Auxilium Pharmaceuticals Inc. (NasdaqGS:AUXL) entered into an agreement and plan of merger to acquire QLT Inc. (NasdaqGS:QLTI) in a reverse merger transaction on June 25, 2014. Auxilium has entered into a commitment letter for a $225 million loan facility with Deutsche Bank AG New York Branch and Deutsche Bank Securities, Inc. Auxilium believes the funds from the facility, together with Auxilium's current cash on hand, will provide Auxilium with the resources necessary to refinance approximately $259 million of principal outstanding under its current senior secured credit facility together with any accrued interest and prepayment penalties that may be due. The merger agreement further provides that, upon termination of the merger agreement under specified circumstances, including termination of the merger agreement by Auxilium or QLT as a result of an adverse change in the recommendation of the other party's Board of Directors, Auxilium may be required to pay QLT a termination fee of $28.4 million or QLT may be required to pay Auxilium a termination fee of $14.2 million. The deal will be terminated if not complete on or before December 31, 2014. As of September 17, 2014, Auxilium has received an unsolicited offer from Endo International plc, to acquire all of the issued and outstanding shares of Auxilium, board of directors of Auxilium recommendation with respect to the proposed Merger with QLT pursuant to the Merger Agreement; in accordance with the Merger Agreement, Auxilium requested QLT's consent to the adoption by Auxilium of a stockholder rights plan in response to the Endo Proposal, and QLT has given its consent; and that QLT's board of directors reaffirms its support for the Merger with Auxilium pursuant to the Merger Agreement and believes that such a transaction continues to be in the best interests of QLT.

Upon consummation of the merger, each outstanding share of Auxilium common stock, other than shares owned by Auxilium or QLT, will be converted into the right to receive 3.1359 QLT common shares. Upon completion of the Merger, Auxilium stockholders will own approximately 76% of the outstanding common shares of the combined company on a fully diluted basis and current QLT stockholders will own approximately 24% of the outstanding common shares of the combined company on a fully diluted basis, subject to certain adjustments. The merger agreement provides that the combined company's Board of Directors upon completion of the merger shall consist of seven individuals designated by the Auxilium Board of Directors prior to the merger and two individuals designated by the QLT Board of Directors and acceptable to Auxilium prior to the merger. The combined organization will be led by Auxilium's current leadership team and will maintain Auxilium's current offices in Chesterbrook, Pennsylvania. Auxilium does not expect any material changes to its current U.S. operations or employment as a result of the transaction. Shares of the combined company are expected to trade on NASDAQ and QLT is expected to be delisted from the Toronto Stock Exchange.

The completion of the merger is subject to the approval of stockholders of Auxilium and QLT. expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, obtaining of approval under Canada's Competition, the declaration by the Securities and Exchange Commission of the effectiveness of the Registration Statement on Form S-4 to be filed with the SEC, the approval of the listing on NASDAQ of the common shares of the combined company to be issued in connection with the merger, the receipt by QLT of notice from the Toronto Stock Exchange ("TSX") approving the delisting of QLT's shares from the TSX effective as of the consummation of the merger, the receipt by Auxilium of all necessary third party and lender consents or amendments as may be required under certain Auxilium debt instruments, or consummation of a suitable refinancing of some or all of certain Auxilium debt. The Boards of Directors of each of Auxilium and QLT have unanimously approved the transaction. As of July 30, 2014, Federal Trade Commission approved the deal.

Paul T. Schnell, Paul W. Oosterhuis, Bruce Goldner, Erica Schohn, Sally A. Thurston and Thomas W. Greenberg of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor for Auxilium. Mia Bacic and James Beeby of McCullough O'Connor Irwin LLP acted as legal advisor for QLT. James E. Dawson of Nutter McClennen & Fish, LLP acted as legal advisor for QLT. Deutsche Bank, Morgan Lewis and Houlihan Lokey Financial Advisors, Inc acted as financial advisors to Auxilium. Credit Suisse Securities (Canada), Inc. acted as financial advisors to QLT. KPMG LLP acted as the accountant to QLT. Andrea Rabney and David Pitts of Argot Partners acted as public relations advisor for QLT.

Deutsche Bank will receive a fee of $5 million for its services. Credit Suisse will receive a fee of $6.6 million for its services. Georgeson Inc. acted as information agent to Auxilium and received a fee of $12,500. Georgeson Shareholder Communications Canada Inc. acted as information agent to QLT and received a fee of $20,000. Broadridge Corporate Issuers Solutions, Inc acted as transfer agent to Auxilium. Computershare Trust Company of Canada acted as transfer agent to QLT. Ernst & Young acted as accountant to Auxilium.

Auxilium Pharmaceuticals Inc. (NasdaqGS:AUXL) cancelled the acquisition of QLT Inc. (NasdaqGS:QLTI) in a reverse merger transaction on October 8, 2014. Endo International plc (NasdaqGS:ENDP) made a proposal to acquire Auxilium Pharmaceuticals Inc. for $1.4 billion. Auxilium will pay a termination fee of $28.4 million to QLT.