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EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
October 30, 1998
To the several persons named
at the foot hereof (each a
"Buyer" and collectively,
the "Buyers")
Dear Sirs:
This will confirm that in consideration of the purchase by you of an
aggregate 1,666,667 shares of Common Stock, $.01 par value ("Common Stock"), of
United Therapeutics Corporation, a Delaware corporation (the "Company"),
pursuant to the Stock Purchase Agreement dated as of October 30, 1998 among the
Company and the several Buyers named as parties thereto (the "Purchase
Agreement"), the Company hereby covenants and agrees with each of you, and with
each subsequent holder of Restricted Stock (as such term is defined herein) as
follows:
1. Certain Definitions. As used herein, the following terms shall
have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.
"Common Shares" shall mean the 1,666,667 shares of Common Stock
issued and sold to the Buyers pursuant to the Purchase Agreement.
"Common Stock" shall mean the Common Stock, $.01 par value, of the
Company, as constituted as of the date of this Agreement, subject to
adjustment pursuant to the provisions of Section 10 hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934 or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
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"Public Sale" shall mean any sale of Common Stock to the public
pursuant to an offering registered under the Securities Act or to the
public pursuant to the provisions of Rule 144 (or any successor or similar
rule) adopted under the Securities Act.
"Registration Expenses" shall mean the expenses so described in
Section 8 hereof.
"Restricted Stock" shall mean, subject to the provisions of Section
10 hereof, (i) the Common Shares and (ii) any securities issued upon
exchange, adjustment or transfer of any such shares, the certificates for
which are required by the provisions of Section 2 hereof to bear the
legend set forth in such Section.
"Securities Act" shall mean the Securities Act of 1933 or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in Section 8
hereof.
2. Restrictive Legend. Each certificate representing the Common
Shares and, other than in a Public Sale or as otherwise provided in Section 3
hereof, each certificate issued upon exchange or transfer of any Common Shares,
shall be stamped or otherwise imprinted with a legend substantially in the
following form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS. NEITHER THE SECURITIES EVIDENCED
BY THIS CERTIFICATE, NOR ANY INTEREST THEREIN, MAY BE
OFFERED, SOLD, TRANSFERRED, ENCUMBERED OR OTHERWISE
DISPOSED OF UNLESS EITHER (I) THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT AND THE LAWS RELATING
THERETO OR (II) THE ISSUER HAS RECEIVED AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO
THE ISSUER, STATING THAT SUCH REGISTRATION IS NOT
REQUIRED."
3. Notice of Proposed Transfer. Prior to any proposed transfer of any
Restricted Stock (other than under the circumstances described in Section 4, 5
or 6 hereof), the holder thereof shall give written notice to the Company of its
intention to effect such transfer. Each such notice shall describe the manner of
the proposed transfer and, if requested by the Company, shall be accompanied by
an opinion of counsel reasonably satisfactory to the Company (it being agreed
that Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol shall be satisfactory) to the
effect
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that the proposed transfer of such Restricted Stock may be effected without
registration under the Securities Act, whereupon the holder of such Restricted
Stock shall be entitled to transfer such Restricted Stock in accordance with the
terms of its notice; provided, however, that in the case of any Buyer that is a
partnership, no such opinion or other documentation shall be required if such
notice shall cover a transfer by such partnership to its partners and provided,
further, however, that the shares so transferred shall remain subject to this
Agreement. Each certificate representing the Restricted Stock transferred as
above provided shall bear the legend set forth in Section 2, unless (i) such
transfer is in accordance with the provisions of Rule 144 (or any other rule
permitting public sale without registration under the Securities Act) and is not
made by an affiliate of the Company or (ii) the opinion of counsel referred to
above is to the further effect that the transferee and any subsequent transferee
(other than an affiliate of the Company) would be entitled to transfer such
securities without registration under the Securities Act.
Subject to the foregoing paragraph, the holders of Restricted Stock
shall have the right to transfer shares of Restricted Stock, in whole or in
part, and the rights associated therewith, at any time to any of their
respective affiliates.
The foregoing restrictions on transferability of Restricted Stock
shall terminate as to any particular shares of Restricted Stock when such shares
shall have been effectively registered under the Securities Act and sold or
otherwise disposed of in accordance with the intended method of disposition by
the seller or sellers thereof set forth in the registration statement concerning
such shares. Whenever a holder of Restricted Stock is able to demonstrate to the
Company (and its counsel) that the provisions of Rule 144(k) of the Securities
Act are available to such holder without limitation, such holder of Restricted
Stock shall be entitled to receive from the Company, without expense, a new
certificate not bearing the restrictive legend set forth in Section 2 in
exchange for the surrender of the existing certificate, which shall be marked
canceled by the Company.
4. Required Registration; Purchase Option.
(a) At any time following the earlier to occur of (i) the date six
months after the date on which the Company shall have completed an initial
public offering of shares of its Common Stock (hereinafter referred to as an
"IPO") and (ii) the fifth anniversary of the date hereof, the holders of
Restricted Stock constituting at least twenty-five percent (25%) of the total
Restricted Stock outstanding at such time may request the Company to register
under the Securities Act all or any portion of the Restricted Stock held by such
requesting holder or holders for sale in the manner specified in such notice,
provided, however, that the only securities which the Company shall be required
to register pursuant hereto shall be shares of Common Stock and provided
further, however, that the reasonably anticipated aggregate price to the public
would equal at least $2 million. Notwithstanding anything in this Section 4(a)
to the contrary, in the event that (x) an IPO shall not occur prior to the fifth
anniversary of this Agreement and (y) the requisite holders of Restricted Stock
request the Company to register Restricted Stock as
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provided in clause (ii) of the preceding sentence, the Company shall have the
right and option (the "Purchase Option"), in lieu of registering such Restricted
Stock (including any additional shares of Restricted Stock for which
registration is requested as provided in Section 4(b) below) (collectively, the
"Specified Shares"), of offering to purchase all (but not less than all) of such
Specified Shares on the terms and subject to the conditions set forth in, and
for the purchase price determined in accordance with, Section 4(e) below.
(b) Promptly following receipt of any notice under Section 4(a), the
Company shall notify any holders of Restricted Stock from whom notice has not
been received and shall use its best efforts to register under the Securities
Act, for public sale in accordance with the method of disposition specified in
such notice from requesting holders, the number of shares of Restricted Stock
specified in such notice (and in any notices received from other holders of
Restricted Stock within 20 days after their receipt of such notice from the
Company). If such method of disposition shall be an underwritten public
offering, (i) the Company may designate the managing underwriter of such
offering, subject to the approval of the holders of a majority of the Restricted
Stock proposed to be sold, which approval shall not be unreasonably withheld,
and (ii) as and to the extent that, in the opinion of the managing underwriter,
the Restricted Stock so requested to be registered would adversely affect the
marketing of such Restricted Stock, the Company shall include in such
registration, to the extent of the number which the Company is so advised can be
sold in such offering, (x) first, Restricted Stock requested to be included in
such registration by the holder or holders thereof, pro rata among the
requesting holders of Restricted Stock based upon the number of shares of
Restricted Stock requested to be registered and (y) second, securities the
Company proposes to sell and other securities of the Company included in such
registration by the holders thereof. The Company shall be obligated to register
Restricted Stock pursuant to Section 4(a) on two occasions only and no more than
once in any twelve-month period. Notwithstanding anything to the contrary
contained herein, each obligation of the Company to register Restricted Stock
under this Section 4 shall be deemed satisfied only when a registration
statement covering all shares of Restricted Stock specified in notices received
as aforesaid, for sale in accordance with the method of disposition specified by
the requesting holder, shall have become effective and, if such method of
disposition is a firm commitment underwritten public offering, at least 90% of
such shares shall have been sold pursuant thereto.
(c) In the event that the Board of Directors of the Company
determines in good faith that the filing of a registration statement pursuant to
Section 4(a) hereof would be detrimental to the Company, the Board of Directors
may defer such filing for a period not to exceed sixty (60) days. The Board of
Directors may not effect more than one such deferral during any twelve month
period. The Board of Directors agrees to promptly notify all holders of
Restricted Stock of any such deferral, and shall provide to such holders an
explanation therefor.
(d) The Company shall be entitled to include in any registration
statement referred to in this Section 4, for sale in accordance with the method
of disposition specified by the requesting holders, shares of Common Stock to be
sold by the Company for its own account,
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except as and to the extent that, in the opinion of the managing underwriter (if
such method of disposition shall be an underwritten public offering), such
inclusion would adversely affect the marketing of the Restricted Stock to be
sold. Except as provided in this paragraph (d), the Company will not effect any
other registration of its Common Stock, whether for its own account or that of
other holders (except with respect to a registration statement filed on Form S-8
or any successor form),, from the date of receipt of a notice from requesting
holders pursuant to this Section 4 until 90 days after the completion of the
period of distribution of the registration contemplated thereby.
(e) (1) In the event that the Company is entitled to exercise the
Purchase Option described in Section 4(a) above and elects to exercise such
Purchase Option, it shall give written notice of such election to all holders of
Specified Shares requesting registration pursuant to said Section 4(a) no later
than 30 days following receipt of such request for registration. The purchase
price (the "Purchase Price") for the Specified Shares shall be (i) an amount
representing the fair market value for such shares acceptable to the Company and
to the holders of not less than a majority of the Specified Shares (the
"Specified Majority") or, in the absence of agreement on such fair market value,
(ii) an amount representing the fair market value for such shares as determined
by an independent, nationally recognized investment banking firm mutually
acceptable to the Company and the Specified Majority. The fees and expenses of
such investment banking firm shall be paid one half by the Company and one half
by the holders of the Specified Shares, pro rata on the basis of the number of
Specified Shares held by such holders.
(2) Once the Purchase Price for the Specified Shares has been
determined as provided in clause (1) above, the Specified Majority shall have
fifteen days to determine whether or not to go forward with the sale of the
Specified Shares to the Company as provided in this Section 4(e). In the event
that the Specified Majority does not wish to sell the Specified Shares to the
Company for the Purchase Price, the Specified Majority shall give the Company
written notice during such fifteen day period of its election not to sell, in
which event the Company shall have no further obligations under this Section 4
to register any Restricted Shares or otherwise. In the event that the Specified
Majority does not respond within such fifteen day period or indicates its
acceptance of the Purchase Price, then the holders of the Specified Shares shall
sell such shares to the Company for the Purchase Price at a closing to be held
not more than fifteen days following the end of the prior fifteen day period. At
such closing, the holders of the Specified Shares shall deliver certificates
evidencing the Specified Shares to the Company, duly endorsed for transfer or
accompanied by stock powers executed in blank, against payment of the Purchase
Price therefor by wire transfer to the account or accounts specified by the
party entitled to receive the same. The Purchase Price shall be payable in cash.
5. Form S-3 Registration.
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(a) If the Company shall receive from any holder or holders of
Restricted Stock, a written request or requests that the Company effect a
registration on Form S-3, at any time that the Company is entitled to use such
form, and any related qualification or compliance with respect to Restricted
Stock owned by such holder or holders, the reasonably anticipated aggregate
price to the public of which would equal at least $500,000, the Company will:
i) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other holders of
Restricted Stock from whom notice has not been received; and
ii) as soon as practicable, effect such registration (including,
without limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualifications under applicable blue sky or other
state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act and any other government
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such
holder's or holders' Restricted Stock as are specified in such request,
together with all or such portion of the Restricted Stock of any holder or
holders thereof joining in such request as are specified in a written
request given within thirty (30) days after receipt of such written notice
from the Company, provided, however, that the only securities which the
Company shall be required to register pursuant hereto shall be shares of
Common Stock. Subject to the foregoing, the Company shall file a
registration statement covering the Restricted Stock so requested to be
registered as soon as practicable after receipt of the request or requests
of the holders of the Restricted Stock.
(b) The Company shall be obligated to register Restricted Stock
under Section 5(a) on an unlimited number of occasions but in no event more than
twice in any twelve-month period and to cause any such registration to remain in
effect for 90 days, after which time such registration may be terminated.
Registrations effected pursuant to this Section 5 shall not be counted as
requests for registration effected pursuant to Section 5.
6. Incidental Registration. If the Company at any time (other than
pursuant to Section 4 or Section 5 hereof) proposes to register any of its
Common Stock under the Securities Act for sale to the public, whether for its
own account or for the account of other security holders or both (except with
respect to registration statements on Form S-4 or S-8 or another form not
available for registering the Restricted Stock for sale to the public), it will
give written notice at such time to all holders of outstanding Restricted Stock
of its intention to do so. Upon the written request of any such holder, given
within 20 days after receipt of any such notice by the Company, to register any
of its Restricted Stock (which request shall state the intended method of
disposition thereof), the Company will use its best efforts to cause the
Restricted Stock as to which registration shall have been so requested to be
included in the securities to be covered by the registration statement proposed
to be filed by the Company, all to the extent requisite to
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permit the sale or other disposition by the holder (in accordance with its
written request) of such Restricted Stock. In the event that any registration
pursuant to this Section 6 shall be, in whole or in part, an underwritten public
offering of Common Stock, any request by a holder pursuant to this Section 6 to
register Restricted Stock shall specify that either (i) such Restricted Stock is
to be included in the underwriting on the same terms and conditions as the
shares of Common Stock otherwise being sold through underwriters under such
registration or (ii) such Restricted Stock is to be sold in the open market
without any underwriting, on terms and conditions comparable to those normally
applicable to offerings of common stock in reasonably similar circumstances. In
any such underwritten public offering of Common Stock, if, in the opinion of the
managing underwriter, the Restricted Stock so requested to be registered would
adversely affect the marketing of such Common Stock, the Company shall include
in such registration, to the extent of the number which the Company is so
advised can be sold in such offering, (x) first, securities proposed by the
Company to be sold for its own account, (y) second, Restricted Stock requested
to be included in such registration by the holder or holders thereof and other
securities of the Company requested to be included in such registration pursuant
to registration rights granted by the Company to the holders of such securities
prior to the date hereof, pro rata among the requesting holders of Restricted
Stock and such other securities based upon the number of shares of Restricted
Stock and such other securities requested to be registered and (z) third, other
securities of the Company requested to be included in such registration (other
than as described in clause (y) above).
Notwithstanding anything to the contrary contained in this Section 6,
in the event of a firm commitment underwritten initial public offering of Common
Stock of the Company, reasonably expected by the underwriters thereof to result
in aggregate net proceeds to the Company of at least $20,000,000, and a holder
of Restricted Stock does not elect, or is not allowed (at the discretion of the
underwriters thereof), to sell his Restricted Stock to such underwriters of the
Common Stock of the Company in connection with such offering, such holder shall
refrain from selling such Restricted Stock so registered pursuant to this
Section 6 during the period of distribution of the Common Stock of the Company
by such underwriters and the period in which the underwriting syndicate
participates in the after market; provided, however, that (i) each person or
group having beneficial ownership of five percent (5%) or more of the Company's
capital stock and each executive officer and director of the Company shall have
executed a written "lock-up" agreement required by the managing underwriter of
such public offering with the same "lock-up" restrictions as provided therein,
and (ii) that such holder shall, in any event, be entitled to sell his
Restricted Stock commencing on the 180th day after the effective date of such
registration statement.
7. Registration Procedures. If and whenever the Company is required
by the provisions of Section 4, 5 or 6 hereof to use its reasonable best efforts
to effect the registration of any of the Restricted Stock under the Securities
Act, the Company will, as expeditiously as possible:
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(a) prepare (and afford counsel for the selling holders reasonable
opportunity to review and comment thereon) and file with the Commission a
registration statement (which, in the case of an underwritten public offering
pursuant to Section 4 hereof, shall be on Form S-1 (or SB-1), S-3 or other form
of general applicability satisfactory to the managing underwriter selected as
therein provided) with respect to such securities and use its best efforts to
cause such registration statement to become and remain effective for the period
of the distribution contemplated thereby (determined as hereinafter provided);
(b) prepare (and afford counsel for the selling holders reasonable
opportunity to review and comment thereon) and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for the period specified in paragraph (a) above and as shall
comply with the provisions of the Securities Act with respect to the disposition
of all Restricted Stock covered by such registration statement in accordance
with the sellers' intended method of disposition set forth in such registration
statement for such period;
(c) furnish to each seller and to each underwriter such number of
copies of the registration statement and the prospectus included therein
(including each preliminary prospectus) as such persons may reasonably request
in order to facilitate the public sale or other disposition of the Restricted
Stock covered by such registration statement;
(d) use its best efforts to register or qualify the Restricted Stock
covered by such registration statement under the securities or blue sky laws of
such jurisdictions as the sellers of Restricted Stock or, in the case of an
underwritten public offering, the managing underwriter, shall reasonably
request, and use its best efforts to list all Restricted Stock covered by such
registration statement on any securities exchange on which any other securities
of the same class as the Restricted Stock are then listed;
(e) immediately notify each seller under such registration statement
and each underwriter, at any time when a prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event as a
result of which the prospectus contained 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 be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
(f) use its best efforts (if the offering is underwritten) to
furnish, at the request of any seller, on the date that Restricted Stock is
delivered to the underwriters for sale pursuant to such registration: (i) an
opinion dated such date of counsel representing the Company for the purposes of
such registration, addressed to the underwriters and to such seller, stating
that such registration statement has become effective under the Securities Act
and that (A) to the knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under
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the Securities Act, (B) the registration statement, the related prospectus, and
each amendment or supplement thereof, comply as to form in all material respects
with the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder (except that such counsel need express
no opinion as to financial statements contained therein or any information
provided by the underwriters or the sellers) and (C) to such other effects as
may reasonably be requested by counsel for the underwriters or by such seller or
its counsel, and (ii) a letter dated such date from the independent public
accountants retained by the Company, addressed to the underwriters and to such
seller, stating that they are independent public accountants within the meaning
of the Securities Act and that, in the opinion of such accountants, the
financial statements of the Company included in the registration statement or
the prospectus, or any amendment or supplement thereof, comply as to form in all
material respects with the applicable accounting requirements of the Securities
Act, and such letter shall additionally cover such other financial matters
(including information as to the period ending no more than five business days
prior to the date of such letter) with respect to the registration in respect of
which such letter is being given as such underwriters or seller may reasonably
request; and
(g) make available for inspection by each seller, any underwriter
participating in any distribution pursuant to such registration statement, and
any attorney, accountant or other agent retained by such seller or underwriter,
all financial and other records, pertinent corporate documents and properties of
the Company, and cause the Company's officers, directors and employees to supply
all information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement and permit
such seller, attorney, accountant or agent to participate in the preparation of
such registration statement.
For purposes of paragraphs (a) and (b) above and of Section 4(c) hereof, the
period of distribution of Restricted Stock in a firm commitment underwritten
public offering shall be deemed to extend until each underwriter has completed
the distribution of all securities purchased by it, and the period of
distribution of Restricted Stock in any other registration shall be deemed to
extend until the earlier of the sale of all Restricted Stock covered thereby or
six months after the effective date thereof.
In connection with each registration hereunder, the selling holders
of Restricted Stock will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as shall be
reasonably necessary in order to assure compliance with federal and applicable
state securities laws.
In connection with each registration pursuant to Sections 4, 5 and 6
hereof covering an underwritten public offering, the Company agrees to enter
into a written agreement with the managing underwriter selected in the manner
herein provided in such form and containing such provisions as are customary in
the securities business for such an arrangement between underwriters and
companies of the Company's size and investment stature, provided that such
agreement shall not contain any such provision applicable to the Company which
is
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inconsistent with the provisions hereof and provided, further, that the time and
place of the closing under said agreement shall be as mutually agreed upon among
the Company and such underwriter.
8. Expenses. All expenses incurred by the Company in complying with
Sections 4, 5 or 6 hereof, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees of the National Association
of Securities Dealers, Inc. or any successor thereto, transfer taxes, fees of
transfer agents and registrars, costs of insurance and fees and expenses of one
counsel for the sellers of Restricted Stock, but excluding any Selling Expenses,
are herein called "Registration Expenses". All underwriting discounts and
selling commissions applicable to the sale of Restricted Stock are herein called
"Selling Expenses".
The Company will pay all Registration Expenses in connection with
each registration statement filed pursuant to Section 4, 5 or 6 hereof. All
Selling Expenses and any Registration Expenses not required to be paid by the
Company in connection with any registration statement filed pursuant to Section
4, 5 or 6 hereof shall be borne by the participating sellers in proportion to
the number of shares sold by each, or by such persons other than the Company
(except to the extent the Company shall be a seller) as they may agree.
9. Indemnification. In the event of a registration of any of the
Restricted Stock under the Securities Act pursuant to Section 4, 5 or 6 hereof,
to the extent permitted by law, the Company will indemnify and hold harmless
each seller of such Restricted Stock thereunder and each underwriter of
Restricted Stock thereunder and each officer, director and each other person, if
any, who controls such seller or underwriter within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such seller or underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Restricted Stock was
registered under the Securities Act pursuant to Section 4, 5 or 6, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
such seller, each such underwriter and each such controlling person for any
legal or other expenses as and when reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company will not be liable in any such case
if and to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in reliance upon and in conformity with information furnished by such
seller, such underwriter or such controlling person in writing specifically for
use in the preparation of such registration statement or prospectus and provided
further, however,
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that the indemnity contained in this Section 8 with respect to any preliminary
prospectus shall not inure to the underwriter's benefit or to the benefit of any
such other person in respect of any loss, claim, damage or liability asserted by
a person who purchased the Restricted Stock from the underwriter if a copy of
the final prospectus (as the same may be amended or supplemented) was not sent
or given to such person with or prior to written confirmation of the sale to
such person and if the untrue statement or omission or alleged untrue statement
or omission of a material fact contained in such preliminary prospectus was
corrected in the final prospectus (as the same may be amended or supplemented
prior to such sale) and if the underwriter would not have been liable had a copy
of the final prospectus (as the same may be amended or supplemented prior to
such sale) been so sent or given.
In the event of a registration of any of the Restricted Stock under
the Securities Act pursuant to Section 4, 5 or 6 hereof, to the extent permitted
by law, each seller of such Restricted Stock thereunder, severally and not
jointly, will indemnify and hold harmless the Company and each officer, director
and each other person, if any, who controls the Company within the meaning of
the Securities Act, each officer of the Company who signs the registration
statement, each director of the Company, each underwriter and each person who
controls any underwriter within the meaning of the Securities Act, against all
losses, claims, damages or liabilities, joint or several, to which the Company
or such officer or director or underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the registration statement under which such Restricted Stock was
registered under the Securities Act pursuant to Section 4, 5 or 6, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company and each such officer, director, underwriter and controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that such seller will be liable hereunder in any such case if
and only to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in reliance upon and in conformity with information
pertaining to such seller, as such, furnished to the Company in writing
specifically for use in such registration statement or prospectus; provided,
further, however, that the liability of each seller hereunder shall be limited
to the proportion of any such loss, claim, damage, liability or expense which is
equal to the proportion that the proceeds of shares sold by such seller under
such registration statement bears to the total proceeds of all securities sold
thereunder, but not to exceed the proceeds received by such seller from the sale
of Restricted Stock covered by such registration statement.
Promptly after receipt by an indemnified party hereunder of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be
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made against the indemnifying party hereunder, notify the indemnifying party in
writing thereof, but the omission to so notify the indemnifying party shall not
relieve it from any liability which it may have to any indemnified party other
than under this Section 9. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate in and, to the
extent it shall wish, to assume and undertake 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 and
undertake the defense thereof, the indemnifying party shall not be liable to
such indemnified party under this Section 9 for any legal expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation and of liaison with counsel so selected;
provided, however, that, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be reasonable defenses available to it
which are different from or additional to those available to the indemnifying
party, or if the interests of the indemnified party reasonably may be deemed to
conflict with the interests of the indemnifying party, the indemnified party
(or, if there is more than one indemnified party, all of the indemnified parties
collectively) shall have the right to select a separate counsel with the consent
of the indemnifying party (which consent shall not be unreasonably withheld) and
to assume such legal defenses and otherwise to participate in the defense of
such action, with the expenses and fees of such separate counsel and other
expenses related to such participation to be reimbursed by the indemnifying
party as incurred.
Notwithstanding the foregoing, any indemnified party shall have the
right to retain its own counsel in any such action, but the fees and
disbursements of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party shall have failed to retain counsel for the
indemnified person as aforesaid or (ii) the indemnifying party and such
indemnified party shall have mutually agreed to the retention of such counsel.
It is understood that the indemnifying party shall not, in connection with any
action or related actions in the same jurisdiction, be liable for the fees and
disbursements of more than one separate firm qualified in such jurisdiction to
act as counsel for the indemnified parties hereunder. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
prior written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
If the indemnification provided for in the first two paragraphs of
this Section 9 is unavailable or insufficient to hold harmless an indemnified
party under such paragraphs in respect of any losses, claims, damages or
liabilities or actions in respect thereof referred to therein, then each
indemnifying party shall in lieu of indemnifying such indemnified party
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or actions in such proportion as
appropriate to reflect the relative fault of the Company, on the one hand, and
the sellers of such Restricted Stock, on the other, in connection
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with the statements or omissions which resulted in such losses, claims, damages,
liabilities or actions as well as any other relevant equitable considerations,
including without limitation the failure to give any notice under the third
paragraph of this Section 9. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement, or
omission, of a material fact relates to information supplied by the Company, on
the one hand, or the sellers of such Restricted Stock, on the other, and to the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the sellers of
Restricted Stock agree that it would not be just and equitable if contributions
pursuant to this paragraph were determined by pro rata allocation (even if all
of the sellers of such Restricted Stock were treated as one entity for such
purpose) or by any other method of allocation which did not take account of the
equitable considerations referred to above in this paragraph. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or actions in respect thereof, referred to above in this paragraph,
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this paragraph, the sellers
of Restricted Stock shall not be required to contribute any amount in excess of
the amount, if any, by which the total proceeds from the Common Stock sold by
each of them in an offering to the public exceeds the amount of any damages
which they would have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the Securities Act),
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.
The indemnification of underwriters provided for in this Section 9
shall be on such other terms and conditions as are at the time customary and
reasonably required by such underwriters. In the event that such indemnification
of underwriters is on such other terms and conditions, the indemnification of
the sellers of Restricted Stock in such underwriting shall, at the sellers'
request, be modified to conform to such terms and conditions.
10. Changes in Common Stock. If, and as often as, there are any
changes in the Common Stock by way of stock split, stock dividend, combination
or reclassification, or through merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof, as may be required, so that the rights and privileges
granted hereby shall continue with respect to the Common Stock as so changed and
shall apply to any securities received in any such transaction.
11. Representations and Warranties of the Company. The Company
represents and warrants to you as follows:
(a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other agency of
government, the Certificate of Incorporation or
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By-laws of the Company, or any provision of any indenture, agreement or other
instrument to which it or any of its properties or assets is bound, or conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any such indenture, agreement or other instrument, or
result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws from time to time
in effect affecting the enforcement of creditors rights generally and to general
equitable principles.
12. Rule 144 Reporting. The Company agrees with you as follows:
(a) The Company shall make and keep public information available,
as those terms are understood and defined in Rule 144 under the Securities Act
(or any successor act, regulation or rule thereto), at all times from and after
the date it is first required to do so.
(b) The Company shall file with the Commission in a timely manner all
reports and other documents as the Commission may prescribe under Section 13(a)
or 15(d) of the Exchange Act (or any successor act, regulation or rule thereto)
at any time after the Company has become subject to such reporting requirements
of the Exchange Act.
(c) The Company shall furnish to such holder of Restricted Stock
forthwith upon request (i) a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 (at any time from and
after the date it first becomes subject to such reporting requirements), and of
the Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements), (ii) a copy of the most recent annual or
quarterly report of the Company, and (iii) such other reports and documents so
filed as a holder may reasonably request to avail itself of any rule or
regulation of the Commission allowing a holder of Restricted Stock to sell any
such securities without registration.
13. Miscellaneous.
(a) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto, including without limitation the rights to
indemnification under Section 9 hereof, shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so expressed
or not. Without limiting the generality of the foregoing, the registration
rights conferred herein on the holders of Restricted Stock shall inure to the
benefit of any and all subsequent holders from time to time of the Restricted
Stock for so long as the certificates representing the Restricted Stock shall be
required to bear the legend specified in Section 2 hereof.
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(b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be mailed by first-class registered
mail, postage prepaid, addressed as follows:
if to the Company, to it at 0000 Xxxxxx Xxxxxx, Xxxxxx Xxxxxx,
Xxxxxxxx 00000, Attention: Chief Executive Officer, with a copy to Xxxxx
X. Xxxxx, Xx., Esq., Xxxxx Xxxx LLP, One Metropolitan Square, 000 X.
Xxxxxxxx, Xxxxx 0000, Xx. Xxxxx, Xxxxxxxx 00000-0000;
if to any Buyer, at its address as set forth in Schedule I hereto,
with a copy to Xxxx X. XxxXxxxxx, Esq., Reboul, MacMurray, Xxxxxx, Xxxxxxx
& Kristol, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and
if to any subsequent holder of Restricted Stock, to it at such
address as may have been furnished to the Company in writing by such
holder;
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a holder of Restricted Stock) or to
the holders of Restricted Stock (in the case of the Company). Any notice or
other communication pursuant to this Agreement shall be deemed to have been duly
given or made and to have become effective when delivered in hand to the party
to which directed or if sent by first-class registered mail, postage prepaid and
properly addressed as set forth above, at the earlier of (i) the time when
received by the addressee or (ii) the fifth business day following the dispatch
thereof.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE.
15. This Agreement and the Schedules hereto and the other documents
delivered pursuant hereto or in connection herewith constitute the full and
entire understanding and agreement between the parties, and supersede all prior
understandings, negotiations and prior agreements between the parties with
regard to the subjects hereof and thereof.
16. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the parties shall
negotiate in good faith with a view to the substitution therefor of a suitable
and equitable solution in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid provision, provided,
however, that the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not
be in any way impaired thereby, it being intended that all of the rights and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by law.
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17. Headings of sections and paragraphs of this Agreement are
inserted for convenience of reference only and shall not affect the
interpretation or be deemed to constitute a part hereof.
18. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this letter, whereupon this letter (herein
sometimes called "this Agreement") shall be a binding agreement between the
Company and you.
Very truly yours,
UNITED THERAPEUTICS CORPORATION
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------------
Name:
Title:
AGREED TO AND ACCEPTED
as of the date first above written:
XXXXXXX XXXXX KECALP L.P. 1997
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Treasurer
KECALP, Inc.: General Partner
XXXXXXX XXXXX KECALP INTERNATIONAL
L.P. 1997
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Treasurer
KECALP International Ltd.: General Partner
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SCHEDULE I
Buyers
No. of Shares
-------------
XXXXXXX XXXXX KECALP L.P. 1997 1,250,000
World Financial Center
South Tower - 23rd Floor
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xx. Xxxxxx Xxxxxxxx
XXXXXXX XXXXX KECALP 416,667
INTERNATIONAL L.P. 1997
World Financial Center
South Tower - 23rd Floor
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xx. Xxxxxx Xxxxxxxx
