Document:

acgi_8k-ex1006.htm

    Exhibit
10.6

     

    REGISTRATION
RIGHTS AGREEMENT

     

    REGISTRATION
RIGHTS AGREEMENT made this 6th day of October, 2008 by and between The Amacore
Group, Inc., a Delaware corporation (the “Company”), and Vicis Capital Master
Fund, a trust formed under the laws of the Cayman Islands (the “Holder”), a
series of the Vicis Capital Master Trust, a trust formed under the laws of the
Cayman Islands.

     

    R E C I T A L
S:

     

    WHEREAS,
simultaneously herewith, the Company and the Holder are entering into a
Preferred Stock Purchase Agreement (the “Purchase Agreement”) pursuant to which
the Company is issuing to the Holder: (1) 200 shares of its Series I Convertible
Preferred Stock, par value $.001 per share (the “Acquired Shares”), which are
convertible into shares of the Company’s Class A Common Stock, par value $.001
per share (“Class A Common Stock”), and (2) a warrant to purchase an aggregate
of 22,500,000 shares of the Company’s Class A Common Stock (the
“Warrant”).

     

    WHEREAS,
the execution and delivery of this Agreement is a condition to the closing of
the Purchase Agreement.

     

    NOW
THEREFORE, in consideration of the agreements set forth herein the parties agree
as follows:

     

    1. Definitions. As used
in this Agreement, the following terms shall have the following respective
meanings:

     

    (a)  “Common
Stock” means the Class A Common Stock, $.001 par value per share, of the Company
and any equity securities issued or issuable with respect to the Class A Common
Stock in connection with a reclassification, recapitalization, merger,
consolidation or other reorganization.

     

    (b) “Conversion
Shares” means the shares of Common Stock or other equity securities issued or
issuable upon conversion of the Acquired Shares.

     

    (c) “Exchange
Act” means the Securities Exchange Act of 1934, as amended, or any similar
Federal statute, and the rules and regulations of the Commission issued under
such Act, as they each may, from time to time, are in effect.

     

    (d) “Holder”
shall have the meaning set forth in the Preamble and any f such Holder’s
successors or assigns.

     

    (e) “Person”
means any individual, corporation, limited liability company, limited or general
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivisions thereof.

     

    (f) “Registration
Statement” means a registration statement filed by the Company with the
Commission for a public offering and sale of securities of the Company (other
than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation or in connection with a merger,
consolidation or acquisition).

     

    
      
        
        

      

      
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    (g) “Registration
Expenses” means the expenses described in Section 4.

     

    (h) “Registrable
Securities” means any (i) Conversion Shares, (ii) Warrant Shares, and
(iii) shares of Common Stock issued or issuable, directly or indirectly,
with respect to the Common Stock referenced above.  As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when (x) a registration statement with respect to the sale of
such securities shall have been declared effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, or (y) such securities shall have been sold (other than in a
privately negotiated sale) pursuant to Rule 144 (or any successor provision)
under the Securities Act, or (z) the Acquired Shares have been redeemed in
full.

     

    (i) “SEC”
means the Securities and Exchange Commission.

     

    (j) “Securities
Act” means the Securities Act of 1933, as amended, or any similar Federal
statute, and the rules and regulations of the Commission issued under such Act,
as they each may from time to time, be in effect.

     

    (k) “Warrant
Shares” means the shares of Common Stock or other equity securities issued or
issuable upon exercise of the Warrant.

     

    2. Piggyback
Registration.  If, at any time, the Company proposes or is
required to register any of its equity securities or securities convertible or
exchangeable for equity securities under the Securities Act pursuant to a
Registration Statement, whether or not for its own account, the Company shall
give prompt written notice of its intention to do so to each Holder of record of
Registrable Securities.  Upon the written request of any Holder, made
within 10 days following the receipt of any such written notice (which request
shall specify the maximum number of Registrable Securities intended to be
disposed of by such Holder and the intended method of distribution thereof), the
Company shall use its best efforts to cause all such Registrable Securities,
each Holder of which have so requested the registration thereof, to be
registered under the Securities Act (with the securities which the Company at
the time proposes to register) to permit the sale or other disposition by each
Holder (in accordance with the intended method of distribution thereof) of the
Registrable Securities to be so registered.  There is no limitation on
the number of piggyback registrations pursuant to the preceding sentence which
the Company is obligated to effect.

     

    3. Registration
Procedures.

     

    (a) If and
whenever the Company is required by the provisions of this Agreement to use its
best efforts to effect the registration of any of the Registrable Securities
under the Securities Act, the Company shall:

     

    (i) file with
the Commission a Registration Statement with respect to such Registrable
Securities and use its best efforts to cause that Registration Statement to
become and remain effective;

     

    
      
        
        

      

      
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    (ii) as
expeditiously as possible prepare and file with the Commission any amendments
and supplements to the Registration Statement and the prospectus included in the
Registration Statement as may be necessary to keep the Registration Statement
effective for a period of not less than nine months from the effective
date;

     

    (iii) as
expeditiously as possible furnish to Holder such reasonable numbers of copies of
the prospectus, including a preliminary prospectus, inconformity with the
requirements of the Securities Act, and such other documents as the selling
Stockholder may reasonably request in order to facilitate the public sale or
other disposition of the Registrable Securities owned by the selling Stockholder
and promptly notify the selling stockholder at any time when a prospectus is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus would include an untrue statement of
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing; and

     

    (iv) as
expeditiously as possible use its best efforts to register or qualify the
Registrable Securities covered by the Registration Statement under the
securities or Blue Sky laws of such states as the selling stockholders shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling stockholders to consummate the
public sale or other disposition in such states of the Registrable Securities
owned by the selling stockholder; provided, however, that the Company shall no
be required in connection with this Section 3(a) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction.

     

    (b) If the
Company has delivered preliminary or final prospectuses to the Holder and, after
having done so, the prospectus is amended to comply with the requirements of the
Securities Act, the Company shall promptly notify the Holder and, if requested,
the Holder shall immediately cease making offers of Registrable Securities and
return all prospectuses to the Company.  The Company shall promptly
provide the Holder with revised prospectuses and, following receipt of the
revised prospectuses, the Holder shall be free to resume making offers of the
Registrable Securities.

     

    4. Allocation of
Expenses.  The Company will pay all Registration Expenses of
all registrations under this Agreement.  For purposes of this Section,
the term “Registration Expenses” shall mean all expenses incurred by the Company
in complying with this Agreement, including, without limitation, all
registration and filing fees, exchange listing fees, printing expenses, fees and
disbursements of counsel for the Company state Blue Sky fees and expenses, and
the expense of any special audits incident to or required by any such
registration, but excluding underwriting discounts, selling commissions and the
fees and expenses of Holder's own counsel.

     

    
      
        
        

      

      
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    5. Indemnification and
Contribution.

     

    (a) In the
event of any registration of any of the Registrable Securities under the
Securities Act pursuant to this Agreement, the Company will indemnify and hold
harmless the seller of such Registrable Securities, and its directors and
officers, each underwriter of such Registrable Securities, and each other
person, if any, who controls such seller or underwriter within the meaning of
the Securities Act or the Exchange Act against any losses, claims, damages or
liabilities, joint or several, to which such seller, underwriter or controlling
person may become subject under the Securities Act, the Exchange Act, state
securities or Blue Sky laws or otherwise, in so far as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement under which such Registrable Securities
were registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, and any document incorporated therein
by reference or arise out of or are based upon the omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Company will reimburse such seller,
underwriter and each such controlling person for any legal or any other expenses
reasonably incurred by such seller, underwriter or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any untrue statement or omission made in such
Registration Statement, preliminary prospectus or prospectus, or any such
amendment or supplement, in reliance upon and in conformity with information
furnished to the Company, in writing, by or on behalf of such seller,
underwriter or controlling person specifically for use in the preparation
thereof.

     

    (b) In the
event of any registration of any of the Registrable Securities under the
Securities Act pursuant to this Agreement, each seller of Registrable
Securities, severally and not jointly, will indemnify and hold harmless the
Company, each of its directors, and officers and each underwriter (if any) and
each person, if any, who controls the Company or any such underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company, such directors
and officers, underwriters or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement under which
such Registrable Securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of such seller, specifically for use in connection with the preparation
of such Registration Statement, prospectus, amendment or supplement; provided,
however, that the obligations of such seller hereunder shall be limited to an
amount equal to the net proceeds to such seller from Registrable Securities sold
as contemplated herein.

     

    (c) Each
party entitled to Indemnification under this Section 5 (the “Indemnified
Party”) shall give notice to the party required to provide indemnification (the
“Indemnifying Party”) promptly after such Indemnified party has actual knowledge
of any claim as to which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom; providing, that counsel for the Indemnifying Party, who
shall conduct the defense of such claim or litigation, shall be approved by the
Indemnified party (whose approval shall not be unreasonably withheld); and,
provided, further, that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Agreement, except to the Extent the Indemnifying Party is actually
prejudiced by the failure to give notice.  The Indemnified party may
participate in such defense at such party's expense; provided, however, that the
Indemnifying Party shall pay such expense if representation of such Indemnified
party by the counsel retained by the Indemnifying Party would be inappropriate
due to actual or potential differing interests between the Indemnified Party and
any other party represented by such counsel in such proceeding.  No
Indemnifying Party, in the defense of any such claim or litigation shall, except
with the consent of each Indemnified party, consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect of such claim or litigation, and no
Indemnified Party shall consent to entry of any judgment or settle such claim or
litigation without the prior written consent of the Indemnifying
Party.

     

    
      
        
        

      

      
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    (d) If the
indemnification provided for herein is unavailable to or insufficient to hold
harmless an Indemnified Party hereunder, then each Indemnifying Party shall
contribute to the amount paid or payable by such Indemnified Party as a result
of the losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to herein in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party on the one hand and the
Indemnified Party on the other in connection with the statements, omissions,
actions, or inactions which resulted in such losses, claims, damages or
liabilities.  The relative fault of the Indemnifying Party and the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or the indemnified party, any action or
inaction by any such party, and the parties' relative intent, knowledge, access
to information, and opportunity to correct or prevent such statement, omission,
action, or inaction.  No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.  Promptly after receipt by an Indemnified Party
hereunder of written notice of the commencement of any action, suit, proceeding,
investigation, or threat thereof with respect to which a claim for contribution
may be made against an Indemnifying Party hereunder, such Indemnified Party
shall, if a claim for contribution in respect thereto is to be made against an
Indemnifying Party, give written notice to the Indemnifying Party of the
commencement thereof (if the notice specified herein has not been given with
respect to such action); provided, however, that the
failure to so notify the Indemnifying Party shall not relieve it from any
obligation to provide contribution which it may have to any Indemnified Party
hereunder, except to the extent that the Indemnifying Party is actually
prejudiced by the failure to give notice.  The parties hereto agree
that it would not be just and equitable if contribution pursuant hereto were
determined by pro rata allocation or by any other method of allocation which
does not take account of equitable considerations referred to
herein.

     

    (e) The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5 were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5, contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities pursuant to
such Registration Statement.

     

    
      
        
        

      

      
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    (f) If
indemnification is available hereunder, the Indemnifying Parties shall indemnify
each Indemnified Party to the fullest extent provided herein, without regard to
the relative fault of said Indemnifying Party or Indemnified Party or any other
equitable consideration provided for herein.  The provisions hereof
shall be in addition to any other rights to indemnification or contribution
which any Indemnified Party may have pursuant to law or contract, shall remain
in full force and effect regardless of any investigation made by or on behalf of
any Indemnified Party, and shall survive the transfer of securities by any such
party.

     

    6. Underwritten
Offering.

     

    (a) In the
case of any registration effected pursuant to this Agreement, the Company shall
have the right to designate the managing underwriter in any underwritten
offering with the consent of the Holder, which shall not be unreasonably
withheld.

     

    (b) In the
event that Registrable Securities are sold pursuant to a Registration Statement
in an underwritten offering, the Company agrees to enter into an underwriting
agreement containing customary representations and warranties with respect to
the business and operations of an issuer of the securities being registered and
customary covenants and agreements to be performed by such issuer, including
without limitation customary provisions with respect to indemnification by the
Company of the underwriters of such offering.

     

    7. SEC Reports. With a
view to making available to the Holder the benefits of Rule 144 promulgated
under the Securities Act or any other similar rule or regulation of the SEC that
may at any time permit the Holder to sell securities of the Company to the
public without registration ("Rule 144"), the Company agrees to: (a) make and
keep public information available, as those terms are understood and defined in
Rule 144; (b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
so long as the Company remains subject to such requirements and the filing of
such reports and other documents is required for the applicable provisions of
Rule 144; (c) furnish to each Holder so long as such Holder owns Registrable
Securities, promptly upon request, (i) a written statement by the Company, if
true, that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested to
permit the Holder to sell such securities pursuant to Rule 144 without
registration; and (d) so long as the Holder owns any Registrable Securities, if
the Company is not required to file reports and other documents under the
Securities Act and the Exchange Act, it will make available other information as
required by, and so long as necessary to permit sales of Registrable Securities
pursuant to, Rule 144.

     

    8. Governing
Law.  This Agreement and the rights of the parties hereunder
shall be governed in all respects by the laws of the State of New York wherein
the terms of this Agreement were negotiated, without regard to the conflicts of
laws thereof.

     

    
      
        
        

      

      
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    9. Consent to Jurisdiction;
Waiver of Jury Trial.  EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE STATE AND FEDERAL COURTS LOCATED THE STATE AND COUNTY OF NEW YORK FOR
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT
AND THE TRANSACTION DOCUMENTS.  EACH OF THE PARTIES TO THIS AGREEMENT
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
PROCEEDING BROUGHT IN ANY SUCH COURTS AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN ANY SUCH COURTS HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY SUCH LEGAL
PROCEEDING.  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY CONSENTS TO
SERVICE OF PROCESS BY NOTICE IN THE MANNER SPECIFIED IN SECTION 7.6 OF THE
PURCHASE AGREEMENT AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION SUCH PARTY MAY NOW OR HEREAFTER HAVE TO SERVICE OF PROCESS IN
SUCH MANNER.

     

    10. Amendment.  This
Agreement may not be amended, discharged or terminated (or any provision hereof
waived) without the written consent of the Company and the Holder.

     

    11. Successors and
Assigns.  Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon and
enforceable by and against, the successors, assigns, heirs, executors and
administrators of the parties hereto.  The Holder may assign its
rights hereunder, and the Company may not assign its rights or obligations
hereunder without the consent of the Holder or any of its successors, assigns,
heirs, executors and administrators.

     

    12. Further
Assurances.  The parties agree to execute and deliver all such
further documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes and intent
of this Agreement.

     

    13. Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one
instrument.

     

    14. Liquidated
Damages.  The Company agrees that the Holder will suffer
damages if the Registration Statement is not filed and declared effective by the
United States Securities and Exchange Commission (the “Commission”) at least 90
days prior to the July 15, 2011 (the “Maturity Date”) or if the Registration
Statement is not maintained in the manner contemplated herein.  The
Company and the Holder further agree that it would not be feasible to ascertain
the extent of such damages with precision.  Accordingly, if (a) the
Registration Statement is not filed and declared effective by the SEC at least
90 days prior to the Maturity Date, or (b) after being declared effective, the
Registration Statement ceases to be effective at any time prior to the nine
month anniversary of the effectiveness date (any such failure or breach being
referred to as an “Event” and the date on which such Event occurs being referred
to as “Event Date”), the Company shall pay in cash as liquidated damages and not
as a penalty to the Holder an amount equal to two percent (2.0%) of the
aggregate stated value of the Acquired Shares then held by such Holder for each
calendar month or portion thereof thereafter from the Event Date until the
applicable Event is cured.  Liquidated damages payable by the Company
pursuant to this Section shall be payable on the first (1st)
Business Day of each thirty (30) day period following the Event
Date.

    

     

    [SIGNATURE
PAGE FOLLOWS]

     

    
      
        
        

      

      
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    IN
WITNESS WHEREOF, the parties hereto have hereunto set their hands to this
instrument, as of the date first above written.

     

     

    
      
        	 	

                THE
      AMACORE GROUP, INC.

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Jay
      Shafer	 
	 	 	Jay
      Shafer 	 
	 	 	President
      and Chief Executive Officer	 
	 	 	 	 

      

    

     

     

    
      
        	 	HOLDER:	 
	 	 	 
	 	
                VICIS
      CAPITAL MASTER FUND

                By: Vicis Capital LLC

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Chris
      Phillips	 
	 	 	Chris
      Phillips 	 
	 	 	Managing
      Director	 
	 	 	 	 

      

    

     

     

     

     

    8Exhibit 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.

 

2

 

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.

 

[REMAINDER OF PAGE LEFT BLANK]

 

13

 

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:

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