Exhibit 10.24

 

SECOND AMENDMENT TO TRIPLE NET SPACE LEASE

 

This Second Amendment to Triple Net Space Lease (this “Amendment”), dated for
reference purposes only as of December 18, 2008, is made by and among SRI Eight
Pacific Shores LLC, a Delaware limited liability company (“Lessor”), PDL
BioPharma, Inc., a Delaware corporation (“PDL”), and Facet Biotech Corporation,
a Delaware corporation (“Facet”).

 

RECITALS

 

A.                                   Pacific Shores Investors, LLC, a Delaware
limited liability company (Lessor’s predecessor-in-interest) and PDL entered
into that certain Triple Net Space Lease dated as of July 6, 2006 (the “Original
Lease”) for the lease of approximately 283,015 square feet of space consisting
of the entirety of the building located at 1400 Seaport Boulevard in Redwood
City, California, commonly known as Building 9 (the “Premises”).

 

B.                                     Lessor and PDL entered into that certain
First Amendment to Triple Net Space Lease dated as of March 31, 2008 (the “First
Amendment”).  The Original Lease and the First Amendment are collectively
referred to as the “Lease”.  The term of the Lease is scheduled to expire on
December 31, 2021 (the “Current Expiration Date”). The capitalized terms used
and not otherwise defined herein shall have the same meanings and definitions as
set forth in the Lease.

 

C.                                     The Board of Directors of PDL has
determined that it is appropriate, desirable and in the best interests of PDL
and its stockholders to transfer and assign certain of its assets and
liabilities to Facet (the “Separation”), pursuant to a Separation and
Distribution Agreement to be entered into by and between PDL and Facet as of the
Effective Date (as defined in Paragraph 1 below), the form of which Facet has
attached as Exhibit 2.1 to its Registration Statement on Form 10 filed with the
Securities and Exchange Commission (the “Separation Agreement”).

 

D.                                    To effect the Separation, the Board of
Directors of PDL has determined that all of the issued and outstanding shares of
common stock of Facet should be distributed to the common stockholders of PDL,
on a pro rata basis (the “Distribution”).  Facet will be and remain an
independent, publicly traded company that is not legally affiliated with PDL
following the Separation and Distribution.

 

E.                                      Following the Separation and
Distribution, PDL will permanently relocate its entire business operations to
Incline Village, Nevada, and Facet will operate its business in Redwood City,
California.  Accordingly, PDL desires to add Facet as a co-tenant under the
Lease, on the terms and conditions set forth in this Amendment.

 

F.                                      Lessor is willing to consent to having
Facet added as a co-tenant under the Lease, on the terms and conditions set
forth in this Amendment.

 

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NOW, THEREFORE, in consideration of the foregoing, the mutual promises set forth
herein, and other good and valuable consideration, the receipt and sufficiency
of which the parties hereby acknowledge, the parties agree as follows:

 

1.                                       Effective Date.  The “Effective Date”
of this Amendment shall be the date on which the Distribution is effective;
provided, however, if the Distribution does not occur by December 31, 2008, then
this Amendment shall terminate and be of no further force or effect.

 

2.                                       Addition of Facet as a Co-Tenant.  As
of the Effective Date, Facet shall be a co-tenant with PDL under the Lease, and
PDL grants to Facet an undivided interest in the Lessee’s leasehold estate
created by the Lease.  As of the Effective Date, all right, title and interest
of the Lessee in, to and under the Lease and the Premises demised thereunder
shall be deemed to be vested in Facet and PDL as co-tenants, so that the
leasehold estate of each shall be concurrent as to right and priority, and all
references in the Lease to the “Lessee” shall be deemed references to PDL and
Facet, jointly and severally.  Facet agrees to be bound by all of the terms and
conditions of the Lease and to faithfully perform all obligations and duties of
“Lessee” under the Lease as if Facet were an original signatory thereto as
lessee thereunder.

 

3.                                       PDL and Facet Jointly and Severally
Liable; All Lessee’s Rights to be Exercisable Solely By Facet.  The addition of
Facet as a co-tenant shall not relieve or release PDL from any obligations under
the Lease, and Facet and PDL shall be and remain jointly and severally liable
for all obligations of “Lessee” under the Lease arising from and after the
Effective Date.  Notwithstanding Paragraph 2 above, Lessor, PDL and Facet
acknowledge and agree that any and all rights granted to Lessee under the Lease,
including, but not limited to, the right to terminate the Lease pursuant thereto
by reason of a casualty or condemnation, and any and all actions on the part of
the Lessee undertaken under or with respect to the Lease, shall be exercisable
solely by Facet (or any successor in interest thereto), acting alone, without
notice by Lessor or Facet (or any successor in interest thereto) to, or consent
or approval by, PDL. Without limitation of the foregoing, PDL and Facet
acknowledge and agree that any notice by PDL to Lessor purporting to exercise
any rights of Lessee under the Lease shall be ineffective, and Lessor’s failure
to respond thereto shall not bind or estop Lessor in any manner. In furtherance
of the preceding provisions, PDL consents to, waives notice of, and shall not be
discharged, released or exonerated from its liability under the Lease by reason
of, any amendment to or other modification of the Lease, including any such
amendment or other modification executed solely by Facet (or any successor in
interest thereto), any assignment of the Lessee’s interests under the Lease,
including any such assignment executed solely by Facet (or any successor in
interest thereto), any subletting of the Premises or any portion thereof,
including any such sublease executed solely by Facet (or any successor thereto),
or Lessor’s consent to any of the foregoing.  For the avoidance of doubt, the
preceding provisions regarding Facet’s exclusive right to exercise Lessee’s
rights under the Lease are distinguished from PDL’s and Facet’s liability to
perform Lessee’s obligations under the Lease, all of which obligations shall
remain, as set forth above, the joint and several obligations of PDL and Facet.

 

Notwithstanding the foregoing or anything to the contrary contained in any
subsequent amendment to the Lease executed by Lessor and Facet (or any successor
in interest thereto), in the event that Lessor and Lessee (acting through Facet
or any successor in interest thereto) amend the Lease to extend the term thereof
beyond the Current Expiration Date, PDL

 

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shall have no liability for any obligations of Lessee that shall accrue under
the Lease with respect to the period after the Current Expiration Date.

 

4.                                       Letter of Credit.

 

(a)                                  Replacement LOC.  Lessor currently holds in
its possession an unconditional, irrevocable letter of credit in the amount of
$1,500,000.00 (the “PDL LOC”), which was obtained by PDL for the benefit of
Lessor.  Within ten (10) business days following the Effective Date of this
Amendment, Facet shall deposit with Lessor a replacement letter of credit in the
amount of $3,000,000.00 (the “Replacement LOC”), which shall become the amount
of the Letter of Credit Security required to be maintained by Lessee pursuant to
the Lease for the balance of the term thereof.  The Replacement LOC shall be
from a bank acceptable to Lessor and otherwise in accordance with terms and
conditions of Section 4.06(a) of the Lease.  Simultaneously with the delivery of
the Replacement LOC to Lessor, Lessor shall relinquish and return the PDL LOC or
any balance thereof (without interest) to PDL.  Each reference to “Letter of
Credit” in the Lease shall be deemed a reference to the Replacement LOC as
defined herein.

 

(b)                                 Scheduled Reduction in Letter of Credit
Security.  Section 4.06(g) of the Lease, providing for a reduction in the amount
of the Letter of Credit Security, is deleted in its entirety.

 

5.                                       Insurance.  Within three (3) business
days following the Effective Date of this Amendment, Facet shall provide Lessor
with certificates of insurance evidencing, to Lessor’s satisfaction, the
maintenance by Facet of all insurance required to be maintained by Lessee under
Article VII of the Lease.  Such policies shall be endorsed to name PDL and
Lessor (and such other lenders, persons, firms, or corporations as are
designated by PDL or Lessor) as additional insureds, as their interests may
appear, consistent with the requirements of the Lease.  Facet shall maintain
such insurance throughout the term of the Lease.  So long as Facet maintains the
required insurance and so long as PDL does not occupy the Premises, PDL shall
not be required to maintain the insurance required by the Lease.

 

6.                                       Notices (Section 17.06):  From and
after the date of this Amendment, any notice (including, without limitation,
invoices and statements for amounts payable by Lessee pursuant to the Lease)
required or permitted to be given under the Lease to Lessee shall be addressed
to Lessee at the address noted below, and no separate notice need be given to
PDL:

 

Facet Biotech Corporation

1400 Seaport Boulevard

Redwood City, CA 94063

Attn:  General Counsel

 

7.                                       Option to Extend Deleted.  Effective as
of the Effective Date, Section 3.03 of the Lease is deleted in its entirety, and
Lessee shall have no right or option to extend the term of the Lease beyond the
Current Expiration Date.

 

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8.                                       Technical Corrections. Section 3.02 of
the Lease provides for acceleration of the Commencement Date under certain
circumstances in connection with the Openwave Sublease. On or about the date
hereof PDL and Facet have entered into an agreement whereby PDL has assigned all
of its right, title and interest in, to and under the Openwave Sublease to
Facet, and Facet has become the sublessee thereunder. Lessor has consented to
such assignment pursuant to that certain Amendment to Amended and Restated
Consent to Sublease dated on or about the date hereof by and among Lessor, PDL,
Facet and Openwave. The parties hereto acknowledge and agree that references in
Section 3.02 of the Lease to “Lessee”, in its capacity as sublessee under the
Openwave Sublease, shall be deemed references instead to Facet, in its capacity
as such sublessee, but the foregoing shall in no way affect the operation of
Section 3.02 of the Lease (which is hereby confirmed and ratified by the parties
hereto), and the Commencement Date shall remain subject to acceleration pursuant
to the terms thereof.

 

9.                                       Recording.  Lessor, PDL and Facet shall
execute, acknowledge, deliver and record a second amendment to the recorded
memorandum of the Lease in a form acceptable to all parties hereto to evidence
the terms of this Amendment.

 

10.                                 General Provisions.

 

(a)                                  The Lease, as amended by this Amendment,
continues in full force and effect and embodies the entire agreement between the
parties and supersedes all prior agreements and understandings relating to the
subject matter hereof.  The Lease may be further amended or supplemented only by
an instrument in writing executed by Lessor and Lessee (acting through Facet
alone (or any successor in interest thereto) as provided in Paragraph 3 above).
Subject to the provisions of the Lease restricting assignment or subletting by
Lessee, and subject to the provisions of Article XVI of the Lease, this
Amendment, and the Lease as amended hereby, shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.

 

(b)                                 This Amendment may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
such counterparts shall constitute one instrument.  To facilitate execution of
this Amendment, the parties may execute and exchange by facsimile or email
counterparts of the executed signature pages.

 

(c)                                  This Amendment and the rights of the
parties hereunder, including any claim or controversy arising out of or relating
to this Amendment, shall be governed by and interpreted in accordance with the
laws of the state of California without regard to conflict of law principles
that would result in the application of any law other than the law of the State
of California.

 

(d)                                 Each party hereto agrees to execute and
deliver such additional documents and do such other acts as may be necessary or
appropriate to fully implement the intent of this Amendment, as reasonably
requested by the other party.

 

(e)                                  Within ten (10) days after demand by
Lessor, and as a condition to the effectiveness of this Amendment, Lessee shall
reimburse Lessor for its reasonable attorneys’ and consultants’ fees and
expenses in connection with the preparation, negotiation and execution of

 

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this Amendment, as well as in connection with Lessor’s consideration and
analysis of PDL’s prior request to assign the Lease to Facet and Lessor’s review
and analysis of the information and documents submitted by PDL to Lessor in
connection therewith (dating back to PDL’s letter to Lessor dated July 18,
2008).

 

IN WITNESS HEREOF, the parties have caused this Amendment to be executed on the
date set forth above pursuant to proper authority duly granted.

 

LESSOR:

 

LESSEE (jointly and severally):

 

 

 

SRI EIGHT PACIFIC SHORES LLC,
a Delaware limited liability company

 

PDL BIOPHARMA, INC.,
a Delaware corporation

 

 

 

 

 

 

By:

/s/ Paul W. Grafft

 

By:

/s/ John McLaughlin

 

 

 

 

Name:

Paul W. Grafft

 

Name:

John McLaughlin

 

 

 

 

Title:

Vice President

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

 

 

FACET BIOTECH CORPORATION,
a Delaware corporation

 

 

 

 

 

 

 

 

By:

/s/ Faheem Hasnain

 

 

 

 

 

 

Name:

Faheem Hasnain

 

 

 

 

 

 

Title:

President and Chief Executive Officer

 

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