as Borrower,
as Parent and a Guarantor,
and BIOVAIL CORPORATION,
as Guarantors,
MORGAN STANLEY SENIOR FUNDING, INC.
and
JEFFERIES FINANCE LLC
as Joint Lead Arrangers, Joint Bookrunners and Syndication Agents,
as Administrative Agent and Collateral Agent,
DNB NOR BANK ASA,
SUNTRUST BANK
and
THE BANK OF NOVA SCOTIA,
as Documentation Agent
Page | ||||
SECTION 1. DEFINITIONS AND INTERPRETATION | 2 | |||
1.1. Definitions | 2 | |||
1.2. Accounting Terms | 38 | |||
1.3. Interpretation, etc. | 38 | |||
1.4. Currency Matters | 38 | |||
1.5. Pro Forma Transactions | 38 | |||
SECTION 2. LOANS AND LETTERS OF CREDIT | 39 | |||
2.1. Term Loans | 39 | |||
2.2. Revolving Loans | 40 | |||
2.3. Swing Line Loans | 41 | |||
2.4. Issuance of Letters of Credit and Purchase of Participations Therein | 43 | |||
2.5. Pro Rata Shares; Availability of Funds | 47 | |||
2.6. Use of Proceeds | 47 | |||
2.7. Evidence of Debt; Register; Lenders’ Books and Records; Notes | 48 | |||
2.8. Interest on Loans | 49 | |||
2.9. Conversion/Continuation | 51 | |||
2.10. Default Interest | 51 | |||
2.11. Fees | 51 | |||
2.12. Scheduled Payments/Commitment Reductions | 53 | |||
2.13. Voluntary Prepayments/Commitment Reductions | 54 | |||
2.14. Mandatory Prepayments | 55 | |||
2.15. Application of Prepayments | 57 | |||
2.16. General Provisions Regarding Payments | 58 | |||
2.17. Ratable Sharing | 59 | |||
2.18. Making or Maintaining Eurodollar Rate Loans | 60 | |||
2.19. Increased Costs; Capital Adequacy | 61 | |||
2.20. Taxes; Withholding, etc. | 62 | |||
2.21. Obligation to Mitigate | 65 | |||
2.22. Defaulting Lenders | 66 | |||
2.23. Removal or Replacement of a Lender | 66 | |||
2.24. Incremental Facilities | 67 | |||
2.25.Interest Act(Canada) | 69 | |||
SECTION 3. CONDITIONS PRECEDENT | 69 | |||
3.1. Closing Date | 69 | |||
3.2. Conditions to Each Credit Extension | 74 | |||
3.3. Conditions to the Second Draw Tranche B Term Loans | 76 | |||
SECTION 4. REPRESENTATIONS AND WARRANTIES | 76 | |||
4.1. Organization; Requisite Power and Authority; Qualification | 76 | |||
4.2. Equity Interests and Ownership | 77 | |||
4.3. Due Authorization | 77 | |||
4.4. No Conflict | 77 | |||
4.5. Governmental Consents | 77 | |||
4.6. Binding Obligation | 77 |
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4.7. Historical Financial Statements | 77 | |||
4.8. Projections | 78 | |||
4.9. No Material Adverse Change | 78 | |||
4.10. [Reserved]. | 78 | |||
4.11. Adverse Proceedings, etc. | 78 | |||
4.12. Payment of Taxes | 78 | |||
4.13. Properties | 79 | |||
4.14. Environmental Matters | 79 | |||
4.15. No Defaults | 80 | |||
4.16. Governmental Regulation | 80 | |||
4.17. [Reserved] | 80 | |||
4.18. Employee Matters | 80 | |||
4.19. Employee Benefit Plans | 81 | |||
4.20. Canadian Employee Benefit Plans | 81 | |||
4.21. Solvency | 82 | |||
4.22. Compliance with Statutes, etc. | 82 | |||
4.23. Disclosure | 82 | |||
4.24. PATRIOT Act and PCTFA | 82 | |||
4.25. Creation, Perfection, etc. | 83 | |||
4.26. Senior Indebtedness | 83 | |||
4.27. OFAC Matters. | 83 | |||
SECTION 5. AFFIRMATIVE COVENANTS | 83 | |||
5.1. Financial Statements and Other Reports | 83 | |||
5.2. Existence | 87 | |||
5.3. Payment of Taxes and Claims | 87 | |||
5.4. Maintenance of Properties | 87 | |||
5.5. [Reserved] | 87 | |||
5.6. Insurance | 87 | |||
5.7. Books and Records; Inspections | 88 | |||
5.8. Lenders Meetings | 88 | |||
5.9. Compliance with Laws | 88 | |||
5.10. Environmental | 88 | |||
5.11. Subsidiaries | 90 | |||
5.12. Additional Material Real Estate Assets | 91 | |||
5.13. Interest Rate Protection | 91 | |||
5.14. Further Assurances | 91 | |||
5.15. Maintenance of Ratings | 92 | |||
5.16. Counterpart Agreement | 92 | |||
5.17. Post-Closing Matters | 92 | |||
5.18. Canadian Employee Benefit Plans | 92 | |||
SECTION 6. NEGATIVE COVENANTS | 92 | |||
6.1. Indebtedness | 92 | |||
6.2. Liens | 95 | |||
6.3. No Further Negative Pledges | 97 | |||
6.4. Restricted Junior Payments | 97 | |||
6.5. Restrictions on Subsidiary Distributions | 99 | |||
6.6. Investments | 99 | |||
6.7. Financial Covenants | 100 |
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Page | ||||
6.8. Fundamental Changes; Disposition of Assets; Acquisitions | 101 | |||
6.9. Disposal of Subsidiary Interests | 103 | |||
6.10. Sales and Leasebacks | 103 | |||
6.11. Transactions with Shareholders and Affiliates | 103 | |||
6.12. Conduct of Business | 104 | |||
6.13. Amendments or Waivers with Respect to Subordinated Indebtedness | 104 | |||
6.14. Amendments or Waivers of Organizational Documents | 104 | |||
6.15. Fiscal Year | 104 | |||
6.16. Specified Subsidiary Dispositions | 104 | |||
6.17. Biovail Insurance | 104 | |||
SECTION 7. GUARANTY | 104 | |||
7.1. Guaranty of the Obligations | 104 | |||
7.2. Contribution by Guarantors | 104 | |||
7.3. Payment by Guarantors | 104 | |||
7.4. Liability of Guarantors Absolute | 105 | |||
7.5. Waivers by Guarantors | 106 | |||
7.6. Guarantors’ Rights of Subrogation, Contribution, etc. | 107 | |||
7.7. Subordination of Other Obligations | 108 | |||
7.8. Continuing Guaranty | 108 | |||
7.9. Authority of Guarantors or Borrower | 108 | |||
7.10. Financial Condition of Borrower | 108 | |||
7.11. Bankruptcy, etc. | 108 | |||
7.12. Discharge of Guaranty upon Sale of Guarantor | 109 | |||
SECTION 8. EVENTS OF DEFAULT | 109 | |||
8.1. Events of Default | 109 | |||
SECTION 9. AGENTS | 112 | |||
9.1. Appointment of Agents | 112 | |||
9.2. Powers and Duties | 112 | |||
9.3. General Immunity | 112 | |||
9.4. Agents Entitled to Act as Lender | 114 | |||
9.5. Lenders’ Representations, Warranties and Acknowledgment | 114 | |||
9.6. Right to Indemnity | 114 | |||
9.7. Successor Administrative Agent, Collateral Agent and Swing Line Lender | 115 | |||
9.8. Collateral Documents and Guaranty | 116 | |||
9.9. Withholding Taxes | 118 | |||
SECTION 10. MISCELLANEOUS | 118 | |||
10.1. Notices | 118 | |||
10.2. Expenses | 119 | |||
10.3. Indemnity | 120 | |||
10.4. Set-Off | 121 | |||
10.5. Amendments and Waivers | 121 | |||
10.6. Successors and Assigns; Participations | 124 | |||
10.7. Independence of Covenants | 127 | |||
10.8. Survival of Representations, Warranties and Agreements | 127 | |||
10.9. No Waiver; Remedies Cumulative | 127 | |||
10.10. Marshalling; Payments Set Aside | 128 |
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Page | ||||
10.11. Severability | 128 | |||
10.12. Obligations Several; Independent Nature of Lenders’ Rights | 128 | |||
10.13. Headings | 128 | |||
10.14. APPLICABLE LAW | 128 | |||
10.15. CONSENT TO JURISDICTION | 128 | |||
10.16. WAIVER OF JURY TRIAL | 129 | |||
10.17. Confidentiality | 129 | |||
10.18. Usury Savings Clause | 130 | |||
10.19. Counterparts | 131 | |||
10.20. Effectiveness; Entire Agreement | 131 | |||
10.21. PATRIOT Act; PCTFA | 131 | |||
10.22. Electronic Execution of Assignments | 131 | |||
10.23. No Fiduciary Duty | 131 | |||
10.24. Effectiveness of This Agreement and the Other Credit Documents | 132 | |||
10.25. Judgment Currency | 132 | |||
10.26. Joint and Several Liability | 132 | |||
10.27. Advice of Counsel; No Strict Construction | 133 | |||
10.28. Day Not a Business Day | 133 | |||
10.29.Limitations Act, 2002 | 133 |
-iv-
APPENDICES: | A-1 | Tranche A Term Loan Commitments | ||
A-2 | Tranche B Term Loan Commitments | |||
A-3 | Revolving Commitments | |||
B | Notice Addresses | |||
SCHEDULES: | 1.1 | Closing Date Guarantors | ||
3.1(g)(i) | Closing Date Mortgaged Properties | |||
4.1 | Jurisdictions of Organization and Qualification | |||
4.2 | Equity Interests and Ownership | |||
4.13 | Real Estate Assets | |||
5.11 | Barbados Collateral Documents | |||
5.16 | Biovail Guarantors | |||
5.17 | 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 | Tranche A Term Loan Note | |||
B-2 | Tranche B Term Loan Note | |||
B-3 | Revolving Loan Note | |||
B-4 | Swing Line Note | |||
C | Compliance Certificate | |||
D | Assignment Agreement | |||
E | Certificate re Non-Bank Status | |||
F-1 | Closing Date Certificate | |||
F-2 | Solvency Certificate | |||
G | Counterpart Agreement | |||
H-1 | Form of Canadian Guarantee | |||
H-2 | Form of Barbados Guarantee | |||
I-1 | Form of Pledge and Security Agreement | |||
I-2 | Form of Canadian Pledge and Security Agreement | |||
I-3 | Form of Barbados Deed of Charge | |||
J-1 | Intercompany Note | |||
J-2 | Subordination Agreement | |||
K | Joinder Agreement | |||
L | Contribution Agreement |
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• | if a Base Rate Loan, at the Base Rateplus the Applicable Margin; or | ||
• | if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rateplus the Applicable Margin; |
• | if a Base Rate Loan, at the Base Rateplus the Applicable Margin; or | ||
• | if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rateplus the Applicable Margin. |
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Amortization | Tranche A | Tranche B | ||||||
Date | Term Loan Installments | Term Loan Installments | ||||||
December 31, 2010 | $ | 25,000,000 | $ | 3,750,000 | ||||
March 31, 2011 | $ | 25,000,000 | $ | 3,750,000 | ||||
June 30, 2011 | $ | 25,000,000 | $ | 3,750,000 | ||||
September 30, 2011 | $ | 25,000,000 | $ | 3,750,000 | ||||
December 31, 2011 | $ | 25,000,000 | $ | 3,750,000 | ||||
March 31, 2012 | $ | 25,000,000 | $ | 3,750,000 | ||||
June 30, 2012 | $ | 25,000,000 | $ | 3,750,000 | ||||
September 30, 2012 | $ | 25,000,000 | $ | 3,750,000 | ||||
December 31, 2012 | $ | 50,000,000 | $ | 3,750,000 | ||||
March 31, 2013 | $ | 50,000,000 | $ | 3,750,000 | ||||
June 30, 2013 | $ | 50,000,000 | $ | 3,750,000 | ||||
September 30, 2013 | $ | 50,000,000 | $ | 3,750,000 | ||||
December 31, 2013 | $ | 50,000,000 | $ | 3,750,000 | ||||
March 31, 2014 | $ | 50,000,000 | $ | 3,750,000 | ||||
June 30, 2014 | $ | 50,000,000 | $ | 3,750,000 | ||||
September 30, 2014 | $ | 50,000,000 | $ | 3,750,000 | ||||
December 31, 2014 | $ | 100,000,000 | $ | 3,750,000 | ||||
March 31, 2015 | $ | 100,000,000 | $ | 3,750,000 | ||||
June 30, 2015 | $ | 100,000,000 | $ | 3,750,000 | ||||
September 30, 2015 | — | $ | 3,750,000 | |||||
Tranche A Term Loan Maturity Date | $ | 100,000,000 | — | |||||
December 31, 2015 | — | $ | 3,750,000 | |||||
March 31, 2016 | — | $ | 3,750,000 | |||||
June 30, 2016 | — | $ | 3,750,000 | |||||
Tranche B Term Loan Maturity Date | — | $ | 1,413,750,000 |
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• | 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, in an aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of that amount); | ||
• | with respect to Eurodollar Rate 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 $5,000,000 and integral multiples of $1,000,000 in excess of that amount); and | ||
• | 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). |
• | upon not less than one Business Day’s prior written or telephonic notice in the case of Base Rate Loans; | ||
• | upon not less than three Business Days’ prior written or telephonic notice in the case of Eurodollar Rate Loans; and | ||
• | upon written or telephonic notice on the date of prepayment, in the case of Swing Line Loans; |
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Fiscal | Interest | |||
Quarter | Coverage Ratio | |||
December 31, 2010 | 2.25:1.00 | |||
March 31, 2011 | 2.50:1.00 | |||
June 30, 2011 | 2.50:1.00 | |||
September 30, 2011 | 2.50:1.00 | |||
December 31, 2011 | 2.50:1.00 | |||
March 31, 2012 | 2.75:1.00 | |||
June 30, 2012 | 2.75:1.00 | |||
September 30, 2012 | 2.75:1.00 | |||
December 31, 2012 | 2.75:1.00 | |||
March 31, 2013 and thereafter | 3.00:1.00 |
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Fiscal | Leverage | |||
Quarter | Ratio | |||
December 31, 2010 | 3.50:1.00 | |||
March 31, 2011 | 3.50:1.00 | |||
June 30, 2011 | 3.50:1.00 | |||
September 30, 2011 | 3.50:1.00 | |||
December 31, 2011 | 3.50:1.00 | |||
March 31, 2012 | 3.25:1.00 | |||
June 30, 2012 | 3.25:1.00 | |||
September 30, 2012 | 3.25:1.00 | |||
December 31, 2012 | 3.25:1.00 | |||
March 31, 2013 | 3.00:1.00 | |||
June 30, 2013 | 3.00:1.00 | |||
September 30, 2013 | 3.00:1.00 | |||
December 31, 2013 | 3.00:1.00 | |||
March 31, 2014 and thereafter | 2.75:1.00 |
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VALEANT PHARMACEUTICALS INTERNATIONAL | ||||||
By: | /s/ Steve T. Min | |||||
Title: Executive Vice President, General Counsel & Corporate Secretary | ||||||
ATON PHARMA, INC. | ||||||
By: | /s/ Steve T. Min | |||||
Title: Executive Vice President, General Counsel & Corporate Secretary | ||||||
CORIA LABORATORIES, LTD. | ||||||
By: | /s/ Steve T. Min | |||||
Title: Executive Vice President, General Counsel & Corporate Secretary | ||||||
DOW PHARMACEUTICAL SCIENCES, INC. | ||||||
By: | /s/ Steve T. Min | |||||
Title: Executive Vice President, General Counsel & Corporate Secretary | ||||||
DR. LEWINN’S PRIVATE FORMULA INTERNATIONAL, INC. | ||||||
By: | /s/ Steve T. Min | |||||
Title: Executive Vice President, General Counsel & Corporate Secretary | ||||||
OCEANSIDE PHARMACEUTICALS, INC. | ||||||
By: | /s/ Steve T. Min | |||||
Title: President | ||||||
PRINCETON PHARMA HOLDINGS, LLC | ||||||
By: | /s/ Steve T. Min | |||||
Title: Executive Vice President, General Counsel & Corporate Secretary | ||||||
PRIVATE FORMULA CORP. | ||||||
By: | /s/ Steve T. Min | |||||
Title: Executive Vice President, General Counsel & Corporate Secretary | ||||||
RENAUD SKIN CARE LABORATORIES, INC. | ||||||
By: | /s/ Steve T. Min | |||||
Title: President | ||||||
VALEANT BIOMEDICALS, INC. | ||||||
By: | /s/ Peter J. Blott | |||||
Title: President and Treasurer | ||||||
VALEANT PHARMACEUTICALS NORTH AMERICA | ||||||
By: | /s/ Steve T. Min | |||||
Title: Executive Vice President, General Counsel & Corporate Secretary |
-1-
GOLDMAN SACHS LENDING PARTNERS LLC, as Administrative Agent, Collateral Agent and Swing Line Lender | ||||||
By: | /s/ Alexis Maged | |||||
Name: | Alexis Maged | |||||
Title: | Authorized Signatory |
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GOLDMAN SACHS BANK USA, as a Lender | ||||||
By: | /s/ Alexis Maged | |||||
Name: | Alexis Maged | |||||
Title: | Authorized Signatory |
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THE BANK OF NOVA SCOTIA, as Issuing Bank | ||||||
By: | /s/ James J. Rhee | |||||
Title: Director |
By: | /s/ Chad Graves | |||||
Title: Associate Director |
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MORGAN STANLEY SENIOR FUNDING, INC., as a Lender | ||||||
By: | /s/ Christy Silvester | |||||
Title: Executive Director |
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MORGAN STANLEY BANK, N.A., as a Lender | ||||||
By: | /s/ Christy Silvester | |||||
Title: Executive Director |
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JEFFERIES FINANCE LLC, as a Lender | ||||||
By: | /s/ E. Joseph Hess | |||||
Title: Managing Director |
-7-
TO CREDIT AND GUARANTY AGREEMENT
Tranche A | Pro | |||||||
Lender | Term Loan Commitment | Rata Share | ||||||
Goldman Sachs Bank USA | $ | 450,000,000.00 | 45.00 | % | ||||
Morgan Stanley Senior Funding, Inc. | $ | 450,000,000.00 | 45.00 | % | ||||
Jefferies Finance LLC | $ | 100,000,000.00 | 10.00 | % | ||||
Total | $ | 1,000,000,000.00 | 100.00 | % | ||||
TO CREDIT AND GUARANTY AGREEMENT
Delayed Draw | ||||||||||||
Intial Tranche B | Term Loan | Pro | ||||||||||
Lender | Term Loan Commitment | Commitment | Rata Share | |||||||||
Goldman Sachs Bank USA | $ | 675,000,000.00 | $ | 56,250,000.00 | 45.00 | % | ||||||
Morgan Stanley Senior Funding, Inc. | $ | 675,000,000.00 | $ | 56,250,000.00 | 45.00 | % | ||||||
Jefferies Finance LLC | $ | 150,000,000.00 | $ | 12,500,000.00 | 10.00 | % | ||||||
Total | $ | 1,500,000,000 | $ | 125,000,000 | 100.00 | % | ||||||
TO CREDIT AND GUARANTY AGREEMENT
Pro | ||||||||
Lender | Revolving Commitment | Rata Share | ||||||
Goldman Sachs Bank USA | $ | 56,250,000.00 | 45.00 | % | ||||
Morgan Stanley Bank, N.A. | $ | 56,250,000.00 | 45.00 | % | ||||
Jefferies Finance LLC | $ | 12,500,000.00 | 10.00 | % | ||||
Total | $ | 125,000,000.00 | 100.00 | % | ||||
TO CREDIT AND GUARANTY AGREEMENT
Aliso Viejo, California 92656
Attention: General Counsel
Facsimile: (949) 461-6661
Mississauga, ON L5N 8M5
Attention: Chief Financial Officer
Telecopier: (905) 286-3029
Mississauga, ON L5N 8M5
Attention: Legal Department
Telecopier: (905) 286-3385
as Lead Arranger and Syndication Agent
200 West Street
New York, New York 10282
Attention: Lauren Day
Telecopier: (646) 769-7700
as a Lender
200 West Street
New York, New York 10282
Attention: Lauren Day
Telecopier: (917) 977-3966
as Lead Arranger, Syndication Agent and a Lender
1300 Thames Street Wharf, 4th floor
Baltimore, MD 21231
Attention: Richmond Ritterbush
Telecopier: (718) 233-2140
as a Lender
1300 Thames Street Wharf, 4th floor
Baltimore, MD 21231
Attention: Richmond Ritterbush
Telecopier: (718) 233-2140
Syndication Agent and a Lender
520 Madison Avenue
New York, New York 10022
Attention: E. Joseph Hess, Managing Director
Telecopier: (212) 284-3444
as Administrative Agent, Collateral Agent and
Swing Line Lender
200 West Street
New York, New York 10282
Attention: Lauren Day
Telecopier: (646) 769-7700
200 West Street
New York, New York 10282
Attention: Gabe Jacobson
200 West Street
New York, New York 10282
Attention: Lauren Day
Telecopier: (646) 769-7700
and a Lender
Corporate Banking — Diversified Industries Group
40 King Street West
Scotia Plaza, 62nd Floor
Toronto, Ontario M5W 2X6
Attention: Managing Director, Corporate Banking — Diversified Industries Group
Telecopier: (416) 866-2010