PRIVATE PLACEMENT PURCHASE AGREEMENT
___________________
(including any other persons or entities purchasing Notes (as defined below)
hereunder for whom the undersigned Holder holds contractual and investment
authority, the “Holder”)
enters into this Private Placement Purchase Agreement (the “Agreement”) with PDL
BioPharma, Inc. (the “Company”) on ___________, 2010
whereby the Holder will purchase (the “Purchase”) a portion of the
Company’s ______% Convertible Senior Notes due 2015 (the “Notes”) that will be issued
pursuant to the provisions of an Indenture dated as of ____________, 2010
between the Company and The Bank of New York Mellon Trust Company, N.A., as
Trustee (the “Trustee”),
as it may be supplemented or amended from time to time (the “Indenture”).
On and
subject to the terms hereof, the parties hereto agree as follows:
Article
I: Purchase of Notes
Subject
to the terms set forth in this Agreement, the Holder hereby agrees to purchase
from the Company, and the Company hereby agrees to issue and sell to the Holder,
the following principal amount of the Notes for the cash purchase price
specified below:
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Principal
Amount of Notes to be Purchased: $
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(the
“Purchased
Notes”).
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Purchase
Price: ______% of the principal amount of the Purchased Notes ($ ) (the
“Purchase
Price”).
The
closing of the Purchase (the “Closing”) shall occur on a
date (the “Closing
Date”) no later than three business days after the date of this
Agreement. At the Closing, (a) the Holder shall deliver or cause
to be delivered to the Company the Purchase Price, and (b) the Company shall issue to the Holder the
Purchased Notes; provided, however, that the parties acknowledge that
the issuance of the Purchased
Notes to the Holder may be delayed due to
procedures and mechanics within the system of the Depository Trust Company and
that such delay will not be a default under this Agreement so long as
(i) the Company is using its best efforts to
effect the issuance of one or more global
notes representing the Purchased Notes,
(ii) such delay is no longer than three business days, and
(iii) interest shall accrue on such Purchased Notes from
the Closing Date. Simultaneously with or after the Closing,
the Company may issue Notes to one or more other investors.
Article
II: Covenants, Representations and Warranties of the
Company
The
Company hereby covenants as follows, and makes the following representations and
warranties, each of which is and shall be true and correct on the date hereof
and on the Closing Date, to the Holder, Lazard Frères & Co. LLC and Lazard
Capital Markets LLC, and all such covenants, representations and warranties
shall survive the Purchase.
Section
2.1 Power and
Authorization. The Company is duly incorporated, validly
existing and in good standing, and has the power, authority and capacity to
execute and deliver this Agreement and the Indenture, to perform its obligations
hereunder and thereunder, and to consummate the Purchase contemplated
hereby.
Section
2.2 Valid and
Enforceable Agreements; No Violations. This Agreement has been
duly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except that such enforcement may be subject to
(a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
or other similar laws affecting or relating to enforcement of creditors’ rights
generally, and (b) general principles of equity, whether such
enforceability is considered in a proceeding at law or in equity (the “Enforceability
Exceptions”). At the Closing, the Indenture, substantially in
the form of Exhibit A
hereto, will have been duly executed and delivered by the Company and will
govern the terms of the Purchased Notes, and will constitute a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except that such enforcement may be subject to the
Enforceability Exceptions. This Agreement, the Indenture and
consummation of the Purchase will not violate, conflict with or result in a
breach of or default under (i) the charter, bylaws or other organizational
documents of the Company, (ii) any agreement or instrument to which the
Company is a party or by which the Company or any of its assets are bound, or
(iii) any laws, regulations or governmental or judicial decrees,
injunctions or orders applicable to the Company.
Section
2.3 Validity
of the Purchased Notes. The Purchased Notes have been duly authorized
by the Company and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to the Holder pursuant to the Purchase
in accordance with the terms of this Agreement, the Purchased Notes will be
valid and binding obligations of the Company, enforceable in accordance with
their terms, except that such enforcement may be subject to the Enforceability
Exceptions, and the issuance of the Purchased Notes will not be subject to any
preemptive, participation, rights of first refusal or other similar
rights. Assuming the accuracy of the Holder’s representations and
warranties hereunder, the Purchased Notes (a) will be issued in the
Purchase exempt from the registration requirements of the Securities Act of
1933, as amended (the “Securities Act”) pursuant to
Section 4(2) of the Securities Act and Rule 506 of Regulation D
promulgated under the Securities Act, and (b) will be issued in compliance
with all applicable state and federal laws concerning the issuance of the
Purchased Notes.
Section
2.4 Validity
of Underlying Common Stock. The Purchased Notes will be
convertible into shares (the “Conversion Shares”) of the
Company’s common stock, par value $0.01 per share (the “Common Stock”), in accordance
with the terms of the Purchased Notes. The Conversion Shares have
been duly authorized and reserved by the Company for issuance upon conversion of
the Purchased Notes and, when issued upon conversion of the Purchased Notes in
accordance with the terms of the Purchased Notes and the Indenture, will be
validly issued, fully paid and non-assessable, and the issuance of the
Conversion Shares will not be subject to any preemptive, participation, rights
of first refusal or other similar rights.
Section
2.5 Listing
Approval. At the Closing Date, the Conversion Shares shall be
listed on the NASDAQ Stock Market.
Section
2.6 Disclosure. On
or before the first business day following the date of this Agreement, the
Company shall issue a publicly available press release or file with the
Securities and Exchange Commission (the “SEC”) a Current Report on
Form 8-K disclosing all material terms of the Purchase and certain other
matters concerning the Company (to the extent not previously publicly
disclosed).
Article
III: Covenants, Representations and Warranties of the
Holder
The
Holder hereby covenants as follows, and makes the following representations and
warranties, each of which is and shall be true and correct on the date hereof
and on the Closing Date, to the Company, Lazard Frères & Co. LLC
and Lazard Capital Markets LLC, and all such covenants, representations and
warranties shall survive the Purchase.
Section
3.1 Power and
Authorization. The Holder is duly organized, validly existing
and in good standing, and has the power, authority and capacity to execute and
deliver this Agreement, to perform its obligations hereunder, and to consummate
the Purchase contemplated hereby. If the Holder that is signatory
hereto is executing this Agreement to effect the purchase of Notes by one or
more other persons or entities (who are thus included in the definition of
“Holder” hereunder), (a) such signatory Holder has all requisite
discretionary and contractual authority to enter into this Agreement on behalf
of, and bind, each such other person or entity that is acquiring Purchased
Notes, and (b) Exhibit B hereto
is a true, correct and complete list of (i) the name of each party
acquiring (as beneficial owner) Purchased Notes hereunder, and (ii) the
principal amount of Purchased Notes being acquired by such
Holder.
2
Section
3.2 Valid and
Enforceable Agreement; No Violations. This Agreement has been
duly executed and delivered by the Holder and constitutes a legal, valid and
binding obligation of the Holder, enforceable against the Holder in accordance
with its terms, except that such enforcement may be subject to the
Enforceability Exceptions. This Agreement and consummation of the
Purchase will not violate, conflict with or result in a breach of or default
under (i) the Holder’s organizational documents, (ii) any agreement or
instrument to which the Holder is a party or by which the Holder or any of its
assets are bound, or (iii) any laws, regulations or governmental or
judicial decrees, injunctions or orders applicable to the Holder.
Section
3.3 Qualified
Institutional Buyer. The Holder is a “qualified institutional
buyer” within the meaning of Rule 144A promulgated under the Securities
Act.
Section
3.4 Restricted
Stock. The Holder (a) acknowledges that the issuance of
the Purchased Notes pursuant to the Purchase, and the issuance of any of the
Conversion Shares upon conversion of the Purchased Notes, have not been and will
not be registered under the Securities Act or any state securities laws, and the
Purchased Notes and Conversion Shares are being offered and sold in reliance
upon exemptions provided in the Securities Act and state securities laws for
transactions not involving any public offering and, therefore, cannot be sold,
transferred, offered for sale, pledged, hypothecated or otherwise disposed of
unless they are subsequently registered and qualified under the Securities Act
and applicable state laws or unless an exemption from such registration and
qualification is available, and that evidence of the Purchased Notes and
Conversion Shares will bear a legend to such effect, and (b) is purchasing
the Purchased Notes and Conversion Shares for investment purposes only, for the
account of the Holder and not with any view toward a distribution thereof or
with any intention of selling, distributing or otherwise disposing of the
Purchased Notes or Conversion Shares in a manner that would violate the
registration requirements of the Securities Act. The Holder is able
to bear the economic risk of holding the Purchased Notes and Conversion Shares
for an indefinite period and has sufficient knowledge and experience in
financial and business matters so as to be capable of evaluating the merits and
risks of its investment in the Purchased Notes and Conversion
Shares. The Holder has received all such information regarding the
Purchase and the Purchased Notes and Conversion Shares as it deems necessary to
make a decision with respect to the Purchase.
Section
3.5 No
Affiliate Status. The Holder is not, and has not been during
the consecutive three month period preceding the date hereof, a director,
officer or “affiliate” within the meaning of Rule 144 promulgated under the
Securities Act (an “Affiliate”) of the
Company.
Section
3.6 No
Illegal Transactions. The Holder has not, directly or
indirectly, and no person acting on behalf of or pursuant to any understanding
with the Holder has, engaged in any transactions in the securities of the
Company (including, without limitation, any Short Sales (as defined below)
involving any of the Company’s securities) since the time that such Holder was
first contacted by either the Company, Lazard Frères & Co. LLC or Lazard
Capital Markets LLC or any other person regarding an investment in the Purchased
Notes or the Company. Such Holder covenants that neither it nor any
person acting on its behalf or pursuant to any understanding with such Holder
will engage, directly or indirectly, in any transactions in the securities of
the Company (including Short Sales) prior to the time the transactions
contemplated by this Agreement are publicly disclosed. “Short Sales” include, without
limitation, all “short sales” as defined in Rule 200 of Regulation SHO
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and all types
of direct and indirect stock pledges, forward sale contracts, options, puts,
calls, short sales, swaps, derivatives and similar arrangements (including on a
total return basis), and sales and other transactions through non-U.S.
broker-dealers or foreign regulated brokers. Solely for purposes of
this Section 3.6, subject to the Holder's compliance with its obligations
under the U.S. federal securities laws and the Holder's internal policies,
“Holder” shall not be deemed to include any subsidiaries or affiliates of the
Holder that are effectively walled off by appropriate “Chinese Wall” information
barriers approved by the Holder's legal or compliance department (and thus have
not been privy to any information concerning the Purchase).
3
Section
3.7 Adequate
Information; No Reliance. The Holder acknowledges
and agrees that (a) the Holder has been furnished with all materials it
considers relevant to making an investment decision to enter into the Purchase
and has had the opportunity to review the Company’s filings with the SEC,
including, without limitation, all filings made pursuant to the Exchange Act,
(b) the Holder has had a full opportunity to ask questions of the Company
concerning the Company, its business, operations, financial performance,
financial condition and prospects, and the terms and conditions of the Purchase,
(c) the Holder has had the opportunity to consult with its accounting, tax,
financial and legal advisors to be able to evaluate the risks involved in the
exchange of the Existing Notes pursuant hereto and to make an informed
investment decision with respect to such Purchase and (d) the Holder is not
relying, and has not relied, upon any statement, advice (whether accounting,
tax, financial, legal or other), representation or warranty made by the Company
or any of its affiliates or representatives including, without limitation,
Lazard Frères & Co. LLC and Lazard Capital Markets LLC, except for
(A) the publicly available filings made by the Company with the SEC under
the Exchange Act, and (B) the representations and warranties made by the
Company in this Agreement.
Section
3.8 No Public
Market. The
Holder understands that no public market exists for the Purchased Notes, and
that there is no assurance that a public market will ever develop for the
Purchased Notes.
Article
IV: Miscellaneous
Section
4.1 Entire
Agreement. This Agreement and any documents and agreements
executed in connection with the Purchase embody the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and supersede all prior and contemporaneous oral or written agreements,
representations, warranties, contracts, correspondence, conversations, memoranda
and understandings between or among the parties or any of their agents,
representatives or affiliates relative to such subject matter, including,
without limitation, any term sheets, emails or draft documents.
Section
4.2 Construction. References
in the singular shall include the plural, and vice versa, unless the context
otherwise requires. References in the masculine shall include the
feminine and neuter, and vice versa, unless the context otherwise
requires. Headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meanings of the provisions
hereof. Neither party, nor its respective counsel, shall be deemed the
drafter of this Agreement for purposes of construing the provisions of this
Agreement, and all language in all parts of this Agreement shall be construed in
accordance with its fair meaning, and not strictly for or against either
party.
Section
4.3 Governing
Law. This Agreement shall in all respects be construed in
accordance with and governed by the substantive laws of the State of New York,
without reference to its choice of law rules.
Section
4.4 Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument. Any counterpart or other signature hereon delivered by
facsimile shall be deemed for all purposes as constituting good and valid
execution and delivery of this Agreement by such party.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first above written.
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“HOLDER”:
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“COMPANY”:
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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Signature
Pages to Purchase Agreement
[Name of
Holder]
EXHIBIT
A
Form
of Indenture
6
EXHIBIT
B
Purchasing
Beneficial Owners
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Name of
Beneficial Owner
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Principal Amount of
Purchased Notes
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7
