EXHIBIT
4.2


 


REGISTRATION RIGHTS
AGREEMENT


This
Registration Rights Agreement (the “Agreement”) is made and entered
into as of July 14, 2003, by and between Protein Design Labs, Inc., a Delaware
corporation (the “Company”), and UBS Securities LLC and the other
Initial Purchasers named in the Purchase Agreement referred to below
(collectively, the “Initial Purchasers”) pursuant to that certain
Purchase Agreement, dated as of July 9, 2003 (the “Purchase Agreement”)
among the Company and the Initial Purchasers.


In order to induce the
Initial Purchasers to enter into the Purchase Agreement, the Company has agreed
to provide the registration rights set forth in this Agreement.  The execution of this Agreement is a
condition to the closing under the Purchase Agreement.


The Company agrees with the
Initial Purchasers (i) for their benefit as Initial Purchasers and (ii) for the
benefit of the beneficial owners (including the Initial Purchasers) from time
to time of the Notes (as defined herein) and the beneficial owners from time to
time of the Underlying Common Stock (as defined herein) issued upon conversion
of the Notes (each of the foregoing a “Holder” and together the “Holders”),
as follows:


Section
1.  Definitions.  Capitalized terms used herein without
definition shall have the respective meanings set forth in the Purchase
Agreement.  As used in this Agreement,
the following terms shall have the following meanings:


“Affiliate” means
with respect to any specified person, an “affiliate,” as defined in Rule 144,
of such person.


“Amendment Effectiveness
Deadline Date” has the meaning set forth in Section 2(d) hereof.


“Applicable Conversion
Price” means, as of any date of determination, $1,000 principal amount at
maturity of Notes divided by the Conversion Rate then in effect as of the date
of determination or, if no Notes are then outstanding, the Conversion Rate that
would be in effect were Notes then outstanding.


“Business Day” means
each day on which the New York Stock Exchange is open for trading.


“Common Stock” means
the shares of common stock, par value $.01 per share, of the Company and any
other shares of capital stock as may constitute “Common Stock” for
purposes of the Indenture, including the Underlying Common Stock.


“Conversion Rate” has
the meaning assigned to such term in the Indenture.


 

















 


“Damages Accrual Period”
has the meaning set forth in Section 2(e) hereof.


“Damages Payment Date”
means each interest payment date under the Indenture in the case of Notes, and
each February 16 and August 16 in the case of the Underlying Common Stock.


“Effectiveness Deadline
Date” has the meaning set forth in Section 2(a) hereof.


“Effectiveness Period”
means a period (subject to extension pursuant to Section 3(i) hereof) of two
(2) years after the later of (1) the original issuance of the Notes and (2) the
last date that the Company or any of its Affiliates was the owner of such Notes
(or any predecessor thereto), or such other period of time (x) as permitted by
Rule 144(k) under the Securities Act or any successor provisions thereunder or
(y) that will terminate when each of the Registrable Securities covered by the
Shelf Registration Statement ceases to be a Registrable Security.


“Event” has the
meaning set forth in Section 2(e) hereof.


“Event Date” has the
meaning set forth in Section 2(e) hereof.


“Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the SEC promulgated thereunder.


“Filing Deadline Date”
has the meaning set forth in Section 2(a) hereof.


“Holder” has the meaning
set forth in the preamble hereto.


“Indenture” means the
Indenture, dated as of July 14, 2003, between the Company and J.P. Morgan Trust
Company, National Association, as trustee, pursuant to which the Notes are
being issued.


“Initial Purchasers”
has the meaning set forth in the preamble hereto.


“Initial Shelf
Registration Statement” has the meaning set forth in Section 2(a) hereof.


“Issue Date” means
the first date of original issuance of the Notes.


“liquidated damages”
has the meaning set forth in Section 2(e).


“Liquidated Damages
Amount” has the meaning set forth in Section 2(e) hereof.


“Managing Underwriters”
has the meaning set forth in Section 8(a) hereof.


“Material Event” has
the meaning set forth in Section 3(i) hereof.


 


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“NASD Rules” has the
meaning set forth in Section 3(s) hereof.


“Notes” means the
2.75% Convertible Subordinated Notes due 2023 of the Company to be purchased
pursuant to the Purchase Agreement.


“Notice and Questionnaire”
means a written notice and questionnaire delivered to the Company containing
substantially the information called for by the Selling Securityholder Notice
and Questionnaire attached as Annex A to the Offering Memorandum dated July 9,
2003 relating to the Notes.


“Notice Holder”
means, on any date, any Holder that has delivered a Notice and Questionnaire to
the Company on or prior to such date, so long as all of such Holder’s
Registrable Securities that have been registered for resale pursuant to a
Notice and Questionnaire have not been sold in accordance with a Shelf
Registration Statement.


“Prospectus” means
the prospectus included in any Shelf Registration Statement (including, without
limitation, a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in reliance
upon Rule 415 promulgated under the Securities Act), as amended or supplemented
by any amendment or prospectus supplement, including post-effective amendments,
and all materials incorporated by reference or deemed to be incorporated by
reference in such Prospectus.


“Purchase Agreement”
has the meaning set forth in the preamble hereto.


“Record Holder” means
(i) with respect to any Damages Payment Date relating to any Notes as to which
any Liquidated Damages Amount has accrued, the holder of record of such Note on
the record date with respect to the interest payment date under the Indenture
on which such Damages Payment Date shall occur and (ii) with respect to any
Damages Payment Date relating to the Underlying Common Stock as to which any
Liquidated Damages Amount has accrued, the registered holder of such Underlying
Common Stock fifteen (15) days prior to such Damages Payment Date.


“Registrable Securities”
means the Notes until such Notes have been converted into the Underlying Common
Stock and, at all times the Underlying Common Stock and any securities into or
for which such Underlying Common Stock has been converted, and any security
issued with respect thereto upon any stock dividend, split or similar event
until, in the case of any such security, the earliest of (x) the date on which
such security has been effectively registered under the Securities Act and
disposed of in accordance with the Registration Statement relating thereto and
(y) the date that is two (2) years after the later of (1) the Issue Date and
(2) the last date that the Company or any of its Affiliates was the owner of
such Notes (or any predecessor thereto), or such other period of time as
permitted by Rule 144(k) under the Securities Act or any successor provisions
thereunder.


 


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“Registration Expenses”
has the meaning set forth in Section 5 hereof.


“Registration Statement”
means any registration statement of the Company that covers any of the
Registrable Securities pursuant to the provisions of this Agreement, including
the Prospectus, amendments and supplements to such registration statement,
including post-effective amendments, all exhibits and all materials incorporated
by reference or deemed to be incorporated by reference in such registration
statement.


“Rule 144” means Rule
144 under the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the SEC.


“Rule 144A” means
Rule 144A under the Securities Act, as such Rule may be amended from time to
time, or any similar rule or regulation hereafter adopted by the SEC.


“SEC” means the
Securities and Exchange Commission.


“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations
promulgated by the SEC thereunder.


“Shelf Registration
Statement” means the Initial Shelf Registration Statement and any
Subsequent Shelf Registration Statement.


“Subsequent Shelf
Registration Statement” has the meaning set forth in Section 2(b) hereof.


“Subsequent Shelf
Registration Statement Effectiveness Deadline Date” has the meaning set
forth in Section 2(d) hereof.


“Suspension Notice”
has the meaning set forth in  Section
3(i) hereof.


“Suspension Period”
has the meaning set forth in Section 3(i) hereof.


“TIA” means the Trust
Indenture Act of 1939, as amended.


“Trustee” means J.P.
Morgan Trust Company, National Association, the trustee under the Indenture.


“Underlying Common Stock”
means the Common Stock into which the Notes are convertible or issued upon any
such conversion.


Section
2.  Shelf
Registration.  (a) The
Company shall prepare and file or cause to be prepared and filed with the SEC,
as soon as practicable but in any event by the date (the “Filing Deadline
Date”) that is ninety (90) days after the Issue Date, a Registration
Statement for an offering to be made on a delayed or continuous basis pursuant
to Rule 415 of the Securities Act registering the resale 


 


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from time to time by Holders thereof of all of the
Registrable Securities (or, if registration of Registrable Securities not held
by Notice Holders is not permitted by the rules and regulations of the SEC,
then registering all Registrable Securities held by Notice Holders) (the “Initial
Shelf Registration Statement”).  The
Initial Shelf Registration Statement shall be on Form S-1 or S-3 or another
appropriate form permitting registration of such Registrable Securities for
resale by such Holders in accordance with the reasonable methods of
distribution elected by the Holders, approved by the Company, and set forth in
the Initial Shelf Registration Statement. 
The Company shall use its reasonable best efforts to cause the Initial
Shelf Registration Statement to be declared effective under the Securities Act
as promptly as is practicable but in any event by the date (the “Effectiveness
Deadline Date”) that is one hundred eighty (180) days after the Issue Date,
and to keep the Initial Shelf Registration Statement (or any Subsequent Shelf
Registration Statement) continuously effective under the Securities Act until
the expiration of the Effectiveness Period. 
At the time the Initial Shelf Registration Statement is declared
effective, each Holder that became a Notice Holder prior to the date that is
two (2) Business Days prior to date of effectiveness shall be named as a
selling securityholder in the Initial Shelf Registration Statement and the
related Prospectus in such a manner as to permit such Holder to deliver such
Prospectus to purchasers of Registrable Securities in accordance with
applicable law.


 


(b)   If the Initial Shelf Registration Statement
or any Subsequent Shelf Registration Statement ceases to be effective for any
reason at any time during the Effectiveness Period, the Company shall use its
reasonable best efforts to obtain the prompt withdrawal of any order suspending
the effectiveness thereof, and in any event shall within thirty (30) days of
such cessation of effectiveness amend the Shelf Registration Statement in a
manner reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (or, if registration of Registrable Securities not held
by Notice Holders is not permitted by the rules and regulations of the SEC,
then registering all Registrable Securities held by Notice Holders as of such
date) (a “Subsequent Shelf Registration Statement”).  If a Subsequent Shelf Registration Statement
is filed, the Company shall use its reasonable best efforts to cause the
Subsequent Shelf Registration Statement to become effective as promptly as is
practicable after such filing, but in no event later than the Subsequent Shelf
Registration Statement Effectiveness Deadline, and to keep such Shelf
Registration Statement (or subsequent Shelf Registration Statement)
continuously effective until the end of the Effectiveness Period.


(c)   The Company shall supplement and amend any
Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement, if required by the Securities Act or as
reasonably requested by the Initial Purchasers 


 


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or by the Trustee on behalf of the Holders of the
Registrable Securities covered by such Shelf Registration Statement.


 


(d)      (i)  Each Holder of
Registrable Securities agrees that if such Holder wishes to sell Registrable
Securities pursuant to a Shelf Registration Statement and related Prospectus,
it will do so only in accordance with this Section 2(d) and Section 3(i).  Each Holder of Registrable Securities
wishing to sell Registrable Securities pursuant to a Shelf Registration
Statement and related Prospectus agrees to deliver a completed and executed
Notice and Questionnaire to the Company prior to any attempted or actual
distribution of Registrable Securities under a Shelf Registration
Statement.  With respect to any Holder
who delivers a completed and executed Notice and Questionnaire on or after the
date that is two (2) Business Days prior to the date the Initial Shelf
Registration Statement is declared effective, the Company shall, as promptly as
reasonably practicable after the date a Notice and Questionnaire is delivered,
and in any event, subject to clause (B) below, within the later of (x) five (5)
Business Days after such date or (y) five (5) Business Days after the
expiration of any Suspension Period (1) in effect when the Notice and
Questionnaire is delivered or (2) put into effect within five (5) Business Days
of such delivery date,


                                                (A)
if required by applicable law, file with the SEC a supplement to the related
Prospectus or a post-effective amendment to the Shelf Registration Statement or
a Subsequent Shelf Registration Statement and any necessary supplement or
amendment to any document incorporated therein by reference to the applicable
Shelf Registration Statement and file any other required document with the SEC
so that the Holder delivering such Notice and Questionnaire is named as a
selling securityholder in a Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to purchasers of the Registrable Securities in accordance with applicable law; provided,
however, that if a post-effective amendment or a Subsequent Shelf
Registration Statement is required by the rules and regulations of the SEC in
order to permit resales by Holders submitting Notice and Questionnaires on or
after the date of effectiveness of the Initial Shelf Registration Statement,
the Company shall not be required to file more than one (1) post-effective
amendment or Subsequent Shelf Registration Statement for such purpose in any
forty five (45) day period;


                                                (B)  if the Company shall file a post-effective
amendment to the Shelf Registration Statement or file a Subsequent Shelf
Registration Statement, it shall use its reasonable best efforts to cause such
post-effective amendment or Subsequent Shelf Registration Statement, as the
case may be, to be declared effective under the Securities Act as promptly as
is practicable, but in any event by the date (the “Amendment Effectiveness
Deadline Date” in the case of a post-effective amendment or the “Subsequent
Shelf Registration Statement Effectiveness Deadline Date” in the case of a
Subsequent Shelf Registration Statement) that is forty five (45) days after the
date such post-effective 


 


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amendment or Subsequent Shelf Registration
Statement, as the case may be, is required by this Section 2(d) to be filed;


                                                (C)
the Company shall provide such Holder a reasonable number of copies of any
documents filed pursuant to Section 2(d)(i)(A). and 2(d)(i)(B);


                                                (D)
the Company shall notify such Holder as promptly as reasonably practicable
after the effectiveness under the Securities Act of any post-effective amendment
or Subsequent Shelf Registration Statement filed pursuant to Section 2(d)(i)(A)
and 2(d)(i)(B);


                                                (E)
if a Notice and Questionnaire is delivered during a Suspension Period, or a
Suspension Period is put into effect within five (5) Business Days after such
delivery date, the Company shall so inform the Holder delivering such Notice
and Questionnaire and shall take the actions set forth in clauses (A), (B), (C)
and (D) above within five (5) Business Days after expiration of the Suspension
Period in accordance with Section 3(i); and


                                                (F)
if under applicable law, the Company has more than one option as to the type or
manner of making any such filing, the Company shall make the required filing or
filings in the manner or of a type that is reasonably expected to result in the
earliest availability of a Prospectus for effecting resales of Registrable
Securities.


                                (ii)  Notwithstanding anything contained herein to
the contrary, the Company shall be under no obligation to name any Holder that
is not a Notice Holder as a selling securityholder in any Shelf Registration
Statement or related Prospectus; provided, however, that any
Holder that becomes a Notice Holder pursuant to the provisions of this Section
2(d) (whether or not such Holder was a Notice Holder at the time the Shelf
Registration Statement was declared effective) shall be named as a selling
securityholder in a Shelf Registration Statement or related Prospectus in
accordance with the requirements of this Section 2(d).


(e)   The parties hereto agree that the Holders of
Registrable Securities will suffer damages, and that it would not be feasible
to ascertain the extent of such damages with precision, if (i) the Initial
Shelf Registration Statement has not been filed on or prior to the Filing
Deadline Date, (ii) the Initial Shelf Registration Statement has not been
declared effective under the Securities Act on or prior to the Effectiveness
Deadline Date, (iii) either a supplement to a prospectus, a post-effective
amendment or a Subsequent Shelf Registration Statement is required to be filed
and fails to be filed within the prescribed period set forth in Section 2(d)
(the applicable date being an “Additional Filing Deadline Date”) or in
the case of a post-effective amendment or a Subsequent Shelf Registration
Statement, such post-effective amendment or Subsequent Registration Statement
is not declared effective by the SEC by the Amendment Effectiveness Deadline
Date or the Subsequent Shelf Registration Statement Effectiveness Deadline
Date, as the case 


 


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may be, or (iv) the Initial Shelf Registration
Statement or any Subsequent Registration Statement is filed and declared
effective but shall thereafter cease to be effective (without being succeeded
immediately by a new registration statement filed and declared effective) or
usable for the offer and sale of Registrable Securities for a period of time
(including any Suspension Period) which shall exceed thirty (30) days in the
aggregate in any three (3) month period or ninety (90) days in the aggregate in
any twelve (12) month period (each of the events of a type described in any of
the foregoing clauses (i) through (iv) are individually referred to herein as
an “Event,” and the Filing Deadline Date in the case of clause (i), the
Effectiveness Deadline Date in the case of clause (ii), the Additional Filing
Deadline Date, the Amendment Effectiveness Deadline Date or the Subsequent
Shelf Registration Statement Effectiveness Deadline Date, as the case may be,
in the case of clause (iii) and the date on which the duration of the
ineffectiveness or unusability of the Shelf Registration Statement in any
period exceeds the number of days permitted by clause (iv) hereof in the case
of clause (iv), being referred to herein as an “Event Date”).  Events shall be deemed to continue until the
following dates with respect to the respective types of Events: the date the
Initial Shelf Registration Statement is filed in the case of an Event of the
type described in clause (i), the date the Initial Shelf Registration Statement
is declared effective under the Securities Act in the case of an Event of the
type described in clause (ii), the date a prospectus supplement or a
post-effective amendment to the Initial Shelf Registration Statement or
Subsequent Shelf Registration Statement, whichever is required, is filed or
declared effective, as the case may be, in the case of an Event of the type
described in clause (iii) and the date the Shelf Registration Statement becomes
effective or usable again in the case of an Event of the type described in
clause (iv).


 


Accordingly, commencing on
(and including) any Event Date and ending on (but excluding) the next date on
which there are no Events that have occurred and are continuing (a “Damages
Accrual Period”), the Company agrees to pay, as liquidated damages (“liquidated
damages”) and not as a penalty, an amount (the “Liquidated Damages
Amount”) at the rate described below, payable periodically on each Damages
Payment Date to Notice Holders, to the extent of, for each such Damages Payment
Date, accrued and unpaid Liquidated Damages Amount to (but excluding) such
Damages Payment Date (or, if the Damages Accrual Period shall have ended prior
to such Damages Payment Date, the date of the end of the Damages Accrual
Period); provided that any Liquidated Damages Amount accrued with
respect to any Note or portion thereof called for redemption on a redemption
date or converted into Underlying Common Stock on a conversion date prior to
the Damages Payment Date, shall, in any such event, be paid instead to the
Holder who submitted such Note or portion thereof for redemption or conversion
on the applicable redemption date or conversion date, as the case may be, on
such date (or promptly following the conversion date, in the case of
conversion).  The Liquidated Damages
Amount shall accrue at a rate per annum equal to one-quarter of one percent
(0.25%) for the first 90-day period from the Event Date, increasing with respect
to each subsequent 90-day period thereafter 


 


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by an additional one-quarter of one percent (0.25%),
up to a maximum rate per year of three quarters of one percent (0.75%), of (i)
the principal amount of such Notes or, without duplication, (ii) in the case of
Notes that have been converted into Underlying Common Stock, the Applicable
Conversion Price of such shares of Underlying Common Stock, as the case may
be.  Notwithstanding the foregoing, no
Liquidated Damages Amounts shall accrue as to any Registrable Security from and
after the earlier of (x) the date such security is no longer a Registrable
Security and (y) expiration of the Effectiveness Period.  The rate of accrual of the Liquidated
Damages Amount with respect to any period shall not exceed the rate provided
for in this paragraph notwithstanding the occurrence of multiple concurrent
Events.  Following the cure of all
Events requiring the payment by the Company of Liquidated Damages Amounts to the
Holders of Registrable Securities pursuant to this Section, the accrual of
Liquidated Damages Amounts shall cease (without in any way limiting the effect
of any subsequent Event requiring the payment of Liquidated Damages Amount by
the Company).


 


The Trustee shall be
entitled, on behalf of Holders of Notes, to seek any available remedy for the
enforcement of this Agreement, including for the payment of any Liquidated
Damages Amount.


All of the Company’s
obligations set forth in this Section 2(e) that are outstanding with respect to
any Registrable Security at the time such security ceases to be a Registrable
Security shall survive until such time as all such obligations with respect to
such security have been satisfied in full (notwithstanding termination of this
Agreement pursuant to Section 9(m)).


The parties hereto agree
that the liquidated damages provided for in this Section 2(e) constitute a
reasonable estimate of the damages that may be incurred by Holders of
Registrable Securities by reason of the failure of a Shelf Registration
Statement to be filed, declared effective, amended or replaced to include the
names of all Notice Holders or available for effecting resales of Registrable
Securities in accordance with the provisions hereof.


Section
3.  Registration
Procedures.  In connection
with the registration obligations of the Company under Section 2 hereof, the
Company shall:


(a)   Prepare and file with the SEC a Shelf
Registration Statement or Shelf Registration Statements on Form S-1 or S-3 or
any other appropriate form under the Securities Act available for the sale of
the Registrable Securities by the Holders thereof in accordance with the
intended method or methods of distribution thereof, and use its reasonable best
efforts to cause each such Shelf Registration Statement to become effective and
remain effective as provided herein; provided that before filing any
Shelf Registration Statement or Prospectus or any amendments or supplements
thereto with the SEC, the Company shall furnish to the Initial Purchasers and
counsel for the Holders and for the Initial Purchasers (or, if applicable, a
single separate counsel for the Holders) copies of all such documents proposed
to be filed and use its reasonable best efforts to 


 


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reflect in each such document when so filed with the
SEC such comments as the Initial Purchasers or such counsel reasonably shall
propose within three (3) Business Days of the delivery of such copies to the
Initial Purchasers and such counsel; provided, however, that the
Company shall have the final decision as to the form and content of each such
document (with the exception that the Company shall not include in such
document information that is contrary to the information provided in any Notice
and Questionnaire unless previously approved by the Notice Holder).


 


(b)   Prepare and file with the SEC such amendments
and post-effective amendments to each Shelf Registration Statement as may be
necessary to keep such Shelf Registration Statement or Subsequent Shelf
Registration Statement continuously effective until the expiration of the
Effectiveness Period; cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act;
and use its reasonable best efforts to comply with the provisions of the
Securities Act applicable to it with respect to the disposition of all
securities covered by such Shelf Registration Statement during the Effectiveness
Period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Shelf Registration Statement as so amended or such
Prospectus as so supplemented.


(c)   As promptly as practicable give notice to the
Notice Holders, the Initial Purchasers and counsel for the Holders and for the
Initial Purchasers (or, if applicable, a single separate counsel for the
Holders) (i) when any Prospectus, Prospectus supplement, Shelf Registration
Statement or post-effective amendment to a Shelf Registration Statement has
been filed with the SEC and, with respect to a Shelf Registration Statement or
any post-effective amendment or when the same has been declared effective, (ii)
of any request, following the effectiveness of a Shelf Registration Statement
under the Securities Act, by the SEC or any other federal or state governmental
authority for amendments or supplements to such Shelf Registration Statement or
the related Prospectus or for additional information, (iii) of the issuance by
the SEC or any other federal or state governmental authority of any stop order
suspending the effectiveness of any Shelf Registration Statement or the
initiation or threatening of any proceedings for that purpose, (iv) of the
receipt by the Company or its legal counsel of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (v) after the effective date of
any Shelf Registration Statement filed pursuant to this Agreement of the
occurrence of (but not the nature of or details concerning) a Material Event
and (vi) of the determination by the Company that a post-effective amendment to
a Shelf Registration Statement or a Subsequent Shelf Registration Statement
will be filed with the SEC, which notice may, at the discretion of the Company
(or as required pursuant to Section 3(i)), state that it constitutes a
Suspension Notice, in which event the provisions of Section 3(i) shall apply.


 


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(d)   Use its reasonable best efforts to prevent
the issuance of, and, if issued, to obtain the withdrawal of any order
suspending the effectiveness of a Shelf Registration Statement or obtain the
lifting of any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction in which they have been qualified for sale, in either case at the
earliest possible moment, and provide prompt notice to each Notice Holder and
the Initial Purchasers of the withdrawal of any such order.


(e)   If requested by the Initial Purchasers or any
Notice Holder, as promptly as reasonably practicable incorporate in a Prospectus
supplement or a post-effective amendment to a Shelf Registration Statement such
information as the Initial Purchasers, such Notice Holder or counsel for the
Holders and for the Initial Purchasers (or, if applicable, a single separate
counsel for the Holders) shall determine to be required to be included therein
by applicable law and make any required filings of such Prospectus supplement
or such post-effective amendment; provided that the Company shall not be
required to take any actions under this Section 3(e) that, in the written
opinion of counsel for the Company, are not in compliance with applicable law.


(f)    As promptly as practicable furnish to each
Notice Holder, counsel for the Holders and for the Initial Purchasers (or, if
applicable, a single separate counsel for the Holders) and the Initial
Purchasers, without charge, at least one (1) conformed copy of any Shelf
Registration Statement and any amendment thereto, including financial
statements but excluding schedules, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits (unless requested in writing
to the Company by such Notice Holder, such counsel or the Initial Purchasers).


(g)   During the Effectiveness Period, deliver to
each Notice Holder, counsel for the Holders and for the Initial Purchasers (or,
if applicable, separate counsel for the Holders) and the Initial Purchasers, in
connection with any sale of Registrable Securities pursuant to a Shelf
Registration Statement, without charge, as many copies of the Prospectus or
Prospectuses relating to such Registrable Securities (including each
preliminary prospectus) and any amendment or supplement thereto as such Notice
Holder or the Initial Purchasers may reasonably request; and the Company hereby
consents (except during such periods that a Suspension Notice is outstanding
and has not been revoked) to the use of such Prospectus or each amendment or
supplement thereto by each Notice Holder, in connection with any offering and
sale of the Registrable Securities covered by such Prospectus or any amendment
or supplement thereto in the manner set forth therein.


(h)   Prior to any public offering of the
Registrable Securities pursuant to a Shelf Registration Statement, use its
reasonable best efforts to register or qualify or cooperate with the Notice
Holders in connection with the registration or qualification (or exemption from
such registration or qualification) of such 


 


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Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Notice Holder reasonably requests in writing (which request may be included
in the Notice and Questionnaire); prior to any public offering of the
Registrable Securities pursuant to a Shelf Registration Statement, use its
reasonable best efforts to keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period in connection
with such Notice Holder’s offer and sale of Registrable Securities pursuant to
such registration or qualification (or exemption therefrom) and do any and all
other acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of such Registrable Securities in the manner
set forth in the relevant Shelf Registration Statement and the related
Prospectus; provided that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it is not then so
qualified or (ii) take any action that would subject it to general service of
process in suits or to taxation in any such jurisdiction where it is not then
so subject.


 


(i)    Upon (A) the issuance by the SEC of a stop
order suspending the effectiveness of any Shelf Registration Statement or the initiation
of proceedings with respect to any Shelf Registration Statement under Section
8(d) or 8(e) of the Securities Act, (B) the occurrence of any event or the
existence of any fact as a result of which any Shelf Registration Statement
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any Prospectus shall contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or (C) the occurrence or existence of any pending
corporate development (a “Material Event”) that, in the reasonable
discretion of the Company, makes it appropriate to suspend the availability of
any Shelf Registration Statement and the related Prospectus, (i) in the case of
clause (B) or (C) above, subject to the next sentence, as promptly as
practicable, prepare and file, if necessary pursuant to applicable law, a
post-effective amendment to such Shelf Registration Statement or a supplement
to the related Prospectus or any document incorporated therein by reference or
file any other required document that would be incorporated by reference into
such Shelf Registration Statement and Prospectus so that such Shelf
Registration Statement does not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and such Prospectus does not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that the Company may rely on information provided by each Notice Holder with
respect to such Notice Holder), as thereafter delivered to the purchasers of
the Registrable Securities being sold thereunder, and, in the case of a
post-effective amendment to a Shelf Registration Statement, subject to the next
sentence, use its reasonable best efforts to cause it to be declared effective
as promptly as is practicable, and 


 


12





























 


(ii) give notice to the Notice Holders and counsel for
the Holders and for the Initial Purchasers (or, if applicable, a single
separate counsel for the Holders) that the availability of the Shelf
Registration Statement is suspended (a “Suspension Notice”) and, upon
receipt of any Suspension Notice, each Notice Holder agrees not to sell any
Registrable Securities pursuant to such Shelf Registration Statement until such
Notice Holder’s receipt of copies of the supplemented or amended Prospectus
provided for in clause (i) above, or until it is advised in writing by the
Company that the Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in such Prospectus.  The
Company will use its reasonable best efforts to ensure that the use of the
Prospectus may be resumed (x) in the case of clause (A) above, as promptly as
is practicable, (y) in the case of clause (B) above, as soon as, in the
reasonable judgment of the Company, the Shelf Registration Statement does not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and the Prospectus does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and (z) in the case of clause (C) above, as soon as, in the
reasonable discretion of the Company, such suspension is no longer
appropriate.  The period during which
the availability of the Shelf Registration Statement and any Prospectus may be
suspended (the “Suspension Period”) without the Company incurring any
obligation to pay liquidated damages pursuant to Section 2(e) shall not exceed
thirty (30) days in any three (3) month period and an aggregate of ninety (90)
days in any twelve (12) month period. 
The Effectiveness Period shall be extended by the number of days from
and including the date of the giving of the Suspension Notice to and including
the date on which the Notice Holder received copies of the supplemented or
amended Prospectus provided in clause (i) above, or the date on which it is
advised in writing by the Company that the Prospectus may be used, and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus.


 


(j)    Make reasonably available for inspection
during normal business hours by representatives for the Notice Holders of such
Registrable Securities and any underwriters participating in any disposition
pursuant to any Shelf Registration Statement and any broker-dealers, one law
firm and one accountancy firm retained by such Notice Holders or any such
underwriters, all relevant financial and other records and pertinent corporate
documents and properties of the Company and its subsidiaries, and cause the
appropriate officers, directors and employees of the Company and its
subsidiaries to make available for inspection during normal business hours all
relevant information reasonably requested by such representatives for the
Notice Holders, or any such underwriters, broker-dealers, law firm or
accountancy firm in connection with such disposition, in each case as is
customary for similar “due diligence” examinations; provided, however,
that such persons shall, at the Company’s request, first agree in writing with
the 


 


13

















 


Company that any information that is reasonably and in
good faith designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such persons and
shall be used solely for the purposes of exercising rights under this
Agreement, unless (i) disclosure of such information is required by court or
administrative order or is necessary to respond to inquiries of governmental or
regulatory authorities, (ii) disclosure of such information is required by law
(including any disclosure requirements pursuant to federal securities laws in
connection with the filing of any Shelf Registration Statement or the use of
any Prospectus referred to in this Agreement) or necessary to defend or
prosecute a claim brought against or by any such persons (e.g., to establish a “due
diligence” defense), (iii) such information becomes generally available to the
public other than as a result of a disclosure or failure to safeguard by any
such person or (iv) such information becomes available to any such person from
a source other than the Company and such source is not bound by a
confidentiality agreement or is not otherwise under a duty of trust to the
Company; provided  further, that the foregoing inspection and
information gathering shall, to the greatest extent possible, be coordinated on
behalf of all the Notice Holders and the other parties entitled thereto by the
counsel referred to in Section 5.


 


(k)   Comply with all applicable rules and
regulations of the SEC and make generally available to its securityholders
earning statements (which need not be audited) satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar
rule promulgated under the Securities Act) no later than 45 days after the end
of any 12-month period (or 90 days after the end of any 12-month period if such
period is a fiscal year) commencing on the first day of the first fiscal
quarter of the Company commencing after the effective date of a Shelf
Registration Statement, which statements shall cover said 12-month periods.


(l)    Cooperate with each Notice Holder to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities sold pursuant to a Shelf Registration Statement, which
certificates shall not bear any restrictive legends, and cause such Registrable
Securities to be in such denominations as are permitted by the Indenture and
registered in such names as such Notice Holder may request in writing at least
two (2) Business Days prior to any sale of such Registrable Securities.


(m)  Provide a CUSIP number for all Registrable
Securities covered by a Shelf Registration Statement not later than the
effective date of the Initial Shelf Registration Statement and provide the
Trustee and the transfer agent for the Common Stock with certificates for the
Registrable Securities that are in a form eligible for deposit with The
Depository Trust Company.


(n)   Cooperate and assist in any filings required
to be made with the National Association of Securities Dealers, Inc.


 


14

















 


(o)   Upon (i) the filing of the Initial
Registration Statement and (ii) the effectiveness of the Initial Registration
Statement, announce the same, in each case by release to PR Business Newswire.


(p)   Take all actions and enter into such
customary agreements (including, if requested, an underwriting agreement in
customary form) as are necessary, or reasonably requested by the holders of a
majority of the Registrable Securities being sold, in order to expedite or
facilitate disposition of such Registrable Securities; and in such connection,
whether or not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration (it being understood that this
Agreement shall not grant to the Holders “piggyback registration rights” to
have their Notes registered pursuant to a registration statement other than a
Registration Statement):


                (i)            the
Company shall make such representations and warranties to the Holders of such
Registrable Securities and the underwriters, if any, in form, substance and
scope as has been customarily made by the Company to underwriters in similar
offerings of securities of the Company;


                (ii)           the
Company shall obtain opinions of counsel of the Company and updates thereof
(which counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and to the counsel to the
Holders of the Registrable Securities being sold) addressed to each selling
Holder and the underwriters, if any, covering the matters customarily covered
in opinions requested in sales of securities or underwritten offerings of the
Company;


                (iii)          the
Company shall obtain “cold comfort” letters and updates thereof from the
Company’s independent certified public accountants (and, if necessary, any
other independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements are,
or are required to be, included in any Shelf Registration Statement) addressed
to the underwriters, if any, and use reasonable best efforts to have such
letter addressed to the selling Holders of Registrable Securities (to the
extent consistent with Statement on Auditing Standards No. 72 of the American
Institute of Certified Public Accounts), such letters to be in customary form
and covering matters of the type customarily covered in “cold comfort” letters
to underwriters in connection with similar underwritten offerings of the
Company;


                (iv)          the
Company shall, if an underwriting agreement is entered into, cause the same to
set forth indemnification provisions and procedures substantially equivalent to
the indemnification provisions and procedures set forth in Section 6 hereof
with respect to the underwriters and all other parties to be indemnified
pursuant to said Section; and


                                (v)           the Company shall deliver such
documents and certificates as may be reasonably requested and as are
customarily delivered in similar 


 


15

















 


offerings to the holders of a majority of the
Registrable Securities being sold and the managing underwriters, if any;


the above to be done at (x) the effectiveness of any
Shelf Registration Statement (and each post-effective amendment thereto) and
(y) each closing under any underwriting or similar agreement as and to the
extent required thereunder.


(q)   Cause the Indenture to be qualified under the
TIA not later than the effective date of the Initial Shelf Registration
Statement; and in connection therewith, cooperate with the Trustee to effect
such changes to the Indenture as may be required for the Indenture to be so
qualified in accordance with the terms of the TIA and execute, and use its
reasonable best efforts to cause the Trustee to execute, all documents as may
be required to effect such changes, and all other forms and documents required
to be filed with the SEC to enable the Indenture to be so qualified in a timely
manner.


(r)    Use its reasonable best efforts to cause the
Underlying Common Stock to be listed on The Nasdaq National Market.


(s)   In the event that any broker-dealer
registered under the Exchange Act shall underwrite any Registrable Securities
or participate as a member of an underwriting syndicate or selling group or
“assist in the distribution” (within the meaning of the Conduct Rules (the “NASD
Rules”) of the National Association of Securities Dealers, Inc.) thereof,
whether as a Holder of such Registrable Securities or as an underwriter, a
placement or sales agent or a broker or dealer in respect thereof, or
otherwise, the Company will assist such broker–dealer in complying with
the requirements of such NASD Rules, including, without limitation, by:
(i) if such NASD Rules, including NASD Rule 2720, shall so require,
engaging a “qualified independent underwriter” (as defined in NASD
Rule 2720) to participate in the preparation of the Shelf Registration
Statement relating to such Registrable Securities, to exercise usual standards
of due diligence in respect thereof and, if any portion of the offering
contemplated by such Shelf Registration Statement is an underwritten offering
or is made through a placement or sales agent, to recommend the yield or price,
as the case may be, of such Registrable Securities; (ii) indemnifying any
such qualified independent underwriter to the extent of the indemnification of
underwriters provided in Section 6 hereof; and (iii) providing such
information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the NASD Rules.


Section
4.  Holder’s
Obligations.  Each Holder
agrees, by acquisition of the Registrable Securities, that no Holder of
Registrable Securities shall be entitled to sell any of such Registrable
Securities pursuant to a Shelf Registration Statement or to receive a
Prospectus relating thereto, unless such Holder has furnished the Company with
a Notice and Questionnaire as required pursuant to Section 2(d) hereof
(including the information required to be included in such Notice and
Questionnaire) and the information set forth in the next sentence. Each 


 


16

















 


Notice Holder agrees promptly to furnish to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Notice Holder not
misleading and any other information regarding such Notice Holder and the
distribution of such Registrable Securities as the Company may from time to time
reasonably request. Any sale of any Registrable Securities by any Holder shall
constitute a representation and warranty by such Holder that the information
relating to such Holder and its plan of distribution is as set forth in the
Prospectus delivered by such Holder in connection with such disposition, that
such Prospectus does not as of the time of such sale contain any untrue
statement of a material fact relating to or provided by such Holder or its plan
of distribution and that such Prospectus does not as of the time of such sale
omit to state any material fact relating to or provided by such Holder or its
plan of distribution necessary in order to make the statements in such
Prospectus, in the light of the circumstances under which they were made, not misleading.


 


Section
5. 
Registration Expenses. 
The Company shall bear all fees and expenses incurred in connection with
the performance by the Company of its obligations under Section 2 and 3 of this
Agreement whether or not any of the Shelf Registration Statements are filed or
declared effective. Such fees and expenses (“Registration Expenses”)
shall include, without limitation, (i) all registration and filing fees and
expenses (including, without limitation, fees and expenses (x) with respect to
filings required to be made with the National Association of Securities
Dealers, Inc. and (y) of compliance with federal securities laws and state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of counsel for the Holders in connection with Blue Sky
qualifications of the Registrable Securities under the laws of such
jurisdictions as the Notice Holders of a majority of the Registrable Securities
being sold pursuant to a Shelf Registration Statement may designate), (ii) all
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities in a form eligible for deposit with The
Depository Trust Company and printing Prospectuses), (iii) all duplication and
mailing expenses relating to copies of any Shelf Registration Statement or
Prospectus delivered to any Holders hereunder, (iv) all fees and disbursements
of counsel for the Company and the fees and disbursements of one counsel for
the Holders in connection with the Shelf Registration Statement, (v) all fees
and disbursements of the Trustee and its counsel and of the registrar and
transfer agent for the Common Stock and (vi) Securities Act liability insurance
obtained by the Company in its sole discretion. In addition, the Company shall
pay the internal expenses of the Company (including, without limitation, all
salaries and expenses of officers and employees performing legal or accounting
duties), the expense of any annual audit, the fees and expenses incurred in
connection with the listing by the Company of the Registrable Securities on any
securities exchange on which similar securities of the Company are then listed
and the fees and expenses of any person, including special experts, retained by
the Company.


 


17

















 


Section
6. 
Indemnification; Contribution.


(a)   The Company agrees to indemnify, defend and
hold harmless each Initial Purchaser, each Holder, each person, if any, who
controls any Initial Purchaser or Holder within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (a “Controlling Person”)
and the respective officers, directors, partners, employees, representatives
and agents of any Initial Purchaser, the Holders or any Controlling Person (each,
an “Indemnified Party”), from and against any loss, damage, expense,
liability, claim or any actions in respect thereof (including the reasonable
cost of investigation) which such Indemnified Party may incur or become subject
to under the Securities Act, the Exchange Act or otherwise, insofar as such
loss, damage, expense, liability, claim or action arises out of or is based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Shelf Registration Statement or Prospectus, including any
document incorporated by reference therein, or in any amendment or supplement
thereto or in any preliminary prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated in any
Shelf Registration Statement or in any amendment or supplement thereto or
necessary to make the statements therein not misleading, or arises out of or is
based upon any omission or alleged omission to state a material fact necessary
in order to make the statements made in any Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, in the light of the
circumstances under which they were made, not misleading, and the Company shall
reimburse, as incurred, the Indemnified Parties for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, damage, expense, liability, claim or action in respect thereof; provided,
however, that (i) insofar as any such loss, damage, expense, liability,
claim or action arises out of or is based upon any untrue statement or omission
or alleged untrue statement or omission of a material fact contained in, or
omitted from, and in conformity with information furnished in writing by or on
behalf of an Initial Purchaser or a Holder to the Company expressly for use
therein and (ii) with respect to any untrue statement or omission or alleged
untrue statement or omission made in any preliminary prospectus relating to a
Shelf Registration Statement, the indemnity agreement contained in this
subsection (a) shall not inure to the benefit of any Holder from whom the
person asserting any such losses, damages, expenses, liabilities, claims or
actions purchased the Registrable Securities concerned, to the extent that a
prospectus relating to such Registrable Securities was required to be delivered
by such Holder under the Securities Act in connection with such purchase and
any such loss, damage, expense, liability, claim or action of such Holder
results from the fact that there was not sent or given to such person, at or
prior to the written confirmation of the sale of such Registrable Securities to
such person, a copy of the final prospectus if the Company had previously
furnished copies thereof to such Holder; provided  further, however,
that this indemnity agreement will be in addition to any liability which the
Company may otherwise have to such Indemnified Party.


 


18

















 


(b)   Each Holder, severally and not jointly,
agrees to indemnify, defend and hold harmless the Company, its directors,
officers, employees, representatives, agents and any person who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act (each, a “Company Indemnified Party”) from and against
any loss, damage, expense, liability, claim or any actions in respect thereof
(including the reasonable cost of investigation) which such Company Indemnified
Party may incur or become subject to under the Securities Act, the Exchange Act
or otherwise, insofar as such loss, damage, expense, liability, claim or action
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in information furnished in writing by or on
behalf of such Holder to the Company expressly for use in any Shelf
Registration Statement or Prospectus, including any document incorporated by
reference therein, or in any amendment or supplement thereto or in any
preliminary prospectus, or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated in any Shelf
Registration Statement or in any amendment or supplement thereto or necessary
to make the statements therein not misleading, or arises out of or is based
upon any omission or alleged omission to state a material fact necessary in
order to make the statements in any Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, in the light of the
circumstances under which they were made, not misleading, in connection with
such information; and, subject to the limitation set forth immediately
preceding this clause, each Holder shall reimburse the Company for any legal or
other expenses reasonably incurred by the Company or any such controlling
person in connection with investigating or defending any loss, damage, expense,
liability, claim or action in respect thereof. 
This indemnity agreement will be in addition to any liability which such
Holder may otherwise have to the Company or any of its controlling
persons.  In no event shall the
liability of any selling Holder of Registrable Securities hereunder be greater
in amount than the dollar amount of the proceeds received by such Holder upon
the sale of the Registrable Securities pursuant to the Shelf Registration
Statement giving rise to such indemnification obligation, absent fraud on the
part of such Holder.


(c)   If any action, suit or proceeding (each, a “Proceeding”)
is brought against any person in respect of which indemnity may be sought
pursuant to either subsection (a) or (b) of this Section 6, such person (the “Indemnified
Party”) shall promptly notify the person against whom such indemnity may be
sought (the “Indemnifying Party”) in writing of the institution of such
Proceeding and the Indemnifying Party shall assume the defense of such
Proceeding; provided, however, that the omission to notify such
Indemnifying Party shall not relieve such Indemnifying Party from any liability
which it may have to such Indemnified Party or otherwise.  Such Indemnified Party shall have the right
to employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party unless the employment
of such counsel shall have been authorized in writing by such Indemnifying
Party in connection with the defense of such Proceeding or such Indemnifying
Party shall not have 


 


19

















 


employed counsel to have charge of the defense of such
Proceeding within thirty (30) days of the receipt of notice thereof or such
Indemnified Party shall have reasonably concluded upon the written advice of
counsel that there may be one or more defenses available to it that are
different from, additional to or in conflict with those available to such
Indemnifying Party (in which case such Indemnifying Party shall not have the
right to direct that portion of the defense of such Proceeding on behalf of the
Indemnified Party, but such Indemnifying Party may employ counsel and
participate in the defense thereof but the fees and expenses of such counsel
shall be at the expense of such Indemnifying Party), in any of which events
such reasonable fees and expenses shall be borne by such Indemnifying Party and
paid as incurred (it being understood, however, that such Indemnifying Party
shall not be liable for the expenses of more than one separate counsel in any
one Proceeding or series of related Proceedings together with reasonably
necessary local counsel representing the Indemnified Parties who are parties to
such action).  An Indemnifying Party
shall not be liable for any settlement of such Proceeding effected without the
written consent of such Indemnifying Party, but if settled with the written
consent of such Indemnifying Party, such Indemnifying Party agrees to indemnify
and hold harmless an Indemnified Party from and against any loss or liability
by reason of such settlement. 
Notwithstanding the foregoing sentence, if at any time an Indemnified
Party shall have requested an Indemnifying Party to reimburse such Indemnified
Party for fees and expenses of counsel as contemplated by the second sentence
of this paragraph, then such Indemnifying Party agrees that it shall be liable
for any settlement of any Proceeding effected without its written consent if
(i) such settlement is entered into more than sixty (60) Business Days after
receipt by such Indemnifying Party of the aforesaid request, (ii) such
Indemnifying Party shall not have reimbursed such Indemnified Party in accordance
with such request prior to the date of such settlement and (iii) such
Indemnified Party shall have given such Indemnifying Party at least thirty (30)
days’ prior notice of its intention to settle. 
No Indemnifying Party shall, without the prior written consent of any
Indemnified Party, effect any settlement of any pending or threatened
Proceeding in respect of which such Indemnified Party is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such
Proceeding and does not include an admission of fault, culpability or a failure
to act, by or on behalf of such Indemnified Party.


 


(d)   If the indemnification provided for in this
Section 6 is unavailable to an Indemnified Party under subsections (a) and (b)
of this Section 6 in respect of any losses, damages, expenses, liabilities,
claims or actions referred to therein, then each applicable Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such losses, damages,
expenses, liabilities, claims or actions (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Holders or the Initial 


 


20

















 


Purchasers on the other hand from the offering of the
Registrable Securities or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and of the Holders or the
Initial Purchasers on the other in connection with the statements or omissions
which resulted in such losses, damages, expenses, liabilities, claims or
actions, as well as any other relevant equitable considerations.  The relative fault of the Company on the one
hand and of the Holders or the Initial Purchasers on the other shall be
determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
relates to information supplied by the Company or by the Holders or the Initial
Purchasers and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.  The amount paid or payable by a party as a
result of the losses, damages, expenses, liabilities, claims and actions
referred to above shall be deemed to include any reasonable legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending any Proceeding.


 


(e)   The Company, the Holders and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 6 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in subsection (d) above.  Notwithstanding the provisions of this Section 6, no Holder shall
be required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by it were offered to the public
exceeds the amount of any damages which it has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission.  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
Holders’ respective obligations to contribute pursuant to this Section 6 are
several in proportion to the respective amount of Registrable Securities they
have sold pursuant to a Shelf Registration Statement, and not joint.  The remedies provided for in this Section 6
are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.


(f)    The indemnity and contribution provisions
contained in this Section 6 shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation
made by or on behalf of any Holder or the Initial Purchasers or any person
controlling any Holder or Initial Purchaser, or the Company, or the Company’s
officers or directors or any person controlling the Company and (iii) the sale
of any Registrable Security by any Holder.


 


21

















 


Section
7. 
Information Requirements. 
(a) The Company covenants that, if at any time before the end of the
Effectiveness Period it is not subject to the reporting requirements of the
Exchange Act, it will cooperate with any Holder of Registrable Securities and
take such further action as any Holder of Registrable Securities may reasonably
request in writing (including, without limitation, making such representations
as any such Holder may reasonably request), all to the extent required from
time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemptions
provided by Rule 144,  Rule 144A,
Regulation S and Regulation D under the Securities Act and customarily taken in
connection with sales pursuant to such exemptions. Upon the written request of
any Holder of Registrable Securities, the Company shall deliver to such Holder
a written statement as to whether it has complied with the reporting
requirements of the Exchange Act, unless such a statement has been included in
the Company’s most recent report filed with the SEC pursuant to Section 13 or
Section 15(d) of Exchange Act. Notwithstanding the foregoing, nothing in this
Section 7 shall be deemed to require the Company to register any of its
securities (other than the Common Stock) under any section of the Exchange Act.


(b)   The Company shall file the reports required
to be filed by it under the Exchange Act and shall comply with all other
requirements set forth in the instructions to Form S-1 or Form S-3, as the case
may be, in order to allow the Company to be eligible to file registration
statements on Form S-1 or Form S-3.


Section
8.  Underwritten Registrations.


(a)   If any of the Registrable Securities covered
by the Shelf Registration Statement are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
administer the offering (“Managing Underwriters”) will be selected by
the holders of a majority in aggregate principal amount of such Registrable
Securities to be included in such offering (provided that holders of Common
Stock issued upon conversion of the Notes shall not be deemed holders of Common
Stock, but shall be deemed to be holders of the aggregate principal amount of
Notes from which such Common Stock was converted), and such Managing
Underwriters shall be reasonably acceptable to the Company.


 


(b)   No person may participate in any underwritten
registration hereunder unless such person (i) agrees to sell such person’s
Registrable Securities on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.


 


22

















 


Section
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 Initial Purchasers or the Holders 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, any Initial
Purchaser or Holder may obtain such relief as may be required to specifically
enforce the Company’s obligations under this Agreement.  The Company further agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate.  This Section 9(a) shall not
apply to Section 2(e).


(b)   No
Conflicting Agreements.  The
Company is not, as of the date hereof, a party to, nor shall it, on or after
the date of this Agreement, enter into, any agreement with respect to its
securities that conflicts with the rights granted to the Holders of Registrable
Securities in this Agreement.  The
Company represents and warrants that the rights granted to the Holders of
Registrable Securities hereunder do not in any way conflict with the rights
granted to the holders of the Company’s securities under any other
agreements.  The Company will not take
any action with respect to the Registrable Securities which would, in
contravention of this Agreement, adversely affect the ability of any of the
Holders to include such Registrable Securities in a registration undertaken
pursuant to this Agreement, and after the date hereof, the Company shall not
grant to any of its security holders (other than the Holders in such capacity)
the right to include any of its securities in the Shelf Registration Statement
filed pursuant to this Agreement.


(c)   Amendments
and Waivers.  The provisions
of this Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the Company has obtained the
written consent of Holders of a majority in aggregate principal amount of such
Registrable Securities (provided that holders of Common Stock issued upon
conversion of the Notes shall not be deemed holders of Common Stock, but shall
be deemed to be holders of the aggregate principal amount of Notes from which
such Common Stock was converted); provided  that, no consent is
necessary from any of the Holders in the event that this Agreement is amended,
modified or supplemented for the purpose of curing any ambiguity, defect or
inconsistency that does not adversely affect the rights of any Holders.  Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Securities whose
securities are being sold pursuant to a Shelf Registration Statement and that
does not directly or indirectly affect the rights of other Holders of
Registrable Securities may be given by Holders of at least a majority of the
Registrable Securities being sold by such Holders pursuant to such Shelf
Registration Statement; provided that the 


 


23

















 


provisions of this sentence may not be amended, modified,
or supplemented except in accordance with the provisions of the immediately
preceding sentence. Each Holder of Registrable Securities outstanding at the
time of any such amendment, modification, supplement, waiver or consent or
thereafter shall be bound by any such amendment, modification, supplement,
waiver or consent effected pursuant to this Section 9(c), whether or not any
notice, writing or marking indicating such amendment, modification, supplement,
waiver or consent appears on the Registrable Securities or is delivered to such
Holder.


 


(d)   Notices.  All notices and other communications
provided for or permitted hereunder shall be made in writing by hand delivery,
by telecopier, by courier guaranteeing overnight delivery or by first-class
mail, return receipt requested, and shall be deemed given (i) when made, if
made by hand delivery, (ii) upon confirmation, if made by telecopier, (iii) one
(1) Business Day after being deposited with such courier, if made by overnight
courier or (iv) on the date indicated on the notice of receipt, if made by
first-class mail, to the parties as follows:


(x)            if to a Holder of Registrable Securities, at the most
current address given by such Holder to the Company in a Notice and
Questionnaire or any amendment thereto;


(y)                         if to the
Company, to:


Protein Design Labs, Inc.


34801 Campus Drive


Fremont, California, 94555


Attention: General Counsel


Telecopy No.: 510-574-1500


 


(z)                         if to the
Initial Purchasers, to:


 


c/o UBS Securities LLC


299 Park Avenue


New York, New York 10171


Attention: Syndicate Department


Telecopy No.: (212) 713-1205


 


with a copy to (for informational purposes only):


 


c/o UBS Securities LLC


299 Park Avenue


New York, New York 10171


Attention: Legal Department


Telecopy No.: (212) 821-4042


 


 


24

















 


               and


 


c/o UBS Securities LLC


677 Washington Boulevard


Stamford, Connecticut 06901


Attention: Syndicate Department


Telecopy No.: (203) 719-0683


 


or to such other address as such person may have furnished to the other
persons identified in this Section 9(d) in writing in accordance herewith.


(e)   Approval
of Holders.  Whenever the
consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
its affiliates (as such term is defined in Rule 405 under the Securities Act)
(other than the Initial Purchasers or subsequent Holders of Registrable
Securities if such subsequent Holders are deemed to be such affiliates solely
by reason of their holdings of such Registrable Securities) shall not be
counted in determining whether such consent or approval was given by the
Holders of such required percentage.


(f)    Third Party Beneficiaries.  The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Initial 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 their rights or the rights of
Holders hereunder.


(g)   Successors
and Assigns.  Any person who
purchases any Registrable Securities from any Initial Purchaser or from any
Holder shall be deemed, for purposes of this Agreement, to be an assignee of
such Initial Purchaser or such Holder, as the case may be.  This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties and shall
inure to the benefit of and be binding upon each Holder of any Registrable
Securities.


(h)   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 original and all of which taken together shall constitute one and the
same agreement.


(i)    Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.


(j)    Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.


 


25

















 


(k)   Severability.  If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated thereby, and the parties hereto shall use its
reasonable best efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term,
provision, covenant or restriction, it being intended that all of the rights
and privileges of the parties shall be enforceable to the fullest extent
permitted by law.


(l)    Entire
Agreement.  This Agreement is
intended by the parties as a final expression of their agreement and is
intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and the registration rights granted by the Company with respect to the
Registrable Securities. Except as provided in the Purchase Agreement, there are
no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein, with respect to the registration rights granted by
the Company with respect to the Registrable Securities.  This Agreement supersedes all prior
agreements and undertakings among the parties with respect to such registration
rights.  No party hereto shall have any
rights, duties or obligations other than those specifically set forth in this
Agreement.


(m)  Termination.  This Agreement and the obligations of the
parties hereunder shall terminate upon the end of the Effectiveness Period,
except for any liabilities or obligations under Section 4, 5 or 6 hereof and
the obligations to make payments of and provide for liquidated damages under
Section 2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.


(n)   Submission
to Jurisdiction.  Except as
set forth below, no Proceeding may be commenced, prosecuted or continued in any
court other than the courts of the State of New York located in the City and
County of New York or in the United States District Court for the Southern
District of New York, which courts shall have jurisdiction over the
adjudication of such matters, and the Company hereby consents to the
jurisdiction of such courts and personal service with respect thereto.  The Company hereby consents to personal
jurisdiction, service and venue in any court in which any Proceeding arising
out of or in any way relating to this Agreement is brought by any third party
against any Initial Purchaser.  THE
COMPANY HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING (WHETHER
BASED UPON CONTRACT, TORT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATING
TO THIS AGREEMENT.  The Company agrees
that a final judgment in any such Proceeding brought in any such court shall be
conclusive and binding upon the Company and may be enforced in any other courts
in the jurisdiction of which the Company is or may be subject, by suit upon
such judgment.


 


26

















 


In Witness Whereof, the parties have executed
this Agreement as of the date first written above.


 


 


	
   

  	
  PROTEIN DESIGN LABS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  MARK MCDADE

  
	
   

  	
   

  	
  Name:  Mark McDade

  
	
   

  	
   

  	
  Title:  Chief Executive Officer

  



 


Confirmed and accepted as of the date


first above written on behalf of itself


and the other several Initial Purchasers:


 


	
  UBS SECURITIES LLC

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  REAL LECLERC

  	
   

  
	
   

  	
  Name:  Real Leclerc

  	
   

  
	
   

  	
  Title:  Executive Director

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  STEVEN MEEHAN

  	
   

  
	
   

  	
  Name:  Steven Meehan

  	
   

  
	
   

  	
  Title:  Managing Director