BELLUS Health reports results for first half of f...(quity-linked securities at a price per c...),Health

Date:8/11/2009

quity-linked securities at a price per common share that is less than the Financing Conversion Price then in effect, "full ratchet" anti-dilution protection (which will have the effect of lowering the Financing Conversion Price to the new issue price of equity or equity-linked securities) will apply, subject to certain exceptions. In addition, the 2009 Notes contain adjustment provisions in the event of a change of control and negative covenants, as well as a pre-emptive right in respect of future financings of BELLUS Health. The 2009 Notes issued to VSVI contains certain piggyback rights in favour of VSVI. The exercise of pre-emptive and piggyback rights will be subject to regulatory approval. Assuming that each of the 2009 Notes remain outstanding until maturity, is converted in full at the Financing Conversion Price and that all interest thereon is paid by the issuance of Common Shares at the Financing Conversion Price, the maximum number of Common Shares issuable under the 2009 Notes is 212,349,035, representing a potential dilution factor of 407%, based on the number of Common Shares issued and outstanding as at June 30, 2009.

Each of Vitus and VSVI has the right to nominate two (2) members to the Board of Directors of BELLUS Health.

In connection with the 2009 Notes financing, BELLUS Health and all of the existing note holders agreed to amend the terms of the outstanding 2006 Notes and 2007 Notes (the Original Notes). Holders of $29,085,000 principal amount of 2006 Notes and $4,000,000 principal amount of 2007 Notes agreed to amend the terms of their notes to make them convertible into the preferred shares in the authorized capital of BELLUS Health and received 3,096 preferred shares per $1,000 aggregate principal amount of existing convertible notes, representing a conversion price equal to 200% of the Financing Conversion Price (resulting in a conversion price of CDN$0.40 per share) (the Preferred Share Conversion Price). A total of 102,431,1
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SOURCE BELLUS HEALTH INC. Copyright©2009 PR Newswire. All rights reserved

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