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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