**Exhibit 4.9**

 

**R****ESALE R****EGISTRATION R****IGHTS A****GREEMENT**

 

**between**

 

**deCODE****GENETICS , I****NC .**

 

**J.P.M****ORGAN S****ECURITIES I****NC .**

 

**and**

 

**L****EHMAN B****ROTHERS I****NC .**

 

**asrepresentatives of the Initial Purchasers**

 

 

**D****ATED AS OF A****PRIL 14, 2004**

 

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**TABLEOF CONTENTS**

 
| 1.     | Definitions                                 |   |
|--------|---------------------------------------------|--------|
|   |                                        |   |
| 2.     | Shelf Registration                          |   |
|   |                                        |   |
| 3.     | Additional Amounts                          |   |
|   |                                        |   |
| 4.     | Registration Procedures                     |   |
|   |                                        |   |
| 5.     | Registration Expenses                       |   |
|   |                                        |   |
| 6.     | Indemnification and Contribution            |   |
|   |                                        |   |
| 7.     | Rule 144A                                   |   |
|   |                                        |   |
| 8.     | Participation in Underwritten Registrations |   |
|   |                                        |   |
| 9.     | Miscellaneous                               |   |

 

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**R****ESALE R****EGISTRATION R****IGHTS A****GREEMENT**, dated asof April 14, 2004, between deCODE genetics, Inc., a Delaware corporation(together with any successor entity, herein referred to as the **“Company”**), J.P. MorganSecurities Inc. and Lehman Brothers Inc., as representatives of the severalinitial purchasers (the**“InitialPurchasers”**) listed on Schedule I to the purchase agreementdated April 7, 2004 between the Company and the Initial Purchasers (the **“Purchase Agreement”**).

 

Pursuant to the Purchase Agreement, and the exercise by the InitialPurchasers of their over-allotment option on April 8, 2004, the InitialPurchasers have agreed to purchase from the Company $150,000,000 aggregateprincipal amount of 3.5% Senior Convertible Notes due 2011 (the **“Notes”**).  The Notes initially will be convertible intofully paid, nonassessable shares of common stock, par value $0.001 per share,of the Company  (the **“Common Stock”**) on theterms, and subject to the conditions, set forth in the Indenture (as definedherein).  To induce the InitialPurchasers to purchase the Notes, the Company has agreed to provide theregistration rights set forth in this Agreement pursuant to the PurchaseAgreement.

 

The parties hereby agree as follows:

 

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

 

**AdditionalAmounts**:   Asdefined in Section 3(a) hereof.

 

**AdditionalAmounts Payment Date**:   Each April 15 and October 15, commencing October 15, 2004.

 

**Affiliate**:   As such term is defined in Rule 405 underthe Securities Act.

 

**Agreement**:   This Resale Registration Rights Agreement,as amended, modified or otherwise supplemented from time to time in accordancewith the terms hereof.

 

**BlueSky Application**: As defined in Section 6(a)(i) hereof.

 

**BusinessDay**:  A dayother than a Saturday or Sunday or any day on which banking institutions in TheCity of New York are authorized or obligated by law or executive order toclose.

 

**ClosingDate**:  The dateof this Agreement.

 

**Commission**:   Securities and Exchange Commission.

 

**CommonStock**:   Asdefined in the preamble hereto.

 

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**EffectivenessPeriod**:  Asdefined in Section 2(a)(iii) hereof.

 

**EffectivenessTarget Date**: As defined in Section 2(a)(ii) hereof.

 

**ExchangeAct**: Securities Exchange Act of 1934, as amended, and the rules and regulationsof the Commission thereunder.

 

**Holder**:A Person who owns, beneficially or otherwise, Transfer Restricted Securities.

 

**IndemnifiedHolder**:  Asdefined in Section 6(a) hereof.

 

**Indenture**:The Indenture, dated as of April 14, 2004, between the Company and The Bank ofNew York, as trustee (the “Trustee”), pursuant to which the Notes are to beissued, as such Indenture is amended, modified or supplemented from time totime in accordance with the terms thereof.

 

**InitialPurchasers**:  Asdefined in the preamble hereto.

 

**InterestPayment Date**: Each April 15 and October 15 of eachyear, commencing October 15, 2004.

 

**Company**:  As defined in the preamble hereto.

 

**Majorityof Holders**: Holders holding more than 50% of the aggregate principal amount atmaturity of Notes outstanding; *provided*that, for purpose of this definition, a holder of shares of Common Stock whichconstitute Transfer Restricted Securities when issued upon conversion of theNotes shall be deemed to hold an aggregate principal amount at maturity ofNotes (in addition to the principal amount at maturity of Notes held by suchholder) equal to $1,000 times the quotient of (i) the number of such shares ofCommon Stock received upon conversion of the Notes and then held by such holderdivided by (ii) the prevailing conversion rate, such prevailing conversion rateas determined in accordance with the Indenture.

 

**NASD**:National Association of Securities Dealers, Inc.

 

**Notes**:  As defined in the preamble hereto.

 

**Person**:An individual, partnership, corporation, unincorporated organization, limitedliability company, trust, joint venture or a government or agency or politicalsubdivision thereof.

 

**Prospectus**:The prospectus included in a Shelf Registration Statement, as amended orsupplemented by any prospectus supplement and by all other amendments thereto,including post-effective amendments, and all material incorporated by referenceinto such Prospectus.

 

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**PurchaseAgreement**:  Asdefined in the preamble hereto.

 

**Questionnaire**:  As defined in Section 2(b) hereof.

 

**Record Holder**: Withrespect to any Additional Amounts Payment Date, each Person who is a Holder onthe record date with respect to the Interest Payment Date on which suchAdditional Amounts Payment Date shall occur. In the case of a Holder of shares of Common Stock issued upon conversionof the Notes, “Record Holder” shall mean each Person who is a Holder of sharesof Common Stock that constitute Transfer Restricted Securities on the 15th daypreceding the relevant Additional Amounts Payment Date.

 

**RegistrationDefault**: As defined in Section 3(a) hereof.

 

**SecuritiesAct**: Securities Act of 1933, as amended, and the rules and resolutions of theCommission thereunder.

 

**ShelfFiling Deadline**: As defined in Section 2(a)(i) hereof.

 

**ShelfRegistration Statement**: As defined in Section 2(a)(i)hereof.

 

**SuspensionPeriod**. As defined in Section 4(b)(i) hereof.

 

**TIA**:Trust Indenture Act of 1939, as amended, and the rules and regulations of theCommission thereunder, in each case, as in effect on the date the Indenture isqualified under the TIA.

 

**TransferRestricted Securities**: Each Note and each share ofCommon Stock issued upon conversion of Notes until the earlier of:

 

(a)         the date on which such Note or suchshare of Common Stock issued upon conversion thereof has been effectivelyregistered under the Securities Act and disposed of in accordance with theShelf Registration Statement;

 

(b)         the date on which such Note or suchshare of Common Stock issued upon conversion thereof is transferred incompliance with Rule 144 under the Securities Act or may be sold or transferredby a person who is not an Affiliate of the Company pursuant to Rule 144 underthe Securities Act (or any other similar provision then in force) without anyvolume or manner of sale restrictions thereunder; and

 

(c)         the date on which such Note or suchshare of Common Stock issued upon conversion ceases to be outstanding (whetheras a result of redemption, repurchase and cancellation, conversion orotherwise); provided that any Note and any Common Stock issued upon conversionof such Note that is redeemed or repurchased by the Company shall not be

 

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deemedTransfer Restricted Securities for purposes of this Agreement upon resale bythe Company.

 

**UnderwrittenRegistration or Underwritten Offering**: A registrationin which Notes or shares of our Common Stock issued upon conversion of Notesare sold to an underwriter for reoffering to the public.

 

2.                           ***ShelfRegistration***. (a) The Company shall:

 

(i)            not later than 90 days after thedate hereof (the **“Shelf Filing Deadline”**),cause to be filed a registration statement pursuant to Rule 415 under theSecurities Act (together with any amendments thereto, and including anydocuments incorporated by reference therein, the **“Shelf Registration Statement”**), which Shelf RegistrationStatement shall provide for resales of all Transfer Restricted Securities heldby Holders that have provided the information required pursuant to the terms ofSection 2(b) hereof;

 

(ii)           use its commercially reasonable bestefforts to cause the Shelf Registration Statement to be declared effective bythe Commission as promptly as practicable, but in no event later than 180 daysafter the date hereof (the **“EffectivenessTarget Date”**); and

 

(iii)          use its commercially reasonable bestefforts to keep the Shelf Registration Statement continuously effective,supplemented and amended as required by the provisions of Section 4(b) hereofto the extent necessary to ensure that (A) it is available for resales by theHolders of Transfer Restricted Securities entitled to the benefit of thisAgreement and (B) conforms with the requirements of this Agreement and theSecurities Act for a period (the **“EffectivenessPeriod”**) of:

 

(A)          two years following the last date oforiginal issuance of any of the Notes; or

 

(B)           such shorter period that willterminate when (x) all of the Holders of Transfer Restricted Securities areable to sell all Transfer Restricted Securities immediately without restrictionpursuant to Rule 144(k) under the Securities Act or any successor rule thereto,(y) when all Transfer Restricted Securities have ceased to be outstanding(whether as a result of redemption, repurchase and cancellation, conversion orotherwise) or (z) all Transfer Restricted Securities registered under the

 

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ShelfRegistration Statement have been disposed of in accordance with theRegistration Statement.

 

(b)           To have its Transfer RestrictedSecurities included in the Shelf Registration Statement pursuant to thisAgreement at the time of effectiveness, each Holder shall complete the SellingSecurityholder Notice and Questionnaire, the form of which is contained inAnnex A to the Offering Memorandum relating to the Notes (the **“Questionnaire”**), and deliver theQuestionnaire within 20 Business Days of the date of the Questionnaire.  The Company shall mail the Questionnaire atleast 20 Business Days (but not more than 40 Business Days) prior to the timethe Company intends in good faith to have the Shelf Registration Statementdeclared effective by the Commission. Upon receipt of a written request for additional information from theCompany, each Holder who intends to be named as a selling securityholder in theShelf Registration Statement shall furnish to the Company in writing, within 20Business Days after such Holder’s receipt of such request, such additionalinformation regarding such Holder and the proposed distribution by such Holderof its Transfer Restricted Securities, in connection with the ShelfRegistration Statement or Prospectus or Preliminary Prospectus included thereinand in any application to be filed with or under state securities law, as theCompany may reasonably request.  Inconnection with all such requests for information from Holders of TransferRestricted Securities, the Company shall notify such Holders of therequirements set forth in this paragraph regarding their obligation to providethe information requested pursuant to this Section.  Each Holder must notify the Company not later than three BusinessDays prior to any proposed sale by that Holder pursuant to the ShelfRegistration Statement.  This noticewill be effective for five Business Days. Holders who have not delivered a Questionnaire prior to theeffectiveness of the Shelf Registration Statement may receive a Questionnairefrom the Company upon request.  Uponreceipt of such a completed Questionnaire from a Holder following the effectivenessof the Shelf Registration Statement, the Company shall, as promptly asreasonably practicable, and in any event within 30 calendar days, file suchamendments to the Shelf Registration Statement or supplements to a relatedProspectus as are necessary to permit such Holder to be named in, and totransfer its Transfer Restricted Securities pursuant to, the Shelf RegistrationStatement.  Each Holder as to which theShelf Registration Statement is being effected agrees to furnish promptly tothe Company all information required to be disclosed in order to makeinformation previously furnished to the Company by such Holder not materiallymisleading.

 

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3.             ***AdditionalAmount******s***.

 

(a)        If:

 

(i)      the Shelf Registration Statement is notfiled with the Commission prior to or on the Shelf Filing Deadline;

 

(ii)       the Shelf Registration Statement has notbeen declared effective by the Commission prior to or on the EffectivenessTarget Date;

 

(iii)       except as provided in Section 4(b)(i)hereof, the Shelf Registration Statement is filed and declared effective but,during the Effectiveness Period, shall thereafter cease to be effective or failto be usable for its intended purpose without being succeeded within five BusinessDays by a post-effective amendment to the Shelf Registration Statement, asupplement to the Prospectus or a report filed with the Commission pursuant toSection 13(a), 13(c), 14 or 15(d) of the Exchange Act that cures such failureand, in the case of a post-effective amendment, is itself immediately declaredeffective; or

 

(iv)       (A) prior to or on the 60th or 90th day,as the case may be, of any Suspension Period, such suspension has not beenterminated or (B) Suspension Periods exceed an aggregate of 120 days in any360-day period,

 

(each such event referred to in foregoingclauses (i) through (iv), a **“RegistrationDefault”**), the Company hereby agrees to pay additional amounts (**“Additional Amounts”**) with respect to theNotes from and including the day following the Registration Default to butexcluding the day on which the Registration Default has been cured, accruing ata rate:

 

(x) with respect to each day during the first 90-day period duringwhich a Registration Default shall have occurred and be continuing, equal to0.25% per annum of the principal amount of the Notes, and

 

(y) with respect to each day during the period commencing on the 91stday following the day the Registration Default shall have occurred and becontinuing, equal to 0.50% per annum of the principal amount of the Notes; *provided* that in no event shall AdditionalAmounts accrue at a rate per annum exceeding 0.50% of the principal amount ofthe Notes.

 

(b)           All accrued Additional Amounts shallbe paid semiannually in arrears to Record Holders by the Company on eachAdditional Amounts Payment Date by wire transfer of immediately available fundsor by federal funds check.  Followingthe cure of all Registration Defaults

 

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relating toany particular Security, the accrual of Additional Amounts with respect to suchSecurity will cease.  The Company agreesto deliver all notices, certificates and other documents contemplated by theIndenture in connection with the payment of Additional Amounts.

 

All obligations of the Company set forth in this Section 3 that areoutstanding with respect to any Notes at the time such security ceases to be aTransfer Restricted Security shall survive until such time as all suchobligations with respect to such Transfer Restricted Security shall have beensatisfied in full.

 

The Additional Amounts set forth above shall be the exclusive monetaryremedy available to the Holders of Notes for such Registration Default.

 

4.             ***Registration Procedures***.

 

(a)        In connection with the ShelfRegistration Statement, the Company shall comply with all the provisions ofSection 4(b) hereof and shall use its commercially reasonable best efforts toeffect such registration to permit the sale of the Transfer RestrictedSecurities being sold in accordance with the intended method or methods ofdistribution thereof, and pursuant thereto, shall prepare and file with theCommission a Shelf Registration Statement relating to the registration on anyappropriate form under the Securities Act.

 

(b)        In connection with the ShelfRegistration Statement and any Prospectus required by this Agreement to permitthe sale or resale of Transfer Restricted Securities, the Company shall:

 

(i)      Use its commercially reasonable bestefforts to keep the Shelf Registration Statement continuously effective duringthe Effectiveness Period; upon the occurrence of any event or the existence ofany fact that would cause the Shelf Registration Statement or the Prospectuscontained therein, in either case including any document incorporated byreference therein, (A) to contain a material misstatement or omission or (B)not be effective and usable for resale of Transfer Restricted Securities duringthe Effectiveness Period, the Company shall file promptly an appropriate amendmentto the Shelf Registration Statement, a supplement to the Prospectus or a reportfiled with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of theExchange Act, in the case of clause (A), correcting any such misstatement oromission, and, in the case of either clause (A) or (B), use its commerciallyreasonable best efforts to cause such amendment to be declared effective andthe Shelf Registration Statement and the related Prospectus to become usablefor their intended purposes as soon as practicable thereafter.  Notwithstanding the foregoing, the Companymay suspend the

 

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effectivenessof the Shelf Registration Statement by written notice to the Holders for aperiod not to exceed an aggregate of 60 days in any 90-day period (each suchperiod, a **“Suspension Period”**) if:

 

(x)  an event occurs and is continuing as aresult of which the Shelf Registration Statement would, in the Company’sreasonable judgment, contain an untrue statement of a material fact or omit tostate a material fact required to be stated therein or necessary to make thestatements therein not misleading; and

 

(y)  the Company reasonably determines that thedisclosure of such event at such time would have a material adverse effect onthe business of the Company (and its subsidiaries, if any, taken as a whole);

 

*provided*that in the event the disclosurerelates to a previously undisclosed proposed or pending material businesstransaction, the disclosure of which would impede the Company’s ability toconsummate such transaction, the Company may extend a Suspension Period from 60days to 90 days; *provided, however*,  that Suspension Periods shall not exceed anaggregate of 120 days in any 360-day period.

 

(ii)           Prepare and file with the Commissionsuch amendments and post-effective amendments to the Shelf RegistrationStatement as may be necessary to keep the Shelf Registration Statementeffective during the Effectiveness Period; cause the Prospectus to besupplemented by any required Prospectus supplement, and as so supplemented tobe filed pursuant to Rule 424 under the Securities Act, and to comply fullywith the applicable provisions of Rules 424 and 430A under the Securities Actin a timely manner; and comply with the provisions of the Securities Act withrespect to the disposition of all securities covered by the Shelf RegistrationStatement during the applicable period in accordance with the intended methodor methods of distribution by the sellers thereof set forth in the Shelf RegistrationStatement or supplement to the Prospectus.

 

(iii)          Advise the underwriter(s), if any, andselling Holders promptly (but in any event within two Business Days) and, ifrequested by such Persons, to confirm such advice in writing:

 

(A)          when the Prospectus or any Prospectussupplement or post-effective amendment (other than a document incorporated byreference upon filing with the Commission) has been filed, and, with respect tothe Shelf

 

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RegistrationStatement or any post-effective amendment thereto (other than a documentincorporated by reference upon filing with the Commission), when the same hasbecome effective,

 

(B)           of any request by the Commission foramendments to the Shelf Registration Statement or amendments or supplements tothe Prospectus or for additional information relating thereto,

 

(C)           of the issuance by the Commission ofany stop order suspending the effectiveness of the Shelf Registration Statementunder the Securities Act or of the suspension by any state securitiescommission of the qualification of the Transfer Restricted Securities foroffering or sale in any jurisdiction, or the initiation of any proceeding forany of the preceding purposes, or

 

(D)          of the existence of any fact or thehappening of any event, during the Effectiveness Period, that makes anystatement of a material fact made in the Shelf Registration Statement, theProspectus, any amendment or supplement thereto, or any document incorporatedby reference therein untrue, or that requires the making of any additions to orchanges in the Shelf Registration Statement or the Prospectus in order to makethe statements therein not misleading.

 

If at any timethe Commission shall issue any stop order suspending the effectiveness of theShelf Registration Statement, or any state securities commission or otherregulatory authority shall issue an order suspending the qualification orexemption from qualification of the Transfer Restricted Securities under statesecurities or Blue Sky laws, the Company shall use its commercially reasonablebest efforts to obtain the withdrawal or lifting of such order at the earliestpossible time and will provide to the Initial Purchasers and each Holder who isnamed in the Shelf Registration Statement prompt notice of the withdrawal ofany such order.

 

(iv)          Furnish to each of the selling Holdersand each of the underwriter(s), if any, before filing with the Commission, acopy of the Shelf Registration Statement and copies of any Prospectus includedtherein or any amendments or supplements to the Shelf Registration Statement orProspectus (other than documents incorporated by reference after the initialfiling of the Shelf Registration Statement), which documents will be subject tothe review of such Holders and underwriter(s), if any, for a period of at leastten Business Days (in the case of the Shelf Registration

 

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Statement andProspectus) and two Business Days (in the case of any amendment or supplementthereto), and the Company will not file the Shelf Registration Statement orProspectus or any amendment or supplement to the Shelf Registration Statementor Prospectus (other than documents incorporated by reference) to which aselling Holder of Transfer Restricted Securities covered by the ShelfRegistration Statement or the underwriter(s), if any, shall reasonably objectprior to the filing thereof.  A sellingHolder or underwriter, if any, shall be deemed to have reasonably objected tosuch filing if the Shelf Registration Statement, amendment, Prospectus orsupplement, as applicable, as proposed to be filed, contains a materialmisstatement or omission.

 

(v)           Make available at reasonable timesfor inspection by one or more representatives of the selling Holders,designated in writing by a Majority of Holders whose Transfer RestrictedSecurities are included in the Shelf Registration Statement, any underwriterparticipating in any distribution pursuant to the Shelf Registration Statement,and any attorney or accountant retained by such selling Holders or any of theunderwriter(s), all financial and other records, pertinent corporate documentsand properties of the Company as shall be reasonably necessary to enable themto exercise any applicable due diligence responsibilities, and cause theCompany’s officers, directors, managers and employees to supply all informationreasonably requested by any such representative or representatives of theselling Holders, underwriter, attorney or accountant in connection with theShelf Registration Statement after the filing thereof and before itseffectiveness, *provided, however*,  that any information designated by theCompany as confidential at the time of delivery of such information shall bekept confidential by the recipient thereof.

 

(vi)          If requested by any selling Holders orthe underwriter(s), if any, promptly incorporate in the Shelf RegistrationStatement or Prospectus, pursuant to a supplement or post effective amendmentif necessary, such information as such selling Holders and underwriter(s), ifany, may reasonably request to have included therein, including, withoutlimitation: (1) information relating to the “Plan of Distribution” of theTransfer Restricted Securities, (2) information with respect to the principalamount of Notes or number of shares of Common Stock being sold to suchunderwriter(s), (3) the purchase price being paid therefor and (4) any otherterms of the offering of the Transfer Restricted Securities to be sold in suchoffering; and make all required filings of such Prospectus supplement or posteffective amendment as soon as reasonably practicable after the Company

 

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is notified ofthe matters to be incorporated in such Prospectus supplement or post effectiveamendment.

 

(vii)         Furnish to each selling Holder and eachof the underwriter(s), if any, without charge, at least one copy of the ShelfRegistration Statement, as first filed with the Commission, and of eachamendment thereto (and any documents incorporated by reference therein orexhibits thereto (or exhibits incorporated in such exhibits by reference) assuch Person may request).

 

(viii)        Deliver to each selling Holder and eachof the underwriter(s), if any, without charge, as many copies of the Prospectus(including each preliminary prospectus) and any amendment or supplement theretoas such Persons reasonably may request; subject to any notice by the Company inaccordance with this Section 4(b) of the existence of any fact or event of thekind described in Section 4(b)(iii)(D), the Company hereby consents to the useof the Prospectus and any amendment or supplement thereto by each of theselling Holders and each of the underwriter(s), if any, in connection with theoffering and the sale of the Transfer Restricted Securities covered by theProspectus or any amendment or supplement thereto.

 

(ix)           Upon request, furnish to each sellingHolder and each underwriter, if any, in such substance and scope as they mayreasonably request and as are customarily made by issuers to underwriters inprimary underwritten offerings for selling security holders, upon the date ofclosing of any sale of Transfer Restricted Securities in an UnderwrittenRegistration:

 

(A)          a certificate, dated the date of suchclosing, signed by an executive officer of the Company confirming, as of thedate thereof, matters of the type set forth in Section 5(a) of the PurchaseAgreement and such other matters as such parties may reasonably request;

 

(B)           opinions, each dated the date of suchclosing, of counsel to the Company covering such of the matters as arecustomarily covered in legal opinions to underwriters in connection withunderwritten offerings of securities; and

 

(C)           customary comfort letters, dated thedate of such closing, from the Company’s independent accountants in thecustomary form and covering matters of the type customarily covered in comfortletters to

 

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underwritersin connection with underwritten offerings of securities.

 

(x)            Set forth in full in theunderwriting agreement, if any, indemnification provisions and procedures whichprovide rights no less protective than those set forth in Section 6 hereof withrespect to all parties to be indemnified.

 

(xi)           Deliver such other documents andcertificates as may be reasonably requested by such parties to evidencecompliance with Section 4(b)(ix) above and with any customary conditionscontained in the underwriting agreement or other agreement entered into by theselling Holders pursuant to this Section 4(b)(xi).

 

(xii)          Before any public offering of TransferRestricted Securities, cooperate with the selling Holders, the underwriter(s),if any, and their respective counsel in connection with the registration andqualification of the Transfer Restricted Securities under the securities orBlue Sky laws of such jurisdictions in the United States as the selling Holdersor underwriter(s), if any, may reasonably request and do any and all other actsor things necessary or advisable to enable the disposition in suchjurisdictions of the Transfer Restricted Securities covered by the ShelfRegistration Statement; *provided, however*,that the Company shall not be required (A) to register or qualify as a foreigncorporation or a dealer of securities where it is not now so qualified or totake any action that would subject it to the service of process in anyjurisdiction where it is not now so subject or (B) to subject itself totaxation in any such jurisdiction if it is not now so subject.

 

(xiii)         Cooperate with the selling Holders andthe underwriter(s), if any, to facilitate the timely preparation and deliveryof certificates representing Transfer Restricted Securities to be sold and notbearing any restrictive legends (unless required by applicable securitieslaws); and enable such Transfer Restricted Securities to be in suchdenominations and registered in such names as the Holders or theunderwriter(s), if any, may request at least two Business Days before any saleof Transfer Restricted Securities made by such underwriter(s).

 

(xiv)        Use its commercially reasonable bestefforts to cause the Transfer Restricted Securities covered by the ShelfRegistration Statement to be registered with or approved by such other U.S.governmental agencies or authorities as may be necessary to enable the selleror sellers thereof or the

 

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underwriter(s),if any, to consummate the disposition of such Transfer Restricted Securities.

 

(xv)         Provide CUSIP numbers for all TransferRestricted Securities not later than the effective date of the ShelfRegistration Statement and provide the Trustee under the Indenture withcertificates for the Notes that are in a form eligible for deposit with The DepositoryTrust Company.

 

(xvi)        Cooperate and assist in any filingsrequired to be made with the NASD and in the performance of any due diligenceinvestigation by any underwriter that is required to be retained in accordancewith the rules and regulations of the NASD.

 

(xvii)       Otherwise use its commercially reasonablebest efforts to comply with all applicable rules and regulations of theCommission and all reporting requirements under the Exchange Act.

 

(xviii)      Cause the Indenture to be qualified underthe TIA not later than the effective date of the Shelf Registration Statementrequired by this Agreement, and, in connection therewith, cooperate with theTrustee and the holders of Notes to effect such changes to the Indenture as maybe required for such Indenture to be so qualified in accordance with the termsof the TIA; and execute and use its commercially reasonable best efforts tocause the Trustee thereunder to execute all documents that may be required toeffect such changes and all other forms and documents required to be filed withthe Commission to enable such Indenture to be so qualified in a timely manner.

 

(xix)         Cause all shares of Common Stockcovered by the Shelf Registration Statement to be listed or quoted, as the casemay be, on each securities exchange or automated quotation system on whichsimilar securities issued by the Company are then listed or quoted.

 

(xx)          Provide to each Holder upon writtenrequest each document filed with the Commission pursuant to the requirements ofSection 13 and Section 15 of the Exchange Act after the effective date of theShelf Registration Statement.

 

(xxi)         If requested by the underwriter(s),make appropriate officers of the Company available to the underwriter(s) formeetings with prospective purchasers of the Transfer Restricted Securities andprepare and present to potential investors customary “road show” or marketingmaterials in a

 

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mannerconsistent with other new issuances of other securities similar to the TransferRestricted Securities.

 

(c)           Each Holder agrees by acquisition ofa Transfer Restricted Security that, upon receipt of any notice from theCompany of the existence of any fact of the kind described in Section4(b)(iii)(D) hereof, such Holder will, and will use its reasonable best effortsto cause any underwriter(s) in an Underwritten Offering to, forthwithdiscontinue disposition of Transfer Restricted Securities pursuant to the ShelfRegistration Statement until:

 

(i)      such Holder has received copies of thesupplemented or amended Prospectus contemplated by Sections 4(b)(i) and4(b)(viii) hereof; or

 

(ii)     such Holder is advised in writing by theCompany that the use of the Prospectus may be resumed, and has received copiesof any additional or supplemental filings that are incorporated by reference inthe Prospectus.

 

If so directed by the Company, each Holderwill deliver to the Company (at the Company’s expense) all copies, other thanpermanent file copies then in such Holder’s possession, of the Prospectuscovering such Transfer Restricted Securities that was current at the time ofreceipt of such notice of suspension.

 

5.             ***Registration Expenses***.

 

(a)     All expenses incident to the Company’sperformance of or compliance with this Agreement shall be borne by the Companyregardless of whether a Shelf Registration Statement becomes effective,including, without limitation:

 

(i)      all registration and filing fees andexpenses (including filings made by any Initial Purchasers or Holders with theNASD);

 

(ii)     all fees and expenses of compliance withfederal securities and state Blue Sky or securities laws;

 

(iii)    all expenses of printing (including printingof Prospectuses and certificates for the Common Stock to be issued uponconversion of the Notes) and the Company’s expenses for messenger and deliveryservices and telephone;

 

(iv)    all fees and disbursements of counsel to theCompany and, subject to Section 5(b) below, the Holders of Transfer RestrictedSecurities;

 

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(v)     all application and filing fees inconnection with listing (or authorizing for quotation) the Common Stock on anational securities exchange or automated quotation system pursuant to therequirements hereof; and

 

(vi)    all fees and disbursements of independentcertified public accountants of the Company (including the expenses of anyspecial audit and comfort letters required by or incident to such performance).

 

The Company shall bear its internal expenses (including, withoutlimitation, all salaries and expenses of its officers and employees performinglegal, accounting or other duties), the expenses of any annual audit and thefees and expenses of any Person, including special experts, retained by theCompany.

 

(b)     In connection with the Shelf RegistrationStatement required by this Agreement, including any amendment or supplementthereto, and any other documents delivered to any Holders, the Company shallreimburse the Initial Purchasers and the Holders of Transfer RestrictedSecurities being registered pursuant to the Shelf Registration Statement, asapplicable, for the reasonable fees and disbursements of not more than onecounsel, which shall be chosen by a Majority of Holders for whose benefit theShelf Registration Statement is being prepared.

 

6.             ***Indemnification and Contribution***.

 

(a)     The Company shall indemnify and holdharmless each Holder, such Holder’s officers, directors, partners and employeesand each person, if any, who controls such Holder within the meaning of eitherSection 15 of the Securities Act or Section 20 of the Exchange Act (each, an **“Indemnified Holder”**), from and against anyloss, claim, damage or liability, joint or several, or any action in respectthereof (including, but not limited to, any loss, claim, damage, liability oraction relating to resales of the Transfer Restricted Securities), to whichsuch Indemnified Holder may become subject, insofar as any such loss, claim,damage, liability or action arises out of, or is based upon:

 

(i)      any untrue statement or alleged untruestatement of a material fact contained in (A) the Shelf Registration Statementor Prospectus or any amendment or supplement thereto or (B) any blue skyapplication or other document or any amendment or supplement thereto preparedor executed by the Company (or based upon written information furnished by oron behalf of the Company expressly for use in such blue sky application orother document or amendment on supplement) filed in any jurisdictionspecifically for the purpose of qualifying any or all of the TransferRestricted Securities under the securities law of

 

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any state orother jurisdiction (such application or document being hereinafter called a **“Blue Sky Application”**); or

 

(ii)     the omission or alleged omission to statein the Shelf Registration Statement, Prospectus or any amendment or supplementthereto, or in any Blue Sky Application, any material fact required to bestated therein or necessary to make the statements therein, in the light of thecircumstances under which they were made, not misleading,

 

and shall reimburse each Indemnified Holderpromptly upon demand for any legal or other expenses reasonably incurred bysuch Indemnified Holder in connection with investigating or defending orpreparing to defend against any such loss, claim, damage, liability or actionas such expenses are incurred; *provided*,*however*, that the Company shallnot be liable in any such case to the extent that any such loss, claim, damage,liability or action arises out of, or is based upon, (A) any untrue statementor alleged untrue statement or omission or alleged omission made in the ShelfRegistration Statement or Prospectus or amendment or supplement thereto or BlueSky Application or other document referred to in Section 6(a)(i) hereof inreliance upon and in conformity with written information furnished to theCompany by or on behalf of such Holder specifically for inclusion therein and(B) the failure of the Indemnified Holder to deliver any corrective amendmentor supplement after delivery by the Company to such Indemnified Holder of suchamendment or supplement.  The foregoingindemnity agreement is in addition to any liability which the Company mayotherwise have to any Indemnified Holder.

 

(b)           Each Holder, severally and notjointly, shall indemnify and hold harmless the Company, its officers, directorsand employees and each person, if any, who controls the Company within themeaning of the Securities Act, from and against any loss, claim, damage orliability, joint or several, or any action in respect thereof, to which theCompany or any such officer, director, employee or controlling person maybecome subject, insofar as any such loss, claim, damage or liability or actionarises out of, or is based upon:

 

(i)      any untrue statement or alleged untruestatement of any material fact contained in the Shelf Registration Statement orProspectus or any amendment or supplement thereto or any Blue Sky Applicationor other document referred to in Section 6(a)(i) hereof; or

 

(ii)     the omission or the alleged omission tostate in the Shelf Registration Statement, Prospectus or any amendment orsupplement thereto, or in any Blue Sky Application or other document referredto in Section 6(a)(i) hereof, any material fact required to be stated thereinor necessary to make the statements

 

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therein, inlight of the circumstances under which they were made, not misleading,

 

but in each case only to the extent that suchuntrue statement or alleged untrue statement or omission or alleged omissionwas made in reliance upon and in conformity with written information furnishedto the Company by or on behalf of such Holder (or its related IndemnifiedHolder) specifically for use therein, and shall reimburse the Company and anysuch officer, employee or controlling person promptly upon demand for any legalor other expenses reasonably incurred by the Company or any such officer,employee or controlling person in connection with investigating or defending orpreparing to defend against any such loss, claim, damage, liability or actionas such expenses are incurred.  In noevent shall the liability of any Holder hereunder be greater in amount than thedollar amount of the proceeds received by such Holder upon the sale of theTransfer Restricted Securities pursuant to the Shelf Registration Statementgiving rise to such indemnification obligation.  The foregoing indemnity agreement is in addition to any liabilitywhich any Holder may otherwise have to the Company and any such officer,employee or controlling person.

 

(c)           Promptly after receipt by anindemnified party under this Section 6 of notice of any claim or thecommencement of any action, the indemnified party shall, if a claim in respectthereof is to be made against the indemnifying party under this Section 6,notify the indemnifying party in writing of the claim or the commencement ofthat action; *provided*, *however*, that the failure to notify theindemnifying party shall not relieve it from any liability which it may haveunder this Section 6 except to the extent it has been materially prejudiced bysuch failure and, *provided*,  *further*,that the failure to notify the indemnifying party shall not relieve it from anyliability which it may have to an indemnified party otherwise than under thisSection 6.  If any such claim or actionshall be brought against an indemnified party, and the indemnified party shallnotify the indemnifying party thereof, the indemnifying party shall be entitledto participate therein and, to the extent that it wishes, jointly with anyother similarly notified indemnifying party, to assume the defense thereof withcounsel satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of itselection to assume the defense of such claim or action, the indemnifying partyshall not be liable to the indemnified party under this Section 6 for any legalor other expenses subsequently incurred by the indemnified party in connectionwith the defense thereof other than reasonable costs of investigation; *provided*, *however*,that a Majority of Holders shall have the right to employ a single counsel torepresent jointly a Majority of Holders and their respective officers,directors, partners, employees and controlling persons who may be subject toliability arising out of any claim in respect of which indemnity may be soughtby a Majority of Holders against the Company under this Section 6, and, if aMajority of Holders seeking

 

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indemnificationshall have been advised by legal counsel that there may be one or more legaldefenses available to them and their respective directors, officers, partners,employees and controlling persons that are different from or additional tothose available to the Company and its officers, directors, employees andcontrolling persons, the fees and expenses of a single separate counsel shallbe paid by the Company.  No indemnifyingparty shall:

 

(i)      without the prior written consent of theindemnified parties (which consent shall not be unreasonably withheld) settleor compromise or consent to the entry of any judgment with respect to anypending or threatened claim, action, suit or proceeding in respect of whichindemnification or contribution may be sought hereunder (whether or not theindemnified parties are actual or potential parties to such claim or action)unless such settlement, compromise or consent includes an unconditional releaseof each indemnified party from all liability arising out of such claim, action,suit or proceeding, or

 

(ii)     be liable for any settlement of any suchaction effected without its written consent (which consent shall not beunreasonably withheld), but if settled with its written consent or if there bea final judgment for the plaintiff in any such action, the indemnifying partyagrees to indemnify and hold harmless any indemnified party from and againstany loss or liability by reason of such settlement or judgment.

 

(d)           If the indemnification provided forin this Section 6 shall for any reason be unavailable or insufficient to holdharmless an indemnified party under Section 6(a) or 6(b) in respect of anyloss, claim, damage or liability (or action in respect thereof) referred totherein, each indemnifying party shall, in lieu of indemnifying suchindemnified party, contribute to the amount paid or payable by such indemnifiedparty as a result of such loss, claim, damage or liability (or action inrespect thereof):

 

(i)      in such proportion as is appropriate toreflect the relative benefits received by the Company from the offering andsale of the Transfer Restricted Securities on the one hand and a Holder withrespect to the sale by such Holder of the Transfer Restricted Securities on theother, or

 

(ii)     if the allocation provided by Section6(d)(i) is not permitted by applicable law, in such proportion as isappropriate to reflect not only the relative benefits referred to in Section6(d)(i) but also the relative fault of the Company on the one hand and theHolders on the other in connection with the statements or omissions or allegedstatements or alleged omissions that resulted

 

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in such loss,claim, damage or liability (or action in respect thereof), as well as any otherrelevant equitable considerations.

 

The relative benefits received by the Companyon the one hand and a Holder on the other with respect to such offering andsuch sale shall be deemed to be in the same proportion as the total netproceeds from the offering of the Notes purchased under the Purchase Agreement(before deducting expenses) received by the Company on the one hand, bear tothe total proceeds received by such Holder with respect to its sale of TransferRestricted Securities on the other.  Therelative fault of the parties shall be determined by reference to whether theuntrue or alleged untrue statement of a material fact or the omission oralleged omission to state a material fact relates to information supplied bythe Company on the one hand or the Holders on the other, the intent of theparties and their relative knowledge, access to information and opportunity tocorrect or prevent such statement or omission. The Company and each Holder agree that it would not be just andequitable if the amount of contribution pursuant to this Section 6(d) weredetermined by *pro rata*allocationor by any other method of allocation that does not take into account theequitable considerations referred to in the first sentence of this paragraph(d).  The amount paid or payable by anindemnified party as a result of the loss, claim, damage or liability, oraction in respect thereof, referred to above in this Section 6 shall be deemedto include, for purposes of this Section 6, any legal or other expensesreasonably incurred by such indemnified party in connection with investigatingor defending or preparing to defend any such action or claim.  Notwithstanding the provisions of thisSection 6, no Holder shall be required to contribute any amount in excess ofthe amount by which the total price at which the Transfer Restricted Securitiespurchased by it were resold exceeds the amount of any damages which such Holderhas otherwise been required to pay by reason of any untrue or alleged untruestatement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning ofSection 11(f) of the Securities Act) shall be entitled to contribution from anyperson who was not guilty of such fraudulent misrepresentation.  The Holders’ obligations to contribute asprovided in this Section 6(d) are several and not joint.

 

7.             ***Rule 144A***.   In the event the Company is not subject toSection 13 or 15(d) of the Exchange Act, the Company hereby agrees with eachHolder, for so long as any Transfer Restricted Securities remain outstanding,to make available to any Holder or beneficial owner of Transfer RestrictedSecurities in connection with any sale thereof and any prospective purchaser ofsuch Transfer Restricted Securities from such Holder or beneficial owner, theinformation required by Rule 144A(d)(4) under the Securities Act in order topermit resales of such Transfer Restricted Securities pursuant to Rule 144A.

 

8.             ***Participation in Underwritten Registrations***.  NoHolder may participate in any Underwritten Registration hereunder unless suchHolder:

 

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(a)         agrees to sell such Holder’s TransferRestricted Securities on the basis provided in any underwriting arrangementsapproved by the Persons entitled hereunder to approve such arrangements; and

 

(b)         completes and executes all reasonablequestionnaires, powers of attorney, indemnities, underwriting agreements,lock-up letters and other documents required under the terms of suchunderwriting arrangements.

 

9.                           ***Miscellaneous***.

 

(a)         ***Remedies***.   The Companyacknowledges and agrees that any failure by the Company to comply with itsobligations under Section 2 hereof may result in material irreparable injury tothe Initial Purchasers or the Holders for which there is no adequate remedy atlaw, that it will not be possible to measure damages for such injuriesprecisely and that, in the event of any such failure, the Initial Purchasers orany Holder may obtain such relief as may be required to specifically enforcethe Company’s obligations under Section 2 hereof.  The Company further agrees to waive the defense in any action forspecific performance that a remedy at law would be adequate.

 

(b)         ***Actions Affecting Transfer Restricted Securities***.  The Company shall not, directly or indirectly, take any action withrespect to the Transfer Restricted Securities as a class that would adverselyaffect the ability of the Holders of Transfer Restricted Securities to includesuch Transfer Restricted Securities in a registration undertaken pursuant tothis Agreement.

 

(c)         ***No Inconsistent Agreements***.   The Company will not, on or after the dateof this Agreement, enter into any agreement with respect to its securities thatis inconsistent with the rights granted to the Holders in this Agreement orotherwise conflicts with the provisions hereof.  In addition, the Company shall not grant to any of its securityholders (other than the Holders of Transfer Restricted Securities in such capacity)the right to include any of its securities in the Shelf Registration Statementprovided for in this Agreement other than the Transfer RestrictedSecurities.  Except as contained in anyagreement filed as an exhibit to the Company’s Annual Report on Form 10-K forthe year ended December 31, 2003, the Company has not previously entered intoany agreement (which has not expired or been terminated) granting anyregistration rights with respect to its securities to any Person which rightsconflict with the provisions hereof.

 

(d)         ***Amendments and Waivers***.   ThisAgreement may not be amended, modified or supplemented, and waivers or consentsto or departures from the provisions hereof may not be given, unless the

 

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Company hasobtained the written consent of a Majority of Holders or such greaterpercentage of the Holders as required by the Indenture.

 

(e)         ***Notices***.  All notices and other communications provided for or permitted hereundershall be made in writing by hand delivery, first class mail (registered orcertified, return receipt requested), telex, facsimile transmission, or aircourier guaranteeing overnight delivery:

 

(i)      if to a Holder, at the address set forthon the records of the registrar under the Indenture or the transfer agent ofthe Common Stock, as the case may be; and

 

(ii)       if to the Company:

 
| deCODE genetics, Inc.  Sturlugata 8  Reykjavik, Iceland  Attention:  Corporate Counsel  Fax: +354-570-1806  Telephone: +354-570-1943 |
|-------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                      |
| *With a copy to:*                                                                                                                         |
|                                                                                                                                      |
| Stevens & Lee, P.C.  600 College Road East  Suite 4400  Princeton, NJ 08540  United States of America                                 |
| Attention: Marsha E. Novick, Esq.  Fax: +1-610-371-7929  Telephone: +1-609-987-6677                                                       |

 

All such notices and communications shall be deemed to have been dulygiven: at the time delivered by hand, if personally delivered; five BusinessDays after being deposited in the mail, postage prepaid, if mailed; whenanswered back, if telexed; when receipt acknowledged, if transmitted byfacsimile; and on the next Business Day, if timely delivered to an air courierguaranteeing overnight delivery.

 

(f)            ***Successors and Assigns***.   This Agreement shall inure to the benefitof and be binding upon the successors and assigns of each of the parties,including without limitation and without the need for an express assignment,subsequent Holders of Transfer Restricted Securities; *provided, however*, that (i) this Agreementshall not inure to the benefit of or be binding upon a successor or assign of aHolder unless and to the extent such successor or assign acquired TransferRestricted Securities from such Holder and (ii) nothing contained herein shallbe deemed to

 

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permit anyassignment, transfer or other disposition of Transfer Restricted Securities inviolation of the terms of the Purchase Agreement or the Indenture.  If any transferee of any Holder shallacquire Transfer Restricted Securities, in any manner, whether by operation oflaw or otherwise, such Transfer Restricted Securities shall be held subject toall of the terms of this Agreement, and by taking and holding such TransferRestricted Securities such person shall be conclusively deemed to have agreedto be bound by and to perform all of the terms and provisions of this Agreement.

 

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

 

(h)           ***Securities Held by the Company or Its Affiliates***.Whenever the consent or approval of Holders of a specified percentage ofTransfer Restricted Securities is required hereunder, Transfer RestrictedSecurities held by the Company or its Affiliates shall not be counted indetermining whether such consent or approval was given by the Holders of suchrequired percentage.

 

(i)            ***Headings***.   The headings in thisAgreement are for convenience of reference only and shall not limit or otherwiseaffect the meaning hereof.

 

(j)            ***Governing Law***.   This Agreement shall be governed by, and construed in accordancewith, the laws of the State of New York.

 

(k)           ***Severability***.   If any one or more of the provisions contained herein, or theapplication thereof in any circumstance, is held invalid, illegal orunenforceable, the validity, legality and enforceability of any such provisionin every other respect and of the remaining provisions contained herein shallnot be affected or impaired thereby.

 

(l)            ***Entire Agreement***.   This Agreementis intended by the parties as a final expression of their agreement andintended to be a complete and exclusive statement of the agreement andunderstanding of the parties hereto in respect of the subject matter containedherein.  There are no restrictions,promises, warranties or undertakings, other than those set forth or referred toherein with respect to the registration rights granted by the Company withrespect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandingsbetween the parties with respect to such subject matter.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the datefirst written above.

 
|   | deCODE genetics, Inc.                                                                                                       |
|--------|-----------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                        |
|   |                                                                                                                        |
|   | By:                                                                                                                         |   |
|   |                                                                                                                        | Name: | Kari Stefansson |
|   |                                                                                                                        | Title: | President and Chief  Executive Officer |
|   |                                                                                                                        |   |   |
|   |                                                                                                                        |   |   |
|   | J.P. Morgan Securities Inc.  Lehman Brothers Inc.                                                                           |
|   | Acting severally on behalf of themselves  and the several initial purchasers named in  Schedule I to the Purchase Agreement |
|   |                                                                                                                        |   |   |
|   | By:                                                                                                                         | J.P. Morgan Securities Inc. |
|   |                                                                                                                        |   |   |
|   | By:                                                                                                                         |   |
|   |                                                                                                                        | Name: | Yaw Asamoah-Duodu |
|   |                                                                                                                        | Title: | Vice President |
|   |                                                                                                                        |   |   |
|   | By:                                                                                                                         | Lehman Brothers Inc. |
|   |                                                                                                                        |   |   |
|   | By:                                                                                                                         |   |
|   |                                                                                                                        | Name: | Steven R. Halperin |
|   |                                                                                                                        | Title: | Vice President |
|        |                                                                                                                             |  |  |  |

 

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