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): November 4, 2014
Dendreon Corporation
(Exact Name of Registrant as Specified in Its Charter)
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Delaware |
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001-35546 |
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22-3203193 |
(State or Other Jurisdiction
of Incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
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1301 2nd Avenue, Seattle, Washington |
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98101 |
(Address of Principal Executive Offices) |
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(Zip Code) |
Registrants telephone number, including area code: (206) 256-4545
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 (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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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. |
The disclosure under Item 1.03 of this
Current Report on Form 8-K (this Current Report) is incorporated herein by reference.
Item 1.03. |
Bankruptcy or Receivership. |
Chapter 11 Filing
On November 10, 2014, Dendreon Corporation (the Company) and its wholly owned subsidiaries, Dendreon Holdings, LLC, Dendreon
Distribution, LLC and Dendreon Manufacturing, LLC (collectively, the Debtor Subsidiaries, and together with the Company, the Debtors), filed voluntary petitions for relief under Chapter 11 of Title 11 of the United
States Code (the Bankruptcy Code) in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court, and the filings therein, the Chapter 11 Filings). The Chapter 11 cases are expected
to be jointly administered under the caption In re Dendreon Corporation et. al. Case No. 14-12515.
The Debtors
intend to promptly seek the necessary relief from the Bankruptcy Court to pay certain claims of employees and other claims in accordance with their existing business terms, and intend to continue operating their businesses in the ordinary course,
taking into account their status as debtors in possession, as they prosecute the Chapter 11 cases.
Plan Support Agreement
On November 9, 2014, the Debtors and (i) certain holders representing approximately 47.8% and (ii) certain other holders representing
approximately 35.9% (collectively, the Supporting Noteholders) of the outstanding principal amount of the Companys 2.875% Convertible Senior Notes due 2016 (the 2016 Notes) entered into two separate Plan Support
Agreements (the PSAs). Under the terms of the PSAs, the parties have agreed to work to effectuate a restructuring of the Debtors obligations pursuant to a stand-alone plan of reorganization in Chapter 11 (the Stand-Alone
Plan) under which holders of the 2016 Notes will receive new shares of common stock in the reorganized Company, subject to the outcome of the competitive process described below.
The PSAs further provide that, as an alternative to the Stand-Alone Plan, the Debtors will concurrently conduct a competitive process,
pursuant to bidding procedures (the Bidding Procedures) to be approved by the Bankruptcy Court, seeking qualified bids for (a) a sale of all or substantially all of the Debtors assets pursuant to Section 363 of the
Bankruptcy Code (a 363 Sale) or (b) a recapitalization transaction effectuated through a plan of restructuring (a Plan Sale). As further discussed below, a qualified bid must have a value in excess of $275,000,000 and
meet certain other criteria, each as specified in the Bidding Procedures.
Under the terms of the PSAs, the Supporting Noteholders and the
Debtors have agreed to negotiate in good faith the terms of the proposed plan. The Debtors will use commercially reasonable efforts to complete the restructuring under the proposed plan, and the Supporting Noteholders have agreed to vote in favor of
the plan of reorganization (or, in the case of a 363 Sale, the plan of liquidation) and to not object to a 363 Sale. Additionally, subject to a limited exception for market makers, the Supporting Noteholders have agreed to not transfer their claims
unless the transferee also agrees to be bound by the terms of the applicable PSA. The Debtors obligations under the PSAs are subject to a fiduciary duty exception.
Each PSA will terminate following the occurrence of certain termination events set forth in the respective agreement (each, a
Termination Event), subject to, in most cases, a three day cure period, unless the Termination Event is waived by the applicable parties. Termination Events include failure to meet certain milestones such as court approval of the
agreement, solicitation, confirmation and consummation; changes to the plan without approval of the Supporting Noteholders party to such agreement; uncured material breach by the Supporting Noteholders party to such agreement or the Debtors, as the
case may be; a Material Adverse Effect, as defined in the PSAs, with respect to the Debtors; and failure to achieve certain net revenue targets. Certain actions under the PSAs by the Supporting Noteholders party thereto, including waiver of certain
Termination Events and amendments to the relevant PSA, require the consensus of two-thirds of claims held by all the Supporting Noteholders party to such PSA.
The PSAs also include certain customary representations and warranties of the parties, as well as a covenant by the Debtors to use
commercially reasonable efforts to operate in the ordinary course of business, taking into account their status as debtors in possession.
The foregoing description of the PSAs is qualified in its entirety by reference to the respective
agreements, which are filed as Exhibit 10.1 and Exhibit 10.2 hereto respectively and are incorporated herein by reference.
Qualified Bids; Stalking
Horse Deadline
The Debtors have filed a motion with the Bankruptcy Court requesting that the court approve a bid deadline and set
a date for an auction to implement the competitive process provided for under the PSAs. In order for a bid received during the competitive process to be considered a qualified bid, it must have a value in excess of $275,000,000 and meet certain
other criteria, each as specified in the Bidding Procedures. If no qualified bids are received by the bid deadline, the Debtors will proceed to confirmation of the Stand-Alone Plan. If only one qualified bid is received, the Debtors will seek to
consummate that transaction. If more than one qualified bid is received, an auction will be held to determine the successful bidder with the highest or otherwise best bid, following which the Debtors will seek to consummate that transaction.
Pursuant to the Bidding Procedures, the Debtors may select a stalking horse bidder for the Debtors assets for the purposes
of establishing a minimum acceptable bid with which to begin the auction described above (the Stalking Horse Bid). The Debtors have filed a motion with the Bankruptcy Court requesting that the court approve a deadline for the Debtors to
select a qualified bid to be a Stalking Horse Bid (the Stalking Horse Deadline). In the event that a Stalking Horse Bid is finalized by such deadline, the Debtors will file with the Bankruptcy Court within one day of such deadline a
notice of such Stalking Horse Bid and a copy of the definitive agreement related thereto.
Cautionary Statements
The Companys securityholders are cautioned that trading in the Companys securities during the pendency of the Chapter 11
Filings will be highly speculative and will pose substantial risks. Trading prices for the Companys securities may bear little or no relationship to the actual recovery, if any, by holders thereof in the Companys Chapter 11 Filings.
Accordingly, the Company urges extreme caution with respect to existing and future investments in its securities.
A plan of
reorganization or liquidation will likely result in holders of the Companys capital stock receiving no distribution on account of their interests and cancellation of their existing stock. If certain requirements of the Bankruptcy Code are met,
a Chapter 11 plan can be confirmed notwithstanding its rejection by the Companys equity security holders and notwithstanding the fact that such equity security holders do not receive or retain any property on account of their equity interests
under the plan.
As a result of the Chapter 11 Filings, the Debtors are periodically required to file various documents with, and provide
certain information to, the Bankruptcy Court, including statements of financial affairs, schedules of assets and liabilities, monthly operating reports and other financial information. Such materials will be prepared according to requirements of
federal bankruptcy law. While they would accurately provide then-current information required under federal bankruptcy law, such materials will contain information that may be unconsolidated and will generally be unaudited and prepared in a format
different from that used in the Companys consolidated financial statements filed under the securities laws. Accordingly, the Company believes that the substance and format of such materials do not allow meaningful comparison with its
publicly-disclosed consolidated financial statements. Moreover, the materials filed with the Bankruptcy Court are not prepared for the purpose of providing a basis for an investment decision relating to the Companys securities or for
comparison with other financial information filed with the Securities and Exchange Commission.
Most of the Debtors filings with the
Bankruptcy Court are available to the public at the offices of the Clerk of the Bankruptcy Court or the Bankruptcy Courts web site (http://www.deb.uscourts.gov) or may be obtained through private document retrieval services. The Company
undertakes no obligation to make any further public announcement or issue any update with respect to the documents filed with the Bankruptcy Court or any matters referred to therein.
Additional information about this process, as well as court filings and other documents related to the reorganization proceedings, is
available through the Companys claims agent, Prime Clerk, at https://cases.primeclerk.com/dendreon or 844-794-3479. Information contained on, or that can be
accessed through, such web site or the Bankruptcy Courts web site is not part of this Current Report.
A copy of the press release,
dated November 10, 2014, announcing the Chapter 11 Filings is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
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Item 2.04. Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement.
The disclosure under Item 1.03 of this Current Report is incorporated herein by
reference.
The Chapter 11 Filings constituted an event of default under the First Supplemental Indenture, dated as of January 20,
2011, to the Base Indenture, dated as of March 16, 2007, between the Company and The Bank of New York Mellon Trust Company, N.A. (formerly the Bank of New York Trust Company, N.A.), as trustee, governing the 2016 Notes.
Under the terms of the 2016 Notes, upon the Chapter 11 Filings, the outstanding principal of $620,000,000 plus accrued and unpaid interest to
date of $5,600,000 became immediately due and payable. Interest on the amount payable shall continue to accrue until paid.
Under the
Bankruptcy Code, the acceleration provisions applicable to the debt obligations described above are generally unenforceable, and any remedies that may exist related to the events of default described above are stayed, under section 362 of the
Bankruptcy Code.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On November 4, 2014, Gregory R. Cox, Interim Chief Financial Officer and Treasurer of the
Company, entered into a Key Employee Retention Incentive Agreement (the Retention Agreement) and an Annual Bonus Program Agreement (the Bonus Agreement) with the Company.
Pursuant to the Retention Agreement, Mr. Cox will be paid a retention bonus in an amount equal to $135,000. Mr. Cox has agreed to
repay to the Company the after-tax amount of the retention bonus in the event his employment with the Company terminates for any reason (other than by the Company without cause or due to his death or disability) prior to the consummation of a sale
or merger of the Company, a sale of all or substantially all of the Companys assets or a debt exchange, recapitalization, refinancing or restructuring of substantially all of the Companys outstanding indebtedness (the Emergence
Date).
Pursuant to the Bonus Agreement, Mr. Cox will be paid $67,500 which is 30% of his target bonus pursuant to the
Companys 2014 Annual Bonus Program (the Bonus). The remainder of Mr. Coxs annual bonus under the 2014 Annual Bonus Program will be paid following the close of the 2014 fiscal year in the ordinary course of business
consistent with past practice and terms of the 2014 Annual Bonus Program, based on actual performance of the Company and Mr. Coxs continued employment, less the Bonus prepayment. Mr. Cox has agreed to repay the Company the after-tax
amount of the Bonus in the event his employment with the Company terminates for any reason (other than by the Company without cause or due to his death or disability) prior to the earlier of (i) the Emergence Date or (ii) February 28,
2015.
The foregoing descriptions of the Retention Agreement and the Bonus Agreement with Mr. Cox are qualified in their entirety by
reference to the Agreements themselves, which are filed as Exhibits 10.3 and 10.4 respectively hereto and are incorporated herein by reference.
Item 7.01. |
Regulation FD Disclosure. |
Between September 15, 2014 and November 6, 2014, the
Company and certain holders (the Restricted Holders) of the 2016 Notes entered into confidentiality agreements under which certain information regarding the Company was provided to the Restricted Holders in connection with their
consideration of a proposed restructuring or other transaction. Under these confidentiality agreements the Company agreed to publicly disclose certain of this information. As a result, the Company is providing the information furnished as
Exhibit 99.2.
The information in this item and Exhibit 99.2 is being furnished, not filed. Accordingly, such information will not be
incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified as being incorporated by reference therein. By filing this Current Report and furnishing this
information, the Company makes no admission as to the materiality of any information in Item 7.01 of, or Exhibit 99.2 to, this report.
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The information set forth in this Item 7.01 and the financial information furnished as
Exhibit 99.2 contain forward-looking statements based on information available as of the date these projections were prepared. These forward-looking statements are subject to a significant amount of uncertainty. Factors both within and outside
the control of the Company will affect the accuracy of this forward-looking information including the risk factors or uncertainties listed from time to time in the Companys filings with the Securities and Exchange Commission. Furthermore, the
information is a high-level summary only and is subject to assumptions, qualifications and performance criteria not otherwise described in the information presented.
The financial information furnished as Exhibit 99.2, in addition to containing results that are determined in accordance with U.S. GAAP,
contains certain forward looking non-GAAP financial measures, including EBITDA, capital expenditures and unlevered free cash flow. EBITDA is defined as net earnings (loss) before (a) interest expense and taxes, (b) depreciation and
amortization expenses and (c) certain items that are not indicative of core operating activities such as facility closures and adjustments, asset impairments, severance and other charges or credits related to legacy items, and costs associated
with transactions. Capital expenditures are defined as expenses for an asset that is a newly purchased capital asset or an investment that improves the useful life of an existing capital asset. Unlevered free cash flow is defined as cash flow before
interest payments are taken into account. The Company has not provided a reconciliation of the forward-looking non-GAAP financial measures included in Exhibit 99.2 to the directly comparable GAAP measures because, due primarily to variability and
difficulty in making accurate forecasts and projections, not all of the information necessary to forecast and quantify the exact amount of the items excluded from the non-GAAP financial measures that will be included in the comparable GAAP financial
measures is available to the Company without unreasonable efforts.
Item 9.01. |
Financial Statements and Exhibits. |
(d) Exhibits:
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10.1 |
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Plan Support Agreement, dated as of November 9, 2014, by and among the Company and its subsidiaries signatory thereto and the holders of the Companys 2016 Notes signatory thereto |
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10.2 |
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Plan Support Agreement, dated as of November 9, 2014, by and among the Company and its subsidiaries signatory thereto and certain funds managed by Deerfield Management Company, L.P. signatory thereto |
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10.3 |
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Key Employee Retention Incentive Agreement, dated as of November 4, 2014, by and between the Company and Greg Cox |
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10.4 |
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Annual Bonus Program Agreement, dated as of November 4, 2014, by and between the Company and Greg Cox |
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99.1 |
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Press Release, dated November 10, 2014. |
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99.2 |
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Certain Information Provided to Restricted Holders |
Warning Concerning Forward Looking Statements
Certain information in this Current Report and the exhibits hereto may constitute forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements contained in this Current Report and the exhibits hereto that are not statements of historical fact, including statements regarding the potential of the proposed stand-alone restructuring, asset sale or
plan sale, the expectation that the Chapter 11 filings will enable the Company to sell its assets or itself in an orderly manner and maximize value for the Companys stakeholders, the necessity of Court approvals to conduct and complete the
proposed stand-alone restructuring, asset sale or plan sale, the ability of the Company to continue to deliver PROVENGE without interruption, the ability of the Company to continue operating in the ordinary course during the bankruptcy and sale
process, the expectation that the Company will not need to raise any incremental financing to effectuate its restructuring process and other statements regarding the Companys strategy, future operations, future financial positions, future
performance, commercialization of PROVENGE, prospects, and plans and objectives of management should be considered forward-looking statements. Words such as anticipate, estimate, expect, project,
intend, plan, believe, may, predict, will, would, could, should, target and similar expressions are often used to identify
forward-looking statements. Actual results or events could differ materially from those indicated in forward-looking statements as a result of risks and uncertainties, including, among others, the potential adverse impact of the Chapter 11 filings
on the Companys liquidity or results of operations, changes in the Companys ability to meet financial obligations during the Chapter 11 process or to maintain contracts that are critical to the Companys operations, the outcome or
timing of the Chapter 11 process and the proposed stand-alone restructuring, asset sale or plan sale (including the occurrence or likelihood of qualified bids or an auction), the effect of the Chapter 11 filings or proposed stand-alone
restructuring, asset sale or plan sale on the Companys relationships with third parties, regulatory authorities and employees, proceedings that may be brought by third parties in connection with the Chapter 11 process or the proposed
stand-alone restructuring, asset sale or plan sale, Court approval or other conditions or termination events in connection with the proposed stand-alone restructuring, asset sale or plan sale, and the timing or amount of any distributions to the
Companys stakeholders. For a discussion of some of the additional risks and
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important factors that Dendreon believes could cause actual results or events to differ from the forward-looking statements that it makes, see the sections entitled Risk Factors and
Managements Discussion and Analysis of Financial Condition and Results of Operations in the Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2014. In addition, new risks and uncertainties emerge
from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results or events to differ from those contained in any forward-looking statements. Accordingly, you should not place
undue reliance on any forward-looking statements contained in this Current Report or the exhibits hereto. Any forward-looking statements speak only as of the date of this Current Report. The Company undertakes no obligation to publicly update
forward-looking statements, whether as a result of new information, future events or otherwise.
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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.
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DENDREON CORPORATION |
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Date: November 10, 2014 |
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By: |
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/s/ Robert L. Crotty |
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Name: |
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Robert L. Crotty |
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Title: |
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Executive Vice President, General Counsel and Secretary |
INDEX TO EXHIBITS
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Exhibit No. |
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Description |
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10.1 |
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Plan Support Agreement, dated as of November 9, 2014, by and among the Company and its subsidiaries signatory thereto and the holders of the Companys 2016 Notes signatory thereto |
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10.2 |
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Plan Support Agreement, dated as of November 9, 2014, by and among the Company and its subsidiaries signatory thereto and certain funds managed by Deerfield Management Company, L.P. signatory thereto |
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10.3 |
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Key Employee Retention Incentive Agreement, dated as of November 4, 2014, by and between the Company and Greg Cox |
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10.4 |
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Annual Bonus Program Agreement, dated as of November 4, 2014, by and between the Company and Greg Cox |
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99.1 |
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Press Release, dated November 10, 2014. |
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99.2 |
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Certain Information Provided to Restricted Holders |
Exhibit 10.1
EXECUTION VERSION
PLAN SUPPORT
AGREEMENT
This PLAN SUPPORT AGREEMENT (this Agreement) is made and entered into as of November 9, 2014 by and
among (i) Dendreon Corporation (the Company) and its subsidiaries signatory hereto (collectively, and together with the Company, the Debtors), and (ii) each of the undersigned holders (the
Supporting Noteholders) of the Companys 2016 Notes issued under the First Supplemental Indenture, dated January 20, 2011, to the Base Indenture, dated March 16, 2007, with The Bank of New York Mellon Trust Company,
N.A., as trustee (the 2016 Notes). Each of the Debtors and the Supporting Noteholders is referred to herein as a Party and collectively as the Parties.
RECITALS
WHEREAS,
the Debtors have determined that a restructuring of their obligations under the 2016 Notes and certain other obligations of the Debtors is necessary and would be in the best interests of the Debtors and their stakeholders;
WHEREAS, each of the Parties desires to consummate such restructuring in accordance with the terms of the term sheet attached as
Exhibit A hereto (the Plan Term Sheet) and the terms of this Agreement (such restructuring, the Restructuring);
WHEREAS, as of the date of this Agreement, the Debtors are obligated to, among other parties, the holders of the 2016 Notes in the
aggregate principal amount of $296,458,000 (plus accrued and unpaid interest);
WHEREAS, the Restructuring will be effected through
the commencement of chapter 11 bankruptcy cases for the Debtors in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court);
WHEREAS, each of the Parties desires to work together to complete the negotiation of the terms of the documents necessary to confirm
and consummate the Plan; and
WHEREAS, this Agreement is not intended to be and shall not be deemed to be a solicitation for votes
to the Plan.
NOW, THEREFORE, in exchange for good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, each of the Parties, intending to be legally bound, hereby agrees as follows:
1. Definitions and Interpretation.
(a) The following terms used in this Agreement shall have the following definitions:
2016 Notes has the meaning set forth in the preamble hereof.
Actual Net Revenue has the meaning set forth in Section 6(f) hereof.
Agreement has the meaning set forth in the preamble hereof. For the avoidance
of doubt, this Agreement includes the Plan Term Sheet.
Bankruptcy Cases means proceedings under chapter 11 of the
Bankruptcy Code for the Debtors.
Bankruptcy Code means title 11 of the United States Code, 11 U.S.C. §§
101-1532.
Bankruptcy Court has the meaning set forth in the recitals hereof.
Bidding Procedures means the bidding procedures in the form attached as Exhibit 1 to the Plan Term Sheet.
Business Day means any day other than Saturday, Sunday, and any day that is a legal holiday or a day on which banking
institutions in New York, New York are authorized by law or other governmental action to close.
Company has the
meaning set forth in the preamble hereof.
Competitive Process has the meaning set forth in Section 2(a)
hereof.
Debtors has the meaning set forth in the preamble hereof.
Disclosure Statement means a disclosure statement with respect to the Plan consistent with the requirements of section 1125
of the Bankruptcy Code.
Effective Date means the effective date of the Plan.
Grace Period has the meaning set forth in Section 10(a) hereof.
Joinder has the meaning set forth in Section 7(b) hereof.
Material Adverse Effect means any event or condition that, individually or in the aggregate, has had or would reasonably be
expected to have a material adverse effect on the business, assets, liabilities or results of operations of the Company and its subsidiaries, taken as a whole (other than as a result of the events or conditions leading up to and following
commencement of the Bankruptcy Cases and the continuation and prosecution thereof), excluding the effects of events or conditions, either alone or in combination, resulting from or arising out of (i) any liabilities to be not assumed under the
Plan, (ii) changes in general economic, financial or securities markets or geopolitical conditions, (iii) general changes or developments in macroeconomic conditions or the industries and markets in which the Company or its subsidiaries
operate, (iv) the entry into this Agreement, the announcement of the Restructuring, the identity of any of the Supporting Noteholders or the consummation of the transactions contemplated by this Agreement, including termination of, reduction in
or similar negative impact on relationships, contractual or otherwise, with any customers, suppliers, distributors, licensors, licensees, partners or employees of the Company and its subsidiaries, (v) any actions required to be taken or omitted
by any Debtor under this Agreement (including any
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action taken or omitted at the request of the Supporting Noteholders) or any action or omission by any Supporting Noteholder in breach of this Agreement, (vi) changes in (or proposals to
change) any applicable laws, rules or regulations or applicable accounting regulations or principles or the enforcement or interpretation thereof, (vii) any outbreak or escalation of hostilities or war or any act of terrorism or natural
disaster or act of God and (viii) any failure of the Company and its subsidiaries to meet any budgets, plans, projections or forecasts (internal or otherwise); provided, however, that any event or condition referred to in
clauses (ii), (iii) or (vii) shall not be excluded pursuant to such clauses to the extent (and only to the extent) it disproportionately adversely affects the Company and its subsidiaries, taken as a whole, relative to
other similarly situated companies in the industries and countries and regions in which the Company and its subsidiaries operate.
Measurement Date means the last day of each calendar month following the Petition Date and at least 15 days prior to the
Effective Date.
Minimum Net Revenue means, with respect to a given calendar month, the applicable amount set forth on
Exhibit B attached hereto.
Party or Parties has the meaning set forth in the preamble
hereof.
Person has the meaning set forth in section 101(41) of the Bankruptcy Code.
Petition Date means the date on which the Debtors commence the Bankruptcy Cases.
Plan means the chapter 11 plan of reorganization that implements the Restructuring.
Plan Documents means the Plan, the Disclosure Statement, the orders in respect of the Bidding Procedures and the sale of
all or substantially all of the non-cash assets of the Debtors contemplated by the Bidding Procedures and the motions related thereto, and all exhibits, schedules, and other documents ancillary thereto, and any amendments or supplements to any of
the foregoing, all of which shall be consistent in all material respects with this Agreement.
Plan Support Agreement Assumption
Motion has the meaning set forth in Section 6(d) hereof.
Plan Term Sheet has the meaning set
forth in the recitals hereof and includes the Bidding Procedures.
Prepetition Noteholder Claims means any claim
arising under the 2016 Notes.
Qualified Marketmaker means any Person that holds itself out to the public or to
applicable private markets as standing ready in the ordinary course of business to purchase from customers and sell to customers Prepetition Noteholder Claims in its capacity as a broker-dealer or market maker for such claims and is in fact
regularly in the business of making a market in such claims.
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Requisite Supporting Noteholders means, as of any date of determination,
Supporting Noteholders holding at least two-thirds in amount of the Prepetition Noteholder Claims held by all Supporting Noteholders.
Restructuring has the meaning set forth in the recitals hereof.
Solicitation means the Debtors formal request for acceptances of the Plan, consistent with section 1125 and 1126 of
the Bankruptcy Code, rules 3017 and 3018 of the Federal Rules of Bankruptcy Procedure, and applicable non-bankruptcy law.
Supporting Noteholders has the meaning set forth in the preamble hereof.
Termination Date has the meaning set forth in Section 10(a) hereof.
Termination Event means any event specified in Section 10(a) hereof.
Transfer means any assignment, sale, transfer, loan, pledge or encumbrance of any Prepetition Noteholder Claim or grant of
any option thereon or any right or interest (voting or otherwise) therein, or any agreement to effect any of the foregoing; provided that the granting of any liens or encumbrances in favor of a bank or broker-dealer holding custody of
securities in the ordinary course of business and which lien or encumbrance is released upon the disposition of such securities shall not be considered a Transfer.
Trustee means The Bank of New York Mellon Trust Company, N.A., and any successor trustee under the 2016 Notes.
(b) Other Interpretive Provisions. The word include and its various forms shall be read as if followed by the phrase
without limitation. Will and shall have the same meaning. Where appropriate in context, terms used in this Agreement shall include both the singular and the plural. Headings are for convenience only and shall not
affect the interpretation of this Agreement.
2. The Restructuring; Incorporation of the Term Sheet.
(a) The Restructuring will be accomplished pursuant to a Plan consistent with the Plan Term Sheet, which Plan will provide for three
alternative plan structures to effect the Restructuring as set forth in the Plan Term Sheet, following a competitive process by the Debtors as set forth in the Plan Term Sheet pursuant to the Bidding Procedures (the Competitive
Process).
(b) The Plan Term Sheet is incorporated herein by reference and is made part of this Agreement. If the terms as set
forth in the Plan Term Sheet and this Agreement are inconsistent, this Agreement shall govern. If the terms as set forth in the Plan and this Agreement are inconsistent, the terms of the Plan shall govern.
3. Implementation of the Restructuring.
(a) The Debtors will effectuate the Restructuring by commencing the Bankruptcy Cases, as provided in this Section 3. Subsidiaries
of the Company other than the Debtors shall not commence chapter 11 cases.
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(b) Following the execution of this Agreement, each Supporting Noteholder and the Debtors shall
negotiate in good faith the terms of the Plan and Disclosure Statement, which shall be consistent in all material respects with this Agreement and shall be in form and substance reasonably satisfactory to each Supporting Noteholder and the Debtors.
(c) The Debtors shall file the Plan and the Disclosure Statement as promptly as practicable after the Petition Date.
(d) This Agreement is not and shall not be deemed to be a solicitation of acceptances of the Plan. The acceptances of holders of claims will
not be solicited until after the forms of the Plan and Disclosure Statement have been agreed to by each Supporting Noteholder and the Debtors, and such Solicitation shall occur in accordance with the applicable provisions of the Bankruptcy Code and
applicable non-bankruptcy law.
4. Consultation and Cooperation. The Debtors and each Supporting Noteholder agree to reasonably
consult and cooperate with each other, including through their respective counsel or other advisors, in connection with any analyses, appearances, presentations, briefs, filings, arguments, or proposals made or submitted by any such Party to the
Bankruptcy Court or parties in interest in the Bankruptcy Cases.
5. Effectiveness. This Agreement shall become effective on the
date upon which (a) counterparts of this Agreement have been duly executed by each of the Debtors and the Supporting Noteholders listed on the signature pages hereto and (b) such counterparts have been exchanged by the Parties. This
Agreement shall not be binding on or enforceable against any Party, and no Party shall have any rights or obligations under this Agreement until this Agreement has become effective in accordance with this Section 5.
6. Agreements of the Debtors. Subject to the terms and conditions hereof, and for so long as no Termination Date shall have occurred,
and except as the applicable Supporting Noteholders may expressly release the Debtors in writing from any of the following obligations:
(a) Subject to the existence of an effective confidentiality agreement described in the next sentence, the Debtors shall promptly provide to
counsel to the Supporting Noteholders, and to such other advisors as directed, such information and due diligence materials as any of the Supporting Noteholders and their advisors reasonably request to evaluate the transactions contemplated by this
Agreement, including concerning the Competitive Process, and shall cause its management and advisors to meet with the Supporting Noteholders and their advisors at reasonable times upon request of any of the Supporting Noteholders for purposes of
reasonably discussing such information and due diligence materials and reasonably consulting with respect to the Competitive Process; provided, however, this Section 6(a) shall not entitle any Supporting Noteholder that may
evaluate or consider submitting a potential bid in the Competitive Process to access to information or due diligence materials, which access will be subject to and in accordance with the Bidding Procedures, or to any opportunity to consult with the
Debtors in connection with the Competitive Process not provided to other bidders in such
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process in accordance with the Bidding Procedures. Information and materials provided under this Section 6(a) following the commencement of the Bankruptcy Cases will be subject to
(i) in the case of advisors to the applicable Supporting Noteholders, the existing confidentiality agreements with Brown Rudnick LLP and Jefferies LLC, as the case may be, or a substantially identical confidentiality agreement to be executed
between another advisor and the Company, and (ii) in the case of a Supporting Noteholder, a confidentiality agreement in form reasonably acceptable to the Company and such Supporting Noteholder and substantially similar to such Supporting
Noteholders existing confidentiality agreement with the Company.
(b) The Debtors hereby agree (i) to prepare the Plan
Documents, (ii) to provide draft copies of the Plan Documents to counsel for the Supporting Noteholders within a reasonable amount of time prior to the date the Debtors plan to file such documents with the Bankruptcy Court and (iii) that
they shall, except in circumstances where it is not reasonably practicable to do so, provide draft copies of all other motions, applications, and other documents the Debtors intend to file with the Bankruptcy Court to counsel for the Supporting
Noteholders within a reasonable amount of time prior to the date the Debtors plan to file such documents with the Bankruptcy Court, and shall reasonably consult in good faith with counsel to the Supporting Noteholders regarding the form and
substance of any such proposed filing.
(c) The Debtors agree to use commercially reasonable efforts to (i) complete the
Restructuring under the Plan Documents, (ii) take all necessary and appropriate actions in furtherance of the Restructuring and all other actions contemplated under this Agreement or the Plan Documents, (iii) obtain all required regulatory
approvals and third-party approvals, consents, and/or waivers for the Restructuring, and (iv) not take any actions materially inconsistent with this Agreement or the Plan Documents.
(d) Within one Business Day following the Petition Date, the Debtors shall file a motion (the Plan Support Agreement Assumption
Motion) with the Bankruptcy Court seeking, in connection with the Bankruptcy Cases, (i) to assume this Agreement and (ii) the authority to pay, when due and payable, the respective reasonable and documented accrued and ongoing
expenses incurred by the Supporting Noteholders in connection with the Restructuring.
(e) Except as contemplated by this Agreement or as
required by, arising out of, relating to or resulting from the Bankruptcy Cases, the Debtors shall use commercially reasonable efforts to conduct their respective businesses in the ordinary course of business, taking into account their status as
debtors in possession.
(f) Within 15 days following the end of each calendar month after the Petition Date, the Debtors shall deliver to
counsel for the Supporting Noteholders a written statement prepared in good faith setting forth the Companys unaudited consolidated net revenue for such calendar month (the amount for a given calendar month as set forth in such written
statement, the Actual Net Revenue).
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7. Agreements of Each Supporting Noteholder.
(a) Subject to the terms and conditions hereof and for so long as no Termination Date shall have occurred, and except as the Debtors may
expressly release each Supporting Noteholder in writing from any of the following obligations, each of the Supporting Noteholders shall:
(i) (A) deliver its duly executed and completed ballot voting its Prepetition Noteholder Claims in favor of the Plan on a
timely basis, provided that its vote on the Plan has been properly solicited pursuant to applicable non-bankruptcy law and sections 1125 and 1126 of the Bankruptcy Code and rules 3017 and 3018 of the Federal Rules of Bankruptcy Procedure; and
(B) not change or withdraw such agreement or vote (or cause or direct such agreement or vote to be changed or withdrawn), provided that such agreement and vote shall be revoked and withdrawn and deemed void ab initio upon occurrence
of a Termination Event that is not timely waived or cured, other than a Termination Event caused by a breach by such Supporting Noteholder;
(ii) not object to, delay, impede, or take any other action to interfere, directly or indirectly, with the Plan Documents, the
Competitive Process (including any motion seeking approval of the orders in respect of the Bidding Procedures and the sale of all or substantially all of the non-cash assets of the Debtors contemplated by the Bidding Procedures), or the approval,
confirmation or consummation of the Plan and the Restructuring, or propose, file, support, or vote for, directly or indirectly, any restructuring, workout, or chapter 11 plan for any of the Debtors other than the Plan; provided,
however, that each Supporting Noteholder shall reserve the right to object to any motion filed by the Debtors with the Bankruptcy Court to the extent the relief contemplated by such motion is inconsistent with the terms of this Agreement;
(iii) not take any other action, including initiating or joining in any legal proceeding, that is materially inconsistent
with the Supporting Noteholders obligations under this Agreement; and
(iv) authorize any actions by the Trustee
necessary to implement any of the obligations of the Supporting Noteholders under this Agreement and to effectuate the Restructuring in accordance therewith; provided that nothing in the Agreement shall be construed to require any Supporting
Noteholder to indemnify the Trustee.
(b) Each Supporting Noteholder hereby agrees that, following delivery of its signature page until
the termination of this Agreement, it shall not Transfer any or all of its Prepetition Noteholder Claims unless, (i) the transferee is a Supporting Noteholder or (ii) simultaneously with such Transfer, the transferee delivers to the
Parties to this Agreement an executed joinder substantially in the form attached hereto as Exhibit C (the Joinder) whereby such transferee agrees in writing to be bound by the terms of this Agreement, in which case
such transferee shall be deemed to be a Supporting Noteholder for all purposes herein from and after the date on which such joinder is executed. Notwithstanding the foregoing, any transferee that
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specifies in the documentation executed in connection with the transfer by a Supporting Noteholder of Prepetition Noteholder Claims that it is acting as a Qualified Marketmaker shall not be
required to execute a Joinder in connection with such Transfer if such Qualifying Marketmaker transfers such Prepetition Noteholder Claims within five Business Days; provided, however, that such Qualified Marketmaker shall require any
transferee of Prepetition Noteholder Claims to execute a Joinder in connection with such Transfer unless such transferee is a Supporting Noteholder. Promptly upon any Transfer of any Prepetition Noteholder Claims to a Qualified Marketmaker (and in
any event within four Business Days following such Transfer), a Supporting Noteholder shall notify the Debtors in writing of the date of such Transfer, the identity of the transferee and the amount of Prepetition Noteholder Claims. Notwithstanding
anything to the contrary in this Section 7(b), no transferee of a Supporting Noteholder (either directly or through a Qualified Marketmarker) that is Deerfield Management Company, L.P. or a fund managed by such entity shall be required
to execute a Joinder, and neither Deerfield Management Company, L.P. nor any fund managed by such entity shall be permitted to become a Supporting Noteholder under this Agreement. Any Transfer of any Prepetition Noteholder Claim that does not comply
with this Section 7(b) shall be deemed void ab initio.
(c) Nothing in this Agreement shall be deemed to limit or
restrict the ability or right of a Supporting Noteholder or any non-public controlled affiliate of the foregoing to purchase or take assignment of any additional Prepetition Noteholder Claims; provided, however, that, in the event a
Supporting Noteholder or any non-public controlled affiliate of the foregoing purchases or takes assignment of any such additional Prepetition Noteholder Claims after the date hereof, such additional Prepetition Noteholder Claims shall immediately
upon such acquisition become subject to the terms of this Agreement without any further action being required (or, in the case of a purchase by a non-public controlled affiliate of a Supporting Noteholder (other than an affiliate acting solely in
its capacity as a Qualified Marketmaker) such Supporting Noteholder, as applicable, shall cause its non-public controlled affiliate to become subject to the terms of this Agreement in connection with such purchased claims). For purposes of this
Section 7(c), a non-public controlled affiliate of a Supporting Noteholder shall not include any such entity that is subject to an investment restriction that, as determined in good faith by its investment manager, limits its
ability to hold illiquid equity securities that would be inconsistent with consummation of a Stand-Alone Plan (as defined in the Plan Term Sheet).
(d) Each Supporting Noteholder agrees that it will consent to, and not opt out of, any mutual release, exculpation or indemnification
provision contained in the Plan that is consistent with the Plan Term Sheet.
8. Representations and Warranties.
(a) Each Supporting Noteholder represents and warrants, severally and not jointly, to the Debtors that the following statements are true,
correct, and complete as of the date hereof:
(i) such Supporting Noteholder is the sole legal owner, beneficial owner, or
holder of investment and voting authority over the aggregate amount of Prepetition Noteholder Claims set forth below its name on the signature pages hereto, and does not legally or beneficially own, or hold investment or voting authority over, any
other Prepetition Noteholder Claims;
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(ii) such Supporting Noteholder has made no prior Transfer of and has not
entered into any agreement or arrangement with respect to its Prepetition Noteholder Claims or the 2016 Notes underlying its Prepetition Noteholder Claims, except for any agreement or arrangement that could not reasonably be expected to materially
and adversely affect its ability to perform its obligations hereunder; and
(iii) such Supporting Noteholder (A) is a
sophisticated investor with respect to the transactions described in this Agreement with sufficient knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of owning and investing in securities
(including any securities that may be issued in connection with the transactions contemplated by the Plan), in making an informed decision with respect thereto and has made its own analysis and decision to enter into this Agreement, (B) is an
accredited investor within the meaning of Rule 501 of the Securities Act of 1933, as amended, and (C) with respect to any new equity in the reorganized Company that may be acquired under a Stand-Alone Plan (as defined
in the Plan Term Sheet), is not acquiring such new equity with a view to a distribution in violation of applicable securities laws.
(b)
Each Party represents and warrants, severally and not jointly, to the other Parties that the following statements, as applicable, are true, correct, and complete as of the date hereof:
(i) It has all requisite, individual, corporate, partnership, or limited liability company power and authority to enter into
this Agreement and to carry out the transactions contemplated hereby, and to perform its obligations hereunder;
(ii) To
the extent applicable, it is duly organized, validly existing, and in good standing under the laws of its state or jurisdiction of organization;
(iii) To the extent applicable, the execution and delivery of this Agreement and the performance of its obligations hereunder
have been duly authorized by all necessary corporate, partnership, or limited liability company action on its part;
(iv)
Subject to obtaining each of the approvals and consents set forth in Section 8(b)(v), the execution, delivery and performance of this Agreement does not and shall not (A) violate any provision of law, rule, or regulation applicable
to it, except to the extent the failure to comply therewith could not reasonably be expected to
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materially and adversely affect its ability to perform its obligations hereunder; (B) to the extent applicable, violate its articles or certificate of incorporation, bylaws, or other
organizational documents, except as contemplated in the Plan Documents; or (C) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it or any
of its subsidiaries is a party, except in the case of the Debtors to the extent such contractual obligation relates to the 2016 Notes or related loan documents or the filing of a case under the Bankruptcy Code or insolvency of the Debtors;
(v) The execution, delivery, and performance by it of this Agreement does not and shall not require any registration or filing
with, consent or approval of, or notice to, or other action to, with or by, any federal, state, or other governmental authority or regulatory body, except such filings, approvals, and consents as (A) may be necessary or required under antitrust
or federal securities laws or regulations; (B) may be necessary and/or required under any laws or regulations of any state; or (C) may be necessary or required in connection with the commencement of the Bankruptcy Cases, the approval of
the Disclosure Statement, and the confirmation and effectiveness of the Plan; and
(vi) Subject in the case of the Debtors
to entry of the Plan Support Agreement Assumption Motion, this Agreement is a legally valid and binding obligation of such Party, enforceable against such Party in accordance with its terms.
9. Survival of Agreement. Each of the Parties acknowledges and agrees that (a) this Agreement is being executed in connection with
negotiations concerning the Restructuring and in contemplation of the commencement of the Bankruptcy Cases; (b) the automatic termination of this Agreement in accordance with the Termination Events set forth in Section 10 hereof
will not violate the automatic stay provisions of the Bankruptcy Code; and (c) each Party hereto hereby waives its right to assert a contrary position in the Bankruptcy Cases with respect to the foregoing.
10. Termination.
(a)
This Agreement shall automatically terminate on the third Business Day (such date, a Termination Date) following any of the termination events set forth in clauses (i) through (xxi) below (each a
Termination Event), unless such termination is waived or modified in writing by the applicable Party or Parties within such three Business Day period (the Grace Period), as set forth below, in which case the
Termination Event so waived shall be deemed not to have occurred, this Agreement shall be deemed to continue in full force and effect, and the rights and obligations of the Parties hereto shall be restored, subject to any modification set forth in
such waiver; provided that this Agreement shall automatically terminate on the date of any Termination Event set forth in clauses (ix), (x), (xii), (xx) and (xxi) without application of the Grace
Period. The waiver or consent for modification of the Requisite
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Supporting Noteholders but not the Debtors, shall be required with respect to any of the Termination Events set forth in clauses (i) through (xi), and
(xiii) through (xvii) below. The waiver or consent for modification of the Debtors but not any of the Supporting Noteholders shall be required with respect to the Termination Events set forth in clauses
(xviii) and (xix) below. Except for the Termination Events set forth in clauses (ix), (x), (xii), (xx) and (xxi) which shall not be subject to the Grace Period, each Termination Event
and, as applicable, Termination Date shall be subject to the Grace Period. Upon the commencement of the Grace Period, the terminating Party shall give written notice to the allegedly breaching Party, and during the Grace Period the allegedly
breaching Party shall have the opportunity to cure such alleged breach.
(i) The Plan and Disclosure Statement (consistent
with this Agreement and the Term Sheet) are not in form and substance reasonably satisfactory to the Requisite Supporting Noteholders by the date Solicitation commences; provided, however, that all documents applicable to the
reorganized Company in the event of a Stand-Alone Plan (as defined in the Plan Term Sheet) must be satisfactory to the Requisite Supporting Noteholders in all respects;
(ii) The Debtors have not commenced the Bankruptcy Cases by November 12, 2014;
(iii) The Bankruptcy Court has not entered an order approving the Plan Support Agreement Assumption Motion within 35 days
following the Petition Date;
(iv) The Bankruptcy Court has not entered an order approving the Bidding Procedures within 35
days following the Petition Date;
(v) The Plan and the Disclosure Statement shall not have been filed with the Bankruptcy
Court within 15 days following the Bid Deadline;
(vi) The Debtors have not commenced Solicitation by March 15, 2015;
(vii) The Plan shall not have been confirmed by the Bankruptcy Court by May 15, 2015;
(viii) The Plan is modified in any material manner that is not reasonably acceptable to the Requisite Supporting Noteholders;
provided, however, that the organizational documents and shareholder agreement applicable to the reorganized Company in the event of a Stand-Alone Plan (as defined in the Plan Term Sheet), and any modifications thereto,
must be satisfactory to the Requisite Supporting Noteholders in all respects;
(ix) Any of the Bankruptcy Cases is
dismissed or converted to a case under chapter 7 of the Bankruptcy Code;
(x) The Bankruptcy Court shall have entered an
order appointing, in respect of any of the Debtors, (A) a trustee under chapter 11 of the Bankruptcy
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Code, (B) a responsible officer, or (C) an examiner with enlarged powers relating to the operation of the business (powers beyond those set forth in subclauses (3) and (4) of
section 1106(a)) under section 1106(b) of the Bankruptcy Code; provided that the appointment of any of the parties identified in the immediately preceding clauses (A) through (C) shall not result in a Termination Event
enforceable by any Supporting Noteholder that requested or supported such appointment;
(xi) The Bankruptcy Court shall
have entered an order terminating the Debtors exclusive right to file or solicit acceptances of a plan; provided that such termination of the Debtors rights shall not result in a Termination Event enforceable by any Supporting
Noteholder that requested or supported such termination or by any Supporting Noteholder that opposed any extension of the Debtors exclusive periods to file or solicit acceptance of the plan;
(xii) Any governmental authority, including the Bankruptcy Court, or any other regulatory authority or court of competent
jurisdiction, enters a final, non-appealable judgment or order (A) declaring this Agreement or any material portion hereof to be unenforceable, (B) preventing consummation of the Plan or the Restructuring or any material portion thereof or
(C) that grants relief that is inconsistent with this Agreement and materially adverse to the Supporting Noteholders;
(xiii) The Debtors withdraw the Plan or any of the Debtors publicly announces its intention not to support the Plan, or the
Debtors file any motion or pleading with the Bankruptcy Court that is inconsistent in any material respect with this Agreement;
(xiv) The orders of the Bankruptcy Court approving the Disclosure Statement or confirming the Plan are stayed, reversed,
vacated, or otherwise modified in a material manner for greater than 14 days;
(xv) Any material breach of any provision of
this Agreement by any of the Debtors (including any such material breach resulting from an action or forbearance pursuant to Section 11 hereof); provided that such Termination Event shall be deemed to have occurred only upon
receipt of written notice by such Debtor of such breach from the Requisite Supporting Noteholders (provided that none of such Supporting Noteholders is then in material breach of its obligations hereunder), and such breach, if capable of being
cured, remains uncured for a period of five Business Days;
(xvi) Any event or condition shall have occurred that,
individually or in the aggregate, has resulted in a Material Adverse Effect that is continuing;
(xvii) As of any
Measurement Date commencing on December 31, 2014 and based on the information set forth in the written statements delivered pursuant to Section 6(f) hereof, (A) the Actual Net Revenue for the calendar month ending
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on such Measurement Date plus the Actual Net Revenue for the immediately preceding calendar month, is less than (B) the Minimum Net Revenue for the calendar month ending on such
Measurement Date plus the Minimum Net Revenue for the immediately preceding calendar month;
(xviii) Any material
breach of this Agreement by any of the Supporting Noteholders; provided that no breach by a Supporting Noteholder or Supporting Noteholders (including for this purpose any transferee of a Supporting Noteholder that is an affiliate of such
Supporting Noteholder) holding less than $10 million in aggregate principal amount of the Prepetition Noteholder Claims shall serve as the basis for termination of this Agreement pursuant to this clause (xviii) of
Section 10(a); and provided further, that such Termination Event shall be deemed to have occurred only upon receipt of written notice by such Supporting Noteholder of such breach from the Debtors (provided that none of the
Debtors are then in material breach of their obligations hereunder), and such breach, if capable of being cured, remains uncured for a period of five Business Days;
(xix) The Debtors delivery of written notice to the Supporting Noteholders terminating this Agreement as the Debtors
determine to be required pursuant to Section 11;
(xx) The Debtors and the Requisite Supporting Noteholders
shall have agreed in writing to terminate this Agreement; or
(xxi) The Effective Date does not occur on or before
June 1, 2015; provided, however, that if on June 1, 2015 all conditions to effectiveness have been or could be satisfied other than the expiration or termination of any waiting period (or any extension thereof) under
applicable antitrust laws, then this Agreement shall remain in effect until such condition is satisfied but in no event beyond December 31, 2015.
(b) If it has not already terminated, the Agreement shall terminate immediately upon the Effective Date.
(c) Upon a termination of this Agreement in accordance with clauses (a) or (b) of this Section 10, no
Party hereto shall have any continuing liability or obligation to any other Party hereunder and the provisions of this Agreement shall have no further force or effect, except for the provisions in Sections 12, 13 and 15 through
23, each of which shall survive termination of this Agreement; provided that no such termination shall relieve any Supporting Noteholder from liability for its breach or non-performance of its obligations hereunder prior to the date of
such termination and the rights of any Party as it relates to such breach or non-performance by any Supporting Noteholder shall be preserved in the event of the occurrence of such breach or non-performance.
11. Fiduciary Duties. Notwithstanding anything to the contrary herein, nothing in this Agreement shall require the Debtors or any
directors or officers of the Debtors (in such persons capacity as a director or officer of the Debtors) to take any action, or to refrain from taking any action, to the extent such action or forbearance is inconsistent with its or their
fiduciary obligations under applicable law, as determined after consultation with outside legal counsel.
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12. No Third-Party Beneficiaries. This Agreement shall be solely for the benefit of the
Parties hereto, and no other Person shall be a third-party beneficiary hereof.
13. Entire Agreement. As of the date this Agreement
becomes effective, this Agreement (and any confidentiality agreements entered into in connection herewith or described in Section 6(a) hereof) constitutes the entire agreement among the Parties hereto with respect to the subject matter
hereof and supersedes all other prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter hereof.
14. Amendment or Waiver.
(a) This Agreement may not be modified, altered, amended, waived, or supplemented except by an agreement in writing signed by each of the
Debtors and the Requisite Supporting Noteholders. Notwithstanding the foregoing, this Section 14(a) may not be modified, altered, or amended except in writing signed by each of the Debtors and the Supporting Noteholders.
(b) Each of the Parties agrees to negotiate in good faith all amendments and modifications to this Agreement as reasonably necessary and
appropriate to consummate the Restructuring. Such agreement shall not be deemed to prejudice or limit in any way any Partys rights under Section 10 of this Agreement.
(c) No waiver of any of the provisions of this Agreement shall be deemed or constitute a waiver of any other provision of this Agreement,
whether or not similar, nor shall any waiver be deemed a continuing waiver.
15. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, including all matters of construction, validity, and performance without giving effect to the conflicts of laws provisions thereof except New York General Obligations Law
Section 5-1401. Each Party hereby irrevocably submits to the jurisdiction of any state court or federal court located in New York County, New York in respect of any suit, action, or proceeding arising out of or relating to this Agreement, and
irrevocably accepts for itself and in respect of its property, generally and unconditionally, jurisdiction of the aforesaid courts. Each Party irrevocably waives, to the fullest extent it may effectively do so under applicable law, any objection
that it may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum.
Nothing herein shall affect the right of any Party to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against any other party in any other jurisdiction. Notwithstanding the foregoing consent
to New York jurisdiction, if the Bankruptcy Cases are commenced, each Party agrees that the Bankruptcy Court shall have exclusive jurisdiction of all matters arising out of or in connection with this Agreement.
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16. Counterparts. This Agreement may be executed in any number of counterparts and by
different Parties in separate counterparts and by facsimile or other electronic means, with the same effect as if all Parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together, and shall
constitute one and the same instrument.
17. Assignment; Severability. Without limiting the obligations of each Supporting
Noteholder pursuant to Section 7(b) hereof, this Agreement is intended to bind and inure to the benefit of the Parties and their respective successors, assigns, heirs, executors, administrators and representatives. Any term or provision
of this Agreement that is invalid or unenforceable in any jurisdiction, shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions
of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to
be only as broad as is enforceable.
18. Specific Performance. It is understood and agreed by the Parties that money damages would
not be a sufficient remedy for any breach of this Agreement by any Party and each non-breaching Party shall be entitled to specific performance and injunctive or other equitable relief as a remedy of any such breach, without the necessity of proving
the inadequacy of monetary damages as a remedy, including an order of the Bankruptcy Court requiring any Party to comply promptly with any of its obligations hereunder.
19. Representation by Counsel. Each Party acknowledges that it has had the opportunity to be represented by counsel in connection with
this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of law or any legal decision that would provide any Party with a defense to the enforcement of the terms of this Agreement against such Party based upon lack
of legal counsel, shall have no application and is expressly waived.
20. Settlement Discussions. This Agreement is part of a
proposed settlement of matters that could otherwise be the subject of litigation among the Parties hereto. Nothing herein shall be deemed an admission of any kind. Pursuant to Federal Rule of Evidence 408, any applicable state rules of evidence and
any other applicable law, foreign or domestic, this Agreement and all negotiations relating thereto shall not be admissible into evidence in any proceeding other than to prove the existence of this Agreement or in a proceeding to enforce the terms
of this Agreement.
21. Confidentiality. Unless legally obligated by law, regulation, subpoena, civil investigative demand, the
rules of any regulatory authority or stock exchange or other compulsory process (including in connection with any governmental or third party approval of the Restructuring or in connection with any litigation concerning the Restructuring), each of
the Parties agrees and acknowledges that, prior to the Petition Date, it will not disclose to any Person the content or any term or provision of this Agreement, other than (a) to the representatives of each such Party who are subject to an
equivalent duty of confidentiality (or, in the case of a Supporting Noteholder, to another Supporting Noteholder), in each case, in connection with the transactions contemplated hereby or (b) in the case of a Supporting Noteholder, as permitted
by any existing confidentiality agreement between such Supporting Noteholder and the Company, the provisions of which shall control in all cases with respect to the obligations under this
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Section 21 prior to the Petition Date. Notwithstanding the foregoing, a Supporting Noteholder may disclose the content or any term or provision of this Agreement, without any notice
to the other Parties, to a regulatory or self-regulatory authority with jurisdiction over its operations generally in the course of such authoritys routine examination or request. From and after the commencement of the Bankruptcy Cases on the
Petition Date, the Parties acknowledge and agree that this Agreement and its contents shall be publicly disclosed by the Debtors, whether in filings by the Debtors with the Bankruptcy Court regarding this Agreement or by the Debtors under applicable
law or stock exchange rule.
22. Fees. The Debtors shall reimburse or pay in cash, on a monthly basis, all reasonable documented
costs and expenses of the Supporting Noteholders, including, without limitation, the fees, costs and expenses of (i) Brown Rudnick LLP and Fox Rothschild LLP incurred prior to termination of this Agreement in accordance with Section 10
hereof, and (ii) Jefferies LLC, which fees, costs and expenses shall be payable pursuant to the terms set forth in the relevant engagement letter with the Company. Such costs and expenses shall be paid within fifteen (15) calendar days
after receipt by the Debtors of a reasonably detailed invoice, which invoice may be redacted to protect privileged and/or material non-public information. Unless otherwise ordered by the Bankruptcy Court, no recipient of such payment shall be
required to file with respect thereto any interim or final fee application with the Bankruptcy Court.
23. Consideration. The
Parties acknowledge that, other than the agreements, covenants, representations, and warranties set forth herein and to be included in the Plan Documents, no consideration shall be due or paid to any Supporting Noteholder in exchange for its
obligations under this Agreement.
24. Notice. Any notices or other communications in connection with this Agreement shall be in
writing and shall be deemed to have been duly given when delivered in person or upon confirmation of receipt when transmitted by email or on receipt after dispatch by registered or certified mail, postage prepaid, or on the next Business Day if
transmitted by national overnight courier, addressed in each case as follows:
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(a) |
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If to the Debtors: |
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Dendreon Corporation |
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1301 2nd Avenue |
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Seattle, WA 98101 |
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gcox@dendreon.com |
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Attention: Gregory R. Cox |
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With a copy to: |
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Skadden, Arps, Slate, Meagher & Flom LLP |
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Four Times Square |
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New York, NY 10036 |
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ken.ziman@skadden.com |
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Attention: Ken Ziman, Esq. |
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155 N. Wacker Drive Chicago, IL,
60606 |
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felicia.perlman@skadden.com |
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Attention: Felicia Perlman, Esq. |
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500 Boylston Street |
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Boston, MA 02116 |
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graham.robinson@skadden.com |
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Attention: Graham Robinson, Esq. |
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(b) |
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If to a Supporting Noteholder, to the address for such Supporting Noteholder provided on the signature pages
hereto. |
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With a copy to: |
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Brown Rudnick LLP |
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One Financial Center |
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Boston, MA 02111 |
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spohl@brownrudnick.com |
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Attention: Steven D. Pohl, Esq. |
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7 Times Square |
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New York, NY 10036 |
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jstorz@brownrudnick.com |
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Attention: John F. Storz, Esq. |
(Signature Pages Follow)
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.
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DENDREON CORPORATION |
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By: |
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/s/ Robert L. Crotty |
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Name: |
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Robert L. Crotty |
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Title: |
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Executive Vice President, General Counsel and Secretary |
Signature Page to Plan
Support Agreement
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.
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DENDREON DISTRIBUTION, LLC |
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By: |
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/s/ Robert L. Crotty |
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Name: |
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Robert L. Crotty |
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Title: |
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Vice President, General Counsel and Secretary |
Signature Page to Plan
Support Agreement2
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.
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DENDREON HOLDINGS, LLC |
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By: |
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/s/ Robert L. Crotty |
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Name: |
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Robert L. Crotty |
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Title: |
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Vice President, General Counsel and Secretary |
Signature Page to Plan
Support Agreement
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.
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DENDREON MANUFACTURING, LLC |
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By: |
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/s/ Robert L. Crotty |
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Name: |
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Robert L. Crotty |
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Title: |
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Vice President, General Counsel and Secretary |
Signature Page to Plan
Support Agreement
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ARISTEIA MASTER, L.P. |
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By: |
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/s/ William R. Techar |
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By: |
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/s/ Andrew B. David |
Name: |
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William R. Techar |
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Name: |
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Andrew B. David |
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Manager, Aristeia Capital, L.L.C. |
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Title: |
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General Counsel, |
Address |
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136 Madison Avenue, 3rd Floor |
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Aristeia Capital, L.L.C. |
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New York, NY 10016 |
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Telephone: |
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212 842-8900 |
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Facsimile: |
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212 842-8901 |
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Signature Page to Plan
Support Agreement
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COMPASS ESMA L.P. |
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By: |
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/s/ William R. Techar |
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By: |
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/s/ Andrew B. David |
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William R. Techar |
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Name: |
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Andrew B. David |
Title: |
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Manager, Aristeia Capital, L.L.C. |
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Title: |
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General Counsel, |
Address |
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136 Madison Avenue, 3rd Floor |
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Aristeia Capital, L.L.C. |
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New York, NY 10016 |
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Telephone: |
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212 842-8900 |
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Facsimile: |
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212 842-8901 |
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Signature Page to Plan
Support Agreement
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COMPASS TSMA L.P. |
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By: |
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/s/ William R. Techar |
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By: |
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/s/ Andrew B. David |
Name: |
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William R. Techar |
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Name: |
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Andrew B. David |
Title: |
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Manager, Aristeia Capital, L.L.C. |
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Title: |
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General Counsel, |
Address |
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136 Madison Avenue, 3rd Floor |
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Aristeia Capital, L.L.C. |
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New York, NY 10016 |
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Telephone: |
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212 842-8900 |
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Facsimile: |
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212 842-8901 |
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Signature Page to Plan
Support Agreement
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Windermere Ireland Fund, PLC |
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By: |
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/s/ William R. Techar |
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By: |
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/s/ Andrew B. David |
Name: |
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William R. Techar |
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Name: |
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Andrew B. David |
Title: |
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Manager, Aristeia Capital, L.L.C. |
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Title: |
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General Counsel, |
Address |
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136 Madison Avenue, 3rd Floor |
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Aristeia Capital, L.L.C. |
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New York, NY 10016 |
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Telephone: |
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212 842-8900 |
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Facsimile: |
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212 842-8901 |
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Signature Page to Plan
Support Agreement
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EMPYREAN CAPITAL PARTNERS, LP |
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By: |
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/s/ C. Martin Meekins |
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C. Martin Meekins |
Title: |
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Authorized Person |
Address |
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10250 Constellation Boulevard, Suite 2950 |
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Los Angeles, CA 90067 |
Telephone: |
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(310) 843-3071 |
Facsimile: |
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(310) 843-3099 |
Signature Page to Plan
Support Agreement
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PARTNER FUND MANAGEMENT, L.P., for each of the below funds as its investment advisor |
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PFM Healthcare Master Fund, L.P. |
PFM Healthcare Opportunities Master Fund, L.P. |
PFM Oncology Opportunities Master Fund, L.P. |
PFM Diversified Master Fund, L.P. |
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By: |
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/s/ Kimberly A. Summe |
Name: |
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Kimberly A. Summe |
Title: |
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Chief Operating Officer and General Counsel |
Address |
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Four Embarcadero Center, Suite 3500 |
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San Francisco, CA 94111 |
Telephone: |
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(415) 281-1025 |
Facsimile: |
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(415) 281-1070 |
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PARTNER INVESTMENT MANAGEMENT, L.P., for each of the below funds as its investment advisor |
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Partner Healthcare Principals Fund L.P. |
PFM Diversified Principals Fund, L.P. |
PFM Diversified Eureka L.P. |
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By: |
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/s/ Kimberly A. Summe |
Name: |
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Kimberly A. Summe |
Title: |
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Chief Operating Officer and General Counsel |
Address |
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Four Embarcadero Center, Suite 3500 |
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San Francisco, CA 94111 |
Telephone: |
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(415) 281-1025 |
Facsimile: |
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(415) 281-1070 |
Signature Page to Plan
Support Agreement
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WOLVERINE FLAGSHIP FUND TRADING LIMITED |
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By: |
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/s/ Ken Nadel |
Name: |
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Ken Nadel |
Title: |
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Chief Operating Officer, Wolverine Asset Mgmt, its investment advisor |
Address |
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175 W. Jackson Blvd., Suite 340 Chicago, IL
60604 |
Telephone: |
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312 884-4000 |
Facsimile: |
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312 884-4001 |
Signature Page to Plan
Support Agreement
EXHIBIT A
PLAN TERM SHEET
(see
attached)
Dendreon Corporation
Summary Of Principal Terms Of Proposed Plan
(This Plan Term Sheet)
THIS PLAN
TERM SHEET SUMMARIZES TERMS AND CONDITIONS OF A PROPOSED RESTRUCTURING OF THE DEBTORS (AS DEFINED BELOW). THE TERMS SET FORTH IN THIS PLAN TERM SHEET ARE BEING PROVIDED AS PART OF A COMPREHENSIVE COMPROMISE, EACH ELEMENT OF WHICH IS CONSIDERATION
FOR THE OTHER ELEMENTS AND AN INTEGRAL ASPECT OF THE PROPOSED RESTRUCTURING OF THE DEBTORS. THE PROPOSED RESTRUCTURING DESCRIBED HEREIN WOULD BE IMPLEMENTED BY MEANS OF A PREARRANGED PLAN OF REORGANIZATION OR LIQUIDATION, AS THE CASE MAY
BE (THE PLAN), FOR THE DEBTORS UNDER CHAPTER 11 OF TITLE 11 OF THE UNITED STATES CODE, 11 U.S.C. §§ 101 ET SEQ. (THE BANKRUPTCY CODE). THIS PLAN TERM SHEET IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES OR
SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN PURSUANT TO SECTION 1125 OF THE BANKRUPTCY CODE. ANY SUCH OFFER OR SOLICITATION WILL BE MADE ONLY IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS AND/OR PROVISIONS OF THE BANKRUPTCY CODE. THIS
OUTLINE IS BEING PROVIDED IN FURTHERANCE OF SETTLEMENT DISCUSSIONS AND IS ENTITLED TO PROTECTION PURSUANT TO FED. R. EVID. 408 AND ANY SIMILAR RULE OF EVIDENCE. THE TRANSACTIONS DESCRIBED IN THIS PLAN TERM SHEET ARE SUBJECT IN ALL RESPECTS TO, AMONG
OTHER THINGS, THE APPLICABLE PLAN SUPPORT AGREEMENT WITH THE APPLICABLE SUPPORTING NOTEHOLDERS PARTY THERETO, AND DEFINITIVE DOCUMENTATION, INCLUDING THE PLAN, APPROPRIATE DISCLOSURE MATERIAL, AND RELATED DOCUMENTS.
CERTAIN KEY TERMS
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Term |
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Description |
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Proposed Filing Entities |
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Dendreon Corporation (the Company, and once reorganized, the Reorganized Company) and its wholly owned United States
subsidiaries, Dendreon Holdings, LLC, Dendreon Distribution, LLC and Dendreon Manufacturing, LLC (collectively, the Debtors). |
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Supporting Noteholders |
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Holders named in the applicable Plan Support Agreements with the Company (the Supporting Noteholders) of the Companys 2016
Notes issued under the First Supplemental Indenture, dated January 20, 2011, to the Base Indenture, dated March 16, 2007, with The Bank of New York Mellon Trust Company, N.A., as trustee (the 2016 Notes). |
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Proposed Filing Date/Venue |
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November 9, 2014 / Delaware. |
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Stand-Alone Plan |
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On the effective date of the Plan (the
Effective Date), the Reorganized Company shall issue new common stock in the Reorganized Company (the New Common Stock), and holders of claims and interests shall receive the treatment as set forth in Exhibit 1 with
respect to the Stand-Alone Plan. The Stand-Alone Plan is subject to the
competitive process described below (the Competitive Process) to sell all or substantially all of the non-cash assets of the Debtors in a 363 Sale (as defined below) or a Plan Sale (as defined below) as an alternative to the Stand-Alone
Plan. A Qualified Bid (as defined in the Bidding Procedures) in the Competitive Process for all or substantially all of the non-cash assets of the Debtors in a 363 Sale or a Plan Sale must have a value in excess of
$275,000,000 as determined pursuant to the Bidding Procedures (as defined below). |
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Term |
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Description |
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The Competitive Process shall run from the petition date and in parallel with the process for seeking confirmation of the Stand-Alone Plan,
but shall cease in the event that no Qualified Bids are received by the bid deadline set forth in the Bidding Procedures (the Bid Deadline). If no Qualified Bids are received by the Bid Deadline, the Debtors shall prosecute confirmation
of the Stand-Alone Plan, and the Company shall emerge from bankruptcy as a reorganized entity. |
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363 Sale |
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A purchase of all or substantially all of the Debtors non-cash assets in a sale pursuant to section 363 of the Bankruptcy Code,
followed by a plan of liquidation of the Debtors in which all holders of claims and interests shall receive the treatment as set forth in Exhibit 1 with respect to the 363 Sale. |
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Plan Sale |
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A recapitalization transaction effectuated through the Plan in which the Bidder (as defined below) acquires New Common Stock of the
Reorganized Company, in which case all holders of claims and interests shall receive the treatment set forth as set forth in Exhibit 1 with respect to the Plan Sale. |
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Competitive Process |
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Prospective buyers (the Bidders) may
bid: (i) in a
363 Sale; OR (ii) in a
Plan Sale; in each case subject to the applicable requirements set
forth in the bidding procedures attached hereto as Exhibit 2 (the Bidding Procedures).
If one or more Bidders submits a Qualified Bid and a Successful Bidder (as defined in the Bidding Procedures) enters into an asset purchase agreement or an
investment agreement (as the case may be) at the Auction (as defined below) (or, in the event that an Auction is not conducted because only one Qualified Bid is received by the Bid Deadline, upon entry into such asset purchase agreement or
investment agreement (as the case may be) in accordance with the Bidding Procedures, the Debtors shall prosecute confirmation of the applicable plan scenario (i.e., 363 Sale or Plan Sale). |
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Bidding Procedures |
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On the petition date, the Debtors shall file a motion seeking approval of the Bidding Procedures to govern the Competitive Process, and shall
seek a hearing date as soon as practicable thereafter but no later than 30 days after the petition date. Among other things, the Bidding Procedures shall set forth the deadline and requirements for the submission of a Qualified Bid, and shall set
the date of the Auction and the deadline to file any objections to the results of the Auction. Supporting Noteholders shall be permitted to submit a cash bid in accordance with the Bidding Procedures. |
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Auction or Acceptance of Qualified Bid |
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An auction (the Auction) shall be held
if the Company receives more than one Qualified Bid, and shall occur within 5 business days after the Bid Deadline unless otherwise determined by the Company.
In the event that the Company receives only one Qualified Bid by the Bid Deadline, the Company shall promptly accept such Qualified Bid and enter into an asset
purchase agreement or investment agreement (as the case may be) with respect to such Qualified Bid no later than 5 business days following the Bid Deadline. |
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Releases, Indemnification and Exculpation |
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To the fullest extent permitted by applicable law, the Plan shall provide for comprehensive mutual release, indemnification and exculpation
provisions from and for the benefit of the Debtors, the Supporting Noteholders, and the Trustee for the 2016 Notes, and all individuals serving, or who have served since the petition date, as a manager, director, managing member, officer, partner,
shareholder, or employee of any of the foregoing and the attorneys and other advisors to each of the foregoing. |
2
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Term |
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Description |
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Conditions to Effectiveness |
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The Plan shall contain such conditions to effectiveness of the applicable Plan alternatives customary in plans of reorganization or plans of
liquidation, as the case may be, of such type. |
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Milestones |
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Milestones related to the Plan and the Competitive Process shall be as set forth in Section 10 of the Plan Support Agreement and the
Bidding Procedures, respectively. |
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Assumed Contracts |
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In a Stand-Alone Plan, the Debtors shall identify in writing to the Supporting Noteholders the contracts proposed to be assumed
and rejected at least 15 business days prior to the hearing seeking to confirm the Plan and shall consult with the Supporting Noteholders in connection therewith. |
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Investor Rights |
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In a Stand-Alone Plan, usual and customary investor rights acceptable in form and substance in all respects to the Supporting
Noteholders, including as to status as a private company, board selection, rights under a shareholders agreement and trading restrictions. |
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Management Incentive Plan |
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In a Stand-Alone Plan, any Management Incentive Plan will be acceptable in all respects to the Supporting Noteholders, and the
Debtors will provide reasonable assistance and cooperation in recommending proposed terms for such plan. |
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Interpretation |
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In the event of any inconsistency between this Plan Term Sheet and the Bidding Procedures, the terms of the Bidding Procedures shall
control. |
* * * * *
3
EXHIBIT 1
CLASSIFICATION, IMPAIRMENT AND TREATMENT OF CLAIMS
Set forth below are the proposed classification, impairment and treatment of claims under the Plan, including relevant differences among the three Plan
alternatives:
Stand-Alone Plan
363 Sale
Plan
Sale
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Claims |
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Impairment |
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Treatment |
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Administrative Expenses and Priority Tax Claims |
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N/A |
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All allowed administrative expenses and allowed priority tax claims shall be paid in full in cash or upon such other terms as the applicable
Debtors and the holder thereof may agree, or otherwise be unimpaired. Reserves will be established for any disputed administrative expense and priority tax claims and an escrow shall be established for the payment of professional fee claims subject
to the fee application and approval process. |
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Class 1
Other Priority
Claims |
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Unimpaired |
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To the extent applicable, all allowed other
priority claims shall be reinstated or paid in full in cash. Not entitled to vote;
conclusively deemed to accept the Plan. |
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Class 2
Secured Claims |
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Unimpaired |
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To the extent applicable, all allowed secured
claims shall, at the Debtors option, be paid in full in cash on, or promptly following, the Effective Date or be treated in a manner so as to be unimpaired within the meaning of Bankruptcy Code section 1124.
Not entitled to vote; conclusively deemed to accept the Plan. |
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Class 3
Noteholders Claims
(2016 Notes) |
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Impaired |
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Stand-Alone Plan
Holders of 2016 Notes shall receive, on a pro rata basis with holders of General Unsecured
Claims to the extent set forth below following the determination of treatment of General Unsecured Claims set forth below, shares of New Common Stock of the Reorganized Company, subject to dilution for New Common Stock, if any, issued in connection
with the Management Incentive Plan. 363 Sale OR Plan Sale
Holders of 2016 Notes shall receive, on a pro rata basis with holders of Class 4 General
Unsecured Claims, distributable cash or other assets of the Debtors estates, in an amount not to exceed 100% of the amount of their allowed claims plus interest.
Entitled to vote. |
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Claims |
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Impairment |
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Treatment |
Class 4
General Unsecured Claims |
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TBD |
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Stand-Alone Plan
Treatment of general unsecured claims other than those based on the 2016 Notes (the General Unsecured Claims) to be reasonably determined by the
Debtors and Supporting Noteholders holding, in the aggregate, at least two-thirds in aggregate principal amount of the 2016 Notes. In the event that General Unsecured Claims are not reinstated or paid in full, it is anticipated that a convenience
class may be appropriate for claims below a certain value. Voting TBD. |
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Impaired |
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363 Sale OR Plan Sale
General Unsecured Claims shall receive, on a pro rata basis with holders of Class 3 Noteholders Claims, distributable cash or other assets of the
Debtors estates, in an amount not to exceed 100% of the amount of their allowed claims plus interest.
Entitled to vote. |
Class 5
Intercompany Claims |
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Unimpaired |
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Stand-Alone Plan OR Plan Sale
Intercompany claims (including between Debtors and non-Debtor subsidiaries that are wholly owned by Debtors) shall be reinstated or compromised as determined
by the Debtors. Not entitled to vote; conclusively deemed to accept the
Plan. |
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Impaired |
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363 Sale
Intercompany claims shall be canceled or otherwise extinguished.
Not entitled to vote; deemed to reject the Plan. |
Class 6
Subordinated Claims |
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Impaired |
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Stand-Alone Plan
Applicable, holders of claims subordinated by Bankruptcy Code sections 510(b) and 510(c) will receive no distribution under the Plan.
363 Sale OR Plan Sale
Subject to payment in full of all allowed claims plus interest to the extent applicable,
holders of claims subordinated by Bankruptcy Code sections 510(b) and 510(c) (together with holders of Class 7 interests) shall receive their pro rata share of any other distributable cash or other assets of the Debtors estates. No recovery is
anticipated by holders of Class 6 interests. Not entitled to vote; deemed to reject
the Plan. |
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Claims |
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Impairment |
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Treatment |
Class 7
Existing Common Stock |
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Impaired |
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Stand-Alone Plan
Existing shares of the Companys common stock shall be canceled; the holders thereof will receive no distribution under the Plan.
363 Sale OR Plan Sale
Subject to payment in full of all allowed claims plus interest to the extent applicable,
holders of existing shares of the Companys common stock (together with holders of Class 6 claims) shall receive their pro rata share of any other distributable cash or other assets of the Debtors estates, and such shares shall be
canceled. No recovery is anticipated by holders of Class 7 interests. Not entitled to
vote; deemed to reject the Plan. |
Class 8
Other Interests |
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Impaired |
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Other interests, options, warrants, call rights, puts, awards, or other agreements to acquire existing common stock in the Debtors shall be canceled; the
holders thereof will receive no distribution under the Plan. Not entitled to vote;
deemed to reject the Plan. |
Class 9
Intercompany Interests |
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Unimpaired |
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Stand-Alone Plan OR Plan Sale
Equity interests in a Debtor held by another Debtor shall be reinstated.
Not entitled to vote; conclusively deemed to accept the Plan. |
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Impaired |
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363 Sale
Equity interests in a Debtor held by another Debtor shall be canceled.
Not entitled to vote; deemed to reject the Plan. |
EXHIBIT 2
BIDDING PROCEDURES
(see
attached)
BIDDING PROCEDURES1
By the Motion, Dendreon Corporation and its direct and indirect subsidiaries that are debtors and debtors in possession in the jointly
administered chapter 11 cases pending in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court) under Case
No. 14-[ ] (together the Debtors),2 sought approval of, among other things, the procedures
through which they will determine the highest or otherwise best offer for the sale of substantially all of their non-cash assets (the Acquired Assets).
On [], 2014 the Bankruptcy Court entered an order (the
Bidding Procedures Order), which, among other things, authorized the Debtors to determine the highest or otherwise best offer for the Acquired Assets through the process and procedures set forth below (the Bidding
Procedures). The Bidding Procedures provide that the Debtors may also consider bids in the form of a recapitalization transaction effectuated through a chapter 11 plan of reorganization, subject to the requirements set forth herein (a
Chapter 11 Plan Bid). In addition, the Debtors may designate a stalking horse bidder (the Stalking Horse Bidder) in accordance with the procedures set forth below.
Acquired Assets to Be Sold
The Debtors are offering for sale all of the Acquired Assets. Except in the case of a Chapter 11 Plan Bid and except as otherwise provided in
the Acquisition Agreement or a Modified Acquisition Agreement (both as defined below) submitted by a Successful Bidder (as defined below) (including any exhibits or schedules thereto) all of the Debtors right, title and interest in and to the
Acquired Assets subject thereto shall be sold free and clear of any pledges, liens, security interests, encumbrances, claims, charges, options and interests thereon (collectively, the Interests) to the maximum extent permitted by
section 363 of the Bankruptcy Code, with such Interests to attach to the net proceeds of the sale of the Acquired Assets with the same validity and priority as such Interests applied against the Acquired Assets. More detail regarding the Acquired
Assets will be posted in the electronic data room.
Bidding Process
The Debtors and their advisors shall, subject to the other provisions of these Bidding Procedures, including the consultation obligations set
forth herein and the Bidding Procedures Order, (i) determine whether any person is a Qualified Bidder (as defined below), (ii) coordinate the efforts of Qualified Bidders in conducting their due diligence investigations, (iii) receive
offers from Qualified Bidders, (iv) negotiate any offers made to purchase the Acquired Assets, and (v) determine if any Qualified Bidder should be selected as a Stalking Horse Bidder.
1 |
Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the motion for approval of, among other things, the Bidding Procedures (the Motion).
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2 |
The Debtors and the last four digits of their respective taxpayer identification numbers are as follows: Dendreon Corporation (3193), Dendreon Holdings, LLC (8047), Dendreon Distribution, LLC (8598) and Dendreon
Manufacturing, LLC (7123). The address of the Debtors corporate headquarters is 1301 2nd Avenue, Seattle, Washington 98101. |
Key Dates For Potential Competing Bidders
The Bidding Procedures provide interested parties with the opportunity to qualify for and participate in an auction to be conducted by the
Debtors (the Auction) and to submit competing bids for the Acquired Assets. The Debtors shall assist Qualified Bidders in conducting their respective due diligence investigations and shall accept Bids (as defined below) until
January 27, 2015 at 5:00 p.m. (prevailing Eastern Time) (the Bid Deadline).
The key dates for the sale
process are as follows:
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December 29, 2014 |
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Stalking Horse Deadline |
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January 27, 2015 at 5:00 P.M. EST |
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Bid Deadline - Due Date for Bids and Deposits |
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February 3, 2015 at 10:00 A.M. EST |
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Auction |
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January 27, 2015 at 10:00 A.M. EST |
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Objection Deadline in Connection with Sale of Acquired Assets to a Successful
Bidder3 |
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On or before February 10, 2015 at [] EST |
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Sale Hearing |
In the event that the Successful Bid is a Chapter 11 Plan Bid, the Sale Hearing will not occur and the Debtors
will prosecute confirmation of a plan of reorganization consistent with such Chapter 11 Plan Bid.
Procedures for the Designation of
a Stalking Horse Bidder
The Debtors, in consultation with the Consultation Parties (as defined herein), may select a Stalking
Horse Bidder for the Acquired Assets for the purposes of establishing a minimum acceptable bid with which to begin the Auction (the Stalking Horse Bid) and provide such Stalking Horse Bidder with the Bid Protections described in
the Sale Motion. The Debtors shall have until December 29, 2014 (the Stalking Horse Deadline) to select a Qualified Bid of a Qualified Bidder to be a Stalking Horse Bid. The Debtors shall finalize a purchase agreement with a
Stalking Horse Bidder (the Stalking Horse Agreement) by no later than the Stalking Horse Deadline. Within one (1) day following the Stalking Horse Deadline the Debtors shall file with the Bankruptcy Court a notice (the
Stalking Horse Notice) of such Stalking Horse Bid and
3 |
This objection deadline applies to all objections to the Sale Motion and the Sale of the Acquired Assets to a Successful Bidder, with the exception of
objections related to adequate assurance performance by the Successful Bidder or any changes to the Acquisition Agreement. |
2
a copy of the Stalking Horse Agreement. The Debtors shall serve such Stalking Horse Notice on (i) all entities known to have expressed an interest in a transaction with respect to the
Acquired Assets during the past twelve (12) months, (ii) all entities known to have asserted any lien, claim, interest or encumbrance in or upon any of the Acquired Assets, (iii) counsel to the Supporting Noteholders, and
(iv) counsel to any official committee appointed in the Chapter 11 Cases, if any.
Due Diligence
Access to Diligence Materials.
To participate in the bidding process and to receive access to due diligence (the Diligence Materials), a party must
submit to the Debtors (i) an executed confidentiality agreement substantially in the form attached hereto as Exhibit A or such other form reasonably satisfactory to the Debtors, and (ii) reasonable evidence demonstrating the
partys financial capability to consummate a sale transaction for the Acquired Assets or a recapitalization transaction pursuant to a chapter 11 plan of reorganization (any such transaction, a Transaction) as reasonably
determined by the Debtors, in consultation with the Consultation Parties. A party who qualifies for access to Diligence Materials pursuant to the prior sentence shall be a Qualified Bidder.
The Debtors will afford any Qualified Bidder the time and opportunity to conduct reasonable due diligence, as determined by the Debtors,
including reasonable access to management, access to the electronic data room and other information that a Qualified Bidder may reasonably request; provided, however, that the Debtors shall not be obligated to furnish any due diligence
information after the Bid Deadline to any party that has not submitted a Qualified Bid (as defined below). The Debtors reserve the right to withhold any Diligence Materials that the Debtors determine are business-sensitive or otherwise not
appropriate for disclosure to a Qualified Bidder who is a competitor of the Debtors or is affiliated with any competitor of the Debtors. Neither the Debtors nor their representatives shall be obligated to furnish information of any kind whatsoever
to any person that is not determined to be a Qualified Bidder.
All due diligence requests must be directed to Lazard
Frères & Co. LLC, 30 Rockefeller Plaza, New York, NY 10020, to the attention of Sven Pfeiffer (sven.pfeiffer@lazard.com; Phone: 212-632-6583; Fax: 212-332-8365).
Due Diligence from Qualified Bidders.
Each Qualified Bidder shall comply with all reasonable requests for additional information and due diligence access by the Debtors or their
advisors regarding the ability of such Qualified Bidder, as applicable, to consummate its contemplated transaction. Failure by a Qualified Bidder to comply with requests for additional information and due diligence access may be a basis for the
Debtors, in consultation with the Consultation Parties, to determine that such bidder is no longer a Qualified Bidder. Failure by a Qualified Bidder to comply with requests for additional information and due diligence access may be a basis for the
Debtors, in consultation with the Consultation Parties, to determine that a bid made by such Qualified Bidder is not a Qualified Bid.
3
Auction Qualification Process
To be eligible to participate in the Auction, each offer, solicitation or proposal (each, a Bid), must be reasonably
determined by the Debtors to satisfy each of the following conditions:
|
(a) |
Good Faith Deposit: Each Bid must be accompanied by a deposit in the amount of ten percent (10%) of the purchase price contained in the Modified Acquisition Agreement (defined below), before any reductions
for assumed liabilities, or, in the case of a Chapter 11 Plan Bid, ten percent (10%) of the amount of the capital investment contemplated by such bid, before any reductions for assumed liabilities, to an interest-bearing escrow account to be
identified and established by the Debtors (the Good Faith Deposit). |
|
(b) |
Same or Better Terms: Each Bid must be on terms that the Debtors, in their business judgment and after consulting with the Consultation Parties, determine are the same or better than the terms of either
(i) the Acquisition Agreement, or (ii) in the event the Debtors enter into a Stalking Horse Agreement, the Stalking Horse Agreement. |
|
(c) |
Executed Agreement: Each Bid must be based on the proposed acquisition agreement, which shall be prepared by the Debtors in Consultation with the Consultation Parties and shall be filed with the Bankruptcy Court
no later than the day after the Stalking Horse Deadline (the Acquisition Agreement) and must include executed transaction documents, signed by an authorized representative of such Qualified Bidder, pursuant to which the Qualified
Bidder proposes to effectuate a Transaction (a Modified Acquisition Agreement).4 Each Bid must also include a copy of the Acquisition Agreement marked against the Modified
Acquisition Agreement to show all changes requested by the Qualified Bidder (including the inclusion of the purchase price). Each Modified Acquisition Agreement must provide (1) a commitment to close within two business days after all closing
conditions are met and (2) a representation that the Qualified Bidder will (a) make all necessary filings under the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act), and (b) submit all
necessary filings under the HSR Act within ten (10) days following the effective date of the Modified Acquisition Agreement. |
4 |
If the Bid is a Chapter 11 Plan Bid and the Debtors have not filed a form of investment agreement with the Bankruptcy Court within at least ten (10) business days prior to the Bid Deadline, any Qualified Bidder
submitting a Chapter 11 Plan Bid shall submit a Modified Acquisition Agreement marked as appropriate. If a form of investment agreement has been filed, any Qualified Bidder submitting a Chapter 11 Plan Bid shall submit a modified investment
agreement (a Modified Investment Agreement). All requirements of these Bid Procedures that apply to a Modified Acquisition Agreement shall apply to a Modified Investment Agreement. |
4
In the event the Debtors enter into a Stalking Horse Agreement each Bid must include a copy of
the Modified Acquisition Agreement marked against the Stalking Horse Agreement.
|
(d) |
Minimum Bid: A Bid (including a Chapter 11 Plan Bid) for all or substantially all of the Debtors non-cash assets must propose a minimum purchase price, including any assumption of liabilities and any
earnout or similar provisions, that in the Debtors reasonable business judgment, after consulting with the Consultation Parties, has a value greater than $275,000,0005. |
In the event that the Debtors enter into a Stalking Horse Agreement, a Bid for all or substantially all of the Debtors assets (or in the
case of a Chapter 11 Plan Bid for the equity of reorganized Dendreon) must propose a minimum purchase price, including any assumption of liabilities and any earnout or similar provisions, that in the Debtors reasonable business judgment, after
consulting with the Consultation Parties, has a value greater than (i) the purchase price set forth in any Stalking Horse Purchase Agreement, (ii) the Break-Up Fee (as defined in the Sale Motion), if any (iii) the Expense
Reimbursement Amount (as defined in the Sale Motion), if any, (iv) the Assumed Liabilities (as defined in the Stalking Horse Agreement), as applicable, and (v) the Overbid Amount6, as
applicable the sum of which shall be the Stalking Horse Auction Minimum Bid Amount.
|
(e) |
Designation of Assigned Contracts and Leases: A Bid must identify any and all executory contracts and unexpired leases of the Debtors that the Qualified Bidder wishes to be assumed and, with respect to any Bid
that is not a Chapter 11 Plan Bid, assigned to the Qualified Bidder at closing, pursuant to a Transaction. A Bid must specify whether the Debtors or the Qualified Bidder will be responsible for any cure costs associated with such assumption, and
include a good faith estimate of such cure costs (which estimate may be provided by the Debtors). |
|
(f) |
Designation of Assumed Liabilities: A Bid must identify all liabilities which the Qualified Bidder proposes to assume. |
|
(g) |
Corporate Authority: A Bid must include written evidence reasonably acceptable to the Debtors demonstrating appropriate corporate authorization to consummate the proposed Transaction; provided that, if the
Qualified Bidder is an entity specially formed for the purpose of effectuating the Transaction, then the Qualified Bidder must furnish written evidence reasonably acceptable to the Debtors of the approval of the Transaction by the equity holder(s)
of such Qualified Bidder. |
5 |
To the extent a Supporting Noteholder submits a Bid, such Bid must be a cash Bid. |
6 |
The Overbid Amount shall be $1 million. |
5
|
(h) |
Disclosure of Identity of Qualified Bidder: A Bid must fully disclose the identity of each entity that will be bidding for or purchasing the Acquired Assets or otherwise participating in connection with such Bid,
and the complete terms of any such participation, including any agreements, arrangements or understandings concerning a collaborative or joint bid or any other combination concerning the proposed Bid. |
|
(i) |
Proof of Financial Ability to Perform: A Bid must include written evidence that the Debtors may reasonably conclude, in consultation with their advisors and the Consultation Parties, demonstrates that the
Qualified Bidder has the necessary financial ability to close the Transaction and provide adequate assurance of future performance under all contracts to be assumed and assigned in such Transaction. Such information must include,
inter alia, the following: |
|
(1) |
contact names and numbers for verification of financing sources; |
|
(2) |
written evidence of the Qualified Bidders internal resources and proof of any debt funding commitments from a recognized banking institution and, if applicable, equity commitments in an aggregate amount equal to
the cash portion of such Bid or the posting of an irrevocable letter of credit from a recognized banking institution issued in favor of the Debtors in the amount of the cash portion of such Bid, in each case, as are needed to close the Transaction;
|
|
(3) |
the Qualified Bidders current financial statements (audited if they exist) or other similar financial information reasonably acceptable to the Debtors; |
|
(4) |
a description of the Qualified Bidders pro forma capital structure (and, in the case of a Chapter 11 Plan Bid, the Debtors pro forma capital structure); and |
|
(5) |
any such other form of financial disclosure or credit-quality support information or enhancement reasonably acceptable to the Debtors, in consultation with the Consultation Parties, demonstrating that such Qualified
Bidder has the ability to close the Transaction. |
|
(j) |
Regulatory and Third Party Approvals: A Bid must set forth each regulatory and third-party approval required for the Qualified Bidder to consummate the Transaction, and the time period within which the Qualified
Bidder expects to receive such regulatory and third-party approvals, and the Debtors, in consultation with the Consultation Parties, may consider the timing of such approvals, and any actions the Qualified Bidder will take to ensure receipt of such
approval(s) as promptly as possible, when considering the other Bid Assessment Criteria (defined below). |
|
(k) |
Contact Information and Affiliates: A Bid must provide the identity and contact information for the Qualified Bidder and full disclosure of any parent companies of the Qualified Bidder. |
6
|
(l) |
Contingencies: A Bid may not be conditioned on obtaining financing or any internal approval, or on the outcome or review of due diligence. |
|
(m) |
Irrevocable: A Bid must be irrevocable until the Good Faith Deposit associated with such Bid must be returned in accordance with the terms hereof (or, if the Successful Bid is a Chapter 11 Plan Bid, until
confirmation of such plan of reorganization), provided that if such Bid is accepted as the Successful Bid or the Backup Bid (as defined below), such Bid shall continue to remain irrevocable, subject to the terms and conditions of the Bidding
Procedures. |
|
(n) |
Compliance with Diligence Requests. The Qualified Bidder submitting a Bid must have complied with reasonable requests for additional information and due diligence access from the Debtors (as described above) to
the reasonable satisfaction of the Debtors. |
|
(o) |
Confidentiality Agreement. To the extent not already executed, a Bid must include an executed confidentiality agreement substantially in the form attached hereto as Exhibit A or otherwise in form and
substance reasonably satisfactory to the Debtors. |
|
(p) |
Termination Fees. Except with respect to any Stalking Horse Bidder, a Bid must not entitle the Qualified Bidder to any break-up fee, termination fee or similar type of payment or reimbursement and, by submitting
a Bid, the Qualified Bidder waives the right to pursue a substantial contribution claim under 11 U.S.C. § 503 related in any way to the submission of its Bid or participation in any Auction (as defined below). |
A Bid received from a Qualified Bidder that meets the above requirements for the applicable assets, as determined by the Debtors in their sole
discretion after consulting with the Consultation Parties, shall constitute a Qualified Bid for such assets; provided that if the Debtors receive a Bid prior to the Bid Deadline that is not a Qualified Bid the Debtors may
provide the Qualified Bidder with the opportunity to remedy any deficiencies prior to the Auction; provided, further, that, for the avoidance of doubt, if any Qualified Bidder fails to comply with reasonable requests for additional
information and due diligence access from the Debtors to the satisfaction of the Debtors, the Debtors may, after consulting with the Consultation Parties, disqualify any Qualified Bidder and Qualified Bid in the Debtors discretion, and such
Qualified Bidder shall not be entitled to attend or participate in the Auction.
Bid Deadline
The following parties must receive a Bid in writing, on or before January 27, 2015 at 5:00 p.m. (prevailing Eastern Time) or such earlier
date as may be agreed to by each of the Debtors, after consulting with the Consultation Parties (the Bid Deadline): (1) the Debtors, 200 Crossing Boulevard, Bridgewater, NJ 08807, Attn: Robert Crotty
(rcrotty@dendreon.com); (2) counsel for the Debtors, Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, NY 10036, Attn: Ken Ziman (ken.ziman@skadden.com), 155 N. Wacker Drive, Chicago, IL, 60606,
7
Attn: Felicia Perlman (felicia.perlman@skadden.com), and 500 Boylston Street, Boston, MA 02116, Attn: Graham Robinson (graham.robinson@skadden.com); (3) financial advisor to
the Debtors, Lazard Frères & Co. LLC, 30 Rockefeller Plaza, New York, NY 10020, Attn: Sven Pfeiffer (sven.pfeiffer@lazard.com) and Brandon Aebersold (brandon.aebersold@lazard.com); (4) counsel to the Unaffiliated
Noteholders, Brown Rudnick LLP, One Financial Center, Boston, Massachusetts 02111, Attention: Steven D. Pohl (spohl@brownrudnick.com) and Seven Times Square, New York, NY 10036, Attention: John F. Storz (jstorz@brownrudnick.com); and
(5) counsel to the Deerfield Holders, Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, NY 10019, Attention: John C. Longmire (jlongmire@willkie.com).
Auction
If two or
more Qualified Bids are received by the Bid Deadline, or in the event the Debtors enter into a Stalking Horse Agreement and one Qualified Bid other than that submitted by the Stalking Horse Bidder is received by the Bid Deadline, the Debtors will
conduct an auction (the Auction) to determine the highest or otherwise best Qualified Bid. This determination shall take into account any factors the Debtors, in consultation with the Consultation Parties, reasonably deem relevant
to the value of the Qualified Bid to the estates and may include, but are not limited to, the following: (a) the amount and nature of the consideration, including any assumed liabilities; (b) the number, type and nature of any changes to
the Acquisition Agreement requested by each Qualified Bidder; (c) the extent to which such modifications or provisions are likely to delay closing of the sale of the Debtors assets and the cost to the Debtors of such modifications or
delay; (d) the total consideration to be received by the Debtors; (e) the likelihood of the Qualified Bidders ability to close a transaction and the timing thereof; (f) the net benefit to the Debtors estates, taking into
account, if applicable, any Stalking Horse Bidders right to any Break Up Fee or Expense Reimbursement Amount, and (f) any other qualitative or quantitative factor the Debtors, in consultation with the Consultation Parties, deem reasonably
appropriate under the circumstances (collectively, the Bid Assessment Criteria).
If two or more Qualified Bids are not
received by the Bid Deadline, or in the event the Debtors enter into a Stalking Horse Agreement, if one Qualified Bid other than that submitted by the Stalking Horse Bidder is not received by the Bid Deadline, the Debtors may determine not to
conduct the Auction. If the Debtors have not entered into a Stalking Horse Agreement and only one Qualified Bid is received by the Bid Deadline, the Debtors may, in consultation with the Consultation Parties, select the Modified Acquisition
Agreement of such Qualified Bidder to be the Successful Bid and such Qualified Bidder shall be the Successful Bidder. In the event the Debtors enter into a Stalking Horse Agreement, if a Qualified Bid other than that submitted by the Stalking Horse
Bidder is not received by the Bid Deadline, the Stalking Horse Agreement shall become the Successful Bid and the Stalking Horse Qualified Bidder Shall be the Successful Bidder. In the event that the Debtors have not entered into a Stalking Horse
Agreement and no Qualified Bids are received by the Bid Deadline, the Debtors shall pursue a restructuring with the Supporting Noteholders, as outlined in the Plan Support Agreement and the Plan Term Sheet attached thereto.
8
Procedures for Auction
The Auction, if necessary, shall take place on or before February 3, 2015 at 10:00 a.m. (prevailing Eastern Time) at the offices of
counsel for the Debtors, Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, NY 10036, or such other place and time as the Debtors shall notify all Qualified Bidders that have submitted Qualified Bids (including the
Stalking Horse Bidder, if any), the Supporting Noteholders and their counsel and any official committee appointed in the Debtors chapter 11 cases and its counsel. The Auction shall be conducted according to the following procedures:
Participation.
Only the Debtors,
the Consultation Parties, and any Qualified Bidder that has submitted a Qualified Bid (including the Stalking Horse Bidder, if any), in each case, along with their representatives and counsel, or such other parties as the Debtors shall determine, in
consultation with the Consultation Parties, shall attend the Auction (such attendance to be in person) and only such Qualified Bidders (including the Stalking Horse Bidder, if any), or such other parties as the Debtors shall determine, in
consultation with the Consultation Parties, will be entitled to make any Bids at the Auction.
The Debtors Shall Conduct the Auction.
The Debtors and their professionals shall direct and preside over the Auction and the Auction shall be transcribed. Other than as expressly
set forth herein, the Debtors (in consultation with the Consultation Parties) may conduct the Auction in the manner they reasonably determine will result in the highest or otherwise best Qualified Bid. The Debtors shall use their best efforts to
provide each participant in the Auction with a copy of the Modified Acquisition Agreement associated with the highest or otherwise best Qualified Bid received before the Bid Deadline (such highest or otherwise best Qualified Bid the Auction
Baseline Bid). In addition, at the start of the Auction, the Debtors shall describe the terms of the Auction Baseline Bid. Each Qualified Bidder (including the Stalking Horse Bidder, if any) participating in the Auction must confirm that
it (a) has not engaged in any collusion with respect to the bidding or sale of any of the assets described herein, (b) has reviewed, understands and accepts the Bidding Procedures and (c) has consented to the core jurisdiction of the
Bankruptcy Court (as described more fully below).
Terms of Overbids.
An Overbid is any bid made at the Auction subsequent to the Debtors announcement of the respective
Auction Baseline Bid. Any Overbid for purposes of this Auction must comply with the following conditions:
|
(a) |
Minimum Overbid Increments: Any Overbid after and above the respective Auction Baseline Bid shall be made in increments valued at not less than
$250,000. In order to maximize value, the Debtors reserve the right, in consultation with the Consultation Parties, to announce reductions or increases in the minimum incremental bids (or in valuing such bids) at any time during the Auction.
Additional consideration in excess of the amount set forth in the |
9
|
respective Auction Baseline Bid may include cash and/or noncash consideration, provided, however, that the value for such non-cash consideration shall be determined by the Debtors,
in consultation with the Consultation Parties, in their reasonable business judgment. |
|
(b) |
Remaining Terms Are the Same as for Qualified Bids: Except as modified herein or by the Debtors at the Auction, an Overbid at the Auction must comply with the conditions for a Qualified Bid set forth above,
provided, however, that (i) the Bid Deadline shall not apply, (ii) no additional Good Faith Deposit shall be required beyond the Good Faith Deposit previously submitted by a Qualified Bidder, provided that the
Successful Bidder shall be required to make a representation at the end of the Auction that it will provide any additional deposit necessary so that its Good Faith Deposit is equal to the amount of ten percent (10%) of the purchase price, or
ten percent 10% of the capital investment, contained in the Successful Bid, and (iii) each Overbid may be based on the Auction Baseline Bid, or any other form Modified Acquisition Agreement submitted prior to the Auction. Any Overbid must
include, in addition to the amount and the form of consideration of the Overbid, a description of all changes (if any) requested by the Qualified Bidder to the Acquisition Agreement or a previously submitted Modified Acquisition Agreement, in
connection therewith (including any changes to the designated assigned contracts and leases and assumed liabilities). Any Overbid must remain open and binding on the Qualified Bidder. |
At the Debtors discretion, to the extent not previously provided (which shall be determined by the Debtors in consultation with the
Consultation Parties), a Qualified Bidder submitting an Overbid at the Auction must submit, as part of its Overbid, written evidence (in the form of financial disclosure or credit-quality support information or enhancement reasonably acceptable to
the Debtors) reasonably demonstrating such Qualified Bidders ability to close the Transaction proposed by such Overbid.
Announcement and
Consideration of Overbids.
|
(a) |
Announcement of Overbids: The Debtors shall announce at the Auction the material terms of each Overbid, the total amount of consideration offered in each such Overbid, and the basis for calculating such total
consideration and such other terms as the Debtors, in consultation with the Consultation Parties, reasonably determine will facilitate the Auction. |
|
(b) |
Consideration of Overbids: Subject to the deadlines set forth herein, the Debtors reserve the right, in consultation with the Consultation Parties, in their reasonable business judgment, to make one or more
continuances of the Auction to, among other things: facilitate discussions between the Debtors and individual Qualified Bidders; allow individual Qualified Bidders to consider how they wish to proceed; or give Qualified Bidders the opportunity to
provide the Debtors with such additional evidence as the Debtors in their reasonable business judgment may require, that the Qualified Bidder has sufficient internal resources, or has received sufficient non-contingent debt and/or equity funding
commitments, to consummate the proposed Transaction at the prevailing Overbid amount. |
10
Backup Bidder.
Notwithstanding anything in the Bidding Procedures to the contrary, if an Auction is conducted, the Qualified Bidder with the next highest or
otherwise best Bid at the Auction, as determined by the Debtors, in the exercise of their business judgment and after consulting with the Consultation Parties, will be designated as the backup bidder (the Backup Bidder). The
Backup Bidder shall be required to keep its initial Bid (or if the Backup Bidder submitted one or more Overbids at the Auction, the Backup Bidders final Overbid) (the Backup Bid) open and irrevocable until the earlier of
(i) 5:00 p.m. (prevailing Eastern Time) on the date that is sixty (60) days after the date of entry of the Sale Order, or, if the Successful Bid is a Chapter 11 Plan Bid, until the effective date of such plan of reorganization (the
Outside Backup Date), or (ii) the closing of the transaction with the Successful Bidder.
Following the Sale
Hearing, if the Successful Bidder fails to consummate an approved transaction, the Backup Bidder will be deemed to have the new prevailing bid, and the Debtors will be authorized, but not required, without further order of the Bankruptcy Court, to
consummate the transaction with the Backup Bidder. In such case of a breach or failure to perform on the part of the Successful Bidder (including any Backup Bidder designated as a Successful Bidder), the defaulting Successful Bidders deposit
shall be forfeited to the Debtors. The Debtors, on their behalf and on behalf of each of their respective estates, specifically reserve the right to seek all available damages, including specific performance, from any defaulting Successful Bidder
(including any Backup Bidder designated as a Successful Bidder) in accordance with the terms of the Bidding Procedures.
Additional Procedures.
The Debtors (after consulting with the Consultation Parties) may announce at the Auction additional procedural rules that are
reasonable under the circumstances for conducting the Auction, so long as such rules are not inconsistent in any material respect with the Bidding Procedures.
Consent to Jurisdiction and Authority as Condition to Bidding.
All Qualified Bidders (including the Stalking Horse Bidder, if any) shall be deemed to have (1) consented to the core jurisdiction of the
Bankruptcy Court to enter an order or orders, which shall be binding in all respects, in any way related to the Debtors, the Chapter 11 Cases, the Bidding Procedures, the Auction, any Modified Acquisition Agreement, or the construction and
enforcement of documents relating to any Transaction, (2) waived any right to a jury trial in connection with any disputes relating to the Debtors, the Chapter 11 Cases, the Bidding Procedures, the Auction, any Modified Acquisition Agreement,
or the construction and enforcement of documents relating to any Transaction and (3) consented to the entry of a final order or judgment in any way related to the Debtors, the Chapter 11 Cases, the Bidding Procedures, the Auction, any Modified
Acquisition Agreement, or the construction and enforcement of documents relating to any Transaction if it is determined that the Bankruptcy Court would lack Article III jurisdiction to enter such a final order or judgment absent the consent of the
parties.
11
Sale Is As Is/Where Is.
Except as otherwise provided in the Modified Acquisition Agreement or the Sale Order, the Acquired Assets or any other assets of the Debtors
sold pursuant to the Bidding Procedures, shall be conveyed at the closing of a transaction with a Successful Bidder in their then-present condition, AS IS, WITH ALL FAULTS, AND WITHOUT ANY WARRANTY WHATSOEVER, EXPRESS OR IMPLIED.
Closing the Auction.
The
Auction shall continue until there is one Qualified Bid for the Acquired Assets or a Chapter 11 Plan Bid that the Debtors determine in their reasonable business judgment, after consulting with the Consultation Parties, is the highest or otherwise
best Qualified Bid at the Auction. Thereafter, the Debtors shall select such Qualified Bid, in consultation with the Consultation Parties, as the overall highest or otherwise best Qualified Bid (such Bid, the Successful Bid,
and the Qualified Bidder submitting such Successful Bid, the Successful Bidder). In making this decision, the Debtors shall consider the Bid Assessment Criteria.
The Auction shall close when the Successful Bidder submits fully executed sale and transaction documents memorializing the terms of the
Successful Bid.
Promptly following the Debtors selection of the Successful Bid and the conclusion of the Auction, the Debtors shall
announce the Successful Bid and Successful Bidder and shall file with the Bankruptcy Court notice of the Successful Bid and Successful Bidder.
Unless otherwise required pursuant to the Debtors fiduciary duties, the Debtors shall not consider any Bids submitted after the
conclusion of the Auction.
Return of Good Faith Deposits
The Good Faith Deposits of all Qualified Bidders shall be held in one or more interest-bearing escrow accounts by the Debtors, but shall not
become property of the Debtors estates absent further order of the Bankruptcy Court. The Good Faith Deposit of any Qualified Bidder that is neither the Successful Bidder nor the Backup Bidder shall be returned to such Qualified Bidder not
later than five (5) business days after the Sale Hearing. The Good Faith Deposit of the Backup Bidder, if any, shall be returned to the Backup Bidder on the date that is the earlier of 72 hours after (a) the closing of the transaction with
the Successful Bidder and (b) the Outside Backup Date. Upon the return of the Good Faith Deposits, their respective owners shall receive any and all interest that will have accrued thereon. If the Successful Bidder timely closes the winning
transaction, its Good Faith Deposit shall be credited towards the purchase price.
The Consultation Parties
The Debtors shall consult with the Supporting Noteholders and any official committee appointed in the Debtors chapter 11 cases and each
of their respective advisors (collectively, the
12
Consultation Parties and each, a Consultation Party) as explicitly provided for in the Bidding Procedures; provided, however, that the Debtors
shall not be required to consult with any Consultation Party (and its advisors) that is a Qualified Bidder unless such Qualified Bidder does not submit a bid by the Bid Deadline, at which time, such Supporting Noteholder shall become a Consultation
Party; provided, further that if any individual Supporting Noteholder becomes a Qualified Bidder, the consultation rights of any Supporting Noteholder that has not become a Qualified Bidder shall not be affected.
Reservation of Rights of the Debtors
Except as otherwise provided in the Acquisition Agreement, the Bidding Procedures or the Bidding Procedures Order, the Debtors further reserve
the right as they may reasonably determine to be in the best interest of their estates, in consultation with the Consultation Parties to: (a) determine which bidders are Qualified Bidders; (b) determine which Bids are Qualified Bids;
(c) determine whether to enter into a Stalking Horse Agreement; (d) determine which Qualified Bid is the highest or otherwise best proposal and which is the next highest or otherwise best proposal; (e) reject any Bid that is
(1) inadequate or insufficient, (2) not in conformity with the requirements of the Bidding Procedures or the requirements of the Bankruptcy Code or (3) contrary to the best interests of the Debtors and their estates; (e) waive
terms and conditions set forth herein with respect to all potential bidders; (f) impose additional terms and conditions with respect to all potential bidders; (g) extend the deadlines set forth herein; (h) continue or cancel the
Auction and/or Sale Hearing in open court without further notice; and (i) modify the Bidding Procedures and implement additional procedural rules that the Debtors determine, in their business judgment, will better promote the goals of the
bidding process and discharge the Debtors fiduciary duties and are not inconsistent with any Bankruptcy Court order.
13
EXHIBIT B
MINIMUM NET REVENUE
|
|
|
|
|
Calendar Month |
|
Minimum Net Revenue (USD) |
|
November 2014 |
|
$ |
14.6 million |
|
December 2014 |
|
$ |
17.6 million |
|
January 2015 |
|
$ |
18.6 million |
|
February 2015 |
|
$ |
17.1 million |
|
March 2015 |
|
$ |
18.6 million |
|
April 2015 |
|
$ |
21.3 million |
|
May 2015 |
|
$ |
17.9 million |
|
June 2015 |
|
$ |
21.2 million |
|
July 2015 |
|
$ |
21.2 million |
|
August 2015 |
|
$ |
19.5 million |
|
September 2015 |
|
$ |
15.1 million |
|
October 2015 |
|
$ |
24.3 million |
|
November 2015 |
|
$ |
19.0 million |
|
December 2015 |
|
$ |
19.0 million |
|
EXHIBIT C
FORM OF JOINDER
The
undersigned transferee (Transferee) hereby acknowledges that it has read and understands the Plan Support Agreement, dated as of November 9, 2014 (the Agreement), by and among (i) Dendreon Corporation
(the Company) and its subsidiaries signatory hereto, and (ii) [Insert Transferors Name] (Transferor) and the other holders of the Companys 2016 Notes issued under the First Supplemental
Indenture, dated January 20, 2011, to the Base Indenture, dated March 16, 2007, with The Bank of New York Mellon Trust Company, N.A., as trustee, that are parties to the Agreement, and agrees that it shall be (A) bound by the terms
and conditions thereof to the extent Transferor was thereby bound and (B) deemed a Supporting Noteholder under the terms of the Agreement.
Date Executed: , 201
|
|
|
TRANSFEREE |
|
|
Name of Institution: |
|
|
|
|
|
|
|
By: |
|
|
Name: |
|
|
Its: |
|
|
Telephone: |
|
|
Facsimile: |
|
|
|
|
|
Claims Held by Transferee: |
|
$ |
Exhibit 10.2
EXECUTION VERSION
PLAN SUPPORT
AGREEMENT
This PLAN SUPPORT AGREEMENT (this Agreement) is made and entered into as of November 9, 2014 by and
among (i) Dendreon Corporation (the Company) and its subsidiaries signatory hereto (collectively, and together with the Company, the Debtors), and (ii) each of the undersigned holders (the
Supporting Noteholders) of the Companys 2016 Notes issued under the First Supplemental Indenture, dated January 20, 2011, to the Base Indenture, dated March 16, 2007, with The Bank of New York Mellon Trust Company,
N.A., as trustee (the 2016 Notes). Each of the Debtors and the Supporting Noteholders is referred to herein as a Party and collectively as the Parties.
RECITALS
WHEREAS,
the Debtors have determined that a sale of all or substantially all of their assets or a recapitalization transaction effectuated through a plan of reorganization (a Sale) or a restructuring of their obligations under the 2016
Notes and certain other obligations of the Debtors is necessary and would be in the best interests of the Debtors and their stakeholders;
WHEREAS, in the event no satisfactory Sale can be achieved, each of the Parties desires to consummate such restructuring in accordance
with the terms of the term sheet attached as Exhibit A hereto (the Plan Term Sheet) and the terms of this Agreement (such restructuring, the Restructuring);
WHEREAS, as of the date of this Agreement, the Debtors are obligated to the holders of the 2016 Notes in the aggregate principal amount
of $222,732,000 (plus accrued and unpaid interest);
WHEREAS, the Sale or Restructuring will be effected through the commencement
of chapter 11 bankruptcy cases for the Debtors in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court);
WHEREAS, each of the Parties desires to work together to complete the negotiation of the terms of the documents necessary to confirm
and consummate the Plan (as defined below); and
WHEREAS, this Agreement is not intended to be and shall not be deemed to be a
solicitation for votes to the Plan.
NOW, THEREFORE, in exchange for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, each of the Parties, intending to be legally bound, hereby agrees as follows:
1. Definitions and
Interpretation.
(a) The following terms used in this Agreement shall have the following definitions:
2016 Notes has the meaning set forth in the preamble hereof.
Actual Net Revenue has the meaning set forth in Section 6(f)
hereof.
Agreement has the meaning set forth in the preamble hereof. For the avoidance of doubt, this Agreement
includes the Plan Term Sheet.
Bankruptcy Cases means proceedings under chapter 11 of the Bankruptcy Code for the
Debtors.
Bankruptcy Code means title 11 of the United States Code, 11 U.S.C. §§ 101-1532.
Bankruptcy Court has the meaning set forth in the recitals hereof.
Bidding Procedures means the bidding procedures in the form attached as Exhibit 1 to the Plan Term Sheet.
Business Day means any day other than Saturday, Sunday, and any day that is a legal holiday or a day on which banking
institutions in New York, New York are authorized by law or other governmental action to close.
Company has the
meaning set forth in the preamble hereof.
Competitive Process has the meaning set forth in Section 2(a)
hereof.
Confidentiality Agreement has the meaning set forth in Section 6(a) hereof.
Debtors has the meaning set forth in the preamble hereof.
Deerfield means Deerfield Management Company, L.P. and its affiliates.
Disclosure Statement means a disclosure statement with respect to the Plan consistent with the requirements of section 1125
of the Bankruptcy Code.
Effective Date means the effective date of the Plan.
Grace Period has the meaning set forth in Section 10(a) hereof.
Joinder has the meaning set forth in Section 7(b) hereof.
Material Adverse Effect means any event or condition that, individually or in the aggregate, has had or would reasonably be
expected to have a material adverse effect on the business, assets, liabilities or results of operations of the Company and its subsidiaries, taken as a whole (other than as a result of the events or conditions leading up to and following
commencement of the Bankruptcy Cases and the continuation and prosecution thereof), excluding the effects of events or conditions, either alone or in combination, resulting from or arising out of (i) any liabilities to be not assumed under the
Plan, (ii) changes in general economic, financial or securities markets or geopolitical conditions, (iii) general changes or developments in macroeconomic conditions or the industries and markets in which the Company or its subsidiaries
operate, (iv) the entry into this Agreement, the announcement of the
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Restructuring, the identity of any of the Supporting Noteholders or the consummation of the transactions contemplated by this Agreement, including termination of, reduction in or similar negative
impact on relationships, contractual or otherwise, with any customers, suppliers, distributors, licensors, licensees, partners or employees of the Company and its subsidiaries, (v) any actions required to be taken or omitted by any Debtor under
this Agreement (including any action taken or omitted at the request of the Supporting Noteholders) or any action or omission by any Supporting Noteholder in breach of this Agreement, (vi) changes in (or proposals to change) any applicable
laws, rules or regulations or applicable accounting regulations or principles or the enforcement or interpretation thereof, (vii) any outbreak or escalation of hostilities or war or any act of terrorism or natural disaster or act of God and
(viii) any failure of the Company and its subsidiaries to meet any budgets, plans, projections or forecasts (internal or otherwise); provided, however, that any event or condition referred to in clauses (ii),
(iii) or (vii) shall not be excluded pursuant to such clauses to the extent (and only to the extent) it disproportionately adversely affects the Company and its subsidiaries, taken as a whole, relative to other similarly
situated companies in the industries and countries and regions in which the Company and its subsidiaries operate.
Measurement
Date means the last day of each calendar month following the Petition Date and at least 15 days prior to the Effective Date.
Minimum Net Revenue means, with respect to a given calendar month, the applicable amount set forth on Exhibit B
attached hereto.
Party or Parties has the meaning set forth in the preamble hereof.
Person has the meaning set forth in section 101(41) of the Bankruptcy Code.
Petition Date means the date on which the Debtors commence the Bankruptcy Cases.
Plan means the chapter 11 plan of reorganization that implements the Restructuring.
Plan Documents means the Plan, the Disclosure Statement, the orders in respect of the Bidding Procedures and the sale of
all or substantially all of the non-cash assets of the Debtors contemplated by the Bidding Procedures and the motions related thereto, and all exhibits, schedules, and other documents ancillary thereto, and any amendments or supplements to any of
the foregoing, all of which shall be consistent in all material respects with this Agreement and the Plan Term Sheet, and in form and substance satisfactory to the Supporting Noteholders.
Plan Support Agreement Assumption Motion has the meaning set forth in Section 6(d) hereof.
Plan Term Sheet has the meaning set forth in the recitals hereof and includes the Bidding Procedures.
Prepetition Noteholder Claims means any claim arising under the 2016 Notes.
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Qualified Bid has the meaning set forth in the Bidding Procedures.
Qualified Marketmaker means any Person that holds itself out to the public or to applicable private markets as standing
ready in the ordinary course of business to purchase from customers and sell to customers Prepetition Noteholder Claims in its capacity as a broker-dealer or market maker for such claims and is in fact regularly in the business of making a market in
such claims.
Qualifying Sale means a Sale consummated as a result of the Competitive Process that has a value of not
less than the minimum Qualified Bid.
Requisite Supporting Noteholders means, as of any date of determination,
Supporting Noteholders holding at least two-thirds in amount of the Prepetition Noteholder Claims held by all Supporting Noteholders.
Restructuring has the meaning set forth in the recitals hereof.
Solicitation means the Debtors formal request for acceptances of the Plan, consistent with section 1125 and 1126 of
the Bankruptcy Code, rules 3017 and 3018 of the Federal Rules of Bankruptcy Procedure, and applicable non-bankruptcy law.
Supporting Noteholders has the meaning set forth in the preamble hereof.
Termination Date has the meaning set forth in Section 10(a) hereof.
Termination Event means any event specified in Section 10(a) hereof.
Transfer means any assignment, sale, transfer, loan, pledge or encumbrance of any Prepetition Noteholder Claim or grant of
any option thereon or any right or interest (voting or otherwise) therein, or any agreement to effect any of the foregoing; provided that the granting of any liens or encumbrances in favor of a bank or broker-dealer holding custody of
securities in the ordinary course of business and which lien or encumbrance is released upon the disposition of such securities shall not be considered a Transfer.
Trustee means The Bank of New York Mellon Trust Company, N.A., and any successor trustee under the 2016 Notes.
(b) Other Interpretive Provisions. The word include and its various forms shall be read as if followed by the phrase
without limitation. Will and shall have the same meaning. Where appropriate in context, terms used in this Agreement shall include both the singular and the plural. Headings are for convenience only and shall not
affect the interpretation of this Agreement.
2. The Restructuring; Incorporation of the Term Sheet.
(a) If a Qualifying Sale does not occur, the Restructuring will be accomplished pursuant to a Plan consistent with the Plan Term Sheet. The
Debtors may conduct a competitive process pursuant to the Bidding Procedures (the Competitive Process), simultaneously with prosecution of the Plan.
(b) The Plan Term Sheet is incorporated herein by reference and is made part of this Agreement. If the terms as set forth in the Plan Term
Sheet and this Agreement are inconsistent, this Agreement shall govern.
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3. Implementation of the Restructuring.
(a) The Debtors will effectuate the Restructuring by, among other things, commencing the Bankruptcy Cases, as provided in this
Section 3. Subsidiaries of the Company other than the Debtors shall not commence chapter 11 cases.
(b) Following the
execution of this Agreement, each Supporting Noteholder and the Debtors shall negotiate in good faith the terms of the Plan and Disclosure Statement, which shall be consistent in all material respects with this Agreement and the Plan Term Sheet and
shall be in form and substance reasonably satisfactory to each Supporting Noteholder and the Debtors.
(c) The Debtors shall file the Plan
and the Disclosure Statement as promptly as practicable after the Petition Date.
(d) This Agreement is not and shall not be deemed to be
a solicitation of acceptances of the Plan. The acceptances of holders of claims will not be solicited until after the forms of the Plan and Disclosure Statement have been agreed to by each Supporting Noteholder and the Debtors, and such Solicitation
shall occur in accordance with the applicable provisions of the Bankruptcy Code and applicable non-bankruptcy law.
4. Consultation and
Cooperation. The Debtors and each Supporting Noteholder agree to reasonably consult and cooperate with each other, including through their respective counsel or other advisors, in connection with any analyses, appearances, presentations, briefs,
filings, arguments, or proposals made or submitted by any such Party to the Bankruptcy Court or parties in interest in the Bankruptcy Cases.
5. Effectiveness. This Agreement shall become effective on the date upon which (a) counterparts of this Agreement have been duly
executed by each of the Debtors and the Supporting Noteholders, (b) such executed counterparts have been exchanged by the Parties, and (c) holders of not less than two-thirds in aggregate principal amount of the Prepetition Noteholder
Claims are bound to support the Sale or Restructuring on terms materially identical to the terms set forth in the attached Plan Term Sheet. This Agreement shall not be binding on or enforceable against any Party, and no Party shall have any rights
or obligations under this Agreement until this Agreement has become effective in accordance with this Section 5.
6.
Agreements of the Debtors. Subject to the terms and conditions hereof, and for so long as no Termination Date shall have occurred:
(a) Subject to the existence of an effective confidentiality agreement described in the next sentence, the Debtors shall promptly provide to
counsel to the Supporting Noteholders, and to such other advisors as directed, such information and due diligence materials
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as any of the Supporting Noteholders and their advisors reasonably request to evaluate the transactions contemplated by this Agreement, including concerning the Competitive Process, and shall
cause their management and advisors to meet with the Supporting Noteholders and their advisors at reasonable times upon request of any of the Supporting Noteholders for purposes of reasonably discussing such information and due diligence materials
and reasonably consulting with respect to the Competitive Process; provided, however, this Section 6(a) shall not entitle any Supporting Noteholder that may evaluate or consider submitting a potential bid in the Competitive
Process to access to information or due diligence materials, which access shall be subject to and in accordance with the Bidding Procedures, or to any opportunity to consult with the Debtors in connection with the Competitive Process not provided to
other bidders in such process in accordance with the Bidding Procedures. It is acknowledged and agreed that Deerfield and the Supporting Noteholders are Qualified Bidders (as defined in the Bidding Procedures) and shall remain Qualified Bidders
until after the Bid Deadline, after which time, if none of such entities has submitted a Qualified Bid, the Supporting Noteholders shall be Consultation Parties (as defined in the Bidding Procedures). Information and materials provided under this
Section 6(a) following the commencement of the Bankruptcy Cases will be subject to (i) in the case of a Supporting Noteholder (other than Deerfield and its affiliates), a confidentiality agreement in the form attached hereto as
Exhibit B to be executed between such Supporting Noteholder and the Company, and (ii) in the case of Deerfield, its affiliates and their respective advisors, the Confidentiality Agreement, dated as of June 5, 2014, as amended
November 9, 2014, between Deerfield and the Company (the Confidentiality Agreement).
(b) The Debtors hereby agree
(i) to prepare the Plan Documents, (ii) to provide draft copies of the Plan Documents to counsel for the Supporting Noteholders within a reasonable amount of time prior to the date the Debtors plan to file such documents with the
Bankruptcy Court and (iii) that they shall, except in circumstances where it is not reasonably practicable to do so, provide draft copies of all other motions, applications, and other documents the Debtors intend to file with the Bankruptcy
Court to counsel for the Supporting Noteholders within a reasonable amount of time prior to the date the Debtors plan to file such documents with the Bankruptcy Court, and shall reasonably consult in good faith with counsel to the Supporting
Noteholders regarding the form and substance of any such proposed filings.
(c) The Debtors agree to use commercially reasonable efforts
to (i) complete the Restructuring under the Plan Documents, (ii) take all necessary and appropriate actions in furtherance of the Restructuring and all other actions contemplated under this Agreement or the Plan Documents,
(iii) obtain all required regulatory approvals and third-party approvals, consents, and/or waivers for the Restructuring, and (iv) not take any actions materially inconsistent with this Agreement or the Plan Documents.
(d) Within one Business Day following the Petition Date, the Debtors shall file, and use commercially reasonable efforts to diligently
prosecute, a motion (the Plan Support Agreement Assumption Motion) with the Bankruptcy Court seeking, in connection with the Bankruptcy Cases, (i) to assume this Agreement and (ii) the authority to pay, when due and
payable, the respective reasonable and documented accrued and ongoing expenses of legal, accounting and similar professionals incurred by the Supporting Noteholders in connection with the Restructuring. All such reasonable and documented fees,
expenses, and disbursements incurred up to the Petition Date shall be paid in full.
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(e) Except as contemplated by this Agreement or as required by, arising out of, relating to or
resulting from the Bankruptcy Cases, the Debtors shall use commercially reasonable efforts to conduct their respective businesses in the ordinary course of business, taking into account their status as debtors in possession.
(f) Within 15 days following the end of each calendar month after the Petition Date, the Debtors shall deliver to counsel for the Supporting
Noteholders a written statement prepared in good faith setting forth the Companys unaudited consolidated net revenue for such calendar month (the amount for a given calendar month as set forth in such written statement, the Actual Net
Revenue).
7. Agreements of Supporting Noteholders.
(a) Subject to the terms and conditions hereof and for so long as no Termination Date shall have occurred, each of the Supporting Noteholders
shall:
(i) (A) deliver its duly executed and completed ballot voting its Prepetition Noteholder Claims in favor of the
Plan on a timely basis, provided that its vote on the Plan has been properly solicited pursuant to applicable non-bankruptcy law and sections 1125 and 1126 of the Bankruptcy Code and rules 3017 and 3018 of the Federal Rules of Bankruptcy Procedure;
and (B) not change or withdraw such agreement or vote (or cause or direct such agreement or vote to be changed or withdrawn), provided that such agreement and vote shall be revoked and withdrawn and deemed void ab initio, and the
Supporting Noteholders shall each be provided the opportunity to submit a revised ballot notwithstanding the prior passage of any voting deadline, upon occurrence of a Termination Event that is not timely waived or cured, other than a Termination
Event caused by a breach by such Supporting Noteholder;
(ii) not object to, delay, impede, or take any other action to
interfere, directly or indirectly, with the Plan Documents, the Competitive Process (including any motion seeking approval of the orders in respect of the Bidding Procedures and the sale of all or substantially all of the non-cash assets of the
Debtors contemplated by the Bidding Procedures), or the approval, confirmation or consummation of the Plan and the Restructuring, or propose, file, support, or vote for, directly or indirectly, any restructuring, workout, or chapter 11 plan for any
of the Debtors other than the Plan; provided, however, that each Supporting Noteholder shall reserve the right to object to any motion filed by the Debtors with the Bankruptcy Court to the extent the relief contemplated by such motion
is inconsistent with the terms of this Agreement or the Plan Term Sheet. For the avoidance of doubt, neither the participation of a Supporting Noteholder (or any of its affiliates) in the Competitive Process nor any bid submitted by a Supporting
Noteholder shall constitute a breach of this provision (or any provision of this Agreement);
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(iii) not take any other action, including initiating or joining in any legal
proceeding, that is materially inconsistent with the Supporting Noteholders obligations under this Agreement; and
(iv) authorize any actions by the Trustee necessary to implement any of the obligations of the Supporting Noteholders under
this Agreement and to effectuate the Restructuring in accordance therewith; provided that nothing in the Agreement shall be construed to require any Supporting Noteholder to indemnify the Trustee.
(b) Each Supporting Noteholder hereby agrees that, following delivery of its signature page until the termination of this Agreement, it shall
not Transfer any or all of its Prepetition Noteholder Claims unless, (i) the transferee is a Supporting Noteholder or (ii) simultaneously with such Transfer, the transferee delivers to the Parties to this Agreement an executed joinder
substantially in the form attached hereto as Exhibit D (the Joinder) whereby such transferee agrees in writing to be bound by the terms of this Agreement, in which case such transferee shall be deemed to be a Supporting
Noteholder for all purposes herein from and after the date on which such joinder is executed. Notwithstanding the foregoing, any transferee that specifies in the documentation executed in connection with the transfer by a Supporting Noteholder of
Prepetition Noteholder Claims that it is acting as a Qualified Marketmaker shall not be required to execute a Joinder in connection with such Transfer if such Qualifying Marketmaker transfers such Prepetition Noteholder Claims within five Business
Days; provided, however, that such Qualified Marketmaker shall require any transferee of Prepetition Noteholder Claims to execute a Joinder in connection with such Transfer unless such transferee is a Supporting Noteholder. Immediately
upon any Transfer of any Prepetition Noteholder Claims to a Qualified Marketmaker, the transferring Supporting Noteholder shall notify the Debtors in writing of the date of such Transfer, the identity of the transferee and the amount of Prepetition
Noteholder Claims transferred. Any Transfer of any Prepetition Noteholder Claim that does not comply with this Section 7(b) shall be deemed void ab initio.
(c) Nothing in this Agreement shall be deemed to limit or restrict the ability or right of a Supporting Noteholder or any non-public
controlled affiliate of the foregoing to purchase or take assignment of any additional Prepetition Noteholder Claims; provided, however, that, in the event a Supporting Noteholder or any non-public controlled affiliate of the foregoing
purchases or takes assignment of any such additional Prepetition Noteholder Claims after the date hereof, such additional Prepetition Noteholder Claims shall immediately upon such acquisition become subject to the terms of this Agreement without any
further action being required (or, in the case of a purchase by a non-public controlled affiliate of a Supporting Noteholder (other than an affiliate acting solely in its capacity as a Qualified Marketmaker) such Supporting Noteholder, as
applicable, shall cause its non-public controlled affiliate to become subject to the terms of this Agreement in connection with such purchased claims). For purposes of this Section 7(c), a non-public controlled affiliate of a
Supporting Noteholder shall not include any such entity that is subject to an investment restriction that, as determined in good faith by its investment manager, limits its ability to hold illiquid equity securities that would be inconsistent with
consummation of a Stand-Alone Plan (as defined in the Plan Term Sheet).
(d) Each Supporting Noteholder agrees that it will
consent to, and not opt out of, any mutual release, exculpation or indemnification provision contained in the Plan provided that such provision is on the terms set forth in the Plan Term Sheet.
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8. Representations and Warranties.
(a) Each Supporting Noteholder represents and warrants, severally and not jointly, to the Debtors that the following statements are true,
correct, and complete as of the date hereof:
(i) such Supporting Noteholder is the sole legal owner, beneficial owner, or
holder of investment and voting authority over the aggregate amount of Prepetition Noteholder Claims set forth below its name on the signature pages hereto, and does not legally or beneficially own, or hold investment or voting authority over, any
other Prepetition Noteholder Claims;
(ii) such Supporting Noteholder has made no prior Transfer of and has not entered
into any agreement or arrangement with respect to its Prepetition Noteholder Claims or the 2016 Notes underlying its Prepetition Noteholder Claims, except for any agreement or arrangement that could not reasonably be expected to materially and
adversely affect its ability to perform its obligations hereunder;
(iii) such Supporting Noteholder (A) is a
sophisticated investor with respect to the transactions described in this Agreement with sufficient knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of owning and investing in securities
(including any securities that may be issued in connection with the transactions contemplated by the Plan), in making an informed decision with respect thereto and has made its own analysis and decision to enter into this Agreement, (B) is an
accredited investor within the meaning of Rule 501 of the Securities Act of 1933, as amended, and (C) with respect to any new equity in the reorganized Company that may be acquired under a Stand-Alone Plan (as defined
in the Plan Term Sheet), is not acquiring such new equity with a view to a distribution in violation of applicable securities laws; and
(iv) such Supporting Noteholder is a fund managed by Deerfield.
(b) Each Party represents and warrants, severally and not jointly, to the other Parties that the following statements, as applicable, are
true, correct, and complete as of the date hereof:
(i) It has all requisite, individual, corporate, partnership, or
limited liability company power and authority to enter into this Agreement and to carry out the transactions contemplated hereby, and to perform its obligations hereunder;
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(ii) To the extent applicable, it is duly organized, validly existing, and in
good standing under the laws of its state or jurisdiction of organization;
(iii) To the extent applicable, the execution
and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate, partnership, or limited liability company action on its part;
(iv) Subject to obtaining each of the approvals and consents set forth in Section 8(b)(v), the execution, delivery
and performance of this Agreement does not and shall not (A) violate any provision of law, rule, or regulation applicable to it, except to the extent the failure to comply therewith could not reasonably be expected to materially and adversely
affect its ability to perform its obligations hereunder; (B) to the extent applicable, violate its articles or certificate of incorporation, bylaws, or other organizational documents, except as contemplated in the Plan Documents; or
(C) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it or any of its subsidiaries is a party, except in the case of the Debtors to the
extent such contractual obligation relates to the 2016 Notes or related loan documents or the filing of a case under the Bankruptcy Code or insolvency of the Debtors;
(v) The execution, delivery, and performance by it of this Agreement does not and shall not require any registration or filing
with, consent or approval of, or notice to, or other action to, with or by, any federal, state, or other governmental authority or regulatory body, except such filings, approvals, and consents as (A) may be necessary or required under antitrust
or federal securities laws or regulations; (B) may be necessary and/or required under any laws or regulations of any state; or (C) may be necessary or required in connection with the Bankruptcy Cases, the approval of the Disclosure
Statement, and the confirmation and effectiveness of the Plan; and
(vi) Subject in the case of the Debtors to entry of
the Plan Support Agreement Assumption Motion, this Agreement is a legally valid and binding obligation of such Party, enforceable against such Party in accordance with its terms.
9. Survival of Agreement. Each of the Parties acknowledges and agrees that (a) this Agreement is being executed in connection with
negotiations concerning the Restructuring and in contemplation of the commencement of the Bankruptcy Cases; (b) the rights granted in this Agreement are enforceable by each Party hereto without approval of the Bankruptcy Court, except as
specifically contemplated by this Agreement; (c) the termination of this Agreement in accordance with the Termination Events set forth in Section 10 hereof will not violate the automatic stay provisions of the Bankruptcy Code; and
(d) each Party hereto hereby waives its right to assert a contrary position in the Bankruptcy Cases with respect to the foregoing.
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10. Termination.
(a) This Agreement shall automatically terminate on the third Business Day (such date, a Termination Date) following any of
the termination events set forth in clauses (i) through (xxiii) below (each a Termination Event), unless such termination is waived or modified in writing by the applicable Party or Parties within such
three Business Day period (the Grace Period), as set forth below, in which case the Termination Event so waived shall be deemed not to have occurred, this Agreement shall be deemed to continue in full force and effect, and the
rights and obligations of the Parties hereto shall be restored, subject to any modification set forth in such waiver; provided that this Agreement shall automatically terminate on the date of any Termination Event set forth in clauses
(ii) through (vii), (ix), (x), (xii), (xiii), and (xix) through (xxi) without application of the Grace Period. The waiver or consent for modification of the Requisite Supporting
Noteholders but not the Debtors, shall be required with respect to any of the Termination Events set forth in clauses (i) through (xi), (xiii) through (xvii) and (xxiii) below. The waiver or
consent for modification of the Debtors but not any of the Supporting Noteholders shall be required with respect to the Termination Events set forth in clause (xviii) below. Except for the Termination Events set forth in clauses
(ii) through (vii), (ix), (x), (xii), (xiii), and (xix) through (xxi) which shall not be subject to the Grace Period, each Termination Event and, as applicable, Termination Date
shall be subject to the Grace Period. Upon the commencement of the Grace Period, the terminating Party shall give written notice to the allegedly breaching Party, and during the Grace Period the allegedly breaching Party shall have the opportunity
to cure such alleged breach.
(i) The Plan and Disclosure Statement and all documents (included in the Solicitation
package) applicable to the reorganized Company in the event of a Stand-Alone Plan (as defined in the Plan Term Sheet) are not in form and substance satisfactory to the Requisite Supporting Noteholders by the date Solicitation
commences;
(ii) The Debtors have not commenced the Bankruptcy Cases by November 12, 2014;
(iii) The Bankruptcy Court has not entered an order approving the Plan Support Agreement Assumption Motion within 35 days
following the Petition Date;
(iv) The Bankruptcy Court has not entered an order approving the Bidding Procedures within 35
days following the Petition Date;
(v) The Plan and the Disclosure Statement shall not have been filed with the Bankruptcy
Court within 15 days following the Bid Deadline;
(vi) The Debtors have not commenced Solicitation by March 15, 2015;
(vii) The Plan shall not have been confirmed by the Bankruptcy Court by May 1, 2015;
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(viii) The Plan or any organizational documents and shareholder agreement
applicable to the reorganized Company in the event of a Stand-Alone Plan (as defined in the Plan Term Sheet) are modified in any material manner that is not acceptable to the Requisite Supporting Noteholders;
(ix) Any of the Bankruptcy Cases is dismissed or converted to a case under chapter 7 of the Bankruptcy Code;
(x) The Bankruptcy Court shall have entered an order appointing, in respect of any of the Debtors, (A) a trustee under
chapter 11 of the Bankruptcy Code, (B) a responsible officer, or (C) an examiner with enlarged powers relating to the operation of the business (powers beyond those set forth in subclauses (3) and (4) of section 1106(a)) under
section 1106(b) of the Bankruptcy Code; provided that the appointment of any of the parties identified in the immediately preceding clauses (A) through (C) shall not result in a Termination Event enforceable by any
Supporting Noteholder that requested or supported such appointment;
(xi) The Bankruptcy Court shall have entered an order
terminating the Debtors exclusive right to file or solicit acceptances of a plan; provided that such termination of the Debtors rights shall not result in a Termination Event enforceable by any Supporting Noteholder that requested
or supported such termination or by any Supporting Noteholder that opposed any extension of the Debtors exclusive periods to file or solicit acceptance of the plan;
(xii) Any governmental authority, including the Bankruptcy Court, or any other regulatory authority or court of competent
jurisdiction, enters a final, non-appealable judgment or order (A) declaring this Agreement or any material portion hereof to be unenforceable, (B) preventing consummation of the Plan or the Restructuring or any material portion thereof or
(C) that grants relief that is inconsistent with this Agreement and materially adverse to the Supporting Noteholders;
(xiii) The Debtors withdraw the Plan or any of the Debtors publicly announces its intention not to support the Plan, or the
Debtors file any motion or pleading with the Bankruptcy Court that is inconsistent with this Agreement and materially adverse to the Supporting Noteholders;
(xiv) The orders of the Bankruptcy Court approving the Disclosure Statement or confirming the Plan are stayed, reversed,
vacated, or otherwise modified in a material manner for greater than 14 days;
(xv) Any material breach of any provision of
this Agreement by any of the Debtors (including any such material breach resulting from an action or forbearance pursuant to Section 11 hereof); provided that such Termination Event shall be deemed to have occurred only upon
receipt of written notice by such
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Debtor of such breach from the Requisite Supporting Noteholders (provided that none of such Supporting Noteholders is then in material breach of its obligations hereunder), and such breach, if
capable of being cured, remains uncured for a period of five Business Days;
(xvi) Any event or condition shall have
occurred that, individually or in the aggregate, has resulted in a Material Adverse Effect that is continuing;
(xvii) As
of any Measurement Date commencing on December 31, 2014 and based on the information set forth in the written statements delivered pursuant to Section 6(f) hereof, (A) the Actual Net Revenue for the calendar month ending on
such Measurement Date plus the Actual Net Revenue for the immediately preceding calendar month, is less than (B) the Minimum Net Revenue for the calendar month ending on such Measurement Date plus the Minimum Net Revenue for the
immediately preceding calendar month;
(xviii) Any material breach of this Agreement by any of the Supporting Noteholders;
provided that no breach by a Supporting Noteholder or Supporting Noteholders (including for this purpose any transferee of a Supporting Noteholder that is an affiliate of such Supporting Noteholder) holding less than $5 million in aggregate
principal amount of the Prepetition Noteholder Claims shall serve as the basis for termination of this Agreement pursuant to this clause (xviii) of Section 10(a); and provided further, that such Termination
Event shall be deemed to have occurred only upon receipt of written notice by such Supporting Noteholder of such breach from the Debtors (provided that none of the Debtors are then in material breach of their obligations hereunder), and such breach,
if capable of being cured, remains uncured for a period of five Business Days;
(xix) The Debtors delivery of written
notice to the Supporting Noteholders terminating this Agreement as the Debtors determine to be required pursuant to Section 11;
(xx) The Debtors and the Requisite Supporting Noteholders shall have agreed in writing to terminate this Agreement;
(xxi) The Effective Date does not occur on or before June 1, 2015; provided, however, that if on
June 1, 2015 all conditions to effectiveness have been or could be satisfied other than the expiration or termination of any waiting period (or any extension thereof) under applicable antitrust laws, then this Agreement shall remain in effect
until such condition is satisfied but in no event beyond December 31, 2015;
(xxii) At any time, if holders of
Prepetition Noteholder Claims bound to support the Sale or Restructuring on terms materially identical to the terms set forth in the attached Plan Term Sheet hold in the aggregate less than two-thirds of the aggregate principal amount of the
Prepetition Noteholder Claims; or
(xxiii) At any time, if the Debtors are party to any other plan support, restructuring
or similar agreement that provides for a restructuring or plan that is not, in the determination of the Requisite Supporting Noteholders, consistent in all material respects with the Restructuring and the Plan as set forth in the Plan Term Sheet.
- 13 -
(b) Notwithstanding the foregoing, any of the dates set forth in this Section 10 may
be extended by agreement between the Debtors and the Requisite Supporting Noteholders. In addition, without limiting the provisions of Section 11 hereof and the related Termination Event set forth in clause (xix) of
Section 10(a), no Party may seek to terminate this Agreement based upon a breach or a failure of a condition (if any) in this Agreement if such breach or failure is caused by, results from, or arises out of, solely such Partys own
actions or omissions.
(c) If it has not already terminated, the Agreement shall terminate immediately upon the Effective Date.
(d) Upon a termination of this Agreement in accordance with clauses (a) or (c) of this Section 10, no
Party hereto shall have any continuing liability or obligation to any other Party hereunder and the provisions of this Agreement shall have no further force or effect, except for the provisions in Sections 12, 13 and 15 through
23, each of which shall survive termination of this Agreement; provided that no such termination shall relieve any Supporting Noteholder from liability for its breach or non-performance of its obligations hereunder prior to the date of
such termination and the rights of any Party as it relates to such breach or non-performance by any Supporting Noteholder shall be preserved in the event of the occurrence of such breach or non-performance.
11. Fiduciary Duties. Notwithstanding anything to the contrary herein, nothing in this Agreement shall require the Debtors or any
directors or officers of the Debtors (in such persons capacity as a director or officer of the Debtors) to take any action, or to refrain from taking any action, to the extent such action or forbearance is inconsistent with its or their
fiduciary obligations under applicable law, as determined after consultation with outside legal counsel.
12. No Third-Party
Beneficiaries. This Agreement shall be solely for the benefit of the Parties hereto, and no other Person shall be a third-party beneficiary hereof.
13. Entire Agreement. As of the date this Agreement becomes effective, this Agreement (and any confidentiality agreements entered into
in connection herewith or described in Section 6(a) hereof) constitutes the entire agreement among the Parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written
and oral, among the Parties with respect to the subject matter hereof.
14. Amendment or Waiver.
(a) This Agreement may not be modified, altered, amended, waived, or supplemented except by an agreement in writing signed by each of the
Debtors and the Requisite Supporting Noteholders. Notwithstanding the foregoing, this Section 14(a) may not be modified, altered, or amended except in writing signed by each of the Debtors and the Supporting Noteholders.
- 14 -
(b) Each of the Parties agrees to negotiate in good faith all amendments and modifications to
this Agreement as reasonably necessary and appropriate to consummate the Restructuring. Such agreement shall not be deemed to prejudice or limit in any way any Partys rights under Section 10 of this Agreement.
(c) No waiver of any of the provisions of this Agreement shall be deemed or constitute a waiver of any other provision of this Agreement,
whether or not similar, nor shall any waiver be deemed a continuing waiver.
15. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, including all matters of construction, validity, and performance without giving effect to the conflicts of laws provisions thereof except New York General Obligations Law
Section 5-1401. Each Party hereby irrevocably submits to the jurisdiction of any state court or federal court located in New York County, New York in respect of any suit, action, or proceeding arising out of or relating to this Agreement, and
irrevocably accepts for itself and in respect of its property, generally and unconditionally, jurisdiction of the aforesaid courts. Each Party irrevocably waives, to the fullest extent it may effectively do so under applicable law, any objection
that it may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum.
Nothing herein shall affect the right of any Party to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against any other party in any other jurisdiction. Notwithstanding the foregoing consent
to New York jurisdiction, if the Bankruptcy Cases are commenced, each Party agrees that the Bankruptcy Court shall have exclusive jurisdiction of all matters arising out of or in connection with this Agreement.
16. Counterparts. This Agreement may be executed in any number of counterparts and by different Parties in separate counterparts and by
facsimile or other electronic means, with the same effect as if all Parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together, and shall constitute one and the same instrument.
17. Assignment; Severability. Without limiting the obligations of each Supporting Noteholder pursuant to Section 7(b)
hereof, this Agreement is intended to bind and inure to the benefit of the Parties and their respective successors, assigns, heirs, executors, administrators and representatives. Any term or provision of this Agreement that is invalid or
unenforceable in any jurisdiction, shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only as broad as is
enforceable.
18. Specific Performance. It is understood and agreed by the Parties that money damages would not be a sufficient
remedy for any breach of this Agreement by any Party and each non-breaching Party shall be entitled to specific performance and injunctive or other equitable relief as the sole and exclusive remedy of any such breach, without the necessity of
proving the inadequacy of monetary damages as a remedy, including an order of the Bankruptcy Court requiring any Party to comply promptly with any of its obligations hereunder.
- 15 -
19. Representation by Counsel. Each Party acknowledges that it has had the opportunity to
be represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of law or any legal decision that would provide any Party with a defense to the enforcement of the terms of this
Agreement against such Party based upon lack of legal counsel, shall have no application and is expressly waived.
20. Settlement
Discussions. This Agreement is part of a proposed settlement of matters that could otherwise be the subject of litigation among the Parties hereto. Nothing herein shall be deemed an admission of any kind. Pursuant to Federal Rule of Evidence
408, any applicable state rules of evidence and any other applicable law, foreign or domestic, this Agreement and all negotiations relating thereto shall not be admissible into evidence in any proceeding other than to prove the existence of this
Agreement or in a proceeding to enforce the terms of this Agreement.
21. Confidentiality. Unless legally obligated by law,
regulation, subpoena, civil investigative demand, the rules of any regulatory authority or stock exchange or other compulsory process (including in connection with any governmental or third party approval of the Restructuring or in connection with
any litigation concerning the Restructuring), each of the Parties agrees and acknowledges that, prior to the Petition Date, it will not disclose to any Person the content or any term or provision of this Agreement, other than (a) to the
representatives of each such Party who are subject to an equivalent duty of confidentiality (or, in the case of a Supporting Noteholder, to another Supporting Noteholder or its representatives), in each case, in connection with the transactions
contemplated hereby or (b) in the case of a Supporting Noteholder, as permitted by any existing confidentiality agreement between such Supporting Noteholder and the Company, the provisions of which shall control in all cases with respect to the
obligations under this Section 21 prior to the Petition Date. Notwithstanding the foregoing, a Supporting Noteholder may disclose the content or any term or provision of this Agreement, without any notice to the other Parties, to a
regulatory or self-regulatory authority with jurisdiction over its operations generally in the course of such authoritys routine examination or request. From and after the commencement of the Bankruptcy Cases on the Petition Date, the Parties
acknowledge and agree that this Agreement and its contents shall be publicly disclosed by the Debtors, whether in filings by the Debtors with the Bankruptcy Court regarding this Agreement or by the Debtors under applicable law or stock exchange
rule.
22. Fees. The Debtors shall reimburse or pay in cash, on a monthly basis, all reasonable documented costs and expenses of
legal, accounting and similar professionals incurred by the Supporting Noteholders prior to termination of this Agreement in accordance with Section 10 hereof, including, without limitation, the fees, costs and expenses of Willkie
Farr & Gallagher LLP. Such costs and expenses shall be paid within fifteen (15) calendar days after receipt by the Debtors of a reasonably detailed invoice, which invoice may be redacted to protect privileged and/or material non-public
information. Unless otherwise ordered by the Bankruptcy Court, no recipient of such payment shall be required to file with respect thereto any interim or final fee application with the Bankruptcy Court.
- 16 -
23. Consideration. The Parties acknowledge that, other than the agreements, covenants,
representations, and warranties set forth herein and to be included in the Plan Documents, no consideration shall be due or paid to any Supporting Noteholder, except as otherwise provided herein in exchange for its obligations under this Agreement.
24. Notice. Any notices or other communications in connection with this Agreement shall be in writing and shall be deemed to have
been duly given when delivered in person or upon confirmation of receipt when transmitted by email or on receipt after dispatch by registered or certified mail, postage prepaid, or on the next Business Day if transmitted by national overnight
courier, addressed in each case as follows:
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(a) |
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If to the Debtors: |
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Dendreon Corporation |
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1301 2nd Avenue |
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Seattle, WA 98101 |
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gcox@dendreon.com |
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Attention: Gregory R. Cox |
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With a copy to: |
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Skadden, Arps, Slate, Meagher & Flom LLP |
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Four Times Square |
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New York, NY 10036 |
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ken.ziman@skadden.com |
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Attention: Ken Ziman, Esq. |
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155 N. Wacker Drive Chicago, IL,
60606 |
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felicia.perlman@skadden.com |
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Attention: Felicia Perlman, Esq. |
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500 Boylston Street |
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Boston, MA 02116 |
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graham.robinson@skadden.com |
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Attention: Graham Robinson, Esq. |
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(b) |
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If to a Supporting Noteholder: |
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c/o Deerfield Management Company, L.P. |
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780 Third Avenue, 37th Floor |
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New York, NY 10017 |
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Attention: David J. Clark |
- 17 -
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With a copy to: |
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Willkie Farr & Gallagher LLP |
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787 Seventh Avenue |
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New York, NY 10019 |
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sgartner@willkie.com |
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gastrachan@willkie.com |
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jlongmire@willkie.com |
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Attention: Steven J. Gartner, Esq. |
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Gregory B Astrachan, Esq. |
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John C. Longmire, Esq. |
(Signature Pages Follow)
- 18 -
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.
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DENDREON CORPORATION |
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By: |
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/s/ Robert L. Crotty |
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Name: |
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Robert L. Crotty |
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Title: |
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Executive Vice President, General |
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Counsel and Secretary |
Signature Page to Plan Support Agreement
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.
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DENDREON DISTRIBUTION, LLC |
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By: |
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/s/ Robert L. Crotty |
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Name: |
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Robert L. Crotty |
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Title: |
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Vice President, General Counsel |
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and Secretary |
Signature Page to Plan Support Agreement2
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.
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DENDREON HOLDINGS, LLC |
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By: |
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/s/ Robert L. Crotty |
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Name: |
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Robert L. Crotty |
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Title: |
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Vice President, General Counsel |
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and Secretary |
Signature Page to Plan Support Agreement
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.
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DENDREON MANUFACTURING, LLC |
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By: |
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/s/ Robert L. Crotty |
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Name: |
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Robert L. Crotty |
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Title: |
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Vice President, General Counsel and Secretary |
Signature Page to Plan Support Agreement
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.
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SUPPORTING NOTEHOLDERS |
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DEERFIELD PARTNERS, L.P. |
By: |
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Deerfield Mgmt, L.P. |
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General Partner |
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By: |
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J.E. Flynn Capital, LLC |
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General Partner |
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By: |
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/s/ David J. Clark |
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Name: |
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David J. Clark |
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Title: |
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Authorized Signatory |
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DEERFIELD INTERNATIONAL MASTER FUND, L.P. |
By: |
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Deerfield Mgmt, L.P. |
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General Partner |
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By: |
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J.E. Flynn Capital, LLC |
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General Partner |
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By: |
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/s/ David J. Clark |
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Name: |
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David J. Clark |
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Title: |
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Authorized Signatory |
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DEERFIELD SPECIAL SITUATIONS FUND, L.P. |
By: |
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Deerfield Mgmt, L.P. |
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General Partner |
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By: |
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J.E. Flynn Capital, LLC |
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General Partner |
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By: |
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/s/ David J. Clark |
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Name: |
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David J. Clark |
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Title: |
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Authorized Signatory |
Signature Page to Plan Support Agreement
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DEERFIELD PRIVATE DESIGN FUND III, L.P. |
By: |
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Deerfield Mgmt III, L.P. |
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General Partner |
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By: |
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J.E. Flynn Capital III, LLC |
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General Partner |
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By: |
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/s/ David J. Clark |
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Name: |
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David J. Clark |
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Title: |
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Authorized Signatory |
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DEERFIELD SPECIAL SITUATIONS |
INTERNATIONAL MASTER FUND, L.P. |
By: |
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Deerfield Mgmt, L.P. |
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General Partner |
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By: |
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J.E. Flynn Capital, LLC |
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General Partner |
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By: |
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/s/ David J. Clark |
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Name: |
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David J. Clark |
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Title: |
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Authorized Signatory |
Signature Page to Plan Support Agreement
EXHIBIT A
PLAN TERM SHEET
(see
attached)
Dendreon Corporation
Summary Of Principal Terms Of Proposed Plan
(This Plan Term Sheet)
THIS PLAN
TERM SHEET SUMMARIZES TERMS AND CONDITIONS OF A PROPOSED RESTRUCTURING OF THE DEBTORS (AS DEFINED BELOW). THE TERMS SET FORTH IN THIS PLAN TERM SHEET ARE BEING PROVIDED AS PART OF A COMPREHENSIVE COMPROMISE, EACH ELEMENT OF WHICH IS CONSIDERATION
FOR THE OTHER ELEMENTS AND AN INTEGRAL ASPECT OF THE PROPOSED RESTRUCTURING OF THE DEBTORS. THE PROPOSED RESTRUCTURING DESCRIBED HEREIN WOULD BE IMPLEMENTED BY MEANS OF A PREARRANGED PLAN OF REORGANIZATION OR LIQUIDATION, AS THE CASE MAY
BE (THE PLAN), FOR THE DEBTORS UNDER CHAPTER 11 OF TITLE 11 OF THE UNITED STATES CODE, 11 U.S.C. §§ 101 ET SEQ. (THE BANKRUPTCY CODE). THIS PLAN TERM SHEET IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES OR
SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN PURSUANT TO SECTION 1125 OF THE BANKRUPTCY CODE. ANY SUCH OFFER OR SOLICITATION WILL BE MADE ONLY IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS AND/OR PROVISIONS OF THE BANKRUPTCY CODE. THIS
OUTLINE IS BEING PROVIDED IN FURTHERANCE OF SETTLEMENT DISCUSSIONS AND IS ENTITLED TO PROTECTION PURSUANT TO FED. R. EVID. 408 AND ANY SIMILAR RULE OF EVIDENCE. THE TRANSACTIONS DESCRIBED IN THIS PLAN TERM SHEET ARE SUBJECT IN ALL RESPECTS TO, AMONG
OTHER THINGS, THE APPLICABLE PLAN SUPPORT AGREEMENT WITH THE APPLICABLE SUPPORTING NOTEHOLDERS PARTY THERETO, AND DEFINITIVE DOCUMENTATION, INCLUDING THE PLAN, APPROPRIATE DISCLOSURE MATERIAL, AND RELATED DOCUMENTS.
CERTAIN KEY TERMS
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Term |
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Description |
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Proposed Filing Entities |
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Dendreon Corporation (the Company, and once reorganized, the Reorganized Company) and its wholly owned United States
subsidiaries, Dendreon Holdings, LLC, Dendreon Distribution, LLC and Dendreon Manufacturing, LLC (collectively, the Debtors). |
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Supporting Noteholders |
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Holders named in the applicable Plan Support Agreements with the Company (the Supporting Noteholders) of the Companys 2016
Notes issued under the First Supplemental Indenture, dated January 20, 2011, to the Base Indenture, dated March 16, 2007, with The Bank of New York Mellon Trust Company, N.A., as trustee (the 2016 Notes). |
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Proposed Filing Date/Venue |
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November 9, 2014 / Delaware. |
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Stand-Alone Plan |
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On the effective date of the Plan (the
Effective Date), the Reorganized Company shall issue new common stock in the Reorganized Company (the New Common Stock), and holders of claims and interests shall receive the treatment as set forth in Exhibit 1 with
respect to the Stand-Alone Plan. The Stand-Alone Plan is subject to the
competitive process described below (the Competitive Process) to sell all or substantially all of the non-cash assets of the Debtors in a 363 Sale (as defined below) or a Plan Sale (as defined below) as an alternative to the Stand-Alone
Plan. A Qualified Bid (as defined in the Bidding Procedures) in the Competitive Process for all or substantially all of the non-cash assets of the Debtors in a 363 Sale or a Plan Sale must have a value in excess of
$275,000,000 as determined pursuant to the Bidding Procedures (as defined below). |
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Term |
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Description |
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The Competitive Process shall run from the petition date and in parallel with the process for seeking confirmation of the Stand-Alone Plan,
but shall cease in the event that no Qualified Bids are received by the bid deadline set forth in the Bidding Procedures (the Bid Deadline). If no Qualified Bids are received by the Bid Deadline, the Debtors shall prosecute confirmation
of the Stand-Alone Plan, and the Company shall emerge from bankruptcy as a reorganized entity. |
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363 Sale |
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A purchase of all or substantially all of the Debtors non-cash assets in a sale pursuant to section 363 of the Bankruptcy Code,
followed by a plan of liquidation of the Debtors in which all holders of claims and interests shall receive the treatment as set forth in Exhibit 1 with respect to the 363 Sale. |
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Plan Sale |
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A recapitalization transaction effectuated through the Plan in which the Bidder (as defined below) acquires New Common Stock of the
Reorganized Company, in which case all holders of claims and interests shall receive the treatment set forth as set forth in Exhibit 1 with respect to the Plan Sale. |
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Competitive Process |
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Prospective buyers (the Bidders) may
bid: (i) in a
363 Sale; OR (ii) in a
Plan Sale; in each case subject to the applicable requirements set
forth in the bidding procedures attached hereto as Exhibit 2 (the Bidding Procedures).
If one or more Bidders submits a Qualified Bid and a Successful Bidder (as defined in the Bidding Procedures) enters into an asset purchase agreement or an
investment agreement (as the case may be) at the Auction (as defined below) (or, in the event that an Auction is not conducted because only one Qualified Bid is received by the Bid Deadline, upon entry into such asset purchase agreement or
investment agreement (as the case may be) in accordance with the Bidding Procedures, the Debtors shall prosecute confirmation of the applicable plan scenario (i.e., 363 Sale or Plan Sale). |
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Bidding Procedures |
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On the petition date, the Debtors shall file a motion seeking approval of the Bidding Procedures to govern the Competitive Process, and shall
seek a hearing date as soon as practicable thereafter but no later than 30 days after the petition date. Among other things, the Bidding Procedures shall set forth the deadline and requirements for the submission of a Qualified Bid, and shall set
the date of the Auction and the deadline to file any objections to the results of the Auction. Supporting Noteholders shall be permitted to submit a cash bid in accordance with the Bidding Procedures. |
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Auction or Acceptance of Qualified Bid |
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An auction (the Auction) shall be held
if the Company receives more than one Qualified Bid, and shall occur within 5 business days after the Bid Deadline unless otherwise determined by the Company.
In the event that the Company receives only one Qualified Bid by the Bid Deadline, the Company shall promptly accept such Qualified Bid and enter into an asset
purchase agreement or investment agreement (as the case may be) with respect to such Qualified Bid no later than 5 business days following the Bid Deadline. |
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Releases, Indemnification and Exculpation |
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To the fullest extent permitted by applicable law, the Plan shall provide for comprehensive mutual release, indemnification and exculpation
provisions from and for the benefit of the Debtors, the Supporting Noteholders, and the Trustee for the 2016 Notes, and all individuals serving, or who have served since the petition date, as a manager, director, managing member, officer, partner,
shareholder, or employee of any of the foregoing and the attorneys and other advisors to each of the foregoing. |
2
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Term |
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Description |
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Conditions to Effectiveness |
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The Plan shall contain such conditions to effectiveness of the applicable Plan alternatives customary in plans of reorganization or plans of liquidation, as the case may be, of such type. |
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Milestones |
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Milestones related to the Plan and the Competitive Process shall be as set forth in Section 10 of the Plan Support Agreement and the Bidding Procedures, respectively. |
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Assumed Contracts |
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In a Stand-Alone Plan, the Debtors shall identify in writing to the Supporting Noteholders the contracts proposed to be assumed and rejected at least 15 business days prior to the hearing seeking to confirm the Plan
and shall consult with the Supporting Noteholders in connection therewith. |
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Investor Rights |
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In a Stand-Alone Plan, usual and customary investor rights acceptable in form and substance in all respects to the Supporting Noteholders, including as to status as a private company, board selection, rights under a
shareholders agreement and trading restrictions. |
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Management Incentive Plan |
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In a Stand-Alone Plan, any Management Incentive Plan will be acceptable in all respects to the Supporting Noteholders, and the Debtors will provide reasonable assistance and cooperation in recommending proposed terms
for such plan. |
* * * * *
3
EXHIBIT 1
CLASSIFICATION, IMPAIRMENT AND TREATMENT OF CLAIMS
Set forth below are the proposed classification, impairment and treatment of claims under the Plan, including relevant differences among the three Plan
alternatives:
Stand-Alone Plan
363 Sale
Plan
Sale
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Claims |
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Impairment |
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Treatment |
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Administrative Expenses and Priority Tax Claims |
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N/A |
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All allowed administrative expenses and allowed priority tax claims shall be paid in full in cash or upon such other terms as the applicable Debtors and the holder thereof
may agree, or otherwise be unimpaired. Reserves will be established for any disputed administrative expense and priority tax claims and an escrow shall be established for the payment of professional fee claims subject to the fee application and
approval process. |
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Class 1
Other Priority
Claims |
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Unimpaired |
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To the extent applicable, all allowed other
priority claims shall be reinstated or paid in full in cash. Not entitled to vote;
conclusively deemed to accept the Plan. |
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Class 2
Secured Claims |
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Unimpaired |
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To the extent applicable, all allowed secured claims shall, at the Debtors
option, be paid in full in cash on, or promptly following, the Effective Date or be treated in a manner so as to be unimpaired within the meaning of Bankruptcy Code section 1124.
Not entitled to vote; conclusively deemed to accept the Plan. |
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Class 3
Noteholders Claims
(2016 Notes) |
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Impaired |
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Stand-Alone Plan
Holders of 2016 Notes shall receive, on a pro rata basis with holders of General Unsecured
Claims to the extent set forth below following the determination of treatment of General Unsecured Claims set forth below, shares of New Common Stock of the Reorganized Company, subject to dilution for New Common Stock, if any, issued in connection
with the Management Incentive Plan. 363 Sale OR Plan Sale
Holders of 2016 Notes shall receive, on a pro rata basis with holders of Class 4 General
Unsecured Claims, distributable cash or other assets of the Debtors estates, in an amount not to exceed 100% of the amount of their allowed claims plus interest.
Entitled to vote. |
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Claims |
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Impairment |
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Treatment |
Class
4 General Unsecured Claims |
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TBD |
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Stand-Alone Plan
Treatment of general unsecured claims other than those based on the 2016 Notes (the General Unsecured Claims) to be reasonably determined by the
Debtors and Supporting Noteholders holding, in the aggregate, at least two-thirds in aggregate principal amount of the 2016 Notes. In the event that General Unsecured Claims are not reinstated or paid in full, it is anticipated that a convenience
class may be appropriate for claims below a certain value. Voting TBD. |
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Impaired |
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363 Sale OR Plan Sale
General Unsecured Claims shall receive, on a pro rata basis with holders of Class 3 Noteholders Claims, distributable cash or other assets of the
Debtors estates, in an amount not to exceed 100% of the amount of their allowed claims plus interest.
Entitled to vote. |
Class 5
Intercompany Claims |
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Unimpaired |
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Stand-Alone Plan OR Plan Sale
Intercompany claims (including between Debtors and non-Debtor subsidiaries that are wholly owned by Debtors) shall be reinstated or compromised as determined
by the Debtors. Not entitled to vote; conclusively deemed to accept the
Plan. |
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Impaired |
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363 Sale
Intercompany claims shall be canceled or otherwise extinguished.
Not entitled to vote; deemed to reject the Plan. |
Class 6
Subordinated Claims |
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Impaired |
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Stand-Alone Plan
Applicable, holders of claims subordinated by Bankruptcy Code sections 510(b) and 510(c) will receive no distribution under the Plan.
363 Sale OR Plan Sale
Subject to payment in full of all allowed claims plus interest to the extent applicable,
holders of claims subordinated by Bankruptcy Code sections 510(b) and 510(c) (together with holders of Class 7 interests) shall receive their pro rata share of any other distributable cash or other assets of the Debtors estates. No recovery is
anticipated by holders of Class 6 interests. Not entitled to vote; deemed to reject
the Plan. |
|
|
|
|
|
Claims |
|
Impairment |
|
Treatment |
Class 7
Existing Common Stock |
|
Impaired |
|
Stand-Alone Plan
Existing shares of the Companys common stock shall be canceled; the holders thereof will receive no distribution under the Plan.
363 Sale OR Plan Sale
Subject to payment in full of all allowed claims plus interest to the extent applicable,
holders of existing shares of the Companys common stock (together with holders of Class 6 claims) shall receive their pro rata share of any other distributable cash or other assets of the Debtors estates, and such shares shall be
canceled. No recovery is anticipated by holders of Class 7 interests. Not entitled to
vote; deemed to reject the Plan. |
Class 8
Other Interests |
|
Impaired |
|
Other interests, options, warrants, call rights, puts, awards, or other agreements to acquire existing common stock in the Debtors shall be canceled; the
holders thereof will receive no distribution under the Plan. Not entitled to vote;
deemed to reject the Plan. |
Class 9
Intercompany Interests |
|
Unimpaired |
|
Stand-Alone Plan OR Plan Sale
Equity interests in a Debtor held by another Debtor shall be reinstated.
Not entitled to vote; conclusively deemed to accept the Plan. |
|
Impaired |
|
363 Sale
Equity interests in a Debtor held by another Debtor shall be canceled.
Not entitled to vote; deemed to reject the Plan. |
EXHIBIT 2
BIDDING PROCEDURES
(see
attached)
BIDDING PROCEDURES1
By the Motion, Dendreon Corporation and its direct and indirect subsidiaries that are debtors and debtors in possession in the jointly
administered chapter 11 cases pending in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court) under Case
No. 14-[ ] (together the Debtors),2 sought approval of, among other things, the procedures
through which they will determine the highest or otherwise best offer for the sale of substantially all of their non-cash assets (the Acquired Assets).
On [], 2014 the Bankruptcy Court entered an order (the
Bidding Procedures Order), which, among other things, authorized the Debtors to determine the highest or otherwise best offer for the Acquired Assets through the process and procedures set forth below (the Bidding
Procedures). The Bidding Procedures provide that the Debtors may also consider bids in the form of a recapitalization transaction effectuated through a chapter 11 plan of reorganization, subject to the requirements set forth herein (a
Chapter 11 Plan Bid). In addition, the Debtors may designate a stalking horse bidder (the Stalking Horse Bidder) in accordance with the procedures set forth below.
Acquired Assets to Be Sold
The Debtors are offering for sale all of the Acquired Assets. Except in the case of a Chapter 11 Plan Bid and except as otherwise provided in
the Acquisition Agreement or a Modified Acquisition Agreement (both as defined below) submitted by a Successful Bidder (as defined below) (including any exhibits or schedules thereto) all of the Debtors right, title and interest in and to the
Acquired Assets subject thereto shall be sold free and clear of any pledges, liens, security interests, encumbrances, claims, charges, options and interests thereon (collectively, the Interests) to the maximum extent permitted by
section 363 of the Bankruptcy Code, with such Interests to attach to the net proceeds of the sale of the Acquired Assets with the same validity and priority as such Interests applied against the Acquired Assets. More detail regarding the Acquired
Assets will be posted in the electronic data room.
Bidding Process
The Debtors and their advisors shall, subject to the other provisions of these Bidding Procedures, including the consultation obligations set
forth herein and the Bidding Procedures Order, (i) determine whether any person is a Qualified Bidder (as defined below), (ii) coordinate the efforts of Qualified Bidders in conducting their due diligence investigations, (iii) receive
offers from Qualified Bidders, (iv) negotiate any offers made to purchase the Acquired Assets, and (v) determine if any Qualified Bidder should be selected as a Stalking Horse Bidder.
1 |
Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the motion for approval of, among other things, the Bidding Procedures (the Motion).
|
2 |
The Debtors and the last four digits of their respective taxpayer identification numbers are as follows: Dendreon Corporation (3193), Dendreon Holdings, LLC (8047), Dendreon Distribution, LLC (8598) and Dendreon
Manufacturing, LLC (7123). The address of the Debtors corporate headquarters is 1301 2nd Avenue, Seattle, Washington 98101. |
Key Dates For Potential Competing Bidders
The Bidding Procedures provide interested parties with the opportunity to qualify for and participate in an auction to be conducted by the
Debtors (the Auction) and to submit competing bids for the Acquired Assets. The Debtors shall assist Qualified Bidders in conducting their respective due diligence investigations and shall accept Bids (as defined below) until
January 27, 2015 at 5:00 p.m. (prevailing Eastern Time) (the Bid Deadline).
The key dates for the sale
process are as follows:
|
|
|
December 29, 2014 |
|
Stalking Horse Deadline |
|
|
January 27, 2015 at 5:00 P.M. EST |
|
Bid Deadline - Due Date for Bids and Deposits |
|
|
February 3, 2015 at 10:00 A.M. EST |
|
Auction |
|
|
January 27, 2015 at 10:00 A.M. EST |
|
Objection Deadline in Connection with Sale of Acquired Assets to a Successful
Bidder3 |
|
|
On or before February 10, 2015 at [] EST |
|
Sale Hearing |
In the event that the Successful Bid is a Chapter 11 Plan Bid, the Sale Hearing will not occur and the Debtors
will prosecute confirmation of a plan of reorganization consistent with such Chapter 11 Plan Bid.
Procedures for the Designation of
a Stalking Horse Bidder
The Debtors, in consultation with the Consultation Parties (as defined herein), may select a Stalking
Horse Bidder for the Acquired Assets for the purposes of establishing a minimum acceptable bid with which to begin the Auction (the Stalking Horse Bid) and provide such Stalking Horse Bidder with the Bid Protections described in
the Sale Motion. The Debtors shall have until December 29, 2014 (the Stalking Horse Deadline) to select a Qualified Bid of a Qualified Bidder to be a Stalking Horse Bid. The Debtors shall finalize a purchase agreement with a
Stalking Horse Bidder (the Stalking Horse Agreement) by no later than the Stalking Horse Deadline. Within one (1) day following the Stalking Horse Deadline the Debtors shall file with the Bankruptcy Court a notice (the
Stalking Horse Notice) of such Stalking Horse Bid and
3 |
This objection deadline applies to all objections to the Sale Motion and the Sale of the Acquired Assets to a Successful Bidder, with the exception of
objections related to adequate assurance performance by the Successful Bidder or any changes to the Acquisition Agreement. |
2
a copy of the Stalking Horse Agreement. The Debtors shall serve such Stalking Horse Notice on (i) all entities known to have expressed an interest in a transaction with respect to the
Acquired Assets during the past twelve (12) months, (ii) all entities known to have asserted any lien, claim, interest or encumbrance in or upon any of the Acquired Assets, (iii) counsel to the Supporting Noteholders, and
(iv) counsel to any official committee appointed in the Chapter 11 Cases, if any.
Due Diligence
Access to Diligence Materials.
To participate in the bidding process and to receive access to due diligence (the Diligence Materials), a party must
submit to the Debtors (i) an executed confidentiality agreement substantially in the form attached hereto as Exhibit A or such other form reasonably satisfactory to the Debtors, and (ii) reasonable evidence demonstrating the
partys financial capability to consummate a sale transaction for the Acquired Assets or a recapitalization transaction pursuant to a chapter 11 plan of reorganization (any such transaction, a Transaction) as reasonably
determined by the Debtors, in consultation with the Consultation Parties. A party who qualifies for access to Diligence Materials pursuant to the prior sentence shall be a Qualified Bidder.
The Debtors will afford any Qualified Bidder the time and opportunity to conduct reasonable due diligence, as determined by the Debtors,
including reasonable access to management, access to the electronic data room and other information that a Qualified Bidder may reasonably request; provided, however, that the Debtors shall not be obligated to furnish any due diligence
information after the Bid Deadline to any party that has not submitted a Qualified Bid (as defined below). The Debtors reserve the right to withhold any Diligence Materials that the Debtors determine are business-sensitive or otherwise not
appropriate for disclosure to a Qualified Bidder who is a competitor of the Debtors or is affiliated with any competitor of the Debtors. Neither the Debtors nor their representatives shall be obligated to furnish information of any kind whatsoever
to any person that is not determined to be a Qualified Bidder.
All due diligence requests must be directed to Lazard
Frères & Co. LLC, 30 Rockefeller Plaza, New York, NY 10020, to the attention of Sven Pfeiffer (sven.pfeiffer@lazard.com; Phone: 212-632-6583; Fax: 212-332-8365).
Due Diligence from Qualified Bidders.
Each Qualified Bidder shall comply with all reasonable requests for additional information and due diligence access by the Debtors or their
advisors regarding the ability of such Qualified Bidder, as applicable, to consummate its contemplated transaction. Failure by a Qualified Bidder to comply with requests for additional information and due diligence access may be a basis for the
Debtors, in consultation with the Consultation Parties, to determine that such bidder is no longer a Qualified Bidder. Failure by a Qualified Bidder to comply with requests for additional information and due diligence access may be a basis for the
Debtors, in consultation with the Consultation Parties, to determine that a bid made by such Qualified Bidder is not a Qualified Bid.
3
Auction Qualification Process
To be eligible to participate in the Auction, each offer, solicitation or proposal (each, a Bid), must be reasonably
determined by the Debtors to satisfy each of the following conditions:
|
(a) |
Good Faith Deposit: Each Bid must be accompanied by a deposit in the amount of ten percent (10%) of the purchase price contained in the Modified Acquisition Agreement (defined below), before any reductions
for assumed liabilities, or, in the case of a Chapter 11 Plan Bid, ten percent (10%) of the amount of the capital investment contemplated by such bid, before any reductions for assumed liabilities, to an interest-bearing escrow account to be
identified and established by the Debtors (the Good Faith Deposit). |
|
(b) |
Same or Better Terms: Each Bid must be on terms that the Debtors, in their business judgment and after consulting with the Consultation Parties, determine are the same or better than the terms of either
(i) the Acquisition Agreement, or (ii) in the event the Debtors enter into a Stalking Horse Agreement, the Stalking Horse Agreement. |
|
(c) |
Executed Agreement: Each Bid must be based on the proposed acquisition agreement, which shall be prepared by the Debtors in Consultation with the Consultation Parties and shall be filed with the Bankruptcy Court
no later than the day after the Stalking Horse Deadline (the Acquisition Agreement) and must include executed transaction documents, signed by an authorized representative of such Qualified Bidder, pursuant to which the Qualified
Bidder proposes to effectuate a Transaction (a Modified Acquisition Agreement).4 Each Bid must also include a copy of the Acquisition Agreement marked against the Modified
Acquisition Agreement to show all changes requested by the Qualified Bidder (including the inclusion of the purchase price). Each Modified Acquisition Agreement must provide (1) a commitment to close within two business days after all closing
conditions are met and (2) a representation that the Qualified Bidder will (a) make all necessary filings under the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act), and (b) submit all
necessary filings under the HSR Act within ten (10) days following the effective date of the Modified Acquisition Agreement. |
4 |
If the Bid is a Chapter 11 Plan Bid and the Debtors have not filed a form of investment agreement with the Bankruptcy Court within at least ten (10) business days prior to the Bid Deadline, any Qualified Bidder
submitting a Chapter 11 Plan Bid shall submit a Modified Acquisition Agreement marked as appropriate. If a form of investment agreement has been filed, any Qualified Bidder submitting a Chapter 11 Plan Bid shall submit a modified investment
agreement (a Modified Investment Agreement). All requirements of these Bid Procedures that apply to a Modified Acquisition Agreement shall apply to a Modified Investment Agreement. |
4
In the event the Debtors enter into a Stalking Horse Agreement each Bid must include a copy of
the Modified Acquisition Agreement marked against the Stalking Horse Agreement.
|
(d) |
Minimum Bid: A Bid (including a Chapter 11 Plan Bid) for all or substantially all of the Debtors non-cash assets must propose a minimum purchase price, including any assumption of liabilities and any
earnout or similar provisions, that in the Debtors reasonable business judgment, after consulting with the Consultation Parties, has a value greater than $275,000,0005. |
In the event that the Debtors enter into a Stalking Horse Agreement, a Bid for all or substantially all of the Debtors assets (or in the
case of a Chapter 11 Plan Bid for the equity of reorganized Dendreon) must propose a minimum purchase price, including any assumption of liabilities and any earnout or similar provisions, that in the Debtors reasonable business judgment, after
consulting with the Consultation Parties, has a value greater than (i) the purchase price set forth in any Stalking Horse Purchase Agreement, (ii) the Break-Up Fee (as defined in the Sale Motion), if any (iii) the Expense
Reimbursement Amount (as defined in the Sale Motion), if any, (iv) the Assumed Liabilities (as defined in the Stalking Horse Agreement), as applicable, and (v) the Overbid Amount6, as
applicable the sum of which shall be the Stalking Horse Auction Minimum Bid Amount.
|
(e) |
Designation of Assigned Contracts and Leases: A Bid must identify any and all executory contracts and unexpired leases of the Debtors that the Qualified Bidder wishes to be assumed and, with respect to any Bid
that is not a Chapter 11 Plan Bid, assigned to the Qualified Bidder at closing, pursuant to a Transaction. A Bid must specify whether the Debtors or the Qualified Bidder will be responsible for any cure costs associated with such assumption, and
include a good faith estimate of such cure costs (which estimate may be provided by the Debtors). |
|
(f) |
Designation of Assumed Liabilities: A Bid must identify all liabilities which the Qualified Bidder proposes to assume. |
|
(g) |
Corporate Authority: A Bid must include written evidence reasonably acceptable to the Debtors demonstrating appropriate corporate authorization to consummate the proposed Transaction; provided that, if the
Qualified Bidder is an entity specially formed for the purpose of effectuating the Transaction, then the Qualified Bidder must furnish written evidence reasonably acceptable to the Debtors of the approval of the Transaction by the equity holder(s)
of such Qualified Bidder. |
5 |
To the extent a Supporting Noteholder submits a Bid, such Bid must be a cash Bid. |
6 |
The Overbid Amount shall be $1 million. |
5
|
(h) |
Disclosure of Identity of Qualified Bidder: A Bid must fully disclose the identity of each entity that will be bidding for or purchasing the Acquired Assets or otherwise participating in connection with such Bid,
and the complete terms of any such participation, including any agreements, arrangements or understandings concerning a collaborative or joint bid or any other combination concerning the proposed Bid. |
|
(i) |
Proof of Financial Ability to Perform: A Bid must include written evidence that the Debtors may reasonably conclude, in consultation with their advisors and the Consultation Parties, demonstrates that the
Qualified Bidder has the necessary financial ability to close the Transaction and provide adequate assurance of future performance under all contracts to be assumed and assigned in such Transaction. Such information must include,
inter alia, the following: |
|
(1) |
contact names and numbers for verification of financing sources; |
|
(2) |
written evidence of the Qualified Bidders internal resources and proof of any debt funding commitments from a recognized banking institution and, if applicable, equity commitments in an aggregate amount equal to
the cash portion of such Bid or the posting of an irrevocable letter of credit from a recognized banking institution issued in favor of the Debtors in the amount of the cash portion of such Bid, in each case, as are needed to close the Transaction;
|
|
(3) |
the Qualified Bidders current financial statements (audited if they exist) or other similar financial information reasonably acceptable to the Debtors; |
|
(4) |
a description of the Qualified Bidders pro forma capital structure (and, in the case of a Chapter 11 Plan Bid, the Debtors pro forma capital structure); and |
|
(5) |
any such other form of financial disclosure or credit-quality support information or enhancement reasonably acceptable to the Debtors, in consultation with the Consultation Parties, demonstrating that such Qualified
Bidder has the ability to close the Transaction. |
|
(j) |
Regulatory and Third Party Approvals: A Bid must set forth each regulatory and third-party approval required for the Qualified Bidder to consummate the Transaction, and the time period within which the Qualified
Bidder expects to receive such regulatory and third-party approvals, and the Debtors, in consultation with the Consultation Parties, may consider the timing of such approvals, and any actions the Qualified Bidder will take to ensure receipt of such
approval(s) as promptly as possible, when considering the other Bid Assessment Criteria (defined below). |
|
(k) |
Contact Information and Affiliates: A Bid must provide the identity and contact information for the Qualified Bidder and full disclosure of any parent companies of the Qualified Bidder. |
6
|
(l) |
Contingencies: A Bid may not be conditioned on obtaining financing or any internal approval, or on the outcome or review of due diligence. |
|
(m) |
Irrevocable: A Bid must be irrevocable until the Good Faith Deposit associated with such Bid must be returned in accordance with the terms hereof (or, if the Successful Bid is a Chapter 11 Plan Bid, until
confirmation of such plan of reorganization), provided that if such Bid is accepted as the Successful Bid or the Backup Bid (as defined below), such Bid shall continue to remain irrevocable, subject to the terms and conditions of the Bidding
Procedures. |
|
(n) |
Compliance with Diligence Requests. The Qualified Bidder submitting a Bid must have complied with reasonable requests for additional information and due diligence access from the Debtors (as described above) to
the reasonable satisfaction of the Debtors. |
|
(o) |
Confidentiality Agreement. To the extent not already executed, a Bid must include an executed confidentiality agreement substantially in the form attached hereto as Exhibit A or otherwise in form and
substance reasonably satisfactory to the Debtors. |
|
(p) |
Termination Fees. Except with respect to any Stalking Horse Bidder, a Bid must not entitle the Qualified Bidder to any break-up fee, termination fee or similar type of payment or reimbursement and, by submitting
a Bid, the Qualified Bidder waives the right to pursue a substantial contribution claim under 11 U.S.C. § 503 related in any way to the submission of its Bid or participation in any Auction (as defined below). |
A Bid received from a Qualified Bidder that meets the above requirements for the applicable assets, as determined by the Debtors in their sole
discretion after consulting with the Consultation Parties, shall constitute a Qualified Bid for such assets; provided that if the Debtors receive a Bid prior to the Bid Deadline that is not a Qualified Bid the Debtors may
provide the Qualified Bidder with the opportunity to remedy any deficiencies prior to the Auction; provided, further, that, for the avoidance of doubt, if any Qualified Bidder fails to comply with reasonable requests for additional
information and due diligence access from the Debtors to the satisfaction of the Debtors, the Debtors may, after consulting with the Consultation Parties, disqualify any Qualified Bidder and Qualified Bid in the Debtors discretion, and such
Qualified Bidder shall not be entitled to attend or participate in the Auction.
Bid Deadline
The following parties must receive a Bid in writing, on or before January 27, 2015 at 5:00 p.m. (prevailing Eastern Time) or such earlier
date as may be agreed to by each of the Debtors, after consulting with the Consultation Parties (the Bid Deadline): (1) the Debtors, 200 Crossing Boulevard, Bridgewater, NJ 08807, Attn: Robert Crotty
(rcrotty@dendreon.com); (2) counsel for the Debtors, Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, NY 10036, Attn: Ken Ziman (ken.ziman@skadden.com), 155 N. Wacker Drive, Chicago, IL, 60606,
7
Attn: Felicia Perlman (felicia.perlman@skadden.com), and 500 Boylston Street, Boston, MA 02116, Attn: Graham Robinson (graham.robinson@skadden.com); (3) financial advisor to
the Debtors, Lazard Frères & Co. LLC, 30 Rockefeller Plaza, New York, NY 10020, Attn: Sven Pfeiffer (sven.pfeiffer@lazard.com) and Brandon Aebersold (brandon.aebersold@lazard.com); (4) counsel to the Unaffiliated
Noteholders, Brown Rudnick LLP, One Financial Center, Boston, Massachusetts 02111, Attention: Steven D. Pohl (spohl@brownrudnick.com) and Seven Times Square, New York, NY 10036, Attention: John F. Storz (jstorz@brownrudnick.com); and
(5) counsel to the Deerfield Holders, Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, NY 10019, Attention: John C. Longmire (jlongmire@willkie.com).
Auction
If two or
more Qualified Bids are received by the Bid Deadline, or in the event the Debtors enter into a Stalking Horse Agreement and one Qualified Bid other than that submitted by the Stalking Horse Bidder is received by the Bid Deadline, the Debtors will
conduct an auction (the Auction) to determine the highest or otherwise best Qualified Bid. This determination shall take into account any factors the Debtors, in consultation with the Consultation Parties, reasonably deem relevant
to the value of the Qualified Bid to the estates and may include, but are not limited to, the following: (a) the amount and nature of the consideration, including any assumed liabilities; (b) the number, type and nature of any changes to
the Acquisition Agreement requested by each Qualified Bidder; (c) the extent to which such modifications or provisions are likely to delay closing of the sale of the Debtors assets and the cost to the Debtors of such modifications or
delay; (d) the total consideration to be received by the Debtors; (e) the likelihood of the Qualified Bidders ability to close a transaction and the timing thereof; (f) the net benefit to the Debtors estates, taking into
account, if applicable, any Stalking Horse Bidders right to any Break Up Fee or Expense Reimbursement Amount, and (f) any other qualitative or quantitative factor the Debtors, in consultation with the Consultation Parties, deem reasonably
appropriate under the circumstances (collectively, the Bid Assessment Criteria).
If two or more Qualified Bids are not
received by the Bid Deadline, or in the event the Debtors enter into a Stalking Horse Agreement, if one Qualified Bid other than that submitted by the Stalking Horse Bidder is not received by the Bid Deadline, the Debtors may determine not to
conduct the Auction. If the Debtors have not entered into a Stalking Horse Agreement and only one Qualified Bid is received by the Bid Deadline, the Debtors may, in consultation with the Consultation Parties, select the Modified Acquisition
Agreement of such Qualified Bidder to be the Successful Bid and such Qualified Bidder shall be the Successful Bidder. In the event the Debtors enter into a Stalking Horse Agreement, if a Qualified Bid other than that submitted by the Stalking Horse
Bidder is not received by the Bid Deadline, the Stalking Horse Agreement shall become the Successful Bid and the Stalking Horse Qualified Bidder Shall be the Successful Bidder. In the event that the Debtors have not entered into a Stalking Horse
Agreement and no Qualified Bids are received by the Bid Deadline, the Debtors shall pursue a restructuring with the Supporting Noteholders, as outlined in the Plan Support Agreement and the Plan Term Sheet attached thereto.
8
Procedures for Auction
The Auction, if necessary, shall take place on or before February 3, 2015 at 10:00 a.m. (prevailing Eastern Time) at the offices of
counsel for the Debtors, Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, NY 10036, or such other place and time as the Debtors shall notify all Qualified Bidders that have submitted Qualified Bids (including the
Stalking Horse Bidder, if any), the Supporting Noteholders and their counsel and any official committee appointed in the Debtors chapter 11 cases and its counsel. The Auction shall be conducted according to the following procedures:
Participation.
Only the Debtors,
the Consultation Parties, and any Qualified Bidder that has submitted a Qualified Bid (including the Stalking Horse Bidder, if any), in each case, along with their representatives and counsel, or such other parties as the Debtors shall determine, in
consultation with the Consultation Parties, shall attend the Auction (such attendance to be in person) and only such Qualified Bidders (including the Stalking Horse Bidder, if any), or such other parties as the Debtors shall determine, in
consultation with the Consultation Parties, will be entitled to make any Bids at the Auction.
The Debtors Shall Conduct the Auction.
The Debtors and their professionals shall direct and preside over the Auction and the Auction shall be transcribed. Other than as expressly
set forth herein, the Debtors (in consultation with the Consultation Parties) may conduct the Auction in the manner they reasonably determine will result in the highest or otherwise best Qualified Bid. The Debtors shall use their best efforts to
provide each participant in the Auction with a copy of the Modified Acquisition Agreement associated with the highest or otherwise best Qualified Bid received before the Bid Deadline (such highest or otherwise best Qualified Bid the Auction
Baseline Bid). In addition, at the start of the Auction, the Debtors shall describe the terms of the Auction Baseline Bid. Each Qualified Bidder (including the Stalking Horse Bidder, if any) participating in the Auction must confirm that
it (a) has not engaged in any collusion with respect to the bidding or sale of any of the assets described herein, (b) has reviewed, understands and accepts the Bidding Procedures and (c) has consented to the core jurisdiction of the
Bankruptcy Court (as described more fully below).
Terms of Overbids.
An Overbid is any bid made at the Auction subsequent to the Debtors announcement of the respective
Auction Baseline Bid. Any Overbid for purposes of this Auction must comply with the following conditions:
|
(a) |
Minimum Overbid Increments: Any Overbid after and above the respective Auction Baseline Bid shall be made in increments valued at not less than
$250,000. In order to maximize value, the Debtors reserve the right, in consultation with the Consultation Parties, to announce reductions or increases in the minimum incremental bids (or in valuing such bids) at any time during the Auction.
Additional consideration in excess of the amount set forth in the |
9
|
respective Auction Baseline Bid may include cash and/or noncash consideration, provided, however, that the value for such non-cash consideration shall be determined by the Debtors,
in consultation with the Consultation Parties, in their reasonable business judgment. |
|
(b) |
Remaining Terms Are the Same as for Qualified Bids: Except as modified herein or by the Debtors at the Auction, an Overbid at the Auction must comply with the conditions for a Qualified Bid set forth above,
provided, however, that (i) the Bid Deadline shall not apply, (ii) no additional Good Faith Deposit shall be required beyond the Good Faith Deposit previously submitted by a Qualified Bidder, provided that the
Successful Bidder shall be required to make a representation at the end of the Auction that it will provide any additional deposit necessary so that its Good Faith Deposit is equal to the amount of ten percent (10%) of the purchase price, or
ten percent 10% of the capital investment, contained in the Successful Bid, and (iii) each Overbid may be based on the Auction Baseline Bid, or any other form Modified Acquisition Agreement submitted prior to the Auction. Any Overbid must
include, in addition to the amount and the form of consideration of the Overbid, a description of all changes (if any) requested by the Qualified Bidder to the Acquisition Agreement or a previously submitted Modified Acquisition Agreement, in
connection therewith (including any changes to the designated assigned contracts and leases and assumed liabilities). Any Overbid must remain open and binding on the Qualified Bidder. |
At the Debtors discretion, to the extent not previously provided (which shall be determined by the Debtors in consultation with the
Consultation Parties), a Qualified Bidder submitting an Overbid at the Auction must submit, as part of its Overbid, written evidence (in the form of financial disclosure or credit-quality support information or enhancement reasonably acceptable to
the Debtors) reasonably demonstrating such Qualified Bidders ability to close the Transaction proposed by such Overbid.
Announcement and
Consideration of Overbids.
|
(a) |
Announcement of Overbids: The Debtors shall announce at the Auction the material terms of each Overbid, the total amount of consideration offered in each such Overbid, and the basis for calculating such total
consideration and such other terms as the Debtors, in consultation with the Consultation Parties, reasonably determine will facilitate the Auction. |
|
(b) |
Consideration of Overbids: Subject to the deadlines set forth herein, the Debtors reserve the right, in consultation with the Consultation Parties, in their reasonable business judgment, to make one or more
continuances of the Auction to, among other things: facilitate discussions between the Debtors and individual Qualified Bidders; allow individual Qualified Bidders to consider how they wish to proceed; or give Qualified Bidders the opportunity to
provide the Debtors with such additional evidence as the Debtors in their reasonable business judgment may require, that the Qualified Bidder has sufficient internal resources, or has received sufficient non-contingent debt and/or equity funding
commitments, to consummate the proposed Transaction at the prevailing Overbid amount. |
10
Backup Bidder.
Notwithstanding anything in the Bidding Procedures to the contrary, if an Auction is conducted, the Qualified Bidder with the next highest or
otherwise best Bid at the Auction, as determined by the Debtors, in the exercise of their business judgment and after consulting with the Consultation Parties, will be designated as the backup bidder (the Backup Bidder). The
Backup Bidder shall be required to keep its initial Bid (or if the Backup Bidder submitted one or more Overbids at the Auction, the Backup Bidders final Overbid) (the Backup Bid) open and irrevocable until the earlier of
(i) 5:00 p.m. (prevailing Eastern Time) on the date that is sixty (60) days after the date of entry of the Sale Order, or, if the Successful Bid is a Chapter 11 Plan Bid, until the effective date of such plan of reorganization (the
Outside Backup Date), or (ii) the closing of the transaction with the Successful Bidder.
Following the Sale
Hearing, if the Successful Bidder fails to consummate an approved transaction, the Backup Bidder will be deemed to have the new prevailing bid, and the Debtors will be authorized, but not required, without further order of the Bankruptcy Court, to
consummate the transaction with the Backup Bidder. In such case of a breach or failure to perform on the part of the Successful Bidder (including any Backup Bidder designated as a Successful Bidder), the defaulting Successful Bidders deposit
shall be forfeited to the Debtors. The Debtors, on their behalf and on behalf of each of their respective estates, specifically reserve the right to seek all available damages, including specific performance, from any defaulting Successful Bidder
(including any Backup Bidder designated as a Successful Bidder) in accordance with the terms of the Bidding Procedures.
Additional Procedures.
The Debtors (after consulting with the Consultation Parties) may announce at the Auction additional procedural rules that are
reasonable under the circumstances for conducting the Auction, so long as such rules are not inconsistent in any material respect with the Bidding Procedures.
Consent to Jurisdiction and Authority as Condition to Bidding.
All Qualified Bidders (including the Stalking Horse Bidder, if any) shall be deemed to have (1) consented to the core jurisdiction of the
Bankruptcy Court to enter an order or orders, which shall be binding in all respects, in any way related to the Debtors, the Chapter 11 Cases, the Bidding Procedures, the Auction, any Modified Acquisition Agreement, or the construction and
enforcement of documents relating to any Transaction, (2) waived any right to a jury trial in connection with any disputes relating to the Debtors, the Chapter 11 Cases, the Bidding Procedures, the Auction, any Modified Acquisition Agreement,
or the construction and enforcement of documents relating to any Transaction and (3) consented to the entry of a final order or judgment in any way related to the Debtors, the Chapter 11 Cases, the Bidding Procedures, the Auction, any Modified
Acquisition Agreement, or the construction and enforcement of documents relating to any Transaction if it is determined that the Bankruptcy Court would lack Article III jurisdiction to enter such a final order or judgment absent the consent of the
parties.
11
Sale Is As Is/Where Is.
Except as otherwise provided in the Modified Acquisition Agreement or the Sale Order, the Acquired Assets or any other assets of the Debtors
sold pursuant to the Bidding Procedures, shall be conveyed at the closing of a transaction with a Successful Bidder in their then-present condition, AS IS, WITH ALL FAULTS, AND WITHOUT ANY WARRANTY WHATSOEVER, EXPRESS OR IMPLIED.
Closing the Auction.
The
Auction shall continue until there is one Qualified Bid for the Acquired Assets or a Chapter 11 Plan Bid that the Debtors determine in their reasonable business judgment, after consulting with the Consultation Parties, is the highest or otherwise
best Qualified Bid at the Auction. Thereafter, the Debtors shall select such Qualified Bid, in consultation with the Consultation Parties, as the overall highest or otherwise best Qualified Bid (such Bid, the Successful Bid,
and the Qualified Bidder submitting such Successful Bid, the Successful Bidder). In making this decision, the Debtors shall consider the Bid Assessment Criteria.
The Auction shall close when the Successful Bidder submits fully executed sale and transaction documents memorializing the terms of the
Successful Bid.
Promptly following the Debtors selection of the Successful Bid and the conclusion of the Auction, the Debtors shall
announce the Successful Bid and Successful Bidder and shall file with the Bankruptcy Court notice of the Successful Bid and Successful Bidder.
Unless otherwise required pursuant to the Debtors fiduciary duties, the Debtors shall not consider any Bids submitted after the
conclusion of the Auction.
Return of Good Faith Deposits
The Good Faith Deposits of all Qualified Bidders shall be held in one or more interest-bearing escrow accounts by the Debtors, but shall not
become property of the Debtors estates absent further order of the Bankruptcy Court. The Good Faith Deposit of any Qualified Bidder that is neither the Successful Bidder nor the Backup Bidder shall be returned to such Qualified Bidder not
later than five (5) business days after the Sale Hearing. The Good Faith Deposit of the Backup Bidder, if any, shall be returned to the Backup Bidder on the date that is the earlier of 72 hours after (a) the closing of the transaction with
the Successful Bidder and (b) the Outside Backup Date. Upon the return of the Good Faith Deposits, their respective owners shall receive any and all interest that will have accrued thereon. If the Successful Bidder timely closes the winning
transaction, its Good Faith Deposit shall be credited towards the purchase price.
The Consultation Parties
The Debtors shall consult with the Supporting Noteholders and any official committee appointed in the Debtors chapter 11 cases and each
of their respective advisors (collectively, the
12
Consultation Parties and each, a Consultation Party) as explicitly provided for in the Bidding Procedures; provided, however, that the Debtors
shall not be required to consult with any Consultation Party (and its advisors) that is a Qualified Bidder unless such Qualified Bidder does not submit a bid by the Bid Deadline, at which time, such Supporting Noteholder shall become a Consultation
Party; provided, further that if any individual Supporting Noteholder becomes a Qualified Bidder, the consultation rights of any Supporting Noteholder that has not become a Qualified Bidder shall not be affected.
Reservation of Rights of the Debtors
Except as otherwise provided in the Acquisition Agreement, the Bidding Procedures or the Bidding Procedures Order, the Debtors further reserve
the right as they may reasonably determine to be in the best interest of their estates, in consultation with the Consultation Parties to: (a) determine which bidders are Qualified Bidders; (b) determine which Bids are Qualified Bids;
(c) determine whether to enter into a Stalking Horse Agreement; (d) determine which Qualified Bid is the highest or otherwise best proposal and which is the next highest or otherwise best proposal; (e) reject any Bid that is
(1) inadequate or insufficient, (2) not in conformity with the requirements of the Bidding Procedures or the requirements of the Bankruptcy Code or (3) contrary to the best interests of the Debtors and their estates; (e) waive
terms and conditions set forth herein with respect to all potential bidders; (f) impose additional terms and conditions with respect to all potential bidders; (g) extend the deadlines set forth herein; (h) continue or cancel the
Auction and/or Sale Hearing in open court without further notice; and (i) modify the Bidding Procedures and implement additional procedural rules that the Debtors determine, in their business judgment, will better promote the goals of the
bidding process and discharge the Debtors fiduciary duties and are not inconsistent with any Bankruptcy Court order.
13
EXHIBIT B
MINIMUM NET REVENUE
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|
|
|
|
Calendar Month |
|
Minimum Net Revenue (USD) |
|
November 2014 |
|
$ |
14.6 million |
|
December 2014 |
|
$ |
17.6 million |
|
January 2015 |
|
$ |
18.6 million |
|
February 2015 |
|
$ |
17.1 million |
|
March 2015 |
|
$ |
18.6 million |
|
April 2015 |
|
$ |
21.3 million |
|
May 2015 |
|
$ |
17.9 million |
|
June 2015 |
|
$ |
21.2 million |
|
July 2015 |
|
$ |
21.2 million |
|
August 2015 |
|
$ |
19.5 million |
|
September 2015 |
|
$ |
15.1 million |
|
October 2015 |
|
$ |
24.3 million |
|
November 2015 |
|
$ |
19.0 million |
|
December 2015 |
|
$ |
19.0 million |
|
EXHIBIT C
FORM OF CONFIDENTIALITY AGREEMENT
(see attached)
CONFIDENTIALITY AGREEMENT
This Confidentiality Agreement (this Agreement), dated [], is made by
and between [], a [] (the Holder), and Dendreon Corporation, a Delaware corporation (the Company).
Background
The Holder
and the Company are parties to a Plan Support Agreement, dated as of November 9, 2014 (the PSA), with certain other holders of the Companys 2016 Notes issued under the First Supplemental Indenture, dated January 20,
2011, to the Base Indenture, dated March 16, 2007, with The Bank of New York Mellon Trust Company, N.A., which PSA provides for a Restructuring (as defined in the PSA) and related Competitive Process (as defined in the PSA) (collectively, the
Proposed Restructuring). In connection with the Holders evaluation of, and discussions with the Company regarding, the Proposed Restructuring (the Purpose), the Holder may receive from or on behalf of the
Company information regarding, among other things, the Companys finances, financial projections, plans regarding debt restructuring, manufacturing, product development, and product acquisitions and dispositions, and other strategic plans and
programs of the Company, together with information concerning the Competitive Process (all such information provided by or on behalf of the Company, together with all analyses, notes, data, compilations, summaries, forecasts, reports or other
documents and materials (whether in written or oral form, electronically stored or otherwise) prepared by the Holder or its Representatives in connection with the Purpose that contain, reflect, are based upon or generated from, in whole or in part,
any such information, is hereinafter referred to as Evaluation Material). This Agreement is entered into for the purpose of (i) protecting the Evaluation Material against improper use and disclosure, (ii) requiring the
Holder to take or abstain from taking certain actions in accordance herewith and (iii) providing for the public disclosure of Evaluation Material by a date certain so that the Holder is no longer in possession of material and non-public
information or otherwise bound by this Agreement with respect to such material and non-public information.
Statement of Agreement
The parties agree as follows:
1.
Disclosure of Evaluation Material. The Holder shall (a) not disclose (other than to its Representatives who the Holder determines in good faith should know such Evaluation Material for the Purpose) or otherwise use Evaluation Material
except for the Purpose and (b) take such actions as may be reasonably necessary to protect Evaluation Material against any unpermitted use or disclosure. The Holder shall require its Representatives (as defined below) receiving Evaluation
Material to observe the restrictions on use and disclosure set forth herein, and shall be responsible for any breach of the terms and conditions of this Agreement by such
Representatives. For purposes of this Agreement, Representatives shall mean with respect to any person or entity, the directors, officers, partners, trustees, employees,
agents, representatives, consultants, accountants, financial advisors, experts, persons or entities affiliated with any such person or entity, and legal counsel and other professional advisors to such person or entity.
2. Information not Subject to Restriction. The restrictions set forth in Section 1 above shall not apply to information that (a) is or
becomes generally available to the public other than as a direct or indirect result of a breach of this Agreement by the Holder or its Representatives, (b) is already known to the Holder at the time of disclosure by the Company (other than
information received by the Holder or its Representatives from or on behalf of the Company that remains confidential pursuant to that certain Confidentiality Agreement, dated as of [], 2014, by
and between the Holder and the Company following the disclosure date thereunder as a result of such information not being MNPI (as defined below)), (c) is received by the Holder on a non-confidential basis from a source that the Holder believes
is entitled to disclose it on a non-confidential basis, or (d) is developed by the Holder without the use of any Evaluation Material.
3. Legally
Required Disclosure. If the Holder or any of its Representatives is legally obligated by law, regulation, subpoena, civil investigative demand, the rules of any regulatory authority, or other compulsory process to disclose any of the Evaluation
Material, the Holder shall, as promptly as reasonably practicable and except as prohibited by applicable law, rule or regulation, provide the Company with written notice of any such obligation, reasonably cooperate (at the Companys expense)
with the Companys efforts to seek a protective order or other remedy to prevent or limit disclosure, and disclose only such Evaluation Material as the Holder or its Representatives, as applicable, is legally obligated to disclose based on the
advice of its legal counsel (and any disclosure made in reliance on such advice shall not constitute a violation of this Agreement). Notwithstanding the foregoing, the Holder may disclose Evaluation Material, without any notice or compliance with
the other terms in this Section 3, to a regulatory or self-regulatory authority with jurisdiction over its operations generally in the course of such authoritys routine examination or request, so long as the request for information
by such authority does not reference the Company or this Agreement.
4. Return of Evaluation Material. At any time upon the written request of the
Company, the Holder shall promptly return to the Company or, at the Holders election, destroy all Evaluation Material possessed by the Holder or its Representatives, without retaining any copies, excerpts, analyses or reproductions thereof
that contain or disclose Evaluation Material; provided, that the Holder may retain Evaluation Material pursuant to electronic back-up files created in the ordinary course of business or in accordance with its customary regulatory compliance
or bona fide records retention policies and procedures, and the Holders outside counsel may retain one copy of any Evaluation Material. Notwithstanding the return, destruction or retention of any Evaluation Material, the Holder and its
Representatives will continue to be bound by their obligations of confidentiality and other obligations under this Agreement with respect to the Evaluation Material.
2
5. No Rights in Evaluation Material. Neither the Company nor any of its affiliates or subsidiaries has
granted to the Holder any license, copyright or similar right or privilege with respect to any Evaluation Material.
6. [RESERVED]
7. Securities Laws. The Holder hereby acknowledges that it is aware that the United States securities laws prohibit any person or entity that has
received from an issuer material, non-public information pursuant to a confidentiality agreement like this Agreement (including the Holders Representatives) from purchasing or selling securities (including swaps or derivatives) of such issuer
or from communicating such information to any other person or other entity under circumstances in which it is reasonably foreseeable that such person or entity is likely to purchase or sell such securities.
8. Term. The obligations set forth in this Agreement shall continue until the first anniversary of the date of this Agreement, except that the
obligations set forth in this Agreement in respect of any MNPI received from the Company or its Representatives shall terminate at such time on the Disclosure Date as set forth in Section 9. The right to bring any action to enforce this
Agreement, or the breach hereof, shall survive until expiration of the applicable statute of limitations.
9. Evaluation Material Summary;
Disclosure.
(a) On the third Business Day prior to the Disclosure Date, the Company will promptly (x) provide the Holder or its legal advisors
with a summary of any Evaluation Material that the Company reasonably believes will constitute material non-public information as of the anticipated Disclosure Date and (y) advise the Holder or its legal or financial advisors whether or not the
Company believes that any particular Evaluation Material will remain confidential or otherwise constitute material non-public information as of the anticipated Disclosure Date.
(b) On or before the date (the Disclosure Date) that is (A) if one Qualified Bid or no Qualified Bids are received by the Company, the
date on or following the Bid Deadline on which the Company publicly discloses whether one Qualified Bid or no Qualified Bids were received, and (B) if more than one Qualified Bid is received, the date on which the Auction is concluded, the
Company, after 5:00 p.m. (Eastern Time) on such Disclosure Date and before 7:00 a.m. (Eastern Time) the following day, shall make public disclosure, pursuant to Rule 101 of Regulation FD, of both the event giving rise to the Disclosure Date (which,
for the avoidance of doubt, shall include the event set forth in clause (A) or (B) above, as applicable) and any material non-public information regarding the Company, its business or its securities (MNPI); it being
3
hereby acknowledged and agreed that the public disclosure required by this paragraph is intended to ensure that neither the Holder nor any of its Representatives shall, from and after the
Disclosure Date, possess any MNPI received from the Company or any of its Representatives or be restricted from trading any securities of the Company as a result of such possession. At least one (1) hour prior to the Companys public
disclosure required by the immediately preceding sentence, the Company shall certify to the Holder, in writing, that as of such date (and giving effect to any public disclosure made or to be made as required by the immediately preceding sentence),
neither the Holder nor any of its Representatives is in possession of any MNPI received from the Company or any of its Representatives, and in the absence of such certification, the Holder and its Representatives shall be entitled to presume that to
be the case. Capitalized terms used in this Section 9(b) and not otherwise defined in this Agreement have the respective meanings set forth in the Bidding Procedures Order entered by the United States Bankruptcy Court for the District of
Delaware under Case No. 14-[], as the same may be amended from time to time.
(c) In the event
of any breach of this Section 9 by the Company or any of its Representatives, in addition to any other remedy provided herein, the Holder shall have the right to make public disclosure in the form of a press release, public advertisement
or otherwise, of any MNPI received from the Company or any of its Representatives without the prior approval by the Company or any of its Representatives, and neither the Holder nor any of its Representatives shall have any liability to the Company
or any of its Representatives or stockholders for any such disclosure. In the event of any disagreement between the Company and the Holder as to whether any Evaluation Material constitutes MNPI, the Company and the Holder shall work in good
faith to address such disagreement and to ensure that public disclosure of any information that is or is reasonably expected to be material non-public information under federal securities laws is made as required under this paragraph.
10. Equitable Relief. The Holder recognizes and acknowledges the competitive value and confidential nature of the Evaluation Material, that irreparable
damage may result to the Company if information contained therein or derived therefrom is used or disclosed in violation of this Agreement, and that money damages may not be a sufficient remedy for any unauthorized use or disclosure of Evaluation
Material by the Holder or its Representatives. The Holder agrees that, in addition to any other rights and remedies available to the Company, the Company may seek equitable relief as a remedy for any such breach without the need to post a bond
therefor.
11. Miscellaneous.
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(a) |
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, applicable to contracts made and to be performed entirely within such State without regard to
the conflict of laws principles thereof. |
4
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(b) |
No Assignment. This Agreement may not be assigned in whole or in part by either party without the prior written consent of the other party; provided that no such consent shall be required, and this Agreement may
be assigned by a party, in the case of a sale by such party of all or substantially all of its business or assets, whether by merger, sale of assets or otherwise. |
|
(c) |
Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. |
|
(d) |
Entire Agreement; Waiver. This Agreement contains the entire agreement between the parties concerning the provision and protection of Evaluation Material received from or on behalf of the Company hereunder. No
provision of this Agreement may be waived or amended except by a writing signed by the parties. No failure or delay by a party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or future exercise thereof or the exercise of any other right, power or privilege hereunder. |
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(e) |
Severable Provisions. The provisions of this Agreement are severable. If any provision of this Agreement is determined by a tribunal of competent jurisdiction to be void or unenforceable in any instance, the
remaining provisions shall remain in force, and such void or unenforceable provisions shall remain effective in all circumstances as to which it was not determined to be void or unenforceable. |
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(f) |
Notice. All notices and other communications hereunder shall be in writing. Any notice or other communication hereunder shall be deemed duly delivered one business day after it is sent for next business day
delivery via a reputable nationwide courier service, in each case to the intended recipient as set forth below: |
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|
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If to Company: |
|
Dendreon Corporation |
|
|
1301 2nd Ave. |
|
|
Seattle, Washington 98101 |
|
|
Attention: Robert Crotty |
Copy to: |
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Skadden, Arps, Slate, Meagher & Flom LLP |
|
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500 Boylston Street |
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Boston, MA 02116 |
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Attention: Graham Robinson |
If to the Holder: |
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[] |
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[] |
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[] |
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[] |
5
Either party may give any notice or other communication hereunder using any other means (including personal
delivery, postal delivery, or electronic mail), but no such notice or other communication shall be deemed duly given unless and until the party for whom it is intended actually receives it. Any party may change the address to which notices and other
communications hereunder are to be delivered by giving the other party notice in the manner herein set forth.
|
(h) |
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall constitute one agreement. Signatures transmitted electronically shall
be as effective as if delivered in person. |
|
(i) |
Section Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement. |
[Signatures are on the following page.]
6
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized
representatives as of the date first above written.
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DENDREON CORPORATION |
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By: |
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Name: |
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Title: |
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[HOLDER] |
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By: |
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Name: |
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Title: |
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7
EXHIBIT D
FORM OF JOINDER
The
undersigned transferee (Transferee) hereby acknowledges that it has read and understands the Plan Support Agreement, dated as of November 9, 2014 (the Agreement), by and among (i) Dendreon Corporation
(the Company) and its subsidiaries signatory hereto, and (ii) [Deerfield Management Company, L.P. or other Transferors Name] (Transferor) and any other holders of the Companys 2016 Notes
issued under the First Supplemental Indenture, dated January 20, 2011, to the Base Indenture, dated March 16, 2007, with The Bank of New York Mellon Trust Company, N.A., as trustee, that are parties to the Agreement, and agrees that it
shall be (A) bound by the terms and conditions thereof to the extent Transferor was thereby bound and (B) deemed a Supporting Noteholder under the terms of the Agreement.
Date Executed: , 201
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TRANSFEREE |
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Name of Institution: |
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By: |
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Name: |
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Its: |
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Telephone: |
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Facsimile: |
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Prepetition Noteholder |
Claims Held by Transferee: $ |
Exhibit 10.3
KEY EMPLOYEE RETENTION INCENTIVE AGREEMENT
This Key Employee Retention Incentive Agreement (this Agreement) is made and entered into effective as of November 4,
2014, 2014 (the Effective Date), between Dendreon Corporation (the Company), and Greg Cox (Employee).
RECITALS
A. Employee
occupies a key position with the Company. In order to ensure the continued effective conduct of the Companys business, the Company will require the continuous services of Employee as the Company explores alternatives for maximizing the
Companys value.
B. Employee has provided, and is expected to continue to provide, essential and critical services necessary for the
Company to maintain and preserve its value and that the loss of Employee would adversely impact the Companys ability to execute on intended strategic alternatives.
C. The Company desires to offer Employee a retention incentive to encourage Employee to remain with Dendreon throughout the transition
process.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and with reference to the above
recitals, the parties hereby agree as follows:
1. Definitions. For purposes of this Agreement:
(a) Board shall mean the Companys Board of Directors.
(b) Cause shall exist where, in the Companys sole reasonable discretion, the Company determines that
(i) Employee has been insubordinate or refused or failed to carry out the instructions of the Company or the Board relating to the Companys business and strategic plans for the Company; (ii) Employee has engaged in misconduct or
negligence in performing Employees duties and responsibilities; (iii) Employee has engaged in conduct which is dishonest, criminal, fraudulent, or otherwise involves moral turpitude, or which is materially injurious to the Company; and/or
(iv) Employee has engaged in activity prohibited by any other agreement between Employee and the Company. For the avoidance of doubt, this definition of Cause shall apply only to this Agreement and shall have no effect on any other agreement,
plan or policy of the Company that may apply to the Employee and the definition of cause contained in such agreement, plan or policy shall control.
(c) Disability shall have the meaning as provided under Section 409A.
(d) Retention Incentive shall mean a cash award as described in Section 2 hereof.
(e) Net Retention Incentive shall mean the Retention Incentive after reduction for applicable withholding taxes and other
deductions.
(f) Repayment Trigger has the meaning specified in Section 2(b).
(g) Section 409A has the meaning specified in Section 10.
(h) Transaction shall mean the first to occur of the following: (i) a transaction or series of transactions pursuant
to which any Person acquires, directly or indirectly, securities of the Company (not including the securities beneficially owned by such Person or any securities acquired directly from the Company or any affiliate thereof) representing 50% or more
of the combined voting power of the Companys then outstanding securities; (ii) a merger, amalgamation or consolidation of the Company with any other corporation, other than a merger, amalgamation or consolidation which results in the
voting securities of the Company outstanding immediately prior to such merger, amalgamation or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent
thereof) at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger, amalgamation or consolidation; (iii) the sale or disposition by the
Company of all or substantially all of the Companys assets (whether or not pursuant to Chapter 11 of Title 11 of the United States Code), other than a sale or disposition by the Company of all or substantially all of the Companys assets
to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by shareholders of the Company following the completion of such transaction in substantially the same proportions as their
ownership of the Company immediately prior to such sale; or (iv) a restructuring, reorganization (whether or not pursuant to Chapter 11 of Title 11 of the United States Code) and/or recapitalization of all or substantially all of the
Companys outstanding indebtedness (including bank debt, bond debt, and other on and off balance sheet indebtedness), trade claims, leases (both on and off balance sheet) or other liabilities. For purposes of this Section 1(d),
Person shall have the meaning given in Section 3(a)(9) of the Exchange Act of 1934, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any subsidiary
thereof, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary thereof, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or
(iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of shares of the Company.
2. Retention Incentive.
(a) Payment of the Retention Incentive. The Company shall pay to Employee a Retention Incentive, in a lump sum payment, in an
amount equal to one hundred and thirty-five thousand dollars ($135,000.00) no later than the first regular scheduled payroll date following the Effective Date.
(b) Repayment of the Retention Incentive. Employee will be required to repay to the Company the Net Retention Incentive, to the
extent previously paid to Employee in accordance with Section 2(a), in the event Employees employment with the Company terminates for any reason prior to a Transaction in which case Employee shall make such repayment no later than thirty
(30) days following Employees termination of employment (the Repayment Trigger); provided, however, there shall be no Repayment Trigger for a termination by the Company without Cause or due to the
Employees death or Disability. If the Repayment Trigger occurs in 2015 (except in the case of a termination of employment by the Company for Cause), the Net Retention Incentive to be repaid shall be reduced by the amount of taxes paid by
Employee in respect of the Retention Incentive, if any, that Employee is unable to recover plus any additional amount required to put Employee in the same after-tax position as if the Retention Incentive had not been paid, provided that Employee
submits documentation in a form reasonably acceptable to the Company supporting that Employee is unable to recover such taxes.
3. Withholding. The Retention Incentive payable to Employee shall be reported as income on
the Employees Form W-2 for the 2014 fiscal year and shall be subject to applicable taxes and withholding.
4. Effect on Severance
and Other Benefits. This Agreement shall not affect Employees eligibility or entitlement to receive any benefits payable to Employee under any severance, change of control or similar plan, policy or agreement with the Company.
5. Other Rights and Agreements. This Agreement does not create any employment rights not specifically set forth herein with respect to
Employee. An Employees employment remains at-will and can be terminated by the Company at any time and for any reason, with or without cause. This Agreement contains the entire understanding of the Company and Employee with respect to the
subject matter hereof.
6. Confidentiality. Employee agrees that the matters described in this Agreement are highly confidential.
Accordingly, except as required by applicable law, Employee agrees and covenants that he will not disclose, reveal, publish, disseminate, or discuss, directly or indirectly, to or with any other person or entity the terms of this Agreement other
than his immediate family, his/her lawyer and his/her tax advisor and that any such disclosure, revelation, publication, dissemination or discussion shall result in the immediate forfeiture of the entire Retention Incentive.
7. Amendment. This Agreement may be amended or revised only by written agreement signed by an authorized officer of the Company and
Employee.
8. Binding Effect. This Agreement shall be binding on Employee, his/her executor, administrator and heirs, but may not
be assigned by him/her. This Agreement may be transferred or assigned by the Company and shall be binding on the transferee or assignee. This Agreement shall automatically be transferred or assigned to and be binding upon any successor in interest
to the Company, whether by merger, consolidation, sale of stock, sale of assets or otherwise.
9. Applicable Law. This Agreement
shall be construed and enforced in accordance with the laws of the state of Delaware, without giving effect to the principles of conflict of laws thereof.
10. Section 409A. The Company intends that the Retention Incentive is not compensation paid under a nonqualified deferred
compensation plan within the meaning of section 409A of the Internal Revenue Code of 1986, as amended, (Section 409A) , and this Agreement shall be interpreted, construed and administered in a manner that reflects this
intention.
[Signature page follows]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
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DENDREON CORPORATION |
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By: |
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/s/ W. Thomas Amick |
Name: |
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W. Thomas Amick |
Title: |
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President and Chief Executive Officer |
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EMPLOYEE |
|
/s/ Greg Cox |
Greg Cox |
Exhibit 10.4
2014 ANNUAL BONUS PROGRAM AGREEMENT
This Annual Bonus Program Agreement (this Agreement) is made and entered into effective as of November 4, 2014 (the
Effective Date), between Dendreon Corporation (the Company), and Greg Cox (Employee).
RECITALS
A. As a Vice
President or Executive Vice President, employee occupies a key position with the Company. In order to ensure the continued effective conduct of the Companys business, the Company will require the continuous services of Employee as the Company
explores alternatives for maximizing the Companys value.
B. Employee has provided, and is expected to continue to provide,
essential and critical services necessary for the Company to maintain and preserve its value and that the loss of Employee would adversely impact the Companys ability to execute on intended strategic alternatives.
C. The Company desires to offer Employee an advance on a portion of the 2014 Dendreon Annual Bonus to incent Employee to remain with the
Company throughout the transition process.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and
with reference to the above recitals, the parties hereby agree as follows:
1. Definitions. For purposes of this Agreement:
(a) 2014 ABP shall have the meaning specified in Section 2(a).
(b) Annual Bonus shall have the meaning specified in Section 2(a).
(c) Board shall mean the Companys Board of Directors.
(d) Cause shall exist where, in the Companys sole reasonable discretion, the Company determines that
(i) Employee has been insubordinate or refused or failed to carry out the instructions of the Company or the Board relating to the Companys business and strategic plans for the Company; (ii) Employee has engaged in misconduct or
negligence in performing Employees duties and responsibilities; (iii) Employee has engaged in conduct which is dishonest, criminal, fraudulent, or otherwise involves moral turpitude, or which is materially injurious to the Company; and/or
(iv) Employee has engaged in activity prohibited by any other agreement between Employee and the Company. For the avoidance of doubt, this definition of Cause shall apply only to this Agreement and shall have no effect on any other agreement,
plan or policy of the Company that may apply to Employee and the definition of cause contained in such agreement, plan or policy shall control.
(e) Disability shall have the meaning as provided under Section 409A.
(f) Net Bonus shall mean the Annual Bonus prepayment after reduction for
applicable withholding taxes and other deductions.
(g) Repayment Trigger shall have the meaning specified in
Section 2(b).
(h) Section 409A shall have the meaning specified in Section 10.
(i) Transaction shall mean the first occur of the following: (i) a transaction or series of transactions pursuant to
which any Person acquires, directly or indirectly, securities of the Company (not including the securities beneficially owned by such Person or any securities acquired directly from the Company or any affiliate thereof) representing 50% or
more of the combined voting power of the Companys then outstanding securities; (ii) a merger, amalgamation or consolidation of the Company with any other corporation, other than a merger, amalgamation or consolidation which results
in the voting securities of the Company outstanding immediately prior to such merger, amalgamation or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any
parent thereof) at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger, amalgamation or consolidation; (iii) the sale or disposition by
the Company of all or substantially all of the Companys assets (whether or not pursuant to Chapter 11 of Title 11 of the United States Code), other than a sale or disposition by the Company of all or substantially all of
the Companys assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by shareholders of the Company following the completion of such transaction in substantially the
same proportions as their ownership of the Company immediately prior to such sale; or (iv) a restructuring, reorganization (whether or not pursuant to Chapter 11 of Title 11 of the United States Code) and/or recapitalization of all or
substantially all of the Companys outstanding indebtedness (including bank debt, bond debt, and other on and off balance sheet indebtedness), trade claims, leases (both on and off balance sheet) or other liabilities. For purposes of this
Section 1(i), Person shall have the meaning given in Section 3(a)(9) of the Exchange Act of 1934, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the
Company or any subsidiary thereof, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary thereof, (iii) an underwriter temporarily holding securities pursuant to an offering of
such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of shares of the Company.
2. Annual Bonus Prepayment.
(a) Prepayment of a portion of the 2014 Annual Bonus. Employee is currently a participant in the Companys 2014 Annual
Bonus Program (the 2014 ABP). The Company shall prepay to Employee, in a lump sum payment, $67,500.03, which is equal to 30% of Employees target bonus pursuant to the 2014 ABP no later than the first regular scheduled
payroll date following the Effective Date (the Annual Bonus). The remainder of Employees annual bonus under the 2014 ABP shall be paid following the close of the 2014 fiscal year in the ordinary course of business consistent
with past practice and terms of the 2014 Dendreon Corporation Annual Bonus Program, based on actual performance of the Company and Employees continued employment, less the Annual Bonus prepayment.
(b) Repayment of the Annual Bonus Prepayment. Employee will be required to repay
to the Company the Net Bonus, to the extent previously paid to Employee in accordance with Section 2(a), in the event Employees employment with the Company terminates for any reason prior to the earlier of (i) a Transaction or
(ii) February 28, 2015, in which case Employee shall make such repayment no later than thirty (30) days following Employees termination of employment (the Repayment Trigger); provided, however,
there shall be no Repayment Trigger for a termination by the Company without Cause or due to Employees death or Disability. If the Repayment Trigger occurs in 2015 (except in the case of a termination of employment by the Company for Cause),
the Net Bonus to be repaid shall be reduced by the amount of taxes paid by Employee in respect of the Annual Bonus prepayment, if any, that Employee is unable to recover plus any additional amount required to put Employee in the same after-tax
position as if the Annual Bonus pre-payment had not been paid, provided that Employee submits documentation in a form reasonably acceptable to the Company supporting that Employee is unable to recover such taxes.
3. Withholding. The Annual Bonus prepayment payable to Employee shall be reported as income on Employees Form W-2 for the 2014 fiscal year and shall be subject to 401(k) deduction, if Employee is enrolled and maximum has not been reached, applicable taxes and withholding.
4. Effect on Severance and Other Benefits. This Agreement shall not affect Employees eligibility or entitlement to receive any
benefits payable to Employee under any severance, change of control or similar plan, policy or agreement with the Company.
5. Other
Rights and Agreements. This Agreement does not create any employment rights not specifically set forth herein with respect to Employee. An Employees employment remains at-will and can be terminated by the Company at any time and for any
reason, with or without cause. This Agreement contains the entire understanding of the Company and Employee with respect to the subject matter hereof.
6. Confidentiality. Except as required by applicable law, Employee agrees and covenants that he will not disclose, reveal, publish,
disseminate, or discuss, directly or indirectly, to or with any other person or entity the terms of this Agreement other than his/her immediate family, his/her lawyer and his/her tax advisor and that any such disclosure, revelation, publication,
dissemination or discussion shall result in the immediate forfeiture of the entire Annual Bonus prepayment.
7. Amendment. This
Agreement may be amended or revised only by written agreement signed by an authorized officer of the Company and Employee.
8. Binding
Effect. This Agreement shall be binding on Employee, his/her executor, administrator and heirs, but may not be assigned by him/her. This Agreement may be transferred or assigned by the Company and shall be binding on the transferee or assignee.
This Agreement shall automatically be transferred or assigned to and be binding upon any successor in interest to the Company, whether by merger, consolidation, sale of stock, sale of assets or otherwise.
9. Applicable Law. This Agreement shall be construed and enforced in accordance with the
laws of the state of Delaware, without giving effect to the principles of conflict of laws thereof.
10. Section 409A. The
Company intends that the Annual Bonus is not compensation paid under a nonqualified deferred compensation plan within the meaning of section 409A of the Internal Revenue Code of 1986, as amended, (Section 409A), and
this Agreement shall be interpreted, construed and administered in a manner that reflects this intention.
[Signature page follows]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
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DENDREON CORPORATION |
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|
By: |
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/s/ W. Thomas Amick |
Name: |
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W. Thomas Amick |
Title: |
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President and Chief Executive Officer |
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EMPLOYEE |
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/s/ Greg Cox |
Greg Cox |
Exhibit 99.1
FOR IMMEDIATE RELEASE
DENDREON REACHES AGREEMENTS ON TERMS OF FINANCIAL RESTRUCTURING
Operations to Continue Without Interruption; PROVENGE® Remains Commercially Available
Commences Voluntary Chapter 11 Proceedings to Implement Restructuring Agreements
SEATTLE November 10, 2014 Dendreon Corporation (NASDAQ: DNDN) (Dendreon or the Company) today announced that
it has reached agreements on the terms of a financial restructuring with certain holders (the Senior Noteholders) of the Companys 2.875% Convertible Senior Notes due 2016 (the 2016 Notes) representing approximately 84%
of the $620 million aggregate principal amount of the 2016 Notes. Under the terms of the agreements, the financial restructuring may take the form of a stand-alone recapitalization or a sale of the Company or its assets. The transactions under the
agreements will enable continued delivery of PROVENGE® (sipuleucel-T) without disruption or impact to access for providers and appropriate patients in need of this revolutionary personalized immunotherapy treatment.
To implement the financial restructuring contemplated under the agreements with the relevant Senior Noteholders, Dendreon and its U.S. subsidiaries filed
voluntary petitions under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (the Court) on November 10, 2014.
Whether the restructuring takes the form of a stand-alone recapitalization or a sale of the Company or its assets, we are confident that this process
will allow PROVENGE to remain commercially available to the patients and providers who have come to rely on this revolutionary personalized cancer immunotherapy, said W. Thomas Amick, president and chief executive officer of Dendreon. We
are pleased to have the support of a substantial majority of our Senior Noteholders through this restructuring and sale process. We thank our employees for their continued hard work and dedication and for their commitment to help deliver PROVENGE to
patients who are in need of immunotherapy.
Under the terms of the restructuring support agreements, the Senior Noteholders will support a plan of
reorganization to convert all 2016 Notes to common equity of the reorganized Dendreon. The agreements further provide for Dendreon to conduct a court-supervised sale process, pursuant to Section 363 of the Bankruptcy Code or through a plan of
reorganization, for all or substantially all of its assets to a party that would continue producing and providing PROVENGE. Qualified bids under the terms of the proposed bidding procedures will have to meet certain criteria and provide value of not
less than $275 million. If more than one qualified bid is received, an auction will be held to determine the successful bidder with the highest or otherwise best bid, following which the Company will seek to consummate that transaction. If no
qualified bids are received, Dendreon will proceed to confirmation of the stand-alone plan.
Dendreon has significant liquidity to support all of its
operations during the restructuring process, with approximately $100 million of cash, cash equivalents and investments on hand as of November 7, 2014, and does not anticipate the need to raise any incremental financing in connection with the
restructuring process.
During the restructuring process, the Company will continue to operate in the ordinary course, including
continuing to service distributors and wholesalers to ensure timely fulfillment of orders and shipments and to meet other obligations to physicians and patients who depend on PROVENGE. In addition, Dendreon has requested Court approval of the
proposed bidding procedures and a series of customary motions allowing it to honor employee obligations, including wages, salaries and health benefits without interruption, as well as to continue customer programs and patient assistance programs.
The Company expects to file an 8-K with the Securities and Exchange Commission that will include the restructuring support agreements. Court documents
and additional information are available through Dendreons claims agent, Prime Clerk, at https://cases.primeclerk.com/dendreon or 844-794-3479.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as the Companys legal advisor, AlixPartners is serving as its financial advisor and Lazard
is serving as its investment bank.
About Dendreon
Dendreon Corporation is a biotechnology company whose mission is to target cancer and transform lives through the discovery, development, commercialization and
manufacturing of novel therapeutics. The Company applies its expertise in antigen identification, engineering and cell processing to produce active cellular immunotherapy (ACI) product candidates designed to stimulate an immune response in a variety
of tumor types. Dendreons first product, PROVENGE® (sipuleucel-T), was approved by the U.S. Food and Drug Administration (FDA) in April 2010. Dendreon is exploring the application of
additional ACI product candidates and small molecules for the potential treatment of a variety of cancers. The Company is headquartered in Seattle, Washington, and is traded on the NASDAQ Global Market under the symbol DNDN. For more information
about the Company and its programs, visit http://www.dendreon.com/.
Certain information in this press release may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that are not statements of historical fact, including statements regarding the potential of the proposed stand-alone
restructuring, asset sale or plan sale, the expectation that the Chapter 11 filings will enable the Company to sell its assets or itself in an orderly manner and maximize value for the Companys stakeholders, the necessity of Court approvals to
conduct and complete the proposed stand-alone restructuring, asset sale or plan sale, the ability of the Company to continue to deliver PROVENGE without interruption, the ability of the Company to continue operating in the ordinary course during the
bankruptcy and sale process, the expectation that the Company will not need to raise any incremental financing to effectuate its restructuring process and other statements regarding the Companys strategy, future operations, future financial
positions, future performance, commercialization of PROVENGE, prospects, and plans and objectives of management should be considered forward-looking statements. Words such as anticipate, estimate, expect,
project, intend, plan, believe, may, predict, will, would, could, should, target and similar expressions are often
used to identify forward-looking statements. Actual results or events could differ materially from those indicated in forward-looking statements as a result of risks and uncertainties, including, among others, the potential adverse impact of the
Chapter 11 filings on the Companys liquidity or results of operations, changes in the Companys ability to meet financial obligations during the Chapter 11 process or to maintain contracts that are critical to the Companys
operations, the outcome or timing of the Chapter 11 process and the proposed stand-alone restructuring, asset sale or plan sale (including the occurrence or likelihood of qualified bids or an auction), the effect of the Chapter 11 filings or
proposed stand-alone restructuring, asset sale or plan sale on the Companys relationships with third parties, regulatory authorities and employees, proceedings that may be brought by third parties in connection with the Chapter 11 process or
the proposed stand-alone restructuring, asset sale or plan sale, Court approval or other conditions or termination events in connection with the proposed stand-alone restructuring, asset sale or plan sale, and
the timing or amount of any distributions to the Companys stakeholders. For a discussion of some of the additional risks and important factors that Dendreon believes could cause actual
results or events to differ from the forward-looking statements that it makes, see the sections entitled Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations in the
Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2014. In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor
that may cause its actual results or events to differ from those contained in any forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. Any forward-looking
statements speak only as of the date of this press release. The Company undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.
CONTACT:
Dendreon Corporation
Corporate Communications
April Falcone
(206) 829-1622
media@dendreon.com
Andy Brimmer / Aaron Palash
Joele Frank, Wilkinson Brimmer
Katcher
212-355-4449
|
In October 2014, the Company completed a reforecasting of its internal financial
projections The
revised
projections
include
a
Baseline
case
with
layers
for
the
impact
of
E.U.
and
Automation
Projections: Certain Key Assumptions
($ in millions)
CERTAIN KEY ASSUMPTIONS
AUTOMATION
Automation plan (Phase I only) requires $7.4 mm investment Q4 2014 through Q4
2015 Phase II automation is defined as the potential opportunity created
by Phase I to implement a new manufacturing model where the Company can
exit one or both of the existing centralized manufacturing facilities in
favor of smaller, satellite facilities located strategically in high volume
locations
Phase II is in the concept
stage and substantial uncertainty exists as to whether it is achievable or will
be pursued by the Company; financial analyses have not been prepared
with respect to Phase II Expected to generate ~$7 mm annual COGS savings
2016-2018 Base Case projections assume automation initiative not
pursued beginning Q4 2014 E.U.
EBITDA impact of negative ~$1 mm per year, 2015-2018
Base Case projections assume E.U. effort not pursued beginning Q4 2014
Exhibit 99.2
Phase I automation is defined as the development, the regulatory
submission/approval and the implementation/transition of the automated
manufacturing process in the Atlanta and Seal Beach facilities; see Risk
Factors in the Companys Form 10-Q for the quarter ended September 30, 2014 |
|
Baseline
Projections (Excluding E.U. and Automation)
(a)
($ in millions)
(a)
E.U./Automation initiatives projected to have ~$5.2 million negative impact to
EBITDA in Q4 2014. (b)
Does not include any impact of Federal taxes (i.e., not tax-effected). 2014
includes $30 million insurance proceeds. LONG-TERM FORECAST -
BASELINE 2013A
2014E
2015E
2016E
2017E
2018E
FY
FY
FY
FY
FY
FY
Net Revenue
$283.7
$295.8
$310.4
$328.7
$348.0
$368.5
% Growth
(12.8%)
4.3%
4.9%
5.9%
5.9%
5.9%
Less: Cost of Product Revenue
(166.3)
(146.6)
(145.3)
(134.2)
(134.0)
(133.7)
Gross Profit
$117.3
$149.1
$165.1
$194.5
$214.0
$234.7
% Margin
41.4%
50.4%
53.2%
59.2%
61.5%
63.7%
Less: R&D
(70.8)
(45.9)
(38.9)
(41.7)
(38.6)
(35.6)
Less: SG&A
(232.8)
(155.2)
(147.9)
(148.5)
(150.4)
(152.4)
Operating Income
($196.9)
($60.7)
($21.7)
$0.7
$24.9
$46.7
Plus: D&A
31.4
24.4
22.7
18.7
17.9
17.0
EBITDA
($154.9)
($27.6)
$1.0
$23.0
$42.8
$63.7
% Margin
(54.6%)
(9.3%)
0.3%
7.0%
12.3%
17.3%
Memo:
Capital Expenditures
5.6
2.0
3.0
3.0
3.0
3.0
Unlevered Free Cash Flow
(b)
(188.4)
(33.1)
0.2
(10.8)
40.5
50.3 |
|
Projections: Impact of Automation and E.U.
($ in millions)
LONG-TERM FORECAST -
AUTOMATION IMPACT
2014E
(a)
2015E
2016E
2017E
2018E
Q4
FY
FY
FY
FY
Cost of Product Revenue ((Increase)/Decrease))
-
-
$6.9
$6.9
$6.9
R&D ((Increase)/Decrease))
(2.0)
(5.6)
-
-
-
EBITDA Impact
($2.0)
($5.6)
$6.9
$6.9
$6.9
LONG-TERM FORECAST -
E.U. IMPACT
2014E
(a)
2015E
2016E
2017E
2018E
Q4
FY
FY
FY
FY
EU Provenge Revenue
-
$13.4
$13.8
$13.8
$13.8
Cost of Product Revenue ((Increase)/Decrease))
-
(11.1)
(11.3)
(11.3)
(11.3)
Gross Profit
-
$2.2
$2.5
$2.5
$2.5
R&D ((Increase)/Decrease))
(0.3)
(0.5)
(0.5)
(0.5)
(0.5)
SG&A ((Increase)/Decrease))
(2.9)
(2.7)
(2.7)
(2.7)
(2.7)
EBITDA Impact
($3.2)
($1.0)
($0.8)
($0.8)
($0.8)
(a)
Q4 impact shown as Q1 Q3 spend is embedded in the Baseline forecast.
|
|
Projections: Baseline with E.U. and Automation
($ in millions)
(a)
Does not include any impact of Federal taxes (i.e., not tax-effected). 2014
includes $30 million insurance proceeds. LONG-TERM FORECAST -
BASELINE WITH E.U. AND AUTOMATION IMPACT 2014E
2015E
2016E
2017E
2018E
FY
FY
FY
FY
FY
Net Revenue
$295.8
$323.8
$342.4
$361.8
$382.2
% Growth
4.3%
9.5%
5.8%
5.6%
5.7%
Less: Cost of Product Revenue
(146.6)
(156.4)
(138.6)
(138.4)
(138.1)
Gross Profit
$149.1
$167.3
$203.8
$223.4
$244.1
% Margin
50.4%
51.7%
59.5%
61.8%
63.9%
Less: R&D
(48.2)
(45.0)
(42.3)
(39.2)
(36.1)
Less: SG&A
(158.1)
(150.6)
(151.2)
(153.1)
(155.1)
Operating Income
($65.8)
($28.3)
$6.9
$31.1
$52.9
Plus: D&A
24.4
22.7
18.7
17.9
17.0
EBITDA
($32.7)
($5.6)
$29.2
$49.1
$70.1
% Margin
(11.1%)
(1.7%)
8.5%
13.6%
18.3%
Memo:
Capital Expenditures
2.0
3.0
3.0
3.0
3.0
Unlevered Free Cash Flow
(a)
(34.8)
(7.5)
(5.2)
47.9
57.8 |
|
Preliminary Summary of Tax Attributes
SUMMARY OF TAX ATTRIBUTES
(a)
Federal NOLs
Research Credits
State NOLs
Expiration
Date
NOL
Available
Less: Corvas
NOL Limited
Carryover to
Next Year
Amount
Available
(c)
Amount
Available
(c)
2014
$-
$-
$-
$-
$125,594,672
2015
-
-
-
-
74,360,807
2016
-
-
-
-
135,729,603
2017
-
-
-
-
524,542
2018
13,110,385
(12,293,254)
817,131
340,854
-
2019
17,720,799
(11,783,691)
5,937,108
430,367
38,285
2020
29,758,768
(14,812,354)
14,946,414
379,082
87,658
2021
41,531,738
(21,448,110)
20,083,628
736,995
314,404
2022
49,371,858
(19,181,594)
30,190,264
344,111
6,397,816
2023
48,053,228
(12,946,611)
35,106,617
508,556
12,323,821
2024
73,910,646
-
73,910,646
1,200,055
16,952,495
2025
74,831,142
-
74,831,142
1,606,282
19,707,361
2026
85,549,309
-
85,549,309
2,987,484
13,943,212
2027
102,403,107
-
102,403,107
2,832,666
23,093,319
2028
67,852,236
-
67,852,236
1,406,007
15,864,847
2029
125,475,151
-
125,475,151
1,447,575
3,048,728
2030
344,271,643
-
344,271,643
7,140,910
430,000,781
2031
267,706,320
-
267,706,320
2,747,834
619,469,955
2032
312,709,139
-
312,709,139
1,382,822
742,623,682
2033
211,944,842
-
211,944,842
-
511,809,208
Total
$1,866,200,311
($92,465,614)
$1,773,734,697
$25,491,600
$2,751,885,197
(a)
As of December 31, 2013. The historical information presented above does
not reflect the impact of any restructuring or other transaction involving the Company.
(b)
The 2013 Form 1120 Corporate Tax Return includes the Corvas NOLs and therefore
indicates that $1,866,200,311 NOLs are available. However, §382 would limit 100% of
the use of these NOLs and therefore the Company has reduced them to
$1,733,734,697.
(c)
Full amount available is eligible for carryover.
100% by §382
(b) |
|
Current cash and investments as of November 7, 2014 is approximately $100 million
as compared to a balance of $112 million as of September 30, 2013 due to,
among other items, the payment of certain insurance premiums and restructuring related
expenses. Furthermore, the Company currently forecasts an ending January
2015 and ending March 2015 cash and investments balance of approximately
$100 million and approximately $73 million, respectively. These balances exclude
investments backing certain letters of credit and further reflect receipts from
distributors, payments to employees and suppliers and are pro forma for
restructuring related contingencies and other chapter 11 related exit payments.
Historical and Forecasted Cash Position |