Exhibit 10.2


 


Tax Sharing and Indemnification
Agreement


 


THIS TAX SHARING AND
INDEMNIFICATION AGREEMENT (the “Agreement”) dated as of [                ],
2008, is entered into by and between PDL BioPharma, Inc., a Delaware
corporation (“PDL”), and Facet Biotech Corporation, a Delaware
corporation (“Facet”) (each a “Party” and collectively, the “Parties”).  Capitalized terms used herein and not
otherwise defined shall have the respective meanings assigned to them in Article I
hereof.


 


Recitals


 


WHEREAS, PDL and Facet
have entered into a Separation and Distribution Agreement, dated as of [            ],
2008, (the “Separation Agreement”), relating to the separation by PDL of
its antibody humanization royalty business and biologics business into PDL and
Facet, respectively.


 


WHEREAS, Prior to the
separation, PDL will (i) transfer the Facet Assets (as defined below) to
Facet, a newly-created Delaware corporation, and Facet will assume the Facet
Liabilities (as defined below) in exchange for all of the issued and outstanding
shares of common stock of Facet (the “Contribution”), and (ii) distribute
on a pro rata basis all of the issued and outstanding shares of common stock of
Facet to the holders of PDL common stock (the “Distribution”).


 


WHEREAS, in connection
with the Contribution and the Distribution, the parties hereto wish to provide
for the payment of Taxes (as defined below) and entitlement to refunds thereof,
allocate responsibility and provide for cooperation in connection with the
filing of returns in respect of Taxes, and provide for certain other matters
relating to Taxes.


 


NOW, THEREFORE, in
consideration of the foregoing and the terms, conditions, covenants and
provisions of this Agreement, PDL and Facet mutually covenant and agree as
follows:


 


Article I


 


Definitions


 


1.1                                 “Code”
means the U.S. Internal Revenue Code of 1986, as amended.


 


1.2                                 “Contribution”
shall have the meaning the meaning set forth in the recitals hereto.


 


1.3                                 “Distribution
Date” shall have the meaning set forth in Section 1.21 of the Separation
Agreement.


 


1.4                                 “Distribution”
shall have the meaning set forth in the recitals hereto.


 


1.5                                 “Facet”
shall have the meaning set forth in the preamble hereto.


 

















 


1.6                                 “Facet
Assets” shall have the meaning set forth in Section 1.6 of the
Separation Agreement.


 


1.7                                 “Facet
Business” shall have the meaning set forth in Section 1.8 of
the Separation Agreement.


 


1.8                                 “Facet
Indemnitees” shall have the meaning set forth in Section 3.1 of
this Agreement.


 


1.9                                 “Facet
Liabilities” shall have the meaning set forth in Section 1.10
of the Separation Agreement.


 


1.10                           “Final
Determination” means any final determination of a liability in respect of
Taxes that, under applicable Tax Law, is no longer subject to further appeal,
review or modification through proceedings or otherwise (including the
expiration of the statute of limitations or a period for the filing of claims
for refunds, amended Tax Returns or appeals from adverse determinations).


 


1.11                           “Indemnitee”
means any Party entitled to indemnification pursuant to the provisions of this
Agreement.


 


1.12                           “Indemnifying
Party” means any Party required to provide indemnification pursuant to the
provisions of this Agreement.


 


1.13                           “IRS”
means the U.S. Internal Revenue Service or any successor thereto, including,
but not limited to its agents, representatives, and attorneys.


 


1.14                           “Law”
shall have the meaning set forth in Section 1.39 of the Separation
Agreement.


 


1.15                           “Party”
shall have the meaning set forth in the preamble hereto.


 


1.16                           “PDL”
shall have the meaning set forth in the preamble hereto.


 


1.17                           “PDL
Consolidated Group” means PDL and, with respect to the federal Taxes, the
other members of the affiliated group of corporations (within the meaning of Section 1504(a) of
the Code) of which PDL is the common parent, and with respect to state or local
Taxes, any other corporations with which PDL filed or files a consolidated,
combined or unitary Tax Return with PDL as the common parent.


 


1.18                           “PDL
Consolidated Return Period” means a taxable period that ends on or before,
or includes, the Distribution Date for which a consolidated, combined or
unitary (as applicable) federal, state or local Tax Return is filed or required
to be filed by the PDL Consolidated Group.


 


1.19                           “PDL
France” shall have the meaning set forth in Section 2.1(a) of
this Agreement.


 


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1.20                           “PDL
Indemnitees” shall have the meaning set forth in Section 3.2 of
this Agreement.


 


1.21                           “PDL
Returns” shall have the meaning set forth in Section 2.1(a) of
this Agreement.


 


1.22                           “PDL
Tax Liability” means the consolidated, combined or unitary Tax Liability of
the PDL Consolidated Group.


 


1.23                           “Person”
means any individual, partnership, joint venture, limited liability company,
corporation, association, joint stock company, trust, unincorporated
organization or similar entity or a governmental authority or any department or
agency or other unit thereof.


 


1.24                           “Post-Distribution
Taxable Period” means a taxable period (and in the case of a Straddle
Period, the portion of a taxable period) that, to the extent it relates to
Facet and its Subsidiaries, begins after midnight on the Distribution Date.


 


1.25                           “Pre-Distribution
Taxable Period” means a taxable period (and in the case of a Straddle
Period, the portion of a taxable period) ending on or before midnight on the
Distribution Date.


 


1.26                           “Proceeding”
means any audit or other examination, judicial or administrative proceeding
relating to liability for, or Refunds or adjustments with respect to, Taxes.


 


1.27                           “Refund”
means any refund of Taxes, including any reduction in Tax Liabilities by means
of a credit, offset, use of an overpayment or otherwise.


 


1.28                           “Straddle
Period” means any taxable period that begins on or before and ends after
the Distribution Date.


 


1.29                           “Subsidiary”
shall have the meaning set forth in Section 1.59 of the Separation
Agreement.


 


1.30                           “Tax”
means any tax, charge, fee, impost, levy or other assessment imposed by any
federal, state, local or foreign Taxing Authority, including, but not limited
to, income, gross receipts, excise, property, sales, use, license, capital
stock, transfer, franchise, payroll, withholding, social security, value added
and other taxes, and any interest, penalties or additions attributable thereto.


 


1.31                           “Tax
Item” means any item of income, gain, loss, deduction or credit or other
attribute that may have the effect of increasing or decreasing any Tax.


 


1.32                           “Tax
Liability” means all liabilities for Taxes.


 


1.33                           “Tax
Return” means any return, report, certificate, filing, statement,
questionnaire, declaration, form or similar statement or document (including
any related


 


3

















 


or supporting information or schedule attached thereto
and any information return, amended tax return, claim for refund or declaration
of estimated tax) required to be supplied to, or filed with, a Taxing Authority
or jurisdiction (foreign or domestic) in connection with the determination,
assessment or collection of any Tax or the administration of any Laws, regulations
or administrative requirements relating to any Tax.


 


1.34                           “Taxing
Authority” means any governmental authority or any subdivision, agency,
commission or authority thereof or any quasi-governmental or private body,
whether domestic or foreign, having jurisdiction over the assessment,
determination, collection or imposition of any Tax (including the IRS).


 


1.35                           “Treasury
Regulation” means the final and temporary (but not proposed) income tax
regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).


 


Article II


 


Preparation
and Filing of Tax Returns; Payment of Tax


 


2.1                                 Tax
Returns of PDL.


 


(a)                                  Except
as provided herein, PDL shall have sole and exclusive responsibility for the
preparation and filing, on a timely basis of all Tax Returns (the “PDL
Returns”) for any taxable period that ends on or before the Distribution
Date as are required to be filed of (i) PDL, which for the avoidance of
doubt, includes the Facet Business prior to the Distribution Date, (ii) each
member of the PDL Consolidated Group and (iii) PDL BioPharma France
S.A.S., (“PDL France”).  PDL shall
have the right to: determine the manner in which all such returns shall be
filed; make any elections in connection with any such returns; contest,
compromise and settle any adjustments of deficiency proposed, asserted or
assessed in connection with any such returns; file, pursue, compromise or
settle any claim for refund; and determine whether any refunds to which PDL is
entitled shall be paid by way of a refund or credit.


 


(b)                                 To
the extent an election, return position, or amendment to a Tax Return filed by
PDL or a member of the PDL Consolidated Group relates to an item of income,
gain, loss or deduction of Facet, the Facet Business or PDL France accruing in
a Post-Distribution Taxable Period, Facet and PDL shall cooperate with each
other reasonably and in good faith to determine a mutually acceptable election,
return position, or amendment to such Tax Return.  Notwithstanding the foregoing, if such
election, return position, or amendment to such Tax Return solely affects
Facet, the Facet Business or PDL France, such election, return position, or
amendment to such Tax Return shall be determined by Facet in its sole
discretion, reasonably and in good faith.


 


(c)                                  Facet
shall prepare and file all Tax Returns for all Straddle Periods (i) of PDL
France and (ii) that include solely Facet or the Facet Business.  PDL and Facet shall execute such consents,
elections and other documents as may be required to provide for the proper
filing of each Tax Return relating to a Straddle Period.


 


4

















 


2.2                                 Tax
Liability.


 


(a)                                  PDL
shall be liable for all Taxes due in respect of all PDL Returns and all Taxes
imposed on or with respect to PDL or any of its Subsidiaries (including,
without limitation, Facet, the Facet Business and PDL France) for all
Pre-Distribution Taxable Periods.


 


(b)                                 Facet
shall be liable for all Taxes of Facet, PDL France or relating to the Facet
Business due in respect of all Post-Distribution Taxable Periods.


 


(c)                                  For
purposes of this Section 2.2, any Tax Liability for a Straddle
Period shall be apportioned between the portion of the taxable period ending on
the Distribution Date and the portion of the taxable period beginning after the
Distribution Date.  Such apportionments
shall be made on a per diem basis for (i) real and personal property Taxes
and similar Taxes, including Taxes based on net-worth capital, intangibles or
similar items, and (ii) exemptions, allowances or deductions that are
calculated on an annual basis (such as the deduction for depreciation).  Such apportionment shall be made for all
other Taxes on the basis of a “closing of the books” as of the end of the day
of the Distribution Date.


 


Article III


 


Indemnification for Taxes


 


3.1                                 Indemnification
by PDL.  Except as otherwise provided
in this Article III, PDL shall indemnify and hold Facet and PDL
France and their successors and assigns (collectively, the “Facet
Indemnitees”) harmless from and against (i) the PDL Tax Liability,
including any Taxes that are imposed on PDL, any member of the PDL Consolidated
Group, Facet or PDL France as a result (in whole or in part) of the
Contribution or Distribution, (ii) any Tax Liability for Taxes as a result
of Treasury Regulation Section 1.1502-6 or any analogous or similar
provision under state or local Law or regulation, of any Person which is or has
ever been a member of the PDL Consolidated Group, (iii) all Tax
Liabilities that PDL is required to pay under Article II hereof and
(iv) any costs and expenses related to any of the foregoing (including,
without limitation, reasonable legal, accounting, appraisal, consulting or
similar fees and expenses), provided, however, that this Section 3.1
shall not apply to any portion of the Tax Liability of Facet described in Section 3.2.  For the avoidance of doubt, PDL shall not be
required to indemnify or otherwise compensate Facet for any net
operating losses, credits, refunds, deductions, depreciation, amortization,
allowance or other tax items accrued by Facet or the Facet
Business in the Pre- Distribution Taxable Period whether or not such
tax item is used to reduce or offset a Tax Liability of PDL.


 


3.2                                 Indemnification
by Facet.  Except as otherwise
provided in this Article III, Facet shall indemnify and hold each
member of the PDL Consolidated Group (other than Facet, if applicable) and
their successors and assigns (collectively, the “PDL Indemnitees”) harmless
from and against (i) all Tax Liabilities that Facet is required to pay
under Article II and (ii) any costs and expenses related to
Tax Liabilities described in


 


5

















 


clause (i) (including, without limitation,
reasonable legal, accounting, appraisal, consulting or similar fees and
expenses).


 


3.3                                 Indemnification
Payments.  PDL and Facet agree that
any indemnification payment made pursuant to this Article III or Article V
of the Separation Agreement, shall be paid free and clear of any Tax deduction
or withholding.  If any deduction or
withholding is required by applicable Law to be made from any indemnification
payment made pursuant to this Article III or Article V
of the Separation Agreement, the amount of the payment will be increased by
such additional amount as is necessary to ensure that the net amount received
by the Indemnitee (after taking account of all such deductions and
withholdings) is equal to the amount which it would have received had the payment
in question not been subject to any deductions or withholdings.  Notwithstanding the foregoing, the Parties
agree to use commercially reasonable efforts (to the extent such efforts will
not result in materially adverse consequences to a Party) to mitigate or avoid
such deductions and withholdings.


 


Article IV


 


Tax Contests


 


4.1                                 Notification.  Facet shall promptly upon receipt of notice
thereof notify PDL in writing of any communication with respect to any pending
or threatened Proceeding in connection with a Tax Liability (or an issue
related thereto) for which PDL may be responsible pursuant to this
Agreement.  Facet shall include with such
notification (and thereafter provide to PDL) a true, correct and complete copy
of any written communication, and an accurate and complete written summary of
any oral communication, received by Facet with respect to any such
Proceeding.  The failure of Facet to
timely forward such notification or further communication in accordance with
the immediately preceding sentence shall not relieve PDL of its obligation to
pay such Tax Liability or indemnify Facet therefor, except and to the extent
that the failure to timely forward such notification or further communication
actually prejudices the ability of PDL to contest such Tax Liability or
increases the amount of such Tax Liability. 
Similarly, PDL shall promptly upon receipt of notice thereof notify
Facet in writing of any communication with respect to any pending or threatened
Proceeding in connection with a Tax Liability (or an issue related thereto) for
which Facet may be responsible pursuant to this Agreement.  PDL shall include with such notification (and
thereafter provide to Facet) a true, correct and complete copy of any written communication,
and an accurate and complete written summary of any oral communication,
received by PDL with respect to any such Proceeding.  The failure of PDL to timely forward such
notification or further communication in accordance with the immediately preceding
sentence shall not relieve Facet of its obligation to pay such Tax Liability or
indemnify PDL therefor, except and to the extent that the failure to timely
forward such notification or further communication actually prejudices the
ability of Facet to contest such Tax Liability or increases the amount of such
Tax Liability.


 


6

















 


4.2                                 Proceedings
Involving PDL.  Except as limited in Section 4.2(a),
(b), and (c), PDL (or such member of the PDL Consolidated Group
as PDL shall designate) shall be entitled to control, settle, contest and
designate counsel with respect to any Proceeding with respect to a Tax Return
filed by PDL or a member of the PDL Consolidated Group or which Proceeding
relates to items for which PDL is responsible hereunder, and PDL shall have the
right to resolve any such Proceeding in its sole discretion.


 


(a)                                  PDL
shall allow Facet and its counsel to participate at its own expense in any
Proceeding relating to a Tax Return filed for a PDL Consolidated Return Period,
solely to the extent that such Proceeding relates to Tax for which Facet would
be liable under Section 2.2.


 


(b)                                 Facet
shall be entitled to control, settle, contest and designate counsel with
respect to any Proceeding with respect to a Tax Return that includes solely Facet
or PDL France and relates solely to items for which Facet is responsible
hereunder, and Facet shall have the right to resolve any such Proceedings in
its sole discretion.


 


(c)                                  Facet
shall allow PDL and its counsel to participate at its own expense in any
Proceeding relating to a Tax Return filed by Facet, to the extent that such
Proceeding relates to Tax for which PDL would be liable under this Agreement.


 


Article V


 


Refunds and Tax Sharing Agreements


 


5.1                                 Refunds.  Except as set forth in this Section 5.1,
PDL shall be entitled to all Refunds (and any interest thereon received from
the applicable Taxing Authority) in respect of Taxes for all PDL Returns or
Taxes which relate to items for which a member of the PDL Consolidated Group is
responsible hereunder.  Facet shall be
entitled to all Refunds (and any interest thereon received from the applicable
Taxing Authority) in respect of Taxes paid by Facet and PDL France for all
Post-Distribution Taxable Periods.  A
party receiving a Refund to which another party is entitled, in whole or in
part, pursuant to this Section 5.1 shall pay the amount to which
such other party is entitled within ten (10) days after such Refund is
received or used, as the case may be. 
PDL shall be permitted to file, and Facet shall fully cooperate with PDL
in connection with, any claim for Refund in respect of a Tax for which any
member of the PDL Consolidated Group is responsible hereunder.


 


5.2                                 Tax
Sharing Agreements.  Any tax sharing
agreement (other than this Agreement) that includes any member of the PDL
Consolidated Group, on the one hand, and Facet on the other hand shall be
terminated as of the Distribution Date and will have no further effect for any
taxable year (whether the current year, a future year, or a past year).


 


5.3                                 Compensation
Deductions.  PDL (or the appropriate
member of the PDL Consolidated Group) shall claim all Tax deductions arising by
reason of the exercise of options on, or receipt or vesting of restricted
shares of, PDL stock.


 


7

















 


Article VI


 


Cooperation and Exchange of Information


 


6.1                                 Cooperation
and Exchange of Information.


 


(a)                                  Facet,
on behalf of itself and each of its affiliates, agrees to provide PDL (or its
designee), at PDL’s expense, with such cooperation or information as PDL (or
its designee) reasonably shall request in connection with the determination of
any other calculations described in this Agreement, the preparation or filing
of any Tax Return or claim for Refund, or the conduct of any Proceeding.  Such cooperation and information shall
include, without limitation, (i) promptly forwarding copies of appropriate
notices and forms or other communications (including, without limitation,
information document requests, revenue agent reports and similar reports,
notices of proposed adjustments and notices of deficiency) received from or
sent to any Taxing Authority or any other administrative, judicial or
governmental authority, (ii) upon reasonable notice, providing copies of
all relevant Tax Returns, together with accompanying schedules and related
workpapers, documents relating to rulings or other determinations by taxing
authorities, and such other records concerning the ownership and tax basis of
property, or other relevant information that Facet or its affiliates may
possess, (iii) upon reasonable notice, providing of such additional
information and explanations of documents and information provided under this
Agreement (including statements, certificates and schedules delivered by either
party) as shall be reasonably requested by PDL (or its designee), (iv) upon
reasonable notice, the providing of any document that may be necessary or
reasonably helpful in connection with the filing of a Tax Return, a claim for a
Refund, or in connection with any Proceeding, including such waivers, consents
or powers of attorney as may be necessary for PDL to exercise its rights under
this Agreement, and (v) upon reasonable notice, using reasonable efforts
to obtain any documentation from a governmental authority or a third party that
may be necessary or reasonably helpful in connection with any of the foregoing.
Upon reasonable notice, Facet shall make its, or shall cause its affiliates to
make their, employees and facilities available on a mutually convenient basis
to provide explanation of any documents or information provided hereunder.  Any information obtained under this Section 6.1(a) shall
be kept confidential, except as otherwise reasonably may be necessary in
connection with the filing of Tax Returns or claims for Refund or in conducting
any Proceeding.


 


(b)                                 PDL,
on behalf of itself and each member of the PDL Consolidated Group (including
Facet), agrees to provide Facet (or its designee) with such cooperation or
information as Facet (or its designee), at Facet’s expense, reasonably shall
request in connection with the determination of any other calculations
described in this Agreement, the preparation or filing of any Tax Return or
claim for Refund, or the conduct of any Proceeding.  Such cooperation and information shall
include, without limitation and upon reasonable notice, promptly forwarding
copies of appropriate notices and forms or other communications (including,
without limitation, information document requests, revenue agent’s reports and
similar reports, notices of proposed adjustments and notices of deficiency)
received from or sent to any Taxing Authority or any other administrative,


 


8

















 


judicial or
governmental authority, (ii) upon reasonable notice, providing copies of
all relevant Tax Returns, together with accompanying schedules and related
workpapers, documents relating to rulings or other determinations by taxing
authorities, and such other records concerning the ownership and tax basis of
property, or other relevant information that PDL or any member of the PDL
Consolidated Group may possess, (iii) upon reasonable notice, the
provision of such additional information and explanations of documents and
information provided under this Agreement (including statements, certificates
and schedules delivered by either party) as shall be reasonably requested by
Facet (or its designee), (iv) upon reasonable notice, the providing of any
document that may be necessary or reasonably helpful in connection with the
filing of a Tax Return, a claim for a Refund, or in connection with any
Proceeding, including such waivers, consents or powers of attorney as may be
necessary for Facet to exercise its rights under this Agreement, and (v) the
use of PDL’s reasonable efforts to obtain any documentation from a governmental
authority or a third party that may be necessary or reasonably helpful in
connection with any of the foregoing. Upon reasonable notice, PDL shall make,
or shall cause each member of the PDL Consolidated Group to make, its employees
and facilities available on a mutually convenient basis to provide explanation
of any documents or information provided hereunder.  Any information obtained under this Section 6.1(b) shall
be kept confidential, except as otherwise reasonably may be necessary in
connection with the filing of Tax Returns or claims for Refund or in conducting
any Proceeding.


 


6.2                                 Retention
of Records.  Facet and PDL agree to
retain all Tax Returns, related schedules and workpapers, and all material
records and other documents as required under Code Section 6001 and the
Treasury Regulations promulgated thereunder (and any similar provision of
state, local, or foreign Tax Law) existing on the date hereof or created in
respect of (i) any taxable period that ends on or before or includes the
Distribution Date or (ii) any taxable period that may be subject to a
claim hereunder, in each case until the later of (x) the expiration of the
statute of limitations (including extensions) for the taxable periods to which
such Tax Returns and other documents relate and (y) the Final
Determination of any payments that may be required in respect of such taxable
periods under this Agreement.  From and
after the end of the period described in the preceding sentence of this Section 6.2,
if Facet wishes to dispose of any such records and documents, then Facet shall
provide written notice thereof to PDL and shall provide PDL the opportunity to
take possession of any such records and documents within ninety (90) days after
such notice is delivered; provided, however, that if PDL does not, within such
ninety (90) day period, confirm its intention to take possession of such
records and documents, Facet may destroy or otherwise dispose of such records
and documents.  From and after the end of
the period described above in this Section 6.2, if PDL wishes to
dispose of any such records and documents, then PDL shall provide written
notice thereof to Facet and shall provide Facet the opportunity to take
possession of any such records and documents within ninety (90) days after such
notice is delivered; provided, however, that if Facet does not, within such
ninety (90) day period, confirm its intention to take possession of such
records and documents, PDL may destroy or otherwise dispose of such records and
documents.


 


9

















 


Article VII


 


Payments


 


7.1                                 Method
of Payment.  All payments required by
this Agreement shall be made by (a) wire transfer to the appropriate bank
account as may from time to time be designated by the parties for such purpose;
provided that, on the date of such wire transfer, notice of the transfer is
given to the recipient thereof in accordance with Section 8.4, or (b) any
other method agreed to by the parties. 
All payments due under this Agreement shall be deemed to be paid when
available funds are actually received by the payee.


 


7.2                                 Interest.  Any payment required by this Agreement that
is not made on or before the date required hereunder shall bear interest, from
and after such date through the date of payment, at the underpayment rate as in
effect at such time under Section 6621 of the Code.


 


7.3                                 Characterization
of Payments.  For all tax purposes,
the parties hereto agree to treat, and to cause their respective affiliates to
treat, (i) any payment required by this Agreement as a contribution by PDL
to Facet or distribution from Facet to PDL, as the case may be, occurring
immediately prior to the Distribution and (ii) any payment of interest or
non-federal Taxes by or to a Taxing Authority, as taxable to or deductible by,
as the case may be, the party entitled under this Agreement to receive such
payment or required under this Agreement to make such payment, in either case
except as otherwise mandated by applicable Law. 
In the event it is determined as a result of a Final Determination that
any treatment described under clause (i) or (ii) hereof is not
permissible, the payment in question shall be adjusted to place the parties in
the same after-tax position they would have enjoyed absent such Final
Determination.


 


7.4                                 Time
of Indemnification Payment.  To the
extent an indemnification obligation arises, the Indemnitee shall, upon at
least ten (10) days’ prior notice, make payment pursuant to such
indemnification obligation no later than five (5) days prior to the date
the Indemnitee makes a payment of Taxes, interest, or penalties with respect to
such Tax Liability, including a proposed adjustment of Taxes or an assessment
of Tax deficiency asserted or made by any Taxing Authority that is premised in
whole or part on such Tax Liability, or a payment made in settlement of an
asserted Tax deficiency.


 


Article VIII


 


Miscellaneous Provisions


 


8.1                                 Governing
Law; Jurisdiction.  This Agreement
shall be deemed to have been made in the State of [Delaware] and its form,
execution, validity, construction and effect shall be determined in accordance
with the Laws of the State of [Delaware], without giving effect to the
principles of conflicts of Law thereof.


 


10

















 


8.2                                 Assignability.  The provisions of this Agreement and the
obligations and rights hereunder shall be binding upon, inure to the benefit of
and be enforceable by (and against) the Parties and their respective successors
and permitted transferees and assigns. 
Notwithstanding the foregoing, this Agreement shall not be assignable,
in whole or in part, by any Party without the prior written consent of the
other Party, and any attempt to assign any rights or obligations arising under
this Agreement without such consent shall be null and void; provided,
that (i) a Party may assign this Agreement in connection with a merger
transaction in which such Party is not the surviving entity or the sale by such
Party of all or substantially all of its assets, and upon the effectiveness of
such assignment the assigning Party shall be released from all of its
obligations under this Agreement if the surviving entity of such merger or the
transferee of such assets shall agree in writing, in form and substance
reasonably satisfactory to the other Party, to be bound by all terms of this
Agreement as if named as a “Party” hereto.


 


8.3                                 Third
Party Beneficiaries.  Except for the
indemnification rights under this Agreement of any PDL Indemnitee or Facet
Indemnitee in their respective capacities as such, (i) the provisions of
this Agreement are solely for the benefit of the Parties and are not intended
to confer upon any Person except the Parties any rights or remedies hereunder,
and (ii) there are no third party beneficiaries of this Agreement and this
Agreement shall not provide any third party with any remedy, claim, liability,
reimbursement, claim of action or other right in excess of those existing
without reference to this Agreement.


 


8.4                                 Notices.  All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed effectively
given:  (i) upon personal delivery
to the party to be notified, (ii) when sent by confirmed facsimile, (iii) five
(5) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. 
All communications shall be sent to the respective parties at the
addresses set forth below (or at such other addresses as shall be specified by
notice given in accordance with this Section):


 


If to PDL, to:                                                                                                                            PDL
BioPharma, Inc.

Attention: General Counsel

1400 Seaport Boulevard

Redwood City, CA  94063

Facsimile: 650-454-1468


 


with a copy to:                                                                                                                 Shearman & Sterling LLP


(not to constitute
notice)                                                           Attention: Peter Lyon

599 Lexington Avenue

New York, New York 10022

Facsimile: 212-848-7179


 


If to Facet, to:                                                                                                                      Facet
Biotech Corporation

Attention: General Counsel

1400 Seaport Boulevard

Redwood City, CA  94063

Facsimile: 650-454-1468


 


11

















 


	
  with
  a copy to:

  	
   

  	
  DLA Piper US LLP

  
	
  (not
  to constitute notice)

  	
   

  	
  Attention:
  Howard Clowes

  
	
   

  	
   

  	
  153 Townsend
  Street, Suite 800

  
	
   

  	
   

  	
  San Francisco,
  CA 94107-1957

  
	
   

  	
   

  	
  Facsimile: 415-
  659-7410

  



 


8.5                                 Severability.  If any provision of this Agreement or the
application thereof to any Person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof or thereof, or the application of such provision to Persons
or circumstances or in jurisdictions other than those as to which it has been
held invalid or unenforceable, shall remain in full force and effect and shall
in no way be affected, impaired or invalidated thereby, so long as the economic
or legal substance of the transactions contemplated hereby or thereby, as the
case may be, is not affected in any manner adverse to any Party. Upon such
determination, the Parties shall negotiate in good faith in an effort to agree
upon such a suitable and equitable provision to affect the original intent of
the Parties.


 


8.6                                 Waivers
of Default.  The failure of either
Party to require strict performance by the other Party of any provision in this
Agreement will not waive or diminish such Party’s right to demand strict
performance thereafter of that or any other provision hereof.


 


8.7                                 Amendments.  This Agreement may not be modified or amended
except by an agreement in writing signed by each of the Parties.


 


8.8                                 Construction.


 


(a)                                  This
Agreement has been prepared jointly and shall not be strictly construed against
either Party.


 


(b)                                 For
purposes of this Agreement, whenever the context requires:  the singular number shall include the plural,
and vice versa; the masculine gender shall include the feminine and neuter
genders; the feminine gender shall include the masculine and neuter genders;
and the neuter gender shall include the masculine and feminine genders.


 


(c)                                  Except
as otherwise indicated, all references in this Agreement to “Articles,” “Sections,”
“Exhibits” and “Attachments” are intended to refer to Articles, Sections,
Exhibits and Attachments to this Agreement.


 


(d)                                 The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.


 


12

















 


8.9                                 Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument. 
Any executed counterpart delivered by facsimile or other means of
electronic transmission shall be deemed an original for all purposes.


 


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IN WITNESS WHEREOF, the Parties have caused this Tax
Sharing and Indemnification Agreement to be executed by their duly authorized
representatives as of the day and year first above written.


 


 


	
   

  	
  PDL
  BioPharma, Inc.,

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Facet
  Biotech Corporation,

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: