Exhibit 10.1
EXECUTION VERSION
DENDREON CORPORATION
(a Delaware corporation)
$75,000,000
4.75% Convertible Senior Subordinated Notes due 2014
PURCHASE AGREEMENT
June 5, 2007
Merrill Lynch, Pierce, Fenner & Smith
     Incorporated
4 World Financial Center
New York, New York 10080
Ladies and Gentlemen:
          Dendreon Corporation, a Delaware corporation (the “Company”), confirms
its agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
“Initial Purchaser”), with respect to the issue and sale by the Company and the
purchase by the Initial Purchaser of $75,000,000 aggregate principal amount of
the Company’s 4.75% Convertible Senior Subordinated Notes due 2014 (the “Firm
Notes”), and with respect to the grant by the Company to the Initial Purchaser
of the option described in Section 2(b) hereof (the “Option”) to purchase all or
any part of an additional $25,000,000 principal amount of the Company’s 4.75%
Convertible Senior Subordinated Notes due 2014 (the “Optional Notes” and,
together with the Firm Notes, the “Notes”).
          The Notes will be convertible into fully paid, nonassessable shares of
common stock of the Company, par value $0.001 per share (the “Common Stock”), on
the terms, and subject to the conditions, set forth in the Indenture (as defined
below). As used herein, “Conversion Shares” means the shares of Common Stock
into which the Notes are convertible, and each Conversion Share will have
attached thereto the right to purchase one one-hundredth (0.01) of a share of
the Series A Junior Participating Preferred Stock of the Company (each, a
“Right”), issuable by the Company pursuant to the Rights Agreement by and
between the Company and Mellon Investor Services LLC, as rights agent, dated as
of September 18, 2002. The Notes will be issued pursuant to an indenture (the
“Indenture”) to be dated as of the First Delivery Date (as defined in
Section 2(a)), between the Company and The Bank of New York Trust Company, a
national banking association duly organized under the law of the United States
(the “Trustee”).
          The Company understands that the Initial Purchaser proposes to make an
offering of the Notes on the terms and in the manner set forth herein and agrees
that the Initial Purchaser may resell, subject to the conditions set forth
herein, all or a portion of the Notes to purchasers (the “Subsequent
Purchasers”) at any time after this agreement (the “Agreement”) has been
executed and delivered. The Notes are to be sold to the Initial Purchaser and
subsequently offered and sold by the Initial Purchaser without being registered
under the Securities Act of 1933, as amended (the “1933 Act”), in reliance upon
exemptions therefrom. Pursuant to the terms of the Notes and the Indenture,
investors that acquire the Notes may only resell or otherwise transfer such
Notes if such Notes are hereafter registered under the 1933 Act or if an
exemption from the registration requirements of the 1933 Act is available
(including the exemption afforded by Rule 144A (“Rule 144A”) of the rules and
regulations promulgated under the 1933 Act by the Securities and Exchange
Commission (the “Commission”)).
          The Company has prepared and delivered to the Initial Purchaser an
electronic copy of a preliminary offering memorandum dated June 4, 2007, and the
Initial Purchaser has prepared, in discussion with the Company, a pricing term
sheet attached hereto as Schedule I, which includes the pricing terms and other
information with respect to the Notes and other matters not included in the
Final Offering Memorandum (the “Pricing Term Sheet”) setting forth the terms of
the Notes omitted in the preliminary offering memorandum. The Company has

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prepared and will deliver to the Initial Purchaser, no later than the second day
after the date hereof, copies of a final offering memorandum dated June 5, 2007
(the “Final Offering Memorandum”). The preliminary offering memorandum, the
Pricing Term Sheet and Final Offering Memorandum were each prepared for use by
the Initial Purchaser in connection with its solicitation of purchases of, or
offering of, the Notes. As used herein, the term “Offering Memorandum” means,
with respect to any date or time referred to in this Agreement, the most recent
offering memorandum (whether the Preliminary Offering Memorandum or the Final
Offering Memorandum, or any amendment or supplement to either such document),
including annexes and exhibits thereto and any documents incorporated therein by
reference, which in each case has been prepared and delivered by the Company to
the Initial Purchaser in connection with their solicitation of purchases of, or
offering of, the Notes.
          All references in this Agreement to financial statements and schedules
and other information which is “contained,” “included” or “stated” in the
Offering Memorandum (or other references of like import) shall be deemed to
include all such financial statements and schedules and other information which
are incorporated by reference in the Offering Memorandum; and all references in
this Agreement to amendments or supplements to the Offering Memorandum shall be
deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934 (the “1934 Act”) which is incorporated by reference in the
Offering Memorandum.
          Holders of the Notes (including the Initial Purchaser and their direct
and indirect transferees) will be entitled to the benefits of a Registration
Rights Agreement, to be dated as of the First Delivery Date and to be entered
into by and between the Company and the Initial Purchaser (the “Registration
Rights Agreement”), pursuant to which the Company will agree to file with the
Commission a shelf registration statement (the “Registration Statement”)
covering the resale of the Notes and the Conversion Shares under the 1933 Act,
and to use its commercially reasonable efforts to cause the Registration
Statement to be declared effective.
          The preliminary offering memorandum dated June 4, 2007, as amended and
supplemented immediately prior to the Applicable Time (as defined below),
including any documents filed under the 1934 Act prior to the Applicable Time
and incorporated by reference therein, is referred to herein as the “Preliminary
Offering Memorandum,” and the Preliminary Offering Memorandum together with the
Pricing Term Sheet and any of the documents listed on Schedule II hereto are
collectively referred to herein as the “Disclosure Package.” “Applicable Time”
means 7:00 a.m. (Eastern Time) on June 4, 2007 or such other time as agreed by
the Company and the Initial Purchaser.
          This Agreement, the Indenture, the Notes and the Registration Rights
Agreement are referred to herein collectively as the “Operative Documents.”
          1. Representations, Warranties and Agreements of the Company. The
Company represents and warrants to the Initial Purchaser as of the date hereof
and as of each Delivery Date (as defined in Section 2(b)), and agrees with the
Initial Purchaser, as follows:
          (a) Disclosure Package and Final Offering Memorandum. At the
Applicable Time, the Disclosure Package did not, and at any Delivery Date (as
defined below), the Disclosure Package and the Final Offering Memorandum will
not, include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that this
representation, warranty and agreement shall not apply to statements in or
omissions from the Disclosure Package and the Final Offering Memorandum made in
reliance upon and in conformity with written information furnished to the
Company by the Initial Purchaser for use in the Offering Memorandum.
          (b) Incorporated Documents. The Offering Memorandum as delivered from
time to time shall incorporate by reference the most recent Annual Report of the
Company on Form 10-K filed with the Commission and each Quarterly Report of the
Company on Form 10-Q and each Current Report of the Company on Form 8-K filed
with the Commission since the end of the fiscal year to which such Annual Report
relates. The documents incorporated or deemed to be incorporated by reference in
the Offering Memorandum at the time they were or hereafter are filed with the
Commission complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the Commission
thereunder (the “1934 Act Regulations”), and, when read together with the other
information in the Disclosure Package at the Applicable Time, and the Disclosure
Package and the Final Offering Memorandum at the Closing Time, did not and will
not

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include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
          (c) Independent Accountants. Ernst & Young LLP, who certified the
financial statements and supporting schedules, if any, included or incorporated
by reference in the Disclosure Package and the Final Offering Memorandum are
independent public accountants with respect to the Company and its subsidiary
(as defined below) within the meaning of Regulation S-X promulgated under the
1933 Act.
          (d) Financial Statements. The financial statements, together with the
related schedules and notes, included, or incorporated by reference, in the
Disclosure Package and the Final Offering Memorandum present fairly the
financial position of the Company and its consolidated subsidiary at the dates
indicated and the statement of operations, stockholders’ equity and cash flows
of the Company and its consolidated subsidiary for the periods specified; said
financial statements have been prepared in conformity with generally accepted
accounting principles (“GAAP”) applied on a consistent basis throughout the
periods involved (which for the avoidance of doubt includes changes to GAAP to
the extent applicable). The supporting schedules, if any, included, or
incorporated by reference, in the Disclosure Package and the Final Offering
Memorandum present fairly in accordance with GAAP the information required to be
stated therein. The summary consolidated financial information included in the
Disclosure Package and the Final Offering Memorandum present fairly the
information shown therein and have been compiled on a basis consistent with that
of the audited financial statements included in the Disclosure Package and the
Final Offering Memorandum. All disclosures included or incorporated by reference
in the Disclosure Package and the Final Offering Memorandum regarding “non-GAAP
financial measures” (as such term is defined by the rules and regulations of the
Commission) comply in all material respects with Regulation G of the 1934 Act
and Item 10 of Regulation S-K under the 1933 Act, to the extent applicable.
          (e) Material Adverse Effect. Since the respective dates as of which
information is given in the Disclosure Package and the Final Offering
Memorandum, except as otherwise stated therein, (i) there has been no material
adverse effect, or any development that could reasonably be expected to result
in a material adverse effect, in the condition, financial or otherwise, or in
the earnings, business, properties, operations or prospects, whether or not
arising from transactions in the ordinary course of business, of the Company and
its subsidiary, considered as one entity (any such change or effect thereof is
called a “Material Adverse Effect”); (ii) the Company and its subsidiary,
considered as one entity, have not incurred any material liability or
obligation, indirect, direct or contingent, nor entered into any material
transaction or agreement; and (iii) there has been no dividend or distribution
of any kind declared, paid or made by the Company or, except for dividends paid
to the Company, its subsidiary on any class of capital stock or repurchase or
redemption by the Company or its subsidiary of any class of capital stock.
          (f) Incorporation and Good Standing of the Company and its Subsidiary.
Each of the Company and its subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation and has corporate power and authority to own or lease, as the
case may be, and operate its properties and to conduct its business as described
in the Disclosure Package and the Final Offering Memorandum and, in the case of
the Company, to enter into and perform its obligations under this Agreement.
Each of the Company and its subsidiary is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such jurisdictions
where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse Effect. All of
the issued and outstanding shares of capital stock of the subsidiary have been
duly authorized and validly issued, are fully paid and nonassessable and are
owned by the Company directly, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim. The Company does not own or
control, directly or indirectly, any corporation, association or other entity
other than Dendreon San Diego LLC, a Delaware limited liability company.
Dendreon San Diego LLC is the only subsidiary of the Company (the “Subsidiary”).
          (g) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Disclosure Package and the Final
Offering Memorandum in the column entitled “Actual” under the caption
“Capitalization” (except for subsequent issuances, if any, pursuant to this
Agreement, pursuant to reservations, agreements, employee benefit plans referred
to in the Disclosure Package and the Final Offering Memorandum or pursuant to
the exercise of options referred to in the Disclosure Package and the Final
Offering

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Memorandum or pursuant to the exercise of options referred to in the Disclosure
Package and the Final Offering Memorandum). The shares of issued and outstanding
capital stock of the Company have been duly authorized and validly issued and
are fully paid and non-assessable; none of the holders of outstanding shares of
capital stock of the Company and no other person has or will have any preemptive
or other rights to purchase, subscribe for or otherwise acquire (i) the
Conversion Shares or any rights to such shares, or any Rights attached thereto,
(other than those granted by the holders of the Notes) or (ii) as a result of or
in connection with the transactions contemplated by the Operative Documents, any
other capital stock of the Company or rights thereto; the capital stock of the
Company conforms to the description thereof contained in the Disclosure Package
and the Final Offering Memorandum and such description conforms to the rights
set forth in the instruments defining the same; the Conversion Shares have been
duly authorized and reserved for issuance upon conversion of the Notes by all
necessary corporate action of the Company; all Conversion Shares, when so issued
in accordance with the Amended and Certificate of Incorporation of the Company,
as amended, and delivered upon such conversion in accordance with the terms of
the Indenture and the Notes, will be duly authorized and validly issued, fully
paid and nonassessable and free and clear of all liens, encumbrances, equities
or claims and will conform to the description of the Common Stock contained in
the Disclosure Package and the Final Offering Memorandum.
          (h) Certain Disclosure Package and the Final Offering Memorandum
Statements. The statements set forth in the Disclosure Package and the Final
Offering Memorandum under the captions “Description of the Notes” and
“Description of Capital Stock”, insofar as they purport to constitute summaries
of the terms of the Notes and the Common Stock, respectively, fairly and
accurately present the matters described therein in all material respects.
          (i) Authorization of the Operative Documents. The Company has all
requisite corporate right, power and authority to enter into this Agreement, the
Indenture and the Registration Rights Agreement and to perform its obligations
hereunder and thereunder and the transactions contemplated hereby and thereby
have been duly authorized by the Company. This Agreement has been and, as of the
First Delivery Date, the Indenture and the Registration Rights Agreement will
have been, duly authorized, executed and delivered by the Company and upon such
execution by the Company (assuming the due authorization, execution and delivery
of such agreements by the other parties thereto) this Agreement, the Indenture
and the Registration Rights Agreement will constitute valid and binding
agreements of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors’ rights generally and except as enforcement thereof is subject to
general principles of equity, including specific performance (regardless of
whether enforcement is considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing, and subject to the limitations
on rights to indemnification and contribution under applicable law or equitable
principles; and the Indenture and Registration Rights Agreement conform in all
material respects to the descriptions thereof contained in the Disclosure
Package and the Final Offering Memorandum.
          (j) Authorization of the Notes. The Company has all necessary
corporate right, power and authority to execute, issue and deliver the Notes and
perform its obligations thereunder; the Notes have been duly authorized by the
Company and, when authenticated, issued and delivered in the manner provided for
in the Indenture and delivered against payment of the Purchase Price therefor as
provided in this Agreement (assuming due authentication of the Notes by the
Trustee), will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors’ rights generally
and except as enforcement thereof is subject to general principles of equity,
including specific performance (regardless of whether enforcement is considered
in a proceeding in equity or at law) and an implied covenant of good faith and
fair dealing, and subject to the limitations on rights to indemnification and
contribution under applicable law or equitable principles, and will be in the
form contemplated by, and entitled to the benefits of, the Indenture; and the
Notes conform in all material respects to the description of the Notes contained
in the Disclosure Package and the Final Offering Memorandum.
          (k) Defaults and Conflicts. Neither the Company nor the Subsidiary is
in violation of its charter or bylaws or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or the Subsidiary is
a party or by which any of them may be bound, or to which any of the property or
assets of the Company or the Subsidiary is subject (collectively, “Agreements

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and Instruments”), except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of the Operative
Documents by the Company and the issuance of the Notes and Conversion Shares and
the consummation of the transactions contemplated herein and in the Disclosure
Package and the Final Offering Memorandum (including the issuance and sale of
the Notes and the use of the proceeds from the sale of the Notes as described in
the Disclosure Package and the Final Offering Memorandum under the caption “Use
of Proceeds”) and compliance by the Company with its obligations hereunder have
been duly authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or the
Subsidiary pursuant to, the Agreements and Instruments except for such
conflicts, breaches or defaults or Repayment Events or liens, charges or
encumbrances that, singly or in the aggregate, would not result in a Material
Adverse Effect, nor will such action result in any violation of the provisions
of the charter or bylaws of the Company or the Subsidiary or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or the Subsidiary or any of their assets, properties or
operations. As used herein, a “Repayment Event” means any event or condition
which gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by
the Company or the Subsidiary.
          (l) Labor Disputes. No labor problem or dispute with the employees of
the Company or the Subsidiary exists or, to the Company’s knowledge, is
threatened or imminent.
          (m) Legal Proceedings. Except as disclosed in the Disclosure Package
and in the Final Offering Memorandum, there are no legal or governmental
actions, suits or proceedings pending or, to the best of the Company’s
knowledge, threatened (i) against or affecting the Company or the Subsidiary,
(ii) which has as the subject thereof any officer or director of, or property
owned or leased by, the Company or the Subsidiary or (iii) relating to
environmental or discrimination matters, where in any such case (A) there is a
reasonable possibility that such action, suit or proceeding might be determined
adversely to the Company or the Subsidiary and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to have a
Material Adverse Effect or adversely affect the consummation of the transactions
contemplated by this Agreement.
          (n) Stabilization or Manipulation. Neither the Company nor any
affiliate, as such term is defined in Rule 501(b) under the 1933 Act (each, an
“Affiliate”), of the Company has taken, directly or indirectly, any action which
is designed to or which has constituted or which would be reasonably expected to
cause or result in unlawful stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Notes.
          (o) Intellectual Property. The Company and the Subsidiary own,
possess, license or have other rights to use, on reasonable terms, all patents,
patent applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets,
technology, know-how and other intellectual property (collectively, the
“Intellectual Property”) necessary for the conduct of the Company’s business.
Except as set forth in the Disclosure Package and the Final Offering Memorandum
(a) no party has been granted an exclusive license to use any portion of such
Intellectual Property owned by the Company; (b) to the Company’s knowledge,
there is no material infringement by third parties of any such Intellectual
Property owned by or exclusively licensed to the Company; (c) to the Company’s
knowledge, there is no pending or threatened action, suit, proceeding or claim
by others challenging the Company’s rights in or to any material Intellectual
Property, and the Company is unaware of any facts which would form a reasonable
basis for any such claim; (d) there is no material pending or threatened action,
suit, proceeding or claim by others challenging the validity or scope of any
such Intellectual Property, and the Company is unaware of any facts which would
form a reasonable basis for any such claim; and (e) there is no material pending
or threatened action, suit, proceeding or claim by others that the Company’s
business as now conducted infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and the Company
is unaware of any other fact which would form a reasonable basis for any such
claim.
          (p) All Necessary Permits, etc. The Company and the Subsidiary possess
such valid and current licenses, certificates, authorizations or permits issued
by the appropriate state, federal or foreign regulatory

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agencies or bodies necessary to conduct their respective businesses, and neither
the Company nor the Subsidiary has received any notice of proceedings relating
to the revocation or modification of, or non-compliance with, any such license,
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could have a Material
Adverse Effect.
          (q) Title to Properties. The Company and the Subsidiary has good and
marketable title to all the properties and assets reflected as owned in the
financial statements referred to in Section 1(d) above (or elsewhere in the
Disclosure Package and the Final Offering Memorandum), in each case free and
clear of any material security interests, mortgages, liens, encumbrances,
equities, claims and other defects, except as disclosed in any document filed by
the Company pursuant to the 1934 Act, and incorporated by reference in the
Disclosure Package and the Final Offering Memorandum. The real property,
improvements, equipment and personal property held under lease by the Company or
the Subsidiary are held under valid and enforceable leases, with such exceptions
as are not material and do not materially interfere with the use made or
proposed to be made of such real property, improvements, equipment or personal
property by the Company or the Subsidiary.
          (r) Environmental Laws. Except as described in the Disclosure Package
and the Final Offering Memorandum (i) neither the Company nor the Subsidiary is
in violation of any federal, state, local or foreign law, regulation, order,
permit or other requirement relating to pollution or protection of human health
or the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products
(collectively, “Materials of Environmental Concern”), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environment Concern (collectively,
“Environmental Laws”), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations required for
the operation of the business of the Company or the Subsidiary under applicable
Environmental Laws, or noncompliance with the terms and conditions thereof, nor
has the Company or the Subsidiary received any written communication, whether
from a governmental authority, citizens group, employee or otherwise, that
alleges that the Company or the Subsidiary is in violation of any Environmental
Law, except as would not, individually or in the aggregate, have a Material
Adverse Effect; (ii) there is no claim, action or cause of action filed with a
court or governmental authority, no investigation with respect to which the
Company has received written notice, and no written notice by any person or
entity alleging potential liability for investigatory costs, cleanup costs,
governmental responses costs, natural resources damages, property damages,
personal injuries, attorneys’ fees or penalties arising out of, based on or
resulting from the presence, or release into the environment, of any Material of
Environmental Concern at any location owned, leased or operated by the Company
or the Subsidiary, now or in the past (collectively, “Environmental Claims”),
pending or, to the best of the Company’s knowledge, threatened against the
Company or the Subsidiary or any person or entity whose liability for any
Environmental Claim the Company or the Subsidiary has retained or assumed either
contractually or by operation of law, except as would not, individually or in
the aggregate, have a Material Adverse Effect; (iii) to the best of the
Company’s knowledge, there are no past, present or anticipated future actions,
activities, circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge, presence or disposal of any
Material of Environmental Concern, that reasonably could result in a violation
of any Environmental Law, require expenditures to be incurred pursuant to
Environmental Law, or form the basis of a potential Environmental Claim against
the Company or the Subsidiary or against any person or entity whose liability
for any Environmental Claim the Company or the Subsidiary has retained or
assumed either contractually or by operation of law, except as would not,
individually or in the aggregate, have a Material Adverse Effect; and (iv)
neither the Company nor the Subsidiary is subject to any pending or threatened
proceeding under Environmental Law to which a governmental authority is a party
and which is reasonably likely to result in monetary sanctions of $100,000 or
more.
          (s) Investment Company Act. The Company is not, and upon the issuance
and sale of the Notes as herein contemplated and the application of the net
proceeds therefrom as described in the Disclosure Package and the Final Offering
Memorandum will not be, an “investment company” or an entity “controlled” by an
“investment company” as such terms are defined in the Investment Company Act of
1940, as amended.
          (t) Offering Integration. Within the preceding six months, neither the
Company nor any other person acting on behalf of the Company has offered or sold
to any person any Notes, or any securities of the

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same class as the Notes, or any shares of Common Stock into which the Notes are
convertible, other than (i) shares of stock offered or sold to directors,
consultants or employees, which, in each case would not be integrated with the
offering contemplated hereby and (ii) Notes offered or sold to the Initial
Purchaser hereunder.
          (u) Federal Reserve System Regulations. None of the transactions
contemplated by this Agreement (including, without limitation, the use of the
proceeds from the sale of the Notes) will violate or result in a violation of
Section 7 of the 1934 Act, or any regulation promulgated thereunder, including,
without limitation, Regulations T, U, and X of the Board of Governors of the
Federal Reserve System.
          (v) Rule 144A Eligibility. The Notes are eligible for resale pursuant
to Rule 144A and, when they are issued and delivered pursuant to this Agreement,
will not be, of the same class (within the meaning of Rule 144A under the 1933
Act) as securities listed on a national securities exchange registered under
Section 6 of the 1934 Act, or quoted in a U.S. automated interdealer quotation
system.
          (w) General Solicitation. None of the Company, its Affiliates or any
person acting on its or any of their behalf (other than the Initial Purchaser,
as to whom the Company makes no representation) has, directly or through an
agent, engaged or will engage, in connection with the offering of the offered
Notes, in any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the 1933 Act.
          (x) 1933 Act Registration. Subject to compliance by the Initial
Purchaser with the representations and warranties set forth in Section 2 and the
procedures set forth in Section 6 hereof, it is not necessary in connection with
the offer, sale and delivery of the Notes to the Initial Purchaser and the
offer, initial resale and delivery of the Notes by the Initial Purchaser in the
manner contemplated by this Agreement, the Indenture, the Registration Rights
Agreement and the Disclosure Package and the Final Offering Memorandum, to
register the Notes or the Conversion Shares under the 1933 Act (except as may be
required under the 1933 Act and the rules and regulations promulgated thereunder
in connection with the registration of the Notes and the Conversion Shares
pursuant to the Registration Rights Agreement) or to qualify the Indenture under
the Trust Indenture Act of 1939, as amended (except as may be required in
connection with the registration of the Notes pursuant to the Registration
Rights Agreement).
          (y) 1934 Act Reporting. The Company is subject to the reporting
requirements of Section 13 or Section 15(d) of the 1934 Act. The Company has
timely and properly filed with the Commission all reports and other documents
required to have been filed by it with the Commission pursuant to the 1934 Act
and the 1934 Act Regulations (together, the “1934 Act Reports”).
          (z) Employee Retirement Income Security Act. For purposes of this
paragraph, the term “Plan” means a plan (within the meaning of Section 3(3) of
ERISA) subject to Title IV of ERISA with respect to which the Company may have
any liability. None of the following events has occurred or exists: (i) a
failure to fulfill the obligations, if any, under the minimum funding standards
of Section 302 of the United States Employee Retirement Income Security Act of
1974, as amended (“ERISA”), and the regulations and published interpretations
thereunder with respect to a Plan, determined without regard to any waiver of
such obligations or extension of any amortization period; (ii) an audit or
investigation by the Internal Revenue Service, the U.S. Department of Labor, the
Pension Benefit Guaranty Corporation or any other federal or state governmental
agency or any foreign regulatory agency with respect to the employment or
compensation of employees by the Company that could have a Material Adverse
Effect; (iii) any breach of any contractual obligation, or any violation of law
or applicable qualification standards, with respect to the employment or
compensation of employees of the Company that could have a Material Adverse
Effect. None of the following events has occurred or is reasonably likely to
occur: (i) a material increase in the aggregate amount of contributions required
to be made to all Plans in the current fiscal year of the Company compared to
the amount of such contributions made in the Company’s most recently completed
fiscal year; (ii) a material increase in the Company’s “accumulated
post-retirement benefit obligations” (within the meaning of Statement of
Financial Accounting Standards 106) compared to the amount of such obligations
in the Company’s most recently completed fiscal year; (iii) any event or
condition giving rise to a liability under Title IV of ERISA that could have a
Material Adverse Effect; or (iv) the filing of a claim by one or more employees
or former employees of the Company related to their employment that could have a
Material Adverse Effect.

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          (aa) Insurance. Each of the Company and the Subsidiary is insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their businesses. All policies of insurance
and fidelity or surety bonds insuring the Company or the Subsidiary or their
respective businesses, assets, employees, officers and directors are in full
force and effect; the Company and the Subsidiary are in compliance with the
terms of such policies and instruments in all material respects; and there are
no claims by the Company or the Subsidiary under any such policy or instrument
as to which any insurance company is denying liability or defending under a
reservation of rights clause. The Company has no reason to believe that it or
the Subsidiary will not be able (i) to renew its existing insurance coverage as
and when such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as now
conducted and at a cost that would not have a Material Adverse Effect.
          (bb) Tax Matters. The Company and the Subsidiary have filed all
necessary federal, state, local and foreign income and franchise tax returns in
a timely manner and have paid all taxes required to be paid by any of them and,
if due and payable, any related or similar assessment, fine or penalty levied
against any of them, except for any taxes, assessments, fines or penalties as
may be being contested in good faith and by appropriate proceedings, or such
taxes, assessments, fines or penalties that could not reasonably be expected to
have a Material Adverse Effect. The Company has made appropriate provisions in
the applicable financial statements referred to in Section 1(d) above in respect
of all federal, state, local and foreign income and franchise taxes for all
current or prior periods as to which the tax liability of the Company or the
Subsidiary has not been finally determined.
          (cc) Accounting Controls and Disclosure Controls and Procedures. The
Company and the Subsidiary maintain a system of disclosure controls and
procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the 1934 Act)
sufficient to provide reasonable assurances that information required to be
disclosed in reports that the Company files or submits under the 1934 Act is
recorded, processed, summarized and reported within the time periods specified
in the Commissions rules, regulations and forms. Except as described in the
Disclosure Package and the Final Offering Memorandum, since the end of the
Company’s most recent audited fiscal year, there has been (i) no material
weakness in the Company’s internal control over financial reporting (as defined
in Rule 13a-15(f) and 15d-15(f) of the 1934 Act) (whether or not remediated) and
(ii) no change in the Company’s internal control over financial reporting that
has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting.
          (dd) Preemptive Rights. There are no contracts, agreements or
understandings between the Company and any person granting such person the right
(other than rights which have been waived or satisfied) to require the Company
to file a registration statement under the 1933 Act with respect to any
securities of the Company owned or to be owned by such person or to require the
Company to include such securities in any securities being registered pursuant
to any registration statement filed by the Company under the 1933 Act.
          (ee) Foreign Transactions Reporting Act. The operations of the Company
are and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by
any governmental agency (collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the
Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened.
          (ff) Foreign Corrupt Practices Act. Neither the Company nor, to the
knowledge of the Company, any director, officer, agent, employee, affiliate or
other person acting on behalf of the Company or the Subsidiary is aware of or
has taken any action, directly or indirectly, that would result in a violation
by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and
the rules and regulations thereunder (the “FCPA”), including, without
limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA and the Company and, to the knowledge of
the Company, its affiliates have

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conducted their businesses in compliance with the FCPA and have instituted and
maintain policies and procedures designed to ensure, and which are reasonably
expected to continue to ensure, continued compliance therewith.
          (gg) Sarbanes-Oxley Act. There is and has been no failure on the part
of the Company or any of the Company’s directors or officers, in their
capacities as such, to comply in all material respects with any provision of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related
to loans and Sections 302 and 906 related to certifications.
          (hh) Foreign Assets Control. Neither the Company nor, to the knowledge
of the Company, any director, officer, agent, employee, affiliate or person
acting on behalf of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (the “OFAC”); and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person currently subject to any
U.S. sanctions administered by OFAC.
          (ii) Compliance with Regulatory Authorities. The clinical and
pre-clinical tests conducted by or on behalf of or sponsored by the Company or
the Subsidiary that are described in the documents incorporated by reference in
the Final Offering Memorandum were and, if still pending, are being conducted in
accordance, in all material respects, with standard medical and scientific
research procedures; the descriptions in the Final Offering Memorandum of the
results of such studies and tests are accurate and complete in all material
respects and fairly present the data derived from such studies and tests; the
Company and the Subsidiary have no knowledge of any other published studies
conducted by third parties the results of which contest or contradict, and have
no knowledge of any other published studies conducted by third parties that
unsuccessfully attempted to replicate, the results described or referred to in
the Final Offering Memorandum. Since January 1, 2003, the Company and the
Subsidiary have operated and currently are in compliance in all material
respects with all applicable rules, regulations and policies of the U.S. Food
and Drug Administration (the “FDA”) and comparable drug regulatory agencies
outside of the United States (collectively, the “Regulatory Authorities”); the
Company has not received any notices or other correspondence from the Regulatory
Authorities or any other governmental agency requiring the termination or
suspension of any clinical or pre-clinical study or test sponsored by the
Company or the Subsidiary and that is described in the Final Offering Memorandum
or the results of which are referred to in the Final Offering Memorandum .
          2. Purchase, Sale and Delivery of Notes.
          (a) Subject to the terms and conditions, and in reliance upon the
representations and warranties, herein set forth, the Company agrees to sell to
the Initial Purchaser and the Initial Purchaser agrees to purchase from the
Company, at a purchase price of 97% of $75,000,000 aggregate principal amount
(the “Purchase Price”). Payment of the Purchase Price and delivery of
certificates for the Firm Notes shall be made at the office of Shearman &
Sterling LLP, 599 Lexington Avenue, New York, New York, or at such other place
as shall be agreed upon by the Initial Purchaser and the Company, at 10:00 a.m.
(Eastern time) on June 11, 2007, or such later date as the Initial Purchaser
shall designate (such date and time of delivery and payment for the Firm Notes
being herein called the “First Delivery Date”). Delivery of the Firm Notes shall
be made to the Initial Purchaser against payment of the Purchase Price by the
Initial Purchaser. Payment for the Firm Notes shall be effected either by wire
transfer of immediately available funds to a bank account, the account number
and the ABA number for such bank to be provided by the Company to the Initial
Purchaser at least two business days in advance of the First Delivery Date, or
by such other manner of payment as may be agreed in writing by the Company and
the Initial Purchaser.
          (b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants the
Option to the Initial Purchaser to purchase the Optional Notes at the same price
as the Initial Purchaser shall pay for the Firm Notes. The Option may be
exercised only to cover over-allotments in the sale of the Firm Notes by the
Initial Purchaser. The Option may be exercised once in whole or in part at any
time not more than 30 days subsequent to the date of this Agreement upon notice
in writing or by facsimile by the Initial Purchaser to the Company setting forth
the amount (which shall be an integral multiple of $1,000) of Optional Notes as
to which the Initial Purchaser is exercising the Option.

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          The date for payment of the Purchase Price for, and delivery of
certificates for the Optional Notes, being herein referred to as an “Optional
Delivery Date,” which may be the First Delivery Date (the First Delivery Date
and the Optional Delivery Date, if any, being sometimes referred to as a
“Delivery Date”), shall be determined by the Initial Purchaser but shall not be
later than five full business days after written notice of election to purchase
Optional Notes is given. Delivery of the Optional Notes shall be made to the
Initial Purchaser against payment of the Purchase Price by the Initial
Purchaser. Payment for the Optional Notes shall be effected either by wire
transfer of immediately available funds to a bank account, the account number
and the ABA number for such bank to be provided by the Company to the Initial
Purchaser at least two business days in advance of the Optional Delivery Date,
or by such other manner of payment as may be agreed in writing by the Company
and the Initial Purchaser.
          (c) The Company will deliver against payment of the Purchase Price the
Notes initially sold to qualified institutional buyers (“QIBs”), as defined in
Rule 144A in the form of one or more permanent global certificates (the “Global
Notes”), registered in the name of Cede & Co., as nominee for The Depository
Trust Company (“DTC”). Beneficial interests in the Notes initially sold to QIBs
will be shown on, and transfers thereof will be effected only through, records
maintained in book-entry form by DTC and its participants.
          3. Further Agreements of the Company. The Company further agrees with
the Initial Purchaser as follows:
          (a) Prior to the earlier of six months from the date of this Agreement
or the completion of the distribution of the Notes by the Initial Purchaser, the
Company, as promptly as possible, will furnish to the Initial Purchaser and to
Shearman & Sterling LLP, counsel to the Initial Purchaser, without charge, such
number of copies of the Final Offering Memorandum and any amendments and
supplements thereto and documents incorporated by reference therein in each case
as soon as available and in such quantities as the Initial Purchaser may
reasonably request. The Company will pay the expenses of printing and
distributing to the Initial Purchaser all such documents.
          (b) The Company will immediately notify the Initial Purchaser, and
confirm such notice in writing, of (i) any filing made by the Company of
information relating to the offering of the Notes with any securities exchange
or any other regulatory body in the United States or any other jurisdiction, and
(ii) prior to the completion of the placement of the Notes by the Initial
Purchaser as evidenced promptly by a notice in writing from the Initial
Purchaser to the Company, any material changes in or affecting the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and the Subsidiary considered as one enterprise which (A) make
any statement in the Disclosure Package and the Final Offering Memorandum false
or misleading or (B) are not disclosed in the Offering Memorandum and which
could reasonably be determined to have a Material Adverse Effect. In such event
or if during such time any event shall occur or condition exist as a result of
which it is necessary, in the reasonable opinion of any of the Company, its
counsel, the Initial Purchaser or counsel for the Initial Purchaser, to amend or
supplement the Offering Memorandum in order that the Offering Memorandum not
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances then existing, the Company will forthwith amend or supplement
the Offering Memorandum by preparing and furnishing to the Initial Purchaser an
amendment or amendments of, or a supplement or supplements to, the Offering
Memorandum (in form and substance satisfactory in the reasonable opinion of
counsel for the Initial Purchaser) so that, as so amended or supplemented, the
Offering Memorandum will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances existing at the time it is delivered to a
Subsequent Purchaser, not misleading.
          (c) Prior to the completion of the distribution of the Notes, the
Company will advise the Initial Purchaser promptly of any proposal to amend or
supplement the Final Offering Memorandum and will not effect such amendment or
supplement without the consent of the Initial Purchaser, which consent shall not
be unreasonably withheld. Neither the consent of the Initial Purchaser, nor the
Initial Purchaser’s delivery of any such amendment or supplement, shall
constitute a waiver of any of the conditions set forth in Section 5 hereof. If
at any time prior to the completion of the placement of the Notes by the Initial
Purchaser, the Company has issued or shall have issued any written communication
that would be deemed an “issuer free writing prospectus” as defined in Rule 433
of the 1933 Act Regulations if the placement of the Notes contemplated by this
Agreement were conducted as a public offering made pursuant to a registration
statement filed with the Commission under the 1933 Act (a “Supplemental Offering
Document”), and there occurred or occurs an event or development as a result of
which

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such Supplemental Offering Document conflicted or would conflict with the
information contained in the Disclosure Package or the Final Offering Memorandum
or included or would include an untrue statement of a material fact or omitted
or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at that subsequent time,
not misleading, the Company will promptly notify the Initial Purchaser and will
promptly amend or supplement, at its own expense, such Supplemental Offering
Document to eliminate or correct such conflict, untrue statement or omission.
          (d) Upon and following discussion with the Initial Purchaser, the
Company will arrange, if necessary, to qualify the Notes and the Conversion
Shares for offering and sale by the Initial Purchaser under the applicable
securities laws of such states and other jurisdictions as the Initial Purchaser
may designate and will maintain such qualifications in effect as long as
required for the sale of the Notes and the Conversion Shares; provided, however,
that the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject.
          (e) The Company will cooperate with the Initial Purchaser and use its
commercially reasonable efforts to permit the offered Notes to be eligible for
clearance and settlement through the facilities of DTC.
          (f) The Company will use the net proceeds received by it from the sale
of the Notes in the manner specified in the Disclosure Package and the Final
Offering Memorandum under “Use of Proceeds.”
          (g) During a period of 90 days from the date of the Final Offering
Memorandum (the “Lockup Period”), the Company will not, without the prior
written consent of the Initial Purchaser, (i) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option right or warrant to
purchase or lend or otherwise transfer or dispose of any Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
(collectively, the “Restricted Securities”) or (except as contemplated by the
Registration Rights Agreement) file any registration statement under the 1933
Act with respect to any Restricted Securities, or (ii) enter into any swap or
any other derivative transaction (other than the Operative Documents) that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of any Restricted Securities, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of Restricted
Securities, in cash or otherwise. The foregoing sentence shall not apply to
(A) the Notes to be sold hereunder or the Conversion Shares to be delivered upon
conversion thereof, (B) the issuance of shares of Common Stock upon conversion
or exchange of convertible or exchangeable securities of the Company outstanding
as of the date hereof, (C) the resale registration statement to be filed by the
Company pursuant to the Registration Rights Agreement relating to the resale of
the Notes and the Conversion Shares, or (D) the issuance of shares of Common
Stock or options or rights to purchase shares of Common Stock pursuant to the
Company’s employee benefit plans in effect on the date of this Agreement or the
Company’s stockholder rights plan or the issuance of rights thereunder.
          (h) The Company agrees that it will provide the Initial Purchaser with
an agreement substantially in the form of Exhibit A attached hereto signed by
Mr. Richard B. Brewer, Chairman of the Board of Directors, as promptly as
reasonably practicable. The Company will use reasonable best efforts to prevent
any sale by Mr. Richard B. Brewer during the Lockup Period.
          (i) The Company will use its commercially reasonable efforts to assist
the Initial Purchaser in arranging to permit the Notes to be designated PORTAL
securities in accordance with the rules and regulations adopted by the National
Association of Securities Dealers, Inc. (“NASD”) relating to trading in the
PORTAL Market.
          (j) The Company will execute and deliver the Registration Rights
Agreement in form and substance reasonably satisfactory to the Initial Purchaser
and the Company.
          (k) The Company will use its commercially reasonable efforts to have
the Conversion Shares approved by The Nasdaq Global Market (“Nasdaq”) for
inclusion prior to the effectiveness of the Registration Statement.

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          (l) Until the completion of the distribution of the Notes, the Company
will file all documents required to be filed with the Commission pursuant to the
1934 Act and the 1934 Act Regulations within the time periods required thereby.
          (m) The Company will reserve and keep available at all times, free of
preemptive rights, shares of Common Stock for the purpose of enabling the
Company to satisfy any obligations to issue Conversion Shares upon the
conversion of the Notes.
          (n) The Company agrees that it will not, and will use its commercially
reasonable efforts to cause its Affiliates not to, directly or indirectly,
solicit any offer to buy, sell or make any offer or sale of, or otherwise
negotiate in respect of, securities of the Company of any class if, as a result
of the doctrine of “integration” referred to in Rule 502 under the 1933 Act,
such offer or sale would render invalid (for the purpose of (i) the sale of the
Notes by the Company to the Initial Purchaser, (ii) the resale of the Notes by
the Initial Purchaser to subsequent purchasers or (iii) the resale of the Notes
or Conversion Shares by such Subsequent Purchasers to others) the exemption from
the registration requirements of the 1933 Act provided by Section 4(2) thereof
or by Rule 144A or otherwise.
          (o) Until the expiration of two years after the original issuance of
the Notes, the Company will not resell any Notes or Conversion Shares which are
“restricted securities” (as such term is defined under Rule 144(a)(3) under the
1933 Act), whether as beneficial owner or otherwise (except as agent acting as a
securities broker on behalf of and for the account of customers in the ordinary
course of business in unsolicited broker’s transactions).
          (p) Each of the Notes will bear, to the extent applicable, the legend
contained in “Transfer Restrictions” in the Disclosure Package and the Final
Offering Memorandum for the time period and upon the other terms stated therein,
except after the Notes are resold pursuant to a registration statement effective
under the 1933 Act.
          (q) The Company will not, and will use its commercially reasonable
efforts to cause its Affiliates not to, take, directly or indirectly, any action
which is designed to unlawfully stabilize or manipulate, or which constitutes or
which might reasonably be expected to cause or result in unlawful stabilization
or manipulation, of the price of any security of the Company in connection with
the offering of the Notes.
          (r) The Company acknowledges and agrees that (i) the purchase and sale
of the Notes pursuant to this Agreement is an arm’s-length commercial
transaction between the Company, on the one hand, and the Initial Purchaser, on
the other hand, (ii) in connection with the offering contemplated hereby and the
process leading to such transaction the Initial Purchaser is and has been acting
solely as a principal and is not the agent or fiduciary of the Company, or its
stockholders, creditors, employees or any other party, (iii) the Initial
Purchaser has not assumed or will not assume an advisory or fiduciary
responsibility in favor of the Company with respect to the offering contemplated
hereby or the process leading thereto (irrespective of whether the Initial
Purchaser has advised or is currently advising the Company on other matters) and
the Initial Purchaser has no obligation to the Company with respect to the
offering contemplated hereby except the obligations expressly set forth in this
Agreement, (iv) the Initial Purchaser and its respective affiliates may be
engaged in a broad range of transactions that involve interests that differ from
those of the Company and (v) the Initial Purchaser has not provided any legal,
accounting, regulatory or tax advice with respect to the offering contemplated
hereby and the Company has consulted its own legal, accounting, regulatory and
tax advisors to the extent it deemed appropriate.
          (s) The Company represents and agrees that, unless it obtains the
prior consent of the Initial Purchaser, and the Initial Purchaser represents and
agrees that, unless it obtains the prior consent of the Company, it has not made
and will not make any offer relating to the Notes that, if the placement of the
Notes contemplated by this Agreement were conducted as a public offering
pursuant to a registration statement filed with the Commission, would constitute
an “issuer free writing prospectus,” as defined in Rule 433, or that would
otherwise constitute a “free writing prospectus,” as defined in Rule 405,
required to be filed with the Commission. Any such free writing prospectus
consented to by the Company and the Initial Purchaser is hereinafter referred to
as a “Permitted Supplemental Offering Document.”

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          4. Expenses.
          (a) The Company will pay all expenses incident to the performance of
its obligations under this Agreement, including (i) the preparation, printing,
delivery to the Initial Purchaser and any filing of the Disclosure Package or
any Offering Memorandum (including financial statements and any schedules or
exhibits and any document incorporated therein by reference) and of each
amendment or supplement thereto or of any Supplemental Offering Document,
(ii) the preparation, printing and delivery to the Initial Purchaser of the
Operative Documents and such other documents as may be required in connection
with the offering, purchase, sale, issuance or delivery of the Notes or the
issuance or delivery of the Conversion Shares, (iii) the preparation, issuance
and delivery of the certificates for the Notes to the Initial Purchaser,
including any transfer taxes, any stamp or other duties payable upon the sale,
issuance and delivery of the Notes to the Initial Purchaser and any charges of
DTC in connection therewith and the certificates for the Conversion Shares,
(iv) the fees and disbursements of the Company’s counsel, accountants and other
advisors, (v) subject to prior discussion with the Initial Purchaser, the
qualification of the Notes and Conversion Shares under securities laws in
accordance with the provisions of Section 3(d) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Initial Purchaser in
connection therewith and in connection with the preparation of the Blue Sky
Survey, any supplement thereto, (vi) the fees and expenses of the Trustee,
including the fees and disbursements of counsel for the Trustee in connection
with the Indenture and the Notes, and the costs and charges of any registrar,
transfer agent, paying agent or conversion agent, (vii) the costs and expenses
of the Company relating to investor presentations on any “road show” undertaken
in connection with the marketing of the Notes including, without limitation,
expenses associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road show
presentations, travel and lodging expenses of the representatives and officers
of the Company and any such consultants, and the cost of transportation
chartered in connection with the road show, except for the cost of aircraft that
will be shared equally between the Company and the Initial Purchaser (viii) any
fees payable in connection with the rating of the Notes and (ix) any fees and
expenses payable in connection with the initial and continued designation of the
Notes as PORTAL securities under the PORTAL Market Rules pursuant to NASD
Rule 5322 and the inclusion of the Conversion Shares on Nasdaq.
          (b) If this Agreement is terminated by the Initial Purchaser in
accordance with the provisions of Section 5 or Section 10(a)(i) hereof, the
Company shall reimburse the Initial Purchaser for all of its reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Initial Purchaser.
          5. Conditions of the Initial Purchaser’s Obligations. The obligations
of the Initial Purchaser hereunder are subject to the accuracy, when made and on
each Delivery Date, of the representations and warranties of the Company
contained in Section 1 hereof or in certificates of any officer of the Company
or the Subsidiary delivered pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder, and to each of the
following additional terms and conditions:
          (a) the Initial Purchaser shall not have discovered and disclosed to
the Company prior to or on such Delivery Date that the Offering Memorandum or
any amendment or supplement thereto contains any untrue statement of a fact
which, in the reasonable opinion of counsel to the Initial Purchaser, is
material or omits to state any fact which is material and necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
          (b) on each Delivery Date, Jones Day, shall have furnished to the
Initial Purchaser their written opinion, as counsel to the Company, addressed to
the Initial Purchaser and dated such Delivery Date, substantially in the form of
Annex 1 attached hereto;
          (c) on each Delivery Date, Perkins Coie, LLP, special patent counsel
to the Company, shall have furnished to the Initial Purchaser their written
opinion, addressed to the Initial Purchaser and dated such Delivery Date,
substantially in the form of Annex 2 attached hereto;
          (d) on each Delivery Date, Hyman, Phelps & McNamara, P.C. , U.S. Food
and Drug Administration regulatory counsel to the Company, shall have furnished
to the Initial Purchaser their written opinion, addressed to the Initial
Purchaser and dated such Delivery Date, substantially in the form of Annex 3
attached hereto;

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          (e) Shearman & Sterling LLP, shall have furnished to the Initial
Purchaser their written opinion, as counsel to the Initial Purchaser, addressed
to the Initial Purchaser and dated such Delivery Date, in form and substance
satisfactory to the Initial Purchaser;
          (f) at the Delivery Date, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Disclosure Package or the Final Offering Memorandum (exclusive of any amendments
or supplements thereto subsequent to the Applicable Time), any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and the Subsidiary considered as
one enterprise, whether or not arising in the ordinary course of business, and
the Initial Purchaser shall have received a certificate of the Chief Executive
Officer of the Company and of the Chief Financial Officer of the Company, dated
as of the Delivery Date, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1 hereof are
true and correct with the same force and effect as though expressly made at and
as of the Delivery Date, and (iii) the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to the Delivery Date;
          (g) at the Delivery Date, the Initial Purchaser shall have received a
certificate of the Chief Financial Officer of the Company, dated as of the
Delivery Date, reasonably satisfactory in form and substance to the Initial
Purchaser and counsel for the Initial Purchaser;
          (h) at the time of the execution of this Agreement, the Initial
Purchaser shall have received from Ernst & Young LLP a letter dated such date,
in form and substance satisfactory to the Initial Purchaser, together with
signed or reproduced copies of such letter for the Initial Purchaser containing
statements and information of the type ordinarily included in accountants’
“comfort letters” to Initial Purchaser with respect to the financial statements
and certain financial information contained in the Offering Memorandum;
          (i) at the Delivery Date, the Initial Purchaser shall have received
from Ernst & Young LLP a letter, dated as of the Delivery Date, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
subsection (g) of this Section, except that the specified date referred to shall
be a date not more than three business days prior to the Delivery Date;
          (j) the Indenture shall have been duly executed and delivered by the
Company and the Trustee and the Notes shall have been duly executed and
delivered by the Company and duly authenticated by the Trustee;
          (k) the Company and the Initial Purchaser shall have executed and
delivered the Registration Rights Agreement (in form and substance reasonably
satisfactory to the Initial Purchaser) and the Registration Rights Agreement
shall be in full force and effect;
          (l) at the First Delivery Date, the Notes shall have been approved for
designation as a PORTAL security;
          (m) subsequent to the date of this Agreement, there shall not have
occurred a downgrading in the rating assigned to the Notes, if any, by any
“nationally recognized statistical rating organization,” as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the 1933 Act, and no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of the Notes;
          (n) on or prior to the date of this Agreement, the Initial Purchaser
shall have received an agreement substantially in the form of Exhibit A attached
hereto signed by the persons listed in Schedule III attached hereto; and
          (o) at the Delivery Date, counsel for the Initial Purchaser shall have
been furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the issuance and sale of the Notes
as herein contemplated, or in order to evidence the accuracy of any of the
representations or

14

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warranties, or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Company in connection with the issuance and sale of
the Notes as herein contemplated shall be reasonably satisfactory in form and
substance to the Initial Purchaser and counsel for the Initial Purchaser.
          If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Initial Purchaser by notice to the Company at any time at or prior to the
applicable Delivery Date, and such termination shall be without liability of any
party to any other party except as provided in Section 4 and except that
Sections 1, 7, 8 and 9 shall survive any such termination and remain in full
force and effect.
          6. Subsequent Offers and Resales of the Notes.
          (a) The Initial Purchaser and the Company hereby establish and agree
to observe the following procedures in connection with the offer and sale of the
Notes:
     i. Offers and Sales. Offers and sales of the Notes shall be made to such
persons and in such manner as is contemplated by the Offering Memorandum.
     ii. Rule 144A Compliance. The Notes have not been and will not be offered
or sold by the Initial Purchaser or its Affiliates acting on their behalf,
except in accordance and in compliance with Rule 144A under the Act and the
Initial Purchaser will effect such offers and sales only in compliance with all
applicable securities laws in any jurisdiction in which the Initial Purchaser
effect such offers or sales.
     iii. General Solicitation. No general solicitation or general advertising
(within the meaning of Rule 502(c) under the 1933 Act) will be used in the
United States in connection with the offering or sale of the Notes.
     iv. Non-Bank Fiduciaries. In the case of a non-bank Subsequent Purchaser of
a Note acting as a fiduciary for one or more third parties, each third party
shall, in the judgment of the Initial Purchaser, be an institutional accredited
investor within the meaning of Rule 501(a) under the 1933 Act (an “Accredited
Investor”) or a “qualified institutional buyer” within the meaning of Rule 144A
under the 1933 Act (a “Qualified Institutional Buyer”) or a non-U.S. person
outside the United States.
     v. Subsequent Purchaser Notification. The Initial Purchaser will take
reasonable steps to inform, and use its commercially reasonable efforts to cause
each of its U.S. Affiliates to take reasonable steps to inform, persons
acquiring Notes from the Initial Purchaser or affiliate, as the case may be, in
the United States that the Notes (A) have not been and will not be registered
under the 1933 Act, (B) are being sold to them without registration under the
1933 Act in reliance on Rule 144A or in accordance with another exemption from
registration under the 1933 Act, as the case may be, and (C) may not be offered,
sold or otherwise transferred except (1) to the Company, (2) outside the United
States in accordance with Regulation S, or (3) inside the United States in
accordance with (x) Rule 144A to a person whom the seller reasonably believes is
a Qualified Institutional Buyer that is purchasing such Notes for its own
account or for the account of a Qualified Institutional Buyer to whom notice is
given that the offer, sale or transfer is being made in reliance on Rule 144A or
(y) pursuant to another available exemption from registration under the 1933
Act.
     vi. Minimum Principal Amount. No sale of the Notes to any one Subsequent
Purchaser will be for less than U.S. $1,000 principal amount and no Security
will be issued in a smaller principal amount. If the Subsequent Purchaser is a
non-bank fiduciary acting on behalf of others, each person for whom it is acting
must purchase at least U.S. $1,000 principal amount of the Notes.

15

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          (b) The Initial Purchaser represents and warrants to, and agrees with,
the Company that (i) it is a Qualified Institutional Buyer, and (ii) it has not
taken any action, directly or indirectly, designed to cause or result in, or
which has constituted or which might reasonably be expected to constitute,
unlawful stabilization or manipulation of the price of any security of the
Company in connection with the offering of the Notes.
          7. Indemnification.
          (a) Indemnification of Initial Purchasers. The Company agrees to
indemnify and hold harmless the Initial Purchaser, its Affiliates, its selling
agents and each person, if any, who controls the Initial Purchaser within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
     i. against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Disclosure Package, the Final
Offering Memorandum (or any supplement thereto) or any Supplemental Offering
Document or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
     ii. against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 7(d) below) any such
settlement is effected with the written consent of the Company; and
     iii. against any and all expense whatsoever, as incurred (including the
fees and disbursements of counsel chosen by the Initial Purchaser), reasonably
incurred in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Initial Purchaser expressly for use in the Disclosure Package, the Final
Offering Memorandum (or any supplement thereto) or any Supplemental Offering
Document.
          (b) Indemnification of the Company. The Initial Purchaser agrees to
indemnify and hold harmless the Company, its Affiliates, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Disclosure Package, the
Final Offering Memorandum or any Supplemental Offering Document in reliance upon
and in conformity with written information furnished to the Company by the
Initial Purchaser expressly for use therein.
          (c) Actions against Parties; Notice. Each indemnified party shall give
notice as promptly as reasonably practicable to each indemnifying party of any
action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by the Initial Purchaser,
and, in the case of parties indemnified pursuant to Section 7(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for

16

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fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, which consent shall not be unreasonably withheld, settle or compromise
or consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section or Section 8 hereof (whether or
not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
          (d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested in writing an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 7(a)(ii) effected without its written consent,
which consent shall not be unreasonably withheld, if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
          8. Contribution. If the indemnification provided for in Section 7
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (a) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Initial Purchaser on the other hand from the offering of the Notes
pursuant to this Agreement or (b) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Initial Purchaser on
the other hand in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
          The relative benefits received by the Company on the one hand and the
Initial Purchaser on the other hand in connection with the offering of the Notes
pursuant to this Agreement shall be deemed to be in the same respective
proportions as (x) the total net proceeds from the offering of the Notes
pursuant to this Agreement (before deducting expenses) received by the Company
and (y) the total underwriting discount received by the Initial Purchaser, bear
to the aggregate initial offering price of the Notes.
          The relative fault of the Company on the one hand and the Initial
Purchaser on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchaser and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
          The Company and the Initial Purchaser agree that it would not be just
and equitable if contribution pursuant to this Section were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
          Notwithstanding the provisions of this Section 8, the Initial
Purchaser shall not be required to contribute any amount in excess of the amount
by which the total price at which the Notes purchased and sold by it

17

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hereunder exceeds the amount of any damages which such Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
          No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
          For purposes of this Section 8, each person, if any, who controls the
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act and the Initial Purchaser’s Affiliates and selling agents shall
have the same rights to contribution as the Initial Purchaser, and each person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act and each of the Company’s Affiliates shall
have the same rights to contribution as the Company.
          9. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or the Subsidiary submitted pursuant
hereto shall remain operative and in full force and effect, regardless of
(a) any investigation made by or on behalf of the Initial Purchaser or its
Affiliates or selling agents, any person controlling the Initial Purchaser, its
officers or directors or any person controlling the Company and (b) delivery of
and payment for the Notes.
          10. Termination.
          (a) Termination; General. The Initial Purchaser may terminate this
Agreement, by notice to the Company, at any time at or prior to the applicable
Delivery Date if (i) there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Disclosure Package or the Final Offering Memorandum (exclusive of any amendments
or supplements thereto subsequent to the date of this Agreement), any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and the Subsidiary
considered as one enterprise, whether or not arising in the ordinary course of
business, (ii) there has occurred any material adverse change in the financial
markets in the United States or the international financial markets, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Initial Purchaser,
impracticable or inadvisable to market the Notes or to enforce contracts for the
sale of the Notes, (iii) trading in any securities of the Company has been
suspended or materially limited by the Commission or the Nasdaq, or if trading
generally on the American Stock Exchange or the New York Stock Exchange or in
the Nasdaq has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any said exchanges or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority,
(iv) a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States or (v) a banking
moratorium has been declared by either Federal or New York authorities.
          Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof; and provided further that Sections 1, 7,
8 and 9 shall survive such termination and remain in full force and effect.
          11. Notices, etc. All notices and other communications hereunder shall
be in writing, and:
          (a) if to the Initial Purchaser, shall be delivered or sent by any
standard form of telecommunication to Merrill Lynch, Pierce, Fenner & Smith
Incorporated at 4 World Financial Center, New York, New York 10080, Attention:
Syndicate Department; and
          (b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to: Dendreon Corporation, 3005 First Avenue, Seattle,
Washington, 98121, Attention: General Counsel.
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.

18

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          12. No Advisory or Fiduciary Relationship. The Company acknowledges
and agrees that (a) the purchase and sale of the Notes pursuant to this
Agreement, including the determination of the offering price of the Notes and
any related discounts and commissions, is an arm’s-length commercial transaction
between the Company, on the one hand, and the Initial Purchaser, on the other
hand, (b) in connection with the offering contemplated hereby and the process
leading to such transaction, the Initial Purchaser is and has been acting solely
as a principal and is not the agent or fiduciary of the Company, or its
shareholders, creditors, employees or any other party, (c) the Initial Purchaser
has not assumed or will not assume advisory or fiduciary responsibilities in
favor of the Company with respect to the offering contemplated hereby or the
process leading thereto (irrespective of whether the Initial Purchaser has
advised or is currently advising the Company on other matters) and the Initial
Purchaser does not have any obligation to the Company with respect to the
offering contemplated hereby except the obligations expressly set forth in this
Agreement, (d) the Initial Purchaser and its affiliates may be engaged in a
broad range of transactions that involve interests that differ from those of the
Company, and (e) the Initial Purchaser has not provided any legal, accounting,
regulatory or tax advice with respect to the offering contemplated hereby and
the Company has consulted its own legal, accounting, regulatory and tax advisors
to the extent it deemed appropriate.
          13. Parties. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchaser and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchaser and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 7 and 8
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Initial Purchaser and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Notes from the
Initial Purchaser shall be deemed to be a successor by reason merely of such
purchase.
          14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
          15. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK TIME.
          16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
          17. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
          18. Definition of the Terms “Business Day”. For purposes of this
Agreement, except as otherwise provided in this Agreement, the term (a)
“business day” means any day on which Nasdaq is open for trading.

19

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[Intentionally Left Blank]

20

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          If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Initial Purchaser and the Company in accordance with its terms.

            Very truly yours,

DENDREON CORPORATION
      By:           Name:           Title:        

Accepted and agreed by:
MERRILL LYNCH, PIERCE, FENNER & SMITH
     INCORPORATED

         
By:
       
 
 
 
    Authorized Signatory    

21

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SCHEDULE I
Pricing Term Sheet
$75,000,000
4.75% Convertible Senior Subordinated Notes Due 2014
     1. The initial offering price of the notes shall be 100% of the principal
amount thereof, plus accrued interest, if any, from the date of issuance.
     2. The net proceeds to the Company shall be $72.5 million, after the
Initial Purchaser’s discount and estimated offering expenses of $0.3 million.
     3. The interest rate on the notes shall be 4.75% per annum.
     4. The notes shall be convertible as described in the Preliminary Offering
Memorandum into shares of Common Stock, par value $0.001, of the Company at an
initial conversion rate of 97.2644 shares per $1,000 principal amount of notes
(equivalent to a conversion price of $10.28 per share).
     5. The following language revises the corresponding language that was
included as the last paragraph under the caption “Description of The Notes —
Conversion Rights”:
          Notwithstanding the foregoing, in no event shall the conversion rate
as adjusted in accordance with the foregoing exceed 114.2857 shares per $1,000
principal amount of the notes, other than on account of the adjustments to the
conversion rate in the manner set forth in clauses (1) through (6) above.
     6. The following table and the language following the table revise the
corresponding preliminary information that was included in the Preliminary
Offering Memorandum under the caption “Description of the Notes — Make Whole
Premium Upon a Fundamental Change”:
Make Whole Premium Upon a Fundamental Change (Number of Additional Shares)

22

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Effective Date

                                                                  Stock Price  
6/11/07   6/15/08   6/15/09   6/15/10   6/15/11   6/15/12   6/15/13   6/15/14  
$    8.75
    17.0213       17.0213       17.0213       17.0213       17.0213      
17.0213       17.0213       17.0213  
$  10.00
    14.8674       14.0363       13.0502       11.9332       10.6149       9.1240
      7.3853       2.7356  
$  12.50
    11.8910       11.1989       10.3156       9.2178       7.8579       6.1708  
    3.8400       0.0000  
$  15.00
    9.9346       9.3247       8.5631       7.6199       6.3999       4.8278    
  2.7518       0.0000  
$  17.50
    8.5417       7.9966       7.3394       6.4961       5.4345       4.0663    
  2.2788       0.0000  
$  20.00
    7.5002       7.0110       6.4231       5.6778       4.7384       3.5276    
  1.9769       0.0000  
$  22.50
    6.6737       6.2435       5.7080       5.0470       4.2089       3.1281    
  1.7538       0.0000  
$  25.00
    6.0259       5.6392       5.1455       4.5449       3.7840       2.8127    
  1.5778       0.0000  
$  27.50
    5.5046       5.1370       4.6846       4.1354       3.4355       2.5564    
  1.4343       0.0000  
$  30.00
    5.0564       4.7229       4.3042       3.7965       3.1502       2.3434    
  1.3146       0.0000  
$  32.50
    4.6877       4.3668       3.9784       3.5086       2.9096       2.1629    
  1.2135       0.0000  
$  35.00
    4.3685       4.0671       3.7036       3.2588       2.7041       2.0096    
  1.1268       0.0000  
$  37.50
    4.0671       3.8011       3.4625       3.0424       2.5245       1.8755    
  1.0517       0.0000  
$  40.00
    3.8291       3.5695       3.2542       2.8576       2.3706       1.7589    
  0.9857       0.0000  
$  42.50
    3.6192       3.3723       3.0697       2.6910       2.2320       1.6561    
  0.9278       0.0000  
$  45.00
    3.4306       3.1950       2.9078       2.5470       2.1102       1.5638    
  0.8759       0.0000  
$  50.00
    3.1051       2.8865       2.6250       2.2959       1.9014       1.4078    
  0.7885       0.0000  
$  75.00
    2.1378       1.9591       1.7771       1.5575       1.2771       0.9376    
  0.5241       0.0000  
$100.00
    1.6624       1.5086       1.3481       1.1777       0.9653       0.7021    
  0.3882       0.0000  

     The actual stock price and effective date may not be set forth on the
table, in which case:

  •   if the actual stock price on the effective date is between two stock
prices on the table or the actual effective date is between two effective dates
on the table, the make whole premium will be determined by a straight-line
interpolation between the make whole premiums set forth for the two stock prices
and the two effective dates on the table based on a 365-day year, as applicable.
    •   if the stock price on the effective date exceeds $100 per share, subject
to adjustment as described in the preliminary offering memorandum, no make whole
premium will be paid.     •   if the stock price on the effective date is less
than $8.75 per share, subject to adjustment as described in the preliminary
offering memorandum, no make whole premium will be paid.

          7. The following language revises the corresponding language that was
included as the sixth paragraph under the caption “Description of The Notes —
Make Whole Premium Upon a Fundamental Change”:
          Notwithstanding the foregoing, in no event shall the conversion rate
exceed 114.2857 per $1,000 principal amount of the notes, subject to adjustments
in the same manner as the conversion rate.
          8. All other terms of the notes shall be those set forth in the
Preliminary Offering Memorandum.

23

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SCHEDULE II
Other Documents Comprising the Disclosure Package
None

24

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SCHEDULE III

      NAME   TITLE
Mitchell H. Gold, M.D.
  President and Chief Executive Officer
Richard F. Hamm, Jr.
  Senior Vice President, Corporate Development, General Counsel and Secretary
Gregory T. Schiffman
  Senior Vice President, Chief Financial Officer and Treasurer
David L. Urdal, Ph.D.
  Senior Vice President and Chief Scientific Officer
Susan B. Bayh
  Director
Gerardo Canet
  Director
Bogdan Dziurzynski, D.P.A.
  Director
M. Blake Ingle, Ph.D.
  Director
Ruth B. Kunath
  Director
Douglas G. Watson
  Director

25

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Exhibit A
June [  ], 2007
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4 World Financial Center
New York, New York 10080
Re:     Dendreon Corporation (the “Company”)
Ladies and Gentlemen:
          The undersigned is an owner of record or beneficially of certain
shares of Common Stock of the Company (“Common Stock”) or securities convertible
into or exchangeable or exercisable for Common Stock. The Company proposes to
carry out a convertible notes offering pursuant to Rule 144 A under the
Securities Act of 1933, as amended (the “Securities Act”) (the “Offering”) for
which you will act as initial purchaser. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company. The
undersigned acknowledges that you are relying on the representations and
agreements of the undersigned contained in this letter in carrying out the
Offering and in entering into purchasing arrangements with the Company with
respect to the Offering.
          In consideration of the foregoing, the undersigned hereby agrees that
the undersigned will not, (and will cause any spouse or immediate family member
of the spouse or the undersigned living in the undersigned’s household not to,
unless such person would not be required to make a public filing under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), in connection
with any transfer described below), without the prior written consent of Merrill
Lynch, Pierce, Fenner & Smith Incorporated (“ML”) (which consent may be withheld
in its sole discretion), directly or indirectly, sell, offer, contract or grant
any option to sell (including without limitation any short sale), pledge,
transfer, establish an open “put equivalent position” or liquidate or decrease a
“call equivalent position” within the meaning of Rule 16a-1(h) under the
Exchange Act or otherwise dispose of or transfer (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition of) any shares of Common Stock, options or warrants to acquire
shares of Common Stock, or securities exchangeable or exercisable for or
convertible into shares of Common Stock currently or hereafter owned either of
record or beneficially (as defined in Rule 13d-3 under the Exchange Act of 1934)
by the undersigned (or such spouse or family member), or publicly announce an
intention to do any of the foregoing, for a period commencing on the date hereof
and continuing through the close of trading on the date 90 days after the date
of the Final Offering Memorandum (the “Lock-Up Period”), however, that the
foregoing restrictions shall not preclude or otherwise limit (i) the exercise of
an option to purchase shares of Common Stock or the withholding of shares of
restricted stock upon vesting or deliverable upon exercise of an option to pay
taxes, (ii) transfers (A) pursuant to the laws of descent or distribution,
(B) to any immediate family member of the undersigned who agrees to be bound by
the restrictions in this lock-up agreement (the “Agreement”) or (C) to any trust
for the benefit of the undersigned or the undersigned’s immediate family members
that agrees to be bound by the restrictions in this Agreement, (iii) bona fide
gifts to charitable organizations that agree to be bound by the restrictions in
this Agreement or (iv) pursuant to any pre-existing 10b5-1 sales plan in effect
on the date hereof. In addition, the undersigned agrees that, without the prior
written consent of ML, the undersigned will not, during the Lock-Up Period, make
any demand for or exercise any right with respect to, the registration of any
shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.
          Any Common Stock acquired by the undersigned subsequent to the date of
the Final Offering Memorandum in the open market will not be subject to this
Agreement.
          The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company’s transfer agent and registrar against the
transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.

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          This Agreement is irrevocable and will be binding on the undersigned
and the respective successors, heirs, personal representatives, and assigns of
the undersigned. The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Agreement. This
Agreement shall lapse and become null and void if the Offering shall not have
been consummated on or before June 15, 2007.

     
 
Printed Name of Holder
   

                  By:           Signature             

     
 
Printed Name of Person Signing
   
(and indicate capacity of person signing
if signing as custodian, trustee, or on
behalf of an entity)
   

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Annex 1
Form of Opinion of
Jones Day
[Final Opinion to be Inserted]

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Annex 2
Form of Opinion of
Perkins Coie, LLP
[Final Opinion to be Inserted]

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Annex 3
Form of Opinion of
Hyman, Phelps & McNamara, P.C.
[Final Opinion to be Inserted]

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