Document:

Exhibit 10.6

 

Indemnity
Agreement

 

THIS
INDEMNITY AGREEMENT (this
“Agreement”) dated as of August 19,
2008, is made by and between CARDIONET, INC., a
Delaware corporation (the “Company”), and KIRK E. GORMAN (“Indemnitee”).

 

RECITALS

 

A.                                    The Company desires to attract and retain
the services of highly qualified individuals as directors, officers, employees
and agents.

 

B.                                    The Company’s Amended and Restated Bylaws
(the “Bylaws”) require that the Company
indemnify its directors and officers, and empowers the Company to indemnify its  employees and agents, as authorized by the Delaware General
Corporation Law, as amended (the “Code”), under
which the Company is organized and such Bylaws expressly provide that the
indemnification provided therein is not exclusive and contemplates that the
Company may enter into separate agreements with its directors, officers and
other persons to set forth specific indemnification provisions.

 

C.                                    Indemnitee does not regard the protection
currently provided by applicable law, the Company’s governing documents and
available insurance as adequate under the present circumstances, and the
Company has determined that Indemnitee and other directors, officers, employees
and agents of the Company may not be willing to serve or continue to serve in
such capacities without additional protection.

 

D.                                    The Company desires and has requested
Indemnitee to serve or continue to serve as a director, officer, employee or
agent of the Company, as the case may be, and has proferred this Agreement to
Indemnitee as an additional inducement to serve in such capacity.

 

E.                                      Indemnitee is willing to serve, or to
continue to serve, as a director, officer, employee or agent of the Company, as
the case may be, if Indemnitee is furnished the indemnity provided for herein
by the Company.

 

AGREEMENT

 

NOW
THEREFORE, in
consideration of the mutual covenants and agreements set forth herein, the
parties hereto, intending to be legally bound, hereby agree as follows:

 

1.                                      Definitions.

 

(a)                                  Agent. 
For purposes of this Agreement, the term “agent” of the Company means
any person who:  (i) is or was a
director,  officer, employee or other fiduciary
of the Company, a subsidiary of the Company or an employee benefit plan of the
Company or a subsidiary of the Company; or (ii) is or was serving at the
request or for the convenience of, or representing the interests of, the
Company or a subsidiary of the Company, as a director, officer, employee or
other fiduciary of a foreign or domestic corporation, partnership,  joint venture, trust or other enterprise.

 

(b)                                  Expenses. 
For purposes of this Agreement, the term “expenses” shall be broadly
construed and shall include, without limitation, all direct and indirect costs
of any type or nature whatsoever (including, without limitation, all attorneys’,
witness, or other professional fees and related disbursements, premiums,
security for and other costs relating to any bonds and other out-of-pocket
costs of whatever nature), actually and reasonably incurred by Indemnitee in
connection with the investigation, defense or appeal of a proceeding or
establishing or enforcing a right to indemnification under this Agreement, the
Code or otherwise, and amounts paid in settlement by or on behalf of
Indemnitee, but shall not include any judgments, fines or penalties actually
levied against Indemnitee for such individual’s violations of law.  The term “expenses” shall also include
reasonable compensation for time spent by Indemnitee for which he is not
compensated by the Company or any subsidiary or third party (i) for any
period during which Indemnitee is not an agent, in the employment of, or
providing services for compensation to, the Company or any subsidiary; and (ii) if
the rate of compensation and estimated time involved is approved by the
directors of the Company who are not parties to any action with respect to
which expenses are incurred, for Indemnitee while an agent of, employed by, or
providing services for compensation to, the Company or any subsidiary.

 

1

 

(c)                                  Proceeding. 
For purposes of this Agreement, the term “proceeding” shall be broadly
construed and shall include, without limitation, any threatened, pending, or
completed action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened
or completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, and whether formal or informal in any case, in which Indemnitee was, is
or will be involved as a party or otherwise by reason of:  (i) the fact that Indemnitee is or was a
director or officer of the Company; (ii) the fact that any action taken by
Indemnitee or of any action on Indemnitee’s part while acting as director,
officer, employee or agent of the Company; or (iii) the fact that
Indemnitee is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, and in any such case
described above, whether or not serving in any such capacity at the time any
liability or expense is incurred for which indemnification, reimbursement, or
advancement of expenses may be provided under this Agreement.

 

(d)                                  Subsidiary. 
For purposes of this Agreement, the term “subsidiary” means any
corporation or limited liability company of which more than 20% of the
outstanding voting securities or equity interests are owned, directly or
indirectly, by the Company and one or more of its subsidiaries, and any other
corporation, limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise of which Indemnitee is or was serving
at the request of the Company as a director, officer, employee, agent or
fiduciary.

 

(e)                                  Independent Counsel. 
For purposes of this Agreement, the term “independent counsel” means a
law firm, or a partner (or, if applicable, member) of such a law firm, that is
experienced in matters of corporation law and neither presently is, nor in the
past five (5) years has been, retained to represent: (i) the Company
or Indemnitee in any matter material to either such party, or (ii) any
other party to the proceeding giving rise to a claim for indemnification
hereunder.  Notwithstanding the
foregoing, the term “independent counsel” shall not include any person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee’s rights under this Agreement.

 

2.                                      Consideration. The Company acknowledges that it has
entered into this Agreement and assumes the obligations imposed on it hereby,
in addition to and separate from its obligations to Indemnitee under the
Bylaws, to induce Indemnitee to serve, or continue to serve, as a director,  officer, employee or agent of the Company, and the Company
acknowledges that Indemnitee is relying upon this Agreement in serving as a
director, officer, employee or agent of the Company.

 

3.                                      Indemnification.

 

(a)                                  Indemnification in Third Party
Proceedings.  Subject to Section 10 below, the Company
shall indemnify Indemnitee, if Indemnitee is a party to or threatened to be
made a party to or otherwise involved in any proceeding, for any and all
expenses, actually and reasonably incurred by Indemnitee in connection with the
investigation, defense, settlement or appeal of such proceeding.

 

(b)                                  Indemnification in Derivative
Actions and Direct Actions by the Company.  Subject to Section 10
below, the Company shall indemnify Indemnitee, if Indemnitee is a party to or
threatened to be made a party to or otherwise involved in any proceeding by or
in the right of the Company to procure a judgment in its favor, against any and
all expenses actually and reasonably incurred by Indemnitee in connection with
the investigation, defense, settlement, or appeal of such proceedings.

 

4.                                      Indemnification of Expenses of
Successful Party.  Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee has been successful on the merits or
otherwise in defense of any proceeding or in defense of any claim, issue or
matter therein, including the dismissal of any action without prejudice, the Company
shall indemnify Indemnitee against all expenses actually and reasonably
incurred in connection with the investigation, defense or appeal of such
proceeding.

 

5.                                      Partial Indemnification. 
If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of any expenses actually
and reasonably incurred by 

 

2

 

Indemnitee in the
investigation, defense, settlement or appeal of a proceeding, but is precluded
by applicable law or the specific terms of this Agreement to indemnification
for the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion thereof to which Indemnitee is entitled.

 

6.                                      Advancement of Expenses. 
To the extent not prohibited by law, the Company shall advance  the expenses incurred by Indemnitee in
connection with any proceeding, and such advancement shall be made within
twenty (20) days after the receipt by the Company of a statement or statements
requesting such advances (which shall include invoices received by Indemnitee
in connection with such expenses but, in the case of invoices in connection
with legal services, any references to legal work performed or to expenditures
made that would cause Indemnitee to waive any privilege accorded by applicable
law shall not be included with the invoice) and upon request of the Company, an
undertaking to repay the advancement of expenses if and to the extent that it
is ultimately determined by a court of competent jurisdiction in a final
judgment, not subject to appeal, that Indemnitee is not entitled to be
indemnified by the Company.  Advances
shall be unsecured, interest free and without regard to Indemnitee’s ability to
repay the expenses. Advances shall include any and all expenses actually and
reasonably incurred by Indemnitee pursuing an action to enforce Indemnitee’s
right to indemnification under this Agreement, or otherwise and this right of
advancement, including expenses incurred preparing and forwarding statements to
the Company to support the advances claimed. 
Indemnitee acknowledges that the execution and delivery of this
Agreement shall constitute an undertaking providing that Indemnitee shall, to
the fullest extent required by law, repay the advance if and to the extent that
it is ultimately determined by a court of competent jurisdiction in a final
judgment, not subject to appeal, that Indemnitee is not entitled to be
indemnified by the Company.  The right to
advances under this Section shall continue until final disposition of any
proceeding, including any appeal therein. 
This Section 6 shall not apply to any claim made by Indemnitee for
which indemnity is excluded pursuant to Section 10(b).

 

7.                                      Notice and Other Indemnification
Procedures.

 

(a)                                  Notification of Proceeding. 
Indemnitee will notify the Company in writing promptly upon being served
with any summons, citation, subpoena, complaint, indictment, information or
other document relating to any proceeding or matter which may be subject to
indemnification or advancement of expenses covered hereunder.  The failure of Indemnitee to so notify the
Company shall not relieve the Company of any obligation which it may have to
Indemnitee under this Agreement or otherwise.

 

(b)                                  Request for Indemnification and
Indemnification Payments.  Indemnitee shall notify the
Company promptly in writing upon receiving notice of any demand, judgment or
other requirement for payment that Indemnitee reasonably believes to be subject
to indemnification under the terms of this Agreement, and shall request payment
thereof by the Company.  Indemnification
payments requested by Indemnitee under Section 3 hereof shall be made by
the Company no later than sixty (60) days after receipt of the written request
of Indemnitee.  Claims for advancement of
expenses shall be made under the provisions of Section 6 herein.

 

(c)                                  Application for Enforcement. 
In the event the Company fails to make timely payments as set forth in
Sections 6 or 7(b) above, Indemnitee shall have the right to apply to any
court of competent jurisdiction for the purpose of enforcing Indemnitee’s right
to indemnification or advancement of expenses pursuant to this Agreement.  In such an enforcement hearing or proceeding,
the burden of proof shall be on the Company to prove that indemnification or
advancement of expenses to Indemnitee is not required under this Agreement or
permitted by applicable law.  Any
determination by the Company (including its Board of Directors, stockholders or
independent counsel) that Indemnitee is not entitled to indemnification
hereunder, shall not be a defense by the Company to the action nor create any
presumption that Indemnitee is not entitled to indemnification or advancement
of expenses hereunder.

 

(d)                                  Indemnification of Certain Expenses. 
The Company shall indemnify Indemnitee against all expenses incurred in
connection with any hearing or proceeding under this Section 7 unless the
Company prevails in such hearing or proceeding on the merits in all material
respects.

 

8.                                      Assumption of Defense. 
In the event the Company shall be requested by Indemnitee to pay the
expenses of any proceeding, the Company, if appropriate, shall be entitled to
assume the defense of such proceeding, or to participate to the extent
permissible in such proceeding, with counsel reasonably acceptable to
Indemnitee.

 

3

 

Upon assumption of the
defense by the Company and the retention of such counsel by the Company, the
Company shall not be liable to Indemnitee under this Agreement for any fees of
counsel subsequently incurred by Indemnitee with respect to the same
proceeding, provided that Indemnitee shall have the right to employ separate
counsel in such proceeding at Indemnitee’s sole cost and expense.  Notwithstanding the foregoing, if Indemnitee’s
counsel delivers a written notice to the Company stating that such counsel has
reasonably concluded that there is an actual or potential conflict of interest
between the Company and Indemnitee in the conduct of any such defense or the
Company shall not, in fact, have employed counsel or otherwise actively pursued
the defense of such proceeding within a reasonable time, then in any such event
the fees and expenses of Indemnitee’s counsel to defend such proceeding shall
be subject to the indemnification and advancement of expenses provisions of
this Agreement.

 

9.                                      Insurance. To the extent that the Company maintains
an insurance policy or policies providing liability insurance for directors,
officers, employees, or agents of the Company or of any subsidiary (“D&O
Insurance”), Indemnitee shall be covered by such policy or policies in
accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee or agent under such policy
or policies.  If, at the time of the
receipt of a notice of a claim pursuant to the terms hereof, the Company has
D&O Insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the procedures
set forth in the respective policies. 
The Company shall thereafter take all necessary or desirable action to
cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a
result of such proceeding in accordance with the terms of such policies.

 

10.                               Exceptions.

 

(a)                                  Certain Matters. 
Any provision herein to the contrary notwithstanding, the Company shall
not be obligated pursuant to the terms of this Agreement to indemnify
Indemnitee on account of any proceeding with respect to (i) remuneration
paid to Indemnitee if it is determined by final judgment or other final
adjudication that such remuneration was in violation of law (and, in this
respect, both the Company and Indemnitee have been advised that the Securities
and Exchange Commission believes that indemnification for liabilities arising
under the federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication, as indicated in Section 10(d) below);
(ii) a final judgment rendered against Indemnitee for an accounting,
disgorgement or repayment of profits made from the purchase or sale by
Indemnitee of securities of the Company against Indemnitee or in connection
with a settlement by or on behalf of Indemnitee to the extent it is
acknowledged by Indemnitee and the Company that such amount paid in settlement
resulted from Indemnitee’s conduct from which Indemnitee received monetary
personal profit, pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934, as amended, or other provisions of any
federal, state or local statute or rules and regulations thereunder; (iii) a
final judgment or other final adjudication that Indemnitee’s conduct was in bad
faith, knowingly fraudulent or deliberately dishonest or constituted willful
misconduct (but only to the extent of such specific determination); or (iv) on
account of conduct that is established by a final judgment as constituting a
breach of Indemnitee’s duty of loyalty to the Company or resulting in any
personal profit or advantage to which Indemnitee is not legally entitled.  For purposes of the foregoing sentence, a
final judgment or other adjudication may be reached in either the underlying
proceeding or action in connection with which indemnification is sought or a
separate proceeding or action to establish rights and liabilities under this
Agreement.

 

(b)                                  Claims Initiated by Indemnitee. 
Any provision herein to the contrary notwithstanding, the Company shall
not be obligated to indemnify or advance expenses to Indemnitee with respect to
proceedings or claims initiated or brought by Indemnitee against the Company or
its directors, officers, employees or other agents and not by way of defense,
except (i) with respect to proceedings brought to establish or enforce a
right to indemnification under this Agreement or under any other agreement,
provision in the Bylaws or Amended and Restated Certificate  of
Incorporation (the “Certificate of
Incorporation”) or applicable law, or (ii) with respect to any
other proceeding initiated by Indemnitee that is either approved by the Board
of Directors or Indemnitee’s participation is required by applicable law.  However, indemnification or advancement of
expenses may be provided by the Company in specific cases if the Board of
Directors determines it to be appropriate.

 

(c)                                  Unauthorized Settlements. 
Any provision herein to the contrary notwithstanding, the Company shall
not be obligated pursuant to the terms of this Agreement to indemnify
Indemnitee under this Agreement for any amounts paid in settlement of a
proceeding effected without the Company’s written consent.

 

4

 

Neither the Company nor
Indemnitee shall unreasonably withhold consent to any proposed settlement;
provided, however, that the Company may in any event decline to consent to (or
to otherwise admit or agree to any liability for indemnification hereunder in
respect of) any proposed settlement if the Company is also a party in such
proceeding and determines in good faith that such settlement is not in the best
interests of the Company and its stockholders.

 

(d)                                  Securities Act Liabilities. 
Any provision herein to the contrary notwithstanding, the Company shall
not be obligated pursuant to the terms of this Agreement to indemnify
Indemnitee or otherwise act in violation of any undertaking appearing in and
required by the rules and regulations promulgated under the Securities Act
of 1933, as amended (the “Act”), or in
any registration statement filed with the SEC under the Act.  Indemnitee acknowledges that paragraph (h) of
Item 512 of Regulation S-K currently generally requires the Company to
undertake in connection with any registration statement filed under the Act to
submit the issue of the enforceability of Indemnitee’s rights under this
Agreement in connection with any liability under the Act on public policy
grounds to a court of appropriate jurisdiction and to be governed by any final
adjudication of such issue.  Indemnitee
specifically agrees that any such undertaking shall supersede the provisions of
this Agreement and to be bound by any such undertaking.

 

11.                               Nonexclusivity and Survival of
Rights.  The provisions for indemnification and
advancement of expenses set forth in this Agreement shall not be deemed
exclusive of any other rights which Indemnitee may at any time be entitled
under any provision of applicable law, the Company’s Certificate of
Incorporation, Bylaws or other agreements, both as to action in Indemnitee’s
official capacity and Indemnitee’s action as an agent of the Company, in any
court in which a proceeding is brought, and Indemnitee’s rights hereunder shall
continue after Indemnitee has ceased acting as an agent of the Company and
shall inure to the benefit of the heirs, executors, administrators and assigns
of Indemnitee.  The obligations and
duties of the Company to Indemnitee under this Agreement shall be binding on
the Company and its successors and assigns until terminated in accordance with
its terms.  The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the
Company, expressly to assume and agree in writing to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform if no such succession had taken place.

 

No
amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect
of any action taken or omitted by such Indemnitee in his or her corporate
status prior to such amendment, alteration or repeal.  To the extent that a change in the Code,
whether by statute or judicial decision, permits greater indemnification or
advancement of expenses than would be afforded currently under the Company’s
Certificate of Incorporation, Bylaws and this Agreement, it is the intent of
the parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change.  No
right or remedy herein conferred is intended to be exclusive of any other right
or remedy, and every other right and remedy shall be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise.  The
assertion or employment of any right or remedy hereunder, or otherwise, by
Indemnitee shall not prevent the concurrent assertion or employment of any
other right or remedy by Indemnitee.

 

12.                               Subrogation. 
In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who, at the request and expense of the Company, shall execute all
papers required and shall do everything that may be reasonably necessary to
secure such rights, including the execution of such documents necessary to
enable the Company effectively to bring suit to enforce such rights.

 

13.                               Interpretation of Agreement. 
It is understood that the parties hereto intend this Agreement to be
interpreted and enforced so as to provide indemnification to Indemnitee to the
fullest extent now or hereafter permitted by law.

 

14.                               Severability. 
If any provision of this Agreement shall be held to be invalid, illegal
or unenforceable for any reason whatsoever, (a) the validity, legality and
enforceability of the remaining provisions of the Agreement (including without
limitation, all portions of any paragraphs of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that are not themselves
invalid, illegal or unenforceable) shall not in any way be affected or impaired
thereby; and (b) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, all portions of any paragraph of this
Agreement containing any such 

 

5

 

provision held to be
invalid, illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable and to give effect to Section 13
hereof.

 

15.                               Amendment and Waiver. 
No supplement, modification, amendment, termination, or cancellation of
this Agreement shall be binding unless executed in writing by the parties
hereto.  No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

 

16.                               Notice. 
Except as otherwise provided herein, any notice or demand which, by the
provisions hereof, is required or which may be given to or served upon the
parties hereto shall be in writing and, if by telegram, telecopy or telex,
shall be deemed to have been validly served, given or delivered when sent, if
by overnight delivery, courier or personal delivery, shall be deemed to have
been validly served, given or delivered upon actual delivery and, if mailed, shall
be deemed to have been validly served, given or delivered three (3) business
days after deposit in the United States mail, as registered or certified mail,
with proper postage prepaid and addressed to the party or parties to be
notified at the addresses set forth on the signature page of this
Agreement (or such other address(es) as a party may designate for itself by
like notice).  If to the Company, notices
and demands shall be delivered to the attention of the Secretary of the
Company.

 

17.                               Governing Law. 
This Agreement shall be governed exclusively by and construed according
to the laws of the State of Delaware, as applied to contracts between Delaware
residents entered into and to be performed entirely within Delaware.

 

18.                               Counterparts. 
This Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed to be an original but all of which
together shall constitute but one and the same Agreement.  Only one such counterpart need be produced to
evidence the existence of this Agreement.

 

19.                               Headings.  The headings of the sections of this Agreement
are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction hereof.

 

20.                               Entire Agreement. 
This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements,
understandings and negotiations, written and oral, between the parties with
respect to the subject matter of this Agreement; provided, however, that this
Agreement is a supplement to and in furtherance of the Company’s Certificate of
Incorporation, Bylaws, the Code and any other applicable law, and shall not be
deemed a substitute therefor, and does not diminish or abrogate any
rights of Indemnitee thereunder.

 

6

 

IN
WITNESS WHEREOF,
the parties hereto have entered into this Agreement effective as of the date
first above written.

 

	
   

  	
  CARDIONET, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Randy T. Thurman

  
	
   

  	
   

  	
  Name:

  	
  Randy T. Thurman

  
	
   

  	
   

  	
  Title:

  	
  Chairman of the Board of Directors

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Kirk E. Gorman

  
	
   

  	
  Signature of Indemnitee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Kirk E. Gorman

  
	
   

  	
  Print or Type Name of Indemnitee

  
					

 

7Exhibit 10.3

 

	
  

  	
  PDL BioPharma, Inc.

  1400 Seaport Blvd.

  Redwood City, CA 94063

  

 

CONFIDENTIAL SEPARATION AGREEMENT
AND GENERAL RELEASE

 

This
Confidential Separation Agreement and General Release (this “Agreement”) is made and entered into
by and between Richard Murray, an individual (“Dr. Murray”),
and PDL BioPharma, Inc., a Delaware corporation (the “Company”), and is effective as of
the Effective Date set forth below.

 

1.             Employee
Status. Dr. Murray’s
employment with the Company ended effective September 5, 2008 (the “Termination Date”).

 

2.             Purpose
of Release. By this
Agreement, the parties intend to fully and finally resolve all issues, claims
and obligations between them and provide Dr. Murray with certain benefits
that Dr. Murray would not otherwise be entitled to receive upon
termination of employment with the Company. The parties have entered into this
Agreement based on the promises and covenants contained in this Agreement. The
benefits offered in this Agreement are not intended to create a practice or
policy of the Company, and will only be made available to Dr. Murray if he
signs and returns this Agreement as provided in Section 15.

 

3.             Consideration. In exchange for Dr. Murray entering
into this Agreement and his cooperation with the smooth transition of his
duties, and provided Dr. Murray does not revoke this Agreement pursuant to
Section 14.7 or otherwise, PDL will provide to Dr. Murray the
consideration set forth in this Section 3.

 

3.1          Separation
Payment. PDL will pay to Dr. Murray
a lump sum payment equal to Two Hundred Twenty One Thousand, Two Hundred
Twenty-Five Dollars ($221,225) which equals six months of Dr.Murray’s annual
gross base pay, less withholding for taxes and other authorized or mandatory
withholdings, which would be paid within 10 days following the Effective Date.

 

CONFIDENTIAL

 

1

 

3.2          2008
Bonus Plan Related Payment. A lump sum payment equal to the
sum of One Hundred Ten Thousand, Six Hundred Thirteen Dollars ($110,613), which
equals six months of Dr. Murray’s annual bonus, at 100% of target, less
withholding for taxes and other authorized or mandatory withholdings, which
would be paid within 10 days following the Effective Date.

 

3.3          Retention
Bonus Payment. A lump sum payment equal to Eighty-One Thousand
Dollars ($81,000), less withholding for taxes and other authorized or mandatory
withholdings, which would be paid within 10 days following the Effective Date.

 

3.4          COBRA
Premiums. If Dr. Murray timely elects continued
health coverage, and provided that this Agreement shall have become effective,
the Company will pay the health insurance premiums for COBRA coverage under the
Company’s plans on his behalf for the first twelve (12) months. In the event Dr. Murray
is entitled to continued COBRA coverage following the conclusion of the
foregoing 12-month period, the full cost of premiums for such continued
coverage, if elected, shall be borne by Dr. Murray.

 

3.5          Outplacement
Services. The Company will provide to Dr. Murray, at
no cost to Murray, up to six (6) continuous months of outplacement services
with Right Management Associates, provided that Dr. Murray
activates such services on or before November 5th, 2008.

 

3.6          Amendment
to Options. The company will enter into the Amendment to
Stock Option Agreements in the form of Exhibit A.

 

4.             No
Independent Obligation to Pay Consideration. Dr. Murray agrees and acknowledges that the
payments and benefits set forth in Section 3 above are amounts in excess
of anything to which Dr. Murray is otherwise entitled and that his
execution and non-revocation of this Agreement are material conditions to the
Company’s obligation to make the payments and provide the benefits set forth in
Section 3.

 

5.             No
Release of Obligation to Pay Wages Due. Dr. Murray understands that regardless of
whether or not he executes this Agreement, the Company has paid him for any and
all wages due for time worked through the Termination Date, including any
unused vacation and personal

 

CONFIDENTIAL

 

2

 

days
as calculated under the Company’s policies addressing accrual of vacation or
personal time off. Dr. Murray further understands that his decision to
execute this Agreement will not affect his vested rights, if any, in his
account balances in the Company’s 401k plan.

 

6.             Waiver
of Future Employment. Dr. Murray
agrees he has no right to and hereby waives any right of future employment with
the Company or any affiliates of the Company.

 

7.             Employment
References. Should any
prospective employer of Dr. Murray seek a job reference for him with
respect to his employment with the Company, Dr. Murray agrees to direct
such person or persons to the Company’s Director of Human Resources or her
designee, who shall provide only the dates of Dr. Murray’s employment with
the Company and the last Company position he held. Dr. Murray agrees that
the Company may make the statements listed in Exhibit C to prospective employers that may contact the
Company to seek a job reference for him with respect to his employment with the
Company.

 

8.             Confidentiality
of Company Information. Dr. Murray
acknowledges agrees and warrants that he will continue to maintain the
confidentiality of all confidential and proprietary information of the Company
and shall, except as provided in Section 9, abide by the terms and
conditions of the Employee Agreement Regarding Proprietary Information and
Inventions between him and the Company, the form of which is attached hereto as
Exhibit B. Dr. Murray further warrants and
represents that he will return to the Company all confidential and proprietary
information in his custody or possession no later than the Termination Date. He
further agrees that if he discovers that he has retained any tangible or
electronically stored property of the Company, he shall promptly notify the
Company of such in writing and will take reasonable steps in accordance with
the Company’s instructions to return such property to the Company and, with
respect to electronically stored data of the Company, delete all such data and
related files. The provisions of this paragraph shall remain in effect at all
times including after the Termination Date.

 

9.             Confidentiality
of Release. Dr. Murray
warrants and agrees, absolutely and unconditionally, that he has and will keep
the terms and conditions of this Agreement, the

 

CONFIDENTIAL

 

3

 

negotiations
leading up to the execution of this Agreement and the amount of money and
consideration he is entitled to receive pursuant to the terms and conditions of
this Agreement completely confidential, with the exception that he may disclose
or have disclosed its terms and/or the amount of money and/or consideration he
is receiving pursuant to this Agreement in confidence to his spouse; attorneys
and tax preparers with a need to know such information; and governmental
authorities, as may be required by law. In no event shall Dr. Murray
disclose the aforementioned information to any current or former employee of
the Company. Before making a disclosure to one of the permitted individuals
identified above, Dr. Murray shall advise him/her of the confidential
nature of the information and obtain that person’s consent not to further
disclose the information. Notwithstanding the foregoing, Dr. Murray
acknowledges that the Company may be required to publicly disclose the terms
and conditions of this Agreement pursuant to rules and regulations
promulgated by the Securities and Exchange Commission, provided, however,
that after such disclosure by the Company, Dr. Murray may disclose the
terms and conditions of this Agreement to the extent of the Company’s public
disclosure.

 

10.          No Admission of Liability. Nothing in this Agreement or in the payment of the benefits described
in this Agreement shall be construed as an admission by the Company of any
liability of any kind to Dr. Murray or anyone.

 

11.          Non-Disparagement. Dr. Murray agrees that he will not make any disparaging or
defamatory statements about the Company, its affiliates, or their respective
managers, directors, officers, employees, agents or representatives to anyone
in the future, unless such statements are made truthfully in response to a
subpoena or other legal process.

 

12.          Non-Solicitation. Dr. Murray hereby agrees that for a period of one year following
the Termination Date, he will not directly or indirectly solicit, entice or
encourage any then current employee of the Company or any successor of the
Company to work for or consult with any individual or entity outside of the
Company or any successor company, provided, however, that the term “indirect”
does not include a solicitation set forth in a periodical of general
circulation.

 

CONFIDENTIAL

 

4

 

This
provision supersedes and replaces Section 2 of the Employee Agreement
Regarding Proprietary Information and Inventions.

 

13.          Release.

 

13.1        Dr. Murray hereby agrees that all rights
under section 1542 of the Civil Code of the State of California (“Civil Code section 1542”) and any similar federal, state and/or local
laws are hereby waived by him. Civil Code section 1542 provides as follows:

 

A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

13.2        Dr. Murray
agrees that nothing in this Agreement is to be construed to interfere with Dr. Murray’s
ability to engage in any activity protected by the Sarbanes-Oxley Act, 18
U.S.C.§ 1514A, or from filing a charge or complaint with or from participating
in an investigation or proceeding conducted by the EEOC, NLRB, or any other
federal, state, or local agency charged with the enforcement of any employment
laws, although by signing this release he acknowledges that he is waiving his
right to individual relief, including but not limited to monetary relief, based
on claims asserted in such a charge or complaint. Dr. Murray agrees that
nothing in this release applies to any claims or rights that might arise after
the date he signs this release, the consideration for this release, and any
claims that as a matter of law cannot be waived.

 

13.3        Notwithstanding
the provisions of Civil Code section 1542 or any similar federal, state and/or
local laws, in order to provide a complete and full release, Dr. Murray
hereby irrevocably and unconditionally releases and forever discharges the
Company and each and all of its affiliates, and each of their respective
officers, agents, directors, stockholders, managers, insurers, employees and
representatives as well as each of their heirs, successors and assigns(all of
which are collectively referred to herein as the “Releasees”), from all
claims,

 

CONFIDENTIAL

 

5

 

issues
and obligations, known and unknown, suspected and unsuspected, statutory and
nonstatutory, which Dr. Murray at any time heretofore had or claimed to
have or which he may have or claim to have regarding events that have occurred
prior to the time he executes this Agreement, including, but not limited to,
claims, issues and/or obligations in any way connected with or based on Dr. Murray’s
employment with the Company or the termination of that employment. This release
includes but is not limited to releasing all claims Dr. Murray might have
under all state, federal and local laws pertaining to discrimination,
harassment, retaliation, the federal Workers Adjustment and Retraining
Notification Act, the Employee Retirement Income Security Act of 1974, the
California Fair Employment and Housing Act, the California Unfair Practices
Act, the California Labor Code, family and medical leave laws, wage and hour
laws, disability laws, civil rights laws, state and federal securities laws, as
well as laws pertaining to claims of or for emotional distress, fraud, invasion
of privacy, defamation, breach of contract, breach of covenant of good faith
and fair dealing, as well as equal pay laws and laws pertaining to wrongful
discharge. It is expressly understood by Dr. Murray that among the various
rights and claims being waived in this release are those arising under the Age
Discrimination in Employment Act of 1967 and the Older Workers Benefit
Protection Act.

 

13.4        Dr. Murray covenants to refrain from,
directly or indirectly, threatening, asserting or maintaining any claim,
arbitration, litigation or other similar proceeding or commencing, instituting
or causing to be commenced any Claim of any kind against any Releasee (each, a “Claim”), based upon any matters
released by this Agreement, except as provided in Section 13.2 above.

 

13.5        Dr. Murray represents that he has no
Claims of any kind (including workers’ compensation claims) presently pending,
nor any present intent to file a Claim of any kind after the execution of this
Agreement, against any of the Releasees. Dr. Murray further represents
that he does not possess any claims under the federal Family and Medical Leave
Act and/or the California Family Rights Act or for workers’ compensation
benefits. Dr. Murray agrees that he

 

CONFIDENTIAL

 

6

 

shall
not, at any time in the future, discuss, encourage or voluntarily assist or
cooperate in the prosecution of any Claims against any of the Releasees, except
as may be required by law.

 

13.6        Dr. Murray
represents and warrants that he has not assigned or transferred to any person
or entity any Claim released by this Agreement and agrees to indemnify and hold
harmless the Releasees from and against any and all Claims based on, arising
out of or connected with any such transfer or assignment.

 

13.7        Dr. Murray
acknowledges that he or his representatives may hereafter discover claims or
facts in addition to or different from those that he now knows or believes to
exist with respect to the subject matter of this Agreement, but that it is Dr. Murray
’s intention in executing this Agreement and in receiving the consideration
called for by this Agreement to fully, finally and forever settle and release
all matters identified below, to the fullest extent permitted by law. In
furtherance of this intention, the release herein granted shall be and remain
in effect notwithstanding the discovery of any such additional or different
claim or fact.

 

14.          Release
of Age Discrimination Claims.
Dr. Murray understands that this Agreement includes a release of any
claims he might bring pursuant to the federal Age Discrimination in Employment
Act (ADEA) and that this Agreement is intended to comply with federal law
provisions necessary to waive such claims. This agreement is also intended to
satisfy the requirements of the Older Workers’ Benefit Protection Act, 29
U.S.C. sec 626 (f) Dr. Murray acknowledges that he:

 

14.1        Has
carefully read and fully understands all of the provisions of this Agreement;

 

14.2        Is,
through this Agreement, releasing the Company and its officers, agents,
directors, supervisors, employees and representatives, and their successors and
assigns and all persons acting by, through, under or in concert with any of
them from any and all claims he may have against them;

 

14.3        Knowingly
and voluntarily agrees to all of the terms set forth in this Agreement; 

 

14.4        Knowingly
and voluntarily intends to be legally bound by the same;

 

CONFIDENTIAL

 

7

 

14.5        Has
been advised to and has had the opportunity to consult with and obtain the
advice of legal counsel of his choice prior to executing this Agreement;

 

14.6        Has
received this Agreement on August 14, 2008 and that Dr. Murray had a
period of twenty-one (21) days from that date to consider and execute this
Agreement and, if Dr. Murray has chosen to execute this Agreement in less
than twenty-one (21) days from the time he was originally given this Agreement,
he hereby acknowledges that he has done so voluntarily and knowingly; and

 

14.7        May,
within seven (7) calendar days after he has executed this Agreement,
revoke his assent to this Agreement by notifying Gwen Carscadden, Director,
Human Resources, in writing, at PDL BioPharma, Inc., 1400 Seaport
Boulevard, Redwood City, California 94063. If this Agreement is revoked, it
shall become null and void and the Company shall have no obligation hereunder
including to pay, deliver or provide any of the consideration identified in Section 3.
This Agreement will only become effective and enforceable upon the expiration
of the foregoing seven (7) day revocation period, provided that Dr. Murray
has not revoked this Agreement (the “Effective Date”).

 

15.          Execution
and Effectiveness.  Under no circumstance may Dr. Murray
execute this Agreement prior to September 5, 2008, the Termination Date.
In order for this Agreement to be effective, Dr. Murray (1) must
execute and date this Agreement in the spaces provided at its end after the Termination
date, initial the lower right-hand corner of each page of this
Agreement and deliver an executed, dated and initialed original copy of
this Agreement to Gwen Carscadden, Director of Human Resources of the Company
(or her designee) on or after his Termination Date but before September 12,
2008 and (2) must not revoke this Agreement during the period in which it
may be revoked as set forth in Section 13.7.

 

16.          Entire
Agreement. This Agreement
sets forth the entire understandings between the parties hereto, and supersedes
any other statements, agreements or understandings between the parties
whatsoever, including, but not limited to, any prior offer of employment with
the

 

CONFIDENTIAL

 

8

 

Company.
In executing this Agreement, neither the Company nor Dr. Murray has relied
upon any representations by or on behalf of the other party that are not set
forth in this Agreement.

 

17.          Severability. If any term, clause or provision of this
Agreement is construed to be or adjudged invalid, void or unenforceable, such
term, clause of provision will be deemed amended, limited or stricken to the
extent necessary to permit the maximum enforceability or validation of the
term(s), and the remaining terms, clauses and provisions will remain in full
force and effect to the fullest extent permitted by law.

 

18.          Modification. This Agreement may be modified only in a
writing signed by both parties. This Agreement shall be binding upon and inure
to the benefit of the parties hereto or the respective heirs, assigns, legal
representatives, and successors in interest.

 

19.          Governing
Law. This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
state of California, without reference to the conflicts of law principles
thereof.

 

PLEASE READ THIS RELEASE CAREFULLY. IT
INCLUDES A RELEASE OF ALL CLAIMS, WHETHER KNOWN OR UNKNOWN, YOU MAY HAVE
IN CONNECTION WITH YOUR EMPLOYMENT WITH PDL BIOPHARMA, INC., INCLUDING THE
TERMINATION OF YOUR EMPLOYMENT.

 

 

	
  /s/
  Richard Murray

  	
   

  	
  September 19, 2008

  
	
  Richard
  Murray, Ph.D.

  	
   

  	
  DATE

  
	
   

  	
   

  	
   

  
	
  PDL BioPharma, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Andrew Guggenhime

  	
   

  	
  September 19, 2008

  
	
  Andrew
  Guggenhime

  	
   

  	
  DATE

  
	
  SVP
  and Chief Financial Officer

  	
   

  	
   

  

 

CONFIDENTIAL

 

9

 

CONFIDENTIAL

 

Exhibit A

 

Amendment to Stock Option
Agreements

 

 

CONFIDENTIAL

 

Exhibit B

 

Employee Agreement Regarding
Proprietary Information and Inventions

(See Attached)

 

 

Exhibit C

 

Authorized Reference Check
Statement

 

Dr. Richard
Murray joined PDL in April of 2003 and resigned his duties in September 2008.
He joined PDL as VP of Research, was promoted to SVP & CSO, then to
EVP & CSO during his tenure at PDL. He served on the Board of
Directors from February 2007 to May 2008. During his tenure and under
his leadership:

 

·      The strategy, implementation and FDA approval
of new formulations of the anti-hypertensive drug Cardene was realized

 

·      A novel antibody drug program, volociximab,
was brought into PDL from the acquisition of Eos biotechnology (where Dr Murray
was a co-founder) and entered clinical studies. This antibody represents one of
two products that are currently part of a co-development collaboration with
Biogen-Idec.

 

·      A novel antibody drug program, Elotuzumab was
discovered and translated into a clinical program. Elotuzumab, and an
additional novel pre-clinical program, PDL241, formed the basis of a
co-development collaboration with BMS.

 

·      A novel antibody program, PDL192 was
discovered and translated into clinical studies.

 

·      Multiple CMC IND amendments were submitted
and accepted by the FDA for site and scale changes to antibody manufacturing
processes.

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