Execution Version SUPPORT AGREEMENT WHEREAS, this support agreement (the “Support Agreement”), dated as of May 1, 2018, sets out the agreement among (i) Concordia International Corp. (“Concordia” or the “Company”), (ii) each of the subsidiaries listed...
Execution Version
SUPPORT AGREEMENT
WHEREAS, this support agreement (the “Support Agreement”), dated as of May 1,
2018, sets out the agreement among (i) Concordia International Corp. (“Concordia” or the
“Company”), (ii) each of the subsidiaries listed on Schedule A hereto (collectively, the
“Subsidiary Guarantors” and each a “Subsidiary Guarantor”) and (iii) each of the other
signatories to this Support Agreement (or a Joinder Agreement (as defined herein)) that is a
Consenting Debtholder (as defined herein) regarding a recapitalization transaction (the
“Recapitalization Transaction”) in respect of the Company, the Subsidiary Guarantors and
Concordia Healthcare (Canada) Limited (“CHCL” and collectively, with Concordia and the
Subsidiary Guarantors, the “Concordia Parties” and each a “Concordia Party”), as more fully
described in the recapitalization term sheet attached as Schedule C (the “Term Sheet”, with the
terms of the Recapitalization Transaction set out therein and herein being, collectively, the
“Recapitalization Transaction Teerms”), which Recapitalization Transaction Terms are to
form the basis of the Recapitalization Transaction to be implemented pursuant to (i) the plan of
arrangement (the “CBCA Plan”) to be filed by the Company in the proceedings commenced by
Concordia and CHCL under the Canada Business Corporations Act (the “CBCA”) before the
Ontario Superior Court of Justice (Commercial List) (the “Ontario Court”) on October 20, 2017
(the “CBCA Proceedings”), or alternatively (ii) pursuant to an Alternative Implementation
Process (as hereinafter defined) in accordance with the terms of this Support Agreement.
AND WHEREAS, capitalized terms used but not otherwise defined in the main body of
this Support Agreement have the meanings given to them in Schedule B.
NOW THEREFORE, each Concordia Party and each Consenting Debtholder (each a
“Party” and collectively, the “Parties”) hereby agree as follows:
1. Recapitalization Transaction
The Recapitalization Transaction Terms as agreed among the Parties are set forth in this
Support Agreement, the Term Sheet and the CBCA Plan, which Term Sheet and CBCA
Plan are incorporated herein and made a part of this Support Agreement. In the case of a
conflict between the provisions contained in the main body of this Support Agreement
and the Term Sheet, the provisions of the main body of this Support Agreement shall
govern. In the case of a conflict between the provisions contained in this Support
Agreement or the Term Sheet and the CBCA Plan, the terms of the CBCA Plan shall
govern.
2. Representations and Warranties of the Consenting Debtholders
Each Consenting Debtholder, severally and not jointly, hereby represents and warrants to
each Concordia Party (and acknowledges that each Concordia Party is relying on such
representations and warranties) that:
(a) except as otherwise disclosed by such Consenting Debtholder to the Company in
writing on or prior to the date of this Support Agreement, it is either the sole
beneficial owner of, or has the sole voting and investment discretion over:
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(i) Secured Debt in the aggregate principal amount(s) set forth on its
signature page to this Support Agreement (collectively, the “Relevant
Secured Debt”, the Relevant Secured Debt, together with all obligations
owing in respect of the Relevant Secured Debt, including accrued and
unpaid interest and any other amount that such Consenting Debtholder is
entitled to claim in respect of the Relevant Secured Debt pursuant to the
Secured Debt Documents or otherwise, its “Total Secured Debt”), and no
other Secured Debt (except as set forth herein);
(ii) Unsecured Debt in the aggregate principal amount(s) set forth on its
signature page to this Support Agreement (collectively, the “Relevant
Unsecured Debt”, the Relevant Unsecured Debt, together with all
obligations owing in respect of the Relevant Unsecured Debt, including
accrued and unpaid interest and any other amount that such Consenting
Debtholder is entitled to claim in respect of the Relevant Unsecured Debt
pursuant to the Unsecured Debt Documents or otherwise, its “Total
Unsecured Debt”), and no other Unsecured Debt (except as set forth
herein); and
(iii) that number of Existing Shares set forth on its signature page to this
Support Agreement (the “Relevant Shares”), and no other Existing
Shares (except as set forth herein);
(b) it has the authority to vote or direct the voting of its Relevant Debt and Relevant
Shares;
(c) it: (i) is a sophisticated party with sufficient knowledge and experience to evaluate
properly the terms and conditions of this Support Agreement; (ii) has conducted
its own analysis and made its own decision to enter into this Support Agreement;
(iii) has obtained such independent advice in this regard as it deemed appropriate;
and (iv) has not relied in such analysis or decision on any Person other than its
own independent advisors;
(d) this Support Agreement has been duly authorized, executed and delivered by it,
and, assuming the due authorization, execution and delivery by the other Parties,
this Support Agreement constitutes the legal, valid and binding obligation of such
Consenting Debtholder, enforceable against such Consenting Debtholder in
accordance with its terms, subject to laws of general application and bankruptcy,
insolvency and other similar laws affecting creditors’ rights generally and general
principles of equity;
(e) it is duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its organization and has all approvals necessary to execute and
deliver this Support Agreement and to perform its obligations hereunder;
(f) except as contemplated by this Support Agreement or otherwise disclosed by such
Consenting Debtholder to the Company in writing on or prior to the date of this
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Support Agreement, it has not deposited any of its Relevant Debt or Relevant
Shares into a voting trust, or granted (or permitted to be granted) any proxies or
powers of attorney or attorney in fact, or entered into a voting agreement,
understanding or arrangement, with respect to the voting of its Relevant Debt or
Relevant Shares, or caused any of its Relevant Debt or Relevant Shares to become
subject to any liens, charges, encumbrances or similar restrictions, where such
trust, grant, agreement, understanding, arrangement, lien, charge, encumbrance or
similar restriction would reasonably be expected to restrict in any material manner
the ability of such Consenting Debtholder to comply with its obligations under
this Support Agreement, including the obligations in Section 4; and
(g) it is an “accredited investor” or “qualified institutional buyer” within the meaning
of the rules of the United States Securities and Exchange Commission under the
Securities Act of 1933, as amended, and the regulations promulgated thereunder,
as modified by The Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection
Act.
3. Representations and Warranties of the Concordia Parties
Each Concordia Party (except if the representation is explicitly applicable to the
Company only) jointly and severally represents and warrants to each Consenting
Debtholder (and each Concordia Party acknowledges that each Consenting Debtholder is
relying upon such representations and warranties) that:
(a) the Concordia Board and the board of directors of CHCL and each Subsidiary
Guarantor has (i) approved the transactions contemplated by the Recapitalization
Transaction, and (ii) determined that such transactions are in the best interest of
the Company, CHCL and each Subsidiary Guarantor, as applicable;
(b) it: (i) is a sophisticated party with sufficient knowledge and experience to evaluate
properly the terms and conditions of this Support Agreement; (ii) has conducted
its own analysis and made its own decision to enter into this Support Agreement;
(iii) has obtained such independent advice in this regard as it deemed appropriate;
and (iv) has not relied in such analysis or decision on any Person other than its
own independent advisors;
(c) this Support Agreement has been duly authorized, executed and delivered by it,
and, assuming the due authorization, execution and delivery by each of the other
Parties, this Support Agreement constitutes a legal, valid and binding obligation
of it, enforceable against it in accordance with its terms, subject to laws of general
application and bankruptcy, insolvency and other similar laws affecting creditors’
rights generally and general principles of equity;
(d) it is duly organized, validly existing, and in good standing under the Laws of the
jurisdiction of its incorporation and it has all requisite corporate power and
corporate capacity to enter into this Support Agreement and to perform its
obligations hereunder and consummate the transactions contemplated hereby;
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(e) except as disclosed in the Disclosure Letter, there is no proceeding, claim or
investigation pending before any Governmental Entity, or, to the Knowledge of
the Company, threatened against it or any of its properties that, individually or in
the aggregate, would reasonably be expected to result in a Material Adverse
Change;
(f) except for the Recapitalization Transaction or as disclosed in the Disclosure
Letter, no order has been made, petition presented or resolution passed for the
winding up of or appointment of a liquidator, receiver, administrative receiver,
administrator, compulsory manager or other similar officer in respect of it and no
analogous procedure has been commenced in any jurisdiction;
(g) the execution and delivery of this Support Agreement by it and satisfaction of the
obligations hereunder, and the completion of the transactions contemplated herein
do not and will not (i) subject to obtaining all requisite approvals required
pursuant to the CBCA Plan, violate or conflict in any material respect with any
Law applicable to it or any of its property or assets or (ii) result (with due notice
or the passage of time or both) in a violation, conflict or breach of, or constitute a
default under, or require any consent to be obtained under its certificate of
incorporation, articles, by-laws or other constating documents or, except as
disclosed in the Disclosure Letter, under any Material Contract to which it is a
party;
(h) all financial information that has been provided or made available to the
Consenting Debtholders, their affiliates or their respective Advisors by the
Company or the Company’s financial advisors, has been prepared in good faith
(and in the case of any financial statements forming part of such financial
information, in accordance with the IFRS) and fairly reflects in all material
respects as of the dates thereof, its financial condition and the results of its
operations;
(i) except as disclosed in the Disclosure Letter, there has not been (i) any Material
Adverse Change; (ii) any material transaction to which any Concordia Party is a
party outside the ordinary course of business; (iii) any material change in the
capital or outstanding liabilities of the Concordia Parties (taken as a whole); or
(iv) any material change report relating to the Concordia Parties filed on a
confidential basis with any securities commission that remains confidential;
(j) except as disclosed in the Disclosure Letter, it and its directors, officers and
employees have and are conducting its business in material compliance with all
applicable Laws (including any Laws regarding the environment and all permits,
licenses and other authorizations which are required thereunder) and it has not
received any notice or been otherwise advised to the effect that, or has otherwise
been advised that, it, its directors, officers or employees are not in material
compliance with such Laws (including any Laws regarding the environment and
all permits, licenses and other authorizations which are required thereunder);
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(k) except as disclosed in the Information or the Disclosure Letter, it has no material
liabilities or obligations of any nature (whether absolute, accrued, contingent or
otherwise) other than liabilities incurred in the ordinary course of business;
(l) except as disclosed in the Disclosure Letter, there is not now pending or, to the
Knowledge of the Company, threatened against it nor has it received notice in
respect of, any claim, potential claim, litigation, action, suit, arbitration or other
proceeding by or before any Governmental Entity, which would be reasonably
likely to result in, individually or in the aggregate, a Material Adverse Change;
(m) except as disclosed in the Disclosure Letter, since December 31, 2017, there has
not been any resignation or termination of any of the Key Personnel, or any
increase in the rate of compensation payable or to become payable by Concordia
or any of its direct or indirect subsidiaries or affiliates to any of the Key Personnel
(other than standard increases in connection with general, regularly-scheduled
reviews consistent with past practice in respect of employees other than the top
five highest paid employees of the Concordia Parties), and there has been no loan
made to, no grant of security nor guarantee to, nor the payment, grant or accrual
of any Bonus Payments to, any Key Personnel;
(n) except as disclosed in the Disclosure Letter, there are no “change of control”
payments or similar payments or compensation that would be payable to any of its
Key Personnel as a result of the implementation of the transactions contemplated
by this Support Agreement and the Recapitalization Transaction;
(o) since September 1, 2017, there have been no changes to the compensation for the
top ten highest paid employees of the Concordia Parties and their direct and
indirect subsidiaries and affiliates from their compensation as disclosed in the
Disclosure Letter and no Concordia Party or any of their respective direct or
indirect subsidiaries or affiliates have agreed to any, or become obligated to pay
any, Bonus Payments or other entitlements to such employees (except in
accordance with the terms of existing employment agreements, bonus, incentive
or retention plans or arrangements);
(p) all employment Contracts (including any extensions, supplements, amendments or
other documents relating thereto) for the Key Personnel are disclosed in the
Disclosure Letter and are in full force and effect;
(q) the financial statements issued by the Company on or after January 1, 2017 fairly
reflect in all material respects as of the dates thereof, the consolidated financial
condition of the Company and the results of its operations for the periods covered
thereby and have been prepared in accordance with IFRS and, since December 31,
2017 there has been no material adverse change in the consolidated financial
condition of the Company or its properties, assets, condition or undertakings;
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(r) except as disclosed in the Information or the Disclosure Letter, there is no
material litigation or other claims commenced or, to the Knowledge of the
Company, threatened in writing against it;
(s) to the Knowledge of the Company, it has: (i) filed all material tax and information
returns, declarations, remittances and filings which are required to be filed and all
such returns, declarations, remittances and filings are complete in all material
respects and accurate and no material fact or facts have been omitted therefrom
which would make any of them misleading; (ii) paid or made provision for
payment of all taxes which are due and payable (except for de minimis payments
or provisions); and (iii) provided adequate reserves (in accordance with IFRS) for
the payment of any material tax, the payment of which is being contested;
(t) it has complied with its public reporting obligations under applicable securities
Laws in all material respects and all documents filed by the Company with the
relevant securities regulators: (i) complied with all applicable securities Laws in
all material respects; and (ii) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading;
(u) (i) all of the Material Contracts to which it is a party are valid, binding and
enforceable against it in accordance with their terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights of creditors or general principles of
equity (regardless of whether enforceability is considered in a proceeding at law
or in equity); and (ii) except as otherwise contemplated by this Support
Agreement and the transactions and proceedings contemplated hereby, there is no
existing (or threatened in writing) breach, default or dispute with respect to, nor
has any event or circumstance occurred which, but for the passage of time or the
giving of notice, or both, would constitute a breach or default by it under, any of
the Material Contracts to which it is a party (with the exception of the Secured
Debt Documents and the Unsecured Debt Documents);
(v) the Company has not adopted or approved any shareholder rights plan that
remains in effect;
(w) Concordia is authorized to issue an unlimited number of common shares, of
which 51,283,800 shares are issued and outstanding, and Concordia has no other
capital stock authorized or issued and outstanding, other than 2,358,345 unvested
restricted share units, 30,033 unvested deferred share units and 1,336,667 stock
options outstanding; and, other than the foregoing, there are no outstanding
options, warrants, convertible securities or rights of any kind to purchase or
otherwise acquire capital stock or other securities of the Company;
(x) no order halting or suspending trading in securities of the Company or prohibiting
the sale of such securities has been issued to and is outstanding against the
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Company, and to the Knowledge of the Company, no investigations or
proceedings for such purpose are pending or threatened;
(y) to the Knowledge of the Company, none of (i) the Concordia Parties or (ii) any of
their respective directors, officers, employees, or any agent of the Concordia
Parties that will act in any capacity in connection with this Support Agreement, is
a Sanctioned Person. None of the Concordia Parties will use the proceeds
received by any of them from any transaction contemplated by this Support
Agreement to fund or facilitate any activities of any Sanctioned Person; and the
operations of the Concordia Parties are being conducted in compliance in all
material respects with Anti-Corruption Laws and Export Controls;
(z) the Disclosure Letter contains a true and complete list of all the Insurance
Policies. The Insurance Policies are in full force and effect and shall be in full
force and effect following the consummation of the transactions contemplated by
this Support Agreement. Except as disclosed in the Disclosure Letter, it has not
received any written notice of cancellation of, material premium increase with
respect to, or material alteration of coverage under, any of any Insurance Policies.
All premiums due on the Insurance Policies have either been paid or, if due and
payable prior to the Effective Date, will be paid before the Effective Date in
accordance with the payment terms of each Insurance Policy. All such Insurance
Policies (i) are valid and binding in accordance with their terms and (ii) have not
been subject to any lapse in coverage. There are no claims related to its business
pending under any Insurance Policies as to which coverage has been questioned,
denied or disputed or in respect of which there is an outstanding reservation of
rights. It is not in default under, and has not otherwise failed to comply with, in
any material respect, any provision contained in any Insurance Policy. To the
Knowledge of the Company, the Insurance Policies are sufficient for compliance
with all applicable Laws and contracts to which it is a party or by which it is
bound; and
(aa) there is no commitment, agreement or understanding ,whether explicit or implicit,
between the Concordia Parties or any of their respective Affiliates or related
parties, on one hand, and any Private Placement Party or any of its Affiliates or
related parties, on the other hand, that would provide or entitle any Private
Placement Party or any of its Affiliates or related parties to receive, directly or
indirectly, any benefit or other consideration (financial or otherwise) in
connection the Recapitalization Transaction, including, without limitation, a lump
sum payment, a payment for surrendering securities, or other enhancement in
benefits, regardless of the existence of any offsetting costs, other than the
consideration described in the Term Sheet, as amended from time to time in
accordance with this Agreement, and none of the Concordia Parties or any of their
respective Affiliates or related parties will enter into any such commitment,
agreement or understanding while this Agreement remains in effect.
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4. Consenting Debtholders’ Covenants and Agreements
Subject to, and in consideration of, the matters set forth in Section 5 below, each
Consenting Debtholder (severally and not jointly) hereby acknowledges, covenants and
agrees:
(a) to the Recapitalization Transaction Terms and the implementation of same
pursuant to the CBCA Proceedings in accordance with the terms of this Support
Agreement and the Milestones;
(b) not to, directly or indirectly, from the date hereof to the date this Support
Agreement is terminated:
(i) sell, assign, lend, pledge, hypothecate, dispose or otherwise transfer (in
each case, “Transfer”) any of its Relevant Debt or Relevant Shares or any
rights or interests therein (or permit any of the foregoing with respect to
any of its Relevant Debt or Relevant Shares) or enter into any agreement,
arrangement or understanding in connection therewith except with the
prior written consent of Concordia, provided that each Consenting
Debtholder may, subject to applicable securities Laws, without the consent
of Concordia, Transfer some or all of its Relevant Debt or Relevant Shares
to: (I) any other fund managed by the Consenting Debtholder (or an
Affiliate) for which the Consenting Debtholder (or such Affiliate) has the
voting and investment discretion, including discretionary authority to
manage or administer funds and continues to exercise investment and
voting authority with respect to the transferred Relevant Debt or Relevant
Shares and such Consenting Debtholder (or such Affiliate) shall continue
to be bound by this Support Agreement in respect of any such Relevant
Debt or Relevant Shares, (II) any other Consenting Debtholder, in which
event, (x) the transferor shall be deemed to relinquish its rights (and be
released from its obligations) under this Support Agreement in respect of
such transferred Relevant Debt or Relevant Shares, and (y) the transferee
shall be bound by the terms of this Support Agreement in respect of such
transferred Relevant Debt or Relevant Shares, and (III) any other Person
provided that in the case of any such Transfer pursuant to this clause (III),
such Person has executed a Joinder Agreement with respect to the
transferred Relevant Debt or Relevant Shares, in which event, the
transferor shall be deemed to relinquish its rights (and be released from its
obligations) under this Support Agreement in respect of such transferred
Relevant Debt or Relevant Share; or
(ii) except as contemplated by this Support Agreement, deposit any of its
Relevant Debt or Relevant Shares into a voting trust, or grant (or permit to
be granted) any proxies or powers of attorney or attorney in fact, or enter
into a voting agreement, understanding or arrangement, with respect to the
voting of its Relevant Debt or Relevant Shares if such trust, grant,
agreement, understanding or arrangement would in any manner restrict the
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ability of the Consenting Debtholder to comply with its obligations under
this Support Agreement, including the obligations in this Section 4;
provided that notwithstanding anything herein to the contrary: (A) a Consenting
Debtholder may Transfer its Relevant Debt or Relevant Shares to an entity that is
acting in its capacity as a Qualified Marketmaker (as defined below) without the
requirement that the Qualified Marketmaker become a Consenting Debtholder;
provided that (I) such Qualified Marketmaker must Transfer such right, title, or
interest in such Relevant Debt or Relevant Shares within five (5) Business Days
after its receipt thereof to a transferee that is or becomes (by executing a Joinder
Agreement in accordance with this Support Agreement) a Consenting Debtholder
at the time of such Transfer, (II) the transferor Consenting Debtholder shall be
solely responsible for the Qualified Marketmaker’s failure to comply with the
requirements of this Section 4(b), and (III) any Transfer that does not comply with
the terms and procedures set forth herein shall be deemed void ab initio and the
Company (on behalf of the Concordia Parties) and each of the Consenting
Debtholders shall have the right to enforce the voiding of such Transfer; and (B)
after the date hereof, to the extent that a Consenting Debtholder acquires
Additional Debt or Additional Shares acting in its capacity as a Qualified
Marketmaker, it may Transfer any right, title or interest in such Additional Debt
or Additional Shares without the requirement that the transferee be or become a
Consenting Debtholder. For these purposes, a “Qualified Marketmaker” means an
entity that (x) holds itself out to the market as standing ready in the ordinary
course of its business to purchase from customers and sell to customers claims
against the Concordia Parties (including debt securities or other debt) or enter
with customers into long and short positions in claims against the Concordia
Parties (including debt securities or other debt), in its capacity as a dealer or
market maker in such claims against the Concordia Parties, and (y) is in fact
regularly in the business of making a market in claims against issuers or
borrowers (including debt securities or other debt);
(c) not to take any action that is inconsistent, in any material respect, with its
obligations under this Support Agreement or that would frustrate, hinder or delay
the consummation of the Recapitalization Transaction and the CBCA Plan;
provided that nothing in this Support Agreement shall restrict, limit, prohibit, or
preclude, in any manner not inconsistent with its obligations under this Support
Agreement, any of the Consenting Debtholders from (A) appearing in Court with
respect to any motion, application, or other documents filed by the Concordia
Parties and objecting to, or commenting upon, the relief requested therein, (B)
enforcing any rights under this Support Agreement, including any consent or
approval rights set forth herein, or (C) contesting whether any matter, fact, or
thing is a breach of, or is inconsistent with, this Support Agreement, or exercising
any rights or remedies reserved herein;
(d) to vote (or cause to be voted) all of its Relevant Debt and Relevant Shares, as
applicable:
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(i) in favour of the approval, consent, ratification and adoption of the CBCA
Plan (and any actions required in furtherance thereof) and the Chapter 11
Plan under any potential Chapter 11 Process, the solicitation of which is to
be conducted by Concordia concurrent with its solicitation of votes in
respect of the CBCA Plan, in each case in accordance with the terms
herein; and
(ii) against the approval, consent, ratification and adoption of any matter or
transaction that, if approved, consented to, ratified or adopted could
reasonably be expected to delay, challenge, frustrate or hinder the
consummation of the Recapitalization Transaction or the CBCA Plan, as
applicable,
and that it shall tender its proxy for any such vote in compliance with any
deadlines set forth in the Interim Order;
(e) not to propose, file, solicit, vote for or otherwise support any alternative offer,
restructuring, liquidation, workout or plan of compromise or arrangement or
reorganization of or for the Company, including any proceeding under the CBCA,
other legislation or otherwise, that is inconsistent with the Recapitalization
Transaction and the CBCA Plan, except with the prior written consent of the
Company;
(f) to support, and to instruct their respective Advisors to support all motions filed by
the Company in the CBCA Proceedings that are consistent with and in furtherance
of the Recapitalization Transaction and the CBCA Plan and, if requested by the
Company, provide commercially reasonable assistance to the Company in
obtaining any required regulatory approvals and/or required material third party
approvals to effect the Recapitalization Transaction, in each case at the expense of
the Company;
(g) subject to Sections 14 and 16 hereof, to allow the Company, in good faith
cooperation with the Consenting Debtholders, to disclose the existence and
factual details of this Support Agreement with respect to any public disclosure,
including, without limitation, press releases and court materials, and the filing of
this Support Agreement on SEDAR and/or XXXXX and with the Court in
connection with the CBCA Proceedings; and
(h) that this Support Agreement shall in no way be construed to preclude a
Consenting Debtholder from acquiring additional Secured Debt or Unsecured
Debt (collectively, “Additional Debt”) or Existing Shares (“Additional Shares”)
that are not otherwise subject to this Support Agreement; provided, however, that
any and all such Additional Debt and Additional Shares shall automatically and
immediately upon acquisition by a Consenting Debtholder be deemed to
constitute Relevant Secured Debt or Relevant Unsecured Debt, as applicable (and
together with all accrued and unpaid interest and any other amount that such
Consenting Debtholder is entitled to claim in respect of such Additional Debt
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shall be deemed to constitute Relevant Debt) and Relevant Shares, respectively,
of the Consenting Debtholder hereunder subject to the terms of this Support
Agreement, and to the extent such acquisition is for Additional Debt and/or
Additional Shares in excess of 5% of such Consenting Debtholder’s Relevant
Debt or Relevant Shares immediately prior to such acquisition, the Consenting
Debtholder hereby agrees to provide written notice to the Company advising of (i)
the acquisition by the Consenting Debtholder of Additional Debt or Additional
Shares, (ii) the principal amount of Additional Debt or the number of Additional
Shares acquired by the Consenting Debtholder, as applicable, and (iii) the date of
such acquisition, reasonably promptly following any such acquisition.
5. Concordia Parties’ Covenants and Agreements
Subject to, and in consideration of, the matters set forth in Section 4 above, each
Concordia Party (jointly and severally) acknowledges, covenants and agrees:
(a) to the Recapitalization Transaction Terms;
(b) to pursue the completion of the Recapitalization Transaction in good faith by way
of the CBCA Plan on the timetable set forth herein, and not to take any action that
is inconsistent with the terms of this Support Agreement;
(c) that the Company shall file the CBCA Plan on a timely basis consistent with the
terms and conditions of this Support Agreement, recommend to any Person
entitled to vote on the CBCA Plan that they vote to approve the CBCA Plan and
take all reasonable actions necessary to obtain any regulatory approvals for the
Recapitalization Transaction and to achieve the following timeline with respect to
the CBCA Proceedings (which timeline may be extended at any time as agreed by
the Company and the Majority Initial Consenting Debtholders):
(i) filing the application in the CBCA Proceedings seeking the Interim Order
by no later than May 2, 2018;
(ii) obtain entry of the Interim Order by the Ontario Court by no later than
May 2, 2018;
(iii) commence solicitation procedures with respect to the CBCA Plan on or
before May 30, 2018;
(iv) the CBCA Plan shall have been approved by the Ontario Court pursuant to
the Final Order by no later than August 17, 2018;
(v) the Recapitalization Transaction shall have been implemented pursuant to
the CBCA Plan on or prior to the Outside Date; and
(vi) comply with the timelines and terms set forth in Schedule F and Schedule
G, as applicable.
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(d) to provide draft copies of all motions or applications and other documents with
respect to the Recapitalization Transaction and the CBCA Plan that the Company
intends to file with the Court in connection with the CBCA Proceedings to the
Advisors at least three (3) Business Days prior to the date when the Company
intends to file or otherwise disseminate such documents (or, where circumstances
make it impracticable to allow for three (3) Business Days’ review, with as much
opportunity for review and comment as is practically possible in the
circumstances, but in no event less than two (2) Business Days’ review unless
otherwise agreed by the Majority Initial Consenting Debtholders), and all such
filings and other documents submitted to the Court shall be in a form consistent
with this Support Agreement and the Term Sheet and otherwise acceptable to the
Majority Initial Consenting Debtholders, acting reasonably;
(e) to not, without the prior written consent of the Majority Initial Consenting
Debtholders, amend, modify, replace, terminate, repudiate, disclaim or waive any
rights under or in respect of (i) its Material Contracts (other than as expressly
required by such Material Contracts, by this Support Agreement or in the ordinary
course of performing their obligations under such Material Contracts) in any
manner that would reasonably be expected to be material, or (ii) this Support
Agreement (except as permitted by the terms hereof);
(f) to promptly notify the Advisors of any claims threatened or brought against it
which may impede or delay the consummation of the Recapitalization Transaction
or the CBCA Plan;
(g) to not, without the prior written consent of the Majority Initial Consenting
Debtholders, enter into or agree to any settlement, settlement proposal,
commitment, commitment proposal or otherwise settle (i) any outstanding claim,
litigation, proceeding or action in excess of $500,000 in the aggregate, or (ii) with
any regulatory authority or Governmental Entity (including, for greater certainty,
the UK Competition and Markets Authority) in respect of any investigation into
any Concordia Party;
(h) to promptly notify the Advisors if, at any time before the Effective Time, it
becomes aware that any material application for a regulatory approval or any
other material order, registration, consent, filing, ruling, exemption or approval
under applicable laws contains a statement which is materially inaccurate or
incomplete or of information that otherwise requires an amendment or supplement
to such application, and the Company shall co-operate in the preparation of such
amendment or supplement as required;
(i) to be liable to and to indemnify and hold harmless the Consenting Debtholders
and their respective subsidiaries and affiliates, and their respective officers,
directors, employees, advisors, legal counsel and agents (each an “Indemnified
Party”) from and against any and all liabilities, claims, actions, proceedings,
losses (other than indirect loss), costs, damages and expenses of any kind
(including, without limitation, the reasonable costs of defending against any of the
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foregoing, but excluding any and all liabilities, claims, actions, proceedings,
losses, costs, damages and expenses of any kind that are attributable to gross
negligence, fraud, willful misconduct, breach of applicable Law or this Support
Agreement of or, by any Indemnified Party as determined by the final, non-
appealable judgment of a court of competent jurisdiction) to which any
Indemnified Party may become subject or may suffer or incur in any way in
relation to or arising from a breach by any Concordia Party of any of its
obligations, covenants, representations or warranties hereunder, and, to the extent
that such claims arise directly or indirectly in connection with the CBCA Plan, the
Recapitalization Transaction or any proceedings commenced with respect to the
CBCA Plan or the Recapitalization Transaction, any other claim, litigation,
investigation, actions or matters related directly or indirectly to the CBCA Plan or
the Recapitalization Transaction, regardless of whether any Indemnified Party is a
party thereto and whether or not the transactions contemplated hereby are
consummated, and to reimburse each Indemnified Party promptly upon demand
for all documented legal and other expenses reasonably incurred by it in
connection with investigating, preparing to defend or defending, or providing
evidence in or preparing to serve or serving as a witness with respect to, any
lawsuit, investigation, claim or other proceeding relating to any of the foregoing
(including, without limitation, in connection with the enforcement of the
indemnification obligations set forth herein);
(j) to not: (i) materially increase compensation or severance entitlements or other
benefits payable (including, for greater certainty, Bonus Payments) to Key
Personnel, including by way of a key employee incentive plan, (ii) materially
increase compensation or severance entitlements or other benefits payable
(including, for greater certainty, Bonus Payments) to all or substantially all of the
employees of the Concordia Parties or any of their respective direct or indirect
subsidiaries or affiliates, or (iii) take or omit to take any action (A) that would
entitle any person to any bonus, lump sum, change of control, severance, retention
or other payment any time prior to the last date that such person would be entitled
to receive such payment in accordance with a binding written agreement with the
Company (entered into prior to the date hereof or otherwise as required in
accordance with applicable Law) or (B) to otherwise secure or guarantee any such
payment;
(k) to comply with the terms and covenants of the Secured Debt Documents other
than any terms and covenants that may be breached: (i) as a result of (A) the
commencement and/or continuation of the CBCA Proceedings; and (B) the
pursuit of the Recapitalization Transaction, including the entering into of any
related documents, as specifically contemplated by this Support Agreement; or
(ii) pursuant to the terms of the Preliminary Interim Order;
(l) except with the prior written consent of the Majority Initial Consenting
Debtholders, to operate its business in the ordinary course of business, having
regard to its current financial condition and to not enter into, amend or terminate
any Material Contract;
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(m) to not, except with the prior written consent of the Majority Initial Consenting
Debtholders, enter into any agreement for any acquisition or divestiture by the
Company or any of its direct or indirect subsidiaries or affiliates of any of its
assets or business with a purchase price that exceeds $5 million;
(n) except with the prior written consent of the Majority Initial Consenting
Debtholders, or as specifically permitted by this Support Agreement and the
Recapitalization Transaction, to not: (i) prepay, redeem prior to maturity, defease,
repurchase or make other prepayments in respect of any non-revolving
indebtedness; (ii) other than in the ordinary course of business (including, without
limitation, the cash collateral agreements described in the Disclosure Letter)
consistent with past practice, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable with respect to any
indebtedness of any kind whatsoever; (iii) create, incur, assume or otherwise
cause or suffer to exist or become effective any new lien, charge, mortgage,
hypothec or security interest of any kind whatsoever on, over or against any of
their assets or property (except for any lien, charge, mortgage, hypothec or
security interest that is incurred in the ordinary course of business and that is not
material); or (iv) except in connection with the ordinary cash management
procedures between the Company and its direct and indirect subsidiaries and
affiliates or any intercompany dividends or distributions made that are consistent
with past practice, declare or pay any dividends or distributions on or in respect of
any shares in the Company or any of its direct or indirect subsidiaries or affiliates
or redeem, retract, purchase or acquire any of such shares, provided that no such
dividends or distributions shall be made to an entity that is not subject to the
security interests held by the Secured Debtholders;
(o) (i) to promptly notify the Advisors of any resignation of, or leave of absence
taken by, any Key Personnel; and (ii) to not, without the prior written consent of
the Majority Initial Consenting Debtholders, such consent not to be unreasonably
withheld, (A) remove or take any action towards removing any Key Personnel or
(B) appoint any individual who would constitute Key Personnel or take any action
towards replacing any Key Personnel;
(p) to promptly notify the Advisors upon becoming aware of any claims threatened in
writing or brought against it in excess of $5 million in the aggregate;
(q) to promptly notify the Advisors of (i) any event, condition, or development that
has resulted in the inaccuracy or breach of any representation or warranty,
covenant or agreement contained in this Support Agreement made by or to be
complied with by any Concordia Party in any material respect; or (ii) any material
change in any of the information provided by or on behalf of the Concordia
Parties to the Consenting Debtholders or the Advisors in connection with the
transactions contemplated by this Support Agreement, the Recapitalization
Transaction or the CBCA Plan; provided that with respect to the foregoing, if an
Advisor reasonably determines that such notification should be provided to the
Consenting Debtholders, such Advisor may provide such notification to the
15
Consenting Debtholders, with the Company’s prior written consent, not to be
unreasonably withheld; provided further that if such notification provided by the
Advisor to the Consenting Debtholders is reasonably determined by the
Consenting Debtholder, based on advice from its Advisors and in consultation
with the Company and its advisors, to include material non-public information,
such information shall be publicly disclosed by the Company upon the written
request of such Advisor within two (2) Business Days. In the event that the
Company fails to disclose such information in accordance with the preceding
sentence or any Consenting Debtholder believes, acting reasonably, that such
information restricts it from purchasing or selling securities of the Company
without violating applicable securities laws, then the Company hereby agrees that
such Consenting Debtholder may publicly disclose such information through a
press release or other means; provided that, such Consenting Debtholder shall first
provide a draft of any such proposed disclosure to the Company at least two (2)
Business Days prior to such disclosure and any such disclosure shall reflect the
reasonable comments of the Company that such Consenting Debtholder deems
appropriate in its good faith discretion;
(r) to not, except pursuant to the CBCA Plan, amalgamate, consolidate with or merge
into, transfer or sell all, substantially all, or a material portion of their assets to,
another entity, or change the nature of its business or its corporate or capital
structure;
(s) to provide, upon reasonable request and with reasonable prior notice, the Advisors
with reasonable access to the books and records of the Company and their
subsidiaries and affiliates (other than books or records that are subject to solicitor-
client privilege or other type of privilege, as applicable) for review in connection
with the Recapitalization Transaction, in each case in accordance with, and only
to the extent permitted or required by, the terms of any confidentiality agreements
with the Company;
(t) the Company shall use commercially reasonable efforts to the extent possible
under applicable Laws to maintain a listing on a Designated Offshore Securities
Market and its status as a reporting company in the United Stated under Section
12 of the Securities Exchange Act of 1934;
(u) the Company agrees to use commercially reasonable efforts to cause the registrar
and transfer agent to remove any legend on a share certificate required by the U.S.
Securities Act to permit sales made in reliance on Rule 904 of Regulation S upon
delivery of a signed declaration in form attached as Schedule B to the
Subscription Agreement, along with any other documents reasonably requested by
the registrar or the transfer agent, and the Company agrees to implement similar
procedures for any shares held through the Canadian Depository for Securities or
the Depositary Trust Company;
(v) to not, except (i) as permitted by this Support Agreement; or (ii) with the prior
written consent of the Majority Initial Consenting Debtholders, commence,
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consummate an agreement to commence, make, solicit, assist, initiate, encourage,
facilitate, propose, file, initiate any discussions or negotiations regarding any
alternative offer, restructuring, liquidation, workout or plan of compromise or
arrangement, reorganization under Chapter 11, the CBCA, other legislation or
otherwise;
(w) to the extent deemed necessary or advisable by the Company, with the prior
written consent of the Majority Consenting Private Placement Parties, or to the
extent deemed necessary or advisable by the Majority Consenting Private
Placement Parties, acting reasonably, the Concordia Parties will commence
recognition proceedings in respect of the CBCA Plan under applicable foreign
Laws to obtain a recognition or equivalent order (including an enforcement order)
in respect of the CBCA Plan under such applicable foreign Laws, subject to all
filings, pleadings, motions and orders made in any such proceeding being in form
and substance acceptable to Majority Consenting Private Placement Parties, and
provided that, any permissions and waivers that apply to the CBCA Proceedings
in accordance with this Support Agreement, shall apply equally to any such
recognition proceedings;
(x) to the extent that the Company (acting reasonably) consults with the Private
Placement Parties under the Subscription Agreement and resolves to convert
certain of the Company's direct or indirect U.S. incorporated subsidiaries into a
limited liability company which at all times will be treated as a disregarded entity
for US tax purposes, then the Company shall, using commercially reasonable
efforts, convert such direct or indirect subsidiaries into Delaware limited liability
companies prior to the Effective Date;
(y) to pay in full in cash the reasonable and documented fees and expenses of (i) the
Advisors in accordance with the terms of their respective agreements with the
Company; and (ii) Osler, Xxxxxx & Harcourt LLP, White & Case LLP, Xxxxxxx
Xxxxx LLP, Xxxx, Xxxxx Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP and Ashurst LLP
within six (6) Business Days following the date of execution of this Support
Agreement in accordance with any outstanding invoices issued in connection with
services rendered to any Initial Consenting Debtholder prior to the date hereof;
and
(z) that the total principal amount of the claims in respect of the Swap Agreement
forming part of the Secured Debtholder Claims shall be in the amount of
USD$114,431,046, which amount shall apply for all purposes in the CBCA
Proceedings and any Alternative Implementation Processes.
6. Negotiation of Documents
(a) Subject to the terms and conditions of this Support Agreement, the Parties shall
reasonably cooperate with each other and shall coordinate their activities (to the
extent practicable) in respect of (i) the timely satisfaction of conditions with
respect to the effectiveness of the Recapitalization Transaction and the CBCA
17
Plan as set forth herein and therein and otherwise ancillary thereto, (ii) all matters
concerning the implementation of the Recapitalization Transaction and the CBCA
Plan as set forth herein and therein and otherwise ancillary thereto, and (iii) the
pursuit and support of the Recapitalization Transaction and the CBCA Plan.
Furthermore, subject to the terms and conditions of this Support Agreement, each
of the Parties shall take such actions as may be reasonably necessary to carry out
the purposes and intent of this Support Agreement, including making and filing
any required regulatory filings, in each case at the expense of the Company.
(b) Subject to the terms and conditions of this Support Agreement, to the extent the
Support Agreement has not been terminated in accordance with its terms, each
Party hereby covenants and agrees (i) to reasonably cooperate and negotiate in
good faith, and consistent with this Support Agreement, the Definitive Documents
and all ancillary documents relating thereto, as applicable, and (ii) to the extent it
is a party thereto, to execute, deliver and perform its obligations under such
documents.
7. Alternative Implementation Process
(a) In the event that the CBCA Conditions are not satisfied in accordance with their
terms on or prior to August 17, 2018 (or such other date as may be agreed by
Concordia and the Majority Initial Consenting Debtholders, each acting
reasonably), or it is otherwise determined by Concordia, the Majority Initial
Consenting Debtholders and the Majority Consenting Private Placement Parties
that the Recapitalization Transaction shall not be implemented pursuant to the
CBCA Plan in the CBCA Proceedings for any reason, then:
(i) to the extent that, within three (3) Business Days of the CBCA Conditions
not being satisfied, Concordia sends a written notice to the Advisors
requesting that the Concordia Parties implement the Recapitalization
Transaction through the CCAA Proceedings and, only to the extent that
within three (3) Business Days of receipt of such request, the Majority
Initial Consenting Debtholders and the Majority Consenting Private
Placement Parties each consent in writing to such request, such consent
being in their sole and absolute discretion, the Concordia Parties may elect
to implement the Recapitalization Transaction pursuant to CCAA
Proceedings before the Ontario Court in accordance with the terms and
timeline set forth herein and in Schedule F hereto; or
(ii) the Concordia Parties may elect to implement the Recapitalization
Transaction through Chapter 11 Process before the Bankruptcy Court in
accordance with the terms and timeline set forth herein and in Schedule G
hereto.
(b) In the event that the Company commences the CCAA Proceedings or the Chapter
11 Process (collectively, the “Alternative Implementation Processes” and each
18
an “Alternative Implementation Process”) in accordance with Section 7(a)
above, then:
(i) the Recapitalization Transaction shall be implemented on substantially the
same terms as set forth in this Support Agreement, the Term Sheet, the
CBCA Plan and the Subscription Agreement, with any necessary
amendments as the structure and implementation of the Recapitalization
Transaction may reasonably require pursuant to an Alternative
Implementation Process and as Concordia, the Majority Initial Consenting
Debtholders and the Majority Consenting Private Placement Parties may
agree, each acting reasonably, and in accordance with the terms and
timelines contained in Schedule F or Schedule G, as applicable;
(ii) all references to the “CBCA Plan” contained herein shall be interpreted to
mean a CCAA Plan or Chapter 11 Plan, as applicable;
(iii) all references to the “CBCA Proceedings” contained herein shall be
interpreted to mean the CCAA Proceedings or the Chapter 11 Process, as
applicable;
(iv) all references to the “Interim Order” contained herein shall be interpreted
to mean such order of the applicable Court in the Alternative
Implementation Process calling for meetings of the Secured Debtholders
and the Unsecured Debtholders, to consider and vote in respect of the
Recapitalization Transaction, as applicable or approving the adequacy of
the Disclosure Statement with respect to a Chapter 11 Plan and the related
solicitation materials and procedures;
(v) all references to the “Court” contained herein shall be interpreted to mean
the court having jurisdiction in the Alternative Implementation Process,
being the Ontario Court or the Bankruptcy Court, as applicable;
(vi) all references to the “Final Order” contained herein shall be interpreted to
mean the order of the Court having jurisdiction in the Alternative
Implementation Process approving the plan of compromise and
arrangement or the plan of reorganization, as applicable, in the Alternative
Implementation Process; and
(vii) except as modified by this Section 7, the obligations of the Parties under
this Support Agreement shall apply mutatis mutandis in the context of the
Alternative Implementation Process.
(c) Any and all votes with respect to the Recapitalization Transaction shall be binding
to the extent the Company implements the Recapitalization Transaction through
the CBCA Proceedings or the Chapter 11 Process in accordance with this Support
Agreement. Any and all such votes shall not be binding to the extent the
Company implements the Recapitalization Transaction pursuant to the CCAA
unless the Majority Initial Consenting Debtholders and the Majority Consenting
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Private Placement Parties have each granted prior written consent in their sole and
absolute discretion to the commencement of the CCAA Proceedings in
accordance with this Section 7. To the extent the Support Agreement terminates
in accordance with its terms, then any and all such votes shall not be binding in
any restructuring and shall be deemed withdrawn.
8. Conditions to the Consenting Debtholders’ Support Obligations
Notwithstanding anything to the contrary contained in this Support Agreement and
without limiting any other rights of the Consenting Debtholders hereunder, each
Consenting Debtholder’s obligation to vote in favour of the CBCA Plan pursuant to
Section 4(d)(i) hereof, shall be subject to the satisfaction of the following conditions,
each of which may be waived, in whole or in part, by the Majority Initial Consenting
Debtholders (provided that such conditions shall not be enforceable by a Consenting
Debtholder, if any failure to satisfy such conditions results primarily from an action, error
or omission by or within the control of such Consenting Debtholder, seeking
enforcement):
(a) each Concordia Party shall have executed this Support Agreement and delivered
its signature page hereto to the Consenting Debtholders in accordance with
Section 17(s);
(b) the CBCA Plan and all Definitive Documents shall be in form and substance
acceptable to the Majority Initial Consenting Debtholders; provided that: (A) the
Subscription Agreement shall be in form and substance acceptable to the
Company and the Majority Consenting Private Placement Parties, each acting
reasonably, (B) the Governance Agreement shall be in form and substance
acceptable to the Majority Consenting Private Placement Parties, and (C) the New
Senior Secured Debt shall be in form and substance acceptable to the Majority
Initial Consenting Secured Debtholders and the Majority Consenting Private
Placement Parties;
(c) all orders made and judgments rendered by any competent court of law and all
rulings and decrees of any competent regulatory body, agent or official in respect
of the CBCA Proceedings and the Recapitalization Transaction shall be
satisfactory to Majority Initial Consenting Debtholders;
(d) the Interim Order, the CBCA Plan, the proposed Final Order in respect of the
CBCA Plan, and all other materials filed by or on behalf of the Company in the
CBCA Proceedings shall have been filed (and, if applicable, issued) in form and
substance acceptable to the Majority Initial Consenting Debtholders;
(e) each Concordia Party shall have complied in all material respects with each
covenant and obligation in this Support Agreement that is to be performed on or
before the date that is three (3) Business Days prior to the Voting Deadline
(subject to any agreed upon extension of the Milestones set out herein);
20
(f) there shall not exist or have occurred any Material Adverse Change from and after
the date of this Support Agreement (or before the date of this Support Agreement
if not disclosed in the Disclosure Letter);
(g) the board of directors of each Subsidiary Guarantor shall have approved any
guarantees required by the Recapitalization Transaction Terms in respect of the
New Senior Secured Term Loan and the New Senior Secured Notes in form and
substance acceptable to the Majority Initial Consenting Debtholders, the
Company, and the relevant entity approving such guarantee, as applicable, each
acting reasonably;
(h) the representations and warranties of each Concordia Party set forth in this
Support Agreement shall continue to be true and correct in all material respects
(except for those representations and warranties which expressly include a
materiality standard, which shall be true and correct in all respects giving effect to
such materiality standard) at and as of the date hereof and at and as of the
Effective Date (except to the extent such representations and warranties are by
their terms given as of a specified date, in which case such representations and
warranties shall be true and correct in all material respects as of such date), except
as such representations and warranties may be affected by the occurrence of
events or transactions contemplated and permitted by this Support Agreement;
(i) there shall not be in effect any preliminary or final decision, order or decree by a
Governmental Entity, no application (other than a frivolous or vexatious
application by a Person other than a Governmental Entity) shall have been made
to any Governmental Entity, and no action or investigation shall have been
announced, threatened or commenced by any Governmental Entity, in
consequence of or in connection with the Recapitalization Transaction that
restrains, impedes or prohibits (or if granted could reasonably be expected to
restrain, impede or inhibit) the Recapitalization Transaction or any material part
thereof or requires or purports to require a material variation of the
Recapitalization Transaction;
(j) the Company shall have made all scheduled payments of interest (at non-default
rates unless otherwise contemplated by the Term Sheet) and amortization, as
applicable, under the Secured Debt Documents, for certainty, without giving
effect to any acceleration under the Secured Debt;
(k) all actions taken by the Concordia Parties in furtherance of the Recapitalization
Transaction and the CBCA Plan shall be consistent in all material respects with
this Support Agreement; and
(l) each Concordia Party shall have provided the Advisors with a certificate signed
by an officer of such Concordia Party certifying compliance with the terms of this
Section 8 as of the Voting Deadline.
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9. Conditions to the Recapitalization Transaction
(a) The Recapitalization Transaction shall be subject to the satisfaction of the
following conditions prior to or at the Effective Time, each of which is for the
mutual benefit of the Concordia Parties, on the one hand, and the Consenting
Debtholders, on the other hand, and may be waived in whole or in part jointly by
the Company on behalf of the Concordia Parties and the Majority Initial
Consenting Debtholders (provided that such conditions shall not be enforceable
by any Concordia Party or a Consenting Debtholder, as the case may be, if any
failure to satisfy such conditions results primarily from an action, error or
omission by or within the control of the Party seeking enforcement):
(i) the CBCA Plan shall have been approved by (A) the Court; and (B) the
requisite majority of affected creditors and, if applicable, shareholders, as
and to the extent required by the Court and the CBCA;
(ii) the Final Order (A) shall have been entered by the Court and (B) shall
have become a final order, the implementation, operation or effect of
which shall not have been stayed, varied in a manner not acceptable to the
Company or the Majority Initial Consenting Debtholders, vacated or
subject to pending appeal and as to which order any appeal periods
relating thereto shall have expired;
(iii) the CBCA Plan and all Definitive Documents shall be in form and
substance acceptable to the Company and the Majority Initial Consenting
Debtholders; provided that: (A) the Subscription Agreement shall be in
form and substance acceptable to the Company and the Majority
Consenting Private Placement Parties, each acting reasonably, (B) the
Governance Agreement shall be in form and substance acceptable to the
Company, acting reasonably, and the Majority Consenting Private
Placement Parties, and (C) the New Senior Secured Debt shall be in form
and substance acceptable to the Company, acting reasonably, the Majority
Initial Consenting Secured Debtholders and the Majority Consenting
Private Placement Parties;
(iv) all disclosure documents (including the Information Circular), solicitation
forms with respect to the CBCA Proceedings and the Chapter 11 Process
and press releases in respect of the Recapitalization Transaction shall be in
form and substance acceptable to the Company and the Majority Initial
Consenting Debtholders, each acting reasonably; provided that, nothing
herein shall prevent a Party from making public disclosure in respect of
the Recapitalization Transaction to the extent required by applicable Law;
(v) all required stakeholder, regulatory, Court approvals, consents, waivers
and filings required to be made by the Concordia Parties shall have been
obtained or made, as applicable, on terms satisfactory to the Company and
the Majority Initial Consenting Debtholders, and copies of any and all
22
such approvals, consents and/or waivers shall have been provided to the
Advisors;
(vi) all filings that are required under applicable Laws in connection with the
Recapitalization Transaction required to be made by the Concordia Parties
shall have been made and any material regulatory consents or approvals
that are required in connection with the Recapitalization Transaction shall
have been obtained and, in the case of waiting or suspensory periods, such
waiting or suspensory periods shall have expired or been terminated;
(vii) there shall not be in effect any preliminary or final decision, order or
decree by a Governmental Entity, no application shall have been made to
any Governmental Entity, and no action or investigation shall have been
announced, threatened or commenced by any Governmental Entity, in
consequence of or in connection with the Recapitalization Transaction or
the CBCA Plan that restrains, impedes or prohibits (or if granted would
reasonably be expected to restrain, impede or prohibit), the
Recapitalization Transaction or the CBCA Plan or any material part
thereof or requires or purports to require a material variation of the
Recapitalization Transaction Terms;
(viii) the terms of the Management Incentive Plan shall be on the terms set out
in the Term Sheet and as otherwise acceptable to Concordia and the
Majority Initial Consenting Debtholders;
(ix) the Director appointed pursuant to section 260 of the CBCA shall have
issued a certificate of arrangement giving effect to the articles of
arrangement in respect of the CBCA Plan; and
(x) the Effective Date shall have occurred no later than the Outside Date.
(b) The obligation of the Concordia Parties to complete the Recapitalization
Transaction and the other transactions contemplated hereby are subject to Section
11 hereof and to the satisfaction of the following conditions prior to or at the
Effective Time, each of which is for the benefit of the Concordia Parties and may
be waived, in whole or in part, by the Company on behalf of the Concordia
Parties (provided that such conditions shall not be enforceable by the Concordia
Parties if any failure to satisfy such conditions results primarily from an action,
error or omission by or within the control of any Concordia Party):
(i) the Consenting Debtholders shall have complied in all material respects
with each covenant and obligation in this Support Agreement that is to be
performed by them on or before the Effective Date;
(ii) the representations and warranties of the Consenting Debtholders set forth
in this Support Agreement shall be true and correct in all material
respects(except for those representations and warranties which expressly
include a materiality standard, which shall be true and correct in all
23
respects giving effect to such materiality standard) at and as of the date
hereof and at and as of the Effective Date with the same force and effect
as if made at and as of such date, except (A) that representations and
warranties that are given as of a specified date shall be true and correct in
all material respects as of such date and (B) as such representations and
warranties may be affected by the occurrence of events or transactions
contemplated and permitted by this Support Agreement; and
(iii) each of the conditions set forth Sections 7(a) and 7(c) of the Subscription
Agreement shall have been satisfied or waived (other than those
conditions which by their terms are to be satisfied or can be validly
waived at the Effective Time).
(c) The obligations of the Consenting Debtholders to complete the Recapitalization
Transaction and the other transactions contemplated hereby and the
consummation of the Recapitalization Transaction are subject to the satisfaction
of the following conditions prior to or at the Effective Time, each of which is for
the benefit of the Consenting Debtholders and may be waived, in whole or in part,
by the Majority Initial Consenting Debtholders (provided that such conditions
shall not be enforceable by the Consenting Debtholders if any failure to satisfy
such conditions results solely from an action, error or omission by or within the
control of the Consenting Debtholder seeking enforcement):
(i) the Company shall have (A) achieved the Milestones on or before the
applicable dates set forth herein, and (B) complied in all material respects
with each covenant and obligation in this Support Agreement and the
Subscription Agreement that is to be performed by them on or before the
Effective Date;
(ii) the representations and warranties of the Concordia Parties set forth in this
Support Agreement shall be true and correct in all material respects as of
the Effective Date with the same force and effect as if made at and as of
such date, except (A) that representations and warranties that are given as
of a specified date shall be true and correct in all material respects as of
such date and (B) as such representations and warranties may be affected
by the occurrence of events or transactions contemplated and permitted by
this Support Agreement;
(iii) the Final Order, the CBCA Plan, the other Definitive Documents and all
orders made and judgments rendered by any competent court of law, and
all rulings and decrees of any competent regulatory body, agent or official
in relation to the CBCA shall be in form and substance satisfactory to the
Majority Initial Consenting Debtholders; provided that: (A) the
Subscription Agreement shall be in form and substance acceptable to the
Company and the Majority Consenting Private Placement Parties, each
acting reasonably, (B) the Governance Agreement shall be in form and
substance acceptable to the Company, acting reasonably, and the Majority
24
Consenting Private Placement Parties, and (C) the New Senior Secured
Debt shall be in form and substance acceptable to the Company, acting
reasonably, the Majority Initial Consenting Secured Debtholders and the
Majority Consenting Private Placement Parties;
(iv) all actions taken by the Concordia Parties in furtherance of the
Recapitalization Transaction and the CBCA Plan shall be consistent in all
material respects with the CBCA Plan and this Support Agreement;
(v) there shall not exist or have occurred any Material Adverse Change from
and after the date of this Support Agreement (or before the date of this
Support Agreement if not disclosed in the Disclosure Letter);
(vi) the composition and size of the Concordia Board as of the Effective Date
shall be satisfactory to the Majority Consenting Private Placement Parties;
(vii) the Company shall have made all scheduled payments of interest (at non-
default rates unless otherwise contemplated by the Term Sheet) and
amortization, as applicable, under the Secured Debt Documents, for
certainty, without giving effect to any acceleration under the Secured
Debt;
(viii) the board of directors of each Subsidiary Guarantor shall have approved
any guarantees required by the Recapitalization Transaction Terms in
respect of the New Senior Secured Term Loan and New Senior Secured
Notes in form and substance acceptable to the Majority Initial Consenting
Debtholders, the Company, and the relevant entity approving such
guarantee, as applicable, each acting reasonably;
(ix) there shall have been no appointment of any new Key Personnel, unless
such appointment, including its terms, is on terms satisfactory to the
Majority Initial Consenting Debtholders, acting reasonably;
(x) the reasonable and documented outstanding fees and expenses of the
Advisors shall have been paid in full in cash in accordance with their
agreements with the Company, provided that the Advisors shall have
provided the Company with invoices for all such fees and expenses at least
three (3) Business Days prior to the Effective Date;
(xi) following the implementation of the CBCA Plan, Concordia shall (A) be a
company incorporated under the CBCA or such other corporate statute as
may be agreed by the Company, acting reasonably, and the Majority
Consenting Private Placement Parties and (B) remain a public company
and (i) any common shares issued as part of the Recapitalization
Transaction (“New Common Shares”) shall be freely tradable under
applicable Canadian Securities Laws (provided that the trade is not a
“control distribution” as defined in Canadian Securities Laws, no unusual
effort is made to prepare the market or to create a demand for the security
25
that is the subject of the trade, no extraordinary commission or
consideration is paid to a person or company in respect of the trade, and if
the selling security holder is an insider or officer of the issuer, the selling
security holder has no reasonable grounds to believe that the issuer is in
default of Canadian Securities Laws), (ii) the New Common Shares (other
than the Private Placement Shares) shall be freely transferable under
applicable U.S. Securities Laws (other than by “affiliates” as defined in
Rule 144 under the U.S. Securities Act (or persons that have been
“affiliates” (as so defined) within 90 days of the Effective Date)), and (iii)
all common shares of Concordia (including, for greater certainty, the New
Common Shares) shall be conditionally approved for trading on the TSX
or on another Designated Offshore Securities Market acceptable to the
Majority Consenting Private Placement Parties, subject only to receipt of
customary final documentation;
(xii) the Subscription Agreement shall be in full force and effect and shall not
have been terminated with respect to all parties thereto in accordance with
its terms;
(xiii) all securities of the Company and any affiliated or related entities that are
to be formed in connection with the Recapitalization Transaction, when
issued and delivered, shall be duly authorized, validly issued and fully
paid and non-assessable;
(xiv) the Company shall have executed and delivered the Governance
Agreement in form and substance acceptable to the Company, acting
reasonably, and the Majority Consenting Private Placement Parties and all
governance matters involving Concordia shall be satisfactory to the
Majority Consenting Private Placement Parties;
(xv) the Company shall not have less than $200 million in cash on hand
immediately following the Effective Time, provided that (A) the Company
shall be entitled to add back all professional fees incurred in connection
with the Recapitalization Transaction for the purposes of determining its
cash on hand in accordance with this Section 9(c)(xv), (B) to the extent
that the economic terms of the Recapitalization Transaction are amended
or varied, the $200 million threshold shall be adjusted on a corresponding
basis, and (C) the $200 million threshold shall be adjusted to account for
any demonstrable adverse business effects on the Concordia Entities that
may arise or result from the commencement of an Alternative
Implementation Process; provided that, the Company shall for purposes of
this section have not less than $175 million in cash on hand immediately
following the applicable effective date following any adjustments on
account of subclause (C) above;
(xvi) each of the conditions set forth Sections 7(a) and 7(b) of the Subscription
Agreement shall have been satisfied or waived (other than those
26
conditions which by their terms are to be satisfied or can be validly
waived at the Effective Time);
(xvii) to the extent that recognition proceedings have been commenced pursuant
to Section 5(w), the Concordia Parties shall have obtained, where
available, the applicable recognition or equivalent orders sought in any
such proceedings; and
(xviii) each Concordia Party shall have provided the Advisors with a certificate
signed by an officer of such Concordia Party certifying compliance with
the terms of this Section 9 as of the Effective Date.
10. Releases
The Parties agree that there shall be usual and customary releases in connection with the
implementation of the Recapitalization Transaction under the CBCA Proceedings to be
effective as of the Effective Date (the “Releases”) pursuant to the CBCA Plan and the
Final Order. The Releases shall provide, inter alia, that Concordia and all of its direct and
indirect subsidiaries, the Consenting Debtholders, the Trustees and Agents, and each of
the foregoing Persons’ respective current and former directors, officers, managers,
partners, employees, auditors, financial advisors, legal counsel and agents (collectively,
the “Released Parties”) shall be released and discharged from all present and future
actions, causes of action, damages, judgments, executions, obligations and claims of any
kind or nature whatsoever (other than liabilities or claims attributable to any of Released
Party’s gross negligence, fraud or willful misconduct as determined by the final, non-
appealable judgment of a court of competent jurisdiction) arising on or prior to the
Effective Date in connection with the Existing Equity, the Secured Debt, the Secured
Debt Documents, the Unsecured Debt, the Unsecured Debt Documents, the Two Year
Equity Bridge Credit and Guaranty Agreement, the Unsecured Debt Settlement, the
Recapitalization Transaction, the CBCA Plan, the CBCA Proceedings, this Support
Agreement, the Subscription Agreement and any of the transactions contemplated herein,
and any other actions or matters related directly or indirectly to the foregoing, provided
that the Released Parties shall not be released from or in respect of any of their respective
obligations under this Support Agreement, the Subscription Agreement, the CBCA Plan,
or any document ancillary to the foregoing.
11. Superior Transaction
(a) Except as otherwise expressly provided in this Section 11 or with the prior written
consent of the Majority Initial Consenting Debtholders, the Concordia Parties
shall not, and shall not cause or allow any other subsidiaries or affiliates, agents or
representatives to, directly or indirectly, commence, consummate an agreement to
commence, make, seek, solicit, assist, initiate, encourage, facilitate, propose, file,
support, or initiate any discussions or negotiations regarding any alternative offer,
restructuring, sale of assets, merger, workout, plan of arrangement or plan of
reorganization other than the CBCA Plan.
27
(b) Notwithstanding Section 11(a) or any other provision of this Support Agreement,
to the extent the Company receives a bona fide unsolicited written proposal, it is
permitted to negotiate and enter into a transaction (a “Superior Transaction”) in
respect of any such proposal, if following receipt of legal and financial advice and
after consulting with the Advisors, and having regard to the extent of Secured
Debtholder and Unsecured Debtholder support that may exist for any such
Superior Transaction and the requisite Secured Debtholder and Unsecured
Debtholder approvals that would be required to implement such Superior
Transaction, the Concordia Board determines that such proposal (a) would
reasonably be expected to result in a transaction more favourable to the Company
and its debtholders than the Recapitalization Transaction, (b) such Superior
Transaction will provide that the Secured Debtholders shall, in respect of their
Secured Debt, be repaid the principal amount of the Secured Debt in full in cash
plus any accrued interest (at the default rate from the date of the Preliminary
Interim Order), and any fees and expenses payable to them as part of the
Recapitalization Transaction, and (c) such Superior Transaction will provide that
the Unsecured Debtholders shall, in respect of their Unsecured Debt, receive
consideration greater in value to that payable to them under the CBCA Plan and
any fees and expenses payable to them as part of the Recapitalization Transaction.
The Company shall, as soon as practicable, and in any event, within 48 hours,
notify the Advisors (orally at first and then in writing) if it receives or otherwise
becomes aware of any inquiry, proposal or offer that constitutes or may
reasonably be expected to constitute or lead to a Superior Transaction, of such
alternative inquiry, proposal or offer, including the identity of the Person making
such inquiry, proposal or offer and the material terms and conditions thereof and
copies of all material or substantive documents received in respect of, from or on
behalf of any such Person. The Company shall keep the Advisors promptly and
fully informed of the status of developments and discussions and negotiations
with respect to such inquiry or offer, including any material changes,
modifications or other amendments thereto.
(c) If at any time following the execution of this Support Agreement and prior to the
Final Order having been obtained, the Company receives a request for material
non-public information, or to enter into discussions, from a Person that proposes
to the Company an unsolicited bona fide written proposal that did not result from
a breach of this Agreement (and which has not been withdrawn) and the Company
determines, in good faith after consultation with its outside financial and legal
advisors, that such proposal constitutes or could reasonably be expected to
constitute or lead to a Superior Transaction (disregarding, for the purposes of such
determination, any due diligence access condition to which such proposal is
subject), then, and only in such case, the Company may:
(i) provide the Person making such proposal with, or access to, information
regarding the Company and its subsidiaries, but only to the extent that the
Advisors had previously been, or are concurrently, provided with, or
access to, the same information; and/or
28
(ii) enter into, participate in, facilitate and maintain discussion or negotiations
with, and otherwise cooperate with or assist, the Person making such
proposal with respect to such proposal,
if, and only if:
(iii) the Company has entered into a confidentiality agreement on market terms
that will preserve the confidentiality of information provided by the
Company if the alternative proposal does not proceed; and
(iv) the Company has been, and continues to be, in compliance in all material
respects with this Section 11.
(d) Prior to termination of this Support Agreement, including pursuant to Section 12,
the Company shall not enter into any agreement with respect to a Superior
Transaction other than the confidentiality agreement set out above.
12. Termination
(a) This Support Agreement (and, for certainty, any Joinder Agreement) may be
terminated by the Majority Initial Consenting Secured Debtholders (provided that,
the Secured Debt held by any Breaching Debtholders shall be excluded when
determining whether the Majority Initial Consenting Secured Debtholders are
entitled to terminate this Support Agreement pursuant to this Section 12(a)), in
their sole discretion, by providing written notice to the Company in accordance
with Section 17(s) hereof:
(i) if the Company fails to meet any of the Milestones on or before the
applicable dates set forth herein;
(ii) if any Concordia Party publicly recommends, enters into a written
agreement to pursue, or directly or indirectly proposes, supports, assists,
solicits or files a motion or pleading seeking approval of, a Superior
Transaction or breaches the terms of Section 11 herein;
(iii) if any Concordia Party takes any action materially inconsistent with this
Support Agreement or fails to comply with, or defaults in the performance
or observance of, in all material respects, any term, condition, covenant or
agreement set forth in this Support Agreement that, if capable of being
cured, is not cured within three (3) Business Days after receipt of written
notice of such failure or default;
(iv) if any representation, warranty or acknowledgement of any Concordia
Party made in this Support Agreement shall prove untrue in any material
respect as of the date when made that, if capable of being cured, is not
cured within three (3) Business Days after receipt of written notice of such
failure or default;
29
(v) upon the issuance of any preliminary or final decision, order or decree by
a Governmental Entity, the making of an application to any Governmental
Entity, or the commencement of an action or investigation by any
Governmental Entity, in consequence of or in connection with the
Recapitalization Transaction or the CBCA Plan, which restrains, prohibits
or materially impedes the Recapitalization Transaction or the CBCA Plan;
(vi) if the CBCA Proceedings (other than to comply with Section 7 hereof) or
the Alternative Implementation Process, as applicable, are dismissed or a
receiver, interim receiver, receiver and manager, trustee in bankruptcy,
liquidator or administrator is appointed with respect to any Concordia
Party, unless such appointment is made with the prior written consent of
the Majority Initial Consenting Debtholders;
(vii) the amendment or modification of, the filing of a motion or pleading by
any Concordia Party seeking to amend or modify, the Recapitalization
Transaction Terms or the CBCA Plan or any material document or order
relating thereto, unless such amendment, modification, or filing is
acceptable to the Majority Initial Consenting Debtholders;
(viii) if any Concordia Party files a motion or pleading seeking an order
disallowing, subordinating, avoiding or recharacterizing claims or interests
held by any Consenting Debtholder in respect of the Secured Debt;
(ix) (i) any of the conditions set forth in Section 8 are not satisfied or waived
by the Voting Deadline or (ii) any of the conditions set forth in Section 9
are not satisfied or waived by the Outside Date;
(x) if any court of competent jurisdiction has entered a final non-appealable
judgment or order declaring this Support Agreement or any material
portion thereof to be unenforceable; or
(xi) if the Recapitalization Transaction has not been completed and/or the
CBCA Plan has not been implemented by the Outside Date,
in each case unless the event giving rise to the termination right is waived or
cured in accordance with the terms hereof.
(b) This Support Agreement (and, for certainty, any Joinder Agreement) may be
terminated by the Majority Initial Consenting Unsecured Debtholders (provided
that, the Unsecured Debt held by any Breaching Debtholders shall be excluded
when determining whether the Majority Initial Consenting Unsecured
Debtholders are entitled to terminate this Support Agreement pursuant to this
Section 12(b)), in their sole discretion, by providing written notice to the
Company in accordance with Section 17(s) hereof:
(i) if the Company fails to meet any of the Milestones on or before the
applicable dates set forth herein;
30
(ii) if any Concordia Party publicly recommends, enters into a written
agreement to pursue, or directly or indirectly proposes, supports, assists,
solicits or files a motion or pleading seeking approval of, a Superior
Transaction or breaches the terms of Section 11 herein;
(iii) if any Concordia Party takes any action materially inconsistent with this
Support Agreement or fails to comply with, or defaults in the performance
or observance of, in all material respects, any term, condition, covenant or
agreement set forth in this Support Agreement that, if capable of being
cured, is not cured within three (3) Business Days after receipt of written
notice of such failure or default;
(iv) if any representation, warranty or acknowledgement of any Concordia
Party made in this Support Agreement shall prove untrue in any material
respect as of the date when made that, if capable of being cured, is not
cured within three (3) Business Days after receipt of written notice of such
failure or default;
(v) upon the issuance of any preliminary or final decision, order or decree by
a Governmental Entity, the making of an application to any Governmental
Entity, or the commencement of an action or investigation by any
Governmental Entity, in consequence of or in connection with the
Recapitalization Transaction or the CBCA Plan, which restrains, prohibits
or materially impedes the Recapitalization Transaction or the CBCA Plan;
(vi) if the CBCA Proceedings (other than to comply with Section 7 hereof) or
the Alternative Implementation Process, as applicable, are dismissed or a
receiver, interim receiver, receiver and manager, trustee in bankruptcy,
liquidator or administrator is appointed with respect to any Concordia
Party, unless such appointment is made with the prior written consent of
the Majority Initial Consenting Debtholders;
(vii) the amendment or modification of, the filing of a motion or pleading by
any Concordia Party seeking to amend or modify, the Recapitalization
Transaction Terms or the CBCA Plan or any material document or order
relating thereto, unless such amendment, modification, or filing is
acceptable to the Majority Initial Consenting Debtholders;
(viii) if any Concordia Party files a motion or pleading seeking an order
disallowing, subordinating, avoiding or recharacterizing claims or interests
held by any Consenting Debtholder in respect of the Unsecured Debt;
(ix) (i) any of the conditions set forth in Section 8 are not satisfied or waived
by the Voting Deadline or (ii) any of the conditions set forth in Section 9
are not satisfied or waived by the Outside Date;
31
(x) if any court of competent jurisdiction has entered a final non-appealable
judgment or order declaring this Support Agreement or any material
portion thereof to be unenforceable; or
(xi) if the Recapitalization Transaction has not been completed and/or the
CBCA Plan has not been implemented by the Outside Date,
in each case unless the event giving rise to the termination right is waived or
cured in accordance with the terms hereof.
(c) This Support Agreement may be terminated by the Company on behalf of the
Concordia Parties, by providing written notice to the Consenting Debtholders in
accordance with Section 17(s) hereof, provided that the Company is not in default
hereunder, upon the occurrence and continuation of any of the following events:
(i) if at any time the Consenting Debtholders that are party to this Support
Agreement hold in the aggregate less than 662/3% of the principal amount
of outstanding Secured Debt;
(ii) if at any time the Consenting Debtholders that are party to this Support
Agreement hold in the aggregate less than 50% of the principal amount of
outstanding Unsecured Debt;
(iii) if Concordia enters into an agreement supporting a Superior Transaction
as permitted under Section 11 hereof;
(iv) upon the issuance of any final decision, order or decree by a
Governmental Entity, in consequence of or in connection with the
Recapitalization Transaction or the CBCA Plan, which restrains, impedes
or prohibits the Recapitalization Transaction or the CBCA Plan; or
(v) if the Recapitalization Transaction has not been completed and/or the
CBCA Plan has not been implemented by the Outside Date.
(d) This Support Agreement may be terminated by the Company on behalf of the
Concordia Parties as to a breaching Consenting Debtholder (the “Breaching
Debtholder”) only, by providing written notice to such Breaching Debtholder in
accordance with Section 17(s) hereof, in exercise of its sole discretion and
provided that the Concordia Parties are not in default hereunder, upon the
occurrence and continuation of any of the following events:
(i) if such Breaching Debtholder has taken any action inconsistent with this
Support Agreement or failed to comply with, or defaulted in the
performance or observance of, in all material respects, any term,
condition, covenant or agreement set for in this Support Agreement that, if
capable of being cured, is not cured within five (5) Business Days after
receipt of written notice of such failure or default; or
32
(ii) any representation, warranty or acknowledgement of such Breaching
Debtholder made in this Support Agreement shall prove untrue in any
material respect as of the date when made,
and the Breaching Debtholder shall thereupon no longer be a Consenting
Debtholder.
(e) In the event of any waiver, change, modification, or amendment to this Support
Agreement that disparately and adversely affects the recoveries or treatment of
such Consenting Debtholder compared to the recoveries or treatment set forth in
the Term Sheet (other than in proportion to the amount of Relevant Debt or
Relevant Shares held by such Consenting Debtholder), then any Consenting
Debtholder that objects to such waiver, change, modification or amendment may,
within five (5) Business Days of receiving notice of such waiver, change,
modification or amendment, terminate such Consenting Debtholder’s obligations
under this Support Agreement upon five (5) Business Days’ notice to the other
Parties hereto and shall thereupon no longer be a Consenting Debtholder.
(f) This Support Agreement may be terminated at any time by mutual written consent
of the Company and the Majority Initial Consenting Debtholders.
(g) This Support Agreement shall terminate automatically:
(i) on the Effective Date upon implementation of the CBCA Plan;
(ii) upon the commencement of a CCAA Proceeding without having obtained
the prior written consent of each of the Majority Initial Consenting
Debtholders and the Majority Consenting Private Placement Parties;
(iii) on the date the Subscription Agreement ceases to be in full force and
effect or has been terminated with respect to all parties thereto in
accordance with its terms;
(iv) on August 31, 2018, to the extent the CBCA Conditions have not been
satisfied and the Company has not commenced the CCAA Proceedings or
the Chapter 11 Process, in each case, in accordance with Section 7 herein;
or
(v) to the extent applicable, upon the failure to satisfy any Milestone set forth
in Schedule F and Schedule G except to the extent any such Milestone has
been waived or extended by the Majority Initial Consenting Debtholders
and/or the Majority Consenting Private Placement Parties, as applicable.
(h) The Concordia Parties hereby consent to the termination of this Support
Agreement if terminated in accordance with Sections 12(a), 12(b) or 12(g) (except
for 12(g)(i)) herein and hereby waive any application of the stay of proceedings
granted in the CBCA Proceedings (or, for greater certainty, any stay of
proceedings granted in the CCAA Proceedings or the automatic stay of
33
proceedings in effect upon the filing of any Chapter 11 Process) on any such
termination.
13. Effect of Termination
(a) Subject to paragraph 13(c) below, this Support Agreement, upon its termination,
shall be of no further force and effect, and each Party hereto shall be
automatically and simultaneously released from its commitments, undertakings,
covenants, and agreements under or related to this Support Agreement, and each
Party shall have the rights and remedies that it would have had it not entered into
this Support Agreement and shall be entitled to take all actions, whether with
respect to the Recapitalization Transaction or otherwise, that it would have been
entitled to take had it not entered into this Support Agreement. Upon the
termination of this Support Agreement, any and all votes submitted in respect of
the CBCA Plan will be deemed to be withdrawn and shall have no effect in any
other restructuring proceeding involving the Concordia Parties.
(b) Each Party shall be responsible and shall remain liable for any breach of this
Support Agreement by such Party occurring prior to the termination of this
Support Agreement.
(c) Notwithstanding the termination of this Support Agreement pursuant to Section
12, the agreements and obligations of the Parties in Sections 5(i), 5(y) (solely with
respect to any fees and expenses incurred on or prior to the date of such
termination), 5(z), 14 and 17 hereof shall survive such termination and shall
continue in full force and effect for the benefit of the Parties in accordance with
the terms hereof. Upon the occurrence of any termination of this Support
Agreement, any and all votes, consents and proxies tendered by any Consenting
Debtholder prior to such termination shall be deemed, for all purposes, to be
withdrawn, and null and void from the first instance and shall not be considered
or otherwise used in any manner by the Parties in connection with the
Recapitalization Transaction, this Support Agreement, an Alternative
Implementation Process, or otherwise.
14. Confidentiality
Notwithstanding anything to the contrary in this Support Agreement, no information with
respect to the principal amount of Relevant Secured Debt or Relevant Unsecured Debt or
the number of Relevant Shares held or managed by any individual Consenting
Debtholder or the identity of any individual Consenting Debtholder shall be disclosed by
the Company or any of its direct or indirect subsidiaries or affiliates, without the prior
written consent of each such Consenting Debtholder, provided, however, that such
information may be disclosed: (A) to the directors, executives, senior management,
auditors, employees, financial advisors and legal advisors (collectively, its
“Representatives”) of the Company and its affiliates, provided that each such
Representative (i) needs to know such information for purposes of the Recapitalization
Transaction, (ii) is informed of this confidentiality provision and the confidential nature
34
of such information, and (iii) agrees to act in accordance with the terms of this
confidentiality provision; and (B) in response to, and to the extent required (as
determined by the Company following advice of the Company’s legal counsel) by
applicable Law, by any stock exchange rules on which its securities or those of any of its
affiliates are traded, by any Governmental Entity or by any subpoena or other legal
process, including, without limitation, by any court of competent jurisdiction or
applicable rules, regulations or procedures of a court of competent jurisdiction; provided
that, if it or any of its Representatives is required to disclose the identity or specific
holdings of the Consenting Debtholder in the manner set out in the preceding sentence,
the Company shall provide the applicable Consenting Debtholder with prompt written
notice of any such requirement (including a written copy of the proposed disclosure), to
the extent legally permissible, and the Company shall reasonably cooperate with such
Consenting Debtholder (at such Consenting Debtholder’s sole expense) in seeking a
protective order or other appropriate remedy or waiver of compliance with such
requirement; provided further that: (x) the principal amount of Relevant Secured Debt,
Relevant Unsecured Debt and the number of Relevant Shares held collectively by all
Consenting Debtholders in the aggregate from time to time may be set out in any public
disclosure, including, without limitation, press releases and court materials, produced by
the Company, all in form and substance satisfactory to the Company and the Majority
Initial Consenting Debtholders, each acting reasonably, (y) the Company may disclose
the identity of a Consenting Debtholder in any action to enforce the Term Sheet and/or
this Support Agreement against such Consenting Debtholder (and only to the extent
necessary to enforce the Term Sheet and/or this Support Agreement against such
Consenting Debtholder), and (z) the Company may disclose in any of its proxy circulars
the identity of, and number of Relevant Shares held by, a Consenting Debtholder that
holds 10% of more of the Existing Shares to the extent required by applicable securities
laws (as determined by the Company following advice of the Company’s legal counsel
and in consultation with the Advisors).
15. Further Assurances
(a) Subject to the terms and conditions of this Support Agreement, each Party shall
take all such actions as are commercially reasonable, deliver to the other Parties
such further information and documents and execute and deliver to the other
Parties such further instruments and agreements as another Party shall reasonably
request to consummate or confirm the transactions provided for in this Support
Agreement, to accomplish the purpose of this Support Agreement or to assure to
the other Party the benefits of this Support Agreement, including, the
consummation of the Recapitalization Transaction in all cases at the expense of
the Concordia Parties.
(b) Each Party hereby agrees to execute any authorization or direction reasonably
required by any trustee or agent under any Secured Debt Document or Unsecured
Debt Document in order for such trustee or agent to release the guarantees and
security granted by any Concordia Party under such Secured Debt Document or
Unsecured Debt Document; provided that, such authorization or direction is in
form and substance satisfactory to the Company and the Majority Initial
35
Consenting Debtholders, each acting reasonably; and provided further that, no
Consenting Debtholder shall be required to grant any indemnity in connection
with any such authorization or direction.
16. Public Announcements
All public announcements made in respect of the Recapitalization Transaction shall be
made solely by the Company, provided that such public announcements shall be in form
and substance acceptable to the Majority Initial Consenting Debtholders and the
Company, each acting reasonably. Notwithstanding the foregoing, nothing herein shall
prevent a party from making public disclosure in respect of the Recapitalization
Transaction to the extent required by applicable Law.
17. Miscellaneous
(a) Notwithstanding anything herein to the contrary, this Support Agreement applies
only to each Consenting Debtholder’s Relevant Debt and Relevant Shares
(including any Additional Debt and Additional Shares in accordance with Section
4(h) hereof) and to each Consenting Debtholder solely with respect to its legal
and/or beneficial ownership of, or its investment and voting discretion over, its
Relevant Debt and Relevant Shares (including any Additional Debt and
Additional Shares in accordance with Section 4(h) hereof), and not, for greater
certainty, to any securities, loans or obligations that may be held by any client of
such Consenting Debtholder whose funds or accounts are managed by such
Consenting Debtholder where those funds or accounts are not otherwise subject to
this Support Agreement (including, for greater certainty, where such funds or
accounts become subject pursuant to any Transfer permitted under Section
4(b)(i)) hereof and, without limiting the generality of the foregoing, shall not
apply to:
(i) any securities, loans or other obligations that may be held, acquired or sold
by, or any activities, services or businesses conducted or provided by, any
group or business unit within, or fund, account of, a Consenting
Debtholder or any affiliated entity of such Consenting Debtholder: (A)
that has not been involved in and is not acting at the direction of or with
knowledge of the Company’s affairs provided by any Person involved in
the Recapitalization Transaction discussions; (B) that is on the other side
of an information firewall with respect to the officers, partners and
employees of such Consenting Debtholder who have been working on the
Recapitalization Transaction and is not acting at the direction of or with
knowledge of the Company’s affairs provided by any officers, partners
and employees of such Consenting Debtholder who have been working on
the Recapitalization Transaction or (C) disclosed by such Consenting
Debtholder to the Company in writing on or prior to the date of this
Support Agreement;
36
(ii) any securities, loans or other obligations that may be beneficially owned
by clients of a Consenting Debtholder, including accounts or funds
managed by the Consenting Debtholder; or
(iii) any securities, loans or other obligations that may be beneficially owned
by clients of a Consenting Debtholder that are not managed or
administered by the Consenting Debtholder.
(b) Subject to Section 17(a) hereof, nothing in this Support Agreement is intended to
preclude a Consenting Debtholder from engaging in any securities transactions,
subject to (i) compliance with applicable securities Laws and (ii) the agreements
set forth herein with respect to the Consenting Debtholder’s Relevant Debt or
Relevant Shares.
(c) The headings in this Support Agreement are for reference only and shall not affect
the meaning or interpretation of this Support Agreement.
(d) Unless the context otherwise requires, words importing the singular shall include
the plural and vice versa and words importing any gender shall include all
genders.
(e) This Support Agreement (including the Term Sheet and the other schedules
attached to this Support Agreement) constitutes the entire agreement and
supersedes all prior agreements and understandings, both oral and written, among
the Parties with respect to the subject matter hereof; provided, however, that this
Support Agreement does not alter or supersede any confidentiality or non-
disclosure agreement between the Company and any of the Consenting
Debtholders and/or their Advisors. No prior history, pattern or practice of sharing
confidences among or between the Parties shall in any way affect or negate this
understanding and agreement.
(f) Unless as expressly otherwise set forth herein, this Support Agreement may be
modified, amended, waived or supplemented as to any matter in writing (which
may include e-mail) by the Company (on behalf of the Concordia Parties) and the
Majority Initial Consenting Debtholders; provided that (a) any modification,
amendment, waiver or change to the terms of this Section 17(f) shall require the
prior written consent of each Consenting Debtholder; (b) any modification,
amendment, waiver, or change to the definition of “Consenting Debtholder” shall
require the prior written consent of each Consenting Debtholder; (c) any
modification, amendment, waiver or change to the definition of “Majority Initial
Consenting Unsecured Debtholder” shall require the prior written consent of each
Initial Consenting Unsecured Debtholder; (d) any modification, amendment,
waiver or change to the definition of “Majority Initial Consenting Secured
Debtholder” shall require the prior written consent of each Initial Consenting
Secured Debtholder; (e) any modification, amendment, waiver or change to the
definition of “Majority Initial Consenting Debtholder” shall require the prior
written consent of each Initial Consenting Secured Debtholder and each Initial
37
Consenting Unsecured Debtholder; (f) any modification, amendment, waiver or
change to the definition of “Majority Consenting Private Placement Parties” shall
require the prior written consent of each Private Placement Party; and (g) any
modification, amendment, waiver or change to (i) the amount of the Obligations
in respect of the Swap Agreement, (ii) Section 5(z) or (iii) the treatment of the
Secured Debtholder Claims in respect of the Swap Agreement (if different than
the treatment afforded to other Secured Debtholder Claims) shall require the prior
written consent of the Secured Swap Lender.
(g) No failure or delay by any Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise.
(h) The Concordia Parties shall be entitled to rely on written confirmation (which
may include email) from the Advisors, on behalf of the Consenting Debtholders
that they represent, that the Majority Initial Consenting Debtholders have agreed,
waived, consented to or approved a particular matter pursuant to this Support
Agreement. The Consenting Debtholders shall be entitled to rely on written
confirmation from Goodmans LLP (which may include email) that the Company
has agreed, waived, consented to or approved a particular matter pursuant to this
Support Agreement.
(i) No Party shall have any responsibility by virtue of this Support Agreement for
any trading by any other entity. No prior history, pattern, or practice of sharing
confidences among or between the Parties shall in any way affect or negate this
Support Agreement.
(j) The Parties hereto acknowledge that this Support Agreement does not constitute
an agreement, arrangement, or understanding with respect to acting together for
the purpose of acquiring, holding, voting, or disposing of any equity securities of
Concordia and the Consenting Debtholders do not constitute a “group” within the
meaning of Rule 13d-5 under the U.S. Securities Exchange Act of 1934, as
amended. Nothing contained herein or in any agreement contemplated hereby
and no action taken by any Consenting Debtholder pursuant to this Support
Agreement shall be deemed to constitute or to create a presumption by any of the
Parties that the Consenting Debtholders are in any way acting in concert or as a
“group” (or a joint venture, partnership or association), and no Concordia Party
will assert any such claim with respect to such obligations or the transactions
contemplated by this Support Agreement, and each Concordia Party
acknowledges that none of the Consenting Debtholders are acting in concert or as
a group with respect to such obligations or the transactions contemplated by this
Support Agreement. Each Concordia Party acknowledges and each Consenting
Debtholder confirms that it has independently participated in the negotiation of
the transactions contemplated under this Support Agreement with the advice of
counsel and advisors. For the avoidance of doubt, the Concordia Parties make this
acknowledgement in connection with any actions taken by the Consenting
38
Debtholders in furtherance of the Recapitalization Transaction, including the
negotiation of the Definitive Documentation.
(k) In connection with any matter requiring approval, agreement, consent, waiver,
request or other action of the Majority Initial Consenting Debtholders, the
Majority Initial Consenting Secured Debtholders, or the Majority Initial
Consenting Unsecured Debtholders under this Support Agreement, there is no
requirement or obligation that such Parties agree among themselves with respect
thereto and there is no agreement among such Parties with respect thereto. In
connection with any such approval, agreement, consent, waiver, request or other
action of the Majority Initial Consenting Debtholders, the Majority Initial
Consenting Secured Debtholders, or the Majority Initial Consenting Unsecured
Debtholders, each Party may, through its Advisors, confirm such approval,
agreement, consent, waiver, request or other action. In connection with an
approval, agreement, consent or waiver of the Majority Initial Consenting
Debtholders, the Majority Initial Consenting Secured Debtholders, or the Majority
Initial Consenting Unsecured Debtholders hereunder, Concordia will solicit such
approval, agreement, consent or waiver independently from each Party or its
Advisors.
(l) It is understood and agreed that none of the Consenting Debtholders has any duty
of trust or confidence in any form with any other Party or any creditors or other
stakeholders of any Concordia Party and, except as expressly provided in this
Support Agreement, there are no agreements, commitments or undertakings by,
among or between any of them with respect to the subject matter hereof.
(m) Any date, time or period referred to in this Support Agreement shall be of the
essence except to the extent to which the Company (on behalf of the Concordia
Parties) and the Majority Initial Consenting Debtholders agree in writing to vary
any date, time or period, in which event the varied date, time or period shall be of
the essence.
(n) The agreements, representations and obligations of the Consenting Debtholders
under this Support Agreement are, in all respects, several and not joint and
several.
(o) This Support Agreement shall be governed by, construed and interpreted in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein (excluding any conflict of laws rule or principle which might
refer such construction to the laws of another jurisdiction) and all actions or
proceedings arising out of or relating to this Support Agreement shall be heard
and determined exclusively in the courts of the Province of Ontario (except in the
event that the Chapter 11 Process are commenced in accordance with Section 7, in
which case the Bankruptcy Court shall have non-exclusive jurisdiction to hear all
such actions or proceedings).
39
(p) It is understood and agreed by the Parties that money damages would not be a
sufficient remedy for any breach of this Support Agreement and each non-
breaching Party shall be entitled, in addition to any other remedy that may be
available under applicable law, to specific performance and injunctive or other
equitable relief as a remedy of any such breach, including an order by a court of
competent jurisdiction requiring any Party to comply promptly with any of such
obligations, without the necessity of proving the inadequacy of money damages as
a remedy. Each Party hereby waives any requirement for the security or posting
of any bond in connection with such remedies.
(q) Unless expressly stated otherwise herein, this Support Agreement is intended to
solely bind and inure to the benefit of the Parties and their respective successors,
permitted assigns, heirs, executors, administrators and representatives. No other
person or entity shall be a third party beneficiary hereof.
(r) Except as otherwise set forth in Section 4(b), no Party may assign, delegate or
otherwise transfer any of its rights, interests or obligations under this Support
Agreement without the prior written consent of the other Parties hereto.
(s) All notices, requests, consents and other communications hereunder to any Party
shall be deemed to be sufficient if contained in a written instrument delivered in
person or sent by facsimile, internationally-recognized overnight courier or email.
All notices required or permitted hereunder shall be deemed effectively given: (i)
upon personal delivery to the Party to be notified, (ii) when sent by facsimile or
email if sent during normal business hours of the recipient, if not, then on the next
Business Day of the recipient; or (iii) one (1) Business Day after deposit with an
internationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All deliveries required or permitted hereunder shall
be deemed effectively made: (A) upon personal delivery to the Party receiving the
delivery; (B) one (1) Business Day after deposit with an internationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt; or (C) upon receipt of delivery in accordance with
instructions given by the Party receiving the delivery. Any Party may change the
address to which notice should be given to such Party by providing written notice
to the other Parties hereto of such change. The address, facsimile and email for
each of the Parties shall be as follows:
(i) If to the Company or the Concordia Parties at:
Concordia International Corp.
c/o Goodmans LLP
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx X. Xxxxxxxx, Xxxxxxx X’Xxxxx and Xxxxxxxx
Xxxxxxxx
40
Facsimile: 416.979.1234
Email: xxxxxxxxx@xxxxxxxx.xx
xxxxxxx@xxxxxxxx.xx
xxxxxxxxx@xxxxxxxx.xx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Four Times Square
New York, 10036-6522
Attention: Xxxx X. Xxxxx, Xxxxx X. Xxxxxx and Xxxx X. Xxxxxxx
Facsimile: 212.735.2000
Email: xxxx.xxxxx@xxxxxxx.xxx
xxxxx.xxxxxx@xxxxxxx.xxx
xxxx.xxxxxxx@xxxxxxx.xxx
(ii) If to one or more of the Initial Consenting Secured Debtholders at:
The address set forth for each applicable Initial Consenting Secured
Debtholder on its signature page to this Support Agreement, with a
required copy (which shall not be deemed notice) to:
Osler, Xxxxxx & Harcourt LLP
000 Xxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx Xxxxxxxxx, Xxxxxxx Xx Xxxxxx and Xxxxxxx
Xxxxxxxxx
Facsimile: 416.862.6666
Email: xxxxxxxxxx@xxxxx.xxx
xxxxxxxxx@xxxxx.xxx
xxxxxxxxxx@xxxxx.xxx
with a copy to:
White & Case LLP
0 Xxx Xxxxx Xxxxxx
Xxxxxx, XX
XX0X 0XX
Attention: Xxxxxxxxx Xxxxxxxxxx and Xxx Xxxxxx
Facsimile: x00 00 0000 0000
Email: xxxxxxxxxxx@xxxxxxxxx.xxx
xxxxxxx@xxxxxxxxx.xxx
41
and
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX
00000
Attention: Xxxxxx X Xxxxxx and Xxxxxxxx Xxxxxx
Facsimile: 212.354.8113
Email: xxxxxxx@xxxxxxxxx.xxx
xxxxxxx@xxxxxxxxx.xxx
(iii) If to one or more of the Initial Consenting Unsecured Debtholders at:
The address set forth for each applicable Initial Consenting Unsecured
Debtholder on its signature page to this Support Agreement, with a
required copy (which shall not be deemed notice) to:
Xxxxxxx Xxxxx LLP
3400 One First Xxxxxxxx Xxxxx, X.X. Xxx 000
Xxxxxxx, XX
X0X 0X0
Attention: Xxxxx Xxxx and Xxxx Xxxxx
Facsimile: 416.863.1716
Email: xxxxx@xxxxxxxxxxxx.xxx
xxxxxx@xxxxxxxxxxxx.xxx
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX
00000-0000
Attention: Xxxxxx X. Xxxxxxxxx and Xxxxx X. Xxxxxxxxxx
Facsimile: 212.492.0142
Email: xxxxxxxxxx@xxxxxxxxx.xxx
xxxxxxxxxxx@xxxxxxxxx.xxx
and with a copy to:
Xxxxxxx XXX
0 Xxxxxx Xxxxxx
Xxxxxx, XX
XX0X 0XX
Attention: Xxxxx Xxxxxxxx and Xxxxx Xxxxx
42
Facsimile: x00.00.0000.0000
Email: xxxxx.xxxxxxxx@xxxxxxx.xxx
xxxxx.xxxxx@xxxxxxx.xxx
(t) If any term, provision, covenant or restriction of this Support Agreement is held
by a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the provisions, including terms, covenants and restrictions, of this
Support Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated and the parties shall negotiate in good faith to
modify this Support Agreement so as to effect the original intent of the Parties as
closely as possible in a reasonably acceptable manner so that the transactions
contemplated hereby are consummated as originally contemplated to the greatest
extent possible.
(u) Except as explicitly provided for herein, and notwithstanding any termination of
this Support Agreement, nothing herein is intended to, or does, in any manner
waive, limit, impair or restrict the ability of any Consenting Debtholder or any
Concordia Party to protect and preserve its rights, remedies and interests
(including, with respect to the Consenting Debtholders, their claims against the
Concordia Parties), and each Party fully reserves any and all of its rights. Nothing
herein shall be deemed an admission of any kind.
(v) This Support Agreement may be executed by facsimile or other electronic means
and in one or more counterparts, all of which shall be considered one and the
same agreement.
[Remainder of Page Intentionally Left Blank]
Signature Page to Support Agreement
IN WITNESS WHEREOF, each of the undersigned has caused this Support Agreement to be
duly executed and delivered by its proper and duly authorized officer as of the date first written
above.
CONCORDIA INTERNATIONAL CORP.
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Chief Financial Officer
CONCORDIA HEALTHCARE (CANADA)
LIMITED
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
CONCORDIA INVESTMENTS (JERSEY)
LIMITED
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
CONCORDIA FINANCING (JERSEY)
LIMITED
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
CONCORDIA PHARMACEUTICALS INC.,
S.A X.X
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
Signature Page to Support Agreement
CONCORDIA LABORATORIES INC., S.A
X.X
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
AMDIPHARM HOLDINGS S.A X.X
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
AMDIPHARM AG
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
AMDIPHARM B.V.
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
AMDIPHARM LIMITED
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
AMDIPHARM MERCURY HOLDCO UK
LIMITED
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
Signature Page to Support Agreement
AMDIPHARM MERCURY UK LTD
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
CONCORDIA HOLDINGS (JERSEY)
LIMITED
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
AMDIPHARM MERCURY
INTERNATIONAL LIMITED
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
CONCORDIA INVESTMENT HOLDINGS
(UK) LIMITED
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
MERCURY PHARMA GROUP LIMITED
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
CONCORDIA INTERNATIONAL RX (UK)
LIMITED
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
Signature Page to Support Agreement
ABCUR AB
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
MERCURY PHARMACEUTICALS LIMITED
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
FOCUS PHARMA HOLDINGS LIMITED
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
FOCUS PHARMACEUTICALS LIMITED
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
MERCURY PHARMA (GENERICS)
LIMITED
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
MERCURY PHARMACEUTICALS
(IRELAND) LIMITED
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
Signature Page to Support Agreement
MERCURY PHARMA INTERNATIONAL
LIMITED
Per: (signed) “Xxxxx Xxxxx”
Name: Xxxxx Xxxxx
Title: Director
Signature Page to Support Agreement
IN WITNESS WHEREOF, the undersigned has caused this Support Agreement to be duly
executed and delivered by its proper and duly authorized officer as of the date first written
above.
Name of Consenting Debtholder:
[Redacted in accordance with Section 14 of
this Support Agreement]
By: [Redacted]
Name:
Title:
Jurisdiction of residence for legal purposes: [Redacted]
Email: [Redacted]
Address: [Redacted]
Debt Documents Principal Amount Custodian or DTC
Participant, if applicable
Term Loan Facilities issued
October 21, 2015
[Redacted] [Redacted]
Extended Bridge Loans
issued October 21, 2015
[Redacted] [Redacted]
7.00% Senior Unsecured
Notes due 2023
[Redacted] [Redacted]
9.50% Senior Unsecured
Notes due 2022
[Redacted] [Redacted]
9.00% First Lien Senior
Secured Notes due 2022
[Redacted] [Redacted]
Swap Agreement [Redacted] [Redacted]
Common Shares Number of Shares Custodian or DTC
Participant, if applicable
[Redacted] [Redacted] [Redacted]
SCHEDULE A
Subsidiary Guarantors
Concordia Investments (Jersey) Limited
Concordia Financing (Jersey) Limited
Concordia Pharmaceuticals Inc., S.a X.X
Concordia Laboratories Inc., S.a X.X
Amdipharm Holdings S.A X.X
Amdipharm AG
Amdipharm B.V.
Amdipharm Limited
Amdipharm Mercury Holdco UK Limited
Amdipharm Mercury UK Ltd
Concordia Holdings (Jersey) Limited
Amdipharm Mercury International Limited
Concordia Investment Holdings (UK) Limited
Mercury Pharma Group Limited
Concordia International Rx (UK) Limited
Abcur AB
Mercury Pharmaceuticals Limited
Focus Pharma Holdings Limited
Focus Pharmaceuticals Limited
Mercury Pharma (Generics) Limited
Mercury Pharmaceuticals (Ireland) Limited
Mercury Pharma International Limited
SCHEDULE B
DEFINITIONS
“7.00% Unsecured Notes Indenture” means the Indenture for 7.00% Senior Unsecured Notes
dated April 21, 2015 by and among Concordia, the guarantors party thereto, and the 7.00%
Unsecured Notes Trustee, as amended, modified and/or supplemented from time to time.
“7.00% Unsecured Notes Trustee” means U.S. Bank National Association, in its capacity as
trustee under the 7.00% Unsecured Notes Indenture, and any successor thereof.
“9.50% Unsecured Notes” means the 9.50% Unsecured Notes due 2022 issued under the 9.50%
Unsecured Notes Indenture.
“9.50% Unsecured Notes Indenture” means the Indenture for 9.50% Senior Unsecured Notes
dated October 21, 2015 by and among Concordia, the guarantors party thereto, and the 9.50%
Unsecured Notes Trustee, as amended, modified and/or supplemented from time to time.
“9.50% Unsecured Notes Trustee” means U.S. Bank National Association, in its capacity as
trustee under the 9.50% Unsecured Notes Indenture, and any successor thereof.
“Additional Cash Amount” has the meaning given to it in the Term Sheet.
“Additional Debt” has the meaning given to it in Section 4(h).
“Additional Shares” has the meaning given to it in Section 4(h).
“Advisors” means, collectively, (i) the Initial Consenting Secured Debtholders Advisors and (ii)
the Initial Consenting Unsecured Debtholders Advisors.
“Affiliate” of any Person shall mean any Person directly or indirectly controlling, controlled by,
or under common control with, such Person; provided, that, for the purposes of this definition,
“control” (including, with correlative meanings, the terms “controlled by” and “under common
control with”), as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or otherwise.
“Agents” has the meaning given to it in the Term Sheet.
“Alternative Implementation Process” and “Alternative Implementation Processes” has the
meaning given to it in Section 7(b).
“Anti-Corruption Laws” means all applicable laws, rules, and regulations of any applicable
jurisdiction from time to time relating to anti-bribery, anti-corruption, or improper payments,
including the Foreign Corrupt Practices Act of 1977, as amended, the U.K. Xxxxxxx Xxx 0000,
and the Corruption of Foreign Public Officials Act (Canada).
- 2 -
“Bankruptcy Court” means United States Bankruptcy Court for the Southern District of New
York.
“Bonus Payments” means all bonus payments, retention payments, incentive compensation
payments, service award payments, or other similar payments payable by any of Concordia or
any of its direct and indirect subsidiaries or affiliates to any of Concordia’s or its direct and
indirect subsidiaries’ or affiliates’ current or past directors, officers, employees or senior
managers, in connection with the transactions contemplated by this Support Agreement or
otherwise.
“Breaching Debtholder” has the meaning given to it in Section 12(d).
“Business Day” means each day, other than a Saturday or Sunday or a statutory or civic holiday,
on which banks are open for business in Xxxxxxx, Xxxxxxx.
“Canadian Securities Commissions” means, collectively, the applicable securities commissions
or regulatory authorities in each of the provinces of Canada.
“Canadian Securities Laws” means, collectively, and, as the context may require, the
applicable securities laws of each of the provinces of Canada, and the respective regulations and
rules made under those securities laws together with all applicable policy statements,
instruments, blanket orders and rulings of the Canadian Securities Commissions and all
discretionary orders or rulings, if any, of the Canadian Securities Commissions made in
connection with the transactions contemplated by this Support Agreement together with
applicable published policy statements of the Canadian Securities Administrators, as the context
may require.
“Cash Pay-down” has the meaning given to it in the Term Sheet.
“CBCA” has the meaning given to it in the preamble hereto.
“CBCA Conditions” means that (a) the Shareholder Approval shall have been obtained, or the
Ontario Court shall approve the CBCA Plan pursuant to sub-paragraph (b) below,
notwithstanding that the Shareholder Approval has not been obtained, provided that such
approval by the Ontario Court does not result in (x) a change to the economics of the CBCA Plan
or the consideration payable to the Secured Debtholders and the Unsecured Debtholders pursuant
to the CBCA Plan, or (y) the loss of Concordia’s listing on the TSX or such other recognized
securities exchange as may be acceptable to Concordia and the Majority Consenting Private
Placement Parties; and (b) the CBCA Plan shall have been approved by the Ontario Court
pursuant to the Final Order by no later than August 17, 2018, and the Final Order shall include
the Existing Equity Claims Relief or the Equity Claims relating to the period prior to the
Effective Date shall have otherwise been addressed in a manner satisfactory to Concordia and the
Majority Consenting Private Placement Parties by no later than August 17, 2018 (or such other
date as may be agreed by Concordia and the Majority Initial Consenting Debtholders, each
acting reasonably).
- 3 -
“CBCA Plan” has the meaning given to it in the preamble hereto.
“CBCA Proceedings” has the meaning given to it in the preamble hereto.
“CCAA” means the Companies’ Creditors Arrangement Act (Canada).
“CCAA Plan” means a plan of compromise and arrangement under the CCAA.
“CCAA Proceedings” has the meaning given to it in the Term Sheet.
“Chapter 11” means Chapter 11 of Title 11 of the United States Code.
“Chapter 11 Plan” means a restructuring plan of reorganization under Chapter 11.
“Chapter 11 Process” has the meaning given to it in the Term Sheet.
“CHCL” has the meaning given to it in the preamble hereto.
“Company” has the meaning given to it in the preamble hereto.
“Concordia” has the meaning given to it in the preamble hereto.
“Concordia Board” means the board of directors of Concordia.
“Concordia Parties” has the meaning given to it in the preamble hereto.
“Consenting Debtholders” means, collectively, the Consenting Secured Debtholders and the
Consenting Unsecured Debtholders.
“Consenting Secured Debtholders” means the Secured Debtholders that have executed and
remain, at the relevant time, subject to this Support Agreement or a Joinder Agreement hereto.
“Consenting Unsecured Debtholders” means the Unsecured Debtholders that have executed
and remain, at the relevant time, subject to this Support Agreement or a Joinder Agreement
hereto.
“Contracts” means all agreements, contracts, leases (whether for real or personal property),
purchase orders, undertakings, covenants not to compete, employment agreements,
confidentiality agreements, licenses, instruments, obligations and commitments to which a
Person is a party or by which a Person or any of its assets are bound or affected, whether written
or oral.
“Court” means the Ontario Court or the Bankruptcy Court, as applicable.
“Definitive Documents” means all definitive agreements, court materials and other material
documents in connection with the Recapitalization Transaction and the CBCA Proceedings
- 4 -
and/or an Alternative Implementation Process (as applicable) and any and all amendments,
modifications or supplements relating to any of the foregoing, including, without limitation and
as applicable, this Support Agreement, the Subscription Agreement, the Governance Agreement,
the CBCA Plan, the Interim Order, the Final Order, the order containing the Existing Equity
Claims Relief, the New Senior Secured Debt, and all material applications, motions, pleadings,
orders, rulings and other documents filed by the Company with the Court in the CBCA
Proceedings or an Alternative Implementation Process (as applicable), the Information Circular
and any other material documentation required in connection with the meetings of the Secured
Debtholders and the Unsecured Debtholders, and if required, shareholders and all other material
transaction documents relating to the Recapitalization Transaction and the CBCA Plan
(including any new (or amended) articles of incorporation, by-laws and other constating
documents of the Company).
“Designated Offshore Securities Market” has the meaning given to that term in Rule 902 of
Regulation S.
“Disclosure Letter” means the disclosure letter delivered by the Company to the Consenting
Debtholders concurrently with the execution of this Support Agreement.
“Disclosure Statement” has the meaning given to it in Schedule G.
“XXXXX” means the Electronic Data Gathering, Analysis, and Retrieval System.
“Effective Date” means the date on which the Recapitalization Transaction is implemented
pursuant to the CBCA Plan, or, if an Alternative Implementation Process is commenced in
accordance with Section 7, the date as specified in Schedule F or Schedule G, as applicable.
“Effective Time” means the effective time of the CBCA Plan on the Effective Date.
“Equity Claim” means an equity claim (as defined in section 2(1) of the CCAA) in respect of
Concordia.
“Existing Equity” means all Existing Shares and all options, warrants, rights or similar
instruments derived from, relating to, or exercisable, convertible or exchangeable therefor.
“Existing Equity Claims Relief” has the meaning given to it in the Term Sheet.
“Existing Shares” means all existing common shares of Concordia on the Effective Date
immediately prior the implementation of the Recapitalization Transaction.
“Existing Shares Dilution” has the meaning given to it in the Term Sheet.
“Export Controls” means all applicable laws, rules and regulations of any applicable
jurisdiction controlling export and re-export of items, including the U.S. Export Administration
Regulations and EU Dual-Use Regulation (Council Regulation 428/2009, as amended), including
related UK and EU Member State laws, rules and regulations.
- 5 -
“Final Order” means a final order of the Court pursuant to the CBCA that, inter alia, approves
the CBCA Plan.
“Governance Agreement” means that certain agreement among the Company and the Private
Placement Parties with respect to certain governance matters and registration rights.
“Governmental Entity” means any government, regulatory authority, governmental department,
agency, commission, bureau, official, minister, Crown corporation, court, board, tribunal or
dispute settlement panel or other law, rule or regulation-making organization or entity: (a) having
or purporting to have jurisdiction on behalf of any nation, province, territory or state or any other
geographic or political subdivision of any of them; or (b) exercising, or entitled or purporting to
exercise any administrative, executive, judicial, legislative, policy, regulatory or taxing authority
or power.
“IFRS” means generally accepted accounting principles as set out in the CPA Canada Handbook
– Accounting for an entity that prepares its financial statements in accordance with International
Financial Reporting Standards, at the relevant time, applied on a consistent basis.
“Indemnified Party” has the meaning given to it in Section 5(i).
“Information” means all information set forth or incorporated in Concordia’s public disclosure
documents filed on SEDAR since January 1, 2017 and publicly available prior to the date of this
Agreement (excluding any risk factor disclosures contained in such documents under the heading
“Risk Factors” and any disclosures of risks or other matters included in any “forward-looking
statements”, disclaimers or other statements that are cautionary, predictive or forward-looking in
nature).
“Information Circular” means the notice of the meetings of Secured Debtholders, Unsecured
Debtholders and shareholders for purposes of voting on the CBCA Plan, and accompanying
management information circular in respect of the CBCA Plan, including all schedules,
appendices and exhibits to, and information incorporated by reference in, such management
information circular, to be sent by the Company to securityholders in connection with the
Recapitalization Transaction and the CBCA Plan, which Information Circular shall include the
pre-packaged Chapter 11 plan of reorganization.
“Initial Consenting Debtholders” means, collectively, the Initial Consenting Secured
Debtholders and the Initial Consenting Unsecured Debtholders.
“Initial Consenting Secured Debtholders” means, collectively, the Consenting Secured
Debtholders that executed this Support Agreement on May 1, 2018 and are represented by the
Initial Consenting Secured Debtholders Advisors as of the date hereof.
“Initial Consenting Secured Debtholders Advisors” means, collectively, Osler, Xxxxxx &
Harcourt LLP and White & Case LLP, as legal advisors, Xxxxxxxx Xxxxx Capital, Inc., as
financial advisor, Deloitte LLP, as tax advisor, to the Initial Consenting Secured Debtholders.
- 6 -
“Initial Consenting Unsecured Debtholders” means, collectively, the Consenting Unsecured
Debtholders that executed this Support Agreement on May 1, 2018 and are represented by the
Initial Consenting Unsecured Debtholders Advisors as of the date hereof.
“Initial Consenting Unsecured Debtholders Advisors” means, collectively, Xxxx, Xxxxx
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, Xxxxxxx Xxxxx LLP, and Ashurst LLP, as legal advisors, and
Xxxxxxxxx & Co., LLC, as financial advisor, to the Initial Consenting Unsecured Debtholders.
“Insurance Policies” means, collectively, the current policies or binders of fire, liability, product
liability, umbrella liability, real and personal property, workplace safety and insurance, workers
compensation, vehicle, directors’ and officers’ liability, fiduciary liability and other casualty and
property insurance maintained by the Concordia Parties, including any insurance policies of
Concordia available to pay insured claims in respect of Concordia or its current or former
directors and officers.
“Interim Order” means an interim order of the Ontario Court pursuant to the CBCA that, inter
alia, approves the calling for separate meetings of the Secured Debtholders and the Unsecured
Debtholders, and if required, shareholders, to consider and vote on the CBCA Plan.
“Joinder Agreement” means a joinder agreement, in the form appended hereto at Schedule E,
pursuant to which a Secured Debtholder or Unsecured Debtholder agrees, among other things, to
be bound by and subject to the terms of this Support Agreement and thereby may become
Consenting Debtholder.
“Key Personnel” means, collectively (i) members of senior management, including senior
executive officers, of each Concordia Party and each of their direct and indirect subsidiaries or
affiliates, (ii) members of the board of directors of each Concordia Party and each of their direct
and indirect subsidiaries or affiliates, and (iii) the other officers or employees of each Concordia
Party and each of their direct and indirect subsidiaries or affiliates earning a salary of $200,000
or more per annum.
“Knowledge of the Company” and similar phrases means the knowledge of any of the Chief
Executive Officer of Concordia, the Chief Financial Officer of Concordia and the Chief Legal
Officer and Secretary of Concordia after having made reasonable inquiry of appropriate and
relevant internal persons at the applicable Concordia Parties, and any applicable documentation
(which for greater certainty shall exclude this Support Agreement), and shall include the
knowledge that such Persons would reasonably be expected to have if such reasonable inquiries
were made.
“Law” or “Laws” means any law, statute, constitution, treaty, convention, code, injunction,
order, decree, consent decree, judgment, rule regulation, ordinance or other pronouncement
having the effect of law whether in Canada, the United States, the European Union and its
Member States, or the United Kingdom, or any other country, or any domestic or foreign state,
county, province, city or other political subdivision or of any Governmental Entity.
- 7 -
“Majority Consenting Private Placement Parties” has the meaning given to it in the Term
Sheet.
“Majority Initial Consenting Debtholders” means, each of (i) the Majority Initial Consenting
Secured Debtholders and (ii) the Majority Initial Consenting Unsecured Debtholders.
“Majority Initial Consenting Secured Debtholders” means, collectively, Initial Consenting
Secured Debtholders holding in aggregate not less than half (50%) of the aggregate principal
amount of Secured Debt held by all Initial Consenting Secured Debtholders.
“Majority Initial Consenting Unsecured Debtholders” means, collectively, Initial Consenting
Unsecured Debtholders holding in aggregate not less than half (50%) of the aggregate principal
amount of Unsecured Debt held by all Initial Consenting Unsecured Debtholders.
“Management Incentive Plan” means the new management incentive plan to be entered into in
connection with the CBCA Plan, on such terms as agreed to among the Company and the
Majority Initial Consenting Debtholders.
“Material Adverse Change” means any event, change, circumstance or effect occurring up to
and including the closing of the Recapitalization Transaction that would reasonably be expected
to be or become, individually or in the aggregate, materially adverse to the Company and its
subsidiaries (taken as a whole), or which would materially impair the Company’s ability to
perform its obligations under this Support Agreement or have a materially adverse effect on or
prevent or materially delay the consummation of the transactions contemplated by this Support
Agreement, provided that none of the following shall constitute a Material Adverse Change: (a)
any change in applicable accounting standards; (b) any change in global, national or regional
political conditions (including the outbreak of war or acts of terrorism) or in general economic,
business, regulatory, political or market conditions or in national or global financial or capital
markets; (c) any change affecting any of the industries in which the Company operates, including
changes in exchange rates or commodity prices; (d) any natural disaster; (e) any change resulting
from the execution, announcement, or performance of the Term Sheet, this Support Agreement,
the CBCA Plan or any other related agreement and the consummation of the Recapitalization
Transaction; (f) any change in the market price or trading volume of any securities of the
Company or any suspension of trading in securities generally on any securities exchange on
which any securities of the Company trade, or the failure, in and of itself, of the Company to
meet any internal or public projections, forecasts or estimates of revenues or earnings (it being
understood that the underlying facts giving rise to or contributing to such change or failure may
be taken into account in determining whether there has been a Material Adverse Change); or (g)
any action taken by the Company in accordance with the CBCA Proceedings, Term Sheet, this
Support Agreement or the CBCA Plan except in the cases of clauses (b), (c) or (d), to the extent
that the Company, taken as a whole, is disproportionately affected as compared with other
participants in the industries in which the Company operates.
“Material Contract” means each Contract and other instrument or document (including any
amendment to any of the foregoing) of the Company or any of its direct or indirect subsidiaries
or affiliates:
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i. with any of the Key Personnel or with any affiliate of the Company or any of its direct or
indirect subsidiaries or affiliates;
ii. that in any way purports to materially restrict the business activity of the Company or any
of its direct or indirect subsidiaries or affiliates or to limit the freedom of the Company or
any of its direct or indirect subsidiaries or affiliates to engage in any line of business or to
compete with any Person or in any geographic area or to hire or retain any Person in any
material respect;
iii. that is material to the businesses of the Company and its direct or indirect subsidiaries,
taken as a whole; and
iv. any other Contract, if a breach of such Contract could reasonably be expected to result in
a Material Adverse Change.
“Milestones” means those milestones set forth in Section 5(c) hereof or the timelines applicable
to an Alternative Implementation Process in accordance with Section 7 as set forth in Schedule F
and Schedule G (as the same may be amended pursuant to the terms of this Support Agreement).
“MIP Dilution” has the meaning given to it in the Term Sheet.
“New Common Shares” has the meaning given to it in Section 9(c)(xi).
“New Senior Secured Debt” means, collectively, the New Senior Secured Term Loan and the
New Senior Secured Notes.
“New Senior Secured Notes” has the meaning given to it in the Term Sheet.
“New Senior Secured Term Loan” has the meaning given to it in the Term Sheet.
“Obligations” has the meaning given to it in the Term Sheet.
“Ontario Court” has the meaning given to it in the preamble hereto.
“Outside Date” means: (i) in respect of the CBCA Proceedings, September 30, 2018; (ii) in
respect of the CCAA Proceedings commenced in accordance with Section 7, on a date agreed to
by the Majority Initial Consenting Debtholders and the Majority Consenting Private Placement
Parties, in their sole and absolute discretion, or (iii) in respect of the Chapter 11 Process
commenced in accordance with Section 7, 90 days after the Petition Date, each as applicable, or,
in any case, such other date as the Company and the Majority Initial Consenting Debtholders
may agree.
“Party” or “Parties” has the meaning given to it in the preamble hereto.
“Person” means an individual, a corporation, a partnership, a limited liability company,
organization, trustee, executor, administrator, a trust, an unincorporated association, a
- 9 -
Governmental Entity or any agency, instrumentality or political subdivision of a Governmental
Entity, or any other entity or body.
“Petition Date” has the meaning given to in Schedule G.
“Preliminary Interim Order” means the Preliminary Interim Order granted by the Ontario
Court on October 20, 2017 in the CBCA Proceedings, as may be amended by the Ontario Court.
“Private Placement Commitments” has the meaning given to it in the Term Sheet.
“Private Placement Parties” has the meaning given to it in the Term Sheet.
“Private Placement Shares” has the meaning given to it in the Term Sheet.
“Pro-Rata Share” has the meaning given to it in the Term Sheet.
“Recapitalization Transaction” has the meaning given to it in the preamble hereto.
“Recapitalization Transaction Terms” has the meaning given to it in the preamble hereto.
“Regulation S” means Regulation S as promulgated by the United States Securities and
Exchange Commission under the United States Securities Act of 1933, as amended from time to
time, and the rules and regulations promulgated thereunder, or any successor statute.
“Released Parties” has the meaning given to it in Section 10.
“Releases” has the meaning given to it in Section 10.
“Relevant Debt” means, collectively, all Relevant Secured Debt, Total Secured Debt, Relevant
Unsecured Debt and/or Total Unsecured Debt held by a Consenting Debtholder.
“Relevant Secured Debt” has the meaning given to it in Section 2(a)(i).
“Relevant Shares” has the meaning given to it in Section 2(a)(iii).
“Relevant Unsecured Debt” has the meaning given to it in Section 2(a)(ii).
“Representatives” has the meaning given to it in Section 14.
“Sanctioned Country” means, at any time, a country, region or territory which is itself the
subject or target of any Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North
Korea, and Syria).
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of
designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department
of the Treasury, the U.S. Department of State, or by the United Nations Security Council, the
- 10 -
Canadian government, the European Union, any European Union Member State, or Her
Majesty’s Treasury of the United Kingdom, (b) any Person operating, organized or resident in a
Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons
described in the foregoing clauses (a) or (b).
“Sanctions” means all economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including those
administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or
the U.S. Department of State, or (b) the United Nations Security Council, Canadian government,
the European Union, any European Union Member State, or Her Majesty’s Treasury of the
United Kingdom.
“Secured Debt” means, collectively, the debt outstanding under the Secured Debt Documents.
“Secured Debt Documents” means, collectively: (i) the Secured Term Loan Agreement; (ii) the
Indenture for 9.000% First Lien Senior Secured Notes Due 2022 dated October 13, 2016 by and
among Concordia International Corp., the guarantors party thereto, and U.S. Bank National
Association, as Trustee and as Collateral Agent; (iii) the Swap Agreement; and (iv) all related
documentation, including, without limitation, all guarantee and security documentation, related
to the foregoing.
“Secured Debtholder Claims” has the meaning given to it in the Term Sheet.
“Secured Debtholders” means, collectively, the holders of the Secured Debt, in their capacity as
such.
“Secured Notes Indenture” means the Indenture for 9.00% First Lien Senior Secured Notes
dated October 13, 2016 by and among Concordia, the guarantors party thereto, and the Secured
Notes Trustee, as amended, modified and/or supplemented from time to time.
“Secured Notes Trustee” means U.S. Bank National Association, as Trustee and as Collateral
Agent under the Secured Notes Indenture, and any successor thereof.
“Secured Swap Lender” means Xxxxxxx Sachs International, the swap provider under the
Swap Agreement, and any permitted assignee.
“Secured Swap Settlement Agreement” means the Settlement Agreement entered into as of
November 25, 2017 between Xxxxxxx Xxxxx International and Concordia.
“Secured Term Loan Agent” has the meaning given to it in the Term Sheet.
“Secured Term Loan Agreement” means the Credit and Guaranty Agreement dated October
21, 2015 by and among, inter alia, Concordia International Corp. (f/k/a Concordia Healthcare
Corp.), the guarantors party thereto, Xxxxxxx Sachs Bank USA, as Administrative Agent and
Collateral Agent, and the lenders party thereto.
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“SEDAR” means the System for Electronics Document Analysis and Retrieval.
“Shareholder Approval” means the approval of the CBCA Plan by the requisite majority of
votes cast by holders of Existing Shares, voting in person or by proxy at the shareholders’
meeting held pursuant to the Interim Order, as required pursuant to the Interim Order.
“Subordinated Promissory Note” means the Non-Negotiable Subordinated Secured Promissory
Note made by Concordia Healthcare Inc. in favor of Xxxxxxxxx Xxxxxxx, dated December 20,
2013.
“Subscription Agreement” has the meaning given to it in the Term Sheet.
“Subsidiary Guarantors” has the meaning given to it in the preamble hereto.
“Superior Transaction” has the meaning given to it in Section 11.
“Support Agreement” has the meaning given to it in the preamble hereto.
“Swap Agreement” means, collectively, (i) the International Swaps and Derivatives Association
2002 Master Agreement dated as of August 15, 2016 (as amended or supplemented, together
with all schedules, annexes and exhibits thereto), between Xxxxxxx Sachs International and
Concordia Investments (Jersey) Limited (the “ISDA”); and (ii) the Swap Confirmations entered
into as of August 17, 2016 and November 8, 2016 between Xxxxxxx Xxxxx International and
Concordia Investments (Jersey) Limited in accordance with the ISDA, each as modified by the
Secured Swap Settlement Agreement.
“Term Sheet” has the meaning given to it in the preamble hereto.
“Total Secured Debt” has the meaning given to it in Section 2(a)(i).
“Total Unsecured Debt” has the meaning given to it in Section 2(a)(ii).
“Transfer” has the meaning given to it in Section 4(b)(i).
“Trustees” means, collectively, the Secured Notes Trustee, the 7.00% Unsecured Notes Trustee,
and the 9.50% Unsecured Notes Trustee.
“TSX” means the Toronto Stock Exchange.
“Two Year Equity Bridge Credit and Guaranty Agreement” means the Two Year Equity
Bridge Credit and Guaranty Agreement dated October 21, 2015 by and among, inter alia,
Concordia International Corp. (f/k/a Concordia Healthcare Corp.), the guarantors party thereto,
the administrative agent, and the lenders from time to time party thereto.
“Unsecured Debt” means, collectively, the debt outstanding under the Unsecured Debt
Documents.
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“Unsecured Debt Documents” means, collectively: (i) the Indenture for 7.000% Senior
Unsecured Notes Due 2023 dated April 21, 2015 by and among Concordia International Corp.
(f/k/a Concordia Healthcare Corp.), the guarantors party thereto, and U.S. Bank National
Association, as Trustee; (ii) the Indenture for 9.500% Senior Unsecured Notes Due 2022 dated
October 21, 2015 by and among Concordia International Corp. (f/k/a Concordia Healthcare
Corp.), the guarantors party thereto, and U.S. Bank National Association, as Trustee; (iii) the
Extended Equity Bridge Credit and Guaranty Agreement dated October 21, 2015 by and among,
inter alia, Concordia International Corp. (f/k/a Concordia Healthcare Corp.), the guarantors party
thereto, Wilmington Trust, National Association, as Administrative Agent, and the lenders party
thereto; (iv) the Subordinated Promissory Note; and (v) all related documentation, including,
without limitation, all guarantee documentation, related to the foregoing; provided that the
Company may elect to exclude the Subordinated Promissory Note from the Unsecured Debt
Documents and address the Subordinated Promissory Note in a manner otherwise acceptable to
the Company and the Majority Consenting Private Placement Parties.
“Unsecured Debt Settlement” means the settlement and termination of the Two Year Equity
Bridge Credit and Guaranty Agreement, as agreed to by Concordia and the lenders party thereto
as of November 10, 2017.
“Unsecured Debtholder Claims” has the meaning given to it in the Term Sheet.
“Unsecured Debtholders” means, collectively, the holders of the Unsecured Debt, in their
capacity as such.
“Unsecured Equity Bridge Loan Agent” means Wilmington Trust, National Association, as
Administrative Agent under the Unsecured Equity Bridge Loan Agreement, and any successor
thereof.
“Unsecured Equity Bridge Loan Agreement” means the Extended Equity Bridge Credit and
Guaranty Agreement dated October 21, 2015 by and among, inter alia, Concordia, the guarantors
party thereto, the Unsecured Equity Bridge Loan Agent, and the lenders party thereto, as
amended, modified and/or supplemented from time to time.
“U.S. Securities Act” means the United States Securities Act of 1933, as amended from time to
time, and the rules and regulations promulgated thereunder, or any successor statute.
“U.S. Securities Commission” means the United States Securities and Exchange Commission.
“U.S. Securities Laws” means, collectively, the Xxxxxxxx-Xxxxx Act of 2002 (“Xxxxxxxx-
Xxxxx”), the U.S. Securities Act, the U.S. Securities Exchange Act of 1934, as amended, the rules
and regulations of the U.S. Securities Commission, the auditing principles, rules, standards and
practices applicable to auditors of “issuers” (as defined in Xxxxxxxx-Xxxxx) promulgated or
approved by the Public Company Accounting Oversight Board and, as applicable, the rules of
the NASDAQ.
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“Voting Deadline” means the date on which votes are due in respect of the CBCA Plan, as
established by the Interim Order in the CBCA Proceedings or an order to be entered in the
Alternative Implementation Process, as the same may be amended by the order of the Court or
by the Company with the prior written consent the Majority Initial Consenting Debtholders.
SCHEDULE C
TERM SHEET
[Attached]
CONCORDIA INTERNATIONAL CORP.
RECAPITALIZATION TRANSACTION
SUMMARY OF PRINCIPAL TERMS AND CONDITIONS
This term sheet, dated as of May 1, 2018 (including the schedules attached hereto, the “Term
Sheet”), describes the principal terms on which Concordia International Corp. (“Concordia”,
and collectively with Concordia Healthcare (Canada) Limited (“CHCL”) and Concordia’s
guarantor subsidiaries set forth on Schedule A hereto, the “Company”) and the Consenting
Debtholders (as defined below) will complete a series of transactions in connection with certain
indebtedness of the Company, consistent and in accordance with the terms and conditions set
forth in this Term Sheet (collectively, the “Recapitalization Transaction”). Subject to the
terms of the Support Agreement (as defined below), the Recapitalization Transaction will be
effectuated pursuant to a restructuring plan (the “Plan”) to be implemented (i) pursuant to the
proceedings commenced by Concordia and CHCL under the Canada Business Corporations Act
(the “CBCA”) before the Ontario Superior Court of Justice (Commercial List) (the “Ontario
Court”) on October 20, 2017 (the “CBCA Proceedings”), or (ii) in the event the Plan is not
implemented pursuant to the CBCA Proceedings and subject to the terms and conditions set out
in the Support Agreement and this Term Sheet, pursuant to an Alternative Implementation
Process (as defined below).1 Capitalized terms used in this Term Sheet and not otherwise
defined shall have the meanings set out in Section VII of this Term Sheet.
This Term Sheet and the information contained herein is strictly private and confidential and is
not to be disclosed in any manner whatsoever without the prior written consent of Concordia.
This Term Sheet is for discussion and settlement purposes only and is subject to the provisions of
Rule 408 of the Federal Rules of Evidence and other similar applicable state and federal rules of
the United States and similar Canadian rules and laws. This Term Sheet is not an offer with
respect to any securities or a solicitation of votes with respect to a Plan. This Term Sheet shall
not be construed as (i) an offer capable of acceptance, (ii) a binding agreement of any kind, (iii) a
commitment to enter into, or offer to enter into, any agreement, or (iv) an agreement to file any
restructuring plan or commence any restructuring proceedings or consummate any transaction or
to vote for or otherwise support any restructuring plan. This Term Sheet is subject to, among
other things, negotiation and execution of definitive documentation.
Notwithstanding the foregoing paragraph, it is intended that this Term Sheet would be appended
to the definitive Support Agreement to be executed by Concordia and the Consenting
Debtholders and filed by Concordia, together with the form of Support Agreement, on SEDAR
and XXXXX, and, if applicable, filed, together with the form of Support Agreement, with the
applicable Court in connection with the CBCA Proceedings or an Alternative Implementation
Process, as applicable.
1 This Term Sheet does not purport to summarize all of the terms, conditions, representations, warranties and other
provisions with respect to the transactions referred to herein, which transactions will be entered into on the basis of
mutually satisfactory definitive documentation after, among other things, receipt of necessary internal and external
approvals.
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I. RECAPITALIZATION TRANSACTION
Exchange of Secured
Debt and Extinguishment
of Secured Debtholder
Claims
On the date of implementation of the Recapitalization Transaction
(the “Effective Date”), all Obligations in respect of the Secured
Debt and the Secured Debt Documents (collectively, the “Secured
Debtholder Claims”) as of the Effective Date shall be irrevocably
exchanged for:
(i) cash in the amount equal to the aggregate amount of
accrued and unpaid interest (calculated at the
contract non-default rate or default rate, as
applicable pursuant to the section titled
“Determination of Claim Amounts”) outstanding on
the Secured Debt as of the Effective Date;
(ii) cash in the amount of $500 million (the “Cash Pay-
down”);
(iii) any Additional Cash Amount (as defined below);
(iv) the New Senior Secured Term Loan and the New
Senior Secured Notes (together, the “New Senior
Secured Debt”); and
(v) any Secured Debtholder Early Consent Cash
Consideration (as defined below) to which any
Early Consenting Secured Debtholders (as defined
below) may become entitled as provided for herein.
In full and final settlement of the Secured Debtholder Claims, the
complete satisfaction, release and discharge of all guarantees and
security pertaining to the Secured Debt, and the cancellation of the
Secured Debt Documents (or amendment and restatement as
provided for herein), each Secured Debtholder will become
entitled to and shall receive:
(A) cash in the amount equal to the amount of accrued
and unpaid interest (calculated at the contract non-
default rate or default rate, as applicable pursuant to
the section titled “Determination of Claim
Amounts”) outstanding as of the Effective Date on
the Secured Debt held by such Secured Debtholder
as of the Effective Date;
(B) its Pro-Rata Share of the Cash Pay-down and of any
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Additional Cash Amount;
(C) its Pro-Rata Share of the New Senior Secured Debt,
in the form of the New Senior Secured Term Loan
and/or the New Senior Secured Notes, subject to the
allocations set out below; and
(D) if such Secured Debtholder is an Early Consenting
Secured Debtholder, its Secured Debtholder Early
Consent Cash Consideration.
Cash amounts to be paid to Secured Debtholders pursuant to the
Plan in respect of Secured Debtholder Claims denominated in GBP
may be paid, at the election of Concordia, with the consent of the
Majority Initial Consenting Secured Debtholders, in US dollars
and/or GBP.
The aggregate amount of consideration payable to Secured
Debtholders under the Plan shall equal (i) in respect of Secured
Debtholders that are Early Consenting Secured Debtholders,
subject to the terms hereof, an amount that is equal to (x)
93.3835% of the principal amount of such Secured Debtholders’
Secured Debtholders Claims (for certainty reduced by any
unamortized original issue discount and excluding any make-
whole premiums, redemption premiums or other similar
premiums) taking into account their respective Pro-Rata Share of
the Cash Pay-down and the New Senior Secured Debt and their
applicable Secured Debtholder Early Consent Cash Consideration,
plus (y) their respective Pro-Rata Share of any Additional Cash
Amount, and (ii) in respect of Secured Debtholders that are not
Early Consenting Secured Debtholders, an amount that is equal to
(x) 88.3835% of the principal amount of such Secured
Debtholders’ Secured Debtholders Claims (for certainty reduced
by any unamortized original issue discount and excluding any
make-whole premiums, redemption premiums or other similar
premiums) taking into account their respective Pro-Rata Share of
the Cash Pay-down and the New Senior Secured Debt, plus (y)
their respective Pro-Rata Share of any Additional Cash Amount.
Each Secured Debtholder as of a record date determined by
Concordia and the Majority Initial Consenting Debtholders (the
“Record Date”) shall receive in respect of its Pro-Rata Share of
the New Senior Secured Debt to be received on the Effective Date:
(i) in respect of the Secured Debt held by such Secured
Debtholder under the Secured Notes Indenture (the
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“Secured Notes Debt”), its Pro-Rata Share of the
New Senior Secured Debt in the form of the New
Senior Secured Notes; and
(ii) in respect of the Secured Debt held by such Secured
Debtholder under the Secured Term Loan
Agreement and/or the Swap Agreement, its Pro-
Rata Share of the New Senior Secured Debt in the
form of the New Senior Secured Term Loan;
provided, however, that each Secured Debtholder
under the Secured Term Loan Agreement shall have
the right, in respect of its Secured Debt under the
Secured Term Loan Agreement (the “Secured
Term Loan Debt”), to elect on or prior to the
voting deadline for the Plan to receive all or a
portion of its Pro-Rata Share of the New Senior
Secured Debt in respect of its Secured Term Loan
Debt in the form of New Senior Secured Notes.
The aggregate principal amount of New Senior
Secured Notes available for election pursuant to this
paragraph (ii) shall not exceed the amount equal to
$300 million less the principal amount of the New
Senior Secured Notes allocated to the Secured
Debtholders in respect of the Secured Notes Debt in
paragraph (i) above (such amount, the “New Senior
Secured Notes Allocation Amount”).
In the event that the New Senior Secured Notes become
oversubscribed (such that the elections of the New Senior Secured
Note Electors (as defined below) total more than the New Senior
Secured Notes Allocation Amount) by Secured Debtholders who,
in respect of their respective Secured Term Loan Debt, elect to
receive all or a portion of their Pro-Rata Share of the New Senior
Secured Debt in the form of New Senior Secured Notes pursuant
to paragraph (ii) above (the “New Senior Secured Note
Electors”), such New Senior Secured Notes Electors shall be
deemed to have made a partial election for the New Senior
Secured Term Loan (on a pro-rata basis based on the principal
amount of New Senior Secured Notes elected for by such New
Senior Secured Note Electors) in an amount which reduces the
New Senior Secured Notes allocated to the Secured Debtholders in
respect of their Secured Term Loan Debt to an aggregate principal
amount not exceeding the New Senior Secured Notes Allocation
Amount.
- 5 -
In the event the New Senior Secured Notes become
undersubscribed (such that the elections of the New Senior
Secured Note Electors total less than the New Senior Secured
Notes Allocation Amount), Initial Consenting Unsecured
Debtholders who are parties to the Support Agreement and hold
any Secured Term Loan Debt shall be deemed pursuant to the Plan
to have elected to receive on a pro-rata basis (based on the
principal amount of Secured Term Loan Debt held by each such
Initial Consenting Unsecured Debtholder divided by the aggregate
principal amount of Secured Term Loan Debt held by all such
Initial Consenting Unsecured Debtholders) any excess amount of
New Senior Secured Notes as consideration with respect to their
holdings of Secured Term Loan Debt (with a corresponding
reduction in the amount of the New Senior Secured Term Loan
such Initial Consenting Unsecured Debtholders would have
otherwise been entitled to receive pursuant hereto); provided that
no such Initial Consenting Unsecured Debtholder shall receive in
respect of its Secured Term Loan Debt consideration in excess of
93.3835% of the principal amount of its Secured Term Loan Debt
(for certainty, including the Cash Pay-down and Secured
Debtholder Early Consent Cash Consideration, but not including
the Additional Cash Amount).
By the voting deadline for the Plan, with respect to the New Senior
Secured Term Loans that each Secured Debtholder shall receive in
accordance with the above paragraphs, each Secured Debtholder
shall have the right to elect to receive: (i) a percentage of its New
Senior Secured Term Loans to be issued to such Secured
Debtholder as EUR New Senior Secured Term Loans (based on
the EUR/USD Exchange Rate on the FX Date) (with the aggregate
of such elected amounts, the “Elected EUR New Senior Secured
Term Loan Amount”), and (ii) a percentage of its New Senior
Secured Term Loans to be issued to such Secured Debtholder as
USD New Senior Secured Term Loans; provided that:
(i) if after the foregoing elections, the EUR New
Senior Secured Term Loans exceed €400 million,
then the Secured Debtholders that elected to receive
all or a portion of their New Senior Secured Term
Loans as EUR New Senior Secured Term Loans
(the “EUR New Senior Secured Term Loan
Electors”) shall be deemed to have made a partial
election for USD New Senior Secured Term Loans
(on a pro-rata basis based on the principal amount
of EUR New Senior Secured Term Loans elected
- 6 -
for by such EUR New Senior Secured Term Loan
Electors) in an amount which reduces the EUR
New Senior Secured Term Loans to an aggregate
principal amount not exceeding €400 million;
(ii) if after the foregoing elections, the EUR New
Senior Secured Term Loans do not equal or exceed
€300 million, then, any Secured Debtholder that
fails to make such elections (each a “Non-Electing
Secured Debtholder”), shall be deemed pursuant
to the Plan to have elected to receive (i) its pro rata
share (based on the principal amount of Secured
Term Loan Debt and/or Secured Swap Claim
Amount, as applicable, held by such Non-Electing
Secured Debtholder divided by the aggregate
principal amount of Secured Term Loan Debt
and/or Secured Swap Claim Amount, as applicable,
held by all Non-Electing Secured Debtholders) of
the Non-Elected EUR New Senior Secured Term
Loans, and (ii) any balance of its New Senior
Secured Term Loans to be issued to such Secured
Debtholder (if any) as USD New Senior Secured
Term Loans; provided that no such Secured
Debtholder shall receive in respect of its Secured
Term Loan Debt consideration in excess of (i)
93.3835% of the principal amount of its Secured
Term Loan Debt (for certainty, including the Cash
Pay-down and Secured Debtholder Early Consent
Cash Consideration, but not including the
Additional Cash Amount) if such Secured
Debtholder is an Early Consenting Secured
Debtholder, or (ii) 88.3835% of the principal
amount of its Secured Term Loan Debt (for
certainty, including the Cash Pay-down, but not
including the Additional Cash Amount) if such
Secured Debtholder is not an Early Consenting
Secured Debtholder; and
(iii) if after the foregoing elections, the EUR New
Senior Secured Term Loans are equal to or exceed
€300 million, then each Non-Electing Secured
Debtholder shall be deemed pursuant to the Plan to
have elected to receive its New Senior Secured
Term Loans in USD New Senior Secured Term
- 7 -
Loans in full.
Exchange of Unsecured
Debt and Extinguishment
of Unsecured Debtholder
Claims
On the Effective Date, all Obligations in respect of the Unsecured
Debt and the Unsecured Debt Documents (collectively the
“Unsecured Debtholder Claims”) as of the Effective Date shall
be irrevocably exchanged for:
(i) common shares of Concordia representing 7.97% of
the outstanding common shares of Concordia
immediately following the implementation of the
Recapitalization Transaction (subject to MIP
Dilution) (the “Unsecured Debt Exchange
Shares”);
(ii) any Reallocated Unsecured Shares (as defined
below); and
(iii) any Unsecured Debtholder Early Consent Shares
(as defined below) to which any Early Consenting
Unsecured Debtholders (as defined below) may
become entitled as provided for herein.
In full and final settlement of the Unsecured Debtholder Claims,
the complete satisfaction, release and discharge of all guarantees
pertaining to the Unsecured Debt, and the cancellation of the
Unsecured Debt Documents, each Unsecured Debtholder will
become entitled to and shall receive:
(A) its Pro-Rata Share of the Unsecured Debt Exchange
Shares;
(B) its Pro-Rata Share of any Reallocated Unsecured
Shares; and
(C) if such Unsecured Debtholder is an Early
Consenting Unsecured Debtholder, its Unsecured
Debtholder Early Consent Shares.
Determination of Claim
Amounts
The portions of the Secured Debtholder Claims and the Unsecured
Debtholder Claims comprised of outstanding and unpaid interest
shall be determined excluding any compound interest, and based
on the contractual non-default interest rate applicable under the
relevant Debt Documents and the outstanding principal amount of
the applicable Obligations (not reduced by any unamortized
original issue discount); provided that nothing in this Term Sheet
shall constitute a waiver of any Secured Debtholder’s right to
- 8 -
receive default rate interest: (i) to the extent that there has been a
payment default with respect to any scheduled payments of interest
(at contractual non-default rates) or amortization, as applicable,
under the Secured Debt, for certainty, without giving effect to any
acceleration under the Secured Debt that may have arisen from the
commencement of the CBCA Proceedings or an Alternative
Implementation Process, as applicable, or (ii) in the event that the
Recapitalization Transaction does not occur.
The principal amount of the Secured Debtholder Claims shall be
determined based on the principal amount of such Obligations,
reduced by any unamortized original issue discount and excluding
any make-whole premiums, redemption premiums or other similar
premiums. The amount of Secured Debtholder Claims
denominated in GBP shall be determined by converting the
amount in GBP to US dollars based on the applicable exchange
rate on the applicable date(s) as agreed by Concordia and the
Majority Initial Consenting Debtholders, each acting reasonably;
except that the Company shall have the right to elect, with the
consent of the Majority Initial Consenting Secured Debtholders, to
pay cash amounts that are to be paid to Secured Debtholders
pursuant to the Plan in respect of Secured Debtholder Claims
denominated in GBP in US dollars and/or GBP.
The amount of unamortized original issue discount in respect of
the Secured Debt shall be calculated on the basis as has been
agreed to by Concordia and the Majority Initial Consenting
Debtholders prior to the execution of the Support Agreement.
The total principal amount of Secured Debtholder Claims under
the Swap Agreement shall be USD$114,431,046 (the “Secured
Swap Claim Amount”), which amount shall apply for all
purposes in the CBCA Proceedings and any Alternative
Implementation Process.
Private Placement As part of the Recapitalization Transaction, certain parties
(collectively, the “Private Placement Parties”) shall enter into a
subscription agreement (the “Subscription Agreement”)
concurrently with the execution of the Support Agreement
pursuant to which the Private Placement Parties shall agree to
purchase, in the aggregate, new common shares of Concordia
equal to 87.69% of the outstanding common shares of Concordia
immediately following the implementation of the Recapitalization
Transaction (subject to MIP Dilution) (the “Private Placement
Shares”) in exchange for the aggregate amount of $586.5 million
- 9 -
pursuant to a private placement (the “Private Placement”).
The amount of the Private Placement that each Private Placement
Party agrees to subscribe for shall be set out in the Subscription
Agreement (collectively, the “Private Placement
Commitments”). As consideration for its Private Placement
Commitment pursuant to the Subscription Agreement, each Private
Placement Party shall earn upon the execution of the Subscription
Agreement cash consideration equal to its pro rata share (based on
its Private Placement Commitment) of $44 million (the “Private
Placement Commitment Consideration”), subject to the terms of
the Subscription Agreement. Within four (4) business days of the
execution of the Subscription Agreement, Concordia or one of its
subsidiaries shall fund an amount equal to the aggregate Private
Placement Commitment Consideration into escrow, subject to
terms and conditions acceptable to Concordia and the Majority
Consenting Private Placement Parties. The Private Placement
Commitment Consideration shall be payable to the Private
Placement Parties on such terms and conditions as agreed to by
Concordia and the Majority Consenting Private Placement Parties,
as provided for in the Subscription Agreement and/or in an escrow
agreement agreed to by Concordia and the Majority Consenting
Private Placement Parties.
The proceeds from the Private Placement shall be used as part of
the consideration for the exchange of the Secured Debtholder
Claims described under the section titled “Exchange of Secured
Debt and Extinguishment of Secured Debtholder Claims”. The
Private Placement will be implemented as part of the
Recapitalization Transaction pursuant to the Plan.
The Private Placement Parties shall not be entitled to assign their
Private Placement Commitments to any other entity or individual
without the prior written consent of Concordia and the Majority
Consenting Private Placement Parties. Notwithstanding the
foregoing, and subject to applicable securities laws, the Private
Placement Parties will be entitled to assign their Private Placement
Commitments to (a) any Affiliate, in such Private Placement
Party’s sole and absolute discretion, and (b) any other Private
Placement Party, subject to (i) providing prior written notice to
Concordia at least three (3) business days prior to any such
assignment and the Majority Consenting Private Placement Parties
consulting with Concordia with respect to applicable securities
law, stock exchange, regulatory and tax considerations, and after
such consultation (ii) the prior written consent of the Majority
- 10 -
Consenting Private Placement Parties, acting reasonably taking
into account any applicable securities law, stock exchange,
regulatory and tax matters; provided that no such assignments by
Private Placement Parties may be made in the period that is ten
(10) business days prior to the Effective Date.
In the event that the Subscription Agreement is terminated only
with respect to a Private Placement Party (but otherwise remains in
place with respect to the other parties), such Private Placement
Party’s Private Placement Commitment (and the corresponding
Private Placement Commitment Consideration) shall be
reallocated and/or reduced pursuant to the Subscription
Agreement.
The Private Placement Shares will be subject to a lock-up period
of six (6) months from the Effective Date unless otherwise agreed
by the Majority Consenting Private Placement Parties. The Private
Placement Parties may transfer the Private Placement Shares
during such lock-up period to one or more (i) Affiliates, in such
Private Placement Party’s sole and absolute discretion, and (ii)
other Private Placement Parties or Persons who had been
Consenting Debtholders prior to the Effective Date, subject to
providing prior written notice to Concordia at least three (3)
business days prior to any such assignment and consulting with
Concordia with respect to applicable securities law, stock
exchange, regulatory and tax considerations.
The Subscription Agreement and the terms therein shall be
acceptable to Concordia and the Majority Consenting Private
Placement Parties. The Private Placement shall be structured to
comply with applicable securities laws.
Early Consent
Consideration
Each Early Consenting Secured Debtholder shall be entitled to
receive, on the Effective Date pursuant to the Plan, additional cash
consideration equal to 5% of the principal amount (which shall be
calculated by reducing such principal amount by any unamortized
original issue discount and excluding any make-whole premiums,
redemption premiums or other similar premiums) of Secured Debt
held by such Early Consenting Secured Debtholder as of the
Record Date and voted in favour of the Plan (i) by the Early
Consent Date, or (ii) in the case of an Early Consenting Secured
Debtholder that is party to the Support Agreement (other than in
respect of any Secured Notes it does not hold in registered form),
by the voting deadline for the Plan (“Secured Debtholder Early
Consent Cash Consideration”) as additional consideration for its
Secured Debtholder Claims as described in the section titled
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“Exchange of Secured Debt and Extinguishment of Secured
Debtholder Claims”.
To the extent that the Secured Debtholder Early Consent Cash
Consideration that becomes payable under the Plan is less than
$100 million, an amount of cash equal to the difference between
$100 million and the aggregate amount of Secured Debtholder
Early Consent Cash Consideration that becomes payable under the
Plan (the “Additional Cash Amount”) shall be paid on a Pro-Rata
Basis to each Secured Debtholder on the Effective Date pursuant
to the Plan.
Each Early Consenting Unsecured Debtholder shall be entitled to
receive, on the Effective Date pursuant to the Plan, additional
consideration in the form of new common shares of Concordia
equal to its Pro-Rata Share of the Unsecured Debtholder Early
Consent Share Pool (the “Unsecured Debtholder Early Consent
Shares”, and together with the Secured Debtholder Early Consent
Cash Consideration, the “Early Consent Consideration”) as
additional consideration for its Unsecured Debtholder Claims. The
“Unsecured Debtholder Early Consent Share Pool” shall be
comprised of new common shares of Concordia equal to 3.99% of
the outstanding common shares of Concordia immediately
following the implementation of the Recapitalization Transaction
(subject to MIP Dilution). Any common shares from the
Unsecured Debtholder Early Consent Share Pool not issued as
Unsecured Debtholder Early Consent Shares (the “Reallocated
Unsecured Shares”) shall be issued to Unsecured Debtholders on
a Pro-Rata Basis as additional consideration for their Unsecured
Debtholder Claims as described in the section titled “Exchange of
Unsecured Debt and Extinguishment of Unsecured Debtholder
Claims”.
Dilution The Unsecured Debt Exchange Shares, Unsecured Debtholder
Early Consent Share Pool and Private Placement Shares shall be
subject to MIP Dilution. The Existing Shares to be retained by
Existing Shareholders shall be subject to MIP Dilution.
- 12 -
II. TREATMENT OF OTHER CLAIMS AND INTERESTS PURSUANT TO THE
RECAPITALIZATION TRANSACTION
Priority Claims All priority claims, if any, required to be satisfied in accordance
with applicable law shall be unaffected by the Recapitalization
Transaction and shall be paid or satisfied in the ordinary course.
Tax Claims Any claims on account of tax liabilities shall be unaffected by the
Recapitalization Transaction.
Employee Obligations All obligations to employees of the Company as of the Effective
Date (whether for salary, wages, retention payments pursuant to
retention agreements, benefits, severance or otherwise) shall be
unaffected by the Recapitalization Transaction, provided that
changes to employment arrangements necessary to reflect the new
Management Incentive Plan will be made.
Trade Debt The trade debt obligations of the Company shall be unaffected by
the Recapitalization Transaction and shall be paid or satisfied in
the ordinary course of business.
Existing Equity The holders of the Existing Shares shall retain their common
shares (subject to a share consolidation pursuant to the Plan),
which common shares which will represent 0.35% of the
outstanding common shares of Concordia immediately following
implementation of the Recapitalization Transaction (subject to
MIP Dilution).
III. IMPLEMENTATION OF RECAPITALIZATION TRANSACTION
Implementation Subject to the terms of the Support Agreement and this Term
Sheet, the Recapitalization Transaction shall be implemented
pursuant to the Plan in the CBCA Proceedings, and, as may be
determined by Concordia and the Majority Initial Consenting
Debtholders, each acting reasonably, recognized pursuant to
recognition proceedings in applicable jurisdictions.
Subject to the terms of the Support Agreement and this Term
Sheet, proceeding with the Recapitalization Transaction under the
CBCA Proceedings shall not prejudice or preclude the Company
from proceeding with the Recapitalization Transaction pursuant to
proceedings under the Companies’ Creditors Arrangement Act,
R.S.C. 1985, c. C- 36, as amended (“CCAA Proceedings”), to the
extent consented to by the Majority Initial Consenting Debtholders
and the Majority Consenting Private Placement Parties, or chapter
11 of the United States Bankruptcy Code, 11. U.S.C. §§ 101 et
- 13 -
seq. (“Chapter 11 Process”, and collectively with the CCAA
Proceedings, each an “Alternative Implementation Process”).
CBCA Timeline and
Conditions
The actions necessary to structure and implement the
Recapitalization Transaction pursuant to the Plan in the CBCA
Proceedings will be completed within the following timeline (or
such other dates as may be agreed by Concordia and the Majority
Initial Consenting Debtholders, each acting reasonably) and
subject to the following conditions (which may be waived or
amended as agreed by Concordia and the Majority Initial
Consenting Debtholders, each acting reasonably):
(a) the Support Agreement shall be executed by Concordia and
the Initial Consenting Debtholders on or prior to May 1,
2018;
(b) Concordia shall have obtained an interim order under the
CBCA containing, among other things, provisions for the
mailing of a CBCA information circular and the Plan, and
the calling and holding of necessary meetings of security
holders to vote on the Plan (the “Interim Order”) on or
prior to May 2, 2018, provided that the CBCA information
circular shall be in form and substance satisfactory to
Concordia and the Majority Initial Consenting Debtholders,
each acting reasonably;
(c) Concordia shall commence solicitation of the Plan on or
prior to May 30, 2018;
(d) the Plan shall have been approved by the requisite majority
of votes cast by Existing Shareholders, voting in person or
by proxy at the shareholders’ meeting held pursuant to the
Interim Order, as required pursuant to the Interim Order
(the “Shareholder Approval”), or the Ontario Court shall
approve the Plan pursuant to paragraph (e) below,
notwithstanding whether or not the Shareholder Approval
has been obtained, provided that such approval by the
Ontario Court does not result in (x) a change to the
economics of the Plan or the consideration payable to the
Secured Debtholders and the Unsecured Debtholders
pursuant to the Plan, or (y) the loss of Concordia’s listing
on the TSX or such other recognized securities exchange as
may be acceptable to Concordia and the Majority
Consenting Private Placement Parties;
(e) the Plan shall have been approved by the Ontario Court
- 14 -
pursuant to a final order acceptable to Concordia and the
Majority Initial Consenting Debtholders, each acting
reasonably (the “Final Order”) by no later than August 17,
2018, and the Final Order shall include the Existing Equity
Claims Relief or the Equity Claims relating to the period
prior to the Effective Date shall have otherwise been
addressed by no later than August 17, 2018 in a manner
satisfactory to Concordia and the Majority Consenting
Private Placement Parties, in their reasonable discretion
(paragraphs (d) and (e) collectively, the “CBCA
Conditions”); and
(f) the Recapitalization Transaction authorized pursuant to the
Plan shall have been implemented on or prior to September
30, 2018.
Concordia Newco Concordia shall have the right, with the prior written consent of
the Majority Initial Consenting Debtholders, as a step in the
implementation of the Recapitalization Transaction, to transfer its
assets and liabilities to a separate entity (“Concordia Newco”) and
Concordia Newco would be the entity that would implement the
Recapitalization Transaction on the terms hereof, including issuing
the New Common Shares (as defined below), pursuant to the Plan
and assume all of the rights and obligations of Concordia as part of
the Recapitalization Transaction.
IV. ALTERNATIVE IMPLEMENTATION PROCESS
Alternative
Implementation Process
If the CBCA Conditions are not satisfied pursuant to the terms of
the Support Agreement and this Term Sheet by August 17, 2018
(or such other date as may be agreed by Concordia and the
Majority Initial Consenting Debtholders, each acting reasonably),
or it is otherwise determined by Concordia, the Majority Initial
Consenting Debtholders and the Majority Consenting Private
Placement Parties that the Recapitalization Transaction shall not
be implemented pursuant to the Plan in the CBCA Proceedings for
any reason, then:
(a) to the extent that, within three (3) business days of the
CBCA Conditions not being satisfied, Concordia sends a
written notice to the Initial Consenting Debtholders
Advisors requesting that the Company implement the
Recapitalization Transaction through the CCAA
Proceedings and, within three (3) business days of receipt
of such request, the Majority Initial Consenting
Debtholders and the Majority Consenting Private
- 15 -
Placement Parties consent to such request, such consent
being in their sole and absolute discretion, then the
Company may elect to implement the Recapitalization
Transaction pursuant to CCAA Proceedings on the timeline
and terms set out in Schedule B hereto (the “CCAA
Timeline and Terms”) and the other terms set forth
herein; or
(b) the Company may elect to implement the Recapitalization
Transaction through the Chapter 11 Process on the timeline
and terms set out in Schedule C hereto (the “Chapter 11
Timeline and Terms”) and the other terms set forth
herein,
provided that, in the event the Company does not
implement the Plan (i) pursuant to the CCAA Proceedings,
after obtaining the consent of the Majority Initial
Consenting Debtholders and the Majority Consenting
Private Placement Parties, in accordance with the CCAA
Timeline and Terms, or (ii) pursuant to the Chapter 11
Process in accordance with the Chapter 11 Timeline and
Terms, as applicable, and subject to the terms of this Term
Sheet and the Support Agreement, the Support Agreement
shall automatically terminate.
The CBCA information circular shall include the pre-packaged
chapter 11 plan which shall be in form and substance satisfactory
to Concordia and the Majority Initial Consenting Debtholders,
each acting reasonably.
Concordia’s solicitation process shall include a solicitation of
binding votes in respect of the Plan for purposes of implementing
the Plan through the CBCA Proceedings, through the CCAA
Proceedings or through the Chapter 11 Process, in all respects
subject to the terms of this Term Sheet and the Support
Agreement. Any and all votes with respect to the Recapitalization
Transaction shall be binding to the extent the Company
implements the Recapitalization Transaction through the CBCA
Proceedings or the Chapter 11 Process in accordance with this
Term Sheet and the Support Agreement. Any and all such votes
shall not be binding to the extent the Company implements the
Recapitalization Transaction pursuant to the CCAA unless the
Majority Initial Consenting Debtholders and the Majority
Consenting Private Placement Parties have granted their prior
written consent in their sole and absolute discretion in accordance
with this Term Sheet and the Support Agreement. To the extent
- 16 -
the Support Agreement terminates in accordance with its terms,
then any and all such votes shall not be binding in any
restructuring and shall be deemed withdrawn.
Implementation pursuant
to an Alternative
Implementation Process
If the CBCA Conditions are not satisfied pursuant to the terms of
the Support Agreement and this Term Sheet by August 17, 2018
(or such other date as may be agreed by Concordia and the
Majority Initial Consenting Debtholders, acting reasonably), or it
is otherwise determined by Concordia, the Majority Initial
Consenting Debtholders and the Majority Consenting Private
Placement Parties that the Recapitalization Transaction shall not
be implemented pursuant to the Plan in the CBCA Proceedings for
any reason, and the Company elects to implement the Plan through
(i) the CCAA Proceedings, subject to the prior consent of the
Majority Initial Consenting Debtholders and the Majority
Consenting Private Placement Parties, in their sole and absolute
discretion, or (ii) the Chapter 11 Process, then, the Recapitalization
Transaction shall be implemented on the terms set forth herein, the
Support Agreement and the Subscription Agreement and in
accordance with the CCAA Timeline and Terms or the Chapter 11
Timeline and Terms, as applicable. In addition:
(a) the Recapitalization Transaction shall be implemented on
substantially the same terms as set forth herein, the Support
Agreement and the Subscription Agreement, with any
necessary amendments as the structure and implementation
of the Recapitalization Transaction may reasonably require
pursuant to an Alternative Implementation Process and as
may be acceptable to Concordia, the Majority Initial
Consenting Debtholders and the Majority Consenting
Private Placement Parties, each acting reasonably. Without
in any way limiting the generality of the foregoing, the
provisions in this Term Sheet pertaining to the Releases (as
defined below) shall be binding in connection with the
implementation of the Recapitalization Transaction
pursuant to an Alternative Implementation Process;
(b) (i) if the Majority Initial Consenting Debtholders and the
Majority Consenting Private Placement Parties have
agreed, in their sole and absolute discretion, to the
implementation of the Recapitalization Transaction
pursuant to CCAA Proceedings and the Company complies
with the CCAA Timeline and Terms, the Support
Agreement shall remain in full force and effect pursuant to
its terms, or (ii) if the Company commences the Chapter 11
- 17 -
Process and complies with the Chapter 11 Timeline and
Terms, the Support Agreement shall remain in full force
and effect pursuant to its terms; and
(c) Concordia and the Initial Consenting Debtholders and their
respective advisors shall work cooperatively in respect of
all matters necessary to structure and implement the
Recapitalization Transaction pursuant to the applicable
Alternative Implementation Process.
V. SUPPORT AGREEMENT
Support Agreement A support agreement containing terms and conditions of the
Recapitalization Transaction acceptable to Concordia and the
Initial Consenting Debtholders will be entered into with Concordia
by each of the Initial Consenting Debtholders and such other
Debtholders who sign such support agreement or a Joinder
Agreement (collectively, the “Support Agreement”).
VI. OTHER TERMS AND CONDITIONS OF THE RECAPITALIZATION
TRANSACTION
Termination Right Concordia and the Consenting Debtholders shall have the right to
terminate the Support Agreement (including, for certainty, any
Joinder Agreements) and to not proceed with the Recapitalization
Transaction upon the occurrence of any termination events agreed
to and included in the Support Agreement.
New Secured Revolver The Company shall be entitled to obtain, either in connection with
or following the implementation of the Recapitalization
Transaction, a secured first out revolver (the “New Secured
Revolver”), ranking senior in priority to the New Senior Secured
Debt, of up to the greater of (i) $150 million or (ii) 50% of LTM
EBITDA (pro forma for any acquisitions), with a total outstanding
principal amount not to exceed $250 million. The New Secured
Revolver shall have the benefit of substantially the same
guarantees and security as the New Senior Secured Debt. The
New Senior Secured Term Loan shall prohibit the use of the
proceeds of the New Secured Revolver to fund acquisitions.
The Company and the Majority Initial Consenting Secured
Debtholders will work in good faith to negotiate an intercreditor
agreement on standard terms in respect of the New Senior Secured
Debt and the New Secured Revolver.
- 18 -
CHCL Transaction As part of the Recapitalization Transaction and the Plan, CHCL
will transfer all or substantially all of its assets to Concordia in
consideration for a non-interest bearing promissory note issued by
Concordia in a principal amount equal to the value of the
transferred assets.
New Common Shares On the Effective Date, Concordia shall issue such aggregate
number of Unsecured Debt Exchange Shares, Reallocated
Unsecured Shares, Unsecured Debtholder Early Consent Shares,
and Private Placement Shares (collectively, the “New Common
Shares”) as shall be agreed upon by Concordia and the Majority
Consenting Private Placement Parties such that the total number of
outstanding common shares of Concordia as at the Effective Date
reflects the terms of this Term Sheet and is acceptable to
Concordia and the Majority Consenting Private Placement Parties,
each acting reasonably.
Consolidation of Existing
Shares
The Existing Shares (or the Existing Shares together with the New
Common Shares) may be consolidated (and any fractional shares
cancelled for no consideration) such that the total number of
outstanding common shares of Concordia as at the Effective Date
is acceptable to Concordia and the Majority Consenting Private
Placement Parties, each acting reasonably.
Fractional Securities No fractional securities will be issued. Any fractional securities
that would otherwise have been issued shall be rounded down to
the nearest whole number, with no additional consideration being
provided in respect of the rounding down of such fractional
securities.
Listing and Trading Concordia shall remain a Canadian public company following the
implementation of the Recapitalization Transaction and the
common shares of restructured Concordia (including the Existing
Shares and the New Common Shares) shall be listed for trading on
a recognized securities exchange.
Company Advisors Concordia shall pay the reasonable fees and expenses of the legal
and financial advisors to the Company pursuant to the terms and
conditions of applicable fee arrangements entered into by
Concordia with such advisors; provided that, such fees and
expenses shall be satisfactory to the Majority Consenting Private
Placement Parties, acting reasonably.
Debtholders’ Advisors Concordia shall pay in cash in full the reasonable fees and
expenses of the following legal and financial advisors: (a) the
Initial Consenting Secured Debtholders Advisors, and (b) the
- 19 -
Initial Consenting Unsecured Debtholders Advisors, in each case
pursuant to the terms and conditions of applicable fee
arrangements entered into by Concordia with such advisors in
connection with the Recapitalization Transaction.
Agent and Trustee Fees
and Expenses
Concordia shall pay in cash in full (i) the Agents’ Fees and
Expenses, (ii) the Trustees’ Fees and Expenses, (iii) the
reasonable and documented fees and expenses payable to the L/C
Issuers and Swing Line Lender (each as defined in the Secured
Term Loan Agreement) pursuant to the terms of the Secured Term
Loan Agreement, and (iv) the reasonable and documented fees,
expenses and disbursements of the Secured Swap Lender
(including, without limitation, the reasonable and documented
fees, expenses and disbursements of attorneys, advisors or agents
retained or utilized by the Secured Swap Lender, acting
reasonably).
Notwithstanding anything else to the contrary in this Term Sheet,
the Recapitalization Transactions shall not affect the rights of the
Secured Term Loan Agent or any L/C Issuer in respect of the Cash
Collateral Account (as defined in that certain Limited Consent,
dated as of April 16, 2018, by and among Concordia International
Corp., the Secured Term Loan Agent and the lenders party thereto)
or the funds held therein, unless otherwise agreed by the
Company, the Secured Term Loan Agent and the L/C Issuer for
the outstanding Letters of Credit (as defined in the Secured Term
Loan Agreement).
Releases There shall be usual and customary releases in connection with the
implementation of the Recapitalization Transaction to be effective
as of the Effective Date (the “Releases”) which shall, at a
minimum, provide that Concordia and its direct and indirect
subsidiaries, the Consenting Debtholders, the Agents, the Trustees
and the foregoing parties’ respective current and former directors,
officers, managers, partners, employees, auditors, financial
advisors, legal counsel and agents (the “Released Parties”) shall
be released and discharged from all present and future actions,
causes of action, damages, judgments, executions, obligations and
claims of any kind or nature whatsoever (other than liabilities or
claims attributable to any of such Released Parties’ gross
negligence, fraud or wilful misconduct as determined by the final,
non-appealable judgment of a court of competent jurisdiction)
arising on or prior to the Effective Date in connection with the
Debt, the Debt Documents, the Existing Equity, the Two Year
Equity Bridge Credit and Guaranty Agreement, the Equity
- 20 -
Unsecured Bridge Loan Settlement, the Support Agreement, the
Subscription Agreement, the Recapitalization Transaction, the
Plan, the CBCA Proceedings, any Alternative Implementation
Process, or the actions or transactions contemplated herein, or any
other actions or matters related directly or indirectly to the
foregoing, provided that the Released Parties shall not be released
from or in respect of any of their respective obligations under the
Support Agreement, the Subscription Agreement, the Plan or any
document ancillary to any of the foregoing.
Concordia shall have the right, subject to the prior written consent
of the Majority Initial Consenting Debtholders, to release other
parties pursuant to the Releases, provided that any such additional
Releases provide the Company with value, as acceptable to
Concordia and the Majority Initial Consenting Debtholders, each
acting reasonably.
Definitive Documentation The parties will work in good faith to negotiate, execute and
deliver definitive documentation (the “Definitive
Documentation”) necessary to implement the Recapitalization
Transaction in accordance with the terms set out in this Term
Sheet and in form and substance acceptable to Concordia and the
Majority Initial Consenting Debtholders, the Majority Initial
Consenting Secured Debtholders and the Majority Consenting
Private Placement Parties, as applicable, each acting reasonably.
At the request of any Initial Consenting Secured Debtholder,
acting reasonably, Concordia shall incorporate language to the
Plan or the Final Order to ensure that the exchange of the Secured
Debtholder Claims contemplated pursuant to the Recapitalization
Transaction and the Plan shall be deemed to be an amendment and
restatement of the Secured Debt Documents as part of the
completion of the Recapitalization Transaction in the CBCA
Proceedings.
Tax Considerations Subject to the terms hereof, the Recapitalization Transaction shall
be structured in a tax efficient manner for the Company, including
to preserve favourable tax attributes to the extent practicable,
which structure shall be acceptable to the Company, and
reasonably acceptable to the Majority Consenting Private
Placement Parties.
Management Incentive
Plan
The Recapitalization Transaction shall provide for a management
equity incentive plan (the “Management Incentive Plan”)
acceptable to Concordia and the Majority Initial Consenting
Debtholders. The Management Incentive Plan will permit the
- 21 -
granting of various types of equity awards, including stock
options, share appreciation rights, restricted shares, restricted share
units, deferred share units and other share-based awards as
determined by the board of directors of Concordia (or the
applicable compensation committee) following the Effective Date.
The aggregate number of common shares that may be issued
pursuant to the Management Incentive Plan shall not exceed 7.5%
of the common shares of Concordia outstanding upon
implementation of the Recapitalization Transaction. Awards
issuable under the Management Incentive Plan shall be determined
by the Board of Directors of Concordia (or the applicable
compensation committee) following the Effective Date.
Change of Control Any change of control or other termination provisions contained in
any material third party contracts with Concordia (for certainty,
not including employment agreements) that may result in the
termination of such material contract and/or a material payment by
Concordia to another party as a result of the completion of the
Recapitalization Transaction shall be addressed in a manner
acceptable to Concordia and the Majority Consenting Private
Placement Parties, each acting reasonably.
Governance Governance matters shall be agreed to by Concordia, acting
reasonably, and the Majority Consenting Private Placement Parties
as part of the Definitive Documentation.
D&O Indemnification
and Insurance
All existing directors and officers insurance coverage and
indemnification obligations shall be unaffected by the
Recapitalization Transaction and shall continue in effect pursuant
to their applicable terms, and shall not be cancelled, terminated or
amended in any manner that would decrease or eliminate the
benefit provided thereby to any officer, manager, or director.
Other Conditions and
Approvals
The Recapitalization Transaction shall be subject to approvals and
conditions as are agreed to and included in the Support Agreement
and other Definitive Documentation, including, without limitation,
those customary for transactions of this nature, including, without
limitation, court approval, applicable stakeholder approval as may
be determined by the applicable Court, and any applicable stock
exchange and other regulatory approvals, as applicable.
Public Announcements All public announcements in respect of the Recapitalization
Transaction shall be made solely by Concordia, provided that any
such public announcements shall be in form and substance
acceptable to Concordia and the Majority Initial Consenting
Debtholders, each acting reasonably, and provided further that
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nothing shall prevent a party from making public disclosure in
respect of the Recapitalization Transaction to the extent required
by applicable law, subject to any applicable confidentiality
agreement(s).
No Admission Nothing in this Term Sheet is or shall be deemed to be an
admission of any kind.
Currency All amounts in this Term Sheet are in U.S. dollars unless otherwise
stated.
Notices All notices, requests, consents and other communications
hereunder shall be contained in a written instrument and may be
delivered in person or sent by internationally-recognized overnight
courier or email.
VII. DEFINITIONS
Affiliate “Affiliate” means any related fund or account, subsidiary of same
fund manager, managed by same investment manager or affiliated
investment managers.
Agents “Agents” means, collectively, the Secured Term Loan Agent and
the Unsecured Equity Bridge Loan Agent.
Agents’ Fees and
Expenses
“Agents’ Fees and Expenses” means (i) the compensation, the
reasonable and documented fees, expenses and disbursements, and
the indemnity claims of the Secured Term Loan Agent, in each
case in accordance with the Secured Term Loan Agreement,
including without limitation, the reasonable and documented fees,
expenses and disbursements of attorneys, advisors or agents
retained or utilized by the Secured Term Loan Agent, acting
reasonably, whether prior to or after the public announcement of
the Recapitalization Transaction and prior to the Effective Date, in
each case in accordance with the Secured Term Loan Agreement,
and (ii) the compensation, the reasonable and documented fees,
expenses and disbursements, and the indemnity claims of the
Unsecured Equity Bridge Loan Agent, in each case in accordance
with the Unsecured Equity Bridge Loan Agreement, including
without limitation, the reasonable and documented fees, expenses
and disbursements of attorneys, advisors or agents retained or
utilized by the Unsecured Equity Bridge Loan Agent, acting
reasonably, whether prior to or after the public announcement of
the Recapitalization Transaction and prior to the Effective Date, in
each case in accordance with the Unsecured Equity Bridge Loan
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Agreement.
Bankruptcy Court “Bankruptcy Court” means the United States Bankruptcy Court
for the Southern District of New York.
Consenting Debtholders “Consenting Debtholders” means, collectively, the Consenting
Secured Debtholders and the Consenting Unsecured Debtholders.
Consenting Secured
Debtholders
“Consenting Secured Debtholders” means, collectively, the
Secured Debtholders that have executed and remain, at the
relevant time, subject to the Support Agreement or a Joinder
Agreement thereto.
Consenting Unsecured
Debtholders
“Consenting Unsecured Debtholders” means, collectively, the
Unsecured Debtholders that have executed and remain, at the
relevant time, subject to the Support Agreement or a Joinder
Agreement thereto.
Court “Court” means the Ontario Court or the Bankruptcy Court, as
applicable.
Debt “Debt” means, collectively, the Secured Debt and the Unsecured
Debt.
Debt Documents “Debt Documents” means, collectively, the Secured Debt
Documents and the Unsecured Debt Documents.
Debtholders “Debtholders” means, collectively, the Secured Debtholders and
the Unsecured Debtholders.
Early Consent Date “Early Consent Date” means June 6, 2018, or such later date as
Concordia may determine.
Early Consenting Secured
Debtholder
“Early Consenting Secured Debtholder” means a Secured
Debtholder that (i) executes the Support Agreement or a Joinder
Agreement prior to the Early Consent Date and complies with all
of its obligations under the Support Agreement in all material
respects (including for certainty, and without limitation, voting in
favour of the Plan prior to the voting deadline), other than a
beneficial Noteholder, or (ii) votes in favour of the Plan prior to
the Early Consent Date, or (iii) otherwise supports the Plan in a
manner satisfactory to Concordia and the Majority Initial
Consenting Debtholders.
Early Consenting
Unsecured Debtholder
“Early Consenting Unsecured Debtholder” means an Unsecured
Debtholder that (i) executes the Support Agreement or a Joinder
- 24 -
Agreement prior to the Early Consent Date and complies with all
of its obligations under the Support Agreement in all material
respects (including for certainty, and without limitation, voting in
favour of the Plan prior to the voting deadline), other than a
beneficial Noteholder, or (ii) votes in favour of the Plan prior to
the Early Consent Date, or (iii) otherwise supports the Plan in a
manner satisfactory to Concordia and the Majority Initial
Consenting Debtholders.
Equity Claim “Equity Claim” means an equity claim (as defined in section 2(1)
of the Companies’ Creditors Arrangement Act) in respect of
Concordia.
Equity Unsecured Bridge
Loan Settlement
“Equity Unsecured Bridge Loan Settlement” means the
settlement and termination of the Two Year Equity Bridge Credit
and Guaranty Agreement, as agreed to by Concordia and the
lenders party thereto.
EUR/USD Exchange Rate “EUR/USD Exchange Rate” means the U.S. Federal Reserve
daily U.S. Dollar to Euro exchange rate.
EUR New Senior Secured
Term Loans
“EUR New Senior Secured Term Loans” means New Senior
Secured Term Loans denominated in Euros.
Existing Equity “Existing Equity” means all Existing Shares and all options,
warrants, rights or similar instruments derived from, relating to, or
exercisable, convertible or exchangeable therefor.
Existing Equity Claims
Relief
“Existing Equity Claims Relief” means an order of the Ontario
Court, in form and substance satisfactory to Concordia and the
Majority Consenting Private Placement Parties, each acting
reasonably, that provides that from and after the Effective Date: (i)
any Person having an Existing Equity Class Action Claim against
Concordia or any of its current or former officers and/or directors
shall only be permitted to continue its Existing Equity Class
Action Claim to the point of determination of liability, if any, and
seeking the enforcement of any judgement solely as against the
Insurance Policies, to the extent available in respect of any such
Existing Equity Class Action Claim; (ii) any such Person shall be
irrevocably and forever limited solely to recovery from the
proceeds of the Insurance Policies payable on behalf of Concordia
or its directors and officers in respect of any such Existing Equity
Class Action Claim; (iii) any such Person shall have no right to,
and shall not, directly or indirectly, make any claim or seek any
recoveries from the Company (including its subsidiaries) or any of
their respective current or former officers and directors in respect
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of an Existing Equity Class Action Claim, other than enforcing
such Person’s rights to be paid by the applicable insurer(s) from
the proceeds of the applicable Insurance Policies; (iv) the
foregoing shall not prejudice, compromise, release or otherwise
affect any right or defence of any insurer in respect of an Insurance
Policy; and (v) all Equity Claims (including, for greater certainty,
all Equity Claims in respect of the Existing Shares arising on or
prior to the Effective Date) other than the Existing Equity Class
Action Claims and all Existing Equity other than the Existing
Shares shall be terminated, cancelled, released, dismissed and
enjoined pursuant to the Plan and the Final Order.
Existing Equity Class
Action Claims
“Existing Equity Class Action Claims” means, collectively, (i)
the claims asserted in the proceedings pending before the Ontario
Superior Court of Justice under the title Xxxxxx X. Xxxxxxxx and
Xxxxxxxxxx Xxxx v. Concordia International Corp., Xxxx Xxxxxxxx
and Xxxxxx Xx Xxxxxxxx (Court File No. CV-17-584809-00CP),
(ii) the claims asserted in the proceedings pending before the
Superior Court of Quebec under the title Xxxxxx Xxxxxx v.
Concordia International Corp., Xxxx Xxxxxxxx and Xxxxxx Xx
Xxxxxxxx (Court File No. 000-00-000000-000), (iii) the claims
asserted in the proceedings pending before the United States
District Court for the Southern District of New York under the title
Xxxxxx Xxxxx, individually and On Behalf of All Others
Similarly Situated v. Concordia International Corp., Xxxx
Xxxxxxxx and Xxxxxx Xx Xxxxxxxx (Court File No. 1:16-cv-
06467), and (iv) any claim for contribution or indemnity in respect
of or related to those claims listed in (i) to (iii) above
Existing Shareholders “Existing Shareholders” means holders of the Existing Shares.
Existing Shares “Existing Shares” means all existing common shares of
Concordia on the Effective Date immediately prior to the
implementation of the Recapitalization Transaction.
Existing Shares Dilution “Existing Shares Dilution” means dilution resulting from
Existing Shareholders retaining their Existing Shares pursuant to
the Plan, subject to the share consolidation pursuant to the Plan.
FX Date “FX Date” means the date that is ten (10) days prior to the
anticipated Effective Date, or such other date as may be agreed by
Concordia and the Majority Initial Consenting Debtholders.
Governmental Entity “Governmental Entity” means any government, regulatory
authority, governmental department, agency, commission, bureau,
official, minister, Crown corporation, court, board, tribunal or
- 26 -
dispute settlement panel or other law, rule or regulation-making
organization or entity: (i) having or purporting to have jurisdiction
on behalf of any nation, province, territory or state or any other
geographic or political subdivision of any of them; or (ii)
exercising, or entitled or purporting to exercise any administrative,
executive, judicial, legislative, policy, regulatory or taxing
authority or power.
Initial Consenting
Debtholders
“Initial Consenting Debtholders” means, collectively, the Initial
Consenting Secured Debtholders and the Initial Consenting
Unsecured Debtholders.
Initial Consenting
Debtholders Advisors
“Initial Consenting Debtholders Advisors” means, collectively,
the Initial Consenting Secured Debtholders Advisors and the
Initial Consenting Unsecured Debtholders Advisors.
Initial Consenting
Secured Debtholders
“Initial Consenting Secured Debtholders” means, collectively,
the Consenting Secured Debtholders that executed the Support
Agreement on May 1, 2018, which are represented by the Initial
Consenting Secured Debtholders Advisors as of May 1, 2018.
Initial Consenting
Secured Debtholders
Advisors
“Initial Consenting Secured Debtholders Advisors” means,
collectively, Osler, Xxxxxx & Harcourt LLP and White & Case
LLP, as legal advisors, Xxxxxxxx Xxxxx Capital, Inc., as financial
advisor, and Deloitte LLP, as tax advisor, to the Initial Consenting
Secured Debtholders.
Initial Consenting
Unsecured Debtholders
“Initial Consenting Unsecured Debtholders” means,
collectively, the Consenting Unsecured Debtholders that executed
the Support Agreement on May 1, 2018, which are represented by
the Initial Consenting Unsecured Debtholders Advisors as of May
1, 2018.
Initial Consenting
Unsecured Debtholders
Advisors
“Initial Consenting Unsecured Debtholders Advisors” means,
collectively, Xxxx, Xxxxx Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP,
Xxxxxxx Xxxxx LLP, and Ashurst LLP, as legal advisors, and
Xxxxxxxxx & Co., LLC, as financial advisor, to the Initial
Consenting Unsecured Debtholders.
Insurance Policies “Insurance Policies” means, collectively, the insurance policies of
Concordia that are available to pay insured claims in respect of
Concordia or its current or former directors and officers.
Joinder Agreement “Joinder Agreement” means a joinder agreement, the form of
which will be appended to the form of the Support Agreement,
pursuant to which a Secured Debtholder or Unsecured Debtholder
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agrees, among other things, to be bound by and subject to the
terms of the Support Agreement and thereby become a Consenting
Secured Debtholder or a Consenting Unsecured Debtholder, as
applicable.
Majority Consenting
Private Placement Parties
“Majority Consenting Private Placement Parties” means
Private Placement Parties holding in aggregate more than two-
thirds (66.67%) of the aggregate Private Placement Commitments
under the Subscription Agreement.
Majority Initial
Consenting Debtholders
“Majority Initial Consenting Debtholders” means, collectively,
(i) the Majority Initial Consenting Secured Debtholders, and
(ii) the Majority Initial Consenting Unsecured Debtholders.
Majority Initial
Consenting Secured
Debtholders
“Majority Initial Consenting Secured Debtholders” means
Initial Consenting Secured Debtholders holding in aggregate more
than half (50%) of the aggregate principal amount of Secured Debt
held by all Initial Consenting Secured Debtholders.
Majority Initial
Consenting Unsecured
Debtholders
“Majority Initial Consenting Unsecured Debtholders” means
Initial Consenting Unsecured Debtholders holding in aggregate
more than half (50%) of the aggregate principal amount of
Unsecured Debt held by all Initial Consenting Unsecured
Debtholders.
MIP Dilution “MIP Dilution” means dilution resulting from the issuance of any
common shares, options or other rights to acquire common shares
issued pursuant to the Management Incentive Plan.
New Senior Secured Debt
Aggregate Principal
Amount
“New Senior Secured Debt Aggregate Principal Amount”
means such principal amount of the New Senior Secured Debt that
shall result in Secured Debtholders receiving aggregate
consideration under the Plan in an amount equal to 93.3835% of
the principal amount of the Secured Debtholders Claims (for
certainty reduced by any unamortized original issue discount and
excluding any make-whole premiums, redemption premiums or
other similar premiums) taking into account the Cash Pay-down
and the Secured Debtholder Early Consent Cash Consideration
(but not taking into account any Additional Cash Amount), and
assuming as part of such calculation that Secured Debtholders that
are not Early Consenting Secured Debtholders receive the Secured
Debtholder Early Consent Cash Consideration that they would
have been entitled to under the Plan if they were Early Consenting
Secured Debtholders.
New Senior Secured “New Senior Secured Notes” means the new senior secured notes
- 28 -
Notes issued by Concordia on the Effective Date pursuant to the Plan
(which New Senior Secured Notes shall be issued pursuant to a
new secured notes indenture or, at the election of the Majority
Initial Consenting Secured Debtholders, pursuant to an amendment
and restatement of the Secured Notes Indenture). The New Senior
Secured Notes shall have the terms and conditions set out in
Schedule D-2 hereto, and/or such other terms and conditions as
may be agreed to by Concordia, the Majority Initial Consenting
Secured Debtholders and the Majority Consenting Private
Placement Parties, each acting reasonably; provided, however, that
such terms shall include limited covenants. The principal amount
of the New Senior Secured Notes shall not exceed $300 million
and the aggregate principal amount of the New Senior Secured
Notes and the New Senior Secured Term Loan shall collectively
be equal to the New Senior Secured Debt Aggregate Principal
Amount.
New Senior Secured
Term Loan
“New Senior Secured Term Loan” means the new senior secured
term loan issued by Concordia on the Effective Date pursuant to
the Plan (which New Senior Secured Term Loan shall be issued
pursuant to a new secured term loan agreement or, at the election
of the Majority Initial Consenting Secured Debtholders, pursuant
to an amendment and restatement of the Secured Term Loan
Agreement). The New Senior Secured Term Loan shall have the
terms and conditions set out in Schedule D-1 hereto, and/or such
other terms and conditions as may be agreed to by Concordia, the
Majority Initial Consenting Secured Debtholders and the Majority
Consenting Private Placement Parties, each acting reasonably;
provided, however, that such terms shall include limited
covenants. The aggregate principal amount of the New Senior
Secured Notes and the New Senior Secured Term Loan shall
collectively be equal to the New Senior Secured Debt Aggregate
Principal Amount.
Non-Elected EUR New
Senior Secured Term
Loans
“Non-Elected EUR New Senior Secured Term Loans” means, if
applicable, EUR New Senior Secured Term Loans in a principal
amount equal to €300 million less the Elected EUR New Senior
Secured Term Loan Amount.
Noteholder “Noteholder” means a holder of (i) 9.000% First Lien Senior
Secured Notes due 2022 issued under the Secured Notes Indenture,
(ii) 7.000% Senior Unsecured Notes due 2023 issued under the
7.000% Unsecured Notes Indenture, or (iii) 9.500% Senior
Unsecured Notes due 2022 issued under the 9.500% Unsecured
Notes Indenture, as applicable.
- 29 -
Obligations “Obligations” means all liabilities, duties and obligations,
including without limitation principal and interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise, and
any other liabilities, duties or obligations, whether direct or
indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in
connection with, the applicable Debt Document.
Person “Person” means an individual, a corporation, a partnership, a
limited liability company, a trust, an unincorporated association, a
Governmental Entity or any agency, instrumentality or political
subdivision of a Governmental Entity, or any other entity or body.
Preliminary Interim
Order
“Preliminary Interim Order” means the Preliminary Interim
Order granted by the Ontario Court on October 20, 2017 in the
CBCA Proceedings, as may be amended by the Ontario Court.
Pro-Rata Share and Pro-
Rata Basis
“Pro-Rata Share” and “Pro-Rata Basis” shall be determined as
follows:
(i) in respect of an Unsecured Debtholder, based on the
principal amount of Unsecured Debt, plus accrued
and unpaid interest thereon (calculated at the
contractual non-default rate), held by such
Unsecured Debtholder as at the Record Date,
divided by the aggregate principal amount of
Unsecured Debt, plus accrued and unpaid interest
thereon (calculated at the contractual non-default
rate), as at the Record Date;
(ii) in respect of a Secured Debtholder, based on the
principal amount of the applicable Secured Debt,
reduced by any unamortized original issue discount
and excluding any make-whole premiums,
redemption premiums or other similar premiums,
held by such Secured Debtholder as at the Record
Date, divided by the aggregate principal amount of
the applicable Secured Debt, reduced by any
unamortized original issue discount and excluding
any make-whole premiums, redemption premiums
or other similar premiums, as at the Record Date
(subject to converting Secured Debt denominated in
GBP to US dollars based on the applicable
exchange rate on the FX Date); and
(iii) in respect of an Early Consenting Unsecured
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Debtholder in respect of the Unsecured Debtholder
Early Consent Shares, based on the principal
amount of Unsecured Debt, plus accrued and
unpaid interest thereon (calculated at the
contractual non-default rate), held by such Early
Consenting Unsecured Debtholder as at the Record
Date and voted in favour of the Plan (i) by the Early
Consent Date, or (ii) in the case of an Early
Consenting Unsecured Debtholder that is party to
the Support Agreement (other than in respect of any
Unsecured Notes it does not hold in registered
form), by the voting deadline for the Plan, divided
by the aggregate principal amount of Unsecured
Debt, plus accrued and unpaid interest thereon
(calculated at the contractual non-default rate), as at
the Record Date.
Secured Debt “Secured Debt” means, collectively, the debt outstanding under
the Secured Debt Documents.
Secured Debt Documents “Secured Debt Documents” means, collectively: (i) the Secured
Term Loan Agreement; (ii) the Secured Notes Indenture; (iii) the
Swap Agreement; and (iv) all related documentation, including,
without limitation, all guarantee and security documentation,
related to the foregoing.
Secured Debtholders “Secured Debtholders” means, collectively, the holders of the
Secured Debt, in their capacity as such.
Secured Notes Indenture “Secured Notes Indenture” means the Indenture for 9.000% First
Lien Senior Secured Notes Due 2022 dated October 13, 2016 by
and among Concordia International Corp., the guarantors party
thereto, and the Secured Notes Trustee.
Secured Notes Trustee “Secured Notes Trustee” means U.S. Bank National Association,
as Trustee and as Collateral Agent under the Secured Notes
Indenture.
Secured Term Loan
Agent
“Secured Term Loan Agent” means Xxxxxxx Sachs Bank USA,
as Administrative Agent and Collateral Agent under the Secured
Term Loan Agreement.
Secured Term Loan
Agreement
“Secured Term Loan Agreement” means the Credit and
Guaranty Agreement dated October 21, 2015 by and among, inter
alia, Concordia International Corp. (f/k/a Concordia Healthcare
Corp.), the guarantors party thereto, Xxxxxxx Xxxxx Bank USA, as
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Administrative Agent and Collateral Agent, and the lenders and
the other parties thereto.
Subordinated Promissory
Note
“Subordinated Promissory Note” means the Non-Negotiable
Subordinated Secured Promissory Note made by Concordia
Healthcare Inc. in favor of Xxxxxxxxx Xxxxxxx, dated December 20,
2013.
“Secured Swap Lender” means Xxxxxxx Xxxxx International, the swap provider under the
Secured Swap Instruments, and any permitted assignee;
Swap Agreement “Swap Agreement” means, collectively, (i) the International
Swaps and Derivatives Association 2002 Master Agreement dated
as of August 15, 2016, between Xxxxxxx Sachs International and
Concordia Investments (Jersey) Limited (the “ISDA”); (ii) the
Swap Confirmations entered into as of August 17, 2016 and
November 8, 2016 between Xxxxxxx Xxxxx International and
Concordia Investments (Jersey) Limited in accordance with the
ISDA; and (iii) the Settlement Agreement entered into as of
November 25, 2017 between Xxxxxxx Sachs International and
Concordia.
Trustees “Trustees” means, collectively, the Secured Notes Trustee and the
Unsecured Notes Trustees.
Trustees’ Fees and
Expenses
“Trustees’ Fees and Expenses” means the compensation, the
reasonable and documented fees, expenses and disbursements, and
the indemnity claims of the Trustees, in each case in accordance
with, as applicable, the Secured Notes Indenture, the 7.000%
Unsecured Notes Indenture or the 9.500% Unsecured Notes
Indenture, including without limitation, the reasonable and
documented fees, expenses and disbursements of attorneys,
advisors or agents retained or utilized by the Trustees, acting
reasonably, whether prior to or after the public announcement of
the Recapitalization Transaction and prior to the Effective Date, in
each case in accordance with, as applicable, the Secured Notes
Indenture, the 7.000% Unsecured Notes Indenture or the 9.500%
Unsecured Notes Indenture.
TSX “TSX” means the Toronto Stock Exchange.
Two Year Equity Bridge
Credit and Guaranty
Agreement
“Two Year Equity Bridge Credit and Guaranty Agreement”
means the Two Year Equity Bridge Credit and Guaranty
Agreement dated October 21, 2015 by and among, inter alia,
Concordia International Corp. (f/k/a Concordia Healthcare Corp.),
the guarantors party thereto, the administrative agent, and the
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lenders from time to time party thereto.
Unsecured Debt “Unsecured Debt” means, collectively, the debt outstanding under
the Unsecured Debt Documents.
Unsecured Debt
Documents
“Unsecured Debt Documents” means, collectively: (i) the
Indenture for 7.000% Senior Unsecured Notes Due 2023 dated
April 21, 2015 by and among Concordia International Corp. (f/k/a
Concordia Healthcare Corp.), the guarantors party thereto, and
U.S. Bank National Association, as Trustee (the “7.000%
Unsecured Notes Indenture”); (ii) the Indenture for 9.500%
Senior Unsecured Notes Due 2022 dated October 21, 2015 by and
among Concordia International Corp. (f/k/a Concordia Healthcare
Corp.), the guarantors party thereto, and U.S. Bank National
Association, as Trustee (the “9.500% Unsecured Notes
Indenture”); (iii) the Extended Equity Bridge Credit and Guaranty
Agreement dated October 21, 2015 by and among, inter alia,
Concordia International Corp. (f/k/a Concordia Healthcare Corp.),
the guarantors party thereto, Wilmington Trust, National
Association, as Administrative Agent, and the lenders party
thereto; (iv) the Subordinated Promissory Note; and (v) all related
documentation, including, without limitation, all guarantee
documentation, related to the foregoing; provided that Concordia
may elect to exclude the Subordinated Promissory Note from the
Unsecured Debt Documents and address the Subordinated
Promissory Note in a manner acceptable to Concordia and the
Majority Consenting Private Placement Parties.
Unsecured Debtholders “Unsecured Debtholders” means, collectively, the holders of the
Unsecured Debt, in their capacity as such.
Unsecured Equity Bridge
Loan Agent
“Unsecured Equity Bridge Loan Agent” means Wilmington
Trust, National Association, as Administrative Agent under the
Unsecured Equity Bridge Loan Agreement.
Unsecured Equity Bridge
Loan Agreement
“Unsecured Equity Bridge Loan Agreement” means the
Extended Equity Bridge Credit and Guaranty Agreement dated
October 21, 2015 by and among, inter alia, Concordia, the
guarantors party thereto, the Unsecured Equity Bridge Loan
Agent, and the lenders party thereto.
Unsecured Notes Trustees “Unsecured Notes Trustees” means, collectively, (i) U.S. Bank
National Association, in its capacity as trustee under the 7.000%
Unsecured Notes Indenture, and (ii) U.S. Bank National
Association, in its capacity as trustee under the 9.500% Unsecured
- 33 -
Notes Indenture.
USD New Senior Secured
Term Loans
“USD New Senior Secured Term Loans” means New Senior
Secured Term Loans denominated in U.S. dollars.
Schedule A
List of Subsidiary Guarantors of Concordia International Corp.
Concordia Investments (Jersey) Limited
Concordia Financing (Jersey) Limited
Concordia Pharmaceuticals Inc., S.a X.X
Concordia Laboratories Inc., S.a X.X
Amdipharm Holdings S.A X.X
Amdipharm AG
Amdipharm B.V.
Amdipharm Limited
Amdipharm Mercury Holdco UK Limited
Amdipharm Mercury UK Ltd
Concordia Holdings (Jersey) Limited
Amdipharm Mercury International Limited
Concordia Investment Holdings (UK) Limited
Mercury Pharma Group Limited
Concordia International Rx (UK) Limited
Abcur AB
Mercury Pharmaceuticals Limited
Focus Pharma Holdings Limited
Focus Pharmaceuticals Limited
Mercury Pharma (Generics) Limited
Mercury Pharmaceuticals (Ireland) Limited
Mercury Pharma International Limited
Schedule B
CCAA Timeline and Terms
1. To the extent the Majority Initial Consenting Debtholders and the Majority Consenting
Private Placement Parties, in their absolute and sole discretion, have consented to the
implementation of the Recapitalization Transaction through the CCAA Proceedings, then
the actions necessary to structure and implement the Recapitalization Transaction
pursuant to the Plan in CCAA Proceedings will be completed on or by such dates agreed
to by Concordia and the Majority Initial Consenting Debtholders:
(a) Concordia shall commence the CCAA Proceedings and obtain an initial order in form
acceptable to Concordia and the Majority Initial Consenting Debtholders, each acting
reasonably;
(b) the Ontario Court shall approve the Plan pursuant to a sanction order in form acceptable
to the Majority Initial Consenting Debtholders and the Majority Consenting Private
Placement Parties, in their sole and absolute discretion; and
(c) the Effective Date shall have occurred on or prior to a date agreed to by the Majority
Initial Consenting Debtholders and the Majority Consenting Private Placement Parties, in
their sole and absolute discretion.
2. The Recapitalization Transaction to be implemented pursuant to the Plan in CCAA
Proceedings may be modified as agreed by the Company and the Majority Initial
Consenting Debtholders.
Schedule C
Chapter 11 Timeline and Terms
1. The actions necessary to structure and implement the Recapitalization Transaction
pursuant to the Plan in a Chapter 11 Process will be completed within the following
timeline (or such other dates as may be agreed by Concordia and the Majority Initial
Consenting Debtholders, each acting reasonably):
(a) Concordia shall commence the Chapter 11 Process with the Bankruptcy Court by August
31, 2018 (the “Petition Date”);
(b) Concordia shall file the disclosure statement for the Plan (the “Disclosure Statement”)
and the Plan, in forms acceptable to Concordia and the Majority Initial Consenting
Debtholders, each acting reasonably, on the Petition Date;
(c) Concordia shall obtain an entry of an interim order by the Bankruptcy Court authorizing
it to use cash collateral within five (5) days of the Petition Date, which shall contain
customary stipulations between Concordia and the Secured Debtholders with respect to
the Secured Debt and the following adequate protection provisions:
(i) the current payment during the Chapter 11 Process of the reasonable fees and
expenses of the Initial Consenting Secured Debtholders Advisors pursuant to the
terms and conditions of applicable fee arrangements entered into by Concordia
with such advisors;
(ii) the current payment of all reasonable and documented fees, expenses, indemnities
and other amounts owing to the Secured Term Loan Agent including, without
limitation, the current payment of all reasonable and documented professional
fees and expenses owing to the Secured Term Loan Agent pursuant to Section
10.5 of the Secured Term Loan Agreement;
(iii) the reasonable and documented fees, expenses and disbursements of the Secured
Swap Lender (including, without limitation, the reasonable and documented fees,
expenses and disbursements of attorneys, advisors or agents retained or utilized
by the Secured Swap Lender, acting reasonably);
(iv) customary superpriority claims and liens in favor of the secured parties under the
Secured Debt Documents;
(v) continued satisfaction on a timely basis of all reporting obligations under the
Secured Term Loan Agreement, unless otherwise agreed to by the Secured Term
Loan Agent and the Company;
(vi) unless otherwise agreed to by the Majority Initial Consenting Unsecured
Debtholders, the current payment during the Chapter 11 Process of the reasonable
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fees and expenses of the Initial Consenting Unsecured Debtholders Advisors in
their capacity as advisors to certain Consenting Debtholders holding Secured
Debt; and
(vii) cash payments to the holders of Secured Debt (which payments Concordia shall
pay on a monthly basis) in an amount equal to the sum of (a) current non-default
interest or default interest accruing under the applicable governing documents, as
applicable, determined in accordance with the section titled “Determination of
Claim Amounts”; provided, however, that any payment of interest on a current
basis during the Chapter 11 Process shall be subject to recharacterization as
payments of principal to the extent of entry of a court order finding the holders of
Secured Debt to be undersecured, plus (b) any fees and expenses accruing in
respect of any Letters of Credit (as defined in the Secured Term Loan
Agreement).
(d) Concordia shall obtain an entry of a final order by the Bankruptcy Court authorizing it to
use cash collateral within forty five (45) days of the Petition Date, which shall contain the
adequate protection provisions substantially similar to those in the interim order;
provided that with respect to the clauses (c) and (d) hereof, to the extent any deadline set
forth in Schedule C is extended, (i) the Company may seek to enter into debtor-in-
possession financing that is on terms reasonably acceptable to the Company and the
Majority Initial Consenting Debtholders, each acting reasonably and (ii) the Majority
Initial Consenting Debtholders may, acting reasonably, request modifications to the
adequate protection set forth in either the interim or final order authorizing the use of
cash collateral; provided further, that in the event the Recapitalization Transaction does
not occur, the Secured Debtholders and Unsecured Debtholders reserve all rights with
respect to (i) the Company’s ability to enter into debtor-in-possession financing and (ii)
any adequate protection in connection with the use of cash collateral and/or debtor-in-
possession financing;
(e) Concordia shall obtain entry of an order by the Bankruptcy Court approving the
Disclosure Statement and confirming the Plan on or prior to the date that is 60 days after
the Petition Date; and
(f) the Effective Date shall have occurred on or prior to the date that is 90 days after the
Petition Date.
2. The Recapitalization Transaction to be implemented pursuant to the Plan in a Chapter 11
Process shall be modified as follows (and as further agreed by the Company and the
Majority Initial Consenting Debtholders):
(a) In full and final settlement of the Secured Debtholder Claims, the complete satisfaction,
release and discharge of all guarantees and security pertaining to the Secured Debt, and
the cancellation of the Secured Debt Documents, each Secured Debtholder will become
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entitled to and shall receive on the Effective Date: (i) payment in full, in cash, of post-
petition interest at the non-default rate or default rate, as applicable under the section
titled “Determination of Claim Amounts”, in respect of the Secured Debt held by such
Secured Debtholder, (ii) its Pro-Rata Share of the Cash Pay-down; (iii) its Pro-Rata Share
of the New Senior Secured Debt, in the form of the New Senior Secured Term Loan
and/or the New Senior Secured Notes, subject to the allocations set out in the Term
Sheet, and (iv) cash consideration equal to 5% of the principal amount (which shall be
calculated by reducing such principal amount by any unamortized original issue discount
and excluding any make-whole premiums, redemption premiums or other similar
premiums) of Secured Debt held by such Secured Debtholder. For certainty, the
aggregate amount of consideration payable to Secured Debtholders under the Plan shall
equal 93.3835% of the principal amount of such Secured Debtholders’ Secured
Debtholders Claims (for certainty reduced by any unamortized original issue discount
and excluding any make-whole premiums, redemption premiums or other similar
premiums and not taking into account consideration pursuant to Section 2(d) of this
Schedule C).
(b) In full and final settlement of the Unsecured Debtholder Claims, the complete
satisfaction, release and discharge of all guarantees pertaining to the Unsecured Debt, and
the cancellation of the Unsecured Debt Documents, each Unsecured Debtholder will
become entitled to and shall receive on the Effective Date its Pro Rata Share of common
shares of Concordia representing 12% of the outstanding common shares of Concordia
immediately following the implementation of the Recapitalization Transaction (subject to
MIP Dilution and any Existing Shares Dilution or dilution resulting from the issuance of
common shares to Secured Debtholders in accordance with Section 2(d) of this Schedule
C, as applicable).
(c) Concordia and the Majority Consenting Private Placement Parties may elect to exclude
the Subordinated Promissory Note from the Unsecured Debt Documents and address the
Subordinated Promissory Note in a manner acceptable to Concordia and the Majority
Consenting Private Placement Parties.
(d) Unless otherwise agreed by the Majority Consenting Private Placement Parties, all
Existing Shares shall be cancelled without any consideration therefor. Unless otherwise
agreed by the Majority Consenting Private Placement Parties, each Secured Debtholder
shall receive its Pro-Rata Share of such number of common shares of Concordia as
determined by the Majority Consenting Private Placement Parties, acting reasonably,
which shall in no case exceed 0.35% of the amount of outstanding common shares of
Concordia immediately following implementation of the Recapitalization Transaction
(subject to MIP Dilution).
(e) The definition of “Equity Claim” shall mean any ‘equity security’ as defined in section
101(16) of the Bankruptcy Code.
(f) The Additional Cash Amount shall not be payable in the Chapter 11 Process.
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(g) Unless otherwise agreed by Concordia and the Majority Consenting Private Placement
Parties, the Private Placement Parties shall not be entitled to apply the cash consideration
amounts set out in sub-sections 2(a)(ii) and (iv) towards their Private Placement
Commitments.
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 1
SCHEDULE D-1
NEW SENIOR SECURED TERM FACILITY
SUMMARY OF TERMS AND CONDITIONS
Set forth below is a summary of the principal terms and conditions for the New Senior Secured
Term Facility. Capitalized terms used but not otherwise defined herein shall have the meanings assigned
to such terms in the Term Sheet for the Recapitalization Transaction (the “Recapitalization Transaction
Term Sheet”) to which this Schedule D-1 is attached or on Schedule D-2 (including the Annexes hereto
and thereto) attached thereto.
PARTIES
Borrower: Concordia International Corp. (in such capacity, the “Borrower”).
Guarantors: Same as the Existing Credit Agreement (as defined below), with all
obligations of the Borrower under the New Senior Secured Term
Facility and, at the Borrower’s option, under any currency, interest
rate protection or other hedging agreement (other than Excluded
Swap Obligations (as defined below)) (a “Secured Hedging
Agreement”) and any cash management arrangement (a “Secured
Cash Management Arrangement”), in each case entered into with a
New Senior Secured Term Lender (as defined below) and/or the
Administrative Agent (as defined below) or any person that is an
affiliate of a New Senior Secured Term Lender and/or the
Administrative Agent at the time the relevant transaction is entered
into (collectively, the “Borrower Obligations”) will be
unconditionally guaranteed on a senior basis (a “Guaranty”) by each
of the Borrower’s wholly-owned Restricted Subsidiaries other than
(a) Unrestricted Subsidiaries (as defined below), (b) immaterial
subsidiaries subject to thresholds to be consistent with the Existing
Credit Agreement (“Immaterial Subsidiaries”), (c) any not-for-profit
subsidiary, captive insurance subsidiary and/or special purpose
entity used for permitted securitization facilities, if any, (d) any
subsidiary to the extent that the burden or cost of providing such
Guaranty outweighs the benefit afforded thereby as reasonably
determined by the Administrative Agent and the Borrower, (e) any
subsidiary acquired by the Borrower that, at the time of the relevant
acquisition, is an obligor in respect of assumed indebtedness
permitted by the Term Loan Definitive Documentation to the extent
(and for so long as) the documentation governing the applicable
assumed indebtedness prohibits such subsidiary from providing a
Guaranty; provided that the relevant restriction was not entered into
in contemplation of the relevant acquisition, (f) any Subsidiary the
provision of a Guaranty by which would result in material adverse
tax consequences as determined by the Borrower in consultation
with the Administrative Agent and/or (g) any subsidiary that is
prohibited by applicable law, rule, regulation or contract from
providing a Guaranty or which would require governmental
(including regulatory) consent, approval, license or authorization to
provide a Guaranty (unless such consent, approval, license or
authorization has been received) (collectively, the “Guarantors”; the
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 2
Borrowers and the Guarantors, collectively, the “Loan Parties”).
For purposes of the Term Loan Definitive Documentation, (a)
“Restricted Subsidiary” means any existing or future direct or
indirect subsidiary of the Borrower other than any Unrestricted
Subsidiary (as defined below), and (b) “Excluded Swap Obligation”
means any obligation under any Secured Hedging Agreement if and
to the extent that all or a portion of the Guaranty of the relevant
Guarantor, or the grant by the relevant Guarantor of a security
interest to secure such obligation is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the
Commodity Futures Trading Commission (or the application or
official interpretation of any thereof) by virtue of the relevant
Guarantor’s failure to constitute an “eligible contract participant” as
defined in the Commodity Exchange Act and the regulations
thereunder at the time the relevant Guaranty or security interest
becomes effective.
Notwithstanding the foregoing, any Restricted Subsidiary of the
Borrower that is not otherwise required to provide a Guaranty and
domiciled in an Acceptable Guarantor Jurisdiction (as defined
below) (or any other jurisdiction as agreed by the Administrative
Agent and the Required Lenders) may elect to provide a Guaranty
and become a Guarantor and a Loan Party for all purposes under the
Term Loan Definitive Documentation (any such Restricted
Subsidiary, a “Discretionary Guarantor”), subject to the provision of
any information reasonably requested by the Administrative Agent
for purposes of its ongoing compliance obligations under applicable
“know your customer” rules and regulations, including the
PATRIOT Act, and the execution and delivery of all applicable
Term Loan Definitive Documentation.
Administrative Agent and
Collateral Agent:
[●] will act as the sole and exclusive administrative agent and
collateral agent for the New Senior Secured Term Lenders (as
defined below) (in such capacities, the “Administrative Agent”).
New Senior Secured Term Loan
Lenders:
Secured Debtholders which receive New Senior Secured Term
Loans in connection with the Recapitalization Transaction
(collectively, and together with any person that becomes a lender by
assignment as set forth under the heading “Assignments and
Participations” below, the “New Senior Secured Term Lenders”).
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 3
TYPE AND AMOUNT OF NEW SENIOR SECURED TERM FACILITY
New Senior Secured Term
Facility:
Type and Amount: A New Senior Secured Term facility (the “New Senior Secured
Term Facility”) in an aggregate principal amount to be determined
based on mechanisms in the Recapitalization Transaction Term
Sheet, including adjustments outlined therein (the loans thereunder,
the “New Senior Secured Term Loans”), which shall be issued or
distributed in connection with the Recapitalization Transaction on
the Closing Date.
Repayments and prepayments of the New Senior Secured Term
Loans may not be re-borrowed.
Maturity: The New Senior Secured Term Loans will mature on the date which
is 6 years following the Closing Date (the “New Senior Secured
Term Loan Maturity Date”)
Amortization: Commencing on the last day of the first full fiscal quarter ending
after the Closing Date, the New Senior Secured Term Loans will be
repayable in equal quarterly installments of 2.00% per annum of the
original principal amount of the New Senior Secured Term Loans.
New Senior Secured Incremental
Term Facility:
The Borrower will have the right, from time to time, on one or more
occasions, to add one or more incremental term facilities and/or
increase the New Senior Secured Term Facility (each, a “New
Senior Secured Incremental Term Facility”) on terms and conditions
agreed by the Borrower and the relevant New Senior Secured
Incremental Term Facility lenders in an aggregate outstanding
principal amount not to exceed an unlimited amount so long as, after
giving effect to the relevant New Senior Secured Incremental Term
Facility, (1) if such New Senior Secured Incremental Term Facility
is secured by a lien on the Collateral that is pari passu with the lien
on the Collateral securing the New Senior Secured Term Facility, the
Secured Net Leverage Ratio (as defined below) does not exceed
5.00:1.00 or (2) if such New Senior Secured Incremental Term
Facility is secured by a lien that is junior to the lien on the Collateral
securing New Senior Secured Term Facility, is secured by a lien on
assets other than the Collateral or is unsecured, the Total Net
Leverage Ratio (as defined below) does not exceed 6.50:1.00, in
each case, calculated on a pro forma basis, including the application
of the proceeds thereof (without “netting” the cash proceeds of the
applicable New Senior Secured Incremental Term Facility to the
Borrower); provided, that, at the time of the addition thereof:
(i) No default or event of default exists or shall exist after
giving effect to such New Senior Secured Incremental
Term Facility; provided that if the primary purpose of
proceeds of such loans incurred under the New Senior
Secured Incremental Term Facility is to finance a
Limited Condition Transaction (as defined below) then
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 4
the foregoing shall be limited to no default or event of
default on the date of signing the definitive
documentation for such transaction and no payment or
bankruptcy default on the date of incurrence;
(ii) any New Senior Secured Incremental Term Facility
will have a final maturity date no earlier than the then-
existing New Senior Secured Term Loan Maturity
Date;
(iii) the weighted average life to maturity applicable to
each New Senior Secured Incremental Term Facility
shall not be shorter than the weighted average life to
maturity of the then-existing New Senior Secured
Term Facility;
(iv) the interest rate applicable to any New Senior Secured
Incremental Term Facility will be determined by the
Borrower and the lenders providing such New Senior
Secured Incremental Term Facility and, in the case of
any New Senior Secured Incremental Term Facility
that is pari passu with the New Senior Secured Term
Loans funded on the Closing Date (the “New Senior
Secured Term Loans”) in right of payment and with
respect to security, such interest rate will not be more
than 0.50% higher than the corresponding interest rate
applicable to the New Senior Secured Term Loans
unless the interest rate margin with respect to the New
Senior Secured Term Loans is adjusted to be equal to
the interest rate with respect to the relevant New
Senior Secured Incremental Term Facility, minus,
0.50%; provided that this clause (iv) shall only be
effective until the date that is 48 months after the
Closing Date; provided, further, that in determining
the applicable interest rate: (A) underwriting, OID,
commitment or upfront fees or similar fees paid by the
Borrower in connection with such New Senior Secured
Incremental Term Facility or the New Senior Secured
Term Loans payable by the Borrower generally to all
of the lenders of such incremental indebtedness (based
on a 4-year average life to maturity) shall be included,
(B) any amendment to the Applicable Margin on the
New Senior Secured Term Loans that became effective
after the Closing Date but prior to the time of the
addition of such New Senior Secured Incremental
Term Facility shall be included, (C) if the New Senior
Secured Term Loans or such New Senior Secured
Incremental Term Facility includes any “LIBOR”,
“EURIBOR” or “ABR” interest rate floor, and the
Published LIBO Rate or ABR on the applicable date of
determination is less than such “LIBOR”,
“EURIBOR” or ABR interest rate floor, the resulting
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 5
difference will be equated to interest margin for
purposes of this clause (iii) (this clause (iii), the “MFN
Provision”);
(v) any New Senior Secured Incremental Term Facility
(A) may rank pari passu or junior in right of payment
and pari passu or junior with respect to security with
the other New Senior Secured Term Facility or may be
unsecured (subject, as applicable, to the Intercreditor
Agreement or an intercreditor agreement the terms of
which are reasonably satisfactory to the Administrative
Agent (any such intercreditor arrangements,
“Acceptable Intercreditor Arrangements”)), (B) if
secured, may not be secured by any assets other than
Collateral and (C) if guaranteed, may not be
guaranteed by any person which is not a Loan Party;
(vi) except as otherwise provided above (including with
respect to margin, pricing, maturity and/or fees), the
terms of any New Senior Secured Incremental Term
Facility, if not substantially consistent with the terms
of the New Senior Secured Term Facility, shall be
reasonably satisfactory to the Administrative Agent (it
being understood that (A) any New Senior Secured
Incremental Term Facility that is pari passu with the
New Senior Secured Term Facility in right of payment
and with respect to security shall share ratably in any
prepayment in respect of the New Senior Secured
Term Facility unless the Borrower and the lenders in
respect of such New Senior Secured Incremental Term
Facility elect lesser payments and (B) the terms of any
New Senior Secured Incremental Term Facility shall
not be more favourable to the lenders in respect of
such New Senior Secured Incremental Term Facility in
any respect (including through the addition of a
financial covenant) unless such terms only apply after
the termination of the New Senior Secured Term
Facility or the Term Loan Definitive Documentation is
amended such that the New Senior Secured Term
Lenders receive the benefit of the more favourable
terms);
(vii) any New Senior Secured Incremental Term Facility
that is an increase in loans under an existing tranche of
New Senior Secured Term Loans shall be on the same
terms (including maturity date and interest rates) and
pursuant to the same documentation (other than the
amendment evidencing such New Senior Secured
Incremental Term Facility) applicable to such tranche
of New Senior Secured Term Loans; and
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 6
(viii) any New Senior Secured Incremental Term Facility
incurred prior to January 1, 2019 may only be incurred
to finance Permitted Acquisitions (as defined below).
Any New Senior Secured Incremental Term Facility may be
provided by existing New Senior Secured Term Lenders or, subject
to the reasonable consent of the Administrative Agent (not to be
unreasonably withheld, conditioned or delayed), other persons who
become New Senior Secured Term Lenders in connection therewith
if such consent would be required under the heading “Assignments
and Participations” below for assignments or participations of New
Senior Secured Term Loans or commitments, as applicable, to the
relevant person; provided, that (a) no existing New Senior Secured
Term Lender will be obligated to provide any such New Senior
Secured Incremental Term Facility and (b) the ability of any
Affiliated Lender (as defined below) to provide any part of any New
Senior Secured Incremental Term Facility will be subject to the
relevant restrictions applicable to Affiliated Lenders described under
the heading “Assignments and Participations” below.
The proceeds of any New Senior Secured Incremental Term Facility
may be used by the Borrower and its subsidiaries for working capital
and other general corporate purposes, including the financing of
Permitted Acquisitions and other investments and any other use not
prohibited by the Term Loan Definitive Documentation.
To the extent the proceeds of any New Senior Secured Incremental
Term Facility are intended to be applied to finance an acquisition
that is permitted under the Term Loan Definitive Documentation, the
availability thereof shall, if agreed by the lenders providing such
New Senior Secured Incremental Term Facility, be subject to
customary “SunGard” or other applicable “certain funds”
conditionality provisions, subject to clause (i) above.
As used herein, (a) “Secured Net Leverage Ratio” will be defined, as
of any date of determination, as the ratio of (i) Consolidated Total
Debt that is secured by the Collateral on a pari passu basis, net of
unrestricted cash and cash equivalents of the Borrower and its
Restricted Subsidiaries in excess of the Base Amount (as defined
below) on such date of determination, to (ii) Consolidated Adjusted
EBITDA and (b) “Total Net Leverage Ratio” will be defined, as of
any date of determination, as the ratio of (i) Consolidated Total
Debt, net of unrestricted cash and cash equivalents of the Borrower
and its Restricted Subsidiaries in excess of the Base Amount on such
date of determination, to (ii) Consolidated Adjusted EBITDA.
“Base Amount” shall mean (x) $50 million prior to the third
anniversary of the Closing Date and (y) thereafter, $0.
For purposes of the Term Loan Definitive Documentation,
“Consolidated Adjusted EBITDA” means the Consolidated Net
Income (to be defined in a manner consistent with Documentation
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 7
Considerations) of the Borrower and its Restricted Subsidiaries
determined on a consolidated basis for such period for which
financial statements are available:
(a) increased, in each case to the extent deducted (and not added
back) in Consolidated Net Income, and in each case, without
duplication with any other item described in this clause (a) or
any item excluded pursuant to the definition of Consolidated
Net Income, by:
(i) provision for Taxes based on income or profits or
capital, including state, provincial, franchise, excise
and similar Taxes and foreign withholding Taxes of
such Person paid or accrued, including any penalties
and interest relating to any Tax examinations; plus
(ii) consolidated interest expense for such period; plus
(iii) depreciation, amortization and other non-cash charges
or expenses (including any reserves, write-downs or
write-offs) of such Person for such period (except to
the extent that such non-cash charges are reserved for
cash charges to be taken in the future); plus
(iv) extraordinary, non-recurring or exceptional losses,
charges and expenses actually paid during such period
(including, without limitation, losses, charges and
expenses attributable to (a) the Competition & Markets
Authority (“CMA”) investigation (or settlement) and
(b) any litigation (or settlement) connected with
matters which are the subject of the current CMA
investigation); plus
(v) fees, charges and expenses relating to the
Recapitalization Transaction to the extent paid prior to
or within 6 months after the Closing Date (including,
without limitation, any financial advisory fees, filing
fees, accounting fees, legal fees and other similar
advisory and consulting fees and related out-of-pocket
expenses and other fees, but excluding, however, any
interest or principal paid in cash in relation to or in
connection with amounts due under the Existing Credit
Agreement and related loan documentation); plus
(vi) expenses, costs and charges related to restructuring, or
relocation actually incurred in such period; provided
that the aggregate amount added back pursuant to this
clause (vi) for expenses, costs and charges related to
restructuring for any four Fiscal Quarter period shall
not exceed 6% of Consolidated Adjusted EBITDA in
any Fiscal Year (it being understood that relocation
costs shall not be subject to this proviso); plus
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 8
(vii) expenses, costs and charges related to severance
actually incurred in such period; plus
(viii) expenses, costs and charges related to Permitted
Acquisitions after the Closing Date actually incurred
in such period; plus
(ix) losses, charges and expenses relating to asset
dispositions or the sale or other disposition of any
Equity Interests (to be defined in a manner consistent
with Documentation Considerations) of any Person, in
each case to the extent permitted by this Agreement,
other than in the ordinary course of business, as
determined in good faith by an Authorized Officer (to
be defined in a manner consistent with Documentation
Considerations) of the Borrower; plus
(x) losses, charges and expenses attributable to disposed
or discontinued operations and losses, charges and
expenses related to the disposal of disposed,
abandoned, closed or discontinued operations, in all
cases other than in the ordinary course of business;
plus
(xi) losses, charges and expenses attributable to the early
extinguishment or conversion of Indebtedness, Hedge
Agreements or other derivative instruments (including
premiums paid); plus
(xii) charges, expenses and fees actually incurred and paid
in cash in such period, including financial advisory,
accounting, auditor, legal and other consulting and
advisory fees and any Canadian Securities
Administrator, SEDAR, U.S. Securities and Exchange
Commission (“SEC”), SEC Electronic Data Gathering,
Analysis, and Retrieval system (“XXXXX”) or other
filing fees and expenses, or any amortization thereof,
in connection with any equity offering, merger,
amalgamation, recapitalization, asset disposition,
incurrence or repayment of Indebtedness, refinancing
transaction or amendment or modification of any debt
instrument (in each case, including any such
transaction undertaken but not completed) and any
non-recurring charges and expenses (including
nonrecurring merger or amalgamation expenses)
incurred as a result of any such transaction, provided
that, any such charges, expenses and fees are paid prior
to or within 3 months of such transaction; plus
(xiii) the amount of cost savings and cost synergies
projected by the Borrower in good faith to be realized
in connection with any Permitted Acquisition after the
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 9
Closing Date (which cost savings or cost synergies
shall be subject only to certification in reasonable
detail by an Authorized Officer of the Borrower and
shall be calculated on a pro forma basis as though such
cost savings or synergies had been realized on the first
day of the relevant period), net of the amount of actual
benefits realized during such period from such actions;
provided that (A) such cost savings or cost synergies
are reasonably identifiable and factually supportable,
(B) are expected to be realized (in the good faith
determination of the Borrower) within twelve (12)
months after the date of such Permitted Acquisition,
(C) no cost savings or cost synergies shall be added to
the extent duplicative of any expenses or charges
otherwise added back to Consolidated Adjusted
EBITDA through another pro forma adjustment for
such period, and (C) the aggregate amount added back
pursuant to this clause (xii) for any four Fiscal Quarter
period shall not exceed 10.0% of Consolidated
Adjusted EBITDA prior to accounting for adjustments
pursuant to clauses (a)(iv) above through this clause
(a)(xiii);
(b) decreased (in each case to the extent added in Consolidated
Net Income), by (without duplication):
(i) extraordinary, non-recurring or exceptional gains
during such period; plus
(ii) net unrealized gains on Hedge Agreements and any net
after tax gain or income from the early extinguishment
of Indebtedness; plus
(iii) gains relating to asset dispositions or the sale or other
disposition of any Equity Interests of any Person other
than in the ordinary course of business; plus
(iv) cash payments during such period on account of
accruals on or reserves added to Consolidated
Adjusted EBITDA pursuant to clause (a) above; plus
(v) non-cash gains, excluding any non-cash gains that
represent the reversal of any accrual of, or cash reserve
for, anticipated cash charges that were deducted (and
not added back) in the calculation of Consolidated
Adjusted EBITDA for any prior period.
Refinancing Facility: The Borrower shall have the right to refinance and/or replace its
New Senior Secured Term Loans (and loans under any New Senior
Secured Incremental Term Facility) in whole or in part with (x) one
or more new term facilities (each, a “Refinancing Facility” or the
“Refinancing Facilities”) under the Term Loan Definitive
Documentation with the consent of the Borrower and the institutions
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 10
providing such Refinancing Facility and/or (y) one or more series of
notes or loans, in the case of each of clauses (x) and (y), that may be
pari passu with or junior to the remaining portion of the New Senior
Secured Term Facility in right of payment and/or security and/or be
unsecured (such notes or loans, the “Refinancing Notes”); provided,
that (a) any Refinancing Facility or issuance of Refinancing Notes
that is pari passu with or junior to the remaining portion of the New
Senior Secured Term Facility with respect to security or
subordinated to the remaining portion of the New Senior Secured
Term Facility in right of payment shall be subject to Acceptable
Intercreditor Arrangements, (b) no Refinancing Facility or issuance
of Refinancing Notes shall mature prior to the latest maturity date of
the New Senior Secured Term Facility being refinanced or replaced,
and in the case of the New Senior Secured Term Facility, no
Refinancing Facility or issuance of Refinancing Notes shall have a
shorter weighted average life to maturity than the New Senior
Secured Term Loans being refinanced or replaced, (c) any
Refinancing Facility or issuance of Refinancing Notes shall have
pricing (including interest, fees and premiums), optional prepayment
and redemption terms as may be agreed to by the Borrower and the
lenders or holders party thereto, (d) if any such Refinancing Facility
or issuance of Refinancing Notes is secured, it may not be secured
by any assets other than the Collateral, (e) if any such Refinancing
Facility or issuance of Refinancing Notes is guaranteed, it may not
be guaranteed by any person other than the applicable Loan Parties,
(f) the other terms and conditions (excluding those referenced in
clauses (a) through (e) above) of such Refinancing Facility or
issuance of Refinancing Notes shall not be more favorable (taken as
a whole and as reasonably determined by the Borrower) to the
lenders providing such Refinancing Facility or the holders of such
Refinancing Notes than those applicable to the New Senior Secured
Term Loans or commitments being refinanced or replaced (except
for covenants or other provisions applicable only to periods after the
latest final maturity date of the New Senior Secured Term Loans or
commitments existing at the time of such refinancing or
replacement), (g) except to the extent otherwise permitted under the
Term Loan Definitive Documentation, the aggregate principal
amount of any Refinancing Facility or any issuance of Refinancing
Notes shall not exceed the aggregate principal amount of
indebtedness and commitments being refinanced or replaced
therewith, plus interest, premiums, fees and expenses and (h) any
Refinancing Facility that is pari passu with the New Senior Secured
Term Facility in right of payment and security shall share ratably in
any voluntary or mandatory prepayment of the New Senior Secured
Term Loans unless the Borrower and the lenders in respect of such
Refinancing Facility elect lesser payments.
CERTAIN PAYMENT PROVISIONS
Interest Rates and Fees: As set forth on Annex I hereto.
Optional Prepayments and New Senior Secured Term Loans may be prepaid and commitments
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 11
Commitment Reductions: may be reduced, in whole or in part, without premium or penalty
(except as described under the heading “Prepayment Fee” below), in
minimum amounts to be agreed, at the option of the Borrower at any
time upon 1 business day’s (or, in the case of a prepayment of
Eurodollar Loans (as defined on Annex I hereto), 3 business days’)
prior notice, subject to reimbursement of the New Senior Secured
Term Lenders’ redeployment costs in the case of a prepayment of
Eurodollar Loans prior to the last day of the relevant interest period.
Optional prepayments of the New Senior Secured Term Loans shall
be applied to the installments of the New Senior Secured Term
Loans as directed by the Borrower (or in the absence of direction
from the Borrower, in the direct order of maturity).
Prepayment Fee: Any Repricing Transaction (as defined below) consummated prior to
the date that is 12 months after the Closing Date will be subject to a
prepayment premium of 1.00% on the principal amount of the New
Senior Secured Term Loans prepaid or, in the case of any
amendment, the principal amount of the relevant New Senior
Secured Term Loans outstanding immediately prior to (and subject
to) such amendment (including the principal amount of any New
Senior Secured Term Loans of any Lender which are required to be
assigned in accordance with the “yank-a-bank” provisions set forth
in the Term Loan Definitive Documentation as a result of such
Lender’s failure to consent to such amendment).
For purposes of the Term Loan Definitive Documentation,
“Repricing Transaction” means the refinancing or repricing of all or
any portion of the New Senior Secured Term Loans the primary
purpose of which is to reduce the all-in-yield applicable to the New
Senior Secured Term Loans (x) with the proceeds of senior secured
term loans that are incurred by any Loan Party or (y) in connection
with any amendment to the Term Loan Definitive Documentation, in
either case, (i) having or resulting in an effective interest rate (to be
calculated in a manner consistent with that set forth above in the
MFN Provision) as of the date of such refinancing or repricing that
is (and not by virtue of any fluctuation in any “base” rate) less than
the effective interest rate applicable to the New Senior Secured Term
Loans immediately prior to such refinancing or repricing and (ii) in
the case of a refinancing of the New Senior Secured Term Loans, the
proceeds of which are used to repay, in whole or in part, outstanding
New Senior Secured Term Loans, but excluding, in any such case,
any refinancing or repricing of New Senior Secured Term Loans in
connection with any initial public offering or “change of control”
transaction.
Mandatory Prepayments: The following amounts shall be applied to prepay the New Senior
Secured Term Loans, in each case with carve-outs and exceptions
consistent with the Documentation Considerations:
(a) 100% of the net cash proceeds of any incurrence by the
Borrower or any of its Restricted Subsidiaries of debt that is (i)
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 12
not permitted under the Term Loan Definitive Documentation
or (ii) incurred pursuant to a Refinancing Facility or an
issuance of Refinancing Notes;
(b) 100% of the net cash proceeds in excess of $25 million in any
fiscal year of any non-ordinary course sale or other disposition
of assets (other than the North American Assets (as defined
below) or a Material Disposition (as defined below))
consummated by the Borrower or any Restricted Subsidiary or
as a result of casualty or condemnation (subject to the right of
the Borrower to apply such proceeds to (x) restore, rebuild,
repair, construct, improve, replace or otherwise acquire assets
useful in the Borrower’s or its subsidiaries’ business, in each
case to the extent constituting a capital expenditure or (y)
consummate a Permitted Acquisition (each of (x) and (y), a
“Permitted Reinvestment”) within 12 months following receipt
(or if the Borrower or its subsidiaries have committed to
reinvest such proceeds within such 12 month period
reinvestment within 6 months following such 12 month
period)); and
(c) 100% of the net cash proceeds from (x) any non-ordinary
course sale or other disposition of the Borrower’s North
American product portfolio consisting of branded products
(which, for the avoidance of doubt, shall not include (i)
Pinnacle Biologics, Inc. (“Pinnacle”), (ii) any assets owned by
Pinnacle or its subsidiaries or (iii) the Photofrin intellectual
property of Pinnacle owned by Concordia Labs Inc. or
Concordia Laboratories Inc. S.a X.X) and authorized generic
contracts (the “North American Assets”) or (y) sales and other
dispositions (or series of related dispositions) in excess of $100
million (a “Material Disposition”) consummated by the
Borrower or any Restricted Subsidiary (subject, in the case of
clauses (x) and (y), to the right of the Borrower to reinvest up
to 50% of such proceeds as a Permitted Reinvestment within
12 months following receipt (or if the Borrower or its
subsidiaries have committed to reinvest such proceeds within
such 12 month period reinvestment within 6 months following
such 12 month period)); provided that a mandatory prepayment
pursuant to this clause (c) shall only be required to be paid in
the event net cash proceeds exceed $5 million (in which event,
100% of such net cash proceeds shall be required to be
applied).
Mandatory prepayments of the New Senior Secured Term Loans
shall be applied to the installments thereof as directed by the
Borrower (or in the absence of direction from the Borrower, to
remaining instalments of principal on a pro rata basis); provided, that
the Term Loan Definitive Documentation will provide that, in the
case of any mandatory prepayment in respect of any asset sale or
casualty or condemnation event, to the extent required by the
documentation governing such other indebtedness, the Borrower
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 13
may apply the net cash proceeds thereof ratably (based on the
outstanding principal amounts thereof) to the payment of the New
Senior Secured Term Loans and any other indebtedness that is
secured on a pari passu basis with the New Senior Secured Term
Loans; provided that any amount that is offered to prepay any such
other indebtedness and is not accepted by the holders of such
indebtedness shall be applied to prepay the New Senior Secured
Term Loans.
If the Borrower determines in good faith that any prepayment
described under clause (b) and (c) above (i) in the case of any
prepayment attributable to any Subsidiary, would violate or conflict
with any local law (e.g., financial assistance, corporate benefit, thin
capitalization, capital maintenance and similar legal principles,
restrictions on upstreaming of cash intra group and the fiduciary and
statutory duties of the directors of the relevant subsidiaries), (ii)
would require the Borrower or any Restricted Subsidiary to incur a
material and adverse tax liability (including any withholding tax) if
such amount were repatriated to the Borrower as a dividend or (iii)
in the case of any prepayment attributable to any joint venture,
would violate any organizational document of such joint venture (or
any relevant shareholders’ or similar agreement), in each case if the
amount subject to the relevant prepayment were upstreamed or
transferred to the Borrower as a distribution or dividend (any amount
limited as set forth in clauses (i) through (iii) of this paragraph, a
“Restricted Amount”), the amount of the relevant prepayment shall
be reduced by the Restricted Amount; provided that (A) in the case
of any Restricted Amount arising under the circumstances described
in clause (i) or (ii) above, the Borrower shall use commercially
reasonable efforts to take all actions required by applicable law to
permit the repatriation of the relevant amounts to the Borrower and
(B) if the circumstance giving rise to any Restricted Amount ceases
to exist within 365 days following the end of the event giving rise to
the relevant prepayment, the relevant Restricted Subsidiary shall
promptly repatriate or distribute the amount that no longer
constitutes a Restricted Amount to the Borrower for application to
the New Senior Secured Term Loans as required above promptly
following the date on which the relevant circumstance ceases to
exist; it being understood and agreed that following the expiration of
the 365-day period referenced above, the relevant Restricted
Subsidiary may retain any Restricted Amount, and no prepayment
shall be required in respect thereof; provided that in no event shall
any Restricted Amount be used to increase the Cumulative Credit (as
defined below).
Any New Senior Secured Term Lender (each a “Declining Lender”)
may elect not to accept any mandatory prepayment, but in the case
of clause (a) above, solely to the extent the relevant prepayment does
not represent a refinancing of the New Senior Secured Term Loans.
COLLATERAL Same as in the Existing Credit Agreement, but in any event subject
to the provisions of the immediately following paragraphs, the
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 14
Borrower Obligations and the obligations of each other Loan Party
under its Guaranty shall be secured by a perfected first-priority
security interest (subject to permitted liens and other exceptions to
be set forth in the Term Loan Definitive Documentation, including,
without limitation, liens expressly permitted to exist on the Closing
Date pursuant to the Recapitalization Transaction and otherwise set
forth below) in substantially all of such Loan Party’s tangible and
intangible assets (including, without limitation, a pledge of the
capital stock of each Loan Party’s direct subsidiaries (subject to the
following sentence) (the “Collateral”).
Notwithstanding the foregoing, the Collateral will exclude:
(a) all leasehold real property,
(b) all fee-owned real property with a fair market value (as
reasonably estimated by the Borrower) of equal to or less than
$10 million,
(c) pledges and security interests (including in respect of
partnerships, joint ventures and other non-wholly-owned
entities) to the extent prohibited by law or agreements
containing anti-assignment provisions not overridden by the
UCC, PPSA or other applicable law,
(d) any lease, license or other agreement or any property subject to
a purchase money security interest, Capital Lease Obligation
(to be defined in a manner consistent with Documentation
Considerations) or similar arrangements permitted hereunder,
the property subject thereto, any insurance in respect thereof,
any management or operating agreement with respect thereto
and deposits made in respect thereof and all rights in relation
to any of the foregoing, in each case, to the extent that a grant
of a security interest therein would violate or invalidate such
lease, license or agreement, purchase money, capital lease or a
similar arrangement or create a right of termination in favor of
any other party thereto (other than a Loan Party),
(e) (1) equity interests which constitute margin stock, (2) equity
interests in Unrestricted Subsidiaries and (3) equity interests in
any person other than wholly-owned subsidiaries to the extent
the granting of a security interest is not permitted by law or the
terms of such subsidiary’s organizational, shareholders,
acquisition, joint venture or governance documents (including
as a result of minority ownership) or would trigger termination
pursuant to any “change of control” or similar provision,
(f) assets the grant or perfection of a security interest in which
would result in material and adverse tax consequences as
reasonably determined by the Borrower in consultation with
the Administrative Agent,
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 15
(g) any property or asset the grant or perfection of a security
interest in which would require governmental consent,
approval, license or authorization (unless such consent,
approval, license or authorization has been obtained), after
giving effect to any applicable anti-assignment provision of the
UCC, PPSA or other applicable law and other than proceeds
thereof to the extent that the assignment of the same is
effective under the UCC, PPSA or other applicable law
notwithstanding such consent or restriction,
(h) any “intent-to-use” trademark applications prior to the filing of
a “Statement of Use” or “Amendment to Allege Use” with
respect thereto, to the extent, if any, that, and solely during the
period, if any, in which, the grant of a security interest therein
would impair the validity or enforceability of such intent-to-
use trademark application under applicable law,
(i) motor vehicles and other assets subject to certificates of title
(unless otherwise capable of perfection by filing a financing
statement under the PPSA or UCC or similar filing in any
applicable jurisdiction), letter of credit rights with an
individual face amount not exceeding $5,000,000 (except to
the extent constituting a support obligation for other Collateral
as to which perfection of the security interest in such other
Collateral is accomplished by the filing of a UCC or PPSA
financing statement (or similar filing in any applicable
jurisdiction) and commercial tort claims with a value of less
than $5 million,
(j) deposit accounts, securities accounts, commodities accounts,
futures accounts and other similar accounts of any Loan Party
(A) used for the sole purpose of funding (1) payroll, healthcare
and other employee wage and benefit accounts, (2) tax
accounts (including without limitation, sales tax accounts), (3)
escrow, defeasance, discharge and redemption accounts
permitted hereunder and (4) fiduciary and trust accounts, and,
in the case of sub-clauses (1) through (4), the funds or other
property held in or maintained in any such account, (B) that are
zero-balance accounts, (C) except to the extent a security
interest therein can be perfected by filing under the UCC,
PPSA or other applicable law or the jurisdiction of any Loan
Party, accounts in jurisdictions other than in the jurisdiction of
organization of the applicable granting Loan Party, the United
States or any state thereof, Canada or any province or territory
thereof, the United Kingdom, Australia, Jersey, Ireland,
Luxembourg, the Netherlands, New Zealand, Sweden or
Switzerland (collectively, the “Acceptable Guarantor
Jurisdictions”) and (D) accounts other than those described in
the preceding clauses (A) through (C) with respect to which
the average daily balance of the funds maintained on deposit
therein does not exceed $5,000,000 at any time, except to the
extent a security interest therein can be perfected by filing
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 16
under the UCC, PPSA or other applicable law, and
(k) other assets (and categories thereof) to be agreed consistent
with the Documentation Considerations or otherwise
reasonably satisfactory to the Administrative Agent and the
Borrower.
Notwithstanding anything to the contrary contained herein:
(a) no Loan Party shall be required to grant a security interest in
any asset or perfect a security interest in any Collateral to the
extent:
(i) the cost, burden, difficulty or consequence of
obtaining or perfecting a security interest therein
outweighs the benefit of the security afforded thereby
as reasonably determined by the Borrower and the
Administrative Agent or
(ii) the grant or perfection of a security interest in such
asset would (A) be prohibited by enforceable anti-
assignment provisions of any contract or applicable
law, (B) violate the terms of any contract (in each case,
after giving effect to the applicable anti-assignment
provisions of the UCC, PPSA or other applicable law)
or any applicable law or (C) trigger termination of any
contract pursuant to any “change of control” or similar
provision; it being understood that the Collateral shall
include any proceeds and/or receivables arising out of
any asset described in this clause (ii) to the extent the
assignment of such proceeds or receivables is
expressly deemed effective under the UCC, PPSA or
other applicable law notwithstanding the relevant
prohibition, violation or termination right,
(b) no action outside of the United States, United Kingdom,
Canada, Australia, New Zealand or other jurisdiction where a
Loan Party is organized will be required in order to create or
perfect any security interest in any asset of any Loan Party that
is located outside of such jurisdiction, and no non-US, United
Kingdom, Canadian, Australian, New Zealand or European
Union law security or pledge agreements shall be required with
respect to the assets of any Loan Party,
(c) any required mortgage will be permitted to be delivered after
the Closing Date,
(d) no Loan Party shall be required to seek any landlord lien
waiver, estoppel, warehouseman waiver or other collateral
access or similar letter or agreement,
(e) the following Collateral shall not be required to be perfected
(except to the extent that perfection may be achieved by the
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 17
filing of a UCC or PPSA financing statement): (i) assets
requiring perfection through control agreements or other
control arrangements, including in respect of any deposit,
securities or commodities accounts (other than control of
pledged capital stock and material intercompany notes to the
extent otherwise required above); (ii) vehicles and any other
assets subject to certificates of title (except to the extent that
perfection may be achieved by the filing of a UCC or PPSA
financing statement), (iii) letter of credit rights (except to the
extent that perfection may be achieved by the filing of a UCC
or PPSA financing statement) and (iv) capital stock of (A) any
Immaterial Subsidiary and/or (B) any person that is not a
subsidiary, which, if a subsidiary, would constitute an
Immaterial Subsidiary,
(f) the guaranty and security documents (the “Security
Documents”) will contain such other exceptions and
qualifications as the Borrower and the New Senior Secured
Term Lenders may reasonably agree.
The New Senior Secured Term Facility will be senior in right of
payment and secured on a first priority basis with respect to the
Collateral (as defined below).
The lien priority, relative rights and other creditors’ rights matters in
respect of the New Senior Secured Term Facility, the New Senior
Secured Notes and the Revolving Facility (as defined in Annex II
attached hereto) will be set forth in a customary intercreditor
agreement (the “Intercreditor Agreement”), which shall be
reasonably satisfactory to the Borrower and the Administrative
Agent. For the avoidance of doubt, the Intercreditor Agreement will,
among other things, (a) allow additional first lien indebtedness
permitted to be incurred pursuant to any New Senior Secured
Incremental Term Facility and/or any New Senior Secured
Incremental Equivalent Debt and/or otherwise in accordance with
the terms of the Term Loan Definitive Documentation and (b) allow
permitted refinancing indebtedness in respect of any of the foregoing
(including, in the case of the New Senior Secured Term Facility, in
the form of Refinancing Facilities).
In addition, and subject, to the Intercreditor Agreement, the Term
Loan Definitive Documentation will authorize and require the
Administrative Agent to enter into any Acceptable Intercreditor
Arrangement which allows (at the Borrower’s option) additional
debt that is permitted under the New Senior Secured Term Facility to
be incurred and secured under the Term Loan Definitive
Documentation to be secured by a lien on the Collateral that is pari
passu with or junior to the lien on the Collateral securing the New
Senior Secured Term Facility.
CERTAIN CONDITIONS
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 18
DOCUMENTATION
Term Loan Definitive
Documentation:
The definitive financing documentation for the New Senior Secured
Term Facility (including the Intercreditor Agreement, the “Term
Loan Definitive Documentation”), shall be based on the Borrower’s
Existing Credit Agreement, dated as of October 21, 2015, by and
among, among others, the Borrower, the Subsidiaries party thereto,
the lenders party thereto, and Xxxxxxx Xxxxx Bank USA, as
administrative agent and collateral agent (the “Existing Credit
Agreement”), and shall contain the terms and conditions set forth
herein and such other terms as the Borrower and the New Senior
Secured Term Lenders may agree; it being understood and agreed
that the Term Loan Definitive Documentation shall:
(a) contain only those mandatory prepayments, representations and
warranties, affirmative, financial and negative covenants and events
of default expressly set forth in this Term Sheet, in each case,
applicable to the Borrower and its Restricted Subsidiaries, which
shall be subject to standards, qualifications, thresholds, exceptions
for materiality and/or otherwise and “baskets,” grace and cure
periods, in each case, consistent (where applicable) with the
Documentation Considerations (it being understood that certain
baskets, exceptions and thresholds that are subject to a monetary cap
shall also include a “builder” component based on a percentage of
Consolidated Adjusted Assets (except as specifically provided in the
Term Sheet) (a “Builder Component”)); and
(b) (i) give due regard to the operational and strategic requirements
of the Borrower and its Restricted Subsidiaries in light of their
consolidated capital structure, size, industry and practices (including,
without limitation, the leverage profile and projected free cash flow
generation of the Borrower and its Restricted Subsidiaries), in each
case, after giving effect to the Transactions and (ii) be based upon
the Existing Credit Agreement and related credit documentation (this
clause (b), together with the immediately preceding clause (a),
collectively, the “Documentation Considerations”).
Notwithstanding anything to the contrary herein, to the extent that
the Term Loan Definitive Documentation requires (a) compliance
with any financial ratio or test, (b) the absence of any default or
event of default (or any type of default or event of default) or (c)
compliance with any cap expressed as a percentage of Consolidated
Adjusted EBITDA or Consolidated Total Assets (, in each case as a
condition to the consummation of any transaction in connection with
any acquisition (including the incurrence of any indebtedness) or
similar investment that is not subject to any financing condition (a
“Limited Condition Transaction”), the determination of whether the
relevant condition is satisfied may be made, at the election of the
Borrower, either (i) at the time of the execution of the definitive
agreement with respect to the relevant acquisition or (ii) at the time
the relevant acquisition is consummated, in either case after giving
effect to the acquisition and any related indebtedness on a pro forma
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 19
basis.
Capital Lease Obligations which would have been characterized as
operating leases in accordance with IFRS as of the Closing Date
shall be treated as operating leases.
Representations and Warranties: Limited to the following: organizational existence; organizational
power and authority; due authorization, execution and delivery of
the Term Loan Definitive Documentation; enforceability of the
Term Loan Definitive Documentation; no conflicts of the Term Loan
Definitive Documentation with applicable law, organizational
documents or contractual obligations; financial statements (including
pro forma financial statements and projections); no Material Adverse
Effect (as defined below) as of the Closing Date; capitalization of
subsidiaries as of the Closing Date; compliance with law (including,
without limitation, (i) GDPR, (ii) FCPA, (iii) UK Xxxxxxx Xxx 0000
(UKBA), (iv) OFAC, (v) the PATRIOT Act, and (vi) Corruption of
Foreign Public Officials Act (Canada), Criminal Code (Canada), the
Special Economic Measures Act (Canada), the Regulations
Establishing a List of Entities made under subsection 83.05(1) of the
Criminal Code (Canada), the Regulations Implementing the United
Nations Resolutions on the Suppression of Terrorism (Canada), the
United Nations Al-Qaida and Taliban Regulations, the Freezing
Assets of Corrupt Foreign Officials Act, and Proceeds of Crime
(Money Laundering) and Terrorist Financing Act (Canada)
(collectively, “Canadian Anti-Corruption and Sanctions Laws”), and,
(vii) to the extent applicable, other anti-terrorism laws, anti-money
laundering laws, “know your customer” requirements and laws and
measures related to export control and sanctioned persons and
activities (including, but not limited to, export control and sanctions
laws and measures imposed by the United States, the European
Union or its Member States, or the United Kingdom)); governmental
approvals and consents, (as such approvals and consents pertain to
the Term Loan Definitive Documentation); ERISA and labor
matters; pension matters; environmental matters; litigation;
ownership of property (including intellectual property); insurance;
taxes; Federal Reserve margin regulations; Investment Company
Act; accuracy of disclosure as of the Closing Date; solvency (to be
defined in a manner to be agreed) of the Borrower and its Restricted
Subsidiaries, taken as a whole, on the Closing Date; and the creation,
validity, perfection and priority of security interests.
Representations and warranties will be subject to Material Adverse
Effect qualifiers consistent with those contained in the Existing
Credit Agreement.
“Material Adverse Effect” means any event, effect or matter which
is reasonably likely to have a material adverse effect on: (i) the
consolidated business, assets or financial condition of the Borrower
and its Restricted Subsidiaries, taken as a whole, (ii) the ability of
the Borrower and its Restricted Subsidiaries, taken as a whole, to
perform its payment obligations under any of the Finance
Documents, (iii) the rights and remedies of the Administrative
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 20
Agent, the New Senior Secured Term Lenders and the other Secured
Parties or (iv) the validity or enforceability of the Security
Documents in any way which is materially adverse to the interests of
the New Senior Secured Term Lenders under the Term Loan
Definitive Documentation taken as a whole and if capable of
remedy, is not remedied within 20 business days of the earlier of the
Borrower becoming aware of the relevant event or circumstance or
being given notice of the same by the Administrative Agent.
Affirmative Covenants: Limited to the items set forth in Section 1 of Annex II attached
hereto.
Negative Covenants: Limited to the items set forth in Section 2 of Annex II attached
hereto, and applicable to the Borrower and its Restricted
Subsidiaries.
Events of Default: Limited to the items set forth in Section 3 of Annex II attached
hereto.
Voting: Amendments and waivers of the Term Loan Definitive
Documentation will require the approval of non-defaulting New
Senior Secured Term Lenders holding at least the Applicable Voting
Percentage (as defined below) (the “Required Lenders”), except that:
(a) the consent of each New Senior Secured Term Lender directly
and adversely affected thereby (but not the Required Lenders)
shall be required with respect to:
(i) any reduction in the principal amount of any First Lien
Loan or scheduled amortization payment owed to such
New Senior Secured Term Lender,
(ii) any extension of the final maturity of any New Senior
Secured Term Loan owed to such New Senior Secured
Term Lender or the due date of any interest or fee
payment or any scheduled amortization payment in
respect of any New Senior Secured Term Loan owed
to such New Senior Secured Term Lender (in each
case, other than any extension for administrative
convenience as agreed by the Administrative Agent),
(iii) any reduction in the rate of interest (other than any
waiver of default interest) or the amount of any fees
owed to such New Senior Secured Term Lender (it
being understood that any change in any definition
applicable to any ratio used in the calculation of such
rate of interest or fees (including any component
definition) shall not constitute a reduction in any rate
of interest or any fee),
(iv) any increase in the amount (other than with respect to
any New Senior Secured Incremental Term Facility to
which such New Senior Secured Term Lender has
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 21
agreed) of such New Senior Secured Term Lender’s
commitment (it being understood that a waiver of any
condition precedent or the waiver of any default, event
of default or mandatory prepayment shall not
constitute an increase of any commitment of any New
Senior Secured Term Lender),
(v) any extension of the expiry date of such New Senior
Secured Term Lender’s commitment (it being
understood that a waiver of any condition precedent or
the waiver of any default, event of default or
mandatory prepayment shall not constitute an
extension of any commitment of any New Senior
Secured Term Lender),
(vi) any modification to the pro rata sharing of payment
provisions except as otherwise provided by the Term
Loan Definitive Documentation,
(vii) re-tranching the New Senior Secured Term Facility,
(viii) change the coin or currency in which the principal of
any New Senior Secured Term Loan (or interest
payable thereon) is payable, and
(ix) any change to the “waterfall” provisions of the Term
Loan Definitive Documentation, except as otherwise
provided by the Term Loan Definitive Documentation;
(b) the consent of 100% of the New Senior Secured Term Lenders
shall be required with respect to:
(i) any reduction of any voting percentage set forth in the
definition of “Required Lenders”,
(ii) any release of all or substantially all of the Collateral
(other than in accordance with the Term Loan
Definitive Documentation),
(iii) any release of all or substantially all of the value of the
Guaranty (other than in accordance with the Term
Loan Definitive Documentation);
(iv) any introduction of a new senior ranking tranche of
New Senior Secured Term Loans;
(c) the consent of 85.0% of the New Senior Secured Term Lenders
shall be required with respect to (i) any increase in the
maximum principal amount of the Revolving Facility (as
defined below) from that permitted under the Term Loan
Definitive Documentation in effect on the Closing Date or (ii)
the subordination of the liens on Collateral securing the New
Senior Secured Term Facility to liens securing any other
indebtedness or any increase in the amount of indebtedness
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 22
that is permitted to rank senior to the liens of the New Senior
Secured Term Lenders (provided that such percentage shall be
reduced to 66.66% at any time the Applicable Voting
Percentage is 50.1%); and
(d) the consent of the Administrative Agent will be required with
respect to modifications of the Term Loan Definitive
Documentation which affect the rights and duties of the
Administrative Agent.
“Applicable Voting Percentage” means at any time (x) if at such
time the New Senior Secured Term Loans held in the aggregate by
the Plan Sponsors (as defined below) constitute greater than 27.5%
of the New Senior Secured Term Loans outstanding at such time,
66.66%, and (y) at any other time (so long as the Plan Sponsors have
notified the Administrative Agent for further notification to the
Lenders that the Plan Sponsors in the aggregate hold less than 27.5%
of the New Senior Secured Term Loans outstanding at such time),
50.1%. Each Plan Sponsor shall be required to promptly provide to
the Administrative Agent notice of the aggregate principal amount of
the New Senior Secured Term Loans held by such Plan Sponsor and
its affiliates upon any change in the amount of such holdings (which
notice may be provided in an annex to the applicable assignment and
assumption agreement, which annex shall only be delivered to the
Administrative Agent, and not to the counterparty) and if such notice
results in a change in the Applicable Voting Percentage, then the
Administrative Agent shall notify the other New Senior Secured
Term Lenders and the Borrower of any such change in the
Applicable Voting Percentage. The Administrative Agent shall be
entitled to rely on all such notices provided they are absent manifest
error.
“Plan Sponsor” means any party which owns, directly or indirectly,
5% or more of the outstanding voting common stock of the
Borrower after giving effect to the Recapitalization Transaction on
the Closing Date, and in each case, controlled affiliates thereof.
Modifications to provisions regarding pro rata payments or sharing
of payments, in each case, in connection with loan buy-back or
similar programs, “amend and extend” transactions or the addition of
one or more tranches of debt (which may, but are not required to be
new money tranches) and the like not otherwise contemplated
hereby shall only require approval of the Required Lenders, and non-
pro rata distributions, payments and commitment reductions will be
permitted in connection with any such loan buy-back or similar
programs, amend and extend transactions or new tranches of debt
and as contemplated hereby.
The Term Loan Definitive Documentation will contain provisions to
permit the amendment and extension and/or replacement of the New
Senior Secured Term Facility (including any New Senior Secured
Incremental Term Facility), which may be provided by existing New
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 23
Senior Secured Term Lenders or, subject to the reasonable consent
of the Administrative Agent and each Issuing Lender if required
under the heading “Assignments and Participations” below, other
persons who become New Senior Secured Term Lenders in
connection therewith, in each case without the consent of any other
New Senior Secured Term Lender.
The Term Loan Definitive Documentation will permit the
Administrative Agent and the Borrower to enter into one or more
amendments thereto to incorporate the provisions of any New Senior
Secured Incremental Term Facility made available without any New
Senior Secured Term Lender’s consent, so long as the purpose of
such amendment is solely to incorporate the appropriate provisions
for such New Senior Secured Incremental Term Facility in the Term
Loan Definitive Documentation.
The Term Loan Definitive Documentation will contain provisions
allowing the Borrower to replace a New Senior Secured Term
Lender or terminate the commitment of a New Senior Secured Term
Lender and prepay such New Senior Secured Term Lender’s
outstanding New Senior Secured Term Loans under one or more of
the New Senior Secured Term Facility (as the Borrower shall elect)
in connection with amendments and waivers requiring the consent of
all New Senior Secured Term Lenders or of all New Senior Secured
Term Lenders directly affected thereby (so long as the Required
Lenders or a majority of the relevant group of affected New Senior
Secured Term Lenders, as the case may be, consent), increased
costs, taxes, etc. and “defaulting” or insolvent New Senior Secured
Term Lenders.
The Term Loan Definitive Documentation shall provide that a
change of the Borrower (or the jurisdiction thereof) shall be
permitted on a basis to be agreed, which basis shall take into
consideration, inter alia, the jurisdiction of the Borrower and
applicable tax considerations which arise therefrom.
Defaulting Lenders: The Term Loan Definitive Documentation shall contain customary
limitations on and protections with respect to “defaulting” New
Senior Secured Term Lenders, including, but not limited to, non-
payment/escrow of amounts owed to any such defaulting New
Senior Secured Term Lender to secure its obligations and exclusion
for purposes of voting for so long as such New Senior Secured Term
Lender is a “defaulting” New Senior Secured Term Lender.
Assignments and Participations: The New Senior Secured Term Lenders will be permitted to assign
all or a portion of their New Senior Secured Term Loans and
commitments to any person (other than to (a) any Disqualified
Institution (to be defined in a manner consistent with Documentation
Considerations; provided that the identity of Disqualified Institutions
(other than competitors) shall be provided prior to the execution of
the Recapitalization Transaction Term Sheet) (provided that the list
of Disqualified Institutions (other than any “reasonably identifiable
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 24
affiliate” (on the basis of such affiliate’s name) included in the
definition of “Disqualified Institution”) is permitted to be made
available to any New Senior Secured Term Lender who specifically
requests a copy thereof), (b) any natural person and (c) except as
otherwise provided herein, the Borrower or any affiliate thereof)
with the consent of (i) the Borrower (not to be unreasonably
withheld or delayed), unless (x) a payment or bankruptcy (with
respect to the Borrower) event of default has occurred and is
continuing, or (y) solely in the case of the New Senior Secured Term
Loans, such assignment is to a New Senior Secured Term Lender, an
affiliate of a New Senior Secured Term Lender or an Approved Fund
(as defined below); provided that the Borrower shall be deemed to
have consented to any assignment unless it has objected thereto by
delivering written notice to the Administrative Agent within 10
business days after receipt of a request for consent thereto and
(ii) the Administrative Agent (not to be unreasonably withheld or
delayed). Non-pro rata assignments shall be permitted. In the case
of partial assignments (other than to another New Senior Secured
Term Lender, an affiliate of a New Senior Secured Term Lender or
an Approved Fund), the minimum assignment amount shall be $1.0
million in the case of any New Senior Secured Term Loan unless
otherwise agreed by the Borrower and the Administrative Agent (or,
in each case, if less, all of the relevant New Senior Secured Term
Lender’s remaining loans and commitments of the applicable class).
The Administrative Agent shall receive a processing and recordation
fee of $3,500 (which fee may be waived or reduced in the sole
discretion of the Administrative Agent) in connection with all
assignments.
The New Senior Secured Term Lenders shall also have the right to
sell participations in their New Senior Secured Term Loans to other
persons (other than (a) any Disqualified Institution (provided that the
list of Disqualified Institutions (other than any “reasonably
identifiable affiliate” (on the basis of such affiliate’s name) included
in the definition of “Disqualified Institution”) is made available to
any New Senior Secured Term Lender who specifically requests a
copy thereof), (b) any natural person and/or (c) any Affiliated
Lender)). Participants shall have the same benefits as the New
Senior Secured Term Lenders with respect to yield protection and
increased cost provisions subject to customary limitations and
restrictions. Voting rights of participants shall be limited to those
matters set forth in clauses (a) and (b) of the first paragraph under
“Voting” with respect to which the affirmative vote of the New
Senior Secured Term Lender from which it purchased its
participation would be required.
Pledges of New Senior Secured Term Loans in accordance with
applicable law shall be permitted without restriction other than to
Disqualified Institutions (provided that the list of Disqualified
Institutions (other than any “reasonably identifiable affiliate” (on the
basis of such affiliate’s name) included in the definition of
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 25
“Disqualified Institution”) is made available to any New Senior
Secured Term Lender who specifically requests a copy thereof).
“Approved Fund” means, with respect to any New Senior Secured
Term Lender, any person (other than a natural person) that is
engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary
course of its activities and is administered, advised or managed by
(i) such New Senior Secured Term Lender, (ii) an affiliate of such
New Senior Secured Term Lender or (iii) an entity or an affiliate of
an entity that administers, advises or manages such New Senior
Secured Term Lender.
The Term Loan Definitive Documentation shall provide that New
Senior Secured Term Loans may be purchased by and assigned to (a)
any Non-Debt Fund Affiliate (as defined below) and/or (b) the
Borrower and/or any subsidiary of the Borrower (the persons in
clauses (a) and (b) above collectively, but excluding any Debt Fund
Affiliate, “Affiliated Lenders”) on a non-pro rata basis through
Dutch auctions open to all New Senior Secured Term Lenders
holding New Senior Secured Term Loans on a pro rata basis in
accordance with customary procedures to be agreed and/or open
market purchases, notwithstanding any consent requirements set
forth above; provided, that (i) no Affiliated Lender shall be required
to make a representation that, as of the date of any such purchase
and assignment, it is not in possession of MNPI with respect to the
Borrower and/or any subsidiary thereof and/or any of their
respective securities, (ii) New Senior Secured Term Loans
(including term loans under any New Senior Secured Incremental
Term Facility) owned or held by Affiliated Lenders shall be
disregarded in the determination of any Required Lender vote (and
such New Senior Secured Term Loans shall be deemed to be voted
pro rata to the non-Affiliated Lenders), (iii) New Senior Secured
Term Loans (including term loans under any New Senior Secured
Incremental Term Facility) owned or held by Affiliated Lenders
shall not, in the aggregate, exceed 50% of the aggregate outstanding
New Senior Secured Term Facility at any time (after giving effect to
any substantially simultaneous cancellation thereof), (iv) subject to
exceptions to be agreed, no Affiliated Lender, solely in its capacity
as such, shall be permitted to attend any “lender-only” conference
calls or meetings or receive any related “lender-only” information,
(v) in the case of any Dutch auction or open market purchase
conducted by the Borrower or any of their Restricted Subsidiaries,
no default or event of default may be continuing at the time of
acceptance of bids for the relevant Dutch auction or the entry into a
binding agreement with respect to the relevant open market
purchase, as the case may be, (vi) any New Senior Secured Term
Loans acquired by the Borrower or any of their Restricted
Subsidiaries shall be immediately extinguished and irrevocably
cancelled to the extent permitted by applicable law, (vii) no proceeds
of the Revolving Facility shall fund any such purchase by the
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 26
Borrower or any of its subsidiaries and (viii) the relevant Affiliated
Lender and the assigning or purchasing New Senior Secured Term
Lender shall have executed a customary “affiliated lender
assignment and assumption” agreement.
In any bankruptcy or similar proceeding, no Affiliated Lender shall
have any right to vote its interest in respect of any New Senior
Secured Term Loan (it being understood that its interest will be
deemed to be voted in the same proportion as the vote of non-
Affiliated Lenders on the relevant matter), except to the extent that
any plan of reorganization or other arrangement with respect to
which the relevant vote is sought proposes to treat the interest of the
relevant Affiliated Lender in such New Senior Secured Term Loan
in a manner that is less favorable to such Affiliated Lender than the
proposed treatment of New Senior Secured Term Loans held by
other New Senior Secured Term Lenders.
Notwithstanding the foregoing, (a) the Term Loan Definitive
Documentation shall permit (but not require) any Non-Debt Fund
Affiliate to contribute any assigned New Senior Secured Term Loans
to the Borrower or any their subsidiaries for purposes of cancelling
such New Senior Secured Term Loans, (b) each Affiliated Lender
shall have the right to vote on any amendment, modification, waiver
or consent that would require the vote of all New Senior Secured
Term Lenders or the vote of all New Senior Secured Term Lenders
directly and adversely affected thereby and (c) no amendment,
modification, waiver or consent shall affect any Affiliated Lender (in
its capacity as a New Senior Secured Term Lender) in a manner that
is disproportionate to the effect on any New Senior Secured Term
Lender of the same class or that would deprive such Affiliated
Lender of its pro rata share of any payments to which it is entitled.
In addition, the Term Loan Definitive Documentation shall provide
that New Senior Secured Term Loans may be purchased by and
assigned to any Debt Fund Affiliate, notwithstanding any consent
requirements set forth above through (a) Dutch auctions open to all
relevant New Senior Secured Term Lenders on a pro rata basis in
accordance with customary procedures and/or (b) open market
purchases on a non-pro rata basis; provided, that for any Required
Lender vote, Debt Fund Affiliates may not, in the aggregate, account
for more than 49.9% of the amounts included in determining
whether the Required Lenders have consented to the relevant
amendment, waiver or other action. The provisions of the second
preceding paragraph shall not apply to any Debt Fund Affiliate, and
each New Senior Secured Term Lender shall be permitted to assign
or participate all or a portion of such New Senior Secured Term
Lender’s New Senior Secured Term Loans to any Debt Fund
Affiliate without regard to the foregoing provisions (but subject to
the proviso set forth in the immediately preceding sentence).
“Non-Debt Fund Affiliate” means any affiliate of the Borrower
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 27
(other than a natural person) other than a Debt Fund Affiliate.
“Debt Fund Affiliate” means any affiliate of a Permitted Holder
(other than a natural person, the Borrower or any of their
subsidiaries) that is a bona fide debt fund or investment vehicle that
is primarily engaged in, or advises (or whose general partner or
manager advises (as appropriate)) funds or other investment vehicles
that are primarily engaged in, making, purchasing, holding or
otherwise investing in commercial loans, bonds and similar
extensions of credit or securities in the ordinary course and with
respect to which no personnel making investment decisions in
respect of such affiliate are engaged in making investment decisions
with respect to the equity investment in the Borrower and its
Restricted Subsidiaries.
Provisions Applicable to the Plan
Sponsors
Notwithstanding anything to the contrary herein, (i) restrictions on
assignments and participations to Disqualified Institutions or
required consent of the Borrower to, any assignment or participation,
as applicable, will not be applicable to assignments or participations
by the Plan Sponsors (as defined below) to the extent made prior to
the first anniversary of the Closing Date, and (ii) restrictions on
voting by, or the amount of holdings of, Affiliated Lenders or Debt
Fund Affiliates set forth above, shall not apply to the Plan Sponsors
or Debt Fund Affiliates thereof.
Successor Administrative Agent: The Administrative Agent may resign or, if it is a “defaulting
lender” or an affiliate thereof, be removed by the Required Lenders,
or be removed by the Borrower, in each case (a) upon 10 days’
notice by the applicable party and (b) subject to the appointment of a
successor administrative agent (although if no successor
administrative agent is appointed within 30 days, such resignation
will still be effective). The successor agent shall be a commercial
bank or trust company and unless a payment or bankruptcy (with
respect to the Borrower) event of default has occurred and is
continuing, shall be reasonably acceptable to the Borrower.
Yield Protection and Taxes: The Term Loan Definitive Documentation will contain customary
provisions (a) protecting the New Senior Secured Term Lenders
against increased costs or loss of yield resulting from changes in
reserve, capital adequacy and other requirements of law (provided
that (i) the Xxxx-Xxxxx Xxxx Street Reform and Consumer
Protection Act and all requests, rules, guidelines, requirements and
directives thereunder or issued in connection therewith or in
implementation thereof and (ii) all requests, rules, guidelines,
requirements and directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United
States or foreign regulatory authorities, in each case pursuant to
Basel III, shall in the case of each of clauses (i) and (ii), be deemed
to constitute a change in requirements of law, regardless of the date
enacted, adopted, issued, or implemented but solely to the extent the
relevant increased costs or loss of yield would have been included if
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 28
they had been imposed under applicable increased cost provisions),
in each case, subject to customary limitations and exceptions (it
being understood that requests for payments on account of increased
costs resulting from market disruption shall be limited to
circumstances generally affecting the banking market and when the
Required Lenders have made a request therefor) and
(b) indemnifying the New Senior Secured Term Lenders for
“breakage costs” incurred in connection with, among other things,
any prepayment of a Eurodollar Loan on a day other than the last
day of an interest period with respect thereto.
The Term Loan Definitive Documentation will contain a customary
tax gross up, it being understood that the gross up obligations shall
not apply to withholding taxes imposed as a result of the failure to
comply with the requirements of current Sections 1471 through 1474
of the Internal Revenue Code (or any amended or successor
provisions that are substantively comparable and not materially more
onerous to comply with), and any current or future regulation
promulgated thereunder or guidance or interpretation issued pursuant
thereto, consistent with the Documentation Considerations.
The Term Loan Definitive Documentation will (a) contain
provisions regarding the timing for asserting a claim in respect of
yield protection and/or taxes and (b) require that each New Senior
Secured Term Lender asserting any such claim certify to the
Borrower that it is generally requiring reimbursement for the
relevant amounts (including in respect of taxes) from similarly
situated borrowers under comparable syndicated credit facilities.
Expenses and Indemnification: The Borrower will pay (a) all reasonable and documented out-of-
pocket expenses of the Administrative Agent incurred on or after the
Closing Date within 30 days of a written demand therefor, together
with backup documentation supporting such reimbursement request,
associated with the syndication of the New Senior Secured Term
Facility and the preparation, execution, delivery and administration
of the Term Loan Definitive Documentation and any amendment or
waiver with respect thereto (but limited, in the case of legal fees and
expenses, to the actual reasonable and documented out-of-pocket
fees, disbursements and other charges of U.S. and Canadian counsel
to the Administrative Agent, and, if reasonably necessary, of one
local counsel in any relevant local jurisdiction to such persons, taken
as a whole) and (b) all reasonable and documented out-of-pocket
expenses of the Administrative Agent within 30 days of a written
demand therefor, together with backup documentation supporting
such reimbursement request (but limited, in the case of legal fees
and expenses, to the actual reasonable and documented out-of-
pocket fees, disbursements and other charges of one U.S. or one
Canadian counsel to the Administrative Agent, taken as a whole,
solely in the case of an actual or potential conflict of interest, one
additional counsel to all affected persons, taken as a whole, and, if
necessary, of one local counsel in any relevant jurisdiction to such
persons, taken as a whole, and, solely in the case of an actual or
Term Sheet – New Senior Secured Term Loans
Schedule D-1 – Page 29
potential conflict of interest, one local counsel in any relevant
jurisdiction to all affected persons, taken as a whole) in connection
with the enforcement of the Term Loan Definitive Documentation.
The Administrative Agent and the New Senior Secured Term
Lenders and their respective affiliates and controlling persons (and
their respective directors, officers, employees, partners, agents,
advisors and other representatives) (each, an “indemnified person”)
will be indemnified for and held harmless against, any losses,
claims, damages, liabilities or expenses (but limited, in the case of
legal fees and expenses, to the actual reasonable and documented
out-of-pocket fees, disbursements and other charges of one U.S. and
one Canadian counsel to all indemnified persons taken as a whole
and, solely in the case of an actual or potential conflict of interest,
one additional counsel to each similarly situated group of affected
indemnified persons taken as a whole, and, if reasonably necessary,
one local counsel in any relevant jurisdiction to all indemnified
persons, taken as a whole, and solely in the case of any such actual
or potential conflict of interest, one additional local counsel to each
similarly situated group of affected indemnified persons, taken as a
whole, in each relevant jurisdiction) incurred in respect of the New
Senior Secured Term Facility or the use or the proposed use of
proceeds thereof, except to the extent they arise from the gross
negligence, bad faith or willful misconduct of, or material breach of
the Term Loan Definitive Documentation by, such indemnified
person, in each case as determined by a final, non-appealable
judgment of a court of competent jurisdiction or any dispute solely
among the indemnified persons (other than any claims against an
indemnified person in its capacity as the Administrative Agent) and
that does not arise out of any act or omission of the Borrower or any
of its subsidiaries. Notwithstanding the foregoing, each indemnified
person shall be obligated to refund and return any and all amounts
paid by the Borrower to such indemnified person for fees, expenses
or damages to the extent such indemnified person is not entitled to
payment of such amounts in accordance with the terms hereof.
Governing Law and Forum: New York; provided, that, any Term Loan Definitive Documentation
that governs any security interest in and/or lien on any Collateral
will be governed by the laws of the jurisdiction in which such
security interest and/or lien is intended to be created and/or perfected
(subject to the terms hereof).
Counsel to the Administrative
Agent and the New Senior
Secured Term Lenders:
[__].
Term Sheet – New Senior Secured Term Loans
Annex I to Schedule D-1 – Page 1
Annex I to Schedule D-1
INTEREST AND CERTAIN FEES
Interest Rate Options: The Borrower may elect that the New Senior Secured Term Loans
comprising each borrowing bear interest at a rate per annum equal
to (a) the ABR (as defined below) plus the Applicable Margin (as
defined below), (b) the Eurodollar Rate (as defined below) plus the
Applicable Margin or (c) EURIBOR (as defined below) plus the
Applicable Margin.
As used herein:
“ABR” means the highest of (a) the rate of interest publicly
announced by the Administrative Agent as its prime rate in effect at
its principal office in New York City (the “Prime Rate”), (b) the
federal funds effective rate from time to time plus 0.50% per
annum, (c) the 1-month Published LIBOR Rate (as defined below)
plus 1.00% per annum and (d) in the case of New Senior Secured
Term Loans, 1.00% per annum.
“ABR Loans” means New Senior Secured Term Loans bearing
interest based upon the ABR. ABR Loans will be made available
on same day notice.
“Applicable Margin” means New Senior Secured Term Loans (A)
in USD, (i) 4.50% in the case of ABR Loans and (ii) 5.50% in the
case of Eurodollar Loans and EURIBOR Loans, and (B) in Euros,
5.25%.
“EURIBOR” means EURIBOR (to be defined on a basis
reasonably acceptable to the Administrative Agent) for the
applicable interest period on the date of determination;
provided, that EURIBOR shall be no less than 1.00%.
“EURIBOR Loans” means New Senior Secured Term Loans
bearing interest based upon EURIBOR.
“Eurodollar Loans” means New Senior Secured Term Loans
bearing interest based upon the Eurodollar Rate.
“Eurodollar Rate” means the higher of (a) rate for eurodollar
deposits for a period equal to 1, 2, 3, 6, or, if available to all
relevant affected New Senior Secured Term Lenders, 12 months or
a shorter period (as selected by the Borrower) appearing on Reuters
Screen LIBOR01 Page (or otherwise on the Reuters screen) (the
“Published LIBOR Rate”) (as adjusted for statutory reserve
requirements for eurocurrency liabilities) and (b) 1.00%.
Interest Payment Dates: In the case of ABR Loans, quarterly in arrears.
In the case of Eurodollar Loans, on the last day of each relevant
interest period and, in the case of any interest period longer than 3
Term Sheet – New Senior Secured Term Loans
Annex I to Schedule D-1 – Page 2
months, on each successive date 3 months after the first day of such
interest period.
In the case of EURIBOR Loans, on the last day of each relevant
interest period and, in the case of any interest period longer than 3
months, on each successive date 3 months after the first day of such
interest period.
Default Rate: At any time when a payment event of default (with respect to any
principal, interest, premium or fees) under the New Senior Secured
Term Facility exists, the relevant overdue amounts shall bear
interest, to the fullest extent permitted by law, at 2.00% per annum
above the rate then borne by (in the case of principal) such
borrowings or (in the case of interest) the borrowings to which such
overdue amount relates.
Rate and Fee Basis: All per annum rates shall be calculated on the basis of a year of
360 days (or 365/366 days, in the case of ABR Loans the interest
payable on which is then based on the Prime Rate) for actual days
elapsed.
Interest Act (Canada) For purposes of the Interest Act (Canada), where in the Term Loan
Definitive Documentation a rate of interest is to be calculated on
the basis of a year of 360, 365 or 366 days, as applicable, the yearly
rate of interest to which the rate is equivalent is the rate multiplied
by the number of days in the year for which the calculation is made
and divided by 360, 365 or 366, as applicable. The rates of interest
under the Term Loan Definitive Documentation shall be nominal
rates, and not effective rates or yields. The principle of deemed
reinvestment of interest does not apply to any interest calculation
under the Term Loan Definitive Documentation.
Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 1
Annex II to Schedule D-1
COVENANT AND EVENT OF DEFAULT ANNEX
Affirmative Covenants: Limited to the following: delivery of (a) annual (i) audited
financial statements within 90 days of the end of each fiscal year
(accompanied by an opinion of an independent accounting firm that
is not subject to (A) a “going concern” qualification (other than a
“going concern” qualification resulting from the maturity of any
Credit Facility within 12 months of the relevant audit opinion or the
breach or anticipated breach of any financial covenant or (B) a
qualification as to the scope of the relevant audit) and (ii)
management’s discussion and analysis, (b) (i) quarterly unaudited
financial statements and (ii) management’s discussion and analysis
(for each of the first 3 fiscal quarters of each fiscal year) within 45
days, (c) an annual budget within 90 days of the end of each fiscal
year, (d) officers’ certificates and other information reasonably
requested by the Administrative Agent, (e) quarterly lender calls, (f)
notices of default and events that would reasonably be expected to
have a Material Adverse Effect, (g) maintenance of books and
records; (h) maintenance of existence; compliance with laws
(including (i) ERISA and environmental laws and (ii) OFAC,
FCPA, UKBA, Canadian Anti-Corruption and Sanctions Laws, and
the PATRIOT Act and, to the extent applicable, other anti-terrorism
laws, anti-bribery and corruption laws, anti-money laundering laws
and laws and measures related to export control and sanctioned
persons and activities (including, but not limited to, export control
and sanctions laws and measures imposed by the United States, the
European Union or its Member States, or the United Kingdom)), (i)
maintenance of property and insurance, (j) payment of taxes, (k)
right of the Administrative Agent to inspect property and books and
records (subject, absent a continuing event of default, to frequency
and cost reimbursement limitations), (l) commercially reasonable
efforts to maintain public ratings (but not specific ratings), (m)
designation of Unrestricted Subsidiaries, (n) use of proceeds, (o)
with respect to any Loan Party subject to European Insolvency
Regulation, change its centre of main interest, (p) Companies Xxx
0000, Ireland, (q) GDPR and (r) further assurances on guaranty and
Collateral matters (including, without limitation, with respect to
additional guarantees and security interests in after-acquired
property), subject to the parameters set forth under
“COLLATERAL” in Schedule D-1.
The foregoing affirmative covenants shall apply to the Borrower
and its Restricted Subsidiaries, and shall be subject to Material
Adverse Effect exceptions consistent with the Documentation
Considerations.
Negative Covenants: Limited to the following and applicable to the Borrower and its
Restricted Subsidiaries:
- 2 -
Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 2
(a) indebtedness (including guarantee obligations in respect of
indebtedness), with exceptions for, among other things,
(i) purchase money indebtedness and Capital Lease
Obligations in an aggregate outstanding principal
amount not to exceed, at the time of incurrence of
such indebtedness (and after giving effect thereto),
the greater of (i) $29,000,000 and (ii) 1.25% of
Consolidated Total Assets (to be defined in a manner
consistent with the Definitive Documentation);
(ii) indebtedness existing on the Closing Date (A)
expressly permitted pursuant to the Recapitalization
Transaction or (B) with a principal amount of less
than $100,000, and, in each case, any refinancing
indebtedness incurred to refinance any such
indebtedness (the “Permitted Surviving Debt”);
(iii) other Indebtedness of the Borrower or any Restricted
Subsidiary secured on a pari passu or junior Lien
basis with respect to the Liens securing the
obligations or on an unsecured basis; provided, that
(A) in the case of indebtedness secured on a pari
passu or senior basis (including the Revolving
Facility), the Secured Net Leverage Ratio
(calculated on a pro forma basis) as of the end of
the most recently completed four consecutive
fiscal quarters of the Borrower ending on or
before such date for which financial statements
have been delivered (the “Test Period”) is not
greater than 5.00:1.00, and
(B) in the case of indebtedness secured on a junior
basis or secured by assets other than the
Collateral or unsecured indebtedness, the Total
Net Leverage Ratio (calculated on a pro forma
basis) as of the end of the most recent Test
Period is not greater than 6.50:1.00,
provided further that, in the case of any indebtedness
incurred under this clause (iii), (1) such indebtedness
shall not mature prior to the date that is 91 days after
the Maturity Date of the New Senior Secured Term
Loans or have a Weighted Average Life to Maturity
less than the Weighted Average Life to Maturity of the
New Senior Secured Term Loans plus 91 days, (2)
such indebtedness shall not have mandatory
prepayment, redemption or offer to purchase events
more onerous than those set forth in herein except to
the extent applying to periods solely after the Maturity
Date of New Senior Secured Term Loans outstanding
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 3
hereunder, (3) the other terms and conditions of such
indebtedness reflect market terms and conditions at the
time of incurrence or issuance of such indebtedness,
(4) to the extent (x) any such indebtedness incurred is
secured by a lien on the Collateral or (y) the aggregate
principal amount of any such indebtedness is in excess
of $25,000,000 and such indebtedness is incurred by a
Restricted Subsidiary that is not organized under the
laws of Canada or the United States, such indebtedness
is incurred or issued subject to an Intercreditor
Agreement, (5) if any such Indebtedness is secured on
a pari passu basis with respect to the liens securing the
obligations, then such indebtedness shall be in the
form of notes or other debt securities in each case and
(6) prior to January 1, 2019, such indebtedness may
only be incurred to finance Permitted Acquisitions and
(ii) any refinancing indebtedness incurred in respect
thereof;
(iv) indebtedness of the Borrower and the other Loan
Parties under a revolving facility which may provide
for “super-priority” status under customary terms,
including a “first-out” basis in the Collateral waterfall
provision, in an aggregate principal amount of up to
the greater of (x) $150 million at any time
outstanding or (y) 50% of Consolidated Adjusted
EBITDA (pro forma for any acquisitions), with a total
outstanding principal amount not to exceed $250
million (the “Revolving Facility”), the proceeds of
which shall not be used to fund any acquisitions, joint
ventures, minority investments or investments in
Unrestricted Subsidiaries, ;
(v) indebtedness owed to (including obligations in
respect of letters of credit or bank guarantees, or
similar instruments for the benefit of) any Person
providing workers’ compensation, health, disability
or other employee benefits or property, casualty or
liability insurance pursuant to reimbursement or
indemnification obligations to such Person, in each
case, in the ordinary course of business; provided
that, upon the incurrence of indebtedness with respect
to reimbursement obligations regarding workers’
compensation claims, such obligations are reimbursed
not later than sixty (60) days following such
incurrence;
(vi) indebtedness incurred in connection with any
Refinancing Facility and/or in connection with any
Refinancing Notes;
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 4
(vii) intercompany debt without limitation; provided, that
(A) loans made (and guarantees provided) by Loan
Parties to (or in favor of) Restricted Subsidiaries that
are not Loan Parties will be subject to the Investment
covenant described below, (B) the aggregate principal
amount of such indebtedness incurred pursuant to this
subclause (vii) by a Restricted Subsidiary that is not a
Loan Party owing to a Loan Party and investments by
Loan Parties in Restricted Subsidiaries that are not
Loan Parties and will not become a Loan Party in
connection with the incurrence of the Investment
covenant below, shall not exceed in the aggregate the
greater of (x) $58,000,000 and (y) 2.50% of
Consolidated Total Assets, (C) to the extent the
aggregate principal amount of any such indebtedness
is in excess of $25,000,000 and such indebtedness is
incurred by a Restricted Subsidiary that is not
organized under the laws of Canada or the United
States, such indebtedness is incurred or issued subject
to an Intercreditor Agreement and (D) the obligation
of any Loan Party to repay any loan made by any
Restricted Subsidiary that is not a Loan Party shall be
subject to customary subordination provisions;
(viii) indebtedness assumed in connection with any
acquisition permitted under the Term Loan Definitive
Documentation so long as (A) the relevant
indebtedness was not incurred in contemplation of the
relevant acquisition, (B) no event of default then
exists or would result therefrom and (C) after giving
effect to the assumption of such indebtedness and
such acquisition on a pro forma basis as of the last
day of the most recent fiscal quarter of the Borrower
for which financial statements have been made
available, the Total Net Leverage Ratio (calculated on
a pro forma basis) (x) does not exceed 6.50:1.00 or
(y) would be equal to or less than immediately prior
to such assumption of Indebtedness and such
Permitted Acquisition;
(ix) indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar
instrument drawn against insufficient funds in the
ordinary course of business or other cash
management treasury services in the ordinary course
of business,
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 5
(x) indebtedness in respect of performance bonds, bid
bonds, appeal bonds, surety bonds and completion
guarantees and similar obligations, including (A)
those incurred to secure health, safety and
environmental obligations and (B) performance
guarantees of suppliers, customers, franchisees and
licensees of the Borrower and its Restricted
Subsidiaries;
(xi) guarantees (A) by the Borrower or any Loan Party of
any indebtedness of the Borrower or any Loan Party
permitted to be incurred, (B) by the Borrower or any
Loan Party of indebtedness otherwise permitted
hereunder of any Restricted Subsidiary that is not a
Loan Party to the extent such guarantees are
permitted by the Investment covenant below and (C)
by any Restricted Subsidiary of the Borrower that is
not a Loan Party of indebtedness of another
Restricted Subsidiary of the Borrower that is not a
Loan Party permitted to be incurred under this
Agreement; provided that guarantees by the Borrower
or any Loan Party under this clause (xi) of any other
indebtedness of a Person that is subordinated to other
indebtedness of such Person shall be expressly
subordinated to the obligations on terms not less
favorable to the New Senior Secured Term Lenders
than the subordination terms applicable to such other
indebtedness;
(xii) indebtedness incurred in connection with any
acquisition permitted under the Term Loan Definitive
Documentation so long as after giving effect pro
forma effect thereto:
(A) if such indebtedness is secured on a pari passu
basis, the Secured Net Leverage Ratio
(calculated on a pro forma basis) as of the end of
the most recent Test Period does not exceed the
greater of (1) 5.00:1.00 and (2) the Secured Net
Leverage Ratio as of the last day of the then-
most recently completed fiscal quarter (it being
understood and agreed that any such debt that is
incurred by any Loan Party in the form of term
loans that are pari passu with the New Senior
Secured Term Loans in right of payment and
with respect to security shall be subject to a
“most favored nation” pricing adjustment on the
same terms as those set forth in the MFN
Provision),
(B) if such indebtedness is secured on a junior basis,
is secured by assets other than the Collateral, or
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 6
is unsecured, the Total Net Leverage Ratio does
not exceed the greater of (1) 6.50:1.00 and (2)
the Total Net Leverage Ratio as of the last day of
the then-most recently completed fiscal quarter,
(this clause (xii), the “Incurred Acquisition Debt
Basket”);
(xiii) indebtedness arising from agreements of the
Borrower or any Restricted Subsidiary providing for
indemnification, adjustment of purchase price or
similar obligations (including contingent earn-out
obligations), in each case, incurred or assumed in
connection, and substantially simultaneously with, or
prior to and for the purpose of consummating, any
acquisition permitted under the Term Loan Definitive
Documentation or other investment or the disposition
of any business, assets or a subsidiary not otherwise
prohibited, other than guarantees of indebtedness for
borrowed money incurred for the purpose of
financing such acquisition or other investment or the
acquisition of such business, assets or subsidiary;
(xiv) any secured or unsecured notes or loans issued or
borrowed in lieu of loans under the New Senior
Secured Incremental Term Facility (so long as the
applicable conditions to borrowing loans under the
New Senior Secured Incremental Term Facility would
have been satisfied) (any such notes or loans, “New
Senior Secured Incremental Equivalent Debt”) and
any permitted refinancing indebtedness in respect
thereof; it being understood that (A) the New Senior
Secured Term Facility shall not be subject to a “most
favored nation” pricing adjustment as a result of the
issuance or incurrence of any New Senior Secured
Incremental Equivalent Debt (other than New Senior
Secured Incremental Equivalent Debt consisting of
syndicated term loans that are pari passu with the
New Senior Secured Term Loans in right of payment
and security), and (B) the requirements set forth in
clause (v)(B) under the heading “New Senior Secured
Incremental Term Facility” shall not apply to any
New Senior Secured Incremental Equivalent Debt (it
being understood and agreed that the terms and
conditions of such New Senior Secured Incremental
Equivalent Debt subject to clause (v)(B) under the
heading “New Senior Secured Incremental Term
Facility” (excluding, for the avoidance of doubt,
margin, pricing, maturity and/or fees) of the relevant
New Senior Secured Incremental Equivalent Debt
may not be more favorable (taken as a whole and as
reasonably determined by the Borrower) to the
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 7
lenders providing such New Senior Secured
Incremental Equivalent Debt than those applicable to
the analogous New Senior Secured Term Facility
(except for covenants or other provisions applicable
only to periods after the latest final maturity date of
the relevant New Senior Secured Term Facility
existing at the time of the implementation of such
New Senior Secured Incremental Equivalent Debt) or,
other than in the case of New Senior Secured
Incremental Equivalent Debt consisting of term loans
that are pari passu with the New Senior Secured Term
Loans in right of payment and security, such terms
may be current market terms for the applicable type
of indebtedness);
(xv) indebtedness incurred in connection with (A) Secured
Hedging Agreements permitted under the Term Loan
Definitive Documentation and (B) Secured Cash
Management Arrangements;
(xvi) indebtedness arising pursuant to appeal bonds or
similar instruments required in connection with
judgments that do not result in a default or Event of
Default;
(xvii) indebtedness consisting of (x) the financing of
insurance premiums or (y) take-or-pay obligations
contained in supply arrangements, in each case, in the
ordinary course of business;
(xviii) indebtedness in an aggregate amount not exceeding
the aggregate gross amount of “qualified” capital
contributions (made in cash or which are converted
into cash) and proceeds of Permitted Equity issuances
(other than proceeds of Permitted Equity issuances
that are applied in reliance on the Cumulative Credit)
by the Borrower (or any direct or indirect parent
company) after the Closing Date that are not
otherwise applied;
(xix) indebtedness of the Borrower and the Restricted
Subsidiaries incurred under overdraft facilities
(including, but not limited to, intraday, automated
clearing house and purchasing card services)
extended by one or more financial institutions and
established for the Borrower’s and the Restricted
Subsidiaries’ ordinary course of operations;
(xx) indebtedness in respect of letters of credit, bank
guarantees, warehouse receipts or similar instruments
issued to support performance obligations and trade
letters of credit (other than obligations in respect of
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 8
other indebtedness) in each case, incurred in the
ordinary course of business;
(xxi) unsecured indebtedness in respect of obligations to
pay the deferred purchase price of goods or services
or progress payments in connection with such goods
and services incurred in the ordinary course of
business and not in connection with the borrowing of
money or any Hedge Agreements;
(xxii) indebtedness representing deferred compensation to
employees, directors or consultants incurred in the
ordinary course of business;
(xxiii) indebtedness consisting of promissory notes issued to
current or former officers, directors and employees,
or their respective estates or family members, in each
case, to finance the purchase or redemption of Equity
Interests of the Borrower permitted by the
Investments covenant below;
(xxiv) indebtedness consisting of obligations under deferred
compensation or other similar arrangements incurred
by such Person in connection with any acquisition
permitted under the Term Loan Definitive
Documentation or any other Investment permitted
hereunder;
(xxv) guarantees of any lease permitted hereunder of real
property entered into by the Borrower or any
Restricted Subsidiary;
(xxvi) [reserved];
(xxvii) indebtedness in an aggregate amount equal to 100%
of the net cash proceeds received by the Borrower
from the issuance or sale of its Equity Interests (other
than disqualified stock) after the Closing Date
excluding any equity interests issued or capital
contribution made on or prior to the Closing Date;
(xxviii) a general debt basket in an aggregate outstanding
principal amount not to exceed the greater of (x)
$40,500,000 and (y) 1.75% of Consolidated Total
Assets; provided that, to the extent the aggregate
principal amount of any such indebtedness is in
excess of $25,000,000 and such indebtedness is
incurred by a Restricted Subsidiary that is not
organized under the laws of Canada or the United
States, such indebtedness is incurred or issued subject
to an Intercreditor Agreement;
(xxix) indebtedness of any Restricted Subsidiary that is not a
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 9
Loan Party under any working capital or similar line
of credit in an aggregate outstanding principal amount
not to exceed an amount to be agreed;
(xxx) solely with respect to the New Senior Secured Term
Loans, the New Senior Secured Notes, including any
Refinancing Facility incurred in respect thereof;
(xxxi) solely with respect to the New Senior Secured Notes,
the New Senior Secured Term Loans, including any
New Senior Secured Incremental Term Facility and
any Refinancing Facility incurred in respect thereof;
(xxxii) all premium (if any), interest (including post-petition
interest), fees, expenses, charges and additional or
contingent interest on obligations described in
subclauses (i) through (xxviii) above;
provided that any such indebtedness incurred by
Restricted Subsidiaries that are not Loan Parties
pursuant to clauses (iii), (iv), (vi), (xii), (xiv), (xviii),
(xxvii) and (xxviii) above, shall not exceed an
aggregate principal amount outstanding equal to the
greater of (i) $58,000,000 and (ii) 2.5% of
Consolidated Total Assets;
(b) liens, with exceptions for, among other things,
(i) (A) any lien created under the Definitive
Documentation (including, without limitation, liens
created under the collateral documents securing
obligations in respect of Hedge Agreements to the
extent such obligations constitute obligations secured
pursuant to the collateral documents), any lien created
under the Definitive Documentation evidencing any
other indebtedness permitted under clause (vi) of the
indebtedness covenant above, and (B) liens securing
any Refinancing Facility and/or issuance of
Refinancing Notes,
(ii) liens in respect of taxes that (x) are being contested in
good faith and are subject to appropriate reserves to
the extent required under IFRS, or (y) the non-
payment of which, individually or in the aggregate,
would not reasonably be expected to result in a
Material Adverse Effect,
(iii) [reserved],
(iv) any lien securing Indebtedness permitted by clause
(xix) of the indebtedness covenant above or
Refinancing indebtedness in respect thereof
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 10
(v) liens securing (A) Permitted Surviving Debt and (B)
liens existing on the Closing Date securing property
or assets having a fair market value not to exceed
$1,000,000 individually, and $5,000,000 in the
aggregate and, in each case, any modifications,
replacements, renewals or extensions thereof,
(vi) [reserved],
(vii) subject, if applicable, to Acceptable Intercreditor
Arrangements, liens securing debt incurred in reliance
on the Incurred Acquisition Debt Basket, subject to
the applicable conditions set forth therein,
(viii) liens securing pari passu or junior lien Indebtedness
permitted pursuant to clause (iii) of the debt covenant
above; provided that (i) in the case of junior lien
indebtedness, such liens rank junior to the liens on the
Collateral securing the obligations (but may not be
secured by any assets that are not Collateral) and (ii)
in each case, the beneficiaries thereof (or an agent on
their behalf), shall have entered into an Intercreditor
Agreement or other intercreditor arrangements
reasonably acceptable to the Administrative Agent;
(ix) [reserved];
(x) liens for Taxes, assessments or other governmental
charges or levies not yet delinquent or that are being
contested in compliance with clause (j) of the
“Affirmative Covenants” above;
(xi) liens imposed by law (including landlord’s, carriers’,
warehousemen’s, mechanics’, materialmen’s,
repairmen’s, construction or other like liens) arising
in the ordinary course of business and securing
obligations that are not overdue by more than 60 days
or that are being contested in good faith by
appropriate proceedings and in respect of which, if
applicable, the Borrower or any Restricted Subsidiary
shall have set aside on its books reserves in
accordance with IFRS;
(xii) (i) pledges and deposits and other liens made in the
ordinary course of business in compliance with the
Federal Employers Liability Act or any other
workers’ compensation, un- employment insurance
and other social security laws or regulations and
deposits securing liability to insurance carriers under
insurance or self-insurance arrangements in respect of
such obligations and (ii) pledges and deposits and
other liens securing liability for reimbursement or
indemnification obligations of (including obligations
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 11
in respect of letters of credit or bank guarantees for
the benefit of) insurance carriers providing property,
casualty or liability insurance;
(xiii) deposits and other liens to secure the performance of
bids, trade contracts (other than for Indebtedness),
leases (other than Capital Lease Obligations),
statutory obligations, surety and appeal bonds,
performance and return of money bonds, bids, leases,
government contracts, trade contracts, agreements
with public utilities, customs duties, and other
obligations of a like nature (including letters of credit
in lieu of any such bonds or to support the issuance
thereof) incurred by the Borrower or any Restricted
Subsidiary in the ordinary course of business that do
not materially and adversely affect the conduct of the
business of the Borrower and its Restricted
Subsidiaries taken as a whole, including those
incurred to secure health, safety and environmental
obligations in the ordinary course of business;
(xiv) zoning restrictions, survey exceptions and such
matters as an accurate survey would disclose,
easements, trackage rights, leases (other than Capital
Lease Obligations), licenses, special assessments,
rights-of-way covenants, conditions, restrictions and
declarations on or agreements with respect to the use
of real property, servicing agreements, development
agreements, site plan agreements and other similar
encumbrances incurred in the ordinary course of
business and title defects or irregularities that, in the
aggregate, do not interfere in any material respect
with the business of the Borrower and the Restricted
Subsidiaries, taken as a whole;
(xv) liens securing indebtedness permitted to be incurred
pursuant to any sale and lease-back transactions so
long as such liens attach only to the property to which
such Indebtedness relates (or accessions to such
property and proceeds thereof);
(xvi) liens securing judgments that do not constitute an
Event of Default under clause (ix) of Events of
Default, below;
(xvii) liens in favor of the Borrower or any Restricted
Subsidiary;
(xviii) liens on property existing at the time of a Permitted
Acquisition thereof by the Borrower or any Restricted
Subsidiary of the Borrower; provided that such liens
were not incurred in contemplation of or in
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 12
connection with such Permitted Acquisition and do
not extend to any property other than the property so
acquired by the Borrower or the Restricted
Subsidiary;
(xix) any security interest or set-off arrangements entered
into by the Borrower or any of its subsidiaries in the
ordinary course of its banking arrangements which
arise from the general banking conditions (algemene
bankvoorwaarden);
(xx) any interest or title of a lessor or sublessor under any
leases or subleases entered into by the Borrower or
any Restricted Subsidiary in the ordinary course of
business;
(xxi) liens that are contractual rights of set-off, off-set or
recourse to account balances (i) relating to the
establishment of depository relations with banks not
given in connection with the issuance of
Indebtedness, (ii) relating to pooled deposit or sweep
accounts or cash pooling arrangements (including
with respect to any joint and several liability
provisions in relation thereto) of the Borrower or any
Restricted Subsidiary to permit satisfaction of
overdraft or similar obligations incurred in the
ordinary course of business of the Borrower and the
Restricted Subsidiaries, (iii) relating to debit card or
other payment services or (iv) relating to purchase
orders and other agreements (other than Indebtedness
for borrowed money) entered into with customers in
the ordinary course of business;
(xxii) liens arising by virtue of any statutory or common
law provisions or similar provisions applicable in
foreign jurisdictions relating to banker’s liens, rights
of set-off or similar rights;
(xxiii) liens securing obligations in respect of trade-related
letters of credit, trade-related bank guarantees or
similar trade-related obligations permitted under
clause (xx) of the debt covenant above, and covering
the goods (or the documents of title in respect of such
goods) financed by such letters of credit, bank
guarantees or similar obligations and the proceeds
and products thereof;
(xxiv) leases or subleases, licenses or sublicenses granted to
or from others in the ordinary course of business and
not interfering in any material and adverse respect
with the business of the Borrower and the Restricted
Subsidiaries, taken as a whole;
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 13
(xxv) 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;
(xxvi) liens on the assets of a subsidiary of the Borrower that
is not a Loan Party that secure obligations of a
subsidiary of the Borrower that is not a Loan Party
permitted to be incurred under the debt covenants
above; provided that such liens secure obligations in
an aggregate principal or other amount outstanding at
any time not exceeding the greater of (x) 23,000,000
and (y) 1.0% of Consolidated Total Assets;
(xxvii) set-off and early termination rights under Hedge
Agreements;
(xxviii) (i) liens solely on any xxxx xxxxxxx money deposits
made by the Borrower or any of the Restricted
Subsidiaries in connection with any letter of intent or
purchase agreement permitted hereunder and (ii) liens
on the proceeds of Indebtedness in favor of the
lenders or holders of such Indebtedness and their
agents or representatives pending the application of
such proceeds to a Permitted Acquisition or other
Investment permitted hereunder or any refinancing;
(xxix) liens arising out of consignment or similar
arrangements for the sale of goods entered into in the
ordinary course of business;
(xxx) liens securing insurance premium financing
arrangements, provided that such liens are limited to
the applicable unearned insurance premiums;
(xxxi) liens securing Hedge Agreements and submitted for
clearing in accordance with applicable law;
(xxxii) liens arising from precautionary UCC financing
statements or similar or analogous financing
statements in any jurisdiction;
(xxxiii) liens arising from the right of distress enjoyed by
landlords or lessors or liens otherwise granted to
landlords or lessors, in either case, to secure the
payment of arrears of rent in respect of leased
properties;
(xxxiv) [reserved];
(xxxv) deemed trusts or other liens that are unregistered and
that secure amounts that are not yet due and payable
and delinquent in respect of unpaid wages, vacation
pay, employee or non-resident withholding tax source
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 14
deductions, goods and services taxes, sales taxes,
harmonized sales taxes, municipal taxes, workers’
compensation, unemployment insurance, pension
fund obligations and realty taxes;
(xxxvi) liens on Equity Interests of any joint venture or
Unrestricted Subsidiary (i) securing obligations of
such joint venture or Unrestricted Subsidiary, as the
case may be, or (ii) pursuant to the relevant joint
venture agreement or arrangement;
(xxxvii) liens on securities that are the subject of repurchase
agreements constituting Cash Equivalents under
clause (iii) of the definition thereof;
(xxxviii) liens securing the Borrower’s or its subsidiaries’
obligations in relation to corporate aircraft, including
rights under any lease, sublease, charter,
management, operating, crew, service, repair,
maintenance, storage or other agreement relating to
the aircraft, rights in the aircraft and any parts,
accessions and accessories thereto, rights under
insurance policies and security deposits and rights in
income derived from and proceeds of any of the
foregoing, in the ordinary course;
(xxxix) liens securing obligations under any Secured Hedge
Agreements or Secured Cash Management
Agreements;
(xl) licenses, sublicenses, covenants not to xxx, releases or
other rights under Intellectual Property granted to
others (including in connection with distribution,
license and supply agreements) in the ordinary course
of business or in the reasonable business judgment of
the Borrower or any of the Restricted Subsidiaries;
(xli) liens securing Indebtedness permitted to be incurred
pursuant to clause (i) of the debt covenants above;
provided that (i) such liens attach concurrently with
or within 270 days after the acquisition, installation,
repair or improvement (as applicable) of the property
subject to such liens, (ii) such liens do not at any time
encumber any property other than the property
financed by such Indebtedness, replacements thereof
and additions and accessions to such property, the
proceeds and the products thereof, customary security
deposits and insurance and (iii) with respect to
Capital Lease Obligations, such liens do not at any
time extend to or cover any assets (except for
additions and accessions to such assets, replacements
and products thereof, customary security deposits and
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 15
insurance) other than the assets subject to such
Capital Lease Obligations; provided, further, that
individual financings of equipment provided by one
creditor may be cross-collateralized to other
financings of equipment provided by such creditor;
(xlii) liens securing Indebtedness permitted by clause
(a)(viii) above may be secured by Liens on the newly
acquired assets or assets of the newly acquired
subsidiary; provided that such Indebtedness was not
created in contemplation of the acquisition of such
assets or subsidiary by the Borrower or any Restricted
Subsidiary; provided, further, that the Senior Secured
Net Leverage Ratio on a Pro Forma Basis is no
greater than 5.00:1.00; and
(xliii) liens securing Indebtedness or other obligations in an
aggregate principal or other amount outstanding at
any time not exceeding the greater of (x) $40,500,000
and (y) 1.75% of Consolidated Total Assets.
(c) mergers, consolidations and sales of assets, with exceptions
for, among others:
(i) any Restricted Subsidiary may be merged or
consolidated or amalgamated with or into the
Borrower or any Restricted Subsidiary; provided that
(A) in the case of a merger, amalgamation or
consolidation involving (x) the Borrower, the
Borrower shall be the continuing or surviving Person
or (y) an Additional Borrower, such Additional
Borrower shall be the continuing or surviving Person
and (B) in the case of a merger, amalgamation or
consolidation involving any other Loan Party, either
(x) such Loan Party shall be the continuing or
surviving Person or the continuing or surviving
Person shall be or become a Loan Party or (y) such
transaction shall be treated as an Investment;
(ii) sales or other dispositions among the Borrower and
its Restricted Subsidiaries or by and among Restricted
Subsidiaries (upon voluntary liquidation or
otherwise); provided that any such sale or disposition
by a Loan Party to a Person that is not a Loan Party
shall be (A) for fair market value or (B) treated as an
Investment;
(iii) the liquidation or dissolution of any Restricted
Subsidiary or change in form of entity of any
Restricted Subsidiary if (A) the Borrower determines
in good faith that such liquidation, dissolution or
change in form is (1) in the best interests of the
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Annex II to Schedule D-1 – Page 16
Borrower and its Restricted Subsidiaries, taken as a
whole, and (2) either the Borrower or a Restricted
Subsidiary receives any assets of such dissolved or
liquidated Restricted Subsidiary; provided that in the
case of a dissolution or liquidation of a Loan Party
that results in a distribution of assets to a subsidiary
that is not a Loan Party, such distribution shall be
treated as an Investment and shall be subject to the
restrictions under clause (e) below and (3) any
merger, amalgamation, dissolution, liquidation or
consolidation, the purpose of which is to effect (A) a
sale or disposition otherwise permitted under this
clause (c) (other than clause (ii) above or this clause
(iii)); provided, further, in the case of a change in the
form of entity of any Restricted Subsidiary that is a
Loan Party, after such change, the security interests of
the Collateral Agent and the Secured Parties in the
Collateral of such Loan Party shall remain in full
force and effect and be perfected to the same extent as
prior to such change or (B) an Investment permitted
under clause (e) below;
(iv) (x) sales or leases of inventory in the ordinary course
of business, (y) the leasing or subleasing of real
property in the ordinary course of business and (z)
leases, subleases, assignments, licenses, cross-
licenses and sublicenses of assets in the ordinary
course of business to third persons not interfering in
any material respect with the business of the
Borrower or any of its Restricted Subsidiaries;
(v) disposals of surplus, obsolete, damaged, used or worn
out property or other property that is no longer useful;
(vi) dispositions of Cash Equivalents;
(vii) dispositions, mergers, amalgamations, consolidations
or conveyances that constitute liens, Investments or
Restricted Payments permitted hereby;
(viii) sales or other dispositions of any assets of the
Borrower or any Restricted Subsidiary for fair market
value; provided that at least 75.0% of the
consideration for such sale or disposition shall consist
of (x) cash and Cash Equivalents, (y) any securities,
notes, Equity Interests or other obligations received
by the Borrower or any such Restricted Subsidiary
from such transferee that are converted by the
Borrower or such Restricted Subsidiary into cash
within 180 days of their receipt, to the extent of the
cash received in that conversion, and (z) any
Designated Non-Cash Consideration received by the
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Annex II to Schedule D-1 – Page 17
Borrower or any such Restricted Subsidiary in such
sale or other disposition having an aggregate fair
market value, taken together with all other Designated
Non-Cash Consideration received pursuant to this
clause (z) that is at that time outstanding, not to
exceed $35,000,000 at the time of the receipt of such
Designated Non-Cash Consideration, with the fair
market value of each item of Designated Non-Cash
Consideration being measured at the time received
and without giving effect to subsequent changes in
value, in each case, shall be deemed to be Cash
Equivalents; provided that to the extent provided
therein, the net cash proceeds of any sale or
disposition permitted pursuant to this clause (viii)
shall be subject to the “MANDATORY
PREPAYMENTS” in Schedule D-1;
(ix) to the extent that (A) the relevant property or assets
are exchanged for credit against the purchase price of
similar replacement property or (B) the proceeds of
the relevant sale or disposition are promptly applied
to the purchase price of such replacement property, so
long as the exchange, sale or disposition is made for
fair value and on an arm’s length basis for like
property or assets; provided that upon the
consummation thereof, in the case of any Loan Party,
the Administrative Agent has a perfected lien on the
replacement property having the same priority as any
lien held on the property or assets so exchanged, sold
or disposed;
(x) dispositions of Investments in joint ventures to the
extent required by, or made pursuant to, contractual
buy/sell arrangements between the joint venture
parties set forth in joint venture arrangements and
similar binding arrangements;
(xi) sales, discounting or forgiveness of accounts
receivable in the ordinary course of business or in
connection with the collection or compromise thereof;
(xii) dispositions and/or terminations of leases, subleases,
licenses or sublicenses (including the provision of
software under an open source license), which (i) are
in the ordinary course of business, (ii) do not
materially interfere with the business of the Borrower
and its Restricted Subsidiaries taken as a whole or
(iii) relate to closed facilities or closed storage or
distribution centers or the discontinuation of any
product line;
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Annex II to Schedule D-1 – Page 18
(xiii) (i) the expiration of any option agreement in respect
of real or personal property and (ii) any surrender or
waiver of contractual rights or the settlement, release
or surrender of contractual rights or other litigation
claims in the ordinary course of business;
(xiv) transfers of property subject to a Casualty Event upon
receipt of Net Cash Proceeds of such Casualty Event;
(xv) sales of non-core assets acquired in connection with
an acquisition permitted hereunder and sales of real
estate assets acquired in an acquisition permitted
hereunder which, within 30 days of the date of the
acquisition, are designated in writing to the
Administrative Agent as being held for sale and not
for the continued operation of the Borrower or any of
the Restricted Subsidiaries or any of their respective
businesses;
(xvi) substantially contemporaneous exchanges or swaps,
including transactions covered by Section 1031 of the
Internal Revenue Code, of property or assets so long
as the exchange or swap is made for fair value and on
an arm’s length basis for like property or assets and
not to exceed $10,000,000 in the aggregate; provided
that upon the consummation of such exchange or
swap, in the case of any Loan Party, the
Administrative Agent has a perfected lien having the
same priority as any lien held on the property or
assets so exchanged or swapped;
(xvii) (A) licenses, sublicenses, covenants not to xxx,
releases or other rights under Intellectual Property
(including in connection with distribution, license and
supply agreements) granted to or from others (or
expiration or termination of any of the foregoing) in
the ordinary course of business or in the reasonable
business judgment of the Borrower or the Restricted
Subsidiaries, (B) the sale or disposal of Intellectual
Property, or any issuances or registrations, or
applications for issuances or registrations, of any
Intellectual Property, which are in the ordinary course
of business or, in the reasonable good faith
determination of the Borrower, are uneconomical,
negligible, or not material to the conduct of the
business of the Borrower and the Restricted
Subsidiaries taken as a whole, and (C) the
abandonment, cancellation or lapse of Intellectual
Property, or any issuances or registrations, or
applications for issuances or registrations, of any
Intellectual Property, in each case, in the ordinary
course of business or in the reasonable business
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Annex II to Schedule D-1 – Page 19
judgment of the Borrower or the Restricted
Subsidiaries;
(xviii) terminations of Hedge Agreements; and
(xix) sales or dispositions of Equity Interests or debt or
other securities of or in Unrestricted Subsidiaries.
(d) dividends or distributions on, or redemptions or repurchases
of, the capital stock of the Borrower (“Restricted Payments”),
with exceptions for, among other things,
(i) the Borrower may make Restricted Payments payable
solely in Qualified Stock (to be defined in a manner
consistent with the Definitive Documentation) of the
Borrower;
(ii) any Restricted Subsidiary of the Borrower may
declare and pay cash dividends to the Borrower or to
any Loan Party of which it is a subsidiary;
(iii) as expressly provided by the Recapitalization
Transaction Term Sheet;
(iv) the Borrower may repurchase Equity Interests of the
Borrower upon exercise of options or warrants if such
Equity Interests represents all or a portion of the
exercise price of such options or warrants and/or
amounts on account of required withholding taxes
and brokerage fees with respect to such options as
part of a “cashless” exercise;
(v) dividend adjustments and repurchases of Equity
Interests deemed to occur upon the exercise of stock
options, warrants or other convertible or
exchangeable securities or the vesting of restricted
stock units or deferred stock units (including any
management equity plan or stock option plan or any
other management or employee benefit plan or
agreement, or any stock subscription or shareholder
agreement);
(vi) so long as no event of default exists or would result
therefrom, payments for the repurchase of Equity
Interests of the Borrower held by any present or
former employee, director, member of management,
officer, manager or consultant (or any Affiliate or
family member thereof) as a result of the exercise by
such Person of employee stock options or the vesting
of restricted stock units or deferred stock units, in an
amount not to exceed $10,000,000 in a Fiscal Year;
(vii) [reserved];
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 20
(viii) [reserved]; and
(ix) from and after January 1, 2019, the Borrower may
make Restricted Payments with any portion of the
Cumulative Credit if, at the time such Restricted
Payment is made, no Event of Default shall have
occurred and be continuing or would result therefrom
and after giving effect to such Restricted Payments on
a pro forma basis, (i) the Secured Net Leverage Ratio
shall not exceed 4.00:1.00 and (ii) the Total Net
Leverage Ratio shall not exceed 4.50:1.00 (this clause
(ix), the “Incurrence-Based Restricted Payment
Basket”),
(e) investments, loans and advances (“Investments”), with
exceptions for, among other things,
(i) Investments made in accordance with the terms of
binding agreements existing on the Closing Date;
(ii) [reserved];
(iii) [reserved];
(iv) Investments in a joint venture, when taken together
with all other Investments made pursuant to this
clause (iv) that are at the time outstanding, not to
exceed $25,000,000 at any one time outstanding;
(v) Cash Equivalents and Investments that were Cash
Equivalents when made;
(vi) Investments arising out of the receipt by the Borrower
or any Restricted Subsidiary of non-cash
consideration for the sale or other disposition of
assets permitted under clause (c) above;
(vii) loans and advances to officers, directors, employees
or consultants of the Borrower or any Restricted
Subsidiary (A) not to exceed in the aggregate
$5,000,000 at any time outstanding, (B) for
reasonable and customary business and related travel,
entertainment, relocation and analogous ordinary
business purposes, or (C) in respect of payroll
payments and expenses in the ordinary course of
business;
(viii) accounts receivable, security deposits and
prepayments arising and trade credit granted in the
ordinary course of business and any assets or
securities received in satisfaction or partial
satisfaction thereof from financially troubled account
debtors and any prepayments and other credits to
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 21
suppliers made in the ordinary course of business;
(ix) Hedge Agreements not entered into for speculative
purposes;
(x) Investments existing on, or contractually committed
as of, the Closing Date as expressly provided by the
Recapitalization Transaction Term Sheet;
(xi) Investments resulting from pledges and deposits
referred to in the corresponding liens covenant above;
(xii) solely with respect to the New Senior Secured Term
Loans, repurchases of the New Senior Secured Notes
in each case permitted hereunder;
(xiii) Investments constituting Permitted Acquisitions;
(xiv) Investments of the Borrower in any Restricted
Subsidiary or any entity that becomes a Restricted
Subsidiary in connection and substantially
concurrently with such Investment and of any
Restricted Subsidiary in the Borrower or in any other
Restricted Subsidiary or any entity that becomes a
Restricted Subsidiary in connection and substantially
concurrently with such Investment; provided that the
aggregate principal amount of such Investments
(including intercompany loans and other Investments)
made pursuant to this clause (xiv) by Loan Parties in
Restricted Subsidiaries that are not Loan Parties and
will not become a Loan Party in connection with the
incurrence of such Investment, when aggregated with
Indebtedness incurred by Restricted Subsidiaries that
are not Loan Parties owing to a Loan Party pursuant
to subclause (vii)(B) of the debt covenant above and
acquisitions of Persons that do not become Loan
Parties pursuant to clause (xiii) above, shall not
exceed the greater of (x) $58,000,000 and (y) 2.50%
of Consolidated Total Assets;
(xv) any actions permitted by the Support Agreement as
expressly provided by the Recapitalization
Transaction Term Sheet;
(xvi) Investments received in connection with the
bankruptcy or reorganization of, or settlement of
delinquent accounts and disputes with or judgments
against, customers, distributors and suppliers, or
Investments acquired by the Borrower or any
Restricted Subsidiary as a result of a foreclosure by
the Borrower or any of the Restricted Subsidiaries
with respect to any secured Investments or other
transfer of title with respect to any secured
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 22
Investment in default;
(xvii) Investments of a Restricted Subsidiary acquired after
the Closing Date or of an entity merged into, or
amalgamated or consolidated with, the Borrower or
merged into or amalgamated or consolidated with a
Restricted Subsidiary in accordance with the merger
covenant above after the Closing Date to the extent
that such Investments were not made in
contemplation of or in connection with such
acquisition, merger or consolidation and were in
existence or had been committed to be made on the
date of such acquisition, merger or consolidation;
(xviii) Investments in exchange for Equity Interests of the
Borrower;
(xix) guarantees by the Borrower or any Restricted
Subsidiary of obligations that do not constitute
Indebtedness and are not otherwise prohibited
hereunder, in each case, entered into by the Borrower
or any Restricted Subsidiary in the ordinary course of
business;
(xx) Investments consisting of the redemption, purchase,
repurchase or retirement of any Equity Interests
permitted under the Restricted Payments covenant;
provided that any such Investments shall constitute a
utilization of the applicable provision or provisions
(without double counting) under the Restricted
Payments covenant;
(xxi) Investments in the ordinary course of business
consisting of UCC Article 3 endorsements for
collection or deposit and UCC Article 4 customary
trade arrangements with customers and foreign law
equivalent interests;
(xxii) advances in the form of a prepayment of expenses, so
long as such expenses are being paid in accordance
with customary trade terms of the Borrower or any
Restricted Subsidiary;
(xxiii) Investments by the Borrower or any Restricted
Subsidiaries, if the Borrower or any Restricted
Subsidiary would otherwise be permitted to make a
Restricted Payment pursuant to clause (d)(ix) above
in such amount (provided that the amount of any such
Investment shall also be deemed to be a Restricted
Payment for all purposes herein);
(xxiv) acquisitions by any Loan Party of Investments
evidencing obligations owed by one or more officers
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 23
or other employees of the Borrower, such Loan Party
or its subsidiaries in connection with such officer’s or
employee’s acquisition of Equity Interests of the
Borrower, so long as no cash is actually advanced in
connection with the acquisition of any such
obligations;
(xxv) guarantees permitted under the debt covenant above
(except to the extent such guarantee is expressly
subject to this clause (e));
(xxvi) Investments consisting of the licensing, sublicensing,
covenants not to xxx, releases or other rights under
intellectual property (including in connection with
distribution, license and supply agreements) in the
ordinary course of business or in the reasonable
business judgment of the Borrower or the Restricted
Subsidiaries;
(xxvii) Investments consisting of purchases and acquisitions
of inventory, supplies, goods, materials and
equipment or purchases of contract rights or leases, in
each case, in the ordinary course of business;
(xxviii) Investments consisting of purchases and acquisitions
of intellectual property in the ordinary course of
business or in the reasonable business judgment of the
Borrower or the Restricted Subsidiaries;
(xxix) Investments in assets useful in the business of the
Borrower and any of its Restricted Subsidiaries made
with the proceeds of any Reinvestment Deferred
Amount or Below Threshold Asset Sale Proceeds
(each to be defined in a manner consistent with
Documentation Considerations); provided that if the
underlying Asset Sale or Casualty Event (each to be
defined in a manner consistent with Documentation
Considerations) was with respect to the Borrower or a
Guarantor, then such Investment shall be
consummated by the Borrower or a Guarantor;
(xxx) Investments in the New Senior Secured Term Loans
and other permitted Indebtedness of the Borrower and
its Restricted Subsidiaries, in each case, solely (i) to
the extent permitted hereunder and under the
definitive documentation governing any such other
permitted indebtedness and (ii) consummated in
accordance with the terms and conditions set forth in
the assignment provisions of the Term Loan
Definitive Documentation or pursuant to the
corresponding provisions of the definitive
documentation governing any such other permitted
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 24
Indebtedness, as applicable;
(xxxi) other Investments by the Borrower or any Restricted
Subsidiary; provided that, after giving effect to such
Investment, the aggregate amount of all Investments
made pursuant to this subclause (xxxi) (valued at the
time of the making thereof, and without giving effect
to any write-downs or write-offs thereof) shall not
exceed the greater of (x) $58,000,000 and (y) 2.50%
of Consolidated Total Assets; and
(xxxii) from and after January 1, 2019, so long as no Event
of Default has occurred and is continuing, and after
giving effect to any such Investment on a pro forma
basis, (i) the Secured Net Leverage Ratio shall not
exceed 4.00:1.00 and (ii) the Total Net Leverage
Ratio shall not exceed 4.75:1.00, Investments made
with any portion of the Cumulative Credit.
(f) make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of or in respect
of any Indebtedness of the Borrower or any Restricted
Subsidiary that is (x) expressly subordinate to the Obligations
(to be defined in a manner consistent with Documentation
Considerations), (y) unsecured or secured by a Lien that is
junior to the Lien securing the Collateral or (z) any
Refinancing Indebtedness (to be defined in a manner
consistent with Documentation Considerations) in respect of
(x) and (y) (clauses (x), (y) and (z), each, a “Junior
Financing”; provided, however that any payment or other
distribution (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation
or termination in respect of any Junior Financing except for
(a) Refinancing Indebtedness, (b) payments of regularly
scheduled interest, and, to the extent this Agreement is then in
effect, principal on the scheduled maturity date of any Junior
Financing, (c) the conversion of any Junior Financing to
Equity Interests (other than disqualified stock) of the
Borrower, (d) from and after January 1, 2019, so long as no
Event of Default has occurred and is continuing or would
result therefrom, payments or distributions in respect of
Junior Financings prior to their scheduled maturity (1) in an
aggregate amount not to exceed the greater of (x) 23,000,000
and (y) 1.0% of Consolidated Total Assets or (2) made with
any portion of the Cumulative Credit, subject to compliance
with (i) a Secured Net Leverage Ratio of 4.00:1.00 and (ii) a
Total Net Leverage Ratio of 4.75:1.00 after giving effect to
such payment or distribution on a pro forma basis and (e)
payments or distributions in amounts that would otherwise
have been permitted to be made as Restricted Payments;
provided that any such prepayment shall constitute a
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 25
utilization of the applicable Restricted Payment capacity;
(g) burdensome agreements (i.e., negative pledge clauses with
respect to the Collateral and limitations on dividends and
other distributions by Restricted Subsidiaries);
(h) changes in business;
(i) transactions with affiliates in excess of $5,000,000 in the
aggregate, with exceptions to permit, among others,
transactions among the Borrower, its Restricted Subsidiaries
and/or any joint venture in which the Borrower or any
Restricted Subsidiary holds an equity interest (provided that
the exceptions set forth in clauses 6.6(b)(11)(B) and (13) in
Existing Credit Agreement shall not be included in the Term
Loan Definitive Documentation);
(j) sale and lease-back transactions that do not at any time exceed
$5,000,000 and the liens in respect thereof are otherwise
permitted;
(k) changes in fiscal year; provided that, the Borrower may
change its fiscal year once, subject to customary conditions;
(l) creation, contribution to or maintenance of any Canadian
pension plan (other than the Canada Pension Plan) which
provides for defined benefits; and
(m) amendments of the organizational documents of the Loan
Parties that are materially adverse to the New Senior Secured
Term Lenders.
The limitations on Investments and Restricted Payments referenced
above shall be subject to a carve-out in the amount of a building
basket (the “Cumulative Credit”) (to be defined in a manner
consistent with Documentation Considerations; provided that, in
lieu of an amount equal to excess cash flow increasing the
Cumulative Credit, such amount will be based on 50% of
Consolidated Net Income).
The Term Loan Definitive Documentation will permit the Borrower
and its Restricted Subsidiaries to make acquisitions, directly or
indirectly (including in one transaction or a series of related
transactions), of all or substantially all the assets of, or all the
Equity Interests (other than directors’ qualifying shares or shares
issued to foreign nationals) in, or merger or consolidation or
amalgamation with, a person or division or line of business of a
person or franchisee rights, assets or operations (each, a “Permitted
Acquisition”) (or any subsequent investment made in a person,
division, line of business or franchisee rights, assets or operations
previously acquired in a Permitted Acquisition), if immediately
after giving effect thereto: (a) no Event of Default shall have
occurred and be continuing or would result therefrom, (b) before
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 26
and after giving effect to such acquisition on a pro forma basis the
Total Net Leverage Ratio will not be greater than (x) the Total Net
Leverage Ratio immediately prior to giving effect to such
acquisition or (y) 6.50:1.00, (c) all transactions related thereto shall
be consummated in all material respects in accordance with
applicable laws, (d) any Loan Party making such acquisition and
any person acquired in such acquisition comply with clause (r) of
“Affirmative Covenants” above, (e) a substantial portion of the
property acquired (or a substantial portion of the property of the
person acquired) thereby shall be used or useful in the same or a
related line of business of the Borrower and its subsidiaries (or any
reasonable expansions or extensions thereof) and (f) the aggregate
consideration funded by a Loan Party for any and all such
acquisitions of any person that is not and will not become a Loan
Party concurrently with or reasonably promptly following such
acquisition shall not, when aggregated with Investments made
pursuant to clause (e)(xiv) above and Indebtedness incurred by
Restricted Subsidiaries that are not Loan Parties owing to a Loan
Party pursuant to clause (a)(vii)(B) above, exceed the greater of (i)
$58,000,000 and (ii) 2.5% of Consolidated Total Assets (the “Non-
Loan Party Limitation”); provided that if greater than 80% of the
assets or Consolidated Adjusted EBITDA being acquired in any
Permitted Acquisition is generated by entities that will become
Loan Parties concurrently with or reasonably promptly following
such Permitted Acquisition, assets being acquired by Loan Parties
or any combination of the foregoing, such Investment shall not
reduce the Non-Loan Party Limitation.
The Term Loan Definitive Documentation will contain provisions
pursuant to which, subject to customary limitations on Investments
in Unrestricted Subsidiaries, the Borrower will be permitted to
designate (or re-designate) any existing or subsequently acquired or
organized Restricted Subsidiary as an “unrestricted subsidiary”
(each, an “Unrestricted Subsidiary”) and designate (or re-designate,
so long as all debt, liens, and investments held by such Unrestricted
Subsidiary are tested at the time of re-designation) any such
Unrestricted Subsidiary as a Restricted Subsidiary. Unrestricted
Subsidiaries (and the sale of any equity interests therein or assets
thereof) will not be subject to the mandatory prepayment,
representations and warranties, affirmative or negative covenants or
event of default provisions of the Term Loan Definitive
Documentation, and the results of operations and indebtedness of
Unrestricted Subsidiaries will not be taken into account for
purposes of determining compliance with any financial ratio set
forth in the Term Loan Definitive Documentation. For the
avoidance of doubt, any designation of a Restricted Subsidiary as
an Unrestricted Subsidiary may be permitted so long as (i) no
default or Event of Default has occurred and is continuing or would
result therefrom, (ii) such subsidiary comprises no more than 5% of
(x) Consolidated Total Assets and (y) Consolidated Adjusted
EBITDA at the time of designation, (iii) after giving effect to such
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Term Sheet – New Senior Secured Term Loans
Annex II to Schedule D-1 – Page 27
designation, all Unrestricted Subsidiaries comprise, in the
aggregate, no more than 10% of (x) Consolidated Total Assets and
(y) Consolidated Adjusted EBITDA at the time of designation and
(iv) such subsidiary is not an Additional Borrower (to be defined in
a manner consistent with Documentation Considerations); provided
that such designation shall be deemed an investment in such
Unrestricted Subsidiary in an amount equal to the fair market value
of such subsidiary at the time of designation provided, further, that
(i) no Loan Party may be designated as an Unrestricted Subsidiary
(unless such Loan Party ceases to be a Loan Party in accordance
with the terms of the Credit Documentation in connection with such
designation), (ii) no material Intellectual Property may be
transferred to any Unrestricted Subsidiary and (iii) no Restricted
Subsidiary which holds any material Intellectual Property may be
designated as an Unrestricted Subsidiary (it being understood that
an Unrestricted Subsidiary may subsequently develop intellectual
property or purchase material intellectual property from a third
party).
Financial Maintenance Covenant: None.
Events of Default: Limited to the following: (i) material inaccuracy of representations
and warranties, (ii) nonpayment of principal when due, (iii)
nonpayment of interest, fees or other amounts after a five (5)
business day grace period, (iv) violation of negative covenants
(with customary grace periods), (v) violation of other covenants
(subject to certain grace periods), (vi) cross-default and cross-
acceleration to other material debt, (vii) change of control, (viii)
bankruptcy and insolvency events of the Borrower and any material
subsidiary, (ix) material judgments, (x) certain customary ERISA or
pension events, and (xi) actual or asserted invalidity by the Loan
Parties of any Term Loan Definitive Financing Document.
The definition of “change of control” will be triggered if (i) any
person or group (other than (x) any employee benefit plan and/or
person acting as the trustee, agent or other fiduciary administrator,
and (y) any Permitted Holders or group of Permitted Holders)
acquires more than 50% of the outstanding voting common stock of
the Borrower or (ii) a sale of all or substantially all of the assets of
the Borrower occurs; provided that a sale of the North American
Assets shall not trigger a “change of control” for the purposes of
this clause (ii).
“Permitted Holders” will be defined to include (a) the Plan
Sponsors and (b) any person or entity with which the Plan Sponsors
and management form a “group” (within the meaning of the federal
securities laws) so long as, in the case of this clause (b), the Plan
Sponsors beneficially own more than 50% of the relevant voting
stock beneficially owned by such group.
Schedule D-2 – Page 1
SCHEDULE D-2
NEW SENIOR SECURED NOTES
SUMMARY OF TERMS AND CONDITIONS
Set forth below is a summary of the principal terms and conditions for the New Senior
Secured Notes. Capitalized terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Recapitalization Transaction—Summary of Principal Terms and
Conditions to which this Schedule D-2 is attached or in Schedule D-1 (including the Annexes
thereto) attached thereto.
PARTIES
Issuer: The Borrower under the New Senior Secured Term Facility (the
“Issuer”).
Guarantors: The Guarantors under the New Senior Secured Term Facility.
Trustee and Collateral
Agent:
[_________] will act as trustee and collateral agent (in such
capacities, the “Trustee”).
New Senior Secured Notes
Holders:
Secured Debtholders which receive New Senior Secured Notes (as
defined below) in connection with the Recapitalization Transaction
and, subject to applicable securities laws, transferees thereof
(collectively, the “New Senior Secured Notes Holders”).
TYPE AND AMOUNT OF NEW SENIOR SECURED NOTES
Type and Amount: A new issue of senior secured notes in an aggregate principal
amount of $300 million (the “New Senior Secured Notes”), which
shall be issued or distributed in connection with the
Recapitalization Transaction in a single series of notes on the
Effective Date and denominated in USD.
Interest Rate: 8.00%.
Interest Payment Dates: Semi-annually.
Maturity: The sixth anniversary of the Effective Date.
Ranking: The New Senior Secured Notes and related guarantees will rank
pari passu in right of payment with all of the Issuer’s and the
Guarantors’ existing and future senior indebtedness (including the
New Senior Secured Term Loans and indebtedness under the
Revolving Facility); provided, that the Revolving Facility may
provide for “super-priority” status under customary terms,
including a “first-out” basis in the Collateral waterfall provision.
Schedule D-2 – Page 2
Collateral: The New Senior Secured Notes and related guarantees will be
secured by the same collateral securing the New Senior Secured
Term Loans on a pari passu basis with the New Senior Secured
Term Loans. See “Collateral” of Schedule D-1 (“New Senior
Secured Term Facility—Summary of Terms and Conditions”) for
a description of the collateral that will secure the New Senior
Secured Notes and the terms related thereto, which terms are
incorporated by reference herein, mutatis mutandis.
Intercreditor
Arrangements:
The lien priority, relative rights and other creditors’ rights matters
in respect of the New Senior Secured Term Facility, the New
Senior Secured Notes and the Revolving Facility will be set forth
in the Intercreditor Agreement, which shall be reasonably
satisfactory to the Issuer, the Trustee and the New Senior Secured
Notes Holders holding the Applicable Voting Percentage (as
defined below) (the “Required Consenting Holders”). For the
avoidance of doubt, the Intercreditor Agreement will, among other
things, (a) allow additional first lien indebtedness permitted to be
incurred pursuant to any New Senior Secured Incremental Term
Facility and/or any New Senior Secured Incremental Equivalent
Debt and/or otherwise in accordance with the terms of the Term
Loan Definitive Documentation and the New Senior Secured
Notes Definitive Documentation (as defined below) and (b) allow
permitted refinancing indebtedness in respect of any of the
foregoing (including, in the case of the New Senior Secured Term
Facility, in the form of Refinancing Facilities).
In addition and subject to the Intercreditor Agreement, the New
Senior Secured Notes Definitive Documentation will authorize and
require the Trustee to enter into any Acceptable Intercreditor
Arrangement which allows (at the Issuer’s option) additional debt
that is permitted to be incurred and secured under the New Senior
Secured Notes Definitive Documentation to be secured by a lien
on the Collateral that is pari passu with or junior to the lien on the
Collateral securing the New Senior Secured Notes so long as the
Administrative Agent enters into such Acceptable Intercreditor
Arrangement and the holders of the New Senior Secured Notes are
not adversely treated thereunder as compared to the New Senior
Secured Term Lenders.
REDEMPTIONS; OFFERS TO REPURCHASE
Optional Redemptions: Except as set forth below, the New Senior Secured Notes will be
non-callable until the second anniversary of the Effective Date.
The Issuer (at its option) may redeem all or any portion of the New
Senior Secured Notes at par plus accrued interest plus a premium
equal to (i) 2% of the aggregate principal amount of such New
Senior Secured Notes to be redeemed on or after the second
Schedule D-2 – Page 3
anniversary of the Effective Date and (ii) 1% of the aggregate
principal amount of such New Senior Secured Notes to be
redeemed on or after the third anniversary of the Effective Date.
The Issuer (at its option) may redeem all or any portion of the New
Senior Secured Notes at par plus accrued interest (without any
premium) on or after the fourth anniversary of the Effective Date.
Prior to the second anniversary of the Effective Date, the Issuer (at
its option) may redeem up to 40% of the New Senior Secured
Notes with the proceeds from certain equity offerings at a
redemption price equal to par plus accrued interest plus a premium
equal to 8.00% of the aggregate principal amount of such New
Senior Secured Notes to be redeemed.
Prior to the second anniversary of the Effective Date, the Issuer (at
its option) may redeem the New Senior Secured Notes, in whole or
in part at any time and from time to time, at a make-whole price
based on U.S. Treasury notes with a maturity closest to the first
anniversary of the Effective Date plus 50 basis points, plus accrued
interest to the redemption date.
The New Senior Secured Notes Indenture will provide that any
redemption and notice of redemption (other than in connection
with a defeasance or satisfaction and discharge of the New Senior
Secured Notes Indenture) may, at the Issuer’s discretion, be
subject to the satisfaction of one or more conditions precedent
(including the consummation of a debt financing, an equity
offering or other corporate transaction). If such redemption is so
subject to satisfaction of one or more conditions precedent, such
notice shall describe each such condition and, if applicable, shall
state that, at the Issuer’s discretion, the redemption date may be
delayed until such time as any or all such conditions shall be
satisfied, or such redemption may not occur and such notice may
be rescinded in the event that any or all such conditions shall not
have been satisfied by the redemption date, or by the redemption
date as so delayed. In addition, the Issuer may provide in such
notice that payment of the redemption price and performance of
the Issuer’s obligations with respect to such redemption may be
performed by another person designated by the Issuer in such
notice; provided, that any such payment or performance occurs in
accordance with the New Senior Secured Notes Indenture and no
such designation shall relieve the Issuer from making such
payment or performing such obligations if such other person so
designated shall fail to do the same in accordance with the New
Senior Secured Notes Indenture.
Mandatory Redemptions: None.
Schedule D-2 – Page 4
Tax Redemption: Substantially the same as the Existing Indenture (as defined
below).
Offers to Purchase: The Issuer shall be required to make an offer to repurchase the
New Senior Secured Notes at par plus accrued interest with (i)
100% of the net cash proceeds in excess of $25 million in any
fiscal year of any non-ordinary course sale or other disposition of
assets (other than the North American Assets or a Material
Disposition) consummated by the Issuer or any Restricted
Subsidiary or as a result of casualty or condemnation (subject to
the right of the Issuer to apply such proceeds to a Permitted
Reinvestment within 12 months following receipt (or if the Issuer
or its Restricted Subsidiaries have committed to reinvest such
proceeds within such 12 month period reinvestment within 6
months following such 12 month period), in each case, with carve-
outs and exceptions consistent with the New Senior Secured Notes
Documentation Considerations and (ii) 100% of the net cash
proceeds from (x) any non-ordinary course sale or other
disposition of the North American Assets or (y) a Material
Disposition consummated by the Issuer or any Restricted
Subsidiary (subject, in the case of clauses (x) and (y), to the right
of the Issuer to reinvest up to 50% of such proceeds as a Permitted
Reinvestment within 12 months following receipt (or if the Issuer
or its Restricted Subsidiaries have committed to reinvest such
proceeds within such 12 month period reinvestment within 6
months following such 12 month period)), in each case, with
carve-outs and exceptions consistent with the New Senior Secured
Notes Documentation Considerations; provided, that an offer to
purchase pursuant to this clause (ii) shall only be required to be
made in the event net cash proceeds exceed $5 million (in which
event, 100% of such net cash proceeds shall be required to be
applied); provided further, that, to the extent required by the
documentation governing such other indebtedness, the Issuer may
apply the net cash proceeds thereof ratably (based on the
outstanding principal amounts thereof) to such offer to repurchase
the New Senior Secured Notes and the prepayment of the New
Senior Secured Term Loans and any other indebtedness that is
secured on a pari passu basis with the New Senior Secured Notes
and the New Senior Secured Term Loans.
If the Issuer determines in good faith that any such offer to
repurchase the New Senior Secured Notes (i) in the case of any
such offer to repurchase attributable to any subsidiary, would
violate or conflict with any local law (e.g., financial assistance,
corporate benefit, thin capitalization, capital maintenance and
similar legal principles, restrictions on upstreaming of cash intra
group and the fiduciary and statutory duties of the directors of the
Schedule D-2 – Page 5
relevant Restricted Subsidiaries), (ii) would require the Issuer or
any Restricted Subsidiary to incur a material and adverse tax
liability (including any withholding tax) if such amount were
repatriated to the Issuer as a dividend or (iii) in the case of any
such offer to repurchase attributable to any joint venture, would
violate any organizational document of such joint venture (or any
relevant shareholders’ or similar agreement), in each case, if the
amount subject to the relevant offer to repurchase were upstreamed
or transferred to the Issuer as a distribution or dividend (any
amount limited as set forth in clauses (i) through (iii) of this
paragraph, a “Restricted Amount”), the amount of the relevant
offer to repurchase shall be reduced by the Restricted Amount;
provided, that (A) in the case of any Restricted Amount arising
under the circumstances described in clause (i) or (ii) above, the
Issuer shall use commercially reasonable efforts to take all actions
required by applicable law to permit the repatriation of the relevant
amounts to the Issuer and (B) if the circumstance giving rise to any
Restricted Amount ceases to exist within 365 days following the
end of the event giving rise to the relevant offer to repurchase, the
relevant Restricted Subsidiary shall promptly repatriate or
distribute the amount that no longer constitutes a Restricted
Amount to the Issuer for application to such an offer to repurchase
the New Senior Secured Notes and the prepayment of the New
Senior Secured Term Loans as required above promptly following
the date on which the relevant circumstance ceases to exist; it
being understood and agreed that following the expiration of the
365-day period referenced above, the relevant Restricted
Subsidiary may retain any Restricted Amount, and no such offer to
repurchase shall be required in respect thereof; provided, that in no
event shall any Restricted Amount be used to increase the
Cumulative Credit.
The Issuer shall be required to make an offer to repurchase the
New Senior Secured Notes at 101% of the aggregate principal
amount thereof plus accrued interest upon the occurrence of a
“Change of Control” on terms substantially the same as the
Existing Indenture, except that the definition of the term “Change
of Control” shall have the meaning set forth for such term in
Annex II attached to Schedule D-1 (“New Senior Secured Term
Facility—Summary of Terms and Conditions”).
CERTAIN CONDITIONS
DOCUMENTATION
New Senior Secured Notes
Definitive
The indenture that will govern the New Senior Secured Notes
(“New Senior Secured Notes Indenture,” together with all other
definitive documentation related to the New Senior Secured Notes,
Schedule D-2 – Page 6
Documentation: collectively, the “New Senior Secured Notes Definitive
Documentation”) shall be substantially the same as that certain
Indenture, dated as of October 13, 2016 (the “Existing Indenture”),
by and among Concordia International Corp., the guarantors party
thereto and U.S. Bank National Association, as trustee and as
collateral agent, which Existing Indenture governs the Issuer’s
9.000% First Lien Senior Secured Notes Due 2022 but modified
(1) to reflect the express terms and conditions set forth herein and
(2) as otherwise agreed by the Issuer and the Required Consenting
Holders; it being understood and agreed that the New Senior
Secured Notes Definitive Documentation shall:
(a) contain only those redemptions, affirmative, financial and
negative covenants (including affirmative covenants relating to
offers to repurchase the New Senior Secured Notes as a result
of asset sales) and events of default expressly set forth in this
Term Sheet, in each case, applicable to the Issuer and its
Restricted Subsidiaries, which shall be subject to standards,
qualifications, thresholds, exceptions for materiality and/or
otherwise and “baskets,” grace and cure periods, in each case,
consistent (where applicable) with the New Senior Secured
Notes Documentation Considerations (it being understood that
certain baskets, exceptions and thresholds that are subject to a
monetary cap shall also include a Builder Component); and
(b) (i) give due regard to the operational and strategic
requirements of the Issuer and its Restricted Subsidiaries in
light of their consolidated capital structure, size, industry and
practices (including, without limitation, the leverage profile
and projected free cash flow generation of the Issuer and its
Restricted Subsidiaries), in each case, after giving effect to the
Recapitalization Transaction and (ii) be based upon the
Existing Indenture and related notes documentation; provided,
that the affirmative covenants (including affirmative covenants
relating to offers to repurchase the New Senior Secured Notes
as a result of asset sales) and negative covenants (other than
the Merger Covenant (as defined below)) will be based upon
the Existing Credit Agreement (this clause (b), together with
the immediately preceding clause (a), collectively, the “New
Senior Secured Notes Documentation Considerations”).
Notwithstanding anything to the contrary herein, to the extent that
the New Senior Secured Notes Definitive Documentation requires
(a) compliance with any financial ratio or test, (b) the absence of
any default or event of default (or any type of default or event of
default) or (c) compliance with any cap expressed as a percentage
of Consolidated Adjusted EBITDA or Consolidated Total Assets,
in each case, as a condition to the consummation of any
Schedule D-2 – Page 7
transaction in connection with any acquisition (including the
incurrence of any indebtedness) or similar investment that is not
subject to any financing condition, the determination of whether
the relevant condition is satisfied may be made, at the election of
the Issuer, either (i) at the time of the execution of the definitive
agreement with respect to the relevant acquisition or (ii) at the time
the relevant acquisition is consummated, in either case, after
giving effect to the acquisition and any related indebtedness on a
pro forma basis.
Affirmative Covenants: Limited to the items set forth in Section 1 of Annex II attached to
Schedule D-1 (“New Senior Secured Term Facility—Summary of
Terms and Conditions”), which affirmative covenants are
incorporated by reference herein, mutatis mutandis.
Negative Covenants: Limited to (i) the items set forth in Section 2 of Annex II attached
to Schedule D-1 (“New Senior Secured Term Facility—Summary
of Terms and Conditions”), which negative covenants are
incorporated by reference herein, mutatis mutandis, and (ii) a
merger covenant (the “Merger Covenant”) substantially the same
as the one set forth in Section 5.01 of the Existing Indenture;
provided, that (a) the New Senior Secured Notes Definitive
Documentation shall provide that a change of the Issuer or any
successor thereof (or the jurisdiction of the Issuer or any such
successor) shall be permitted on a basis to be agreed, which basis
shall take into consideration, inter alia, the jurisdiction of the
Issuer or any such successor and applicable tax considerations
which arise therefrom and (b) Section 5.01(a)(3) of the Existing
Indenture shall be replaced with the following: “(3) immediately
after giving effect to any such transaction or series of transactions
on a Pro Forma Basis (including, without limitation, any Debt
Incurred in connection with or in respect of such transaction or
series of transactions) as if such transaction or series of
transactions had occurred on the first day of the determination
period, the Total Net Leverage Ratio of the Company (or the
Surviving Entity, if the Company is not continuing) would (x) not
exceed 6.50:1.00 or (y) be equal to or less than such ratio for the
Company immediately prior to such transaction or series of
transactions;”.
Events of Default: Substantially the same as the Existing Indenture.
Defeasance and Discharge
Provisions:
Substantially the same as the Existing Indenture.
Modifications and Substantially the same as the Existing Indenture; provided, that
Schedule D-2 – Page 8
Consents: New Senior Secured Notes Indenture will provide that,
notwithstanding anything to the contrary set forth in Section
316(a) of the Trust Indenture Act of 1939 (the provisions of which
shall be excluded by the New Senior Secured Notes Indenture), (i)
in determining whether the New Senior Secured Notes Holders of
the required principal amount of New Senior Secured Notes have
concurred in any request, demand, authorization, notice, direction,
amendment, supplement, waiver or consent, New Senior Secured
Notes owned of record or beneficially by the Issuer or any affiliate
thereof (other than any Plan Sponsor) shall be considered as
though they are not outstanding and (ii) in determining whether the
Trustee shall be protected in relying on any such request, demand,
authorization, notice, direction, amendment, supplement, waiver or
consent, only New Senior Secured Notes owned by the Issuer or
any such affiliate which the Trustee knows are so owned shall be
considered as though they are not outstanding.
“Applicable Voting Percentage” means at any time (x) if at such
time the New Senior Secured Notes held in the aggregate by the
Plan Sponsors constitute more than 27.5% of the aggregate
principal amount of the New Senior Secured Notes outstanding at
such time, 66.66%, and (y) at any other time (so long as the Plan
Sponsors have notified the Trustee that the holdings of the Plan
Sponsors in the aggregate constitute less than 27.5% of the
aggregate principal amount of the New Senior Secured Notes
outstanding at such time), 50.1%; provided, that the consent of the
New Senior Secured Notes Holders holding at least 85.0% of the
aggregate principal amount of the New Senior Secured Notes
outstanding shall be required with respect to (i) any increase in the
maximum principal amount of the Revolving Facility from that
permitted under the New Senior Secured Notes Definitive
Documentation in effect on the Effective Date, (ii) the
subordination of the liens on Collateral securing the New Senior
Secured Notes to liens securing any other indebtedness or any
increase in the amount of indebtedness that is permitted to rank
senior to the liens of the New Senior Secured Notes Holders or
(iii) release of all or substantially all of the Collateral from the
liens of the New Senior Secured Notes Holders (provided that such
percentage shall be reduced to 66.66% at any time the Applicable
Voting Percentage is 50.1%). Each Plan Sponsor shall be required
to promptly provide to the Trustee notice of the aggregate
principal amount of the New Senior Secured Notes held by such
Plan Sponsor and its affiliates upon any change in the amount of
such holdings and, if such notice results in a change in the
Applicable Voting Percentage, the Trustee shall notify the Issuer
of any such change in the Applicable Voting Percentage. The
Trustee shall be entitled to rely on all such notices absent manifest
Schedule D-2 – Page 9
error.
Governing Law and
Forum:
New York; provided, that, any New Senior Secured Notes
Definitive Documentation that governs any security interest in
and/or lien on any Collateral will be governed by the laws of the
jurisdiction in which such security interest and/or lien is intended
to be created and/or perfected (subject to the terms hereof).
SCHEDULE D
CBCA PLAN
[Attached]
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Xxxxx Xxxx Xx. XX-00-000000-00XX
XXXXXXX
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
IN THE MATTER OF AN APPLICATION UNDER SECTION 192 OF
THE CANADA BUSINESS CORPORATIONS ACT, R.S.C. 1985, c. C-44,
AS AMENDED, AND RULES 14.05(2) AND 14.05(3) OF THE RULES OF
CIVIL PROCEDURE
AND IN THE MATTER OF A PROPOSED ARRANGEMENT OF
CONCORDIA INTERNATIONAL CORP. AND CONCORDIA HEALTHCARE
(CANADA) LIMITED AND INVOLVING CONCORDIA LABORATORIES
INC., S.A.R.L., CONCORDIA PHARMACEUTICALS INC., S.A.R.L.,
CONCORDIA INVESTMENTS (JERSEY) LIMITED, CONCORDIA
FINANCING (JERSEY) LIMITED, AMDIPHARM HOLDINGS S.A.R.L.,
AMDIPHARM AG, AMDIPHARM B.V., AMDIPHARM LIMITED,
AMDIPHARM MERCURY HOLDCO UK LIMITED, AMDIPHARM
MERCURY UK LTD., CONCORDIA HOLDINGS (JERSEY) LIMITED,
AMDIPHARM MERCURY INTERNATIONAL LIMITED, CONCORDIA
INVESTMENT HOLDINGS (UK) LIMITED, MERCURY PHARMA GROUP
LIMITED, CONCORDIA INTERNATIONAL RX (UK) LIMITED, ABCUR AB,
MERCURY PHARMACEUTICALS LIMITED, FOCUS PHARMA HOLDINGS
LIMITED, FOCUS PHARMACEUTICALS LIMITED, MERCURY PHARMA
(GENERICS) LIMITED, MERCURY PHARMACEUTICALS (IRELAND)
LIMITED, AND MERCURY PHARMA INTERNATIONAL LIMITED
CONCORDIA INTERNATIONAL CORP. AND CONCORDIA
HEALTHCARE (CANADA) LIMITED
PLAN OF ARRANGEMENT
, 2018
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(i)
TABLE OF CONTENTS
Page
ARTICLE 1 INTERPRETATION ...................................................................................................1
1.1 Definitions................................................................................................................1
1.2 Certain Rules of Interpretation ...............................................................................20
1.3 Governing Law ......................................................................................................21
1.4 Currency .................................................................................................................21
1.5 Date for Any Action ...............................................................................................21
1.6 Time .......................................................................................................................21
ARTICLE 2 PRIVATE PLACEMENT .........................................................................................21
2.1 Issuance of Private Placement Shares ....................................................................21
ARTICLE 3 TREATMENT OF AFFECTED PARTIES ..............................................................21
3.1 Treatment of Secured Debtholders ........................................................................21
3.2 Treatment of Unsecured Debtholders ....................................................................26
3.3 Treatment of Existing Equity Holders ...................................................................27
ARTICLE 4 ISSUANCES, DISTRIBUTIONS AND PAYMENTS ............................................27
4.1 Delivery of New Senior Secured Debt ...................................................................27
4.2 Delivery of New Common Shares .........................................................................28
4.3 Delivery of Payments to Secured Debtholders ......................................................29
4.4 Delivery of Private Placement Commitment Consideration ..................................30
4.5 No Liability in respect of Deliveries ......................................................................30
4.6 Surrender and Cancellation of Notes .....................................................................31
4.7 Application of Plan Distributions ..........................................................................31
4.8 Withholding Rights ................................................................................................31
ARTICLE 5 IMPLEMENTATION ...............................................................................................32
5.1 Corporate Authorizations .......................................................................................32
5.2 Fractional Interests .................................................................................................32
5.3 Effective Date Transactions ...................................................................................32
ARTICLE 6 RELEASE OF FUNDS FROM ESCROW ...............................................................37
6.1 Release of Funds from Escrow ..............................................................................37
ARTICLE 7 RELEASES ...............................................................................................................37
7.1 Release of Released Parties ...................................................................................37
7.2 Additional Released Parties ...................................................................................38
7.3 Injunctions..............................................................................................................38
7.4 Existing Equity Class Action Claims .....................................................................38
ARTICLE 8 CONDITIONS PRECEDENT AND IMPLEMENTATION ....................................39
8.1 Conditions to Plan Implementation .......................................................................39
8.2 Waiver of Conditions .............................................................................................39
8.3 Effectiveness ..........................................................................................................39
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(ii)
ARTICLE 9 GENERAL ................................................................................................................40
9.1 Deemed Consents, Waivers and Agreements ........................................................40
9.2 Waiver of Defaults .................................................................................................40
9.3 Compliance with Deadlines and Elections ............................................................41
9.4 Paramountcy ..........................................................................................................41
9.5 Deeming Provisions ...............................................................................................41
9.6 Modification of Plan ..............................................................................................41
9.7 Notices ...................................................................................................................42
9.8 Different Capacities ...............................................................................................44
9.9 Consent of Majority Initial Consenting Debtholders and Majority Private
Placement Parties ...............................................................................................................44
9.10 Further Assurances.................................................................................................45
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PLAN OF ARRANGEMENT
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Plan, unless otherwise stated:
“7.00% Unsecured Notes” means the 7.00% Senior Unsecured Notes due 2023 issued
under the 7.00% Unsecured Notes Indenture;
“7.00% Unsecured Notes Indenture” means the Indenture for 7.00% Senior Unsecured
Notes dated April 21, 2015 by and among Concordia, the guarantors party thereto, and
the 7.00% Unsecured Notes Trustee, as amended, modified and/or supplemented from
time to time as of the date hereof;
“7.00% Unsecured Notes Trustee” means U.S. Bank National Association, in its
capacity as indenture trustee under the 7.00% Unsecured Notes Indenture, and any
successor thereof;
“9.50% Unsecured Notes” means the 9.50% Senior Unsecured Notes due 2022 issued
under the 9.50% Unsecured Notes Indenture;
“9.50% Unsecured Notes Indenture” means the Indenture for 9.50% Unsecured Notes
dated October 21, 2015 by and among Concordia, the guarantors party thereto, and the
9.50% Unsecured Notes Trustee, as amended, modified and/or supplemented from time
to time as of the date hereof;
“9.50% Unsecured Notes Trustee” means U.S. Bank National Association, in its
capacity as indenture trustee under the 9.50% Unsecured Notes Indenture, and any
successor thereof;
“Additional Cash Amount” means, in the event that the aggregate amount of the
Secured Debtholder Early Consent Cash Consideration is less than $100,000,000, an
amount equal to $100,000,000 less the aggregate amount of the Secured Debtholder Early
Consent Cash Consideration;
“Additional Released Parties” means those Persons listed on Schedule “A” to the Plan
in accordance with Section 7.2;
“Advisors” means, collectively, (i) the Initial Consenting Secured Debtholders Advisors,
and (ii) the Initial Consenting Unsecured Debtholders Advisors;
“Affected Equity” means all Existing Equity other than the Existing Shares;
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“Affected Equity Claim” means an equity claim (as defined in section 2(1) of the
Companies Creditors Arrangement Act) in respect of Concordia, other than an Existing
Equity Class Action Claim;
“Affected Equity Holder” means a holder of Affected Equity;
“Agents” means, collectively, the Secured Term Loan Agent and the Unsecured Equity
Bridge Loan Agent;
“Applicants” means, collectively, Concordia and CHCL;
“Arrangement” means an arrangement under section 192 of the CBCA on the terms and
subject to the conditions set out in this Plan, subject to any amendments or variations
thereto made in accordance with the Support Agreement, the Arrangement Agreement
and Section 9.6 of this Plan or made at the direction of the Court in the Interim Order or
the Final Order or otherwise, in any case, with the consent of the Applicants and the
Majority Initial Consenting Debtholders, each acting reasonably;
“Arrangement Agreement” means the arrangement agreement dated May 1, 2018,
among the Applicants, as it may be amended, modified and/or supplemented from time to
time;
“Articles of Arrangement” means the articles of arrangement of the Applicants in
respect of the Arrangement, in form and substance satisfactory to the Applicants and the
Majority Initial Consenting Debtholders, each acting reasonably, that are required to be
filed with the CBCA Director in order for the Arrangement to become effective on the
Effective Date;
“Business Day” means any day, other than a Saturday, Sunday or a statutory or civic
holiday, on which banks are generally open for business in Toronto, Ontario, New York,
New York, and London, England;
“Cash Collateral Account” has the meaning given to it in that certain Limited Consent,
dated as of April 16, 2018, by and among Concordia, the Secured Term Loan Agent and
the lenders party thereto;
“CBCA” means the Canada Business Corporations Act, R.S.C. 1985, c. C-44, as
amended;
“CBCA Director” means the Director appointed under section 260 of the CBCA;
“CBCA Proceedings” means the proceedings commenced by the Applicants under the
CBCA on October 20, 2017 in connection with this Plan;
“Certificate of Arrangement” means the certificate giving effect to the Arrangement, to
be issued by the CBCA Director pursuant to section 192(7) of the CBCA upon receipt of
the Articles of Arrangement in respect of Concordia and CHCL in accordance with
section 262 of the CBCA;
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“CHCL” means Concordia Healthcare (Canada) Limited;
“CIJL” means Concordia Investments (Jersey) Limited;
“Cinven Agreement” means the governance agreement dated October 21, 2015 between
Concordia and Cinven Capital Management (V) General Partner Limited;
“Circular” means the management information circular of Concordia dated May ,
2018, as it may be amended, modified and/or supplemented from time to time, with the
consent of the Majority Initial Consenting Debtholders, acting reasonably, subject to the
terms of the Interim Order or other Order of the Court;
“Claim” means any right or claim of any Person that may be asserted or made in whole
or in part against the applicable Persons, or any of them, in any capacity, whether or not
asserted or made, in connection with any indebtedness, liability or obligation of any kind
whatsoever, and any interest accrued thereon or costs payable in respect thereof, whether
at law or in equity, including by reason of the commission of a tort (intentional or
unintentional), by reason of any breach of contract or other agreement (oral or written),
by reason of any breach of duty (including, any legal, statutory, equitable or fiduciary
duty) or by reason of any equity interest, right of ownership of or title to property or
assets or right to a trust or deemed trust (statutory, express, implied, resulting,
constructive or otherwise), and together with any security enforcement costs or legal
costs associated with any such claim, and whether or not any indebtedness, liability or
obligation is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, unsecured, perfected,
unperfected, present or future, known or unknown, by guarantee, warranty, surety or
otherwise, and whether or not any right or claim is executory or anticipatory in nature,
including any claim made or asserted against the applicable Persons, or any of them,
through any affiliate, subsidiary, associated or related Person, or any right or ability of
any Person to advance a claim for an accounting, reconciliation, contribution, indemnity,
restitution or otherwise with respect to any matter, grievance, action (including any class
action or proceeding before an administrative or regulatory tribunal), cause or chose in
action, whether existing at present or commenced in the future;
“Collateral Agents” means Xxxxxxx Xxxxx Bank USA and U.S. Bank National
Association in their capacities as collateral agents under the Secured Term Loan Credit
Agreement and the Secured Notes Indenture, respectively;
“Common Shares” means common shares in the capital of Concordia;
“Concordia” means Concordia International Corp.;
“Concordia Entities” means Concordia and all of its direct and indirect subsidiaries;
“Concordia Released Parties” means, collectively, the Concordia Entities, and each of
their respective current and former directors, officers, managers, partners, employees,
auditors, financial advisors, legal counsel and agents, including the Proxy and
Information Agent and the Escrow Agent;
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“Consenting Debtholders” means, collectively, the Consenting Secured Debtholders and
the Consenting Unsecured Debtholders;
“Consenting Secured Debtholders” means, collectively, the Secured Debtholders that
have executed and remain, at the relevant time, subject to the Support Agreement (or a
joinder agreement thereto);
“Consenting Unsecured Debtholder Notes Election Pro Rata Share” means, with
respect to each Consenting Unsecured Debtholder that holds Secured Term Loans, the
percentage that such Consenting Unsecured Debtholder’s principal amount of Non-
Elected Secured Term Loans bears to the total principal amount of Non-Elected Secured
Term Loans held by all Consenting Unsecured Debtholders;
“Consenting Unsecured Debtholders” means, collectively, the Unsecured Debtholders
that have executed and remain, at the relevant time, subject to the Support Agreement (or
a joinder agreement thereto);
“Court” means the Ontario Superior Court of Justice (Commercial List);
“Debt” means, collectively, the Secured Debt and the Unsecured Debt;
“Debt Documents” means, collectively, the Secured Debt Documents and the Unsecured
Debt Documents, and “Debt Document” means any one of such documents;
“Debtholder Claims” means, collectively, the Secured Debtholder Claims and the
Unsecured Debtholder Claims;
“Debtholders” means, collectively, the Secured Debtholders and the Unsecured
Debtholders;
“Designated Offshore Securities Market” has the meaning given to that term in Rule
902 of Regulation S as promulgated by the United States Securities and Exchange
Commission under the United States Securities Act of 1933, as amended from time to
time, and the rules and regulations promulgated thereunder, or any successor statute;
“Direct Registration System” means an electronic register of the New Common Shares
maintained by a transfer agent selected by Concordia;
“Distribution Record Date” means a date to be determined by Concordia in consultation
with the Trustees, the Agents and the Majority Initial Consenting Debtholders for
purposes of distributions under this Plan, provided that in respect of the Secured Term
Loans, the Secured Swap Instruments and the Unsecured Equity Bridge Loans the
Distribution Record Date shall be the Record Date;
“DTC” means the Depository Trust & Clearing Corporation and its successors and
assigns;
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“Early Consent Date” means 5:00 p.m. on June 6, 2018, or such later date as Concordia
may determine;
“Early Consenting Debtholders” means, collectively, the Early Consenting Secured
Debtholders and the Early Consenting Unsecured Debtholders;
“Early Consenting Secured Debtholder” means a Secured Debtholder that (i) executes
the Support Agreement or a Joinder Agreement (as defined in the Support Agreement)
prior to the Early Consent Date and complies with all of its obligations under the Support
Agreement in all material respects (including for certainty, and without limitation, voting
in favour of the Plan prior to the Voting Deadline), other than a beneficial Noteholder,
(ii) votes in favour of the Plan prior to the Early Consent Date, or (iii) otherwise supports
the Arrangement in a manner satisfactory to Concordia and the Majority Initial
Consenting Debtholders;
“Early Consenting Unsecured Debtholder” means an Unsecured Debtholder that (i)
executes the Support Agreement or a Joinder Agreement (as defined in the Support
Agreement) prior to the Early Consent Date and complies with all of its obligations under
the Support Agreement in all material respects (including for certainty, and without
limitation, voting in favour of the Plan prior to the Voting Deadline), other than a
beneficial Noteholder, (ii) votes in favour of the Plan prior to the Early Consent Date, or
(iii) otherwise supports the Arrangement in a manner satisfactory to Concordia and the
Majority Initial Consenting Debtholders;
“Effective Date” means the date shown on the Certificate of Arrangement issued by the
CBCA Director;
“Effective Time” means a time on the Effective Date as the Applicants and the Majority
Initial Consenting Debtholders may agree, each acting reasonably;
“Equity Unsecured Bridge Loan Settlement” means the settlement and termination of
the Two Year Equity Bridge Credit and Guaranty Agreement, as agreed to by Concordia
and the lenders party thereto;
“Escrow Agent” means, collectively, Kingsdale Shareholder Services US LLC and
Kingsdale Partners LP, or such other escrow agent as may be agreed by the parties to the
Escrow Agreements;
“Escrow Agreements” means, collectively, (i) the escrow agreement to be entered into
by the Escrow Agent, the Applicants and Xxxxxxx Xxxxx LLP (on behalf of the certain of
the Funding Private Placement Parties), and (ii) the escrow agreement to be entered into
by the Escrow Agent, the Applicants and Osler, Xxxxxx & Harcourt LLP (on behalf of the
certain of the Funding Private Placement Parties), in each case in connection with the
Private Placement;
“EUR/USD Exchange Rate” means the U.S. Federal Reserve daily U.S. Dollar to Euro
exchange rate;
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“EUR New Senior Secured Term Loans” means New Senior Secured Term Loans
denominated in Euros;
“EUR New Senior Secured Term Loans Allocation Amount” means €300 million;
“EUR New Senior Secured Term Loans Elector” has the meaning given to it in
Section 3.1(f);
“EUR New Senior Secured Term Loans Elector Pro Rata Share” means, with respect
to each EUR New Senior Secured Term Loans Elector, the percentage that the principal
amount of EUR New Senior Secured Term Loans such EUR New Senior Secured Term
Loans Elector has elected to receive in accordance with Section 3.1(e) (expressed as a
Euro dollar amount) bears to the total principal amount of EUR New Senior Secured
Term Loans that all EUR New Senior Secured Term Loans Electors have elected to
receive in accordance with Section 3.1(e) (expressed as a Euro dollar amount);
“EUR New Senior Secured Term Loans Deficiency” means the amount by which the
aggregate New Senior Secured Term Loans Currency Elections for EUR New Senior
Secured Term Loans made in accordance with Section 3.1(e) (expressed as a Euro dollar
amount) is less than the EUR New Senior Secured Term Loans Allocation Amount, if
applicable;
“EUR New Senior Secured Term Loans Excess” means the amount by which the
aggregate New Senior Secured Term Loans Currency Elections for EUR New Senior
Secured Term Loans made in accordance with Section 3.1(e) (expressed as a Euro dollar
amount) exceeds the EUR New Senior Secured Term Loans Maximum Amount, if
applicable;
“EUR New Senior Secured Term Loans Maximum Amount” means €400 million;
“Euros” means euros;
“Existing Equity” means all Existing Shares and all options, warrants, rights or similar
instruments derived from, relating to, or exercisable, convertible or exchangeable
therefor;
“Existing Equity Class Action Claims” means, collectively, (i) the claims asserted in
the proceedings pending before the Ontario Superior Court of Justice under the title
Xxxxxx X. Xxxxxxxx and Xxxxxxxxxx Xxxx v. Concordia International Corp., Xxxx Xxxxxxxx
and Xxxxxx Xx Xxxxxxxx (Court File No. CV-17-584809-00CP), (ii) the claims asserted in
the proceedings pending before the Superior Court of Quebec under the title Xxxxxx
Xxxxxx v. Concordia International Corp., Xxxx Xxxxxxxx and Xxxxxx Xx Xxxxxxxx
(Court File No. 000-00-000000-000), (iii) the claims asserted in the proceedings pending
before the United States District Court for the Southern District of New York under the
title Xxxxxx Xxxxx, individually and On Behalf of All Others Similarly Situated v.
Concordia International Corp., Xxxx Xxxxxxxx and Xxxxxx Xx Xxxxxxxx (Court File No.
1:16-cv-06467), and (iv) any claim for contribution or indemnity in respect of or related
to those claims listed in (i) to (iii) above;
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“Existing Equity Holders” means the holders of any Existing Equity;
“Existing Shareholders” means holders of the Existing Shares, in their capacities as
such;
“Existing Shares” means all Common Shares outstanding immediately prior to the
Effective Date;
“Final Order” means the Order of the Court approving the Arrangement under
section 192 of the CBCA, which shall include such terms as may be necessary or
appropriate to give effect to the Arrangement and this Plan, in form and substance
satisfactory to the Applicants and the Majority Initial Consenting Debtholders, each
acting reasonably;
“Funded Amounts” means the aggregate of all Private Placement Commitments (i)
deposited with the Escrow Agent in accordance with the Subscription Agreement and not
withdrawn from escrow in accordance with the Subscription Agreement or the Escrow
Agreement prior to the Effective Date, or (ii) satisfied in such other manner as Concordia
and the applicable Private Placement Party may agree in writing;
“Funding Private Placement Party” means a Private Placement Party that (i) deposits
its Private Placement Commitment with the Escrow Agent in accordance with the
Subscription Agreement, or (ii) satisfies its Private Placement Commitment in such other
manner as agreed to by Concordia and the applicable Private Placement Party in writing,
and in each case is not a Terminated Private Placement Party;
“Funding Private Placement Party Shares” means, with respect to each Funding
Private Placement Party, the number of Private Placement Shares that such Funding
Private Placement Party has agreed to purchase from Concordia determined by dividing
its Private Placement Commitment by the Issue Price;
“FX Date” means the date that is ten (10) days prior to the anticipated Effective Date, or
such other date as may be agreed by Concordia and the Majority Initial Consenting
Debtholders;
“GBP” means pounds sterling;
“GBP/USD Exchange Rate” means the U.S. Federal Reserve daily U.S. Dollar to GBP
exchange rate;
“Governance Agreement” means an agreement to be entered into among Concordia and
the Private Placement Parties with respect to certain governance matters and registration
rights, in form and substance satisfactory to Concordia, acting reasonably, and the
Majority Private Placement Parties;
“Governmental Entity” means any government, regulatory authority, governmental
department, agency, commission, bureau, official, minister, Crown corporation, court,
board, tribunal or dispute settlement panel or other law, rule or regulation-making
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organization or entity: (i) having or purporting to have jurisdiction on behalf of any
nation, province, territory or state or any other geographic or political subdivision of any
of them; or (ii) exercising, or entitled or purporting to exercise any administrative,
executive, judicial, legislative, policy, regulatory or taxing authority or power;
“Initial Consenting Secured Debtholders” means, collectively, the Consenting Secured
Debtholders that executed the Support Agreement on May 1, 2018, which are represented
by the Initial Consenting Secured Debtholders Advisors as of May 1, 2018;
“Initial Consenting Secured Debtholders Advisors” means, collectively, Osler, Xxxxxx
& Harcourt LLP and White & Case LLP, as legal advisors, Xxxxxxxx Xxxxx Capital, Inc.,
as financial advisor, and Deloitte LLP, as tax advisor, to the Initial Consenting Secured
Debtholders;
“Initial Consenting Unsecured Debtholders” means, collectively, the Consenting
Unsecured Debtholders that executed the Support Agreement on May 1, 2018, which are
represented by the Initial Consenting Unsecured Debtholders Advisors as of May 1,
2018;
“Initial Consenting Unsecured Debtholders Advisors” means, collectively, Xxxx,
Xxxxx Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, Xxxxxxx Xxxxx LLP, and Ashurst LLP, as legal
advisors, and Xxxxxxxxx & Co., LLC, as financial advisor, to the Initial Consenting
Unsecured Debtholders;
“Insurance Policies” means, any insurance policy maintained by Concordia pursuant to
which Concordia or any of its current of former directors or officers are insured;
“Interim Order” means the interim order of the Court in respect of the Applicants
pursuant to the CBCA, in form and substance acceptable to the Applicants and the
Majority Initial Consenting Debtholders, each acting reasonably, which, among other
things, approves the calling of, and the date for, the Meetings, as such order may be
amended from time to time in a manner acceptable to the Applicants and the Majority
Initial Consenting Debtholders, each acting reasonably;
“Intermediary” means a broker, custodian, investment dealer, nominee, bank, trust
company or other intermediary;
“Issue Price” means $13.69 per Common Share;
“Law” means any law, statute, constitution, treaty, convention, code, injunction, order,
decree, consent decree, judgment, rule regulation, ordinance or other pronouncement
having the effect of law whether in Canada, the United States or any other country, or any
domestic or foreign state, county, province, city or other political subdivision or of any
Governmental Entity;
“L/C Issuer” has the meaning given to it in the Secured Term Loan Agreement;
“Letter of Credit” has the meaning given to it in the Secured Term Loan Agreement;
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“Majority Private Placement Parties” means, at the relevant time, Remaining Private
Placement Parties holding in the aggregate more than two-thirds (662/3%) of the
aggregate Private Placement Commitments of all Remaining Private Placement Parties
under the Subscription Agreement;
“Majority Initial Consenting Debtholders” means, collectively, (i) the Majority Initial
Consenting Secured Debtholders and (ii) the Majority Initial Consenting Unsecured
Debtholders;
“Majority Initial Consenting Secured Debtholders” means, collectively, Initial
Consenting Secured Debtholders holding in aggregate more than half (50%) of the
aggregate principal amount of Secured Debt held by all Initial Consenting Secured
Debtholders, at the applicable time;
“Majority Initial Consenting Unsecured Debtholders” means, collectively, Initial
Consenting Unsecured Debtholders holding in aggregate more than half (50%) of the
aggregate principal amount of Unsecured Debt held by all Initial Consenting Unsecured
Debtholders, at the applicable time;
“Management Incentive Plan” means a new management incentive plan for Concordia,
acceptable to Concordia and the Majority Initial Consenting Debtholders, which
management incentive plan shall provide for the granting of various types of equity
awards, including stock options, share appreciation rights, restricted shares, restricted
share units, deferred share units and other share-based awards as determined by the board
of directors of reorganized Concordia (or the applicable compensation committee)
following the Effective Date, and which management incentive plan shall provide for the
issuance of Common Shares comprising an aggregate amount not exceeding 7.5% of the
outstanding Common Shares of Concordia immediately following the completion of the
transactions set forth in Section 5.3;
“Meetings” means, collectively, (i) the Secured Debtholders’ Meeting, (ii) the Unsecured
Debtholders’ Meeting and (iii) the Shareholders’ Meeting;
“New Common Shares” means, collectively, the Unsecured Debt Exchange Shares, the
Reallocated Unsecured Shares, the Unsecured Debtholder Early Consent Shares and the
Funding Private Placement Party Shares;
“New Senior Secured Debt” means, collectively, the New Senior Secured Term Loans
and the New Senior Secured Notes;
“New Senior Secured Debt Aggregate Principal Amount” means an amount equal to
(i) (a) 93.3835% of the aggregate principal amount of the Secured Debtholder Claims
held by the Early Consenting Secured Debtholders, less (b) the portion of the Secured
Debt Repayment Amount paid to the Early Consenting Secured Debtholders, less (c) the
aggregate Secured Debtholder Early Consent Cash Consideration paid to the Early
Consenting Secured Debtholders, and the results of the foregoing divided by (ii) the
fraction that the aggregate principal amount of the Secured Debtholder Claims held by
the Early Consenting Secured Debtholders represents of the aggregate principal amount
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of all Secured Debtholder Claims held by all Secured Debtholders; provided that for the
purposes of determining the principal amount of Secured Debtholder Claims in the
foregoing formula, Secured Debt denominated in GBP shall be converted to U.S. Dollars
based on the GBP/USD Exchange Rate on the FX Date;
“New Senior Secured Debt Guarantors” means certain of the Concordia Entities that
shall guarantee the New Senior Secured Term Loans and New Senior Secured Notes as
described in the Circular and/or as may otherwise be agreed by the Applicants, the
Majority Initial Consenting Secured Debtholders and the Majority Private Placement
Parties, each acting reasonably;
“New Senior Secured Noteholders” means those Secured Debtholders that receive New
Senior Secured Notes on the Effective Date in accordance with this Plan;
“New Senior Secured Notes” means the new senior secured notes to be issued by
Concordia pursuant to the New Senior Secured Notes Indenture, which notes will be
denominated in U.S. Dollars in a maximum aggregate principal amount of $300,000,000;
“New Senior Secured Notes Allocation Amount” means $300,000,000 less the
principal amount of New Senior Secured Notes to be issued to Secured Noteholders as
contemplated by Sections 3.1(a)(iv) and 3.1(b)(i);
“New Senior Secured Notes Deficiency” means the amount by which the aggregate
New Senior Secured Notes Elections made in accordance with Section 3.1(b)(iii)
(expressed as a dollar amount) is less than the New Senior Secured Notes Allocation
Amount, if applicable;
“New Senior Secured Notes Election” has the meaning given to it in Section 3.1(b)(iii);
“New Senior Secured Notes Election Amount” means, with respect to each New Senior
Secured Notes Elector, the amount of New Senior Secured Notes it has elected to receive
pursuant to Section 3.1(b)(iii), as may be adjusted pursuant to Section 3.1(c) or Section
3.1(d);
“New Senior Secured Notes Election Deadline” means 5:00 p.m. on June 15, 2018, or
such other date as the Applicants and the Majority Initial Consenting Secured
Debtholders may agree, each acting reasonably;
“New Senior Secured Notes Elector” has the meaning given to it in Section 3.1(c);
“New Senior Secured Notes Elector Pro Rata Share” means, with respect to each New
Senior Secured Notes Elector, the percentage that the principal amount of New Senior
Secured Notes that such New Senior Secured Notes Elector has elected to receive in
accordance with Section 3.1(b)(iii) bears to the total principal amount of New Senior
Secured Notes that all New Senior Secured Electors have elected to receive in accordance
with Section 3.1(b)(iii);
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“New Senior Secured Notes Elector Settlement Information” means such information
as Concordia and/or its agent may reasonably request of a New Senior Secured Notes
Elector in order to effect the delivery of such New Senior Secured Notes Elector’s New
Senior Secured Notes in accordance with this Plan;
“New Senior Secured Notes Excess” means the amount by which the aggregate New
Senior Secured Notes Elections made in accordance with Section 3.1(b)(iii) (expressed as
a dollar amount) exceeds the New Senior Secured Notes Allocation Amount, if
applicable;
“New Senior Secured Notes Indenture” means the indenture to be entered into on the
Effective Date by Concordia, the New Senior Secured Debt Guarantors and the New
Senior Secured Notes Trustee on the terms substantially as described in the Circular
and/or as may otherwise be agreed by the Applicants, the Majority Initial Consenting
Secured Debtholders and the Majority Private Placement Parties, each acting reasonably,
pursuant to which the New Senior Secured Notes will be issued, and which New Senior
Secured Notes Indenture may, at the election of the Majority Initial Consenting Secured
Noteholders, take the form of an amendment and restatement to the Secured Notes
Indenture;
“New Senior Secured Notes Trustee” means the indenture trustee under the New Senior
Secured Notes Indenture, as agreed to by the Applicants, the Majority Initial Consenting
Secured Debtholders and the Majority Private Placement Parties, each acting reasonably;
“New Senior Secured Term Loan Agent” means the agent under the New Senior
Secured Term Loan Agreement, as agreed to by the Applicants, the Majority Initial
Consenting Secured Debtholders and the Majority Private Placement Parties, each acting
reasonably;
“New Senior Secured Term Loan Agreement” means the senior secured term loan
agreement to be entered into (or deemed to be entered into, as applicable) on the
Effective Date by Concordia, the New Senior Secured Debt Guarantors, the New Senior
Secured Term Loan Agent and the New Senior Secured Term Loan Lenders on the terms
substantially as described in the Circular and/or as may otherwise be agreed by the
Applicants, the Majority Initial Consenting Secured Debtholders and the Majority Private
Placement Parties, each acting reasonably, pursuant to which the New Senior Secured
Term Loans will be issued, and which New Senior Secured Term Loan Agreement may,
at the election of the Majority Initial Consenting Secured Noteholders, take the form of
an amendment and restatement to the Secured Term Loan Agreement;
“New Senior Secured Term Loan Eligible Debt” means the Secured Term Loans and
the Secured Swap Instruments;
“New Senior Secured Term Loan Lender Information” means such information and
documentation as the New Senior Secured Term Loan Agent may require from recipients
of the New Senior Secured Term Loans in order to comply with any anti-money
laundering, know your client, proceeds of crime and other applicable Laws to the New
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Senior Secured Term Loan Agent, or any applicable customary policies or procedures of
the New Senior Secured Term Loan Agent;
“New Senior Secured Term Loan Lenders” means those Secured Debtholders that
receive New Senior Secured Term Loans on the Effective Date in accordance with this
Plan;
“New Senior Secured Term Loans” means the new senior secured term loans to be
issued pursuant to the New Senior Secured Term Loan Agreement, which term loans will
be denominated in part in Euros and in part in U.S. Dollars in amounts as determined by
Concordia with the consent of the Majority Initial Consenting Secured Debtholders and
the Majority Private Placement Parties;
“New Senior Secured Term Loans Currency Election” has the meaning given to it in
Section 3.1(e);
“New Senior Secured Term Loans Currency Election Deadline” means 5:00 p.m. on
June 15, 2018, or such other date as the Applicants and the Majority Initial Consenting
Secured Debtholders may agree, each acting reasonably;
“New Senior Secured Term Loans Euro Share” means the percentage of New Senior
Secured Term Loans which will be denominated in Euros, as determined by Concordia
with the consent of the Majority Initial Consenting Secured Debtholders and the Majority
Private Placement Parties;
“Non-Currency Elected Secured Debt” means New Senior Secured Term Loan Eligible
Debt held by a Secured Debtholder in respect of which a New Senior Secured Term
Loans Currency Election has not been made in accordance with Section 3.1(e);
“Non-Currency Electing Pro Rata Share” means, with respect to each Non-Currency
Electing Secured Debtholder, the percentage that such Non-Currency Electing Secured
Debtholder’s principal amount of Non-Currency Elected Secured Debt bears to the total
principal amount of Non-Currency Elected Secured Debt held by all Non-Currency
Electing Secured Debtholders;
“Non-Currency Electing Secured Debtholder” has the meaning given to it in Section
3.1(g);
“Non-Elected Secured Term Loans” means Secured Term Loans held by a Consenting
Unsecured Debtholder in respect of which a New Senior Secured Notes Election has not
been made in accordance with Section 3.1(b)(iii);
“Noteholder” means a holder of (i) Secured Notes, (ii) 7.00% Unsecured Notes, or (iii)
9.50% Unsecured Notes, as applicable;
“Obligations” means all liabilities, duties and obligations, including without limitation
principal and interest, any make whole, redemption or similar premiums, reimbursement
obligations, fees, penalties, damages, guarantees, indemnities, costs, expenses or
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otherwise, and any other liabilities, duties or obligations, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, the applicable Debt Document;
“Order” means any order entered by the Court in the CBCA Proceedings;
“Person” means an individual, a corporation, a partnership, a limited liability company,
organization, trustee, executor, administrator, a trust, an unincorporated association, a
Governmental Entity or any agency, instrumentality or political subdivision of a
Governmental Entity, or any other entity or body;
“Plan” means this plan of arrangement and any amendments, modifications or
supplements hereto made in accordance with the terms hereof or made at the direction of
the Court in the Interim Order or Final Order or otherwise with the consent of the
Applicants and the Majority Initial Consenting Debtholders, each acting reasonably;
“Private Placement” means the private placement pursuant to which the Private
Placement Parties will commit to purchase the Private Placement Shares in accordance
with the Subscription Agreement and this Plan;
“Private Placement Commitment” means the respective amount of the Private
Placement expressed as a dollar amount that each Private Placement Party agrees to
subscribe for, as set forth in the Subscription Agreement (as may be adjusted from time to
time in accordance with the terms of the Subscription Agreement);
“Private Placement Commitment Consideration” means cash in the amount of
$44,000,000, earned and payable to the Private Placement Parties pursuant to the
Subscription Agreement, as may be adjusted pursuant to the terms of the Subscription
Agreement;
“Private Placement Parties” means those Persons who are party to the Subscription
Agreement and who have agreed to purchase Common Shares pursuant to the Private
Placement in accordance with the terms of the Subscription Agreement (as such parties
may be replaced or as additional parties may agree to be bound by the Subscription
Agreement from time to time in accordance with the Subscription Agreement);
“Private Placement Pro Rata Share” means, as to any Funding Private Placement
Party, the percentage that such Funding Private Placement Party’s Private Placement
Commitment bears to the Total Offering Size;
“Private Placement Shares” means up to the []1 Common Shares to be issued to
Private Placement Parties pursuant to the Private Placement;
“Proxy and Information Agent” means Kingsdale Partners LP;
1 To represent 87.69% of the outstanding Common Shares immediately following implementation of the Plan,
subject to MIP Dilution.
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“Reallocated Unsecured Shares” means the number of Common Shares equal to the
number of Common Shares in the Unsecured Early Consent Share Pool less the aggregate
number of Unsecured Debtholder Early Consent Shares issued to the Early Consenting
Unsecured Debtholders pursuant to Section 3.2(a)(iii);
“Record Date” means 5:00 p.m. on May 9, 2018;
“Released Claims” means, collectively, the matters that are subject to release and
discharge pursuant to Sections 7.1 and 7.2, as applicable;
“Released Parties” means, collectively, the Concordia Released Parties, the
Securityholder Released Parties and the Additional Released Parties, as applicable;
“Remaining Private Placement Parties” means the Private Placement Parties that are
not Terminated Private Placement Parties at the applicable time;
“Remaining Secured Debt” has the meaning given to it in Section 5.3(e)(i);
“Remaining Unsecured Debt” has the meaning given to it in Section 5.3(e)(iii);
“Secured Debt” means, collectively, the debt outstanding under the Secured Debt
Documents;
“Secured Debt Documents” means, collectively, (i) the Secured Term Loan Credit
Agreement; (ii) the Secured Notes Indenture; (iii) the Secured Swap Instruments; and (iv)
all related documentation, including, without limitation, all guarantee and security
documentation, related to the foregoing;
“Secured Debt Repayment Amount” means $500,000,000 in cash;
“Secured Debtholder” means a holder of Secured Debt, in its capacity as such;
“Secured Debtholder Claims” means all Obligations in respect of the Secured Debt and
the Secured Debt Documents; provided, however, that the total principal amount of the
Secured Debtholder Claims with respect to the Secured Swap Instruments shall be in the
amount of $114,431,046;
“Secured Debtholder Early Consent Cash Consideration” means, with respect to each
Early Consenting Secured Debtholder, cash in an amount equal to 5% of the principal
amount of Secured Debt held by such Early Consenting Secured Debtholder as of the
Record Date and voted in favour of the Plan (i) by the Early Consent Date, or (ii) in the
case of an Early Consenting Secured Debtholder that is party to the Support Agreement
(other than in respect of any Secured Notes it does not hold in registered form), by the
Voting Deadline, in each case paid in exchange for its Secured Debtholder Claims in
accordance with this Plan, provided that for the purpose of calculating the Secured
Debtholder Early Consent Cash Consideration, Secured Debt denominated in GBP shall
be converted to U.S. Dollars based on the GBP/USD Exchange Rate on the FX Date to
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the extent such Secured Debtholder Early Consent Cash Consideration is paid in U.S.
Dollars;
“Secured Debtholder Pro Rata Share” means the percentage that the principal amount
of Secured Debt held by a Secured Debtholder bears to the aggregate principal amount of
all Secured Debt as at the Distribution Record Date, provided that for the purposes of
determining the Secured Debtholder Pro Rata Share, (i) the principal amount of Secured
Debt shall be determined in accordance with 3.1(h), and (ii) all Secured Debt
denominated in GBP shall be converted to U.S. Dollars based on the GBP/USD
Exchange Rate on the FX Date;
“Secured Debtholders’ Arrangement Resolution” means the resolution of the Secured
Debtholders relating to the Arrangement to be considered at the Secured Debtholders’
Meeting, substantially in the form attached as Appendix “A” to the Circular;
“Secured Debtholders’ Meeting” means the meeting of the Secured Debtholders as of
the Record Date to be called and held pursuant to the Interim Order for the purpose of
considering and voting on the Secured Debtholders’ Arrangement Resolution and to
consider such other matters as may properly come before such meeting and includes any
adjournment(s) or postponement(s) of such meeting;
“Secured Noteholders” means the holders of the Secured Notes;
“Secured Notes” means the 9.00% First Lien Senior Secured Notes due 2022 issued
under the Secured Notes Indenture;
“Secured Notes Trustee” means U.S. Bank National Association, as Trustee and as
Collateral Agent under the Secured Notes Indenture, and any successor thereof;
“Secured Notes Indenture” means the Indenture for the Secured Notes dated October
13, 2016 by and among Concordia, the guarantors party thereto, and the Secured Notes
Trustee, as amended, modified and/or supplemented from time to time as of the date
hereof;
“Secured Swap Confirmations” means the Swap Confirmations entered into as of
August 17, 2016 and November 8, 2016 between Xxxxxxx Xxxxx International and CIJL
in accordance with the Secured Swap ISDA;
“Secured Swap Interest Settlement Agreement” means the Settlement Agreement
entered into as of November 25, 2017 between Xxxxxxx Sachs International and
Concordia;
“Secured Swap Instruments” means the Secured Swap ISDA and the Secured Swap
Confirmations, as amended by the Secured Swap Interest Settlement Agreement;
“Secured Swap ISDA” means the International Swaps and Derivatives Association 2002
Master Agreement dated as of August 15, 2016, between Xxxxxxx Xxxxx International
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and CIJL (as amended, or supplemented, together with all schedules, annexes and
exhibits thereto);
“Secured Swap Lender” means Xxxxxxx Sachs International, the swap provider under
the Secured Swap Instruments, and any permitted assignee;
“Secured Term Loan Agent” means Xxxxxxx Xxxxx Bank USA, in its capacity as
Administrative Agent and Collateral Agent under the Secured Term Loan Credit
Agreement and in any other capacity under the Secured Term Loan Credit Agreement,
and any successor thereof;
“Secured Term Loan Credit Agreement” means the Credit and Guaranty Agreement
dated October 21, 2015 by and among, inter alia, Concordia, the guarantors party thereto,
the Secured Term Loan Agent, and the lenders and other parties thereto, as amended,
modified and/or supplemented from time to time;
“Secured Term Loan Lenders” means the lenders from time to time under the Secured
Term Loans;
“Secured Term Loans” means the secured term loans issued and outstanding pursuant to
the Secured Term Loan Credit Agreement;
“Securityholder Released Parties” means, collectively, the Trustees and Agents, in any
of their respective capacities under the applicable Debt Documents, the Administrative
Agent under the Two Year Equity Bridge Credit and Guaranty Agreement, in each case
including any predecessors in such capacity, the Early Consenting Debtholders, and each
of their respective current and former directors, officers, managers, partners, employees,
auditors, financial advisors, legal counsel and agents which, for the avoidance of doubt,
shall include the Advisors;
“Share Consolidation” has the meaning given to it in Section 5.3(d);
“Share FMV” has the meaning given to it in Section 5.3(e)(iii);
“Shareholders’ Arrangement Resolution” means the resolution of the Existing
Shareholders relating to the Arrangement to be considered at the Shareholders’ Meeting,
substantially in the form attached as Appendix “C” to the Circular;
“Shareholders’ Meeting” means the meeting of the Existing Shareholders as of the
Record Date to be called and held pursuant to the Interim Order for the purpose of
considering and voting on the Shareholders’ Arrangement Resolution and to consider
such other matters as may properly come before such meeting and includes any
adjournment(s) or postponement(s) of such meeting;
“Subordinated Promissory Note” means the Non-Negotiable Subordinated Promissory
Note made by Concordia Healthcare Inc. in favour of Xxxxxxxxx Xxxxxxx, dated
December 20, 2013, or any permitted assignee thereof, as amended, modified and/or
supplemented from time to time;
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“Subordinated Promissory Noteholder” means Xxxxxxxxx Xxxxxxx, in his capacity as
stockholders’ representative and the holder of the Subordinated Promissory Note, or any
permitted assignee thereof;
“Subscription Agreement” means the subscription agreement dated May 1, 2018 among
Concordia and the Private Placement Parties, as it may be amended, modified and/or
supplemented from time to time;
“Subsidiary Guarantors” means, collectively, Concordia Laboratories Inc., S.a.R.L.,
Concordia Pharmaceuticals Inc., S.a.R.L., Concordia Investments (Jersey) Limited,
Concordia Financing (Jersey) Limited, Amdipharm Holdings S.a.R.L., Amdipharm AG,
Amdipharm B.V., Amdipharm Limited, Amdipharm Mercury Holdco UK Limited,
Amdipharm Mercury UK Ltd., Concordia Holdings (Jersey) Limited, Amdipharm
Mercury International Limited, Concordia Investment Holdings (UK) Limited, Mercury
Pharma Group Limited, Concordia International Rx (UK) Limited, Abcur AB, Mercury
Pharmaceuticals Limited, Focus Pharma Holdings Limited, Focus Pharmaceuticals
Limited, Mercury Pharma (Generics) Limited, Mercury Pharmaceuticals (Ireland)
Limited and Mercury Pharma International Limited;
“Support Agreement” means the support agreement (including all schedules attached
thereto) among Concordia and the Consenting Debtholders dated May 1, 2018, as it may
be amended, modified and/or supplemented from time to time;
“Terminated Private Placement Party” means a Private Placement Party that (i) is a
Defaulting Private Placement Party (as such term is defined in the Subscription
Agreement), or (ii) is an Objecting Private Placement Party (as such term is defined in the
Subscription Agreement), in each case in respect of whom the Subscription Agreement is
terminated;
“Total Offering Size” means $586,500,000, subject to any reduction in accordance with
the Subscription Agreement;
“Transfer Agent” means, collectively, TSX Trust Company and Continental Stock
Transfer & Trust Company;
“Trustees” means, collectively, the Secured Notes Trustee and the Unsecured Notes
Trustees;
“TSX” means the Toronto Stock Exchange;
“Two Year Equity Bridge Credit and Guaranty Agreement” means the Two Year
Equity Bridge Credit and Guaranty Agreement dated October 21, 2015 by and among,
inter alia, Concordia, the guarantors party thereto, the administrative agent, and the
lenders from time to time party thereto, as amended, modified and/or supplemented from
time to time;
“Unsecured Debt” means, collectively, the debt outstanding under the Unsecured Debt
Documents;
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“Unsecured Debt Documents” means, collectively: (i) the 7.00% Unsecured Notes
Indenture, (ii) the 9.50% Unsecured Notes Indenture, (iii) the Unsecured Equity Bridge
Loan Agreement; (iv) the Subordinated Promissory Note; and (v) all related
documentation, including, without limitation, all guarantee and security documentation,
related to the foregoing;
“Unsecured Debt Exchange Shares” means the aggregate []2 Common Shares to be
issued to Unsecured Debtholders in exchange for their Unsecured Debtholder Claims in
accordance with Section 3.2(a)(i) of this Plan;
“Unsecured Debtholder” means a holder of Unsecured Debt, in its capacity as such;
“Unsecured Debtholder Claims” means all Obligations in respect of the Unsecured
Debt and the Unsecured Debt Documents;
“Unsecured Debtholder Early Consent Shares” means []3 Common Shares per
$1,000 of principal amount of Unsecured Debtholder Claims held by an Early Consenting
Unsecured Debtholder as of the Record Date and voted in favour of the Plan (i) by the
Early Consent Date, or (ii) in the case of an Early Consenting Unsecured Debtholder that
is party to the Support Agreement (other than in respect of any Unsecured Notes it does
not hold in registered form), by the Voting Deadline;
“Unsecured Debtholder Pro Rata Share” means the percentage that the principal
amount of Unsecured Debt plus accrued and unpaid interest thereon (calculated at the
contractual non-default rate) held by an Unsecured Debtholder bears to the aggregate
principal amount of all Unsecured Debt plus accrued and unpaid interest thereon
(calculated at the contractual non-default rate) as at the Distribution Record Date;
“Unsecured Debtholder Share Registration Form” means the Unsecured Debtholder
Share Registration Form to be distributed to Unsecured Equity Bridge Loan Lenders and
the Subordinated Promissory Noteholder in order for them to provide registration and
delivery instructions in respect of the Unsecured Debt Exchange Shares, Reallocated
Unsecured Shares and Unsecured Debtholder Early Consent Shares to which they are
entitled under this Plan;
“Unsecured Debtholders’ Arrangement Resolution” means the resolution of the
Unsecured Debtholders relating to the Arrangement to be considered at the Unsecured
Debtholders’ Meeting, substantially in the form attached as Appendix “B” to the
Circular;
“Unsecured Debtholders’ Meeting” means the meeting of the Unsecured Debtholders
as of the Record Date to be called and held pursuant to the Interim Order for the purpose
of considering and voting on the Unsecured Debtholders’ Arrangement Resolution and to
2 To represent 7.97% of the pro forma issued and outstanding shares, subject to MIP Dilution.
3 To be determined based on Unsecured Debtholder Pro Rata Share of available Common Shares under the
Unsecured Debtholder Early Consent Share Pool.
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consider such other matters as may properly come before such meeting and includes any
adjournment(s) or postponement(s) of such meeting;
“Unsecured Early Consent Share Pool” means the []4 Common Shares available for
issuance to Early Consenting Unsecured Debtholders in exchange for their Unsecured
Debtholder Claims in the aggregate in accordance with Section 3.2(a)(iii) of this Plan;
“Unsecured Equity Bridge Loan Agreement” means the Extended Equity Bridge
Credit and Guaranty Agreement dated October 21, 2015 by and among, inter alia,
Concordia, the guarantors party thereto, the Unsecured Equity Bridge Loan Agent, and
the lenders party thereto, as amended, modified and/or supplemented from time to time;
“Unsecured Equity Bridge Loan Agent” means Wilmington Trust, National
Association, as Administrative Agent under the Unsecured Equity Bridge Loan
Agreement, and any successor thereof;
“Unsecured Equity Bridge Loan Lenders” means the lenders from time to time under
the Unsecured Equity Bridge Loan Agreement;
“Unsecured Noteholders” means the holders of the Unsecured Notes;
“Unsecured Notes” means, collectively, the 7.00% Unsecured Notes and the 9.50%
Unsecured Notes;
“Unsecured Notes Indentures” means, collectively, the 7.00% Unsecured Notes
Indenture and the 9.50% Unsecured Notes Indenture;
“Unsecured Notes Trustees” means, collectively, the 7.00% Unsecured Notes Trustee
and the 9.50% Unsecured Notes Trustee;
“U.S. Dollars” or “$” means the lawful currency of the United States of America;
“USD New Senior Secured Term Loans” means New Senior Secured Term Loans
denominated in U.S. Dollars, in an amount as determined by Concordia with the consent
of the Majority Initial Consenting Secured Debtholders and the Majority Private
Placement Parties; and
“Voting Deadline” means 5:00 p.m. on June 15, 2018, or such later date as may be
agreed by Concordia and the Majority Initial Consenting Debtholders in the event that the
Meetings are postponed or adjourned.
4 To represent 3.99% of the pro forma issued and outstanding shares, subject to MIP Dilution.
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1.2 Certain Rules of Interpretation
For the purposes of this Plan:
(a) Unless otherwise expressly provided herein, any reference in this Plan to an
instrument, agreement or an Order or an existing document or exhibit filed or to
be filed means such instrument, agreement, Order, document or exhibit as it may
have been or may be amended, modified, restated or supplemented in accordance
with its terms;
(b) The division of this Plan into articles and sections is for convenience of reference
only and does not affect the construction or interpretation of this Plan, nor are the
descriptive headings of articles and sections intended as complete or accurate
descriptions of the content thereof;
(c) The use of words in the singular or plural, or with a particular gender, including a
definition, shall not limit the scope or exclude the application of any provision of
this Plan to such Person (or Persons) or circumstances as the context otherwise
permits;
(d) The words “includes” and “including” and similar terms of inclusion shall not,
unless expressly modified by the words “only” or “solely”, be construed as terms
of limitation, but rather shall mean “includes but is not limited to” and “including
but not limited to”, so that references to included matters shall be regarded as
illustrative without being either characterizing or exhaustive;
(e) Unless otherwise specified, time periods within or following which any payment
is to be made or act is to be done shall be calculated by excluding the day on
which the period commences and including the day on which the period ends;
(f) Unless otherwise provided, any reference to a statute or other enactment of
parliament, a legislature or other Governmental Entity includes all regulations
made thereunder, all amendments to or re-enactments of such statute or
regulations in force from time to time, and, if applicable, any statute or regulation
that supplements or supersedes such statute or regulation;
(g) References to a specific Recital, Article or Section shall, unless something in the
subject matter or context is inconsistent therewith, be construed as references to
that specific Recital, Article or Section of this Plan, whereas the terms “this Plan”,
“hereof”, “herein”, “hereto”, “hereunder” and similar expressions shall be deemed
to refer generally to this Plan and not to any particular Recital, Article, Section or
other portion of this Plan and include any documents supplemental hereto; and
(h) The word “or” is not exclusive.
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1.3 Governing Law
This Plan shall be governed by and construed in accordance with the laws of Ontario and the
federal laws of Canada applicable therein. All questions as to the interpretation or application of
this Plan and all proceedings taken in connection with this Plan and its provisions shall be
subject to the exclusive jurisdiction of the Court.
1.4 Currency
Unless otherwise stated, all references in this Plan to sums of money are expressed in, and all
payments provided for herein shall be made in, U.S. Dollars.
1.5 Date for Any Action
If the date on which any action is required to be taken hereunder by a Person is not a Business
Day, such action shall be required to be taken on the next succeeding day which is a Business
Day.
1.6 Time
Time shall be of the essence in this Plan. Unless otherwise specified, all references to time
expressed in this Plan and in any document issued in connection with this Plan mean local time
in Xxxxxxx, Xxxxxxx, Xxxxxx, and any reference to an event occurring on a Business Day shall
mean prior to 5:00 p.m. on such Business Day.
ARTICLE 2
PRIVATE PLACEMENT
2.1 Issuance of Private Placement Shares
On the Effective Date, subject to and in accordance with the terms of the Subscription
Agreement, and in accordance with the steps and sequences set forth in Section 5.3, (i)
Concordia shall cause to be issued and delivered to each Funding Private Placement Party its
Funding Private Placement Party Shares, and (ii) Concordia shall pay to each Funding Private
Placement Party its Private Placement Pro Rata Share of the Private Placement Commitment
Consideration in accordance with Article 4. The Private Placement Shares shall be issued as fully
paid and non-assessable shares and shall bear a legend restricting the transfer of such Private
Placement Shares, as contemplated by Section 2(e) of the Subscription Agreement.
ARTICLE 3
TREATMENT OF AFFECTED PARTIES
3.1 Treatment of Secured Debtholders
(a) On the Effective Date, and in accordance with the steps and in the sequence set
forth in Section 5.3, each Secured Debtholder shall receive:
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(i) all accrued and unpaid interest outstanding in respect of its Secured Debt
(calculated at the contractual non-default rate applicable under the relevant
Secured Debt Document, not including any compounding interest, and
based on the outstanding principal amount of the applicable Secured Debt
(not reduced by any unamortized original issue discount), unless there has
been a payment default with respect to any scheduled payments of interest
(at contractual non-default rates, not including compounding interest) or
amortization, as applicable, under the Secured Debt, on or prior to the
Effective Date, in which case interest shall accrue at the default-rate for
the period from such default until the Effective Date, for certainty, without
giving effect to any acceleration under the Secured Debt that may have
arisen from the commencement of the CBCA Proceedings) in full in cash;
(ii) its Secured Debtholder Pro Rata Share of the Secured Debt Repayment
Amount;
(iii) its Secured Debtholder Pro Rata Share of the Additional Cash Amount, if
any;
(iv) New Senior Secured Term Loans and/or New Senior Secured Notes, at its
election in accordance with this Section 3.1, if applicable, in an aggregate
principal amount equal to its Secured Debtholder Pro Rata Share of the
New Senior Secured Debt Aggregate Principal Amount, as adjusted based
on the EUR/USD Exchange Rate on the FX Date to the extent that it
receives a portion of its New Senior Secured Term Loans in the form of
EUR New Senior Secured Term Loans; and
(v) if the Secured Debtholder is an Early Consenting Secured Debtholder, its
Secured Debtholder Early Consent Cash Consideration,
all of which shall, and shall be deemed to, be received in full and final settlement
of its Secured Debt and its Secured Debtholder Claims; provided that all
consideration payable by Concordia to the Secured Swap Lender in consideration
for the full and final settlement of its Secured Debtholder Claims under the
Secured Swap Instruments shall be paid by Concordia for and on behalf of CIJL.
(b) Each Secured Debtholder shall receive its New Senior Secured Debt as
contemplated by Section 3.1(a)(iv) as follows:
(i) in respect of the Secured Notes held by a Secured Noteholder, in the form
of New Senior Secured Notes;
(ii) in respect of the Secured Swap Instruments held by the Secured Swap
Lender, in the form of New Senior Secured Term Loans; and
(iii) in respect of the Secured Term Loans held by a Secured Term Loan
Lender, in the form of New Senior Secured Term Loans; provided that
each Secured Term Loan Lender as of the Record Date shall be entitled to
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elect to receive all or a portion of its New Senior Secured Debt in respect
of its Secured Term Loans in the form of New Senior Secured Notes (the
“New Senior Secured Notes Election”) by submitting a New Senior
Secured Notes Election to Concordia (or its agents) prior to the New
Senior Secured Notes Election Deadline pursuant to the terms of the
Interim Order, subject to Section 3.1(c) and Section 3.1(d).
(c) In the event that New Senior Secured Notes Elections are made such that the New
Senior Secured Notes Election Amount elected for by Secured Term Loan
Lenders pursuant to Section 3.1(b)(iii) (each such Secured Term Loan Lender, a
“New Senior Secured Notes Elector”) would exceed the New Senior Secured
Notes Allocation Amount, each New Senior Secured Notes Elector shall be
deemed to have made a partial election to receive New Senior Secured Term
Loans in respect of its Secured Term Loans in an amount equal to its New Senior
Secured Notes Elector Pro Rata Share of the New Senior Secured Notes Excess
and its New Senior Secured Notes Election Amount shall be reduced on a
corresponding basis such that the total principal amount of all New Senior
Secured Notes to be issued in respect of Secured Term Loans pursuant to this Plan
is equal to the New Senior Secured Notes Allocation Amount.
(d) In the event that New Senior Secured Notes Elections are made such that the New
Senior Secured Notes Election Amount elected for by the New Senior Secured
Notes Electors pursuant to Section 3.1(b)(iii) would be less than the New Senior
Secured Notes Allocation Amount, each Initial Consenting Unsecured Debtholder
that holds Secured Term Loans and that did not make a New Senior Secured
Notes Election for all or any portion of its Secured Term Loans shall be deemed
to have made a New Senior Secured Notes Election (and to be a New Senior
Secured Notes Elector) in respect of its Secured Term Loans in an amount equal
to its Consenting Unsecured Debtholder Notes Election Pro Rata Share of the
New Senior Secured Notes Deficiency such that the total principal amount of
New Senior Secured Notes to be issued to New Senior Secured Notes Electors (in
such capacity) in respect of Secured Term Loans pursuant to this Plan is equal to
the New Senior Secured Notes Allocation Amount, and the amount of New
Senior Secured Term Loans that would otherwise have been issued to such Initial
Consenting Unsecured Debtholder shall be reduced by an amount equal to its
Initial Consenting Unsecured Debtholder Notes Election Pro Rata Share of the
New Senior Secured Notes Deficiency; provided that no such Initial Consenting
Unsecured Debtholder shall receive, in respect of its Secured Term Loans, New
Senior Secured Debt in an aggregate principal amount in excess of its Secured
Debtholder Pro Rata Share of the New Senior Secured Debt Aggregate Principal
Amount, as adjusted based on the EUR/USD Exchange Rate on the FX Date to
the extent that it receives a portion of its New Senior Secured Term Loans in the
form of EUR New Senior Secured Term Loans and, the total principal amount of
New Senior Secured Notes to be issued to New Senior Secured Notes Electors
may be less than the New Senior Secured Notes Allocation Amount as a result of
such maximum.
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(e) Each Secured Debtholder entitled to receive New Senior Secured Term Loans
pursuant to Section 3.1(b)(ii) or 3.1(b)(iii) shall be entitled to elect (its “New
Senior Secured Term Loans Currency Election”) to receive its New Senior
Secured Term Loans as USD New Senior Secured Term Loans and/or EUR New
Senior Secured Term Loans (in an amount determined based on the EUR/USD
Exchange Rate on the FX Date) in the proportions specified by such Secured
Debtholder by submitting its New Senior Secured Term Loans Currency Election
to Concordia (or its agents) prior to the New Senior Secured Term Loans
Currency Election Deadline, subject to Sections 3.1(f) and 3.1(g);
(f) In the event that New Senior Secured Term Loans Currency Elections are made
such that the aggregate principal amount of EUR New Senior Secured Term
Loans elected for by Secured Debtholders pursuant to Section 3.1(e) (each such
Secured Debtholder, a “EUR New Senior Secured Term Loan Elector”) would
exceed the EUR New Senior Secured Term Loans Maximum Amount, each EUR
New Senior Secured Term Loan Elector shall be deemed to have made a partial
election to receive USD New Senior Secured Term Loans in respect of the New
Senior Secured Term Loans it is entitled to receive pursuant to this Plan in an
amount equal to its EUR New Senior Secured Term Loan Elector Pro Rata Share
of the EUR New Senior Secured Term Loan Elector Excess and its EUR New
Senior Secured Term Loan Election Amount shall be reduced on a corresponding
basis such that the total principal amount of all EUR New Senior Secured Term
Loans to be issued pursuant to this Plan is equal to the EUR New Senior Secured
Notes Allocation Amount.
(g) In the event that New Senior Secured Term Loans Currency Elections are made
such that the aggregate principal amount of EUR New Senior Secured Term
Loans elected for by EUR New Senior Secured Term Loan Electors pursuant to
Section 3.1(e) would be less than the EUR New Senior Secured Term Loans
Allocation Amount, each Secured Debtholder entitled to receive New Senior
Secured Term Loans and that did not make a New Senior Secured Term Loans
Currency Election (a “Non-Currency Electing Secured Debtholder”) shall be
deemed to have made a New Senior Secured Term Loans Currency Election in
respect of the New Senior Secured Term Loans to which it is entitled to receive
pursuant to Section 3.1(b)(ii) or 3.1(b)(iii) in an amount equal to its Non-Currency
Electing Pro Rata Share of the EUR New Senior Secured Term Loans Deficiency
and shall be deemed to receive the balance of its New Senior Secured Term Loans
(if any) as USD New Senior Secured Term Loans; provided that no such Non-
Currency Electing Secured Debtholder shall receive, in respect of its New Senior
Secured Term Loan Eligible Debt, New Senior Secured Debt in an aggregate
principal amount in excess of its Secured Debtholder Pro Rata Share of the New
Senior Secured Debt Aggregate Principal Amount, as adjusted based on the
EUR/USD Exchange Rate on the FX Date to the extent that it receives a portion
of its New Senior Secured Term Loans in the form of EUR New Senior Secured
Term Loans and, the total principal amount of EUR New Senior Secured Term
Loans may be less than the EUR New Senior Secured Term Loans Allocation
Amount as a result of such maximum.
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(h) Except as otherwise noted herein, all references to the principal amount of the
Secured Debt or the Secured Debtholder Claims contained in this Plan shall refer
to the principal amount of such Secured Debt or Secured Debtholder Claims
reduced by any unamortized original issue discount and excluding any make-
whole premiums, redemption premiums or other similar premiums. The amount
of unamortized original issue discount in respect of the Secured Debt shall be
calculated on the basis as has been agreed to by Concordia and the Majority Initial
Consenting Debtholders prior to the execution of the Support Agreement.
(i) The compensation, the reasonable and documented fees, expenses and
disbursements (including, without limitation, the reasonable and documented fees,
expenses and disbursements of attorneys, advisors or agents retained or utilized
by the Secured Notes Trustee, the Secured Term Loan Agent and the Secured
Swap Lender, as applicable, acting reasonably), and the indemnity claims of
Secured Notes Trustee, the Secured Term Loan Agent and the Secured Swap
Lender, as applicable, in accordance with the applicable Secured Debt Documents
shall be paid in full in cash by Concordia pursuant to the applicable Secured Debt
Documents.
(j) After giving effect to the terms of this Section 3.1:
(i) subject in all respects to the below subsection (ii) of this Section 3.1(j),
(A) the Obligations of the Concordia Entities with respect to the Secured
Debt, the Secured Debtholder Claims and the Secured Debt Documents
shall, and shall be deemed to, have been irrevocably and finally
extinguished, (B) each Secured Debtholder shall have no further right, title
or interest in or to the Secured Debt or its Secured Debtholder Claims, and
(C) the Secured Debt, the Secured Debtholder Claims and the Secured
Debt Documents shall be cancelled, and all security interests granted by
any of the Concordia Entities in respect of the Secured Debt shall be, and
shall be deemed to be, released, discharged and extinguished pursuant to
this Plan; and
(ii) notwithstanding anything else to the contrary herein, the transactions
contemplated by this Plan shall not affect, terminate or amend in any
manner the rights of the Secured Term Loan Agent or any L/C Issuer in
respect of (1) the Cash Collateral Account and the funds held therein or
(2) any fees or other amounts owing to such parties in respect of the
outstanding Letters of Credit, in each case unless otherwise agreed by
Concordia, the Secured Term Loan Agent and the L/C Issuer for the
outstanding Letters of Credit.
(k) On the Effective Date, the reasonable and documented outstanding fees and
expenses of the Initial Consenting Secured Debtholders Advisors shall be paid in
full in cash by Concordia pursuant to the terms and conditions of applicable fee
arrangements entered into by Concordia with such Initial Consenting Secured
Debtholders Advisors (except as such terms relate to the timing for payment of
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such reasonable and documented outstanding fees and expenses).
3.2 Treatment of Unsecured Debtholders
(a) On the Effective Date, and in accordance with the steps and in the sequence set
forth in Section 5.3, each Unsecured Debtholder shall receive:
(i) its Unsecured Debtholder Pro Rata Share of the Unsecured Debt Exchange
Shares,
(ii) its Unsecured Debtholder Pro Rata Share of the Reallocated Unsecured
Shares, if any, and
(iii) if the Unsecured Debtholder is an Early Consenting Unsecured
Debtholder, its Unsecured Debtholder Early Consent Shares,
which shall, and shall be deemed to, be received in full and final settlement of its
Unsecured Debt and its Unsecured Debtholder Claims.
(b) The compensation, the reasonable and documented fees, expenses and
disbursements (including, without limitation, the reasonable and documented fees,
expenses and disbursements of attorneys, advisors or agents retained or utilized
by the Unsecured Notes Trustees and the Unsecured Equity Bridge Loan Agent
(including any of its predecessors), as applicable, acting reasonably), and the
indemnity claims of Unsecured Notes Trustees and the Unsecured Equity Bridge
Loan Agent (including any of its predecessors), as applicable, in accordance with
the applicable Unsecured Debt Documents shall be paid in full in cash by
Concordia pursuant to the applicable Unsecured Debt Documents.
(c) After giving effect to the terms of this Section 3.2, (i) the Obligations of the
Concordia Entities with respect to the Unsecured Debt, the Unsecured Debtholder
Claims and the Unsecured Debt Documents shall, and shall be deemed to, have
been irrevocably and finally extinguished, (ii) each Unsecured Debtholder shall
have no further right, title or interest in or to the Unsecured Debt or its Unsecured
Debtholder Claims, and (iii) the Unsecured Debt, the Unsecured Debtholder
Claims and the Unsecured Debt Documents shall be cancelled, and all security
interests granted by any of the Concordia Entities in respect of the Subordinated
Promissory Note shall be, and shall be deemed to be, released, discharged and
extinguished pursuant to this Plan.
(d) Concordia shall have the right at any time to exclude the Subordinated Promissory
Note from inclusion in the Unsecured Debt pursuant to this Plan and address the
Subordinated Promissory Note in a manner otherwise acceptable to Concordia
and the Majority Private Placement Parties.
(e) On the Effective Date, the reasonable and documented outstanding fees and
expenses of the Initial Consenting Unsecured Debtholders Advisors shall be paid
in full in cash by Concordia pursuant to the terms and conditions of applicable fee
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arrangements entered into by Concordia with such Initial Consenting Unsecured
Debtholders Advisors (except as such terms relate to the timing for payment of
such reasonable and documented outstanding fees and expenses).
3.3 Treatment of Existing Equity Holders
(a) Each Existing Shareholder shall retain its Existing Shares, subject to the Share
Consolidation in accordance with Section 5.3(d) of this Plan and the treatment of
fractional interests in accordance with Section 5.2 of this Plan.
(b) Pursuant to this Plan and in accordance with the steps and sequences set forth
herein, unless otherwise agreed by Concordia and the Majority Initial Consenting
Debtholders, all of the Affected Equity shall be terminated and cancelled, and
shall be deemed to be terminated and cancelled without the need for any
repayment of capital thereof or any other liability, payment or compensation
therefor and, for greater certainty, no Affected Equity Holder shall be entitled to
receive any interest, dividends, premium or other payment in connection
therewith.
(c) The Affected Equity Claims shall constitute Released Claims and be treated in the
manner set forth in Section 7.1.
ARTICLE 4
ISSUANCES, DISTRIBUTIONS AND PAYMENTS
4.1 Delivery of New Senior Secured Debt
(a) The delivery of the New Senior Secured Notes to be issued pursuant to this Plan
shall be made by way of a global note issued in the name of DTC (or its nominee)
in respect of the New Senior Secured Notes and delivered directly to the New
Senior Secured Notes Trustee as custodian for DTC (or its nominee) which, in
turn, will make delivery of such New Senior Secured Notes to Intermediaries
(pursuant to the customary practices of DTC) who, in turn, will make delivery of
the New Senior Secured Notes to the New Senior Secured Noteholders pursuant
to the standing instructions and customary practices of such Intermediaries. In the
event that a New Senior Secured Notes Elector has not provided Concordia (or its
agent) with its New Senior Secured Notes Elector Settlement Information at least
three (3) Business Days prior to the Effective Date, such New Senior Secured
Notes Elector’s New Senior Secured Notes shall be issued to the Proxy and
Information Agent in the form of a separate global note for the benefit of the
New Senior Secured Notes Elector until such time as the New Senior Secured
Notes Elector provides its New Senior Secured Notes Elector Settlement
Information.
(b) The delivery of the New Senior Secured Term Loans (and any certificates or other
evidence of holdings thereof) to be issued pursuant to this Plan shall be made in
accordance with standing procedures in place with the New Senior Secured Term
Loan Agent, and a register of holders of the New Senior Secured Term Loans will
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be maintained by the New Senior Secured Term Loan Agent. Each Secured
Debtholder receiving New Senior Secured Term Loans shall be deemed to be a
party to the New Senior Secured Term Loan Credit Agreement as a lender
thereunder. In the event that a New Senior Secured Term Loan Lender has not
delivered its New Senior Secured Term Loan Lender Information to the New
Senior Secured Term Loan Agent prior to the date that is five (5) Business Days
prior to the expected Effective Date, such New Senior Secured Term Loan
Lender’s New Senior Secured Term Loans shall be held by the New Senior
Secured Term Loan Agent until such time as the New Senior Secured Term Loan
Lender provides its New Senior Secured Term Loan Lender Information.
4.2 Delivery of New Common Shares
(a) On the Effective Date, all New Common Shares issued in connection with this
Plan shall be deemed to be duly authorized, validly issued, fully paid and non-
assessable.
(b) On the Effective Date, Concordia shall deliver a treasury direction to the Transfer
Agent that directs the Transfer Agent to issue all New Common Shares to be
distributed under this Plan and direct the Transfer Agent to use its commercially
reasonable efforts to cause the New Common Shares to be distributed under this
Plan to be distributed by no later than the second Business Day following the
Effective Date (or such other date as the Applicants, the Majority Initial
Consenting Debtholders and the Majority Private Placement Parties may agree,
each acting reasonably).
(c) The delivery of New Common Shares to be distributed under this Plan will be
made either (i) through the facilities of DTC to Intermediaries who, in turn, will
make delivery of the New Common Shares to the ultimate beneficial recipients
thereof pursuant to standing instructions and customary practices of DTC, or (ii)
by providing Direct Registration System advices or confirmations in the name of
the applicable recipient thereof (or its Intermediary) and registered electronically
in Concordia’s records which will be maintained by the Transfer Agent.
(d) Each Unsecured Equity Bridge Loan Lender and Subordinated Promissory
Noteholder entitled to Unsecured Debt Exchange Shares, Reallocated Unsecured
Shares and/or Unsecured Debtholder Early Consent Shares, as applicable, shall be
issued and delivered such Common Shares (i) if such Unsecured Equity Bridge
Loan Lender or Subordinated Promissory Noteholder delivers its Unsecured
Debtholder Share Registration Form to Concordia in accordance with the
instructions contained therein prior to the Distribution Record Date, in accordance
with the instructions contained in its Unsecured Debtholder Share Registration
Form, and (ii) if such Unsecured Equity Bridge Loan Lender or Subordinated
Promissory Noteholder has not delivered its Unsecured Debtholder Share
Registration Form to Concordia prior to the Distribution Record Date, in
accordance with the name and address of such Unsecured Equity Bridge Loan
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Lender or Subordinated Promissory Noteholder contained on the books and
records of the Unsecured Equity Bridge Loan Agent or Concordia, as applicable.
4.3 Delivery of Payments to Secured Debtholders
(a) The payment by Concordia on the Effective Date of (1) accrued interest owing in
respect of the Secured Debt, (2) the Secured Debt Repayment Amount, and (3)
the Additional Cash Amount in accordance with Sections 5.3(j)(i), 5.3(j)(iv)(A)
and 5.3(j)(iv)(B), respectively, shall be effected through the delivery of the
applicable portion of such amounts by Concordia (or the Escrow Agent on behalf
of Concordia) and, in the case of subsections (i) or (ii) below, the allocation of
such amounts in accordance with this Plan among the applicable Secured Term
Loan Lenders and Secured Noteholders to:
(i) the Secured Term Loan Agent for distribution to each of the applicable
Secured Term Loan Lenders in accordance with the Secured Term Loan
Credit Agreement and customary practices;
(ii) the Secured Notes Trustee for distribution to the Secured Noteholders in
accordance with the Secured Notes Indenture and customary practices;
and
(iii) the Secured Swap Lender,
or in each case in such other manner as may be agreed by Concordia and the
recipient of such payments in writing.
(b) The payment by Concordia on the Effective Date of the Secured Debtholder Early
Consent Cash Consideration to Early Consenting Secured Debtholders shall be
effected through the delivery of the applicable portion of such amount by
Concordia (or the Escrow Agent on behalf of Concordia) together with the
allocation of such amounts in accordance with the Plan among the applicable
Secured Debtholders:
(i) in the case of Secured Debtholder Early Consent Cash Consideration
payable to beneficial Secured Noteholders, through the facilities of DTC
to Intermediaries who, in turn, will make delivery of such Secured
Debtholder Early Consent Cash Consideration to the ultimate beneficial
recipients thereof pursuant to standing instructions and customary
practices of such Intermediaries;
(ii) in the case of Secured Debtholder Early Consent Cash Consideration
payable to registered Secured Noteholders, to the Secured Notes Trustee
for distribution to such registered Secured Noteholders pursuant to
standing instructions and customary practices of the Secured Notes
Trustee;
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(iii) in the case of Secured Debtholder Early Consent Cash Consideration
payable to Secured Term Loan Lenders, to the Secured Term Loan Agent
for distribution to the applicable Secured Term Loan Lenders in
accordance with customary practices; and
(iv) in the case of Secured Debtholder Early Consent Cash Consideration
payable to the Secured Swap Lender, using such wire instructions or
delivery instructions as are provided by the Secured Swap Lender,
or in each case in such other manner as may be agreed by Concordia and the
recipient of such payments in writing.
(c) Concordia shall be entitled, at its election with the consent of the Majority Initial
Consenting Secured Debtholders, acting reasonably, to pay to Secured
Debtholders in respect of their Secured Term Loans denominated in GBP all or a
portion of the Secured Debt Repayment Amount, the Additional Cash Amount
and/or the Secured Debtholder Early Consent Cash Consideration in cash in U.S.
Dollars and/or GBP.
4.4 Delivery of Private Placement Commitment Consideration
The payment by Concordia (or its agent) on the Effective Date of the Private Placement
Commitment Consideration to the Funding Private Placement Parties, unless otherwise agreed
with Concordia and such Funding Private Placement Party in writing, shall be made by
Concordia (or the Escrow Agent on behalf of Concordia) to the applicable Advisors on behalf of
the applicable Funding Private Placement Parties using such wire instructions or delivery
instructions as are provided by the Advisors at least five (5) Business Days prior to the Effective
Date.
4.5 No Liability in respect of Deliveries
(a) None of the Concordia Entities, nor their respective directors or officers, shall
have any liability or obligation in respect of any deliveries, directly or indirectly,
from (i) the Secured Term Loan Agent, (ii) the New Senior Secured Term Loan
Agent, (iii) the New Senior Secured Notes Trustee, (iv) DTC, or (v) the
Intermediaries, in each case to the ultimate beneficial recipients of any
consideration payable or deliverable by the Concordia Entities pursuant to this
Plan.
(b) The Trustees and Agents shall incur no liability as a result of carrying out any
provisions of this Plan and any actions related or incidental thereto, save and
except for any gross negligence or wilful misconduct on its part. On the Effective
Date after the completion of the transactions set forth in Section 5.3, all duties and
responsibilities of the Trustees and Agents arising under or related to the Secured
Debt Documents and Unsecured Debt Documents, as applicable, shall be
discharged except to the extent required in order to effectuate this Plan.
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4.6 Surrender and Cancellation of Notes
(a) The Secured Notes are held by the Secured Notes Trustee as custodian for DTC
(or its nominee) (as registered holder of the Secured Notes on behalf of the
Secured Noteholders, subject to any Secured Notes which may be withdrawn
from DTC and held in registered form by a Secured Noteholder). On the Effective
Date, DTC and each other Person who holds Secured Notes in registered form on
the Effective Date shall surrender, or cause the surrender of, the certificate(s)
representing the Secured Notes to the Secured Notes Trustee for cancellation in
exchange for the consideration payable to Secured Noteholders pursuant to
Section 3.1.
(b) The Unsecured Notes are held by the Unsecured Notes Trustee as custodian for
DTC (or its nominee) (as sole registered holder of the Unsecured Notes on behalf
of the Unsecured Noteholders). On the Effective Date, DTC shall surrender, or
cause the surrender of, the certificate(s) representing the Unsecured Notes to the
Unsecured Notes Trustee for cancellation in exchange for the consideration
payable to Unsecured Noteholders pursuant to Section 3.2.
(c) On the Effective Date, the Subordinated Promissory Noteholder shall surrender,
or cause the surrender of, the Subordinated Promissory Note in exchange for the
consideration payable to the Subordinated Promissory Noteholder pursuant to
Section 3.1.
4.7 Application of Plan Distributions
Unless specified otherwise in this Plan, all amounts paid or payable hereunder on account of the
Debtholder Claims (including, for greater certainty, any securities received hereunder) shall be
applied in a manner acceptable to the Applicants and the Majority Initial Consenting
Debtholders.
4.8 Withholding Rights
The Applicants shall be entitled to deduct and withhold from any consideration or other amount
deliverable or otherwise payable to any Person hereunder such amounts as the Applicants are
required to deduct or withhold with respect to such payment under the Income Tax Act (Canada),
or any provision of any applicable federal, provincial, state, local or foreign tax law or treaty, in
each case, as amended. To the extent that amounts are so deducted or withheld, such deducted or
withheld amounts shall be treated for all purposes hereof as having been paid to the relevant
Person in respect of which such deduction and withholding was made, provided that such
deducted or withheld amounts are actually remitted to the appropriate Governmental Entity.
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ARTICLE 5
IMPLEMENTATION
5.1 Corporate Authorizations
The adoption, execution, delivery, implementation and consummation of all matters
contemplated under this Plan involving corporate action of any of the Concordia Entities will
occur and be effective as of the Effective Date (or such other date as the Applicants and the
Majority Initial Consenting Debtholders may agree, each acting reasonably), and will be
authorized and approved under this Plan and by the Court, where appropriate, as part of the Final
Order, in all respects and for all purposes without any requirement of further action by
shareholders, directors or officers of the Concordia Entities. All necessary approvals to take
actions shall be deemed to have been obtained from the directors or the shareholders of the
Concordia Entities, as applicable.
5.2 Fractional Interests
(a) No fractional Common Shares shall be issued under this Plan, including any
fractional interests created as a result of the Share Consolidation, and fractional
share interests shall not entitle the owner thereof to vote or to any rights of a
holder of Common Shares. Any legal, equitable, contractual and any other rights
or claims (whether actual or contingent, and whether or not previously asserted)
of any Person with respect to fractional Common Shares pursuant to this Plan
shall be rounded down to the nearest whole number of Common Shares without
compensation therefor.
(b) The New Senior Secured Debt issued pursuant to this Plan shall be issued in
minimum increments of $1,000 in the case of New Senior Secured Debt issued in
U.S. Dollars and €1,000 in the case of New Senior Secured Debt issued in Euros,
and the amount of New Senior Secured Debt that each Secured Debtholder shall
be entitled to under this Plan shall in each case be rounded down to the nearest
multiple of $1,000 and €1,000, respectively, without compensation therefor.
(c) All payments made pursuant to this Plan shall be made in minimum increments of
$0.01 or £0.01, as applicable, and the amount of any payments to which a Person
may be entitled to under this Plan shall be rounded down to the nearest multiple
of $0.01 or £0.01, as applicable.
5.3 Effective Date Transactions
Commencing at the Effective Time, the following events or transactions will occur, or be
deemed to have occurred and be taken and effected, in the following order in five minute
increments (unless otherwise indicated) and at the times set out in this Section 5.3 (or in such
other manner or order or at such other time or times as the Applicants and the Majority Initial
Consenting Debtholders may agree, each acting reasonably), without any further act or formality
required on the part of any Person, except as may be expressly provided herein (provided nothing
herein shall restrict or otherwise prohibit the Concordia Entities from completing certain other
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intercompany transactions prior to, concurrently with, or following the transactions contemplated
by this Section 5.3):
(a) Concordia shall pay in full in cash the outstanding reasonable and documented
fees and expenses of the Advisors pursuant to the terms and conditions of
applicable fee arrangements entered into by Concordia with the Advisors (except
as such terms relate to the timing for payment of such reasonable and documented
outstanding fees and expenses).
(b) All Affected Equity shall be terminated and cancelled for no consideration.
(c) The Cinven Agreement shall be terminated and all rights thereunder shall be
cancelled for no consideration, or shall be otherwise treated or addressed in a
manner acceptable to Concordia and the Majority Private Placement Parties.
(d) The Existing Shares shall be, and shall be deemed to be, consolidated (the “Share
Consolidation”) on the basis of one Common Share for every 300 Common
Shares outstanding immediately prior to the Effective Time. Any fractional
interests in the consolidated Common Shares will, without any further act or
formality, be cancelled without payment of any consideration therefor.
Notwithstanding any provision of the CBCA immediately following the
completion of such consolidation, the stated capital of the Common Shares shall
be equal to the stated capital of the Common Shares immediately prior to such
consolidation.
(e) The following shall occur concurrently:
(i) the outstanding principal amount of each Secured Debtholder’s Secured
Debt shall be forgiven, settled and extinguished to the extent such
principal amount exceeds the aggregate of (A) its Secured Debtholder Pro
Rata Share of the Secured Debt Repayment Amount; (B) its Secured
Debtholder Pro Rata Share of the Additional Cash Amount, (C) the
principal amount of the New Senior Secured Notes and/or New Senior
Secured Term Loans to be issued to it in accordance with Section
5.3(j)(iv)(C); and (D) if the Secured Debtholder is an Early Consenting
Secured Debtholder, its Secured Debtholder Early Consent Cash
Consideration (the remaining principal amount of each Secured
Debtholder’s Secured Debt following such forgiveness, settlement and
extinguishment being the “Remaining Secured Debt”). If a Secured Term
Loan Lender holds Secured Term Loans denominated in GBP on the
Effective Date or will receive EUR New Senior Secured Term Loans on
the Effective Date, for the purposes of determining the Remaining Secured
Debt in accordance with this Section 5.3(e)(i) such Secured Term Loans
and/or EUR New Senior Secured Term Loans shall be converted to U.S.
Dollars using the GBP/USD Exchange Rate or to Euros using the
EUR/USD Exchange Rate on the Effective Date, as applicable;
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(ii) any and all accrued and unpaid interest outstanding in respect of the
Secured Debt, if any, other than that interest which is paid pursuant to
Section 5.3(j)(i) below, shall be forgiven, settled and extinguished for no
consideration;
(iii) the outstanding principal amount of each Unsecured Debtholder’s
Unsecured Debt shall be forgiven, settled and extinguished to the extent
such principal amount exceeds the amount by which (A) the aggregate of
the fair market value on the Effective Date of (i) its Unsecured Debtholder
Pro Rata Share of the Unsecured Debt Exchange Shares; (ii) its Unsecured
Debtholder Pro Rata Share of the Reallocated Unsecured Shares; and (iii)
if the Unsecured Debtholder is an Early Consenting Unsecured
Debtholder, its Unsecured Debtholder Early Consent Shares (collectively,
the “Share FMV”), exceeds (B) the amount of accrued and unpaid interest
outstanding in respect of the Unsecured Debt held by such Unsecured
Debtholder at the Effective Time (the remaining principal amount of each
Unsecured Debtholder’s Unsecured Debt following such forgiveness,
settlement and extinguishment, together with all accrued and unpaid
interest outstanding thereon after Section 5.3(e)(iv), being the
“Remaining Unsecured Debt”); and
(iv) the accrued and unpaid interest owing to each Unsecured Debtholder shall
be forgiven, settled and extinguished to the extent that such interest
exceeds the Share FMV in respect of that Unsecured Debtholder.
(f) The following shall occur concurrently:
(i) Concordia shall become entitled to the Funded Amounts deposited in
escrow with the Escrow Agent pursuant to the Escrow Agreement, subject
to Section 6.1, and the Escrow Agent shall be deemed instructed to release
to Concordia the Funded Amounts held by the Escrow Agent; and
(ii) Concordia shall issue to each Funding Private Placement Party its Funding
Private Placement Party Shares in consideration for its Private Placement
Commitment.
(g) Concurrently with the step set forth in Section 5.3(f) above, in exchange for, and
in full and final settlement of, the Remaining Unsecured Debt, Concordia shall
deliver to each Unsecured Debtholder:
(i) its Unsecured Debtholder Pro Rata Share of the Unsecured Debt Exchange
Shares;
(ii) its Unsecured Debtholder Pro Rata Share of the Reallocated Unsecured
Shares; and
(iii) if such Unsecured Debtholder is an Early Consenting Unsecured
Debtholder, its Unsecured Debtholder Early Consent Shares,
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(h) Concurrently with the delivery of the Unsecured Debt Exchange Shares, the
Reallocated Unsecured Shares and the Unsecured Debtholder Early Consent
Shares as contemplated by Section 5.3(g) and Article 4:
(i) the Unsecured Debtholder Claims shall, and shall be deemed to be,
irrevocably and finally extinguished and such Unsecured Debtholder shall
have no further right, title or interest in and to the Unsecured Debt or its
Unsecured Debtholder Claim;
(ii) the Unsecured Debt and the Unsecured Debt Documents shall be
cancelled, provided that the Unsecured Debt Documents shall remain in
effect solely to allow the applicable Trustees and Agents to make the
distributions set forth in this Plan; and
(iii) all security interests granted by any of the Concordia Entities in respect of
the Subordinated Promissory Note shall be, and shall be deemed to be,
released, discharged and extinguished pursuant to this Plan.
(i) Concurrently with the step set forth in Section 5.3(f) above, Concordia shall pay
to each Funding Private Placement Party its Private Placement Pro Rata Share of
the Private Placement Commitment Consideration.
(j) Concurrently with the step set forth in Section 5.3(f) above:
(i) all accrued and unpaid interest outstanding in respect of the Secured Debt
(calculated at the contractual non-default rate applicable under the relevant
Secured Debt Document, not including any compound interest and based
on the outstanding principal amount of the applicable Secured Debt (not
reduced by any unamortized original issue discount), unless there has been
a payment default with respect to any scheduled payments of interest (at
contractual non-default rates, not including any compound interest) or
amortization, as applicable, under the Secured Debt, on or prior to the
Effective Date, in which case interest shall accrue at the default-rate for
the period from such default until the Effective Date, for certainty, without
giving effect to any acceleration under the Secured Debt that may have
arisen from the commencement of the CBCA Proceedings) shall be paid
by Concordia to the Secured Debtholders in cash;
(ii) Concordia, the New Senior Secured Debt Guarantors and the New Senior
Secured Notes Trustee shall enter into the New Senior Secured Notes
Indenture together with all related documentation as agreed by the
Applicants, the Majority Initial Consenting Secured Debtholders and the
Majority Private Placement Parties, each acting reasonably;
(iii) Concordia, the New Senior Secured Debt Guarantors and the New Senior
Secured Term Loan Agent shall enter into, and the New Senior Secured
Term Loan Lenders shall enter into or be deemed to enter into, the New
Senior Secured Term Loan Agreement together with all related
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documentation as agreed by the Applicants, the Majority Initial
Consenting Secured Debtholders and the Majority Private Placement
Parties, each acting reasonably;
(iv) in exchange for, and in full and final settlement of, the Remaining Secured
Debt, Concordia shall pay to each Secured Debtholder:
(A) its Secured Debtholder Pro Rata Share of the Secured Debt
Repayment Amount;
(B) its Secured Debtholder Pro Rata Share of the Additional Cash
Amount, if any;
(C) its New Senior Secured Debt in the form of New Senior Secured
Term Loans and/or New Senior Secured Notes, as applicable in
accordance with Section 3.1 (as may be adjusted and/or allocated
pursuant to Section 3.1), in an aggregate principal amount equal to
its Secured Debtholder Pro Rata Share of the New Senior Secured
Debt Aggregate Principal Amount, as adjusted based on the
EUR/USD Exchange Rate on the FX Date to the extent that it
receives a portion of its New Senior Secured Term Loans in the
form of EUR New Senior Secured Term Loans in accordance with
Section 3.1, which New Senior Secured Debt shall be distributed in
the manner described in Section 4.1; and
(D) if such Secured Debtholder is an Early Consenting Secured
Debtholder, its Secured Debtholder Early Consent Cash
Consideration.
(k) Except as set forth in Section 3.1(j)(ii), concurrently with the delivery of the
Secured Debt Repayment Amount, the Additional Cash Amount, the New Senior
Secured Debt and the Secured Debtholder Early Consent Cash Consideration as
contemplated by Section 5.3(j)(iv) and Article 4:
(1) the Secured Debtholder Claims shall, and shall be deemed
to be, irrevocably and finally extinguished and such
Secured Debtholder shall have no further right, title or
interest in and to the Secured Debt or its Secured
Debtholder Claim;
(2) the Secured Debt and the Secured Debt Documents shall be
cancelled, provided that the Secured Debt Documents shall
remain in effect solely to allow the applicable Trustees and
Agents to make the distributions set forth in this Plan; and
(3) all security interests granted by any of the Concordia
Entities in respect of the Secured Debt shall be, and shall be
deemed to be, released, discharged and extinguished
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pursuant to this Plan, and the Collateral Agents shall be
directed to file any and all documents necessary to
effectuate the release of all liens or security interests
created pursuant to the Secured Debt Documents in any and
all applicable jurisdictions.
(l) CHCL shall transfer all of its assets to Concordia in consideration for a non-
interest bearing promissory note issued by Concordia in a principal amount equal
to the value of the transferred assets.
(m) The Management Incentive Plan shall be deemed to be approved by the Existing
Shareholders and those persons receiving New Common Shares pursuant to this
Plan.
(n) The releases referred to in Section 7.1 shall become effective.
ARTICLE 6
RELEASE OF FUNDS FROM ESCROW
6.1 Release of Funds from Escrow
The Escrow Agent shall release the Funded Amounts, or portions thereof, as follows and in
accordance with the terms of the Escrow Agreements:
(a) On the Effective Date, the Escrow Agent shall release from escrow to or on behalf
of Concordia, at the applicable time, the Funded Amounts pursuant to and in
accordance with Section 5.3.
(b) If any Funding Private Placement Party (or its Intermediary, as applicable)
provides to the Escrow Agent more than its Private Placement Commitment under
the Subscription Agreement, the Escrow Agent shall as soon as practicable return
any excess funds to such Funding Private Placement Party (or its Intermediary, as
applicable).
ARTICLE 7
RELEASES
7.1 Release of Released Parties
At the applicable time pursuant to Section 5.3, each of the Released Parties shall be released and
discharged from all present and future actions, causes of action, damages, judgments, executions,
obligations, liabilities and Claims of any kind or nature whatsoever (other than liabilities or
claims attributable to any Released Party’s gross negligence, fraud or wilful misconduct as
determined by the final, non-appealable judgment of a court of competent jurisdiction) arising on
or prior to the Effective Date in connection with the Debt, the Debt Documents, the Affected
Equity Claims, the Two Year Equity Bridge Credit and Guaranty Agreement, the Equity
Unsecured Bridge Loan Settlement, the Support Agreement, the Subscription Agreement, the
Private Placement, this Plan, the CBCA Proceedings, the transactions contemplated hereunder
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and any proceedings commenced with respect to or in connection with this Plan, and any other
actions or matters related directly or indirectly to the foregoing, provided that nothing in this
paragraph shall release or discharge (i) any of the Released Parties from or in respect of its
obligations under this Plan, the Support Agreement, the Subscription Agreement, the
Governance Agreement or the other Definitive Documents or (ii) any Existing Equity Class
Action Claims which shall be treated as set out in Section 7.4 below.
7.2 Additional Released Parties
At any time and from time to time on or before the date of the Final Order, Schedule “A” to this
Plan may be amended, restated, modified or supplemented by Concordia, with the prior written
consent of the Majority Private Placement Parties, in order to add any Person as an Additional
Released Party provided that such Person, through its conduct or otherwise, has provided the
Concordia Entities (or any of them) with consideration or value acceptable to Concordia and the
Majority Private Placement Parties, each acting reasonably. Any such amendment, restatement,
modification and/or supplement of Schedule “A” shall be deemed to be effective automatically
upon receipt of the prior written consent of the Majority Private Placement Parties Upon an
amendment, restatement, modification or supplement to Schedule “A”, Concordia shall (i)
provide notice to the service list in the CBCA Proceedings of such amendment, restatement,
modification and/or supplement of Schedule “A”, and (ii) file a copy thereof with the Court.
7.3 Injunctions
All Persons are permanently and forever barred, estopped, stayed and enjoined, on and after the
Effective Date, with respect to any and all Released Claims, from (i) commencing, conducting or
continuing in any manner, directly or indirectly, any action, suits, demands or other proceedings
of any nature or kind whatsoever against the Released Parties, as applicable; (ii) enforcing,
levying, attaching, collecting or otherwise recovering or enforcing by any manner or means,
directly or indirectly, any judgment, award, decree or order against the Released Parties; (iii)
creating, perfecting, asserting or otherwise enforcing, directly or indirectly, any lien or
encumbrance of any kind against the Released Parties or their property; or (iv) taking any actions
to interfere with the implementation or consummation of this Plan; provided, however, that the
foregoing shall not apply to the enforcement of any obligations under this Plan.
7.4 Existing Equity Class Action Claims
From and after the Effective Date, any Person having an Existing Equity Class Action Claim
against Concordia or any of its current or former officers and/or directors shall only be permitted
to continue its Existing Equity Class Action Claim to the point of determination of liability, if
any, and seeking the enforcement of any judgement solely as against the Insurance Policies, to
the extent available in respect of any such Existing Equity Class Action Claim. Any such Person
shall be irrevocably and forever limited solely to recovery from the proceeds of the Insurance
Policies payable on behalf of Concordia or its directors and officers in respect of any such
Existing Equity Class Action Claim, and such Person shall have no right to, and shall not,
directly or indirectly, make any claim or seek any recoveries from any of the Concordia Entities
or any of their respective current or former officers and directors in respect of an Existing Equity
Class Action Claim, other than enforcing such Person’s rights to be paid by the applicable
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insurer(s) from the proceeds of the applicable Insurance Policies. Nothing in this paragraph
prejudices, compromises, releases or otherwise affects any right or defence of any insurer in
respect of an Insurance Policy.
ARTICLE 8
CONDITIONS PRECEDENT AND IMPLEMENTATION
8.1 Conditions to Plan Implementation
The implementation of this Plan shall be conditional upon the fulfillment, satisfaction or waiver
(to the extent permitted by Section 8.2) of the following conditions:
(a) The Court shall have granted the Final Order and the Final Order shall have
become a final order, the implementation, operation or effect of which shall not
have been stayed, varied in a manner not acceptable to the Applicants or the
Majority Initial Consenting Debtholders, vacated or subject to pending appeal and
as to which order any appeal periods relating thereto shall have expired;
(b) No Law shall have been passed and become effective, the effect of which makes
the consummation of this Plan illegal or otherwise prohibited;
(c) All conditions to implementation of this Plan set out in the Support Agreement
shall have been satisfied or waived in accordance with their terms;
(d) All conditions to implementation of this Plan set out in the Subscription
Agreement shall have been satisfied or waived in accordance with their terms; and
(e) Concordia shall be a public company following the implementation of the Plan
and the Common Shares shall be approved for trading on the TSX or on another
Designated Offshore Securities Market acceptable to the Majority Consenting
Private Placement Parties, subject only to receipt of customary final
documentation.
8.2 Waiver of Conditions
The Applicants and the Majority Initial Consenting Debtholders may at any time and from time
to time waive the fulfillment or satisfaction, in whole or in part, of the conditions set out herein,
to the extent and on such terms as such parties may agree, each acting reasonably, provided
however that the condition set out in Sections 8.1(a), 8.1(b), 8.1(c) and 8.1(d) cannot be waived.
8.3 Effectiveness
This Plan will become effective in the sequence described in Section 5.3 on the filing of the
Articles of Arrangement and the issuance of the Certificate of Arrangement, and shall be binding
on and enure to the benefit of the Concordia Entities, the Debtholders, the Trustees and Agents,
all Existing Equity Holders, all Persons with any Existing Equity Class Action Claim, the
Released Parties, the directors and officers of the Concordia Entities and all other Persons named
or referred to in, or subject to, this Plan and their respective successors and assigns and their
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respective heirs, executors, administrators and other legal representatives, successors and
assigns. The Articles of Arrangement shall be filed and the Certificate of Arrangement shall be
issued in each case with respect to the Arrangement in its entirety. The Certificate of
Arrangement shall be conclusive evidence that the Arrangement has become effective and that
each of the provisions in Section 5.3 has become effective in the sequence set forth therein. No
portion of this Plan shall take effect with respect to any party or Person until the Effective Time.
ARTICLE 9
GENERAL
9.1 Deemed Consents, Waivers and Agreements
At the Effective Time:
(a) each Debtholder and Existing Equity Holder shall be deemed to have consented
and agreed to all of the provisions of this Plan in its entirety (both as a Debtholder
and as a holder of Existing Equity, if applicable);
(b) each Concordia Entity, Debtholder and Existing Equity Holder shall be deemed to
have executed and delivered to the other parties all consents, releases,
assignments and waivers, statutory or otherwise, required to implement and carry
out this Plan in its entirety; and
(c) all consents, releases, assignments and waivers, statutory or otherwise, required to
implement and carry out this Plan in its entirety shall be deemed to have been
executed and delivered to the Concordia Entities.
9.2 Waiver of Defaults
From and after the Effective Time, all Persons shall be deemed to have consented and agreed to
all of the provisions of this Plan in its entirety. Without limiting the foregoing, all Persons shall
be deemed to have:
(a) waived any and all defaults or events of default, third-party change of control
rights or any non-compliance with any covenant, warranty, representation, term,
provision, condition or obligation, expressed or implied, in any contract,
instrument, credit document, lease, licence, guarantee, agreement for sale or other
agreement, written or oral, in each case relating to, arising out of, or in connection
with, the Debt or the Debt Documents, the Support Agreement, the Subscription
Agreement, the Arrangement, the Arrangement Agreement, this Plan, the
transactions contemplated hereunder and any proceedings commenced with
respect to or in connection with this Plan and any and all amendments or
supplements thereto. Any and all notices of default and demands for payment or
any step or proceeding taken or commenced in connection with any of the
foregoing shall be deemed to have been rescinded and of no further force or
effect, provided that nothing shall be deemed to excuse the Concordia Entities and
their respective successors from performing their obligations under this Plan; and
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(b) agreed that, if there is any conflict between the provisions of any agreement or
other arrangement, written or oral, existing between such Person and the
Concordia Entities and the provisions of this Plan, then the provisions of this Plan
take precedence and priority and the provisions of such agreement or other
arrangement are deemed to be amended accordingly,
provided, however, that notwithstanding any other provision of this Plan, nothing herein shall
affect the obligations of any of the Concordia Entities to any employee thereof, including any
contract of employment between any Person and any of the Concordia Entities.
9.3 Compliance with Deadlines and Elections
The Applicants have the right to waive strict compliance with the New Senior Secured Notes
Election Deadline and the Early Consent Date, and shall be entitled to waive any deficiencies
with respect to any elections, forms or other documentation submitted pursuant to this Plan.
9.4 Paramountcy
From and after the Effective Date, any conflict between this Plan and the covenants, warranties,
representations, terms, conditions, provisions or obligations, expressed or implied, of any
contract, mortgage, security agreement, indenture, trust indenture, loan agreement, commitment
letter, by-laws or other agreement, written or oral, and any and all amendments or supplements
thereto existing between one or more of the Debtholders and any of the Concordia Entities as at
the Effective Date shall be deemed to be governed by the terms, conditions and provisions of this
Plan and the Final Order, which shall take precedence and priority.
9.5 Deeming Provisions
In this Plan, the deeming provisions are not rebuttable and are conclusive and irrevocable.
9.6 Modification of Plan
Subject to the terms and conditions of the Support Agreement and the Subscription Agreement:
(a) the Applicants reserve the right to amend, restate, modify and/or supplement this
Plan at any time and from time to time, provided that (except as provided in
subsection (c) below) any such amendment, restatement, modification or
supplement must be contained in a written document that is (i) filed with the
Court and, if made following the Meetings, approved by the Court, and (ii)
communicated to the Debtholders and Existing Shareholders in the manner
required by the Court (if so required);
(b) any amendment, modification or supplement to this Plan may be proposed by the
Applicants at any time prior to or at the Meetings, with or without any prior notice
or communication (other than as may be required under the Interim Order), and if
so proposed and accepted at the Meetings, shall become part of this Plan for all
purposes; and
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(c) any amendment, modification or supplement to this Plan may be made following
the Meetings by the Applicants, without requiring filing with, or approval of, the
Court, provided that it concerns a matter which is of an administrative nature and
is required to better give effect to the implementation of this Plan and is not
materially adverse to the financial or economic interests of any of the Debtholders
or Existing Shareholders.
For the avoidance of doubt, any modification to the Plan pursuant to this Section 9.6 must be in a
form and substance acceptable to the Majority Initial Consenting Debtholders.
9.7 Notices
Any notice or other communication to be delivered hereunder must be in writing and refer to this
Plan and may, as hereinafter provided, be made or given by personal delivery, ordinary mail or
email addressed to the respective parties as follows:
(a) If to the Applicants, or any other of the Concordia Entities, at:
Concordia International Corp.
c/o Goodmans LLP
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx X. Xxxxxxxx, Xxxxxxx X’Xxxxx and Xxxxxxxx Xxxxxxxx
Email: xxxxxxxxx@xxxxxxxx.xx
xxxxxxx@xxxxxxxx.xx
xxxxxxxxx@xxxxxxxx.xx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Four Times Square
New York, 10036-6522
Attention: Xxxx X. Xxxxx, Xxxxx X. Xxxxxx and Xxxx X. Xxxxxxx
Email: xxxx.xxxxx@xxxxxxx.xxx
xxxxx.xxxxxx@xxxxxxx.xxx
xxxx.xxxxxxx@skadden.
(b) If to any of the Initial Consenting Secured Debtholders:
Osler, Xxxxxx & Harcourt LLP
000 Xxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx Xxxxxxxxx & Xxxxxxx Xxxxxxxxx
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Email: xxxxxxxxxx@xxxxx.xxx
xxxxxxxxxx@xxxxx.xxx
with a copy to:
White & Case LLP
0 Xxx Xxxxx Xxxxxx
Xxxxxx, XX
XX0X 0XX
Attention: Xxxxxxxxx Xxxxxxxxxx and Xxx Xxxxxx
Email: xxxxxxxxxxx@xxxxxxxxx.xxx
xxxxxxx@xxxxxxxxx.xxx
and
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX
00000
Attention: Xxxxxx X Xxxxxx and Xxxxxxxx Xxxxxx
Email: xxxxxxx@xxxxxxxxx.xxx
xxxxxxx@xxxxxxxxx.xxx
(c) If to any of the Initial Consenting Unsecured Debtholders:
Xxxxxxx Xxxxx LLP
3400 One First Canadian Place, P.O. Box 130
Toronto, Ontario
M5X 1A4
Attention: Xxxxx Xxxx and Xxxx Xxxxx
Email: xxxxx@xxxxxxxxxxxx.xxx
xxxxxx@xxxxxxxxxxxx.xxx
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX
00000-0000
Attention: Xxxxxx X. Xxxxxxxxx and Xxxxx X. Xxxxxxxxxx
Email: xxxxxxxxxx@xxxxxxxxx.xxx
xxxxxxxxxxx@xxxxxxxxx.xxx
and with a copy to:
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Ashurst LLP
0 Xxxxxx Xxxxxx
Xxxxxx, XX
XX0X 0XX
Attention: Xxxxx Xxxxxxxx and Xxxxx Xxxxx
Email: xxxxx.xxxxxxxx@xxxxxxx.xxx
xxxxx.xxxxx@xxxxxxx.xxx
(d) If to any of the Consenting Debtholders who are neither Initial Consenting
Secured Debtholders nor Initial Consenting Unsecured Debtholders at the address
set forth for each applicable Consenting Debtholder on its signature page to the
Support Agreement,
or to such other address as any party above may from time to time notify the others in
accordance with this Section 9.7. In the event of any strike, lock-out or other event which
interrupts postal service in any part of Canada, all notices and communications during such
interruption may only be given or made by personal delivery or by email and any notice or other
communication given or made by prepaid mail within the five (5) Business Day period
immediately preceding the commencement of such interruption, unless actually received, shall
be deemed not to have been given or made. Any such notices and communications so given or
made shall be deemed to have been given or made and to have been received on the day of
delivery if delivered, or on the day of emailing, provided that such day in either event is a
Business Day and the communication is so delivered or emailed before 5:00 p.m. on such day.
Otherwise, such communication shall be deemed to have been given and made and to have been
received on the next following Business Day. The unintentional failure by the Applicants to give
a notice contemplated hereunder to any particular Debtholder or Existing Shareholder shall not
invalidate this Plan or any action taken by any Person pursuant to this Plan.
9.8 Different Capacities
Subject to the Support Agreement and the Interim Order, if any Person holds more than one type,
series or class of Existing Equity or Debt, as the case may be, such Person shall have all of the
rights given to a holder of each particular type, series or class of Existing Equity or Debt so held.
Subject to the Support Agreement and the Interim Order, nothing done by a Person acting in its
capacity as a holder of a particular type, series or class of Existing Equity or Debt, as the case
may be, affects such Person’s rights as a holder of another type, series or class Existing Equity or
Debt.
9.9 Consent of Majority Initial Consenting Debtholders and Majority Private
Placement Parties
For the purposes of this Plan:
(a) any matter requiring the agreement, waiver, consent or approval of the Majority
Initial Consenting Debtholders shall be deemed to have been agreed to, waived,
consented to or approved by such Majority Initial Consenting Debtholders if such
matter is agreed to, waived, consented to or approved in writing by (i) Osler,
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Xxxxxx & Harcourt LLP on behalf of the Majority Initial Consenting Secured
Debtholders, and (ii) Xxxxxxx Xxxxx LLP on behalf of the Initial Consenting
Unsecured Debtholders, provided that each of Osler, Xxxxxx & Harcourt LLP and
Xxxxxxx Xxxxx LLP confirms in writing (which can be by way of e-mail) that it is
providing such agreement, consent, waiver or approval on behalf of the Majority
Initial Consenting Secured Debtholders or Majority Initial Consenting Unsecured
Debtholders, as applicable; and
(b) any matter requiring the agreement, waiver, consent or approval of the Majority
Private Placement Parties shall be deemed to have been agreed to, waived,
consented to or approved by the Majority Private Placement Parties if such matter
is agreed to, waived, consented to or approved in writing by each of Osler, Xxxxxx
& Harcourt LLP and Xxxxxxx Xxxxx LLP, provided that Osler, Xxxxxx & Harcourt
LLP and Xxxxxxx Xxxxx LLP confirm in writing (which can be by way of e-mail)
that they are providing such agreement, consent, waiver or approval on behalf of
the Majority Private Placement Parties.
9.10 Further Assurances
(a) Notwithstanding that the transactions and events set out herein will occur and be
deemed to occur in the order set out in this Plan without any further act or
formality, each of the Persons named or referred to in, affected by or subject to,
this Plan will make, do and execute, or cause to be made, done and executed, all
such further acts, deeds, agreements, transfers, assurances, instruments or
documents as may reasonably be required by any of them to carry out the full
intent and meaning of this Plan and to give effect to the transactions contemplated
herein.
(b) Without limiting any other provision in this Plan, the Concordia Entities, the
Secured Term Loan Agent, the Secured Notes Trustee, the Collateral Agents, the
Subordinated Promissory Noteholder, the Secured Swap Lender and any of their
respective agents, designees or assigns shall be authorized and directed to take
such steps and prepare, execute and submit such forms and documents, and
complete such filings as are necessary to effectuate and/or evidence the full and
final discharge and release of any and all security registrations and/or statements
made pursuant to or in connection with the Secured Debt Documents and the
Subordinated Promissory Note and the full and final discharge and release of any
and all security interests and liens upon any and all of the property and assets of
the Concordia Entities created under the Secured Debt Documents and the
Subordinated Promissory Note, in any jurisdiction in which the Concordia
Entities have property or assets or conduct business, and each Secured Debtholder
and the Subordinated Promissory Noteholder shall be deemed to have consented
and agreed to all such steps and actions.
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SCHEDULE A
ADDITIONAL RELEASED PARTIES
SCHEDULE E
JOINDER AGREEMENT
This Joinder Agreement is made as of the date below (the “Joinder Agreement”) by the
undersigned (the “Consenting Debtholder”) in connection with the support agreement dated
May 1, 2018 (the “Support Agreement”) among (i) Concordia International Corp., (ii) the
Subsidiary Guarantors (as defined in the Support Agreement) and (iii) each of the Consenting
Debtholders (as defined in the Support Agreement) party thereto. Capitalized terms used herein
have the meanings assigned in the Support Agreement unless otherwise defined herein.
RECITALS:
A. The Support Agreement allows holders of Relevant Debt and/or Relevant Shares to
become a party thereto by executing a Joinder Agreement.
B. Section 4(b) of the Support Agreement requires that, contemporaneously with a Transfer
of any Relevant Debt and/or Relevant Shares by a Consenting Debtholder to a transferee
who is not also already a Consenting Debtholder, such transferee shall execute and
deliver this Joinder Agreement.
C. The Consenting Debtholder wishes to be bound by the terms of the Support Agreement
on the terms and subject to the conditions set forth in this Joinder Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Consenting
Debtholder agrees as follows:
1. The Consenting Debtholder hereby agrees to be fully bound as a Consenting Debtholder
under the Support Agreement in respect of the Relevant Debt and/or Relevant Shares that
are identified on the signature page hereto, and hereby represents and warrants that the
Relevant Debt and/or Relevant Shares set out on the signature page constitute all of
Relevant Debt and/or Relevant Shares, as applicable, that are legally or beneficially
owned by such Consenting Debtholder or which such Consenting Debtholder has the sole
power to vote or dispose of.
2. The Consenting Debtholder hereby represents and warrants to each of the other Parties
that the representations and warranties set forth in Section 2 of the Support Agreement
are true and correct with respect to such Consenting Debtholder as if given on the date
hereof.
3. Except as expressly modified hereby, the Support Agreement shall remain in full force
and effect, in accordance with its terms.
4. This Joinder Agreement shall be governed by and construed in accordance with the laws
of the Province of Ontario and the federal laws of the Canada applicable therein, without
regard to principles of conflicts of law.
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5. This Joinder Agreement may be executed by facsimile or other electronic means and in
one or more counterparts, all of which shall be considered one and the same agreement.
[Remainder of this page intentionally left blank; next page is signature page]
Signature Page to Joinder Agreement
STRICTLY CONFIDENTIAL
IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly
executed and delivered by its proper and duly authorized officer as of ______, 2018.
Name of Consenting Debtholder:
By:
Name:
Title:
Jurisdiction of residence for legal purposes:
Email:
Address:
Debt Document Principal Amount Custodian or DTC
Participant, if applicable
Term Loan Facilities issued
October 21, 2015
Extended Bridge Loans
issued October 21, 2015
7.00% Senior Unsecured
Notes due 2023
9.50% Senior Unsecured
Notes due 2022
9.00% First Lien Senior
Secured Notes due 2022
Swap Agreement
Common Shares Number of Shares Custodian or DTC
Participant, if applicable
SCHEDULE F
CCAA PROCEEDINGS TERMS AND TIMELINE
1. To the extent the Majority Initial Consenting Debtholders and the Majority Consenting
Private Placement Parties, in their absolute and sole discretion, have consented to the
implementation of the Recapitalization Transaction through the CCAA Proceedings, then
the actions necessary to structure and implement the Recapitalization Transaction
pursuant to the CCAA Plan will be completed on or by such dates agreed to by Concordia
and the Majority Initial Consenting Debtholders:
(a) Concordia shall commence the CCAA Proceedings and obtain an initial order in form
acceptable to Concordia and the Majority Initial Consenting Debtholders, each acting
reasonably;
(b) the Ontario Court shall approve the CCAA Plan pursuant to a sanction order in form
acceptable to the Majority Initial Consenting Debtholders and the Majority Consenting
Private Placement Parties, in their sole and absolute discretion; and
(c) the Effective Date shall have occurred on or prior to a date agreed to by the Majority
Initial Consenting Debtholders and the Majority Consenting Private Placement Parties, in
their sole and absolute discretion.
2. The Recapitalization Transaction to be implemented pursuant to the CCAA Plan may be
modified as agreed by the Company and the Majority Initial Consenting Debtholders.
SCHEDULE G
CHAPTER 11 TERMS AND TIMELINE
1. In the event the Company commences the Chapter 11 Process in accordance with Section
7(a) above, the actions necessary to structure and implement the Recapitalization
Transaction pursuant to a Chapter 11 Plan shall be completed within the following
timeline (subject to such other dates as may be agreed by Concordia and the Majority
Initial Consenting Debtholders, each acting reasonably):
(a) Concordia shall commence the Chapter 11 Process with the Bankruptcy Court by
August 31, 2018 (the “Petition Date”);
(b) Concordia shall file the disclosure statement for the Chapter 11 Plan (the
“Disclosure Statement”) and the Chapter 11 Plan, in forms acceptable to
Concordia and the Majority Initial Consenting Debtholders, each acting
reasonably, on the Petition Date;
(c) to the extent requested by the Majority Initial Consenting Debtholders, Concordia
shall obtain entry of an order by the Bankruptcy Court authorizing it to assume
this Support Agreement and approving the contents contained herein;
(d) Concordia shall obtain an entry of an interim order by the Bankruptcy Court
authorizing it to use cash collateral within five (5) days of the Petition Date,
which shall contain customary stipulations between Concordia and the Secured
Debtholders with respect to the Secured Debt and the following adequate
protection provisions:
(i) the current payment during the Chapter 11 Process of the reasonable fees
and expenses of the Initial Consenting Secured Debtholders Advisors
pursuant to the terms and conditions of applicable fee arrangements
entered into by Concordia with such advisors;
(ii) the current payment of all reasonable and documented fees, expenses,
indemnities and other amounts owing to the Secured Term Loan Agent
including, without limitation, the current payment of all reasonable and
documented professional fees and expenses owing to the Secured Term
Loan Agent pursuant to Section 10.5 of the Secured Term Loan
Agreement;
(iii) the reasonable and documented fees, expenses and disbursements of the
Secured Swap Lender (including, without limitation, the reasonable and
documented fees, expenses and disbursements of attorneys, advisors or
agents retained or utilized by the Secured Swap Lender, acting
reasonably);
(iv) customary superpriority claims and liens in favor of the secured parties
under the Secured Debt Documents;
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(v) continued satisfaction on a timely basis of all reporting obligations under
the Secured Term Loan Agreement, unless otherwise agreed to by the
Secured Term Loan Agent and the Company;
(vi) unless otherwise agreed to by the Majority Initial Consenting Unsecured
Debtholders, the current payment during the Chapter 11 Process of the
reasonable fees and expenses of the Initial Consenting Unsecured
Debtholders Advisors in their capacity as advisors to certain Consenting
Debtholders holding Secured Debt; and
(vii) cash payments to the holders of Secured Debt (which payments Concordia
shall pay on a monthly basis) in an amount equal to the sum of (a) current
non-default interest or default interest accruing under the Secured Swap
Settlement Agreement or the applicable governing documents, as
applicable, determined in accordance with the section titled
“Determination of Claim Amounts”; provided, however, that any payment
of interest on a current basis during the Chapter 11 Process shall be
subject to recharacterization as payments of principal to the extent of entry
of a court order finding the holders of Secured Debt to be undersecured,
plus (b) any fees and expenses accruing in respect of any Letters of Credit
(as defined in the Secured Term Loan Agreement).
(e) Concordia shall obtain an entry of a final order by the Bankruptcy Court
authorizing it to use cash collateral within forty five (45) days of the Petition
Date, which shall contain the adequate protection provisions substantially similar
to those in the interim order; provided that with respect to clauses (d) and (e)
hereof, to the extent any deadline set forth in this Schedule G is extended, (i) the
Company may seek to enter into debtor-in-possession financing that is on terms
reasonably acceptable to the Company and the Majority Initial Consenting
Debtholders, each acting reasonably and (ii) the Majority Initial Consenting
Debtholders may, acting reasonably, request modifications to the adequate
protection set forth in either the interim or final order authorizing the use of cash
collateral; provided further, that in the event the Recapitalization Transaction
does not occur, the Secured Debtholders and Unsecured Debtholders reserve all
rights with respect to (i) the Company’s ability to enter into debtor-in-possession
financing and (ii) any adequate protection in connection with the use of cash
collateral and/or debtor-in-possession financing;
(f) Concordia shall obtain entry of an order by the Bankruptcy Court approving the
Disclosure Statement and confirming the Chapter 11 Plan on or prior to the date
that is 60 days after the Petition Date; and
(g) the Effective Date shall have occurred on or prior to the date that is 90 days after
the Petition Date.
2. The modifications to the Recapitalization Transaction to be implemented pursuant to the
Chapter 11 Plan in the Chapter 11 Process shall include, without limitation (subject to
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further revision as agreed between the Company and the Majority Initial Consenting
Debtholders, each acting reasonably):
(a) in full and final settlement of the Secured Debtholder Claims, the complete
satisfaction, release and discharge of all guarantees and security pertaining to the
Secured Debt, and the cancellation of the Secured Debt Documents, each Secured
Debtholder will become entitled to and shall receive on the Effective Date: (i)
payment in full, in cash, of post-petition interest at the non-default rate or default
rate, as applicable under the section titled “Determination of Claim Amounts”, in
respect of the Secured Debt held by such Secured Debtholder, (ii) its Pro-Rata
Share of the Cash Pay-down; (iii) its Pro-Rata Share of the New Senior Secured
Debt, in the form of the New Senior Secured Term Loan and/or the New Senior
Secured Notes, subject to the allocations set out in the Term Sheet, and (iv) cash
consideration equal to 5% of the principal amount (which shall be calculated by
reducing such principal amount by any unamortized original issue discount and
excluding any make-whole premiums, redemption premiums or other similar
premiums) of Secured Debt held by such Secured Debtholder. For certainty, the
aggregate amount of consideration payable to Secured Debtholders under the Plan
shall equal 93.3835% of the principal amount of such Secured Debtholders’
Secured Debtholders Claims (for certainty reduced by any unamortized original
issue discount and excluding any make-whole premiums, redemption premiums
or other similar premiums and not taking into account consideration pursuant to
Section 2(b) of this Schedule G below);
(b) in full and final settlement of the Unsecured Debtholder Claims, the complete
satisfaction, release and discharge of all guarantees pertaining to the Unsecured
Debt, and the cancellation of the Unsecured Debt Documents, each Unsecured
Debtholder will become entitled to and shall receive on the Effective Date its Pro
Rata Share of common shares of Concordia representing 12% of the outstanding
common shares of Concordia immediately following the implementation of the
Recapitalization Transaction (subject to MIP Dilution and any Existing Shares
Dilution or dilution resulting from the issuance of common shares to Secured
Debtholders in accordance in accordance with Section 2(b) of this Schedule G, as
applicable);
(c) Concordia and the Majority Consenting Private Placement Parties may elect to
exclude the Subordinated Promissory Note from the Unsecured Debt Documents
and address the Subordinated Promissory Note in a manner acceptable to
Concordia and the Majority Consenting Private Placement Parties;
(d) unless otherwise agreed by the Majority Consenting Private Placement Parties, all
Existing Shares shall be cancelled without any consideration therefor. Unless
otherwise agreed by the Majority Consenting Private Placement Parties, each
Secured Debtholder shall receive its Pro-Rata Share of such number of common
shares of Concordia as determined by the Majority Consenting Private Placement
Parties, acting reasonably, which shall in no case exceed 0.35% of the amount of
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outstanding common shares of Concordia immediately following implementation
of the Recapitalization Transaction (subject to MIP Dilution);
(e) the definition of “Equity Claim” shall mean any ‘equity security’ as defined in
section 101(16) of the Bankruptcy Code;
(f) the Additional Cash Amount shall not be payable in the Chapter 11 Process; and
(g) unless otherwise agreed by Concordia and the Majority Consenting Private
Placement Parties, the Private Placement Parties shall not be entitled to apply the
cash consideration amounts set out in sub-sections 2(a) (ii) and (iv) of this
Schedule G towards their Private Placement Commitments.
