Securities Law & Instruments

Headnote

Section 144 -- Application for revocation of cease trade order -- issuer subject to cease trade order as a result of failure to file financial statements -- issuer is also seeking to not be a reporting issuer in all of the jurisdictions in which it is currently a reporting issuer -- full revocation granted effective as of the date the issuer is determined to not be a reporting issuer.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127, 144.

IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, c. S.5, AS AMENDED (the "Act") AND IN THE MATTER OF SALIX PHARMACEUTICALS, LTD.

ORDER (Section 144 of the Act)

WHEREAS the securities of Salix Pharmaceuticals, Ltd. (the Applicant) are subject to a cease trade order dated September 4, 2015 by a Director of the Ontario Securities Commission (the Commission) pursuant to paragraph 2 of subsection 127(1) of the Act (the Ontario Cease Trade Order) directing that trading in the securities of the Applicant cease unless revoked by a further order by the Director;

AND WHEREAS the Ontario Cease Trade Order was made on the basis that the Applicant was in default of certain filing requirements under Ontario securities law as described in the Ontario Cease Trade Order;

AND WHEREAS additional cease trade orders were issued by the British Columbia Securities Commission on August 26, 2015 (the BC Cease Trade Order), by The Manitoba Securities Commission on September 2, 2015 (the Manitoba Cease Trade Order) and by the Autorité des marchés financiers on September 14, 2015 (the AMF Cease Trade Order);

AND WHEREAS the Applicant has applied to the Commission pursuant to section 144 of the Act for a full revocation of the Ontario Cease Trade Order (the Application);

AND WHEREAS the Applicant has represented to the Commission that:

1. The Applicant was organized under the laws of the State of Delaware in 2001. Its head office is located in Raleigh, North Carolina.

2. The Applicant is a reporting issuer or the equivalent in each of the provinces of Canada.

3. On April 1, 2015, a wholly-owned subsidiary of Valeant Pharmaceuticals International (VPI) merged with and into the Applicant, with the Applicant surviving as a wholly owned subsidiary of VPI (the Merger). As a result of the Merger, since April 1, 2015, VPI has been sole holder of shares of common stock (the Shares) of the Applicant. VPI is a wholly-owned subsidiary of Valeant Pharmaceuticals International, Inc.

4. The Applicant has US$118,000 principal amount of 1.5% Convertible Senior Notes due 2019 (the Notes) outstanding. The Notes were offered and sold in 2012 in the United States (U.S.) in an offering under Rule 144A of the U.S. Securities Act of 1933, as amended, which in the U.S. was restricted to qualified institutional buyers as defined in Rule 144A.

5. The Applicant does not have any securities issued or outstanding other than the Shares and the Notes.

6. No securities of the Applicant, including debt securities, are traded in Canada or any other country on a marketplace as defined in National Instrument 21-101 Marketplace Operation or any other facility for bring together buyers and sellers of securities where trading data is publicly reported.

7. The outstanding securities of the Applicant, including debt securities, are beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions in Canada and fewer than 51 securityholders in total worldwide.

8. The Shares were delisted from trading on Nasdaq Global Select Market effective at the close of market on April 1, 2015.

9. The Ontario Cease Trade Order was issued on September 4, 2015 due to the Applicant's failure to file its interim unaudited financial statements and interim management's discussion and analysis and certificates required to be filed under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings for the interim periods ended March 31, 2015 and June 30, 2015.

10. The Applicant has concurrently applied for and expects to be granted revocations of the BC Cease Trade Order, the Manitoba Cease Trade Order and the AMF Cease Trade Order.

11. On September 14, 2015, the Applicant applied to the securities regulatory authority or regulator in each of Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Ontario, Prince Edward Island and Newfoundland and Labrador for a decision under the securities legislation of such jurisdiction to cease to be a reporting issuer under such securities legislation (collectively, the Reporting Issuer Exemptive Relief Sought).

12. Pursuant to subsection 198.1(3) of the Securities Act (Alberta) (the Alberta Act), the Ontario Cease Trade Order, the BC Cease Trade Order, the Manitoba Cease Trade Order and the AMF Cease Trade Order took effect in Alberta when issued. Pursuant to subsection 198.1(8) of the Alberta Act, each of the CTOs shall cease to apply in Alberta upon being revoked by the applicable securities regulatory authority or regulator.

13. The Applicant expects the Reporting Issuer Exemptive Relief Sought to be granted on the same date as this decision.

14. On November 3, 2015, the Applicant filed a notice in accordance with BC Instrument 11-502 Voluntary Surrender of Reporting Issuer Status and expects to cease to be a reporting issuer in British Columbia on the same date as this decision.

15. Upon the grant of the Reporting Issuer Exemptive Relief Sought and ceasing to be a reporting issuer in British Columbia, the Applicant will not be a reporting issuer in any jurisdiction in Canada.

16. The Applicant has no intention currently to seek financing by way of a private or public placement in a jurisdiction in Canada.

17. The Applicant is not in default of any requirements of the Ontario Cease Trade Order or the Act or the rules and regulations made pursuant thereto, subject to the deficiencies that led to the issuance of the Ontario Cease Trade Order.

18. The Applicant has paid all outstanding participation fees and filing fees owing to the Commission.

19. The Applicant is not considering, nor is it involved in any discussion relating to, a reverse take-over, amalgamation, merger or other form of combination or transaction similar to the foregoing.

20. The Applicant has not previously been the subject of a cease trade order other than those referred to in this Order.

AND UPON considering the Application and the recommendation of the staff of the Commission;

AND WHEREAS the Director being satisfied that to do so would not be prejudicial to the public interest;

IT IS ORDERED, pursuant to section 144 of the Act, that the Ontario Cease Trade Order is fully revoked as of the date on which the Applicant ceases to be a reporting issuer under the Act.

DATED at Toronto on this 16th day of November, 2015.

"Shannon O'Hearn"
Manager, Corporate Finance
Ontario Securities Commission