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EXHIBIT 10.41    
  

May     ,
2002 

 
 

FORM OF EXCHANGE AGENT AGREEMENT    
  

Wilmington
Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890 

Ladies
and Gentlemen: 

        APCOA/Standard
Parking, Inc., a company organized under the laws of the State of Delaware ("the Company"), proposes to make an offer (the "Exchange Offer") to exchange up to
$59,285,000 aggregate principal amount of its 14% Senior Subordinated Second Lien Notes due 2006 (the "New Notes") for all of the Company's outstanding 14% Senior Subordinated Second Lien Notes due
2006 (the "Old Notes"). The terms and conditions of the Exchange Offer as currently contemplated are set forth in a prospectus (the "Prospectus" included in the Company's registration statement on
Form S-4 (File No. 333-86008) as amended (the "Registration Statement") filed with the Securities and Exchange Commission (the "SEC")), and proposed to be
distributed to all record holders of the Old Notes. The Old Notes and the New Notes are collectively referred to herein as the "Notes" or the "Securities." Capitalized terms used herein and not
defined shall have the respective meanings ascribed to them in the Prospectus or the accompanying Letter of Transmittal (the "Letter of Transmittal"). 

        The
Company hereby appoints Wilmington Trust Company to act as exchange agent (the "Exchange Agent") in connection with the Exchange Offer. References hereinafter to "you" shall refer to
Wilmington Trust Company. 

        The
Exchange Offer is expected to be commenced by the Company on or about                        , 2002. The Letter of Transmittal
accompanying the Prospectus is to be used by the holders of the
Old Notes to accept the Exchange Offer, and contains instructions with respect to the delivery of Old Notes tendered. The Exchange Agent's obligations with respect to receipt and inspection of the
Letter of Transmittal in connection with the Exchange Offer shall be satisfied for all purposes hereof by (1) inspection of the electronic message transmitted to the Exchange Agent by Exchange
Offer participants in accordance with the Automated Tender Offer Program ("ATOP") of the Depositary Trust Company ("DTC"), and by otherwise observing and complying with all procedures established by
DTC in connection with ATOP, to the extent that ATOP is utilized by Exchange Offer participants, or (2) inspection of the Letter of Transmittal from each respective holder of the Old Notes. 

        The
Exchange Offer shall expire at 5:00 p.m., New York City time, on                        , 2002 or on such later date or time
to which the Company may extend the Exchange Offer (the
"Expiration Date"). Subject to the terms and conditions set forth in the Prospectus, the Company expressly reserves the right to extend the Exchange Offer from time to time and may extend the Exchange
Offer by giving oral (confirmed in writing) or written notice to you at any time before 9:00 a.m., New York City time, on the business day following the previously scheduled Expiration Date,
and in such case the term "Expiration Date" shall mean the time and date on which such Exchange Offer as so extended shall expire. 

        The
Company expressly reserves the right, in its sole discretion, to delay, amend or terminate the Exchange Offer, and not to accept for exchange any Old Notes not theretofore accepted
for exchange, in among other cases upon the occurrence of any of the conditions of the Exchange Offer specified in the Prospectus under the caption "The Exchange Offer—Expiration Date;
Extensions; Termination; Amendments." The Company will give to you as promptly as practicable oral (confirmed in writing) or written notice of any delay, amendment, termination or
non-acceptance. 

 

        In
carrying out your duties as Exchange Agent, you are to act in accordance with the following instructions: 

        1.    You
will perform such duties and only such duties as are specifically set forth herein or in the section of the Prospectus captioned the "The Exchange Offer", in the
Letter of Transmittal accompanying the Prospectus and such duties which are necessarily incidental thereto. 

        2.    You
will establish a book-entry account with respect to the Old Notes at The Depository Trust Company (the "Book-Entry Transfer Facility") for
purposes of the Exchange Offer within two business days after the date of the Prospectus, and any financial institution that is a participant in the Book-Entry Transfer Facility's systems
may make book-entry delivery of the Old Notes by causing the Book-Entry Transfer Facility to transfer such Old Notes into your account in accordance with the
Book-Entry Transfer Facility's procedure for such transfer. 

        3.    You
are to examine each of the Letters of Transmittal and certificates for Old Notes (or confirmation of book-entry transfers into your account at the
Book-Entry Transfer Facility) and any other documents delivered or mailed to you by or for holders of the Old Notes to ascertain whether: (i) the Letters of Transmittal,
certificates and any such other documents are duly executed and properly completed in accordance with instructions set forth therein and in the Prospectus and that such book-entry
confirmations are in due and proper form and contain the information required to be set forth therein, and (ii) the Old Notes have otherwise been properly tendered. In each case where the
Letter of Transmittal or any other document has been improperly completed or executed or where book-entry confirmations are not in due and proper form or omit certain information or any of
the certificates for Old Notes are not in proper form for transfer or some other irregularity in connection with the acceptance of the Exchange Offer exists, you will endeavor to inform the presenters
of the need for fulfillment of all requirements and to take any other action as may be necessary or advisable to cause such irregularity to be corrected. 

        4.    With
the approval of the Chief Financial Officer or any Vice President of the Company (such approval, if given orally, promptly to be confirmed in writing) or any other
party designated by such officer in writing, you are authorized to waive any irregularities in connection with any tender of Old Notes pursuant to the Exchange Offer. You are not otherwise authorized
to waive any such irregularities. 

        5.    Tenders
of Old Notes may be made only as set forth in the Letter of Transmittal and in the section of the Prospectus captioned "The Exchange Offer—Procedures
for Tendering" and Old Notes shall be considered properly tendered to you only when tendered in accordance with the procedures set forth therein. 

        Notwithstanding
the provisions of this paragraph 5, Old Notes which the Chief Financial Officer or any Vice President of the Company or any other party designated by any such
officer in writing shall approve as having been properly tendered shall be considered to be properly tendered (such approval, if given orally, promptly shall be confirmed in writing). 

        6.    You
shall promptly advise the Company with respect to any Old Notes delivered subsequent to the Expiration Date and accept its instructions with respect to disposition of
such Old Notes. 

        7.    You
shall accept tenders: 

        (a)  in
cases where the Old Notes are registered in two or more names only if signed by all named holders; 

        (b)  in
cases where the signing person (as indicated on the Letter of Transmittal) is acting in a fiduciary or a representative capacity only when proper evidence of his or
her authority so to act is submitted; and 

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        (c)  from
persons other than the registered holder of Old Notes provided that customary transfer requirements, including any required endorsement of the Old Note or delivery
of a properly completed bond power, in either case duly executed by each registered holder, and payment of applicable transfer taxes, are fulfilled. 

        You
shall accept partial tenders of Old Notes where so indicated and as permitted in the Letter of Transmittal and deliver certificates for Old Notes to the transfer agent for
split-up and return any untendered Old Notes to the holder (or such other person as may be designated in the Letter of Transmittal) as promptly as practicable after expiration or
termination of the Exchange Offer. 

        8.    Upon
satisfaction or waiver of all of the conditions to the Exchange Offer, the Company will notify you (such notice if given orally, promptly to be confirmed in writing)
of its acceptance, promptly after the Expiration Date, of all Old Notes properly tendered and you, on behalf of the Company, will exchange such Old Notes for New Notes and cause such Old Notes to be
canceled. Delivery of New Notes will be made on behalf of the Company by you at the rate of $1,000 principal amount of New Notes for each $1,000 principal amount of the Old Notes tendered promptly
after notice (such notice if given orally, promptly to be confirmed in writing) of acceptance of said Old Notes by the Company; provided, however, that
in all cases, Old Notes tendered pursuant to the Exchange Offer will be exchanged only after timely receipt by you of certificates for such Old Notes (or confirmation of book-entry
transfer into your account at the Book-Entry Transfer Facility), a properly completed and duly executed Letter of Transmittal (or facsimile thereof or an Agent's Message in lieu thereof)
with any required signature guarantees and any other required document. Unless otherwise instructed in writing by the Company, you shall issue New Notes only in denominations of $100 or any integral
multiple thereof; provided, that to the extent that the amount of New Notes to be issued to tendering holders of Old Notes is greater than $1,000 in principal amount, the New Notes shall be issued in
multiples of $1,000 and integral multiples of $1,000 in exchange for each $1,000 principal amount of
Old Notes, with the remaining principal amount issued in denominations of $100 or any integral multiple thereof. 

        9.    Tenders
pursuant to the Exchange Offer are irrevocable, except that, subject to the terms and upon the conditions set forth in the Prospectus and the Letter of
Transmittal, Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any time on or prior to 5:00 p.m., New York City time, on the Expiration Date in accordance with the terms of
the Exchange Offer. 

        10.  The
Company shall not be required to exchange any Old Notes tendered if any of the conditions of the Exchange Offer are not met. Notice of any decision by the Company
not to exchange any Old Notes tendered shall be given (such notices if given orally, promptly shall be confirmed in writing) by the Company to you. 

        11.  If,
pursuant to the Exchange Offer, the Company does not accept for exchange all or part of the Old Notes tendered because of an invalid tender, the occurrence of
certain other events set forth in the Prospectus or otherwise, you shall as soon as practicable after the expiration or termination of the Exchange Offer return those certificates for unaccepted Old
Notes (or effect appropriate book-entry transfer), together with any related required documents and the Letters of Transmittal relating thereto that are in your possession, to the persons
who deposited them (or effected such book-entry transfer). 

        12.  All
certificates for reissued Old Notes, unaccepted Old Notes or New Notes (other than those effected by book-entry transfer) shall be forwarded by
(a) first-class mail, postage pre-paid under a blanket surety bond protecting you and the Company from loss or liability arising out of the non-receipt or
non-delivery of such certificates or (b) by registered mail insured separately for the replacement value of each of such certificates. 

        13.  You
are not authorized to pay or offer to pay any concessions, commissions or solicitation fees to any broker, dealer, bank or other persons or to engage or utilize any
persons to solicit tenders. 

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        14.  As
Exchange Agent hereunder you: 

        (a)  will
be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value or genuineness of any of the Old Notes deposited with
you pursuant to the Exchange Offer, and will not be required to and will make no representation as to the validity, value or genuineness of the Prospectus; 

        (b)  shall
not take any legal action hereunder against any third party other than the Company, without the prior written consent of the Company, and shall not be obligated to
take any legal action hereunder which might in your reasonable judgment involve any expense or liability, unless you shall have been furnished with reasonable indemnity; 

        (c)  shall
not be liable to the Company for any action taken or omitted by you, or any action suffered by you to be taken or omitted, without negligence, willful misconduct
or bad faith on your part, by reason of or as a result of the administration of your duties hereunder in accordance with the terms and conditions of this Agreement or by reason of your compliance with
the instructions set forth herein or with any written or oral instructions delivered to you pursuant hereto, and may reasonably rely on and shall be protected in acting in good faith in reliance upon
any certificate, instrument, opinion, notice, letter, facsimile or other document or security delivered to you and reasonably believed by you to be genuine and to have been signed by the proper party
or parties; 

        (d)  may
reasonably act upon any tender, statement, request, comment, agreement or other instrument whatsoever not only as to its due execution and validity and effectiveness
of its provisions, but also as to the truth and accuracy of any information contained therein, which you shall in good faith reasonably believe to be genuine or to have been signed or represented by a
proper person or persons; 

        (e)  may
rely on and shall be protected in acting upon written notice or oral instructions from any officer of the Company; 

        (f)    shall
not advise any person tendering Old Notes pursuant to the Exchange Offer as to whether to tender or refrain from tendering all or any portion of Old Notes or as to
the market value, decline or appreciation in market value of any Old Notes that may or may not occur as a result of the Exchange Offer or as to the market value of the New Notes; 

        (g)  may
consult with counsel with respect to any questions relating to your duties and responsibilities, and the written advice or opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered or omitted by you hereunder in good faith and in reliance thereon; and 

        (h)  shall
act solely as agent of the Company and shall not assume any obligation or relationship of agency or trust for or with any of the owners or holders of the Old
Notes. 

        15.  You
shall send to all holders of Old Notes a copy of the Prospectus, the Letter of Transmittal, the Notice of Guaranteed Delivery (as defined in the Prospectus) and such
other documents (collectively, the "Exchange Offer Documents") as may be furnished by the Company to commence the Exchange
Offer and take such other action as may from time to time be requested by the Company or its counsel (and such other action as you may reasonably deem appropriate) to furnish copies of the Exchange
Offer Documents or such other forms as may be approved from time to time by the Company, to all holders of Old Notes and to all persons requesting such documents and to accept and comply with
telephone requests for information relating to the Exchange Offer, provided that such information shall relate only to the procedures for accepting (or withdrawing from) the Exchange Offer. The
Company will furnish you with copies of such documents at your request. All other requests for information relating to the Exchange Offer shall be directed to the Company, Attention: Chief 

4

 

Financial Officer or Secretary, at the Company's offices at 900 North Michigan Avenue, Suite 1600, Chicago, Illinois 60611; telephone (312) 274-2000. 

        16.  During
the Tender Period, to render daily (or more frequently if reasonably requested as to major tally figures) written reports to each of the parties named below by
posting to a secure Internet site, for which each recipient would be given a user ID and password, as to the aggregate principal amount of Old Notes which have been tendered pursuant to the Exchange
Offer and the items received by you pursuant to the Exchange Offer and this Agreement, separately reporting and giving cumulative totals as to Old Notes properly received and Old Notes improperly
received, based upon the Exchange Agent's preliminary review (and at all times subject to final determination by the Company), as of the close of business or the most recent practicable time prior to
such request, as the case may be: (either list or exhibit a sample report). 

        In
addition, you will also inform, and cooperate in making available to, the Company or any such other person or persons as the Company requests in writing from time to time prior to the
Expiration Date of such other information as it or he or she reasonably requests. Such cooperation shall include, without limitation, the granting by you to the Company and such person as the Company
may request of access to those persons on your staff who are responsible for receiving tenders, in order to ensure that immediately prior to the Expiration Date the Company shall have received
information in sufficient detail to enable it to decide whether to extend the Exchange Offer. You shall prepare a final list of all persons whose tenders were accepted, the aggregate principal amount
of Old Notes tendered, the aggregate principal amount of Old Notes accepted and the identity of any Participating Broker-Dealers and the aggregate principal amount of Exchange Notes delivered to each,
and deliver to each, and deliver said list to the Company. 

        17.  Letters
of Transmittal and Notices of Guaranteed Delivery shall be stamped by you as to the date and, after the expiration of the Exchange Offer, shall be preserved by
you for a period of time at least equal to the period of time you customarily preserve other records pertaining to the transfer of securities, or one year, whichever is longer, and thereafter shall be
delivered by you to the Company. You shall dispose of unused Letters of Transmittal and other surplus materials in accordance with your customary procedures. 

        18.  It
is understood and agreed that the securities, money or property to be deposited with or received by you as Exchange Agent (the "Property") constitute a special,
segregated account held solely for the benefit of the Company and the tendering holders of Old Notes, as their interests may appear, and the
Property shall not be commingled with the money, assets or properties of you or of any other person, firm or corporation. You hereby expressly waive any and all rights of lien, encumbrance, attachment
or set-off whatsoever, if any, against the Property so deposited, including for the payment of transfer taxes by reasons of amounts, if any, borrowed by the Company or any of its
subsidiaries or affiliates pursuant to any loan or credit agreement with you or for compensation owed to you hereunder, whether such rights arise by reason of applicable law, contract or otherwise. 

        19.  For
services rendered as Exchange Agent hereunder you shall be entitled to such compensation and reimbursement of out-of-pocket expenses as
agreed upon by you and the Company as set out in the attached Schedule A. 

        20.  You
hereby acknowledge receipt of the Prospectus, the Letter of Transmittal and the other documents associated with the Exchange Offer attached hereto and further
acknowledge that you have examined each of them. Any inconsistency between this Agreement, on the one hand, and the Prospectus, the Letter of Transmittal and such other forms (as they may be amended
from time to time), on the other hand, shall be resolved in favor of the Prospectus, the Letter of Transmittal and such other forms, except with respect to the duties, liabilities and indemnification
of you as Exchange Agent which shall be controlled by this Agreement. 

5

 

        21.  The
Company agrees to indemnify and hold you harmless in your capacity as Exchange Agent hereunder against any liability, cost or expense, including reasonable
attorneys' fees and expenses, arising out of or in connection with your appointment as Exchange Agent and the performance of your duties hereunder, including, without limitation, any act, omission,
delay or refusal made by you in reasonable reliance upon any signature, endorsement, assignment, certificate, order, request, notice, instruction or other instrument or document reasonably believed by
you to be valid, genuine and sufficient and in accepting any tender or effecting any transfer of Old Notes reasonably believed by you in good faith to be authorized, and in delaying or refusing in
good faith to accept any tenders or effect any transfer of Old Notes; provided, however, that the Company shall not be liable for indemnification or
otherwise for any loss, liability, cost or expense to the extent arising out of your negligence, willful misconduct or bad faith. The Company's obligations under this paragraph 21 shall survive
the termination of this Agreement and the discharge of your obligation hereunder and any other termination of this Agreement under any federal or state bankruptcy law. 

        [22.  You
shall arrange to comply with all requirements under the tax laws of the United States, including those relating to missing Tax Identification Numbers,
and shall file any appropriate reports with the Internal Revenue Service. The Company understands that you are required, in certain instances, to deduct thirty percent (30%) with respect to interest
paid on the New Notes and proceeds from the sale, exchange, redemption or retirement of the New Notes from holders who have not supplied their correct Taxpayer Identification Numbers or required
certification. Such funds will be turned over to the Internal Revenue Service in accordance with applicable regulations.] 

        23.  You
shall notify the Company of the amount of any transfer taxes payable in respect of the exchange of Old Notes and shall deliver or cause to be delivered, in a timely
manner, to each governmental authority to which any transfer taxes are payable in respect of the exchange of Old Notes your check in the amount of all transfer taxes so payable, and, subject to the
provisions of Section 7(c) of this Agreement, the Company shall reimburse you for the amount of any and all transfer taxes payable in respect of the exchange of Old Notes;  provided, however,
that you shall reimburse the Company for amounts refunded to you in respect of your payment of any such transfer taxes, at such time
as such refund is received by you. 

        24.  This
Agreement and your appointment as Exchange Agent hereunder shall be construed and enforced in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such state, and without regard to conflicts of law principles, and shall inure to the benefit of, and the obligations created hereby shall be
binding upon, the successors and assigns of each of the parties hereto and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement. Without limitation of the foregoing, the parties hereto expressly agree that no holder of Old Notes or Exchange Notes shall have
any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 

        25.  This
Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which taken together shall constitute one and the
same agreement. 

        26.  In
case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby. 

        27.  This
Agreement shall not be deemed or construed to be modified, amended, rescinded, canceled or waived, in whole or in part, except by a written instrument signed by a
duly authorized representative of the party to be charged. 

6

 

        28.  Unless
otherwise provided herein, all notices, requests and other communications to any party hereunder shall be in writing (including facsimile) and shall be given to
such party, addressed to it, as its address or telecopy number set forth below: 

If
to the Company: 

APCOA/Standard
Parking, Inc.

900 North Michigan Avenue

Suite 1600

Chicago, Illinois 60611

  

Facsimile: (312) 274-6160

Attention: Chief Financial Officer or Secretary 

If
to the Exchange Agent: 

Wilmington
Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-1615

   

Facsimile: (302) 636-4145

Attention: Corporate Trust Operations 

        29.  Unless
terminated earlier by the parties hereto, this Agreement shall terminate 90 days following the Expiration Date. Notwithstanding the foregoing,
Paragraphs 18, 19, 21 and 22 shall survive the termination of this Agreement. Upon any termination of this Agreement, you shall promptly deliver to the Company any certificates for Notes, funds
or property (including, without limitation, Letters of Transmittal and any other documents relating to the Exchange Offer) then held by you as Exchange Agent under this Agreement. 

        30.  This
Agreement shall be binding and effective as of the date hereof. 

7

 

        Please
acknowledge receipt of this Agreement and confirm the arrangements herein provided by signing and returning the enclosed copy. 

	 	 	 	APCOA/STANDARD PARKING, INC.
	

 	

 	
 	

By:	

    
 Name:

Title:
	

Accepted as the date

first above written:	
 	

 	

 
	

WILMINGTON TRUST COMPANY,

as exchange agent	
 	

 	

 
	

By:	

    
 Name:

Title:	
 	

 	

 

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QuickLinks

EXHIBIT 10.41

FORM OF EXCHANGE AGENT AGREEMENTExhibit 4.18

REGISTRATION RIGHTS
AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”)
is made and entered into as of May 1, 2002, by and between Isis
Pharmaceuticals, Inc., a Delaware corporation (the “Company”) and UBS
Warburg LLC and the other Initial Purchasers named in the Purchase Agreement
referred to below (collectively, the “Initial Purchasers”), for whom UBS
Warburg LLC is acting as representative, pursuant to that certain Purchase
Agreement, dated as of April 26, 2002 (the “Purchase Agreement”) between
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 their
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 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.

“Notes” means the 5 1⁄2% Convertible
Subordinated Notes due 2009 of the Company to be purchased pursuant to the
Purchase Agreement.

“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 $0.001 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.

 

1

 

“Damages Payment Date” means each interest
payment date under the Indenture in the case of Notes, and each May 1 and
November 1 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 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 shorter period of time (x) after which the
Registrable Securities held by each Notice Holder are eligible for resale 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
third paragraph of this Agreement.

“Indenture” means the Indenture, dated as of
May 1, 2002, between the Company and Wells Fargo Bank Minnesota, N.A., 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 Amount” has the meaning
set forth in Section 2(e) hereof.

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

 “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 April 26, 2002 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 such Holder has not sold all Registrable Securities
that have been registered for resale pursuant to a Notice and Questionnaire.

 

2

 

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

“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 explicitly deemed to be incorporated by reference
in such Prospectus.

“Record Holder” means (i) with respect to any
Damages Payment Date relating to any Notes as to which any such 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 such
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,
whether or not in accordance with the Shelf Registration Statement and (y) the
date that is two 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 shorter period of
time after which the Registrable Securities held by each Notice Holder are
eligible for resale as permitted by Rule 144(k) under the Securities Act or any
successor provisions thereunder.

“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 explicitly 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.

 

3

 

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

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

“Subsequent Shelf Registration Statement” has
the meaning set forth in Section 2(b) 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 Wells Fargo Bank Minnesota, N. A., 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 (a “Shelf
Registration Statement”) registering the resale from time to time by
Holders thereof of all of the Registrable Securities (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 commercially 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 (subject to the provisions of Section 3(i)) 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 on or prior to the date that is ten (10)
Business Days prior to such time 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 (subject
to the provisions of Section 3(i)) use its commercially reasonable best efforts
to obtain the prompt withdrawal of any order suspending the effectiveness
thereof, and in any event shall (subject to the provisions of Section 3(i)) within
thirty (30) days of such cessation 

 

4

 

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 (a “Subsequent Shelf
Registration Statement”).  If a
Subsequent Shelf Registration Statement is filed, the Company shall (subject to
the provisions of Section 3(i)) use its commercially reasonable best efforts to
cause the Subsequent Shelf Registration Statement to become effective as
promptly as is practicable after such filing 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 the
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 or by the Trustee on behalf of
the Holders of the Registrable Securities covered by such Shelf Registration
Statement in order to exercise the rights of such Initial Purchasers or
Holders, as the case may be, hereunder.

(d)   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 the Shelf Registration Statement; provided that Holders of
Registrable Securities shall have at least twenty (20) Business Days from the
date on which a Notice and Questionnaire is first sent to such Holders by the
Company to complete and return such Notice and Questionnaire to the Company in
order to be included in the initial filing of the Initial Shelf Registration
Statement.  From and after the date the
Initial Shelf Registration Statement is declared effective, the Company shall,
as promptly as practicable after the date a Notice and Questionnaire is
delivered, and in any event within the later of (x) fifteen (15) Business Days
after such date or (y) fifteen (15) 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 ten (10) Business Days of such delivery date, (i)
if required by applicable law, file with the SEC a post-effective amendment to
the Shelf Registration Statement or, if required by applicable law, prepare and
file a supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
so that the Holder delivering such Notice and Questionnaire is named as a
selling securityholder in the 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
and, if the Company shall file a post-effective amendment to the Shelf
Registration Statement, use its commercially reasonable best efforts to cause
such post-effective amendment 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”) that is thirty (30) days after the date such
post-effective amendment is required by this clause to be filed; (ii) provide
such Holder a reasonable number of copies of any documents filed pursuant to
Section 2(d)(i); and (iii) notify such Holder as promptly as 

 

5

 

practicable after the effectiveness under the
Securities Act of any post-effective amendment filed pursuant to Section
2(d)(i); provided that if such Notice and Questionnaire is delivered
during a Suspension Period, or a Suspension Period is put into effect within
ten (10) 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 (i), (ii) and (iii) above within fifteen (15) Business
Days after expiration of the Suspension Period in accordance with Section 3(i);
provided  further that 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 the
Prospectus for effecting resales of Registrable Securities.  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 the 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 or (iii) the Initial Shelf Registration Statement is filed and
declared effective but shall thereafter cease to be effective (without being
succeeded immediately by an additional 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 sixty (60)
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 (iii) 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 date on which the duration of the ineffectiveness or
unusability of the Initial Shelf Registration Statement in any period exceeds
the number of days permitted by clause (iii) hereof in the case of clause
(iii), 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), and the date the Initial Shelf Registration
Statement becomes effective or usable again in the case of an Event of the type
described in clause (iii).

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 and not as a penalty, an amount
(the “Liquidated Damages Amount”) at the rate described below, payable
periodically on each Damages Payment Date to Record Holders of Notes that are
Registrable 

 

6

 

Securities and of shares of
Underlying Common Stock issued upon conversion of Notes that are Registrable
Securities, as the case may be, 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, at a rate per annum
equal to one-half of one percent (0.5%) for the next 90-day period and
thereafter at a rate per annum equal to 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, in each case determined as of the Business Day immediately
preceding the next Damages Payment Date. 
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.  Notwithstanding the foregoing, the parties
agree that the sole damages payable for a violation of the terms of this
Agreement with respect to which liquidated damages are expressly provided shall
be such liquidated damages.

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 8(k)).

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 the Shelf Registration Statement to be filed or declared
effective or available for effecting resales of Registrable Securities in
accordance with the provisions hereof.

 

7

 

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 commercially
reasonable best efforts to cause each such Shelf Registration Statement to
become effective and remain effective as provided herein (subject to the
provisions of Section 3(i)); 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 copies of all such documents
proposed to be filed and use its commercially reasonable best efforts to
reflect in each such document when so filed with the SEC such comments as such
counsel reasonably shall propose within three (3) Business Days of the delivery
of such copies to the Initial Purchasers and such counsel.

(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 continuously effective
until the expiration of the Effectiveness Period (subject to the provisions of
Section 3(i)); 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
commercially 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 (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, when the same has been declared
effective, (ii) of any request, following the effectiveness of the Initial
Shelf Registration Statement under the Securities Act, by the SEC or any other
federal or state governmental authority for amendments or supplements to any
Shelf Registration Statement or 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 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 and (v) of the determination by the Company that a post-effective
amendment to a 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.

 

8

 

(d)   Use its commercially 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 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 practicable incorporate in a Prospectus
supplement or 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 shall determine to be required to be
included therein by applicable law or so that a Shelf Registration Statement or
a Prospectus Supplement does not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, and 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 opinion of counsel for the Company, are not required under applicable law
or so that a Shelf Registration Statement or a Prospectus Supplement does not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

(f)    As promptly as practicable furnish, upon
request, to each Notice Holder and counsel for the Holders, without charge, at
least one (1) conformed copy of the 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
or such counsel).

(g)   During the Effectiveness Period, deliver to
each Notice Holder 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 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 the Shelf Registration Statement, use its
commercially 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 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 the
Shelf 

 

9

 

Registration Statement, use its commercially
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 as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for this
Agreement 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 the Shelf Registration Statement or the
initiation of proceedings with respect to the 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 the 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 commercially reasonable best efforts to cause it
to be declared effective as promptly as is practicable, and (ii) give notice to
the Notice Holders and counsel for the Holders and for the Initial Purchasers
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 commercially
reasonable best efforts to ensure that the use of the Prospectus may be resumed
(x) in the case of 

 

10

 

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 omits 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 omits 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 sixty (60) days in any
twelve (12) month period.

(j)    Make available for inspection during normal
business hours by representatives for the Notice Holders of such Registrable
Securities, and any broker-dealers, attorneys and accountants retained by such
Notice Holders, 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 broker-dealers, attorneys or accountants 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 Company that
any information that is provided to such persons in the course of such due
diligence examination 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 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), (iii) such information is or 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, and provided that the foregoing inspection and information
gathering shall 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 as they relate to the registration or qualification of
the Registrable Securities.

(l)    Make generally available to its
securityholders, and to furnish to the Initial Purchasers upon request, an
earnings statement of the Company (which will satisfy the provisions of Section
11(a) of the Securities Act) covering a period of twelve months beginning after
the effective date of the Shelf Registration Statement (as defined in Rule
158(c) of the Securities Act) and ending not later than 15 months thereafter.

 

11

 

(m)  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
(2) Business Days prior to any sale of such Registrable Securities.

(n)   Provide a CUSIP number for all Registrable
Securities covered by each Shelf Registration Statement not later than the
effective date of such 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.

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

(p)   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 its customary press release
practices.

(q)   Enter into such customary agreements and take
all such other necessary actions in connection therewith (including those
requested by the holders of a majority of the Registrable Securities being
sold) in order to expedite or facilitate disposition of such Registrable
Securities.

(r)    Cause the Indenture to be qualified under
the TIA not later than the effective date of any 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 commercially
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.

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 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 

 

12

 

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 declared effective.  Such
fees and expenses (“Registration Expenses”) shall include, without
limitation, (i) all registration and filing fees (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 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) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities in a form eligible for
deposit with The Depository Trust Company), (iii) duplication and mailing
expenses relating to copies of any Shelf Registration Statement or Prospectus delivered
to any Holders hereunder, (iv) fees and disbursements of counsel for the
Company and the reasonable fees and disbursements of counsel for the Holders in
connection with the Shelf Registration Statement, (v) 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.

Section
6.  Indemnification; Contribution.

(a)   The Company agrees to indemnify, defend and
hold harmless each Holder and each person who controls any Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(each, a “Holder Indemnified Party”), from and against any loss, damage,
expense, liability or claim (including the reasonable cost of investigation)
which such Holder Indemnified Party may incur under the Securities Act, the
Exchange Act or otherwise, insofar as such loss, damage, expense, liability or
claim 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 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 

 

13

 

any preliminary prospectus,
in the light of the circumstances under which they were made, not misleading,
except insofar as any such loss, damage, expense, liability or claim 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 any Holder
to the Company expressly for use therein, including, without limitation, all
information regarding such Holder and it affiliates included in the Notice and Questionnaire.

(b)   Each Holder, severally and not jointly,
agrees to indemnify, defend and hold harmless the Company, its directors and
officers 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
or claim (including the reasonable cost of investigation) which such Company
Indemnified Party may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, damage, expense, liability or claim 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 or in any amendment or supplement thereto or in any
preliminary prospectus, including, without limitation, all information
regarding such Holders and its affiliates included in the Notice and
Questionnaire, 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.  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.

(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 employed counsel to have charge of the defense of such
Proceeding within 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 

 

14

 

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 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 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 or
claims 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 or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Holders 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 on the other in connection
with the statements or omissions which resulted in such losses, damages,
expenses, liabilities or claims, as well as any other relevant equitable
considerations.  The relative fault of
the Company on the one hand and of the Holders 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 and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.  The amount
paid or payable 

 

15

 

by a party as a result of
the losses, damages, expenses, liabilities and claims 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 and the Holders 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 any person controlling any Holder, 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.

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 in order to facilitate sales by such Holder pursuant to Rule 144), 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
limitation 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
such filing requirements, 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 in order to allow the Company to be
eligible to file registration statements on Form S-1 

 

16

 

or Form S-3 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.  Miscellaneous.

(a)   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.

(b)   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 of the then outstanding Underlying Common Stock constituting
Registrable Securities (with Holders of Notes deemed to be the Holders, for
purposes of this Section, of the number of outstanding shares of Underlying Common
Stock into which such Notes are or would be convertible as of the date on which
such consent is requested). 
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 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 8(b), 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.

(c)   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, return
receipt requested, 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:

 

17

 

Isis Pharmaceuticals, Inc.

2292 Faraday Avenue

Carlsbad, California  92008

Attention:  B. Lynne Parshall

Telecopy No.: (760) 603-3861

 

with a copy to (for informational purposes only):

 

Cooley Godward LLP

4401 Eastgate Mall

San Diego, California  92121

Attention:  Julie M. Robinson

Telecopy No.: (858) 550-6420

 

(z)                         if to the
Initial Purchasers, to:

 

c/o UBS Warburg 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 Warburg LLC

299 Park Avenue

New York, New York 10171

Attention: Legal Department

Telecopy No.: (212) 821-4042

 

UBS Warburg LLC

677 Washington Boulevard

Stamford, Connecticut 06901

Attention: Legal Department

Telecopy No.: (203) 719-0680

 

or to such other address as such person may have furnished to the other
persons identified in this Section 8(c) in writing in accordance herewith.

(d)   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 

 

18

 

Securities) shall not be
counted in determining whether such consent or approval was given by the
Holders of such required percentage.

(e)   Successors and Assigns.  Any person who purchases any Registrable
Securities from the Initial Purchasers or any Holder shall be deemed, for
purposes of this Agreement, to be an assignee of the Initial Purchasers 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.

(f)    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.

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

(h)   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.

(i)    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 their commercially 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.

(j)    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.

(k)   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.

 

19

 

(l)    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 the Initial Purchasers. 
Each of the Company, the Initial Purchasers and the Holders 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.

(m)  Counsel for the Holders.  Counsel for the Holders shall be chosen by
holders of a majority in interest of the outstanding Registrable Securities,
determined by reference to the aggregate principal amount of outstanding Notes
and considering for these purposes Underlying Common Stock to be equivalent to
the aggregate principal amount of Notes converted in order to result in the
issuance of such Underlying Common Stock. 
Once so chosen, such counsel shall act as counsel for the Holders until
such counsel is unable or unwilling to continue to so act.  The
Company shall have no obligation with respect to providing notice or documents
to counsel for the Holders pursuant to Section 3 hereof until such time as the
Company has been furnished with the contact information for such counsel.

 

20

 

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

 

	
   

  	
  ISIS PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ B. Lynne Parshall

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

Confirmed and accepted as of the date

first above written on behalf of itself
 and the other several Initial
Purchasers:

 

	
  UBS
  WARBURG LLC

  	
   

  
	
  ROBERTSON
  STEPHENS, INC.

  	
   

  
	
  NEEDHAM
  & COMPANY, INC.

  	
   

  
	
  ROTH
  CAPITAL PARTNERS, LLC

  	
   

  
	
   

  	
   

  
	
  By:  UBS WARBURG LLC

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Steve Meehan

  	
   

  
	
   

  	
  Name:  Steve Meehan

  	
   

  
	
   

  	
  Title:
  Managing Director

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  S. Kelly

  	
   

  
	
   

  	
  Name:  S. Kelly

  	
   

  
	
   

  	
  Title:  Director

  	
   

  
	
   

  	
   

  	
   

  

 

 

21

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