0001104659-10-062185.txt : 20101210 0001104659-10-062185.hdr.sgml : 20101210 20101210170715 ACCESSION NUMBER: 0001104659-10-062185 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20101206 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20101210 DATE AS OF CHANGE: 20101210 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CEPHALON INC CENTRAL INDEX KEY: 0000873364 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 232484489 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19119 FILM NUMBER: 101245716 BUSINESS ADDRESS: STREET 1: 41 MOORES ROAD CITY: FRAZER STATE: PA ZIP: 19355 BUSINESS PHONE: 6103440200 MAIL ADDRESS: STREET 1: 41 MOORES ROAD CITY: FRAZER STATE: PA ZIP: 19355 8-K 1 a10-22832_18k.htm 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported) December 6, 2010

Cephalon, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	0-19119	23-2484489
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)

41 Moores Road
Frazer, Pennsylvania		19355
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code (610) 344-0200

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

(a) On December 7, 2010, Cephalon, Inc. (the “Company”) and Mesoblast Limited, an Australian company listed on the Australian Securities Exchange (“Mesoblast”), issued a press release announcing that the Company and Mesoblast have entered into a strategic alliance, pursuant to the following agreements:

· Under the terms of the Stock Purchase Agreement by and among Cephalon International Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Cephalon International”), Angioblast Systems Inc., a Delaware corporation and a wholly-owned subsidiary of Mesoblast (“Angioblast”), and certain stockholders of Angioblast, Cephalon International purchased an equity interest in Angioblast for US$133.9 million that was thereafter converted in connection with the previously announced merger of Angioblast and Mesoblast (which was consummated on December 7, 2010) into the right to receive ordinary shares of Mesoblast (the “Merger Shares”) representing an approximately 13% equity interest in Mesoblast (assuming that Angioblast equityholders elect to receive the maximum number of shares possible in the Merger).

· Under the terms of the Subscription Deed (the “Subscription Deed”) by and between Cephalon International and Mesoblast, Mesoblast will issue to Cephalon International the number of Mesoblast ordinary shares (the “Top Up Shares”) necessary for Cephalon International to own, when added to the Merger Shares, a 19.99% equity interest in Mesoblast’s outstanding ordinary shares at a price of A$4.35 (provided that Cephalon International shall not be required to pay more than A$110,601,295 in total for the Top Up Shares). The issuance of the Top Up Shares is conditioned on Mesoblast shareholder approval and certain other regulatory approvals. The Company anticipates the issuance of the Top Up Shares will occur in the first quarter of 2011. Pursuant to the Subscription Deed, Cephalon has entered into a standstill agreement to limit its investment to 19.99% of Mesoblast’s outstanding ordinary shares until December 7, 2011, with a right to maintain its equity interest in Mesoblast at 19.9% on a top up basis, subject to the Australian Securities Exchange rules. The Company’s Chief Operating Officer J. Kevin Buchi will join the Mesoblast Board of Directors, effective immediately.

· Under the terms of the Development and Commercialization Agreement (the “Development Agreement”) between the Company and Angioblast, the Company has the exclusive, worldwide rights to develop and commercialize products derived from Angioblast’s proprietary adult mesenchymal precursor cells technology for augmenting hematopoietic stem cell transplantation in cancer patients and for the treatment of certain cardiovascular diseases (congestive heart failure and acute myocardial infarction, angina and peripheral vascular disease/critical limb ischemia), and neurodegenerative disease (including stroke, multiple sclerosis, Parkinson’s disease, Huntington’s disease and Alzheimer’s disease) . The Company paid Angioblast an upfront fee of US$100 million and will pay an additional fee of US$30 million upon the satisfaction of the conditions (including Mesoblast stockholder approval) to Mesoblast’s issuance of the Top Up Shares. Angioblast may also receive regulatory approval milestones totaling up to US$1.7 billion. Angioblast will be responsible for the conduct and expenses of certain Phase IIa clinical trials and commercial supply of the products. The Company will be responsible for the conduct and expenses of all Phase IIb and III clinical trials and subsequent commercialization of the products. Mesoblast will retain all manufacturing rights and will receive a royalty based on net sales of products (the royalty includes any cost of Angioblast’s supply of products to the Company). The Development Agreement also provides that Angioblast can terminate the Development Agreement in part to recover rights to the product with respect to certain indications and territories if the Company fails to engage in certain efforts with respect to clinical development .

The Company hereby incorporates by reference the press release dated December 7, 2010, attached hereto as Exhibit 99.1(a), and made a part of this Item 1.01 (a).

(b) Effective December 7, 2010, the Company entered into the Sixth Amendment (the “Amendment”) to the Credit Agreement dated as of August 15, 2008, among the Company, the lenders named in the Credit Agreement and JPMorgan Chase Bank, N.A., as administrative agent, as amended by that certain First Amendment

to the Credit Agreement effective November 21, 2008, that certain Second Amendment to the Credit Agreement dated as of February 27, 2009, that certain Third Amendment to the Credit Agreement dated as of May 21, 2009, that certain Fourth Amendment to the Credit Agreement dated as of December 22, 2009 and that certain Fifth Amendment to the Credit Agreement dated as of March 22, 2010 (the “Credit Agreement”). The purpose of the Amendment is to provide that the Company’s transactions with Mesoblast and Angioblast described above are permitted under the Credit Agreement.

The foregoing is qualified in its entirety by the full text of the Amendment, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference

Item 8.01 Other Events

On December 6, 2010, the Company issued a press release regarding Frank Baldino, Jr., Ph.D., the Company’s Chairman and Chief Executive Officer.

The Company hereby incorporates by reference the press release dated December 6, 2010, attached hereto as Exhibit 99.1(b), and made a part of this Item 8.01.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description of Exhibit

10.1		Sixth Amendment dated as of December 7, 2010 to the Credit Agreement dated as of August 15, 2008 among Cephalon, Inc., the lenders named therein, JPMorgan Chase Bank, N.A., as administrative agent, Deutsche Bank Securities Inc. and Bank of America N.A., as co-syndication agents, Wachovia Bank, N.A. and Barclays Bank plc, as co-documentation agents, and J.P. Morgan Securities Inc., Deutsche Bank Securities Inc. and Banc of America Securities LLC, as joint bookrunners and joint lead arrangers

99.1(a)		Press Release of Cephalon, Inc. and Mesoblast Limited dated December 7, 2010

99.1(b)		Press Release of Cephalon, Inc. dated December 6, 2010

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CEPHALON, INC.


Date: December 10, 2010	By:	/s/ J. Kevin Buchi
		J. Kevin Buchi
		Chief Operating Officer

EXHIBIT INDEX

Exhibit No.		Description of Exhibit

10.1		Sixth Amendment dated as of December 7, 2010 to the Credit Agreement dated as of August 15, 2008 among Cephalon, Inc., the lenders named therein, JPMorgan Chase Bank, N.A., as administrative agent, Deutsche Bank Securities Inc. and Bank of America N.A., as co-syndication agents, Wachovia Bank, N.A. and Barclays Bank plc, as co-documentation agents, and J.P. Morgan Securities Inc., Deutsche Bank Securities Inc. and Banc of America Securities LLC, as joint bookrunners and joint lead arrangers

99.1(a)		Press Release of Cephalon, Inc. and Mesoblast Limited dated December 7, 2010

99.1(b)		Press Release of Cephalon, Inc. dated December 6, 2010

EX-10.1 2 a10-22832_1ex10d1.htm EX-10.1

Exhibit 10.1

EXECUTION VERSION

SIXTH AMENDMENT dated as of December 7, 2010 (this “Amendment”), to the CREDIT AGREEMENT dated as of August 15, 2008, as heretofore amended (as so amended, the “Credit Agreement”), among CEPHALON, INC., a Delaware corporation, the LENDERS party thereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

WHEREAS, the Lenders have agreed to extend credit to the Borrower under the Credit Agreement on the terms and subject to the conditions set forth therein; and

WHEREAS, the Borrower has requested that the Lenders amend certain provisions of the Credit Agreement, and the Lenders whose signatures appear below, constituting at least the Required Lenders, are willing to amend the Credit Agreement on the terms and subject to the conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1. Defined Terms. Capitalized terms used but not otherwise defined herein (including in the recitals hereto) have the meanings assigned to them in the Credit Agreement.

SECTION 2. Amendments to the Credit Agreement. (a) Section 1.01 of the Credit Agreement is hereby amended by inserting in the appropriate alphabetical place the following new defined term:

“Specified Investment” means (a) the purchase or other acquisition by the Borrower or any Subsidiary (in a single transaction or a series of related transactions) (i) resulting in ownership by the Borrower or any Subsidiary of up to 20% of the common Equity Interests in a Person identified as “Martin” (the “Target”) for up to $300,000,000 and (ii) of an exclusive license to use the Target’s or an Affiliate of Target’s technology platform to develop products in therapeutic areas of interest to Cephalon for up to $150,000,000, (b) any capital contributions or loans or advances by the Borrower or any Subsidiary to any Subsidiary of the funds to make the investments referred to in clause (a), and (c) any subsequent transfer of Equity Interests in the Target or the exclusive license referred to in clause (a)(ii) above from the Borrower or any Subsidiary to any Subsidiary; provided that the definitive documentation for the transactions referred to in clause (a) above shall have been executed and delivered on or prior to January 31, 2011, and, at the time of and immediately after giving effect to any such transactions, (x) no Default shall have occurred and be continuing and (y) the Borrower shall be in compliance with the covenants set forth in Sections 6.12, 6.13 and 6.14, in each case determined on a pro forma basis in a manner consistent with Section 1.04(b) solely to give effect to the incurrence of

Indebtedness, if any, by the Borrower or any Subsidiary in connection with such transactions.

(b) Section 6.04 of the Credit Agreement is hereby amended by (i) deleting the “and” at the end of clause (z), (ii) replacing the period at the end of clause (aa) with “; and” and (iii) adding the following new clause:

(bb) the Specified Investment.

SECTION 3. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and to each of the Lenders, as of the Amendment Effective Date (as defined below), that:

(a) The execution, delivery and performance by the Borrower of this Amendment have been duly authorized by all necessary corporate or other organizational and, if required, stockholder or other equityholder action. This Amendment has been duly executed and delivered by the Borrower and this Amendment and the Credit Agreement, as amended by this Amendment, constitute legal, valid and binding obligations of the Borrower, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors’ rights generally and to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

(b) The representations and warranties of the Borrower and the Subsidiary Loan Parties set forth in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the Amendment Effective Date, except in the case of any such representation or warranty that expressly relates to an earlier date, in which case such representation or warranty is true and correct in all material respects on and as of such earlier date.

(c) On and as of the Amendment Effective Date, after giving effect to this Amendment, no Default has occurred and is continuing.

SECTION 4. Effectiveness. This Amendment shall become effective, as of the date first above written, on the date (the “Amendment Effective Date”) on which the Administrative Agent shall have received duly executed counterparts hereof that, when taken together, bear the authorized signatures of the Borrower and Lenders constituting at least the Required Lenders, provided that the Administrative Agent shall have received all fees and other amounts due and payable to it or any of its Affiliates on or prior to the Amendment Effective Date, including reimbursement of all reasonable and documented out-of-pocket expenses (including fees, charges and disbursements of counsel) required to be reimbursed by the Borrower under the Credit Agreement.

SECTION 5. Effect of Amendment. (a) Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders or the Administrative Agent under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants

or agreements contained in the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle any Loan Party to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document in similar or different circumstances.

(b) On and after the Amendment Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or words of like import, and each reference to the Credit Agreement in any other Loan Document shall be deemed to be a reference to the Credit Agreement as amended hereby. This Amendment shall constitute a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents.

SECTION 6. Applicable Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

SECTION 7. Counterparts. This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original but all of which, when taken together, shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or other electronic imaging shall be as effective as delivery of a manually executed counterpart of this Amendment.

SECTION 8. Severability. Any provision of this Amendment held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9. Headings. The Section headings used herein are for convenience of reference only, are not part of this Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Amendment.

SECTION 10. Administrative Agent’s Expenses. Without limiting the Borrower’s obligations under Section 9.03 of the Credit Agreement, the Borrower agrees to reimburse the Administrative Agent for its reasonable and documented out-of-pocket expenses in connection with this Amendment, including the reasonable fees, charges and disbursements of Cravath, Swaine & Moore LLP, counsel for the Administrative Agent.

SIGNATURE PAGE TO

SIXTH AMENDMENT TO