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I wonder if anyone had read the documents

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iDeVos   Wednesday, 03/06/19 03:42:36 PM
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I wonder if anyone had read the documents attached along with the doc petitions listed for Synergy case# 18-14010? Below is a copy of the non-binding LOI which indicated BHC willing to acquire the whole Synergy for a total payment package which could valued over $1/share to shareholders (see items iii & iv in the letter: $70M plus a CVR with potential earning up to $250M)

The question now is why Synergy management decided not accepting the offer and in stead selling certain assets to BHC for an amount of the cash more than enough to pay off all the debts and retaining the (shell) company? I guess the decision must be on the facts that whatever left of Synergy is worth more than $1/share, and Synergy management will have to explain in the upcoming hearing on 03/12.

Below is a copy of the text from the letter:
BAUSCH+ Health
400 Somerset Corporate Boulevard
Bridgewater. New Jersey 08807
908 927 1400

October 13, 2018

Troy Hamilton
Chief Executive Officer
Synergy Pharmaceuticals
420 Lexington Ave #2012
New York, NY 10170

Re: Non-Binding Letter of Intent for the Acquisition of Synergy Pharmaceuticals, Inc.

Dear Troy:
Further to our previous non-binding letter of intent dated August 31, 2018 (the "August LOI") and subsequent conversations between our management teams, Bausch Health Companies Inc. ("Bausch Health") is pleased to present this non-binding letter of intent related to a proposed transaction (the "Transaction") for the acquisition by Bausch Health (and/or one or more of its affiliates) of 100% of the outstanding common stock of Synergy Pharmaceuticals, Inc. (the "Company"). For the avoidance of doubt, this non-binding letter of intent and the terms set forth herein supersede in all respects the August LOI and the terms set forth therein.

Transaction Consideration and Payments at Closing
Based upon our due diligence to date, Bausch Health would be prepared to offer an aggregate purchase price (the "Transaction Consideration") for the outstanding common stock of the Company (including shares of common stock issuable upon the exercise of outstanding options, the exercise of warrants, and the conversion, if any, of the Company's senior convertible notes) and for the repayment of the Company's debt and other obligations, in addition to payments made at Closing for satisfaction of the Company's obligations, consisting of:

(i) up to $165 million in cash paid to the Company to satisfy all of the Company's existmg obligations at the consummation of the Transaction ("Closing") (including repayment of existing debt, severance and retention obligations, and any payments to holders of Company warrants and options);

(ii) up to $34.95 million in cash to be paid to the company's senior secured lender in connection with the prepayment penalty under the Company's senior secured term loan;

(iii) $70 million in cash paid to the company stockholders;

(iv) non-transferable (other than transfers by operation of law (including laws of descent or distribution)) contingent value rights ("CVRs") issuable to the Company's stockholders, which shall expire on the earlier of (a) December 31 of the calendar year in which any generic product competing with TRULANCE becomes available and (b) an outside date (customary for such instruments) to be determined during diligence (such date, the "End Date"), tied to the achievement of the following sales milestones of TRULANCE and Dolcanatide:
Initial milestone achieved in any calendar year after Closing, Aggregate up to and including the End Date: Payment:
$250 million of net sales $40 million
$350 million of net sales $75 million
$500 million of net sales $125 million
$750 million of net sales $200 million
$1 billion of net sales $250 million
$1 .5 billion of net sales $250 million

(v) subject to Bausch Health's diligence on the Company's existing debt, to ensure that the Company has sufficient funds to operate the business in the ordinary course during the period between the signing of the Definitive Agreements (as defined below) and Closing, Bausch Health will make available $30 million for the Company to draw upon between signing and Closing. Beginning 60 days after signing, Bausch Health shall also have the ability to cause the Company to draw down on such funds up to a fixed monthly increment (as an agreed proxy for amounts necessary to fund ongoing Company operations). Any such funds would be provided in the form of a loan (with protections detennined during due diligence). Any portion of such $30 million that remains undrawn as of the Closing (assuming compliance with the interim operating covenants set forth in the Definitive Agreements) will be distributed to the Company's shareholders as part of the Transaction Consideration.
The cash consideration delivered at closing will be funded using Bausch Health's cash on hand.

The Transaction Consideration is based on, among other things, publicly available infom1ation about the Company, the information provided to us to date by and on behalf of the Company and preliminary financial models completed by Bausch Health. Confirmation of the final Transaction Consideration will be dependent on the results of our due diligence.

Due Diligence
It is anticipated that Bausch Health will conduct due diligence on a variety of matters relating to the Company (and its development projects), including, but not limited to, legal, financial, corporate, tax, commercial, manufacturing/supply, regulatory, R&D, intellectual property, employment and labor matters. If it deems it necessary, Bausch Health may request further discussions with the management of the Company and/or a site visit. Bausch Health will expedite its review of the materials and information, with a view to completing its due diligence promptly. However, Bausch Health reserves the right to make
further diligence requests based on the inforn1ation and materials received and discussions conducted in connection with the above-noted items and during the negotiation of the Definitive Agreements.

Definitive Agreements
Bausch Health is prepared to devote the necessary time and resources to negotiate and enter into mutually satisfactory definitive merger agreement, as well as other customary agreements for a transaction of this nature (the "Definitive Agreements"), containing customary terms appropriate to the Transaction, including without limitation appropriate representations, warranties, and covenants of both parties, and to close the Transaction as soon as possible thereafter. We have retained Wachtell, Lipton, Rosen & Katz as legal counsel.

Other Matters
This letter is only a preliminary and non-binding indication of Bausch Health's interest in acquiring the Company and is based on certain assumptions which may change as a result of our due diligence review, negotiations, and other considerations. This letter in not intended to be, and does not, constitute an offer, binding obligation or agreement by Bausch Health to negotiate or enter into a definitive agreement or consummate any transaction involving the Company (or the shares thereof). Furthermore, this letter is not intended, nor shall it be construed, to impose any legal or binding obligation on Bausch Health or the Company or their respective affiliates, and the parties hereto will have no rights or obligations of any kind whatsoever by virtue of this letter or any other written or oral expression by our respective representatives unless and until a definitive agreement is executed and delivered, except in each case, with respect to the confidentiality and exclusivity provisions set forth below.

This letter is provided to you pursuant to the terms of the Confidentiality Agreement dated January 1 7, 2017, as extended on September 10, 2018, between Bausch Health and the Company and with the understanding that none of the Company, its affiliates, its directors or officers, or any of its or their representatives or advisors, will disclose to any person or entity the terms or existence of this letter, the fact that any investigation, discussions or negotiations are taking place concerning a possible transaction, any other non-public information regarding Bausch Health disclosed to the Company during the negotiations, and the Company agrees to keep such information strictly confidential and will not use any such information for any purpose other than the evaluation of our letter of intent.

In recognition of the time and resources Bausch Health has devoted and will devote to the evaluation and negotiation of the Transaction, the Company agrees that, for a period commencing on the date hereof and ending upon the earliest of (i) the date of execution of the Definitive Agreements, (ii) termination of negotiations by mutual agreement of the parties hereto, or (iii) 5:00 p.m. Eastern Time on November 30, 2018 (the "Exclusivity Period"), the Company agrees that it will not, and will cause each of its affiliates, and its and their respective directors, officers, employees, partners, managing directors, agents, investment bankers, :financial advisors, attorneys, accountants, agents and representatives (collectively and together with its affiliates, "Representatives"), not to, directly or indirectly: solicit, initiate, facilitate, encourage, accept or enter into discussions or transactions with, or encourage, any corporation, partnership, other entity, individual, entity or group concerning, or provide any information to any of the foregoing in connection with, (a) a merger, consolidation, exchange of shares, recapitalization, liquidation, reorganization, dissolution, business combination or other transaction, (b) any sale, lease or exchange, pledge, transfer or other disposition of 5% or more of the assets of the Company in a single or in multiple transactions or (c) any tender offer, exchange of cash for the securities of the Company, or the acquisition of beneficial ownership of 5% or more of the equity in the Company (each of (a), (b), and (c), an "Acquisition Transaction").

The Company further agrees to, and agrees to cause its Representatives to, cease immediately any and all discussions or negotiations with any person, entity or group other than Bausch Health and its affiliates and their respective representatives, regarding an Acquisition Transaction. The Company agrees to: (i) inform any third party which, during the Exclusivity Period, provides any indication of interest, offer or request for information (that could reasonably be expected to lead to any such offer or indication of interest) in respect of any transaction with the Company that is, or could reasonably be expected to lead to, an Acquisition Transaction (each, an "Unsolicited Bidder Communication") only that it declines to engage in any discussions or negotiations with respect to such Unsolicited Bidder Communication at such time (without disclosing the identity of Bausch Health or the existence or any terms, conditions or other facts of this letter), and (ii) as promptly as practicable (but within 48 hours of receipt), notify Bausch Health if the Company becomes aware of the receipt by the Company or any of its Representatives of any Unsolicited Bidder Communication and of the Company's response thereto in accordance with the immediately preceding clause (i).

Notwithstanding anything to the contrary contained herein, it is expressly agreed that the Company shall be permitted to retain and work with an investment bank during the Exclusivity Period, it being acknowledged that any such investment bank shall be a Representative hereunder and shall be instructed to comply with the terms of the foregoing paragraphs.

Governing Law; Exclusive Jurisdiction
This letter will be governed and construed in accordance with laws of the State of Delaware and the courts of Delaware shall have exclusive jurisdiction.

We are excited about the prospect of this Transaction and we look forward to your favorable response to this letter. Should you have any questions regarding this letter or any information contained in it, please do not hesitate to contact the undersigned.
Very truly yours,

Bausch Health Companies Inc.

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