Update to “The Bidding Process, Procedures for the Sale of Velicept Therapeutics, Inc.”

Further to Gerbsman Partners sales letter of December 15, 2020 and “Updates” regarding the sale of Velicept Therapeutics, Inc. (“Velicept” or “Company”)  I am attaching “Exhibit A, Velicept NDA”, “Velicept Patent information”, “Velicept detail ppt information”, “Velicept Date Room Index” for Velicept Data Room due diligence information” and Asset Purchase Agreement (“APA”).

Gerbsman Partners  has been retained by Velicept (“assignment for the benefit of creditors, LLC”) (“Assignee” or “Seller”) the Assignee to Velicept to solicit interest for the acquisition of all or substantially all of the Velicept assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Velicept Assets”).

On December 9, 2020, Velicept Therapeutics, Inc., a Delaware corporation, as Assignor, made a General Assignment for the Benefit of Creditors (the “Assignment”) to Velicept (“assignment for the benefit of creditors, LLC”), a Delaware limited liability company, as Assignee, pursuant to Delaware state law. Please note that with the exception of the relationship created by the Assignment, and despite their similarity in name, Assignor and Assignee have no corporate affiliation to each other. Pursuant to the Assignment, Assignor transferred ownership of all of its rights in tangible and intangible assets (collectively, the “Assets”) to Assignee for sale. Assignee shall sell the Assets and distribute the net proceeds to creditors of Assignor.

I would encourage and recommend that all interested parties have their counsel speak with Tim Cox, to discuss any questions or comments of a legal nature relating to the transaction and “APA”.  Tim is available at 510 301 7813, tcox@sherwoodpartners.com . It is also recommended that the “APA” be submitted with any bid.  Bids are due on or before Friday January 22, 2021, at 5:00 pm Pacific Time

Disclaimer

This Enterprise Offering contains information regarding certain operations and the business of Velicept Therapeutics, Inc., and the information contained herein has been assembled for the purpose of providing interested parties with general information to assist in their evaluation of a possible acquisition of the Company or assets of the Company. Nothing contained in this Enterprise Offering is, or shall be relied upon as, a promise or representation as to the past, present or future performance of the Company or its product or as providing any assurances of any kind regarding the Company’s intellectual property or other assets.  In furnishing this Enterprise Offering, neither the Company, Gerbsman Partners nor Assignee undertakes any obligation to (and each expressly reserves the right not to) provide the recipient with access to any additional information of any kind with respect to the Company or any of its assets or operations.

Assignee has retained the services of certain former employees to assist with the sale of the assets. They have made themselves available to assist with due diligence and the transition of assets.

As Seller, Velicept (“assignment for the benefit of creditors, LLC”) will oversee the process, select the winning bidder(s) and provide some assistance with the transfer of assets to the buyer(s). This will be a closed bidding process whereby the names of the bidders and tthe bids will not be disclosed to the other interested parties. The sale is being conducted with the cooperation of the Assignee and certain former Velicept employees who have advised the Assignee that they will be available to assist buyers with due diligence and assist with a prompt transfer of the Velicept Assets.

Please review the “Important Legal Notice” below in that potential purchasers should not rely on any information contained provided by Assignee or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact.  Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Ken, Jim and I will be following up to review the updated Bidding Process, schedule due diligence meetings and answer any questions regarding the “Date Certain M&A Process”.

Any and all the assets of Velicept will be sold on an “as is, where is” basis and will be subject to “The Bidding Process for Interested Buyers”, outlined below.

IMPORTANT LEGAL NOTICE

The information in this memorandum does not constitute the whole or any part of an offer or a contract.

The information contained in this memorandum relating to the Velicapt Assets has been supplied by third parties and obtained from a variety of sources. It has not been independently investigated or verified by Assignee or Gerbsman Partners or their respective agents.  

Potential purchasers should not rely on any information contained in this memorandum or provided by Assignee or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Assignee and Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reason of Assignee’s or Gerbsman Partners’ negligence or otherwise. 

Any sale of the Velicept Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of Assignee or Gerbsman Partners. Without limiting the generality of the foregoing, Assignee and Gerbsman Partners and their respective staff, agents, and attorneys,  hereby expressly disclaim any and all implied warranties concerning the condition of the Assignee Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum contains confidential information and is not to be supplied to any person without Assignee’s or Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non-disclosure agreement attached hereto as Exhibit A.

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a nondisclosure agreement (in the form attached hereto as Exhibit A) to have access to key members of Velicept’s former management, intellectual capital and the due diligence “war room” documentation (the “Due Diligence Access”). Each interested party, upon obtaining Due Diligence Access, shall be deemed to acknowledge and represent that (i) it is bound by the bidding procedures described herein; (ii) it has an opportunity to inspect and examine the Velicept Assets and to review all pertinent documents and information with respect thereto; (iii) it is not relying upon any written or oral statements, representations, or warranties of Assignee or Gerbsman Partners, or any of their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of such interested party, and neither Assignee nor Gerbsman Partners (nor any of their respective, staff, agents, or attorneys) make any representations as to the accuracy or completeness of the same.

TERMS AND CONDITIONS TO SALE

On December 9, 2020, Velicept Therapeutics, Inc., a Delaware corporation, as Assignor, made a General Assignment for the Benefit of Creditors (the “Assignment”) to Velicept (“assignment for the benefit of creditors, LLC”), a Delaware limited liability company, as Assignee, pursuant to Delaware state law. Please note that with the exception of the relationship created by the Assignment, and despite their similarity in name, Assignor and Assignee have no corporate affiliation to each other. Pursuant to the Assignment, Assignor transferred ownership of all of its rights in tangible and intangible assets (collectively, the “Assets”) to Assignee for sale. Assignee shall sell the Assets and distribute the net proceeds to creditors of Assignor.

Seller has retained the services of Gerbsman Partners and certain former employees to assist with the sale of the assets. They have made themselves available to assist with due diligence and the transition of assets.

As Seller, Velicept (“assignment for the benefit of creditors, LLC”) will oversee the process, select the winning bidder(s) and provide some assistance with the transfer of assets to the buyer(s). This will be a closed bidding process whereby the names of the bidders and the bids will not be disclosed to the other interested parties.

The contemplated transaction will be an asset sale using a standard Asset Purchase Agreement (“APA”). Please note that the general terms under which the assets will be sold, and key terms include:

Sell and convey assets on an “as-is, where-is” basis with all faults;

Sell and convey assets with limited representations or warranties; and

No indemnity for the purchaser of assets and the purchaser will indemnify the Seller the use of the assets after the closing date.

It is important to note that Assignee uses a portion of the proceeds received from the sale for the administration of the estate and distributes the balance to the creditors of the estate. As such Assignee is not able to provide the representations or warranties that a buyer would typically receive. Please bid accordingly and with the acknowledgement that the actual terms and conditions of the final APA are to be consistent and substantially in the form of Assignee’s standard agreement.

Due diligence will begin immediately.  Assignee will provide access to an online data room to interested parties provided that a valid confidentiality and non-disclosure agreement (NDA) is put in place. Each interested party, when executing the NDA, shall be deemed to acknowledge and represent that (i) it is bound by the bidding procedures contained in this Offering Memorandum; (ii) that it has an opportunity to perform due diligence on the assets of Velicept Therapeutics, Inc.; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Velicept Therapeutics, Inc. or Assignee or their respective staff, agents or attorneys; and (iv) all provided documents and reports have been provided solely for the convenience of interested parties and neither Assignor nor Assignee (or their respective staff, agents or attorneys) makes any representations as to the accuracy or completeness of same.  The information contained in this Offering Memorandum has been provided to Assignee by the former management of Assignor. Neither Assignee nor Assignor represent that any of the information contained in this Offering Memorandum is a statement of opinion or fact.  Interested parties are solely responsible for performing their own due diligence to determine the value and status of the assets being offered through independent investigation by themselves and their legal and/or financial advisors.

Dates and Deadlines – Letters of Intent (containing the required information set forth in the paragraph below) should be received by no later than Friday, January 22 , 2021, at 5:00 pm Pacific Time.  Based on the submitted Letters of Intent or otherwise, qualifying parties (which meet the requirements established by the Assignee in its sole and absolute discretion) will be asked to prepare and submit Letters of Intent in the form of a standard Asset Purchase Agreement (an “APA”) (containing the required information set forth in the paragraph below).  Such Letters of Intent should be received no later than Friday January 22, 2021, at 5:00 pm Pacific Time (the “Offer Deadline”), or they may not be considered by the Assignee in its sole and absolute discretion.  The Assignee anticipates rendering a decision shortly after the Offer Deadline and communicating such decision to the parties submitting Letters of Intent.

Notwithstanding the deadlines set forth above, Indications of Interest and/or Letters of Intent may be presented to the Assignees at any time during the due diligence period by email or facsimile (contact information provided below).  Letters of Intent must include the name of the purchasing entity, the purchase price, the assets to be purchased, any contingencies to closing, and any variation from the standard terms and conditions of the APA (such variations shall be noted by submitting a “redline” version against the form APA provided by the Assignee).  A form APA will be provided upon request.  Interested Parties should be aware that any significant material changes to the form APA may jeopardize the transaction and cause the Assignee to reject any such Letters of Intent and reopen the bidding process.  The sale will be an “AS IS”, “WHERE IS” sale, with no representations or warranties whatsoever provided by the Assignee or Velicept Therapeutics, Inc. as to merchantability, fitness or use, and the assets shall be subject to any and all encumbrances and related obligations.

Assignee and former senior employees will also be available to host in-person and web presentations by teleconference with former technical resources that have been retained for this purpose.

Once the announcement has been made that the bidding has ended, the successful bidder (“Buyer”) will be required to close and fund promptly. Exclusivity will not be granted and it is the successful bidders’ sole responsibility to set the closing agenda.

Seller reserves the right to accelerate, delay, cancel or alter the bidding process immediately with or without notifying other bidders, and to withdraw any or all assets from this sale process in its sole discretion. Seller reserves the right to modify, cancel, delay, accelerate or revise the sale at any time with or without notifying interested parties.  Therefore, Interested parties are encouraged to complete due diligence and submit offers as soon as practicable.

All Bids/Letters of Intent should be submitted to steve@gerbsmanpartners.com and tcox@sherwoodpartners.com .

We appreciate your sincere interest in this opportunity and this exciting offering for the assets of the Velicept Therapeutics, Inc.  We look forward to engaging with you and your due diligence teams.

SPECIAL PURPOSE ENTITY DISCLOSURE

Velicept (“assignment for the benefit of creditors, LLC”) (“Assignee” or “Seller”), in its sole and limited capacity as Assignee for the Benefit of Creditors of Velicept Therapeutics, Inc. as Assignee is a special purpose entity under the direction of Assignee  headquartered at 3945 Freedom Circle, Suite 560, Santa Clara, California 95054, United States.

For additional information, please see below and/or contact:

Steven R. Gerbsman

Gerbsman Partners

steve@gerbsmanpartners.com

Kenneth Hardesty

Gerbsman Partners

ken@gerbsmanpartners.com

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