Exhibit 4
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AMENDED AND RESTATED LIMITED LIABILITY
COMPANY AGREEMENT
OF
MICRO INVESTMENT, LLC
A DELAWARE LIMITED LIABILITY COMPANY
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of MICRO
INVESTMENT, LLC, a Delaware limited liability company (the "Company"), dated as
of May 31, 2001, by and among the persons and entities listed on Exhibit A
hereto (the "Members").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Warburg, ▇▇▇▇▇▇ Equity Partners, L.P. ("WPEP"), Warburg, ▇▇▇▇▇▇
Netherlands Equity Partners I, C.V. ("WPNEP I"), Warburg, ▇▇▇▇▇▇ Netherlands
Equity Partners II, C.V. ("WPNEP II") and Warburg, ▇▇▇▇▇▇ Equity Partners III,
C.V. ("WPNEP III" and together with WPEP, WPNEP I and WPNEP II, the "Initial
Members") have caused a limited liability company to be formed pursuant to the
Delaware Limited Liability Company Act, 6 Del. C.ss.ss.18-101, et. seq., as
amended from time to time (the "Act"), by causing a Certificate of Formation of
the Company (the "Certificate") to be filed with the office of the Secretary of
State of the State of Delaware on May 23, 2001;
WHEREAS, the Initial Members entered into a Limited Liability Company
Agreement, dated May 23, 2001 (the "Original Agreement");
WHEREAS, the Company has entered into that certain Securities Purchase
Agreement, dated as of May 25, 2001 (the "Purchase Agreement"), by and between
the Company and Micro Therapeutics, Inc. ("MTI"), pursuant to which the Company
has agreed to purchase the number of shares of common stock, par value $0.001
per share, of MTI (the "Common Stock") provided therein;
WHEREAS, pursuant to the Purchase Agreement, the Company shall purchase
Common Stock at one or more closings (each, a "Closing");
WHEREAS, the Initial Members desire to continue the Company and to amend
and restate the Original Agreement to provide for, among other things, the
addition of Vertical Fund Associates, L.P. and Vertical Life Sciences L.P.
(collectively, "Vertical") and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇ (collectively, the
"Vertomed Members") as additional Members of the Company and intend such amended
and restated agreement to govern the respective obligations of the parties
hereto; and
WHEREAS, the Members hereby constitute themselves a limited liability
company for the purposes and on the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I.
INTRODUCTORY PROVISIONS
Section 1.1. Certain Definitions. As used herein:
"Act" shall have the meaning specified in the recitals hereto.
"Additional Capital Contribution" shall have the meaning specified in
Section 2.1(c).
"Affiliate" shall mean, with respect to any Person, any other Person who
controls, is controlled by or is under common control with such Person.
"Attributed Shares" shall have the meaning specified in Section 2.3(a).
"Board" shall mean the board of directors of MTI.
"Book Value" shall have the meaning specified in Section 2.2.
"Capital Account" shall have the meaning specified in Section 3.1.
"Capital Contribution" shall mean the contributions by a Member to the
capital of the Company pursuant to this Agreement.
"Certificate" shall have the meaning specified in the recitals hereto.
"Closing" shall have the meaning specified in the recitals hereto.
"Code" shall mean the Internal Revenue Code of 1986, as amended. Any
reference to a section of the Code shall include a reference to any amendatory
or successor provision thereto.
"Contribution Percentage" shall mean the percentage that is equal to the
Capital Contribution made by a Member expressed as a percentage of the Capital
Contributions made by all Members, as specified in Exhibit A hereto, as such
Exhibit A shall be amended from time to time to reflect Members' Capital
Contributions.
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"Disproportionate Liquidity Event" shall have the meaning specified in
Section 2.3(a).
"First Capital Contribution" shall have the meaning specified in Section
2.1(a).
"Fiscal Year" shall have the meaning specified in Section 3.4.
"Indemnified Persons" shall have the meaning specified in Section 5.3.
"Initial Members" shall have the meaning specified in the recitals hereto.
"Interest" shall mean the proportionate interest of a Member in the Company
based on such Member's Capital Account relative to the Capital Accounts of all
Members, determined immediately prior to the event requiring such determination.
"Liquidating Member" shall have the meaning specified in Section 7.2(a).
"Managing Member" shall mean WPEP.
"MTI" shall have the meaning specified in the recitals hereto.
"MTI Board" shall have the meaning specified in Section 5.5(a).
"Net Profits" and "Net Losses" shall mean the income and loss of the
Company as determined in accordance with the accounting methods followed by the
Company for Federal income tax purposes including income exempt from tax and
described in Code Section 705(a)(1)(B), treating as deductions items of
expenditure described in, or under Treasury Regulations deemed described in,
Code Section 705(a)(2)(B) and treating as an item of gain (or loss) the excess
(deficit), if any, of the fair market value over (under) its Book Value in the
case of distributed property and for purposes of adjustments to Book Value
pursuant to Section 2.2 hereof. Depreciation, depletion, amortization, income
and gain (or loss) with respect to Company assets shall be computed with
reference to their Book Value rather than to their adjusted bases.
"Notices" shall have the meaning specified in Section 8.2(a).
"Original Agreement" shall have the meaning specified in the recitals
hereto.
"Participating Members" shall mean such Members as elect to participate in
a Disproportionate Liquidity Event.
"Participation Percentage" shall mean, with respect to each
Disproportionate Liquidity Event, the product of (x) the amount obtained by (i)
dividing the Book Value of the Common Stock disposed of by the Company on behalf
of a Member in connection with such event by the Book Value of all Common Stock
so disposed of and (y) 100, expressed as a percentage.
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"Person" shall mean an individual, corporation, association, limited
liability company, limited liability partnership, partnership, estate, trust,
unincorporated organization or a government or any agency or political
subdivision thereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares" shall mean the shares of Common Stock held by the Company.
"Transfer" shall mean any direct or indirect sale, assignment, gift,
hypothecation, pledge or other disposition, whether voluntary or by operation of
law, by sale of stock or partnership interests, or otherwise, of an Interest or
of any entity which directly or indirectly through one or more intermediaries
holds an Interest.
"Treasury Regulations" shall mean the regulations promulgated by the U.S.
Department of the Treasury under the Code.
"Unrestricted Members" shall mean the Initial Members and Vertical.
"Vertical" shall have the meaning specified in the recitals hereto.
"Vertomed Members" shall have the meaning specified in the recitals hereto.
"WPEP" shall have the meaning specified in the recitals hereto.
Section 1.2. Name. The name of the Company shall be "MICRO INVESTMENT,
LLC".
Section 1.3. Principal Place of Business. The Company's principal place of
business shall be at such place as the Managing Member shall designate from time
to time.
Section 1.4. Purposes. The purposes of the Company shall be to conduct any
lawful business, purpose or activity; provided, however, the Company shall not
engage in any act or activity requiring the consent or approval of any state
official, department, board, agency or other body, without such consent or
approval first being obtained. The Company shall have the power to do any and
all acts and things necessary, appropriate, proper, advisable, incidental to or
convenient for the furtherance and accomplishment of such purposes, and for the
protection and benefit of its business.
Section 1.5. Duration. The Company was formed on May 23, 2001, upon the
filing of the Certificate with the Office of the Secretary of State of Delaware
pursuant to the Act and shall continue until dissolved pursuant to Section 7.1.
Section 1.6. Limitation of Liability. The liability of each Member and each
employee of the Company to third parties for obligations of the Company shall be
limited to the fullest extent provided in the Act and other applicable law.
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ARTICLE II.
CAPITAL CONTRIBUTIONS; OTHER FINANCING; INTERESTS IN THE
COMPANY; DISPOSITION OF SHARES
Section 2.1. Capital Contributions; Purchase of Common Stock.
(a) Initial Contribution. Subject to the terms and conditions contained
herein, on the First Closing Date (as defined in the Purchase Agreement),
concurrently with the execution of this Agreement, each Member shall contribute
to the Company and the Company shall receive an amount in cash set forth
opposite such Member's name on Exhibit A (the "First Capital Contribution") and
thereafter each Member shall have a corresponding Contribution Percentage as set
forth in such Exhibit A, which Contribution Percentage shall be adjusted from
time to time by the Managing Member to properly reflect the admission of new
Members or any other event having an effect on a Member's Contribution
Percentage. No Member will have the right to withdraw or be repaid any Capital
Contribution, except as provided in this Agreement.
(b) Initial Purchase of Common Stock. On the First Closing Date, the
Company shall use the Members' First Capital Contributions to purchase shares of
Common Stock as set forth in the Purchase Agreement.
(c) Subsequent Closings. Subject to the terms and conditions contained
herein, on the Additional First Closing Date (as defined in the Purchase
Agreement), if any, and the Second Closing Date (as defined in the Purchase
Agreement), if any, each Member shall contribute, in such Member's Contribution
Percentage, an amount in cash (each, an "Additional Capital Contribution") to
the Company so that the Company shall receive an aggregate amount in cash
sufficient to purchase the number of shares of Common Stock provided in the
Purchase Agreement to be purchased by the Company on such Closing Date.
Notwithstanding the foregoing, the Vertomed Members' Additional Capital
Contributions shall not exceed the respective amounts set forth on Exhibit B
hereto; any excess required to make the additional purchases contemplated by
this Section 2.1(c) shall be contributed by the Initial Members, pro rata
according to their respective Contribution Percentages. Following each
Additional Capital Contribution, the Managing Member shall cause the Capital
Contribution amounts set forth on Exhibit A to be adjusted proportionately by
the amount of the Additional Capital Contribution.
(d) Subsequent Purchases of Common Stock. On each subsequent Closing Date
(if any), the Company shall use the Members' Additional Capital Contributions to
purchase shares of Common Stock as set forth in the Purchase Agreement.
(e) Contributions and Purchases of Common Stock after the final Closing.
From and after the final Closing to have occurred pursuant to the Purchase
Agreement, subject to the terms and conditions contained herein, additional
purchases of Common Stock may be made by the Company at the discretion of the
Managing Member, including without limitation purchases pursuant to the
Company's subscription
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right pursuant to Section 4.5 of the Purchase Agreement. Each Unrestricted
Member shall be given the opportunity but shall not be required to participate
in any such additional purchase by contributing additional capital to the
Company in such an amount as to maintain its Contribution Percentage. Each
Unrestricted Member wishing to participate in any such additional purchase shall
contribute to the Company and the Company shall receive an amount in cash less
than or equal to the aggregate dollar amount of such additional purchase
multiplied by such Member's Contribution Percentage immediately prior to the
time of such additional purchase. In the event any such Member fails to
contribute its Contribution Percentage, any other Unrestricted Member may
contribute such Member's Contribution Percentage, and if more than one
Unrestricted Member so elects, the electing Unrestricted Members may contribute
in proportion to their existing Capital Contributions. Following any such
Capital Contribution, the Managing Member shall cause the Capital Contribution
amounts and the Contribution Percentages set forth on Exhibit A to be adjusted
accordingly.
Section 2.2. Determination of Book Value of Company Assets.
(a) Book Value. Except as set forth below, Book Value of any Company asset
is its adjusted basis for federal income tax purposes.
(b) Initial Book Value. The initial Book Value of any assets contributed by
a Member to the Company shall be the gross fair market value of such assets at
the time of such contribution.
(c) Adjustments. The Book Values of all of the Company's assets may be
adjusted by the Company to equal their respective gross fair market values, as
determined by the Managing Member, as of the following times: (a) the admission
of a new Member to the Company or the acquisition by an existing Member of an
additional interest in the Company from the Company; (b) the distribution by the
Company of money or property to a retiring or continuing Member in consideration
for the retirement of all or a portion of such Member's interest in the Company;
(c) the termination of the Company for Federal income tax purposes pursuant to
Section 708(b)(1)(B) of the Code; and (d) such other times as determined by the
Managing Member.
(d) Depreciation and Amortization. The Book Value of a Company asset shall
be adjusted for the depreciation and amortization of such asset taken into
account in computing Net Profits and Net Losses and for Company expenditures and
transactions that increase or decrease the asset's Federal income tax basis.
Section 2.3. Disposition of Shares.
(a) For purposes of this Section 2.3, at any given time, each Unrestricted
Member shall be attributed such portion of the Shares (such Member's "Attributed
Shares") as shall equal the number of Shares multiplied by such Member's
Contribution Percentage. Any Transfer by the Company of a portion of an
Unrestricted Member's Attributed Shares without a Transfer of the same
percentage of each other Member's Attributed Shares shall hereinafter be called
a "Disproportionate Liquidity Event."
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(b) If an Unrestricted Member wishes for the Company to Transfer any of
such Unrestricted Member's Attributed Shares and either (i) a registration
statement under the Securities Act in respect of the Shares is effective or (ii)
such shares may be Transferred pursuant to Rule 144 under the Securities Act or
another exemption under the Securities Act, then the Managing Member shall use
reasonable efforts following receipt of written notice from such Unrestricted
Member to cause the Company to Transfer shares of Common Stock, in an amount
requested by such Unrestricted Member (but not to exceed such Member's
Attributed Shares) as soon as reasonably practicable. The net proceeds (after
commissions and expenses of Transfer) from any such Transfer shall be
distributed promptly thereafter as provided in Section 4.3. Neither the Company
nor the Managing Member shall have any liability to any Member in connection
with any Transfer pursuant to this Section 2.3, including any liability relating
to a decline in the trading price for the Common Stock during the period between
the date on which the written notice is provided and the date on which the
Transfer is consummated.
(c) Other than as set forth in Section 2.3(b), the Managing Member shall
direct the Transfer or other disposition of the Shares. Notwithstanding any
other provision of this Agreement, no Vertomed Member shall have any power to
Transfer or otherwise dispose or to direct the Transfer or other disposition of
any of the Shares.
Section 2.4. Withdrawal of Capital; Limitation on Distributions. No Member
shall be entitled to withdraw any part of its Capital Contributions to, or to
receive any distributions from, the Company except as provided in Section 4.2,
Section 4.3 and Section 7.2. No Member shall be entitled to demand or receive
(i) interest on its Capital Contributions or (ii) any property from the Company
other than cash pursuant to Section 2.3 or as provided in Section 7.2(a).
Section 2.5. Restoration of Funds. Except as otherwise provided by law, no
Member shall be required to restore to the Company any funds properly
distributed to it pursuant to Section 4.2.
Section 2.6. Restrictions on Transfers. No Member may Transfer any Interest
without the prior written consent of the Managing Member. Upon any approved
transfer, Exhibit A hereto shall be amended accordingly.
ARTICLE III.
BOOKS; ELECTIONS; BUDGETS; FISCAL YEAR
Section 3.1. Administrative Services, Books, Records and Reports. The
Managing Member shall cause to be performed all general and administrative
services on behalf of the Company in order to assure that complete and accurate
books and records of the Company are maintained at the Company's principal place
of business showing the names, addresses and Interests of each of the Members,
all receipts and expenditures, assets and liabilities, Net Profits and Net
Losses, and all other records necessary for recording the Company's business and
affairs, including a capital account for each Member (a "Capital Account").
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Section 3.2. Adjustment of Capital Accounts.
(a) Each Member's Capital Account shall be increased by:
(i) the amount of any money contributed by the Member to the Company;
(ii) the fair market value of any property contributed by the Member
to the Company;
(iii) the amount of Net Profits allocated to the Member; and
(iv) the amount of any Company liabilities assumed by such Member (or
taken subject to) if property is distributed to the Member by the Company.
(b) Each Member's Capital Account shall be decreased by:
(i) the amount of any money distributed to the Member by the Company;
(ii) the fair market value of any property distributed to the Member
by the Company;
(iii) the amount of Net Losses allocated to the Member; and
(iv) the amount of any Member liabilities assumed by the Company (or
taken subject to) if property is contributed to the Company by the Member.
(c) The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Treasury Regulations under Section 704(b) of the Code and, to the extent not
inconsistent with the provisions of this Agreement, shall be interpreted and
applied in a manner consistent with such Treasury Regulations.
Section 3.3. Federal Income Tax Elections; Method of Depreciation. The
Managing Member shall determine the method of depreciation to be utilized by the
Company for tax purposes and all elections to be made by the Company for tax
purposes. The Managing Member shall designate one Member to be the "tax matters
partner" for all purposes of the Code.
Section 3.4. Fiscal Year. The fiscal year of the Company (the "Fiscal
Year") shall end on Sunday closest to December 31.
ARTICLE IV.
ALLOCATIONS AND DISTRIBUTIONS
Section 4.1. Allocation of Net Profits and Net Losses.
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(a) Subject to Section 4.1(c) hereof, (i) Net Profits shall first be
allocated in proportion, to and to the extent of, the excess of prior
allocations of Net Losses under Section 4.1(b)(ii) below over prior allocations
of Net Profits under this Section 4.1(a)(i) and, then, (ii) among the Members in
proportion to their Interests.
(b) (i) Net Losses shall first be allocated among the Members in proportion
to their Contribution Percentages until the Capital Account of any Member is
reduced to zero, then (ii) among the Members in proportion to, and to the extent
of, their positive Capital Account balances and, finally, (iii) to the Members
in proportion to their Contribution Percentages.
(c) Notwithstanding any other provision of this Agreement to the contrary,
Net Profits or Net Losses (or items thereof) directly attributable to a
Disproportionate Liquidity Event (as determined by the Managing Member in its
reasonable discretion) shall be specially allocated to the Participating Members
in proportion to their respective Participation Percentages.
(d) Tax credits shall be allocated among the Members in proportion to their
Contribution Percentages.
(e) When the Book Value of a Company asset differs from its basis for
Federal or other income tax purposes, solely for purposes of the relevant tax
and not for purposes of computing Capital Account balances, income, gain, loss,
deduction and credit shall be allocated among the Members under the traditional
method with curative allocations under Treasury Regulation Section 1.704-3(c).
Section 4.2. Distributions. Subject to Section 4.3, distributions of cash
and other property shall be made at such time and in such amounts as determined
by the Managing Member and shall be made among the Members in proportion to and
to the extent of their positive Capital Account balances.
Section 4.3. Special Distribution. Notwithstanding any provision of this
Agreement to the contrary, cash or other property attributable to a
Disproportionate Liquidity Event shall be distributed promptly to the Members in
proportion to their respective Participation Percentages.
ARTICLE V.
MANAGEMENT;
RIGHTS AND OBLIGATIONS UNDER THE PURCHASE AGREEMENT
Section 5.1. Management by the Managing Member.
(a) General Provisions. The management of the Company shall be vested in
the Managing Member. The decision of the Managing Member shall be controlling.
The Managing Member shall have all authority, rights and powers in the
management of the Company business to do any and all acts and things necessary,
proper, appropriate,
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advisable, incidental or convenient to effectuate the purposes of this
Agreement. Any action taken by the Managing Member on behalf of the Company in
accordance with the foregoing provisions shall constitute the act of and shall
serve to bind the Company.
(b) Delegation of Powers. The Managing Member may by instrument in writing
delegate its powers, but not its responsibilities, to officers or agents or
employees of the Company or of any Member or to any other Person; provided,
however, that no Person shall be entitled to rely on such delegation unless
presented with a copy of such written instrument.
(c) Bank Accounts. The Managing Member may cause the Company to open and
maintain bank accounts, and all funds of every kind and nature received by the
Company shall be deposited in such accounts. Signatories for such accounts shall
be authorized from time to time by the Managing Member.
Section 5.2. Admission of New Members. New or additional Members may be
admitted to the Company at any time upon the consent of the Managing Member. In
the event of the admission of new or additional Members, Exhibit A hereto shall
be amended accordingly.
Section 5.3. Indemnification.
(a) The Managing Member, the officers of the Company and their respective
Affiliates will not be liable to the Company or to any other Member for any act
or omission based upon errors of judgment or other fault in connection with the
business or affairs of the Company (including, without limitation, any losses in
connection with the provisions of Section 2.3 or any act or omission in
connection with the termination of the Company or the winding up of its affairs
or any distribution of its assets in connection therewith), except for losses,
claims, damages, liabilities or expenses that a court of competent jurisdiction
determines resulted from the actual fraud or willful misconduct of such persons.
(b) Any Person made, or threatened to be made, a party to any action or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that such Person is or was (i) a Member or (ii) an employee,
officer, director, shareholder or partner of a Member, or (iii) such other
Persons (including employees of the Company) as the Managing Member may
designate from time to time, in its sole and absolute discretion (collectively,
the "Indemnified Persons"), shall be indemnified by the Company for any losses
or damage sustained with respect to such action or proceeding, and the Company
shall advance such Indemnified Person's reasonable related expenses to the
fullest extent permitted by law. The Company shall have the power to purchase
and maintain insurance on behalf of the Indemnified Persons against any
liability asserted against or incurred by them. The duty of the Company to
indemnify the Indemnified Persons under this Section 5.3 shall not extend to
actions or omissions of any Indemnified Person which are grossly negligent or
which involve fraud, misrepresentation, bad faith, or other willful misconduct
by such Indemnified Person or
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which are in material breach or violation by such Indemnified Person of this
Agreement or which are in derogation of the fiduciary duties owed by such
Indemnified Person to the Company and the Members, in each case as determined by
a court of competent jurisdiction. No Indemnified Person shall be liable to the
Company or any other Member for actions taken in good faith. The duty of the
Company to indemnify the Indemnified Persons under this Section 5.3 shall be
limited to the assets of the Company, and no recourse shall be available against
any Member for satisfaction of such indemnification obligations of the Company.
Section 5.4. Voting of Common Stock.
(a) Except as set forth in Section 5.5(a) hereof, the Managing Member shall
cause the Company to vote the shares of Common Stock held by the Company in
accordance with the written instructions of each Unrestricted Member, in
proportion to the each such Unrestricted Member's Contribution Percentage. The
Managing Member shall direct the vote of any Shares that are not an Unrestricted
Member's Attributed Shares, or for which written instructions have not been
received in accordance with the preceding sentence.
(b) Notwithstanding any other provision of this Agreement, no Vertomed
Member shall have any power to vote or to direct the vote of any of the Shares.
Section 5.5. Other Purchase Agreement Provisions.
(a) The Managing Member shall determine the nominees of the Company to the
Board of Directors of MTI (the "MTI Board") pursuant to Section 4.4 of the
Purchase Agreement, except that from and after the Second Closing Date, so long
as the Company has the right to at least two (2) MTI Board nominees, Vertical
shall determine one of such nominees. The Managing Member shall cause the
Company to vote all the Shares in favor of the election of each such nominee. As
of the First Closing Date, the MTI Board nominee of the Company shall be ▇▇▇▇ ▇.
▇▇▇▇▇▇▇. As of the Second Closing Date, the Vertical nominee shall be ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ and the nominees determined by the Managing Member shall be ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇.
(b) The Managing Member shall, in its sole discretion, cause the Company to
exercise all other rights of the Company under the Purchase Agreement in such a
manner as to, to the extent practicable, cause the Members to obtain the
benefits of such rights in accordance with their respective Contribution
Percentages.
(c) The Managing Member shall cause the Company to fulfill all its
obligations under the Purchase Agreement in such a manner as to, to the extent
practicable, cause the Members to bear the costs of such obligations in
accordance with their respective Contribution Percentages.
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ARTICLE VI.
EMPLOYMENT OF AFFILIATES
Section 6.1. Parties Employed. Subject to the approval of the Managing
Member, the Company may contract for services to be performed for the Company by
Members or Affiliates of any Member. In the case of the employment of a Member
or of Affiliates of a Member, the compensation to be paid by the Company to such
Member or Affiliates shall be not greater than the compensation generally paid
to third parties for comparable services in comparable locations.
ARTICLE VII.
DISSOLUTION AND LIQUIDATION
Section 7.1. Dissolution. The Company shall be dissolved upon the
occurrence of any of the following:
(a) The decision of the Managing Member to dissolve the Company, upon ten
(10) days notice to each of the Members;
(b) the bankruptcy, death, dissolution, expulsion, incapacity, or
withdrawal of any Member, unless within ninety (90) days after such event the
Company is continued by the consent of the Managing Member;
(c) the entry of a decree of judicial dissolution under Section 18-802 of
the Act; or
(d) (unless the Managing Member shall determine, prior to such date, to
continue the Company indefinitely or for a specified period of time) the second
anniversary of the Second Closing Date (as defined in the Purchase Agreement)
or, if the Second Closing shall not have occurred, the second anniversary of the
final Closing to have occurred pursuant to the Purchase Agreement.
Section 7.2. Winding up Affairs and Distribution of Assets.
(a) Upon dissolution of the Company, and in the absence of an election to
continue the business of the Company pursuant to Section 7.1(b), the Managing
Member shall be the liquidating Member (the "Liquidating Member") and shall
proceed to wind up the affairs of the Company, liquidate the remaining property
and assets of the Company and wind-up and terminate the business of the Company.
The Liquidating Member shall cause a full accounting of the assets and
liabilities of the Company to be taken and shall cause the assets to be
liquidated and the business to be wound up as promptly as possible by either or
both of the following methods: (1) selling the Company assets and distributing
the net proceeds therefrom (after the payment of Company liabilities) to each
Member in satisfaction of its Capital Account; or (2) if the Managing Member
shall so decide, distributing the Company assets to the Members in kind and
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debiting the Capital Account of each Member with the fair market value of such
assets, each Member accepting an undivided interest in the Company assets
(subject to their liabilities) in proportion to and to the extent of each
Member's positive Capital Account balance after allocating and crediting to the
Capital Accounts the unrealized gain or loss to the Members as if such gain or
loss had been recognized and allocated pursuant to Section 4.1.
(b) If the Company shall employ method (1) as set forth in Section 7.2(a)
in whole or part as a means of liquidation, then the proceeds of such
liquidation shall be applied in the following order of priority: (i) first, to
the expenses of such liquidation; (ii) second, to the debts and liabilities of
the Company (including debts of the Company to the Members or their Affiliates
and any fees and reimbursements payable under this Agreement), in the order of
priority provided by law; (iii) third, a reasonable reserve shall be set up to
provide for any contingent or unforeseen liabilities or obligations of the
Company to third parties (to be held and disbursed, at the discretion of the
Liquidating Member, by an escrow agent selected by the Liquidating Member) and
at the expiration of such period as the Liquidating Member may deem advisable,
the balance remaining in such reserve shall be distributed as provided herein;
(iv) fourth, to the Members in accordance with Article IV.
(c) If the Company shall employ method (2) as set forth in Section 7.2(a)
in whole or part as a means of liquidation, then, prior to such liquidation, the
Managing Member shall cause the Company to assign its rights under the Purchase
Agreement to each of the Members. To the extent any such rights may be
quantified or divided, such rights shall be assigned to the Members in
proportion to and to the extent of each Member's positive Capital Account
balance after allocating and crediting to the Capital Accounts the unrealized
Net Profit or Net Loss to the Members as if gain or loss had been recognized and
allocated pursuant to Section 4.1. To the extent the foregoing is impracticable,
such rights shall inure to the Managing Member; in such case, the Managing
Member shall, to the extent practicable, cause the Members to obtain the
benefits of such rights in accordance with the proportions provided in the
preceding sentence.
(d) In connection with the liquidation of the Company, the Members
severally, jointly, or in any combination upon which they may agree, shall have
the first opportunity to make bids or tenders for all or any portion of the
assets of the Company, and such assets shall not be sold to an outsider except
only for a price higher than the highest and best bid of a single Member, the
Members jointly, or a combination of Members.
ARTICLE VIII.
MISCELLANEOUS
Section 8.1. Certificate Requirements. From time to time the Managing
Member shall sign and acknowledge all such writings as are required to amend the
Certificate or
13
for the carrying out of the terms of this Agreement or, upon dissolution of the
Company, to cancel such Certificate. The Managing Member is hereby designated as
an authorized person to sign the Company's Certificate and any other documents
that are appropriate and necessary to effectuate the purpose of this Agreement.
Section 8.2. Notices.
(a) All Notices, consents, approvals, reports, designations, requests,
waivers, elections and other communications (collectively, "Notices") authorized
or required to be given pursuant to this Agreement shall be given in writing and
either personally delivered to the Member to whom it is given or delivered by an
established delivery service by which receipts are given or mailed by registered
or certified mail, postage prepaid, or sent by telex or telegram or electronic
telecopier, addressed to the Member at its address listed on Exhibit A hereto.
(b) All Notices shall be deemed given (i) when delivered personally to the
recipient, (ii) when sent to the recipient (with receipt confirmed by sender's
machine) by telecopy if during normal business hours of the recipient, otherwise
on the next business day, or (iii) one (1) business day after the date sent to
the recipient (three (3) business days in the case of international delivery) by
reputable express courier service (charges prepaid). Any Member may change its
address for the receipt of Notices at any time by giving Notice thereof to all
of the Managing Member, in which event Exhibit A hereto shall be amended
accordingly. Notwithstanding the requirement in Section 8.2(a) as to the use of
registered or certified mail, any routine reports required by this Agreement to
be submitted to Members at specified times may be sent by first-class mail.
Section 8.3. Parties in Interest; Third-Party Beneficiaries.
(a) Neither this Agreement nor any of the rights, duties, or obligations of
any party hereunder may be transferred or assigned by a party hereto, except in
connection with a Transfer of Interests as specified in Section 2.6. Subject to
the foregoing, this Agreement shall be binding upon, and inure to the benefit of
the parties hereto and their respective successors and assigns.
(b) This Agreement shall not confer any rights or remedies upon any person
or entity other than the parties hereto, the Indemnified Persons, and their
respective permitted successors and assigns.
Section 8.4. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof,
and supersedes all prior agreements and understandings among the Members with
respect to the subject matter hereof.
Section 8.5. Modification. No change or modification of this Agreement
shall be of any force unless such change or modification is in writing and has
been signed by the Managing Member. No waiver of any breach of any of the terms
of this Agreement shall be effective unless such waiver is in writing and signed
by the Member against whom such waiver
14
is claimed. No waiver of any breach shall be deemed to be a waiver of any other
or subsequent breach.
Section 8.6. Severability. If any provision of this Agreement shall be held
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby. Furthermore, in lieu of any such invalid, illegal or
unenforceable term or provision, the parties hereto intend that there shall be
added as a part of this Agreement a provision as similar in terms to such
invalid, illegal or unenforceable provision as may be possible and be valid,
legal and enforceable.
Section 8.7. Limitation on Enforcement of Remedies. Each Member hereby
agrees that it will not assert against the limited partners of any other Member
any claim it may have under this Agreement by reason of any failure or alleged
failure of such Member to meet its obligations to the Company or the other
Members hereunder or otherwise.
Section 8.8. Further Assurances. Each Member shall execute such deeds,
assignments, endorsements, evidences of Transfer and other instruments and
documents and shall give such further assurances as shall be necessary to
perform its obligations hereunder.
Section 8.9. Governing Law. This Agreement shall be governed by and be
construed in accordance with the laws of the State of Delaware.
Section 8.10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
Section 8.11. Waiver of Partition. Each Member hereby waives its right to
bring an action for partition of any of the property owned by the Company.
15
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of
the day and date first set forth above.
WARBURG, ▇▇▇▇▇▇ EQUITY PARTNERS, L.P.
By: Warburg, ▇▇▇▇▇▇ & Co., General Partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Partner
WARBURG, ▇▇▇▇▇▇ NETHERLANDS EQUITY
PARTNERS I, C.V.
By: Warburg, ▇▇▇▇▇▇ & Co., General Partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Partner
WARBURG, ▇▇▇▇▇▇ NETHERLANDS EQUITY
PARTNERS II, C.V.
By: Warburg, ▇▇▇▇▇▇ & Co., General Partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Partner
WARBURG, ▇▇▇▇▇▇ NETHERLANDS EQUITY
PARTNERS III, C.V.
By: Warburg, ▇▇▇▇▇▇ & Co., General Partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Partner
16
VERTICAL FUND ASSOCIATES, L.P.
By: Vertical Group, L.P., General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: General Partner
VERTICAL LIFE SCIENCES L.P.
By: Vertical Group, L.P., General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: General Partner
17
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Seng
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
18
EXHIBIT A
Members Contribution Contribution Percentage
Warburg, ▇▇▇▇▇▇ Equity Partners, L.P. $5,631,120.00 82.11%
Warburg, ▇▇▇▇▇▇ Netherlands Equity $178,766.25 2.61%
Partners I, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Netherlands Equity $119,175.00 1.74%
Partners II, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Netherlands Equity $29,793.75 0.43%
Partners III, C.V.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Vertical Fund Associates, L.P. $530,636.25 7.74%
Vertical Life Sciences L.P. $132,660.00 1.93%
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $122,456.25 1.79%
▇▇▇▇ ▇▇▇▇▇▇▇ $61,226.25 0.89%
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ $24,495.00 0.36%
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $13,608.75 0.20%
▇▇▇▇ ▇▇▇▇▇▇▇ $13,608.75 0.20%
c/o Vertomed, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------- -----------
TOTAL $6,857,546.25 100%
EXHIBIT B
Maximum Contribution Amounts of Vertomed Members
----------------------------------------- --------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $1,000,000.00
----------------------------------------- --------------------
▇▇▇▇ ▇▇▇▇▇▇▇ $500,000.00
----------------------------------------- --------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Seng $200,033.46
----------------------------------------- --------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $111,129.70
----------------------------------------- --------------------
▇▇▇▇ ▇▇▇▇▇▇▇ $111,129.70
----------------------------------------- --------------------
