Exhibit 10.2

 

PURCHASE AGREEMENT

 

_______ (acting through its Global Asset Management division), Basel and Zurich,
Switzerland (the “Undersigned”), for itself and on behalf of the beneficial
owners listed on Exhibit A hereto (“Accounts”) for whom the Undersigned holds
contractual and investment authority (each Account, as well as the Undersigned
if it is exchanging Notes (as defined below) hereunder, a “Holder”), enters into
this Purchase Agreement (the “Agreement”) with PDL BioPharma, Inc. (the
“Company”) on February ______, 2014 whereby the Holders will sell (the “Note
Sale”) to the Company the principal amount of the Company’s 2.875% Convertible
Senior Notes due 2015 (the “Notes”) set forth on Exhibit A hereto for a cash
payment from the Company.

 

On and subject to the terms and conditions set forth in this Agreement, the
parties hereto agree as follows:

 

Article I: Purchase of the Notes for Cash

 

At the Closing (as defined herein), the Undersigned hereby agrees to cause the
Holders to sell and deliver to the Company the following Notes, and in exchange
therefor the Company hereby agrees to pay in cash the following amount:

 

 

Principal Amount of Notes to be Sold:

 

$

 

 

 

 

(the “Purchased Notes”)

        Cash Payment for the Purchased Notes:

 

$

 

     

(the “Cash Payment”)

 

The closing of the Note Sale (the “Closing”) shall occur, subject to the
continued accuracy of the representations and warranties and compliance with the
covenants contained herein, on a date (the “Closing Date”) no later than five
business days after the date of this Agreement. At the Closing, (a) each Holder
shall deliver or cause to be delivered to the Company all right, title and
interest in and to its Purchased Notes (and no other consideration) free and
clear of any mortgage, lien, pledge, charge, security interest, encumbrance,
title retention agreement, option, equity or other adverse claim thereto
(collectively, “Liens”), together with any documents of conveyance or transfer
that the Company may deem necessary or desirable to transfer to and confirm in
the Company all right, title and interest in and to the Purchased Notes free and
clear of any Liens, and (b) the Company shall deliver to each Holder the Cash
Payment specified on Exhibit A hereto (or, if there are no Accounts, the Company
shall deliver to the Undersigned, as the sole Holder, the entire Cash Payment
specified above). Simultaneously with or after the Closing, the Company may
issue shares of its stock and/or make additional cash payments to one or more
other holders of outstanding Notes or to other investors.

 

Article II: Covenants, Representations and Warranties of the Holders

 

Each Holder (and, where specified below, the Undersigned) hereby covenants
(solely as to itself) as follows, and makes the following representations and
warranties (solely as to itself), each of which is and shall be true and correct
on the date hereof and at the Closing, to the Company and to RBC Capital
Markets, LLC, and all such covenants, representations and warranties shall
survive the Closing.

 

Section 2.1     Power and Authorization. The Holder is duly organized, validly
existing and in good standing, and has the power, authority and capacity to
execute and deliver this Agreement, to perform its obligations hereunder, and to
consummate the Note Sale contemplated hereby. If the Undersigned is executing
this Agreement on behalf of Accounts, (a) the Undersigned has all requisite
discretionary and contractual authority to enter into this Agreement on behalf
of, and bind, each Account, and (b) Exhibit A hereto is a true, correct and
complete list of (i) the name of each Account, (ii) the principal amount of such
Account’s Purchased Notes, (iii) the portion of the Cash Payment to be paid to
such Account for its Purchased Notes.

 

 
 

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Section 2.2     Valid and Enforceable Agreement; No Violations. This Agreement
has been duly executed and delivered by the Undersigned and the Holder and
constitutes a legal, valid and binding obligation of the Undersigned and the
Holder, enforceable against the Undersigned and the Holder in accordance with
its terms, except that such enforcement may be subject to (a) bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other similar
laws affecting or relating to enforcement of creditors’ rights generally, and
(b) general principles of equity, whether such enforceability is considered in a
proceeding at law or in equity (the “Enforceability Exceptions”). This Agreement
and consummation of the Note Sale will not violate, conflict with or result in a
breach of or default under (i) the Undersigned’s or the Holder’s organizational
documents, (ii) any agreement or instrument to which the Undersigned or the
Holder is a party or by which the Undersigned or the Holder or any of their
respective assets are bound, or (iii) any laws, regulations or governmental or
judicial decrees, injunctions or orders applicable to the Undersigned or the
Holder.

 

Section 2.3     Title to the Purchased Notes. The Holder is the sole legal and
beneficial owner of the Purchased Notes set forth opposite its name on Exhibit A
hereto (or, if there are no Accounts, the Undersigned is the sole legal and
beneficial owner of all of the Purchased Notes). The Holder has good, valid and
marketable title to its Purchased Notes, free and clear of any Liens (other than
pledges or security interests that the Holder may have created in favor of a
prime broker under and in accordance with its prime brokerage agreement with
such broker). The Holder has not, in whole or in part, except as described in
the preceding sentence, (a) assigned, transferred, hypothecated, pledged,
exchanged or otherwise disposed of any of its Purchased Notes or its rights in
its Purchased Notes, or (b) given any person or entity any transfer order, power
of attorney or other authority of any nature whatsoever with respect to its
Purchased Notes. Upon the Holder’s delivery of its Purchased Notes to the
Company pursuant to the Note Sale, such Purchased Notes shall be free and clear
of all Liens created by the Holder.

 

Section 2.4     No Illegal Transactions. Each of the Undersigned and the Holder
has not, directly or indirectly, and no person acting on behalf of or pursuant
to any understanding with it has, disclosed to a third party any information
regarding the Note Sale or engaged in any transactions in the securities of the
Company (including, without limitation, any Short Sales (as defined below)
involving any of the Company’s securities) since the time that the Undersigned
was first contacted by either the Company or RBC Capital Markets, LLC or any
other person regarding the Note Sale, this Agreement or an investment in the
Company’s common stock or the Company. Each of the Undersigned and the Holder
covenants that neither it nor any person acting on its behalf or pursuant to any
understanding with it will disclose to a third party any information regarding
the Note Sale or engage, directly or indirectly, in any transactions in the
securities of the Company (including Short Sales) prior to the time the
transactions contemplated by this Agreement and the Company’s announcement of
(i) the proposed issuance and sale of approximately $250 million aggregate
principle amount of new convertible senior notes, consistent with the disclosure
provided to the Undersigned (the “New Note Offering”), and (ii) the exchange by
the Company of cash and/or common stock for Notes held by other holders, are
publicly disclosed. “Short Sales” include, without limitation, all “short sales”
as defined in Rule 200 of Regulation SHO promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and all types of direct
and indirect stock pledges, forward sale contracts, options, puts, calls, short
sales, swaps, derivatives and similar arrangements (including on a total return
basis), and sales and other transactions through non-U.S. broker-dealers or
foreign regulated brokers. Solely for purposes of this Section 2.4, subject to
the Undersigned’s and the Holder’s compliance with their respective obligations
under the U.S. federal securities laws and the Undersigned’s and the Holder’s
respective internal policies, (a) “Undersigned” and “Holder” shall not be deemed
to include any employees, subsidiaries or affiliates of the Undersigned or the
Holder that are effectively walled off by appropriate “Chinese Wall” information
barriers approved by the Undersigned’s or the Holder's respective legal or
compliance department (and thus have not been privy to any information
concerning the Note Sale), and (b) the foregoing representations and covenants
of this Section 2.6 shall not apply to any transaction by or on behalf of an
Account that was effected without the advice or participation of, or such
Account’s receipt of information regarding the Note Sale provided by, the
Undersigned.

 

 
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Section 2.5     Adequate Information; No Reliance. The Holder acknowledges and
agrees that (a) the Holder has been furnished with all materials it considers
relevant to making an investment decision to enter into the Sale (including
information regarding the New Note Offering) and has had the opportunity to
review the Company’s filings and submissions with the Securities and Exchange
Commission (the “SEC”), including, without limitation, all information filed or
furnished pursuant to the Exchange Act, (b) the Holder has had a full
opportunity to ask questions of the Company concerning the Company, its
business, operations, financial performance, financial condition and prospects,
and the terms and conditions of the Note Sale, (c) the Holder has had the
opportunity to consult with its accounting, tax, financial and legal advisors to
be able to evaluate the risks involved in the Note Sale and to make an informed
investment decision with respect to such Note Sale, and (d) the Holder is not
relying, and has not relied, upon any statement, advice (whether accounting,
tax, financial, legal or other), representation or warranty made by the Company
or any of its affiliates or representatives including, without limitation, RBC
Capital Markets, LLC, except for (A) the publicly available filings and
submissions made by the Company with the SEC under the Exchange Act, and (B) the
representations and warranties made by the Company in this Agreement.

 

Article III: Covenants, Representations and Warranties of the Company

 

The Company hereby covenants as follows, and makes the following representations
and warranties, each of which is and shall be true and correct on the date
hereof and at the Closing, to the Holders and RBC Capital Markets, LLC, and all
such covenants, representations and warranties shall survive the Closing.

 

Section 3.1     Power and Authorization. The Company is duly incorporated,
validly existing and in good standing under the laws of its state of
incorporation, and has the power, authority and capacity to execute and deliver
this Agreement, to perform its obligations hereunder, and to consummate the Note
Sale contemplated hereby.

 

Section 3.2     Valid and Enforceable Agreement; No Violations. This Agreement
has been duly executed and delivered by the Company and constitutes a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that such enforcement may be subject to the
Enforceability Exceptions. This Agreement and consummation of the Note Sale will
not violate, conflict with or result in a breach of or default under (i) the
Company’s charter, bylaws or other organizational documents, (ii) any agreement
or instrument to which the Company is a party or by which the Company or any of
its assets are bound, or (iii) any laws, regulations or governmental or judicial
decrees, injunctions or orders applicable to the Company.

 

Section 3.3     Disclosure. On or before the first business day following the
date of this Agreement, the Company shall issue a publicly available press
release or file with the SEC a Current Report on Form 8-K disclosing all
material terms of the Note Sale and the New Note Offering (to the extent not
previously publicly disclosed).

 

Article IV: Miscellaneous

 

Section 4.1     Entire Agreement. This Agreement and any documents and
agreements executed in connection with the Note Sale embody the entire agreement
and understanding of the parties hereto with respect to the subject matter
hereof and supersede all prior and contemporaneous oral or written agreements,
representations, warranties, contracts, correspondence, conversations, memoranda
and understandings between or among the parties or any of their agents,
representatives or affiliates relative to such subject matter, including,
without limitation, any term sheets, emails or draft documents.

 

Section 4.2     Construction. References in the singular shall include the
plural, and vice versa, unless the context otherwise requires. References in the
masculine shall include the feminine and neuter, and vice versa, unless the
context otherwise requires. Headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meanings of the
provisions hereof. Neither party, nor its respective counsel, shall be deemed
the drafter of this Agreement for purposes of construing the provisions of this
Agreement, and all language in all parts of this Agreement shall be construed in
accordance with its fair meaning, and not strictly for or against either party.

 

 
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Section 4.3     Governing Law. This Agreement shall in all respects be construed
in accordance with and governed by the substantive laws of the State of New
York, without reference to its choice of law rules.

 

Section 4.4     Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument. Any counterpart or other signature
hereon delivered by facsimile shall be deemed for all purposes as constituting
good and valid execution and delivery of this Agreement by such party.

 

Section 4.5     Dealer Manager’s Reliance. RBC Capital Markets, LLC, acting as
the dealer manager in the Note Sale, is entitled to rely on the representations
and warranties made by the Company and the Holder under this Agreement.

 

Section 4.6     Undersigned's Business. Notwithstanding anything to the contrary
herein, the Company hereby expressly confirms that it is fully aware of and
understands the Undersigned's role under this Agreement; the Undersigned has
been appointed by its clients (Accounts) to take investment decisions on their
behalf (agency); the Undersigned (acting through its Global Asset Management
division) is not the owner of the client's assets. The legal relationship
between the Undersigned and its clients is as set forth in the respective
investment management agreement. The Undersigned may be subject to privacy
and/or banking secrecy laws, and/or other non-disclosure legislation, or may be
subject to contractual confidentiality obligations or duties; the Company fully
understands and accepts that the Undersigned will at any time be complying with
any regulation and responsibilities applicable to it under which it operates and
is conducting its asset management business.

 

Signature Page Follows

 

 
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first above written.

 

 

“UNDERSIGNED”:

 

“Company”:

                   

PDL BioPharma, Inc.

 

(in its capacities described in the first paragraph hereof)

                   

By:

   

By:

               

Name:

 

 

Name:

 

 

 

 

 

 

 

 

Title:

 

 

Title:

 

 

 

 

SIGNATURE PAGE TO EXCHANGE AGREEMENT

PDL BIOPHARMA, INC.

 

 
 

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EXHIBIT A

Exchanging Beneficial Owners

 

 

Name of
Beneficial Owner

Principal Amount of

Purchased Notes

Portion of
Cash Payment

                                                           

 

 

EXHIBIT A TO EXCHANGE AGREEMENT

PDL BIOPHARMA, INC.