Document:

Exhibit 4.2

 

SHAREHOLDERS AGREEMENT

 

BY AND AMONG

 

SEACUBE CONTAINER LEASING
LTD.

 

AND

 

SEACASTLE OPERATING COMPANY
LTD.

 

 

Dated as of October 27, 2010

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  
	
  ARTICLE I

  
	
   

  
	
  DEFINITIONS

  
	
   

  
	
  Section 1.1

  	
  Certain
  Defined Terms

  	
  1

  
	
  Section 1.2

  	
  Construction

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  	
   

  
	
  TRANSFER

  
	
   

  	
   

  
	
  Section 2.1

  	
  Binding
  Effect on Transferees

  	
  5

  
	
  Section 2.2

  	
  Additional
  Purchases

  	
  5

  
	
  Section 2.3

  	
  Charter
  Provisions

  	
  5

  
	
  Section 2.4

  	
  Legend

  	
  6

  
	
  Section 2.5

  	
  Share
  Certificates

  	
  6

  
	
  ARTICLE III

  
	
   

  
	
  BOARD OF DIRECTORS

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Board

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  
	
  REGISTRATION RIGHTS

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Demand
  Registration

  	
  7

  
	
  Section 4.2

  	
  Piggyback
  Registrations

  	
  10

  
	
  Section 4.3

  	
  Shelf
  Registration

  	
  11

  
	
  Section 4.4

  	
  Withdrawal
  Rights

  	
  13

  
	
  Section 4.5

  	
  Registration
  Procedures

  	
  13

  
	
  Section 4.6

  	
  Registration
  and Offering Expenses

  	
  18

  
	
  Section 4.7

  	
  Indemnification

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Headings

  	
  22

  
	
  Section 5.2

  	
  Entire
  Agreement

  	
  22

  

 

i

 

	
  Section 5.3

  	
  Further Actions; Cooperation

  	
  22

  
	
  Section 5.4

  	
  Notices

  	
  22

  
	
  Section 5.5

  	
  Applicable Law

  	
  23

  
	
  Section 5.6

  	
  Severability

  	
  23

  
	
  Section 5.7

  	
  Successors and Assigns

  	
  23

  
	
  Section 5.8

  	
  Amendments

  	
  24

  
	
  Section 5.9

  	
  Waiver

  	
  24

  
	
  Section 5.10

  	
  Counterparts

  	
  24

  
	
  Section 5.11

  	
  Submission To Jurisdiction

  	
  24

  
	
  Section 5.12

  	
  Injunctive Relief

  	
  24

  
	
  Section 5.13

  	
  Recapitalizations, Exchanges, Etc. Affecting the Common
  Shares; New Issuance

  	
  25

  
	
  Section 5.14

  	
  Termination

  	
  25

  
	
  Section 5.15

  	
  Rule 144

  	
  25

  
	
  Section 5.16

  	
  Information 

  	
  26

  

 

ii

 

SHAREHOLDERS
AGREEMENT

 

THIS SHAREHOLDERS AGREEMENT (this “Agreement”) is made as of October
27, 2010, by and between Seacastle Operating Company Ltd., a Bermuda exempted
company (the “Initial Shareholder”), and SeaCube Container Leasing Ltd.,
a Bermuda exempted company (the “Company”).  Unless otherwise indicated, references to
articles and sections shall be to articles and sections of this Agreement.

 

WHEREAS, the Initial Shareholder is a holder of Common Shares (as
hereinafter defined); and

 

WHEREAS, the Company has agreed to provide the registration rights and
other rights set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1             Certain Defined Terms.  For purposes of this Agreement, the following
terms shall have the following meanings:

 

(a)      “Affiliate”
shall have the meaning set forth in Rule 12b-2 promulgated under the
Exchange Act; provided that no Shareholder shall be deemed an Affiliate of any
other Shareholder solely by reason of any investment in the Company.

 

(b)      “Agreement”
shall have the meaning assigned to it in the preamble.

 

(c)      A Person shall
be deemed to “Beneficially Own” securities if such Person is deemed to be a “beneficial
owner” within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act
as in effect on the date of this Agreement.

 

(d)      “Board” shall
mean the board of directors of the Company.

 

(e)      “Bye-laws”
shall mean the bye-laws of the Company, as may be amended and/or restated from
time to time.

 

(f)       “Commission”
shall mean the United States Securities and Exchange Commission or any
successor agency.

 

(g)      “Common Shares”
shall mean the Company’s common shares, par value $0.01 per share, and any and
all securities of any kind whatsoever of the Company which may be issued and
outstanding on or after the date hereof in respect of, in exchange for, or upon

 

 

conversion
of Common Shares pursuant to a merger, amalgamation, consolidation, share
split, share dividend, recapitalization of the Company or otherwise.

 

(h)      “Company” shall
have the meaning assigned to it in preamble.

 

(i)       “Company
Securities” shall mean (i) any Common Shares and (ii) any other
securities of the Company entitled to vote generally in the election of
directors of the Company.

 

(j)       “Demand” shall
have the meaning assigned to it in Section 4.1(a).

 

(k)      “Demand
Registration” shall have the meaning assigned to it in Section 4.1(a).

 

(l)       “Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

 

(m)     “FIG LLC” shall
mean FIG LLC, a Delaware limited liability company, or any other Person
designated as “FIG LLC” by Fortress in a written notice to the Company.

 

(n)      “Fortress
Affiliate Shareholder” shall mean (A) any director of the Company who may
be deemed an Affiliate of Fortress, (B) any director or officer of
Fortress and (C) any investment funds (including any managed accounts)
managed directly or indirectly by Fortress or its Affiliates; provided that no
person who is a Fortress Affiliate Shareholder pursuant to the foregoing
clauses (A) or (B) shall be required to take any action under this
agreement (including voting any Company Securities) which would cause such
person to be deemed a member of a “group” under Section 13(d) of the
Exchange Act (but, for the avoidance of doubt, any Company Securities
Beneficially Owned by such persons shall be counted towards the thresholds in Section 3.1(a)(i)-(iv)).

 

(o)      “Fortress”
shall mean Fortress Investment Group LLC.

 

(p)      “Form S-3”
shall have the meaning assigned to it in Section 4.3(a).

 

(q)      “Free Writing
Prospectus” shall mean a free writing prospectus, as defined in Rule 405
under the Securities Act.

(r)       “Identified
Director” shall have the meaning assigned to it in Section 3.1(e)(i).

 

(s)      “Initial Public
Offering” shall mean the initial public offering of Common Shares pursuant to
an effective registration statement under the Securities Act.

 

(t)       “Initial
Shareholder” shall have the meaning assigned to it in preamble.

 

(u)      “Inspectors”
shall have the meaning assigned to it in Section 4.5(a)(viii).

 

2

 

(v)      “IPO
Underwriting Agreement” shall mean the underwriting agreement, dated October 27,
2010, by and among the Company, the Initial Shareholder and the underwriters
named therein.

 

(w)     “Issuer Free
Writing Prospectus” shall mean an issuer free writing prospectus, as defined in
Rule 433 under the Securities Act.

 

(x)       “Losses” shall
have the meaning assigned to it in Section 4.7(a).

 

(y)      “Memorandum of
Association” shall mean the memorandum of association of the Company, as may be
amended and/or restated from time to time.

 

(z)      “Notice” shall
have the meaning assigned to it in Section 3.1(e)(i).

 

(aa)    “Notification
Event” shall have the meaning assigned to it in Section 3.1(e).

 

(bb)    “Offering
Expenses” shall have the meaning assigned to it in Section 4.6.

 

(cc)    “Other Demanding
Sellers” shall have the meaning assigned to it in Section 4.2(b).

 

(dd)    “Other Proposed
Sellers” shall have the meaning assigned to it in Section 4.2(b).

 

(ee)    “Permitted
Transferee” shall mean, with respect to each Shareholder, (i) any other
Shareholder, (ii) such Shareholder’s Affiliates and (iii) in the case
of any Shareholder, (A) any member or general or limited partner of such
Shareholder (including, without limitation, any member of the Initial
Shareholder), (B) any corporation, partnership, limited liability company
or other entity that is an Affiliate of such Shareholder or any general or
limited partner of such Shareholder (collectively, “Shareholder Affiliates”), (C) any
investment funds managed directly or indirectly by such Shareholder or any
Shareholder Affiliates (a “Shareholder Fund”), (D) any general or limited
partner of any Shareholder Fund, (E) any managing director, general
partner, director, limited partner, officer or employee of any Shareholder
Affiliate, or any spouse, lineal descendant, sibling, parent, heir, executor,
administrator, testamentary trustee, legatee or beneficiary of any of the
foregoing persons described in this clause (E) (collectively, “Shareholder
Associates”) or (F) any trust, the beneficiaries of which, or any
corporation, limited liability company or partnership, the shareholders,
members or general or limited partners of which, consist solely of any one or
more of such Shareholder, any general or limited partner of such Shareholder,
any Shareholder Affiliates, any Shareholder Fund, any Shareholder Associates,
their spouses or their lineal descendants.

 

(ff)      “Person” shall
mean any individual, firm, corporation, partnership, limited liability company
or other entity, and shall include any successor (by merger or otherwise) of
such entity.

 

(gg)    “Piggyback
Notice” shall have the meaning assigned to it in Section 4.2(a).

 

(hh)    “Piggyback
Registration” shall have the meaning assigned to it in Section 4.2(a).

 

(ii)      “Piggyback
Seller” shall have the meaning assigned to it in Section 4.2(a).

 

3

 

(jj)      “Public
Offering” shall mean an offering of equity securities of the Company pursuant
to an effective registration statement under the Securities Act, including an
offering in which Shareholders are entitled to sell Common Shares pursuant to
the terms of this Agreement.

 

(kk)    “Records” shall
have the meaning assigned to it in Section 4.5(a)(viii).

 

(ll)      “Registrable
Amount” shall mean an amount of Common Shares equal to 1% of the Common Shares
issued and outstanding immediately after the consummation of the Initial Public
Offering.

 

(mm)  “Registrable
Securities” shall mean any Common Shares currently owned or hereafter acquired
by any Shareholder. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when (x) a
registration statement registering such securities under the Securities Act has
been declared effective and such securities have been sold or otherwise
transferred by the holder thereof pursuant to such effective registration
statement or (y) such securities are sold in accordance with Rule 144
(or any successor provision) promulgated under the Securities Act.

 

(nn)    “Registration
Expenses” shall have the meaning assigned to it in Section 4.6.

 

(oo)    “Requesting
Shareholder” shall have the meaning assigned to it in Section 4.1(a).

 

(pp)    “Securities Act”
shall mean the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

(qq)    “Selling Holders”
shall have the meaning assigned to it in Section 4.5(a)(i).

 

(rr)      “Shareholders”
shall mean (i) the Initial Shareholder, (ii) each Fortress Affiliate
Shareholder and (iii) each Permitted Transferee who becomes a party to or
bound by the provisions of this Agreement in accordance with the terms hereof
or a Permitted Transferee thereof who is entitled to enforce the provisions of
this Agreement in accordance with the terms hereof, in each case of clauses
(i), (ii) and (iii) to the extent that the Initial Shareholder,
Fortress Affiliate Shareholders and Permitted Transferees, together, hold at
least a Registrable Amount.

 

(ss)    “Shelf Notice”
shall have the meaning assigned to it in Section 4.3(a).

 

(tt)      “Shelf
Registration Effectiveness Period” shall have the meaning assigned to it in Section 4.3(d).

 

(uu)    “Shelf
Registration Statement” shall have the meaning assigned to it in Section 4.3(a).

 

(vv)    “Shelf
Underwritten Offering” shall have the meaning assigned to it in Section 4.3(f).

 

(ww)  “Suspension Period”
shall have the meaning assigned to it in Section 4.3(e).

 

4

 

(xx)     “Underwritten
Offering” shall mean a sale of securities of the Company to an underwriter or
underwriters for reoffering to the public.

 

(yy)    “Voting Power of
the Company” shall mean the total number of votes that may be cast in the
election of directors of the Company if all issued and outstanding Company
Securities were present and voted at a meeting held for such purpose.

 

Section 1.2             Construction.  For the purposes of this Agreement (i) words
(including capitalized terms defined herein) in the singular shall be held to
include the plural and vice versa and words (including capitalized terms
defined herein) of one gender shall be held to include the other gender as the
context requires, (ii) the terms “hereof,” “herein” and “herewith” and
words of similar import shall, unless otherwise stated, be construed to refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article and Section references are to Articles and
Sections of this Agreement, unless otherwise specified, (iii) the word “including”
and words of similar import when used in this Agreement shall mean “including,
without limitation,” (iv) all references to any period of days shall be
deemed to be to the relevant number of calendar days unless otherwise
specified, and (v) all references herein to “$” or dollars shall refer to
United States dollars, unless otherwise specified.

 

ARTICLE II

TRANSFER

 

Section 2.1             Binding Effect on Transferees.  A Permitted Transferee shall become a
Shareholder hereunder, without any further action by the Company, following a
transfer by a Shareholder of Company Securities to such Permitted Transferee
upon the execution by such Permitted Transferee of a joinder providing that
such Person shall be bound by and shall fully comply with the terms of this
Agreement (including the provisions of Article IV with respect to the
Company Securities being transferred to such transferee).  The Fortress Affiliate Shareholders shall be
deemed to be Shareholders without any further action.

 

Section 2.2             Additional Purchases. Any
Company Securities owned by a Shareholder on or after the date of this
Agreement shall have the benefit of and be subject to the terms and conditions
of this Agreement.

 

Section 2.3             Charter Provisions. The
parties hereto shall use their respective reasonable efforts (including voting
or causing to be voted all of the Company Securities held of record by such
party or Beneficially Owned by such party by virtue of having voting power over
such Company Securities) so as to cause no amendment to be made to the
Memorandum of Association or Bye-laws in a manner that would (a) add
restrictions to the transferability of the Company Securities by the Initial
Shareholder, any Fortress Affiliate Shareholder or their Permitted Transferees
who remain Shareholders (as such term is used herein) at the time of such an
amendment, which restrictions are beyond those then provided for in the
Memorandum of Association or Bye-laws, this Agreement or applicable securities
laws or (b) nullify any of the rights of the Initial Shareholder, any
Fortress Affiliate Shareholder or their Permitted Transferees who remain
Shareholders (as such term is used herein) at the time of such amendment, which

 

5

 

rights are explicitly
provided for in this Agreement, unless, in each such case, such amendment shall
have been approved by such Shareholder.

 

Section 2.4             Legend. Any certificate
representing Company Securities issued to a Shareholder shall be stamped or otherwise
imprinted with a legend in substantially the following form:

 

“The shares represented by this certificate are subject to the
provisions contained in the Shareholders Agreement, dated as of October 27,
2010, by and among SeaCube Container Leasing Ltd. and the Shareholders party
thereto.”

 

The Company shall make customary arrangements
to cause any Company Securities issued in uncertificated form to be identified
on the books of the Company in a substantially similar manner.

 

Section
2.5             Share Certificates.
Upon request by a Shareholder, the Company shall take all necessary actions to
promptly issue or reissue, as the case may be, Company Securities in
certificated or uncertificated form.

 

ARTICLE III

BOARD OF DIRECTORS

 

Section 3.1             Board.

 

(a)      For so long as
this Agreement is in effect, the Company and each Shareholder shall take all
reasonable actions within their respective control (including voting or causing
to be voted all of the Company Securities held of record by such Shareholder or
Beneficially Owned by such Shareholder by virtue of having voting power over
such Company Securities, and, with respect to the Company, as provided in
Sections 3.1(c) and (d)) so as to cause to be elected to the Board, and to
cause to continue in office, not more than seven directors (or such other
number of directors as FIG LLC may agree to in writing), at any given time:

 

(i)         at least a majority of such directors shall be individuals
designated by FIG LLC, for so long as the Shareholders, together, have
Beneficial Ownership of at least 40% of the Voting Power of the Company;

 

(ii)        at least three directors (four directors, in the event the
Board consists of more than seven directors) shall be individuals designated by
FIG LLC, for so long as the Shareholders, together, have Beneficial Ownership
of less than 40% but at least 20% of the Voting Power of the Company;

 

(iii)       at least two directors (three directors, in the event the
Board consists of more than seven directors) shall be individuals designated by
FIG LLC, for so long as the Shareholders, together, have Beneficial Ownership
of less than 20% but at least 10% of the Voting Power of the Company; and

 

6

 

(iv)       at least one director shall be an individual designated by FIG
LLC, for so long as the Shareholders, together, have Beneficial Ownership of
less than 10% but at least 5% of the Voting Power of the Company.

 

(b)      If FIG LLC
notifies the Shareholders of its desire to remove, with or without cause, any
director previously designated by it, the Shareholders shall vote or cause to
be voted all of the shares of Company Securities held of record by such
Shareholders or Beneficially Owned by such Shareholders by virtue of having
voting power over such Company Securities and take all other reasonable actions
within its control to cause the removal of such director.

 

(c)      The Company
agrees to include in the slate of nominees recommended by the Board those
persons designated by FIG LLC in accordance with Section 3.1(a) and
to use its reasonable best efforts to cause the election of each such designee
to the Board, including nominating such designees to be elected as directors,
in each case subject to applicable law.

 

(d)      In the event
that a vacancy is created at any time by the death, disability, retirement,
resignation or removal of any director who is designated by FIG LLC in
accordance with Section 3.1(a), the Company agrees to take at any time and
from time to time all actions necessary to cause the vacancy created thereby to
be filled as promptly as practicable by a new designee of FIG LLC.  In the event that the size of the Board is
expanded to more than seven directors, the Company agrees to take at any time
and from time to time all actions necessary to cause the Board to continue to
have the number of FIG LLC designees that corresponds to the requirements of Section 3.1(a).

 

(e)      In the event
that at any time the number of directors entitled to be designated by FIG LLC
pursuant to Section 3.1(a) decreases (a “Notification Event”),
FIG LLC, the Initial Shareholder and its Permitted Transferees and the Company
will take the following steps:

 

(i)         FIG LLC will notify (the “Notice”) the Company which
directors previously designated by FIG LLC to serve as directors will be
de-designated by FIG LLC (each director, an “Identified Director”).  FIG LLC will provide such notification to the
Company by the date that is forty-five calendar days prior to the date on which
the Company is required to file its next annual proxy statement with the
Commission.  For the avoidance of doubt,
FIG LLC has the sole right to (a) determine which designated director(s) will
be an Identified Director and (b) select any of its designated directors
to be an Identified Director.

 

(ii)        Within thirty calendar days of the Company’s receipt of the
Notice, the nominating committee of the Company may elect to require the
Initial Shareholder to take reasonable actions to cause each Identified
Director to resign from the Board at or prior to the end of such Identified
Director’s term such that the number of directors designated by FIG LLC after
such resignation(s) equals the number of directors FIG LLC would have been
entitled to designate pursuant to Section 3.1(a).  Any vacancies created by such resignation may
remain vacant until the next annual meeting of shareholders or filled by a
majority vote of the Board.

 

(iii)       If the nominating committee does not make
the election described in (i) above, then (a) the Initial Shareholder
will not be required to cause such Identified Director to resign from the Board
at or prior to the end of such Identified Director’s term and (b) such
Identified Director shall no longer be considered a designee of FIG LLC.

 

ARTICLE IV

REGISTRATION RIGHTS

 

Section 4.1             Demand Registration.

 

(a)      At any time
after the date that is 180 days after the date hereof (or such earlier date (i) as
would permit the Company to cause any filings required hereunder to be filed on
the 180th day after the date hereof or (ii) as is
permitted by waiver of the IPO

 

7

 

Underwriting
Agreement), any Person that is a Shareholder (a “Requesting Shareholder”)
on the date a Demand is made shall be entitled to make a written request of the
Company (a “Demand”) for registration under the Securities Act of an
amount of Registrable Securities that, when taken together with the amounts of
Registrable Securities requested to be registered under the Securities Act by
such Requesting Shareholder’s Affiliates, equals or is greater than the
Registrable Amount (a “Demand Registration”) and thereupon the Company
will, subject to the terms of this Agreement, use its commercially reasonable
efforts to effect the registration under the Securities Act of:

 

(i)         the Registrable Securities which the Company has been so
requested to register by the Requesting Shareholders for disposition in
accordance with the intended method of disposition stated in such Demand, which
may be an Underwritten Offering;

 

(ii)        all other Registrable Securities which the Company has been
requested to register pursuant to Section 4.1(b); and

 

(iii)       all Common Shares which the Company may elect to register in
connection with any offering of Registrable Securities pursuant to this Section 4.1,
but subject to Section 4.1(f);

 

all to the extent necessary to permit the disposition
(in accordance with the intended methods thereof) of the Registrable Securities
and the additional Common Shares, if any, to be so registered.

 

(b)      A Demand shall
specify: (i) the aggregate number of Registrable Securities requested to
be registered in such Demand Registration, (ii) the intended method of
disposition in connection with such Demand Registration, to the extent then
known and (iii) the identity of the Requesting Shareholder (or Requesting
Shareholders). Within five days after receipt of a Demand, the Company shall
give written notice of such Demand to any other Persons that on the date a
Demand is delivered to the Company is a Shareholder, provided, however, that no
notice shall be required so long as the Shareholders, together, have Beneficial
Ownership of at least 40% of the Voting Power of the Company. Subject to Section 4.1(f),
the Company shall include in the Demand Registration covered by such Demand all
Registrable Securities with respect to which the Company has received a written
request for inclusion therein (i) if a notice by the Company is required
by this paragraph, within five days after such notice by the Company has been
given, or (ii) if no notice by the Company is required by this paragraph,
within five days after receipt by the Company of such Demand. Such written
request shall comply with the requirements of a Demand as set forth in this Section 4.1(b).

 

(c)      Each
Shareholder shall be entitled to an unlimited number of Demand Registrations
until such time as the Shareholders, together, Beneficially Own less than a
Registrable Amount.

 

(d)      Demand
Registrations shall be on such appropriate registration form of the Commission
as shall be selected by the Requesting Shareholders, including, to the extent
permissible, an existing effective registration statement filed by the Company
with the Commission, and shall be reasonably acceptable to the Company.

 

8

 

(e)      The Company
shall not be obligated to effect any Demand Registration (A) within three
months of a “firm commitment” Underwritten Offering in which all Shareholders
were given “piggyback” rights pursuant to Section 4.2 (subject to Section 4.1(f))
and at least 50% of the number of Registrable Securities requested by such
Shareholders to be included in such Demand Registration were included) or (B) within
three months of any other Underwritten Offering pursuant to Section 4.3(f).
In addition, the Company shall be entitled to postpone (upon written notice to
all Shareholders) for a reasonable period of time not to exceed 60 days in
succession the filing or the effectiveness of a registration statement for any
Demand Registration (but no more than twice, or for more than 90 days in the
aggregate, in any period of 12 consecutive months) if the Board determines in
good faith and in its reasonable judgment that the filing or effectiveness of
the registration statement relating to such Demand Registration would cause the
disclosure of material, non-public information that the Company has a bona fide
business purpose for preserving as confidential. In the event of a postponement
by the Company of the filing or effectiveness of a registration statement for a
Demand Registration, the holders of a majority of Registrable Securities held
by the Requesting Shareholder(s) shall have the right to withdraw such
Demand in accordance with Section 4.4.

 

(f)       The Company
shall not include any securities other than Registrable Securities in a Demand
Registration, except with the written consent of Shareholders participating in
such Demand Registration that hold a majority of the Registrable Securities
included in such Demand Registration. 
If, in connection with a Demand Registration, any managing underwriter
(or, if such Demand Registration is not an Underwritten Offering, a nationally
recognized independent investment bank selected by FIG LLC, the Initial
Shareholder or any of the Permitted Transferees thereof (to the extent a
Shareholder hereunder), reasonably acceptable to the Company, and whose fees and
expenses shall be borne solely by the Company) advises the Company, in writing,
that, in its opinion, the inclusion of all of the securities, including
securities of the Company that are not Registrable Securities, sought to be
registered in connection with such Demand Registration would adversely affect
the marketability of the Registrable Securities sought to be sold pursuant
thereto, then the Company shall include in such registration statement only
such securities as the Company is advised by such underwriter or investment
bank can be sold without such adverse effect as follows and in the following
order of priority: (i) first, up to the number of Registrable Securities
requested to be included in such Demand Registration by the Shareholders,
which, in the opinion of the underwriter can be sold without adversely
affecting the marketability of the offering, pro rata among such Shareholders
requesting such Demand Registration on the basis of the number of such
securities held by such Shareholders and such Shareholders that are Piggyback
Sellers; (ii) second, securities the Company proposes to sell; and (iii) third,
all other securities of the Company duly requested to be included in such
registration statement, pro rata on the basis of the amount of such other
securities requested to be included or such other method determined by the
Company.

 

(g)      Any time that a
Demand Registration involves an Underwritten Offering, the Company shall select
the investment banker or investment bankers and managers that will serve as
lead and co-managing underwriters with respect to the offering of such
Registrable Securities, which shall be reasonably acceptable to Shareholders
participating in such Demand Registration that hold a majority of the
Registrable Securities included in such Demand Registration.

 

9

 

Section 4.2             Piggyback Registrations.

 

(a)      Subject to the
terms and conditions hereof, whenever the Company proposes to register any of
its equity securities under the Securities Act (other than a registration by
the Company on a registration statement on Form S-4 or a registration
statement on Form S-8 or any successor forms thereto) (each, a “Piggyback
Registration”), whether for its own account or for the account of others,
the Company shall give the Shareholders prompt written notice thereof (but not
less than five days prior to the filing by the Company with the Commission of
any registration statement with respect thereto); provided, however, that no
notice shall be required so long as the Shareholders, collectively, have
Beneficial Ownership of at least 40% of the Voting Power of the Company. Such
notice (a “Piggyback Notice”) shall specify, at a minimum, the number of
equity securities proposed to be registered, the proposed date of filing of
such registration statement with the Commission, the proposed means of
distribution and the proposed managing underwriter or underwriters (if any and
if known). Upon the written request (i) if a Piggyback Notice is required
by this paragraph, of any Person that on the date of such Piggyback Notice is a
Shareholder, given within five days after such Piggyback Notice is received by
such Person, or (ii) if no Piggyback Notice is required by this paragraph,
of any Person that on the date of approval by the Board of the filing of such
Piggyback Registration is a Shareholder, within five days of such Board
approval (any such Persons as described in (i) and (ii) above, each,
a “Piggyback Seller”) (which written request shall specify the number of
Registrable Securities then presently intended to be disposed of by such
Piggyback Seller), the Company, subject to the terms and conditions of this
Agreement, shall use its commercially reasonable efforts to cause all such
Registrable Securities held by Piggyback Sellers with respect to which the
Company has received such written requests for inclusion to be included in such
Piggyback Registration on the same terms and conditions as the Company’s equity
securities being sold in such Piggyback Registration.

 

(b)      If, in
connection with a Piggyback Registration, any managing underwriter (or, if such
Piggyback Registration is not an Underwritten Offering, a nationally recognized
independent investment bank selected by FIG LLC, the Initial Shareholder or any
of its Permitted Transferees (to the extent a Shareholder hereunder),
reasonably acceptable to the Company, and whose fees and expenses shall be
borne solely by the Company) advises the Company in writing that, in its
opinion, the inclusion of all the equity securities sought to be included in
such Piggyback Registration by (i) the Company, (ii) others who have
sought to have equity securities of the Company registered in such Piggyback
Registration pursuant to rights to demand (other than pursuant to so-called “piggyback”
or other incidental or participation registration rights) such registration
(such Persons being “Other Demanding Sellers”), (iii) the Piggyback
Sellers and (iv) any other proposed sellers of equity securities of the
Company (such Persons being “Other Proposed Sellers”), as the case may
be, would adversely affect the marketability of the equity securities sought to
be sold pursuant thereto, then the Company shall include in the registration
statement applicable to such Piggyback Registration only such equity securities
as the Company is so advised by such underwriter or investment bank can be sold
without such an effect, as follows and in the following order of priority:

 

(i)    if the Piggyback Registration relates to an offering for the Company’s
own account, then (A) first, such number of equity securities to be sold
by the Company as the Company, in its reasonable judgment and acting in 

 

10

 

good faith and in accordance with
sound financial practice, shall have determined, (B) second, Registrable
Securities of Piggyback Sellers and securities sought to be registered by Other
Demanding Sellers (if any), pro rata on the basis of the number Common Shares
held by such Piggyback Sellers and Other Demanding Sellers and (C) third,
other equity securities held by any Other Proposed Sellers; or

 

(ii)   if the Piggyback Registration relates to an offering other than
for the Company’s own account, then (A) first, such number of equity
securities sought to be registered by each Other Demanding Seller and the
Piggyback Sellers (if any), pro rata in proportion to the number of Common
Shares held by all such Other Demanding Sellers and Piggyback Sellers and (B) second,
other equity securities held by any Other Proposed Sellers or to be sold by the
Company as determined by the Company and with such priorities among them as may
from time to time be determined or agreed to by the Company.

 

(c)      In connection
with any Underwritten Offering under this Section 4.2 for the Company’s
account, the Company shall not be required to include a holder’s Registrable
Securities in the Underwritten Offering unless such holder accepts the terms of
the underwriting as agreed upon between the Company and the underwriters
selected by the Company; provided, that any applicable underwriting agreement
includes only customary terms and conditions.

 

(d)      If, at any time
after giving written notice of its intention to register any of its equity
securities as set forth in this Section 4.2 and prior to the time the
registration statement filed in connection with such Piggyback Registration is
declared effective, the Company shall determine for any reason not to register
such equity securities, the Company may, at its election, give written notice
of such determination to each Shareholder and thereupon shall be relieved of
its obligation to register any Registrable Securities in connection with such
particular withdrawn or abandoned Piggyback Registration (but not from its
obligation to pay the Registration Expenses in connection therewith as provided
herein); provided, that Shareholders may continue the registration as a Demand
Registration pursuant to the terms of Section 4.1.

 

Section 4.3             Shelf Registration.

 

(a)      Subject to Section 4.3(e),
and further subject to the availability of a Registration Statement on Form S-3
or a successor form (“Form S-3”) to the Company, the Initial
Shareholder or any of its Permitted Transferees (in each case to the extent a
Shareholder hereunder) may by written notice delivered (which notice can be
delivered at any time after the eleven month anniversary of the date hereof) to
the Company (the “Shelf Notice”) require the Company to (i) file as
promptly as practicable (but no later than 30 days after the date the Shelf
Notice is delivered), and to use commercially reasonable efforts to cause to be
declared effective by the Commission at the earliest possible date permitted
under the rules and regulations of the Commission (but no later than 60
days after such filing date), a Form S-3, or (ii) designate an
existing Form S-3 filed with the Commission, in each case providing for an
offering to be made on a continuous basis pursuant to Rule 415 under the
Securities Act relating to the offer and sale, from time to time, of the
Registrable Securities owned by the Initial Shareholder or the Fortress
Affiliate Shareholders (or any of their Permitted Transferees), as the case may
be, and any other 

 

11

 

Persons
that at the time of the Shelf Notice meet the definition of a Shareholder who
elect to participate therein as provided in Section 4.3(b) (a “Shelf
Registration Statement”).

 

(b)      Each
Shareholder shall be entitled to require the Company to file an unlimited
number of Shelf Registration Statements until such time as the Shareholders,
together, Beneficially Own less than a Registrable Amount.

 

(c)      Within five
business days after receipt of a Shelf Notice pursuant to Section 4.3(a),
the Company will deliver written notice thereof to each Shareholder; provided,
however, that no such notice shall be required so long as the Shareholders,
together, have Beneficial Ownership of at least 40% of the Voting Power of the
Company. Each Shareholder may elect to participate in the Shelf Registration
Statement by delivering to the Company a written request to so participate.

 

(d)      Subject to Section 4.3(e),
the Company will use commercially reasonable efforts to keep the Shelf
Registration Statement continuously effective until the date on which all
Registrable Securities covered by the Shelf Registration Statement have been
sold thereunder in accordance with the plan and method of distribution
disclosed in the prospectus included in the Shelf Registration Statement, or
otherwise (the “Shelf Registration Effectiveness Period”).

 

(e)      Notwithstanding
anything to the contrary contained in this Agreement, the Company shall be
entitled, from time to time, by providing written notice to the Shareholders
who elected to participate in the Shelf Registration Statement, to require such
Shareholders to suspend the use of the prospectus for sales of Registrable
Securities under the Shelf Registration Statement for a reasonable period of
time not to exceed 60 days in succession or 90 days in the aggregate in any 12
month period (a “Suspension Period”) if the Company shall determine that
it is required to disclose in the Shelf Registration Statement a financing,
acquisition, corporate reorganization or other similar corporate transaction or
other material event or circumstance affecting the Company or its securities,
and that the disclosure of such information at such time would be detrimental
to the Company or its shareholders. 
Immediately upon receipt of such notice, the Shareholders covered by the
Shelf Registration Statement shall suspend the use of the prospectus until the
requisite changes to the prospectus have been made as required below. Any
Suspension Period shall terminate at such time as the public disclosure of such
information is made. After the expiration of any Suspension Period and without
any further request from a Shareholder, the Company shall as promptly as
practicable prepare a post-effective amendment or supplement to the Shelf
Registration Statement or the prospectus, or any document incorporated therein
by reference, or file any other required document so that, as thereafter
delivered to purchasers of the Registrable Securities included therein, the
prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

 

(f)       At any time,
and from time-to-time, during the Shelf Registration Effectiveness Period
(except during a Suspension Period), each of the Initial Shareholder, the
Fortress Affiliate Shareholders or any of their Permitted Transferees (in each
case to the extent a Shareholder hereunder) may notify the Company of their
intent to sell Registrable Securities covered by the Shelf Registration
Statement (in whole or in part) in an Underwritten Offering (a 

 

12

 

“Shelf
Underwritten Offering”); provided that the Company shall not be obligated
to participate in more than four underwritten offerings during any twelve-month
period.  Such notice, which may be oral
or written, shall specify (x) the aggregate number of Registrable
Securities requested to be registered in such Shelf Underwritten Offering and (y) the
identity of the Shareholder(s) requesting such Shelf Underwritten
Offering.  Upon receipt by the Company of
such notice, the Company shall promptly comply with the applicable provisions
of Section 4.5, including, without limitation, those provisions relating
the Company’s obligation to make filings with the Commission, assist in the
preparation and filing with the Commission of prospectus supplements and
amendments to the Shelf Registration Statement, participate in “road shows” and
obtain “comfort” letters, and the Company shall take such other actions as
necessary or appropriate to permit the consummation of such Shelf Underwritten
Offering as promptly as practicable. 
Each Shelf Underwritten Offering shall be for the sale of an amount of
Registrable Securities equal to or greater than the Registrable Amount.  In any Shelf Underwritten Offering, FIG LLC
shall select the investment banker or investment bankers and managers that will
serve as lead and co-managing underwriters with respect to the offering of such
Registrable Securities, which shall be reasonably acceptable to the Company.

 

Section 4.4             Withdrawal Rights.  Any Shareholder having notified or directed
the Company to include any or all of its Registrable Securities in a
registration statement under the Securities Act shall have the right to
withdraw any such notice or direction with respect to any or all of the
Registrable Securities designated by it for registration by giving written
notice to such effect to the Company prior to the effective date of such
registration statement. In the event of any such withdrawal, the Company shall
not include such Registrable Securities in the applicable registration and such
Registrable Securities shall continue to be Registrable Securities for all
purposes of this Agreement. No such withdrawal shall affect the obligations of
the Company with respect to the Registrable Securities not so withdrawn;
provided, however, that in the case of a Demand Registration, if such
withdrawal shall reduce the number of Registrable Securities sought to be included
in such registration below the Registrable Amount, then the Company shall as
promptly as practicable give each holder of Registrable Securities sought to be
registered notice to such effect and, within ten days following the mailing of
such notice, such holder(s) of Registrable Securities still seeking
registration shall, by written notice to the Company, elect to register
additional Registrable Securities, when taken together with elections to
register Registrable Securities by its Permitted Transferees, to satisfy the
Registrable Amount or elect that such registration statement not be filed or,
if previously filed, be withdrawn. During such ten day period, the Company
shall not file such registration statement if not previously filed or, if such
registration statement has been previously filed, the Company shall not seek,
and shall use commercially reasonable efforts to prevent, the effectiveness of
such registration statement.

 

Section 4.5             Registration Procedures.

 

(a)      If and whenever
the Company is required to use commercially reasonable efforts to effect the
registration of any Registrable Securities under the Securities Act as provided
in Sections 4.1, 4.2 and 4.3, the Company shall as promptly as practicable (in
each case, to the extent applicable):

 

(i)         prepare and file with the Commission a registration
statement to effect such registration, cause such registration statement to
become 

 

13

 

effective at the earliest possible
date permitted under the rules and regulations of the Commission, and
thereafter use commercially reasonable efforts to cause such registration
statement to remain effective pursuant to the terms of this Agreement;
provided, however, that the Company may discontinue any registration of its
securities that are not Registrable Securities at any time prior to the
effective date of the registration statement relating to such securities;
provided, further, that before filing such registration statement or any
amendments or supplements thereto, the Company will furnish to the counsel
selected by the holders of Registrable Securities that are to be included in
such registration (“Selling Holders”) copies of all such documents
proposed to be filed, which documents will be subject to the review of and
comment by such counsel (it being understood that counsel to the Selling
Holders will conduct its review and provide any comments promptly);

 

(ii)        prepare and file with the Commission such amendments
(including post-effective amendments) and supplements to such registration
statement and the prospectus used in connection therewith and any Exchange Act
reports incorporated by reference therein as may be necessary to keep such
registration statement effective and to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement until the earlier of such time as all of such securities
have been disposed of in accordance with the intended methods of disposition by
the Selling Holder(s) set forth in such registration statement or (i) in
the case of a Demand Registration pursuant to Section 4.1, the expiration
of 60 days after such registration statement becomes effective or (ii) in
the case of a Piggyback Registration pursuant to Section 4.2, the
expiration of 60 days after such registration statement becomes effective or (iii) in
the case of a Shelf Registration pursuant to Section 4.3, the Shelf
Registration Effectiveness Period;

 

(iii)       furnish to each Selling Holder and each underwriter, if any,
of the securities being sold by such Selling Holder such number of conformed
copies of such registration statement and of each amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement (including each preliminary
prospectus and any summary prospectus) and any other prospectus filed under Rule 424
under the Securities Act in conformity with the requirements of the Securities
Act, and any Issuer Free Writing Prospectus and such other documents as such
Selling Holder and underwriter, if any, may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Securities
owned by such seller;

 

(iv)       use commercially reasonable efforts to register or qualify
such Registrable Securities covered by such registration statement under such
other securities laws or blue sky laws of such jurisdictions as any Selling
Holder and any underwriter of the securities being sold by such Selling Holder
shall reasonably request, and take any other action which may be reasonably
necessary or advisable to enable such Selling Holder and underwriter to
consummate the disposition in such jurisdictions of the Registrable Securities 

 

14

 

owned by such Selling Holder,
except that the Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction wherein
it would not but for the requirements of this clause (iv) be obligated to
be so qualified, to subject itself to taxation in any such jurisdiction or to
file a general consent to service of process in any such jurisdiction;

 

(v)        use commercially reasonable efforts to cause such Registrable
Securities to be listed on each securities exchange on which similar securities
issued by the Company are then listed and, if no such securities are so listed,
use commercially reasonable efforts to cause such Registrable Securities to be
listed on the NYSE or the Nasdaq Stock Market;

 

(vi)       use commercially reasonable efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the Selling Holder(s) thereof to consummate the disposition of
such Registrable Securities;

 

(vii)      in connection with an Underwritten Offering, obtain for each
Selling Holder and underwriter:

 

(1)   an opinion of counsel for the Company,
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such Selling
Holder and underwriters, and

 

(2)   a “comfort” letter (or, in the case of any
such Person which does not satisfy the conditions for receipt of a “comfort”
letter specified in AU Section 634 of the AICPA Professional Standards, an “agreed
upon procedures” letter) signed by the independent registered public
accountants who have certified the Company’s financial statements included in
such registration statement (and, if necessary, any other independent
registered public accountant of any subsidiary of the Company or any business
acquired by the Company from which financial statements and financial data are,
or are required to be, included in the registration statement);

 

(viii)     promptly make available for inspection by
any seller, any underwriter participating in any disposition pursuant to any
registration statement, and any attorney, accountant or other agent or representative
retained by any such seller or underwriter (collectively, the “Inspectors”),
all financial and other records, pertinent corporate documents and properties
of the Company (collectively, the “Records”), as shall be reasonably
necessary to enable them to exercise their due diligence responsibility, and
cause the Company’s officers, directors and employees to supply all information
requested by any such Inspector in connection with such registration statement;
provided, however, that, unless the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in the registration statement or
the release of such Records is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction, the 

 

15

 

Company shall not be required to
provide any information under this subparagraph (viii) if (i) the
Company believes, after consultation with counsel for the Company, that to do
so would cause the Company to forfeit an attorney-client privilege that was
applicable to such information or (ii) if either (A) the Company has
requested and been granted from the Commission confidential treatment of such
information contained in any filing with the Commission or documents provided
supplementally or otherwise or (B) the Company reasonably determines in
good faith that such Records are confidential and so notifies the Inspectors in
writing unless prior to furnishing any such information with respect to (i) or
(ii) such holder of Registrable Securities requesting such information
agrees, and causes each of its Inspectors, to enter into a confidentiality
agreement on terms reasonably acceptable to the Company; and provided, further,
that each holder of Registrable Securities agrees that it will, upon learning
that disclosure of such Records is sought in a court of competent jurisdiction,
give notice to the Company and allow the Company, at its expense, to undertake
appropriate action and to prevent disclosure of the Records deemed confidential;

 

(ix)       promptly notify in writing each Selling Holder and the
underwriters, if any, of the following events:

 

(1)       the filing of the registration statement,
the prospectus or any prospectus supplement related thereto, any Issuer Free
Writing Prospectus or post-effective amendment to the registration statement,
and, with respect to the registration statement or any post-effective amendment
thereto, when the same has become effective;

 

(2)       any request by the Commission for
amendments or supplements to the registration statement or the prospectus or
for additional information;

 

(3)       the issuance by the Commission of any
stop order suspending the effectiveness of the registration statement or the
initiation of any proceedings by any Person for that purpose;

 

(4)       when any Issuer Free Writing Prospectus
includes information that may conflict with the information contained in the
registration statement; and

 

(5)       the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation or threat of any proceeding for such purpose;

 

(x)        notify each Selling Holder, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, upon
discovery that, or upon the happening of any event as a result of which, the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material fact
required to 

 

16

 

be stated therein or necessary to
make the statements therein not misleading, and, at the request of any Selling
Holder, promptly prepare and furnish to such seller a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include 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 not misleading;

 

(xi)       make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of such registration statement;

 

(xii)      otherwise use commercially reasonable efforts to comply with
all applicable rules and regulations of the Commission, and make available
to Selling Holders, as promptly as practicable, an earnings statement covering
the period of at least 12 months, but not more than 18 months, beginning with
the first day of the Company’s first full quarter after the effective date of
such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;

 

(xiii)     use its reasonable best efforts to assist
Shareholders who made a request to the Company to provide for a third party “market
maker” for the Common Shares; provided, however, that the Company shall not be
required to serve as such “market maker”;

 

(xiv)     cooperate with the sellers and the managing underwriter to
facilitate the timely preparation and delivery of certificates (which shall not
bear any restrictive legends unless required under applicable law), if
necessary or appropriate, representing securities sold under any registration
statement, and enable such securities to be in such denominations and
registered in such names as the managing underwriter or such sellers may
request and keep available and make available to the Company’s transfer agent
prior to the effectiveness of such registration statement a supply of such
certificates as necessary or appropriate;

 

(xv)      have appropriate officers of the Company prepare and make
presentations at any “road shows” and before analysts and rating agencies, as
the case may be, take other actions to obtain ratings for any Registrable
Securities (if they are eligible to be rated) and otherwise use its reasonable
best efforts to cooperate as reasonably requested by the Selling Holders and
the underwriters in the offering, marketing or selling of the Registrable
Securities;

 

(xvi)     if requested by any Selling Holders or any underwriter, promptly
incorporate in the registration statement or any prospectus, pursuant to a
supplement or post-effective amendment if necessary, such information as such
Selling Holders may reasonably request to have included therein, including,
without limitation, information relating to the “Plan of Distribution” of the
Registrable Securities;

 

17

 

 

(xvii)   cooperate and assist in any filings required
to be made with the FINRA and in the performance of any due diligence
investigation by any underwriter that is required to be undertaken in
accordance with the rules and regulations of the FINRA; and

 

(xviii)  otherwise use commercially reasonable efforts
to comply with all applicable rules and regulations of the Commission and
all reporting requirements under the rules and regulations of the Exchange
Act.

 

The Company may require each Selling Holder and each
underwriter, if any, to furnish the Company in writing such information
regarding each Selling Holder or underwriter and the distribution of such
Registrable Securities as the Company may from time to time reasonably request
to complete or amend the information required by such registration statement.

 

(b)      Without
limiting any of the foregoing, in the event that the offering of Registrable
Securities is to be made by or through an underwriter, the Company shall enter
into an underwriting agreement with a managing underwriter or underwriters
containing representations, warranties, indemnities and agreements customarily
included (but not inconsistent with the covenants and agreements of the Company
contained herein) by an issuer of common shares in underwriting agreements with
respect to offerings of common shares for the account of, or on behalf of, such
issuers. In connection with any offering of Registrable Securities registered
pursuant to this Agreement, the Company shall furnish to the underwriter, if
any (or, if no underwriter, the sellers of such Registrable Securities),
unlegended certificates representing ownership of the Registrable Securities
being sold (unless, in the Company’s sole discretion, such Registrable
Securities are to be issued in uncertificated form pursuant to the customary
arrangements for issuing shares in such form), in such denominations as
requested and instruct any transfer agent and registrar of the Registrable
Securities to release any stop transfer order with respect thereto.

 

(c)      Each Selling
Holder agrees that upon receipt of any notice from the Company of the happening
of any event of the kind described in Section 4.5(a)(ix), such Selling
Holder shall forthwith discontinue such Selling Holder’s disposition of
Registrable Securities pursuant to the applicable registration statement and
prospectus relating thereto until such Selling Holder’s receipt of the copies
of the supplemented or amended prospectus contemplated by Section 4.5(a)(ix) and,
if so directed by the Company, deliver to the Company, at the Company’s
expense, all copies, other than permanent file copies, then in such Selling
Holder’s possession of the prospectus current at the time of receipt of such
notice relating to such Registrable Securities. In the event the Company shall
give such notice, any applicable 60 day period during which such registration
statement must remain effective pursuant to this Agreement shall be extended by
the number of days during the period from the date of giving of a notice
regarding the happening of an event of the kind described in Section 4.5(a)(ix) to
the date when all such Selling Holders shall receive such a supplemented or
amended prospectus and such prospectus shall have been filed with the
Commission.

 

Section 4.6            Registration and Offering Expenses.
All expenses incident to the Company’s performance of, or compliance with, its
obligations under this Agreement including, without limitation, (a)(1) all
registration and filing fees, all fees and expenses of compliance with securities
and “blue sky” laws, (2) all fees and expenses associated with filings required
to be made with the 

 

18

 

Financial Industry
Regulatory Authority (“FINRA”) (including, if applicable, the fees and
expenses of any “qualified independent underwriter” as such term is defined in
NASD Rule 2720 or the equivalent rule incorporated into the FINRA
rulebook), (3) all fees and expenses of compliance with securities and “blue
sky” laws, (4) all printing (including, without limitation, expenses of
printing certificates, if any, for the Registrable Securities in a form
eligible for deposit with the Depository Trust Company and of printing
prospectuses if the printing of prospectuses and Issuer Free Writing Prospectuses
is requested by a holder of Registrable Securities) and copying expenses, (5) all
messenger and delivery expenses, (6) all fees and expenses of the Company’s
independent certified public accountants and counsel (including, without
limitation, with respect to “comfort” letters and opinions), (7) fees and
expenses of one firm of counsel to the Shareholders selling in such
registration (which firm shall be selected by the Shareholders selling in such
registration that hold a majority of the Registrable Securities included in
such registration) (collectively, the “Registration Expenses”) and (b) any
expenses described in clauses (a)(1) through (7) above incurred in
connection with the marketing and sale of Registrable Securities (“Offering
Expenses”) shall be borne by the Company, regardless of whether a
registration is effected, marketing is commenced or sale is made. The Company
will pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties,
the expense of any annual audit and the expense of any liability insurance) and
the expenses and fees for listing the securities to be registered on each
securities exchange and included in each established over-the-counter market on
which similar securities issued by the Company are then listed or traded. Each
Selling Holder shall pay its portion of all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale of such Selling
Holder’s Registrable Securities pursuant to any registration.

 

Section 4.7            Indemnification.

 

(a)      The Company
agrees to indemnify and hold harmless, to the fullest extent permitted by law,
each Selling Holder, its officers, directors, employees, managers, members,
partners and agents and each Person who controls (within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act) such Selling
Holder or such other indemnified Person from and against all losses, claims,
damages, liabilities and expenses (including reasonable expenses of
investigation and reasonable attorneys’ fees and expenses) (collectively, the “Losses”)
caused by, resulting from or relating to any untrue statement (or alleged
untrue statement) of a material fact contained in any registration statement,
any Issuer Free Writing Prospectus, any prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission (or alleged
omission) of 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, except insofar as the same are caused by any information
furnished in writing to the Company by such Selling Holder expressly for use
therein. In connection with an Underwritten Offering and without limiting any
of the Company’s other obligations under this Agreement, the Company shall also
indemnify such underwriters, their officers, directors, employees and agents
and each Person who controls (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act) such underwriters or
such other indemnified Person to the same extent as provided above with respect
to the indemnification (and exceptions thereto) of the holders of Registrable
Securities being sold. Reimbursements payable pursuant to the indemnification
contemplated by this Section 4.7(a) will be made by periodic payments
during the course of any investigation or defense, as and when bills are
received or expenses incurred.

 

19

 

(b)      In connection
with any registration statement in which a holder of Registrable Securities is
participating, each such Selling Holder will furnish to the Company in writing
information regarding such Selling Holder’s ownership of Registrable Securities
and its intended method of distribution thereof and, to the extent permitted by
law, shall, severally and not jointly, indemnify the Company, its directors,
officers, employees and agents and each Person who controls (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange
Act) the Company or such other indemnified Person against all Losses caused by
any untrue statement of material fact contained in the registration statement,
any Issuer Free Writing Prospectus, any prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission of 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, but only
to the extent that such untrue statement or omission is caused by and contained
in such information so furnished in writing by such Selling Holder expressly
for use therein; provided, however, that each Selling Holder’s obligation to
indemnify the Company hereunder shall, to the extent more than one Selling
Holder is subject to the same indemnification obligation, be apportioned
between each Selling Holder based upon the net amount received by each Selling
Holder from the sale of Registrable Securities, as compared to the total net
amount received by all of the Selling Holders of Registrable Securities sold
pursuant to such registration statement. Notwithstanding the foregoing, no
Selling Holder shall be liable to the Company for amounts in excess of the
lesser of (i) such apportionment and (ii) the net amount received by
such holder in the offering giving rise to such liability.

 

(c)      Any Person
entitled to indemnification hereunder shall give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification;
provided, however, the failure to give such notice shall not release the
indemnifying party from its obligation, except to the extent that the
indemnifying party has been materially prejudiced by such failure to provide
such notice on a timely basis.

 

(d)      In any case in
which any such action is brought against any indemnified party, and it notifies
an indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein, and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will
not (so long as it shall continue to have the right to defend, contest,
litigate and settle the matter in question in accordance with this paragraph)
be liable to such indemnified party hereunder for any legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, supervision and monitoring
(unless (i) such indemnified party reasonably objects to such assumption
on the grounds that there may be defenses available to it which are different
from or in addition to the defenses available to such indemnifying party or (ii) the
indemnifying party shall have failed within a reasonable period of time to
assume such defense and the indemnified party is or is reasonably likely to be
prejudiced by such delay, in either event the indemnified party shall be
promptly reimbursed by the indemnifying party for the expenses incurred in
connection with retaining separate legal counsel). An indemnifying party shall
not be liable for any settlement of an action or claim effected without its
consent. The indemnifying party shall lose its right to defend, contest,
litigate and settle a matter if it shall fail to diligently contest such matter
(except 

 

20

 

to the
extent settled in accordance with the next following sentence). No matter shall
be settled by an indemnifying party without the consent of the indemnified
party (which consent shall not be unreasonably withheld, it being understood
that the indemnified party shall not be deemed to be unreasonable in
withholding its consent if the proposed settlement imposes any obligation on
the indemnified party other than the payment of money or if the proposed
settlement does not include an unconditional release of such indemnified party
for all claims relating to such matter).

 

(e)      The
indemnification provided for under this Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf of the
indemnified Person and will survive the transfer of the Registrable Securities
and the termination of this Agreement.

 

(f)       If recovery is
not available under the foregoing indemnification provisions for any reason or
reasons other than as specified therein, any Person who would otherwise be
entitled to indemnification by the terms thereof shall nevertheless be entitled
to contribution with respect to any Losses with respect to which such Person
would be entitled to such indemnification but for such reason or reasons. In
determining the amount of contribution to which the respective Persons are
entitled, there shall be considered the Persons’ relative knowledge and access
to information concerning the matter with respect to which the claim was
asserted, the opportunity to correct and prevent any statement or omission, and
other equitable considerations appropriate under the circumstances. It is hereby
agreed that it would not necessarily be equitable if the amount of such
contribution were determined by pro rata or per capita allocation. 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 found guilty of such fraudulent misrepresentation. Notwithstanding the
foregoing, no Selling Holder or transferee thereof shall be required to make a
contribution in excess of the net amount received by such holder from its sale
of Registrable Securities in connection with the offering that gave rise to the
contribution obligation.

 

(g)      Not less than
three days before the expected filing date of each registration statement
pursuant to this Agreement, the Company shall notify each Shareholder who has
timely provided the requisite notice hereunder entitling the Shareholder to
register Registrable Securities in such registration statement of the
information, documents and instruments from such Shareholder that the Company
or any underwriter reasonably requests in connection with such registration
statement, including, but not limited to a questionnaire, custody agreement,
power of attorney, lock-up letter and underwriting agreement (the “Requested
Information”). If the Company has not received, on or before the day before
the expected filing date, the Requested Information from such Shareholder, the
Company may file the Registration Statement without including Registrable
Securities of such Shareholder. The failure to so include in any registration
statement the Registrable Securities of a Shareholder (with regard to that
registration statement) shall not in and of itself result in any liability on
the part of the Company to such Shareholder.

 

21

 

ARTICLE V

MISCELLANEOUS

 

Section 5.1            Headings. The headings in
this Agreement are for convenience of reference only and shall not control or
effect the meaning or construction of any provisions hereof.

 

Section 5.2            Entire
Agreement. This Agreement constitutes the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein, and there are no restrictions, promises, representations, warranties,
covenants, conditions or undertakings with respect to the subject matter
hereof, other than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and understandings between the
parties hereto with respect to the subject matter hereof.

 

Section 5.3            Further Actions; Cooperation.
Each of the Shareholders agrees to use its reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to give effect to the transactions contemplated by this Agreement.
Without limiting the generality of the foregoing, each of the Shareholders (i) acknowledges
that such Shareholder will prepare and file with the Commission filings under
the Exchange Act, including under Section 13(d) of the Exchange Act,
relating to its Beneficial Ownership of the Common Shares and (ii) agrees
to use its reasonable efforts to assist and cooperate with the other parties in
promptly preparing, reviewing and executing any such filings under the Exchange
Act, including any amendments thereto.

 

Section 5.4            Notices. All notices,
requests, consents and other communications hereunder to any party shall be
deemed to be sufficient if contained in a written instrument delivered in
person or sent by facsimile, nationally recognized overnight courier or first
class registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at the address set forth below or such other address as
may hereafter be designated on the signature pages of this Agreement or in
writing by such party to the other parties:

 

If
to the Initial Shareholder or any Fortress Affiliate Shareholders, to:

 

	
  c/o Fortress Investment
  Group, LLC 

  
	
  1345 Avenue of the
  Americas, 46th Floor 

  
	
  New York, NY 10105 

  
	
  Fax: (212) 798-6122

  
	
  Attn: Randal A. Nardone

  

 

with
a copy (which shall not constitute notice) to:

 

	
  Skadden,
  Arps, Slate, Meagher & Flom LLP

  
	
  4
  Times Square

  
	
  New
  York, NY 10036-6522

  
	
  Fax:
  (212) 735-2000

  
	
  Attn: Joseph A. Coco, Esq.

  

 

22

 

If
to the Company, to:

 

	
  SeaCube
  Container Leasing Ltd.

  
	
  1
  Maynard Drive

  
	
  Park
  Ridge, New Jersey 07656

  
	
  Fax:
  (201) 391-0356

  
	
  Attn:  General Counsel

  

 

If to a Shareholder that is not the Initial Shareholder, then to the
address set forth in the written agreement of such Shareholder provided for in Section 2.1
hereof.

 

All such notices, requests, consents and other communications shall be
deemed to have been given or made if and when received (including by overnight
courier) by the parties at the above addresses or sent by facsimile, with
confirmation received, to the facsimile numbers specified above (or at such
other address or facsimile number for a party as shall be specified by like
notice). Any notice delivered by any party hereto to any other party hereto
shall also be delivered to each other party hereto simultaneously with delivery
to the first party receiving such notice.

 

Section 5.5            Applicable Law. The
substantive laws of the State of Delaware shall govern the interpretation,
validity and performance of the terms of this Agreement, without regard to
conflicts of law doctrines. THE PARTIES HERETO WAIVE THEIR RIGHT TO A JURY
TRIAL WITH RESPECT TO DISPUTES HEREUNDER.

 

Section 5.6            Severability. The invalidity,
illegality or unenforceability of one or more of the provisions of this
Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Agreement, including any such
provisions, in any other jurisdiction, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the fullest extent
permitted by law.

 

Section 5.7            Successors and Assigns.
Except as otherwise provided herein, all the terms and provisions of this
Agreement shall be binding upon, shall inure to the benefit of and shall be
enforceable by the respective successors and permitted assigns of the parties
hereto. No Shareholder may assign any of its rights hereunder to any Person
other than a Permitted Transferee. Each Permitted Transferee of any Shareholder
shall be subject to all of the terms of this Agreement, and by taking and
holding such shares such Person shall be entitled to receive the benefits of
and be conclusively deemed to have agreed to be bound by and to comply with all
of the terms and provisions of this Agreement; provided, however, no transfer
of rights permitted hereunder shall be binding upon or obligate the Company
unless and until (i) if required under Section 2.1 hereof, the Company
shall have received written notice of such transfer and the joinder of the
transferee provided for in Section 2.1 hereof, and (ii) such
transferee can establish Beneficial Ownership or ownership of record of a
Registrable Amount (whether individually or together with its Affiliates that
are Shareholders or transferees of Shareholders and, if applicable, its other
Permitted Transferees that are Shareholders or transferees of Shareholders).
The Company may not assign any of its rights or obligations hereunder without
the prior written consent of each of the Shareholders. Notwithstanding the
foregoing, no successor or assignee of the Company shall have any rights
granted under this Agreement until such Person shall 

 

23

 

acknowledge its rights and
obligations hereunder by a signed written statement of such Person’s acceptance
of such rights and obligations.

 

Section 5.8            Amendments. This Agreement
may not be amended, modified or supplemented unless such amendment,
modification or supplement is in writing and signed by each of the Shareholders
and the Company.

 

Section 5.9            Waiver. The failure of a
party hereto at any time or times to require performance of any provision
hereof shall in no manner affect its right at a later time to enforce the same.
No waiver by a party of any condition or of any breach of any term, covenant,
representation or warranty contained in this Agreement shall be effective
unless in a writing signed by the party against whom the waiver is to be
effective, and no waiver in any one or more instances shall be deemed to be a
further or continuing waiver of any such condition or breach in other instances
or a waiver of any other condition or breach of any other term, covenant,
representation or warranty.

 

Section 5.10          Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same Agreement.

 

Section 5.11          Submission To Jurisdiction. ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND ANY ACTION FOR
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF MAY BE BROUGHT IN THE
COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH PARTY HERETO HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND THE APPELLATE COURTS THEREOF. EACH PARTY HERETO IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY AT THE ADDRESS FOR NOTICES SET
FORTH HEREIN. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT BROUGHT IN THE COURTS REFERRED TO ABOVE AND HEREBY FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

 

Section 5.12          Injunctive Relief. Each party
hereto acknowledges and agrees that a violation of any of the terms of this
Agreement will cause the other parties irreparable injury for which an adequate
remedy at law is not available. Therefore, the Shareholders agree that each
party shall be entitled to, an injunction, restraining order, specific
performance or other equitable relief from any court of competent jurisdiction,
restraining any party from committing any 

 

24

 

violations of the provisions
of this Agreement, without the need to post a bond or prove the inadequacy of
monetary damages.

 

Section 5.13          Recapitalizations, Exchanges, Etc.
Affecting the Common Shares; New Issuance. 
The provisions of this Agreement shall apply, to the full extent set
forth herein, with respect to Company Securities and to any and all equity or
debt securities of the Company or any successor or assign of the Company
(whether by merger, consolidation, sale of assets, or otherwise) which may be
issued in respect of, in exchange for, or in substitution of, such Company
Securities and shall be appropriately adjusted for any share dividends, splits,
reverse splits, combinations, reclassifications, recapitalizations,
reorganizations and the like occurring after the date hereof.

 

Section 5.14          Termination. Upon the mutual
consent of all of the parties hereto or, with respect to each Shareholder, at
such earlier time as such Shareholder and its Affiliates and Permitted
Transferees ceases to Beneficially Own a Registrable Amount, the terms of this
Agreement shall terminate, and be of no further force and effect; provided,
however, that the following shall survive the termination of this Agreement: (i) the
provisions of Sections 4.2 (which shall terminate, and be of no further force
and effect, with respect to each Shareholder, at such time as such Shareholder
and its Affiliates and Permitted Transferees ceases to Beneficially Own a
Registrable Amount), 4.6, 4.7, 5.5, 5.11, this Section 5.14 and Section 5.15;
(ii) the rights with respect to the breach of any provision hereof by the
Company and (iii) any registration rights vested or obligations accrued as
of the date of termination of this Agreement to the extent, in the case of
registration rights so vested, if such Shareholder ceases to meet the definition
of a Shareholder under this Agreement subsequent to the vesting of such
registration rights as a result of action taken by the Company.

 

Section 5.15          Rule 144. The Company
covenants and agrees that it will file the reports required to be filed by it under
the Securities Act and the Exchange Act and the rules and regulations
adopted by the Commission thereunder (or, if it is not required to file such
reports, it will, upon the request of any holder of Registrable Securities,
make publicly available other information so long as necessary to permit sales
in compliance with Rule 144 under the Securities Act), and it will take
such further reasonable action, 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
under the Securities Act, as such Rule 144 may be amended from time to
time, or any similar rule or regulation hereafter adopted by the
Commission. Upon the reasonable request of any holder of Registrable
Securities, the Company will deliver to such holder a written statement as to
whether it has complied with such information and filing requirements.

 

Section 5.16          Information.  The Company covenants and agrees that for so
long as the Shareholders, together, have Beneficial Ownership of at least 1% of
the Voting Power of the Company, it will provide or cause to be provided, upon
request, to persons affiliated with Fortress who are covered by applicable
Fortress confidentiality policies, all information about the Company and its
operations as the Company would ordinarily provide to a director upon his or
her request.

 

[Remainder of page left blank intentionally]

 

25

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly as of the
date first above written.

 

 

	
   

  	
  SEACUBE
  CONTAINER LEASING LTD.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Joseph Kwok

  
	
   

  	
   

  	
  Name:
  Joseph Kwok

  
	
   

  	
   

  	
  Title:
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  SEACASTLE
  OPERATING COMPANY LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chris Annese

  
	
   

  	
   

  	
  Name: Chris Annese

  
	
   

  	
   

  	
  Title: Chief Financial
  Officer

  

 

[SIGNATURE
PAGE TO SHAREHOLDERS AGREEMENT]Exhibit 10.1

 

IN THE COURT OF CHANCERY OF THE
STATE OF DELAWARE

 

	
  IN
  RE UNITED THERAPEUTICS 

  	
  )

  	
   

  
	
  CORPORATION
  DERIVATIVE 

  	
  )

  	
  Cons.
  C.A. No: 4946-CC

  
	
  LITIGATION

  	
  )

  	
   

  

 

STIPULATION OF SETTLEMENT

 

Plaintiffs
Retirement Board of Allegheny County (“RBAC”), Police & Fire
Retirement System of the City of Detroit (“PFRS”) and Jeffrey Benison IRA (“Benison”)
(collectively, the “Plaintiffs”); nominal defendant United Therapeutics
Corporation (“UT” or the “Company”); and defendants Martine Rothblatt (“Rothblatt”),
Roger Jeffs,  Christopher
Causey,  R. Paul Gray,  Christopher Patusky,
Louis Sullivan,  Raymond Dwek,  Ray Kurzweil,  John M. Ferrari and  Paul
A. Mahon (collectively, the “Individual Defendants,” and together with UT, the “Defendants”),
who are the parties to the above-captioned derivative action (the “Parties”),
by and through their respective attorneys, have entered into this Stipulation
of Settlement (the “Stipulation”), subject to the approval of the Court of
Chancery of the State of Delaware (the “Court”).  The settlement contemplated by this
Stipulation is referred to herein as the “Settlement.”

 

WHEREAS:

 

A.            On
December 10, 2008, Benison made a books and records demand pursuant to 8
Del. C. § 220 (“Section 220”) and received a response to its demand on January 12,
2009.  UT began producing documents in
late January 2009.  Benison
requested additional records in February 2009, which the Company produced
later that month.

 

B.            On
May 7, 2009, Benison filed its derivative complaint in C.A. No. 4569-CC
on behalf of nominal defendant UT alleging that directors and officers of the
Company breached their fiduciary duties in connection with the repricing of
awards (the “Award Repricings”) granted under the United Therapeutics
Corporation Share Tracking Awards Plan (“STAP”) and 

 

 

CONFIDENTIAL SETTLEMENT
COMMUNICATION

 

an exchange offer for certain outstanding stock
options (the “Option Exchange”), and in connection with adopting the STAP.  On August 7, 2009, the defendants moved
to dismiss Benison’s derivative complaint. 
Subsequently, on September 1, 2009, Benison filed a Verified
Amended Complaint, and on October 6, 2009, the defendants moved to dismiss
the Verified Amended Complaint.

 

C.            On
June 9, 2009, RBAC sent to UT a demand pursuant to Section 220 to
inspect certain books and records of UT related to the STAP, the Awards
Repricings and the Option Exchange, among other things.  By letter dated June 16, 2009, UT’s
outside counsel, on behalf of UT, responded to RBAC’s books and records demand
and subsequently produced certain documents.

 

D.            On
July 28, 2009, RBAC filed a Verified Complaint Pursuant to Section 220
of the Delaware General Corporation Law captioned Retirement
Board of Allegheny County v. United Therapeutics Corporation, Case No. 4764-CC
(the “220 Action”), seeking books and records from UT.

 

E.             On
October 2, 2009, RBAC filed its derivative complaint in C.A. No. 4946-CC
on behalf of UT, which challenged, inter alia, the
Award Repricings and Option Exchange.  On
the same date, RBAC filed motions for expedited proceedings and preliminary
injunction.  On October 13, 2009,
the Court denied the motion for expedited proceedings.  See Ret. Bd. Allegheny Cnty. v.
Rothblatt, C.A. No. 4946-CC, 2009 WL 3349262 (Del. Ch. Oct. 13,
2009).

 

F.             On
November 9, 2009, the Court entered an order consolidating C.A. Nos.
4569-CC and 4764-CC (the “Action”).  The
order also designated the law firms of Barroway Topaz Kessler Meltzer &
Check, LLP, Bernstein Litowitz Berger & Grossmann LLP, and Harwood 

 

2

 

Feffer LLP as Plaintiffs’ Co-Lead Counsel and the
law firms of Prickett, Jones & Elliott, P.A. and Rosenthal, Monhait &
Goddess, P.A. as Plaintiffs’ Delaware Liaison Counsel.

 

G.            On
April 30, 2010, the Court entered an order permitting PFRS to join as a
plaintiff in the Action.

 

H.            Following
negotiations and the production of additional books and records, RBAC and UT
entered into a settlement agreement resolving the 220 Action, with each party
bearing its own costs.  Pursuant to the
settlement, the 220 Action was dismissed on May 3, 2010.

 

I.              On
May 4, 2010, Plaintiffs filed the Verified Consolidated Amended Derivative
Complaint (the “Complaint”) against the Individual Defendants alleging: (a) violations
of the Delaware General Corporation Law, the Company’s equity compensation plan
and the employment contract between the Company and its Chief Executive Officer
(“CEO”); (b) breaches of fiduciary duties; (c) waste of corporate
assets; and (d) unjust enrichment.

 

J.             On
May 19, 2010, Plaintiffs filed a Motion for Partial Summary Judgment, and
Defendants filed a Motion to Dismiss.

 

K.            On
May 21, 2010, Plaintiffs served their First Consolidated Request for
Production of Documents Directed to Defendants, and on June 21, 2010,
Defendants responded with Responses and Objections thereto.

 

L.             On
June 10, 2010, the Court entered an order setting a briefing schedule for
Plaintiffs’ Motion for Partial Summary Judgment and Defendants’ Motion to
Dismiss.

 

M.           On
June 14, 2010, Defendants filed their Opening Brief in support of their
Motion to Dismiss.

 

N.            RBAC and Defendants
initially engaged in arm’s-length settlement negotiations in August 2009.   In June 2010
the Parties engaged in further extensive arm’s-length negotiations 

 

3

 

in an effort to resolve the Action.  As a result of those negotiations, the
parties requested and, on July 7, 2010, the Court entered an amended
scheduling order extending the briefing schedule on the pending motions.

 

O.            As
a result of their negotiations, Defendants and Plaintiffs reached an agreement
in principle to settle the Action on terms and conditions set forth in this
Stipulation.

 

P.             On
July 27, 2010, the Parties advised the Court of their agreement in
principle to settle the Action, requested a stay of the briefing schedule on
the pending motions to dismiss and for partial summary judgment and that the September 24,
2010 oral argument be removed from the Court’s calendar.  The Court granted that request on July 27,
2010.

 

Q.            Plaintiffs
have conducted a thorough investigation and reviewed extensive publicly filed
documents and materials produced in connection with the books and records
demands and the 220 Action with respect to the claims and underlying events and
transactions alleged in the Action. 
While Plaintiffs and their counsel believe the claims asserted in the
Action have merit, Plaintiffs and their counsel, based on legal and factual
analyses and the review of non-public and public documents, have concluded that
settling the Action on the terms and conditions of this Stipulation confers
substantial benefits upon and is in the best interests of UT and its
shareholders.  In making this
determination, Plaintiffs and their counsel have considered the benefits
conferred on the Company by the Settlement and have taken into account the
uncertain outcome and risks of any litigation, especially in complex derivative
stockholder litigation such as the Action, as well as the difficulties and
delays inherent in such litigation. Plaintiffs and their counsel also are
mindful of the inherent problems of proof associated with, and possible
defenses to, the claims asserted in the Action. 
In addition, Plaintiffs and their 

 

4

 

counsel recognize and acknowledge the expense and
length of continued proceedings necessary to prosecute the Action against the
Individual Defendants through trial and appeals.

 

R.            The
Individual Defendants in the Action have denied, and continue to deny, that any
claims asserted by Plaintiffs have merit and that any of the Individual
Defendants have committed, have attempted to commit or have threatened to
commit any violations of law or breaches of duties to UT, any of the Plaintiffs
in the Action, or any other UT stockholder, or otherwise have been unjustly
enriched or acted in any improper manner. 
Nonetheless, Defendants have taken into account the costs, uncertainty
and risks inherent in any litigation, especially in complex cases like the
Action.  Defendants have, therefore,
determined that it is desirable and beneficial that the Action, and all of the
Parties’ disputes related thereto, be fully and finally settled in the manner
and upon the terms and conditions set forth in this Stipulation.

 

S.             This
Stipulation shall not be construed or deemed to be evidence of or an admission
or concession on the part of any Party with respect to (i) the validity or
infirmity of any claim, (ii) any fault, liability, wrongdoing or damage
whatsoever, or (iii) the validity or infirmity of any and all defenses
asserted in the Action.

 

T.            The
Parties acknowledge that the Action is being voluntarily settled with each
Party having been advised by its own counsel, and believe that the terms of
this Stipulation are fair, adequate, reasonable and in the best interests of UT
and its shareholders.

 

NOW,
THEREFORE, IT IS HEREBY STIPULATED AND AGREED, BY AND AMONG THE PARTIES TO
THIS STIPULATION, subject to the approval of the Court pursuant to Court of
Chancery Rule 23.1, that all Released Claims (as defined in
Paragraph 1.11 infra) as to
all Released Persons (as defined in Paragraph 1.13 infra)
and all Released Defendants’ Claims (as defined in Paragraph 1.12 infra) shall be and hereby are compromised, 

 

5

 

settled,
discontinued and dismissed with prejudice and without costs (except as stated
herein) upon the following terms and conditions:

 

I.                                         DEFINITIONS

 

In
addition to the terms defined above, the following additional terms shall have
the meanings specified below:

 

1.1           “1997 Plan” means the United
Therapeutics Corporation Amended and Restated Equity Incentive Plan, as adopted
in 1997 and amended from time to time thereafter.

 

1.2           “Board” means UT’s board of
directors.

 

1.3           “Compensation Committee”
means the Compensation Committee of the Board.

 

1.4           “Defendants’ Affiliates”
means UT’s and the Individual Defendants’ respective present or former spouses,
family members, officers, directors, employees, agents, attorneys, advisors,
accountants, auditors, insurers, trustees, financial advisors, investment
bankers, representatives, affiliates, parents, subsidiaries (including the
directors and officers of such affiliates, parents, and subsidiaries), general
partners, limited partners, partnerships, heirs, executors, personal
representatives, estates, administrators, successors or assigns.

 

1.5           “Effective Date” means the
date the Final Order and Judgment, which approves in all material respects this
Stipulation and the Settlement embodied herein, including the Releases provided
for herein, and dismisses the Action with prejudice, becomes Final.

 

1.6           “Final” means no longer
subject to review upon appeal, whether due to expiration of time to appeal, or
due to final affirmation on appeal and expiration of time for any petition for
reargument, appeal or review, by certiorari or otherwise.

 

1.7           “Judgment” means the Final
Order and Judgment entered by the Court dismissing the Action, with prejudice,
substantially in the form attached hereto as Exhibit C.

 

6

 

1.8           “Notice” means the Notice of
Pendency and Proposed Settlement of Derivative Action, substantially in the
form attached hereto as Exhibit B.

 

1.9           “Person” means a natural
person, individual, corporation, partnership, limited partnership, limited
liability partnership, limited liability company, association, joint venture,
joint stock company, estate, legal representative, trust, unincorporated
association, government or any political subdivision or agency thereof, or any
business or legal entity.

 

1.10         “Plaintiffs’
Counsel” means the undersigned attorneys for Plaintiffs.

 

1.11         “Released Claims” means any
and all claims, rights, demands, suits, matters, issues, causes of action,
liabilities, obligations, expenses, damages, losses, judgments, suits, or any
other matters of any kind, including Unknown Claims (as defined in
Paragraph 1. 20 infra), whether
foreseen or unforeseen, foreseeable or unforeseeable, or certain or contingent,
that have been, or could have been, or in the future could be asserted by
Plaintiffs (on their own behalf directly or derivatively on behalf of UT), by
UT, and by each and every UT stockholder (derivatively or on behalf of UT,)
against the Released Persons, whether under state, federal, or foreign law,
which arise out of or relate in any manner to the allegations, facts, events,
transactions, acts, occurrences, conduct, statements, representations, alleged
misrepresentations, alleged omissions or any other matters that: (i) have
been asserted in the Action; (ii) were recited, described or referenced in
the Action; or (iii)  arise out of or relate to any matters
(A) alleged in the Complaint in the Action or the complaints filed in the
Benison lawsuit or the RBAC lawsuit, (B) concerning, without limitation,
UT’s adoption of the STAP, expansion or amendment of the STAP, stock options,
Share Tracking Awards, the Awards
Repricings, the Option Exchange, grant of stock options or payment of
any compensation to its Chief Executive Officer, and any contracts, agreements
and disclosures relating thereto, or (C) concerning the 

 

7

 

fiduciary
and disclosure obligations or alleged unjust enrichment or waste with respect
to the matters described in parts (i), (ii), and (iii).

 

1.12         “Released Defendants’ Claims”
means all claims, demands, suits, matters, issues, causes of action,
liabilities, obligations, expenses, damages, losses, judgments, or any other
matters of any kind, including Unknown Claims (as defined in Paragraph 1.20 infra), whether foreseen or unforeseen, foreseeable or
unforeseeable, or certain or contingent, whether under state, federal or
foreign law that have been, could have been, or in the future could be asserted
in any forum by the Defendants or any of them or the successors and assigns of
any of them against any of the Plaintiffs, any other UT shareholder or their
attorneys, that arise out of or relate in any way to the institution,
prosecution, or settlement of the Action (except for claims to enforce the
terms of the Settlement).

 

1.13         “Released Persons” means UT,
any and all of the Individual Defendants, and any and all of the Defendants’
Affiliates.

 

1.14         “Releases” means the
releases set forth in Paragraphs 3.1-3.2 below.

 

1.15         “Scheduling Order” means an
order scheduling a hearing on this Stipulation and the Settlement embodied
herein and approving the form of Notice and method of giving notice,
substantially in the form attached hereto as Exhibit A.

 

1.16         “Settlement Hearing” means
the hearing or hearings at which the Court will review the adequacy, fairness,
and reasonableness of the Settlement and rule on Plaintiffs’ request for
attorneys’ fees and expenses.

 

1.17         “Shareholder
Approval” means shareholder approval as defined and computed in accordance with
the rules of NASDAQ or other applicable stock exchange rules.

 

1.18         “Share
Tracking Award” means an award issued pursuant to the STAP.

 

8

 

1.19         “STAP”
means the United Therapeutics Share Tracking Awards Plan.

 

1.20         “Unknown
Claims” means any and all Released Claims which any Plaintiff or other UT
shareholder does not know or suspect to exist in his, her or its favor at the
time of the release of the Released Persons, and any Released Defendants’
Claims which any Defendant does not know or suspect to exist in his, her or its
favor at the time of the release of Plaintiffs, the other UT shareholders and
their counsel, which if known by him, her or it might have affected his, her or
its decision(s) with respect to the Settlement.  With respect to any and all Released Claims
and Released Defendants’ Claims, the Parties stipulate and agree that upon the
Effective Date, Plaintiffs and the Defendants shall expressly waive, and each
other UT shareholder shall be deemed to have waived, and by operation of the
Judgment shall have expressly waived, any and all provisions, rights and
benefits conferred by any law of any state, territory of the United States, or
any foreign nation, or principle of common law, which is similar, comparable,
or equivalent to Cal. Civ. Code § 1542, which provides:

 

A
general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release,
which if known by him or her must have materially affected his or her
settlement with the debtor.

 

Plaintiffs
and the Defendants acknowledge, and each other UT shareholder by operation of
law shall be deemed to have acknowledged, that the inclusion of “Unknown Claims”
in the definition of Released Claims and Released Defendants’ Claims was
separately bargained for and was a key element of the Settlement.

 

II.            TERMS
OF SETTLEMENT

 

The
Defendants agree and acknowledge that Plaintiffs’ filing and prosecution of the
Action, and the negotiations with Plaintiffs’ Counsel, were material factors in
UT’s ability to obtain the below benefits and recoveries and in UT’s decision
to implement the below corporate 

 

9

 

governance
improvements.  UT believes that these
terms confer substantial benefits upon UT and its shareholders.

 

2.1           Benefits and Recoveries. No later than
ten (10) days after the Effective Date, Rothblatt shall surrender and UT
shall cancel 165,214 stock options issued to Rothblatt with a current exercise
price of $30.75 per option and scheduled to expire in December 2017.

 

2.2           Corporate Governance Improvements. In addition
to the benefits and recoveries set forth above, in direct response to, and as a
result of, the Action and Plaintiffs’ efforts, UT has adopted and/or will adopt
no later than ten (10) days after the Effective Date, unless otherwise
provided, the following corporate governance improvements:

 

A)           Stock Option
and Share Tracking Award Plans

 

1.             The adoption of any future
stock option plan shall require Shareholder Approval.

 

2.             Except for any amendments
proposed herein, the 1997 Plan may not be materially amended without
Shareholder Approval.

 

3.             No existing or future awards
under the 1997 Plan or STAP may be amended, exchanged, or re-priced to lower
prices without Shareholder Approval.

 

4.             All Company stock option
plans and share tracking awards plans shall provide that the exercise price for
stock option grants and share tracking awards shall be no less than one hundred
percent (100%) of fair market value of UT common stock on the grant date.  The fair market value of UT stock on a grant
date shall be the closing price for a share of UT common stock on such day as
reported on the NASDAQ or other relevant stock exchange.

 

5.             The Board or Compensation
Committee shall within sixty (60) days after the Effective Date designate a
Company Officer who shall who shall oversee 

 

10

 

mechanisms
for monitoring compliance with laws and regulations relating to the disclosure
of compensation or trading by any applicable option or share tracking award
grantees (e.g., timely and accurate filing of SEC
Forms 3, 4 and 5), as well as compliance with the Company’s stock option plans
and share tracking awards plans.

 

B)            Granting of
Stock Option Awards and Share Tracking Awards

 

1.             Authority to approve the
grant of stock option awards and share tracking awards, or the authority to
approve the formulae or methodology by which such grants are determined, shall
be limited to the full Board or a properly constituted Compensation Committee,
consisting of three or more independent directors, or their duly authorized
delegates.  The majority of the full
Board shall be comprised of independent directors, and the Compensation
Committee shall be comprised solely of independent directors.  For purposes of this Stipulation, “independent
director” shall have the meaning ascribed to such term under Rule 5605(a)(2) of
the NASDAQ listing standards (or any applicable successor rule applicable
to NASDAQ-listed companies’ boards of directors or compensation committees, as
the case may be).

 

2.             Beginning no later than
sixty (60) days after the Effective Date discretionary grants and awards to
directors and any employee subject to § 16 of the Securities Exchange Act
of 1934 or Covered Employees within the meaning of §162(m) of the Internal
Revenue Code shall be approved in advance by either the full Board or Compensation
Committee.  The sole exception to this rule is
that a single independent director, following proper delegation of authority by
the Compensation Committee or full Board, may approve or ratify
non-discretionary stock option grants which are determined solely under a
mechanical formula.

 

11

 

3.             No later than sixty (60)
days after the Effective Date the body authorized to approve the grant of stock
options and share tracking awards shall be specified in the Compensation
Committee Charter, the 1997 Plan, any subsequent equity incentive plans, and
any share tracking awards plans, whether subject to stockholder approval or
not.

 

4.             On a prospective basis
beginning on the Effective Date, Section 5.4 of the 1997 Plan, as adjusted
or amended with Shareholder Approval or as adjusted automatically in accordance
with its terms as a result of stock splits or other events specified in Section 12.1
of the 1997 Plan (Changes in Capital Structure), shall be construed to limit
the number of options that may be granted to the CEO in a single calendar year
notwithstanding any provisions of the 1997 Plan or the CEO’s employment
agreement to the contrary.  The limit
currently imposed by Section 5.4 of the 1997 Plan is 1,000,000 stock
option grants.

 

5.             Dr. Rothblatt’s
employment agreement will not be amended to allow her to receive Share Tracking
Awards in lieu of or in addition to stock options, as long as the 1997 Plan
remains in force and has not exhausted the number of shares available to permit
the grant of stock options sufficient to satisfy the requirements of
Dr. Rothblatt’s employment agreement, as limited by Section 5.4 of
the 1997 Plan.

 

C)            Timing of Stock
Option and Share Tracking Award Grants

 

1.             Beginning no later than
sixty (60) days after the Effective Date, stock options and share tracking
awards granted to all officers, directors, and employees shall be granted only
on pre-set dates, which shall be set by the Compensation Committee prior to the
beginning of the fiscal year in which the stock options are to be granted,
except that stock options and share tracking awards may be granted on other
dates in connection with significant personnel events, such as a new hire,
promotion, new directorship, achievement of a significant 

 

12

 

corporate
objective, or appointment to a board committee. 
The method used to determine the pre-set grant dates, and any future
changes thereto, shall be publicly reported at least ninety (90) days prior to
becoming effective.

 

2.             Beginning no later than
sixty (60) days after the Effective Date, executive officers shall be
prohibited from determining the date of any stock option award or share
tracking award granted to them, except in accordance with the method previously
disclosed pursuant to Paragraph 2.2(C)(1) above.

 

3.             Beginning no later than
sixty (60) days after the Effective Date, all grants of stock options or share
tracking awards—or, in case of stock options or share tracking awards that are
determined in accordance with a formula, all decisions regarding the formulae
or methodology by which such grants are determined—shall be made only at a
meeting of the Board or a properly constituted Compensation Committee and not
by unanimous written consent, except that:

 

i.              a single independent
director may approve or ratify non-discretionary stock option grants which are
determined solely under a mechanical formula, as described in Paragraph  2.2(B)(2) above;
and

 

ii.             the Company’s duly authorized
directors, officers, or managers may approve the grant of such awards in
connection with significant personnel events, as described in Paragraph  2.2(C)(1) above.

 

2.3           The foregoing corporate
governance improvements will not be diminished or removed unless either:

 

A)           the Board determines, in
good faith and upon advice of counsel, that a particular governance improvement
conflicts or will conflict with any applicable law, regulation, 

 

13

 

or
rule (including the NASDAQ rules or other applicable stock exchange
rules), agreement with any governmental entity, or corporate policy approved by
the Company’s shareholders; or

 

B)            such alteration or removal
is approved by a vote of the Company’s shareholders.

 

III.           SCOPE
OF SETTLEMENT AND RELEASES

 

3.1           Upon the Effective Date,
Plaintiffs (on their own behalf or derivatively on behalf of UT), UT, and each
and every other UT stockholder claiming by, through, in the right of,
derivatively, or on behalf of UT, on behalf of themselves and their respective
heirs, executors, personal representatives, estates, administrators, successors
or assigns, shall and hereby do fully, finally and forever release, relinquish,
discharge and dismiss, with prejudice, the Released Persons from any and all
Released Claims.

 

3.2           Upon the Effective Date,
each of the Defendants, on behalf of themselves and their respective Defendants’
Affiliates, shall and hereby do fully, finally, and forever release,
relinquish, and discharge Plaintiffs, all other UT shareholders, and their
counsel from any and all Released Defendants’ Claims.

 

3.3           Permanent Injunction. By operation
of the Judgment, and upon the Effective Date, Plaintiffs and UT agree not to
institute, maintain or prosecute any and all Released Claims against any and
all of the Released Persons, and shall be permanently and finally enjoined from
commencing or prosecuting any actions or other proceedings asserting any or all
of the Released Claims against any or all of the Released Persons.  By operation of the Judgment, and upon the
Effective Date, Defendants agree not to institute, maintain or prosecute any
and all Released Defendants’ Claims against any and all of Plaintiffs, the
other UT shareholders, or their counsel, and shall be permanently and finally
enjoined from commencing or prosecuting any actions or 

 

14

 

other
proceedings asserting any or all of the Released Defendants’ Claims against any
or all of Plaintiffs, the other UT shareholders, or their counsel.

 

3.4           Denial of Wrongdoing. The
Individual Defendants in the Action have denied, and continue to deny, that any
of the Individual Defendants have committed, have attempted to commit or have
threatened to commit any violations of law or breaches of duties to UT, any of
the Plaintiffs in the Action, or UT’s other stockholders, or otherwise have
acted in any improper manner.  Individual
Defendants state that they are entering into this Stipulation solely because
the Settlement would eliminate the burden, expense, and distraction of further
protracted litigation, which the Individual Defendants believe is in the best
interests of UT and its shareholders.

 

IV.           ATTORNEYS’
FEES AND EXPENSES

 

4.1           Plaintiffs
and Plaintiffs’ Counsel shall petition the Court for an award of attorney’s
fees in an amount to be determined (the “Fee Request”).  Defendants are negotiating with Plaintiffs
over whether Defendants will oppose the Fee Request.  The parties may reach an agreement prior to
the Settlement Hearing.  If such an
agreement is reached, the parties will present that agreement to the Court at
the Settlement Hearing, without distributing additional notice.  Any fee amount approved and awarded by the
Court upon the Fee Request described in this paragraph (the “Fee Award”) shall
be paid by the Company, or any successor in interest, in accordance with the
terms of the Stipulation.  The Fee Award shall be paid
jointly to Co-Lead Counsel as receiving agents on behalf of Plaintiffs’ Counsel
within ten (10) days after entry of the Court’s order approving the Fee
Award, notwithstanding the existence of any timely filed objections thereto, or
potential for appeal therefrom, or collateral attack on the Settlement or any
part thereof, subject to the obligation of Plaintiffs’ Counsel to make
appropriate refunds or 

 

15

 

repayments
plus accrued interest promptly if and when, as a result of any appeal and/or
further proceedings on remand, the Fee Award is reversed or reduced.  Co-Lead Counsel shall jointly be responsible
for the internal allocation and distribution of the Fee Award and in the
absence of agreement among Co-Lead Counsel the allocation shall be decided by
the Court on appropriate notice. 
Defendants shall have no responsibility for, and no liability whatsoever
with respect to, any fee allocation among Plaintiffs’ Counsel.

 

4.2           Final resolution of the Fee
Request shall not be a precondition to the dismissal, with prejudice, of the
Action, and any application or litigation concerning the Fee Request may be
considered and resolved separately from the Settlement.  Except as expressly provided herein, the
Parties shall bear their own fees, costs and expenses, and no Party shall assert
any claim for expenses, costs and fees against any other Party.

 

V.            SCHEDULING
ORDER AND SETTLEMENT HEARING

 

5.1           Upon the execution of this
Stipulation, the Parties shall promptly submit this Stipulation together with
its related documents to the Court, and shall apply to the Court to enter the
Scheduling Order, substantially in the form attached hereto as Exhibit A.

 

5.2           UT shall be responsible (a) for
the reproduction and distribution of the Notice, substantially in the form
attached hereto as Exhibit B, in accordance with the Scheduling Order; and
(b) for paying all costs associated therewith, in accordance with the
Scheduling Order, whether or not the Settlement becomes effective, and in no
event shall Plaintiffs or their counsel be responsible for any such notice
costs.  Counsel for UT, at least seven (7) days
before the Settlement Hearing, shall file with the Court an appropriate proof
of mailing of the Notice and compliance with the other Notice procedures set
forth in the Scheduling Order.

 

16

 

VI.          STANDSTILL
AGREEMENT AND STAY OF PROCEEDINGS

 

Except
as provided herein, pending the final determination of whether the Settlement
should be approved by the Court, all Parties to the Action (including
Plaintiffs, Individual Defendants, and UT) agree not to institute,
commence, prosecute, continue, or in any way participate in, whether directly,
representatively, individually, derivatively on behalf of UT, or in any other
capacity, any action or other proceeding asserting any Released Claims or
Released Defendants’ Claims.

 

VII.         EFFECTIVE
DATE OF SETTLEMENT, TERMINATION AND VOIDABILITY

 

7.1          The Settlement shall become
effective on the Effective Date.

 

7.2          In the event that the
Settlement is not approved by the Court, or vacated or modified on appeal, or if
the Judgment is not entered by the Court or does not become Final, or if any
other condition necessary for the Settlement to become effective fails to
occur, then any of the Parties may terminate this Stipulation and withdraw from
the Settlement by providing written notice of such action to undersigned
counsel for all of the other Parties within thirty (30) calendar days after the
failure of such condition, in which case, this Stipulation, including the
Releases, shall be voided.

 

7.3          In the event that the
Settlement is terminated pursuant to Paragraph 7.2 herein, the Settlement and
any actions taken in connection therewith shall become null and void for all
purposes, and all negotiations, transactions, and proceedings connected with
it: (i) shall be without prejudice to the rights and position of any Party
hereto with respect to the Action or any other litigation or judicial
proceeding; (ii) shall not entitle any Party to recover any costs or
expenses incurred in connection with the implementation of this Stipulation; (iii) shall
not be deemed to be or construed as evidence of, or an admission by any Party
of, any fact, matter or 

 

17

 

thing;
and (iv) shall be subject to Rule 408 of the Delaware Rules of Evidence
such that the contents of this Stipulation shall not be admissible in evidence
or be referred to or otherwise used for any purpose in any subsequent
proceedings in the Action or any other litigation or judicial proceeding.  In the event that the Settlement is
terminated pursuant to Paragraph 7.2 herein, the Parties shall be deemed to
have reverted to their respective statuses in the Action as of the date and
time immediately prior to the execution of this Stipulation, and, except as
otherwise expressly provided, the Parties shall proceed in all respects as if
this Stipulation and any related orders had not been executed and/or entered.

 

7.4          In the event this
Stipulation is terminated under Paragraphs 7.2, Paragraph 7.3 shall survive.

 

VIII.       MISCELLANEOUS
PROVISIONS

 

8.1          Cooperation of the Parties. The Parties
acknowledge that it is their intent to consummate the Settlement, and agree to
cooperate to the extent reasonably necessary to effectuate and implement all
terms and conditions of this Stipulation and to exercise their reasonable
efforts to accomplish the foregoing terms and conditions of this Stipulation.

 

8.2          Acknowledgment of Adequate
Consideration. The Parties acknowledge, represent, and warrant to
each other that the terms of the Settlement are such that each of the Parties
is to receive adequate consideration in exchange for consideration given.

 

8.3          No Admissions. Neither this
Stipulation nor the Settlement, nor any provision contained herein, nor any act
performed or document executed pursuant to or in furtherance of this
Stipulation or the Settlement: (a) is or may be deemed to be or may be
used as an admission of, or evidence of the validity or lack of validity of any
Released Claims, or any reserved claims, or any wrongdoing or liability of the
Parties, their counsel, or any Released Persons; (b) is or 

 

18

 

may
be deemed to be or may be used as an admission of, or evidence of, any fault or
omission of any of the Parties or any of the Defendants’ Affiliates in any
civil, criminal, or administrative proceeding in any court, administrative
agency, or other tribunal; or (c) is or may be alleged or mentioned so as
to contravene clause (a) above in any litigation or other action unrelated
to the enforcement of this Stipulation. 
Notwithstanding the foregoing, on or after the Effective Date, any of
the Individual Defendants may file this Stipulation or any judgment or order of
the Court related thereto in any action that may be brought against them, in
order to support a defense or a counterclaim based on res judicata,
collateral estoppel, release, good-faith settlement, judgment bar or reduction,
or any other theory of claim preclusion or issue preclusion, or similar defense
or counterclaim.

 

8.4          Costs. Except as
otherwise expressly provided herein, the Parties shall bear their own costs.

 

8.5          Modification. This
Stipulation may be modified or amended only by a writing signed by all of the
signatories hereto.

 

8.6          Governing Law. This
Stipulation, the Settlement and dismissal contemplated thereunder shall be
governed by, and construed in accordance with, the laws of the State of
Delaware, without regard to Delaware’s conflict of laws rules.

 

8.7          Binding Effect. This
Stipulation shall be binding upon, and inure to the benefit of, all Parties,
their successors and assigns.  This
Stipulation is not intended, and shall not be construed, to create rights in or
confer benefits on any other Persons, and there shall not be any third-party
beneficiaries hereto, except as expressly provided hereby with respect to such
aforementioned Persons who are not Parties hereto.

 

19

 

8.8          Entire Agreement. This
Stipulation and all documents executed pursuant hereto constitute the entire
agreement between the Parties with respect to the Settlement of the Action and
supersede any and all prior negotiations, discussions, agreements, or
undertakings, whether oral or written, with respect to the Settlement of the
Action.

 

8.9          Judicial Enforcement. The Court
shall retain jurisdiction with respect to the implementation and enforcement of
the terms of this Stipulation and the Settlement, and the Parties submit to the
jurisdiction of the Court for the purposes of implementing and enforcing the
terms of this Stipulation and the Settlement.

 

8.10        Warranty of Authority. Each counsel
or person executing this Stipulation or any of the related documents on behalf
of any Party hereto hereby warrants that such Person has the full authority to
do so.  The Parties have caused this
Stipulation to be duly executed and delivered by their counsel of record.

 

8.11        Waiver of Breach. The Parties
may not waive or vary any right hereunder except by an express written waiver
or variation signed by them in hand.  Any
failure to exercise or any delay in exercising any of such rights, or any
partial or defective exercise of any such rights, shall not operate as a waiver
or variation of that or any other such right. 
The waiver by one Party of any breach of this Stipulation by another
Party shall not be deemed a waiver of any other prior or subsequent breach of
this Stipulation.

 

8.12        Fair Construction. This
Stipulation shall not be construed more strictly against one Party than another
merely by virtue of the fact that it, or any part of it, may have been prepared
by counsel for one of the Parties.  This
Stipulation is the result of arm’s length negotiations between the Parties, and
all Parties have contributed substantially and materially to the preparation of
this Stipulation.

 

20

 

8.13        No Assignment of Claims. Plaintiffs
hereby represent and warrant that they have not assigned any rights, claims, or
causes of action that were asserted or could have been asserted in connection
with, under or arising out of any of the claims being settled or released
herein.

 

8.14        No Sanctions. No Party or
its counsel shall make any application for sanctions, pursuant to Rule 11
of the Court of Chancery Rules or other court rule or statute, with
respect to any claims or defenses in the Action.  Defendants will not assert that the Action
was filed in violation of Court of Chancery Rule 11, and they agree that
the Action is being settled voluntarily after consultation with competent legal
counsel and after discovery into the underlying facts of the claims.

 

8.15        Counterparts. This
Stipulation may be executed in counterparts by any of the signatories hereto,
and may be delivered in facsimile or PDF form, and as so executed and delivered
shall constitute one agreement.

 

8.16        Facsimile and Scanned
Signatures. Any signature to this Stipulation, to the extent
signed and delivered by means of a facsimile machine or electronically scanned
and sent via email (e.g., PDF), shall be treated in all manner and respects as
an original signature and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in
person.  At the request of a Party to
this Stipulation, any other Party to this Stipulation so executing and
delivering this document by means of a facsimile machine or via email shall
re-execute original forms thereof and deliver them to the requesting
Party.  No Party to this Stipulation
shall raise the use of a facsimile machine or email to deliver a signature or
the fact that any signature or agreement was transmitted or communicated
through the use of a facsimile machine or email as a defense to the formation
or the enforceability of this Stipulation and each such Party forever waives
any such defense.

 

21

 

8.17        Extensions of Time. Without
further order of the Court, the Parties hereto may agree, in writing, to
reasonable extensions of time to carry out any of the provisions of this
Stipulation, and will cooperate with one another, for good cause, in seeking
any reasonable extension of a Court-imposed deadline when necessary.

 

8.18        Exhibits. The following
exhibits are attached hereto and incorporated herein by reference:

 

(a)           Exhibit A: Scheduling
Order;

 

(b)           Exhibit B: Notice; and

 

(c)           Exhibit C: Final Order
and Judgment.

 

IT
IS HEREBY AGREED by the undersigned as dated below.

 

	
  DATED:
  October 25, 2010

  	
  PRICKETT,
  JONES & ELLIOTT, P.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Paul A. Fioravanti, Jr.

  
	
   

  	
  Michael
  Hanrahan (DE Bar No. 941)

  
	
   

  	
  Paul
  A. Fioravanti, Jr. (DE Bar No. 3808)

  
	
   

  	
  Laina
  M. Herbert (DE Bar No. 4717)

  
	
   

  	
  1310
  N. King Street

  
	
   

  	
  P.O. Box
  1328

  
	
   

  	
  Wilmington,
  Delaware 19801

  
	
   

  	
  (302)
  888-6500

  
	
   

  	
   

  
	
   

  	
  Co-Liaison Counsel for Plaintiffs

  
	
   

  	
   

  
	
  DATED: October 25, 2010

  	
  ROSENTHAL, MONHAIT & GODDESS, P.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Joseph A. Rosenthal

  
	
   

  	
  Joseph
  A. Rosenthal (DE Bar No. 234)

  
	
   

  	
  P.
  Bradford deLeeuw (DE Bar No. 3569)

  
	
   

  	
  919
  N. Market Street, Suite 1401

  
	
   

  	
  P.O. Box
  1070

  
	
   

  	
  Wilmington,
  DE 19899-1070

  
	
   

  	
  (302)
  656-4433

  
	
   

  	
   

  
	
   

  	
  Co-Liaison Counsel for Plaintiffs

  

 

22

 

	
  DATED: October 25, 2010

  	
  BARROWAY TOPAZ KESSLER

  
	
   

  	
  MELTZER & CHECK, LLP

  
	
   

  	
   

  
	
   

  	
  /s/
  Michael J. Hynes

  
	
   

  	
  Eric
  L. Zagar

  
	
   

  	
  Michael
  J. Hynes

  
	
   

  	
  Tara
  P. Kao

  
	
   

  	
  280
  King of Prussia Road

  
	
   

  	
  Radnor,
  PA 19087

  
	
   

  	
  (610)
  667-7706

  
	
   

  	
   

  
	
   

  	
  Co-Lead Counsel for Plaintiffs

  
	
   

  	
   

  
	
  DATED: October 25, 2010

  	
  HARWOOD FEFFER LLP

  
	
   

  	
   

  
	
   

  	
  /s/ Daniella Quitt

  
	
   

  	
  Joel C. Feffer

  
	
   

  	
  Daniella
  Quitt

  
	
   

  	
  488
  Madison Avenue, 8th Floor

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  (212)
  935 7400

  
	
   

  	
   

  
	
   

  	
  Co-Lead Counsel for Plaintiffs

  
	
   

  	
   

  
	
  DATED: October 25, 2010

  	
  BERNSTEIN LITOWITZ

  
	
   

  	
  BERGER & GROSSMANN LLP

  
	
   

  	
   

  
	
   

  	
  /s/ Mark Lebovitch

  
	
   

  	
  Mark
  Lebovitch

  
	
   

  	
  Amy
  Miller

  
	
   

  	
  Jeremy
  Friedman

  
	
   

  	
  1285
  Avenue of the Americas

  
	
   

  	
  New
  York, NY 10019

  
	
   

  	
  (212)
  554-1400

  
	
   

  	
   

  
	
   

  	
  Co-Lead Counsel for Plaintiffs

  
	
   

  	
   

  
	
  DATED: October 22, 2010

  	
  MORRIS, NICHOLS, ARSHT & TUNNELL LLP

  
	
   

  	
   

  
	
   

  	
  /s/
  William M. Lafferty

  
	
   

  	
  William
  M. Lafferty (#2755)

  
	
   

  	
  Bradley
  D. Sorrels (#5233)

  
	
   

  	
  1201
  N. Market Street

  
	
   

  	
  Wilmington,
  Delaware 19801

  
	
   

  	
  (302)
  658-9200

  
	
   

  	
   

  
	
   

  	
  Attorneys for Defendants

  

 

23

 

	
  DATED: October 22, 2010

  	
  GIBSON, DUNN & CRUTCHER LLP

  
	
   

  	
   

  
	
   

  	
  /s/
  Andrew S. Tulumello

  
	
   

  	
  Andrew
  S. Tulumello

  
	
   

  	
  Jason
  J. Mendro

  
	
   

  	
  1050
  Connecticut Avenue, N.W.

  
	
   

  	
  Washington,
  DC 20036

  
	
   

  	
  (202)
  955-8500

  
	
   

  	
   

  
	
   

  	
  Attorneys
  for Defendants

  
	
   

  	
   

  
	
  DATED:
  October 22, 2010

  	
  SQUIRESLAW,
  PLLC

  
	
   

  	
   

  
	
   

  	
  /s/
  Jeffrey L. Squires

  
	
   

  	
  Jeffrey
  L. Squires

  
	
   

  	
  1850
  M St. NW, Ste. 280

  
	
   

  	
  Washington,
  D.C. 20036

  
	
   

  	
  (202)
  223-4500

  
	
   

  	
   

  
	
   

  	
  Attorney
  for Nominal Defendant

  
	
   

  	
  United
  Therapeutics Corporation

  

 

24

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