- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-4
Issuer Tender Offer Statement
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
FUISZ TECHNOLOGIES LTD.
BIOVAIL CORPORATION INTERNATIONAL
---------------------------------
(Name of Issuer)
FUISZ TECHNOLOGIES LTD.
BIOVAIL CORPORATION INTERNATIONAL
------------------------------------
(Name of Person(s) Filing Statement)
7% Convertible Subordinated Debentures due 2004,
Biovail Common Shares, no par value
----------------------------------------------
(Title of Class of Securities)
7% Convertible Subordinated Debentures due 2004: 359536AA7;
359536AB5; U34898AA1
Biovail Common Shares: 09076K106
----------------------------------------------------
(CUSIP Number of Class of Securities)
Stephen H. Willard Kenneth C. Cancellara
Executive Vice President Senior Vice President, General Counsel
and General Counsel and Secretary
Fuisz Technologies Ltd. 2488 Dunwin Drive
14555 Avion Parkway Mississauga, Ontario
Chantilly, VA 20151 Canada L5L 1J9
(703) 995-2400 (905) 608-8008
- ------------------------- --------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)
Copy To:
Roger Andrus, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
(212) 701-3000
November 16, 1999
-----------------
(Date Tender Offer First Published, Sent or Given to Security Holders)
Calculation of Filing Fee
================================================================================
Transaction Valuation* Amount of Filing Fee
- --------------------------------------------------------------------------------
$75,904,166.67 $15,180.83
================================================================================
* The transaction value shown is only for the purpose of calculating the
filing fee. The amount shown reflects the cost of purchasing $75,000,000
principal amount of Notes at the purchase price (100% of the principal
amount of the Notes, plus accrued and unpaid interest up to but excluding
the date of payment) as of December 16, 1999 (the expected date of payment).
The amount of the filing fee is calculated in accordance with Section
13(e)(3) of the Securities Exchange Act of 1934, as amended.
<PAGE>
INTRODUCTORY STATEMENT
This Schedule 13E-4 relates to a change of control offer (the "Offer") by
Biovail Technologies Ltd., a Delaware corporation (formerly Fuisz Technologies
Ltd.) (the "Company"), to purchase for cash, on the terms and subject to the
conditions set forth in the attached Change of Control Notice and Offer to
Purchase dated November 16, 1999 (the "Offer to Purchase") and the related
Letter of Transmittal (the "Letter of Transmittal"), all of the outstanding 7%
Convertible Subordinated Debentures due 2004 of the Company (the "Notes"). Prior
to the Effective Time (as defined in the Offer to Purchase), the Notes were
convertible into shares of common stock, par value $.01 per share, of Fuisz (the
"Company Common Stock"), at a conversion price of $13.25 per share of Company
Common Stock. Copies of the Offer to Purchase and the Letter of Transmittal are
filed as exhibits (a)(1) and (a)(2) hereto.
Item 1. Security and Issuer.
(a) The name of the Company is Biovail Technologies Ltd. The address of its
principal executive office is 14555 Avion Parkway, Chantilly, VA 20151. The
Company is a wholly owned subsidiary of Biovail Corporation International, an
Ontario, Canada corporation ("Biovail"). Biovail's principal executive office is
2488 Dunwin Drive, Mississauga, Ontario, Canada L5L 1J9.
(b) The securities which are the subject of the Offer are the 7%
Convertible Subordinated Debentures due 2004 issued by the Company. The Notes
are convertible into shares of Company Common Stock at a conversion price of
$13.25 per share. As of November 12, 1999, there was $75,000,000 aggregate
principal amount of Notes outstanding. The Offer is for any and all Notes, in
denominations of $1,000 or integral multiples thereof, at 100% of the principal
amount of the Notes, plus accrued and unpaid interest up to but excluding the
date of payment. To the best knowledge of the Company, no Notes are being
purchased from any officer, director or affiliate of Fuisz.
(c) The information set forth in the section of the Offer to Purchase
entitled "Market Price Information" is incorporated herein by reference.
(d) The Company and Biovail are filing this statement. The addresses of the
Company and Biovail are set forth in Item 1(a).
Item 2. Source and Amount of Funds or Other Consideration.
(a) - (b) The information set forth in the section of the Offer to Purchase
entitled "Sources and Amount of Funds" is incorporated herein by reference.
Item 3. Purpose of the Tender Offer and Plans or Proposals of the Issuer or
Affiliate.
The information set forth in the section of the Offer to Purchase entitled
"The Offer Purpose and Effects of the Offer" is incorporated herein by
reference.
<PAGE>
(a) - (j) The information set forth in the sections to the Offer to
Purchase entitled "The Offer -- General," "Recent Developments" and "Available
Information" is incorporated herein by reference.
Item 4. Interest in Securities of the Issuer.
Neither the Company nor, to the Company's knowledge, any of the executive
officers or directors of Fuisz or any affiliate of any of the foregoing, has
engaged in any transactions involving the Notes during the 40 business days
prior to the date hereof. On October 22, 1999, five of the executive officers of
Biovail sold Biovail common shares in a public, underwritten offering. Eugene N.
Melnyk, Chairman of the Board and a Director of Biovail, sold 466,850 Biovail
common shares in the offering for total consideration (net of underwriters'
discount) of $22,735,595. Bruce D. Brydon, Chief Executive Officer and a
Director of Biovail, exercised options to purchase 56,000 Biovail common shares
for a total exercise price of $1,120,000, all of which were sold in the Offering
for total consideration (net of underwriters' discount) of $2,727,200. Robert A.
Podruzny, President, Chief Operating Officer and Director of Biovail, exercised
options to purchase 41,200 Biovail common shares for a total exercise price of
$996,000, all of which were sold in the offering for a total consideration (net
of underwriters' discount) of $2,006,440. Kenneth C. Cancellara, Senior Vice
President, General Counsel, Secretary and Director of Biovail, exercised options
to purchase 18,350 Biovail common shares for a total exercise price of $367,000,
all of which were sold in the offering for total consideration (net of
underwriters' discount) of $893,645. Rolf K. Reininghaus, Senior Vice President
and Director of Biovail, sold 77,600 Biovail common shares in the offering for a
total consideration (net of underwriters' discount) of $3,779,120.
Item 5. Contracts, Arrangements, Understandings or Relationships With Respect to
the Issuer's Securities.
None.
Item 6. Persons Retained, Employed or to Be Compensated.
The information set forth in the section of the Offer to Purchase entitled
"The Depositary" is incorporated herein by reference.
Item 7. Financial Information.
(a) - (b) The information set forth in the sections entitled Consolidated
Historical Financial Data and Unaudited Pro Forma Combined Financial Information
included in the Registration Statement of Biovail on Form F-10 dated October 15,
1999 is incorporated herein by reference.
Item 8. Additional Information.
Not Applicable.
-2-
<PAGE>
Item 9. Material to be Filed as Exhibits.
(a)(1) Change of Control Notice and Offer to Purchase, dated
November 16, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to clients.
(a)(5) Letter to brokers, dealers, commercial banks, trust
companies and other nominees.
(b) Not applicable.
(c)(1) Indenture, dated as of October 22, 1997, between the Company, as
issuer, and The Bank of New York, as trustee (incorporated by reference to
Exhibit 4.2 to Fuisz's Form S-3 Registration Statement No. 333-41037 dated
November 25, 1997).
(c)(2) First Supplemental Indenture, dated as of November 12, 1999, between
the Company, as issuer, and The Bank of New York, as trustee.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
-3-
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: November 16, 1999
BIOVAIL TECHNOLOGIES LTD.
(formerly Fuisz Technologies Ltd.)
By: /s/ Stephen H. Willard
------------------------------------------
Stephen H. Willard
Executive Vice President, General Counsel
and Secretary
BIOVAIL CORPORATION INTERNATIONAL
By: /s/ Kenneth G. Howling
------------------------------------------
Kenneth G. Howling
Vice President and Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
Sequential
Exhibit No. Description Page Number
- ---------- ----------- -----------
(a)(1) Change of Control Notice and Offer to
Purchase, dated November 16, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to clients.
(a)(5) Letter to brokers, dealers, commercial banks,
trust companies and other nominees.
(b) Not applicable.
(c)(1) Indenture, dated as of October 22, 1997,
between Fuisz, as issuer, and The Bank of New
York, as trustee (incorporated by reference
to Exhibit 4.2 to Fuisz's Form S-3
Registration Statement No. 333-41037 dated
November 25, 1997).
(c)(2) First Supplemental Indenture, dated as of
November 12, 1999, between Fuisz, as issuer,
and The Bank of New York, as trustee.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
<PAGE>
EXHIBIT (a)(1)
CHANGE OF CONTROL NOTICE
AND OFFER TO PURCHASE
FUISZ TECHNOLOGIES LTD.
OFFER TO PURCHASE
FOR CASH ANY AND ALL OF THE OUTSTANDING
7% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2004
OF FUISZ TECHNOLOGIES LTD.
(NAME CHANGED TO BIOVAIL TECHNOLOGIES LTD.)
AT
100% OF THE PRINCIPAL AMOUNT
OF THE DEBENTURES
- --------------------------------------------------------------------------------
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THIS CHANGE OF
CONTROL NOTICE AND OFFER TO PURCHASE, THE OFFER AND WITHDRAWAL
RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON DECEMBER 16,
1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). DEBENTURES TENDERED
IN THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION
DATE.
- --------------------------------------------------------------------------------
Biovail Technologies Ltd. (formerly Fuisz Technologies Ltd.) (the
"Company") hereby offers (the "Offer") to purchase for cash at the Repurchase
Price (as defined below), and upon the terms and subject to the conditions set
forth in this Change of Control Notice and Offer to Purchase (the "Offer to
Purchase") and in the accompanying Letter of Transmittal (the "Letter of
Transmittal"), any and all of the outstanding 7% Convertible Subordinated
Debentures due 2004 of the Company (the "Notes"). As a result of the Merger (as
defined below), each $1,000 principal amount of Notes is convertible into common
shares of Biovail Corporation International as described below. The "Repurchase
Price" equals 100% of the principal amount of the Notes, plus accrued and unpaid
interest up to but excluding December 16, 1999 (the "Repurchase Date"), unless
the Expiration Date is extended as set forth herein under "The Offer --
Expiration Date; Extensions; Amendments; Termination." Unless the Company fails
to pay the Repurchase Price, any Notes properly tendered pursuant to the Offer
and accepted for payment will cease to accrue interest on the Repurchase Date.
Any Notes not tendered in the Offer (or tendered and withdrawn prior to the
Expiration Date) will remain obligations of the Company and will continue to
accrue interest and have all of the benefits of the Indenture.
Any holder of Notes (a "Holder") desiring to tender all or any portion of
such Holder's Notes must comply with the procedures for tendering Notes set
forth herein in "Procedures for Tendering Notes" and in the Letter of
Transmittal. Tenders of Notes may be withdrawn at any time prior to the
Expiration Date. In the event of a withdrawal of Notes, the Notes so withdrawn
will be returned to the Holder promptly.
The Offer is being made pursuant to the Indenture, dated as of October 22,
1997, between the Company and The Bank of New York, as trustee (the "Trustee"),
as supplemented by a supplemental
The date of this Change of COntrol Notice and Offer to Purchase is
November 16, 1999
<PAGE>
indenture (the "Supplemental Indenture") dated as of November 12, 1999 (the
indenture, as supplemented by the Supplemental Indenture, is referred to herein
as the "Indenture") which provides that, following a Change of Control (as
defined below), each Holder will have the right, at such Holder's option, to
require the Company to purchase all or any part of such Holder's Notes at the
Repurchase Price (a "Change of Control Right"). A Change of Control occurred on
November 12, 1999 as a result of the consummation of the merger (the "Merger")
of ABCI Acquisition Sub. Corporation, a Delaware corporation ("Acquisition Sub")
and wholly owned subsidiary of Biovail Corporation International, an Ontario
corporation ("Biovail"), pursuant to which Acquisition Sub was merged with and
into Fuisz Technologies Ltd., and Fuisz as the surviving entity, became a
wholly-owned subsidiary of Biovail. The name of the Company was subsequently
changed to Biovail Technologies Ltd.
The Merger was consummated on November 12, 1999 (the "Effective Time")
pursuant to an Agreement and Plan of Merger, dated as of July 25, 1999, by and
among the Company, Biovail and Acquisition Sub (the "Merger Agreement") which
provided for the Merger of Acquisition Sub with and into the Company. As
provided for in the Merger Agreement, Acquisition Sub commenced a tender offer
(the "Equity Tender Offer") to purchase up to, and purchased, 6,585,225 of the
outstanding shares of the Company's common stock at a purchase price of $7.00
per share. As a result of the Equity Tender Offer and other stock purchases,
immediately prior to the Effective Time Biovail and its subsidiary held
10,795,054 shares of the Company's common stock. Upon the consummation of the
Merger, stockholders of the Company received the right to receive .1197 of one
Biovail common share for each share of the Company's common stock held by them,
based on the exchange ratio (the "Exchange Ratio") set forth in to Merger
Agreement.
Prior to the Effective Time, the Notes were convertible into shares of the
Company's common stock at a conversion price of $13.25 per share. As a result of
the Merger and pursuant to the Supplemental Indenture, the Notes are no longer
convertible into shares of the Company's common stock. Instead, each Holder has
the right, (during the period the Notes are convertible as specified in Section
1301 of the Indenture) to convert such Notes only into the amount of Biovail
common shares receivable upon the Merger pursuant to the Merger Agreement by the
holder of the number of shares of the Company's common stock into which such
Notes might have been converted immediately prior to the Merger. Based on the
current conversion price of $13.25 per share, each $1,000 principal amount of
Notes was convertible into approximately 75.47 shares of the Company's common
stock immediately prior to the Effective Time and is now convertible into
approximately 9.03 Biovail common shares, subject to adjustment as provided in
the Indenture. Information with respect to historical and recent stock prices of
Biovail common shares is set forth below under "Market Price Information --
Biovail Common Shares."
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment) and applicable law, the Company will purchase, by accepting for
payment, and will pay for all Notes validly tendered (and not properly
withdrawn) pursuant to the Offer promptly after the Expiration Date, such
payment to be made by the deposit of immediately available funds by the Company
with The Bank of New York (the "Depositary").
No person has been authorized to give any information or to make any
representations other than those contained in this Offer to Purchase and, if
given or made, such information or representations must not be relied upon as
having been authorized. This Offer to Purchase and related docu-
-ii-
<PAGE>
ments do not constitute an offer to buy or the solicitation of an offer to sell
securities in any circumstances in which such offer or solicitation is unlawful.
The delivery of this Offer to Purchase shall not, under any circumstances,
create any implication that the information contained herein is current as of
any time subsequent to the date of such information.
Neither the Company nor Biovail makes any recommendation as to whether or
not Holders should exercise their Change of Control Right and tender Notes
pursuant to this Offer.
Any questions or requests for assistance or for additional copies of this
Offer to Purchase or related documents may be directed to the Depositary at one
of its telephone numbers set forth on the back cover page hereof. Any beneficial
owner owning interests in Notes may also contact such beneficial owner's broker,
dealer, commercial bank, trust company or other nominee for assistance
concerning this Offer.
-iii-
<PAGE>
AVAILABLE INFORMATION
Biovail is, and prior to November 12, 1999, the Company was subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith each has filed reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at
the Commission's Regional Office at Seven World Trade Center, Suite 1300, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such material also can be obtained, at
prescribed rates, from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a website
at http://www.sec.gov. that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
Commission. The common shares of Biovail are listed and traded on the New York
Stock Exchange ("NYSE") and the Toronto Stock Exchange and such reports, proxy
statements and other information concerning Biovail may also be inspected at the
offices of the NYSE, 20 Broad Street, New York, New York 10005.
The following documents filed with the Commission by Biovail (File No.
1-11145) are incorporated in this offer to purchase by reference:
o Biovail's Annual Report on Form 20-F for the Year ended December 31,
1998;
o Biovail's Reports on Form 6-K, filed on June 23, 1999, July 28, 1999
and August 30, 1999;
o Biovail's Registration Statement on Form F-10, filed on October 15,
1999; and
o Biovail's Registration Statement on Form F-4/A, filed on October 15,
1999.
The following documents filed with the SEC by Fuisz (File No. 0-27082) are
incorporated in this offer to purchase by reference:
o Fuisz's Annual Report on Form 10-K for the year ended December 31,
1998;
o Fuisz's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1999 and June 30, 1999;
o Fuisz's Current Reports on Form 8-K, filed on September 8, 1999 and
October 4, 1999;
o Fuisz's proxy statement for its 1999 annual meeting of stockholders;
and
o Fuisz's definite proxy statement on Schedule 14A, filed on October 15,
1999.
Any future filings by Biovail under Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of this offer to purchase will be deemed
to be incorporated in this offer to purchase by reference. Any such filings will
automatically update and replace the information that appears, or is
incorporated in this offer to purchase.
-iv-
<PAGE>
The common stock of the Company has been delisted from the Nasdaq National
Market and application has been made pursuant to the Exchange Act to terminate
the registration of the Company's common stock under the Exchange Act. Such
termination will substantially reduce the information required to be furnished
by the Company to the Commission.
This Offer to Purchase constitutes a part of an Issuer Tender Offer
Statement on Schedule 13E-4 (the "Schedule 13E-4") filed with the Commission by
the Company and Biovail pursuant to Section 13(e) of the Exchange Act and the
rules and regulations promulgated thereunder. The Schedule 13E-4 and all
exhibits thereto are incorporated in this Offer to Purchase by reference.
CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS
This Offer to Purchase, including the information incorporated by reference
herein, contains certain forward looking statements with respect to the
financial condition, results of operations and businesses of the Company and
Biovail. See "Certain Information Concerning the Company and Biovail." These
forward looking statements involve certain risks and uncertainties. Factors that
may cause actual results to differ materially from those contemplated by such
forward looking statements include, among others, the following possibilities:
costs or difficulties in integrating Biovail and the Company are greater than
expected or involve the loss of key personnel resulting in an inability of
Biovail to capitalize on the Company's research, development and marketing
capabilities to the degree contemplated by Biovail and the Company; the failure
to successfully develop, commercialize and launch new products in a timely
manner; the difficulty of predicting regulatory approvals; fluctuations in
operating results; competitive pressures and pricing in the health care
industry; risks associated with technology and product development; availability
of raw materials; risks relating to clinical development and medical acceptance
of new pharmaceutical products; changes in the health care marketplace; reliance
on key strategic alliances; and patent and intellectual property matters,
regulatory and manufacturing issues.
Many of the foregoing risks and factors have been discussed in the
Company's and Biovail's prior filings with the Commission. The foregoing review
of factors pursuant to the Private Securities Litigation Reform Act of 1995
should not be construed as exhaustive.
-v-
<PAGE>
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION........................................................iv
CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS....................v
CERTAIN OFFER MATTERS.........................................................1
Purpose and Effects of the Offer...........................................1
Expiration Date; Extensions; Amendments; Termination.......................1
Acceptance for Payment.....................................................2
PROCEDURES FOR TENDERING NOTES................................................2
Tendering Notes............................................................2
Guaranteed Delivery Procedures.............................................5
Withdrawal Rights..........................................................6
CERTAIN INFORMATION CONCERNING THE COMPANY AND BIOVAIL........................7
Biovail....................................................................7
CERTAIN RECENT DEVELOPMENTS...................................................8
Biovail Equity Offering....................................................8
Biovail Stock Split........................................................8
The Merger.................................................................8
SOURCES AND AMOUNT OF FUNDS..................................................11
MARKET PRICE INFORMATION.....................................................12
The Notes.................................................................12
Biovail Common Shares.....................................................12
SELECTED FINANCIAL INFORMATION...............................................13
Certain Pro Forma Information.............................................16
CERTAIN FEDERAL INCOME TAX CONSEQUENCES......................................17
General...................................................................17
Sale of Notes Pursuant to the Offer.......................................17
THE DEPOSITARY...............................................................19
MISCELLANEOUS................................................................19
-i-
<PAGE>
CERTAIN OFFER MATTERS
Purpose and Effects of the Offer
The Offer is being made pursuant to the Indenture, which provides that,
following a Change of Control, each Holder of Notes will have the right, at such
Holder's option, to require the Company to repurchase all or a portion of such
Holder's Notes, in integral multiples of $1,000, at a purchase price equal to
100% of the principal amount thereof plus accrued and unpaid interest up to but
excluding the Repurchase Date. A "Change of Control" as defined in the Indenture
occurs when, among other things, there shall be consummated any consolidation or
merger of the Company pursuant to which the Company's common stock would be
converted into cash, securities or other property other than a consolidation or
merger of the Company in which the holders of the Company's common stock
immediately prior to the consolidation or merger have, directly or indirectly,
at least a majority of the total voting power of all classes of capital stock
entitled to vote generally in the election of directors of the continuing or
surviving corporation immediately after such consolidation or merger in
substantially the same proportion as their ownership of the Company's common
stock immediately before such transaction.
A "Change of Control" occurred on November 12, 1999 as a result of the
consummation of the Merger, pursuant to which Acquisition Sub was merged with
and into the Company and the Company , as the surviving entity, became a
wholly-owned subsidiary of Biovail. This Offer to Purchase serves as the Change
of Control notice required by Section 1402 of the Indenture.
The Notes purchased in the Offer will cease to be outstanding and will be
delivered to the Trustee for cancellation immediately after such purchase.
Holders of Notes that are not tendered pursuant to the Offer will not have
the right after the Expiration Date to exercise their Change of Control Rights
in respect of such Notes in connection with the Merger. In addition, depending
upon, among other things, the amount of Notes outstanding after the consummation
of the Offer, the liquidity of untendered Notes may be adversely affected by the
Offer. If there is a market for such Notes following the Offer, such Notes may
trade at a discount compared to current trading prices depending on prevailing
interest rates, the market for securities with similar credit features, the
performance of the Company and other factors. There is no assurance that an
active market in the Notes following consummation of the Offer will exist and no
assurance as to the prices at which such Notes may trade.
If less than all the principal amount of Notes held by a Holder is tendered
and accepted pursuant to the Offer, the Company will issue, and the Trustee will
authenticate and deliver to or on the order of the Holder thereof, at the
expense of the Company, new Notes of authorized denominations, in a principal
amount equal to the portion of the Notes not tendered or not accepted, as the
case may be, as promptly as practicable after the Expiration Date.
Expiration Date; Extensions; Amendments; Termination
The Offer will expire on December 16, 1999, unless extended. During any
extension of the Offer, all Notes previously tendered pursuant to the Offer (and
not properly withdrawn) will remain
<PAGE>
subject to the Offer and may be accepted for payment by the Company, subject to
the withdrawal rights of Holders.
The Company also expressly reserves the right, subject to the requirements
of the Indenture, to amend the terms of the Offer in any respect.
Any extension, termination or amendment of the Offer will be followed as
promptly as practicable by a public announcement thereof. Without limiting the
manner in which the Company may choose to make a public announcement of any
extension, termination or amendment of the Offer, the Company shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement, other than by issuing a release to the Business Wire, except in
the case of an announcement of an extension of the Offer, in which case the
Company shall have no obligation to publish, advertise or otherwise communicate
such announcement other than by issuing a notice of such extension by press
release or other public announcement, which notice shall be issued no later than
9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date.
Acceptance for Payment
For purposes of the Offer, the Company shall be deemed to have accepted for
payment (and thereby to have purchased) tendered Notes as, if and when the
Company gives oral or written notice to the Depositary of the Company's
acceptance of such Notes for payment. Subject to the terms and conditions of the
Offer, payment for Notes so accepted will be made by deposit of the
consideration therefor with the Depositary. The Depositary will act as agent for
tendering Holders for the purpose of receiving payment from the Company and then
transmitting payment to such tendering Holders.
PROCEDURES FOR TENDERING NOTES
Tendering Notes
The tender of Notes pursuant to any of the procedures set forth in this
Offer to Purchase and in the Letter of Transmittal will constitute a binding
agreement between the tendering Holder and the Company upon the terms and
subject to the conditions of the Offer. The tender of Notes will constitute an
agreement to deliver good and marketable title to all tendered Notes prior to
the Expiration Date free and clear of all liens, charges, claims, encumbrances,
interests and restrictions of any kind.
EXCEPT AS PROVIDED IN "-- GUARANTEED DELIVERY PROCEDURES", UNLESS THE NOTES
BEING TENDERED ARE DEPOSITED BY THE HOLDER WITH THE DEPOSITARY PRIOR TO THE
EXPIRATION DATE (ACCOMPANIED BY A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL), THE COMPANY MAY, AT ITS OPTION, REJECT SUCH TENDER. PAYMENT FOR
NOTES WILL BE MADE ONLY AGAINST DEPOSIT OF TENDERED NOTES AND DELIVERY OF ALL
OTHER REQUIRED DOCUMENTS.
Only record Holders of Notes are authorized to exercise a Change of Control
Right and tender their Notes pursuant to the Offer. Accordingly, to properly
exercise a Change of Control Right and tender Notes or cause Notes to be
tendered, the following procedures must be followed:
-2-
<PAGE>
Notes held through DTC. Each beneficial owner of Notes held through a
participant (a "DTC Participant") of The Depository Trust Company ("DTC") (i.e.,
a custodian bank, depositary, broker, trust company or other nominee) must
instruct such DTC Participant to cause its Notes to be tendered in accordance
with the procedures set forth in this Offer to Purchase.
Pursuant to an authorization given by DTC to the DTC Participants, each DTC
Participant that holds Notes through DTC must (i) transmit its acceptance
through the DTC Automated Tender Offer Program ("ATOP") (for which the
transaction will be eligible), and DTC will then edit and verify the acceptance,
execute a book-entry delivery to the Depositary's account at DTC and send an
Agent's Message (as defined below) to the Depositary for its acceptance, or (ii)
comply with the guaranteed delivery procedures set forth in this Offer to
Purchase. The Depositary will (promptly after the date of this Offer to
Purchase) establish accounts at DTC for purposes of the Offer with respect to
Notes held through DTC, and any financial institution that is a DTC Participant
may make book-entry delivery of interests in Notes into the Depositary's account
through ATOP. However, although delivery of interests in the Notes may be
effected through book-entry transfer into the Depositary's account through ATOP,
an Agent's Message in connection with such book-entry transfer and any other
required documents must be, in any case, transmitted to and received by the
Depositary at its address set forth on the back cover of this Offer to Purchase,
or the guaranteed delivery procedures set forth below must be complied with, in
each case, prior to the Expiration Date. Delivery of documents to DTC does not
constitute delivery to the Depositary. The confirmation of a book-entry transfer
into the Depositary's account at DTC as described above is referred to herein as
a "Book-Entry Confirmation."
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Depositary and forming a part of the Book-Entry Confirmation,
which states that DTC has received an express acknowledgment from each DTC
Participant tendering through ATOP that such DTC Participants have received a
Letter of Transmittal and agree to be bound by the terms of the Letter of
Transmittal and that the Company may enforce such agreement against such DTC
Participants.
All of the Notes currently held through DTC have been issued in the form of
a global note registered in the name of Cede & Co. ("Cede"), DTC's nominee (the
"Global Note"). At or as of the close of business on the second business day
after the Expiration Date, DTC will deliver to the Depositary the Global Note.
At or as of the close of business on the second business day after the
Expiration Date, DTC will deliver the aggregate principal amount of Notes as to
which it has delivered Agent's Messages in respect of Notices of Guaranteed
Delivery as described under "-- Guaranteed Delivery Procedures." Thereafter, the
aggregate principal amount of the Global Note will be reduced to represent the
aggregate principal amount of Notes held through DTC and not tendered pursuant
to the Offer and the Global Note will be returned to Cede.
Notes held by Record Holders. Each record Holder must complete and sign a
Letter of Transmittal, and mail or deliver such Letter of Transmittal, and any
other documents required by the Letter of Transmittal, together with
certificate(s) representing all tendered Notes, to the Depositary at its address
set forth on the back cover page of this Offer to Purchase, or the Holder must
comply with the guaranteed delivery procedures set forth in this Offer to
Purchase.
-3-
<PAGE>
All signatures on a Letter of Transmittal must be guaranteed by a
recognized participant in the Securities Transfer Agents Medallion Program, the
NYSE Medallion Signature Program or the Stock Exchange Medallion Program;
provided, however, that signatures on a Letter of Transmittal need not be
guaranteed if such Notes are tendered for the account of an Eligible Institution
(as defined below). If a Letter of Transmittal or any Note is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of
a corporation or other person acting in a fiduciary or representative capacity,
such person must so indicate when signing, and proper evidence satisfactory to
the Company of the authority of such person so to act must be submitted.
No alternative, conditional, irregular or contingent tenders will be
accepted (unless waived). By executing a Letter of Transmittal or transmitting
an acceptance through ATOP, each tendering Holder waives any right to receive
any notice of the acceptance for purchase of its Notes.
Lost or Missing Certificates. If a record Holder desires to tender Notes
pursuant to the Offer, but the certificates representing such Notes have been
mutilated, lost, stolen or destroyed, such Holder should write to or telephone
the Depositary about procedures in accordance with the provision of the
Indenture for obtaining replacement certificates representing such Notes.
Backup Federal Income Tax Withholding. Under the "backup withholding"
provisions of Federal income tax law, unless a tendering Holder, or his or her
assignee (in either case, the "Payee"), satisfies the conditions described in
Instruction 5 of the Letter of Transmittal or is otherwise exempt, the aggregate
purchase price may be subject to backup withholding tax at a rate of 31%. To
prevent backup withholding, each Payee should complete and sign the Substitute
Form W-9 provided in the Letter of Transmittal. See Instruction 5 of the Letter
of Transmittal.
Effect of Letter of Transmittal. Subject to and effective upon the
acceptance for payment of the Notes tendered thereby, by executing and
delivering a Letter of Transmittal a tendering Holder of Notes (i) irrevocably
sells, assigns and transfers to the Company all right, title and interest in and
to all the Notes tendered thereby, (ii) waives any and all rights with respect
to the Notes (including without limitation any existing or past defaults and
their consequences in respect of the Notes and the Indenture under which the
Notes were issued), (iii) releases and discharges the Company from any and all
claims such Holder may have now, or may have in the future arising out of, or
related to, the Notes including without limitation any claims that such Holder
is entitled to receive additional principal or interest payments with respect to
the Notes or to participate in any redemption or defeasance of the Notes and
(iv) irrevocably constitutes and appoints the Depositary the true and lawful
agent and attorney-in-fact of such Holder with respect to any such tendered
Notes, with full power of substitution and resubstitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest) to
(a) deliver certificates representing such Notes, or transfer ownership of such
Notes on the account books maintained by DTC, together, in any such case, with
all accompanying evidences of transfer and authenticity, to the Company, (b)
present such Notes for transfer on the relevant security register and (c)
receive all benefits or otherwise exercise all rights of beneficial ownership of
such Notes (except that the Depositary will have no rights to, or control over,
funds from the Company, except as agent for the Company, for the Repurchase
Price for any tendered Notes that are purchased by the Company), all in
accordance with the terms of the Offer.
-4-
<PAGE>
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of tendered Notes will be resolved by the Company, whose
determination will be final and binding. The Company reserves the absolute right
to reject any or all tenders that are not in proper form or the acceptance of
which may, in the opinion of counsel for the Company, be unlawful. The Company
also reserves the absolute right to waive any condition to the Offer and any
irregularities or conditions of tender as to particular Notes. The Company
interpretation of the terms and conditions of the Offer (including the
instructions in the Letter of Transmittal) will be final and binding. Unless
waived, any irregularities in connection with tenders must be cured within such
time as the Company shall determine. The Company and the Depositary shall not be
under any duty to give notification of defects in such tenders and shall not
incur liabilities for failure to give such notification. Tenders of Notes will
not be deemed to have been made until such irregularities have been cured or
waived. Any Notes received by the Depositary that are not properly tendered and
as to which the irregularities have not been cured or waived will be returned by
the Depositary to the tendering Holder, unless otherwise provided in the Letter
of Transmittal, as soon as practicable following the Expiration Date.
LETTERS OF TRANSMITTAL AND NOTES MUST BE SENT ONLY TO THE DEPOSITARY. DO
NOT SEND LETTERS OF TRANSMITTAL OR NOTES TO THE COMPANY.
THE METHOD OF DELIVERY OF NOTES AND LETTERS OF TRANSMITTAL, ANY REQUIRED
SIGNATURE GUARANTEES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY
THROUGH DTC AND ANY ACCEPTANCE THROUGH ATOP, IS AT THE ELECTION AND RISK OF THE
PERSONS TENDERING AND DELIVERING ACCEPTANCES OR LETTERS OF TRANSMITTAL AND,
EXCEPT AS OTHERWISE PROVIDED IN THE LETTER OF TRANSMITTAL, DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, IT IS SUGGESTED THAT THE HOLDER USE PROPERLY INSURED, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, AND THAT THE MAILING BE MADE SUFFICIENTLY IN ADVANCE
OF THE EXPIRATION DATE TO PERMIT DELIVERY TO THE DEPOSITARY PRIOR TO THE
EXPIRATION DATE.
Guaranteed Delivery Procedures
DTC Participants. A DTC Participant who wishes to cause its Notes to be
tendered, but who cannot transmit its acceptance through ATOP prior to the
Expiration Date, may cause a tender to be effected if:
(a) guaranteed delivery is made by or through a firm or other entity
identified in Rule 17Ad-15 under the Exchange Act (an "Eligible
Institution"), including (as such terms are defined therein): (i) a bank;
(ii) a broker, dealer, municipal securities dealer, municipal securities
broker, government securities dealer or government securities broker, (iii)
a credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings institution that is a
participant in a Securities Transfer Association recognized program;
-5-
<PAGE>
(b) prior to 12:00 a.m., New York City time, on the Expiration Date,
the Depositary receives from such Eligible Institution a properly completed
and duly executed Notice of Guaranteed Delivery (by mail, hand delivery,
facsimile transmission or overnight courier) substantially in the form
provided herewith; and
(c) Book-Entry Confirmation of the transfer into the Depositary's
account at DTC, and all other documents required by the Letter of
Transmittal, are received by the Depositary within three NYSE trading days
after the date of receipt by the Depositary of such Notice of Guaranteed
Delivery.
Record Holders. A record Holder who wishes to tender its Notes but (i)
whose Notes are not immediately available and will not be available for
tendering prior to the Expiration Date, or (ii) who cannot deliver its Notes,
the Letter of Transmittal or any other required documents to the Depositary
prior to the Expiration Date, may effect a tender if:
(a) the tender is made by or through an Eligible Institution;
(b) prior to 12:00 a.m., New York City time, on the Expiration Date,
the Depositary receives from such Eligible Institution a properly completed
and duly executed Notice of Guaranteed Delivery (by mail, hand delivery,
facsimile transmission or overnight courier) substantially in the form
provided herewith; and
(c) a properly completed and executed Letter of Transmittal, as well
as the certificate(s) representing all tendered Notes in proper form for
transfer, and all other documents required by the Letter of Transmittal,
are received by the Depositary within three NYSE trading days after the
date of receipt by the Depositary of such Notice of Guaranteed Delivery.
Under no circumstances will interest be paid by the Company by reason of
any delay in making payment to any person using the guaranteed delivery
procedures described above.
Withdrawal Rights
Tenders of Notes (or any portion of such Notes in integral multiples of
$1,000) may be withdrawn at any time prior to the Expiration Date.
Notes held through DTC. A DTC Participant who has transmitted its
acceptance through ATOP in respect of Notes held through DTC may, prior to the
Expiration Date, withdraw the instruction given thereby by (i) withdrawing its
acceptance through ATOP, or (ii) delivering to the Depositary by mail, hand
delivery or facsimile transmission a notice of withdrawal of such instruction.
Such notice of withdrawal must contain the name and number of the DTC
Participant, the principal amount of Notes to which such withdrawal relates and
the signature of the DTC Participant. Withdrawal of such an instruction will be
effective upon receipt of such notice of withdrawal by the Depositary.
Notes held by Record Holders. A Holder may withdraw its tender of Notes
prior to the Expiration Date by delivering to the Depositary by mail, hand
delivery or facsimile transmission a notice of withdrawal. Any such notice of
withdrawal must (i) specify the name of the person who tendered
-6-
<PAGE>
the Notes to be withdrawn, (ii) contain a description of the Notes to be
withdrawn and identify the certificate number or numbers shown on the particular
certificates evidencing such Notes and the aggregate principal amount
represented by such Notes and (iii) be signed by the Holder of such Notes in the
same manner as the original signature on the Letter of Transmittal by which such
Notes were tendered (including any required signature guarantees), or be
accompanied by (x) documents of transfer in a form acceptable to the Company, in
its sole discretion, and (y) a properly completed irrevocable proxy that
authorized such person to effect such revocation on behalf of such Holder. If
the Notes to be withdrawn have been delivered or otherwise identified to the
Depositary, a signed notice of withdrawal is effective immediately upon receipt
by the Depositary even if physical release is not yet effected. Any Notes
properly withdrawn will be deemed to be not validly tendered for purposes of the
Offer.
All signatures on a notice of withdrawal must be guaranteed by a recognized
participant in the Securities Transfer Agents Medallion Program, the NYSE
Medallion Signature Program or the Stock Exchange Medallion Program; provided,
however, that signatures on the notice of withdrawal need not be guaranteed if
the Notes being withdrawn are held for the account of an Eligible Institution.
A withdrawal of an instruction or a withdrawal of a tender must be executed
by a DTC Participant or a Holder, as the case may be, in the same manner as the
person's name appears on its transmission through ATOP or Letter of Transmittal,
as the case may be, to which such withdrawal relates. If a notice of withdrawal
is signed by a trustee, partner, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person must so indicate when signing
and must submit with the revocation appropriate evidence of authority to execute
the notice of withdrawal. A Holder or DTC Participant may withdraw a tender only
if such withdrawal complies with the provisions of this Offer to Purchase.
A withdrawal of an instruction previously given pursuant to the
transmission of an acceptance through ATOP or a withdrawal of a tender by a
Holder may be rescinded only by (i) a new transmission of acceptance through
ATOP, or (ii) execution and delivery of a new Letter of Transmittal, as the case
may be, in accordance with the procedures described herein.
CERTAIN INFORMATION CONCERNING
THE COMPANY AND BIOVAIL
The Company
The Company is an international company engaged in the development,
manufacture, and commercialization of a wide range of drug delivery,
nutraceutical, and food ingredient products utilizing its proprietary CEFORM,
SHEARFORM, and other drug delivery technologies with research and manufacturing
facilities in Virginia, USA as well as in Dublin and Clonmel, Ireland. As a
result of the Merger, the Company is a wholly owned subsidiary of Biovail. The
name of the Company has been changed to Biovail Technologies Ltd.
The Company is a Delaware corporation founded in June 1988. Its principal
executive offices are located at 14555 Avion Parkway, Suite 250, Chantilly,
Virginia 20151. The telephone number of the Company at such location is (703)
995-2200.
-7-
<PAGE>
Biovail
Biovail is an international integrated pharmaceutical company specializing
in the development of advanced oral controlled-release drugs.
Biovail's proprietary technologies are used in formulations which either
improve upon conventional dosage forms of existing products by providing the
therapeutic benefits of controlled release drug delivery or are generically
equivalent to existing once-daily branded products. Biovail develops controlled
release formulations for the branded and generic market segments which are
manufactured by it or by others under license. Biovail does not engage in basic
research to discover new chemical entities.
Biovail was established under the Business Corporations Act (Ontario R.S.O.
1990), as amended, on March 29, 1994. Biovail operates its business through
various subsidiaries. Biovail executive offices are located at 2488 Dunwin
Drive, Mississauga, Ontario, L5L 1J9, and its telephone number is (416)
285-6000.
CERTAIN RECENT DEVELOPMENTS
Biovail Equity Offering
On October 20, 1999, Biovail completed a public offering of 5,000,000
common shares at US$51 per share for gross proceeds of US$255 million (the
"Public Offering"). On October 22, 1999, Biovail and certain directors and
executive officers of Biovail completed the sale of an additional 750,000 common
shares of Biovail pursuant to an over-allotment option granted to the U.S.
underwriters at a price of US$51 per share. Of the 750,000 additional shares,
660,000 were sold by the selling shareholders and 90,000 of the shares were sold
by Biovail. In addition, two of the selling shareholders exercised existing
options to obtain the shares sold by them. Biovail received additional gross
proceeds of US$4,590,000 upon the completion of the over-allotment sale.
Biovail Stock Split
On November 12, 1999, Biovail announced it would convene a special
shareholders meeting to authorize a 2 for 1 stock split.
The Merger
Biovail believes that the acquisition of the Company strengthens and
broadens its position as a drug delivery company and provides several strategic
benefits, including the following:
Attractive portfolio of proprietary technologies. The acquisition of the
Company significantly enhances Biovail's ability to apply a variety of advanced
drug delivery technologies and delivery forms to a substantially broader range
of drugs. Biovail believes these technologies are simpler and significantly more
flexible than competing technologies in the marketplace. The Company utilizes
proprietary technologies to formulate and taste mask drugs in a wide variety of
delivery forms, including rapid dissolve, enhanced absorption and controlled
release. Access to this portfolio of pro-
-8-
<PAGE>
prietary drug delivery technologies, including the patented CEFORM(TM) and
Shearform(TM) technologies, will allow Biovail immediately to expand its
delivery platforms.
Leveraging of scientific knowledge. The acquisition of the Company augments
Biovail's own scientific knowledge and expertise, enhancing its technology and
product development capabilities. Biovail believes that allowing its scientists
to work and share ideas with the Company's scientists will enable Biovail to
increase and accelerate its technology and product development efforts.
Access to critical pharmaceutical company relationships. The acquisition of
the Company significantly expands Biovail's network of pharmaceutical company
relationships. Biovail will retain many of these relationships and expand their
depth and breadth where significant benefits can be achieved.
Advantageous operational locations. The acquisition of the Company provides
Biovail with a base for increased U.S. expansion opportunities. In October, 1999
the Company sold certain of its continental European operations and the rights
to a particular product for gross consideration of U.S. $39.5 million in cash.
The Company's technology involves drug delivery platforms and the
application of such platforms to specific product development programs. The
Company currently is involved in 13 product development projects for a number of
pharmaceutical companies, which projects are at varying stages of development.
Two of such projects have been submitted for approval with the applicable
regulatory authorities, one of which was submitted to the Food and Drug
Administration in the United States in June 1998 and the other of which was
submitted to the Medical Control Agency in the United Kingdom in April 1998.
Based on Biovail's preliminary review of the technology and after discussions
with management of the Company, Biovail estimates that if the product
development projects for the remaining 11 projects proceed as currently
scheduled, these projects would be completed in accordance with the Company's
contractual obligations with the relevant customers during the next 12 months.
Although Biovail has commenced a review of the technology and the contractual
and scientific bases of these projects, Biovail has not yet completed its review
and, accordingly, schedules for the completion of any one or more projects are
only estimates. Biovail has also retained a third-party to value the technology
and projects under accepted appraisal methodologies. Upon completion of its
review and the receipt of the appraisal, Biovail intends to prioritize
development efforts following the completion of the acquisition.
The Company's technology has not been employed in any product that has
received regulatory approval to date. The completion of any of the current
in-process development projects involves significant risk and complex scientific
issues. Biovail cannot be certain that the technology can be commercially
applied in any products or that, if successfully applied, the pharmaceutical
companies on whose behalf Biovail is developing these projects will market the
products successfully. As is the case in most pharmaceutical development
projects, it will take a number of years to achieve viable commercial levels of
production of a product utilizing the Company's technology due to the lengthy
time associated with manufacturing approvals and strategic marketing partnering.
As the revenue stream from any such products will not be fully realized until
the products are approved and commercialized, this could take a significant
number of years. However, if successful, the application of the Company's
technology will provide Biovail with a source of income from both royalties and
manu-
-9-
<PAGE>
facturing activities. To date Biovail has not yet determined the potential
costs associated with the successful commercialization of any of these projects.
If successful, the Company's technology and products would be expected to
have extended life cycles. Because the Company technology is based on drug
delivery technology, the technology and its application can be applied to
numerous products. Although the risk of technological feasibility is always
present, Biovail's strategy is to exploit the technology through numerous
product developments, which Biovail believes should result in the life of the
technology being at least fifteen years.
Except as noted in this Offer to Purchase, and except as may be effected in
connection with the integration of operations referred to above, Biovail does
not have any present plans or proposals that would result in any extraordinary
corporate transaction, such as a merger, reorganization, liquidation, relocation
of operations, or sale or transfer of assets, involving the Company or any of
its subsidiaries, or any material changes in the Company's corporate structure
or business or the composition of the Company's management or personnel.
Generic Version of Cardizem CD
Biovail received technical approval from the FDA in October 1999 for its
generic versions of Cardizem CD. Biovail's generic version of Cardizem CD was
not the subject of patent infringement litigation and, therefore, Biovail is
free to begin marketing this product upon the expiration of 180 days of
marketing exclusivity available to the "first to file" applicant pursuant to the
provisions of the Waxman-Hatch legislation. Biovail expects to begin marketing
its generic Cardizem CD through its marketing partner, Teva Pharmaceuticals USA
Inc., in December 1999.
Adalat CC
Biovail received tentative approval from the FDA in June 1999 for its 30
mg. and 60 mg. generic versions of Adalat CC. Tentative approval means that the
scientific aspects of the product have been approved by the FDA. Biovail was the
first company to file an Abbreviated New Drug Application ("ANDA") for the 60
mg. strength of Adalat CC and will therefore be entitled to 180 days of
marketing exclusivity. Elan Corporaton plc was the first to file an ANDA for the
30 mg. strength. Biovail has entered into an agreement with Elan giving Biovail
exclusive marketing rights for the United States for Elan's generic versions of
Adalat CC in return for certain up front payments and future royalties. Biovail
will thus be able to launch a 30 mg. Adalat CC product, which Biovail intends to
do through Teva Pharmaceuticals, six months earlier than previously scheduled.
Verelan/Mylan Agreement
In March 1999, Biovail entered into agreements with Mylan for the marketing
of all dosages of a generic version of Verelan using its ANDA first filer status
and Mylan's product approval, which was granted on April 22, 1999. Mylan will
manufacture all of Biovail's requirements for Verelan until its version of the
product is approved. Biovail markets this product through its licensee, Teva,
and Mylan independently markets and prices the product on its own behalf.
-10-
<PAGE>
Celexa Development and Marketing Agreements
In December 1998, Biovail entered into a multi-faceted ten-year agreement
with Lundbeck for the development of a novel controlled-release formulation of
the anti-depressant citalopram, marketed under the trademark Celexa in the
United States. Under the agreement, Biovail will develop, manufacture and supply
a controlled-release version of citalopram for commercial sale by Lundbeck or
its licensees worldwide. In exchange, Lundbeck will pay Biovail product
development fees and an agreed upon supply price upon commercialization of the
controlled-release citalopram product.
In addition, Lundbeck has entered into an agreement with Biovail by which
Crystaal will co-promote the immediate-release version of Celexa in
collaboration with Lundbeck Canada Inc. Crystaal will promote Celexa to primary
care physicians and will receive co-promotion fees for contributing to the
marketing of Celexa in Canada. On February 10, 1999, Lundbeck's
immediate-release version of Celexa was approved for marketing by Health
Canada's Therapeutic Products Program ("TPP") for the symptomatic relief of
depression.
Citalopram, an anti-depressant, belongs to a class of drugs known as SSRIs
(Selective Serotonin Reuptake Inhibitors). Citalopram is the best selling
anti-depressant in 13 countries, including eight in Europe, and has been
introduced in more than 60 countries worldwide under several trade names
including Celexa, Cipramil and Seropram. The worldwide market for such
anti-depressants is estimated to be in excess of $7 billion annually, growing at
a rate of 17% annually. Citalopram is a leading anti-depressant in Europe,
growing at a rate of 28% annually. Compared to many other SSRIs, citalopram has
an improved side effect profile and a lower incidence of drug interactions when
taken concurrently with other medications.
Intellipharmaceutics Inc. Agreement
In March 1999, Biovail entered into an agreement with Intellipharmaceutics
Inc., a company formed by its former Vice President of Research. Under the
agreement, Intellipharmaceutics utilizes certain of its proprietary technology
to help in formulating products. Intellipharmaceutics will receive milestone
payments and royalties with respect to these products. While Biovail believes
most of Intellipharmaceutics' resources will be spent in the formulation of its
products in the near term, the agreement permits Intellipharmaceutics to make
its services and technology available to others.
SOURCES AND AMOUNT OF FUNDS
The precise amount of funds required by the Company to purchase Notes
tendered pursuant to the Offer and to pay the fees and expenses related to the
Offer will not be known until the Expiration Date. If all outstanding Notes were
tendered and purchased, the aggregate amount of funds required to pay the
Repurchase Price would be approximately $75,904,166.67. Such funds are expected
to be provided through a capital contribution by Biovail. Biovail intends to
provide such capital contribution from cash on hand.
-11-
<PAGE>
MARKET PRICE INFORMATION
The Notes
The Notes are not traded in an established market. The Notes are designated
for trading on PORTAL. Prices and trading volume of the Notes are not reported
and are difficult to monitor. To the extent that the Notes are traded, prices of
the Notes may fluctuate widely depending on the trading volume and the balance
between buy and sell orders.
HOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE NOTES PRIOR
TO MAKING ANY DECISION WITH RESPECT TO THE OFFER.
Biovail Common Shares
Biovail common shares trade on the New York Stock Exchange and The Toronto
Stock Exchange, in each case under the symbol "BVF." The following table sets
forth the high and low sales prices per share of Biovail common shares, as
reported on NYSE, for the periods indicated:
Biovail Common
Share Price
--------------------------------
1997 High Low
-------- -----
First quarter.............................. $ 29 7/8 $ 21 1/4
Second quarter............................. 32 5/8 20 7/8
Third quarter.............................. 30 1/8 25 7/16
Fourth quarter............................. 39 1/16 26 5/8
1998
First Quarter.............................. $ 48 15/16 $ 33 1/2
Second Quarter............................. 46 1/2 30 5/16
Third Quarter.............................. 34 3/4 24 1/4
Fourth Quarter............................. 37 13/16 21 3/4
1999
First Quarter.............................. $ 43 5/16 $ 34 9/16
Second Quarter............................. 51 1/8 32 3/8
Third Quarter.............................. 59 47 1/8
Fourth Quarter (through November 12)....... 75 1/2 49 1/8
On November 12, 1999 the closing sales price of Biovail common shares, as
reported on the NYSE, was $71 11/16 per share.
-12-
<PAGE>
SELECTED FINANCIAL INFORMATION
Set forth below is a summary of certain selected consolidated financial
information with respect to Fuisz and Biovail, excerpted or derived from the
audited financial information of Fuisz contained in the Fuisz Annual Report on
Form 10-K for the year ended December 31, 1998, unaudited information of Fuisz
contained in the Quarterly Report on Form 10-Q of Fuisz for the quarterly period
ended June 30, 1999, the Biovail Annual Report on Form 20-F for the year ended
December 31, 1998 and unaudited information of Biovail contained in the Report
on Form 6-K of Biovail for the quarterly period ended June 30, 1999. More
comprehensive financial information is included in such reports and other
documents filed with the Commission, and the following summary is qualified in
its entirety by reference to such reports and other documents, including the
financial information and related notes contained therein. Such reports and
other documents may be inspected and copies may be obtained from the offices of
the Commission, the NYSE or NASDAQ in the manner set forth below under
"Available Information." All information included below is in U.S. Dollars.
-13-
<PAGE>
Fuisz Selected Historical Financial Information
<TABLE>
<CAPTION>
As at and for the As at and for the
six months ended June 30, year ended December 31,
---------------------------- -----------------------------
1999 1998 1998 1997
----------- ----------- ----------- -------------
(unaudited)
(thousands of U.S. dollars, except per share figures and
employee data)
<S> <C> <C> <C> <C>
Earnings and Related Data
Revenues
Product sales........................... $21,007 $23,977 $47,898 $11,968
Research and development................ 1,051 2,833 4,334 5,390
Licensing fees and other................ 13,817 3,497 8,987 4,840
----------- ----------- ----------- -------------
35,875 30,307 61,219 22,198
----------- ----------- ----------- ------------
Expenses
Cost of manufactured goods sold......... 12,751 14,850 27,924 7,807
Research and development expense........ 12,385 11,659 24,058 16,944
Selling and administrative.............. 15,456 14,646 29,482 13,877
Non-recurring expense................... 5,711 - - 4,694
----------- ----------- ----------- -------------
46,303 41,155 81,464 43,322
----------- ----------- ----------- -------------
Operating loss............................ $(10,428) $(10,848) $(20,245) $(21,124)
========== ========== ========== ============
Net loss
U.S. GAAP............................... $(14,563) $(12,399) $(23,579) $(19,601)
Loss per share
U.S. GAAP - basic and fully diluted..... $ (0.66) $ (0.56) $ (1.07) $ (0.92)
Financial position
Cash and short-term deposits............ $16,119 $47,483 $28,916 $78,682
Working capital......................... 18,331 51,379 30,584 77,936
Total assets............................ 125,251 157,708 145,736 170,120
Total debt.............................. 90,788 93,857 93,538 93,905
Shareholders' equity:
U.S. GAAP........................... 15,678 47,500 34,448 59,608
Capital expenditures.................... 1,848 1,936 5,236 12,789
Other data
Depreciation and amortization........... $4,745 $4,252 $8,455 $2,439
EBITDA (1).............................. (5,683) (6,596) (11,790) (18,685)
EBITDA per share........................ $ (0.26) $ (0.30) $ (0.53) $ (0.88)
Cash inflow (outflow) from:
Operating activities.................... (9,464) (11,094) (14,364) (16,260)
Investing activities.................... 2,589 14,276 27,338 (53,452)
Financing activities.................... 136 (80) (8,593) 70,869
Employees............................... 397 462 435 411
Weighted average shares outstanding
(thousands)........................... 21,925 22,259 22,129 21,234
</TABLE>
(1) EBITDA means operating income, plus depreciation and amortization
(excluding amortization of deferred financing costs). EBITDA is presented
because we believe it is a useful indicator of the company's ability to
meet debt service and capital expenditure requirements. It is not intended
as an alternative measure of operating results or cash flow from
operations, as determined in accordance with generally accepted accounting
principles.
-14-
<PAGE>
Biovail Selected Historical Consolidated Financial Information
<TABLE>
<CAPTION>
As at and for the As at and for the
six months ended June 30, year ended December 31,
-------------------------- --------------------------------
1999 1998 1998 1997
----------- ----------- ----------- -------------
(unaudited)
(thousands of U.S. dollars, except per share and employee
data)
<S> <C> <C> <C> <C>
Earnings and Related Data
Revenues
Manufacturing and product sales......... $37,541 $28,763 $69,154 $50,333
Research and development................ 15,352 11,953 32,070 19,559
Royalty, licensing and other............ 11,502 6,428 11,612 12,487
----------- ----------- ----------- -------------
64,395 47,144 112,836 82,379
----------- ----------- ----------- -------------
Expenses
Cost of manufactured goods sold......... 12,887 12,009 28,593 16,471
Research and development expense........ 11,783 8,132 17,490 14,386
Selling and administrative.............. 12,604 8,454 17,608 13,989
----------- ----------- ----------- -------------
37,274 28,595 63,691 44,846
=========== =========== =========== =============
Operating income.......................... $27,121 $18,549 $49,145 $37,533
=========== =========== =========== =============
Net income (1)
Canadian GAAP - basic................... $20,364 $17,391 $45,419 $35,241
US GAAP................................. 18,305 14,966 41,577 32,822
Earnings per share (1)
Canadian GAAP - basic................... $ 0.83 $ 0.65 $ 1.70 $ 1.38
Canadian GAAP - fully diluted........... 0.76 0.61 1.63 1.32
US GAAP - basic......................... 0.75 0.56 1.56 1.28
US GAAP - fully diluted................. 0.69 0.55 1.53 1.23
Financial position
Cash and short-term deposits............ $86,358 $20,882 $78,279 $8,275
Working capital......................... 113,336 53,460 115,324 47,663
Total assets............................ 208,958 126,230 199,919 93,739
Total debt.............................. 126,607 11,596 126,835 4,847
Shareholders' equity (2):
Canadian GAAP..................... 52,071 96,425 51,191 75,458
US GAAP........................... 44,944 96,468 45,362 73,169
Capital expenditures.................... 4,596 24,735 32,787 2,676
Other data
Depreciation and amortization........... $3,154 $2,346 $4,957 $3,157
EBITDA (3).............................. 30,275 20,895 54,102 40,690
EBITDA per share........................ 1.23 0.78 2.03 1.59
Cash inflow (outflow) from:
Operating activities.................... 34,289 26,703 53,573 4,316
Investing activities.................... (4,565) (24,789) (32,953) (3,183)
Financing activities.................... (21,762) (10,724) 49,493 2,635
Employees............................... 528 374 489 377
Weighted average shares outstanding
(thousands)............................ 24,534 26,850 26,641 25,606
</TABLE>
(1) EBITDA means operating income, plus depreciation and amortization
(excluding amortization of deferred financing costs). EBITDA is presented
because we believe it is a useful indicator of the company's ability to
meet debt service and capital expenditure requirements. It is not intended
as an alternative measure of operating results or cash flow from
operations, as determined in accordance with generally accepted accounting
principles.
-15-
<PAGE>
Certain Pro Forma Information
On a pro forma basis, in accordance with Canadian GAAP and after giving
retroactive effect to the Merger and the issuance of 5,000,000 shares in the
Public Offering (at an assumed price), for the twelve months ended December 31,
1998 Biovail would have had revenues of $154.0 million, net income of $10.2
million and earnings per share of $0.31, and for the six months ended June 30,
1999 Biovail would have had revenues of $91.2 million, net income of $1.1
million and earnings per share of $0.04. The complete unaudited pro forma
combined financial information and the underlying assumptions and events on
which such information is predicated is set forth under Unaudited Pro Forma
Combined Financial Information included in the Registration Statement of Biovail
on Form F-10 filed with the Commission on October 15, 1999.
-16-
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
General
The following discussion is for general information only and is based on
the federal income tax law now in effect, which is subject to change, possibly
retroactively. This summary does not discuss all aspects of federal income
taxation which may be relevant to any particular Holder of the Notes in light of
such Holder's individual investment circumstances or to certain types of Holders
subject to special tax rules (e.g., financial institutions, broker-dealers,
pass-through entities, insurance companies, tax-exempt organizations and Holders
who hold their Notes as part of a hedge, straddle, conversion, or other
integrated transaction, and Holders who are not citizens or residents of the
United States or who are foreign corporations
or foreign estates or trusts as to the United States), nor does it address
specific state, local or foreign tax consequences. This summary assumes that the
Holders of the Notes have held their Notes as "capital assets" as defined under
the Internal Revenue Code of 1986, as amended.
EACH HOLDER IS URGED TO CONSULT SUCH HOLDER'S TAX ADVISOR REGARDING THE
SPECIFIC FEDERAL, STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF
THE OFFER.
Sale of Notes Pursuant to the Offer
The receipt of cash by a Holder in exchange for the Notes will be a taxable
transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local or foreign tax laws. Such Holder will
recognize gain or loss in an amount equal to the difference between (i) the
amount of cash received (other than in respect of accrued interest) and (ii)
such Holder's adjusted tax basis in the Notes. Subject to the rules discussed
below, such gain or loss will be capital gain or loss and will be long-term gain
or loss if such Holder has held such Notes for more than one year.
The payment of interest or amounts treated as interest for tax purposes
with respect to a Note generally will be treated as ordinary income to the
extent not previously included in income.
An exception to the capital gain treatment described above applies to a
Holder who holds a Note with a "market discount." Market discount is the amount
on which the Holder's basis in the Note immediately after its acquisition is
exceeded by the stated redemption price of the Note at maturity. (However, a
Note will be considered to have no market discount if such excess is less than
1/4 of 1% of the stated redemption price of the Note at maturity multiplied by
the number of complete years from the Holder's acquisition date of the Note to
its maturity date.) The gain realized by the Holder of a market discount Note on
its purchase by the Company will be treated as ordinary income to the extent
that market discount has accrued (on a straight line basis or, at the election
of the Holder, on a constant interest basis) from the Holder's acquisition date
to the date of sale, unless the Holder has elected to include market discount in
income currently as it accrues. Gain in excess of such accrued market discount
will be subject to the capital gains rules described above.
The receipt by a Holder of cash in exchange for the Notes may be subject to
backup withholding at the rate of 31% with respect to the gross proceeds from
the sale of such
-17-
<PAGE>
Notes unless such Holder (a) is a corporation or comes within certain other
exempt categories and, when required, demonstrates this fact or (b) provides a
correct taxpayer identification number, certifies as to no loss of exemption
from backup withholding and otherwise complies with applicable requirements of
the backup withholding rules. A Holder of Notes who does not provide his correct
taxpayer identification number may be subject to penalties imposed by the IRS.
Any amount withheld under these rules will be creditable against the Holder's
U.S. Federal income tax liability.
The Company will provide information statements to the IRS and to tendering
Holders reporting the cash payments, as required by law.
-18-
<PAGE>
THE DEPOSITARY
The Depositary for the Offer is The Bank of New York. All deliveries and
correspondence sent or presented to the Depositary relating to the Offer should
be directed to one of the addresses or the telephone numbers of the Depositary
set forth on the back cover of this Offer to Purchase. Requests for information
or additional copies of the Offer to Purchase and the related Letter of
Transmittal should be directed to the Depositary.
The Company will pay the Depositary reasonable and customary compensation
for their services in connection with the Offer, plus reimbursement for
reasonable out-of-pocket expenses. the Company will indemnify the Depositary
against certain liabilities and expenses in connection therewith, including
liabilities under the Federal securities laws.
Brokers, dealers, commercial banks and trust companies will be reimbursed
by the Company for customary mailing and handling expenses incurred by them in
forwarding material to their customers. the Company will not pay any fees or
commissions to any broker, dealer or other person (other than the Depositary) in
connection with the solicitation of tenders of Notes pursuant to the Offer.
MISCELLANEOUS
Neither the Company nor Biovail is aware of any jurisdiction where the
making of this Offer is not in compliance with the laws of such jurisdiction. If
the Company becomes aware of any jurisdiction where the making of this Offer
would not be in compliance with such laws, the Company will make a good faith
effort to comply with any such laws or seek to have such laws declared
inapplicable to this Offer. If, after such good faith effort, the Company cannot
comply with any such applicable laws, this Offer will not be made to (nor will
tenders be accepted from or on behalf of) the Holders of the Notes residing in
such jurisdiction.
-19-
<PAGE>
The Depositary for the Offer is:
The Bank of New York
By Registered or Certified Mail: By Hand Overnight Delivery:
The Bank of New York The Bank of New York
101 Barclay, Floor 7-E 101 Barclay Street
New York, New York 10286 Corporate Trust Services Window
Attention: Enrique Lopez New York, New York 10286
Reorganization Department Attention: Enrique Lopez
Reorganization Department
By Facsimile Transmission:
Attention: Enrique Lopez
Reorganization Department
(212) 815-4699
(For Eligible Institutions Only)
Confirm by Telephone:
(212) 815-6335
For Information Call:
(212) 815-6335
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery or
other materials may be directed to the Depositary at the telephone numbers and
addresses listed above. A Holder may also contact his or her broker, dealer,
commercial bank, trust company or other nominee for assistance concerning this
Offer to Purchase.
<PAGE>
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
TO TENDER
7% CONVERTIBLE SUBORDINATED NOTES DUE 2004
OF FUISZ TECHNOLOGIES LTD.
(NAME CHANGED TO BIOVAIL TECHNOLOGIES LTD.)
PURSUANT TO THE CHANGE OF CONTROL
NOTICE AND OFFER TO PURCHASE
DATED NOVEMBER 16, 1999
- --------------------------------------------------------------------------------
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE CHANGE OF CONTROL
NOTICE AND OFFER TO PURCHASE, THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON DECEMBER 16, 1999, UNLESS
EXTENDED (THE "EXPIRATION DATE"). NOTES TENDERED IN THE OFFER MAY BE
WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand/Overnight Courier
The Bank of New York (For Eligible Institutions Only) 101 Barclay Street
101 Barclay Street (212) 815-4699 Corporate Trust Service
Floor 7E Window, Ground Level
New York, NY 10286 Confirm by Telephone: Attn: Enrique Lopez,
Attn: Enrique Lopez, (212) 815-5789 Reorganization Department (7E)
Reorganization Department
</TABLE>
Delivery of this Letter of Transmittal to an address, or transmission of
instructions via facsimile, other than as set forth above will not constitute
valid delivery. THE INSTRUCTIONS CONTAINED HEREIN AND IN THE OFFER TO PURCHASE
(AS DEFINED BELOW) SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS
COMPLETED.
By execution hereof, the undersigned acknowledges receipt of the Change of
Control Notice and Offer to Purchase, dated November 16, 1999 (as the same may
be amended from time to time, the "Offer to Purchase"), of Biovail Technologies
Ltd. (formerly Fuisz Technologies Ltd.) (the "Company") and this Letter of
Transmittal and instructions hereto (the "Letter of Transmittal"), which
together constitute the Company's offer to purchase (the "Offer") all of the
outstanding 7% Convertible Subordinated Debentures due 2004 of the Company (the
"Notes"), upon the terms and subject to the conditions set forth in the Offer to
Purchase.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE PAYMENT FOR NOTES TO BE
PURCHASED PURSUANT TO THE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR
NOTES TO THE DEPOSITARY PRIOR TO THE EXPIRATION DATE.
<PAGE>
-2-
This Letter of Transmittal is to be used by holders of Notes if
certificates representing Notes are to be physically delivered to the Depositary
herewith by holders of Notes. This Letter of Transmittal is also being supplied
for informational purposes only to persons who hold notes in book-entry form
through the facilities of The Depository Trust Company ("DTC"). Tender of Notes
held through DTC must be made pursuant to the procedures described under
"Procedures for Tendering Notes -- Tendering Notes -- Notes held through DTC" in
the Offer to Purchase.
In order to properly complete this Letter of Transmittal, a holder of Notes
must (i) complete the box entitled "Description of Notes"; (ii) if appropriate,
check and complete the boxes relating to Guaranteed Delivery, Special Issuance
Instructions and Special Delivery Instructions; (iii) sign the Letter of
Transmittal; and (iv) complete Substitute Form W-9. Each holder of Notes should
carefully read the detailed Instructions contained herein prior to completing
this Letter of Transmittal.
The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Offer.
If holders desire to tender Notes pursuant to the Offer and (i)
certificates representing such holder's Notes are not lost but are not
immediately available or time will not permit this Letter of Transmittal,
certificates representing such Notes or other required documents to reach the
Depositary prior to the Expiration Date, or (ii) the procedures for book-entry
transfer cannot be completed prior to the Expiration Date, such holders may
effect a tender of such Notes in accordance with the guaranteed delivery
procedures described under "Procedure for Tendering Notes -- Guaranteed Delivery
Procedures" in the Offer to Purchase. See Instruction 1 below.
All capitalized terms used herein and not defined herein shall have the
meaning ascribed to them in the Offer to Purchase.
Your bank or broker can assist you in completing this form. The
instructions included with this Letter of Transmittal must be followed.
Questions and requests for assistance or for additional copies of the Offer to
Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to The Bank of New York, the Depositary for the Offer. See
Instruction 9 below.
The Company is not aware of any jurisdiction where the making of the Offer
would not be in compliance with applicable laws. If the Company becomes aware of
any jurisdiction where the making of the Offer would not be in compliance with
such laws, the Company will make a good faith effort to comply with any such
laws or seek to have such laws declared inapplicable to the Offer. If after such
good faith effort, the Company cannot comply with any such applicable laws, the
Offer will not be made to, nor will tenders be accepted from or on behalf of,
the holders of Notes residing in such jurisdiction.
<PAGE>
-3-
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL CAREFULLY
BEFORE CHECKING ANY BOX BELOW
List below the Notes to which this Letter of Transmittal relates. If the
space provided below is inadequate, list the certificate numbers and principal
amounts on a separately executed schedule and affix the schedule to this Letter
of Transmittal.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
DESCRIPTION OF NOTES
- --------------------------------------------------------------------------------------------------------
AGGREGATE
PRINCIPAL
NAME(S) AND ADDRESS(ES) OF HOLDER(S) CERTIFICATE AMOUNT PRINCIPAL AMOUNT
(PLEASE FILL IN, IF BLANK) NUMBERS* REPRESENTED** TENDERED**
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
TOTAL PRINCIPAL
AMOUNT OF NOTES
- --------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by Holders tendering by book-entry transfer (see
below).
** Unless otherwise indicated in the column labeled "Principal Amount
Tendered" and subject to the terms and conditions of the Offer to Purchase,
a Holder will be deemed to have tendered the entire aggregate principal
amount represented by the Notes indicated in the column labeled "Aggregate
Principal Amount Represented." See Instruction 2.
/ / CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Holder:
- ---------------------------------------------------------------------------
Window Ticket Number (if any):
- ---------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
- ---------------------------------------------------------------------------
Name of Eligible Institution which Guaranteed Delivery:
- ---------------------------------------------------------------------------
<PAGE>
-4-
LADIES AND GENTLEMEN:
Upon the terms and subject to the conditions of the Offer, the undersigned
hereby tenders to the Company the principal amount of Notes indicated above.
Subject to and effective upon the acceptance for payment of Notes tendered
hereby, by executing and delivering a Letter of Transmittal a tendering holder
of Notes (i) irrevocably sells, assigns and transfers to the Company, all right,
title and interest in and to all the Notes tendered thereby, (ii) waives any and
all rights with respect to the Notes (including without limitation any existing
or past defaults and their consequences in respect of the Note and the Indenture
under which the Notes were issued), (iii) releases and discharges the Company
from any and all claims such holder may have now, or may have in the future
arising out of, or related to, the Notes including without limitation any claims
that such holder is entitled to receive additional principal or interest
payments with respect to the Notes or to participate in any repurchase,
redemption or defeasance of the Notes and (iv) irrevocably constitutes and
appoints the Depositary the true and lawful agent and attorney-in-fact of such
holder with respect to any such tendered Notes, with full power of substitution
and resubstitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest) to (a) deliver certificates representing such
Notes, or transfer ownership of such Notes, on the account books maintained by
DTC, together, in any such case, with all accompanying evidences of transfer and
authenticity, to the Company, (b) present such Notes for transfer on the
relevant security register and (c) receive all benefits or otherwise exercise
all rights of beneficial ownership of such Notes (except that the Depositary
will have no rights to, or control over, funds from the Company, except as agent
for the Company, for the purchase price for any tendered Notes that are
purchased by the Company), all in accordance with the terms of the Offer.
The undersigned understands that tenders of Notes may be withdrawn by
written notice of withdrawal received by the Depositary at any time prior to the
Expiration Date. See Instruction 1.
The undersigned hereby represents and warrants that the undersigned (i)
owns the Notes tendered and is entitled to tender such Notes and (ii) has full
power and authority to tender, sell, assign and transfer the Notes tendered
hereby and that when such Notes are accepted for purchase and payment by the
Company, the Company will acquire good title thereto, free and clear of all
liens, restrictions, charges and encumbrances and not subject to any adverse
claim or right. The undersigned will, upon request, execute and deliver any
additional documents deemed by the Depositary or the Company to be necessary or
desirable to complete the sale, assignment and transfer of the Notes tendered
hereby.
For the purposes of the Offer, the undersigned understands that the Company
will be deemed to have accepted for purchase validly tendered Notes (or
defectively tendered Notes with respect to which the Company has waived such
defect) only if, as and when the Company gives oral or written notice thereof to
the Depositary. Payment for Notes purchased pursuant to the Offer will be made
by deposit of the purchase price for such Notes with the Depositary, which will
act as agent for tendering holders for the purpose of receiving payments from
the Company and transmitting such payments to such holders.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death or incapacity of the undersigned and every
obligation of the undersigned under this Letter of
<PAGE>
-5-
Transmittal shall be binding upon the undersigned's heirs, personal
representatives, executors, administrators, successors, assigns, trustees in
bankruptcy and other legal representatives.
The undersigned understands that valid tender of Notes pursuant to any one
of the procedures described under "Procedures for Tendering Notes" in the Offer
to Purchase and in the instructions hereto will constitute a binding agreement
between the undersigned and the Company upon the terms and subject to the
conditions of the Offer, including the undersigned's waiver of any existing
defaults and their consequences in respect of the Notes and the Indenture
(including, without limitation, a default in the payment of interest).
The undersigned understands that the delivery and surrender of the Notes is
not effective, and the risk of loss of the Notes does not pass to the
Depositary, until receipt by the Depositary of this Letter of Transmittal, or a
facsimile hereof, properly completed and duly executed, together with all
accompanying evidences of authority and any other required documents in form
satisfactory to the Company. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of Notes
pursuant to the procedures described in the Offer to Purchase and the form and
validity (including time of receipt of notices of withdrawal) of all documents
will be determined by the Company, in its sole direction, which determination
shall be final and binding on all parties.
Unless otherwise indicated herein under "Special Issuance Instructions,"
the undersigned hereby requests that any Notes representing principal amounts
not tendered be issued in the name(s) of the undersigned, and checks
constituting payments for Notes purchased in connection with the Offer be issued
to the order of the undersigned. Similarly, unless otherwise indicated herein
under "Special Delivery Instructions," the undersigned hereby requests that any
Notes representing principal amounts not tendered and checks constituting
payments for Notes to be purchased in connection with the Offer be delivered to
the undersigned at the address(es) shown herein. In the event that the "Special
Issuance Instructions" box or the "Special Delivery Instructions" box, or both,
are completed, the undersigned hereby requests that any Notes representing
principal amounts not tendered be issued in the name(s) of, certificates for
such Notes be delivered to, and checks constituting payments for Notes purchased
in connection with the Offer be issued in the name(s) of, and be delivered to,
the person(s) at the address(es) so indicated, as applicable.
<PAGE>
-6-
<TABLE>
<CAPTION>
<S> <C>
- -------------------------------------------------------- ------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 2 through 6) (See Instructions 2 through 6)
To be completed ONLY if any checks and/or any To be completed ONLY if any checks and/or
certificates for Notes in a principal amount not any certificates for Notes in a principal amount not
tendered are to be issued in the name of and sent to tendered are to be sent to someone other than the
someone other than the person(s) whose name(s) undersigned or to the undersigned at an address
appear(s) in the "Description of Notes Tendered" box other than that shown in the "Description of Notes
above. Tendered" box above.
Issue: / / Notes / / Checks Deliver: / / Notes / / Checks
(Complete as applicable) (Complete as applicable)
Name _________________________________________________ Name _______________________________________________
(Please Print) (Please Print)
Address _______________________________________________ Address _____________________________________________
_______________________________________________________ _____________________________________________________
_______________________________________________________ _____________________________________________________
(Include Zip Code) (Include Zip Code)
_______________________________________________________ _____________________________________________________
(Taxpayer Identification or Social Security No.) (Taxpayer Identification or Social Security No.)
(See Substitute Form W-9 Herein) (See Substitute Form W-9 Herein)
</TABLE>
<PAGE>
-7-
HOLDERS WHO WISH TO ACCEPT THE OFFER AND TENDER THEIR NOTES MUST COMPLETE
THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS OF NOTES
PURSUANT TO THE OFFER REGARDLESS OF WHETHER
NOTES ARE BEING PHYSICALLY DELIVERED HEREWITH)
This Letter of Transmittal must be signed by the holder(s) of Notes exactly
as their name(s) appear(s) on certificate(s) for Notes or by person(s)
authorized to become holder(s) by endorsements and documents transmitted with
this Letter of Transmittal. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer or other person acting in a
fiduciary or representative capacity, such person must set forth his or her full
title below under "Capacity" and submit evidence satisfactory to the Company of
such person's authority to so act. See Instruction 3 below.
If the signature appearing below is not of the holder(s) of the Notes, then
the holder(s) must sign a valid power of attorney.
X_______________________________________________________________________________
X_______________________________________________________________________________
Signature(s) of Holder(s) or Authorized Signatory
Date: __________________________________________________________________________
Name(s): _______________________________________________________________________
________________________________________________________________________________
(Please Print)
Capacity: ______________________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
(Including Zip Code)
Area Code and Telephone Number:
Signature Guarantee
(See Instruction 3 Below)
Certain Signatures Must Be Guaranteed by an Eligible Institution.
________________________________________________________________________________
(Name of Eligible Institution Guaranteeing Signatures)
________________________________________________________________________________
(Address (Including Zip Code) and Telephone Number
(Including Area Code) of Firm)
________________________________________________________________________________
(Authorized Signature)
________________________________________________________________________________
(Printed Name)
________________________________________________________________________________
(Title)
Date: ______________________, 1999
<PAGE>
-8-
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Procedures for Tendering Notes; Guaranteed Delivery Procedures;
Withdrawal of Tenders. To tender the Notes in the Offer, certificates
representing such Notes, together with a properly completed and duly executed
copy,(or facsimile) of this Letter of Transmittal, and any other documents
required by this Letter of Transmittal must be received by the Depositary at one
of its addresses set forth herein prior to the Expiration Date. The method of
delivery of this Letter of Transmittal, certificates for Notes and all other
required documents to the Depositary is at the election and risk of holders. If
such delivery is to be made by mail, it is suggested that holders use properly
insured registered mail, return receipt requested, and that the mailing be made
sufficiently in advance of the Expiration Date to permit delivery to the
Depositary prior to such date. Except as otherwise provided below, the delivery
will be deemed made when actually received or confirmed by the Depositary. THIS
LETTER OF TRANSMITTAL AND NOTES SHOULD BE SENT ONLY TO THE DEPOSITARY, AND NOT
TO THE COMPANY.
This Letter of Transmittal is also being supplied for informational
purposes only to persons who hold notes in book-entry form through the
facilities of DTC. Tender of Notes held through DTC must be made pursuant to the
procedures described under "Procedures for Tendering Notes -- Tendering Notes --
Notes held through DTC" in the Offer to Purchase.
Except as provided herein for the book-entry or guaranteed delivery
procedures, unless the Notes being tendered are deposited with the Depositary on
or prior to the Expiration Date (accompanied by the appropriate, properly
completed and duly executed Letter of Transmittal and any required signature
guarantees and other documents required by this Letter of Transmittal), the
Company may, in its sole discretion, reject such tender. Payment for Notes will
be made only against deposit of tendered Notes.
By executing this Letter of Transmittal (or a facsimile thereof), a
tendering holder waives any right to receive any notice of the acceptance for
payment of tendered Notes.
For a full description of the procedures for tendering Notes, see
"Procedures for Tendering Notes -- Tendering Notes" in the Offer to Purchase.
If a holder desires to tender Notes pursuant to the Offer and (i)
certificates representing such holder's Notes are not lost but are not
immediately available or time will not permit this Letter of Transmittal,
certificates representing Notes or other required documents to reach the
Depositary on or prior to the Expiration Date or (ii) the procedures for
book-entry transfer cannot be completed on or prior to the Expiration Date, such
holder may effect a tender of such Notes in accordance with the guaranteed
delivery procedures described under "Procedures for Tendering Notes --
Guaranteed Delivery Procedures" in the Offer to Purchase.
Tenders of Notes may be withdrawn at any time prior to the Expiration Date
pursuant to the procedures described under "Procedures For Tendering Notes --
Withdrawal Rights" in the Offer to Purchase.
<PAGE>
-9-
2. Partial Tenders. Tenders of Notes pursuant to the Offer will be accepted
only in principal amounts equal to $1,000 or integral multiples thereof. If less
than the entire principal amount of any Notes evidenced by a submitted
certificate is tendered, the tendering holder must fill in the principal amount
tendered in the last column of the box entitled "Description of Notes" herein.
The entire principal amount represented by the certificates for all Notes
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated. If the entire principal amount of all Notes is not
tendered, certificates for the principal amount of Notes not tendered will be
sent to the holder unless otherwise provided in the appropriate box on this
Letter of Transmittal (see Instruction 4), promptly after the Notes are accepted
for purchase.
3. Signatures on this Letter of Transmittal, Bond Powers and Endorsement;
Guarantee of Signatures. If this Letter of Transmittal is signed by the
registered holder(s) of the Notes tendered hereby, the signature(s) must
correspond with the name(s) as written on the face of the certificate(s) without
alteration, enlargement or any change whatsoever.
IF THIS LETTER OF TRANSMITTAL IS EXECUTED BY A HOLDER OF NOTES WHO IS NOT
THE REGISTERED HOLDER, THEN THE REGISTERED HOLDER MUST SIGN A VALID POWER OF
ATTORNEY, WITH THE SIGNATURE OF SUCH REGISTERED HOLDER GUARANTEED BY AN ELIGIBLE
INSTITUTION.
If any of the Notes tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal. If any
tendered Notes are registered in different names on several certificates, it
will be necessary to complete, sign and submit as many copies of this Letter of
Transmittal and any necessary accompanying documents as there are different
names in which certificates are held.
If this Letter of Transmittal is signed by the holder, and the certificates
for any principal amount of Notes not tendered for purchase are to be issued (or
if a principal amount of Notes that is not tendered for purchase is to be
reissued or returned) to the holder, and checks constituting payments for Notes
to be purchased in connection with the Offer are to be issued to the order of
the holder, then the holder need not endorse any certificates for tendered Notes
nor provide a separate bond power. In any other case (including if this Letter
of Transmittal is not signed by the holder), the holder must either properly
endorse the certificates for Notes tendered or transmit a separate properly
completed bond power with this Letter of Transmittal (in either case, executed
exactly as the name(s) of the registered holder(s) appear(s) on such Notes),
with the signature on the endorsement or bond power guaranteed by an Eligible
Institution, unless such certificates or bond powers are executed by an Eligible
Institution.
If this Letter of Transmittal or any certificates representing Notes or
bond powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and
proper evidence satisfactory to the Company of their authority so to act must be
submitted with this Letter of Transmittal.
Endorsements on certificates for Notes and signatures on bond powers
provided in accordance with this Instruction 3 by registered holders not
executing this Letter of Transmittal must be guaranteed by an Eligible
Institution.
<PAGE>
-10-
No signature guarantee is required if: (i) this Letter of Transmittal is
signed by the registered holder(s) of the Notes tendered herewith and the
payments for the Notes to be purchased are to be made, or any Notes for
principal amounts not tendered for purchase are to be issued, directly to such
registered holder(s) and neither the "Special Issuance Instructions" box nor the
"Special Delivery Instructions" box of this Letter of Transmittal has been
completed; or (ii) such Notes are tendered for the account of an Eligible
Institution. In all other cases, all signatures on Letters of Transmittal
accompanying Notes must be guaranteed by an Eligible Institution.
4. Special Issuance and Special Delivery Instructions. Tendering holders
should indicate in the applicable box or boxes the name and address to which
Notes for principal amounts not tendered or not accepted for purchase or checks
constituting payments for Notes to be purchased in connection with the Offer are
to be issued or sent, if different from the name and address of the holder
signing this Letter of Transmittal. In the case of issuance in a different name,
the taxpayer identification or social security number of the person named must
also be indicated. If no instructions are given, Notes not tendered or not
accepted for purchase will be returned to the holder of the Notes tendered.
5. Taxpayer Identification Number and Substitute Form W-9. Each tendering
holder is required to provide the Depositary with the holder's correct taxpayer
identification number ("TIN"), generally the holder's social security or federal
employer identification number, on Substitute Form W-9, which is provided under
"Important Tax Information" below, or, alternatively, to establish another basis
for exemption from backup withholding. A holder must cross out item (2) in the
Certification box on Substitute Form W-9 if such holder is subject to backup
withholding. Failure to provide the information on the form may subject the
tendering holder to 31% federal income tax backup withholding on the payments
made to the holder or other payee with respect to Notes purchased pursuant to
the Offer. The box in Part 3 of the form should be checked if the tendering
holder has not been issued a TIN and has applied for a TIN or intends to apply
for a TIN in the near future. If the box in Part 3 is checked and the Depositary
is not provided with a TIN within 60 days, thereafter the Depositary will
withhold 31% from all such payments with respect to the Notes to be purchased
until a TIN is provided to the Depositary.
6. Transfer Taxes. The Company will pay all transfer taxes, if any, payable
on the purchase and transfer of Notes purchased pursuant to the Offer, except in
the case of deliveries of certificates for Notes for principal amounts not
tendered for payment that are to be registered or issued in the name of any
person other than the holder of Notes tendered hereby, in which case the amount
of any transfer taxes (whether imposed on the registered holder or such other
person) payable on account of the transfer to such person will be deducted from
the purchase price unless satisfactory evidence of the payment of such taxes or
exemption therefrom is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer stamps to be affixed to the certificates listed in this Letter of
Transmittal.
7. Irregularities. All questions as to the validity, form, eligibility
(including the time of receipt) and acceptance for payment of any tenders of
Notes pursuant to the procedures described in the Offer to Purchase and the form
and validity (including the time of receipt of notices of withdrawal) of all
documents will be determined by the Company, in its sole discretion, which
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any or
<PAGE>
-11-
all tenders determined by it not to be in proper form or the acceptance of or
payment for which may be unlawful. The Company also reserves the absolute right
to waive any of the conditions of the Offer and any defect or irregularity in
the tender of any particular Notes. The Company's interpretations of the terms
and conditions of the Offer (including without limitation the instructions in
this Letter of Transmittal) shall be final and binding. No alternative,
conditional or contingent tenders will be accepted. Unless waived, any
irregularities in connection with tenders must be cured within such time as the
Company shall determine. None of the Company, the Depositary or any other person
will be under any duty to give notification of any defects or irregularities in
such tenders or will incur any liability to holders for failure to give such
notification. Tenders of such Notes shall not be deemed to have been made until
such irregularities have been cured or waived. Any Notes received by the
Depositary that are not properly tendered and as to which the irregularities
have not been cured or waived will be returned by the Depositary to the
tendering holders, unless such holders have otherwise provided herein, as
promptly as practical following the Expiration Date.
8. Mutilated, Lost, Stolen or Destroyed Certificates for Notes. Any holder
of Notes whose certificates for Notes have been mutilated, lost, stolen or
destroyed should contact the Depositary for further instruction at the address
or telephone numbers included herein.
9. Requests for Assistance or Additional Copies. Questions relating to the
procedure for tendering Notes and requests for assistance or additional copies
of the Offer to Purchase and this Letter of Transmittal may be directed to, and
additional information about the Offer may be obtained from the Depositary,
whose address and telephone number appears herein.
IMPORTANT TAX INFORMATION
Under federal income tax laws, a holder whose tendered Notes are accepted
for payment is required by law to provide the Depositary (as payer) with such
holder's correct TIN on Substitute Form W-9 included herein or otherwise
establish a basis for exemption from backup withholding. If such holder is an
individual, the TIN is his social security number. If the Depositary is not
provided with the correct TIN, a penalty may be imposed by the Internal Revenue
Service, and payments made with respect to Notes purchased pursuant to the Offer
may be subject to backup withholding. Failure to comply truthfully with the
backup withholding requirements also may result in the imposition of severe
criminal and/or civil fines and penalties.
Certain holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt holders should furnish their TIN, write "Exempt" on the
face of the Substitute Form W-9, and sign, date and return the Substitute Form
W-9 to the Depositary. A foreign person, including a foreign entity, may qualify
as an exempt recipient by submitting to the Depositary a properly completed
Internal Revenue Service Form W-8, signed under penalties of perjury, attesting
to that holder's foreign status. A Form W-8 can be obtained from the Depositary.
See the enclosed "Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9" for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the holder or other payee. Backup withholding is not an
additional federal income tax. Rather, the federal income tax liability of
persons subject to backup withholding will be reduced by
<PAGE>
-12-
the amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to Notes
purchased pursuant to the Offer, the holder is required to provide the
Depositary with either: (i) the holder's correct TIN by completing the form
included herein, certifying that the TIN provided on Substitute Form W-9 is
correct (or that such holder is awaiting a TIN) and that (A) the holder has not
been notified by the Internal Revenue Service that the holder is subject to
backup withholding as a result of failure to report all interest or dividends or
(B) the Internal Revenue Service has notified the holder that the holder is no
longer subject to backup withholding; or (ii) an adequate basis for exemption.
NUMBER TO GIVE THE DEPOSITARY
The holder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the registered holder of
the Notes. If the Notes are held in more than one name or are held not in the
name of the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report.
<PAGE>
-13-
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: THE BANK OF NEW YORK, AS DEPOSITARY
- -------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1: PLEASE PROVIDE YOUR TIN IN THE BOX __________________________
FORM W-9 TO THE RIGHT AND CERTIFY BY SIGNING AND Social Security Number
DATING BELOW OR
--------------------------
Employer
Identification No.
- ------------------------------------- --------------------------------------------- -------------------------------
PAYER'S REQUEST FOR PART 2: For Payees NOT subject to backup withholding, see the enclosed
TAXPAYER IDENTIFICATION Guidelines for Certification of Taxpayer Identification Number on
NUMBER (TIN) Substitute Form W-9 and complete as instructed therein.
-----------------------------------------------------------------------------
PART 3: Awaiting TIN / /
- ------------------------------------- -----------------------------------------------------------------------------
CERTIFICATION. Under penalties of perjury, I certify that (1) the number above
on this form is my correct Taxpayer Identification Number (or I am waiting for a
number to be issued to me) and (2) I am not subject to backup withholding either
because (a) I am exempt from backup withholding or (b) I have not been notified
by the IRS that I am subject to backup withholding as a result of a failure to
report all interest or dividends, or (c) the IRS has notified me that I am no
longer subject to backup withholding.
Certification Instructions. You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding, you received
another notification from the IRS that you are no longer subject to backup
withholding, do not cross out item (2). (Also see the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9)
- -------------------------------------------------------------------------------------------------------------------
SIGNATURE ___________________________________________ DATE __________________________________
NAME ____________________________________________________________________________________________
(Please Print)
ADDRESS _________________________________________________________________________________________
_________________________________________________________________________________________
(Include Zip Code)
- -------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER
AND THE SOLICITATION. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate IRS Center or
Social Security Administration Office or (b) I intend to mail or deliver an
application in the near future. I understand that if I do not provide a taxpayer
identification number within sixty (60) days, 31% of all reportable payments
made to me thereafter will be withheld until I provide a taxpayer identification
number.
________________________________________________________________________________
Signature
________________________________________________________________________________
Date
________________________________________________________________________________
Name (Please Print)
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
-14-
Facsimile copies of this Letter of Transmittal, properly completed and duly
executed, will be accepted. This Letter of Transmittal, certificates for the
Notes and any other required documents should be sent or delivered by each
holder of Notes or such person's broker, dealer, commercial bank or other
nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
THE BANK OF NEW YORK
By Mail:
101 Barclay Street
Floor 7E
New York, New York 10286
Attn: Enrique Lopez, Reorganization Department
By Facsimile Transmission:
(212) 815-4699
Confirm by telephone:
(212) 815-5789
By Hand or Overnight Delivery:
101 Barclay Street
Corporate Trust Service
Window, Ground Level
Attn: Enrique Lopez, Reorganization Department
Any questions or requests for assistance may be directed to the Depositary
at the telephone numbers and location listed above. Additional copies of this
Letter of Transmittal, the Offer to Purchase and the Notice of Guaranteed
Delivery may be obtained from the Depositary at its address and telephone
numbers set forth above. You may also contact your broker, dealer, commercial
bank or trust company or nominee for assistance concerning the Offer.
<PAGE>
EXHIBIT (a)3)
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF CERTIFICATES FOR
7% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2004
OF
FUISZ TECHNOLOGIES LTD.
(NAME CHANGED TO BIOVAIL TECHNOLOGIES LTD.)
Capitalized terms used but not defined herein have the meanings given them
in the Change of Control Notice and Offer to Purchase, dated November 16, 1999
(the "Offer to Purchase").
This Notice of Guaranteed Delivery may be used to cause a tender of 7%
Convertible Subordinated Debentures due 2004 of Biovail Technonogies Ltd.
(formerly Fuisz Technologies Ltd.) (the "Notes") by (i) a record holder of Notes
if certificates for the Notes are not immediately available or time will not
permit all required documents to reach the Depositary on or prior to the
Expiration Date or (ii) by a DTC Participant if the procedures for book-entry
transfer described in the Offer to Purchase cannot be completed on a timely
basis.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand/Overnight:
The Bank of New York (For Eligible Institutions Only) The Bank of New York
101 Barclay Street (212) 815-4699 101 Barclay Street
Floor 7E Corporate Trust Service
New York, NY 10286 Confirm by Telephone: Window, Ground Level
Attn: Enrique Lopez, Reorganization (212) 815-5789 Attn: Enrique Lopez,
Department Reorganization Department (7E)
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
- --------------------------------------------------------------------------------
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
DECEMBER 16, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). NOTES TENDERED IN
THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
<PAGE>
-2-
LADIES AND GENTLEMEN:
By execution hereof, the undersigned acknowledges receipt of the Offer to
Purchase and the Letter of Transmittal. On the terms and subject to the
conditions of the Offer to Purchase and the Letter of Transmittal, the
undersigned hereby represents that it is the holder of the Notes (or the holder
of interests in the Global Note) being tendered (or caused to be tendered)
hereby and is entitled to tender (or cause to be tendered) such Notes as
contemplated by the Offer and, pursuant to the guaranteed delivery procedures
described in the Offer to Purchase and Letter of Transmittal, hereby tenders (or
causes a tender) to the Company of the aggregate principal amount of Notes
indicated below.
Except as stated in the Offer to Purchase, all authority herein conferred
or agreed to be conferred shall survive the death or incapacity of the
undersigned, and any obligation of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned.
A record holder must execute this Notice of Guaranteed Delivery exactly as
its name appears on its Notes and a DTC Participant must execute this Notice of
Guaranteed Delivery exactly as its name is registered with DTC. If signature is
by a trustee, executor, administrator, guardian, attorney-in-fact, agent,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person must set forth his or her name, address and capacity as
indicated below and submit evidence to the Company of such person's authority so
to act.
Signed:
- --------------------------------------------------------------------------------
Name(s):
- --------------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Company:
- --------------------------------------------------------------------------------
Capacity:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
Dated:
- --------------------------------------------------------------------------------
Aggregate Principal
Amount of Notes Tendered:
- --------------------------------------------------------------------------------
Certificate Nos. for
Notes (if applicable):
If being executed by a DTC Participant:
DTC Participant's Number:
- --------------------------------------------------------------------------------
Account Number:
- --------------------------------------------------------------------------------
Transaction Code Number:
- --------------------------------------------------------------------------------
THE GUARANTEE ON THE NEXT PAGE MUST BE COMPLETED
<PAGE>
-3-
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a member of a registered national securities exchange or
of the National Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United States or another
"Eligible Guarantor Institution" as defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended, hereby guarantees that, within three New York
Stock Exchange trading days from the date of receipt by the Depositary of this
Notice of Guaranteed Delivery, a properly completed and validly executed Letter
of Transmittal (or a facsimile thereof), together with Notes tendered hereby in
proper form for transfer (or confirmation of the book-entry transfer of such
Notes into the Depositary's account at the Depositary Trust Company, pursuant to
the procedures for book-entry transfer set forth under "Procedure for Tendering
Notes" in the Offer to Purchase), and all other required documents will be
delivered by the undersigned to the Depositary.
<TABLE>
<CAPTION>
<S> <C>
Name of Firm: _____________________________ ____________________________________________
Authorized Signature
Address: __________________________________ Name: _____________________________________
(Please Type or Print)
____________________________________________ Title: ____________________________________
Zip Code
Date: _____________________________________
Area Code and
Telephone No.: ____________________________
</TABLE>
The institution which completes this form must deliver to the Depositary
the guarantee, the Letter of Transmittal (or facsimile thereof) and certificates
for Notes within the time periods specified herein. Failure to do so could
result in a financial loss to such institution.
DO NOT SEND CERTIFICATES FOR NOTES WITH THIS FORM -- THEY SHOULD BE SENT WITH
THE LETTER OF TRANSMITTAL.
<PAGE>
EXHIBIT (a)(4)
Fuisz Technologies Ltd.
OFFER TO PURCHASE
FOR CASH ANY AND ALL OF THE OUTSTANDING
7% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2004
OF FUISZ TECHNOLOGIES LTD.
(NAME CHANGED TO BIOVAIL TECHNOLOGIES LTD.)
AT 100% OF THE PRINCIPAL AMOUNT
OF THE NOTES
- --------------------------------------------------------------------------------
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE CHANGE OF CONTROL NOTICE
AND OFFER TO PURCHASE, THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON DECEMBER 16, 1999, UNLESS EXTENDED (THE "EXPIRATION
DATE"). NOTES TENDERED IN THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE
EXPIRATION DATE.
- --------------------------------------------------------------------------------
November 16, 1999
To Our Clients:
Enclosed for your consideration is a Change of Control Notice and Offer to
Purchase, dated November 16, 1999 (as the same may be amended from time to time,
the "Offer to Purchase"), and a Letter of Transmittal and instructions thereto
(the "Letter of Transmittal"), relating to the offer (the "Offer") by Biovail
Technologies Ltd. (formerly Fuisz Technologies Ltd.) (the "Company") to purchase
for cash all of its outstanding 7% Convertible Subordinated Debentures due 2004
(the "Notes") at 100% of the principal amount thereof, plus accrued and unpaid
interest thereon up to but excluding the date of payment.
The materials are being forwarded to you as the beneficial owner of Notes
carried by us for your account or benefit but not registered in your name. A
tender of any Notes may only be made by us as the registered holder and pursuant
to your instructions.
Accordingly, we request instructions as to whether you wish us to tender
any or all such Notes held by us for your account or benefit pursuant to the
terms and conditions set forth in the Offer to Purchase and the Letter of
Transmittal. We urge you to read carefully the Offer to Purchase and Letter of
Transmittal before instructing us to tender your Notes.
Your instructions to us should be forwarded as promptly as possible in
order to permit us to tender Notes on your behalf in accordance with the
provisions of the Offer. Notes tendered pursuant to the Offer may be validly
withdrawn, subject to the procedures described in the Offer to Purchase, at any
time prior to the Expiration Date.
Your attention is directed to the following:
1. The Offer is for all outstanding Notes.
2. The Offer will expire on the Expiration Date.
<PAGE>
-2-
3. Any transfer taxes incident to the transfer of Notes from the
tendering holder to the Company will be paid by the Company, except as
provided in the Offer to Purchase and the instructions to the Letter
of Transmittal.
If you wish to have us tender any or all of your Notes held by us for your
account or benefit, please so instruct us by completing, executing and returning
to us the instruction form that appears below. If you authorize the tender of
your Notes, all such Notes will be tendered unless otherwise specified below.
The accompanying Letter of Transmittal is furnished to you for informational
purposes only and may not be used by you to tender Notes held by us and
registered in our name for your account or benefit.
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Offer.
This will instruct you to tender the principal amount of Notes indicated
below held by you for the account or benefit of the undersigned pursuant to the
terms of and conditions set forth in the Offer to Purchase and the Letter of
Transmittal.
Box 1 / / Please tender ALL my Notes held by you for my account or benefit.
Box 2 / / Please tender LESS than all my Notes. I wish to tender $________
principal amount of Notes (tenders must be in increments of $1,000
principal amount).
Box 3 / / Please do not tender any Notes held by you for my account or benefit.
Date:
- --------------------------------------------------------------------------------
Signature:
- --------------------------------------------------------------------------------
Name (please print):
- --------------------------------------------------------------------------------
UNLESS A SPECIFIC CONTRARY INSTRUCTION IS GIVEN, YOUR SIGNATURE(S) HEREON SHALL
CONSTITUTE AN INSTRUCTION TO US TO TENDER ALL OF YOUR NOTES.
<PAGE>
EXHIBIT (a)(5)
Fuisz Technologies Ltd.
OFFER TO PURCHASE
FOR CASH ANY AND ALL OF THE OUTSTANDING
7% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2004
OF FUISZ TECHNOLOGIES LTD.
(NAME CHANGED TO BIOVAIL TECHNOLOGIES LTD.)
AT 100% OF THE PRINCIPAL AMOUNT OF THE NOTES
- --------------------------------------------------------------------------------
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE CHANGE OF CONTROL NOTICE
AND OFFER TO PURCHASE, THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON DECEMBER 16, 1999, UNLESS EXTENDED (THE "EXPIRATION
DATE"). NOTES TENDERED IN THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE
EXPIRATION DATE.
- --------------------------------------------------------------------------------
November 16, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Enclosed for your consideration is a Change of Control Notice and Offer to
Purchase, dated November 16, 1999 (as the same may be amended from time to time,
the "Offer to Purchase"), and a form of Letter of Transmittal and instructions
thereto (the "Letter of Transmittal") relating to the offer (the "Offer") by
Biovail Technologies Ltd. (formerly Fuisz Technologies Ltd.) (the "Company") to
purchase for cash all of the outstanding 7% Convertible Subordinated Debentures
due 2004 of the Company (the "Notes") at 100% of the principal amount thereof,
plus accrued and unpaid interest thereon up to but excluding the date of
payment.
We are asking you to contact your clients for whom you hold Notes
registered in your name or in the name of your nominee. In addition, we ask you
to contact your clients who, to your knowledge, hold Notes registered in their
own name. You will be reimbursed by the Company for customary mailing and
handling expenses incurred by you in forwarding any of the enclosed materials to
your clients. The Company will pay all transfer taxes, if any, applicable to the
tender of Notes, except as otherwise provided in the Offer to Purchase and the
Letter of Transmittal.
Enclosed is a copy of each of the following documents for forwarding to
your clients:
1. The Offer to Purchase.
2. A Letter of Transmittal, including Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9, for your use in
connection with the tender of Notes by record holders and for the
information of your clients.
3. A form of letter addressed "To Our Clients" that may be sent to your
clients for whose accounts you hold Notes registered in your name or
the name of your nominee, with space provided for obtaining the
clients' instructions with regard to the Offer.
4. A Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Notes are not lost but not immediately available, or
if the procedure for book-entry transfer cannot be completed on or
prior to the Expiration Date.
<PAGE>
-2-
5. A return envelope addressed to The Bank of New York, the depositary
(the "Depositary").
Your prompt action is requested. Notes tendered pursuant to the Offer may
be validly withdrawn, subject to the procedures described in the Offer to
Purchase, at any time prior to the Expiration Date.
Please refer to "Procedures for Tendering Notes" in the Offer to Purchase
for a description of the procedures which must be followed to tender Notes in
the Offer.
Additional copies of the enclosed materials may be obtained from The Bank
of New York the Depositary for the Offer, at (212) 815-5789.
Very truly yours,
BIOVAIL TECHNOLOGIES LTD.
(Formerly Fuisz Technologies Ltd.)
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY, THE TRUSTEE, OR THE DEPOSITARY, OR AUTHORIZE
YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH
RESPECT TO THE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE OFFER TO
PURCHASE OR THE LETTER OF TRANSMITTAL.
<PAGE>
EXHIBIT (c)(2)
--------------------
SUPPLEMENTAL INDENTURE
Dated as of November 12, 1999
to
INDENTURE
Dated as of October 22, 1997
among
Fuisz Technologies Ltd., as Issuer,
and
The Bank of New York, as Trustee
--------------------
7% Convertible Subordinated Debentures due 2004
<PAGE>
SUPPLEMENTAL INDENTURE, dated as of November 12, 1999 (the "Supplemental
Indenture"), among Fuisz Technologies Ltd., a corporation organized under the
laws of the State of Delaware (the "Company) and The Bank of New York, a New
York banking corporation, as Trustee (the "Trustee"). Capitalized terms used
herein but not defined shall have the meanings assigned to them in the
Indenture.
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an Indenture dated as of October 22, 1997 (the "Indenture") providing for the
issuance of its 7% Convertible Subordinated Debentures due 2004 (the
"Securities"); and
WHEREAS, subsequent to the execution of the Indenture and the issuance of
the Securities, the Company has entered into that certain Amended and Restated
Agreement and Plan of Merger, dated as of July 25, 1999 (the "Merger Agreement")
by and among the Company, Biovail Corporation International ("Biovail") and ABCI
Acquisition Sub. Corporation ("ABCI") pursuant to which (i) ABCI will merge with
and into the Company with the Company as the surviving entity (the "Merger");
(ii) each holder of Common Stock (other than Biovail and its subsidiaries) will
become entitled to receive .1197 of a share of Biovail for each share of Common
Stock held by such holder; and (iii) each share of ABCI will convert into one
share of the Company such that Biovail will become the holder of all of the
outstanding common stock of the Company; and
WHEREAS, pursuant to and as contemplated by Section 1311 of the Indenture,
the parties hereto desire to execute and deliver this Supplemental Indenture for
the purpose of providing for the conversion of the Securities as provided herein
and therein.
NOW, THEREFORE, in consideration of the above premises, each party agrees,
for the benefit of the other and for the equal and ratable benefit of the
Holders of the Securities, as follows:
I.
Conversion of the Securities
A. Conversion Privilege.
Notwithstanding the provisions of Article Thirteen of the Indenture, the
Holder of each Security Outstanding shall hereafter have the right, during the
period such Security shall be convertible as specified in Section 1301 of the
Indenture, to convert such Security only into the kind and amount of securities
receivable upon the Merger pursuant to the Merger Agreement by
<PAGE>
-2-
the holder of a number of shares of Common Stock into which such Security might
have been converted immediately prior to the Merger, assuming such holder of
Common Stock is not a Constituent Person or an Affiliate of a Constituent
Person.
B. Adjustments for Subsequent Events.
The conversion provided for in Section I.A shall be adjusted for events
subsequent to the date of this Supplemental Indenture in a manner as nearly
equivalent as may be practicable to the adjustments provided for in Article 13
of the Indenture.
II.
MISCELLANEOUS PROVISIONS
A. Indenture.
Except as expressly amended by this Supplemental Indenture, the Indenture
is in all respects ratified and confirmed, and all the terms, conditions and
provisions thereof shall remain in full force and effect. All provisions of this
Supplemental Indenture shall be deemed to be incorporated in, and made a part of
the Indenture and the Indenture as supplemented by this Supplemental Indenture
shall be read, taken and construed as one and the same instrument for all
purposes.
B. Trustee Not Responsible for Recitals.
The recitals contained herein shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness, except
for the recital indicating the Trustee's approval of the form of this
Supplemental Indenture.
C. Governing Law.
THIS SUPPLEMENTAL INDENTURE, EXCEPT AS MAY OTHERWISE BE REQUIRED BY
MANDATORY PROVISIONS OF LAW, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS THEREOF.
D. Duplicate Originals.
The parties may sign any number of counterparts of this Supplemental
Indenture either manually or by facsimile. Each signed copy shall be an
original, but all of them together represent the same agreement.
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.
FUISZ TECHNOLOGIES LTD.
By: /s/ Stephen H. Willard
----------------------------------
Name: Stephen H. Willard
Title: Executive Vice President
<PAGE>
-2-
Trustee:
THE BANK OF NEW YORK,
as Trustee
By: /s/ Van K. Brown
----------------------------------
Name: Van K. Brown
Title: Assistant Vice President
