatement Date, on the Second Amendment and Restatement Joinder Date,
on the Third Restatement Date or as of the date of funding of such New Term Loans and/or Revolving Loans.
9.6
Right to Indemnity. Each Lender, in proportion to its Pro Rata Share, severally agrees to indemnify each (a) Agent, their Affiliates and their respective officers, partners, directors,
trustees, employees and agents of each Agent and (b) Issuing Bank, their Affiliates and their respective officers, partners, directors, trustees, employees and agents of Issuing Bank (each, an Indemnitee Agent Party), to the
extent that such Indemnitee Agent Party shall not have been reimbursed by any Credit Party, for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against such Indemnitee Agent Party in exercising its powers, rights and remedies or performing its duties hereunder or under the other
Credit Documents or otherwise in its capacity as such Agent or Issuing Bank in any way relating to or arising out of this Agreement or the other Credit Documents, in all cases, whether or not caused by or arising, in whole or in part, out of the
negligence of such Indemnitee Agent Party; provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such
Indemnitee Agent Partys gross negligence or willful misconduct as determined by a final, non-appealable judgment of a court of competent jurisdiction. If any indemnity furnished to any Indemnitee Agent Party for any purpose shall, in the
opinion of such Indemnitee Agent Party, be insufficient or become impaired, such Indemnitee Agent Party may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished;
provided that in no event shall this sentence require any Lender to indemnify any Indemnitee Agent Party against any liability, obligation, loss, damage, penalty, action, judgment, suit, cost, expense or disbursement in excess of such
Lenders Pro Rata Share thereof; and provided further that this sentence shall not be deemed to require any Lender to indemnify any Indemnitee Agent Party against any liability, obligation, loss, damage, penalty, action, judgment, suit,
cost, expense or disbursement described in the proviso in the immediately preceding sentence.
9.7
Successor Administrative Agent, Collateral Agent and Swing Line Lender.
(a)
Administrative Agent shall have the right to resign at any time by giving prior written notice thereof to Lenders and Borrower, and Administrative Agent may be removed at any time with or without cause
by an instrument or concurrent instruments in writing delivered to Borrower and Administrative Agent and signed by Requisite Lenders. Administrative Agent shall have the right to appoint a financial institution to act as Administrative Agent and/or
Collateral Agent hereunder, subject to the reasonable satisfaction of Borrower (other than at any time an Event of Default shall have occurred and then be continuing) and the Requisite Lenders, and Administrative Agents resignation shall
become effective on the earliest of (i) 30 days after delivery of the notice of resignation, (ii) the
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acceptance of such successor Administrative Agent by Borrower (other than at any time an Event of Default shall have occurred and then be continuing) and the Requisite Lenders or (iii) such
other date, if any, agreed to by the Requisite Lenders. Upon any such notice of resignation or any such removal, if a successor Administrative Agent has not already been appointed by the retiring Administrative Agent, Requisite Lenders shall have
the right, upon five Business Days notice to Borrower, to appoint a successor Administrative Agent. If neither Requisite Lenders nor Administrative Agent have appointed a successor Administrative Agent, Requisite Lenders shall be deemed to
have succeeded to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent; provided that, until a successor Administrative Agent is so appointed by Requisite Lenders or Administrative Agent,
any collateral security held by Administrative Agent in its role as Collateral Agent on behalf of the Lenders or the Issuing Bank under any of the Credit Documents shall continue to be held by the retiring Collateral Agent as nominee until such time
as a successor Collateral Agent is appointed. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, that successor Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Administrative Agent and the retiring or removed Administrative Agent shall promptly (i) transfer to such successor Administrative Agent all sums, Securities and other items of
Collateral held under the Collateral Documents, together with all records and other documents necessary or appropriate in connection with the performance of the duties of the successor Administrative Agent under the Credit Documents, and
(ii) execute and deliver to such successor Administrative Agent such amendments to financing statements, and take such other actions, as may be necessary or appropriate in connection with the assignment to such successor Administrative Agent of
the security interests created under the Collateral Documents, whereupon such retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder. Except as provided above, any resignation or removal of
Barclays or its successor as Administrative Agent pursuant to this Section shall also constitute the resignation or removal of Barclays or its successor as Collateral Agent. After any retiring or removed Administrative Agents resignation or
removal hereunder as Administrative Agent, the provisions of this Section 9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent hereunder. Any successor Administrative Agent
appointed pursuant to this Section shall, upon its acceptance of such appointment, become the successor Collateral Agent for all purposes hereunder.
(b) In addition to the foregoing, Collateral Agent may resign at any time by giving prior
written notice thereof to Lenders and the Grantors, and Collateral Agent may be removed at any time with or without cause by an instrument or concurrent instruments in writing delivered to the Grantors and Collateral Agent signed by Requisite
Lenders. Administrative Agent shall have the right to appoint a financial institution as Collateral Agent hereunder, subject to the reasonable satisfaction of Borrower (other than at any time an Event of Default shall have occurred and then be
continuing) and the Requisite Lenders and Collateral Agents resignation shall become effective on the earliest of (i) 30 days after delivery of the notice of resignation, (ii) the acceptance of such successor Collateral Agent by
Borrower (other than at any time an Event of Default shall have occurred and then be continuing) and the Requisite Lenders or (iii) such other date, if any, agreed to by the Requisite Lenders. Upon any such notice of resignation or any such
removal, Requisite Lenders shall have the right, upon five Business Days notice to Administrative Agent, to appoint a successor Collateral Agent. Until a successor Collateral Agent is so appointed by Requisite Lenders or Administrative Agent,
any collateral security held by Collateral Agent on behalf of the Lenders or the Issuing Bank under any of the Credit Documents shall continue to be held by the retiring Collateral Agent as nominee until such time as a successor Collateral Agent is
appointed. Upon the acceptance of any appointment as Collateral Agent hereunder by a successor Collateral Agent, that successor Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the
retiring or removed Collateral Agent under this Agreement and the Collateral Documents, and the retiring or removed Collateral Agent under this Agreement shall promptly (i) transfer to such successor Collateral Agent all sums, Securities and
other items of Collateral held hereunder or under the Collateral Documents, together with all records and other documents necessary or appropriate in connection with the performance of the duties of the successor Collateral Agent under this
Agreement and the Collateral Documents, and (ii) execute and deliver to such successor Collateral Agent or otherwise authorize the filing of such amendments to financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Collateral Agent of the security interests created under the Collateral Documents, whereupon such retiring or removed Collateral Agent shall be discharged from its duties and
obligations under this Agreement and the Collateral Documents. After any retiring or removed Collateral Agents resignation or removal hereunder as the Collateral Agent, the provisions of this Agreement and the Collateral Documents shall inure
to its benefit as to any actions taken or omitted to be taken by it under this Agreement or the Collateral Documents while it was the Collateral Agent hereunder.
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(c) Any resignation or removal of Barclays or its
successor as Administrative Agent pursuant to this Section shall also constitute the resignation or removal of Barclays or its successor as Swing Line Lender, and any successor Administrative Agent appointed pursuant to this Section shall, upon its
acceptance of such appointment, become the successor Swing Line Lender for all purposes hereunder. In such event (i) Borrower shall prepay any outstanding Swing Line Loans made by the retiring or removed Administrative Agent in its capacity as
Swing Line Lender, (ii) upon such prepayment, the retiring or removed Administrative Agent and Swing Line Lender shall surrender any Swing Line Note held by it to Borrower for cancellation, and (iii) Borrower shall issue, if so requested
by successor Administrative Agent and Swing Line Loan Lender, a new Swing Line Note to the successor Administrative Agent and Swing Line Lender, in the principal amount of the Swing Line Sublimit then in effect and with other appropriate insertions.
9.8 Collateral Documents and Guaranty.
(a) Agents Under Collateral Documents and Guaranty. Each Secured Party hereby further
authorizes Administrative Agent or Collateral Agent, as applicable, on behalf of and for the benefit of Secured Parties, to be the agent for and representative of Secured Parties with respect to the Guaranty, the Collateral and the Collateral
Documents; provided that neither Administrative Agent nor Collateral Agent shall owe any fiduciary duty, duty of loyalty, duty of care, duty of disclosure or any other obligation whatsoever to any holder of Obligations with respect to any
Hedge Agreement. Subject to Section 10.5, without further written consent or authorization from any Secured Party, Administrative Agent or Collateral Agent, as applicable may execute any documents or instruments necessary to (i) in
connection with a sale or disposition of assets permitted by this Agreement, release any Lien encumbering any item of Collateral that is the subject of such sale or other disposition of assets or to which Requisite Lenders (or such other Lenders as
may be required to give such consent under Section 10.5) have otherwise consented or (ii) release any Guarantor from the Guaranty pursuant to Section 7.12 or with respect to which Requisite Lenders (or such other Lenders as may be
required to give such consent under Section 10.5) have otherwise consented. Collateral Agent further declares that it holds all Australian Collateral acquired by the Collateral Agent after the date hereof on trust for the benefit of the Secured
Parties from time to time (it being understood that the provisions of this Section 9 apply to Collateral Agent in its capacity as trustee of such trust).
(b) Right to Realize on Collateral and Enforce Guaranty. Anything contained in any of
the Credit Documents to the contrary notwithstanding, Borrower, Administrative Agent, Collateral Agent and each Secured Party hereby agree that (i) no Secured Party shall have any right individually to realize upon any of the Collateral or to
enforce the Guaranty, it being understood and agreed that all powers, rights and remedies hereunder may be exercised solely by Administrative Agent, on behalf of the Secured Parties in accordance with the terms hereof and all powers, rights and
remedies under the Collateral Documents may be exercised solely by Collateral Agent, and (ii) in the event of a foreclosure by Collateral Agent on any of the Collateral pursuant to a public or private sale or other disposition, Collateral Agent
or any Lender may be the purchaser or licensor of any or all of such Collateral at any such sale or other disposition and Collateral Agent, as agent for and representative of Secured Parties (but not any Lender or Lenders in its or their respective
individual capacities unless Requisite Lenders shall otherwise agree in writing) shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public
sale, to use and apply any of the Obligations as a credit on account of the purchase price for any collateral payable by Collateral Agent at such sale or other disposition.
(c) Rights Under Hedge Agreements and Cash Management Agreements. No Hedge Agreement or
Cash Management Agreement will create (or be deemed to create) in favor of any Lender Counterparty that is a party thereto any rights in connection with the management or release of any Collateral or of the obligations of any Guarantor under the
Credit Documents except as expressly provided in Section 10.5(c)(v) of this Agreement, Section 9.2 of the Second Amended and Restated Pledge and Security Agreement and the analogous sections of any other Collateral Documents. By accepting
the benefits of the Collateral, such Lender Counterparty shall be deemed to have appointed Collateral Agent as its agent and agreed to be bound by the Credit Documents as a Secured Party, subject to the limitations set forth in this clause (c).
(d) Release of Collateral and Guarantees, Termination of Credit Documents.
Notwithstanding anything to the contrary contained herein or any other Credit Document, when all Obligations (other than obligations in respect of any Hedge Agreement or Cash Management Agreement) have been paid in full, all Commitments have
terminated or expired and no Letter of Credit shall be outstanding (unless the outstanding amounts under all such Letters of Credit
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have been cash collateralized in a manner reasonably satisfactory to Issuing Bank or, if satisfactory to Issuing Bank in its sole discretion, a backstop Letter of Credit is in place), upon
request of Borrower, (i) Collateral Agent shall (without notice to, or vote or consent of, any Lender, or any Affiliate of any Lender or any Lender Counterparty that is a party to any Hedge Agreement or Cash Management Agreement) take such
actions as shall be required to release its security interest in all Collateral, and (ii) Administrative Agent shall (without notice to, or vote or consent of, any Lender, or any Affiliate of any Lender or any Lender Counterparty that is a
party to any Hedge Agreement or Cash Management Agreement) take such actions as shall be required to release all guarantee obligations provided for in any Credit Document, whether or not on the date of such release there may be outstanding
Obligations in respect of Hedge Agreements or Cash Management Agreements (and, subject to the next succeeding sentence, the provisions of Section 7 shall cease to apply). Any such release of guarantee obligations shall be deemed subject to the
provision that such guarantee obligations shall be reinstated if after such release any portion of any payment in respect of the Obligations guaranteed thereby shall be rescinded or must otherwise be restored or returned upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, Borrower or any Guarantor or any
substantial part of its property, or otherwise, all as though such payment had not been made. In addition, upon (a) any disposition of property permitted by this Agreement to a Person that is not a Credit Party, the Liens granted thereon shall
be deemed to be automatically released and such property shall automatically revert to the applicable Grantor with no further action on the part of any Person and (b) the consummation of any transaction permitted by the Credit Agreement as a
result of which a Guarantor ceases to be a Subsidiary of Borrower, such Guarantor shall automatically be released from its obligations hereunder and under the Collateral Documents and the guaranty and security interest in the Collateral of such
Guarantor shall automatically be released.
(e) Intercreditor Agreements. Each
Secured Party hereby further authorizes the Administrative Agent or Collateral Agent, as applicable, on behalf of and for the benefit of the Secured Parties, without the further consent or acquiescence of the Secured Parties, to enter into
intercreditor agreements required under, or in connection with, any Indebtedness permitted under Sections 6.1(q) or (s) that is secured by a Lien ranking pari passu with the Liens securing the Obligations, in each case in form and substance
reasonably satisfactory to the Administrative Agent or Collateral Agent, as applicable.
9.9 Withholding Taxes. To the extent required by any Applicable Law, Administrative
Agent may withhold from any payment to any Lender (which term shall include Swing Line Lender and Issuing Bank for purposes of this Section 9.9) an amount equivalent to any applicable withholding tax. If the Internal Revenue Service or any
other Governmental Authority asserts a claim that Administrative Agent did not properly withhold Tax from amounts paid to or for the account of any Lender because the appropriate form was not delivered or was not properly executed or because such
Lender failed to notify Administrative Agent of a change in circumstance which rendered the exemption from, or reduction of, withholding tax ineffective or for any other reason, such Lender shall indemnify fully and hold harmless Administrative
Agent (to the extent that the Administrative Agent has not already been reimbursed by Borrower pursuant to Section 2.20 and without limiting or expanding the obligation of Borrower to do so) for all amounts paid, directly or indirectly, by the
Administrative Agent as Taxes or otherwise, together with all expenses incurred, including legal expenses and any other out-of-pocket expenses, whether or not such Tax was correctly or legally imposed or asserted by the relevant governmental
authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. The agreements in this Section 9.9 shall survive the resignation and/or
replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender, the termination of the Agreement and the repayment, satisfaction or discharge of all other Obligations.
9.10 Quebec Security. To the extent that any Canadian Credit Party now or in the future
is required to grant security pursuant to the laws of the Province of Quebec, each Agent (other than the Collateral Agent) and Lender acting for itself and on behalf of all present and future Affiliates of such Agent or Lender that are or become a
Lender Counterparty, hereby irrevocably authorizes and appoints the Collateral Agent to act as the holder of an irrevocable power of attorney (fondé de pouvoir) (within the meaning of Article 2692 of the Civil Code of Quebec) in
order to hold any hypothec granted under the laws of the Province of Quebec as security for any debenture, bond or other title of indebtedness that may be issued by any Canadian Credit Party and to exercise such rights and duties as are conferred
upon a fondé de pouvoir under the relevant deed of hypothec and applicable laws (with the power to delegate any such rights or duties). Moreover, in respect of any pledge by any such Canadian Credit Party of any such debenture, bond or
other title of indebtedness as security in respect of any Obligations, the Collateral Agent shall also be authorized to
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hold such debenture, bond or other title of indebtedness as agent, mandatary, custodian and pledgee for the benefit of the Agents, the Lenders and the Lender Counterparties, the whole
notwithstanding the provisions of Section 32 of the An Act respecting the Special Powers of Legal Persons (Quebec). The execution prior to the date hereof by the Collateral Agent of any deed of hypothec or other security documents made
pursuant to the laws of the Province of Quebec, is hereby ratified and confirmed. Any person who becomes a Lender, Issuing Bank, an Agent or a Lender Counterparty shall be deemed to have consented to and ratified the foregoing appointment of each of
the Collateral Agent as fondé de pouvoir, agent, mandatary and custodian on behalf of all Agents, Issuing Banks, Lenders and the Lender Counterparties, including such person. For greater certainty, the Collateral Agent, when acting as
the holder of an irrevocable power of attorney (fondé de pouvoir), shall have the same rights, powers, immunities, indemnities and exclusions from liability as are prescribed in favour of the Collateral Agent in this Agreement, which
shall apply mutatis mutandis. In the event of the resignation and appointment of a successor Collateral Agent, such successor of the Collateral Agent shall also act as the holder of an irrevocable power of attorney (fondé de
pouvoir), and as agent, mandatary and custodian for the purposes set forth above. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender.
SECTION 10. |
MISCELLANEOUS |
10.1 Notices.
(a) Notices Generally. Any notice or other communication herein required or
permitted to be given to a Credit Party, Co-Syndication Agent, Collateral Agent, Administrative Agent or Swing Line Lender, shall be sent to such Persons address as set forth on Appendix B or in the other relevant Credit Document, and in the
case of Issuing Bank or Lender, the address as indicated on Appendix B or otherwise indicated to Administrative Agent in writing. Except as otherwise set forth in Section 3.3(b) or paragraph (b) below, each notice hereunder shall be in
writing and may be personally served or sent by telefacsimile (except for any notices sent to Administrative Agent) or United States mail or Canada Post or courier service and shall be deemed to have been given when delivered in person or by courier
service and signed for against receipt thereof, upon receipt of telefacsimile, or three Business Days after depositing it in the United States mail or Canada Post with postage prepaid and properly addressed; provided that no notice to any
Agent shall be effective until received by such Agent; provided further that any such notice or other communication shall at the request of the Administrative Agent be provided to any sub-agent appointed pursuant to Section 9.3(c) hereto
as designated by the Administrative Agent from time to time.
(b) Electronic
Communications. (1) Notices and other communications to Lenders and the Issuing Bank hereunder may be delivered or furnished by electronic communication (including e mail and Internet or intranet websites, including the Platform) pursuant
to procedures approved by Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the Issuing Bank pursuant to Section 2 if such Lender or Issuing Bank, as applicable, has notified Administrative
Agent that it is incapable of receiving notices under such Section by electronic communication. Administrative Agent or Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications. Unless Administrative Agent otherwise prescribes, (i) notices and other communications sent to an
e-mail address shall be deemed received upon the senders receipt of an acknowledgement from the intended recipient (such as by the return receipt requested function, as available, return e-mail or other written acknowledgement),
provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the
recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of
notification that such notice or communication is available and identifying the website address therefor.
(2) Each Credit Party understands that the distribution of material through an electronic
medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution and agrees and assumes the risks associated with such electronic distribution, except to the extent caused by the willful
misconduct or gross negligence of Administrative Agent, as determined by a final, non-appealable judgment of a court of competent jurisdiction.
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(3) The Platform and any Approved Electronic
Communications are provided as is and as available. None of the Agents nor any of their respective officers, directors, employees, agents, advisors or representatives (the Agent Affiliates) warrant the
accuracy, adequacy, or completeness of the Approved Electronic Communications or the Platform and each expressly disclaims liability for errors or omissions in the Platform and the Approved Electronic Communications. No warranty of any kind,
express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects is made by the Agent Affiliates in connection with the
Platform or the Approved Electronic Communications.
(4) Each Credit Party, each Lender,
Issuing Bank and each Agent agrees that Administrative Agent may, but shall not be obligated to, store any Approved Electronic Communications on the Platform in accordance with Administrative Agents customary document retention procedures and
policies.
(5) Any notice of Default or Event of Default may be provided by telephone if
confirmed promptly thereafter by delivery of written notice thereof.
(c) Private Side
Information Contacts. Each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the Private Side Information or similar designation on the content declaration
screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lenders compliance procedures and Applicable Law, including United States federal and state securities laws, to make reference to
information that is not made available through the Public Side Information portion of the Platform and that may contain Non-Public Information with respect to Borrower, its Subsidiaries or their securities for purposes of Applicable Law,
including United States federal or state securities laws.
10.2 Expenses. Whether
or not the transactions contemplated hereby shall be consummated, Borrower agrees to pay promptly (a) all the actual and reasonable out-of-pocket costs and expenses incurred in connection with the negotiation, preparation and execution of the
Credit Documents and any consents, amendments, waivers or other modifications thereto; (b) all the reasonable out-of-pocket costs of furnishing all opinions by counsel for Borrower and the other Credit Parties; (c) the reasonable and
documented out-of-pocket fees, expenses and disbursements of counsel to Agents and Issuing Bank in connection with the negotiation, preparation, execution and administration of the Credit Documents and any consents, amendments, waivers or other
modifications thereto and any other documents or matters requested by Borrower; (d) all the actual costs and reasonable out-of-pocket expenses of creating, perfecting, recording, maintaining and preserving Liens in favor of Collateral Agent,
for the benefit of Secured Parties, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, title insurance premiums and reasonable fees, expenses and disbursements of counsel to each Agent and of counsel
providing any opinions that any Agent or Requisite Lenders may request in respect of the Collateral or the Liens created pursuant to the Collateral Documents; (e) all the actual costs and reasonable out-of-pocket fees, expenses and
disbursements of any auditors, accountants, consultants or appraisers; (f) all the actual costs and reasonable out-of-pocket expenses (including the reasonable fees, expenses and disbursements of any appraisers, consultants, advisors and agents
employed or retained by Collateral Agent and its counsel) in connection with the custody or preservation of any of the Collateral; (g) all other actual and reasonable out-of-pocket costs and expenses incurred by each Agent or Issuing Bank in
connection with the syndication of the Loans, including for purposes of this Section 10.2, Letters of Credit and Commitments and the transactions contemplated by the Credit Documents and any consents, amendments, waivers or other
modifications thereto; and (h) after the occurrence of a Default or an Event of Default, all out-of-pocket costs and expenses, including reasonable attorneys fees and costs of settlement, incurred by any Agent, Issuing Bank and Lender in
enforcing any Obligations of or in collecting any payments due from any Credit Party hereunder or under the other Credit Documents by reason of such Default or Event of Default (including in connection with the sale, lease or license of, collection
from, or other realization upon any of the Collateral or the enforcement of the Guaranty) or in connection with any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a work-out or pursuant to any
insolvency or bankruptcy cases or proceedings.
10.3 Indemnity.
(a) In addition to the payment of expenses pursuant to Section 10.2, whether or not the
transactions contemplated hereby shall be consummated, each Credit Party agrees to defend indemnify, pay and hold harmless each Agent, Issuing Bank and Lender and the officers, partners, members, directors, trustees, advisors, employees,
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agents, sub-agents and Affiliates of each Agent, Issuing Bank and each Lender (each, an Indemnitee), from and against any and all Indemnified Liabilities, in all cases, whether
or not caused by or arising, in whole or in part, out of the negligence of such Indemnitee; provided that no Credit Party shall have any obligation to any Indemnitee hereunder with respect to any Indemnified Liabilities to the extent such
Indemnified Liabilities arise from the gross negligence or willful misconduct of that Indemnitee, in each case as determined by a final, non-appealable judgment of a court of competent jurisdiction, or if such Indemnified Liabilities result from any
action, suit or proceeding in contract brought by a Credit Party for direct damages (as opposed to special, indirect, consequential or punitive damages) against such Indemnitee for a material breach by such Indemnitee of its obligations under any
Credit Document that is determined in favor of such Credit Party by a final, non-appealable judgment of a court of competent jurisdiction. To the extent that the undertakings to defend, indemnify, pay and hold harmless set forth in this
Section 10.3 apply but are unenforceable in whole or in part because they are violative of any law or public policy, the applicable Credit Party shall contribute the maximum portion that it is permitted to pay and satisfy under Applicable Law
to the payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them.
(b)
To the extent permitted by Applicable Law, no Credit Party shall assert, and each Credit Party hereby waives, any claim against each Lender, each Agent, Issuing Bank, Arranger and their respective
Affiliates, directors, employees, attorneys, agents or sub-agents, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) (whether or not the claim therefor is based on contract,
tort or duty imposed by any applicable legal requirement) arising out of, in connection with, as a result of, or in any way related to, this Agreement or any Credit Document or any agreement or instrument contemplated hereby or thereby or referred
to herein or therein, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof or any act or omission or event occurring in connection therewith, and each Credit Party hereby waives, releases and agrees not to sue
upon any such claim or any such damages, whether or not accrued and whether or not known or suspected to exist in its favor. No Indemnitee referred to above shall be liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby.
10.4 Set-Off. In addition to any rights now or hereafter granted under Applicable
Law and not by way of limitation of any such rights, upon the occurrence of any Event of Default each Lender is hereby authorized by each Credit Party at any time or from time to time subject to the consent of Administrative Agent (such consent not
to be unreasonably withheld or delayed), to set-off and to appropriate and to apply any and all deposits (general or special, including Indebtedness evidenced by certificates of deposit, whether matured or unmatured, but not including trust accounts
(in whatever currency)) and any other Indebtedness at any time held or owing by such Lender to or for the credit or the account of any Credit Party (in whatever currency) against and on account of the obligations and liabilities of any Credit Party
to such Lender hereunder, the Letters of Credit and participations therein and under the other Credit Documents, including all claims of any nature or description arising out of or connected hereto, the Letters of Credit and participations therein
or with any other Credit Document, irrespective of whether or not (a) such Lender shall have made any demand hereunder or (b) the principal of or the interest on the Loans or any amounts in respect of the Letters of Credit or any other
amounts due hereunder shall have become due and payable pursuant to Section 2 and although such obligations and liabilities, or any of them, may be contingent or unmatured. The applicable Lender shall notify Borrower and Administrative Agent of
such set-off and application, provided that any failure or any delay in giving such notice shall not affect the validity of any such set-off and application under this Section 10.4.
10.5 Amendments and Waivers.
(a) Requisite Lenders Consent. Subject to the additional requirements of Sections
10.5(b) and 10.5(c), no amendment, modification, termination or waiver of any provision of the Credit Documents, or consent to any departure by any Credit Party therefrom, shall in any event be effective without the written concurrence of the
Requisite Lenders; provided, that Administrative Agent may, with the consent of Borrower only, amend, modify or supplement this Agreement to cure any ambiguity, omission, defect or inconsistency, so long as such amendment, modification or
supplement does not adversely affect the rights of any Lender or Issuing Bank.
(b)
Affected Lenders Consent. Without the written consent of each Lender that would be directly affected thereby, no amendment, modification, termination, or consent shall be effective if the effect thereof would:
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(i) extend the scheduled final
maturity of any Loan or Note;
(ii) waive, reduce or postpone any
scheduled repayment (but not prepayment);
(iii) extend the stated
expiration date of any Letter of Credit beyond the Revolving Commitment Termination Date;
(iv)
reduce the rate of interest on any Loan (other than any waiver of any increase in the interest rate applicable to any Loan pursuant to Section 2.10) or any fee or any premium or other amount
payable hereunder;
(v) extend the time for payment of any such interest
or fees;
(vi) reduce the principal amount of any Loan or any
reimbursement obligation in respect of any Letter of Credit;
(vii) amend,
modify, terminate or waive any provision of Section 2.13(b)(iii), this Section 10.5(b), Section 10.5(c) or any other provision of this Agreement that expressly provides that the consent of all Lenders is required or for the pro rata
treatment among Lenders;
(viii) amend the definition of Requisite
Lenders or Pro Rata Share; provided, with the consent of Requisite Lenders, additional extensions of credit pursuant hereto may be included in the determination of Requisite Lenders or Pro Rata Share
on substantially the same basis as the Term Loan Commitments, the Term Loans, Revolving Commitments and the Revolving Loans are included on the Second Restatement Date;
(ix) release all or substantially all of the Collateral or all or
substantially all of the Guarantors from the Guaranty except as expressly provided in the Credit Documents; or
(x)
consent to the assignment or transfer by any Credit Party of any of its rights and obligations under any Credit Document;
provided that for the avoidance of doubt, all Lenders shall be deemed directly affected thereby with respect to any amendment described in clauses
(vii), (viii), (ix) and (x).
(c) Other Consents. No amendment, modification,
termination or waiver of any provision of the Credit Documents, or consent to any departure by any Credit Party therefrom, shall:
(i) increase any Revolving Commitment of any Lender over the amount thereof
then in effect without the consent of such Lender; provided that no amendment, modification or waiver of any condition precedent, covenant, Default or Event of Default shall constitute an increase in any Revolving Commitment of any Lender;
(ii) amend, modify, terminate or waive any provision hereof relating to
the Swing Line Sublimit or the Swing Line Loans without the consent of Swing Line Lender;
(iii) alter the required application of any repayments or prepayments as
between Classes pursuant to Section 2.17 without the consent of Lenders holding more than 50% of the aggregate Tranche A Term Loan Exposure of all Lenders, Tranche B Term Loan Exposure of all Lenders, New Term Loan Exposure of all Lenders,
Revolving Exposure of all Lenders, as applicable, of each Class which is being allocated a lesser repayment or prepayment as a result thereof; provided that Requisite Lenders may waive, in whole or in part, any prepayment so long as the
application, as between Classes, of any portion of such prepayment which is still required to be made is not altered;
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(iv) amend, modify, terminate or
waive any obligation of Lenders relating to the purchase of participations in Letters of Credit as provided in Section 2.4(e) without the written consent of Administrative Agent and of Issuing Bank;
(v) amend, modify or waive this Agreement, the Second Amended and Restated
Pledge and Security Agreement, the Canadian Pledge and Security Agreement, the Quebec Security Documents, the Barbados Security Documents, the Luxembourg Security Documents or the Swiss Security Documents, so as to alter the ratable treatment of
Obligations arising under the Credit Documents and Obligations arising under Hedge Agreements or Cash Management Agreements or the definition of Lender Counterparty, Hedge Agreement, Cash Management Agreement,
Obligations, or Secured Obligations (as defined in any applicable Collateral Document) in each case in a manner adverse to any Lender Counterparty with Obligations then outstanding without the written consent of any such
Lender Counterparty;
(vi) amend, modify, terminate or waive any provision
of Section 9 as the same applies to any Agent, or any other provision hereof as the same applies to the rights or obligations of any Agent, in each case without the consent of such Agent;
(vii) amend any provision relating solely to the Delayed Draw Commitments
without the written consent of Lenders holding a majority in aggregate principal amount of the Delayed Draw Commitments;
(viii) increase any Delayed Draw Commitment of any Lender over the amount
thereof then in effect without the consent of such Lender; provided that no amendment, modification or waiver of any condition precedent, covenant, Default or Event of Default shall constitute an increase in any Delayed Draw Commitment of any
Lender; or
(ix) waive any condition to the making of any Revolving Loan
or Delayed Draw Term Loan without the consent of a majority in interest of the Lenders holding Revolving Commitments or Delayed Draw Commitments, as applicable.
(d) Notwithstanding Section 10.5(a) , any such agreement that shall extend the Revolving
Commitment Termination Date or the Term Loan Maturity Date, as applicable, of one or more Lenders (the Extending Lender) and does not amend any other provision of this Agreement or the Credit Documents other than to change the
Applicable Margin of Extending Lenders shall only require the consent of Borrower, the Administrative Agent and the Extending Lenders.
Notwithstanding
anything to the contrary, without the consent of any other Person, the applicable Credit Party or Credit Parties and the Administrative Agent and/or Collateral Agent may (in its or their respective sole discretion, or shall, to the extent required
by any Credit Document) enter into any amendment or waiver of any Credit Document, or enter into any new agreement or instrument, to effect the granting, perfection, protection, expansion or enhancement of any security interest in Collateral or
additional property to become Collateral for the benefit of the Secured Parties, or as required by local law to give effect to, or protect any security interest for the benefit of the Secured Parties, in any property or so that the security
interests therein comply with applicable law.
(e) Execution of Amendments, etc.
Administrative Agent may, but shall have no obligation to, with the concurrence of any Lender, execute amendments, modifications, waivers or consents on behalf of such Lender. Any waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given. No notice to or demand on any Credit Party in any case shall entitle any Credit Party to any other or further notice or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 10.5 shall be binding upon each Lender at the time outstanding, each future Lender and, if signed by a Credit Party, on such Credit Party.
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10.6 Successors and Assigns; Participations.
(a) Generally. This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of Lenders. No Credit Partys rights or obligations hereunder nor any interest therein may be assigned or delegated by
any Credit Party without the prior written consent of all Lenders. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, Indemnitee Agent Parties under Section 9.6 and
Indemnitees under Section 10.3, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, Affiliates of each of the Agents and Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Register. Borrower, Administrative Agent and Lenders
shall deem and treat the Persons listed as Lenders in the Register as the holders and owners of the corresponding Commitments and Loans listed therein for all purposes hereof, and no assignment or transfer of any such Commitment or Loan shall be
effective, in each case, unless and until recorded in the Register following receipt of a fully executed Assignment Agreement effecting the assignment or transfer thereof, together with the required forms and certificates regarding tax matters and
any fees payable in connection with such assignment, in each case, as provided in Section 10.6(d). Each assignment shall be recorded in the Register promptly following receipt by the Administrative Agent of the fully executed Assignment
Agreement and all other necessary documents and approvals, prompt notice thereof shall be provided to Borrower and a copy of such Assignment Agreement shall be maintained, as applicable. The date of such recordation of a transfer shall be referred
to herein as the Assignment Effective Date. Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is listed in the Register as a Lender shall be conclusive and
binding on any subsequent holder, assignee or transferee of the corresponding Commitments or Loans, absent manifest error.
(c) Right to Assign. Each Lender shall have the right at any time to sell, assign or
transfer all or a portion of its rights and obligations under this Agreement, including all or a portion of its Commitment or Loans owing to it or other Obligations; provided, however, that (x) pro rata assignments shall not be
required and (y) each assignment, other than pursuant to Section 10.6(h), shall be of a uniform, and not varying, percentage of all rights and obligations under and in respect of any Loan and any related Commitments):
(i) to any Person meeting the criteria of clause (i) of the definition of
the term Eligible Assignee upon the giving of notice to Borrower and Administrative Agent and with the prior written consent (such consent not to be unreasonably withheld or delayed) of Issuing Bank at the time of such assignment in the
case of assignments of Revolving Loans or Revolving Commitments; and
(ii)
to any Person meeting the criteria of clause (ii) of the definition of the term Eligible Assignee upon giving of notice to Borrower and Administrative Agent and, (x) in the case of assignments of Tranche A Term Loans, Tranche B
Term Loans, Revolving Loans or Revolving Commitments to any such Person (except in the case of assignments made by or to Barclays or any of its affiliates), consented to by each of Borrower and Administrative Agent and (y) in the case of
assignments of Revolving Loans or Revolving Commitments to any such Person, consented to by Issuing Bank; provided that any such consent (x) shall not be unreasonably withheld or delayed or (y) in the case of Borrower shall not be
required at any time an Event of Default shall have occurred and then be continuing; provided, further that (A) each such assignment pursuant to this Section 10.6(c)(ii) shall be in an aggregate amount of not less than
$1,000,000 (or such lesser amount as may be agreed to by Borrower and Administrative Agent or as shall constitute the aggregate amount of the Tranche B Term Loans, Revolving Commitments and Revolving Loans of the assigning Lender) with respect to
the assignment of the Tranche B Term Loans, Revolving Commitments and Revolving Loans, and $2,500,000 (or such lesser amount as may be agreed to by Borrower and Administrative Agent or as shall constitute the aggregate of the Tranche A Term Loan)
with respect to the assignment of Tranche A Term Loans and (B) any required Borrower consent shall be deemed to have been given to any assignment of Loans or Commitments unless it shall object thereto by written notice to Administrative Agent
within 5 Business Days after having received notice thereof.
(d) Mechanics.
Assignments and assumptions of Loans and Commitments by Lenders shall be effected by manual execution and delivery to Administrative Agent of an Assignment Agreement. Assignments made
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pursuant to the foregoing provision shall be effective as of the Assignment Effective Date. In connection with all assignments there shall be delivered to Administrative Agent such forms,
certificates or other evidence, if any, with respect to United States federal income tax withholding matters as the assignee under such Assignment Agreement may be required to deliver pursuant to Section 2.20(d), together with payment to
Administrative Agent of a registration and processing fee of $3,500 (except that no such registration and processing fee shall be payable (x) in connection with an assignment by or to Barclays or any Affiliate thereof or (y) in the case of
an assignee which is already a Lender or is an Affiliate or Related Fund of a Lender or a Person under common management with a Lender).
(e) Representations and Warranties of Assignee. Each Lender, upon execution and
delivery hereof or upon succeeding to an interest in the Commitments and Loans, as the case may be, represents and warrants as of the Third Restatement Date or as of the Assignment Effective Date that (i) it is an Eligible Assignee;
(ii) it has experience and expertise in the making of or investing in commitments or loans such as the applicable Commitments or Loans, as the case may be; and (iii) it will make or invest in, as the case may be, its Commitments or Loans
for its own account in the ordinary course and without a view to distribution of such Commitments or Loans within the meaning of the Securities Act or the Exchange Act or other federal securities laws (it being understood that, subject to the
provisions of this Section 10.6, the disposition of such Revolving Commitments or Loans or any interests therein shall at all times remain within its exclusive control).
(f) Effect of Assignment. Subject to the terms and conditions of this
Section 10.6, as of the Assignment Effective Date (i) the assignee thereunder shall have the rights and obligations of a Lender hereunder to the extent of its interest in the Loans and Commitments so assigned as
reflected in the Register and shall thereafter be a party hereto and a Lender for all purposes hereof; (ii) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned to the
assignee, relinquish its rights (other than any rights which survive the termination hereof under Section 10.8) and be released from its obligations hereunder (and, in the case of an assignment covering all or the remaining portion of an
assigning Lenders rights and obligations hereunder, such Lender shall cease to be a party hereto on the Assignment Effective Date); provided that anything contained in any of the Credit Documents to the contrary notwithstanding,
(y) Issuing Bank shall continue to have all rights and obligations thereof with respect to such Letters of Credit until the cancellation or expiration of such Letters of Credit and the reimbursement of any amounts drawn thereunder and
(z) such assigning Lender shall continue to be entitled to the benefit of all indemnities hereunder as specified herein with respect to matters arising out of the prior involvement of such assigning Lender as a Lender hereunder; (iii) the
Commitments shall be modified to reflect any Commitment of such assignee and any Revolving Commitment of such assigning Lender, if any; and (iv) if any such assignment occurs after the issuance of any Note hereunder, the assigning Lender shall,
upon the effectiveness of such assignment or as promptly thereafter as practicable, surrender its applicable Notes to Administrative Agent for cancellation, and thereupon Borrower shall issue and deliver new Notes, if so requested by the assignee
and/or assigning Lender, to such assignee and/or to such assigning Lender, with appropriate insertions, to reflect the new Commitments and/or outstanding Loans of the assignee and/or the assigning Lender.
(g) Participations.
(1) Each Lender shall have the right at any time to sell one or more participations to any
Person (other than Borrower, its Subsidiaries or any of its Affiliates) in all or any part of its Commitments or Loans or in any other Obligation.
(2) The holder of any such participation, other than an Affiliate of the Lender granting such
participation, shall not be entitled to require such Lender to take or omit to take any action hereunder except that the participation agreement may provide that the Lender must first obtain the participants consent with respect to any
amendment, modification or waiver that would (A) extend the final scheduled maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is not extended beyond the Revolving Commitment Termination Date) in which such participant
is participating, or reduce the rate or extend the time of payment of interest or fees thereon (except in connection with a waiver of applicability of any post default increase in interest rates) or reduce the principal amount thereof, or increase
the amount of the participants participation over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Commitment shall not constitute a change in the terms
of such participation, and that an increase in any Commitment or Loan shall be permitted without the consent of any participant if the participants participation is not increased as a result thereof),
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(B) consent to the assignment or transfer by any Credit Party of any of its rights and obligations under this Agreement or (C) release all or substantially all of the Collateral under the
Collateral Documents (except as expressly provided in the Credit Documents) supporting the Loans hereunder in which such participant is participating. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary
agent of Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participants interest in the Loans or other obligations under this Agreement (the
Participant Register). The entries in the Participant Register shall be conclusive and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of
this Agreement notwithstanding any notice to the contrary.
(3) Borrower agrees that each
participant shall be entitled to the benefits of Sections 2.18(c), 2.19 and 2.20 to the same extent as if it were a Lender (subject to the requirements and limitations thereof, including the requirement to provide forms under Section 2.20(d))
and had acquired its interest by assignment pursuant to paragraph (c) of this Section; provided that a participant shall not be entitled to receive any greater payment under Section 2.19 or 2.20 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such participant, except to the extent that entitlement to a greater payment results from a change in law that occurs after such Participant acquires the applicable participation. To
the extent permitted by law, each participant also shall be entitled to the benefits of Section 10.4 as though it were a Lender, provided such participant agrees to be subject to Section 2.17 as though it were a Lender.
(h) SPC. Notwithstanding anything to the contrary contained herein, any Lender (a
Granting Lender) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to Administrative Agent and Borrower (an SPC) the option to provide all or
any part of any Loan that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects
not to exercise such option or otherwise fails to make all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof. Each party hereto hereby agrees that (i) an SPC shall be entitled to the
benefits of Sections 2.18(c), 2.19 and 2.20 to the same extent as if it were a Lender (subject to the requirements and limitations thereof, including the requirement to provide forms under Section 2.20(d)) and had acquired its interest by
assignment pursuant to paragraph (c) of this Section; provided that an SPC shall not be entitled to receive any greater payment under Section 2.19 or 2.20 than the applicable Lender would have been entitled to receive with respect
to the Loans subject to such option, except to the extent that entitlement to a greater payment results from a change in law that occurs after such SPC acquires such option, (ii) no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement for which a Lender would be liable, and (iii) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Credit Document, remain the
lender of record hereunder. The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. Notwithstanding anything to the contrary contained
herein, any SPC may (i) with notice to, but without prior consent of Borrower and Administrative Agent and with the payment of a processing fee of $3,500, assign all or any portion of its right to receive payment with respect to any Loan to the
Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or Guarantee or credit or liquidity enhancement to
such SPC.
(i) Certain Other Assignments and Participations. In addition to any
other assignment or participation permitted pursuant to this Section 10.6, any Lender may assign and/or pledge all or any portion of its Loans, the other Obligations owed by or to such Lender, and its Notes, if any, to secure obligations of
such Lender including any Federal Reserve Bank or any central bank having jurisdiction over such Lender as collateral security pursuant to Regulation A of the Board of Governors and any operating circular issued by such Federal Reserve Bank or such
other central bank having jurisdiction over such Lender; provided that no Lender, as between Borrower and such Lender, shall be relieved of any of its obligations hereunder as a result of any such assignment and pledge, and provided
further that in no event shall the applicable Federal Reserve Bank, pledgee or trustee be considered to be a Lender or be entitled to require the assigning Lender to take or omit to take any action hereunder.
10.7 Independence of Covenants. All covenants hereunder shall be given independent
effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an
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exception to, or would otherwise be within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.
10.8 Survival of Representations, Warranties and Agreements. All representations,
warranties and agreements made herein shall survive the execution and delivery hereof and the making of any Credit Extension. Notwithstanding anything herein or implied by law to the contrary, the agreements of each Credit Party set forth in
Sections 2.18(c), 2.19, 2.20, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.17, 9.3(b) and 9.6 shall survive the payment of the Loans, the cancellation or expiration of the Letters of Credit and the reimbursement of any
amounts drawn thereunder, and the termination hereof.
10.9 No Waiver; Remedies
Cumulative. No failure or delay on the part of any Agent or any Lender in the exercise of any power, right or privilege hereunder or under any other Credit Document shall impair such power, right or privilege or be construed to be a waiver of
any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege. The rights, powers and remedies given to each
Agent and each Lender hereby are cumulative and shall be in addition to and independent of all rights, powers and remedies existing by virtue of any statute or rule of law or in any of the other Credit Documents or any of the Hedge Agreements or
Cash Management Agreements. Any forbearance or failure to exercise, and any delay in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the
further exercise of any such right, power or remedy.
10.10 Marshalling; Payments Set
Aside. Neither any Agent nor any Lender shall be under any obligation to marshal any assets in favor of any Credit Party or any other Person or against or in payment of any or all of the Obligations. To the extent that any Credit Party makes a
payment or payments to Administrative Agent or Lenders (or to Administrative Agent, on behalf of Lenders), or any Agent or Lenders enforce any security interests or exercise their rights of set-off, and such payment or payments or the proceeds of
such enforcement or set-off or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, any other state,
provincial, territorial or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or set-off had not occurred.
10.11 Severability. In case any provision in or obligation hereunder or under any other
Credit Document shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way
be affected or impaired thereby.
10.12 Obligations Several; Independent Nature of
Lenders Rights. The obligations of Lenders hereunder are several and no Lender shall be responsible for the obligations or Commitment of any other Lender hereunder. Nothing contained herein or in any other Credit Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a partnership, an association, a joint venture or any other kind of entity. The amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its rights arising out hereof and it shall not be necessary for any other Lender to be joined as an additional party in any proceeding for such purpose.
10.13 Headings. Section headings herein are included herein for convenience of
reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect.
10.14 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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10.15 CONSENT TO JURISDICTION.
(a) SUBJECT TO CLAUSE (E) OF THE FOLLOWING SENTENCE, ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST ANY PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENTS, OR ANY OF THE OBLIGATIONS, SHALL BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE BOROUGH OF MANHATTAN IN THE STATE, COUNTY AND CITY OF NEW
YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE EXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS (OTHER THAN WITH
RESPECT TO ACTIONS BY ANY AGENT IN RESPECT OF RIGHTS UNDER ANY COLLATERAL DOCUMENT GOVERNED BY LAWS OTHER THAN THE LAWS OF THE STATE OF NEW YORK OR WITH RESPECT TO ANY COLLATERAL SUBJECT THERETO); (B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.1;
(D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT; AND (E) AGREES THAT AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION WITH THE
EXERCISE OF ANY RIGHTS UNDER ANY SECURITY DOCUMENT OR THE ENFORCEMENT OF ANY JUDGMENT.
(b) EACH CREDIT PARTY THAT IS ORGANIZED UNDER THE LAWS OF A JURISDICTION OUTSIDE THE UNITED
STATES HEREBY APPOINTS VPI AS ITS AGENT FOR SERVICE OF PROCESS IN ANY MATTER RELATED TO THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS AND VPI HEREBY ACCEPTS SUCH APPOINTMENT.
10.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING
ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS
AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH
WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 10.16 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT
OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.17 Confidentiality. Each Agent and each Lender (which term shall for the purposes of
this Section 10.17 include the Issuing Bank) shall hold all Non-Public Information regarding Borrower and its Subsidiaries and
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their businesses identified as such by Borrower or such Subsidiary (or which is reasonably apparent to be of a confidential nature, even if not so identified) and obtained by such Agent and such
Lender pursuant to the requirements hereof in accordance with such Agents and such Lenders customary procedures for handling confidential information of such nature, it being understood and agreed by Borrower that, in any event, the
Administrative Agent may disclose such information to the Lenders and each Agent and each Lender may make (i) disclosures of such information to Affiliates of such Lender and to their respective agents and advisors (and to other Persons
authorized by a Lender or Agent to organize, present or disseminate such information in connection with disclosures otherwise made in accordance with this Section 10.17), (ii) disclosures of such information reasonably required by any bona
fide or potential assignee, transferee or participant in connection with the contemplated assignment, transfer or participation of any Loans or any participations therein or by any direct or indirect contractual counterparties (or the professional
advisors thereto) to any swap or derivative transaction relating to Borrower and its obligations (provided that such assignees, transferees, participants, counterparties and advisors are advised of and agree to be bound by either the
provisions of this Section 10.17 or other provisions at least as restrictive as this Section 10.17), (iii) disclosure to any rating agency when required by it, provided that, prior to any disclosure, such rating agency shall
undertake in writing to preserve the confidentiality of any confidential information relating to Credit Parties received by it from any Agent or any Lender, (iv) disclosures necessary in connection with the exercise of any remedies hereunder or
under any other Credit Document, (v) disclosures required or requested by any Governmental Authority or pursuant to legal or judicial process; provided that, unless specifically prohibited by Applicable Law or court order, each Lender
and each Agent shall make reasonable efforts to notify Borrower of any request by any Governmental Authority or representative thereof (other than any such request in connection with any examination of the financial condition or other routine
examination of such Lender by such Governmental Authority) for disclosure of any such Non-Public Information reasonably in advance of disclosure of such information (and each Agent and Lender shall cooperate with Borrower and its Subsidiaries (at
the sole cost and expense of Borrower and its Subsidiaries) to limit any such disclosure) and (vi) disclosures to any other Person with the written consent of the Borrower. In addition, each Agent and each Lender may disclose the existence of
this Agreement and the information about this Agreement to service providers to Agents and Lenders in connection with the administration and management of this Agreement and the other Credit Documents.
10.18 Usury Savings Clause. If any provision of this Agreement or of any of the other
Credit Documents would obligate any Credit Party to make any payment of interest or other amount payable to any Agent or any Lender in an amount or calculated at a rate which would be prohibited by law or would result in a receipt by such Agent or
Lender of interest at a criminal rate (as such terms are construed under the Criminal Code (Canada)) or in excess of the Highest Lawful Rate, then notwithstanding such provisions, such amount or rate shall be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by law or so result in a receipt by such Agent or such Lender of interest at a criminal rate, such adjustment to be effected, to the
extent necessary, as follows: (1) firstly, by reducing the amount or rate of interest required to be paid to such Agent or such Lender under Section 2.8, and (2) thereafter, by reducing any fees, commissions, premiums and other
amounts required to be paid to such Agent or such Lender which would constitute interest for purposes of Section 347 of the Criminal Code (Canada) or for the purposes of determining the Highest Lawful Rate. Notwithstanding
the foregoing, it is the intention of Lenders and Borrower to conform strictly to any applicable usury laws, and after giving effect to all adjustments contemplated in the preceding sentence, if an Agent or Lender shall have received an amount in
excess of the maximum permitted by that section of the Criminal Code (Canada) or by application of the Highest Lawful Rate, such Credit Party shall be entitled, by notice in writing to such Agent or such Lender, to obtain reimbursement from
such Agent or such Lender in an amount equal to such excess and, pending such reimbursement, such amount shall be deemed to be an amount payable by such Agent or such Lender to such Credit Party. Any amount or rate of interest referred to in this
Section 10.18 shall be determined in accordance with GAAP as an effective annual rate of interest over the term that the applicable Loan remains outstanding on the assumption that any charges, fees or expenses that fall within the meaning of
interest (as defined in the Criminal Code (Canada) or for the purposes of determining the Highest Lawful Rate) shall, if they relate to a specific period of time, be pro-rated over that period of time and otherwise be pro-rated
over the period from the Third Restatement Date to the later of the Revolving Commitment Termination Date or the Term Loan Commitment Termination Date and, in the event of a dispute, a certificate of an actuary appointed by Administrative Agent
shall be conclusive for the purposes of such determination absent manifest error.
10.19
Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall
constitute but one
-136-
and the same instrument. Delivery of an executed counterpart to this Agreement by facsimile transmission or other electronic transmission shall be effective as delivery of a manually signed
counterpart of this Agreement.
10.20 Effectiveness; Entire Agreement. This
Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by Borrower and Administrative Agent of written notification of such execution and authorization of delivery thereof.
10.21 PATRIOT Act; PCTFA. Each Lender to whom the PATRIOT Act applies and
Administrative Agent (for itself and not on behalf of any Lender) hereby notifies each Credit Party that pursuant to the requirements of the PATRIOT Act and the PCTFA, it is required to obtain, verify and record information that identifies each
Credit Party, which information includes the name and address of each Credit Party and other information that will allow such Lender or Administrative Agent, as applicable, to identify such Credit Party in accordance with those Acts.
10.22 Electronic Execution of Assignments. The words execution,
signed, signature, and words of like import in any Assignment Agreement shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity
or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including the Federal Electronic Signatures in Global and National
Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act, the Commerce Act (Ontario) or any similar provincial, territorial or federal laws.
10.23 No Fiduciary Duty. Each Agent, each Lender and their Affiliates (collectively,
solely for purposes of this paragraph, the Lenders) may have economic interests that conflict with those of Borrower, its stockholders and/or its affiliates. Borrower agrees that nothing in the Credit Documents or otherwise will
be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between any Lender, on the one hand, and Borrower, its stockholders or its affiliates, on the other. The Credit Parties acknowledge and agree that
(i) the transactions contemplated by the Credit Documents (including the exercise of rights and remedies hereunder and thereunder) are arms-length commercial transactions between the Lenders, on the one hand, and Borrower, on the other,
and (ii) in connection therewith and with the process leading thereto, (x) no Lender has assumed an advisory or fiduciary responsibility in favor of Borrower, its stockholders or its affiliates with respect to the transactions contemplated
hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether any Lender has advised, is currently advising or will advise Borrower, its stockholders or its Affiliates on other matters)
or any other obligation to Borrower except the obligations expressly set forth in the Credit Documents and (y) each Lender is acting solely as principal and not as the agent or fiduciary of Borrower, its management, stockholders, creditors or
any other Person. Borrower has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto.
Borrower agrees that it will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to Borrower, in connection with such transaction or the process leading thereto.
10.24 Judgment Currency.
(a) If, for the purpose of obtaining or enforcing judgment against any Credit Party in any
court in any jurisdiction, it becomes necessary to convert into any other currency (such other currency being hereinafter in this Section 10.24 referred to as the Judgment Currency) an amount due under any Credit Document in
any currency (the Obligation Currency) other than the Judgment Currency, the conversion shall be made at the rate of exchange prevailing on the Business Day immediately preceding the date of actual payment of the amount due, in
the case of any proceeding in the courts of any jurisdiction that will give effect to such conversion being made on such date, or the date on which the judgment is given, in the case of any proceeding in the courts of any other jurisdiction (the
applicable date as of which such conversion is made pursuant to this Section 10.24 being hereinafter in this Section 10.24 referred to as the Judgment Conversion Date).
(b) If, in the case of any proceeding in the court of any jurisdiction referred to in
Section 10.24(a), there is a change in the rate of exchange prevailing between the Judgment Conversion Date and the date of actual receipt for value of the amount due, then the applicable Credit Party or Credit Parties shall pay such additional
amount (if any, but in any event not a lesser amount) as may be necessary to ensure that the amount actually received in the Judgment
-137-
Currency, when converted at the rate of exchange prevailing on the date of payment, will provide the amount of the Obligation Currency which could have been purchased with the amount of the
Judgment Currency stipulated in the judgment or judicial order at the rate of exchange prevailing on the Judgment Conversion Date. Any amount due from any Credit Party under this Section 10.24(b) shall be due as a separate debt and shall not be
affected by judgment being obtained for any other amounts due under or in respect of any of the Credit Documents.
(c) The term rate of exchange in this Section 10.24 means the rate of
exchange at which Administrative Agent, on the relevant date at or about 12:00 noon (New York time), would be prepared to sell, in accordance with Administrative Agents normal course foreign currency exchange practices, the Obligation Currency
against the Judgment Currency.
10.25 Joint and Several Liability. Notwithstanding
any other provision contained herein or in any other Credit Documents, if a secured creditor (as that term is defined under the BIA) is determined by a court of competent jurisdiction not to include a Person to whom obligations are owed
on a joint or joint and several basis, then any Canadian Credit Partys Obligations (and the Obligations of each other Credit Party with respect thereto), to the extent such Obligations are secured, only shall be several obligations and not
joint or joint and several obligations.
10.26 Advice of Counsel; No Strict
Construction. Each of the parties represents to each other party hereto that it has discussed this Agreement and the other Credit Documents with its counsel. The parties hereto have participated jointly in the negotiation and drafting of this
Agreement and the other Credit Documents. In the event an ambiguity or question of intent or interpretation arises, this Agreement and each of the other Credit Documents shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement or any other Credit Document.
10.27 Day Not a Business Day. In the event that any day on or before which any action,
calculation, determination or allocation is required to be taken hereunder is not a Business Day, then such action, calculation, determination or allocation shall be required to be taken at the requisite time on or before the first succeeding day
that is a Business Day thereafter, unless such day is in the next calendar month, in which case such action, calculation, determination or allocation shall be required to be taken at the requisite time on the first preceding day that is a Business
Day.
10.28 Limitations Act, 2002. Each of the parties hereto agrees that any and
all limitation periods provided for in the Limitations Act, 2002 (Ontario) or any other Applicable Law that provides for or relates to limitation periods, shall be excluded from application to the Obligations and any undertaking, covenant,
indemnity or other agreement of any Credit Party provided for in any Credit Document to which it is a party in respect thereof, in each case to fullest extent permitted by such Act or other Applicable Law.
10.29 Parallel Debt (The Netherlands, Poland, Japan, Serbia, Slovenia).
(a) Notwithstanding anything to the contrary contained in this Agreement and the other Credit
Documents and solely for the purpose of ensuring and preserving the validity and effect of the security rights granted and to be granted under or pursuant to the Collateral Documents governed by the laws of The Netherlands, the laws of Poland, the
laws of Japan, the laws of Serbia and the laws of Slovenia (the Foreign Security Agreements), each of the Lenders and the other parties hereto hereby acknowledges and consents to (i) each Credit Party that is a party to the
Foreign Security Agreements undertaking herein to pay to the Administrative Agent, in its individual capacity as creditor in its own right and not as agent, representative or trustee, as a separate independent obligation to the Administrative Agent,
the amount of its Parallel Debt (which each such Credit Party hereby so undertakes to do), and (ii) the security rights contemplated by the Foreign Security Agreements being granted in favor of the Administrative Agent in its individual
capacity and not as agent, representative or trustee of the Lenders, as security for its claims under the Parallel Debt and consequently the Administrative Agent becoming the sole security beneficiary of such security rights.
(b) Each Credit Party acknowledges and agrees that it may not pay its Parallel Debt other than
at the instruction of, and in the manner instructed by, the Administrative Agent; provided, however, that no Credit Party shall be obligated to pay any amount of its Parallel Debt unless and until a corresponding amount of its Underlying Debt shall
have become due and payable.
-138-
(c) To the extent any amount is paid to and
received by the Administrative Agent in payment of the Parallel Debt, the total amount due and payable in respect of the Underlying Debt shall be decreased as if such amount were received by the Secured Parties or any of them in payment of the
corresponding Underlying Debt.
10.30 Parallel Debt (France). For the purpose of
any Collateral Document or Lien governed by the laws of France (the French Security Documents) and all security interest created thereunder:
(a) Notwithstanding any other provision of this Agreement, each Credit Party
hereby irrevocably and unconditionally undertakes to pay to the Administrative Agent, as creditor in its own right and not as representative of the other Secured Parties, sums equal to and in the currency of each amount payable by such Credit Party
to each of the Secured Parties under each of the Credit Documents as and when that amount falls due for payment under the relevant Credit Document (the French Parallel Debt).
(b) Each Credit Party and the Administrative Agent acknowledge that the
obligations of each Credit Party under paragraph (a) above are several and are separate and independent from, and shall not in any way limit or affect, the corresponding obligations of that Credit Party to any Secured Party under any Credit
Document (its Corresponding Debt) nor shall the amounts for which each Credit Party is liable under the French Parallel Debt be limited or affected in any way by its Corresponding Debt; provided that:
(i) the French Parallel Debt of each Credit Party shall be decreased to the
extent that its Corresponding Debt has been irrevocably paid or (in the case of guarantee obligations) discharged;
(ii)
the Corresponding Debt of each Credit Party shall be decreased to the extent that its French Parallel Debt has been irrevocably paid or (in the case of guarantee obligations) discharged; and
(iii) the amount of the French Parallel Debt of a Credit Party shall at all
times be equal to the amount of its Corresponding Debt.
(c) For the
purpose of this Section 10.30, the Administrative Agent acts in its own name and not as a trustee, and its claims in respect of the French Parallel Debt shall not be held on trust. The Collateral granted under the French Security Documents to
the Administrative Agent pursuant to the provisions of this Section 10.30 is granted to the Administrative Agent in its capacity as creditor of the French Parallel Debt and shall not be held on trust.
(d) All moneys received or recovered by the Administrative Agent pursuant to
this Section 10.30, and all amounts received or recovered by the Administrative Agent from or by the enforcement of any Security granted under the French Security Documents, shall be applied in accordance with Section 10.30.
(e) For the purpose of any vote taken under any Credit Document, the
Administrative Agent shall not be regarded as having any participation or commitment other than those which it has in its capacity as a Lender.
10.31 Parallel Debt (Hungary). Each Agent and Secured Party (other than the Collateral
Agent) hereby authorizes and appoints the Collateral Agent to accept, manage and enforce, as its representative (in Hungarian: bizományos or, after the entry into force of Act V of 2013 on the new Hungarian civil code (the
New Hungarian Civil Code), zálogjogosulti bizományos) any Collateral granted to the Collateral Agent acting for such Secured Party in relation to the Credit Documents and to act and execute on its
behalf in such capacity, subject to the terms of the Counterpart Agreement entered into by a Guarantor incorporated under the laws of Hungary, amendments or releases of, accessions and alterations to, and to carry out similar dealings with regard to
any Credit Document governed by the laws of Hungary or entered into by a Guarantor incorporated under the laws of Hungary. For the purposes of the New Hungarian Civil Code, (i) this provision constitutes the agreement of all Secured Parties
regarding the authorization and appointment of the Collateral Agent as zálogjogosulti bizományos for enforcing any Counterpart Agreement entered into by a Guarantor incorporated under the laws of Hungary and
enforcing, managing
-139-
and administering the charge based Collateral in Hungary (for the purposes of, and as envisaged by, Article 5:96.§ (1) of the New Hungarian Civil Code); (ii) in case there are
discrepancies between the regulations of Article 5:96.§ (1) of the New Hungarian Civil Code and such Counterpart Agreement, the terms of such Counterpart Agreement prevail to the extent permitted by law; and (iii) as permitted by
Regulation (EC) No 593/2008 of 17 June 2008, this Clause 10.31 shall be governed by Hungarian law. The Collateral Agent hereby accepts and the Guarantors hereby acknowledge such appointment as of the date hereof.
[Remainder of page intentionally left blank]
-140-
[Signature Pages Intentionally Omitted]
S-1
APPENDIX A-1
TO THIRD AMENDED AND RESTATED CREDIT AND
GUARANTY AGREEMENT
TO THIRD AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT
Revolving Commitments
|
|
|
|
|
Lender |
|
Revolving Commitment |
|
Pro Rata Share |
Goldman Sachs Lending Partners LLC |
|
$30,937,500 |
|
11.25% |
JPMorgan Chase Bank, N.A., Toronto
Branch |
|
$24,062,500 |
|
8.75% |
Royal Bank Of Canada |
|
$24,062,500 |
|
8.75% |
Export Development Canada |
|
$24,062,500 |
|
8.75% |
The Bank of Nova Scotia |
|
$20,625,000 |
|
7.50% |
SunTrust Bank |
|
$20,625,000 |
|
7.50% |
DnB NOR Bank ASA |
|
$20,625,000 |
|
7.50% |
Morgan Stanley Bank, N.A. |
|
$19,937,500 |
|
7.25% |
Barclays Bank PLC |
|
$19,937,500 |
|
7.25% |
Bank of America, N.A. |
|
$13,750,000 |
|
5.00% |
The Toronto-Dominion Bank |
|
$9,625,000 |
|
3.50% |
HSBC Bank Canada |
|
$6,875,000 |
|
2.50% |
HSBC Bank USA, NA |
|
$6,875,000 |
|
2.50% |
ICICI Bank Canada |
|
$6,187,500 |
|
2.25% |
Canadian Imperial Bank of Commerce |
|
$5,500,000 |
|
2.00% |
Mizuho Corporate Bank, Ltd. |
|
$5,500,000 |
|
2.00% |
Raymond James Bank, FSB |
|
$4,812,500 |
|
1.75% |
Sumitomo Mitsui Banking Corp., New
York |
|
$3,437,500 |
|
1.25% |
Union Bank, N.A. |
|
$3,437,500 |
|
1.25% |
Bank of Montreal |
|
$2,750,000 |
|
1.00% |
Manufacturers Bank |
|
$1,375,000 |
|
0.50% |
Total |
|
$275,000,000 |
|
100.00% |
APPENDIX A-1-1
APPENDIX A-2
TO THIRD AMENDED AND RESTATED CREDIT AND GUARANTY
AGREEMENT
TO THIRD AMENDED AND
RESTATED CREDIT AND GUARANTY AGREEMENT
Tranche B Term Loan Commitments
|
|
|
|
|
Lender |
|
Tranche B Term Loan Commitment |
|
Pro Rata Share |
JPMorgan Chase Bank, N.A., Toronto
Branch |
|
$600,000,000 |
|
100.00% |
Total |
|
$600,000,000 |
|
100.00% |
APPENDIX A-2-1
APPENDIX B
TO THIRD AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT
Notice Addresses
VALEANT PHARMACEUTICALS
INTERNATIONAL, INC.
2150, boul. St-Elzear Ouest, Laval,
Quebec, H7L 4A8
Canada
Attention: Chief Financial Officer
Telecopier: (514) 744-6272
with a copy to:
400 Somerset Corporate Boulevard
Bridgewater, NJ 08807
USA
Attention: Legal Department
Telecopier: (949) 271-3796
BARCLAYS BANK
PLC,
as Administrative Agent, Collateral Agent and
Swing
Line Lender
Administrative Agents Principal Office:
Barclays Bank Plc
745 Seventh
Avenue, 27th Floor,
New York, NY 10019
Attention: Christine Aharonian
Telecopier: (212) 526-5155
Swing Line
Lenders Principal Office:
Barclays Bank Plc
745 Seventh Avenue, 27th Floor,
New York, NY 10019
Attention:
Christine Aharonian
Telecopier: (212) 526-5155
APPENDIX B-1
SCHEDULE 4.1
Jurisdictions of Organization and Qualifications2
Subsidiaries excluded from the representation and warranty set forth in Section 4.1 of the
Agreement to which this schedule is attached are indicated with an asterisk (*)
|
|
|
|
|
|
|
|
|
Legal Name |
|
Type of Entity |
|
State of Formation (or
Non-U.S. Jurisdiction) |
|
|
|
|
1. |
|
Valeant Pharmaceuticals International
|
|
Corporation
|
|
Delaware
|
|
|
|
|
2.
|
|
Dr. LeWinns Private Formula International, Inc.
|
|
Corporation
|
|
California
|
|
|
|
|
3.
|
|
ICN Biomedicals California, Inc. (*)
|
|
Corporation (Forfeited)
|
|
California
|
|
|
|
|
4.
|
|
ICN Foundation, Inc. (*)
|
|
Corporation (Suspended)
|
|
California
|
|
|
|
|
5.
|
|
ICN Realty (CA), Inc. (*)
|
|
Corporation (Suspended)
|
|
California
|
|
|
|
|
6.
|
|
Private Formula Corp.
|
|
Corporation
|
|
California
|
|
|
|
|
7.
|
|
Rapid Diagnostics, Inc. (*)
|
|
Corporation (Suspended)
|
|
California
|
|
|
|
|
8.
|
|
Amarin Pharmaceuticals Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
9.
|
|
Aton Pharma, Inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
10.
|
|
Coria Laboratories, Ltd.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
11.
|
|
Dow Pharmaceutical Sciences, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
12.
|
|
Hawkeye Spectrum Corp.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
13.
|
|
ICN Delaware, LLC(*)
|
|
Limited Liability Company (Forfeited)
|
|
Delaware
|
|
|
|
|
14.
|
|
ICN Southeast, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
15.
|
|
Oceanside Pharmaceuticals, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
16.
|
|
Princeton Pharma Holdings, LLC
|
|
Limited Liability Company
|
|
Delaware
|
|
|
|
|
17.
|
|
Valeant Biomedicals, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
18.
|
|
Valeant Pharmaceuticals North America LLC
|
|
Limited Liability Company
|
|
Delaware
|
2 |
Amendments reflected in items 1-175 will remain effective whether or not the Bausch & Lomb Acquisition is consummated. |
SCHEDULE 4.1-1
|
|
|
|
|
|
|
|
|
Legal Name |
|
Type of Entity |
|
State of Formation (or
Non-U.S. Jurisdiction) |
|
|
|
|
19.
|
|
Audrey Enterprise, LLC
|
|
Limited Liability Company
|
|
Delaware
|
|
|
|
|
20.
|
|
Flow Laboratories, Inc. (*)
|
|
Corporation (Forfeited)
|
|
Maryland
|
|
|
|
|
21.
|
|
Azeo Processing, Inc. (*)
|
|
Corporation (Void by Proclamation)
|
|
New Jersey
|
|
|
|
|
22.
|
|
Faraday Laboratories, Inc. (*)
|
|
Corporation (Void by Proclamation)
|
|
New Jersey
|
|
|
|
|
23.
|
|
Faraday Urban Renewal Corporation (*)
|
|
Corporation (Void by Proclamation)
|
|
New Jersey
|
|
|
|
|
24.
|
|
Renaud Skin Care Laboratories, Inc.
|
|
Corporation
|
|
New York
|
|
|
|
|
25.
|
|
U.S. Nuclear Corporation (*)
|
|
Corporation (Adequate corporate records not available)
|
|
Ohio
|
|
|
|
|
26.
|
|
DermaTech Pty. Ltd.
|
|
Proprietary Limited
|
|
Australia
|
|
|
|
|
27.
|
|
Hissyfit International Pty. Ltd.
|
|
Proprietary Limited
|
|
Australia
|
|
|
|
|
28.
|
|
Private Formula International Holdings Pty. Ltd.
|
|
Proprietary Limited
|
|
Australia
|
|
|
|
|
29.
|
|
Private Formula International Pty. Ltd.
|
|
Proprietary Limited
|
|
Australia
|
|
|
|
|
30.
|
|
Valeant Pharmaceuticals Australasia Pty. Ltd.
|
|
Proprietary Limited
|
|
Australia
|
|
|
|
|
31.
|
|
Ganehill Pty. Ltd. |
|
Proprietary Limited
|
|
Australia
|
|
|
|
|
32.
|
|
Ganehill North America Pty. Ltd.
|
|
Proprietary Limited
|
|
Australia
|
|
|
|
|
33.
|
|
Labsystems Benelux N.V.
|
|
Corporation
|
|
Belgium
|
|
|
|
|
34. |
|
Instituto Terapêutico Delta Ltda.
|
|
Limited Liability Company
|
|
Brazil
|
|
|
|
|
35.
|
|
Valeant Farmaceutica do Brasil Ltda.
|
|
Limited Liability Company
|
|
Brazil
|
|
|
|
|
36.
|
|
Valeant Canada Ltd.
|
|
Corporation
|
|
Canada
|
|
|
|
|
37.
|
|
ICN Cayman, Ltd. (*)
|
|
Corporation (Adequate corporate records not available)
|
|
Cayman Islands
|
|
|
|
|
38.
|
|
ICN Global Ltd. (*)
|
|
Corporation (Adequate corporate records not available)
|
|
Cayman Islands
|
|
|
|
|
39.
|
|
Valeant Czech Pharma s.r.o.
|
|
Limited Liability Company
|
|
Czech Republic
|
SCHEDULE 4.1-2
|
|
|
|
|
|
|
|
|
Legal Name |
|
Type of Entity |
|
State of Formation (or
Non-U.S. Jurisdiction) |
|
|
|
|
40.
|
|
ICN Egypt Ltd. |
|
Limited Liability Company
|
|
Egypt
|
|
|
|
|
41.
|
|
Valeant Pharma Hungary Commercial LLC
|
|
Limited Liability Company
|
|
Hungary
|
|
|
|
|
42.
|
|
Vasifol Austalt (*)
|
|
Corporation (Adequate corporate records not available)
|
|
Lichtenstein
|
|
|
|
|
43.
|
|
ICN Macedonia (*) |
|
(Adequate corporate records not available)
|
|
Macedonia
|
|
|
|
|
44.
|
|
Aton Malta Limited |
|
Limited Liability Company
|
|
Malta
|
|
|
|
|
45.
|
|
Laboratorios Fedal S.A.
|
|
Corporation
|
|
Mexico
|
|
|
|
|
46.
|
|
Laboratorios Grossman, S.A.
|
|
Corporation
|
|
Mexico
|
|
|
|
|
47.
|
|
Logistica Valeant, S.A. de C.V.
|
|
Corporation
|
|
Mexico
|
|
|
|
|
48.
|
|
Nysco de Mexico S.A. de C.V.
|
|
Corporation
|
|
Mexico
|
|
|
|
|
49.
|
|
Tecnofarma, S.A. de C.V.
|
|
Corporation
|
|
Mexico
|
|
|
|
|
50.
|
|
Valeant Farmacuetica S.A. de C.V.
|
|
Corporation
|
|
Mexico
|
|
|
|
|
51.
|
|
ICN Montenegro (*) |
|
(Adequate corporate records not available)
|
|
Montenegro
|
|
|
|
|
52.
|
|
Mandopharm (*) |
|
(Adequate corporate records not available)
|
|
Netherlands
|
|
|
|
|
53.
|
|
Valeant Dutch Holdings B.V.
|
|
Limited Liability Company
|
|
Netherlands
|
|
|
|
|
54.
|
|
Valeant Pharmaceuticals New Zealand Limited
|
|
Limited Liability Company
|
|
New Zealand
|
|
|
|
|
55. |
|
Valeant Farmaceutica Panama S.A.
|
|
Corporation
|
|
Panama
|
|
|
|
|
56.
|
|
Emo-Farm spółka z ograniczoną odpowiedzialnością
|
|
Limited Liability Company
|
|
Poland
|
|
|
|
|
57.
|
|
ICN Polfa Rzeszow S.A.
|
|
Corporation
|
|
Poland
|
|
|
|
|
58.
|
|
Valeant Development Co. Pte. Ltd. (*)
|
|
Limited Liability Company (Adequate corporate records not available)
|
|
Singapore
|
|
|
|
|
59.
|
|
Valeant Slovakia s.r.o.
|
|
Limited Liability Company
|
|
Slovakia
|
|
|
|
|
60.
|
|
Valeant spółka z ograniczoną odpowiedzialnością
|
|
Limited Liability Company
|
|
Poland
|
SCHEDULE 4.1-3
|
|
|
|
|
|
|
|
|
Legal Name |
|
Type of Entity |
|
State of Formation (or
Non-U.S. Jurisdiction) |
|
|
|
|
61.
|
|
Valeant Pharmaceuticals International, Inc.
|
|
Corporation
|
|
Britsh Columbia
|
|
|
|
|
62.
|
|
Biovail Technologies West Ltd.
|
|
Corporation
|
|
Ontario
|
|
|
|
|
63.
|
|
0909657 B.C. Ltd. |
|
Corporation
|
|
Canada
|
|
|
|
|
64.
|
|
V-BAC Holding Corp.
|
|
Corporation
|
|
Canada
|
|
|
|
|
65.
|
|
Valeant Canada GP Limited/Commandité Valeant Canada Limitée
|
|
Corporation
|
|
Canada
|
|
|
|
|
66.
|
|
Valeant Canada S.E.C./Valeant Canada LP
|
|
Limited Partnership
|
|
Canada
|
|
|
|
|
67.
|
|
Biovail Americas Corp.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
68.
|
|
Biovail NTI Inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
69.
|
|
Prestwick Pharmaceuticals, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
70.
|
|
Fuisz Technologies Properties Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
71.
|
|
VAX Holdings, Inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
72.
|
|
Hythe Property Incorporated
|
|
Corporation
|
|
Barbados
|
|
|
|
|
73.
|
|
Biovail SA |
|
Corporation
|
|
Switzerland
|
|
|
|
|
74.
|
|
Biovail International, S.à r.l.
|
|
Société à Responsabilité Limitée (a
private limited liability company) |
|
Luxembourg
|
|
|
|
|
75.
|
|
Pharma Pass SAS |
|
Corporation
|
|
France
|
|
|
|
|
76. |
|
PharmaSwiss SA |
|
Corporation
|
|
Switzerland
|
|
|
|
|
77.
|
|
PharmaSwiss BH drustvo za trgovinu na veliko d.o.o.
|
|
Limited Liability Company
|
|
Bosnia/Herzegovina
|
|
|
|
|
78.
|
|
PharmaSwiss SA Sh.p.k.
|
|
Limited Liability Company
|
|
Kosovo
|
|
|
|
|
79.
|
|
PharmaSwiss Latvia |
|
Limited Liability Company
|
|
Latvia
|
|
|
|
|
80.
|
|
UAB PharmaSwiss |
|
Private Limited Liability Company
|
|
Lithuania
|
|
|
|
|
81.
|
|
PharmaSwiss EOOD |
|
Limited Liability Company
|
|
Bulgaria
|
|
|
|
|
82.
|
|
PharmaSwiss drustvo s ogranicenom odgovornoscu za trgovinu l usluge
|
|
Limited Liability Company
|
|
Croatia
|
SCHEDULE 4.1-4
|
|
|
|
|
|
|
|
|
Legal Name |
|
Type of Entity |
|
State of Formation (or
Non-U.S. Jurisdiction) |
|
|
|
|
83.
|
|
PharmaSwiss Ceska Republika s.r.o.
|
|
Limited Liability Company
|
|
Czech Republic
|
|
|
|
|
84.
|
|
PHARMASWISS DOOEL Skopje
|
|
Limited Liability Company
|
|
Macedonia
|
|
|
|
|
85.
|
|
PharmaSwiss Eesti OU
|
|
Private Limited Liability Company
|
|
Estonia
|
|
|
|
|
86.
|
|
PharmaSwiss Serbia |
|
Limited Liability Company
|
|
Serbia
|
|
|
|
|
87.
|
|
PharmaSwiss Poland Sp. Z.o.o.
|
|
Limited Liability Company
|
|
Poland
|
|
|
|
|
88.
|
|
PharmaSwiss Hellas S.A.
|
|
Societe Anonyme
|
|
Greece
|
|
|
|
|
89.
|
|
SC PharmaSwiss Medicines Srl
|
|
Limited Liability Company
|
|
Romania
|
|
|
|
|
90.
|
|
Pharmaswiss Israel Ltd.
|
|
Limited Liability Company
|
|
Israel
|
|
|
|
|
91.
|
|
PharmaSwiss d.o.o., Ljubljana
|
|
Limited Liability Company
|
|
Slovenia
|
|
|
|
|
92.
|
|
Sanitas Pharma S.A.
|
|
Corporation
|
|
Slovakia
|
|
|
|
|
93.
|
|
fX Life Sciences AG
|
|
Corporation
|
|
Switzerland
|
|
|
|
|
94.
|
|
COLD-FX Pharmaceuticals (USA) Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
95.
|
|
Valeant Holdco 2 Pty Ltd.
|
|
Proprietary Limited
|
|
Australia
|
|
|
|
|
96.
|
|
Valeant Holdco 3 Pty. Ltd.
|
|
Proprietary Limited
|
|
Australia
|
|
|
|
|
97.
|
|
Wirra Holdings Pty Limited
|
|
Proprietary Limited
|
|
Australia
|
|
|
|
|
98. |
|
Wirra Operations Pty Limited
|
|
Proprietary Limited
|
|
Australia
|
|
|
|
|
99.
|
|
iNova Pharmaceuticals (Australia) Pty Limited
|
|
Proprietary Limited
|
|
Australia
|
|
|
|
|
100.
|
|
Wirra IP Pty Limited
|
|
Proprietary Limited
|
|
Australia
|
|
|
|
|
101.
|
|
iNova Sub Pty Limited
|
|
Proprietary Limited
|
|
Australia
|
|
|
|
|
102.
|
|
Wirra International Holdings Pte Limited
|
|
Limited Private Company
|
|
Singapore
|
|
|
|
|
103.
|
|
Wirra International Bidco Pte Limited
|
|
Limited Private Company
|
|
Singapore
|
|
|
|
|
104.
|
|
iNova Pharmaceuticals (Singapore) Pte. Limited
|
|
Limited Private Company
|
|
Singapore
|
SCHEDULE 4.1-5
|
|
|
|
|
|
|
|
|
Legal Name |
|
Type of Entity |
|
State of Formation (or
Non-U.S. Jurisdiction) |
|
|
|
|
105. |
|
iNova Pharmaceuticals (Hong Kong) Limited
|
|
Private Company Limited by Shares
|
|
Hong Kong
|
|
|
|
|
106.
|
|
iNova Pharmaceuticals (Pty) Limited
|
|
Private Company Limited by Shares
|
|
South Africa
|
|
|
|
|
107.
|
|
iNova Pharmaceuticals (Thailand) Ltd.
|
|
Private Company Limited by Shares
|
|
Thailand
|
|
|
|
|
108.
|
|
iNova Pharmaceuticals (New Zealand) Ltd.
|
|
New Zealand Limited Company
|
|
New Zealand
|
|
|
|
|
109.
|
|
OraPharma, Inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
110.
|
|
Orapharma Topco Holdings, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
111.
|
|
Valeant Europe B.V.
|
|
Besloten vennootschap (closed company)
|
|
Netherlands
|
|
|
|
|
112.
|
|
Laboratorium Farmaceutyczne Homeofarm Sp. z.o.o.
|
|
Spółka z ograniczoną odpowiedzialnością
(limited liability company) |
|
Poland
|
|
|
|
|
113.
|
|
Medicis Pharmaceutical Corporation
|
|
Corporation
|
|
Delaware
|
|
|
|
|
114.
|
|
Obagi Medical Products, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
115.
|
|
OMP, Inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
116.
|
|
Natur Produkt-M |
|
Joint Stock Company
|
|
Belarus
|
|
|
|
|
117.
|
|
Valeant Pharmaceuticals Nominee Bermuda
|
|
Exempted Company
|
|
Bermuda
|
|
|
|
|
118.
|
|
Valeant International Bermuda
|
|
Unlimited Liability Company
|
|
Bermuda
|
|
|
|
|
119.
|
|
Probiotica Laboratories Ltda.
|
|
Limited Liability Company
|
|
Brazil
|
|
|
|
|
120.
|
|
Medicis Canada Ltd.
|
|
Corporation
|
|
Canada
|
|
|
|
|
121. |
|
0938638 BC Ltd. |
|
Limited Liability Company
|
|
British Columbia
|
|
|
|
|
122.
|
|
0938893 BC Ltd. |
|
Limited Liability Company
|
|
British Columbia
|
|
|
|
|
123.
|
|
Medicis Aesthetics Canada Ltd.
|
|
Limited Liability Company
|
|
Canada
|
|
|
|
|
124.
|
|
Eyetech Inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
125.
|
|
Kika LP |
|
Limited Partnership
|
|
Delaware
|
SCHEDULE 4.1-6
|
|
|
|
|
|
|
|
|
Legal Name |
|
Type of Entity |
|
State of Formation (or Non-U.S.
Jurisdiction) |
|
|
|
|
126. |
|
Stephanie LP |
|
Limited Partnership
|
|
Delaware
|
|
|
|
|
127. |
|
Tori LP |
|
Limited Partnership
|
|
Delaware
|
|
|
|
|
128. |
|
Emma Z LP |
|
Limited Partnership
|
|
Delaware
|
|
|
|
|
129. |
|
Erin S LP |
|
Limited Partnership
|
|
Delaware
|
|
|
|
|
130. |
|
Katie Z LP |
|
Limited Partnership
|
|
Delaware
|
|
|
|
|
131. |
|
Medicis Body Aesthetics, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
132. |
|
OraphaMed Inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
133. |
|
RTI Acquisition Corporation, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
134. |
|
Tinea Pharmaceuticals, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
135. |
|
OPO, Inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
136. |
|
Valeant Pharmaceuticals Ireland
|
|
Unlimited Company having a Share Capital
|
|
Ireland
|
|
|
|
|
137. |
|
TOO NP Market Asia
|
|
Limited Liability Company
|
|
Kazakhstan
|
|
|
|
|
138. |
|
Ucyclyd Pharma, Inc.
|
|
Corporation
|
|
Maryland
|
|
|
|
|
139. |
|
Valeant Servicios y Administracion, S. de R.L. de C.V.
|
|
Limited Liability Company
|
|
Mexico
|
|
|
|
|
140. |
|
Natur Produkt Europe BV
|
|
Limited Liability Company
|
|
Netherlands
|
|
|
|
|
141. |
|
Pedinol Pharmacal, Inc.
|
|
Corporation
|
|
New York
|
|
|
|
|
142. |
|
Valeant spolka z ograniczona odpowiedzialnoscia
|
|
Spółka z ograniczoną odpowiedzialnością (limited
liability company) |
|
Poland
|
|
|
|
|
143. |
|
Cadogan spolka z ograniczona odpowiedzialnoscia
|
|
Spółka z ograniczoną odpowiedzialnością (limited
liability company) |
|
Poland
|
|
|
|
|
144. |
|
Cochrane spolka z ograniczona odpowiedzialnoscia
|
|
Spółka z ograniczoną odpowiedzialnością (limited
liability company) |
|
Poland
|
SCHEDULE 4.1-7
|
|
|
|
|
|
|
|
|
Legal Name |
|
Type of Entity |
|
State of Formation (or Non-U.S.
Jurisdiction) |
|
|
|
|
145. |
|
IPOPEMA 73 Fundusz inwestycyjny Zamkniety Aktywow Niepublicznych
|
|
Fundusz inwestycyjny Zamkniety Aktywow Niepublicznych (closed private equity
investment fund) |
|
Poland
|
|
|
|
|
146. |
|
Valeant LLC |
|
Limited Liability Company
|
|
Russia
|
|
|
|
|
147. |
|
JSC Natur Produkt International
|
|
Closed Joint Stock Company
|
|
Russia
|
|
|
|
|
148. |
|
OOO NP-Logistika
|
|
Limited Liability Company
|
|
Russia
|
|
|
|
|
149. |
|
OOO NP-Nedvizhimost
|
|
Limited Liability Company
|
|
Russia
|
|
|
|
|
150. |
|
9079-8851 Quebec |
|
Corporation
|
|
Canada
|
|
|
|
|
151. |
|
Bausch &Lomb Argentina SRL
|
|
Corporation
|
|
Argentina
|
|
|
|
|
152. |
|
Bausch & Lomb
(Australia) Pty Limited |
|
Corporation
|
|
Australia
|
|
|
|
|
153. |
|
Bausch & Lomb B.V.B.A.
|
|
Corporation
|
|
Belgium
|
|
|
|
|
154. |
|
Bausch & Lomb Canada Inc.
|
|
Corporation
|
|
Canada
|
|
|
|
|
155. |
|
Bausch & Lomb Eyecare (India) Private Ltd.
|
|
Corporation
|
|
India
|
|
|
|
|
156. |
|
B&L Financial Holdings Corp.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
157. |
|
Bausch & Lomb France S.A.S.
|
|
Corporation
|
|
France
|
|
|
|
|
158. |
|
Bausch & Lomb Fribourg S.á r.l.
|
|
Corporation
|
|
Switzerland
|
|
|
|
|
159. |
|
Bausch & Lomb GmbH
|
|
Corporation
|
|
Austria
|
|
|
|
|
160. |
|
Bausch & Lomb GmbH
|
|
Corporation
|
|
Germany
|
|
|
|
|
161. |
|
Bausch & Lomb (Hong Kong) Limited
|
|
Corporation
|
|
Hong Kong
|
|
|
|
|
162. |
|
BL Industria Otica Ltda
|
|
Corporation
|
|
Brazil
|
|
|
|
|
163. |
|
Bausch & Lomb IOM SpA
|
|
Corporation
|
|
Italy
|
|
|
|
|
164. |
|
Bausch & Lomb (Jersey) Ltd.
|
|
Corporation
|
|
Jersey
|
|
|
|
|
165. |
|
Bausch & Lomb Korea Co. Ltd.
|
|
Corporation
|
|
Republic of Korea
|
SCHEDULE 4.1-8
|
|
|
|
|
|
|
|
|
Legal Name |
|
Type of Entity |
|
State of Formation (or Non-U.S.
Jurisdiction) |
|
|
|
|
166. |
|
Bausch & Lomb-Lord (BVI) Inc.
|
|
Corporation
|
|
British Virgin Islands
|
|
|
|
|
167. |
|
Bausch & Lomb Luxembourg S.á r.l.
|
|
Corporation
|
|
Luxembourg
|
|
|
|
|
168. |
|
Bausch & Lomb (Malaysia) Sdn Bhd.
|
|
Corporation
|
|
Malaysia
|
|
|
|
|
169. |
|
Bausch & Lomb Mexico, S.A. de C.V.
|
|
Corporation
|
|
Mexico
|
|
|
|
|
170. |
|
Bausch & Lomb New Zealand Limited
|
|
Corporation
|
|
New Zealand
|
|
|
|
|
171. |
|
Bausch & Lomb Nordic A.B.
|
|
Corporation
|
|
Sweden
|
|
|
|
|
172. |
|
Bausch & Lomb Pharma SA
|
|
Corporation
|
|
Belgium
|
|
|
|
|
173. |
|
Bausch & Lomb (Philippines), Inc.
|
|
Corporation
|
|
Philippines
|
|
|
|
|
174. |
|
Bausch & Lomb Polska sp. Z o.o.
|
|
Corporation
|
|
Poland
|
|
|
|
|
175. |
|
Bausch & Lomb S.A.
|
|
Corporation
|
|
Spain
|
|
|
|
|
176. |
|
Bausch & Lomb Saglik ve Optik
Urunleri Tic. A.S. |
|
Corporation
|
|
Turkey
|
|
|
|
|
177. |
|
Bausch & Lomb Scotland Ltd.
|
|
Corporation
|
|
United Kingdom
|
|
|
|
|
178. |
|
Bausch & Lomb (Shanghai) Trading Co. Ltd.
|
|
Corporation
|
|
China
|
|
|
|
|
179. |
|
Bausch & Lomb (Singapore) Private Limited
|
|
Corporation
|
|
Singapore
|
|
|
|
|
180. |
|
Bausch & Lomb (South
Africa) (Proprietary) Limited |
|
Corporation
|
|
South Africa
|
|
|
|
|
181. |
|
Bausch & Lomb Swiss AG
|
|
Corporation
|
|
Switzerland
|
|
|
|
|
182. |
|
Bausch & Lomb Taiwan Ltd.
|
|
Corporation
|
|
Taiwan
|
|
|
|
|
183. |
|
Bausch & Lomb (Thailand) Ltd.
|
|
Corporation
|
|
Thailand
|
|
|
|
|
184. |
|
Bausch & Lomb U.K. Limited
|
|
Corporation
|
|
United Kingdom
|
|
|
|
|
185. |
|
Bausch & Lomb UK Holdings Limited
|
|
Corporation
|
|
United Kingdom
|
|
|
|
|
186. |
|
Bausch & Lomb B.V.
|
|
Corporation
|
|
Netherlands
|
|
|
|
|
187. |
|
Bausch & Lomb China, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
188. |
|
Bausch & Lomb International Inc.
|
|
Corporation
|
|
New York
|
SCHEDULE 4.1-9
|
|
|
|
|
|
|
|
|
Legal Name |
|
Type of Entity |
|
State of Formation (or Non-U.S.
Jurisdiction) |
|
|
|
|
189. |
|
Bausch & Lomb Realty Corporation
|
|
Corporation
|
|
New York
|
|
|
|
|
190. |
|
Bausch & Lomb South Asia, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
191. |
|
Bausch & Lomb Technology Corporation
|
|
Corporation
|
|
Delaware
|
|
|
|
|
192. |
|
BCF S.A.S. |
|
Corporation
|
|
France
|
|
|
|
|
193. |
|
Beijing Bausch & Lomb Eyecare Co., Ltd.
|
|
Corporation
|
|
China
|
|
|
|
|
194. |
|
BLEP Europe GmbH |
|
Corporation
|
|
Germany
|
|
|
|
|
195. |
|
BLEP Holding GmbH |
|
Corporation
|
|
Germany
|
|
|
|
|
196. |
|
B.L.J. Company, Ltd.
|
|
Corporation
|
|
Japan
|
|
|
|
|
197. |
|
BL Importacoes Ltda
|
|
Corporation
|
|
Brazil
|
|
|
|
|
198. |
|
C&C Vision International Limited
|
|
Corporation
|
|
Ireland
|
|
|
|
|
199. |
|
Chauvin ankerpharm GmbH
|
|
Corporation
|
|
Germany
|
|
|
|
|
200. |
|
Chauvin Opsia S.A.S.
|
|
Corporation
|
|
France
|
|
|
|
|
201. |
|
Chauvin Pharmaceuticals Ltd.
|
|
Corporation
|
|
United Kingdom
|
|
|
|
|
202. |
|
Dr. Gerhard Mann
Chemisch-pharmzeutische Fabrik GmbH |
|
Corporation
|
|
Germany
|
|
|
|
|
203. |
|
Dr. Robert Winzer Pharma GmbH
|
|
Corporation
|
|
Germany
|
|
|
|
|
204. |
|
eyeonics, inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
205. |
|
eyeonics Europe Srl (in Liquidation)
|
|
Corporation
|
|
Italy
|
|
|
|
|
206. |
|
Grundstuckgesellschaft Dr. Gerhard Mann GbmH
|
|
Corporation
|
|
Germany
|
|
|
|
|
207. |
|
Iolab Corporation |
|
Corporation
|
|
California
|
|
|
|
|
208. |
|
ISTA Pharmaceuticals, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
209. |
|
Laboratoire Chauvin S.A.S.
|
|
Corporation
|
|
France
|
|
|
|
|
210. |
|
Waicon Vision S.A. |
|
Corporation
|
|
Argentina
|
|
|
|
|
211. |
|
Limited Liability Company Bausch & Lomb
|
|
Corporation
|
|
Russia
|
SCHEDULE 4.1-10
|
|
|
|
|
|
|
|
|
Legal Name |
|
Type of Entity |
|
State of Formation (or Non-U.S.
Jurisdiction) |
|
|
|
|
212. |
|
Pharmaplast Vertriebgesellschaft mbH
|
|
Corporation
|
|
Germany
|
|
|
|
|
213. |
|
PT Bausch & Lomb (Distributing)
|
|
Corporation
|
|
Indonesia
|
|
|
|
|
214. |
|
P.T. Bausch & Lomb Manufacturing
|
|
Corporation
|
|
Indonesia
|
|
|
|
|
215. |
|
PT Bausch Lomb Indonesia
|
|
Corporation
|
|
Indonesia
|
|
|
|
|
216. |
|
RHC Holdings, Inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
217. |
|
Shandong Bausch & Lomb Freda Pharmaceutical Co. Ltd.
|
|
Corporation
|
|
China
|
|
|
|
|
218. |
|
Shandong Bausch & Lomb Freda New Packaging Materials Co. Ltd.
|
|
Corporation
|
|
China
|
|
|
|
|
219. |
|
Sight Savers, Inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
220. |
|
Sino Concept Technology Ltd.
|
|
Corporation
|
|
Hong Kong
|
|
|
|
|
221. |
|
Soflens (Pty) Ltd |
|
Corporation
|
|
South Africa
|
|
|
|
|
222. |
|
Technolas Hong Kong Ltd
|
|
Corporation
|
|
Hong Kong
|
|
|
|
|
223. |
|
Technolas Perfect Vision Cooperatief U.A.
|
|
Corporation
|
|
Netherlands
|
|
|
|
|
224. |
|
Technolas Perfect Vision GmbH
|
|
Corporation
|
|
Germany
|
|
|
|
|
225. |
|
Technolas Singapore Pte Ltd
|
|
Corporation
|
|
Singapore
|
|
|
|
|
226. |
|
Technolas Perfect Vision, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
227. |
|
Solta Medical Australia Proprietary Ltd.
|
|
Proprietary Limited
|
|
Australia
|
|
|
|
|
228. |
|
Croma Pharma BVBA |
|
Private Limited Liability Company
|
|
Belgium
|
|
|
|
|
229. |
|
Croma Pharma Canada Ltd.
|
|
Corporation
|
|
British Columbia
|
|
|
|
|
230. |
|
Valeant Groupe Cosmoderme Inc.
|
|
Corporation
|
|
Canada
|
|
|
|
|
231. |
|
Solta Medical China
|
|
Corporation
|
|
China
|
|
|
|
|
232. |
|
Coleman Trading Ltd.
|
|
Corporation
|
|
Cyprus
|
|
|
|
|
233. |
|
Nordman Investment Ltd.
|
|
Corporation
|
|
Cyprus
|
|
|
|
|
234. |
|
GIE Opthapharma |
|
|
|
European Economic Interest
Grouping |
SCHEDULE 4.1-11
|
|
|
|
|
|
|
|
|
Legal Name |
|
Type of Entity |
|
State of Formation (or Non-U.S.
Jurisdiction) |
|
|
|
|
235. |
|
Croma SAS |
|
Joint Stock Company
|
|
France
|
|
|
|
|
236. |
|
Croma-Pharma Deutschland G.m.b.H.
|
|
Corporation
|
|
Germany
|
|
|
|
|
237. |
|
Solta Medical International, Ltd.
|
|
Corporation
|
|
Hong Kong
|
|
|
|
|
238. |
|
PT Armoxindo Farma |
|
Corporation
|
|
Indonesia
|
|
|
|
|
239. |
|
Valeant Holdings Ireland
|
|
Private Unlimited Company having Share Capital
|
|
Ireland
|
|
|
|
|
240. |
|
Bescon Co. Ltd. |
|
Corporation
|
|
Korea
|
|
|
|
|
241. |
|
Bescon Korea Distribution Inc.
|
|
Corporation
|
|
Korea
|
|
|
|
|
242. |
|
Bausch & Lomb Luxembourg S.à r.l. & Cie
|
|
Corporation
|
|
Luxembourg
|
|
|
|
|
243. |
|
Valeant Finance Luxembourg S.à r.l.
|
|
Société à Responsabilité Limitée (a private
limited liability company) |
|
Luxembourg
|
|
|
|
|
244. |
|
Valeant Holdings Luxembourg S.à r.l.
|
|
Société à Responsabilité Limitée (a private
limited liability company) |
|
Luxembourg
|
|
|
|
|
245. |
|
Valeant International Luxembourg S.à r.l.
|
|
Société à Responsabilité Limitée (a private
limited liability company) |
|
Luxembourg
|
|
|
|
|
246. |
|
Valeant Pharmaceuticals Luxembourg S.à r.l.
|
|
Société à Responsabilité Limitée (a private
limited liability company) |
|
Luxembourg
|
|
|
|
|
247. |
|
Bausch + Lomb OPS B.V.
|
|
Limited Liability Company
|
|
Netherlands
|
|
|
|
|
248. |
|
Croma-Pharma Nederland BV
|
|
Private Limited Liability Company
|
|
Netherlands
|
|
|
|
|
249. |
|
Solta Medical International B.V.
|
|
Limited Liability Company
|
|
Netherlands
|
|
|
|
|
250. |
|
Croma Inter Sp.z.o.o.
|
|
Limited Liability Company
|
|
Poland
|
|
|
|
|
251. |
|
Croma-Pharma Polska Sp. z o.o.
|
|
Limited Liability Company
|
|
Poland
|
|
|
|
|
252. |
|
Valeant Med Sp. z o.o.
|
|
Limited Liability Company
|
|
Poland
|
|
|
|
|
253. |
|
Przedsiebiorstwo Farmaceutyczne Jelfa SA
|
|
Corporation
|
|
Poland
|
|
|
|
|
254. |
|
Valeant sp. z.o.o. |
|
Limited Liability Company
|
|
Poland
|
SCHEDULE 4.1-12
|
|
|
|
|
|
|
|
|
Legal Name |
|
Type of Entity |
|
State of Formation (or Non-U.S.
Jurisdiction) |
|
|
|
|
255. |
|
VP Valeant Sp. z o.o.
|
|
Limited Liability Company
|
|
Poland
|
|
|
|
|
256. |
|
S.C. Croma Romania Srl
|
|
Limited Liability Company
|
|
Romania
|
|
|
|
|
257. |
|
Lensmaster, LLC |
|
Limited Liability Company
|
|
Russia
|
|
|
|
|
258. |
|
Solta Medical Singapore Private Limited
|
|
Corporation
|
|
Singapore
|
|
|
|
|
259. |
|
Croma Pharma SL |
|
Limited Liability Company
|
|
Spain
|
|
|
|
|
260. |
|
Croma-Pharma Nordic AB
|
|
Limited Liability Company
|
|
Sweden
|
|
|
|
|
261. |
|
Valeant Sweden AB |
|
Limited Liability Company
|
|
Sweden
|
|
|
|
|
262. |
|
Valeant Pharmaceuticals LLC
|
|
Limited Liability Company
|
|
Ukraine
|
|
|
|
|
263. |
|
Medpharma Pharmaceutical & Chemical Industries LLC
|
|
Limited Liability Company
|
|
UAE
|
|
|
|
|
264. |
|
Solta Medical UK Limited
|
|
Private Limited Company
|
|
United Kingdom
|
|
|
|
|
265. |
|
CLRS Technology Corporation
|
|
Corporation
|
|
California
|
|
|
|
|
266. |
|
OnPharma Inc. |
|
Corporation
|
|
California
|
|
|
|
|
267. |
|
Reliant Medical Lasers, Inc. (*)
|
|
Corporation (suspended)
|
|
Delaware
|
|
|
|
|
268. |
|
Sound Surgical Technologies LLC
|
|
Limited Liability Company
|
|
Delaware
|
|
|
|
|
269. |
|
Aesthera Corporation
|
|
Corporation
|
|
Delaware
|
|
|
|
|
270. |
|
AGMS Inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
271. |
|
Bausch & Lomb Holdings Incorporated
|
|
Corporation
|
|
Delaware
|
|
|
|
|
272. |
|
Bausch & Lomb Pharma Holdings Corp.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
273. |
|
ECR Pharmaceuticals Co., Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
274. |
|
Hardlens Co. Inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
275. |
|
Liposonix, Inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
276. |
|
B+L Diagnostics, Inc.
|
|
Corporation
|
|
Delaware
|
SCHEDULE 4.1-13
|
|
|
|
|
|
|
|
|
Legal Name |
|
Type of Entity |
|
State of Formation (or Non-U.S.
Jurisdiction) |
|
|
|
|
277. |
|
Onset Dermatologics LLC
|
|
Limited Liability Company
|
|
Delaware
|
|
|
|
|
278. |
|
Precision Dermatology, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
279. |
|
Precision MD LLC |
|
Limited Liability Company
|
|
Delaware
|
|
|
|
|
280. |
|
ProSkin LLC |
|
Limited Liability Company
|
|
Delaware
|
|
|
|
|
281. |
|
Reliant Technologies LLC
|
|
Limited Liability Company
|
|
Delaware
|
|
|
|
|
282. |
|
Solta Medical, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
283. |
|
Solta Medical International, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
284. |
|
TP Cream Sub, LLC |
|
Limited Liability Company
|
|
Delaware
|
|
|
|
|
285. |
|
TP Lotion Sub, LLC |
|
Limited Liability Company
|
|
Delaware
|
|
|
|
|
286. |
|
VRX Holdco Inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
287. |
|
VRX Holdco2 Inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
288. |
|
Croma Pharmaceuticals Inc.
|
|
Corporation
|
|
Florida
|
|
|
|
|
289. |
|
Bausch & Lomb Incorporated
|
|
Corporation
|
|
New York
|
|
|
|
|
290. |
|
Image Acquisition Corp.
|
|
Corporation
|
|
Texas
|
|
|
|
|
291. |
|
Euvipharm Pharmaceuticals Joint Stock Company
|
|
Joint Stock Company
|
|
Vietnam
|
|
|
|
|
292. |
|
Acrivet, Inc. |
|
Corporation
|
|
Utah
|
|
|
|
|
293. |
|
Dendreon Pharmaceuticals, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
294. |
|
Dendreon Holdings (Netherlands) BV
|
|
Limited Liability Company
|
|
Netherlands
|
|
|
|
|
295. |
|
Dendreon Operations BV
|
|
Limited Liability Company
|
|
Netherlands
|
|
|
|
|
296. |
|
Dendreon UK Limited
|
|
Private Limited Company
|
|
United Kingdom
|
|
|
|
|
297. |
|
Dendreon Germany GmbH
|
|
Limited Liability Company
|
|
Germany
|
|
|
|
|
298. |
|
Salix Pharmaceuticals, Ltd.
|
|
Corporation
|
|
Delaware
|
SCHEDULE 4.1-14
|
|
|
|
|
|
|
|
|
Legal Name |
|
Type of Entity |
|
State of Formation (or Non-U.S.
Jurisdiction) |
|
|
|
|
299. |
|
Glycyx Pharmaceuticals, Ltd.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
300. |
|
InKine Pharmaceutical Company, Inc.
|
|
Corporation
|
|
New York
|
|
|
|
|
301. |
|
Amazonian Region Botanical Products LLC
|
|
Limited Liability Company
|
|
Delaware
|
|
|
|
|
302. |
|
SPL South America One LLC
|
|
Limited Liability Company
|
|
Delaware
|
|
|
|
|
303. |
|
Salix Pharmaceuticals, Inc.
|
|
Corporation
|
|
California
|
|
|
|
|
304. |
|
Oceana Therapeutics, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
305. |
|
Santarus, Inc. |
|
Corporation
|
|
Delaware
|
|
|
|
|
306. |
|
Covella Pharmaceuticals, Inc.
|
|
Corporation
|
|
Delaware
|
|
|
|
|
307. |
|
Oceana Therapeutics, Ltd.
|
|
Private Limited Company
|
|
Ireland
|
|
|
|
|
308. |
|
SPL Operaciones Botanicos Peruanos S.R.L.
|
|
Limited Liability Company
|
|
Peru
|
|
|
|
|
309. |
|
iMed Systems Limited
|
|
Private Limited Company
|
|
United Kingdom
|
|
|
|
|
310. |
|
Oona Acquisitions, LLC
|
|
Limited Liability Company
|
|
Delaware
|
|
|
|
|
311. |
|
Innovative Sclerals Limited
|
|
Limited Company
|
|
United Kingdom
|
|
|
|
|
312. |
|
Valeant DWC-LLC |
|
Limited Liability Company
|
|
UAE
|
|
|
|
|
313. |
|
Paragon Holdings I, Inc.
|
|
Corporation
|
|
Arizona
|
|
|
|
|
314. |
|
Paragon vision Sciences, Inc.
|
|
Corporation
|
|
Arizona
|
|
|
|
|
315. |
|
CRT Technology, Inc.
|
|
Corporation
|
|
Arizona
|
SCHEDULE 4.1-15
SCHEDULE 6.1
Certain Indebtedness
Biovail 5.375%
Senior Convertible Notes due August 1, 2014 having an aggregate principal amount outstanding as of the Third Restatement Date of $17,595,000
Credit
line issued to Valeant Farmaceutica do Brasil Ltda. by Banco Citibank S.A. in the approximate aggregate principal amount of $2,749,000
Credit line issued
to Afexa Life Sciences Inc. (n.k.a Valeant Pharmaceuticals International, Inc.) by HSBC Bank Canada in the approximate aggregate principal amount of $15,000,000
Line of credit from Mizuho Bank, Ltd. and Bank of Tokyo-Mitsubishi, Ltd. to Bausch & Lomb Japan in the amount of ¥3.36 billion
SCHEDULE 6.1-1
SCHEDULE 6.5
Certain Restrictions on Subsidiary Distributions
Pursuant to Article 4 of the Indenture, dated as of September 28, 2010, by and among Valeant Pharmaceuticals International, the Guarantors named therein
and The Bank of New York Mellon Trust Company, N.A., as Trustee, Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International and certain of its Subsidiaries are prohibited from making certain dividends, purchases, redemptions,
investments and other payments subject to certain exceptions as set forth therein.
Pursuant to Article 4 of the Indenture, dated as of November 23,
2010 by and among Valeant Pharmaceuticals International, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International and certain of
its Subsidiaries are prohibited from making certain dividends, purchases, redemptions, investments and other payments subject to certain exceptions as set forth therein.
Pursuant to Article 4 of the Indenture, dated as of February 8, 2011, by and among Valeant Pharmaceuticals International, the Guarantors named therein
and The Bank of New York Mellon Trust Company, N.A., as Trustee, Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International and certain of its Subsidiaries are prohibited from making certain dividends, purchases, redemptions,
investments and other payments subject to certain exceptions as set forth therein.
Pursuant to Article 4 of the Indenture, dated as of March 8,
2011, by and among Valeant Pharmaceuticals International, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International and certain of
its Subsidiaries are prohibited from making certain dividends, purchases, redemptions, investments and other payments subject to certain exceptions as set forth therein.
Agreement, dated February 18, 2011, among Industrial Development Agency (Ireland), Bausch & Lomb Ireland and Bausch & Lomb Incorporated
SCHEDULE 6.5-1
SCHEDULE 6.6
Certain Investments
Biovail Technologies
West Ltd. - 10,000 Class A limited partnership units in Western Life Services Ventures Fund Limited Partnership of a total of 31,400 Class A limited partnership units issued and outstanding.
Biovail Insurance Incorporated holds 5.00% Total Capital SA bonds maturing on May 12, 2012 having a face value of $1,000,000.
Investments in connection with the Sanitas Acquisition in the approximate amount of $10,000,000.
Valeant Canada Limited - 450 Class B Shares of Meda Valeant Pharma Canada Inc. constituting 45% of the share capital of Meda Valeant Pharma Canada Inc.
Valeant Pharmaceuticals Australasia Pty Limited - 450 Class B Shares of Meda Valeant Pharma Australia Limited constituting 45% of the share capital of Meda
Valeant Pharma Australia Limited.
Logistica Valeant, S.A. de C.V. - 45 Class I Shares and 2700 Class B Shares of Valeant JV, S.A. de C.V. constituting
45% of the share capital of Valeant JV, S.A. de C.V.
Potential collaboration or joint venture with Spear Pharmaceuticals, Inc. and/or Spear Dermatology
Products, Inc.
Investments in connection with the acquisition of Probiotica Participacoes LTDA in the approximate amount of $87,000,000.
Investments in connection with the acquisition of Natur Produkt in the approximate amount of $140,000,000.
See schedule 4.1.
Bausch & Lomb Incorporated
owns the following equity interests:
|
|
|
Entity |
|
Percentage Ownership |
AcuFocus, Inc. |
|
10.4% |
Hardlens Co. |
|
50% |
Reflow Biomedical Technologies, LLC |
|
29.4% |
Technolas Perfect Vision Coöperatief U.A. |
|
50% |
Winning Vision PLC |
|
10% |
Laboratoire Chauvin S.A. owns the following equity interests:
|
|
|
Entity |
|
Percentage Ownership |
GIE Ophtapharma |
|
50% |
Valpharma S.A. |
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16.67% |
SCHEDULE 6.6-1
EXHIBIT C TO
THIRD AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT
COMPLIANCE CERTIFICATE
THE
UNDERSIGNED HEREBY CERTIFIES AS FOLLOWS:
1. I am the Chief Financial Officer of
Valeant Pharmaceuticals International, Inc., a corporation continued under the federal laws of Canada (Borrower).
2. I have reviewed the terms of that certain Third Amended and Restated Credit and Guaranty
Agreement, dated as of February 13, 2012 (as it may be amended, restated, replaced, supplemented or otherwise modified from time to time, the Credit Agreement; the terms defined therein and not otherwise defined herein being
used herein as therein defined), among Borrower, certain Subsidiaries of Borrower, as Guarantors, the Lenders party thereto from time to time, Goldman Sachs Lending Partners LLC (GSLP), J.P. Morgan Securities LLC and Morgan
Stanley Senior Funding, Inc. (Morgan Stanley), as Joint Lead Arrangers and Joint Bookrunners, JPMorgan Chase Bank, N.A. (JPMorgan) and Morgan Stanley, as Co-Syndication Agents, JPMorgan, as Issuing Bank,
Barclays Bank PLC (as successor to GSLP), as Administrative Agent and Collateral Agent, and the other Agents party thereto, and I have made, or have caused to be made under my supervision, a review in reasonable detail of the transactions and
condition of Borrower and its Subsidiaries during the accounting period covered by the attached financial statements.
3. The examination described in paragraph 2 above did not disclose, and I have no knowledge of,
the existence of any condition or event which constitutes an Event of Default or Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth in a
separate attachment, if any, to this Certificate, describing in detail, the nature of the condition or event, the period during which it has existed and the action which Borrower and its Subsidiaries have taken, are taking, or propose to take with
respect to each such condition or event.
4. Each of the entities listed on Annex [ ]
attached hereto and designated as an Unrestricted Subsidiary, qualifies as an Unrestricted Subsidiary in accordance with the definition thereof in Section 1.1 of the Credit Agreement.
The foregoing certifications, together with the computations set forth in the Annex A hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered [ ], 20[ ] pursuant to Section 5.1(c) of the Credit Agreement.
This Certificate is being signed by the undersigned in [his] [her] capacity as the Chief Financial Officer of the Borrower and not in [his]
[her] individual capacity.
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VALEANT PHARMACEUTICALS INTERNATIONAL, INC. |
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By: |
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Name: |
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Title: Chief Financial Officer |
EXHIBIT C-1
EXHIBIT E TO
THIRD AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT
PREPAYMENT NOTICE
[DATE]
Reference is made to the Third Amended and Restated Credit and Guaranty Agreement, dated as of February 13, 2012, as amended by Amendment
No. 1, dated as of March 6, 2012, by Amendment No. 2, dated as of September 10, 2012, by Amendment No. 3, dated as of January 24, 2013, by Amendment No. 4, dated as of February 21, 2013, by Amendment
No. 5, dated as of June 6, 2013, by Amendment No. 6, dated as of June 26, 2013, by Amendment No. 7, dated as of September 17, 2013, by Amendment No. 8, dated as of December 20, 2013, the Successor Agent
Agreement and Amendment No. 9, dated as of January 8, 2015, by Amendment No. 10, dated as of March 5, 2015, by
Amendment No. 11, dated as of May 29, 2015 and by the Joinder Agreements, dated as of June 14, 2012, July 9, 2012, September 11, 2012, October 2,
2012, December 11, 2012, each of the Joinder Agreements dated as of August 5, 2013, and each of the Joinder Agreements dated as of February 6, 2014 (as the same may be further amended, restated, replaced, supplemented or
otherwise modified from time to time, the Credit Agreement; the terms defined therein and not otherwise defined herein being used herein as therein defined), among Valeant Pharmaceuticals International, Inc., a corporation
continued under laws of the Province of British Columbia (Borrower), certain Subsidiaries of Borrower, as Guarantors, the Lenders party thereto from time to time, Barclays Bank PLC (as successor to Goldman Sachs Lending Partners
LLC), as Administrative Agent and Collateral Agent, and the other Agents party thereto.
Pursuant to Section 2.13(a) of the
Credit Agreement, Borrower hereby gives notice (the Prepayment Notice) to the [Administrative Agent/Swing Line Lender] of a voluntary prepayment of [Series [ ] Tranche [ ]] [Term][Revolving] Loans under the Credit Agreement, and
in connection with that request, sets forth below the terms on which such prepayment will be made:
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(A) |
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Date of Prepayment (which is a Business
Day) (the Prepayment Date)1 |
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(B) |
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Amount of Prepayment2 |
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(C) |
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Class of Loans |
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[Series [ ] Tranche [ ]] [Term][Revolving] Loans |
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(D) |
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Type of Loans3 |
|
|
|
|
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(E) |
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Interest Period4 |
|
. |
1 |
Notice must be received not later than 12:00 noon (New York City Time), (i) in the case of a prepayment of Base Rate Loans, not less than one Business Day prior to the scheduled Prepayment Date, (ii) in the
case of a prepayment of Eurodollar Rate Loans, not less than three Business Days prior to the scheduled Prepayment Date and (iii) in the case of a prepayment of Swing Line Loans, on the scheduled Prepayment Date. |
2 |
Not less than (1) in the case of a partial prepayment of Base Rate Loans in Dollars, $5,000,000 and in integral multiples of $1,000,000 in excess thereof; (2) in the case of a partial prepayment of Eurodollar
Rate Loans, $5,000,000 and in integral multiples of $1,000,000 in excess thereof; and (3) in the case of a partial prepayment of Swing Line Loans, $500,000 and in integral multiples of $100,000 in excess thereof. |
3 |
(i) With respect to Tranche A Term Loans, a Base Rate Loan or a Eurodollar Rate Loan, (ii) with respect to Tranche B Term Loans, a Base Rate Loan or a Eurodollar Rate Loan, (iii) with respect to Revolving
Loans, a Base Rate Loan or a Eurodollar Rate Loan and (iv) with respect to Swing Line Loans, a Base Rate Loan. |
EXHIBIT E-1
[The prepayment of the [ ] [Term][Revolving] Loans
on the Prepayment Date pursuant to this Prepayment Notice is conditioned upon (as contemplated in Section 2.13 of the Credit Agreement) the effectiveness of the [ ]/[and the funding of the [Loans]
on the Prepayment Date].
In accordance with Section 2.13 of the Credit Agreement, Borrower reserves its right to revoke this
Prepayment Notice by notice to the Administrative Agent on or before the Prepayment Date in the event that [either] the [ ] does not become effective [or the [Loans] are not funded on the Prepayment
Date]].5
[Remainder of page intentionally left blank]
4 |
Only applicable in connection with a repayment of Eurodollar Rate Loans. In connection with a Eurodollar Rate Loan, an interest period of one, two, three or six months (or interest periods of twelve months if mutually
agreed upon by Borrower and the applicable Lenders). |
5 |
To include if prepayment is conditional upon effectiveness of other facilities, receipt of proceeds from the issuance of other Indebtedness or closing of an acquisition. |
EXHIBIT E-2
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Dated as of the date first written above. |
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VALEANT PHARMACEUTICALS INTERNATIONAL, INC. |
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By: |
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Name: |
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Title: |
EXHIBIT E-3
ANNEX A TO
COMPLIANCE CERTIFICATE
FOR THE
FISCAL [QUARTER] [YEAR] ENDING [ ], 20[ ].
|
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1. Consolidated Adjusted EBITDA: (i) - (ii) = |
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$[ , , ] |
|
|
(i) (a) Consolidated Net Income: |
|
$[ , , ] |
|
|
(b) Consolidated Interest Expense: |
|
$[ , , ] |
|
|
(c) provisions for taxes based on income: |
|
$[ , , ] |
|
|
(d) total depreciation expense: |
|
$[ , , ] |
|
|
(e) total amortization expense: |
|
$[ , , ] |
|
|
(f) fees and expenses incurred in connection with the Transactions or the 2010 Transactions: |
|
$[ , , ] |
|
|
(g) non-cash non-recurring expenses or charges: |
|
$[ , , ] |
|
|
(h) (i) restructuring charges (which, for the avoidance of doubt, shall include retention, severance,
systems establishment costs, excess pension charges, contract termination costs and costs to consolidate facilities and relocate employees) not to exceed (x) $100,000,000 in any twelve-month period ending on or prior to December 31, 2013
and (y) $125,000,000 in any twelve-month period ending after December 31, 2013 (in each case, other than such charges contemplated by the following clause (ii)) and (ii) (x) in any twelve-month period ending on or prior to
December 31, 2013, any restructuring charges (which, for the avoidance of doubt, shall include retention, severance, systems establishment costs, excess pension charges, contract termination costs and costs to consolidate facilities and
relocate employees and charges in connection with the termination or settlement of employee stock options, restricted stock units and performance stock units) in connection with the Medicis Acquisition, (y) on or prior to December 31,
2014, any restructuring charges (which, for the avoidance of doubt, shall include retention, severance, systems establishment costs, excess pension charges, contract termination costs and costs to consolidate facilities and relocate employees and
charges in connection with the termination or settlement of employee stock options, restricted stock units and performance stock units) in connection with the Bausch & Lomb Acquisition and (z) any restructuring charges (which, for the
avoidance of doubt, shall include retention, severance, systems establishment costs, excess pension charges, contract termination costs and costs to consolidate facilities and relocate employees and charges in connection with the termination or
settlement of employee stock options, restricted stock units and performance stock units, in each case in existence as of the Original Closing Date) in connection with the Sanitas Acquisition, the Transactions or the 2010 Transactions: |
|
$[ , , ] |
|
|
(i) any extraordinary gain or loss and any expense or charge attributable to the disposition of
discontinued operations: |
|
$[ , ,
] |
|
|
|
(j) (i) fees and expenses in connection with any proposed or actual issuance of any Indebtedness or Equity
Interests, or any proposed or actual acquisitions, investments, asset sales or divestitures permitted hereunder, in an aggregate amount not to exceed $75,000,000 in any twelve month period (in each case, other than such fees and expenses
contemplated by the following clause) and (ii) (x) fees and expenses in connection with the Medicis Acquisition and (y) fees and expenses in connection with the Bausch & Lomb Acquisition: |
|
$[ , , ] |
|
|
(k) other non-Cash charges (including impairment charges and other write offs of intangible assets and
goodwill but excluding any such non-Cash charge to the extent that it represents an accrual or reserve for potential Cash items in any future period or amortization of a pre-paid Cash charge that was paid in a prior period): |
|
$[ , , ] |
|
|
(l) the amount of costs savings and synergies projected by the Borrower in good faith to be realized on or
prior to September 30, 2012 as a result of the 2010 Transactions, net of the amount of actual cost savings and synergies realized during such period as a result of the 2010 Transactions; provided that (i) such cost savings and
synergies are (A) reasonably identifiable, (B) factually supportable and (C) certified by the chief financial officer of Borrower and (ii) the aggregate amount of such cost savings and synergies increasing Consolidated Adjusted
EBITDA pursuant to this clause (l) shall not exceed $140,000,000: |
|
$[ , , ] |
|
|
(ii) other non-Cash gains increasing Consolidated Net Income for such period (excluding any such non-Cash gain
to the extent it represents the reversal of an accrual or reserve for potential Cash items in any prior period and any such non-Cash gain relating to Cash received in a prior period (or to be received in a future period)): |
|
$[ , , ] |
|
|
2. Consolidated Interest Expense: |
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$[ , , ] |
|
|
3. Consolidated Excess Cash Flow: (i) - (ii) = |
|
$[ , , ] |
|
|
(i) (a) Consolidated Net Income: |
|
$[ , , ] |
|
|
(b) to the extent reducing Consolidated Net Income, the sum, without duplication, of amounts for non Cash
charges reducing Consolidated Net Income (including for depreciation and amortization and impairment charges and other write offs of intangible assets and goodwill but excluding any such non Cash charge to the extent that it represents an accrual or
reserve for a potential Cash charge in any future period or amortization of a prepaid Cash charge that was paid in a prior period): |
|
$[ , , ] |
|
|
(c) Consolidated Working Capital Adjustment: |
|
$[ , , ] |
|
|
(ii) (a) the amounts for such period paid from Internally
Generated Cash of (1) scheduled repayments of Indebtedness for borrowed money (excluding repayments of Revolving Loans or Swing Line Loans except to the extent the Revolving Commitments are permanently reduced in connection with such repayments) and
scheduled repayments of obligations under Capital Leases (excluding any interest expense portion thereof), (2) Consolidated Capital Expenditures and (3) the aggregate amount of any premium, make-whole or penalty payments actually paid in Cash by the
Borrower or any of its |
|
$[ , , ] |
|
|
|
Subsidiaries during such period that are required to be made in connection with any prepayment of Indebtedness: |
|
|
|
|
(b) other non Cash gains increasing Consolidated Net Income for such period (excluding any such non Cash
gain to the extent it represents the reversal of an accrual or reserve for a potential Cash charge in any prior period): |
|
$[ , , ] |
|
|
(c) the aggregate amount of Restricted Junior Payments made in Cash by Borrower or any of its Subsidiaries
during such period pursuant to clauses (d) and (g) of Section 6.4 using Internally Generated Cash, except to the extent that such Restricted Junior Payments are made to fund expenditures that reduce Consolidated Net Income: |
|
$[ , , ] |
|
|
(d) the aggregate amount of Investments or other acquisitions made in cash by Borrower or any of its
Subsidiaries during such period pursuant to clauses (g), (h), (i), (j), (k) and (l) of Section 6.6 (other than any intercompany Investments) or clause (h) of Section 6.8, in each case, using Internally Generated
Cash: |
|
$[ , , ] |
|
|
4. Consolidated Net Income:6 (i) - (ii) = |
|
$[ , , ] |
|
|
(i) the net income (or loss) of Borrower and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP: |
|
$[ , , ] |
|
|
(ii) (a) the income (or loss) of any Person (other than a Subsidiary of Borrower) in which any
other Person (other than Borrower or any of its Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to Borrower or any of its Subsidiaries by such Person during such
period: |
|
$[ , , ] |
|
|
(b) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Borrower or is
merged into or consolidated with Borrower or any of its Subsidiaries or the income (or loss) in respect of the assets of any Person accrued prior to the date such assets are acquired by Borrower or any of its Subsidiaries: |
|
$[ , , ] |
6 |
Without duplication of amounts included in clause (ii)(a), the net income of a Specified Joint Venture for such period shall be included in the calculation of Consolidated Net Income in proportion to Borrower and its
Subsidiaries Equity Interests in such Specified Joint Venture (provided that the net income of all Specified Joint Ventures included pursuant to this proviso for any period shall not exceed 10% of the aggregate Consolidated Net Income for
Borrower and its Subsidiaries for such period); provided, further, that, without duplication of any amounts that may be eligible to be included in clause (ii)(a), the net income of a Permitted Majority Investment for such period shall
be included in the calculation of Consolidated Net Income in proportion to Borrower and its Subsidiaries Equity Interests in such Permitted Majority Investment. |
|
|
|
(c) the income of any Subsidiary of Borrower (other than any such Subsidiary that is a Credit Party) during such
period to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary: |
|
$[ , , ] |
|
|
(d) any after tax gains or losses attributable to Asset Sales and casualty or condemnation events (of the type
described in the definition of Net Insurance/Condemnation Proceeds) or returned surplus assets of any Pension Plan, in each case accrued during such period: |
|
$[ , , ] |
|
|
(e) to the extent not included in clauses (ii)(a) through (d) above, any net extraordinary gains or net
extraordinary losses accrued during such period: |
|
$[ , , ] |
|
|
(f) the cumulative effect of a change in accounting principles: |
|
$[ , , ] |
|
|
(g) solely for purposes of calculating the CNI Growth Amount for such period, amortization or depreciation
expense incurred during such period with respect to assets that are used or useful in the business or lines of business in which Borrower and/or its Subsidiaries are engaged as of the Third Restatement Date or similar or related or ancillary
businesses: |
|
$[ , , ] |
|
|
5. Consolidated Total Debt: |
|
$[ , , ] |
|
|
6. Consolidated Working Capital: (i) - (ii) = |
|
$[ , , ] |
|
|
(i) Consolidated Current Assets: |
|
$[ , , ] |
|
|
(ii) Consolidated Current Liabilities: |
|
$[ , , ] |
|
|
7. Consolidated Working Capital Adjustment: (i) - (ii) = |
|
$[ , , ] |
|
|
(i) Consolidated Working Capital
as of the beginning of such period: |
|
$[ , , ] |
|
|
(ii) Consolidated Working Capital
as of the end of such period: |
|
$[ , , ] |
|
|
8. Interest Coverage Ratio: (i)/(ii) = |
|
|
|
|
(i) Consolidated Adjusted EBITDA
for the four-Fiscal Quarter Period then ended: |
|
$[ , , ] |
|
|
(ii) Consolidated Interest Expense
for such four-Fiscal Quarter Period: |
|
$[ , , ] |
|
|
Actual: |
|
. :1.00 |
Required: |
|
3.00:1.00 |
|
|
9. Secured Leverage Ratio: (i)/(ii) = |
|
|
|
|
|
(i) Consolidated Secured Indebtedness: |
|
$[ , , ] |
|
|
(ii) Consolidated Adjusted EBITDA
for the four-Fiscal Quarter period then ended: |
|
$[ , , ] |
|
|
Actual: |
|
. :1.00 |
Required (through and including the Fiscal Quarter ending December 31, 2011): |
|
1.75:1.00 |
|
|
Required (beginning with the Fiscal Quarter ending March 31, 2012): |
|
2.50:1.00 |
|
|
10. Leverage Ratio: (i)/(ii) = |
|
|
|
|
(i) Consolidated Total Debt: |
|
$[ , , ] |
|
|
(ii) Consolidated Adjusted EBITDA
for the four-Fiscal Quarter period then ended: |
|
$[ , , ] |
|
|
Actual: |
|
. :1.00 |
Required: |
|
. :1.00 |
Exhibit 31.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a)
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, J. Michael Pearson, certify that:
| |
1. | I have reviewed this quarterly report on Form 10-Q of Valeant Pharmaceuticals International, Inc. (the “Company”); |
| |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
| |
4. | The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: |
| |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| |
c. | Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| |
d. | Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and |
| |
5. | The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): |
| |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and |
| |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting. |
|
| | |
Date: July 27, 2015 | | |
/s/ J. MICHAEL PEARSON | | |
J. Michael Pearson | | |
Chairman of the Board and Chief Executive Officer (Principal Executive Officer) | | |
Exhibit 31.2
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a)
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert L. Rosiello, certify that:
| |
1. | I have reviewed this quarterly report on Form 10-Q of Valeant Pharmaceuticals International, Inc. (the “Company”); |
| |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
| |
4. | The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: |
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a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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c. | Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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d. | Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and |
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5. | The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): |
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a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and |
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b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting. |
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Date: July 27, 2015 | | |
/s/ ROBERT L. ROSIELLO | | |
Robert L. Rosiello |
Executive Vice-President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | | |
Exhibit 32.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. § 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, J. Michael Pearson, Chairman of the Board and Chief Executive Officer of Valeant Pharmaceuticals International, Inc. (the “Company”), certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
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1. | The Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2015 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
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2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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Date: July 27, 2015 | | |
/s/ J. MICHAEL PEARSON | | |
J. Michael Pearson | | |
Chairman of the Board and Chief Executive Officer
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This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the U.S. Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. § 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert L. Rosiello, Executive Vice-President and Chief Financial Officer of Valeant Pharmaceuticals International, Inc. (the “Company”), certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
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1. | The Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2015 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
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2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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Date: July 27, 2015 | | |
/s/ ROBERT L. ROSIELLO | | |
Robert L. Rosiello |
Executive Vice-President and Chief Financial Officer
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This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the U.S. Securities and Exchange Commission or its staff upon request.
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