Exhibit 10.23

 

Cell Therapeutics, Inc.

 

4% Convertible Senior Subordinated Notes due 2010

 

Registration Rights Agreement

 

June 23, 2003

 

CIBC World Markets Corp.

U.S. Bancorp Piper Jaffray Inc.

c/o CIBC World Markets Corp.

417 Fifth Avenue, 2nd Floor

New York, New York 10016

 

Ladies and Gentlemen:

 

Cell Therapeutics, Inc., a Washington corporation (the “Company”), proposes to
issue and sell to the Purchasers (as defined herein) upon the terms set forth in
the Purchase Agreement (as defined herein) its 4% Convertible Senior
Subordinated Notes due 2010 (the “Securities”). As an inducement to the
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Purchasers thereunder, the Company agrees
with the Purchasers for the benefit of holders (as defined herein) from time to
time of the Registrable Securities (as defined herein) as follows:

 

1. Definitions.

 

(a) Capitalized terms used herein without definition shall have the meanings
ascribed thereto in the Purchase Agreement. As used in this Agreement, the
following defined terms shall have the following meanings:

 

“Affiliate” of any specified person means any other person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such specified person. For purposes of this definition, control of a person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such person whether by contract or otherwise; and the
terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in New York, New York are authorized
or obligated by law or executive order to close.

 

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“Commission” means the United States Securities and Exchange Commission, or any
other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.

 

“Common Stock” means the Company’s common stock, no par value per share.

 

“DTC” means The Depository Trust Company.

 

“Effectiveness Period” has the meaning assigned thereto in Section 2(b)(i)
hereof.

 

“Effective Time” means the date on which the Commission declares the Shelf
Registration Statement effective or on which the Shelf Registration Statement
otherwise becomes effective.

 

“Electing Holder” has the meaning assigned thereto in Section 3(a)(iii) hereof.

 

“Exchange Act” means the United States Securities Exchange Act of 1934, as
amended.

 

The term “holder” means, when used with respect to any Security, the Holder (as
defined in the Indenture) and, with respect to any Common Stock, the record
holder of such Common Stock.

 

“Indenture” means the Indenture, dated as of June 23, 2003, between the Company
and U.S. Bank National Association, as amended and supplemented from time to
time in accordance with its terms.

 

“Managing Underwriters” means the investment banker or investment bankers and
manager or managers that shall administer an underwritten offering, if any,
conducted pursuant to Section 7 hereof.

 

“NASD Rules” means the Rules of the National Association of Securities Dealers,
Inc., as amended from time to time.

 

“Notice and Questionnaire” means a Notice of Registration Statement and Selling
Securityholder Questionnaire, substantially in the form of Appendix C to the
Offering Circular, dated June 18, 2003, relating to the Securities.

 

The term “person” means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.

 

“Prospectus” means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Securities Act)
included in the Shelf Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by the Shelf Registration Statement and by
all other amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus

 

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and all documents filed after the date of such prospectus by the Company under
the Exchange Act and incorporated by reference therein.

 

“Purchase Agreement” means the Purchase Agreement, dated as of June 18, 2003,
between the Company and the Purchasers.

 

“Purchasers” means the Purchasers named in Schedule A to the Purchase Agreement.

 

“Registrable Securities” means all or any portion of the Securities issued from
time to time under the Indenture and the shares of Common Stock issuable upon
conversion of such Securities; provided, however, that a security ceases to be a
Registrable Security when it is no longer a Restricted Security.

 

“Restricted Security” means any Security or share of Common Stock issuable upon
conversion thereof except any such Security or share of Common Stock that (i)
has been registered pursuant to an effective registration statement under the
Securities Act and sold in a manner contemplated by the Shelf Registration
Statement, (ii) has been transferred in compliance with Rule 144 under the
Securities Act (or any successor provision thereto) or is transferable pursuant
to paragraph (k) of such Rule 144 (or any successor provision thereto) or (iii)
has otherwise been transferred and a new Security or share of Common Stock not
subject to transfer restrictions under the Securities Act has been delivered by
or on behalf of the Company in accordance with Section 2.6 of the Indenture.

 

“Rules and Regulations” means the published rules and regulations of the
Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.

 

“Securities Act” means the United States Securities Act of 1933, as amended.

 

“Shelf Registration” means a registration effected pursuant to Section 2 hereof.

 

“Shelf Registration Statement” means a “shelf” registration statement filed
under the Securities Act providing for the registration of, and the sale on a
continuous or delayed basis by the holders of, all of the Registrable Securities
pursuant to Rule 415 under the Securities Act and/or any similar rule that may
be adopted by the Commission, filed by the Company pursuant to the provisions of
Section 2 of this Agreement, including the Prospectus contained therein, any
amendments and supplements to such registration statement, including
post-effective amendments, and all exhibits and all material incorporated by
reference in such registration statement.

 

“Trust Indenture Act” means the Trust Indenture Act of 1939, or any successor
thereto, and the rules, regulations and forms promulgated thereunder, as the
same shall be amended from time to time.

 

The term “underwriter” means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.

 

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(b) Wherever there is a reference in this Agreement to a percentage of the
“principal amount” of Registrable Securities or to a percentage of Registrable
Securities, Common Stock shall be treated as representing the principal amount
of Securities which was surrendered for conversion or exchange in order to
receive such number of shares of Common Stock.

 

2. Shelf Registration.

 

(a) The Company shall, on or prior to 90 calendar days after the Closing Date
(as defined in the Purchase Agreement), file with the Commission a Shelf
Registration Statement relating to the offer and sale of the Registrable
Securities and, thereafter, shall use its reasonable efforts to cause such Shelf
Registration Statement to be declared effective under the Securities Act on or
prior to the later of: (i) 180 calendar days after the Closing Date and (ii) 45
days after the first to occur of (A) the termination of the Agreement and Plan
of Merger, dated as of June 16, 2003, between the Company and Novuspharma S.p.A.
(the “Merger Agreement”) and (B) the consummation of the merger transaction
contemplated by the Merger Agreement; provided, however, that the Company may,
upon written notice to all the Holders, postpone having the Shelf Registration
Statement declared effective for a reasonable period not to exceed 60 days if
the Company is in possession of material non-public information, the disclosure
of which would have a material adverse effect on the business, operations,
properties, condition (financial or otherwise) of the Company and its
subsidiaries, taken as a whole; provided further, however, that no holder shall
be entitled to be named as a selling securityholder in the Shelf Registration
Statement or to use the Prospectus for resales of Registrable Securities unless
such holder is an Electing Holder.

 

(b) The Company shall use its reasonable efforts:

 

(i) to keep the Shelf Registration Statement continuously effective in order to
permit the Prospectus to be usable by holders for resales of Registrable
Securities until the earlier of (A) the sale under the shelf Registration
Statement of all the Registrable Securities registered thereunder and (B) the
expiration of the holding period applicable to such Registrable Securities held
by persons that are not affiliates of the Company under Rule 144(k) of the
Securities Act or any successor previously subject to specific permitted
exceptions (such period being referred to herein as the “Effectiveness Period”);

 

(ii) after the Effective Time, promptly upon the request of any holder of
Registrable Securities that is not then an Electing Holder, to take any action
reasonably necessary to enable such holder to use the Prospectus for resales of
Registrable Securities, including without limitation any action necessary to
identify such holder as a selling securityholder in the Shelf Registration
Statement; provided, however, that nothing in this subparagraph shall relieve
such holder of the obligation to return a completed and signed Notice and
Questionnaire to the Company in accordance with Section 3(a) (ii) hereof; and

 

(iii) if at any time the Securities are convertible into securities other than
Common Stock pursuant to Article Ten of the Indenture, the Company shall, or
shall

 

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cause any successor under the Indenture to, cause such securities to be included
in the Shelf Registration Statement no later than the date on which the
Securities may then be convertible into such securities.

 

3. Registration Procedures. In connection with the Shelf Registration Statement,
the following provisions shall apply:

 

(a) (i) Not less than 30 calendar days prior to the Effective Time, the Company
shall mail the Notice and Questionnaire to the holders of Registrable
Securities. No holder shall be entitled to be named as a selling securityholder
in the Shelf Registration Statement as of the Effective Time, and no holder
shall be entitled to use the Prospectus for resales of Registrable Securities at
any time unless such holder has returned a completed and signed Notice and
Questionnaire to the Company by the deadline for response set forth therein;
provided, however, holders of Registrable Securities shall have at least 20
calendar days from the date on which the Notice and Questionnaire is first
mailed to such holders to return a completed and signed Notice and Questionnaire
to the Company.

 

(ii) After the Effective Time, the Company shall, upon the request of any holder
of Registrable Securities that is not then an Electing Holder, promptly send a
Notice and Questionnaire to such holder. The Company shall not be required to
take any action to name such holder as a selling securityholder in the Shelf
Registration Statement or to enable such holder to use the Prospectus for
resales of Registrable Securities until such holder has returned a completed and
signed Notice and Questionnaire to the Company.

 

(iii) The term “Electing Holder” shall mean any holder of Registrable Securities
that has returned a completed and signed Notice and Questionnaire to the Company
in accordance with Section 3(a)(i) or 3(a)(ii) hereof.

 

(b) The Company shall furnish to each Electing Holder, counsel to the Electing
Holders, and the Managing Underwriters, if any, no fewer than five Business Days
prior to the initial filing of the Shelf Registration Statement, a copy of such
Shelf Registration Statement, shall furnish to such holders, counsel to the
Purchasers, and the Managing Underwriters, if any, no fewer than two Business
Days prior to the filing of any amendment to the Shelf Registration Statement,
and shall furnish to counsel to the Purchasers concurrently with the filing of
supplements to the Prospectus, a copy of such amendment or supplement, as the
case may be, and shall use its reasonable efforts to reflect in each such
document when so filed with the Commission such comments as such holders and
their respective counsel reasonably may propose; provided, however, that the
Company shall make the final decision as to the form and content of each such
document. If any such Shelf Registration Statement refers to any Electing Holder
by name or otherwise as the holder of any securities of the Company, then such
Electing Holder shall have the right to require (i) the insertion therein of
language, in form and substance reasonably satisfactory to such Electing Holder,
to the effect that the holding by such Electing Holder of such securities is not
to be construed as a recommendation by such Electing Holder of

 

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the investment quality of the Company’s securities covered thereby and that such
holding does not imply that such Electing Holder will assist in meeting any
future financial requirements of the Company or (ii) in the event that such
reference to such Electing Holder by name or otherwise is not required by the
Securities Act or any similar Federal statute then in force, the deletion of the
reference to such Electing Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.

 

(c) From the date hereof until the end of the Effective Period, the Company
shall (subject to paragraph (j) below) promptly take such action as may be
necessary so that (i) each of the Shelf Registration Statement and any amendment
thereto and the Prospectus and any amendment or supplement thereto (and each
report or other document incorporated by reference therein in each case)
complies in all material respects with the Securities Act and the Exchange Act
and the respective rules and regulations thereunder, (ii) each of the Shelf
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading and (iii) each of the Prospectus and any amendment or supplement to
the Prospectus does not at any time during the Effectiveness Period include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.

 

(d) The Company shall promptly advise each Electing Holder, and shall confirm
such advice in writing if so requested by any such holder (which notice pursuant
to clauses (ii) through (iv) hereof shall be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have been made):

 

(i) when the Shelf Registration Statement and any amendment thereto has been
filed with the Commission and when the Shelf Registration Statement or any
post-effective amendment thereto has become effective;

 

(ii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of any
proceedings for such purpose;

 

(iii) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the securities included in the Shelf
Registration Statement for sale in any jurisdiction or the initiation of any
proceeding for such purpose; and

 

(iv) if changes in the Shelf Registration Statement or the Prospectus are
required in order that the Shelf Registration Statement and Prospectus do not
contain an untrue statement of a material fact and do not omit to state a
material fact required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in light of the circumstances under
which they were made) not misleading.

 

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(e) The Company shall use its reasonable efforts to prevent the issuance, and if
issued to obtain the withdrawal, of any order suspending the effectiveness of
the Shelf Registration Statement at the earliest possible time.

 

(f) The Company shall furnish to each requesting Electing Holder, without
charge, at least one copy of the Shelf Registration Statement and all
post-effective amendments thereto, including financial statements and schedules,
and, if such holder so requests in writing, all reports, other documents and
exhibits that are filed with or incorporated by reference in the Shelf
Registration Statement.

 

(g) The Company shall, during the Effectiveness Period, deliver to each Electing
Holder, without charge, as many copies of the Prospectus (including each
preliminary Prospectus) and any amendment or supplement thereto as such Electing
Holder may reasonably request; and the Company consents (except during the
continuance of any event described in Section 3(d)(iv) above) to the use of the
Prospectus and any amendment or supplement thereto by each of the Electing
Holders in connection with the offering and sale of the Registrable Securities
covered by the Prospectus and any amendment or supplement thereto during the
Effectiveness Period.

 

(h) Prior to any offering of Registrable Securities pursuant to the Shelf
Registration Statement, the Company shall (i) register or qualify or cooperate
with the Electing Holders and a single counsel for the Electing Holders in
connection with the registration or qualification of such Registrable Securities
for offer and sale under the securities or “blue sky” laws of such jurisdictions
within the United States as any Electing Holder may reasonably request, (ii)
keep such registrations or qualifications in effect and comply with such laws so
as to permit the continuance of offers and sales in such jurisdictions for so
long as may be necessary to enable any Electing Holder or underwriter, if any,
to complete its distribution of Registrable Securities pursuant to the Shelf
Registration Statement, and (iii) take any and all other actions necessary or
advisable to enable the disposition in such jurisdictions of such Registrable
Securities; provided, however, that in no event shall the Company be obligated
to (A) qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to so qualify but for this
Section 3(h) or (B) file any general consent to service of process in any
jurisdiction where it is not as of the date hereof so subject.

 

(i) The Company shall cooperate with the Electing Holders to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold pursuant to the Shelf Registration Statement, which
certificates shall not bear any restrictive legends and, if so required by any
securities exchange upon which any Registrable Securities are listed, shall be
penned, lithographed or engraved, or produced by any combination of such
methods, on steel engraved borders, and which certificates shall be free of any
restrictive legends and in such permitted denominations and registered in such
names as Electing Holders may request in connection with the sale of Registrable
Securities pursuant to the Shelf Registration Statement.

 

(j) Upon the occurrence of any fact or event contemplated by paragraph 3(d)(iv)
above, the Company shall (subject to the next sentence) promptly prepare a post-

 

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effective amendment or supplement to the Shelf Registration Statement or the
Prospectus, or any document incorporated therein by reference, or file any other
required document so that, as thereafter delivered to purchasers of the
Registrable Securities included therein, the Prospectus will not include an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. If the Company notifies the Electing Holders in
accordance with clauses (ii) through (iv) of paragraph 3(d) above to suspend the
use of the Prospectus until the requisite changes to the Prospectus have been
made, then each Electing Holder shall suspend the use of the Prospectus and keep
the notification provided pursuant to paragraph 3(d) above confidential until
(i) such Electing Holder has received copies of the supplemented or amended
Prospectus contemplated by the preceding sentence or (ii) such Electing Holder
is advised in writing by the Company that the use of the Prospectus may be
resumed and has received copies of any additional or supplemental filings that
are incorporated by reference in the Prospectus. Notwithstanding the foregoing,
but subject to Section 7 hereof, the Company shall not be required to amend or
supplement the Shelf Registration Statement, any related Prospectus or any
document incorporated by reference for a period not to exceed 60 consecutive
days if the Company is in possession of material non-public information the
disclosure of which would have a material adverse effect on the business,
operations, prospects, condition (financial or otherwise) of the Company and its
subsidiaries, taken as a whole.

 

(k) Not later than the Effective Time, the Company shall provide a CUSIP number
for the Registrable Securities that are debt securities.

 

(l) The Company shall use all reasonable efforts to comply with all applicable
Rules and Regulations, and to make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months after (i)
the effective date (as defined in Rule 158(c) under the Securities Act) of the
Shelf Registration Statement, (ii) the effective date of each post-effective
amendment to the Shelf Registration Statement, and (iii) the date of each filing
by the Company with the Commission of an Annual Report on Form 10-K that is
incorporated by reference in the Shelf Registration Statement, an earnings
statement of the Company and its subsidiaries complying with Section 11(a) of
the Securities Act and the Rules and Regulations of the Commission thereunder
(including, at the option of the Company, Rule 158).

 

(m) Not later than the Effective Time, the Company shall cause the Indenture to
be qualified under the Trust Indenture Act; in connection with such
qualification, the Company shall cooperate with the Trustee under the Indenture
and the Holders (as defined in the Indenture) to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in accordance
with the terms of the Trust Indenture Act; and the Company shall execute, and
shall use all reasonable efforts to cause the Trustee to execute, all documents
that may be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner. In the event that any such amendment or
modification referred to in this Section 3(m) involves the appointment of a new
trustee under the Indenture, the Company shall appoint a new trustee thereunder
pursuant to the applicable provisions of the Indenture.

 

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(n) In the event of an underwritten offering conducted pursuant to Section 7
hereof, the Company shall (subject to paragraph 3(j) above), if requested,
promptly include or incorporate in a Prospectus supplement or post-effective
amendment to the Shelf Registration Statement such information as the Managing
Underwriters reasonably agree should be included therein and to which the
Company does not reasonably object and shall (subject to paragraph 3(j) above)
make all required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after it is notified of the matters to be
included or incorporated in such Prospectus supplement or post-effective
amendment.

 

(o) The Company shall enter into such customary agreements (including an
underwriting agreement in customary form in the event of an underwritten
offering conducted pursuant to Section 7 hereof) and take all other appropriate
action in order to expedite and facilitate the registration and disposition of
the Registrable Securities, and in connection therewith, if an underwriting
agreement is entered into, cause the same to contain indemnification provisions
and procedures substantially identical to those set forth in Section 5 hereof
with respect to all parties to be indemnified pursuant to Section 5 hereof;
provided, however, the Company shall not be required to facilitate an
underwritten offering pursuant to the Shelf Registration Statement by any
holders unless the offering relates to at least $20,000,000 principal amount of
Securities or the equivalent number of shares of Common Stock in which such
Securities are convertible.

 

(p) The Company shall:

 

(i) (A) make reasonably available for inspection by requesting Electing Holders,
any underwriter participating in any disposition pursuant to the Shelf
Registration Statement, and any attorney selected in accordance with Section
4(b) hereof, one accountant and any other agent retained by such holders or any
such underwriter all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries and (B) cause the
Company’s officers, directors and employees to supply all information reasonably
requested by such holders or any such underwriter, attorney, accountant or agent
in connection with the Shelf Registration Statement, in each case, as is
customary for similar due diligence examinations; provided, however, that all
records, information and documents that are designated in writing by the
Company, in good faith, as confidential shall be kept confidential by such
holders and any such underwriter, attorney, accountant or agent, unless such
disclosure is made in connection with a court proceeding or required by law, or
such records, information or documents become available to the public generally
or through a third party without an accompanying obligation of confidentiality;
and provided further that, if the foregoing inspection and information gathering
would otherwise disrupt the Company’s conduct of its business, such inspection
and information gathering shall, to the greatest extent possible, be coordinated
on behalf of the requesting Electing Holders and the other parties entitled
thereto by one counsel designated by and on behalf of Electing Holders and other
parties;

 

(ii) in connection with any underwritten offering conducted pursuant to Section
7 hereof, make such representations and warranties to the Electing Holders

 

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participating in such underwritten offering and to the Managing Underwriters, in
form, substance and scope as are customarily made by the Company to underwriters
in primary underwritten offerings of equity and convertible debt securities;

 

(iii) in connection with any underwritten offering conducted pursuant to Section
7 hereof, obtain opinions of counsel to the Company (which counsel and opinions
(in form, scope and substance) shall be reasonably satisfactory to the Managing
Underwriters) addressed to each requesting Electing Holder, covering such
matters as are customarily covered in opinions requested in primary underwritten
offerings of equity and convertible debt securities and such other matters as
may be reasonably requested by such Electing Holders and underwriters (it being
agreed that the matters to be covered by such opinions shall include, without
limitation, as of the date of the opinion and as of the Effective Time or the
date of the most recent post-effective amendment thereto, as the case may be,
the absence from the Shelf Registration Statement and the Prospectus, including
the documents incorporated by reference therein, of an untrue statement of a
material fact or the omission of a material fact required to be stated therein
or necessary to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not misleading);

 

(iv) in connection with any underwritten offering conducted pursuant to Section
7 hereof, obtain “cold comfort” letters and updates thereof from the independent
public accountants of the Company (and, if necessary, from the independent
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Shelf Registration Statement), addressed to each
requesting Electing Holder (if such Electing Holder has provided such letter,
representations or documentation, if any, required for such cold comfort letter
to be so addressed) and the underwriters, in customary form and covering matters
of the type customarily covered in “cold comfort” letters in connection with
primary underwritten offerings;

 

(v) in connection with any underwritten offering conducted pursuant to Section 7
hereof, deliver such documents and certificates as may be reasonably requested
by any Electing Holders and the Managing Underwriters, if any, including without
limitation certificates to evidence compliance with Section 3(j) hereof and with
any conditions contained in the underwriting agreement or other agreements
entered into by the Company.

 

(q) The Company will use all reasonable efforts to cause the Common Stock
issuable upon conversion of the Securities to be listed for quotation on the
Nasdaq National Market System or other stock exchange or trading system, if any,
on which the Common Stock primarily trades on or prior to the Effective Time.

 

(r) The Company shall use all reasonable efforts to take all other steps
necessary to effect the registration, offering and sale of the Registrable
Securities covered by the Shelf Registration Statement contemplated hereby.

 

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4. Registration Expenses.

 

(a) All fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by it whether or not any Shelf
Registration Statement is filed or becomes effective and whether or not any
securities are issued or sold pursuant to any Shelf Registration Statement. The
fees and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including without limitation
fees and expenses (A) with respect to filings required to be made with the
National Association of Securities Dealers, Inc. and (B) in compliance with
securities or Blue Sky laws (including without limitation and in addition to
that provided for in (b) below, reasonable fees and disbursements of counsel for
the underwriters or counsel for the holders of Registrable Securities in
connection with Blue Sky qualifications of the Registrable Securities )), (ii)
printing expenses (including without limitation expenses of printing
certificates for Registrable Securities in a form eligible for deposit with DTC
and of printing Prospectuses if the printing of Prospectuses is requested by the
Managing Underwriters, if any), (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Company and one counsel
for the holders of Registrable Securities (plus up to one local counsel deemed
appropriate by the holders of Registrable Securities of a majority in amount of
the Registrable Securities (determined on a fully-converted basis)), in
accordance with the provisions of Section 4(b) hereof, (v) fees and
disbursements of all independent certified public accountants referred to in
Section 3(p)(iv) hereof (including without limitation the expenses of any
special audit and “cold comfort” letters required by or incident to such
performance), (vi) Securities Act liability insurance, if the Company desires
such insurance, and (vii) fees and expenses of all other persons retained by the
Company. In addition, the Company shall pay its internal expenses (including
without limitation all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, and the
fees and expenses incurred in connection with the listing of the securities on
the Nasdaq National Market System. Notwithstanding the foregoing or anything in
this Agreement to the contrary, each holder of the Registrable Securities being
registered shall pay all commissions, placement agent fees and underwriting
discounts and commissions with respect to any Registrable Securities sold by it
and the fees and disbursements of any counsel or other advisors or experts
retained by such holders (severally or jointly), other than counsel and local
counsel referred to in clause (iv) above.

 

(b) In connection with any registration hereunder, the Company shall reimburse
the holders of the Registrable Securities being registered in such registration
for the reasonable fees and disbursements of not more than one counsel (in
addition to any appropriate local counsel) chosen by the holders of a majority
in amount of the Registrable Securities (determined on a fully converted basis)
for whose benefit the applicable Shelf Registration Statement is being prepared.

 

5. Indemnification and Contribution.

 

(a) Indemnification by the Company. Upon the registration of the Registrable
Securities pursuant to Section 2 hereof, the Company shall indemnify and hold
harmless each Electing Holder and each underwriter, selling agent or other
securities professional, if any, which facilitates the disposition of
Registrable Securities, and each of their respective officers and

 

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directors and each person who controls such Electing Holder, underwriter,
selling agent or other securities professional within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act (each such person being
sometimes referred to as an “Indemnified Person”) against any losses, claims,
damages or liabilities, joint or several, to which such Indemnified Person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Shelf Registration Statement or any Prospectus contained
therein or furnished by the Company to any Indemnified Person, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, and the Company hereby agrees to reimburse such
Indemnified Person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
to any such Indemnified Person in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Shelf Registration Statement or Prospectus, or amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Indemnified Person expressly for use
therein; provided, further, however, that the foregoing indemnity agreement with
respect to any preliminary Prospectus shall not inure to the benefit of any
Indemnified Person who failed to deliver a final Prospectus (as then amended or
supplemented, provided by the Company to the several Indemnified Persons in the
requisite quantity and on a timely basis to permit proper delivery on or prior
to the relevant transaction date) to the person asserting any losses, claims,
damages and liabilities and judgments caused by any untrue statement or alleged
untrue statement of a material fact contained in any preliminary Prospectus, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, if such
material misstatement or omission or alleged material misstatement or omission
was cured in the final Prospectus.

 

(b) Indemnification by the Holders and any Agents and Underwriters. Each
Electing Holder agrees, as a consequence of the inclusion of any of such
holder’s Registrable Securities in any Shelf Registration Statement, and each
underwriter, selling agent or other securities professional, if any, which
facilitates the disposition of Registrable Securities shall agree, as a
consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company, its
directors, officers who sign such Shelf Registration Statement and each person,
if any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities to which the Company or such other persons may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in such Shelf Registration Statement or Prospectus, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or

 

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necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such holder, underwriter, selling agent or other securities professional
expressly for use therein and (ii) reimburse the Company and its directors and
officers who sign such Shelf Registration Statement for any legal or other
expenses reasonably incurred by the Company and such directors and officers in
connection with investigating or defending any such action or claim as such
expenses are incurred.

 

(c) Notices of Claims, Etc. Promptly after receipt by an indemnified party under
subsection (a) or (b) of this Section 5 of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party under this Section 5, notify such
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under this Section 5. In
case any such action shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, such indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party under this
Section 5 for any legal expenses of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the written consent of the indemnified party, which consent
will not be unreasonably withheld, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.

 

(d) Contribution. If the indemnification provided for in this Section 5 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) of this Section 5 in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified

 

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party, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties hereto
agree that it would not be just and equitable if contribution pursuant to this
Section 5(d) were determined by pro rata allocation (even if the Electing
Holders or any underwriters, selling agents or other securities professionals or
all of them were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in this Section 5(d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. 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. The obligations of the Electing
Holders and any underwriters, selling agents or other securities professionals
in this Section 5(d) to contribute shall be several in proportion to the
percentage of principal amount of Registrable Securities registered or
underwritten, as the case may be, by them and not joint.

 

(e) Notwithstanding any other provision of this Section 5, in no event will any
(i) Electing Holder be required to undertake liability to any person under this
Section 5 for any amounts in excess of the dollar amount of the proceeds to be
received by such holder from the sale of such holder’s Registrable Securities
(after deducting any fees, discounts and commissions applicable thereto)
pursuant to any Shelf Registration Statement and (ii) underwriter, selling agent
or other securities professional be required to undertake liability to any
person hereunder for any amounts in excess of the discount, commission or other
compensation payable to such underwriter, selling agent or other securities
professional with respect to the Registrable Securities underwritten by it and
distributed to the public.

 

(f) The obligations of the Company under this Section 5 shall be in addition to
any liability that the Company may otherwise have to any Indemnified Person and
the obligations of any Indemnified Person under this Section 5 shall be in
addition to any liability that such Indemnified Person may otherwise have to the
Company. The remedies provided in this Section 5 are not exclusive and shall not
limit any rights or remedies that may otherwise be available to an indemnified
party at law or in equity.

 

6. Liquidated Damages. If (i) on or prior to 90 days after the Closing Date, a
Shelf Registration Statement has not been filed with the Commission, (ii) on or
prior to 180 days after the Closing Date or 45 days after the first to occur of
(A) the termination of the Merger Agreement and (B) the consummation of the
merger transaction contemplated by the Merger Agreement, such Shelf Registration
Statement is not declared effective or (iii) the Shelf Registration Statement
ceases to be effective or the Company otherwise prevents or restricts the
Electing Holders from making sales of Registrable Securities under such Shelf
Registration Statement during the Effectiveness Period for a period in excess of
60 consecutive days (each, a “Registration Default”), liquidated damages
(“Liquidated Damages”) will accrue on the Registrable Securities at a rate equal
to 0.5% of the principal amount of Registrable Securities per annum from and
including the day following such Registration Default to but excluding the day
on which such Registration Default has been cured or, if earlier, the last day
upon which the

 

14

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Shelf Registration Statement is required to be kept effective. The Company shall
notify the Trustee as promptly as possible, but in no event more than three
Business Days after each and every date on which a Registration Default occurs.
Liquidated Damages will be paid semi-annually in arrears, with the first
semi-annual payment due on the first Interest Payment Date in respect of the
Registrable Securities following the date on which such Liquidated Damages begin
to accrue.

 

7. Underwritten Offering. Any holder of Registrable Securities who desires to do
so may sell Registrable Securities (in whole or in part) in an underwritten
offering; provided, however, the Company shall not be required to facilitate an
underwritten offering pursuant to the Shelf Registration Statement by any
holders unless the offering relates to at least $20,000,000 principal amount of
Securities or the equivalent number of shares of Common Stock in which such
Securities are convertible. In any such underwritten offering, the investment
banker or investment bankers and manager or managers that will administer the
offering will be selected by, and the underwriting arrangements with respect
thereto (including the size of the offering) will be approved by, the holders of
a majority of the Registrable Securities to be included in such offering;
provided, however, that such investment bankers and managers and underwriting
arrangements must be reasonably satisfactory to the Company. No holder may
participate in any underwritten offering contemplated hereby unless (a) such
holder agrees to sell such holder’s Registrable Securities to be included in the
underwritten offering in accordance with any approved underwriting arrangements,
(b) such holder completes and executes all reasonable questionnaires, powers of
attorney, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of such approved underwriting arrangements
and (c) if such holder is not then an Electing Holder, such holder returns a
completed and signed Notice and Questionnaire to the Company in accordance with
Section 3(a)(ii) hereof within a reasonable amount of time before such
underwritten offering. The holders participating in any underwritten offering
shall be responsible for any underwriting discounts and commissions and fees
and, subject to Section 4 hereof, expenses of their own counsel. The Company
shall pay all expenses customarily borne by issuers, including but not limited
to filing fees, the fees and disbursements of its counsel and independent public
accountants and any printing expenses incurred in connection with such
underwritten offering. Notwithstanding the foregoing or the provisions of
Section 3(n) hereof, upon receipt of a request from the Managing Underwriter or
a representative of holders of a majority of the Registrable Securities to be
included in an underwritten offering to prepare and file an amendment or
supplement to the Shelf Registration Statement and Prospectus in connection with
an underwritten offering, the Company may delay the filing of any such amendment
or supplement for up to 60 days if the Company is in possession of material
non-public information the disclosure of which would have a material adverse
effect on the business, operations, prospects, condition (financial or
otherwise) of the Company and its subsidiaries, taken as a whole.

 

8. Rules 144 and 144A.

 

The Company agrees, for so long as any Registrable Securities remain outstanding
and during any period in which the Company (a) is not subject to Section 13 of
15(d) of the Exchange Act, to make available, upon request of any holder of
Registrable Securities, to such holder or beneficial owner of Registrable
Securities in connection with any sale thereof and any

 

15

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prospective purchaser of such Registrable Securities designated by such holder
or beneficial owner, the information required by Rule 144A(d)(4) under the
Securities Act in order to permit resales of such Registrable Securities
pursuant to Rule 144A of the Securities Act, and (b) is subject to Section 13 of
15 (d) of the Exchange Act, to make all filings required thereby in a timely
manner in order to permit resales of such Registrable Securities pursuant to
Rule 144 of the Securities Act.

 

9. Miscellaneous.

 

(a) Remedies. The Company acknowledges and agrees that any failure by the
Company to comply with its obligations under this Agreement may result in
material irreparable injury to the Purchasers or the holders of Registrable
Securities for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Purchasers or any holder of Registrable Securities may
obtain such relief as may be required to specifically enforce the Company’s
obligations hereunder. The Company further agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.

 

(b) Other Registration Rights. The Company will not, on or after the date of
this Agreement, enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the holders of Registrable Securities in
this Agreement or otherwise conflicts with the provisions hereof. The Company
shall not permit any securities other than the Registrable Securities to be
included in any Shelf Registration Statement. The rights granted to the holders
of Registrable Securities hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company’s securities
under any agreement in effect on the date hereof.

 

(c) Amendments and Waivers. The provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to or departures from the
provisions hereof may not be given unless (i) in the case of Section 2 hereof
and this Section 9(c)(i), the Company has obtained the written consent of
holders of all outstanding Registrable Securities and (ii) in the case of all
other provisions hereof, the Company has obtained the written consent of holders
of a majority of the outstanding principal amount of Registrable Securities
(determined on a fully converted basis) (excluding Registrable Securities held
by the Company or its Affiliates). Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of holders whose Registrable Securities are being sold pursuant to a
Shelf Registration Statement and that does not affect directly or indirectly the
rights of other holders of Registrable Securities may be given by the holders of
a majority of the outstanding principal amount of Registrable Securities
(determined on a fully converted basis) being sold by such holders pursuant to
such Shelf Registration Statement.

 

(d) Third Party Beneficiary. The holders of Registrable Securities shall be
third party beneficiaries to the agreements made hereunder between the Company,
on the one hand, and the Purchasers, on the other hand, and shall have the right
to enforce such agreements directly to the extent they may deem such enforcement
necessary or advisable to protect its rights or the rights of holders of
Registrable Securities hereunder.

 

16

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(e) Notices. All notices and other communications provided for or permitted
hereunder shall be given as provided in the Indenture.

 

(f) Parties in Interest. The parties to this Agreement intend that all holders
of Registrable Securities shall be entitled to receive the benefits of this
Agreement and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities that are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties hereto and any holder from time to time of the Registrable
Securities to the aforesaid extent. In the event that any transferee of any
holder of Registrable Securities shall acquire Registrable Securities, in any
manner, whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be entitled
to receive the benefits of and, if an Electing Holder, be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement to the aforesaid extent.

 

(g) Counterparts. This Agreement may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

 

(h) Headings. The headings in this agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning, construction or
interpretation hereof.

 

(i) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, including without limitation
New York General Obligations Laws Section 5-1401.

 

(j) Severability. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected thereby, it being
intended that all of the rights and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.

 

(k) Survival. The respective indemnities, agreements, representations,
warranties and other provisions set forth in this Agreement or made pursuant
hereto shall remain in full force and effect, regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of any
Electing Holder, any director, officer or partner of such holder, any agent or
underwriter, any director, officer or partner of such agent or underwriter, or
any controlling person of any of the foregoing, and shall survive the transfer
and registration of the Registrable Securities of such holder.

 

(l) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the

 

17

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agreement and understanding of the parties hereto in respect of the subject
matter hereof. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein, with respect to the
registration rights granted with respect to the Registrable Securities. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.

 

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Please confirm by signing in the space provided below that the foregoing
correctly sets forth the agreement between the Company and you.

 

Very truly yours,

Cell Therapeutics, Inc.

By:

 

/s/    JAMES BIANCO

--------------------------------------------------------------------------------

   

Name:

  James A. Bianco    

Title:

  President and Chief Executive Officer

 

CIBC WORLD MARKETS CORP.

U.S. BANCORP PIPER JAFFRAY INC.

By: CIBC WORLD MARKETS CORP.

By:

 

      /s/    ANDREW MacINNES

--------------------------------------------------------------------------------

   

Name:

  Andrew MacInnes    

Title:

  Managing Director

 

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