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LIMITED LIABILITY COMPANY
AGREEMENT
of
T3 THERAPEUTICS, LLC
a Delaware Limited Liability Company
Dated as of June 25, 2002
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TABLE OF CONTENTS
PAGE
ARTICLE I ORGANIZATION AND POWERS.................................................................2
1.01 Organization..............................................................................2
1.02 Powers....................................................................................3
ARTICLE II MANAGEMENT.............................................................................4
2.01 Managers..................................................................................4
2.02 Managers as Members.......................................................................7
2.03 Management of the Company.................................................................7
2.04 Duties of Care and Loyalty of Managers....................................................8
2.05 Contracts with Affiliated Persons.........................................................8
2.06 Compensation of Managers and Members......................................................9
2.07 Indemnification of Managers, Officers and Others..........................................9
2.08 Officers of the LLC.......................................................................9
ARTICLE III Members and Capital Contributions....................................................11
3.01 Capital Accounts.........................................................................11
3.02 Initial Members and Initial Capital Contributions........................................11
3.03 Additional Members.......................................................................13
3.04 No Withdrawal of or Interest on Capital..................................................13
3.05 Liability of Members.....................................................................13
3.06 Additional Capital Requirements..........................................................14
3.07 Third Party Liabilities..................................................................15
3.08 Class B Redemption Rights and Redemption on Certain Events...............................15
ARTICLE IV Distributions.........................................................................15
4.01 Distribution of Company Funds............................................................15
4.02 Distribution Upon Dissolution............................................................16
4.03 Distribution of Assets in Kind...........................................................16
4.04 Distributions to Cover Members' Tax Liability............................................16
ARTICLE V Allocation of Profits and Losses.......................................................17
5.01 Allocation of Profits and Losses.........................................................17
ARTICLE VI FISCAL MATTERS........................................................................18
6.01 Books and Records........................................................................18
6.02 Bank Accounts............................................................................18
6.03 Fiscal Year..............................................................................18
6.04 Tax Matters Partner......................................................................18
ARTICLE VII Transfers and Company Issuances......................................................19
7.01 Restrictions on Transfer.................................................................19
7.02 Right of Participation in Company Sales..................................................20
ARTICLE VIII Dissolution and Termination.........................................................22
8.01 Limitations..............................................................................22
8.02 Events Causing Dissolution...............................................................22
8.03 Procedures on Dissolution................................................................22
ARTICLE IX Tax Allocation Provisions.............................................................23
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TABLE OF CONTENTS
PAGE
9.01 Required Regulatory Allocations..........................................................23
9.02 Curative Allocations.....................................................................24
9.03 Tax Allocations and Book Allocations.....................................................25
9.04 General Allocation and Distribution Rules................................................25
9.05 Tax Withholding..........................................................................26
ARTICLE X General Provisions.....................................................................26
10.01 Notices.................................................................................26
10.02 Word Meanings...........................................................................27
10.03 Binding Provisions......................................................................27
10.04 Applicable Law..........................................................................27
10.05 Counterparts............................................................................27
10.06 Separability of Provisions..............................................................27
10.07 Section Titles..........................................................................27
10.08 Amendments..............................................................................28
10.09 Entire Agreement........................................................................28
10.10 Waiver of Partition.....................................................................28
10.11 Survival of Certain Provisions..........................................................28
ARTICLE XI DEFINITIONS...........................................................................29
SCHEDULES
..........Schedule 1: Members and Managers
..........Schedule 2: Additional Terms and Conditions
EXHIBITS
..........Exhibit A: Form of Option Agreement
..........Exhibit B: Form of Promissory Note
..........Exhibit C: Form of Purchase and Sale Agreement
..........Exhibit D: Form of Registration Rights Agreement
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T3 THERAPEUTICS, LLC
LIMITED LIABILITY COMPANY AGREEMENT
THIS LIMITED LIABILITY COMPANY AGREEMENT shall govern the business and operations of T3
Therapeutics, LLC, a Delaware limited liability company (the "COMPANY") and is entered into
effective as of June 25, 2002 by and among the persons identified as Members and Managers in
SCHEDULE I hereto. Capitalized terms used herein and otherwise undefined shall have the meanings
given to them in Article XI.
WHEREAS, T3 Therapeutics, Inc., a New York corporation (the "DEVELOPMENT CORPORATION"), has
undertaken the preliminary design, development and research of products containing T3 (3,5,3' -
Triiodo-L-Thyronine) or its derivatives as the active ingredient in compounds and applications for
the treatment of diseases and medical conditions (the "PRODUCTS");
WHEREAS, ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, constitute all of the Directors and
Stockholders of the Development Corporation and have transferred to the Development Corporation any
and all of their intellectual property rights or other rights and know-how of all kinds that relate
to the Products and by the premises hereof, do repeat, confirm and acknowledge such transfer;
WHEREAS, in order to secure funding for the further development of the Products, the
Development Corporation has agreed to contribute to the Company, irrevocably, completely and for all
time all of its right, title and interest in and to the (i) Products, (ii) all technical data,
information, material and other know-how currently owned by the Development Corporation that is
necessary or useful to the development of the Products (collectively, the "PRODUCT KNOW-HOW"); and
(iii) all intellectual property rights to the Products and Product Know-How including but not
limited to a certain Patent License with the North Shore Hospital (collectively, the "PRODUCT
RIGHTS"), in exchange for the Class A Interests set forth and described on SCHEDULE I hereto; and
WHEREAS, to provide funding for such further development, The St. ▇▇▇▇▇▇▇▇ Seaway
Corporation, an Indiana corporation, has agreed to subscribe for the Class B Interests set forth on
SCHEDULE I hereto.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
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ARTICLE I
ORGANIZATION AND POWERS
1.01 ORGANIZATION.
(a) FORMATION. The rights and liabilities of the Members of the Company shall be as
provided in the Act, except as otherwise expressly provided herein. In the event of any
inconsistency between any terms and conditions contained in this Agreement and any nonmandatory
provisions of the Act, the terms and conditions contained in this Agreement shall govern.
(b) CERTIFICATE OF FORMATION; FILINGS. A Certificate of Formation (the "Certificate) has
been executed and filed in the Office of the Delaware Secretary of State as required by the Act.
With the Consent of the Members, the Board of Managers of the Company (the "BOARD") may execute and
file any duly authorized amendments to the Certificate from time to time in a form prescribed by the
Act. The Board shall also cause to be made, on behalf of the Company, such additional filings and
recordings as the Board shall deem necessary or advisable.
(c) BUSINESS PURPOSE. The Company is the successor to the business of owning, developing
and exploiting the Products, the Product Know-How and the Product Rights. The Company shall engage
solely in the business of developing, manufacturing, marketing, selling and licensing the Products.
Any change to the business purpose of the Company shall require the approval of the Board and the
written consent of (i) the Class A Members holding a majority of the Class A Units, voting as a
single class and (ii) the Class B Members holding a majority of the Class B Units voting as a single
class.
(d) NAME. The name of the Company shall be T3 Therapeutics, LLC. The Company may also
conduct business at the same time under one or more fictitious names if the Board determines that
such is in the best interests of the Company. The Board may change the name of the Company, from
time to time, in accordance with applicable law with the Consent of the Members. Tradenames will be
filed and published when and if the Board determines it necessary. Any such tradenames shall be
renewed as required by applicable law.
(e) PRINCIPAL PLACE OF BUSINESS; OTHER PLACES OF BUSINESS. The principal place of business
of the Company shall be at such place within or outside the State of Delaware as the Board may from
time to time designate. By the approval of the Board, the Company may maintain offices and places of
business at such other place or places within or outside the State of Delaware, as and when required
by its business and in furtherance of the general character of its business described herein and in
the Certificate, and may appoint agents for service of process in all jurisdictions in which the
Company shall conduct business. The Company shall file such certificates and documents as are
necessary under the laws of any jurisdictions in which the Company shall conduct business.
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(f) DESIGNATED AGENT FOR SERVICE OF PROCESS. The Company shall continuously maintain a
registered office and a designated and duly qualified agent for service of process on the Company in
the State of Delaware.
(g) TERM. The Company shall commence on the date that the Certificate is filed with the
Office of the Delaware Secretary of State and shall continue until terminated pursuant to this
Agreement.
1.02 POWERS.
Subject to all other provisions of this Agreement and in furtherance of the conduct of the
business described above and in the Certificate, the Company is hereby authorized to undertake those
actions set forth below.
(a) CONTRACTS. The Company may enter into, execute, modify, amend, supplement, acknowledge,
deliver, perform, and carry out contracts of any kind, including agreements of limited liability
companies, whether as a member or manager, contracts with Affiliated Persons, including guarantees
and joint venture, limited and general partnership agreements and contracts establishing business
arrangements or organizations, necessary to, in connection with, or incidental to the accomplishment
of the permitted business of the Company, and to secure the same by mortgages, pledges or other
liens.
(b) INDEBTEDNESS. The Company may borrow money and issue evidences of indebtedness in
furtherance of the permitted business of the Company and to secure the same by mortgages, pledges,
or other liens.
(c) PAYMENT OF EXPENSES. The Company may, to the extent that funds of the Company are
available, pay all expenses, debts and obligations of the Company.
(d) GENERAL. The Company may exercise all the powers and privileges granted by the Act or
any other law or this Agreement, together with any powers incidental thereto, so far as such powers
are necessary or convenient to the conduct, promotion, or attainment of the permitted business,
trade, purposes, or activities of the Company.
(e) OMNIBUS. The Company may take any other action not prohibited under the Act, this
Agreement or other applicable law and in furtherance of the business purpose of the Company.
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ARTICLE II
MANAGEMENT
2.01 MANAGERS.
(a) NUMBER OF MANAGERS. The initial number of Managers shall be two (2) and shall be the
Persons named in SCHEDULE I hereto. The number of Managers may be increased or decreased in
accordance with the terms and conditions set forth in this Section 2.01; PROVIDED, that the number
of Managers shall not be more than six (6) or less than two (2).
(b) CLASS A MANAGERS. The Class A Members holding a majority of the Class A Units shall
have the right at any time and from time to time to designate and elect up to five (5) Managers (the
"CLASS A MANAGERS"); PROVIDED, that the Class A Members shall not have the right to designate more
than two (2) Class A Managers until after the sooner to occur of the following: (i) a Control
Release Event; or (ii) the written consent of the Class B Members holding a majority of the Class B
Units; PROVIDED, FURTHER, that if one of the conditions set forth immediately above has been
satisfied and the Class A Members desire to designate more than two (2) Class A Managers such
additional Managers shall have significant experience in the Company's industry or related
industries. Such designations and elections shall be effective upon the delivery of a writing
executed by the Class A Members holding a majority of the Class A Units setting forth the names and
brief biographies of such designees to the Board and to the Class B Members.
(c) CLASS B MANAGER. The Class B Members holding a majority of the Class B Units shall have
the right at any time and from time to time to designate and elect one (1) Manager (the "CLASS B
MANAGER"). Such designation and election shall be effective upon the delivery of a writing executed
by the Class B Members holding a majority of the Class B Units setting forth the name of such
designee to the Board and to the Class A Members.
(d) TERM; REMOVAL OR RESIGNATION. Each Manager shall hold office for a period of one (1)
year or until such individual is removed by the Members which designated him or her, resigns or
dies. In the event that any Manager dies, resigns or is unable or unwilling to serve as such, or is
removed from office by the Members that designated him or her, the designating Members shall
promptly elect a successor consistent with the provisions of this Section 2.01.
(e) NUMBER OF MEETINGS; NOTICE; OBSERVATION RIGHTS. The Board shall hold at least four (4)
meetings per year. At all times, the Class B Members shall be entitled to not less than two (2)
business days advance written notice of any meeting of the Board or committee thereof (and included
therewith an agenda of items to be discussed thereat), and shall be entitled to have a designated
representative present at such meeting. In addition, the Class B Members shall at all times receive
written notice of actions taken by the Board or committee thereof, and shall be entitled to any and
all documents, reports or financial information prepared for, or used by, the Board or committee
thereof which such documents, reports or financial information shall be delivered to the Class B
Members no later than simultaneously with their delivery to the Board or committee thereof, as
applicable.
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(f) REGULAR MEETINGS. Regular meetings of the Board may be held at such times and places as
shall from time to time be fixed by resolution of the Board, and no notice need be given of regular
meetings held at times and places so fixed; PROVIDED, HOWEVER, that any resolution relating to the
holding of regular meetings shall remain in force only if at any meeting of the Board at which a
resolution is adopted fixing the times or place or places for any regular meetings any Manager is
absent, no meeting shall be held pursuant to such resolution without notice to or waiver by such
absent Manager pursuant to Section 2.01(h).
(g) SPECIAL MEETINGS. Special meetings of the Board may be called by the Chairman of the
Board (if any), the President, or by any one or more Managers and shall be held at the place and on
the date and hour designated in the call thereof.
(h) NOTICES. Notices of any special meeting of the Board shall be given by the Secretary or
an Assistant Secretary to each Manager, by mailing to him or her, postage prepaid, and addressed to
him or her at his or her address as registered on the books of the corporation, or if not so
registered at his or her last known home or business address, a written notice of such meeting, at
least four days before the meeting, or by delivering such notice to him or her at least 48 hours
before the meeting or by sending to him or her at least 48 hours before the meeting, by prepaid
telegram addressed to him or her at such address or by facsimile transmission or e-mail at such
address, notice of such meeting. In the absence of both such officers, such notice may be given by
the officer or one of the Managers calling the meeting. Notice need not be given to any Manager who
has waived notice (a) in writing executed by him or her before or after the meeting and filed with
the records of the meeting, or (b) by attending the meeting except for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened.
(i) ACTIONS BY BOARD. Any action to be taken by the Board shall require the approval of a
majority of the members of Board; PROVIDED, that with respect to any matter, agreement or claim
involving the Company, on the one hand, and a Member, Manager or an Affiliated Person of a Member or
Manager, on the other hand, the Board shall act solely with the approval of those Managers who are
not Affiliated with the contracting party. In such instance the Board may take action by less than
majority consent. In addition, at any meeting of the Board any number of Managers present at any
meeting or at any adjourned meeting may adjourn such meeting; PROVIDED, that all absent Managers
receive or waive notice pursuant to Section 2.01(h) of any such adjournment that exceeds four (4)
business days.
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Notwithstanding anything contained herein to the contrary, the Company shall not, without
the prior written consent of the Class B Manager (if such Manager has been designated in accordance
with Section 2.01(c) above):
(i) effect any sale, lease, assignment, transfer or other conveyance of all or
substantially all of the Company's assets;
(ii) effect any merger or acquisition;
(iii) incur any indebtedness in excess of $100,000;
(iv) enter into any material licensing, revenue sharing, development or partnership
agreements other than (i) the North Shore Agreement, or (ii) a license and
development agreement or a market agreement, both of which are of the type
currently contemplated by the Development Plan to result in the
commercialization of the Products by a nationally known pharmaceutical
company; or
(v) engage in any single capital expenditure in excess of $50,000, or engage in
aggregate capital expenditures in excess of $100,000 in any single fiscal
year.
(j) ACTION BY WRITTEN CONSENT. Any action required or permitted to be taken at any meeting
of the Board, or of any committee thereof, may be taken without a meeting if a majority of the
members of the Board or committee, as the case may be, consent thereto in writing or electronic
transmission, and the writing or writings or electron transmission are filed with the minutes of
proceedings of the Board or committee. Such filing shall be in paper form if the minutes are
maintained in paper form and shall be in electronic form if the minutes are maintained in electronic
form
(k) TELEPHONE MEETINGS. Members of the Board, or any committee thereof, may participate in
a meeting of such Board or committee by means of conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this Section 2.01(k) shall constitute presence in person at
such meeting.
(l) PLACE OF MEETINGS. The Board may hold its meetings, and have an office or offices,
within or without the State of Delaware.
(m) COMMITTEES.
(i) The Board may designate one or more committees, each committee to consist of one or
more of the Managers. The Board may designate one or more Managers as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of the committee. Any
such committee, to the extent permitted by the resolution of the Board or in this Agreement, shall
have and may exercise all the powers and authority of the Board in the management of the business
and affairs of the Company, and may authorize the seal of the Company (if any) to be affixed to all
papers which may require it.
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(ii) Notwithstanding anything contained herein to the contrary, no committee shall have
the power or authority to approve or adopt, or recommend to the Members, any action or matter
expressly required by the Act or this Agreement to be submitted to the Members for approval.
(iii) Except as otherwise provided by statute, the Certificate, or this Agreement, the
affirmative vote of at least a majority of the members of the committee shall be the act of the
committee.
(iv) Each committee, except as otherwise provided by resolution of the Board, shall fix
the time and place of its meetings within or without the State of Delaware, shall adopt its own
rules and procedures, and shall keep a record of its acts and proceedings and report the same from
time to time to the Board.
2.02 MANAGERS AS MEMBERS.
Any Manager may, but need not, hold an Interest in the Company as a Member, and such
person's rights and interest as a Manager shall be distinct and separate from such person's rights
and Interest as a Member.
2.03 MANAGEMENT OF THE COMPANY.
The business affairs of the Company shall be managed by and under the direction of the
Board. All management and other responsibilities not specifically reserved to the Members in this
Agreement shall be vested in the Board, and the Members shall have no voting rights except as
specifically provided in this Agreement. Each Manager shall devote, and if applicable, shall cause
the Company's officers to devote, such time to the affairs of the Company as is reasonably necessary
for performance by the Manager of his or her duties; PROVIDED, such Persons shall not be required to
devote full time to such affairs. The Board shall have the right and power to manage, operate, and
control the Company and to do all things which the Board may deem necessary or desirable for the
Company or its permitted business including the appointment of officers and agents, and the granting
of authority to such officers and agents to perform certain functions, and to enter into contracts,
all as authorized and on the terms and subject to the limitations established by the Board. In the
event of a vacancy in the Board, the remaining Managers (except as otherwise provided by law) may
exercise the powers of the full Board until the vacancy is filled.
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2.04 DUTIES OF CARE AND LOYALTY OF MANAGERS.
DUTY OF CARE. The Managers do not in any way guarantee the return of the Members' Capital
Contributions or a profit for the Members from the operations of the Company. In discharging their
duties, the Managers shall have the benefit of the "business judgment rule" (as established under
Delaware corporate law) and, in addition thereto, may rely in good faith upon the records required
to be maintained under this Agreement and upon such information, opinions, reports or statements by
any of the Members, officers or their agents, or by any other Person as to matters the Managers
reasonably believe are within such other Person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Company, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities, profits or losses of
the Company or any other facts pertinent to the existence and amount of Company property from which
distributions might properly be paid.
DUTY OF LOYALTY. The Managers shall have a duty of loyalty to the Company. This duty of
loyalty owed by the Managers to the Company shall be identical to that of the duty of loyalty owed
by the members of the board of directors of a Delaware corporation to such corporation as
established under Delaware law.
2.05 CONTRACTS WITH AFFILIATED PERSONS.
The Company may enter into one or more oral or written agreements, leases, contracts or
other arrangements for the furnishing to or by the Company of goods, services or space with any
Member, Manager or Affiliated Person thereof (including as an officer pursuant to Section 2.08 or as
a non-officer employee), and may pay compensation thereunder for such goods, services or space if:
(i) The material facts as to the contracting party's relationship or interest and as to
the contract or transaction are disclosed or are known to the Board, and the Board in good faith
authorizes the contract or transaction in accordance with Section 2.01(i);
(ii) The material facts as to the contracting party's relationship or interest and as to
the contract or transaction are disclosed or are known to the Members, and the contract or
transaction is specifically approved in good faith by the written consent of a majority in interest
of those Members who are not Affiliated with the contracting party; and
(iii) The contract or transaction is fair as to the Company as of the time it is
authorized, approved or ratified by the Board and the Members.
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2.06 COMPENSATION OF MANAGERS AND MEMBERS.
No payment shall be made by the Company to any Manager or Member for such Manager or
Member's services as a Manager or Member except as expressly provided in this Agreement or as
approved by the Board with the Consent of the Members. Each Manager shall be entitled to
reimbursement from the Company for all expenses reasonably incurred by such Manager in managing and
conducting the business and affairs of the Company. The Board shall determine which expenses, if
any, are allocable to the Company in a manner that is fair and reasonable to the Managers and the
Company, and if such allocation is made in good faith it shall be conclusive in the absence of
manifest error. The foregoing shall not prohibit payments and reimbursements to any Manager or
Member who is also an officer of the Company, in such Person's capacity as an officer, to the extent
approved by the Board.
2.07 INDEMNIFICATION OF MANAGERS, OFFICERS AND OTHERS.
Each Manager (including any Manager acting within the scope of his or her authority as an
officer appointed under Section 2.08), and the officers, directors, and shareholders of any Manager
which is a corporation, shall be entitled to indemnity from the Company for any liability incurred
and/or for any act performed by them within the scope of the authority conferred on them by or
pursuant to this Agreement, and/or for any act omitted to be performed, except for their gross
negligence or willful misconduct, which indemnification shall include all reasonable expenses
incurred, including reasonable legal and other professional fees and expenses. Upon the approval of
the Board, the Company may make advancements of any such expenses. The doing of any act or failure
to do any act by a Manager, the effect of which may cause or result in loss or damage to the
Company, if done in good faith to promote the best interests of the Company, shall not subject the
Manager to any liability to the Members except for gross negligence or willful misconduct.
2.08 OFFICERS OF THE LLC.
(a) ENUMERATION. The officers of the Company shall be a President, a Secretary, a Treasurer
and such Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers as the
Board may from time to time determine and elect or appoint. The President, the Secretary, the
Treasurer and nominees to any other offices created by the Board shall be elected by the Board. Two
or more offices may be held by the same person.
(b) TERM. Upon election, each of the officers of the Company shall hold office until their
respective successors are elected and qualified or until their earlier resignation or removal.
(c) VACANCIES. Any vacancy at any time existing in any office may be filled by the Board
pursuant to subsection (a) above.
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(d) PRESIDENT. The President shall be the chief executive officer of the Company except as
the Board may otherwise provide. It shall be his duty and he shall have the power to see that all
orders and resolutions of the Board are carried into effect. He shall from time to time report to
the Board all matters within his knowledge which the interests of the Company may require to be
brought to its notice. The President shall perform such duties and have such powers additional to
the foregoing as the Board shall designate.
(e) VICE PRESIDENT. In the absence or disability of the President, his powers and duties
shall be performed by the Vice President, if elected and if only one, or, if more than one, by the
one designated for the purpose by the Board or, in the absence of such designation, the Vice
President longest serving in such capacity as of date of such absence or disability. Each Vice
President shall perform such duties and have such powers additional to the foregoing as the Board
shall designate.
(f) TREASURER. The Treasurer shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Company and shall deposit or oversee the deposit of all
monies and other valuable effects in the name and to the credit of the Company in such depositories
as shall be designated by the Board or in the absence of such designation in such depositories as he
shall from time to time deem proper. He shall disburse or oversee the disbursement of the funds of
the Company as shall be ordered by the Board, taking proper vouchers for such disbursements. He
shall promptly render to the President and to the Board such statements of his transactions and
accounts as the President and Board may from time to time require. The Treasurer shall perform such
duties and have such powers additional to the foregoing as the Board may designate.
(g) ASSISTANT TREASURER. In the absence or disability of the Treasurer, his powers and
duties shall be performed by the Assistant Treasurer, if elected and if only one, or if more than
one, by the one designated for the purpose by the Board or, in the absence of such designation, the
Assistant Treasurer longest serving as of the date of such absence or disability. Each Assistant
Treasurer shall perform such duties and have such powers additional to the foregoing as the Board
shall designate.
(h) SECRETARY. The Secretary shall issue notices of all meetings of Members, of the Board
and of committees thereof where notices of such meetings are required by law or this Agreement. He
shall record the proceedings of the meetings of the Members and of the Board and shall be
responsible for the custody thereof in a book to be kept for that purpose. He shall sign such
instruments as require his signature. In his absence at any meeting, an Assistant Secretary or the
Secretary pro tempore shall perform his or her duties thereat. He shall perform such duties and have
such powers additional to the foregoing as the Board shall designate.
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(i) ASSISTANT SECRETARY. In the absence or disability of the Secretary, his powers and
duties shall be performed by the Assistant Secretary, if elected and if only one, or, if more than
one, by the one designated for the purpose by the Board or, in the absence of such designation, the
Assistant Secretary longest serving as of the date of such absence or disability. Each Assistant
Secretary shall perform such duties and have such powers additional to the foregoing as the Board
shall designate.
(j) REMOVAL. The Board may remove any officer, either with or without cause, at any time.
(k) BOND. The Company may secure the fidelity of any or all of its officers or agents by
bond or otherwise.
(l) RESIGNATION. Any officer, agent or employee of the Company may resign at any time by
giving written notice to the Board, to the President or to the Secretary of the Company. Any such
resignation shall take effect at the time specified therein, or, if the time be not specified, upon
receipt thereof; and unless otherwise specified therein, the acceptance of such resignation shall
not be necessary to make it effective.
ARTICLE III
MEMBERS AND CAPITAL CONTRIBUTIONS
3.01 CAPITAL ACCOUNTS.
A separate Capital Account shall be maintained for each Member, including any Member who
shall hereafter acquire an Interest in the Company. Capital Accounts shall be maintained in
accordance with the provisions of Section 704 of the Code and the Regulations thereunder, except as
provided herein.
3.02 INITIAL MEMBERS AND INITIAL CAPITAL CONTRIBUTIONS.
(a) INITIAL CONTRIBUTION BY DEVELOPMENT CORPORATION. The execution of this Agreement by the
Development Corporation shall be deemed to constitute the full complete and irrevocable contribution
by the Development Corporation (and in turn by the Stockholders thereof) of all its right, title and
interest in and to the Products, the Product Know How and the Product Rights, and thereby shall
constitute the making of the Capital Contribution required by the Class A Member for the issuance of
the Class A Interest acquired herein and described on SCHEDULE I hereto.
(b) INITIAL CONTRIBUTION BY ST. ▇▇▇▇▇▇▇▇. On the date of this Agreement St. ▇▇▇▇▇▇▇▇ has
contributed to the capital of the Company, the amount of cash or property having an agreed value,
set forth opposite its name on SCHEDULE 1 hereto in consideration for the issuance to St. ▇▇▇▇▇▇▇▇
of the Class B Interest described on SCHEDULE I hereto.
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(c) CLASS B OPTION. There is hereby authorized by the execution of this Agreement by the
parties hereto, an option (the "CLASS B OPTION") to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III (the "Option Holder") to
purchase a Class B Interest that equals (at the time of issuance) an aggregate of 2.5% of the fully
diluted Interest of the Company, which such option shall be in substantially in the form of EXHIBIT
A attached hereto (the "OPTION AGREEMENT'). Upon the exercise of the Class B Option by the Option
Holder in accordance with the Option Agreement, the Option Holder shall be admitted to the Company
as a Class B Member.
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3.03 ADDITIONAL MEMBERS.
Additional Persons may be admitted to the Company as Members, and additional Interests may
be created and assigned and/or issued to those additional Persons and/or to existing Members, all on
the terms and conditions approved by the Board at the time of admission, subject to the Company's
receipt of such Capital Contribution (if any) as may be agreed upon between the Board and such
Person. Notwithstanding anything contained in this Agreement to the contrary, the terms of admission
or issuance may not create any class or series of Interests having rights, powers or duties senior
to those of any existing Interests unless the Board has obtained the majority written consent of the
Members holding the Interests in such junior class(es). The Board shall reflect the creation of
additional Interests by amendment of SCHEDULE I hereto, and shall reflect the creation of any new
class or series in an amendment to this Agreement indicating the different rights, powers and duties
possessed by the several classes or series of Interests, either of which amendments need be executed
only by the Board.
3.04 NO WITHDRAWAL OF OR INTEREST ON CAPITAL.
Except as otherwise set forth herein no Member shall have the right to resign and receive
any distribution from the Company as a result of resignation, and no Member shall have the right to
receive the return of all or any part of his, her, or its Capital Contributions or Capital Account,
or any other distribution, except as provided in Section 3.08, 4.01, 4.02 and 8.03. No Member shall
have any right to demand and receive property of the Company in exchange for all or any portion of
his, her, or its Capital Contributions or Capital Account, except as provided in Section 8.03 and
4.02 upon dissolution and liquidation of the Company, or as set forth in SCHEDULE I hereto. Other
than as set forth in Section 3.08 and in the Additional Terms and Conditions, no interest or prior
or preferred return shall accrue or be paid on any Capital Contribution or Capital Account except
pursuant to Section 4.01 and 4.02, as the same may be hereafter amended.
3.05 LIABILITY OF MEMBERS.
No Member or Manager shall be entitled, obligated or required to make any Capital
Contribution in addition to his, her or its Capital Contribution made under Section 3.02 or to be
made under Section 3.06(d), or any loan, to the Company. No Member, in his, her, or its capacity as
a Member, shall have any liability to restore any negative balance in his, her, or its Capital
Account or to contribute to, or in respect of, the liabilities or the obligations of the Company, or
to restore any amounts distributed from the Company, except as may be required under the Act or
other applicable law. In no event shall any Member, in his, her, or its capacity as a Member, be
personally liable for any liabilities or obligations of the Company.
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3.06 ADDITIONAL CAPITAL REQUIREMENTS.
(a) NEW INTERESTS. In the event that the Company requires additional funds to carry out its
purposes, to conduct its business, or to meet its obligations, the Company may create and issue and
/or assign additional Interests to such investors as the Board may determine, or may borrow funds
from such lender(s) as the Board may determine, in each case including any one or more Managers or
existing Members, all on such terms and conditions as are approved by the Board.
(b) LOANS. No loan made to the Company by any Member or Manager shall constitute a Capital
Contribution to the Company for any purpose.
(c) DEFAULTS. No Member or Manager shall have any obligation to give notice of an existing
or potential default of any obligation of the Company to any of the Members or Managers, nor shall
any Member or Manager be obligated to make any Capital Contributions or loans to the Company, or
otherwise supply or make available any funds to the Company, even if the failure to do so would
result in a default of any of the Company's obligations or the loss or termination of all or any
part of the Company's assets or business.
(d) FOLLOW-ON CAPITAL CONTRIBUTION. The Class B Member shall be required to make additional
Capital Contributions to the Company equal to $750,000 (the "FOLLOW-ON CAPITAL CONTRIBUTION");
PROVIDED, that such Follow-on Capital Contribution shall be required only if prior to the expiration
of the twenty-four (24) month period following the date of this Agreement, the Company has secured
an "IND" from the U.S. Department of Health and Human Services Food and Drug Administration, which
"IND" shall be consistent with the description of the IND set forth in the Development Plan. Such
Follow-on Capital Contribution shall be made within ten (10) days of the Class B Member's receipt of
a written "Contribution Notice" given to the Class B Member by the Company attesting to the
following: (i) the issuance of the IND described above; (ii) that all development or partnering
agreements in effect, or contemplated, as of the date thereof, are in full force and effect, and
remain adequate for the task anticipated; and (iii) a then current Development Status Report. The
Company and the Class B Member may agree, in their respective sole discretion, to modify or waive
any requirements set forth above.
In the event that a Class B Member transfers all or a portion of its Class B Units, the
transferee(s) thereof shall, if required by the transferor, pay that portion of the Follow-on
Capital Contribution attributable to the transferred Class B Units on a pro rata basis.
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3.07 THIRD PARTY LIABILITIES.
The provisions of this Article III are not intended to be for the benefit of any creditor
or other Person (other than a Member in his, her, or its capacity as a Member) to whom any debts,
liabilities, or obligations are owed by (or who otherwise has any claim against) the Company or any
of the Members. Moreover, notwithstanding anything contained in this Agreement, including
specifically but without limitation this Article III, no such creditor or other Person shall obtain
any rights under this Agreement or shall, by reason of this Agreement, make any claim in respect of
any debt, liability, or obligation (or otherwise) against the Company or any Member.
3.08 CLASS B REDEMPTION RIGHTS AND REDEMPTION ON CERTAIN EVENTS.
(a) JANUARY 2, 2007. The Class B Member shall have the right on written notice to require
the Company to redeem all or any portion of its Class B Units on or after January 2, 2007, at a
redemption price equal to the Class B Member's Capital Contribution plus a cumulative preferred
return of six percent (6%) per annum (the "CLASS B REDEMPTION PRICE"). Such Class B Redemption Price
shall be payable in immediately available funds within one hundred twenty (120) days of the delivery
of such Class B Member notice.
(b) FAILURE TO MATERIALLY CONFORM WITH DEVELOPMENT PLAN. If at any time the Product
development shall cease to proceed materially in conformance with the Development Plan for a period
of one hundred and eight (180) days after the IND is obtained or the IND is not obtained by June 30,
2004, then in each case, the Class B Member shall be entitled to redeem all or any portion of the
Class B Units upon written notice to the Company for an amount equal to its Capital Contribution,
and if the Company does not have sufficient liquid assets to pay such redemption price, then it
shall provide a demand note in substantially the form of EXHIBIT B attached hereto (the "Demand
Note") for the unpaid portion thereof. The Demand Note shall be due and payable within one hundred
twenty (120) days of demand thereon and shall be secured by a lien on all of the Company's assets.
The Company and the Class B Member may agree, in their respective sole discretion, to modify or
waive any requirements set forth above.
ARTICLE IV
DISTRIBUTIONS
4.01 DISTRIBUTION OF COMPANY FUNDS.
Except as provided in Section 4.02, 4.04 and the Additional Terms and Conditions, all
Company funds, which are determined by the Board to be available for distribution shall be
distributed to the Members in proportion to their respective Percentage Interests.
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4.02 DISTRIBUTION UPON DISSOLUTION.
Proceeds from a Terminating Capital Transaction and amounts available upon dissolution, and
after payment of, or adequate provision for, the debts and obligations of the Company, and
liquidation of any remaining assets of the Company, shall be distributed and applied in the
following priority:
(i) First, to fund reserves for liabilities not then due and owing and for contingent
liabilities to the extent deemed reasonable by the Board; PROVIDED, that, upon the expiration of
such period of time as the Board shall deem advisable, the balance of such reserves remaining after
payment of such contingencies shall be distributed in the manner hereinafter set forth in this
Section 4.02; and
(ii) Second, to the Members, an amount sufficient to reduce the Members' Capital
Accounts to zero, in proportion to the positive balances in such Capital Accounts (after reflecting
in such Capital Accounts all adjustments thereto necessitated by (A) all other Company transactions
(including distributions and allocations of Profits and Losses and items of income, gain, deduction,
and loss) and (B) such Terminating Capital Transaction).
Notwithstanding anything contained in this Agreement to the contrary, in the event of a
Terminating Capital Transaction, as a condition to the consummation of such transaction, the Class B
Member first shall be paid the higher of (a) the Class B Redemption Price immediately after the
distribution or application of amounts to fund reserves for certain liabilities as provided for by
Subsection (i) above, or (b) the Class B Members' proportionate share of the net value of the
Company's assets. If the Class B Member is paid the Class B Redemption Price, then the Class B
Member's Capital Account shall be reduced by an amount equal to the Class B Redemption Price before
the Class B Member joins in any distributions provided for by subsection (ii) above.
4.03 DISTRIBUTION OF ASSETS IN KIND.
No Member shall have the right to require any distribution of any assets of the Company in
kind. If any assets of the Company are distributed in kind, such assets shall be distributed on the
basis of their fair market value as determined by the Board. Any Member entitled to any interest in
such assets shall, unless otherwise determined by the Board, receive separate assets of the Company
and not an interest as tenant-in-common, with other Members so entitled, in each asset being
distributed.
4.04 DISTRIBUTIONS TO COVER MEMBERS' TAX LIABILITY.
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Unless the Board shall determine that the Company does not have sufficient liquid assets to
make the distribution contemplated by this Section 4.04 consistent with prudent business practice,
the Board shall, at a minimum, distribute to Members, no less often than quarterly, amounts intended
to cover the potential federal, state, or local tax obligations of such Members on account of the
cumulative allocation to them of taxable income in excess of tax losses pursuant to this Agreement.
For purposes of the foregoing, such federal, state, and local tax obligations of each Member shall
be assumed to equal the highest effective combined federal and state income tax rate applicable to
any Member multiplied by each Member's Percentage Interest multiplied by the cumulative allocation
to all Members of taxable income in excess of tax losses determined as described in the definition
of Profits and Losses without the adjustments listed therein, with the result reduced by the
cumulative amount previously distributed pursuant to this Section 4.04. Partial distributions made
to the Members pursuant to this Section 4.04 shall be made in proportion to their respective amounts
calculated under the previous sentence. For purposes of applying Section 4.04 to subsequent
distributions to the Members, distributions made pursuant to this Section 4.04 shall be disregarded
and shall not be deemed to have been made pursuant to Section 4.01.
ARTICLE V
ALLOCATION OF PROFITS AND LOSSES
5.01 ALLOCATION OF PROFITS AND LOSSES.
(a) After giving effect to the allocations set forth in Section 9.01 and 9.02, and subject
to the other provisions of Article IX, Profits shall be allocated in the following order and
priority:
(i) First, in proportion to any deficit Capital Account balances, until such deficits
are eliminated; and
(ii) Second, to each Member until the balance in his, her, or its Capital Account is
equal to the amount of such Member's Adjusted Capital Contributions; and
(iii) Third, any remaining Profits shall be allocated among the Members in proportion to
their respective Percentage Interests.
(b) After giving effect to the allocations set forth in Section 9.01 and 9.02, and subject
to the other provisions of Article IX, Losses shall be allocated in the following order and
priority:
(i) First, to each Member to reduce the balance in his, her, or its Capital Account to
an amount equal to such Member's Adjusted Capital Contributions; and
(ii) Second, to each Member to reduce the balance in his, her, or its Capital Account to
zero; and
(iii) Third, any remaining Losses shall be allocated among the Members in proportion to
their respective Percentage Interests.
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ARTICLE VI
FISCAL MATTERS
6.01 BOOKS AND RECORDS.
The Board shall keep or cause to be kept complete and accurate books and records of the
Company on the income tax method of reporting and otherwise in accordance with generally accepted
accounting principles consistently applied. Such documents and information as are required to be
furnished to the Members under the Act shall be made available at an office of the Company for
examination and copying by any Member or Manager, or his, her, or its duly authorized
representative, at his reasonable request and at his expense during ordinary business hours.
6.02 BANK ACCOUNTS.
Bank accounts and/or other accounts of the Company shall be maintained in such banking
and/or other financial institution(s) as shall be selected by the Board, and withdrawals shall be
made and other activity conducted on such signature or signatures as shall be determined by the
Board.
6.03 FISCAL YEAR.
The fiscal year of the Company shall end on December 31 of each year.
6.04 TAX MATTERS PARTNER.
The Tax Matters Partner shall be the Person so named in SCHEDULE I hereto. At any time and
from time to time if there is no Tax Matters Partner, a Tax Matters Partner may be designated by the
Approval of the Board. The Tax Matters Partner is hereby authorized to, and shall perform all duties
of, a "tax matters partner" under the Code and shall serve as Tax Matters Partner until his, her, or
its resignation or until the designation of his, her, or its successor, whichever occurs sooner.
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ARTICLE VII
TRANSFERS AND COMPANY ISSUANCES
7.01 RESTRICTIONS ON TRANSFER.
(a) No Member may Transfer all or any part of his, her, or its Units, or otherwise withdraw
from the Company, except with the prior written approval of the Board (excluding a Manager who is
the proposed transferor or an Affiliate of the proposed transferor, unless such Manager is the sole
Manager of the Company), which may be withheld for any reason or for no reason. No transferee of a
Transfer may be admitted as a Member except with the prior written approval of the Board and the
Consent of the Members, which may be withheld for any reason or for no reason, and upon the
satisfaction of the other requirements of this Agreement.
Notwithstanding the foregoing to the contrary (i) the transfer of Class A Units by the
Development Corporation to the Option Holder pursuant to a Purchase and Sale Agreement in
substantially the form of EXHIBIT C attached hereto shall be expressly permitted hereby and upon
such transfer the Option Holder shall be admitted to the Company as a Class A Member, subject only
to the other provisions set forth in this Section 7.01 and (ii) the transfer of Class B Units by St.
▇▇▇▇▇▇▇▇ to any of its Affiliates shall be expressly permitted hereby and upon such transfer any
such Affiliate shall be admitted to the Company as a Class B Member, subject to the other provisions
set forth in Section 7.01.
(b) No Person who becomes the holder by operation of law of all or any portion of the Units
may be admitted as a Member except with the prior written approval of the Board and the Consent of
the Members, which may be withheld for any reason or for no reason, and upon satisfaction of the
other requirements of this Agreement.
(c) Every Transfer of a Unit permitted by this Article VII shall nevertheless be subject to
the following:
(i) No Transfer of any Units may be made if such Transfer would cause or result in a
breach of any agreement binding upon the Company or of then applicable rules and regulations of any
governmental authority having jurisdiction over such Transfer. The Board may require as a condition
of any Transfer that the transferor assume all costs incurred by the Company in connection therewith
and furnish an opinion of counsel, satisfactory to the Company both as to counsel and opinion, that
the proposed Transfer complies with applicable law, including federal and state securities laws, and
does not cause the Company to be an investment company as such term is defined in the Investment
Company Act of 1940, as amended.
(ii) Notwithstanding anything contained herein to the contrary, no Unit shall be
transferred if, by reason of such Transfer, the classification of the Company as an Company for
federal income tax purposes would be adversely affected or jeopardized, or if such Transfer would
have any other substantial adverse effect for federal income tax purposes.
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(iii) In the event of any Transfer, there shall be filed with the Company a duly
executed and acknowledged counterpart of the instrument effecting such Transfer. The transferee, if
any, shall execute such additional instruments as shall be reasonably required by the Board. If and
for so long as such instruments are not so executed and filed, the Company need not recognize any
such Transfer for any purpose, and the transferee shall be entitled only to the rights which are
required under the Act to be afforded to a transferee who does not become a Member.
(iv) Upon the admission or withdrawal of a Member, this Agreement (including without
limitation SCHEDULE I hereto) and/or the Certificate shall be amended appropriately by the Board to
reflect the then existing names and addresses of the Members and their respective Percentage
Interests and Units.
(d) A transferor of a Unit shall, if the transferee is a Member hereunder or if the
transferee becomes a Member pursuant to the provisions of this Agreement, be relieved of liability
under this Agreement with respect to the transferred Unit arising or accruing on or after the
effective date of the Transfer.
(e) Any Person who acquires in any manner whatsoever a Unit, whether or not such Person has
accepted and assumed in writing the terms and provisions of this Agreement or been admitted into the
Company as a Member as provided in this Section 7.01, shall be deemed, by acceptance of the
acquisition thereof, to have agreed to be subject to and bound by all of the obligations of this
Agreement with respect to such Unit and shall be subject to the provisions of this Agreement with
respect to any subsequent Transfer of such Unit.
(f) Any Transfer in contravention of any of the provisions of this Agreement shall be null
and void and ineffective to transfer any interest in the Company, and shall not bind, or be
recognized by, or be recorded on the books of, the Company, and any transferee or assignee in such
transaction shall not be or be treated as or deemed to be a Member for any purpose. In the event any
Member shall at any time Transfer a Unit in contravention of any of the provisions of this
Agreement, then each other Member shall, in addition to all rights and remedies at law and equity,
be entitled to a decree or order restraining and enjoining such transaction, and the offending
Member shall not plead in defense thereto that there would be an adequate remedy at law, it being
expressly hereby acknowledged and agreed that damages at law would be an inadequate remedy for a
breach or threatened breach of the violation of the provisions concerning such transactions set
forth in this Agreement.
7.02 RIGHT OF PARTICIPATION IN COMPANY SALES.
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(a) RIGHT OF PARTICIPATION ON COMPANY ISSUANCES. The Company shall, prior to any proposed
issuance by the Company of any of securities for cash (other than debt securities with no equity
feature), first offer to each Class B Member by written notice the right, for a period of thirty
(30) days, to purchase for cash at an amount equal to the price or other consideration for which
such securities are to be issued, all such securities. Each purchasing Class B Member shall be
entitled to purchase its pro rata share of such offered securities based upon the Percentage
Interest of such purchasing Class B Member in relation to the aggregate Percentage Interests held by
all purchasing Class B Members unless the purchasing Class B Members agree to a different
allocation.
(b) EXCEPTIONS TO RIGHT OF PARTICIPATION. The participation rights of each of the Class B
Members pursuant to this Section 7.02 shall not apply to securities issued or issuable: (a) as an
equity dividend or upon any subdivision of Units; PROVIDED, that the securities issued pursuant to
such dividend or subdivision are limited to additional Units, (b) pursuant to subscriptions,
warrants, options, convertible securities, or other rights which are outstanding or the date of this
Agreement, (c) pursuant to a public offering, (d) pursuant to the grant or exercise of options or
warrants to purchase Units granted in the future to directors, officers, employees or consultants of
the Company and approved after the date of this Agreement by the Board, (e) in connection with any
strategic partner alliance or joint venture where the parties to such venture are not financial
investors, or (f) in connection with the acquisition by the Company of a business or other entity or
operating assets of a business or other entity where the Company is the surviving entity and is not
the target of such acquisition.
(c) MECHANICS OF RIGHT OF PARTICIPATION. The Company's written notice to the Class B
Members shall describe the securities proposed to be issued by the Company and specify the number,
price and payment terms. Each of the Class B Members may accept the Company's offer as to the full
number of securities offered to it or any lesser number, by written notice thereof given by it to
the Company prior to the expiration of the aforesaid thirty (30) day period, in which event the
Company shall sell and such party shall buy, upon the terms specified, the number of securities
agreed to be purchased by such party at such time and commensurate with the sale by the Company of
all of the remainder of such securities and as hereinafter provided. The Company shall be free at
any time prior to one hundred and twenty (120) days after the date of its notice of offer to each of
the Class B Members, to offer and sell to any third party or parties the remainder of such
securities proposed to be issued by the Company (including but not limited to the securities not
agreed by the Class B Members to be purchased by them), at a price and on payment terms no less
favorable to the Company than those specified in such notice of offer to the Class B Members.
However, if such third party sale or sales are not consummated within such 120-day period, the
Company shall not sell such securities as shall not have been purchased within such period without
again complying with this Section 7.02.
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(d) EXPIRATION OF PARTICIPATION RIGHTS. The participation rights set forth in this Section
7.02 shall expire on the two (2) year anniversary date of this Agreement; PROVIDED, that if the
Company commences but does not consummate an offering prior to the above referenced expiration date
the expiration date shall be extended until such offering closes.
ARTICLE VIII
DISSOLUTION AND TERMINATION
8.01 LIMITATIONS.
The Company may be dissolved, liquidated, and terminated only pursuant to the provisions of
this Article VIII, and the parties hereto do hereby irrevocably waive any and all other rights they
may have to a dissolution of the Company or a sale or partition of any or all of the Company assets.
8.02 EVENTS CAUSING DISSOLUTION.
Notwithstanding the Act, the Company shall be dissolved and its affairs wound up only upon
the occurrence of any of the following events:
(a) A Terminating Capital Transaction; PROVIDED, that no Terminating Capital Transaction
may occur without the prior written approval of the Board, the Consent of the Members and the
satisfaction of the conditions set forth in Section 4.02;
(b) The election to dissolve the Company made in writing by the approval of the Board with
the Consent of the Members; or
(c) Any consolidation or merger of the Company with or into any entity in which the Company
is not the resulting or surviving entity; PROVIDED, that no such consolidation or merger may occur
without the prior written approval of the Board and the Consent of the Members; or
(d) Any dissolution of the Company other than as provided in this Paragraph 8.02 shall be a
dissolution in contravention of this Agreement.
8.03 PROCEDURES ON DISSOLUTION.
Upon dissolution of the Company, the Board or if none, a liquidator elected by the Consent
of the Members, shall liquidate the assets of the Company, apply and distribute the proceeds thereof
under Section 4.02 of this Agreement, and cause the cancellation of the Certificate. The Company
shall not terminate until the Certificate shall be canceled.
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ARTICLE IX
TAX ALLOCATION PROVISIONS
9.01 REQUIRED REGULATORY ALLOCATIONS.
(a) LIMITATION ON AND REALLOCATION OF LOSSES. At no time shall any allocations of Losses,
or any item of loss or deduction, be made to a Member if and to the extent such allocation would
cause such Member to have, or would increase, any Adjusted Capital Account Deficit of such Member at
the end of any fiscal year. To the extent any Losses or items are not allocated to one or more
Members pursuant to the preceding sentence, such Losses shall be allocated to the Members to which
such losses or items may be allocated without violation of this Section 9.01(a).
(b) MINIMUM GAIN CHARGE-BACK. If there is a net decrease in the Minimum Gain of the Company
during any fiscal year, then items of income or gain of the Company for such fiscal year (and, if
necessary, subsequent fiscal years) shall be allocated to each Member in an amount equal to such
Member's share of the net decrease in the Minimum Gain, determined in accordance with Regulations
Section 1.704-2(d)(1). A Member's share of the net decrease in the Minimum Gain of the Company shall
be determined in accordance with Regulations Section 1.704-2(g). The items of income and gain to be
so allocated shall be determined in accordance with Regulations Section 1.704-2(f)(6) and
1.704-2(j)(2).
(c) PARTNER MINIMUM GAIN CHARGE-BACK. Notwithstanding any contrary provisions of this
Article IX, other than Section 9.01(b) above, if there is a net decrease in Partner Minimum Gain
attributable to Partner Nonrecourse Debt during any fiscal year, then each Member who has a share of
such Partner Minimum Gain, determined in accordance with Regulations Section 1.704-2(i), shall be
allocated items of income and gain of the Company, determined in accordance with Regulations Section
1.704-2(j)(2)(ii), for such fiscal year (and, if necessary, subsequent fiscal years) in an amount
equal to each such Member's share of the net decrease in such Partner Minimum Gain, determined in
accordance with Regulations Section 1.704-(2)(i).
(d) QUALIFIED INCOME OFFSET. If any Member unexpectedly receives an item described in
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of income and gain shall be
allocated to each such Member in an amount and manner sufficient to eliminate, as quickly as
possible and to the extent required by Regulations Section 1.704-1(b)(2)(ii)(d), the Adjusted
Capital Account Deficit of such Member; PROVIDED, that an allocation pursuant to this Section
9.01(d) shall be made if and only to the extent that such Member would have an Adjusted Capital
Account Deficit after all other allocations provided for in this Article IX have been tentatively
made as if this Section 9.01(d) were not in the Agreement.
(e) GROSS INCOME ALLOCATION. In the event any Member has a Capital Account deficit at the
end of any Company fiscal year which is in excess of the sum of the items to be credited to a
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Member's Capital Account under clause (a) of the definition of Adjusted Capital Account Deficit,
then each such Member shall be allocated items of income and gain in the amount of such excess as
quickly as possible; PROVIDED, that an allocation pursuant to this Section 9.01(e) shall be made if,
and only to the extent that, such Member would have a Capital Account deficit in excess of such sum
after all other allocations provided for in this Article IX have been tentatively made as if this
Section 9.01(e) were not in this Agreement. As among Members having such excess, if there are not
sufficient items of income and gain to eliminate all such excesses, such allocations shall be made
in proportion to the amount of any such excess.
(f) NONRECOURSE DEDUCTIONS. Nonrecourse Deductions for any fiscal year or other period (not
including any Partner Nonrecourse Deductions allocated pursuant to Section 9.01(g)) shall be
allocated among the Members in proportion to their respective Percentage Interests. Solely for
purposes of determining each Member's proportionate share of the "excess nonrecourse liabilities" of
the Company, within the meaning of Regulations Section 1.752-3(a)(3), each Member's interest in
Company profits shall be equal to his, her, or its Percentage Interest. The items of losses,
deductions, and Code Section 705(a)(2)(b) expenditures to be so allocated shall be determined in
accordance with Regulations Section 1.704-2(j)(1)(ii).
(g) PARTNER NONRECOURSE DEDUCTIONS. Any Partner Nonrecourse Deductions for any fiscal year
or other period shall be allocated to the Member who bears the economic risk of loss with respect to
the nonrecourse liability (as determined and defined under Regulations Section 1.704-2(b)(4)) to
which such Partner Nonrecourse Deductions are attributable, in accordance with Regulations Section
1.704-2(i)(1). The items of losses, deductions, and Code Section 705(a)(2)(b) expenditures to be so
allocated shall be determined in accordance with Regulations Section 1.704-2(j)(1)(ii).
(h) BASIS ADJUSTMENT. To the extent an adjustment to the adjusted tax basis of any Company
asset pursuant to either of Code Section 734(b) or 743(b) is required pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts, the amount of
such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or
loss shall be allocated to the Members in a manner consistent with the manner in which their Capital
Accounts are required to be adjusted pursuant to such Section of the Regulations.
9.02 CURATIVE ALLOCATIONS.
The allocations set forth in Section 9.01 are intended to comply with certain requirements
of Regulations Section 1.704-1(b) and 1.704-2 and shall be interpreted consistently therewith. Such
allocations may not be consistent with the manner in which the Members intend to divide Company
distributions and to make Profit and Loss allocations. Accordingly, by Approval of the Board, other
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allocations of Profits, Losses, and items thereof shall be made among the Members so as to prevent
the allocations in Section 9.01 from distorting the manner in which Company distributions will be
made among the Members pursuant to Section 5.01 hereof. In general, the Members anticipate that this
will be accomplished by specially allocating other Profits, Losses, and items of income, gain, loss,
and deduction among the Members so that the net amount of allocations under Section 9.01, and
allocations under this Section 9.02, to each such Member is zero. However, the Board shall have
discretion to accomplish this result in any reasonable manner.
9.03 TAX ALLOCATIONS AND BOOK ALLOCATIONS.
Except as otherwise provided in this Section 9.03, for federal income tax purposes, each
item of income, gain, loss, and deduction shall, to the extent appropriate, be allocated among the
Members in the same manner as its correlative item of "book" income, gain, loss, or deduction has
been allocated pursuant to the other provisions of this Agreement.
In accordance with Code Section 704(c) and the Regulations thereunder, depreciation,
amortization, gain, and loss, as determined for tax purposes, with respect to any property whose
Book Value differs from its adjusted basis for federal income tax purposes shall, for tax purposes,
be allocated among the Members so as to take account of any variation between the adjusted basis of
such property to the Company for federal income tax purposes and its Book Value, such allocation to
be made by Approval of the Board in any manner which is permissible under said Code Section 704(c)
and the Regulations thereunder, and the Regulations under Code Section 704(b).
In the event the Book Value of any property of the Company is subsequently adjusted,
subsequent allocations of income, gain, loss, and deduction with respect to any such property shall
take into account any variation between the adjusted basis of such property for federal income tax
purposes and its Book Value in the manner provided under Section 704(c) of the Code and the
Regulations thereunder.
Allocations pursuant to this Section 9.03 are solely for purposes of federal, state, and
local taxes and shall not affect, or in any way be taken into account in computing, any Member's
Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision
of this Agreement.
9.04 GENERAL ALLOCATION AND DISTRIBUTION RULES.
(a) INTERIM ALLOCATIONS. For purposes of determining the Profits, Losses, or any other
items allocable to any period, Profits, Losses, and any such other items shall be determined on a
daily, monthly, or other basis, as determined by the Board using any permissible method under Code
Section 706 and the Regulations thereunder. Except as otherwise provided in this Agreement, all
items of income, gain, loss, and deduction shall be allocable among the Members in the same
proportions as the Profits or Losses are allocated for the fiscal year in which such item is
included.
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(b) NEW MEMBERS. Upon the admission of a new Member or the Transfer of an Interest, the new
and old Members or the transferor and transferee shall be allocated shares of Profits and Losses and
other allocations and shall receive distributions, if any, based on the portion of the fiscal year
that the new or transferred Interest was held by the new and old Members, or the transferor and
transferee, respectively. For the purpose of allocating Profits and Losses and other allocations and
distributions, (i) such admission or Transfer shall be deemed to have occurred on the first day of
the month in which it occurs, or if such date shall not be permitted for allocation purposes under
the Code or the Regulations, on the nearest date otherwise permitted under the Code or the
Regulations, and (ii) if required by the Code or the Regulations, the Company shall close its books
on an interim basis on the last day of the previous calendar month.
9.05 TAX WITHHOLDING.
If the Company incurs a withholding tax obligation with respect to the share of income
allocated to any Member, (a) any amount which is (i) actually withheld from a distribution that
would otherwise have been made to such Member and (ii) paid over in satisfaction of such withholding
tax obligation shall be treated for all purposes under this Agreement as if such amount had been
distributed to such Member, and (b) any amount which is so paid over by the Company, but which
exceeds the amount, if any, actually withheld from a distribution which would otherwise have been
made to such Member, shall be treated as an interest-free advance to such Member. Amounts treated as
advanced to any Member pursuant to this Section 9.05 shall be repaid by such Member to the Company
within 30 days after the Board gives notice to such Member making demand therefor. Any amounts so
advanced and not timely repaid shall bear interest, commencing on the expiration of said 30 day
period, compounded monthly on unpaid balances, at an annual rate equal to the Applicable Federal
Rate as of such expiration date. The Company shall collect any unpaid amounts from any Company
distributions that would otherwise be made to such Member.
ARTICLE X
GENERAL PROVISIONS
10.01 NOTICES.
Any and all notices under this Agreement shall be effective (a) upon delivery, if delivered
in hand, (b) on the third business day after being sent by registered or certified mail, return
receipt requested, postage prepaid, or (c) on the first business day after being sent by express
mail, telecopy, or commercial overnight delivery service providing a receipt for delivery. All such
notices in order to be effective shall be in writing and addressed, if to the Company, at its
registered office under the Act and, if to a Member, at the last address of record on the Company
books. Copies of such notices shall also be sent to the last address for the recipient which is
known to the sender, if different from the address so specified.
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10.02 WORD MEANINGS.
Words such as "herein," "hereinafter," "hereof," and "hereunder" refer to this Agreement as
a whole and not merely to a subdivision in which such words appear unless the context otherwise
requires. The singular shall include the plural, and the masculine gender shall include the feminine
and neuter, and vice versa, unless the context otherwise requires.
10.03 BINDING PROVISIONS.
Subject to the restrictions on transfer set forth herein, the covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the parties hereto, their
heirs, Legal Representatives, and permitted successors and assigns, and any other Person who is
issued or who is otherwise acquires any Interest at any time.
10.04 APPLICABLE LAW.
This Agreement, including its existence, validity, construction, and operating effect, and
the rights of each of the parties hereto, shall be governed by and construed in accordance with the
laws of the State of Delaware without regard to otherwise governing principles of conflicts of law.
10.05 COUNTERPARTS.
This Agreement may be executed in several counterparts and, as so executed, shall
constitute one agreement binding on all parties hereto, notwithstanding that all of the parties have
not signed the original or the same counterpart.
10.06 SEPARABILITY OF PROVISIONS.
Each provision of this Agreement shall be considered separable. If, for any reason, any
provision or provisions herein are determined to be invalid and contrary to any existing or future
law, such invalidity shall not impair the operation of or affect those portions of this Agreement
which are valid, and if for any reason any provision or provisions herein would cause the Members to
be liable for or bound by the obligations of the Company, such provision or provisions shall be
deemed void and of no effect.
10.07 SECTION TITLES.
Section titles are for descriptive purposes only and shall not control or alter the meaning
of this Agreement as set forth in the text.
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10.08 AMENDMENTS.
Except as otherwise specifically provided herein, including without limitation in Section
7.01(c)(iv), this Agreement may be amended or modified only with the approval of the Board and the
written consent of (i) the Class A Members holding majority of the Class A Units, voting as a single
class and (ii) the Class B Members holding a majority of the Class B Units voting as a single class.
Except as set forth in Section 7.02 hereof, no Member shall have any preemptive, preferential, or
other right with respect to the issuance or sale of any Interests, or any warrants, subscriptions,
options or other rights with respect thereto.
10.09 ENTIRE AGREEMENT.
This Agreement together with SCHEDULES 1 and 2 attached hereto embody the entire agreement
and understanding between the parties hereto with respect to the subject matter hereof and supersede
all prior agreements and understandings relating to such subject matter.
10.10 WAIVER OF PARTITION.
Each Member agrees that irreparable damage would be done to the Company if any Member
brought an action in court to dissolve the Company. Accordingly, unless otherwise expressly
authorized in this Agreement, each Member agrees that he, she, or it shall not, either directly or
indirectly, take any action to require partition or appraisement of the Company or of any of the
assets or properties of the Company and, notwithstanding any provisions of this Agreement to the
contrary, each Member (and his, her, or its successors and assigns) accepts the provisions of the
Agreement as his, her, or its sole entitlement on termination, dissolution, and/or liquidation of
the Company and hereby irrevocably waives any and all right to maintain any action for partition or
to compel any sale or other liquidation with respect to his, her, or its interest, in or with
respect to, any assets or properties of the Company; and each Member agrees that he, she, or it will
not petition a court for the dissolution, termination or liquidation of the Company.
10.11 SURVIVAL OF CERTAIN PROVISIONS.
The Members acknowledge and agree that this Agreement contains certain terms and conditions
which are intended to survive the dissolution and termination of the Company, including, but without
limitation, the provisions of Section 2.07 and 3.05. The Members agree that such provisions of this
Agreement which by their terms require, given their context, that they survive the dissolution and
termination of the Company, so as to effectuate the intended purposes and agreements of the Members,
shall survive, notwithstanding that such provisions had not been specifically identified as
surviving and notwithstanding the dissolution and termination of the Company or the execution of any
document terminating this Agreement, unless such termination document specifically provides for
nonsurvival by reference to this Section 10.11 and to specific nonsurviving provisions.
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ARTICLE XI
DEFINITIONS
The following defined terms used in this Agreement shall have the meanings specified below:
"ACT" means the Delaware Limited Liability Company Act, in effect at the time of the
initial filing of the Certificate with the office of the Secretary of the State of Delaware, and as
thereafter amended from time to time.
"ADDITIONAL TERMS AND CONDITIONS" shall mean those provisions set forth on Schedule 2
hereto.
"ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Member, the deficit balance,
if any, in such Member's Capital Account as of the end of the relevant fiscal year, after giving
effect to the following adjustments:
(a) credit to such Capital Account any amounts which such Member is obligated to restore
pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to
Regulations Section 1.704-2(g)(1) and 1.704-2(i)(5); and
(b) debit to such Capital Account the items described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition is intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"ADJUSTED CAPITAL CONTRIBUTION" means a Member's initial and all additional Capital
Contributions to the Company, reduced by all distributions made to such Member under Section
4.01(i).
"AFFILIATED PERSON" or "AFFILIATE" means, with reference to a specified Person, (i) any
Person who owns directly or indirectly 10% or more of the beneficial ownership in such Person; (ii)
one or more Legal Representatives of such Person and/or any Persons referred to in the preceding
clause (i); and (iii) any entity in which any one or more of such Person and/or the Persons referred
to in the preceding clauses (i) and (ii) owns directly or indirectly 10% or more of the beneficial
ownership.
"AGREEMENT" means this Limited Liability Company Agreement as it may be amended,
supplemented, or restated from time to time.
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"APPLICABLE FEDERAL RATE" means the Applicable Federal Rate as that term is defined in Code
Section 7872, whether the short-term, mid-term or long-term rate, as the case may be, as published
from time to time by the Secretary of the Treasury.
"BOARD OF MANAGERS" or "BOARD" means the Board of Managers described in Article II of this
Agreement.
"BOOK VALUE" means, with respect to any asset of the Company, such asset's adjusted basis
for federal income tax purposes, except that:
(i) the initial Book Value of any asset contributed by a Member to the Company shall be
the gross fair market value of such asset (not reduced for any liabilities to which it is subject or
which the Company assumes), as such value is determined and for which credit is given to the
contributing Member under this Agreement;
(ii) the Book Values of all assets of the Company shall be adjusted to equal their
respective gross fair market values, as determined by the Board, at and as of the following times:
(a) the acquisition of an additional or new Interest by a new or existing Member in
exchange for other than a de minimis capital contribution, or in exchange for services by such
Member, if the Board reasonably determine that such adjustment is necessary or appropriate to
reflect the relative economic interests of the Members;
(b) the distribution by the Company to a Member of more than a de minimis amount of any
asset of the Company (including cash or cash equivalents) as consideration for all or any portion of
the Member's Interest, if the Board reasonably determines that such adjustment is necessary or
appropriate to reflect the relative economic interests of the Members;
(c) the liquidation of the Company within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g); and
(iii) the Book Value of the assets of the Company shall be increased (or decreased) to
reflect any adjustment to the adjusted basis of such assets pursuant to Section 734(b) or Section
743(b) of the Code, but only to the extent such adjustments are taken into account in determining
Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); PROVIDED, HOWEVER, that Book
Value shall not be adjusted pursuant to this clause (iii) to the extent that the Board determines
that an adjustment pursuant to clause (ii) hereof is necessary or appropriate in connection with the
transaction that would otherwise result in an adjustment pursuant to this clause (iii).
If the Book Value of an asset has been determined or adjusted pursuant to the preceding
clauses (i), (ii), or (iii), such Book Value shall thereafter be adjusted by the Depreciation taken
into account with respect to such asset for purposes of computing Profits and Losses, and the amount
of the adjustment shall thereafter be taken into account as gain or loss from the distribution of
such asset for purposes of computing Profits or Losses.
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"CAPITAL ACCOUNT" of any Member shall mean the Capital Account of such Member referred to
in Section 3.01 hereof.
"CAPITAL CONTRIBUTION" means the amount of cash and the value of any other property
contributed to the Company by a Member with respect to such Member's Interest, net of liabilities
relating to such contributed property that the Company assumes or to which the Company takes subject
under Section 752 of the Code. Any non-cash property shall be valued by agreement of the Board and
the contributing Member, which valuation shall be conclusive.
"CERTIFICATE" means the Certificate of Formation creating the Company, as it may from time
to time be amended in accordance with the Act.
"CLASS B OPTION" has the meaning set forth in Section 3.02(c).
"CLASS B REDEMPTION PRICE" has the meaning set forth in Section 3.08(a).
"CODE" means the Internal Revenue Code of 1986, as amended from time to time, and any
subsequent federal law of similar import.
"COMPANY" means the limited liability company formed pursuant to the Certificate and this
Agreement, as it may from time to time be constituted and amended.
"CONSENT" means the written consent or approval of more than 50% in interest, based on
Percentage Interests held as Members, of those Members entitled to participate in giving such
Consent, and if more than one class of Members is so entitled then more than 50% shall be so
required with respect to each such class.
"CONTROL RELEASE EVENT" shall mean the earlier to occur of (i) the determination by the
Class B Member not to make a Follow-on Capital Contribution, or the failure of the Class B Member to
satisfy its Capital Contribution obligations hereunder, or (ii) any event, distribution or series of
payments that result in the Class B Member having received cash distributions equal to the cash
Capital Contributions made by it, or (iii) the Company obtaining cash Capital Contributions from
parties other than the Class B Member in an amount which exceeds the Capital Contributions from the
Class B Member.
"DEPRECIATION" means, for each year or other period, an amount equal to the depreciation,
amortization or other cost recovery deduction allowable for federal income tax purposes with respect
to an asset for such year or other period, except that if the Book Value of an asset differs from
its adjusted basis for federal income tax purposes at the beginning of such year or other period,
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Depreciation shall be an amount that bears the same relationship to the Book Value of such asset as
the depreciation, amortization, or other cost recovery deduction computed for tax purposes with
respect to such asset for such period bears to the adjusted tax basis for such asset or, if such
asset has a zero adjusted tax basis, Depreciation shall be determined with reference to the initial
Book Value of such asset using any reasonable method selected by the Board, but not less than
depreciation allowable for tax purposes for such year.
"DEVELOPMENT CORPORATION" means T3 Therapeutics, Inc., a New York corporation and the sole
initial Class A Member.
"DEVELOPMENT PLAN" means the development plan and funding schedule agreed to in writing by
St. ▇▇▇▇▇▇▇▇ and the Company.
"FOLLOW-ON CAPITAL CONTRIBUTION" has the meaning set forth in Section 3.06(d).
"INTEREST" means the entire equity interest (or "limited liability company interest" as
such term is used in the Act) of a Member in the Company and all rights and liabilities associated
therewith, including without limitation rights to distributions (liquidating or otherwise),
allocations, information, and rights to consent or approve, which Interest shall be as set forth on
SCHEDULE I in the name of the applicable Member. Interests shall be represented by Units and shall
be designated as "Class A Interests" or "Class B Interests" as set forth on SCHEDULE I hereto.
"LEGAL REPRESENTATIVE" means, with respect to any individual, a duly appointed executor,
administrator, guardian, conservator, personal representative, or other legal representative
appointed as a result of the death or incompetency of such individual.
"LOSSES" shall have the meaning provided below under the heading "Profits and Losses."
"MANAGERS" shall refer to the Person(s) named as Managers in this Agreement and any Person
who becomes an additional, substitute, or replacement Manager as permitted by this Agreement, in
each such Person's capacity as a Manager of the Company. Managers shall be designated as "Class A
Managers" or "Class B Managers" as set forth in Section 2.01.
"MEMBER" shall refer any Person named as a Member in this Agreement and any Person who
becomes an additional, substitute, or replacement Member as permitted by this Agreement, in each
such Person's capacity as a Member of the Company; and "Members" shall refer to all such Persons
collectively. Members shall be designated as "Class A Members" or "Class B Members" as set forth on
Schedule I hereto.
"MINIMUM GAIN" shall have the meaning given in Regulations Section 1.704-2(d).
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"NONRECOURSE DEDUCTIONS" shall have the meaning given in Regulations Section 1.704-2(b)(1).
"OPTION HOLDER" means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III, the holder of the Class B Option.
"PARTNER MINIMUM GAIN" shall mean an amount, with respect to each Partner Nonrecourse Debt,
equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were
treated as a nonrecourse liability, determined in accordance with Regulations Section 1.704-2(i)(3).
"PARTNER NONRECOURSE DEBT" shall have the meaning given in Regulations Section
1.704-2(b)(4).
"PARTNER NONRECOURSE DEDUCTIONS" shall have the meaning given in Regulations Section
1.704-2(i)(2).
"PERCENTAGE INTEREST" means the relative Interest of a Member in proportion to all
outstanding Interests, or of the class of Interest which the Member holds, as set forth on Schedule
I, as such schedule may be amended from time to time.
"PERSON" means any natural person, partnership (whether general or limited), limited
liability company, trust, estate, association, or corporation.
"PROFITS AND LOSSES" means, for each fiscal year or other period, an amount equal to the
Company's taxable income or loss for such year or period, determined in accordance with Code Section
703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:
(i) Any income of the Company that is exempt from federal income tax and not otherwise
taken into account in computing Profits or Losses pursuant to this provision shall be added to such
taxable income or loss;
(ii) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated
as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-l(b)(2)(iv)(i), and
not otherwise taken into account in computing Profits or Losses pursuant to this provision, shall be
subtracted from such taxable income or loss;
(iii) Gain or loss from a disposition of property of the Company with respect to which
gain or loss is recognized for federal income tax purposes shall be computed by reference to the
Book Value of such property, rather than its adjusted tax basis;
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(iv) In lieu of the depreciation, amortization, and other cost recovery deductions taken
into account in computing taxable income or loss, there shall be taken into account the Depreciation
on the assets for such fiscal year or other period; and
(v) Any items which are separately allocated pursuant to Section 9.01 and/or 9.02 which
otherwise would have been taken into account in calculating Profits and Losses pursuant to the above
provisions shall not be taken into account and, as the case may be, shall be added to or deducted
from such amounts so as to be not part of the calculation of the Profits or Losses.
If the Company's taxable income or loss for such year, as adjusted in the manner provided
above, is a positive amount, such amount shall be the Company's Profits for such year; and if
negative, such amount shall be the Company's Losses for such year.
"REGULATIONS" means the Regulations promulgated under the Code, and any successor
provisions to such Regulations, as such Regulations may be amended from time to time.
"ST. ▇▇▇▇▇▇▇▇" means The St. ▇▇▇▇▇▇▇▇ Seaway Corporation, an Indiana corporation and the
sole initial Class B Member.
"TAX MATTERS PARTNER" shall have the meaning given in Section 6.04
"TERMINATING CAPITAL TRANSACTION" means a sale or other disposition of all or substantially
all of the assets of the Company, a merger or consolidation of the Company, a liquidation or
dissolution of the Company or any other transaction which results in the cessation of the Company's
business, operations or independent legal existence.
"TRANSFER" and any grammatical variation thereof shall refer to any sale, exchange,
issuance, redemption, assignment, distribution, encumbrance, hypothecation, gift, pledge,
retirement, resignation, transfer, or other withdrawal, disposition, or alienation in any way as to
any interest as a Member. Transfer shall specifically, without limitation of the above, include
assignments and distributions resulting from death, incompetency, Bankruptcy, liquidation, and
dissolution.
"UNITS" means equal units representing the Interests of the several Members of the Company
at any particular time, each of which Units shall have rights and duties the same as each other Unit
unless this Agreement shall expressly provide differing rights, powers and duties with respect to
separate classes or series of Units. Units shall be designated as "Class A Units" or "Class B Units"
as set forth on SCHEDULE 1 hereto.
The definitions set forth in the Act shall be applicable, to the extent not inconsistent
herewith, to define terms not defined herein and to supplement definitions contained herein.
* * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal as of the
day and year first above written.
MANAGERS: MEMBERS:
T3 THERAPEUTICS, INC.
/s/ ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------- -----------------------------------
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇, President
ST. ▇▇▇▇▇▇▇▇ SEAWAY CORP.
/s/ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
------------------------------------- -----------------------------------
▇▇. ▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Title: Vice President
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SCHEDULE I
TO LIMITED LIABILITY COMPANY AGREEMENT
OF T3 THERAPEUTICS, LLC
AS OF JUNE 25, 2002
MANAGERS
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇. ▇▇▇▇ ▇▇▇▇▇▇
TAX MATTERS PARTNER
▇▇. ▇▇▇▇▇ ▇.▇▇▇▇▇
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MEMBERS
-------------------------------- ------------- --------------------- ------------------- ----------------------
NAME, ADDRESS CAPITAL CONTRIBUTION PERCENTAGE
AND TAX I.D. NO. ISSUE DATE INTEREST UNITS
-------------------------------- ------------- --------------------- ------------------- ----------------------
T3 Therapeutics Inc. 6/25/2002 Product, Product 87.5% of the 750 Class A ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Know How and Interests, subject
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Product Rights to adjustment as
FIN:_______________ set forth in
Additional Terms
and Conditions.
-------------------------------- ------------- --------------------- ------------------- ----------------------
Name: St. ▇▇▇▇▇▇▇▇ Seaway Corp. 6/25/2002 $750,000 of which 12.5% of the ▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $40,000 shall be Interests, subject
deemed to have to adjustment as
FIN:_______________ heretofore been set forth in the
made (and evidenced Additional Terms
by the Class B and Conditions
Members
cancellation of a
Promissory Note in
such amount)
-------------------------------- ------------- --------------------- ------------------- ----------------------
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SCHEDULE 2
ADDITIONAL TERMS AND CONDITIONS
TO THE
LIMITED LIABILITY COMPANY AGREEMENT
OF T3 THERAPEUTICS, LLC
1. DEFINITIONS. Capitalized terms used and not otherwise defined herein or defined in the Agreement
shall have the meanings assigned to them below:
"ADJUSTED CLASS B PERCENTAGE INTEREST" means the Class B Percentage Interest as adjusted
pursuant to Section 3 below.
"ADJUSTMENT CALCULATION" means the formula described in Section 3 below and used to
determine the adjustment to the Class B Percentage Interest.
"BASE PERCENTAGE" initially means twelve and one-half percent (12.5%), and on and after the
making of the Follow-on Contribution, shall mean up to twenty-five percent (25%).
"DEVELOPMENT PARTNER" means any drug formulator, laboratory or pharmaceutical company
contracted by the Company to formulate the Products.
"FINAL SHARE PERCENTAGE" means (a) the Net Revenue Percentage less (b) the North Shore
Percentage and LESS (c) such percentage of the license revenue received by the Company as shall be
payable on account of any agreement with a Development Partner entered into prior to final FDA
approval.
By way of example only, if (i) the Company shall be entitled to a Net Revenue Percentage of
20% from Product sales as a license fee for the distribution and sale of the Products by a Marketing
Partner, (ii) North Shore Hospital shall be entitled to the North Shore Percentage (i.e. 3% of net
sales from Product sales) and (iii) the Development Partner shall be entitled to 18% of the net
revenues payable to the Company (which is the equivalent of 3.6% of the net revenues from Product
sales), then the Final Share Percentage would be 13.4%.
"MARKETING PARTNER" means any development, marketing or licensing partner or joint venturer
or licensor of the Company.
"MINIMUM PERCENTAGE" means (i) with reference to one single-Product agreement, twenty
percent (20%); (ii) with reference to a multi-Product agreement, the Net Revenue Percentage of such
multi-Product agreement; and (iii) with reference to two single-Product agreements, the average of
the Net Revenue Percentage of the agreements.
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"NET REVENUE PERCENTAGE" means the percentage of net revenue of any Marketing Partner
derived from the sale the Products that shall be payable by the Marketing Partner to the Company;
provided, that if within the two year period following the execution of the first single-product
licensor/distributor agreement, the Company executes a second single-product licensor/distributor
agreement, then the Net Revenue Percentage shall be the average of the two individual Net Revenue
Percentages.
"NORTH SHORE PERCENTAGE" means three percent (3%) of net sales (as such term is defined in
the license agreement with North Shore Hospital).
"PARTNER PAYMENT" shall mean all development fees, milestone payments, lump-sum initial
license fees or similar fees or payment amounts received by the Company from any Marketing Partner,
in each case net of costs, payments to development partners or other third parties and such amount
of retained capital as Board shall determine to be necessary for operational purposes (including but
not limited to any required reserves established by the Board). Amounts paid as an advance of
license fees, for which the Marketing Partner receives a credit applicable to future license fees
due on Product sale, shall not be deemed a Partner Payment.
2. DISTRIBUTION OF COMPANY FUNDS TO THE CLASS B MEMBER.
Notwithstanding anything to the contrary in the Agreement, or in this SCHEDULE 2, and
notwithstanding any increase in the Class B Percentage Interests that may result from Section 3
below, in the event that the Company shall receive any Partner Payment, then within thirty (30) days
thereafter, the Class B Member shall be entitled to receive a distribution of such portion of the
Partner Payment as equals the then current Base Percentage. The allocation of any Profits and/or
Losses pursuant to Section 5.01 of the Agreement shall be adjusted as appropriate to accommodate for
the distribution preference set forth above.
3. ADJUSTMENT OF CLASS B PERCENTAGE INTEREST.
3.1 ADJUSTMENT CALCULATION. The Class B Percentage Interest shall be adjusted, as follows:
(x) there shall be a calculation of the amount by which the Net Revenue Percentage
is less than twenty percent (20%); and
(y) this difference shall be converted into a factor by dividing the Minimum
Percentage by the Final Share Percentage; and
(z) the Base Percentage shall then be multiplied by such factor, but in any case not
by a factor that exceeds 2X; PROVIDED, HOWEVER, that if prior to the third
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anniversary of the Agreement (and prior the date of final FDA approval as
defined by the Development Plan) the Class B Member receives aggregate
distributions from Partner Payments in an amount equal to the Class B Member's
total Capital Contributions as set forth on SCHEDULE 1, then the Class B
Percentage Interest resulting from the calculations of (x), (y) and (z) above
shall be reduced (i) by 1% for each $1,000,000 of distributions (or portion
thereof, in increments of 1/10 of 1%) actually paid to the Class B Member and
(ii) thereafter, by 2% for each $1,000,000 of distributions actually paid to the
Class B Member (or portion thereof, in increments of 1/10 of 1%), but in no
event shall the aggregate of such reductions result in an Adjusted Class B
Percentage Interest below (i) 12.5% prior to the Follow-on Capital Contribution
or (ii) 25% after the Follow-on Capital Contribution.
By way of example only, if the Final Share Percentage were 13.4%, then the shortfall
described in (x) shall be 6.6%, and the factor referred to in (y) shall be approximately 1.5X, and
(z) shall result in the Base Percentage of 25% being multiplied by 1.5X, for a resulting Adjusted
Class B Percentage Interest of approximately 38%.
3.2 NOTICE OF ADJUSTMENT TO CLASS B PERCENTAGE. Any adjustment to the Class B Percentage
Interest shall be deemed to be made automatically and without action by the Company or the Class B
Member. Upon any determination by the Company that the Class B Percentage Interest is to be
adjusted, the Company shall immediately provide a written description of the reasons for such
adjustment, and the details of the Adjustment Calculation. The Class B Member at any time shall be
entitled to request an Adjustment Calculation, including details of all prior calculations, and the
Company shall provide such Adjustment Calculation within three (3) days of such request.
3.4 ALLOCATION OF PROFITS AND LOSSES. The allocation of any Profits and/or Losses pursuant
to Section 5.01 of the Agreement shall be adjusted as appropriate to accommodate for the adjustment
of the Class B Percentage Interest.
3.5. CLASS B UNITS. To the extent that the Class B Percentage Interest is adjusted
hereunder, the number of Class B Units shall be adjusted accordingly. Accordingly, if certificates
representing the Class B Interests have been issued by the Company, the holders thereof shall submit
such certificates for cancellation and new certificates representing the adjusted Class B Interests
shall be issued to such holders.
3.6 VOTING AGREEMENT. If the aggregate Class B Percentage Interest increases to forty-seven
and one-half percent (47.5%) of the total Percentage Interest, the Option Holder agrees to vote his
Units as instructed by the Development Corporation until such time as St Lawrence's Percentage
Interest is less than forty-five percent (45.0%), PROVIDED, that the Voting Agreement set forth
herein shall not apply to actions requiring the Members to vote separately by class.
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4. ADDITIONAL INVESTMENTS AND ANTI-DILUTION PROTECTION
In the event that Interests or equivalent ownership in the Company is issued to one or more
third parties (other than to the Option Holder, any person or entity which is Member as of the date
of the Agreement, or an Affiliate thereof) (a "NEW MEMBER"), then:
(i) the Adjusted Class B Percentage Interest shall be diluted on the same
proportionate basis as the existing Class A Members' Percentage Interests until
such time as such New Member(s) shall hold an aggregate of 40% or more of the
Company's Interests; and
(ii) thereafter, dilution of the Class A and Class B Interests shall be borne 87.5% by
the existing Class A Members and 12.5% by the Class B Member, until the sum of the
Class A Members' Percentage Interests is equal to the Adjusted Class B Percentage
Interest; and
(iii) thereafter, the Class B Members and the Class A Members shall again be diluted
equally, as in the preceding clause (i).
5. COMPANY USE OF PROCEEDS
The Company shall at all times utilize the initial Capital Contribution and the Follow-on
Capital Contribution of the Class B Member solely in pursuit of, and in conformance with the use of
proceeds described in the Development Plan, and shall, within ten (10) days of any written request
by the Class B Member (which request shall be not more frequent than four (4) times each calendar
year) deliver a written certification by the Company, attested to by its Chief Executive Officer (a
"DEVELOPMENT STATUS REPORT"), certifying that (a) such contributions have been expended for the
continued operation and funding of development of the Products, (b) there is attached thereto a
reasonably detailed accounting of the use of the initial Capital Contribution and the Follow-on
Contribution through the date of the certification, and (c) that the Company's development of the
Products and all uses of the Capital Contributions of the Class B Member are in conformity with the
Development Plan (including but not limited to the funding schedule set forth therein).
6. MERGER WITH CLASS B MEMBER AND REGISTRATION RIGHTS.
At any time after both (x) the Company has obtained final FDA approval (as set forth in the
Development Plan), and (y) the Class B Member has received aggregate distributions equal to its
Capital Contributions, then upon the request of the Class A Member, the Class B Member shall issue
to the Class A Member (in exchange for all of their interest in the Company) such amount of common
stock of the Class B Member as represents the relative value of the Class A Members interest of the
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combined entity on a basis and exchange ratio agreed upon by the Class B Manager and the Class A
Manager based upon the relative fair market value of each of the Class B Member and the Company
immediately prior to such exchange (the "TRANSACTION"). If the Class B Manager and the Class A
Manager shall not agree on such relative values, then they shall promptly and in good faith select
one or more appraisers to determine such relative values. Notwithstanding the foregoing to the
contrary, no party shall be obligated to consummate the Transaction in the event it is reasonably
likely that the Transaction will constitute a taxable event for such party. In such case, the
parties will, in good faith, seek an alternative tax-free structure to the Transaction.
As provided for in a separate registration rights agreement (the "REGISTRATION RIGHTS
AGREEMENT") in substantially the form of EXHIBIT D attached hereto, the Class B Member will have two
demand registration rights exercisable at any time and will also be entitled to Form S-3 and
piggyback registration rights at any time, subject to underwriter's limitations. The Company shall
bear the expenses of such registrations. The Company shall not grant new registration rights to any
other Person that would be superior to the Class B Members' registration rights.
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EXHIBIT A
OPTION AGREEMENT
This Option Agreement, dated as of June 25, 2002 (the "GRANT DATE"), is by and between T3
Therapeutics, LLC, a Delaware limited liability company (the "COMPANY"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
(the "GRANTEE").
WHEREAS, St. ▇▇▇▇▇▇▇▇ Corp., the sole holder of Class B membership units of the Company
(the "CLASS B MEMBER"), has appointed the Grantee as its representative, invested with the authority
to act on its behalf with respect to the business and affairs of the Company;
WHEREAS, the Grantee has provided substantial assistance in connection with the Class B
Member's investment in the Company;
WHEREAS, the Company recognizes that it has benefited by such assistance and will continue
to benefit by the Grantee's appointment as the Class B Member's representative; and
WHEREAS, the Company, in recognition of such benefit desires to grant to the Grantee an
option to purchase Class B membership units of the Company in accordance with the terms and
conditions set forth herein.
NOW THEREFORE, in consideration of the mutual agreements set forth herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1 DEFINITIONS. All capitalized terms used but not otherwise defined herein shall have the
meanings assigned to them in the Company's Limited Liability Company Agreement dated as of June 25,
2002 (as amended from time to time, the "OPERATING AGREEMENT").
2. GRANT OF OPTION The Company hereby grants to the Grantee, as of the Grant Date, an option
(the "Option") to purchase up to 25 Class B Units (the "OPTION UNITS") at a price per share of
$6,000, both the price and the number of units being subject to adjustment as provided herein. The
Option shall be exercisable in full on the Grant Date. The Option, to the extent it has not been
exercised or sooner terminated, shall expire on the close of business on the day that is ten (10)
years from the Grant Date (the "EXERCISE PERIOD"). Subject to the provisions of this Agreement, the
Option may be exercised at any time and from time to time during the Exercise Period decreased in
each case by the aggregate number of Option Units as to which it has previously been exercised.
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3. CESSATION OF GRANTEE'S RETENTION AS THE CLASS B REPRESENTATIVE
3.1 VOLUNTARY TERMINATION. If the Grantee ceases to serve as the representative of the
Class B Member by reason of his voluntary resignation, or removal by the Class B Member without
Cause (as defined below), prior to expiration of the Exercise Period, the Option shall be
exercisable by him only during the one year following such cessation (but in no event after the
expiration of the Exercise Period).
3.2 DEATH. If the Grantee ceases to serve as the representative of the Class B Member by
reason of his death prior to expiration of the Exercise Period, the Option shall be exercisable by
either his executor or administrator or, if not so exercised, by the legatees or the distributes of
his estate, only during the six months following his death (but in no event after the expiration of
the Exercise Period); PROVIDED, that his executor or administrator, or a legatee or distributee, can
exercise such Option only if such person is the Grantee's spouse, issue or a trustee of a trust
principally for the benefit of such spouse and/or any of such issue.
3.3 DISABILITY. If the Grantee ceases to serve as the representative of the Class B Member
representative by reason of his permanent and total disability (as determined by the Class B Member
in good faith) prior to the expiration of the Exercise Period, the Option shall be exercisable by
him during the six months following such cessation (but in no event after the expiration of the
Exercise Period).
3.4 TERMINATION FOR CAUSE. If the Grantee ceases to serve as the representative of the
Class B Member by reason of his act or omission in breach of his fiduciary duty to the Class B
Member ("CAUSE") prior to expiration of the Exercise Period, the Option shall be forfeited by him
and the Exercise Period shall automatically terminate upon the date of such cessation.
4. EXERCISE OF OPTION.
4.1 NOTICE OF EXERCISE. The Grantee may exercise the Option with respect to all or any part
of the number of Option Units by giving written notice of election, in the form of the Notice of
Exercise, a copy of which is attached hereto as EXHIBIT A to the Company at the address specified in
Section 10 below. Such notice shall specify the number of Option Units as to which the Option is
exercised.
4.2 OPTION EXERCISE PRICE; PAYMENT. At the time the Option is exercised, the Grantee shall
make full payment for the Option Units purchased, in cash or by certified or bank check or, to the
extent permitted by the Board, or any Committee appointed by the Board to generally administer
options issued by the Company, by delivery of Units, valued at their Fair Market Value (as defined
below) on the date of delivery, or such other lawful consideration as the Board shall determine. The
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Board may permit a Grantee to elect to pay the exercise price upon the exercise of an Option by
authorizing a third party to sell Option Units (or a sufficient portion thereof) and remit to the
Company a sufficient portion of the sale proceeds to pay the entire exercise price and any tax
withholding resulting from such exercise. The Grantee shall pay to the Company or make provision
satisfactory to the Company for the payment of any taxes required by law to be withheld by the
Company at the time of the exercise of the Option or the sale of the Option Units acquired upon such
exercise.
"FAIR MARKET VALUE" means, with respect to an Option Unit, the fair market thereof as of
the relevant date of determination, as determined in accordance with a valuation methodology
approved by the Board in good faith; provided, that if the Board does not adopt or employ any such
valuation methodology and Series B Units are traded on an exchange or quoted on The Nasdaq National
Market, fair market value shall mean, on the relevant date of determination, the closing price of a
unit traded on the principal exchange for the units or, if the units are so traded, the closing or
last price quoted on The Nasdaq National Market.
4.3. SECURITIES LAW COMPLIANCE. This Option and the Option Units issued upon exercise of
this Option will be subject to all restrictions on transfer imposed by applicable state or federal
securities laws. Notwithstanding anything to the contrary contained herein, the Option shall not be
exercisable unless either (a) a registration statement under the Securities Act of 1933, as amended,
with respect to the offer and sale of the Option Units by the Company shall have become, and
continues to be, effective, or (b) the Company determines in its sole discretion that an exemption
from registration under said Act is available with respect to the offer and sale of the Option Units
by the Company.
5. LEGEND. Each certificate for Option Units acquired upon the exercise of the Option shall
contain the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAW OF ANY STATE, AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED OR PLEDGED UNLESS OR UNTIL THEY ARE
REGISTERED UNDER THE ACT AND APPLICABLE STATE LAW OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY IS OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS CONTAINED IN
THE COMPANY'S LIMITED LIABILITY COMPANY AGREEMENT, DATED AS OF JUNE 25, 2002. A COPY OF
SUCH AGREEMENT WILL BE FURNISHED BY THE COMPANY TO ANY INTERESTED PARTY FREE OF CHARGE
WRITTEN REQUEST.
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6. TRANSFERABILITY. This Option is not transferable by the Grantee other than by will or the
laws of descent and distribution and, during the lifetime of the Grantee, may be exercised only by
the Grantee.
7. ADJUSTMENTS. In the event the Company issues any Series B Units as a dividend upon or with
respect to such units or in the event Series B Units shall be subdivided or combined into a greater
or smaller number of units, or if, upon a merger or consolidation reorganization, split-up,
liquidation, combination, recapitalization or the like of the Company, Class B Units shall be
exchanged for other securities of the Company, securities of another entity, cash or other property,
the Grantee upon the exercise of the Option shall be entitled to purchase such number of Class B
Units, other securities of the company, securities of such other entity, cash or other property as
the Grantee would have received if the Grantee had been the holder of the units with respect to
which the Option is exercised at all times between the Grant Date and the date of its exercise, and
appropriate adjustments shall be made in the purchase price per Option Unit.
8. Entire Agreement; Governing Law. This Agreement constitutes the entire agreement of the
parties respecting the subject matter hereof and thereof and supersedes all prior agreements,
understandings, promises, negotiations or representations concerning such subject matter. This
Agreement shall be binding on, and inure to the benefit of, the parties hereto and their respective
heirs, legal representatives, successors and assigns. The validity, construction, interpretation and
effect of this instrument shall be governed by and determined in accordance with the law of the
State of Delaware, without regard to conflicts of law principles.
9. SEVERABILITY. In the event that any court of competent jurisdiction shall finally determine
that any provision, or any portion thereof, contained in this Agreement shall be void or
unenforceable in any respect, then such provision shall be deemed limited to the extent that such
court determines it enforceable, and as so limited shall remain in full force and effect. In the
event that such court shall determine any such provision, or portion thereof, wholly unenforceable,
the remaining provisions of this Agreement nevertheless shall remain in full force and effect.
10. NOTICES. All notices, requests, consents and other communications hereunder shall be in
writing, addressed to the receiving party's address set forth below or to such other address as a
party may designate by notice hereunder, and either (i) delivered by hand, (ii) made by facsimile
transmission, (iii) sent by recognized overnight courier, or (iv) sent by the registered or
certified mail, return receipt requested, postage prepaid. If to the Company at ▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn. President and if the to the Grantee at the address specified below.
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All notices, requests, consents and other communications hereunder shall be deemed to have
been property given (i) if by hand, at the time of the delivery thereof to the receiving party at
the address of such party set forth above, (ii) if made by facsimile transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise, (iii) if sent by
overnight courier, on the next business day following the day such notice is delivered to the
courier service, or (iv) if sent by registered or certified mail, on the fifth business day
following the day such mailing is made.
11. COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same instrument.
12. OBLIGATIONS OF GRANTEE. The Company acknowledges and agrees that the Grantee's obligations
are solely to act in furtherance of the Class B Member's interests.
13. CONSTRUCTION. The parties have participated jointly in the negotiation and drafting of this
Agreement. In the event ambiguity or question of intent or interpretation arises, this Agreement
shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Option Agreement on the date
first above written.
T3 Therapeutics, LLC
By:____________________________________________
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇, Manager
____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
Address: ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇. ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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Exhibit A
NOTICE OF EXERCISE
T3 Therapeutics, LLC Date:__________________
▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
1. All capitalized terms used but not otherwise defined herein shall have the meanings
assigned to them in the T3 Therapeutics, LLC Limited Liability Agreement, dated as of June
25, 2002 (as such agreement may be amended from time to time, the "OPERATING AGREEMENT").
2. The undersigned hereby irrevocably elects to purchase __________ Class B Units pursuant to
provisions of the attached Option Agreement. The units to which this exercise relates are
_______________.
3. The undersigned hereby confirms and acknowledges that the Class B Units are being acquired
solely for the account of the undersigned and not as a nominee for any other party, and for
investment, and that the undersigned will not offer, sell or otherwise dispose of any such
Class B Units except under circumstances that will not result in a violation of the
Securities Act of 1993, as amended, or any applicable state securities laws.
4. The undersigned, in order to become the holder of the Class B Units, hereby agrees to the
following: (i) all of the Class B Units shall constitute Units with the benefits of and
subject to and bound by the restrictions and conditions applicable to Units as set forth in
the Operating Agreement and (ii) the undersigned shall by execution of this Exercise Notice
become a Member of the Company and as such shall have the benefits of and be subject to and
bound by the restrictions and conditions applicable to the Members, as all such benefits,
obligations and restrictions are set forth in the Operating Agreement. The undersigned
agrees to execute and delivery such instruments and to take such other actions as the
Company may reasonably request, in connection with his purchase of the Class B Units and
his admission as a Member of the Company.
5. Please issue a certificate representing said units in the name of the undersigned.
Signature _________________________
Address ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇. ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
$_____________________ Boston, Massachusetts
______________, 200_
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EXHIBIT B
DEMAND PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned, T3 Therapeutics, LLC (the "MAKER") hereby promises to
pay to the order of _______________ (the "HOLDER") and its assigns ON DEMAND the principal amount of
_____________________________ DOLLARS ($______), together with interest, per annum, on the unpaid
principal amount from time to time outstanding thereon. The interest rate shall be ____________
percent (______%) [THE LOWEST APPLICABLE FEDERAL RATE] per annum. Such interest shall be calculated
on the basis of a 360-day year and the actual number of days elapsed.
All amounts due and payable under this Note shall be paid by the Maker to the Holder no
later than the 120th day following the date on which written demand therefore has been deemed
received by the Maker pursuant to Section 9 below (the "PAYMENT DATE").
The Maker's obligations under this Note shall be secured by a lien on all of the Maker's
assets pursuant to a Security Agreement, the terms and conditions of which shall be negotiated in
good faith by the Maker and Holder.
1. PAYMENT. All payments hereunder shall be made in lawful money of the United States and
shall be credited first against any costs and expenses then owed by the Maker to the Holder under
this Note, next against interest, and then against the principal amount of this Note. All payments
hereunder shall be delivered to the Holder at the following address: __________________.
2. PREPAYMENT. This Note may be prepaid without penalty, in whole or in part, at any time.
3. EVENTS OF DEFAULT. Notwithstanding anything contained herein to the contrary, this Note
shall become immediately due and payable without notice or demand upon the occurrence at any time of
any of the following events of default (each an "EVENT OF DEFAULT"):
(A) default in the payment of all sums due and payable hereunder in full by the Payment
Date; or
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(B) the appointment of a receiver, conservator or similar officer for all or substantially
all of the property of, or the making of an assignment for the benefit of creditors, or composition
with creditors or other arrangement of similar import by, or the commencement of any proceeding
under any bankruptcy or insolvency law, now or hereafter enacted, which remains undismissed for a
period of ninety (90) days, against the Maker, or the institution of any such proceeding voluntarily
by the Maker.
4. DEFAULT CHARGES AND COSTS. Upon any Event of Default under this Note, and whether or not
the Holder shall have exercised his rights hereunder to accelerate the maturity of this Note, the
overdue amounts shall carry a default charge equal to twelve percent (12%) per annum or, if lower,
the highest interest rate allowed by applicable law. The Maker agrees to pay on demand all costs of
collection, including reasonable attorneys' fees, incurred by the Holder in enforcing the
obligations created by this Note. Interest shall commence accruing on the date of the Event of
Default and shall continue to accrue until all overdue amounts are paid in full. Interest shall be
computed on the basis of a 360 day year and the actual number of days elapsed.
5. WAIVER. No delay or omission on the part of the Holder in exercising any right hereunder
shall operate as a waiver of such right or any other right of the Holder, nor shall any delay,
omission or waiver on any one occasion be deemed a bar or waiver of the same or any other right on
any future occasion. Except as otherwise set forth herein, the Maker and every endorser or guarantor
of this Note regardless of the time, order or place of signing waives presentment, demand, protest
and notices of every kind and assents to any extension or postponement of the time of payment or any
other indulgence, to any substitution, exchange or release of collateral, and to the addition or
release of any other party or person primarily or secondarily liable.
6. RIGHTS AND REMEDIES. The rights and remedies of the Holder hereunder shall be cumulative
and concurrent and may be pursued singularly, successively or together at the sole discretion of the
Holder and may be exercised as often as occasion therefore shall occur. The failure to exercise any
such right or remedy shall in no event be construed as a waiver or release of the same or any other
right or remedy.
7. SUCCESSORS AND ASSIGNS. The rights and obligations of the Maker and the Holder of this
Note shall be binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties. Notwithstanding the foregoing sentence to the contrary, neither this
Note nor any rights, interests or obligations hereunder may be assigned, by operation of law or
otherwise, in whole or in part by the Maker without the prior written consent of the Holder.
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8. AMENDMENTS. None of the terms or provisions of this Note may be modified, or amended
except by a written instrument duly executed by the Holder and the Maker expressly referring hereto
and setting forth the provision so modified or amended.
9. NOTICES. All notices, requests, consents and other communications hereunder shall be in
writing, addressed to the receiving party's address set forth below or to such other address as a
party may designate by notice hereunder, and (i) delivered by hand, (ii) made by facsimile
transmission, (iii) sent by recognized overnight courier, or (iv) sent by registered or certified
mail, return receipt requested, postage prepaid.
If to the Maker:
T3 Therapeutics, Inc.
▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
Phone No.: ▇▇▇-▇▇▇-▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
If to the Holder:
_________________________
_________________________
Phone No.:_______________
Fax No.:_________________
All notices, requests, consents and other communications hereunder shall be deemed to have
been properly given (i) if by hand, at the time of the delivery thereof to the receiving party at
the address of such party set forth above, (ii) if made by facsimile transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise, (iii) if sent by
overnight courier, on the next business day following the day such notice is delivered to the
courier service, or (iv) if sent by registered or certified mail, on the fifth business day
following the day such mailing is made.
10. GOVERNING LAW; JURISDICTION. This Promissory Note shall be construed in accordance with
the internal laws, without regard to its conflicts of law principles of interest principles, of the
Commonwealth of Massachusetts. The Maker hereby absolutely and irrevocably consents and submits to
the jurisdiction of the courts in The Commonwealth of Massachusetts and of any Federal court located
in said Commonwealth in connection with any actions or proceedings brought against it arising out of
or relating to this Agreement. The Maker hereby absolutely and irrevocably (i) waives any objection
to jurisdiction or venue, (ii) waives personal service of any summons, complaint, declaration or
other process, and (iii) agrees that the service thereof may be made by certified or registered
first-class mail directed to such party, at its address set forth herein.
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11. INTERPRETATION. Nothing set forth herein shall limit, negate or otherwise alter the
demand nature of this Note. The section and article headings contained in this Promissory Note are
for reference purposes only and shall not affect the interpretation of this Promissory Note. This
Promissory Note was negotiated by the Maker and the Holder with the benefit of legal representation,
and any rule of construction or interpretation otherwise requiring this Agreement to be construed or
interpreted against either of the Maker or the Holder shall not apply to any construction or
interpretation hereof.
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IN WITNESS WHEREOF, the undersigned has hereby executed this Promissory Note under seal as
of ___________________, 200_.
T3 THERAPEUTICS, LLC
By:___________________________________
Name:
Title:
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EXHIBIT C
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement, dated as of June 25, 2002, is by and between T3
Therapeutics, Inc., a New York corporation (the "SELLER") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III ("BUYER"). The
Seller and the Buyer may be collectively referred to as the "PARTIES" and each individually as a
"PARTY."
WHEREAS, the Seller owns membership units in T3 Therapeutics, LLC, a Delaware limited
liability company (the "COMPANY"); and
WHEREAS, the Seller wishes to sell, and the Buyer wishes to purchase such units in
accordance with the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements set forth herein and other good
and valuable consideration, the receipt and sufficiency which are hereby acknowledged, the Parties
agree as follows:
1. DEFINITIONS. All capitalized terms used but not otherwise defined herein shall have the meanings
assigned to them in the Company's Limited Liability Company Agreement dated as of June 25, 2002 (as
amended from time to time, the "OPERATING AGREEMENT").
2. PURCHASE AND SALE. On the date hereof, the Seller hereby sells, transfers, assigns and conveys to
the Buyer, and the Buyer hereby purchases from the Seller, an aggregate of 25 Class A Units of the
Company (the "PURCHASED UNITS"). The aggregate purchase price for the Purchased Units shall be One
Hundred Fifty Thousand Dollars ($150,000), payable in immediately available funds on the date
hereof. The Seller agrees to execute and deliver such instruments and to take such other actions as
the Buyer may reasonably request, in connection with the transfer of the Purchased Units to the
Buyer.
3. MEMBER OF THE COMPANY. The Buyer, in order to become the holder of the Purchased Units, hereby
agrees to the following: (i) all of the Purchased Units shall constitute Units with the benefits of
and subject to and bound by the restrictions and conditions applicable to Units as set forth in the
Operating Agreement and (ii) he shall by execution of this Agreement become a Member of the Company
and as such shall have the benefits of and be subject to and bound by the restrictions and
conditions applicable to the Members, as all such benefits, obligations and restrictions are set
forth in the Operating Agreement. The Buyer agrees to execute and delivery such instruments and to
take such other actions as the Company may reasonably request, in connection with his purchase of
the Purchased Units and his admission as a Member of the Company.
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4. REPRESENTATIONS OF THE SELLER. The Seller represents and warrants to the Buyer as to the
following:
4.1 OWNERSHIP OF PURCHASED UNITS. The Seller owns the Purchased Units free and clear of any
claims, charges, liens, security interests, encumbrances or any other restrictions whatsoever
(collectively, "LIENS"). Such units are not bound by or subject to any proxy, agreement, voting
trust or other restriction regarding the transfer or voting thereof (other than as set forth in the
Operating Agreement), and good and marketable title to such units shall be transferred to the Buyer
as of the date hereof free and clear of any Liens.
4.2. AUTHORITY. The Seller has full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of the Seller, and no other corporate proceedings on
the part of the Seller are necessary to authorize this Agreement or to consummate the transactions
so contemplated.
4.3 ENFORCEABILITY. This Agreement has been duly and validly executed and delivered by the
Seller and constitutes the legal, valid and binding obligation of the Seller enforceable against it
in accordance with its terms.
5. Miscellaneous Provisions.
5.1 ASSIGNMENT. This Agreement shall be binding on and inure to the benefit of the Parties
and their successors and permitted assigns.
5.2 GOVERNING LAW. This Agreement shall be construed in accordance with the internal laws
of the Commonwealth of Massachusetts without regard to its conflicts of law principles.
5.3 SEVERABILITY. In the event that any one or more of the provisions (or any part thereof)
contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, then to the maximum extent permitted by law, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement; PROVIDED, HOWEVER, that if
the deletion of any provision hereof frustrates an essential purpose of this Agreement or material
rights of a Party, the Parties shall seek in good faith alternative provisions or arrangements to
achieve the same purposes as the invalid, illegal or unenforceable provision.
5.4 COUNTERPARTS. This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
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5.5 INTEGRATED DOCUMENT. This Agreement constitutes the entire agreement between the
Parties relating to the subject matter hereof, and all prior agreements shall be deemed merged into
the provisions of and superseded by this Agreement. No amendment or supplement hereof shall be
effective or binding on any Party unless reduced to writing and executed by the duly authorized
representatives of all the Parties.
5.6 NOTICES. Any notice given in connection with this Agreement shall be in writing and
shall be delivered (i) by certified first class mail, return receipt requested, (ii) by a
nationally-recognized express courier delivery service, (iii) by hand, or (iv) by facsimile
transmission, in each case addressed to the Parties as follows: (A) if to the Buyer at ▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇; and (B) if to the Seller at ▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Any such address may be changed by written notice given in accordance herewith. Any notice
shall be deemed given as follows: (a) if given in the manner described in clause (i), five (5) days
after being deposited with the U.S. Postal Service, (b) if given in the manner described in clause
(ii), the next business day after being deposited for delivery with the courier; (c) if given in the
manner described in clause (iii), when delivered; and (d) if given in the manner described in clause
(iv), when transmitted (provided that the sender receives and retains electronic confirmation of the
successful completion of such facsimile transmission).
5.7 CONSTRUCTION. The Parties have participated jointly in the negotiation and drafting of
this Agreement. In the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of
proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement.
[Remainder of Page Left Intentionally Blank]
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IN WITNESS WHEREOF, this Purchase and Sale Agreement has been executed under seal by the
Parties as of the date first above written.
SELLER: BUYER:
T3 THERAPEUTICS, INC.
By:__________________________ _____________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Title:
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EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement, dated as of June 25, 2002, is by and among T3
Therapeutics, LLC, a Delaware limited liability company (the "COMPANY"), and those investors set
forth on Schedule A attached hereto (the "INVESTORS"). The Company and the Investors may be
collectively referred to as the "PARTIES."
WHEREAS, the Investors have agreed to purchase membership units of the Company; and
WHEREAS, as a condition of such purchase the Investors have requested certain rights to
require the Company to register their membership units for public distribution.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties agree as follows:
1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the respective meanings set forth
below:
"CLASS B UNITS" shall mean up to 250 Units designated as Class B Units and issued to the
Investors by the Company pursuant to the terms and conditions of the Limited Liability Company
Agreement.
"COMMISSION" shall mean the Securities and Exchange Commission, or any other federal agency
at the time administering the Securities Act.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended, and any similar
federal statute successor thereto, and the rules and regulations of the Commission promulgated under
the Exchange Act, as they each may, from time to time, be in effect.
"FORM S-1" shall mean such form under the Securities Act as in effect on the date hereof or
any registration form under the Securities Act subsequently adopted by the Commission that is
provided for the initial public offering of equity securities by a domestic corporation.
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"FORM S-3" shall mean such form under the Securities Act as in effect on the date hereof or
any registration form under the Securities Act subsequently adopted by the Commission that permits
inclusion or incorporation of substantial information by reference to other documents filed by the
Company with the Commission.
"HOLDER" means the Investors and any persons or entities to whom the rights granted under
this Agreement are transferred as permitted by Section 8.4 below.
"INTEREST" means the entire equity interest (or "limited liability company interest" as
such term is used in the Delaware Limited Liability Company Act) of a member in the Company and all
rights and liabilities associated therewith, including without limitation rights to distributions
(liquidating or otherwise), allocations, information, and rights to consent or approve.
"LIMITED LIABILITY COMPANY AGREEMENT" means the Limited Liability Company Agreement of the
Company, as it may be amended, supplemented or restated from time to time.
"PERSON" shall mean any natural person, corporation, limited liability company, trust,
partnership, joint venture, joint stock company, unincorporated organization, association, or any
other entity.
"REGISTER", "REGISTERED" and "REGISTRATION" shall refer to a registration effected by
preparing and filing a Registration Statement in compliance with the Securities Act and the
declaration or ordering of the effectiveness of such Registration Statement.
"REGISTRABLE UNITS" shall mean (i) the Class B Units, (ii) any Units issued upon the
exercise of preemptive rights or adjustment of the Class B Percentage Interest (as defined in the
Limited Liability Company Agreement) under the Agreement; and (iii) any other equities of the
Company issued in respect of such Units (because of equity dividends, equity splits, combinations,
reorganizations, recapitalizations or similar events involving a change in the capital structure of
the Company); PROVIDED, HOWEVER, that Registrable Units shall cease to be Registrable Units (x) upon
any sale pursuant to a Registration Statement or Rule 144, (y) upon any sale in any manner to a
Person which, by virtue of Section 8.4 of this Agreement, is not entitled to the registration rights
provided by this Agreement or (z) with respect to any Holder, if the Registrable Units then held by
such Holder may be sold to the public immediately without registration, including Units which may be
sold within a period of 90 days under Rule 144.
"REGISTRATION EXPENSES" shall mean expenses incurred by the Company in complying with the
registration requirements of this Agreement including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel and independent public accountants
for the Company, fees and expenses (including counsel fees) incurred in connection with complying
with state securities or "blue sky" laws, fees of the National Association of Securities Dealers,
Inc., transfer taxes, fees of transfer agents and registrars, and reasonable fees and disbursements
of one counsel for the Selling Holders (such fees and disbursements not to exceed [$50,000] per
registration), but excluding any Selling Expenses.
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"REGISTRATION STATEMENT" shall mean a registration statement filed by the Company with the
Commission pursuant to the Securities Act for a public offering and sale of securities of the
Company; PROVIDED, that the definition of Registration Statement shall not include: (i) a
registration statement on Form S-8 or Form S-4, or their successors, or any other form for a limited
purpose or (ii) any registration statement covering only securities proposed to be issued in
exchange for securities or assets of another entity.
"RULE 144" means Rule 144 as promulgated by the Commission under the Securities Act, as
such Rule may be amended from time to time, or any similar successor rule that may be promulgated by
the Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and any similar federal
statute successor thereto, and the rules and regulations of the Commission promulgated under the
Securities Act, as they each may, from time to time, be in effect.
"SELLING EXPENSES" shall mean all underwriting discounts and selling commissions applicable
to the sale of Registrable Units and the fees of more than one counsel to the Selling Holders.
"SELLING HOLDER" shall mean any holder of Registrable Units exercising the registration
rights set forth in Section 2 or 3 hereof.
"UNITS" means equal units representing the Interests of the several members of the Company
at any particular time, each of which Units shall have rights and duties the same as each other Unit
unless the Limited Liability Company Agreement shall expressly provide differing rights, powers and
duties with respect to separate classes or series of Units.
2. DEMAND REGISTRATION RIGHTS
2.1 REQUEST FOR REGISTRATION. On the date that is 6 months after the initial registered
public offering of Units, a Holder may, by written notice (an "INITIAL DEMAND REGISTRATION NOTICE")
to the Company request that the Company effect a registration under Section 5 of the Securities Act
of a specified number of Registrable Units. The Initial Demand Registration Notice shall state the
number of Registrable Units for which the notice applies and the expected aggregate proceeds of the
offering (prior to underwriting discounts and commissions) as well as the intended method of
distribution. If the Holder intends to distribute the Registrable Units by means of an underwriting,
it shall so advise the Company in the Initial Demand Registration Request.
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2.2 FORM S-1 DEMAND REGISTRATION RIGHTS. If, at the time the Company receives an Initial
Demand Registration Notice, the Company is not eligible to file a Registration Statement on Form
S-3, the Company may effect the registration on Form S-1; PROVIDED, HOWEVER, that the Company shall
have no obligation to effect such registration if the number of Registrable Units designated in the
Initial Demand Registration Notice constitutes less than 50% of the Registrable Shares entitled to
demand registration rights pursuant to this Agreement In connection with an underwritten public
offering of the Registrable Units, the Selling Holders shall enter into an underwriting agreement in
customary form with the Company and the underwriter or underwriters selected for such underwriting
by the Selling Holders (which underwriter or underwriters shall be reasonably acceptable to the
Company). Subject to the provisions, hereof, the Company shall use its best efforts to effect the
registration, as expeditiously as possible, on Form S-1 of all Registrable Units which the Company
has been requested so to register pursuant to this Section 2.2 and Section 2.4 below.
2.3 FORM S-3 DEMAND REGISTRATION RIGHTS. If, at the time the Company receives an Initial
Demand Registration Notice, the Company is eligible to file a Registration Statement on Form S-3,
the Company may effect the registration on Form S-3; PROVIDED, HOWEVER, that the Company shall have
no obligation to effect such registration if (i) the number of Registrable Units designated in the
Initial Demand Registration Notice constitutes less than 20% of the Registrable Units entitled to
demand registration rights pursuant to this Agreement and (ii) the minimum market value of any
offering and registration of Registrable Shares made pursuant to this Section 2.3 shall be estimated
to be less than $1,000,000 (prior to deductions for underwriting discounts and commissions) at the
time of filing such Registration Statement. Subject to the provisions hereof, the Company shall use
its best efforts to effect the registration, as expeditiously as possible, on Form S-3 of all
Registrable Units which the Company has been requested so to register pursuant to this Section 2.3
and Section 2.4 below.
2.4 NOTICE TO OTHER HOLDERS. Upon receipt of any Initial Demand Registration Notice, the
Company shall promptly give written notice of such proposed registration to all Holders. Each Holder
shall have the right, by giving written notice (an "ADDITIONAL DEMAND REGISTRATION NOTICE" and
together with the Initial Demand Registration Notice, the "DEMAND REGISTRATION NOTICES") to the
Company within 15 days after the Company provides its notice to elect to have included in such
registration such of the Holder's Registrable Units as such Holder may request in such notice of
election. A Holder's failure to deliver an Additional Demand Registration Notice during the
above-referenced 15 day period shall be deemed a waiver by such Holder of its right to participate
in such registration.
2.5 REGISTRATION OF LESS THAN ALL OF THE REGISTRABLE UNITS. Notwithstanding any other
provision of this Section 2 to the contrary, if the managing underwriter of any underwritten
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offering advises the Company in writing (and the Company shall promptly so advise the Selling
Holders in writing of same) that, in its opinion, the number of securities requested to be included
in such registration exceeds the number which can be sold in such offering within a price range
acceptable to the Selling Holders holding a majority of the Registrable Units for which Demand
Registration Notices have been delivered, then they may at their option within 10 days of the date
on which such notice is delivered to the Selling Holders (i) agree to reduce the number of
Registrable Units included in the underwriting (subject to the minimum percentage and market value
requirements set forth in Sections 2.2 or 2.3, as the case may be) or (ii) withdraw the Demand
Registration Notices. Any Registrable Units excluded or withdrawn from such underwriting shall be
withdrawn from the registration. The determination of the Selling Holders referenced above shall be
evidenced by a writing (the "WITHDRAWAL NOTICE") and delivered to the Company within the
above-referenced 10-day period. Failure to deliver a Withdrawal Notice within the specified period
shall result in the automatic withdrawal of the registration request. If the Selling Holders elect
to withdraw a request for registration, the Registration Expenses incurred by the Company in
connection with such withdrawn registration shall be reimbursed by such Selling Holders; PROVIDED,
HOWEVER, that if such Selling Holders elect, (which such election shall be included with the
Withdrawal Notice) in writing, to treat the withdrawn registration as a registration for the
purposes of this Section 2, the Company shall pay such Registration Expenses.
2.6 LIMITS ON REGISTRATION RIGHTS. The registration rights set forth herein shall be
subject to the following limitations:
(i) The Company shall not be required to effect more than 2 Form S-1 registrations
pursuant to this Section 2.
(ii) The Company shall not be required to effect any registration on Form S-1 pursuant
to this Section 2 within six (6) months after the effective date of any other
Registration Statement of the Company.
(iii) If at the time of any request to register Registrable Units pursuant to this
Section 2, the Company is engaged or has fixed plans to engage within 180 days of
the time of the request in a registered public offering as to which the Holders
may include Registrable Units pursuant to Section 3 or is engaged in any other
activity which, in the good faith determination of the Company's Board of
Managers, would be adversely affected by the requested registration to the
material detriment of the Company, then the Company may at its option direct that
such request be delayed for a period not in excess of six months from the
effective date of such offering or the date of commencement of such other material
activity, as the case may be, such right to delay a request to be exercised by the
Company not more than once in any 18 month period.
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For the purposes of Subsections (i) and (ii) above, a registration shall not count until it
becomes effective.
2.7 PRIORITY ON DEMAND REGISTRATIONS. The Company shall be entitled to include in any
Registration Statement referred to in this Section 2, for sale in accordance with the method of
disposition specified by the Selling Holders, Units to be sold by the Company for its own account
and for the account of other selling holders, except as and to the extent that, in the reasonable
opinion of the managing underwriter (if such method of disposition shall be an underwritten public
offering), or in the opinion of the Board of Managers (if such method of disposition shall not be an
underwritten public offering), such inclusion would materially and adversely affect such public
offering. A written copy of such opinion of the managing underwriter or Board of Managers shall be
provided to any Selling Holder upon such holder's request.
3. PIGGY BACK REGISTRATION RIGHTS.
3.1 PIGGYBACK REGISTRATION RIGHTS. If, at any time (other than pursuant to Section 2), the
Company determines to register any of its securities 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-8 or its then equivalent, or in connection with a
Rule 145 transaction or Form S-4 or its equivalent, or another form not available for registering
the Registrable Units for sale to the public), each such time it will give prompt written notice to
the Holders of its intention so to do and of the proposed method of distribution of such securities.
Upon the written request of any such Holder, received by the Company within 10 days after the giving
of any such notice by the Company, to include in the registration a designated number of its
Registrable Units, the Company will cause such Registrable Units to be covered by the Registration
Statement proposed to be filed by the Company, all to the extent and under the conditions such
registration is permitted under the Securities Act. A Holder's failure to deliver such notice during
the above-referenced 10 day period shall be deemed a waiver by such Holder of its right to
participate in such registration.
In connection with any offering involving an underwriting of shares of the Company's
capital interests, the Company shall not be required under this Section 3 to include any of the
Registrable Units in such underwriting unless the Selling Holders accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected by it (or by other
persons entitled to select the underwriters) and enter into such underwriting agreement with an
underwriter or underwriters selected by the Company. In connection with any such underwriting
agreement, the Selling Holders shall not be required to make representations and warranties other
than representations and warranties regarding their ownership and title to the Registrable Units
being sold and the plan of distribution with respect to the Registrable Units.
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3.2 PRIORITY ON PRIMARY REGISTRATIONS. In the event that a registration pursuant to this
Section 3 is an underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of securities requested
to be included in such registration would materially and adversely affect such public offering, the
Company will include in such registration (A) FIRST, the securities the Company proposes to sell,
(B) SECOND, the Registrable Units requested to be included in such registration which in such
opinion of such underwriters can be sold, pro rata among the Selling Holders on the basis of the
number of Registrable Units owned by such holders, with further successive pro rata allocations
among the Selling Holders if any such holder had requested the registration of less than all such
Registrable Units it is entitled to register, and (C) THIRD, other securities requested to be
included in such registration. Notwithstanding the foregoing to the contrary, other securities
requested to be included in such registration to the extent granted registration rights pari passu
with the Registrable Units shall be treated on a pro rata basis with the Registrable Units for the
purposes of this Section 3.2.
3.3 PRIORITY ON SECONDARY REGISTRATIONS. In the event that a registration pursuant to this
Section 3 is an underwritten secondary registration on behalf of holders of the Company's securities
(other than a demand registration under this Agreement) and the managing underwriters advise the
Company in writing that in their opinion the number of securities requested to be included in such
registration would materially and adversely affect such public offering, the Company will include in
such registration (x) FIRST, the securities requested to be included therein by the holders
requesting such registration, (y) SECOND, the Registrable Units requested to be included in such
registration which in such opinion of such underwriters can be sold, pro rata among the Selling
Holders on the basis of the number of Registrable Units owned by such holders, with further
successive pro rata allocations among the Selling Holders if any such holder has requested the
registration of less than all such Registrable Units it is entitled to register, and (z) THIRD,
other securities requested to be included in such registration. Notwithstanding the foregoing to the
contrary, other securities requested to be included in such registration to the extent granted
registration rights pari passu with the Registrable Units shall be treated on a pro rata basis with
the Registrable Units for the purposes of this Section 3.3.
4. MARKET STAND-OFF.
4.1 RESTRICTIONS ON COMPANY OFFERINGS. The Company shall not effect any public sale or
distribution of its Units or any securities convertible into or exchangeable or exercisable for
Units, during the 7 days prior to and during the 60 day period beginning on the effective date of
any underwritten registration pursuant to Section 2 (except as part of such underwritten
registration or pursuant to registrations on Form S-4 or Form S-8 or any successor form or as part
of any other issuance of Units in exchange for securities or assets of another corporation), unless
the underwriters managing such registered public offering otherwise agree; PROVIDED, HOWEVER, that
the restrictions pursuant to this Section 4.1 shall expire 60 days from the effective date of the
second demand registration pursuant to Section 2.
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4.2 RESTRICTIONS ON OFFERINGS OF HOLDERS. Other than pursuant to Section 3, the holders of
Registrable Units shall not effect any public sale or distribution of their Registrable Units, or
any securities convertible into or exchangeable or exercisable for Registrable Units, during the 7
days prior to and during the 60 day period beginning on the effective date of any underwritten
registration of Units initiated by the Company unless the underwriters managing such registered
public offering otherwise agree.
5. REGISTRATION PROCEDURES. If and whenever the Company is required by the provisions of Section 2
or 3 to use its best efforts to effect the registration of any Registrable Units under the
Securities Act, the Company will, at its cost and expense, as expeditiously as reasonably
practicable:
(a) prepare and file with the Commission a Registration Statement (which, in the case of an
underwritten public offering pursuant to Section 2.2, shall be on Form S-1 or other form of general
applicability satisfactory to the managing underwriter selected as therein provided) with respect to
such securities and use it best efforts to cause such Registration Statement to become and remain
effective for up to 3 months for a registration pursuant to Section 2.2 and up to 6 months for a
registration pursuant to Section 2.3 or, if earlier until the distribution has been completed;
(b) prepare and file as expeditiously as reasonably practicable and in any event within 90
days 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 Subsection (a) above and comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Units covered by such Registration
Statement in accordance with the Selling Holders' intended method of disposition set forth in such
Registration Statement for such period;
(c) furnish to each Selling Holder and to each underwriter such number of copies of the
Registration Statement and the prospectus included therein (including each preliminary prospectus)
as such persons reasonably may request in order to facilitate the public sale or other disposition
of the Registrable Units covered by such Registration Statement;
(d) use its best efforts to register or qualify the Registrable Units covered by such
Registration Statement under the securities or "blue sky" laws of such jurisdictions as the Selling
Holders or, in the case of an underwritten public offering, the managing underwriter reasonably
shall request, provided, however, that the Company shall not for any such purpose be required to
qualify generally to transact business as a foreign corporation in any jurisdiction where it is not
so qualified or to consent to general service of process in any such jurisdiction;
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(e) use its best efforts to list the Registrable Units covered by such Registration
Statement with NASDAQ or any securities exchange on which the Units of the Company is then listed,
or NASDAQ or such securities exchange as shall be selected by the Company;
(f) promptly notify each Selling Holder and each underwriter under such Registration
Statement, at any time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event of which the Company has knowledge 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 a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the circumstances then existing;
(g) notify each Selling Holder under such Registration Statement of (i) the effectiveness
of such Registration Statement, (ii) the filing of any post-effective amendments to such
Registration Statement, or (iii) the filing of a supplement to such Registration Statement;
(h) deliver to all Selling Holders as soon as reasonably possible after effectiveness of
such Registration Statement an earning statement covering a period of at least twelve months
beginning after the effective date of the Registration Statement as referred to in Section 11(a) of
the Securities Act; and
(i) make available for inspection upon reasonable notice during the Company's regular
business hours by each Selling Holder, any underwriter participating in any distribution pursuant to
such Registration Statement, and any attorney, accountant or other agent retained by such Selling
Holder or underwriter, all material 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 Selling Holder, underwriter, attorney, accountant or
agent in connection with such Registration Statement.
6. OTHER MATTERS RELATING TO REGISTRATION.
6.1 INFORMATION FROM SELLING HOLDERS. It shall be a condition precedent to the obligations
of the Company to take any action pursuant to this Agreement with respect to the Registrable Units
that the Selling Holders shall furnish to the Company such information regarding themselves, the
Registrable Units held by them, and the intended method of disposition of such securities as shall
be required to effect the registration of the Registrable Units or to comply with applicable state
securities laws. In no way limiting the foregoing, the Selling Holders shall complete and execute
all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of any such underwriting arrangements.
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6.2 PROSPECTUS DELIVERY. The Selling Holders acknowledge that there may be times (including
without limitation the circumstances as described in Section 2.6 hereof) when, notwithstanding the
Company's efforts described in Section 5, the Company must temporarily suspend the use of the
prospectus forming a part of any such Registration Statement until such time as (i) the Company has
filed an amendment to such Registration Statement and such amendment has been declared effective by
the Commission, (ii) the Company has supplemented the relevant prospectus, or (iii) the Company has
filed an appropriate report with the Commission pursuant to the Exchange Act. The Company shall use
its best efforts to promptly notify the Selling Holders, at any time when a prospectus relating to
the Registrable Units covered by such Registration Statement is required to be delivered under the
Securities Act or of the happening of an 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 a material fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing. During any period in which sales are
suspended, the Selling Holders agree not to sell any such Registrable Units pursuant to any such
prospectus. Subject only to the Company's right to give notice of a suspension period as permitted
under Section 2.6, the Company shall promptly provide the Selling Holders with revised prospectuses
and, following receipt of the revised prospectuses, the Selling Holders shall be free to resume
making offers of the Registrable Units.
6.3. EXPENSES. The Company will pay all Registration Expenses in connection with each
Registration Statement under the registration requirements of this Agreement. All Selling Expenses
in connection with each Registration Statement under the registration requirements of this Agreement
shall be borne by the Selling Holders in proportion to the number of Registrable Units sold by each,
or by such Selling Holders other than the Company (except to the extent the Company shall be a
seller) as they may agree.
6.4 LOCK-UP AGREEMENTS. Each Holder who, at the time of the proposed filing of the first
Registration Statement for an underwritten offering by the Company or by a Selling Holder,
beneficially owns 1% or more of the outstanding capital interest of the Company, on a
fully-converted, fully-diluted basis, shall, agree, to be bound by such lock-up agreements as the
managing underwriter of any such registration shall specify as a requirement to any such
underwriting.
7. INDEMNIFICATION AND CONTRIBUTION.
7.1 COMPANY INDEMNIFICATION. In the event of a registration of any of the Registrable Units
pursuant to this Agreement, the Company will indemnify and hold harmless each Selling Holder, each
underwriter of such Registrable Units thereunder and each other person, if any, who controls such
seller or underwriter within the meaning of the Securities Act (each a "SELLER INDEMNIFIED PARTY"),
against any claims, damages, liabilities, losses, judgments, settlements and expenses, including
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without limitation, all reasonable fees and disbursements of counsel actually incurred incident to
the investigation or defense of any claim or proceeding or threatened claim or proceeding,
(collectively, the "DAMAGES"), to which such Seller Indemnified Party may become subject under the
Securities Act or otherwise, insofar as such Damages arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in any Registration Statement
under which such Registrable Units were registered pursuant to this Agreement, 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 or (ii) any
violations of applicable securities law relating to such registration (collectively, the
"VIOLATIONS"). The indemnification obligations of the Company set forth in this Section 7.1 shall
not apply to the following:
(a) amounts paid in settlement of any such Damages if such settlement is effected
without the written consent of the Company (which consent shall not be
unreasonably withheld or delayed);
(b) Damages that arise out of or are based upon a Violation that occurs in reliance
upon and in conformity with information furnished in writing expressly for use in
connection with such registration by a Seller Indemnified Party;
(c) Damages arising from the sale of Registrable Units to any Person by a Seller
Indemnified Party that failed to send or give a copy of the prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) to that Person within the time required by the Securities
Act, and if the prospectus (as so amended or supplemented) would have cured the
defect giving rise to such Damages; and
(d) Damages that are finally judicially determined to result primarily from actions
taken or omitted to be taken by a Seller Indemnified Party due to such party's
willful misconduct or gross negligence.
7.2 SELLING HOLDER INDEMNIFICATION. In the event of a registration of any of the
Registrable Units pursuant to this Agreement, each Selling Holder thereunder, severally and not
jointly, will indemnify and hold harmless the Company, each 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 (each a "COMPANY INDEMNIFIED PARTY"), against
all Damages, to which a Company Indemnified Party may become subject under the Securities Act or
otherwise, insofar as such Damages arise out of or are based upon any untrue statement or alleged
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untrue statement of any material fact contained in any Registration Statement under which such
Registrable Units were registered pursuant to this Agreement, 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. Notwithstanding the foregoing to the
contrary, a Selling Holder will be liable hereunder if and only to the extent that any such Damages
arise out of or are based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with information furnished to the Company
by such Selling Holder in writing specifically for use in the Registration Statement or prospectus;
PROVIDED, that the liability of such Selling Holder hereunder shall be limited to the proportion of
any such Damages that are equal to the proportion that the public offering price of the units sold
by such Selling Holder under such Registration Statement bears to the total public offering price of
all securities sold thereunder, but not in any event to exceed the net proceeds (after underwriting
discounts and commissions) received by such Selling Holder in respect of shares sold by such Selling
Holder. The indemnification obligations of each Selling Holder set forth in this Section 7.2 shall
not apply to the following:
(a) amounts paid in settlement of any such Damages if such settlement is effected
without the written consent of those Selling Holders holding a majority of those
Registrable Units sold or to be sold to the public (which consent shall not be
unreasonably withheld or delayed); or
(b) Damages that are finally judicially determined to result primarily from actions
taken or omitted to be taken by a Company Indemnified Party due to such party's
willful misconduct or gross negligence
7.3 INDEMNIFICATION PROCEDURE. The indemnified party shall promptly notify the indemnifying
party in writing of any claim it may have for indemnification under this Section 7, including the
institution of any legal action against the indemnified party specifying in reasonable detail the
Damages and the nature of the claim. Failure of an indemnified party to promptly give such notice
shall not relieve the indemnifying party of its obligation to indemnify hereunder, but as a result
of such failure, the indemnifying party shall not be liable to the indemnified party for the amount
of Damages caused by such failure. In case any action shall be brought against the indemnified
party, notification shall be given to the indemnifying party of the commencement thereof. The
indemnifying party shall be entitled to participate therein and, to the extent that it shall wish,
to assume the defense thereof. After notice from the indemnifying party to the indemnified party of
its election so to assume the defense thereof (with counsel reasonably acceptable to the indemnified
party) and of its agreement to be fully responsible for all liability arising from such action, the
indemnifying party shall not be liable to the indemnified party for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by the indemnified party, in
connection with the defense thereof. The indemnified party shall furnish at the indemnifying party's
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reasonable request and expense, information and assistance necessary for such defense. The
indemnified party shall have the right to employ separate counsel in such action and to participate
in the defense thereof, but the fees and expenses of such counsel shall not be at the expense of the
indemnifying party unless the indemnified party reasonably concludes (based on the advice of
counsel) that the indemnifying party and the indemnified party have conflicting interests or
different defenses available with respect to such action in which case the reasonable fees and
expenses of counsel to the indemnified party shall be considered "Damages" for purposes of this
Section 7. The indemnifying party shall not settle or compromise a claim without prior written
notice to and consent of the indemnified party, which consent shall not be unreasonably withheld or
delayed.
7.4 CONTRIBUTION. If the indemnification provided for in this Section 7 is held by a court
of competent jurisdiction (by the entry of a final judgment or decree and the expiration of time to
appeal or the denial of the last right of appeal) to be unavailable to an indemnified party with
respect to any Damages, then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by the indemnified party as a result of such Damages
in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the
one hand, and of the indemnified party on the other, in connection with the statements or omissions
that resulted in such Damages, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission; PROVIDED, HOWEVER, that, in any such
case (A) the Selling Holder will not be required to contribute any amount in excess of the net
proceeds (after underwriting discounts and commissions) from the offering received by such Selling
Holder, and (B) no Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of
fraudulent misrepresentation.
7.4 SURVIVAL. The indemnification and contribution provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on behalf of the
indemnified party or any officer, director or controlling Person of such indemnified party and will
survive for such indemnified party and such officers, directors or controlling Persons of such
indemnified party the transfer of securities.
8. MISCELLANEOUS
8.1 RULE 144 REPORTING AND RULE 144A INFORMATION. With a view to making available the
benefits of certain rules and regulations of the Commission that may at any time permit the resale
of the Registrable Shares without registration, the Company will at all times after 90 days after
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the initial registered public offering of the Company's Units or following registration under
Section 12 of the Exchange Act:
(a) make and keep public information available, as those terms are understood and
defined in Rule 144 under the Securities Act;
(b) file with the Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and
(c) furnish to each Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of such Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed by the
Company as such Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing such Holder to sell any Registrable Units
without registration.
In addition, the Company shall, at the request of any Holder, make available to such Holder
and to any prospective transferee of such Holder the information concerning the Company described in
Rule 144A(d)(4) under the Securities Act.
8.2. LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after the date hereof, the
Company shall not, without the prior written consent of the Holders holding no less than a majority
of the Registrable Units enter into any agreement with any holder or prospective holder of any
securities of the Company which would give such holder or prospective holder registration rights
which are superior to those of the Holders hereunder.
8.3 TERMINATION OF REGISTRATION RIGHTS. Notwithstanding anything contained herein to the
contrary, this Agreement and the registration rights set forth herein shall terminate and be of no
further force or effect on the fifth anniversary of the consummation of the Company's initial
registered public offering of Units.
8.4 ADDITIONAL PARTIES. If any Holder transfers any Registrable Units such Holder shall
cause the execution by such transferee of a counterpart of this Agreement and an amendment adding
such transferee's name as a signatory hereto. This Agreement shall thereafter be amended and
restated to include such transferee without the necessity of procuring an amendment to this
Agreement by the other Parties. Any such transferee acquiring Registrable Units from a Holder, shall
be deemed a "Holder" hereunder.
8.5 CHANGES IN UNITS. If, and as often as, there is any change in the Class B Units by way
of a equity split, equity dividend, combination or reclassification, or through a merger,
consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment
shall be made in the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to Class B Units as so changed.
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8.6 GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with
the laws of the State of Delaware, without giving effect to the principles of conflicts of law
thereof.
8.7 DAMAGES. The Company recognizes and agrees that the Holders will not have an adequate
remedy if the Company fails to comply with this Agreement and that damages may not be readily
ascertainable, and the Company expressly agrees that, in the event of such failure, it shall not
oppose an application by a Holder requiring specific performance of any and all provisions hereof or
enjoining the Company from continuing to commit any such breach of this Agreement.
8.8 NOTICES. All notices under this Agreement shall be sent to the respective Parties at
the address specified in the preamble hereof, in the case of the Company, and on the Schedules
attached hereto, in the case of the other Parties, or such other address as each such Party may
designate in writing. All notices, requests, consents and other communications hereunder shall be
deemed to have been properly given (i) if by hand, at the time of the delivery thereof to the
receiving Party at the address of such Party set forth above, (ii) if made by facsimile
transmission, at the time that receipt thereof has been acknowledged by electronic confirmation or
otherwise, (iii) if sent by overnight courier, on the next business day following the day such
notice is delivered to the courier service, or (iv) if sent by registered or certified mail, on the
third business day following the day such mailing is made.
8.9 OTHER GENERAL PROVISIONS. This Agreement, along with all exhibits and schedules hereto,
constitute the entire agreement of the Parties with regard to the subject matter hereof and
supersede all prior and contemporaneous agreements and understandings, whether oral or written, of
any of the Parties with respect thereto. If any provisions of this Agreement shall be determined to
be illegal or unenforceable by any court of law, the remaining provisions shall be severable and
enforceable to the maximum extent possible in accordance with their terms. This Agreement shall be
binding upon and inure to the benefit of the Parties and their permitted successors and assigns,
legal representatives and heirs. Neither this Agreement nor any provision hereof can be modified,
amended, changed, discharged or terminated except by an instrument in writing, signed by the Company
and the holders of no less than a majority of the Registrable Shares. This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be an original (a facsimile shall be
deemed an original), but all of which taken together shall constitute one and the same instrument.
The Parties have participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed
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as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.
[Remainder of Page Left Intentionally Blank]
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IN WITNESS WHEREOF, the undersigned have executed this Registration Rights Agreement as an
instrument under seal as of the day and year first above written.
T3 THERAPEUTICS, LLC
By:____________________________________
Name:
Title:
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INVESTOR
___________________________________ _________________________________
(Signature) (Print Name)
Address:___________________________
___________________________
If an entity:
___________________________________
(Name of entity)
By: __________________________
Title: __________________________
Address:___________________________
___________________________________
(IF THE INVESTOR IS OTHER THAN AN INDIVIDUAL, PLEASE INDICATE THE FULL LEGAL NAME OF THE ENTITY AND
THE CAPACITY OR TITLE OF THE INDIVIDUAL SIGNING ON ITS BEHALF.)
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Schedule A
Investors
Investor: Number of Shares
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Total
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